Lords Sitting of 11 February 1960

Preamble
The House met at three of the clock, The LORD MERTHYR on the Woolsack.
Prayers—Read by the Lord Bishop of St. Edmundsbury and Ipswich
The Lord Mountgarret (V. Mountgarret)—Took the Oath.

THE M.1 MOTORWAY
3.5 p.m.
EARL HOWE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether their attention has been drawn to the criticism of the state of the hard standings on M.1 motorway; whether notice has been taken of the opinion of the Chief Constable of Buckinghamshire on the death of Police Sergeant G. Bickerton, when he stated that this police officer might be alive if the hard standings on M.1 had been efficient; whether the four chief constables of the other counties concerned have made a report; and, if so, what action is proposed.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF TRANSPORT (LORD CHESHAM): My Lords, the hard shoulders of grass construction on the motorway are still immature and not fully consolidated. My right honourable friend the Minister of Transport is aware that in places they have received much heavier usage that was expected and have suffered considerable damage in consequence. The Minister has heard with great regret of the death of Police Sergeant Bickerton while on duty on the motorway. He has received so far only a brief factual report on the accident in which this officer was killed, but all the chief constables concerned have commented adversely on the state of the grass shoulders in their reports about traffic conditions on the motorway, and have drawn attention to the difficulties which arise when heavy vehicles have to stop on the motorway in emergency. My right honourable friend is giving
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urgent consideration to the steps which can be taken to strengthen the construction of the grass shoulders.
EARL HOWE: In the meantime, my Lords, may I ask whether the existing regulations are likely to be modified so that everybody can know exactly what is going on? May I also be told how long it is expected it will be before the hard shoulders or hard standings can be so modified that they will be more satisfactory?
LORD CHESHAM: My Lords, so far as I am aware, I do not think it is intended to amend the regulations. So far as the second part of the Question is concerned, I am unable to say now when it is expected that the work will be carried out, but I did use the word"urgent" in connection with my right honourable friend's consideration, and I can assure the noble Earl that"urgent" means urgent.
EARL HOWE: I thank the noble Lord.

THE THREATENED RAIL STRIKE
LORD SILKIN: My Lords, on behalf of my noble Leader, I beg to ask the noble Earl the Leader of the House whether he has any further statement to make about the threatened railway stoppage.
THE LORD PRESIDENT OF THE COUNCIL AND SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (THE EARL OF HOME): My Lords, my noble friend will be making a statement at about half-past three or between half-past three and a quarter to four.

CANTERBURY AND DISTRICT WATER BILL [H.L.]
Read 2a, and referred to the Examiners.
MANCHESTER SHIP CANAL BILL [H.L.]
Read 2a, and referred to the Examiners.
OLDHAM CORPORATION BILL [H.L.]
Read 2a, and committed to a Select Committee.
BUDE-STRATTON URBAN DISTRICT COUNCIL BILL [H.L.]
Read 2a, and committed to an Unopposed Bill Committee.

BUSINESS OF THE HOUSE
THE LORD PRESIDENT OF THE COUNCIL AND SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (THE EARL OF HOME): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That Standing Order No. 35 be considered in order to its being dispensed with for the purpose of taking the Second Reading of the Mexborough and Swinton Traction Bill after the Second Reading of the Air Corporations Bill.—(The Earl of Home.)
On Question, Motion agreed to, and ordered accordingly.

AIR CORPORATIONS BILL
3.12 p.m.
Order of the Day for the Second Reading read.
THE PAYMASTER GENERAL (LORD MILLS): My Lords, I beg to move that this Bill be now read a second time. The purpose of the Bill is to increase the authorised borrowing powers of the British Overseas Airways Corporation from £160 million to £180 million, and those of the British European Airways Corporation from £60 million to £95 million. The Air Corporations Act, 1956, fixed the limit of the Air Corporations' borrowing powers at £160 million in the case of the British Overseas Airways Corporation and £60 million in the case of the British European Airways Corporation. The new limits referred to in Clause 1 of the Bill are expected to cover the Corporations' borrowing requirements over the next four years; that is, up to the end of 1963–64.
Before explaining these additional requirements in some detail I should
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first like to say that the expenditures with which these increased borrowing powers are concerned are due in the main to developments which have been continually taking place in air travel, and will provide for the opportunities which are before the Air Corporations to participate to the fullest extent in the growing importance and scope for air travel and freight. As an indication of the growing use of civil aircraft, B.O.A.C. and B.E.A. together are carrying substantially more traffic. Last year, for instance, B.O.A.C. increased their percentage of transatlantic passenger traffic from the United Kingdom from 39 per cent. to an estimated figure of 42 per cent., and hope to do still better.
When the present limits were fixed by the 1956 Act, they were intended to cover, in the main, payments for aircraft which the two Corporations then had either on order or under consideration. On the 1956 estimate it was envisaged that B.O.A.C.'s net borrowings would reach a peak of just under £160 million in 1960–61. Because of changes in their requirements, and because it became necessary to spend more than was anticipated in 1956 on other items, including buildings, ground equipment, routine aircraft modifications and some subsidiary companies, and because B.O.A.C. will have less money than was anticipated from the sale of piston-engined aircraft, the Corporation may well exceed their present borrowing limit fairly early in 1960–61, instead of, as had been anticipated, at the end of 1961. B.E.A. expect that their net borrowings will exceed their limit of £60 million some time during the summer of this year and will reach about £69 million by the end of 1960–61.
During the four years up to the end of 1963–64 B.O.A.C. will have to provide, in all, some £83¼ million for capital expenditure, of which some £71¾; million is in respect of aircraft and spares, £3½ million on miscellaneous buildings, notably at London Airport and Victoria Air Terminal, and £8 million on miscellaneous ground equipment and modifications to aircraft. B.E.A.'s capital expenditure during the same period is expected to amount to £62½ million. Of this amount, £47¼ million is in respect of aircraft and spares, £8¾ million on premises, notably on a Training Centre at Heston and on permanent buildings

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at London Air Terminal, Cromwell Road, and some £6½ million on miscellaneous ground equipment and routine modifications to aircraft.
During the four-year period, B.O.A.C. expect to find from internal resources about £63 million of the £83 million they require, and B.E.A. expect to find from internal resources about £27½ million of the £62½ million they require. The reason why B.O.A.C. are finding a higher proportion of their capital expenditure from internal resources than B.E.A. is purely fortuitous. Both corporations normally depreciate their aircraft on the same basis—the historic cost over a period of seven years to a residual value of 25 per cent. It so happens that, due to the incidence of aircraft deliveries, B.O.A.C. will be setting aside relatively more depreciation during the four-year period than B.E.A.
The payment in respect of aircraft to be delivered to the Corporations to 1963–64 covers sums in respect of B.O.A.C.'s purchase of D.C.10s, the final payment for Boeing 707s, and for B.E.A.'s payments in respect of the D.H.121's, the Comet IVBs's and Vanguards. The cost of the new jet aircraft is undoubtedly heavy, but there is every evidence that they are proving highly successful in inducing traffic. The Corporations have to undertake expenditure of this magnitude in order to keep abreast of the fundamental changes which are taking place in the pattern of world air traffic.
Clause 1 (2) of the Bill is really a consequential provision designed to make clear that Section 1 (2) of the Air Corporations Act, 1956, shall refer to this new limit of B.O.A.C.'s borrowing powers. Your Lordships will remember that this provision was inserted in the 1956 Act for the avoidance of doubt and to give B.O.A.C. specific power to borrow from the International Bank for Reconstruction and Development or the Export-Import Bank of Washington. In fact this power has not been used and it seems improbable that it ever will be. At the same time, it seems right that the legal position should be maintained. In any event the power will not be used without the Government's specific consent. The Bill does not confer upon the Corporations any absolute power to borrow up to the prescribed
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limits. Treasury consent is required for all individual borrowing, and my right honourable friend is responsible for advancing money under Section 42 of the Finance Act, 1956.
This Bill provides an assurance that our air lines will not be hampered by the lack of finance necessary to ensure that they can provide regular air services of the increasingly fast, safe and comfortable nature which are necessary to maintain and, I hope, to improve our position in the air. I trust that the Bill will meet with your Lordships' approval and consent. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Mills.)
3.22 p.m.
LORD SHACKLETON: My Lords, in the absence of my noble friend, Lord Pakenham, it falls to me to welcome this Bill on behalf of my noble friends on this side of the House. It is, of course, a limited Bill and it might be possible, as is sometimes done in another place, to extend this debate into a full-scale examination of civil aviation. But we really are in the position to-day of a meeting of shareholders called for the special purpose of increasing the authorised capital of the company of which we are members. I had thought until recently that we were in the position of a rather special group of shareholders who were not able to vote quite as freely, and that it was in fact a Money Bill, but I understand that this Bill has not been certified and is to all intents and purposes an ordinary Bill.
I think there can be no controversy about the necessity for the Bill or, indeed, about the case the noble Lord, Lord Mills, has made for granting this particular increase. Some of the financing, as we know, has been done by the Corporations out of their own resources, and it is, of course, open to nationalised industries to do this. They are in the same position again as a company in the private sector of industry; the Acts do not require them just to break even, but at least to break even, and it is satisfactory that some financing should come in that way. But quite clearly the bulk of new development of this kind is likely to have to come from the taxpayers' pocket, even though it comes in a rather special way. It does not come, of course, by a direct raising

