ADDRESS IN REPLY TO HER MAJESTY'S MOST GRACIOUS SPEECH

§ LORD SHEPHERD

My Lords, there was a time when transport in its broad aspects was a topical and regular subject in your Lordships' House, but it is some time since we had a debate of that character. I have wondered whether it was a reluctance by noble Lords to move into a preserve which I think was recogised to be very much that of our late friend Lord Lucas of Chilworth. He was a good friend and a formidable opponent. I well remember when, from the Benches opposite, he would thunder out his attack upon the Government of the day, certainly in terms quite different from those of the noble Lord, Lord Nugent of Guildford. He spoke from years of experience; and even when he had left the Opposition Benches opposite and moved to the Cross-Benches he still carried on his work. I am sure it distressed all of us that he should have had such a long period of illness—but still he attended your Lordships' House. Now that he has gone, I am sure we should all wish not only to pay tribute to the noble Lord, Lord Lucas of Chilworth, but also to send a message of sympathy to his wife and his family.

My Lords, last Session we discussed one or two aspects of transport. Perhaps the most notable was the Bill, which is now an Act, on drink and driving. The noble Lord, Lord Nugent of Guildford, will remember that I gave a firm undertaking that the Government would see that the purposes of the Bill, the administration of it and the penalties under it would be made known to the public. I would pay a special tribute to the tele- 50 vision authorities, the radio authorities and the Press for the manner in which that publicity has been carried out and the matter brought before the people; and I hope the noble Lord, Lord Nugent of Guildford, will feel that the Government have carried out their promise in this respect. Certainly from conversations that I have had, I think one can say that already there have been some changes in habits. I hope and trust that there will be a marked effect on accidents. But we all recognised that this was only part of the problem. Clearly we needed to improve our highways; we had to see that we incorporated more in-built safety factors in our vehicles; and we needed better maintenance and more considerate driving. The Government, through the Ministry of Transport, will continue their research into all these fields, and when the new Transport Bill is brought before your Lordships' House it will be seen that there are added provisions in the field of road safety. Some of those aspects I shall deal with in the course of my speech.

I think it is true to say that some twenty years ago, or even more recently, few people would have appreciated what impact the revolution of the internal combustion engine would make upon our way of life. In 1956 private car ownership was some 4 million; in 1966 it was 9½ million; and in 1980, it is believed, it will be some 20 million. We therefore have this paradox. On the one side, we have the immense benefits that come to our family life and our ability to move across the countryside. We also see the effect upon the location of industry. Yet, on the other side of the paradox, we see our villages destroyed, we see the misery of commuters, and we have the noise, the fumes and the fatal accidents.

I have not the slightest doubt that the challenge that faces the present Minister of Transport is perhaps the most difficult of any which have faced anybody who has ever held that office; for although vast sums of money may be available—and certainly more is now being spent than ever before—even setting aside the problem of resources and assuming these are unlimited, our towns and our cities are unplanned for the motor age. One has only to see the major effect that a stoppage in a small street in London has in congestion throughout the 51 area to appreciate that. I do not believe that there is any alternative while pressing on with reconstruction, but to seek a better use of our existing methods of communication. The Transport Bill of this year, a major Bill, will seek to provide some solution to this problem.

The legislative framework which the Government inherited is not adapted to the problems of to-day or to-morrow. For example, the Transport Act 1962 broke up the British Transport Commission into five constituent bodies: the Railways Board, the London Transport Board, the Docks Board, the Waterways Board and the Transport Holding Company. I think we should agree that the British Transport Commission (as it then was) was too large. It was dominated by the problems of the railways. But in our view, when we were in Opposition and as of to-day, the legislation had two major defects. First, the severely commercial duty laid upon the Boards was unrealistic. The result has been that, despite very great savings by the railways—a reduction in costs of some £115 million between 1963 and 1967—the Board's deficit last year was £135 million, and an even larger deficit this year, of some £150 million, has been forecast. The London Transport Board have also found it impossible to square their statutory duties to break even, taking one year with another, and to provide an adequate public transport service. Last year the Government had to promote interim legislation to make deficit payments to the Board. The Waterways Board are also running a deficit, and have little hope of being able to eliminate it.

Secondly, the Act created a framework for open competition between nationally-owned road and rail transport, especially in the carriage of goods. This, in our view, is a plain misuse of nationally-owned resources. The situation, therefore, called for fresh thought and action. The Government have taken a comprehensive look at the transport problems of the country, and the broad lines of their policy were sketched out in the White Paper, Transport Policy, published last year. The Transport Bill will lay down the framework of a reshaped transport system suited to the needs of to-day and to-morrow—the social needs no less than the economic 52 needs. We have adopted a functional and not a doctrinaire approach in our transport policy.

My Lords, before coming to some of the details proposed I should say some words about our broad proposals. We recognise the importance of an efficient transport system to the economy of the country. We must therefore provide a framework in which the nationalised part of the transport industry, and indeed the whole of the transport industry, can develop efficiently to meet the requirements of the rest of industry and the whole community. We must establish the right incentives for management, but we must also have regard to economy in the broadest sense of the word. The demand for the movement of both passengers and freight is growing so fast that we must make the best use of all our resources. Since we have a well-developed railway system, which we have decided to retain with a basic network of some 11,000 miles, it would be economic nonsense not to make the best use of this system, to let it lie idle while our roads become more congested, in spite of the great efforts which are being made to modernise them. Our aim is to make the most efficient use of both road and rail, but in such a way that the public is given the best possible service. We intend to get back on to the railways that traffic which they are most suited to carry. This should help to reduce the burden on the taxpayer of the present heavy deficit on the railways and bring some relief to our roads, and that, certainly, without doing damage to the road transport industry which I believe will continue to grow with the growth of the economy.

My Lords, I should like now to refer to the National Freight Corporation. I think it would be agreed that the key to any freight policy is efficiency and safety. Bulk movements of heavy freight are usually made by rail or by sea, and there is limited scope for improving efficiency in that respect. But regarding general merchandise and parcels there is, in the public sector, a great deal of wasteful and inefficient direct competition for the same kind of traffic between road and rail. The Government have therefore decided to set up a new organisation to integrate the publicly-owned road and rail freight services in this connection and to provide a comprehensive range of 53 door-to-door services using both road and rail. The National Freight Corporation is to be a new nationalised undertaking, appointed by and directly responsible to the Minister. It will operate the T.H.C.'s road Roods services, and take over and integrate them with the railways' sundries and freight-liner services. It will have a particular duty to make the maximum economic use of rail transport.

There seems to be considerable misunderstanding about the role of the National Freight Corporation. I must repeat what is involved in the reorganisation of freight transport in the public sector (which is justified by the need for greater efficiency). The railways will concentrate on providing the wholesale service which they are designed to do—the conveyance of bulk materials over long distances, company trains and trunk haul of freight-liners. The National Freight Corporation will offer the customer a door-to-door service, a through service by road or by combination of road and rail as appropriate. The freight-liners will play a great part in this field, and we must use them to the maximum advantage. It is Government policy that as much freight as is economically justified shall go by rail, and the N.F.C.'s road haulage connection will help to ensure that freight-liners will get more traffic than would otherwise have been the case. Proposals in the forthcoming White Paper on Freight will show that the Railways Board will be well rewarded for hauling the freight-liner trains and for their contribution to the development of this concept. We shall welcome the co-operation of private hauliers in using freight-liners. But, my Lords, the N.F.C. cannot depend entirely upon them. It must have freedom to provide a through service to ensure maximum efficiency and to provide competition for the private sector. The public sector, too, will be enterprising, and I believe that the hauliers will be able to respond.

The N.F.C. is going to expand, and will do so as fast as is possible on a commercial basis—and I stress the words "on a commercial basis". It has been said that this expansion will be done by buying up private firms at knockdown prices after the N.F.C. has undercut them with the help of a subsidy. My Lords, this is not so. This has been 54 called nationalisation of road haulage. My right honourable friend has already said publicly that road haulage will not be nationalised, and that the N.F.C. will not have a freight monopoly. The private sector will still have an important role to play. Freight-liners are a valuable asset, and they will not need a subsidy. If they should undercut road hauliers it will not be because of a subsidy but because they are more efficient and a more economic form of trunk haul transport. The N.F.C. will be expected to facilitate and exploit the use of containers on a big scale. The freight-liners will indeed be a key to the N.F.C.'s ability to operate a comprehensive and integrated through service, for containers are, in themselves, an integrated form of transport. They can be moved equally well by road, rail, sea or even by air.

Much has been said about a container revolution. I was recently in Singapore and Hong Kong, where I saw that the authorities are concerned about the development of containerisation. But this is only the beginning. The full impact is yet to come. The railway freight-liner network is being expanded, and containers are coming into increasing use, particularly for short sea movement to the Continent and Ireland. United Kingdom shipping lines are investing in new fully containerised services with specially built ships for the trades with the United States, the Far East and Australia.

