On the occasion of the debate in the Dáil on the Supplementary Estimate for Transport and Marine Services which I introduced on 27th November, last, I outlined in general terms the transport policy settled by the Government following consideration by them of the Report of the Committee of Inquiry into Internal Transport which reported in May, 1957. I indicated that legislation would be introduced to give effect to this policy and also to provide for the expected amalgamation of the G.N.R. undertaking within our territory with C.I.E. as from the 1st October, 1958.
The present Bill, however, deals with C.I.E. matters only. Because of the necessity for parallel legislation in the Six Counties and because of the necessity to settle a number of minor but complicated details which arise out of the termination of the agreement between the Government here and the authorities in Belfast, it has been found more convenient to deal with the affairs of the G.N.R. in a separate Bill which got a Second Reading in the Dáil yesterday, and which, I hope, will soon reach the Seanad.
The main object of the present Bill is to implement with certain important modifications the main recommendations of the Committee of Inquiry into Internal Transport. As I have already made clear, the Government have not accepted the specific recommendations in the report relating to the reduction of mileage of railway line or the number of stations nor have they accepted as the pattern of the future railway system of C.I.E. the map which is published in their report. The committee made it clear that they did not intend to specify the particular sections of line or the stations which should be closed down and gave their views in this respect by way of illustration only.
It is the Government's view, with which I feel sure the Committee would agree, that the actual implementation of such a policy could be undertaken only by the Board of C.I.E. who have day-to-day administrative responsibility and access to all the relevant facts. The Bill empowers the board to close down any line or any station for which there is clearly no future and to do so on their own decision and without having to seek the prior approval of the Transport Tribunal. They are, however, given a statutory direction not to terminate any particular rail service except where they have first satisfied themselves that there is no prospect of its continued operation being economic within a reasonable period.
The board are also placed under the general obligation so to conduct the undertaking as to eliminate losses by 31st March, 1964. This means, in effect, that the fate of any particular line, station or service provided by C.I.E. will depend on whether sufficient business is generated to justify its retention and the future of such lines and stations therefore will depend primarily on the amount of local support which is given to them. Local communities will have to make up their minds that they can keep a railway service only if they are prepared to support it.
C.I.E. are being relieved also of the obligation, under the existing law, to provide alternative road transport services where rail services are terminated. It may be that in outlying districts or, in particular circumstances, it would not be economic for C.I.E. to extend their road transport organisation to deal with a small volume of traffic of an essentially local nature. There would be no point in permitting C.I.E. to close down a line where there was not sufficient traffic to justify keeping it open and then putting on them the obligation to substitute some other service, which, by their methods of working, might also involve them in losses. Where C.I.E. do not provide alternative road services, I will be prepared to consider applications from local private interests for such road passenger or merchandise licences as may be necessary to provide adequate services in such areas.
The principal function of the Transport Tribunal set up under the Act of 1950 was to consider applications for the termination of rail services or the closing of unused canals to navigation, and as that function disappears with the granting of complete autonomy to C.I.E. in these matters, there will be no further justification for the continued existence of the tribunal. The statutory provisions under which it was established are, therefore, being repealed. I am sure the Seanad will join with me in expressing my appreciation for the very fair and satisfactory manner in which the members of the tribunal have carried out what must have been at times a most unenviable task.
It is also proposed to relieve the Board of C.I.E. of the obligation to maintain unused canals in navigable condition but they must continue to maintain them for purposes of draining and prevention of flooding. Under the Act of 1950, C.I.E. already possessed the necessary powers to terminate their own canal services, if they should decide to do so.
The board are also being relieved of various obligations, including what are known as common carrier obligations, which have hitherto restricted the commercial adaptability of the undertaking. They will, in consequence, be able to vary their charges, to quote one merchant a lower rate for carrying all his traffic than they might quote another merchant for the carriage of part only of his traffic in the same goods. Whatever justifications there were for the imposition of these restrictions on railway undertakings in the past, when railways were the only practical method by which substantial quantities of goods could be conveyed over long distances, they have been undermined by the development of private road transport since then. It is hoped that this commercial adaptability which is now being given to C.I.E., this new freedom, will help them to stem the loss of traffic from the railways and perhaps even to win some of it back again.
