General Powers of Freight Corporation

Clause 2 – in the House of Commons at 12:00 am on 27th May 1968.

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Mr. Edward M. Taylor:

I beg to move Amendment No. 5, in page 3, line 7, leave out paragraph (d).

This is largely a probing Amendment, because we think that the Government should now be in a position to clarify their intentions with regard to the shipping services. We have one or two reservations about the paragraph as it stands, because it allows a major extension of the activities of the National Freight Corporation with regard to sea services. The Corporation is one of those friendless bodies which nobody has welcomed. Those employed on the railways are not enthusiastic about it, and the road hauliers are far from satisfied with it. It is about the only organisation which can truly be said not to have a friend in the world.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. It is difficult for the hon. Gentleman to make his case against a background of noise.

Mr. Taylor:

As I was saying, Mr. Speaker, the Corporation has scarcely a friend in the world.

Our objection to paragraph (d) is partly related to subsection (2) which gives the Corporation a general authority to expand transport services by sea, subject only to the consent of the Minister. I think that hon. Members on both sides have looked with alarm and some consternation at the extent to which public enterprise has been extended into many activities. A recent survey showed that the Government controlled about 45 per cent. of the economy and its manpower through those whom it employed, and through the money which they expended on contracts.

Photo of Mr Leslie Huckfield Mr Leslie Huckfield , Nuneaton

Most of the public ownership in transport has occurred under the 1962 Transport Act.

Mr. Taylor:

That is rubbish, but I think the hon. Gentleman is aware that at least that Act introduced some responsible commercial disciplines, many of which are being abandoned under this Bill. The hon. Gentleman is a Stone Age Socialist who revels in nationalisation, and in the extension of public ownership. We do not share his view, and if he and some of his Friends were to abandon their attitudes the economy would not be in the serious state that it is now.

The subsection provides an opportunity for a major expansion of seagoing services. In Committee we tried to restrict the Corporation's power, but every Amendment that we tabled was rejected. The Minister may argue that no major extensions are intended, but there is provision for £300 million worth of borrowed money to be used for the purpose of extending such services. We want to know what extensions are envisaged.

We are told that certain safeguards are privided The then Parliamentary Secretary, who has been transformed to another Ministry, said in Committee at column 172 that there was a real protection against abuse of this power by the fact that the Minister's consent was required. Looking back at previous legislation—

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. The hon. Member seems to be talking about the Clause as a whole.

Mr. Taylor:

Mr. Speaker, I am referring only to sea services, and saying that here, as in other respects, the only safeguard is the Minister's consent. We have had indications from the Government that they intend making certain changes with regard to the Corporation's responsibility for seagoing services. We appreciate that because of the discussions which were necessary the Government withdrew certain provisions of the Bill, but I hope that we will be given some indication of the Government's intentions with regard to these services.

7.15 p.m.

One matter which is of concern to many Scottish Members, and particularly to my hon. Friend the Member for Galloway (Mr. Brewis), who has been campaigning fearlessly for some time, is the future of some of the Scottish sea services, and in particular the Stranraer-Larne ferry. In Committee the Minister of State for Scotland gave a pledge which we greatly appreciated. At columns 352-353 he said that the profits of the Stranraer-Larne ferry should accrue to the Scottish Group. He said that he accepted the principle of our Amendment, and hoped to table one himself on Report. It seems, therefore, that we are at least entitled to an explanation of what the Government have in mind.

The question of transport services by sea is causing concern in Scotland and I think that we ought at least to have some idea what the Government intend to do. At the moment these are under the general management of British Railways, to whom the profits accrue. We feel that the profits should accrue to Scotland, and I hope that the Minister will clarify the position.

Our objection is to the general power to expand all transport services by sea. We believe in competition. We like to see public enterprise being stimulated by fair competition from private enterprise, but when we consider the financial arrangements being adopted in respect of the National Freight Corporation, we fear that the competition will be hypothetical. I hope that the Minister will be able to give some idea of what the Government have in mind for the future of these sea services, how he envisages their organisation, the extent to which expansion is considered, and what he thinks about the Scottish services.

Photo of Mr Peter Bessell Mr Peter Bessell , Bodmin

I do not want to delay the House for long, because this matter was thrashed out at considerable length in Committee. It is, however, important that we should come back to this subject, as we said in Standing Committee we intended to do.

I can understand that it is necessary for the National Freight Corporation to have wide powers so that it can be an effective Corporation, but I am at a loss to understand, and indeed have always failed to grasp, the Government's reasons for including seagoing services. I make no secret of the fact that I do not care for the National Freight Corporation, nor does my party. I should prefer a system of integration, rather than one of control, and one which enables a new corporation to operate services.

