I stand on my belief that we should have the cheapest and best form of public transport possible, whether by rail or bus or in the air.
Deputy Dr. Browne made a very long speech and I will cover most of what he said in my prepared statement, but I should like to say that there are quite a number of socialists in Europe who believe that State companies should pay and that it is extremely bad for socialist morale for State companies not to pay. The people, they say, should be prepared to pay for State-run services. Losing State companies are bad for socialist morale. They say that because a company is run by the State it should be more efficient. It does not have to make profits unless they are ploughed back into the business; it does not have to pay dividends to private shareholders. Therefore, it should be more efficient.
Other socialists believe that any equalisation that needs to be done in order to make all the services in the community available to the whole community should be done through social services and that that should be the main objective and that it is confusing the whole issue of socialism to have all sorts of subsidies by which the community subsidises one part of the economy and, as a result, pay more taxes and are unable to support another part of the economy. I have read a great deal about socialism and socialist theory and a great many socialists think it is tremendously important, particularly in a capitalist world, that from the very beginning any State company should pay its way even if it causes some difficulty. I merely mention that in passing.
I think it would now be well for me to read my statement which covers the whole question involved in this Bill. This debate has been conducted by Deputies most of whom have ignored the Taoiseach's speech in 1958, when he clearly linked the 1958 Act with the Beddy Committee Report. The Report made it clear that there would have to be drastic reorganisation and a reduction in railway staff, whose numbers per million passenger miles and per million ton miles of freight were two to three times the European average and hopelessly excessive.
No one approving of the Act could be under any illusion as to the volume and scope of drastic reorganisation required.
The extremely liberal redundancy provisions, in relation to which I have had no complaint, were an absolute pointer to the serious steps required to be taken. Deputies have forgotten that 438 miles of line had been closed prior to 1958 and that those lines generally speaking were comparable in their economics to the present position of the lines now being considered for closing.
The subsection of the Transport Act, 1958, which the enactment of this Bill would delete provides in effect that CIE should become self-supporting not later than 31st March, 1964. That subsection replaced subsection 15 (2) of the Transport Act, 1950, which in effect required CIE to become self-supporting forthwith. The provision in the 1958 Act is, therefore, a more realistic one, being based on the expectation that radical reorganisation of the undertaking which the Board was being empowered to put in train would in fact enable them to break even within five years. No statutory direction of this kind to achieve a particular target, however sensible or realistic, can of its nature be mandatory. It is, rather, an indication to the Board of CIE of what the Government and the Oireachtas expect them to achieve. It was a target which was at once more realistic and inspiring than the very indeterminate provision which it replaced. The effect of deleting this provision from the Transport Act 1958, would be to remove all statutory incentive to CIE to break even. It would indicate to the Board that the Oirechtas had no interest in its financial results and would, presumably, be happy to vote subsidies freely to meet whatever deficiencies CIE might incur. While there may be an arguable case now or later for amending or modifying this section in some very limited respect, to delete it altogether is just plain silly. The proposal is just another example of the extent to which ill-digested socialist notions have fuddled the heads of the authors of the Bill.
The best justification of this section of the 1958 Act is that up to now it has proved to be a moderately realistic one. The progress achieved by CIE has been far better than anyone could have reasonably expected in 1958. By 31st March, 1961, CIE had reduced their annual deficit from almost £2,000,000 to £246,000 and the Board had high hopes that the undertaking might break even in the year ended 31st March, 1962. In the event, the eighth round of wage increases, which, together with an associated improvement in working conditions cost the Board £2.35 million per annum, could not be met by a corresponding increase in revenue and the annual deficit reached the figure of £1,696,000.
The eighth round has fallen more heavily on CIE than on most industrial undertakings. This is, first, because wages and salaries form a very high proportion of outgoings in CIE and, secondly, CIE have been unable to recover more than a proportion of their increased costs by increased rates and fares. This is so because public transport has no longer the monopoly it once enjoyed. It is in fierce competition with private transport—with the growing numbers of lorries and tractors, private cars, scooters and mopeds. The present prospects are that CIE results for the current year may not be substantially better than last year. The Board, however, are more hopeful for the long term and have by no means abandoned their aim of achieving solvency by 31st March, 1964, after which date the present subsidy of £1.175 million per annum ceases to be payable.
