HL Deb 05 May 1982 vol 429 cc1188-234

Debate resumed.

4.51 p.m.

Lord Tordoff

My Lords, as perhaps the only Member of your Lordships' House not to have taken part in that discussion on the Falkland Islands—

The Lord Chancellor (Lord Hailsham of Saint Marylebone)


Lord Tordoff

—together with the noble and learned Lord the Lord Chancellor, as he reminds me, perhaps we may now resume the debate on the Motion moved by the noble Lord, Lord Lucas. I welcome this opportunity to take part in a broad and wide-ranging debate on the subject of transport in the United Kingdom. It is a difficult subject, primarily because it is one about which everybody knows something.

It is easy to discuss specific items—we could spend a long time discussing the merits of seat belts and probably an even longer time discussing the merits of the M.25—but to tackle the question of transport on a wide-ranging scale, as the noble Lord has invited us to do (almost on the basis of political philosophy) is exceedingly difficult. The reason for that is that we can talk of planning, integration and co-ordination—the noble Lord, Lord Underhill, took us somewhat down that track—but when we think about those matters, what we mean is having an integrated, co-ordinated and planned transport system which will take us personally from our homes to anywhere in the country at any time of the day or night, and preferably free.

I regret that the noble Lord, Lord Mottistone, is not in his place at the moment. I remember that during the debate on the situation of London Transport, raised on a Bill in the name of the noble Lord, Lord Underhill, a few weeks ago, Lord Mottistone, very rightly, in reply to something I had said, pointed out that the cost of private motoring was very high. It is indeed a very expensive way of getting around, if one is prepared to cost one's motor-car travel in a proper way, and I am sure that if we all had a cost accountant at our elbow we should put in the cost of borrowing the money to buy the car, taxes, maintenance and so on.

In practice, we do not look at it that way; we tend to look at the cost of an individual journey based on the variable costs of the petrol we use for that journey. That is at the heart of many of the problems of passenger transport in this country; we always think of the marginal cost of an individual journey. In other words, we think of the price per gallon of the amount of gasoline we shall use to go from A to B, and we tend to compare that with the cost of any other form of transport that is available to us, setting aside the convenience factor, which is always there, in being able to get into your own motor-car outside your own house and go to wherever you want to go.

I should perhaps declare an interest. As many of your Lordships know, I work for a subsidiary of a multinational oil company. What I have explained is also a problem in terms of the pricing of gasoline in this country. Because it appears to be the major cost in any journey, any increase in the price of gasoline appears to be very significant in terms of one's cost of living, whereas in fact an increase of 2p or 3p in the price of gasoline represents a very small proportion of the total cost of running a motor-car.

There is no doubt that to run an efficient transport system is essential for a developed, civilised and industrial society. It is also true that it is the duty of the Government to ensure the provision of that sort of transport system. I submit, however, that it is not necessary for them to provide that directly, and I shall develop that point as I go along because it is in contradistinction to some of the remarks of the noble Lord, Lord Underhill.

Transport is important for the other things which depend on it, not transport for its own sake. It is important in terms of our ability to travel to work and to go shopping. I nearly fell into the trap into which the noble Lord, Lord Underhill, fell earlier in that I almost referred to our wives going shopping. When he was talking about cycle tracks, he said something about the need to stop women wheeling prams. I caution him that certain ladies inside and outside this House will have his guts for garters if he goes on saying that sort of thing, and properly so. It is important, as I was saying, to get our children to school, to enable us to go on holiday; and it is important that we have transport to keep in touch with our friends and relatives. It is interesting, having gone through that list, to note that all those things refer to passenger requirements. I shall refer to freight later.

Even on the passenger basis, it is an incredibly complex network and there are no simple solutions. Indeed, there is no global solution, in my view, which will answer all the problems of transport in Britain. The noble Lord, Lord Underhill, went too far down that track; I do not think the possibility of the total planning of the system is available to us. It is too complex for that. In the '50s and '60s many of us—not thinking just about transport but many other factors too—had the vision of a great computer being constructed into which one could feed information, and all the answers, about the future and planning requirements, would come out by pressing the right knobs. We went through a period when people talked about garbage in and garbage out, and it was said that what was wrong with the great computer was that we were not putting in the right sort of information.

Many of us in industry today recognise that that sort of planning is a fantasy. However good the information, however good the model and however large the computer, one cannot predict the future, and that applies to transport as well as to many other facets of our industrial life. One need only look at the discontinuities that can be caused from time to time. The one which stands out in everybody's mind is the increase in crude oil prices in 1973 as a result of the activities of OPEC. Who now would dare predict what the price of crude oil will be a year from now, let alone in five years from now? That is the sort of basic data one would need to have to make that sort of planning and in predicting a reality.

We have moved, certainly in industry—and I believe the Government are now moving that way—into what we describe as scenario planning, where we postulate a certain range of possibilities and try to ensure that we optimise the possibilities within that range. When we try to do that in something as complex as the transport system of this country we must be a little more humble than we have been in the past; and the idea of having a great, planned transport system begins to go out of the window. At the same time I do not believe that we can have total freedom in the system, because that leads to anarchy and indeed to a disruption of the road services in particular through the kind of chaos that we find in many of our inner cities.

The point that I am getting round to, if your Lordships follow me, is that many of the solutions to the problems must be found locally. This is a dimension which perhaps has not entered into the debate so far. The more that we can push down the problems to the lowest level of local government, the more that we can involve within the local government context a variety of private enterprises, the better the chance we have of producing some kind of answers to the great questions that beset us.

Clearly there are some things which central Government must look after. I have in mind, for instance, the main trunk road network, the motorway network—and I dissent from few of the things said so far on that subject—and the rail network in terms of the Inter-City traffic. Certainly the Liberal Party has been in the forefront of those who have been pressing for increased investment in the electrification of the major rail network.

There are all kinds of separate items that must come into a debate such as this, and many of them have already been mentioned. We must think in terms of the future cost of transport, the scarcity of fuel, and the question of whether we are using the available fuel in the best possible way. I do not think that we now expect transport fuel to run out by the 1990s, but the amount of oil that we can obtain from the North Sea is finite. It is interesting to note that in the past few days a number of projects in Canada have finally collapsed because of the cost of producing oil from shale and from tar sands. This is connected not with any physical reason, but with economic reasons, though the time will come when it is economically attractive to undertake such extractions. That instance demonstrates the difficulty of predicting what will be the future in terms of the resources that we can put into our transport system.

I do not want to become involved in the road versus rail argument. I felt that at the beginning of his remarks the noble Lord, Lord Lucas of Chilworth, perhaps put forward rather too strong a road lobby view, though he modified that later in his speech. We must be careful to recognise that there is a matrix here, that road and rail both have their parts to play, and we must all clear our minds as to what part various assets of the country have to play in producing a true national transport system.

We have to look at the environmental impact, and again the public must understand that there are no simple solutions to environmental questions. It is a matter of finding the best solution, not of finding the perfect solution. How much land is one prepared to lose? How much agricultural land is one prepared to let go in order to avoid the danger that would arise to children's lives by building a by-pass around a primary school?

There are no simple solutions, and somehow or other we must help the people of this country to understand that the balance of risk is the best that can be achieved in transport questions. There is no doubt that today mobility is an important part of life not only in this country, but throughout the world. We are perhaps the most mobile society that the world has ever known. For us and for our children the chances of travelling to the ends of the earth are now much greater than they have ever been. Indeed, even in the third world the chances of travelling far abroad are much greater than they have ever been. This is a situation which from these Benches we would in no way criticise. Mobility is liberty, and liberty is the great touchstone of liberalism. But we must recognise that if we abuse that liberty, we are a menace to society, and if the motor-car is the epitome of that mobility, it is also the major threat to life and to liberty itself.

Nowhere is that situation more apparent than in the great conurbations, and in particular in London. I do not again want to get into the long debates that we have had in your Lordships' House in the past few weeks on the problems of London Transport, save to say that in considering the whole subject of transport, there is no question but that the commuter is the person who suffers most—and this is not a party question—from our inability to solve transport problems in the great urban conurbations.

As I think I said in the last debate, so far as London is concerned—and I shall not today go beyond this point—the answer must lie not specifically with the Government, not specifically with the GLC, but in setting up some kind of Greater London passenger transport executive that is capable of looking at the totality of passenger transport problems within the conurbation.

But I repeat that outside that area the answers are better found through the smaller local authorities tackling the problems, together with the kind of innovation that can come from using private enterprise, as is being done in various parts of the Far East, such as Hong Kong and Bangkok, which have enormous traffic problems. There is there a degree of innovation which, if it were used in tackling the problems of this country, might help us considerably.

There are many other aspects of this subject which one could deal with. There is the question of the way in which the road fund tax is taken from the motorist. There is the belief that we hold on these Benches that this tax should be graduated according to engine size, and that for ecological and other reasons there should be emphasis on encouraging people to have more efficient and smaller car engines in the future. There is also the whole question of lorry weights. We support the Armitage proposals and believe that common standards are important for the European Community, and that such an approach would remove much of the aggravation from the problem of inter-European heavy freight traffic. There is a need for a degree of further road building in this country, but we use up a great deal of agricultural land, and so we must be quite specific and target our needs onto those areas that are desperately in need. Clearly the M.25 is a specific need, and I would not quibble with some of the other projects that the noble Lord, Lord Lucas, mentioned.

However, at the end of the day we must try to get away from dogmatism on the subject, and we must together look at each problem pragmatically. We must look at the opportunities which exist today within our inland waterways; and if the Humber waterway experiment is successful, we must look at the idea positively with a view to extending it to other areas of the country. I hope that in looking at such ideas we shall not be inhibited by the present aggravation within dockland. The whole question of dock labour relations goes back a long way, and it would not be right to raise it on too detailed a scale in this debate. People understandably have fears based on what has happened in the past on the railways and in the docks. They have fears about loss of jobs. Such fears stand in the way of genuine progress and genuine increases in efficiency, which in the end will improve the job prospects for the country as a whole. It is tragic, as I say, that these fears should be allowed to stand in the way of genuine experiment within this country.

My Lords, I am conscious of the fact that I must not go on too long because this debate has been considerably interrupted and I feel very greatly for the noble Lord who is to follow me, who has been, I am sure, sitting on the edge of his seat for some considerable time. But again I say I am grateful to the noble Lord, Lord Lucas, for introducing this debate, and I am sure we now all look forward with great interest to the maiden speech of the noble Lord, Lord Cayzer.

5.11 p.m.

Lord Cayzer

My Lords, as has been said by several speakers, this is a very difficult problem altogether, and it is a subject on which one could speak for a very long time. I cannot claim to be able to do that because my knowledge of inland transport does not equate with that of other speakers, particularly the mover of this Motion, the noble Lord, Lord Lucas of Chilworth. But my interest in inland transport stems from the fact that my company has been engaged in British shipping for over a hundred years, and I have been engaged for most of my life in that context.

There are four ways of moving goods and people around the country—air, rail, road and sea. What interested me very much to see was what vehicles they used, how they travelled. I believe that within these islands, in 1980, 7 per cent. of the people were carried by rail and 92.5 per cent. by road. As far as freight is concerned, the figures were 9.2 per cent. by rail and 82 per cent. by road. Of course, sea, air and rail have this in common, that they all depend on road connections. But I would say that one of the factors in a democracy is choice. Once you get rid of choice you get rid of democracy. Therefore, to a very large degree people will have an influence on the type of development that has been so eloquently debated so far.

The relationship between these modes of transport which I have referred to must change over the years, as it has throughout our island's long history. The change nearly always comes about by economics and by effectiveness and efficiency; and it is nearly always, in the initial stages, a painful process. I want to give an example of this which was a very personal one to myself and to my company. About 20 years ago we owned over 100 ships—passenger liners, cargo liners and other types of ships. Then Nemesis approached and overtook us. It took the form of the airlines, and especially these large jumbo jets. This put an end to our passenger liners, which we had to withdraw from service, and, very sadly, yet thankfully in the circumstances of today, only great liners like the "Queen Elizabeth" ride the seas.

The development of the container ship made the traditional cargo ship redundant, too, and your Lordships can imagine what these changes meant to us, especially when we began to think of employment. But we could not oppose change, nor could we fall back on the taxpayer. We adapted. We moved into a container consortium; we reallocated our resources; and we redeployed as many as possible of the people we had employed. It was hard and it was painful, but two facts emerged which I think are of some interest. First, our turnover increased from £56 million in 1968 to £335 million in 1980. Secondly, and I think even more important, the number of people we employed in this country, albeit in different jobs, rose from 3,500 to 9,000—and that does not count, through the diversification which was forced on us, the large number of people that we also employ through foreign contracts.

Change, properly managed, can therefore bring benefits to both society as a whole and to those who work in it; but I know that in a conservative country like this one (and I use that word with a small "c") change is very hard. None of us likes change; we all fear it. But it is something that we have to face; otherwise, we shall have a stagnant society and probably less employment and a lower standard of living for all the people in these islands. I know that both sides of this House desire to see more employment and the better use of employment. We must identify what changes need to be made dispassionately and on purely economic grounds, I myself think, because, in the end, economics catch up with you. You cannot spend more money than you create. We must administer these changes with humanity—that, I think, is absolutely vital—because you cannot take people with you unless you can persuade them that the way you are going to lead them will be for the better.

Returning to the subject of this debate, I think we were slow off the mark in creating motorways. One thinks of the autobahns in Germany; one thinks of the unemployment, which many of your Lordships remember (I do, vividly, because I worked in Glasgow in those days), between the wars. We could have got on with the job then, and done something about it. Of course, there is debate about the heavy lorries, and I think we must get round this, if possible, by bypassing towns and villages. I am very much in sympathy with people who feel that these mammoth container lorries, and so on, passing through their villages, sear their lives. But this is not beyond our ability, and we shall have to give very careful thought to parking space in our towns and cities. To a small degree this is being thought about when people put up new buildings, but, of course, this is a very small part of the matter.

