HL Deb 29 July 1968 vol 296 cc7-45

2.43 p.m.


My Lords, on behalf of my noble friend Lord Shepherd I beg to move that the House do again resolve itself into Committee on this Bill.

Moved, That the House do again resolve itself into Committee.—(Lord Stonham.)

On Question, Motion agreed to.

House in Committee accordingly.

[The EARL OF LISTOWEL in the Chair.]

Clause 149 [Interpretation—general]:

THE PARLIAMENTARY SECRETARY, MINISTRY OF PUBLIC BUILDING AND WORKS (LORD WINTERBOTTOM) moved Amendment No. 315: Page 196, line 40, after ("means") insert ("save as otherwise expressly provided and in particular")

The noble Lord said: I beg to move the Amendment standing in the name of my noble friend Lord Shepherd. It is little more than a drafting Amendment designed to clear up any possible doubt about the definition for the Bill of "the Minister". There are many places in the Bill where "the Minister" must be interpreted as meaning the Minister of Transport or the Secretary of State, as appropriate, or both. Nevertheless, the definition in Clause 149(1) lists only five qualifications to the general rule that the expression means the Minister of Transport. These five references are all to subsections which attract the provisions of Schedules in which "the Minister" is similarly to be interpreted for the purposes of those subsections. In general, however, to avoid a long catalogue of references to places where "the Minister" does not mean necessarily or solely the Minister of Transport, we had been relying on the general qualification in the introductory words to Clause 149(1): In this Act, except where the context otherwise requires … the following expressions have the following meanings … Nevertheless, for the sake of absolute clarity, there would be advantage in repeating this saving expressly in the definition of "the Minister" in view of the rather exceptional circumstances surrounding the use of that expression. I beg to move.

On Question, Amendment agreed to.

Clause 149, as amended, agreed to.

Clauses 150 and 151 agreed to.

Clause 152 [Rating]:

On Question, Whether Clause 152 shall stand part of the Bill?


Clause 152 deals with a number of consequential matters with which I need not trouble your Lordships, but the main purpose of the clause can be said to be to bring the Freight Corporation within the rating system which applies to the railways, to the London Transport Board and to the British Waterways Board. It applies also to a number of subsidiaries of all those bodies. As I say, the purpose is to bring the Freight Corporation within the system of rating which is applied to the railways and these other bodies.

As your Lordships know, the railways enjoy a privileged position as regards rating, as indeed do these other Boards. They are not assessed for rating in the usual manner. Instead, they make a payment in lieu of rates, the amount of which is assessed by reference to what is called a "standard amount". I need not trouble your Lordships with the processes by which the standard amount is calculated except to say that it is most favourable to the railways and to the other Boards and most unfavourable to the other authorities. This arrangement by which the railways escape, as the local authorities think, their fair share of the burden of the rates, was made to help the railways during the period of depression in the early 1930s. It amounts really to a concealed subsidy to railways, and it will now amount to a concealed subsidy to the Freight Corporation as well, when that body comes into being. No doubt it assisted the railways in the days of the depression, but it did so at the expense of the local authorities.

There is one aspect of this situation which the local authorities particularly resent. One of the factors in estimating the standard amount, which, as I said a moment ago, measures the contribution that they make towards the rates is de-rating. There is a de-rating element of something like 75 per cent. As your Lordships will recall, de-rating was introduced during the slump of 1929 and the early 1930's to relieve industry and transport hereditaments of the burden of rating, in the expectation that this would assist industry to recover its prosperity, by reason of the lower freight charges which industry would enjoy. Accordingly, the railways were all brought within the system of de-rating. No doubt it did contribute in those days to a revival of industry—perhaps to the recovery of traffics on the railways—but de-rating has long since disappeared from industrial rating. It is a good many years since industry had the advantage of de-rating. It has gone now, but it is still retained as one of the major elements in estimating the contribution which the railways and the other authorities are liable to make to the expenses of the local authorities.

De-rating is still one of the factors in assessing liability, and this illustrates the fact that this method of rating transport authorities is out of date, and is unfair on the authorities. It should be put right. It should not be extended to the Freight Corporation and some of its subsidiaries. I put this Amendment down for the purpose of raising this point. I do not intend to put it to the Committee, but I hope the Minister will be able to say that the time has come when this system of rating the railways—and these other authorities, including how the Freight Corporation—will be reviewed, and that a system which is fairer and more just to the local authorities will be adopted.

There have been a number of cases in this Bill, and, indeed, in some other Bills passed through your Lordships' House recently, in which the choice arises whether a particular item of expenditure, or any particular expenditure, should rest upon rates or upon the revenues of some other body. When one is faced with that problem, the right answer is that the expenditure ought to rest upon somebody else and not upon the rates. Rates, it has been said many times, are what is called a "regressive tax"; that is to say, the higher they go the greater the hardship on the population that has to pay them. A proposal that some other authority should be relieved of its contribution to local expenditure at the expense of the ratepayers is wrong and ought to be checked. Of course, the ratepayers should make a contribution, but a reasonable one. It is not right that the rates should be used as a means of reducing the financial obligations of other bodies. I hope the Minister will be able to tell us that the whole of this matter will be reviewed and the methods of assessing the contributions of these transport undertakings revised.

2.53 p.m.


The noble Lord, Lord Ilford, has asked whether I can give an undertaking that this present system of a central rating, a block rating sum, which is paid by the transport authorities to the Ministry of Housing and Local Government, will be reviewed. The position is that a general review of the rating of all nationalised industries is at the moment taking place. I should like to repeat a Statement made by my honourable friend, the Joint Parliamentary Secretary, Ministry of Housing and Local Government, in another place, on October 20, 1966. The general principle stated at that time was this: A general review of the rating of nationalised industries, which was started under the last Government, is still actively proceeding, but there remain considerable differences between the Departments, the industries affected and the local authorities. The noble Lord will not be surprised if this is the case. We are not ready yet to propose a fundamental change in the method of valuation and we do not think it is right just to do a temporary tinkering with the formula; there is need for more fundamenal study of it. That will become part of the general review of local Government finance, which is going on in readiness for the conclusions of the Royal Commission".—[OFFICIAL REPORT, Commons, 20/10/66, col. 419.] That was a Statement made in another place, approximately two years ago. Perhaps the noble Lord will be interested in discussions on this subject which have been taking place during the course of drafting this Bill. The framing of the Transport Bill gave rise to three questions in this particular field. I grant the noble Lord completely the point he made, that this is a form of hidden subsidy and the present rating system is of great benefit to the railway authorities. He is quite correct. The problems which arose when we started drafting this Bill, and the questions we had to ask, were these: first, in view of the likely increase in the use of subsidiaries by the Boards, how were properties which have hitherto been occupied by a Board for non-rateable purposes to be treated for rating purposes on transfer to a subsidiary? That is the first question, and I think that was the question asked by the noble Lord.

The second question is this. In view of the hiving off of a part of the British Railway Board's undertaking to National Freight Corporation subsidiaries, how are properties which have hitherto been occupied by the British Railway Board for non-rateable purposes to be treated for rating purposes on transfer to the National Freight Corporation subsidiaries? Thirdly, how were properties which are used for activities in exercise of the new manufacturing powers, given by Clauses Nos. 48 to 50, to be treated for rating purposes?

As the noble Lord may imagine, these were knotty subjects, which led to lengthy negotiations with the Ministry of Housing and Local Government. The settlement reached on the three points were as follows. First, property occupied for non-rateable purposes, and transferred to a subsidiary, should be treated for rating purposes as still being retained by the parent Board and, consequently, falling within the parent Board's block payment. Secondly, property occupied by the British Railways Board for non-rateable purposes, and transferred to the National Freight Corporation, or one of its subsidiaries, should be treated for rating purposes as still being retained by the British Railways Board, and, consequently, falling within the British Railways Board block payment and—this is the important point—an obligation shall be placed on the National Freight Corporation to pay to the British Railways Board its appropriate proportion of the British Railways Board's block payment. Thirdly, property occupied for the purposes of the new manufacturing activities should in no circumstances be treated as non-rateable; that is to say, they are rateable.

