Dáil Éireann debate -
Tuesday, 28 May 1963

Vol. 203 No. 2

Committee on Finance. - Transport Bill, 1963 [Seanad]— Second Stage.

Minister for Transport and Power (Mr. Childers)

I move that the Bill be now read a Second Time.

The main purposes of this Bill are to extend the existing statutory powers of Córas Iompair Éireann in relation to (i) the construction of railways; (ii) temporary borrowings; (iii) long-term borrowing for capital purposes; (iv) the abandonment of railway lines; (v) the payment of redundancy compensation and also to provide sundry statutory safeguards for members of CIE staff transferred to the new Hotels Subsidiary Company known as Ostlanna Iompair Éireann Teo.

The necessity to extend CIE's statutory powers in relation to the construction of railways arises from the fact that the Board proposes to extend the railway line at Wicklow so as to provide a rail connection to the factory of Shamrock Fertilisers Ltd., Wicklow. At present traffic between the factory and the railway station has to be hauled by road and the proposed rail extension would allow of traffic from the factory being loaded directly on to railway wagons. The present arrangement involves double handling of fertilisers consigned for onward delivery by rail from Wicklow with a resultant increase in costs.

The extension is a relatively small job involving only about 700 yards of new line at a cost estimated not to exceed £8,000. The extension line will, however, run partly over the public roadway and partly through private property. It would seem at first sight that CIE could be given the necessary powers to construct this railway extension by the making of an Order for the purpose by me under Section 14 of the Transport Act, 1950. I have, however, been advised by the Attorney General that in the laying-down of new lines other than lines on its own property or on another person's property with that person's consent the Board might successfully be restrained if some part of the construction works, for example, the breaking-up of the public roadway, where held to be in conflict with Statute or Common Law.

Since the proposed railway would run for some hundreds of yards through the town of Wicklow along a route adjacent to the sea front, it will be necessary having regard to the Attorney General's advice in the matter to extend the existing statutory powers of CIE in relation to the construction of railways. This I propose to do in the present Bill.

The proposed statutory powers are in Sections 2 to 10 of the Bill. There is nothing novel in these proposed powers; they are, with a few minor exceptions, identical with the corresponding powers conferred on Bord na Móna by the Turf Development Act, 1946.

As CIE has already constructed minor railways under powers conferred by two separate ministerial Orders made under Section 14 of the Transport Act, 1950, it is proposed for the avoidance of doubt to provide as at Section 11 of the Bill that the two Orders which are specified in that section shall be treated as if they had been made under this Bill when enacted.

CIE are empowered under Section 28 of the Transport Act, 1950, (as amended) to borrow temporarily from their bankers for general financing purposes. They may borrow at their own discretion up to £½ million and to the extent that these borrowings exceed £½ million my prior approval, given with the consent of the Minister for Finance, is required. The Minister for Finance is empowered to guarantee these borrowings to the extent of £1½ million. CIE normally exercise these powers to secure short-term accommodation during periods when revenue drops seasonally. There has, however, been a rather serious deterioration in the Board's revenue position during the past financial year and it is clear that the Board will be obliged to have recourse to temporary borrowings to a greater extent and for a longer period than in preceding years. It is proposed accordingly to take powers in the present Bill to enable the Exchequer, in the person of the Minister for Finance, to lend direct to CIE within the existing £2 million statutory limit of such borrowing by CIE. As a complementary measure, the Bill proposes to empower CIE to borrow temporarily from sources other than bankers. I think that the House will wish to have some explanation as to the reasons for deterioration in CIE's revenue position.

It will be recalled that in the period following the enactment of the Transport Act, 1958, CIE made substantial progress towards achieving the objectives of that legislation. The Board's operating losses, which amounted to £1,950,000 in 1958/59, fell to £709,000 in 1959/60 and to £246,000 in 1960/ 61. This progress suffered a sharp setback during the year ended 31st March, 1962, due mainly to the eighth round of wage and salary increases and associated improvements in conditions of employment, which in that year together amounted to an increase of £1,024,000 in the Board's wage and salary bill. In a full year the cost to the Board of these increases amounts to £2.35 million. Other factors also contributed to worsen the Board's financial position; these included heavy additional maintenance costs of a periodic nature, increased depreciation charges, and the cost of additional road staff recruited to handle increased business. To these factors there was added a continuing decline in railway business and the fact that the increased rates and charges only came into operation in the last few months of the year. There were on the other hand offsets resulting from increased road freight and passenger business and from economies introduced. The net result, however, was that the Board's operating loss for the year 1961/62 rose to £1,696,000 as against £246,000 in the preceding year. During the financial year ended on the 31st March last, the course of events I have outlined continued without significant change and the operating loss is, I understand, even greater than for the preceding year.

I regret to say that the position now is that the Board seems to be without prospect of overtaking the effects of the eighth round. It now appears clear that the increased fares, rates and charges which the Board introduced to counter the effects of the eighth round cannot be expected to bring in more than £1.13 million in a full year. The cost of the eighth round has worked out at £2.35 million a year and there is, therefore, a gap of £1.22 million. This corresponds roughly with the Board's forecast deficit on operating account in the current financial year.

A reasonable comment on this situation is that if the eighth round increase for CIE, including the cost of associated improvements in employment conditions, had been at the National level of 12 per cent, as recorded in September, 1962, instead of the actual increase of 20 per cent, then the deficit for 1962/63 would, on the provisional results, have been reduced by about £900,000.

CIE is empowered under Section 28 of the Transport Act, 1950, as amended, to raise funds by stock issues to meet its capital requirements. The Act sets a limit of £12 million to the amount which may be so raised and this limit was reached by the last stock issue for £2 million, which took place in May, 1962.

The Board has estimated that its expenditure on capital account including renewals, replacements and additions in the two years ending 31st March, 1964, will amount to £6.13 million. Initially the programme amounted to £9.7 million but, having regard to the desirability of curtailing the rate of new capital expenditure the Board, at my request, revised the programme so as to defer until after 31st March, 1964, part of the planned capital expenditure. The deferred expenditure covers a reduction in the number of new diesel locomotives and deferments in planned expenditure on reorganisation of stations and workshops including provision of new buildings. These deferments, together with an arrangement for obtaining the 37 new diesel locomotives purchased in 1962 on an extended credit instead of a cash basis, have made it possible to reduce total capital expenditure for the two years 1962/63 and 1963/64 to £6.13 million. This revised estimate represents maximum practicable deferments of capital projects and takes account of planned rail and station closures. Included in this programme are such essential items as payment of the instalments totalling £883,590 on the new diesel locomotives, the construction of new railway coaches of an advanced design, the continuation of the railway wagon construction project, the cost of new and more up-to-date buses for the Board's touring services and the provision of additional road freight vehicles including vehicles required to replace branch line services which have been closed down.

Of the total estimated capital expenditure of £6.13 million, a sum of £3.261 million will be provided by the Board's depreciation provisions leaving £2.869 million to be financed from new capital funds. The Board must also, at this stage, take account of capital requirements arising in the earlier part of the financial year 1964/65, which amount to £734,000, approximately. In addition, provision must be made for contingencies and for the expenses of stock issues, together estimated at £250,000.

