Lords Sitting of 7 February 1957

Preamble
The House met at three of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers

WHEAT IMPORTS
3.6 p.m.
LORD BARNBY: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government if, with regard to wheat imports into the United Kingdom, they will indicate the latest available figures showing—

(a) Proportion of Canadian origin against all others;

(b) Average price paid for:

(i) Canadian;

(ii) all other origins.]

LORD CHESHAM: My Lords, in the month of December, 1956, wheat of Canadian origin formed 46·6 per cent. of all wheat imported into the United Kingdom. The average price was £31 Is. per ton c.i.f., compared with £28 11s. for wheat from other sources overseas.
LORD BARNBY: My Lords, I thank the noble Lord. Can be give an indication if that figure for December approximates with the figures for the total year.
LORD CHESHAM: My Lords, I will give the noble Lord the figures for the total year, and he can make his own deduction. For the calendar year, 1956, the percentage of wheat of Canadian origin was 55 per cent., at an average price of £29 8s., as against £27 2s. for wheat from other sources.

BRITISH CONSULATE-GENERAL AT NICE
VISCOUNT ELIBANK: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether, having regard to the fact that
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the British Consulate-General at Nice was to be closed on 31st January, and that the Marseilles Consulate is held to be an inadequate substitute, they will set up a Consulate at Monaco to provide consular facilities for British residents and British trading interests on the French Riviera.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE EARL OF GOSFORD): My Lords, Nice is not the only post, nor the French Riviera the only area, to be affected by the search for economies in Government expenditure overseas. Her Majesty's Government do not accept the thesis, referred to by the noble Viscount, that Her Majesty's Consulate-General at Marseilles is an inadequate substitute for Her Majesty's Consulate-General at Nice. The possibility of setting up a Consulate at Monaco has been most carefully considered; but this course has been rejected, since Her Majesty's Government are confident that Her Majesty's Consul-General at Marseilles will be successful in his efforts to meet the reasonable requirements of British residents and interests on the French Riviera. Given a fair trial, this arrangement should be successful.
VISCOUNT ELIBANK: My Lords, I beg to thank the noble Earl for his Answer. May I ask him whether Her Majesty's Government will not reconsider this matter, and whether they will bear in mind that British trading and residential interests on the Riviera are unanimously of the opinion that the proposed consular facilities at and from Marseilles will be totally inadequate, and that without consular facilities at Monaco, or elsewhere, actually on the Riviera, there will be grave inconvenience and a distinct danger that British industrial interests, which now show a considerable profit to the London insurance market, may be replaced by American and German interests?
THE EARL OF GOSFORD: My Lords, I cannot possibly give any hope to the noble Viscount of a reconsideration of this decision. In regard to his remaining remarks, I will bring them to my right honourable friend's attention, though I know that he is fully aware of them and has taken them into full consideration in the decision to which he has already come.

HOMICIDE BILL
Brought from the Commons; read1aand to be printed.

SUNDAY ENTERTAINMENTS ACT, 1932
THE MINISTER OF EDUCATION (VISCOUNT HAILSHAM): My Lords, this is the first of three similar Motions standing in my name on the Order Paper. It may be the desire of the House that I should say what I have to say on the first and, if your Lordships accept that, that I should move the other two formally. I have no doubt that to most of your Lordships the procedure under this Act is more familiar than it was to me. Broadly speaking, the procedure originates in a resolution before the local authority, which goes before a town meeting; then, if either side complains of the result of the voting of the town meeting (which almost always the beaten side does), there is a local poll, and if that yields a positive result, an Order has to be laid for positive approval before both Houses of Parliament. In all these three cases there was a local poll, after the early procedure had taken its devious course. In each case the local poll supported the proposal by a substantial majority—in the two Welsh cases by an overwhelming majority; in the Sidmouth case by rather less. I think I have now said enough. I beg to move.
Moved, That the Order made by the Secretary of State for the Home Department, for extending section one of the Sunday Entertainments Act, 1932, to the Urban District of Abertillery, be approved—(Viscount Hailsham.)
LORD BURDEN: My Lords, is it possible for the noble and learned Viscount to say whether the Order also includes details of the amount, in each instance, that the local authority are taking from the cinema people by way of Sunday entertainments tax?
VISCOUNT HAILSHAM: My Lords, the Order does not so specify. This is a matter which, as the noble Lord is aware, has already been canvassed, and I think cm the 20th of this month the House will have an opportunity of discussing it more appropriately, perhaps, than in connection with the present
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Orders which do not really raise the topic.
On Question, Motion agreed to.
VISCOUNT HAILSHAM: My Lords, I beg to move the second Order.
Moved, That the Order made by the Secretary of State for the Home Department, for extending section one of the Sunday Entertainments Act, 1932, to the Urban District of Bedwellty, be approved—(Viscount Hailsham.)
On Question, Motion agreed to.
VISCOUNT HAILSHAM: My Lords, I beg to move the third Order.
Moved, That the Order made by the Secretary of State for the Home Department, for extending section one of the Sunday Entertainments Act, 1932, to the Urban District of Sidmouth, be approved.—(Viscount Hailsham.)
On Question, Motion agreed to.

TRANSPORT (RAILWAY FINANCES) BILL
3.17 p.m.
Order of the Day for the Second Reading read.
THE PARLIAMENTARY SECRETARY, MINISTRY OF DEFENCE (LORD MANCROFT): My Lords, two months ago, your Lordships debated the Government's White Paper entitled Proposals for the Railways. The noble Lord, Lord Lucas of Chilworth, was pleased to call it a very searching debate. It was, indeed; and it is for that reason that I am not proposing to search again to-day over the ground that your Lordships traversed on November 27 last. The White Paper is, however, the background against which this Bill must be judged.
I would briefly remind your Lordships of the main points which emerge from the White Paper. The British Transport Commission, in their part of the White Paper, made a frank and detailed review of their financial position and of their future prospects. They have incurred substantial losses, and they foresaw that they must continue to do so for some years. But they thought that by about 1962 they should, by their own efforts, have overcome their financial difficulties. Meanwhile, there lay ahead a tough

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period, and in that period the situation must be tackled with urgency and with decision if it was not to become irretrievable. The physical needs of the railways would, and could, be met by the Modernisation Plan, but some action outside the Commission's own powers was necessary on the financial side. For this reason, the Commission urgently recommended to the Government that some financial plan should be adopted which, while it avoided any idea of subsidy, would place the Commission's undertaking on a firm basis during the critical years of reconstruction. They deliberately requested that any relief temporarily accorded to them, should be strictly limited, both in time and amount.
The Government, in their part of the White Paper, naturally agree with the Commission that the rôle of British Railways in our country's economy is a vital and indispensable one. They are satisfied that the measures which the Commission are taking should enable them to overcome past handicaps and provide the country with a modern and up-to-date transport system—a system, moreover, which will pay its way. In the view of the Government, it is in the basic national interest that the railways should be put in a position to achieve this result. The Commission and the Government are both agreed that subsidy would provide no answer to the fundamental problems of the railways, The object of this Bill, therefore, is to help the Commission to survive the transitional period without subsidy. It has been drafted so as to enable the Commission to set up financial targets within their own organisation and thereby preserve the financial self-discipline which is essential to their recovery.
The proposals of the Government fall broadly into two parts, and they receive rather differing treatment under the Bill. The first part of their proposals concerns the interest payable on sums borrowed to finance the Railways Modernisation Plan. Before some of the items in the Modernisation Plan have begun to earn revenue, these interest charges will be a heavy burden in the Commission's revenues. To ease this burden, we propose that the purposes for which the Commission are already authorised to borrow under the 1947 Transport Act should be expanded
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temporarily to include the payment of interest on capital moneys borrowed by the Commission for British Railways.
This arrangement has two sorts of time limit attached to it. In the first place, the capital borrowings to which it will apply are confined to borrowings in the ten years up to the end of 1965. By then the Modernisation Plan will be well under way, and should be paying, even after providing for interest. In the second place, the Commission will not be allowed to borrow to meet interest, beyond the end of the third year, after the year in which they borrowed the capital. Let me give an example. Let us suppose that in this current year, 1957, the Transport Commission borrow £x for British Rail ways. Then they will be able to borrow to pay the interest accruing on this £x in the years 1957, 1958, 1,959 and 1960 only.
In commercial concerns, the practice of capitalising interest on expenditure which will not fructify for some years is, as your Lordships will realise, well recognised. With such concerns the period is, I believe, usually the construction period of each separate asset, With the Railways Modernisation Plan, however, it would obviously be a practical impossibility to segregate the assets and to deal with them separately, or to determine how much of the cost of each asset was to be financed by borrowing and how much from internal funds. The expedient has therefore been adopted of striking an average, which will give a result broadly similar to that which would have been obtained by calculating precisely the unproductive period of each asset.
The period provided in the Bill is not in the Government's view ungenerous to the Commission, and the Commission themselves, I understand, regard it as a reasonable one, While a large main-line electrification scheme might take five or six years to complete, other schemes, such as the purchase of diesel trains, wagons and coaching stock, will obviously begin to earn revenue after much shorter periods. Any borrowings made under these provisions will be from sources which normally provide the Commission with their capital funds and will count against the limit of £600 million laid down by the Transport (Borrowing Powers) Act. 1955. So much for the first main purpose of the Bill, which your Lordships will find expressed in paragraph (a) of subsection (1) of Clause 1.

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I now turn to the second part of the Government's proposals. It may help your Lordships to understand this rather complicated Bill if I emphasise that this second proposal is quite separate from the one I have just been talking about. It concerns the deficits incurred by the Commission on British Railways in 1956 and likely to be incurred in the next six years. This proposal is to give the Commission powers to borrow, by means of special advances, derived from the Consolidated Fund, the sums required to meet, first, the deficits on revenue account of British Railways during the years 1956 to 1962 inclusive, and secondly, the payment of interest on the special advances. This interest must, however, accrue not later than the end of the fifth year after that in which each special advance was made, but the Commission cannot borrow to meet interest accruing after 1964.
These powers to borrow by special advances to meet the railway deficits and interest on the special advances have not the same parallel, in normal practice, as borrowings to meet interest on capital monies borrowed. They are therefore treated differently. The money will be provided by the Government and will not count against the borrowing limit of £600 million fixed by the 1955 Act, to which I have just referred. The total amount which may be borrowed to meet the annual deficits on British Railways is, however, limited to £250 million. This is the kind of figure at which the Commission estimate the accumulated deficit will stand before they begin to reap any substantial benefit from their Modernisation Plan.
The sums which the Commission will be allowed to borrow by special advances from the Consolidated Fund will not be measured by the size of the revenue deficit incurred by British Railways taken by itself, Any surplus earned by the rest of the Commission's undertaking will be deducted from the purely railway deficit in fixing the amount to be borrowed. This provision was inserted quite deliberately, because the whole object of the Bill is to help the railways, which are the chief loss-makers. It is, in the Government's view, only right that the Commission should be required to use up any surplus they have earned on their other activities to meet railway
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deficits before they make use of the special loan facilities from the Consolidated Fund. The limiting period of 1956 to 1962 for the Commission's borrowing in respect of deficits, and the limiting period of five years in respect of interest on the deficits, have been fixed in the light of the Commission's estimates of the rate of improvement of their financial position. That is in paragraph (b) of the same subsection. Rates of interest on the advances to the Commission will be determined by the Minister, with the approval of thy Treasury. They will be based, broadly on rates of Government credit current at the time.
I must now turn to the important question of repayment of the loans. As I have already emphasised, both the Commission and the Government are determined to avoid any element of subsidy. Your Lordships will see that Clause 2 of the Bill firmly establishes the Commission's obligation to repay the advances. There is, however, considerable flexibility as to the method and timing of the repayments, to fit changing circumstances. Except for the initial repayments, which the Commission are required to make before the end of the seventh year—the amount of which is left to the Commission's discretion—control rests with the Minister and the Treasury. The Commission are required to begin repayment not later than the seventh year after the year to which an advance relates. This means that repayment of the first advances must begin in 1963. These provisions (like the date beyond which the Commission will no longer be able to obtain special advances) are related to the probable date by which we all hope the Commission should begin to get out of the red. They are given a target at which to aim. On the other hand, the discretion left to the Commission as to the timing and amounts of the initial repayments in respect of each advance may well prove useful to them if they should, happily, have a windfall or, on the other hand, if progress to the turning point is not quite so rapid as we all hope.
After the seventh year, control passes to the Treasury and the Minister. It should titer he easier to make a more realistic assessment of the Commission's capacity to repay advances and to determine whether the period should be, say, fifteen or twenty-five years. The advances

