Lords Sitting of 8 May 1962

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Worcester

I.T.A. AND PROGRAMME CONTRACTORS
2.35 p.m.
LORD SHACKLETON: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they are aware that persons disqualified under Section 5 (1) (b) of the Television Act, 1954, have become programme contractors, and to ask what powers Her Majesty's Government have to require the I.T.A. to carry out its statutory duty that such persons do not become or continue as programme contractors.]
LORD ST. OSWALD: No, my Lords, nor do Her Majesty's Government need specific powers to take up matters of this kind with the Independent Television Authority. If there were evidence that the Act was being contravened they would certainly take the matter up.
LORD SHACKLETON: My Lords, may I ask the Government whether they would regard a cross-directorship, a directorship of an advertising agency and of a programme contractor, as a disqualification?
LORD ST. OSWALD: My Lords, that sort of cross-directorship would be a contravention.
LORD SHACKLETON: My Lords, may I ask the noble Lord this question? As the Chairman—that is, Sir Ivone Kirkpatrick—is reported to have said, "We have no attitude to cross-director ships and are interested only in con trolling interests," is it then suggested that the Government and the I.T.A. take a different view on the interpretation of the Act?
LORD ST. OSWALD: What is perfectly clear is that a director in an advertising agency would be a disqualified person under the meaning of the Act. That is the point the noble Lord is raising and that is the only sort of cross-directorship to which I have been referring.
LORD SHACKLETON: My Lords, I had hoped for a more forthcoming attitude from the Government and to avoid giving names, but in view of the fact that Mr. Prince Littler is a director of A.T.V. and Radio Luxembourg, London, whose Memorandum of Association states that it exists to carry on, whether as principals or agents, a general advertising and publicity business, may I ask whether he might not be disqualified? I have the names of three others, all of whom are directors—I have checked this to-day—of advertising agents.
LORD ST. OSWALD: Yes, my Lords. The noble Lord has been singularly unsuccessful, if I may say so, in not giving names, as I read his views in the Sunday papers. I think I ought to tell him that in fact, out of the four names he gave on that occasion, to which no doubt he is referring to-day, three are not advertising agents, and the fourth, although he did at one time belong to an advertising agency, in fact resigned from the board of that advertising agency before he took up his post with a programme company.
LORD TAYLOR: My Lords, could the Minister say when an agency for advertising is not an advertising agency?
LORD ST. OSWALD: My Lords, I could in fact go into that at some length, but I do not think the House would wish me to. It is a fact that an advertising agency is not defined in the terms of the Act. The description and the characteristics accepted by the advertising profession are observed in the matter of disqualifying directors of advertising agencies.
2.38 p.m.
LORD SHACKLETON: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what steps they propose to take to

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obtain the cancellation of the contracts of A.T.V., Scottish Television, and Southern Television, as required by law, in view of the fact that persons are, or have been, directors of these programme contracting companies while being disqualified persons under Section 5 (1) (b) of the Television Act, 1954.]
LORD ST. OSWALD: None, my Lords. Under the Television Act, 1954, the question of contracts with programme contractors is a matter not for Her Majesty's Government tout for the Independent Television Authority, which has power to cancel. The I.T.A. has told me, however, that no disqualified persons are directors of the three programme contractors mentioned by the noble Lord.
LORD SHACKLETON: My Lords, may I ask the noble Lord whether he can help by telling us what the relevant section of that Act means? Section 5 (1) (b), which is one of the disqualifying categories, refers to a person who:
"being an individual or body corporate … carries on business as an advertising agent (whether alone or in partnership) or has control over any body corporate … or is a director or officer. …"
In view of the fact that some of these firms, such as Rank Screen Services, state as their first objective in their Articles, "To carry on business as advertising and publicity agents"; that Theatre and General Advertising Company—which seems to me to sound like an advertising agency of some kind—states, "To carry on business of advertising agents and contractors"; and the Highland Advertising Company described themselves as "advertising agents and contractors ", is there a new version of the English language?
LORD ST. OSWALD: No, my Lords. The noble Lord is, I am sure not on purpose, muddling things. He mentioned earlier one firm of advertising agents, Highland Advertising, from which a director resigned before taking up his post on a programme company. The others he has referred to are not advertising agencies within the meaning of the Act. I can go into it at slightly greater length. I am not an expert on these things, but, in short and to be very brief, the distinction is between the
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organisation whose function is to sell space Which it owns or otherwise bas a right to dispose of, and the organisation whose function it is to place advertisements in media in which it has no such rights. The latter alone is the advertising agency.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, may I ask the noble Lord who it is exactly who has ruled that these organisations are not within the meaning of the Act?
LORD ST. OSWALD: Yes, my Lords; I had tried my best to explain that before. There is no definition of it in the Act but it is the accepted definition within the advertising profession by which we are guided.
LORD OGMORE: My Lords, is it not a fact that when this Act went through we were in both Houses most anxious that advertising agents or directors of advertising firms should have nothing to do with contracts issued by the Authority? Is that not a fact?
LORD ST. OSWALD: My Lords, I was not of course a Member of either House of Parliament at that time, but I have in fact read through the one-and-a-half-hour discussion of eight years ago, mainly carried on between the noble Lord, Lord Shackleton, when he was in another place, and Sir David Maxwell Fyfe, now the noble and learned Viscount on the Woolsack. The noble Lord, Lord Shackleton, then put forward his views, which were described just now by the noble Lord, Lord Ogmore, but it seems to me that possibly the noble Lord, Lord Shackleton, is under the illusion that it was his views which were accepted on that occasion and became part of the Act. Rightly or wrongly, they were not; and he might put up a case claiming that Shackleton's law had been transgressed but he could not put up a case that the law of England had been transgressed, which is the law which the Independent Television Authority has to apply.
LORD SILKIN: My Lords, will the noble Lord not agree that there is considerable apprehension about this matter? In view of the fact that many of us feel that the Act has been breached would it not be possible to get an authoritative opinion or inquiry into the

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whole matter? There is an allegation that at least four people are directors of advertising agencies as well as of programme companies. Is it not right that that allegation should be finally dispelled or dealt with?
LORD ST. OSWALD: My Lords, I do not want to be too repetitious, but the Government are satisfied that three of those named gentlemen are not on the board of an advertising agency. The fourth was, but resigned before he went on to the board of the programme company.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, is not that what the noble Lord said to us just now; that it is accepted that they are not within the law? Now I understand from a supplementary answer to us that this is not being specially put up to the Government to give us to-day an opinion of the Law Officers of the Crown. The noble Lord says that it is the rule accepted within the advertising industry. I think that is most unsatisfactory.
LORD ST. OSWALD: My Lords, I hope that the noble Viscount the Leader of the Opposition will not put words into my mouth. I never said it was the rule accepted by the advertising profession; I said that the Authority were guided by the definition accepted by the advertising profession.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, may I ask the noble Viscount the Leader of the House if he could help us? Perhaps within a day or two we could have a ruling of the Law Officers of the Crown in detail.
THE LORD PRESIDENT OF THE COUNCIL AND MINISTER FOR SCIENCE (VISCOUNT HAILSHAM): My Lords, I am not sure it is any part of the duty of the Law Officers of the Crown to act as a sort of British law ascertainer. I should have to consult with my noble and learned friend on the Woolsack before I gave an undertaking of that kind. I have not looked at this matter myself, but I had supposed it might be conceivable the courts might rule on it, apart from anything else.
LORD OGMORE: My Lords, is it not a fact that if you rely on the definition of the advertisers to decide whether they
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are within the bounds it is like asking the wolf to decide whether he should enter the sheep-run?
LORD ST. OSWALD: My Lords, I think there is very understandably a confusion in some minds between advertisers and advertising agents. There is in fact a clear distinction between advertisers and advertising agents. The advertiser is the man who wishes to advertise a product; the advertising agent undertakes to place the advertisement and he then goes to the owner of the medium or media in which he thinks that advertisement could best be placed. There are three distinct categories in this process.
LORD SILKIN: My Lords, is it not the case that, as regards the three companies the noble Lord referred to, they each undertake to place advertisements; it is part of their articles of association that they undertake to place advertisements and not that they are themselves advertisers? Is that not a point which ought to be looked into?
LORD ST. OSWALD: My Lords, what is quite certain is that they do not act in that capacity. I cannot keep up with the noble Lord; I have not read the articles of association. They do not act in that capacity; the three companies to which I have referred as not being advertising agents are owners of media.
LORD SHACKLETON: My Lords, are not the articles of association of these companies misleading if the Government are to accept the advertisers' own definition? They are described as "to carry on business as advertising agents." If the noble Lord looks at the articles of association he will see that all these things which he says they should not do and do not disqualify them are in fact contained in the articles. Is not the argument the same as the housemaid who had an illegitimate baby and said, "It is only a very little one"?
LORD ST. OSWALD: My Lords, I think possibly the noble Lord is referring to the memorandum rather than to the articles in this instance. In any case I think both of us are in pretty deep water when we start speaking of legalistic points of this nature.
VISCOUNT ALEXANDER OF HILLSBOROUGH: As there is a certain debate coming up to-morrow, may I ask

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whether any questions asked to-morrow may get more considered answers, based on legal advice?
VISCOUNT HAILSHAM: My Lords, I was going to put the same point to the noble Viscount. The law is a very technical matter and I will ask my noble and learned friend on the Woolsack, who has been present throughout, to consider the legal points raised. He is, as your Lordships know, going to reply for the Government. I should have thought it much better to see what he had to say about it rather than press my noble friend unduly, because although about 30 years ago I did myself pass an examination on company law and I think I could answer a good many questions now, I should far rather it was handled by the proper authority.
LORD SHACKLETON: My Lords, will the noble and learned Viscount consider also the counsel's opinion I have taken on this point in support of my views?
VISCOUNT HAILSHAM: If the noble Lord will give me the counsel's opinion, I will gladly hand it to the noble and learned Viscount.
THE LORD CHANCELLOR (VISCOUNT KILMUIR): And of course the instructions. The opinion is completely valueless without the instructions asking for his opinion in the first place.

ESSEX WATER SUPPLIES
2.49 p.m.
THE EARL OF ALBEMARLE: 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 they will consider how the consent of the Minister of Housing and Local Government—required for the agreement in regard to the financial arrangements between the Metropolitan Water Board and the South Essex Water Board—can be hastened to meet the urgency of the shortfall imminent in water supplies to Essex.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (EARL JELLICOE): My Lords, my right honourable friend will consider these arrangements as soon as they are submitted to him for approval. I understand there is already agreement, in principle, between the two parties. In the meantime my right honourable friend has made an Order conferring powers on the South Essex Waterworks Company to carry out the works involved in their proposed agreement with the Board.
THE EARL OF ALBEMARLE: My Lords, I thank the noble Earl for a most satisfactory Answer. It shows that no time has been lost and that they have got on with the matter.
EARL JELLICOE: My Lords, may I thank my noble friend for a most satisfactory supplementary.

EGYPT: FINANCIAL AID AND THE COMPENSATION FUND
2.50 p.m.
LORD KILLEARN: 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:—

(1) whether they can give any information on the reported visit to London by Dr. Kaissouni, Egyptian Minister of Economy and Finance: and his talks with the Chancellor of the Exchequer and the Lord Privy Seal on the subject of financial aid to Egypt; and

(2) in the event of Her Majesty's Government contemplating any such assistance, will this be made conditional upon Egypt's full compliance forthwith with the terms of the Anglo-Egyptian Financial Agreement of 28th February, 1959, on which Egypt is up to the present in serious default.]

THE MINISTER OF STATE FOR FOREIGN AFFAIRS (THE EARL OF DUNDEE): My Lords, the United Arab Republic Minister for Economy passed through London on May 2 on his way

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back to Cairo from Washington. Dr. Kaissouni called first on the Lord Privy Seal and then on the Chancellor of the Exchequer to acquaint them with the result of his visit to the United States of America and, in particular, his discussions with the International Monetary Fund about support for the United Arab Republic balance of payments this year and other connected arrangements. No doubt the United Arab Republic Government will be making details of these arrangements known in due course. Dr. Kaissouni told the Lord Privy Seal of the United Arab Republic's need for further assistance under the auspices of the International Monetary Fund during 1962.
As regards the second part of my noble friend's Question, discussions were initiated in Cairo last month between Her Majesty's Ambassador and Dr. Kaissouni regarding the execution of those parts of the Financial Agreement where action is still delayed. The United Arab Republic authorities explained that delays in the transfer of assets were due to shortage of sterling. Ways and means of helping to overcome this and other difficulties are under consideration. Discussions are continuing in Cairo, and a statement will be made at the appropriate time. The views which have been expressed by your Lordships on this matter are certainly borne in mind by Her Majesty's Government in their handling of this question.
LORD KILLEARN: My Lords, I should like to thank the noble Earl for his, as always, most courteous and informative reply. But I did not catch from it that during this visit of the Egyptian Finance Minister the question of these claims was raised. I ask the formal question: during his visit here on May 2, was the question of the default under the 1959 Agreement raised with him or not?
THE EARL OF DUNDEE: Yes, my Lords; and it has been raised on many other occasions.
LORD KILLEARN: Yes, I followed that, but that was in Cairo. Was it raised with Dr. Kaissouni during his visit here?
THE EARL OF DUNDEE: My noble friend means in London?
LORD KILLEARN: Yes.
THE EARL OF DUNDEE: Yes; and it has been raised in Cairo, too.
THE MARQUESS OF SALISBURY: My Lords, was any progress made?
THE EARL OF DUNDEE: I think your Lordships are aware that Her Majesty's Government have repeatedly stated to the United Arab Republic Government that the failure to implement the 1959 Agreement has prejudiced our relations, both financial and otherwise, and that if they can manage to implement their undertakings it will have a good effect on those relations. I do not really think it would be helpful if I were to say anything more than that at this moment.
LORD KILLEARN: My Lords, one final shot, reverting to the second part of my Question. I there ask whether, in the event of the Egyptian Minister's coming here in search of money, it will be borne in mind that their request should not be granted until we receive from the Egyptian Government guarantees that the Agreement of 1959 will be implemented. That is the second part of my Question.
THE EARL OF DUNDEE: My Lords, I have said, I think, as much as I can helpfully say about that: first, that your Lordships' expressions of opinion on this matter will always be borne in mind by the Government; and next, that we have in the past expressed, and now express, the view that the failure hitherto to implement the undertakings of the 1959 Agreement has prejudiced our relations, and that their implementation would greatly improve them.
LORD KILLEARN: My Lords, before I leave this matter, may I ask whether those were our views or the views of the Government? I am sorry to press this, but I could not make out whether the views which had been imparted to Dr. Kaissouni were the views of your Lordships, or whether they were imparted as the views of our Government.
THE EARL OF DUNDEE: My Lords, all the views imparted are the views of the Government. What I said was that the Government would bear your Lordships' views in mind.

BRITISH GUIANA INDEPENDENCE CONFERENCE
2.56 p.m.
THE MINISTER OF STATE FOR COLONIAL AFFAIRS (THE MARQUESS OF LANSDOWNE): My Lords, it may be for your Lordships' convenience if I repeat a statement made by my right honourable friend in another place, in reply to a Question. The statement is as follows:
"In January Her Majesty's Government agreed with the Government of British Guiana to hold an Independence Conference in May. Subsequent events have now made "his impracticable. A Commission, under the Chairmanship of Sir Henry Wynn-Parry, will begin an Inquiry into the February disturbances in Georgetown in the middle of this month. We are discussing with the British Guiana Government measures aimed at enabling the Conference to have before it a formation of local ideas for an Independence Constitution, with initial areas of disagreement narrowed as far as possible. The two Governments are also undertaking a joint examination of financial matters. To enable these measures to be completed some deferment of the Conference is needed. I propose to hold it in July, provided the necessary preparatory steps are completed in time. The Government of British Guiana has been so informed."
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, apparently this is a short adjournment, and I think the best thing we can do is to wish the Government progress in their examination.
THE MARQUESS OF LANSDOWNE: My Lords, I thank the noble Viscount.

HEALTH VISITING AND SOCIAL WORK (TRAINING) BILL
Brought from the Commons; read 1a, and to be printed.
ANIMALS (CRUEL POISONS) BILL [H.L.]
Read 3a (according to Order), and passed, and sent to the Commons.

SOUTH AFRICA BILL
2.59 p.m.
Order of the day for receiving the Report of the Amendment read.
THE EARL OF DUNDEE: My Lords, I beg to move that this Report be now received.
Moved, That the Report be now Received.—(The Earl of Dundee.)
THE EARL OF LUCAN: My Lords, I am taking this opportunity, which I believe is the only one at this stage of the Bill, to revert to the detailed but most important question which I mentioned on the Committee stage—namely, the need for safeguards for British protected persons from the High Commission Territories who go to work in the South African Republic. On May 1 the noble Earl, replying to a point of mine, said [OFFICIAL REPORT, Vol 240, col. 1010] that he agreed that it was a most important question. He went on:
"… the opportunity for Africans from British protected Territories to work in South Africa is a matter which we have discussed with the South African Government. We have been assured that the South African Government appreciate the problem and will consult with us about any arrangements which are in force, so far as their own labour requirements permit."
I should like to ask Her Majesty's Government, following on that quite satisfactory declaration, whether this could not be embodied in an exchange of letters, or some such diplomatic operation, between the two Governments on the passing of this Bill. It seems to me that the future of these British-protected persons is so important that it should be committed to writing, and that the agreements between the Governments should also be put in writing. I would ask Her Majesty's Government whether they would agree.
THE EARL OF DUNDEE: My Lords, I certainly appreciate the noble Earl's anxiety on this matter. I wrote him rather a lengthy letter about it this morning—which perhaps has not yet reached him.
THE EARL OF LUCAN: It has not.
THE EARL OF DUNDEE: But since the noble Earl has raised it, I hope he will forgive me if I make, not a long, but a carefully considered reply to what he has

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just said. I can assure him, my Lords, that the Government are anxious to achieve the firmest possible understanding with the South Africans on this matter. We are already engaged in getting as many as possible of the many facets of the future relations between the Territories and South Africa set down in exchanges of aide-memoires and Notes, which I think is what the noble Earl is suggesting we should do. But I am sure he will understand that not all of these arrangements are susceptible to this sort of treatment. In many cases it may be a question of the application of general broad points of principle; in other cases the arrangements are matters of cooperation at working level in the technical field whioh we may wish to be free to vary with the minimum of formality and the maximum of speed.
While I can promise that in every way that it is possible and prudent to do so we shall get these arrangements firmly recorded, in whatever form may be appropriate, I do not think we could undertake to have each and every one of them set down in one single exchange or in a single series of letters. I am sorry that my letter, which is rather more full than this statement, has not yet reached the noble Earl; but, for the sake of the House, I am glad to have had the opportunity of making this statement in reply to what he has said.
THE EARL OF LUCAN: I thank the noble Earl very much for that very satisfactory statement. I must apologise if it is my fault that I have not yet seen his letter.
On Question, Motion agreed to.
Clause 1 [Nationality, etc.]:
THE EARL OF LISTOWEL THE EARL OF LISTOWEL moved, in subsection (2), to leave out "sixty-five" and insert "sixty-six". The noble Earl said: Your Lordships will remember that when I moved this Amendment during the Committee stage of the Bill the noble and learned Viscount on the Woolsack was good enough to say that he would look into it and let me know his views before the Report stage. He sent me a long letter in which he set out, in very much greater detail than he was able to do in his reply, the Government's objections to this Amendment, but I must confess, with the utmost respect, that I
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was not converted by the noble and learned Viscount's arguments. For that reason I have again put down the Amendment for your Lordships' consideration. I do not want to repeat what I said in Committee in support of this Amendment, but I should like to answer some of the objections that have been, or might be, advanced against this Amendment.
Your Lordships will remember that it is a simple proposal to extend from one year, from 1965 to 1966, the period of time during which South Africans can choose British citizenship if they so desire. The noble Lord, Lord Fraser of Lonsdale, suggested that these citizenship provisions might be part of a wider agreement between Her Majesty's Government and the Government of the Union of South Africa, but the noble and learned Viscount made it clear that that was not the case. So we may be assured, I think, that nothing we do in relation to the citizenship provisions—even if we alter them—will in any way invalidate something else which we have agreed with the South African Government.
Another point is this. It may be said that if these citizenship provisions are amended now, it will be too late for consultation with other Commonwealth Governments. That, of course, is probably true, because the Bill has already been through an another place; it is completing its passage through your Lordships' House, and there would hardly be time. But, my Lords, is it necessary? I should have thought that, in view of the fact these citizenship provisions do not affect the citizens of other Commonwealth countries, consultation is not really essential. We all know cases in which other Commonwealth countries impose restrictions on entry which affect our citizens, and that sometimes we are not consulted. As this is something which does not affect the citizens of other Commonwealth countries, I should have thought that it would be sufficient if they were informed of any change that is made in the Bill before it passes into law.
Another objection might be that the South African Government might be tempted to retaliate against British subjects resident in the Union. My Lords, surely not. This whole Bill is extraordinarily generous, and I am quite certain that the South African Government

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appreciate that it is without parallel. Looking back at the Burma Bill, for which I was responsible as a Minister, I think your Lordships will agree that the terms on which South Africa is leaving the Commonwealth are much more generous than the terms on which Burma left the Commonwealth. I cannot believe that a small alteration of this kind could affect the view that any objective person would take about the liberality of the measure as a whole from the point of view of the Union.
Again, it might be said in South Africa that this was an astute move to encourage the political opponents of the South African Government to stay in the Union and vote against it before choosing British citizenship. Surely such an idea would be a complete misconception of what is intended by this Amendment. I am quite certain that nobody who supports this Amendment in this House intends to interfere with the domestic affairs of the Union; that is the last thought present in any of our minds. The Amendment is intended simply and solely (perhaps this should be said to clear up the misconception) to give persons in South Africa who may wish to acquire British citizenship a reasonable opportunity of making up their minds. It may also be said that the period of time in the Bill, over three years, is longer than the period of time we gave to Burma. That, of course, is the case. It is only one example of the special treatment that we are giving to South Africa. This Amendment would prolong the period by one more year, and certainly, when we compare South Africa with Burma, there must be some special reason for having the longer period. This special reason was the one I mentioned in the course of the discussion in Committee—namely, that there will be a General Election in South Africa in 1966; and, quite clearly, people will have a better opportunity of making up their minds about the future of the country, about its stability, its economic prospects, after a General Election than before it.
During the Committee stage the noble and learned Viscount said—and everyone would agree—that it is impossible for anyone living in the Republic, however long he may have lived there and however well he knows the country, to estimate with absolute certainty even
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over a period of five to ten years what the future of the Republic will be. I am not contending that it would be possible to be certain what will happen over a long period of time in the Republic of South Africa. All I am saying is that it would be more feasible to make an approximate estimate of what the future is likely to be, after the General Election, when the policy of the next Government is known, than it would be before it. For that reason I beg to move this Amendment.
Amendment moved—
Page 1, line 17, leave out ("sixty-five") and insert ("sixty-six").—(The Earl of Listowel.)
3.11 p.m.
THE LORD CHANCELLOR: My Lords, in accordance with the undertaking I gave in the Committee stage, I have done two things. First, I have given very careful consideration to this problem; and, secondly, as the noble Earl has been kind enough to tell your Lordships, I did, as I promised, write to him so that he should have time to put the Amendment down if my views were not acceptable. I must say one word, and I hope your Lordships will not think it a word of levity, on the noble Earl's speech. It is related of my predecessor, Lord Haldane, that when he was at the Bar at the end of the last century he had a standard method for opening an appeal before your Lordships sitting judicially. That was to present not only his own case but, shortly, the case for his opponent—he said "objectively", but the underlying purpose was to put it in such a form as to appeal to a noble and learned Lord, whose name I shall say was Lord "A", because he knew that if he could secure that Lord "A" said something in favour of his opponent's arguments, that would immediately attract an opposing view from the noble Lord, Lord Watson, who was one of the strongest personalities then in your Lordships' House. My Lords, all I can say is that, when I heard the noble Earl, Lord Listowel, present my case, I understood exactly how Lord Haldane's opponents must have felt.
I ask your Lordships to consider that there are very important points involved. The Bill provides that South African citizens will cease to be British subjects as from May 31 this year. This

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is a logical consequence of South Africa's departure from the Commonwealth, and any exception to that requires special justification. As aliens, South Africans would normally expect to have to apply for naturalisation if they wished to recover their former status as British subjects. In allowing them, notwithstanding their alien status, to recover British nationality by the simpler and less stringent procedure of registration, we are, in fact, allowing them to retain for a time one of the privileges of Commonwealth citizenship. It is, moreover, a highly valued privilege, and for this reason its extension to South Africans could be justified only as a temporary measure.
In fixing the end of 1965 as the terminal date for this concession, we took this decision only after very careful consideration of the highly complex issues involved, and we felt that we were already granting a very generous period of grace. Everyone will have three-and-a-half years in which to decide what to do, and this is already considerably longer than the comparable period of grace under the Burma settlement, to which the noble Earl, Lord Listowel, referred, which lasted for two years only. My Lords, in spite of the differences in the circumstances, this does show that the fabric of our nationality law is already being strained very considerably, by a concession which allows South Africans three-and-a-half years in which to use registration as a means of recovery of British nationality.
I now come to the special reason which was advanced by the noble Earl for extending the time limit by one year. He suggested that account should be taken of the probability of a General Election in South Africa in 1966, so that South Africans would not have to decide about their nationality until after the Election results were known. In my view, my Lords, this raises three separate difficulties. First of all, there is the question whether the extra year would really make all that difference to the people concerned. Whatever the result of the Election, those who have waited so long before making up their minds will be likely to want a little longer to see what will happen next. Further political changes in one direction or another may be in the offing, and they will plead for
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still further delay. As I pointed out in the Committee stage, once considerations like these are allowed to determine policy it is very difficult to have any time limit at all; and, of course, that was the original view for which the Party opposite contended in another place.
Secondly, my Lords, the proposal raises a fundamental question of principle—namely, whether it is proper to take into account, when determining the limits of nationality concessions, the possibility of future changes in the social, political or economic situation in South Africa. This is a very difficult question. It is natural that the individuals concerned should themselves wish to take such considerations into account, but for the Government to do so, either implicitly or explicitly, would, in my view, be a course of questionable propriety. We have never in the past drawn distinctions in our nationality laws between those belonging to countries whose policies we may have deplored, either in part or in whole and others. But that is what we should be doing were we to extend the period of the nationality concessions, solely in order to take account of possible changes in the political situation in South Africa following the next General Election.
Thirdly, my Lords, there is a very practical consideration which might possibly be of great importance. In view of the reasons adduced for the extension of the time limit, both in this House and in another place, I believe that it might well be thought that the object of the Amendment was to enable as many people as possible who were opposed to the policies of the South African Government to vote against that Government at the General Election before exchanging South African citizenship for United Kingdom citizenship. The noble Earl, Lord Listowel, brushed that argument on one side, but I must say to him, having lived with this problem now for, I suppose, about a year, that however much such an intention might be disclaimed, as the noble Earl disclaimed it, suspicion might well remain that this was the real object. It is hardly necessary to point out the dangers to good relations between the two countries that might lurk in such a situation; and the ultimate result of the Amendment

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might well be inimical to the interests of the very persons whom the noble Earl has in mind.
My Lords, apart from any such considerations it must also be borne in mind, as I pointed out during the Committee stage, in an answer to my noble friend Lord Fraser of Lonsdale, that the fixing of the date is not part of a reciprocal arrangement with the South African Government. Nevertheless, account has been taken of the date, in our view, both by the Governments of other Commonwealth countries and by the Government of South Africa in framing their own proposals in the field of citizenship and the control of aliens. That is a practical problem, and I venture to say that there is more in it than the noble Earl, Lord Listowel, has allowed. It is a practical problem, and to change the date at this late stage in the Bill, without consultation, might lead to action on the part of other Governments which we cannot foresee and might not welcome.
In this matter the Government have balanced the real but small advantage which 'the Amendment would give to a comparatively small, though not for a moment undeserving, class of people against the incalculable effects which might result in other directions from making this change; and my advice to the House is not to make it. I also want to point out—because these nationality questions are so difficult—a further fact. On the last occasion, my noble friend Lord Stonehaven asked me a question, and I want to make it clear to him, and to those sharing his interrogative approach, that South African citizens who have no other citizenship within the Commonwealth—may I repeat that: South African citizens who have no other citizenship within the Commonwealth—will automatically become aliens in this country as soon as the Bill comes into force. The arrangements in the First Schedule are to enable them to recover British nationality, but I do not know whether your Lordships have had in mind the limitation that that conveys. That is why I ventured to repeat that South African citizens "who have no other citizenship within the Commonwealth" will automatically become aliens.
May I illustrate my point by quoting from what the Minister of State said in another place on the Committee stage
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of the Bill on March 6? He said (col. 44 of the Committee's Proceedings):
"Before I describe exactly what is involved with regard to each of these rights we should consider the nature of the problem which affects only South African citizens. It does not affect dual citizens, for example; that is, people who have both citizenship of the United Kingdom and Colonies and South African citizenship—and there are about 300,000 of those."
That is to say, my Lords, those who have both citizenships are not affected, because, of course, they do not need any procedure of this kind in order to acquire the citizenship of the United Kingdom and Colonies, and 300,000 is the best guess we can make.
The Minister went on:
"There are also in South Africa a considerable number—much smaller than 300,000 but a figure about which it is impossible to estimate or even make a rational guess—of people who have only citizenship of the United Kingdom and Colonies "—
that is to say, who have not got South African citizenship. My Lords, I draw your Lordships' attention to these words of the Minister of State:
"Neither those who have dual citizenship nor those who have only United Kingdom und Colonies citizenship arc affected by our discussions."
Therefore, we are dealing with, and we are raising these difficulties with regard to, the limited class of those who have no other citizenship within the Commonwealth and have only South African citizenship.
My noble and learned friend Lord Spens raised a point on the Committee stage, and although I have written to him I think it would be convenient if I publicly stated the answer to the point which was troubling him. I believe that he was satisfied by my letter, but I should like your Lordships to share his satisfaction. It is not necessary to make any provision for minors in the Bill, because under Section 7 of the British Nationality Act, 1948, the Secretary of State already has discretion to register any minor as a citizen of the United Kingdom and Colonies. If an application is made on behalf of a South African minor, the fact that his father died before he could be registered as a citizen of the United Kingdom and Colonies is a factor which would be taken into account by the Home Secretary in considering his application.

