Clause 26 (Hansard, 28 May 1968)

§ Mr. Deputy Speaker
The next Amendment is Amendment No. 113, in page 40, line 30, leave out ' any' and insert ' related'.
With this Amendment we can discuss the following Amendments: No. 114, in line 33, at end insert: 'and which comprised a substantial part of the activities of that subsidiary '; No. 115, in line 37, at beginning insert: (1) The objects of The Bus Company and the Scottish Group each shall be—

(a)to hold and manage the securities vested in them by virtue of this Act, and

(b)to exercise the rights attached to those securities,
as if the Bus Company and the Scottish Group were each a company engaged in a commercial enterprise and each shall exercise control over its subsidiaries so as to ensure that each subsidiary acts as a company so engaged; and No. 116, in line 40, at beginning insert' subsections (2) to (5) of'.

§ Sir Harmar Nicholls (Peterborough)
On a point of order, Mr. Deputy Speaker. I draw the attention of the House to an intolerable situation and ask your guidance on how we can try to unravel that situation. We are now moving to the 1493 Scottish section of the Report stage and a large number of Scottish hon. Members are tied up in a Standing Committee in Room 14, having tried hard to get that Committee Sitting adjourned so that they can do their duty by taking part in discussion of this section of the Bill. Obviously, at the behest of the Government, they have not been able to adjourn that Committee.
I believe that this matter of such importance that if that Committee will not run its affairs properly and sensibly this House should help its members to do so. I suggest that this House adjourns so that matters to do with Scottish detailed provisions may have the help of all hon. Members who sit for Scottish constituencies. This is a matter in which Parliament must look to itself. Otherwise we shall reach a state of affairs where we shall have to go out to a referendum to find what the people want because their accredited representatives cannot put their point of view.
I ask your guidance. Will you accept the adjournment of this Report stage so that the Scottish section can have the assistance of those hon. Members who are at present tied up in the Scottish Committee?

§ Mr. Deputy Speaker
Order. I am afraid I am unable to help the hon. Member. I am bound by the time-table Motion, which of course makes it possible only for the Government to move a dilatory Motion of any kind.

§ Sir Harmar Nicholls
I wonder if it is possible to ask the Scottish spokesman on the Treasury Bench to take advantage of the suggestion you have made? Your Ruling makes it perfectly clear that if the spokesman for the Government does not take advantage of your suggestion he will be deliberately putting hon. Members from Scottish constituencies at a disadvantage.

§ Mr. Deputy Speaker
Order. I am unable to accept the gloss which the hon. Member puts on my Ruling. I merely indicated that the time-table Motion leaves dilatory Motions to the Government alone, and they must be the people to decide them. Mr. Taylor.

§ Mr. Younger
May I make a suggestion? Although—[Interruption.]

§ Mr. Deputy Speaker
Order. Although I endeavoured to help the hon. Member 1494 for Peterborough (Mr. Harmar Nicholls) this is not a point of order. The hon. Member for Ayr (Mr. Younger) cannot speak further to it as it is not a point of order.

§ Mr. Edward M. Taylor (Glasgow, Cathcart)
I beg to move Amendment No. 113, in page 40, line 30, leave out 'any' and insert 'related'.
This Amendment and the Amendments we are taking with it provide the only opportunity we shall have to discuss the Scottish transport group. I regard it as utterly shameful and a cynical disregard of the views of the people of Scotland that the Government should so organise affairs that my hon. Friends have to choose between attending an important Committee upstairs or taking part in this discussion. We cannot discuss this matter, but it will go out to the people of Scotland by whom it will be heard— [Interruption.]

§ Mr. Manuel
On a point of order. You, Mr. Deputy Speaker, have indicated the Amendments which can be discussed. The hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) has started his speech in his usual bursting blood vessel way, but has not dealt with anything in the Amendment. He is dealing—[Interruption.]

§ Mr. Deputy Speaker
Order. I know that feelings run high. I have allowed the hon. Member to express his feelings, but it would be wise if we came to the Amendment. Mr. Taylor.