The estimated total capital requirements for which provision must be made is, therefore, £3.853 million. The capital funds remaining available to the Board since the last stock issue of £2 million in May, 1962, will not suffice to meet this essential expenditure. It will, therefore, be necessary to empower the Board to raise further capital funds and it is accordingly proposed in the present Bill to increase the existing limit of £12 million, to which I have referred, by £3 million to £15 million.

I would like to reassure the House that the capital expenditure proposed by the Board in the two years I have mentioned, 1962/63 and 1963/64, would all be necessary even if a firm decision were taken to reduce the mileage of the CIE railway system to that envisaged in the Beddy Committee Report. The present mileage is 1,459 miles compared with 2,168 miles in October, 1958, and the 850 miles envisaged in the Beddy Report, to which must be added 63 miles of the former GNR line from Dublin to Belfast. Much of the proposed expenditure is, in fact, being incurred on equipment for road passenger and road freight services, both of which activities give a satisfactory return on the capital invested in them as may be seen from the Board's accounts.

The entire operation of CIE in all its sections and departments is being steadily reorganised. Very detailed information has already been given on this inevitably lengthy process of modernisation.

The whole question of future transport policy, with particular reference to the position of CIE after 31st March, 1964, is at present under review. CIE itself has embarked on a comprehensive analysis of the operation of the whole undertaking with a view to providing a fully documented factual basis for the formulation by the Government of new policies on the future of the railways, for the purpose of new long-term transport legislation which will be necessary after 31st March, 1964. That legislation must take account of, among other things, the long-term capital requirements of CIE.

I myself have spoken in very great detail on this problem and have made it clear that in the long term the taxpayer will not be asked to pay subsidies in order to maintain any type of public transport if another less costly and more efficient type, either publicly or privately owned, can be provided. I have also analysed the position in regard to the additional cost of maintaining roads where branch lines have been closed and have made it clear that there is a considerable net saving to the collective body of taxpayers and ratepayers.

Criticism of this policy, I am glad to say, has come largely from a minority of public representatives and the overwhelming defeat in this House of the Private Members Bill, whose object was to relieve CIE of the obligation to pay its way, was significant. Deputies have been fully briefed in this matter over the last four years and I do not need, at this stage, to say any more on this subject.

In December, 1961, a subsidiary company, Ostlanna Iompair Éireann Teo., was incorporated to acquire the Board's hotels and to administer its catering services. In order to facilitate consultations between CIE and the trade unions on matters arising out of the establishment of the proposed subsidiary, I undertook at the time to introduce certain measures relating to redundancy compensation and pension rights. Provision is now being made in this Bill whereby staff transferred by CIE to Ostlanna Iompair Éireann Teo. will retain their existing rights as CIE employees to redundancy compensation under transport legislation as though they were still in the employment of CIE. Provision is also being made whereby staff transferred to Ostlanna Iompair Éireann Teo., who are already members of CIE superannuation schemes, may continue in membership of such schemes.

The Memorandum and Articles of Association of Ostlanna Iompair Éireann Teo. provide for a degree of official control of the company comparable with that exercised over CIE under the Transport Acts. Provision is made in this Bill for certain additional controls complementary to those in the company's Memorandum and Articles.

Experience has shown that it would be desirable to provide for two minor amendments in the law relating to the abandonment of railway lines. The existing legislation does not permit of the abandonment by CIE of a railway line on which all train services had been terminated prior to the transfer of the railway line, for example, from the GNR to CIE. Secondly, the existing legislation does not permit of the disposal of tenanted premises on abandoned lines to the tenants thereof by private treaty. These matters are covered in the Bill now before you.

The Transport Act, 1958, and the Great Northern Railway Act, 1958, provide for payment by CIE of compensation to employees whose services are dispensed with within five years of the passing of the Acts, that is up to and including 15th July, 1963, and the recoupment of the cost to CIE by the Exchequer. Section 19 of the present Bill proposes to extend this provision up to 31st March, 1964. The extension has been found to be necessary because the schemes of reorganisation which CIE are introducing under the Transport Act, 1958, will not be fully completed until some time between 15th July, 1963, and 31st March, 1964. It is, therefore, necessary to safeguard the position of staff who may become redundant between the two dates I have mentioned and for that purpose the Bill proposes to extend the provisions for redundancy compensation from the present termination date, which is 15th July, 1963, to 31st March, 1964, which is the date of expiry of the reorganisation period envisaged in the Transport Act, 1958.

I think that, at this stage, I should give you some figures of the number of CIE employees declared redundant by the Board since 1st October, 1958. Up to 31st March, 1963, a total of 1,247 CIE employees had been retired with compensation and some 50 other employees are expected to be retired with compensation between 1st April, 1963, and 15th July, 1963. The ultimate cost to the Exchequer of recouping the compensation involved is estimated to amount to £4 million.

CIE estimate that a further 300 employees will be retired on redundancy during the period 16th July, 1963, to 31st March, 1964, and that the ultimate cost to the Exchequer of the compensation payable in relation thereto will amount to £900,000, making a total of £4.9 million to be borne by the Exchequer in respect of redundancy compensation.

The opportunity is now being taken to deal, also, with two small defects in the Great Northern Railway Act, 1958. It was the intention that ex-GNR employees transferred or seconded to CIE as a result of the transfer to CIE of that part of the GNR undertaking in the State would have the same rights to redundancy compensation as CIE employees. I have been advised, however, that while the provision of Section 17 (1) (c) of the Great Northern Railway Act, 1958, cover redundancy arising from such causes as the reduction of rail services or the substitution of diesel for steam traction, the subsection does not extend to redundancy arising under reorganisation schemes covered by Orders made by me under Section 14 (6) of the Transport Act, 1958. It is accordingly proposed to remedy this defect by amending subsection 17 (1) (c) of the Great Northern Railway Act, 1958 so as to bring its provisions into line with those of Section 14 of the Transport Act, 1958, in accordance with the original intention.

A further drafting amendment to Section 17 of the Great Northern Railway Act, 1958, has also been found to be necessary. Subsection (3) of that section deals with, inter alia, the grant by CIE for the purpose of determining entitlement to redundancy compensation, of an increase in pensionable service of a person taken into the employment of the Board at a late age. It now appears, however, that the application of this provision does not extend to employees who become redundant under the provisions of Section 14 of the Transport Act, 1958. As it was not the intention that this provision should be so restricted it is proposed to take the opportunity of extending it to cater for redundancy arising under the Transport Act, 1958.

Finally I come to Section 21 of the Bill. This section is designed to remedy defects in paragraphs 5 and 6 of the Second Schedule to the Transport Act, 1958. Paragraph 5 of the said Second Schedule deals with the abatement of redundancy compensation where the recipient is employed by a State-sponsored company or a local authority. That paragraph as at present drafted does not embrace subsidiary companies of such companies or bodies; neither does it embrace Industrial Engineering Co. Ltd., the holding company for the Dundalk group of companies. These defects are now being remedied in so far as future redundancies are concerned. Paragraph 6 of the said Second Schedule, on the other hand, refers to the abatement of redundancy compensation by the amount of any pension the redundant employee may be in receipt of from a CIE pension scheme; the amendment at paragraph 6 provided for at Section 21 of the Bill brings pension schemes to which Ostlanna Iompair Éireann contribute within the scope of this abatement provision. This provision is necessary in order to equate the position of employees transferred to Ostlanna Iompair Éireann with that of CIE employees in the matter of abatement of redundancy compensation.

