§
Motion made, and Question proposed,
That any Act resulting from the Transport Bill ("the Transport Act") may provide —
- (a) that section 16(1)(a) of the Finance Act 1970 (which excludes precept income and grants in computing the profits of a Passenger Transport Executive chargeable to corporation tax) shall not apply with respect to any accounting period beginning on or after the passing of the Transport Act;
- (b) that, in computing for the purposes of the Corporation Tax Acts the profit or loss of a Passenger Transport Executive for any accounting period beginning on or after the passing of the Transport Act, the loss of any earlier accounting period shall be computed as if section 16(1)(a) of the Finance Act 1970 had not been enacted; and
- (c) for the payment of sums into the Consolidated Fund and for increased payments into the Consolidated Fund under any other enactment.—[Mr. Garel-Jones.]
§ Mr. Jim Craigen (Glasgow, Maryhill)I shall not detain the House for long. That is not a promise to the Secretary of State but a threat, because we expect him to answer quite a number of questions which were not dealt with earlier on Second Reading. If the Secretary of State does not give those matters attention now, I assure him that the debate could well exceed three hours.
The ways and means resolution is rather tightly drawn but touches on several major and important issues. The first is the level of fares with the implications of clause 105 which cuts tax relief resulting from section 16(1)(a) of the Finance Act 1970. Other important issues concern the assets and disposal of the National Bus Company. The Secretary of State touched on that this afternoon in terms of the outstanding debt, but we should like to know more about how the NBC will be broken up and disposed of for sale. Thirdly, the resolution affects the break-up of the passenger transport executives. Again there are considerable implications for various parts of the United Kingdom, not least Strathclyde. It is important that the Secretary of State should give more details to the House about the effects that that will have.
The provisions seem to suggest that the Secretary of State is more interested in helping the Treasury than the travelling public. The cost of transport will increase, notwithstanding the introduction of more competition and privatisation. When comments were made earlier about the availability of bus transport, I thought that the remarks of the late R. A. Butler were apt. He said that those who miss the bus must resign themselves to walking. In many areas the travelling public will have no choice.
What is the effect of clause 105(1), which makes provision to cut tax relief? If it is removed, there will clearly be an extra charge. When the Minister replies, will he tell us what that will cost? The Government have made a great deal of the importance of rate-capping legislation. It is important that the Minister tells us how the Government will keep down bus fares, which have a considerable effect on the social and economic life of the country. My hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall) spoke earlier about dependence on public transport, which exists in areas such as 281 Strathclyde and especially in Glasgow, where 70 per cent. of households have no car. It is essential that the Minister clarifies those arrangements.
Under clause 51, the Secretary of State will have powers to extinguish past loans to the NBC, and to use the proceeds of sales to repay debts. The Government have been singularly unsuccessful so far in their attempts to push parts of the NBC into the private sector. It will be useful if the Minister tells us what restructuring lies ahead. As a Scotsman, I am bound to say that listening to some comments made by English colleagues, there could be a not inconsiderable change in many parts of the country.
Moreover, it would be useful to know what is meant by the maximisation of the proceeds to the Treasury. It is the Chancellor of the Exchequer rather than the consumer who will benefit from the sale of the assets of the National Bus Company. I understand that the NBC board will be required to submit a disposal programme to the Department of Transport. I wonder whether the Secretary of State would enlighten the House as to what discussions have taken place so far, and how he sees the hara-kiri ahead in terms of the dismemberment of the National Bus Company.
The Secretary of State might also comment on what will happen with the break-up of the passenger transport executives. The shattering of the structures, which is ostensibly intended to assist the travelling public in those PTE areas, carries with it an ominous message of higher fares and redundancies, and a worse service in many communities. I want a little more information from the Secretary of State on that, and on what will happen to the money from fees and fines that is received by the traffic commissioners.
Earlier this evening, the Under-Secretary of State gave us elocution lessons and referred to "Pygmalion", but as he was talking what came to mind was the word "chameleon". I listened to the speeches of some Conservative Members, and although in principle they had some good things to say about the Bill, they always had qualifications. They always asked the Secretary of State to protect this, or reimburse that. It did not surprise me that not one Scottish Tory Back-Bench Member had a good word to say about the Bill, because not one of them spoke in the debate, and precious few of them were here this afternoon.
