Railway and Canal Agreements.

CIVIL SERVICES ESTIMATES AND SUPPLEMENTARY ESTIMATES, 1921–1922. [Progress.] – in the House of Commons on 23rd June 1921.

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Motion made, and Question proposed, That a sum, not exceeding £21,220,000 (including a Supplementary sum of £9,000,000), be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1922, to meet Expenditure arising from the Government Control of Railways and Canals in Great Britain and Ireland under the Regulation of the Forces Act, 1871, Section 16, and Defence of the Realm (Consolidation) Regulations, 9 H."— [Note.—£18,000,000 has been voted on account.]

Photo of Mr Arthur Neal Mr Arthur Neal , Sheffield, Hillsborough

I think the Committee will require some explanation why we are compelled to introduce this Supplementary Vote. This Vote is one relating to the Railway Agreements, and the sum now asked to be voted is £21,220,000. It is made up as follows: as to a sum of £12,000,000, the balance of the original Vote, and as to the remainder, £9,000,000, a Supplementary Estimate. The original Vote on Railway Agreements was for £30,000,000. In the Vote now under discussion there are items in respect of the Government pool of railway rolling stock which nearly balance at £1,000,000 and £780,000. Unless hon. Members desire some explanation of these items, I do not propose to spend any time on them. The reason why we have to come to the Committee to-night for this Vote may be summed up in one phrase, it is entirely owing to the coal dispute. As every hon. Member is aware, under the Agreement investigated by the Colwyn Committee, the Government are pledged to make to the railway companies a certain payment during the period of control. That period will happily end on the 14th August next, although but for the Ministry of Transport Act there would still be more than two years to elapse. The Agreements secured to the railways their revenue for the year 1913, the highest year the railways have known, and incidentally it has saved the shareholders from any loss in the matter of dividends throughout the whole period, and last year there was paid in dividends on the railways a larger sum by about £1,000,000 than had been paid in the boom year 1913.

I would like to make quite clear to the Committee at once that the sums which we are paying to the railway companies in monthly amounts are in no sense comparable with the actual working figures of the railways during a normal period. The sums which we are asking the Committee to vote, and which we are under contract and obligation to the railway companies to pay, are not the sums which arise from the ordinary working of the railways. They secure to the railways their net revenue for 1913, the revenue of a boom year being paid to the railways in a year of unparalleled depression and trouble, industrial and otherwise. They include items for maintenance of the railway companies' plant and undertakings, which is being undertaken on a generous scale, done at high cost during a period of slackness and depression when no business would have undertaken it in the ordinary course. It also includes items for overtaking arrears of maintenance; it covers the loss which is arising from trade depression, and it covers the loss which is arising from the disastrous dispute in the coal trade. I want to make this matter quite clear from this point of view, that no one can draw any inference at all as to the future of the railways from the figures which we are compelled under these agreements to bring to the notice of the Committee.

As to the actual figures, in the original Estimate we asked for a sum of £30,000,000 on the railway and canal agreements. As to the canal agreement, there are only a few balancing sums of insignificant amount to come into the account, so I propose to direct my attention entirely to the sums to be paid to the railway companies. We asked for a Vote of £30,000,000. The House voted to us a sum of £18,000,000 on account. We have already had to disburse up to the end of April in respect of the railway agreements, in round figures, £12,500,000. We have only, therefore, on the Vote on Account some £5,500,000 in hand, but the accounts for May, which fall due for payment this month, are estimated at £9,000,000, so that without coming to the. House now for the further Vote we should be unable to meet the Government's obligations up to the end of May. It is estimated that in this further period of control, June, July, and up to the 14th August, claims may be made that the Government is under contract to admit of £18,500,000, and that may be increased. These figures were made out on the basis and the hope, which has not been realised, that the dispute in the coal trade might have come to an end last Friday, the 18th June, under the ballots which were then taken. Whether this figure for which we are now asking is adequate or not depends very largely upon the period by which there is a prolongation or this unhappy dispute, and, therefore, we are compelled to ask the Committee to give us this sum of money in order that we may meet our obligations.

I should like to give the Committee some information as to the effect of trade depression, followed by the coal dispute, upon railway revenue and railway traffic. In the month of March last, compared with the month of March, 1920, there was a decline in goods tonnage carried upon the railways of 27 per cent. That was a figure indicating the extent of trade depression as between those two months. As every hon. Member knows, the coal dispute became operative at the beginning of April, and in the month of April the goods tonnage carried upon the railways, in round figures, was 9,500,000 tons, compared with 27,300,000 tons in the corresponding month of the previous year. In other words, in the first month of the coal dispute there was a loss of traffic in goods of 65.3 per cent. The coal decrease itself was £13,700,000. The actual haulage of coal in the month of April, compared with the corresponding month of the previous year, fell by 89 per cent., but that was not the only traffic that was affected. Ironstone traffic fell by 88 per cent., iron and steel traffic fell by 68 per cent., and pig iron traffic fell by 70 per cent. These figures are instructive, not only as showing the reason for this Vote, but giving, I think, to the country in a simple and striking form the paralysing effect of this great dispute which is now in its twelfth week, and I feel sure that I carry the feelings of every hon. Member with me when I express the sincere hope that it may not be long before that struggle comes to an end. Passenger traffic figures I will not trouble the Committee with, but they also show a very substantial reduction.

I do not want anyone to be confused by the fact that I have used the figure of £30,000,000 as being in our Vote. It has no relationship whatever to a further figure of £30,000,000 which will come in course of payment during this financial year if and when the arrangement made by the Government for the liquidation of the post-control liabilities becomes operative. In the Railways Bill now before Standing Committee, there is a sum of £30,000,000 to be paid this year, half of the total of £60,000,000 to be paid in the settlement with the railway companies. When Parliament has sanctioned that sum it will be necessary to come to the Committee again and ask for a Vote in respect of that £30,000,000, a further Supplementary Estimate, which I think hon. Members will realise could not possibly take form until Parliamentary sanction in respect of that settlement has been received.