§ Mr. Taylor
I will not spend time talking about this because it would not be in order. However, I know that what has happened today will be noted by every Scot in Scotland.

§ Mr. Peter Mahon (Preston, South)
On a point of order. In the hearing of many hon. Members a grave accusation has been made against my hon. Friend the Member for Central Ayrshire (Mr. Manuel). The hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) said that my hon. Friend had been selling Scotland, his native country, down the river for years.

§ Mr. Taylor
Nonsense.

§ Mr. Deputy Speaker
Order. I am sure sure that the hon. Member is now coming to the Amendment. Mr. Taylor.

§ Mr. Taylor
These Amendments are vital because they deal with Scottish transport. This is a matter of concern to every Scottish Member. Transport is vital to Scotland and transport costs are vital to our economy, and it is a matter of concern when we consider the intolerable burdens which have been placed upon transport by this discredited Government.
We want to ask many questions on these Amendments and I hope we can have clear answers. The one vital question that we want clarified—[Interruption.] I hope that the hon. Member for Central Ayrshire will listen. We know that he does not like the truth concerning the damage which this Government is inflicting on the Scottish economy. In Committee we sat for hour after hour listening to his comments. He should now listen to some of the facts, although he may not like to hear them.
We raised many questions in Committee. If the Minister will look at col. 1262 of the Committee proceedings he will see some of the important questions which we asked. He said at that time that he would explain the answers not once, but three times in Clause 9. Because of that our discussions came to a speedy conclusion. Looking at Clause 9 we find not a single word about this matter. Therefore, we put down the other three Amendments which we are now discussing on the financial disciplines imposed on the new Scottish Transport Group. We wanted to know what the position was. Would it just have a duty to make ends meet comparing one year with another? Would it operate, as we suggest in Amendment No. 116, as a commercial enterprise? The Minister gave a crystal clear answer when he said: The statutory provision for the Holding Company in the 1962 Transport Act was that it should be run as a commercial organisation, and in this Bill in practice the position for the S.T.G. will be essentially the same."—[OFFICIAL REPORT, Standing Committee F, 28th February 1968, c. 1320.] There was a crystal clear comment that the Scottish Transport Group would be run as a commercial enterprise on the same basis as the Transport Holding Company. Nothing could be clearer or more straightforward.
On the other hand, when we look at the provisions in the Bill, it is clear that the Scottish Transport Group is not 1496 being run on the same basis as the Transport Holding Co. It is, in effect, given an obligation to make ends meet comparing one year with another. It is on the basis of a nationalised concern, not on the basis of a commercial enterprise as is the case with the Transport Holding Co.

Mr. Michael Clark Hutchinson (Edinburgh, South)
On a point of order. Mr. Deputy Speaker, do you realise that there is a Division going on in the Scottish Committee in Room 14?

§ Mr. Deputy Speaker
I did not realise that, but I realise it now.

§ Mr. Taylor
The intervention from my hon. Friend the Member for Edinburgh, South (Mr. Clark Hutchison) clearly shows that Scottish Members are being forced to abandon a vital discussion on the Floor of the House to go to an equally vital discussion upstairs. If we are proud of the fact that the only discussion we are having on the Scottish Transport Group coincides with a vital discussion upstairs on the Social Work (Scotland) Bill, let hon. Gentlemen opposite tell the people of Scotland how they are shamefully abusing their best interests in this House.

Earl of Dalkeith (Edinburgh, North)
On a point of order. Will it be possible to adjourn the House for a few minutes to enable Scottish Members to go to this Division?—[Interruption.]

§ Mr. Deputy Speaker (Sir Eric Fletcher)
I am afraid that is not possible. I think that we shall make more progress if there is less noise.

