TRANSPORT (BORROWING POWERS) BILL

HL Deb 03 February 1959 vol 213 cc1010-48

2.45 p.m.

Order of the Day for the Second Reading read.

THE EARL OF GOSFORD

My Lords, I rise to move that this Bill be now read a second time. The Bill has two clauses. Clause 1 extends the limit from £600 million to £1,200 million on the amount which the British Transport Commission may borrow either for capital purposes or by way of temporary loans. Clause 2 extends from £250 million to £400 million the limit on the amount which the Commission may borrow from the Minister to meet deficits on revenue account of British Railways during the years 1956 to 1962 under the Transport (Railway Finances) Act, 1957. The sum of £600 million involved in Clause 1 is not new money suddenly injected into the economy but was in effect pledged by Her Majesty's Government in 1954 when they said that they would hack the original modernisation plan. The progress of investment in modernisation has proved rapid, and out of the Commission's powers to borrow £600 million a sum of £511 million had already been exercised by the end of December last. What is now proposed is a second instalment of power to borrow, chiefly to cover continued modernisation of the changing railway system.

I think it would be well for me to mention here that the existing systems of control on the Commission's borrowing and capital investment and all other conditions will continue to apply just as they have so far. What the Bill proposes to do about the Commission's ordinary borrowing for capital purposes does not therefore represent any "loosening up" of due control. Indeed, the possibility that from time to time Parliament might have reason to adjust the limits on the Commission's borrowing powers was stated quite clearly by Ministers responsible for bringing forward the earlier legislation. As to the extension of the existing limit on deficit advances, this will be governed by all the existing controls and conditions, including those about repayments, and the time schedule laid down in the Transport Act, 1957. There is no loosening of the control there either.

The sums involved in Clause 2 and in the 1957 Act were and are to tide over the period during which the railway modernisation plan could not be expected to give a large enough return to make the railways break even financially. The Government's policy of providing these advances was based on what might be called the "prospectus" of the Commission contained in its statement Proposals for the Railways, published as a White Paper, (Cmd. 9880), as your Lordships know, in 1956. The hope set out in the Commission's statement was that the level of railway deficits after increasing in 1956 and 1957 would in 1958 remain the same, or even be slightly less than in 1957, and would thereafter decrease to the break-even point of 1961–62. In the event, the year of 1958 produced a deficit on the railways of the order of some £30 million above what had been estimated at the beginning of the year. This was mainly due to the setback in the coal and iron and steel industries leading to a sharp and unexpected decline in the railways' freight carryings of coal, minerals and steel products, all factors outside the control of the Transport Commission.

I think I ought to underline here the importance of this traffic to the railway earnings, as shown by the fact that coal, coke and mineral traffic accounted in 1958 for over half the railway's total freight receipts, and well over one-third of the total of all receipts, both passenger and freight. As soon as the possibility of a larger deficit than planned for 1958 became apparent, the Chairman of the Transport Commission and my right honourable friend the Minister of Transport and Civil Aviation conferred, and as a result the Chairman wrote a letter to my right honourable friend setting out the freight position, especially over coal and steel traffics, and giving his estimate of the financial problems to which it would give rise. He outlined also the steps that the Commission were taking to correct the situation, and I shall refer to this later. As your Lordships know, that letter was published as a White Paper (Cmnd. 585).

The Chairman forecast that the railways deficit for 1958 would turn out to be of the order of £85 million instead of £55 million, which was the target they had set themselves at the beginning of 1958 and a figure broadly in line with the forecast given in the White Paper. The Government accordingly decided that the deficit for 1958 should be covered as part of deficit advances under the Transport (Railways Finances) Act. In taking this decision, the Government are not in any way introducing a policy of subsidising the railways. It must be remembered that the railways, through no fault of their own, have the enormous backlog of modernisation and even maintenance to make up, not only for the war years but for the early post-war years as well. During this period until modernisation is completed, the railways are especially vulnerable, and have the problem of making ends meet in the short term. The Government have helped them over this period by lending them this money. This, however, does not mean any slackening in the British Transport Commission's determination to effect all possible economies, as what I am about to say will, I hope, show.

The Chairman's letter went on to outline the economies which the Commission had already introduced on the railways in 1958, before the sudden drop in traffic was evident. These were, first, the savings they had introduced at the beginning of the year to cut some £14 million from the Area Board's budgets, and, secondly, the further reductions brought in at the time of the wages agreement reached in May. This second series of economies were at a rate to produce £6 million over a full year. The Chairman added that the Commission intended to aim in 1959 at a further reduction of £20 million a year. The Chairman also offered the suggestion that the independent auditors appointed by the Minister should verify that the Commission's undertakings earlier in the year about steps to reduce working costs of British Railways would be substantially fulfilled by the end of the year, and, that the sudden drop in coal and mineral traffic was the main cause of the position existing, and that this was due to a fall in the traffic offering rather than to any failure by the Commission to hold their share of these traffics. To this my right honourable friend willingly agreed. Auditors were appointed, and their report. based on the figures up to the beginning of November last, confirmed that, barring unforeseen adverse factors in the last two months of the year, the undertakings given by the Commission would be substantially fulfilled by the end of 1958. The Auditors' report also confirmed that the railways financial position was attributable to the fall in receipts as set out in the Chairman's letter. They confirmed, too, that the fall in coal, coke and mineral traffics was due to a fall in the volume of those traffics offering rather than failure by the Commission to hold their share. I should add that the results in fact recorded for the later months of the year have confirmed the accuracy of the Chairman's forecasts of the final outturn for the year. They have proved to be almost exactly correct..

In his reply to the Chairman, my right honourable friend made it clear that the Government expected the Commission not only to press forward with the utmost determination with their plans for securing further economies, but also to look at the scale arid pace of the different parts of the railways modernisation plan in the light of the Commission's proposals for speeding up economies. Accordingly, at my right honourable friend's request, the Commission have already started on a review of the whole modernisation plan. The Commission agree with the Government's view that this should be both thorough and detailed. Its wide scope and realistic nature are perhaps best indicated by the terms of reference. There are three. The first is an account of the achievements under the modernisation plan to the end of 1958, and of the benefits obtained. The second is a detailed re-examination of the future course of the modernisation plan. This is to refer particularly to the next five years and is to be related to the future size of the railway system needed in view of current economic developments and future expected requirements. The third is a reappraisal of the economics of modernisation, in the light of the second term of reference. It will include the steps necessary to achieve the earliest possible break-even date based on an up-to-date assessment of future traffics, costs and economics. I should emphasise what my right honourable friend has already said in another place. He said, I must make it plain that at present both the Commission and the Government have not departed from the target set in the White Paper of achieving the break-even by 1961–62. The Commission, in carrying out their inquiry, know that they can have any help the Government can give. The Commission have already consulted with the National Coal Board and the Iron and Steel Board as to the future levels of both traffics, and are having discussions with bodies representing its customers—the Federation of British Industries, the Association of British Chambers of Commerce and the National Union of Manufacturers. By these means the estimates and views of the customers should be brought into account in reassessing the modernisation plan. My right honourable friend hopes that the results of this inquiry will be available to lay before Parliament in the spring.

Meanwhile, progress with modernisation is continuing as fast as possible, and the Government are backing it, year by year, in terms of capital investment. Under the original plan, the capital investment in the railways was to have been £135 million in 1958 and £140 million in 1959. In fact, the agreed total for 1958 was £145 million and the allocation for this year is £178 million. That is a record high figure. The Commission, in using this investment, recognise the need to concentrate modernisation on a narrower front in order to obtain quicker results. For instance, as regards main line electrification, the Commission have decided, as your Lordships will know, to concentrate all available resources on the London Midland Region main line from Manchester and Liverpool to Euston, and thus hope to accelerate its completion.

I will now turn to what has been achieved by modernisation up to the present time. The best results so far are to be found, quite naturally, on the passenger side of the railways' business. Passenger receipts on British Railways for 1958 were within 1 per cent. of the Commission's target. Your Lordships would no doubt like to have a few examples of the good results that have flowed from the introduction of diesel multiple-unit services.