§ Mr. Tristan Garel-Jones (Watford)Yes they were.
§ Mr. CraigenThe Whip obviously does not know all the Scottish Back-Bench Members, or he would not have made that statement.
I know the Secretary of State only too well, and he may recall that in a previous incarnation, when he was Minister of State at the Foreign and Commonwealth Office, he was planning to sent me on a long boat trip to St. Helena to carry out an employment exercise. However, it was impossible to go there because of the poor boat service. This afternoon, when he was telling the bus industry that its motto should be "Take a bus", I thought that the Secretary of State was taking the House for a ride. The Bill will not do much for the travelling public — [Interruption.] It did not surprise me when I read the appendix — I hope that the hon. Member for Mid-Worcestershire (Mr. Forth), who I believe comes from Glasgow, also read the appendix—that the Department of Transport had to search for information in Australia to 282 prove its case on the privatisation of buses. Page 61—I am sure the hon. Gentleman knows it chapter and verse —states:
While there is no direct UK evidence, some guidance can be obtained by considering a study of private urban bus operators in Australia, in towns where they accounted for 46 per cent. of buses in use.I do not know whether the Department had to go to Alice Springs to obtain the information that the Department believes will be relevant to the running of bus services of the United Kingdom, but when I looked at the serried ranks on the Government Back Benches, I thought, "There cannot be a body of men and women who know less about travelling on buses than that lot over there." The Scottish Office Minister who is responsible for buses travelled recently on a bus. He did so only because the convener of Lothian regional council had been chasing him all over the place saying that the Bill would be disastrous for Lothian regional transport.The Secretary of State must address himself to these significant points, or we shall keep him here for quite a long time, although not for quite so long a time as he was going to send me to St. Helena. However, we shall expect the kind of answers that he did not give the travelling public this afternoon when he introduced the Bill.
§ The Secretary of State for Transport (Mr. Nicholas Ridley)I am delighted to try to assist the hon. Member for Glasgow, Maryhill (Mr. Craigen) by answering some of his questions. I may find it easier than I did on the previous money resolution when I believe I had four minutes in which to answer the points made by a number of hon. Members.
First, the hon. Gentleman asked about clause 105, which contains the tax provisions that are being effected in relation to the passenger transport executives. The clause does three things. First, it removes the exemptions which the PTEs currently enjoy whereby the income which the PTEs receive from the passenger transport authorities is excluded in computing the profits of the PTEs for corporation tax purposes. As they were two public bodies, the grants from PTAs to PTEs were not treated as income and taxable in the hands of PTEs. When they become arm's length companies and normal commercial rules apply, any income they receive—the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) will be steeped in the fact that it will only be income received through the tendering process and not through direct subsidy—will be part of income, and if they make a profit their profits will be subject to corporation tax, just like those of any other company.
Secondly, clause 105 removes the accumulated tax losses which have resulted in the past from this exemption. We had the example of south Yorkshire in the previous debate which is now receiving £69 million a year from the PTA. That is an accumulated tax loss of £69 million a year. Perhaps by now it is hundreds of millions of pounds just for one metropolitan county. There would be little merit in allowing these tax losses to pass into the period when the PTEs become companies because they could be of value to them in making money by completely extraneous purposes, as there has been a tendency to happen already.
Thirdly, it prevents the liabilities for capital gains tax and development land tax from arising on transactions 283 which are to be brought about by the provisions in the Bill and which involve no significant change in ownership. Just because a PTE becomes a company, it will not in any sense be liable for capital gains or development land tax. Those provisions make the position entirely fair both as regards the transition and as between the PTE companies and private sector companies when they are competing with one another in the open market.
Secondly, the hon. Gentleman asked me for details of the break-up of the National Bus Company. I have written to the board of the National Bus Company asking it to prepare a number of options which will have to bear in mind the need for obtaining competitiveness and at the same time the possibilities for sale and the lively proceeds of sale as well as the management of the company in the meanwhile.
§ Mrs. Gwyneth Dunwoody (Crewe and Nantwich)Will the right hon. Gentleman also bear in mind the viability and the size of the units? Will this be an element, or is he simply intent on forcing them into the private sector without regard to whether the companies concerned are viable units?
