HC Deb 27 May 1968 vol 765 cc1293-302

  1. (1) Without prejudice to any powers apart from this section, any local authority within 1296 the meaning of Part V of the Road Traffic Act 1930 who, under powers conferred by section 101(1) of that Act or by any local Act or order, are running public service vehicles may, with the consent of the Minister or, in the case of a local authority in Scotland or Wales, of the Secretary of State—
    1. (a) acquire by agreement the whole or any part of a public service vehicle undertaking carried on by any other person; or
      2. 1297
    2. (b) dispose of the whole or any part of the authority's public service vehicle undertaking to any other person,
      • whether by purchase or sale, by lease, or by exchange or, in Scotland, excambion.
  2. (2) The Minister or Secretary of State may give his consent for the purposes of subsection (1) of this section either for a case or description of cases specified in the consent, or in general terms, and may give any such consent subject to conditions.—[Dr. Dickson Mabon.]

Brought up, and read the First time.

The Minister of State, Scottish Office (Dr. J. Dickson Mabon)

I beg to move, That the Clause be read a Second time.

This is a very short Clause which seeks to provide general powers for local authorities which are operating public service vehicles to buy or sell bus undertakings operated by other persons by voluntary agreement, subject to the consent of the Minister or the Secretary of State.

As hon. Members know from past legislation, local authorities derive their powers to buy or sell undertakings in accordance with, in some cases, local Acts and, in other cases, in accordance with the Tramways Act, 1870. That Act contains general provision which authorises the sales of a tramway undertaking subject to the consent of the Minister. He inherited this from the President of the Board of Trade. But this power is available only to local authorities whose present bus undertakings are the successors of tramway undertakings. Conversely, all local authorities with power to operate bus undertakings have power to purchase vehicles and fixed assets for the purpose of the business. But there is some doubt about their powers to purchase the good will of a business without acquiring its vehicles, and so on, unless the local authority is a chartered corporation and can use the powers it has in that capacity. [Interruption.]

Mr. Speaker

Order. It is difficult for an hon. Gentleman to speak against a background of conversation.

Dr. Mabon

I shall not be long, Mr. Speaker., because this is such a small Clause that I am sure that the Opposition would wish to assent to it quickly.

Even when local authorities have powers derived from local Acts, there are certain obstacles to the kind of transaction we envisage in the Bill. We need these additional powers to clarify the situation. We could proceed under one or the other, but in order to make sure that we have a general enabling power we wish to put this Clause in the Bill.

Mr. Eric Lubbock (Orpington)

I can see exactly what the Minister of State intends to do, but there are one or two points about the wording of the Clause which I find difficult to understand.

For example, I am sure that the hon. Gentleman will be able to give us an explanation of the word "excambion" which is a means by which local authorities are being empowered to acquire public service vehicle undertakings in Scotland. I am not an expert on Scots law, but I was interested in this unusual word and therefore I looked it up in the Encyclopaedia of the Laws of Scotland. The definition given there is that legal contract by which lands belonging to one proprietor are exchanged for other lands belonging to a different proprietor". It was hard to understand how that word applied to the acquisition of bus undertakings which, mainly, consist of vehicles, although I suppose there could be undertakings which included land as part of their assets.

The other point concerns the local authorities given these powers. Under the Road Traffic Act 1930, "local authority" means in England the council of any county borough or county district. Therefore, as I see it, the Greater London Council, which at a later date is to take over the operations of London Transport, will not have the same powers as are given to a county council. Would it not have been better to start with a new definition for local authorities?

Section 109 of the Road Traffic Act provides that in Scotland The expression 'local authority' shall mean the Town Council of a burgh". I understand that this expression does not include the counties of cities, which will, therefore, also not be able to use the powers given to other local authorities by the Clause.

Therefore, we have an anomalous situation in which the G.L.C., the largest local authority in Great Britain, and, in Scotland, the counties of cities, which are immeasurably larger in their resources than the burghs, will not be able to exercise these powers, whereas theoretically a rural district or, in Scotland, a small burgh which happens to have a public service vehicle undertaking will be able to do so. I should be grateful if the Minister would explain this point.

Mr. Michael Heseltine

I was surprised to hear the Minister say that the new Clause was a small Clause of little account which we could deal with quickly. I hope that we can deal with it quickly, but it is not a small Clause. The purpose of this legislation is to permit local authorities to acquire outside businesses and—this is a point to which the Minister did not pay much attention—to dispose of their undertakings should they wish to do so. This is a very big departure in the conduct of municipal bus undertakings and I do not think it is something which should be dismissed as a matter which can be got through very quickly.

6.30 p.m.

This is a two-way option: the local authority can buy; it can sell. I must say that it is with very great reluctance that I see the extension of powers of this sort to local authorities, but, equally, I can see that it would be irresponsible not to accept that there could be circumstances in which local communities might be threatened with the extinction of their bus services if they did not acquire them through the municipality and if they were not carried on by the municipality. Therefore I would not myself, at this stage certainly, wish to decide to vote against this new Clause. I am aware that there are local authorities which only recently have acquired undertakings of one sort and another from the private sector. Equally, I welcome the power to dispose of a part of a municipal undertaking.