I recommend the Bill to the House for acceptance.

Mr. Sweetman

The Minister has my sympathy in having to stand up and admit to the House on this Transport Bill that the position in relation to transport is hopeless, that he cannot solve it and that he does not know where it is to end. A funeral oration for all the railawy lines in Ireland would be an inadequate description of the speech we have just heard. It was rather interesting, as one listened, to compare the speech he made now with the thundering, bragging bravado of the present Taoiseach when he introduced the Transport Bill in 1944 and again in 1958.

When he came to the House in 1944, he said he had produced a scheme to reorganise the transport company as a result of which he and the Government and the people as a whole could look forward to a transport system that would operate successfully for 50 years at least. In that bragging spirit of bravado, the Government succeeded in putting it across to the country that they really had something, that they really had a plan and a system. Fourteen years went by and the Taoiseach came back to the House in 1958 and again he said there was to be a rejuvenated railway, a new system of transport that would solve all our problems. Nobody need ever again worry about transport because of the great plan he, as Minister for Industry and Commerce, had thought up and brought to the House as the Transport Act of 1958. There is this much to be said for it—it has lasted half as long as the one before it. I feel sorry for the Minister now who had to show himself so completely beaten as to admit he could see no solution to the problem——

General MacEoin

He did not say this would be the last one.

Mr. Sweetman

Apparently he realised he was making a funeral oration. He began by saying, of course, that it was a Bill for the purpose of the reconstruction of railways, building a new railway line, but I notice that he did not give us any undertaking that he would not close down that railway line. We have all become accustomed to the Minister coming here saying that his main function in relation to transport has been to close down railway lines. He succeeded pretty well in that. However, we have this provision now and if it does ease an administrative problem and make for more efficient operation we are prepared to accept that aspect of the Bill.

I notice that the Minister says it is proposed to provide under Section 11 that certain orders that have been made may be validated. I should like a clear, unequivocal assurance from the Minister to go on the records of the House that all the compensation that there could possibly be, for claims under those orders, has already been met and that the validation included retrospectively in Section 11 cannot in any way injuriously affect any citizen who might otherwise have a claim. If that assurance is given in no uncertain terms, possibly the approach might be accepted to that aspect of the Bill although frankly it is not an approach —and, to be fair to the Minister, I think he also feels this—which we should normally take.

What impressed me most about the Bill is that, in relation to the second phase that is responsible for the interruption of this legislation, the Minister in dealing with temporary borrowings proceeded to give some indication of the situation as he saw it, or if I may say so, as he failed to see it. He has been far more specific in this House than in the Seanad. He said here categorically that he cannot see any prospect of CIE overtaking the effects of the events of 1962. Having said that, he has not offered any solution or any indication of the direction in which a solution lies. I do not know if he wishes the House to take from that lack of suggestion or direction that he is going even further forward on the policy of closing lines and uprooting railways built at great expense throughout the years and doing so at a time when there is no real, planned alternative proposed.

I could understand an approach in regard to a railway which was not being satisfactorily utilised if before that approach was made there was a planned and co-ordinated scheme as to how the track could be otherwise used. For example, I have seen no suggestion by the Minister or by CIE of any attempt to develop, as has been developed in other countries, the idea of providing a bus that could operate alternatively on railway or on road. Other countries with a density of population as low as ours—of course, we know why the density is so low— have found it possible to combine, by a system of what I might call rail cars, safety in transport along a fixed rail with the ease of point development provided by road transport. No serious attempt has been made by the Government or CIE to assess the possibility of that here. Certainly, any study that has been made in relation to it has been hidden in the secret archives of the Minister's Department, more guarded than many of the documents about which his colleague, the Minister for Justice, waxed so eloquent not so long ago on the Official Secrets Bill.

Mr. Childers

Both systems have been examined.

Mr. Sweetman

I should be loath to say to the Minister I did not accept his word. I would not say so. But I would suggest to him that, if he wants people to accept the examination of something, it is desirable to give the House some information about it. As far as I can recollect, no information was given in last year's Estimate. No indication is given in this Bill now before us that any such examination was operative in relation to transport policy.

I cannot understand the Minister's approach to this Bill. As I understand it, he wants to provide by the Bill that CIE can have extended powers of temporary borrowing. One could understand that if the effect of it was to be that he could see some point ahead at which those temporary borrowings could be repaid. But, far from seeing any prospect of that in the time ahead, the Minister has come down and admitted — I must congratulate him on being truthful enough to say so—that the situation is hopeless and he can see no remedy.

Let me inquire the purpose of a Minister for Transport and Power in relation to transport. Is it not to find some method of co-ordinating transport policy suited to our country? This Minister comes in here and frankly admits that, while he is extending the powers of temporary borrowing, the Board is without prospect of overtaking the effects of 1962. What is the use of having temporary borrowings if there is no prospect whatever of being able to repay them? What is the use of calling them temporary? Is it not a fact that what the Minister wants in those circumstances must be either permanent borrowing or a proper development scheme to arrive at a conclusion in which he will not have to get up and admit he can see no prospects for the future?

General MacEoin

He said he regretted it.

Mr. Sweetman

I should have thought we could have got some indication from the Minister of what policy the Government have in this respect. Is it the policy of closing all railway lines all over the country? If that is the policy, why does he not say it? If he has another policy to provide a proper transport system, why does he not say it? If he has no policy—and I suspect he has no policy, other than trying to cover up the fact he has no policy—it would be wiser for him, for his own reputation and for the country as a whole, to go and to make way for someone who will provide a policy in relation to this aspect. We have to have one or else we are going to fail completely to make the country a viable economic unit. A transport policy is a sine qua non of the achieving of that situation.

Mr. Childers

May I interrupt the Deputy? The Deputy only had the opportunity to read the statement. In order to have an intelligent debate in the House, I should point out to the Deputy that the raising of the capital expenditure by CIE implies, whatever the final new policy will be, that the main arterial railway system of the country will be maintained. I thought I should tell the Deputy that just in case he might not have had the opportunity of comprehending that part of the speech. It is important for a constructive debate that he should realise that. That is one phase of policy quite evident.

Mr. Tully

That is the policy now but in a month's time, like Shannon, there will be a complete change-over.

Mr. Sweetman

The Minister assumes I did not take the trouble to read his speech in the Seanad. I did. I read the difference between his speech in the Seanad and the speech he made here.

Mr. Childers

There is very little.

