HC Deb 14 December 1988 vol 143 cc968-1045

Order for Second Reading read.

7.26 pm
The Secretary of State for Scotland (Mr. Malcolm Rifkind)

I beg to move, That the Bill be now read a Second time.

The purpose of the Bill is to privatise the Scottish Bus Group, to make provision for the future of Caledonian MacBrayne and to dissolve the Scottish Transport Group. It will lead to a major change in the organisation of Scotland's public transport system and it marks an important further stage in the Government's policy of returning nationalised industries to the private sector.

The objectives of the Government's privatisation policy are, first, to increase real competition and as a result to increase efficiency and responsiveness to the consumer; secondly, to widen share ownership; thirdly, to release enterprise by removing Government controls from industry; and fourthly, to create new locally based Scottish companies which will strengthen the private sector in Scotland.

The Scottish Transport Group is a significant employer in Scotland. It employs about 10,000 people, providing bus and ferry services. The main subsidiary of the group is the Scottish Bus Group, which employs about 9,000 people. With its 3,000 buses, it is a dominant force in the Scottish bus market. Through its various geographical subsidiaries, it provides over half the local bus services in Scotland. Some of these companies had their origins in the great period of bus expansion. The bus industry was then responding to a growing demand for popular travel. Although it is still a lively and innovative industry, bus operators now face a different situation. The growth of car ownership is mirrored by a long-term decline in the number of people travelling on buses.

However, it is far from being a dying industry. When an economy is growing, the demand for travel grows as well. Public transport has to respond to this and also to new types of transport demand. For instance, increased car ownership can lead to congestion in cities and to the need for public transport to provide a better way of moving large numbers of people on limited road space. New types of vehicle, such as minibuses, can offer cheaper and more flexible ways of meeting demand which cannot be met by larger buses on major routes.

In order to let the bus market respond to the changing demands of the public transport market, it was necessary, first, to free it of the restrictions of regulation which had governed its operations for 50 years. We did that in 1986, when bus services throughout Scotland were deregulated on 26 October of that year. From that date, subject to safety requirements and avoidance of congestion, a bus operator was free to run a service wherever he saw a commercial opportunity. The system was designed to encourage the bus operator to find out what the public wanted and provide it.

There were many prophets of doom who said that deregulation would not work and that rural bus services would disappear. That has not happened. Local authorities have used their subsidy powers wisely. The network of rural services remains intact. What is more, local authorities have been able to get their subsidised bus services at significantly less cost. Far from leading to a decline in bus services generally, deregulation actually led to an increase in the number of vehicle miles operated. Critics have said that these extra miles are on existing routes. Some of them are, and the result is that the busy routes, which were once the preserve of a single operator, now have competition. This means more buses and downward pressure on fares. In some cases there have been significant fare reductions.

Deregulation has also allowed new operators to emerge. In Scotland, 40 new firms have, since deregulation, provided local services. The number of vehicle miles provided by independent operators has increased by a third. Deregulation has encouraged innovation. There are more minibuses providing new services in housing estates. There are hail-and-ride services.

Having deregulated bus services in Scotland, the next step in making the industry more responsive to its customers is privatisation. The privatisation of the Scottish Bus Group will create 11 new locally based companies where previously there was only a single, dominant, nationalised industry.

Mr. James Wallace (Orkney and Shetland)

I hear what the Secretary of State says, but would he be concerned if the result of privatisation were that the 11 separate companies were all bought up by a single company? Does he believe that that would promote competition, and will he seek powers to try to prevent that from happening?

Mr. Rifkind

I would be intensely disappointed if that were to happen, but I do not believe that it will. I shall deal later with the Government's approach to the flotation of the individual companies, which will be relevant to the hon. Gentleman's point.

We have three important aims in our privatisation of the Scottish Bus Group. I want to explain in greater detail how each will be achieved.

The first aim is viaible and sustained competition. As I announced to the House on 30 November, the Scottish Bus Group, with its 3,000 buses, will be split into 11 units. These will vary in size, depending on local competition. Seven of the units will be existing subsidiaries of the Scottish Bus Group. The number of buses will range from 122 buses to 340 buses. All broadly correspond to the boundaries of a regional council, although since deregulation there are no longer exclusive territories. Two further companies will be created by combining Western and Clydeside and by combining Central and Kelvin. That will create two companies of around 700 buses and provide balanced competition with Strathclyde Buses, which is of similar size. In addition, Scottish CityLink, the coach firm, and SGB Engineering will be separately privatised to make the total of 11 units.

We believe that the Scottish travelling public will benefit from the creation of a number of new independent companies that can sustain vigorous competition.

Mr. David Marshall (Glasgow, Shettleston)

The Transport Act 1985 led to the privatisation of the National Bus Company in England and Wales. The Government saw fit not to privatise the Scottish Bus Group at that time. What has happened since then to bring about that change of policy? What is the benefit of privatising the Scottish Bus Group now when there was apparently no benefit from doing so three years ago?

Mr. Rifkind

The hon. Gentleman will recall that we did not then rule out the privatisation of the Scottish Bus Group. Two aspects led to no measure being introduced at that time. First, we wished to give priority to deregulation. We believed that it was such an important change that it had to be allowed usefully and comprehensively to come into effect. Secondly, we thought that it would be viable to look at what happened after the National Bus Company was privatised. The privatisation has been successful and it has led us to conclude that the time is ripe to introduce these proposals.

We considered whether we should divide the Scottish Bus Group into an even larger number of units in order to create more widespread competition. We were much impressed by the enthusiasm of the work force of the Bannockburn depot to set up their own company. We took their proposals very seriously. However, we decided that a smaller number of larger companies would also ensure vigorous competition and would at the same time provide greater stability of services.

Mr. Harry Ewing (Falkirk, East)

I notice that in the Secretary of State's recent statement and in his speech this evening he has deliberately referred to the workers at the Bannockburn depot. Is he aware that they wrote to me personally and, I suspect, to a number of my hon. Friends and complained about the fact that their Member of Parliament had refused to provide them with the information that they needed on which to base their inquiries about buying the depot?

Mr. Rifkind

That is untrue.

Mr. Jimmy Hood (Clydesdale)

Not at all.

Mr. Rifkind

I am sorry; I repeat that that is quite untrue. I do not know what they have said to the hon. Member for Falkirk, East (Mr. Ewing), but the allegation that he has reported to the House is untrue. After the meeting between my hon. Friend the Member for Stirling (Mr. Forsyth) and his constituents from the Bannockburn depot, he discussed their request with me and we took measures to ensure that the information that they had requested was made available to them. I personally ensured that the Scottish Bus Group would ensure, for its part, that the information would be made available to the people concerned.

If the hon. Gentleman has received such a letter, I should be grateful if he will pass it to me so that we may consider what points have been made. I am entirely confident that, quite apart from his enthusiasm for the proposals, my hon. Friend has complied 100 per cent. with the responsibilities that he would properly have undertaken as a local Member of Parliament.

Obviously the pattern of sales depends on the bids that are made, but it is clear that bus competition will be maximised if the new companies that we are to create form a net addition to the number of bus companies that are already operating.

Our second aim is local control and responsiveness to local needs. The existing organisation of the Scottish Bus Group obviously makes provision for decisions to be devolved to local management. However, we want to increase this local responsiveness by setting up independent companies that are locally based and that are in close touch with the communities they serve.

The new companies will be free both from the central control of being part of a large group and free from Government controls over their investment. We took that into account in our decisions on the pattern of privatisation. I know, for instance, that the Borders was keen to retain its own locally based bus company, Lowland Scottish, which it has had since 1986. This local company was able to be more responsive to local needs. I was glad to be able to announce that Lowland Scottish would be privatised as an individual company. Elsewhere, the scale of the companies should allow them to be in close touch with their communities.

Our third aim is to widen share ownership and increase employee involvement in the firms in which they work. I was delighted to see the widespread interest shown by management and employees in buying their own companies which followed on my statement on 30 November. For instance, a substantial number of the work force at Strathtay Buses are already contributing to a savings scheme to buy shares in their own company. In Northern Scottish, which serves Grampian, staff have also started a savings scheme and are keen to take part in a buy-out. Highland Scottish staff have started a savings scheme. In Midland and Fife the management are keen to mount bids involving the staff. In fact, I would expect that in every bus company a management-employee buy-out proposal will be developed.

Mr. Alistair Darling (Edinburgh, Central)

May I ask the Secretary of State a question that I asked him yesterday on electricity privatisation but which he failed to answer? Even if there is a management buy-out, what will he do if the shareholders in the new company sell to a third party? That happened in England. There were management buy-outs, after which there were sales to Gibraltar and other places. How will the Secretary of State ensure that control over the Scottish bus industry remains in Scotland: or is he concerned only about the location of its head office—never mind who owns and controls the undertaking?

Mr. Rifkind

We are seeking to encourage bids not just from management but from management and employees, combined. There is a crucial difference between the two. Apart from the obvious difference, there is also the factor that if management and employees combine in a successful bid to acquire a company, the proportion of the shares that are acquired to control the company could not lead to a change of control unless the staff as well as the management wished such a change to take place. The hon. Gentleman has referred to management alone being involved in a buy-out. That is one of the reasons why, if one had to choose between the two options, I should prefer a management-employee buy-out to succeed rather than one that involved the management alone.

Mr. Robert Hughes (Aberdeen, North)

The Secretary of State says that he is keen on employees becoming involved in the ownership of companies. Will he arrange for the Bill to provide for a minimum number of employee shareholders, and will he also provide for the right of veto by employees to prevent sale to a third party?

Mr. Rifkind

If the hon. Gentleman waits for a moment, he will find that I am about to refer to the provisions in the Bill that represent Government policy on that matter. It will answer at least part of the question that he has put to me. Staff and management in virtually all the companies in Scotland have expressed their support for the possibility of a buy-out, and I am delighted to read of the support for buy-outs which is forthcoming from the trade unions. It was reported in the press that the Transport and General Workers Union will encourage its members to participate in buy-out schemes. The Unity Trust, which is financed by the trade union movement, has already helped to provide the funds for a buy-out in England. I understand from the press that there are to be discussions about its involvement in the Scottish Bus Group privatisation.

We in the Government will play our part. In my recent statement to the House, I said that I was keen that this privatisation should increase employee participation and that financial assistance would be provided to management-employee teams who are considering making a bid. Hon. Members on both sides of the House welcomed this undertaking. The financial assistance will be designed to enable management-employee teams to obtain the professional, financial and other advice necessary to enable them to put forward credible proposals for purchasing their companies. It will be available to one management-employee team per company.

The aim is to ensure that, when developing proposals, management-employee teams are not disadvantaged as compared with existing companies in the private sector who already have their own sources of professional advice and may be contemplating making bids. The assistance will be available in the form of an underwriting, by the Scottish Transport Group, of a proportion of the fees which teams will incur. In the event of a bid being successful, the assistance will require to be repaid. If, however, the bid fails, the greater part of the fees will be met.

I am pleased to announce that the level of assistance in such cases will be 75 per cent. of the costs of approved fees for the preparation of a detailed bid, in each case not exceeding £65,000—that is, maximum assistance of £48,750. In addition, the Scottish Transport Group will run seminars for managers and make a video on buy-outs which will be shown at depots. [HON. MEMBERS: "Hear, hear".] I am delighted at this enthusiastic welcome for initiatives which the Government have in mind. We have not yet decided who will feature in the videos, but I am open to constructive suggestions from Opposition Members.

I was also asked what other form of preference would be given to management-employee teams—in particular whether they would be given financial assistance towards the bid itself. I am bound to say that it would be somewhat circular for the Government to give money to a potential purchaser to buy an asset from the Government. An element of financial preference was given to management buy-outs in the National Bus Company privatisation.

I have already said that we want a rather different pattern of bids in Scotland, with much greater involvement by employees. This is already evident with the widespread reports of management-employee interest. We would clearly wish to give some preference to management-employee proposals, but I have already made it clear that we cannot give a guarantee that any one type of potential purchaser will always succeed, irrespective of the price offered.

As hon. Members will see from clause 2, price is not the only consideration which I shall take into account when deciding on which bids to accept. The main test will always be the promotion of sustained and fair competition. Subject to that, the other considerations I will have to take into account are employee participation and price. New Scottish-based companies with significant employee participation will clearly satisfy some of the competition and participation objectives, but it is essential that the price is also relevant to the value of the assets.

Hon. Members will wish to note that we have given greater emphasis to employee participation in the Bill than was the case with the National Bus Company disposals in the Transport Act 1985. In particular, clause 2 provides that emloyee participation should be taken into account —with the question of sale proceeds, and subject to the main objective of promoting competition—in framing the disposal programme. In the 1985 Act, employee participation was not taken into account when the programme was being prepared and it was taken into account only so far as practicable when it was carried out. This difference in emphasis reflects our keenness to have management-employee buy-outs, provided, of course, that a proper price is paid for public assets.

I welcome the proposal put forward by the management and employees of Grampian Regional Transport to buy their company from its owners, Grampian regional council. I particularly welcome the fact that the buy-out has the support of all policital parties on Grampian regional council. The proposal provides for substantial employee participation in the company through an employee share ownership plan. Discussions between the regional council and the Scottish Development Department are now at a very advanced stage and I expect, subject to studying information sent to me yesterday by the council, to be able to give formal approval to the proposal soon.

I very much hope that the three other public transport companies—in Edinburgh, Glasgow and Dundee—will follow the same course as Grampian and provide their employees with the same opportunity to participate in the ownership of their companies.

Mr. John McAllion (Dundee, East)

When the Secretary of State last made a statement on this matter, he said that there was evidence of support among employees of the Tayside public transport company for privatisation. I asked him to give us the evidence, but he did not provide any. Will he take this opportunity to give us the evidence which led him to claim that there is support among employees of the Tayside public transport company for privatisation and a buy-out?

Mr. Rifkind

I notice that the hon. Gentleman mentions employees and does not dispute the claim about management. It appears that there is common ground between us that the management in Dundee are keen on a buy-out.

Mr. McAllion

indicated dissent.

Mr. Rifkind

The hon. Gentleman shakes his head at that, too. All I can say is that that is the information that I was given. If the management and the employees show that they are uninterested in having the same opportunities as the management and employees in Grampian, that will be interesting. In Strathtay, which operates in a comparable part of Scotland, we have found that that is not the view of employees.

The other component of the Scottish Transport Group is Caledonian MacBrayne. It provides essential ferry services on the west coast of Scotland. It has 28 vessels of varying types and sizes, depending on the different requirements of its 26 routes and employs about 800 people. When we came to office we increased the support for Caledonian MacBrayne significantly in real terms. During the past three years, we have been able to reduce subsidy while keeping the general level of fare increases in line with inflation. The reduced subsidy reflects a reduced need for subsidy to provide the same level of service—it is not a reduction in our commitment to ferry services. It is the result of reduced oil prices, increased carryings and increased efficiency. We are anxious that this trend should continue, and that the company should further reduce subsidy while maintaining the standard of service.

Since 1979, there has been substantial investment in CalMac. We have approved £22 million in new vessels and £6 million on new piers. In 1984 the new Isle of Arran came into service, and in 1985 the new Hebridean Isles came into service. In 1987, the new Isle of Mull was launched at Port Glasgow and early next year a new vessel to serve Barra and Lochboisdale will be launched, also at Port Glasgow. Linkspans have been added to the piers at Uig, Tarbert, Lochmaddy and Colonsay. A linkspan is at present being built at Barra. These are greatly improving the time for unloading and the quality of the service.

For the most part, however, these services do not make a profit, and a subsidy of about £6 million a year is required. I have always been clear that Caledonian MacBrayne is not a straightforward case for privatisation. The first priority in any arrangements is to guarantee the lifeline services which they provide. It is for this reason that, having studied the issues carefully, I have decided that, on the dissolution of the Scottish Transport Group, the ownership of Caledonian MacBrayne should be transferred to the Secretary of State. The Bill makes provision for this.

I intend to appoint a new board for the company, which will contain persons with commercial expertise, including some with first-hand knowledge of the islands served and their needs. That is vital to ensure the responsiveness of the company to its customers. As a matter of priority, I would look to the new board to examine the possibilities of relocating the headquarters nearer the centre of the area which it serves. Oban seems likely to prove a suitable place for this purpose. I shall also ask the new board to explore the possibility of transferring to the private sector the Gourock-Dunoon and Wemyss bay-Rothesay routes. It is anomalous that Caledonian MacBrayne operates a substantial service on a route similar to one operated by an unsubsidised private operation. In the longer term, I will expect the board to examine carefully all existing practices in the company's operation with a view to providing more efficient and cost-effective ways of providing at least the present standard of service.

No options for the longer term will be excluded, subject to the overriding proviso that they must ensure at least the present quality of service to the islands. I consider that, with its own board and independence, CalMac will be well placed to continue to provide an improving and cost-effective service to the islands.

The Government attach great importance to improved communications for the remoter parts of Scotland and, in particular, for the islands. As I have mentioned we have provided substantial resources for Caledonian MacBrayne. We also believe that the smaller islands should not be neglected. In Orkney, a substantial improvement is being carried out in the internal ferry services supported by Government grant. Last week we announced that we would be paying grant on two new roll-on/roll-off vessels for the outer North Isles of Orkney. We accept that, in per head terms, the cost of providing adequate communications for small remote islands may appear large. However, we believe that, within limits, everyone should enjoy benefits of improved communications.

A good example of the problems of improving communications in remote areas is Vatersay in the Outer Hebrides. In 1985 my predecessor announced that he was prepared to pay grant on a causeway linking Vatersay with Barra. Since then, the islands council has taken forward the necessary preparatory work promoting a parliamentary order and carrying out a hydrographic survey. The main obstacle to further progress was accommodating such a project within its normal capital allocation. I am happy to announce today that I shall be making a special addition to the islands council's capital allocation for 1989–90 and for the following year to accommodate the building of the Vatersay causeway.

I understand that Vatersay has seen an alarming drop in population in recent years and also that it is the firm view of the islands council that this trend can be reversed with improved communications. I therefore look to see a return of population to Vatersay with the improved communications which this causeway will bring.

In addition to the bus group and CalMac there are also a number of minor interests of the Scottish Transport Group to be disposed of, including the SMT Insurance Company and Sanderson Travel, before the Scottish Transport Group can he dissolved. The future of those subsidiaries is being considered at present, with the help of my financial advisers, Quayle Munro. I may decide that some such disposals should take place prior to the passage of the Bill under the Scottish Transport Group's existing powers to dispose of activities not required for the on-going purposes of their business. Any disposals made in advance of legislation will, however, be limited to these minor interests and will not include any of the operating subsidiaries of the Scottish Bus Group.

I should like to turn briefly to the detailed provisions of the Bill. The first part deals with the bus group. It gives me the power to draw up, after consultation with the Scottish Transport Group, a programme for the disposal to the private sector of the Scottish Bus Group's subsidiaries and the minor subsidiaries of the Scottish Transport Group. It provides that, in preparing that programme, my main objective will be to promote sustained and fair competition. I am further required to have regard to the desirability of encouraging employee participation, a matter to which I have already referred, and to the effect of implementing the disposal programme on the net proceeds to he expected from all disposals.

The Scottish Transport Group will be required to implement the disposal programme within a time scale which will be specified in the programme and will be given the necessary power to make any necessary preparations— for example, by forming subsidiaries or transferring property rights or liabilities between them. In implementing the programme, the group will be required to have regard to my main objective of promoting sustained and fair competition, and to the other considerations relating to employee participation and disposal proceeds relevant to the drawing up of the programme. Each disposal will require my consent. The group is furthermore required, in conducting its business in the period before privatisation, to have regard to the estimated effect of its activities on the likely net proceeds of sale.

