HL Deb 01 August 1978 vol 395 cc1210-24

3 Before Clause 11, insert the following new Clause—

Duty of British Railways Board (". It shall be the duty of the British Railways Board to run all sections of its business in such a way so as to improve the service to its customers, reduce its costs, improve its productivity, increase its efficiency and reduce its reliance upon subsidies or grants whether under this Act or any other measure.") The Commons disagreed to the above Amendment for the following Reason:

4 Because it is inexpedient to impose on the British Railways Board imprecise obligations, attempted compliance with which might involve breach of other statutory duties imposed on the Board.

3.27 p.m.

Baroness STEDMAN

My Lords, I beg to move that this House doth not insist on their Amendment No. 3 to which the Commons have disagreed for the Reason numbered 4. As I said when we debated this new clause in Committee, there is obviously a measure of agreement on the objectives of the new clause, which seeks to promote efficiency and productivity in the railways. The debate is about means rather than about ends. It is far from certain that this clause, placing new statutory duties on the Railways Board, is the best way of securing those desirable improvements in efficiency and productivity.

There are also real technical difficulties. The new duties would conflict with existing duties imposed on the Board under Section 3(1) of the Transport Act 1962 and under Section 41(2) of the Transport Act 1968. There are other possible points of conflict, not least with the Secretary of State's power to give directions to the Board under Section 3 of the Railways Act 1974. I know that the noble Lord intended the new clause to be declaratory, but as it stands it would appear to intend legal consequences although it is not sufficiently precise to show what those consequences should be. For example, how would improvements in services be measured? How would improvements in efficiency be measured? We are seeking agreement with the Board on indicators of performance, as we said we would in the White Paper on the Nationalised Industries, but it is not a simple matter.

There is ample evidence of the British Railway Board's determination to work towards the objectives set out in the new clause. In the last few years they have, with the co-operation of the railways trades unions, reduced manpower by more than 12,000; they have kept within the cash limits on passenger support and are within sight of breaking even on their non-passenger businesses. They have continued to improve their services in terms of greater comfort and reduced journey times; and they have published more information about their businesses than ever before.

I do not think that this House need worry, if the Amendment did not become law, that the Board would lapse into inefficiency and become profligate overnight. On the contrary, the new duties, in conflicting with the framework of legislation and the very carefully constructed constraints within which the Board now operates, would probably make it harder for it to add to the achievements of the past few years. I therefore ask noble Lords not to insist on the Amendment.

Moved, That this House doth not insist on the said Amendment to which the Commons have disagreed for the Reason numbered 4—(Baroness Stedman.)


My Lords, as I moved the original Amendment, and your Lordships were good enough to support me in the Division Lobby, perhaps I might comment on this matter. However, before I do so perhaps I may be forgiven for saying that yesterday my noble friend Lord Carr of Hadley made it abundantly clear that the criticism that both he and I had made was a criticism directed entirely to the Government: it was no criticism of any sort of the Printed Paper Office. I am sorry that that statement by the noble Lord did not reach as far as the noble Lord, Lord Wigg. However, as it happened perhaps I might make his and my position abundantly clear on that matter. I am glad that he has felt that the events as regards this Bill have, in fact, supported the plea that my noble friend and myself made on that occasion, that we should be given more and better and prompter information.

As regards the present Amendment, the Government's case for rejecting it rests primarily on what one might describe as conflict or inconsistency between this Amendment and other existing legislation. I drew your Lordships' attention to the fact that the three existing Acts—the 1947 Act, the 1962 Act and the 1968 Act—were all expressed in different terms and there was, therefore, potentially, conflict between them. That is very clearly brought out in the report of the British Railways Board itself. I am referring to page 4 of the latest report where, having listed the obligations under the various Acts, it says in heavy type: These obligations must be related to subsequent financial constraints imposed upon the Board". In other words, it is accepting that there is a degree of inconsistency between the statutory obligations and the subsequent actions or statements of Ministers which are, in fact, detailed on page 4 and which I shall save your Lordships' time by not reading out.

