HL Deb 25 November 1969 vol 305 cc1213-23

4.10 p.m.


My Lords, on behalf of my noble friend Lord Shepherd, I beg to move that this Bill be now read a second time. Many noble Lords will recall the interesting debate we had in June on the Transport (London) Act which I introduced as a Bill for the Government. That Act provides for a radical and far-reaching reorganisation of the whole of London's transport system under the strategic control of the elected body responsible for the affairs of Greater London—the Greater London Council. The most important single element in this reorganisation is undoubtedly the transfer to the Council of the major part of the London Transport undertaking itself. Although there was some difference of opinion about certain of the provisions of the Act, the general feeling of your Lordships' House was that it was a very worthwhile piece of legislation. The Bill which we have before us to-day supplements the Act and will ensure that the transfer of London Transport can be completed in the very near future. I am sure that it will be helpful if I outline briefly this afternoon what this measure does and the factors which have led up to its introduction.

The Transport (London) Act provided for 90 per cent. of the existing London Transport Board's capital liabilities to the Minister to be written off. The remaining 10 per cent. of capital debt, amounting to some £26 million was to be divided between the Greater London Council and the National Bus Company in the same proportion as the existing Board's assets were to be split between the new London Transport Executive (the body which under the G.L.C.'s policy control is to take over the tubes and central buses) and London Country Bus Services Limited (the National Bus Company's subsidiary which will run the country buses and Green Line coaches). The Act also provided for the new Executive to take on a debt to the G.L.C. equal to the G.L.C.'s debt to the Government.

In practical terms, the effect of this Bill will be to relieve the new Executive of interest payments of some £1¼ million per annum, and the National Bus Company of some £25,000 per annum. The bus services which the N.B.C.'s subsidiary is to take over will certainly run at a loss in 1970, and, in addition, many of the buses are old and will have to be replaced before long. It therefore seems to the Government that there is every reason for taking this opportunity of affording them some limited measure of financial relief. The primary purpose of the legislation, however, in writing off the remainder of the London Transport Board's capital debt, is to eliminate the interest burden on the new Executive. If your Lordships will bear with me, I shall explain briefly why we have brought in the Bill.

Throughout the discussions which successive Ministers of Transport (first, Mrs. Barbara Castle who is now the First Secretary, and then Mr. Richard Marsh, the right honourable Member for Greenwich) had with the Greater London Council, both sides have been fully aware of the fact that a pre-condition of the transfer of London Transport to the Council was that the undertaking should be viable on handover. Viability had been defined by the Government and the G.L.C. as the new Executive's ability to put at least £2 million to general reserve in its first year of operation, and thereafter to maintain the reserve at least at that level. The 90 per cent. write-off of the London Transport Board's capital debt to the Minister provided for in the Transport (London) Act would have relieved the Executive of interest payments of some £11 million per annum. This write-off, together with the fares increases introduced on the Board's buses and tubes on September 7 this year, were, according to the information available at the time the Act was before your Lordships last June, adequate and sufficient measures to meet this viability objective. These measures had been formulated on the basis of the financial estimates originally produced by the London Transport Board the previous autumn, and verified as late as last May. It is commonplace to state that estimates are by their very nature always subject to revision and variations, but this does not alter the fact that these were the best available while the Transport (London) Act was passing through Parliament. The measures were designed to close the viability gap as we then saw it, as precisely as possible, without allowing for possible adverse changes in the estimates. This was done quite deliberately, as the Government considered that additional measures could not then have been justified. It would surely have been wrong to ask Parliament to sanction the imposition on the taxpayers of greater payment than seemed necessary. So there could be no question at that time of a larger capital write-off. And secondly, there was no point in asking people using London Transport to pay higher fares so long as the viability objective did not require increased revenue in 1970 beyond that already to be raised by the higher fares planned for introduction on September 7.

This remained the position up to the time that the Transport (London) Act received its Royal Assent. Thereafter three factors combined to alter the basis on which the estimates had been drawn up. The first was the increase in National Insurance contributions to be paid by London Transport from November 3. Noble Lords may remember the statement about the increased benefits and contributions made by my noble friend Lady Serota during our Second Reading debate on the Transport (London) Act. The second factor was the wages settlement which the Board reached on the actual date of Royal Assent, July 25, on busmen's wages, and which, as finally negotiated, turned out to be higher than the Board had estimated the previous year. The third factor was the Board's re-assessment of its estimates of costs and traffic trends as it fed in the figures for the number of passengers carried on its services during the summer months. The combined effect of these three factors was to reopen a viability gap.