In Hampshire, for instance, where the Southern Region introduced in 1957 diesel-electric local services, during the first six months there was an increase of 29 per cent. in the number of passengers carried and a reduction in the staff required to work the services: in fact it became necessary to order extra vehicles to cope with the traffic. In the Scottish Region, the inter-city diesel service between Edinburgh and Glasgow, introduced in 1957, carried 700,000 extra passengers in its first year of operation, and there has been a further increase in the second year. On the Newcastle-Middlesbrough service, introduced towards the end of 1955, annual receipts have increased from £207,000 to £312,000. Furthermore, a loss on movement costs of £10,000-odd in 1955 has been changed into a surplus of over £137,000 in 1958. On the Bradford-Leeds-Harrogate service, first begun in 1954, annual receipts have increased from £23,000 to £116,000 under diesel operation.

Turning to main-line trains, the "Master Cutler", the new express diesel-hauled Pullman service between King's Cross and Sheffield, has already won excellent support from the public. Two further diesel expresses, with Pullman accommodation, will come into service during 1959, one in the London Midland Region, between Manchester and St. Pancras, and the other in the Western Region, linking Bristol and Birmingham with London. Diesel locomotives have also gone into service hauling main-line expresses elsewhere—for instance, the "Broadsman", on the Eastern Region's Great Eastern line, and the "Talisman" and "Aberdonian", between King's Cross and Newcastle.

As to the future, the Commission are accelerating the introduction of diesel locomotives. By the end of 1961 nearly 1,100 diesel main-line locomotives will be in service, and the number of diesel multiple units will have been doubled, from 2,300 to 4,600, by the end of 1961. The increased authorisation of capital expenditure by the Commission for 1959 includes sums which they have allocated to speed up the purchase of diesels. As for electrification, as your Lordships will know, several important schemes are already in progress; on the North Kent line, the first section of which will be completed in the middle of this year; on the London-Tilbury and Southend, and part of the Great Eastern line, and on certain suburban lines to the North-East of London and in Glasgow. As for main-line electrification, the Commission propose, as I have already said, to concentrate resources on the London Midland Region line from Euston to Manchester and Liverpool.

Now, my Lords, I come to the important subject of freight. Freight, as the figures show, presents a more difficult problem. Schemes of modernisation are bigger and take longer to yield results. Modernisation is vital if the railways are to compete successfully with road transport. Furthermore, it is from freight that the Commission obtain the bulk of their receipts. Already the Commission have about 44,000 containers for door-to-door, road-rail-road carriage. Fitted freight trains represent over a third of the whole, and the number of wagons with continuous brakes is about 270,000. The "Export Express" scheme to the docks and the "Green Arrow" scheme for full wagon-loads are both doing well. Some noble Lords may have visited the Commission's Freight Transport Exhibition at Battersea in October, where many of the Commission's existing, new and specialised equipments and techniques for handling freight were on show.

Your Lordships will perhaps have read in the Press only last week of the London Midland Region's announcement of a freight modernisation plan. Their plan covers many of the features I have mentioned, including better freight train services, concentration of freight-handling at a smaller number of key goods railheads, containers and modern equipment for transshipment and the use of rail and road for what each can do most efficiently. Economies include the reduction in the wagon fleet and the replacement of steam shunters by diesel shunters. The reorganisation of marshalling yards will also bring economies, by reducing the number of smaller yards and concentrating the work in fewer but larger all modernised yards. For instance, the new marshalling yard at Temple Mills, recently brought into use, enables nine existing yards in the area to be closed completely. These are only examples. I hope that what I have said has shown to your Lordships that the Transport Commission are really pressing forward with their plans for modernisation.

My Lords, the importance of the railways as employers—one of the country's two largest single employers—makes it right that I should say something before I finish about the effects on employment of the modernisation and concentration of the system. Savings and new and more economical methods of operation are bound to mean some economy in the labour needed to do a given job, but the Commission have no intention of undertaking any indiscriminate slashing of the labour force. The Commission have full consultation, under proper agreements, with the unions concerning redundancy. A reduction in the labour force of 20,000 men was achieved in this way between 1958 and 1959. That is a large figure, but let me set it in perspective. The total staff of the railways in 1957 was over 570,000, and the total wastage from all causes in that year was nearly 80,000. That gives a certain amount of margin Unfortunately, the redundancy and the natural wastage cannot always fall together in the same grade and the same place. But the Commission do their best to avoid and lessen hardships in these cases.

The railways are trying to face and overcome their problems under changing conditions. They have to face the growth of road transport. In a free economy, the user must be free to choose his means of carriage. This freedom is in the interests of the efficiency and economy of our industry and trade, on which depends their ability to compete in the world.

To help the railways face this situation the Government have done their part. By the Transport Act of 1953, and the charges schemes which followed it, the railways' freedom to behave in a commercial, competitive manner was greatly increased. The reorganisation of the railways following the passing of that Act brought more decentralisation, thus bringing management closer to operation and users; and this has been taken further by the decentralisation within regions to lines and divisions. When the Commission had produced the Railways Modernisation Plan the Government gave it their backing. This has been continued by the substantial and increasing capital investment the Commission have obtained.

Then, finally, the Government are helping to tide the Commission over the difficult years of loss until modernisation pays off by lending the money towards the railways' deficit. The present Bill maintains this backing. To ensure that the plans for which this backing is applied are sound and realistic, the Commission are carrying out the thorough reappraisal I have described, and will report their findings to my right honourable friend. The Government hope by these means to ensure the most useful development of a vital industry and a railway system which, they are convinced, is essential to this great industrial country.

My Lords, I should not close without paying a tribute to the devoted and hard work which Sir Brian Robertson, the members of the Commission and of the Area Boards, the managements and staffs, and all, in every grade, who work on the railways are doing to revive their industry and give service to the nation. I now ask the House to give the Bill a Second Reading.

Moved, That the Bill be now read 2^a.—(The Earl of Gosford.)

3.10 p.m.

LORD SILKIN

My Lords, I should at once like to associate my noble friends with the last words of the noble Earl who introduced the Bill by echoing the tribute which he has paid to the Transport Commission and to all who are playing their part in endeavouring to build up the railway industry. The noble Earl has introduced, in a most interesting and informative speech, a Bill of the utmost importance. I could have wished that noble Lords opposite had found this Bill as exciting as the Deer (Scotland) Bill, or even as the question of the Princess Louise Hospital; but apparently noble Lords opposite are quite prepared to regard the expenditure of £600 million on our railways as a matter of little importance, at any rate judging by the list of speakers in front of us.

Let me say at once that this Bill, so far as we on this side are concerned, is non-controversial. We entirely agree with the proposals contained in the Bill and do not in any way offer any objection to them. Nevertheless, it is perhaps appropriate that we should say something, and I propose to say a good deal about the background of the conditions in which the railways find themselves and the way in which we feel that the considerable deficiencies which have grown in the past few years should be regarded. I would wish at this moment that my noble friend Lord Lucas of Chilworth had been here to take my place. He would have spoken with much greater knowledge, authority and experience on this matter. Unfortunately, I can claim to have none at all, and if I make any mistakes of fact, I hope that the noble Earl, in due course, when he comes to reply, will take account of the fact that my own knowledge on this subject is somewhat limited.

I should like to begin by considering what should be the approach to railway finance. There is, I believe, a considerable difference of outlook between this side of the House and noble Lords opposite on the question of the finance of the railway system. Should we regard the railways as a purely commercial undertaking, selling commodities at the best possible price, and withdrawing commodities on which they cannot make a profit, just as if they were selling a line of stockings—"not profitable, let us withdraw it"? Should their accounts show a surplus—not only an overall surplus, but a surplus on every individual item of their undertaking? Or, still less, should they withdraw any particular service which is not showing a surplus? If that view is taken, it follows, for instance, that all branch lines which are not self-supporting should either charge increased fares, sometimes prohibitive fares, or be closed down, however essential the service might be in the interests of the community.

