The Bill Passes Secom 'Reading on 362-204 Vote T HE second
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day's proceedings in the debate on the Transport Bill in the House of Commons (December 17) were concerned mainly with compensation. Most of the time was occupied in discussing ,the proposed compensation to railway stockholders: Mr. W. S. Morrison said that more than a million railway stockholders and 50,000 road-transport operators were affected by the Bill. "Few of these people," he added, "have committed the crime of being moderately well off or rich, as far as one can be in these days. Many of them have incomes lower than that of an M.P." It would be a dreadful thing if Parliament should be guilty of injustice to this section of the people.
The Government was abandoning the role of referee and joining actively in the game. The rules were constantly changing and the Bill added to the confusion by offering four different systems of compensation.
He quoted two cases to show the hardship that would be caused to roadtransport operators. One instance was that of a concern owning 250 vehicles. The business was started by the grandfather of the present owner and the savings of three generations were wrapped up in it. The profits were estimated, for the purpose of the Bill, at £19,000 a year, less tax.
£15,000 Income Lost
The present owner would receive not more than £25,000 for his vehicles and £30,000 for his other property. If compensation for the cessatipn of business were based on the maximum* of five years, £95,000 would be paid under this heading, making a total of £150,000. Stock bearing 2.4 per cent. interest would yield £3,750 per year, and the owner would be faced with a loss of yearly income of £15.250.
Another operator whose average profits were £1,747 a year would receive on the basis of three years' purchase, a total of £9,770 for his business, vehicles and -other property. At 2i per cent. he would earn £244 a year, and lose £1,503 a year as a result of nationalization. The man's son had recently left the Forces and would have no business to go to.
Mr. Dalton, Chancellor of the Exchequer, devoted his speech chiefly to the compensation proposals of the Bill. He said that he was prepared to defend the decision relating to the railway stocks, both as regards the principle and its practicable application.
Both the passenger and freight services of the railways were falling off fast, he said, and this year there must be a deficit. It could not really be supposed that the Stock Exchange was seriously under-valuing railway stocks. The credit of the Government was being placed behind the whole of this stock. and it was for this reason that a smaller income was derived from an equal capital sum. He pointed out that even railway stockholders who had not received a penny in dividends since. 1926 would receive some compensation. The Government stock would be freely negotiable.
"Compensation Generous"
"The road haulage proposals for compensation are really very equitable and generous," said Mr. Dalton, As regards local authorities, the Transport Commission would assume liability for the interest and sinking-fund charges for the net debt. The simple justification for the net-debt basis was that one public authority would be taking over from another.
Sir Hugh O'Neill said that railway securities had been grossly depressed a recent years because of road-transport competition and fear of nationalization. If the railways were left to themselves. and taking into account the road-rail agreement, they should q,arn enough revenue to pay reasonable dividends on even some of their most junior securities.
Sir Hugh suggested the payment of compensation by means of a terminable annuity. He recalled that the present Prime Minister, addressing railway stockholders in January, 1937, said: "So I believe you will find, when in due course you cease to be railway stockholders, that the community will make a very fair bargain with you, and that it is to your interests that that should happen." Also, "I think you will find that a Labour Government will give you proper compensation."
Sir Hugh commented that he thought it was manifest to the whole country that, at any rate, a very large proportion of the people did not consider that proper compensation was being given.
Severn Bridge Obstruction
Mr. Jay, referring to the Severn Bridge scheme, said that might have proved of great benefit to millions of people in South Wales, but before the war it was opposed by the Great Western Railway on the explicit grounds that it would injure the profits of private stockholders.
"It is that system we mean to change," Mr. Jay added, and continued: "The basic case for the nationalization of transport is that one will never get really efficient co-ordination and cheapness without unification."
Mr. Jay said the principle of licensing road vehicles was introduad by a Tory Government, and it was perfectly true that licences would be granted under the system that the Government was now proposing. Referring to compensation stock, Mr. Jay said that individual shareholders could buy a life annuity which would certainly give them a higher income than they had before.
Mr. Renton said the Minister would have to purchase expensive land to accommodate depots for vehicles. These would require labour, money, and materials. Would they take precedence over housing?
Mr. G. R. Strauss, Parliamentary Secretary to the Ministry of Transport, resuming the debate on the Transport Bill on Wednesday (December 18), said it might be of interest to compare some of the telegrams which had been received in different sections of the House. He referred to a document sent out by the Road Haulage Association, which, he said, gave specific and curious orders as to the wording of telegrams. He then read: " On the morning of December 17, without fail, send a telegram to your M.P., Conservative, Liberal or Socialist, condemning the Bill. You should remember that all Conservative M.P.s are on our side and word your telegram, therefore, more politely to them than to the supporters of the Government."