Photo of Captain William Benn Captain William Benn , Leith

We are quite used to Supplementary Estimates.

Photo of Mr Arthur Neal Mr Arthur Neal , Sheffield, Hillsborough

Also I am sure the hon. and gallant Member knows that some of them are abundantly justified.

Photo of Mr Arthur Neal Mr Arthur Neal , Sheffield, Hillsborough

This one is, and that is the only one I am concerned with. The reason I have mentioned this figure now is two-fold. First, to prevent there being any confusion between the similarity of the two figures, and, secondly, because when we do come to the further Supplementary Estimate we shall be enabled to present, as we hope, the final figures which will have resulted from this depression in trade and from the coal dispute, and this sum of £30,000,000 may be decreased or increased slightly according as the accounts turn out. I hope I have given sufficient explanation to the Committee why we have been compelled to introduce this Vote.

Major BARNES:

It will be a matter of encouragement to the Committee that a spirit of discrimination is visible even on the Front Treasury Bench in discussing the justifiability of the various Supplementary Estimates. Perhaps when that spirit has found time to spread amongst the higher posts of the Government, it may lead to a reconsideration of some proposal at present, or even to their withdrawal. There is, to anyone unfamiliar to Parliamentary ways, a contrast between this Committee with this subject involving the expenditure on Supplementary Estimates of at least £9,000,000, its sparsely-peopled Benches, and the crowded and animated scene upon which we looked a few hours ago when the passionate and intense enthusiasm for economy (so recently appearing) among the supporters of the Government, found in the salary of the Minister of Health a chance to save the enormous sum of £2,000! When one realises how intense was the earnestness on that point of economy, it is remarkable that so little interest should be shown in the expenditure of the vast sum which we are now asked to Vote. That comment, I think, it is probable the public, equally with myself, will make.

In this case the Ministers concerned with the presentation of these Estimates are to some extent relieved of the responsibility which normally attaches to Ministers. I want to say frankly, what I think I have already said in the House, that I regard the work of the Ministry of Transport as of great advantage to the country. The feelings with which I re- garded the Minister of Transport when I first entered this House, I must say, were entirely different to the feelings with which I regard him now, for I have become convinced that, within the limits of his power, he has done well. I hope my eulogium is not proving distasteful to the right hon. Baronet for the City of London (Sir F. Banbury), whom I see leaving the Committee. I know that his views on this subject are very different to mine. Even so I regard the work which, in the main, the Minister has done upon the subject of these railway agreements, as being to the advantage of this House and the country. Agreements have been made with the railway companies, agreements of an extraordinary character, and the House is only beginning to perceive how extraordinary are these agreements when Members are faced with the Vote that we now have before us. This particular body of people are being relieved entirely of the strokes of misfortune which bad trade and the coal stoppage has laid on the shoulders of other industries. They have got in these railway agreements, perfect shelter, bomb-proof, trade-proof, misfortune-proof under which they are sheltered from any possible disadvantages that adverse circumstances in trade bring upon the rest of the community.

Photo of Mr James Seddon Mr James Seddon , Stoke-on-Trent Hanley

But the companies did not share in the War profits?

Major BARNES:

My hon. Friend opposite is putting the other side of the case. He says that the railway companies had no plunder in the War. That is perfectly true. The railway companies were not able to take advantage of the circumstances of the War in a way in which, according to the statement made by the Prime Minister this afternoon, a great many other people were. That is quite true. No costings department had to be brought into existence and applied to them to bring their rates and charges down to what was reasonable and fair. On the other hand, there were a great many people in the country who were not able either to take advantage of the War, but who on the other hand were not preserved from the disadvantages of the War. So that in that respect these railway agreements have given the railway shareholders an extraordinarily advantageous position—how great we are only beginning to see.

I do not propose now to go into the question of these railway agreements, for they have been fairly well thrashed out. Their history and in degree the responsibility for them has already been before the House. Having said what I have said with regard to the Minister of Transport a few moments ago, I am not sure, so far as this Supplementary Vote is concerned, that he is entirely free from all blame. It may be so. I hope it is so. But this Vote is the result of the action of the Government of which the Minister is a Member. This £9,000,000 is the outcome of the coal stoppage. It is the burden which has fallen upon the Government and the country because of circumstances connected with the decontrol, of the mines. The point I want to make, and the question I want to put, is this: The Cabinet were considering the question of the decontrol of the mines, and they were balancing on the one hand the saving expected. So far as my recollection goes, when they came before the House with the Measure for decontrol, it was strongly resisted from this side of the House, and the very strongest appeals were made to the Government to defer their action. The Bill was pushed through in the middle of the night. At that time, if I remember rightly, we were told—I am not sure it was not by the Prime Minister—that there was in question a burden of £1,000,000 per week on the taxpayer. From this side estimates were put forward as to the amount of breathing time that should be allowed to effect a settlement. I think six weeks were asked for, and then a month. Six weeks would have cost £6,000,000 and a month £4,000,000, and if the whole period of the present coal stoppage had been taken that would have cost £12,000,000. If they had maintained coal control, although it was a bad bargain, and assuming that up to the period of decontrol a settlement had not been effected, then the amount would have been something like £20,000,000. The Minister must bear his responsibility in respect of the action taken by the Government. When balancing gains and losses I suppose the Minister of Transport advised the Government as to the bearing of their action upon the coal agreements. That is his real responsibility. He knew what the agreements were and what we were likely to be liable for under them. Under the construction of those agreements which the Government accepted the country was going to be liable for all the trade depression which must follow a great coal stoppage. We have seen the result in these Supplementary Estimates, the figure of £9,000,000 is what we are asked for, and that is almost entirely due to the coal stoppage.