§ Mr. RidleyThe hon. Lady may have misheard me. I said that I asked the National Bus Company to work out options—three, four, five, two, one; I do not know how many—which it believes will meet the criteria which I put in my letter to the company. One of those criteria is competition; another is the return to the Exchequer; a third is the ability to manage. The hon. Lady will find it all in Hansard. If a company is to be saleable, it must be viable. Nobody will buy a company if it is not thought to be viable.
The hon. Member for Maryhill also asked about the maximisation of proceeds from the sale of the National Bus Company subsidiaries. This will be very much part of the consideration in deciding between the options. As I said on a previous occasion, I am not certain that the National Bus Company is saleable as an entity. I suspect that we will get a different type of offer by selling it in smaller units. I hope that offers will come from managers and employees working on employee buy-out schemes, as happened with the National Freight Corporation.
§ Mr. CraigenDoes that mean that when the Minister is taking a decision it will be the highest return to the Treasury rather than the greatest service to the local community that will be the deciding factor?
§ Mr. RidleyBoth the letter which I wrote to the chairman of the National Bus Company and the priorities in the clause in the Bill, which he should read carefully, set out that the prime consideration is that a competitive situation should result from the sale of the assets so that when the National Bus Company subsidiaries are sold they are neither too dominant nor too small to be able to compete with the private sector, the PTEs and the municipal undertakings. That is the prime consideration.
§ Mr. CraigenThat does not answer the question.
§ Mr. RidleyIt answers the question entirely. The main priority in the sale of the subsidiaries will be competition. It is clearly set out in the Bill.
The hon. Gentleman asked about the PTEs. He will notice that the first priority in the Bill is that the PTE bus 284 operations should be put into an arm's length state as separate companies. If a PTE is thought to be too large and dominant to make for proper competition, there is power in the Bill for me to ask it to put forward a scheme to break up the operation into smaller units. It does not follow that in all cases or in any case we will do that. It will depend on the competitive situation which will result from the making of the companies. Some PTEs may want to do that of their own volition; some may not.
§ Mr. Peter Fry (Wellingborough)I am most interested in what my right hon. Friend has said. Is he aware that there are more than 3,000 buses in Manchester? Is it not right to give an indication to the House that there will not be in Greater Manchester one organisation with that large number of vehicles if he is to insist in all other parts of the country that units of the NBC or other PTEs will be split up? Is it not right to make it clear whether 3,000 will be too many? If he accepts it in Manchester, he should accept it elsewhere.
§ Mr. RidleyWe must first see whether Manchester PTE puts forward proposals to restructure its own operation which might well fit in with the criteria. Manchester may not do that, in which case we will indeed have to do as my hon. Friend suggests. I hardly think that it is right to design a new scheme for the Manchester PTE companies on the Ways and Means resolution, as it is not entirely relevant to whether we should pay money from these various operations into the Consolidated Fund.
The hon. Gentleman asked me what would happen to fees and fines raised by the traffic commissioners. The answer is that they will be paid into the Consolidated Fund.
The hon. Gentleman quoted the words of the late Lord Butler. "Those who miss the bus will have to walk". However, the situation has changed and now those who miss the bus will take the car. There is competition, and the bus service has to be able to win back that traffic. One way in which that will be done is the way about which he asked me—by keeping fares down. There are two ways to do that: first, by subsidy, which is how it is done in south Yorkshire; secondly, by competition. When subsidies are used, money has to be taken out of other people's pockets. When competition is used, the efficiency of the operators does it. That is what will happen to fares—they will come down. I commend the motion to the House.
§ Question put:—
§ The House divided: Ayes 236, Noes 167.