Let me take the case of the suburban track. In paragraph 14 of the White Paper to which the noble Earl referred, entitled Proposals for the Railways, there is contained this statement, which I wish to quote: A very large part of the railway track mileage in the great conurbations like London, Glasgow, South Lancashire and Birmingham is primarily used for the urban and suburban passenger services. These services carry about 1½ million passengers daily, mainly to and from their work, in brief and exceedingly heavy surges. They account for about one-half of the annual total of 1,000 million passengers on British Railways. The roads could not physically cope with such surges. The railways alone can give the concentrated loading, the strict control and the timing which make these movements possible. A railway can deal with a throughput of at least 20,000 persons an hour for each track and a large city terminus may handle over 100,000 persons on a busy morning. Moreover, the public travel at higher speeds over rather longer distances, and in safer circumstances, than obtain on the roads. Then there is this important sentence: Clearly, there is no alternative to these railway services, although they tend to be expensive to provide and relatively unremunerative. Summarising this statement, it means that about one half of the total passengers of this country are being carried to and from their work wholly unremuneratively.

The question we have to ask ourselves is is that a legitimate function of the railways or should they regard these services as something which should be made to pay, and should these particular passengers be required to pay fares commensurate with the cost of providing the services? In other words, ought fares on these services to be increased to such a point that the services become self-supporting, regardless of all other economic and social consequences, such as the risk of inflationary pressure, and of personal hardship on individuals through the fact that they are, in many cases, compelled to live some distance from their work? As every noble Lord knows rents and other costs are exceedingly high in the centre of London. Only a comparatively well-to-do person can live in Westminster or in Chelsea; most people are compelled to live at a considerable distance, and to incur these fares and to travel to and from their work daily. The question is, therefore, as I have said: in these circumstances, should fares be increased to the point where this particular service affecting half the people of this country should be remunerative?

A similar question arises with regard to goods traffic. Ought we to demand that no goods be carried for commercial or strategic purposes, or for national defence, or for export, unless in every case a full economic price is paid for the services rendered? Then, again, take a branch line serving a limited number of people and, therefore, not self-supporting. Should we necessarily close down this line, even though there is no satisfactory alternative service available, because it cannot be made to pay, unless the users are prepared to pay an economic fare, however high it may be.

There are many who take the view that the answer to all these questions is in the affirmative: that each section of the railway service should be made to be self-supporting; they argue that if any one section is not self-supporting, then the remaining users of the service are, in effect, subsidising those that are not paying their way. A gentleman in Bradford may say, "Why should I subsidise somebody in Cornwall? Why should I subsidise people travelling to and from their work in London or Glasgow? Why should they not pay their own way?" That is an intelligible doctrine, but it is a doctrine which, in my view, cannot be maintained. It is impossible to maintain this doctrine of detailed financial liability in regard to the railways because they are running a unique and essential national service, and they must provide that, in the long run, regardless of whether or not the whole service pays. It may even be in the public interest that the whole service should be unremunerative—that is, that it should not pay its way, and that it should be subsidised at the expense of the community in the greater interest of the community.

My Lords, both those views can be maintained, but I certainly regard the railway undertaking as a national service which has to be maintained, because, as I indicated in the paragraph in the Report which read, there is no alternative to it in many cases and therefore it has to be subsidised. This is not to say, of course—and I would not say it for a single moment—that the Transport Commission should not be carried on as efficiently and economically as possible; nor that every effort should not be made to keep inefficiency down to the very smallest figure—if, indeed, there has to be inefficiency. I hope that it will not be suggested that what I am trying to advocate is inefficiency on the part of the railway undertaking or of the Commission, for of course I am not. But I should like to ask now; what is the attitude of Her Majesty's Government to this question that I have posed? Do they regard the railway system as a public service which has to be maintained and supported, regardless of whether or not it can be made to pay?

I tried to discover the Government's answer from their general attitude to the railways, and to me they seem to blow hot and cold. On the one hand, they say that it is Government policy that nationalised industries, in fixing their charges, should seek fully to reflect their costs. On the other hand, when, in March, 1956, the Transport Commission sought to increase their freight and certain passenger charges, they were asked by the Government, in the national interest, to postpone the application of these increases for six months during which period—and here I quote: a fresh assessment of the Commission's position and prospects would be undertaken to be followed by such special action as seemed appropriate at the end of that period. Her Majesty's Government cannot have it both ways. They cannot demand that the undertaking should be made to pay and also intervene to prevent adequate charges from being made. Furthermore, it is universally accepted that for many years both passenger and freight services have been urgently in need of modernisation, and that the success of the undertaking depends entirely upon such early modernisation. For thirty years no substantial monies have been spent on modernisation, or even on replacement. The noble Earl, Lord Gosford, said in his speech that there had been very little maintenance work done in the war years. I suggest to him that maintenance work had been neglected for a great many years before the war.

I say that modernisation is accepted as the only way in which our railways can be saved, and yet Her Majesty's Government have deliberately adopted a policy of financial restriction which has pre-o vented the Transport Commission from carrying out the modernisation scheme which the Government themselves had approved in 1956 but for which, in any event, they did not provide enough money. It was at the Government's own request that modernisation was slowed down, as a result of their restrictive policy. And a further consequence of the Government's restrictionist policy since 1956 is the fact stated by the noble Earl: that there has been a serious decline in bulk traffic, particularly coal, minerals and steel, in the last year or more. The noble Earl was right in saying that these items represent over half the total traffic carried by the railways. In fact, I understand that they represent about 60 per cent.

In the light of the facts I have given, about Government intervention and the Minister's interference in preventing the Transport Commission from carrying out their task, it is quite unfair for the Minister to be constantly nagging the Commission. For instance, the Minister, in his letter of October 30, to which the noble Earl referred, points out that a further deficit of £25 million is an extremely serious matter and that the Government cannot envisage an indefinite extension of the time when the Commission will break even. The whole tone of the Minister's letter is unreasonable in its language and content. It is that of a heavy father admonishing a naughty son for extravagance. Anyone who reads that letter—and I invite noble Lords to read it now—must agree with me that that is its general tenor. Her Majesty's Government are not justified in suggesting or implying that there is any fault on the part of the Commission when the Government themselves, by their own policy, are largely responsible for bringing about the present position.

I have said that it is an essential that we should modernise the railway services, but I am extremely doubtful whether the Commission will ever be able to make the railways profitable on their present basis. I would ask noble Lords to remind themselves of the situation under private enterprise, before the war. Noble Lords will remember that the railways were in a very bad way. The most successful of them was the Great Western Railway which paid a dividend of 3 per cent. from 1931 onwards—not exactly princely. The London, Midland and Scottish paid nothing in 1932 and 1933 on their 4 per cent. redeemable preference stock; and from 1934 to 1938 they never paid more than 1⅝ per cent. On their ordinary stock they paid nothing in 1932, 1933, 1934 or 1935, and thereafter they paid dividends ranging from 1¼ to 1½ per cent. In the London and North Eastern Railway Company the ordinary stock was issued in 1926 at par and its value went down from £100 to £20. As one of my noble friends was saying to me, at £20 they came within reach of the ordinary working man. On their 5 per cent, deferred ordinary stock they paid no dividend at all from 1931 onwards.

The House will have in mind the agitation about a "Square Deal" which was organised by the railways in the years from 1930 onwards. The efforts of the steel industry to-day are a mere whisper compared with the scream of those days. The railways were complaining of unfair competition by road transport which was taking from them the more profitable goods traffic, leaving the railways with the mare difficult and less remunerative type. That was the position before the war, and I submit to noble Lords opposite and to the whole House that if the railways had remained in private hands the Government would have been compelled to regard the railways as a national service and to find the money to enable modernisation to take place and to meet the deficiencies—just as they are finding to-day in respect of the Transport Commission.

