HC Deb 23 December 1981 vol 15 cc983-4
12. Mr. Canavan

asked the Secretary of State for Transport if he is satisfied with the response he has had to his policy of reducing the level of public enterprise in transport and related services.

Mr. Clarke

Our policy is to introduce more private capital into the transport system. We are making good progress and we shall ensure that it is maintained.

Mr. Canavan

Will the Minister confirm that the independent consultants called in by British Transport Hotels Ltd. advised against going ahead, at least at this stage, with the sale of Gleneagles, the North British and the Caledonian hotels? Is it not a measure of the extreme doctrinaire attitude of the Government that they are not only hell-bent on selling successful public enterprises, but that they are failing to get the best possible deal on the market? They are guilty of cheating the public by acting against the public interest.

Mr. Clarke

That deal was put together by British Rail. The Government do not know what advice it took, but we are sure that it took as much advice as it could before going ahead with the proposal. British Rail could benefit by getting private capital into the subsidiaries, which will unlock the resources that are now locked into them. The hotels will also benefit, because for many years they have been deprived of investment. They have been under the shadow of the main rail business and have not had access to as much capital as they would wish, because whenever there have been restraints the money has gone to the main railway business.

Mr. Chapman

How much private capital has been invested in the introduction of long-distance, private coach services? Is it true that, as a result of that investment, coach fares have fallen dramatically? If so, will my hon. and learned Friend encourage more private capital to be put into State ventures?

Mr. Clarke

We have encouraged that investment by the Transport Act 1980, which removed the old licensing restrictions. There has been a tremendous upsurge in inter-city travel and many private operators have introduced important inter-city routes. National Express also took advantage of many opportunities. It is an example of both private and public enterprise taking advantage of the liberalising of the transport system, which the Government wholly favour.

Mr. Campbell-Savours

What is the Minister's reply to the suggestion that if further routes are allocated to Yeowarts in Whitehaven, more rural routes will be lost in my constituency?

Mr. Clarke

I do not accept that there is a connection between the Yeowarts appeal and the loss of rural services in Cumbria, as is being claimed by some people in the hon. Gentleman's locality. I understand that Yeowarts has made new applications for Sunday and evening services, which were claimed to be unprofitable routes. I hope that it is not argued that Yeowarts was first creaming off profitable routes, to which there was resistance, and that it is now taking on unprofitable routes. The cross-subsidy case is important, but it can be grossly overstated. I do not accept the interpretation that is now being put on events in Cumbria.

Mr. Neil Thorne

Will my hon. and learned Friend do his best to encourage investment in such enterprises by their staff? When staff become involved in some forth of partnership deal, they give of their best.

Mr. Clarke

The National Freight Company denationalisation is one of the best examples of that. It is interesting that when the Government legislate to enable them to denationalise such a company, the staff come forward with proposals that enable them to acquire a stake in it. It took the wind out of the sails of the doctrinaire Opposition, who were against the legislation.

Mr. Robert Hughes

As the Government are so keen on public authorities operating in a commercial manner, why are they compelling British Rail to sell its assets, when British Rail believes that that sale is against its commercial and business interests?

Mr. Clarke

We have an agreement with the chairman of British Rail and the British Railways Board that early progress will be made to get private capital into British Rail hotels, Sealink and the property board. Obviously it obtains the best possible price for the stake that the private sector buys. It makes good sense for the railways and the subsidiaries, and it will open up new opportunities for the subsidiary businesses.

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