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of money for the particular purpose provided for in the budget, but is shown as below-the-line expenditure. In the earlier days of these two Corporations they did, I think, make certain public issues which went to the market; but subsequently this procedure was found to carry a number of disadvantages and I am quite sure, despite various suggestions to the contrary that have been made for the revival of public issues, that it is simpler and generally more clear-cut for this money to be found directly from the Exchequer. For this view we have the authority once again of the Report of the Radcliffe Committee. They were quite specific on this point; that it was simpler that this should be so; that there were serious disadvantages about such issues coming on to the market, and that in the long run it was better for the Exchequer to provide the money.
There have been one or two suggestions, in view of the losses that have been made by these Corporations from time to time, particularly in the earlier days, that there should be some form of equity issue. That idea has been worked out in a good deal of detail, and has been canvassed from time to time. I do not see how, however this equity issue might be made, whatever kind of share it be, whether it he a form of stock similar to the index bond, or whatever it is, it can really carry any advantages. I think the present situation is as clear-cut and simple and, on the whole, as honest as any we could choose.
We are in a position to look quite clearly at the accounts of these Corporations and to see what they are doing. And we are, again in the analogy of shareholders, in a particularly good position because of the very exhaustive account given of the Corporations' activities. I would particularly commend the example that these two Corporations set in giving an infinite amount of information and with great frankness. There has been criticism from time to time, and in particular there has sometimes been criticism of the Chairman of B.O.A.C. I would particularly commend the statement which the Chairman of B.O.A.C., Sir Gerard D'Erlanger, makes at the beginning of the Annual Report as a model which might well be followed sometimes by chairmen of private com-
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panies. It certainly pulls no punches and conceals no skeletons in the cupboard.
One can indeed question the way in which this money is to be spent. I think we might very quickly (because to-day is not the occasion to go in for a full-scale debate on civil aviation) look at the measure of success and the measure of difficulties which the two airlines have had to face. B.O.A.C. in particular have been faced with serious difficulties. They have been faced with the difficulty of the great disappointment and delays over the introduction of certain aircraft, particularly the Britannia, and also the earlier disasters over the Comet. One point for consideration again—and we have a recommendation on this matter from the Select Committee on the Nationalised Industries—is whether the cost of development of new aircraft does not perhaps fall too heavily on the Corporations and places them at a disadvantage compared with their foreign competitors who use American aircraft.
It is a fact that, broadly speaking, airlines like K.L.M. buy their aircraft"off the peg", whereas B.E.A. and B.O.A.C. spend a good deal of money on development. Even with an aircraft like the Viscount, which went into service a good deal more easily than some aircraft, I believe the cost of development was something like half a million pounds. It is bound to be so. Extra care has to be taken, and there is the time spent between the inspections and maintenance. Whereas in the early days engine maintenance may be necessary once every 400 hours, by the time other operators buy it the time interval may be as much as 2,000 hours. This is a cost that is borne by these two great Corporations. It represents, in some respects, a subsidy to private aircraft manufacturers. I am not grumbling about it; we must have these aircraft. But it is important, as I am sure all noble Lords will agree, that where there are subsidies they should not be concealed ones; and this is a form of subsidy.
Again, there are certain other charges that fall on these Corporations. A good deal of the trouble for B.O.A.C. in the past year or so has been the loss on the associated companies. These associated companies in which they participate have played a useful part in building up B.O.A.C.'s own traffic: but clearly the loss that was being sustained

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was running at an unacceptable rate. We have the same analogy for British European Airways. Noble Lords will be familiar with the fact that, here again, there is another subsidy on the internal lines, particularly in Scotland, which amounts to about £350,000 per annum. Another recommendation from the Select Committee on Air Corporations recommends that it should not be absorbed in the accounts of British European Airways, but should be met in the Annual Estimates of the appropriate Departments. That seems to be a simple and reasonable proposition. On the w hole—I am not necessarily speaking for all my noble friends in this matter—I am inclined to think that it is probably a good thing that B.E.A. do carry that cost. After all, it is a publicly-owned body; it exists at the request of, and was created by, the community, and one of the advantages of this organisation is that they can do so. The alternative, of course, would be to give a special subsidy—the sort of subsidy that is given to some private operators like MacBrayne's who provide a different form of transport in the Highlands. But I think, here again, that it is important to recognise that British European Airways are carrying out this particular social service.
On the whole, the situation, particularly for British European Airways, is an encouraging one. We know that in the past calendar year they have made a £2 million profit. Of course, that is a smaller profit than would be shown in the accounts of a company in industry, because the interest—the very high rate of interest, even though no doubt it is the appropriate rate—which is charged by the Government for the money that is borrowed is, in fact, paid before they show that profit. So I think we can reckon that they are getting good results. I have no doubt that British Overseas Airways, too, will overcome the difficulties that they have had. Already there are signs, particularly—and this is important—in the economy that they are at last getting on the engineering side which has been a particular headache for British Overseas Airways.
There is only one further point that I should like to make at the end of these remarks—namely, that my noble friends and I are a little concerned about the Government's future policy with regard
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to the new air licensing authority. I understand that shortly we are to have a Bill. That, of course, will be the time to go into it in detail. I have no wish to-day to revive the controversy between the independents and the Corporations; we each have our particular principles or prejudices in the matter. On the whole, it seems to be settling down not too badly. The independents are certainly doing fairly well. They complain of lack of security, but they are getting, I am told, about one-third of the traffic in and from this country.
But we are investing a great deal of money in these Air Corporations. We are investing our own money and there is a great deal at stake. It will be no good if B.E.A. and B.O.A.C. continue to develop their productivity, either by improving their load factor as they have been able to do, or by buying new and expensive aircraft, if they are not going to be able to sell their product. We shall look with a good deal of interest at this Bill when it comes before this House because it will certainly be disastrous if the success of these Corporations, which is so important to this country, which is such a factor in the development of the aircraft industry, and is so important from the point of view of overseas earnings, was in any way damaged. In conclusion, therefore, I would urge the Government to continue the good work and continue to invest in success in these Air Corporations.