Those points may not satisfy the noble Lord completely, but I hope I have shown that the present situation is not going to last in perpetuity, that it is under consideration, and that we have done what we have been able to do, without a more general review, to meet the local authorities' national interest in getting this block system altered.


I am very grateful to the noble Lord for his reply. Naturally, I should like to consider it before I make any comment upon it. May I conclude by saying that I hope the negotiators on behalf of the Government will be inspired by the same admirable principles that the noble Lord has just enunciated? I beg leave to withdraw the Amendment.

3.0 p.m.


Before it is withdrawn, may I say a word? The noble Lord who replied stated that the old basis had been of benefit to the British Railways Board. In actual fact, local government services and the charges have relation one to the other. If you have miles and miles of railway line and an odd station, then on the basis of local authority service the cost to the old Railways Board—or to the Transport Commission before them; and even to the railway companies earlier—was really excessive having regard to what local authorities contributed in providing service for them. The revision which arose later during the time of the British Transport Commission's operation was, I think, justified. There is no real justification for asking any nationalised or even private enterprise authority to pay rates where in fact no service is rendered by the local authority. The only real service that is rendered by the local authority to many of the railway properties in particular arises from police and fire; no normal local authority service is rendered. If that is so, why should they be charged for?


As I understand it, there is no Amendment here and therefore no Amendment requires to be withdrawn. I believe we are discussing the Motion that the clause stand part. I am not sure where we should get to if we adopted the principle that ratepapers could claim exemption if they could prove that they did not receive the services which they desired. May I put this question to the noble Lord: pending this review, can he give any estimate of the increase in the burden on other ratepayers as a consequence of the passing of this Bill? Because, as I understand it, this hidden subsidy will in effect he borne by the ratepayers generally. Somebody has to pay, either the Exchequer or the railway authorities or the general body of ratepayers, and if I have interpreted the clause correctly there will be some increase in the general burden on ordinary ratepayers. Is that so and, if so, how much will it amount to?


I merely wanted to say that the view expressed by my noble friend Lord Lindgren that if an undertaking or a hereditament does not receive any services from the local authority it should not be liable to pay rates is not a view shared generally by people in local government. If it were, surely you would exempt from maternity and child welfare rates the many middle-aged spinsters who are still very active members of our various communities. The rate is based on the general communal advantage which is rendered by the local authority, and is not charged out to a specific person in the way that my noble friend suggests that it should be.

Just in case the opinion has got abroad that the railways pay hardly anything in the way of rates, may I say that the real facts are that they have to pay a basic figure amounting to just over £3½ million a year, and that is adjusted from time to time. The London Transport Board pay £1,200,000, again subject to adjustment, and a similar basic figure of a smaller amount is laid down for the British Waterways Board.

Now it is a fact that perhaps the railways do not pay quite so much in rates as they would if they were assessed like an ordinary household, but this system of the block payment of rates has many advantages. If you have two railway stations three miles apart and one of them is in one local government district and one in another, and you impose a rate upon those bricks and mortar buildings but ignore completely the metal railway line which connects them and which alone makes them viable, then I think there is a lot to be said for it, and I hope that when my noble friend comes to consider this question of local rating he will not necessarily put the whole of the rating burden on the particular pieces of bricks and mortar that are situated in some particular town. I have said that perhaps the railways do not pay quite so much as they would if they were rated in the ordinary way, but we have to bear in mind that the presence of a railway line linking two communities really brings some advantage to those communities.

What we have to face, if we are going to increase the rates on the railways, is that the railways, in due course, will have to put up their fares to workers who are travelling from one place to another, or the industrial concerns within those communities may have to put up the prices of their goods. It is a good thing that the whole rating system is being reorganised and it may well be that some change will have to be made with regard to these transport hereditaments, but I ask my noble friend to bear in mind that if he is going to approach this matter from the point of view that everybody must pay his full share of rates then the landowners, who are at present exempt to a considerable extent, should be very high up the list for that privilege.


I must congratulate my noble friend Lord Ilford on having started such an interesting debate, and I should like to put this point to the noble Lord, Lord Winter-bottom, when he gives a further reply. I was surprised to hear him so readily concede the case to my noble friend that in fact the railways were under-assessed. I remember a few years ago the case put up by the Electricity Council and the Central Electricity Generating Board that the rate burden which they were paying through their block payment was unfairly high, and indeed they succeeded in their case that it was unfairly high. It surprises me, therefore, to hear of another nationalised industry with a not dissimilar national network—because, after all, the transmission lines of the C.E.G.B. are not dissimilar to the railway lines—which is evidently paying so very much less.

The figures the noble Lord, Lord Leatherland, gave I am sure were of great interest to the Committee, and they indicate how much less the railways are paying than the electricity industry—I should think only about one-tenth of what the electricity industry was asked to pay. It surprises me to hear there is so much difference. On the whole, I have always favoured the block payment providing it is enough, because obviously there are enormous difficulties in making separate assessments in each area, and so long as the national block payment is sufficient and is allocated out fairly to the local authorities, that has always seemed to me to be the best way of doing it. I should be interested to hear a further comment from the noble Lord, Lord Winterbottom, as to whether in principle he agrees with that, always assuming that the hereditaments are fairly assessed on a realistic basis. It sounds to me as if the railway hereditaments have not been.


The point raised by the noble Lord, Lord Ilford, is an interesting one. I think noble Lords will agree there are many interlocking factors in calculations of this sort and much history behind a sum such as this and a method like this. As the noble Lord, Lord Ilford, pointed out, de-rating was an attempt in the 1930's to assist the railways and industry as a whole at a difficult time. The Central Electricity Generating Board was perhaps unfortunate in negotiating at a time when the negotiators may have been tougher than they were when the railways first turned to the State for assistance in this field. I would suggest to noble Lords that this is perhaps not the appropriate occasion to question this long-standing arrangement. The whole question of rating of premises of the nationalised industries—and that would include the Electricity Board and other nationalised industries, and other industries with extensive operational networks—is very complex, and we do not think it would be sensible to make any material changes, at least so far as transport is concerned, until conclusions have been reached about possible fundamental changes following the general view of the rating system that is likely to flow from the review of the local government system itself.

We believe that we must leave things as they are for the moment and get this aspect of transport costing right in a wider framework than just this particular Bill. Noble Lords may agree that since the railway negotiators at some time have struck a bargain with the central Government favourable to themselves, this would not be the moment to put an additional weight on their backs when we are trying to produce a situation where they can operate profitably and make a proper return on their existing, or their reduced, capital. I can give the noble Lord, Lord Wade, the assurance that as a result of the proposals in this Bill there will be no increase in the burden on the ordinary ratepayer. That remains as it was before. With this request to noble Lords to consider this point within the wider framework, I hope that the noble Lord will withdraw his opposition.

Clause 152 agreed to.

Clauses 153 to 155 agreed to.

Clause 156 [Short title and commencement]:

3.12 p.m.


With permission, I will move Amendments 316A and 316B together. These are two substantive Amendments in a group of five (the others were to Clauses 112, 115 and 127) intended to modify and redraft the commencement provisions of the Bill. Their purpose was explained by me to your Lordships on Clause 112.

