HC Deb 26 October 1976 vol 918 cc277-85

3.37 p.m.

Mr. Ian Gow (Eastbourne)

I beg to move, That leave be given to bring in a Bill to restore the National Freight Corporation and its subsidiaries to private ownership. The National Freight Corporation and the National Bus Company were set up under the Transport Act 1968. On 3rd August I sought the leave of the House to introduce a Bill to denationalise the National Bus Company. It will be a matter of great regret to the House that leave was denied to me.

Today it is the turn of the National Freight Corporation. Section 41 of the Transport Act 1968 places a duty on the National Freight Corporation to break even financially, taking one year with another. However, the Corporation has been almost consistently in breach of that duty.

In 1974 the Corporation made a loss of £16 million and last year it made a record loss of £31 million. During the seven years that the Corporation has been in existence it has made an accumulated loss of £51 million. The purpose of my Bill is to put a stop to loss-making on this alarming scale. The failure of the Corporation to fulfil its statutory duty ought to oblige the Government to draw the appropriate lesson, namely that there is too close a relationship between nationalisation and loss-making. In any circumstances a loss of £31 million would require a radical remedy. When even this Government are beginning to understand that the burden of public debt can no longer be sustained, I propose the radical remedy of denationalisation which would liberate the National Freight Corporation from the sterile control of the Treasury Bench.

There is no reason why the Corporation and its subsidiaries should not be run profitably. The Corporation does not have a monopoly position like the National Bus Company or British Rail. On the contrary, it accounts for less than 15 per cent. of the total annual freight movement in the country. Whereas the private sector has, in the nature of things, been obliged to make a profit over these last years, it is the Corporation alone which has been run at a loss.

The whole history of the Corporation is one of a saddening gap between promise and performance. In its first annual report, for 1969, presented to my right hon. Friend the Member for Yeovil (Mr. Peyton) when he was the responsible Minister, the objectives of the Corporation were summarised as follows: Last, but not least, we seek to escape the frustrations and general failure which the Corporation will suffer unless it pays its way on a commercial basis. Later, the immortal words appeared: The fundamental aim at all times is to be non-monolithic, non-bureaucratic and non-subsidised. The following are not the words of an unknown Member from a seaside resort. They are the words of the Chairman of the Corporation reporting to the Secretary of State. He said that the reality has been that nationalisation itself has been …a bad practice reminiscent of mediaeval usury. You, Mr. Speaker, are a saintly man—

Mr. Speaker

The hon. Gentleman still only has three minutes left.

Mr. Gow

That is more than can be said for the Secretary of State. But the Chairman of the Corporation has described the financial structure of the Corporation as being usury reminiscent of mediaeval times. The last verse of Psalm 15, which is possibly engraven upon your heart, Mr. Speaker, reminds us that the man—and I suppose, also the Government—who shall not fail is He that hath not given his money upon usury, nor taken reward against the innocent. The financial structure of the Corporation is usurious, and in permitting losses on this scale the Government are taking reward against the innocent—the taxpayer.

I do not blame the directors or the 44,000 men and women who work for the Corporation for these losses. They are the helpless victims of a system over which they have no control and for which they have increasing contempt. Fortunately, the ingenuity of man, with the support of the Conservative Party, has provided a ready solution. Competitive free enterprise and the disciplines of the market place will provide what the politicians can never provide, a proper financial structure, sufficient investment, a competitive service to meet the needs of the public, and, above all, a profit.

It may be argued that my Bill will take up valuable parliamentary time. Not so. It will have two clauses only. There is no reason to believe that it will be delayed in another place. It will oblige the Secretary of State to sell the National Freight Corporation and its subsidiaries at the best possible price. Such a step would, to quote my right hon. Friend the Member for Sidcup (Mr. Heath), "at a stroke" reduce the Government's borrowing requirement and lighten the burden of the Secretary of State for Transport, who is not even in his place today. Indeed, if I had my way, I would continue the process of denationalisation of all the projects under his control so that he, too, would become redundant I commend the Bill to the House.

3.45 p.m.

Mr. Robin F. Cook (Edinburgh, Central)

The hon. Member for Eastbourne (Mr. Gow) made great play of the fact that last year the National Freight Corporation suffered a deficit of £31 million. He follows these matters closely, and he must be aware that in the current year it has taken substantial strides towards reducing the deficit. [Laughter.] Clearly, hon. Members do not follow these things as closely as they might.

Only last Thursday, the Chairman of the Corporation, opening, I am glad to say, a new terminal in Scotland, announced that Freightliners Limited, which last year had lost £1 million, would have a surplus of £1 million this year. There is every reason to suppose that we shall see the National Freight Corporation as a whole moving from a deficit on trading account to surplus. In any year that would have been a remarkable achievement, but it is an even greater achievement in this year, a year of industrial recession, not marked by profitability in the private sector road haulage but rather by a large number of bankruptcies. Such a great achievement by the National Freight Corporation deserves better from this House than the hon. Member's doctrinaire jibes. We should pay tribute to the management and staff, who have worked together so well to bring about this achievement.