At the end of page 4 there is a further statement drawing attention to the inconsistencies which exist in the present situation. It says: but there is still a large difference between the current charge to revenue account and the current cost of assets used. Unless this gap is bridged current financial constraints"— that is, the constraints imposed by Ministers as set out above— could preclude the Board from meeting its obligations". That is the view of the British Railways Board. One would have thought that this Bill offered the Government an ideal opportunity of clearing up what appears to be not only one inconsistency, but a whole range of them. If the Government were not satisfied with the words that I myself had drafted one would have thought that they might have turned their own hand and drafted something that they would have regarded as expressing the matter in more appropriate terms. Indeed, one of the problems that all the nationalised industries suffer from is a lack of clearly stated objectives. Here was the opportunity for the Government to set down in an Act of Parliament what the clearly stated objectives ought to be, and I regret that that opportunity has been missed.

The second point that I wish to make is one to which I also referred on an earlier occasion. This Bill follows the precedent set in the 1974 Act. Every previous Act contained and expressed a clear financial duty which was imposed upon the Board. The 1974 Act for the first time omitted that financial duty. It will be within the recollection of noble Lords that 1974 was the year in which public expenditure started to increase at an alarming rate. That increase finally reached such proportions that it brought this country to the verge of bankruptcy and we were saved from bankruptcy only by the assistance of the IMF and our other creditors. The IMF imposed on this country certain strict conditions relating to the conduct of our financial affairs.

There exists at present a suspicion—let me put it no higher than that—that the Government are no longer adhering with the same closeness to the control of their total expenditure. Let me just quote two figures to support that view. These figures are taken directly from the Financial Statement and Budget report for this year and last year. It says that last year total public expenditure increased by £4,587 million—that is, approximately £4,500 million. This year the estimated increase in public expenditure is £7,389 million. We have been told on a number of occasions, not only in your Lordships' House but elsewhere, that the rate of inflation has been halved. At a time when the rate of inflation is half of what it was, an increase in Government expenditure 50 per cent. greater at least gives rise to a suspicion that the level of public expenditure is going up rapidly.

The Amendment that I put down, which your Lordships were good enough to pass, related to public expenditure of £3,000 million. That is not a small sum of money by any standards—indeed, not even by nationalised industry standards is it a small sum of money. The Amendment gave the Government the opportunity of stating quite clearly that, despite what other people might think about their financial performance, so far as this industry was concerned they were prepared to accept that there was a financial duty resting upon British Rail. Their failure to take advantage of that opportunity again will damage nobody other than themselves. Nobody's reputation will suffer other than their own reputation and there will be no loss of confidence except in the Government. Those are matters which I suggest the Government might very well think over in the next few months.


My Lords, I find it very difficult to grapple with the full range of what my noble friend has to say on these subjects, because he is an expert. I have to read what he has to say at least five times. I think that today's debate has been a further useful stage in the discussion that we have had on the Bill about the method that it is now appropriate to use for the defining of objectives for nationalised industries. On both sides of the House we could all agree that the Morrisonian concept of nationalised industries is now out of date. What we could not agree on is how it should change and develop for today's world. My noble friend has made a considerable contribution to certainly my knowledge and also I think to a wider discussion of the best methods by which, in this instance, the British Railways Board should have their target set, so that their accountability in its widest sense—public as well as Parliamentary—could be increased.

I am very sorry that Her Majesty's Government have not seen fit to write this Amendment into the Bill. I do not fully agree that the objections which they have raised are as substantial as they sound or as they read at first sight. Nevertheless, I think that the exercise of discussion and interchange of view that we have had has been most worthwhile. I am very glad that my noble friend saw fit to pursue it. Meanwhile, I think that we must let this subject pass.

3.41 p.m.


