PROBLEMS OF TRANSPORTATION

HL Deb 07 December 1960 vol 227 cc62-178

2.40 p.m.

LORD MORRISON OF LAMBETH rose to call attention to present and future problems of transportation within the United Kingdom; and to move for Papers. The noble Lord said: My Lords, I beg to move the Motion which stands in my name on the Order Paper. Your Lordships will agree that this is a subject of great importance to the nation, for transport is a vital element in our industrial and social well-being. I hope, with confidence, that we shall have an interesting and useful debate. I enter it as one who, I am afraid a long time ago, was Minister of Transport, in 1929/31, and thoroughly enjoyed that Ministerial office. I was well served by an excellent staff headed by Sir Cyril Hurcomb, who is now Lord Hurcomb and a Member of this House, and it was, I thought, as a whole a very good Department.

My first assertion would be that it is necessary that all of us, including Her Majesty's Government, should try to have an unbiased outlook as between the virtues of road and of rail transport. Bias is not good, either on the part of Parliamentarians or on the part of Ministers concerned with the problem. In transport within the United Kingdom I suppose we may include coastwise shipping, which makes an important contribution to the transport facilities of the country and which also conies under the Ministry of Transport.

It is the case that there is a difference of psychology in the people who manage railways and the people who manage road transport undertakings. One may exaggerate it, but I think there is a different psychological spirit and approach. Here I would plead in aid a man who is not often pleaded even on these Benches—namely, Karl Marx, who elaborated a doctrine called the Materialist Conception of History, which asserted that men's political, economic and even spiritual and religious outlook, was much affected by the way in which they got their livings. A railway runs on rails, and I think that one of the dangers of the railway industry is that the minds of the people who run it are liable to run on rails.

The road transport people do not go on rails—some of them go a little "all over the shop." At any rate, they must have an individual sense of survival which contributes to a highly individualist outlook—even an anarchist outlook—because of the nature of the vehicle which they are driving and handling. It has dangers, not only as a result of their own driving hut, as all of them would agree, from the way that everybody else drives. Consequently, in road transport we get a somewhat highly individualistic and adventurous outlook. For example, the old London horse-bus driver with, quite possibly, a stockbroker on either side of him on top of his bus, probably normally voted Conservative; but the modern motor-bus driver, who is more adventurous and has to take care of himself, having a dangerous job, I am glad to say tends normally to vote Labour. I am sorry to say that some of them even vote Communist. But there are these explanations of how the way men get a living affects their outlook and their minds.

This was why I was keen on the Road Transport Act, 1947, because I wanted to mix up between rail and road. I think it is a bad thing that men in our transport industry should be railwaymen all their lives or road men all their lives. I should like to switch them about so as to give them an experience of the other form of transport, and perhaps thereby develop in them a greater sympathy with the problems which face the other form of transport. That was an incidental reason for the policy behind the Transport Act, 1947, with its integration and co-ordination, so that there could be a fluidity of employment of men, and particularly the higher-up management, as between one form of transport and another.

What is the purpose of transport? It is to move human beings and goods from one point to another. That is what it is all about. Having said that, I would assert that it is desirable that we should try to look at the transport problem as a whole—to take a general view of British transportation and try to evolve a system or organisation which gives us the best results from transport as a whole, with a view also to getting the best results out of the elements that go to make up the transport system. But it is this movement of human beings and goods from one point to another that matters. It is for that reason that I think it was wise, and would now be wise, if I could persuade Her Majesty's Government to alter their line about it, and is wise that we should not try to segregate road and rail too much but should try to use both of those elements of transport to the greatest co-ordinated and integrated advantage in the general public interest.

Road has its part to play; the railways have their part to play. If we come to the conclusion that the railways have not got a part to play, we had better abolish them. But if they have a part to play, then let each element of transport play its part—coastwise shipping and air transport as well. Therefore I should like to see a system whereby some goods go by road alone and some by rail alone, but a system also that should provide that goods may be picked up by a road commercial vehicle in a container that can be lifted out of that vehicle and dropped on a railway truck at a suitable railway point, then proceed by rail and, at the other end, be lifted up by crane and dropped on a road service vehicle large enough to hold it. Thereby we should get a quick and most economic system of transportation, with each element of road and rail playing its part. A system of that sort could be used with advantage, in the interests of speed and economy, in the utilisation of our transport system. It was gradually being worked out, I think, by the British Transport Commission, but the Act which hived off a large proportion of the road commercial traffic from the British. Transport Commission impeded that development. But surely such a system as I have outlined was the right and sensible one.

I should like to see more parking places at railway stations, particularly suburban stations. Some of this is being done. I should like to see more of it, so that people travelling up from the country or the outer ring of Greater London, or from parts of south east Lancashire or greater Birmingham, can park their cars at a railway station, get in the train and come through. It would be a good thing for them, a good thing from the point of view of reducing highway congestion, and a good thing for the railways. In short, on this aspect of the matter I want to see—and I think we all ought to want to see—each element of transport playing the most effective part of which it is capable, and not to go on as we are, quite deliberately, as it seems to me, as the result of Government policy, inciting a considerable degree of cut-throat competition which is costly to the transport undertakers but costly also to the nation and to the efficiency of our transport system.

I want each industry to be able to speak up. The road transport interests do speak up through those in Parliament whom they brief, and they have a right to do so. They have spoken up in Elections. I remember the posters and banners flown by the Road Haulage Association supporting the Conservative Party, and their engaging in advertising in Party politics. They certainly have the right to speak up, and perhaps in their interference with electoral politics they have done so more than they should. But the people who cannot speak up are the public Corporations. That may be the fault of the Labour Government.

I am not sure, but I seem to recall that when certain Chairmen of Commissions became, or were, noble Lords, a question was asked as to whether they should debate matters which concerned their particular undertakings. There was a kind of "gentleman's agreement" that they should not do so; and that may have been right. But there has been a tendency on the part of the Government to assert, and on the part of the Corporations to accept, that if the Government do, or propose to do, something which in the view of the Chairman and members of a Corporation is wrong, then that Chairman and those members of the Board of that Corporation must not argue in public against the policy of the Government. That seems to me, on thought, to be monstrous. It means that they are disfranchised from publicly arguing the case of the undertaking of which they are in charge. I believe that that is wrong, and that they should be free to argue. They will be wise not to engage in bitter controversy with the Minister of the day, for the Minister can always "fire" them; and I should not urge that. But if a matter of controversy arises—as it did, for example, on the hiving-off of commercial road transport from the British Transport Commission some few years ago—then I believe that the Board should be free to argue that, with great respect to Her Majesty's Ministers, the proposal is a mistake and to say why it is.

Why should private undertakings be able to have a first-class argument with the Government—and even a first-class row—while these poor members of Boards of public Corporations and their Chairmen may not say a public word, except perhaps a gentle word in their annual report, months afterwards, and are unable at the moment to express their point of view and to argue the case? It is not in the public interest that this should be so. I would urge Her Majesty's Government to make it a new rule that the Corporations are permitted to defend themselves, and that the Government are permitted to overrule them by legislative and Parliamentary action. But it is wrong that they should not be able to speak up. Let each industry, whether publicly or privately owned, be free to argue its case.

In the 1920s and the early 1930s this problem of the overlapping of road and rail, of "cut-throat" competition, was actively canvassed by the privately owned railway companies and some of the commercial road transport undertakings themselves. Your Lordships may remember that there was a campaign conducted by both—although I admit it was probably more by the railways than by the road interests—for what was called a "Square Deal" in favour of co-operative action between the railways and the roads. That was the view not of a nationalised industry but of the privately owned railways; and they were right, because the danger signals had been shown. Then the railway companies sought commercial road transport and passenger powers and got them, I believe in both cases, but certainly as regards passenger transport.

If I may ask a controversial question —and possibly get a controversial reply—were the Labour Goverment wrong in promoting the Road Transport Act, 1947? It is a fair question and it demands a fair and unbiased reply. I say that Government were not wrong in promoting that legislation even though, let me add, because I am an open-minded sort of man—

A NOBLE LORD

Oh!

LORD MORRISON OF LAMBETH

I am extraordinarily open-minded. I have got into a lot of trouble in my political Party now and again for being open-minded, and your Lordships ought not to scorn this claim on my part, which is legitimate, right, fair and truthful. But when the Labour Government passed the Transport Act of 1947 I did not assume —and I hope that none of my colleagues assumed—that it was thereby untouchable; that the administrative structure of the British Transport Commission, the Railway Executive, the Hotels and Catering Executive, the Inland Waterways Executive and the other Executives, if there were any, should remain intact for all time. Anybody who goes in for socialisation of industry must be ready to modify the administrative structure, to overhaul the undertaking and criticise the public Corporations, and must not be afraid to do so, as some Ministers have been in the past, and probably are in the present. We must not assume that because we have done something it is necessarily perfect and must not be touched. Therefore modifications which are sensible and defensible are legitimate things to think about. But integration and co-ordination of the transport system, provided that there was a proper degree of elasticity, was a legitimate, proper and unassailable fundamental policy of the transport organisation.

Mind you, my Lords, we passed this Act in 1947. We had a programme to carry through, and we carried it through and showed that Parliament could do things. Nobody before had dreamed that Parliament could do so in the time at our disposal. It was done partly by using this House in the legislative process, treating this House of Parliament better perhaps than it has ever been treated, before or since, by any other Government—not because we were biased in favour of the House of Lords, but because we believed that it had a contribution to make to the Parliamentary process of legislation.

It would have been better, I admit—although one would have wanted to be sure that we were going to get a continuing Labour majority—if we had delayed the Transport Act of 1947 for another five, or even ten, years, because by that time the private railway companies would have been bankrupt. Some of your Lordships served as directors on the private railway companies and well know that they would have been bankrupt. That would have been the time for the Labour Government to step in and nationalise. We should have got them much cheaper. But we are kindhearted men. We took them at a point when they were worth something, and we paid for them what they were worth—

A NOBLE LORD

Far too much !

LORD MORRISON OF LAMBETH

That may have been one of our mistakes. However, we did our best. At that time we could not face this problem of modernisation with which Her Majesty's Government are now, if I may say so with respect, rather playing about. We could not have done that at the time. I remember that Mr. Barnes, who was then the Minister of Transport, was always wanting steel for this or that purpose. He ought to have had it, but we had had a war and there were shortages. The export trade, which it was vital for us to encourage, needed steel for goods for the export market, and mostly we had to tell Mr. Barnes that he could not have steel. In those days of shortage, therefore, owing to all those circumstances, modernisation was not possible.

But since then the Conservative Governments have been wobbling about on transport policy. They are the dogmatists; they are the theoreticians. They are actuated by dogma, and they have one dogma of belief in cut-throat competition except when it concerns capitalist amalgamations and capitalist restrictive practices. Then, Conservative Governments are not so keen on it. So they promoted, deliberately and with malice aforethought, destructive competition in the transport industry. They hived-off a large proportion of the road commercial assets of the British Transport Commission and would have hived-off more if they could have sold them with speed. Instead they promoted costly competition, and it was insisted upon.

One of the results of this is that, while the British Transport Commission respect the provision in the Road Traffic Act, 1930—one of my own children—which lays down that road transport drivers may not be employed for more than a certain number of hours, during which there must be a break, that provision is being persistently broken by the private commercial transport interests. It is, as I say, being respected by the British Transport Commission, and the Government are not doing enough to pull up these private road transport anarchist operators and make them obey the law. That, of course, adds to the relative costs of the British Transport Commission and cheapens the cost of the private commercial road undertakings. I am sorry that some transport workers are conniving in this breach of the law because they make money out of it; but that is the application of Government morality which says "Let every man look after himself" and so they do. But the transport workers being protected by that Act of Parliament ought not to be a party to its breach. It is not only bad in itself but it is bad for public safety as well.

And so these things have happened and I do not know whether we are going to have any more hives-off. I am not arguing about various alterations in the administrative structure (about which we reserve the right to argue) but about hiving-off in the sense of handing over profitable parts of the British Transport Commission's undertakings to private exploitation, which I think is a sin, a conspiracy against the community. I hope that we are not going to have any more of that.

We can, I suggest, and ought at this time, when post-war shortages have diminished, if not completely passed away, to face modernisation of the railways; and I appeal for the support of noble Lords opposite, in the interests of the country, to back us up in an energetic prosecution of the programme for railway modernisation. Do not let the Conservatives ruin it, because that would be a pity. Modernisation is a good thing: on the whole it has demonstrated that it saves money. There are two possibilities open: either the railways can go, if we believe that there is no practical use and no future for them—which very few people think—or, if we do not let them go, we can bring them up to date. But do not let us play the fool, wobbling between the two points of view. Do not let us hang about; let us get on with the job and modernise by electrification and diesel and help to diminish the amount of dirty work for railway workers. That is important, because we shall recruit more people for the railways if the work is more attractive.

There should be more freedom on the part of the Commission. At any rate, there must be some public protection and right of ventilation of grievances. But there should be a greater degree of freedom to close branch lines and to substitute buses for the closed lines, or to transform the branch-line transport to rail-cars or diesel engines. But let us make up our minds what we are going to do and do it. There is now a scheme for the electrification of the Midland section of British Railways. It has started. Some of the contracts are being implemented. However, I understand (though I am open to be corrected if I am wrong) that the Government have now said to the Transport Commission, "You may finish the contracts that are physically on the way, but do not enter into the other contracts which will be essential for finishing the job." My Lords, can any business man with a business head on his shoulders defend this playing the fool?—because, really, that is what it is. If I am right—and I think I am—what is the good of stopping it in the middle? Why not go on with it?

Moreover, the contractors themselves, these poor private-enterprise contractors, want to do the best they can for themselves, and I hope for the country, and they want to know where they are. We cannot say to these contractors on one day, "Start electrification", without their making preparations lasting over a period, and say the next day, "It is off, boys!" That way, you mess up the whole thing. But that is the tendency of the Government, and the Commission cannot get schemes out of the Government.

There is another trouble. For any system of railway physical reorganisation and electrification there ought to be something like a five-years programme, and the people responsible ought to know where they are for the next five years and what is going to be done. The Government can say what can be done and what cannot be done, but let it be for five years. The Government are now holding up the Commission on annual decisions about modernisation in a way that would not be done by any great capitalist private enterprise undertaking. They would make their programme and go through with it. Indeed, it is not done with the highway programme. Highway authorities have programmes extending over years. It is not even done with the educational system, where there is, I think, a general understanding that the local education authority shall submit to the Minister a three-years programme. If that is right in education, how much more is it right, in the case of the great transport undertaking, that it must plan ahead if it is going successfully to do its job? It is commercial madness to start and then stop, and then, maybe, start again, so that nobody knows where he is in the circumstances of the case.

My Lords, I turn to finance. Let me say straight away that I do not like general subsidies to publicly-owned services and industries. I like them to pay their way; I much prefer them to pay their way. That is why I am partly unhappy about the present situation of British Railways, in particular; because although in some respects their receipts have improved, they are not paying their way, and every year we read in the newspapers that so many millions are required by the British Transport Commission. It is not good for the Commission; it is not good for the management; nor is it good for the morale of the workers in the railway industry. For that reason I do not advocate the Government's saying to the undertaking, "It is all right. If you are in trouble we are standing by you, and what money you lose we will make up". I think it would be wrong to do that if it could possibly be avoided, because it might make management careless. They might say to themselves, "We have the State behind us". It might make the railway workers a little extravagant in their claims if they knew the State was behind them, and they might say, "You can give us what we want". I do not like general subsidies, and I much prefer publicly-owned industries to pay their way, at any rate taking one year with another.

But we have to face the fact that British Railways are in a difficult financial position, and the question is: how can we come to the rescue without giving the principle away in favour of unlimited subsidies and spreading the doctrine, "It is all right. The State is behind you"? I think there are some specific matters upon which the Government could help, although that help should be limited to those specific matters, avoiding the doctrine of the general subsidy. We have to face the fact that the past, with all its bad consequences, is past. The railway companies did many things, but they did not do all that we should have like them to do in the way of modernisation. But that is not the fault of the publicly-owned undertaking as it is. It is the fault either of the former private companies or, it may be, partly, of the Governments of those days. But the past is past, and there is a bad inheritance, much of it out-of-date and worn out. So the question is whether we can get some ad hoc, specific reliefs to the railways, somewhat analogous, if possible, to what is done for road commercial transport—and I think I can get pretty near (not exactly, but pretty near) that principle.

Now I am not dogmatic in what I am saying in this matter: I do not wish necessarily to commit my colleagues or a future Labour Government. But is it fair, when you have inherited out-of-date railways systems and go in for a programme of modernisation on a large scale—a costly business—to put the cost of that necessary operation on the new, publicly-owned British Transport Commission? I am not sure that it is. I think that there is a lot in favour of the Government's saying, "Well, this is a major operation, conducted in the interests of the nation, and, therefore, we will finance the scheme of modernisation, either as to both capital expenditure and interest or, at any rate, as to one or the other". I think there is a case to be made for both of them, for it is in the public interest, as well as in the interest of the railways, that modernisation should proceed.

With my wife I travelled recently on the modernised Pullman train, I think run by diesel-electric, from Manchester to London. My Lords, it was a revolution—a beneficial one. It was very comfortable. It moved not only with considerable speed, but without "rocking the boat" and without bumping—in fact, smoothly. I admit that we had to pay another £1 each for the journey, but so long as I can afford it, I shall be willing to pay it, provided that that train suits my purpose. But not only is that train going to be a business asset to British railways; people are going to begin to say, "My goodness! this British Railways is something after all". It is good for their morale, good for their public relations and, above all, good for the self-respect of the people who work on the railways.

Now in the case of highways, capital expenditure is incurred at the time of construction, and is then almost forgotten. In the case of trunk roads, they are paid for entirely by the Government. In the case of the others, the local authorities get substantial grants—as they ought, because the Government get enor- mous revenue out of motor transport. When the capital expenditure on the highways is incurred, it is not entirely forgotten although it is partly, because it just happens: but with the railways the capital expenditure is not forgotten. The sinking fund charges accumulate, and interest and repayment on the so-called debt are incurred. I think, therefore, that there is a case for the Government to pay for the modernisation as a big national operation that ought to be carried through, warning the Transport Commission "This is paid for that purpose, and don't think you can get your hands into our pockets"—

THE LORD PRESIDENT OF THE COUNCIL AND MINISTER FOR SCIENCE (VISCOUNT HAILSHAM)

Or ours.

LORD MORRISON OF LAMBETH

—"at any time you like, because the taxpayer must be protected, too". I beg the noble Viscount's pardon. I thought the Leader of the House said, not in his pocket, but he is not the only one who pays taxes.

VISCOUNT HAILSHAM

My Lords, I never said anything of the kind. I said they must not put their hands in our pockets.

LORD MORRISON OF LAMBETH

That is exactly what I said, so why does the noble Viscount chip in as if this were the Oxford Union?

There then comes the question of the maintenance of the railway track. A commercial transport operator on the road goes along freely. He has not got to pay directly for the construction and the maintenance of the track. I admit he has to pay considerable taxation, but petrol tax, like income tax, was started as a temporary matter entirely, though it has gone on. I admit they pay, but, nevertheless, they have the free use of the roads; and the local authority ratepayers pay quite a proportion towards the construction and the maintenance of the highways. Is there not a case for treating main line permanent way as a Class I road or, at any rate, as a Class II road, and for treating branch lines as Class II or Class III roads? Class III are unclassified roads, if I may be correct. Is there not a case for that? Because they take traffic off the roads. They help in that way; and it would not be, I suggest, an unreasonable thing to do, even if, in order to bring it into line with the road commercial transport analogy, the railways have to pay something in the way of an oil tax on the oil that they use in their diesel engines.

There has been appointed a highly secret, "under-the-counter" study group of the railways, the Stedeford Advisory Group. Now do not let it be thought that I have any prejudice against Sir Ivan Stedeford. I have a great respect for him: I think he is a very able business man. Indeed, I exercised some influence in getting him appointed as a Governor of the British Broadcasting Corporation, where he did good work. I have no prejudice; but I do not like the way the Government have handled it. They have never published the terms of reference, and I cannot believe that there are not any. They are refusing to publish the Report. In fact, they do not wholly admit that there is a Report; but there are recommendations, and they have not been published.

Just as I argued with the noble Viscount the Leader of the House recently that, in the case of private enterprise, if you have an investigation, then the results ought to be published (as were those of the Select Committee of the House of Commons on the British Transport Commission), and that it is wrong to excuse private undertakings from the publication of Reports that may or may not be critical, so I think that Parliament, the nation, the taxpayers, the British Transport Commission and the trade unions have a right to know what were the terms of reference of the Stedeford Advisory Group and what were their recommendations or observations. Even if there was not a Report, they must have made observations, and we should know what they are. The Government say, "Oh no, this is top secret". Anybody would think they were running a war. Perhaps they are: but it really is ridiculous. And it is not only ridiculous; it is really wicked and contrary to the public interest altogether.

Furthermore, the trade unions have not been told. It is true that the Stedeford Group has been good enough to meet the trade unions, to invite them to come along. So have the British Transport Commission, but they have not got much out of them. They do not know what is moving, what are the recommendations and what the terms of reference are: and the British Transport Commission, I imagine—I do not know, but I imagine—cannot very well tell the trade unions. So the trade unions, who have a right to be treated properly and with dignity, are kept in the dark and do not know what has happened.

My Lords, there was a debate on transport in the House of Commons recently during which the Minister of Transport made a speech. I read it. He did not seem to tell the House anything that he could avoid telling them. Repeatedly, he said, "This is under consideration", "This is being examined", or "Honourable Members will be sure that I am giving this attention". But he did not tell them much. It was a wasteful speech; there was nothing in it. After all, he is paid to do his job and to tell Parliament what he is doing. I do not know whether the Ministry of Transport is going all right, but it seems to me that "fings 'aint wot they used t'be" when I was Minister of Transport. I should like to know whether the Minister of Transport regards himself as a Minister of Transport or only as a Minister of Road Transport. I am tempted to ask whether he regards himself as Minister for the Road Haulage Association; but that would be rude and I know your Lordships do not like rudeness, especially from this side of the House, and I want peace and friendship with your Lordships.

I should like to refer your Lordships to an editorial in Modern Transport, a reputable weekly periodical dealing with the transport system as a whole. On the front page of the editorial notes on October 22, 1960, appears this passage: Transport in its various forms figured prominently at this year's Conservative Party conference. … Not surprisingly, roads came in for considerable discussion, the need being urged for long-term planning and capital investment. The Minister, said one speaker, must demand and get a larger share of the national purse; he must fight the case with the Government and secure a greater share of road users' taxes. A member of the N.U.R. from Swindon, amidst loud applause"— which pleases and surprises me— spoke up for the railwaymen and, appealing for more traffic for the railways, emphasised the relative economy of rail and road transport. Replying to the debate Mr. Ernest Marples, Minister of Transport, suggested that before any urban authority planned its ring roads it should determine, on a scientific basis, the origin and destination of the traffic flow. He did not believe in forcing traffic back from road to rail. The mobility of road transport had hurt railways the world over; they certainly had a part to play, but it was wrong to argue that to remove vehicles from the roads would relieve congestion in city streets. My Lords, I quote that to you, but if you can persuade me that this gentleman is worthy of the post of Minister of Transport. I shall be very, grateful; but it will take a bit of doing was an extraordinary observation, and was manifested again when he said he was not going to be a party to encouraging traffic to go back from the roads to the rails. He might have added that he was going to be a party, and had been a party, to encouraging traffic to go from the rails to the roads, and I say that he is biased and is not, I think, a suitable appointment. He will go sooner or later, but I imagine that what I have said, may heap him to keep his job for a few more months. That is the worst of engaging in these criticisms: they may have the opposite effect from what one intends.