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relating to each year will be the subject of separate directions. There is, therefore, considerable scope for varying directions in respect of later advances, according to the development of the Commission's financial position. If, after a direction has been given, circumstances should vary either way, the direction can be varied to meet the new circumstances.
May I now deal briefly, and as simply as I can, with some of the accounting provisions which the Bill contains, The Commission are anxious that their revenue account should not show a heavy and increasing balance of deficit, either during the period of reconstruction or for some time afterwards. If it were not for the liability of the Commission to continue paying interest on their issued capital, which is all fixed-interest-bearing, the problem would be of an entirely different character. In similar circumstances, an ordinary company with equity stock would declare no dividends for the time being. Its shareholders would raise hopeful eyes to their reward in the future. Having regard to the future prospects of the railways, it is reasonable that the Commission should be allowed to transfer to what is, in effect, a suspense account, the railway deficits they will incur, after paying interest on British Transport Commission stock, during the reconstruction period, as well-as the additional interest they have to pay through borrowing to finance these deficits. Consequently, Clause 3 of the Bill requires the Commission to carry to a Special Account the deficits on British Railways and the interest which can be met out of moneys borrowed under the Bill. There has also to be carried to this Special Account the accumulated deficit on the Commission's revenue account at the end of 1955.
The total amount carried to the Special Account is to be reduced by such amounts as the Commission think fit. These amounts must not be less than the amounts which the Commission are required by the Bill to repay. In addition, the Minister, with the approval of the Treasury, can direct that the amount standing in the account in respect of the deficit up to the end of 1955 shall be reduced by such amount as they think fit. The gradual process of reduction will continue until the Special Account is extinguished. The Special Account has the merit of providing a simple way of
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modifying, in order to take account of the new arrangements, the Commission's general duty under the Transport Act, 1947. Under Section 3 of the Act, the British Transport Commission have a general duty so to conduct their undertaking, and to levy such charges, as to secure that the revenue of the Commission is not less than sufficient for making provision to meet charges properly chargeable to revenue, taking one year with another. This Bill modifies that duty to the extent that, in making this calculation, the Commission are not required to have regard to any amounts for the time being standing in the Special Account.
I do not, of course, want to give your Lordships the impression that this Bill in any way leaves the Commission without financial obligations in respect of the railways. On the contrary, the Commission will have a duty to repay moneys advanced to them; to keep within the ceiling of £250 million imposed on the special advances to meet deficits; and gradually to clear off the amounts standing in the Special Account. The arrangements are, I hope your Lordships will agree, flexible enough to ensure that, as the financial position of British Railways improves through modernisation and other measures, as the period during which the Commission can make transfers to the Special Account comes to an end and as the amounts standing in the Special Account become smaller and smaller, so the general duty of the Commission to break even progressively stiffens until it is ultimately as unqualified as it was under the 1947 Act.
Clause 4 defines "British Railways" for the purposes of the Bill. It is the Government's intention that the facilities for which the Bill provides should apply only to the railways as generally understood and to those activities which are incidental to the running of the railways. The Commission's accounts show separately the results of the various activities in which they are engaged, and therefore this definition should give rise to no practical difficulties. If, however, there should be any doubt whether some part of the Commission's undertaking is or is not part of British Railways, for the purposes of the Bill, the question falls to be determined by the Minister.
That, then, is the Bill which we have before us to-day. It is, as your Lordships

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will, I know, by now agree, a complicated Bill, but this is inevitable if we are to enable the Commission to tackle their problems, as they should do and as they themselves earnestly want to do, on a sound commercial basis, and also to preserve a proper sense of financial discipline within their undertaking. An out-and-out subsidy, which would have been much easier for me to explain, simply would not do this. Indeed, as the Commission themselves say in their Memorandum, to rely, in effect, on an indefinite subsidy would be disastrous to the self-respect of the undertaking, disastrous to their urge towards efficiency and disastrous to the basis of their relations with the public who now own them.
It is easy, my Lords, to deride British Railways and to make jokes about them, as is our custom with other time-honoured institutions like plumbers and mothers-in-law. I, however, am one of those who believe that, with all their faults, British Railways are, on the whole, providing a much better service to the community than the community is always prepared to admit—and that despite appalling difficulties, few of which are of their own making. In the course of the two and a half years in which I had the honour to represent Wales as Under-Secretary of State at the Home Office, I travelled nearly 30,000 miles on 13ritish Railways. I must confess that I saw remarkably little of the dirt, discourteousy and delay which some people, unhappily, seem to experience whenever they travel by train. But it is no use blinking the fact that, again for reasons largely outside then, control. British Railways have fallen sadly behind the times, particularly in the matter of equipment. From my own experience, however, it seems to me that most—I repeat most—of the men and women working on the railways are doing everything in their power to put matters to rights. It does not however rest wholly in their power, Hence this Bill.
It is no use thinking that, without some such measure as this, we can see the major improvements for which the Modernisation Plan provides: improvement of the speed and reliability of freight services by fitting all wagons with continuous brakes by new and extended marshalling yards and modernised railheads; and, on the passenger side, the achievement of faster, cleaner and more
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punctual services through electrification and other measures. In short, we cannot hope to see the restoration of our railways to their old and proud position of world pre-eminence, unless the British Transport Commission are given this means of bridging the few anxious years that he ahead. I therefore commend to your Lordships this means of so doing and trust that you will give the Bill a Second Reading.
Moved, that the Bill be now read 2a.—(Lord Mancroft.)
3.35 p.m.
LORD LUCAS OF CHILWORTH: My Lords, before I deal with the Bill before your Lordships' House, may I offer a word of welcome and commendation to the noble Lord who has moved its Second Reading? This is the first occasion on which he has had to stand at the Government Dispatch Box and speak upon transport matters. The noble Lord has tackled many tough assignments. Believe me, he has got one now of the toughest character, but if he tackles it with the charm and efficiency with which he has moved the Second Reacting of the Bill, I do not think any noble Lord, wherever he sits in your Lordships' House, will have the slightest complaint. The noble Lord has, of course, been optimistic—one of the things that I think anybody who talks on transport matters requires above everything else is optimism. But maybe he has been over-optimistic.
I do not intend to go back and traverse old ground, but the simple, unvarnished truth of what the noble Lord is doing this afternoon is to ask your Lordships to pass a Bill which will underwrite the losses of British Railways to the tune of £320 million. Of course, £320 million is a lot of money in any language, and that is the minimum. That is the amount written in the Bill—£70 million up to date and £250 million in the next six years, when it is hoped that the British Transport Commission are going to enter a balance and start to make a profit. As the noble Lord said, that is what they say they will do. But I have sufficient experience in the world of industry and commerce to know that I have made my fortune many and many a time on paper, but each time somehow, something has happened to disappoint me. So I am going to ask your Lordships to look at this a little more critically.

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At the present time this country is facing a terrific problem. We are grappling with this problem of defence expenditure. That sum of £1,500 million has got to be reduced. At the present time it is proposed to spend £1,200 million upon the railways. We are going to spend money on the modernisation of the coal industry. The Central Electricity Authority have plans for spending millions of pounds that will eventually take traffic away from the railways, because, instead of transporting the coal from the mines to the power stations, they are going to build the power stations at the mines and transport the current on 175-foot pylons all over the country. Then we have facing us the colossal expenditure of atomic energy stations. Then we have the roads.
I am not going into the virtues of any of those things. There is, by the way, one matter which your Lordships sometimes lose sight of and about which I asked a Question, the Answer to which appears in the OFFICIAL REPORT of January 22. I had it in mind then to ask how much had been spent on the hydro-electric scheme in Scotland. The answer is shocking. It adds up to £150 million. That may be good. But do you not think it is time that we asked ourselves whether we are shovelling all the taxpayers' money on to the right heap, and whether we are getting value for the money? It may be that we are. The noble Lord comes here this afternoon with a most optimistic picture. He asks the taxpayers of this country to underwrite £320 million on the basis of what I have termed an optimistic forecast. My Lords, we have been through a trial period, because, unfortunately, fortuitous circumstances have led us during the last week or two into an era where we have more than ever to depend upon the railways.
What are the facts? Do they teach us anything? When we were debating this matter last on November 27, I ventured to make a few observations in which I questioned whether the assumptions upon which all these proposals are based were valid. The British Transport Commission estimate that, by modernisation, they are going to increase their passenger traffic—I think I am right in saying but the noble Lord will correct me if I am wrong—by somewhere in the
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region of £33 million per annum, and freight by £55 million per annum. I ventured to say that those estimates were unrealistic; that the assumptions upon which these financial estimates were based would never be reached. I am confirmed in that opinion. I remember saying that those assumptions lost sight of the evolution of the industrial set-up in this country. Time goes on. The fabrication in our industries is such that short, door-to-door conveyance is the method of the future. I said that railway transport of freight within a radius of forty miles had practically disappeared.
What has been the experience during the time of petrol rationing? The Times has asked a lot of questions; the Manchester Guardian has replied to most of them. The Manchester Guardian said only yesterday that the railways will never carry the traffic because road transport is preferred. The percentage increases are very low—this, in spite of the fact that there was every indication that the Government by the way the petrol rationing scheme was first operated, were using the policy of forcing traffic on to the railways. In what other way can you interpret the Ministry of Transport edict that no supplementary petrol would be given to road hauliers until half their basic ration had been used? The Minister said in another place only the other day that to-day the railways were being run more efficiently than ever. I beg to question whether that is an accurate statement. The noble Lord has just said that when he travelled 30,000 miles he could find nothing wrong with the railways.
LORD MANCROFT: No, I did not say that.
LORD LUCAS OF CHILWORTH: Or that what was wrong was so trivial that it really did not add up to very much. That is the impression I got.
LORD MANCROFT: I said that my impression was that it was not anything like as bad as everybody else seems to find it.
LORD LUCAS OF CHILWORTH: It depends on what the noble Lord's feelings are. I suspect that his version of it, speaking from the Government Dispatch Box, is slightly different from what it would be if he happened to be in Opposition. He should consult his noble friend