THE THREATENED RAIL STRIKE
3.37 p.m.
THE MINISTER WITHOUT PORTFOLIO (THE EARL OF DUNDEE): My Lords, with your Lordships' permission I will now give the Answer to the Private Notice Question on the threatened rail stoppage, which was asked by the noble Lord, Lord Silkin.
Since my right honourable friend the Minister of Labour made his statement yesterday which I read to your Lordships, he has met representatives of the British Transport Commission. He has, therefore, now seen all the parties concerned and has had a full statement of their views. His officers have again met representatives of the National Union of Railwaymen and the British Transport Commission this morning and, at his request, all parties have agreed to hold

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themselves available for further talks. My right honourable friend and his officers are continuing their efforts to find a basis for a settlement. My right honourable friend hopes to make a further statement in another place tomorrow.
3.38 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I am grateful to the noble Earl for the statement he has made in reply to our Private Notice Question; and I should like to say how much I appreciate the indication in the Answer of the steps which are being taken by the Minister of Labour in order to try to facilitate the kind of discussions which will, we all hope, lead to a peaceable settlement of this most unfortunate and tragic situation.
I should, however, just like to say this. It might be well for us to put to the Government—I think this will also be done in another place—certain points that seem to us to stand out. First of all, we should have a clear view as to what are the desires of the main parties who must be brought together in securing a settlement. I put them in this order, as being the obvious desires. The dispute is raised in this matter by the National Union of Railwaymen. What is their desire? Their desire is to be made completely sure of a certain minimum increase. They have asked for it to be paid at once, and perhaps that might be secured. But what they want especially to be assured of, if there is a different date from this general statement"at once", is what is the actual general amount of any payment that could be authorised before the more detailed consideration, after publication, of the Guillebaud Report. That is the first point.
Then there is the desire of the other two union organisations concerned—the Railway Transport Salaried Staffs Association and the Amalgamated Society of Locomotive Engineers and Firemen—to have, at the same time, a complete certainty that the proper differentials between grades and scales, which of course will be among the points examined in the Guillebaud Report, will be secured in the immediate discussions of that Report when available; and also that the money required to meet the differentials will still be forthcoming.
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Thirdly, there is the desire of the main party concerned, that is the British Transport Commission themselves, to be assured that the money will be available, with the approval of Her Majesty's Government, to meet all these requirements. The fourth desire—and I put this perhaps as the greatest of all, and one which will appeal to everybody—is the desire of Her Majesty's Government., and I am sure of Parliament and the nation, to secure that there will be no such interruption in the life of the nation, no such enormous damage by such a stoppage, to the national production and employment, with its economic setback all round, and perhaps a far greater loss to the nation as a whole, plus all the inconvenience, than would be incurred by getting an agreed settlement now and avoiding a dispute altogether.
It is for that purpose, in putting those points to the noble Earl, that I hark back to the point mentioned by my right honourable friend Mr. Robens in another place yesterday. We appreciate most highly all the efforts that have been made by the right honourable gentleman the Minister of Labour—indeed he has seen everybody—but what we asked for in another place yesterday was to have a top-level conference of representatives of these interests I have indicated—Her Majesty's Government, the British Transport Commission and the Unions concerned, and, I would add, Mr. Guillebaud, Chairman of the Committee whose report is so fundamentally important in the whole situation. With the right honourable gentlemen the Ministers of Labour and Transport present at that top-level conference it seems to me that we should have an excellent opportunity of rounding off the work already done by the Ministers and of getting something hammered out in that one top conference. If they will do that I am sure that not only the House but all the nation will wish them well.
3.44 p.m.
THE EARL OF DUNDEE: My Lords, I am most grateful to the noble Viscount for the care he has taken in expressing these views, and I can assure him that my right honourable friend is doing everything that is humanly possible to avert a stoppage.

AIR CORPORATIONS BILL
3.45 p.m.
Debate resumed.
THE EARL OF SWINTON: My Lords, I should like to add my support to the Bill which my noble friend has introduced and for which he has made out, I believe, an unanswerable case. I think we should all agree that these air corporations must have the best aircraft, and if they are to have the best aircraft obviously they must have the money to pay for them; and they are very costly machines. I am also very glad to note, if I followed my noble friend aright, that these new orders which are being placed are entirely for aircraft of British construction. I feel that that is extremely satisfactory, because the airlines and the aircraft industry are inseparably linked together. The airlines must have the best aircraft and the industry must produce the best aircraft if they are to supply on a competitive basis. So it is very satisfactory that, when Her Majesty's Government come to the House for borrowing powers, we are told that the money is to be used for British aircraft, in which we can all have complete confidence.
LORD SHACKLETON: My Lords, may I interrupt the noble Earl? I thought that some of this money was going on Boeing 707s. Perhaps the noble Lord the Minister would confirm that.
LORD MILLS: My Lords, the position is that in the period covered by this Bill there are to be certain payments in respect of Boeing aircraft delivered; but all the new orders are for British aircraft.
THE EARL OF SWINTON: My Lords, I am glad to have that point cleared up. Of course, the Boeing aircraft which have been ordered are being paid for, but I understand that that is being done out of money which has already been provided by Parliament under existing borrowing powers. I believe I am right in saying, however, that the whole of this new money which we are being asked to authorise to-day—and the sum is enormous—will go for British aircraft. It is very satisfactory to know that, after all misfortunes which that promising Comet encountered, the new Comet IV is apparently entirely satisfactory and is winning great praise as an
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efficient, economical and beautiful aircraft. And, judging by experience, I think we can all feel equally confident that the great new Vickers jet, which I believe is called the VC.10, will be as successful as the other Vickers aircraft of the turbo-prop type have been.
I feel it is not inappropriate, also, to express I am sure what we all feel—our satisfaction at the amalgamations which have taken place between the aircraft firms. Those amalgamations of the main producers of jet aircraft (helicopters, of course, are separate) into two great groups will give financial strength, and also strength in design and research which will enable them to face the great cost of this hazardous but vitally important industry. I think the companies and the Minister are both to be congratulated on that result.
I should like to put to my noble friend two questions which are interrelated. The Minister spoke about the rate of depreciation and, if I followed him correctly, said that the Corporations were following their existing practice of depreciating aircraft over seven years to reduce them to a value of something like 25 per cent. I should like to ask him whether he considers that that is a sufficient depreciation to-day. It is very dangerous to put a theoretical value on obsolete aircraft when we have finished with them. It may be said (though I do not know) that an obsolete jet aircraft will have a much greater value in the jet age than an obsolete piston-engined aircraft. But we want to play for financial safety in these matters, and certainly not only the British air corporations but, I believe, air corporations all over the world placed a wholly exaggerated value on piston-engined aircraft, because as jet and jet-propelled aircraft were coming in, piston-engined aircraft really become mere scrap—certainly nothing like 20 per cent. or 25 per cent. of the initial value. I think it would be wiser and more realistic (and I agree with so much of what the noble Lord, Lord Shackleton, said on this) if the rate of depreciation which was shown every year in the accounts was, we were satisfied, ample to meet all reasonable risks, so that at the end of the time enough money would have been put by to make, or almost entirely to make, the new purchases.

