British Transport Commission (Annual Report)

Part of the debate – in the House of Commons at 12:00 am on 10th July 1957.

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Photo of Mr George Strauss Mr George Strauss , Lambeth Vauxhall 12:00 am, 10th July 1957

If the responsibility is mine, I will do my best to satisfy my hon. Friend. When we are discussing a Report which has only just been issued, as we are today, we all feel that we are dealing with current affairs and for that reason the debate is all the more vital and worth while.

The Report which we are debating is unusually interesting because the developments now taking place in the transport industry are more important, more critical and more exciting than anything that has happened since the change of ownership in 1947. For the first time since then, plans are beginning to operate which will change the British railways—the, core of our transport system—from an ill-equipped and consequently an inefficient system into one which will be up to date and maybe the most up-to-date and efficient in the whole world.

Apart from modernisation plans, two other things of importance have happened during the past year. One is that the haulage section of the Commission is no longer in a state of forced contraction and consequent demoralisation as a result of Government policy. Finally, although the financial outlook of the Commission, particularly of the railway section, is, in spite of the optimism expressed by some, including the Minister, still giving rise to anxiety, provision has been made to ensure that sufficient funds will be available to carry out the modernisation scheme during the next few years and to cover such losses as may be incurred meanwhile.

It is, naturally, that modernisation plan which forms the keynote of this annual Report and is the feature which dominates the transport scene today. Now that it is getting into its stride, we can look forward, I think, with confidence to saying goodbye to that period of stagnation which has far too long characterised our railway system, in spite of the remarkable but necessarily limited progress in efficiency which the Commission and its staff have been able to carry out.

The deficiencies from which the railways are suffering can only be effectively cured by large-scale and comprehensive re-equipment. We have already sufficient evidence to lead us to believe, indeed to make us sure, that when that re-equipment takes place, the result will not only be a substantial saving in operating expenses but, on the basis of experience in this and other countries, a gaining of substantial new traffics.

The prospect of modernisation and expansion confronting the railway system today must give special satisfaction to all railwaymen, particularly as this industry.

perhaps more than any other, inspires such a sense of devotion and participation among all those who work in it. They can look forward to seeing their industry changed in a few years from a state of obsolescence to one of very high efficiency; one that will give a far finer service to the community and which may, if our optimism is justified, even make a profit instead of a loss.

Equally satisfactory to those who work in the road haulage section of this industry is the fact that, due to the events which took place last year and the Act passed by this House, they are no longer to be pushed about by a Government determined to hand hack this most lucrative section of the transport industry to private interests. The effort made to achieve this was an embittering experience indeed and one which did immense damage to the morale of all who work in the Commission.

It was all the more galling because it was felt that this process of disintegration was being insisted on by the Government not for any sound or indeed any technical reason, but on grounds of squalid politics. But, as we know, at a very late stage the spokesmen of British commerce reinforced the view expressed throughout by the Labour Party, and induced the Government—in spite of a rearguard action fought by some of their back benchers—to halt this disruptive progress. Consequently, British Road Services now have an opportunity of carrying on their activities with some sense of security.

I wish to make two short comments about the present financial position of the railways. I do not wish to repeat anything said by my hon. Friend the Member for Enfield, East (Mr. Ernest Davies), or by other hon. Members who have made observations on this point. Some of the factors which have put the British Railways "in the red" are, as we all know, the result of the deliberate policy carried out by the Government, for good or for ill—we think for ill. But most of the others are not peculiar to Britain alone. We should bear in mind that, with one exception, every railway system in Europe is "in the red" today, and, one way or another, receives Government support; and that the conditions which brought about this situation here are common to all other countries.

I should like my second point to be pondered especially by Government supporters. It is that the fact that our railways are publicly owned has made it infinitely easier to deal with their financial crisis. I am sure that every hon. Member will agree that whatever the ownership of our railways may have been during the last few years there was bound to have been a substantial loss. Plainly, no Government could have dealt with the situation, had the railways remained in private ownership, in the same way as the Government have dealt with it. It would have been difficult for any Government to deal with that critical situation in any way while the railways remained in private hands, and to ensure that they received sufficient sums of money, the hundreds of millions of pounds that are needed, to carry out the modernisation programme.

There are two points, one minor and the other of considerable importance, that I want to raise in connection with the modernisation programme. The minor one may be considered petty, but I want to raise it nevertheless. It concerns the layout, by which I mean the appearance as well as the equipment, of the new passenger coaches which are to be built in considerable quantities during the coming years. We recently had an opportunity of viewing some of these coaches at an exhibition at Battersea Wharf.

While I may be, as I think I am, in a minority, I feel it my duty to say that instead of being impressed by those exhibits I thought they were disappointing and that the modern age of travel required something far better. I cannot believe that the designing talent we possess in this country was sufficiently brought to bear in designing the comfort, appearance and general atmosphere of these coaches. I hope that the carriage manufacturers will recruit experts from a wider field before finalising wagons which are to serve the British public for decades to come.

I am aware that these were only prototypes and I am not too cast down. I am also aware that the Transport Commission has set up a high-powered design panel to look after this very problem. I hope that from that design panel we shall get something good. What we were shown the other day might be all right as a first shot, as long as nobody has it in mind that it is the last one.