I appeal to the Government, on behalf of our country, to take a wider, bigger and more comprehensive view of this transport problem. I appeal to noble Lords opposite, because they have influence with the Government. Some people outside and in another place think that noble Lords opposite have no influence on the Government. I was a member of the Churchill Coalition Government, and I met a former Marquess of Salisbury who was Chairman of something called, I think, the Watching Committee. I was told to take him seriously; that this Watching Committee was important. I was told: "This Committee consists of very influential noble Lords who could injure the Government or injure you." So I treated it, as I would have done anyway, with great respect and great courtesy. Do not let your Lordships opposite think that you have no influence with the Government. So persuade them, press them. I know you will not openly quarrel with them—it is only we who do that sort of thing. The Tories do not do that; they keep their quarrels under the counter. Your Lordships can use your persuasive powers to try to get the Government to see this matter in a wider, rather more public-spirited and bigger light. Transport is a vital element in the economic life of our country.

My Lords, I have said some controversial things. I find it difficult to get out of my House of Commons habits, but I do not think it is a bad thing for your Lordships to have a bit of a "dust-up" now and again. Nevertheless, I believe I have uttered some truths, and I would ask for those views your Lordships' sympathetic and unbiased consideration. I beg to move for papers.

3.26 p.m.

THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF TRANSPORT (LORD CHESHAM)

My Lords, when a noble Lord of the stature and eminence of the noble Lord opposite puts down a Motion of this importance, it has to be taken seriously, and, naturally, serious regard must be paid to what he says. One asks oneself on these Motions, which are in rather general terms as I call them, exactly what it is that the noble Lord is seeking. I have listened with great care to what the noble Lord has said, and it seems to me that his underlying plea is for a return to the kind of thinking which was popular in his Party in the elate 1940's. I thought that the way he made his plea was extremely reasonable. He argued it, as is only to be expected, very well from his own point of view. But underlying even that note, I wonder whether he thought that he could make his plea to the House, to Parliament and to the country without there being disguised somewhere, or perhaps just visible, the shadow of the arrow of control being aimed at the target of integration—that arrow flighted with regulations, tipped with frustration, and which seemed, in our view, in its previous use to have proved a misguided weapon.

The point at which I must start is the British Transport Commission and the railways. It is widely known that Her Majesty's Government have been, and still are, closely examining the organisation of the nationalised transport undertakings, and, as my noble friend, Lord Mills, told your Lordships on the 7th of last month, the Government hope to issue a White Paper before Christmas. I am sure the noble Lord opposite has his good reasons for moving this Motion at this time, but naturally, I have no intention of anticipating what the White Paper might say.

This day last week the noble Lord put down a Question on the subject of the Special Advisory Group and its recommendations, and he, and some of his colleagues at any rate, showed quite some excitement about it. I try to realise my limitations, and it may be that I failed to convey to the noble Lord last week all the information he wanted; but equally, perhaps, the supplementary questions, as can be seen on looking at them again in the OFFICIAL REPORT, were not entirely to the point. But whatever is the case about that, I do not want there to be any misunderstandings left now, as evidently there are.

The noble Lord seemed to suggest at the time that the Special Advisory Group were concerned only with the railways, and the way he put down the Question further suggested that it was only railway modernisation that they were considering. But what is more important is that he put forward the view, and has more or less repeated it to-day, that my right honourable friend the Minister of Transport could not justify his own position without revealing the Group's recommendations. Finally, he thought that what the Government have to do is a miserable job. I was glad to hear, in the course of his speech, that he has changed his views and does not think that, but at the time he thought that it was a miserable job, although, of course, he did not have any idea, and could not have any idea, of what the forthcoming proposals might be, simply because they had not been published.

I want to make the position quite clear. Contrary entirely to the noble Lord's opinion, the Government have not approached this problem primarily as a political one at all. They regard the problems involved as practical ones and their aim is to have the transport system which the country needs if its economy is to function efficiently. If the noble Lord will cast his mind back a few months, he will remember that my right honourable friend the Prime Minister made a statement in another place on March 10. He made it against a background of railway deficits of increasing size and seriousness and of the fear, which was only too well founded, that the railways would not be able to break even in 1963, or anywhere near it, as had been the hope at the time of the Reappraisal of the Modernisation Plan in 1959.

In his statement, he pointed out three things. First, that the railways must be of a size and pattern suited to modern conditions and prospects; secondly, that the public must accept the need for changes, and thirdly, that the British Transport Commission must accept a radical alteration of its structure in order to secure a more effective distribution of functions and better use of its assets. The Prime Minister went on to foreshadow the appointment of the Special Advisory Group and my right honourable friend the Minister of Transport announced its setting up on April 6. A week after that, there was a full debate in another place, and in the course of it my right honourable friend made it abundantly clear that the Special Advisory Group was not a Committee, would not function in the formal way in which a Committee works, and that there was therefore no question of publishing its report. The Group did its work on these understandings, and my right honourable friend is certainly not prepared to go back on the policy, which he stated so clearly many months ago and which has been reaffirmed at various times since.

I am surprised a little that the noble Lord opposite is unfamiliar with the terms of reference of the Group, because they were made public on April 6 of this year at the time the setting up of the Group was announced. They make it clear that their task was to examine the Structure, finance and working of the organisation at present controlled by the British Transport Commission and to advise both my right honourable friend and the B.T.C., as a matter of urgency, haw effect could best be given to the Government's intentions, as they had been set out by the Prime Minister. Their main task was, therefore, to advise in quite a broad field and it would be wrong to think that there is any exclusive connection between their work and any re-assessment of modernisation. The Government are very glad to have had the valuable advice of these men who, as the noble Lord said, are eminent in their own sphere and have long experience of large-scale organisations.

LORD STONHAM

My Lords, the noble Lord just said that it would be wrong to think that there was any connection between the Stedeford Committee and any reassessment of railway modernisation, but last week, in response to a supplementary question, he admitted that it was the advice at least in part, of the Stedeford Committee which had resulted in a four-year programme instead of the previous modernisation programme.

LORD CHESHAM

My Lords, I do not think that I said any more than the fact that it was something connected with everything else which the Committee had naturally to take into consideration in framing their views. What I want to make clear is that the work of the Group and their recommendations are only part of the consideration and that the Government's attention to the problem is to take account of still wider aspects than those on which the Group advised. They have had the benefit of the observations of the Select Committee on Nationalised Industries which examined British Railways; they have had the benefit of suggestions made by honourable Members in another place and by your Lordships, and by the trade unions, and last, and certainly not least, they have had the benefit of suggestions by the Britsh Transport Commission itself.

Altogether, this adds up to a sound and sensible process of open-minded consultation, which is exactly what the noble Lord wants. I only wish I were confident that when the noble Lord's Party were in power they had undertaken consultations of this kind before embarking on major legislation. But, no matter how wisely or extensively you get advice, the point to remember is that it is the Government, and no one else, who carry the responsibility for bringing forward proposals; and what the proposals may be your Lordships will be able to find out shortly from the White Paper I have already mentioned. The noble Lord, too, when he sees it, will be able to judge whether the whole thing is such a miserable job as he seems to think.

In talking about the consideration that the Government are giving to these urgent matters, it seems to have become fashionable among members of the Party opposite in their speeches to accuse my right honourable friend, the Minister of Transport and, through him, the Government, of being "anti-railway", or being guilty of some kind of antipathy to the railways. The noble Lord opposite fell into the same trap to-day. He told us that "fings ain't wot they used to be" when he was at the Ministry. I can only reply to him: thank the Lord for that! It is very easy to make irresponsible charges of this kind, but it needs a good deal more than simply making them to substantiate that they are true, as in this case they are certainly not. My right honourable friend believes that a railway system of the proper size should continue to play an important and substantial part in our transport system, but he also firmly believes that it must be a system which will meet our needs as they are to-day and not as they were 50 years ago and which will meet them economically and efficiently. What has governed the Minister's attitude towards the railways is certainly not antipathy but is common sense and realism. I simply do not understand how anyone can call it antipathy when, in a situation like the present one, faced with mounting deficits, declining traffics and enormous sums of public money wanted for investment, the Minister should set to work, in close consultations with the British Transport Commission, to consider what changes may be necessary to enable the railways to achieve efficiency and a sound financial basis. There can be nothing wrong with that, and I understand that this is what the noble Lord wants, too.

My Lords, I think I should go further into just how serious is the railway financial position. Up to the end of 1959, the British Transport Commission had incurred revenue losses total-ling about £400 million, accounted for mainly by the heavy losses on the railways. In that year, the working deficit of British Railways was £42 million, and to this must be added another £42 million for central charges and £26 million for interest, both of these figures representing the share of such charges attributable to the railways. The total deficit for the railways for 1959 was therefore £110 million, or, to put it in a different way, approximately 4d. on the income tax.

LORD LATHAM

My Lords, may I interrupt the noble Lord? Is it not the case that £26 million is further interest? The £42 million is not wholly central charges, but central charges including interest. That needs to be clearly stated.

LORD CHESHAM

Yes, my Lords; I believe the noble Lord is right. But I am a little more concerned, if I may say so, with the total deficit, which I presume the noble Lord is not calling into question.

LORD LATHAM

But accuracy as to its constitution is equally important.

LORD CHESHAM

Certainly. I do not think things look like being any better in 1960. The Government have provided this year, as my right honourable friend the Chancellor of the Exchequer announced in his Budget speech, an allocation of £105 million above the line for the Commission as a whole, and this is, in effect, a subsidy to the railways. The noble Lord opposite does not like it, and I do not see that anybody else can. But the other activities of the B.T.C. should produce in 1960, after paying their share of central charges and interest, a net surplus of £10 million. Accordingly, the provision made on the Ministry's Vote for 1960 assumes that the railways will lose about £115 million on revenue account in this year.

I do not think the seriousness of this situation needs any underlining, but if it did, I could take as an example the fact that in 1959 the gross receipts of the railways amounted to £457 million. The total deficit was, as I have said, £110 million, which is very nearly one-quarter of the turnover. If you look at it from the position in 1959, the railways would have needed to increase their gross receipts by about a quarter, without any increase whatever in expenditure, in order to break even. Surely, my Lords, it is not very surprising that there should be increases in fares in circumstances which are composed entirely of very hard facts, which have to be faced. A deficit is a deficit, and you cannot get away from it however you handle it. Somewhere, somehow and at some time that deficit has got to be met by somebody, whether it is the consumer, the taxpayer or both. But that is not really my point. My point is that this is the background against which Her Majesty's Government have acted and against which, last March, the Prime Minister put forward the Government's views on reorganisation. This is the background against which the action already started will be followed by the proposals in the White Paper which is to come.

When, at the beginning of the year or thereabouts, it was obvious that the situation called for action, and it was decided to act, one of the first things my right honourable friend the Minister of Transport did was to agree with the B.T.C. that all major projects and programmes of modernisation should be examined by his Department to ensure that they represent a reasonable use of the resources which the Commission have available for investment. The noble Lord, Lord Morrison of Lambeth, made a great deal of the need and value of modernisation. That is not in question. No one has suggested, and least of all the Government, that the railways should go on building steam engines or that they should not replace worn-out or outmoded equipment. But I can see no reason why modernisation should proceed according to some fixed and immutable plan without due regard to the consequences, whether they be beneficial or otherwise. After all, we know that our transport needs are constantly changing, and the plans must be kept flexible for that. We have to consider, as well, what burden in the way of interest charges that modernisation will put on the railways in the future, and what financial results will flow from it.

This is certainly not a matter which can be decided in general terms. In view of the heavy demands on the sums available for investment in the whole public sector, it is very necessary, having regard especially to the financial situation I have described, to get together with the B.T.C. and look at each proposal with the object of getting the priorities right, and, in particular, to determine what contribution it will make towards reducing the railway deficit so that the railways can break even. My Lords, I think that any such stocktaking as that is not only inevitable, but is entirely proper; and the B.T.C. have agreed that there should be some slowing down in the modernisation projects while the process is taking place. This finds itself reflected in what the noble Viscount, Lord Alexander of Hillsborough, referred to last week (I imagine that this is what it must have been) as a "mortal blow" to the railways.

I want to look at the figures for a moment, quite briefly. In the 5-year period up to the end of 1959 we invested on new and major improvement work on the roads £164½ million; and into the railways we put £475 million. In 1960 on its own, we put £75½ million into the roads, and we put £160 million into the railways. For 1961 the figure is expected to be £140 million.

LORD LATHAM

The noble Lord will excuse me, but this point is important. How much of that capital investment represented replacement and came from depreciation funds and the like?

LORD CHESHAM

That is a figure I am afraid I cannot give the noble Lord offhand.

LORD LATHAM

It is very important.

LORD CHESHAM

I agree that it is important, and it is necessary to be accurate. I will certainly ascertain that figure and let the noble Lord know. But at the moment the point I am trying to make is this: that you cannot look at those figures and say that anything in the nature of a "mortal blow" is being struck at the railways—or even a blow at all; because the facts are that, in the meantime, no contracts have been cancelled and there has been no more than a pause for examination, but with no major change in modernisation policy. I want to make that perfectly clear.

The noble Lord, Lord Morrison of Lambeth, wanted a longer-term plan, and already action has been started to cater for just that. For the longer-term plan the Commission have undertaken to produce a 4-year programme which will be examined by my right honourable friend as soon as he gets it.

LORD LATHAM

I am sorry to interrupt again, but this is so important. Is it not the case that the Minister, and through him the Government, have approved the modernisation plans costing initially £1,500 million?

LORD CHESHAM

I do not know whether the noble Lord has been listening to what I have been saying, but I have already explained what I thought were some very good reasons why it is impossible to work to a fixed and immutable plan in the light of changing circumstances. If the noble Lord would be good enough to look at the OFFICIAL REPORT to-morrow he will see that. But, again, to achieve a longer-term plan my right honourable friend has set up a Study Group to enable him and his advisers and the B.T.C. to get together round the table and consider the place and form of the railways in our transport system, having regard to developments and trends in other forms of transport, and in the light of the changing industrial needs in the country and changing social habits. I suppose that when matters of such scale and importance are being discussed there must be from time to time differences of opinion. Unless I mistook his meaning entirely, the noble Lord, Lord Morrison of Lambeth, wants public Corporations to be much freer to criticise responsible Ministers, if they so wish.

LORD MORRISON OF LAMBETH

Will the noble Lord forgive me? I would not put it quite in that way. I would say: the right to express their views when there is a difference of opinion about policy between the Corporation and the Government. I did not want them to be incited into going in for a slanging match with Ministers, which is a Parliamentary function and not a public Corporation function.

LORD CHESHAM

My Lords, I agree that the noble Lord did not say that, but I do not honestly think there is much difference between the form of words we have chosen. I should not have thought that this was a matter in which the House or the Government would have wanted to lay down rules. I do not know that the nationalised undertakings are debarred by Statute or in any other way from making their views known when their interests are affected by Government action or policy. But it does not seem to me that this is quite the right way to go about it. Surely, it is a matter of judgment for the people concerned, and the real answer lies in the good relations of mutual trust and understanding which should exist between a. Board and the Minister through working closely together. While I agree that those are not likely to be established unless there is some give-and-take on both sides, and some restraint by both when differences of opinion arise, I feel that in the establishment of such good relations we ought to rely on this point and not on any laid-down procedure for criticism or the prevention of it. I think the noble Lord will find that the Government's proposals, when they come, will be directed towards the creation of the kind of conditions where this good relationship, which is so necessary I agree, between the industry and the Minister can flourish.

The noble Lord clearly considers that a major difference exists between us in the field of co-ordination, and I think I must spend a moment or two on that matter. It seems to me that the only difference between noble Lords opposite and noble Lords on this side of the House in these matters is a difference of method. There is surely nothing between us in the view that the country requires an efficient and economic transport system which will serve it well. The Transport Act, about which the noble Lord spoke, aimed at the integration of transport services. It aimed at it, but it did not hit it. It did not hit it, I presume, because the Party to which the noble Lord belongs did not take all steps which the logic of their policy would appear to dictate—such things as the control of "C" licences and even, perhaps, detailed restrictions on the use of their cars by private motorists.

On top of that, the structure of the B.T.C. and the duties that were given it, meant that decisions regarding the best use that could be made of transport over a wide field were concentrated in the hands of a very few people. Now this is not the way the Government think it should be done, and their view (as I have said before to your Lordships on several occasions) is that each form of transport should have freedom to develop according to the contribution it is best fitted to make in technical and economic terms. This does not mean a sort of free-for-all and irresponsible competition. What it does mean is that the individual user is free to use the form of transport that gives him the best service for his needs and the pattern of that transport should therefore be deter- mined according to the part which each means of transport can best play. To do it, or try to do it, in any other way must surely ignore the changes that are going on all the time.

Since that is so, the question then arises of how one can achieve co-ordination while allowing the effects of consumer choice to influence transport development. Clearly, investment is the most important instrument in effecting such co-ordination in these conditions. Investment in roads and railways now makes up about one-sixth of the total investment in the whole of the public sector, and my right honourable friend is faced with a heavy responsibility in allocating the available resources. Public demand shows itself increasingly by wanting more road transport and calling for more and better roads. On the other hand, as I said, the Government believe that there is a need for a railway system of the right size and shape for our future requirements.

I am bound to say that my right honourable friend finds some difficulty in doing the right thing. He has already been accused of antipathy to the railways. He has also been accused of disliking the private motorist; of refusing to build enough roads; of spending too much money on roads as compared with railways, and on railways as compared with roads. All these things are really only the brickbats which are the occupational risk of any Minister of the Crown. If the noble Lord will wait for the White Paper, he will indeed see that he is well off the rails himself if he suspects that my right honourable friend is guilty of antipathy towards railways or railwaymen. I want to say again that the Government believe firmly that there is an abiding need for a railway system, but it must be a 20th-century system and not a slight modification of the 19th-century pattern. It must meet the consumers needs as they are to-day and as they will be to-morrow, and not as they were yesterday. Above all, it must meet them in a way that is both efficient and economic.

3.57 p.m.

EARL STANHOPE

My Lords, it is a considerable time since I ventured to inflict myself on your Lordships' House, and I promise that I shall not do so for a long period to-night. I confess that I was somewhat surprised at some parts of the speech of the noble Lord opposite. For instance, I heard with amazement that he had such immense respect and admiration for your Lordships' House. He did not give much sign of it, though I am glad to know that it was there. I agreed with some of the things the noble Lord said, but others I heard with horror.

In these days I have to be driven about because I am not allowed, having one leg, to drive myself. In consequence, I have to come up in diesel trains and have to be driven about London in buses. In both I have been perfectly happy and confident as regards safety. If the noble Lord is going to urge the integration of personnel between road services and rail services I suppose I shall find a bus driver driving my diesel train and a bus being driven by a diesel-train driver. I do not know what I am going to do about it, but I should not feel safe with either.

The noble Lord also criticised the Government for holding up modernisation. I know one case where I wish to heaven they had done so. In what used to be the London, Chatham and Dover Railway, going down to Maidstone and Canterbury, new electrification was started and new bogie trucks were put under all the carriages. Ever since everybody has been complaining that these carriages vibrate all over the place. Unfortunately for me, I came up in a train which had one of these bogies on the South Eastern part of the line—what used to be known as the "London Smash'em and Turnover." Perhaps the justification for these bogies is to maintain the name. I got into a full train on the South Eastern, and, unwisely, stood at the extreme end of a saloon carriage. The vibration was such that I had to lean against the wall behind me, put one hand out on the wall in front and the other on the side of the train to prevent myself turning over. I can assure the noble Lord that it was not in the least pleasant: nor was it very restful. If there had been more delay before those bogies had been introduced, and further experience before putting them in large numbers on the railway, it would have been to the railways' advantage.

In these days we are all motorists; we are all inclined to look at things from the motorist's point of view. I think we all agree that trunk roads are a development we should push on with, particularly after the safety figures given to us this afternoon, and also because any improvement we can make to roads is of great advantage. But there is another side to the question: the more you improve the roads the more will you get people motoring up to the great cities. Already here in London there is practically a hold-up of traffic, and in a year or two it will come to an absolute stop—nobody will deny that.

There is another reason for the traffic jam in London, and that is the increase in the number of offices in place of residential accommodation. And the commuters who come up from the country in their cars have to put their cars somewhere. Last week my noble friend Lord Waldegrave was asked whether there was a limitation of the number of offices being erected in London, and he said that there was to some extent a limitation. But so far as one can see from what one reads in the papers, that limitation is very slight indeed; the number of offices now going up is tremendous and is increasing the number of people coming to London every day and every week. My noble friend added that he understood that normally, when a new office block is put up, some provision is made for motor cars, and he said he understood that the standard rate of car space for a new office block is a space for one car for every 2,000 square feet of office. If you take an office 15 feet by 12 feet, which I think is fairly reasonable, that works out at one car for every eleven office rooms. I submit that that is totally inadequate provision. It is increasing materially the number of people who travel to London as commuters.

My Lords, what is to be done in answer? Here I am going to make myself extremely unpopular with motorists. To my mind there is only one answer, and that is off-street parking for cars. It is true that the Government have provided a certain number of parking spaces, such as the Horse Guards Parade, and, I regret to say, even the road on the North side of the Serpentine—one of the only places in London where you could sit and be quiet without noise of traffic drumming in your ears is now a parking space. But that is only playing with the question.

Moreover, the parking meters along the roadside are an even worse plan. They do not free the highway of motor cars, and they prevent the householder, who has legally a right of access to the roadway from his house, from having any chance of going to his own car even if it is outside for a short time. I submit that the only course is to build off-street motor garages and to charge the motorist for his occupation of them. That would mean that it would cost a good deal more to motor up to London, and to the other big cities where this system is introduced, than it does now. But if the Government continue to put it off, because it is so expensive and because, it is said, people will not go into these garages, they will be faced eventually with a complete hold-up of traffic. It is impossible to build these garages in five minutes, or a year or two years; they will take a long time to do; and the sooner a start is made, the better.

I submit that the charges made for leaving a car in the street have got to be raised. We do not realise (I stand under correction, of course, from the noble and learned Viscount) that a road is called legally a highway; at any rate we talk about a Highway Code, and I stress the word "way". A motorist has a right of traffic over a road; he has no right to stop and park on it. You might as well say to people in offices, as they might have done in the summer of last year—not this year—"It is so hot in the office you can take your chairs and have your lunch on the pavement outside; it will be cool." They have no right to do that, but they have just as much right as a motorist has to leave his car.

If parking charges are increased, it will mean that a very large number of people will be driven back to the railways, and one of the unfortunate things about the changeover from rail to road is that the railway authorities have developed an inferiority complex. Again I stand under correction from noble Lords who know more about business than I do, but I have always understood that the successful companies are those which go into every part of their production to see where a loss is made. Having done that, they do not cut out that branch or abolish that factory; they see how to turn that loss into a profit, and they succeed in doing it. But that is not the method employed by the railways to-day. When they find any branch line that is losing money they immediately ask to have it closed down.