Briefly, it is to alter the identity of the Minister or Ministers who will make the commencement orders for some of the provisions of the Bill so as properly to reflect the Secretary of State's responsibilities. The amendments do not alter the principle that, with the solitary exception of Clause 92, the Bill's provisions are to come into effect on days appointed by Ministers by order. Nor do they alter the timing of the commencement of the Bill's provisions. Nor do they affect their application and administration.

If the amendments are accepted, Clause 156 will bring together all the commencement provisions of the Bill in one place. I beg to move.

Amendments moved—

Page 203, line 39, leave out from ("to") to ("the") in line 40 and insert ("subsection (3) of this section")

Page 203, line 42, at end insert— ("(3) The reference to the Minister in subsection (2) of this section shall be construed—

  1. (a) in relation to—
    1. (i) the provisions of Part II of this Act; and
    2. (ii) any of the following provisions of this Act, namely, sections 34, 36, 37, 44, 56, 112 to 115, 117, 118 and 122 to 126; and
    3. (iii) the bringing into force with respect to the Scottish Group of any provision of this Act which refers to that Group, as a reference to the Mnister and the Secretary of State acting jointly;
  2. (b) in relation to section 127 of this Act and to any section of this Act which relates only to Scotland, as a reference to the Secretary of State.").—(Lord Winterbottom.)

On Question, Amendments agreed to.

Clause 156, as amended, agreed to.

Schedule 16 [Supplementary or consequential provisions]:

LORD DRUMALBYN moved Amendment No. 316C: Page 257, line 43, after ("Corporation") insert ("in relation to railways of theirs").

The noble Lord said: I am not certain whether this Amendment is necessary. I hope that it is not—and in view of the indication I am now getting from noble Lords opposite I gather that is so. Therefore I can state the point very briefly. Paragraph 1 of Schedule 16 gives the Freight Corporation power to make by-laws in relation to all railways of the Freight Corporation. Presumably, these will be railways under the Corporation's control in connection with freightliner services. I had hoped that paragraph 4, which does not specifically limit the power to make by-laws to the railways, would by implication do so. In order to make the point clear, I am moving to insert the words "in relation to railways of theirs". I think that the point is quite clear. I am sure that it is not the intention that the Freight Corporation, which is in competition with private road hauliers, should have powers to make by-laws, fine people and all the rest of it in relation to road services. I beg to move.


I believe that the noble Lord, Lord Drumalbyn, is clairvoyant. He must have read my brief across the Table. He is quite correct. It would be highly undesirable to give the National Freight Corporation a by-lawmaking power which could not be applied by their commercial competitors. This is certainly not the intention of the Bill. It is a valid point which we accept. But the Amendment is unnecessary because its effect is already achieved. The power to be given to the N.F.C. to make by-laws is confined to "their railways"; that is to say, to the railway premises which they will be taking over—for example, the sundries depots—and nowhere else. We agree that this feature must be watched.

But the Amendment also has one negative and undesirable feature. It could, as it stands, have the untoward effect of giving the Railways Board and the London Board power to make by-laws affecting N.F.C. railway premises. But this is probably not intended; and it is certainly not intended by the Minister.


I am grateful to the noble Lord for his explanation. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Schedule 16 agreed to.

Schedule 17 [Application to Northern Ireland]:


Amendment No. 317 is a drafting correction. There is no reason why the present Clause 49(5) should not apply to Northern Ireland. I beg to move.

Amendment moved— Page 262, line 2, leave out ("49(5)").—(Lord Stonham.)

On Question, Amendment agreed to.


I beg to move Amendment 318 and Amendment No. 319. These are both drafting corrections, following the transfer of functions of the Minister of Labour to the Secretary of State for Employment and Productivity earlier this year. I beg to move.

Amendments moved— Page 262, line 27, leave out ("Minister of Labour") and insert ("Secretary of State for Employment and Productivity") Page 262, line 40, leave out ("Minister of Labour") and insert ("Secretary of State for Employment and Productivity").—(Lord Stonham.)

On Question, Amendments agreed to.

Schedule 17, as amended, agreed to.

Schedule 18 [Repeals]:

3.18 p.m.

LORD NUGENT OF GUILDFORD moved Amendment No. 319A:

Page 263, line 32, at end insert— ("In section 53(2) in paragraph (a) the word "and" and paragraph (b). In section 53(4) the words "paragraph (b) of subsection (2), or"").

The noble Lord said: Amendment 319A looks insignificant, but its effect is of very great significance to the coastal shipping industry. The purpose of the Amendment is to continue in existence the safeguard against unfair under-cutting by the railways, a safeguard which has existed in one form or another for the past forty or fifty years. The justification for a safeguard rests, on the one hand, on the value of coastal shipping to the national economy, and, on the other, to its special vulnerability to competition by rail. Rail has a national network of routes compared with coastal shipping which, naturally, is limited to a relatively small number of routes between the existing ports. Obviously, it would be possible for rail to quote uneconomically low rates between the ports in order to undercut coastal shipping and win the traffic and, of course, carry the loss on the rest of its nation-wide system.

The 1962 Act, which at present governs the position, continued the safeguard which coastal shipping had enjoyed for the previous forty years. The safeguard consists of a right of appeal to the Minister where the coastal shipping industry considers that rail competition amounts to unfair competition. In practice, this right has been very rarely invoked; its presence on the Statute Book has been a sufficient safeguard. But Section 53 of the 1962 Act, which contains the safeguard, includes a condition that the safeguard can be invoked only if the railways are in deficit. Although this Transport Bill now before us continues the provisions of Section 53 of the 1962 Act, by subsection (8) of Clause 41 it specifically terminates the making of deficit payments. Thus, as the Bill now stands—I heard a note of approval from the opposite Benches—the coastal shipping industry would be deprived by this technicality of its right of appeal to the Minister. The effect of my Amendment is to remove from Section 53 of the 1962 Act the condition requiring the railways to be in deficit before an appeal can be made, and thus to restore to the coastal shipping industry the safeguard that it has had in the past.

I referred to the ending of deficit financing as a technicality, because, in fact. British Railways continues to be dependent on public funds to a massive extent, as is provided in this Bill. Therefore, I suggest it would not be a good argument for the Government to advance that, since the railways are now not to be dependent on deficit financing, there is no case for this safeguard for the coastal shipping industry to continue. I suggest that the true perspective is that this Bill is providing very large sums of public money to put the railway finances in a healthy condition, and that for the railways then to use their strengthened position to undercut coastal shipping would clearly be against the interests of the national economy. I further suggest that, even if this safeguard had not existed in the past, it would be justified and necessary now.

The case does not rest alone on the need for a fair deal for the interests of coastal shipping, although, in my judgment, that would be a strong enough case; it rests squarely on the interests of the national economy. The Government White Paper, The Transport of Freight, recognises in paragraphs 70 and 71 the importance of coastal shipping in the national economy. I should like to quote the last few words of paragraph 71: The Government recognises the contribution which coastal shipping can make to the national transport system and accepts the principle that competition between coastal shipping and the railways must be fair. Fair enough. All that my Amendment would do would be to make sure that that intention was carried out.

I should like to say just one word about the value of coastal shipping to the national economy. It is set out in some detail in the White Paper. Coastal shipping carries a significant part of the total freight on the longer hauls; altogether some 16 per cent. of the total freight carried in this country on a ton-mile basis, compared with 22 per cent. carried by rail. Secondly, coastal shipping provides an invaluable alternative form of freight transport, especially for the long hauls, when rail transport is upset as it was recently during the work to rule. During that period, the coal freights carried for the C.E.G.B. were largely transferred to coastal shipping and were safely delivered to the generating stations; and, similarly, for the cement industry in the South of England. This is typical of the flexibility of the coastal shipping industry; that it is always available in an emergency.