My Lords, I would not have intervened in this debate had it not been for some of the remarks which fell from the lips of the noble Lord, Lord Cockfield, when he referred, among other things, to Government expenditure. If he would consult the document which is available at the Printed Paper Office—Cmnd. 7295—he would find that the cash limits which were imposed over the years 1976–77 and 1977–78, not necessarily by the IMF but by the Chancellor himself, have been £1,000 million underspent for both the years in question. Therefore, I do not think that the noble Lord's remarks about Government expenditure are at all appropriate.

Recently in the European Assembly we have been considering the whole question of road and rail transport in Europe. In the course of that review it has, of course, been necessary to study the situation in the United Kingdom. As a result of that, one is bound to reach the conclusion that in comparison with our colleagues on the Continent—particularly Germany and France—our experience here has been rather unfortunate. The injuries that we are inflicting on ourselves in securing ease of communications within the United Kingdom are mainly self-inflicted. I shall not attribute any particular Party or political blame for this because in my view both Parties share the responsibility. But, quite clearly, as regards the policy pursued by the United Kingdom in relation to its railways, we have inflicted injuries upon ourselves; because progressively we have driven both passenger and freight traffic off the railways on to the roads as a result of some serious misconceptions as to what ought to be the true role of British Rail.

From time to time in this House and in another place there have been repeated denunciations of the losses and deficits incurred by British Rail. It has been agreed that the objective of the Railways, setting one year against another, should be to achieve an ordinary commercial viability. The whole policy of the Railways has been determined in that direction, as a result of which they have become progressively uncompetitive in comparison with the roads. Today our roads are congested to an unnecessary degree by freight and by passengers. Under more sanely devised policies, they could go by rail.

This is not the place to refer at any undue length to the quite ridiculous Beeching cuts that successfully mutilated the British railway system. But we have only to look to the Continent to discover the policies that are being pursued there. Sometimes it has been said in another place and in this House how efficient the German railways are compared to the British, and how magnificent the French railways are compared to the railways in this country. What is sometimes not realised is that the German Federal Republic subsidises railways to the tune of over £1,500 million a year—a policy which, if pursued in this country, would arouse the ire of noble Lords opposite and, indeed, those in another place to a point of political apoplexy.

Therefore, I am very glad that the Government have resisted the Opposition conception of some finite limitation being placed upon the financial policies of British Rail, which, indeed, would have been implicit had this Amendment been left exactly where it is. But at the same time I hope that in rejecting the Amendment and agreeing with the other place, the House will bear in mind—as I hope my noble friend Lady Stedman and my right honourable friend in another place will bear in mind—that over the next five years at least there will come a time when the whole policy of the Government in relation to railway travel will have to be transformed, not only in order to bring it more easily into conformity with the practice within the European Economic Community, but in order that there can be a sane, total transport policy in this country.


My Lords, I should like to express my sorrow that this Amendment has not been accepted. Nevertheless, I agree with a certain amount of what the noble Lord, Lord Bruce of Donington, has just said, I have always said that if we had no railways and if a genius came along and invented railways, he would be hailed as the solver of our traffic problems. I agree that all heavy freight travelling over 100 miles should go on the railways. It is a great pity that the railways are under-used.

However, I yield to no one in my admiration for the Inter-City services. Yet, I believe that there could be an improvement in the service to customers on other routes, not the Inter-City ones. Perhaps I could tell the amazing story of what happened to me two or three years ago. I was travelling in the dining saloon of the Market Rasen train in the evening, but no one could have any wine or corked drink because the staff did not have a corkscrew. They told me that the reason they did not have a corkscrew was that they lost it on the journey south to London, and the man who was supposed to bring a corkscrew to the train travelling north had not turned up. I said: "Surely you arc allowed more than one corkscrew"? and I was told: "No, we are only allowed one corkscrew". It is absurd for such things to happen.