10.0 P. M

Major BARNES:

The Minister of Transport is facing this matter with his usual courage. There is £9,000,000 here for a period of nine weeks. I think it was the business of the Government, when they were balancing gains and losses, to take into account all the circumstances, and if they were looking at it from the money point of view and the cost to the taxpayer, it was a most material thing that they should take into consideration what would arise under these railway agreements. We know what has arisen. I think a great many people will be inclined to ask what it was in the minds of the Government that made such a difference in their treatment of coal control and railway control. What were the circumstances? What made them, on the one hand, in such haste to abandon control, with its consequent result, and, on the other hand, what has made them cling to railway control, with the burden which arises in consequence? That is probably not a matter on which we can ask the Minister of Transport to speak, and it is more a matter for the Prime Minister. We are certainly entitled to ask why the Government did not get rid of coal control and railway control at the same time, and I think that is a fair comment. That is not based upon matters for which the Minister of Transport is responsible, but upon a situation in the responsibility for which he must take his proper share. The Parliamentary Secretary has endeavoured, very rightly and properly, to make clear to the House that what we are dealing with here has nothing to do with the sum that the House will be asked to vote in regard to the Railways Bill. What we are dealing with now is the burden on the taxpayer on account of the running of the agreement. On the date on which they terminate there is to be a fixed sum paid under the Railways Bill in settlement of all claims. That is a position which the Minister accepts, although it is not entirely accepted by some representatives of the railway companies. It cannot be too often repeated, and it should be made clear, that when we come to pay that £60,000,000 we get rid of every liability arising out of the acts of the Government in connection with the railways. It is only because I understand that to be so that I am giving any support to that proposal. I understand that this is not the end of it. We have been told by the Parliamentary Secretary that this £9,000,000 is only an estimate for six weeks.

Photo of Mr Arthur Neal Mr Arthur Neal , Sheffield, Hillsborough

I said it was framed in the hope that the coal stoppage would have ended last Friday.

Major BARNES:

At all events this sum is for a period which has already passed, and we are now into a fresh period and fresh liabilities are accumulating and we must be faced very shortly, in the event of the coal stoppage not being concluded shortly with further Supplementary Estimates. This is a small House, but this question seems to me to have a most important bearing upon the continuance of the coal stoppage. When we take into account the obdurate and adamant refusal at the time they were decontrolling coal to accept any other settlement, when we see that we are suffering a loss of £9,000,000, and that the Government did make an offer of £10,000,000 although they have withdrawn it, we do see that apart from the withdrawal of that offer there would have been a sum of over £20,000,000 involved. This seems to be just one of those examples which are becoming so frequent in this House, and which are coming so conspicuously before the notice of the public, of steps taken by the Government which have resulted in extraordinary financial loss to the country.

Very shortly we shall be asked to repeal a portion of the Agriculture Act which is going to cost millions of ponds, and that is another example of the same kind. These are not Estimates which call for criticism in any very great detail, because they are not very small sums. There are no questions of the salaries of typists or the wages of charwomen, but we are really on to the big things, and we are dealing with a situation which is going to cost us big sums. I give the Minister of Transport the credit of having a desire to settle this question and bring it to an end. The right hon. Gentleman is like the bird in the hall in the old fable. He has flown in at one end and will shortly pass out at the other. I know there are birds and birds, and, at all events, the advantage of some birds are that they are more easy to shoot than others. I do not say that this applies in his case, but I am quite sure that, as far as the Minister himself is concerned, he would be very glad before he leaves his office to see the whole of this situation cleared up, and I would ask him, as far as he has any weight with the Government—[Laughter]—I am much obliged to the Committee for bringing out the points of my speech better than I am able to do. But, leaving out that dangerous word, let me ask the Minister to do what I am sure he will do, to use all the influence he has with the Government to put an end to the situation which is creating this expenditure. On one small point of detail, I would like to ask the Minister what part of this Supplementary Estimate arises out of his relationship with the canals all over the country?

Photo of Sir Eric Geddes Sir Eric Geddes , Cambridge

£50,000. We are merely closing up the old accounts. There is no accruing liability.

Major BARNES:

One is glad to hear that. One generally expects everything to show nothing but a loss. The only question is, how much the loss will be. It is not the fact that there is a loss that surprises us. What gratifies us is that the loss should be less than we expected. I would like to know what is the position in regard to the canals. Does the Minister propose to retain them under his administration?

Photo of Sir Eric Geddes Sir Eric Geddes , Cambridge

They are not under it now. They are decontrolled.

Major BARNES:

That removes them from the possible sphere of loss.

Photo of Sir Eric Geddes Sir Eric Geddes , Cambridge

It removes them from the sphere of Estimates.

Major BARNES:

That is the same thing. The House is in a very good mood, but I think it would be a misfortune if the general good temper of the House was to minimise the seriousness of the position now before us. After all, we are here as custodians of the public purse, and we are at the present moment faced with a loss of £9,000,000 arising out of a situation over some of the causes of which the Ministry has had no control, but for the main causes of which the Government are largely responsible. I hope the Minister will tell us something that will alleviate the gloom of the situation.

Photo of Mr Robert Richardson Mr Robert Richardson , Houghton-le-Spring

May I thank the Parliamentary Secretary to the Ministry of Transport for his frankness. He has been quite frank in saying that it is the coal stoppage which has largely caused the loss on the railways. Had the Government of which my right hon. Friend and the Parliamentary Secretary are members acted as they ought to have done none of this loss would have accrued. I remember two or three years ago that the Government, in trying to settle a dispute between the miners and the mine-owners, undertook to set up a Commission to enquire into the whole circumstances of the coal trade, and they appointed probably one of the ablest men of this country, Mr. Justice Sankey, as head of that Commission, and that Commission condemned the whole position in the coal trade and said it could not be defended. So far as the miners are concerned, they had no part in the setting up of that Commission, but they accepted it in good faith as a settlement of all disputes between coalowners and coalminers. The Government in their wisdom or their folly turned down every particle of that report with one exception, that they agreed that the minerals should be nationalised. Some of us miners sitting on these Benches are still waiting for some move in that direction. After all, we feel that if that were done some saving might be made.