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If I may say so, I also agreed completely with him on the idea of putting in some equity capital, or calling it equity capital. Of course, if we were going to appeal to the public—which I think is quite impracticable, apart from what Lord Radcliffe said—to subscribe for equity capital, there would be something to be said for it, for then you would have real equity capital. But as for merely saying,"The Government have found £150 million or £200 million and a lot of that, or some of that, was lost, or is likely to be lost, and we had better call 20 per cent. equity and 80 per cent. borrowing and pass the dividend on the 20 per cent.," I quite agree with him, and I am glad there is such sound financial and economic probity on those Benches. I quite agree that that would be specious and rather dishonest, and that we had much better go on in the present way, doing our borrowing and providing for a proper depreciation.
The other related question I want to put to my noble friend is this: is he satisfied that the aircraft in these Corporations are being used to the best advantage? Let me explain what I mean. I think that all who have been concerned with this matter would agree that the time an aircraft spends on the ground is time lost; it is losing money on the ground; and the obsolescence of aircraft in any case is very rapid. For all those reasons it pays to"flog" an aircraft, to run an aircraft as frequently as one can, of course without prejudice to most thorough overhauls at all the proper dates when overhauls are required. But, subject to that, it is certainly good business to"flog" the aircraft and to get as many working hours, flying hours, out of it as one can. I should like to ask my noble friend—I am sure he must have the figures—how in that matter the Corporations compare with other companies.
The noble Lord, Lord Shackleton, quite rightly said that we ought to consider to-day the financial position and still more, perhaps, the financial prospects of these Corporations. I agree with him. They look reasonably satisfactory. One does not want to be too optimistic, but I think that the outlook is pretty good. B.E.A. have certainly done pretty well. It is no reflection on them to say, I think, that
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on the whole they have had a little more luck and an easier job than B.O.A.C. have. The noble Lord, Lord Douglas of Kirtleside, naturally shakes his head. I am not detracting from the credit which gravitates and to which they are fully entitled, but I am not quite sure that he really did quite so well as he made out.
I read in the Press (I may have read it rather too hurriedly) that his Corporation—and all credit to it and honour to it!—had made a profit of £2 million in a year. Was that the whole financial year of the company? I am not quite sure. I rather think it was not. I think that it may not be going at that rate. It is the full financial year which one ought to take in order to find out where one is; and if a profit at the rate of £2 million had been made during the time when flying is good and one can get a lot of passengers, in the summer, quite a lot of that is going to be wiped out in the lean months which inevitably come in the winter time with the fog and snow.
LORD DOUGLAS OF KIRTLESIDE: My Lords, may I interrupt the noble Earl? The £2 million profit was made in a complete year, a complete calendar year, 1959, which included of course the first three months, the lean months, of 1959. It was a complete year.
THE EARL OF SWINTON: Of course, if the financial year is going to show £2 million profit then I have no criticism at all. All I would say is that it is important, as I think we have all found in business—and indeed it is true also in politics—to realise that on the whole it is wise to understate rather than overstate your success, because then your shareholders and constituents alike are very pleased when they find they have it better than they have even expected.
I think that B.O.A.C. had a good deal of bad luck. It had bad luck in its aircraft, as has been said, and it had bad luck in having to operate in some pretty disturbed areas, as well as financial difficulties with some of its subsidiary companies. Certainly every effort should be made to economise on those subsidiaries, and possibly to shut some of them down. I say"possibly", because-it may well be that there is a national interest or a Commonwealth interest in keeping a service going, even though it

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is showing a loss. These things interact with one another, and it may be—I think probably it is—the case that where we find a subsidiary or associated company which is not working to a profit it nevertheless carries passengers who join up with a main line and feed that main line, so making it profitable or more profitable.
I have dealt with the question of equity capital. While I think we can have confidence in the quality and the performance of the aircraft that are coming forward, we have to fill them; and that, I believe, is the most uncertain factor at the present time. It is true that air travel is becoming more common and more popular, but these new aircraft are going to be bigger aircraft, they are going to be faster aircraft. They will be able to carry more passengers, and carry them more rapidly, particularly if we run as many services—as we ought to do—with an aircraft as we can. But we cannot run that number of services unless we can fill them, and to fill them we have to offer fares—there will always be luxury ones—which the passengers either can afford or are willing to pay.
I am bound to say that I.A.T.A. seems to me to have been pretty unsatisfactory about this, and rather like the old Mining Association of Great Britain, where one seemed always to have to regulate the thing to suit the most inefficient partner. To say,"Oh, no. All the fares have to be kept up so that anybody can make a living" (though I very much doubt whether he will make a living if we keep the fares up too much) seems to me to be pretty hard on the efficient people and very inconsistent with the trend of freer trade and freer competition that is supposed to be blowing through the world at the present time.
I should like to ask the Minister how much we can do on our own in this matter: how far we are bound on all the routes by rates to which we have to get the agreement of this"united nations" of air countries, and how far we can"go it alone". I am pretty sure—in fact, I am quite sure—that wherever we can"go it alone" we ought to"go it alone"; not only because it will be good business for us but because, if we are right in our contention that lower
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fares (not ridiculous fares, but lower fares) are going to attract more business—and, after all, salesmanship in the air is no different from any other form of salesmanship; you make your success by selling a larger quantity at a lower price—and we are successful in the areas where we can act on our own, then we should be both setting an example and proving a case which it would be much more difficult for the international conference to reject.
I have only one other question to ask the Minister, and it is this. I do not believe much in buying very expensive freight aircraft—at least, I should be very doubtful about that, particularly having regard to the way aircraft are developing to-day. The passenger aircraft to-day can carry an increasing amount of freight, and as these aircraft are so costly it is probably much better that you should have an aircraft which is both a passenger carrier and a freight carrier. You will probably do much better in that way than by buying extra freight aircraft which you might easily not be able to fill—and it is no good only half filling them. I suppose that it is the same with freight as with passengers: you must get a 75 or 78 per cent. load, or whatever the figure is, in order to get an effective payload. But I want to ask the Minister this question: if, on international routes, we are bound as to passenger fares by international agreement, does that also apply to freight, or are we entitled to charge any rate we like for freight which we are carrying around the world?
I put those questions to the Minister because I think they are relevant to the debate to-day, but they in no way detract from the general support which I give to this Bill—and here I think I express the sentiments of the whole House—or from the very good wishes we extend to the Corporations and to the aircraft companies which serve them.
4.3 p.m.
LORD MILLS: My Lords, I am sure we have all listened to the speeches by the noble Lord, Lord Shackleton, and by the noble Earl, Lord Swinton, with great interest and with great encouragement. The noble Lord, Lord Shackleton, likened this to a meeting of stockholders. I am sure that, if all such

