§ VISCOUNT HAILSHAMMy Lords, with the permission of the House, may I crave your Lordships' indulgence to interrupt the debate in order to inform your Lordships of a statement about the position of the British Transport Commission which has just been made in another place by my right honourable friend the Prime Minister? The operative part of this statement is as follows:
"The position of the British Transport Commission has to be considered in all its aspects—commercial, financial and social. From the commercial point of view, the expansion of the economy has not led to the recovery in railway earnings which might reasonably have been expected some years ago. The carriage of minerals, including coal, an important traffic for the railways, has gone down. At the same time there has been an increasing use of road transport in all its forms.
"The British Transport Commission's total deficit has increased very rapidly over the last five years and now amounts to some £350 million. For the calendar year 1960 the deficit is estimated at £80 million, which includes interest on British Transport stock. This reflects an operating loss on the railways which on present performance is estimated at £45 million, and includes allowance for the 5 per cent. interim addition to the wages bill. In addition to the £80 million there is the interest on the advances to meet accumulated deficits. This is now running at about £15 million.
"The Report of the Guillebaud Committee on railwaymen's pay, set up jointly by the Commission and the trade unions, has now been presented to them. The Government have been informed by the Commission that they have proposed that the Report should be studied in the normal negotiating committee of the industry. It is a subject of considerable complexity, for it deals not only with the level of wages but also with the grading of jobs and differential wage rates. The implications on the finances of the British Transport Commission will have to be taken into account by the Government 1017 in considering what action to take as regards the present difficulties of the industry.
"The Government accept the objective underlying the Report of the Guillebaud Committee—that fair and reasonable wages should be paid to those engaged in this industry. At the same time others also must accept corresponding obligations.
"The Commission, the trade unions, the public and the Government will all have to co-operate in this new approach."
- "(i) The industry must be of a size and pattern suited to modern conditions and prospects. In particular the railway system must be remodelled to meet current needs, and the modernisation plan must be adapted to this new shape. Those working in the industry must accept this. This is the only way of bringing about conditions in which a fair reward, not only in terms of money, but of satisfaction with their job, can be secured.
- "(ii) The public must accept the need for changes in the size and pattern of the industry. This will involve certain sacrifices of convenience, for example, in the reduction of uneconomic services. Some increases will also have to be made in fares and charges, and the Commission intend to take action in this respect as soon as possible. It will also be necessary to examine urgently the question of relieving the industry of restrictions aria obligations which limit the Commission's earnings and prevent them from making the best use of their resources.
- "(iii) The Commission must accept a radical alteration of its structure, so as to secure a more effective distribution of functions and a better use of all its assets. Measures of reorganisation should include decentralisation of management so that individual undertakings, including the regions of the British Railways, should, as far as practicable, be made fully self-accounting and responsible for the management of their own affairs. The detailed application of these principles to all the Commission's undertakings is a matter of urgency and will be worked out by a special planning board. Legislation, as well as administrative action, will certainly be required. This planning board
1018 will be appointed by the Government and will report both to the Government and to the Commission. Meanwhile the Commission are securing expert advice on the question of regional accounting for the railways. - "(iv) Finally there is the problem of finance. Here there is both a short-term and a long-term problem. In the short-term the problem is to devise interim financial arrangements to enable the railway system to be carried on until the necessary reorganisation can be made effective. The Government are now considering what form these should take. In the long-term the financial arrangements must depend on the size and structure of the undertaking, and must indeed form an essential part of the general reorganisation. The life and trade of the nation require a railway system, but it must not be allowed to become an intolerable burden on the national economy.
But, says my right honourable friend in conclusion,
"I feel sure that they are in the mood to do so."
§ 3.59 p.m.
§ VISCOUNT ALEXANDER OF HILLSBOROUGHMy Lords, it is very useful to your Lordships' House to have this statement made. It at once appears that it has two aspects. In many of its paragraphs it is very tentative; in other paragraphs clearly it is intended to take very wide powers for alterations of considerable substance. I do not think it is possible in present circumstances, without a great deal more thought about this matter and without having further indications of the way in which the Government intends to develop this policy, to say much about it to-day. But I should like to ask in the first instance whether this very long and strong reference to what is almost like a reconstruction of the railways there is any intention to move away from the present situation, to any great change other than making them administratively independent. I hope it is not going to be taken out of the general ambit and final 1019 accountancy and appraisement of the central board as a whole. I think there ought to be some mention of that.
I am a little concerned about the double reference, in two consecutive paragraphs, to the size and pattern of the industry, and then a little later, the little homily to those who are employed in the industry. I hope there is to be no question, apart from closing some uneconomic branch lines, of so reducing the size of the industry as to interfere with its strategic value—that is of great value to the nation; strategy is most important—and also no intention by Government action still further to injure the overall economic position of the railways by carefully hiving off the most profitable of their undertakings. I think that would be a great disaster.
I also deplore the absence at present of any indication—I do not know whether any basis is going to be followed—of a real plan for the integration of our transport in its general and combined service to the needs of the nation. The last thing that struck me was that there are two or three items in this statement which refer specifically to urgency. I am not quite sure that the same aspect of urgency is attached to the consideration of the wage problems still to be settled as the result of the Guillebaud Report; but I hope very much that they are not going to be so long delayed, or so interfered with by Government action, as to re-exacerbate the feelings of the railwaymen.
