HC Deb 28 May 1968 vol 765 cc1620-9


Mr. Michael Heseltine

I beg to move Amendment No. 163, in page 60, line 37, leave out subsection (4). To speed up our deliberations on this Amendment I will not quote chapter and verse of the legislation to try to explain what the discussion is about. The object of Clause 44(4) is to make Clause 47(9) apply to Section 16(1) of the 1962 Act. Under Clause 47(9) the new authorities are permitted to transfer land to any organisation, whether it be a private or public organisation, with which they wish to set up a partnership arrangement.

We are concerned that, for example, the National Bus Company would obtain land under Clause 10(l)(xvi) from a Passenger Transport Authority. The Passenger Transport Authorities are to obtain their land from the municipalities at no cost. Therefore, in the books of the authorities there will be substantial assets in the form of land at no cost. These authorities, which have legitimate partnership arrangements with the National Bus Company, could transfer that land to the National Bus Company. Perhaps three or four years would pass, and the original partnership arrangement and purpose would be lost and forgotten. At that time the National Bus Company could go into a partnership arrangement with a commercial concern for one of the numerous activities permitted to the National Bus Company under Clause 45, which we shall probably not have a chance to discuss. We are concerned that the National Bus Company might transfer the land which it had received for nothing from a Passenger Transport Authority to a company which the National Bus Company jointly owned with a member of the private sector, again for nothing, thus enabling competition within the private and public sector to take place on a wholly unrealistic basis, because the valuation of the land would never have been brought into account. There can be only one possible outcome of inserting subsection (4) in the way the Government did in Standing Committee. Therefore, we seek to delete it.

That is our anxiety. I hope that the Minister will be able to satisfy us that this will not be possible. He might say that my fears are unfounded because, in the event of this sort of situation coming to pass in three, four or five years time and the National Bus Company setting up a joint venture organisation with a private sector company and transferring land to it at no cost, the National Bus Company, under an Amendment to Clause 45 which we managed to extract from the Government, is bound to behave in a commercial manner, and if it behaved in a commercial manner, it would be bound to take account of the assets in its business and value them at current market value. When one couples the fears I have with the definition given by the Minister of State about what he thinks behaving in a commercial manner amounts to, our anxieties are given great substance.

The Minister of State, when discussing commercial practice, and applying the definition to the National Bus Company, said: But what seems not to be understood in relation to the financial duty is that we are providing that the National Bus Company and Scottish Transport Group must break even; they must raise revenue sufficient to cover their costs, including, of course, the payment of interest on their capital. That is also to be included. That is not different from the position of any other business organisation. There was a clear statement. He was expecting those organisations, which are now statutorily compelled to behave in a commercial manner, simply to cover their costs, having paid interest charges on capital.

The situation was cleared up even more when referring to the subsidiaries of new authorities: These subsidiaries will have to act in a commercial way, covering their costs, without subsidies, including interest charges. That is what is normally meant by acting commercially … "—[OFFICIAL REPORT, Standing Committee F, 28th February, 1968; c. 1366–7.]

Mr. Bessell

This is only to cover costs. There is no provision for profit, which is essential within the private sector.

Mr. Heseltine

I appreciate the difficulty. Time is running out and the hon. Member for Bodmin (Mr. Bessell) wants to get in on this debate. This is the dilemma which we feel. I know that the hon. Member for Bodmin shares it as strongly as I do.

The Government have no conception of what behaving in a commercial manner amounts to, because they are under the grand delusion that, providing one can draw an interest rate on money and assets tied up in the business and that interest rate reflects more or less the cost of borrowing money, one is behaving in a commercial manner. It is no wonder, therefore, that the undertakings for which they are responsible show such vast and gloomy results whenever they are produced. If anyone in the private sector were to think that all he had to do to behave in a commercial manner was to earn about 6 or 7 per cent. on the value of the assets employed in the business he would be out of business in a short period of time, and quite rightly so.