287| Division No 102] | [11.46 pm |
| AYES | |
| Alexander, Richard | Best, Keith |
| Alison, Rt Hon Michael | Bonsor, Sir Nicholas |
| Amess, David | Boscawen, Hon Robert |
| Ancram, Michael | Bowden, A. (Brighton K'to'n) |
| Arnold, Tom | Bowden, Gerald (Dulwich) |
| Ashby, David | Bright, Graham |
| Aspinwall, Jack | Brinton, Tim |
| Atkins, Robert (South Ribble) | Brooke, Hon Peter |
| Atkinson, David (B'm'th E) | Brown, M. (Brigg & Crthpes) |
| Baker, Rt Hon K. (Mole Vall'y) | Bryan, Sir Paul |
| Baker, Nicholas (N Dorset) | Buck, Sir Antony |
| Baldry, Tony | Budgen, Nick |
| Beaumont-Dark, Anthony | Bulmer, Esmond |
| Beggs, Roy | Burt, Alistair |
| Bellingham, Henry | Butler, Hon Adam |
| Bendall, Vivian | Butterfill, John |
| Benyon, William | Carlisle, John (N Luton) |
| Carlisle, Kenneth (Lincoln) | Hunter, Andrew |
| Carttiss, Michael | Jackson, Robert |
| Cash, William | Jenkin, Rt Hon Patrick |
| Chalker, Mrs Lynda | Jessel, Toby |
| Chapman, Sydney | Johnson Smith, Sir Geoffrey |
| Churchill, W. S. | Jones, Gwilym (Cardiff N) |
| Clark, Dr Michael (Rochford) | Jones, Robert (W Herts) |
| Clarke, Rt Hon K. (Rushcliffe) | Kellett-Bowman, Mrs Elaine |
| Cockeram, Eric | Key, Robert |
| Colvin, Michael | King, Roger (B'ham N'field) |
| Conway, Derek | Knight, Gregory (Derby N) |
| Coombs, Simon | Knight, Mrs Jill (Edgbaston) |
| Cope, John | Knowles, Michael |
| Cranborne, Viscount | Knox, David |
| Crouch, David | Lamont, Norman |
| Currie, Mrs Edwina | Lang, Ian |
| Dickens, Geoffrey | Latham, Michael |
| Dicks, Terry | Lawler, Geoffrey |
| Dorrell, Stephen | Lawrence, Ivan |
| Douglas-Hamilton, Lord J. | Leigh, Edward (Gainsbor'gh) |
| Dover, Den | Lennox-Boyd, Hon Mark |
| du Cann, Rt Hon Sir Edward | Lilley, Peter |
| Dunn, Robert | Lloyd, Ian (Havant) |
| Durant, Tony | Luce, Richard |
| Dykes, Hugh | McCrindle, Robert |
| Eggar, Tim | McCurley, Mrs Anna |
| Emery, Sir Peter | MacGregor, John |
| Evennett, David | MacKay, John (Argyll & Bute) |
| Fairbairn, Nicholas | Maclean, David John |
| Farr, Sir John | Maginnis, Ken |
| Favell, Anthony | Major, John |
| Fenner, Mrs Peggy | Malone, Gerald |
| Forman, Nigel | Mather, Carol |
| Forsyth, Michael (Stirling) | Mayhew, Sir Patrick |
| Forth, Eric | Mellor, David |
| Fowler, Rt Hon Norman | Merchant, Piers |
| Fox, Marcus | Mitchell, David (NW Hants) |
| Franks, Cecil | Morris, M. (N'hampton, S) |
| Fraser, Peter (Angus East) | Moynihan, Hon C. |
| Freeman, Roger | Neale, Gerrard |
| Fry, Peter | Needham, Richard |
| Galley, Roy | Nelson, Anthony |
| Garel-Jones, Tristan | Newton, Tony |
| Gorst, John | Nicholls, Patrick |
| Gow, Ian | Norris, Steven |
| Gower, Sir Raymond | Onslow, Cranley |
| Grant, Sir Anthony | Ottaway, Richard |
| Greenway, Harry | Page, Sir John (Harrow W) |
| Gregory, Conal | Patten, John (Oxford) |
| Griffiths, Peter (Portsm'th N) | Peacock, Mrs Elizabeth |
| Ground, Patrick | Pollock, Alexander |
| Gummer, John Selwyn | Powley, John |
| Hamilton, Hon A. (Epsom) | Renton, Tim |
| Hamilton, Neil (Tatton) | Ridley, Rt Hon Nicholas |
