7.39 p.m.
Mrs. Margaret Thatcher (Finchley)
We are debating this Bill on the same day as Greater London Council has been debating it on the other side of the river. Richard MarshThe Minister said that he thought it a non-controversial Bill and of course it is, in parts. I understand that Mr. Ted Castle, on the other side of the river, referred to it as the product of a shotgun marriage—evidently between his wife and Mr. Desmond Plummer. One would expect such a Measure to have in it some [column 1255]things objectionable from our point of view and there are one or two things which we shall have to contest in Committee, but I do not think anyone will quarrel with the main purpose, although there is often a vast difference between a purpose and the method of achieving it.
The purpose of the Bill is to achieve a new concept in transport planning so that all aspects of transport, cars, buses, railways and parking can be related to each other and to the disposition of office blocks, factories, shops, houses and the routes taken by people to get to work. This obviously has to be carefully co-ordinated with land use. This should be the first experiment in co-ordination on this scale that we have ever had.
I shall go through the points I wish to raise rather more quickly than I had intended because a large number of hon. Members wish to speak in the debate. The Minister pointed out that the first duty of the Council is to make a transport plan. It also has to make other plans. One is due next year—a general development plan. I wish to sound two notes of caution. In making any transport arrangements I should have thought that the easiest part was to make a plan. Only when one has made a plan and published it do the real problems start because then one has to go through all the democratic processes and none of us wants main roads through our constituencies; we all want the advantages without any disadvantages. The difficulty is not in the making of a plan but in what happens afterwards.
My second note of caution is this. It may well happen to the G.L.C. as with the concentration of powers in any organisation that it becomes too cumbersome. It could then be as difficult to achieve co-operation between the constituent parts of the whole as between different organisations. We should be well advised not to expect too much in the early stages of the development of this concept.
The Minister selected certain parts of the Bill and commented on them. I should like to follow him in some ways and to refer to one of the main features of the Bill, the transfer of London Transport to the new Transport Executive. I shall make my comments under [column 1256]the following headings, financial arrangements, duties, and powers. On the financial arrangements the right hon. Gentleman let off a little bombshell very quietly. Because this debate has come rather later in the day than we expected, the bomb went off without much of an explosion. It referred to fares, but I will deal first with the capital side. We are bound to look at this matter differently from the G.L.C. Quite rightly, the council's primary consideration has been that any extra burden arising from the Bill should not fall on its ratepayers. That is the angle from which the council should and did look at that matter.
We are transferring a great undertaking from one ownership to another and we have to look at it, not from the point of view of London's hon. Members, but of the nation as a whole. The Minister skated very quickly over some enormous figures. He pointed out that in capital we are transferring an undertaking for approximately one-tenth of its capital value. That is a very astonishing figure. We are writing off £244 million, but let no one be bemused by the easy phrase, “writing it off” . It may be written off so far as concerns the G.L.C. and the Minister, but what remains when this accountancy transaction has taken place will be a block of Government securities of face value £244 million but worth nothing more than the paper they are written on, yet still drawing interest at the rate of £11 million a year.
I stress this because it is a literal example of how money invested in nationalised undertakings can become worth no more than the paper it is written on over a few years. The general taxpayer has to find that £11 million every year to service the Government securities. It will mean a permanent subsudy to London of £11 million a year from citizens over the rest of the country. Obviously we look at this differently from the G.L.C. No doubt London hon. Members will be delighted that this slice of capital has been written off, but it is not the only slice. If we add all the others written off by nationalised industries the sum comes to something in excess of £2,000 million—paper securities of £2,000 million no longer represented by assets.
I knew that if I did not bring this into the debate no one on the Government [column 1257]side would do so, but it is a serious point. The Minister no doubt thought extremely long and seriously before transferring assets worth £270 million for a sum of £27 million, which is considerably less than the capital spent on those assets even in the last two years. He has written off the cost of the Victoria Line before it has come into operation. If Shell or I.C.I. said to a rival that it would sell off the whole of its works for one-tenth of the value, the shareholders would be after them—[Hon. Members: “Oh!” ] Normally one sells only a bankrupt undertaking for one-tenth of its value.
Mr. Marsh
Is not the logic of what the hon. Lady is saying—although I am not sure whether she is reaching a conclusion—that the only conclusion she can reach is that the fares increase ought to be twice as high as it otherwise will be?
Mrs. Thatcher
No, the conclusion I am reaching is that this is a Bill which the Minister is presenting to the House with his approval. It is for him to justify the action he has taken. I hope that R.C. Brownthe Parliamentary Secretary will justify that action in this light when he winds up the debate.
