I move that the Bill be now read a Second Time. In moving the Second Reading of this Bill, I think I should preface my observations by stating that this is a Bill designed to facilitate a long-term transport policy, and has no special relationship to the transport difficulties which have been created for this country by the emergency, difficulties which have become so accentuated in recent weeks. The policy which this Bill is intended to facilitate will not come into full effect until the emergency has passed, and its enactment will not minimise in any way the present transport difficulties. I should like to urge Deputies to consider the Bill, and determine their attitude towards it, as part of our post-war plans. It is in every way unfortunate that the introduction of this Bill should coincide with a temporary transport crisis. I expect that Deputies will not find it easy to forget the present acute difficulties in considering the Bill, and each of us will find it hard to visualise the transport circumstances in relation to which this Bill is designed. In considering the arrangements which it is desirable to make in relation to the post-war situation, we are dealing with something we cannot foresee with any exactitude, and we are likely, therefore, to allow the picture—the mental picture which we draw for ourselves— to be coloured by present circumstances. It may help to mark the acute distinction between the circumstances now existing and the circumstances which existed in relation to transport before the emergency—and which may exist in relation to transport after the emergency—if I point out that, in giving evidence to the Railway Tribunal, one of the major transport operators in the country stressed the view that their problems and the problems of other companies engaged in public transport, arose out of what they then described as an uneconomic excess of transport facilities. Nobody will suggest that we are suffering from an excess, uneconomic or otherwise, of transport facilities now.
I know that some Deputies and some members of the public have had suspicions that some of the measures which were adopted to deal with the emergency transport difficulties, particularly the measures relating to road transport, were designed with an eye to a long-term transport policy. It is probable that the publication of the detailed provisions of this Bill will have removed those suspicions, but in case there are any lingering doubts on that matter, I should like to emphasise that this Bill represents the whole of the transport policy which the Government has in mind. I should like particularly to stress that this Bill was not framed with any intention other than to deal with a situation which will be similar in essence to that which existed in 1938, when the decision to establish a transport tribunal was taken. I should like also to emphasise that the current restrictions on railway transport were not even contemplated when the Bill was being drafted. Further, I should like to express the hope that these restrictions can be withdrawn before the end of the emergency. I should like even to express the hope that it may be possible to modify them before the Bill is passed, although the expression of that hope is probably unwise because the grounds for it are all too slender.
Deputies may ask why a Bill which is designed to facilitate a long-term transport policy and which cannot become effective in its results on the transport situation until after the war should be proceeded with now, why the Government should take the risks involved in having this measure debated in the atmosphere of a temporary transport crisis. The answers to that question are twofold: The Government contemplates that the immediate post-war situation will be one of critical significance in the future economic development of the country. It is our view that we should get ourselves organised now in every important economic sphere to face the problems and to avail of the opportunities which that post-war period may bring. It is contemplated that other measures to that end will also be introduced. I think it will be common ground amongst us that cheap and efficient public transport facilities are vital to national economic development. The Government, holding that view strongly, considers that it is desirable to bring into existence now the organisation which will be responsible for the provision of these facilities after the war, assuming that it is common ground amongst us that such an organisation does not now exist. It is deemed desirable that the officers of that new organisation should know that they will have the responsibility, that no further legislative changes are contemplated, and should be able to perfect their plans with the knowledge that they will have available to them the powers and the financial resources necessary to deal with the problem.
It is for these reasons that the Government decided to proceed with the preparation of this measure. It took that decision last year, aiming to have the Bill come into effect in the middle of the present year. As Deputies are aware, the preparation of the measure involved the submission to the shareholders of the existing transport organisations of proposals which affected their interests. The Bill has been framed with the operative date of 1st July. It is the view of the Government that, because of the nature of the Bill and because of the publicity already given to its more important provisions, its enactment should not be delayed. It was on that ground that it was deemed desirable to proceed with the measure despite the new transport difficulties which have developed so rapidly since the Bill got its First Reading in the Dáil.
If it should not prove practicable to secure the enactment of the measure so as to permit of the operative date being the 1st July, then, for a number of reasons relating to the finances of the Bill and other matters, the operative date would have to be postponed to the 1st January. A date commencing at the beginning of a half year would be necessary.