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My Lords, I always try, when opinion is expressed in your Lordships' House, to give it full consideration, and to discuss it with my right honourable friends. I have done so on this occasion, but I have come very firmly to the conclusion that to make this change would in itself raise great difficulties, and that to do so at this late stage of the Bill would cause difficulties not only for us but throughout the Commonwealth. Therefore I must advise your Lordships not to accept the Amendment.
3.28 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, we are grateful to the noble and learned Viscount for going into this matter so carefully, but I am bound to say that we feel very disappointed indeed with the final reply. As to the lateness at which this matter is now being discussed for the last time, I take it that the High Commissioner, or whoever is now the representative of South Africa here, will have been kept in touch, during the whole of our discussions, with the debates in another place and the debates here, so it would be nothing very startling or new to the representative of South Africa if we were able to obtain this concession of an extension of time for those in South Africa wishing to have British citizenship. What we ask for, really, is one year more.
I also fail to see why it should have been said by the noble and learned Viscount at a previous stage of the Bill in this House, or now, that the pressing for this extension for one year would arouse suspicion in the minds of the South African authorities. We have heard no breath of suspicion whispered from them in their Press or anywhere else, so far as I can discover. We are asking for a perfectly reasonable thing here in this Parliament—we who are treating South Africa with an extraordinary amount of generosity, in fact, in the terms under which the break has taken place, and with considerable remaining advantages to the South African Government as a result of what has taken place. To ask for the other year for the reasons stated by my noble friend Lord Listowel does not seem to me to be unreasonable.
Nor can we be satisfied with the replies which were given in another place
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or with the replies we have had from the noble and learned Viscount on the Woolsack. I suppose that almost every Member of every section of this House will have relatives, or very near friends, in South Africa who will be affected by this changeover. No doubt a good many of us have. Of course, I speak for myself because, after all, I have visits from dear friends in South Africa who are related to my wife and who, because they were born in South Africa, will be regarded, as the noble and learned Viscount says, as aliens.
THE LORD CHANCELLOR: My Lords, might I ask where her father was born? Because if her father was born in England it would put these people on dual nationality.
VISCOUNT ALEXANDER OF HILLSBOROUGH: No. The son of the lady in question was born in South Africa, her husband was born in South Africa, but the grandfather was born in England. But there are any number of cases of people with a long-continuing connection—very valuable in their minds—with this old country, and to these people this change is very disturbing indeed. On the other hand, they and their families have seen new roots of life planted in South Africa, and no doubt have a certain affection for South Africa itself and their experience there. It may be that they would be most anxious about what are likely to be the changes in South Africa in the future and would like to see what is going to happen there. There is nothing there to give rise to suspicion in the mind of the Government of South Africa. This family have been there for over a century or more, and yet they ought to have a chance to be able to see what direction is likely to be taken so far as policy and experience in South Africa is concerned.
I do not suppose it will be any use my arguing any further with the noble and learned Viscount. Like my noble friend Lord Listowel, I do not want to repeat all over again the arguments we had on the Committee stage, but I feel so very strongly about this question that I shall ask my noble friends to go into the Lobby in support of the Amendment.
LORD FRASER OF LONSDALE: My Lords, I was in South Africa when this

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measure went through the other place, and I met many persons with long British connections and sentimental affinities who were disturbed about it. A somewhat erroneous view of their situation was recorded in the South African English-speaking Press, which illustrated the disabilities under which they would suffer. So it came about that I was asked by many, deputations and otherwise, to say a word for them in this House when this matter came before us: and, indeed, I did so on the Committee stage, I could have wished that it had been easier for the Government to give way on this, and to say that there is not all that much difference between four years and three. I could have wished that, but I am bound to say that two points have emerged which were not clear to me when I was in South Africa, because I was not very much better informed than my questioners, not having had the Bill and without the Committee stage having taken place. Now I have become aware of certain facts from what the Lord Chancellor has said.
The first of these is illustrated by his intervention when the noble Viscount the Leader of the Opposition was talking about his relations. There are really very few relations who will not be able to claim that they have existing British citizenship. Certainly all first-generation persons will be able to do so. It is when it comes to the second generation that the difference is illustrated, and there, perhaps, I may be permitted to quote my own case, which will demonstrate the matter most clearly. I have dual citizenship. My son and my daughter also have dual citizenship. My grandson, now at Cape Town University and hoping, I believe, to become a good South African, to go into business there and to live there, will not have the choice of British
citizenship under these registration arrangements. In a way I regret that; and yet, when I come to think, of it, while I think it right that older persons like myself should retain their roots, I also think it quite right that a young man of the age of my grandson should make the choice as to what allegiance he owes and in what country he intends to remain and work. You cannot look over your shoulder for the rest of your life, and if in fact he is to become a good South African, then my advice to him is: Take out your papers.
For these reasons, I had half changed my mind about my intention in this matter. But when I heard the noble Earl, Lord Listowel, defend his argument on the ground that there were political implications involved, and political judgments to be made by these people, I thought this House was really getting on to very dangerous ground. It really is something of an interference in South African politics to say, "We are so going to vote as to enable some tens or twenties of thousands of people (it will not be very many) to wait another year, or to be influenced by their situation then as to the way they vote". Although Lord Listowel disclaimed any intention to do that, I am quite certain that it would be read in that way in South Africa. I do not think we should be wise to change this. The advantage to people I should have liked to help is very small, and the disadvantage I consider is very great. Therefore I have changed my mind, and, with some reluctance, I shall support the Lord Chancellor.
On Question, Whether the said Amendment shall be agreed to?
Their Lordships divided: Contents, 38; Not-Contents, 72.

CONTENTS

Airedale, L.

Greenhill, L.

Rea, L.

Alexander of Hillsborough, V.

Harvey of Tasburgh, L.

St. Davids, V.

Amulree, L.

Henderson, L.

Shepherd, L.

Amwell, L.

Kenswood, L.

Silkin, L.

Archibald, L.

Kilbracken, L.

Sinha, L.

Burden, L. [Teller.]

Latham, L.

Stonham, L.

Chorley, L.

Lawson, L.

Summerskill, B.

Citrine, L.

Lindgren, L.

Swaythling, L.

Colwyn, L.

Listowel, E.

Taylor, L.

Douglas of Barlocn, L.

Lucan, E. [Teller.]

Walston, L.

Faringdon, L.

Macpherson of Drumochter, L.

Williams, L.

Francis-Williams, L.

Meston, L.

Williams of Barnburgh, L.

Grantchester, L.

Ogmore, L.

NOT-CONTENTS

Ailwyn, L.

Forbes, L.

Mills, L.

Albemarle, E.

Forster of Harraby, L.

Milne, L.

Ampthill, L.

Fortescue, E.

Milverton, L.

Baden-Powell, L.

Fraser of Lonsdale, L.

Molson, L.

Balfour of Inchrye, L.

Freyberg, L.

Montgomery of Alamein, V.

Bathurst, E.

Goschen, V.

Newall, L.

Beauchamp, E.

Gosford, E.

Newton, L. [Teller.]

Bethell, L.

Hailsiam, V. (L. President.)

Polwarth, L.

Boston, L.

Hampton, L.

Rathcavan, L.

Buckinghamshire, E.

Hastings, L.

Runciman of Doxford, V.

Carrington, L.

Hawke, L.

St. Aldwyn, E. [Teller.]

Chesham, L.

Home, E.

St. Oswald, L.

Cholmondeley, M.

Iddesleigh, E.

Savile, L.

Conesford, L.

Jellicoe, E.

Scarsdale, V.

Crathorne, L.

Kilmuir, V. (L. Chancellor.)

Somers, L.

Denham, L.

Lambert, V.

Soulbury, V.

Devonshire, D.

Lansdowne, M.

Spens, L.

Dudley, L.

Leighton of Saint Mellons, L.

Strang, L.

Dundee, E.

Limerick, E.

Strathalmond, L.

Dynevor, L.

Long, V.

Swinton, E.

Effingham, E.

Lothian, M.

Tenby, V.

Elliot of Harwood, B.

Mar and Kellie, E.

Teynham, L.

Ferrers, E.

Margesson, V.

Twining, L.

Ferrier, L.

Merrivale, L.

Waldegrave, E.

Resolved in the negative, and Amendment disagreed to accordingly.

TRANSPORT BILL
3.47 p.m.
Order of the Day for the Second Reading read.
THE PARLIAMENTARY SECRETARY, MINISTRY OF TRANSPORT (LORD CHESHAM): My Lords, after that little piece of excitement, it is my task to move that this Bill, standing on the Order Paper in the name of my noble friend Lord Mills, be read a second time. Its provisions follow closely the proposals set out in the Government's White Paper, which your Lordships debated in a very comprehensive way in March last year. I do not think, therefore, that I need spend much time now—goodness knows! I spent enough at the end of that debate—in enlarging on the problems that arise and in going into the general background of it all. The problems are plain for all to see.
The heart of them lies in British Railways, which dominates the activities of the British Transport Commission and the financial situation which faces it. The fact is that the railways are at present losing some £150 million a year on revenue account. Their gross annual receipts are some £475 million a year, as against £760 million for the Commission as a whole. They have accumulated revenue deficits of some £700 million,
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while the Commission, as a whole, has about £625 million. I am not going to say that all the problems are with the railways. Canals are not economically viable in their present form, and the British Transport docks, like other ports, have their problems, too.
What emerges from all this, as Her Majesty's Government see it, is one main central fact: that the British Transport Commission has been faced with an impossible task. The activities it controls are too large and too varied to be run effectively by a single undertaking. The problems they present are too far-reaching and far-ranging to be handled effectively by one organisation; and, as a result, the Commission has been overloaded. Reorganisation, financial reconstruction and a different climate of operation are urgently needed and they are the main objects of this Bill. In particular, if we are going to be successful in adapting what is basically a nineteenth century railway system to twentieth century requirements, this reorganisation is as essential a foundation for the future as are the urgent traffic and layout studies now being carried out. I am not going to say any more about that now, because it is my job to present the Bill to your Lordships.
The Bill itself is a long one, and complex in its detail. I must say I have been rather puzzled about how to put it to your Lordships without speaking for most of the afternoon and half the evening. But there are three clear

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principles that run throughout. What I propose to do is to stick to them and try to show how the Bill is constructed around them, and how it relates to the White Paper. Even so, there is a great deal of ground to cover, and if I have to deal with quite a number of points rather shortly—tersely, maybe—I hope your Lordships will not think that I am not paying them due regard or am arguing them lightly or, indeed, that I do not attach importance to many which I shall probably not even mention. I have no doubt at all, either, that we shall return to many of them in much greater detail in Committee; it is right that we should do that, and I understand that arrangements are being made to facilitate the process.
The three clear principles I mentioned are briefly these. First of all, each main sector of the Commission's activities is to be placed under a separate public authority, with clearly defined responsibilities within their own set field. Secondly, each of the new undertakings is to be given a separate financial constitution and identity. Thirdly, there must be greatly increased commercial freedom for them all. If I may start with the first of the principles, the new organisation structure is set out in Part I of the Bill, and I should like to deal first with British Railways.
British Railways represent about three-quarters of the Commission's present undertaking, as well as being one of the largest industrial organisations in the world. As I have just said, their problems, and particularly the (financial problems with which they are faced, urgently require a single-minded authority to concentrate on those matters which are of central importance to the railways as a whole. Therefore, there is to be a new British Railways Board, charged with the duty of running the railways as an effective national system; and, so that it can concentrate on its main task, there are also to be regional railway boards to deal with day-to-day management and operation.
Everyone knows, I think, that it is extremely important, but never easy, to hit the right balance between central control and a proper delegation of authority. It is in itself a very practical problem, often depending very much on the circumstances of the time, and in
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particular it will depend upon the ability of the railways to be adaptable to changes in the future which may affect the shape and balance of the system. It is for this reason that the Government have decided that it would not be possible—in fact, it would not be desirable—to write into the Bill a detailed definition of the relative responsibilities of the Central and regional railway boards. Therefore, it becomes abundantly clear that the British Railways Board, which will have to carry the ultimate responsibility, must be in a position to decide what it will delegate to the regions, and when. So Clause 2 of the Bill provides for that, subject to the general approval of the Minister. At the same time we recognise that certain matters must in all circumstances be the prime responsibility of the Central Board—finance, national price policies, investment, modernisation, national wage negotiations and the future size and shape of the railway system are important matters of this kind.
While I have said the prime task of the British Railways Board will be to run the railways as an effective system, it will still have to run other services which cannot be separated from railway operations. Such things will be the railway collection and delivery services; railway packet ports and shipping services which are the natural extension of the railway system. The Railways Board will also have the British Transport hotels. Your Lordships may remember that the White Paper envisaged that these would be put separately under the Holding Company, but further study indicates that the balance of advantage lies in putting the Hotels Company under the Railways Board. Many of the hotels are physically mixed up with railway stations, and if they can be run alongside the railway catering services there should be some useful operational economies. But, even so, the hotels under the Railways Board will be a separate activity and have their own financial identity.
Under Clause 7 London Transport will again be a separate public authority, as it once was before. Its function, to provide
"an adequate and properly co-ordinated system of passenger transport"
for the Loudon area, is clearly a single

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task in itself, and merits this separate and independent organisation. The London Transport area and the main running powers of London Transport will be like they are now. But the Bill provides, in Clauses 8 and 59, for the Board to have rather more freedom to run services to meet new public needs on the fringes of its area. It will also be able to hire out to other operators any buses which are temporarily surplus to requirements, so that it can make the best use of its assets.
The British Transport Docks Board in its turn will take over the nationalised docks which represent about one-third of the port capacity of the country, and will devote itself to operating them to the best advantage and dealing with the varying problems which each one presents. The docks are at present the subject of the inquiry by the Committee under the noble Viscount, Lord Rochdale, in the same way that the independent ports are. What may emerge from this we have yet to see, but in the Government's view the new organisation is one which could continue indefinitely or, if needs be, be altered.
I should like now to come on to canals, and I want to say that the Bill does not attempt, as a reorganisation measure in itself, to solve all the problems of the nationally owned canals. What it does is to set up the appropriate separate public authority in which they will be vested. The new authority's duty will not only be to provide canal services and facilities where it finds them right and justified, but also to formulate proposals and actually do something about putting the canals that are no longer required for transport to the best possible use. I must make clear that this may well involve their closure, or their conversion or disposal, if that is the way they can be put to other and better uses and so help to relieve the taxpayer of his present burden.
Lastly, I think I ought to say that the Government now think that the name of the new authority ought to be the British Waterways Board, rather than the Inland Waterways Authority. That is to prevent confusion with an existing body with the same initials, the Inland Waterways Asociation. It will also have the practical benefit of preserving the continuity
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of the present name of this part of the Commission's activities, and so it will be possible to avoid having to repaint a lot of signs and notices. We shall put forward Amendments for that later.
My Lords, I come on now to the Transport Holding Company that Clause 29 sets up and which is a new concept altogether in legislation about nationalised undertakings. This company will have grouped under it a number of activities which are essentially different from those placed under other Boards. These are the road haulage, bus and shipping companies, travel agencies and various other interests owned by the British Transport Commission. The point is that all these are essentially commercial activities which are carried on by what I might call "Companies Act" Companies operating generally in competition with similar companies in private hands. The Holding Company is designed to provide a form of control more like that generally practised in the commercial world and to enable the nationalised activities concerned to provide the best possible return to the public purse.
The Minister will be in much the same relationship to the Holding Company as a controlling shareholder is to a holding company incorporated under the Companies Act. Under Clause 29 he will be able from time to time to give it such directions as he thinks fit; but this, of course, does not mean that he intends to intervene actively in its management and operation. In fact, if he did so it would be entirely contrary to its purpose. The set-up under the Holding Company involves public assets to the order of some £140 million and it is only right, I think, that the Minister should have ultimate control. There is also the need to reconcile the commercial and operating freedom to be given to the company with its operating powers and the need for adequate accountability to the Minister and, finally, to Parliament.
In all this reorganisation there must obviously be some co-ordination and this is achieved in the Bill first of all by the Minister's responsibility and powers under Clauses 27 and 29 to control investment, and by the duty on the Boards to act in agreement with him. Clauses 3, 7 and 16 then make further

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provision for the undertakings to work together; and, finally, I must mention the Nationalised Transport Advisory Council to be set up under Clause 55 and part of whose specific function is to advise the Minister on such questions of co-ordination as he may refer to it. The chairmen of the Boards and of the Holding Company will be members of this Council with up to five suitably-qualified others as the Minister may wish to appoint. There will also be a Chairman and a Vice-Chairman, although the Minister may preside over it if he thinks fit.
I must move on to the second principle and to finance, and I should like to point out, to begin with, that the financial provisions in Clauses 18 to 24 and 36 to 40 do two things. First they provide each of the new Boards and the Holding Company with its own separate financial constitution and status. They vest each with its own assets and with responsibility for its capital debt and for its own financial performance. Secondly, the financial provisions relieve the railways of a burden of debt which is unrealistic in present circumstances, and from which they cannot hope for recovery. Reconstruction follows closely the scheme outlined in the White Paper, but the figures quoted in the White Paper were round ones based on the 1959 financial position. Actual amounts will be different as they will have to be based on the position at vesting date, because they obviously cannot be precisely assessed until after that time. As best I can tell your Lordships, the broad figures are likely to be these: the total capital debt of the Commission which is to be dealt with will be about £2,450 million, which, I should add, excludes liabilities for superannuation funds and Savings Bank deposits amounting to some £300 million. First of all, accumulated losses of some £475 million will be written off, if I may call it that, as a bad debt. This leaves a balance of £1,975 million to be allocated among the new undertakings. The Railways Board will be responsible for about £1,575 million of this and the balance of some £400 million will be divided among the others, including the Holding Company.
The railways capital debt of £1,575 million will be further subdivided into
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two parts. Some £650 million to £700 million must be regarded, if not as a bad debt, then as a very doubtful one. That is the amount which will go into the suspense account carrying neither fixed interest nor obligation for repayment for the time being. The sum, my Lords, corresponds broadly to the written down book values of the pre-1956 assets. The second part of the capital debt of the railways will amount, or is likely to amount, to about £900 million, which will correspond to the written down book value of the assets acquired since the end of 1955. It represents, very largely, investment in modernisation. For this reason it is very much larger than the figure of £400 million which was mentioned in the White Paper, because very large sums will have been invested in this way between 1959, on which the White Paper figures were based, and the end of 1962, when, on present expectations, the British Railways Board is likely to take over from the Commission.
In broad terms, the railways will be relieved of an interest burden of some £35 million a year and this burden will now fall on the Exchequer and, therefore, of course, on the taxpayer. Even with this very sizeable relief, it will still leave the railways with a most formidable task before them. Their live debt will still be about £900 million, and this, as I said, without the liabilities which they will take over from the Commission in respect of superannuation funds and Savings Bank deposits. Altogether the interest burden on the Railways Board at the beginning will be about £65 million a year and, of course, that will increase as investment in the railways goes forward. Therefore, the first and most immediate thing that the railways must do will be to wipe out the operating deficit which is now running at a rate at over £80 million a year. That is in itself a very big job. They will then have to go on and build up a working surplus sufficient at least to cover their interest charges.
Speaking to-day, it is too early to speculate about the longer-term prospects of their doing this. Clause 22 provides for the Minister to be able to make grants or loans to the Board to meet revenue deficits up to a total of £450 million in the next five years. This in itself cannot be regarded in the nature

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of things as a firm forecast, but it is the best estimate that can be made at present. Even so, it assumes very considerable progress towards viability on the part of the railways in that five-year period. When the traffic studies which Dr. Beeching is now undertaking are completed it will be possible to get a clearer picture of the prospects, and then my right honourable friend will review the situation so as to settle with the Railways Board targets for their financial performance and progress over the reconstruction period.
Now I should like to get on to the third main principle: commercial freedom for the new authorities. First of all, there is provision in Part III of the Bill, and particularly in Clause 43, for them to be given the maximum practicable commercial freedom of charging and of commercial policy. The Railways Board will be free to charge as it thinks fit except for passenger fares in the London transport area. The Inland Waterways Authority will have the same freedom. There will need to be some control over the Docks Board charges because there is still more or less an element of monopoly about docks, and the independent docks are subject to control over their charges anyway. The Bill provides that British Transport Docks shall be placed on the same footing as they are in this respect, and this means the Board will be similarly able to increase their charges either by securing the necessary authority from the Minister or by private legislation from Parliament.
The London Board will continue under the control of the Transport Tribunal for rail and bus fares in the London area. Paragraph 57 of the White Paper pointed out that British Railways and London Transport between them operate a virtual monopoly of public passenger transport in London, and therefore in the view of the Government the control of passenger fares in the London area by the Tribunal should continue.
Clause 43 also further increases the commercial freedom of the Boards by removing a number of out-dated statutory restrictions and obligations, including the one to provide reasonable facilities whether or not they are provided at a loss. It also removes the common
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carrier obligation for carriage by rail or by canal. The second aspect of this freedom is that there is very important provision, in Clauses 11 and 12 notably, for the Boards to make better use of the assets which they have acquired or need to have for their primary purpose. Under Clause 11 the Board will, in future, be able to develop their land, in so far as it is not required for operational purposes, for sale or for lease. That does not mean that they will be free to go in for general property development at large because that is not their job. They will need the Minister's consent to any substantial expenditure and they will not be able to acquire additional land by compulsory purchase for the purpose.
Clause 12 also confers on the Boards capacity powers to construct and operate pipe-lines, mainly on their own land, subject of course to the Minister's consent. When we were discussing the Pipelines Bill the other day, the noble Lord, Lord Stonham, pleaded for the railways in particular to be able to do this. The point is that that Bill was the wrong place to do it and this Bill is the right one. The Government have long realised, and we are certainly glad to have the noble Lord's support in this, that the railways and canals have, or may have, long stretches of land which might be very suitable for the purpose and would be well used for pipe-line development. The Boards therefore get the powers, and so they are not handicapped in joining in this development. I should point out that they will be subject to the provisions of the Pipe-lines Bill, the same as any other operator; I think that can be regarded as important in view of your Lordships' interest in the subject of safety.
I come now to the provisions for the protection of transport users and others who might be affected by the commercial freedom Which the new undertakings will have. First of all, as I mentioned earlier, London Transport fares will continue under the control of the Transport Tribunal, although with some change. The present quick procedure available to the Commission for emergency increases in London is available only if there has been an increase in costs, and it takes no account of a sudden fall of revenue. Clause 48, therefore, provides for a new quick procedure whereby

