TRANSPORT BILL

§ The Minister of Transport (Mr. Ernest Marples)

I beg to move, That the Bill be now read a Second Time.

I think that it will be for the convenience of the House if I say which Government speakers will take part in the debate. Tonight, my hon. Friend the Parliamentary Secretary will wind up the debate; tomorrow, the Financial Secretary will open the debate and will concentrate, naturally, upon the financial provisions, and tomorrow night my right hon. Friend the Home Secretary will finally wind up the debate.

§ Mr. Thomas Steele (Dunbartonshire, West)

On a point of order. Am I to understand from what the Minister has just said, Mr. Speaker, that a Scottish Minister will not take part in the debate?

§ Mr. Speaker

I regret to say that I did not hear what the Minister was saying, because I was engaged on other business.

§ Mr. Marples

The hon. Member is quite right; a Scottish Minister will not take part.

The Bill deals with the reorganisation of the British Transport Commission.

§ Mr. Marples

I do ask for the indulgence of the House. This is a very large Bill, and it will take a long time to explain.

It is a major Bill, of some length and complexity, but its main provisions were in the White Paper which was approved by this House last January. There is no doubt that the heart of the problem is British Railways. They are in serious financial trouble. Last year, their gross receipts were £478 million, but they spent £546 million, leaving a loss of almost £70 million on revenue account alone, which is 15 per cent. on turnover. But there are other problems as well. For example, the canals are not viable in their present form.

§ Mr. Hector Hughes (Aberdeen, North)

Do the figures to which the Minister has referred include Scotland?

§ Mr. Marples

They include the whole of British Railways.

§ Mr. Hughes

Then why is not a Scottish Minister taking part in the debate?

§ Mr. Marples

Canals are not viable in their present form. The docks are being inquired into by the Rochdale Committee. London Transport also has special problems.

To all these questions there is no easy or quick solution, but it is quite clear what must come first. The task of running all these activities at present is too big a job for any single authority. The British Transport Commission is overloaded with work. Reorganisation, financial reconstruction, and a different climate of operation are urgently needed. To provide for these is the purpose of the Bill.

Even though there are 91 Clauses and 142 pages, three clear principles run throughout the Bill. The first is that each main field of the Commission's present activities must be placed under a separate authority. Each authority must have clearly-defined responsibilities and be equipped to concentrate on its own set task.

The second principle is that each of the new undertakings must have a separate financial constitution and identity. Each will, therefore, be vested with its own assets and be responsible for its own capital debt and financial performance. The third principle is that there must be greatly increased commercial freedom. This will not come about only from organisational changes: outdated statutory restrictions must be removed. There must be greater freedom to fix prices, and there must be more scope to develop and make the best use of publicly-owned assets.

I now come to the new structure, set out in Part I. British Railways, London Transport, Inland Waterways, and British Transport Docks will each be a separate statutory authority, with appropriate powers and duties. The rest of the Commission's undertakings are different, because they are ordinary commercial companies operating road haulage, buses, shipping and travel agencies. They are generally in competition with similar companies in private hands.

§ Mr. Hector Hughes

On a point of order. This is very important. Here is the Minister, opening a debate dealing with the whole of these islands, and telling us that a Scottish Minister is not to speak. I want to know whether Scotland is to have a separate authority—whether one of the authorities to which the Minister is now referring will be a separate authority for Scotland.

§ Mr. Speaker

On the matter of the point of order, if the Minister does not give way the hon. and learned Member may not remain upon his feet.

§ Mr. Hughes

Surely the Minister should give way, Sir.

§ Mr. Speaker

As for the rest of the hon. and learned Member's intervention, in the interests of the House and in view of the fact that other hon. Members desire to speak, I venture to put forward the view that we should get on better with fewer interruptions.

§ Mr. Hughes

But is not there an anomaly in a situation where a Minister is dealing with a Bill referring to the whole of these islands and has said explicitly that a Scottish Minister will not speak? Surely he should give way in order to deal with that point.

§ Mr. Speaker

I hope that the hon. and learned Member will not usurp the time of the House by urging, in the form of a pretended point of order, that which does not raise a point of order.

§ Mr. A. C. Manuel (Central Ayrshire)

Does the Minister appreciate that there is very deep feeling in Scotland at the fact that over 200 trains are being withdrawn and many branch lines threatened with closure? Can he give us some Scottish figures so that some of us will be able to talk intelligently to our constituents on the matters he is dealing with?

§ Mr. Marples

If I were allowed to make my speech it might be found that I shall be mentioning something about Scotland. I did not wish to mention this point, but perhaps I may point out that the Opposition do not have a Scottish Front Bench speaker for this debate. Therefore, I do not think that it lies with the Opposition to criticise the Government in that respect. [Interruption.] The Leader of the Opposition is 933 making sedentary interruptions, but he has not arranged for a Scottish Opposition Front Bench speaker.

§ Mr. Manuel

How does the right hon. Gentleman know that?

§ Mr. Marples

Because I have been given the list of hon. Members who are to speak from the two Front Benches.

§ Mr. Hugh Gaitskell (Leeds, South)

Does the Minister realise that it is not the Opposition who are responsible for closing down all these lines in Scotland?

§ Mr. Marples

The right hon. Gentleman is being too disingenuous. If he had Scottish interests at heart he would have arranged for one of the Opposition Front Bench speakers to be a Scotsman. All the Front Bench speakers represent English constituencies, one being on the North-East Coast. There is nobody from Scotland. It is clear that some of the complaints ought to be directed against the Leader of the Opposition.

§ Mr. James Callaghan (Cardiff, South-East)

We ought to try to dispose of this point now. The Leader of the House will be aware by now that there is a feeling that a Scottish Minister should speak, as I think the Leader of the House will find he has spoken on previous occasions.

May I put this point to the Leader of the House and to the Minister of Transport? The present Secretary of State for Scotland is a former Minister of Transport. There can be no one who knows better than he what the effect of this Bill will be in Scotland. May I, therefore, repeat the plea that we should hear from the Secretary of State for Scotland what the effect of the Bill will be on Scotland?

§ Mr. David Price (Eastleigh)

Mr. Speaker, could you confirm that an Act of Union was passed about two centuries ago? I raise this because we are too frequently subjected to these sorts of interruptions which upset the flow of debate. Surely we are now one kingdom.