Criticism of the target set for CIE by the 1958 Act appears to be related partly to the necessity to increase charges to meet outgoings and partly to the closing of uneconomic rail services. So far as fares and rates are concerned, Dublin fares are comparable with those in British provincial cities.
To maintain them at their present level there must be increased efficiency and services must be tailored remorselessly to true demand. The Dublin services compare very favourably, both in price and comfort, with many Continental services, where seating is provided only for relatively few of the passengers. Provincial fares are comparable with those in the Six Counties and relate to the low density of population. Our railway fares are more or less on the same level as those in Britain. Moreover, CIE's liberty to fix rates and fares entirely at their own discretion is very much limited by the impact of competition from private transport and, indeed, this competition has kept rates and fares below the level at which there would be sufficient to meet outgoings. CIE must, by increased efficiency, reduce costs and streamline their services to meet the challenge.
We have had to subsidise CIE very substantially over a period in the hope of getting the undertaking properly on its feet. At no stage, however, has the Government or the Dáil ever contemplated a situation in which the undertaking would be permanently in receipt of subsidies. I know of no reason why, in principle, transport should be subsidised. It is no more essential to the public than many other commodities or services which no one would dream of subsidising. It remains firmly the Government's policy, therefore, that CIE, like other State bodies whose task it is provide productive services, should pay their way. Deficit financing of the kind envisaged by the authors of this Bill would be as bad for CIE as for the public.
Subsidy inevitably breeds inefficiency and encourages excessive staffing and feather-bedding and the whispering voice of "It doesn't matter; the Government will pay" is destructive of the morale of the staff, high and low. Subsidies deprive the taxpayer of capital, of purchasing power and of savings which he could otherwise put to better use. It is "robbing Peter to pay Paul" and while operating subsidies might maintain staff in uneconomic and non-productive services in CIE, they would deprive people of employment elsewhere with the new or expanded industries that the purchasing power or capital diverted to subsidies might have financed. May I point out that for every man employed in CIE as a result of an operating subsidy another man will be disemployed, or a young man or girl will fail to get employment somewhere else. Deficit payments leave their trail with irrevocable and implacable regularity.
I might mention in passing that we are all hoping that as a result of joining the Common Market the old system of agricultural subsidies will end. We in our Party, and I think it is true of the Opposition, have always preferred, in the main, in normal circumstances, capital subsidies from the community which are productive in character. No Government would want to pay current subsidies on the value of food produced, were it not for the fact that our trade relations are otherwise distorted.
May I also point out, in relation to what Deputy Dr. Browne said, that if he imagines that the rich alone in this country could afford to pay a subsidy to keep CIE going, he is very much mistaken. All subsidies are paid for by a very large section of the population and a very large ordinary section of the population pay the income tax of this country. The idea that they can be continued because on the whole the rich will pay them is not reflected in the accounts of the Revenue Commissioners.
It would, no doubt, be very simple to put 3d. a gallon tax on petrol or to increase the tax on tobacco or stout to find the money for further subsidies for CIE. But the very people who are now calling for subsidies would quickly cease their importunings if the Minister for Finance named a specific tax to cover an increased deficit. It is very desirable that the taxpayer should realise how heavy the bill for subsidising CIE has been since the last war. To meet the cost of losses, interest on transport stock and contribution towards capital expenditures, total State assistance to date amounts to £27 millions. The present cost to the Exchequer of written-off losses, that is, capital no longer to be remunerated by CIE, together with the present temporary subsidy, amounts to over £3 million per annum. I suggest that at the moment that is quite a sufficient subsidy for any transport services even for those who believe in it.