My Lords, if I may, I should like to say a few words about ports, for there may be seen the big implications of containerisation. Ports, clearly, are a key factor in the economy of an island nation. The Government have developed a three-pronged policy to bring big improvements in the ports. During the Conservative Government's period of office the average investment was some £18 million a year. In 1965 it was some £26½ million. In 1966 it was £35 million, and the 1967 figure is expected to be some £45 million. A considerable part of the investment is to be devoted to new container facilities at Tilbury and at Liverpool, and the Government are giving port modernisation grants of 20 per cent. of the cost of approved port works and equipment. The Government have been able to end the casual system of employment of dock labour and the excessive number of employers of casual 55 labour. The new system, which was introduced on September 18, provides that each man shall work permanently for one employer—a major event in the port transport industry. The new arrangements are working satisfactorily in most ports, with the possible exception of Liverpool and some parts of London. The new scheme provides a great and overdue social reform. It provides improved conditions for men and also opportunities for great advances in efficiency in the ports. The Government have already announced plans for reorganising the ports on the basis of public ownership, and the appropriate legislation will be introduced in a later Session of this Parliament.

My Lords, I turn now to road goods transport. In order to get the most efficient pattern of freight movement in the country the Government are concerned that road and rail should play the roles for which they are best fitted. This will be achieved in the public sector by the N.F.C. But the greater part of the country's freight is moved by the private sector, by public road hauliers and the "C" licence operators. The existing system of carriers' licensing was established some thirty years ago, in very different circumstances from those which now prevail. The Government have therefore proposed a completely new system of licensing control over road goods transport, with the twin objectives of securing the most rational division of freight movement between road and rail and promoting safety and higher standards in the industry.

The licensing of goods vehicles was initiated by the Road and Rail Traffic Act 1933 and the present system is substantially the same as it then was. The system was designed to regulate competition within the road haulage industry, in view of the depressed conditions arising from rapid, unregulated expansion; to protect the safety of the public and the drivers by providing sanctions against the operators of unsafe vehicles; and to give some protection to the railways by allowing them to object, along with other road hauliers, to the grant of licences to public haulage operators.

The Minister had to consider not only whether the system effectively achieves these objectives, but also whether they are 56 relevant to present-day needs. I believe there are two valid objectives which licensing should seek to achieve. The first is the protection of public safety. The promotion of high standards of maintenance and operation within the industry is just as important to-day as it was in 1933—perhaps more so, since the roads are more crowded, the vehicles more powerful and the incentive to break the law for financial gain remains. Yet the existing system does not allow for adequate inquiries to be made into the suitability and competence of intending operators, and its disciplinary powers have proved inadequate. The second objective is that licensing should contribute to the overall objectives of freight policy by helping to ensure that a more rational division of traffic between road and rail is achieved. The bulk of present road traffic is unsuitable for rail but a relatively small amount—which would make a big difference to the railways—could be transferred to rail without imposing additional costs on industry and with benefits to the economy as a whole.

My right honourable friend proposes, as a first step, to exempt from all carriers' licensing the 900,000 light vehicles that do not exceed 30 cwt. unladen weight. These are nearly all operated on own-account and are mostly light delivery vans and tradesmen's vehicles used for local runs. There are no economic grounds for subjecting them to quantity control. As regards quality control, most of these vehicles are operated in towns and, although their accident rate is high, the accidents in which they are involved tend to be less serious than those involving heavier vehicles. But in any case, these vehicles will still be subject to the same annual tests as private cars are and also to roadside checks by examiners.

It is therefore proposed to concentrate the controls of the quality system to the 600,000 vehicles over 30 cwt. For the operators of these 600,000 vehicles there would be a new type of carrier's licence. It would be granted only if: first, the licensing authority were satisfied that the applicant intended and was able to provide adequate maintenance facilities for his vehicles, to keep proper control over their loading and to arrange satisfactory checks on the hours worked by his drivers; second, the licensing authority were satisfied that the applicant's financial resources were commensurate with 57 his proposed scale of operation and that he had sufficient business in prospect to maintain reasonable financial stability; third, the applicant held a new type of personal licence (a "transport manager's licence") issued by the licensing authorities and entitling him to manage a transport undertaking or to employ the holder of such a licence in a position of responsibility.

These criteria are designed primarily to uphold the proper standards of conduct and operation in industry, and in particular to protect public safety. The power to investigate the applicant's financial prospects is necessary because operators in financial difficulties are sometimes tempted to neglect maintenance, to overload their vehicles and to overwork their drivers. The Government—and I am sure that the House will agree—cannot continue to tolerate a state of affairs in which anyone with a prospect of a few cut-rate contracts, can buy a secondhand lorry on hire purchase for a few pounds, neglect its maintenance and so become a menace on the roads. It is proposed to make these financial tests discretionary and not mandatory and to leave it to the licensing authority to decide whether they should be applied. A further safety measure to be implemented in the Transport Bill will be a reduction in the maximum hours in a day and in a week that a professional lorry driver may work.

I now turn to quantity control. The second objective of licensing—a more rational distribution of freight between road and rail—will be met by a new system of quantity licensing. It will apply to only a small proportion of the vehicles liable to quality licensing. It will apply to some 70,000 of the 600,000 vehicles, to those which are more than 16 tons gross weight and engaged either in hauls of over 100 miles or in carrying certain bulk commodities, such as coal, over shorter distances. The reason for applying the new scheme is that, broadly speaking, these are the ones carrying freight which is suitable for rail movement, whether by freight-liner or in bulk train-loads. The railways—and the N.F.C., as operators of the freight-liners—will be able to object to an application for a quantity licence if they reckon they can carry the traffic more quickly, reliably and cheaply. It will be up to the road operators to show that they cannot. But I should like 58 to stress that there is no question of forcing traffic on to rail where the service that rail can offer is inferior to movement by road. This is no revolutionary thought. It is, in fact, a current trend of policy on the Continent. I need say no more, I think, in regard to these particular proposals, for we shall have the opportunity to do so when the White Paper is issued and the Bill is before the House.

I will turn now to passenger transport. The House needs no reminding that public passenger transport has been finding it increasingly difficult to pay its way and to provide a reasonable service in the face of an ever-increasing shift to private transport. But public transport is essential, not only for peak hour commuter traffic, but for many people who have not, and will not have, their own transport. The Government therefore propose a range of measures to re-investigate public transport. First, I believe that there is a need for substantial change in the present pattern of the organisation of public transport services, especially in the large conurbations. Public transport is not planned and operated on an integrated basis. The Government therefore propose taking powers to set up passenger transport authorities over wide areas, with powers to plan and operate public transport services. They will be able to cut out duplication and overlapping and the different fare scales operating in the same districts. A start will be made in the West Midlands, Merseyside, the Manchester area and Tyneside.

The Government are proceeding on the basis that public transport services are public services, which should be organised for the general benefit of localities. The passenger transport authorities, therefore, will be under local authority control. It will be up to the authorities themselves to decide their financial policy—for example, whether to increase fares, to reduce costs through economies and even perhaps less satisfactory services, or to subsidise services through precepts on the rates. This is not the destruction of competition. There is, in fact, by agreement and by virtue of the licensing arrangements, very little competition in the bus world. There is a need for rationalisation and for greater local control over the pattern of transport required to serve local needs.

59 I turn now to financial assistance for public transport. The Government will be bringing forward measures in the Transport Bill to provide for financial assistance for public transport—for example, for grants towards new capital investment in fixed structures such as bus stations or towards new rail or monorail systems; and power for local authorities, with Exchequer support to contribute to the provision of bus services in rural areas. In regard to traffic measures, public transport is badly hit by increasing traffic congestion. There is no hope, even with the increased resources which the Government are putting into urban road building, of coping with this problem solely by road improvements and construction. The long-term solution depends on getting a better balance between public and private transport. But in the short term, traffic congestion must be minimised by expert traffic management and by sound and vigorous parking policies. This is a national problem, but the solution requires local decisions and local action. Local authorities must have adequate powers, and the Government will be bringing forward measures in the Transport Bill to improve their powers to manage traffic. Around this framework, local authorities will be encouraged to develop comprehensive traffic and parking plans for the future.

I have mentioned that the Government have been devoting an increasing proportion of the road programme expenditure to urban roads. That does not necessarily mean less for the inter-urban trunk roads, because we have the biggest road programme ever. The total spending this financial year is expected to be some £270 million, more than double the expenditure five years ago, and it is increasing; in three years' time, it is expected in England to reach some £320 million. The Ministry of Transport are very conscious of the need to get greater value for money, and there is much research going on. New ideas are coming forward all the time and these are being carefully considered. The House will be aware of the White Paper we have issued dealing with waterways. These waterways still have some economic use. But for the first time we are giving particular stress to the amenity and recreational 60 facilities that are offered by the canals and other waterways.

The changes outlined for the pattern of freight and passenger transport will obviously have a big impact upon the role of the railways. The position of the railways has been central to Government thinking. The Government firmly believe in the continuing need for a sizable railway system, and they and the Railways Board have already indicated the size and shape of the network to be used as a basis for modernisation and development. The railways are an important national asset, to be used to the most effective purpose. With the enormous development of road transport, this means concentration on the role railways can most effectively play, in the mass movement of passengers and freight, in intercity passenger trains, in commuter trains, in the movement of bulk freight and freight-liners. This will be very much the pattern of railway development.

