HC Deb 24 May 1982 vol 24 cc737-9
Mr. Robert Hughes

I beg to move amendment No. 1, in page 2, line 10, leave out subsection (2).

Mr. Deputy Speaker (Mr. Ernest Armstrong)

With this it will be convenient to take amendment No. 3, in page 2 line 14, leave out 'with the consent of the Secretary of State'.

Mr. Hughes

The purpose of these amendments is to discover what considerations the Secretary of State has in mind in giving his consent to the disposal of assets or the sale of shares in the National Bus Company. On Second Reading the right hon. Gentleman made great play of the advantages to the NBC of privatisation. He said that the access of private capital would be beneficial, but as we proceeded through the debate in Committee it became clear that the well-being of the NBC was the thing that was furthest from the Government's mind. In this part of the Bill they are looking for goodies to share out. They want to make sure that their friends manage to get whatever is going on which there might be some profit.

The only two rational parts of the NBC that might be available for privatisation are National Express and the holiday business. National Express is run as an integrated company, and neither its operations nor those of she holiday side of the business can be separated from the NBC without damaging the company. In National Express, the work force and the maintenance depots for the fleet are fully interchangeable.

The latest NBC accounts show that National Express contributed £4 million to the company as a whole. That £4 million is equivalent to 10 per cent. of the local authority support given to the NBC. If that amount of money goes from NBC, a large number of subsidiary services that are run by the NBC for example in rural areas, will be put at risk.

Many of the services that are arranged in conjunction with local authorities will be put at risk, for the simple reason that local authorities do not have the extra cash to put up. Anyone who knows anything about public transport knows that cross-subsidisation is a natural part of a transport undertaking. That cross-subsidisation is route by route, and day by day and relates to many of the services. It is clear that if a purely accountant's view is taken of each individual service and route, the majority of the routes would not stand being run as a viable concern.

Nor can it be argued that the services will be taken up by private operators. There is no guarantee that they will succeed. Indeed, many of the private bus operators who moved into the business, or sought to expand their businesses because of deregulation, have failed. Some of my hon. Friends have pointed out that of the 19 operators who moved into the business, only five remain. Great damage can be done to the National Bus Company because of the Government's insistence and dogmatism.

10.15 pm

There is no doubt that great pressure will be exerted by the Secretary of State to have bits and pieces sold off. But the National Bus Company clearly does not want large-scale privatisation. The company may have stated its ability to live with the Governmment's proposals, but we are entitled to know from the Secretary of State the conditions under which he would give his consent and to seek an assurance that he will not allow damage to the National Bus Company through backstairs pressure. I hope that the Government will make clear their intentions. That was not done on Second Reading.

Mr. David Howell

The hon Gentleman seeks to establish the conditions under which the Secretary of State would give consent to the disposal of shares or other securities in the subsidiaries of the National Bus Company. The amendment would remove the requirement of the company to obtain consent. In other words, the company would be free to dispose of any shares in any of its subsidiaries at any time on any terms. I realise that this is presumably a probing amendment. I cannot believe that it is serious. If it were, it would be a very difficult proposition to accept.

The hon. Gentleman asks about the Secretary of State's consent and the conditions under which it will be given. It is because, in these transactions, the Secretary of State will be acting as the custodian of the public interest that his consent is required. However much faith one may have in the board and management of the company—I have a great deal of faith in them—it would be illogical to leave it to them to determine whether a particular subsidiary should remain in the public sector. That is a matter for the elected Government of the day, who are rightly answerable to Parliament for their decisions.

The Secretary of State would need to take account of the public interest in two particular ways. First, the taxpayer has an interest in ensuring that a fair price is obtained for the sale of public assets. Secondly, the travelling public have an interest in ensuring that whatever changes are made they lead to an improvement in the range and quality of services provided. That is a sensible objective.

I know that the Opposition start from a rather defeatist view. They believe that any change that involves bringing in the private sector or private enterprise is bound to be for the worse. They stick to that view through thick and thin. The Government take a contrary view. We believe that we should not limit the opportunities for developing the NBC's commercial operations and improving the facilities that can be offered to the passenger. We believe that it would be wholly wrong to deny the NBC the means to attract private capital.

It is because we take what we believe to be a practical and commonsense view, and one that is in the interests of the development of the services of the NBC, that we say that the Government of the day must be the judge of whether proposals to sell shares are in the public interest. The amendment would remove what we regard as an essential safeguard. I hope that the amendment will be rejected if it cannot be withdrawn.

The hon. Gentleman also indulged in some wider observations about the contribution that National Express and National Holidays make to the long-run costs of the National Bus Company. It is worth while putting some matters on the record. There is a danger that the hon. Gentleman and his hon. Friends will get these things slightly out of perspective. The NBC's long-run unavoidable costs were helped to the tune of £4 million in the last year, 1980, for which we have figures.

The stage carriage turnover of the National Bus Company was £492 million, which is more than 120 times greater. Even if that £4 million were to disappear with privatisation, that would be a small amount. The Government believe that with privatisation the minority shareholdings that the NBC will have in subsidiaries will bring benefit to the NBC and enable it to strengthen and develop its operations. We believe that that is the right way to go on all counts. I cannot see how the amendment would help the Bill in any way. I hope that I have answered the questions that lie behind the amendment.

Mr. Robert Hughes

I realise that if the amendment were accepted the National Bus Company would be free to dispose of any subsidiaries or to sell shares without the consent of the Secretary of State. It is my understanding that that has always been the case. It can dispose of property if that is desirable, under previous Acts. It is news to me that the intention of providing for the consent of the Secretary of State is to protect the public interest, as everything in clause 1 appears to us to be against the public interest. Having made that point, and having listened to the Secretary of State, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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