Debate on the Address

Part of Orders of the Day — Queen's Speech – in the House of Commons at 12:00 am on 4th November 1958.

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Photo of Mr Ernest Davies Mr Ernest Davies , Enfield East 12:00 am, 4th November 1958

We have had a very lively Scottish interlude; in fact, we have had a capital bonus from the Front Bench this afternoon. That is understandable and was necessary. The Secretary of State for Scotland said that what was important for Scotland was important to the United Kingdom. I think that the reverse holds true, that what is important to the United Kingdom is equally of importance to Scotland. What I have to say this evening, which mainly concerns the transport industry, applies very considerably to Scotland—more so than to England—but equally to Wales.

I rise to draw attention to the critical condition of the transport industry, and particularly to the financial crisis that faces the British Transport Commission. I do so during this debate on the Opposition Amendment because I consider that the parlous state of the transport industry is due to Government economic policy; and this is a debate on economic policy. I consider that the Government's economic policy has aggravated the difficult position of the transport industry which has been developing over recent years and which now has reached crisis point. The fall in production has affected the Transport Commission to a very serious degree and for this economic stagnation the Government must take the blame.

It is no exaggeration to say that the public transport industry today, in certain sections, is fighting for survival and that the Commission is fighting against bankruptcy. For this, Government policy is responsible. The consequence is that the maintenance of adequate public services is becoming increasingly difficult. As costs rose during the period of inflation, fares and charges went up and the traffics of the public transport services diminished so that their position became worse. Consequently, there has been a widespread curtailment of the public services which again worsened the position for the public. Both the passenger and worker in the industry suffered as a consequence.

The main cause of these difficulties has been Government policy, which has aggravated the situation which was already developing. The result is that private transport has increased to a great extent. The increased numbers of private motorists driving their own cars and industrialists carrying goods in their own vehicles have taken traffic away from the public services. This great increase in private transport has been stimulated. first, by the large increase in cost by higher fares and charges, and, secondly, by the natural growth of private transport—which no one wishes to retard, but which means that today the public is getting worse public services at higher cost. I fear that this situation is likely to deteriorate further because there will be a further increase in private transport.

With the relaxation of hire-purchase restrictions I do not think there is any doubt that we shall have a private car boom. Where all those cars are to be parked and how they are to travel along the roads at any speed, I do not know. Already there is one car for every 12 persons in the country, which is roughly one for every five families. I see that the Home Secretary, when opening the Motor Show, said he saw no reason why there should not be one car for every two families. If that is to be so, I cannot comprehend what is to happen on the roads unless the road system is revolutionised. It may be that this is what happens when we travel "Onward in freedom" in a "Property-owning democracy."

My concern is not at the increase in private transport—which must be welcomed as a sign of an increasing standard of living in the country—but at the effect on public transport which results and the need to provide for it, particularly roads. Some protection must be given to the public services to ensure that the essential services are provided and that is not the case at present. So far, rural services have suffered most.

My hon. Friend the Member for Morpeth (Mr. Owen) recently pointed out that certain services in his constituency had been entirely withdrawn, and that no transport facilities were available in certain rural areas. That is true in other parts of the country. Unfortunately, public deprivation of essential services is now spreading to the urban areas, and its latest manifestation is to be found in London Transport.

The London Area Transport Users' Consultative Committee, which has been inquiring into the proposed cuts in the bus services and curtailment of the Underground services, has recommended that the proposals in the case of the Underground should be withdrawn. It has stated that it considers that if the services were withdrawn it would have "very serious repercussions on the industrial and social life of London as a capital city." In my view, that is an indication that the Committee considers that if these services were withdrawn London Transport would not be fulfilling-its obligation to provide adequate services in the London area.

It seems to me that certain transport operators are taking advantage of the rise in costs to cut out the unremunerative services to an unnecessary degree. The road passenger transport industry is protected by a licensing system, either through monopolies granted to operators in certain urban cases, or through the restriction of competition in other cases. If that is so, since they receive this measure of protection and have certain privileges, there is an implication that they have a responsibility to provide adequate essential services.

Up till now the remunerative services have paid for the unremunerative ones, and that should continue to be the case so long as these operators receive protection. Unfortunately, however, they have seized upon the present situation to reduce their unremunerative services and to maintain all their remunerative ones. They are shirking their responsibilities to some extent.

Under the 1947 Act the British Transport Commission, among its many other duties, had an obligation to provide adequate public transport services. The Conservative Government repealed the relevant Section of the Act, and the Commission no longer has that responsibility. We are suffering today from that change in the law. The Commission has been compelled by the deterioration in its finances to cut its services considerably, largely as a result of Government policy. If the 1947 Act had stood as it was passed by this House the Commission would be under an obligation to continue some of those services which are now being cut out.

The recession—for which the Government must take responsibility owing to their policy of stagnation—the retardation of industry, or whatever one calls it, coming on top of the growth of private 'transport, following the earlier wrecking policy of the Government, has had, as far as the Commission was concerned, disastrous effects. It is only necessary to turn to the figures of freight traffics of British Railways to see what a startling fall has taken place, both in traffics and in revenue. This fall is directly traceable to the fall in production, especially of steel, and the fact that coal is being stocked to a much larger extent than normally—and that the coal which is stocked is not transported.