The proposed legislation will relieve C.I.E. of very considerable liabilities. The 3 per cent. transport stock 1955-60, amounting to almost £10,000,000, will become a Government loan and the interest thereon the direct responsibility of the Minister for Finance. The board are relieved of the liability to repay to the Exchequer advances amounting to £1.8 million made in 1956-57 towards capital expenditure and for the redemption of guaranteed bank overdraft used for capital purposes. In addition, provision is made for the write-off of advances totalling £4.8 million made to C.I.E. from the Exchequer up to the 31st March, 1958 to meet transport stock interest.
In short, liabilities are being written off which amount to a total of £16,500,000 and annual interest charges of £632,000 per annum. It may be said that these are only paper reliefs—and to an extent that is so—and that C.I.E. could never have met these charges in any case. That may be true, but these charges are, nevertheless, very real charges which must be met by the taxpayer. These reliefs should contribute to the improvement of the morale of the whole organisation by giving it a financial structure which is realistic and financial obligations which C.I.E. can hope in favourable circumstances to meet in full.
It cannot be expected that any reorganisation measures which the Board of C.I.E. would put into effect would be adequate to achieve solvency immediately and indeed the Bill envisages that the board will not have achieved that position for five years. Financial assistance from the Exchequer will be necessary in the meantime to meet losses. The Bill provides for the payment to C.I.E. of a non-repayable grant of £1,000,000 in each of the five years commencing on 1st April, 1959. This grant relates only to the present C.I.E. organisation. Provision is made in the Great Northern Railway Bill for an increase of £175,000 in this figure to meet the needs of C.I.E. after the amalgamation with the G.N.R. has been completed. It may be that this annual sum will not be sufficient in the earlier years and C.I.E. will have to resort to temporary borrowing to tide them over. I would hope that it would be more than sufficient in the latter years and that C.I.E. would be able to pay off temporary borrowing and perhaps have something left over to carry on with if complete solvency had not finally been reached by 31st March, 1964. These annual payments must cover all the needs of C.I.E., including payment of stock interest, other than capital expenditure. The reorganisation of the undertaking, including the dieselisation programme, is nearly completed and further substantial capital expenditure is not expected. Any capital expenditure which may prove unavoidable should properly be financed from a stock issue.
Compensation is provided under the Bill for staff who suffer a worsening of their conditions or lose their employment as a consequence of the termination or permanent reduction of train or canal services or the substitution of diesel for steam traction. The provisions correspond with those in the Acts of 1950 and 1955 with certain important modifications. The current scales of railway compensation date from an Act of 1924. The generosity of the scales of compensation are, to my knowledge, unparalleled elsewhere providing as they do maximum compensation for life at a rate equivalent to two-thirds of remuneration at the time employment terminates. In 1924, so far as the records show, it was not foreseen that any widespread redundancy would ever arise on the railways and it was, no doubt, thought well to deal very generously with the few cases where it might prove unavoidable. As that Act affected the amalgamation of a number of companies, redundancy was anticipated only in the higher executive grades of employees.
Moreover, the obligation to pay compensation was put upon the railway companies, whose ability to pay the compensation depended on their solvency. Under this Bill, responsibility for compensation in respect of future redundancy is transferred to the Exchequer and becomes, therefore, a charge upon the taxpayer. Nevertheless, the Government do not feel, in the light of the recommendations in the Report of the Committee of Inquiry, that they would be justified in effecting any significant reduction in the scales of compensation, although Senators can understand that I was pressed to reduce them to the level which would apply in the ordinary public services. A civil servant, for example, who became redundant because of the termination of the work on which he was engaged, would not be entitled to compensation on that generous basis. We did, however, feel it to be necessary to remove certain anomalies.
It is difficult to justify a situation in which a man receives compensation at a level as high as two-thirds of his remuneration for his whole lifetime, when, if he had never been redundant, he would have gone on pension, not later than 65 years of age, at possibly a much lower figure.