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Lord Swinton, about the inefficiency. I remember Lord Swinton's tirades in 1947 and 1953. Bin let us have a few facts. Every day I travel over a hundred miles to come to your Lordships' House, and all but twelve of those miles are covered by train. I travel from Oxford to Paddington. Only four times this year have I arrived at my destination at the same time as the timetable stated that I should. On only six occasions have I been less than twenty minutes late; on one occasion I was an hour and three-quarters late; on another, over an hour late, and on another three-quarters of an hour late. That is for a journey of fifty-three miles. One night I sat in a Paddington to Oxford express train for one hour and twenty-three minutes at Maidenhead station. It took the railway authorities all that time to remove the last but one coach from the train because it had developed a hot axle-box. Every morning I walk on to Oxford station sand I ask the ticket collector, "What is wrong to-day?" On Tuesday last he said, "I'm sorry, sir, but it is three-quarters of an hour late already and has not arrived yet." I said, "What's wrong?", and he replied, "Oh, the engine has broken down. They have had to put a goods engine on." That train arrived at Paddington station an hour late. The week before that he said, "It has got a bad steamer to-day." is that efficiency? That is my own personal experience.
Before I leave the passenger aspect—the noble Lord knows the journey I am describing—may I say that if the noble Lord would travel in some of these trains he would hear a number of business men from the Midlands, and what they say would not marry up with what he has said. One said to me recently, "I have given up making any engagements in London before midday, because I cannot keep them. "On the occasion that I am speaking about I was coming up to your Lordships' House to attend a Committee, and I had to keep six people waiting for an hour. Is that efficiency?
VISCOUNT ESHER: Perhaps the noble Lord should not have nationalised these things.
LORD LUCAS OF CHILWORTH: I am not talking about what should have been done. Perhaps the noble Viscount
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could make a helpful remark as to what should have been done in the situation which would have faced any Government in 1947, when the railways were completely bankrupt. Nationalisation of the railways—if he wants to discuss that—had been the policy of all Governments, even that of Mr. Winston Churchill, right the way back for as many years as I can remember. So the noble Viscount's remark was not very helpful.
Now, my Lords, I had some goods sent to my house. There were three small packages. They had to travel only forty miles. They came by rail and it took exactly three, weeks for them to travel those forty miles. They were all despatched at the same time, on the same day, and arrived at intervals of two days three weeks afterwards. So I thought I would make other inquiries, because my industrial contacts were telling me that the cost in freight for goods that now have to be transferred from road to rail is frightening. I have here some figures. I have had them all checked and authenticated. I will take only a few examples: Food, bacon and butter in bulk, 50 per cent. increase in freight rates; mixed groceries in privately-owned containers, same type as railway containers, increase 100 per cent.; textiles, Manchester to London, 50 per cent. increase; bricks, Bedford to London, an increase of 17s. 6d. per thousand; concrete blocks, 200 per cent. increase; consequent increase in the cast of building small house entirely of concrete blocks, £50. The correspondence in The Times is illuminating. Cost of furniture removal from Darlington to Peterborough: by road, £82; by rail, £145 10s. Fifty tons of metal: quotation by British Road Services, £1 14s. 6d. per ton; by British Railways, £5 9s. per ton.
Then, take speed. I have had this checked. The average road journey of heavy consignments from the north of England to London is 48 hours. The present average time by rail works out at ten days—five times as long. What is the cause of that? It is no good the noble Lord saying, "The7e is nothing to grumble about." These are facts, not airy theories. The truth is that the railways are not attuned, mentally or physically, to do this work. I believe that is well illustrated by the letter in The Times written by the Public Relations Adviser to the British Transport

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Commission. I will read it to your Lordships:
"While British Railways are endeavouring to the fullest extent to offer competitive rates, rail transport is pre-eminently suitable for the mass movement of goods and merchandise in full wagon and full train loads. Individual cases are bound to occur where it is more economical for comparatively small lots of traffic to be carried by road rather than by railway. … In some recent cases, mentioned by your correspondents, it would appear that they were quoted the appropriate ordinary rates on the books, whereas it is usually possible for the railways to quote fully competitive rates for traffic in truck-loads."
Will somebody tell that gentleman in the British Transport Commission some of the facts of life? The vast bulk of British industry—other than the minerals traffic—people who manufacture goods in this country do not manufacture 10-ton loads once in six months. That is why road traffic has gained such an ascendancy—because the average piece of freight in this country is small. This gentleman goes on to say:
"In every case where a trader is contemplating diversion of traffic to rail, we suggest that the local goods agent or district commercial officer be fully consulted on all aspects of the trader's requirement, so that the most advantageous rates can be quoted according to the circumstances of the traffic."
When I started in industry and commerce I was told that if I wanted to sell anything I had to go out and sell it; that I could not afford to sit down and wait for the customer to come to me. Here it is said: "Better rates are available than those quoted if people will only go and see the Commission." But I thought the railways wanted to get business. Which brings me to the point I made in your Lordships' House on November 24 last: a live, dynamic, commercial instinct is needed within the railways. The noble Viscount, Lord Esher, spoke of nationalisation. Do not forget that when the road haulage industry was nationalised we took over many thousands of lorries and thousands of men who had been connected with those lorries and had built up their little businesses from small beginnings by dint of going out and getting the traffic.
That is the fundamental reason why I tell the noble Lord, Lord Mancroft, quite frankly, that what we are debating to-day is whether to put off the evil day for another six years before we have to decide what we are going to do. Is this to be a
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subsidy or is it not? I must speak the truth as I see it, and I believe that there is not a hope of a chance of these deficits ever being wiped off. I do not want to deny the railways a modernisation plan, but such a plan will not do this. The railways must modernise their attitude of mind. It is not enough merely to spend £1,200 million on new equipment. As I have said, chromium-plated trains will not do what live men will do. What we have to do is to persuade the railways to spend money on men. Men are the secret of all this. Because if we continue with the present "dead beat" system on the railways, no painting of trains in different colours or putting men in different coloured uniforms will ever succeed.
I know that this is a delicate matter, but I want to ask the noble Lord to consider it. Why is it that though we have here an industry with a turnover of £700 million a year, employing 800,000 souls, the top executives are the worst paid in this country? I am told—perhaps the noble Lord will tell me if it is wrong—that it is because of the edict of the Treasury that the Chairman and top executives of the British Transport Commission can only be paid rates equivalent to top-ranking civil servants. I want to ask the noble Lord whether that is true. I have also heard it said: "Of course, if you paid commercial salaries, if you competed for top executives with Imperial Chemical Industries, the Imperial Tobacco Company, Unilever, or any organisation of that kind, there would be trouble down below." I contest that. I would say that some of the most contented staffs in this country are those who work for the Imperial Tobacco Company, those who work for I.C.I. and those who work for Unilever. Why? Because they are amongst the highest paid. I have never heard anyone connected with any of those staffs question what Lord Dulverton got or what Lord Heyworth got or what Lord McGowan got. Indeed, speaking from my own experience in industry, it is those who get high salaries who know the value of high wages. If you are going to pay top executives mean salaries you are going to get mean minds.
I want to say to the railways and to the trade unions: you have to bring a new thought into this matter. I was speaking the other day to one of the finest fellows on the railways that I know: he

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is a chief ticket collector, and he has done forty-five years in the railway service. He has now got into the high-ranking salary bracket of £7 10s, per week. He has never had a rise in all his forty-five years of service that his union did not get for him. In such a case there is no incentive at all. The only people on the railways who have any incentive are the porters: they get it, via the pockets of the passengers, in tips. I have been told for years that it is impossible to bring incentives into railway employment. I do not believe it. The same was said of industry generally years ago, but it has proved to be entirely wrong. Incentives exist in every branch of industry, and until there is a different outlook, right from the top to the bottom of the British Transport Commission, the expenditure of this money—this £1.200 million which is to be paid for modernisation of the railways—will never be worth while, because men matter more than machines.
My Lord, I have taken the liberty of saying these things because I believe them to be true. They are based on my own experience in industry. I want to ensure that if a man is the best ticket collector, or if a man is the best inspector, he will get a better wage than the worst people in such jobs. He certainly does not do so to-day: all are paid at the same rate. I can well imagine that if I had tried to work on that system in my business I should have gone bankrupt years ago. The same I feel is true of the noble Earl, Lord Woolton.
THE EARL OF WOOLTON: I never tried it.
LORD LUCAS OF CHILWORTH: It is a most "dead-beat" policy. And then wonder is expressed why the railway unions have a perpetual wage claim in! Can we really wonder at it? Every employee in private enterprise industry has a perpetual wage claim in, for he is always struggling to impress upon those above him that he is worth more money than he is getting. But that sort of effort is useless on the railways. No matter how a man strives, he gets a rise only when his union gets it for him. Do you think that a modernisation scheme will work when conditions like that exist.
Of course, we shall give this Bill a Second Reading. It may be that some of your Lordships will still be in this House
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in six years' time, when repayment of this underwriting becomes due. I hope that shall still be here. If I am, I shall be able to remind your Lordships of what I have said to-day. With the competition that the railways will have to face in the future, with the natural tendency that exists—except in the case of long hauls—for people in trade to have their goods carried from door to door, it is impossible to put the clock back. That is not the fault of the railways; it arises from the size of this country, and from the fact that to have goods manhandled from the Factory floor to a truck, from the truck to a wagon, from the wagon again to a truck, and from the truck to the factory floor, all in the course of a journey of twenty or thirty miles, is more than British industry can stand.
I have quoted figures, if the noble Lord would like me to give him fuller details, I shall be happy to do so. They are based on present day statistics of road and rail, and they show that, on the average, there is a 50 per cent, increase in charges for everything that is put on the railways. It costs 50 per cent. more than to have the goods sent by road. It really is necessary that there should be some commercial instinct in this business. Such an instinct must be stimulated. There must be this change from the top of the British Transport Commission right the way down to the bottom. There is nothing wrong with the men, but for years they have been dead-beaten and frustrated. Why is it that, of all industry, the railways are more troubled than any other by discontent about wages? It is for the reason which I have just given. So I take it upon myself to say these things.
As I have intimated, we shill give this Bill a Second Reading. We wish it well; we wish the railways well. They are an essential part of the economy of this country. But do not think that the railways can do a job in respect of which the economics of this country are so strongly against them. Undoubtedly much of the traffic which now goes by rail will go back to the roads when petrol rationing ends. More goods traffic will go back, and so will more short-distance passenger traffic that is, of course, un less the Government make that physically impossible by never going back to unlimited supplies of petrol. There is