" No-Alternative "
The general charge against the Government was that it had brought this nationalization measure unnecessarily, purely or mainly because of political prejudices. He invited the House, at the outset, to disregard all preconceived theories and to consider the future of transport objectively. He thought it was most significant that, so far, no alternative had been put forward.
If the Government were to let the transport industry sink or swim by itself Without any change, most of the industry would sink, and probably drag with it, metaphorically, our coastal shipping industry.
Every authority agreed that something must be ,done with the transport industry. The Suggestion that the real solution was more competition would, he thought, only bring about the conflicts of the 1930s, but far worse than before. There would soon arrive anarchy in the transport industry and more competition would be contrary to the views expressed by every Conservative Minister of Transport during the past 20 years.
Road-rail Plan " Unsound "
Recently art attempt was made by leaders of the road and rail services to devise a formula lo-relate their rates to each other in such a way that both would be able to nay their way. Their solution was, in effect, an elaboration of the earlier Transport Advisory Council's scheme, and equally unsound and impracticable.
Mr. Strauss, referring to one suggestion which had been made, said that the Road Haulage Association had stated:
The significance of the new proposal, in so faras rates were concerned, is that, for the first time, road costs are being recognized as the deciding factors in bote road and rail rates for the future, and both sides recognize that the rail
way companies would have to adjust their rates to road costs."
Mr. Strauss said this meant that 48,000 hauliers would have to observe the specified, scheduled and standard conditions of carriage which the industry was to draw up. It would be • impossible to make sure that every haulier observed these conditions. It would require an army of snoopers to make • the proposal effective, and the House would certainly not tolerate that.
The only alternative was unification of transport services.
There was no intention that there should be Ministerial interference in the ordinary daily management by the executives, but " It was essential in a public transport system that the Government, in the national interest, should have the power to interfere if necessary."
Mr. Strauss said that if the small industrialist who could not afford, or
Efficient Service
did not, for some reason, own his own lorries was to enjoy a cheap transport service from the British Transport Commission, the Commission had to become the carrier of long-distance traffic.
Service for Traders " Generally, it will be the object of the Commission to provide the services which traders require, and to provide them so efficiently as to be able to show that traders' own vehicles are neither necessary nor economic," Mr. Strauss added.
Of the demand for an inquiry before the Government proceeded with the measure, Mr. Strauss said that no industry had been so frequently and thoroughly inquired into as transport, and the general upshot of these inquiries had been the desirability of some form of unification.
Sir Arthur Salter asked whether the Government really believed that it was going to get better and' cheaper transport as a result of this scheme. The test was the Government's attitude toward the C-licence holder, and if the Government believed that transport was going to become less convenient and dearer, the only escape was to deprive the trader of any alternative by preventing him from carrying his own goods in his own vehicle.
" The fact is," Sir Arthur added, " the Government dare not face the test." The measure was an example of the worst type of bureaucracy.
Mr. P. Thorneycroft regarded monopoly of transport as likely to injure the interests of the consumers and users. Instead of imposing more restrictions on the road hauliers, the Government should remove some on the railways. It should let the road. hauliers run their own businesses.
Disagreement on Figures Col. Dower declared that the Minister had said that there were between 2,000 and 2,500 concerns engaged in longdistance road haulage which would be taken over. He had checked the number of companies engaged in longdistance work—primarily over 25 miles—and he estimated that there were more than 10,000.
Mr. Anthony Eden, winding up the debate for the Opposition, said: "This is my forecast: the executives will be too strong and the Transport Commission will prove too weak. I think that the Government are assuming an immense vested interest in the railways, financial and political, and there will certainly be great pressure upon them to ensure the prosperity of the railways,, even at the expense of essential rival means of transport, especially road transport."
Speaking of A and B-licence holders, Mr. Eden said: "The only conclusion 1 can draw is that the Government want to put the private haulier entirely out of business." The Bill was ill-conceived, ill-considered and ill-timed. He added: "This Bill, if it passes into law, will be nothing less than a major national disaster."
Fear for Railways
Mr. Herbert Morrison, Lord President of the Council, replying to the debate, said that it ought to be admitted that patchwork would not serve any longet. "If there is going to be real competition between road and rail, then the Government and Parlianient will find themselves with the railways, and possibly parts of road transport, on their hands in a sick condition," he declared.
The Commission would be able to put in hand a bold and considered programme of transport development, which would have been utterly impossible under the conditions of the transport industry between ti e two
wars.
What we are not going to d t, concluded Mr. Morrison, is to social ;ze the railways and then leave them to be the victims of cut-throat competition.
A Government motion to close the debate was carried by 362 to 205 votes and the second reading was carried by 362 to 294.