My other point about the modernisation plan is of great importance and raises matters which are grave. It is one that is giving me and some of my colleagues much anxiety. It concerns the large sums of money, millions of pounds of public money, which will be spent on the re-equipment of our railways.

We were told that the total figure was £1,200 million. Since then, no doubt because of increases in cost and, maybe, new designs and specifications, this amount has grown. Several of my hon. Friends have already asked by what extent it is expected by those who draw up the plans that the original figure will be increased. I hope we can get a reply tonight. It may be that we have not got a figure yet, but, obviously, it will be more than the sum I have mentioned.

Out of that £1,200 million a substantial quantity will go in equipment for the railways; probably most of it. Therefore, the Transport Commission will require to buy many hundreds of millions of pounds worth of goods and will need them quickly. It must have them. It will have to place its orders with an industry which is already overloaded. Consequently, there will be a sellers' market. On one side there will be the demand for enormous quantities of goods with early delivery, and on the other side a limited number of suppliers who will be in a position to demand almost any price they like for the goods, knowing well that the Commission will be unwilling, and, indeed, unable, to get the equipment it wants from abroad.

Here, I suggest, is a position of great latent danger, which may add tremendous sums to the cost of the modernisation scheme thereby burdening British Railways for years to come with excessive interest charges, maybe of some millions of pounds a year. This is not a fanciful position. It is a realistic appraisal of the situation as it is today.

I am all the more concerned about this, because I am convinced that a weak point in the whole of the Transport Commission set-up is its purchasing system. This, I am sure, is recognised by the Commission itself, which, two years ago, appointed an internal committee to survey the whole field and took on from the Central Electric Authority a supplies and production adviser who served on that committee. Its report, I understand, was broadly accepted, a few months ago, but, at the same time, rather surprisingly, the officer largely responsible for that report was asked to leave the Commission's service. I wonder whether we could be told why, and whether the Minister is satisfied that the present purchasing arrangements of the Commission are satisfactory and capable of dealing with the acute purchasing problems involved in the modernisation plan?

The situation is more difficult in view of the traditional policy of the railways to effect heir purchases of major equipment from a few well-known suppliers who have given good service in the past, rather than to go out for competition. This is a long-established policy which has been inherited by the Commission from the time when the railways were in private ownership, and I doubt whether it has been completely abandoned today. It is understandable that engineers responsible for buying equipment like to deal with old suppliers with well established reputations for the quality of their goods, but the danger in doing that when goods to be ordered are to be in very great quantities—greater than ever before —and when the suppliers are already working to capacity, is obvious.

Moreover, continuation of this practice today is causing considerable resentment among other sections of industry who maintain that they are able to meet either in whole or in part the requirements of the Transport Commission at equally good prices and to give equally good delivery. I do not know whether they can, but they maintain that they can. If I give one or two examples of what I am informed on the most excellent authority, from various sources, has been happening recently, I think that the House will realise the dangers of this situation.

I will not give the names of the companies concerned, but I have them available and will readily give them to the Minister or to any hon. Member. I understand that about a year ago the Commission wanted to make some purchases necessary in connection with the new vacuum braking system and gave an order for an essential part of the necessary equipment to a well-known firm which had supplied the railways with equipment for years with great satisfaction. The quotation of £30 13s. 4d. per unit was accepted in the first place by the Commission, but, before it was confirmed at the instigation, perhaps—I do not know —of an outside competitive firm, or it may be the special supplies officer who had been appointed, competitive tenders were sought.

It was then found that other firms of equal standing were prepared to quote between £20 and £24 for that article. Hearing of this, the original firm reduced its price to £23. I understand that the order has been given to one or two firms at about that figure and, as the number of articles involved is likely to amount to about I million, the saving ultimately involved is substantial, amounting to about £7 million.

I am also informed that the original firm has been given the order for making and installing a major part of the signalling system required by the modernisation plan, which will amount, in total and at the end, to about £100 million. The order has been given to this firm without any competitive tenders being sought for either the whole or part of this equipment.

I will give only one more example. I am told that orders have been given to an old and large firm, very well known and for a long time a supplier to the railways, for the manufacture and installation of the overhead catenary, which is the wires, supporting posts, and so on, required for the electrification of the railways. The order is for all that quantity which the B.T.C. will want for the first five years of its programme. The total amount involved for the period is likely to be about £30 million. The contract has been placed on a cost-plus basis.

The important point here is that other firms of high standing in the industry asked to be allowed to make competitive tenders for sections of this work. Finally, they were allowed to do so, but they maintain that the conditions laid down by the Commission made effective competitive tenders impossible. They resented the situation very much and protested strongly to the Commission, but their representations were wholly ineffective.

Although I have given only two or three examples—I could give many more —I will add only one further point, and it is one which naturally increases our anxiety in this matter. The new arrangements accepted by the B.T.C., as a result of the report of the internal committee, involved the appointment of a contracts officer in a position of high responsibility. The B.T.C. agreed to this some months ago, but I understand that no such officer has yet been appointed. With all that is going on at this critical stage in the modernisation plan and the purchase of materials for it, one would have thought that such an officer would be appointed immediately.