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undoubtedly a field for the railways, but let them be really efficient in that field. Do not let the Government try to bulldoze things on to a method of transport which is out of date so far as the requirements of modern British industry are concerned.
4.8 p.m.
LORD HURCOMB: My Lords, I suppose it might be thought that I ought myself to be among the people who find it easy to understand the provisions of a Bill of this kind, since I have been steeped in its subject matter for a good many years. I should like to thank the noble Lord who has moved the Second Reading for the clarity with which he brought out its main structure and provisions. I am sure that he cannot have found it easy to do that on coming to do it for the first time.
No one disputes the necessity for the Modernisation Plan if the railways are to fulfil their function, or to get near to fulfilling their maximum function. And no one can dispute the need for some relief to the British Transport Commission from their statutory obligations if the Plan is to proceed. Not everyone, of course, will agree that the Plan in itself will be found, six years, fifteen years or twenty years hence, to have disposed of the transport problem. I remain of opinion that that problem was not just conjured out of existence by the 1953 Act—indeed, the necessity for this Bill is proof enough of that. Things might—and in my opinion they would—have looked a little different and rather better if the Government had seen their way at once to provide the capital necessary for re-equipping the railways and to refrain from insisting on the mistaken policy of intensifying competition between road and rail and on breaking up the national road haulage organisation which was beginning to operate successfully.
That, however, is not the point this afternoon: it is the situation that has, in fact, been created that we have to face—the situation with which this Bill sets out to deal. Though the Bill does not in any fundamental sense reorganise the finances of the British Transport Commission, I support it because it relieves the Commission from the statutory predicament in which, through no fault of their own, they find themselves placed. And it does so without abandoning the important
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principle that, over a period, the Commission must pay their way and keep their finances in balance. In effect, the Bill says that the principle of solvency and the basis of being self-supporting may be regarded as satisfied and maintained if the balance is achieved, not, as hitherto, taking one year with another, but taking one decade, or rather more than a decade, with another. If we are not careful, in order to achieve that balance, we may be taking one generation with another, and that is an unfortunate stretching of a very sound principle. But I agree with the merit of seeking to retain it.
What is the only practical alternative, especially as it is outside present policy to depart from the encouraging of road competition? As the noble Lord, Lord Mancroft, said, the alternative is a subsidy, and to that many strong and, in the view of many of us and certainly in my view, fatal objections can be urged. One great merit of this Bill is that, even though all that the noble Lord. Lord Lucas of Chilworth, has said turned out to be true, in form it does not depart from that principle, the adherence to which at this moment, I think, is absolutely essential, if that is once admitted, the actual methods adopted in the Bill seem to be apt for their purpose. There is no escape from carrying forward deficiencies and borrowing the amount required to meet them. It is regrettable that not only the deficiencies themselves, but also the interest on the deficiencies, which is going to amount to many millions of pounds, has to be accumulated and held over for liquidation at some time in the distant future. But again, apart from a subsidy, what is the escape?
The other relief offered to the Commission is permission to capitalise interest, and that, I think everyone is agreed, is legitimate in the circumstances and backed by ample precedents which Parliament has made in dealing with statutory authorities, quite apart from what may be the practice in large commercial concerns. So I would say that the scheme, as a device for financing the deficiencies for the next few years, is well devised. Indeed, I think its authors are to be congratulated upon its ingenuity. While it makes no difference to the burdens which eventually will have to be repaid, it does relieve the Commission from a very real predicament, as I said just now.

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It lifts from their shoulders the incubus of having to show a heavy working loss on their business in their annual accounts, and though that relief may be more a psychological one than, ultimately, a financial one, nevertheless it is real. By lifting that incubus from their shoulders, it will make it more difficult for the critics in so many quarters, who are always anxious to denigrate the management of our nationalised public utilities, to throw stones at the Commission and say, "You are making a heavy loss". They generally also say, "You are making it at the expense of the taxpayer"—which, of course, is not really correct, and never was, More important than that, perhaps, the removal of this incubus should be good for the morale both of the management and of the men all down the line. It seems to me that the Commission are entitled to expect more than ever from every member of their staff individually and collectively, through the elaborate machinery of consultation which has been established, united and enlightened acceptance of changing technical conditions; and on that many financial consequences may depend.
There is one ether point on which I should like to comment. The total deficiency accrued in the Commission's accounts up to the end of 1955 is to be carried to the new Suspense Account. But noble Lords will have noticed that thereafter only the deficiencies in respect of British Railways may be so treated. That means that the rest of the British Transport Commission's activities, treated as one business, must continue to pay their way, taking one year with another. In that respect the Bill has not departed at all from the principle of the 1947 Act; and this covers not only road haulage, the docks, the canals and, I hope, the catering services, but also London Transport. London Transport is excluded from the provisions of the Bill: it must pay its way, taking one year with another. It never was true that London was "salted", as used to be said in favour of other sections of the Commission's business. Quite the contrary: large numbers of Londoners were carried at fares below cost. I am glad that the Government think that wrong, and though I cannot help remembering that they "wobbled" a hit on that question three or four years ago, nevertheless they have now come down on the sound side.
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I am far from criticising their present attitude or the provisions of the Bill in this respect. Nevertheless, is it not time that something more was said about the capital liabilities of London Transport? London Transport serves an enormous proportion of the total population of the country, and serves it very well; but there are many directions in which Londoners are entitled to somewhat better services, always on the principle that they will pay for them, if they are provided. I think that that mates up with something which the noble Lord, Lord Lucas of Chilworth, said. The capital liabilities in respect of London Transport ought not to be left out of account in considering what will be the future capital requirements of our economy as a whole.
In particular, there are two or three items of London Transport's undertaking which seem to me to call for some fairly early treatment. Fortunately, it was possible after the war, in the early days of the Commission, to renew the bus fleet without delay. That was a great asset and advantage. But how long are North and North-East London to go on waiting for the new tube? In the proposals which had the privilege of submitting to the previous Government some years ago, that tube was known as "Route C". It has now been more attractively labelled the "Victoria Tube". But I wonder whether giving it a "local habitation and a name" has made it yet anything more than an "airy nothing".
Another part of London Transport undertaking which must receive some attention before long is Lots Road Power Station. Its modernisation has long been overdue, and, when it is undertaken, must swallow up a good many millions. In that connection, I should like to ask this question. When it is undertaken, by whom is it to be undertaken? Will it be by London Transport, or by the new generating authority, as might be more appropriate? But in one way or another there is a big capital liability ahead in respect of that power station. My point is that heavy liabilities which must exist ought not to be left to come in at the end of the queue, for London Transport is an important part of the Commission's total undertaking, although it is left out of the Bill that is now before

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your Lordships. I do not expect a reply to these questions from the noble Lord this afternoon, but possibly he may be able to say something about some minor reliefs to which I did refer in our last debate. Is it possible to give the Transport Commission and the railways, in particular, some relief in respect of their old and anomalous obligations in regard to bridges on public highways and to level crossings? Those will not amount to a vast amount of money, but they do amount to something, and absorb the time of their staff.
Apart from such points and from the machinery of the Bill, I agree with the noble Lord, Lord Lucas of Chilworth, that it is important to realise the extent of the burdens which are being transferred to the future. It is all the more important to do so, as he said, in view of the general economic difficulties which this country is going to face in the next few years. At the moment, the railways are, no doubt, benefiting from the restrictions on road transport; but on their own computations—which, by the way, assumed that they would be free to adjust their charges in their own discretion without any intervention from the Government, and assumed, also, that the general economic conditions of last autumn would continue to prevail; in other words, that there would be no further inflation—they are expecting to accumulate a deficiency of between £300 and £400 million, purely on revenue account, a figure which I think would have shocked your Lordships had it been mentioned two years ago.
I do not know whether the noble Lord in his reply will wish to tell your Lordships what, in the present view of the Government, is the maximum figure to which these deficiencies are likely to amount, or what is likely to be the period in which they will be liquidated. The proposals of the Government have, to some extent, varied the estimates in the table set out by the Commission in the White Paper. Generally, I think, though the ultimate result will be much the same, they will give more relief to the Commission in the early years, but will defer and prolong the rate at which the accumulated deficiency will be paid off. I think that is the general effect.
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For my own part, I wish the Modernisation Plan every success. I am satisfied—though I think that in some respects the original calculations were optimistic; not so much in regard to their ultimate effect, as to the pace at which the benefits will accrue—that in general the Modernisation Plan must secure large economies in the cost of railway operation, and also considerable results in increasing receipts, more especially from passenger traffic. On the goods side, there are other factors which I presume were fully taken into account by the Commission. There is a possible change in the movement of coal, and there is the fact that so much of the movement of general merchandise which is in the hands of "C" licence holders is there not on account of price, or of service, in the narrow sense, but because the movement of the goods under the immediate eye of the man in charge of the factory is part of the manufacturing process. That is a factor which even an active commercial policy on the part of the railways is going to find difficulty in overcoming. Nevertheless, I agree that the Modernisation Plan will improve the financial prospects of the railways substantially.
But, when all that is said and done, I could wish that the present proposals did not cast quite so heavy a burden on quite so distant a future. What really is accomplished by carrying forward revenue deficiencies of hundreds of millions in the hope of liquidating them, if all goes well, in fifteen or twenty years? By doing so, no doubt we extricate the Commission from the immediate impasse in which they are placed by circumstances and by their statutory obligations, and we give them an easement, to which they are fully entitled, as the noble Lord, in quoting their own Memorandum, said, during these critical years of reconstruction. Yet I feel it would be a mistake to suppose that that is a complete solution, or that we shall really solve the economic problems underlying the transport situation by a scheme of deficiency financing of this kind, however apt, however ingenious, and however flexible. I think the provisions to which the noble Lord referred, and described so clearly, for keeping a control over the future as it develops are most necessary, and I hope they may be found to be sufficient to prevent us from drifting again into a

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position which, by its magnitude, becomes completely unmanageable.
I hope the noble Lord, Lord Mancroft, will, at any rate, agree that what we must not do is to rest on the assumption that all is going to be well, if everything goes well, some fifteen or twenty years hence, when very few people who are now responsible will be here to answer for the results. It is important not just to wait five or six years, but every year, as well as in four or five years' time, to make a close review both of the absolute figures and, what is more important, of their trend, and not to push the problem now facing us always into a more distant future.
4.32 p.m.
LORD MONKSWELL: My Lords, the Bill before us is concerned with the spending of vast sums of money, and I suppose that it conies under the heading of a Money Bill. In that case we can do nothing to alter it. All we can do is to offer criticism. That is essential, and it is impossible, unless there is that freedom, to criticise the details of the Transport Commission's scheme. I hope that this freedom will not be denied me, though I rather gathered, from the remarks of the noble Lord who introduced the Bill, that the Government "swallow" the Transport Commission's programme as it stands. It seems to me that that is quite an impossible way to start upon it.
We are presented with a scheme which is described as railways "modernisation." It was originally to cost £1,200 million, though I understand that the cost has since gone up. Most of the developments promised were things that would have had to be done anyhow, like improved signalling, a smoother permanent way, and that sort of thing. The two promises that stand out above anything else are the improved goods traffic and the supersession of the steam locomotive, The information available with regard to the latter—except for the huge sums that are to be spent upon it—is extremely vague. The recasting of the goods services in a country like Great Britain, where trade of such a retail character has such a strong hold, is so technical and so controversial that I cannot express any strong opinion on it.
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But the matter of the supersession of the steam locomotive is quite a different thing. It must be responsible for quite half the total proposed expenditure, and the advantages are of the most doubtful and shadowy kind. It is true that in many foreign countries electrification has made considerable progress, but these are mostly countries where there is plentiful water power, In the United Sates, where they have diesel traction, the oil companies are all-powerful. In all cases, there is an extraordinary reluctance to publish the comparative results. Even now, British Railways are saddled with two kinds of electrification and a good deal of diesel traction; and other things like gas turbines and straight atomic energy, are coming along. The Government do not really know what they want at all, yet apparently they are so anxious to give the impression that they are doing something that they are rushing the country into this enormous expense, which is exceedingly likely to have no effect except that of increasing inflation. If the Government are determined to spend all this money, it would be much better to put it into the roads, which will be of some use to us all.
4.37 p.m.
LORD BUIZDEN: My Lords, I stand here quite unrepentant and unashamed as an ex-railwayman, still convinced that, given certain conditions, the railways have a great future in this country. My noble friend Lord Lucas of Chilworth is away for a moment or two, and therefore I do not want to go into any great detail with regard to his criticisms. But one or two things I am bound to say. The first is with regard to railways going out looking for business. In every district throughout the country, some of the keenest and brightest young men have been put of this job of development, and I venture to say that if, suddenly, there is a change—as there has been a change, owing to petrol shortage—and goods have to travel by rail, instead of, as previously, by road, those goods have travelled without the railway industry having an opportunity of quoting special rates for the particular consignments. On that point, I would ask those in charge of the business of quoting special rates whether they might not consider the procedure to be adopted. At present, a figure is quoted;