Even if we accept the depressing view of the hon. Member for Eastbourne that nationalised industries are necessarily associated with mounting and record deficits, he is proposing a curious remedy. He is saying that we should put up a sign at the headquarters of the Corporation, "for Sale", and that there should be a day when he gets up on a rostrum with a hammer and auctions off the Corporation in job lots. If he gets to that day, he will not find a shortage of buyers. At the start of the day, business men will be trampling over each other to get control of companies such as Pickfords, which last year declared, for the third year running, a record profit, and Tank Haulage, which doubled its profit last year. The Bill is being introduced because the private sector does not want to put up with the successful competition that these companies provide.

But as the day wears on, the bidders will get fewer. At the end of the afternoon, the hon. Gentleman will be left with National Carriers and Freightliners Ltd. He will then discover that there is only one bidder. There will be a moment of blind panic for him when he discovers that it is British Rail, from which National Carriers and Freightliners Limited came and which wants that business back on to rail. He will not want that, of course. He will then take National Carriers and sell it off in job lots. He will sell off the profitable assets, the attractive sites and the specialised lines, until at the end of the day he is left holding assets which no one wants and also the expensive commitment to the pensioners which no one will buy off him.

Thereby, we shall have a repetition of the experience of the denationalisation of British Road Services in 1953, when the nation was left with a loss-making company, with the profitable parts of the service sold off. Worse still, not only shall we be saddled with a loss-making enterprise but the hon. Gentleman will have destroyed a valuable national asset in a vital industry.

The National Freight Corporation is the one freight organisation in this country which straddles both rail and road. Many of us on this side of the House are disappointed that the Corporation has not shifted more traffic to rail, which was another obligation laid upon it by the 1968 Act. Indeed, only last year, National Carriers halved the proportion of its traffic which goes by rail. It is difficult to reconcile that with the commitment it was given to put whatever scrap of freight it can on to the railways.

Nevertheless, if we are serious about wishing to turn our aim of an integrated transport system into reality, it makes no sense to dismember the one freight organisation which is intermodal on the principle of selling it to the highest bidder.

The hon. Gentleman said that the NFC is not a monopoly. That is right. However, he did the organisation less than justice in that respect. It is certainly not monolithic. It is genuinely regional in management structure. Nevertheless, it is by far the largest single major operator in the freight industry.

There are advantages to the whole industry in having one major operator with the sense of social responsibility that goes with being State owned. The NFC takes seriously, even if the Opposition do not, its role as a pacemaker in the haulage industry. In eight years, it has improved standards in conditions and standards of work, professional qualifications, technical innovation, such as the electrically operated Silent Karrier, and pioneered new markets such as waste recycling.

Moreover, the private sector recognises the valuable role of the NFC as a pacemaker within the industry. We know that, because the private sector is continually poaching Freight Corporation trained managers. We know it, too, because we have been through an extensive process of consultation on transport policy. In response to the consultative document, 1,000 replies were lodged with the Department. I defy the hon. Member

for Eastbourne to find one single document submitted by a significant haulage or road-based organisation which calls for the dismemberment of the NFC. There is not one.

Why does the hon. Member for Eastbourne seek to introduce such a measure? This is not the first Bill which he has introduced to denationalise a public undertaking. The hon. Gentleman has given us due warning that he intends to move through the public sector asking the question: what does it do and what can I do to stop it from doing it? It is a new dogmatism that anything which is public enterprise is bad and anything which is private enterprise is good.

Several times in the last month Labour Members have been asked by Opposition Front Bench spokesmen whether they have a committment to the mixed economy. I have no doubt about my commitment to a genuine mixed economy. Perhaps it is time that the Opposition Front Bench asked the hon. Member for Eastbourne and his colleagues whether they accept a mixed economy. In the meantime, I think that we should give the Opposition Front Bench the opportunity to stand up and be counted for the mixed economy by coming out in defence of the State's modest, but valuable, stake in the freight business.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business):—

The House divided: Ayes 165, Noes 168.