Subsequently, when the Government determined to decontrol the mines, from these Benches Member after Member rose in his place and pointed out to the Government the extreme danger they were running, and that the expenditure was likely to be very much enhanced as compared with what it would cost to keep control going until 31st August. To-day we have a vindication of what he said at that time. But from the Benches opposite the only answer that we got to the plea we put forward was, "I beg to move that the Question be now put." That con- tinued during the whole of that remarkable night. It is some satisfaction, after all, but it is an ironical satisfaction, to the miners on these Benches when they see that what they warned the Government against has happened. We say that the blame for the whole of this extraordinary expenditure thrown upon this country must rest on the shoulders of the present Government. It is their action that has caused it. We are more than anxious to get this country back to stability. We have no desire to starve our wives and children, nor have we any desire to make this country a bankrupt nation. Everyone of us loves his country only too well. All that we plead for as miners is simple justice. I now take the figures the Minister of Transport has placed before us, asking us to pay million after million to people who have little or no claim to the millions they are going to get. Had the railways been in the hands of the shareholders and this stoppage occurred there would have been no millions given. It is a bad contract, and one has to excuse the present Minister, because he was not, I believe, in office when these contracts were made between the Government and the railway shareholders. These people get everything they require, and the miners must work to bring back stability for a wage that will not feed and clothe their wives and children. That is what we are asked to do to bring back stability, and yet money is poured out like water to other people who can afford to do without Coming to the railways themselves, I remember a discussion in this House when the Minister was introducing his first Bill. Terrible opposition was coming from the railway shareholders on the Benches opposite, and the Minister made this remark, "It is either this Bill or nationalisation." I believe in his heart of hearts he thought the second course the better one. We are paying it to the people who have during the War made many millions while the miners of the country are at the same time being asked to accept cuts in wages which will bring them down below the level of 1914—a condition which the Prime Minister himself declared to be unthinkable. We are to go back to that while these millions are to be handed over to people who have already made a rich harvest. I do not desire to stand between this House and a Division, but I feel the position acutely. If the Government would have taken its courage into both hands and given the miners what they asked for when we were pleading on their behalf much suffering might have been avoided. If the claims we put forward on behalf of the miners had been conceded we should have got the wheels going.

Photo of Mr John Whitley Mr John Whitley , Halifax

I am afraid we cannot go into the merits of the coal dispute. The hon. Member is quite in order in arguing that decontrol has produced certain effects, but he is not entitled to go into the merits of the dispute itself.

Photo of Mr Robert Richardson Mr Robert Richardson , Houghton-le-Spring

I am sorry. I knew I was in error, but one feels this matter very intensely and is all the more likely to make a mistake when, as in my case, one goes home every week and witnesses the privations which the people are suffering—privations which might have been avoided if the Government had only acted on our suggestion. But they turned it down more than once. We are not seeking strife, we are only asking for simple justice. The Government set up a Commission and we understood that its findings would be accepted by the Government. We on our part were prepared to accept them. We were determined, as far as was in our power, to bring peace to our industry with a view to helping this country to arrive at better and more prosperous times. I trust that the Minister for Transport will convey to his colleagues in the Government what has been said by the hon. Member for Newcastle (Major Barnes) and what will probably be said later on by other hon. Members of this House. Let them not pay so much attention to Members below the Gangway who are prepared to cut down ruthlessly every branch of Government expenditure except where the country can best afford to do without it. Let the Government see that justice is done to the worker who is, after all, the greatest asset of this country. Industry must be kept going and the people who toil in it must have the wherewithal to live. They must not be kept down to the line of poverty. Let the Government do what they can to bring to an end this terrible dispute, and at the same time give justice to the people employed in the industry.

Photo of Mr Godfrey Collins Mr Godfrey Collins , Greenock

I beg to move that the Vote be reduced by £5,000.

As I understand it the Government, in asking for this Vote, have based the amount on the assumption that the coal dispute was coming to an end on the 18th June. Therefore it is clear that the Vote asked for this evening may have to be supplemented in the immediate future. There has been already one Estimate for this. We are now considering a second Estimate. The Parliamentary Secretary agrees there will be another. All this shows that in this, as in other matters, the Government have taken too optimistic a view of the situation, and that they are forced by events to come at a later stage and ask for further sums of money. A sum of £39,000,000 is to be paid to the railway companies in respect of the control period, and a further £30,000,000 under the agreement which the Ministry of Transport has carried through with the railway companies. That is a total, this year, of £69,000,000 already, and there is a further liability of £30,000,000 for the, coming year. That is the story of Government control over railway finance in the short period of 12 months. The taxpayer is required to find the sum of £99,000,000, excluding further Supplementary Estimates, for Government control over the railway companies of this country.

The mere mention of that figure shows the appalling losses in which Government control has landed the country. I do not desire to lay any blame on the Ministry of Transport for that result. I join rather with my hon. and gallant Friend (Major Barnes) in congratulating the Minister on his handling of this matter, especially during the last six months. I have had the opportunity of saying that before in the House, and the reduction I have moved is based, not on the attitude of the Minister in regard to railway control, but on the causes which force the Government now to come to the Committee for a further £9,000,000 of the taxpayers' money. I think that before voting this, the Committee is entitled to ask the Minister what economies he is asking the railway companies to adopt during this period. The taxpayer is being forced to find the money; are the railway companies being asked to economise? We are entitled to ask what definite steps the Ministry of Transport is taking to safeguard as far as possible the interests of the taxpayer in connection with this Supplementary Estimate. If the railway expenditure is reduced throughout the country, either by the stoppage of works or by allowing expenditure to stand over to a more fortunate period, the burden on the taxpayer through the passage of this Supplementary Estimate will not be so high, and therefore the Committee is entitled to ask what definite steps the Ministry of Transport is taking, faced as it is with this appalling loss, not caused by any administrative act or any policy of the Ministry of Transport, but by the Government policy which has landed the country in this coal stoppage. The Parliamentary Secretary told the Committee frankly that this sum was entirely due, if I understood his words correctly, to the coal dispute.