If we consider the subsection in conjunction with that part of the Bill which enables the Corporation to run its own services in addition to those operated at present by the Transport Holding Company, we see that this proposal has a much greater significance than is appreciated, or was appreciated even in Committee. We have said many times that we are concerned that the Freight Corporation, if we are to have it, should not have vast permissive powers which may be misused and involve considerable Government spending—

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. The hon. Gentleman is talking about the Clause itself. We are discussing only whether paragraph (d) should be included.

Photo of Mr Peter Bessell Mr Peter Bessell , Bodmin

I apologise, Mr. Speaker. It is difficult to keep in order and I am grateful for your indulgence thus far.

We must have, what we did not have from the previous Minister, a reason for the inclusion of sea services. I share the anxieties of the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) about these wide powers.

Photo of Mr Henry Brewis Mr Henry Brewis , Galloway

This is my first opportunity to raise this point, since I was not on the Committee. Exactly what will be the position of the Stranraer-Larne ferry service? I see from the Committee Report that the Minister of State, Scottish Office, said quite specifically that its day-to-day management would remain in Scotland. We feel strongly because, when it was controlled from London, the service languished, there were fewer and fewer passengers and there was an unfortunate accident, some years ago, in which some of the blame was attributed to the control from London.

Since it has been controlled from Glasgow, it has been controlled well and is making a good profit. My constituents are anxious that that profit should be used to improve the transport services in South-West Scotland and not to wipe off a deficit in some other area. Will the undertaking that its management will remain in Scotland be kept?

Photo of Mr Henry Clark Mr Henry Clark , North Antrim

I echo the point of my hon. Friend the Member for Galloway (Mr. Brewis) but take issue with my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor). Stranraer is in Scotland, but Larne is in Northern Ireland. We would far rather that the steamer service was controlled from Glasgow than from London, but the people of Northern Ireland are concerned that it should operate efficiently and economically. My hon. Friend the Member for Cathcart wants to ensure that the profits accrue to the Scottish Group; I want them to accrue to people in Northern Ireland who use the service.

The charges on this ferry for passengers are very low, but those for motor vehicles are inordinately high compared with those between Britain and any other country—

Photo of Dr Reginald Bennett Dr Reginald Bennett , Gosport and Fareham

Not for the Isle of Wight; that is even worse.

Photo of Mr Henry Clark Mr Henry Clark , North Antrim

How will the service be operated? It will not be in the interests of Northern Ireland if it merely contributes to lower commuter-railway fares for Glasgow.

Photo of Mr Richard Marsh Mr Richard Marsh , Greenwich

The points which have been raised are those which I expected. It was a pity that the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) should have made a purely political speech, as he was entitled to do, about the virtues of nationalisation in a debate in which he has been complaining about a shortage of time. But there were some serious points.

The first basic question was, why are shipping powers here at all? It becomes more and more impossible to think in terms purely of inland transport, but the real reason is that shipping powers are included so that the National Freight Corporation can provide the shipping services at present provided by the Transport Holding Company's subsidiaries, Atlantic Steam Navigation and Associated Humber Lines, which will be transferred to the N.F.C. If it is to take possession of ships it will need the power to operate them: otherwise the whole exercise becomes abortive—

Photo of Mr Peter Bessell Mr Peter Bessell , Bodmin

Does the right hon. Gentleman visualise the shipping services run by British Rail, for example, eventually being taken over by the N.F.C?

Photo of Mr Richard Marsh Mr Richard Marsh , Greenwich

Having once tentatively introduced a new Clause to some extent related to this, and brought down the wrath of God and the Opposition around my ears, I think that any proposals about the shipping services of British Rail should await a later discussion. It is a pity that this has been separated from this Amendment, but I cannot be blamed, since the only reason that I cannot answer is that the Opposition did not want to discuss that Clause. This is just one of the many absurd situations which they have created.

The other interests are safeguarded by the need for the Minister's consent. Another point was raised by hon Gentlemen from North of the Border. The hon. Member for Cathcart has today been sent a letter by my hon. Friend the Minister of State, Scottish Office, which, although he has not yet received it, he will not mind my quoting, I think. Part of it said: I have assured the Standing Committee on the Transport Bill on several occasions that the day-to-day management of the service will remain in Scotland. The arrangement is in conformity with the views of the British Railways Board and will be continued by whatever undertaking owns the ships employed on the service in the future. The Minister of Transport has already confirmed that, if it was decided to set up a new company in which present shipping assets of the British Railways Board were vested, this would in no way affect the retention in Scotland of the day-to-day management of the Stranraer service. One could go on on this point, but I do not want to be accused of spinning the subject out.

These are perfectly fair points. The answer to the first is that, if one takes shipping services, one tends to need powers to operate them, and to the second that the assurances requested have been given.

Photo of Mr Henry Clark Mr Henry Clark , North Antrim

Before the right hon. Gentleman sits down, would he answer my point about minimising fares and giving equal benefit to those in Northern Ireland?

Photo of Mr Richard Marsh Mr Richard Marsh , Greenwich

The fixing of fares does not come under this Clause and, is not a matter for the Minister.