If the Government intended to honour the agreement with the G.L.C.—as they have done—it was clear that further measures were needed to improve London Transport's revenue position in 1970. Discussions were thus reopened with the Council, as a result of which the Government decided that the most appropriate measures to take in the circumstances would be to write off the whole of the London Transport Board's capital debt to the Minister, thus enabling the new Executive to start its existence with a clean slate, and to bring in the limited fares increase on the Board's buses in the outer area of London before the end of this year. The G.L.C. were satisfied that these measures would ensure the viability of the Executive in 1970.

I do not think it would be useful to enter into a detailed account of the negotiations with the G.L.C. which led the Government to propose these further measures. But, if I may digress somewhat, I should like to stress that the limited fares increases, unpopular as they are bound to be, was the sole option open to the Government once the additional write-off had been settled on. The only other alternatives would have been widespread cuts in London Transport's less economic services or some form of Government guarantee of London Transport's financial position over the next few years. The Government felt that they had to reject both these courses. The first would have meant a totally unacceptable cutback in London Transport's pattern of services which it would not have been practicable to reverse for some time to come. This would hardly have been appropriate just before the new Executive charged with providing or securing the provision of such public passenger transport services as best meet the needs of Greater London had been appointed, and had had an opportunity to consider what the right pattern of public transport services for the capital actually was. Nor could we at any time consider seriously the second alternative, which would have entailed the totally unacceptable situation of the Government's underwriting an organisation over which it had no control other than in certain very limited fields concerned with national rather than London Transport policy. I should add for the information of noble Lords that the Minister's approval of the fares increases requires no legislation, as the powers are contained in the Transport (London) Act. My right honourable friend has already given the Board formal approval to implement the increases, and these are expected to be brought in before the end of the year. My Lords, this very short, straightforward piece of legislation will enable the finishing touch to be put not only on the transfer of London Transport but on the reorganisation of the whole of London's transport system. It is on this note that I would commend it to your Lordships' House. I beg to move.

Moved, That the Bill be now read 2a.—(Lord Winterbottom.)

4.20 p.m.


My Lords, may I thank the noble Lord, Lord Winterbottom, for moving the Second Reading of this Bill and describing to us its intentions. My remarks on it will be brief. We had the opportunity to discuss the original London Transport Act, as it now is, in some detail during the summer, and on that occasion it was approved by your Lordships on all sides. Therefore it is not necessary to go into much detail here this afternoon.

As the noble Lord has told us, the basis of the transfer from Her Majesty's Government to the G.L.C. was to be the solvency on trading account, plus £2 million to the reserve in the first year. This basic condition, as the noble Lord has explained, was incorporated in the original Act. The noble Lord has frankly told us the slightly sad story of what has happened in the ensuing three months, and how quickly those forecasts have become out of date. It is a sad little tale of official forecasting—either that, or a reflection on the economic instability in which we are now living, for which the Government have some responsibility.

I would not criticise London Transport or the Government for the lower revenue forecast on account of the deterioration of traffics. That is extremely difficult to predict and, in any event, is a trend which is beyond their control—it is due to much more deep-seated causes. With regard to the higher cost due to the wage settlement, which happened to be concluded on the day the first Act was given the Royal Assent, I should have thought that Her Majesty's Government and London Transport might have been aware that that was coming along, and similarly in the case of the higher contributions to the National Insurance Fund. The Government must have known that those things were in the pipeline, and I should have thought that they might have provided for them. But there it is; they did not.

Quite rightly, having discovered that these fallacies in their forecasts have falsified the original basis of agreement with the G.L.C., they now have no alternative but to come forward with fresh legislation in order to put the matter right. I do not know, but the noble Lord implied that there have been certain promptings from across the river, in County Hall. In any event, the Government have now entirely fulfilled the basis of the original agreement in this Bill by writing off the further £26 million of the original capital debt of London Transport and by the Minister's own powers in providing for the fare increases in the outer areas. Neither of these measures are ones which we like. We do not wish to see the taxpayer having to stand a further £26 million written off, nor do we like to see the fare increases. I entirely agree with the noble Lord that the alternative of making a serious reduction in the quality of the services would have been a complete mistake, and that in a choice cf evils this was the right thing to do in order to get London Transport, in its new constitution responsible to the Greater London Council, off to a good start.