It must not be assumed for one moment that this is the result of nationalisation. I have set out the position of the railways, and noble Lords cannot possible suggest that the position to-day would have been any different, or certainly any better, if the railways had remained in private hands; indeed, in many respects it would have been worse. When the Labour Government decided upon nationalisation of transport they included road transport, because they regarded the general transport of passengers and goods as a comprehensive national service and it was unfair to separate the two. It was a "life-saver" to the railways. It was their one hope of making the transport industry of this country pay.

The hiving off of the greater portion of road transport by the present Government in 1953 in my view largely destroyed any real hope that what was left—that is, mainly the railways—would be self supporting. The inability of the railway undertaking alone to be self-supporting is not confined to this country. Noble Lords who know France, the United States and Germany will know that those countries are in exactly the same position, and certainly in those countries the railways have to be supported by the State. I do not know what the position is in other countries, but I should be very surprised to hear that in any country in the world the railways pay. Yet there is no alternative to the railways and they must be maintained.

The growth of road transport everywhere has seriously affected both passenger and freight traffic. On the question of combining the two services and treating them as one great national service, each to be employed as most convenient, I agree with the noble Earl that one should not dictate necessarily in what manner goods are to be transferred: they must be transferred in each case in the way which is most suitable and convenient for those who are transferring them. But the corollary to that is that it is wrong that the most profitable part of the freight industry should go to private concerns and that the less profitable part should be left to the Railway Commission; and unless we can find some way by which we can combine the two and run the whole thing as one service, I can see little hope that the Commission will be able to pay their way by 1962 or in any foreseeable time in the future.

I should now like to say a few words on the subject of modernisation. If, as I believe, the Railway Commission as at present constituted (that is, with the greater part of road transport hived off) are most unlikely to become self-supporting, they are still under an obligation to reduce the loss in every practicable way. I was gratified, as the whole House was, to hear of efforts that are being made by the Commission to reduce their losses and to convert some of the losses of passenger traffic into a surplus, and I have every belief that when modernisation is complete that position will to a great extent be improved. The Chairman, in his letter to the Minister last October, set out in the White Paper, says that: Modernisation is itself the best way of achieving reductions in expenditure and increases in traffic. And I wholly agree.

Before I sit down I should like to make a few suggestions, particularly in connection with passenger traffic. The first is that a journey by train, especially a rather long one, should be made a pleasurable experience, and it is certainly not so at the present moment. It should be an occasion where one can relax or work. Some services abroad provide a secretarial service. Why should not we? Why should not the businessman, or a politician for that matter, be able to do his work or prepare his speeches in the train, and secretarial services be available? I read that in some countries it is possible to speak on the telephone from the train. Is it beyond our capacity to do the same thing? Why should we not?

Then, at the present time, one has a horror of trains because it is always a gamble whether or not on some services one is going to get a seat. One may have to stand up for long periods in the train because it is crowded. That should be stopped. There should be ample accommodation for all passengers, and trains should not run on the basis that there must be fewer seats available than there are passengers willing to travel. There should also be ample facilities for good refreshments at all times during the journey. It is true that on long journeys one can vet at set times a table d'hôte meal, at a price. I am not complaining of the price; no doubt is a fair price; but why are we bound to have what the Railway Commission offer us rather than what we really want? Why cannot we get an à la carte meal? Some of us are on a diet and cannot take these table d'hôte meals. Why should we not be able to get the things that are good for us rather than things that are put in front of us? And why must we eat at 6.30 or at 12.30 and at no other time, even though we are not quite ready to do so? A lot can be done by the railways in that way, especially on the long journeys. It should be possible for people to get something to eat at any time, and for the service to be rendered cheerfully and willingly rather than grudgingly, as if those concerned were conferring a great favour on us.

On the question of punctuality, I understand that over half our trains arrive late. This point was raised in another place and I believe the Minister said, "Yes, but sometimes only a few minutes late." But sometimes very late. Why? Why is it not possible for trains to run punctually in normal weather? One understands that in foggy weather or in icy weather or snow trains may be unavoidably late, but why, on a beautiful, pleasant, sunny day does a train arrive even a quarter of an hour late? After all, we are living in a world where we try to make the best use of our available time, and a quarter of an hour may make all the difference between catching a connection, keeping an appointment or being available in this House to make a speech, and losing one's opportunity. Surely, we ought to do better than have half our trains arriving late. I was in Italy recently and I believe it is an offence for a train there to arrive late; at any rate, every train I travelled in arrived "right on the dot". I was told it is regarded as very serious for any train to arrive even a minute or two late.

As to sleeping accommodation, I suppose it is all right first class, but second-class sleeping accommodation is a nightmare. The idea of having to get on to a step-ladder and finding one's way to a bunk at the top is rather horrifying, and surely we can do better than that, even for second-class passengers. I hope that all these things will be borne in mind; and that modernisation really will be modernisation, and will be regarded as something which will popularise the whole service, and not merely one section of the service for a selected class of people. And cannot we do something to brighten up our dreary stations—the King's Crosses, the Liverpool Streets, and the main line stations in the large towns? They are the most dreary that one can imagine—and not only those, but the intermediate ones as well. I realise that you cannot do all these things at once, and that you cannot please everybody: but that is no reason why you should please nobody, and I do not know anybody who regards travelling on our railways to-day as a pleasure. It is always regarded as a necessary evil.

My Lords, I hope that the Commission will now be allowed to proceed with their modernisation plans without any further interruption. They have had a good deal to put up with. They have a tremendous task in bringing our railway system up to date and in making it a system that we can be proud of and glad to use. If they set about this task with courage and imagination, being willing to learn from the best practices and examples in other countries, I have no doubt that they can, and will, bring about a material improvement, possibly even a revival, in traffic and in travel, as well as in the transport of goods. We once led the world in our transport system, and there is no reason why, with courage and imagination, we should not do so once more.

3.42 p.m.

LORD BURDEN

My Lords, I should like to associate myself with the tribute which towards the end of his speech the noble Earl paid to Sir Brian Robertson and his staff. I do not propose to follow my noble friend Lord Silkin into the financial problems, or into the higher realms of policy. I suppose, however, that it would be fair to say that the Transport Commission must work, and will work, within the limitations (or within the law, it is probably right to say) imposed by the 1947 Act—although, as my noble friend has pointed out, the Conservative Government considerably worsened the position for the Transport Commission by hiving off the lucrative road transport. I suppose that, at some time or other, the nation will have to make up its mind whether the railways are to be run in accordance with strict commercial principles, as I think is indicated in the 1947 Act, or whether they must be regarded as a social service and treated as such. However, those are questions in the higher realm of policy, into which we obviously cannot go too far this afternoon.

I, of course, have to take a far more humble rôle, and that is of someone who has spent the whole of his working life in the railway service, and I naturally look at this Bill, and at what it involves, with that bias. No one interested can fail to see the work now in progress on the railways—work which will enable them, I believe, to serve the travelling and trading public in accordance with modern requirements—without a feeling of pride and satisfaction. The modernisation schemes, at Barking (my old station, for which I have a particular love), Notting Hill Gate, and on the line from King's Cross to Peterborough, are merely instances of the work of which the noble Earl has given us details and which is going on throughout the whole of the railway system. I consider that, with the additional financial assistance made possible by this Bill, there is every reason to believe that this modernisation—this streamlining, as it has been called—will gather momentum.

Reference has already been made by the noble Earl to the short-term scheme for the London Midland Region announced quite recently. That is to cost, I believe, something like £25 million before it is completed, although it is hoped to complete some £5 million worth during the present year. It is officially stated that sundries depôts will be reduced from 170 to a maximum of 48; that marshalling yards will be cut from 111 to 46, and that parcels traffic will be concentrated to six centres. Necessary as all this may be, there is a human side to it, and in announcing the plan Mr. Blee said—and I use his own words—"There will be appreciable reductions in staff". I understand that the plan was explained to the railway trade unions, and that assurances were given with regard to redundancy. This is all to the good so far as it goes, but all this vast expenditure of money on modernisation will, in my humble judgment, be wasted unless the management makes the greatest effort possible to ensure that there is full understanding and co-operation at all levels in the railway service.

