§ 3.34 p.m.
§ LORD BESWICKMy Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask Her Majesty's Government to what extent the recently announced increase of rail fares is in accordance with Government policy of restricting price increases in the public sector.]
§ LORD MOWBRAY AND STOURTONMy Lords, the Government's policy is that price increases in the public sector will be allowed only where they are justified by increased costs. The recently announced fares increases are needed partly to offset increased costs and, in London and the South-East, to replace the Government's grants towards unremunerative services.
§ LORD BESWICKMy Lords, is the noble Lord aware that this is not what was said at the General Election? Is the noble Lord aware there are some members of the British electorate who actually voted for this Government because they were promised that the Government would break into the wage/price spiral by keeping a firm grip on the public sector prices? Therefore, how can the Government possible justify an 564 increase in this important area of the public sector?
§ LORD MOWBRAY AND STOURTONMy Lords, we said in A Better Tomorrow that we would subject all proposed price rises in the public sector to most searching scrutiny. We said that if they were not justified they would not be allowed; but the present increases have been scrutinised, and we think they are justified. Perhaps I might point out, with great respect, that we are in effect doing what the noble Lord's former Minister of Transport, Mr. Marsh, said; namely:
The Railways Board must fulfil its new financial remit. Market pricing must be the backbone of its pricing policy, and there is no reason why the services should be not priced on the basis of what the market will bear.
§ LORD BESWICKMy Lords, I accept what the noble Lord has said, but is he aware that what his noble Leader actually said was that there was an alternative to what Mr. Marsh was doing. That alternative, and I will quote from the speech of Mr. Heath, was:
… to break into the price/wage spiral by acting directly to reduce prices. This can be done by … taking a firm grip on public sector prices and charges, such as coal, steel, gas, electricity, transport and postal charges.In practically every case they have actually gone up.
EARL JELLICOEMy Lords, may I just "tiptoe" in for a second to inform the noble Lord, Lord Beswick, that Mr. Heath is not my noble friend's noble Leader?
§ LORD MOWBRAY AND STOURTONMy Lords, if I may put in a word, we are, as the noble Lord opposite knows, trying to do this. But, as my noble Leader, Lord Jellicoe, pointed out in an earlier answer to-day, we cannot do this at a stroke. It takes a little time.
§ LORD SHEPHERDMy Lords, is it not a fact that "at a stroke" was the claim? Could the noble Lord indicate where the Government have had success in holding down prices?
§ LORD MOWBRAY AND STOURTONMy Lords, the claim to hold down prices is going to be a continuing effort, and in the long run the country will benefit.
§ VISCOUNT MASSEREENE AND FERRARDMy Lords, to my little 565 knowledge Rome was not built in a day. The reason for the rise in prices is largely due to the policies of the Labour Government.
§ LORD POPPLEWELLMy Lords, would the noble Lord be a little more explicit? He said that the reason for these increases in prices was to finance the unremunerative services. But these services are still being cut out and curtailed in so far as subsidies are being given to the bus companies. The bus companies are proving that the services are unremunerative, and therefore they are being cut out. In consequence, the nation as a whole is having a very raw deal in public transport. In these circumstances, how can he justify his statement that the increase in prices is to pay for these unremunerative services that are still continuing to be closed?
§ LORD MOWBRAY AND STOURTONMy Lords, I think it is fairly obvious that we have to look at everything individually. We pay grants on services which we judge are worthwhile projects. We should like, of course, to do road and rail together, but at the moment we do not have the ability to do this on the same basis. We have to look at everything on its own merits.
§ LORD NUGENT OF GUILDFORDMy Lords, is my noble friend aware that he has a choice in this problem of putting increased costs on to the taxpayer, or increased costs on to the commuter—speaking particularly of the South-East? Is my noble friend aware that this is a far more complex question than the noble Lord, Lord Beswick, suggested? Is he aware that there are problems with regard to the planning of London and the South-East, and with London trying hard to hold its population down, nothing would be more foolish than to ask the taxpayers of this country to make it more attractive for people to live outside London and to commute back in? Is my noble friend aware that he is taking the right decision?
§ LORD MOWBRAY AND STOURTONMy Lords, I am very grateful to my noble friend.
§ LORD DAVIES OF LEEKMy Lords, may I once again spring with alacrity to the defence of the Government? May 566 I ask them whether they are aware that they can find £65 million with a stroke of the pen to-day if they have the courage to stand up and denounce this betterment levy trick that is being forced upon us by the Government? The Exchequer is going to lose £65 million as a result of a little Bill to which we are to be asked to give a Second Reading to-day. I suggest that, with a stroke, this £65 million could be put into the railways.
§ LORD MOWBRAY AND STOURTONMy Lords, I do not think it is a question of £65 million here or there. We are dealing with a public service, and the public service in this case is able to meet its demands; it is a perfectly ordinary commercial matter. Either we must give subsidies or the taxpayer must pay. Where there is an ability for the ordinary user to pay, we ask the passengers to do this. The wages element of the railways is something like two-thirds, and it is a very important element. We are quite prepared, for social reasons, occasionally to consider grants.
§ LORD ALPORTMy Lords, may I ask my noble friend whether it is the policy of the Government, as indicated in his answer to the question of my noble friend on the Front Bench, that people who at present live outside London and work in it should now be forced owing to the increase in the fares in the environs of London, to come and live in London and add to the London population?
§ LORD MOWBRAY AND STOURTONNo, my Lords. British Railways are giving very good value. If you consider the cost of motoring into London, you will find that British Railways' fares are well under half that cost.
§ BARONESS PLUMMERMy Lords, may I ask a simple question of the Minister? What is the difference between a commuter and a taxpayer?
§ LORD MOWBRAY AND STOURTONMy Lords, the two are usually the same.
§ LORD BURNTWOODMy Lords, will the noble Lord indicate whether it is possible for the Government to induce the Railways Board to disclose how they compute whether a given line is paying or not paying? Is he aware that in many cases the Railways Board refuses to give this information to the public, so the 567 public cannot judge whether the Board's case for an increase in fares is justified or not?
§ LORD MOWBRAY AND STOURTONMy Lords, the Railways Board is an independent commercial body. It has to work within guidelines provided by the Government. Like any other company, it has to be commercial; it has to compete with bus services and motor cars. And if it fails it will not be in business. We asked them merely to be commercially sensible.
LORD HAWKEMy Lords, is my noble friend aware that the cost of season tickets has gone up less than the cost of most other commodities in this country over the last twenty years?
§ LORD MOWBRAY AND STOURTONMy Lords, that is a very good point which my noble friend has made.
§ LORD BESWICKMy Lords, may I ask a more simple question about what I agree with the noble Lord, Lord Nugent of Guildford, is a very complicated issue? Can the noble Lord say whether these increases of prices in the public sector, together with the massive increases in food prices which were announced yesterday, will break the wage/price spiral, or will encourage it?
§ LORD MOWBRAY AND STOURTONMy Lords, this is a much wider question than the Question on the Order Paper.