There are two small events which have happened since we put the original Act on the Statute Book and to which I should like to refer. I think I can just bring the first within the terms of this Bill. It is the appointment of the Chairman of the new London Transport Executive, whose salary will—at any rate partially—be paid for by this Bill. He is a very distinguished ex-civil servant, Sir Richard Way. I should like to send him my best wishes in his formidable task. There is a complex of factors in London Transport which, as I said on the Second Reading of the other Bill, presents a most formidable problem of management.

In our last debate I discussed these matters and brought down on my head the wrath of the noble Lord, Lord Geddes, who I am sorry to see is not in his place now. I am bound to say that while I admired the warmth of the defence of his former colleagues, every word that he said went to prove my case that there is a major unsolved problem of management still there. This will fall on to the plate of the new Chairman, Sir Richard Way—and it will require all his powers to deal with the human, logistic and political problems which are bound up in London Transport. He has my best wishes.

There is one other point which is worth mentioning and it is that London Transport have now combined their planning, transport and traffic control by bringing the two chief officers, Mr. Bernard Collins, and Mr. Peter Stott, together into one department. I am sure that this is right. These two activities of planning, transport and traffic control are interwoven, and I am sure that the Greater London Council will get the best direction of policy by combining them in one major department. These functions are extremely difficult, in human, in logistic and in political terms. I believe this is the right approach, and the G.L.C. certainly have my best wishes, and my ready support for the extra money in order to give them the best possible start.

4.27 p.m.


My Lords, may I say just one or two words before the noble Lord replies? I do not think anybody could grudge the money that London Transport are getting. They obviously need it very badly. I sincerely hope that, with that money, they will make London Transport a more efficient service than it has been until now. At the present time, London Transport is, I think, one of the least efficient public transport systems that I have known—and I have known quite a few. It really is discouraging sometimes to go into an Underground station when one leaves your Lordships' House at, say, eight o'clock—which, after all, is not the middle of the night—and find it completely unmanned, with all the automatic ticket machines closed, and not in use. Possibly there is one man in the ticket office, and a long queue of passengers waiting to get their tickets. As to the bus services, possibly remarks on that had better be reserved until a later time when we are discussing London Transport. I sincerely hope that it will be made more efficient and more of a service to the public in the true sense of the word.

4.29 p.m.


My Lords, may I say, in supporting this Bill, that the Government are right in the change that is now taking place, in that the G.L.C. are to be responsible for London transport. They should be given a clean sheet, as it were, because it is very easy to castigate transport undertakings. Today, the noble Lord, Lord Nugent of Guildford, has followed his usual hobbyhorse of criticising the management of London Transport, as he does with all other forms of nationalised transport undertakings. But I have yet to hear from the noble Lord, or from anyone else, how, given the remit under which London Transport have been working, they could be a more efficient organisation. If it were possible to give them unlimited capital, with a view to developing various services, by curtailing the ordinary motorist who clutters up the roads, I think the cost ratio would come down somewhat.

This is the real problem of transport. Each time a suggestion is made—and the G.L.C. will find this; indeed, I am certain they already know it—about increasing the cost of a transport fare there is a tremendous outcry by people using the transport. One can understand their point of view—transport seems to be a Cinderella—and in the past London Transport management have fully understood this. They have had very great difficulty indeed in measuring up the two things. Having investigated the workings of the London Transport Board in the past, I believe that, when it comes to dealing with, and facing up to, the problem of transport, the management are very efficient—


My Lords, may I interrupt the noble Lord? Has he read the two Reports, of last year and the year before, of the Prices and Incomes Board on the management of London transport?


