HC Deb 29 October 1985 vol 84 cc942-3

Lords amendment: No. 192, in page 74, line 33, leave out from beginning to end of line 21 on page 75.

Mr. Ridley

I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Speaker

With this it will be convenient to take the following amendments: No. 193, in page 75, line 22, leave out Subject to the following provisions of this section

No. 195, in page 75, leave out lines 30 to 45 and insert— (5) Where a public transport company's controlling authority are a composite authority, the duty imposed by subsection (4) above is a joint duty of both or all of the component councils of that authority.

Mr. Ridley

This is an important amendment. I am glad to see my hon. Friend the Member for Nottingham, South (Mr. Brandon-Bravo) in his place, because he pressed very hard for such a scheme.

During earlier debates in the House and in another place there was criticism of our proposal that all the capital expenditure incurred by the new public transport companies should count for capital control purposes as though it were incurred by their controlling authorities. The amendments respond to that concern. They remove the companies' own expenditure from the capital control system. There will still be control over the extent of their external finance. The Local Government, Planning and Land Act 1980 ensures that capital spending financed by the controlling authority remains subject to control, and clause 72 still provides that companies can borrow only from the controlling authority except for temporary loans and overdrafts. We are therefore placing control over the amount that the companies can raise by external grants or borrowing while allowing them full freedom to deploy their own resources. That is fully in line with the arguments put forward by Lord Shepherd in the debate in the other place, when he emphasised that capital expenditure should come from internal resources when possible, and that the companies should aim to replace their assets by the amounts that they can generate.

We believe that that is the best way to encourage the new companies to make business-like pricing and investment decisions. I hope that the House will welcome the change. We shall consult the local authority associations and the PTEs on the working of the new system as soon as possible.

Question put and agreed to.

Lords amendments Nos. 193 to 205, and amendment No. 205(a) agreed to.

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