1205
meetings could get as much help from their stockholders as he gave to this one, they would go better than some of them in fact do. It is quite true that while we should aim at these Corporations providing as much out of their own resources as possible—and they do—the whole world of aircraft has been moving at such a pace, and it has been such an expanding trade, that they are like any other business in the same situation. They have to get increases of capital; and the object of this Bill to-day is to provide an authorised increase against which they can draw as they need it. I was glad to have the statement by the noble Lord that the present method of financing seems about right, with which I think the noble Earl, Lord Swinton, concurred. I was glad to have his tribute to the completeness of the accounts and the frank way in which everything they did was shown.
The noble Lord referred to the cost of proving and development, and I can assure him that that is a matter of which my right honourable friend the Minister is well aware. There has been a big burden falling upon the Corporations in that respect. I do not think there is anything wrong about that. There may be different views as to whether or not the Corporations should be relieved of it, but for the moment they have borne it, and that should be taken into consideration in looking at their results. The noble Lord referred to the B.O.A.C. losses on subsidiary companies, as, indeed, did the noble Earl. They were very heavy last year in the case of B.O.A.C., but the position looks much happier now, and it is expected that the losses will be very considerably reduced.
Then the noble Lord referred to the Scottish air lines. Of course, the services to the Highlands and the Isles are unprofitable, and the reason is pretty obvious. But every well-conducted business—and I think we should all like to pay a tribute to B.E.A., which is a very well-conducted business—has to bear such services and has to do unprofitable trade if it is going to give the service which is expected from it. Although I cannot speak for the noble Lord, Lord Douglas of Kirtleside, who is here to-day, I am sure he is quite happy to render such a service, even though it reduces his profit—for last year to £2
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million. I am sure he would not wish to be subsidised.
The noble Lord, Lord Shackleton, also referred to the question of economy in engineering, as the cost of engineering was one of the matters adversely affecting the B.O.A.C. results. B.O.A.C. are making very considerable progress in that direction. They are co-operating with their engineers, and the results are very encouraging and should be, and I am sure will be, better still. Then the noble Lord referred to the question of the proposed new air licensing authority which was mentioned in the gracious Speech. That is having the consideration and the attention of my right honourable friend the Minister of Aviation, and I am sure he has very much in mind not only the need to keep the public Air Corporations, in which this country has a very great stake, profitable, expanding and satisfactory in every way, but also the fact that the independent air lines, too, should have the opportunities of making reasonable profits and of being a credit to this country. I am sure he will take a balanced view of the situation, having regard to the very good arrangements which have existed between the Air Corporations and the independents hitherto. The Air Corporations have taken a very proper view of their responsibilities and I do not think that the position has been an unhappy one.
The noble Earl was good enough to pay a tribute to British aircraft, and the Corporations, so far as lay in their power, have encouraged and bought these aircraft. He was also good enough to pay tribute to my right honourable friend on the arrangements he was making to bring aircraft manufacturers into groups, two for airframes and two for air engines. I am sure that my right honourable friend will be glad to have the support of my noble friend, who knows so much about this subject and whose encouragement is so well worth having.
The noble Earl asked me a question about the rate of depreciation: do I think it is sufficient? I have always taken the view that one ought to be as generous as possible on depreciation, even if providing adequate depreciation means making losses. I have no doubt that when these depreciation rates were fixed they looked adequate, but, on the other hand, I have no doubt that they

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have proved to be, if anything, on the inadequate side, because I agree with the noble Earl that the rate of depreciation should be enough to cover the purchase of new aircraft, but of course only to the extent that there were existing aircraft, because any expansion of the fleet has to be provided for in other ways.
Then the noble Earl referred to an important question, the question of using the aircraft to the best advantage, and he pointed out that time lost on the ground was, in fact, money lost. But that applies not only to the Air Corporations; it applies to every business. I wonder whether we ever stop to think how many hours our plant in this country lies idle. This is just the same problem. The noble Earl asked me how the Corporations compare with other lines in this respect. I am afraid that I cannot answer that question, but if the information is available I will see that it is transmitted to the noble Earl.
THE EARL OF SWINTON: My Lords, I think that this would be of very general interest, and perhaps when he has the information the noble Lord will let me know, so that I may put down a Written Question and the Answer can appear in the OFFICIAL REPORT.
LORD MILLS: Yes, My Lords, I will follow that course.
LORD SHACKLETON: My Lords, I understand that the B.E.A. load factor is the highest in Europe.
LORD MILLS: My Lords, I was glad to hear that remark and also the noble Lord's remark that in his view the outlook is pretty good. If my noble friend had not given him the information about the good results for the last year, I would have given it myself. The noble Earl referred to the position of B.O.A.C. and said that in looking at their accounts we should have in mind the bad luck they have had in regard to aircraft—delayed deliveries and the tragedy of the Comet I, about which we all know. But I hope that all this is now behind us.
The noble Earl also referred to the operations of subsidiary companies in
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disturbed areas. This, too, is a factor which must be taken into account. B.O.A.C.'s associated companies, which run the subsidiary interests of the Corporation, lost £3·1 million. The main element in that loss was the political troubles in the Middle East generally and in the Lebanon, perhaps, in particular. The outlook for the future seems brighter. Traffic has recovered from the 1957–58 slump and the loss of the associated companies for 1959–60 is not expected to be more than, say, £750,000, which is a big improvement. I think that the noble Earl is quite right in saying that the outlook seems pretty good.
The noble Earl also referred to the question of low fares and to I.A.T.A. It is because my right honourable friend and the Air Corporations (perhaps I ought to put the Air Corporations first) realise the importance of low fares that they have put so much energy into I.A.T.A., so far without the results they hoped to get. The noble Earl asked me how far we can"go it alone". The Minister of Aviation announced in another place on December 15 that he had decided to authorise B.O.A.C. to introduce economy fares on the cabotage routes—the West Indies, Africa and the Far East—and discussions are being held with the local authorities concerned on the date of the introduction of these services. I think that shows that the whole matter is very much in mind. We appreciate what the noble Earl has pointed out: that low fares are important, if we are to take advantage of the ever-growing desire of people to travel by air and attract them to our lines. The noble Earl asked me whether we were free in regard to freight. Again, I would supply the answer to that question when I have had an opportunity of looking into it. I think that we have had a useful debate. I am sure that my right honourable friend will be grateful for the support he has had in your Lordships' House.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

MEXBOROUGH AND SWINTON TRACTION BILL [H.L.]
4.20 p.m.
LORD GIFFORD: My Lords, in moving the Second Reading of this Bill I think I should say, first of all, that, while I have no interest in the company concerned in this Bill, I am a director of another subsidiary company in the same group. In the normal way the Second Reading of a Private Bill of this kind would be a purely formal matter, and the Bill would then be referred upstairs to a Private Bill Committee; but as the Lord Chairman of Committees said yesterday, in this case there are special circumstances and one or two noble Lords desire to speak on the Second Reading. In view of this, I am sure your Lordships will forgive me if I briefly explain the objects of the Bill and why I think that it should unquestionably receive a Second Residing to-day.
This Bill has a quite simple object; that is to say, the replacement of trolley buses by public service vehicles—and"public service vehicles" as your Lordships know is the technical term for omnibuses. The area in question, between Rotherham and Doncaster, is an almost entirely urban area in five boroughs—namely, the urban districts of Mexborough, Swinton, Rawmarsh, Conisbrough and Bolton upon Dearne. Your Lordships will be aware that it has been the policy throughout the country, as well as in London, to replace trams and trolley buses by public service vehicles, which are more economical, more flexible and give a better service to the public. Similar changeovers have been dealt with by various Bills in recent years, such as the Llanelly and District Traction Act, 1952, the Hastings Tramways Act, 1957, the South Lancashire Transport Act, 1958 and, just about a year ago, the South Wales Transport Act, which gave authority to close the Mumbles railway and replace it with buses.
I believe that there is no unusual point of principle in this Bill, and it only does what has been the practice in many places during the last few years. There are, however, two Petitions against the Bill. I do not for a moment wish to speak at length about these, because it
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is right and proper that they should be dealt with in much greater detail, and with full evidence, before their Lordships under the well-known Private Bill Committee procedure. Perhaps, however, I may say briefly what these Petitions are. There is one by the British Transport Commission which relates to the responsibility for reconstruction and maintenance of certain bridges. The Transport Commission wish to be satisfied that when redundant apparatus, such as trolley poles and overhead lines, are removed there will be no damage to the bridges or other structures belonging to them. This point, I am sure, can easily be dealt with in Committee.
The other Petition is by the Rawmarsh Urban District Council. Your Lordships will recollect that a few moments ago I mentioned that there were five urban district councils concerned with this Bill, but only one of them has raised any objection. It is true that if and when this Bill passes into law certain rights of the, councils will be extinguished—that is to say, certain rights of purchase. These rights of purchase have come up at various times and none of the five councils has wished to exercise them. Further, there are other rights which the council have to ensure that the vehicles on the various routes should be adequate for the public. While the councils will no longer have the direct right, if this Bill is passed into law, they will have it indirectly through the Traffic Commissioners. This method is in operation throughout the country for public service vehicles, and there is no reason to believe that the Rawmarsh Urban District Council would not be able to ensure adequate services. The other thing of which they wish to be sure is that the streets and highways are properly restored after the company remove the poles and overhead wires; and that, also, I think can easily be done. I do not propose to say anything further about the Petitions, because they will, I hope, be dealt with in Committee.
Before I sit down I should like to say something about the general principles. I am sorry that it falls to me to have to go into these. Until yesterday I did not realise that the task I had undertaken would be anything more than a formal one. However, I think it is right for me to read to your Lordships one paragraph from Halsbury's Laws of England and