Turning to railways, the noble Lord, Lord Beeching, began the process of dismantling uneconomic railway lines, and this is another area which I think we must look at again. There is no use in running trains unless people are going to travel in them. The question of whether redundant railway tracks—and there are a lot of them throughout the country—can be turned into roads with advantage should be carefully considered. I have great hopes of the fast inter-city trains because they are extremely convenient for those who travel and have to travel a lot between various parts of the country and the metropolis; and the advanced technology which is proceeding, with some difficulty, I believe, means that they are both speedy and comfortable. It may, and I think does, make sense to move certain major bulk commodities such as coal and ore by freight train.

I have no desire to be dogmatic. I believe that this is a serious problem that should not divide us but unite us in trying to find the right solutions. I hope that objectivity will win the day. I, myself, believe that we need more and better roads for the obvious reason that it is cheaper to carry goods by road. Although it has been pointed out that the cost of motoring is expensive, life is made up of choices and quite often one chooses the most expensive thing to do because one likes it best. Therefore I think we must have more roads.

I am very worried about the very large losses which have been suffered by British Rail. I believe it is true to say that since nationalisation British Rail—and I am not being critical; I am merely stating the facts—up until the end of March 1981 absorbed £13 billion, at 1979 prices, of taxpayers' money. This is more than any other nationalised industry and nearly twice as much as British Steel. This cannot be allowed to continue. No privately-owned company would have allowed it to do so. They would have had to change. We who work in the private sector of industry have the discipline of knowing that if we fail we suffer. No rescue service is available. My plea therefore is that where the nation provides the service it should look at the matter from the point of view of economics rather than politics.

I hope that I may have said something that at least makes people think a bit about this problem for I am convinced that it is of first importance. We in this country will count for nothing if we cannot put our own affairs in order. If we are going to create more employment, and, hopefully, a good standard of living, it will depend on the ingenuity with which we seek to change the operation of some of the industries which since the war have cost the taxpayer so dearly. Change must come; change will come. We must face it clear-eyed, and we must implement it with conviction and with purpose, and meet its consequences with care and compassion.

5.25 p.m.

Lord Taylor of Gryfe

My Lords, it is a pleasure to congratulate the noble Lord, Lord Cayzer, on his maiden speech. I am sure that the House is indebted to him for bringing to our consideration of this problem of transport his wide knowledge and great experience particularly in shipping. The noble Lord will perhaps forgive me if I do not endorse some of the strictures and criticisms that were offered of the railway system. This is a matter to which I may perhaps return. I should like to apologise to the House. I put down my name for this debate assuming that there would be no major interruption in the course of this afternoon's proceedings. I must leave the House at 7.30. I sought an alternative speaker from these Benches at the last moment, but it was not possible. Perhaps the Minister and the House will accept my apology.

I welcome in the speeches so far delivered in this debate the balanced view and the consensus which seems to be emerging regarding a sensible and balanced transport policy. I think it is right, as the noble Lord, Lord Tordoff, has said, to approach this matter quite pragmatically. When we are assessing the claims on the nation's attention and on the nation's purse for the relative modes of transport, we ought to make comparisons which are reasonable and equal. For example, it is frequently said that road transport is so much cheaper than rail transport in handling freight. You must assess the costs which rail freight must carry in the cost of railway tracks and maintenance and all the other infrastructure of the railway system—the bridges and so on. Heavy lorries do not face the same kind of charges for their use of the main roads.

In comparing modes of transport, we ought to try to get a balanced view of the social costs of transport. I do not think that it would be right in developing a national strategy for transport to rely exclusively on economic factors, because we believe in a good society and in a civilised society which takes into account the environmental implications of any policy. Perhaps I may mention one or two of the environmental implications of road and rail transport—and I am not trying to take this debate down the line of road versus rail, but rather to establish the balance. If I may say so to the noble Lord, Lord Cayzer, who commented on the performance of British Rail, there is no railway in the world which is making a profit and every railway in the world is subsidised by the state and, as far as Europe is concerned, in the context of strict comparison, British Rail's subsidy is substantially less than that of any other railway system in the whole of the EEC. I think that that should be said. And I do not believe that the noble Lord, Lord Cayzer, would find many takers in the market for a private enterprise railway system.

My Lords, may I mention one or two environmental factors which ought to be taken into account? Intercity electric trains are around four times more energy-efficient than scheduled airliners and almost 50 per cent. more efficient than a well-loaded car cruising along a motorway. Electric trains are uniquely flexible in their use of primary energy sources. Commuter trains are up to 10 times more energy-efficient than commuting by car. When we see the long queues of cars running into London day in and day out; we should remember that we are using up the nation's resources. These are limited resources. So remember that commuter trains are up to 10 times more efficient than the car that is driven into London.

Studies undertaken have indicated that 4.5 million people were dissatisfied about noise from motorways and principal roads, and 3.4 million people were dissatisfied about aircraft noise, whereas only a very small percentage of people are disturbed by noise from the railway system. That is important. May I say this in relation to the economics of the railways in this country? Most countries have accepted the social obligations of a railway system, and most countries try to encourage the use of public transport. Anyone who visits the United States and sees the excessive demand on land resources—and we are a small island compared to the United States—of the great motorways, and the using up of fuel and energy by the excessive use of motor-cars, will accept that to allow our railway system to deteriorate would be a very serious matter for the future of this country.

If you discuss this matter with the average citizen in the United States he deplores the fact that public transport has been allowed to disappear in many areas. I believe that a sensible transport policy must provide a railway system network which is used by the public. If you allow purely economic terms to be considered in your transport policy, you will end up, as the noble Lord, Lord Underhill, indicated, with no rural transport whatsoever, because it is totally uneconomic to provide transport in areas of small population around the country. In addition, if you simply tailored your transport policy to economic terms, you would probably end up with no railway system.

It is interesting, when we are holding this debate today, that the Financial Times should publish an article which is headed: "Railways unveil plan to lure the French away from the motor-car". This article tells of substantial state investment in making the whole railway system much more attractive for the public, in brightening up the railway stations, putting in all kinds of investment which will ensure that railways will be efficiently run and well used.

By the same token, the French—with complete disregard, I suspect, for the PSBR or EFL—have laid down a completely new line between Paris and Lyon, and on that line put their showpiece of the high speed train, well ahead of our APT in this country. So the French experiment ought to be looked at. They are concentrating on a greater use of the railway system as an essential element in sound public transport policy.

What is wrong in this country? We shall not keep a railway system going without additional investment. May I give one or two figures in relation to the rolling stock of British Rail? No replacements are being built at the moment for the whole fleet of over 3,000 diesel multiple units which were built more than 20 years ago. The present rate of renewal for locomotives is under 20 new locomotives per annum to keep the railway system going, although the total requirement is over 1,000 locomotives. About half of the resignalling system is still controlled by mechanical signalling, most of which is over 60 years old.

The great age of railway development in this country was 100 years ago, more or less, which means that a good part of the railway infrastructure, including the bridges and track, are now substantially deteriorating and, in many cases, in danger of collapsing. If one is going to accept that a good and sound railway system is essential for a reasonably balanced transport system nationally, then we shall require to step up the investment, otherwise the whole railway system is crumbling before our eyes. It would be a national tragedy if this were permitted to continue.

Some people will say to me, "It is all right you calling for more investment in British Railways, but are British Railways efficient? Are they doing a good job?" The annual report of British Railways has just been published and is available in the Printed Paper Office. Despite the difficulties of the economic recession of last year, passenger receipts passed the billion mark for the first time in the history of railways in this country. The annual passenger volume was down only 3 per cent., despite the recession. Freight losses were halved. Considerable improvements in productivity were achieved. Transmark, which is the consultancy service for British Rail, is now being used in 27 countries. These are countries which have come to British Rail to invite them to provide their expertise in improving or building their railway systems. This indicates that British railways are not as bad as we all like to complain.

I welcome the Minister's statement recently that he was setting up a new review of railway objectives, that we should set the British Rail Board clear objectives for the commercial and socially necessary railway system and that we should establish a reasonable financial framework to encourage managerial efficiency in meeting these objectives. In the debate on nationalised industries quite recently in this House, I tried to make some comparison between how we run our nationalised industries and the private sector. It is this area of giving a board clear objectives of what it is to attain and making financial resources available to achieve those objectives that the main purpose of the Government should lie, and then let the board get on with it.

I very much welcome the suggestion by the Minister that this is going to be examined. I warn the Minister not to become too bogged down in the numerous controls and checks which are the plague of the nationalised industries. We are inclined to build upon our nationalised industries a great bureaucratic maze which makes decision-making and operations extremely difficult. I suggest to the Minister that, if he establishes these new objectives, he backs them with financial support.

May I also encourage him? We on these Benches believe in a mixed economy, and we have said that frequently. It might be possible to inject private capital into some parts of the railway system if it was felt that the financial requirements of British Rail were going to be constrained by the current EFL. There is no reason why the new railway line about to be set down between Victoria and Gatwick should not be financed from private sources with throughput agreements. We should consider that possibility. There is no reason why the level crossing investments, which would make a return in two or three years in terms of economic operation, should not be an object for private investment, provided one made a throughput agreement with British Rail. If it is possible, as in some countries, to finance a road system by a toll system which is privately run there is no reason why some of this philosophy should not be considered in relation to some operations of British Rail.

All I want to say is that there is a strong case for maintaining the railway system. I believe that, in the difficult conditions of today and under the constraints of the external finance limit, the British Rail Board is doing a good job, and I hope that it will command the Minister's support.

5.40 p.m.

Lord Orr-Ewing

My Lords, I should like to add my congratulations and gratitude to the noble Lord, Lord Lucas, for having initiated what I think is a very timely debate on road and rail. I should like particularly to congratulate my noble friend Lord Cayzer on his maiden speech. In this House we are unique in having experts on so many subjects, better-informed people with up-to-date knowledge and personal experience sometimes going back over a lifetime, as he has in the shipping world. I think we all appreciated what he said about the need for flexibility and the flexibility which his company has achieved in totally reorienting the whole product and changing the direction of the company. I think we all have to rethink this, not only in our businesses but in connection with such things as roads and railways.

This debate has been timely, apart from the over-riding interest of the Falkland Islands which must demand much of our time and much of our thought, in that only last week British Rail published their annual report, so that there has been the opportunity over the weekend to study the report. I also think it is an important subject to so many households, as my noble friend said in introducing the debate. Looking at household expenditure, it is quite staggering to see that, apart from rent and food, transport is the biggest expenditure for all the households in this country. So transport and its cheapness is of paramount importance.

I think it is also important that we should set time aside to discuss the biggest user of Government grants. The Government's expenditure Blue Paper sets out all these grants and gives the total expenditure for the current year, which will be £2.7 billion—and this all comes from the taxpayers—of which £950 million will go to British Rail. I know that a good proportion goes into what British Rail call "social railways" and perhaps we ought to be considering whether this is money well spent or whether there are other ways of running our rural railways more efficiently and providing the service which is needed.

Also we can reflect on the fact that an additional £250 million of grant goes to London Transport and is paid for to some extent by the ratepayers. In London the GLC have actually increased their precept—and many of us will be voting on this tomorrow—by 90 per cent. Had they gone ahead with their schemes, the precept might have been increased not by 90 per cent. but by 1,000 per cent. and the ratepayers would have been very sore if that had happened; so we have to thank the House of Lords judges for their ruling in that case.

What is also a very important part of British Rail is the commuter traffic. Anyone who has struggled to get to their work punctually knows the conditions under which the commuters have to travel. It is a vitally important part of British Rail. In fact, without British Rail the centres of our cities would decay faster and more disastrously then they are doing now. I read recently that, partly because of the high fares and partly because of high rates, many industrial companies are moving their head offices out of London. It is sad to see British Steel, International Harvester, Blue Circle Cement, Unilever, Tube Investments, W. H. Smith, GKN and many, many others—big, important international companies—all moving out because of the costs of keeping their headquarters in London; and that must affect jobs.

British Rail have been very helpful in providing data, and I should like to express my gratitude to them. It is interesting to see in the 1981 figures for London just how many people commute daily between 7 a.m. and 10 a.m.—the peak period. In rounded figures, 400,000 travel by British Rail, 350,000 travel by Underground, and about 100,000 travel by bus to work, while 175,000 travel by car and 17,000 travel by motor-bike, and they generally jump the queues. I believe only 9,000 travel by cycle. Curiously enough, there has been a 50 per cent. increase in bicycles in the last five years, because they get through the traffic. From these figures it would appear that British Rail has not changed much in the last six years. The number travelling by Underground has gone up by 12 per cent. since 1976 and the figure for buses has gone down from 150,000 every day to 100,000. That is a remarkable 30 per cent. cut in bus travellers.

But it is British Rail who carry the bulk of travellers and it is very important, therefore, that they should be efficient and well supported. The commuter services must continue, otherwise we should have a tragic depopulation of all our cities and thereby of the services which our cities provide to the nation.

A good comment has already been made about inter-city services. I think there are the best of British Rail: they have modernised. The Mark III carriages are quiet, comfortable, air-conditioned and very pleasant to travel in. One of the great glories is that you can get away from the telephone, so you can work if you have a mind to, or you can sleep if you want to do that. Certainly I think our BR inter-city services are remarkably good and I only wish that other services in certain ways could match them.

One can criticise state monoploies but there is a very difficult way of measuring their efficiency. I give full marks to British Rail in that they initiated with Leeds University a study of the comparative efficiency of 10 European railways. I only wish that the figures were a little more up to date. The latest actually relate to 1977 and were published in 1981. When I pressed them for reasons why they did not publish more up-to-date figures they told me that they were under some pressure from their European colleagues because British Rail show up so well in this comparison with their rivals on the Continent that their fellow railwaymen there are not too anxious to give up-to-date figures which might show them in an unfavourable light.