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then, if that figure turns out to be too high, the representative has to bring that information back, when a lower figure is quoted, and so on. From my own experience, I know that in that backwards and forwards business traffic is often lost, because in the interval it has gone by road. I suggest that the lowest possible figure should be given to the railway representative, and that he should have discretion as to how he handled that figure.
We have had instances of delays by railway. The figures which the noble Lord gave in regard to the time taken in transit by full load traffic I would categorically dispute. It is not in accordance with the facts as I under stand them to be. I know there are delays, but if it were possible for me to check up the number of parcels that might go astray in road transport clearing houses, where parcels are aggregated and then passed on from one firm to another, the instances my noble friend gave of small parcels being delayed could be easily paralleled with goods delayed by roads.
Turning to the salaries of the top executives, I do not know—I am not party to Cabinet secrets—but, if my memory serves me aright, I believe my noble friend was Parliamentary Secretary to the Ministry of Transport when the railways were brought under national ownership. I should have thought that the Minister of Transport together with his Parliamentary Secretary would have had sonic knowledge of, and some say in, the rates of pay which were fixed for the higher executives. Bearing in mind the experience of the Co-operative Movement in regard to rates of pay, I do not know whether my noble friend's chief, the Minister of Transport, had any say in the rates which were fixed for the high executives in the British Transport Commission, or whether they were left entirely for the Treasury to fix. How is it that in British electricity the rates of pay paid to, the higher executives are comparable with the rates of pay and salaries in outside similar competitive employment? Did the Minister in charge of that particular nationalisation Bill see to the fixing of that figure, or why was the Treasury more lenient in that connection than in others?
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As regards the purposes of this Bill, I feel we must accept it as long overdue justice. I wonder how many noble Lords remember that before 1939, out of their very meagre resources, the railways of this country spent on modernisation and re-equipment a sum of no less than £200 million, an expenditure which enabled the railway companies to take the strain when war broke out in 1939. As one who was engaged in the railway service during the major portion of that war, I can assure your Lordships that it was a strain meeting the air raids, and dealing with the traffics which had to be carried and got to their destinations in spite of the air raids. In order to use that £200 million for re-equipment and modernisation, the railways had to screw their shareholders down to the lowest possible figure of dividends. With what result? I have always regarded the second agreement which was forced on the railways by the Government in 1941 or 1942 as distinctly unfair to the railway interests, in any case. I believe I am correct when I say that the result of that agreement was that over £100 million found its way into the pockets of the national Exchequer.
I am sure that a moment's reflection will allow your Lordships to see that, when the railways were handed back again under the Transport Act, after the strain of war conditions, the fact that they had not been able to spend anything on capital equipment and the fact that the permanent 'way, rolling stock and everything had been run down owing to war-time conditions, meant that the new Transport Commission had a tremendous job to face. I am not overstating the case when I say that from 1939 right up to date—and in this the Labour Government have to take their share of responsibility—the railways of this country and British transport have been starved of capital development. I wonder whether the deadening psychological effect on men and women of working under such conditions as I have described has ever been realised.
Everything was in a dilapidated condition. In any case, the condition of the stock, the permanent way—and the offices, too, as I know to my cost added enormously to the problems of the normal day-to-day working. It is a curious psychological fact that, within the last—

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few months or so, now that conditions have been made better—with good lighting, and painting, the rooms for the staff have been brought up to a modern decent standard—there has been a tremendous improvement in the morale of the staff employed. But I am bound to say that among certain sections of the staff, the discipline—or perhaps I ought to say the lack of discipline—is really deplorable. It does not apply to all the men in the particular sections. There are various reasons for it. Perhaps the frustrating conditions which I mentioned a little while ago have some bearing on it.
On the other hand, there are other reasons. I believe—and here my noble friend was getting along the right lines—that, although it is always difficult to discuss wages and salaries without turning them into political questions, the differentials between the basic rates and the rates of those in supervisory positions to-day are quite inadequate. In many instances, it does not pay a man to take promotion. If, on top of that, he has to face, in a supervisory position, the problems which arise from full employment, where on, the slightest reproof a man will say. "Give me my cards"—and, believe me, it is not said quite so politely as that —a man will not take a supervisory position. Therefore, I want to assure your Lordships that those conditions which I have mentioned are breaking the hearts of railwaymen of 45 and upwards. They know it: they see the causes of it, and deplore it bur. with the material which they have to handle, they can do nothing about it at all.
My Lords, it seems to me that the proposals before us to-day are a challenge to the railway industry. If I may just follow up the Point made by my noble friend Lord Hurcomb as to the finances. I would suggest that at the appropriate moment, not toe far ahead, there ought to be an inquiry into the financial structure of the industry, and also an inquiry as to what services are provided by the railways for strategic reasons and maintained at a loss, and whether other services which are rendered to the Government are adequately paid for. I would suggest that the efficient working of a railway system in time of war is as essential as the provision of aeroplanes and things of that kind.
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I should like to suggest that in these brief five years an attempt be made to bring a new spirit into the railway industry. It seems to me that now, under conditions of nationalisation, the three great trade unions in the railway service should have a far wider and responsible position, and should not simply regard it as their job every year to submit a claim for improved wages or salaries. In the Press the other day there was a paragraph which rather took my eye. It said that the General Secretary of the National Union of Railwaymen—a man for whom I have the utmost admiration—after turning down the Commission's latest offer of a wage increase, hurried off to a meeting of the Railway Productivity Council. Important as that work at the top may be, it is not there that the work will be done. I venture to suggest that the challenge has got to be met during the next five years, and that every railway employee ought to be a publicity officer for his industry. I believe that, latent in the rank and file of the railway service, there are still men and women of good will. If they were harnessed to the cause or working and co-operating at all levels to restore the prosperity of the railways, that could be done.
I suggest that the vast number of noncommissioned officers of the trade union movement in, the railway service, such as the branch committee men, the collectors and the executive committees—all men and women to whom the rank and file look for leadership in many things, because, after all, in any movement, whether in the church or in a trade union, only an active minority do the work and they are looked to for light and leadership—should be fully seized of the responsibility of restoring the prosperity of our railway industry. If that could be done, if the three trade unions co-operated in that way, I believe that a marvellous change could be effected in managing the railways of to-day. Perhaps I might continue my speech after the Royal Commission.
THE EARL OF ONSLOW: My Lords, I am obliged to the noble Lord. Perhaps he would carry on afterwards. I would suggest that the House adjourn during pleasure for the Royal Commission at five o'clock.
House adjourned during pleasure.
House resumed.

ROYAL COMMISSION
5.0 p.m.
The following Bill received the Royal Assent:
Ghana Independence.
House adjourned during pleasure.
House resumed.

TRANSPORT (RAILWAY FINANCES) BILL
5.12 p.m.
Debate resumed.
LORD BURDEN: My Lords, I have been trying to suggest that the forces of good will in the railway services should be mobilised by and through the "noncommissioned officers" of the three great railway trade unions. After all, this is not entirely a novel idea. I remember that after the General Strike of 1926 the London, Midland and Scottish Railway Company attempted something along the same lines. But I have in mind something far bigger and more continuous than that which the L.M.S. attempted to do then. I know that what I have suggested will be opposed by the Communists, the near-Communists and fellow-travellers as "class collaboration". I suggest that it is nothing of the kind. Railwaymen must realise that there is not a bottomless purse from which they can accept monies in vast sums as a subsidy to the railway industry. They must realise that if they themselves are not prepared, in these five or six brief years, to put the industry on a sound financial footing, then the railways will go the way of the stage coach; the rails will be torn up and the main lines will be allocated to fast-moving motor traffic. But before that comes about, the challenge should be accepted by all railwaymen. They must realise that their industry is faced with highly organised competition from the road transport industry. That industry is alive and active and is always conducting a high-powered campaign in every quarter to discredit the railways and railway transport. Railwaymen should measure up what it is that they are opposed to. I could say more, but at this late hour I will refrain.
There is, however, just one point which I should like to make. I know that
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London Transport is outside the scope of this measure. But I confess that I have always marvelled at seeing in the trains of London Transport, and now also in the buses, advertisements for road passenger transport which is competing with British Transport. The undertakings advertised are in no way associated with British Transport. I do not know whether this is an instance of altruism on the part of London Transport, or whether the advertisement department takes the view that, "Money does not smell in any case." But I confess it irks me, as a railwayman, to see those advertisements. It maybe that the plea which a Member of your Lordships' House puts to these railway unions, and particularly to my own old trade union—the old Railways Clerks' Association, now the Transport Salaried Staffs Association—will fall on deaf ears. Be that as it may, I am convinced that, unless something along the lines I have suggested is done, the railways will cease to function and will be only an exhibit of a great industry which has failed to satisfy and to serve the public because of the inertia of those employed in it.
5.17 p.m.
VISCOUNT STONEHAVEN: My Lords, I should like briefly to congratulate the noble Lord, Lord Mancroft, upon the lucidity of his explanation of this Bill—he even made me think that I understood it. That may be rather dangerous but the noble Lord will have the opportunity of putting right anything upon which I may go wrong. The impression I got was that, in a more lowly sphere, one might say that the railways were "asking for a sub." We are not giving them money permanently. Eventually, it is to be paid back, for it is a loan. But I think one is justified in asking what security we have that this money ever will be, or ever can be, paid back. I am completely satisfied that the recent modernisation plan will give the railways great technical efficiency, and I regard that as very desirable. But it certainly appears to me not to emphasise the equal necessity for building up commercial efficiency. I admit that the plan does not ignore it altogether, but it does not seem to me to put upon it the real emphasis which I think should necessarily be laid on that point. The two things do not necessarily go together.