I have, on a number of occasions, referred to the whole question of CIE policy in regard to closing uneconomic railway lines. I will, briefly, give the facts again:
(1) There is nothing sacrosanct about a railway line. I want to be absolutely frank with the House about that. I and my colleagues in the Dáil have not got any sentimental feeling with regard to the value of a railway as such. In many places it is as out-dated as the horse. Lorries and buses can provide more convenient access to the factory, the farm and the home. For many commodities double handling of goods is now "out" and it is essential to provide for their transport by direct road or by means of pallets or containers and a combined rail/road service.
(2) In this country the scarcity of villages, the huge mileage of roads per 1,000 population, the low number of cars per 1,000 miles of road—and this holds good even if the number should be doubled—make the operation of short-haul secondhand lines a complete anomaly. Empty trains are a sign of decay—they prove the lack of modern, quick-change, dynamic thinking.
(3) The substitution of a handful of buses and lorries for a semi-derelict railway line carrying only a bus-load capacity of passengers cannot create any appreciable problem for the county councils. If, on the one hand, we take the cost of any necessary road improvements—and, as I have already said, the effect on the roads of secondary rail closures is slight— together with the cost of redundancy compensation, and on the other hand the saving to the railway organisation and the advantages to the community of the substitute road services, there are absolutely no grounds for disquiet as to the ultimate net advantage to the community.
The last three railway closings, as I have already said, involved less than thirty additional buses and lorries apart from some extra buses and lorries for peak traffic. The number of vehicles for the three counties concerned exceeds 50,000.
In fact the Minister for Local Government gave Road Fund grants which far surpassed the requirements for heavier traffic, because in every case there was a back-log of improvement work and to carry out certain improvements and not at the same time effect basic improvements in the immediate road system would have been wasteful and uneconomic.
(4) Numerous industries of all kinds all over Europe are independent of rail transport, but no railway line will close here where there is any likelihood that some important industry would depend on its survival.
(5) By 1970, at the 1951-61 rate of private car increase—I mention those dates, not the last two years—one in every eight people will own a car. One in fourteen owns a private car now. There are about 200,000 private cars and nearly 50,000 motor cycles, mopeds and scooters on the roads. There are 44,000 commercial vehicles, compared with the 950 road freight vehicles of CIE.
(6) The only purpose in preserving a rail system here is to provide fast, infrequently-stopping, long haul services for passengers and goods and to deal with peak and tourist traffic to main centres at certain times of the year. This necessitates the closing of stations in many places. The rail users are already compelling this change. It was said the other day that a rail service can be likened to a continuous fast moving conveyor belt. By this definition it is obvious that if motor traffic had existed at the time railways were built many branch lines would never have been constructed.
A number of stations will be closing on the CIE main lines in order to speed up express services. Average speeds on a number of the arterial lines will have to be increased to compete with private car traffic.
(7) The local authorities are, year by year, building wide arterial roads and CIE can only compete by closing minor stations and speeding up their buses and main-line trains. The Councils who protest against the closing of branch lines are constantly improving their road systems along railway line routes and have never given a solitary thought to the idea that railways would be a better alternative, for the simple reason that road transport is growing and along some routes is more economic.
Now to report on recent changes in the method of evaluation adopted by CIE: A proven system of estimating revenue and expenditure of every section of CIE rail services had been applied and the results indicate that the Beddy Committee predicted with great accuracy the lines that were likely to be retained. The present railway system, less the lines to be considered for closing, would generally conform to that indicated in the Report.
In order to compare trends here with those elsewhere, I have been following the position on the Continent and earlier this year had an opportunity to meet the heads of many important railways at an international congress in Munich.
The International Railway Congress Association, whose members in one sense have a vested interest in keeping railway lines open, has called for a realistic approach in regard to the substitution of road services for uneconomic secondary railway lines. The Association's view is that:—
"Equality in the conditions under which competition takes place implies that the railway be freed from the obligation to operate secondary lines with little traffic which are not profitable."
I am glad to say that the Association has accepted my invitation to hold its next meeting in Ireland in 1964.
In France and Belgium, both with areas of intense congestion, where, even if our population increased by 50 per cent. and the number of our vehicles doubled, there would be no comparable problem here, standards for closing have been adopted. In France, secondary lines have been marked for closing if the number of daily passengers did not exceed 350 and if goods tonnage did not pass 100 tons daily. The French standard for replacement has resulted in the closing of about 8,000 miles of line for railway passenger services and about 1,600 miles for goods services. In Belgium, the standard is below 1,243 passenger miles per day. A large number of secondary lines have been closed.