Of course, there are good and bad things about British Rail in this comparison. As between firms, I always find that comparative figures are very helpful. I know that no one set of figures is perfect because you are not always comparing like with like; but if you are at the bottom of every league then something is wrong with your organisation. Here there are strengths and there are weaknesses, and I should just like to draw attention to some of them. First, our fares are far and away the highest in Europe; they are twice or more than twice the fares in Italy, France, Belgium and Finland. Surely British Rail have something to learn here.

Sweden gave an example by a very low fixed fare, and they have enormously increased their passenger traffic. British Rail tried an experiment—I believe it was one pound to go anywhere on one occasion last year—and there was a surge of traffic. Surely, when you have standing overheads which are very high, you should do everything conceivable to attract more passengers and spread those overheads over a greater number, get the fares down and get more people back on to the railways.

Secondly, I have to say that the manpower inflexibility of British Rail is a disadvantage in connection with productivity. This problem particularly effects ASLEF and flexible rostering. At the moment the tribunal of the noble Lord, Lord McCarthy, is sitting, and we are always being told that his report will be coming next week. I am sure that he is being very conscientious, but I can only say that, compared with other nations, we do not have flexibility of manning. Wherever one goes on the Continent, there is seven-day railway working. You do not see only one-third of the trains on Sundays and half the trains on Saturdays. It is the same format. I find myself wondering what makes our Post Office and British Rail believe that fewer people want to use their services at weekends. If the question was ever fairly put, you would find that more people wanted to travel at weekends. They then have time off and want to visit relations, and a lot of traffic could be attracted with more flexible working.

I have to say to the noble Lord. Lord McCarthy—I am sorry that he is not here at the moment, but perhaps one of his colleagues would agree with this—that he is so deeply ingrained, in all our beliefs, as being connected with trade unions, that it must be very difficult for him to sit in objective judgment on this aspect of the railways. We believe, rightly or wrongly, that he was the architect of much of the legislation when Mr. Foot was Minister of Employment. We have also seen him on the Front Bench very ably conducting debates on all the legislation which has come on trade union matters.

However objective he is—and I am sure that he will do his best—can the outside world really believe that, after eight years as chairman of the railway arbitration tribunal, he is the best man to give an objective and neutral judgment? I know that he has been elected back into office for two-year periods over a span of eight years, but perhaps he will reflect before he accepts for another two years. He is elected by the trade unions and by the management—incidentally, the taxpayers do not have a say in it—and he is doing it for very modest pay, which is not motivating. But I just wonder if he would like to think about whether he can be considered as objective as he should be on this great issue, which is so important to the future of British Rail.

I should have liked to say something about the service which we have to enjoy on British Rail. We all have stories about the buffet car not being there or, if it is there, not being manned, or about the restaurant car not being there or, if it is there, not being manned. I remember vividly one experience concerning a number of parliamentarians and how they were looked after by Swiss Railways when they had a crisis. After ski-ing against our parliamentary colleagues in Switzerland, we were going down on the branch line from Davos to Landquart where we were to catch the main line train. A poor child slipped under the engine and a leg was crushed, so the train stopped and they sent for hydraulic jacks to lift it up.

Along came the guard and asked whether anyone was trying to connect with an aeroplane. He collected the numbers, made a telephone call and got several taxis up to the nearest road. He then telephoned down, stopped the main line train and, after a wait of half an hour, we were pushed into taxis, taken down to the main line train, on to Zurich airport and back to London. I wonder how many people would have taken that trouble and given that service on British Rail. It is the small things that one remembers and I hope that the good in British Rail will spread more widely in providing a smaller and better service. There are other points to be made from these international comparative figures.

The Government have shown by their large financial grants that they believe in the future of British Rail to generate half their current investment needs, but that is not enough. They are the lowest investors of all European railways. What is sad is that they are not generating enough money to do their research and development. With a turnover of £2,000 million, they are devoting only £13 million to future research and development and that is almost farcical. You cannot keep up with the world and with the competition from road, coach and car if you are not investing more than that in future generations of technology and equipment.

They need to attract more customers, and I believe that they can do that with lower fares. As the noble Lord, Lord Underhill, said, if they are to genreate more cash, everything depends upon getting better industrial relations. I hope that when this furore about flexible rostering is over, they will set their minds to improving industrial relations so that they can provide more efficient railways, a better service, better punctuality and a better future, with adequate investment in research and development.

5.55 p.m.

Lord Ferrier

My Lords, before I turn to my prepared speech, I am tempted by something which was said by my noble friend Lord Orr-Ewing and the noble Lord, Lord Taylor of Gryfe, about the cost of rail travel to commuters. My noble friend said that the commuter services are absolutely essential and are part of our way of life, certainly in the metropolitan areas. The noble Lord, Lord Taylor of Gryfe, said that motoring is more expensive than the train. I have occasion, when I fly down from Scotland, to come into London at the middle of the day and I see line upon line of expensive railway rolling stock lying idle from 10 o'clock till 4 o'clock. I should like to know—we can talk about it afterwards, and perhaps there is something in British Rail's figures—whether, although they say that the Highland lines are very expensive, they are anything like as expensive as the commuter lines in London. I want to know whether that factor of capital lying idle has been taken into account in some of these figures.

I shall not say anything more about the railways, because I know that my noble friend Lady Elliot will he devoting most of her speech to them. She knows a great deal about the subject and, like myself, travels a lot by train. So I want, first, to thank my noble friend Lord Lucas for tabling this Motion. It is just as well to rememebr that, over the years, this House has made a tremendous contribution to solving the problems of transport, particularly road transport, in every respect—not only road construction and the like, but also road safety. Looking back over the many years that I have been at it, I have always been associated with the noble Lord, Lord Lucas, and with his father before him, on the same sort of line.

I have a vivid recollection of the late Lord Stonham and of the efforts he made in the middle sixties to develop a fully integrated transport system, such as my noble friend Lord Lucas and the noble Lord, Lord Underhill, have spoken about. We have been at it for years and years, but nothing has really happened. The noble Lord, Lord Underhill, asked whether we can start. We must address ourselves to problems such as the one at Didcot, where rail and road container traffic was to be concentrated. It would have been a marvellous contribution to an integrated system, but the grass is growing up through the sidings because of what the noble Lord, Lord Underhill, spoke of—the failure of industrial relations.

I wonder whether people realise how disheartened many of us are about the question of trade union leadership. Transport has recently been dislocated by the action of ASLEF and a dock strike is on the horizon, as my noble friend Lord Cayzer said. The wording of the Motion narrows down what we can discuss, because my noble friend has concentrated on the economic and social problems rather than on the wider aspects of the whole transport system.

I feel that the problem of trade union power affects the country's economy. The facts are that railway strikes, dock strikes, blacking and the like bear heavily upon the country's economy. I well remember that when the noble Lord, Lord Scanlon, spoke on 12th November he said that there is much wrong with the trade union movement. He went on to say that it is time we all co-operated on this issue and gave the TUC the assistance it needs in bringing about new arrangements. It is very interesting that on that occasion this was the motto on both sides of the House.

I am sorry that my noble friend's Motion says nothing about water transport so far as freight is concerned. My noble friend Lord Cayzer—whom congratulate on his maiden speech—spoke about the sea, but he did not mention inland water transport. I shall not say much about water transport because I. see that the noble Viscount, Lord St. Davids, is to speak in this debate. I know I can rely upon him absolutely to let fly on the subject of water transport. He is concerned in particular with internal transport. I am also concerned about the problems of the Highlands and Islands, the ferries and the piers.

The noble Lord, Lord Underhill, said that the railways are not important in terms of the urban areas and concentrations of population. However, we must remember—I am sure that my noble friend Lady Elliot of Harwood will bring out this point—that it is all very well talking about going by car if you are travelling 20 miles, but it is no fun if you have to do 400. And some of us do 400 miles twice a week. In many respects, therefore, the railways are essential to a great number of people, particularly in the rural areas. The noble Lord, Lord Underhill, pleaded for a long-term view of the railways. He said that what we need now is action. Let us hope that we shall soon have it.

With regard to water transport—I shall risk treading on the toes of the noble Viscount, Lord St. Davids—we must remember that, because of the trade unions, it is quite impossible in this country, under the present system, to make use of the barge-carrying ship. To my mind, the barge-carrying ship is the answer to the Channel tunnel. I am against the Channel tunnel for various reasons. The main reason is that it is not sufficiently flexible. Our flexibility in crossing the North Sea and the Channel is greatly interfered with because we have been unable to develop the barge-carrying ship. The Russians have such ships which are driven by atomic power. This is because the dockers here will not handle barges which are to he put into barge-carrying ships. A potential contribution to our transport system has therefore been frustrated by the unions.

It is a pity that our debate is under a certain amount of pressure after the more important discussions about the Falkland Islands. However, so far as labour relations are concerned, I for one—and I think others—look forward to the forthcoming legislative proposals with the greatest of interest. Something must be done to prevent our economy from being interfered with by bad industrial relations.

Your Lordships will know, from experience of my habits, that I cannot be expected to sit down without talking about by-passes. I have in mind, of course, the by-pass round Edinburgh. However, by-passes in general have been mentioned today by several speakers, and they have been referred to in the Armitage Report. One or two points about by-passes have not been made in that report. There is an economic aspect to by-passes: that they should be designed to provide places for the proper security and rest of vehicles and their drivers at suitable, well chosen intervals, not only so that loads are secure and the drivers able to get nourishment and rest but also so that provision can be made for the breaking down of loads in order to keep the heaviest of the transport trucks off city streets.

One association said to me that the one thing which we must insist on in relation to the larger, heavier vehicles is that they are not introduced until the by-passes are finished. That is easy enough to say. But there is an economic point about by-passes which merges into the social side, and it is this. The experience, certainly in Edinburgh, has been that fiddling about and indecision about a by-pass has led to the greatest delay in internal planning. It seems to me that it would be good for us to say today, as the White Paper indicates that 13 by-passes should be built in order to save historic cities, that they should be built quickly, because if they are not built and if traffic does not know where access is going to be, local authorities (Lord Tordoff said that it is very important that local authorities should be given ample opportunity to take part in the discussion of transport problems) will be unable to plan their internal transport.

What is more, if they fiddle about over it they will get, as happened in Edinburgh, large areas of planning blight, because people will say, "You must not build here" or, "You must not build there; there may be a road". It is an economic item of the utmost importance that if there is to be a by-pass it should be built as soon as possible. I sincerely hope that the Government (by the Government I include the Secretary of State for Scotland, because when I asked the noble Lord, Lord Bellwin, whether the outlook with regard to by-passes applied to Scotland he replied that he thought that it did) will put capital into roads, for this seems to me to be the best means by which to start the upward surge for which we all wait and hope.

I cut a letter out of the Scotsman the other day. It is from a person who lives in Dundee. He said: On leaving Ipswich I stoked my elderly and battered Peugeot up to 60 mph and, with the exception of replenishment stops for car and crew, held it at that speed, by-passing Bury St. Edmunds, Newmarket, Cambridge, Huntingdon, Stamford, Grantham, Newark-on-Trent, Doncaster, Wetherby, Darlington, Durham, Newcastle and Morpeth…". And then he came to Edinburgh, where there was no by-pass. This is a matter of interest. It is a real problem, in particular for air travellers. It would be of great benefit to air travellers if it were not such a problem to get there from the East and the South of Scotland. As I am sure my noble friend Lady Elliot of Harwood will tell the House, you cannot do it. This is one of the social consequences. I appeal to the Government to do what they can to help the Lothian Region, no matter how much they hate them, to get on with it.

I need not embellish or go over the obvious factors in favour of by-passes generally, which are set out in paragraphs 206 and 207 of the Armitage Report. However, there is one point which the report does not mention and that is the one about delay which I have touched upon; delay is going to be expensive if one is going to build a by-pass at all.

From that flows another point which has not been touched upon, nor is likely to be. It is that the absence of a by-pass means that a lot of traffic—particularly commuter traffic—goes dodging about the backstreets in trying to overtake traffic jams. This is a serious matter in many ways. In the good old days the streets were places where children could play. The driver of a hired-car of mine said to me the other day, "When I was a boy I played football in the street, but my kiddies cannot do that now". Of course, there are areas where sensible local authorities have closed streets where children can play for a certain number of hours each day.

We had a debate in this House the other day about road humps. This is a matter which concerns internal planning and transport. It relates to a point made by the noble Lord, Lord Underhill, when he talked about women with prams. I am vice-president of the Pedestrians' Association, and it is as well to remember that in terms of traffic congestion and its bearing on economic and social factors the pedestrian must be remembered. I am so glad that the noble Lord, Lord Underhill, mentioned cyclists. These people are users of transport. It is of social importance to them that they should get about.

On this question of making the streets better for children to play in, I was struck the other day, when we were discussing inner cities, that three Conservative Back-Benchers, without any collusion, all said in their speeches, that city centres should include accommodation for children to play. This is why I like the idea of encouraging the building of road humps or what are called "sleeping policemen". The question of road humps is not a simple one because there are problems in respect of ambulances and fire engines and the matter has to be thought out. In terms of women with prams they are a great help because they enable mothers with prams or carrycots in getting across streets, because road humps are brought close to the pavements. Let us remember that the pedestrian has a rightful place for consideration when it comes to traffic congestion. As to the railways' contribution, I begrudge the expense of the APT (but this has been touched upon by others) because I believe that more money could be spent on renewing the existing rolling stock. Again, I wish to thank the noble Lord for promoting this debate and I look forward to hearing the Minister's reply.

6.14 p.m.

Viscount Sidmouth

My Lords, in rising to speak tonight I should declare an interest in that I am president of the National Council of Inland Transport. It might be worth mentioning in view of what was said earlier by the noble Lord, Lord Tordoff, that a great number of local authorities, in both England and Scotland, are corporate members of that body. I can confirm that their views on transport are of very great interest.

