§ 11. Mr. John Townendasked the Secretary of State for Transport if he will make a statement on progress in the Government's policy of disposing of parts of nationalised industries which are within the responsibility of his Department.
§ Mr. FowlerThe Transport Act 1980 gave powers to return the National Freight Company Ltd. entirely to the private sector and I intend to do so as soon as practicable. The current Transport Bill will enable me to dispose of a 49 per cent. stake in the British Transport Docks Board undertaking. The Bill also opens the way for the introduction of private capital into British Rail's subsidiary businesses. I have also announced today my agreement in principle to proposals from the British Railways Board which would place three of its Scottish hotels in a private sector company in which the board would retain a one-third shareholding.
§ Mr. TownendI thank my right hon. Friend for that reply. Does not he agree that the higher the proceeds from the sale of assets to the private sector, the more resources there will be available for investment? Would it not be better to maximise the proceeds by selling British Transport Hotels and Sealink lock, stock and barrel? Is my right hon. Friend aware that many people will be disturbed by his statement today to the effect that British Rail intends to invest the money from the sale of the shares in its hotel company in other British Rail hotels? Might it not be better to use that money for investment in the renewal of rural lines, such as the Hull, Bridlington and Scarborough line?
§ Mr. FowlerThat would not be a sensible course for British Rail to take. We have told British Rail that it has the discretion to put forward such proposals. British Rail has come to the conclusion—I stress that it is its conclusion—that it is to the benefit of the British Railways Board to sell the interest in the hotels. However, it wishes to maintain a continuing interest in the hotel business. I 918 should have thought it reasonable to allow it to do so. Control in the business will pass and that is the most important factor.
§ Mr. CookIs not the nub of the matter that it is impossible to conceive of a more depressed market on which to launch the sale of a major asset than the state to which the Government have reduced the economy? Given the Secretary of State's earlier statement, will he give an assurance that neither he nor the board has received any advice to the effect that it would be against the public's financial interest to sell now? Will the right hon. Gentleman recognise that unless he increases the external financing limit on British Rail by the amount gained from the sale, not a single new penny will be released for investment in British Transport Hotels or in any other part of British Rail?
§ Mr. FowlerWe want to achieve something that is to the benefit of the British Railways Board. The proceeds will go to the board. It will then have discretion as to what they are used for. Some of the proceeds will clearly be used for the hotel business. I confirm that the British Railways Board took the advice of hotel valuers and acted upon it.
§ Mr. Stephen RossHow far have British Rail's proposals gone as regards the disposal of Sealink? Will the right hon. Gentleman reconsider his earlier decision to sell the operation as a whole and give permission to split up at least some parts of it, particularly the routes to the Isle of Wight?
§ Mr. FowlerThe decision about Sealink is before the Monopolies and Mergers Commission. I can say nothing useful until a decision has been reached.
§ Mr. Allan StewartDoes not my right hon. Friend agree that his decision in respect of Scottish hotels will be welcomed by all in Scotland—[Interruption.]—with the exception of the lunatic Left? Does not he further agree that the development of the hotels by private capital might be of considerable benefit, not only to tourism, but in giving a proper impression to visiting business men of the facilities available in Scotland?
§ Mr. FowlerMy hon. Friend is right. The decision is important for Scottish tourism. Given the increased development in the group, I look forward to the fact that the assets and attractions of Scottish tourism will be increased.
§ Mr. BoothIf the proceeds from the sales go to the British Railways Board, how can they be used to reduce its call on the National Loans Fund, as was claimed in the financial memorandum to the Transport Bill?
§ Mr. FowlerThe funds will go to the British Railways Board and it will use its discretion as to how to make use of them. The proceeds will amount to over £10 million. British Rail will wish to maintain a continuing one-third interest in the hotel group that is then set up.