§ Mr. Speaker

I suspect that points of order which are not points of order are a nefarious form of interruption.

§ Mr. William Ross (Kilmarnock)

Further to that point of order. Did not 934 the Act of Union guarantee certain rights to Scotland?

§ Mr. Speaker

It was not a point of order, so there is nothing further to it as a point of order.

§ Mr. Hector Hughes

On a point of order. Mr. Speaker, you will be aware that the question of the rights of front benchers as against back benchers was raised with you the other day. Is it not anomalous that the Minister should give way to one of our front benchers and refuse to give way to back benchers?

§ Mr. Speaker

If the hon. and learned Member again rises to a point of order which is not one, I shall be compelled, in the protection of the common interests, to consider my disciplinary powers.

§ Mr. Marples

If I may be allowed to continue, I was talking about the ordinary commercial companies.

§ Mr. Callaghan

Will the Minister allow me to interrupt him again, to press this matter? There is a genuine feeling about this. All I ask at this stage is that the Minister should consult the Leader of the House and tell us later today whether we are to hear from the Secretary of State for Scotland on this important matter?

§ Mr. Marples

My right hon. Friend the Leader of the House is present and will no doubt have heard the exchanges which have been going on.

§ Hon. Members

Order.

§ Mr. Speaker

If the Minister does not give way, the hon. Gentleman must resume his seat.

§ Mr. Callaghan

I fully realise that, Mr. Speaker, but—

§ Hon. Members

Order.

§ Mr. Marples

I think that it would be the general wish of the House that I should continue.

The ordinary commercial companies, which operate road haulage, buses, shipping, and travel agencies, are similar to the private companies in the same fields. I think that they would thrive best in a commercial climate which is the same 935 as that of their private enterprise competitors. Therefore, these commercial companies will be grouped under a Holding Company which will operate, as Clause 29 says, as if it were a company engaged in a commercial enterprise". I now propose to deal with each of the four statutory boards and then with the Holding Company. I shall try to show the way in which my three principles apply to them. I will deal, first, with British Railways. Preparing the Bill has made me more than ever convinced that the railways should be controlled and managed by an authority solely devoted to them. This was the conclusion at which a Select Committee arrived. The new British Railways Board must be free to concentrate on those matters vital to the railways as a whole. The Board will, however, need to be relieved of the pressure of those day-to-day matters of management and operation which can best be carried out down the line. That is why Clause 2 provides for regional railway boards.

Let me get one point quite clear. In practice, getting the right balance between central control and effective devolution of authority is not an easy matter. The central Board must control directly those matters which are vital to the railways as a whole—for example, national wages negotiations, price policy, investment, modernisation, and the purposeful reshaping of the railway system. On the other hand, there must be some effective devolution—quite a lot, in fact. This will free the central Board for its main task and it will also give management and workers responsibility and opportunity.

I am positive that it would be wrong to write into a Bill a rigid definition of the relative responsibilities of the central Railways Board and the regional railway boards. There really must be flexibility and not a rigid blueprint. But one thing is clear. The central Railways Board must decide what it will delegate to the regions and when. Therefore, the Bill so provides, subject only to the general approval of the Minister.

We must bear in mind that although the new Board is taking over a unified system of railways, the shape and balance of this system is not under the 936 Bill fixed and rigid for all time. The future of British Railways depends upon its ability to adopt itself to modern circumstances. As the Prime Minister indicated on 10th March last year, sweeping changes will be needed. The duty to be placed upon the Railways Board has been drawn with this in mind.

This Board will also be responsible for other services closely connected with railways operations, such as the railway collection and delivery services, the packet ports and those shipping services which are really extensions of the railways. All these will continue to be treated as part of the railway system. The Board will also inherit certain other powers contained in existing legislation. But these powers must not lead to the development of services not necessary for the efficient conduct of the railways as a whole. Therefore, their use beyond their present point will be subject to the Minister's consent.

One of the ancillary activities will, after all, be hotels.

The White Paper proposed that hotels should be placed in a separate company under the Holding Company. Further study has shown that the balance of advantage lies in putting the hotel company under the Railways Board. Not only are some hotels bound up physically with the railway system, but economies can be secured by running the hotels alongside the railway catering services. The hotels will still be separately incorporated with their own set task. Thus we shall, amongst other things, be able to assess their financial performance.

I turn now to commercial freedom. All fares and charges, except for passenger fares in London, will be removed from the control of the Transport Tribunal. Railways, like most industrial enterprises, will now, in the main, be free to shape their own commercial and price policy. They will also be freed from a number of statutory restrictions and obligations, which oblige them to provide certain facilities and services regardless of whether they pay. The railways will also be freed from their common carrier liabilities. They will also have new powers to make better use of their assets.

At present, they cannot develop their land for sale or lease. Therefore, the 937 Bill provides that not only the Railways Board but also the other boards shall be able to develop land which is not required for the purposes of their business. This does not mean that the railways will be able to go in for general property development on a scale likely to distract them from their main task. A formidable task faces them. They will not be able to acquire additional land for general development by compulsory purchase, and they will need the Minister's consent to any substantial expenditure.

The Railways Board—and the other boards—may construct and operate pipelines on their own property and also on the property of the other boards. Railways and Inland Waterways possess between them long stretches of land very suitable for pipelines. But the development and operation of pipelines is to be the subject of general legislation. Therefore, the exercise of this power will be subject to the consent of the Minister.

I now turn to London Transport. Clause I of the Bill provides that there is to be a quite separate authority. Its task, set out in Clause 7, is .. to provide or secure the provision of an adequate and properly co-ordinated system of passenger transport.. for the London area. This is a big job and surely merits a separate and independent organisation.

The main operating pattern of London Transport was laid down in 1933. It would be wrong not to have considered at this juncture whether any changes are necessary in the interests of the travelling public. I have reached the conclusion that the main running powers of London Transport should continue as at present and that the London passenger transport area should remain un-changed. But at present the London Transport Executive operates beyond that area, although within established limits. These services may continue but, of course, however, within these established limits passenger demands may change.