Mr. Sweetman

There is a very great difference. The Minister did not say in the Seanad: "I regret to say that the position now is that the Board seems to be without prospect". He gave certain figures, but he did not admit in the Seanad the complete hopelessness of the situation. What I want to get at is—and not even the most friendly interruption by the Minister will prevent me trying to get at it—what is the new policy in that hopeless situation he now envisages. What has happened between now and the debate on 24th April, when he gave statistics but certainly did not come down as flatly as he has come down now?

Let us suppose for the sake of example that the new transport policy, which the Minister says will be operated as a result of this examination, leaves the main lines. What main lines? Are we not entitled to some indication as to how many more closures are to be announced by CIE acting for and on behalf of the Minister? I have some sympathy with the Minister. Clearly, he is going to go down in history and be remembered as Childers, the man who denuded the country of railways. He will clearly go down and be remembered as Childers, the man who denuded even the county he represents, Monaghan, of its railways.

Mr. Childers

I have not the slightest objection.

Mr. Sweetman

Now we know what his views are towards railways. I suspected it, but if he did say it already, I confess I had not read it. I do not know where the suggestion is in his speech in the Seanad——

Mr. Childers

It is practically the same: "I regret to say the position now is that the Board seem to be without prospect of overtaking the effects of the eighth round". It is at column 844 of the Official Report for Wednesday, 28th April, 1963, volume 56. Any fairminded person who read the paragraphs would see they are practically identical.

Mr. Sweetman

I admit frankly I did not spot the sentence, it was so couched. When I read the Seanad speech by the Minister, I admit it left me with a different impression from what I got listening to him.

Mr. Childers

Perhaps the voice was gloomier than the reading.

Mr. Sweetman

When I read the Seanad debate, I did not think he had any solution at all. I certainly think so now, as I did when I was listening to him. Here he comes in and asks for temporary borrowing. If he sees no prospect, what is the point of temporary borrowing? Would it not be better to accept the thing on a whole-time basis, if there is any necessity for it at all? The whole point of temporary borrowing is that there is a foreseeable prospect of paying back. Neither today nor on 24th April last was that made clear by the Minister.

The Minister refers to the company's hotel subsidiary. Do I understand that what he is anxious to provide in relation thereto is the equivalent of the deeds of adherence where a subsidiary company operates through an insurance company pension scheme? If so, then I have no objection to the proposal. I should like to ask him one question in relation to the hotel subsidiary. Did CIE apply to the Minister and get specific and express authority before the subsidiary company was set up? I think they should have. It is entirely undesirable that State sponsored bodies should set up subsidiary companies without clear and express consent from the responsible Minister. The reason why I ask for that assurance in no uncertain terms is that when I was in office some little time I found that one State-owned company had set up a subsidiary without having asked the corporate Minister for Finance for permission, so that, in fact, what was being done was that the subsidiary was not being subjected to the light of examination in the Department. I think the Minister will agree that such a development would be entirely wrong.

Mr. Childers

They did receive permission.

Mr. Sweetman

I am delighted to hear that. I can agree at once that the sectionalising of certain aspects of the affairs of any company by means of a subsidiary company is desirable but when it is done it should be subject to examination and analysis in exactly the same way as are the affairs of the parent company. I notice that the Minister, in pursuance of his desire to be known by the name under which he will go down in history, could not bring in a Transport Bill at all without having in it some arrangements through which he can more easily abandon railway lines.

The redundancy provisions made show fairly large payments, just under £5 million. The whole question of redundancy and of labour relations in CIE seems to have gone very much amiss somewhere. I want to say at once that I do not know enough about what occurred or the reasons for what occurred to be able to offer any constructive criticism or help in relation to them. I welcome any effort that may be made now to improve these labour relations, even though I think the effort is somewhat belated. I do not know whose fault it was, but it is an undoubted fact that persons whose lives were to be affected did not get adequate explanation of what was intended, or, perhaps, it was the fault of those people that they did not listen to the explanation if it were given. I do not know whether it is of any advantage to pursue it now.

It is, however, an undoubted fact that unless there is to be a modern approach to management and labour relations in all aspects of State-sponsored industries as well as private enterprise, and in particular in relation to transport which affects the welfare, the convenience and the comfort of the community to such an overwhelming degree, we will not have a proper approach to the policy and the problems of the future. There has been an announcement that there will be some new approach in the future. I do not want to say anything that may in any way harm or injure it, or make anyone wonder why it is being done now, except to say that it is devoutly to be hoped that whoever was responsible for the lack of proper relations in the past will appreciate, for their own sake as well as for the sake of the community, that it is desirable that that lack of proper relations should end, and that we should see an era of understanding by labour of the problems of management, by management of the problems of labour, and by both of the problems and convenience of the consumer. Unless we get that in the future, I am afraid there is no use in putting down plans on paper and working out statistics and schemes. Unless the human factor is brought into the whole picture, in a way in which it has not been brought in in the past, no matter what policy is adopted, transport will never be a success.

Mr. Tully

When this Bill was being introduced, many of us felt the Government would take the opportunity of seeking to extend the time limit within which CIE were to get an opportunity to pay their way beyond 31st March next. In fact, we were shocked when we found the opportunity given by this Bill was not availed of. In a reply to a question a few weeks ago, we were told that when the expiring date of 31st March had passed, the Minister would bring in a Bill to decide what would be done after that date. It is repeated in the Minister's statement that after 31st March new arrangements will be made. It is rather a pity the Minister did not take this opportunity to remedy that very bad situation. From my reading of his speech, it appears as if the Minister is saying that eventually we will retain the main lines.

Mr. A. Barry

We will be very lucky if we do.

Mr. Tully

The Minister said it. I have his word for it. He referred to the eighth round of wage increases and blamed practically everything on it.

General MacEoin

They should not have looked for any more.

Mr. Tully

Are we to assume the railway workers and the bus workers should not have looked for an increase, that that was the be-all and the end-all of it? Are we now to accept that but for the fact that the men have to be paid their wages, CIE would be able to pay their way?

Mr. Childers

I never said anything of the kind. If the Deputy wants to misrepresent me, he can. He always does.

Mr. Tully

It is hard to misrepresent the Minister.

Mr. Childers

Let him run on.

Mr. Tully

He says so many different things at different times that I am bound to be right, no matter what I say. I shall quote from his speech.

General MacEoin

"A reasonable comment on this situation. . . "

Mr. Tully

The Minister referred to the fact that they almost paid their way in 1961-62. He said: " . . . the Board's operating loss for the year 1961-62 rose to £1,696,000 as against £246,000 in the preceding year." I do not think the Minister can claim that I am misrepresenting him when I say that he gave as his reason for that:

This progress suffered a sharp setback during the year ended 31st March, 1962, due mainly to the eighth round of wage and salary increases and associated improvements in conditions of employment. . . .

Am I misrepresenting the Minister when I say he is blaming the workers for the position which CIE are in, and that if they had continued to work for the few pounds a week they got in the early days, CIE would be able to pay their way? The Minister wants to have it both ways. He wants to claim to be a good employer, and to say that the workers were ruining that employment because they looked for the eighth round of wage increases. He also suggests that there is no possibility of the ninth round of wage increases which he and his colleagues have already set in motion with their 2½ per cent turnover tax. We get too much of this from the Government front benches. The workers are to be blamed for everything that happens. The Minister seems to think that, provided the Government are allowed to deal with a certain group of workers on the question of compensation, other workers down the country who, even though they may be members of trade unions may not have the industrial strength to force their views on CIE and the Minister, can be left out.