Part II of the Bill relates to the group's shipping operations and simply provides for the transfer of ownership of Caledonian MacBrayne to me on a date to be appointed, after suitable preparations have been made. It also provides that the annual accounts of CalMac should be laid before Parliament while the company is in my ownership. There is also provision for the Secretary of State to give any necessary directions and to guarantee borrowing by the company. Part III of the Bill contains a number of general provisions including powers to enable transitional arrangements to be made, should they be needed, with regard to group services and pensions, financial provisions and powers to dissolve the Scottish Transport Group once the disposal programme has been completed and the ownership of Caledonian MacBrayne transferred to the Secretary of State.

The Bill has important implications for the future of Scottish public transport. It will create new locally based Scottish bus companies designed to provide competitive bus services. That will benefit the traveller who stands to gain from the competition among a number of companies. It will give a boost to Scottish enterprise. It will provide Caledonian MacBrayne with its own independent board and the stimulus to increased cost-effectiveness and responsive to its island communities.

The reaction of the employees and management of the various companies that make up the Scottish Bus Group demonstrates that they are enthusiastic about the opportunities that are now available to them. In Grampian there is all-party support for similar proposals for the passenger transport company in that area. If the Labour party, the Democrats, the Nationalists and the Conservatives in Grampian believe it is right to give employees and management an opportunity to own the bus company in which they work, I hope, although I cannot anticipate, that the same parties in the House will not wish to deny management and employees elsewhere in Scotland similar opportunities. If they wish to deny them, it will certainly be appropriate and opportune for an explanation to be given as to the differences between their approach to Grampian and to the rest of Scotland.

The Bill offers exciting opportunities in the bus industry which will benefit the consumer as well as the employees and management. Accordingly, I commend the Bill to the House.

7.55 pm
Mr. Brian Wilson (Cunninghame, North)

I begin on a note of total harmony, by welcoming very warmly the Secretary of State's announcement about the causeway to Vatersay. That is a matter close to my heart and the heart of my hon. Friend the Member for Western Isles (Mr. Macdonald). I have not the slightest doubt that, without that announcement, the island of Vatersay would have gone the way of other Hebridean islands and within a relatively short time would have been left devoid of population. That would be particularly inappropriate as Vatersay is populated largely by people whose forebears came from the island of Mingulay, when it became depopulated due to the lack of a reasonable harbour. I welcome the announcement very warmly and advise my hon. Friends that, if they want £3 million on Wednesday, they should get an Adjournment debate on Thursday.

At that point, the harmony ends. We have heard from the Secretary of State the familiar fable about thrusting competition, undisturbed rural services, eager shareholders, and delighted consumers—a veritable Brigadoon. It is all the more remarkable that the party that the right hon. and learned Gentleman stands for measures its support at 19 per cent., even in Brigadoon. He spoke of real competition and new locally based Scottish companies, but all those delights are speculation. None of it is in the legislation. Furthermore, there is absolutely nothing in the English experience that leads us to believe that the picture that the Secretary of State has painted is likely to become reality.

We are against the privatisation of the Scottish Transport Group and of the Scottish Bus Group in particular. We consider it an unnecessary measure, and we believe that we should leave well alone. We believe that there is no demand from consumers or employees of the Scottish Bus Group for its privatisation. Now, through yet another unwelcome piece of Conservative legislation for which no mandate exists in Scotland, we are engaged in a damage limitation exercise.

Mr. Rifkind

So that we can be clear about the hon. Gentleman's position and that of his party, is he saying explicitly that, even if he could be satisfied that every company that is to be privatised would be sold to a management-employee buy-out, nevertheless he would advise his hon. Friends to vote against the Bill because of his opposition to privatisation?

Mr. Wilson

I shall come to that in good time. For the moment, it is important to note that that is not what is in the Bill. In spite of the Secretary of State's impressive sleight of hand in attempting to suggest otherwise, that is not what is on offer, so he asks me a hypothetical question.

Mr. Nicholas Bennett (Pembroke)

What is the hypothetical answer?

Mr. Wilson

The real answer will come in a short time, if the hon. Gentleman can contain his red-tied eagerness.

Scotland needs a comprehensive, integrated bus service. That service can be run only with due regard for the social interest. In this, as in so many other matters, that is the philosophy which the Government have deserted.

The Secretary of State spoke about the need to respond to changing times and the increase in private car ownership—all of it true—but the implication that, because more people own private cars, we need less social remit in the public transport service which remains, stands truth on its head. The fact that proportionately more economically disadvantaged people and people living in rural areas depend on public transport is the justification for leaving the service in public hands and having a social remit rather than a justification for the priority of private profit.

No transport debate can be complete without reference to safety considerations. There is much talk about bus competition. The Secretary of State referred repeatedly to "real competition", as though it were universally accepted that that was a condition to which to aspire. As we watch the deregulated competitive buses hurtling down the A9 or the unimproved A74 or the unextended M8, some of us question whether competition on the roads is such a wonderful idea. We sometimes have the uneasy feeling that here is yet another disaster waiting to happen.

We do not believe that the product of the exercise will be a series of worker and management-owned and controlled bus companies throughout Scotland. We would conditionally welcome that. We see the Bill as an opportunity on the cheap for the expansion of large and powerful operators whose loyalty is not to communities, levels of service or working conditions. The loyalty will be to profit. How that profit is gained will be a matter with which the Government will not concern themselves too much.

I want to take up the points that the Secretary of State made about Grampian. The right hon. and learned Gentelman trumpeted Grampian loudly, both when he announced the legislation and again tonight. We are told that Grampian is to be held up as the model of political unity on the joys of privatisation. That is rubbish and a travesty of the truth.

In June, when the Secretary of State initially intimated his intention to privatise the Scottish Bus Group, naturally the municipal bus authorities and those who run them listened to his words and started to draw some uncomfortable conclusions. Bus Business of 15 June 1988 stated: Scotland's four municipally-owned bus operators have been thrown into doubt about their future by the suggestion from Scottish Secretary Malcolm Rifkind that his announcement about the break up and privatisation of the Scottish Bus Group drew attention to their 'somewhat anomalous position'". The Secretary of State went on to say tactfully that the Scottish Bus Group decision must have "implications for them". The municipal bus authorities saw a thinly veiled threat that they were next to go down the road taken by the Scottish Bus Group. Not surprisingly, they looked again for ways to pre-empt, and engage in damage limitation. To say that the people who controlled and operated these municipal services in Grampian and elsewhere were advocates or supporters of privatisation is not true.

Mr. Rifkind

I have listened to the hon. Gentleman with considerable fascination. If he suggests that Grampian regional council has no choice and that the employees, management and the council are simply indulging in what he calls "damage limitation", can we hear whether he would advise Strathclyde, Lothian and Tayside to indulge in damage limitation and to privatise their companies for the same reason? Will the hon. Gentleman make that clear? If the hon. Gentleman would not so advise them, why are those councils somehow judged by different criteria to those applying to Grampian?

Mr. Wilson

I am surprised that the right hon. and learned Gentleman's normal facility for words has deserted him. He seemed to be under the impression that my comment that Grampian made a pre-emptive strike was synonymous with what he suggested I said, which was that it had no choice. I should have thought that those were two different concepts. On a good night, the Secretary of State would have no difficulty in distinguishing between them.

What about Strathclyde? I am not here to advise local authorities on how to react. I have no doubt that, on exactly the same basis, they will have to make exactly the same calculations as Grampian has done. The emphasis is again on damage limitation and pre-emptive strike—not,as the Secretary of State suggests, on the wishes of employees local authorities, Opposition parties and, least of all, consumers. That is the distinction.

Mr. Robert Hughes

Having had extensive discussions with employees in the Grampian bus companies, I assure my hon. Friend that he is right. The approach to privatisation is one not of enthusiasm but of resignation and desperation. The employees were terrified that their fate would lie in the hands of the Secretary of State.

Mr. Wilson

I am grateful to my hon. Friend. He is right and reinforces my point.

The next point of distinction involves the way that "privatisation"—if the Secretary of State demands the use of that word—was carried out. Bus Business of 28 September 1988 stated: A council spokesman said that the company was 'not on the open market' and that the management and staff of the bus company were the only present bidders. But it was not clear this week if Rifkind would allow the deal to go through, or if he would rule that the company should be offered for sale to all-comers.

The Secretary of State seems anxious to draw parallels. He told us that tomorrow he will approve this great privatisation exercise. Is he drawing the same parallel with the Scottish Bus Group? If, on the same terms, those involved in the employee-management buy-out seek to take over without the companies going "on the open market" but they are offered directly to them as "the only present bidders", will the right hon. and learned Gentleman maintain the parallel that he has sought to draw and accede to those demands? Apparently, the right hon. and learned Gentleman does not wish to intervene at this time.

That deals easily with the Grampian issue of which the Secretary of State made such a meal. The Grampian structure provides for two councillor directors and two worker directors. If that is the kind of arrangement that the Secretary of State wants, he should withdraw the legislation, go back to the drawing board and do exactly as Grampian has done, and we shall give close consideration to supporting that as a decent compromise in the public interest.

But that is not what the right hon. and learned Gentleman expects to see or has any interest in seeing. He does not want anything similar to what Grampian has done. In his heart, he knows that this is a cowboy's charter and an invitation to asset strippers. He knows that the majority of those who work in the Scottish bus industry will pay the price of this legislation in jobs and conditions rather than end up as proud co-owners of the industry in which they work. The folksy image of conductors controlling their destinies as well as their ticket machines is largely a myth. We need not look in a crystal ball, because we can read the book—the one that tells the story of what has happened in England.

We listened in vain to the Secretary of State, hoping for new information. He moved around the subject. He said that he was delighted to hear about widespread interest in management-employee buy-outs. He said that he was keen —the one thing that no one would accuse the right hon. and learned Gentleman of not being is keen—and enthusiastic about management-employee buy-outs. We listened in vain for new information about how these are to be encouraged, or, indeed, made possible. The Minister's fig leaf of enthusiasm for employee buy-outs has not expanded. Nothing turns that aspiration from pious hope even to a reasonable prospect of reality. Even if some management-employee buy-outs succeed, the Bill contains no safeguards against predatory takeover, probably within months, rather than years. We shall fight in Committee for those safeguards, and the Government's good will in the whole question of management-employee buy-outs will be judged by their responses.

Why have we heard so much in Scotland about these management-employee buy-outs when we know that the legislation does nothing to promote them? It is lip service to the political climate in Scotland. The reasoning is that the Government might get away with it if they say often enough that they are trying to promote management-employee buy-outs. That might then have some credibility in Scottish public opinion and make the idea seem a little less naked and foolish than it would otherwise. As usual, the Conservative party in Scotland underestimates the intelligence of the people to whom they are appealing. People can easily see through the Government's plan. They will not listen to tonight's fine words, but will look at the legislation and the reality that eventually emerges.

Unless the means of promoting management-employee buy-outs are written into the Bill, the Minister's avowal of sympathy for them will be seen as hollow and hypocritical. No one can serve two masters. If the Government are legislating in the interests of Stagecoach and its ilk, no number of honeyed words will disguise that fact.

Clause 2(2) of the Bill states: The Secretary of State shall have regard … to the desirability of promoting the acquisition by persons employed in any undertaking or part of an undertaking which is to be the subject of a disposal under the programme. Those words are meaningless unless the Government choose to make them meaningful. There will be no shortage of support in Scotland for such a course.

Mr. Bill Walker (Tayside, North)

The hon. Gentleman will be aware that Stagecoach is based in my constituency. Is he suggesting that it is not a good employer and that it has not done considerable good by the travelling public in my constituency? If he is, he does not know the people well or the benefits that have been received.

Mr. Wilson

I shall deal with Stagecoach later. However, I read in a transport magazine that, when there was discussion about whether a Hungarian company might buy out the Scottish Bus Group, a manager—the hon. Gentleman will be pleased to hear that it was a manager who made this disrespectful remark—suggested that he would rather work for Gorbachev than Souter.

I am sure that, as an upholder of law and order, the hon. Gentleman will wish to balance his remarks by giving us a list of the offences of which that epic private enterprise company has been convicted since it has been operating on the highways and byways of Scotland.

The Scottish Consumer Council told me: We have no doubt that management-employee buy-outs run by people with a commitment to the communities that they serve will be the most effective means of protecting rural and off-peak services. As the Secretary of State has rightly said, the trade unions have voiced some support for the proposal because they see it as the best and probably the only way of defending the jobs and the conditions of their members.

Mr. Hamish Morrison of the Scottish Council (Development and Industry) is quoted as saying last year: Simply to offer assistance with drawing up a bid with no guarantee that management and employees will not be outbid by competitors with deeper pockets is wishful thinking. What is needed is a solid assurance from Mr. Rifkind. We have not had that solid assurance tonight and, without it, the Secretary of State's presentation is worthless.

I wish to talk briefly about the English experience. Let us remember that, when the National Bus Company was privatised, there was a 5 per cent. discount offer to management-employee buy-outs. There is still no word of that in Scotland and it is perhaps a tribute to the Secretary of State's skill with words that he almost managed to make this sound like a bonus to the Scottish employees of the bus companies.

In England, the early sales of companies in the National Bus Company went mainly to management buy-outs with very little mention, incidentally, of employees. That was the early trend of the first 30 sales. Only a handful went to the existing private sector. Then the big guys realised that there was money in this and that these companies were being sold off at bargain basement prices. To help them on their way, the Government obligingly changed their rules under which the companies were to be sold.

A different picture then emerged. The Stagecoaches from north and south of the border started taking over the companies, so that, by October 1987, Bus Business again reported: Now it is unusual, not the norm, for managements to secure a buyout. And the true employee ownership approach, implicit if not explicit in the government's plans, has been seen in only three or four sales. The carefully controlled policy of promoting competition through privatisation has been faithfully espoused by the government in word but not in deed … The industry grapevine is groaning with endless talk of companies that are secretly allied and of mergers deals and shadowy connections between others. That is the reality of England and Wales at present. There is not the slightest reason to suppose that it will not become the reality in Scotland.

Mr. Nicholas Bennett

As the hon. Gentleman is quoting examples in England and Wales, will he explain why the president of the Bus and Coach Council, at its Eastbourne conference this year, was reported in Buses last month as saying that the industry is enjoying its new environment and its new role as an entrepreneur and was a "born-again commercial industry." He said that the industry was delighted that it was privatised and deregulated.

Mr. Wilson

I should like to help the hon. Gentleman, but, before I could do so, I should have to know who the chairman of the Bus and Coach Council is. For all I know, it might be like the hon. Gentleman quoting in innocence the chairman of a Scottish health board.

Mr. Bennett

The hon. Gentleman will want to know that the chairman is Mr. Irwin Dalton, formerly of the National Bus Company.

Mr. Wilson

I never fail to be astonished by what amuses Conservative Members.

It is already abundantly clear that the private sector will not sit back in Scotland and allow management-employee buy-outs to occur in the public interest. I am sure that the hon. Member for Tayside, North (Mr. Walker) would be appalled if that were the case.

Mrs. Anne Gloag—I do not know whether she is any relation of the Famous Grouse, but she is the managing director of Stagecoach—immediately announced: We certainly intend to consider submitting bids for all of the separate units when further details become available in the New Year. That is the point at which the proud announcement by the Secretary of State that employee buy-outs would be entitled to the vast sum of £48,750 for a sort of bus-world legal aid is put into perspective. That sum is washers in the back pocket to such outfits as Stagecoach and others that these buy-outs will be up against. If that sum, plus a video, is all that the Minister has to offer, there will be precious few management-employee buy-outs.

I do not make a great issue of the origins of the companies that are doing the buying out. That is not the problem. I have mentioned Stagecoach, which is active down south. It is a transborder operation. It is a firm of couthie Scottish capitalists of the many-a-mickle-mak's-a-muckle school of exploitation. When Scottish bus employees are asked by whom they do not wish to be taken over, they respond unanimously, "Souter." So the question—[Interruption.]

Conservative Members, whose wits are dim—"dimwits" is probably an unparliamentary expression—think it tremendously funny that I should be saying that workers in Scotland fear a Scottish capitalist as least as much as an English or outside capitalist. Anyone who knows anything about class politics as opposed to tartan trivia, and anyone who knows the history of Scottish industry and enterprise, will understand that there is nothing funny or unusual about that attitude. It does not matter primarily whether we are talking of an English company or a Scottish company. The important considerations are the motives and nature of the company, the services it provides and the conditions that it provides for its workers.

Mr. Rifkind

The hon. Gentleman has made an important statement which is at variance with the questions that were put to me by the hon. Member for Edinburgh, Central (Mr. Darling). It seems that he does not mind whether it is a Scottish company or an English company. He thinks that the consequences will be exactly the same, and he draws no distinction between the two. Will he confirm that?

Mr. Wilson

I think that the record will show that I said that I do not think that that is the first priority. The priority is the nature of the company and where the management is. With Stagecoach the money comes from Canada—

Mr. Bill Walker

Will the hon. Gentleman give way?

Mr. Wilson

No, I shall not give way further.

There is an interesting example of how Stagecoach has operated in the south by jumping on the privatisation gravy train. The hon. Member for Tayside, North greatly approves of Stagecoach. The company bought Hampshire Bus, and one cannot go much further south than that company. I am sure that the hon. Member for Moray (Mrs. Ewing) approves of that move as a piece of buccaneering Scottish capitalism. It bought the Hampshire company for £2.1 million. Two weeks later, it sold the bus station at Southampton for £4 million. Is that what the Secretary of State describes as the enterprise culture? Presumably the buying price for the Hampshire company was recommended by Government officials as being in line with Government policy.

Mr. David Marshall

Does my hon. Friend agree that it is disgraceful that the Secretary of State for Transport has refused to divulge any of the details of sales of individual bus companies in England and Wales? He said that at some future date we may get the global sum when all the sales have been completed. It is a common belief—I must confess that I am not sure whether it is a fact—that one company sold assets worth £6 million, which was much more than the sum paid for the entire company. That is an example of what is taking place all the time. Unless the practice is checked, it will take place in Scotland as well.

Mr. Wilson

Of course it will take place in Scotland. It is all part of the game. That is what it is all about. It is not about encouraging management-worker participation. Instead, it is about flogging off public assets.

The asset-stripping potential in the sale of the Scottish Bus Group is considerable, and especially in the sale of Eastern Scottish Buses, which will be watched extremely closely. That is because along with the bus group goes some valuable real estate. I have no doubt that my hon. Friend the Member for Edinburgh, Central (Mr. Darling) will wish to expand on that.

Many of my hon. Friends will refer to the concerns that exist in the areas that they represent and the implications of this petty piece of privatisation. They will tell the House that managements and employees generally prefer to maintain the status quo and are not interested in buy-outs, except as a pre-emptive strike. Our interest lies in protecting employees and consumers and maintaining standards of safety, service and efficiency. We believe that these standards are best protected by the status quo, which the Government choose to despise. We have no doubt that they will he least protected by the market force mentality of bus entrepreneurs.

There is already an example of entrepreneurship in Scottish transport. In 1985, the Government sold a company called MacBrayne Haulage to the private sector. By any standards, it was a seedy privatisation. It demanded many answers and it attracted only a few. MacBrayne Haulage was a branch of the Scottish Transport Group and it had a social remit and a special responsibility to serve the isles. It had a modern fleet of vehicles. It had a depot in Blochaira road, Glasgow, which had a substantial value. It was estimated that the company's assets were worth £1.5 million. It was a tasty morsel for one of the entrepreneurs whom the Government are so anxious to encourage. As a result, the Government privatised the company.