Therefore, the Bill provides that the Board shall have rather more freedom to seek the approval of the Traffic Commissioners to meet new public needs, subject always to suitable protection for other operators. In addition, if there are really 938 exceptional circumstances, the Minister will have power to enable the new Board to seek authority from the Traffic Commissioners for particular extensions of its services.

On the other hand private operators to whom the Board has refused consent to run in the London area will now have a right of appeal to the Metropolitan Traffic Commissioner. To get fuller use from London's buses in the general public interest, the Bill enables the Board to hire out to other operators any buses temporarily surplus to requirements. But, of course, it may not build up a special fleet for this purpose.

§ Mr. Manuel

I appreciate that powers are being taken under Clauses 7 and 8 to get a properly co-ordinated transport system, mainly for the London area. But is the Minister sure that under the regional boards he is giving enough power to get a properly co-ordinated system in the other areas of the country?

§ Mr. Marples

I think so, but it will become apparent when I come to deal later with the other boards.

Turning now, to the British Transport Docks Board, the docks to be placed under the Docks Board are, in the main, those other than the packet ports which are going to the railways. The new Board will thus run 32 ports, of all shapes and sizes, equivalent to one third of our total port capacity.

The new Board will devote itself to the task of operating its ports to the best advantage and dealing with the problems which each presents. Like the independent ports, the Transport Commission's docks are the subject of a major inquiry by the Rochdale Committee, which is going into the subject of docks throughout the country and which may have important things to say about their future. To that extent the provisions in the Bill can be regarded as a holding operation. But they also provide for an organisation which could continue indefinitely.

There is still, more or less, an element of monopoly about ports in relation to the areas and the traffic which each serves. There will, therefore, need to be control over the charges made by the new Docks Board. The independent ports are, of course, subject to control over their charges, but under a different system from that which has hitherto 939 applied to the Transport Commission's ports. Under this system, which has worked well, the independent ports are able to increase their charges, either by securing the necessary authority from the Minister or from Parliament by private legislation. The Bill proposes that control over charges made by the new Docks Board's ports should, in future, be similar to that at the independent ports. Therefore, the present control by the Transport Tribunal will disappear.

I remind the House that the Bill is to reorganise the activities of the Transport Commission and not to solve the general problems of canals. Nevertheless, the Bill contains important provisions for inland waterways. Clause 1 sets up a separate public authority to be called the Inland Waterways Authority. Its duty is not only to provide inland waterways services and facilities where expedient, but also—and this is really important—to formulate proposals for putting to the best use canals no longer required for transport. The Authority must also take all steps open to it to carry out such proposals, including, where necessary, the promotion of private legislation.

This means that for the first time the nationally owned canals are to be under a single Authority with an express duty of turning them to the best account. I must make it clear, however, that the new Authority's duties may well involve the closure of canals, or their conversion or disposal if, thereby, the burden on the taxpayer can be relieved.

Secondly, the Authority will have more adequate power than the Transport Commission had to sell surplus water from its canals. This is a useful source of revenue and one that can be increased. This is important since the Waterways Authority may receive up to £10 million assistance on revenue account from the Exchequer during the next five years.

Thirdly, I must refer to those canals which had become unnavigable before the beginning of last May. For a period of five years from the passing of the Bill the new Authority will be protected from proceedings designed to compel it to restore these canals to navigable condition. This is necessary to give the new Authority a fair start. Fourthly, the 940 new Authority, like the railways, will be freed from control over its canal charges and from its common carrier obligations.

The statutory Holding Company is a novel concept. I do not think that it is any worse for that. As I have already made clear, the activities to be placed under the Holding Company are of a different character from those of the other four new bodies. All of these will need guidance, as well as opportunity, if they are to operate efficiently and do their best for the public purse. This need will be supplied by the Holding Company.

It is necessary, too, to reconcile the commercial and operating freedom of this group with the need for adequate accountability to the Minister—from whom the Holding Company may borrow—and to Parliament. The public assets involved are large—about £140 million. It would not have been appropriate, in view of their character, to group these companies under an ordinary statutory board. On the other hand, it would clearly not be suitable to vest them directly in the Minister. After much reflection, the Government have reached the conclusion that the Holding Company is best incorporated as a statutory company.

The Minister will be able from time to time to give directions to the board of directors of the Holding Company. In practice—this is very important—this is no different from what the Minister would be able to do as sole shareholder if the company were incorporated under the Companies Act. This does not mean, and it must not be taken to mean, that it is the intention that the Minister should actively intervene in the management and operation of the Holding Company. This would be entirely contrary to the purpose for which this organisation is to be set up. But, in view of the considerable public assets involved, I do not think that the Minister should have less power over this Holding Company than he would have had as sole shareholder had it been incorporated under the Companies Act.

The objects and powers of the Holding Company are defined rather carefully in Clause 29—

§ Mr. Ernest Popplewell (Newcastle-upon-Tyne, West)

The point which the 941 Minister has just made about the Holding Company is very important. Since he is taking so many other powers in the Bill, if the Holding Company wishes to subscribe for, take, acquire and hold, exchange and sell securities of companies why is it not subject to his consent or approval? Why is it a separate matter when it comes to selling?

§ Mr. Marples

That is an ordinary power which a holding company has. It is a power which the Transport Commission has. It is no different from what the Commission has or from what the party opposite put in its Transport Bill in 1947. I should have thought that that was a quite respectable precedent.

§ Mr. Popplewell

Will the right hon. Gentleman give way again?

§ Mr. Marples

No. I have still quite a lot to say. The hon. Gentleman will be winding up for the Opposition tonight and my hon. Friend the Parliamentary Secretary will be able to deal with that point in a rather more orderly way than I can by question and answer at this stage.

As I have said, the objects and powers of the Holding Company are defined rather carefully in Clause 29, but it might be necessary, in the light of experience, to make adjustments to them. I therefore thought it right to provide in the Bill for this to be done by order of the Minister, although, of course, subject to an affirmative Resolution of Parliament. This gives Parliament the power to say what it thinks if the Minister wishes to change the duties of the Holding Company.