The council concerns itself with all modes of inland transport and recognises the importance of each. Nonetheless—and I see one of my predecessors, the noble Lord, Lord Gainford, in the House tonight—it came into being in 1962, in what might be called the Beeching/Marples era, when the railways first came under concerted attack. At that time the "Beeching axe" reduced the railway network from about 20,000 route miles to 14,000 route miles. The figure has since stabilised at about 12,000 route miles. The railways have more or less managed to retain their share of passenger traffic—which was not very high even then—because of their commitment to commuter travel and the success of Inter-City. But by 1980 British Railways carried only 10 per cent. of all freight traffic as measured in tonne miles. I make no excuse, therefore, for concentrating my short remarks on the railways situation only.

I believe there is ample evidence, and it has been acknowledged by several speakers tonight, that a significant contribution by rail is, and will be needed for preventing congestion on roads, reducing environmental damage, and making the most efficient use of energy in the future. Yet, as I see it, that future is under greater threat than it was even in 1962. Basically, this appears to be due to a loss of confidence by the Government—or, should I say, by the Treasury? Certainly, if British Rail are denied the opportunity to make appropriate investments, they will eventually wither on the vine. The British Rail Board itself has identified electrification as the investment priority. The situation there seems to be far from satisfactory.

Reference has already been made in previous debates to the joint Ministry of Transport/British Rail review of electrification carried out in 1981, which found that what was called "Option 5" of the electrification proposals offered a return on expenditure of 11 per cent., cash discounted. Although this inquiry was probably one of the most exhaustive and far reaching of its kind ever attempted, the board has been required to go over the ground once again and it is at present engaged in that exercise. I believe that the board's replies to the queries that have been raised will be ready by early next month.

I have no doubt at all that the board will be able to present a cogent case to the Government, with regard to both the viability of traffic prospects and the financial return expected. The latter should be well in excess of the 5 per cent. real rate of return specified in the 1978 White Paper on nationalised industries, and in excess of the 7 per cent. set by the Treasury for this particular project. British Rail—this is another of its conditions—is also well on course for shedding 38,300 jobs, which was the target set in its corporate plan 1981–85. So the trouble area for all parties concerned in this exercise comes down to a so-called political one, which is all about productivity. Speaking from these Benches, I do not regard this as a political issue and the only interest I will declare is an intense caring for the future of the industry.

It is worth referring again to the joint review carried out by British Railways some years ago in conjunction with Leeds University, which was an intensive comparative study of European rail performances, in which BR's operating, commercial and financial performance was compared with that of nine other European railway systems. I believe that the noble Lord, Lord Orr-Ewing, was somewhat surprised to find that many of the figures show BR to be extremely efficient as compared with the European performance, but I think that to anyone who is familiar with British Rail this is by no means surprising.

All the more reason, therefore, to be concerned, and I think the British Rail Board were, at what appeared to be two outstanding points where our results did not square with those obtained abroad, with one exception to which I will return. The two points were that, so far as operating staff were concerned, it emerged that the average hours worked by BR staff were almost 25 per cent. higher than those of any other railway without equivalent higher levels of output per man. When it came to train crews, the finding was as follows: It is in the freight and parcels sector that the biggest differences arise. The performance of BR and FS (that is the Italian railways) is very much worse than any other railway, requiring more than twice as many staff to run a freight train as the more efficient railways". So I think it is perfectly correct for British Rail to have picked that up—it was one of the outstanding points arising from the inquiry—to see what could be done to improve it.

To my mind—and I have had experience of operating road transport—there is considerable contrast here with lorry drivers. Let me say at once—and I have worked with them—that British rail drivers are probably the best trained and most efficient and reliable anywhere in the world. It is all the more surprising, therefore, that, as I understand it, these extremely good drivers spend only three and a half hours out of an eight-hour day driving a train. I was making the point about road transport, and after all this is where a lot of onetime railway freight has now gone and is carried. Anyone familiar with recent legislation on the subject of drivers' hours will know that on the grounds of safety the main thrust of the legislation has been concerned with preventing lorry drivers driving nine, 10 or even more hours per eight-hour day, if I may he forgiven an Irishism.

Therefore, I think that it is perfectly right to try to find ways of allowing British Railways drivers to exercise their skill for more of the time during the day. Naturally, I will not get on to the question of flexible rostering, which is under consideration by the noble Lord, Lord McCarthy, and we look forward to his report, I believe later this week. But the danger I see there is that, irrespective of what the hours prove to be, nothing will he settled because both sides are so entrenched in confrontation. It is absolutely vital that this long-standing controversy should be resolved, or the industry, while arguing fruitlessly about what are in many cases outmoded principles, may well end up emulating Sampson and bringing down the whole structure about its ears.

In the debate in this House on 21st April on efficiency in the public sector, the noble Lord, Lord Boyd-Carpenter, speaking, I am sure, from experience, said this: Let us analyse the basic problems of the nationalised industries. I think the first and most difficult problem that those who run them have to face is the knowledge—or the thought—on the part of their workforce that they cannot be bankrupt".—[Official Report], 21/4/82; Col. 563.] I suggest that really one can go further than this, because, in so many of our declining but still vital industries, most of which are to be found in the public sector, one finds a form of conservatism—speaking of course with a small "c"—whereby all sides of the industry become locked into attitudes and practices which prevailed and were very successful in the days when they were at their peak but which are no longer relevant.

So I think that, faced with this problem, it is perhaps inevitable that the Government, particularly one holding the present political and economic convictions, should seek some other criteria in determining the level of support to be given to each sector of each industry, including wages and salaries. I believe that this is right and that the policy of strict cash limits has been successful in bringing some discipline to this difficult area. I would submit, however, that that policy applies in principle mainly to the current account, where it can be adjusted within reason from year to year to take account of need and the general economic position of the country, as it would be in private industry. But different criteria must surely apply to investment policy, especially in dealing with programmes which may take a decade to carry out and will affect the economy of the country well into the next century. To borrow money to balance current account may well be to mortgage the future of our grandchildren, but successful long-term investment in the infrastructure of the public sector would surely be to secure that future.

Before I sit down, I should like to mention the advanced passenger train, to which reference was made, I think possibly confusing it with the high-speed train. There is a useful comparison with the French experience with their TGV, in that they have got it into service very much more quickly, whereas the APT is still in great difficulties. I think there are two points to be made here, both financial. First of all, as the noble Lord, Lord Orr-Ewing, pointed out, the amount available to British Rail for research and development is absolutely ridiculous in relation to the size of the business. It looks as though this very clever and promising invention has run into the classic problem of not having enough funds to carry out the development part of the project, which often costs very much more than the initial research work on which it is based. The second point I want to make is that the French TVG is running on a special track, and therefore it is a perfectly conventional type of technology, an electric locomotive with carriages, such as the Japanese introduced about 20 or 25 years ago with their bullet trains. Therefore, the whole thing comes down not to a great French triumph of technology, but simply to the fact that their Government have more faith in their railways and were prepared to invest more in them than ours were.

Baroness Phillips

My Lords, before the noble Viscount sits down, he appears to be extremely knowledgeable; as a great commuter and customer of British Rail, can he explain why they found it necessary to invest in pulling down a perfectly good station at Victoria when they cannot find the money to invest in research?

Viscount Sidmouth

My Lords, I am very sorry; I should be very glad to oblige the noble Baroness, but I do not think I can answer that one without notice.

6.29 p.m.

Lord Teviot

My Lords, I must thank my noble friend for putting down this very important Motion, and also for wording it in such a constructive way, so that one knows precisely what one is debating. Also, I would like to join with other noble Lords in congratulating the noble Lord who made his maiden speech; he gave us a very clear, interesting speech, and we hope he will speak again soon.

My Lords, as I think your Lordships would expect, my own brief intervention will be concerned mainly with the carriage of persons by public transport. Above all, it should give us the opportunity to discuss the problem with a fresh look and to adopt, as has been done this afternoon, an entirely apolitical approach. This is helped by the fact that in the past few weeks there have been valuable reports on public transport by the National Consumer Council and the National Consumer Council for Wales. The NCC has identified the consumer's problems under three headings: the cost of services; their availability and frequency; and their quality. The latter points come back, in a high degree, to reliability, and that reflects the theme of the Motion, because in urban areas the major stumbling block to maintaining timetables is traffic congestion. At this stage I shall leave what I had planned to say because it has been covered by the opening speakers. Nevertheless, there is still a great deal for all of us to talk about and, therefore, your Lordships will forgive me if I speak from a few notes.

The first matter that I should like to deal with is cost of services, their availability and frequency and their quality. Indeed, this is very much the theme of everybody's speech. There is a great advantage if people travel by public transport. My noble friend and others mentioned that only half the population have driving licences and a high proportion of people do not have regular access to motor-cars. That is fine. However, even half that population in their motor-cars can cause appalling congestion compared to the great number of people who are carried by public transport, either by road or by rail. Also, on the question of cost, travelling by public transport is not as flexible or as personal as driving about in one's own car. Nevertheless, it is easier—one can read one's newspaper and so on—and as a free nation I think that everyone likes to do his or her own thing. Therefore, cost is very important. Unfortunately, successive Governments have always increased fares, and every time fares have gone up—and they have gone up even ahead of inflation—the number of people travelling has fallen and, therefore, the availability of services, their frequency and their quality have also fallen. So all these matters are very much interrelated and they show the importance of subsidies.

I noticed that in my noble friend's speech mention was made of the cost to the ratepayers. Be that as it may, I think that in order to maintain a good public transport system subsidies are important as regards the wider issues. I shall not go into the "whys" and "wherefores" of London Transport. But I do think that lessons should be learnt, and figures should be studied very carefully of people travelling in the Great Wen between October and March, and whether the traffic flowed easier, whether more people were travelling and so on. As I have said, we are being apolitical. Unfortunately, when the GLC presented this to us—in my view, if I am allowed to be political, it was very clumsily done—I think that quite rightly the people of Bromley who were not affected but who still had to pay high British Rail fares, had every ground to complain. In the end, there should be many lessons to be learnt from London and other cities—indeed from everywhere. If we are to benefit from low cost transport, let us study the matter. I believe that such studies are carried out in many countries. Another point to mention is that within the Common Market countries only ourselves and Greece show a declining number of people travelling by public transport. This is a pity.

Mention has been made of costs, and that affects availability of routes. As regards the railways, we have more or less the same number of routes. The railways have done great things to persuade people to travel on trains, by their "bargain breaks", family rail cards and so on. Whether their costing is warranted, one does not know. However, they have conducted a fairly aggressive marketing policy for people to travel on trains and I think that people are doing so. That could also apply to express coaches.

It has also been mentioned that since the 1980 Act there has been a great increase in the number of people travelling by coach. There has been more flexibility, which is absolutely splendid. Travel by coach is generally for long distances, and quite often for social needs and not for basic essential needs. As a result, I do not think that the stage carriage has benefited at all. What we are really talking about are the essential needs of transport—people going to work, people going to shop, people going out in the evening; and another aspect which I do not think has been mentioned this afternoon is that of safety against road accidents. Many road accidents are, I believe the term is, "drink related", resulting from people going to parties and so on. If the possibility of not necessarily hiring a huge coach but, for example, a minibus, were explored even further and encouraged, and people could get together and hire such transport and have a jolly good evening out yet not needing to worry about accident, it would be a great advantage.

Another matter that I should like to mention as regards cost is the one-man operation. It might he cost effective but it quite often deters people from travelling if they have to sit on a bus while the poor driver collects the fares from everybody boarding it. It is all right if there is one fare covering all journeys, or a coin in the slot would be quicker. But if there is a fare stage structure, it takes hours, and it is frustrating for the motorist and causes congestion. It might be economical and I am sure that in rural areas it can work very well and be an advantage. However, it can be a disadvantage in cities, and that is something that we need to consider.

I shall not go on for very much longer. I think that perhaps I may not have covered the quality of service. I think that there is some comfort to be drawn here, and I suppose that in some ways we are getting better at it. Long distance trains are being made more comfortable. One would like to see them cleaner, but quite often, public habit influences that aspect. It is quite interesting to find that, if one travels on certain suburban trains in certain areas, the standard of graffiti differs. It is very difficult for operators always to keep buses clean.

Mention has been made of investment. Noble Lords have talked with great authority and from prepared speeches on investment. I should like to concentrate entirely:on public road transport and the maintenance of vehicles. This has very much declined. When I was in the industry some 15 to 20 years ago, one had the advantage when one drove one's bus on to the pump at night, that one could submit a defect card and there would be people who would be able to give you more clutch stop, more on the brakes or generally maintain the vehicle. Unfortunately, this service has somewhat declined. Also, pits for renovating buses were designed for forward engines or under-floor engines. Now buses have engines at the rear and so these pits are largely obsolete. One should like to see some emphasis put on that matter.

I could mention many other things. We have the Transport Bill before us and we shall go into the question of buses again. Anyway, this has been a most interesting debate. I again thank my noble friend for initiating it and I await with interest to hear my noble friend who is to reply.

6.40 p.m.

Baroness Macleod of Borve

My Lords, like other noble Lords, I am very grateful to my noble friend Lord Lucas of Chilworth for initiating this debate this evening; and congratulate the noble Lord, Lord Cayzer, on his expert maiden speech. The debate has been wide-ranging, and indeed noble Lords who have already spoken have covered practically all the points upon which initially I had thought of speaking. So I shall concentrate tonight on only two small aspects. We have heard of the M roads, the big roads, the rails and the autobahns. I do not think your Lordships will mind if I lead you down a little country lane.

The various systems of inland transport have already been discussed. But people have to use those systems, and it is the people about whom I want to speak briefly this evening. I have been a car driver since I was 17 years old—a long time ago. Being disabled, I cannot use the buses, so I cannot travel on the transport referred to by my noble friend Lord Teviot. However, I know a certain amount about motor-cycles and cyclists. So it is a form of two-wheeled transport about which I wish to say a very few words this evening.