We have arrived at a situation where land taken from the municipal authorities, against their wishes, and transferred through the National Bus Company into the hands of the private sector is not in any way valued at market rate to ensure that, if it is used by certain parts of the private sector, it is used in fair competition as we, on this side, would understand it.

I understand that this argument needs following through the legislation. It took the Minister of State many hours following through the legislation to understand the point. I realise that in the short time we have left the Minister may be in some difficulties. I hope that he will be able to say: "We have not got a lot of time. The hon. Member is raising a technical point. I want to make sure that there is fair competition of the kind about which he is talking. I will, therefore, undertake to look at it again and, if necessary, introduce an Amendment in another place to ensure that the anxieties which we are discussing are unfounded".

This will enable us to make progress to Clause 45, which we are all anxious to reach. I hope that the Minister, without committing himself to taking action, will at least say that he will examine it again and consider taking the sort of action I am discussing if he feels that my fears are with foundation.

Mr. Marsh

As the hon. Member for TJavistock (Mr. Michael Heseltine) said, this matter was discussed fairly exhaustively in Committee, and it is a source of constant wonder to me that, given the shortage of time, which is not the fault of the Opposition, they should take up so much time re-hashing exactly the same points. The hon. Gentleman has expressed his fears, as he expressed them in Committee, and we can do little more than say what we said in Committee. That is, that they are unfounded.

Theoretically, technically, he could conceivably have a point, but in practice the position which he raises is a total wild goose chase. The P.T.E.s are most unlikely to want to take over from municipal transport undertakings land or property which could be used for manufacturing or trading. If they did want to, it is hardly conceivable that they would transfer it to the National Bus Company or any other nationalised authority, since if the property supported a profitable business, the P.T.E. would not want to lose it and, if it were unprofitable, the National Bus Company would not want it.

Therefore, given the assurances, which have been made over and over again, that these bodies will act as commercial bodies, I find it extraordinary that hon. Gentlemen should raise the matter all over again in the same speeches on the same points which were argued and answered in Committee.

I regret that I cannot assist the hon. Gentleman by accepting the Amendment, but I hope that we can get on with Amendments which we could have reached a long time ago if the Opposition had really wanted to. It will be no good, when the Guillotine falls, saying, "Isn't it dreadful? The Government have prevented us from reaching these other Amendments." If a large part of the proceedings had not been concerned with matters on which they had our answers when they were argued in Committee, many of these other matters could have been reached.

Mr. Peter Walker

It is a great mistake for the Minister to comment on a period of the Committee proceedings during which he was not even the Minister. If he had been, he would have realised, as those of us who were on the Committee did, that the reason that this point is raised now—and absolutely correctly—is that, on the point of debate on Clause 45 in Committee, the Government gave way and moved an Amendment to meet this matter of commercial criteria. At that stage, we had already gone through the debates about the executives. It was therefore correct, seeing that they have changed their minds at a late stage on the naitonalised industries, to go back and assume that they would apply the same criteria here.

Mr. Marsh

I am not challenging the right of the Opposition to use their time as they wish; I am expressing a personal view that, given the substance of some of the other Amendments, it is extraordinary that they should choose to pursue this one all over again.

Mr. Peter Walker

When a Government apply the sort of appalling Guillotine which the Government have applied to this Bill, so that 50 Clauses are not debated at all, it is correct, since they changed their minds about applying commercial criteria to nationalised industries, for us to assume that they would change their minds all the way. They have not,

and I would therefore urge my hon. Friends to divide on the Amendment.

Question put, That the Amendment be made: —

The House divided: Ayes 225, Noes 271.