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London fares can foe raised by the Boards where either costs have risen or revenues fallen, but it still has to be justified afterwards to the Tribunal, as it has to-day. There will be new arrangements for the Transport Users' Consultative Committees, which will continue, but will no longer consider charges. The Central Committee will concern itself only with matters of general complaint or those which are best dealt with at national level. The area committees will, in future, report direct to the Minister any degree of hardship which they see arising out of proposals for complete withdrawal of railway passenger services, and they can make suggestions to meet it. The result of that will be to speed up the procedure and to place the responsibility on the Minister for deciding whether the passenger services in question should be closed down or not Finally, as a further protection, Clause 54 requires the Railways Board and the London Board to publish in advance their plans for the discontinuation of railway services, whether for freight or for passengers.
I think I can hardly talk about this question of freedom without mentioning the problem of coastal shipping. While the railways are getting revenue assistance from the Exchequer, it might be thought that this would put them in a position to undercut coastal shipping unfairly on the long haul of heavy traffics which are important to both of them. The second point is that the railways, in some areas, have a virtual monopoly of the carriage of coal and some other heavy traffics on certain short hauls to ports. If the railway rates on those particular routes and for those traffics were to be raised unreasonably, it might have the effect of driving them on to rail for the whole journey at the expense of coastal shipping companies. Clause 53, therefore, empowers the Minister to give directions to the Railways Board in either of those two situations if the charges made by the Railways appear to him to be too high in the second case or too low in the first, when he has had regard to the full and proper cost of the services. These arrangements have been the subject of a good deal of consideration during the course of the Bill in another place and I rather think they go a long way to meet the circumstances which have
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been a source of worry to coastal carriers.
I should not like to complete my explanation without mentioning the provisions for safeguarding the interests of the staff who are now employed in the B.T.C.'s undertakings. Clause 34 is based on the principle that the staff will go with their jobs to the new bodies according to the activities in which they are employed. Its overall effect is that none of the staff employed by the British Transport Commission immediately before vesting date will be without an employer to whom they can look for their rights under their contracts of employment. Clause 71 imposes a duty on the Boards to consult, where necessary, with the appropriate organisations about the negotiating machinery, the terms and conditions of employment and for safety, health and welfare. Clauses 72 and 73 provide for the transfer and safeguarding of existing pension schemes and ensure that there will be no worsening of rights. Lastly, Clause 80 provides for compensation for employees of the B.T.C. who may suffer loss of employment or a worsened position as a result of the reorganisation.
LORD STONHAM: My Lords, would the noble Lord allow me to interrupt? He mentioned that these provisions apply only to those who are employed by the British Transport Commission at vesting date. That is fourteen years ago. What about those employed since?
LORD CHESHAM: My Lords, the noble Lord is talking about the wrong vesting date. I was referring to the vesting date in the Bill, when the Commission goes out of being and the new Boards take over.
I think from what I have been saying your Lordships can see that the Government regard this Bill as a strictly practical measure and have constructed it as such. The three main principles in it about which I have been talking have been the subject of long and careful study and consultation, in the attempt to deal with the practical realities of the grave problems facing the nationalised transport undertakings. It is vitally necessary now (more necessary than ever it was before) to look into the future. It is the forward-looking approach which has been uppermost in the Government's mind in shaping this Bill. In it we seek

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to lay the foundations of a rational system of railways and of transport for the future, and as such I commend it with confidence for your Lordships' consideration. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Chesham.)
4.22 p.m.
LORD SHEPHERD: My Lords, the noble Lord, Lord Chesham, has this afternoon described this Bill to us with expedition and clarity, and I am sure the House is grateful to him for that. I, personally, should have wished that the heavy burden that falls upon me this afternoon could have been carried by my noble friend Lord Morrison of Lambeth, but unfortunately he is still in America; and it is only to-day that we have had returned to us the noble Lord, Lord Latham, whom I am quite sure all our friends are glad to see back.
Before dealing with the Bill, may I say something in regard to the circumstances? This is a formidable Bill; it consists of 156 pages, 94 clauses and 11 Schedules. As the noble Lord, Lord Chesham, said, it is a Bill of considerable complexity and highly technical detail, and, as I am sure he will be the first to acknowledge, it is politically highly contentious. We are going to face a heavy task. To-day is May 8. As I understand it, vesting day is January I next. Therefore the Government will expect to have this Bill by the end of July at the latest. We know, too, that Parliamentary time is much occupied. Therefore, we can visualise some pressure from the Government to get this Bill through as quickly as possible. We shall not try to oppose it; but when one takes account of the passage of the Bill in another place, of the fact that the guillotine was used in the latter stages and, if my researches tell me correct, that at one stage twenty Government Amendments were passed without any discussion, my friends feel that we should treat this Bill as though it originated in this House, and that therefore, on the Committee stage, we should examine it clause by clause, subsection by subsection.
From time to time we have had these lengthy Bills. The House has been placed in the intolerable position of sitting many hours in Committee. In
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the circumstances and nature of this Bill, may I make a plea to the noble Lord, Lord Mills, as Deputy Leader of the House and a man of some influence, to see whether we cannot regulate our affairs so that we have no more than three or fours hours at a time on Committee; and may I ask whether we cannot have well in advance the dates of sitting in Committee? I am really taking up the point that has been made so many times by my noble friend Lord Silkin. We are all part-time Parliamentarians. Many of us have other occupations. Many of us come here by placing burdens upon colleagues. Certainly we create hardships to our families. If there is a spirit of reform within this House, I think we should look at the manner in which we arrange our business. I hope that the noble Lord, Lord Mills, can give us some assurance at the end of the debate. I would assure him that, whilst we shall examine this Bill, we will in no way be obstructive.
In the debate on the White Paper, the noble Lord, Lord Chesham, complained of the political speeches that were made from this side. If politics is national housekeeping, it is quite impossible to keep the political side out of the Bill, because the Bill will intimately affect in one way or another different sides and sections of our country. It is said that what divides noble Lords on the other side from us is that we believe in Socialism, in a planned economy, and noble Lords opposite believe in freedom and enterprise. I would ask noble Lords opposite to remember that we are now in the 20th century; that industry and commerce have moved out of the 19th century whereas politics has not, and that whilst private enterprise may be basically competitive, the larger organisations in commerce and production are themselves trying to get over the evils and dangers that arise from indiscriminate competition. Right through our distributing trades we have the end product of production, the fixed price system, fixed terms of business, fixed wholesalers and fixed retailers. Industry has endeavoured to increase its cooperation not only nationally but now internationally. Therefore, the burden of the case which I shall try to make this afternoon is that in transport, which is a service, we should endeavour

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to create a system of co-operation and co-ordination as opposed to competition.
There are some who may remember the condition of the railways before the war—conditions which placed the railways in a position not far short of bankruptcy. Noble Lords would agree, I think, that those conditions were due mainly to over-capitalisation, to too much capital and assets in comparison with earning capacity. Railways were also governed by siatutory requirements as to their rates and their method of adjusting their rates; and in later years, when they had dealt with their own competition by amalgamating themselves into the "big five", they were confronted with the internal combustion engine, and they then faced a serious and growing competition. I can remember as a youngster the campaign on behalf of the railways for a "square deal". The railways were in dire trouble then. I believe that the reasons which I have given were the basic reasons for that. I would suggest that the same reasons apply in regard to the railways' difficulties to-day.
After the war, the Labour Government were faced not only with serious economic circumstances which arose from the war, but with the possibility of a serious breakdown in transport. They took the advice of many notable people in transport and they set out to create a coordinated, integrated service. True, the 1947 Act was not perfect, there were loopholes, but at least it was the first effort that had been made to make transport a service and not a business. The British Transport Commission accounts for the years 1951 to 1954 certainly showed the financial sense of the 1947 Act. If my memory serves me correctly, in 1951 the profits of the British Transport Commission were in the region of £39 million, of which British Railways had contributed nearly £35 million. Their surplus, after paying their interest, was just short of £3 million. When one considers the uphill task of the British Transport Commission and the railways, with the shortage of steel, the shortage of manpower, and the necessity in the national interest to keep down their freight rates and their passenger fares, I think they achieved a commendable result.
But, my Lords, then came the Conservative Government. They came, as
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my noble friend Lord Morrison of Lambeth, said, with their dogma of competition. They recreated the jungle of pre-war days; they set rail against road, and the consequence of that action can be seen to-day in the Report and Accounts of the British Transport Commission. There has been a continual loss ever since this Government came to power. The railway working profits in 1951 were, as I said, £39 million; in 1953 they were £35 million; in 1954, when the Act was beginning to take effect, it was reduced to £16½ million. These were profits. In 1956, with the full impact of the 1953 Act, British Railways were running into a working deficit of £16½ million. In 1958 it was £48 million; in 1960, £67½ million. If your Lordships look at the accounts you see the decline of freight earnings of British Railways. When you take into account the increased profits of the transport companies and the amount of merchandise that is being carried, it is quite clear that the basic cause of the British Railways' difficulties lies in this competition between road and rail.
I was very interested the other day to read the debate in your Lordships' House upon the 1947 Bill. The noble Lord, Lord Brabazon of Tara, who certainly was not an advocate of nationalisation and certainly not a member of our Party, speaking as an ex-Minister of Transport, speaking with all his authority on transport affairs, said this [OFFICIAL REPORT, Vol. 147, col. 917]:
"For many years now, not, of course, because of any fault of the railway companies, but because of the advance of the internal combustion engine, transport by road has eaten into the guts of the railway companies, and it will go on. And the question arises—a question which we have to decide—are you prepared to let the railways go bankrupt, and let everything go by road, or do the railways supply something which is of national importance and which ought to be kept alive?"
He went on to say this:
"But if they are to be preserved in this country, to preserve them is to co-ordinate them with road haulage. I do not say you should take them over by nationalising, but"—
mark this, my Lords—
"anyone who takes over the railways without, at the same time, taking a very close hand in road haulage, is just taking over a bankrupt affair …".
That was a remark of the noble Lord, Lord Brabazon of Tara; it was a point that was being made by the noble Lord, Lord Lucas of Chilworth, and it had

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been made throughout the length and breadth of the country by people who knew something about transport. But the Government would not heed; they went on. Now we are faced with the fact that we have to write off millions of national assets which are so desperately needed for the development of our industry. The Government may have a reputation for mismanagement and squander in the field of defence and in other fields, but, my Lords, I think that in the field of transport it is unrivalled. The noble Lord, Lord Beeching, was speaking the other day about co-ordination, the need to eliminate competition of such a character that——
THE MINISTER WITHOUT PORTFOLIO (LORD MILLS): Would the noble Lord just let their Lordships know to whom he is referring? I thought he said "Lord Beeching".
LORD SHEPHERD: I beg the pardon of the House—I have Lords on the brain! I meant, of course, Dr. Beeching. Dr. Beeching was speaking the other day at the Institute of Transport on the question of co-ordination. I should like to quote a remark of his because it is very interesting, though I am sure the noble Lord, Lord Mills, knows about the speech. He was speaking of the need to eliminate wasteful competition, and he said that there was too much capacity chasing too few goods. But in this Bill the last vestige of co-ordination that was left in the 1953 Act disappears. We shall have the four main Boards, and somewhere out on a limb there is to be a subsidiary of the Holding Company, British Road Services. There is to be no executive co-ordinating body. At a time when industry is moving towards co-operation, when it is trying to make the maximum use of assets, why is it that private industry should have the advantage of a co-ordinating body when the public service is to be denied it?
My Lords, we believe that if the nationalised undertakings were given the opportunity—if the Government would give them the opportunity—they could create the right sinew for our industry, but it would come only through a form of co-operative effort, with the docks working in with the roads and with the
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roads working with the railways. If this cannot be so over the whole field, at least let us have it within the nationalised bodies. I do not object personally to decentralisation, but I must say that I am worried at the creation of these six Regional Boards. I wonder why a board is necessary? I wonder why a general manager, such as is now in control of the regions, would not be suitable. I rather wonder whether the intention is, having broken up the British Transport Commission, then to go the further stage of breaking up British Railways; to set region against region in their dogma for competition. My Lords, we shall look at that side of the Bill with special interest. It was promised in the White Paper that the directors of the Regional Boards would be directors of the Central Board but that is not stated in the Bill. Can the noble Lord, Lord Mills, tell us why?
As regards Clause 3, which is the duty and powers clause for the Railways Board, here there is a considerable difference from Clause 7, dealing with the London Board. The London Board is called upon to provide adequate and properly co-ordinated services, but the Railways Board has to provide efficiency economy and safety. Even in subsection (2) of Clause 3, in which the Railways Board are to see that their services are properly co-ordinated with those of the London Board, the Railways Board are not told to provide an adequate service. The noble Lord, Lord Mills, must know that there are hundreds of thousands of men and women who come into London and other metropolises by British Railways. Are they not to be provided with what is to be provided by the London Board, an adequate, co-ordinated service?
My Lords, we have had some warnings from Dr. Beeching that commuter travel is not profitable. One can appreciate that, when one sees the trains stacked outside our railway stations at midday. But that is not the making of the public. It is not the making of the public that in the last four years the number of commuters into London has risen by 16 per cent. If the public are to be protected, in that the London Board must provide an adequate service, I suggest that this House should demand that British Railways equally should

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provide an adequate service—adequate not only for commuters and passengers, but also for industry and agriculture. On the Committee stage we shall be moving an Amendment which we regard as fundamental
Does this Bill give any hope to the long-suffering public which comes into London every day to work? I believe that it does the opposite. The whole accent here is economy; that the railways must make a profit. Those of us who have examined this matter must know that from this Bill there is no hope. If you sent monkeys from London to Manchester, under the conditions in which our people come to London, the carrier would be prosecuted. There is no hope in this Bill. It was not so long ago that the noble and learned Viscount, Lord Hailsham, was saying that we were becoming a nation of "belly-achers". I am pretty sure that if the noble Viscount went to Cannon Street, Liverpool Street, or Fenchurch Street in the morning he would become the arch-priest of the "belly-achers", because the conditions are appalling. What is the good of giving persons dignity in new offices when you pack them in as you do to-day?
I want now to say something about coastal shipping. In the debate on the White Paper the noble Lord, Lord Teynham, made a case about the problems of coastal shipping and the railways. I must say to him that we have some sympathy with the case, and I think that we ought to examine it carefully on the Committee stage. But I think he will agree that his criticism of the railway competition was due to what he would describe as a sort of subsidised rate. I did a little research this morning, and I asked what would be the cost of sending 500 tons of cement from London to Hull by coastal shipping. I was quoted a price of 75s. 11d. a ton, which is approximately 10s. cheaper than sending it to Colombo. The cost of sending 500 tons; of cement from London to Hull by coastal steamer is approximately £1,900. I tried to get a quotation for rail and road, but I am afraid that I was unsuccessful. However, I was given a road quotation from Hull to Liverpool, and the cost was £687. So I hope that the noble Lord will agree that the coastal shipping problam is not purely a matter of competition
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from rail; it is competition equally from road. That is the burden of our case: that to-day we have competition in which certain conventional forms of transport are unable to compete with road. We shall examine that aspect on the Committee stage.
The Transport Holding Company we view with the gravest suspicion. What is the intention of this Holding Company? Is it to develop the assets? Is it to increase and strengthen the bus companies and the transport companies that it is holding, or is the real intention of the Government to use this Holding Company for the disposal of the national assets? At the Committee stage we shall endeavour to give a constructive purpose to this Board, and shall not have what we think at the present moment is a negative attitude.
In regard to the development of surplus land (a matter which appears in Clause 11), in general principle we agree with this. But we have our reservations, and we shall certainly want to know what generally are the Government's intentions. If this valuable land is to be disposed of, we should prefer to see that the other Boards have 'the first opportunity of acquiring that land at a reasonable price, without its being inflated by Mr. Clore or Mr. Cotton. If the Boards themselves did not require the land, then local authorities might acquire it for the development of the amenities of the area. Therefore we shall look at this clause with particular attention.
We were also approached yesterday by the Transport Police. Here, again, I think we should have a full discussion. This is a very fine body of people—3,000 in number. They have performed very useful service to the Transport Commission, and I think there is an overwhelming case to keep them as a unified force. We will seek Government aid in this matter, although I do not think we have to convince them that a unified force is needed. But I think we need to take away the possibility of one section, one Board, weakening the whole structure by opting out and setting up its own force.
My Lords, I feel that I have spoken too long. There is much more that could be said about this Bill, and I think much more will be said on the Committee

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stage. We like some parts of the Bill, but there is a great deal to which we are fundamentally opposed. My noble friends and I will try to protect the public interest, because our feeling is that the public need to be protected from this Bill.
4.50 p.m.
LORD LUCAS OF CHILWORTH: My Lords, those of your Lordships who have interested themselves in the nation's transport matters since 1947 view this Bill as, perhaps, the ultimate destiny of the Transport Act of 1947; and there are Members of your Lordships' House, such as the noble Lord, Lord Molson, and myself—I in 1950 and 1951, and he of a later vintage—who played some part in the operation of the Transport Act. My Lords, I would, as a preface, congratulate the noble Lord, Lord Chesham, on the very clear and incisive way in which he put this very difficult Bill—it is a very intricate Bill—to your Lordships. He was unimpassioned when he came to the heart of the matter: perhaps I shall not be quite so phlegmatic. But the House certainly owes him a great debt of gratitude for so clearly explaining this Bill.
May I also offer a respectful word of congratulation to the noble Lord, Lord Shepherd? From his point of view, I thought he made an excellent speech; and, as one who has stood at that Despatch Box, year in and year out, criticising the Government for their handling of transport matters, I was almost tempted to indulge in what I have always been told is one of the most useless observations ever to make—to turn to the Government and say, "I told you so". But if I do indulge that human failing, it is because, after all these years—ten years—when the British Transport system has gone on and on losing millions of pounds of the taxpayers' money, the Government cannot say for one moment that they were not apprised of the position at least once a year. But, no; White Paper after White Paper was produced, apologia after apologia; and when I told them, year after year, that they had not a dog's chance of ever making the British railway system pay, always the "pie in the sky" argument was used. So I would offer a word of congratulation also to the present
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Minister of Transport, who has, I think with great courage, grasped this nettle and put the position before the country in all its brutality. The Minister is subject to criticism on various counts, but nobody can criticise him for not having the courage of his convictions.
Now, my Lords, the issue between the two sides of your Lordships' House on this Bill is very plain. It has been quite frankly and fairly stated by the noble Lord, Lord Shepherd, and will be reiterated by the noble Lord, Lord Lindgren, when he winds up for the Opposition. I always have a great respect for the views of the noble Lord, Lord Lindgren, on transport matters, although I do not often agree with them. But the simple issue is this: should we run the transport system of this country (in the words of the noble Lord, Lord Shepherd) as a service or as a business? Clause 18 of this Bill contains the same words as a similar section in the 1947 Act:
"Each of the Boards shall so conduct their business as to secure that their revenue is not less than sufficient for making provision for the meeting of charges properly chargeable to revenue, taking one year with another."
That was also stated in the 1947 Act. The charge to the British Transport Commission then was that they had to make their business profitable: the charge to the reorganised British Transport Commission to-day is precisely the same.
Listening to the noble Lord, Lord Shepherd, anyone would think that this Bill denationalised the whole of the British transport services to-day. It does nothing of the kind: it reorganises them. That is clearly stated, in plain language, in the first paragraph of the Explanatory Memorandum:
"The main purpose of the Bill is to reorganise the structure and finances of the nationalised transport undertakings at present carried on by the British Transport Commission and to give the new undertakings greater commercial freedom."
That is not denationalising them. I want to put this to the House quite frankly. Taking the figures which the noble Lord, Lord Chesham, gave your Lordships—and I will not go through them all because I expect your Lordships made a note of them—he said that the capital debt up to the present time was £2,450 million. That is what the taxpayers a

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interested in, and it includes a £475 million accumulated loss. This was the figure that, in the old days, I used to accuse the Government of chasing up and down the columns of account books and over the pages, and in respect of which I used to say, "For Heaven's sake! write it off. You cannot lose it in any other way". Now they have written it off. That is the taxpayers' loss, to start with.
Then the noble Lord said that, of the remainder, £1,575 million is the share of the capital debt that must be borne by British Railways. But he went on to say that, of this total, £650 million to £700 million were (and these were his words) "a very doubtful debt". My Lords, it is a very doubtful debt; and, if I wanted to place a true picture before the British public, I would add that to the £475 million and say that the loss is now £1,175 million. Because although the noble Lord can chase his £650 million or £700 million up and down the pages of the account books in the future, the ultimate end will be the same: it will have to be written off.
Now, with that fact staring the Minister in the face—plus the fact that they are not going to charge the Commission any interest in respect of this sum of £650 million to £700 million "doubtful debt"; and that will cost the taxpayer £35 million a year, because that comes under charge of the Treasury—and remembering that British Railways are to-day operating at a loss of £80 million a year, what could the Minister of Transport do other than what is in this Bill? What could he do? It is a dreadful responsibility.
My Lords, I must say this: that when you get those figures, and when your Lordships have studied them, you will come to the conclusion that never in the history of any British industrial concern has there been such a story of ineptitude and incompetence. And the two bodies who must share the blame—you can carve it up between them as much as you like—are the Government and the British Transport Commission, because they would not tackle this matter in time. If a Bill like this had been produced about ten years ago, it might have saved the British taxpayer millions and millions of pounds.
Now, my Lords, I am not going to go into the past, because I should like
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to address my remaining remarks to the future. I have read out to your Lordships the charge to the new organisation contained in Clause 18. This is somewhat qualified, as your Lordships will see when you turn to Clause 22. This, in my view, is the heart of the whole matter. Clause 22 (4) says:
"During the period of five years beginning with the vesting date subsection (1) of section eighteen of this Act shall not apply to the Railways Board"—
that is the subsection which says it has (to use commercial parlance) to "wash its face"—
"but the Railways Board shall so conduct their business as to place themselves at the earliest possible date in such a position that their revenue will be, and continue to be"—
"continue to be", my Lords—
"not less than sufficient for making provision for the meeting of charges properly chargeable to revenue, taking one year with another".
They have five years' grace to get into a viable position. Subsection (5) of Clause 22 says:
"For the purposes of the last foregoing subsection and, after the expiration of the said period of five years beginning with the vesting date, for the purposes of subsection (1) of section eighteen of this Act as it applies to the Railways Board, the Railways Board shall take into consideration deficits on revenue account arising at any time after the vesting date, except so far as the Minister has, under subsection (1) of this section, made a grant to meet any such deficit".
The noble Lord, Lord Chesham, said to your Lordships quite bluntly and frankly that the Minister will for five years contribute a sum not exceeding £450 million to help with the accumulated deficit over those five years. After five years he can make a grant—in other words, make them a gift, or write it off—or he can make them carry it in the future. So they have to bring this back from an operating loss—and that does not take any account of any interest charges at all—an £80 million a year loss, and in five years put it on a profit-earning basis. I ask the simple question: can they do it? To say that it is an impossible thing to do is a defeatist attitude, but I do not think they will do it. Frankly, I think the whole position is beyond them, and I will tell your Lordships why.
At the present time they have to economise to such an extent that they

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have to go on working with equipment that is not fit. I do not think they are recruiting sufficient brains at the top. This is not a criticism of Dr. Beeching. I have not the pleasure of knowing the gentleman, but all my inquiries show (that he is a first-class man, right on top of his job and is as enthusiastic and as courageous as the Minister. But, if I am right, Dr. Beeching's engagement is for only five years. I also think I am right in saying—no doubt Lord Mills will correct me if I am wrong—that some of the men, and the best of them, who have been brought into the Commission are on only a three-year loan arrangement. And the job has to be done in five years. Frankly, I hope that the future is going to prove me wrong, but I am not at all happy, because we are not getting into the railway system of this country top, first-class brains 'after we have cleared out all those "decorations" which were put in the Commission by patronage. If the noble Lord, Lord Shepherd, wants it quite plainly, the curse on any nationalised industry is that wretched system of patronage, and not ability, which is the first consideration with a lot of appointments. That is why I hope that regional area boards will be composed of practical men—the general managers, the chief engineers, the electrical engineers—and not composed of decorative persons on a part-time basis.
We are also not getting the brains in the second-class categories, the second level. Another thing your Lordships must face is that the lower levels in British Railways are some of the worst paid in the country. You cannot get first-class men on any grade unless you are willing to pay a decent price. Those are some of my reasons why I have my doubts, and I hope that the noble Lord, Lord Mills, will perhaps give me a reassurance on some of them.
I do not criticise what is being done. I cannot think of an alternative. The alternative of the noble Lord, Lord Shepherd, is no alternative. The British people have decided that they would rather have an independent form of transport. We in this country cannot go on following a high-priced fuel policy with a high-priced transport policy. For fifty years we have had too many railways, and we have too many now. They
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are uneconomic, and industry in this country is far the best judge of how it will transport its goods, in the interests of the nation's economy, from the conveyor lines of the factories. Handling is the biggest single cost factor in the whole price structure in industry, and unfortunately the railway system is one which adds to handling costs.
May I quickly mention two points about which I am unhappy? It is all very well to close down redundant railway lines. Of course, the best way of preventing the loss of money on the railways is not to have any railways. But what are we going to do in rural areas if uneconomic railways are closed down? What alternative transport are we going to provide and what are we going to do when we cannot provide that transport at a profit? There are vast areas where economic rates and fares would be prohibitive. Perhaps one day the Government will bring in a Bill—I think it would be an amusing one—to make it obligatory for private bus services to run at a loss. But some bus services will have to run at a loss.
The noble Lord, Lord Chesham, said that the new road passenger services would belong to the Holding Company. I cannot see anything in the Bill which gives the railways the statutory right to run bus services, although I may be wrong. Perhaps the noble Lord, Lord Mills, will let me know. I am very apprehensive about this whole question because, if we are not going to have the herding of population within urban areas, with all the complications that that brings, we have to provide a country-wide transport service, and in this country there are some services Which can never be made commercially profitable. I should like to know the noble Lord's answer to that.
On the development of land, I take a view opposed to that of the noble Lord, Lord Shepherd. I would ask the Minister whether under this Bill it is possible for development companies to be formed for property development, because if there is one thing to-day that requires expertise and technique it is the development of property. I do not know anybody on the British Transport Commission who has the slightest knowledge of property development. There are millions of pounds worth of property that the Commission do not know they

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have. The auditors' report says that they have not been able to check all the leases and deeds of property; they are far too numerous. But somebody has to do it some day.
I should like also to ask the Minister to take care of one thing. As the noble Lord, Lord Shepherd, said, the Commission's land should be used to develop facilities which the railways are bound to have, and one thing that is needed at every one of the stations in rural areas as well as in London is far more car parking space. It is no good for the iron-rail mind to look upon the car owner as some kind of parasite. For example, when coming to your Lordships' House, I have to be at Oxford station half an hour before the train leaves, in order to get into the car park. It is full when I catch even the first or second train. The Commission should do all they can to attract people to make long journeys by rail instead of by road.
I want to make one suggestion to the noble Lord. I am staggered because at a time when the Government are really trying to do something to increase the revenue of the railways they will persist in allowing abnormal loads to go along the roads of this country. The other day British Road Services, full of glee, came out with an advertisement announcing that they had just invented a vehicle with forty wheels. I agree with the noble Lord, Lord Shepherd: if that is supposed to be competition with the railways, it is competition ad absurdum—but they are doing it. We see the police escorting abnormal loads, at the cost of the taxpayer and to the deterioration of the roads, when by any conceivable standard they should be sent by rail. And when I have argued this I have had the reply, "We cannot interfere with the costs of our transport business." Nonsense! These abnormal loads are putting up costs by delay to every other road user.
When I come to think of some of the problems facing the Minister I do not wonder that the noble Lord resisted all blandishments for pipe-lines to be placed under the aegis of the Ministry of Transport. I should think that the Minister and his Ministry must work 24 hours a day and 7 days a week, and there are more problems to come on his plate, including shipping. I support the Bill
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because I believe that it introduces the only thing that can happen. I wish that the noble Lord would make the period a little longer, but perhaps he will tell me that it can always be increased. I wish the Minister the very best of luck; at least, he deserves it.
LORD LINDGREN: My Lords, I did not want to interrupt the noble Lord while he was speaking in case I upset the context of his remarks, but before the noble Lord sits down I would ask him this. I was interested in his reference to the railway's responsibility for providing car parks. In view of the capital value of the land and construction costs and the fact that a car-park hire charge of 1s. or 1s. 6d. can never in any way meet these costs, who is going to bear them?
LORD LUCAS OF CHILWORTH: The man who uses the car park.
5.18 p.m.
LORD TEYNHAM: My Lords, I certainly welcome this Bill. It is the first real attempt, as the noble Lord, Lord Lucas of Chilworth, said, to put the railways on a proper financial basis. The noble Lord also said that this Bill should have been produced ten years ago; and I entirely agree with him. He painted a very depressing picture of the future of the railways, but I hope that this Bill may do some good. I am sure that it is right that there should be a number of completely autonomous Railway Boards. I think that this will enable them to concentrate on railway business, without being worried by other matters. I am sure that it is also right that they should have their own financial structure. I am very much in favour of streamlining the railway system, which not only will save large sums of money but should also release large numbers of men who can be more productively employed in other industries. On the other hand, I am sure that your Lordships will wish to hear from the Minister in charge of the Bill how the shut-down railway services are to be replaced by passenger road transport. This was very clearly brought out by the noble Lord, Lord Lucas of Chilworth.
We have heard a great deal from the Party opposite, not only to-day but also in the past, about an integrated transport service being the only salvation for