The noble Lord, Lord Underhill, and indeed my noble friend Lord Orr-Ewing spoke about pedal cycles, but motor-cyclists and the safety of motor-cyclists on our roads today are what have concerned me for a very long time. Today I have had the opportunity of finding out the latest figures of those killed on our roads using the two forms of two-wheeled transport and those who have been seriously injured. I am pleased to say that from the figures I have received it seems that in 1981 fewer people riding motor-cycles were killed—though only marginally fewer—than in 1980. The total in 1980 was 1,163, whereas in 1981—the last figures available—in the first quarter 205 were killed, in the second quarter 296, and in the third quarter 356, and in that quarter there was a drop of 7 per cent. However, the seriously injured in those quarters amounted to 3,378 in the first quarter, 5,567 in the second quarter and 6,679 in the third quarter, which was up by 5 per cent.

It seems to me that cyclists—perhaps the old-fashioned variety of non-mechanised transport—must be taken into our considerations when we are talking about the users of our roads. In 1980 302 were killed, but in the first quarter of 1981 54 were killed, in the second quarter 89, and in the third quarter 85, and 3,005 were seriously injured during the first three quarters of 1981. I believe that we must do something for these people, who are mostly young.

Safety seems to me to be part of training. During one of our recent debates the Minister said—and it is, indeed, in an Act—that motor-cyclists shall receive two-part training. I am very sorry to have discovered that, whereas when we discussed this Bill it was thought that the RAC and the ACU would undertake the two-part training of our motor-cyclists, unfortunately—it is a voluntary scheme—the people involved are not now able to give the time that is necessary to fulfil their obligations under the new Act. Therefore, the RAC has had to give up its part of the training.

I should like to ask the Minister what will happen to this, to me, vitally important aspect of educating the young people in our country to use their motorcycles wisely and safely. I was also told when I raised the subject of good manners, which also seems to me to be part of safety, that there was no time to teach the young people anything except a rudimentary knowledge of the Highway Code and how to use their motorcycles on the roads. Therefore, good manners have been left out of the curriculum.

Conspicuity—a word which has been brought into our language recently when we have discussed the safety problems of these people—is also very essential, not only for motor-cycle users but also for the other two-wheeled riders of the pedal cycles. Those of us who drive, as I do, round London every day and in and out of London every day will have noticed that pedal cyclists come very fast from every angle and are almost impossible to see. I think that it is amazing that there are so few accidents, but to my mind every accident is very important, and when it leads to a death it is extremely important.

I am also informed that the state of our roads leads to a great many accidents for those people about whom I am talking because, as most of us know, the local authorities do not maintain the roads to the standards that we would like to see. There are potholes and pitfalls in the roads—and I do not include the humps on which my noble friend is so keen, and on which I am not. Motor-cyclists come along and go into the great holes and fall off their machines; they are run over by a car and killed. That is my information, which I have gleaned from several hours' work, but it is also my view that far more should be done for these two-wheeled people who use our roads.

In conclusion—and I promised that I would be the shortest speaker—I should like to pay one very quick tribute to Motorail. I prefer not to travel by rail for all sorts of reasons—the platforms are too long for me —but when I take my car to Scotland, as I try to do every year—Motorail is excessively helpful in getting me and my car on the train and getting us off. So I should like to pay a small tribute to Motorail. I am also very grateful to my noble friend for initiating this debate.

Lord Ferrier

My Lords, before my noble friend sits down, is there not a new regulation that motor-cycle learners shall not ride machines of greater horsepower than 2½?

Broness Macleod of Borve

My Lords, yes, that is true.

6.50 p.m.

The Countess of Loudoun

My Lords, like my noble kinsman Lord St. Davids, I should like to say a few words about water transport. In the United Kingdom the various modes of inland transport—road, rail, waterway and pipeline—have developed separately. Waterway transport was the first method of moving goods on a large scale, but, with the advent of rail and good roads, little further investment was made in waterways to enable them to compete. As a result, the potential of waterway transport has been virtually ignored. The past few years have shown a welcome change of approach by Government. In 1978 the first major improvement to a waterway for freight transport purposes since 1905 was authorised. The scheme for the Sheffield and South Yorkshire Navigation is due for completion early in 1983 and will facilitate the passage of craft to Rotherham in the heart of the South Yorkshire industrial conurbation.

Another welcome development is the provision under Section 36 of the Transport Act 1981 for grants to the private sector towards the cost of waterway infrastructure projects which will result, we hope, in a reduction of traffic on roads, thus easing the congestion on these roads and in the cities, albeit in a very small way. Nevertheless, there is still a need to rectify the imbalance in investment criteria for the various transport modes. Unlike the roads, improvements to a waterway for freight transport purposes carry a heavy financial burden in interest charges for which the customer has to pay. Competition between transport modes should be based on rules which are clearly equitable and fair.

Now why am I in favour of the greater use of water transport. What arc some of the benefits, as I see them? The introduction of push tow techniques has reinforced the fact that waterway transport is cost-effective. Operating costs per ton are low, and the serviceable life of a barge is 25 to 30 years—much in excess of that of a road vehicle. Studies carried out in Europe, the United States of America, and the United Kingdom have shown that water transport is more energy efficient than rail and, on average, between four and five-times more so than road transport.

Waterways are friendly to the environment. There is little noise, vibration, pollution or visual intrusion—all matters on the credit side. Waterways are already used extensively for the removal of household waste and sewage and industrial sludges. They are also eminently suitable for the movement of hazardous and dangerous goods. Substantial quantities of petroleum products, caustic soda, sulphuric acid and chlorine are already moved by inland waterways. There has been growing public concern over the danger of transporting such goods by road. The inherent safety of water transport makes it ideal for the movement of substances with explosive, radioactive, toxic, corrosive, and inflammable properties.

Other opportunities for water transport arise in the movement of heavy lifts. In 1981 a large water processing unit was moved by water from Gloucester to Avonmouth for export to Abu Dhabi. The movement of such loads by rail can present problems because of loading gauge restrictions, and transport by road involves disruption of traffic and the risk of damage to bridges. There is increasing evidence of opportunities for growth in the commercial waterways with regard to the carriage of freight, but the co-operation of the local authorities concerned must be secured to provide suitable industry alongside the waterways.

Inland waterway transport in the United Kingdom appears to have reached a turning point. The decline in tonnages moved in recent years has been arrested. With a fairer distribution of transport resources, and bearing in mind the changing traffic patterns and present-day needs, the commercial waterways can play a bigger part in the transport needs of the United Kingdom.

6.54 p.m.

Baroness Elliot of Harwood

My Lords, we have heard most interesting speeches and we are indebted to the noble Lord, Lord Lucas, for having introduced this debate. It shows also how much agreement there is in your Lordships' House on a subject of this kind. I have listened to all the speeches and I have agreed with everything that the noble Lord, Lord Underhill, had to say, and I admired the way he put it; I have agreed with everything that the noble Lord, Lord Taylor, said, he having had great experience on the board of a Scottish railway; and I have also agreed with many other people. I was interested in Lady Loudoun's description of waterways, of which I am afraid I know absolutely nothing but which I am quite sure are very important.

I should like to join those who are supporters of, and users of, the railways. I am a great supporter of the railways, and always have been, for several reasons. First, the railways are a much safer way of travelling than any other. Accidents on railways arc far fewer than accidents on the roads. For the travelling public —and I am one of them—rail travel is far less tiring than driving either on roads or motorways, though one has to drive a certain amount on the roads, of course. Distances are more quickly covered. The night sleepers, which I use twice a week, save hours of time. You arrive in the morning at breakfast time and you have the whole day for your work, and it is a good method of saving time.

The more traffic increases on the roads, the more vast sums have to be spent on motorways and paid for by the taxpayers. The noble Lord, Lord Taylor, pointed out that much of the debt which appears on the railways appears because they have to pay for their track and for their expenses, whereas the roads are in a more fortunate position. It all comes back to us in the end, but the fact is that roads have more public money. For British Rail there is every advantage. Long distances can be covered faster every year and in great comfort, and commuters, who only use the railways for short distances, get up and down into the big cities far more easily by rail than by road.

I hope your Lordships will read the annual report of British Rail. It is a fascinating document, and it puts the case for the railways very succinctly. Passenger receipts have passed the billion mark in this new report. The volume of passenger traffic alone is 8 per cent. up in the last five years. Freight losses have halved due to improved productivity, and I believe that that could be increased if more freight went on the railways, excluding of course perishable goods, for which lorry traffic is much more convenient and better.

Freight traffic is increasing all the time. Ninety per cent of all the passenger trains arrive within five minutes of scheduled time. I think it was said by the noble Lord, Lord Orr-Ewing, that international comparison shows that British Rail is the most cost-effective railway in the world. What is it, then, that we need to improve our railway system? It is quite simple. We must provide more capital for investment. In a policy document published in 1981, British Rail put forward excellent plans to replace the worn out rolling stock, to electrify the railways, and the diesel engines, and to try to improve the railway equipment which is extremely old. I think again it was the noble Lord, Lord Taylor, who said that the diesel engines are between 20 and 30 years old, and new rolling stock is badly needed. Travelling, as I do, twice a week to Scotland and back, I realise how old the rolling stock is. I have been sleeping in the same berths since the war. Renewal is vital if the whole thing is not to come to a stop.

Most important of all, as the noble Lord, Lord Underhill, said, is to electrify the railways. Not only is it absolutely vital, but it has every advantage, including speed, economy in running costs, comfort and savings in oil. The Government are committed to a 10-year plan, and that is the basis of the future economy of the railway business. One of our great companies, Balfour Beatty, have new contracts to electrify lines in the United Kingdom—some of them have been mentioned, including Manchester, Liverpool and London—and they have contracts for India and elsewhere. Unless electrification goes on in the United Kingdom, their field team of skilled men will be reduced, as I learnt from attending a meeting called by the noble Viscount, Lord Sidmouth, to discuss the railways. That company had a skilled team of 252 men, but in August 1981 the number was reduced to 190 and, if any scheme is halted, the team will be further reduced to 52 and then to 35, all because of the slowdown in the rate of electrification. Unless electrification goes ahead, skilled teams like that will come to and end, and that will mean an enormous increase in expenditure when electrification takes place, by which time the teams will have been disbanded. To allow that to happen would be a false economy because it must mean increased expenditure when it is finally done, and at the same time our railways will be falling behind those of other countries.

At that meeting, a member of the European Parliament said that European countries invested more in their railways than we did. For example, in France, new investment worth £830 million had gained 40 per cent. new passengers and was already earning 20 per cent. more in returns. Countries in Europe generally have flexible rostering. Though it is a controversial subject, it is standard practice in Europe. What we need is a definite commitment by the Government to long-term investment without interruption. Skilled teams must be kept together because that way the work is done more quickly and economically.

I congratulate British Rail on the many new ways they are helping their customers, including the rail card for disabled people, the old age pension card, which I use continually, and the £2 ticket for a month's travel. All those items encourage people to travel by train. In addition, I can say from long experience that BR are to be congratulated on the efficient and courteous way in which the staff serve their customers.

In the current annual report, Sir Peter Parker defines the objects of British Rail now as, first, to modernise the services; secondly, to give better value for money; and, thirdly, to be a competing railway. BR must compete efficiently with their existing assets, which are many. Investment in capital equipment will give a valuable return to the nation and of course to the customers who use the railways. Competing through efficient, new-style management and attracting new customers is another of Sir Peter Parker's definitions for the future.

In the policy document to which I referred, all the plans point to 1983 being a crucial year. Unless we are then replacing worn-out engines, rolling stock and other vital equipment, the railways will be beyond repair. If we do not do what is recommended in that report, endless closures will take place. Already in some areas there are no railways. I live in such an area. If you want to get to a train you must drive 50 miles, making 100 miles for the return journey to the station. There are threats to North Scotland's railways—north of Aberdeen, possibly up to Inverness —people cannot afford to fly (it is three times as expensive as travelling by rail) and cars and petrol are much more expensive than the railways, and of course call for more roads.

Now is our chance to modernise and electrify, and that is vital. The trade unions know it, for their interest is the same as ours, and the management and customers hope very much that the co-operation which we all want to see between unions, management and customers will now really take place. I appeal to them all to help in every way so that the whole nation may benefit.

7.6 p.m.

Viscount St. Davids

My Lords, I thank the noble Lord, Lord Lucas, for initiating this debate and for asking me to speak in it about waterways. I will not disappoint him. Nor will I disappoint the noble Lord, Lord Ferrier, with every word of whose speech on waterways I thoroughly agreed. I am glad I have one more convert to the idea of the barge-carrying ship.

In talking about the waterways in connection with transport, let us first consider what they cannot do. There is absolutely no sense in trying to make our narrow waterways—our little old waterways with 7ft. wide locks—into cargo-carrying waterways. That could not be done economically, and any attempt to do so would merely cause larger financial losses. As for passengers, the narrow waterways have a small and limited purpose; they can be used to decoy people on holiday away from the horribly noisy roads on to the peaceful, quiet waterways. There, the narrow waterways have a limited use.

Their real use in transport is in respect of the major waterways which lead inland from the seaports. Seaports are places which positively generate traffic jams. There is no better way of producing a traffic jam than taking a very large object and loading or unloading its contents into and out of a large number of small objects. When you do that in a limited area, you not only create a fine traffic jam but you also have the problem of people wanting to live in the vicinity and therefore needing houses, shops, public transport, their own motor-cars and all sorts of other things, the result being that every major seaport creates a bad case of traffic jams.

There is only one way to overcome that difficulty; it is to spread the traffic out, and here I would make a point which will interest the noble Lord, Lord Underhill. The Dock Regulation Acts have done a great deal of good, possibly not intentionally, in that they have spread our seaports all along the coast instead of concentrating them in a few long-established spots. The result has been to spread the traffic out. I am sure that was not meant, but the result has been wholly good, and it has also caused a large outbreak of private enterprise, in praise of which I feel sure the noble Lord, Lord Cayzer—I thank him for his speech, of which I greatly approved—would join me.