In the Netherlands, an intensely congested country with eight times our population per square mile, 67 per cent. of the passenger stations have been closed since 1939 and the railway service has been enormously speeded up. A big mileage of lines has been closed. All over Europe the same thing has been happening, while in the USA a similar pattern is emerging.
The railway administrations report that there are always protests, but that substitute services are invariably found to be satisfactory and that long experience over years shows that protests are largely of an emotional nature, because later events prove that in fact the railway lines were closed because the vast majority of the people in the area in their own wisdom preferred other means of transport. The advantages of the road services in these particular areas were selfevident:
1. In many instances goods are delivered at an earlier hour.
2. The frequency of delivery can, in many cases, be increased.
3. Service is given directly to many places not previously served by rail. The flexibility of road operations brings service to the door of many customers for whom the former rail service was often, perhaps, rather remote.
4. Lorry crews get to know their customers—can even anticipate their requirements—and the day-to-day contact with the men who are actually doing the job is a very real benefit to traders generally. This is in no way to depreciate the value of the railway services; for long and medium hauls the railway is still supreme. But I am convinced that the Board of CIE is on the right lines in its search for a dovetailed, complementary service, using its road and its rail arms with a flexibility that ensures the best service for the customer and avoids duplication.
There is nothing unreasonable about closing a railway line that is not patronised, provided that the taxpayers' and ratepayers' overall interests are safeguarded and that substantial improvements are effected by a more modern type of service. Retention of uneconomic railway lines is opposed to the kind of dynamic modern operation necessary to our future progress. I find that some extravagant railway devotees put forward the excuse that no railways pay. This is not true of a number of systems in different countries.
There are at least three railway companies in Europe which pay at the present time, and if one examines the figures of other companies and subtracts the additional pension and capital expenditure due to losses, it will be found other companies show they are able to cover their expenditure, at least to a 99 per cent. degree.
I should make it clear beyond all doubt that all the difficulties that arise from a decision to close a railway in a congested area of population—where the inhabitants are increasingly buying cars as the years pass—with the knowledge that people might be driven back to the railway because of extreme road congestion are absent in the present proposals by CIE. Our population — human and vehicular — can expand enormously in the areas where closings are likely without any problem of congestion in the European sense arising. All the arguments in favour of preserving a railway that is not patronised are those which keep us from looking forward. Conservatism in economic thinking is fatal. If the goods produced by one industry are too expensive the customers will buy elsewhere. There is a vast amount of unused capacity in private transport should the public come to find rail and road transport charges too high.
I next must give an account of the reorganisation work of CIE. As the House is aware, the present Board of CIE, using the freedom and fortified with the directives in the 1958 Act, has striven with the utmost endeavour to improve the organisation and the efficiency of the undertaking. One of its main concerns was the setting up of a commercial arm capable of selling energetically to take advantage of the commercial freedom given by the Act. Further, the management was decentralised to bring it into more personal relationship with local needs; to give quicker reactions to the public's requirements and to give greater scope for individual talents. Apart from these alterations in the structure of management, the work of continually seeking after greater efficiency of men, machines and techniques has been pressed forward. The measures taken include the following:
Complete dieselisation—I should say that the purpose of providing diesel engines rather than steam engines was, in the main, for the very great economy effected by diesel engine operation and not, in the main, for increasing the speed of the trains. The speed of some expresses has been increased. The Dublin-Cork train takes half an hour less than it did in 1952. The speed of the Dublin-Waterford train has been increased so that the journey which five years ago took three hours has been reduced to two and a half hours. As time goes by, I hope there will be further speeding up of services, although when I look at the timetables in some areas, it is obvious trains can be speeded up only if some of the stations, where only one or two people get in, are closed. I cannot see any future for stations of that kind in the modern world.
The other measures taken include the following:
New carriages and wagon stock of modern design.
