HC Deb 07 December 1922 vol 159 cc2040-2W

asked the Parliamentary Secretary to the Ministry of Transport whether his attention has been called to statements made in the Press as to the effect of the recent settlement with the North British Railway Company; whether the Government have abandoned principles for which they were contending before the Courts; and whether he will explain the nature of the settlement and its effect upon the taxpayer?

Lieut.-Colonel ASHLEY

My attention has been drawn to various statements as to the recent settlement of part of the dispute between the Government and the North British Railway Company in reference to the amount of compensation to be paid out of public funds under the agreements and arrangements relating to the control of the railways for the purposes of the War. The North British Railway Company claimed a sum of £10,681,243 in respect of maintenance and renewal of rolling stock during the period of control, mainly upon the ground that, because they had spent or were committed to the expenditure of that amount, they were, under the arrangements, entitled as of right to recoupment out of public funds. This principle has throughout been contested on behalf of the Government, and justification has been required for the amount claimed in excess of the normal. In pursuance of this principle payment of sums which the company claimed during 1921 on account of the compensation ultimately payable was refused on the ground that no justification had been shown for charging them against the taxpayer. In deciding the case upon appeal in favour of the Minister of Transport, the judgment of the Court of Session stated thatThe evidence led in the case appears to have effectually displaced the idea that the Department was actually labouring under any misapprehension as to the meaning of the agreements," and further stated that, "It is impossible to say that in following the procedure just described the Department acted either illegally, unreasonably or capriciously in the exercise of its administrative discretion. Indeed, I think the unfavourable light in which the attitude of the Department appeared at a former hearing has been dissipated by the inquiry which has taken place. Any statement that a decision in favour of the company's contention had been given on the merits of the case is disposed of by the Railway and Canal Commission themselves, for they told the company on the last occasion when the matter was before them that the company were not to maintain that anything at the previous stage was decided as to the merits of the question. The Government maintained a consistent attitude throughout the litigation, and it was only when the company submitted figures and statistics in justification of expenditure in excess of the normal that an arrangement became possible. That part of the arrangement in which the taxpayer is directly interested is the reduction of the claim from £10,681,243 to £9,790,545. Of this difference, £405,000 represents sums expended during control and withdrawn from the claim, and £485,698 represents sums claimed, which the Government contended were discharged by the lump sum payable under the Railways Act, 1921. The methods by which the company propose to allocate and dispose of the further sum, which upon this reduction the Government was enabled to pay, is not a matter in which the taxpayer is interested. I am glad that this difficult matter has been amicably settled.

Forward to