The Railways Board will need a new and realistic financial framework within which to operate. To determine this framework was one of the main tasks of the special review of railway policy set up by the Minister of Transport in the summer of last year. The report of the Joint Steering Group for that review will be published as part of a White Paper on railway policy within a few days. Clearly, I cannot anticipate what is in that White Paper, but I can say that the Government fully intend to relieve the Board of the obligation they are under at the moment to pay for socially necessary but unprofitable services which, with the Government's agreement, they maintain, so that the Board can set up a sensible financial target.

I set out to make a brief speech, but on such a subject as transport one finds oneself covering far more ground than intended. I wish to say this in closing. My right honourable friend has had close and detailed discussions with both sides of industry. These have not been restricted to the transport industry alone, for manufacturers, shippers and local authorities are as closely involved as the transport industry. I hope that your Lordships will regard the new Transport Bill as an effort to meet changing circumstances. I recognise that it may not stand the test of time in every detail, because all those involved in the industry recognise the need for changes that come 61 from technological advance. When the Bill comes before your Lordships' House—I fear it is a rather long Bill—if we can examine it on the basis that it is a sensible approach to the whole problem, as I believe that noble Lords opposite will in the end come to believe, I am convinced that the Transport Bill will play a significant part in the growth of the communications industry of this country.

§ BARONESS EMMET OF AMBERLEY

My Lords, before the Minister sits down, could he possibly give the House any idea of the increased number of civil and local government servants that will be employed as a consequence of the new proposals?

§ LORD SHEPHERD

My Lords, I think that that is a question which the noble Lady might put more appropriately when the White Paper is issued. Certainly my noble friend and I could not answer it without notice.

§ LORD NUGENT OF GUILDFORD

My Lords, may I begin by thanking the noble Lord, Lord Shepherd, for his wide-ranging exposition of this vast and complex subject, and may I say how much we enjoy seeing him back in the field of transport, despite his other ministerial responsibilities. I feel bound to observe that his attractive manner and emollient words have contrived to make the Government transport policy sound eminently respectable and reasonable. Indeed, as I shall come to show, there are some good features in it. But although, as he has already observed, I am not one to thunder, this afternoon I am going to make a few sharp criticisms, and I hope to disperse the reassuring impression the noble Lord, Lord Shepherd, has managed to give to your Lordships that the Government's transport policy is good in every way. My own belief is that there are features in it which are both unsound from the transport point of view and even more unsound in their impact on the national economy.

The three features on which I should like to say a word or two are, first of all, the formation of the passenger transport authorities; secondly, the new system of licensing of freight vehicles; and thirdly, the formation of a National Freight Corporation. I have observed in speeches elsewhere that the Minister of 62 Transport has been at great pains to explain that the private bus companies which are going to be taken over into the passenger transport authorities are not going to be nationalised; they are going only to be regionalised. I noticed that the noble Lord this afternoon was El pains to explain that these new authorities would be under democratic control by boards composed of local authorities. Perhaps the noble Lord would confirm that it is the Minister of Transport who will appoint the chairman of each authority, and virtually will appoint the chief executive, too; and as the Minister will also control their annual capital allocations, there is not much doubt that she will have pretty well the same control over these transport authorities as a Minister has over any other nationalised industry.

I readily acknowledge that the Minister is right to be concerned that public transport in our conurbations should be of a high standard—indeed, the life of these big areas depends upon it—and that services should be integrated. Where I feel the Minister is completely wrong is to set up these new regional authorities to acquire all private and municipal bus undertakings. In my judgment, it is a complete illusion to think that the mere change of ownership to a bigger public authority covering a bigger area is of itself going to achieve any benefit in the transport services given. In fact, the general impression of experience is that the bigger the transport authority, the bigger the management problem. If we take the example of London Transport, which the noble Lord, Lord Popplewell, will remember examining when he was the Chairman of the Select Committee on Nationalised Industries, your Lordships will see the severe management difficulties which exist within this in many ways admirable service. Here is a comment which that Committee made in a Report in 1965: Your Committee believes that the managers of London Transport may have resigned themselves too readily to the difficulties that face them, and appear to be unduly complacent about their own responsibilities in these matters. Those were the matters of labour relationships. They go on: Your Committee's impression is that London Transport has been slow and unimaginative in seeking longer-term solutions. 63 The fact is that London Transport, although it is still a superb city transport service and superbly equipped and constructed, has within it serious weaknesses in its labour relations and serious weaknesses in management, particularly in the remoteness of management in the day-to-day work on the ground and on the road. I therefore make the point that, by contrast, the smaller bus company, whether privately run or municipally run, has the great advantage, which is found almost invariably, of much closer relationships between management and men and, therefore, a much better spirit in the services concerned.

I should have thought that a privately-owned bus company, where people are prepared to put up their own money and provide the capital to equip the buses, and run them risking their own money if they suffer a loss, would have a unique attraction. Heaven knows! there is not much profit to be made out of it. I would suggest that these private companies have the attraction of economic operation, which is a most valuable yardstick for all other bus undertakings. Incidentally, their affairs are controlled, and therefore their profits are controlled, by the traffic commissioners who give them their licences; and, indeed, the traffic commissioners, in my judgment, achieve a very satisfactory degree of integration. Noble Lords will be familiar with the general principle by which the traffic commissioners, who are officials of the Minister of Transport, issue licences to bus undertakings, on the basis that the profitable urban routes are protected on condition that the unprofitable rural routes are continued to be run by the bus undertakings. That works out very well.

I suggest that the Minister, in her enthusiasm for nationalisation, public ownership or whatever euphemism you may like to use, has completely overlooked the vital importance of management in providing satisfactory transport services. I suggest to noble Lords that the right way to keep our public transport services working, and working satisfactorily, is under two heads: first of all, fiscal; and secondly, traffic engineering. On the fiscal side, it really was crazy for this Government to remove the investment allowances to the private bus companies. They should obviously be restored. 64 Secondly, the principle of petrol tax rebate has already been granted, and here is a way, costwise, in which fares can be satisfactorily equated, and where some further rebate can be given.

Secondly—and the noble Lord, Lord Shepherd, had something to say about this of which I warmly approve—all other city or conurbation authorities have much work to do in the field of traffic engineering to see that the public transport services have the necessary priorities, in regard to routes, stopping places, bus stations and so on, to ensure that satisfactory services are given. But I would urge noble Lords to accept the view that, the Government having set the stage in that way, the right thing is to leave private and public bus companies to run together. They will undoubtedly serve the public well and stimulate each other.

I should like to say a word or two about the new system of goods vehicle licensing. There are three or more features of this to which the noble Lord, Lord Shepherd, referred. First of all, there is the intention of the Government to end the existing licensing system. With that I certainly agree. I think that for some time most of us have felt that it had served its purpose and it was time to make a change. I agree, also, that it is right to get rid of the whole system, and that greater flexibility will get greater use of all vehicles. I speak particularly of "C"-licence vehicles being free to carry any freight that they may wish to carry. I entirely agree with the noble Lord's comments about quality control of goods vehicle licensing, and I welcome those measures. They are, as he will recognise, steps in a long progression for gradually improving the safety of these vehicles. Those are sensible measures. I should like to see them detailed in due course, but in principle I support them.

I feel that the Government are making a serious mistake on distance control for heavy freight vehicles. The noble Lord has explained that these heavy freight vehicles are to be limited to 100 miles radius, and that over that British Railways can make objection where they can maintain that they can provide an equal service. Inevitably, in most cases they will so maintain. This is to apply to all heavy vehicles; not only to "A" and "B" licence vehicles, as of now, but 65 also to "C" licence vehicles—that is to say, vehicles owned by manufacturers and traders. It seems to me that this kind of measure, which really sets out to clip the wings of the private sector of road transport in the heavy trade vehicles, a vital part of the commercial life of this country, is one which a railway protection league might put up; not a Minister of Transport.

The fact is that nowadays, as we all know, not only the light vehicles but the heavy vehicles as well are used by industrialists as a sort of expandable conveyer belt by which they can carry manufactured goods, their goods generally, about the country for assembly purposes. This has made it possible for manufacturers and traders generally to operate their plans with the very minimum of stock carrying, because they can be certain, both as to time and as to quality, when they will get the components or stores, or whatever the supplies may be, that they want for their particular process. It is because they have 100 per cent. reliability when they are using their own vehicles, or some other road haulage vehicles, that this system has been such a sound economic matter in the development over the last twenty or thirty years. Undoubtedly, the saving in cost in reducing stock-carrying is very significant indeed for the manufacturing world.

I would say this to the noble Lord, Lord Shepherd. If manufacturers are to be asked to operate under the threat of this restriction, or if they are left in a continuous state of uncertainty because they can never be sure they will be able to use one of their own vehicles—the railways may come in and object, and this will mean that their goods will have to go by rail—this is bound to have a seriously disruptive effect on the industrial and commercial life of this country. We can all refer to many examples of delay and poor quality in railway service—of course, they are legion—and there is an infinite number of jokes about them. I do not propose to make any, because I regard this as a most serious matter.