I have an example in the valley in which I live. It is a short line that runs from Westerham to Dunton Green, a distance about 4¾ miles. There are trains only from early morning till 10 o'clock and from 4.30 p.m. onwards. There is a long gap in the middle of the day in order to save money—though it is rather an absurd way of saving it, for that steam train solemnly puffs its way from Dunton Green to Tonbridge every day and in the afternoon puffs its way back again. That is apparently not given as a credit to the branch line. The loss on that line is put by the railway people at, I think, about £19,000 a year. If there is diesel traction that loss is reduced very materially, though not entirely.

I am in considerable difficulty about this matter, because the whole system of inquiry into the closing of branch lines is one which the noble and learned Viscount on the Woolsack would view with horror. Those who ask for the line to be maintained have to talk first as if they were prosecutors, and then the railway authorities go up before the Transport Users' Consultative Committee and put forward their views, supported by figures which those who have asked for the line to be maintained have had no opportunity of examining beforehand. On more than one occasion those figures have afterwards been found to be completely wrong. For instance, when they said there was an alternative route by bus to Sevenoaks they said that the use of buses would not materially add to traffic. But it was found that they had taken the figures for 1954, instead of 1960, and they entirely omitted to say that the county council—who, after all, are the traffic authority—had reported that the road the buses would have to use, and the one to London, were both already seriously overcrowded.

That little line, my Lords, has 150 season-ticket holders, and of those 150 I think that practically every one of them has a motor of his own. That means that, when that line is closed, at least 100 cars a day will come to London and add to the congestion in London. Yet although that line is within the London Traffic Area and came before the London Traffic Advisory Committee they advised that the line should be closed. It then came up before the Central Committee, who I understand have referred it back and told the London Committee to think again.

An even worse example came to my notice through the Railway Development Association. It concerned the closing of three branch lines in the Isle of Wight. There the traffic authority representative produced a memorandum before the Railway Consultative Committee and refused to submit it to the people who were asking for the lines to be preserved. The Committee ordered him to do so. He did, and at the adjourned meeting this set of figures was "torn to pieces" by learned counsel who appeared for the objectors and also by a well-known chartered accountant. It was then proved that the figures which had been supplied for the closing of the railway were based on a different system from those which were supplied in regard to the losses on the railways as a whole. Applied to that railway, the figures for the closing of 24 miles out of the 51 miles were shown as a loss which, if it had been applied to (the country as a whole, would have turned the 1951 accounts from a published total profit of £34.9 into a loss of £40.7 million. When the official representing the railway was asked if he disputed the statement he refused to say anything whatever about it.

I have brought these things forward only to show the sort of fatalistic attitude of the railways authorities. That is not the way to win back traffic. I submit that when they find something which is not paying they should see whether it is not possible to turn it into something which is profit making. I do not know whether Charting Cross Hotel is still part of the Railway Transport organisation. All I can say is that that hotel certainly appears to be making a profit, because only a year or two ago two storeys were added to the top of the building and your Lordships have only to walk in to see the reason why. They have obviously got a first-crass manager and a good staff. The carpets that I have seen there for many years are still perfectly fresh and spotlessly clean. It is a question of management, not only in that hotel but on the railways as a Whole.

I submit that if you want to get the railways properly managed, you must try to delegate authority and divide up the running of the railways into various areas. Great Britain is small, but it differs widely from one part to another, from the county centres and the great cities down to small agricultural holdings. The more we can decentralise and give authority, as it used to be, into the hands of people like the stationmasters of great stations and others, albeit responsible for the main line of policy to a central organisation, the better it will be for the railways and the less shall we find them in debt in the future.

4.15 p.m.

EARL BALDWIN OF BEWDLEY

My Lords, your Lordships' invariable indulgence towards maiden speeches is, if I may say so, such a marked and attractive feature of this House that I feel it almost an impertinence to plead for it. Even as one who, two years ago, found himself jerked up unexpectedly out of his rustic retirement (I must say it never occurred to me to try to challenge my fate and seek to remain a peasant), and as one, moreover, who has always been far less inclined to talk than to listen; yet, certainly not because I profess to be a master of the subject of this debate, but solely for the reason that I gave in my opening words, I think I never before got up to speak with less misgiving.

I have no special right to talk about transportation as a whole, but on railways perhaps I should know a little more than the average man in the railway compartment, for my interest in them is personal and, in a way, ancestral. I stress that because if I seem to take rather a cheerless view of their future, it is not prompted by any emotional prejudice against them. I assure your Lordships that prejudice, if there is any, is very much the other way. My grandfather was a director of the old Great Western Railway, and so was my father; and so, though much later, was I—not for very long though, because within 2½ years war broke out, the Government took over the railways, and most of the directors found that they could make themselves more useful elsewhere. Two years after the war their services were dispensed with altogether when the railways were nationalised.

Now the railways are very, very sick. How did they become so? The cause, I think, was neither private ownership nor nationalisation. I have no particular feelings about either. But the first symptoms, I think, had become apparent on the grouping of the dozens of old railway companies into four main lines, plus—although this was some years later—the London Passenger Transport Board. The noble Lord, Lord Morrison of Lambeth, mentioned the "Square deal for the railways", a plea which was mounted by them in the hope of terminating what they thought to be most unfair competition from the roads. In a maiden speech one must not be shrewish, and therefore I shall not take up the noble Lord on any points he may have made about private ownership and railway directors. But naturally, I think the railways suffered a rather oblong deal in those years, although it is much more nearly square now; but, unfortunately, it is about 25 years too late and the competition from the roads is, of course, far stronger.

I wish I could say what would be the best thing to do. I am detached from all recent contact with commercial transportation, but it is really commercial transportation that I think is much the more important. Freight used to account for perhaps not quite twice as much of the railway transport as passenger transport did, but it is much the more important of the two subjects, and it is about that that I am really speaking. I am ignorant of the latest expert view of the position; so what I say is entirely my own outside view. I can only make guesses, but that would be highly imprudent. All I can hope for is that we shall be given as a transport system the swiftest, the surest and the cheapest form of freight transport, for the benefit of the industry and trade by which our crowded population keeps alive. I think that that is essential. It is an obvious hope and a huge over-simplification, but if it is to be fulfilled some brave new deeds will have to follow; and if the result is to be fewer railway lines and more roads, then—subject always to the superior needs of national defence—so be it.

Old affection makes me hate this thought, but roads worthy of our increased traffic are only just beginning to be built, and if and when they became adequate then I cannot see the railbound system successfully competing with them, except here and there. I wish I could. I know that many of our railway chiefs naturally believe that, given a fair chance, they can; but I must say I very much doubt it. And, of course, there is the same kind of, duel going on between coal and oil. Less than 200 years ago Brindley's canals were among the marvels of the new industrial age—and look at them now! Yet there was a period when our local canal company in North Worcestershire (I believe it was the Staffordshire and Worcestershire) used to pay annual dividends of 38 per cent., and its £100 shares were worth £800. It was the railways that struck the canals their first blow. No Government then gave the canals a few hundred million pounds to freshen themselves up with.

The canals enjoyed about 75 years of high prosperity, say from 1770 to 1845, and then the railways enjoyed a similar period of about 75 years, say from 1845 to 1920. Now if 75 years—roughly a man's life span—is anything more than a fortuitous allotment, I believe the motor lorries and motor cars have already used up about half that ration of time. The hell may toll, the last horn may sound, for them, also—perhaps sooner than any of us think—and their challengers whoever they may be, are already flexing their embryonic mechanical muscles. We cannot delay any longer in making up our minds about the part to be played by the railways.

Setting aside from the argument the necessary construction of good motorways and their effect upon the national economy. I would ask, if these heavy and growing money losses have been suffered by the railways in the good years, then what will be suffered in the bad? I know we are said to be better than our fathers were in the 1930s; that we have conquered unemployment; that we have learned how to iron out the booms and the slumps, and that production and consumption are expanding like the universe, presumably for ever. But what if trade or, for the matter of that, the universe itself, were to reverse the process and to start contracting? It might.

This is a British problem and it has to be tackled in our own British way, but I often wonder what is happening about the transport problem abroad. I wish I knew, for instance, what the clever Japanese were doing, but I am afraid I do not, yet. I have heard that in the United States the railways are losing money and their proprietors have a growing dread of nationalisation Already they have transformed some stretches of old railway line into turnpike highways, and have found them profitable beyond expectations. The nationalised railways of France, I am told, are given all the money they want. Their workers are very well paid indeed and the whole esprit de corps is excellent. In Russia, where the strangest things happen, it is said that during the first year of operation of the Leningrad Metro the Government devoted two million roubles towards the cost of working, but the workers refused this offer, worked harder than ever and presented 600,000 roubles to the Government. I should like to know more about that before drawing any conclusions or making any comparisons.

That brings me, however, straight to the human aspect of this problem here at home, and that is: what of the railway people themselves, caught as they are in the coils of this economic serpent? There are over half-a-million of them in this island and they are not happy—certainly their chief officers are not. I remember once hearing a discussion on the wireless about the desperate state of the coal trade. It was only a few years ago and the trouble was not that the supply exceeded the demand but that the demand greatly exceeded the supply. We could not get enough coal. I believe we were having to buy some from the United States at that time, and I seem to remember that the then Secretary of State for Foreign Affairs—I believe Mr. Bevin—was saying at the time that if only he had some more coal he could do his job better in negotiating with foreign Powers. How remote those days seem now!;

In this wireless talk of which I spoke, one of the voices hinted that a solution might he found if only the miners would work a hit harder or a bit longer—I for- get which it was—and then we should get more coal. To this another voice made the annihilating reply that the miners were the salt of the earth, and if anyone was going to deny that and to start criticising their work—well, I cannot remember the rest; but nobody did deny it, and so that point was settled. On that I will only say that if there can be two salts of the earth, then I should like to put in a claim for the railway servants or staff of all grades. They are having, and have had for years, as troubled a time as those of any other trade. Their trade is shrinking, whether they know it or not, and their memories and loyalties leave them wondering who is leading them, and where to.

I believe that many of those who work for the railways are now thoroughly depressed and I dare say some are beginning to lose hope also. Those in the higher administrative posts—and there are some of the ablest men of the country in those posts—are cruelly over-worked and (to use a word typical of this era) frustrated. One might almost say that they are working themselves to the last ulcer. I hope that Her Majesty's Government, whatever they decide to do with the railways, will never forget that at the heart of all these machines and statistics are human beings, and that it is upon them that the weight of these decisions always presses most hardly. It may seem odd, but fellow human beings have been known to forget that.

I do not want to make too solemn an issue of this problem of transportation among the many others that there are, national and international, but I sometimes think that this is only one more sign that we are making the world not only too dangerous, which most people admit, but also too difficult, so that we are all getting more muddled than we realise. Perhaps young people do not notice this, but I wonder how human skulls are going to contain brains enough, powerful enough, to cope with the multiplications of this scientific age and where those brains are coming from. We cannot go on like this and preserve our reason.

Look, for instance, at the painful way in which the cities each morning and each evening at the same time admit and extrude their mortal millions, loads of them bunched like asparagus. Is that a proper way to travel, let alone to live? It may be a marvel of modern transportation, but to me it is very nearly imbecile. Little wasps and bees order their metropolitan traffic better than that. They would not put up with our sort of travel for a moment and, anyway, you may be sure, not without some pretty stinging comments. Is there really no easier method? Apparently not. People get used to it, and truly no one is to blame and no one knows the solution: it is all too difficult.

Invention, like freedom, has outrun control. There are no real solutions any more and the best we can do now is to stagger on from makeshift to makeshift, choosing between evils and generally finding we are too late as well. And as for international affairs, our present perplexities are nothing compared with those that are coming to us. Yet we must struggle on hopefully. We cannot—and I say this in all seriousness—and should not wish to stop our wonderful material progress. But it is very clear that some larger intellect must inform and guide us if we are to avoid brilliantly inventing our way into helpless confusion. But where that help is to come from is even farther beyond the scope of this debate than I fear I have strayed already.

4.33 p.m.

THE EARL OF LUCAN

My Lords, it is not often that I get a stroke of luck like this of being the first to congratulate the noble Earl, Lord Baldwin of Bewdley, on a maiden speech as good as any I have heard in your Lordships' House—and that is saying a lot. I feel that when we read it we shall appreciate it even more than we did while listening to it. It was a speech that put us on to a rather different plane, and I myself was glad that the noble Earl stood back and took a big, wide view of transportation. Indeed, he went even outside transportation and had a few "cracks" at our present-day civilisation, for which we are all exceedingly grateful to him. We hope often to hear from him again.

Some of your Lordships will appreciate the significance of the term "transportation" used by my noble friend in this Motion. Those who had Service training will remember their "staff duties" and the difference between "transport" and "transportation" "transportation" being the general view of movement of people and things by any means. So I hope that this debate will remain, as it has started, on the level of the wide and long view. There was a phrase—I think Kipling coined it —that Transportation is civilisation". If we come to think of it—and, indeed, I think the Select Committee mentioned it—probably the biggest factor in the revolution that the twentieth century has brought is the mobility of people and goods; and that, of course, is bringing its own problems with it. But it is quite certain that it is no good saying, as the noble Lord, Lord Chesham, said (I think it may have been a slip of the tongue), that the Minister is studying the needs of transport for to-day. I hope—indeed, the Minister himself said so in another place—that his small Study Group is examining the problem for 25 years ahead. That is much more like it, because, as the New Scientist said in an editorial, far-sighted thinking about future patterns is long overdue. I agree with those who have said that we ought to treat this as a practical, material matter and not introduce politics into it. But the noble Lord, Lord Chesham, said one or two things that should not pass without a word. He said that his Party were regarding it not from a political angle; he said, further, that they believed in co-ordination. They have had the authority, they have had the control of the transport facilities of this country for nine years now. One of the first things they did was to publish a White Paper in 1952 and it was followed closely by a Bill in 1953. The White Paper said: It is not enough merely to amend or remove the undesirable features of the Transport Act: a positive approach is needed under which, with a minimum of centralised control, the transport system may be stimulated to adjust and develop itself in accordance with public needs". I suppose that one of the undesirable features of the original Transport Act was that it stood or fell by co-ordination, and that was the first thing that the Tories destroyed. As regards the 1953 Act, if they really wanted co-ordination why did they repeal Section 3 (I believe it was) of the 1947 Act and replace it by Section 25 of the 1953 Act, which lists in five categories the duties of the Commission? In none of them was there a single mention of a co-ordinated transport system, or of the facilities and capacities of the transport industry in this country being looked at as a whole.

The characteristic of transport over these years, which has culminated in the present situation that is getting worse and worse, is the pure laissez-faire philosophy, freedom as in the jungle, with profitability as the sole criterion. In fact, we have heard again and again that what matters is whether a thing shows a profit or a loss, not whether it contributes to the well-being of the community or not. Logically, with that philosophy we shall come to a situation where there will be no public transport facilities except where somebody can make money out of them, where a profit can be made. It will depend not on whether people want the transport or facilities for movement, but purely on whether it is going to make a profit.

A debate on the question of whether transport should be a public service or a commercial venture would take a long time, and probably your Lordships' House is not the place for it. But we maintain—and my noble friend who moved this Motion put it very clearly—that there is a need for planning on a national scale. My Lords, I should like to enlarge on that; and, if I may say so, there is no lack of authoritative opinion that I can quote. First of all, the reason why the Government of which my noble friend was a member introduced the Transport Act of 1947 was not, as the noble Lord, Lord Chesham, said, because of any doctrinaire Socialist thinking: it was carrying out the recommendations of a series of expert inquiries and Commissions. Moreover, it was in line with the opinion of the great majority of those expert in economics and public transport. So there was all that weight of technical and expert opinion long ago.

To come now to more recent times, as the opinions of my noble friends in my Party on this subject are well enough known, I will quote only from non-Party or from all-Party sources. The first one, of course, is the Report of the Select Committee which, in paragraph 335, referring to the period since the 1953 Transport Act, says: In the competition that then ensued, the functioning of the railways did not have to be regulated for any needs of strategy. Nor, it seems, was there an attempt to co-ordinate, in any hard and fast way, the development of national transport resources; capital invest-ment,"— and here I would say that the noble Lord, Lord Chesham, mentioned capital investment as one of the instruments for carrying out the policy of co-ordination— whether in a road or in a railway project, was considered in each individual case on its own merits, including the amount of public pressure for it. There was no national planning of how the competition should develop;… Another authority is Mr. Geoffrey Wilson, who I understand is Chairman of the Transport Committee of the Conservative Party in Parliament. He wrote a pamphlet on transport in which he said: The … transport crisis…is so great that it is urgently necessary to survey the present distribution of passengers and freight, particularly between road and rail; to consider the economic and social consequences of the way our transport facilities are at present being employed, and to study how more economic and effective use could be made of them. In our small, overcrowded and heavily built-up little island, with its agricultural land of exceptionally high value, the advisability of making the best use of existing transport facilities before spending money on additional ones is obvious ". Then, my Lords, several of your Lordships will remember a letter in The Times from a former Conservative Minister, Mr. Molson—a most forthright and positive letter, advocating exactly this. Finally, I must quote a Member of your Lordships' House, the noble and gallant Field Marshal, Lord Montgomery of Alamein, who was quoted in the paper a year ago as follows: On the subject of transport in Britain, Lord Montgomery advocated a master plan, embracing all forms of transport, to solve the national needs". There is a bit more about the roads being jammed; about lorries carrying stuff which should go by rail, and the railways probably carrying some stuff which is better suited to road. The report then goes on to quote the noble Lord as saying: Meanwhile life is completely hellish for the private motorists, and will get worse". He ended up by saying: … it ought to be Planned, and planned comprehensively, so that the community is given the best and most economic system". My Lords, it is not a field that can be thrown open to private enterprise. That surely must be agreed by everyone. It has been agreed, in fact, for the last 30 years, since successive Governments of all political Parties have passed Acts of Parliament regulating the competition. Everybody recognises that it cannot be unlimited. It is an essential; it is part of the furniture of our civilisation. One should think of the capital invested in it. In 1948, the Transport Commission took over assets valued at £1,700 million. The present value of the capital investment in all means of transport may have been calculated, and I see that a figure of £3,685 million has been mentioned in the Financial Times. I should suspect, however, that the figure may be much more than that, when all means of transport are taken into account.

Bearing in mind that there is that huge investment, is it not sound economics that capital investment which is not producing its proper revenue, the interest on it, is a dead loss? The community suffers when the capital investment is not being used to its capacity. And that is what we have at the moment, is it not? Our railway system is not being used to its full capacity; the coastal shipping and the ports are not being used to their full capacity—in fact, many of them are dying; and there is a waterways system which is largely derelict, but a proportion of which could still perform a useful function in the economy. On the other hand, we have this enormous motor industry which is absorbing new capital investment at a tremendous rate; which is debouching on to a road system that has never been adequate and is getting more congested every day. Somebody has calculated that the loss due to road congestion is now some £500 million a year, and likely to rise very rapidly.

Then, my Lords, we have air services which are already, I think, competing with the railways for long-distance passenger traffic; and we have what we were talking about only a week or so ago—the pipelines which are beginning to come in, and which will take some of the bulk traffic, both from road and from rail. Finally, there is a form of transport that is generally forgotten, and that is the electricity grid. We have grown up with this means of sending power from one place to another along a wire, but power stations are now beginning to be sited on coalfields, so there will no longer be the need to transport coal, and there will be that much traffic taken off the existing transport system, principally the existing railways.

If we are to avoid wholesale waste of resources, it seems to me that we need to make sure that we provide facilities for transportation adequate for what the country needs, looking ahead 20 or 30 years—because it takes that time to change or improve or develop the system. The Government, however, are not in a position to provide adequate facilities, because they have not the machinery for so doing. What is needed, surely, is, first of all, an economic intelligence staff—a staff of people to find out what are the needs of transportation; what commodities and what people need moving from point to point; what is their point of origin and point of destination; what is the volume of the traffic; what is its flow, whether it is regular, how dense it is and whether it is seasonal. Until you know what the demand is, you cannot possibly say whether a modernisation of a railway line is going to be a good thing or not. You cannot say whether a motor road is a good thing or not unless you know where the traffic wants to go. Therefore, you want an intelligence staff. I wonder whether such a staff exists in the Ministry. The Select Committee, your Lordships will remember, found that that department of the Ministry of Transport was not considered strong enough for its job, even at present; and I should very much doubt whether it is capable of a completely new investigation of the sort I have in mind.

After your intelligence staff you must have a planning staff, and an economic planning staff has to decide what demand there is for different methods of transport and what means are the most suitable and efficient for moving different types of traffic. That must be done at the least cost—and by "cost" I do not necessarily mean balance sheet cost or profit and loss cost; I mean the cost to the community. Having got your planners you must have some control machinery to try to guide the traffic into the channels to which it is most suited. Those methods could be direct or indirect. Noble Lords opposite would clearly prefer indirect methods. There are many methocls—such as tariffs or control of the freight charges, and so on—by which traffic can he attracted to each form of transportation. I suppose that we hoped in 1947 that the Transport Commission, when they were set up, would do just that. I know that my noble friend and his colleagues never claimed infallibility; in fact, he said so himself this afternoon. No doubt as experience was gained after the nationalisation of transport came into effect there would have been modifications in the structure, the powers, and so on, of the Commission. In fact, by now I should not be surprised if a Labour Government would not have decided that coastal shipping and air services should also be included in the public transport system.

The Transport Commission, my Lords, really have done their best. Right at the beginning, in their 1950 Report, they had a most clear and well-thought-out list of principles to guide the allocation of traffic between one method and another. They laid down the characteristics of traffic which was best moved by rail in trainloads, such as bulk material like coal, cement, and so on. Certain things, such as small consignments needing door-to-door delivery, and irregular consignments, were better carried by road transport; other articles, like bulk cargoes with destinations at the docks and waterway terminals, wore best carried by the waterways. That was all worked out in 1950 and, I fancy, has been the policy guiding the Transport Commission ever since. But they had not the powers to implement this policy, first of all because the road haulage element of the Commission was largely removed within a very few years of its coming into being, and then because of the changing policies of Governments. The Report of the British Transport Commission for last year states: One important purpose of the Commission in recent years has been to create an organisation which can most effectively co-ordinate the various forms of transport which have been vested in item together with these ancillary undertakings, and thus administer a comprehensive modern transport system suited to the nation's needs. The Commission, my Lords, are doing their best, but the Government have the last word; and what are the Government doing? The Minister, a short time ago in a debate in another place, raised some people's hopes, I think, by saying: I have, therefore, set up a committee—a compact study group, as it were—under my own chairmanship to consider what sort of and how big a railway system we need… The Minister went on to say: We shall not only look at railway modernisation projects, but also try to satisfy ourselves about the modernisation programme as a whole". His Under-Secretary, winding up the debate, was more specific and said that this compact Study Group is a working group. He said: In the long term, it will be considering the fundamental question of the size and shape, not only of the railways, but of the transport system as a whole over the next 25 years". I hope that that means that the right honourable gentleman really has in mind to co-ordinate and to look at the whole of the transport resources of the country in the long term and in the whole; but I cannot help having my doubts, when so much is said about the private motorist and when we hear that everything must be left to the free play of the consumers' wishes. One suspects that coordination in the national interest will take second place, and that the first place will go to this do-it-yourself transport (as I have heard it described)— private cars and "C" licence vehicles, I hope that when he winds up, the noble Viscount will reassure those of us who have urged national planning that the Minister really is determined to take the big view.