I must now deal with the financial provisions of the Bill which implement the second of my three principles, the financial one. The Financial Secretary to the Treasury will explain this at greater length tomorrow, but there is something which must be said now. The financial provisions have two main purposes. The first is to provide each of the new statutory boards and the Holding Company with its own separate financial constitution, its own responsibilities for its own capital debt, and a financial duty. The second is to relieve the railways of a burden of debt which they can never hope to carry and so lay the foundations for financial recovery.

942 To meet the first purpose, each of the statutory boards, like other nationalised industries, will have a duty to pay its way. The task of the Holding Company will be to secure the best possible results for the public purse. During the first five years, however, neither the Railways Board nor the Inland Waterways Authority is likely to be able to discharge its duty in full. Therefore, during this period the full duty will not apply to either of these boards. The Railways Board will be required to put itself in a position to pay its way as soon as possible. The Inland Waterways Authority will be under an obligation to keep its deficit as low as possible.

The financial reconstruction under which it is hoped to achieve the second main purpose follows, in principle, the White Paper scheme. The total capital debt of the Commission which we have to deal with is about £2,450 million. Of that £2,450 million, about £475 million of accumulated losses will be written off as a bad debt. This leaves about £1,975 million as a capital debt to be divided among the new undertakings. Roughly £1,575 million will be attributed to the British Railways Board and £400 million to the other activities.

The railway debt of £1,575 million will be further sub-divided into two parts. The first part will be a doubtful debt of about £650 million to £700 million. This corresponds broady to the written down book values of the pre-1956 assets. It is to be put into suspense account and will bear neither interest nor repayment obligations for the time being. The second part is about £900 million. This corresponds to the written down value of assets acquired since the end of 1955, largely for railway modernisation. It will bear interest and be repayable.

All the figures that I have given are the result of more precise calculation than was possible in the White Paper, which was based on the 1959 position. But they are still only approximate. The House will have noticed some important changes from the White Paper figures, notably in the amount of the railway interest-bearing debt, which, of course, takes into account the large expenditure on modernisation between 1959 and the end of 1962. Broadly, the railways will be relieved of an interest of £35 million 943 a year on a debt of about £1,150 million. The Exchequer will now bear this burden.

Even after this financial reconstruction, the Railways Board will still face a formidable task. It will have to meet interest of about £65 million a year. Naturally, as it borrows still more money for capital investment, those interest charges will increase. But, even without taking account of interest charges, the operating deficit of the railways is now running at about £80 million a year. The new Board's mammoth task—and it is a mammoth task—is, first, to wipe out this operating deficit, and, secondly, to earn a surplus sufficient to cover interest.

It is too soon to forecast the Board's prospects, but it is clear that it would be unrealistic to expect a dramatic and early improvement. Therefore, Clause 22 empowers the Minister to make grants or loans to meet revenue deficits up to a total of £450 million over a five-year period. I should not like the figure of £450 million to be regarded as a firm forecast. It is the best estimate that can be made at present, and, even so, it assumes very substantial progress towards viability over the next five years.

These financial proposals were framed to give the Minister and the House a chance of looking again in future at what was happening. In a year's time we shall be able to have another look at the matter, for this reason. The Commission is now engaged in a vitally needed series of traffic studies. When they are completed in about a year's time I will be be able to get a clearer picture of the prospects. I then intend to review the situation and to settle with the railways targets of financial performance.

In another two years' time there will be a further opportunity for the Government and Parliament to review the position of the railways, because the borrowing power under the lower limit of £1,100 million in Clause 19 will then be running out and can only be exceeded by means of an Order approved by the House. This has been done purposely so that the House will have an opportunity in a couple of years' time to debate the situation.

Finally, after five years the upper limit of £1,400 million on borrowing powers is expected to be used up, and, at the same 944 time, the power to provide subsidies on revenue account up to £450 million will expire. There will then be an opportunity for a full review of the financial position and prospects of the railways. I thought it important to try to frame the technique of these financial proposals so that the House would automatically have an adequate opportunity of debating them in the next few years.

This reorganisation means dismantling machinery set up in 1947 for integration, which, in fact, never took place. [HON. MEMBERS: "Why?"] It never took place and, if I may say so, it does not really lie in the mouths of hon. Members opposite to ask why. [HON. MEMBERS: "What about C-licences?"] They must search their own hearts because they brought in the Act.

§ Mr. Callaghan

The Minister and his lion. Friends never gave it a chance.

§ Mr. Marples

The provision for C-licences was not made by this side of the House, but by that side. Right hon. and hon. Members opposite sold integration down the river in 1947. It may well be that Mr. Alfred Barnes at that time was responsible for it. It was not this side of the House which was responsible for it. He gave way to pressure from certain outside interests on the question of C licences. I do not say whether he was right or wrong in that, but he did.

§ Mr. R. Gresham Cooke (Twickenham)

The co-operatives.

§ Mr. Marples

It may have been the co-operative societies at the time, as I hear someone behind me say. I can only say that Mr. Barnes did give way to pressure.

There will be co-ordination, but not integration, which would mean dictatorship by the Government of what the customer should use. There are, however, limits in regard to co-ordination to what can be achieved by legislation. In practice, co-ordination is achieved in two main ways. First, there is co-ordination of policy and investment. Secondly, there is co-ordination of operation and management and services.

Co-ordination of policy and investment must be the responsibility of the Minister. He is responsible to Parliament. He sees the wider transport field and has functions beyond the nationalised sector. To 945 help him in this task there is to be under the Bill a Nationalised Transport Advisory Council. The chairman of the four main Boards and of the Holding Company will be among the members.

Further, there are very important opportunities for co-ordination in day-to-day operation and management, and some special provisions for this have been made in the Bill. Notably, both the Railways Board and the London Board are placed under a duty by Clauses 3 and 7 to co-ordinate their services in London. The Bill also provides for working agreements between the new undertakings, including the Holding Company.

I turn now to coastal shipping, which was mentioned by the hon. and learned Member for Aberdeen, North (Mr. Hector Hughes), who, I regret to say, is not now in his place to listen.

§ Mr. Ross (Kilmarnock)

I do not blame him.

§ Mr. F. Noel-Baker (Swindon)

Before the Minister leaves that point—

§ Mr. Marples

I am sorry. I did say that I had a long speech to make. The Parliamentary Secretary and two other Ministers will be able to reply later.