The fact is that, except for the new specialised services, the quality of the freight services of the railways is simply inadequate to deal with the kind of situation I am speaking about now. It is adequate enough to deal with bulk supplies, where time is not of the essence, 66 where the value of goods is not very high, and breakages are not so important; but the railway freight services are not adequate to deal with the kind of service which industry requires to-day.

§ LORD SHEPHERD

My Lords, before the noble Lord carries on (because I am sure he would not wish to be misled or to mislead the House), may I repeat something I said earlier? I said that I should like to stress that there is no question of forcing traffic on to rail where the service that rail can offer is inferior to the movement by road. And I set out the series of criteria. I should have thought that if the noble Lord would read those words with care to-morrow he would see that I dealt with pretty well all his fears in this field.

§ LORD NUGENT OF GUILDFORD

My Lords, I dare say that if the noble Lord were Minister of Transport I might feel differently about it. But I have read the Minister's speech to her Party Conference, and I have not much doubt about what her intentions are in this matter. The document I am particularly relying on is, of course, the Ministry of Transport Press handout of July 20 of this year, and it sets out exactly what de noble Lord has said. But these factors have to be judged by some sort of tribunal, and that means to say that the manufacturers who wish to use their own vehicles are at risk to that extent. At the end of the day it is simply a matter of judgment as to what is to be the speed, reliability and cost; and I am quite sure that this is going to introduce a factor of uncertainty, and indeed of rigidity, which is bound to increase manufacturing costs in this country.

I suggest, my Lords, that it is time the Minister of Transport realised that we here, at any rate, are concerned, not to give a new deal to the railway unions, which the Minister told her friends at the Party Conference she was concerned to give; we are concerned to give a new deal to railway users, both freight and passenger. I am sure that the proposed system will not turn out to be for the benefit of our manufacturing industries. The right way is to leave road and rail to compete freely in this field. The noble Lord said specifically that this was the opposite of Government policy, and 67 that he felt it was unwise and wasteful to have competition. But competition will stimulate efficiency. Indeed, in regard to the new National Freight Corporation, the noble Lord said that this was something he welcomed. Well, why not have it here as well? The fact is that manufacturers and merchants take tens of thousands of decisions every day about what form of transport they will use, how they will send their goods, when and in what quantity—

§ LORD SHEPHERD

My Lords, this is very interesting. Does the noble Lord recognise that under the present legislation, which no doubt he has supported, the organisations are required to break even, one year with another? The noble Lord believes that there should be competition, a fight for business. Would he say, however, that those authorities who have to fight for business with private enterprise should still have a statutory duty to provide an adequate service, which clearly they are now unable to provide?

§ LORD NUGENT OF GUILDFORD

My Lords, the adequacy of the services is, of course, something which is laid down in general principle. But the noble Lord may have forgotten that the railways no longer have a common-carrier responsibility. They have a trading responsibility. While I agree that there is always room to consider the structure, and perhaps there may be further improvement, there are big elements of management weakness which the noble Lord must be aware of, and it is not possible to judge the efficiency of the railways until the picture is clear. But I think that throughout the economy competition of services and supplies is the right way to give satisfaction and to get efficiency, and I believe that it is retrograde to clip the wings of one of the services in order to favour the other. And I believe that the outcome will be that it will increase costs, and not reduce them.

May I now say a brief word about the National Freight Corporation which, as I understand it, is to combine the British Road Services element from the Transport Holding Company with certain rail freight services, including liners and containers. This proposal has certain attractions, and I thank the noble Lord for his description. 68 I should like to look at it very closely in due course when we get the Bill. But it raises certain anxieties in my mind. The fact is that the Transport Holding Company has been a success, and British Road Services have been a success—they have made a profit; they have done well. I feel, therefore, that it would be unwise to pull them out of the Transport Holding Company and combine them with this section of rail freight services, all in the interests of integration.

I have heard said that Sir Stanley Raymond, Chairman of British Railways, has objected strongly to losing this growth sector of British Railways. Whether this is true or not, I myself see a great disadvantage in a situation in which the railways, which in the main are bound to be a shrinking service, lose the brightest aspect of their whole service by its being taken over by this new authority. I should have thought there could be disadvantages in this—in the use of B.R.S., to some extent, perhaps to cross-subsidise certain rail services. However, we shall wait to see the details of this in due course when we have the Bill before us.

§ LORD ROBERTSON OF OAKRIDGE

My Lords, may I interrupt the noble Lord, not in order to argue, but to ask him to clarify a matter? I think he will agree that British Road Services have always been profitable, and were profitable before the British Holding Transport Company was ever created. I think he will also agree that they have never been under British Railways.

§ LORD NUGENT OF GUILDFORD

My Lords, I do indeed. I do not think I have said anything to the contrary. They were originally under the Transport Commission and, mercifully for them, we took them out, as the noble Lord will remember.

I should like now to turn to two aspects of this Bill as I see them affecting the economy as a whole. I speak, of course, of the further nationalisation measure, which I regard as by far the worst feature of this Bill which we shall in due course see before us. First of all, I wish to speak about the private sector, and then to say a word about the nationalised industries. As we all know, the private sector is about three-quarters of the national economy, and the Government policy now of taking over another section 69 of the private sector is clearly seen as a further attack on private business, and also in restricting the private road transport in favour of the railways. Inevitably this is taken as further evidence of this Government's basic hostility to private business, and it still further shakes the confidence of managements, large and small. They see the prospect that under this Labour Government there is no certainty which sector may come next for the attention of the Government, possibly with further measures of complete nationalisation.

I must say that it seems the greatest possible pity to me that, with the acrimony of the steel nationalisation just about subsiding, the Government should spark this all off again for another twelve months with these proposals of nationalisation in the passenger transport sector. Confidence within the private sector is already dangerously low. Next week we shall be having a debate about the economy, when I am sure we shall hear much about this. The main factor with which we are concerned, namely an increase of exports, depends almost 100 per cent. on the private sector of the economy, and surely it must be the top priority of the Government to encourage and strengthen confidence in the private sector rather than have this transport policy, which does exactly the reverse. It seems to me that to strike a further blow at the private sector now is both irresponsible and partisan; and in saying that, I choose my words most carefully and responsibly.

My Lords, let me turn to the nationalised industry sector, which represents about 25 per cent. of the economy. The nationalised industries are the favoured children of this Government, and I dare say they may find this Government's caresses as unwelcome as the private sector finds their cuffs. It would be interesting to hear the comments of the Chairman of the Railways Board on this particular point. The fact is that all boards of nationalised industries really want to be left alone, free from political interference and pressure, to get on with the job of running their vast industries.

The Government action now in taking over another sector of private enterprise inevitably arouses among the whole population an acute political feeling against nationalisation. Public opinion polls may 70 be somewhat fickle on some things, but on one thing they have been remarkably constant, and that is that the majority of the nation is against nationalisation. It is a fact that this undercurrent of hostility underlies the normal flow of complaints which are inevitable in any service, about the services provided by nationalised industries. The greater number of these are sent in to Members of Parliament, of all three Parties, and many of them end up as Questions in another place. By sparking off now a new conflict over nationalisation the Government boost and exacerbate this situation and do a grave disservice to the nationalised industries. As a result, the industrial and commercial life of the nationalised industries gets drawn even more deeply into political, and Party political, issues.

On the one hand, Ministers are pushed into taking increasing responsibility for the management of the nationalised industries; on the other hand, the boards of the nationalised industries are increasingly called to account on management matters by Ministers. Here I must pay credit where credit is due, to those in this House who were the architects of the original Acts, which provided that the day-to-day management should be in the hands of the boards and entirely insulated from Ministers. But the fact is that this continuing political pressure, which has gone on for the last twenty years, has eroded those safeguards, and at the end of the day the sufferer has been management.

Weakness in management has been the Achilles heel of the nationalised industries. I have had a long opportunity, which I very much welcome, of studying the nationalised industries, and, in my view, when the history of this post-war era is written nationalisation will be seen as the great economic experiment of these post-war years. And I would suggest to noble Lords, in the dispassionate atmosphere of this Chamber, that we should face the fact that the success of this experiment still hangs in the balance. The two "bull" questions cannot yet be clearly answered: one, does the nationalised corporation result in a fresh discipline to strengthen the work of a nationalised industry; and the second, does it result in a soft option which dodges financial discipline and weakens the national economy? Those 71 are the two "bull" questions, and the urgent need to get our balance of trade out of the red reminds us that financial discipline in this context is no theoretical requirement but a harsh reality, which we dodge at our peril. The fact that a nationalised industry works for the nation and not for private profit, will not of itself make it an asset; it becomes an asset only if it is managed with efficiency, at low cost and without waste of manpower and resources. Weak management results in higher prices for consumers and higher taxes for taxpayers.

During the course of his speech the noble Lord, Lord Shepherd, referred to the financial targets as being unrealistic, and I have already mentioned that there is a confused picture here—partly in regard to structural problems, which should be put right, and partly in regard to management problems, which very much should be put right, so the two run together. Nationalised industries face the challenge of serving the national interest with two inbuilt disadvantages: first, that they are insulated from the trading risks of the market, and secondly—and this is perhaps the most difficult aspect of it—the divided control at the top between the Chairman and the Minister.