It is for these reasons the Government decided that it was desirable to proceed with the Bill, but when introducing it here it is presumably necessary to demonstrate why any Bill is considered necessary. Why is it, in the view of the Government, desirable that we should have new transport legislation? I think that it will be generally agreed in the House, and I am sure it will be generally agreed throughout the country that the prewar position in respect of our public transport services was thoroughly unsatisfactory. Outside the municipal area of Dublin, the public transport facilities were neither efficiently directed nor sufficiently extensive nor cheap enough to promote national economic welfare. The main transport operator, the Great Southern Railways, Company, was in a precarious financial position in the months immediately preceding the commencement of the war. It was unable then to find from revenue, that is, the income it obtained by the sale of transport facilities, sufficient funds to provide adequately for the maintenance and improvement of its equipment. It was incapable of procuring new capital on reasonable terms to finance new developments. The Railway Tribunal in its report stated bluntly that the company's financial position was such that it was not possible in the circumstances then existing to raise further capital through ordinary commercial channels. In fact, it appeared to be rapidly approaching a situation in which it could not even meet its running expenses, that is, find from its gross revenue sufficient funds to pay the wages of its employees, the cost of fuel and other equipment, and meet its debenture interest.
The Government was, therefore, forced to recognise, in 1938, that the earlier transport legislation which we had introduced and enacted in 1932 and 1933 had not produced the results which were then anticipated. The reasons why that legislation failed to produce the anticipated results I will deal with later. In 1938 the Government had to face the fact that the results anticipated from the earlier legislation had not emerged and that new transport legislation was required. That decision of the Government in 1938 led to the establishment in December of that year of the Transport Tribunal. The Transport Tribunal's Report was submitted to the Government in 1939 and was published some time later. I should like to advise Deputies who are anxious to familiarise themselves with the nature of our peace-time transport problem to study that report. They will find in it a wealth of historical and statistical data which will be very useful to them. It was, I think, one of the most informative reports ever published.
It may, of course, be contended that, despite the disappointment of the Government with the results of the 1932 and 1933 legislation, new legislation was not essential, that the unsatisfactory situation was due to incompetent management of the Great Southern Railways Company and that, given better management, the situation could be remedied without new legislation or without Government interference. The Government was unable to accept that point of view It had, of course, no power under statute to enforce changes in the management or in the organisation of the Great Southern Railways Company. It had no evidence that such changes would be made by that company on its own initiative. It had no belief that changes of management and organisation within the framework of the Great Southern Railways Company would suffice to overcome the bad traditions of the organisation, or to promote, with sufficient speed, the development of a sound outlook within it, upon its own responsibility to the nation and its functions in relation to national and economic development. It did not believe that any scheme based upon the Great Southern Railways Company would inspire public confidence.
It was also forced to recognise, because of the circumstances to which I have referred, which were revealed by the report of the Transport Tribunal, and admitted by the management of the Great Southern Railways Company, concerning the difficulty of that organisation in procuring fresh capital, that any transport reorganisation scheme involving new capital of substantial measure could not be operated, unless the Government was prepared to assist in finding that capital, and it will be recognised and, I am sure, agreed by the Dáil, that if the Government accepted any financial obligations in relation to the undertaking, it should necessarily, in the interest of the taxpayers, also undertake the duty of supervising the company's management. The Government, therefore, decided that the situation was such that it could not be met merely by patching up the Great Southern Railways Company, that it needed a new organisation, with a new legislative basis; a new financial structure, a new relationship with the Government and the public, and even a new name to signalise the break with the old traditions.