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the railways and the roads. They have said that we on this side of the House, when we amended the 1947 Act, destroyed the integration. But the fact is that we have never had integration: and the 1947 Act never produced it, because "C" licence holders, for reasons which are well known, were left out of the Bill. I would say that it is not possible to 'have an integrated system of transport, except under a dictatorship or a Communist régime, and I do not think even the Party opposite would like to have that. The Bill which is before us to-day will, I think, provide coordination, but it will not provide integration, and that is what I think the country would prefer to-day. I suggest that the co-ordination of policy and investment is the province of the Minister of Transport and Parliament, and that this Bill provides for it.
The Transport Commission will cease to exist under this Bill, and it appears that a new body, to be called the National Transport Advisory Council, composed of the Chairmen of the four main Boards and of the Holding Company, is to be set up to advise the Minister. I must say that I am not very happy about this set-up. Surely each Chairman of his respective Board will be out to look after the interests of his own undertaking. It would seem that the Minister is unlikely to receive any helpful, co-ordinated advice from such a gathering. Perhaps the Minister in charge of the Bill can tell us a little more about it when he comes to reply, and whether a proper secretarial staff is to be provided.
I was delighted to see in the Bill that the London Transport Board are no longer to hold the monopoly of stage carriage services in the London area. I presume—I may be wrong—that it will now be possible for the London Transport buses to have a little competition, which will certainly not be a bad thing, and perhaps will be welcomed by the public. When we look at Clauses 69 and 70 of the Bill, it appears that the Transport police force, which, I think, was touched on by the noble Lord, Lord Shepherd, is likely to be split up into separate forces for each of the separate railway Boards. Surely, this would be a retrograde step. It would undoubtedly
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cause an increase of expenditure and, I think, loss of efficiency, and, last but not least, it would cause great dissatisfaction among the members of the police forces themselves. I think it will undoubtedly also interfere with their promotion. I hope the Minister of Transport will look at this matter again before the Commitee stage of the Bill.
I am still uneasy about the proposed abolition of the Coastal Shipping Advisory Committee which has operated so successfully for a large number of years. The noble Lord, Lord Shepherd, has mentioned competition between road transport and coastal shipping. I am sorry he is not in his place at the moment, but I should like to point out to him that there are, of course, fundamental differences in the competition between road haulage and coastal shipping. In the first place, the size of the unit of transport is quite different. Small coasters are almost entirely concerned with the movement of consignments of 200 tons upwards. This restricts the market they serve, whereas road transport, like the railways, can cater for consignments of any size and can therefore rely on a steady flow of traffic in easily handled quantities. In the second place, road haulage has the attraction to the trader of delivery direct to the shop floor, thus avoiding costly handling charges.
It is true that certain Amendments have been made to the Bill during its passage through another place, but in my view they do not go far enough to protect coastal shipping. I wonder how many of your Lordships realise that some 500 coastal ships, manned by British officers and men, ply between Over 150 ports on the coasts of the United Kingdom. These little ships carry some 27 million tons of dry cargo, mainly bulk commodities, over very long distances, and also trade with the near Continental ports. Not only do they earn foreign currency in doing this, but they also reduce sterling expenditure on freight for the movement of exports and imports.
I think it will be quite clear to your Lordships that participation in the Continental trades must depend on a flourishing coastal trade. There is no doubt that the railways will continue to receive a subsidy in some form or

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another which would enable them to quote uneconomic rates, and with the greater freedom to be given to them under this Bill it is all the more necessary that effective statutory safeguards for coastal shipping should be put into the Bill. Clause 53, as amended in another place, would, in fact, enable complaints to be made about uneconomic railway charges only after they have already been put into operation. This would mean that the traffic would be lost before any action could be taken. I maintain that this clause must be amended so that the charges proposed to be made by the railways can be scrutinised to see whether they are uneconomic and unfair to the shipping industry. It is no use shutting the stable door after the horse has bolted, but that is what this clause, as amended, now means. British shipping realises that the railways must be put in a batter position to pay their way in the national interest, but I suggest it would be a disaster if, to save the railways, other important sections of the transport industry which are represented by private industry are swept out of existence by a Conservative Government because safeguards are not provided in this Bill.
There is another section of the shipping industry known as the short-sea liner trades. About twenty British companies maintain a network of regular, scheduled services between ports in the United Kingdom and ports on the Continent, such as France, Belgium, Holland and Western Germany, and they employ about 100 little ships. These small vessels carry a wide range of general cargoes, as distinct from the bulk cargoes carried by the small tramp vessels. During recent years intensified competition has been experienced from the shipping services operated by the British Transport Commission. As I said before, the shipping industry does not mind fair competition, but if the railways quote a through rate to the Continent with an uneconomic railway haulage, the competition is manifestly unfair.
I feel—and I have said before—that some provision should be made in this Bill whereby a complaint could be lodged in the same way as for the tramp traffic. I maintain that it would be quite wrong if, by ignoring proper commercial costs, a nationalised industry were
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enabled to compete unfairly—and I repeat, "unfairly"—with private industry. I think it is true to say that the Ministers of Transport of successive Governments have all stressed the importance to the nation of maintaining an adequate supply of coastal shipping. Not only is it important in a peace-time economy, but it becomes vitally important in time of war. I feel it is essential that the Bill should be amended to safeguard the interests of coastal shipping from unfair competition.
There is another matter to which I should like to refer for a few minutes, and that is the proposed Holding Company and its future relations with passenger transport companies which are at present partly owned by private enterprise and partly owned by British Railways. This system of part ownership has worked out extremely well, and experienced railway executives have been appointed to the boards of these companies, which has resulted in proper and efficient co-ordination between bus and rail services. Under this Bill this link would be broken, and it would seem that the Holding Company, in which the shares of these companies will be invested, would be able—I do not say they would—to supply directors to the boards who know nothing about railways. This seems to me to be a very illogical set-up and damaging to what has been a successful partnership between railways and passenger road transport.
I am afraid that I am one of those who feel that, however much money is poured into the railways, as at present constituted they will never be able to break even. In fact, I would go so far as to say that in the years to come we shall not have railways in their present form at all. I think we may well see the railway tracks as we know them now torn up and replaced by roads, with possibly monorails overhead. At the present time we are trying to bolster up an out-of-date form of transport. We certainly need railways of a kind, but not in their present form. I should like to congratulate the Minister on his great efforts to reorganise the railways under this Bill, and I feel sure that he has an open mind about the future form in which the railways may evolve. I am fairly convinced that radicad changes will have to take place one day. I only wish it

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were possible that this Bill could take us further along in the changes that will one day become necessary.
5.30 p.m.
LORD SILKIN: My Lords, I am sorry that the noble Lord Who introduced the Bill is not here, for I should like to begin by congratulating him on an extraordinary performance. It is a most complicated and detailed Bill, and I have seldom heard a Bill of this magnitude explained in such a clear way and so concisely as he did. Whether we like this Bill or not, at least we cannot complain that it has not been properly explained to us. I should also like to congratulate my other absent friend who followed him, likewise in a speech of great clarity and thoughtfulness; and again, whether one agrees with him or not—and I imagine that a good many noble Lords facing me would not agree with me—at any rate he made his case quite clearly and forcefully.
My own personal position is that I have no feeling of dogmatism about the way in which the railway system of this country should be run. I am quite clear, however, about what we all want. We want a system which will give the public the service it needs, a satisfactory and efficient service; and I think it is there that I part company from noble Lords opposite. I am not particularly critical, although some of my noble friends may be, as to the method adopted in this Bill, but I am critical of the conception of this Bill, Which was explained by the noble Lord who introduced it, as a Bill which has for its purpose not only commercial freedom but also the rendering of the railway system of this country as a commercial undertaking. And that was illustrated by a number of examples that he gave—for instance, the closing of uneconomic lines, without regard, as the noble Lord, Lord Lucas of Chilworth, emphasised, to What services would be provided in their place.
My own view is that of the noble Lord opposite who has just spoken and of the noble Lord, Lord Lucas of Chilworth: that the railways of this country never will pay if we set out to provide the community with a service that it needs. Because, of course, many parts of that service are bound to be uneconomic. You either adopt the policy
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which seems to be indicated in the hints that have been given about this Bill, that a considerable number of uneconomic lines will be closed, or you have to provide some form of service, even if it is an alternative, usually at a loss. I think we have to reconcile ourselves to the fact that a transport system of this country must be subsidised if it is to be run satisfactorily in the interests of the community.
While I personally have no particular objection to the devices contained in this Bill for separating the different railway systems, provided that there is strong co-ordination, I do not myself believe, as the noble Lord, Lord Lucas of Chilworth, indicated, that in the long run this method can make the railway system self-supporting, unless we decide to abandon all uneconomic services and put nothing in their place. Even this Government, I imagine, would not be prepared to go so far as that. So let us get out of our minds altogether that we, unlike most other countries in the world, can produce a transport system which is going to be self-supporting.
Having said that, my Lords, I want particularly to deal with one aspect of this Bill on which perhaps I am more qualified to speak than on other aspects, and that is Clause 11, dealing with surplus land, which the railway undertaking are to be given freedom to dispose of. I have no objection at all to the disposal of land which the undertaking no longer require. That is a sensible provision. I am not quite sure whether they should be allowed to develop it themselves, or whether they should merely dispose of it at the best price they can get. But I want to make just this provision. In London, in particular, it is estimated that we have about 1,000 acres of land—although it may be more—which, under this Bill, is liable to be disposed of. Certainly in the country the total area would be quite considerable. Here I want to be a little technical, and I hope that the noble Lord, Lord Mills, will not mind that.
Most of these sites to be disposed of have existing user rights, which, in ordinary language, means that they could be disposed of for offices or for industry. Now Government policy in London to-day is to discourage offices and industry. If I, as a private individual wished

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to put up a block of offices anywhere in London I should be refused planning permission; and I have no doubt that the odds are a thousand to one that, if I appealed, the Minister would refuse. What is to be the position of the railway undertaking? They will have to apply for planning permission as well. If they are to be allowed to develop their land in a way which the Government regard as anti-social, and which certainly local authorities regard as anti-social, then, of course, they will get the full value for their land. But are we, in the interests of so-called sound finance, to permit the railway undertakings to use their land for what the Government themselves regard as anti-social purposes and to create new problems of congestion and the need for further transport which would be impossible to satisfy? In that case the railway undertakings are not going to get an adequate and full value for their land. Yet the broad purpose of Clause 11 is that they are to do so.
By and large, certainly in London and possibly outside London, too, most of this land belonging to railway undertakings will be used for housing, or for other less valuable purposes, such as offices, industry and so on. They may even be used, as my noble friend pointed out, for car parking. A good deal of it would probably be very suitable for that purpose, but it certainly does not command a high value. I should now like to ask who is going to pay the difference between the full value, on the assumption that the railway undertakings could use their land for its most profitable purpose, and the lesser value if it were used for the purpose for which, in the public interest, it should be used? And are the Government going to insist that this land is used in the most profitable manner, regardless of the public interest? That is a serious problem which arises under Clause 11, and although it is a matter which is perhaps capable of being dealt with in Committee I feel that it is Of such importance in principle that it deserves a reference on Second Reading.
There is one other point that I want to mention, and then I will sit down; for we have a long debate before us. In the course of the discussion so far, we have all talked about closing down railway
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lines that are unnecessary. But is there to be any extension of our railways system at all? Do the Government contemplate that? There is one line, in particular, that I have in mind—it is one that has been freely canvassed—and that is the line running from Victoria to Walthamstow. It is absolutely essential in the public interest that something should be done about this line. It is now twenty minutes to six. I invite any noble Lord to go down to Westminster Station now and try to get on to the Underground. I myself, on those occasions when I have had the good fortune to get home at this time of the evening, find that I have to let several trains go by because I just cannot get in; and if I do squeeze in I regret it. Those are conditions to which no human being should be subjected at the end of a day's work. Yet that is the position to-day. And the Government talk of closing down uneconomic lines! I understand that the District Line is uneconomic. I imagine that even the Government will not go so far as to close down the District Line.
LORD HAWKE: My Lords, may I intervene? I think the noble Lord has chosen one of the more favourable instances. If he were to go to Oxford Circus at a similar time he would probably queue for many yards before he got near the station entrance. He is voicing a crying need of the public for years for this Tube.
LORD SILKIN: I am glad to have the noble Lord's support, and I am very glad that I do not have to go to Oxford Circus. I remember that I have even seen the station closed, and the public not admitted to the precincts. Those are the conditions under which the British public at the end of a day's work try to get home.
Or let them queue up for a bus. I do not know whether I have been particularly unlucky, but I find that when I do queue up for a bus, after a quarter of an hour or twenty minutes I am no nearer the head of the queue than before; somehow people seem to be getting in front of me. However, I am stating these things merely to emphasise the urgent need for some improvement, and particularly for this particular improvement which I am advised would

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make a feig difference to those who have to travel.
Those in South London have an even worse time. They do not have a Tube; they have to rely on buses. And to have to wait in a queue for half an hour to get on a bus is no fun. I feel that instead of fiddling around with legislation of this kind, which I believe those best qualified to judge do not think is going to make very much difference, the Government should concentrate on seeing how they can deal with the travelling public and how they can improve conditions. I should think that if it were possible to improve conditions of travelling, and of transport, they would stand a much better chance of making the services pay than under the present conditions of restriction.
I believe that the Government are making a mistake. I do not take it so tragically, because probably they are quite right to try all kinds of devices to see what they can do. But I believe that, in the end, they will come back to something of the kind which exists to-day; that is, a far more integrated system with a certain amount of devolution. And I hope that the words of the noble Lord, Lord Lucas of Chilworth, will be taken seriously into account, and that those charged with the responsibility for running railways will be the people best qualified to do so.
I am sorry that I cannot wish the Government success with this Bill, but I hope that somehow they will find a way of dealing with the problem confronting us, which in my view is far less a financial problem than a transport and traffic problem. I think that is the real point. I believe that the actual loss on the railway system would fade into insignificance if it were possible to evaluate what we are actually losing in other ways—in delays to transport, freight and passengers. If every vehicle on the road is delayed half an hour, on an average, for each journey, try to evaluate what that amounts to, and I am quite sure that it would come to far more than the £80 million or £90 million a year which the British Transport is supposed to be losing. So I hope that the Government will look at the matter much more from the point of view of public service than from the point of view of public finance.
5.47 p.m.
LORD MOLSON: My Lords, when last year I addressed your Lordships on the White Paper I drew attention to the danger that the policy the Government had embarked upon would result in a complete break-up of such co-ordination as there is at the present time between the different forms of transport. I referred to a remarkable book called The Middle Way written by the present Prime Minister, in which he suggested that what is required in the 20th century is neither the complete integration or nationalisation to which noble Lords opposite are committed nor the old-fashioned cut-throat competition of the past, but some kind of middle way where a certain amount of devolution and freedom is allowed while the general policy is co-ordinated. This Bill is, I think, rather better than I had expected when I read the White Paper.
Let us be quite clear as to what the Government are intending to do. It was the aim of the Socialist Government under the 1947 Act to put into the hands of the British Transport Commission responsibility for integration or coordination of transport. Under this Bill the present Minister of Transport is taking that responsibility upon himself. I admire his courage. I think he is going to find it extremely difficult to do. I am not sure that he quite realises what are the political pressures in a free country that will operate upon him. It is very difficult to persuade dwellers in rural districts to agree to the closing down of branch lines, even though many of those people never themselves make use of the branch lines. That is the responsibility which the present Government are putting upon the Minister of Transport.
I cannot refrain from saying that I think that if the noble Lord, Lord Morrison of Lambeth, were here he would probably refer to the debates about nationalisation—and the noble Lord, Lord Silkin, remembers them—in the Parliament of 1945–50, when it was the Conservative Party who were always saying, "Let us make certain that these nationalised industries are administered by impartial boards, and let us at all costs avoid interference by the political Minister." Well, years have passed, and in this, as in many other things, the

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policy of the Conservative Party has apparently changed. I only hope that it will turn out satisfactorily.
I welcome the creation of the Nationalised Transport Advisory Council, and I do not wholly agree with my noble friend Lord Teynham when he suggests that because the Chairmen of these different Boards all meet and discuss matters together, they will not be able to give wise advice to the Minister. It seems to me that if the responsibilities of the Transport Commission are to be broken up amongst these Boards, it is extremely desirable that the Chairmen of the Boards should come together and discuss how their general policies are to be co-ordinated.
I welcome the creation of a Board to administer the railways. As the Parliamentary Secretary has reminded us, three-quarters of the vast concern of the Transport Commission is its railways, and that is far too big a thing to be administered by a Commission which has other interests to consider. I also welcome the creation of the Regional Boards. I am glad that they are to have only such powers as are delegated to them by the Railways Board. I think also that it is a good thing that inland waterways should come under a separate Board. That is a difficult problem, and I only hope that too much money will not be invested in these canals, because it is not going to be easy to make them profitable in the 20th century. I entirely agreed with the noble Lord, Lord Silkin, when he welcomed the power to dispose of railway land; and I also agreed with him that it should not be considered the duty of the Board to disipose of land at the highest price, regardless of public services and such considerations. I think we shall have to probe this matter a little further in Committee.
I come to the question of the Holding Company. Clause 29 (6) provides that it should be conducted on commercial lines. I suppose that means that normally it is to be administered in order to maximise the profits that it makes. Clause 29 (4) empowers the Minister to give directions to the Holding Company as to how it is to administer the interests under its control. I think it of the utmost importance that the Minister shall ensure that the Holding Company does not set out to make profits regardless
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of what the effects of its policy may be upon other forms of transport, and especially upon the finances of the Railways Board. I think it is essential that there should be proper co-ordination, and it will largely depend upon the way in which the Holding Company influences the bus companies and other forms of road transport whether, under this Bill, we preserve some of the benefit of the co-ordination that we have had in the past.
This is of such importance that I venture to go into it a little more fully. Let us take the passenger road services, the buses. Long before nationalisation the old railway companies bought large interests in the bus companies. That was considered to be sound business in the days of competition. The bus companies are in many cases ancillary to the railways. When railway services are closed down because there are not enough passengers to pay the way, it is often the case that the railways call upon the bus companies to provide bus services to take the place of the railway train service which has been suppressed My noble friend Lord Teynham referred to this extremely important matter.
Under Clause 7 (2) the London Board is placed under an obligation to coordinate its services with British Railways, and to co-operate with them. There is in the Bill no such obligation upon the Holding Company; but since the Holding Company is under the direction of the Minister it will be open to him to ensure that this is done. I would ask my noble friend Lord Mills in his concluding speech to explain in what spirit the Minister intends to exercise these powers of direction. Of course, the same applies, on an even larger scale, as to what are the real intentions of the Minister and of the Government if there are now to be four separate Boards. Does he intend to ensure that there shall be a co-ordination of policy between the Board running the railways, the Board running the canals, the Holding Company that I have referred to, and coastal shipping? It seems to me most important that we should know what the Government's intentions are.
Closely connected with this is the whole question of the licensing of road transport. I know that this is not directly affected by this Bill, but it underlies

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the whole of our traffic policy in this country. It was in 1930 that noble Lords opposite, when the noble Lord, Lord Morrison of Lambeth, was Minister of Transport, introduced the Road Traffic Bill under which passenger services on the roads had to be licensed. The Conservative Government, in 1953, appointed a Committee under Mr. Justice Thesiger to look into the whole question of this licensing, and that Committee reported that on the whole the system had worked well. Although that was a Socialist measure introduced by a Socialist Minister successive Conservative Ministers of Transport have all continued to work it. When a National Government had come into power, a Conservative Minister of Transport applied the licensing system to goods transport on the roads, under the Act of 1932. It required that lorry owners should obtain A or B licences; it imposed no restriction on C licences, nor was any made by the Act of 1947; and I am inclined to think that that is one of the ways in which both Parties were in equal error.
I should like to know whether it is the intention of the Government to maintain the general principles of this licensing. There is now too much traffic on the road, both passenger and goods. This may get worse as the result of motor ways, because while transport demands roads, the provision of roads encourages motor transport. I say again that the Prime Minister's middle way requires the maintenance of the general principle of this licensing system, which is the joint work of successive Socialist and Conservative Ministers in the past. I have tried to put this problem quite generally. But there are two special matters illustrating it. This licensing has done a great deal to keep bus services going in rural districts. We have had reference to the importance of these bus services and the difficulty of keeping them going in rural areas. Under the licensing system as it has been worked the Traffic Commissioners often make it a condition of granting licences that the bus companies should continue to maintain uneconomic services in particular places as a condition of their being licensed to conduct more profitable ones. That is an illustration of how satisfactorily and
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helpfully the licensing system has worked.
I deplore the recommendation of the Jack Committee that rural bus services should be subsidised. If subsidies once begin, where are they to end? The rapid increase in private rural transport is largely responsible for many of these bus services being discontinued, and probably 40 per cent. of agricultural labourers now have available some form of private transport, whether cars, scooters or mopeds. This is an additional reason for maintaining the licensing system, which is a flexible and practical way of dealing with this problem.
When I was at the Ministry of Transport there was discussion of the possibility of an amalgamation of the parcels service (which now is to go under the Holding Company) and the delivery service of British Railways. If that could not apply everywhere, at any rate it was thought possible that it might be introduced in London and large built-up areas, reducing the duplication of lorries and vans travelling the roads. No progress was made at the time, largely owing to opposition by the trade unions. But this illustrates what makes me anxious about this Bill. As a result of the parcels service coming under the Holding Company and thereby being completely separated from the delivery service of the railways, are we to take it that any idea of an amalgamation—partial or complete—of these services is made more difficult? As I have said, the Minister, under Clause 29 (4), has power to give directions to the Holding Company—and I hope that he will give them directions—to explore the possibility of an amalgamation of that kind, which I think would streamline the general service and reduce congestion.
In so far as I understand them, I welcome the changes that are being made in the powers of the transport users' consultative committees. They were set up, naturally, to look after the interests of transport users, but they have of course very much slowed down the rationalisation of the railways and the closing down of uneconomic services. The powers are now, under this Bill, considerably reduced. I would ask whether the Minister will be bold in accepting the recommendations of the

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Railways Board to close down uneconomic lines and services; and, if that is done, how does he intend to replace them? Is he—and I repeat my question—under Clause 29 going to direct the Holding Company in suitable oases to provide bus services as a more economical alternative to the branch lines? If instead he instructs the Railways Board to keep those uneconomic services open, does he then intend to pay the cost of those services on the ground that this is not a commercial operation but one which is in fact a public service?
I agree that the British Transport Commission has been too large and too centralised. This Bill goes a long way to decentralise it, but I ask myself—and I ask the Government—will it not go too far in disrupting transport? The Minister has taken upon himself great powers. I want to know how he intends to use them. Will he preserve the licensing system as set up in 1930 and 1932? Will he use Clause 29 (4) in order to ensure that the Holding Company does not act under Clause 29 (6) to make the maximum profit, regardless of the effect on the transport system as a whole? Will he use his powers in a positive way in order to encourage such amalgamations as that of the parcels service and railway delivery, and to encourage the substitution of buses in country districts for branch lines Which are closed down? Will he ensure that all these different boards co-operate and co-ordinate their services? My Lords, I believe that if the Minister acts in that spirit this Bill can be a very great step forward, can be of immense financial help to the country as a Whole, and will at the same time preserve what we have at present in some degree—a coordinated transport system.
6.7 p.m.
LORD CITRINE: My Lords, I wish to add my tribute to the noble Lord, Lord Chesham, for the succinct way in which he introduced this important and comprehensive Bill. It is a characteristic which I have associated with him in close observation of his work in this House on many occasions. He has told us that the main purpose of this Bill is the reorganisation of nationalised transport undertakings, and, if I may sum up—I hope not unfairly—the way in which
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this Bill attempts to achieve that reorganisation is, first, by abolishing the only co-ordinating body now in existence and, secondly, by providing us with an attenuated railway service which will involve dispensing with the services of some 150,000 people now employed by the railways.
It may be asked what my interest in this matter really is. It is, in the first place, because I am a believer in nationalisation as a system of economic organisation; and, in the second, because of the experience I have obtained during some fifteen years' involvement in the actual operation of two nationalised industries. I was a member of the first Coal Board, and for ten years I had the honour to be the Chairman of the British Electricity Authority and its successors. I am now occupying the modest position of a part-time member of the Electricity Council. I was associated, in my Trades Union Congress days, with the formulation of the principles which were developed by the Labour Party when in office and which ultimately resulted in the legislation which nationalised the transport system, at least in part, of this country.
The principles which appeared to be outstandingly important in my Trades Union Congress days were, first, the efficient, economic operation of the nationalised industries and, secondly, the provision of an adequate public service by those industries. It was a balanced combination of both of those principles which was in our minds at the time we, as trade unionists, were giving consideration to this question. I certainly never believed for one minute that nationalisation could be universally applied to all the industries of this country, irrespective of their state of growth and development; nor did I regard it as a cure-all for the economic evils with which modern society is afflicted. There were those who, perhaps, expected too much from a change from private ownership to nationalisation. It may easily be that there has been a measure of disappointment, not merely on the part of those who did not believe in nationalisation—disappointment in the sense of lack of achievement by the industries—but also on the part of the supporters of nationalisation.