During the period of the Conservative Government we made a determined attempt to overcome these weaknesses.

§ LORD POPPLEWELL

You made it worse.

§ LORD NUGENT OF GUILDFORD

The noble Lord will have a chance to speak later. We decided that for most of these industries which had been nationalised by the Labour Government it was in the national interest to avoid another change of ownership and, in spite of our misgivings, we felt that if the nation wanted the experiment we should do our best to make it work. Also, we hoped that a generous gesture from us would invoke a similar gesture from the Labour Party, and we crystallised our approach in the White Paper, Cmnd. 1337, published in 1961. This established financial targets for nationalised industries, defining a realistic financial target for each, and at the same time underlining our intention 72 to give nationalised industries the maximum independence in the interests of good management.

We also clarified the arrangements for the annual capital allocations, which we regularised, and removed the uncertainties and fluctuations of the past. I would not claim that there has been no interference in the later years of Conservative Government. Inevitably there has been some. Pressures of national considerations sometimes make them unavoidable—this, of course, is the dilemma of much nationalised industry—but they were far less: I can claim that in all certainty. We were able over the years to strengthen the management and strengthen the financial discipline in the nationalised industries, and, I believe, to cool the bitterness about the issue as a whole as a national controversy. In this improved atmosphere a direct benefit accruing to the nationalised industries has been the possibility of attracting a wider choice of top calibre men for the chairmenship of these industries. This, of course, is the sine qua non of greater success, and I think the financial results have reflected this, at any rate in some of these industries. It is clear to me, however, that the present Government's policy of reviving the whole issue of nationalisation, and keeping it going now with a further measure, is fast destroying the progress made, and can but cause the weakening of the nationalised industries.

The public's animosities over nationalised industries are now in full flood again, and by the time it has all been fought over in the next twelve months they will be very much worse. More and more Ministers will be seen as the people deciding what is to happen in each industry. Inevitably, Ministers are coming in more on labour relations problems, more on financial targets and prices, thereby generally weakening the standing of management and weakening the financial discipline. Therefore it is with deliberation that I make the charge to the Government that, by persisting with further policies of nationalisation now, the Government are not only doing great damage to the national economy, but are also fast wrecking the prospect of the experiment of nationalisation which they launched upon the nation. I can but hope that during the coming 73 months the Government may have second thoughts, both in their own interest and in the nation's.

§ LORD AMULREE

My Lords, I do not intend to follow the two noble Lords who have just spoken and who have made what have really been Second Reading speeches on a Bill which has not yet appeared before us. But I should like to say a few words. I always find a certain difficulty in dealing with transport, because it is very difficult indeed to separate it from traffic. Traffic and transport seem to me to be one and the same thing, and it is very hard to separate them. Proper traffic control and management relieves congestion and makes public transport operate much more quickly and comfortably than otherwise, which is what we all want to see occur.

Before I develop that point, I should like to take your Lordships across the Channel for a moment into France. Supposing one motors there—I am not talking about big towns where they have by-passes right round—when one comes to the smaller towns one finds that the heavy traffic, the traffic that does not want to stop in the town, is diverted round the town by roads not specially built but specially worked out for that traffic so that there is no need for it to go into the town. They are well sign-posted and easy to follow. This means that you do not require this destruction of the centre of some of the smaller towns which has occurred in this country, and in the middle of these French towns you find narrow streets, cafés, shops, and so on. Most town dwellers, I think, would much prefer some kind of road like that round their town. I remember the town of Baldock which was an appalling bottleneck on the Great North Road or the A1, and yet when the by-pass was being built the people of Baldock were afraid that it might take trade from the town. I think I am right in saying now that with the by-pass the traffic does not need to come into Baldock. Baldock is used for its proper purpose; people come in from the country with their cars, they can shop and they are really leading a more profitable and comfortable life. Traffic going through the town, particularly the commercial freight traffic, does not stop 74 in the town to shop they want to get through as quickly as they can.

There is a second point in favour of the idea of diverting traffic round the town; you get rid of a large number of dangerous loads in the town. I remember the town of Lincoln in particular—it may have changed now; I was there during last summer—where there is a steep hill going right down the middle of the town. All the big lorries, many with containers of fluids of various sorts, come down the hill at considerable speed. I think there are two sets of traffic lights on the hill, and if the brakes of the lorries were to fail an appalling accident could occur with a good deal of destruction and loss of life. One wonders why something has not been done to make a way round Lincoln for the heavy traffic.

The same thing is occurring in Edinburgh. There has been talk for a longer time than I can remember of building a by-pass round Edinburgh. The authorities there have concocted some kind of not very satisfactory ring route (I think it is called), but that has not done a great deal to ease the traffic congestion in Edinburgh itself. Now they have the Forth Road Bridge. One has the magnificent road from the North via the new road of the Forth Bridge, and one would have thought that it would have been possible now to decide that the next stage would be to make a by-pass right round Edinburgh, so that traffic would not need to go in, and in that way get rid of this tiresome ring route round the town. I think that is one of the things that has disappointed one in the past.

I was very pleased to hear the noble Lord, Lord Shepherd, say that the amount of money spent on roads is to be greatly stepped up, because our road development in the past has not proceeded as quickly as it should and, indeed, not as quickly as has taken place in quite a number of European countries. If one is dealing with traffic and transport, one must think very much about the safety of the people travelling on the roads, particularly the new motorways and other main roads which are being constructed. I should like to put in a plea to the Government to encourage more ordinary police patrol cars. I do a good deal of motoring about the country one way and another, and the number of 75 police patrol cars I see on these great roads is not really very great. One is impressed with the way drivers behave far more quietly and sensibly when they realise a police patrol car is somewhere near. I think that does far more good than having policemen in a car which looks like a normal car and which can just pop out and catch somebody who is going too fast. That will merely deal with the single person caught, whereas the fact of the patrol car being seen means that it has a sobering and calming effect on the people travelling on that road.

The British motorist is not very good at keeping to the speed limit—but that can be common to other countries. The second thing the British motorist is bad at is driving in his proper lane; people wander about the road, and it is amazing that more serious accidents do not occur. If you drive in the States, where they have far bigger roads with many more lanes, and where one would expect to find people drifting about far more than here, one finds that they keep pretty well in the correct lane and go at the correct speed. When I have inquired why this is they say, "We have got to do that, because you never know when you are going to run into a police patrol car, and if you are wandering about or going too fast you are for it on the spot". One would like to see more of that control occurring in this country. It might make the British driver a lot more courteous than he is at present. I think that drivers in this country are more discourteous than those in any other country that I have driven in. If one passes a car at any speed at all one gets hooted at, or lights are flashed, while some drivers follow at one's back with headlights on, behaving generally in a discourteous fashion. I have found that certainly is not the case in the States, where one would have thought it to be far worse.

I should like now to turn for a few moments to the carriage of goods. There is a good deal to be said for competition between rail and road, for one would like to see as much freight as possible brought back on to the rail. That is what the railways were built for, and that is what they can do. Now that the railways are settling down to a time of more reliability, I trust that that will happen to a greater extent. The railways 76 have had some rather bad publicity in the Press, about goods going astray and being mislaid. I do not believe that it is as unsatisfactory as some Press reports make it out to be.

The railways certainly have to perform some function as a social service, and I am pleased to see that the Government are prepared to give some kind of assistance in that connection, particularly in the commuter areas where we must have the railways running, otherwise road congestion would be appalling. The same applies to the remote country areas. I think I am right in saying—perhaps I should be corrected if I am wrong—that there is only one country in Europe where the railways are not subsidised in some way. I am not going to say that there is a direct subsidy, but they get certain advantages. Some get a direct subsidy, some get other advantages, and in some countries the railways are so mixed up with the national economy that they cannot be separated. I cannot see why the same thing should not apply to the railways in this country.

I think the policy stated in the White Paper is that supposing the railways were to break even or were to make a profit, that profit would go back to the Treasury to assist in wiping off the deficit. That does not seem to me to be an encouragement to people to work harder, to produce more and to make their railway pay, if by doing so the proceeds are merely going back to the Treasury to wipe off a deficit which has probably been written off some time ago. I believe the 1962 Act said that the railways should break even as soon as possible. That would lead to a paring down of the railways which is socially impossible and economically undesirable, for the facts that I have already stated do not make it possible for an efficient railway service to exist without some kind of subsidy.

There is a plan to allow local authorities in rural and other remote areas to assist when bus services are faced with declining passenger traffic and rising costs. Again, I think it is right that operators should receive some kind of assistance from local authorities, because they are performing a service which is socially necessary. If the services are going to run to a halt and are not going to work any more it will lead to a great 77 deal of discomfort, and worse, to a large number of people using them. So I certainly think that the bus services should be maintained, if necessary by the local authority.

The plan to make them work on a regional basis has some merit; but I share the apprehension of the noble Lord, Lord Nugent of Guildford, about whether they will not become too bureaucratic and too controlled. One will want to go into that question a great deal more carefully when the Bill comes before us, but, in general, probably I would accept it as a basis for conversations or talks, although not as something to adopt completely.