The privatisation took place before I became a Member of the House, but sitting on the Government Front Bench during the relevant period was Mr. John MacKay, sadly now departed to other places. Mr. John MacKay advanced much the same case as the Secretary of State adduced tonight. He talked about greater efficiency and competition and sweeping out the cobwebs of public ownership and introducing thrusting, dynamic private enterprise.

MacBrayne Haulage was put up for sale and it did not attract much interest. It is not clear to this day whether there was one offer or two. The Scottish Office said that there were two, but the second was never identified. There was certainly one offer, however, and it came from a Mr. Bill Walker of Kildonan Transport. He is another couthie entrepreneur. Alas, he is not a constituent of the hon. Member for Tayside, North. Such entrepreneurs must exist elsewhere as well.

Mr. Walker put in his bid for MacBrayne Haulage, only to find that it was refused. By a strange circumstance, Mr. Walker shared the same firm of financial advisers as the Scottish Transport Group, which had been ordered to sell off the company. Doubtless it was all completely above board. Kildonan Transport and the Scottish Transport Group went into a huddle. Lo and behold, this time round a deal was struck. The £1.5 million assets of MacBrayne Haulage were transferred to Kildonan Transport for a figure reported at the time—it has never been denied subsequently, although it might be on the high side£of £450,000.

Mr. Walker was asked whether he thought that he had secured a bargain, to which he replied, memorably: It would be a stupid man who did not think that. He added that he had been looking for a device that would enable him to stop paying tax. He had assumed that MacBrayne Haulage was a loss-making concern. Instead, when he examined the books he found that it was a profitable business with tremendous potential. As a result, he bought it for £450,000. It was calculated immediately that within two years he would be able to recover his outlay and have in excess of £1 million of assets, after taking depreciation into account. It was asked, "How could this happen?" It was private enterprise at its best. This week, slightly on the long side of two years, Mr. Walker is negotiating with a company in Bradford. I expect the sale of Kildonan Transport to be finalised within the next few days for a sum in excess of £1 million.

That is what privatisation is about. It is the ripping off of public assets by a combination of greed and incompetence. If such things were to happen in the private sector, it would be defined as corruption. If a trustees or solicitors handled a person's assets in the same way as the assets of MacBrayne Haulage were handled by the Government, there would be an outcry and an investigation. The Public Accounts Committee should set up an investigation into the circumstances under which MacBrayne Haulage was privatised.

I must refer to Caledonian MacBrayne. To some extent we must welcome what is before us. We must welcome the fact that at least in that case the petty doctrinaires have had to retreat because of political pressure and, more important, because of community pressure. When faced with the prospective loss of lifeline services or the handing over of lifeline services to a seaborne Mr. Billy Walker or Stagecoach, islands people of every political persuasion said that they did not want that under any circumstances. At that point, the Secretary of State, unusually, had to listen.

The Government went along to their tame Tory consultants and asked for a way to privatise the ferries. They asked for a solution that could be put as credibly, if that is how we can describe the Secretary of State's comments tonight, as the selling off of the buses.

My hon. Friend the Member for the Western Isles has established that the cost of the Pieda report was £20,597. Frankly, the Government might just as well have thrown that little dose of public money in the Minch. The Pieda report provided the Government with a few options, but even by their standards, the Government realised that they could not get away with the recommendations. Of course the Government had to cover up their embarrassment over the report and the climbdown on privatisation of ferries.

A continuing threat hangs over two of the services, Gourock to Dunoon and Wemyss bay to Rothesay. The arguments about that should perhaps be left to another evening because those routes will not be affected in the near future and we hope that they will not be affected at all. However, it is nonsense to continue to talk about privatising two of the more economically viable routes within the CalMac network. The only ground for privatising them is that they are reasonably economically viable. However, the inevitable corollary of privatising viable routes is that the less viable routes would require more subsidy because they would have lost the balancing factor of the Clyde services. Alternatively, the level of service would diminish.

If the Clyde services are taken out of the public sector and the integrated Caledonian MacBrayne company, the result will be a diminution of service through the rest of the network or an increase in subsidy from the public purse. Why should the Secretary of State wish to go down that road? If the Government try that, they will receive the same response that they received in the early 1980s when they tried to privatise the Gourock-Dunoon route. Hell hath no fury like Tory ladies on the Clyde when they are threatened with the prospect of standing on a pier waiting for a ferry that does not come on a wet Tuesday in February. I believe that it was the former Member, Mr. Michael Ancram, who went to Dunoon on that occasion.

Mr. Donald Dewar (Glasgow, Garscadden)

The Secretary of State was in charge.

Mr. Wilson

It was the Secretary of State. Well, whichever Minister it was, he retreated in some disarray and I do not fancy the chances of the present Under-Secretary of State for Scotland against the Tory ladies on the Clyde coast.

Arising from the proposal to privatise the routes in future is the proposition that the headquarters of CalMac should be moved away from Gourock. We should not prejudge that idea in advance of reasoned debate. My hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham) will deal with that matter. The headquarters have been built up over 20 years and 110 people are employed there. Why on earth should they be uprooted? If one is sitting in Barra or Stornoway, the headquarters of CalMac are at the end of a telephone. It does not greatly matter where the headquarters are located. If on the other hand one is sitting at the end of a phone in Arran, Rothesay or Dunoon, it is no greater convenience to have the headquarters moved to Oban. That must be considered and unless there is a very good reason for change, which I have not yet heard, matters should be well left alone.

This Bill is petty. It will not rock the firmament of society. It is an irritant and it will provoke insecurity. It improves nothing. We will try to improve it in Committee, but we weep for the fact that valuable, legislative time on Scottish affairs, which could have been used to better the living standards of the Scottish people, will be frittered away on this ideological nonsense which is unasked for and unwelcome.

8.35 pm
Sir Hector Monro (Dumfries)

If the past 40 minutes are an indication of the new furious forty-niners, for goodness, sake bring back the hon. Member for East Lothian (Mr. Home Robertson). We have heard a tirade about nothing, and if ever someone was trying to stir up the reason for a three-line Whip on a Bill that is patently required by the Scottish public, the last 40 minutes of sheer boredom show just how far from reality the hon. Member for Cunninghame, North (Mr. Wilson) has strayed. As the Opposition Front-Bench spokesman, he must bear in mind his responsibility for parliamentary privilege and not make comments about companies and individuals unless he is absolutely sure of his facts. Hon. Members have always been very careful not to breach parliamentary privilege when they are on the Front Bench.

I welcome the Bill, and I believe that the majority of the people in Scotland will also welcome it. We all know that rural and urban public transport is extremely important in Scotland. To most, of course, it means rail and bus transport. Many, as the hon. Member for Cunninghame, North admitted, have private motor cars. We welcome that and it shows the improvement in the quality of life throughout Scotland. To many, that transport means ships or ferries. It also means transport by air where that is appropriate.

The Government's actions about CalMac were right. They are also right to demand better services with more acceptable timetables than at present. We want more convenient timetables. Heaven knows, it is difficult with the island services to provide that. However, if we are to develop tourism and industry in the inner and outer islands, we must have more convenient services than at present.

Tourists may want to visit an island for a day. They may want to visit Rhum, Eigg or Canna. It is particularly difficult to visit such islands, do something and come back the same day.

Mr. Sam Galbraith (Strathkelvin and Bearsden)


Sir Hector Monro

I have been and tried. I know that it is not rubbish.

It is right that my right hon. and learned Friend the Secretary of State for Scotland should set as his target much higher standards and better services and facilities than we have at the moment—[Interruption.] I wish that the hon. Member for Strathkelvin and Bearsden (Mr. Galbraith) would stick to his own Front-Bench responsibilities, about which he seems to know very little. I note and welcome what my right hon. and learned Friend has said about the amount of investment in CalMac since 1979—£422 million. His announcement about Vatersay tonight shows his determination to help all communities of whatever size. I am sure that he will help that island and particularly the movement of stock, which has been so difficult in the past.

My right hon. and learned Friend was right to proceed in the way that he did in relation to CalMac because that is a socially necessary service and difficult to run at a profit. He must move with caution until the situation is right to take further steps forward.

The Bill does not cover air transport, although in a broad sense that is Scottish transport as well. The privatisation of air services in Scotland has been valuable, and we have a better and more competitive timetable as a result.

Rail and bus services are most important to those wanting public transport. British Rail has been subjected to a great deal of criticism. An all-party group of hon. Members and representatives of trade unions in south-west Scotland and Ayrshire had satisfactory discussions with British Rail and local authorities, and the rail service is now very much better than was anticipated a year ago. With the new sprinters and other improvements, British Rail has shown its determination to provide the British commuting public with a better service. We should not constantly slam it when it is trying to improve its service and, indeed, is meeting with some success.

The hon. Member for Cunninghame, North had only miserable criticism to offer the House. Had he listened to my right hon. Friend's statement on investment in roads during recent years, he would appreciate that it is very substantial. It includes preparations for the completion of the M74—

Mr. Deputy Speaker (Mr. Harold Walker)

Order. I know that we have a wide debate on Second Reading, but I remind the hon. Gentleman that there is nothing in the Bill about British Rail or about roads.

Sir Hector Monro

With respect, Mr. Deputy Speaker, buses cannot run without roads.

Mr. Deputy Speaker

Order. I hope that the hon. Gentleman does not intend to start a debate on middle eastern oil supplies.

Sir Hector Monro

That is 15-all.

The Bill is an important step forward in an integrated transport system. There will be greater competition and a greater variety of routes and buses, from minibuses to double deckers. The school system will have a greater choice of buses with various carrying capacities.

There has been a great increase in mileage since deregulation. Services have been improved, yet they are being provided at a lower cost. That is the best of both worlds. My right hon. Friend is right to transfer ownership of the Scottish Transport Group to a selected group of companies. He has decided how the groupings should operate. I note with interest that Dumfries and Galloway —currently run by Western—are to be linked with Clydeside. That will give us 750 buses and about 2,000 employees. It should be a thoroughly valuable operation and well worth the great interest in both areas being shown in a management-employee buy-out.

I note from the local newspapers that the area manager in Dumfries, Mr. Bill McGowan, is "happy with the proposals." Mr. George Watson, the general manager in Clydeside, said: We could be bigger than ever. The 210 employees in Dumfries have been putting aside part of their wages towards a management-employee buy-out. They, together with those employed in Clydeside, hope that the headquarters will be at Kilmarnock, which was the centre for Western for many years. The management and the employees have a positive wish to be involved in future operations and are keen to be involved in a buy-out.

I have written to Western offering to help in any way that I can. I shall pass on information from my right hon. Friend about his preparations to ensure that the employees have the necessary information on how to proceed towards a management-employee buy-out. Such local enterprise will be warmly welcomed in Scotland.

It was wrong of the hon. Member for Cunninghame, North to hint that privately operated buses might be less safe than the current Scottish Transport Group buses. He knows that the Scottish traffic commissioners and the police would be extremely concerned if any of the regulations were breached by any bus company, of whatever ownership.

Mr. Wilson

The hon. Gentleman must recognise that my remarks were about a possible threat to safety, and I stand by what I said about competitiveness on the roads. Anyone who has driven on a Scottish trunk road knows that buses shoot past each other at very high speeds. My concern has nothing to do with party politics; it is simply concern about road safety because of the way in which those buses are driven.

Sir Hector Monro

Is the hon. Gentleman implying that buses owned by the Scottish Transport Group are being driven at slower speeds than those of individual operators? He certainly gave the impression that the safety record of Stagecoach was not as good as that of other companies. I dispute that. I have no interest in or knowledge of Stagecoach, other than that it is a jolly good Scottish company that is doing very well. Indeed, it runs a company in Cumbria, and I understand that that is working satisfactorily. Opposition Members are opposing a thoroughly good Bill. The hon. Member for Banff and Buchan (Mr. Salmond) likes throwing stones in glasshouses when he is here and the other 71 Scottish Members are not. He is not here tonight to debate an important Scottish Bill. He should be careful about his comments, because they do him no good.

My right hon. Friend made it clear that the pensions of all those involved would be guaranteed. I hope that in Committee we can discuss why bus complaints are dealt with by the Scottish Consumer Council rather than the Transport Users Consultative Committee. It would be better if complaints about buses were handled by the consultative committee. The bus aspect should not be hived off. It would be better to have all the transport complaints under one umbrella which would benefit the passengers.

I give my right hon. Friend 100 per cent. for introducing the Bill. I wish it a speedy passage through Committee. I should be surprised if the Opposition did not realise their mistake in opposing the Bill on a three-line Whip. The Scottish people are looking forward to its success.

8.48 pm
Mr. John McAllion (Dundee, East)

The hon. Member for Dumfries (Sir H. Monro) showed no little irritation about a three-line Whip for this Bill. I can guess the reason for that, and it is not because of the nature of the Bill. Like me, the hon. Gentleman is an office bearer of the all-party Scotch whisky group. The Scotch Whisky Association is holding an event this evening in Half Moon street and we have been invited to partake of Scotch whisky. The hon. Gentleman and I would have liked to take advantage of that invitation, and I am sure that that is the reason for his irritation.

The Bill deserves to be debated fully and should be opposed because, ultimately, it can only damage the comprehensive nature of the public network in Scotland. I will certainly argue that the Bill should not be given a passage through the House but should be opposed.

Mr. Nicholas Bennett

Is the hon. Gentleman trying to explain that the reason why only seven Scottish Labour Members are present is that they are all at a Scotch whisky reception?

Mr. McAllion

Only two other Scottish Members received an invitation to the reception. Scottish Members will be elsewhere doing their work, as they always are if they are not in the Chamber.

This is not a major Bill in terms of size. It has only nine pages and 18 clauses, and no schedules. But it is major in terms of its impact on a neglected area of Government policy, and that is the important area of public transport. It is neglected because whereas the Department of Transport has no fewer than 1,200 people employed on its road building programmes—the hon. Member for Dumfries referred briefly to that when he boasted of the Government's extensive road programmes—only 120 people look after the Department's strategic responsibilities for public transport. That ratio of 1,200:120 of civil servants responsible for roads and private vehicle users to those responsible for public transport works out at exactly 100:1, which reflects the importance that the Government attach to public transport and explains why they can introduce a Bill which can only damage public transport in future.

Few people would argue with the notion that the Government seek to create a society which is more dependent on private road transport than any other in Europe. To be honest, the Government have already succeeded in doing precisely that. Whereas the people in Germany make almost one third more journeys on public transport than 20 years ago, in the United Kingdom the reverse is the case. We are making 20 per cent. fewer demands on public transport than 20 years ago.

I understand that one Minister even referred to the public transport industry as a sunset industry. I do not know exactly what he meant by that, but I assume that he means the same as Ministers who refer to shipbuilding, car manufacturing and heavy engineering in the same terms and that decent public transport will become a thing of the past if the Government have their way. It will decline into a skeleton service designed only for the unfortunates who cannot afford the convenience of a private motor car. It is certainly true that recent Government action has brought us perceptibly closer to that sorry scenario.

Perhaps this is not the time or place to talk about the merits of bus deregulation since 1986, but far from reversing or even halting the long-term decline in public transport, the number of bus passengers, as distinct from vehicle mileage or bus operators about which the Secretary of State boasted, has continued to fall in the first year after deregulation, as the Scottish Consumer Council has pointed out.

The immediate impact of deregulation on the Scottish Transport Group was to force the company to cut its bus fleet, to close its engineering and depot facilities and to issue redundancy notices to hundreds of staff. Those are hardly the measures that can be associated with reviving an ailing industry or improving the quality and frequency of bus services. They are the undeniable consequences of opening the bus industry to the operation of free market forces.

That is the central question that divides us on the Bill. The Government insist that the answer to reversing the long-term decline in public transport and to improving the quality and frequency of services is privatisation and letting the market rip. We in the Opposition have the certain knowledge that these measures must damage the quality and frequency of services and will ultimately threaten the survival of a national public transport network.

I should like to set out some of the arguments which have persuaded me that it is important to oppose the Bill. There is the question of improving services to customers. In my area the bus market is dominated by three major companies. I live in Dundee in Tayside region and the three major operators are Stagecoach, the Perth-based company much beloved by the hon. Member for Tayside, North (Mr. Walker), the regional council's public transport company and Strathtay, which is a local subsidiary of the Scottish Bus Group. Together they account for more than 80 per cent. of bus services in Tayside. Some 30 smaller companies operate the remaining services. It is difficult to conceive of any of those 30 minnows mounting a serious challenge to the three major companies. Only Stagecoach is in the private sector, which explains why it is the one so beloved of the hon. Gentleman.

Mr. Bill Walker

I hope that the hon. Gentleman understands that I was reacting to attacks on a company which provides a good service in his constituency and mine. I feel just as strongly about Strathtay, which is also a good company.

Mr. McAllion

The hon. Gentleman has warm remarks for Strathtay, which he expects to be privatised in the near future, but he makes no reference to Tayside public transport which used to employ him as a bus driver. That is regrettable and I hope that he is equally enthusiastic about the public service. I will happily give way now and allow him to praise Tayside public transport for its service to the people of Dundee.

Mr. Bill Walker

The hon. Gentleman will be aware that there are still people working in the Tayside transport company whom I knew as a young man. I have no hesitation in saying that they and those who run it have done a good job. No one has ever heard me criticise them.

Mr. McAllion

For once, the hon. Gentleman is talking sense.

There is no realistic prospect of the 30 small companies mounting any serious challenge to the three major companies. Since each of the major companies concentrates largely on its own particular area of domination, it is difficult to conceive of even these three seriously competing with one another directly for any of the 80 per cent. of the services which they already control. For example, most of the local registered bus routes in the city of Dundee and in the province of the regional council's transport company are not seriously competed for by either Stagecoach or Strathtay.

I cannot see the case for arguing that privatisation of Strathtay will significantly add to the competition between bus companies in Tayside or that it will lead directly to the improvement of local bus services. Strathtay already stands in a competitive relationship with Stagecoach and the public transport company. The privatisation of Strathtay will do nothing to alter that relationship. The only difference is that while Strathtay remains in the public sector it cannot be subject to any takeover by another private sector company, whereas post-privatisation it will be subject to such a takeover.

That is the only major difference arising from this privatisation measure, and it is an important one. The locally led bus company, which was much praised by the Secretary of State, will now be vulnerable to takeover bids either from Stagecoach in Perth—that would lead to a near-monopoly in Tayside and would, I hope, be unacceptable to hon. Members on both sides of the House —or from outsider companies such as the cash-rich predators from the south, about which we have heard so much. They are looking for rich pickings and quick profits in the Tayside area.

I can see no gains in improved services as a result of the Bill. The reverse is more likely. I quote from a document issued by the local management and employees of Strathtay. It says: We fear that where ownership could pass into other hands, then there would be a significant likelihood that profit maximisation would become the overriding objective, to the detriment of bus services on Tayside, and to the detriment of bus users on Tayside. Those people are correct to fear that happening in the aftermath of privatisation.

Where a commercial bus service is being run, a continuing and careful balancing act between the available resources of the company and customer demand for the service has to be performed. After the deregulation measures in 1985, no one is immune from such pressure, even the regional public transport company. As a result of these commercial pressures and the withdrawal of cross-subsidisation by the Government, one of the bus services in my constituency has had to be re-routed. That led to an outcry from the residents in the affected area, who saw a serious deterioration in their bus service as a result of the introduction of free market principles to the running of bus services.

While the bus companies are locally owned and managed by people with a real commitment to the local bus industry and its users, incidents of this kind will be kept to a minimum. What will happen if the bus company is owned from outside, and there is no real commitment to the needs of the local people? What will happen if local bus operations are viewed solely as a means of maximising profits, or as assets that are ripe for stripping when the profits no longer flow? What will happen when investment is seen not as a guarantee of securing a future for expanding bus services but as something to be kept to a minimum because it interferes with profits? What will happen when staff reductions and significant fare increases are seen not as defeats but as victories for the free flow of market commercialism? There will be a gradual decline in the frequency and quality of public bus services in areas such as Tayside.