I will take merely the minerals traffic, which reflects the fall in the production of steel, because it is iron ore, scrap and the other raw materials used in the production of steel which largely comprise this minerals traffic. During the first 36 weeks of this year, to 7th September, the minerals traffic fell from 45 million tons in 1957 to 37 million tons in 1958. That is a fall of 8 million tons, or 17½ per cent. During the same period the production of steel fell by 16 per cent. The fall of 16 per cent in the production of steel is related to the fall of 17½ per cent. in the carriage of minerals traffic. The Government must take the blame for the fall in production and for the consequent fall in the traffics of the Commission.

If one takes the most recent period—the last four weeks published—the position is even worse. Minerals traffic is down by 25 per cent., with steel production down by about 16 per cent., and all freight carried is down also by 16 per cent. This fall in production is well shown by the fall in general merchandise, which was about 15 per cent. As a consequence, the financial outlook of the Commission is appalling. In the first 40 weeks of this year freight revenue alone fell by about £20 million and total revenue by about £28 million.

This means that the Commission may make a loss of between £80 million and £100 million this year—a tremendous figure to contemplate. It means that the £250 million which the House voted for deficit financing for the period 1956–62 will be more than exhausted by next year. Already, £140 million of that £250 million has been drawn upon for 1956–57, and if between £80 million and £100 million is drawn on for 1958 only £20 million or £30 million will be left for the deficit for the whole of 1959. That indicates that before next year is up the Commission will have no funds to draw upon to finance its deficit, which is certain to be higher than that.

In these circumstances I should have thought that the Government would seek additional finance to tide the Commission over this period. This money was supposed to last until 1962, when it was estimated that the Commission would break even. Those estimates, which appeared in the White Paper proposals for the railways, were based upon conditions that were far better than those existing today, and they were also based upon far better prospects. There is no question but that the estimates of that White Paper cannot now be fulfilled, and the Commission is, therefore, very unlikely to be in a position to pay its way during the period estimated by the White Paper, notwithstanding the optimism displayed by the Minister earlier this year. So far, the Government have adopted a negative and inactive attitude to the current position of the Commission, and. in the face of that, we are entitled to ask what their policy really is.

It is necessary for the Government to review, with the Commission, the estimates that were put forward in the White Paper; to consider what additional finance is required, and in the next few months to ask the House, quite frankly, for further assistance. It is due to the House that the Minister should inform us of the changed position of the Commission, and take us into his confidence. We voted this money on estimates that no longer hold good.

Yesterday, the Chancellor announced that there was to be an increase in the public capital investment programme of £170 million. He did not, however, tell us how much of that sum is to be available to the Commission, and how much to British Railways, but we may be able to elicit those figures through Questions. Meanwhile, vie are in the dark, and as the increase in the total figure for public investment is not very great, I cannot feel that it will make a great deal of difference to the Commission.

Essential as it is, capital investment for modernisation is long-term investment. It takes several years for the fruits of that investment to be fully reaped. The Corn-mission's passenger traffic is already benefiting from modernisation, but there ought to be a review of the whole programme. That programme, excellent as it is, was drawn up on certain assumptions. Several of those assumptions have not been fulfilled, and some of the traffics that were anticipated have, of course, been irrevocably lost in the changed circumstances. While maximum capital investment is necessary, there may be certain conditions in which it would be desirable to switch its direction from that originally shown in the White Paper.

Why cannot the Commission now be left free as regards the amount of its capital investment? Today, the private sector of industry is permitted to spend at will. Why is it that this nationalised transport industry, which is in such dire need of modernisation, and whose expenditure helps our employment situation, cannot now have the restriction lifted from it, and be allowed to go full steam ahead with its modernisation programme as far as it can within the resources of material and manpower?

Though I should have liked to have talked somewhat about the road programme, I shall only say that here, again, the Chancellor stated yesterday that there was to be increased expenditure on the roads. He did not say how much, but, again, it is important, in view of the great increases in traffic and the large loss of life on the roads, that that expenditure should be as great as possible.

If the road system is to continue to develop it is important that the pipeline should remain full. At present in the pipeline there is a programme of £240 million, but unless more money is poured in to keep construction going there will be a run-down, and in a few years' time we shall suffer as a result.

The Government lack a co-ordinated road and rail capital investment policy. They seem to be proceeding on an ad hoc basis, with the railways on the one hand and the roads on the other. On the roads much has been done in bits and pieces. Instead of there being a large number of overall schemes, such as the London-Birmingham motorway—the construction of which, at speed, shows what can be done on a grand scale—the Government are proceeding with a little here and a little there—very often in marginal constituencies.

The Government's economic policy is, to a large extent, responsible for the present very serious position of the transport industry. As a direct consequence of their policy, the public services will deteriorate still further, and their costs and charges rise higher, unless the Government's negative transport policy is replaced by a constructive policy aimed at establishing a planned transport system. Such a constructive policy remains the policy of the Labour Party, and it will not be long before we are in a position to carry it out.