§ Mr. Noel-Baker

What about the Minister's own personal position in relation to the House?

§ Mr. Marples

I know that some hon. Members, and particularly the hon. and learned Member for Aberdeen, North, who showed a great deal of indignation about half an hour ago, are worried about coastal shipping. No doubt, the hon. and learned Gentleman will be able to read in HANSARD tomorrow what I have said.

Some people are worried lest the railways take advantage of their new commercial freedom to compete unfairly with coastal shipping, particularly in the carriage of coal. I want to put the problem in the right perspective. At present, the railways carry 148 million tons of coal per annum. Coastal shipping carries 17 million tons, and of the 17 million tons 8 million, nearly half, are carried in the ships of other nationalised industries, the remaining half being carried in coastal shipping owned by private enterprise. I have 946 mentioned those figures to put the scale of the problem in its right perspective.

The coastal shippers are concerned about two possibilities. The first is that the railways will use their subsidised position to undercut the shippers' charges on long hauls. This is a legitimate worry, and the Bill provides a remedy. If there is reason to believe that the railways are not at least covering their costs by the charges for, say, carrying a consignment of coal from Tyneside to London, then the Minister may hold an inquiry as a result of which he can issue a direction to the railways. The coastal shippers want also to be protected against an overcharge by the railways on short hauls, that is to say, the carriage of coal from pithead to the ports. They suggest that the railways might charge so much that the coal would never get to the ports at all. This is a more difficult problem.

I do not want to start the railways off on their commercial freedom with a restriction designed to protect one particular industry, because many other industries have asked for protection. Nor do I wish to create a situation in which the railways are, in effect, forced to keep their charges too low, lower, in fact, than the traffic would bear, because this would really give a concealed subsidy to the coastal shipping industry.

The problem is difficult. Since the publication of the Bill, I have received certain representations. I have arranged for meetings between representatives of the two sides, coastal shipping and the railways, first, together, and, next, I propose to meet both of them and act as chairman. In the light of these discussions, the Government will decide whether any further action is necessary by legislation or in some other way.

I turn now to the provisions affecting transport users. First, London. Here the Railways Board and the London Board will together exercise a sizeable monopoly. Therefore, provision is made for the Transport Tribunal to continue controlling London's fares. There is, however, a change from the present "quick" procedure for emergency increases in London fares. Clause 48 provides a quick procedure whereby London's fares can be raised by the boards, with subsequent justification to the Tribunal. This will apply where 947 either costs have risen or revenues have fallen and the situation must be met quickly.

In future, the Transport Tribunal's work will be almost entirely taken up with London fares control and road haulage appeals. Clause 58 reshapes the Tribunal accordingly. In future, it will sit in two divisions, one for each of its main tasks. Incidentally, these new arrangements should help to expedite business, which is a concern of one of the local authorities which I saw.

§ Hon. Members

The hon. and learned Gentleman was not here.

§ Mr. Hughes

On a point of order, Mr. Speaker. I understand that the Minister took advantage of my momentary absence from the Chamber to refer to what I said to him earlier. In fairness, he ought, surely, to give way now.

§ Mr. Speaker

I invite the hon. and learned Gentleman to consider what is and what is not a point of order. That is not a point of order.

§ Mr. Ross

The Minister should give way.

§ Mr. Marples

I come now to the transport users' consultative committees and uneconomic services. There are new arrangements for the transport users' consultative committees. They will continue to deal with the quality of services provided by the boards. The main change concerns the withdrawal of unremunerative railway services. The only proposals of this kind now to be left with the consultative committees are those for the complete withdrawal of railway passenger services from both lines and stations.

To expedite proceedings and thus avoid costly delay the Central Transport Consultative Committee will no longer take part. The area committees will report direct to the Minister on the degree of hardship to passengers which they judge might be entailed. Also, they will be able to report on any proposals which they may have for mitigating the hardship. The Minister will then decide whether such passenger services should be closed down.

948 The partial reduction of railway passenger services and, indeed, withdrawals and reductions of freight services are another matter. I do not think that social considerations are so much an issue here.

§ Mr. Marples

The factors involved are principally within the field of management and operating and commercial policy. On the other hand, trade and industry made it clear to me that it would greatly help them if adequate advance notice could be given as far ahead as possible of any proposals for the discontinuance of railway services, whether for goods or for passengers.

Clause 55, therefore, provides for this. Perhaps I might be permitted to say that I think that in the past the Transport Commission has not given adequate notice to the public of its intentions as a whole. Those intentions have been given rather piecemeal.

So far, we have talked about the new organisation. Before I end, I should like to say some words of reassurance to the present staff of the Transport Commission—

§ Mr. Hayman

Before the Minister leaves—

§ Mr. Marples

I am sorry—the hon. Member will no doubt catch your eye, Mr. Speaker.

So far, we have talked about—

§ Mr. Percy Collick (Birkenhead)

On a point of order, Mr. Speaker. May I direct your attention to the fact that the Minister has been reading his speech almost from the time he started. Is it in order for a Minister to read his speech?

§ Mr. Speaker

One has to give some indulgence, I think, to a Minister introducing a long Bill of this kind. I am sure that the hon. Gentleman, when that affliction comes upon him, will be grateful for that indulgence.

§ Mr. Collick

I have occupied the Ministerial Bench, Mr. Speaker but I did not make a practice of reading my speeches.

§ Mr. Callaghan

Further to that point of order, Mr. Speaker. Perhaps I may draw your attention to previous Rulings in which Mr. Speaker has deprecated the reading of speeches page by page, whether by Ministers or others.

§ Mr. Speaker

Some balance should be entertained in this matter. It must be remembered that in the case of a Minister, perhaps introducing some long Bill, it might even make for brevity if he were to have some indulgence.

§ Mr. Callaghan

May I take it, Mr. Speaker, that we are now in the presence of a new Ruling; and that it is in order for a Minister to read his speech page by page and word by word from beginning to end?

§ Mr. Speaker

I have not said that. I think that the general principle is that the House is prepared in these circumstances to allow a Minister to have what are called copious notes. Some people are more skilled than others in using a copious note word for word without the appearance of reading.