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Without wishing to say whether the timing was good, I would point out that railwaymen have recently secured an increase in wages. Whatever anyone thinks about it, they have secured that increase, and one must realise that already because of that increase, the forecasts made by the railways in connection with the modernisation plan have now gone completely adrift. I think it would be futile to imagine that in the next five years there are not going to be other, and probably substantial, wage increases granted, and we must look carefully into whether the railways are going to be able to repay this money at the specified date or will have to borrow again, and re-borrow and re-borrow in a vicious circle. It seems to me that the railways are still tainted with the Victorian outlook of the days when they had a monopoly and had to compete only with horse traffic and when the problems with which they are faced to-day never occurred.
LORD BURDEN: My Lords, may assure the noble Lord that that is absolutely incorrect? There is to-day on the railways a spirit alive to the need of competition. Some people may have a Victorian outlook, because they are still living in the Victorian era, but they are not the railwaymen.
VISCOTNT STONEHAVEN: I am glad of the noble Lord's intervention. The point I was trying to make is not that the railwaymen were necessarily to blame. It is often the case that the customers they are dealing with still have a Victorian outlook, and between customer and railways the net result is that we are not getting the modern outlook which is necessary.
I come to the question of the extra traffic which petrol rationing has diverted to the railways. I am told that from the railways' point of view the figures have been disappointing. The increase of general merchandise traffic has been 9 to 10 per cent.; of minerals, about 4 per cent., and of passengers, 15 to 20 per cent. These increases have not taken up anything like the railways' existing capacity to deal with extra traffic. It is worth leaking at some of the reasons for this, some of which were brought out at a recent conference of the Transport Central Joint Commission. The following bodies were represented—the
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British Transport Commission, British Railways, British Road Services, British Transport Waterways, the Federation of British Industries, the Association of British Chambers of Commerce, and the National Union of Manufacturers. I think that these organisation represent the authoritative opinion of both sides, and the conference showed that the railways are endeavouring to get down to this problem.
I should like to summarise, briefly, the conclusions to which the conference came, The industry and commerce side said that they were opposed to diverting traffic to the railways because they found it led to excessive breakages, excessive times in transit, delays and excessive costs of packing. Even after rates had been adjusted, they still remained uneconomic, and the extreme case was given of certain goods whose transit was 450 per cent, more expensive by rail. The transport side said that industry and commerce often assumed that the rate would be high without bothering to find out. They said that the rates they would adjust would be those which they regarded as commercial rates and they could not necessarily match the market value rate. I thoroughly agree that rate-cutting for the sake of rate-cutting is a futile occupation, but I must also point out that the railway rate for demurrage is just as futile. Twenty-eight years ago, when I first started work, that rate was 3s. a day for an ordinary wagon: today it is exactly the same. In those days one day was given to clear the wagon: it is the same now. I say without hesitation that the railways should triple the rate, but give customers two days to clear. I think that industry would squeal—but let it. It is an unsatisfactory and unnecessary obstacle against which the railways have to work.
I would ask my noble friend who is going to reply if he can give me an assurance which would largely satisfy my mind. The merchandise that is being carried by the railways now is being carried by rail because that is the most efficient and most economic method; otherwise it would be going by road. If we accept that certain traffic is suitable for handling on the railways, I should like to know whether the increased traffic which is forecast lies in the normal growth of the traffics which the railways

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are handling at this moment. For instance, I think that traffic in coal is going to increase, because it is estimated that the output of our power stations is going to be stepped up, and a large amount of their coal is carried by rail now. Rationalisation and modernisation is bound to add to costs, including service costs, and I should like to be assured that so far as anyone can tell, rates will not have to be increased to such an extent that that will drive suitable traffic away from the railways. If I could have that assurance, my uneasiness about the working of this plan would be considerably allayed. The sooner the railways can make a decent profit the better, and I think that the first call upon that profit is decent wages. The railways are doing a good job. They have a light, but they are hiding their light under a man-sized bushel. Their publicity somehow or other lacks—
LORD BURDEN: Punch.
VISCOUNT STONEHAVEN: —Not necessarily punch, but popular appeal. I think that we must also be sure that publicity and punch are not directed to the sort of traffic that is not suitable, and never will be suitable, to the railways.
5.30 p.m.
LORD MANCROFT: My Lords, this evening's debate has shown a marked degree of agreement, so much so that there is little left for me to say, and I do not propose to take much time in saying it. I think noble Lords are generally agreed that the Bill that we are discussing—and, after all, it is the Bill and not the modernisation scheme which we are discussing—is both drastic and revolutionary but it is a drastic situation that the Bill is trying to meet. I agree that it is an easy measure to criticise. It is easy to maintain that some of the targets are over-optimistic and that some of the proposals show a good deal of optimism in the minds of those who have made them. If it is over-optimistic, or if it is over drastic, what is the alternative? That is the question that must be asked, and several of your Lordships have asked it this afternoon. The noble Lord, Lord Hurcomb, asked it, and nobody speaks with more authority on this matter than he does: if I may say so, he made a
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most helpful and statesmanlike speech on the subject. He has said that the only alternative is a subsidy. My noble friend Lord Stonehaven referred to it as a "sub", and said that he thought he saw a subsidy rearing its ugly head in the clauses of this Bill. I was at pains to point out that the difference between a subsidy and the proposals of this Bill stands out quite clearly.
Even if this Bill is drastic, it does contain, as the noble Lords, Lord Lucas of Chilworth and Lord Burden, made clear, a challenge, and unless the railway industry as a whole accepts this challenge, this Bill, when it becomes an Act, will fall to the ground. I liked the expression used by the noble Lord. Lord Burden, when he said that each and every railwayman in the 800,000 of them must be a railway publicity officer. I hope that his old colleagues will follow the noble Lord's wise advice. The scheme will not work unless the men and women in the industry respond to the challenge which this Bill now gives to them. They now have something concrete to work for.
I sympathise with the noble Lord, Lord Lucas of Chilworth, in his difficulty about the Oxford route. I know that that has been a route where there has been complaint in the past, and I think the noble Lord has had some correspondence with the Commission about it. I am sure he will agree with me as to this. How can the men working on that line really put their backs into their work if they realise that they are dealing with out-of-date stock and equipment? Surely, it is this new scheme which will give the incentive to give a better service.
LORD LUCAS OF CHILWORTH: I agree with the noble Lord. As he said, this is a challenge. What I am asking the Government to do is this. In this imperfect world they are in competition—they are selling a service—and they must work on commercial lines. They are not working on commercial lines.
LORD MANCROFT: I fully agree with the noble Lord when he says that the Government, the railways and the porters must work on lines of dynamic commercial enterprise and go out and get the trade. I hope that, to a degree, the railways are already working along those lines, but I should not deny that there is room for improvement. I am sure

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that Sir Brian Robertson would be the first to express the wish that the dynamic leadership which he is seeking to give to the railways will be more closely followed by some of his subordinates. I agree with my noble friend Lord Stonehaven as to the need for enterprise in getting the goods. But when we are talking about the problem of road against rail, I am sure both my noble friend and the noble Lord, Lord Lucas of Chilworth, will agree that there is no point in the railways' going in search of business which obviously will not be profitable.
I will not occupy your Lordships' time further. We are agreed on the main principles, and I am sure we agree on this last principle: that, drastic though this Bill and the problem may be, and revolutionary as ate the proposals, even the most pessimistic of us hope that they will work and will prove a success. If they do not, the blunt fact is that we shall be faced with national disaster. We may as well realise that.
On Question, Bill read 2a; and committed to a Committee of the Whole House.

COMMONWEALTH SETTLEMENT BILL
5.35 p.m.
Order of the Day for the Second Reading read.
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (THE EARL OF HOME): My Lords, this is a short Bill, but I hope that it is a good and a useful one. Its purpose is to give the Government statutory authority to make any arrangements which may seem to be expedient or wise to encourage emigration from the United Kingdom to the different Commonwealth countries. I do not think this is an occasion when it is appropriate to debate the whole range of problems connected with emigration from the United Kingdom, but I am anxious that there should he no doubt whatever about Government policy: it is to encourage a regular flow of United Kingdom citizens to make their lives in. and to identify their lives with those in, other Commonwealth countries.
There are social and economic reasons why the export of emigrants from the
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United Kingdom to the Commonwealth leads to the strength of the whole Commonwealth association. Naturally, in any emigration policy there must be a balance of age groups. There has been a balance in the past, and in spite of recent developments that balance still remains; on the whole, a cross-section of the British people are leaving this country every year. It is true that the young and the energetic go first—that is only natural—but very soon, when they make good, they send for their families and their relations; and, as I have said, the result is that a cross-section of United Kingdom citizens are going away to other Commonwealth countries every year.
At what sort of emigration should we aim? In deciding this question we have had valuable assistance from the Overseas Migration Board Report. I should like to pay tribute to the work which those who served on that Board put into the Report. They have assessed the needs of Commonwealth countries who are importing immigrants from this country, at the rate of about 200,000 a year, and that is the number which they consider the Commonwealth countries are capable of absorbing. They have taken into account the compensating intake of immigrants into the United Kingdom from Europe and other sources, and they have come to the conclusion that it should be our aim to bridge the gap between the average emigration figure for the eight years before 1956—which was about 124,000 a year—and the 200,000 which they estimate the Commonwealth countries would wish to absorb.
There are indications that we are making steady progress. About a year ago an increase began to show itself in applications for emigration to Commonwealth countries, and since then the momentum has increased. There have been some rather alarmist reports lately which have suggested that we are losing too large a proportion of our young and skilled men There are no statistics which would support that concern, and, to some extent, the stories have been exaggerated. What is happening, so far as we can estimate it, is this. It looks as though at present the rate of emigration is approaching the figure of 175,000 to 200,000 a year, which is the figure named by the Overseas Migration Board as being desirable.