Lastly, our coastal shipping industry carries a significant part of the cargoes between these Islands and the neighbouring ports in European countries, in direct competition, of course, with the European shipping lines. In this way it contrives to earn for us a quite significant amount of foreign exchange, amounting to something of the order of £5 million a year. So I suggest that this is the picture of a national transport industry in private hands not only working successfully in our domestic economy without the help of public funds, but also earning a useful contribution in export earnings. Incidentally, of course, out of its profits it is making its contribution to the refinancing of our railways. At the present time, when the Government are straining every nerve to get the national trading balance out of deficit and to begin to repay our massive overseas borrowings, to refuse to continue this modest safeguard for this admirable industry would really be the economics of suicide. I feel, therefore, that the case is so strong that it will commend itself to your Lordships. I beg to move.


The noble Lord, Lord Nugent of Guildford, quoted from the White Paper The Transport of Freight, and he was quite correct when he said that it is Government policy that competition between coastal shipping and the railways must be fair. That is the policy of Her Majesty's Government. But when it is said that competition between two units of industry must be fair, it means that it must be fair to both sides. He put forward an excellent case for being fair to coastal shipping, but did not give any indication that his proposals would be unfair to the railways.

Under present arrangements, complaints by the shipping interests of undercharging by the Railways Board are investigated by a suitable person appointed by the Minister, and the Minister may, after considering the investigator's report, give directions to the Board about their charges which were the subject of the complaint. The noble Lord did not mention that the overcharging provision—that is, the one that operates when traffic is going by rail to a port—will remain in force if this Bill is passed in its present form. It is only the undercharging provision which will—in my view, quite properly—lapse with the deficit grant. Since the 1962 Act was passed, only two complaints have been made about undercharging by the railways. One was in 1964, and was about the transport of china clay between Cornwall and Kent. That was when Mr. Marples was Minister, and he directed the Board to increase their rates slightly so as to cover the full cost. The other was last year, when there was complaint about the transport of coal from Yorkshire to Plymouth, and the then Minister, Mrs. Barbara Castle, decided to make no direction. So I think the noble Lord was setting it rather high to suggest, as it seemed to me he did, that there has been a great deal of unfair competition.

I want to make the point that when, under existing arrangements, the demand is made that British Railways must charge the full cost, it is always taken to cover interest as well as direct and indirect costs. Through the undercharging provision, the Railways Board have been obliged to cover the full costs, which includes the apportionment of indirect costs, overheads and interest, of every individual contract and consignment which they have been carrying in potential competition with coastal shipping. This restriction was perfectly justified when the Railways Board were able to cover undercharging out of deficit financing. But with this Bill they cannot do so, because the new financial discipline placed upon the Board will remove the possibility of deficit financing. This will ensure that the Board will not charge uneconomic rates, and will make it essential that the Board should be free from artificial constraint, just as the shipping interests are free from artificial constraint. This is what I mean by "being fair". When this Bill is passed, we shall have two industries which will not he able to rely on deficit financing: first, the shipping industry, and, secondly, the Railways Board; and in those respects they will be operating in competition. In this matter there are no constraints placed on the shipping industry, but the noble Lord is insisting that they should be placed on the Railways Board.

I have found an extraordinary dichotomy among noble Lords opposite when considering matters affecting the railways. The other evening we had the fascinating spectacle of the noble Marquess, Lord Salisbury, coming down and taking part in a debate which took about three hours. That was on the vital question as to whether the Railways Museum should or should not be moved from Clapham to York. In any case, it would have cost the Railways Board money; and noble Lords opposite are absolutely passionate in their demands that any burdens involved should be placed on the Railways Board. But I have noticed that, while they are constantly urging the British Railways Board to act in accordance with normal commercial practice, they are just as constantly moving Amendments to prevent them from doing so. This is another of those Amendments. So when we are talking about being fair, let us be sure that we mean fair to both sides.

Of course, as the noble Lord, Lord Nugent of Guildford, has pointed out, the Government intend to be fair; but we also believe that, with the new financial situation, there will be no unfair competition with coastal shipping. There are, of course, no constraints on the shipowners, who may themselves on occasion (this is normal commercial practice) find it good business to accept traffic at less than full cost, just as road hauliers do—and there are no constraints on them. The Railways Board are not in a monopoly position. The noble Lord referred to the coastal shipping traffic. In terms of ton-mileage, 22 per cent. was carried by the railways in 1966 and 16 per cent. by coastal shipping. The railways are not in any way in a monopoly situation. I ask quite fairly: why should we place on the Board restraints which are not placed on their competitors? I would ask, too: how can noble Lords countenance, let alone advocate, such an injustice?

In opposing this Amendment I want to make it clear that the Government appreciate the importance of coastal shipping to the economic life of the nation, and understand the strong feelings of the shipping industry on this subject. The industry have indeed made strong representations to the President of the Board of Trade and to the Minister of Transport, and it has been agreed by Ministers that, although it is not possible to accept an Amendment to the Bill designed to continue the provisions of Section 53 in relation to under-charging, I can give a firm assurance on behalf of the Government that the Minister will not hesitate to intervene in the future if the Railways Board are clearly introducing completely uneconomic charges in order to damage coastal shipping unfairly.

From the end of this year the railways will be on a real commercial basis at last. The interest burden will be reduced to a realistic level by a revaluation of their assets. It is true they will receive grants for unremunerative passenger services which they are forced to retain on social grounds, but otherwise they will have the very difficult task of conducting their operations on a fully profitable, commercial basis; and on the Board's freight operations there will certainly be no scope at all for uneconomic charging.

In view of what I have said, I hope that noble Lords will agree with me that it would be wrong to continue with this constraint. The Railways Board and the coastal shipping industry have two things in common. They are both in a very difficult competitive situation, and they are both of great importance to the nation. It is the Government's sincere view, after the most thorough consideration of all the arguments which have been put so eloquently on behalf of the shipping industry, that it would not in the long run be right to do anything which prevented these two industries from competing keenly and vigorously, and giving to the country as a whole the full benefit of the lower charges which will undoubtedly follow from modern methods of handling and operation. The paragraph of the White Paper immediately following on that which the noble Lord quoted says: Coastal shipping is included in the scope of the Committee of Inquiry which the Government has set up under the Chairmanship of Lord Rochdale to review the efficiency and competitiveness of the shipping industry, The Government will give close attention to any recommendations about coastal shipping the Committee may make". I should like to make two further points backing what I have just said. First of all, I think the fears expressed on behalf of coastal shipping are exaggerated. The Railways Board will simply not be in a financial position to undertake any uneconomic practices in the field of freight. Moreover, they estimate that, at most, only a quarter of the traffic currently carried by coastal shipping could be regarded as potentially suitable for rail. It is highly unlikely that in fact the railways would be able to secure anything like this proportion—that is, 25 per cent. of the traffic. So much obviously depends on the customers; on their willingness to modify their facilities and equipment.

Secondly, if the Amendment now proposed were accepted it would inevitably result in some goods being carried at prices higher than would otherwise be the case, and I am sure no Member of your Lordships' Committee would wish this to happen. If this Amendment were accepted, and the Board were forced on every individual consignment of this kind to charge the full economic cost, including all the factors that I have mentioned, then they would be restricted, they would be unfairly handicapped, and noble Lords might well come back and say, "This is a publicly owned industry, and it is not doing as well as its competitor". The reason for that would then be, "It is because it is not allowed to do as well as its competitor". I ask your Lordships to agree that the set-up must be absolutely fair—and that means fair to both sides; that they should be on equal terms. Once this Bill becomes law, the Railways Board will no longer be allowed to have deficit financing; and I hope that the Committee will accept that the Government's policy on this important and difficult subject is the right policy and a fair policy.


I am not going to delay the Committee, but I should just like the noble Lord the Minister to admit that, for the second time within a week, the Government have acknowledged that competition is better than nationalised, non-competitive industry.