Palletisation and containerisation.
Greater segregation and quicker movement of goods (85 per cent. of all goods delivered within 24 hours).
New road freight vehicles and more comfortable buses.
Cleaning up and re-decoration of stations.
Better amenities for staff.
A new wagon shop at Limerick.
The new North Wall depot.
Coming soon—the mechanisation of track maintenance.
The elimination of out-dated high cost methods in general.
A new cost accounting system and, as I have said, a completely modern sales organisation.
These efforts have resulted in improvements in revenue and in traffic carried compared with the period prior to the enactment of the Transport Act, 1958. Railway receipts have increased from £7.5 million in 1958/59 to £8.3 million in 1961/62. Road passenger revenue over the same period increased from £6.3 million to £7.2 million and road freight from £1.8 million to £2.8 million. The board's package deal scheme, which has contributed over £900,000 in revenue, is playing a significant part in the improvement in the board's position.
The board and the departmental managers have had an appallingly difficult task. For nearly forty years there has been a dreary tale of losses, reduction of capital and a complete absence of the techniques of modern selling, of competition, of dynamic drive. Consequently, the teams of consultants and the staff have had to make disturbance; have had to raise a lot of dust in their efforts to increase productivity. It is difficult for loyal servants of any organisation to be told that methods of working and attitudes to selling must be drastically changed.
The vast majority of the staff are co-operating in making economies and in improving methods. Here, again, I want to say, in relation to everything Deputy Dr. Browne has said about the relations between the board and the staff, that I am very well aware, so far as the vast majority of the CIE staff are concerned, that there is complete co-operation in the handling and development of this modernisation. Of course, it is bound to create disturbance, to arouse, if you like, sadness in the minds of officials and to arouse resentment in the minds of people who, within the ambit of the powers of CIE over the past 40 years, were doing a very good job; who, working within certain limited procedures, were devoted servants of the company, and who suddenly find themselves having to alter entirely their outlook on railway running and on the whole service. But, making allowance for the difficulties which must be faced, I think the vast majority of the staff are showing very great co-operation in making economies and in improving methods.
It is essential in such circumstances that all employees should have a reasonable understanding of events and that they should be afforded an opportunity of making contributions by way of suggestions, and so on. I am glad to note that CIE, with the agreement of the trade unions, have been operating very successfully during the past couple of years a scheme of joint consultation between the management and staff which affords opportunities for co-operation and discussion on matters of mutual interest, including efficiency in the working of the rail and road services and in workshops and garages, the development of business and the best use of manpower. I understand that the councils have been of considerable value in improving the understanding between the management and staff and in the effort to create an efficient, economic and up-to-date transport service.
That is my answer to what has been said by not more than two or three Deputies. That is my answer to what they said about the Board's overbearing dictatorial attitude and to all the imputations against the Board by a handful of Deputies. It is impossible to conceive that a very considerable number of joint industrial councils could operate successfully, where the executive staff meet the workers' representatives and discuss everything relating to the work in a particular district—how things are going; how the service is proceeding; suggestions for its improvement—if the whole service is supposed to be over-ruled and over-lorded by intolerant and dictatorial men.
One of the most noticeable features of work in this House is that far too few Deputies in the Opposition demand more efficiency from State companies and far too few Deputies have bothered to ask CIE to show them the many improved systems of working already effected. The paper read by the Chairman of CIE to the Institute of Public Administration on June 27th gives the main facts and I myself have inspected much of the system.
Over a year ago, I said this about CIE in this House:—
No Minister for Finance faced with tremendous demands for seven-figure increases in educational and social services will want to subsidise CIE. It will take the same kind of continuous, dedicated effort by management and staff working closely and enthusiastically together to maintain CIE as a company as solvent, for instance, as any to be found in a modern highly developed export industry facing cutthroat competition. Let everyone dispel the idea that there will ever be an easy period for CIE when, either to management or staff, the prospects appear easy and cash returns are rolling in without tremendous effort.
This warning is still valid. It will demand of the Board and staff of CIE the maximum effort possible to create a public transport system that provides a competitive service. The standards of speed and comfort on the arterial rail system as predicted by the Beddy Committee will have to advance as main roads improve.