| Hampson, Dr Keith | Roberts, Wyn (Conwy) |
| Hannam, John | Robinson, Mark (N'port W) |
| Hargreaves, Kenneth | Roe, Mrs Marion |
| Harris, David | Rossi, Sir Hugh |
| Harvey, Robert | Rowe, Andrew |
| Havers, Rt Hon Sir Michael | Rumbold, Mrs Angela |
| Hawkins, C. (High Peak) | Ryder, Richard |
| Hawkins, Sir Paul (SW N'folk) | Sainsbury, Hon Timothy |
| Hawksley, Warren | Sayeed, Jonathan |
| Hayes, J. | Shaw, Giles (Pudsey) |
| Hayhoe, Barney | Shaw, Sir Michael (Scarb') |
| Hayward, Robert | Shelton, William (Streatham) |
| Henderson, Barry | Shepherd, Colin (Hereford) |
| Hickmet, Richard | Shepherd, Richard (Aldridge) |
| Higgins, Rt Hon Terence L. | Shersby, Michael |
| Hill, James | Silvester, Fred |
| Hind, Kenneth | Skeet, T. H. H. |
| Hogg, Hon Douglas (Gr'th'm) | Smith, Sir Dudley (Warwick) |
| Holt, Richard | Smith, Tim (Beaconsfield) |
| Hordern, Peter | Soames, Hon Nicholas |
| Howard, Michael | Speed, Keith |
| Howarth, Alan (Stratf'd-on-A) | Spence, John |
| Howarth, Gerald (Cannock) | Spencer, Derek |
| Howell, Rt Hon D. (G'ldford) | Spicer, Michael (S Worcs) |
| Howell, Ralph (N Norfolk) | Squire, Robin |
| Hubbard-Miles, Peter | Stanbrook, Ivor |
| Steen, Anthony | Waldegrave, Hon William |
| Stem, Michael | Walker, Cecil (Belfast N) |
| Stevens, Lewis (Nuneaton) | Wall, Sir Patrick |
| Stevens, Martin (Fulham) | Waller, Gary |
| Stewart, Allan (Eastwood) | Wardle, C. (Bexhill) |
| Stewart, Andrew (Sherwood) | Warren, Kenneth |
| Stokes, John | Watson, John |
| Stradling Thomas, J. | Watts, John |
| Sumberg, David | Wells, Sir John (Maidstone) |
| Taylor, John (Solihull) | Whitfield, John |
| Taylor, Teddy (S'end E) | Whitney, Raymond |
| Temple-Morris, Peter | Wiggin, Jerry |
| Thompson, Donald (Calder V) | Wilkinson, John |
| Thompson, Patrick (N'ich N) | Wolfson, Mark |
| Thornton, Malcolm | Wood, Timothy |
| Townend, John (Bridlington) | Woodcock, Michael |
| Tracey, Richard | Yeo, Tim |
| Trippier, David | Young, Sir George (Acton) |
| Twinn, Dr Ian | Younger, Rt Hon George |
| van Straubenzee, Sir W. | |
| Vaughan, Sir Gerard | Tellers for the Ayes: |
| Viggers, Peter | Mr. Peter Lloyd and |
| Waddington, David | Mr. Michael Neubert. |
| NOES | |
| Adams, Allen (Paisley N) | Eastham, Ken |
| Alton, David | Evans, John (St. Helens N) |
| Anderson, Donald | Ewing, Harry |
| Ashdown, Paddy | Fatchett, Derek |
| Ashton, Joe | Fields, T. (L'pool Broad Gn) |
| Atkinson, N. (Tottenham) | Fisher, Mark |
| Bagier, Gordon A. T. | Flannery, Martin |
| Banks, Tony (Newham NW) | Foot, Rt Hon Michael |
| Barnett, Guy | Forrester, John |
| Barron, Kevin | Foster, Derek |
| Beckett, Mrs Margaret | Foulkes, George |
| Beith, A. J. | Fraser, J. (Norwood) |
| Bennett, A. (Dent'n & Red'sh) | Freeson, Rt Hon Reginald |
| Bidwell, Sydney | Freud, Clement |
| Blair, Anthony | Garrett, W. E. |
| Boothroyd, Miss Betty | George, Bruce |
| Boyes, Roland | Gilbert, Rt Hon Dr John |
| Bray, Dr Jeremy | Godman, Dr Norman |
| Brown, Gordon (D'f'mline E) | Golding, John |
| Brown, Hugh D. (Provan) | Hamilton, James (M'well N) |