I am aware that the members of the Commission are themselves concerned about the purchasing arrangements in their organisation and the sellers' market which confronts them. This is shown by the fact that they set up the committee to review the position and accepted its recommendations. Nevertheless, in view of the importance of this matter and its background history, I feel that the Minister should satisfy himself, the House and the public that all is well and, in particular, that the traditional purchasing policy of the railways has been drastically revised not only on paper but in practice. As we all know, it is simple to produce a new plan which looks very nice, but if some who are to operate it are opposed to it the paper plan may be ineffective.

The Treasury is much involved in this matter, because it is underwriting enormous sums of public money, and I therefore suggest to the Minister that he might well seek to help the Transport Commission to overcome the difficulties that confront it. One way which suggests itself to me is that he might use the Government expertise on this matter. I know very well from my own experience in the Ministry of Supply that that Department has a large, exceedingly efficient and very experienced purchasing department which is well used to buying all the goods required for the three Services in times of crisis and emergency, such as the beginning of the Korean War. The Department does this while, at the same time, safeguarding, the public, as far as it is possible to do so and also bearing in mind, as it often has had to do the importance of quick delivery of the goods.

It may be that some of the officers, and some of the experience in that Ministry, might be useful to the railways today. However, I hope that I have said enough to impress upon the House and the Minister the importance of this matter, and the deep anxiety which some of us in this House feel about it. I trust that when the Parliamentary Secretary replies—and, I have warned him that I was going to raise this matter—he will be able to relieve our anxieties to some extent, but that, anyhow, he will assure us that he will give this important subject, involving as it does, huge sums of money and the success of the modernisation plan, the closest attention during the next few years—in consultation, of course, with the Transport Commission.

Apart from this, the Report contains a vast amount of matter on which the Commission deserves the wholehearted congratulations of the House and the gratitude of the country. It is, indeed, a pity that the travelling public—and that embraces practically everyone who lives in the British Isles—is unaware of the remarkable achievements that have been effected in many directions by the joint efforts of the managers and employees of the Commission. There are one or two that struck me as being particularly encouraging.

One, which I think may be the most important, is the new spirit of co-operation between management and staff, for which the new Railways Productivity Council is largely, but not wholly responsible. There is today a real effort on both sides to get together, and to work in the interest of the service to a far greater degree than ever before. That is excellent.

This new spirit was sorely needed, and, of course, it takes time to develop its maximum benefit. A good start has been made, and one of its fruits has been a greater willingness for recruits to join the industry, to which trend the better pay which was agreed during the recent negotiations has, of course, been a contributing factor. The recruitment figures quoted in the Report show that compared with a loss of staff of 17,000 in 1954 and of 14,000 in 1955, there was, last year, a gain of 7,000. In this connection, no doubt, the excellent training scheme set up by the Commission has helped. Another important figure is the drop in turnover of London Transport. That has fallen from 18·9 per cent. in 1955 to 14·7 per cent. in 1956.

Turning to staff matters, I should like to add something which I do not think has been mentioned today—and perhaps the Minister may be loath to do so. I am sure that the increase in the salaries of the members of nationalised boards announced last week by the Prime Minister will have a beneficial effect on the future prospects of this industry. In many cases, the salaries of the people about whom I am most concerned—the small group of top managers and engineers on whom the successful operation of the Commission's work so much depends—were below those paid in private industry.

Before long, this situation was bound to have had a deleterious effect on the fortunes of the Commission. Some men might have been tempted to go over to private enterprise, but even more important is the danger that the most promising new material, the outstanding young men, would, if the prizes elsewhere were more glittering, not have joined the Commission's service, but would have turned for their careers in some other direction.

The rewards of the top men are, of course, largely conditioned by the salaries of the members of the Commission, as it is difficult for many reasons to pay the senior staff more than the members of the Commission. One reason is that if that is done nobody can ever be promoted to the Commission, of which membership should be the ultimate objective of the staff. I am, therefore, sure that the increase in salary of the top people will, in the long run, be of great value to all the nationalised industries, including the one we are discussing tonight.

On the subject of the Commission's membership, I want to express the personal opinion, that experience confirms the view which some of us have always put forward but about which others have had doubts, that part-time membership of first-class people on these public bodies is of very great value. I am certain that that is the case on the Transport Commission. The amount of time and effort and the value of the contribution made by part-time members has been outstanding.

I want to comment about the paragraphs in the Report which deal with the consumers' consultative committees. The central and the 11 area transport consultative committees are doing valuable work, but I wonder whether they could not and should not do more to bring the transport user into closer co-operation with the men who run the transport system. Very few people who use the railways know of the existence of the committees. It is most desirable, if anybody using a public service has a grievance, justified or unjustified, that he should be able to feel that he can have it investigated.

The Commission and the regions should do much more to make it known to every user of the railways that if he has a serious complaint which he feels should be looked into, he should go, in the first place, to the stationmaster or to the appropriate official, and, if he does not get satisfaction there, he can go to a consultative committee. He should know how to get in touch with members of that committee.