If the Minister is sincere in saying that this should not happen, he must take the necessary steps to prevent the realisation of the one potential major development for which the Bill provides—the takeover of a locally based indigenous Scottish Bus Group by cash-rich predators from outside the area where the group is located. That such a threat exists is certain.

Bus Business has already been referred to several times. It is a management fortnightly publication for those in the bus and coach market. In an article last August, it gave detailed information of a new group with the acronym SEBIL, which stands for the South East Bus Investments Ltd. This consists of five former National Bus Company subsidiaries that have been privatised under management buy-outs and taken over by outsiders. They freely admit that they have come together to combine the resources of the member companies and to take advantage of future bus industry privatisations, including that of the Scottish Bus Group. Their clear aim is to make acquisitions as opportunities arise and if the Bill becomes enacted in this form, those opportunities will arise in areas like Tayside. If the hon. Member for Tayside, North wishes to see indigenous Scottish companies remain as they are, he should take that on board and be wary of it.

In the same edition of Bus Business, it was revealed that Mr. Robert Beattie, who happens to be the chairman of a group known as Frontsource, and who has already purchased several National Bus Company operations, is now preparing to bid for parts of the Scottish Bus Group. These examples show that southern England-based conglomerates are forming with a view to cashing in on the privatisation of the Scottish Bus Group. Many of them have already acquired, via management buy-outs, not employee buy-outs, National Bus Company subsidiaries at 50 or 60 per cent. of asset value.

It was strange to hear the Secretary of State insist that, if there were to be successful management-employee buy-outs, their bid must be commensurate with the asset value of the companies for which they were bidding. In the National Bus Company in England, the management groups, which had no employee participation, were given the assets at half their face value—give-away prices, knock-down prices—but that is not to be the case in Scotland. That speaks volumes for the different treatment handed out to the Scottish management-employee buy-outs.

These predators now have large cash reserves and borrowing powers and those pose a real threat to the continuing independence of the Scottish bus service. If the Secretary of State was serious in saying that the Bill provides a basis for creating a vigorous new Scottish companies, he has to address himself to the threat posed to those companies by the home counties-based predators.

It is not enough to promise financial assistance to management employee teams. It seems strange that, in the event of a management-employee team retaining professional advice and spending up to £75,000 on it, and in the event of its bid failing because, for example, a member of South East Bus Investments Ltd. is successful, the Secretary of State will return to the failed bidders £48,000 of their own money. That hardly compensates for losing control of their own company and being prey to whatever comes into the minds of the predators from the south who have taken it over. The Secretary of State has not in any sense provided the kind of guarantees we sought.

It is not enough for the Secretary of State to say either that he wants to give preference to bids from management-employee teams. Wanting to give them preference is very different from actually giving them preference. The Secretary of State said nothing to suggest that he will do that. He must guarantee that, if management-employee teams can put together a financial package commensurate with the value of the public assets involved, he will not sell those teams and their companies down the river and allow the companies to be sold to a higher bidder elsewhere.

The other evening, I was reminiscing with my hon. Friend the Member for Dundee, West (Mr. Ross) about the days before the Scottish Bus Group was formed, and even before the old Alexander buses were brought into public ownership. He reminded me how hard were those times for the employees, who worked long hours for low pay and were constantly under threat of dismissal for offences as trivial as leaving a top shirt button undone.

When the companies came into the public sector, there was created the strength that comes from the joining together of workers from all over Scotland employed in the newly nationalised industry, which put an end to that particular brand of management bullying. Everything improved—wages, working conditions and the way in which employees were treated by management. The hon. Member for Tayside, North acknowledged the truth of that. He worked for the Dundee corporation bus group in the public sector and was given fair treatment as well. Those improvements were secured by combining with other bus workers throughout Scotland, usually through the Transport and General Workers Union.

The Bill worries me because it will divide the workers. Employees of other individual companies may no longer be seen as allies but as a threat to one's own job because they are competing for whatever services are provided locally. What is euphemistically called the right of management to manage, really means the right of management to impose upon workers conditions that they do not want. Rather than be fought against by workers collectively, such impositions may be slowly but surely conceded by workers in individual companies in competition with one another. I hope that I am wrong, and that the unions will be able to hold the line and to resist any deterioration in wages and conditions of service. Experience suggests that whenever there is privatisation there quickly follow cuts in wages and poorer working conditions for those workers involved.

Our votes will not be sufficient to prevent the Bill receiving its Second Reading tonight or to stop privatisation. However, I hope that the Minister has listened, and that he will respond to the need to protect the local character of the newly formed private companies and the Scottish character of those companies. I hope also that the right hon. Gentleman will recognise that the companies must remain indigenous, Scottish-based companies and that the only way of achieving that is by guaranteeing genuine preference to management-employee group bids such as in Strathtay and Tayside.

My hon. Friend the Member for Cunninghame, North (Mr. Wilson) made it clear that the Bill pays lip service to that concept, in the hope that the Government will be able to clothe what it is that they are really about with a measure of credibility. However, in a free market environment, without providing genuine safeguards against predators from elsewhere, the Bill can have no credibility. It represents a sell-out of the interests of the Scottish people and of the Scottish bus industry, and it should be opposed by every right hon. and hon. Member who is against such a sell-out being enforced against their wishes.

9.8 pm

Mr. Bill Walker (Tayside, North)

I congratulate the hon. Member for Dundee, East (Mr. McAllion) on a thoughtful speech that clearly conveyed to me his genuine concern about what may happen. I accept that he is genuinely concerned, and it may surprise him to learn that in some respects, his views and mine are not very far apart. I contrast the quality of his speech with the appalling contribution by his hon. Friend the Member for Cunninghame, North (Mr. Wilson).

At this point, I must declare an interest. I have been talking to the Strathtay people. Neil Renilson, the director and general manager, happens to be a constituent of mine. I have conducted meetings with him and the employees and we have gone, fairly extensively, through their concerns. I have been interested in the genuine feeling among employees of wishing to become at least part-owners of the new company in future. That is very encouraging because I, like the hon. Member for Dundee, East believe that if there is to be competition on Tayside, we should not be served well if Strathtay were taken over by Stagecoach.

Incidentally, I have also been involved in meetings with Brian Soutar and Anne Gloag. The comments made by the hon. Member for Cunninghame, North were way off the mark and he was using parliamentary privilege from the Opposition Front Bench, unlike his hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), who is very careful about what he does on the Front Bench. He is never slow to criticise properly what he does not agree with and he is never slow in putting forward his views, but he does not use parliamentary privilege to name people in matters on which the depth of his knowledge is obviously so scarce and superficial that it can be very damaging. All that the hon. Member for Cunninghame, North had to say was a quote by a manager who did not work for Stagecoach, and that is appalling.

Stagecoach is a Scottish company and a big employer, which also employs many people in England. More importantly, it has operations based in my constituency, where the two directors live and work. I found it interesting that the hon. Gentleman brought up the old horny myth of Canadian money. If he had bothered to do any research, he would have discovered that the so-called Canadian money came in an initial loan from an uncle. There is nothing odd about that and the loan has long since been repaid.

That is an important point and I find it disturbing that the hon. Gentleman's comments suggested that Stagecoach was somehow unfit to be a good employer. Is the hon. Gentleman aware that, at this very moment, negotiations are at an advanced stage and an employee shareholding scheme for all Stagecoach employees will be announced any day? Such schemes are carried out in enlightened companies and we should encourage them, not criticise them.

I may have views on the difference between the public and private sectors. However, if the hon. Gentleman is an honest man, he must accept that some parts of the public sector are not run as well as he or I might wish. I have been very critical of some aspects of the private sector. You will realise, Mr. Speaker, that I was not slow to say what I felt because I felt strongly about it. That led to prosecutions being brought. If the hon. Gentleman feels strongly about a matter and has hard evidence, he should use that evidence, but he should not use parliamentary privilege as he did.

Mr. Wilson

If the hon. Member for Tayside, North (Mr. Walker) is to continue in this bumptious vein, giving a patronising lecture on parliamentary privilege, will he point out one comment I made that comes within the category he is trying hard to define?

Mr. Walker

When he reads Hansard, the hon. Gentleman will realise that he made such comments. I am also concerned that there are some differences in attitude on the Opposition Front Bench about their basic policy. They tell us on one hand that it is important where a company's headquarters are located, yet the hon. Member for Cunninghame, North then tells us that it does not matter where the headquarters of a particular group are because, after all, that group is at the end of a phone. They cannot have it both ways.

Mr. David Marshall

It is unlike the hon. Gentleman not to respond fully to the questions put to him, and I do not think that he responded fully to the question put to him by my hon. Friend the Member for Cunninghame, North (Mr. Wilson). Can he specify exactly what my hon. Friend said about Stagecoach that involved parliamentary privilege? I thought that my hon. Friend merely spoke the truth, and I do not think that anything in his remarks would need to be covered by parliamentary privilege.

Mr. Walker

No doubt the hon. Gentleman will read Hansard tomorrow. I shall invite the hon. Member for Cunninghame, North to repeat outside the Chamber exactly what he said today. I think that that is all I need to say. [HON. MEMBERS: "What did he say?"] Hon. Members can read Hansard tomorrow.

Mr. Hood

Is the hon. Gentleman referring to an implication by my hon. Friend that Stagecoach had been prosecuted? Is the hon. Gentleman aware that the company has been prosecuted on at least three occasions?

Mr. Walker

I did not specify that the company had been prosecuted; the hon. Member for Cunninghame, North did. He named the directors of Stagecoach and then gave his views and comments. He cited as his source and authority a manager who was not working for Stagecoach. I am merely saying that one should be very careful, and that Front Bench spokesmen have special responsibilities. I was watching the expression on the face of the hon. Member for Garscadden while the hon. Member for Cunninghame, North was speaking. But we can deal with these matters when we read Hansard tomorrow.

It is interesting that the hon. Member for Dundee, East and I should share such concerns. It would not be right for Strathtay, for instance, to be purchased by Stagecoach. That would not be good for competition in the hon. Gentleman's constituency or in mine. We should certainly be united in our views on that. If we are to have competition, we must have real competition, and he and I know that we now have competition, with the three large companies. All three companies have served Tayside well and I hope that they will continue to do so.

Too often, the Opposiion have overlooked the fact that this is a unique opportunity for employees to become shareholders in the company in which they work. There is a big difference between being an employee of a locally run, local authority-owned concern or of a nationally run concern owned by the public purse, and being an employee of a private company in which one can improve one's position by constantly improving one's shareholding. Companies operating such schemes find that they aid motivation and the smooth running of the concern.

More important, such a system gives employees a say at the annual general meeting, which someone working for a concern run by the local authority, by the Government or by a quasi-governmental body never has. There is a big difference, and that is why I welcome the statement by my right hon. and learned Friend the Secretary of State that we shall be encouraging employee-management buy-outs and placing emphasis on the employee. I hope that the employee-management buy-outs succeed everywhere, but if they do not, I hope that consideration will be given first to Scottish-based companies and secondly to companies that have an employee shareholding scheme. We shall thus increase employee participation and shareholding, which all hon. Members would want us to do.

I am sure that the people of Scotland will welcome this Bill, just as they have welcomed many other Bills on which the Opposition have voiced doctrinaire objections. More important, the employees in the industry will welcome the benefits that will accrue to them which did not exist under the previous arrangements.

9.19 pm
Mrs. Ray Michie (Argyll and Bute)

If we must have bus privatisation in Scotland, I support the management-employee buy-out option. I believe that it is the only way to ensure commitment and a standard of service. I welcome the Secretary of State's assurance that the Government will assist staff contemplating a bid to obtain professional and financial advice, provided that that is timely. It is crucial that a realistic preference be given to management-employee bidders rather than to the highest bidder. I hope for something similar to the sale of the National Freight Corporation, which was sold to the employees at a discount.

The Minister referred to consideration for preferences, and mentioned one or two. I urge him to give consideration to a company that is prepared to say that it has a "public service" or "social" commitment to, for example, a less-populated area.

The entire exercise would, I feel, become null and void unless the Secretary of State took residual powers to stop a large predator company from buying up all 11 newly privatised companies. Whether the company was Stagecoach, Icarus or any of the others, that would make nonsense of the whole enterprise. Despite what was said by the hon. Member for Cunninghame, North (Mr. Wilson), I consider it important that a Scottish company should be involved, rather than one south of the border.

Alternatively, perhaps the Secretary of State could set up a commission to which any takeover must first be referred. But unless he is able to provide real reassurance the exercise makes no sense. If the aim of privatisation is, as the Bill claims, to promote sustained and fair competition", he must take note of the experience of England and Wales, which has led not to sustained competition but to natural monopolies, with the larger operators buying out the smaller ones and often driving them out of business.

Recent press reports suggest that competition is being affected by price-fixing deals and agreements to end competition. Sir Gordon Borrie, Director-General of Fair Trading, has found 115 cases of firms that are believed to be colluding to restrict competition in the wake of deregulation. Some are said to have arranged timetables to avoid competition, and others have fixed common fares. How will the Secretary of State stop that happening in Scotland?

Can the Minister also give an assurance about bus stations? If the Government's aim to promote competition is genuine, they must ensure that bus stations are not sold to one company. If there is not a station for all to use, the reliability of services is affected. Competing operators must surely be able to use a central base.

Mr. Nicholas Bennett


Mrs. Michie

If the hon. Gentleman does not mind, I shall not give way. I have been accused before of giving way too often and then speaking for too long. [Interruption.] No, I will plough on.

There is a great fear about the future of rural services. I know that very well from my part of the country. Many people do not have cars and may find themselves isolated —as, indeed, they often do now. They are on the unprofitable routes. What does the Minister advise? If privatisation of the bus company will not improve the service to those people, what is the point? How can the Minister visualise an integrated transport system with bus meeting train, ferry or plane and through-ticketing systems covering the different forms of transport that have to be used on one journey? That will be difficult to achieve with all-round privatisation.

Will the Minister give an assurance that there is no hidden threat to rural railway lines in the north and west of Scotland? It was reported recently in the press that British Rail had produced a document that was supposed to show how routes could become more cost-effective. I am suspicious of that document. It contains a list A and a list B. List B refers to the rural routes of Ayr to Stranraer, Helensburgh to Oban, Helensburgh to Fort William, Aberdeen to Inverness and Inverness to Thurso. Is there some secret strategy to replace those lines with buses and is it all in preparation for the eventual privatisation of the railways?

Obviously, I must say something about Caledonian MacBrayne. I have said before and I say again, quite unashamedly, that I welcome any move of the headquarters to Oban. I appreciate that my Scottish Democrat councillor colleagues are concerned about unemployment if the HQ moves, but I hope that the Government would do what they could to alleviate any adverse consequences.

I welcome the causeway to Vatersay. That is excellent news for the many bachelors on the island, where there are very few women left. It was becoming a serious problem because more and more people were leaving that island.

The Secretary of State referred to Uig, a terminal in Skye. The correct pronunciation is "Ooig", not "Yuig". I hope that everyone will note that, because it sounds extremely ugly when it is mispronounced.

The hon. Member for Dumfries (Sir H. Monro) referred to the fact that Caledonian MacBrayne did not have proper timetables and that it was difficult to get to the Isle of Rhum. One reason for that is because there are no people left on the island, except employees of the Nature Conservancy Council, which now owns the island. It is of considerable regret and sadness to me that this island, which used to be populated with Gaelic speakers, can now attract only tourists who come to see our white-tailed sea eagle, which has been brought back to the area, or deer or whatever else, but not the people. The tourists are interested only in the animals and flora. No effort has been made to bring back the people who were cleared out years ago. That is cause for concern.

Caledonian MacBrayne's new board ought to be properly balanced. It should not consist solely of business men, accountants and a token islander. The majority of board members should come from as many islands as possible. They should include those with expertise in running a shipping line or a ferry service. It is essential that the board should genuinely represent the areas that it serves. It should not be peopled by characters who never set foot on a ferry unless they are going to the islands for their summer holiday.

It is wrong to limit the share of the surpluses that can be retained, with the balance having to be repaid to the Secretary of State. If the company does well, it should be allowed to reinvest the surplus, without a consequent loss of subsidy.

The Bill singularly omits to provide any assurance that islanders will be protected from having to bear the full cost of running the service, through increased fare and freight charges. I ask the Minister to think again about the road equivalent tariff—the RET. It works well in Norway, where fares are cheaper than in Scotland. The road equivalent tariff is flexible. Contrary to what the Secretary of State said in his statement a few days ago, a flexible RET system would include a distance element, whereby the longer distance ferry routes would not be penalised. The people in the north and west of Scotland want a flexible RET system.

Mr. William McKelvey (Kilmarnock and Loudoun)

I have listened carefully to the hon. Lady, and what she has said is absolutely correct. Those were the findings of the Select Committee on Scottish Affairs. The reason why these matters are totally overlooked by Conservative Members is because that Committee no longer exists.

Mrs. Michie

I thank the hon. Gentleman for pointing that out. I should also mention that it had been this Government's intention to introduce the road equivalent tariff, but they walked away from it and discarded it.

It is essential that high standards of safety should be maintained. When a boat comes to the end of its working life, it must be replaced by a new one. We do not want to be fobbed off with second-hand vessels. We have been fobbed off with old rolling stock on the railways. Time and again we were fobbed off with old rolling stock from the midlands. It is absolute rubbish; it breaks down, day in and day out. We do not want the new Caledonian MacBrayne board to introduce such a policy. As for the buses, without firm guarantees about employee buy-outs, fair competition and opposition to a large private monopoly, the competition exercise will be a complete nonsense.

9.32 pm
Mr. Nicholas Bennett (Pembroke)

I am delighted to take part in this debate on the Bill, especially as I am the joint secretary of the Conservative party's Back-Bench transport committee. I have taken an interest in the bus industry for nearly 30 years. I am a subscriber to the main magazine that is issued for the bus industry, and I am a member of a transport study group. I have taken a great interest in the deregulation and privatisation of bus services in England and Wales and in what has happened in Scotland as a result of deregulation.

I had a feeling of déjà vu as I listened to the speeches of Opposition Members, especially having read the reports of debates on previous transport Bills. It is worth referring to what Opposition Members have said about these transport Bills that were introduced by this Government. There was a debate in 1979 on what became the Transport Act 1980. In that debate, the hon. Member for Glasgow, Shettleston (Mr. Marshall) said: In five years' time nothing will remain of the existing public transport system. There will be a substantial loss of jobs in the transport industry."—[Official Report, 27 November 1979; Vol. 974, c. 1218.] I welcome back to the Chamber the hon. Member for Shettleston. He is in time to hear one of his own quotes. Five years on, far from the industry collapsing, there had been a 40 per cent. increase in patronage of express coaches, fares had fallen sharply and the number of express services had increased. That was the result of the Transport Act 1980.

When he spoke in the debate on what became the Transport Act 1985, the hon. Member for Shettleston had the good grace to admit that he had been mistaken in 1980, but he continued on the basis of a gambler trying double or quits when he said: Privatisation will be a disaster for the bus industry."—[Official Report, 12 February 1985; Vol. 73, c. 237.] We now know what has happened as a result of deregulation. The number of bus miles has increased by 13 per cent. and the number of routes has increased. There are 400 more bus operators and operating costs have been reduced. The Transport and Road Research Laboratory report on the first year said that deregulation of bus services had been an immense success.