Division No. 186.] AYES 17.43 p.m.
Alison, Michael (Barkston Ash) Glyn, Sir Richard Mills, Peter (Torrington)
Astor, John Godtber, Rt. Hn. J. B. Mills, Stratom (Belfast, N.)
Atkins, Humphrey (M't'n & M'd'n) Goodhart, Philip Miscampbell, Norman
Awdry, Daniel Goodhew, Victor Mitchell, David (Basingstoke)
Baker, Kenneth (Acton) Gower, Raymond Monro, Hector
Baker, W. H. K. (Banff) Grant, Anthony Montgomery, Fergus
Balniel, Lord Grant-Ferris, R. More, Jasper
Barber, Rt. Hn. Anthony Gresham Cooke, R. Morgan, Geraint (Denbigh)
Batsford, Brian Grieve, Percy Morrison, Charles (Devizes)
Beamish, Col. Sir Tufton Griffiths, Eldon (Bury St. Edmunds) Mott-Radclyffe, Sir Charles
Bell, Ronald Gurden, Harold Munro-Lucas-Tooth, Sir Hugh
Bennett, Dr. Reginald (Cos. & Fhm) Hall, John (Wycombe) Murton, Oscar
Berry, Hn. Anthony Halt-Davit, A. G. F. Neave, Airey
Besselt, Peter Hamilton, Michael (Salisbury) Nicholls, Sir Harmar
Biffen, John Harris, Frederic (Croydon, N.W.) Noble, Rt. Hon. Michael
Biggs-Davison, John Harrison, Brian (Maldon) Nott, John
Black, Sir Cyril Harrison, Col. Sir Harwood (Eye) Onslow, Cranley
Blaker, Peter Harvey, Sir Arthur Vere Orr, Capt. L. P. S.
Boardman, Tom (Leicester, S.W.) Harvie Anderson, Miss Orr-Ewing, Sir Ian
Body, Richard Hastings, Stephen Osborne, Sir Cyril (Louth)
Boyd-Carpenter, Rt. Hn. John Hawkins, Paul Page, Graham (Crosby)
Boyle, Rt. Hn. Sir Edward Hay, John Page, John (Harrow, W.)
Braine, Bernard Heald, Rt. Hn. Sir Lionel Pardoe, John
Brewis, John Heath, Rt. Hn. Edward Pearson, Sir Frank (Clitheros)
Brinton, Sir Tatton Heseitine, Michael Percival, Ian
Bromley-Davenport, Lt.-Col.SirWalter Higgins,, Terence L. Peyton, John
Brown, Sir Edward (Bath) Hiley, Joseph Pink, R. Bonner
Bruce-Gardyne, J. Hill, J. E. B. Pounder, Rafton
Bryan, Paul Hogg, Rt. Hn. Quintin Powell, Rt. Hn. J. Enoch
Buchanan-Smith, Atlek (Angus,N&M) Holland, Philip Price, David (Eastleigh)
Bullus, Sir Eric Hooson, Emlyn Prior, J. M. L.
Burden, F. A. Hornby, Richard Pym, Francis
Campbell, Gordon Howell, David (Guildford) Quennell, Miss J. M.
Carlisle, MarK Hunt, John Rawlinson, Rt. Hn. Sir Peter
Carr, Rt. Hn. Robert Hutchison, Michael Clark Renton, Rt. Hn. Sir David
Cary, Sir Robert Iremonger, T. L. Rhys Williams, Sir Brandon
Chichester-clark, R. Irvine, Bryant Godman (Rye) Ridley, Hn. Nicholas
Clark, Henry Jenkin, Patrick (Woodford) Ridsdale, Julian
Clegg, Walter Jennings, J. C. (Burton) Rodgers, Sir John (Sevenoaks)
Cooke, Robert Johnston, Russell (Inverness) Rossi, Hugh (Hornsey)
Corfield, F. V. Jones, Arthur (Northants, S.) Russell, Sir Roland
Crosthwaite-Eyre, Sir Oliver Kershaw, Anthony Scott-Hopkins, James