3.38 p.m.


Having an interest in shipping, I must declare an interest in this matter. The noble Lord, Lord Stonham, has said that competition between the railways and coastal shipping must be fair. But surely if the railways, in order to make a contribution towards their overheads, are allowed to quote freights at rates which do not cover their full costs, this can scarcely be called fair. It seems quite ridiculous that they should be allowed to make contributions to their overheads and yet not cover the expediture which they are incurring.

The noble Lord, Lord Stonham, referred to the relative absence of complaints under Section 53 of the 1962 Act. There were only two. Surely this is every justification for preserving that protection. The fact that the sanction existed has ensured a reasonable balance of fair competition between rail and coastal shipping. To remove that safeguard must surely leave the railways in a position where, if they are going to do their job properly, they should try to destroy the coastal shipping industry, in order to secure for themselves the whole of that 16 per cent. of bulk freight, and, in destroying it, to destroy not only our coastal shipping but our short sea-route shipping. The essence of this Amendment is clear. It is that either we want a coastal shipping industry or we do not. I urge the Committee to adopt this Amendment and to support the coastal shipping industry which has saved us in times of war and of rail strike and which will save us again. It is a major contributor to the balance of payments.


Before the noble Lord sits down, I should like to suggest not only that coastal shipping has saved us in time of war and rail strife but that the converse also has been true.


It seems to me that there is a possibility of the railways seeking to get themselves into a monopoly position in certain areas. As my noble friend Lord Geddes said, it would be quite possible for them to quote rates that the coastal shipping services could not meet by simply quoting rates which make no allowance for their overheads, or a very small contribution to overheads—certainly nothing at all for the margins which the coastal shipping would require in order to survive. If, by doing that, they were able simply to secure a monopoly position in a certain area, they would have contributed to what I imagine would be the purpose of this Bill, up to a point, which is to transfer freight to the railways; but they would be doing it at the expense of the coastal shipping industry and they would be doing it in a way which would achieve a monopoly position for themselves and which would enable them in future to quote higher rates. So it is not sufficient to say, as the noble Lord has said, that the effect of the Amendment would be that some goods would be carried at prices higher than otherwise. He should have added "for a time". After that, if the railways were in a monopoly position, that would come to an end.

There is another point which struck me about what the noble Lord said. He sought to reassure the Committee by saying that the Government appreciated the importance of coastal shipping services in the economic life of the nation and that the Minister would not hesitate to intervene if the railways quoted uneconomic rates. But how is the Minister going to intervene? Section 53 of the Transport Act gives the Minister power to intervene on the condition that a subsidy is being paid to the railways. Section 53(4) says: Provided that this subsection"— that is, the one that gives the Minister Power to appoint an investigator— shall not apply to a complaint if it appears to the Minister that he has no power to give a direction upon the complaint by reason of paragraph (b) of subsection (2) … So he will not be able to appoint an investigator. He will not be in a position to intervene. The noble Lord has not explained this sufficiently. All that we ask is that the Minister should have the power to intervene and to investigate and, if necessary, to put the matter right. Nothing more is being asked. There is no question of discrimination or of more favourable treatment being asked for one side than for the other. All that is being asked is that the railways, which are in this unique position, because in some cases they may have a monopoly of the carriage to the port to which the goods are to be transferred by sea—


Why should it be a monopoly?


I said that they "may have" a monopoly. This is one of the points which Section 53 envisages. The noble Lord says that this side of it will remain in operation. But once the Freight Corporation comes into effect, that monopoly may technically not exist, because the goods could be transported by the Freight Corporation which would have the option of transporting the goods either by rail or by road. Therefore that part also of Section 53 might not operate. The other side of it is the charges for the carriage of goods by rail made by the Railways Board in competition with coastal shipping. There it is a condition of the Minister's being able to entertain a complaint, that a grant out of money provided by Parliament has been or is likely to be made under this Act to the Railways Board to meet a deficit on revenue account for the year in which those charges are made". Now that no overall grant is to be made, that falls; it is going to be impossible for the Minister to intervene.

I would add this. As a matter of equity, the amount of railway capital that is being written off in this Bill must be taken into account. That is, after all, the counterpart of an annual subsidy. I do not know how one can calculate it: but £705 million of suspended debt is being written off. Admittedly, no payment is being made at the present time, but if the railways become more prosperous then, but for this Bill, those payments would become due again. Then one must add the £75 million that is being written off in this Bill. If you take the two together and calculate it at 5 per cent., you get something like £40 million of annual subsidy. This is a matter which ought to be considered. A very large sum is being written off with one stroke of the pen, with the obligation to pay the interest on it being written off at the same time from year to year. The railways, to that extent, are being put into a better position than they are now to compete with coastal shipping.

Let us suppose that they were to use that, as they could, in a discriminating manner to quote lower rates to secure a monopoly on certain services. The noble Lord said they could do that on only a quarter of the coastal shipping traffic; but the loss of a quarter of the traffic carried by coastal shipping would be severe. If they were to do that, then, surely, in those circumstances it would be reasonable for the Minister to intervene. The noble Lord said that he will intervene. We ask: How can he intervene effectively and why should not the present provisions of Section 53 of the 1962 Act remain?


The noble Lord, Lord Drumalbyn, has just proved what I have suspected all the time: that he has a very weak case and that therefore he has to dredge up from the depths of the early 1950's the question of railway losses and the interest they ought now to be paying. The noble Lord is shaking his head; but if I wanted to delve back to that, I could point to acts of the Party opposite when in power which contributed directly and immediately to building up the railway losses—for example, hiving off the profitable parts of the industry—which were done by Acts of Parliament by noble Lords opposite. It does not lie in the noble Lord's mouth now to say that we ought to charge the railways all over again because of the follies of the Party opposite.

I wish the noble Lord, Lord Geddes, had spoken for a little longer, because I should have liked to learn whether he had any evidence of the past which would point to the likelihood in future of the railways acting in the manner he fears. When I said there were only two examples, he agreed with me, but said, "Ah yes, but think in how many cases the Railways Board might have undercharged if they had not had these restrictions. "If that were so—and now we are talking about the position which has been operating in the past—you would expect the shipping services of British Railways to be showing a loss; certainly not to he showing a profit. But nothing could be further from the truth. The trading results of the shipping services of British Rail, which are published separately in the Annual Report and which noble Lords can see for themselves, show that they operate on a profitable basis. There is no question here of cross-subsidisation or of British Rail embarking on any shipping activities at uneconomic rates. Indeed, the general manager of the Shipping and International Services Division of British Rail has made clear that the rates which are being charged, in particular for the new container services, are in no sense uneconomic; they are extremely keen rates.


May I interrupt the noble Lord a moment to qualify a point? The noble Lord is talking of the shipping services of British Rail; we have been discussing coastal shipping. I think the accounts of the Coastal Shipping Service relate almost entirely to their cross-Channel services and very largely to their passenger services. We are discussing the coastwise movement of freight in Great Britain.


I am talking about the accounts of British Rail, and of course I know that we are comparing the coastal shipping traffic of British Rail with coastal shipping services which are not owned by British Rail; that is the comparison we are making and I am perfectly well aware of it. In British Rail shipping services the coastal traffic is included. That is why I said there is no suggestion of cross-subsidisation. The noble Lord is aware that new container services are included in the British Rail shipping services. Therefore it is perfectly fair for me to say that these are British Railway shipping services. They are making a profit; they are being run economically and on proper lines. Therefore, what grounds are there for suggesting that they are not likely to cover their proper costs, since they have already been doing so and are doing so, and because they have this compelling need to make their services pay? The noble Lord also said—I took his words down—that either we want a shipping industry or we do not. We very much want a shipping industry, and Government policy has constantly been directed to that end. Does the noble Lord wish to interrupt me?