§ Mr. Taylor
Of course, the Government will make more progress if they arrange their affairs so that vital discussions on Scottish matters are carried out in such a way that the majority of my hon. Friends are unable to attend.
Will the Minister clarify the financial disciplines? Section 29(6) of the 1962 Act says that the Holding Company shall run its affairs as if it were a company engaged in a commercial enterprise. We see the result in the activities of the Transport Holding Co. It made a return on its capital liabilities of 10 per cent. in 1966 and 14 per cent. in 1965 on the basis of a commercial enterprise.
1497 In Amendment No. 116 we suggest that the financial duties of the Scottish Transport Group should be amended so that subsection (1) of this Clause in the 1962 Act should be taken out. We have a clear distinction. Should it be run as a commercial enterprise, or should it be run as the transport boards under the 1962 Act, apart from the Holding Co.?
If the Minister is not prepared to accept Amendment No. 116, I suggest that in Committee he misled us about the financial disciplines of the Scottish Transport Group. Will he explain precisely why he said in column 1320 of the Committee proceedings that the Scottish Transport Group would be run as a commercial organisation as the Holding Co. was under the 1962 Act, and yet he does not make statutory provision for this to be made?
In Amendments Nos. 113 and 114 we have suggested that some limit should be put on the fringe activities of the Scottish Transport Group. If there is some fringe activity associated with one of its subsidiary companies some limit should be put on its expansion. The Minister of State, discussing the Passenger Transport Executive a few minutes ago, said that he would carry out a policy to restrict fringe activities. Surely the same applies to the Scottish Transport Group.
What happens to these fringe activities is important. We discussed them in Committee. The hon. Member for Central Ayrshire, without wasting one second of the Committee's valuable time, explained how one of these fringe activities related to sea-going activities and how the Central Ayrshire Labour Party took over a ship once a year, on which the red flag was flying, to make sure that it was clear where their loyalties lay. He said that it was important that the Scottish Transport Group should be able to extend into travel agent activities apart from its existing limited activity.

§ Mr. Manuel
I am gratefulto the hon. Gentleman for giving way,despite his spurious allegation about me.Clause 26(l)(m) states: with the consent of the Secretary of State, to carry on any activities which the Group would not apart from this paragraph have power to carry on but which a subsidiary of the Group was carrying on immediately before it became such a subsidiary. 1498 The activity to which the hon. Gentleman referred concerning the Central Ayrshire Labour Party will still be there under the Bill, but he and his hon. Friends would hive it off and not allow them to do it.

§ Mr. Taylor
We have more important matters to discuss than the future of the Central Ayrshire Labour Party. My point is that any extension of these fringe activities should be on the basis of fair competition.
How can we have this done on a fair and competitive basis unless the Minister is prepared to accept our Amendments which will put the Scottish Group on the basis of a commercial enterprise? Clause 45 gives to the Scottish Group an unlimited power to expand into manufacturing activities. On what basis will these activities be carried out—as commercial enterprises in the Group? Will this apply to the traffic agents? We must have a clear assurance.
Does the Minister stand by his words in c. 1230 of the Committee debate, and if so will he accept our Amendments, particularly No. 116? I have deliberately cut my remarks short, knowing that other Members want to take part. It is a shameful and sorry day for Parliament when such an important matter affecting Scotland should be debated on a day when the Government have so arranged affairs that all of my hon. Friends cannot be present.

§ Mr. Peter Doig (Dundee, West)
In case my hon. Friend should have any doubt, I recommend him to resist these Amendments. I am astonished at what hon. Gentlemen opposite have said, particularly the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor). They have placed such emphasis on the importance of this to Scotland, and accused my hon. Friend the Member for Central Ayrshire (Mr. Manuel) of selling Scottish interests down the river. What is this great issue which five Scottish Members, and one self-appointed High Commissioner for Scotland, the hon. Member for Peterborough (Sir Harmar Nicholls), have taken up so much time? What is this world-shattering event which will so affect Scotland— to leave out "any", and to insert "related"! One has only to look at the 1499 Amendment to see what a great deal of difference it will make.
The Opposition are trying to restrict the power of the Scottish Group. Why do they talk about fringe activities, and why do they not want the Group to take part in such activities? Is it because such activity represents high profits and because they want private enterprise to have the cream? They put the same point in Committee and yet they bring it forward now, after complaining about not having sufficient time for debate. They bring forward minute differences and make great issues out of them.
The issue of Scotland being neglected is synthetic indignation. They have had assurances that the Scottish Group will be run on a strictly commercial basis. Do commercial firms engage in fringe activities? Of course. Bakery firms sell cars. That is a fringe activity. It is all right for private enterprise, but when we start to take the power so that we can operate in such fringe activities, and make the profits, the Opposition seek to put into the Bill restrictions preventing that.
Two of the most successful companies in Britain are the Rank Organisation and I.C.I. Both have engaged in fringe activities to the highest possible degree. They are both companies making large profits, very often from such fringe activities. Hon. Gentlemen opposite talk about selling Scotland down the river, but they are trying to sell the Scottish Group down the river and make sure that it does not have the power to engage in profitable activities. I am astonished that they can have the audacity to make such statements, knowing the facts, knowing that they are not protecting Scotland's interests, but the free enterprise people who make the profits in Scotland.