§ Mr. Hector Hughes

Further to that point of order, Mr. Speaker. You used the word "some"; you said that a speaker is entitled to "some indulgence." Surely that does not mean that a Minister may read his speech from beginning to end, and refuse to give way when he is asked to give way.

§ Mr. Speaker

I make no pronouncement whatsoever about giving way. It is not a point of order. I hope that the hon. and learned Gentleman will be able to remember that for the future. What I said about dealing with copious notes the hon. and learned Member will find in HANSARD.

§ Mr. Manuel

Further to that point of order. It does appear to several hon. Members that something new is being introduced by your Ruling today, Mr. Speaker. You have said that it would be allowable for a Minister introducing a Bill of this size, or a larger Bill, to make a greater reference to copious notes, but this is going much beyond that. Do I take it that your Ruling today will apply to back benchers who are equally bending their minds to understand large Bills?

§ Mr. Speaker

No.

§ Mr. Marples

I think that hon. Members know me well enough to understand that I would rather much deliver a speech without notes at all, because I enjoy myself better. At the same time, in the interests of trying to cover all the points lucidly and comprehensively, I prepared my notes today more fully than usual. I am quite prepared, if hon. Members want me to, to make a speech without any notes, but the point is that I am trying to give hon. Members general information they would want when dealing with the Bill—[Interruption.] The questions raised by the hon. Member for Cardiff, South-East (Mr. Callaghan) from a sedentary position are so ridiculous that they are not worth answering—

§ Mr. Speaker

Order.

§ Mr. Callaghan

I rise on a point of order here, Mr. Speaker. It has been made most difficult for us this afternoon—as I think you will agree—because the Minister has consistently refused to give way and now takes objection to interruption from a sedentary position. He tells us he wishes to read his speech because he wants to give us certain information. As I understand the purpose of debate, it is that we should be able to ask for information, too, on a number of extremely important points, which we have been unable to do because the Minister has read his brief page by page from beginning to end. May I ask for your protection for the normal rights of the House in dealing with an important Bill like this?

§ Mr. Speaker

I think that we manage in an ordinary way by having speeches, usually on one side and then on the other, but I do not think that we take the view that constant interventions and interruptions contribute to debate. I think that it might perhaps be better if we were to get on, and allow the Minister to complete his speech. Those right hon. and hon. Gentlemen who speak thereafter from the opposite side will no doubt be able to demand in their speeches explanations of the points they wish to raise.

§ Mr. Callaghan

Further to that point of order, Mr. Speaker. I was present 951 throughout the debates on the Transport Bills of 1947 and 1953. I remember especially the interruptions to which Mr. Alfred Barnes was subjected in 1947 by hon. Members who had important points to raise, and they were allowed and they continued. It is surely part of the function of a Minister, when he is introducing an important Bill of this sort, to give way so that questions may be asked.

We started off with the question of the Minister from Scotland. Maybe that has influenced your mind about other interruptions, but I put it to you that it would be in the interest of the House as a whole, and certainly of the Opposion, if you were not to encourage the Minister in refusing to give way on perfectly legitimate and important questions of principle that are being put.

§ Mr. Speaker

I think that if the hon. Gentleman meant that the Chair was doing something it should not do—

§ Mr. Callaghan

No, I did not.

§ Mr. Speaker

—or encouraging the Minister in a course of action which was wrong, I would have to refer him to other procedures—but I do not think that he meant something of that kind.

Here is the point. The Chair does not tell Ministers when to give way or not to give way. The Chair has no power to do that, and it is no good trying to make a point of order out of the failure of a Minister to give way. If the Minister should have given way, and did not, that is a matter to be directed to the Minister in due course.

§ Mr. F. Noel-Baker

Arising from my hon. Friend's point of order and from your Ruling, Mr. Speaker, we are finding ourselves in difficulty because the Minister is dealing with a Bill which changes his powers very greatly, and which changes his position in relation to the House of Commons. We therefore want an opportunity to question him about his position in relation to the House and to extract the answers only he can give. If he refuses to give way, he really puts us into very great difficulty—

§ Mr. Scholefield Allen

Further to that point of order, Mr. Speaker—

§ Mr. Speaker

It was not a point of order, so there can be no question of 952 there being anything further to it. I have explained; whether a Minister gives way or does not give way is not a matter for the Chair.

§ Mr. Marples

If I may continue, the staff of the Transport Commission will go with their jobs to the new undertakings on the basis of the activities in which they are employed. This should work quite smoothly for the overwhelming majority of them—

§ Mr. Callaghan

Why not circulate this in the OFFICIAL REPORT?

§ Mr. Marples

There will be a relatively small number of staff employed at the Commission's headquarters and elsewhere to whom this does not apply. If employment has not been found for them by vesting date they will become the employees of the Railways Board. Therefore, none of the staff employed by the Transport Commission immediately before vesting date will be without an employer to whom he can look for his rights under his contract of employment.

There are in the Bill other provisions for the care of staff, about which, I am sure, the House would like to hear. They are provisions for taking care of the staff—[Interruption.] Those are the words of the Bill. Clause 79 provides for the payment of compensation to those of the Commission's staff … who suffer loss of employment or loss or diminution of emoluments or pension rights, or whose position is worsened … by the reorganisation. That is the first provision.

Secondly, provision is made in Clauses 71 and 72 for the Boards to pay pensions, and for the Minister to make Orders in connection with pension schemes. The general principle is that the existing pension schemes should pass over as they now stand to the new boards, mainly to the Railways Board. There may be some that do not—they may go to the Docks Board, for example. Most of them will go to the Railways Board.

§ Mr. Popplewell

As this is a technical matter, I hope that the Minister will give way.

§ Mr. Marples

Presently.

It is intended that there will be no worsening whatever of the existing rights 953 of beneficiaries, wherever they go. If, however, modifications are found necessary, the Minister has power in the Bill to make such modifications. Therefore, from the viewpoint of the pensioners themselves, they are guaranteed that there will be no worsening of their present position. That, I think, will meet the point that the hon. Member was about to make. I do not think that there is a technical hitch in the wording of the Bill, but if by chance there is, the intention is as I have stated. If it can be pointed out that the wording does not carry out that intention, such an Amendment in Committee will be most welcome and acceptable.