I said a few moments ago that I was disappointed about the way the road programme had developed in this country. Certainly there is a need for a great many more motorways. Suppose we get the Channel Tunnel. I do not know whether that is ever going to happen. I have been a member of the Parliamentary Channel Tunnel Committee since 1945 or 1946. We have talked about it—that it is going to come. It is always round the corner; but it does not seem to be arriving yet. But suppose it does come. There would be a need for a great passenger way from the South-East corner, where presumably the Tunnel will emerge, to the Midlands and the North. We shall not want it to go through London. It must in some way be diverted so that it does not have to go through London. Whether that means a tunnel under the Thames I am not quite sure. That is something which the experts can decide.

At the same time, we want a series of motorways going to the docks. That idea was put forward, I think, by the Liberal Party in 1929, in their Yellow Book, except that in 1929 the roads were not called motorways. The idea was completely ignored and, so far as I know, nothing much has been done about it since. I know that these roads are costly, but we in your Lordships' House discussed the question of toll roads just before we rose for the summer. I have never understood the objection to toll roads. They work well in other countries. France has them. Italy and the United States have them. One is not compelled to travel on them. If one wishes to travel speedily and easily one must be prepared to pay a little more. 78 If a driver does not want to go on a toll road he can use the old road, which then would be more comfortable than it is now, because the sensible traffic will have gone on the toll road.

§ LORD HUGHES

My Lords, if the noble Lord would permit me to say so, there was a rather useful discussion last week on this particular matter, about which there has been a change of mind.

§ LORD AMULREE

My Lords, I am trying to make the Government change their mind. I know that we talked about this matter, but I think we shall have to talk about it more than once before anything is done.

In conclusion, there are two minor points to which I should like to refer. One is not quite so minor. I am pleased that there is going to be a control over the safety of lorries and that the Government realise the dangers that arise where firms have not enough capital to maintain their vehicles. This constitutes a danger to the public, too. I would also suggest that something should be done about diesel lorries which pump out great quantities of black fumes along the roads. I am sure that that must mean that they are not working efficiently. If you have an efficient engine it does not cause that kind of nuisance. If we had more police patrols on the roads that is the kind of thing that they might be able to deal with. I have never yet seen a person stopped for emitting large quantities of black fumes from his vehicle. Sometimes if one is trying to pass such vehicles going up a hill it is impossible to see what is coming. I think that matter ought to be dealt with.

I should now like to make a minor point about traffic in conurbations. Why is it not possible to transform our bus services so that people tend to stand all the time rather than to sit all the time? If one goes to any capital in Europe one finds that the buses are for the most part single-deckers. There are a few double-decker buses in Rome, but the bulk of the people stand. There are a few seats in the corners for people who are frail and feeble and cannot stand, but one can get the same number of people, if not more, on the bus, and the bus does not have to be so large. It would not be a case of five or six unfortunate people standing in the middle during rush-hour 79 and the rest of the people sitting comfortably in their seats. I feel that the adoption of this suggestion would make some contribution to the speed of the traffic and to easing congestion.

I recently noticed a proposal to make a 40-square-mile parking control area round London. It seems to me to be something worthy of a great amount of support, because anything one can do to make it more uncomfortable for the commuter car to come into London should be done. If there were fewer cars coming in one could probably run a better public transport system, which would make the life of the commuter not more difficult but easier.

I should like to put one question to the noble Lord. I have informed him that I shall not be here at the end of this debate as I have an engagement I cannot break. I would ask whether it is the Government's intention to go in for the manufacture of containers for road and rail, and if the noble Lord could reply to-day or let me know by letter, I should be happy. When my noble friend, Lord Wade, spoke on transport matters in 1965 he finished with a quotation from the Yellow Book to which I have already referred, and I shall finish with the same quotation, which seems particularly appropriate: Time saved on the roads is money saved for the nation".

§ EARL FERRERS

My Lords, although I would not follow the noble Lord, Lord Amulree, in all the points he has mentioned, other than to say that I am quite sure Her Majesty's Government take the noble Lord's advice seriously, I hope that at least they will not take his advice when he suggests that London buses should be so made that one could only stand in them. I have always found that one of the attractions of coming back to this country from capitals on the Continent is that in London you do not have to stand, and you can occasionally sit, in a bus.

It is not insignificant that the longest paragraph in the gracious Speech which Her Majesty delivered yesterday referred to the Government's intention to reorganise the transport system of the country. Indeed, one realised, listening to the noble Lord, Lord Shepherd, this after- 80 noon, as he went over the whole canvas of the transport system, what a colossal undertaking this is going to be—and doubtless what a colossal Bill it will create! We have known for a long time that the Party who at present form the Government have wanted what they describe as a fully integrated transport system which can make the best use of the country's resources. That is an entirely understandable desire and is in many ways praiseworthy. For, after all, transport—either the lack of transport or the superabundance of it, its efficiency or inefficiency, its cost, its hazards and dangers—affects the life of everybody, and indeed of every business. Therefore we all wish to make the best use of the resources of transport. But the question is, how best to do so. The Minister of Transport, in her speech at the Labour Party Conference at Scarborough, spelt out quite clearly exactly what was in her mind, and presumably it will form the basis of the Bill which will come before Parliament in a short while.

The first thing I would say to the Government, irrespective of what one may think about the Minister's views and her proposals, is that I hope the Government will consult and discuss, and not merely inform, all the way along the line with the people who are going to be affected by any decisions. It does not matter how good or how uncontroversial any proposals are—and I am quite sure the Minister's proposals will not be uncontroversial—a master plan is needed. If it is to be imposed on an industry without full discussion beforehand about how best to avoid the violent problems which are bound to arise with such reorganisation, then the plan will be bound to fail. To read the Minister's speech at Scarborough, in which she described herself as being an impatient woman and claimed for herself the position of overall authority, one might have been forgiven for feeling that possibly such plans as she had in mind had been made without adequate consultation with those who were going to be affected by them or were going to have to operate them, or even those who would have to use the system.

What lies behind the plan for integrated transport? Indeed, one wonders what is the cause of the desire for integrated transport. Is it not in fact the huge 81 annual deficit of the railways? If it were not for this fact, I do not believe there would be anything like the call for an integrated transport system that there is at present. There is no simple answer to the problem of the deficit on the railways. Clearly, we cannot continue to have the same services, the same stations, the same people employed in the same types of jobs and, at the same time, mysteriously remove an annual deficit of £150 million. When the Conservative Party were in power they tried to find the answer by running the railways on fundamentally businesslike lines. This provoked a violent reaction from some members of the Party opposite, who felt that this was a most disgraceful thing to do. But it at least had the effect of reducing the annual deficit. In the last three or four years this situation has changed and the annual deficit is again mounting.

But the answer of the present Minister of Transport is to put on to the railways traffic which, if there were complete freedom of choice, would go on to the roads. The great danger is that while this might make the railways deficit smaller—though it has yet to be shown that just extra traffic will do this—we may be in danger of making industry far less efficient in making them send their goods by a method which would be unacceptable if normal commercial circumstances prevailed. In order to achieve this aim more public bodies, more authorities, and more corporations will be set up; and this will curtail, rather than enhance, the ability of the men whose job it is to run transport to do their work effectively.

One wonders what will be the effect of all this. I suppose that in the long term it is likely that long-distance haulage and bulk haulage by road may largely disappear. This may be fine for the motorist, but will the railways really be able to cope with the extra traffic which they will be given? And will they be able to give industry as efficient a service as is now afforded? I think that road hauliers will be alarmed to find that if the railways object to their being given a quantity licence it will not be issued, unless they, the road hauliers, can show at a public inquiry that they can carry the goods more economically and effectively than the railways can. That may sound fine, except for the fact that 82 it is an impossible condition for an applicant to accept: that he must show that Ins method of transport is cheaper than that of another, when the facts of the other are not open to him.

In the short term, hauliers who are now engaged on doing work which the railways will claim will either have to cut down their activities or go out of business altogether. Already they are facing problems as a result of this plan, in that many of the day-to-day management decisions, such as the replacement of new vehicles, are subject to a new uncertainty. This is merely one example of the uncertainty that prevails in every aspect of the transport industry at the moment, whether it be the hauliers, the bus operators, the port operators or the local authorities, or even, indeed, the taxi drivers who apparently, according to the Minister, are going to find a new competition from the passenger transport authorities.

If the Government want to tackle the transport problem truly effectively from the root, I respectfully suggest that they should tackle the worst part first. They should tackle the huge problem surrounding the vast annual deficit of British Rail. Are the administration and the management of British Rail beyond improvement? Are the techniques used in management the best which can be obtained? Indeed, is the structure of British Rail the best that it could be, or is it so complex that, as a friend of mine who is employed by British Rail once told me, it is more difficult to get a decision out of British Rail than out of a Government Department? Then, what action is being taken about over-manning on the railways? Should uneconomic services be run on social grounds; and, if so, should there be a Government subsidy to British Rail for providing them?