§ Mr. James Davidson (Aberdeenshire, West)
I support these Amendments very strongly indeed. I have been asked to say that my hon. Friend the Member for Ross and Cromarty (Mr. Alasdair Mackenzie) would have liked to have spoken, but he is stuck upstairs in Committee. My hon. Friend the Member for Inverness (Mr. Russell Johnston) also would wish to have spoken, but he is on a Commission in Edinburgh. It is very poor that this Scottish business has been 1500 put on at the same time as other Scottish business.
I could not quite follow the argument of the hon. Member for Dundee, West (Mr. Doig). He is perpetually astonished and I did not know what was astonishing him on this occasion. He talked about denying fringe activities to a nationalised concern, but permitting them to commercial concerns. Surely this is the basis of the difference between nationalised industries and private enterprise. If one sets up a nationalised industry one does not do so to engage in all sorts of fringe activities in order to justify and make the action acceptable.

§ Mr. Doig
Does the hon. Gentleman believe that his argument holds good when at the same time that nationalised industry is told that it must be run on a commercial basis?

§ Mr. Davidson
I think that it is absolutely consistent. If a nationalised industry is to be set up—and the Liberal Party has always taken the view that in certain circumstances, and this is not one in my view, it may be necessary to set up a nationalised industry where it is inevitable that all the resources will form a monopoly—it should not be given carte blanche to engage in all sorts of fringe activities which would help to make it pay. It is perfectly legitimate for a commercial concern to diversify as much as necessary to make its activities pay. This is the essence of commercial activity.
The chief reason why we are in favour of these Amendments is because there is no good reason for the establishment of a Scottish Group. We agree that it would be fine if we can achieve a properly co-ordinated transport system, but that seems to be just a catch phrase. Let me give one outstanding example, which occurred during the period of office of this present Labour Government. The railway station at Dyce Airport has been closed, along with a lot of other stations on the line from Aberdeen to Inverness. It is a station situated right on the airport. Even if we were to achieve a co-ordinated transport system, the last thing we want to do is to shut down the one railway station situated on an airport. If it had been left open, and the timetables scheduled to fit in with those of B.E.A. this would have put the towns 1501 of Inverurie, Elgin and others, on an airport. One could have come straight from the plane, on to the train to one's destination. But to talk about co-ordinating the transport system and setting up this extraordinary Scottish Transport Group when no effort is being made in practice to achieve a co-ordinated system is just sheer humbug.

§ Mr. Leslie Huckfield
Since the hon. Gentleman is so greatly concerned about the closing of this station, can we take it that he supports other parts of the Bill which include provision of subsidies to keep such stations going?