There were a very big number of linesmen working for a very small wage throughout the country. Some of them had something like £7 a week. They lived with their families in frugal comfort. In some cases a member of the family or a wife was able to earn a few shillings to help out. They had a small house with a small garden. CIE did not dismiss those men. They offered them jobs at the other end of the country, and because they would not take them—they could not take them—they were dismissed. They got their cards and were told: "We are very sorry; you will have to go."

There is no provision in this Bill which includes redundancy compensation for those people. Possibly they do not count; possibly the ordinary labourer does not count. If they were a big group of craftsmen in a workshop, they could threaten to take industrial action together and have their grievance remedied, and I have no doubt they would be considered and would get redundancy compensation. Because these people have not that power, the Minister can tell Deputies, as he told me, that it is a matter for the trade unions, that they are entitled to this, that and the other, knowing darn well that there is no hope of having matters straightened out because the people concerned cannot bring the necessary industrial strength to bear on CIE.

I wish the Minister and the Government would forget about the eighth round of wage increases because that was quite some time ago. They will probably have a ninth round to talk about before long. When the Minister talks about increases and losses, does he realise that the sales tax will further disimprove the conditions of CIE workers? He says that tax will not be collected on fares, but it will be collected on the cost of petrol, diesel oil, spare parts and replacements. If that does not put up fares, I wonder how it will be met.

The Minister said:

Criticism of this policy, I am glad to say, has come largely from a minority of public representatives. . .

Does he realise that the people throughout the country often wonder at the different treatment meted out to CIE and the other forms of transport which the Minister so often boosts. There is no question of CIE being allowed a respite by having interest-free loans for the replacement of equipment. They must pay and be shown to be in the red. Other more favourable forms of transport, which do not affect the ordinary people, can have interest-free loans and can show a profit, even though they are not paying interest on the repayment of the loans. The Minister need not look surprised. He said the other day that the air companies were not paying interest.

Mr. Childers

CIE has had over £16 million of capital wiped out already.

Mr. Tully

Yes.

Mr. Childers

There is no comparison at all.

Mr. Tully

There is no comparison in that CIE is being used by the ordinary people and, at £400,000 a year, the others will not be long reaching the £16 million and they do not deal with the ordinary people. Apart from the fact that the closing of railway lines means a loss of employment it also means grave hardship for a number of people. It is quite true for the Minister and others connected with CIE to say that in certain districts the lines were not being used as much as they should have been and that passenger trains particularly were going along almost empty, but I suggest that there were some occasions on practically every line when there was a big rush to use the trains. I also suggest that there was an indecent haste to rip up the lines where they had been closed.

That brings me to the most recent crop of announcements about closures. I see that some people in the west of Ireland have been complaining about the fact that lines that are now being closed pass through stations which were painted and decorated very recently. Perhaps the Minister has a good reason for doing that but it seems extraordinary if the decision had been made to close the lines that this should have been done.

General MacEoin

Perhaps it was no use closing a bad station and it was better to close a good one.

Mr. Tully

I should like to welcome the provision in the Bill to sell houses to the tenants who have been living in them. That is an improvement and I am very glad that that step has been taken.

I wonder has the Minister taken into account the damage being done to roads as a result of the change-over from rail to road traffic. I do not know whether eventually there will be a reckoning between the local authorities and CIE over the misuse of the roads by very heavy vehicular traffic because of the change-over. I know in my constituency, where only a very small number of railway lines have been closed, the roads are being seriously damaged not alone by CIE transport but by private transport which has to use the roads because there is no other way of transporting their goods.

I wonder if the Minister when he said that Ostlanna Iompair Éireann would have the same relation to the Department as CIE has, meant that we will have reached the stage that if a question is asked in the House about its running, he will say he has no function in the matter? I feel the Minister should be able to take greater powers to deal with these matters. Earlier today, a few of us were taken to task by the Minister for Industry and Commerce because we suggested that when a labour dispute occurred in CIE, it was not the Minister for Transport and Power who intervened but the Minister for Industry and Commerce. I paid tribute to the Minister for Industry and Commerce for the excellent effort he was making but despite the fact that he made an excuse as to why it was he who carried out the mediation, I still feel, as do very many other people, that the person who should have taken the first move in the matter was the Minister for Transport and Power.

The last speaker referred to labour relations and said that he hoped that relations would be better. I should like to finish on this note: the sooner the State and semi-State companies realise that, if a dispute occurs and that dispute must ultimately be settled, it is far better to settle it around the table before a strike takes place and before the men have been walking on picket lines for weeks, the better.

Mr. A. Barry

The last speaker should realise that 1964 is not a year in which something remarkable is going to happen. If Deputy Tully thinks the Minister waited until then to give the railway company an opportunity of going out of the red into the black, he does not see very clearly what is happening. CIE will not pay their way in 1964 or after 1964.

Mr. Tully

The Minister said they would.

Mr. A. Barry

The Minister does not believe it, if he said it. I think this is a sad Bill because it hints at the end. It is remarkable in that it provides for the laying down of a railway line in County Wicklow. That is a change from the activities we have known for the past four or five years. It would be appropriate if the Minister, with the Chairman of CIE, had a plaque erected on the spot on that occasion. The year 1964 is receding into the future like a pair of railway lines running to the horizon across the countryside. It is no use blaming rounds of wage increases for it because most people could have foreseen the rounds of wage increases which the Minister blames for the debâcle. Most people can see that we are not at the end of wage demands.

The pity about the whole thing is that on the main lines—the only lines I have experience of—the service is excellent. Normally the present Chairman, Dr. Andrews, would get results by the methods he is using but this is not a normal kind of public service, not alone in Ireland but in any country in the world. Dr. Andrews and the Minister are unfortunate in that they have to preside over an organisation which is declining. I do not think it is even possible to save the situation now on a commercial basis. If the Minister ever looks into the future, as Ministers must, and as even back-benchers like myself must, he must ask himself what will be there in 25 years' time? Will there be railway coaches running on iron lines anywhere in this country? Is there any evidence that any policy we adopt will give this rail service a continuing lease of life?

We might as well face the facts. Run on a commercial basis, this railway system must fold up inside a quarter of a century. Can we possibly justify the pretence that we are now just in a rough spot, an uneven spot? The Minister has almost said the writing is on the wall.

I think a new decision is needed. I shall not canvass either point of view but there are two steps which we must take. First, we must consider the railway as a commercial proposition in the light of the population of this country. On that basis, the railway is out. But, if the railway is needed for national or social purposes, we should face that fact.

We could help the railway. We are completely illogical about it. We are allowing our roads to be used by very heavy goods traffic. We should not permit that, if we are serious about maintaining the railway as a commercial proposition. In Italy, a few years ago, I was shown the heavy trailers, two- and three-vehicle trailers, such as we see on our roads, which were give a five-year period in which to get off the roads. If we were serious, we should do that. We should not allow heavy goods to be carried on our roads. If we were serious and did that, the taxpayer would not be asked to subsidise to the extent he is being asked to subsidise now.