My Lords, these are highly relevant questions, the answers to which might help the Government to attack the first major weakness of our transport system, which is the vast and recurring deficit of the railways. Instead, they have not decided to tackle this major problem directly, but intend to interfere with the other side of the industry which has proved to be running itself efficiently, in the hope that by joining the two together the efficiency of the one may offset the difficulties of the other. This is a perfectly feasible thing to do, but I doubt 83 whether it is the right, the best or even the wisest thing to do.

Listening to the noble Lord, Lord Shepherd, opening the debate this afternoon, one felt that possibly these proposals were not quite so alarming as might have been feared. But, of course, he did not mention all that was in the Minister's mind—indeed, he could not do so. She has said that she intends to give to the passenger transport authorities a whole host of different responsibilities, which can have little relevance to the modernisation of British transport.

She has said—and she said this at the Labour Party Conference: I am also going to give them some of the more lucrative opportunities, so I intend to empower them to engage in a whole range of ancillary services—their own vehicle repair shops, refreshment rooms and bookstalls at bus stations, the provision of parcels services. I shall empower them to run taxi services or to enter into agreements with taxi-cab operators to provide a more flexible service than applies now. I shall give them the power to organise ferry services, hovercraft services, hire car services, express bus services, tours and excursions. One wonders how such provisions can really help the transport of the country, or make it more effective and competitive. Indeed, one wonders what is the relevance of tours of these types which are to be given to this authority.

The whole object of this policy, to quote the Minister's own words, was "to give us a Socialist transport policy". The criterion was not that it should be an efficient transport policy, but that it should be a Socialist one. I do not for one minute suggest that those two are not compatible, because they could well be; but they will not be compatible if ideas are to be put forward and placed upon an industry which will have to use them, without the proper detailed consultation that is so necessary to make them really effective.

I beg the Government to consult the whole way along with all those who are going to be affected by this changeover system, for the success of the policy, once it is put into practice, will depend upon the ability of those who run the transport system and whose job it is to make the policy work effectively. And, after all, what we all want is for the transport system to be truly effective and successful. So often, with reorganisations and larger 84 public bodies, one finds that a characteristic of them is that one has more regulations and more curtailments, whereas, as my noble friend Lord Nugent of Guildford said, the real criterion of success is the ability of the management which is put there to implement the new policies. I hope that the Government will do all they can to see that the overall policy and the rearrangements which they desire are workable and acceptable right the way through the structure, and efficient for those who have to use them and work them.

§ LORD INGLEWOOD

My Lords, first I should like, if I may, to add just one sentence to the discussion about whether it is better to sit or to stand in London buses. Whereas most of us would agree that it is best to sit if there is somewhere to sit, it is better to stand in the bus and to be transported to one's destination than to be left standing at the bus stop in the rain, which is too often the lot of Londoners to-day.

We have all listened to many debates on transport, and to those of us who are not specialists it always seems that there is a danger of lapsing far into the world of theory and falling back on technical jargon. We have not been entirely free of that to-day. To the ordinary men and women of this country these debates can so easily seem out of touch with their daily needs; they are not interested in long words like "containerisation". What they want to do is to be able to travel or to send their goods by rail, and they find all too often that the services—and here I should like to except some few honourable and remarkable improvements of which we all know—are increasingly inconvenient, increasingly expensive and, what is most important of all, increasingly unreliable. This is all very unhappy for the future of this country.

In the gracious Speech there are a number of paragraphs about strengthening the economy of this country, and then a little further on there are references to transport which seem utterly irrelevant to me, because all the emphasis is on public control which is something more likely to hinder the present situation than to help.

We all admit that there are great difficulties facing any Minister of Transport 85 in this country, and we should hope and think that modesty and patience were qualities which we should find in any person holding that office. There have already been references to the speech which the Minister of Transport made to her Party Conference, and I think the sentence: No, friends, when it comes to transport planning I have got to be the overall authority is really rather alarming, and it even makes I am an impatient woman a little later on fade into something mild. Surely the decision to centralise the operational control—and that is what she wants to do—which means taking management out of the hands of the several industries concerned and concentrating it in some division of the Ministry of Transport, must be a mistake. However brilliant the civil servants in the division of the Ministry of Transport are, they have not been trained for that particular job.

My Lords, I hope my noble friends do not think that, having criticised the Minister of Transport, I am going to lavish praise on them, because in their day they made some mistakes, too, even if they were small in comparison. For instance, they lived in a state of mind where it seems they thought the most important thing was to be able to travel to and from London, wherever you might live. There are many people in this country and many in Scotland, I think the noble Lord, Lord Hughes, will agree, who do not wish to come to London unless they must do so. One admits our railways were laid out on the basis of the main lines radiating from London—that was something that happened a hundred years ago—yet the late Government was, I submit, too keen to let the cross-country lines be thrown on the scrapheap. That has not made to-day's problems any easier. The problem is not one of ownership. It is not the problem of who owns the railways, who owns the buses and who owns the long-distance transport, which is the Socialist pre-occupation today. The problem surely is: how can we best improve the existing services of all kinds so that we can travel easily between all parts of the country—all parts of England, Scotland and Wales.

I should like to give an example without going into too much detail, and 86 because I know the North-West of England well I shall speak particularly about it. Within the area we have West Cumberland, which is the most difficult industrial area in this country, because it is the most remote, and we also have, in the Lake District, our foremost tourist area. The late Government allowed the East-West railway connecting West Cumberland with the North-East Coast to be pulled up, so that coal has now to be moved by road; and the present Government are intolerably slow in authorising the money to build the necessary replacement road to the East, or, again, to improve the coast road to the South, where, believe it or not, my Lords, there are still places where two vehicles of any size are unable to pass. The Government are generous with words of sympathy about the regions, but really it is no good continually talking about the regions unless some of their problems are clearly seen and solved.

Again, in the case of the North-West of England the senior official of the Ministry of Transport concerned with roads has his office in Newcastle-on-Tyne. The chief officer of British Railways for the area has his office at Preston. This is a very long way away, and since Preston is, in the eyes of the Department of Economic Affairs, in a different region from Newcastle-on-Tyne, I think it is open to question whether those two officials have ever met. The Prime Minister himself was in West Cumberland the other day, and he knows all this, so I will not elaborate it here; but I am sure we can all agree that new industry will not move into any of the development areas, and least of all into West Cumberland, until this question of communications is improved. Communications must be the most important single factor, and without them the rest is just words.

My Lords, it is not difficult to effect some improvements quickly, provided we avoid the temptation of always adding a fifth wheel to the coach in the shape of some new authority, committee or control. First, I should like to look at the railways. Surely the railways must be urged to reverse their present policy and to delegate more responsibility to their regional staff; and to try to staff their 87 regional offices with good men. The noble Lord, Lord Shepherd, referred to local decisions, and I am sure he would agree with me here. There must be better liaison, too, between the railways and the elected local authorities. I do not speak here about the appointed planning councils—they are something different. The elected local authorities, even if they are not responsible for the railways in their areas, are surely the people who know the needs of their counties and ought to be in close touch with the railway regional offices.

Further, the railways could well be in closer touch with their customers, particularly customers in industries which could offer them a lot of traffic. There are many industries in this country which send all their goods by road, thinking that the extra reliability outweighs everything else, when if there were better local loading facilities and some guarantee of delivery it might well be possible for them to put some of their traffic on the railways again. If they could do this, there would be a great saving of extravagant journeys by vehicles, often with "C" licences, carrying, say, one small spare part. Too often the unreliability of the railway services means that it is only by sending some load by road that there is any hope of getting it to its destination, perhaps only 100 miles away from a factory in the Midlands, within several days.

I should also like to see far greater liaison by local authorities with their bus services. It is all too rare in a country town that we see the buses passing the yard in front of the railway station and connecting with the trains. That is very important where there is much holiday traffic and where the passenger services on the local railway lines have either ceased or are likely to cease. I would put in a plea, too, for the strengthening of the T.U.C.C.s and for an increase in their powers. I was sorry last year when a Private Member's Bill which endeavoured to do this came up and was sat on heavily by the Government. If we are going to have the T.U.C.C.s, surely they should have some continuing function instead of just responsibility for hardship when there is a suggestion that the services on some particular line should be terminated.

88 Here I should like to pay a tribute to the Post Office, who have recently introduced mini-bus services carrying both passengers and their mails. I am sorry the noble Lord, Lord Amulree, has gone. Some of us have been pressing for these services, as he has for the Channel Tunnel, and for just about the same number of years. The Post Office did me the honour of asking me to inaugurate one such service only last Monday which is going to run from Penrith into a remote part of the Lake District. I hope that if these mini-buses are going to prove a success, the Government will do what they can to encourage the Post Office to extend their range and to add to their numbers.

The problem of the roads is largely a problem of money, and on finance I hope that the Minister of Transport will try to get away from her extreme policy of "Stop" and "Go". This has characterised the road policy in this country over a number of years but never in so extreme a form as during last year. In my own area there was pressure on county councils to contain their expenditure, if not actually to cut it back; and then, the other day, out of the blue, county councils were told that there was £4 million to spend in the North of England if they could spend it quickly. That is not good administration. Then, but without any consultation, they were told how is was going to be divided among the four counties concerned. One can only suppose it was done on the advice of the Economic Planning Council, which I would submit is not the right body and just encourages their sense of "power without responsibility".

