HC Deb 18 November 1920 vol 134 c2138W

asked the Minister of Transport whether the increased fares on the London tubes, railways, and omnibuses are calculated and have been sanctioned by him as a fair return not upon the capital expended by the combine in acquiring those systems, but upon the capital expended by those who sold their interest to the combine, which had largely been written off by the market as lost capital; and will he state, what rate of return he expects these fares to yield on the combine's own actual expenditure?


The London General Omnibus Company is not a statutory company and does not require the approval of my right hon. Friend the Minister of Transport to increase its fares. Before approving increased fares on the Metropolitan District Railway and Tube Railways he referred the matter in accordance with Section 6 of the London Electric Railway (Fares) Act of last Session to the Rates Advisory Committee. That Committee were not concerned with the capital of the omnibus company or the Underground Electric Railway Company. They advised that the fares proposed, though considerably lower than the level which Parliament had considered sufficient to yield a reasonable return on capital, were fair and reasonable and such as might properly be approved. The hon. Member will recollect that under Sub-section 3 of Section 6 the Minister has power to require the company after reference to the Rates Advisory Committee to modify their fares if he considers that the fares charged by any company are higher than are justified by the circumstances. The present increases yield an amount which, after allowing for interest and depreciation on new capital expenditure which is required immediately, and for arrears of renewals, is so small that a meticulous examination of the points raised in the question is unnecessary.