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one from Erskine May which to my mind have a direct and definite bearing on today. Paragraph 784 of Halsbury's Laws of England says this:
"Effect of second reading of private bill. In neither House is it possible to state (as may be said of a public bill) that the principle of a private bill is unconditionally affirmed by the House on second reading. The House agrees to the second reading of the bill on the understanding that the reasons for passing it into law are explained to the satisfaction of the committee which is appointed to inquire into its merits."
The other quotation I wish to make is from Erskine May:
"It is unusual for the second reading of a private bill to be debated in the Lords. Where a debate does take place, however, the House has in recent years invariably upheld the principle that the decision of the committee on the bill should not be prejudiced by discussion on second reading, unless the House has come to the opinion that, whatever the local circumstances may be, the powers conferred by the bill should not be allowed to the promoter. There is, further, some reason to suppose that the House has regarded as a legitimate subject for debate on second reading the introduction of a totally new principle in private legislation."
As I have already shown, quite clearly, there is no new principle involved in this Bill. In fact, it is a principle which has been upheld by a number of Committees and a number of Acts, which I have already mentioned.
I believe that there are no grounds whatsoever—and I hope your Lordships will agree with me in this respect—for refusing this Bill a Second Reading. In conclusion, I would remind your Lordships that there will be another opportunity on Third Reading if any noble Lord wishes to debate the matter further, after the Bill has returned from the Private Bill Committee. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Gifford.)
4.32 p.m.
LORD MERRIVALE: My Lords, at the outset I should like to say how glad I am to see the noble Lord, Lord Mills, in his place to-day, because it is approximately two and a half years ago that I led a delegation before him with a view to encouraging the retention and development of electric traction for passenger road transport. I must say that he listened, obligingly, and with much patience, to some lengthy arguments which were put before him. I am
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also glad that the noble Lord, Lord Citrine, should be in his seat to-day, because he was the recipient of some of the suggestions put forward on that day.
During the course of the Third Reading debate on the South Wales Transport Bill, the noble Lord, Lord Douglas of Barloch, made what I thought were some rather pertinent remarks, in that the Bill raised an important question of principle—namely, whether a series of Private Bills might not go through Parliament which, in the course of time, would completely alter the nature of public transport. I believe those words to be equally true to-day and, apart from the question of principle, I think this Bill raises a matter of policy. This is the last undertaking for which Parliamentary approval need be sought for the discontinuance of trolley bus services. All the other undertakings which operate trolley buses are municipal undertakings, and if they wish to discontinue their trolley bus services Parliamentary approval is not required. Therefore this is the last opportunity that your Lordships or Parliament will have of voicing an opinion, one way or the other, on the merits or demerits of electric traction for road transport.
That leads me to two important aspects: first, that of electricity, which is dependent in the first instance on coal: and, secondly, that British industry is still exporting trolley bus installations overseas. I think that is a very important point indeed. I know a number of firms who have contracts which are being discussed at the moment, and they may be injuriously affected if we continue to withdraw trolley bus services. With regard to the point about electricity, as is well known to your Lordships it is the major support of the coal industry. Electric traction under the Modernisation Plan is one of the main features which will redeem the future of British railways as a paying concern. The Central Electricity Generating Board is spending large amounts on providing atomic power stations, and these will have to be economically loaded round the clock. Here, of course, electric traction can play an important part, for there is no more economic electric load than the traction load, as I have said. Passenger electric road vehicles are operated, on an average, between 16 and 20 hours per

1213
day, while railways using electric traction operate round the clock.
There is another aspect, and that is the aspect appertaining to electricity and coal. This undertaking is operating in the West Riding of Yorkshire, which is a mining district; and the power stations which are mainly supplying this undertaking are, I believe, the generating stations of Doncaster, Mexborough, Neepsend, Sheffield and Rotherham. All these stations are coal-fired. I know that by the flick of a switch, or the snapping of a switch, one can obtain current from the, other end of the country. But I am advised that those stations which are coal-fired are those which are mainly supplying this undertaking.
I should like now to return to the question of overseas buyers, because I think that is a very important matter indeed. I know that the industry is worried by the continual, or fairly constant, withdrawal of trolley bus services, not only from the point of view of the supply of trolley bus services overseas, but also on the question of the supply of overhead equipment, and so forth. In view of the decision of the London Transport Executive with regard to trolley buses, I would point out that Moscow Transport now operates the largest trolley bus undertaking in the world. Overseas buyers might be tempted to see how they operate their services and what their equipment looks like and, therefore, place orders there. From that point of view, I feel that it is most regrettable that our trolley buses should be disappearing from the streets of this country. Last year, in Paris, at a Congress of the International Union of Public Transport, the general manager of the Moscow transport undertaking spoke very highly indeed of electric public road transport, in view of the high performance provided by electric drive. I do not doubt that his words were heeded by many of the representatives who were there from countries all over the world, especially in view of the fact that the Conference was delayed owing to the Russian application being put in late. SO already the speech of the General Manager had created a certain extra interest, because the Conference was delayed and one is not so used to hearing Russian at these Conferences.
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To turn now to the Bill. In the Preamble the same arguments are put forward as in the past. I should like briefly to refer to page 2, and there at line 20 it says:
"And whereas the requirements for passenger road transport within the districts within which the Company are at present operating services of trolley vehicles would be met more efficiently and economically by public service vehicles co-ordinated with the other services of public service vehicles operated by the Company".
It is rather interesting when they say"co-ordinated with the other services of public service vehicles operated by the Company", when one thinks that this undertaking has 30 trolley buses and only 14 motor buses.
LORD GIFFORD: My Lords, may I interrupt the noble Lord for one moment? I have here a little map of the area which shows how impossible it is to co-ordinate services using two different types of vehicle. That is one of the reasons why there are fewer omnibuses than trolley buses, because they are more flexible and more efficient over the same route.
LORD MERRIVALE: My Lords, those are arguments which have been put forward in the past for motor buses—flexibility and so forth—by those who are in favour of diesel operation. But trolley buses can be flexibly used and they also are more economical. I say that, in view of the remark of the noble Lord, Lord Gifford, in the course of his speech.
Here I should just like to quote very briefly some words that were said by two leading transport managers in this country: one is the transport manager of Reading Corporation Transport and the other is the transport manager of Bradford Transport. Mr. Evans, at Reading, says:
"Trolley buses can be operated to give a greater margin of profit than motor buses and the Corporation Transport Committee have been more than justified in their policy to operate trolley buses on routes where the density of loading requires a fairly frequent service. In addition to which, in a county borough of the semi-residential nature of Reading, due regard was given to all advantages of the trolley bus, such as lack of fumes, smooth and silent running, and other points in their favour, which cannot be assessed for a profit and loss account"—
although he does go on to show how the trolley buses made a profit and the buses made a loss. Mr. Humpidge,