Usually when one sells an undertaking or transfers it at vastly less than capital value it is because the capital value has been lost, as in the case of coal mines which have been closed. The capital is no longer revenue-producing. The Minister mentioned the Blue Paper which points out that it cannot be said that the assets should be written down to anything like the new capital value. Indeed, the Blue Paper goes out of its way on page 57 to point out that it cannot be argued that the bulk of depreciable assets
“are no longer capable of earning their keep.”
So the Minister is giving something valuable away for something very much less than its real value.
It may surprise the Minister to know that he is one of the first practical exponents of denationalisation by the Powell principle. If he reads the speeches of my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), he will see that this is one kind of denationalisation which my right hon. Friend was advocating. I have some very pithy quotations with me, but time is [column 1258]short so I will not read them. I commend them to the Minister. I warn him that this will be a very useful precedent when hon. Members change sides in the House and we consider denationalisation proposals. We shall remember the action taken by the Minister and consider it possible to denationalise undertakings at less than their book value.
Mr. Newens
Does the hon. Lady agree that there is a vast difference between transferring assets from one public authority to another and retaining them in public ownership and the transferring of assets to private ownership? Will she also agree that private enterprise is subsidised to the extent of over £2 million a day? When she is talking about how public enterprise is to be subsidised should not this be borne in mind?
Mrs. Thatcher
Private enterprise pays an enormous amount in taxes to subsidise other services. It does not make any difference whether one transfers from one public authority to another or to private enterprise. There is still a block of securities to be serviced and unrepresented by assets. I see that I have stimulated some interest in this matter which is more than the Minister did for quite a long time in his speech.
I come to some of the revenue provisions and to the Minister's description of viability when he said that we are to have another reference to the Prices and Incomes Board. This is not the first reference to the Prices and Incomes Board. The first time the reference was made, the recommendations of the Prices and Incomes Board were not followed. The Government made a reference which the Prices and Incomes Board reported on in March 1968 and the recommended increases did not then come into play.
On the first reference, the London Transport Board wanted a further £8.6 million. The figure is not very different from the figure mentioned by the Minister today. This was the point I wished to get across. The £8.6 million meant a 14 per cent. increase in fares. The Minister has agreed to make another £8 million available to make London Transport viable before it is handed over. That probably means an increase in fares, unless the structures are considerably changed, of 12 to 13 per cent. That is the kind of thing which he announced [column 1259]today, but he gave no indication of how large an increase in fares might result from his figures.
It was interesting to note in the last Report of the Prices and Incomes Board that a 14 per cent. increase in fares only produces about a 9 per cent. increase in revenue. That is because by increasing fares a number of passengers are lost. Undoubtedly, what the Minister said will come as a shock to many travellers on London Transport.
Last time a reference was made, the Prices and Incomes Board listed four steps which might be taken to put the revenue up without recourse to further fare increases. First, making good losses from fraud; secondly, improved marketing; thirdly, cost reductions, such as the rescheduling and re-routing of services, the introduction of buses with one-man operation, which is already going ahead, and revision of existing agreements with the unions affecting overtime and working conditions; and, fourthly, reduction in non-productive and administrative workers. Even so, the Board came to the conclusion that £8.6 million at that time might not be enough and the Government granted less than the full increase. I sometimes wonder whether it would have been better if they had granted the full increase, because we might have got away without a massive increase on this particular round.
Mr. Marsh
It was not the Government. It was the Transport Tribunal, which is an independent judicial body.
Mrs. Thatcher
Perhaps I should just say that the recommendations of the Prices and Incomes Board were not accepted. Is the Minister saying that the data given to the Prices and Incomes Board are to raise a further £8 million per annum by increases in fares and revised structure in fares and that he will accept its recommendations? Is that what he is doing to make London Transport viable before it is handed over? Apparently we have now got it clear that he is bound to accept the Board's recommendations.
Mr. Marsh
No. With respect, the hon. Lady cannot bind the Government to accept anything which it has not seen from an independent body. It depends what it says.
[column 1260]Mrs. Thatcher
I wonder what the Minister is bound to do. He has put in a reference to the Prices and Incomes Board that it should make recommendations which will raise £8 million out of increases in fares. I think that we are agreed on that. The Minister said that the fares will probably be increased as from autumn next year. That will be about a year after the previous fare increases.
That completes the financial arrangements on the change over, capital and revenue wise—writing off nine-tenths and increases in fares of probably about 12 or 13 per cent. to produce the necessary income.