However, I have one or two questions I should like to ask, because I think that probably the decision whether one agrees or not with the new Clause hinges more on matters of detail than on the generality of the Clause itself. First, I should like to know, when the Minister is asked for his permission, which has to be given before the authority can either sell or buy, what are the tests he will apply? For example, will the test be financial considerations whether or not a local authority is to be permitted to acquire an undertaking? Will the finance be provided out of rates or raised on capital account or loan?

My second question is about the doctrinal attitude which might exist in the Ministry towards disposal of an undertaking. Am I to understand now that any local authority is quite free as a matter of principle to decide that it does not want to continue to run its bus undertaking, and that, if it wishes to dispose even of a profitable undertaking to a private contractor, there will be no doctrinal opposition by the Ministry to that disposal? Will any Minister under this Government say, "On doctrinal grounds we do not approve of your selling your undertaking to a private contractor simply because we do not believe that is the way a profitable undertaking should be disposed of"?

Is it possible for a local authority, in acquiring a privately run bus company—

Mr. Manuel

"By agreement".

Mr. Heseltine

"By agreement"—to acquire a company which has some subsidiary activities, perhaps through a subsidiary company, an activity which is dissociated from or not immediately relevant to the running of the buses, so that, through that acquisition the municipality would be running some quite separate and irrelevant operation in addition to running the buses?

The Minister has to give permission subject to certain conditions, and it would help the House to come to a right conclusion about the Clause to know what sort of conditions the Minister has in mind. I have mentioned some, but I am sure that there will be a whole range of others which will have occurred to the Ministry, and I should have thought it incumbent on the Minister to explain in greater detail what he envisages in trying to achieve the purposes of the Clause.

Dr. Dickson Mabon

I am much obliged to the hon. Gentleman the Member for Tavistock (Mr. Michael Heseltine) for his reception of the new Clause—for saying that he does not wish to object to it provided that I can satisfy him on the numerous questions he has asked me. That I shall hope to do.

But first, with respect to the hon. Gentleman, I would answer the hon. Gentleman the Member for Orpington (Mr. Lubbock). He raised three points. The hon. Gentleman was quite right— "excambion" is a Scottish legal term for exchange—

Mr. Lubbock

Of lands.

Dr. Mabon

—primarily of lands, but it can be used in a wider context, though land, undoubtedly, was the basis on which the term arose. Someone interjected that the hon. Gentleman knew little about the law of England either, but I do not take that view of his question. I think he was perfectly right to ask it, and I should apologise to the House that I did not explain excambion at the beginning.

I understand from my hon. Friends that the situation in London which he mentioned will be dealt with in legislation but it does not fall under existing Acts or this Bill at the present time. No doubt, the hon. Gentleman will await that with a great deal of interest.

As to his question about the town councils of burghs and Section 109 of the principal Act, I can confirm that this expression does include the counties of cities. It embraces the four town councils which are the only town councils in Scotland which operate municipal transport undertakings. Therefore, this is a very fundamental question, and I can confirm to the hon. Gentleman that they are within this term.

With reference to the other matters which were raised, this Clause is important since it concerns disposals as well as sales. I accept that, and one would have to leave it to the Minister to decide at any given time the right way of carrying out acquisition or disposal. It is not for me to say what would happen in any specific instance which could be only hypothetical, whether or not acquisition would be borne on rate revenue or borne as a capital expense. I do not know. I suppose it would depend upon the circumstances at the time. If the hon. Gentleman has a specific case, a specific example. I will willingly try to reply to it, but I think the point is that this new Clause is not a hindrance to either option, or to any third option the hon. Gentleman may want to take.

As for the present Minister, I can confirm that he will not approach any of these matters in any narrow-minded, doctrinal way. I cannot speak of any successive Ministers of Transport in a Government formed, in a moment of aberration amongst the people, by the party opposite. I cannot speak of that. I can say that my right hon. Friend will try to approach these things in as reasonable a way as he can.

As for the question of peripheral activities, it is a matter for the local authorities themselves to decide whether or not they should acquire them. The peripheral activities might be such that it would be disadvantageous to acquire them; equally, it might be impossible not to acquire them. It will depend upon the merits of the situation. It depends on the way this Clause can be applied whether or not it is possible to do either of those things. The Clause is in such general terms that the matter can be approached in a wide, broad, fair way in defining what is suitable for acquisition or disposal.

Mr. Heseltine

My principal concern is that in the Clause there are over peripheral activities no powers which would enable local authorities to take on peripheral activities which are not already within their powers under other legislation.

Dr. Mabon

In general, I would say that that would be covered by previous legislation, but I am willing to admit that it is possible, given the circumstances of certain peripheral activities. It depends on which peripheral activities we are talking about. They might not be covered by legislation, in which case they would be Statute barred. With respect, I could not confirm any specific instance off the cuff; I should have to be given some notice of it before I answered the question. I am not quite sure whether the hon. Gentleman is asking me a general question or whether he has in mind the prescription of the four P.T.A.s mentioned in new Clause No. 17, but in general I can confirm that we think that the generality of the matter is covered here, though we could, perhaps, be Statute barred in one or two instances.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

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