During my working life in the railway service we had to threaten to strike in order to obtain recognition for my trade union, the mere simple right to negotiate on behalf of our members. "You might as well have a trade union in the Army as in the railway service," exclaimed one diehard general manager. But those days have long since passed. And with the railways owned by the nation, and the trade unions fully and completely recognised, every railway employee, whether in the trading or the traffic sections, should realise that he or she has a personal responsibility to win and retain the confidence of the public. I am only repeating what I have ventured to say previously in debate.

The State is coming to the aid of the railways in this, their hour of need. I need not enter into the details. My noble friend Lord Silkin has explained why the financial position is so acute. This is by no means wholly the fault of the railway management. There has been the question of the hundreds of millions of pounds of money that the Treasury culled back from the railways during the war, as a result of the agreements imposed on the railways during the time of national control. Be that as it may (and there is not much to be gained by raking over all those old grievances), I would plead now for a real sense of urgency. If railwaymen—and by "railwaymen" I mean the management, right from the top, down to the lowest ranks in the service—do not make this plan work, the railways will go the way of the old stage coach; and deservedly so. I have still a profound faith in my old colleagues of the railway service and I am convinced that, with their good will, this Bill can help to open a new era of prosperity for our railway service and ultimately give us a railway service of which we shall have every reason to be justly proud.

3.54 p.m.

LORD SHEPHERD

My Lords, I should like to join with my noble friend Lord Silkin, who made, I thought, a masterly speech this afternoon, in expressing sincere thanks to the noble Earl, Lord Gosford, for the manner in which he introduced this important Bill. If one wished to criticise the noble Earl's speech, I think it would be on the grounds that he and the Government are possibly being too optimistic, and that he skirted, if he did not avoid, the fundamental difficulties and problems which face British Railways.

It is often said by noble Lords opposite, and by the Party to which they belong, that it was the Labour Party who threw the basic industries of this country into what I may call the cauldron of political controversy. As I understand it, politics is the individual's conception of what is good housekeeping in national affairs. If that is so, when one believes that the standards of our people depend on the health and vitality of our basic industries, it is necessary that we give the closest scrutiny to those industries and that their whole management and financing should be subject to debate. To improve the standards of our people and, possibly more important to-day, to maintain them against the severe economic pressures which beset the country, I believe that it is vitally necessary that we should pay careful attention to the management of the basic industries, whether State or private.

We believe that in a few months' time we shall face a General Election, and without doubt the question of public ownership and public control of the basic industries will be the cardinal issue. We on this side of the House do not object to this debate; but we resent, and we shall certainly fight, any attempts to misrepresent the facts and distort the truth. Such attempts are often made by the opponents of the nationalised industries. I make this as a special plea: that when we debate this important subject at the next Election, we keep to the facts. I should particularly like to thank the noble Earl, Lord Gosford, for his very fair presentation of the facts relating to the railway industry this afternoon. I wish that his superior Minister, the Minister of Transport, would adopt the same tone and the same fairness to fact in his public utterances outside Parliament.

As we know, through no fault of their own the State industries, especially coal and railways, are going through a difficult time. I should like to read two extracts from a speech of the Minister, if only to illustrate his attitude to nationalisation and, I believe, to the railways in particular. He was speaking at Dorking on December 7 and these extracts are as quoted in another place on December 11. The Minister said: If only the Socialist Party had worried about modernising the railways, instead of spending years of bitter controversy in nationalising them, without a shadow of doubt to-day their competitive position would be completely changed. He went on further in his speech to say: Let me make it plain that I am in no sense attacking or criticising those who work in or control these industries. I believe that the men who work in these industries, and perhaps some of their leaders, … would also say what a failure nationalisation, as a method of running great industries, has been. When the Minister was making those remarks, to which industry was he referring? One can only conclude, in view of the first quotation, that he was referring to the railways. If a director of a company loses confidence in that company, he should resign. If the Minister has lost confidence in an industry for which he is ultimately responsible, I think he should take similar action to that which a director of a company would take.

Noble Lords opposite, I believe, reject the principle of public ownership; but I think they must accept the fact that State finance and State policy plays an important part in many industries in this country which still go under the style of "free enterprise". It is interesting to note that when private capital is available, and profits are satisfactory, the businessman rejects any thought of State participation or State interest. But let conditions change; let conditions exist as they do now in the cotton industry of Lancashire, then all the wrath that can be generated is brought down upon the head of the Government for failing to give protection and assistance.

This afternoon we are debating British Railways. It is an industry which is being continually sniped at by the ill-informed, and, let us face it, by a number of the public who suffer inconvenience through bad service, dirty trains, and often through lack of information. To that part of the public the past is of little interest: what they are concerned with is the present and the immediate future. But I believe that to get the picture in its right perspective we should dwell briefly on the past.

Paragraph 13 of the White Paper of 1936 sums up the position in these words: In the early 1930's the railways like other industries suffered from depression, and in the subsequent years up to the war they were not in a position, owing mainly to the challenge of road transport, to raise large sums of new capital. We heard this afternoon from my noble friend Lord Silkin about the record of dividends and interest paid to those who held shares and stock in the railways. When one considers the state of the railways immediately after the war, and their record of profit-earning before the war, could any noble Lord anticipate that private capital would have flowed back into the railways in any quantity to meet modernisation? I do not believe so. Therefore the situation which faced the Labour Government in 1948 was that they had no alternative but to take the railways into public ownership. Perhaps there was another alternative which noble Lords would have preferred: that the shareholding should remain in a relatively few hands and large State loans be made, as has been done in the steel industry. I do not know whether noble Lords would have preferred that, or whether they preferred public ownership, but I imagine that, so far as the shareholders of the railways were concerned, they were pleased to get what they did when the State took over the railways.

It was also equally apparent, I think, in 1948 that we had to have in this country a co-ordinated transport service consisting of rail and road. It has often been claimed that competition leads to efficiency and enterprise; and in some industries I would accept that. But I do not believe that, with a basic industry like transport, that can lead to efficiency. In my view, the result can be only severe financial losses. The problem of the railways is entirely one of finance and of being able to attract remunerative freight and fares. Efficient service will follow modernisation; but modernisation is governed entirely by the amount of finance which is available and which can be counted on by the Commission for a good number of years ahead. It is no good the Commission having to work on the assumption that maybe next year the money they will anticipate may be cut. There must be a planned investment in this industry.

I said earlier that the railways should be co-ordinated with road transport. The action of the Government in 1953, when they set road transport in cut-throat competition with the railways, placed the railway authorities in an impossible and intolerable position. The railways from 1948 to 1955 showed substantial working profits, in spite of out-of-date equipment and poor track. The final cumulative losses followed through the heavy fixed interest payable on capital. Much of this capital, we know, is tied up in items such as land, tracks and buildings, which may be essential for operation but which in themselves are not earners of income. But in the case of road hauliers their capital invested is nearly all income-earning. The road haulage cargoes are basically clean and easy to handle, and with relatively small overheads the industry can quote rates below those of the railways. It can pick and choose its cargoes. The railways are often left with the dirty, large types of freight which road transport is unable to accept, or prefers not to accept. To add to the difficulties of the Transport Corn-mission, as we have heard, the Commission are now facing a serious loss in revenue following low production of coal and steel.

What can the Commission do in those circumstances? They can effect further economies. This they have already done and will continue to do. But there is a limit on how far these economies can be made without affecting the service to the public and to customers. They can raise fares and freight. I should have thought that fares to-day were high enough, in all conscience. Fares represent a considerable proportion of the wages or salary of people, particularly those who work in London. If freight rates were to be increased I believe it would only drive more freight into the hands of the road hauliers. The Commission believe that the set-back in their earnings on coal and steel is temporary. I hope it is, but I have a feeling that the present levels of production will remain for the next two or three years, in which case the railways will fall increasingly into debt.