Crouch, David Kimball, Marcus Sharpies, Richard
Crowder, F. P. King, Evelyn (Dorset, S.) Shaw, Michael (Sc'b'gh & Whitby)
Cunningham, Sir Knox
Currie, G. B. H. Kirk, Peter Silvester, Frederick
Dalkeith, Earl of Kitson, Timothy Sinclair, Sir George
Dance, James Lambton, Viscount Smith, Dudley (W'wick&L'mington)
Davidson James(Aberdeenshire,W.) Lancaster, Col. C. G. Smith, John (London & W'minster)
Dean, Paul (Somerset, N.) Lane, David Speed, Keith
Deedes, Rt. Hn. W. F. (Ashford) Langford-Holt, Sir John Stainton, Keith
Digby, Simon Wingfield Legge-Bourke, Sir Harry Steel, David (Roxburgh)
Dodds-Parker, Douglas Lewis, Kenneth (Rutland) Stodart, Anthony
Doughty, Charles Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield) Stoddart-Scott, Col. Sir M. (Ripon)
Douglas-Home, Rt. Hn. Sir Alec Lloyd, Ian (P'tsm'th, Langstone) Tapsell, Peter
Drayson, G. B. Lubbock, Eric Taylor, Sir Charles (Eastbourne)
du Cann, Rt. Hn. Edward McAdden, Sir Stephen Taylor, Edward M. (G'gow, Cathcart)
Eden, Sir John MacArthur, Ian Taylor, Frank (Mosa Side)
Elliot, Capt. Walter (Carshalton) Mackenzie, Alasdair (Ross&Crom'ty) Teeling, Sir William
Elliott, R.W. (N'c'tle-upon-Tyne,N.) Maclean, Sir Fitzroy Temple, John M.
Emery, Peter Macleod, Rt. Hn. Iain Thatcher, Mrs. Margaret
Errington, Sir Eric McMaster, Stanley Thorpe, Rt. Hn. Jeremy
Eyre, Reginald Macmillian, Maurice (Farnham) Turton, Rt. Hn. R. H.
Farr, John Maddan, Martin Vaughan-Morgan, Rt. Hn. Sir John
Fisher, Nigel Maginnis, John E. Vickers, Dame Joan
Fletcher-Cootie, Charles Marples, Rt. Hn. Ernest Wainwright, Richard (Colne Valley)
Fortescue, Tim Marten, Neil Walker, Peter (Worcester)
Foster, Sir John Maude, Angus Wall, Patrick
Gibson-Watt, David Mawby, Ray Webster, David
Giles, Rear-Adm, Morgan Maydon, Lt.-Cmdr. S. L. C. Wells, John (Maidstone)
Whitelaw, Rt. Hn. William Wolrige-Gordon, Patrick Younger, Hn. George
Williams, Donald (Dudley) Wood, Rt. Hn. Richard
Wills, Sir Gerald (Bridgwater) Woodnutt, Mark TELLERS FOR THE AYES:
Wilson, Geoffrey (Truro) Worsley, Marcus Mr. Anthony Royle and
Winstanley, Dr. M. P. Wylie, N. R. Mr. Bernard Weatherill.
Abse Leo Ensor, David MacColl, James
Albu, Austen Evans, loan L. (Birm'h'm, Yardley) MacDermot, Niall
Allaun, Frank (Salford, E.) Faulds, Andrew Macdonald, A. H.
Alldritt, Walter Fernyhough, E. McGuire, Michael
Allen, Scholefield Fitch, Alan (Wigan) McKay, Mrs. Margaret
Anderson, Donald Fletcher, Raymond (Ilkeston) Mackenzie, Gregor (Rutherglen)
Armstrong, Ernest Fletcher, Ted (Darlington) Mackie, John
Atkins, Ronald (Preston, N.) Foley, Maurice Mackintosh, John P.
Atkinson, Norman (Tottenham) Foot, Michael (Ebbw Vale) Maclennan, Robert