If I did not say "coastal shipping industry" it was a slip of the tongue. We were discussing coastal shipping and I thought that I said coastal shipping industry, not shipping industry.


You did.


It is a distinction without a difference. We have been talking about coastal shipping all the time—




All right; I will amend it. If the noble Lord, Lord Geddes, did not say it I will say it for him now. Either we want a coastal shipping industry or we do not, and we very much do want a coastal shipping industry.

To come back again to the point which I made. The noble Lord, Lord Nugent of Guildford, said that we wanted to be fair. I want to be fair. I have been in private industry all my life. I have been in industry for forty years and always I have wanted it to be fair. But always, when I get any kind of insight into complaints by private enterprise industry about something done or about allegedly low prices quoted by something to do with public industry or some Government Department, I find that industry itself is sinning very much in this way. I put it to the noble Lord Lord Geddes, as a commercial proposition. There are in respect of all industries many times when on some contracts you quite deliberately do not recover the full costs according to the definition I gave. Sometimes that is quite sound business because it may help with overheads in other ways. This is what privately-owned coastal shipping can do now. All we are saying is that British Railways, which no longer will be able to rely on the Government to finance any deficit and will have to make a profit, should have the same commercial freedom as coastal shipping.

Your Lordships will know that, under the Home Secretary, I am responsible for prison industries. There we get just this kind of thing. I will not have a prison industry contract or accept one unless it is at a fair market price. But over and over again we get accused of selling at under the price. Quite recently I received a trade union deputation from one of the largest trade unions in the country which was led by a very famous trade union personage. They complained about a particular contract which the Prison Department had been awarded because it was under-price and an uneconomic price had been quoted. The complaint came from a particular firm, and after I had been talking with the delegation for two minutes I said, "The Prison Department did not get the contract. Our price was too high; we were undercut by the same private enterprise firm that registered the complaint." The interview was very brief and it ended with the great trade union official promising full support and understanding. I could duplicate that again and again. This is the kind of example we find is put forward.

All I am saying to the Committee is this. The noble Lord, Lord Drumalbyn, as he was perfectly entitled to suggest, said there was a possibility of the railways trying to get themselves into a monopoly position in certain areas by quoting unfair or grossly unfair rates and that later on they might be able to quote higher rates. It is a possibly conceivable hypothesis, if nobody did anything about it and if everything was equal. It is because British Railways, as is part of their job, have made an estimate of the likely total volume of potential traffic which might be available to them (that is, the 25 per cent. of the coastal shipping traffic I mentioned) that they think that they would not get a lot of it. I cannot therefore see that there would be any areas where they would get themselves into a monopoly position.

Suppose they did. Here I take up what I said about the Minister intervening. The noble Lord is quite right: there is no specific subsection relating to this matter in the Bill, under which the Minister could exercise statutory powers and say, "You cannot do this." But I gave the assurance, and it was a studied and proper assurance, that if this should occur (it is a very important matter because coastal shipping is important; we could not have this sort of thing happening) and if he had any real evidence, which would stand up—not of the kind I mentioned in the example I gave—showing that this sort of thing was happening, and it had the effect of creating the unfair competition which is feared, while the Minister could not call on a particular statutory provision he will, as the noble Lord is aware, have very great influence with the Board in many ways and he would exercise it to see that unfair competition was stopped.

There is perhaps an ideological conflict between us on some matters, but there should be no ideological conflict here. I know that noble Lords opposite can outvote the Government if they make up their minds to do so, but the case is not proved on justice. All we are asking for here is that when this Bill is passed the British Railways Board should no longer be placed in an unfair position with regard to this kind of competition but that it should be fair to both sides, coastal shipping and the railways, and that they should go forward in competition together.


I thank the noble Lord, Lord Stonham, for exerting himself to answer the debate in the way that he has; and I must congratulate him on the ingenuity of his arguments, trying to put us in a position where it looks as if we are putting constraints on British Railways, a nationalised industry, which we should not accept for a private industry. However, I do not think the charge sticks. This is, of course, a matter of balance. Whereever we sit in the Committee, we well know this. We on this side of the Committee support British Railways, and have supported the measures which the noble Lord wishes to put on the Statute Book to put their finances in a healthy position, because we know that it is in the national interest that they should succeed.

We feel, however, that there is some continuing obligation on the railways to recognise the position of coastal shipping, because of the massive public finance which the railways are receiving, and because of the peculiar position of coastal shipping. Here I would say that the 25 per cent. which the noble Lord says is all that is at risk could, I imagine, be absolutely crippling if it were lost to coastal shipping. Therefore, it is of the greatest importance to coastal shipping. Perhaps I may remind the noble Lord of what has been done to refinance the railways. In the 1962 Act (the noble Lord was hardly being fair to us) the position was that we wrote off £400 million of capital debt: we wrote off an additional £300 million for deficit financing; that is, a total of £700 million. In addition, we suspended another £700 million. So that our record for setting out to help to put the railways in a healthy position is not a bad one.

Now this Bill removes the suspended £700 million completely, plus another £500 million-odd; in other words, £1,300 million is taken off the railways' back by this Bill making altogether getting on for £2,000 million of public money. There must be some obligation on an industry receiving this amount of public funds to see that its trading arrangements are not damaging to some other industry which is in competition with it. I should have thought that any fair man would say that there should be some form of appeal. After all, what we are asking for is not something that will be a serious restriction. It is only a right of appeal to the Minister at the end of the day; and the Minister will not agree to that appeal unless he thinks there is a sound case.

When the noble Lord says that the Minister is willing to act if coastal shipping is in a dangerous position, I should have thought that the right thing to do was to put it in the Bill. The noble Lord has had to admit that the Minister has no statutory power to act. All he can do is to exert his influence, and if the Chairman of British Railways told him to "Go to Hell!", there would be nothing that the Minister could do about it. And it is not a bad thing sometimes for chairmen of nationalised industries to tell Ministers to "Go to hell!", and to say to them: "If you want to interfere with my business, put an Order on me, and let everybody see it. But I am going to run my business in the way that I think is best for the business".

What the noble Lord is saying is that the Minister of Transport should twist the arm of the Chairman of British Railways and tell him to refrain from some action that he wants to take. This, in my opinion, is not the right way to run a nationalised industry. However, the noble Lord is there, and it is for him to decide. The record will show whether or not it is the right way. But all that is by the way. The point is that we feel quite strongly that this should be in the Bill. There always has been some arrangement of this kind. It is, in our

Resolved in the affirmative, and Amendment agreed to accordingly.

4.14 p.m.

LORD NUGENT OF GUILDFORD moved Amendment No. 320:

opinion, the right balance, and therefore I am afraid we must press our Amendment and ask noble Lords to accept that it he put in the Bill.

4.6 p.m.

On Question, Whether the said Amendment (No. 319A) shall be agreed to?

Their Lordships divided: Contents, 89; Not-Contents, 56.