Division No. 343.] AYES [3.55 p.m.
Adley, Robert Clark, William (Croydon S) Farr, John
Arnold, Tom Clarke, Kenneth (Rushcliffe) Finsberg, Geoffrey
Atkins, Rt Hon H. (Spelthorne) Clegg, Walter Fry, Peter
Awdry, Daniel Cooke, Robert (Bristol W) Gilmour, Rt Hon Ian (Chesham)
Baker, Kenneth Cope, John Goodhart, Philip
Bennett, Sir Frederic (Torbay) Cormack, Patrick Goodhew, Victor
Benyon, W. Corrie, John Goodlad, Alastair
Berry, Hon Anthony Costain, A. P. Grant, Anthony (Harrow C)
Biggs-Davison, John Crawford, Douglas Grieve, Percy
Blaker, Peter Crouch, David Griffiths, Eldon
Boscawen, Hon Robert Dean, Paul (N Somerset) Grimond, Rt Hon J.
Bottomley, Peter Dodsworth, Geoffrey Grist, Ian
Boyson, Dr Rhodes (Brent) Douglas-Hamilton, Lord James Grylls, Michael
Braine, Sir Bernard Drayson, Burnaby Hall, Sir John
Brittan, Leon Dunlop, John Hall-Davis, A. G. F.
Brocklebank-Fowler, C. Eden, Rt Hon Sir John Hamilton, Michael (Salisbury)
Brown, Sir Edward (Bath) Edwards, Nicholas (Pembroke) Hampson, Dr Keith
Bulmer, Esmond Emery, Peter Hannam, John
Butler, Adam (Bosworth) Eyre, Reginald Harrison, Col Sir Harwood (Eye)
Carlisle, Mark Fairbairn, Nicholas Harvie Anderson, Rt Hon Miss
Clark, Alan (Plymouth, Sutton) Fairgrieve, Russell Hastings, Stephen
Hawkins, Paul Mills, Peter Shaw, Giles (Pudsey)
Hayhoe, Barney Mitchell, David (Basingstoke) Shelton, William (Streatham)
Hicks, Robert Moate, Roger Shepherd, Colin
Higgins, Terence L. Molyneaux, James Silvester, Fred
Holland, Philip Monro, Hector Sims, Roger
Hordern, Peter Montgomery, Fergus Sinclair, Sir George
Howe, Rt Hon Sir Geoffrey Moore, John (Croydon C) Skeet, T. H. H.
Hurd, Douglas More, Jasper (Ludlow) Speed, Keith
Hutchison, Michael Clark Morgan, Geraint Spicer, Michael (S Worcester)
James, David Morrison, Charles (Devizes) Sproat, Iain
Jenkin, Rt Hon P. (Wanst'd & W'df'd) Morrison, Hon Peter (Chester) Stainton, Keith
Jessel, Toby Mudd, David Stanley, John
Kershaw, Anthony Neave, Airey Steel, David (Roxburgh)
King, Tom (Bridgwater) Nelson, Anthony Steen, Anthony (Wavertree)
Knight, Mrs Jill Newton, Tony Stewart, Ian (Hitchin)
Lamont, Norman Nott, John Stradling Thomas, J.
Lane, David Onslow, Cranley Taylor, Teddy (Cathcart)
Lawson, Nigel Page, John (Harrow West) Tebbit, Norman
Le Marchant, Spencer Page, Rt Hon R. Graham (Crosby) Thatcher, Rt Hon Margaret
Lloyd, Ian Paisley, Rev Ian Thomas, Rt Hon P. (Hendon S)
Loveridge, John Pardoe, John Vaughan, Dr Gerald
Luce, Richard Parkinson, Cecil Wainwright, Richard (Colne V)
McAdden, Sir Stephen Pattie, Geoffrey Wakeham, John
McCrindle, Robert Penhaligon, David Walters, Dennis
Macfarlane, Neil Powell, Rt Hon J. Enoch Weatherill, Bernard
MacGregor, John Pym, Rt Hon Francis Wells, John
Macmillan, Rt Hon M. (Farnham) Rathbone, Tim Whitelaw, Rt Hon William
Marten, Neil Renton, Rt Hon Sir D. (Hunts) Winterton, Nicholas
Mates, Michael Renton, Tim (Mid-Sussex) Wood, Rt Hon Richard
Mather, Carol Rifkind, Malcolm Young, Sir G. (Ealing, Acton)
Maude, Angus Roberts, Michael (Cardiff NW) Younger, Hon George
Mawby, Ray Roberts, Wyn (Conway)
Maxwell-Hyslop, Robin Rodgers Sir John (Sevenoaks) TELLERS FOR THE AYES:
Mayhew, Patrick Rossi, Hugh (Hornsey) Mr. Ian Gow and
Meyer, Sir Anthony Rost, Peter (SE Derbyshire) Mr. Nicholas Ridley.
Miller, Hal (Bromsgrove)
Allaun, Frank Ennals, David Mabon, Dr J. Dickson
Archer, Peter Evans, Fred (Caerphilly) McCartney, Hugh