Bacon, Rt. Hn. Alice Ford, Ben Macmillan, Malcolm (Western Isles)
Barnes, Michael Forrester, John McMillan, Tom (Glasgow, C.)
Barnett, Joel Fowler, Gerry McNamara, J. Kevin
Baxter, William Fraser, John (Norwood) MacPherson, Malcolm
Beaney, Alan Freeson, Reginald Mahon, Peter (Preston, S.)
Bence, Cyril Galpem, Sir Myer Mahon, Simon (Bootle)
Benn, Rt. Hn. Anthony Wedgwood Gardner, Tony Mallalieu, J. P. W. (Huddersfield,E.)
Bennett, James (G'gow, Bridgeton) Ginsburg, David Manuel, Archie
Bishop, E. S. Gray, Dr. Hugh (Yarmouth) Mapp, Charles
Blackburn, F. Gregory, Arnold Marks, Kenneth
Btenkinsop, Arthur Grey, Charles (Durham) Marquand, David
Boardman, H. (Leigh) Griffiths, David (Rother Valley) Marsh, Rt. Hn. Richard
Booth, Albert Griffiths, Rt. Hn. James (Llanelly) Mason, Rt. Hn. Roy
Bottomley, Rt. Hn. Arthur Griffiths, Will (Exchange) Mayhew, Christopher
Boyden, James Gunter, Rt. Hn. R. J. Mendelson, J. J.
Braddock, Mrs. E. M. Hamling, William Mikardo, Ian
Bradley, Tom Hannan, William Millan, Bruce
Bray, Dr. Jeremy Harper, Joseph Miller, Dr. M. S.
Brooks, Edwin Harrison, Walter (Wakefield) Milne, Edward (Blyth)
Brown, Rt. Hn. George (Helper) Haseldine, Norman Mitchell, R. C. (S'th'pton, Test)
Brown, Bob(N'c't1e-upon-Tyne,W.) Hattersley, Roy Molloy, William
Brown, Hugh D. (G'gow, Provan) Hazell, Bert Moonman, Eric
Brown, R. W. (Shoreditch & F'bury) Henig, Stanley Morgan, Elystan (Cardiganshire)
Buchan, Norman Hilton, W. S. Morris, Alfred (Wythenshawe)
Buchanan, Richard (G'gow, Sp'burn) Hobden, Dennis (Brighton, K'town) Morris, Charles R. (Openshaw)
Butler, Herbert (Hackney, C.) Hooley, Frank Murray, Albert
Butler, Mrs. Joyce (Wood Green) Houghton, Rt. Hn. Douglas Neal, Harold
Callaghan, Rt. Hn. James Howarth, Harry (Wellingborough) Newens, Stan
Cant, R. B. Howarth, Robert (Bolton, E.) Norwood, Christopher
Carmichael, Neil Howell, Denis (Small Heath) Oakes, Gordon
Carter-Jones, Lewis Howie, W. Ogden, Eric
Castle, Rt. Hn. Barbara Hoy, James O'Malley, Brian
Chapman, Donald Huckfied, Leslie Oram, Albert E.
Coe, Denis Hughes, Rt. Hn. Cledwyn (Anglesey) Orme, Stanley
Coleman, Donald Hughes, Emrys (Ayrshire, S.) Oswald, Thomas
Concannon, J. D. Hughes, Hector (Aberdeen, N.) Owen, Dr. David (Plymouth, S' tn)
Corbet, Mrs. Freda Hughes, Roy (Newport) Owen, Will (Morpeth)
Craddock, George (Bradford, S.) Hunter, Adam Page, Derek (King's Lynn)
Crawshaw, Richard Hynd, John Paget, R. T.
Crosland, Rt. Hn. Anthony Jackson, Colin (B'h'se & Spenb'gh) Palmer, Arthur
Cutlen, Mrs. Alice Jackson, Peter M. (High Peak) Pannell, Rt. Hn. Charles
Dalyell, Tam Jeger, Mrs.Lena (H'b'n & St.P'cras,S.) Park, Trevor