It may help Deputies to understand why the Government arrived at that decision, if I give a brief history of the transport legislation of this State since it was established. Deputies will find in the report of the Transport Tribunal, to which I referred, a much fuller account of that legislation and of the aims of those who drafted it. The principal landmarks in our transport legislation since 1924 are the Railways Act, 1924, the Railways Act, 1933, the Road Transport Act, 1932, and the Road Transport Act, 1933. The Railways Act of 1924 provided for the incorporation in the Great Southern Railways Company by a process of absorption or amalgamation of 26 separate railway concerns which, at that time, operated exclusively in the area of this State. The amalgamation secured by the Act of 1924 had the effect of keeping open for traffic for a time a number of lines which would otherwise have been obliged to close, and it resulted also in considerable economies in railway working. I would not like to suggest that all the economies which were subsequently enforced proved by experience to have been wise. Some of these economies, I think, proved unwise. I refer to such measures as the singling of the main line to Galway. I think those familiar with our transport problems will now admit that that was a mistake, and that the board of the new company, when established, will, at some stage, have to consider whether it is desirable to undo that. Apart from these matters, there were substantial economies in railway expenditure secured as a result of the amalgamation of these separate 26 railway undertakings. This reduction of railway expenditure, however, did not produce a corresponding reduction in railway charges. It failed to do so by reason of the development of public services operated on the roads, which began about 1924 and developed with very great intensity in the following years. The Act of 1924 contemplated that the Railway Tribunal which was established by that Act, with the functions given to it under that Act, should prepare a scale of charges for various classes of traffic which, if made operative, would secure for the Great Southern Railways Company—the company which emerged from the amalgamation of 1924—a pre-determined standard of revenue of £1,170,000 which, it was estimated, would be sufficient to permit the normal renewal expenditure of the company, and also provide for the payment of debenture interest and a reasonable dividend upon the various classes of stock. Because of the development of road transport, to which I have referred, the company never found it possible to enforce the standard charges determined by the Railway Tribunal, except in respect of a very small proportion of its traffic, with the result that the financial position of the company deteriorated seriously and rapidly.
When the present Government came into office the financial position of the company was so critical that it was obvious that further steps would have to be taken. It was decided then, in consequence of the new transport situation which had developed from the mass production of road transport vehicles, that there was no prospect of the Great Southern Railways Company ever earning sufficient revenue to remunerate the capital of £26,000,000 with which it was incorporated in 1924. The Railways Act, 1933, effected a compulsory reduction of that capital of £26,000,000 to something under £12,500,000. When considering the provisions of this Bill I should like Deputies to keep in mind that figure of £26,000,000, which represents the original capital of the Great Southern Railways Company, and which was in itself a substantial reduction upon the aggregate capital of all the companies which had been amalgamated with the Great Southern Railways Company. This Bill should be examined in relation to the legislation that has gone before. The Act of 1933, enacted against the will of the shareholders of that company, and despite a great deal of agitation in financial quarters, effected a compulsory reduction of the capital of the undertaking by more than half, from £26,000,000 to £12,500,000, the balance of the capital being written off. It was regarded as lost capital represented by closed branches, unremunerative equipment and other losses which could not be recovered.
Up to 1932 it was open to any person to operate a road transport business. There was, in fact, a period in which anybody could engage in a road transport business except the statutory transport operators. The only people who were, by legislation, prevented from operating on the roads at a certain period were the railway companies and the Dublin United Tramways Company as it then was. The result of that situation—the unrestricted operation of road transport businesses—was, from every point of view, unsatisfactory. Not merely did these road transport businesses spring up in great number, not merely did their number result in very unsatisfactory conditions of employment for those engaged upon them, as I am sure Labour Deputies will remember, but they had very serious repercussions upon railway services. The Road Transport Act, 1932, imposed upon all road passenger business a measure of control by means of a licensing system which was designed to limit new entrants into that business and secure improved standards of operation. That Act also granted to the statutory companies additional powers to engage in road transport themselves: to engage in road transport both for passengers and for merchandise, and gave them power also to acquire, by agreement, other undertakings engaged in road transport.
The Road Transport Act of 1933 dealt with merchandise road transport services as distinct from the passenger services dealt with by the Act of 1932, and it had practically the effect of confining the operation of merchandise road transport services—that is the carriage of goods for reward on the roads outside certain defined port areas—to the statutory companies or to persons who got under that Act a licence to engage in that business. The issue of these licences was confined to persons who had been engaged in the business of operating a merchandise service on the road before the passing of the Act. The Act provided also for the compulsory acquisition of passenger and merchandise licences by the statutory companies.