Photo of Mr Arthur Neal Mr Arthur Neal , Sheffield, Hillsborough

The coal dispute and the trade depression. You cannot separate the two and say how much is due to the one and how much to the other.

Photo of Mr Godfrey Collins Mr Godfrey Collins , Greenock

I agree that it is impossible to attribute any particular percentage to the coal dispute, but the larger proportion is due to that cause. Therefore, we are making use of the Parliamentary opportunity which the Government have given of moving a reduction of this Vote, as a protest against the mishandling of the coal stoppage during the last eleven weeks. The coal stoppage continues, and here I echo the sentiments, with which I entirely agree, expressed by the Parliamentary Secretary in moving the Vote, when he said that he was sure every Member of the Committee would join with him in the hope that this stoppage would cease in the immediate future. We are entitled to ask the Government what steps they are going to take 'to bring this stoppage to an end. Have they any further constructive suggestions to put before the coal trade? Here are these 1,000,000 men out of work, the Government having raised a defence force costing a large sum of money, and there being more trouble amongst the reservists than amongst the three or four millions out of work.

Photo of Mr John Whitley Mr John Whitley , Halifax

I really do not think this is in order. It is an indirect issue, but it has no direct reference.

Photo of Mr Godfrey Collins Mr Godfrey Collins , Greenock

Can the Committee address itself to any constructive sugges- tions to bring this disastrous situation to an end? This day week, to solve some trouble in the Far East, the Government offered subsidies to certain Arab tribes. It has been well said that the copious outpouring of public money often enables Governments to avoid awkward situations. The Government have offered £10,000,000 to avoid a sharp break—

Photo of Mr John Whitley Mr John Whitley , Halifax

The stoppage in the coal trade may be, no doubt, one of the causes why this sum is asked for, but it would be an intolerable extension if every possible remedy for that could be suggested. If the hon. Gentleman develops that argument, there will be replies from the Government and the coal-owners, and the whole question of the railway agreement would be completely lost.

Photo of Mr Jeremiah MacVeagh Mr Jeremiah MacVeagh , Down South

I submit that inasmuch as the Minister has made it clear that the bulk of this £1,000,000 a week is directly due to the coal strike and that we are continuing to pay it as a consequence of the coal strike, is it not in order to urge the Government to take such steps as will bring this payment to an end?

Photo of Mr John Whitley Mr John Whitley , Halifax

No, I think not. It would be an undue extension of the Debate. It is quite in order to argue that the Government were in default in allowing the coal control to cease, but there will really be no end to the ramifications of the discussion if the merits of the present coal stoppage and possible remedies for it were to be discussed.

Photo of Captain William Benn Captain William Benn , Leith

We heard from the Minister, not only that this sum is required as a consequence of the coal stoppage, but that the Government would present other Supplementary Estimates as a consequence of the stoppage. Do you rule that we cannot suggest means of rooting out the sources of these Supplementary Estimates?

Photo of Mr John Whitley Mr John Whitley , Halifax

Yes, I do so rule.

Photo of Mr Godfrey Collins Mr Godfrey Collins , Greenock

I understand you limit the discussion to only an indirect reference. As a protest, therefore, against the handling of the situation I move to reduce the Vote by £5,000, and I will ask the Government to explain what the future loss will be if the coal stoppage continues. Each week, I have no doubt, the loss on the railways is increasing. As the depression deepens and works are shut down the losses on the railways will increase week by week. Therefore, I hope we shall have some statement from the Minister of Transport advising the country as to what the future loss will be, week by week, if the stoppage continues.

Photo of Captain William Benn Captain William Benn , Leith

The figures that have been read out from the Chair do not appear to have been the figures in the Supplementary Estimate, which amounts to £39,000,000.

Photo of Mr John Whitley Mr John Whitley , Halifax

The figures read out are made up by the original Estimate of £30,220,000, less the sum voted under the Vote on Account, and the £9,000,000 additional that is now required. My attention was called to that, and I satisfied myself on the point.

Photo of Mr Thomas Myers Mr Thomas Myers , Spen Valley

I beg to support the Amendment, and I express my satisfaction as to the observation made by the Minister in respect to canals, in so far as his Department is concerned with them now, that they are no longer a liability upon the State.

Photo of Sir Eric Geddes Sir Eric Geddes , Cambridge

I said that no further liability is now accruing.

Photo of Mr Thomas Myers Mr Thomas Myers , Spen Valley

It is desirable that we should inquire what steps the Minister has taken with respect to the working of the canals in future. It is a notorious fact that the canals have been very largely neglected for a large number of years, and advantages that could have been derived from them for the benefit of the community have not been forthcoming. That is due to the fact that many of the canals came under the control of various railway companies, but not for the purpose of being used by the railway companies. On the contrary, the railway companies put the canals out of action—

Photo of Mr John Whitley Mr John Whitley , Halifax

I am afraid this is out of order. There is a sum of £50,000 in these Estimates for canals, but the whole question of canal policy cannot arise on the Supplementary Estimate.

Photo of Mr Thomas Myers Mr Thomas Myers , Spen Valley

Specific mention has been made of canals in the Estimate, and I thought I should be in order in inquiring if the Minister has taken steps to ensure their more satisfactory use in the future. We have been informed that the Supplementary Estimate is made necessary very largely on account of the extra losses incurred upon the railways, in consequence of the coal dispute. I desire to emphasise the inquiry made by the hon. Member who has just spoken as to what the Government are doing to cut their losses in this direction. If they cannot see any possibility, are they making any attempt to cut any of these losses? It is very significant that after the decision which was taken last Saturday nothing has been said or done in this House with respect to the dispute, although we are told that the dispute is causing tremendous loss to the railways, which has to be made up by the country. There are too many evidences of callous disregard of the situation which is prevailing, and we may be pardoned if we think there is a feeling on the part of the Government that a few days or a few weeks' starvation may have the necessary effect, which might not be produced by other steps.