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I think that an intimate knowledge of the industries themselves would, perhaps, restore a sense of balance about the achievements of these different industries. I am quite certain that to date (there has not been evolved any kind of alternative, other than nationalisation, to the trust and the combine, which to-day are becoming a feature of our life in this country, and which have shown themselves extremely powerful in the United States and elsewhere in, shall I say, the economic affairs of a country.
The major difference between the nationalised bodies and the great aggregations like I.C.I., Courtauld's, Lever's, Dunlop's, and these large companies, is that in the case of the nationalised industries they are constantly under the searchlight of public criticism. Ministerial inquiries, all kinds of ad hoc committees, Select Committees and other bodies are constantly, in some way or another, probing into the affairs of the nationalised industries. I sometimes wish that some kind of examination could be made of the affairs of these large corporations which are still in private hands. I think that a good deal of the assumed efficiency, which appears to be established by the balance sheets, would dissipate in the process.
Certainly, it is a very much more difficult thing, for people who are trying efficiently to operate a nationalised service, fearlessly to take their decisions when in fact they know that, years after the event, some committee will come along and will want to know why such a decision was taken, or why another decision was not taken. In other words, there is a constant looking over the shoulder to find the potential critics, and inevitably inside the organisation there will be the building up of some kind of defensive organisation to meet any such potential charges or complaints. That is one of the major differences between our nationalised industries and those which remain in private hands and operate on a large scale.
There was great concern in the Labour movement, in the early days, about how these industries could be operated: "Are they to be placed under a Government Department like the Post Office, or are they to be operated through a public corporation?" Why was a public corporation
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suggested? First, because it could operate on broad commercial principles consistent with proper considerations of public service. I emphasise that latter point, and it cannot be absent from the considerations of any public Board.
I would quote something which is not in the least private, and which is known to everybody. In 1953 the Electricity Boards were asked by the Government of the day, under pressure from Parliament itself, to operate and widely spread their rural electrical services. It was known both to the Government and to everybody else that those services would be in the main uneconomic for a considerable period of years. The facts are patent. Whereas in the urban areas you may have 300 consumers to the mile, when it comes to the scattered rural areas you may have ten consumers and, consequently, it is utterly impossible to recover your capital costs except over a very long period of time.
This is not a peculiarity of this country. When I was in New Zealand and Australia four years ago, I found that the Governments of the day had provided for subsidies—some of them indirect in character—which enabled the boards to install services not costing a modest £250 or thereabouts as they do in this country for extreme cases, but £1,200 and as high as £2,000. That was carrying out a principle of public service, because the mere fact of people living far away from the main supply was no reason why they should be deprived of the amenities of our modern civilisation.
The next important thing in connection with the public corporation was that, in our innocence in the trade union movement, we thought that it would be able to maintain a considerable measure of independence from political influence. My experience over fifteen years is that there has been a steady encroachment on the independence of the Boards, almost from the beginning. It may be that that encroachment is natural in the circumstances of a publicly-owned industry, but none the less it does definitely impair the freedom of decision of those who have to manage and determine the policy of the nationalised industries.

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This Bill appears on the surface to give an increasing measure of commercial freedom. It has been described this afternoon and welcomed as regards the extent to which the Railways Board will be able to dispose of land or use its land to the best of its ability; and also as regards imposing charges, on which it has been so restricted in the past, except after long proceedings and after losses accruing in the process. But, really, when I come to examine carefully how much of this commercial freedom there will be left to the Boards, I am not at all satisfied that they will have any greater measure of freedom than they have had in the past.
The Bill concentrates on the economic aspects of the operation of the railways, and I say it undermines the political independence which the Boards now possess, in whatever restricted measure that may be. From an examination of this Bill, the conclusion cannot be escaped that it will render the Boards more susceptible to ministerial influence. The Minister is mentioned over one hundred times in the course of this Bill. He appoints practically everybody concerned; he will appoint the members of all the statutory Boards, the members of the Holding Company, the members of the Transport Advisory Council, the members of the Central Transport Consultative Committee, and the members of the area consultative committees.
I used to hear quite a lot when I was young about the maxim, "He who pays the piper calls the tune." Can we be absolutely certain that in the operation of these boards there will be found men of such independence of mind that they can stand up to the systematic and continued pressure of a Minister who, in turn, is reflecting the view of the Government of the day? Are we sure about that? I do not want to press the point by drawing on my own experiences, but I must say that there is a very serious potential danger in that respect.
There are no real provisions for coordination in this Bill. On the surface there appears to be, but in reality there are no provisions for co-ordination. Take, for example, the Nationalised Transport Advisory Council, which is referred to in Clause 55. This is the only body set up by the Bill, so far as I can recall, in relation to which the word "co-ordination" is mentioned, except in
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the instance to which the noble Lord, Lord Molson, has referred—in London Transport and the British Railways so far as London is concerned. This body has no executive authority at all. It can talk and it can talk, but it can talk only on those matters which are referred to it by the Minister. It has no initiative. Under its constitution, it is quite incapable of introducing any subject whatever, whether dealing with co-ordination or with any other aspect of the nationalised transport system.
Compare that with the consultative committees. The consultative committees have the power of introducing items on to the agenda; they have the power to consider any matter which they think they should consider; and, moreover, they have the power to make recommendations. But where in the course of this Bill is any power given to the Transport Advisory Council to make recommendations to the Minister? Where? I have not found it; and I am quite sure that the draftsmen and those engaged in the framing of this Bill have not left those factors out of account by accident. They most assuredly have been deliberately omitted from the powers of the Transport Advisory Council.
The function of the Council is first stated to be co-ordination. How in the name of common sense can people coordinate unless they are able to bring forward points for consultation and discussion when arriving at decisions on broad questions of policy with other sections of the transport industry? How can that be done? It is assumed to be done through the Minister, but even here there is no reference in the Bill to the boards being free to submit to the Minister, and through him, any question for discussion by the Council. There is not even a regular chairman of the Advisory Council. The Minister reserves to himself the decision whether he should be the chairman or not, and whether another chairman should be appointed. He has the power to do that; and he reserves—and I think, in this case, rightly—the power to take the chair on particular occasions.
I was impressed by the fact that on this body of all bodies—which, remember, has not only the duty of co-ordination but also the consideration of any other aspect of the nationalised transport

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undertakings—no one is to be drawn from the ranks of the workers; nobody. In every other section, in every other one of the statutory boards, provision is made for somebody who has displayed capacity in the organisation of workpeople. The language may not be exactly that, but unquestionably the sentiment is strictly accurate. This is surely a very singular omission. If coordination and other aspects of transport are to be concerned, is there no contribution that can be made by people experienced in the organisation of the workers? Is there no contribution at all? Is it to be made by a number of undefined persons who are to be brought in by the Minister at his wish? Why that omission? To my mind, it will invoke a great deal of suspicion in the ranks of labour.
This is the most curious co-ordinating committee I have ever come across. In another place the Minister gave a number of analogies in order to show that this system will work. I have never had any doubt that anything in the legislative sphere, however crazy, could be made to work by the British genius for improvisation. It will work all right; but what are we concerned with? We are concerned with the efficiency of this operation, not merely with the fact that it will work. The Minister gave two analogies to support his contentions in another place. He gave the analogy of the National Joint Advisory Council to the Ministry of Labour; and his second analogy was (the National Production Advisory Council on Industry. Anybody who knows anything about the constitution of those bodies—and I see the noble Lord, Lord McCorquodale of Newton, smiling at me; I hope it is in agreement—knows perfectly well that there is no real comparison between those bodies and their functions and the Transport Advisory Council which is proposed in this Bill.
In the first instance, whereas the Minister appoints everybody on the Advisory Council, the Minister of Labour appoints nobody on the Advisory Council that he has. They come there as representatives—remember, not appointees, but representatives—of their separate organisations; they come there completely independent of the Minister;
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and they come there able to introduce any matter on the agenda that they may feel disposed to introduce. And what I have said about the Ministry of Labour is exactly the same in the case of the National Production Advisory Council on Industry. Furthermore, they have no co-ordinating function of any kind. How could it be possible for a Ministry of Labour advisory committee or a National Production Advisory Council to co-ordinate British industry, with all its multifarious arrangements, and with small and big firms functioning side by side in quite different environments? Co-ordination would be out of the question in such a case.
I hope that what I have said will persuade the Government to consider the points I have raised in respect of the Advisory Council. I hope the Boards will be given power, through their chairmen, to raise any matter which may relate to co-ordination or other functions which are provided for the Council through the Minister. I want them to have the power direct to raise those things. I am quite certain in my own mind that a busy Minister, as this present Minister must be, cannot do the co-ordination. I think he is a man of very great initiative, and has a wonderful knack of introducing expedients. Some of them are not always best calculated to provide thoroughly and well for the job, but at all events they look well.
How can a busy Minister coming in whenever he can, when there are no Divisions in the House of Commons or no Cabinet meetings or when he is not receiving deputations and not doing all the sort of things which a Minister has to do, divorced from all that and ready to put it all on one side—how can a Minister be expected regularly and patiently, and perhaps over a number of hours, to consider the detailed problems of co-ordination of such matters which affect the industry? I do not think it is possible for any human being to do it. Personally, I should like to see two chairmen appointed whose regular function was to take the chair, and each of the separate Boards, including the Holding Company, having the right to raise matters direct on the Council itself.
I want to make just one submission in conclusion. I know there has been

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a good deal of pressure for this Bill and that, on the face of it, there seems to be an urgency which requires its being passed into law as soon as possible. But it occurred to me that there are certain other considerations, too. As we all know, negotiations are proceeding in regard to the Common Market. So far as I can see—and I am just talking as an ordinary member of the public, with no more information than is available to the ordinary man—there must be a co-ordinated transport policy in any kind of Common Market organisation. One transport system cannot be imposed upon all the others except by consent. I cannot for the life of me see how, when so far as I know five out of the six bodies forming the Common Market are now operating something in the way of a unified transport system, we can expect our transport system, just recently legislated for, to be imposed upon them. So far as I can see, it seems probable that, if this Bill is passed into law more hurriedly than I personally think desirable, we may have to make very material changes in the Bill as a consequence of what may eventuate if and when we decide to become members of the Common Market. I know that the usual compromise which takes place in these cases will probably be reached. But even a compromise means some departure from the views of any particular party. Therefore, I wonder whether it is good policy to press this Bill forward at the present time.
The surveys now being made on the railways by Dr. Beeching—I do not know him personally, but from what I hear he seems to be a very vigorous, energetic and capable man—will not be available till the autumn. The Common Market negotiations, in all probability, will not be concluded for several months. I would just leave in the mind of the Government the question whether it is wise to rush ahead with this measure, not leaving themselves some kind of loophole, some kind of avenue by which they can change their policy as represented in this Bill should that become necessary during the negotiations on the Common Market. That is all the contribution I have to make. I hope I have not put forward my remarks too dogmatically—I had no such intention—but
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I feel very deeply on the subject which is before the House.
6.34 p.m.
LORD POLWARTH: My Lords, like other noble Lords this afternoon the noble Lord who has just sat down has spoken from long experience of these many matters of organisation which form the main theme of this Bill. But, of course, the impact of this Bill is going to be a great deal wider than matters of organisation. In particular, great emphasis is laid in this Transport Bill on the need for the railways to make a greater endeavour to pay their way. The conflict between their previous obligations to provide a service and to pay their way is resolved: they are now to have a free hand; and that is going to mean, whether we like it or not, a drastic change in the pattern of the railway system as we know it to-day. And with the railways losing £150 million a year, I do not see how anyone could expect that pattern to remain unchanged for ever. From our own experience we all know of individual lines and services which have not a hope of coming within a mile of paying their way, and which cannot be justified on any social or other consideration. But we must be sure that we realise exactly what we are doing in passing this Bill, and what may be the consequences of this remit which the Government have already given Dr. Beeching in advance of the Bill's passage.
My Lords, I make no apology for speaking mainly of the position in Scotland, because it is much the same in other parts of the country which lie at a distance from London and the Midlands. Only last week in this House some of your Lordships were voicing the fear that, in the quite near future, very little of Wales will still boast of a railway service at all. I wonder whether those of your Lordships whose lives are centred around the south and the more populous part of the Midlands realise just how important a part transport plays in the life and economy of those who live further afield.
Some of your Lordships may have heard of the Report of the Toothill Committee on the Scottish economy. That Report, published some six months ago, brought out most forcefully that the

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areas of the country which show above-average economic growth and above-average employment figures are those within roughly a three-hour journey from London—a distance over which one can travel, do business, and return again in one day. That, my Lords, is no mere coincidence; it emphasises the vital importance of transport. The Report brought out, too, the importance to industry not merely of cheap transport, but of regular, easy and reliable communication, whether for people or for freight.
With this background, it is not surprising that we in Scotland are deeply concerned about the future of our railway system. On the one hand we have seen some very fine improvements: the Edinburgh to Glasgow diesel trains; the new electric suburban service in Glasgow; the fast guaranteed-delivery service for freight from Scotland to the South; and shortly to be introduced is the six-hour passenger service from Edinburgh to London. I think that at that speed travelling by this train will be a fairly exciting experience. On the other hand, the cuts in the services have begun. We have seen a large number of branches closed down and stopping trains withdrawn. Financially, each one of these closures has been justified; and, so far as we can judge, none of them has struck a serious blow economically, although undoubtedly they have caused a lot of personal inconvenience.
But what does perturb us is the prospect that we may be faced with a plan which proposes drastic rail outs in Scotland and does not allow time for thought and adjustment. Certainly there are some very disturbing rumours abroad, such as that we are to lose the Midland line from Scotland to the South, and that everything North of Perth—or even North of Edinburgh and Glasgow—may be closed. I must say, quite frankly, that we cannot accept the prospect of wholesale surgery on this vital portion of our economy without time to think and do something about it. What is more, it is not just a matter of months, but of years. It is just as unrealistic to plan sweeping changes in the railway system in a short space of time as it is to maintain that the system should remain unchanged forever. In passing, I noted that the noble Lord, Lord Shepherd,
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spoke of the indignities to which the London commuter is subjected in going to and from his work; and he demanded that commuters should be provided with an adequate and co-ordinated service. Indeed, I think that is written into the Bill. I can assure your Lordships that those of us who live in outlying areas will take a very poor view, as taxpayers, if we lose our railway services and are called upon to pay for the commuter services of those who live in more populous areas.
I suggest that the remedy lies, not with the transport service, but with industry and commerce in general, and indeed with the Government, who might give rather more lead in getting rid of this fetish that every important office operating in this country must needs be sited in central London. Some of your Lordships will have seen the correspondence about the housing of a large number of the staff of the Admiralty in the new building at Earls Court. One correspondent wished that it had been nearer to the sea. I do not care whether they are near to the sea or not, but one place I feel sure they should not be in is an expensive area of central London, where they are adding to the cost and to the traffic congestion. May I suggest that no Government or official agency have given a more striking lead? Your Lordships may also have seen that the Atomic Energy Commission have decided to move the administration of their pension scheme for Britain to Thurso, the most northerly town in the country. That example might well be followed, perhaps not quite so drastically, by other Government bodies.
I am sure that we all want to see the railways run efficiently and economically. Certainly I do. That will obviously be to their own benefit and to that of the country. But I submit that it is quite unreasonable to look on them like an ordinary industry and to treat them as something that can be shaped and accounted in isolation. It is around the railway system, whether we like it or not, that the greater part of our industrial and social life has grown up. The two are closely Interwoven and the national losses, both industrial and social, which would flow from a sudden contraction of the railway system would be far greater than any national savings

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achieved, even if it meant a balanced profit and loss account for the railways. The human body depends for life on its arteries and so does the body industrial.
In Scotland—and we are not alone in this respect—many of us are working together to try to expand and diversify our own industries and to attract new industries from outside, whether we are private bodies, individuals or agencies such as the Scottish Office, the Board of Trade and other Government Departments. It is a task in which I think our Southern neighbours should wish us well, if only because they want to see an end to the continuing proliferation of industry in already over-crowded areas and if they do not want their children to be living in a complete surburban and urban complex extending from the South Coast to the Mersey. But industry must know what communications are to be at its service and at the moment we just cannot tell an inquirer what railway services will be available in a few years' time; nor can the Scottish Area Board tall them. We can only say that we are waiting for Beeching.
Of course, the Government have told us that when Dr. Beeching has made his review and said what services he wants cut, the Government, after obtaining the advice of the consultative committee, will decide which services should be kept on social or other national grounds and will provide funds to do so. What concerns me is that by waiting until then, we may pass the point of no return. Dr. Beeching has a formidable task in trying to eliminate this deficit of £150 million a year. There is a real danger that he may be tempted to take the easy course—I think that I should if I were in his place—and say that for a start he will lop off every service North of Edinburgh and Glasgow and West of Exeter and Bristol, without seriously trying to see which of these services could be made to pay by streamlining, or at least be carried by the more profitable services. Then the Government might find themselves with such a bill on their plate that they would flinch at the cost of supporting what is really vital to the country.
I must say, in this connection, that I have been most disturbed by the Minister of Transport's attitude to the whole problem as exemplified in some of his public utterances. In a recent interview
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with a correspondent of the Scotsman, he is reported as saying:
"I think you have to make up your minds in Scotland whether you want railways, or roads. I am not really responsible for roads in Scotland. It's not for me to solve Scotland's transport problems."
He went on to say:
"You can either have a good rail service and no roads, or a good road service and no railways. I don't mind."
I have seldom heard such a bare-faced abrogation of responsibility. Of course, Mr. Marples is not technically responsible for roads in Scotland. That is the Secretary of State's department. But he knows just as well as we do that the kind of roads we get depends on how much money the Secretary of State can wring out of the Treasury, and, of course, in this he is in competition with Mr. Marples. If Mr. Marples was correctly reported, I think that that was a thoroughly irresponsible statement.
Of course, we all agree that in the long run many parts of Scotland, as of the rest of the country, would be served just as well, if not better, by road as by rail, and more economically; but, even so, we must have time to make the change. If the roads are to take the traffic from the railways, they must be greatly improved and improved a great deal faster than is happening at the present time. We must have more buses of a suitable kind, particularly for country areas, like those that your Lordships will have seen in overseas countries, which are able to carry light goods and freight as well as passengers. We must have bus and lorry traffic going much faster, because otherwise, even when the roads are improved, their speed will still be restricted to the snail's pace which our present roads impose—I was going to say to something not very much faster than the passage of a Transport Bill through your Lordships' House.
There must also be a greater degree of co-ordination and integration between railways and road services, as several noble Lords have said, with railway and bus stations adjoining or combined; facilities for through booking, not just for passengers, but also for through transport of freight; and also common cover for claims for damage or loss by the two systems. Even if we get down to this now, the Whole question will take not months, but years, as I have said, and so will the creation of new

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jobs for those displaced. Meanwhile, we cannot allow communities to be stripped of their livelihood and population and our industrial development to be checked, for the sake of a hasty balancing of the railways' books.
Finally, there is one matter of organisation on which I must say a word. Under the old Act, Scottish interests were safeguarded to some extent by the statutory appointment of Scottish representatives to the British Transport Commission, which, of course, was responsible not only for railways but also for the docks and inland waterways. Under this Bill, these safeguards are swept away. And I cannot say that I have been very convinced by the arguments given by the Government in another place. I can say from personal knowledge what an extremely valuable part those individual Scottish representatives play. One of them, as the noble Lord, Lord Citrine, reminded us, is a man with great experience of labour. I do ask the Government, even at this stage, to think again about this provision.
Nothing that I have said this afternoon lessens my conviction that a major reorganisation of the transport system is necessary; nor that much that is in the Bill is needed and desirable; but I do say, most emphatically, that if we are to be asked to choose between a road and a rail system over much of the country, it must be a real choice and a free one. We cannot accept a situation where a good railway service is removed and an indifferent road service left in its place. We cannot tolerate a speed of change-over which will injure our existing economy and damage the prospects of attracting new industry and leave communities without alternative work. So I urge the Government, in passing this Bill, to move with care. When the Beeching review is complete, take time to think before you act, otherwise you may strike a body blow at the economy, and it will hurt most in those places like Scotland which are least able to stand it.
6.50 p.m.
LORD STONHAM: My Lords, the House is greatly indebted to the noble Lord, Lord Polwarth, for a responsible, vigorous and very well-informed speech, which I am sure will greatly impress the Government. If I may say so with respect, it is the first speech that we have
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heard from the Benches opposite which shows what this Bill, if it goes through unamended, will mean to a large and important part of the United Kingdom. I thought the noble Lord's speech was in refreshing contrast to others to which I have listened from the Benches opposite, the general feeling of which appeared to be that it was to be warmly welcomed that British Railways should be run in accordance with commercial standards—profit-making standards—provided it was not allowed to go to the extreme that they should make a profit in any one department of the service. For example, the noble Lord, Lord Teynham, was enthusiastic that London Transport was going to be in competition, but did not see that the railways ought to be allowed to compete with coastal shipping.
The noble Lord, Lord Molson, with most of whose speech I agreed considerably, except the peroration (and that did not agree with the speech either) said he did not consider that if British Railways should sell any surplus land they should be allowed to sell it at the highest price. I do not say that I do not agree with the noble Lord; but if we are going to say that the railways must be run in accordance with commercial standards and we then proceed to shackle them at every point, not merely is it utter nonsense, but it means that they have not a single chance at all. If we are going to impose proper safeguards and shackles, if you like—I entirely agree with what the noble Lord, Lord Polwarth, said—then we must introduce other arrangements which are not in the Bill. I propose to make that the main point of my remarks.
I regret that, as I am the fourth speaker from this side of the House, I am perforce the fourth speaker to congratulate the noble Lord, Lord Chesham, on having achieved the near miracle in the space of less than half an hour of giving a fairly comprehensive and accurate account of this Bill and one which I think would have given any person who had not read it a fair idea of what is in it. The noble Lord may well feel that that is about the last thing I am going to say which will be acceptable to the Government.
I consider it quite scandalous that, although this Bill in its various stages occupied something like 40 Parliamentary days in another place, it has come

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to us without any clear or detailed statement from the Minister on the future size, shape or scope of the railways, or on the part that they will be expected to play in our national transport system. That was the point made by the noble Lord, Lord Polwarth. In fact, the absence of this information is just like a performance of Hamlet without the Prince, because (the proposals in the Bill for the financial and administrative reorganisation of the railways have no meaning at all until we know how the Government propose to ensure that the transport lanes of road, rail, air and water, are to be used to carry the traffic they are best fitted to handle.
Unfortunately, in my view, through the lack of co-ordinated transport policy, the Government, by condemning the railways to death by a thousand cuts, are thereby also condemning the roads to death by choking. Last Easter Monday the newspapers recorded the presence of 6 million out of our 8 million private cars on the road. Although there were very few lorries, there were, according to the A.A., 150 miles of queues all over the country, some as much as 18 miles long. Even at night there were queues 6 miles long, and some places had a traffic crawl which they had never once experienced before. We are told that ten years from now the present number of cars licensed to use the roads will be doubled—I say "licensed" because they will never use them unless the Government produce what has been called for several times in this debate, a comprehensive, integrated transport policy, and stop encouraging the diversion of traffic from the railways.
Already it seems that the Minister in this regard is reduced to helpless exhortation. He appeals to motorists, "Use your car only if you must." Very soon his appeal to car owners will be: "Do not drive it; polish it." He said only yesterday that Mr. Marples's heart bleeds for the motorist. His bleeding heart is entitled to whatever consideration it merits, but it moves me very much less than the tragic fact that each year nearly 100,000 people are killed or injured on the roads. Compare that with the 100 people who are either killed or severely injured on the railways. That margin of 1,000 to 1 is a factor which
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has not yet been mentioned in this debate but which I submit is one which cannot, and indeed must not, be ignored, because I think the disparity in those two figures would be greater, and there will in fact be more blood on the roads, if the plans we are now discussing come to fruition.
Last month—and I know we must all of us speak in ignorance of these matters—after talking with Dr. Beeching, Mr. Greene, the General Secretary of the National Union of Railwaymen, told the Scottish T.U.C. that at least one-third of our railway system was likely to disappear. A week or two ago an article in the Observer declared that by 1970 we should have half our present railway mileage and twice as many vehicles on the road. The article might have added that the one partly arises out of the other. Some of the cuts in rail services, I think, are just and sensible by any standards: for example, the closure of little-used branch lines where there is a satisfactory alternative system of transport. The noble Lord, Lord Polwarth, suggested that it is no good to lose a good railway service and have an indifferent bus service in its place. But for all we know, there are many places which are going to lose their railway service—indeed, they have already lost it—and have no alternative bus services at all, which is far worse.
I think also that the elimination of second main line railways systems between large towns is something which is quite justified. In fact, it merely puts right the errors which have arisen through the unplanned growth of the railway system. But it is intolerable that the Government should permit the removal of rail passenger and freight services from large areas of the country where there is no reasonable alternative transport. In September, 1959, the Jack Committee was appointed to consider rural bus services, and they reported last year. We have had absolutely no statement from the Government of their intentions on that Report, or what they intend to do about it. I think it is impossible to consider these present proposals in anything like an atmosphere of reality unless we know what part of the railway system is going, and what is going to take its place.
It is also impossible for other kinds of planning to be carried out. The

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Times recently had correspondence on this matter and it dealt with the suggestion that new towns might be sited along the railways, but one correspondent pointed out the unfortunate fact that
"communities which have been developed in the past on the assumption of rail services are now being left in the lurch. Along the branch lines, which now, by process of commercial mathematics, are said to be uneconomic, towns have grown up, developments undertaken, and business and other installations have been sited, all on the basis of facilities which the railway authorities are proposing to withdraw. Planned progress, whether by individuals or public bodies, can take place only if there is reasonable security that the essential public services will be maintained."
I should have thought that was unanswerable. This continued delay in making an announcement is holding up all sorts of things.
My Lords, I do not like to say it, but I think it is for all these reasons that we are getting information by dribs and drabs, because I believe that if the whole plan were published at once, the Government would not be able to get away with it; it would prove socially intolerable. The pressure of the people which would result from these proposals could not be withstood. As it is, there are rumours not merely of rural areas, including a great part of Scotland, as mentioned by the noble Lord, Lord Polwarth, which will lose their services, but fair-sized industrial towns. Lincoln and Mansfield are two which are given as examples. I think we should insist on knowing what is going to happen, because if large towns or large areas are to lose their railways but retain their Members of Parliament, the citizens ought to be given a chance at least of saying which they could best do without.
The cuts in rail services must also have an important bearing on the development of road building and the road improvement programme, because if an area is to lose its railway it should be given priority in the provision of new and improved roads to link up with the surviving rail sectors. I should have thought that that was absolutely common sense. Mr. Marples was insisting yesterday on priority for roads which are used for 365 days in the year. That sounds all right, but in practice it
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really means that present major road developments are designed to give road hauliers a better chance of competing with those main lines which are likely to continue. What sort of business management is it when the same firm—that is, the Government—electrifies a railway line and then builds a motorway alongside competing with it? Because that is precisely what is happening and precisely what the proposals now are.
I think that unhappy, almost tragic, situation arises because Ministers opposite can see road and rail only as competing and not as complementary; as private against public enterprise, with the dice apparently always loaded in favour of the profit maker; and also because so far the Minister has been determined to ignore the fact that the railways are essential to our social and economic structure, and he appears to abandon any pretence that they are a public service. So Dr. Beeching has been told that he must make a profit. Of course, if, on purely commercial lines, Dr. Beeching eliminates everything Which does not or cannot be made to show a profit, he can, and will, carry out his remit, and it will not be his fault if the price of that profit is hardship and discomfort to millions of people, an increase of deaths and accidents on the road, and thousands of millions of taxpayers' money used somehow to keep traffic moving on the evermore congested roads.
I do not think a fair and objective decision on the future transport system can be made until the Government accept separate financial responsibility for the social burdens which are at present loaded on to some publicly-owned undertakings. This point has cropped up already in several of the speeches, and we are getting the same problem in more than one industry. In coal, for example, my noble friend Lord Robens has pledged himself to make the coal industry pay without increasing the general level of coal prices, but he made it clear that he could not do this if he continued to carry the heavy losses of some of the coalfields; for example, the £19 million loss on the Scottish coalfields. In his own words:
"The Coal Board cannot be used to solve the economic problems of Scotland. If the Government want them continued they must pay for it."