How does one spread out these ports? One of the best ways is to spread them further inland, as far as possible along natural or artificial waterways. It can be done in several ways. One way is further to develop the low profile, short seas ship, which can go up into the great European waterways—in many cases right up into the interior of Europe—which can cross the seas, and can come up our major rivers, such as the Thames, the Trent, the Severn, and so on. There is a great possibility of doing that. There is also the self-propelled motor barge which can be used on our own inland waterways; in particular, as my noble relative said, on the major waterways of the Yorkshire area, which have recently been enlarged and which will soon be complete. That is another way of doing it.

But undoubtedly the best way of all in the future will be the barge which can be carried aboard a ship. I have talked about this before, and I shall go on talking about it until it happens. Much of the traffic of today is in containers, but one cannot make a road container of more than a certain size, because otherwise it could not be moved along a road. But one can make the container waterproof and float it. Once one can float it, one can have a very much larger container. The containers can be carried aboard ships. When they get to a waterway they can all be dropped into the waterway and, as my noble relative said, a pusher tug can be used to push them in rafts. I am informed that in parts of Europe they are now pushing rafts of these containers of up to 11,000 tonnes at a time. That is a major operation in anybody's estimation.

Those container ships are very valuable in our days. They are especially valuable to us because much of our traffic is now with Europe, and the European waterways are very far developed indeed. But it is not only to Europe that the barge-carrying ships can go; they can go anywhere in the world, and the waterways of the world are everywhere being developed. The Americans are very busy at the moment making brand new waterways, and American container ships are coming here loaded with barges, but at the moment they are not getting as far up our rivers as they should be.

The whole process needs much more developing and we ought to have container ships. I was glad to hear that British Waterways is going into a consortium with private enterprise to build barge-carrying ships which it is hoped to use in the near future in this country. This is the great development because in this way we can take goods off the roads, not just in small quantities, but in really large quantities. It is all very well talking about small developments, and it is perfectly true that a large number of small developments will produce a bigger effect, but here is a really large effect than can be achieved comparatively simply.

If I had just one major point to make in a speech on the subject of waterways and if I were to put that point alone, I would echo the noble Lord, Lord Ferrier. I would say that what we really need in this country to make our inland transport and our cross-seas transport easier, cheaper, more pleasant, less polluting, and more cost effective, with less consumption of valuable fuel, is more barge-carrying ships. Let us expand our waterways until they can take the container barges, which can then be pushed right up into the centre of our country, wherever our industry needs them.

7.16 p.m.

Lord Renton

My Lords, I doubt whether when he tabled his Motion my noble friend Lord Lucas of Chilworth expected that we would have such fascinating discussions on inland waterways and container ships. Before I go any further I should like to join in the chorus of welcome for the maiden speech of my noble friend Lord Cayzer. His mention of container ships has started something terribly important, because it prompts us to realise that our future economic prosperity is so much linked with Europe.

If I may follow up what the noble Viscount, Lord St. Davids, said, I would say that the link between Europe and the East Coast ports through the container ships is essential to our prosperity, and it follows that the link between the East Coast ports and the manufacturing towns of the Midlands is also essential. Successive Governments have not done too badly up to a point (something to which my noble friend Lord Ferrier referred) in improving the road system by means of dual carriageways, especially on the A.604 between the East Coast ports and the Midlands. But the dual carriageway system westwards ceases when we get to the A.1, and there is a vital, long overdue need for the link between the A.1 and the M.1. to be completed. I pay tribute to what has so far been done, as far as Huntingdon. T am referring to matters with which lam so familiar, because I was the Member for Huntingdonshire for a third of a century, and in those days I started agitating for the A.1-M.1 link to he completed, but work on the completion has still not been started.

Perhaps I am being a little unfair to my noble friend Lord Avon in not having given him notice, and I do not suppose that he is in a position to discuss this particular point, but I hope that he will take it on board, as we now say. It is essential that the link should be completed. It is planned, but not as a dual carriageway, and the idea of an A.1-M.1 link which is not planned as a dual carriageway is just plain shortsighted.

Of course there is a need for various by-passes, too, in that part of the world. As my noble friend said, Huntingdon has its by-pass, but Thrapston needs a by-pass. The A.45, which is also an east-west route, is not planned to become a dual carriageway in the foreseeable future, so far as I know, but it is nevertheless a very important route. Further by-passes are badly needed at St. Neots, Kimbolton and Kettering. I mention those factors in the debate because they seem to me to complete the saga which has been so vividly described by my noble friend Lord Cayzer, the noble Viscount, Lord St. Davids, and others.

I am one of those old-fashioned people who is always grateful for an excuse for nostalgia. That is one of the reasons why I am grateful to my noble friend Lord Lucas, because, when I came down from Oxford, I started life in Paddington Station, where I was a pupil of the Great Western Railway, and that has given me a lifelong sympathy towards the case for the railways. May I say straight away that I agree with the noble Lord, Lord Underhill, when he says that we must have an effective railway system. He thinks that, in order to achieve that, it must be part of a fully planned and integrated system; but very early in the debate the noble Lord, Lord Tordoff, disagreed with him—I think rightly—and I disagree with him, too. It is not merely the complexity that Lord Tordoff mentioned, which makes planning on this kind of scale and in this kind of detail extremely difficult. The trouble is that consumer demand changes. If consumer demand were a constant, you could do a great deal of planning; but, in the very nature of our rapidly evolving economic and social life, you have to have more flexibility than a planned and integrated system will allow.

Lord Underhill fairly asked: do the Government have a transport policy? The Government certainly have a transport policy for the railways, and I suggest that this Government have done more than any other Administration in the last 20 to 30 years to ensure that the railways have a successful future. May I just mention four important points of their policy for the railways. First, the Government have put more money into the railways, by raising the external financial provision in each of the last two years—this is in real terms—more than has been done before and by putting the Exchequer grant for passenger services in 1981 to the formidable sum of £755 million.

Secondly, they have ruled out any further substantial cuts in the passenger network. Thirdly, they have endorsed the principle of a programme of mainline electrification, on which good progress had been made over a good many years under all Governments; and it is worth mentioning in passing as we were talking about the East Coast ports, that in December the Secretary of State for Transport approved plans for electrifying the railway services into Harwich, Norwich and Ipswich. Fourth, but by no means last, this Government have avoided any reduction in the ceiling on investment in British Railways.

That is not bad; but it is surely common ground between us all that the Government, the taxpayer and the travelling public are all united, as we are in your Lordships' House, to see an efficient, cost-effective and well-invested railway system. However, I fear that they will never get it if the unions insist on more men being employed than the railways require, or on their being paid ever-increasing wages with no regard to productivity. These are fundamental facts which need to be stated. We should not be squeamish about stating these facts, because they are fundamental to what everybody wants to achieve.

One could go much further on this question of the railways, but I wish to make only a very short speech in this interesting debate. All I would say in conclusion is that I wish the Government well in a continuation of their regard for priorities so far as our transport system is concerned, but hope that they will not long delay the completion of the link between the East Coast ports and the Midlands.

7.25 p.m.

Lord Ponsonby of Shulbrede

My Lords, as did other noble Lords, may I start by thanking the noble Lord, Lord Lucas of Chilworth, for initiating the debate this afternoon. Indeed, as was underlined by the noble Lord, Lord Renton, who has just sat down, the debate has been far more wide-ranging, I am sure, than the noble Lord, Lord Lucas, would have guessed. In fact, we seem to have discussed a very wide range of subjects. I was particularly impressed with the maiden speaker, Lord Cayzer, and should like to congratulate him. He was pointing to the changes in the modes of transport which had taken place over the past few decades—the switch from ship to air for long-distance travel; and this, of course, has had very far-reaching effects on the whole economic fabric of many of the British seaside resorts, and of resorts overseas. So it has been a very important switch.

The question which the noble Lord, Lord Lucas, has raised this afternoon is directed at the economic and social consequences of traffic congestion on the roads and in the big cities. Many speakers have spoken, and have indeed concentrated their words, on the broad problems of movement around the country—the building of by-passes, and the position of the British Rail network. The noble Lord, Lord Lucas, in his opening remarks, very rightly underlined the emotional aspects of transportation and the amounts spent by the average householder on it, drawing comparisons between each component of that spending; and he pointed out to us that the more income people had the more money they tended to spend on transport.

He led us to the fact that there was a direct relationship between personal incomes and transport needs, and that higher income groups tended to use more of the transport services. He also stressed that adequate resources should be made available for transport services as a whole, but felt that the balance was not fairly prescribed at the present time. The noble Lord then proceeded to outline his roads policy, and told us how many particular improvements were under construction at the present time. Other noble Lords questioned the amount of land needed for road building. I think the point I want to come to on this is that we do have a slowly improving network of major roads, and a large amount of the freight is carried by road.

Another point which was mentioned by the noble Lord, Lord Lucas, was that public transport in rural areas was an unsolved problem which he did not wish to discuss further this evening, but my noble friend Lord Underhill, however, outlined the importance of retaining a national network to support transport in rural areas. So far as London is concerned, the noble Lord, Lord Lucas, made a case for a political structure for London Transport and for a professional day-to-day running of the transport system. He even supported the idea of a one-for-one subsidy for London Transport, but he underlined the high expense of transport in London. I know that nobody would disagree with that. Indeed, many noble Lords have underlined the point that transport in London is among the most expensive in Europe and that it is one of the least subsidised. But what we need in London and in our major conurbations is a balanced and co-ordinated system with each part of the transport system contributing to the total what it is best able to contribute.

For example, many noble Lords have made the point that certain goods such as coal and oil are best carried by road, whereas it is more convenient for others to be carried by rail. I think it was the noble Lord, Lord Orr-Ewing, who made the point of the massive losses of British Rail since nationalisation. If he were in his place, I would remind him that losses by the railway had been going on for many years before they were nationalised, other than for the short period during the war years when they were used heavily by the Government for troop movements and movements of supplies.

Surely, this must be the criteria by which we judge our public transport system. Surely, our aim must be to ensure the vitality and competitiveness of our major urban conurbations and, coupled with that, the improvement of the environment and the convenience of the users, including pedestrians.

Not many noble Lords have concentrated their remarks on the problems of the big cities. The sheer numbers of pedestrians in central areas have of themselves created hazardous problems and led to the building of pedestrian precincts. However, the problem of the old cities in tackling these are very great. In London we have created traffic-free areas. There has been a great advance in pedestrianisation; areas at Leicester Square, Carnaby Street and South Molton Street are entirely pedestrianised.

I would have been a joy if one had been able to extend that idea and to have created that pedestrian environment in an area such as Oxford Street, but unfortunately the road system in London is such that that particular idea was not possible. But I am glad to say that, for safety reasons, the pavements in Oxford Street are much wider than they used to be. This has made it slightly less hazardous than it was for pedestrians. We also have a situation in Oxford Street where the pedestrian feels that he has almost more importance than the taxis and the buses, which are the only vehicles now allowed in that street.

If one thinks about other European cities such as Munich, Copenhagen, Gothenburg, Cologne, Vienna and Amsterdam—all of these have tried to make im- provements in their city centres to better conditions for the pedestrians. Over the years, talking to civic leaders in these cities, one has found how often particular ideas concerning pedestrians have come about by accident. For example, in Munich it was the building of a subway to join the two low-level rail stations in the main street which led to the creation of a "pedestrianised" street right through the centre of that ancient city and something which is a joy for all who use it. In Gothenburg it was the police concern about the congestion at Christmas time which led to the closing of a particular street to traffic. People then realised that it as quite possible to operate in the city without allowing traffic to use this particular street. People, once having tried the scheme, found it was something which could be extended.

I know that one of the major problems when one is developing schemes of this sort is that one often meets objections from the police. Sometimes it is possible to overrule those objections. But so often it happens that when one creates a pedestrian area one finds that one can manage quite well without that particular artery. I think that a transportation policy in the conurbations in the big cities is inevitably a carrot and stick policy. The carrot is the cheap fare and the stick is the enforcement of parking restrictions. But we must also accept that there are certain aspects of the stick which the public will not accept—such as a cordon to stop cars from going into the whole of a central area. The carrot encourages people to use public transport, which is socially beneficial.

The noble Lord, Lord Orr-Ewing, pointed to the very large number of people who travel to work by public transport and particularly singled out the fact that the number of people who use the bus as their means of travel to work had dropped very substantially in recent years. I think it is important that we should encourage a further switch back to public transport. The noble Lord advocated cheaper fares by British Rail. He felt that British Rail should be more imaginative if they want to see their traffic grow. In fact, British Rail have been very imaginative in a lot of the ideas and fare packages they have introduced in recent years. I am sure that, if their financial position made it possible, they would like to extend the ideas they have been carrying out in recent years.

To return to the question that the noble Lord raised about the drop in the number of people using buses in the inner areas, of course one of the reasons is that people find the bus service more unreliable than Tube transport. They find also that their journey time often tends to be longer. What is needed is to reverse that situation and to encourage people to switch to the use of the bus. I think that the short experiment that we had of cheap fares in London showed that it was possible, given certain conditions, to encourage that switch.

The noble Lord, Lord Teviot, thought that one good thing might be to have more one-man operated buses in London. We found in London that this only works if you have a bus operating on a simple flat-fare system. If you have a multi-fare system the journey time is longer because it takes so long for the driver to collect the fares. The effect of this is that, in order to maintain the same bus service, you have to have more buses operating on a particular route, so the saving you at first thought you had made quickly disappears. As we all know, if one increases the average speed of a bus by something of the order of 2 miles an hour one suddenly has a very improved service indeed. The problem of unclogging the roads is very important, and one of the ways to do this is by the carrot.