It was contemplated that that legislation would enable these statutory companies to put themselves into the position in which they could achieve not merely financial security for themselves but also the main transport aim of the Government, which was to ensure that there would exist transport facilities extensive enough and cheap enough to promote national economic development. When in 1938 it was obvious that the aims of the Government in enacting that legislation had not been secured, the Transport Tribunal was set up. It was set up by resolution of the Dáil and Seanad to inquire into the position of public transport in general, and in particular into the circumstances contributing to the unfavourable financial position of the railway companies. The principal recommendations of the majority of the members of that tribunal, in so far as they related to the Great Southern Railways Company, were that the existing board of seven part-time elected directors operating through a general manager should be replaced for an experimental period of five years by a board of three members, consisting of a chairman nominated by the Government, and two shareholders' directors, the board to be assisted by two whole-time controllers. It recommended that the company's borrowing powers should be increased, and that the Government should guarantee the issue of £1,250,000 debenture stock. It recommended the creation of a special fund to be raised through the imposition of additional taxation upon motor vehicles, that fund to be available to meet any deficit in respect of the Great Southern Railways Company debenture interest. The Transport Tribunal found, in effect, that the difficulties and the ineffectiveness of the Great Southern Railways Company were due, in large measure, to its failure to reorganise its business so as to bring the most modern methods into proper perspective, or into coordination with, or where necessary in substitution of, the older facilities. The provisions of the Transport Acts of 1932 and 1933 had not, it reported, been applied with efficiency or foresight, and the undertaking, they said, still remained one of unequally developed, unco-ordinated and, sometimes, antagonistic parts. The same state of affairs existed in the Dublin United Tramways Company up to the year 1935, about which time, however, the company began effectively to apply the policy of the Road Transport Acts and to become, in a fuller sense, a transport company.
It will be noted by Deputies who have studied the report of the Transport Tribunal that it recommended only temporary measures, and, in effect, postponed the finding of a permanent solution of the problem they were investigating. The provisions of this Bill will indicate that the Government did not consider its recommendations adequate for the situation. The Government, therefore, decided that new legislation was desirable. In framing legislation, the first matter to be considered is the aim to be achieved by that legislation. I think we will find that there is amongst the various members of the Dáil not very substantial differences of opinion as to what the aims of all transport legislation should be, and the purpose we should try to serve by reorganising the transport situation generally. It is the belief of the Government that the maximum development of the nation's economic resources and of its economic potentialities requires the provision of public transport facilities so extensive, so related to the varied needs of different localities and different industries, and so co-ordinated and directed as will provide the best possible services at the least cost to the community. That, I think, will be agreed as a general statement of policy. There may not be similar agreement concerning the Government's belief that a fully developed transport system operating on road and railway, extending into all parts of the country, and providing in all parts of the country full transport facilities, can be operated on a remunerative basis. I mean by that, earning from the sale of transport facilities sufficient revenue to cover all its operating costs and its overhead expenses to meet the interest charges upon its capital, and to provide, over and above, the reserves which are necessary to finance its further development.
The Government does not believe in subsidised transport facilities. I think it will help Deputies if I make that as clear as I possibly can. It is not merely that the Government objects to having placed upon it the onus of imposing taxation to secure revenue with which to finance transport subsidies. Even if there were no Budgetary difficulties, even if we could get the agreement of all Parties in the House as to the taxes to be imposed for that purpose, the Government would oppose any such proposition, because it does not believe in subsidised transport. It sees no advantage whatever in saddling the industry and agriculture of the country with new taxation for the purpose of subsidising transport facilities. It believes that subsidised transport will inevitably mean inefficient transport and will ultimately result in an increase in the cost of transport to the community as a whole.
Our national economic development requires that our public services, including our transport services, should be thoroughly efficient. It requires also that they should be self-supporting. The burden which is placed upon trade and industry by inefficient public services—and particularly by inefficient transport services—would not be any lighter if we decided to subsidise transport, if we reduced transport charges to an uneconomic level and made good the difference by imposing an additional burden in another form, a form of taxation upon the country's producers. If for any temporary reason we acquiesce now in a transport policy based upon subsidies, we will, in the belief of the Government, have placed shackles upon the national progress, shackles which will have to be painfully removed at some future time.
The Government does not believe in the efficacy of competition in promoting efficiency in public transport services. Whatever theoretical case may be made for competition in encouraging efficiency or stimulating enterprise in other commercial spheres, it can, in relation to transport, undermine the stability of the services which are necessary to the national commercial life and it can, in its effect, do irreparable damage to the public interest. The Government believes, as its earlier legislation demonstrated and as many public statements by members of the Government have emphasised, that the maintenance of our railway services, now and in the future, is the kernel of our transport problem. Our experience during the war years has clearly demonstrated that the railways remain the backbone of our transport system, and it is the Government's view that no transport policy is sound unless it makes ample provision for the maintenance of the main line railway services. To make provision for that purpose, the only practicable method is to secure for them sufficient traffic to permit of their profitable operation.