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That is exactly Dr. Beeching's position. He will soon, in the autumn it is said, at least I hope, be able to say what part of the rail system and what type of freight and passenger traffic he can expect to run profitably, and, in consequence, what traffic he will force on to the roads unless the Government say other arrangements are to be made. But if, for social or strategic reasons, as I think must be the case, it is decided that certain non-profitable, uneconomic services must continue, surely the Treasury must say that they are going to bear the burden of the losses. If the Ministers were willing to do so for private industry, it would be unthinkable to refuse equal facilities for industry which is under public ownership.
I think that, above all, we must begin to look at the transport industry as a whole, and to introduce some equality into costs and prices. At present the railways pay for the cost of owning, building and maintaining their tracks. They pay for accidents, policing and signalling, and I submit that road-users are able to compete unfairly because they do not bear anything like the total cost of the services they use or give rise to. We are now spending about £200 million a year on roads; the estimated annual cost of road congestion, the costs that the road-users give rise to, was £639 million at the last count; and the annual cost of road accidents is £230 million. That is a total of some £1,069 million. If we add, as the railways must, interest on freeholds, rates, cost of policing and signalling systems, the total cost of using the roads would amount to about £1,500 million a year, against which road-users pay some £750 million a year in taxes.
So it amounts to this: that the taxpayer is paying half the costs of road users, thus helping to put railways out of business so that he can have the privilege of paying for the vast increase in the number of roads we need to carry the traffic that is so foolishly diverted from the railways. That is a real and, I think, fair summary of what is happening. That may make sense to the Government, but to my mind it is about as "cook-eyed" as anything can be.
Noble Lords have all, I expect—at least I have—received this week an excellently
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produced booklet from the Road Campaign Council called, Divide and Survive—meaning that we must divide pedestrians from the vehicles. This booklet, I suggest, presents an unanswerable case for urban motorways and an overall road plan. Right as that case is, we must also have a properly integrated transport system, with each part doing the job it does best. We shall never get it until we not only build the planned road network that we need but also end the distortion caused by the gigantic, gross and unjustified subsidy to road users. When we have done that, the various forms of transport can be judged on an economic basis. Noble Lords are constantly saying that the railways are subsidised, will always have to be subsidised, will never pay. But the point is that the subsidies they have enjoyed and are enjoying are only about one-fifth of the indirect subsidies which go to the road users. I say it is only when the various forms of transport can be judged on an economic basis that we can have a true picture, and if we get to that point we shall then find there are far fewer uneconomic rail services.
But until we get to that point, and particularly with this Bill, as my noble friend Lord Citrine said, I think we are wasting our time. I have no doubt we shall waste a lot more time during the next three months going through the 94 clauses and eleven Schedules of this Bill. As my noble friend Lord Shepherd said, we shall examine it carefully and have no intention of being obstructive. But I think it would be a fair assumption that, at the end of the day, however hard we work at it, we shall not have a Bill which adds anything at all to our transport system. I am afraid we shall have an instrument which will destroy an important part of it. I am very sorry to give it as my opinion that the country's main hope is that before that happens we shall have a chance to destroy the Government who propose to create that instrument.
7.13 p.m.
LORD FRASER OF LONSDALE: My Lords, I also should like to express my appreciation of the speech of the noble Lord who moved this Bill and of the noble Lord, Lord Shepherd, who commented upon it. I Should also think,

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after listening to many excellent speeches from both sides of the House, that it has been to a large extent a non-Party debate, except perhaps for some of the eloquent periods of the last noble Lord. If there is a difference between the two sides of the House, I believe it is that those of us on this side of the House think it is a good thing to aim at making national services pay, whereas noble Lords opposite do not worry quite so much about that; they have their good reasons, as they see it, for thinking that what they call public service is more important than taxes, without perhaps realising that the two things really go together, because unless you safeguard the taxes you cannot provide so many public services in general for all your people.
I thought the last speaker was really very pessimistic. "We are going to waste a lot of time", he said, "and we shall not have anything worth bothering with at the end of it". I do not think that is fair. I believe that the Ministry of Transport and the Government, whether this Government or another Government, probably have access to the best information and the best advice which can be obtained in the country, and it is not very likely that independent critics outside the Government, without the advantages of Government advice and Civil Service help, are going to be right. I think it is far better to be optimistic about this matter and to hope that the proposals now put before us, after so much anxiety, which we have all shared, in regard to transport, may prove valuable, and that our work may be worth while.
It is obvious that a good many branch lines are going to close down. I was a Member of Parliament in a widespread rural district in the Lake District for many years, and under Lord Robertson's jurisdiction of the railways I had to meet and consider the pros and cons of two or three of those proposals. Anyone who has had to meet constituents in this matter will have quite a different experience from noble Lords who have never met constituents. Constituents get very cross indeed when anything to which they have been accustomed is going to be taken away from them. But I think—at any rate it is my experience
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and it may be that of other ex-Members of Parliament—that after a time, provided the thing is done with grace, discussion and care and provided that reasonable road alternatives are provided, the branch lines that are falling into desuetude can be closed down; and although at the time when they are closed down they cause great heartburning and some hardship to a few people, within a reasonably short time the event becomes a matter of history rather than hard feeling. That is, at any rate, my experience.
I can remember what great trouble General Robertson took to meet Members of Parliament and to persuade us in general and to cajole us in particular to help him with this difficult problem. I think it is up to all of us to try to help Dr. Beeching in a similar way. I know it will cause some considerable hardship to a few people. I do not think in general it will cause great hardship for a prolonged time to many people, and I am sure the Minister and the railways will try to ameliorate the situation and make road services a better alternative than at present, or rather a better substitute than one might imagine. I have seen that happen in the district round Coniston and places of that sort.
I wonder whether, if lines are to be closed, we could not go even a little further than the noble Lord behind me went in asking for better road transport; and whether we cannot go just a little further and see that the Post Office service and the local carrier for both freight and passengers are combined. Whether they are combined under the Post Office with an official vehicle or whether they are combined in a vehicle owned by a private person is to me quite immaterial; whatever is the better for that particular situation I would support. It may be this is being done in some parts of Caithness and Sutherland; I am not quite sure; I cannot remember, but I seem to think that something like it is being done in parts of Caithness. Certainly it is done in Sweden and many other countries with large unpopulated areas.
It is obvious that if you combine the Post Office service, the contract for the mails, with the carrying of passengers and the carrying of freight in one vehicle then you can provide the turnover which makes it possible for that vehicle to survive

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and make a profit; whereas if you insist that the mails must go in one vehicle and all kinds of restrictions must apply to the carriage of goods and passengers in other vehicles, you are compelling two vehicles, or possibly even three, to do the work of one. I ask that this point should be considered, and if legislation is required I cannot but think that Parliament would be very sympathetic to aiding it. Let us combine the carrier with the mail contract and see whether that does not help us in remote districts to make a paying entity.
If it is objected that there is a principle involved, I would remind Her Majesty's Government that the Post Office does not own all the vehicles that it uses. It may not own the vehicles it uses on the road; it does not own the ships or trains or aeroplanes that it uses. Why need it own a mail van? Why should it not be owned by a bright, cheerful, pleasant personality who can make a living if he has all the jobs to do, but cannot make a living if he has only half of them to do? 1 may also observe that there would be quite a gain to the nation if the vehicles were attractively run, because they would bring tourists to the Highlands and to the remoter parts of Lancashire, and they would bring dollars and currency from overseas.
The only other subject that I want to talk about for just a few minutes is coastal shipping. I declare that I have no interest in this matter, beyond the public interest; I am not concerned with it in any way, but I have given it a little study. Any noble Lord who has studied this matter at all must remember that road, rail and coastal shipping have had a traditional way of life for perhaps forty years, whereby they have had conferences and discussions and have to a large extent worked together, especially rail and coastal shipping; and the railways have always been handicapped by the history of monopoly which they were supposed to have in Victorian times, and from which now we are tending to free them. This particular act of freeing the railways from the controls which we thought necessary when they were monopolistic, when there were no rivals, could perhaps in this instance lead to a national loss. It is that to which I wish to call attention.
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Noble Lords will be aware that the railways can compete with coastal shipping on a long haul by quoting a low rate that would attract the freight over a long distance. It can also compete with coastal shipping by quoting a high rate for a short haul from a coal mine to a port, or from a factory to a port, thereby making it uneconomic for the goods to go by ship. That the railways do this from time to time I do not think there is the slightest doubt; there is a good deal of evidence that they do. I do not particularly blame them; it is only natural that the managers should work the rules as best they can to the advantage of their service. Let us remember that they are not doing it for their own advantage, but for that of the services which they work for so loyally. The question is, how far ought we to allow this aid which we are giving to the railways in this measure to go? I am suggesting a limitation on it. We should not let it go so far that it tends to put out of business our coastal shipping business. That it is getting near to that point is what I venture to submit to noble Lords.
The coastal shipping business is falling away. I am told that the total number of ships in the small-ship fleet, or, if you like, the total number of tons afloat in that fleet, has gone down by one-third, between 28 per cent. and 36 per cent. in the last ten years. I am told that the building of small ships in Britain has gone down by 80 per cent. in the last three years, by comparison with the average of the previous nine years, and that the employment available for masters, officers and men has gone down by one-third. It does not follow that there is unemployment, for various reasons which are irrelevant to my argument; but one-third of the masters, officers and men of our small shipping fleet are no longer sailing the seas: they have found jobs ashore. This is a great loss to Britain, not only traditionally, but also in relation to her needs. In peace time we need these small ships from time to time. Not many years ago we should have frozen in London had we not been able to call in the small ships from all over Britain to bring us coal. Noble Lords are familiar with the events that took place in various theatres of war, including Italy, Normandy, Dunkirk, and Norway,

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where operations could not have been mounted without these little ships and their splendid crews.
The gist of the matter is contained in Clause 53. One has to agree, as the noble Lord who introduced the Bill reminded us, that as the result of discussions, and of Amendments moved in another place, the Minister of Transport has made some concessions in the old Clause 54 (now Clause 53 in this Bill) which go some way towards meeting the wishes of the coastal shipping people. As I understand it, the Minister has agreed that when they quote on a long haul or a short haul the railways should be compelled to count the cost of the operation in their quotation. The question is; what is the cost? Is it just the cost of the service that is called for by the freight, the cost of fuel and manpower; or is it the cost of running, plus a fair share of the overhead costs? No one can be quite sure about that. The Minister says that he intends it to be a fair cost. But what is a "fair cost"? So the argument goes on.
Finally, the Minister says that while he is Minister he will himself employ an independent accountant to judge between the parties in a complaint, and he will take account of the accountant's advice. That is all right so long as he is Minister. He is obliged to do it then. But what happens when he ceases to be Minister? What assurances then have the coastal shipping people in regard to a different Minister—one with a different philosophy; one who does not mind about profits, who does not think they are of any importance, or, at least, thinks them of no social importance; a Minister who takes what I call the short and slick view that you can run this world, or at any rate this land, without profits? I do not think you can. But he may think he can; and he may say: "Never mind what the railways quote. Let them get the business, and let the private enterprise so-and-so's go out of business. Who cares!"
But, my Lords, there is a national interest involved. It is not just a case of penalising some persons who happen to own ships. It is a national interest, as I have shown, in both peace and war. Who knows but that some future Minister may not do away with Mr. Marples's
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undertaking to employ an accountant? Cannot we write this accountant into the Bill? I ask the Government to consider that. Moreover, the accountant is going to look at it after the event. By then it may be too late; the business has been lost and probably cannot be reclaimed. Either the Bill should provide for the appointment of the accountant, or it should give power to employ him or include a requirement that he be employed. In this way, complaint as to rate-cutting could be made at an early stage, and not merely after the event. I think that both those points might well be the subject of an Amendment, and I would ask the Government whether they would not consider them in the Committee stage.
However, I do not take the gloomy view about this Bill which was taken by the last noble Lord who spoke. I think it is a good effort on the part of the Minister to try to serve the country well, with all his advisers and all his experience, and I wish the measure good luck.
7.30 p.m.
THE EARL OF LUCAN: My Lords, I cannot agree with the last part of the speech made by the noble Lord who has just sat down, because this Bill seems to me to be, as has been said before, the last stage in the operation of demolishing the conception of transport looked at on a national basis. So I cannot say that I think the Bill, as a whole, is anything else but one based on, to use the old word, a doctrinaire approach, a flying in the face of expert opinion in practically all countries of the world.
However, I am glad to be able to say that when the noble Lord was talking about coastal shipping I was wholeheartedly with him. I think it is a very sad thing that in a seafaring country such as ours we are making less and less use of the sea around our coasts, that free track on which vessels can travel to so many ports. And although the noble Lord talked about competition from the railways—and I would add that competition from the roads has been at least as formidable an enemy of coastal shipping as the railways—I wonder whether the coastal shipping interests are, in fact, doing all they can to maintain their trade. My noble friend Lord Shepherd quoted the case of rates by

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coastal shipping which were much higher than those of road or rail, and I notice that when one goes to the little ports around our coast one can nearly always see motor ships there flying a foreign flag. I wonder how it is that the Dutch, the West Germans, the Belgians, the French, and all the rest, can manage to run their short-sea and coastwise shipping whereas our shipowners cannot. That is a thing which I frankly do not understand; but it seems to me that if our Continental neighbours can do it, we also ought to do it.
Before I get on to what I mainly want to talk about, which is the inland waterways, there is a point on Clause 13 on which some of my friends would like some clarification. Clause 13 (5) prohibits the Boards from manufacturing road vehicles, bodies or chassis or major components. So far as the railways go they have a period of grace of three years before this prohibition comes into force. But no other Board has that period of grace, and I wonder whether that means that the London Board will have to close down immediately any of its activities of manufacturing vehicles for its own use. I think we should like an assurance on that point. Then there is Clause 12, which deals with pipe-lines. I realise that your Lordships will be tired of the word "pipe-lines", since the last few weeks when we have had the Pipelines Bill before us. This clause, so far as I can see, gives the Boards power to construct and operate pipe-lines provided that they are only on their own land and only for the purposes of their own business. But the business of a Transport Board is transport, and I do not see why they should not have the power to construct, on their own land if necessary, pipe-lines to carry other people's products, as well as their own.
LORD CHESHAM: They have.
THE EARL OF LUCAN: The noble Lord assures me that that is so.
Now, my Lords:, I come to the Inland Waterways Authority. It is a subject on which strong views are held by a number of people—an increasing number of people, I think, as more and more people travel about the country and have the leisure to take holidays and to use these waterways for recrea-
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tion.The proposal in the Bill that one of the new Boards should be solely responsible for the waterways is, given the break-up of the Transport Commission and the abandonment of any attempt at co-ordination of transport, the logical step. I think it is probably sound that the Minister has decided to change the name of this authority and call it the British Waterways Board, because the initials I.W.A. have come to be associated with the very active body, the private unofficial body of the Inland Waterways Association.
So here we have the British Waterways Board. In what way it will differ from the present organisation I am not very clear. The composition of the Board is laid down. I hope that the Minister will find persons to serve upon that Board representing a very wide range of opinion and experience in that field. I hope that the Board will take a thoroughly objective and balanced view, bearing in mind that commercial transport is still a considerable element in the surviving waterways. I think it should be mentioned that certain bodies have already laid claim to places on that Board. The Inland Waterways Association, in a document published when the Bill came out, put forward a claim which I think for sheer effrontery is hard to beat. Having talked about the many "far-sighted and comparatively youthful experts" which the Association has to offer, they say:
"If several at least of them are not on the new Board the only conclusion possible to serious students of the subject will be that the Government is not taking the waterways seriously."
A statement like that from an unofficial body of people is really almost unheard of.
My Lords, what is going to be the function of this new Board? In Clause 10 the Bill lays it down that they are to provide, to such extent as they may think expedient, services and facilities on their inland waterways and port facilities at any of their harbours. That is slightly different and slightly wider than the powers of the Commission under the 1953 Act, which said:
"To provide in such places and to such extent as may appear to the Commission to be expedient facilities for traffic on inland waterways."
Now they may provide services and

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facilities, which means, I hope, that they will he able to go on acting as carriers as well as maintaining the waterways for other people to use and providing the facilities.
I should think that the canals of this country have been the subject of more inquiries than any other section of industry. There have been major inquiries in 1906, 1921, 1930, two separate, unpublished ones during the war, then the Commission's own Board of Survey in 1955, and the Bowes Committee in 1958. No Minister can say that he lacks knowledge and advice on the subject. The interesting thing is that I think every one of those inquiries has come to roughly the same conclusion: that some 350 to 400 miles of those canals are of commercial use in the present day. The remainder, some 1,300 to 1,500 miles, are doubtfully useful or of no use at all. They all recommended that the efforts of the Commission should be concentrated on what have come to be called the Group I canals, which are all wide canals or rivers. That, of course, is no coincidence, because it is agreed by all experts that any vehicle or vessel under 100 tons capacity does not stand a chance, with road and rail competition, of being economically useful. On the narrow canals in this country the maximum load of a pair of boats is 50 tons, whereas the big waterway users on the Continent use nothing less than about 1,500 tons, and they may go up to much more.
I do not think it is denied by anybody with experience of transport on inland waterways, that for commercial transport the only useful part of our canal system is the 350 miles of broad waterways. After all, these thousands of miles of canals that ware built in the 18th and early 19th centuries were built for a totally different world from that in which we now live. They do not go to the right places. They do not serve the right industries, the right ports. So we are left with 1,500 miles or so of canals which cost money—they cost money whatever happens to them—and the problem that has been with us all these years is how to make the best use of them in the interests of us all.
The Bowes Committee went into the subject very carefully and thoroughly, and recommended what is called "redevelopment".
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I should say that there is nothing new about that, because disposing of the unwanted canals has been a preoccupation of the British Transport Commission ever since 1950. All their attempts to find other bodies or authorities to take them over and make use of them for the general public good have been abortive. In 1959 or 1960 the Government set up a Committee under Admiral Parham called the Redevelopment Advisory Committee, but I am no: sure that even they have succeeded in actually getting any of these canals put to other uses, such as recreation, amenity, angling, or for water supply and all the other uses to which they can be put.
I see that the 1960 Report of the British Transport Commission said that during that year practically all remaining cases for the redevelopment of the Class C waterways were submitted to the Redevelopment Advisory Committee. But what has happened since? There has been a strange silence in the Press and elsewhere, and with very few exceptions we do not know what is happening to them. It has been suggested that river boards, local authorities, local planning authorities and the rest are the authorities who might make the best use of them, but I wonder Whether the Minister can say what, in fact, has come out of the two or more years of work of the Parham Committee. One exception that we were all very glad to read about was that the National Trust has taken over part of the Stratford-on-Avon Canal, the southern end, and we hope that is now secure in the hands of the National Trust.
But, my Lords, until those waterways are actually taken off the backs of the Transport Commission or the Waterways Board, they will have to be maintained, they will have to be paid for. They caused a dead loss of over £500,000 in the year 1960, which far more than offset the surplus made on the Group I canals. So that is presumably Why the Minister has faced reality and decided to make good annual deficits on the waterways for, at any rate, the first five years.
LORD SOMERS: My Lords, might I just interrupt the noble Earl for one moment, to ask him whether he thinks it possible that they might be made use of as ready-made trenches for large-scale underground pipe-lines?
THE EARL OF LUCAN: If they go to the right places; but I think it would be found that very few of them in fact serve the places where pipe-lines would need to be laid. There is the exception of the Thames—Mersey route, which was the subject of a suggested pipe-line not long ago.
My Lords, under Clause 23 these grants to cover deficits are provided for in respect of the first five years after vesting date. In addition, I think, under Clause 20 loans can also be made; but, as I read it, the total of grants and loans must not exceed £10 million. I wonder how much thought has gone into the fixing of this period of five years? The Minister, when he fixed that time, must have had in mind that, in the course of five years, this net deficit of half a million pounds now being made by the waterways will be turned into a surplus; or that revenue will, in the course of that short time, be so expanded that there will no longer be a deficit. But the total revenue is, I think, about £3 million a year, and such an enormous increase as would be necessary on that figure seems to me to be quite unrealistic. Where is it coming from?
The Bowes Committee said that a lot more revenue could be raised from the sale of water, but I am told that the cream has been taken off that source of revenue already. In the last few years the water sales have gone up a great deal, and it seems unlikely that any very large sum will be forthcoming from that source. As to commercial traffic, though the 1960 figures, I was glad to see, were a good deal better than the 1959 ones in respect of traffic and revenue from traffic, even so, it is hard to see any expansion of traffic on the water sufficient to make a significant increase in the revenue.
Then there are other sources, such as angling rents. That, again, might bring in a little. Pleasure boating brings in a certain amount; but the Bowes Committee were quite satisfied that those sources could not produce anything of any significance. After all, we know that the revenue from the River Thames, which has an enormous amount of pleasure traffic, is a very minor part of the Thames Conservancy's revenues. As to the disposal of the unused canals under the redevelopment scheme, I do not see that that is going to bring in any money.
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On the contrary, it is more likely that nobody will be willing to take over one of these canals unless the transfer is sweetened by a considerable sum of money paid over from the Commission or the Board. So, all in all, I suggest that that period of five years is going to be quite inadequate.
My Lords, a word ought to be said about the staff employed on the waterways. It has not been said, as far as I know, how many of the existing personnel managing the waterways will be taken on to serve under the new Board. I think this is an important matter. There are at stake the careers of a large number of able and devoted people in all ranks and at all levels, down to the lengthman and the lock-keeper and up to the general manager and his staff in London. I think—and many people would agree with me—that the job done by Sir Reginald Kerr over the last few years has been beyond praise. Energy, imagination and inspiration have been provided by him and I think have revolutionised the morale of the whole service, from top to bottom. It is not often that anything is said in praise of them. In fact, some quite unpardonable attacks have been made on the management of the waterways. On the contrary, I think the country owes a great deal to Sir Reginald Kerr and his staff, and I hope that the Government will see to it that their careers are not prejudiced and that their services are recognised.
All in all, my Lords, it seems to me that, so far as the waterways go, this Bill does not really make very much change. There will still be the canals and they will still need maintenance done: pile-driving, dredging, repairs to locks, modernisation—all this will have to go on. It has been going on at an accelerating rate in the last few years. Last year 35 miles were steel-piled for bank protection, which was an increase of 40 per cent. over the previous year and an increase of 400 per cent. over 1954. That is what the Commission have been doing; and the work will have to go on, whoever does it. What we hope is that the new Board will see all sides of the problem, will be successful in finding authorities to take over the canals no longer required for transport and will see that they are put to the best use in the interests of the whole

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community. That is what we may hope for from this Bill.
7.59 p.m.
LORD MERRIVALE: My Lords, the noble Lord who has just resumed his seat has spoken at length and with knowledge on our inland waterways; and I would agree with him in so far as he considers that the only canals or inland waterways worth development by the British Waterways Authority are those of sufficient width or breadth to be in keeping with the practice on the Continent. Before I come to my remarks on the Bill, I should like to apologise to my noble friend Lord Mills if I cannot be in my seat when he replies to the debate, for I have a previous engagement.
I would generally support the proposals of the Government for reorganising the nationalised transport undertakings, but there are one or two points in the Bill which cause me some concern. I welcome, however, the setting up of the four statutory Boards, each with its specific duties in its own sphere. Concerning the British Railways Board and its Regional Railway Boards, I feel that they will have a very challenging task before them. For instance, the duplication of services for the same destination by different routes will certainly require looking into. On the one hand—shall I say, on the credit side?—timetables seem to be very comprehensive in this country compared with timetables in Continental countries, and also the time-keeping of our train services would appear to be definitely improving.
However, on the other hand, there are still far too many dirty stations, and that is a point on which I feel very strongly indeed. There is also far too much old and badly maintained rolling stock. I certainly feel very strongly that, if the question of maintenance and upkeep is not looked into very decisively by the Railways Board and the Regional Boards, the new rolling stock which is already in service will deteriorate very quickly. With regard to the point which I have just mentioned, it seems to me that cleanliness is a decaying word in the context of a railways operation.
I also welcome the provision in the Bill that the Railways Board is to be given power to provide hotels in places
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where railway passengers may need them. I presume and hope that any new hotels which would be set up would be transferred to, and managed by, the subsidiary hotel company. That does not seem very clear to me. I understand that the subsidiary company would take over existing hotels, but I am a little doubtful whether they would take over and operate new hotels. I say that because I feel that the Railways Board should be able to concentrate on its task of operating railways.
This brings me to the question of the Railways Board road services. On the ground that the railways must pay their way, there will unfortunately, but no doubt in some cases necessarily, be more closures of lines and discontinuance of passenger services. I would mention here that I welcome such safeguards as have been incorporated in the Bill, which will either limit or delay such closures or discontinuance of services. When the Minister comes to consider such proposals for discontinuance of services or closure of lines, I sincerely hope that he will give very careful consideration to the question of not unduly adding to the congestion of our roads.
I understand that there is to be a cut of up to 20 per cent. in the total mileage of railway lines. In view of the recommendations and the conclusions of the 1961 Jack Committee Report, which Report has already been referred to during the course of the debate, I should like to ask Her Majesty's Government whether it would not be possible at a later stage, after consultation with the Railways Board, to produce a White Paper which would list the lines which it is proposed should be closed down. I know that there are the provisions contained in Clause 54; but it seems to me that those provisions are purely for the guidance of the general public and that any information which would be forthcoming under powers provided in that clause would be given from time to time and nobody would know exactly what length of lines it is proposed to close down in the various Regions.
As the Jack Committee Report definitely states that some rural bus services must be regarded as inadequate, I feel that under this Bill there is a possibility that, with the consent of the Minister, the railways may themselves consider running bus services. That, I