When I tried to intervene in the speech of the hon. Member for Argyll and Bute (Mrs. Michie), I did not want to be unhelpful. I wanted to make a point about bus stations. After deregulation, when a bus company tried to bar other operators from using a bus station—I believe that it was in Southampton—the Monopolies and Mergers Commission did not allow the ban because our legislation was strong enough to oppose such monopoly. The hon. Lady can rest assured that any bus operator who wishes to use a bus station is entitled as a result of that ruling to use it.

The hon. Lady also mentioned a report in The Guardian of 8 December which said that 36 rail lines face the axe. I also read it and felt some anxiety as it mentioned the Swansea-Milford Haven line. I have tabled a question to my right hon. Friend the Secretary of State for Transport to establish the status of those plans and to see what we can do about them.

When I intervened in the speech of the hon. Member for Cunninghame, North (Mr. Wilson), I mentioned the Bus and Coach Council conference at Eastbourne this year. The theme of the conference was, "Succeeding in the New World" and the magazine Buses for November 1988 reported: it was interesting to observe how bus-industry attitudes have changed in that time. Some years ago there was much evidence of concern about the future of a deregulated and privatised industry, but now it was evident that most of the assembled delegates were enjoying the new environment and their new role of entrepreneur. This was reflected particularly in the warm reception given to the new Minister of Transport"— my hon. Friend the Member for Enfield, Southgate (Mr. Portillo). It is clear that the bus industry has welcomed what has happened as a result of deregulation. It has recognised the exciting new ventures which it has been able to operate because of commercialisation of the market.

Mr. David Marshall

I am grateful to the hon. Gentleman for giving way and flattered that he should take the trouble to read what I said—he must be the only one.

The hon. Gentleman has produced all manner of figures to back up his argument about deregulation, but figures can be used to demonstrate all manner of things. Does he ever go out into the real world and talk to passengers or would-be passengers? My experience is that people do not know when they will get a bus in many areas and where it will take them. In my opinion—it is only that—the situation now is much worse than it was before deregulation. Deregulation has not been an advantage either to the travelling public or to employees in the industry.

Mr. Bennett

The hon. Gentleman cites anecdotal evidence. We can all do that. I also am a bus user. I went recently to Glasgow to study the effects of deregulation.

Mr. Marshall

On a bus?

Mr. Bennett

I went on many buses. Many of them were bought from London Transport and are being operated with conductors. Competition is such in Glasgow that operators now ensure that they have conductors because that is what the public want. They realise that, as a result of deregulation, they now have to compete for the public market and purse.

Mr. McAllion

The hon. Gentleman is trying to make the case that deregulation has been an unmitigated success in terms of increased vehicle mileage, and so on. Does he not realise that in Scotland, in the first year after deregulation, the number of bus passengers fell? The customers were turning from the bus industry in its deregulated form. That is the one statistic to which the hon. Gentleman has not referred in trying to defend deregulation.

Mr. Bennett

The hon. Gentleman referred to bus passengers, and, as he knows, bus passenger usage has been falling for many years. However, using the Scottish example specifically, under deregulation there are far more services and far more operators and the passengers' choice has improved.

Let us consider the Scottish example. An article called, "Deregulated ramblings" by Alistair Douglas, published in December 1986, just as deregulation was being introduced, stated: I am convinced that deregulation will be beneficial to both passengers and operators in the end, but many lessons will have to be learned or relearned on the way … But deregulation provides a challenge which will stretch the ingenuity of operators and there are rewards to be won". That was a fair warning in December 1986.

What has happened in Scotland? If one goes through the pages of the bus industry's largest selling magazine Buses, and looks at the Scottish column, one sees that in May 1987 the Scottish Traffic Commissioner rejected Strathclyde Regional Council's plea to order a one-third reduction in the number of buses operating in Glasgow city centre. The Region's request had been opposed by the seven subsidiaries of the Scottish Bus Group". They did not want a reduction in the number of buses. The Scottish Bus Group, a nationalised group, wanted that competition and wanted a fair crack of the whip, against the views of the Strathclyde regional council.

Mr. David Marshall

Does the hon. Gentleman agree that Strathclyde regional council was forced to appeal to the traffic commissioner simply because Glasgow city centre had been brought to a standstill by hundreds of buses containing no passengers blocking all the through routes of the city? Some order had to be brought into the chaos that had resulted from deregulation.

Mr. Bennett

The hon. Gentleman may say that, but what did the commissioner say? The commissioner's decision was based on the view that the increase in buses operating in the city since last August had not been the cause of severe traffic congestion or additional danger to other road users. The hon. Gentleman says one thing, but the commissoner says the exact opposite.

Mr. Hood

What about the rural areas?

Mr. Bennett

I shall come to the rural areas in a moment.

In July 1987, the Scottish column in Buses magazine stated: Strathclyde Region have witnessed interesting developments in the provision of bus services, completely unconnected with the tussle between the Scottish bus Group and Strathclyde Buses Ltd, which deregulation has intensified. It refers to Oban and the introduction of minibuses by Midland Scottish, and continues: Further south, the Gourock, Greenock and Port Glasgow area is now the scene of fairly fierce rivalry between a number of operators which has developed since last year. Turning to more recent editions of Buses. issued this year, the Scottish column states: In the past few months increased competition has been experienced by Central Scottish in the Lanark sub-region of Strathclyde".

Mr. Bill Walker

My hon. Friend will be aware that my constituency covers 2,000 square miles of rural Scotland. Is he also aware that since deregulation something unique has happened? Not only has the service improved, but, more importantly, operators have been prepared to deviate from their routes to serve small hamlets that previously had never had buses.

Mr. Bennett

My hon. Friend makes an excellent point. One of the great advantages of deregulation has been the tremendous increase in the use of minibuses throughout England, Wales and Scotland to serve small communities, visiting council estates that had not had a bus service before. Not only the heavily populated areas of Scotland have experienced increased competition. Inverness has recently witnessed the full effect of deregulation.

The Orkneys are among the most depopulated and under-bussed areas in the United Kingdom. The September 1988 edition of Buses says: In Orkney, competition which developed on a tendered route in 1986 has continued for almost two years". Labour Members said in 1985 that that competition would not last long but would collapse as one company took over the others. The article continued: a new bus war has just started with three operators having now registered commercial services on one of the main routes. In Orkney—where there cannot be said to be rich pickings —there are three operators.

Mr. Hood


Mr. Bob McTaggart (Glasgow, Central)


Mr. Bennett

There is an embarrassment of riches before me. I shall take the point to be raised by the hon. Member for Clydesdale (Mr. Hood).

Mr. Hood

My problem differs from that of my hon. Friend the Member for Glasgow, Central (Mr. McTaggart). He has too many buses, whereas I have none. My constituency of Clydesdale, covers more than 1,000 square miles. There are rural areas where people are lucky if a bus comes every two or four hours. In parts of my constituency there is a better chance of seeing a Wells Fargo stagecoach than of seeing a Stagecoach bus.

Mr. Bennett

I cannot speak in detail about the hon. Gentleman's constituency. There has been an increase in the number of buses in my rural constituency. During the past few months, in Tenby and Saundersfoot—two of the smaller towns in my constituency—minibuses have been operating in new estates which previously had never seen a bus. Wherever we look, whether in Scotland or in England and Wales, deregulations has produced new ideas, new buses and minibuses.

Mr. Jimmy Dunnachie (Glasgow, Pollok)

Glasgow, Pollock had a fair bus service until deregulation. A tour which used to take half an hour to reach Paisley now takes an hour. Buses used to travel at 10-minute intervals to each part of my area. How can the hon. Gentleman defend what has happened, when people have lost their previous service and now have a lesser one?

Mr. Bennett

The hon. Gentlemansays that the buses now visit all sorts of areas. That sounds as though they visit streets that were never previously served by buses. The hon. Gentleman knows that I believe in the market. If there is a market for bus services, a commercial, privatised bus service will provide them. Companies are kept in being by attracting customers.

Mr. Dunnachie

On a point of order, Mr. Speaker. The hon. Gentleman says that the bus companies do not have to provide a service to people in the area—

Mr. Speaker

Order. That is not a point of order, although it may be a point of disagreement.

Mr. Bennett

Another interesting statistic has resulted from deregulation and privatisation in England and Wales. The number of vehicles built has increased. In recent years, there have been serious problems with the construction of new vehicles. I am glad to say that, because of privatisation, the number of minibuses built has increased. I pay tribute to the new companies which have come on to the market, especially Optare, which seems to run minibuses all over London as well. According to the latest edition of the bus industry's journal, there has been a large increase in the number of large vehicles built for use by bus services. We are seeing the regeneration of the bus industry throughout the United Kingdom and should welcome that as one way of providing new jobs and new services for the public.

The privatisation of bus companies in England and Wales over the past two or three years—

Mr. Dunnachie


Mr. Bennett

The hon. Gentleman shouts, "Disaster." Of the 46 national bus companies in England and Wales which have been privatised, 26 were sold through management buy-outs.

Let me quote the example of one of those companies, Badgerline, which is a management-employee buy-out. The managing director, Mr. Trevor Smallwood, who is this year's president of the Omnibus Society, said that the Transport Act 1985 had produced competition, efficiency and opportunity. His company has been in the forefront of providing new services and going into towns which previously had a monopoly provision from another operator.

The hon. Member for Cunninghame, North, who has sadly left us, made a speech of—[HON. MEMBERS: "Excellence".] Opposition Members say "excellence". It was excellent from the point of view of those of us who wish to be able to quote in future from the speeches of Front-Bench Opposition Members and provide reasons why people should not vote Labour. The hon. Gentleman spoke about class war. If a Conservative Member spoke about class or race war, he would rightly be hounded out of public life, but, apparently, to wage war against people of a different class is respectable and should be carried on. We shall remember those remarks and ensure that they are quoted in future. The idea that there is something morally correct about waging war on people who happen to be of a different social class is a disgrace and I am surprised that any Labour Member still trots out that 1930s Communist claptrap.

The hon. Gentleman went on to say that the Labour party was against competition. We are glad to hear that directly from a Labour Member; they are usually more circumspect. The hon. Member for Glasgow, Garscadden (Mr. Dewar) would not have said anything quite as rash as that. We are in favour of competition because the moral arguments are in favour of it. Competition and popular capitalism respond to the market. People want that market, those buses and that service.

That service and competition provide for the customer what the state has not been able to provide in the past few years. When 1992 comes, it is likely that European bus operators will have as much right to operate services in the United Kingdom as our operators will have to operate in European markets. We shall then see how well our privatised companies which serve the public are able to take on foreign competition from European operators.

I wish to quote some remarks from members of the Scottish Bus Group. It is interesting to see what Mr, Ian Irwin, chairman of the Scottish Transport Group. says. In The Scotsman of 1 December, he said: The interest already shown by the overwhelming majority of staff clearly indicates that they will he very serious contenders for the ownership of these Scottish-based private sector companies. The general manager of Lowland said: We are absolutely delighted that Mr. Rifkind has accepted our strong argument that Lowland Scottish should be allowed to stand alone. Now we must convince him that a management-employee buy-out would work. The general manager of Northern said about privatisation: I am confident that Northern can go from strength to strength. The general manager of Western and Clydeside said: We could be bigger than ever. The general manager of CityLink said: We think we have got a good company and we want it to stay in the current hands.

Even the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) said: I am confident workers' buy-out could succeed, for if each member of staff was prepared to commit hard cash to the venture, then that, coupled with the assets like depots and vehicles, would give them a good start in trying to raise the necessary capital.

I end with a quote from a letter of 7 December from the director and general manager of Strathtay to myself. He said: The majority of the workforce at Strathtay are very keen to participate in share ownership through the privatisation process. A Savings Scheme ws set up following Mr. Rifkind's announcement in May that Scottish Bus Group was to be privatised, and 60 per cent. of employees are contributing sums ranging from £2—£20 weekly into the fund, which will be used to buy shares if a management-employee buy-out bid is successful.

Mr. Dunnachie

That was to protect jobs.

The letter continues: We believe that the objectives of broadening share ownership and developing the enterprise culture will be most effectively served by privatising Scottish Bus Groups Subsidiaries to management/employee buyouts rather than sale to third parties.

Mr. McKelvey

Will the hon. Gentleman give way?

Mr. Bennett

I do not think that the hon. Gentleman can ask me to give way when I am quoting from a letter.

Mr. Dennis Canavan (Falkirk, West)

Give way.

Mr. Bennett

The hon. Member for Falkirk, West (Mr. Canavan) shouts from a sedentary position. As he has not been in his place for most of the debate, I shall not take his advice.

I shall finish quoting what Mr. Renilson wrote: I believe that the privatisation of the Scottish Bus Group presents the Government with an excellent opportunity to genuinely broaden share ownership and change the attitudes of many bus company employees towards private enterprise. It would be a great shame if this opportunity were not exploited to its maximum benefit. In short the important objective is that privatisation allows for employees to become shareholders in the firm for which they directly work. That way the realities of living in a free market world and working for private enterprise business will be realised. There can be no stronger support for the Bill than from the workers of the Scottish Bus Group, who wish to be privatised, to work for themselves and to provide a better service.

9.57 pm
Mr. Thomas Graham (Renfrew, West and Inverclyde)

I am delighted to have the opportunity to participate in the debate. Whenever a Minister visits my constituency in his ministerial capacity, I find that a week or so afterwards further job losses are announced. There were the job losses at the royal ordnance factory and now we are faced with losses at Caledonian MacBrayne. The deregulation of the bus services in my area has brought a tremendous problem for the rural community that I represent. Bishopton people have written to the Secretary of State for Scotland to ask for an improvement to be made in their bus services. The present services are lamentable. If deregulation is a sign of success, I can assure the House that the folk of Bishopton do not like the service that they are receiving.

I find it incredible that folk can welcome the statement that has been made on Caledonian MacBrayne. I represent the area in which its headquarters is located, and I do not welcome it. I recognise that the Secretary of State can introduce privatisation, but it is abysmal that it is suggested that the headquarters should be moved from Gourock to Oban. I note that the hon. Member for Argyll and Bute (Mrs. Michie) is laughing smugly. It seems that she welcomes with open arms, with glee, the proposal to move from Gourock to Oban. She is delighted to see jobs being removed from an area which has some of the highest rates of unemployment in Scotland. It is unfortunate that some hon. Members are welcoming the removal of jobs from an area which is already denuded of employment and lying at the bottom of the pole, as it were.

I can assure the House that there were no discussions with the office workers and head workers of Caledonian MacBrayne. I made an effort to speak to them, however, and I can assure the House that none of them wants to move to Oban. The managing director does not wish to make the move. He believes that the move would be bad commercially and make an unbelievable nonsense of the organisation that Caledonian MacBrayne operates. He says: Oban has no staff base. There are communication difficulties and housing shortages in the area. He thinks that 20 per cent. of the present staff would not agree to move to Oban. I know that none of the staff wants to make the move.

Mr. Wilson

Does my hon. Friend agree that the only way for that to make any sense would be if the Gourock to Dunoon and Wemyss bay to Rothesay routes were excised from the CalMac network? If that is so, does he agree that the hon. Member for Argyll and Bute (Mrs. Michie) should take the future of those routes and the interests of her constituents into account instead of simply putting her money on Oban?

Mr. Graham

I agree with my hon. Friend. The folk in Gourock and Inverclyde do not want to see CalMac split up. They want to see it in its entirety serving the islands of Arran, Rothesay and Dunoon. We do not want to see it split up. We believe that Caledonian MacBrayne is a good viable option.

It being Ten o'clock, the debate stood adjourned.


That, at this day's sitting, the Transport (Scotland) Bill may be proceeded with, though opposed, until any hour.—[Mr. Heathcoat-Amory.]

Question again proposed, That the Bill be now read a Second time.

Mr. Graham

My constituents do not welcome the Minister's involvement in the constituency. That means job loss after job loss. We also believe that the Caledonian MacBrayne work force has been loyal and has worked very hard to reduce the subsidy and ensure that it serves the islands. The work force gives its wholehearted commitment and dedication to ensuring that the islands receive a proper decent service.

I also remind the Minister that the headquarters contains one of the finest computer services in the country. That installation is one of the largest in the west of Scotland. My hon. Friend the Member for Cunninghame, North (Mr. Wilson) is correct. It is very easy to pick up the phone and contact the headquarters of Caledonian MacBrayne.

Caledonian MacBrayne and Gourock offer service which has been there since 1969. CalMac has provided 20 years' service to the people of the islands and there have been no complaints. There are more than 19,000 sq ft of offices and more than 19,000 sq ft of work shops, bakeries, engineering space, catering facilities and other stores, and roughly 75 per cent. of the work force live in my constituency.

The company uses local suppliers wherever possible for engineering, office and catering supplies and nearly all the overhaul work on the 31 ships is undertaken on the Clyde and involves local jobs. We are not talking about transferring 100 jobs from my constituency. The Government are threatening far more than 100 jobs.

Caledonian MacBrayne is an integral part of the Gourock area. The area needs the jobs and is desperate for them. We do not need bargaining and we do not need other hon. Members of Parliament jumping on to the weaknesses and backs of unfortunate workers. We are in Scotland to fight for jobs, not to see it denuded of them.

When the new board is set up, I believe that it will be the Government's puppet in the same way that the health boards have been. If the board does not have an opportunity to consider the commercial viability of removing from Gourock to Oban. The Gourock office offers much for the success of the Caledonian MacBrayne operation. If the headquarters are moved, the Government will do that to ensure that Caledonian MacBrayne does not operate successfully. If it does not operate successfully, the Government will sell it off to their friends in the private sector, who will strip the assets and do the business. We have had enough of asset stripping with the royal ordnance factories and we shall fight for the jobs. I hope that the Secretary of State will listen to common sense.

10.5 pm

Mrs. Margaret Ewing (Moray)

I do not intend to speak with as much vehemence as the hon. Member for Renfrew, West and Inverclyde (Mr. Graham), but I wish to raise several points of concern about the Bill.

The Secretary of State laid great emphasis on his belief in viable and sustainable competition and said that 11 units would be established throughout Scotland. He appeared to assume that because there would initially be 11 units providing a great deal of variety, there would be permanent competition based on those units. We fear that the establishment of 11 units will not be a safeguard.

The Scottish Bus Group has drawn attention to the English and Welsh examples and we do not hold out much hope that the units will operate in the way that the right hon. and learned Gentleman suggested. The Scottish Bus Group said: The National Bus Company was split into 70 operating units which were sold off individually. But in a short time a process of acquisition and expansion led to the emergence of five largish groups … The danger is that a similar pattern would emerge in Scotland leading to increasingly competitive bus wars between such groups which would create even stronger commercial logic for the companies not to service the remoter areas.

Our deep concern is that in both the medium and long term, predators will attempt to take over the 11 units so that rather than their providing real competition we will be deprived of any competition. The history of takeovers in Scottish industry is not happy. Many companies were taken over without reference to the Monopolies and Mergers Commission and without concern for the future of the employees. We are concerned that the competitive element should be safeguarded, but there is nothing in the Bill to ensure that that happens.

If there is over-fierce competition and one group wishes to take over another, there will be a concentration on the profitable routes—which are not those in the rural communities. The hon. Member for Renfrew, West and Inverclyde spoke about the difficulties of the people of Bishopton with bus transport since deregulation. I represent villages as remote as Tomintoul and Dufftown, and the problems in my constituency are even more severe. Just as Caledonian MacBrayne is seen as a lifeline to the islands, my constituents and those of other hon. Members representing remote areas see the public service bus as their lifeline. They do not understand why they should suffer because of the Government's ideological stance.