Armstrong, Ernest Evans, Ioan (Aberdare) McDonald, Dr Oonagh
Ashton, Joe Flannery, Martin McElhone, Frank
Atkinson, Norman Fletcher, Ted (Darlington) MacFarquhar, Roderick
Bates, Alf Forrester, John MacKenzie, Gregor
Benn, Rt Hon Anthony Wedgwood Garrett, John (Norwich S) McMillan, Tom (Glasgow C)
Bennett, Andrew (Stockport N) Garrett, W. E. (Wallsend) Madden, Max
Bidwell, Sydney George, Bruce Marks, Kenneth
Bishop, E. S. Gould, Bryan Marshall, Dr Edmund (Goole)
Blenkinsop, Arthur Graham, Ted Maynard, Miss Joan
Booth, Rt Hon Albert Grant, George (Morpeth) Mellish, Rt Hon Robert
Bottomley, Rt Hon Arthur Grant, John (Islington C) Mikardo, Ian
Boyden, James (Bish Auck) Grocott, Bruce Millan, Rt Hon Bruce
Bray, Dr Jeremy Hamilton, James (Bothwell) Miller, Dr M. S. (E Kilbride)
Brown, Hugh D. (Provan) Hardy, Peter Murray, Rt Hon Ronald King
Brown, Robert C. (Newcastle W) Harper, Joseph Newens, Stanley
Buchan, Norman Harrison, Walter (Wakefield) Ogden, Eric
Buchanan, Richard Hatton, Frank O'Halloran, Michael
Callaghan, Jim (Middleton & P) Heffer, Eric S. Orme, Rt Hon Stanley
Campbell, Ian Hooley, Frank Owen, Rt Hon Dr David
Cant, R. B. Horam, John Park, George
Carmichael, Neil Hoyle, Doug (Nelson) Pavitt, Laurie
Carter-Jones, Lewis Hughes, Robert (Aberdeen N) Price, William (Rugby)
Castle, Rt Hon Barbara Hughes, Roy (Newport) Radice, Giles
Clemitson, Ivor Hunter, Adam Rees, Rt Hon Merlyn (Leeds S)
Cocks, Rt Hon Michael (Bristol S) Irvine, Rt Hon Sir A. (Edge Hill) Roberts, Albert (Normanton)
Cohen, Stanley Irving, Rt Hon S. (Dartford) Robinson, Geoffrey
Coleman, Donald Jay, Rt Hon Douglas Roderick, Caerwyn
Colquhoun, Ms Maureen Jenkins, Hugh (Putney) Rodgers George (Chorley)
Cook, Robin F. (Edin C) John, Brynmor Roper, John
Corbett, Robin Johnson, James (Hull West) Rowlands, Ted
Cox, Thomas (Tooting) Johnson, Walter (Derby S) Ryman, John
Cronin, John Judd, Frank Sandelson, Neville
Cryer, Bob Kaufman, Gerald Sedgemore, Brian
Davidson, Arthur Kelley, Richard Selby, Harry
Davies, Bryan (Enfield N) Kilroy-Silk, Robert Shaw, Arnold (Ilford South)
Davis, Clinton (Hackney C) Lambie, David Sheldon, Robert (Ashton-u-Lyne)
Deakins, Eric Lamond, James Short, Mrs Renee (Wolv NE)
Dean, Joseph (Leeds West) Latham, Arthur (Paddington) Silverman, Julius
Dempsey, James Leadbitter, Ted Skinner, Dennis
Doig, Peter Lewis, Ron (Carlisle) Small, William
Dormand, J. D. Lipton, Marcus Smith, John (N Lanarkshire)
Edge, Geoff Litterick, Tom Spearing, Nigel
Edwards, Robert (Wolv SE) Loyden, Eddie Spriggs, Leslie
Ellis, John (Brigg & Scun) Lyon, Alexander (York) Stallard, A. W.
Stoddart, David Walker, Harold (Doncaster) Williams, Sir Thomas (Warrington)
Stott, Roger Walker, Terry (Kingswood) Wilson, Alexander (Hamilton)
Strang, Gavin Ward, Michael Wilson, William (Coventry SE)
Strauss, Rt Hon G. R. Watkins, David Wise, Mrs Audrey
Summerskill, Hon Dr Shirley Watkinson, John Woodall, Alec
Taylor, Mrs Ann (Bolton W) Weetch, Ken Wrigglesworth, Ian
Thorne, Stan (Preston South) Weitzman, David Young, David (Bolton E)
Tierney, Sydney While, Frank R. (Bury)
Tinn, James White, James (Pollock) TELLERS FOR THE NOES:
Tomlinson, John Whitlock, William Mr. Dennis Canavan and
Urwin, T. W. Williams, Alan Lee (Hornch'ch) Mr. Kevin McNamara.
Wainwright, Edwin (Dearne V)

Question accordingly negatived.

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