5.1 p.m.

LORD HAWKE

My Lords, although I did not agree with all that the said, I thought that we had a magnificent speech from the noble Lord who put down the Motion and the best reply on transport I have ever heard my noble friend the Parliamentary Secretary give in this House. The burden of the Opposition's argument to-day is that old chimera of integration. I thought that the noble Lord, Lord Morrison of Lambeth, was more pragmatic in his approach than the noble Earl, Lord Lucan. At one stage the noble Lord, Lord Morrison of Lambeth, was working round precious near to what I believe would probably have been the right solution in 1947—which was, State ownership of assets and their private operation—whereas the noble Earl, Lord Lucan, was out for 100 per cent. planning. We had a delightful maiden speech from the noble Earl, Lord Baldwin of Bewdley. I hope that he will give us many more of these speeches in philosophic vein. I think that some of his speech would have been very pleasantly received by the late Mahatma Gandhi. The progress of the noble Earl, Lord Lucan, was from research to planning and thus to the directors, who had to say what transport was used for what.

THE EARL OF LUCAN

My Lords, may I correct the noble Lord? I did not say that. I said: "what transport was provided for what".

LORD HAWKE

My Lords, in that event, I do not see that planning has any purpose at all. It would merely mean that surplus capacity would exist and there would be no re-orientation towards those parts of the system which the noble Lord, Lord Morrison of Lambeth, would like to see more fully occupied. And directly you get on to direction, you get into appalling difficulties. The whole problem is so vast that I believe that integration, though it sounds a wonderful goal, it is too big for human administration. Lord Baldwin of Bewdley remarked about the complexity of modern life. An integrated traffic plan for the whole of the British Isles, involving millions of ton-miles per day, is too big, I submit, for any human organisation to run.

The railways have inherited three handicaps: human, psychological and material. The human is that they have been a contracting industry for many years and therefore the better and thrusting types of young men have not tended to go into the railways, at any rate not during this generation, and the result is that at the top there are not the tycoons who are to be found in private industry to-day. Psychologically, they had an unfortunate background of monopoly. In the olden days, it was the railwaymen who always knew best. They probably did, but the general public tended to be regarded as rather a nuisance, as something spoiling the fun. I knew two general managers who in their spare time played with toy trains. One of them pretended that they belonged to his son; the other unashamedly confessed that they were his own toys. But they never had to sell their wares; and the railways are now having to learn to do so the hard way.

On the material side, they have had a big handicap to overcome because not only were the railways run down as the result of the war but there has also been a revolution in transport methods since. Modernisation means a great deal more than providing new motive power. It means providing completely new methods of handling goods, marshalling yards, goods depots and rolling stock. But I do not think that the public realises how much has been done in this direction. The railways' attitude has been far too apologetic. They tend to apologise about offering an inferior service on lines which are being modernised, when they ought to be saying, "It is a miracle you have a service at all, considering the type of engineering works we have to carry out on this line."

So far the progress of modernisation has not been unsatisfactory. To my mind, they have had two bad setbacks, over the brake and coupling mix-up and in their inability to find a good riding bogie for the new electrified lines. I think that the latter will probably become cured in time, but they seem to have got into a bog on the question of brakes and buffing gear. I believe it would be fatal to call a halt now, because there is such a long way to go still.

My noble friend the Parliamentary Secretary gave to your Lordships figures that I should otherwise have given. What chance is there of bridging this gap of £110 million? That is the 64,000 dollar question. I should estimate that there is a reasonable chance of the railways increasing their receipts by 10 per cent. That would reduce the gap to £60 million odd. Somehow or other working expenses have to come down by something of that order. The profitable operation of the railways stands or falls by the pay roll. There is some reticence in the annual accounts about the total wage and salary bill. Reconstructing it from what evidence one can find in odd places, one gets the impression that 518,000 railwaymen are getting on the average somewhere in the neighbourhood of £600 to £650 per annum each out of receipts of about £900 per annum per head. That is an impossibly low ratio. You cannot run a railway profitably when the wages bill is more than two-thirds of the total receipts, and we must rely on modernisation to fill a large portion of this gap.

This means that a smaller railway system will have to be run by considerably fewer men than are employed at the present, something perhaps in the order of 430,000 against the present 518,000. There is a considerable run-down of staff every year. There need be no redundancy, but it will need transfers and retraining, which the Commission are doing. In fact, in paragraph 3 of Command 103 the Commission say definitely that their objective is a smaller and better staff. I do not see that that need put any insuperable hardships on the railwaymen, for whom we all have the greatest respect: they will be sure of their jobs, though not necessarily of doing exactly the same job as they are doing at the moment. But it will undoubtedly involve hardship to the trade union leaders, who will see their armies considerably shrink and, correspondingly, their voting strength at the various conferences. But we cannot really see whether this goal is attainable until the modernisation is through, We cannot expect full results in attracting traffic back from the roads until the railways can offer the full results of the modernisation.

I was glad to meet not long ago a senior executive of one of the biggest food manufacturers in the country, who assured me that his firm did all their trunking by rail, because they found it much cheaper and more convenient. When speed, punctuality and, above all, absolute reliability can be offered, I hope that others will come over, too. The Times in an article to-day stresses the necessity for speed for goods traffic. Reasonable speed is, of course, necessary, but I believe that reliability is much the more important thing, because the despatches of goods is much more concerned to make dead certain that his despatch gets to the other end in 24 hours' time than he is to see that it may get there in 20 hours' time. In my view, it is reliability that is the vital thing to attract hack traffic from the roads. Of course, if the railways succeed, it will relieve the roads and it will relieve the taxpayer; but it cannot be done unless we go on with the modernization, concentrating on that part of it which will lead to the maximum saving in manpower.

With regard to expenditure, expenditure on railway works is, I should say, likely to have a smaller volume of imports involved in it than much other expenditure, and certainly less than our own personal expenditure. Expenditure on successful modernisation ought to bring in export trade, because this is one of our traditional export lines and there is a great deal of railway work to be done in the world if we can only manage to give the necessary credits to the rather impecunious people who want to buy the material. But streamlining is going to bring problems of its own. We have no time to deal, for instance, with local buses. That, I believe, is a grave problem to-day. Local buses are tending to be more and more unprofitable owing to the wider use of private transport, and this will be aggravated by the closing down of branch lines.

I cannot agree with the noble Lord, Lord Morrison of Lambeth, that every asset of the British Transport Commission is so sacred that it must not be sold or leased to somebody who can exploit it better than they cart. I should have thought that it would be sound business to start a careful examination of the land in the possession of the system, because I am convinced that their possessions of land are far greater than they are ever likely to use in the future. Not only from the national point of view, with the shortage of building land for all purposes, but also from the financial point of view, they would be wise to sell or lease on long leases all that they can spare. I think the criterion of "spare" must be considerably more stringent than in the past, because railwaymen have a habit of saying that a piece of land was intended for the enlargement of this, that and the other, and it might come in handy again one day.

I feel that we shall also want better cost accounting, and that raises the old hare of regional accounting. I was one of those who were strong advocates of regional accounting when one of the Acts was being passed. At that time there was a fairly valid objection, in that it would be a waste of manpower; but I understand that to-day with these computing machines one can make calculations at such a speed that the manpower requirements would be very much reduced. But when it comes to a question of whether any piece of the railway pays, it is very difficult to get anything more than vague generalities. That is why I feel some better form of cost accounting is necessary. For instance, in paragraph 84 of Cmnd. 813 the Commission say they believe that the intensive surburban services present a problem financially. What on earth does that mean? Every bit of railway presents a problem financially. Are these suburban services paying or not? If the Commission do not know, is it not time that they tried to put in an accounting system that would tell them? And if they, are not paying, then the commuters who use them will have to pay more money to travel on them. Let us see the calculations and the basis on which they are made. I know from my own experience that in railways, if you want to make a piece of railway lose or a piece of railway gain, you send for your chief accountant and you say, "Let us do the necessary"; and the figures are on your table before very long.

The introduction of diesel multiple units has been most encouraging. They offer great advantages over road services, particularly where it is not necessary for the passenger to have the use of a vehicle at the other end of his travel. As regards road services, apart from sight-seeing, time spent on the road is an absolute waste of time, whereas time spent in a railway train is not necessarily so. I do a lot of my work in a railway train. Businessmen are informed by the advertisements that there are certain papers the top people read, and they have time to read them in the train. I often wonder how those who drive to their offices in motor cars manage to keep up with affairs going on in the world at large. The diesel rail-cars have been useful in places, and they certainly can be much more frequent than the rural buses on the less frequented routes. But I suggest that their profitability depends a good deal on whether they run passengers to a terminal which is in a shopping centre.

Finally, in The Times of December 5 there was an interesting interview with an eminent United States engineer. I agree with his opinions; but I wonder whether he has taken into account, when he is advocating the continuance of steam until it wears out, the difficulties and expense of maintaining two sets of repair facilities at the same time. He said that we must press on with the electrification, and I suggest that he is right.

5.20 p.m.

LORD STONHAM

My Lords, I agreed with a great deal of what the noble Lord, Lord Hawke, has said, from the depth of his considerable experience, but I agreed particularly with his description of the speech of my noble friend Lord Morrison of Lambeth as magnificent. I think we have every reason to be grateful to my noble friend. As I listened to him, I thought that he was back again in his form of fifteen years ago in the vigour and breadth of his speech; and to me that was a most welcome sign. I disagreed with the noble Lord, Lord Hawke, however, when he thought that the reply from his noble friend Lord Chesham was the best reply he has given on transport in this House. The noble Lord, Lord Chesham, in my view, spoke in his usual engaging and vigorous manner for 33 minutes without saying anything at all. Perhaps that is what the noble Lord, Lord Hawke, meant.

I think that, before I get too controversial, I should declare an interest—although perhaps it may not be necessary, as it is purely an honorary position—in that I am Chairman of the Road and Rail Association. It is an all-Party, non-partisan body, which has the principal aim of ensuring a better understanding of transport problems, particularly the question of freight. We deplore all controversy, setting road against rail. In our view, it is a question of road and rail, because the country needs both a first-class road system and a completely modernised rail system. We regard it as contrary to the national interest that, while the roads become increasingly choked with traffic, the railways' freight services are only 75 per cent. used. In our view, every possible encouragement should be given to the transport of long-distance bulk freight by rail, rather than by road, because an essential element in the relief of road congestion is the pro- vision of a first-class modernised railway network.

It is indeed difficult to understand the view, to which my noble friend Lord Morrison of Lambeth referred, that if such traffic is, by whatever method, diverted back to the railways, it will not relieve congestion on the roads. We feel that road and rail should in fact be complementary to each other, and that it is false economy to rob the capital allocations of one in order to speed up the development of the other. We support, of course, the increased investment allocations for roads, and agree that they should be settled several years in advance, and five years if possible. But for the same reason we reject the stupidity of making railway investment subject to an annual reappraisal. If it is right for one, as indeed it must be, then it must be right for the other. Above all, we deplore the constant tinkering about with the railways on the advice of one Committee after another, public and private; not only because it plays havoc with approved plans and investment programmes, but because—and in my view this is the most important, the most dangerous and even the most tragic element in the present situation—it is steadily destroying the morale of the little more than 500,000 men and women still remaining in the employ of British Railways.

Surely no one will dispute, or indeed has disputed, that an efficient railway system is essential to the country's prosperity. Yet railwaymen are convinced that, because of what they regard as doctrinaire prejudice against any publicly-owned undertaking, the Minister of Transport is determined to destroy their industry. It is no use the noble Lord, Lord Chesham, saying that the Minister's utterances and deeds do not constantly lend colour to that view. He himself, in the tenor of his speech, the figures he used, and the way he used them, did exactly the same thing. There is the example of the noble Lord's reference to the expenditure of £75½ million on roads in 1960, and the £160 million spent on railways. Those figures are not comparable; and the noble Lord knows it very well indeed. In the debate in another place, a figure of £1.60 million expenditure for electrification was compared with the cost of the M.1, when in fact the £160 million for electrification includes nearly £100 million for rolling stock and for signalling arrangements. I have no doubt that out of the £160 million for 1960 nearly £100 million would indeed be for rolling stock. We might just as well compare that with the cost of roads, £75½ million plus the cost of all the new motor transport that goes on it. That would be grossly unfair, but they are the two comparable figures.

I ask the noble Lord, when he reads his speech again, to realise that railwaymen know these facts, and that when they read a Minister's speech slurring over the truth, as it were--to put it no higher than that—they have a feeling that the Government are against them. Only last week representatives of the three railway unions told the Minister, according to the Press, that they were shocked and disgusted at his attitude to their industry and at the alarming effect it was having on rail staffs. Many members of the Party opposite are equally concerned, as I know very well. I will not repeat any private conversations, but recently, during the debate in another place, Sir Toby Low, the Chairman of the Select Committee said: The crisis in the railways today is not just one of money and machinery. It is one of morale and confidence among the men. I know that this is the case, because through travelling a great deal on the railways I meet many railway personnel, and despite the recent wage increase, railwaymen, particularly younger men, are leaving the service in large numbers. And who can blame them? They have to do constant shift work; they are badly paid, compared with other industries, and are constantly told, by implication and otherwise, that they and their industry are no good.

If you talk to a senior man, an inspector or senior signalman on the railway, you will probably find that he is an older man. If you ask him, "Why are you staying?" He will say, "I am over 45: I cannot go out into another job." But the younger men are going. I spent ten hours in trains on Sunday going to Taunton and back. I went to tell them how to cure the floods there, and I got involved in floods myself. I talked to quite a few railwaymen on this question, and they are extremely unhappy about it. And unless there is a rapid improvement in their conditions and in the Government's attitude—that is the main thing—the railways will become unworkable. It will not be the Government deciding the future of the railways—the men will themselves decide, because they think there is no future in the railways for them.

This disquiet is not confined to the rank and file. There is widespread unhappiness among the seniors. There is no room at the top and no seat on the Board for a career railwayman, however brilliant he may be. I do not say that in that respect the Party opposite are any more culpable than we are; but in my view it is a serious defect in the industry. These men, to whom the noble Earl, Lord Baldwin of Bewdley, in a very significant maiden speech, referred in the most moving terms, see their efforts constantly denigrated and misrepresented, and their plans frustrated, cut or cancelled by the very Ministers they think should support them. I feel that this question of manpower, of putting heart back into the men, is perhaps the most important question of all. I feel that if the Minister of Transport cannot decide, without appointing any more Committees, the size and functions of the railways, and the means of ensuring that those functions are efficiently discharged, then he should follow the advice tendered to him by my noble friend.

We have heard references to the Stedeford Committee or the Advisory Group, but I feel that the civil servants engaged in the Ministry of Transport have been working on a desperate and almost impossible task to produce a White Paper which will conceal the complete contradiction between the Government's private enterprise prejudices and the stark facts of the transport situation. Possibly that is one reason why the Stedeford Committee's report is not to be published. But certainly, as I pointed out in an earlier intervention this afternoon, the noble Lord, Lord Chesham, was unable to deny last week that it was at least partly the report of this secret Committee which has prompted the Government to jettison the 1955 plan, which had been approved, and to put in its place a four-year plan of which we as yet know nothing.

LORD CHESHAM

I am sorry to interrupt the noble Lord, but really I cannot allow him to say that. He says that I said nothing in my speech, but I think he must have said that because he was not listening. I explained in the course of my speech that my right honourable friend had agreed with the British Transport Commission that there should be a slow-up in the modernisation before this Group was even set up. I think the noble Lord should be fair about it.

LORD STONHAM

I am trying to be fair, and I assure the noble Lord that I listened most carefully to his speech. What I was saying was that I intervened this afternoon to point out that on an earlier occasion I had pressed him on this very point and he did admit—it is in columns 1127–8 of the OFFICIAL REPORT of November 30, if he likes to look up his own words—that he said then what I have now said. On the advice of these distinguished men—or partly on their advice—headed by Sir Ivan Stedeford, none of whom, so far as I am aware, has any intimate acquaintanceship with railways, we are to have this radical reorganisation of this industry. And neither the trade unions nor Parliament—no one, except under certain limited conditions, presumably, the British Transport Commission, has a real opportunity of examining it. As it were, these men have looked at the industry through a telescope, and the Government are in part accepting their advice in preference to that of men who have spent their lives in the industry. It would be just as logical for the Astronomer Royal to accept the discovery of a new planet on the evidence of a man on Brighton pier armed with a telescope and a copy of Old Moore's Almanack. That is the way that many experienced men in the railway industry see it.

I accept what the noble Lord, Lord Hawke said: that there must be a reduction in staffs, though there need not be redundancies; but it has to be planned properly, to march with modernisation of course, and I was glad to hear his wholehearted support of that. The second priority arises from a statement from the Government (and in part I think we have had it from the noble Lord this afternoon) that they are to continue modernisation, that the present slowing down—not halt, but slowing down—has been agreed by the British Transport Commission while the present considerations are taking place. Obviously, if the considerations are taking place there may be some modifications of the original plans. But I do hope that the Government, when their considerations are complete, will say that the new plan can proceed on, say, a five-year basis and that they will not say then that the plans are still subject to annual reappraisal or to an annual capital allocation. Everyone is aware that it is impossible to put into operation a great plan of this kind on a twelve-month basis. Some of the equipment takes a great deal longer than twelve months to supply.

We know that modernisation does beyond dispute solve two major problems. It helps the manpower situation by reducing the number of jobs and making them more attractive, and it shows a good return on the capital expended, which brings the achievement of viability closer. I feel, in particular, that it would be quite wrong not to complete the major electrification plans already started; for example, the Euston—Manchester line. The Crewe—Manchester—Liverpool section has been completed at a cost of around £40 million, and the value will be very largely lost unless the whole job is completed. That particular line is one of the busiest in the world, and unquestionably, in heavy traffic conditions, electrification pays overwhelmingly. It is a significant confirmation of this particular fact that Sweden, which has some 50 per cent. of her railways electrified, is the only busy industrial country in the world which can manage without a public rail subsidy or does not need a public rail subsidy.

It may well be that after their long deliberations the Government have decided that changed circumstances have left British Railways with a top-heavy structure which has to be pruned; and if that is the case, and it is established, I am sure that everyone would support it. No one wants us to continue with a type of machine which was built up in days when there was an utterly different situation and when the industry was a different size, and it surely would be false economy to delay modernisation. The noble Lord, Lord Chesham, made some observations and quoted some figures about the situation in which the railways find themselves. It was the 1953 Act which started this rot. In 1953 the railways were still earning a surplus, and noble Lords opposite must accept a major share of responsibility for the present position. But the receipts are up this year, 1960. They are, I think, £23 million up on the same period, the first ten months, of 1959. Of course, I do not know the effect of the increased wage awards this year, but it is certain, comparing like with like, that the railways have done better and have benefited from modernisation.

It has been suggested in the newspapers (although it has not been dealt with in the debate this afternoon) that the Government intend, or have some intention to take away from the Transport Commission all its ancillary undertakings. I hope that that is untrue and, if it is untrue, that the noble and learned Viscount will deny it to-night.

VISCOUNT HAILSHAM

My Lords, I did not catch the noble Lord's remark. My noble friend was saying something to me. If he would repeat it, I should be obliged.

LORD STONHAM

I was saying that it had been suggested in the Press that the Government intend to take away from the Transport Commission some, if not all, of the ancillary undertakings, and I expressed the hope that that was untrue and that if it was the noble and learned Viscount would be in a position to-night to deny it. I feel that a good case can be made out for their retention. They were considered necessary and suitable for the railways when they were privately owned, and they are necessary now. Except for inland waterways, they are all earning surpluses, and I feel that it would be fraudulent to deprive the taxpayers of those enterprises which are earning profits and leave them with the losses, and then blame the Transport Commission for not paying its way.

Finally, I should like to say a word on the subject which is at the heart of the whole complex problem of road and rail—that is, the sharing of the nation's freight account. I think that is the crux of the whole situation of whether the railways are ever going to pay. Mr. John Hay, the Parliamentary Secretary to the Ministry of Transport said recently that competition in transport gives flexibility". That, of course, is true. But it presupposes that the railways are free to compete on equal terms; and that is far from true. The noble Lord, Lord Hawke, said just now that if the suburban services are not paying the commuters must pay. The railways are not always in a position to charge the commuters more for the service, even if they think it is obviously and necessarily desirable.

LORD HAWKE

My Lords, perhaps I may interrupt the noble Lord for one moment. Surely the machinery exists. The railways have a certain latitude within themselves, and if they want more they go to the Minister, and there is a court of inquiry, and so on.

LORD STONHAM

Yes; but the noble Lord, with his great knowledge of this subject, will be aware not merely that that takes a long time, but also that the Transport Commission do not always get what they want—in fact, very seldom do they get what they want in that matter. It is no good saying that the Transport Commission should do this or that when they have not the power to do it, and it is no good pretending that they are free agents in this matter.

LORD LATHAM

My Lords, the noble Lord opposite will, I am sure, agree that even if the Transport Tribunal were to award an increase in freight charges, there is no certainty that the Government would permit the application of the higher rates.

LORD HAWKE

My Lords, I understand that my next season ticket is going to cost a certain amount more. Has that matter to go to the Minister? I think that is done within the railways' own ceiling, and I believe that there is still some margin left within that ceiling.

LORD STONHAM

It is within the recollection of the House that not so long ago the railways said that they could not pay, not the last but an earlier wage increase; but, after consultation with the Government, they were told that they must. It may be that we, and the country as a whole, generally supported the increase in wages, but the Commission did not get an increase of fares. A large part of the loss they made last year was for that reason. The point that I was quoting was from the junior Minister who said that competition gives flexibility. That is right and true in many respects. That is what we all want to see. But it is no good calling it competition, let alone fair competition, if one partner competes with one leg or hand tied.

The Minister also said: We must seek to accommodate public demands and needs and not to direct them. This inevitably means that we should not seek artificially to stem the move to private transport—on the contrary, it means that we must improve the road system as quickly as we can to accommodate it. Since there will always be traffic which will go more efficiently and economically by rail, we must modernise our railways. But he concluded: We reject the concept of 'integration', but in its place we seek co-ordination of transport. When the noble Lord, Lord Chesham, reached that stage in his speech when he mentioned co-ordination, I thought that at last we were going to hear what it means. My noble friend Lord Morrison of Lambeth used the two words "coordination" and "integration" as if they meant much the same thing. He said that we should use both to the greatest effect. I always thought that integration and coordination had something in common. But the noble Lord, Lord Chesham, said this—and I took him down verbatim: The Government think that each form of transport should have freedom to develop in accordance with the contribution it is best fitted to make in the economic field. How much I agree with a great deal of that! But then he answered the question, "How do you do it—with freedom of consumer choice?" by saying that it was by investment. In other words, the only thing which is going to provide us with co-ordination is an investment policy. I want to know exactly how that is going to happen.