On another occasion I was travelling on a small sideline from a place called Great Bedwyn near Hungerford to Reading, where I changed for the London train. The ticket collector and guard, whose job is like that of a bus conductor, has a machine and he punched a ticket for me which gave the fare of £1,073. He was in a terrible state about that and I had to write a little note for him. I then had to show him how to work the machine because he did not really know. Having said that, I shall sit down. But I am sorry that the Amendment was not accepted.

3.48 p.m.


My Lords, I apologise for having been called away for a moment, because I wanted to follow this argument rather closely. I have listened to what the noble Lord, Lord Cockfield, had to say but I have read the clause. I have looked at the semantics and at the meaning. I want noble Lords to listen to what has been rejected. The other place say that they disagree to the Lord's Amendment that: It shall be the duty of the British Railways Board to run all sections of its business in such a way as to improve the service to its customers, reduce its costs,"— this is miraculous— improve its productivity, increase its efficiency and reduce its reliance upon subsidies". Road transport depends on more subsidies than Tommy Lipton has tea leaves, but they are hidden. It costs the country more millions of pounds in jammed-up traffic, in lost energy and petrol, in repairing roadways, drains and watercourses through mining subsidence and road subsidence because of the giant lorries, than it costs in railway subsidies.

Face these facts. Public enterprise they say, is a bad thing, but here British Railways are the finest in the world. We have the speediest and most efficient train running between Paddington and Newport. What is this? With all respect, to me the noble Lord, Lord Cockfield, who is an expert, has here allowed his expertise to come to the service of his Party. As old Tom Paine said, "Now is the time for all good men to come to the aid of the Party", and, my word, they are! They are there, just as the House is breaking up. I recognise it for what it is. He knows, because he has a first-class IQ and brain, that this is a piece of sheer skulduggery on the part of Party politics. It is absolutely no use to man nor beast in the practical sense. Any intelligent other place, even if it had been Conservative, would have turned it down because it is asking the impossible.

3.51 p.m.


My Lords, the noble Lord described this clause as a piece of skulduggery. On the subject of skulduggery I, of course bow to the noble Lord's experience. I would recall to him, because I think it was a piece of skulduggery in which he himself was implicated, that when the railways were nationalised in the late 1940s a clause was inserted in the nationalisation statute imposing on the Board—I think in those days it was called the Transport Commission—the duty to balance their accounts, taking one year with another. If this Amendment is skulduggery, my limited vacabulary fails to find a sufficiently violent expression to describe what was put by the noble Lord and his right honourable and noble friends in the statute under which the railways were nationalised and under which they started business as a nationalised industry.

It may well be, given the fate of railways all over the world, that this was an impossible ambition, but it is a great mistake to dismiss so easily the salutary discipline of some measure of financial responsibility. When I was Minister of Transport and Civil Aviation 20 odd years ago, the railways were in fact more or less in balance and more or less complying with the noble Lord's nationalisation statute, and this was a very healthy discipline. With any organisation—and I speak with some experience of running a fairly wide variety of organisations—once you remove the financial discipline of feeling that you must try to achieve a balance and that ends must meet, you take away quite a powerful drive towards efficiency. When it becomes a question of, "It is going to be rather hard to keep our subsidy down to £100 million this year. Life will be easier if we run the organisation so that the subsidy is £120 million", the best of managements lose some of their drive and determination; some, if you like, of that ruthlessness which is needed to run a great organisation.

I, for one, deplore the fact that British Rail have been allowed to go so far from the original financial charter under which they started. I believe that they would be a more efficient organisation if some rather firmer financial target were imposed on them. I did not speak on the earlier stages, and I am not particularly wedded to this Amendment, but, even at this hour, I think it would be wrong for your Lordships' House just to throw overboard, as the Government seem to be doing, the idea of some form of financial target, some kind of financial discipline, for this great organisation.