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So far as finance under this Bill is concerned, all the other countries of the Commonwealth except Australia prefer to keep a complete control over their immigration policies. So that, so far as the spending of money under the Acts preceding this Bill is concernd, up to date it has really been spent under two heads, and both of them in respect of Australia. The first has been help towards what is known as the Assisted Passage Scheme and the second has been help towards those voluntary associations who send children out to Australia. In the Explanatory Memorandum to the Bill your Lordships will see the amount of money which has been spent under these two headings between 1952 and 1956. The Overseas Migration Board recommended two things in the main: first, that we should encourage migration (and that, as I have said, is the Government's policy), and, secondly, that we should continue to finance these two schemes—namely, the Assisted Passage Scheme and the various children's schemes. That also we intend to do.
There are two other features of the Bill which I might bring to your Lordships' attention. You will see that the ceiling of expenditure has been put at £1,500,000 a year, and it will be possible to spend that amount of money each year. This ceiling is set because it may be that we shall want to adjust our practices, and it will leave a certain amount of elbow room to do so. Secondly, the period for which this Bill is to run is limited to 1962. We thought that that was wise. Things in this modern world change so quickly, and needs change so quickly, that Parliament might want to adjust its policy, and we thought that Parliament should not be tied by Statute for too long.
I hope your Lordships will feel that this Bill, so far as the principle is concerned, is an earnest of the fact that we do encourage emigration from the United Kingdom to the Commonwealth. We think it is a good thing. We have provided the expenditure which is practicable, and at the present moment emigration figures seem to be running at about the level which the Overseas Migration Board indicated could well be stood by this country. We have, however, left sufficient flexibility to adjust our policy should further needs arise. I do not
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think I need to say more in commending the Bill to your Lordships, and I beg to move that it be read a second time.
Moved, That the Bill be now read 2a.—(The Earl of Home.)
5.42 p.m.
THE EARL OF LUCAN: My Lords, it seems that little need be said on the Bill from this side of the House, except that, with one or two qualifications, to which I will refer later, we agree with the policy that Her Majesty's Government in this country should encourage emigration. We agree that the scheme should be limited in time, and limited to a ceiling of money. We notice that the actual expenditure has never approached anywhere near the limit of money set, but the practice followed by the Government is one that can commend itself to all of us.
As to the two qualifications to which I referred, I should like to make one thing quite clear. On the quality and the type of migrant, whilst it is clearly to the advantage of the receiving country that they should be selected and that they should be young and fit, from the point of view of this country we must recognise that Commonwealth migration means a draining away of the best elements in this country. If migration takes away the young, the fit and the skilled, naturally that will alter the balance in this country between the young producers and the elderly and the infirm. There would come a time when the balance would be so seriously upset that a depleted labour force would be maintaining an unduly high proportion of elderly and infirm. We know that our population is, in any case, an ageing one, and we think that the Government should ensure that their migration schemes do not upset the balance here—in other words, that the receiving countries should agree to a balanced intake of migrants. They should take family groups, the dependants as well as the wage-earners; they should take elderly dependants and not only young children. I hope that the Minister will be able to assure us that those considerations are understood and accepted by the receiving countries.
The second qualification is in respect of those self-governing countries in which there is a multi-racial problem. Much could be said about the advantages that have accrued to countries, in Africa and elsewhere, through the settlement of

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Europeans with their skill, capital and so on in the past, or even in the present. But what is important is how migration would appear to the bulk of the inhabitants of those countries. Let us face the fact that in Central Africa, and in other countries with racial problems, any steps by the Government of the United Kingdom to assist the migration to those countries of people of European stock would cause suspicion and fear. For that reason, I would say that the Government should not assist migration to countries where the policy has not the acceptance of a democratically elected majority of that country. Figures were given in another place concerning Southern Rhodesia, and they showed that the numbers of people assisted to emigrate from this country were really negligible—they were numbered in dozens, rather than hundreds. I hope that the Government will assure us that there is no intention of stimulating artifically the movement of Europeans to Central Africa. With those qualifications, I would say that this Bill has our support.
5.48 p.m.
LORD BARNBY: My Lords, fortunately this is not a subject of Party politics; it is not a partisan matter. The Secretary of State found no necessity to deal with aspects and details of migration but in the clear recommendation which he made to the House, he categorically asserted that it is the policy of Her Majesty's Government that on this matter they adopt a positive, and not merely a passive, attitude. I emphasise that because there has been in the past considerable concern about the attitude of the Government towards migration. It is further natural that the Secretary of State should not have felt it necessary to go into detail, because, in recommending this Bill to another place, the Parliamentary Secretary made a full and effective statement. Seeing that he is new to the office, he must be congratulated on the manner in which he indicated a grasp of the subject. But this is a moment in world affairs when there is necessity to recognise that the development of the Commonwealth—and that implies the white Dominions—should receive emphasis. We see changes as a result of the nuclear structure without the ordinary layman being able to find what interpretation to put upon its related effects.
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Further, the Government have virtually now committed the country, as, it is understood, to a European Free Trade Area, subject to certain reservations. Presumably, the enthusiasts will contend that that will involve a free movement of populations within the area. That seems to suggest an appreciable possibility of inflow to this country. There are many who feel that that would be an advantage to this country. Through the generations, the inflow from other parts of Europe has proved to be to our advantage. The noble Earl who has just spoken emphasised the importance of balancing the outflow, also concern at our losing too many trained men. I am inclined to dismiss that because, through the last 150 years during which the white Dominions were built up, those who left this country proved themselves the best. So, had we not had that migration, we should not have had the Commonwealth to-day. Those who are timid and. faint-hearted about what we can spare are surely wrong.
I recommend that incentives to additional child allowances might be timely. The Committee on Population have reported on the proportion of people that might suitably be parted with from this country. That figure is much lower than that of the Migration Board, the body to which the Secretary of State referred as the official body which advises him in this matter Issue can be taken with their figures of a maximum of 200,000 a year. There are many who feel that that figure might well be exceeded, and perhaps be 240,000. There are many who think the conclusions of the Migration Board are too conservative; that they are not imaginative enough; that they should go much further.
On that point, I will quote from the speech made by a member of the Board, Mr. Aitken, in another place, on the Second Reading of this Bill [OFFICIAL REPORT (Commons), Vol. 563 (No. 38), col. 5981:
"… they will only be accepted as the very beginning of a much more dynamic and constructive attitude toward; migration."
I had the honour, before the war, of serving on a board of a similar character which existed then. Looking back, and reading the reports to which we, as members, subscribed, I can hardly believe now that we could have been so conservative and so insufficiently far-seeing. So

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it may well be that the existing Board may follow the mistake of its predecessor.
There is a massive body of public opinion that is taking a great interest in migration. It is in step with the changing times. I would cite the Migration Council, whose composition is of energetic Members of both Houses of Parliament, of leading industrialists, of public personalities in many walks of life, and of writers of all kinds. They are in constant contact with the Migration Commissioners of the Dominion Offices in London, and their mission is to alert public opinion. I should like here to say that they have experienced receptiveness and consideration by the Secretary of State. They feel that, through the contacts they are permitted to have with the Commonwealth Relations Office, they are the better able to fulfil their mission. They also support the work with which the office is charged.
The Secretary of State referred to the amounts spent. This has annually fallen far short of the amounts Parliament has voted. It is felt that larger amounts could be effectively expended. Surely the difference between an average of under £200,000 and the £1,500,000 which is voted represents a small amount relative to the development of the Commonwealth which should be taking place. The concluding words of the Secretary of State, happily, said that there would be flexibility should need arise. We hope that it will commend itself to him that larger amounts be spent.
Here I am going to quote again from Mr. Aitken's speech (Col. 600). He said:
"The first Minister for Commonwealth Relations with enough fire in his belly' and stoutness of heart to tackle the Treasury on this issue will do a great job for Britain."
The present Secretary of State fulfils those requirements and, should he, in his wise judgment, feel it necessary, I am sure that he would have no hesitation in pressing the Treasury. The British origin content of the inflow into the Dominions at present is too low. Canada is down to about 30 per cent., and without quoting more figures, there is a strong concern about that. Only recently Ministers in Australia have said that they would willingly have 100 per cent. of British origin migrants. Let us hope that a more imaginative programme here will come nearer to fulfilling their hopes.
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Among speeches made in another place I would mention those of Mr. Aitken, Mr. Fisher and Mr. Nicholson, who made various suggestions which will doubtless have been brought to the attention of the Secretary of State by his advisers. There was also an impressive contribution by Mr. Shinwell, Minister of Defence in a former Administration. He used his varied experience of Government office to assist observations on his first visit to Australia and New Zealand. He came back impressed with the need for more being done. I will not venture to trouble the House by quoting again from that debate—
THE EARL OF HOME: I do not want to interrupt the noble Lord, but it is the practice here not to quote from speeches made in another place unless they are made by a Minister. I should not like to spoil what he is saying, but he has done that twice.
LORD BARNBY: I readily accept the correction. Sometimes those who, like myself, have been in another place, are inclined to overlook this when speaking here. I was, I think, referring to Mr. Shinwell, who is a Minister.
THE EARL OF HOME: No, he is not a Minister; he is on the wrong side.
LORD BARNBY: An ex-Minister.
THE EARL OF HOME: That is not good enough.
LORD BARNBY: I am permitted to refer to his enthusiasm for this cause. At any rate, suggestions were made in another place to the provision of additional media through which finance for Commonwealth development should be furnished. The existing bodies and their character were discussed in your Lordships' House last week and it would be superfluous to refer to them now. But the real, pivotal point about migration is the capacity of the receiving countries to finance expansion of population.
One suggestion which seems to have merit is that the building societies in this country should be encouraged, by tax concessions—of course, that would be a matter for the Treasury—to take part in the provision of houses supplementary to what are available, say, in Australia. In Canada the position is different. But in both Dominions, and in New Zealand,

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too, it would not be a loss to this country if British capital were encouraged to invest in real estate. The investment would be repayable over a period of time by the migrants who would occupy those houses. That would constitute what, above all, is wanted now—rivulets making a stream of remittances back to this country, particularly from the dollar area. Concern about the adequacy of the existing machinery was recognised by the Secretary of State, who has indicated that currently he is in process of consulting the Dominions to see whether something additional can be set up. Admittedly, there has recently been a stepping-up in the rate of applications for migration to Dominions. But surely that is no ground for complacency.
My Lords, I urge again, with all the force I can command, that there is no let-up in the policy of encouraging this outflow at the utmost rate at which it can be achieved. Above all, I urge this on the grounds of commercial self-interest. An increasing population in the Dominions means increased buying power by our most important overseas purchasers. A high British content in the population of the Dominions is the greatest safeguard for our future trade. In the past there has been opposition to migration on varied grounds. I do not omit selfishness on the part of those who, wanting workers, say that it is wrong to permit anybody to go out of the country. There is nonsense by those who would pour ridicule by insinuating thoughts of mass movement of millions of people. It is with the conviction that, as the Secretary of State has assured us, the Government mean to adopt a more active attitude, that I have great pleasure in supporting this Bill.
6.8 p.m.
LORD MILVERTON: My Lords, I support this Bill, and naturally am most anxious, like everybody else, to welcome it. In so doing, however, I should like to make one or two remarks, with a brevity suitable to the hour of the evening. It is obviously to our advantage to continue to assist in the expansion of these Commonwealth and Empire territories. It is not a one-way traffic in benefit; it is a two-way traffic, and the benefit is mutual. Btu it is also true that superficially, looking at the figures on the out-
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side of the Bill, they seem to be very small in relation to what we imagine to be the needs. The noble Earl who moved this Second Reading explained why they appear to be rather small. In any case, the human contribution is what matters; the financial contribution is only supplementary and incidental to that.
I certainly hope that in the future the administration of these funds will be directed with perhaps more drive and enthusiasm titan has been shown in recent years, and they should obviously be implemented with vision and with a suitable collaboration with representatives of the recipient countries who, after all, are the chosen arbiters of what these countries need. They ask us to help them only to get what they want, and it is surely not for us to try to dictate to them what they should want or what we think we should supply them with. The noble Earl, Lord Lucan, referred to what is generally mentioned in this connection—the desire to have a suitable cross-section of the people sent to these territories. I very much doubt whether this is a suitable subject for any rigid planning. As I view the question, one must leave all that to natural forces. The countries want key men and they generally want younger men and skilled men; but if they are satisfactorily supplied, then inevitably older people, their relatives, will go with them. If they do not there is nothing we can reasonably do to insist that a certain number of them should be taken.
One realises that these countries want to industrialise themselves and may ask largely for technicians, engineers and people with professional qualifications. On the other hand, many of these countries need farmers. But there is a curious split feeling over this matter. Practically every country in the world, not excluding relatively undeveloped countries, suffers from two complementary things; first, there is jealousy about land and land ownership and about the taking of land by immigrants; and secondly, and coupled with that, there is a world-wide tendency for people to leave the country and go into the towns. I emphasise again, however, that those are problems which are not ours but are for the recipient territories; and it is not for us to interfere in them. It is not what we want to send but what they want to receive which matters.