My Lords, the noble Lord, Lord Nugent, and I helped to conduct a research into London Transport and visited the various organisations; we visited management and understood their problems. No matter what decision has come from the Prices and Incomes Board—I do not say there were not flaws here and there—the flaws were known, and it is not entirely the fault of London Transport that they were not solved. I suggest that we conducted a much greater probe into London Transport than did the Prices and Incomes Board. If it had been possible to take off the shackles that were on London Transport, based upon the economic situation, Government policy, thirteen years of Tory rule, with some Labour rule involved too, and all the other difficulties, I do not think London Transport would have been in the financial difficulty in which they ultimately wound up.

We know that problems of transport exist. The noble Lord, Lord Somers, has referred to unmanned stations and what happens with regard to buses, and suchlike, from time to time. London Transport employees, like all other transport workers, have a right to a decent wage level and decent conditions; and to obtain those decent wage levels and conditions economies have taken place. The result has been a number of unmanned stations and difficulties with the buses; and all this has rebounded on London Transport and the G.L.C., who find themselves involved in a similar situation. In order to meet the situation in the past economies have been made, but as soon as that is done there is an outcry and there is said to be inefficiency. At the same time, it is the shackles which have been placed upon London Transport and other transport in the past which have prevented the transport experts from embarking on improvements which they knew ought to be undertaken. It took some time to get the Victoria Line. Transport management took the initiative in the development of automatic ticket machines and such innovations; but they all cost money and money has not been too readily available.

In wiping the slate clean, the Government are quite right in wanting a certain balance, but the G.L.C. will have tremendous problems before them. I am sure that they realise this much better than I do because they are dealing in detail with the actual situation. But now that they are taking over, I sincerely hope that when they see modern developments, instead of hanging on for years and years, as has been the position in the past, with loss of money, they will be courageous enough to go ahead with them, even if it means increasing fares and prohibiting so many motor cars from coming into the centre of town. We all know that since parking meters were established in London there has been a slight increase in the volume of traffic movement. One wonders to-day whether that is sufficient because increasing congestion is taking place. Only a short while ago, for instance, I left this House and took a taxi, and it took nearly twenty minutes to get clear of Parliament Square because it was so congested. It is difficulties such as this which face London Transport. When the noble Lord, Lord Nugent, makes his asides about inefficiency and the problem of management, he really ought to be more forthcoming and tell us how the problem can be dealt with. The problem is a physical and a general one, and I am sure that London Transport will be fully alive to it.

I think that London Transport will have to face up to the problem and to a pet theme of mine which I make no apology for making special reference to. Instead of keeping through traffic on the roads, underground motorways will have to be built in London to take the flow of traffic including the private motor cars —I am a motorist who likes driving—that continually clutter up London and all our other conurbation areas. Now London Transport is having a fair opportunity, with a wiping of the slate clean, and I am certain that the people who are to control and run London Transport will be courageous with the problems that confront them and will turn to the G.L.C. and say, "We are going to meet this traffic problem in London and not be entirely swamped with it. You will have to be forthcoming with capital development and the curtailment of other traffic, which is so necessary if we want to make a really efficient transport system"— which every one of us wants. There are nearly 53 million people in this country—and nearly 53 million traffic experts, apart from those who are actually dealing with the problem. Everyone who is not actually administrating and dealing with traffic problems can tell those who are dealing with them what they ought to do. Now the G.L.C. will have the opportunity of putting this matter to their ratepayers. And I am certain that, given this remit, given the opportunity and given farsightedness, they will make an adequate and good job of it.

4.38 p.m.


My Lords, I am grateful to the noble Lord, Lord Nugent, for his general support for the Bill, and particularly for his agreement with the fact that the existing route pattern should be maintained intact until the new management has had a chance to look at it, even if he did salt his observations with a little mild criticism. I am certain, too, that he has replied to the noble Lord, Lord Somers, and my noble friend Lord Popplewell. When sending his best wishes to the new Chairman, in which I am certain we all join, Lord Nugent pointed out that he was undertaking a job of quite unusual complexity and difficulty. May I say to the noble Lord, Lord Somers, that if we could have a little more than £50 for the purpose we might go away together and then I could show him some of the traffic systems abroad which are a great deal worse than the system which exists in London to-day.


I have never denied that, my Lords.


Therefore, my Lords, I am glad that this tidying-up operation which has been forced upon us receives the general blessing of your Lordships' House.

On Question, Bill read 2a; Committee negatived.