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from Bradford, said in the course of a speech which was made at Portsmouth to a meeting of the Institute of Traffic Administration:
"Anybody with brains can make a trolley bus run cheaper than a motor bus."
Those two gentlemen operate trolley buses and motor buses.
With regard to Clause 3 (2) of the Bill, this subsection refers to the safeguard provided by the Traffic Commissioners. Here I should like to stress that I do not wish in any way to criticise the Traffic Commissioners; I wish only to draw attention to the fact that a similar clause was inserted in the South Wales Transport Bill, on the instigation, I believe, of the Select Committee. What I am trying to stress is that that Bill became an Act at the end of July, and at the beginning of September the Traffic Commissioners were perfectly satisfied that alternative transport would be provided which would meet the needs of the public. With those few remarks I will conclude.
4.40 p.m.
LORD HAWKE: My Lords, I have no interest to declare in this matter. We have just listened to my noble friend, Lord Merrivale, and I believe he has a deep sentimental interest in this subject; in fact, I believe he is the chairman of some organisation which exists for the preservation of certain types of older forms of transport, and we cannot grudge him his final innings. We rather regret it is to be his final innings. It is news to me that this is the last Private Bill that can be presented in this matter.
It seems to me that the only point that can be put at issue on a Second Reading in your Lordships' House is whether the replacement of trolley buses by motor vehicles is, or is not, against the public interest. If such a replacement should involve any parties in the loss of any rights which they now have, then undoubtedly the position can best be argued by counsel in front of the Private Bill Committee upstairs, and for that reason I will not take up any points, such as those concerning the Traffic Commissioners, which the noble Lord has raised, but confine myself entirely to the public issue.
In this matter it seems to me that there has been a degree of evolution. In Victorian and Edwardian days in this
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country dwellings and places of work, factories, tended to be concentrated in comparatively small areas of dense population. Mechanical transport was on fixed lines between and around those centres, on rails, and was run by steam or electricity. In later years we have spread out; both population and work have spread. I believe it to be a good thing. It has been a geographical and a biological necessity. There are far more of us, and the centres were too congested already. The advent of transport not tied to lines has been both cause and effect of this change. It has helped the dispersion, and at the same time it is a result of dispersion. I admit that the transport vehicle not confined to lines—in other words, the passenger bus—is not a perfect vehicle. I agree that in smells it compares unfavourably with the other two types I have mentioned, and in noise it certainly compares unfavourably with the trolley bus. But it has this supreme advantage: that it is not tied to fixed lines; and that vital attribute allows transport to follow the people where they dwell and where they wish to work.
LORD MERRIVALE: My Lords, may I interrupt the noble Lord. Buses do have fixed routes and they do not just drift off in the country like the"Titfield Thunderbolt" or something like that. Also there is a second point: that trolley buses, if they do become de-wired, can operate under their own electric power for about half-an-hour. Therefore they can easily go back on to their wires.
LORD HAWKE: Yes. Of course, I admit that bus lines are usually scheduled to run along certain routes. But if, by any chance, people start living in a different place, the bus can follow them; it does not have to carry with it an immense capital structure for carrying its power. Flexibility is, I believe, the prime necessity in local transport to-day. It is only the road buses which can give this flexibility and enable through services to be run from the new housing areas to the shopping centres, the factories and so on. In this flexibility the internal combustion engine bus holds the field for the time being, and for some years ahead, for urban transport. I believe further development will take place and that the internal combustion

1217
engine will in turn give way to the electric vehicle again, but this time either powered by electricity stored in it by new methods, or by electricity generated in it by quite revolutionary methods. But those things are many years ahead still. Then, we shall get the best of both worlds, because we shall get the silence of the electric vehicle together with the operating flexibility of the internal combustion engine.
In this undertaking there has been progress. There was conversion from electric tramways to trolley buses in about 1927. I think everybody would agree that that was progress. Now this is further progress, and it is that progress which my noble friend wishes to interrupt with what I believe to be rather specious arguments. One of his principal arguments was that the overseas trade in trolley bus parts and equipment may be prejudiced. I would remind him that we are enormous exporters of passenger buses, and I do not believe that we can convince the world that progress is wrong from the fact that we may delay it in this country. I do not believe that there is any reason whatsoever to deny this Bill a Second Reading on the Floor of this House, and I am certain that if any rights have been aggrieved which should be set right, it can be done in the Committee upstairs.
4.54 p.m.
LORD DOUGLAS OF BARLOCH: My Lords, I certainly would not wish to deny this Bill a Second Reading; I think that is only right. When I ventured to intervene in the discussion we had some time ago upon the South Wales Transport Bill, I referred to the fact that by Bills of this kind there would be effected a change from one method of transport to another. But I was not aware that so soon afterwards we should have a Bill which, I understand, is for the abandonment of the last existing company trolley bus service. That being the case, I am afraid that there is nothing to be done to save trolley bus services so far as company traction is concerned. What the local authorities will do about it I do not know, but I will take this opportunity of reiterating the point that it does not appear to me now that, in consideration of matters of this kind, there is much opportunity, except perhaps by a debate such as this upon
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Second Reading, to protect the public interest generally.
I admit that there is ample opportunity under our procedure to protect local interest, and, as I understand it, one local authority has petitioned against this Bill. What it has to say will, no doubt, be carefully considered by the Select Committee to whom the Bill is referred. But all that goes before these Select Committees is a conflict of local interests, whatever they may be. No doubt in this case the Promoters are convinced that they will make more profit by having buses operated by diesel or petrol engines, as the case may be—probably diesel engines—than if they continued to operate a trolley bus system in which the motive power was electricity. But, as the noble Lord, Lord Merrivale, has pointed out, all this has involved a change from the utilisation of electricity for traction purposes to the use of oil which has to be imported. Circumstances can arise in which the importation of oil may present great difficulties—in time of war, for example, or if some trouble should arise in the Middle East, which is by no means impossible, which would cause the Suez Canal once more to be blocked. These are real considerations of public importance, although no doubt they are technically beyond the scope of a Select Committee in considering one isolated Bill like this.
There is also the point, which no doubt can be taken before the Select Committee, that if this public transport system is powered by diesel engines there will be thrown into the atmosphere quite considerable quantities, not merely of foul-smelling gases, as the noble Lord, Lord Hawke, has stated, but of gases which are positively poisonous and probably cancer-producing. I know that we are quite accustomed to all this today. Motor vehicles of all kinds are being put upon the streets in increasing numbers day after day, so much so that we become quite indifferent to it. Nevertheless, it is a real problem; and in my opinion our people are being steadily but gradually poisoned where they are confined in large centres of population, and where there is a considerable flow of vehicles along the streets which they have to use. That is a consideration to which somebody ought to give real

