HC Deb 13 January 1986 vol 89 cc760-1
8. Mr. Stephen Ross

asked the Secretary of State for Transport if he will make a statement on the progress of the privatisation of the National Bus Company and its subsidiaries.

Mr. Ridley

The process for the disposal of the NBC has now started. I have suggested to general managers that they and their staff should consider whether they wish to buy control of the companies for which they work. I understand that the NBC will be canvassing bids in the near future.

Mr. Ross

I read the Secretary of State's press statement on 9 December. What steps is he taking to prevent asset-stripping by possible purchasers whose prime intention may be speculative rather than to run a bus company?

Mr. Ridley

We are prepared to consider selling the companies with the property assets already removed and leased back to the companies, which would effectively avoid the problem that the hon. Gentleman mentioned.

Mr. Maxwell-Hyslop

Is my right hon. Friend aware of the danger of what is happening now where NBC subsidiaries, while still nationalised, are uncommercially underbidding the private sector for the bids that must be tendered shortly? Is he further aware that the private sector, unlike the public sector, cannot match those bids because it is not backed by public money, and it may be frozen out of routes which must be contracted for within a few weeks' time, and which will he operated later in the year only if they are contracted for? Does my right hon. Friend agree that that is not an equal or even-handed situation?

Mr. Ridley

I agree with my hon. Friend that it is vital to strive for an equal and even-handed situation. However, it is not yet time for the receipt of tenders for unremunerative routes to local authorities. No tenders have yet been called for. If any publicly owned bus company were to contract at unviable rates, the consequences would fall on the company at a later stage, when it would find that it made losses as a result. Where managers may be taking a controlling interest in their company, they would wish to avoid that.

Mr. Gregory

When my right hon. Friend denationalises the NBC, will he consider breaking it into sufficiently small units so that as many employees as possible can participate in the purchase of shares? In that way, he will move from the present monolithic system to one where employees can receive benefits from the privatisation of the company.

Mr. Ridley

Yes, Sir. The expected break-up of the NBC will result in about 60 operating subsidiaries. I am happy to tell the House that more than two-thirds of them have already said that they want to mount bids for their company. My hon. Friend's point is well made.

Mr. Stott

If that is the case, can the Secretary of State guarantee those who are at present employed in the NBC that the pension provisions they enjoy will remain the same?

Mr. Ridley

The hon. Gentleman knows full well that there is no guarantee of the present pensions. There will be no formal guarantee of the pensions in future, but there are options before the trustees of the NBC pension funds which enable them to choose whether they prefer greater security to other considerations.