Davidson, Arthur (Accrington) Jenkins, Hugh (Putney) Parker, John (Dagenham)
Davies, Ednyfed Hudson (Conway) Johnson, Carol (Lewisham, S.) Parkyn, Brian (Bedford)
Davies, G. Elfed (Rhondda, E.) Johnson, James (K'ston-on-Hull, W.) Pavitt, Laurence
Davies, Dr. Ernest (Stretford) Jones, Dan (Burnley) Pearson, Arthur (Pontypridd)
Davies, Harold (Leek) Jones, Rt. Hn. SirElwyn (W.Ham,S.) Peart, Rt. Hn. Fred
Davies, Ifor (Gower) Jones, J. Idwal (Wrexham) Pentland, Norman
Davies, S. O. (Merthyr) Jones, T. Alec (Rhondda, West) Prentice, Rt. Hn. R. E.
de Freitas, Rt. Hn. Sir Geoffrey Judd, Frank Prilce, Thomas (Westhoughton)
Delargy, Hugh Kelley, Richard Price, William (Rugby)
Dell, Edmund Kenyon, Clifford Randall, Harry
Dempsey, James Kerr, Mrs. Anne (R'ter & Chatham) Rankin, John
Dewar, Donald Kerr, Dr. David (W'worth, Central) Rees, Merlyn
Diamond, Rt. Hn. John Lawson, George Reynolds, G. W.
Dickens, James Leadbitter, Ted Rhodes, Geoffrey
Dobson, Ray Ledger, Ron Richard, Ivor
Doig, Peter Lee, Rt. Hn. Frederick (Newton) Roberts, Gwilym (Bedfordshire, S.)
Driberg, Tom Lee, Rt. Hn. Frederick (Newton) Robertson, John (Paisley)
Dunn, James A. Lee, John (Reading) Robinson, Rt. Hn. Kenneth (St.P'c'as)
Dunnett, Jack Lestor, Miss Joan Robinson, W. O. J. (Walth'stow, E.)
Dunwoody, Mrs. Gwyneth (Exeter) Lewis, Arthur (W. Ham, N.) Rodgers, William (Stockton)
Eadie, Alex Lomas, Kenneth Roebuck, Roy
Edwards, Robert (Bilston) Loughlin, Charles Rose, Paul
Edwards, William (Merioneth) Luard, Evan Ross, Rt. Hn. William
Ellis, John Mabon, Dr. J. Dickson Rowlands, E.(Cardiff, N.)
English, Michael McBride, Neil Ryan, John
Shaw, Arnold (llford, S.) Swain. Thomas Whitlock, Ben
Sheldon, Robert Swingler, Stephen Whitlock, William
Shinwell, Rt. Hn. E. Symonds, J. B. Williams, Alan (Swansea, W.)
Shore, Rt. Hn. Peter (Stepney) Thornton, Ernest Williams, Alan Lee (Hornchurch)
Short,Rt.Hn.Edwarcl(N'c'tle-u-Tyne) Tinn, James Williams, Clifford (Abertillery)
Silkin, Rt. Hn. John (Deptford) Tomney, Frank Williams, Mrs. Shirley (Hitchin)
Silkin, Hn. S. C. (Dulwich) Urwin, T. W. Willis, Rt. Hn. George
Silverman, Julius (Aston) Varley, Eric G. Winnick, David
Slater, Joseph Walden, Brian (All Saints) Woodburn, Rt. Hn. A.
Small, William Walker, Harold (Doncaster) woof, Robert
Snow, Julian Wallace, George Wyatt, Woodrow
Spriggs, Leslie Watkins, David (Consett) Yates, Victor
Stonehouse, John Watkins, Tudor (Brecon & Radnor)
Strauss, Rt. Hn. G. R. Weitzman, David TELLERS FOR THE NOES:
Summerskill, Hn. Dr. Shirley Wellbeloved, James Mr. Ernest G. Perry and Mr. John McCann.
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