We had these aims in mind when we were preparing the legislation of 1932 and 1933. If that legislation did not achieve those aims, it was because we made then the mistake of assuming that the transport companies which were favoured by that legislation would take full advantage of the opportunities then given. They failed to do so. That fact became clearly recognisable as early as 1938. If Deputies criticise the provisions of this Bill on the grounds that the Great Southern Railways Company failed to give satisfactory services in the past, failed to give those services despite the quasi-monopoly situation which was created for them by legislation, I will reply that it is precisely because that company did not rise to its opportunities and to its responsibilities that new legislation is now necessary, legislation which provides, inter alia, for the disappearance of that company.
These were, and are, the aims of the Government's transport policy. If we can get agreement upon those aims, we can proceed with the consideration of this Bill solely upon the basis as to whether the machinery the Bill proposes to create is the best that can be devised to secure their achievement. We can, I think, however, go further than that in determining what would be common ground, as between the various Parties in this Houses, in relation to transport legislation and, in fact, common ground to all schemes for transport reorganisation. There are certain essential things, in the public interest, which must be provided for in any transport scheme. Whether we decide to proceed upon the basis of nationalised transport or a public transport company or independent private operators, there are safeguards which must be inserted, in order to ensure that the public interests are protected against the transport operators, no matter who they may be.
I have already stressed the importance which the Government places upon the provision of cheap and efficient transport facilities, in relation to the future economic development of our country. The provision of cheap and efficient transport facilities in our circumstances involves, so far as railway transport is concerned, at any rate, over the greater part of the State, an almost complete scrapping of existing transport equipment. The railway equipment which Córas Iompair Éireann—the corporation which it is proposed to establish under this Bill—will acquire from the Great Southern Railways Company is very largely obsolete. Not merely is it largely obsolete but it is to an entirely uneconomic extent unstandardised. It will be necessary, at the earliest moment, for whatever organisation we set up to take over the responsibility of transport operation, to replace the existing equipment with new equipment, designed to meet modern requirements, standardised to secure economy in maintenance and adequate to meet all the demands upon it. If our transport organisation set up as a result of legislation enacted here is to provide such new equipment, it must be able to command new capital freely and cheaply.
The first feature, therefore, which, in my opinion, must be common to any transport scheme, is adequate means of ensuring that the transport operating organisation will be able to get new capital in sufficient measure, to get it freely and to get it cheaply. The second essential provision in all transport legislation must be some effective means of ensuring that the management of the transport organisation will be conducted in accordance with the requirements of public policy; that the Government of the day will have power to insist that the transport organisation will be directed so as to facilitate the achievement of its economic aims. Furthermore, there must be provision to ensure that there will be adequate control by a public authority over the charges that are made for transport facilities of all kinds and in all circumstances. Fourthly, there must be provision to ensure that the public authority will have ample powers to insist upon the provision of adequate transport facilities in all parts of the country. Fifthly, there must be ample safeguards to prevent discriminatory treatment of individuals using the transport facilities; safeguards to ensure that there can be no discrimination as between one individual and another, as between one harbour authority and another; to ensure that all transport facilities will be equally available on equal conditions to all interests.
It is my view that these provisions must be common to any comprehensive transport scheme; but, subject to these essential provisions, and subject also to whatever legislation may be enacted to control conditions of employment in transport undertakings or relating to social services, it is the Government's view that the transport organisation, no matter how constituted, no matter how directed, should be left free to run its business as it thinks best; that it should be relieved from the restrictions which were imposed by earlier legislation upon statutory transport undertakers, restrictions which were, in the main, designed to deal with conditions completely different from those which now exist.
I have stated what the Government consider should be the aims of our transport policy, and I have stated what the Government consider should be regarded as essential provisions in any transport legislation that may be agreed upon. I now turn to consider what type of organisation should be set up for the purpose of implementing the transport aims I have outlined. The Secretary of the Labour Party was good enough to send me a copy of a report of a committee of that Party which dealt with this matter of transport policy, in which the decision was to recommend here the adoption of the policy of nationalisation. I would like to say a few words about this question of nationalisation in relation to public transport. The Government considered very carefully the advisability of nationalisation of transport. It had certain predilections in favour of that course because, at an earlier stage, it had seemed to us the only way out of the situation that then existed. If it decided against the policy of nationalisation in the full sense, it did so, not because of any theoretical objections or stupid prejudices, but because it came to the conclusion that there were a number of practical considerations which made such a policy, in relation to present circumstances in this country, undesirable.