The decontrol of the railways and the coal mines when compared show that the Government took the wrong turning. Up to the end of March this years the railways were a liability on the State. There was no liability for the coal mines. At the end of last December there was a surplus of £20,000,000 in the Exchequer on the coal mines account, and any loss incurred during the first three months of this year was met from the surplus, so that there was no liability before the coal dispute took place. The railways had been a liability on the State for the whole year, and if it was desirable to decontrol the coal trade which had been no liability on the State at the end of March, it was equally desirable to decontrol the railways which were a liability. But the Government took the wrong turning.

I do not agree with the suggestion that the responsibility which we have to meet in respect to the railway is due entirely to the coal dispute. It has been due to what is termed an agreement made with the railway companies, but what I would rather call a series of loose understandings. These understandings put on the State a responsibility to the extent of £47,000,000 a year. That has been paid to the railway companies ever since the outbreak of the War and will continue to be paid up to a certain date in August. The Parliamentary Secretary is introducing legislation, when reciting the heads under which these sums had to be paid, referred to a controversy as to the maintenance of the railway system. On the Second Reading of the Railway Bill the hon. Member for Dudley (Mr. J. Wilson) who has been an official of the Railway-men's Union, stated that the condition of the railways at this moment is as good as, if not better, than when they were taken over in 1914, and neither the Minister nor any hon. Member interested in the railways denied that statement. It is notorious that the railway companies, being assured of their net revenue, whatever their income or expenditure, have been improving their property at the public expense out of the takings of the booking office and the receipts for goods traffic which the railway companies handle by improving their permanent way, building new stations, adding extra rolling stock, all the while -being sure of their £47,000,000.

Photo of Sir Eric Geddes Sir Eric Geddes , Cambridge

I am sure that my hon. Friend does not wish to mislead the Committee. The railways, as a whole, have not done what he said. It is my business and the business of my office, as far as possible, to see that they do not. Wherever they do, as far as we can detect them, the expense is challenged, and I have to date, in this Financial Year, stopped an expenditure of £1,000,000 which is in dispute.

Photo of Mr Thomas Myers Mr Thomas Myers , Spen Valley

I agree that the right hon. Gentleman and his Department have endeavoured to exercise such oversight of railway expenditure as they were able to exercise, but notwithstanding that supervision it is well known that a large volume of work has been done on the railway systems at the expense of the taxpayers. If there is one thing more than another that it is almost impossible to defend it is the teeming out of these millions from the public exchequer into the coffers of the railway companies. If any undertakings have made a good deal with the Government, the railway companies have done so. Here and now, in a time of trade depression that began long before the miners' dispute, we continue to hand out millions of the taxpayers' money. We are told that £30,000,000 is to be paid this year and £30,000,000 next year for arrears of maintenance, for abnormal wear and tear, and for renewal of rolling stock, and the experts on our side of the House, the judges of what the railwways are, tell us that, despite the fact that this £60,000,000 is to be paid, the railways are in a better condition to-day than they were in 1914. We are entitled to express the opinion that if railway interests had been less powerful in this House than they are, a different policy would have been pursued.

Photo of Mr Thomas Cape Mr Thomas Cape , Workington

Every hon. Member must have been grateful to the Parliamentary Secretary for the frank way in which he submitted this Estimate to the House. Seeing that no industry is so vital to the country as the coal industry, which was decontrolled so rapidly and with so little consideration, one cannot help wondering why, when the decontrol of the railways is discussed, such minute consideration is given to making provision for the finances of the railways. The Government has discriminated very widely between the most vital industry and the most vital means of transport in the country. They cut off the mining industry entirely, and the cry from the benches on the other side was that no subsidy of any kind should be paid to any industry. The Minister in charge of the Mines Department told us the coal industry must stand on its own feet and do the best it could. When we came to consider the decontrol of the railways we were told we had no right to ask the directors and shareholders of the railways to stand on their own feet, but that they should be set up on the backs of the taxpayers. A large grant was given from the Exchequer to meet the demands of the railway companies, in accordance, as we were told, with certain agreements which had been previously made. Now we find we are to be saddled with further burdens, to make up any losses sustained by the railway companies as a result of the coal stoppage. I ask the Minister to tell us definitely when our financial obligations to the railway companies are to cease? I understand final decontrol of the railways must take place m August, but one never knows what this Government is going to do. If the railway directors and shareholders who sit on the Back Benches press the Government for more financial assistance, there is no knowing when our obligations in this respect will be terminated.

The Parliamentary Secretary said that this year railway shareholders have received £1,000,000 more in profits than in the boom year of 1913. That is a startling statement when everybody is crying out for economy and demanding that wages shall be cut down or the country's industries cannot exist. If that be so, I cannot understand why the shareholders of railway companies should be entitled to £1,000,000 more than they received in the most favourable year in railway annals. In regard to the loss which has caused this Supplementary Estimate to be presented, the Parliamentary Secretary told us there had been a 90 per cent. decrease in the coal traffic over the railways, and that the passenger traffic had also decreased. Even in the passenger traffic the coal stoppage has had an effect. It is not the few people who use season tickets, or those who travel on free passes from whom the main passenger revenue of the railways is derived. The working class passengers, who have to take short journeys, contribute the most remunerative passenger traffic. The Parliamentary Secretary has frankly admitted that the Supplementary Estimate has been rendered necessary by the coal stoppage, and he also says it only covers up to 18th June. Therefore we have incurred further liability during this week, and we are entitled to ask that the Minister of Transport, who is a Member of the Cabinet, should use his influence to bring about a satisfactory ending to the coal stoppage.