Aberdare, L. Daventry, V. Milverton, L.
Aberdeen and Temair, M. Denham, L. Monsell, V.
Ailwyn, L. Drumalbyn, L. Mowbray and Stourton, L.
Airedale, L. Dudley, L. Northesk, E.
Albemarle, E. Effingham, E. Nugent of Guildford, L.
Alport, L. Emmet of Amberley, Bs. Nunburnholme, L.
Amherst of Hackney, L. Falkland, V. Ogmore, L.
Amulree, L. Fortescue, E. Rankeillour, L.
Asquith of Yarnbury, Bs. Gage, V. Rathcavan, L.
Atholl, D. Geddes, L. Rea, L.
Auckland, L. Goschen, V. [Teller.] Sackville, L.
Audley, Bs. Greenway, L. St. Aldwyn, E. [Teller.]
Barrington, V. Gridley, L. St. Helens, L.
Beaumont of Whitley, L. Grimston of Westbury, L. St. Just, L.
Belstead, L. Hawke, L. St. Oswald, L.
Blackford, L. Horsbrugh, Bs. Salisbury, M.
Bledisloe, V. Howe, E. Sandford, L.
Brooke of Cumnor, L. Hylton-Foster, Bs. Sandys, L.
Brooke of Ystradfellte, Bs. Ilford, L. Sempill, Ly.
Buckton, L. Jellicoe, E. Somers, L.
Carrington, L. Jessel, L. Strange of Knokin, Bs.
Clitheroe, L. Lambert, V. Strathclyde, L.
Clwyd, L. Lucas of Chilworth, L. Stuart of Findhorn, V.
Colgrain, L. Lyle of Westbourne, L. Swinton, E.
Conesford, L. McCorquodale of Newton, L. Teviot, L.
Cork and Orrery, E. Mancroft, L. Teynham, L.
Craigavon, V. Margadale, L. Thurlow, L.
Cranbrook, E. Merrivale, L. Vivian, L.
Crathorne, L. Meston, L. Wade, L.
Mills, V. Wolverton, L
Addison, V. Hunt, L. Royle, L.
Archibald, L. Kennet, L. Sainsbury, L.
Beswick, L. Kilbracken, L. St. Davids, V.
Bowles, L.[Teller.] Kirkwood, L. Serota, Bs. [Teller.]
Brockway, L. Latham, L. Shackleton, L.
Brown, L. Leatherland, L. Shepherd, L.
Buckinghamshire, E. Lindgren, L. Silkin, L.
Burden, L. Llewelyn-Davies of Hastoe, Bs. Sorensen, L.
Chalfont, L. Lloyd of Hampstead, L. Stocks, Bs.
Champion, L. Longford, E. Stonham, L.
Chorley, L. McLeavy, L. Strabolgi, L.
Crook, L. Mitchison, L. Strang, L.
Faringdon, L. Moyle, L. Summerskill, Bs.
Gardiner, L.(L. Chancellor.) Noel-Buxton, L. Taylor of Mansfield, L.
Garnsworthy, L. Phillips, Bs. Walston, L.
Geddes of Epsom, L. Plummer, Bs. Wells-Pestell, L.
Henderson, L. Popplewell, L. Williamson, L.
Hilton of Upton, L. Ritchie-Calder, L. Winterbottom, L.
Robertson of Oakridge, L. Wootton of Abinger, Bs.

Page 265, line 1, leave out from ("instrument") to end of line 5.

The noble Lord said: I beg to move Amendment No. 320. The effect of this part of Schedule 18 is to give local authorities power to impose speed limits on all roads in their areas other than trunk roads. At present the law under the 1967 Act requires a local authority proposing a speed limit to obtain the consent of the Minister, and also to consult the chief of police. These existing safeguards have always been considered desirable in the interests of uniformity and of practical enforceability. In all localities there is always a good deal of local pressure for more and tighter speed limits—and I certainly remember that that was so during my days in the Ministry of Transport. Local authorities may well find it difficult to resist these pressures without the police and the Minister behind them.

If we are to avoid the development of a network of new and differing speed limits, most of them unenforceable, some safeguard is needed here. If this happened, it would be confusing to drivers, and, in my judgment, more likely to increase the dangers of the road than to reduce them. My Amendment would leave the existing safeguards of ministerial approval and consultation with the police. I beg to move.


I fully appreciate that motoring organisations are afraid that local authorities will not be able to resist considerable local pressures for low-level speed limits. I do not share those fears, but even if they were justified I should not have thought it was any reason for this Amendment. After all, people in the localities, in the villages—and here we are talking particularly, not about principal roads, but about secondary roads—are the ones who are most concerned about the dangers of too much speed. They are the ones who are likely to be killed or injured on the roads, and I think that in such circumstances local authorities ought to be in a position to take action in this connection, and also—because not only speed limits are concerned—in other traffic and engineering matters without the over-long delays which often arise under the present system. However, I rather think that the noble Lord did not give enough emphasis to the fact that what he is proposing is to retain these procedural provisions in duplicate. After all, Sections 73 and 74 of the Road Traffic Regulation Act 1967 are already in effect in the proposed new Sections 84A to 84D which are set out in Schedule 14 to the Bill.

So far as provisions for ministerial consent are concerned, we are proposing that local authorities must still obtain ministerial consent to orders connected with speed restrictions on principal roads, and they must also still obtain the Minister's consent when they wish to impose speed limits of less than 30 miles an hour. It is proposed that ministerial control over speed limits should be relinquished only on roads for which local authorities are responsible. That seems to me eminently sound it every way.

There are three main reasons for giving up this degree of ministerial control. First, it fits in with the general Government policy of giving more responsibility to local authorities—that is what noble Lords opposite were asking for or Monday, Tuesday and Wednesday, and I do not know why we should suddenly get a different set of circumstances to-day—I suppose that it does not fit the particular shoe; or perhaps the shoe pinches on a different toe on a different day of the week. Secondly, the present arrangements result in what we regard as cumbersome centralisation and administrative delay in approving speed limits. It has often been condemned here—indeed, I have condemned it myself—and these delays could be reduced if part of the work were taken over by local government.

The third reason for relinquishing ministerial control in part is that it is difficult to pretend that speed limits differ very greatly from other measures of traffic regulation, which are often quite as contentious.

But we have still retained a number of important safeguards and I would be grateful if the noble Lord, Lord Nugent of Guildford, would consider them. First, we are restricting the proposal to non-principal roads. Limits on all main roads will still need the Minister's consent.


Would the noble Lord make clear if he means trunk roads when he says "all main roads"?


All principal roads; apart, of course, from the limits of less than 30 miles an hour, where the Minister's consent will still be required. Public notice must still be given. That will be specified in Procedure Regulations. The police must be consulted—that is another safeguard. The Minister retains default powers which he could use in the case of any councils who may take an unreasonable line on speed limits, either by setting them too high or too low. Again, the Minister's powers will be relinquished only in respect of those local authorities who at present make speed limit orders. These are the larger authorities, for example the Greater London Council, county councils, county and London borough councils and other councils with a population of 20,000 or over. Even within the present structure of local government, such councils should be able to withstand any local pressure for unduly low limits and the Government are sure that they will exercise their new powers responsibly. We expect, as a result of proposals still to come forward, that the tendency will be to yet larger local authorities, which will be even better able to withstand pressures of that kind.

I feel we are right here and that this is a sensible division of responsibility between the Minister and local authorities, but it is a new departure and I assure the noble Lord that we intend to keep the operation of these new arrangements under very close scrutiny and the Minister will use his default powers if the need arises.

I might also point out to the noble Lord, although he is probably aware of it, that the new Clause 84B provides the Minister with full power to vary the categories of order for which his consent will be required. This could be used if it is found in practice that local authorities generally are introducing unrealistic speed limits. The Minister will be able, by order under subsection (3) of Clause 84B to reimpose the requirement for his consent to new speed limits, either generally or on classes of roads other than principal roads.

I hope with these safeguards the noble Lord will feel that this system should be given a fair and extended trial.


This is a mild form of devolution that is being proposed by the Government, hedged around with all sorts of safeguards and powers for it to be repealed without coming back to Parliament. It is a very tender plant. It is rare for the Government to produce plans for devolution, and I hope the Conservative Front Bench will not smother this small one which might lead to bigger things in the future.


I sincerely hope the noble Lord will change his mind and, if possible, change the mind of his right honourable friend, because I feel this is a question which has caused a great deal of danger on the roads for some time.

