§ 3.15 p.m.
§ Lord POPPLEWELLMy Lords. I beg leave to ask the Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government what is their estimate of the numbers of passengers travelling by rail and the likely increase or loss in revenue due to the proposed increases in fares by British Rail.
§ The PARLIAMENTARY UNDER-SECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness BIRK)My Lords, there are no estimates of numbers of passengers as such. The most recent estimate is that in 1975 passengers made about 730 million journeys and travelled about 18,800 million miles. British Rail estimate that the likely increase in revenue from the increase in fares which will take place on 28th March is £30 million in 1976 and £40 million in a full year.
§ Lord POPPLEWELLMy Lords, while thanking my noble friend for that reply, may I ask whether she is aware how unsatisfactory it is? Are we to understand that the Government have authorised these increased fares without any knowledge of what the estimated traffic, the number of passengers, is likely 1144 to be? Is not the serious situation which is developing on the railways another indication that the Government must produce their White Paper at a very early date so that we can assess just how quickly Government policy as a whole is closing down the railway system?
§ Baroness BIRKMy Lords, my noble friend is not quite correct about not being able to calculate the possible decrease. In 1975 passenger miles were 2 per cent. less than in 1974 but the earnings of British Rail went up by £88 million. This was despite fare increases of 49 per cent. and the effects of the economic recession. We are, of course, very conscious of the situation, and the transport policy review to which my noble friend referred will, we hope, be published very shortly indeed. This is a consultative document, and this is in fact where all these matters will be discussed.
§ Baroness PHILLIPSMy Lords, is the noble Baroness aware that railway fares have actually increased about four times in the space of six months? So far as I know, the cost of no other product has done so, even in this time of high inflation.
§ Baroness BIRKMy Lords, before noble Lords opposite say "Hear, hear! "—
§ Baroness BIRKWell, in view of noble Lords opposite saying, "Hear hear! ", but before they say it again, may I point out that the railways, like all nationalised industries, have had to make up for past price restraint, and part of this restraint was due to the Conservative prices and incomes policy. Secondly, the railways, like everyone else, have been hit by inflation. The alternative to increased fares is increased subsidy. We are all aware, on both sides of the House, that this could be given only at the expense of other demands on public expenditure, such as housing and measures to reduce unemployment.
§ Lord HAILSHAM of SAINT MARYLEBONEMy Lords, is the noble Baroness really being quite frank with the House in the first half of her 1145 last answer? Is this not exactly what we were told last summer was going to happen, after the latest pay awards?
§ Baroness BIRKMy Lords, I am sorry, but I did not get the point of the noble and learned Lord's question.
§ Lord HAILSHAM of SAINT MARYLEBONEMy Lords, the noble Baroness was trying to attribute part of the blame, as usual, to the late Conservative Administration. I was asking her whether that was an altogether frank answer in view of the warnings given to us last summer that this increase would be the direct result of recent pay awards.
§ Baroness BIRKMy Lords, I was bringing in that point in answer to the question put by my noble friend when she referred to the very substantial increase. The point is that if there had not been these restraints the increase could have been phased up more gently. I also very carefully pointed out that this was one of the ingredients. The others were inflation and the necessity not to increase Government subsidy.
§ Lord POPPLEWELLMy Lords, is my noble friend aware that we fully endorse the reply to Lady Phillips? Is she further aware that the policy now being pursued is a direct consequence of the Beeching/Marples era, and directly the responsibility of members opposite who dealt with this problem? Will my noble friend give some assurance that in this forthcoming White Paper we shall receive an indication of Government thinking towards a complete change of policy so far as transport services are concerned?
§ Baroness BIRKMy Lords, the biggest hope on the last part of my noble friend's question on the policy review and the discussions that have come from it is that really for the first time the whole of transport will be discussed together, road and rail, rather than continuing to pursue this competitive system of road against rail.
§ Lord HAILSHAM of SAINT MARYLEBONEMy Lords, is the noble Baroness really doing herself justice? Is she not aware that this business of discussing road and rail together is at least 25 years old, and that there have been about five different reviews on that basis since then?
Baroness WARD of NORTH TYNESIDEMy Lords, could I ask the noble Baroness whether she would say, before the Government agree to increased fares, what information they have on which to base the increase? Do they in fact go into it in detail or do they just do what the Chairman of the Railways Board asks for? I should like to know what part the Government play before the increases are in fact agreed.
§ Baroness BIRKMy Lords, the Government get British Rail to put forward its proposals but then the Government make their decision. Indeed, I imagine that it would not be unnatural for British Rail to want a very much larger subsidy to help it along than the Government are prepared to give. It is then calculated on the basis of what is considered—and I have already given this answer—would be a possible drop in passenger journeys as compared with the increase in earnings. It is on this calculation that the increase in fares is based.
§ Lord CARRINGTONMy Lords, would that last answer by the noble Baroness perhaps be a clue to why nobody is prepared to run a nationalised industry?
§ Baroness MACLEOD of BORVEMy Lords, could the noble Baroness tell me whether, as with other nationalised industries, fare increases have to go to the Price Commission before the Government make up their mind?
§ Baroness BIRKYes, my Lords; they do.
§ Baroness HORNSBY-SMITHMy Lords, could the noble Baroness tell us why it is virtue to hold down private enterprise in many spheres to5 per cent. or similar limits, and yet nationalised industries seem to be able to double their prices within 12 months and that is considered to be perfectly all right by the Government?
§ Baroness BIRKMy Lords, I have already said at least three times that the reason for the steep increase is that the fares were artificially held down before; and even so the fare after the increase represents something between 2p and 3p 1147 a mile, which is cheaper than running a car for many commuter journeys.
§ Lord LUCAS of CHILWORTHMy Lords, would not the Minister agree that this is a particularly unfortunate time to increase the fares on the railways in view of the review report? Would she not agree that in the interim time there will be greater demand for the use of road transport, which is cheaper now in many commuter belt areas than the new proposed rail fares?
§ Baroness BIRKMy Lords, it is always a bad time, and it is always very unfortunate to have to increase fares. I must make quite plain that neither the Board nor the Government are happy about it at all. At any time when there is an increase there is always a problem. But past increases have not shown that this has had very much of that effect. What happened very often was that some people used their cars for travelling to work and they have cut down on them for leisure activities.
§ Lord POPPLEWELLMy Lords, is my noble friend aware that the nation as a whole realises that they are now spending something like £3 million a mile on developing motorways? Is it not right to offset that against the increase that is now taking place in fares? This additional subsidy that has now been given to the road lobby and oil lobby is something that I hope the Government will take care of in their White Paper.
§ Baroness BIRKYes, my Lords, these are all matters which will be discussed in the White Paper. I am sure that my noble friend will agree that the comparison is not quite so simple and direct as that.