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attention. It is by no means a laughing matter.
As I said just now, the importation of oil for power is something which can be interrupted. Of course, there is a school of philosophy which says that if there is another war, we shall all be wiped out and that it does not matter whether we get any oil or anything else into this country. That is a conceivable point of view, but I think that that is too pessimistic a point of view and that we should not throw to the winds all considerations of what might happen in such circumstances. I know that it can also be said that the British Transport Commission are introducing diesel traction on to the railways. But, happily, so far as fumes are concerned, that does not affect the general public to the same extent as having them on the roads. Broadly speaking, the railways are running through places where there are very few people adjacent to the actual railway lines to breathe in the fumes which diesel engines emit. It has also been shown that there are many cases in which electric traction is economic and advantageous in the public interest—and so it appears from the programme put out by the British Transport Commission. That may not be so in this particular local case—I do not know—but there is something more important in all this than whether this particular company makes more or less money, and I hope that somebody will think about it.
5.1 p.m.
LORD SOM̃ERS: My Lords, this Bill, though apparently of little importance or significance, seems to me one which deserves very careful consideration before any hasty judgment is made. My noble friend Lord Gifford, speaking of public service vehicles, defined them as"omnibuses". I must point out to him that a trolley bus is just as much an omnibus as is a motor bus."Omnibus" does not define what power drives the vehicle. My noble friend went further and said that motor buses were more economical. There, I am afraid, I cannot agree with him, and later on I will show your Lordships some figures which, I think, will prove that very much the reverse is the case.
As we have been reminded, we have quite recently seen another electric
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transport concern—the Mumbles Railway—dissolved. I believe that the chief argument for that dissolution was the cost of maintenance, reconditioning and upkeep. There may or may not have been some justification in that case: I have not gone into the figures sufficiently thoroughly to know. But certainly that cannot apply in the case of this present Bill. I will not waste your Lordships' time by going into the various details of the rights held by the company and the various urban district councils through which the line passes. I want to emphasise only one aspect.
Why is it that this company, and others, seem to be so anxious to do away with electric traction? After all, we have been talking for some years about electrification on the railways as a great step forward.
LORD HAWKE: My Lords, may I interrupt the noble Lord to give him the answer? It is because the company want to run vehicles in situations other than where they have an overhead line.
LORD SOM̃ERS: My Lords, I agree. I understand that; and I accept the fact that they are tied to their overhead line. I will come to that in a moment. I will mention just one or two of the advantages which trolley buses have over motor buses. First of all, the cost of maintenance is very much lower, because, of course, the mechanism of a trolley bus is simple to a degree in comparison with that of a motor bus. Apart from the main bearing of the motor, the only two friction points are the brushes, which can be replaced in a matter of minutes; and, of course, the trolley bus does not require the constant and periodical service which a motor bus requires. The internal combusion engine is a mass of complications which needs constant looking to if it is to be kept in proper order.
Secondly, as my noble friend Lord Merrivale has pointed out, the source of power is coal and not oil; and when we have a source which is there, on the spot practically, it seems foolish to depend on a fuel which has to be imported. When one considers the very uncertain conditions which prevail at the moment in the Middle East, from where most of our oil comes, it makes any policy which would rely 100 per cent. on our oil assets look rather foolish. Not hag ago we had a debate on the coal

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situation, and it was pointed out that production was far exceeding consumption. Surely, here is an opportunity to use some of our coal for which we cannot find any use. Thirdly, a trolley bus has a very much greater power of acceleration than a motor bus, and in a bus service, involving constant stopping and starting, that, of course, is a very great asset. That is why electric traction has proved so successful on the suburban lines in London, where trains have constantly to stop and start. Fourthly, a trolley bus has about double the life of a motor bus and that, again, makes for fewer replacements and much greater economy. Lastly—two minor points—the trolley bus is silent; and what a boom that is in this world of noise! Also, as the noble Lord, Lord Douglas of Barloch, has pointed out, it does not emit diesel fumes.
With all these points in view, can anyone honestly say that it would be an advantage to part with thirty trolley buses and replace them with motor buses? The average cost of a motor bus is somewhere in the region of £4,500 (I obtained that figure this morning from a well known firm who produce a large percentage of the motor buses in this country) so that, if there are to be thirty of them, that would make the cost somewhere about £135,000. Realising that, it seems rather foolish to adopt the view that the motor bus is going to be more economical. I am too much of a newcomer to your Lordships' House to know whether or not it is in order to refuse this Bill a Second Reading. I do not think the arguments of the noble Lord, Lord Gifford, were very sound, in that this Bill certainly does involve a change of policy, and therefore I do not think it would be out of order to refuse it a Second Reading altogether. But certainly I hope that the Select Committee will consider this proposal very seriously.
5.9 p.m.
THE CHAIRMAN OF COMMITTEES (LORD MERTHYR): My Lords, it is not for me to take sides in this dispute or to act as an advocate either for the Second Reading of the Bill or to the contrary. I am here to-day only, if I can, to help the House to decide the question at issue; and I hope and believe I can do that very shortly. The case for the Promoters of this Bill can, in
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my judgment, be expressed no better than by my reading a quotation from the Preamble which has already been read. Perhaps your Lordships will bear with me if I read it again, because it seems to me to sum up in as few words as possible the reasons why the Promoters require the Bill. It says on line 20 of page 2:
"… the requirements for passenger road transport within the districts within which the Company are at present operating services of trolley vehicles would be met more efficiently and economically by services of public service vehicles co-ordinated with the other services of public service vehicles operated by the Company."
My Lords, that, very shortly, is the case, and we have heard the speeches of those noble Lords who do not accept that that Preamble ought to be approved.
I should like to draw the attention of the House, because I think it is very important, to another part of the Bill which has also been mentioned and that is subsection (2) of Clause 3. That subsection provides that this service which now exists shall not be discontinued until the Traffic Commissioners have been satisfied by the Promoters that, to put it shortly, an equally good service has been provided by the Promoters for the public. So that, as the noble Lord, Lord Merrivale, was good enough to acknowledge, the Bill contains that safeguard which the House may think is an important one; and the noble Lord, Lord Douglas of Barloch, will no doubt be interested in that because he mentioned the interests of the local inhabitants.
My Lords, there are, as has been mentioned also, two Petitions set down to this Bill, as I stated yesterday; but the fact seems to me to be important that neither of these Petitions goes to the root of the Bill. They deal, I think it would be fair to say, generally, with details. Particularly is that so in the Petition of the British Transport Commission. I can assure the House that the points raised in the Petition of the British Transport Commission are details which are essentially ones for a Select Committee.
With regard to the Petition of one of the five local authorities which are undoubtedly affected by this Bill, that of the Rawmarsh Urban District Council, perhaps your Lordships will forgive me if I read one paragraph from that Petition. I read part of paragraph 16, and

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this again sums up in fewer words than I could the main point in the case for the Petitioners—I do not say the only point by any means, but the main point. It says:
"Your Petitioners would … be deprived of their statutory rights, in common with other local authorities, to purchase the trolley vehicle undertaking and the omnibus undertaking.… No compensation will under the Bill he payable to your Petitioners in respect of the abolition and extinguishment of their statutory purchase rights."
I would only note there that the other four undertakings have not seen fit to petition against the Bill, and as I understand it they are affected in the same way as this one urban district council. And, of course, the question of compensation is one, I would suggest to the House, for a Select Committee to hear and decide.
On the main subject of the debate this afternoon, I would say only this. It seems to me, if I may say so without the slightest disrespect to anybody, to be really a doctrinaire question, the question of whether electric traction should be superseded by motor traction. And I say this. The noble Lord, Lord Som̃ers, I think it was, questioned whether it was in order for the House to refuse a Second Reading to the Bill. It undoubtedly would be in order for that to be done. But at the same time I might point out that it is extremely rare for this to be done. I believe—though I have not checked it lately—that it has been done four times in this century; that is, a Second Reading to a Private Bill has been refused.
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My Lords, I suggest that the real test is this. If your Lordships are prepared to say that, whatever the local circumstances are, a Second Reading ought to be refused, then the House would be entitled to act accordingly; that is, I repeat, whatever the local circumstances are. But if the House is not prepared to say that, then I would respectfully suggest that undoubtedly it would be right and proper to give a Second Reading to this Bill. I do not think there are any other matters upon which I can assist the House, but if there are, and if they are raised, I will do my best, needless to say, to deal with them.
5.15 p.m.
LORD GIFFORD: My Lords, in view of the very lucid statement of the position by the Lord Chairman of Committees I do not think that there is anything very much that I wish to add. I would say only this: that his predecessor, a very wise man, the late Lord Mersey, happened to be the Chairman of the first Select Committee on which I sat. He gave me a piece of advice and said,"What you have to decide, Gifford, is what is going to be best for the people in the area covered by this Bill." In my view, what the Bill sets out to do would be to the great advantage of the people in the area concerned. Therefore, my Lords, without saying any more, I hope that your Lordships will agree that this Bill should now be read a second time.
On Question, Bill read 2a, and referred to the Examiners.
House adjourned at seventeen minutes past five o'clock.