The problem is not unique, of course. In every country in Europe this matter is a headache. I think the Dutch are the only people who run railways at a profit; I am not even sure that that is the usual pattern there. I was in the United States a fortnight ago and I found that most of the railways on the eastern seaboard there are in Queer Street, too. Therefore, this problem is not a sign that anything is wrong with us but we have the added difficulty of the very light density of our population.

If we do not look at the matter in a light other than that with which we have been fooling ourselves in this House for the past 15 or 20 years, then what is happening here tonight spells the death sentence of CIE and the Minister is in the unpleasant position of Lord High Executioner.

The railway could be saved, if, for instance, the Government were serious in their declamation that they are about to move somewhat to the left. In such a context, they could justify the preservation of the railway as a social and national need. That would be the only justice in borrowing money. To borrow money on the basis that this is a commercial proposition is almost immoral because we all know it is not.

What happens the materials that are available for sale when these lines are torn up? Where does the money go? On what page of the balance sheet do they figure? We shall not do service to the country, to CIE, to those who work in CIE or to ourselves if we do not face the truth about this. Unless we try to preserve the railway as a social and national service, we are just being cowardly in not acknowledging the truth that there is no possibility of making CIE a paying, going concern.

General MacEoin

As Deputy Sweetman said, this problem must be faced. What Deputy Barry has said must be accepted by the Minister and the Government—that the railway system must be regarded as a social service and not as a commercial enterprise. But whether it is or is not, the railway system should not be torn up. That is simply work of waste and ruin.

We are in a changing world. We may not always have peaceful conditions. War conditions could arise again. What sort of transport would we have if we were confined to petrol and oil? Bad and all as the railway may be, it can be utilised for the transport of much of our raw material. It might not be as fast, perhaps, as we would desire but it is a safeguard. It is very bad business for CIE to tear up the line, when they decide to close it. It means burning our boats and leaving no reserve whatever.

On the question of borrowing, the Minister should have stated the position positively about the capital that CIE now seek. There is no use in polishing or painting it with the adjective "temporary" because he is quite clear that he does not see any prospect of CIE ever being able to overtake the eighth round of wages. No matter how the Minister may try to cover his words now, the implication in his speech is that the whole cause of the troubles of CIE can be laid at the feet of the workers because they claimed the eighth round increase— although that eighth round was itself brought about by Government action, the removal of food subsidies and so on.

As Deputy Tully has very properly pointed out, the proposed sales tax will bring about a further demand. What then? Does it not mean, then, that CIE and the Government must regard the railway service as a social service? When the Minister says that only certain representatives condemn the present policy, surely he cannot say that in respect of the deputation he received recently from the west of Ireland? It is an important matter there. The Government, even if it means bringing in certain legislation to declare it a special line, should keep it open. It serves a very large number of people who find it difficult to travel otherwise than by rail. To blame the workers is a shield put up by the Minister but a very weak one and does him no credit.

With Deputy Tully, I am glad that where lines are being closed, the houses in which the workers live can be sold to them. I would ask the Minister for an assurance that every effort will be made to give alternative employment as near as possible to the workers' existing homes. It is no use to offer employment in Cahirciveen to a man from Dromod, who has lived there with his family all his life, and then to declare him redundant because he refuses the employment. The Minister and CIE should be very careful in that matter.

The redundancy payments appear to be fairly generous but I have received complaints from employees that generous payments were made in some cases and niggardly payments in others. I do not know why that should arise because I believed and was given to understand that there was a general rule and principle applied. There are complaints that people have been declared redundant and got compensation and were able immediately to engage in other types of activity whereas people who were not so well able to do that did not get a similar offer but were retained in employment and then paid off when they were offered a transfer which they could not accept. I do not know what truth there is in that suggestion but I should like an assurance from the Minister and from CIE that every effort will be made to give generous treatment and equal treatment in cases of redundancy.

It is amazing that after all the efforts made to build up the railway system and to maintain it, and all the money that has been spent on it, all that should be of no avail. The maintenance of the railway system has been a costly business over a great number of years. It appears now that we are going to have short railway lines called main lines. If there were only one mile of railway line, one could save all the money and it could be suggested in theory that the railways were being maintained. The railway should be regarded as a social service and should be a guaranteed form of transport so that in the event of an outbreak of war it would provide an alternative transport system when lorries and motor cars would be off the road.

I should like to refer to the canals which, strictly speaking, do not come within this Bill. With the permission of the Chair, I should like to suggest that the canals should be kept open.

An Leas-Cheann Comhairle

The question does not arise on this Bill.

General MacEoin

They are part of the system. If the waterways to the Shannon are closed, a valuable asset will be lost.

In conclusion, I suggest that CIE should go very slowly in the matter of lifting the railway lines and ensure that there will be available a transport system should a situation arise in which there is not a sufficient supply of fuel oils for road transport. That is a very important matter which the Government should examine very carefully before taking the final step of destroying the railway system.

Mr. Childers

The debate on this Bill was in a rather more reasonable spirit than I have known in time past, for which I am very thankful.

First of all, I should like to say, in reply to Deputy Sweetman, that the reorganisation scheme for CIE embodied in the Transport Act, 1958, was based on the recommendations of the Beddy Committee on Internal Transport. That Committee undertook a most comprehensive review of all aspects of public transport and it is quite evident that the conclusions at which they arrived proved to be very accurate indeed. The 1958 Act, for which the Government took responsibility, was based largely on the conclusions in the Report of the Committee.

I want to make it quite clear that we sometimes seem to get confused between the reorganisation that it is essential for CIE to undertake and the question as to whether or not under any Act CIE is compelled to pay its way. I want to make it absolutely clear that even if that clause in the Act had not embodied a great deal of reorganisation in CIE, the elimination of uneconomic railway lines would have been part of the normal process of reorganisation. Many people seem to be confused over that and seem to think that one can maintain a railway line carrying practically no passengers simply because the Act might not have declared the necessity of CIE paying their way.

Deputy Sweetman asked a question about the nature of this temporary borrowing. I do not want to delude the House in any way but I should think it is almost certain that some subsidy will be needed to cover part of the temporary borrowing from the Exchequer by CIE and the temporary borrowing in the Bill is being looked at in the context of the latest financial difficulties of CIE and the plans which must be made in future to deal with new legislation in regard to CIE and the public transport. It is only reasonable to state the position quite frankly and honestly.

I have already dealt with the point about Ostlanna Teoranta. The formation of OIE was approved by me; their articles of association were examined; the method of selecting the board was examined and approved by the Government. I also give an assurance to Deputy Sweetman that the Bill does not in any way adversely affect the compensation to anyone concerned in the construction of railway lines, for which, apparently, there was not proper legal provision originally.

Another minor question asked by Deputy A. Barry was what happened to the railway lines and other material when disposed of by CIE. The revenue was put to an appropriation account and the loss that is published annually does not, in fact, include the revenue from the sale of railway lines and other material which, after the main loss has been published, is then expressed as a receipt in the appropriation account.