When I hear the word "co-ordination" it sounds exactly what most of us want—certainly what the Road and Rail Association stand for. But what do the Government really mean by it? How is it to be applied? If we are not to direct, to tax, to check, or even persuade, how, and on what terms are we to co-ordinate? Are we to give advice to or make rules as to the type of freight which should be carried by both road and rail? Does co-ordination imply any sort of restriction on either of them? Surely you cannot co-ordinate without at least some kind of indirect control. I hope that we shall be told tonight, not merely that the co-ordination is going to be an investment policy but whether the Government really mean co-ordination in the generally accepted sense of the term, or whether the use by the Minister of that word was mere rhetoric.

It must surely be agreed that, just as the integration planned in the 1947 Act failed because it was confined to -public transport, so, equally, has the free competition of the 1953 Act failed to assure our economic and social needs. We must find a middle way, and I hope it will prove to be what I understand by co-ordination; and I trust that that means that the Government have found a way to channel to road and rail the freight that each is best equipped to carry. That is what the country wants, and that is what the transport system needs.

I would suggest this broad division, but not the means of implementing it. For short hauls and round journeys—journeys where freight is delivered at a number of different stops and the vehicle is never empty until it ends its run—road transport must surely be more convenient and cheaper than transport by rail; and as many as possible of that kind of load should go by road. But where large quantities and bulky consignments of goods have to go long distances, it must surely be cheaper and better to send them by rail, always assuming that the rail service is as good as it should be, and as it will be if our modernisation plans are completed. That is the question which I think the Governrnent have to answer. If our railway service is modernised, then it will provide a good service, and industry will support it on the ground of self-interest, just as the travelling public are supporting the improved new passenger services, in part perhaps in revulsion from the overcrowded condition of the roads.

For the next few years we must be not so much concerned with whether or not the railways pay, but with how much we can pay for the railways. If at the same time we spend wisely, and on a rising scale, on new road construction, then road and rail will help each other. Surely everybody who desires the good of this country (which means all of us) will agree that an efficient transport system requires a carefully thought out plan which, rigorously pursued, will make the fullest use of both road and rail. For that reason I hope that the Government will be able to convince us tonight that we are going to get a plan, and that they really mean something by the word "co-ordination".

LORD CHESHAM

My Lords, before the noble Lord sits down, may I address one small point to him upon which I hesitated to interrupt him? Would he, when he is considering the provision of new roads and improved roads and the modernisation of the railways, think about it, and decide whether or not rolling stock is an integral part of modernisation of the railways; and whether or not new roads and improved roads are for the benefit of existing traffic, and do not of themselves require the provision of one single extra vehicle in order to use them properly?

LORD STONHAM

My Lords, I believe that I dealt with that point. Of course, the noble Lord technically can say that £160 million is to be invested this year in the railways, but it is not fair to put that figure immediately alongside the figure of £75½ million of expenditure on roads, meaning road tracks alone. That is the point. The comparable point I made and I saw the noble Lord raise his eyebrows at it—was the statement by the Parliamentary Secretary to the Ministry of Transport, that it was now certain that the electrification of the London-Midland line would cost about £160 million, two and a half times the expenditure, largely on new construction of roads in 1960–61, or eight times as much as the cost of the M.1. That was not a fair statement. It was not a comparison of like with like, and I think it is below the dignity of a Minister of the Crown to make such statements.

5.50 p.m.

LORD FORBES

My Lords, I am glad that the noble Lord, Lord Morrison of Lambeth, initiated this debate on the present and future problems of transportation. If I may say so, I think his choice of the word "transportation" was a particularly happy one, as was the reference by the noble Lord, Lord Stonham, to the Road and Rail Association. So often in your Lordships' House we have had debates on roads, on railways and on sea transport, and surely it is right that we should look at transport as a whole. The vital question that has to be answered is: how are people and freight going to be moved in this country during the next decade? When that has been decided, and only then, shall we be in a position to foresee the part to be played not only by rail, by road and by sea, but also by other means of transportation, such as pipe movement, which was mentioned recently by the noble Earl, Lord Lucan.

My right honourable friend the Minister of Transport must give a rough overall movement picture before any detailed plans can be worked out by those responsible for our various transport systems. Furthermore, we just cannot afford mistakes or unnecessary duplication. Much of our land, valuable for the production of food, is of necessity lost yearly for the building of houses and the expansion of industry, but we just cannot afford to lose more than is necessary, not even for the movement of goods and people. In this respect the layman might ask whether it is necessary to have a motorway and two main railway lines running between London and Birmingham. I am not suggesting that the various forms of transport should be divided into watertight compartments—far from it. But each form of transport must know where its greatest potential lies and then each will be able to concentrate its maximum effort.

All forms of transport are required, for each has particular advantages. Each is more economic and convenient for certain types of traffic and each must try to encourage traffic that is less suited to other forms of transportation. May I give your Lordships an example of this? I believe we are all agreed that the need for better roads is acute, but I am equally certain that the acuteness of the need is aggravated by the fact that our railways have lost much of the freight movement to the roads just because they did not offer to the customer the correct facilities at a reasonable price. Of course, the possible introduction of the road-railer—something I have myself advocated for several years—may change the situation. But it is a pity that the railways took so long over it and let the valuable movement of so much freight slip out of their grasp; for custom, like friendship, is easy to lose, but once it has been lost is extremely difficult to regain.

May I turn now to the problem of transportation in what I may call the remote areas of our country, where I am bound to say the problem is becoming more acute rather than easier. The British Transport Commission have acted in a normal, businesslike manner in closing down a number of branch lines, and more are due to be closed. But this should not be a matter for the British Transport Commission or for consultative advisory committees; it is a matter to which the Minister and Parliament should attend. I cannot stress too strongly that it is sheer contradiction to spend large sums of money on helping farmers and others to live in remote areas by giving, special agricultural subsidies, water supply grants and a host of other grants such as one reads about in the Government publication Highland Opportunities, if lack of pubic transportation is going to cause depopulation; and that is what is happening.

It is true to say that without adequate public transport people lose their lifeline. Without arteries in the form of public transport the blood will not flow and people cannot live. Many efforts have been made and are being made to encourage small industries to go to such places as Macduff, in the North East of Scotland, so as to relieve unemployment; but the task is made extremely difficult when it is rumoured that the branch line is to be closed. What industrialist is likely to go to the length of setting up an industry if there is possibility that he may then find he cannot conveniently get his raw material or send away his manufactured goods by public transport?

What is the solution to this problem? Surely it is that the British Transport Commission should first, if possible, modify their system of accounting. At present the Region in which traffic originates keeps all the revenue from that traffic, while the cost of that traffic falls upon all the Regions through which it passes. Having rectified their accounting system, the British Transport Commission should then make a list of all branch lines that will not be economic even if modernised. This list should be presented to my right honourable friend the Minister of Transport, who should then decide which lines are to be closed and which should be kept open for social reasons, as a public service. Where lines are being kept open for social reasons the losses of the British Transport Commission must be made good from public funds.

Where lines do not exist or where the Minister decides that the lines must be closed, then, I submit, the roads must be made adequate; and there should be a reduction in the fuel tax. As no boundary line can be drawn exactly round the rail-less area, it is, perhaps, fitting that the concession of a reduction in fuel tax should be elastic to the extent that those just outside the area might find it worth while to go into the area to fill up with fuel. We cannot expect the British Transport Commission to know which lines are vital to the country, either from the social or the defence angle; but just as the Government have a large say in the planning of our trunk roads, why should they not have a say in the planning of our railway lines? I submit that until this system has been adopted no further branch lines should be closed.

To-day we are being continually reminded that our economic survival depends on our ability to export our goods; and perhaps we should do well to remember that, while the quality of our goods is well known throughout the world, other countries will continue to take our goods only if the price to them is competitive. It is ironical, therefore, that often a large percentage of the cost of the finished article exported abroad is the cost of getting the raw material to the factory and the cost of getting the article from the factory to the port. My Lords, the writing is already on the wall concerning our exports. If our prices are high due to heavy transport costs we may well price ourselves out of world markets. To-day world markets are becoming more and more difficult; competition is "cut throat" and we just cannot afford the financial loss arising from the lack of speedier transport within this country. If we are to hold our own in the markets of the world our industries must be given the best possible transport facilities. We have fallen behind many of our competitors abroad in road and rail transport. If we are to continue to compete in world markets we must pull ahead not only by modernising our existing forms of transport but also by introducing new and novel forms.

6.3 p.m.

LORD CITRINE

My Lords, by arrangement through the usual channels and, I hope, by the indulgence of your Lordships' House, I am intervening in this debate although my name is not down on the list of speakers. Several of those who have taken part in the debate have referred to the Plan for the Modernisation and the Re-equipment of British Railways. I propose in my remarks to concentrate my attention entirely upon that Plan and, in particular, on the aspects which deal with railway electrification. As your Lordships will remember, the Plan was first submitted and approved by the Government in October, 1956. In July, 1959, a re-appraisal of the Plan took place with the purpose of speeding up the original Plan, and the revised Plan was again adopted by the Government.

Very soon after, a public statement was made by the Minister of Transport, the effect of which was that certain aspects of the programme, including main-line electrification, were to be submitted for review. A study committee was mentioned, but I think little information was given as to the quality of the committee, as to its experience or its competence to overhaul the Plan which had twice been approved by the Government of the day. I was rather dismayed at that news, because I have long regarded railway electrification, and particularly electrification of the main lines, as a necessary factor in the efficient economy of this country. Twenty-nine years ago the advantages of mainline electrification were displayed by the Weir Committee presided over by Lord Weir and composed of practical railwaymen.

I regard main-line electrification as an essential feature of the Modernisation Plan, and I must emphasise that the Plan was prepared after careful and extended deliberation and consideration by the British Transport Commission. I have never seen any authoritative statement, either that the plan was technically defective or that it was financially weak, or that the financial results would not be obtained. Many people, including myself, had we dealt with this matter publicly would have accused the British Transport Commission of an overcautious approach to this problem of electrification.

We have recently had the benefit of an independent appraisal by a competent consulting engineer which was given publicity in The Times of Monday, December 5. The article is headed "B.T.C. 'Must Not Abandon Rail Electrification Plans '." The consulting engineer, Mr. H. F. Brown, is introduced in the following words: A warning not to abandon electrification plans for British Railways, although the initial cost is high, was given yesterday by an American consulting engineer, Mr. H. F. Brown, who has worked for 42 years for one of the busiest railway lines in the United States. I think that some attention ought to be paid to the length of experience of this gentleman, which may possibly rival the experience of those who are forming the so-called study group to look at the re-equipment Plan. He is quoted by The Times as follows: It was his experience that electric motive power was the power to use for dense traffic lines such as that from London to Liverpool, although where traffic was less dense the initial high investment was not an economic proposition. That is common ground. The article continues: He said that the railway for which he had worked, the New York, New Haven and Hartford line, had made the mistake of going back to diesel power and that after a hearing before the Interstate Commerce Commission for the rehabilitation of this railway, one of the main recommendations had been to return as rapidly as possible to electric locomotives. However, if railway electrification was to be increased it must be done with power directly from the national network at commercial frequency. It was obvious from what he had seen that the British Transport Commission had made careful studies of the latest types of electric traction and was adopting the most modern system. The reason for my intervention is that it has come to my notice from quite well-informed quarters that it is being persistently rumoured that the London to Crewe main-line electrification scheme is to be abandoned. I listened with interest, as I always do, to the noble Lord, Lord Chesham, who advised us all to wait for the White Paper and who further said—or I understood him to say—that there would be no major change in the Modernisation Plan. Well, if it was his personal assurance upon which I had to rely I would accept it without any shadow of doubt; but he did not—probably because he was unable to at this stage—define what is a major change, and, as we all know, language of that kind is capable of many different interpretations.

It may be said, "Why are you paying any attention to rumour?" In my life I have seen many instances of rumour proving subsequently to be the fact, particularly when it refers to Government plans or White Papers or documents of that kind. There have been many instances, and the latest I can recall is that of the Monckton Commission, where the recommendations were clearly foreshadowed days in advance of the actual publication of the Report. So I think we are justified in taking some notice, particularly when I place trust in the sources of the information which has come to me. When the White Paper comes along, as it may do in the very near future, it may be too late to do anything, because Governments have a habit of endeavouring to maintain the proposals in any White Paper that is published, end are not, perhaps, so amenable to argument and reason as before publication of the White Paper. Reference has been made by several speakers to the need for a five-year plan, both technically and financially, and I can say from my experience in one of the nationalised industries that I have felt that the absence of such a plan was one of the greatest weaknesses in the makeup of our economic life so far as it affected those large industries.

In the debate on the Address in reply to the gracious Speech, on November 8 I drew attention to the serious effects which postponement of the plan for main-line electrification would have on industry. Not only would the country be deprived of the benefits of the best features of the plan itself, but I was thinking particularly of the effect upon firms and their employees engaged on the work. I have had a close acquaintance with the British electrical manufacturing industry over the last thirteen or fourteen years, and I say without fear of contra- diction that there is no industry in this country whose leaders possess a higher sense of public duty and a greater readiness to afford co-operation than those engaged in the electricity industry. It is a modern industry in every sense of the term. It is not only that industry which will have to bear the effects, but right through, from the raw materials to the whole host of ancillary industries and trades, the effect of postponement or abandonment of the plan is bound to be felt.

In the course of trying to equip themselves to meet the large demands on them by the Modernisation Plan, firms engaged additional technical staff, extended their manufacturing capacity, and in many other ways tried to ensure that they would not be lacking when the time came for them to engage in electrification. And I think that those who have taken the slightest trouble to study the progress made on the Manchester—Crewe and the Liverpool—Crewe electrification must realise how great the effort has been and how worthily the task has been discharged. Such firms are unable to maintain indefinitely technical staff when there is no work for them to do and when the work they anticipated doing has not come forward. The moral effects of postponement or cancellation (because either is tremendously serious) cannot really be calculated. All this suggestion and this uncertainty, right in the middle of a speed-up in the electrification plans!

British electrical manufacturing (and I speak as one who is completely disinterested from any financial point of view; I have never held a share in a private company in my life, whether electrical or otherwise, so I am not speaking from any such motive as that) is suffering from an accumulation of causes, all of which make for restricted activity. The hire-purchase restrictions might at first sight be thought to have nothing to do with firms who are engaged upon main-line electrification, but it happens that those firms are also engaged in manufacturing equipment of a domestic character, which itself is greatly restricted by the present regulations.

Similarly, in regard to nuclear power. When the nuclear power programme was originally formulated—and I was right in the midst of the discussions on that matter—a tremendous effort was made to try to push on with the work, because it was at that time felt that, without the ability to attain a programme of something like 6,000 megawatts by 1965, it would be impossible for us to secure the necessary fuel without upsetting seriously the balance of payments. Then, as your Lordships all know, that programme was slowed down: and when I say "slowed down", it is not just a case of, as it were, carrying on the same labour force and the same capital commitments over a period of several years: there are other consequences besides that. And I say without any shadow of doubt that the hire-purchase restrictions, the postponement of orders, first in respect of nuclear power and now on mainline electrification, must all have a cumulative and serious effect.

The noble Lord who preceded me, Lord Forbes, referred to the effect on exports. We have been told in this House (and I think most of us know it) that the economy of this country is on a knife-edge; and that, I would say, is a succinct but true statement. The balance of payments will not be improved unless new and additional exports can take place. A high bank rate, as I think everybody knows, is a temporary expedient, and cannot be maintained indefinitely. I heard a Member of your Lordships' House, the noble Viscount, Lord Chandos, say at a conference I attended some months ago that we were in for a period of intense and fierce competition, particularly in the European markets. As everybody knows, the French railways have been electrified in broadly the same way as it is proposed to electrify the British railways, and the fact is that in this field the French have obtained a lead. To-day, if countries are considering mainline electrification, as a number of them arc, it is to France that they look as the leaders, as the nation possessing the greatest technical and practical knowledge on this particular subject.

What will be the effect of postponing, curtailing or abandoning (whatever it may be) main-line electrification in this country? It will be equivalent, in my view, to telling the world that the British Government have no confidence in main-line electrification; and one can realise what a handicap that will be in the sphere of securing orders from other countries, including the British Commonwealth. Industry in this country is already handicapped enough in the export markets. As everybody knows, electrical exports have been one of the bright features in our post-war economy, and I hope that there are not going to be further handicaps put upon them. We have never been told what are the reasons for this hiatus and this threatened curtailment. I listened carefully to the noble Lord who replied on the Address, and he did not even mention these points. No doubt points were too numerous in a debate of that extent, and I did not in any way feel hurt about it; but it is the fact that no reply was given to these points.

The railway capitalisation programme has already been cut by 12½per cent., and goodness knows what lies in store for the British Transport Commission in the months ahead! I would ask: is it argued that our economy is substantially worse to-day than it was in July, 1959, fifteen months ago, when the programme was reappraised and approved on the second occasion by the Government?

VISCOUNT HAILSHAM

I do not want to interrupt the noble Lord, and I am sure he does not want to take a false point; but he has now said twice that the reappraisal was approved by the Government. As that is contrary to my information, I am wondering whether he could justify the statement, or whether he would, on consideration, think that perhaps he is not right about that.

LORD CITRINE

It is a most difficult thing, of course, to give specific evidence on a matter like this. But the Paper was presented to the House of Commons—I do not know whether I am in order in making this reference. A Minister introduces it. It is then debated in the House, and never the slightest hint is given, in Parliament or outside Parliament, that the Government has any doubts whatever about what I will call the soundness of the plan.

VISCOUNT HAILSHAM

I think the noble Lord is in fact mistaken. I do not want to dogmatise, because I know how easy it is for either of us to be wrong, but actually I think he is mistaken. The 1956 Plan was approved in broad outline in 1956, subject to certain qualifications which I shall subsequently point out. But my information is that the 1959 Reappraisal was approved by the Commission but not by the Government; and it was following that Reappraisal that the Prime Minister made his statement out of which the Stedeford Committee grew. I may be wrong, but I think I am putting the matter correctly.

LORD LATHAM

May I ask the noble Viscount whether in 1959 the qualified approval of the Plan of 1956 was withdrawn?

VISCOUNT HAILSHAM

The noble Lord will have every opportunity to intervene during my spech, but I do not think I should be drawn into an interrogation during the speech of the noble Lord, Lord Citrine.

LORD CITRINE

I thank the noble Viscount for his interjection; it is not in the least unhelpful to me. But, unfortunately, one is not always able to express in this public forum the various stages which are gone through in consultations between Chairmen of national Boards and Ministers before plans of this kind are put forward for what I might call House of Commons approval. I think I could very easily follow the noble Viscount on this point; and, if I may say so, it comes to me with to measure of considerable surprise that at this stage there is the slightest doubt that the programme had the support of the Government. It is very singular to find a Government who are ready to find money to carry out a Plan involving many millions of pounds when they do not approve it. But I will let the matter rest there.

If the Plan had been found to be defective—and, as everybody knows, at that time the urge was to get on with it as quickly as possible—I would have said that some public indication should have been given as to the respect in which the Plan was defective and its operation at that moment was considered unwise. Suburban railway electrification has proved itself over and over again. Main-line electrification is bound to come, and the longer it is deferred the more it will cost. I have not gone into the arithmetic, but I have not the slightest doubt that if in 1931 the Report of the Weir Commission on main-line electrification had been pursued and the railways had been electrified, we should have had a very much more efficient transport system in the intervening years. I earnestly hope that, even at this late hour, with the White Paper in draft, as it presumably is, the Government will not be influenced too much by temporary considerations, but will reaffirm their instruction of fifteen months ago (the noble Viscount would dissent in the use of the word "instruction", but I would say, at least, the apparent public approval of fifteen months ago) of "full speed ahead" with main-line electrification.

6.26 p.m.

LORD MERRIVALE

My Lords, I am glad the noble Lord, Lord Citrine, has referred at length to the electrification aspect of the Modernisation Plan, for it may be that I shall be considering this problem in a slightly different light from that of Her Majesty's Government—that is, if I correctly understood the speeches which were made by the Minister and his Parliamentary Secretary in another place, though perhaps I shall not view the problem in quite such a different light, now that I have had the pleasure of listening to my noble friend Lord Cheshsm. In doing so, I trust that I shall not be at cross-purposes or be crossing swords with the noble and learned Viscount, Lord Hailsham, for I feel that his trenchant arguments would be like a brilliant rapier against a somewhat blunted dagger. I should like to refer to certain facets of those speeches in so far as they affect the future of the railways.

On reading or listening to those speeches, I gathered the impression that, although Her Majesty's Government may not be biased in favour of road development versusrailway modernisation, there was a leaning on their part toward the former—that is, road development. But as I say, it is just a feeling based on reading those speeches and listening to the speech of the noble Lord, Lord Chesham. As was mentioned earlier by the noble Lord, Lord Stonham, I feel that such statements as were made in another place by the Parliamentary Secretary can be a little misleading—namely, that the London-Midland electrification scheme would cost 2½ times more than the amount being spent in 1960–61 on road construction, and eight times more than M.1. I feel that the two are not comparable. I know that this question has been answered by the noble Lord, Lord Chesham, but I feel that one should not compare figures in that context, because, strictly, one cannot compare them.

I feel that the problem of road and rail transport should be considered jointly. The concluding remarks of the interesting booklet Britain's Transport Crisis—A Conservative's View sums up the problem very well. I should like to quite the author's exact words: While encouraging all the other forms of transport to play their part, we should concentrate on roads and railways to meet most of our needs…In making our general plan for the veins and arteries through which our life blood is to course in future, however, we need a reasonable co-ordination between the plans for ordinary road and the plans for rail road. We should build as many roads as we can afford"— I think this is an important part of this article— while encouraging the railways to relieve the traffic on them as much as possible by efficient competition. For it to be possible to have efficient competition, my Lords, surely we must not hamper in any way the railways' modernisation programme. We have already been told this afternoon that the programme is to be cut next year by £20 million.

With particular regard to the London-Midlands electrification scheme, and only 19 days after the closure of the British Railways electrification conference, to which some 40 countries sent delegates, the Minister stated in another place that no new contracts were to be placed for this scheme. On the same day, the Parliamentary Secretary said: We have to decide whether it will be worth while in the long run to go in for the London-Midland electrification scheme or whether it would be better to use some of the money on other forms of transport. Was it the appropriate time to make such a statement, so soon after the conference? What effect can such statements have on our electrical industry and on our export of electrical equipment? The noble Lord, Lord Citrine, dealt with this at length and with great knowledge.

In the course of the debate in another place, the Parliamentary Secretary went on to say how unwise it would be to stem the tide of private transport. That may be so, but in view of road congestion it might be possible to curb this tide by incentives to use transport which is in the public sector. Surely the role of our public services in transport and the future pattern of transport should not be entirely dictated by the "one man per car" motorist, the "A" and "C" licence holder and the long-distance coach operator.

In one or two countries abroad the picture would seem to be a little different. Whilst Germany comes third in expenditure on roads after the United States and Canada, that country is still proceeding with railway electrification, and from what I have read and been told they consider that electrification is a means for modernising the motive power and equipment and—a point which has been much in the minds of noble Lords to-day—it is the most effective means of reducing and finally eliminating the working deficit of the German Federal Railways. As for France, the first task after the war was to restore and modernise the railways, and now the Government have produced a plan "of first urgency" for over 1,050 miles of motorways. In spite of that, the railways are still looking ahead, judging by the remarks made by M. Dargeou, Director General of the French National Railways. He said that he hoped it would not be long now before our two railway systems were linked by means of a Channel tunnel. Surely that is the right approach: to consider jointly or together the development of our two main forms of transport, road and rail, and not to put forward proposals for one form of transport which might be detrimental to the other.