Several noble Lords raised the question of the control of London Transport. This is a thorny problem and not one that I want to discuss at length this evening. What is important is the question of the co-ordination between London Transport and Birtish Rail, the question of the ease of moving from one mode of transport to another. Over recent years we have seen vastly improved interchange facilities in London in this field. I am thinking particularly of the interchange facilities between British Rail and London buses at Euston and Victoria. There have been very great steps in this direction there. In conclusion, I should like to say that this has been a very useful debate. A number of useful ideas have been stimulated and I shall be very interested to hear what the noble Earl has to say.

7.41 p.m.

The Earl of Avon

My Lords, we have had a wide-ranging and well-informed debate and, as I have found is usual when this House discusses transport problems, it has produced a lot of original ideas. I join with other noble Lords in saying how grateful I am to my noble friend Lord Lucas for raising and introducing this subject, and also to other noble Lords for their contributions. It is a topic on which it is particularly useful to have such an exchange of ideas. I should also like to congratulate my noble friend Lord Cayzer on his modest and most informative speech. He seemed to cover a great deal of ground in his speech of some 12 minutes. I am sure that the whole House looks forward to hearing him often in the future.

Transport has probably never before been the subject of such acute political controversy. In some ways, political differences about transport policy are inevitable and, indeed, proper, as both the noble Lords, Lord Underhill and Lord Tordoff, said in their opening remarks. Many may find some things which I say are a little bit Conservative—this time with a capital "C". We can legitimately take different views about levels of fares and subsidies, or the extent to which private cars should be controlled in city centres. The big problems arise when transport is deliberately made into a political issue, and when dogma is pursued without regard to consequences and costs.

If I may take traffic congestion first, as that is the first subject raised in my noble friend's Motion. we should look at traffic congestion in its historical context. It is not new. Traffic jams in our cities pre-date the invention of the internal combustion engine. The building of the first underground railways in London was partly a response to the difficulty of moving through streets congested by horse-drawn vehicles.

But of course the major problems have arisen with the growth of motor transport, particularly private cars. The number of cars and the use made of them has increased dramatically. Over the past 30 years, the number of cars and the miles travelled in them has increased by a factor of six. Now, as we have heard, over 80 per cent. of all passenger travel is by car, and over 80 per cent. of freight goes by road. This is a major social and economic shift which was described very well by my noble friend Lord Cayzer.

Inevitably, we tend to dwell on the problems which this immense growth in road transport has brought. But it would give a false picture if we did not also remember the big advantages and benefits. The fact is that where people have the choice they usually prefer to own and use cars. This is a universal phenomenon. The reason is that cars are so convenient in providing door-to-door transport under people's individual control.

Customers have increasingly chosen lorries because of their inherent advantages for most—though certainly not all—kinds of freight traffic in our relatively small country, where average hauls are so short. For many journeys where goods carried by rail would have to be loaded onto lorries at either end, it makes more sense and is more economic for them to go by road the whole distance.

But the growth of traffic has of course brought problems, many of which have been touched on this afternoon. The Government recognise these problems. Congestion is one of them. It wastes time and fuel; it is inefficient; it is frustrating to drivers; it damages the environment; and it causes great annoyance to people who live in streets continually blocked by lines of vehicles.

The problem of congestion has not been solved. Far from it. But let us not underestimate what has been done. The remarkable thing is that we have coped relatively well with the vast increase in traffic. For example, the worst fears of transport planners 20 years ago were that the forecast increase in car ownership would lead to paralysis of our city centres. This has not happened. Indeed, the general trend—there are exceptions—appears to have been for urban traffic speeds to increase slightly over the years.

How has this been done? What are the lessons for the future? Road building can help greatly, though it is not a universal panacea. The motorway network carries a large volume of traffic swiftly and efficiently between the major industrial centres. We have also invested a great deal in other strategic routes, for example by providing by-passes to take traffic out of narrow streets. Imagine what traffic conditions would be like in many towns if we had not built these roads. Imagine, for instance, what conditions would be like in towns such as Marlborough if the M.4 had not been built.

This work continues. The Government are investing about £700 million this year on maintaining and improving trunk roads in England, and local authorities will be spending about £1,200 million on their roads. We have proposals to deal with the worst bottlenecks—for example the two-lane section of the M.1 near Watford, and the Barton Bridge carrying the M.62 over the Manchester Ship Canal. Our top priority is the M.25 round London. This will provide a vital route for traffic from, for example, the Midlands and North trying to get to the Channel ports, avoiding the centre of London. It will save a considerable amount of time for drivers, and will reduce congestion in many communities on the outskirts of London.

The decentralisation of employment and population has also helped because it has meant less traffic in city centres than there would otherwise have been. In urban areas, there are several ways in which we have tried to cope with traffic. I have already covered in some detail in the debate we had on Wednesday, 27th January, what we are doing about traffic control and management, and about parking and enforcement. With your Lordships' permission, I do not intend to go over that ground again. I spoke then about a new generation of traffic control equipment which is coming into use called SCOOT.

The noble Lord, Lord Underhill, talked a little bit about traffic management. I should like to bring to the attention of the House the fact that the traffic management authorities have wide powers to regulate traffic. They can direct heavy traffic to the roads best adapted to take it. They can prohibit the manoeuvres most likely to delay other traffic. They can give priority to buses. They can exclude all traffic—especially from play streets, which another noble Lord mentioned—or some kinds of traffic, from residential or pedestrianised areas. This can make conditions in towns much more civilised. These powers can be exercised by local authorities.

We also came back to our old subject of road humps. I confess that I could not remember whether prams were a good thing or a bad thing on the grounds that you can push a pram over the bridge made by a road hump or alternatively if you are pushing a pram in the road it is rather difficult. No doubt I can refresh my memory on that afterwards.

The noble Lord, Lord Lucas, asked about progress on a number of road schemes, and I am glad to say that on the Winchester section of the M.3 the challenge in the High Court to statutory orders for the Popham-Bar End section has been withdrawn and we should be able to start construction later this year. A consultant study considering all the options south of Bar End is under way and we expect a report by the end of the year. As for the M.1-A.1 link, which was also mentioned by the noble Lord, Lord Renton, preparation has taken longer than expected but we hope to publish draft orders soon.

I have also taken note of my noble friend's other suggestions. He is right when he says that I am not in a position to comment on the by-passes he mentioned. The public inquiry into the M.40 from Oxford to Birmingham will open before the end of this year and we expect to announce the date very soon. The remaining scheme mentioned by my noble friend was the section of the M.20 between Maidstone and Ashford, which duplicates the existing A.20. The A.20 here, although far from ideal, is in better condition than many other older trunk roads, and though it touches two or three villages the environmental problems are not as bad as in many other places. The Government therefore decided in 1980 that design work should be halted for the time being while scarce resources were concentrated on more urgent schemes elsewhere; but the scheme is still in the programme and we shall pick it up again as soon as there is a prospect of finding the money to build it.

My noble friend Lord Ferrier, in a lively speech containing some intriguing suggestions on transport, referred to the question of the Edinburgh outer city by-pass. As my noble friend will recall from previous discussions of this road scheme in which he has taken such an interest, this is not a trunk road and thus not a Government responsibility. The responsible highway authority is the Lothian Region and this important road scheme is their top priority. They are proceeding with it as quickly as they can, and I note what he has said about delay. The Government are involved in providing finance for the scheme and I am happy to be able to say that, despite the difficult decisions which have had to be made about public expenditure, we have managed to give Lothian more money over the next few years in order to allow them to make progress as fast as they can.

My noble friend Lord Lucas also asked about proposals for using private funds for road building. The Government firmly believe that increasing the diversity of funding could have many advantages. As the noble Lord said, a number of construction companies have expressed an interest in schemes based on a royalty system, and the Economic Development Committee for Civil Engineering have also been looking into this. The use of private finance raises a number of fundamental questions which the Government have had to consider. This has taken some time, but I am glad to say that the Department of Transport will shortly be inviting the construction industry to discuss whether a scheme can be found which meets the needs of both the Government and the industry.

The noble Lord, Lord Underhill, mentioned bicycles and my noble friend Lady Macleod mentioned pedal cycles. The Government are encouraging local authorities to put forward schemes in this field, and there is a general awareness about these matters. I believe the first lights are shortly to be turned on in London at a cycle crossing out of Hyde Park. There is to be an expansion and improvement of the national cycling proficiency scheme which RoSPA plan for this year, and we now give encouragement to cyclists to be conspicuous and to motorists to look out for cyclists. In fact, a TV publicity campaign took place in London last summer. A high priority is being given to road maintenance expenditure by local authorities and the majority of counties in the last round had their bids accepted in full. I agree with my noble friend Lady Macleod about cycling, and I should like to say that I personally believe that one of the major ways of cutting down the loss of life would be to obey the Highway Code. That would be the quickest way to reduce casualties.

To come on to motor-cycle safety, as the House will recall, in the Transport Act 1981 we took some measures geared towards this. There was a reduction in the size of the learner machine; there was a limit on the duration of the motor-cycle provisional licence and there was a two-part test. The object has been to give encouragement to learners to take training and pass these tests. Also, as my noble friend Lord Ferrier mentioned, new learner machines have been introduced because the present 250 cc machine is too powerful for the average learner-driver.

Finally, my noble friend Lady Macleod asked about the withdrawal of the RAC-ACU from motor-cycle rider training. This is regrettable but we do not believe it will seriously affect the new scheme. The RAC-ACU grant will now be made available to the Motor Cycle Safety Foundation and this will help defray the initial costs of the training organisations, including the former RAC and ACU centres which wish to join this scheme.

Turning to the special traffic problems in London—and I am grateful to the noble Lord, Lord Ponsonby of Shulbrede, for taking us on a walkabout of some of the new spots—I believe that, contrary to general experience, the average speeds in London have not improved, and of course there is no easy solution. Sadly, in London the GLC's roads programme has been a political football over a number of years and the present GLC has a declared bias towards a purely public transport solution to London's problem. It was decided against proceeding with all but a few major road schemes. This lack of balance—the theme of my noble friend's Motion—does nothing to help the problems of London.

So far as the Government's direct responsibilities are concerned, a great deal is being done to improve the road network in and around London. Plans for the current trunk road programme within and bordering the GLC area will cost about £1 billion over the next 10 years. I have already mentioned the M.25. Other projects include further improvements to the North Circular Road, with dual carriageways and improvements to junctions; the East London River Crossing plus connecting routes, which will form strategic links for the Docklands; and the improvement of other key radial routes into London, including the A.20 and the A40.

This major programme has three main aims. The first aim is to help the economy of London, notably with the revival of the Docklands. The second aim is to meet London's environmental needs by providing routes which will relieve badly congested other roads; a good example is the M.11-Hackney link which will relieve Leytonstone High Road. The third aim is to improve safety; and this point was made by several noble Lords. One example is the improvement of the junctions on the North Circular to separate pedestrians and traffic. This will deal with some notorious accident black-spots.

I now turn to the other main part of my noble friend's Motion: the need for balanced, efficient and economically viable rail and road transport systems which do not place excessive burdens on taxpayers or ratepayers". The Government agree with every word of that proposition. I should like to explain why, and what we are doing about it. Before doing so, I should like to say that the Government do not treat traffic congestion in isolation from these other aspects of transport policy. Obviously there are most important connections between the two. In particular, the large numbers of people who travel to work in our city centres could not possibly all get to work by private car. Over a million people travel into central London each working day and 80 per cent. come by public transport. If they all tried to come by car, they simply would not get to work, or if they did, there would be nowhere for them to park.

The noble Lord, Lord Underhill, asked whether there was a separate sub-department within the department which dealt with the environment. In point of fact there is not, and I think there are two reasons. One is its close involvement with the Department of the Environment itself. As the noble Lord is well aware, they have been part of each other; then they separated and later became part of each other again. Secondly, they do involve themselves very much with the environment and, if I might give an example, the transport department is actually involved with landscaping.

Another noble Lord produced the theory that trains and buses are more fuel efficient than cars. In practice their fuel efficiency depends on their load factor, and a car carrying four people can be more fuel efficient than an almost empty train. It does not make economic or energy sense to run more trains or buses than are needed, as that would not save fuel.

There are obvious lessons here. A balanced transport policy is one which recognises, first, the proper role of each mode and the need for a reasonable level of subsidy for public transport and, secondly, that resources for transport, as for everything else, are limited. So the more efficient the transport operators are the more both passengers and taxpayers will benefit. The third point is the recognition that we get nothing free in transport. There is no pot of gold. Most clearly, higher subsidies mean higher taxation. The Government believe that subsidies are necessary to run an adequate public transport system. But it is important to be sure that we are getting something worthwhile for the subsidies that are paid.

Consider, my Lords, the example of subsidies for buses. This year we are grant aiding through Transport Supplementary Grant £260 million of local authorities' spending on bus subsidies in England. The bus industry as a whole receives more than £1 billion a year in support from the public purse. These are large sums of money. The Government are bound to be concerned to see that we get good value. It is easy, as we have seen, to increase the cost of subsidies very quickly indeed, if fares are cut or allowed to get out of line with changes in costs. Deliberately low fares, unrelated to costs, will not change the long-term downward trend in the use of bus services. They may postpone a decline temporarily, and at great cost, but, in themselves, these policies are not going to reverse the slow decline in public transport use.

But the bus industry is, and will continue to be, a large and essential part of our transport system. Even if there were to be no subsidies at all, the Transport and Road Research Laboratory have estimated that by the year 2000 the use of buses would be between a half and four-fifths of present-day levels, depending on the rate of economic growth. The Government have no intention of accepting even that level of decline in bus services. On the contrary, we have made it clear that we foresee a continuing need for bus subsidies in future years. But they will be at levels that strike a fair balance between the travelling public and the taxpayers and ratepayers who meet the cost.

The levels of public expenditure on subsidies for which we are providing will allow an adequate standard of bus services to be maintained, provided that services are tailored to demands, that fare levels are kept in reasonable line with inflation and that services are operated efficiently. That puts a responsibility on operators and local authorities to look closely at what these subsidies are buying, whether they are buying the right services and whether there are ways of providing those services at lower cost.