§ Mr. Davidson
Yes, I believe my hon. Friend the Member for Bodmin (Mr. Bessell) has already said that in Committee proceedings. It seems to me that this is merely going to set up an extra layer over and above our already existing authorities when all that would be necessary to achieve a co-ordinated transport system under the general umbrella of the Transport Holding Company already existing would be to get local and regional managers of the air, rail and bus services to match their timetables. That, surely, is the essence of achieving a coordinated transport system, rather than setting up an extra bureaucratic body over them, to try to direct what they should do, a body which will no doubt need large office staffs with additional expense to the taxpayer.
May I also reiterate a point made from the Opposition Front Bench that under the actual wording in the Bill there appears to be no limitation on the fringe activities in which the Transport Holding Company can take part. Apparently it could set up as travel agents or operate as teashop caterers, or do almost anything under the sun it might wish. It seems to me that this is going to impose not only extra bureaucracy but extra expense on the taxpayer. By all means let us have a co-ordinated transport system. That is what is wanted on all sides of the House. But I do not believe that to set up a Scottish Transport Group in place of the existing transport company will achieve that.

§ Mr. Miichael Heseltine
I intervene briefly to point out to the Minister of State that whilst the Government have chosen to make this a Scottish debate—and we have heard of the 1502 great difficulties caused to our colleagues upstairs—it is a debate embracing the National Bus Company which has not the power to run into Scotland; and when that aspect is discussed we will not be satisfied with a reply by the Minister of State for Scotland. We shall want to hear from the Minister of Transport whom I hope will be here.

§ Dr. Dickson Mabon
In view of that comment and the comment of the hon. Member for Aberdeen, West (Mr. James Davidson) it might be useful if I made some response at this stage. Other hon. Gentlemen who may want to pursue the matter will no doubt do so. First of all, I do not accept the general doctrine that a Scottish Minister can speak only on Scottish Clauses. During all the stages of the Bill, I have spoken as often as my right hon. Friend the Minister of Transport, with other of my colleagues, on matters affecting Great Britain; because we in the Scottish Office take the view that as Scottish Ministers we are also British Ministers.
It is unfair to ask British Ministers who are not Scottish Ministers to speak on specifically Scottish points. Everybody recognises that. The hon. Gentleman the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) has complained on several occasions about Scottish Ministers not being present at some particular moment. The hon. Gentleman is entitled to have the presence of Scottish Ministers when specifically Scottish points are being made, but Scottish Ministers are fully entitled to answer British points, including points on the National Bus Company.

§ Mr. Heseltine
I fully appreciate what the hon. Gentleman has said, but when this matter was discussed in Committee, a large number of questions were raised by the right hon. Gentleman the Minister of Transport, to which I shall wish to refer; and I feel, therefore, that it is only fair to suggest that someone from that Ministry might be present.

§ Dr. Mabon
That may be possible. I do not know. I can only say I am quite willing to respond. P.T.A.s will apply to Glasgow just as they will apply to England. In the context of the enabling powers of Part II, they will apply 1503 to Great Britain, which of course includes Scotland.

§ Mr. Edward M. Taylor
Was the hon. Gentleman indicating that there should be a P.T.A. for the Glasgow area?

§ Dr. Mabon
Sometimes the hon. Gentleman is so busy jumping to conclusions that he gets muscle bound. The answer is no. We have not made up our minds. We have an enabling Clause and we are prepared to await the facts before making up our minds. There are no leaps in the dark taken from this side.

§ Mr. Michael Heseltine
Why should Scotland be in a position of having to wait for transportation surveys when the whole of the rest of the United Kingdom is to have them foisted upon it?