During the last few days there have appeared in our leading papers—The Times, the Financial Times, the Daily Telegraph and the Guardian—what I would call disquieting articles concerning the future of the railways. The main trend of these articles was that disquiet was felt that there should be any curtailing of the Modernisation Plan, particularly with regard to the main electrification scheme which is being held up at the moment. That is why I should like to refer to the third and major stage of the London-Midland electrification scheme. An important statement was made by the Select Committee, and I would ask your Lordships' indulgence to read the short statement which appears in paragraph 393 of their Report: Your Committee are not aware of any considerations which would justify the abandonment of the London—Midland electrification at this stage, despite the low rate of return. The right policy now seems to your Committee to be to complete the scheme as soon as possible. The noble and learned Viscount who is to reply for Her Majesty's Government will certainly have read the article which appeared in the Financial Times on December 5. In this article, the Director of the British Electrical and Allied Manufacturers Association rightly stressed the effect that the Government's hesitations concerning main line electrification were having on the electrical industry's production figures and exports and the morale of their key personnel. He went on to add that in certain cases the outcome of this had been rising costs and higher prices.

I feel that the railway Modernisation Plan should be considered as a whole. Therefore, it seems to me quite wrong that the London—Midland electrification scheme should be singled out, as it were, resulting in no orders being placed for the last six months for rolling stock and equipment. Such a state of affairs can lead to some, regrettable incidents, such as one that has come to my notice in the stage two area—that is, the area being electrified between Crewe and Liverpool. Here a contract has already been placed for the laying of overhead equipment, but work on this contract is now being held up because the appropriate contract has not been placed for the necessary civil engineering work. Although the Minister said in another place that existing contracts were continuing, here is a case where an existing contract cannot continue because it needs a further contract to be placed for the work to go on.

In conclusion, I should like to comment on the Observer's article of December 4, to the effect that the Treasury advisers might bear in mind the concluding remark which appeared in the booklet to which I have already drawn your Lordships' attention, published by the Road and Rail Association. This remark reads as follows: Time and again the economists, sophists and calculators—especially the accountants—have 'proved' that a proposed development would not pay, and were found wrong if overruled.

6.40 p.m.

LORD BURDEN

My Lords, we are indebted to my noble friend Lord Morrison of Lambeth for introducing this Motion this afternoon. Notwithstanding my noble friend's speech, I was afraid we should get little information as to the intentions of the Government so far as the railways are concerned; and I think that even the noble Lord, Lord Chesham, would agree that his speech this afternoon, most able as it was, contained little or even nothing that had not already been said in another place. I would say, too, that I hope the debate we are having to-day will not preclude further consideration of the problems when we receive the Government's White Paper which is promised to us.

So far as the railways are concerned, we have the Report of the British Transport Commission, and a most valuable Report of a Select Committee on Nationalised Industries—a Report detailed, informative and, on the whole, favourable to the railways. It is right and proper that we should have this wealth of information, statistical and otherwise, for, after all, the country's livelihood increasingly depends upon the efficient working of the nationalized industries. But, in addition to these Reports, there are the recommendations of the Stedeford Committee. All I am going to say about those recommendations is that apparently, so far as they are concerned, we are to have only such information as the Minister thinks fit.

But there is yet another Committee at work, to which the noble Lord, Lord Chesham, referred, and which the Minister describes as a compact study group, with himself as the chairman. The object of this Committee, according to the Minister, is to go into the whole aspect of transport so that the Minister and the Committee can relate what happens on rail to the rapidly changing developments in the transport field. What this implies it is difficult to say nor do we know who are the people described as a "compact study group". It seems to me, however, that it might raise a constitutional point of some importance. We all agree that there must be some ultimate Parliamentary control of railways and other nationalised industries, but that does not imply that the Minister himself can interfere in the day-to-day working of the industry.

I think this point was very well put by the noble Lord, Lord Hurcomb, when he was Chairman of the Transport Commission, in reply to a question when he was giving evidence before a Select Committee on the Nationalised Industries, in 1952. Here is the question: In all the nationalised industries the Minister has an overriding responsibility for policy? The noble Lord's reply was: I wonder whether it goes as far as that; he can give a general direction on a matter of national or public interest. That, I think, is in accordance with the terms of the Act of 1947. I submit that the position of the railway management will be intolerable if there is to be a constant interference in the day-to-day working by the Minister and a committee, of whom we know nothing as to its membership or what it is supposed to do. I venture to say that that is a point worth considering.

The railways, as we are all aware, are going through a very difficult time, and by no means the least of these difficulties is the large amount which the British Transport Commission have to find as interest on capital. As my noble friend Lord Latham pointed out, out of the deficit of something over £100 million, £42 million represents interest on capital; and that is on old capital, not new capital. It is important to remember that this is a legacy from the history of the railways. I came across a striking confirmation of this point in a report of the Board of Trade of 1908, signed by leading railway managers and industrialists of the day. It says: Under the existing law, railway companies have had, and still have, to pay very large amounts in obtaining power to acquire land by Act of Parliament, in compensation to landowners whose land is acquired, and by reason of the heavy expenses involved in arbitration proceedings under the present practice. The paid-up capital of the railway companies of the United Kingdom amounts to about £56,000 a mile of open line, which is largely in excess of the outlay in other countries, and much of this excess is attributable to the outlay incurred in obtaining statutory powers and in the acquisition of land. I venture to think that this should be remembered now that the railways are faced with relentless competition from road transport, which uses roads constructed in the main at the expense of the State, nationally and locally. Apparently, the Parliamentary Secretary supports this competition between road and rail because it gives flexibility. But he added: Since there will always be traffic which will go more efficiently and economically by rail, we must modernise our railways. However, he went on to say that we must seek co-ordination of transport. Frankly, how co-ordination is to be achieved with a "free-for-all" in competition between road and rail—and, despite what the noble Lord, Lord Chesham, said, there is a "free-for-all" in competition between road and rail—I do not know.

Another point which has received attention recently is that, as the law stands to-day, the Transport Commission cannot develop for other purposes land surplus to railway requirements. The noble Lord, Lord Hawke, mentioned this. I think he rather had in mind that a policy should be pursued of handing this over to private developers; but the fact remains that the Commission cannot develop that land for purposes other than railways. It is interesting to note that 50 years ago this handicap was pointed out in the Board of Trade Report I have already mentioned. The Report said: It is desirable that railway companies should have the same powers as are enjoyed by private landowners in regard to the holding of or dealing with land which they may hereafter acquire for the purpose of their undertakings, but that any extension of existing powers in relation to land already acquired should only be permitted subject to an opportunity being given to adjoining owners to be heard in objection before the Board of Trade. To this day, for some unaccountable reason which to me has never been satisfactorily explained, the railways have not been given these powers. With the greatest respect to what the noble Lord, Lord Chesham, said in regard to his Minister, I am bound to say, from contact with railwaymen, that the attitude of the Minister towards the railways does not inspire confidence.

May I take as an instance of this something which has already been mentioned, but to which I think I might add a little more? There was the statement of the Parliamentary Secretary that the cost of the London-Midland electrification scheme would be eight times the cost of building M.1. What the Minister omitted to say was that the route mileage of the London-Midland electrification is 538, compared with the M.1 mileage of 53; and that the £160 million includes £53½ million for rolling stock and £41 million for signalling—that is, of course, for traffic control, which is performed for road transport at the public expense. There is no excuse for this misleading comparison, seeing that the figures are given in the Select Committee's Report on British Railways.

What appears to be an inspired leak in the Observer of last Sunday is most interesting. The abandonment of the remaining portion of the London to Manchester and Liverpool electrification has already been referred to on several occasions. Are we to submit to the farce that passengers from Euston to Manchester or Liverpool will travel by ordinary steam train to Crewe, and then change over to electric traction? Is that the way to increase the passenger load and regain passenger traffic? Then, again, has the effect of shutting down, slowing up—call it what you will—on manufacturers, who, as my noble friend Lord Citrine has pointed out, have engaged highly paid and highly qualified technical staff and who have sunk millions of money in fixed capital and on their workmen, been considered? Is it true that the leading manufacturers have already made urgent representations, both to the Board of Trade and to the Ministry of Transport, on this "Go, stop; go, stop" policy of the Ministry?

I think it is worth having on record, in view of what my noble friend Lord Citrine has said in regard to the electrical industry, a few words from a speech of Sir Brian Robertson, the Chairman of the British Transport Commission. The noble Lord, Lord Merrivale, referred to that Conference which was held in November last. This is what Sir Brian said: At the beginning of last month we had the privilege, at a British Railways electrification conference held in London, of showing to more than 200 delegates from railways all over the world, something of the achievements gained in this country with high-voltage A.C. electrification, and something, too, of the intricate technical problems involved with a railway network so complicated and so densely used as ours. We were also able to demonstrate to them, in conjunction with British industry, some of the striking developments in electrical engineering which have been stimulated by British experience of A.B. traction. Progress in this field has been dramatic, and our visitors were very obviously interested. What confidence can these leading firms in electrical engineering have in a Government which plays about with them in this matter of electrification? Further, is the Observer correct in its forecast that the British Transport Commission is to be reduced to a shadow, and that a small central authority is to be set up concerned wholly with the running of the railways? Does not this imply the Government's intention to hive-off those other profitable undertakings in the same way as lucrative road transport was hived-off?

Turning for one moment to another important point, let me warn the Government that, in connection with the policy of decentralisation which is said to be their policy, if concurrently with that policy they mean to break up the national negotiations of the trade unions settling conditions for the railways as a whole, and throw them back on to regional negotiation, then I would say they are heading for the most serious trouble. I, for one, should never agree to trade union industrial action in regard to political questions, but this is a matter of the conditions of service and the livelihood of the men and women they represent From top to bottom on the railways the staff feel a sense of deep frustration. Railwaymen who have devoted their lives to their profession and to the study of railway problems know quite well that the railways depend for their prosperity on the travelling public and on a prosperous trading activity in the country. The railways seek to ensure the fullest measure of co-operation with the travelling public, as well as with traders. Every effort is being made to meet the changing requirements of industry, and the railways ask to be freed from any restrictions which hamper them in these objectives. They want to be allowed to plan ahead like any other business enterprise.

The railways know that they have to face the intensified competition from powerful road interests, but they feel that, given the opportunity, they can still make an essential contribution in the field of transport. Railwaymen of to-day, my Lords, still have a legitimate pride in their industry. But I say to the Government, in all sincerity, that this constant changing of policy seems to be calculated to destroy that pride and to engender a feeling of despair. I beg the Government, before they submit further proposals, to consider most carefully whether those proposals will maintain, strengthen and deepen that legitimate pride of railwaymen. For, after all, railways, with all their faults, still render, and can in the future continue to render, a great public service.

7.0 p.m.

VISCOUNT SIMON

My Lords, the noble Lord, Lord Morrison of Lambeth, invited us to explore a very wide area with the Motion he put down. Noble Lords have taken full advantage of this invitation, and the discussion has roamed fairly far and wide. We have also had an opportunity to examine pretty closely some special features of the scene. What I should like to do at this late hour is to make a few observations of a general nature and then to refer briefly to two matters to which I think attention should be called.

It seems to me that one of the great difficulties about the problems of transportation is that they impinge upon us personally in our personal lives; and in our business lives so closely, so frequently and often so uncomfortably, that there is a tendency to think of transport problems from the point of view of correcting the errors which we think we see in what is going on around us, and it is extremely difficult in those circumstances to get far enough away from the problem to look at it as a whole and to formulate in one's mind an overall transport policy.

Reference has already been made to the statements made in another place about the small group with which the Minister is surrounding himself. My reading of what I have seen is quite different from that of the noble Lord. Lord Burden. I have never imagined that that group was intended to interfere with the day-to-day running of the railways, but I had assumed it was engaged in the task, which indeed was described by the Parliamentary Secretary and which has already been quoted, of considering what the Minister would in the long term be considering—the fundamental question of the size and shape, not only of the railways but the transport system as a whole over the next 25 years. I assume that is what this group is doing.

With great respect to the Minister—and perhaps I have a little more respect for the Minister than the noble Lord, Lord Morrison of Lambeth, seemed to have— I doubt whether that is a task which, in fact, can be undertaken by any Minister of the Crown. Even with the aid of the noble Lord, Lord Chesham, the Minister has a tremendously heavy task. He has to deal with day-to-day decisions over a very wide range of subjects. He is also, very properly, subject to Parliamentary question, to having to explain to Parliament what he is doing. How is he ever going to find the time and the quiet necessary to see to the bottom of this great problem? I can imagine his coming into a meeting of this group; he has come from another meeting; he has another appointment in half an hour. How is anybody going in those circumstances to get a really sound basic policy for the transport of the country? I wonder whether the time may not come when we shall decide that that task must be undertaken by an independent body set up for the purpose. One does not usually recommend people to sit on ivory towers in order to see what is going on, but I am not at all sure that the wood of the transport problem could not best be seen from an ivory tower and not by people who are constantly bumping their heads against the trees.

It seems to me that it is only when a broad policy of that kind has been established that we can start discussing how it is to be implemented, and I take the great argument that goes on about integration and co-ordination as really an argument on methods. I think the noble Lord. Lord Morrison of Lambeth, and his friends would agree that integration is not an end in itself; it is merely a method for achieving a policy that has been decided upon. Whether or not it is the best method is, of course, a matter for debate. All I would say on that is that I hope when the matter is debated it will be debated as a practical problem and not as a political problem.

I have to confess that while those thoughts are expressed—I think they have been expressed from both sides of the House—they always seem to be accompanied by a good deal of political argument. It seems to me this is fundamentally a practical problem. I will leave it to the noble and learned Viscount who is to reply for the Government to draw the distinction, which I am sure he would draw much better than I, between integration and co-ordination. I certainly feel there is a distinct and clear difference between the two. The noble Lord, Lord Morrison of Lambeth, coupled them together, but I feel that whereas we understand that the policy of the noble Lords opposite is really a policy of integration, there is in truth a policy of co-ordination which is supported by the present Government. Noble Lords may argue whether co-ordination can be effective without integration. That is a matter which we can discuss on some other occasion. My own feeling is that co-ordination that means practically everything in common ownership is not necessarily the best form of co-ordination.

Perhaps I may quote one example which has been mentioned already. I thought I should probably be the only Member of your Lordships' House who did not greet the completion of M.1 with joy, but I have heard some hints that others may think the same way. It seems to me quite extraordinary. I feel sure that the Roads Division of the Ministry and the Minister with advice came to the conclusion that, with the restricted resources which admittedly he has, this was a project which should be completed, a fine motorway from London to Birmingham carrying people and goods faster and, as we heard to-day, safer than before. But, surely, carrying people and goods from London to Birmingham is precisely the sort of thing for which the railways are especially suited, and I find it hard to believe that that decision was taken after any consultation between the rail side and road side of the Ministry of Transport. My own feeling is that the money would have been much better spent on widening bottlenecks on some of our trunk roads, and building bypasses round some of the worst towns. That is by the way. I find it hard to believe the decision to proceed with M.1 was made after consideration of the obvious ability of the railways to deal with that type of traffic.

We have heard a great deal about the railways to-day, and while I thought of saying something, we have heard from so many noble Lords much more informed than I, that I propose to leave out what I was going to say about railways and come to the two particular points to which I want to draw your Lordships' attention. The first is the matter of coastal shipping which has been touched on this afternoon and to which I have referred in this House before. I think the position is fairly well understood. Coastal shipping in itself—all shipping—is a form of transport in which the permanent way is free because you are using the sea, but in which terminal charges are apt to be rather heavy. For that reason it is especially suitable for long distance haulage, and it might be thought that that ruled it out from the coast. But there are certan types of traffic which are still more economically handled by coastal shipping—namely, coal and mineral traffic, which can be handled relatively cheaply, so that the terminal charges are kept down, and which are carried over a fairly long haul—for example, from the North-East Coast to the South and West of England.

It is obvious that the railway organisation, the British Transport Commission, as operators of the railways, with their enormous spread of traffic, could quite easily, if they wished, pick upon this particular type of traffic which is rather narrow in extent and could quote rates that could not possibly be economical, and they could take traffic away from the ships. They were at one time inhibited to some extent by the charging regulations of the railways, but your Lordships will remember that the charging regulations were modified not long ago. Much wider discretion was given, and under present conditions there is no doubt that traffic could be taken away in this way and the railways could make a very good case for it. They could say, "This is additional traffic to us, and even if it does not cover any proportion of our overheads it is better than not having it."

From 1921, I think, in every successive Transport Act provision was made to cover this particular point, by providing for consultation between the railways and coastal shipping on traffic of this sort, a rather narrow category of traffic, for which coastal shipping was suitable. But it is clear that that machinery has not been working properly, and it has been reported that the Transport Commission are applying to the Minister to have the safeguards taken away. I think it is of great importance that we should retain something of our coastal fleet. It would be vital to us in the case of emergency, and of course it provides for the small but important category of people who would find it difficult to seek employment elsewhere, not only on the ships themselves but in the small coastal ports which are so dependent on this type of shipping. I hope that in whatever is done to make the railways more economically sound, some safeguard will be retained for coastal shipping.

The other point to which I thought I might draw your Lordships' attention is in connection with traffic to and from our ports. Most of the ports in this country were built in the last century and were generally devised to receive the bulk of their traffic by rail. Of course, the ports built by the railways were devised to receive it all by rail. Since the war there has been a great change in the amount of cargo coming forward by rail and the amount coming forward by road. I have here figures relating only to the Port of London, but it is interesting to observe that whereas in 1939 35 per cent. of the export traffic arrived by rail—that is, about one-third of the total—that figure by 1960 had fallen to 14 per cent., 86 per cent. of the traffic coming by road. Of course, the traffic itself has increased substantially as well. So far as import traffic is concerned, the proportion by rail has always been less, but at present it is only about 8 per cent.

I should explain that these percentages relate to the total amount of traffic handled by land—that is, between road and rail. They exclude traffic handled by barges, which in London is substantial. It seems to me that that is what has happened. I am told that recently there has actually been an improvement in the percentage of traffic arriving by rail at ports other than London, but for some reason, London is not following the common trend. But this tendency to send exports by road is resulting in the railways serving the ports being underemployed, while the roads, as we all know, are heavily congested, very nearly all the roads passing through built-up areas already carrying a great deal of local traffic. They are heavily congested by lorry traffic seeking its way to the docks.

It seems to me that in any arrangements that are made, the railways will try to get as much of this traffic back as they can. They are trying to get it back, and they should be given every encouragement, and perhaps be permitted to give some incentive to get back this type of traffic. If they can do that, not only will they make better use of the railways, but they will also be reducing the congestion on the roads. Equally, they will save the port authorities from the necessity to undertake what is really unproductive capital expenditure in altering their terminals, in order to receive more and more traffic by road and less and less by rail.

7.16 p.m.

LORD LATHAM

My Lords, my noble friend Lord Morrison of Lambeth has raised a question this afternoon which goes to the root of civilised society. My noble friend Lord Lucan quoted the statement of Rudyard Kipling that "Communications are civilisation". My noble friend Lord Morrison of Lambeth introduced the subject in a humorous, penetrating speech which carried with it the engaging flavour of another place. The noble Lord, Lord Chesham, in his reply, said very little to bring comfort to those who are concerned about the state of our inland transport. It may well be that the Government themselves have nothing to say; that they find themselves quite unable to get out of the mess into which transport has gradually been pushed as the result of their dismantling in 1953 of the system created under the 1947 Act. He did, however, among other things, say that the White Paper, no doubt embodying the Government's views, will be published before Christmas. No doubt, too, he has seen a statement in the Press that it is not contemplated that there will be any legislation this Session. I do not know whether the noble Viscount who leads the House can say whether that is the case, and whether the present situation as regards transport is to go on in its very unsatisfactory condition.

My noble friend Lord Citrine raised the question of Her Majesty's Government having, as we learned later, approved the modernisation programme in 1956, but was doubtful whether the Government had, in terms, approved the modernisation programme after its review in 1959. In that connection, I hope that I may quote what is stated in the White Paper of 1956 (Cmd. 9880) in paragraphs 18 and 19: It is not possible to pre-determine many years ahead precisely the level and nature of the investment expenditure: this will need to be reviewed from time to time in the light of economic conditions, the availability of supplies and the experience gained as the plan develops. These, I believe, are the material words: The Government are, however, satisfied that the general shape of the Commission's investment proposals is sound, and that the Commission's forecasts of their requirements are reasonable. The Government accept the Commission's plans as practical and necessary and. although they must not be taken as subscribing to all the views expressed by the Commission, consider that the Commission have now clearly shown that they can, within a reasonable time, overcome past handicaps and provide the country with a modern and up-to-date transport system which will pay its way. Those words, my Lords, are pretty definite. I cannot refrain from quoting just one more sentence. In the succeeding paragraph it is stated: It will however inevitably take time to overtake decades of under-investment"— I stress that word "decades"— and to achieve the planned revolution of the railway system. That is Command Paper 9880 of 1956. Then we come to the White Paper (Cmnd. 813) of July, 1958, which in paragraph 2 says: This Re-appraisal comes some four years after the publication of the Plan for the Modernisation and Re-equipment of British Railways, and constitutes a complete review of the Plan in the light of economic, and technical developments which have occurred since its conception and of future economic and technical trends. The terms of reference of the Re-appraisal have been agreed with the Ministry of Transport and Civil Aviation, and it is divided into three main parts. I should have thought that that was getting pretty near to Government approval.

VISCOUNT HAILSHAM

My Lords, I agree that the noble Lord has correctly quoted the words, but I do not think he has quite appreciated their significance.

It is stated quite unequivocably that what has been agreed are the terms of reference. It says exactly that.

LORD LATHAM

My Lords, shall I read the terms of reference?

VISCOUNT HAILSHAM

My Lords. the noble Lord may, of course, read what he likes. But the point I discussed with the noble Lord, Lord Citrine, was whether the Re-appraisal—that is to say the substantive proposals—had been given Government approval, which I questioned. If the noble Lord, Lord Latham, will forgive me, it does not help at all to read out words which say in terms that what had been agreed by the Government was the terms of reference.

LORD LATHAM

My Lords, nevertheless, I think I will read them.

VISCOUNT HAILSHAM

By all means. The noble Lord has read them once. Let him read them again.

LORD LATHAM

The words are these: Part I—An account of the achievements under the Modernisation Plan to the end of 1958. and the benefits obtained. That would not seem to me, at all events, to justify withdrawal of the Government's consent already given in 1956 with certain reservations. Then, Part II.7—A detailed re-examination of the future course of the Modernisation Plan, with particular reference to the next five years, related to the future size of the railway system that will be needed in view of current economic developments and future expected requirements. That, similarly, does not seem to constitute withdrawal.

VISCOUNT HAILSHAM

My Lords, the noble Lord still is not grappling with the point. What he has read out as being agreed is the terms of reference, and not the Re-appraisal.

LORD LATHAM

My Lords, I am grappling with the point all right. The real point is that the noble and learned Viscount does not like the point. The Report goes on: Part III—A re-appraisal of the economics of modernisation in the light of Part II, and 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 invite the noble and learned Viscount who leads the House to say exactly what is the position. Have the Government withdrawn their consent of 1956; and if so, why? Because this chopping-and-changing is not only disturbing but distorting to industry, as well as to the railways themselves.