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feel, may lead to diminishing co-ordination between bus companies and the Railways Board. Up till now, bus companies have run the bus services with the railways taking an equal share interest in the undertakings. The share interest is now to be transferred to the Holding Company, which is going to make operation and control very remote indeed. I also feel—and I say this with respect—that the Minister should bear in mind the words contained in the editorial of the Railway Gazette, a railway magazine, of March 23, 1962, under the heading "Rail-Road Disorganisation", and I should like to quote a few words from that editorial:
"The railway arrangements with the bus companies stem back over 30 years and have proved of equal value to the road interests, the railways, and not least to the public. Coordination has been effected very successfully at a high level".
And further on it goes on to say:
"The destroying of the financial partnership between the bus companies and the railways is likely to have the usual repercussions of destroying working to a mutual end, which has been so important in the past."
I should now like to pass on to a provision in Clause 69 of the Bill, which enables the new Boards to employ separate police forces. This question was touched on by the noble Lord, Lord Shepherd, and the noble Lord, Lord Teynham; but, with your Lordships' permission, I should like to be allowed to develop it a little further because I feel very strongly on this matter. I would stress that on the passing of the Railways Act, 1921, the many railway police forces which had existed up to then were merged into four forces; and later, following the transfer of the London Underground railways in 1933 to the London Passenger Transport Board, their small forces were merged into one force.
Then the Transport: Act, 1947, made provision for the creation of a unified force for the whole of the British Transport Commission's undertaking, while Section 53 of the British Transport Commission Act, 1949, made it possible to complete the process of unification. In 1951, the docks and waterways police came under the control of the Railways Executive, and in 1956 the Commission asked Sir Alexander Maxwell to hold an inquiry into the Commission's police force. Recommendation 7 was
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that the London Transport police should be merged with the main body of the force, and this was achieved in December of that year.
The process of unification, therefore, has been a developing and continudng one. I would add that the decision taken in 1949 to weld the various police forces into a single force was viewed by the members of the Maxwell Committee as being a sound policy. I feel that such a unified force, under an executive head, could be managed by a committee consisting of representatives from the four new Boards. In this way all these years towards unification will not be lost, and the Government will be able to maintain the high standard of efficiency which characterises the present British Transport Commission police force. They will also avoid any despondency in the force, due to uncertainty with regard to the future, any lack of co-ordination between the forces and any difficulties which might arise concerning promotion. Finally, the question of recruitment, which is at present a difficult one and is giving concern to the chief constable (fox whom I have a high regard; I have known him for many years) and members of his staff, will only be aggravated if the Boards have separate police forces. Apart from those comments, I support the Bill.
8.15 p.m.
LORD MILVERTON: My Lords, I should like to begin by offering my congratulations to the Government on this Bill, with whose main provisions I entirely agree. I would especially congratulate them on the superlative introduction by the noble Lord, Lord Chesham, which succeeded in making the purpose and purport of the Bill intelligible even to me. At this late hour, I do not propose to go into any details; I shall deal with only one or two points which I think have not yet been touched upon. It is a pity that I shall deprive the Government of the benefit of my advice on how to run a railway, but I am afraid they will have to manage without it.
I want to say one or two words about what some of the provisions mean to the general public, especially as represented by the local authorities. The Bill repeals those provisions in the Transport

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Act, 1947, whereby local authorities with a population of 50,000 and above are enabled to object to the Transport Tribunal against the confirmation of a draft charges scheme—that is, against fare increases. Under this Bill, the Transport Tribunal is given competence to determine fares in the London area, but not outside of London. I appreciate that one of the prime purposes of the Bill is to give the new Railways Board much greater flexibility in fixing fares, but I suggest, and this is the view of the Association of Municipal Corporations, whom I have consulted, that there should be some statutory provision for public opinion to make itself known, particularly in view of the fact that Charges are also to be outside the scope of the Transport Users' Consultative Committees. I cannot believe that it is in the public interest that a virtual monopoly should not be open to public interrogation on its charges policy before an independent tribunal.
In this connection, may I mention that since the Transport Tribunal was set up in its present form under the 1947 Act, it has held ten inquiries on objections to draft charges schemes proposed by the British Transport Tribunal, and on an average about 24 local authorities have put in objections on each occasion? Surely this indicates that the power is one which local authorities are prepared to use, and to some effect, since on some of the ten occasions the inquiry led to an alteration in the charges scheme. An Amendment seems required, probably to Clause 45, to restore this power to local authorities.
Under Clause 46, the Bill provides for objections to be made to the Transport Tribunal by representative bodies, including local authorities, against fare increases proposed in the London Passenger Transport area. Non-county boroughs which have a population of fewer than 50,000 are not given the right to object, and again I advocate an Amendment to Clause 46 which would give them that right, on the ground that smaller authorities are no less representative of the populations they serve than the larger authorities.
Lastly, Clause 56 deals with the composition and powers of the Transport Users' Consultative Committees. They
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are given power to consider a proposal by the Railways Board to discontinue railway passenger services from any station or on any line, but no power whatsoever to consider a reduction of railway services. Unless I have misread the Bill, it would apparently be possible for a Board to reduce a passenger railway service to one train a week, and this reduction would be outside the scope of discussion in the Consultative Committees. This is hardly necessary or justifiable, and an Amendment to Clause 56, which would bring the reduction of services within the competence of the Consultative Committees would seem to be desirable. Those are the only comments I should like to make at this hour. I support the Bill. I would conclude with my apologies to the noble Lord, Lord Mills, who will finish this debate, because an important engagement for which I am already late will prevent me from being present.
8.22 p.m.
VISCOUNT ST. DAVIDS: My Lords, I wish to address your Lordships to-day on the waterways side of this measure, the aspect of the Transport Bill on which I am qualified to speak. I understand, and certainly approve, the removal of the waterways from railway domination. It is the railway mind which has put the waterways in their present position. I do not wish to cast any slur upon railwaymen or upon their management of railways, but the fact of the matter is that a waterway is an entirely different kind of organisation. A railway operates its own trains on its own track, whereas a waterway is a public right of way, and the majority of the users are not members of the waterway organisation itself. What is more, it has many side uses and side aspects Which are not properly appreciated 'by those Who are used to running railways.
The noble Lord, Lord Chesham, said that no attempt was being made in this Bill to solve all the problems of the waterways. I must say that I am glad of it. There are very few people who understand what the waterways need; and from what the Bill does to the waterways it is clear that neither the Government nor the framers of the Bill understand what is needed. The whole business of waterways is one of the

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proper use of side products. Without the use of those side products, a waterway becomes so expensive to use that it becomes entirely uncommercial for its cargo-carrying traffic. It is true 'that the Joss per ton carried on the waterways is higher than the similar losses on the railways, but this is due to two entirely artificial factors—an artificially low tonnage, and an artificially high loss. The low tonnages are due to some conditions which are really hard to remedy, mainly bad waterway conditions, due to all sorts of reasons in the past which have been extensively aired at one time or another. It is far too late in the day to go into them all, but they can be put right. The second reason is a bad charging system. There, again, I do not want to go into it all. The Bowes Committee based their remarks on it, and with that every commercial waterway operator agrees.
The third reason which has caused low tonnages is the Government's own fault, and that is uncertainty of tenure. There has been a huge chain of researches by Committees and Commissions—as explained by the noble Earl, Lord Lucan—into what needed to be done to the waterways. In each case the Government of the day have said, "We will do something", but they have not. All they have done is to create uncertainty; and uncertainty, as the noble Lord, Lord Mills, most certainly knows, is the enemy of any proper commercial operation. If you do not know what the conditions of your business are going to be from day to day, week to week and month to month, it makes it very difficult to run a commercial business. The uncertainty in this case will to a large extent be cured by this Bill, except for one unfortunate point where further uncertainty is being caused by the fact that the railways are now allowed to compete with the waterways without any limitation on their powers of cutting charges, and without even the protection which is being given to coastal shipping. I hope that when we get further into the life of this Bill it may be possible to put that right by an Amendment.
The high losses which have been made have almost all been due to the insufficient use of the ancillary products of the waterways. When we feel down in the mouth about these high losses it is just as well to get this thing into proper
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proportion. It has been pointed out that in the mere matter of fishing licences, with the enormous numbers of fishermen using the inland waterways, if half-a-crown a year per fisherman were charged for a licence it would almost entirely wipe out the existing deficit. Naturally, nobody would think of putting the entire weight of this business on the backs of the unfortunate fishermen, but the point does out the thing down, to some extent, to scale.
Then there is the matter of pleasure craft. I know it is said that the Thames makes only a very small part of its revenue out of pleasure craft. But the Thames Conservancy is a conservancy body whose main functions are water distribution, drainage, and all sorts of other duties. In fact, the facilities provided for pleasure craft by the Thames are superabundant—possibly more than the craft need. The pleasure craft on the canals are an increasing number. Over the last ten years they have multiplied in number more than ten times; and that is by no means the limit. There used to be such a thing as pleasure motoring. The motor cars are still there; everybody in this debate has noticed them. But the pleasure has largely gone. Those who formerly used our motorways for pleasure are turning to the water in enormous numbers. The thing which is now holding back the development of pleasure craft on the waterways is the problem of where to moor them. That problem is not being adequately tackled, not through any impossibility of tackling it but simply because the job is not being done. I could take any waterways representative around this London area, and within a very few miles of London I could show him places where at least 500 more pleasure craft could be moored, which is a considerably greater number than already exists in the area—and if anybody cares to take me up on that challenge I am perfectly prepared to do it.
Then, again, the sale of water. We know that there is a lot more revenue to be obtained from this. One of the purposes of this Bill is to make the sale of water easier and so long as enough water is left for navigation everybody is, of course, delighted with that. Another very controversial point which I come to is that of houseboats. I know

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that the moment you mention houseboats to a British Waterways representative he simply shudders; and after looking at British Waterways' houseboat colonies I quite agree. I shudder with him. The truth of the matter is that a houseboat colony, if not properly supervised, becomes a slum in almost record time; but then, as many of your Lordships who are property owners know, if you let flats and do not supervise them you very soon have a slum on your hands.
The Thames Conservancy have a great many admirable houseboat colonies and their difficulty in the matter of houseboats, which are greater in number than those of other inland waterways, is that they also have considerable responsibility for keeping up a high standard of purity of their water, a thing which nobody has ever suggested Should be the responsibility in the case of some other canals. There are enormous lengths of canal which could very happily be used for houseboat moorings without injuring the water and without hindering the passage of commercial traffic. What is more, there is an enormous demand for these houseboat moorings. I am asked about it all the time. People say, "Where can I moor a houseboat?" If such mooring places were provided they would fill up very quickly indeed and the additional revenue would, of course, be extremely welcome.
You may ask why we should not fill in some of these unwanted areas and use the ground for housing or any other building development purposes. Nobody seems to realise that it is a great mistake to fill in small branches of a working waterway because a working waterway depends to a much larger extent than many people realise on the top few inches of its water, since every time a craft goes through a lock on the Grand Union Canal, for example, it uses 56 thousand gallons of water, which are thrown off from one level and pushed into the level below. You have only to have a brisk little bit of commercial traffic moving on a waterway and if the upper levels of that waterway are not adequately supplied with a water area which can be lowered slightly to provide the lockage water, then you lower the waiter level so much that you stop the
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traffic. It has been very obvious in recent days.
Your Lordships may know that there has been a considerable stoppage on the Paddington arm of the Grand Union Canal due to the bursting of the aqueduct over the North Circular Road. The result has been, in the length of waterway to the east of that break, a considerable lack of lockage water. If there had been heavy traffic trying to go up the canal it would not have been able to do so simply because there was not lockage water there to let it go up. The level would have dropped so much that the heavily loaded barges would have been on the bottom. That shortage of water has been materially increased by the fact that the old Cumberland arm was filled in just after the war and several other canal basins along that route have been allowed to dry up or have been filled in. If those basins had been preserved, they could have been used as yacht basins or houseboat moorings, and they would still have contained all the lockage water necessary for the active use of the system.
Another matter I should like to speak about is waterside leases. I am glad to see in the Bill that in future the waterways, with the assistance of the Minister, will be able to make more active use of the grounds alongside their watersides. It is possible completely to kill a canal by using its waterside properties for all other purposes except those of a waterway—by building houses, using the walls for garages, and all the rest of it. In many oases property on that basis has been let off on long leases, making it extremely difficult for those who want to use a waterway for commercial traffic and other purposes to get any kind of foothold on the waterside at all. What is more, this problem has been made worse by uncertainty about the continued existence of various of these waterways, and the fact that, in many cases, waterways have granted only short leases. If only we can have certainty of operation of these waterways, and can get some of this land for the use of factories and other waterside purposes intending to use the waterway, we can very considerably add to the traffic on these waterways.
The final thing which has caused these losses, my Lords, is an amazing one—it

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is insufficient publicity. I do not know of any commercial advertising agency which allows itself to advertise two different competing firms; yet the Transport Commission has been solemnly trying to advertise both the railways and the waterways. The railways, with their enormously greater weight, have naturally carried the day, and the amount of advertising put out per ton carried by the railways is enormously greater than the amount put out per ton carried by the waterways.
To give one example, which may well amaze your Lordships, let us suppose that you found yourselves in a foreign country and were talking to local inhabitants about their railways. If those local inhabitants were to turn to you and ask, "Are we allowed to use these railways; is it permitted?" you would say either that the country was some weird form of dictatorship or that the advertising had been simply shocking. But I am asked that question over and over again. As you may know, my Lords, I go around the country, and I talk a great deal about the waterways. I meet all sorts of people here and there, and that is the question I am asked. I do not think I need say anything more about waterways publicity.
All these side products may not sound much like transport to your Lordships, but between them they carry so much of the cost of all waterways that cargo transport becomes extremely cheap; and unless these side products are properly used no commercial carrying is really possible. To try commercial carrying without using these products to their full extent is merely to have the traffic become expensive and drop right away, as it is doing.
How does the Bill set out to put this right? It gives greater freedom in handling certain assets; we must certainly applaud that. And it frees the waterways from railway management; that is also a matter of great applause. These are very good, and with these, if a good Board are appointed to control the waterways, they have an excellent chance to recover, and after five years I am quite sure that a subsidy will not be needed. I know that various other noble Lords, including Lord Lucan, were far more pessimistic than I am. Lord Lucan, I am afraid, is simply out of
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date. Ten years ago when Lord Lucan was a great frequenter of the waterways he would have been entirely right, and I should have agreed with him. Five years ago I think I still should have agreed with him; I am not sure quite where the balancing point comes. But to-day he is quite wrong. We have reached a position, with the great increase of other waterway users, where the other waterways interests are far enough developed to carry any waterway which has lost almost all its commercial carrying traffic; and the other waterway users are, in fact, now prepared to form trusts to take those waterways over.
I agree with the noble Earl, Lord Lucan, that some financial provision will have to be made with the waterways. After all, working capital is as much a tool of any business in the country as its machinery, its office buildings, or, in the case of the waterway, as its locks and water. Some working capital will have to be provided. I should like to see inserted in the Bill, and I am proposing to move as an Amendment at a later stage, the old railway clause which was put into a number of Railway Acts years ago, by which if a railway operator wished to get rid of his statutory undertaking he was enabled to hand it to any responsible body who were prepared to run it, with cash representing a certain number of years' loss. The old railway clauses were usually ten-year loss clauses, but I suggest that as this Bill is set up a five-year loss clause might be a reasonable thing to insert into it. What it would amount to would be that these other organisations would be prepared to take over the worst waterways which British Waterways were prepared to abandon, on the basis of the average of what the Government think the waterways would cost. That seems to me reasonable. If you look at the basis on which for example, the Stratford-on-Avon Canal was taken over, you will find that it was financed on a basis very similar to that.
If your Lordships will allow me the time (I do not wish to be very long), I will quote a few cases where private enthusiasm—I do not know whether one would call it enterprise—has taken over, or is about to take over, or is now running, waterways. The Stratford-on-Avon Canal your Lordships have already

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heard about. A trust was made out of the National Trust and the Inland Waterways Association jointly. They raised £40,000 which British Waterways said was necessary to do the job. I am happy to tell your Lordships that they are taking a much shorter time than they thought on the repairs, owing to the thousands of volunteers who have flocked to their help, and the job is costing considerably less than £40,000. At the end of their repair work they are going to have cash in hand.
To show what can be done with thoroughly impossible material in the canal line, let me quote the Basingstoke Canal. This is one which Dr. Beeching would have swept straight out of the way, had he had a hand in it. The Basingstoke Canal was bought at a bankruptcy sale by a committee. Its water supply was weak; its locks were mostly useless; its tunnel had collapsed, so that it no longer got within five miles of the town of Basingstoke, and since the war it had had no commercial traffic at all. Nevertheless, it may amaze your Lordships to learn that this canal is making a profit. It is slowly repairing its equipment; it is even starting to put its locks right, and it now has the promise of a restart of commercial traffic. I think the brilliant lady who acts as general manager of the canal should rapidly be taken by the Government and placed on the new Board; I think they need her.
There are a number of other navigations I should like to name: the River Wey Navigation, still in private hands, never nationalised, the locks the oldest in the country, built in Cromwell's day and quite a number of them never altered. Nevertheless it continues by careful management to stay on the right side of the books, and with the additional traffic which now seems likely to come into its tributary, the Basingstoke Canal, it is starting to pick up.
The Kennet and Avon Canal is a nationalised canal, and since it was previously railways property you may not be surprised to hear that it is largely unnavigable except in odd patches. There are a number of places where its lock gates are now completely missing over long distances and it is in a very bad way. Nevertheless, a branch of the
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Inland Waterways Association have formed themselves into a trust with the idea of taking it over. They have obtained engineering, commercial and accountancy advice; they have prepared a complete redevelopment scheme (I have a copy here) giving in complete detail not only all the engineering costs and requirements for putting the canal right but also all the sources of revenue likely to be expected. They have been holding public meetings to support them in their endeavours. They held one on a wet, cold, rainy evening in Reading, and 800 people filled the hall. There were a number of other people but they could not get into the hall. They had a similar meeting in Bath, and the enthusiasm for reopening this waterway has been tremendous. If it becomes possible to take over this waterway on the basis of the Amendment I suggested to your Lordships, I am informed that the Kennet and Avon Canal Association's new trust will go ahead and be willing to receive it.
Another waterway I have heard of, a nationalised one which is threatened with closure, the St. Helen's Canal, has again had a take-over bid; in this case an angling association has offered to gel the waterway dredged at their own cost, simply in order to preserve the angling on it. So there is, in fact, a considerable surge of people who are willing to take over the waterways which British Waterways may no longer consider useful. Furthermore, I am able to tell your Lordships the latest news, as of to-day, that the National Trust are becoming most interested in these matters and are considering whether they can move further in some direction.
It may seem odd to your Lordships that all these people are willing to do these incredible jobs; but it is because, among the waterways enthusiasts, there has been a combination practically unique in this country's history between men of public spirit, keen amateur sportsmen, both yachtman and fisherman, and successful businessmen whose profession is the waterways. I may tell your Lordships that to-day I spoke on the telephone to a fairly high up employee in British Waterways, who said to me, "Good luck! I know you are right in this matter". These people know exactly what the job costs and

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what is needed to do the job, and they support it. If, when the Bill is passed, the Minister appoints his Board from among the waterways people who know the job and how to do it, then I am sure that these waterways can soon be restored to order. If your Lordships think I am a mere visionary, just look across the water to the Common Market countries, where neither road nor rail transport is neglected; yet they are now in the middle of the largest expansion of their waterways that Europe has ever seen.
I conclude by saying to Her Majesty's Government: do not panic and throw away our ancient privileges of public right of passage, as this Bill does. Hand over for preservation any waterway you believe to have no commercial use, and it will be preserved for the benefit of the public. Appoint a Board who believe they can do the job, and who know how to use the many sources of waterways revenue; and be sure that anything that can be done with the waterways in Europe or America can be done just as well, or better, here.
8.52 p.m.
LORD LINDGREN: My Lords, I think we have had a most interesting debate on the Second Reading of this Bill. I think that everything that could have been said has been said. Last night, and in the early hours of this morning, I went through a large number of pamphlets in regard to the inter-war problems of transport, and was prepared to make a speech including a number of quotations. But in view of the hour and, if for nothing else, out of respect for the noble Lord, Lord Milk, who has to reply, I feel that it would be not quite the right thing to do. They will all come in useful for the Committee stage. May I warn the noble Lord that, though we are going to be quite generous to him to-night, we may not be so generous during the Committee stage?
The speeches have been well informed and most effective on the points with which they have dealt. There were many compliments to the noble Lord, Lord Chesham, who opened the debate, and I do not want to paint the lily. It is very nice when a Bill is introduced with such clarity that even those not directly interested in its operation can
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understand its purport and what is really behind it. There were other speeches which I feel I ought just to call attention to, mainly because I entirely agree with them or because I have a special agreement with them. There were the speeches of my noble friend Lord Shepherd and of the noble Lord, Lord Lucas of Chilworth, and, if I may say so, two outstanding speeches of Lord Citrine and Lord Polwarth. It would be unfair to expect the noble Lord, Lord Mills, in winding up this debate to-night, to answer the detailed criticism which both those noble Lords made of the Bill; but I would seriously suggest that the Government look at this criticism, which was constructive from two totally different points of view. I feel that much of those two speeches will form part of the Committee stage operations, because they dealt with fundamentals.
Equally, it is interesting to note that everyone who has spoken, even those who started off by saying that they were glad that the Government had grasped this nettle, put in qualifications and, in some cases, a special plea. Lord Merrivale quoted the Railway Gazette. It is interesting to note that the whole of the transport technical Press is critical of the Government's handling of the transport situation, and in particular of the new railway organisation. Practically every leading transport expert who has expressed an opinion has done so, I will not say by way of condemnation, because that would be too strong, but certainly by way of criticism. The only expert I have found who has had anything good to say is the General Secretary of the Road Haulage Association, who in a speech the other week, said that Dr. Beeching's policies, added to the existing economic impetus which favours road at the expense of rail, will mean more and more opportunities for the enterprising road haulier.
I got into a little trouble on the last occasion when we were discussing the White Paper, over my inferences in regard to the Road Haulage Association and Tory Party funds, so I will not pursue that matter any further this evening. As to some of the special pleading, I do not think it would have been made if there had been prior thought

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about it. With the greatest respect to the noble Lord, Lord Milverton, who welcomed the Bill, congratulated the Government and the Minister, and then made a special plea that local authorities with under 50,000 inhabitants should have the right to oppose freight charges and passenger charges of the railways, I would say this. If you are going to give freedom of operation, and are going to ask a group of people to make viable the industry which they are operating, you cannot at the same time fetter them by restricting their chances of getting the revenue that they ought to have for that industry. This shows up the loose thinking that exists. The Government, in particular, and noble Lords in this House, must make up their minds firmly whether or not the transport industry in general, and particularly the railways, is to be a viable industry, or whether the railways have a social value so that some of their operations, at least, should be operated on the basis of a social service.
In listening to the debate I felt at times that noble Lords were taking the view that, so far as the railways were concerned, this was a problem of the 'sixties, and one which had arisen since the Transport Act, 1947, was passed. I mentioned earlier that I was going to make a number of quotations and, from the point of view of the record, I think it ought to be said that ever since the 1914–18 war, of course, the railways have been in considerable difficulties. As my noble friend, Lord Shepherd said in his excellent opening statement, that was due to the development of the internal combustion engine and the competition which thus arose.
At the end of the First World War there was talk by no less a person than the right honourable gentleman, the Member for Woodford, Sir Winston Churchill, who was then a Minister in the Government, that railways should be nationalised. But we had then, of course, the Railways Act, 1921, and the setting up of the four main-line companies. It is as well to remember, even in 1962, that when the 1921 Act was passed we set up at the same time the Railway Rates Tribunal, and the then four main-line companies were given the standard revenue of £51 million. The Railway Rates Tribunal were instructed
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that in dealing with applications by the railway companies in respect of rate charges and fares they should bear in mind the desirability of the railways' reaching that £51 million standard revenue. But that standard revenue was never reached. In 1929, for instance, revenue was as low as £29 million.
There was then, of course, the campaign by the Railway Companies' Association to get "a square deal for the railways." Railway revenue in 1932 was no more than £27 million. The Railway Companies' Association pamphlet issued at the time of their campaign in the 'thirties (incidentally, an excellent pamphlet) said this:
"It is no exaggeration to say that every family in Britain, every man. woman and child, every factory and shop, every trade and industry, are vitally affected by the condition of Britain's railways. British industry could not function for a day without its railway system."
I shall try to show that in fact railways can be made viable, but only by ruining the economy of the British industry; and if you do not ruin the economy of British industry the railways will never be viable. This is really why this Bill is only playing with the issue. In the railway companies' campaign, "A square deal for railways", they said, in part of their statement of case:
"Before approaching the major items, the Railway Companies submit that the law regulating road transport as it stands should be enforced. This is notoriously not the case as regard the speed limits and hours of duty laid down in the Road Traffic Act, 1930, or the weight limits prescribed by the Motor Vehicles (Construction and Use) Regulations, 1931."
My Lords that was in 1930—written, it is true, by the biased and vested interests of the railway companies. But their statement that road operations are carried on under conditions which are in violation of Acts of Parliament every day of the year is still true. And this Bill does nothing in any shape or form to deal with it; nor, for that matter, did the recent Road Traffic Bill which was before your Lordships' House.
We must face the fact that railways are not a viable industry anywhere in the world; and to suggest that Dr. Beeching can in five years make them viable is just poppycock. It just cannot be done, because, first of all, in spite of the capital reconstruction that is taking place

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there are still heavy capital charges to be met. We still have to face road competition, and having regard to the facilities which the road haulier can give to railway traffics, with no restriction on weights of vehicles or types of traffic, that competition is likely to continue. This is equally true in regard to the "C" licence. If we are going to have that luxury, then the railways cannot be made to pay.
The noble Lord, Lord Chesham, in his opening statement quite rightly called attention to the fact that under this Bill common carrier obligations are to be withdrawn from the railways. That is very good. But have the Government really studied the likely effect of that upon industry? One of the problems of railways up to the present time, particularly in regard to the "C" licence, has been that the "C" licence-holder has organised his transport fleet to meet the normal load he is expected to carry; and one cannot blame him. What has he done afterwards, when, in fact, he has to deal with the peak? He sheds his peak load to the railways, because it would be uneconomic for him to handle that peak load, even on the basis that this "C" licence transport fleet is already a heavy charge on the industry. It would be uneconomic to the extent that he would not even be prepared to operate his fleet to carry peak load and thus have vehicles idle during off-peak periods. Some of the special traffics handled by the railways will have been rather costly for them, but they have taken those peak loads in the expectation and hope that they might get some further traffic. Now they will be in a position to refuse it. Industry will soon start to complain when the railways of this country refuse to take the traffic unless industry is prepared to pay a very highly enhanced cost for that surplus over their "C" licence fleet.
This is equally true with regard to the commuter service, which is run at a loss, and will always be run at a loss, unless in fact you are going to put such heavy burdens on the shoulders of persons who have been forced outside London that they try to move into London or transfer their allegiance from the railway service as it now is and further clog London with cars, motorcycles and the rest. And, of course,
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we may have to face the fact that parking inside London is a problem associated with the commuter service and whether or not a public transport service can be made to pay.
My Lords, this is repetition, but I will indulge in it for just a moment or two. The real solution, and the only solution, to this problem is that to Which my noble friend Lord Shepherd called attention, and that is an integrated system of transport. Those of us who have been workers in the industry, whether we have been associated with road or rail, coastwise shipping or the air, have all said that we do not want a particular form of transport simply because we were workers in it. Each form of transport has a particular function to perform, and the policy of those responsible for the organisation of transport should be to ensure that persons and traffic are carried by the vehicle which is most suitable to the traffic and the journey to be made. It is not a question of war between road and rail or between rail and air—or it should not be.
It is just fantastic to me, as a railwayman, that recently we should have had the British Transport Commission appealing against the decision of British European Airways to run a cheap night air service from Glasgow and Edinburgh to London, because in fact it would have been cheaper than, the rail service. If the facility of cheap, fast, safe transport can be provided by air, irrespective of Whether or not it is in competition with the railways, it ought to be provided. To see two nationalised industries swapping with each other, against improved facilities for the travelling public, is really not dealing with transport as it should be dealt with.
There has been special pleading for coastwise shipping. The matter was raised by the noble Lord, Lord Teynham, who is in his place. It was special pleading; he was asking for special facilities or, at least, that rail transport should be cramped in order that coastwise shipping could get extra traffic. All of these systems have their functions. There are some functions which coastwise shipping can carry out far better than rail, and which it ought to carry out. But' it can be done properly only if each form of transport makes its contribution. If their charges