A few weeks after becoming Minister of Transport, I remember saying to the House that I did not know the meaning of the words "vested interests" until I went to the Ministry of Transport. That has been a complete understatement. During the preparation of the Bill, we have seen dozens of representative associations. They presented their case and made their requests forcefully, very forcefully in some cases and almost vehemently in others. I do not complain, because it is their job to do so. Each request, however, collides with somebody else's request and the Minister has to make a decision. Whatever decision he makes, he is doomed to displease somebody. That has happened on this Bill and it will happen on every Transport Bill. We must accept this fairly philosophically. To arrive at the right conclusion in the general public interest, however, it is necessary to assess each case on its merits.

Inevitably, any industry which is old has strongly entrenched vested interests. The older the industry, the more entrenched they are. Railways are a very old industry. Passengers—the customers—the management and the men all have traditional practices and privileges which they want to preserve. I do not complain about that. But only if all those sections—and I mean all of them—make a contribution will we succeed in restoring health to the railways.

A question has been raised about Scotland. Take passengers. The closure of uneconomic lines is a question of the relative facts in each case. There was an article in the Scotsman of 13th November which I read with great interest. It was by William A. Porter and 954 was headed "Now Substantial Government Aid is Needed." It said that the movement cogs of the 7.56 p.m. train from Berwick to Edinburgh—I believe it means the cast per day—was £164 and that the receipts were 10s. The loss was £163 10s., which is a 99.7 per cent. gross loss on the turnover. On the Monday, there were five passengers; on the Tuesday, two; Wednesday, six; Thursday, six; Friday, two, and Saturday, eight.

It is clear that if we are asking British Railways to continue with that sort of service, they are doomed to be a burden on the taxpayer.

§ Mr. Marples

Let me finish the point. It would pay the Transport Commission to buy second-hand scooters, give one to each person travelling on the train and close down the line.

§ Mr. Hynd

Can the Minister say whether that train carried any mails or parcels or had any strategic value, for example?

§ Mr. Marples

It was travelling from Berwick to Edinburgh, so it would not be strategic. If, however, it went from Edinburgh to Berwick to carry troops to the Border, it might be.

§ Mr. Steele

The Minister has made a valid point, but out of the context of the debate. Nobody in his senses would say that a railway company must provide a train to run if nobody wanted to use it. That, however, is not the point. In using the example which he has given, the Minister is only cheapening the debate. I hope that he is not saying, in effect, that that one train is typical of what is happening with all services.

§ Mr. Marples

No, I am not. Nor was it out of context. There are quite a lot of these cases. All I am saying is that they must be taken on their merits, which is fair enough. It was not out of context. There is a whole series of examples.

I do not want to weary the House, but to quote another instance there is the 5.45 a.m. from Kilmarnock to Dumfries, which costs £176 and takes £7. The loss is £169. It never carries more than eight passengers in any day. One cannot expect the Transport Commission to carry on that sort of service. I did not say that 955 the Commission should not carry on other services. I gave an example of what the Commission should not carry on and I hope that it was a fair point.

§ Mr. Marples

I cannot give way. I have given way a great deal with points of order. I am thinking of hon. Members on both sides who wish to speak.

I have mentioned what passengers must accept, as, I believe, they must. The men, too, must accept something. I have made a lot of inquiries into this. Many of the men are working very long and irregular hours. It is difficult to get men on the railways these days because of the irregular hours they work. I wondered whether the work could be better directed and with extended work study and skilful management, I think that it could.

On the management side, I really believe that a new approach is needed. It is now being done in a variety of ways. First, the new chairman is developing a much-needed system of personnel assessment of the top management. It is no good assessing these people unless we promote them accordingly. If we promote solely by seniority, we get elderly men at the top. If we promote by ability plus seniority, we get efficient men at the top. I hope that this system, which is being applied to the top railwaymen, will give railwaymen the extra opportunities forecast for them in the White Paper.

The House will note that in making appointments to the Board, the Minister will consult the chairman who is carrying out this assessment. Appointments to the regional railway boards will be made by the Railway Board itself, subject only to the Minister's approval, which again means that it is a question for management, who, I hope, will give the best opportunities to the railwaymen who work for them.

Another point on which management must concentrate is the right size and shape of the future railway system. Because of the technical advance of road transport, a railway system will have to be contracted where necessary. This contraction will take place either purposefully, in which case it will not hurt so much and it can be done in an orderly manner, or as a result of being left 956 haphazardly to events, which would mean decay. The studies which Dr. Beeching is making will show what traffics the railways are best suited to carry, and to carry profitably. Expenditure on modernisation must be geared to these studies.

The Bill by itself merely provides the framework under which we can get a dynamic management and give the opportunity and enable the railways, in particular, to regain their efficiency and play their proper part in our national life. [Interruption.] I am bitterly disappointed that in this debate the Leader of the Opposition has not chosen the hon. Member for Cardiff, South-East to play a principal part. The Opposition have four Front Bench speakers and one Front Bench interrupter. [Interruption.] I will repeat it. I said that the Opposition have four Front Bench speakers and one Front Bench interrupter. Next time, I hope that the hon. Member will be a Front Bench speaker.

I know that railways have a nostalgic meaning for right hon. and hon. Members opposite, but I am convinced of one thing: unless we make them efficient we are doomed to have a heavy load on the economy for years to come. It is the object of the Government to make them efficient.

§ Mr. G. R. Strauss (Vauxhall)

I congratulate the Minister of Transport on having had rather more support from his own side of the House in presenting the Bill than he had when presenting the Bill for the replacement of the Cunarder, but I am not sure whether that support, which was evident when he sat down, did not arise more from the fact that he was often interrupted from this side of the House than from the fact that he made a case which convinced his own supporters.

I do not object to the right hon. Gentleman delivering his speech from "copious notes". I was myself in the position of introducing one major Bill on that side of the House, and I found it essential, out of respect for the interests of the House, to have "copious notes" from which to make my speech. My objection is not so much to the method in which the Minister delivered his speech but to its contents, and I hope to show that the case which he has 957 made out in favour of the Bill is unsound and open in many ways to the strongest possible objection.