§ Dr. Mabon
The answer is because the history of transport development in Scotland is different from that in England. The hon. Gentleman must not seek to apply straitjacket United Kingdom solutions to all parts of these islands. We are not racial in Scotland. On Amendments 115 and 116 the hon. Gentleman the Member for Cathcart surpassed himself in managing to misrepresent my position. The financial duty of the Bus Company and of the Scottish Group will be the same as that of all the nationalised transport boards as laid down in Section 18(1) of the 1962 Act—and I presume there is no quarrel between us on that —which is applied by Clause 27(1) in this Bill; that is to conduct their business so as to secure that their revenue is not less than sufficient to meet all charges properly chargeable to revenue taking one year with another. The financial duty of the P.T.E.s will be basically the same.
I made it clear in Committee that the Bus Company and Scottish Group will be run on commercial lines. They will have a financial target set by the Government in accordance with the principles laid down in the two White Papers on the Economic Objectives of the Nationalised Industries. They will thus be expected by the Government not just to break even—after providing for interest on capital—but to make provision for the replacement of their assets at current prices and for a contribution to general reserves. I said all this in Committee. The hon. Gentleman answered himself by 1504 referring to Clause 45(7). The Statute specifically refers to the fact that they must follow commercial principles in their operation.
Turning to Amendments Nos. 113 and 114, when the 1962 Act was passed the Transport Holding Company took over a number of companies in Scotland. One of the best examples was the Tayforth group of companies, which included a road haulage firm which controlled egg-packing stations and sales of grocers' sundries. It is true that since then these interests have been disposed of, but if the Government were to accept Amendment No. 113 we would be denied that right, because of the existence of the egg-packing stations and sales of grocers' sundries, to take over even the principal part of the road haulage firms with which we are concerned. I am seeking to argue that Amendments Nos. 113 and 114 would essentially weaken the initial stages of the formation of the Scottish Group.

§ Mr. Michael Noble (Argyll)
What is to prevent anyone wishing to take over such a group from saying if they sell these fringe things, as happened with the Tayforth Group, that the main part comes within the Transport Group?

§ Dr. Mabon
That is a perfectly fair point in that case, but in some circumstances the operator may not be willing to sell only part of the firm. That is the difficulty. I am surprised that hon. Gentlemen from rural areas should be offended by the proposal for a Scottish Transport Group. It would be essentially a good thing for Scotland to own many of its own buses and ferries. With a coastline as fragmented as ours, it is very important to get co-ordination between buses and ferries. This is one example of Home Rule in operation which I should have thought would be welcomed by all Members. Instead of that, the Liberal Party is on record as being opposed to the Scottish Transport Group in essence. The hon. Member for Bodmin (Mr. Bessell) was not misleading us. He was against the Transport Group, and we understand that the Scots Liberals are also against it. We note that with concern.

§ Mr. James Davidson
The hon. Gentleman is misquoting me slightly. I gave clearly our reasons for being opposed to it, which are that it seeks to take over 1505 powers far and away outside those of operating transport in Scotland. If it were a body subject to the electorate which would help to co-ordinate the ferries and different types of transport, that would be quite a different thing, which we should not be against.

§ Dr. Mabon
The hon. Gentleman cannot skate away from that one. He will have to read again what he said. He was arguing for a different standard for public enterprise as against private enterprise. He wanted a standard for private enterprise with which I agree, but an entirely different standard for public enterprise. This is ambivalence which I cannot understand. He does not want a publicly-owned Scottish Transport Group. We have noted that and we shall tell the Highlanders and Islanders that that is what the Liberal Party stands for.

§ Mr. Davidson
May I make it clear that we stand for a co-ordinated Scottish transport system.

§ Dr. Mabon
The fact is that private enterprise, for perfectly understandable reasons, cannot sustain an adequate transport system in the Highlands without substantial public subsidy. That has been proved for years. This is a method of trying to make sure that there is an efficient and improved transport system, in the Highlands and Islands of Scotland in particular. The hon. Gentleman has gone on the record as being opposed to the Transport Group. With these Amend- 1506 ments, which he supports, he wants to hobble the group right at the beginning.
One rural bus operator has already told us that he would want to sell out his firm. He also happens to be the local undertaker. Are we to refuse to buy this man's concern because we shall be unable initially to carry on the undertaking business? I am advised that we cannot define this as carriage of passengers within the Statute. That is a small example. If the hon. Gentleman knew the area, he would be rather concerned to think that he was debarring us from taking over that rural bus concern at the operator's request. That is what Amendment No. 113 seeks to do.

§ Mr. Bessell
Will the hon. Gentleman try to understand the Liberal position on this? It is not an objection to a coordination of bus services or other forms of transport. It is an objection to the public sector going into risky ventures, which it is allowed to do under the Bill. That should be left to the private sector, which is dealing with private money and not with public money as the Scottish Transport Group will be doing.