CIE is not a great transport organisation dominating and monopolising the entire world of transport, which, because of its essential character, must operate at no matter what cost. It is a national transport organisation which, as each year passes, will compete more and more with a vast amplitude of private transport which can replace it unless the costs are kept competitive.
These socialist Deputies are deluding the workers of CIE. They are not in the position of being able to dictate terms to the community to demand subsidies from the State. In every year that passes, attended by a growth of the national income, the number of citizens who would suffer grave inconvenience by a cessation of services will diminish.
I do not want to delude the 22,000 workers in CIE. They have acknowledged, by an almost complete absence of criticism, the fairness of the redundancy payments. But they are not running a complete monopoly any longer. It is possible even now for CIE to hive off sections of CIE activity to private enterprise whose services will be adequate and I shall not object to this if CIE are not permitted to modernise their methods in order to run the whole service at the lowest possible cost.
There are a few groups within CIE who must cease thinking of themselves as in a privileged position. I recognise that the vast majority, through the operation of joint industrial councils, are aware of the position, but they must not be deterred by the unrealistic attitude of the minority. In this connotation some comment is called for on the huge eighth round wage increase together with the cost of associated improvements in working conditions which cost the Board £2.35 million in a full year. As staff costs form a much larger proportion of costs in the transport industry, the effects of this increase are hard to absorb and will again adversely affect the financial position in the current year.
As noted as far back as 1957, the staff costs per ton-mile of goods and and per passenger-mile on the railway are so far in excess of the European figure that the most drastic reorganisation is essential.
Policy decisions, however, which will affect the whole economy if we join the EEC will inevitably increase competition by private transport. Putting it another way: the taxpayer is not going to, and under EEC rules may not be permitted to, pay taxes in order that the cost of a railway ticket or the freight cost of sending a ton of goods may compete with the cost of driving a car-full of people to Dublin or sending the goods in a private lorry.
Any other view would set a precedent for a whole series of State subsidy demands. all of which would be self-annihilating as they would simply be transferring incomes without rhyme or reason from one group of people to another.
The Board's progress since 1958 towards the development of an efficient and viable transport system in which rail and road services are fully coordinated has been most impressive. This progress has been commented on most favourably by railway experts from railway administrations abroad who have studied the measures taken by CIE. The Board's aim is to provide a national transport system geared to meet the particular needs of transport users and when one looks at what already has been achieved in that direction there is no doubt but that the highest credit is due to the Board.
When the 1958 Transport Act was enacted it was envisaged that, in the light of experience, new legislation would fall to be enacted at the end of the five-year period of reorganisation ending in 1964. By then, a completely new factor will have to be reckoned with. We shall, I hope, be in the Common Market and we will be required to comply with the common transport policy to be worked out under the Treaty of Rome.
The common transport policy provided for in the Treaty has not yet been adopted, but, from the various reports and memoranda on transport published by the Community, the general lines of the common transport policy are beginning to emerge. The over-all aim will be the development of an efficient transport system throughout the whole Community, capable of satisfying at minimum cost and under the best conditions, the requirements arising from economic expansion within EEC. The greatest possible degree of competition will be provided for in the transport section. Restrictive practices will have to go and transport undertakings, including the railways, will be expected to compete on even terms.
There will be no question of general subsidies for transport and our concept of a national public transport undertaking combining road and rail may even have to be modified. It is clear that the Common Market is going to offer the same challenge to CIE as it does to our other industries. The same drastic pruning, reorganisation and scrapping of obsolete and restrictive practices will have to be implemented. It is all the more important, therefore, that the Board of CIE continue with renewed energy their policy of reorganisation and re-shaping of the undertaking, so that it will be in the best possible shape when we do enter the Common Market. The Board may not, thereafter, have the same opportunity to put their house in order.
I am satisfied that CIE are on the right lines and that no change in the statutory directives to the Board is necessary at this time. The proposed Bill is a foolish one and completely out of touch with reality. I have no hesitation in asking the House to reject it.