Amendment negatived.

7.30 p.m.

Photo of Mr Peter Bessell Mr Peter Bessell , Bodmin

I beg to move Amendment No. 6, in page 3, line 14, leave out paragraph (e).

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

I suggest that it would be convenient for the House to discuss at the same time Amendment No. 7, in line 14, after 'provide', insert 'inland'.

Photo of Mr Peter Bessell Mr Peter Bessell , Bodmin

That would be convenient.

It does not seem right or necessary that the National Freight Corporation should have the additional power contained in paragraph (e). British Rail at present operates hovercraft services; for example, between the Isle of Wight and the mainland, and recently a cross-Channel service was introduced. The present hovercraft services of British Rail run at a loss. I do not complain about this because with a new form of transport it is inevitable that, during the development stages, difficulties will arise. We accept that specialised engineering skills are required and the advertising costs are involved. All these things are bound to make the initial operating procedure expensive. However, to give this additional power at this stage to the Corporation might be a mistake.

I said in Standing Committee that, by this provision, we would allow the Corporation to embark on a method of transport which had not yet been fully tried. I appreciate that hovercraft are being used throughout the world and I agree that the Government should have provided assistance for the development of this new type of transport, which may prove a most efficient way of carrying passengers. But so far it has been found difficult to make hovercraft services profitable because of the high operating costs involved. I am, therefore, concerned at the idea of giving the Corporation tremendous permissive powers which might result in it undertaking vast expenditure on a relatively new form of transport and, in consequence, incurring large losses.

Whatever reservations we may have, my hon. Friends in the Liberal Party want the Corporation to be a success. However, we think it would be better to restrict it at this stage; and at a later stage the Minister could introduce amending legislation to give the Corporation power, in the light of the wider experience which may be available at that time, to go in for hovercraft. I hope that the Minister will adopt a different approach from that of his predecessor.

Photo of Mr Richard Marsh Mr Richard Marsh , Greenwich

This is an argument of some principle. I cannot begin to understand why the National Freight Corporation, which is being charged by Parliament with the task of carrying freight, should be limited in the types of vehicle it may use to transport that freight. There is no intention at present of the Corporation buying vast quantities of hovercraft. As a commercial entity, it will not be its duty to pursue forms of activity other than those designed to produce a commercial return.

As the hon. Member for Bodmin (Mr. Bessell) says, the hovercraft is a new and significant development. Already a cross-Channel hovercraft service is being started and, since the hovercraft has a very large passenger-carrying potential, the potentialities of this vehicle for freight carrying must be considered. We are merely saying in the Bill that this is a "vehicle" for the purposes of definition. Thus, if the Corporation decides, in the light of developments, that the hovercraft has become a useful vehicle for its operations, it should be entitled to use it. It would be extraordinary to impose an arbitrary restriction on the use of hovercraft on land when there seems no objection to it being used at sea. This vehicle is capable of both.

This is obviously a matter of opinion between the two sides. I cannot conceive of any commercial undertaking being established with restrictions on the types of vehicle it may acquire to do its business. Given that the hovercraft is a brilliant experiment with vast potential, and remembering that very large hovercraft are coming into service across the Channel, there seems no reason why, should the same large hovercraft be found to be capable of freight carrying on a large scale, the Corporation should not purchase such vehicles and use them for its business. Why should we impose on a publicly-owned organisation a restriction which nobody would think of imposing on a privately-owned organisation?

Photo of Dr Reginald Bennett Dr Reginald Bennett , Gosport and Fareham

Having not been a member of the Standing Committee, I may seem somewhat ignorant about this. I fear that this may not simply be a matter of using hovercraft—and shipping can be considered in this connection, as it was on the previous Amendment—entirely for the carriage of freight. Because of the speed and general lightness of the hovercraft, it is more appropriate for carrying passengers, apart from special cargoes. Will the National Freight Corporation be entitled, among its other responsibilities, to carry passengers?

Photo of Mr Richard Marsh Mr Richard Marsh , Greenwich

No, not as a commercial activity.

Photo of Mr Peter Bessell Mr Peter Bessell , Bodmin

I am still somewhat alarmed by this. I fear that at some stage the Corporation may enter on an experimental service which could prove extremely costly. The Minister will admit that while British Rail's hovercraft services are at present carrying passengers, as well as a small amount of freight, those services are not profitable. Without passengers, I fear that the use of hovercraft for purely freight transportation would prove a very expensive business indeed.

I gather, however, from the right hon. Gentleman's remarks that it is not intended that the Corporation should, under existing conditions, purchase a fleet of hovercraft and commence operating them for freight transportation within the foreseeable future. He believes that the Corporation should have this reserve power so that if an economic and efficient method of transportation of freight by this means is found, it should not be inhibited from using the hovercraft. Although I am still not happy about this state of affairs, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.