Mr. A. Barry

It is not set against a bad year?

Mr. Childers

No. Deputy Sweetman spoke of the "thundering bravado"——

Mr. Sweetman

Bragging bravado.

Mr. Childers

——of previous Ministers in charge of railway affairs. I do not see any harm in being hopeful when a new Bill is introduced. I was very hopeful when the 1958 Act was introduced that we would at least succeed in eliminating a major part of the losses of CIE. It is very difficult to predict all the changing circumstances that may occur in regard to transport conditions. Very startling changes have taken place not only here but all over Europe. Some very wise prophet might, perhaps, have predicted the enormous growth in the volume of private transport since the war. It has gone beyond what we regard as predictable bounds. The decision of the Irish people to have the largest amount of private transport per million pounds of their income in the whole of Europe is one which has very deeply affected the fortunes of CIE. It is, indeed, one of the most remarkable features in our whole transport set-up. Today there is roughly one car to every 14 people in the country, one to every eight in Dublin. Taking the 1951-61 rate of increase—a decade which included some good as well as bad years—we reckon that in the early 70's there will be one car to every eight or ten people in the country and one to every four in Dublin.

Mr. Dillon

I hope Deputy Dolan is listening to that.

Mr. Childers

The main problem facing CIE is that, though there will be this great vehicle growth, nevertheless, even if we double the number of cars, there will still be less congestion here than there is in any other country in Europe, outside the conurbation of Dublin, and excluding the cities areas.

Mr. Sweetman

Is the Minister talking in terms of mileage length or road capacity?

Mr. Childers

I am talking of the number of cars per thousand miles. They are not distributed equally.

Mr. Sweetman

Neither are the roads as wide here as they are elsewhere.

Mr. Childers

The number of miles of road per thousand of the population in this country and in Sweden constitutes a European record. There is a scattered human population and a huge car population in relation to the income of the country with, at the same time, a lack of congestion and none of the conditions that prevail in so many European countries. In fact, we shall not be faced with those conditions even if the vehicle population increases very rapidly.

I should like to say, and I think this is important, that I am absolutely convinced, after regular conferences with the Chairman and Board of CIE, that the losses this year would have been anything between £3 million and £4 million, not the anticipated loss of £1,600,000 to £1,900,000 if drastic reorganisation had not taken place, including not only the closing of lines but also the tremendous effort made to increase the volume of road freight services. In a period covering roughly four to five years the volume of road freight has increased by some 58 per cent. The tremendous effort to reorganise the whole system through containerisation and pallotisation, and reducing the handling costs to the lowest possible level, is still proceeding. One of the great difficulties facing railways all over the world is the number of categories of goods that will not bear a double handling under any circumstances, that must be handled as little as possible if they are to be carried economically. Part of the reorganisation has been directed towards reducing handling costs of goods that take double handling. I regard that as progress even if CIE have failed to live up to the terms of the 1958 Act. I should think the loss would have been nearly twice as much if reorganisation had not taken place.

Mr. Dillon

These are quite fascinating statistics: you double the loss, halve it, then congratulate yourself, and dislocate your elbow patting your own back.

Mr. Childers

It is quite fair to say that the loss would be nearly double if reorganisation had not taken place.

Mr. Dillon

The loss would have been only a million, and we would have had a jubilee.

Mr. Childers

Deputy Sweetman asked about the future policy of CIE. CIE are making their own detailed study. A proper cost accounting system has been introduced and the services of commercial exploitation are now included. A great deal of accountancy work is being mechanised and it is possible now to prepare a plan and give a concept of its future in a far more definite way as a result of the reorganisation that has taken place. It is possible to draw deductions, make predictions and estimates in a way that was not possible before because of the lack of a modern cost accounting system. Allied to that study, a study is being made in my Department in the process of which we are considering the overall problem. We are helped by representatives of the Department of Local Government. The whole problem of transport is being studied. That study is proceeding somewhat on the lines of the agenda used by the Committee, under the chairmanship of Dr. Beddy, that reported on internal transport, but, of course, taking advantage of all the newer information we have and all the increased amount of information made available to us by CIE because of the change in their accountancy and costing methods.

I am quite sure that whatever proposals are made they will be based on the idea of providing an efficient service of transport with no prejudice against rail or road services, and one hope I have is that whatever proposals come from the Government, they will be based on a realistic approach to transport and not on a sentimental feeling for an empty railway.

Mr. Dillon

I heard that said in this House 25 years ago.

Mr. Childers

Deputy Sweetman asked whether CIE examined the possibility of making use of vehicles that travel both by rail and road and whether they also examined the economics of the smaller type of rail car. I asked the Chairman about that at least two years ago and he said all those matters were being examined and the receipts and expenditure estimated, and the result of the examination had not been favourable.

Mr. Sweetman

Why is it different from other countries?

Mr. Childers

I suppose the conditions are different.

Mr. Sweetman

No. It is comparable with countries I am talking about as regards density of population.

Mr. Childers

In the case of some services in Great Britain where the rail car was adopted, it was found that the traffic did not grow and that the costs were not met by receipts; a number of railcar services are on Dr. Beeching's list for closing, but that does not necessarily argue they could not be used here.

Mr. Sweetman

Not what I call the dual-purpose car.

Mr. Childers

I can only rely on the statement of the Chairman of CIE to the effect that these matters are being examined.

Mr. Sweetman

Surely in matters like this it is the duty of the Minister to see the basis upon which the examination was made. Surely he does not take the "say-so" just like that?

Mr. Childers

Once I accept the general efficiency of a costing system, I obviously cannot go into every single detail of the management of CIE. It is not my function.

Mr. Sweetman

One sees the basis upon which the decision was taken surely? I think that was one of the things the Minister said to-day.

Mr. Childers

That is one of the things of which I gave an account to the House a while ago, the modern accountancy system of CIE, the method by which they estimate the possible revenue of any length of railway line and the possible expenditure.

Mr. Sweetman

I am not talking about that; I am talking about the dual-purpose car.

Mr. Childers

I cannot help feeling that the purpose of the railway is to provide a fast continuous service. That is the description of future railway services by many a prominent director of railways in Europe. I cannot think of any better and such a service should be able to take goods that can bear double handling. It should be able to deal with a large volume of tourist traffic and with very large peak traffic at certain times of the year. A railway is really meant for long-distance travel. It should be noted that in this country the arterial roads are improving very rapidly. I hear complaints from members of the House that the effect of closing railway lines is to increase traffic on the roads but when plans come for major improvements to the arterial roads of the country, I never hear these county councillors saying that we had better be careful, that we need not turn the Dublin-Cork road into an autobahn as the years go by when there is a good fast railway service from Dublin to Cork.

Mr. A. Barry

Some of us have been saying it for years.

Mr. Childers

But it is going on just the same. The majority do not object and the work is proceeding and it simply provides more competition to CIE. It makes it inevitable that CIE train services will have to speed up and they are being speeded up in many cases by the closing of stations that are not used. The Chairman has told me he is quite convinced that a great deal of further reorganisation can take place to make CIE more efficient and he has not given up hope of effecting greater efficiency and reducing the cost of CIE in the future.