Nevertheless, I am prepared to admit straight away that there are many features of the Bill which are good and which we welcome, and I will deal with these first. My only complaint about them is that they are belated. Most important of all, of course, is the Government's proposal to write down drastically the capital structure of the railway industry, and thereby, at last, to take a realistic view of railway finances.

Gone today is the false optimism, which we never shared, that the modernisation plan would make the railways financially viable in the early 1960s. That was the view which was accepted by the Government for some time. Gone, too, is the abhorrence of subsidising the railways, which we used to be told would be so demoralising and encourage inefficiency. Gone, fortunately, is the complicated juggling with railway finances by loans on top of loans, which we have had for a number of years, and whose purpose was, in fact, to conceal open Government subsidies.

The need for this has now been frankly acknowledged, and £450 million is to be provided for such subsidies during the next five years; and the capital charges on the railways is to be substantially cut. We have long advocated such action as being necessary to put the railways on a sensible and realistic footing.

We welcome too, the permission granted in the Bill to the boards to develop their surplus lands, but I am rather concerned about how this is to be done. Will it be through property speculators, with the sole object of squeezing every possible penny out of the deal, or, as the land belongs to the nation, will the broader national interest be taken into account? I hope that the Government will tell us how it is contemplated that the Railways Board will carry out this new task.

The proposed abolition of the Transport Tribunal outside London is probably wise. In present conditions, it serves little purpose. Although welcomed in many quarters, personally I am not 50 happy about the cancellation 958 of the Railways Board's obligation to be a common carrier. If it is the Government's intention that in future the sole concern of the new Railways Board is to be its balance sheet, then there is a case for relieving it of the common carrier burden; but if the purpose of the nationalised railways is to serve the national interests, should they not continue to bear it? During the last century, Parliaments invariably imposed that obligation, in the public interest, on companies seeking Parliamentary authority to build railways. If it was right that private profit-seeking enter-prices should have to carry this burden, it is surely illogical to withdraw it from the railways when they are publicly owned.

Before leaving the subject of railway finance, I want to mention one aspect which is rather complicated, but which is very important for London members and all those who are concerned with the level of fares in the London area. By Clause 39, the Minister is to determine the manner in which the total debt of the Transport Commission is to be apportioned between the various boards, and also the rate of interest payable by the boards to the Treasury for their respective shares of the total debt. At present, the rate of interest payable on British Transport Commission stock raised for London Transport purposes averages 3¼ per cent.

Are the Minister and the Treasury thinking of demanding the current rate of interest, which is now well over 6 per cent.? I hope that we shall get an answer from the Treasury on that important point, as I am advised that, if that is so, it might mean an annual addition of about £4½ million to the interest liabilities of the London Board, and this would mean, of course, substantial increases in fares.

This matter should not be left in doubt, but should be settled by Parliament during the passage of the Bill. I hope that the Government will be able to give a satisfactory assurance on this point. To be precise, we would like the Government to tell us, before the debate closes, first, what is to be the method by which the London Board's share of the Transport Commission's total indebtedness is to be apportioned, and, secondly, the basis on which interest 959 charges on these debts are to be payable by that Board.

There are many other aspects of the Bill upon which my hon. Friends will talk, and will talk favourably, concerning such matters as the canal and the pensions proposals in the Bill. I want to leave these matters for them, and to concentrate my remarks on the main provisions of the Bill. It seems to us that its main purpose—and this was confirmed by the speech of the Minister—is to destroy the spirit and machinery of co-ordinated public transport. The Conservative Party, we know, is by nature opposed in principle to publicly-owned industries. Where possible, it sells those industries to private concerns, and where it cannot do that it operates them with some displeasure.

It did its best to sell off a large part of the publicly-owned transport industry to private interests, when it sold the long-distance road haulage element of the British Transport Commission and went on doing so as long as it could until it was stopped by the pressure of the chambers of commerce. Now what it is trying to do is to destroy the integrated service which was established in 1947, and to ordain that the individual transport elements should operate on their own as separate competitive commercial concerns without any unifying influence.

We consider that to be exceedingly damaging not only to the elements concerned but to the future of the transport industry generally, and we oppose this disruptive proposal, which is central to the Bill before the House today.

What excuse do the Government put forward for doing this? They cannot quote any expert authority for saying that this should be done. They certainly cannot quote in support of their action the recommendations of the Stedeford Committee, as they have never been published. One feels that if that Committee's recommendations had been in favour of such a course they would have been. All they can say, as the Minister has said today, is that the Commission is overloaded with its direct responsibility for the railways, and has too much on its plate to consider adequately the other transport matters, and that, therefore, it should be abolished.

960 The Commission may well be overloaded today, as the Minister has stated, by having direct responsibility for the railway operations, but if that is the argument one is bound to ask, who overloaded the Commission? The answer, of course, is the party opposite in 1953, in one of its recurring spasms when it feels the compulsive desire to juggle with the organisational set-up of British transport. The Government then abolished the Railways Executive which operated with the other executives under the supervising authority of the Commission, and they transferred its activities to the Commission itself.

It was a very foolish thing to do. When the party opposite complains today of the unbalanced, overloaded responsibilities of the Commission—it is quite right about that—it should, of course, address its complaints to itself. Members opposite should come to the House in sackcloth and ashes, admit their mistake, and proceed to reverse it. They should then reconstitute a separate railways executive—call it a Railways Board if they prefer—with full operating responsibility, but leave it under the general authority of the Commission whose duty should continue to be that of co-ordinating and planning on a broad scale the work of all the elements of the publicly-owned transport system.

Having such an over-riding authority is not a mere theoretical concept. It is a practical necessity in any large enterprise in which there are a variety of associated activities. The principle is accepted throughout private industry. Is there not a strong supervising, controlling body in Dr. Beeching's own industry, I.C.I.? Of course there is; and in Unilever and every other large concern in this country. The whole trend of modern industry is to build more and more on this pattern. Why, therefore, embark on the reverse process in transport? Are not rail and road and waterway services at least as much in need of co-ordinating and planning as the diverse activities of I.C.I.? Certainly they are, and to move in the opposite direction as the Government are doing is crass folly.

If it is suggested that central planning and control may be desirable in other industries but not in transport, let me quote to the House the evidence of someone in a position to know and who