The noble Lord, Lord Chesham, also raised the question of the position of members of public undertakings indulging in—I will not say propaganda, but in public statements as regards the undertaking with which they may be associated. As the noble Lord said, and so far as I know at all events, there is of course no statutory embargo but it is the case that there is an understanding. And as one who has been the Chairman of a public undertaking, to wit, the London Transport Executive, I know that that was the case and I very faithfully, (I hope) complied with it for the whole six years I was the Chairman of that undertaking.

The noble Lord, Lord Hawke, in connection with the statement made by my noble friend Lord Stonham, raised the question of the power of the British Transport Commission to raise fares and charges, and I interpolated a statement that the Commission were not free to raise fares and charges. I not only know that from experience but would cite in support of it the statement of the right honourable gentleman the Minister, on October 26 of this year [OFFICIAL REPORT, Commons, Vol. 627 (No. 159), col. 2371]: I now proceed to the fourth point, statutory restrictions. The Commission is restricted in its freedom to adjust its fares and charges. I know that only too well because, as I said on the last occasion we were discussing transport, as a result of the intervention in 1952 the London Transport Executive lost annually for four years very nearly £2 million—because increases in fares which had been approved not only by the Transport Tribunal but also by the General Consultative Committee, and had in fact been put into operation, had to be withdrawn under a direction of the Government: indeed, a Resolution of another place. In addition to that, in 1956 there was a further interference, according to the Report of the Select Committee on Brutish Railways, which the Commission estimated cost a very considerable sum. Through those two interventions, the Commission lost, they say, either, on one basis, £15 million, or, on the other, no less than £23½ million.

My Lords, this problem is a problem of the whole of transport, transport which is an essential sector in the economic and social life of the country. It is not, I submit, the provision of a particular facility or a particular means of getting from one place to another or sending goods from one place to another. It is the basis almost of civilised modern society. It must be so viewed, and I propose, in the remarks which I shall make, to look at transport from that point of view—road, rail, docks, waterways, coastwise shipping and the like. At the present time the fact that facilities for transport and for communication are unregulated and uncontrolled is involving this country in waste and excessive costs. There can be no question that there is an excess of transport capacity in this country at the present time; and in modern conditions waste is quite unjustifiable, because waste, whatever it may be, is in the end the waste of somebody's labour power.

It is idle, I submit, to look at the question of transport from the point of view of competition. We are in the twentieth century, not the nineteenth century. Competition as a spur to better road and rail and other facilities is an illusion. If we had, as we had in the early twenties, real, effective competition in transport, the roads would be impassable, and would be just death traps, much more so than they are at the present time. That fact was recognised by independent people long before the war. It was recognised, of course, in 1921 when the amalgamations took place, when the many railway companies which then existed (I forget the number, but I think it went into hundreds) were all merged into four systems and we had the illusory estimate of a standard revenue of £52 million a year, based upon the revenues of the railways in 1913 before they were taken over during the war of 1914–18.

The fact is, however, that between 1928 and 1938 the railways did not in any single year earn the standard revenue; and in 1938, the standard revenue being £52 million, the earnings were £294¾ million. And that notwith- standing the fact that the State guaranteed money raised by the railway companies at a low rate of interest (and I include in the railway companies, London Transport) in order that they might carry out certain improvements. But principally the reason why the Government took that step was to relieve the unemployment problem, which was then very acute. And we had, as most of us can remember, the plaintive cry of the London Midland and Scottish Railway for a "Square deal". The London Midland and Scottish stock of £100 stood at £30; the London & North Eastern Railway deferred stock of £100 stood at £4⅜ and I recall that on one occasion it was said, in extenuation, I suppose, that the General Manager of the London & North Eastern had at all events brought the stock of the company within the reach of the working classes.

The war saved the railways from bankruptcy in 1939, and nationalisation saved them from bankruptcy after the war. If they had been handed back to private enterprise there would have been a Receiver in the next day because they were bankrupt. The only solution for transport at that time, as now, was that the whole of the resources and the facilities of inland transport, at all events, should be integrated into one undertaking and into one system. This was the view of informed people, both before the war concluded and after the war. For instance, the noble Lord, Lord Leathers, in 1944 wrote a letter to Modern Transport which was published at his request. It is dated March 18, 1944. At that time, Lord Leathers was the Minister of War Transport, and this is what the letter said—I quote: Time and war have shown how necessary it is to regard the various means of transport not as a collection of independent and competing units but as component parts of a vital national service. It is a little ironic, I suppose, to reflect that Lord Leathers was also concerned as an "Overlord", as he was termed, with others in 1953, when this vital national service was torn apart by the then Government. The Economist, never excessively friendly towards public enterprise, said on April 19, 1952—here I quote: Transport has never been far from politics: but never before, surely, has a decision with such far-reaching implications for transport been taken on such evident political grounds. I believe that the noble Lord, Lord Chesham, averred in his speech this afternoon that the Government had not dealt with transport from the point of view of political considerations. I am not convinced that that is the case, and I find support for the contrary view in the quotation I have made from the Economist.

It was said in justification of the step taken in 1953 that integration had been a failure. My Lords, I submit that there was no evidence to show that integration had been a failure. There were great achievements in the short period between 1947 and 1952, when the Government decided, no doubt for a variety of reasons, some of which are hardly creditable, to tear apart the integrated system of road and rail transport. Despite the worn-out equipment to which have already referred, despite the fact that repairs had had to be neglected because of the war, and despite the terrific wear and tear on the railways through their performing of their war service, integration was proving its worth. The Commission took over, and merged over 3,800 road undertakings which were proving very profitable and satisfactory. In 1953, they earned nearly £9 million; and even now, after truncation in 1959, the British Road Services were earning over £3 million. It was not that integration was proving a failure: it was the perturbation created because it was proving a success; and I submit that those responsible, the Government of the day, really did not want the nationalised, integrated transport of this country to be successful.

In support of what I have said about the integration working out successfully, I should like to quote a statement made in 1952 by Modern Transport, a paper quoted by my noble friend Lord Morrison of Lambeth this afternoon in his speech, It is an authoritative paper, and this is what it said: However much one may try to think otherwise, and however passionately one may believe in the ideal of private enterprise, there is no escaping the fact that co-ordination of transport is essential to the modern state It then goes on: It seems to be transport's fate to be be devilled by politics. The situation, of course, is by no means peculiar to this country,…those who have had the thankless task of implementing the Transport Act, 1947, have had to put up with a spate of unfair criticism, mainly because they were running a nationalised undertaking.…Hitherto it has been quite a pastime to contrast adversely the railways of today with those of 1938, ignoring their postwar handicaps despite which operating and engineering efficiency has been materially increased. So I submit that the problem is integration.

There have always been Committees galore. Nobody in the Government seems able to decide what is to be done. It is not a policy: it is a series of fits and starts, chopping and changing, with, as I say, Committees galore. There have been four Committees within the last year. There are the Guillebaud Committee, the Select Committee, the Stedeford Committee, and now the compact Study Group which has been recently appointed by the Minister, and which will have the handicap, according to the report in Hansard, that the Minister will be its Chairman. But still the Government do not know what to do to repair the clam-age which, as I submit, they wantonly did in 1953 by detroying the integrated system which had been built up, with the result that there is now no certainty. Everything is uncertain; and there has been destroyed, as other noble Lords have said, the morale of the staff, who feel a sense of frustration—a frustration that goes right from the footplate upwards.

The effect on recruitment is disastrous. In some districts, I understand, the railways are short of no less than 50 per cent. of the establishment—and that is the adjusted establishment; and understand that in certain trades the average can be put at very nearly 20 per cent. That is a very serious situation. That explains, of course, a number of defects in service which, because of the shortage of staff, are unavoidable and inevitable. The railwaymen have lost their sense of pride, and the undertaking has lost a sense of dynamic action, because of this uncertainty and because everyone has apparently persuaded himself that he could run British Railways better than they are being run at the present time.

Then we have this topsy-turvy limitation put upon the Commission: that the Commission do not know for more than a year ahead how much they will be allowed for capital investment. I ask anyone concerned with running a comparable undertaking, or any business of a modest size, how it is possible to plan, or to do anything in an orderly and an arranged manner, when the situation a year ahead is not known. I believe in public accountability, but this is public accountability run mad. That disability is not in any way minimised by the knowledge that, of all the nationalised undeatakings, this limitation applies only to the British Transport Commission. It seems to me to be perfectly stupid.

Then we have the other limitation: the limitation that every scheme costing over £250,000 has to be screened by the Treasury. There is a reference to that in paragraph 390 of the Report from the Select Committee on British Railways (House of Commons Paper No. 254), which says: Your Committee comment on the lack of agreement between Commission and Ministry about how to reckon the rate of return on any one large investment. In order to qualify, expenditure beyond the £250,000 limit must produce a certain minimum return. But part of this expenditure is not new expenditure; it is expenditure out of the depreciation and renewal fund for renewal purposes. There is no justification for including that in the capital sum upon which a certain minimum return must be shown. Moreover, how can one estimate the actual return upon modernisation expenditure? The benefits of modernisation, as anyone knows, like the benefits of re-equipping a machine shop, radiate much beyond the area in which the modernisation takes place; and benefits which can sometimes be quantified, but not always, arise quite beyond the frontiers, as it were, of the modernisation which has been carried through. My Lords, I believe in economy and efficiency, but really, this is neither the one nor the other. This is merely a barrier, as it were, to people getting on with their jobs.

The Area Boards are permitted, I understand, to spend up to £100,000, yet the Commission, one of the largest undertakings in the world, is limited to £250,000. I ask your Lordships what the Imperial Chemical Industries, Limited, would think about a provision of that kind, where the directors could not spend £250,000-plus unless they got the consent of somebody else who does not necessarily possess the qualifications to enable him to judge of the value, or otherwise, of the expenditure? And the only test—the short-term, stupid test—is whether it will show x as a return, and, if so, when. That is not the way, I submit, to run a great undertaking like this. The members of the Transport Commission should be given the power to carry on their undertaking. Once the principle of large expenditure or of small expenditure has been determined, then within that policy let the members of the Transport Commission get on with their jobs, as would be done in industry. There is a difference between approving a sum of £250,000, or any other sum which is a separate expenditure, and £250,000 which is a part of the expenditure of a vast programme of modernisation running to £1,600 million. There might be something to be said for the individual item, but there cannot be anything said, I submit, in modern practice, for taking out every item over £250,000 in a modernisation scheme of £1,600 million and getting somebody else's approval to spend it.

Apart from that, we have this limitation, that the British Transport Commission do not know what they can do beyond twelve months ahead. As has been said by noble Lords earlier this afternoon and this evening, how can they plan, and how can their contractors plan, their requirements? The Times of October 5 of this year very aptly summed up the stupidity of this practice. It said: Since the Transport Commission themselves delegate to Regions authority to sanction projects up to £100,000, this has left the Transport Commission with projects between £100.000 and £250,000. It is on the face of it ludicrous that a body of such high general authority as the Commission should be dealing with such a narrow range. It goes on to say in another part: It is for the Commission to decide, for example, whether electrification or dieselization is preferable in a given instance, and in spite of the contrary view now expressed by the Chairman of the Select Committee there is no reason why the Commission should submit alternative schemes for Government consideration. If the Government feel they cannot rely on the Commission's judgment in such a matter they should find a new Commission. That, I submit, is the proper point of view and the proper angle from which to look at this problem of control of expenditure.

I should like, in conclusion, to say a word about London and the Victoria line. I was on the Committee which recommended in 1949 that this line from Walthamstow to Victoria (called Route C) should be built as a contribution—one of the most attractive contributions —towards the solution of the road congestion problem. It was one of a number of projects, but priority was given to this, and in February, 1949, the Report of the Committee and of the Working Party under the Committee was sent to the Minister. My Lords, what has happened? Apart from powers being obtained by London Transport on behalf of the, Commission in 1956 and a survey of the, tine of the route, nothing has been done. In 1959 the then Minister of Transport, Mr. Watkinson, asked the London Travel Committee to report upon the project. The order of reference to this Committee, which I think took the place of the London and Home Counties Traffic Advisory Committee, was to consider and set in train where practicable further measures, including staggering of working hours, so as to relieve congestion at the peak periods. Then it went on later to add to the order of reference in these terms: Within the terms of reference of the main Committee, to consider the desirability, practicability and economics of further underground and surface railway construction.… They examined into the matter very closely and issued a Report, and this is what they recommended: We recommend that the Victoria line as it is at present planned "— as I have said, from Walthamstow to Victoria— should be authorised forthwith and construction put in hand as quickly as possible. We recognise that the Line is not prima facie a profitable commercial investment as things are. But we believe that the improvement that the Line could bring to the public transport services in London is necessary and that this improvement would confer large benefits on the travelling public. This decision has only been taken after the most exhaustive examination of all the many factors involved. We are under no illusion about the present serious state of the British Transport Commission's finances or about the extra strain which the Victoria Line might throw on them. Against this, however, we balance the fact that, if London, as the greatest trading and commercial centre in the country, is to have transport facilities adequate to meet present and future needs then some new Underground construction is urgently necessary. The Victoria Line deserves, we think, the highest possible priority and we have no hesitation in putting forward our recommendation that it should be built and a start made on construction in the very near future. In 1949, it was estimated that the project would cost £38 million. It is now estimated that it would cost £55 million. And if we wait long enough, no doubt we shall be comforted to know that it will cost £100 million. I suggest that this is a project which ought to have been entered upon years ago. I submit that it is a project which is not only an alternative to, but much better than, large street improvements which, unless this tube is built, will have to take place in that part of London. The cost of street improvements was high enough before the war, but with the terrific increase in the cost of land, the cost will now be very high indeed. In my submission, it will be higher than the figure of £55 million, referred to in the Report I have just read.

I suggest that there are good grounds for considering whether a project of this kind ought not to rank for road grant in the same way as a highway improvement above the surface. After all, it will relieve traffic; it will have the advantage over highway improvements that it will not attract additional road traffic; and the maintenance would be carried out by the British Transport Commission. I suggest that it is a reasonable proposition that the capital cost of the Tube and the stations, though not necessarily of the rolling stock which would have to be bought, should be regarded as ranking, perhaps not for 100 per cent, grant, as for trunk roads (because this is not a trunk road), but certainly for a grant of 75 per cent. This would enable the Commission to provide the service without too heavy a loss, perhaps without any loss, and without any deficit falling upon the Commission. I conclude by repeating what I said at the start. The problem we have been discussing is not a problem of railways or of roads. It is a problem of providing for a civilised city, the great Capital of London, and for the country at large, a proper, efficient and economical system of transport.

8.5 p.m.

VISCOUNT HAILSHAM

My Lords, before I reply at length to the debate I think that the House would wish me to signalise the pleasure with which we heard a former Leader of your Lordships' House, my noble friend Lord Stanhope, whom we were all delighted to hear on this occasion. I am sorry to say that nowadays we do not hear him very often, and I am sure that all of us were glad to hear him in such good heart and voice. I am particularly glad, as he was a colleague of my father in your Lordships' House. I know also that the House would hardly forgive me if I did not welcome the maiden speech of the noble Earl, Lord Baldwin of Bewdley, which we much enjoyed. It was a polished and reflective speech, beautifully expressed, and I hope that it may be only the prelude to many occasions on which he will assist our discussions.

The noble Lord, Lord Morrison of Lambeth, has moved to call attention to present and future problems of transportation within the United Kingdom. I confess that when I first saw this Motion on the Order Paper I was more than a little doubtful as to how far we should get, when it was known, as has been implicit in nearly every speech that has been made this afternoon, that so soon after this debate there would be a major Government declaration of policy. I still think that this puts any Government spokesman in something of a difficulty. Indeed, I would suppose that this reflection had not altogether escaped the noble Lord when he pursued his Motion, since, whatever else may be said of him, he is not altogether without guile in Parliamentary tactics.

I think that a useful purpose can be served by this debate, if only to dispel some of the fog and haze which appear to be affecting the minds of noble Lords opposite when they come Ito think of exactly where we stand on this matter. The first thing which I think needs to be said is that the problems of transport which have occupied noble Lords are not in any way peculiar to this country. They are part of the technological and social changes of our time. I think that this has a great bearing on the arguments which have been put forward. In capitalist America, the railways are in a similar plight to that of the nationalised railways of the mixed economy of Great Britain. France, with railways which have certainly had a greater degree of priority in capital investment, are losing money at least as much as ours. And I have heard even those wonderful Russian railways referred to without notable enthusiasm by customers of Intourist.

The truth is that this is a problem of transport which does not bear a very direct relationship to the problems which are uppermost in the minds of noble Lords opposite. It is not even the problem of integration, although I have listened to the fantasies about integration which appear to be in some noble minds opposite. There could not be a more complete example of the integration of transport than London Transport. But the same pattern appears here as elsewhere: deterioration in certain services; growing congestion; and a continual rise in fares. This problem is part of the technological and social changes of our time. It should therefore not be viewed, I think, against a background of political dogma. Indeed, the noble Lord, Lord Morrison of Lambeth, in the course of his opening remarks was at pains to assert what he called his open-mindedness, and to say that we must avoid bias. My Lords, I repeat what my noble friend Lord Chesham (whose speech, if he will allow me to say so, I so much admired) said: that we heartily endorse the desirability of keeping our minds, so far as possible, free in this matter from unnecessary bias.

I wonder whether the noble Lord, Lord Morrison of Lambeth, was quite so unbiased as, in his innocent way, he would have us to believe. I noticed a good many phrases which seemed to me to bear some of the marks of the political theoretician, as he put it. I noticed that competition (a subject to which I will revert in a moment) in the noble Lord's speech was always preceded with the Homeric epithet of "cutthroat"—I beg the noble Lord's pardon: except on one occasion, when, as a change, it was called "costly". Private transport was referred to by the delicate phrase of "private transport anarchists". Government morality was described as, "Let every man look after himself!" Private enterprise, the noble Lord will find when he reads Hansard tomorrow, he described as "private ex-ploitation", Which he says, I think, is a sin and a conspiracy against the community.

I agree with the noble Lord that it is, on the whole, desirable to avoid bias of a political nature. But when he then goes on, having rebuked sin so effectively, to accuse my right honourable friend the Minister of Transport of bias, I think that he really should first remove the beam from his own eye. Indeed, I thought I detected a personal bias against my right honourable friend, since this is not the first time that the noble Lord has developed a personal attack against him. I should have expected the contrary to be the case, and therefore I was doubly disappointed in the noble Lord. My right honourable friend if the House will allow me to say so, one of the most remarkable men in public life to-day.

LORD MORRISON OF LAMBETH

I quite agree.

VISCOUNT HAILSHAM

Like the noble Lord, Lord Morrison of Lambeth, he has made his own way—and all the more honour to both of them for having done so! But I wonder whether the noble Lord, Lord. Morrison of Lambeth, has a prejudice against Conservatives who make their own way in the same way as he has done himself. The noble Lord shakes his head. But it will be within the recollection of the House how he sneered at the N.U.R. representative who made a speech at the Conservative Conference.

LORD MORRISON OF LAMBETH

No.

VISCOUNT HAILSHAM

Is the noble Lord quite so sure he is not guilty of the bias he condemns in others?

LORD MORRISON OF LAMBETH

I did not sneer at him.

VISCOUNT HAILSHAM

I am glad to hear the noble Lord's disclaimer, but it sounded on this side of the House remarkably like a sneer.

LORD MORRISON OF LAMBETH

I am sorry to interrupt, but I really did not sneer or wish to sneer at the N.U.R. representative at the Conservative Conference. I quoted him, and quoted the approval with which his speech was received, which surprised me. Perhaps the noble Viscount does not yet know enough about N.U.R. people who somehow stray into Conservative conferences for him to have clearer opinions.

VISCOUNT HAILSHAM

I will look at Hansard to-morrow.

LORD MORRISON OF LAMBETH

So will I.

VISCOUNT HAILSHAM

My recollection is that the noble Lord expressed personal displeasure at the fact that the Conservative Conference had an N.U.R. representative there, and it is my clear recollection of what the noble Lord said. But I am glad to know now, whether I am right or wrong, that he feels this is not the right mood in which to approach that sort of thing.

Of course, what is underlying much of what is said by noble Lords opposite (and I noticed that the noble Lord, Lord Morrison of Lambeth, Who is such a dab at Parliamentary tactics, omitted the actual phrase; but it was reiterated and spoken of again by the noble Lord, Lord Latham) is what the noble Lord, Lord Latham, referred to as "integration". This is the great belief. How, in view of this dogmatic belief in integration, they can claim not to be theoreticians, I do not know. Bat I want to be perfectly fair about this doctrine. The noble Lord, Lord Morrison of Lambeth, has believed in integration in transport, as the noble Lord, Lord Latham, calls it, all his life. And, of course, at first sight, it appears to be an attractive plan. You first of all have in the mind of one of these infallible gentlemen in Whitehall a perfect plan, a perfect pattern, according to which some things go by rail, some things go by road, and some things go both by rail and by road, being transported by a trailer.

This was the kind of picture which the noble Lord, Lord Morrison of Lambeth, built up. But I ask the House: are we so satisfied that there is such a perfect pattern anywhere to be found at the present time? Is there such a perfect man, or combination of men, who can tell the whole country how it is to transport its goods? Assuming that there is such a pattern, the noble Lord has not really faced the second issue, which is: supposing there is such a pattern, is it socially and politically acceptable in time of peace to compel other people to conform to it?

It is all very well to talk in terms of "cut-throat competition". Cut-throat competition in this connection is something I am going on to examine in a moment, but what it means in terms of plain English is that somebody can choose whether he sends a particular consignment by road or by rail. This is what is alleged by the noble Lord, Lord Latham, to be so wasteful.

LORD LATHAM

So it is.

VISCOUNT HAILSHAM

The individual freedom of choice between two methods of transport is apparently something in which the individual must not be permitted to indulge. The wise integrator in Whitehall, because he knows so much better, must tell him which he must use. I must confess myself a little puzzled at both the logic and economics of this type of argument. After all, the argument appears to be that the railways are so much less wasteful than the roads that it is altogether intolerable, since they cannot apparently provide a competitive service, that there should not be one provided compulsorily by the Government. But if, in fact, the service provided by the railways is competitive, why do not people choose it?

The noble Earl, Lord Lucan, who is always much more generous and gentle, if he will allow me to say so, than his colleagues on the Front Bench, suggested indirect methods. They have also been advocated in various other quarters. What it means is that, rather than send a man to prison or fine him, or refuse his consignment altogether, you should charge an extortionate and impossible price, deliberately and artificially, for the method of transport which you do not mean him to take. Personally, I do not find that very much better either. But this is the pattern of integration which we are asked to accept in preference to the freedom of choice to the rather modest extent that we have in fact introduced since 1953.

But I am so bold as to question whether the noble Lord, Lord Morrison of Lambeth, and the noble Lord, Lord Latham, and, indeed, the noble Lord, Lord Stonham, whose interesting speech I enjoyed, too, in talking about cutthroat competition are really describing at all the state of affairs which exists. They cannot be unaware of the system under which licences are granted to road transport—the transport of goods by road for hire or reward and, indeed, for that matter, the carriage of fare-paying passengers. It is the subject of a most elaborate licensing system. I am not quite sure whether it was not a licensing system invented by the noble Lord, Lord Morrison of Lambeth, himself. Applicants for new licences are required to prove need for their services. That is what the noble Lord made them do, and what they still have to do. Existing operators, including the railways, have a right of objection before the licensing authorities on the grounds that existing facilities are adequate for the traffic. The licensing authorities have quasi-judical powers, and in reaching decisions must have regard to the needs of the area as a whole.