I submit that there is no case for the doctrinaire legislation which the Government have been describing to us. It means ever more centralisation and ever more public control. There is no case for that. On the other hand, there is a very strong case for decentralisation and for employing all administrative means to give greater responsibility "in the regions", if I may use the current jargon. The Government should encourage local authorities to take a much greater interest than they have done to date in the transport problems of their areas.

Finally, my Lords, I am going to make one simple suggestion which will appeal greatly to the ordinary men and women of this country. As it would actually 89 save money and cannot fail to be a spur to efficiency, it must be worth a try. I would suggest that all the senior staff in the Ministry of Transport, including Ministers, and all the senior staff of British Railways, including the Chairman and Board Members, should for three months, which is from now until after Christmas, deny themselves their first-class travel passes and deny themselves, too, the use of their official cars except where there are no train services, and travel as ordinary men and women of this country do, with second-class tickets and without reserved seats. It is arguable, too, whether both Houses of Parliament ought not to be included in this scheme. From such an experiment we should very rapidly see a large number of improvements of the sort that the people of this country are looking for.

§ LORD POPPLEWELL

My Lords, this debate is extremely interesting; but in some respects it can be said to have been conducted in a vacuum in so far as we have in the gracious Speech reference to what the Government intend to do but we have not yet had before us the blue-print of their actual desires. Therefore, we must relate what is in the gracious Speech to the document published in July last year and from that form our own conclusions. The noble Lord, Lord Nugent of Guildford—and I am sorry that for the moment he is not in his place—and the noble Earl, Lord Ferrers, attempted in their speeches considerably to denigrate railway management and the management generally of nationalised undertakings, public undertakings. Lord Nugent of Guildford said—if I noted his words correctly—that it is the general desire of the public to let the public industries get on with their job, free from political interference. The noble Earl, Lord Ferrers, said that it was under the Tories that the deficit was reduced, so far as the Railways Board was concerned. These are two very interesting observations—because it was only through the influence of Tory policy from 1951 that the railway deficit commenced.

My Lords, when transport was run under the auspices of the noble Lord, Lord Hurcomb, the British Transport 90 Commission (a small policy-making body with various executives responsible for the respective undertakings) were able to turn the railways deficit into a profit. In 1947—the only year after the war that the railways ran under private enterprise—there was a deficit of £60 million. But by 1951—only three years after the passing of the 1947 Transport Act—not only did the railways meet all their working expenses, they also met all the interest charges and in three years had produced a profit of £100,000. By 1952, under the wise auspices of the British Transport Commission, as organised under Lord Hurcomb, they produced (after meeting all working expenses and interest charges) a profit of £8 million. By 1953 the operations of the Tory Government in 1951 began to be felt, and that profit was reduced to £4,500,000. The year 1953 was the last profitable year. From that time onwards, the dead hand of the Tory 1951 Administration resulted in a constantly accumulating and increasing, year-by-year deficit. By 1956 they could not meet interest charges at all; they could not even meet working expenses. What a direct contrast to the wise policy of the Herbert Morrison Act of 1947! What a change took place!

My Lords, I am sure that the noble Earl, Lord Ferrers, would not deliberately mislead the House, but if he looks at the figures he will find that inability to meet working expenses and to pay interest charges has caused an accumulated deficit since 1953 of well over £1,000 million. These are staggering figures. But these are the facts—and they are consequent upon the change of policy that became operative at that time.

§ EARL FERRERS

My Lords, I am fascinated by the noble Lord's observations. I am sure that he, equally, would only wish to be fair. I am sure that he would agree that in 1947, or thereabouts, there were only 3 million vehicles on the roads, and that this fact would have some effect on the difference in profitability.

§ LORD POPPLEWELL

My Lords, if the noble Earl will be patient, I will deal fully with that aspect of the transport situation. But it now appears that the noble Earl is accepting the position that the figures he gave, the picture he painted, was inadvertently wrong.

§ EARL FERRERS

My Lords, with the greatest respect, I accept no such thing, and did not intend to do so.

§ LORD POPPLEWELL

My Lords, if the noble Earl looks again—he is a man of honour—I feel sure that he will be prepared to come to this House and say that he was wrong. Let him look at the Reports of the Railways Board, the British Transport Commission, through the years. He will find that by 1965 the capital liabilities of the Railways Board to the Ministry of Transport, including interest, was some £872 million. The suspended debt account (carrying no interest at all until the Minister so directs) was no less than £705 million. These are absolutely staggering figures; but they indicate what has taken place through Tory Government interference. I appreciate the point that has been made: that there should not be so much Government interference. It is that type of Government interference that I believe has brought about this deplorable position.

The story of the Railways Board finances is a fantastic one. We have two chairmen of the Railways Board in the House; and they have had to deal with this problem. Under a Tory Administration, Parliament has had to pass successive Acts, transitional borrowing powers Acts, authorising the British Railways Board to go on to the open market to borrow money at 6½ per cent. or at whatever rate they could get it in order to pay interest on money borrowed previously at 4½ per cent. This is Alice in Wonderland finances; and it is all brought about directly through the policy adopted by the Tories in 1951 and accentuated by the 1962 Act. During this period the function of the British Transport Commission was changed from policy-making into operationally controlling the railways side; while, at the same time they had those other organisations below them. This in my opinion was a very retrograde step, to say the least. The noble Lord, Lord Robertson of Oakridge—Sir Brian Robertson as he was at that time—must have had an extremely difficult task when he tried to run the British Transport Commission and its undertakings, and at the same time assume responsibility for the Railways Board; and all the time he was receiving constantly negative directions from the Government. It is this picture of Government interference which 92 is so real, and it was brought about when the Conservatives were in power.

Let us look at some of the things that happened. We all know that at that time Sir Brian Robertson's plan for the railways was for the electrification of all the main lines and the dieselisation of certain branch lines. That plan was scrapped. Those of us who took an interest in these things know of the tremendous fight to get the first stage of electrification, from Manchester to Crewe. We know that the then Minister of Transport, the much-vaunted "Ernie" Marples, stopped electrification from continuing down to London. What had been achieved was allowed to lay waste for five years before the development was continued to London.

We know that the general desire at that time was to electrify the East Coast route, from King's Cross to Newcastle and Leeds. We know the expenditure in which the Railways Board were involved, in the heightening of bridges to accommodate the overhead electric cables. Then the dead hand of Government put a stop to these things. Now everyone is praising the service provided on the electrified line from Manchester to London. That is something which ought to have happened years ago, when railway-minded people wanted to do it. But in the sacred interest of oil and the oil companies it was decided to go on to dieselisation.

These are things which we should bring to light, particularly in view of what the noble Lord, Lord Nugent of Guildford said: that this is an interesting experiment in the history of a nationalised industry. Here I share the views of the noble Lord completely. But when the history comes to be written it should pinpoint how the Government of the day, in those early stages, used every possible action to prevent publicly owned undertakings, particularly transport, from paying. We have only to look at the hiving off which constantly occurred; the closing down of the railway workshops, and the prohibition which prevented the railways from producing their own motive power unit, something which private enterprise railway management had to do in the early days because of the inefficiency of the product available at that time. We all know about the dieselisation which is taking place on the railways, and about 93 the number of breakdowns of diesel locomotives and units, which is phenomenal. I suggest that had the Railways Board been allowed to undertake the necessary capital expenditure involved in re-tooling to produce its own motive power unit, the number of breakdowns would not have been anything like so great.

In the main, these things have been brought about since the advent of the noble Lord, Lord Beeching (Dr. Beeching as he then was), as Chairman of the Railways Board, and with Mr. Marples as Minister of Transport. It is to the everlasting credit of the noble Lord, Lord Robertson of Oakridge, that he resigned sooner than carry out the policy which was advocated because he knew it would be the ruination of a truly co-ordinated and efficient transport system as he saw it. That is the only interpretation which I can place on his resignation. Under the "Tory/Beeching line" what happened? We had the new philosophy of the city service being the determining factor and the hiving off to road transport of all the freight traffic possible. The noble Earl, Lord Ferrers, referred to a desire to return much of that traffic from the road to the rail, but the noble Earl must not forget the years in the past when traffic was deliberately turned from the rail to the road for the benefit of road haulage interests. These are the facts of life as we see them.

Now there is a claim for the efficiency of liner-trains as though they were something new. My Lords, liner-trains were well known before, though in a different form. They are just the modern development of the old special trains—the potato specials, the rhubarb specials, the tomato, mushroom and strawberry specials and the fish specials, which ran from one end of the country to the other, conveying produce to the markets. This happened even in pre-war years. I know that a certain union has been condemned because it wanted N.U.R. men to man the liner-trains. In view of the number of reductions in manpower in the railway service it is understandable that railway-men should not be prepared to stand by and see work which they have been doing for decade after decade—ever since railways became a service or an industry—taken over by people who had never worked on the railways before. This was not a question of vanishing traffic