One of the Deputies referred to the damage that would be done to the roads by the withdrawal of rail services and I do think that in this case we should take an objective view. On 1st April, 1963, CIE published notice of withdrawal of rail services from 56 stations in the midlands and the west of Ireland. The replacement in terms of road traffic for the traffic that used to pass through those 56 stations will be two lorries, possibly with containers and trailers, eight additional lorries during certain seasons and four buses which will be required full time. If anybody tells me that that very small number of vehicles will wreck the roads contiguous to the 56 stations, I just do not believe it and nobody would believe it because, at many of those stations, not more than four or five people per train embarked and disembarked per day and in modern terms and if one studies the whole development of railways everywhere, one realises that such a railway is not really a railway at all. The train running along it, if it stops at that railway station, is a bus running on rails, stopping too infrequently and not serving the people half as well as if the service were replaced by a bus service.

Mr. Sweetman

All of which is a case for the dual-purpose car.

A Deputy

That is a new one.

Mr. Sweetman

Not at all. It has been used for years in other countries.

Mr. Childers

In connection with the railway closings announced in the autumn of 1962, these required the substitution of ten single-deck and two double-deck buses. To give a further example in connection with the Portlaoise-Kilkenny and Kilkenny-Deerpark line, the number of lorries required full time is four and the maximum number required for the peak season is five. In that particular case, no new bus is required at all. I mention that because if we had the problem that quite evidently exists in some countries where there is a real danger of heavy congestion on the roads and where the railway is losing although it is carrying a very considerable volume of traffic, it would be a different matter and we could argue the position here. However, in a great many cases the replacement of railway traffic means practically nothing as far as roads are concerned.

Deputy Sweetman also asked what we were doing to co-ordinate policy. I have already mentioned the fact that we have a study group in the Department and we have CIE presenting proposals. I should also make it clear that all through the operation of this Act I have had constant conferences with the Chairman, that I have had the accounts studied, that I have studied at all times the current effect of railway line closing, that I have studied constantly the effect on the roads of the number of vehicles required in replacement and the amount of capital improvement to the roads that will be needed, to be measured over a long-term period against the loss on the line. I have also asked for particulars of the volume of traffic secured on the substitute services, and very carefully examined the very rare complaints we have received when a railway line is closed. I am very glad to say that in some of the areas the traffic with the new road services is actually greater than it was on the rail services. I do not know of any case where there has been any marked diminution nor have I received any volume of complaints.

Deputy Tully compared CIE with the air companies. I remarked, and would like to repeat, that many millions of £s in capital have been wiped off the capital structure of both the GSR and CIE. CIE, if I remember correctly, have had some £16 million of capital written off over the past 15 years. There is scarcely any comparison between a new type of service such as the air companies and a service which is competing with a vast amplitude of private transport.

Deputy Sweetman made some very helpful and constructive observations on industrial relations in connection with State companies. The Minister for Industry and Commerce is responsible for industrial relations and for legislation concerning aiding to reduce the number of disputes taking place but I am also concerned with good industrial relations within State companies because I want the companies to be prosperous and the workers to feel happy and contented so that they will perform their work well and enjoy their service in the companies. I have a general interest in regard to these matters and I have asked all State companies to do all they can to see if they can improve communication between themselves, the trade unions and the workers and to ensure that every effort is made to examine all the most modern methods of so doing.

There are two aspects to this. There is the task of making sure that the workers in a State or in a private company have full information on the progress of the company, that they understand the objective of the company; what their own position and responsibilities are in relation to its progress so that they can fully understand the meaning of productivity and the advantages to the company and to themselves if productivity increases. Equally, it is very important for all State companies to do their utmost to improve communication between themselves, the unions and the workers.

The Chairman of CIE, Dr. Andrews, has himself a tremendously strong belief in good labour relations and is a firm believer in discussions at all levels. An example has been the formation of a great number of joint industrial councils within the railway system of CIE and, as the House knows, he recently announced that he is undertaking an inquiry to see whether he can have the same kind of communication in connection with the road service side of the company. The example has been set on the rail side exemplified by the number of questions relating to conditions of work, matters of detail in relation to particular sectors of the rail service and that can be discussed through those industrial councils at quite low levels and then passed on to the union executives, if necessary.

Deputy Tully chided me to the effect that I do not believe in wage increases for workers. I have never said anything of the kind. I made it perfectly clear in all the speeches I made both in relation to State companies and the economy in general in common with my colleagues that if the prosperity of the country grows the workers must share in it. I have never said anything to the effect that I believe in keeping wages down. What I said in regard to CIE is quite simple. The eighth round had different effects on different sections of the community and there were some sections where the labour cost, as a proportion of the total cost of production, was such that, for one reason or another, very efficient managements have managed to reequip themselves or, if they perhaps had not thought sufficiently of re-equipment, the eighth round of wages made them suddenly face up to the necessity of so doing and in certain cases they managed to cover the increased cost of labour by re-equipment and reorganisation.

What I did say was that when the labour cost of operating a service, as in the case of CIE, is over 60 per cent of the total cost, such a company is bound to be more affected than others by a wage increase of 20 per cent which compared, for example, with the national average wage increase of 12 per cent as at September, 1962. That is what I said. Also, CIE has been reequipping itself but it is quite obvious that with so huge a labour content it would be impossible for it to catch up on that big wage increase in a very short period. What I still feel is that, as has been suggested by the Taoiseach recently in connection with his plan for an accepted growth of wage remuneration in relation to the growth of national income if wages, for instance, had risen at a more steady rate and not quite so much at once it is possible that CIE would not have lost so much traffic and the need might not have arisen to have passed on so much extra to fares and the position would have been better for them and, in the long run, for the workers. But that matter is arguable. If the workers felt that they were entitled to get a very large increase relative to the increase secured by the community as a whole, for one reason or another, and if that is so it is a matter for CIE and the unions.

What I said was that it was just in the nature of things that a company with 64 per cent labour content was bound to be affected by a 20 per cent increase in wages and would be unable to defend itself and would inevitably suffer adverse effects, whereas possibly if that wage increase had taken place smoothly over a period of years the result might not have been so serious. In any event the Taoiseach has made this matter perfectly clear and has made these suggestions for national consideration of wage levels in relation to the growth of national income and whatever the result may be I have not heard any very great criticism but a good deal of praise for his suggestions which form a normal part of industrial negotiation machinery in many north European countries.

Deputy MacEoin asked about the payment of redundancy compensation. The basis for these payments is laid down in the Act and the basis in relation to the payment of CIE workers cannot be varied. In certain cases there is an appeal to an arbitrator and the matter, I think, is being handled very successfully by the unions and CIE. I have had a number of complaints but very few in relation to the number of people who have been made redundant.

I think I have covered all the points raised and I should like to thank Deputies for their constructive statements on this occasion which I consider have been very helpful.

Question put and agreed to.

Committee Stage ordered for Thursday, 6th June, 1963.