It is important that the elderly and the poor in our rural communities should not be cut off from the basic amenities and facilities that everyone else takes for granted on their doorsteps. They have to travel vast distances to gain access to hospitals and other services. I want to ensure that my constituents are not deprived because of over-concentration on profitable routes within the city communities.

It is all very well for hon. Members to talk about the eventual arrival of minibus services, post bus services and so on, but that is little consolation for those who face major problems and the possibility of further cuts in rail services. It may be that the leaked documents, denied by British Rail, do not show a severe cut in services, but when British Rail begins to talk about cost effectiveness we must question the future for such routes as the Aberdeen to Inverness line, which runs through my constituency. There is genuine concern about the Bill's implications for rural communities.

The Secretary of State had a great deal of fun talking about the position in Grampian. It is another example of intellectual somersaults in the Scottish Office, where one incident is somehow translated into being ideological support for the Government's activities. For example, the hon. Member for Stirling (Mr. Forsyth) this week took an opinion poll supporting parental involvement to mean support for school boards. [Interruption.]

Madam Deputy Speaker (Miss Betty Boothroyd)

Order. There are a number of conversations going on in the House which show great discourtesy to the hon. Lady.

Mrs. Ewing

Thank you, Madam Deputy Speaker, for drawing the attention of hon. Gentlemen below the Gangway who have just arrived for the debate to the irritation of the noise during this important debate on Scottish legislation.

It involves an intellectual somersault to take what happened in Grampian region as proving that there is ideological support in that region for privatisation of the bus group. A conscious decision was taken by the regional councillors to safeguard the jobs of 600 employees in the area in the face of the likelihood of yet more legislation with which Scotland disagrees being railroaded through the House by hon. Members who do not represent Scottish constituents. The genuine and responsible approach taken by Grampian regional council is done a great disservice by attempts to turn it into praise for the Scottish Office and this legislation.

We are worried about the jobs of people employed in the bus industry, our rural communities and safeguarding the proposed elements of competition. We do not believe that there are enough guarantees in the Bill. We shall certainly be interested to see what happens in Committee, but, because of our basic opposition to the privatisation of the Scottish bus service, we shall vote against the Second Reading.

10.11 pm
Mr. Jimmy Wray (Glasgow, Provan)

To look at the Bill, I would think that the great train robbers wrote it. All it does is pass power to one person—the Secretary of State for Scotland.

Clause 1 gives the Secretary of State power to go in and take over. Clause 2 gives him power to dispose of all the assets. Clause 3 allows him to direct the Scottish Transport Group what to do. Clauses 4 and 5 enable him to transfer the assets wherever he sees fit. The shipping transfer, and even the accounts, are also his responsibility. Clause 10 gives him the opportunity to guarantee Treasury borrowing.

We are not talking about any chickenfeed. We all know that the Government are sitting like vultures, raping the land and public assets. They are ready to take anything that makes a profit. We are not talking about chicken feed when in 1986 the Scottish Transport Group had a turnover of £180 million. We are talking about a profit of £4.5 million in 1986. Then the Government introduced deregulation. They do not understand the harm that it has done. If they look at the figures hard enough the evidence is clear. The Scottish Transport Group has even stated that, since deregulation in 1987, the £4.5 million profit of 1986 has been reduced to a loss of £400,000. All the pirates and operators ganged up on it and put a stranglehold on it.

The Secretary of State has been taking advice from no one. How hypocritical his statement was when he said that he was placing an emphasis on the employees. He did not go for advice to the employees. He did not consult them. Who did he go to? Did he go to the Scottish Transport Group which did not want him to break it up? No, he sought the advice of Quayle Munro the merchant bankers, who told him that the only way to make a quick buck was by dividing the group. He was talking in February of this year about splitting it into 10 units, but he has now decided to split it into 11.

In 1984, the Government brought out a White Paper on buses, and deregulation took place in 1986. All the London buses—the scrap buses—came to Glasgow and people were falling off them in Sauchiehall street. It was impossible to get parts for them. We know of the great private company Kelvin transport, which ended up in the dust bucket with debts of £3 million.

Last week, the Evening Times let us know clearly what the private operators feel about the consumers and commuters; they refused to come out over the festive season. The Evening Times had an editorial about this, but it did not tell us anything that we did not know. These people thought that they would become millionaires overnight, but when the future of the buses was being discussed, nobody gave any consideration to the poor people from areas such as mine, where there are families with 10 children who see the town only once a month. The mother takes the children on a rota basis because she can afford to take only one or two of them at a time. That is what deregulation brought to the people of Scotland and the people of Glasgow.

We know how bad the situation is. We know that, when the Scottish Transport Users Consultative Committee gave advice to the Government, they did not heed it. The council said that deregulation, and the privatisation of bus groups in Scotland or anywhere else, would not help to improve services. Hundreds of services in Strathclyde have disappeared. All sort of strange tenders came in, and the Strathclyde bus group got its fair share of them. It then had to rescue some of the private operators who could not manage the services that they had won on tender. That is the kind of rubbish results we have had from privatisation, which never brought any good to anybody except the vultures looking for profits. The Scottish Consumer Council advised the Secretaries of State for Scotland and for Transport that services were disappearing, with the result that fewer people were using the buses.

Clauses 4 and 5 set out share schemes for employees, but the Secretary of State for Scotland did not make it clear what percentage of shares employees will get. He did not appear to understand that rural transport suffered badly as a result of deregulation. Will he make any changes when he privatises CalMac? What will happen to the 10,000 employees? Where will they go? What will happen as a result of clause 147? Who will get the big pay-offs and the golden handshakes, and what will be the cost that the taxpayers will have to meet? I hope that, after tonight, the Secretary of State will have a rethink, and will bring to a standstill the privatisation of the Scottish people's public assets.

10.19 pm
Mr. Alistair Darling (Edinburgh, Central)

The Scottish Transport Group has its headquarters in my constituency and at the time of deregulation I was chairman of the Lothian region transport committee, so I think that I know something about the subject—more, I suspect, than the hon. Member for Pembroke (Mr. Bennett), who is no longer in the Chamber, having done his duty to the Conservative Whips and made his contribution. Most of his knowledge seems to be gleaned from reading a magazine. It is difficult to find out what it is like waiting for a bus at 11 o'clock at night in Scotland by reading a magazine that is written several hundred miles away.

Deregulation is where all this nonsense started, for it was the essential prerequisite of privatisation. The Government said that it was not, and the more they said that, the more obvious it became to the rest of us, and to the general public, that that was what deregulation was all about. Deregulation enabled bus companies—I use that term to describe former municipal undertakings, as well as Scottish Transport Group undertakings— to get rid of unprofitable services. There was a mechanism allowing local authorities to subsidise unprofitable routes, and I shall say more about that later.

Under deregulation, the Government deliberately allowed companies to unload unprofitable routes so that on privatisation, they would not be burdened with providing those services. The one ingredient that has been missing at times in the debate, most importantly from Conservative Members, is a definition of what exactly a bus service ought to be. Is it something that provides a social service and transport for people living in the country or is it a business and purely a means of making a profit and looking after shareholders? Therein lies the fundamental difference between the Government and ourselves.

We believe that a bus service should be just that—a service. One of the few points upon which I and the Under-Secretary, the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton), agree—or at least, he agrees about this in private—is that bus services are a service. In my maiden speech, I made the point that, when I was chairman of the transport committee, the hon. Member for Edinburgh, West was a regular caller at my door, asking whether I could do something about this or that bus service, because it had been withdrawn from his constituency. He would say to his constituents, "Isn't this awful? Isn't this terrible?" I believe that he forgot to tell them—I am sure that it was an oversight—that he voted for the very measures that brought about that state of affairs. As the hon. Member knows, deregulation proved a disaster, and had Lothian regional council not been prepared to spend substantial sums keeping unprofitable services on the road, many areas—including several that the hon. Member for Edinburgh, West represents—would have been without bus services.

The Secretary of State said that many local authorities are better off. I can tell him that Lothian regional council was spending about £2 million a year more operating the new deregulated system than it spent when it ran the bus services itself. The reason is obvious. Under the old system, the surpluses made from the profitable routes were used to keep socially necessary services on the road. Under the new regime, that is not possible and will cause a great deal of difficulty. It is nonsense and hypocritical to say that, just as local authorities are willing to subsidise, and must subsidise, the STG and the former municipal undertakings, they will now be invited to subsidise private operators—who, in some cases, are no better than cowboys—to keep services on the road. The public purse will be raided yet again to keep certain services operating, which is wholly objectionable.

When deregulation was introduced, there was a great deal of talk about competition, just as there has been tonight. There was not really much sign of competition, and I shall give the House an example. In Midlothian on one occasion, Eastern Scottish, a Scottish Transport Group subsidiary company, announced that it proposed withdrawing 12 routes. The local authority was left with no option but to put those routes out to tender, because they were all socially necessary and served villages having no other method of transportation, because car ownership was minimal and train services did not exist in most areas.

What happened when the services were put out to tender? Only one company tendered for the services, and that was Eastern Scottish, which had withdrawn the service only two weeks before. In other words, Eastern Scottish asked to be paid by the local authority to provide services that it had not been willing to provide. It had the local authority over a barrel, because no other company was willing to operate those routes. That is what will happen in the event of privatisation. Private companies because local authorities know that they cannot leave their people isolated and cut off.

Mr. Tam Dalyell (Linlithgow)

As the Member for the area concerned, may I confirm that everything that my hon. Friend the Member for Edinburgh, Central (Mr. Darling) has said is quite right.

Mr. Darling

I am grateful to my hon. Friend.

Lothian and Strathclyde regional councils have had to pay substantial sums to keep unprofitable services on the road. There is not the slightest doubt that, as local authority expenditure is pressed and as the effect of the poll tax is felt, local authorities will come under substantial pressure to cut expenditure. One item of expenditure that could he cut—although I hope that this will not happen—is the subsidising of unprofitable bus routes.

It will be interesting to see whether the hon. Member for Edinburgh, West goes to Lothian regional council and asks for his bus routes to be kept on the road at night and yet says, at the same time, that he wants the councils to reduce their poll tax. That is the double-talk that we have come to expect. I hope that the Minister will deal with that later and will tell us what he expects local authorities to do to keep services on the road within his constituency.

The bus service is a service, and is valued by the elderly, by people who want to go out at night, by people who need to see relatives in hospital and by people who do not want to drink and drive. One would have thought that the Government would want to encourage that.

Deregulation has not been the success that the Government talked about. The Secretary of State said that it was a success because millions more miles were run. The answer is perfectly obvious. At peak times, on profitable routes, there are more buses chasing each other. I do not dispute that, if one wants to go on a bus on one of the main routes, there is a greater choice and more buses. However, the evening service in the area that I and the hon. Member for Edinburgh, West represent is far worse than it was before deregulation. If the hon. Member and the Secretary of State ever went on buses, they would know that evening services are poor and not half the services that they were before deregulation.

Ownership is crucial. It is a point on which the Secretary of State has had some difficulty, as he had when we debated the privatisation of electricity yesterday. I want to refer to management buy-outs, because the Secretary of State paid lip service to them and said that he hoped that there would be management buy-outs and, better still, that there would be management and employee buy-outs. However, the history of management buy-outs is not especially successful.

In the English bus companies, managements bought out services and were quick to realise the assets. In one case, the management was quick to sell out to a Gibraltarian company. Once ownership and control pass outside the jurisdiction of Parliament, there is little chance for us to influence the way in which companies operate and conduct business. That is why we object to ownership passing abroad. That was the issue with Scottish and Newcastle Breweries and Scottish electricity.

I do not object to employees having a great say and substantial control of the industry in which they work. That is a thoroughly good thing. However, the Secretary of State did not promise to give employees a major stake or guarantee that they should have, for example, 51 per cent. of the industry in which they work. If he had said that, our attitude might be different. Of course, he will not say that, because he is in the business of looking after people who want to invest in the bus companies to make a return for themselves and other shareholders.

Incidentally, it is no wonder that we hear so much from people who are likely to be in the driving seat—managing directors, and those who represent Scottish Bus Group —and who say that they have no objection to privatisation. Of course they do not; some of them see a good opportunity to make a fast buck. Eastern Scottish, for instance, happens to own a rather large piece of real estate in central Edinburgh, which could easily be sold off and the assets then switched to shareholders in Scotland, England or abroad.

The same thing as happened in England will happen again. Assets were stripped. Many of those who want into the industry will come in not because they want to operate buses but because they want to get their hands on the assets the companies will own. That is the real attraction for many of these investors. They have no interest in whether the No. 23 bus runs after 10 pm, but they have a great interest in what they will own and what they will be able to do with a large site in the centre of Edinburgh. The position is the same in other parts of the country.

Another important point about ownership and the location of offices is their responsiveness. I do not think for a minute that someone in London who had bought Eastern Scottish would care if there was much public outcry about the sale of valuable land, or about services not running. If the Secretary of State is determined to press ahead with privatisation, as I am sure he is, why does he not do something that would be revolutionary and extraordinary, and give the employees at least 51 per cent. of the company? He will not, because he does not believe in employees' rights, any more than anyone else in the Government.

The Government are opening the nation's tills and allowing their supporters and allies to run away with the nation's assets. It is no coincidence that companies such as Stagecoach are warm backers of the Government and friendly towards the Government's policies. Of course, they want a slice of the action; they are looking after their own pockets, not the bus services. There will be cowboys and people who are unfit to run a bus service. Some will drive their coaches down roads and motorways at 90 mph. There will be companies such as Stagecoach, which has been prosecuted for breaches of the road traffic regulations. That is the story of privatisation, because these companies' greatest priority is to make a return on their capital. The last time I looked at Stagecoach's timetable, I saw that the company runs a bus service from Edinburgh to Perth, calling at Dunfermline, within an hour. How is that possible within the speed limit?

The Secretary of State was also at pains to say that he wanted to return the bus service to the private sector. It is worth looking at why it was taken into the public sector in the first place. If the right hon. and learned Gentleman examines the minutes of the body that was the predecessor of the corporation of his home town of Edinburgh, he will see that, at the beginning of the century, Edinburgh's private bus operators were taken into municipal ownership because they were failing to provide a service. I suspect that that was done by people who were more in turn politically with the Secretary of State than with me.

If privatisation goes ahead, any hope of an integrated public transport policy will go out of the window. One of Edinburgh's difficulties is the city centre congestion caused by the large number of cars seeking to enter the centre. [Interruption.] The Secretary of State and his junior Minister, the hon. Member for Stirling (Mr. Forsyth), shout, "The western relief road." That would have done nothing but add to the congestion. It should be obvious to most people that if we had a public transport system that carried a large number of people quickly and cheaply in and out of the city centre, the problems of car parking and congestion would not exist.

Other European cities recognise that fact. Amsterdam recognises that its centre should be protected and has a cheap and efficient tram and bus service that allows the speedy transit of many people into and out of the city. London is a superb example of public transport breaking down and of people leaving home at 4 am to get to work in their cars. It is happening in Edinburgh, Glasgow and throughout the country—public services are falling apart at the seams because of the lack of public investment and the Government's doctrinaire attitude to public transport. For all those who rely on public bus services, privatisation presents the greatest threat that they have ever known.

The details of the Bill raise issues of principle. Part I deals with the disposal of the Scottish Bus Group. Its five clauses basically come to this: the whole lot is to be transferred to the Secretary of State and he will decide what to do about it. In other words, after the Bill leaves this place, no opportunity will arise for Members of Parliament to discuss on what terms the bus companies are to be sold off, or when. I suspect that—just as in the sale of MacBrayne Haulage to Kildonan—many of the companies will be sold at knockdown prices because the Government will be anxious to sell them off quickly.

After the Bill becomes law, I am sure that we shall see a procession of people coming down from the golf clubs and Conservative clubs, knocking on the door of St. Andrew's house and saying, "How about a slice of the action? We backed you; now you back us by handing over these bus companies nice and cheap." The Bill gives no protection to the public purse or to the travelling public. Instead, we see the vacuous statement that the Secretary of State must consider "sustained and fair competition."

I will tell the Secretary of State what happens in competition. When deregulation was being discussed, we were told that the Scottish Transport Group would not allow its subsidiaries to act as a monopoly. I know—and everyone who understands what was going on also knows —that that is precisely what happened. Lowland Scottish and Eastern Scottish never competed against each other in the tendering; the whole thing was run centrally. The more I was confronted with denials by individual directors, the more obvious it became what was happening.

When the companies are sold, they will slowly but surely amalgamate. Ultimately we shall have a monopoly —or perhaps, as in the case of the electricity industry, a duopoly—with the Scottish travelling public held to ransom in a stranglehold by the private sector, with any unprofitable but socially necessary routes subsidised from the public purse.

Part II of the Bill deals with Caledonian MacBrayne. Although my constituency cannot exactly be described as maritime, as someone who from the age of nought has been travelling on MacBrayne's boats—especially to the outer Hebrides—I know something about them. It is interesting to note that the reason the Government are not privatising all routes other than the Clyde routes is that no private sector operator would touch them, because a profit cannot be made from them.

The Secretary of State talks about investment in new piers, ferries and roll-on/roll-off facilities. No private sector investor would touch that. In many cases, the number of passengers and vehicles carried in the winter months would not provide a commercial return. It would indeed by monstrous if, after public money had been spent on building new vessels for Caledonian MacBrayne, they were handed over at a knockdown price to some private operator.

Incidentally, as I use the vessel comparatively regularly, let me support my hon. Friend the Member for Western Isles (Mr. Macdonald) in his campaign for a new vessel to cross from Ullapool to Stornoway. The present one is little better than a cattle ship. If we are to build causeways from Vatersay—which I thoroughly support—the replacement of the Suilven must be a priority. I hope that the Secretary of State will deal with that, and not then hand it over to some private operator.

The Clyde crossing is also an important issue. It illustrates exactly where public service and private enterprise mix—or do not mix, as the case may be. Let me take the Secretary of State back to what happened when privatisation of the Gourock-Dunoon route was considered. An inquiry was set up because the then Secretary of State was under considerable pressure to help those who operated Western Ferries. It is nonsense to have made Caledonian MacBrayne cut its crossings from Gourock and Dunoon from two to one an hour, with the result that one expensive ferry is tied up for substantial parts of the day to make it more profitable for the private operator.

That private operator is operating three or four ancient vessels, purchased from a company that used to cross to the Isle of Wight. Caledonian MacBrayne was made to restrict its services simply to give the private sector operator a chance. That is not fair competition. It was rigged from the start to help the private operator. There was a negative public subsidy to keep a public asset tied up at a pier rather than providing the necessary service. As my hon. Friend the Member for Cunninghame, North (Mr. Wilson) said, it would be nonsense to take away that part of Caledonian MacBrayne because the result would be to step up subsidies for the outer-isle services. No doubt the Secretary of State would then say that it costs more because it is in the public sector.

The Bill is obnoxious and is flawed simply because it does not recognise the fact that transport is a public service. Many people rely on buses and ferries as part of their way of life and without them they will be marooned and substantially worse off. It is nonsense to suggest that the Bill will improve matters, except for one or two money-grubbing cowboys who will seek to profit out of it. Those are the people the Government seek to protect. The Secretary of State knows that, as does the Under-Secretary. We will oppose the Bill because it undermines a public service which most people in Scotland want to see remain intact. It is one of the reasons why the Conservative party is currently placed so low in the polls.