The Government and the Commission believe that modernisation will in itself save the railways; that modernisation will turn severe losses into profits. Most certainly modernisation will affect the economic position of the railways. We were interested to hear the figures given by the noble Earl this afternoon in regard to the increase in the number of passengers on the new diesel trains. But road transport also is modernising itself; road transport is not standing still. More vehicles, with improved methods of loading, come into service each day. Motorways and wider roads joining the large industrial centres are being built at State expense. I believe that the competition in transport will continue to grow and eventually will lead to financial loss, not only to the railways but also to those involved in road haulage. Modernisation, economy and efficiency may show railways a working surplus in the next few years, but I do not believe it will be possible for the railways to show a profit and at the same time pay the heavy fixed interest on the loans that have been made.

Like my noble friend Lord Silkin, I would end my speech on, shall I say, the more intimate side of travelling by rail. I should like to draw the attention of the House to the appalling conditions which exist upon London's railway lines. I am thinking in particular of the Underground. I believe that the conditions which exist at peak periods are an utter disgrace to a civilised State. If any farmer were to put cattle into a railway truck as we put human beings into the Underground carriages, he would soon be up in front of the magistrate, who would impose a heavy fine. But there is a more important point. If there were an accident in the Underground at a peak period, the casualties (and not only from the accident itself) would be absolutely appalling. The responsibility for those conditions must rest upon the Government, because it is beyond the, power of any of us (other than by avoiding to travel in peak periods) to improve those conditions.

I would ask the Minister what concrete lead the Government can give to stagger the working hours in London. Every year the working population in London increases. There are bigger and better offices in the West End; there are taller and finer offices in the City, with more and more people working in them, and working basically the same office hours; and all are struggling to get to work at nine o'clock in the morning. I do not believe that business will change its hours of working unless there is a definite lead or, if necessary, legislation by Parliament. This is a serious matter, arid I hope the Minister can give us some idea of what action the Government contemplate taking in order to stagger working hours in London.

Before I sit down, I would associate myself with other speakers this afternoon in complimenting Sir Brian Robertson, the Commission and all the railwaymen, and in particular the engine drivers who have had to drive through the appalling fog which the whole country has experienced in the last few weeks. I think we should express our gratitude to all those concerned in the railways who, in spite of great difficulty and disappointment, continue to give the best service possible.

House adjourned during pleasure, and resumed by The LORD CHANCELLOR.

4.17 p.m.

LORD RATHCAVAN

My Lords, when I came to the House I had no intention of taking part in this debate. But I have sat through the whole debate, and heard a number of most interesting speeches, so that I am tempted to say a few words. The noble Lord, Lord Silkin, remarked upon the fact that, apart from the Government spokesman, there were no speakers from this side of the House on this important Bill. Certainly in my case—and I am sure the same is true of many other noble Lords on this side of the House—that is not because I do not take a great interest in this Bill. As the noble Lord, Lord Silkin, has said, I think we all look upon this as an immensely important Bill. It deals with large figures. It will allow the Transport Commission to borrow a further £600 million, and to increase their deficit by £150 million. I suppose I use the British Railways as much as any other Member of this House. I spend certainly at least fifty nights every year travelling in trains.

These problems which we are considering are important. I noticed a letter in The Times shortly after this programme was announced by the Government, the gist of which was that it was no good pretending that the railways would ever pay—they could never pay. The noble Lord, Lord Silkin, asked whether there were any railways in the world which did pay. I have never heard of any, whether they are nationalised or run by private enterprise. So far as I can make out, every railway in the world is now running into difficulties. It appears that the policy of noble Lords opposite, as set forward to-day by the noble Lord, Lord Silkin, is: Do not pretend that railways ever can pay; they cannot. Treat it as a great public service which has got to be subsidised. That attitude is at any rate realistic; and I presume that that is, and will be in the future, the policy of the Labour Party.

We have been told that the principal reason why the railways ran into such difficulties last year was because the coal traffic offering was so much less than had been expected. But is there any reason why the coal traffic next year should be any better? The price of coal is high; the consumption of coal is falling, as coal is being replaced by oil. In view of all that, is there any reason to suppose that there will be any further coal traffic offering in 1959 than there was in 1958 to swell the freight revenue of the railways? I do not see why there should be.

My Lords, I remember very well that, when the last railway wage increase took place some time last year, when there was a threatened strike, we were told that the increase which was eventually granted was to be granted only on the understanding that the cost would be met out of economies. Now, a few months later, here are the Government offering to allow the railways to increase their deficit by £150 million—largely, of course, to pay those increased wages. I think I have seen that there have been recently even more demands for further increases. Like the noble Lord, Lord Silkin, I cannot see that the railways in this country are ever likely to pay; and one supports the Transport Commission, Sir Brian Robertson and his colleagues, in the very difficult situations which they have to meet in trying to economise.

We have heard much for many years about the modernisation plans. A great deal has been done. The noble Earl who spoke for the Government gave some interesting figures about the resulting increases in passenger receipts, but I have a feeling that the modernisation plan, excellent though I am sure it will be, will not bring the railways out of their financial difficulties, which they have had to face, year after year, for such a long time. The noble Earl who spoke for the Government talked about the date when the "break-even" would come; I think it was supposed at one time to be 1961–62, though now it is postponed to some later date. I most fervently hope that the break-even will come; but, being realistic, I am afraid that I rather doubt it. At any rate, I personally shall be very pleasantly surprised indeed if, after this modernisation plan is complete, we find that the railways have again been put upon their feet and that their expenditure is balanced by their revenue. My last word is this: I am sure that noble Lords in all parts of this House most sincerely extend to Sir Brian Robertson and his colleagues their best wishes in this modernisation plan, with the hope that at any rate some improvement will result from it.

4.25 p.m.

VISCOUNT STONEHAVEN

My Lords, I also had no intention of inflicting a speech on your Lordships, but I feel that I should like one speech to go out from your Lordships' House from which the Transport Commission and the railway workers can derive a little encouragement. Any noble Lord who follows me may take the same line, but so far all we have had is a series of very interesting speeches from quite a number of noble but dismal "Willies." I feel that to-day there are signs, in the way the railways are tackling their job, of a different outlook; and I should like to gamble—I admit it is a slight gamble—hard on the success of the Transport Commission.

As I understood the noble Lord, Lord Silkin (if I say something wrong I hope he will tell me; I do not want to misquote him), he talked about the Commission and their efforts, and said that they were doing all they could; that he was quite satisfied, and it was all very fine. That was the impression I got. But that is only half the story, because Sir Brian Robertson and the Commission, having gone thoroughly into this problem—and who should know more about it than they?—say that they will still break even, in spite of this reverse, in 1961–62. I feel that the noble Lord is trying a little to have it both ways. We must remember that the Transport Commission have two jobs to do: one is to run, as efficiently as possible, an inadequately equipped railway system, which is no mean job at all; and, without taking on an enormous quantity of additional staff, they have also to design and put into practice a fantastic modernisation scheme—I mean fantastic in its complications and in its scope. I have no doubt whatever that by the time that scheme is completed we shall have the best railway system in the world, bar none. That is one point I wanted to make clear.

Then, my Lords, the railways, in spite of having all this on their plate, are flexible in their outlook. If one puts up a suggestion to them it is considered; and certainly in two or three cases of which I know, after due consideration and investigation, the suggestions made have been adopted. It takes a long time, but they have something else to do besides considering everybody's suggestions. I think one must be patient and hand it to them: when they see, after they have investigated it, that a suggestion may work, they do put it into practice. What encourages me most of all is the interest and enterprise that is being shown by junior members of the railway staff. If your Lordships will forgive me, I should like to illustrate that point—it will not take more than a minute—by an example which occurred at my own local station.