I must say that, listening to the doleful tale uttered by noble Lords on the Front Bench opposite, you would think the railways are entirely inhibited in such matters, but I can assure your Lordships that this is not the case. The right of objection is freely exercised by the railways, both as to passenger and goods transport. When it fails to have the effect desired by the railways, this is because the service they can offer cannot reasonably, in the authority's view, meet the need—for instance, door to door, at the right price, and so on. The state of affairs which noble Lords have called Conservative "free-for-all" cut-throat competition and waste of our resources is really this very highly restrictive system of licensing in which just occasionally, once the licence is granted, the consignor of goods is allowed to choose between road and rail. Of course, the real fact is that the problem has nothing whatever to do with "A" and "B" licences at all. This belief, so genuinely harboured by noble Lords, that in that sense it is the road which is defeating the rail in competition, does not correspond with the case. It is true that there has been a slight, but only a slight, increase in "A" and "B" licences for hire or reward in the last ten years and, of course, a decline in railway traffic. But where has the decline gone to? The decline has not gone in the main to the "A" and "B" licences. It has gone to private transport, operated by firms themselves.

It is possible to argue, if one believes that one knows better than everybody else, that the numerous business concerns all over the country who in the last ten years have found, for one reason or another, that they prefer their goods to be sent in their own vans by road, do not know their own business. It is possible to believe that they are entirely misguided. But noble Lords opposite who have made such a moving plea against freedom of choice in such matters must forgive us if we preserve a decent scepticism. The reason why "C" licences have doubled in the last ten years and taken a bigger share of the traffic from the public operators is because, as has happened in every highly developed transport system, not only in this country but all over the world, private transport is in many ways more convenient and more economic than public transport.

Of course, in a war, where the pattern is limited by necessity and the problem is not one of extension or flexibility but parcelling out limited resources, it may well be that the policy of integration works, and worked. It may well have, been that it would have worked, though it would have been unnecessary, about 1895, when railways mere a natural monopoly and when the capabilities of road transport were constrained within the narrow limits of the horse. But this is not the case to-day. The pattern of transport all over the world is rapidly changing, and the man who thinks he can predict and constrain within a straitjacket the exact proportion between road and rail is a better prophet than the noble Lord, Lord Morrison of Lambeth, or the noble Lord, Lord Latham, can possibly ever hope to be or, indeed, than we should ever try to be on this side of the House.

There is another thing I should like to say as we develop this problem. I should have thought it was practically impossible to make an objective speech, a speech without bias, upon this important topic for 46 minutes, as did the noble Lord, Lord Latham, without making any reference at all to the deficits of the railway system at the moment, because it is that, and that alone, which has driven the Government to take the bull by the horns and to make, or to be about to make, a major departure of policy. It is all very well for the noble Lord to come here and say that the British Transport Commission is one of the largest industrial undertakings in the world, but one must view that in relation to its deficits. It is true that Imperial Chemical Industries is freer, but I.C.I. makes a profit. The situation which we now have to face is that, since 1948, Were has been only one year of a surplus, in 1952, when the surplus was only £3.7 million. In the last four years the accumulated deficit has risen from £57.5 million in 1956 to £84 million in 1959. The figures I have given are after charging interest on British Transport stock, but they exclude interest charges on borrowings from the Exchequer for capital purposes and to meet revenue deficits, which, by special statutory provision, is not charged to revenue for the time being. Arty true reckoning of the revenue position ought to allow for this interest, and when it is taken into account the deficit would have risen from £57.5 million in 1956 to £109.7 million in 1959.

How is it possible for noble Lords to castigate the Government without even making a reference to this tragic and urgent situation? The figures speak far themselves, and the worst of it is that since modernisation began things have gone from bad to worse and, as things now are, no real improvement is in sight—indeed, the figures for 1960 are expected to be substantially worse than those for 1959. When the Government four years ago decided, in very limited terms, which the noble Lord, Lord Latham, read out, to adopt the railway Modernisation Plan, not only did they begin to advance the necessary capital, but legislation was introduced designed to tide the Commission over what were then thought to be the difficult early years of modernisation by arranging for revenue deficits to be met by loans from the Exchequer, and for the Commission's revenue account to be relieved for the time being of certain interest charges. By the end of 1959 revenue deficits had accumulated amounting to £350 million, or, if you take into account interest on deficit advances under the 1957 Act, the total railway deficits were £400 million.

It was this disturbing situation which led my right honourable friend the Chancellor of the Exchequer to announce in the course of his Budget speech last April that future payments to the Commission in respect of their revenue deficits would have to be made above the line —that is, straight out of the taxpayer's pocket—as a continued financing of railway deficits by advances was no longer justified. For this purpose during the current financial year £105 million has been voted. This is the situation which led to the appointment of the Stedeford Group, to which I will return in a moment, announced by the Prime Minister on March 10.

It is in this financial context that we are discussing the transport problems of the country, and to my mind it is little short of astonishing that we had to listen to long lectures about integration and cut-throat competition and all the paraphernalia of Socialist dogma when what we are really discussing is an annual deficit amounting to £105 million. I would say this to the noble Lord: we do approach the problem from the practical point of view that this situation must be contained, and must be contained as soon as possible. It is not dogma which has led us to this view, it is sheer financial realism. And it is utterly untrue in this context to accuse my right honourable friend, the Minister of Transport, of having any kind of bias against the railways, because it is in this context that he has pursued—and I will quote the figures again—a policy which in 1960–61 allowed for a capital programme, from the taxpayer in effect, of £200 million, and this year of £175 million, compared with road programmes of £87 million and £98½ million.

Of course it is true, as two noble Lords have said, that these figures are not wholly comparable. The noble Lord is quite right to make the point that they include provision for rolling stock in the one case and not for vehicles in the other, just as I should be entitled to make the point, if I were to care to enter into this kind of debate, that one included land purchase and the other did not, and one included bulldozing of new tracks when the other used established tracks. What is material from the point of view of this argument is not the precise differences between road construction and railway modernisation, which I fancy are known to everybody in the country, but the kind of size of economic effort in each case which the Government are prepared to put behind both road and rail; and on that footing the figures are exactly comparable because they show the measure of the amount of money we are prepared to put in each kind of enterprise.

LORD LATHAM

My Lords, in addition to the comparison, in my view, being invalid because of the inclusion of rolling stock, there is the other point I made earlier in the debate and that was this: that the expenditure on the railways included up to 50 per cent. in respect of replacement and it is not new expenditure in the same sense as the expenditure on the roads is, and ought not therefore to be included in the figures to be compared.

VISCOUNT HAILSHAM

The noble Lord is quite entitled to the value of that point for what it is worth, but it does not, in fact, alter a jot or tittle of what I have been saying: that these two figures give a measure of the amount of economic effort measured in taxpayers' money which, year by year, the Government are putting into the two different systems. By that standard it is the case that we are being fair and we intend to be fair.

There is only one other thing I want to say on this part of the matter, because time is getting on and I do not want to keep the House too late. A great deal of attack was made upon the changes in the modernisation programme. I would only say this at this hour: from the very start it has been made plain that this programme would be subject to review in the light of experience and in the light of economic development. And one thing which again the noble Lord failed to mention—how it escaped his attention I do not understand—was the extraordinary, almost savage, attack made upon certain aspects of the matter in paragraphs 384 to 389 of the Select Committee's Report, and I must just refer to it. The Committee says: Both in view of the importance of deciding for the future what should be the size and shape of the railways and because of the very large sums of money involved, it might have been expected that, in the first place, fairly precise calculations would have been made by the Commission—

1. (i) of the additional net return to be secured by each proposal, and
2. (ii) of the overall profitability—after that proposal had been carried out—of the service affected by it;"—

I know the noble Lord, Lord Latham, thought the second was an impossible calculation, but that is not what the Select Committee thought— and that, secondly, these calculations would have been critically examined by the Minister of Transport and the Treasury before approval was given to the necessary borrowing. The evidence shows that the Commission duly calculated the additional net return on each Scheme ((i) above), but that they did not and, under their existing accounting arrangements, could not make the other calculation—that is, the estimate of profitability that would result. As to the critical examination by departments, this has only recently been undertaken—that is, more than five years after the Modernisation Plan began. Thus the financial test has not been fully applied. Your Committee do not overlook the number of examples they were given of how modernised equipment had led to improvements"— and so on. Then they say: Your Committee are surprised that the Ministry of Transport and the Treasury have not until recently examined the returns to be secured from the schemes for which they were lending public money. After a Report like that, which the noble Lord, Lord Latham, in his indictment of the Government, so unaccountably failed to mention, he attacks the Government for reviewing the Modernisation Plan which has come to be criticised so savagely by a Select Committee of the other House.

If I may venture one or two reflections of my own at this hour, I would begin by saying that the fact is that this country has an inadequate system of internal transport communication. Both roads and rail need a lot of capital expenditure. It is idle, and I think probably deleterious, to suggest that one is biased in favour of one rather than the other, when both are so much in need of investment. It is not a discreditable thing that they are. We suffered during the war for years from under-investment, and since the war we have tackled one after another of more serious problems. It would have been easily possible for my right honourable friend the Prime Minister not to build houses and to divert investment to the roads, but would any man without a heart of stone suggest that he should have done so? It would have been easy to slow up or abandon part of the school-building programme. Is that what noble Lords opposite would want? It would be easy to restrict or diminish the social security programme. These are the priorities of post-war Britain in successive Conservative Governments which are so sneeringly referred to as a "free-for-all" and Tory materialism. All the time we have had to sustain a burden of defence and aid for other countries seldom borne by a Government in time of peace.

If we are suffering from an obsolescent transport system, I should say that one ought to look to the fact that we are not materialists, that we are determined to play our part in the world, and we have honourably done so during nearly ten years of consecutive authority. Nor do I blame to that extent noble Lords opposite for their failure in this respect. But I would underline one criticism which the noble Lord, Lord Morrison of Lambeth, made of his own Party in this connection. I agree with him—and I can say so now because I said so in 1947, when he introduced the Bill—that even if the public ownership principle was a desirable one to apply to the rail ways, it was a great breach of public trust to buy the shares compulsorily at the top of the market and to spend Government credit on forcibly expropriating shareholders, when every penny of the money was, and would be, urgently needed for things like rolling stock and track. That was a mark of dogmatism in public policies. I am not the only one who thinks that it was a bad Act undertaken for political reasons. Indeed, again we find that one of the principles on which this was done for political reasons could be found in his summing-up speech.

But we are being twitted for having sought advice from the Stedeford Group. We wanted to take confidential advice from people whose judgment we trusted in a to-and-fro of confidential communication, before we acted. How I wish the Labour Government had taken a similar line before plunging into the Transport Act of 1947! But they did not. As Mr. Shinwell, who often blurts out the truth about such matters, said when he was in office at the time, We stated our principles when power appeared to be remote; but now that we have gained power, we recognise our limitations and shortcomings in the field of preparation. There has been, I regret to say, very little guidance on detail, and so we have had to improvise in the light of existing circumstances. Our future depends on the success of a bold experiment. It was this improvisation which reappeared in the speech of the noble Earl, Lord Lucan, "as a result of a long series of investigations, inquiries and replies"—I think I am quoting him almost textually. But Mr. Shinwell was having none of it, because in a second speech he went on to say: There was far too little detailed preparation for nationalisation. We found ourselves with legislation that had to be completed without a necessary blue-print on which we would have proceeded so expeditiously in the right direction". When one comes to more recent criticisms of noble Lords opposite by the younger members of their Party who are more in touch with the present generation, Mr. Crossman, for instance, said this year in Encounter: The public discredit into which public ownership has fallen is very largely due to the disregard of Socialist principles with which whole industries have been subject to management by remote centralised boards which Parliament is expressly forbidden to investigate or control. Unfortunately, before 1945 the Labour Party had done very little advance planning, and there was no blue print ready showing how the industries due for nationalisation were to be organised. The nationalised board, neither a public enterprise responsible to Parliament nor yet an efficient profit-making monopoly, is a hybrid, neither fish nor fowl. Whatever I may be saying about the public enterprise principle, it is nothing as savage as that; and whatever changes the Government may contemplate there is nothing so far-reaching as would be suggested by their junior colleague in another place. But, my Lords, the junior colleague is right. This Transport Commission, which the noble Lord refers to as one of the greatest and largest enterprises in the world, is in fact the body which his colleague condemns as a centralised board "which Parliament is expressly forbidden to investigate or control", and, in less agreeable terms, as "a hybrid, neither fish nor fowl". Is it now to be said that we cannot investigate the structure which noble Lords opposite have made?

The structure will be, and has been, investigated, and we will pronounce our policy very shortly. I am not permitted in any shape or form to anticipate it to-night, but it will be, in truth and in fact, based upon practical considerations and not upon dogma. We recognise that, as far in the future as we can see, we shall need an efficient transport system consisting both of rail and of road, and indeed, of the other factors which have been mentioned, for example, by the noble Viscount, Lord Simon. We shall be dictated to by the needs of the situation. We have no Clause 4 in our constitution, so we are not bound by absolute doctrine. We will not depart and we are not departing, from the principle of public ownership, despite the allegation made by the noble Lord, Lord Stonham, that we detest it. We assert the need for an efficient and modernised railway system as far ahead as we can see. We will, of course, seek to win co-operation and support from the trade unions.

LORD STONHAM

My Lords, may I interrupt for one moment? When the noble Viscount referred to something I said, was he then answering my point and saying that the Government in fact reject this allegation and are not going to hive-off the ancillary undertakings?

VISCOUNT HAILSHAM

On any question of detail I must ask the noble Lord to await the White Paper. On matters of principle, I said that we will not depart from the principles of public ownership. That is a general observation. It does not mean that nothing whatever can ever be disposed of. I do not know what would happen in that event. We will handle the question of the finance and the financial structure which burdens the railways, and we will free the railways, I expect, from a good many of the restrictions to which noble Lords have referred, although it would be quite improper for me to enter into any detail. Of course, we recognise, as I think my noble friend Lord Forbes pointed out, that there are areas in the country where railways are not capable of supporting a system which will be paid for entirely by the users.

My Lords, I hope that I have said enough at any rate to assert the true principles upon which we are acting. I myself have enjoyed the rigours of the debate. The noble Lord, Lord Morrison of Lambeth, need not fear that I shall ever complain of him that he has used the methods of the House of Commons against me. Now we are slightly on more equal terms than when he used to castigate me so severely when I was sitting on the Back Benches in this very Chamber, which was then technically "another place." But I hope that I have never lost my regard for him and that he has never lost his regard for me.

My Lords, with those remarks I should like to conclude by saying that we are doing our part, and will do our best to see that the future of British transport is such as everyone would like to see it.

LORD CITRINE

My Lords, may I ask the noble Viscount a question? He implied, in his references to my assertion that the Government had approved the Modernisation Plan, that that was not so; and I rather gathered that he was going to deal with that point in his reply. I wonder whether he would touch upon it.

VISCOUNT HAILSHAM

I do not think I said that. I said that they had given a limited approval to the Plan in 1956 but had made it clear at the outset that it would be subject to review in the light of changing circumstances and experience. Where I challenged the noble Lord was in his assertion that the Re-appraisal of 1959 had been approved by the Government. That, I said, off the cuff, I did not recognise as being true; and I have since been told from behind that I was, in fact, right in challenging the noble Lord: it never had Government approval.

LORD CITRINE

My Lords, the noble Viscount, of course, appears to me to be the perfect Parliamentary debater, and I am sure that he has verified his references. But I wonder whether he has seen the paragraph which occurs in the Report of the British Transport Commission for the year ended December 31, 1959, headed "Another Year of substantial progress". It is rather interesting, in the light of what has been said. This sentence occurs in Paragraph 5, giving the background to what the Commission are doing: It was therefore on the basis of principles and conditions which had been explicitly approved by Parliament or the Minister, that the Commission carried on in 1959 with their modernisation programme, with the evolution of the administrative and ministerial structure. That seems to be saying specifically that approval was given.

VISCOUNT HAILSHAM

My Lords, I do not think that that refers to the substance of the re-appraisal at all. It says what has never been in doubt: that, in general, of course, the Plan had our approval in 1956, subject to review. If I turn out to be wrong—and I shall certainly ask those who instruct me in such matters to look at it again—I will certainly write to the noble Lord, and, if need be, withdraw anything I have said which is amiss. But at the moment I am sticking to every word of it.

8.50 p.m.

LORD MORRISON OF LAMBETH

My Lords, I would express my appreciation of the concluding two sentences of the noble and learned Viscount's speech. He was very kind and courteous, and as he has been so in that part of his speech may I reciprocate as regards himself the feeling he expressed? It is always a pleasure to do battle with the noble and learned Viscount, whether in this place or another in which we both used to sit, and we have all enjoyed listening to him to-night. I think my noble friend Lord Latham can take comfort in the fact that he managed to stir the noble and learned Leader of the House up into what women call a "state". He was worked up, indignant and rather excited. I am not objecting; I like these characteristics. They are very human. But he certainly got stirred up, and I think perhaps the most enjoyable part of this debate was seeing the noble and learned Viscount the Leader of the House in a state of some moral indignation and sweeping condemnation. He could not even say "cut throat competition without getting fierce about it. But it is all right; it is a very human characteristic.

What disappointed me about the noble and learned Viscount's winding up speech—some people would call it a summing-up, but I should not call it that—was that, so far as I can recall, there was nothing constructive in it. There was plenty of unravelling, plenty of exposure, both of us and of the transport system of the British Transport Commission, but no indication of anything that ought to be done about it. Possibly the noble and learned Viscount does not know, or possibly Her Majesty's Government have decided not to do anything about it; and if they have decided to do anything about it, possibly it will be the wrong thing. But, as the noble and learned Viscount says, we cannot yet be told. We shall hear about it when the White Paper comes out.

I am sure the noble and learned Viscount has enjoyed himself. I should have enjoyed myself even more than I did when listening to his speech—and I did enjoy it—if he had had something positive and constructive to say and could have given us a gleam of light on how we are to get out of this most unsatisfactory transport situation. The noble and learned Viscount said there was a problem here, but he took great comfort in the fact that it was a problem in other countries too. That is true. The problem differs from country to country. In fact, chairmen of United States railway companies when I was last in that country, just a few years ago, were themselves asking for powers whereby they could abandon passenger traffic altogether on the railways. They were making money out of the freight but not out of the passengers. We have not yet got to that point here. But the noble and learned Viscount seemed to think that the fact that there were difficulties in other countries automatically justified Her Majesty's Government in making a mess of transport here. I do not think the fact that there are problems and tangles elsewhere justifies that at all.

The noble and learned Viscount the Leader of the House made much of my reference to cut-throat competition. I am not objecting to competition in the right place. In fact, I made a speech some years ago in which I said, "If we are going to have private enterprise, let it be enterprising; and if we are going to have competition, let us have competition in the real fields of industry, service and so on." But if this Government have done anything, it is rather to encourage the tendency to monopoly and restrictionism in private industry and to be awkward about public industry. It is one thing to have competition in some industries—and it may be a good thing; I am not saying it is not. But in transport it has to be proved that the competition—and it is cutthroat competition—is advantageous to the transport system as a whole.

We have advocated integration and co-ordination and, as the noble and learned Viscount said, we did that in London with both. Unfortunately, the private motor car and post-war economic inflation have made difficulties. The private car has become a problem, as Lord Ashfield saw when he was alive, running what was then called the London Traffic Combine. As the man who brought in the scheme for the London Passenger Transport Board I do not like public industries not paying their way, and I am sorry about it. But if the old competition had gone on it would have wrecked the public services of London, and the private services as well. Is it wicked for me to believe in integration and co-ordination but right for the late Lord Ashfield to have believed in exactly that?

LORD LATHAM

He acted.

LORD MORRISON OF LAMBETH

Indeed he acted in the building up of that considerable London Traffic Combine, and for me one of the embarrassments about him was that in building it up he had about him a high degree of public service, and limited very much the dividends to the shareholders in a way which did not altogether suit me as a Socialist agitator. But he believed in co-ordination and integration, and so did heads of private railway companies and a great many road transport people. Is it wrong for me to believe in integration and co-ordination while it is a dirty word for us to utter these things from this side of the House? I do not follow that at all.

I do not want to make a long speech because, as noble Lords say in this House, "This is a late hour"—although in another place they will go on for some hours yet—and I have an engagement to see a premiere of a film. It is a good thing I have seen it before, but I want to get there if I can. But what worried Lord Ashfield about London Transport —and the late Harry Gosling who brought in a Bill to limit it—was the cutthroat destructive competition going on between buses in London which were free to come on the roads of London if they were certified by the Metropolitan Police as being safe. Those "boys" came on, and they made some money. Those pirates were making up to about 60 per cent., and one could not blame them. Many of them were ex-Servicemen and they did not let you forget it, bless their hearts!

Lord Ashfield said, "If this situation goes on the quality of the service which the London General and the Underground can give will deteriorate as a result of this cut-throat competition, which will undermine the economics of the undertaking"—and they were trying to run that undertaking, even though it was privately owned, with public spirit. Lord Ashfield certainly was not a Socialist, although I converted him to the London Passenger Transport Board by having three afternoons with him on our own. Though he was not a Socialist he had a public spirit, and he saw that if that cut-throat competition went on it would wreck the public service which he was trying to give as a responsibility of his undertaking.

The noble and learned Viscount made much of the fact that the deficit on the railways has been increasing as a whole, steadily year by year. It is an interesting reflection that the longer this Government remain in office the more money the railways lose. I admit that it is a bit of a political opinion, but I believe that the Government have pursued policies calculated to damage the finances of the railways. They took away the profitable commercial transport, or a lot of it. They incited and encouraged all the competition they could manœuvre on to the roads; and I think it can be said that if we want public industry to pay we had better have the right kind of Government, one which believes in it. Therefore, we had better have another slogan: "Don't let the Tories ruin it!" After all, it is the case. There is an objection to charges of bias against the right honourable gentleman the Minister of Transport. I believe—and a lot of other people do too—that he has a bias; and it is rather significant that there has been a cut in the permitted capital expenditure of the railways and an expansion of the permitted expenditure on highway construction. That is why some people think there is the possibility of bias.

By the way, in connection with my reference to the Manchester-London Pullman, there was an additional good point: that they have shown a sense of public relations. That is something which I welcome and which has not at all times been evident: on the railways, whether under public or private ownership. When the train was only five minutes late in getting into London—and it did the journey very quickly—a man's voice came over the loudspeaker and he said: Ladies and gentlemen, we very much regret that the train is five minutes late. The cause is reconstruction of the track and we hope you are not being inconvenienced. We are going to have the White Paper, and I am told that some people who work in the British Transport Commission are saying to themselves, in great uncertainty, not knowing enough about it to be cheerful and not knowing enough to be utterly miserable, that they hope that as a result the British Transport Commission will have a nice White Paper Christmas. My Lords, I beg leave to withdraw the Motion, and I thank the House for the kindly consideration it has given to this important problem.

Motion for Papers, by leave, withdrawn.