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British Transport Commission (Fare Increases)

Volume 656: debated on Tuesday 27 March 1962

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(by Private Notice) asked the Minister of Transport whether he will give a general direction to the British Transport Commission not to proceed with its proposal to increase fares on all forms of public transport for which it is responsible.

No, Sir. In view of the Commission's expected deficit of £146 million next year, I should not feel justified in intervening to prevent these fare increases which have been authorised by the Transport Tribunal. Without the increases announced yesterday, the railway deficit would be even greater; and I understand that London Transport would be working at a deficit.

May I ask the right hon. Gentleman, first, whether he was consulted about these proposed increases? If he was not, should he not have been, in view of the national repercussions of imposing such increases? Secondly, as the estimated revenue from these increases will make no substantial contribution towards meeting the railway deficits, should not the Commission's proposals be viewed from a wider national angle?

The Government are imposing a pay pause on the ground that it is required in the interests of national economy and the export trade. Is it, therefore, not the clear duty of the Government, whilst they are doing that, also to do whatever lies in their power to prevent a rise in the cost of living and increased hardship for the millions of people who are the victims of their pay pause?

The Commission informed me of the scope of the proposed increases under its existing powers and also of the application which it was making to the Transport Tribunal, but there is no question of the Government's having to approve the proposals. The Commission's charging powers are determined by the statutory procedures of the Transport Acts, 1947 and 1953, and the Commission has a statutory duty to break even.

As for the pay pause, we have to remember that, pause or no pause, railway workers have had an increase in wages recently. Nobody in the House or in the country grudges them that increase. [HON. MEMBERS: "Oh."] But having granted the increase, the public, either as passengers or as taxpayers, must support it.

On the question of the national interest, British Railways, in 1961, lost £151 million, which is equivalent to 8d. in the £ Income Tax. On top of this, we now have this recent increase in wages and a reduction in hours. Therefore, I am bound to say that I do not consider it in the national interest that the taxpayer should pay the greater part of this bill.

Would my right hon. Friend not agree that a great many electors have been suggesting recently that Government expenditure should be reduced? Would he not further agree that the public must understand that if public expenditure is to be reduced it is no good our going on subsidising the railways for ever and ever and that the public must pay the proper cost of running the railways?

Since the last fare increase, the working expenses of the railways have increased by £27 million per annum, and wages and shorter hours account for £21 million, or 80 per cent. of that total. To the £27 million, fare increases will contribute £6·14 million. Unless the railways make economies, or obtain increased revenue from other sources, the taxpayer is bound to pay the balance.

Will the right hon. Gentleman explain to the House his reluctance to interfere with the statutory machinery which governs increases of fares, bearing in mind his enthusiasm for interfering with wage negotiating machinery in order to keep wages on a downward grade?

Is the right hon. Gentleman aware that there is still a 1d. fare in Middlesborough? Is it not time that there was a public inquiry into how the Government and the top executive of the Transport Commission are running affairs and that the workman should not always be blamed?

Would my right hon. Friend not agree that we should be likely to get more revenue if he could get the Transport Commission to reduce fares for long-distance travel and so fill the trains and not run them half-empty?

Would the right hon. Gentleman agree that there is no prospect in the foreseeable future, and perhaps for ever and ever, amen, of the railways paying their way? As the railways are, I imagine, in the opinion of every hon. Member, indispensable, may I ask whether it not about time that the Government considered making them a social service and meeting the cost?

I think that the great need is to get the railways into the right shape suited for modern transport conditions and to take those traffics that they are best suited to take and not have the traffics which cause them a huge loss. The present Chairman of the Commission is carrying out some traffic studies, and at the end of the year we shall know what traffics are best suited to the railways.

Is my right hon. Friend aware that he told me a fortnight ago that the loss this year would be £151 million and that he said today that the loss next year would be much heavier? How much heavier? Was Dr. Beeching's figure of £165 million yesterday, at Plymouth, a correct figure, and is that before the rail fares were increased or after?

The £151 million refers to the loss on the railways. The loss to the Transport Commission is £146 million, because the Commission made £5 million on ancillary trading. This is for last year. Next year is an estimate only, and it is extremely difficult even for an ordinary private or public limited company to assess accurately what its net profit or loss will be for the next year. The figure which I quoted to my hon. Friend was before these increases, but after allowance had been made for the shorter working week.

Is the right hon. Gentleman not aware that there is great danger that by these increases the railways will be completely priced out of the market on many routes for passenger travel? Would he not agree that it is quite hopeless today to envisage a situation in which the railways would break even, after allowing for even the greatest contraction? Does he not think that the railways should be used according to the country's economic position and to help the country in the broadest possible sense?

For instance, to compete successfully in foreign markets would it not be a great asset if we could get goods to the ports as cheaply as possible and thereby possibly sell those goods more cheaply abroad? The right hon. Gentleman should face the fact that a cheap fares policy has never been tried in this country.

It has not helped industry that it has had to finance a loss of over £150 million on the railways, which is equal to 8d. in the £ Income Tax. If we make this service free or a social service it is obvious that the deficit will be even more. The best thing that we can do is to wait until the Chairman of the Commission has finished his studies. We shall then see what size and kind of railways system we really need.

Is it not a fact that during the last fifteen years or so British Railways have given the public worse service at increased cost, with gigantic losses? Is it not typical of a nationalised industry? Why does my right hon. Friend not do away with the beastly things and turn them into roads?

There are only certain railways that could be turned into roads usefully, and in suitable cases we are doing so. I would not like to turn all the railways into roads, especially the ones to Knutsford, because then I should be denied the privilege of the weekly letter from my hon. and gallant Friend about it.

Order. We cannot debate this matter without there being a Question before the House.