I live fifteen or sixteen miles south of Aberdeen. From Aberdeen there is a branch line which runs to Ballater, on which there has recently been introduced a diesel railcar service, which has proved very popular indeed. But there is no reasonable service from my own station, Stonehaven, to Aberdeen, either early in the morning or a late service back. That means that the housing estate tenants who live around the station have to walk a mile down into the town and get a bus to travel to Aberdeen, where most of them work, in the morning. The fare is more expensive than the railway fare, and there is the problem of weather and the rest of it in the long walk down. It was suggested by the two clerks in the booking, office there that after this diesel car had finished its last run to Aberdeen it might be run as a late service from Aberdeen to Stonehaven, stabled there and run back early in the morning, thereby tapping a source of season tickets of the order of £3,000, more or less guaranteed.

That is an example of enterprise from the clerks who take pride in their job, and pride in the firm that employs them. I think this sort of thing should be thoroughly encouraged. There may be reasons why it is not possible to do as they suggest, but at least the idea is being considered. That is the type of thing that leads me to back up this project. To the best of my belief, there is certainly one railway, and there may be two, paying to-day. I think that the railways in Holland are paying, and I am not at all sure that those in Belgium are not. At any rate, if they are not paying this year they were paying up to that time. They, too, are nationalised railways.

Then there is the problem of the late running of trains. That is a problem that I think must be looked into a little more closely than perhaps it has been. For example, north of London there is a bottleneck. The contractors are driving three tunnels for the railways there. I think that they are well behind schedule. I should like to know from the noble Earl whether he has any information upon that matter. I am led to think that they are behind schedule because some time ago the railways told me that they would solve a number of their problems by this means, and that they expected this work to be done last year. But it is not done yet. That, of course, is a frequent cause of late running—express trains get held up by a "local" or some other train having to use a bottleneck on the way in. That is one of the big problems facing the railways to-day.

Then there is the problem of poor steaming, due to a combination of factors: sometimes the coal is not what it might be; locomotives are old; and, in order to try to economise, the period of boiler-washing is sometimes unduly extended. All these things go against good timekeeping. Nevertheless, the railways are looking at this problem. For example, as I mentioned the other day in the debate on coal, they are experimenting with an adaptor which can be fitted to a locomotive which enables it to burn poor coal and makes it easier, because it is more efficient, to get a head of steam. The railways have had the initiative to try that experiment. I hope that they will also go into the question of whether or not it is worth while, even with the limited life of steam locomotives, to fit mechanical stokers on their locomotives.

There are one or two things that I think the railways might do to improve their service. I was most impressed when travelling abroad last year. I had to go through the St. Gothard Tunnel, through which there is a car-carrying service. You drive on to the train from an ordinary platform, the side of the wagon having been let down. You then go up through the train. You sit in your car, having put on the brakes, and the side of the wagon is put back. You go through the tunnel, and at the other end you drive off the wagon again. It takes five minutes to load the train, five minutes to unload it, and a quarter of an hour to go through the tunnel. It is done just like that. Why could not that be done through the Severn Tunnel? Normally, the railways say that you must get out of your car, a man must come and winch the car down on to the truck, and you must let him have it for half an hour in order to load it. That is where the service is killed. Why can it be done in the way I have described in Switzerland, but not here? I believe that a little more thought on those lines might help the railways.

I saw another interesting thing in Italy, where there is always the problem of road versus rail. The Italians have a simple and cheaply made low-loading road bogie. They run the railway wagon off the rail on to the road bogie, and then at the end of the run they drive the railway wagon off the bogie back on to the rail. That is a possible alternative to some of our problems, and one that I think should be looked into.

I thought that the noble Lord, Lord Silkin, made one or two criticisms—I do not want to be unfair; perhaps he will stop me if I am. But I felt that he was rather critical of the feeding services on the railways. He spoke of disgruntled people not being able to get food when they wanted it. I gained that impression—but, as I say, if I am being unfair I hope he will tell me. Among the more endearing characteristics of the ordinary Britisher, however, is that he is a good mimic. If you go to him smiling and ask for this, that or the other, he will smile back and do his utmost to give it to you. If you go grumbling at him, he will grumble back—and he is probably better at it than you are.

Then I should like to ask, because it would be useful to know, where can one get a Dunlopillo mattress, two pillows, with clean sheets, for 25s. a night, second class, except on the railways? Except when the Government are paying I never travel first-class. The noble Lord has a fifty-fifty chance of not having to climb up on the step-ladder. He can toss a coin with the other occupant of the compartment, so having a sporting chance of getting the lower bunk. I think the noble Lord's observation is a little hard in regard to what I personally consider the best value for money that you can get anywhere. Be that as it may, that is another attitude. We have spoken of brighter stations. Of course that is something we all desire. But surely it would be better to wait until the steam locomotive is finally disposed of—a matter of five, six, seven or eight years hence. I feel that one ought to "lay off that one" a little at the moment.

Then there is the question of staggered hours. I should have thought that, so far as the Government were concerned, they might approach the Civil Service unions on that point. When all is said and done, the Government are among the bigger employers of labour. I am dead against legislation on this matter, but I am all in favour of an arrangement by the unions so that all Government offices can start and stop at different times from other not so large organisations. I feel that sonic experiments might be tried in that connection. I do not know whether noble Lords' ideas and feelings are shared by those who habitually travel on rush-hour transport, and whether they would rather start earlier and stop earlier or start later and stop later in order to avoid that type of travel. I leave that to their own decision. I do not expect the Government to "poke its flat feet" in there, except on an experimental basis, and on the basis of organised union representation. I am quite sure that no railwayman or anyone on the railways wants to be considered a charitable institution. You have the men; you have the will. These people will stand on their own feet and they will make a go of it without excess help, other than what is needed to tide them over such as they are now getting from the Government.

4.40 p.m.

THE EARL OF GOSFORD

My Lords, with your Lordships' permission I will address your Lordships for the second time this afternoon. As I am speaking a second time I will not inflict a long speech upon your Lordships but will try to answer the various questions which have been put to me. I am grateful to my noble friend Lord Stonehaven for having at least raised the tone from pessimism to optimism towards the end of the debate. I myself was getting extremely gloomy and I have no doubt most, of your Lordships were as well. I am sure that the Chairman of the British Transport Commission will be grateful too, that he at least has a friend, because he is fully convinced that the modernisation which he is carrying out and which is now being reappraised will in fact produce in this country a railways system which can be made to work and to run and to give a service which, I hope the noble Lord, Lord Silkin will agree, is a good one, and at the same time will pay its way and help the economy of this country on its ever-increasing ascent.

I am most grateful for the kind remarks made by noble Lords opposite about my speech. As the noble Lord, Lord Shepherd, said, I made rather a factual speech, as I thought that that was what your Lordships would want to-day in explanation of this Bill for which I am asking your Lordships to agree a Second Reading. We have heard from noble Lords opposite views which we all know full well, views which they hold in complete honesty. Your Lordships will also know full well the views which Her Majesty's Government hold, so that they really do not need to be repeated to-day except in this regard; that the noble Lord, Lord Silkin, mentioned, as did the noble Lord, Lord Burden, the subject of "hiving off" of road transport. We really must get this subject into perspective. I am not now talking of the principle of whether or not there should be "hiving off" of road transport, but it seems to me that too much importance is being placed on this particular act. Perhaps I could put this matter better in perspective by saying that the profit on the Commission's road haulage services over the years when those belonged to them averaged around £3 million which, when taken with the total turnover of the Transport Commission is, although not a small amount of money, in comparison indeed a tiny sum.

THE EARL OF LUCAN

My Lords, I think the noble Earl must be forgetting that those years to which he is referring were the years during which the process of the taking-over of the road haulage industry was going on. In fact, the road haulage section of the Transport Commission was not fully functioning until about the last year before the Act of 1953.

THE EARL OF GOSFORD

My Lords, it is true that the profit in 1953 was a bit higher. I was giving the average over the whole period. But it is still a comparatively small amount.

LORD LATHAM

My Lords, it was much higher—£9 million.