It is usual to refer to transport as a public service comparable with the postal and telephone services, with certain municipal services and with the electricity supply and, on that basis, to urge that, as nationalisation or public ownership was considered satisfactory in relation to these other services, a precisely similar case could be made for nationalisation in relation to transport services. I want to submit that there is not the complete similarity between these services, as is sometimes suggested. These other services are all operated entirely free from competition, either direct or indirect. In theory a man could deliver his own postal packets, draw his own water, or generate his own electricity, but in practice the cost and inconvenience are so great that, except in very unusual circumstances, he will not attempt it. Transport can never be free from competition in the same sense.
I think it is well known to all persons who have studied this problem here, that in recent years the most deadly competitors of public transport operators have been the private lorry and the private passenger car. It is obvious that if the public transport services are inefficient or unduly costly, the number of such vehicles will increase rapidly. That was the situation here; that has been the situation in every other country.
If, therefore, we decided upon a policy of nationalisation, if a State Department is to be given the responsibility of operating our public transport services, just as State Departments operate the postal or telephone services, and if that service should prove to be inefficient, or if it should prove to be unduly costly, whatever about inefficiency—and I am convinced that in the long run it will be an unduly costly method of providing transport—then the State would almost inevitably be forced to impose on private transport restrictions which do not now exist, by means of taxation or otherwise. Even if we had to contemplate the possibility of a nationalised transport service operating side by side with completely unrestricted private transport, it will be agreed that nationalisation of transport must involve all forms of public transport. The committee of the Labour Party which recommended it recognised the logic of that contention and they themselves, in their report, propose that all the licensed operators of public transport, in addition to the statutory companies, should be compulsorily acquired by the nationalised undertaking. I think that is an inevitable consequence of nationalisation, but I do not agree it is good policy.
There are approximately 900 independent licensed public transport operators at the present time. I think it is desirable that they should, in the main, continue to operate. I do not say that there never again will be any renewal of the decision to acquire some of these licences, but except perhaps in the case of licences which authorise operation over the whole of the State for all classes of merchandise, it is my view that, in present circumstances at least, the continued existence of these independent transport operators, who frequently provide a service that the public transport companies cannot give, is necessary to the existence of a thoroughly efficient and comprehensive transport system.
I think that nationalised transport almost inevitably means subsidised transport. I have already indicated that the Government do not believe in subsidised transport and it therefore follows that if my contention is right, that nationalised transport means subsidised transport, then that is a strong argument against nationalisation. Nationalised transport has meant subsidised transport in practically every other country. The Government of the day responsible for the operation of a nationalised transport system will certainly be subjected to repeated demands for extended services, to repeated demands for cheaper rates, to demands for improved conditions of employment of transport employees and, because the Government will be dependent upon popular support for its existence, it will not, for political reasons, be able to refuse such demands and, if it does refuse such demands, it almost certainly will be rapidly replaced by another Government prepared to promise such concessions.
I have stressed the view that subsidised transport means dear transport, dear to the community as a whole. Our national economic efficiency, our competitive effectiveness in international trade, depend not merely upon the actual charges for public transport in operation but upon the total of the overhead burdens that industry and agriculture must carry. The uneconomic reduction of transport charges resulting from political pressure on a Government operating nationalised transport services would not benefit our trade, would not facilitate our economic development, if the differences between the actual charges in operation and the economic charges had to be made good by taxation and the unremunerative extension of transport facilities of any kind would necessarily mean that transport as a whole would cost the community more than it need cost. Nationalised transport, therefore, here as elsewhere, would mean the creation of a new basis for political contentions. Where the State is directly responsible for the operation of transport services, it is certain that transport workers will be organised to exert political pressure to support demands relating to their conditions of employment, that groups of traders of various kinds will similarly make their political support conditional upon the granting of concessions to their interests, and that in every locality of the country the extension or the cheapening of transport facilities will make or unmake Deputies.