10.41 Pm

Mr. David Marshall (Glasgow, Shettleston)

The Secretary of State and his fellow Tories have made much of employee-management buy-outs in the Scottish Bus Group and in the public transport sector in our cities. The Secretary of State also referred to the Transport and General Workers Union's support for such buy-outs. I declare an interest as a TGWU-sponsored Member of Parliament and I can tell the Secretary of State that the union and its members—the bus workers in the Scottish bus industry—did not decide to opt for such a buy-out by choice. Given freedom of choice, their decision would have been to remain as they are now. However, the Government do not believe in freedom of choice, except for the rich. Therefore, the bus workers have opted for what they see as the next best option. They have opted that way largely out of fear for what will happen to them as a result of the Bill. They are afraid of what will happen to their wages and conditions of work and to their jobs. If they fall into the hands of some of the asset-stripping predators waiting in the wings, who knows what will happen to them? They have every right to be afraid.

I shall look at the much-mentioned and much-maligned Stagecoach company. In Scotland, Stagecoach is a non-union company—if I am wrong I am happy to be corrected and I will apologise—but in England it allows trade union membership. However, it pays lower wages and offers poorer conditions than those in the Scottish Bus Group, but the fares are basically the same. Therefore, Stagecoach is not passing on the benefit of its saving in operational costs to the fare-paying passenger by offering lower fares and better services. It is more concerned with making higher profits and exploiting its employees.

I seek positive clarification from the Minister on several issues which are important to employees in the industry. Is the Minister prepared to include within the articles of sale of the companies the proviso that the successful purchaser must continue with membership of the present pension scheme, which is known as TOPS—the transport operators pension scheme? Will there be any difference in the treatment of pension rights for existing and new employees, or will there simply be no legal requirement to provide a pension scheme? Will workers who have left the industry after years of loyal service—many of them on health grounds—and who have earned entitlement to a pension, have that pension safeguarded? Those are important points. I am sure that the Minister will deal with that when he replies to the debate.

On the question of financial assistance to employee-management buy-outs, the Secretary of State boasts that up to 75 per cent. of professional fees, subject to a maximum payment of £48,750, can be provided. If, however, the bid is successful, that assistance has to be repaid. The Secretary of State gives it with one hand and claws it back with the other. The only beneficiary of that type of assistance will be the ever-increasing number of consultancies that are springing up all over the place. In the main, consultants are the friends of this Government.

My hon. Friend the Member for Cunninghame, North (Mr. Wilson) referred to the 5 per cent. discount on the highest bid that was made available for employee-management buy-outs when the National Bus Company was sold. The Secretary of State has not said whether that discount will apply to Scotland. Even if it will, it is totally insufficient to deter a determined asset stripper who is willing to bid over the odds and more than recoup the extra cost by selling off the assets, which are often on prime sites in our towns and cities.

Bearing in mind the fact that, of the 72 national bus companies, only two were the subject of successful management-employee buy-outs at the time of the original sale, if the Secretary of State will not agree to the suggestion of my hon. Friend the Member for Edinburgh, Central (Mr. Darling) to give 51 per cent. of the shares to the employees of the Scottish Bus Group, I appeal to him —if he genuinely supports employee-management buy-outs—to consider that one of the best ways to achieve it is to offer to them at least a 10 per cent. discount on the highest bid.

Furthermore, how many companies will any bidder be allowed to buy? When the 72 NBC companies were sold, no bidder was allowed to buy more than a maximum of three companies. Only 11 companies are to be sold in Scotland; only one company should therefore be sold to any one bidder. What safeguards does the Secretary of State intend to provide to prevent the regrouping of the Scottish Bus Group under single ownership after privatisation? What will happen if some of the companies fail to find a bidder, especially those companies that operate in rural, remotely populated areas? Will they be kept in public ownership, or will they be given away—perhaps by means of a "buy one, or buy two, and get one free" offer?

Another aspect of the Bill that concerns me greatly is its effect on the bus and coach building industry in Scotland. Traditionally, Walter Alexander and Company of Falkirk has been the main supplier to the Scottish Bus Group and other Scottish bus companies, but already, as a result of deregulation, it is suffering declining orders. Imported buses and minibuses are coming on to the streets in even greater numbers. A privatised Scottish Bus Group will no doubt go down the same road. It will buy even more foreign vehicles. No longer will there be the traditional loyalty and connection between the Scottish Bus Group and Walter Alexander. The Bill will result in the loss of many jobs in the industry.

The Scottish Bus Group was not privatised at the same time as the National Bus Company, because the Government thought then that the result of deregulation would be that the Scottish Bus Group would swallow up most of the other independent and public operators in Scotland and thereby become a much more attractive and saleable commodity at a substantially increased price. However, that did not happen. The Scottish Bus Group lost several million pounds in the Greater Glasgow area as a result of getting it wrong, following deregulation.

The hon. Member for Pembroke (Mr. Bennett) referred to Glasgow. I am glad that he has returned to the Chamber after a considerable absence. We know what happened in Glasgow after deregulation. Hundreds of buses crowded into the city centre, chasing even fewer passengers. They brought the city centre to a standstill. The newspapers were full of pictures. National television showed what was happening. The only person who was unaware of it was the hon. Member for Pembroke.

Mr. Nicholas Bennett

The hon. Gentleman says that I was the only person who was unaware of it, but when he intervened during my speech I told him that the traffic commissioner turned down that complaint.

Mr. Marshall

Yes. When I intervened I also put the record straight as to why Strathclyde regional council felt that it was necessary to approach the traffic commissioner. I think that he made the wrong decision, but that is a matter of opinion.

My hon. Friend the Member for Clydesdale (Mr. Hood) is correct. His constituents, together with those of many other hon. Members, lost out. Buses were withdrawn from rural areas so that they could be used on what were believed to be the most lucrative routes in the Glasgow area. It was the economics of the madhouse, and they ended the problem. I am sorry to say that the fact that such behaviour was not profitable, rather than the actions of the traffic commissioners, ended it all. Indeed, the Scottish Bus Group lost millions of pounds.

The hon. Member for Pembroke seemed to welcome the purchase of London buses and the reappearance of conductresses, or clippies. The purchase of 30-year-old, and even older, open-ended ex-London Routemasters was not welcomed in Scotland by those of us who are anxious about safety and reliability in public transport. Glasgow got rid of such buses in the 1960s, largely because too many passengers got injured boarding and alighting at stops and elsewhere, causing a hazard to traffic.

The clapped-out ex-London buses kept breaking down in many parts of Glasgow. That was another problem which the traffic commissioners examined. The buses should have been in a scrapyard, not on the streets of a major city. I agree with the hon. Member for Pembroke that the conductresses were popular, but competition has meant that they have almost disappeared. As many of us thought at the time, the move was simply a temporary publicity gimmick.

The main emphasis of the Bill is on profitability, not the provision of services. At the moment, local authorities can and do subsidise unprofitable but socially desirable routes. As there is a widespread population outwith the heavily populated central belt of Scotland, it is not unreasonable to forecast that the majority of rural routes will be deemed unprofitable by private operators or left to depend on the mercy of local authorities which the Government continually deprive of the resources necessary to provide proper services for their electors.

The Bill has little to do with transport or providing services —it is all to do with selling off publicly owned assets at knockdown prices and transferring 10,000 workers from the public to the private sector, and it is yet another attack on trade union organisation and the wages and conditions of workers.

From 1960 to 1969, I was a transport worker. I spent two years as a tramcar conductor—I think that I am the only ex-"cour" conductor in the House—and seven years as a bus conductor, all with Glasgow corporation transport. Bus workers everywhere do an excellent job on behalf of the nation. They work all manner of shifts, every day of the week and every week of the year, sometimes in the most atrocious weather conditions and in the most difficult social conditions. What is their reward for all this loyal service? A kick in the teeth by the Bill. They deserve much better.

The Bill will do nothing to benefit the economy of Scotland or to create jobs there. Indeed, it will cause jobs to be lost. For all those reasons, the Bill is bad and deserves our opposition.

10.53 pm
Mr. Thomas McAvoy (Glasgow, Rutherglen)

I am quite convinced that what we heard from the hon Member for Pembroke (Mr. Bennett) was nothing less than a grovelling performance in an attempt to get some sort of job in the Government. I wish him every failure in that.

The performance of the hon. Member for Argyll and Bute (Mrs. Michie) at the prospect of jobs being gained in her constituency at the expense of another was quite disgraceful.

Many people will recall the moment of truth for the right hon. Member for Old Bexley and Sidcup (Mr. Heath) when, as Prime Minister, he faced the reality of privatising Rolls-Royce. If he had not nationalised it, the company would have been finished or, more likely, snapped up by foreign buyers. The Government that the right hon. Gentleman formed started off on similar lines to the present one. Public ownership was considered a bad thing but, to his credit, the right hon. Gentleman did what he had to do for the sake of the country when he was confronted by the Rolls-Royce crisis. The right hon. Gentleman recognised that the country could not be run with a dogmatic approach to managing the economy and providing public services.

The Secretary of State for Scotland is now facing the reality that the dogma of privatisation is not a talisman for economic prosperity. No doubt his continued advocacy of it has more to do with personal ambition. He knows that the Tory Back Benches are full of people with arrested mental development who jump up and get excited at the mention of privatisation.

The Secretary of State for Scotland is beginning to recognise reality. That is demonstrated by his comments on 30 November when he said: I made it clear that the Government had no preconception as to whether the privatisation of Caledonian MacBrayne would be a realistic option.

We are told continually that privatisaton is the answer to everything, and that there is no alternative, yet the right hon. and learned Gentleman is on record as questioning whether privatisation would be a realistic option. Let us not hear any more of the Tory claim that they have a superior method of running the modern economy. His attitude to CalMac demonstrates that the Secretary of State for Scotland has taken a small but significant step on the road to Damascus. Let us have no more hypocrisy.

The Scottish Transport Group, which employs 10,000 people and has a turnover of £180 million, is obviously an important factor in the Scottish economy in addition to its crucial social role in Scottish life. The objectives of the Bill have been well summed up by the Secretary of State, as follows: To manage its bus operations as it would do in the interests of private shareholders seeking in particular to retain customer goodwill". That demonstrates the Government's priorities, not only in the Bill but in their general approach to the economy. The second objective is to provide services "subject to Objective I." It is quite clear that the provision of services is subject to the interests of private shareholders.

The Secretary of State for Scotland takes the view that the travelling public will benefit from the greater sensitivity to the market that a private company necessarily has. The intellectual poverty of such a banal statement does not square with the intellect of the Secretary of State. It seems that, in spite of his intellect, he is grovelling to the extremists on his own Back Benches. He is just another Tory politician on the make, prepared to sacrifice his credibility for his career.

Let us consider the service provided since deregulation. The Secretary of State for Scotland said: As he knows, Strathclyde regional council is perfectly able to provide public funds to support the continuation of routes that individual companies do not want to provide. The regional council is the appropriate authority to decide whether there is a social need for a bus service on a particular route."—[Official Report, 30 November 1988, Vol. 142, c. 709-21.] If ever I was tempted to judge the Secretary of State as a politician who was fair and above board, that temptation left me when I heard that statement.

As a former Strathclyde councillor, I remember the agonies that I suffered in the preparation of the council's budget. Against the background of successive cuts in rate support grant, we had to rob Peter to pay Paul in trying to maintain Strathclyde's public services.

Strathclyde regional council is one of the best run councils in Scotland. Even the Secretary of State has paid tribute to its record. To claim that Strathclyde is perfectly able to provide public funds for the continuation of routes does not stand up to scrutiny, and the Secretary of State knows it.

I disagree with the comments of my hon. Friend the Member for Cunninghame, South (Mr. Lambie) about Strathclyde region. Strathclyde's Labour administration is doing a first-class job, in spite of the Government, and all Opposition Members should be giving it our support.

Deregulation is not working. The Scottish Consumer Council says: It is still too early to give a final verdict on the effects of deregulation. The situation is unstable and the forthcoming privatisation of the Scottish Bus Group throws everything in the air. The Secretary of State has made great play of his enthusiasm for employee-management buy-outs. As has been said before, buy-outs have been preferred to control of the workers' future going to people who do not care. There is nothing wrong with employees buying out these companies—this is a means of common ownership which the Opposition welcome—but the motivation for employee buy-outs should not be employees' desperation to retain control over their future. They should be motivated by a thought-out, principled approach, encompassing economic and social factors.

The Secretary of State said that the Unity Trust bank was supported by the trade union movement. He should note the role of the Co-operative bank in this venture. The background to Unity Trust shows the support that came from the trade union and co-operative movements. It is a bit late for the Tories to claim the credit for that development. The Secretary of State should take steps to ensure that the pattern of employee buy-outs in Scotland differs from that in England. These buy-outs, if motivated by a commitment to the community of which they are part, would be crucial in maintaining jobs, standards and services.

The Bill will do nothing for the travelling public and employees unless control is gained by employee buy-outs. The Secretary of State has done little to encourage them. Many of us remain suspicious that he will be content to allow the Tories' friends in commerce and industry to acquire these companies, with all the dangers for employees and the public associated with the Tory dogma of privatisation. For all those reasons, we shall oppose the Bill.

11.1 pm

Mr. John McFall (Dumbarton)

It is getting late, but my constituents would not forgive me if I did not raise the points which they have made to me in the past few months about the Bill. They will be affected by the geographical subsidiaries, Central and Kelvin, which will be amalgamated and privatised. The service will become even worse in my constituency.

When I go around my constituency, I am asked, "Are the Government interested in public transport, or is it a thing of the past?" Sadly, it appears from some comments that it is a thing of the past. We have had two doses of the Government's attempts at transport in Scotland. We had deregulation. My experience, and that of my constituents, was dismal. As one elderly constituent said to me, "Since 1979, the Prime Minister has wanted to put us back on our feet. She has—because there are no buses left in the area." That was the result of deregulation in my area. Because of their stoicism, my constituents have told me that they have more chance of catching the flu than of catching a bus.

What do we have to add to deregulation? Bearing in mind that deregulation involved bidding for contracts, we now have privatisation as well. That is not deregulation which just invites tenders for routes; it involves opening up to the market everything to do with buses, with the attendant issues of bus networks, costs, frequency of service and safety. Where is the social dimension?

On 30 November, the Secretary of State talked about the social dimensions: Strathclyde regional council is perfectly able to provide public funds to support the continuation of routes that individual companies do not want to provide. The regional council is the appropriate authority to decide whether there is a social need for a bus service on a particular route."— [Official Report, 30 November 1988; Vol. 142, c. 721.] The right hon. and learned Gentleman was telling us that social need was not met through privatisation. To meet it, we have to go to the local authority, which has been deprived of money year after year. Where is the social concern in the Bill? There are implications for local authorities in respect of assistance for the elderly, the handicapped and school transport and integration with fare-paying passengers.

What chance is there of a social dimension with the Scottish Bus Group working to a profit target? What faith should be put in the Secretary of State's statement about employee participation? Despite several opportunities, the Secretary of State has still given no commitment about employee participation. He said: It will be encouraged by the provision of financial assistance to management-employee teams wanting to bid for their companies and offering the prospect of locally based management with real employee participation. As my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall) said, the Secretary of State gave no figures to support that. The Secretary of State's statement contains no commitment. The Secretary of State went on to say that the Government cannot guarantee that employee management will be the end result, because that will depend on the proposals eventually put before us."—[Official Report, 30 November 1988; Vol. 142, c. 708-21.] There is no commitment in that respect, just as there is no commitment to the social dimension.

We should remember that when we consider what happened to the 72 component companies of the National Bus Group in England when only two went to employee participation buy-out. That again shows why we do not have any faith in the Secretary of State's statement.

Safety is an important aspect, but it has not been mentioned tonight. We should remember the Clapham Junction rail accident this week and the King's Cross and Herald of Free Enterprise accidents. Surely safety should have been an issue to be considered in Scotland's transport policy.

The environmental aspect has not been mentioned either in this debate. We have been told that the Prime Minister is interested in the green vote, but what about the greenhouse effect, lead-free petrol, overcrowded roads and an integrated transport policy? No reference has been made to that because the Government have a quick-buck mentality. This is a quick sell-off and the Government have no concern for anything that is left behind.

Finally, I shall deal with the rural dimension of the Bill and its effects on my constituency. I visited ScotRail last week and it informed me that tourism is the mainstay of Scottish rural routes. However, according to The Guardian last week, British Rail is now considering whether a bus service would be a better use of Government subsidy. Two routes in my constituency—the Helensburgh to Fort William route and the Helensburgh to Oban route—could disappear as a result of that. If that happens, those areas and communities dependent on tourism will decline. The life of the community is therefore in peril.

There are no Labour district councillors in Helensburgh; they are all Conservative district councillors and there is an independent regional councillor. If I stand in Helensburgh town centre with a petition, I shall find 100 per cent. support because the Helensburgh public want to retain their communities, as they have repeatedly told me. They know that the bus service would not work. They need a rail service to retain the rural dimension. In effect, they are saying that they need an integrated transport policy.

What attention have the Government paid to such a policy? When was the last time that the Secretary of State met the chairman of ScotRail or the chairmen of the bus companies to discuss an integrated transport policy? The Bill makes no mention of an integrated transport policy. There is no commitment to such a policy, to communities or ordinary people. People's interests have been set aside in this sale in the pursuit of ideological goals and cuts in public expenditure. The Government are saying that they do not want to spend any more or to give any commitment to a public sector service in Scotland, whether rural or urban. In other words, they are casting aside people's social concerns.

The Bill shows a total lack of concern for social, environmental and transport issues. It will do nothing for the ordinary person, the community or the country, and that is why it deserves to be rejected tonight.

11.10 pm
Mrs. Maria Fyfe (Glasgow, Maryhill)

Like my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall), I have an interest to declare. I, too, am a Member sponsored by the Transport and General Workers Union.

I have another interest to declare, which is shared by only one other person in the Chamber at this moment, and that is you, Madam Deputy Speaker. My second interest is that I am a female. That being so, I want to talk about safety, a topic which has not yet been mentioned. The male Conservative Members present do not have sufficient imagination to understand what it is like to travel alone, late at night, in a lonely area. They do not know what it is like to sit alone in a bus station late at night. They do not know what it is like to be afraid and to be wondering constantly how long it will be before the bus arrives. A woman on her own may be confronted by drunks fighting or by one man making a pest of himself. It is sad that women live with these fears daily. They often do not have cars of their own, so they must rely on public transport.

Some hon. Members might wonder what my remarks have to do with privatisation. The answer is simple. In the drive for profits, services are cut and the staffing of stations is reduced. Travellers are less safe when there are fewer staff at stations, and that will be the result of the quest for profits. Everyone in Scotland knows that. The Conservative parliamentary women's committee has been formed presumably so that it can deal with issues that concern women, and it is sad that no Conservative Member on the committee is present to protect the interests of women travellers.

Mr. Ian Bruce (Dorset, South)

Will the hon. Lady accept my assurance that in my constituency, where there has been deregulation, we have seen many new operators with minibuses? Women say how safe they feel when they are close to the drivers, who have a supervisory role. The instances of attacks on women and muggings of young men have decreased greatly since deregulation.

Mrs. Fyfe

I do not think that that intervention answers the problem.

Mr. Hood

Does my hon. Friend agree that the Yorkshire Ripper was a driver?

Mrs. Fyfe

I shall not give way again because time is short.

The fact is that women feel a lack of security and are afraid to travel alone at night in lonely areas. Only a few months ago a woman was murdered on a train—[Interruption.] I do not know why Conservative Members find that funny. It is not funny to travel alone and to be frightened. The response of Conservative Members shows their insensitivity.

The hon. Member for Pembroke (Mr. Bennett) talked about the Bill and linked it with popular capitalism. He has failed to notice that privatisation is not the least bit popular in Scotland, especially in the form contained in the Bill. The great majority of the Scottish population do not want it.

When a family is able to run a private car, it is usually used by the husband for his journeys to and from work. His wife will get around by using public transport, along with her children, whatever the inconvenience may be. In the search for profits, companies will cut services, alter routes and remove buses from routes. Women with children to look after, or elderly parents, will suffer all the inconvenience, while others seek to make a fast buck.