§ VISCOUNT HAILSHAMMy Lords, the noble Viscount referred to the statement as "wide and tentative". I think the supplementary question (if that is what it could be called) merits both epithets. It is a little difficult to know to which of his remarks the noble Viscount really wants me to attend in my reply. Clearly, the Government regard the whole question in all its bearings as urgent. I think the interim payment, which has incurred a certain amount of criticism in some quarters, was evidence of that. As regards the question of overall strategy, I should have thought the last words of my right honourable friend made it plain that we regard an effective and efficient railway traffic system as vital to the life of the nation, and I think it would be better 1020 to await any suggestion about hiving off until the planning board has finally determined what is the best use to be made of the assets available. Our object is to find the best use and then to institute it. I was a little puzzled to know what the noble Viscount meant by an integration of all the transport services. On some lips it is often used as a plea for preventing progress in the interests of vested interests. That certainly is not the Government's policy.
§ VISCOUNT ALEXANDER OF HILLSBOROUGHMy Lords, I greatly regret the last remark of the noble and learned Viscount. It seems to me that our principal difficulty in regard to the question of the integration of transport was caused by those who protected vested interests for their private profit and, for that reason, took away the control of the railways. I think that is a great pity. But I should like to ask this in regard to the planning board, which may be of great importance. Will Parliament be privileged to have from the Government first the composition of the planning board, and secondly, its terms of reference? That is a most important matter. I should have thought that it would be necessary for those things to come before Parliament.
§ VISCOUNT HAILSHAMClearly, in one form or another. Parliament will have to discuss this matter. The composition and terms of reference of the board are, in fact, still under consideration, and it was for that reason that my right honourable friend did not specify them in his statement this afternoon.
§ 4.6 p.m.
§ LORD MORRISON OF LAMBETHMy Lords, may I ask the noble and learned Viscount whether, since the Government have decided to set up this planning bound, the request of my noble friend the Leader of the Opposition is not reasonable—namely, that they should inform Parliament as to what the board's terms of reference are to be. We are left in great doubt as to what the planning board is to consider and the sphere within which it will work. Moreover, the composition of the planning board is important, including the point as to whether there is to be included amongst its membership trade unionists who are familiar with the problems of the industry.
1021 The other point that I should like to put to the noble and learned Viscount is whether the Government have now come to the conclusion that, because of their policy of pushing the vested interests of the road transport industry to such an extent that it has damaged the railway industry, they ought to reconsider it. For example, there was the cutting off from the British Transport Commission of road commercial transport; there has been a whole series of things, including the fact of bigger vehicles being allowed on certain wide roads, all of which is deliberately encouraging the diversion of traffic from the railways to the roads. I have no objection to the roads. They have their job, and they should do their job. But it is open to question whether it is wise for the Government to pursue a policy which was, as I think, of malice aforethought calculated deliberately, to damage the railways and to help their political supporters among the road transport hauliers. Can we have a little satisfaction from the noble Viscount (if he will be serious for a minute) to tell us whether the Government have any fresh thoughts on this aspect of the matter, and will revise their policy upon it?
§ VISCOUNT HAILSHAMMy Lords, the noble Lord's interest in transport matters is, of course, well known, but I do not think he was either entitled or justified to suggest from anything that I have said, that I was not entirely serious in all the remarks which I have addressed to your Lordships. He, too, has cast his net a little wide, and it is rather difficult to know how, in an answer to a question, to deal with all that he has said. I was sorry that he appeared to think that I regarded his noble Leader's request that Parliament should be informed as unreasonable. I thought I had conveyed exactly the opposite impression, and I think that if 1022 to-morrow he reads what I said in Hansard he will see that this is so. Obviously, Parliament will have both to be informed and to discuss the terms of reference and the composition of the board. Equally obviously, matters of the kind which the noble Lord has referred to will be passing through our minds as to its composition, which, however, we should like to keep as small as possible.
The latter part of the question developed into a tirade against the supposed policy of the Government, but it was based upon a false premise. The primary cause of the decline in the Commission's financial position, which is the occasion for my right honourable friend's statement, is the decline in the carryings of coal and minerals and, incidentally, the increase of "C" licence vehicles. The first has nothing whatever to do with the policy to which the noble Lord was referring, whatever its merits or demerits, which I should be quite happy to debate with him; and the second is the result of the Transport Act, 1947, for which he was responsible.
§ LORD OGMOREMy Lords, in relation to that part of the noble and learned Viscount's statement which refers to certain sacrifices of convenience in the reduction of uneconomic services, as this will no doubt fall heavily on rural areas, particularly those in Scotland and Wales, and in view of the already serious de population of those areas, will Her Majesty's Government try to ensure that where railways are removed from rural areas, those areas will not be left high and dry and that some alternative services are provided in place of the railways?
§ VISCOUNT HAILSHAMMy Lords, that is obviously a question that Her Majesty's Government will bear in mind. I do not think that I ought to be more precise or prophetic than that.