It would seem appropriate that compensation for loss of employment should apply only over the years of potential employment and that compensation thereafter should be at a lower figure in respect of the pension which the worker could have reasonably expected if he had continued at his work. It is proposed, therefore, that at the age of 65 the compensation pension will be reduced by basing it on 1/80th of annual remuneration for each year of service instead of 1/60th. On this basis maximum compensation will be reduced from two-thirds remuneration to half remuneration at the age of 65. There is provision, however, whereby a redundant employee in receipt of a railway superannuation pension may apply it, in so far as it is sufficient, to effecting a reduction in compensation pension which takes effect at the age of 65. Civil Service and Army pensioners who may be employed by public bodies are liable to have their pensions abated in respect of the remuneration they draw from such employment. It is equitable that that principle should be applied also to persons drawing railway compensation especially now that the cost of such compensation will have to be met by the Exchequer. It is provided, therefore, in the Bill that pensions will be abated while the recipient is in the employment of a Government Department, State-sponsored body or local authority.
In the course of my reply on 5th December, 1957, to the debate in the Dáil on the Supplementary Estimate for C.I.E., to which I have already referred, I drew attention to the findings of the Committee of Inquiry on the subject of staff redundancy in C.I.E. I pointed out that this was primarily a matter for the trade unions catering for railway workers who must reconcile the somewhat conflicting aims of firstly making the employment of their members engaged in railway operation more secure and secondly keeping the maximum number of them in employment. I suggested that the trade unions and the management of C.I.E. should get together for the purpose of working out what the minimum staff needs of an efficient railway organisation would be and should consider what alterations in rules or working methods might be made or what other measures might be adopted to bring the staff employed by C.I.E. on railway operation down to the minimum required for efficient operation and thus make more secure the employment of those who will continue to be engaged in railway work.
I later asked the Chairman of C.I.E. to discuss that plan with the trade unions and to seek their agreement to a programme of reorganisation which could be submitted to me with proposals for the necessary extension of the redundancy compensation provisions to facilitate it. No comprehensive agreement on such a programme could be reached at this stage and following further consultation with C.I.E. and with the representatives of the trade unions I asked the Dáil to approve an amendment to the Bill which is now incorporated in it whereby the compensation may by ministerial Order be extended to cover redundancy arising from any scheme for the reorganisation or more economical working of any department of the undertaking affecting any section or category of workers.
I should point out in this connection that for those who will be affected by the reduction in railway employment which sooner or later will become inevitable, it could well be to their advantage to avail themselves of the compensation provisions which will apply to those losing their employment over the next five years. Having regard to the heavy cost to an already overburdened Exchequer which may be entailed by the present rates of compensation I can, of course, give no guarantee that any compensation provisions which may be introduced to replace those in the present Bill on the expiration of the five-year period will be either as extensive or as generous.
Provision is also made in this Bill to give effect to the recommendation of the Committee of Inquiry for the prescription of minimum fines and the non-application of the Probation of Offenders Acts in respect of second and subsequent convictions for breaches of the Road Transport Acts. That recommendation was directed towards the reduction, if not the elimination, of the abuse of illegal haulage by road vehicles for hire which is at the root of the whole of our transport problem and which is operating to make it more difficult for C.I.E. to secure the volume of traffic which would enable it to operate remuneratively.
The Bill also contains provision authorising farmers to carry their neighbours' live stock for reward by tractor and trailer in certain limited circumstances without a merchandise licence. The opportunity is also being taken to carry out some amendments to both the Railways Acts and the Road Transport Acts to facilitate administration and the operations of the railways. It is unnecessary to say anything about them at this stage. Senators will no doubt express their views on a later stage.
This is one of a series of Transport Bills to deal with the problems of internal transport here and the inability to bring about the situation in which a public transport organisation can operate without heavy subventions from the Exchequer. I have frequently expressed the view that public opinion is moving against the continuation of these subventions. It therefore behoves all those interested in the preservation of the public transport organisation to co-operate in measures designed to minimise the need for external help and to enable the service to be operated without loss.
I think the proposals in this Bill will make it possible for C.I.E. to reach that situation. One cannot be overconfident in view of the disappointment of past hopes but certainly the new commercial freedom which we bring to the organisation, the substantial financial reliefs for which the Bill provides and the assurance of financial assistance at a fixed rate over a definite period should make it easier for the Board of C.I.E. to plan the alterations in the system which will enable it to get into a situation where losses can be avoided.