Let me take up something that the noble Lord, Lord Bruce of Donington, said in his characteristically breezy speech. He referred in a give-away line to the "ridiculous Beeching cuts". Were they so ridiculous? Every closure that was made under the recommendations when Lord Beeching was the extremely efficient chairman of the British Transport Commission for a closure of a line, had to be submitted to the Local Consultative Committee and had to be examined very closely, and the Local Consultative Committee only advised, and the Minister of the day only accepted the advice, when it was quite clear that that line had no reasonable financial prospects.

I recall one case in my own time as Minister of Transport of a country line which had only a handful of passengers travelling on it, and that only a few days a week. It was worked out by the officials of the Department that it would really have been cheaper to close the line and give every one of those passengers a Rolls-Royce than to keep the line open for their benefit. There was an extremity of cases of attractive lines winding through the countryside, roses on the stations, rosy-checked station masters on the platform, all aesthetically and environmentally terribly attractive, but there were lines that could never be other than a burden on the taxpayer. It would be wrong, even at this stage, to underrate or to cast reflections upon the devoted, difficult and necessarily unpopular work which the noble Lord, Lord Beeching, did, and which gave our railway system a much better chance of financial viability than it ever had before.

Finally, may I take up one separate point of the noble Lord, Lord Bruce of Donington, on public expenditure. He said that because the cash limits laid down in the White Paper had not been reached, let alone been exceeded, public expenditure was therefore not out of hand and was not rising. The fallacy of this argument lies in the question: Were those cash limits right? My noble friends have criticised them as being far too high. It would not be suitable to go into this at this stage of the Session, but there are many of us who believe—and I ask the House to accept this—that it is the steady rise in public expenditure, now, I believe, again accelerating, and the taking in taxation of so large a proportion of gross national product, that is the major cause of the inflation which, if not checked, will undo us all.

3.57 p.m.


My Lords, I find myself in great agreement with much that the noble Lord, Lord Boyd-Carpenter, has said. I think I could sum it up thus: he accepts the concept of planning, but he also accepts the necessity of the retention of the application of the pricing system. I suppose he would not accept—or if he did it would be with his tongue in his cheek—that that is my concept of socialism. I believe in the public good, and I also believe that in a free society the pricing system has to be retained. If you are to retain it, it must be efficiently applied. This often brings me into conflict in my thinking with my noble friends on this side of the House.

I rise now only to point out that, as I found myself in almost complete agreement with what the noble Lord said, I must challenge the logic of his basis. He attacked my noble friend Lord Davies of Leek because he found it impossible to find words to match my noble friend's description of "skulduggery". He objected to the use of that word. But I do not think that the noble Lord, Lord Boyd-Carpenter, could have thought this one through. He said, "What about 1946, when the Transport Act was put through by a Labour Administration?" Yes, of course. If you like, they started off with the hope—indeed the certainty at the time—that the transport industry would be run in the public interest, and that, if so with one year good as against one year bad the accounts would be roughly in balance. The noble Lord thought that that was a piece of skulduggery, but on his own evidence it clearly was not.


My Lords, may I interrupt the noble Lord? What I was trying to say (and I am sorry if I misled the noble Lord) was that, although in the judgment of his noble friend, in view of the expression he has used, that that was a piece of skulduggery, I thought it was a piece of wisdom.


My Lords, I think it was a piece of wisdom. But in fact the noble Lord was building on that, I thought, to say that it did not work out. Clearly it did because, as he said, when he was Minister of Transport 20 years ago—when he certainly applied the pricing system—if I remember rightly, one of his decisions was not to impose a kind of permission as to whether or not you could drive your car in the city, but to rely on the pricing system to control traffic. That has not worked either, or it has worked only to a point.

The logic of my position is that, if a tank weighing 30 tons is sent over a bridge built by our forebears that will only take 10 tons, the folly does not lie with the men who built the bridge but with those who sent the tank over the bridge. Obviously it must lead to the point of collapse, and that is where we are getting to now; that is why I rise at this point, because on this Bill it was inevitable that it should be limited. It could go only so far, given the political state of the game.