Anyone who can do anything to help bring it to a satisfactory conclusion will be rendering good service to the State and to the community as a whole. Therefore, with these few remarks of protest against the Supplementary Estimate, I ask those in authority to do all they can to help to get us out of this seemingly impossible position.

Photo of Sir Eric Geddes Sir Eric Geddes , Cambridge

I feel I have to thank the Committee for the way they have considered this Estimate, because the criticisms have been mainly, not upon the Estimate or upon the Department which I represent here, but upon other matters connected with our industrial difficulties. I should like to answer some of the questions which have been put. My hon. Friend (Sir G. Collins) asked what economies had been introduced. The greatest economy you can introduce in railway working at a time like this is a reduction of services, and that, of course, has been brought about by the shortage of coal and the need for conserving coal, which received immediate attention. With that you get the inevitable and, at the same time, regrettable laying-off with the men. We were in agreement with the men that they would receive a guaranteed week's pay until they were called out on one day of the week. There had to be a discussion before that guaranteed week could be interrupted, the only alternative being to dismiss the men entirely. I should like to say at once that after the coal dispute appeared to be drifting into a lengthy one, the railway management met the men at my suggestion. The guaranteed week was, by agreement, set on one side and the men are being paid half a week's pay by agreement with them. So, to that extent, there have been economies introduced with the consent of the union and, I am glad to say, without, what some people feared, friction.

Again, at a time like this, wherever one is entitled to do so under these agreements, we are not paying what my hon. Friend will quite understand when I call it excess expenditure, incurred at the present time: we are holding that back. In other ways, the railways, in consultation with the Ministry where necessary, are bringing in such economies as are possible. Of course, the overhead charges are enormous in the working of very small traffic, and you cannot make economics anything like adequate to meet the position.

The hon. Gentleman (Mr. Cape) wanted to know when the Government liability would come to an end. The period of guarantee comes to an end on 15th August. After that date all the current expenditure of the railways will be on their own account. The back accounts, and they run back for some years, which are not settled—I think 1914 is finally closed, I am not quite sure, but 1915 is not—will have to be scrutinised. A careful scrutiny has been made, but the accounts are intentionally not closed. The reason for that is that I do not wish to close the accounts finally earlier than I can avoid, because in the later years items may come to light where we and the railways differ. As long as the account is not closed we can go back and pick that sequence of items up right through, so that there is to that extent some little method in our madness. My hon. and gallant Friend the Member for Newcastle (Major Barnes) asked whether the Cabinet had been fully advised on the railway position, when considering from time to time the question of the coal dispute, and I can, of course, assure him there that I did not neglect my duty in the matter. In considering it, the Cabinet had before them very prominently the railway situation from the point of view of finance.

There are two points on figures which I would like to correct. The first is an error for which I think inadvertently I was responsible. I did not give the wrong statement, so far as I know, but it was taken up wrongly. I said there was possibly £50,000 in the Vote for canals. As a matter of fact, out of the total Vote for the year, the £39,000,000 now before the Committee, about £500,000 has gone to canals in respect of the liabilities which accrued prior to decontrol in June of last year. That £500,000 has gone, but there is about £50,000 more which will possibly have to go. The other point which I think in fairness to the Committee I ought to make clear, is this, because I think every hon. Member who has spoken has fallen—and probably it was our fault—into the same error. If the Committee will look at the Note at the bottom of the Estimate, they will see that the sum is to meet deficiencies and a provisional sum on account to meet other claims. The whole of the original Estimate of £30,000,000, in so far as this Estimate goes, will go to meet deficiencies, plus £9,000,000, so that the cost of the coal strike direct and indirect is not, as many hon. Members have said, £9,000,000. It is £9,000,000 on top of any excess which will come under the original £30,000,000 Vote. It is difficult to say exactly what it will amount to.

Photo of Captain William Benn Captain William Benn , Leith

What were the other sums included here? Was it the settlement when the railways were decontrolled?

Photo of Sir Eric Geddes Sir Eric Geddes , Cambridge

The figures will not quite add up arithmetically, because it is difficult to know what they will be exactly, but roughly about £20,000,000 of the original £30,000,000 Estimates was to meet the deficiency on the expenditure and the receipts from time to time—not from month to month—and also it included the dividends. The other £10,000,000 was put in in order to give us something to wipe off other claims. The whole of the £30,000,000 is for deficiencies, part of which arose from back periods and trade depression, and partly due to the coal stoppage, direct and indirect. The £10,000,000 which we have allowed for other claims will, of course, be all wiped off by the £60,000,000 settlement which has been submitted, but the actual effect of the coal stoppage on the railway payments is not the £9,000,000 for which we are asking now, but a larger sum. It is difficult to say how much of the trade depression is directly attributable to the coal strike.

11.0 P.M.

Photo of Sir Eric Geddes Sir Eric Geddes , Cambridge

I beg the hon. Gentleman's pardon, the coal stoppage. As nearly as I can get it—the Committee, I know, will take it as a rough estimate—it is costing about £6,000,000 a month. The extra deficiency for April over March was £5,150,000. We allow the same sum for May. We allow half the sum for June. That is £13,875,000—it must be a little bit more than that now. The £6,000,000 is directly or indirectly attributable to the coal stoppage.

Photo of Mr Godfrey Collins Mr Godfrey Collins , Greenock

The question excluding the £30,000,000 in the Railway Bill being considered upstairs, and the £30,000,000 of postponed liability till next year, and this present £39,000,000 —a total of £99,000,000— excluding any further Supplementary Estimates?

Photo of Sir Eric Geddes Sir Eric Geddes , Cambridge

That, I think, is quite accurate. I think I have answered all the questions put, and the matter I have been asked to do, I will convey to the Prime Minister.