When this question was discussed, a good many years ago now, I pointed out the absurdity of the possibility of having a railway which had a different system of signalling for each county through which it passed. The same applies to the roads: we must have uniformity. As to the matter of speed limits—and I may say I am not at all against speed limits—I agree that they are entirely necessary and we must, by some means or other, see to it that they are more strictly observed. But the question as to whether or not one should have a speed limit on a certain stretch of road is one for the experts to consider.

We must get away from this entirely amateur view of road regulations which one is likely to get from local government, with due respect to them, because they are not expert motoring authorities. It is no use just saying that because one has had an accident at a certain spot the cure for it is to impose a speed limit. The cause may not be speed at all: it may be the construction of the road, it may be the meeting of two streams of traffic. It is not necessarily speed and only the expert motoring authority can say whether it is or not, and what the speed limit should be. Therefore I feel it is essential that we should have uniformity of traffic regulations throughout the country.


Would the noble Lord allow me to interrupt him? Is he aware, first, that this change affects only the lesser roads and that the principal roads will still be under the jurisdiction of the Minister so far as consent is concerned, so that any overall comments which the noble Lord has made in that regard do not arise.

Secondly, on the lesser roads with which the local authorities would be concerned, surely injury or death at particular spots on the road or at particular junctions are matters in regard to which the local authority should take notice of the views of local residents? Although speed is not the only thing which causes accidents it is a factor in a great many of them.


One may be a resident in a place all one's life and still not know anything about the fundamental causes of road accidents. When the noble Lord says "principal roads" is he referring to all A class and B class roads and that the local authorities will only be responsible for the unclassified roads?


I hope my noble friend will not allow himself to be wooed by the seductive appeals of the noble Lord, Lord Somers, who pleads for uniformity. What does that mean? It means 70 miles an hour everywhere, and surely we do not want that?


I cannot let that pass. I did not mean anything of the sort. I meant uniformity of choice, and of regulation as regards speed limits.


If the noble Lord wants uniformity, the Minister's consent will be required for all trunk roads and also for the very important principal roads. The trunk plus principal road network is a very large one, roughly equivalent to the old A class roads, to which the noble Lord referred. There will be uniform standards on all those. It is the lesser roads below that level about which we are now talking. The roads where there will be uniformity will be roads of the greatest interest to "through" motorists. The noble Lord must make that distinction.


I do not like this word "uniformity". It sounds too much like what the Russians call "democratic centralism" where you get all your instructions from above. We have the Conservative Peers telling us once again, years after it was originally said, that "The gentleman in Whitehall knows best". Some of us who are involved in local government know that is not always true. Over the last three months I have been involved in an effort to get a 30 mile art hour speed limit imposed for a mile or so on a fairly important road—not a trunk road—in order that we might protect the children who have to cross that road on their way to school, and we think we know far more about it than any Minister who may be sitting comfortably in Whitehall.

I am very glad indeed that the Minister is suggesting that local authorities should have more discretion than they have at the moment. I have been involved in many such incidents as the one I have just described. We found that there has been unanimity in the neighbourhood about the dangerous nature of some particular spot, either because of a cross-road or a school or a hospital or something like that, and we have put our unanimous view forward to the Ministry; the try has sent down an inspector from foreign parts who knows nothing about the neighbourhood or the amount of traffic or the number of pedestrians, and he has just turned us down out of hand. I sincerely hope that my noble friend will get the support of the Committee on this occasion.


This relatively small point has developed into quite a debate. I must thank the noble Lord, Lord Stonham, for having taken such care in answering the points. I thought he was on rather shaky ground in teasing us for keeping ministerial control over local government here, when he was advocating the reverse process. He reminded us that on previous occasions we had asked for greater freedom for local government. It may be that we have changed our position on this, but so has he. But if he is willing to trade the freedom of the Passenger Transport Authorities against the freedom of the local authorities here, I will be very happy to do a deal and gladly give him this one; but I rather suspect that he will still wish to keep control over the P.T.A.'s by the Minister.

My noble friend Lord Somers is absolutely right; the setting of speed limits is an expert job, and while my noble friends and I certainly want to see local authorities playing a greater part in developing traffic engineering control over the roads of their counties, we also want to make sure that speed limits are fixed by experts. The noble Lord, Lord Leatherland, said passionately that the local people know best. How often I have said that myself—and we all say that. But let me remind the noble Lord of the history of pedestrian crossings, Pedestrian crossings, which seemed an admirable safeguard for pedestrians crossing the road in villages and towns, proliferated to such a dramatic extent about 15 to 20 years ago that the noble Lord, Lord Stonham, who has a very good memory, will no doubt recollect that finally they were simply not being observed anywhere, there were so many of them. The result was that far from being an added safety they had positively become a danger, and the Government of the day—this was the noble Lord's Government—had to take drastic action and reduce them by two-thirds to one-third of their previous number. That was the position when we started off the 'fifties and that is what we have stuck to.

With all these safety arrangements you must be extremely cautious and economical, because if you proliferate them all over the place they are not observed and rapidly become unenforceable. Although the danger is not as serious as with pedestrian crossings, speed limits also could rapidly become unenforceable. In the last twenty years local authorities have learned a good deal more about road traffic arrangements and road engineering. I hope the noble Lord's confidence is justified and that local authorities could take a bigger hand. When the noble Lord tells us these are only the lesser roads this is not quite true. The trunk roads are the exceptions. The lesser roads are the A and B class roads, and those are the great majority of our roads over which the local authorities will have control. Therefore it matters very much indeed that speed limits should be realistically and scientifically fixed. I want to see this done by the local authorities; I think they should come into this. But I want to see the safeguards used where necessary to make sure that we get the right result. Certainly this is not something to divide the Committee about. We want to see this work.

I am not absolutely sure that the noble Lord was right on one safeguard he mentioned when he said that public notice would still have to be given. It appeared to my noble friend Lord Drumalbyn and me that the public notice procedure now goes. However, I think there are enough safeguards there, especially in the Minister's ultimate power on default, to make the experiment justifiable, but I would again remind the noble Lord of the unhappy history of the pedestrian crossing. We do not want that experience again. I hope that wise advice will be given and that the local authorities will be helped all they can be to make a success of this.


The public notice procedure will continue and will be dealt with under Procedure Regulations.


I thank the noble Lord; we had not discovered that when we looked at the 1967 Act. I think noble Lords on all sides will be very glad to hear that the public notice procedure continues; I think it should. I think the safeguards are sufficient, although it is a little experimental. If the noble Lord will take note of our anxieties, we wish the experiment the best of luck, and I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

LORD STONHAM moved Amendment No. 321: Page 265, line 10, at end insert ("and the words from "(except" to "39(3))."

The noble Lord said: I beg to move Amendment No. 321, and do so formally because it was discussed on July 23 with Amendment No. 302. I only rise, since this is the last Amendment and I think we have come through nearly 70 hours of continuous discussion in Committee on this Bill, to thank noble Lords in all parts of the Committee for their cooperation and kindness while we have been discussing this very large and important Bill. I think we have done a useful job on it together. We have been left with some disagreements which I trust we shall endeavour to resolve when we resume on October 7. There may be one or two points left, but I have no doubt that at the end of the day we shall come through and pass the Bill.


May I reciprocate Lord Stonham's remarks? And may I also congratulate him on his very able handling of this large and complex Bill which he suddenly found landed on his plate about halfway through, in addition to a number of other Bills. We thank him for his patience in dealing with the points we have made. I would say that from this side we have done our best to improve a large and difficult Bill, and we hope we have made a useful contribution.

On Question, Amendment agreed to.

Schedule 18, as amended, agreed to.

House resumed: Bill reported, with the Amendments.