| Brown, N. (N'c'tle-u-Tyne E) | Hamilton, W. W. (Central Fife) |
| Brown, Ron (E'burgh, Leith) | Hancock, Mr. Michael |
| Bruce, Malcolm | Hardy, Peter |
| Buchan, Norman | Harman, Ms Harriet |
| Caborn, Richard | Harrison, Rt Hon Walter |
| Callaghan, Jim (Heyw'd & M) | Haynes, Frank |
| Campbell-Savours, Dale | Heffer, Eric S, |
| Carlile, Alexander (Montg'y) | Hogg, N. (C'nauld & Kilsyth) |
| Clark, Dr David (S Shields) | Holland, Stuart (Vauxhall) |
| Clarke, Thomas | Home Robertson, John |
| Clay, Robert | Howells, Geraint |
| Clwyd, Mrs Ann | Hughes, Robert (Aberdeen N) |
| Cocks, Rt Hon M. (Bristol S.) | Hughes, Roy (Newport East) |
| Cohen, Harry | Hughes, Simon (Southward) |
| Concannon, Rt Hon J. D. | John, Brynmor |
| Conlan, Bernard | Jones, Barry (Alyn & Deeside) |
| Cook, Frank (Stockton North) | Kaufman, Rt Hon Gerald |
| Cook, Robin F. (Livingston) | Kennedy, Charles |
| Corbyn, Jeremy | Kirkwood, Archy |
| Cowans, Harry | Lamond, James |
| Cox, Thomas (Tooting) | Leadbitter, Ted |
| Craigen, J. M. | Leighton, Ronald |
| Crowther, Stan | Lewis, Ron (Carlisle) |
| Cunliffe, Lawrence | Lewis, Terence (Worsley) |
| Cunningham, Dr John | Litherland, Robert |
| Dalyell, Tarn | Lloyd, Tony (Stretford) |
| Davies, Ronald (Caerphilly) | Lofthouse, Geoffrey |
| Davis, Terry (B'ham, H'ge H'l) | Loyden, Edward |
| Deakins, Eric | McDonald, Dr Oonagh |
| Dewar, Donald | McGuire, Michael |
| Dormand, Jack | McKay, Allen (Penistone) |
| Dubs, Alfred | McKelvey, William |
| Duffy, A. E. P. | McNamara, Kevin |
| Dunwoody, Hon Mrs G. | McTaggart, Robert |
| Eadie, Alex | McWilliam, John |
| Madden, Max | Rowlands, Ted |
| Marek, Dr John | Sheerman, Barry |
| Marshall, David (Shettleston) | Shore, Rt Hon Peter |
| Maxton, John | Short, Ms Clare (Ladywood) |
| Maynard, Miss Joan | Short, Mrs R(W'hampt'n NE) |
| Meacher, Michael | Skinner, Dennis |
| Meadowcroft, Michael | Smith, C. Isl'ton S & F'bury) |
| Michie, William | Smith, Cyril (Rochdale) |
| Mikardo, Ian | Snape, Peter |
| Millan, Rt Hon Bruce | Soley, Clive |
| Miller, Dr M. S. (E Kilbride) | Spearing, Nigel |
| Morris, Rt Hon J. (Aberavon) | Steel, Rt Hon David |
| Nellist, David | Stott, Roger |
| O'Brien, William | Strang, Gavin |
| O'Neill, Martin | Straw, Jack |
| Orme, Rt Hon Stanley | Thomas, Dr R. (Carmarthen) |
| Park, George | Thompson, J. (Wansbeck) |
| Parry, Robert | Thorne, Stan (Preston) |
| Patchett, Terry | Tinn, James |
| Penhaligon, David | Warden, Gareth (Gower) |
| Pike, Peter | Wareing, Robert |
| Prescott, John | Welsh, Michael |
| Randall, Stuart | Williams, Rt Hon A. |
| Redmond, M. | Winnick, David |
| Rees, Rt Hon M. (Leeds S) | Woodall, Alec |
| Richardson, Ms Jo | Young, David (Bolton SE) |
| Roberts, Allan (Bootle) | |
| Roberts, Ernest (Hackney N) | Tellers for the Noes: |
| Robertson, George | Mr. Don Dixon and |
| Robinson, G. (Coventry NW) | Mr. Sean Hughes. |
| Rogers, Allan |
§ Question accordingly agreed to
§
Resolved,
That any Act resulting from the Transport Bill ("the Transport Act") may provide—