However, it is clearly not enough. The next Administration will have to face up to this problem on a non-ideological basis. That is what the Secretary of State is saying, that these are not questions of philosophy, and I wish they were not, but unfortunately that is what they have become. It is a division between this and that, whereas in fact we are faced with a massive technological problem which will have to be solved taking fully into account the development of technology right across the board. One cannot say planning is a dirty word; some say the pricing system is a dirty word. Both have to be taken into account and both have to be used because, above all, the object here is a free society.

There are many problems which we discuss and which we could solve, a large number of which have arisen in the last few weeks, and while they could be solved, we should no longer be free men and women if we tried to apply the solutions. We must, therefore, operate against the limitations imposed on us by our own thinking and moral desires. That is the point I particularly wish to make. I pay tribute not only to the work of the noble Lord, Lord Beeching, but to the work of the noble Lord, Lord Boyd-Carpenter. I have known him for a long time and I am one of his admirers. When he was Financial Secretary to the Treasury and in the years preceding that he was one of the Members on the other side of the House to whom I always listened. I listened carefully today to what he said and if I disagree with him, I am paying him a compliment because I have taken his comments aboard and have tried to reconcile what he said with my own thinking, and if I have failed, I accept his sincerity completely.


My Lords, I do not disagree with anything said by the noble Lords, Lord Boyd-Carpenter, with his vast experience, and Lord Wigg. But something must be done, and I fear that we are all far too complacent about our railway system, and here I find myself in fundamental agreement with the noble Lord, Lord Bruce of Donington. I put a supplementary question the other day in which I asked if the Government would take some steps, the best steps, to conduct an inqury with the object of improving our railway system which, I said, remained the worst in Western Europe. That remark was greeted with cries of dissent from both sides of the House, and I found myself so unpopular that I had to leave the Chamber and have a drink.

On the other hand, there was an element of truth in it, and that was brought out by Lord Bruce. I know they give enormous subsidies in Germany and substantial subsidies to the railways in France. At the same time, nobody who has travelled in those countries can deny that the railway systems there are incomparably superior to the system in this country. I agree we have certain Inter-City trains which travel fast and are good; but the suburban lines are absolutely terrible. I was travelling the other day in a train, and I got out at a station. The guard recognised me because of television, and said, "Do you know you are getting out at the wrong station" and I said, "I know I am. I am getting out because the train is so filthy I couldn't stay in it any longer". The guard replied, "I don't blame you".

I live near Victoria Station and I go there quite often. It is chaos. To get a ticket for any train anywhere one must queue for at least 20 minutes, and when one gets to the ticket office one finds that the clerk does not know how much the ticket costs. That is too prevalent all over the country. At Euston there are no porters, and one must walk about half a mile to get to the train. I simply want to say today that unless we take some steps by some means—maybe those suggested by Lord Bruce or those suggested by Lord Boyd-Carpenter—to improve our rail transport system, the congestion on our roads will become absolutely intolerable.

Baroness STEDMAN

My Lords, I do not want to delay discussion on the rest of the Bill, but we have ranged rather wide on this group of Amendments. We have been round Europe, down to the individual missing corkscrew and talked about the roses round the doors of stations. There is really nothing more for me to say other than to point out that, like the noble Lord, Lord O'Hagan, I am not a financial expert. I will read with interest what the noble Lord, Lord Cockfield, said, as I did his previous scripts to me during the passage of the Bill, and I hope to learn something from it. I would only remind the House that this Amendment was not acceptable to another place because we are satisfied that the duties already imposed on the Board by the 1962 and 1968 Transport Acts still apply and are satisfactory, but I will ensure that both my Secretary of State and the Chairman of British Railways Board know the contents of this debate and the points raised by noble Lords.

On Question, Motion agreed to.