Some of the other aspects of the change over from the present Board to the Executive concern a change in duties. Under the old Act, London Transport had a duty, first, to provide an adequate service and, secondly, to break even. Under the change of ownership there will be no duty to provide an adequate service, but services which best meet the needs for the time being of Greater London, and the over-riding objective will be a financial one. That is, the Executive must not make a deficit two years in succession. The second year it will have to make up for the deficit of the first year and it will have to make sufficient to meet the outgoings in the second year as well.
I wonder whether I might question the Minister further on the financial objective. He said that if the Council decided that the Executive had to operate services which would make it uneconomic, the Council would have to provide a subsidy from the rates. What happens if a closure is put to the Minister and he decides not to grant it, nor to grant the money to keep the line open? The Minister has only taken discretionery powers to make a grant of money in lieu of a closure. He cannot be compelled to grant that money. One of two things would happen. Either the G.L.C. would have to make the grant from the rates because of the Minister's refusal to grant the closure, or the deficiency would have to be found by other transport users. Therefore, he is still taking—does the Minister wish to interrupt?
Mr. Marsh
No. I thought that the hon. Lady was making a comparison with a P.T.A.
[column 1261]Mrs. Thatcher
I thought that the Minister was trying to draw differences between the P.T.A.s and the G.L.C. It does not leave the latter totally free. They have to face the consequences of the Minister's action in the way they run the transport services.
Concerning powers, we are bound to come up against a little controversy, as the Minister indicated. I understand that earlier this afternoon the G.L.C. passed a recommendation in the following terms:
“That the General Purposes Committee do take such action as may be necessary to secure the amendment of Clause 6 of the Transport (London) Bill 1968 to ensure that the powers of the London Transport Executive to engage in manufacture and trade are restricted to the minimum necessary to enable it to perform its statutory function as a public transport undertaking.”
It is clear that at the moment the G.L.C. does not wish to have the extensive manufacturing powers granted to it under Clause 6.
I should like to make one or two comments about those manufacturing powers. The Minister will expect us to oppose some of them. The right hon. Gentleman referred particularly to the construction, manufacturing and producing powers in Clause 6(1)(i). I have one special comment to make about those powers. Although certain of the other powers under that Clause are subject to the sanction that they should be run on commercial principles, there is no direction that the manufacturing powers should be run on commercial principles. The subsection is excluded from the sanction. As the Bill stands, it will enable the Executive to compete on an uneconomic basis with private industry and to deal with its subsidiaries and the other authorities on preferential terms. When the Parliamentary Secretary winds up the debate, if the Minister is giving these extensive powers, will he say why he is not asking the Executive to run them on commercial principles?
The Minister also referred to Clause 20. I understand that the second part of Clause 20(1)(b) gives the Council power to direct the Executive virtually to take over any transport service or facility which for the moment is being provided by someone else. There is no protection that I can see for any private operator or anyone operating car park facilities in Greater London, because, under this [column 1262]subsection, the Council could direct the Executive to take over those facilities, and there is virtually no protection.
The Minister also referred to one or two other changes between the old London Transport Board and the new London Transport Executive. One is that the general powers will be vastly increased, because the G.L.C. will be able to operate services, so far as I can see, from here to the end of the world if it wants to do so. These are the most extensive powers which I have ever seen in legislation and I do not know whether there is any precedent for this Clause.
Clause 6(1)(a) says that the Executive shall have power
“to carry passengers by any form of land or water transport (including in either case hovercraft) within, to or from Greater London;”This does not seem to fit in entirely with the principles in the Blue Paper that the area over which the new authority should operate should be smaller than the area over which the old L.T.B. operated. Paragraph 48 of the Blue Paper said:
“The area served by the London Transport Board is much larger than Greater London. But the Government consider that the area in which the new Executive should have responsibility for public transport operations should in principle be Greater London.”
The “principle” of Greater London was translated into, almost, the greater world. That at least is one respect in which the Blue Paper was not followed when it was converted into this green Bill.
The Minister will understand that we shall have to take up some of these matters further in Committee. I want to deal quickly with the relationship with British Railways because we had a debate recently on commuter services. The right hon. Gentleman has announced references to the Prices and Incomes Board with regard to London Transport. Does it follow from what the Board said at the beginning of its Report last time that similar increases will be made for British Railways services operating in the London area?