These themes have been vividly illustrated recently in London. The GLC took a decisive step to try to solve London's traffic problems at a stroke by introducing a massive reduction in London Transport fares. This was misguided and, as we learned, illegal. Since the judgment of the Law Lords, the GLC have mounted a publicity campaign—at a cost to their ratepayers of £¼ million—aimed at forcing the Government to introduce emergency legislation to enable them to return to their extravagant low fares policy.

Lord Teviot

My Lords, I do not think I even apologise for interrupting. Is my noble friend aware that he is giving us the most appalling bromide about Government costs and everything else? In this debate we have tried to suggest something to enliven public transport and to give a bit of initiative. My noble friend is going back over the same old ground about cost effectiveness, but what we are trying to do is to suggest something to avoid congestion. We are only going through what successive Governments have tried to do about costs and other things. What we are trying to do is to look at a much wider policy. I wish that my noble friend would slightly develop his theme on that. I have probably not been concise or constructive, and I am sure that other people could interrupt him and do rather better than I have done.

The Earl of Avon

My Lords, if I understood my noble friend aright, I think he will discover, if he reads the report of my remarks, that I have been stating a reasoned and general policy. If I may continue from where I was, we are not prepared to legislate to turn back the clock. But the Government have taken urgent action to resolve the immediate problems. We introduced the Travel Concessions (London) Act to enable the GLC to support concessionary fares. And we offered legislation—which the GLC declined—to enable the £125 million deficit from the low fares policy to be spread over five years, cushioning the impact on fares. I must make it clear that the Government support the payment of a reasonable level of subsidy to maintain essential transport services. Last year some £250 million was paid to London Transport in various grants, and a similar level of subsidy will he available in 1982. About £100 million of this support comes from the national taxpayer.

I can quite understand that many people see advantages in low fares. But the GLC has not owned up to the enormous cost to the ratepayers of their way of achieving this. Over the next four years, it would have cost about an extra £1,200 million. Many people, such as pensioners or those living in some outer boroughs, stood to gain nothing from it. Many ratepayers could ill afford to finance the policy. By its impact on industrial and commercial ratepayers it would have damaged the prospects for jobs in London. The tragedy is that, even on the GLC's own estimates, their low fares policy would have had only a marginal effect on private car journeys, while at the same time cutting back on the scope for financing much needed road improvements.

A truly fair fares policy must balance the interests of the traveller, the ratepayer and the taxpayer. The GLC policy failed to do this. Nor did it consider the possibility of achieving savings through increases in efficiency and productivity. If London Transport had achieved the productivity levels of other major cities in this country, about £80 million a year would be available to reduce fares. Instead, the policy was to increase services and wage costs at the ratepayer's expense. This did not give good value for money. The Government are not prepared to legislate merely to enable the GLC to return to its old extravagant policies.

Lord Tordoff

My Lords, I must apologise to the noble Lord for interrupting again, but I really take the point of his noble friend that we have carefully stayed away from this rather polemical subject this afternoon. So I wonder whether the noble Earl could draw that part of his remarks to a close, lest people on other Benches of this House may get rather over-excited at this late hour of the night.

The Earl of Avon

My Lords, I am grateful to the noble Lord for his advice. I had come to the end on that point. Noble Lords have mentioned the levels of subsidy paid to the public transport systems in various European cities, and we feel that such comparisons are often made on a rather selective basis. For one thing, the comparisons are invariably over-simplified and misleading, because it is virtually impossible to transpose the accounts of foreign transport undertakings so as to permit a thorough and accurate comparison. For example, the figures quoted often omit capital grants, which obviously make a difference.

If I may now turn to the railways, similar general principles—efficiency, economy, balance, proper regard to the interest of taxpayers—apply to the railways. The railways have an essential role to play in our transport system, and I assure the noble Viscount, Lord Sidmouth, that the Government's support for them has been strong. We have shown flexibility towards their financial difficulties. Recent investment, which has included the introduction of the High Speed Train—much praised this afternoon—major infrastructure schemes and rolling stock replacement programmes, gives the lie to criticisms that investment provision has been inadequate. We shall continue our support to ensure that the railways have a healthy future.

Some British Rail activities should stand on their own feet. For freight, we believe that the railways should operate in the market place to attract that traffic which is most suitable for rail, and that this business should be operated commercially, without public subsidy. There is one exception, to which I shall return later. Similarly, all the British Railways Board's other business, except the socially necessary passenger services, should be run on fully commercial lines. The board have recently submitted new business plans for Inter-City and freight to achieve this aim.

The socially necessary rail passenger services do require subsidy. At the same time, we are anxious that taxpayers should not suffer as a result of having to support them. These considerations have been taken into account when fixing the grant level for British Rail in 1982. The figure which we have announced of £804 million is less than the board have sought, and represents a cut in real terms on the exceptional grant allowed in 1981. Nevertheless, the figure remains some £100 million higher than grant in 1980, allowing for inflation.

For the first time since the Public Service Obligation Grant was introduced in 1975, a portion of the grant has been earmarked for necessary maintenance and renewal. Other steps are also being taken to improve economy and efficiency. The noble Lord, Lord Taylor of Gryfe, may be interested in this. Mr. P. J. Butler, of the accountants Peat, Marwick, Mitchell and Company, has been asked to make a report on the board's trading position, and this report will form an important part of the review of railway finances which the Government have initiated today. Sir David Serpell, former Permanent Secretary of the Ministry of Transport, and until today a member of the British Railways Board, will chair this independent review, with Mr. Butler, Mr. Goldstein, a senior partner of a firm of consulting engineers, and Mr. Leslie Bond, a director of the Rank Organisation. The terms of reference of the inquiry are: To examine the finances of the railway and associated operations, in the light of all relevant considerations, and to report on options for alternative policies, and their related objectives, designed to secure improved financial results in an efficiently run railway in Great Britain over the next 20 years". The committee's report is expected to illustrate the options open to provide a firm foundation on which the Government can establish clear objectives and make justifiable financial provision for the future of the railways. If we are to invest in the railways, we must look to the railways for achievements in return.

The review of main line electrification, about which a number of noble Lords have spoken, demonstrated a sound financial case for a programme of electrification, based on favourable assumptions about the financial performance of British Rail's freight and Inter-City businesses, which will be the main beneficiaries. The Government were not prepared to make an unconditional commitment to the electrification of an extensive network because the performance of these businesses was deteriorating. We therefore invited the board to draw up a 10-year programme of electrification where the benefits could clearly justify the investment based on new commercial plans for the Inter-City and freight businesses for those potentially profitable main lines.

Lord Underhill

My Lords, I wonder whether the noble Earl could give the House an indication of when decisions will be taken, bearing in mind the fact that the chairman of the British Railways Board has made it quite clear that the investment rate for last year could not be used, due to the EFL, and to the fact that there is a badly needed programme of track and rolling stock renewals.

The Earl of Avon

My Lords, the board are currently preparing this programme and will consider it as soon as it is available. The approval of individual electrification projects within the programme depends not only on the profitability of the investment in question but also on the board's ability to generate the resources necessary to finance the investment.

Improvements in productivity and performance do not all have to depend on costly investment. Some of them will generate resources to allow the investment elsewhere which is essential to the future of the railways. The board have already had much success here, and we pay tribute to them. My right honourable friend the Secretary of State for Transport drew attention to this success when he approved electrification to Norwich, Ipswich and Harwich last December. The board, and the majority of their employees, recognise that continuous progress is essential.

If I may digress, I should like to join with other noble Lords, particularly the noble Lord, Lord Taylor of Gryfe, and my noble friend Lady Elliot of Harwood in their tribute to the great strides which British Rail have made during the last two decades. While in this House we make a lot of suggestions, not criticisms, this should not obscure our own appreciation of them. I should like to say to my noble friend Lady Elliot of Harwood that I hope that in her long, extended journeys in sleeping cars the old rolling stock rocks her to sleep.

If I may say a word about rail privatisation, we also believe that this will help by freeing the subsidies from the restrictions which apply to the public sector and making more resources available to the railways. I am afraid that I have "gone on" for rather a long time, but there was no opener for this side. Therefore, perhaps I may be excused if I just finish off my remarks. There is further room, too, for the disposal of non-operational assets. We are considering with the board how private capital may be introduced into parts of the main railway businesses, or into particular schemes. And we are keen to see pursued such initiatives as low cost operations and the rationalisation of services and infrastructure. In these ways we can seek to ensure that the railways are offering the services that their customers want as efficiently as possible and at the lowest cost to the taxpayer. That is the best way to ensure that they survive as a viable and competitive alternative to other modes of transport.

I should like to touch on fare increases, a point which was raised by my noble friend Lord Orr-Ewing. It is, of course, for the British Railways Board to decide on the size and timing of rail fare increases. This is not a matter in which the department intervenes. British Rail are having to consider measures to repair the financial damage caused by the strike, and I know that they will seek as far as possible to avoid measures which will cause harm. I am sure that the noble Lord will be aware of some of the schemes which British Rail have recently produced and which were accentuated both by the noble Lord, Lord Ponsonby of Shulbrede, and by my noble friend Lady Elliot of Harwood.

The question of rail research has been raised, The British Railways Board's technical centre at Derby is a world leader in the field of technological innovation and the application of scientific techniques to railway systems. I hope that this will continue to be so, and I have no reason to think that it will not. Incidentally, of their £13 million research budget, some £7½ million to a joint research programme is funded on a 50:50 basis between British Rail and the Department of Transport.

In pursuit of a balanced transport system, we have to see that each mode plays its proper part. That part will largely be determined by customers. I hope, and I believe, that we are all agreed that the preferences of customers should be paramount. But Government can legitimately influence those decisions where there is a good, demonstrable case for doing so.

I should say just a word about the inland waterways. However, as both the noble Countess, Lady Loudoun, and the noble Viscount, Lord St. Davids, took us on such a quick and glorious trip, it may not be all that necessary. The Government recognise that there is a considerable backlog of maintenance work on our inland waterways. The British Waterways Board have said that they would propose to tackle it over a 10 to 15-year period. We think that this is a sensible plan, which will allow the maintenance programme to keep pace with the board's resources. In the current year, we will be giving them grant aid of £37.7 million. Most of this will be spent on the continuing programme of regular repair and maintenance undertaken by the board, but million has been specifically set aside to help with the backlog, by funding specific projects and the replacement of essential equipment. Grants for waterways were introduced last summer and there has been considerable interest, though no formal applications have yet been lodged. Money is available and we should welcome some worthwhile applications from industry.

I hope that what I have said gives a clear indication of the Government's general approach. We start, with both freight and passenger transport, from the essential point that the needs of transport users and customers must predominate. Their preferences are in general best expressed through the market, with regulation concentrating on safety and other standards, which only Government can control or supervise. But this is not sufficient to produce a properly balanced transport system. Subsidy is needed to maintain a reasonable level of public passenger transport, or to influence freight transport so that it does less damage to the environment. But levels of subsidy must also have regard to the interests of the taxpayer.

This is a complex subject. There are no simple answers. I have not, I am afraid, had time to deal with some of the important subjects, such as better services for customers from the removal of licences for express coaches, a matter which noble Lords have touched on. But I hope I have said enough to show that the Government are determined to pursue a policy which meets my noble friend's prescription of balance, economy, efficiency and regard to the interests of ratepayers and taxpayers. I close by thanking all those who have contributed this afternoon, in particular for their imaginative ideas and constructive criticism. It has been a very worthwhile debate.

Lord Underhill

My Lords, before the noble Earl sits down, may I ask him one question. I appreciate that he has endeavoured to deal with many points, but there was one very important question, concerning transport facilities in rural areas, about which he has said nothing at all in his speech.

The Earl of Avon

My Lords, I am grateful to the noble Lord. We do think that this is important. I cut out the last four pages of my speech because I thought that 36 minutes was enough. if I may, I will go into that question on another occasion.

8.19 p.m.

Lord Lucas of Chilworth

My Lords, it remains for me first to thank my noble friend the Minister for his galloping wind-up and for his great ability in having discussed and answered a number of the points and questions which have been raised. That there may have been a preponderance of speakers on the subject of rail does not, I believe, in any way invalidate any kind of argument which the other modes have sought to represent. It must in fact only go to show British Rail the very great, real and deep concern which your Lordships' House has for the railway industry. If electrification is required, I suggest that perhaps the kind of support which they have received here this afternoon will electrify their board to get on with the task in front of them.

I have to confess that I am not over-happy at hearing my noble friend the Minister suggest that yet another inquiry is to be put in hand. I should have thought that all the inquiries, all the reports had been made. It is a decision of principle which has to be made, and managment has to be charged with the job. Failure, on an efficiency audit in two or three years' time, will mean the sack—at least, it always does in ordinary commercial terms. Let me at this stage thank all noble Lords who have made such wide, varied and interesting contributions.

Two points have emerged from this debate. The first was that made by the noble Lord, Lord Ponsonby of Shulbrede, when he talked about London and the co-ordination of modes. Again, I just want to draw attention to the report of the transport committee in the other place which is to be published, I believe, in about a month. I think we might well have a look at that report. The other point—and I so often have to raise a point with the noble Lord, Lord Underhill—was that raised by the noble Lord opposite when he spoke of wanting a transport authority. I always understood that it was the Department of Transport which represented that kind of interest; that it was the transport authority. If the noble Lord, Lord Underhill, is suggesting for a short while that that authority is not necessarily performing the more exciting task that might be thought appropriate—that of foreseeing the needs before they arise—then I would agree with him. It seems to me that perhaps in that department a long-term section might be set up to try to evaluate the fast-changing needs, which are not going to be met by a continuation of the existing systems.

I should like to conclude by joining with my noble friends and other noble Lords in offering congratulations to the noble Lord, Lord Cayzer, and by thanking all noble Lords for their contributions. My Lords, I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.