Photo of Captain William Benn Captain William Benn , Leith

[HON. MEMBERS: "Divide, divide!"] I have no desire to put hon. Members to any inconvenience by detaining them, but hon. Members must remember that this is a most vital matter, namely, the expenditure of large sums of money. My hon. and gallant Friend (Sir G. Collins) has just elicited that the whole business is costing over £100,000,000. The Parliamentary Secretary has told us that so long as the coal stoppage continues we shall have about £6,000,000 monthly to pay. I would remind hon. Members who are anxious to terminate the proceedings of another scene in this House a few months ago. Solely on the ground of economy, the Government suddenly brought coal control to an end, for they said it was purely a question of money. The result was the whole of the trouble with which we are faced to-day. The effect here is something exceeding £9,000,000; the other £15,000,000; and the enormous other Votes to which I can only refer inferentially—the Army and Navy Votes. The reduction moved by my hon. and gallant Friend is out to save £5,000; it is a reduction to indicate that in the opinion of the House the Government have mismanaged the coal dispute— grossly mismanaged the coal situation. So far from saving money by their conduct, by decontrol they have wasted millions more than would have been involved in the temporary extension of that control.

Photo of Mr William Royce Mr William Royce , Holland with Boston

I should like to extend to the Minister of Transport my sympathy for having to ask for this large sum of money to compensate the railways for the losses they have sustained. We have listened from time to time to the ills under which the railways have suffered owing to Government control, and I should like to know what is the nature of that control. During the whole of that control there has not been a single change in the personnel of the railways and every man employed on the line has been exactly the same. The only control that has been exercised from time to time is that the Minister has been compelled to come here and ask for large sums of money for the benefit of the railway companies. The right hon. Gentleman has told us that to-day he has prevented the payment of £1,000,000 claimed by the railway companies. I think we are to be congratulated upon having a Minister who looks so well after the interests of the country. I do not blame the Minister in this matter, but I wish the Committee to realise what an excellent bargain the railways have made, and when we hear so much of the wrongs of the shareholders I am compelled to reflect and point out that they have been treated in a most handsome manner. The right hon. Gentleman said that certain economies had been effected and that the railways had saved by putting the men on short time. In that case, who pays? It is a sacrifice on the part of the men, but still the payment goes on to the railway companies just the same and there is no diminution in the amount paid to them. I think this should be regarded as a debit against the railway companies. The whole business about these agreements arises from a lack of courage on the part of the Government and their failure to carry out their promise to nationalise the railways. You have the same trouble in the coal trade. This stoppage will probably represent to the nation a cost greater than the total required to buy out the mines. Here we have to pay £99,000,000 to the railway companies, which I believe could easily be made up, with this amount now in suspense, to quite 10 per cent. of the total value of the railways, and the State has nothing whatever in return for that money.

Lieut.-Colonel J. WARD:

Yes, it has got double fares.

Photo of Mr William Royce Mr William Royce , Holland with Boston

Yes, we have got double fares, and I shall be very much surprised if those fares are not increased very shortly. The steps which we are taking to place the railways under the control of the companies again will put the travelling and commercial public in this country in a very much worse position than they are in at the present time, and those sanguine Members who hope to find a reduction in railway charges will have a very rude awakening in the near future. I know I shall be told that a lot of this expense is due to increased wages, but wages would have been increased in any case. The exact result of what the Government have done in regard to control of the railways is nil except so far as footing the Bill is concerned. Here we have high railway rates, and every prospect of them being increased, and the country is still called upon to pay £99,000,000, and there is a very large amount in suspense. Ordinarily we should have had the benefit of the advice of the right hon. Baronet the Member for the City of London on financial questions, but when it is a question of granting money for the railways he is judiciously silent. I hope he will be able to give his views on the subject as to whether the shareholders have not had a very excellent time during the War and have not the prospect of a very fair time in the future. I am sorry to keep the Committee, but I did feel it my duty to say two or three words on this subject and to warn the Committee if they think that by the process we are going through upstairs, they are going to secure a large number of railway facilities, that in my opinion they will be very much mistaken.

Photo of Mr Walter Halls Mr Walter Halls , Heywood and Radcliffe

I was very pleased to hear from the Benches opposite the admission that economies had been effected, and that in order to effect those economies the men had been put upon half-time. There is a general feeling among the workmen on the railways that in effecting economies of this kind it is hardly done with due fairness to all concerned. Whilst the least paid worker on the railways has had to go on half-time, the people who are paid the higher salaries have not had to suffer any economies at all. You will realise what this means when I tell you that with my own organisation it is costing us something like £60,000 per week to pay 2s. 6d. a day for the days lost by the men employed on the railways. I submit that if economies are to be effected in order to save the State undue burdens in consequence of the Government's blunder in decontrolling the mines, then it is fair that those who are in a better position, including the shareholders, should be asked to bear some of the burden, and not merely the wage-earners. It has been truly said that we are not yet at the end of this business. I well remember about three years ago, as a candidate in 1918, that my opponent, the hon. Member for Northampton, used a statement the Colonial Secretary had previously made. It was one of the stock lines during that election that the railways were to be nationalised, and I feel that the common-sense section of the community will agree that had the Government followed up that policy we should not have been confronted with the situation that now obtains. I had the impression before I came to this House that to a very great extent the Ministers on the Front Bench were the victims of big business. I am more satisfied to-day, with my short experience of this House, that they are the victims of big business in the shape of the railway interests that have been able to drive a bargain of this kind and get their interests so well safeguarded and protected while the ordinary worker has got to suffer short pay. I hope that the lesson we are going through and the penalty that the community has got to pay will not be lost on the people of this country. I hope, on reflection, that they will see that if they had backed Labour opinion in this country, and compelled the Government to carry out their pledges with regard to the Sankey Com- mission and with regard to the nationalisation of the railways, we would not have been in the position we are in to-day.

Resolutions to be reported To-morrow. Committee to sit again To-morrow.

The remaining Orders were read, and postponed.

Question put, "That a reduced sum, not exceeding £21,215,000, be granted for the said Service."

The Committee divided: Ayes, 31; Noes, 149.

Adjourned accordingly at Twenty-six Minutes after Eleven o'clock.