Normally, the principle is that British Railways fares are assimilated to London Transport fares. There is no question of viability arising from takeover, obviously, but in the White Paper, we are told that the London commuter area services are treated as a network and that the object is to achieve viability [column 1263]by 1972. So the same phrase is coming in with regard to British Railways services in London as applies to London Transport. They must be viable by 1972, although British Rail will itself determine the fares in consultation with the G.L.C. Does the Minister expect that viability there will mean the same as viability in the London Transport area, and will mean that fares will go up?
I turn now to the Bill's effect on the motorist. We agreed the other day in our debate that it is advisable to attract some peak-hour travellers out of cars on to the public transport, but the word was “attract” , not “compel” , “coerce” or “force” . We are now getting a less attractive public transport immediately, from the prospect of the fares increase. At the same time, the Minister is bringing in a Bill which gives very extensive powers over parking. So we will have less attractive public transport and very powerful measures over where motorists may park in Greater London. This means following policies which attempt to force him from his car onto public transport.
I refer particularly, of course, to the off-street car-parking provisions of Clause 36. Again, the Minister skated very lightly over this, saying only that the G.L.C. wanted licensing powers. This is obvious, but it is what he has tacked on to those powers which goes far further than licensing. He has not merely included powers to license off-street parking but has tacked on considerable powers in that Clause as to exactly how a particular car-parking facility should be used, what time it should open and close, and the availability of staff to supervise the parking place. He has taken powers over the accounts and other records to be kept, and to enter and make copies of or take extracts from any accounts or other records kept in connection with the operation of that parking place. These are draconian powers and are quite unnecessary if all he wants to do is have the power to licence car-parking facilities.
I notice that many of the motoring organisations and National Car Parks, which has about 100 car parks in London, are protesting vigorously about this. I am sure that the Minister will agree that, until now, they have co-operated both with him and with the local authorities in every way to produce the required kind of [column 1264]off-street facilities and that they have particularly co-operated with Westminster recently in the provision of the kind of facilities needed in that area.
Some of these powers seem far too extensive ever to be taken in a Bill like this. I notice that the R.A.C.—
Mr. Leslie Huckfield (Nuneaton)
Would the right hon. Lady also agree that National Car Parks have not really co-operated with the public?
Mrs. Thatcher
I have always found them very co-operative with the public whenever I have used their car parks. Even if the hon. Member's remark were true, it does not seem a very good reason for the powers taken in this Clause.
According to a document sent to us this morning by the R.A.C.,
“Similar proposals have previously been made by the Glasgow Corporation in a Provisional Order presented to Parliament last year, but these were withdrawn after the motoring organisations had petitioned against this objectionable scheme.”
I hope that some of the powers now will be considerably reduced.
I hope that the Parliamentary Secretary will also report to us on some of the other matters with regard to parking which were published in the Sunday Times of 1st December, 1968. It was said that an Amendment was expected to this Clause to widen the powers over parking not only to the licensed car parks but also to the West End hotels, and that the Amendment would include some control over the use of their garages. This is absurd and is taking control much too far. It will not help the motorist and I do not find the idea attractive of a Ministry or any official being able to differentiate between an essential and non-essential parker.
The object is to stop long-term parking and turn everything over to short-term. It is all very well for us to agree to that—I do not necessarily agree—but we at least have long-term parking facilities here, so we should not—[An Hon. Member: “We are very lucky.” ] Yes, we are very lucky, but we should not necessarily stop the provision of this same thing for other people when we need it so much.
The Londoner will not look at the powers in the Bill, the integration, the co-ordination or even the change of ownership. What he will want to know [column 1265]is whether the buses will run better and the trains will run on schedule, and whether he will get better facilities to take his car into London. He will probably still write to his M.P. to complain. I take it that he will now have to write to his G.L.C. councillor or to the consultative committee of the G.L.C.
I sometimes wonder whether councillors, who are voluntary after all, know what they are letting themselves in for with the very extensive postbag which they will get from London Transport users. The consultative committee which is to be set up has no power over fares or closures, but we shall of course have to tell compainants, “The powers no longer reside in us but with the G.L.C., except in so far as the Minister still has residual powers.” We shall be passing great powers not only to councillors but to officials, because councillors have not a great deal of time and people over there have not yet got much experience—they cannot have—of running transport concerns, as distinct from traffic management.
In theory, if the Ministry of Transport staff contains people who were dealing with London Transport, that staff should be reduced and the Greater London Council staff increased by the same number. I hope that there will not be an increase in G.L.C. staff without a reduction at the Ministry.
The Bill undoubtedly provides a great opportunity for planning improved transport services in London. We shall object to some of the powers and attempt to modify others. But the Bill will not be judged by the public on the general plan. In the end, we and the public will have to judge on the results, and they will take a long time to achieve.