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are pooled, then what one loses in one way can be gained in another.
After all, when this Government are dealing with private enterprise that is what they do. The effect of the motor car on the railway has been such that the railways traffic has been creamed off. The effect of the air on shipping is exactly the same. First-class passengers, easily handled freight traffic, bullion, valuable cargoes carrying high freight charges go across the Atlantic and all over the world by air at the expense of shipping. Shipping is left with the heavy and more difficult cargoes to handle. But what did this Government do? Even at the expense of a nationalised air service, B.O.A.C., they gave a facility to the Cunard Eagle air services to tie up with the Cunard Shipping Company in order that the shipping and air sides can be dealt with together. If, in fact, this Government are prepared to concede the principle so far as private enterprise is concerned, on the basis of shipping maintaining its profit, why not in so far as surface transport is concerned in Great Britain?
My noble friend Lord Shepherd gave some figures earlier. I am not quite sure where he got them from and my figures might conflict with them, but I will quote my figures and that may give the noble Lord, Lord Mills, the opportunity to correct both of us. In three short y eats of operation under the 1947 Act the British Transport Commission was making a profit of £4 million. In 1952 it was £8 million, and it was not until after we had the denationalisation of the greater part of the road transport system under the 1953 Act, and the added restrictions placed on London Transport under the 1953 Act, that the decline and deficiencies started to arise. I would suggest to Her Majesty's Government that we must make up our minds whether transport is to have any social responsibility to industry or to the community.
During a debate last week we had special representations by the noble Lords who have associations with Wales. Now it is perfectly true that the Welsh railway system, as a railway system on its own, just cannot operate economically. Equally, the noble Lord, Lord Polwarth, in his excellent speech
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called attention to Scotland. If, in fact, this Government are going to direct Dr. Beeching to make the railways of this country viable, there will be no railway service north of Edinburgh or Glasgow, because all services further north are uneconomic at the present time. Are we going to face the fact, or are we just trying to mislead the public?
Then, in the Civil Defence debate the other day, I called attention to the fact that only 'three or four weeks ago the Government issued a statement on policy in which they said they hoped to move from London and other big centres over 10 million people if we were so unfortunate as to have a threat of war, which God forbid!—and everybody will join me in saying that. But, after all, this is a Government statement on defence, and the railway system and the transport system are part of the country's defence. Is it not just hoodwinking the public for a Government to make a statement about moving 10 million people from the cities of this country into the remote areas in a short pre-hostility tension period and, at the same time, to destroy the very railway system which is the only system that could carry them? You could not carry 10 million people on the roads of this country. You do not have the vehicles, for a start; you do not have the roads, for a start. If you attempted to do it, then you would dislocate the whole of 'the industrial activity of the country, and you would create a far bigger panic than any war or threat of war would be likely to do. So, really, the Government must face up to this matter. Is there a social value in the railway system? Is there a defence value in a railway system? How far are you going? What is economic and what is uneconomic?
The noble Lord, Lord Fraser of Lonsdale, spoke about trying to combine freight and passenger services with the delivery of letters. I am glad that he likes a nationalised Post Office, but even this Government have placed on the Postmaster-General responsibility for making the Post Office viable. All the shipping services already run by private enterprise for the Highlands and Islands are subsidised, and unless they were subsidised they would not be running at the present time. So why does this Government not face the fact that you cannot

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provide transport services for the Highlands and Islands unless you are prepared to subsidise them in some form or another? British European Airways are providing a very excellent means of communication between the Highlands and Islands by their services in Scotland. That is a nationalised industry. But B.E.A. are able to do that only out of the possible profits of the rest of their services. What is more, you do not get the private airlines coming along and asking for licences to operate into the Highlands and Islands. So these air services, this transport for the depopulated areas, must be subsidised; there must be some arrangement for 'there to be a subsidy in regard to it.
Rural transport has been mentioned by one or two noble Lords this afternoon. As railwaymen we must admit that there is no justification, on the basis of purely economic operation, for keeping many of these rural area lines open. But some of the attempts now being made to destroy them are really making it impossible for the ordinary man and woman in the rural areas to have any communication with the outside world at all. The farmer has contributed to the problem. He now has his own motor car, and he carries his own cattle into market miles and miles away in his own lorry and cattle truck—and who can blame him? He has the facility there, and it is a much more economic proposition from his point of view. Even if not economic, it is a much easier one for him to handle. He has his eye on his own beasts and he is handling his own feeding stuffs. But this is the problem that the Government and the public have to face.
It is perhaps a story against myself, but one noble Lord—I think it was the noble Lord, Lord Fraser of Lonsdale—referred to many noble Lords in this place not having had the experience of deputations from constituents. When I was in another place I had a deputation because of the threatened closure of a rural branch line. Six members came, associated with the National Farmers' Union and with two rural districts. As your Lordships will appreciate, when a Member of Parliament, who is dependent upon votes, gets visitors, he is always very polite to them; so, after we had had our discussion we adjourned to a
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certain spot where we could be convivial. When I noticed that the time was going on and that they were likely to miss their train, I suggested that if they wanted to get to St. Pancras in time to catch it they should be off pretty quickly and I would show them the quickest way out—it was not that I wanted to get rid of them. You can imagine my surprise when they said, "Don't worry, George, we have a couple of cars outside". Here were representatives of the National Farmers' Union and two local authorities, coming to me as a Member of Parliament to put pressure on the Government—it was the Tory Government then—to prevent the closure of a branch line, and they themselves had come up 70 miles by road because, in fact, it was a facility for them to do so; they were not restricted to catching trains, and the rest.
We have to face, too, that with the dismantling of the transport services there will be a depopulation of the areas. The noble Lord, Lord Polwarth, referred to destroying an efficient railway system and putting on an ineffective road service. May I say, having had some experience with the operation of rural bus services as well as with railway operation, that if a railway line does not pay, then a bus service will not pay. And if the buses are run by private enterprise, then it will not really be a service. If any sort of service is going to be provided, then it will have to be done by the Railway Boards, if they are given power to do it. But it can be done only at a cost. I am not going to say that the loss would be as great as would be incurred by maintaining the railway branch line, but it could not be run at a profit. Even in the rural areas round about the Home Counties, the cross-country services provided by London Transport, Birch Buses and many others cannot be made to pay—and, of course, those undertakings cut out the areas which do not pay.
Now I must say a word about staffs. Dr. Beeching has been appointed by the Government for the job—a job which he cannot perform. He cannot do the job unless he has an effective and enthusiastic staff, and, with the greatest respect, his recent speeches are not conducive to getting an effective and enthusiastic staff. With his statements about withdrawing services, about drastic

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curtailment of services, about drastic cutting out of branch lines and the rest, one cannot wonder that the staff are getting "fed up", frustrated and apprehensive. Among the older members of the staff there are in all grades within the railways of this country—officers, staff and men (if you wish to put them into their various categories)—enthusiastic and efficient men and women who have been doing a really first-class job.
In recent months the British Transport Commission as it now exists has been doing some really excellent work in conjunction with the universities, the grammar schools and the public schools of this country in recruiting some excellent young men into the service. It is a serious problem for the railways, if in fact they are going to be made a viable industry. Those young men whom Sir Brian Robertson, the then Chairman of the British Transport Commission, with the full co-operation of all the trade unions, recruited from the universities and the public schools, and who were given facilities for training in a traffic apprenticeship, are now leaving the service. The older man of 50 or 55 has a stake in his superannuation fund and is not anxious to change, but these young men who have been brought on and who are now aged 25 to 30 are not going to stay with a sinking ship. This Government and, if I may say so with the greatest respect (although perhaps one should not say it as he is not here to defend himself), the new Chairman, are creating the impression among the staff that there is no future in the railways in this country. Their future can be secure only if we accept that the railways are vital to the economy; that they cannot be made viable but must be maintained; and that "subsidy" is not a dirty word if in fact a subsidy is necessary. It is a social service, and it has to be paid for in exactly the same way as many social services are paid for and recognised at the present time.
A number of noble Lords, particularly the noble Lord, Lord Teynham, and the noble Lord, Lord Merrivale, put in a word for the police so far as the British Transport Commission's services are concerned, and I agree with every word they said. But all that they said about the importance of a unified service so
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far as a police service is concerned—the excellent economies and the greater efficiency in operation that it gives—can be said for all the other services; and if you accept integration for the police force, why not for road and rail operation? It is a specialised service, and does a good service. There is far too much pilfering going on for any respectable railwayman to be content with the position. (Millions of pounds are lost every year, but not through railwaymen. Unfortunately, sometimes railwaymen and road transport workers contribute to it, but it is largely done by organised gangs from outside. If the legal and the police services of the British Transport Commission were dismantled, it would be tragic.
I hope that what has been said in regard to them will have an effect upon the Government. I also hope that Amendments will be put down and that both the noble Lord, Lord Teynham, and the noble Lord, Lord Merrivale, will put down some Amendments. If they do, we shall be delighted to be associated with them in their attempts to maintain this excellent service.
My Lords, I did not intend to speak for so long as I have spoken. In conclusion, I would congratulate all those who have spoken in this debate. I am sorry my reply has been rather sketchy, but, as I forecast would be the case in opening, it has been disjointed because much that was prepared in the early hours of the morning became redundant when it was said by other noble Lords. In the Committee stage of this Bill we shall attempt to convert the Government to a number of points which we think are vital, and I hope that in that interesting Committee stage we shall not be too cramped for time. As my noble friend Lord Shepherd said, in view of the fact that in this House we have a Committee of the Whole House, I hope the Committee stage of the Bill will be spread in order that it will not be too great a strain, not only on Ministers but on the Opposition, who, if I may say so, do not have behind them the excellent "backroom boys" which the Government have. Therefore, if we are to deal with the Bill properly in the Committee stage, I hope we shall have the facility of doing so in comparatively short periods of time.
9.32 p.m.
THE MINISTER WITHOUT PORTFOLIO (LORD MILLS): My Lords, as the noble Lord, Lord Lindgren, said, I think we have had a very interesting and, I hope, useful debate, although he did his best to fill me with gloom; but I shall refer to that a little later. This matter was fully debated in this House as far back as March 13, 1961, when we discussed the White Paper of December, 1960, on the Reorganisation of the Nationalised Transport Undertakings. I see that the debate then finished at ten minutes to eleven, so there is every excuse for the noble Lord, Lord Lindgren, to have spoken at some length. Perhaps there would be excuse for me if I proposed to do so, too, which I do not.
The noble Lord, Lord Shepherd, said that he intended to treat this Bill as if it had originated in your Lordships' House, and to examine it very critically clause by clause. I think that is quite right, and I hope that we shall do that. He also suggested that, in arranging our affairs, we should sit in Committee on the Bill for not more than three or four hours a day. I too think that is a very good idea. It is, in fact, proposed that we should begin the Committee stage on May 21, and sit, if necessary, on the 22nd, the 24th, the 28th and the 29th. That is five days in all. It is hoped that in that way we shall complete the Committee stage well in advance of Whitsuntide, and I hope that that will be agreeable to noble Lords.
The noble Lord, Lord Shepherd, also said that this matter was politically contentious, as, of course, it is. It is so because we differ fundamentally in how we would deal with the subject. I think we are all united in wanting to see the railways become what I would describe as an efficient service. I was asked whether the Government looked upon the railways as a service or a business. I think it is a service. I think it should be an efficient service; and that includes, of course, making business sense out of it, as well as making it meet the social needs of the country. But -the fundamental difference to which I have referred was expressed by the noble Lord when he said that he believes in "socialism and planned economy", and threw to me the alternative of "freedom
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and enterprise", which is certainly what I believe in.
I find noble Lords opposite so glib in talking about "an integrated service". In fact, the noble Lord, Lord Stonham, referred to the need for a "co-ordinated transport policy of road, rail, air and water" and went on to describe our requirement as a comprehensive, integrated transport policy. So easy to say, my Lords; but I really fail to know what it means. In discussing the nationalised industries (and this is not confined to the transport industry) I find that always somewhere "a comprehensive co-ordinated policy" is called for. But we are dealing with practical things. We are trying with this measure to do away with the factors which were hindering the proper functioning of the railways and the other services associated with them. We are trying to free them and to assist them in getting ahead with their job.
The noble Lord, Lord Shepherd, asked whether we were trying to break up the railways as we were breaking up the Transport Commission. He also asked what was the object of the six Regional Boards. I thought that my noble friend Lord Chesham—and I am grateful to noble Lords for the tributes they have paid to his opening—explained that the Regional Boards were designed to deal with the day-to-day management in the Regions: that is, with the operation and the running of the railways.
LORD SHEPHERD: My Lords, it was not the question of the Regions; it was the creation of a Board. Why should it not be sufficient to have an Executive and a general manager, such as is now in charge of Regions? It is the creation of the Board which gives the appearance that it is the Government's intention to break up the railways.
LORD MILLS: My Lords, I can assure the noble Lord that there is no such intention. It was our intention to deal with the problems of the management of the different Regions, and it was thought that a Board (no doubt there will be a general manager associated with each Board) was the best way of achieving this.
I think I ought to mention a point which was made—namely, why it is that the Chairmen of the Boards, or a

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member of a Regional Board, were not automatically members of the Railways Board. But there is plenty of room within this Bill for that to happen. I think that in framing legislation of this kind we must have regard to the fact that what is the position to-day may not be the position to-morrow. If the noble Lord would look at the composition of the Railway Committee which was announced by Dr. Beeching the other day, he will find that it is constituted along those lines.
The noble Lord also asked about the Transport Holding Company; what were its objects, and what were the intentions of the Government? Did they intend to strengthen various parts, or was the Company to facilitate the disposal of assets? I think that my noble friend Lord Chesham set out the objects of the Holding Company. It is designed to ensure the best return for the public purse from the operations of its constituent parts. There is no obligation to dispose of any assets. The Company represents a form of control which, as I say, could assure the best return to the public purse on its operations.
LORD SHEPHERD: My Lords, the noble Lord speaks of "the public purse", but he will remember that concern was felt that the Holding Company, with its securities in bus companies, should see that the bus companies provided adequate services. Would it be the duty of the Holding Company to see that that is done?
LORD MILLS: My Lords, that would be their duty, and the Minister would not hesitate to direct the Holding Company if it were not done.
The noble Lord, Lord Lucas of Chilworth, congratulated the Minister of Transport on grasping the nettle. I was glad to hear him say that, because the Minister of Transport has been very courageous in dealing with this problem. He is doing what he thinks right, and what the Government think right, in promoting this Bill and trying to make the services efficient. The noble Lord also asked whether I looked upon transport as a service or a business, but I think that I have already answered that question. The noble Lord said—he is a far-seeing Lord—that it would have been better if we had introduced this
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Bill ten years ago. I think that perhaps it would have been better if it had been introduced ten years ago; but here it is now, and I am not so much concerned with the history of the transport undertakings as with what we can do now to improve their efficiency.
The noble Lord asked whether they can become viable in five years. I should not like to answer that question. There are certain provisions in the Bill which go beyond the five-year period, in the hope that they will by then have become viable. But I know that great efforts will be made to make them so.
LORD LUCAS OF CHILWORTH: My Lords, would the noble Lord allow me to interrupt? The question I was trying to ask is whether, if after five years they are not viable, the noble Lord expects that the Government will take powers to extend that period.
LORD MILLS: My Lords, if the noble Lord could tell me which Government will be in power then, I could better answer his question. I expect it will be a Conservative Government and I am certain that they will take whatever attitude is necessary to keep this new system improving.
LORD LUCAS OF CHILWORTH: My Lords, if we are going on assumptions, I assume that these powers must be extended, because the whole thing cannot be suddenly shut up in five years' time, if the expectations of the Bill are not realised.
LORD MILLS: Of course, my Lords, if the expectations of the Bill are not realised, I am sure that the Government—whichever Government they are—will take steps to do what may be necessary to be done. The noble Lord suggested that there was nothing in the Bill to enable the railways to run bus services. But there are limited powers in Clause 4 (1) (a) (iii) to meet the situation he had in mind. British Transport Commission bus companies are vested in the Holding Company and, subject to the licensing procedure, could operate substitute services, just as private enterprise could under the same conditions.
The noble Lord also asked me whether land development companies could be formed by the Holding Company. Subject to the provisions of Clause 11, the answer is that they could. The noble Lord

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referred to what I thought was an important matter—the need for new and additional car parks at the railway stations. I can say that the British Transport Commission already have these needs in mind and are examining the problem. The Bill contains the necessary powers for dealing with it. My noble friend Lord Teynham supported the idea of Railways Boards and of anything that could be done to streamline the system. He made the point, much more clearly that I can, that we never have had integration, even under the 1947 Act, and expressed the view—which I rather share—that integration is not really possible. He prefers, as I do, co-ordination to integration.
The noble Lord, Lord Teynham, and the noble Lord, Lord Shepherd, referred to the police, and perhaps I may deal with them at tins point. Clauses 69 and 70 of the Bill provide enabling powers for the Boards to have such police forces as they consider necessary, either separate forces for each Board or a joint force for them all. The position is not really different from what now obtains under the Commission. Exactly the same powers exist now, but the Commission think it best to have one force. I should incidentally like to pay tribute to this excellent force, and I am sure that wisdom will be used in dealing with this matter.
LORD LINDGREN: My Lords, we are grateful to the noble Lord for his tribute to, the police force. We all agree about the excellent work they have done. But let me remind the noble Lord that this is a disciplined force, and when we find such a force showing great concern about their future it is easy to understand why the rest of the railwaymen are showing even greater disturbance of mind about their future. This causes problems within the industry. It is this uncertainty about the future which is worrying everyone.
LORD MILLS: My Lords, I said that I had listened to a gloomy speech by the noble Lord and I think he was gloomy when he mentioned this point. It is not what I find. I find that the spirit on the railways and the service on the railways are already showing signs of improvement. I hope I am right. I now just mention, because my noble friend Lord Teynham did,
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the question of coastal shipping. I have no doubt that we shall be discussing that in Committee, but the Government feel that Clause 53 constitutes a very fair balance between the interests concerned.
The noble Lord, Lord Silkin, said that railways would never pay if we aimed to provide the public with the service it needs; he said that the transport system must be subsidised if it is going to give the service required. I hope that Dr. Beeching and his colleagues will find in those two remarks a challenge which they will accept. At any rate, we can only wait and see. The noble Lord also talked about whether planning permission would be necessary in developing railway property. Of course, any development of land in London belonging to the Commission would be subject to planning authority. There would be no special favours for the Commission in that respect. I think that is right. We should see that our planning requirements are followed, whoever proposes to develop property.
The noble Lord, Lord Molson, gave a very interesting speech on what he described as "the middle way". I found it a very encouraging speech, but he asked one or two questions to which I should like briefly to reply. He wanted to know whether the Government continued to support the licensing of coaches under the 1930 Act, and of lorries under the 1932 Act. This Bill makes no difference in that respect, and the Government do continue to support it. The noble Lord also asked whether the Minister would use his powers under Clause 29 (4), to prevent the Holding Company from cut-throat competition with British Railways, even though doing so might be profitable commercially. The licensing system for all road passenger and road goods vehicles is designed to deal with cut-throat competition. The basic principle of the licensing system for road passenger and goods transport is to secure the public good by the regulation of cut-throat competition. I think it will be found that that will be an effective way of dealing with the matter; it ought not to be necessary for the Minister to use his powers of direction.
I think that also answers the question as to whether the Minister would, in appropriate cases, direct the Holding

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Company to require its subsidiaries to provide the necessary transport service if British Railways wished to close down some of their services. The answer is that he would.
LORD MOLSON: The answer is that the Minister would use his powers. Is that so?
LORD MILLS: Yes. As regards the question of the amalgamation of the parcels service and railway delivery service, it is not envisaged that the Minister would need to be concerned with this directly. It is primarily a question of management between the Railway Boards and the Holding Company. It would be possible for the Railway Boards to enter into working agreements under Clauses 14 and 16 with the Holding Company if they both felt that such agreements were desirable.
The last question the noble Lord asked was whether the Minister accepted the need for some degree of co-ordination between railways, roads, canals and coastal shipping. The answer is that he does, and that the Bill provides accordingly. There is provision in Clause 55 for the establishment of the National Transport Advisory Council, and there is provision in Clauses 3 and 7 for the Railways Board and the London Board to consult together about the co-ordination of their services in London. There is provision in Clauses 14 and 16 for the making of working agreements between nationalised transport undertakings. I draw the noble Lord's attention to the provision in Clause 27 for the Minister to have control of investment over the Boards. That is one of the main responsibilities which enables him to ensure co-ordination.
The noble Lord, Lord Citrine, I must thank for his views on nationalisation. He is a very experienced man and has very efficiently run a nationalised undertaking. But I could not see that a great deal of what he said had very much to do with this Bill. He seemed to find that there was an great measure of freedom under the Bill, whereas in fact it was designed to provide the maximum amount of freedom. As I say, I am grateful to him for What he said about nationalisation, and I hope that when he studies the Bill further he will find that it does provide commercial freedom.
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I can speak from experience that the noble Lord did not suffer from much ministerial interference. Of course, there is interference from Parliament, but that is to be expected, because Parliament is in control.
The noble Lord, Lord Polwarth, rightly drew your Lordships' attention not only to the situation in Scotland and the closing of branch line and stations, but to the necessity for the most careful consideration of any plans Which the British Transport Commission or the Railways Board may wish to adopt in order to alter the size or shape of the railway system, as that may become necessary. I am aware of the proposals which have already been made and of those which have been announced. But the Commission have said that there will be no further rail closures in Scotland, other than those they have announced, until the results are available later in the year of the traffic studies which the Chairman of the Commission has put in hand. I do not know what may be the result of that examination. I am sure that, so far as Scotland is concerned, they will be very carefully considered; that the consultative committee in Scotland will have a very full opportunity of examining the position. I think that also will apply to the rest of the country.
I am also aware of the article which I think appeared in the Scotsman, but I happen to know the Minister of Transport very intimately indeed and, whatever he may have said—and I cannot vouch for the correctness or otherwise of the report—there is no one more wholehearted in his desire to solve the transport problems of this country.
I have already referred to the noble Lord, Lord Stonham, and his passion for an integrated, comprehensive transport policy. He said that Ministers could see road and rail only as competing, but I can only assure the noble Lord that we do not think that way at all. We are anxious for the railways to offer an efficient service and for our roads to be the best that could be had. We only hope that the people using them will behave properly and cut down the terrible toll on the roads which comes from the human aspect of these problems.
I will just remind the noble Lord of what the Select Committee had to say

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about the question of road and rail transport, because he said the roads compete unfairly, through not paying anything like the same proportion of costs. The Select Committee in its Report on the nationalised industries said this:
"The track and rail are of the essence of any railway. They create the conditions of speed, density of traffic and safety which form the main advantages of railway travel. Their costs, therefore, should be paid for by the railway user and must be taken into account in any economic calculations about railways and in any calculation about the true cost of a particular railway service, be it freight or passenger".
Then they took up the question of track costs and went on:
"But in fact the road user pays each year in taxes for the use of his vehicle and its fuel considerably more than the annual cost of road maintenance, signalling and construction".
It is useful to put that on record.
LORD STONHAM: But the noble Lord will realise that the Select Committee did not take into account the vast cost to the nation of congestion on the roads, nor the cost of accidents on the roads, and he is merely confirming what I said and the figures I quoted; that in taxation road users do not pay anything like the cost of the road services they use if those services are calculated on the same basis that the railways rightly have to pay.
LORD MILLS: I just wanted your Lordships to know what the Select Committee had to say about it. I appreciate, of course, the point made by the noble Lord.
The noble Lord, Lord Fraser of Lonsdale in general supported the Bill. I was glad to hear of his support though I did not happen to be in the House when he was speaking. The noble Earl, Lord Lucan, said Government policy was entirely doctrinaire, which is, of course, what we, too, say about the Opposition's attitude. He is quite entitled to say it. He referred to the question, I think, of powers of manufacture. The Railways Board has a three-year moratorium, but the other Boards do not manufacture, and therefore the clause will apply to them directly on vesting. The noble Earl talked to us about the waterways, and I am sure that that will be very helpful. He paid a tribute to Sir Reginald Kerr and his staff,
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which I am very glad to be able to endorse.
The noble Lord, Lord Merrivale—he has already apologised for not being here—was the only one who said that the timing and the service on the railways was improving, which has been my experience too. He also referred, among other things, to the police force. The noble Lord, Lord Milverton, also, in general, approved the Bill but wished we had kept in clauses about the local authorities' interest in fares. No doubt we shall consider that in Committee.
The noble Viscount, Lord St. Davids, gave us a very interesting account of the waterways. I was quite fascinated by it and I was delighted when he said that in his opinion they would require no subsidy after five years. That is a possibility. I hope he was not basing that on his charge to the fishermen of 2s. 6d. a year, because I made a quick calculation that that meant there would need to be 6 million fishermen if they were going to meet the deficit. His was a very interesting contribution, which I am sure all noble Lords will have noted, on the position of the waterways.
I will not carry on till ten to eleven. I think I have said enough in summing-up the Second Reading. I should just like to repeat that I am sure all sides of the House will approach this matter, and do approach this matter, even if they employ different methods, with the idea of improving the efficiency of the transport undertakings. I hope that your Lordships will now give the Bill a Second Reading.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

ECCLESIASTICAL FEES MEASURE, 1962
Text of the Measure: Laid before the House (pursuant to Act), and to be printed.
RUNCORN DISTRICT WATER BOARD BILL [H.L.]
Reported, with Amendments.
SOUTH ESSEX WATERWORKS BILL
Brought from the Commons; read 1a, and referred to the Examiners.
WALLASEY CORPORATION BILL [H.L.]
Returned from the Commons, agreed to with Amendments: the said Amendments considered and agreed to.

LIVERPOOL CORPORATION BILL [H.L.]
Returned from the Commons, agreed to.
House adjourned at nine minutes past ten o'clock.