THE EARL OF GOSFORD

It was £8.9 million.

LORD LATHAM

That is three times the average of £3 million.

LORD BURDEN

My Lords, of course £8 million represents the culmination of a lot of work which had gone in, and there was every reason to believe that if road transport had not been "hived off" that £8 million would have further increased. That is the point of our objection.

THE EARL OF GOSFORD

My Lords, I think that that is a hypothetical question.

VISCOUNT ALEXANDER OF HILLSBOROUGH

Factual.

THE EARL OF GOSFORD

The noble Viscount ought to know better than that. Facts are facts. Something which might have happened in a year is not a fact.

VISCOUNT ALEXANDER OF HILLSBOROUGH

But it did happen.

THE EARL OF GOSFORD

My Lords, there is no doubt that the railways are an industry which this country must continue to have and we must do all we can—and Her Majesty's Government are doing all they can—to see that the service will bring itself to a position where it can pay its way and serve the country. I quite agree with the noble Lord, Lord Silkin, that it is certainly a service to the country, but the impression I got was that he thought that the British Transport Commission were apt to close a branch line or a service solely because that particular thing was not at the moment paying its way. The Commission close a branch line only when they feel that the service which that line gives is making a loss which they see no reasonable prospect of bringing to an end. Whenever the Commission intend to close a branch line, they refer to the Transport Users' Consultative Committee for the area concerned; and before any final decision is taken the Commission see what arrangements are made for the travelling public in that area to be carried on their lawful occasions.

LORD SILKIN

My Lords, I should like to make clear that I was not accusing the British Transport Commission of having done this—at any rate recklessly. I was putting an argument which a great many of the noble Earl's supporters have put forward in another place; that wherever a branch line is not self supporting it should be closed down.

THE EARL OF GOSFORD

My Lords, I think that that is going a bit far. The Commission do not automatically close down a branch line because it is not self supporting. If the line is marginal and is giving service which cannot be given by any other means naturally it does not necessarily close the line down. The noble Lord, Lord Silkin, mentioned the subject of the so-called cuts or withdrawal of investment by Her Majesty's Government. I feel that here again I had better put this into perspective. The amount of the bids from the Commission to Her Majesty's Government were £151 million in 1958 and £148 million in 1959. The amount of the cuts applied as a general economic measure—which as we all know were brought about by Her Majesty's Government and affecting all—were £6 million only for 1958 and £3 million only for 1959.

It was the case at that time that the railway Regions were working up new proposals calling for larger amounts, but these requests had not reached the Commission when they made their request for £151 million in 1958. That is an entirely domestic affair, of course, inside the Commission, and not on the Government's account; in fact, as your Lordships will know, the cuts were not only restored but more money was given. As early as May, 1958, a further £25 million was allocated over the years 1958 and 1959 and £8 million more was allocated last autumn. This brings the Commission's total for the railways for 1959 to the very high figure I have already mentioned of £178 million.

As to my right honourable friend the Minister "nagging" the Commission, I may say that I have attended meetings between my right honourable friend and the Chairman of the Commission and certainly that has never been the impression I have received. The interchanges between them have always been very much "give-and-take" and on a very friendly basis, after having tried to find out from each other just how they can best help each other to produce the results for which they are both working. If my right honourable friend gave this impression outside I am sure that he would be the first to be sorry that this is the impression he gave, because his deeds belie his words if the words have given that impression.

The noble Lord, Lord Silkin, made a few criticisms about the actual functioning of the railways, and stated that a journey on a train should be pleasurable. Frankly, I am a train-lover and I suppose that I am biased; but certainly I thoroughly enjoy a train journey. It is comfortable. My experience has been that the journeys are usually warm and comfortable, and the services given by the personnel are, to my mind, as good as one would get anywhere. However, that is a matter of opinion; it is also a matter of the experiences one has had. Mine have been good.

The noble Lord asked me about a secretarial service. I understand from the Commission that a secretarial service was tried out in the London to Manchester express, but was withdrawn a year ago, owing to the lack of patronage. This was one of the principal services used by businessmen, and if it could not succeed on this route it would be unlikely to succeed on any other. Maybe it was not tried long enough—I do not know; but it was withdrawn because it was not sufficiently patronised. As to telephoning, tests have been carried out for telephone communication from moving trains. This service is very expensive to provide, and the railways feel that at this moment they should spend their money on other things; but they have it in the back of their minds.

As to refreshments, again I suppose that this is a matter of experience. I have always been lucky, or nearly always. Naturally, there are good meals and not so good meals. I believe that the noble Lord said he could not eat the whole of a table d'hôte meal in a restaurant car. I must say that I think travellers get value for money there. That matter is something about which I could write to the noble Lord, because I am not well informed about the reasons why à la carte meals are not always provided. Of course, à la carte meals are provided where there are buffet cars on the trains.

EARL WINTERTON

My Lords, may I interrupt my noble friend? I think he is not quite accurate in saying that à la carte meals are provided only on buffet trains. On the Southern portion of British Railways, the Portsmouth line, excellent buffet meals are provided on certain trains, although there are restaurant cars.

THE EARL OF GOSFORD

My Lords, I am sorry. If I gave the impression they were not provided I certainly did not mean to do so. But they are rarely given alongside a full service; an à la carte menu is not provided alongside a table d'hôte menu. I think that that would really be an impossibility.

On the matter of dreary stations, all your Lordships know that they are Victorian structures which will eventually have to be rebuilt according to modern standards; but mere redecoration would be very costly and would not of itself produce any revenue, which is, after all, the object of spending money at the moment. I notice that my local station is in process of being repainted, but that is not a Victorian monstrosity.

The noble Lord, Lord Silkin, also mentioned punctuality—in fact, several noble Lords did. My noble friend Lord Stonehaven gave some examples and asked me certain questions. Unfortunately I shall have to give him answers later, as I have not had notice of the questions. But the great majority of serious delays to trains are, as your Lordships certainly know, due to engineering works connected with the modernisation which we have been discussing this afternoon.

On the London—Midland main line, I understand from the Commission that over eighty bridges are having to be raised for electrification. In many places ballast is being strengthened and track improved to take higher speeds and heavier trains than were provided for when the tracks were first laid. Unpunctuality for the next few months on certain routes must be part and parcel of the price to pay for modernising the railways. After all, if one could halt the railways and do the whole job and close lines altogether, there is nothing that the Transport Commission would find easier. It would make it so much simpler. But the service still has to be provided for the public, who will, unfortunately, have to accept certain delays, particularly on Sundays, when most of the work takes place, in the meantime. But British Railways have this very much in mind and are doing their best to keep trains running to time.

The main theme or point of the noble Lord, Lord Shepherd, was that the railways could not possibly pay the interest on the money invested and at the same time pay their way. I am certainly not going to argue with the noble Lord, but the Chairman of the Transport Commission thinks he can, and he is making the reappraisal which is going on now to see what is possible. I cannot say more than that.

I believe that the noble Lord also mentioned the Underground. He said that it was an utter disgrace, and asked what the Government were doing to stagger hours. The London Travel Committee, set up last November, are studying this problem urgently. A certain amount of staggering, as I think your Lordships will know, has already taken place, and the Government have this point very much in mind as an answer to that problem. It is a serious problem. On the other hand, more and more people seem to be taking to the Underground, and that is something that we do not want to stop.

I have already told the noble Viscount, Lord Stonehaven, that I will give him answers to his questions. I am grateful for the support which he gave me, and I entirely ally myself with everything he said about British Railways. I should like to end on this note, my Lords. First of all, I should like to thank your Lordships for the way in which you have stated that you accept this Bill. I trust that it will result, together with the work which the Commission are doing in modernisation, not only in preventing British Railways from going the way of the old stage-coach which the noble Lord, Lord Burden, mentioned—far from it—but also in their becoming once again the finest railway system of the world, with pride in themselves, and a fully paying organisation which will be an asset to the country.

On Question, Bill read 2^a, and committed to a Committee of the Whole House.