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The other point mentioned by the noble Earl, Lord Lucan, was whether we can spare these people. If I may say so with respect, I believe that here again there is rather a confusion of thought. It would be lamentable to put any obstacle in the way of anyone who wants to go abroad in this manner, and presumably nobody proposes to do so. In any case, that would be to turn the United Kingdom into a kind of close human reserve; and, apart from that, it would be a gross infringement of individual liberty. The question is, are we to encourage them? We need not seek an answer to that. Presumably the reply is emphatically, "Yes." And encouragement should stop only at the limit of the absorptive capacity of the recipient country. Again, the recipient country is fully entitled to take a selective attitude towards the immigrants it wants. But if the figures of the Overseas Migration Board are taken—say 200,000 persons a year—surely such a human investment is well within our means and likely to bring the most valuable returns to us.
It may be that we can ill afford to lose some of the highly-skilled men or some of the spirit of competent enterprise which goes with them; but surely the way to level up that difficulty would be to deal with the appalling lack of any incentive to be enterprising which is throttling the capacity of the best citizens of all ages and of all classes in this country. Penal taxation and vexatious restrictions naturally drive enterprising men to seek their fortunes abroad, and what will be our loss will be the recipient countries' gain. The real question then is, not "Can we spare them?" but "Can we afford to drive them away in this fashion?" That again is another question.
The noble Earl, Lord Lucan, referred to a matter on which I should like slightly to join issue with him: the necessity to pay respect to what he considers the adverse opinion about European immigration in countries where there is a multi-racial community. It seems to me that that attitude argues a terrible lack of faith in ourselves, our country and all that we have stood for up to date in these countries, all that has made these countries the land of promise which they are to-day. It is surely a bad idea that one should bow to ignorance and prejudice instead of trying to eliminate
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the conditions which give rise to ignorance and prejudice; and the best way to eliminate those conditions is to send to these countries men trained in our best traditions who are able to teach the people and to bring them on to see where their true advantages lie. I believe that one needs to tincture a sentimental attitude towards the citizens of backward countries with a little economic realism. Surely if we want our standards of value to prevail we must provide the men and women as well as the capital to ensure progress on those lines. If we are unable or unwilling to provide these things no doubt they will get them elsewhere, and it may be that they will get them from sources which we should deplore.
I should very much question, too, the idea that opinion, say in Africa, is averse to such immigration. There is a small group of educated élite who naturally want, and have ambitions to get, complete power in these territories for themselves. I am not for a moment condemning that, but merely stating it as a fact. But they do not necessarily represent even the majority of the educated classes. The people who are in favour of such immigration are not generally so vocal; it is only the adverse criticisms that we hear. In any case, who is to be the judge of what African opinion is? I have yet to know any African country where anyone who was really conversant with it would be so rash as to say with any definiteness what was the African opinion of that country. I need not go into that in any detail, abut the bulk of the people are not generally sufficiently informed on such questions as this to have any valued judgment whatever. They will listen, perhaps, to the most plausible orator that they happen to hear, or just will not understand any questions asked of them about it. But I am sure there is a large number of Africans who realise that the quickest way to the self-government they want is to welcome the help and assistance, in every direction, of Europeans who come to that country. I appreciate that that is a relatively minor matter in relation to this Bill, which chiefly applies to countries where there is not a multiracial question. I have great pleasure in supporting the Second Reading of the Bill.
6.19 p.m.
LORD BIRDWOOD: My Lords, I will detain your Lordships for only one

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moment. I have the privilege of serving on the Migration Council, under the chairmanship of the noble Lord, Lord Barnby, and I should like to support him in the view he has expressed in asking that perhaps some rather more positive direction can be given by Her Majesty's Government. As I understand it, the position is that there is a maximum of something like £1,500,000 a year, of which an average of £150,000 is spent, and it seems to me that the extra money which we are, apparently, allowed could be spent to some advantage. But I am not going to follow your Lordships who have spoken on the technical details involved. I will confine myself to putting what I make no apology for calling "the idealist view" of migration.
When, on August 15, 1947, quite suddenly, two new nations joined the family of Empire and Commonwealth in equal partnership, something very fundamental and profound happened overnight. A community of some 70 million Anglo-Saxons was transformed into a partnership of 475 million, of whom 400 million were Asians. And, of course, the process goes on. I do not suppose any of us were not stirred by the significance and meaning of that great transformation, not only for the rest of the Commonwealth but also for a watching world outside, in terms of racial relationship and the general progress of the world. At the same time, I feel that it would be wrong if we did not take every measure we could to strengthen the bonds between the Anglo-Saxon founder members of the Commonwealth, because if anything should happen to destroy Anglo-Saxon unity within the Commonwealth, one could say that the Commonwealth as a whole would most certainly disintegrate. It is because see in these measures the prospect of holding the Anglo-Saxon element within the Commonwealth together that I believe them to be for the benefit of the Commonwealth as a whole.
I would say just one word on migration to the Commonwealth from countries in Europe outside this country. Take the case of Canada. I stand open to correction, but I understand that migration to Canada is at the moment running at the ratio of about two Europeans to one Englishman. As time goes on, by the turn of the century, that might result in very significant figures in Canada, perhaps threatening to alter the complexion
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of that great Dominion. At the same time, I suggest that what really matters is not who goes in—it does not matter whether he is a German or a Pole or a Czech—but what happens to him when he gets there, and what he becomes. If he is prepared to become a loyal citizen of the Commonwealth, to offer loyalty to the Crown, I can see no reason why we should put any limitation on migration from sources other than this country, provided that alongside that migration there is all the time an injection of the necessary blood from this country to keep the balance. I think it was Field-Marshal Smuts who said of the Commonwealth that it sought neither standardisation nor denationalisation, but only the richer, fuller and more individual life of the component nations. It is in the belief that a stream of migrants from this country contributes to that richer and fuller life of the Commonwealth that I would always support this measure.
6.25 p.m.
LORD STRATHEDEN AND CAMPBELL: My Lords, I should not like this Bill to go forward without telling my noble friend what a tremendous encouragement it will be, and has been, to the voluntary associations who assist the migration of children. There are, as my noble friend possibly is aware, difficulties now in arranging for the migration of children. I will not go into the matter now—the moment would not be appropriate. But it is most heartening to realise that the Commonwealth Relations Office recognises the value of these children as reinforcements to the population of the Commonwealth, arriving, as they do, at an age at which they can be completely assimilated into the life of those countries. There is one point which may arise in future upon which I do not expect, and cannot possibly expect, an answer from my noble friend to-night. But the conditions relating to the migration of children are changing, and in view of this if there should come a time when The present rules governing the awards of these grants do not absolutely apply, I am sure that he will, as he said in his speech, keep a flexibility of mind in dealing with and, no doubt, overcoming any difficulties which might arise. My Lords, I warmly support the Second Reading of this Bill.
6.27 p.m.
THE EARL OF HOME: My Lords, I am glad that the noble Earl, Lord Lucan, was able to support the Bill on behalf of the Opposition, and it is encouraging that all of your Lordships who have spoken have agreed that the principle of United Kingdom citizens emigrating to Commonwealth countries is a good one, and one that should be sustained and encouraged. The words of the late Field Marshal Smuts, which Lord Birdwood quoted, are very appropriate. We believe that the inclusion of a larger percentage of British people from the United Kingdom in the Commonwealth countries does bring to the whole association a richer and fuller life. Lord Lucan said that migration must not take away only the young and the tit. We are keeping a very careful watch on that point. There is, as yet, no evidence at all that the family element which has prevailed in emigration so far is being upset. Indeed we keep in very close touch with the Commonwealth Governments on this matter, with a view to ensuring that a cross-section of the population of the country migrate from this country, and they co-operate with us in seeing that that is achieved. So far as emigration to multi-racial countries is concerned, we have not done much except to assist a few children to go. I do not know whether the Governments concerned will, in the future, have any scheme to put forward, but if they have we shall, of course, give it most careful consideration. Up to now, as I say, we have not done very much except to assist a few children.
Lord Barnby asked that the Government should not be complacent in this matter—I think he urged the Government to use a little more imagination. If the measure of imagination is spending large sums of money, I can be as imaginative as anyone else. But there are certain practical considerations which have to be taken into account. We in this country have had for some years since the war a condition of full employment. In every Commonwealth country there has been a measure of inflation, so they have had to put a limit on the numbers of people they
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can take in. In our own financial circumstances, following the war, we must check our expenditure to that which is necessary and which gives us the results. And it is the results that matter—I am sure that the noble Lord, Lord Barnby, and other noble Lords will agree with that. On the emigration figures, it seems to me that last year the momentum increased, and the figures are rising fast. It seems to be a natural move; and if this is a natural move, and people are leaving this country because they think they will find good prospects in the Commonwealth countries—well, good luck to them! If we can attain without subsidy all the figures indicated by the Overseas Migration Board, all the better for everybody; but as I have said, we have deliberately left a margin in the Bill. We have put the ceiling at £1,500,000, so that, should the need arise, we can exercise the necessary flexibility.
I am glad that my noble friend Lord Stratheden and Campbell said a word about the emigration of children and the work done by the voluntary associations. Last year, I had a chance of seeing for myself something of these children in the places set aside for their education. Although, no doubt, there can be improvements—after all, there can be improvements in many of the schools which look after children here—I was immensely impressed by the free and healthy life these children were enjoying and, what is more, by the percentage of successes in after-life which the children who come from these schools have had in Australian society. If any variations are needed in our practice here, and in the rules governing the emigration of children, I hope that when my noble friend has made up his mind what improvements might be made, he will consult the Commonwealth Relations Office; and if we can give any help, we certainly will do so. I do not think I need say anything more, except to repeat that we believe that within the framework of this Bill we can encourage a migration policy which will be useful both to this country and to the Commonwealth.
On Question, Bill read 2a: Committee negatived.

BUSINESS OF THE HOUSE
6.32 p.m.
THE EARL OF HOME: My Lords, before the House adjourns, I should like to tell your Lordships that it has been agreed to take the next stages of the Transport (Railway Finances) and Commonwealth Settlement Bills, which are expected to be formal, before the Committee stage of the Shops Bill next Tuesday. It is expected to adjourn the Committee stage of the Shops Bill, to which there are a great number of Amendments, at about 7 o'clock and to resume the Committee stage on the following Monday, February 18, at 2.30 p.m. I thought that it might be useful for your Lordships to know that.

HOUSING BILL [H.L.]
Order of the Day for the Second Reading read.
EARL FORTESCUE: My Lords, on behalf of the noble and learned Viscount the Lord Chancellor, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Earl Fortescue.)
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.