When the public are dissatisfied because of a lack of service, who will be accountable? Conservative Members have failed to answer that question. The type of complaints about private sector bus services in my constituency is almost unbelievable. A bus was removed from service on a route that served a hospital. Passengers have had to wait three hours in some instances when travelling from one place to another. It is impossible to travel by bus to some local hospitals.

In my constituency a young boy travels from his home to his secondary school and he has been refused access to a particular company's buses because one driver claimed that his behaviour was unacceptable. Oddly enough, the boy's behaviour is acceptable on every other bus he travels on. When his father protested, the bus company did not have the courtesy to answer—[Interruption.]

Madam Deputy Speaker

Order. I would appreciate it if those hon. Members who wish to carry on conversations would do so on the other side of the swing doors.

Mrs. Fyfe

Thank you, Madam Deputy Speaker. Your having to intervene demonstrates the incredible lack of interest on the Conservative Benches. [Interruption.]

To finish my point, that boy's father has written to the bus company three times, but it did not have the courtesy to answer. He came to me and asked me to take up his case. All I could do was write to the company and hope that it would respond to me.

Mr. David Tredinnick (Bosworth)

Will the hon. Lady give way?

Mrs. Fyfe

The hon. Gentleman has just come into the Chamber, so I will not give way.

When the Secretary of State for Scotland announced the privatisation, he referred to the consultation with Quayle Munro, the accountants. I asked him whether he had ever discussed safety and convenience for women and children passengers. He said that he had not done so, because he did not believe that that had any relevance. He had better wait and see, because the complaints will be legion and I will deliver to him every complaint from the women of Scotland as I receive them.

11.16 pm
The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton)

I congratulate the hon. Member for Cunninghame, North (Mr. Wilson) on his strong support for our decision on Vatersay, which will be very important for the Western Isles. However, I take issue with him on one of his earlier points. He said that safety had suffered as a result of deregulation. The evidence does not bear that out and, despite the increase in vehicle miles run by buses since deregulation, there has been a fall in the number of casualties in accidents involving public service vehicles between 1985–86 and 1986–87. Nor is there any evidence to suggest that vehicle quality has deteriorated.

The hon. Member for Cunninghame, North said that bus services should be provided in the social interest. Of course the subsidy arrangements provided in the Transport Act 1985, following deregulation, allow regional and islands councils, quite rightly, to subsidise any bus services that they consider to be socially necessary. Councillors have the necessary powers to maintain the rural bus network and fill the gaps in the commercial network where they consider that there is a social need.

The hon. Member for Edinburgh, Central (Mr. Darling) also raised the question of socially necessary services. I assure him that the need for regional councils to subsidise bus services is taken into account in the rate support grant calculation, both in reaching decisions on expenditure provision and in grant distribution. That will certainly continue in future. He omitted to say that, when I made representations to him after the withdrawal of bus services from my constituency, he acceded to a large part of my representations.

Mr. Darling

Of course I did, because I believe in providing a public bus service as a service. I was happy to accede to the hon. Gentleman. I was also happy to tell his constituents why it had all come about. Will the Under-Secretary of State tell me why the leader of the Conservative group on the Lothian regional council, Mr. Brian Meek, believes that one of the elements of high spending in Lothian regional council is the amount of money it spends subsidising the bus service? Is he saying that Brian Meek is wrong?

Lord James Douglas-Hamilton

The hon. Gentleman should be clear about the fact that there are socially necessary services. He and I both recognise that, and I have no regret about approaching him.

The hon. Member for Moray (Mrs. Ewing) raised the question of rural bus services. Research on the effects of bus deregulation shows that rural bus networks have been largely maintained both in extent and in frequency.

I wish to answer many of the points raised, but first I shall briefly explain the Government's objectives. First, we want to complete the dismantling of control over the Scottish bus industry so that it is free to respond to the needs and demands of consumers. Deregulation was the first step in that process and, two years on, the bus network remains and the number of vehicle miles provided has increased. Where bus operators have seen opportunities to provide more services, they have been free to do so and there has been a net increase in the number of vehicle miles. Where services have been lost, it is because local authorities felt that it would not be justifiable to provide, at public expense, the continuation of such services. Where services were considered to be socially necessary, they have been retained at a reduced cost overall. New services have been provided.

In a freer bus market it is anomalous for the dominant position to be held by a publicly owned bus company with more than half the total market. It is also anomalous for such a company to be centrally controlled in a market designed to encourage local responsiveness, because the whole purpose of our policy is to do just that. The Bill provides powers for a freer amd more responsive market. The Scottish Bus Group will be divided into 11 units, with nine local operating units. Our aim is to create new, locally based companies that will not only be for the benefit of the bus traveller, but will boost enterprise in Scotland. The enthusiasm of management and workers to take part in that process shows that there is a spirit of enterprise. Our second objective is to make suitable arrangements for the continuation of the important lifeline ferry services on the west coast of Scotland provided by Caledonian MacBrayne. Every Scottish Member will be aware of the verse: The earth is the Lord's and all it contains Except for the Islands, and they are MacBrayne's.

It is unthinkable that we should be other than totally committed to the continuation of at least the present quality of service. Our careful examination of CalMac's operations show that, for the most part, its routes are and will continue to be loss-making. For that reason, it is not a straightforward case for privatisation and it will be transferred to my right hon. Friend the Secretary of State.

Mr. Wilson

While the Minister is in the mood to quote Hebridean folklore, perhaps he would say whether he is aware that the word "Tory" in Gaelic means "thief".

Lord James Douglas-Hamilton

I am not sure that the hon. Gentleman has his facts right—it certainly does not spring from what I am saying. CalMac is providing a lifeline service to the islands, which will most certainly continue.

My right hon. Friend the Secretary of State will set up a new board for CalMac and give it a clear directive to examine how its operations can be provided in a more cost-effective way while maintaining at least the present standard of service. During recent years there has been substantial investment in CalMac and future arrangements will ensure that our commitment to improve support for ferry services will continue to be honoured.

The hon. Member for Glasgow, Shettleston (Mr. Marshall) raised the question of pensions, about which there has been some concern. It is a complex issue and discussions have already started. I am glad to tell the hon. Gentleman that the Scottish Transport Group has appointed an expert pensions adviser who is already holding discussions with the unions. Suitable arrangements will be made to safeguard pension rights and to provide for their continuation. It will be for the privatised companies to establish new pension arrangements for their employees.

When making bids, prospective purchasers will be asked to state their proposals for pensions. The terms of new pension arrangements may be different from those of the Scottish Transport Group. The group will provide transitional arrangements to ensure continuity of pension provision until new schemes are provided in the privatised companies. Arrangements will be made to secure in full the rights of existing pensioners and accrued rights under deferred pensions. That means that all existing pensioners will continue to receive the same pension as they would have had if the Scottish Transport Group had continued.

For existing employees all accrued entitlements up to an employee's date of leaving the STG pension scheme will be fully protected in accordance with existing provisions with regard to future pensions increases. Employees will have a choice either to opt for a transfer value to be paid into their new scheme or to have deferred pension rights under their existing accrued entitlements.

New pension arrangements will require to be established also for those employees of Caledonian MacBrayne who are currently within STG pension arrangements.

Mr. David Marshall

I am grateful to the Minister for his answer on employees who have already earned a pension entitlement and left the industry. Is he saying that existing employees, after their transfer to a new company and after a transitional period, could well have their pension scheme changed to a scheme inferior to the one they enjoy or to no scheme?

Lord James Douglas-Hamilton

I said that employees will have a choice between opting for a transfer value to be paid into the new scheme or to have deferred pension rights under existing accrued entitlements, depending on which is more favourable to the employee concerned. It is important that an expert pensions adviser is now in touch with the trade unions on that point and is following it up.

A further important issue which has been raised is management-employee buy-outs. My hon. Friends the Members for Dumfries (Sir H. Monro) and for Tayside, North (Mr. Walker) provided strong support for that, as there has been throughout Scotland. We wish to encourage such buy-outs and preference will be given to bids incorporating a real degree of employee participation. The Secretary of State has already announced the financial assistance that will be available. That is a maximum assistance of £48,750. Seminars will be held with managers on the general principles of these buy-outs as well as video presentations—

Mr. McKelvey

It disturbs me that the Minister says that consultations will be held with managers on manager-employee buy-outs. I should have thought that, in a democracy, we should talk to the workers.

Lord James Douglas-Hamilton

The hon. Gentleman is right. Seminars will be held with managers on the general principles and a video presentation will be given to the work force at all depots.

I shall show the House how strong is the feeling in favour of management-worker buy-outs. The general manager of Strathtay is reported in The Scotsman as saying: We consulted with the staff throughout the company, held meetings at all the garages and the view came back loud and clear that they wanted to attempt to mount a bid. Lowland's general manager said: We are absolutely delighted that Mr. Rifkind has accepted our strong argument that Lowland Scottish should be allowed to stand alone. Now we must convince him that a management-employee buy-out would work. The general manager of Northern Scottish Omnibuses said that the intended to lead a management-employee buy-out. Mr. James Moffat, general manager of Highland Scottish Omnibuses, said that staff had started a savings scheme with a view to taking part in a buy-out. For Eastern, Mr. Gall said that the company was encouraging its people to support a buy-out bid because it is the best deal for everybody and a sound proposition. The Scotsmanreported: Mr. Shoat, the Scottish TGWU secretary, said that he hoped that Unity Trust, the trade union bank, might provide help for employees trying to put together buyout packages.

Mr. Wilson

The Minister is quoting from The Scotsman, and I am sure that he will not wish to be selective. He will also wish to quote from Mr. Hamish Morrison, the chief executive of the Scottish Council (Development and Industry), who said: Simply to offer assistance with drawing up a bid, with no guarantee that management and employees will not be outbid by competitors with deeper pockets, is wishful thinking. Would the Minister care to address that concern?

Lord James Douglas-Hamilton

The hon. Gentleman leads me directly to the question of preference. My right hon. and learned Friend the Secretary of State said today that the price would not be the only factor in deciding what bids to accept. He would have to take into account as the main test the promotion of sustained and fair competition, the extent of employee participation and price. Management-employee buy-outs, by their nature, create a large number of companies, which add to competition, and that will be borne in mind.

My right hon. and learned Friend made it clear that Scottish-based companies with a significant measure of employee participation will satisfy some of the competition and participation objectives, but it is essential that the price is relevant to the value of the assets. The House will be aware of the strong interest that we have in seeing the spread of employee ownership and participation in management-employee buy-outs, but not regardless of cost.

Mr. Robert Hughes

Will the Minister give an undertaking that the bids for each and every one of the 11 companies will be made public so that we can judge the effectiveness of the Minister's decision making?

Lord James Douglas-Hamilton

I shall look at that point.

Many hon. Members have expressed concern about ownership safeguards. One of the main objectives of privatisation is to boost enterprise in Scotland through the creation of locally based companies. One of the best ways to do this is through management-employee buy-outs, which we are keen to encourage. However, no guarantees can be given about the eventual outcome of the bidding process, nor about what happens to companies after privatisation. One Scottish company bought four English companies at the NBC privatisation, and we cannot deny English companies the same right to bid in Scotland.

The best defence against takeover is for a company to be well run and successful, and we had this very much in mind in deciding on the units for sale and their size. Legislation already exists to control anti-competition practices. Therefore, any proposed mergers of companies after privatisation will be subject to competition legislation.

The hon. Member for Cunninghame, North asked about asset stripping, and other hon. Members expressed concern about this. Specialist advice on property matters will be sought. Arrangements will be made in each case to ensure that either the future development value of bus companies is reflected in sales proceeds or that the conditions of sale ensure that an appropriate share of future development value is recouped if a property is sold within a specified time. We shall be careful to ensure that there is no scope for asset stripping.

This is an obvious point, but we are committed to an upgrading of the ferry services. Expenditure has been more than £22 million on capital works, including pier works and ships, and since 1979 we have spent some £78.7 million in direct support of ferry travel, which is a substantial amount.

The hon. Member for Glasgow, Maryhill (Mrs. Fyfe) asked about consumers making their views known. They can do so through the Shipping Services Advisory Committee, and the Scottish Transport Users Consultative Committee. My hon. Friend the Member for Dumfries raised this point as well. From recent discussions with the islands' community representatives, I am aware of how strongly they feel about the value of these bodies in making representations, and I see no reason to change the consultation arrangements when CalMac is taken into the ownership of my right hon. and learned Friend the Secretary of State. It is vital that the views of consumers are taken into account. It is our intention to appoint members of the new CalMac board with first-hand knowledge of the islands and their needs. I emphasise the importance that the Government place on the responsiveness of the company to the community that it serves.

The hon. Member for Renfrew, West and Inverclyde (Mr. Graham) made a sincere and passionate speech on behalf of his constituents at Gourock. The points that he mentioned will be looked at, but there are sound reasons for moving the headquarters to Oban.

Mr. Graham


Lord James Douglas-Hamilton

They will be nearer the centre of operations, and many people recognise that advantage. Nevertheless, that decision will require careful consideration, and the Government will look to the new board to deal positively with that issue, taking into account all relevant considerations in relation to the Clyde.

The privatisation of the upper Clyde will inevitably lead to a shift in the company's sphere of influence. I appreciate the hon. Member's fears that there will be a reduction in the number of jobs in his constituency, but two important factors must be taken into account. First, there are the commercial aspects of CalMac's operations to be considered and the greater emphasis on Western Isles services in the future. Secondly, the jobs in question will not be lost to Scotland. The leader in the Glasgow Herald commented: The proposal to shift the centre of administrative operations to Oban makes sense. In a unitary state, the furthest flung areas have as strong a claim to efficient public services as anywhere else.

Mr. Graham


Lord James Douglas-Hamilton

I have given way frequently, and I shall make this the last occasion.

Mr. Graham

I feel sure that I am not hearing the Minister right. I believe he said that a board will be established having decision-making powers. But now he is saying that the board must move from Gourock to Oban —so there will be nothing but hard-line guidance.

Lord James Douglas-Hamilton

When the hon. Gentleman reads Hansard tomorrow, he will see what I said. His points will be carefully considered, but it is very much our hope that the headquarters will move closer to the centre of operations.

As to the Gourock-Dunoon and Weymss bay-Rothesay services, there is no doubt that the situation in respect of the Gourock-Dunoon crossing is anomalous. It is an unsubsidised private sector crossing competing with a subsidised public sector crossing on a similar route. The vessels Jupiter, Juno and Saturn making that crossing are shared with the Weymss bay-Rothesay crossing and are interchangeable. There seems a good case for the private sector to take on those crossings, and we shall ask the board to investigate with the private sector the possibility of transferring those routes.

The hon. Member for Argyll and Bute (Mrs. Michie) asked about RET. It has been thoroughly considered in the past, and the Secretary of State announced the reasons for his position on 21 February 1984. A flexible RET system is something of a contradiction in terms, as fares are meant to reflect the cost of travelling the same distance by road, and remove charges from controversy.

The hon. Member for Argyll and Bute asked also about rural railway lines. The Bill's scope does not include them. The hon. Lady said that rural lines are under threat, but I reassure her that British Rail has no plans to close railway lines in Scotland. She was referring to something that was purely press speculation.

The Bill is important for Scotland's public transport. We believe that it will make Scottish bus services more competitive and responsive to their customers. We believe that it will provide a boost to enterprise in Scotland, giving working men and women the opportunity to have a stake in their industry.

Mr. McKelvey

On a point of order, Madam Deputy Speaker. I notice that the Strangers' Gallery has been cleared. Is there a reason for that?

Madam Deputy Speaker

There is, to my knowledge, no reason for it. I can still see people in the Strangers' Gallery, but if right hon. and hon. Members are concerned, I shall call for a report immediately.


Madam Deputy Speaker

I understand that members of the public were being moved to another gallery to give them a better view.

Lord James Douglas-Hamilton

Hon. Members can be reassured that nothing they said caused them to be moved.

Caledonian MacBrayne, with a new independent board, will continue to provide the important lifeline services to the islands to which we are committed, but it will do so with ever-increasing responsiveness.

This Bill is yet another example of the Government's determination to give the Scottish people control of their destiny.

11.40 pm
Mr. Dennis Canavan (Falkirk, West)

On a point of order, Madam Deputy Speaker. Will you confirm that this debate can continue indefinitely, despite the fact that the Minister has sat down?

Madam Deputy Speaker

That is quite correct. I was under the impression that all hon. Members knew the Standing Orders of the House.

Mr. Canavan

I had no intention of participating in the debate until I heard the ludicrous and unsatisfactory speech made by the Minister. In previous encounters with him I have described him as the most incompetent Minister in the Scottish Office, which is saying something.

I shall encourage many of my hon. Friends to speak in this debate, which can go on indefinitely. At Scottish Question Time, English infiltrators come in to disrupt our proceedings, but at least tonight we can inconvenience them by keeping them out of their beds. I must declare a constituency interest. I travel on buses occasionally: I take the bus from my house in Bannockburn to the station, to get to London. I know that, once upon a time, the Minister's ancestors came to Bannockburn for adventurist militaristic purposes, and that he has benefited greatly from that. His ancestors came on horses; after this Bill, even he might have to do so—[Interuption.] —or, as some of my hon. Friends have suggested, he might come by stagecoach.

The Scottish Midland bus group and Scottish Bus Group are in my constituency. The latter until recently serviced buses throughout Scotland—

Mr. Alex Salmond (Banff and Buchan)

I know that the hon. Gentleman will want to reinforce that point before the English Members who have crowded into the Chamber to hear his speech leave again because they think he will go on for some time. I know, too, that the hon. Gentleman will want to make a point about the mental health of the Minister responsible for health in Scotland, who claims massive minorities for legislation like this.

Is the degree of public support for this Bill equivalent to the 19 per cent. who support the poll tax, the 23 per cent. who support student loans and the 33 per cent. who support opting out? Or is it more equivalent to the 61 per cent. who are dissatisfied with the Secretary of State for Scotland, the 71 per cent. who are dissatisfied with the Prime Minister or, in my opinion, the 99 per cent. who are dissatisfied with the hon. Member for Stirling (Mr. Forsyth)?

Mr. Canavan

I am one of the constituents of the hon. Member for Stirling. I remember him coming out in support of the Transport and General Workers Union at Bannockburn bus garage and saying that he would be in favour of a trade union workers' co-operative taking it over.

I should be interested to know whether the Minister —the hon. Member for Stirling—still supports the TGWU at that garage, of whether he is now intent, like the Duke of Hamilton's brother and the Secretary of State for Scotland and all the rest, on selling off the Scottish Bus Group to the richest buyer who comes along. I am waiting for the hon. Member for Stirling to come in on this, but he will be a wee bit embarrassed, because he would not be the hon. Member for Stirling if it were not for the Tory influence through the establishment and the old boy network whereby Sheriff Principal Taylor put a gerrymandering exercise into effect and made Stirling a winnable seat for the hon. Gentleman, and brought him here not just as a Member of Parliament but as Minister for this, that and the other. That is the way in which the Tory party is operating in Scotland at present, not just gerrymandering but mishandling many important public services—health, education and the public transport services that we are discussing tonight.

Mr. Jim Sillars (Glasgow, Govan)

Did the hon. Gentleman hear the Minister say in his winding-up speech —I was fascinated and hung on every word—that the Bill was part of the Tory party's plan to give the Scottish people their rightful destiny? Would he care to comment on exactly how the Tories interpret their right to give the Scottish people their rightful destiny, in relation to their mandate?

Mr. Canavan

I do not understand how on earth the present Government claim to have a mandate for anything from the people of Scotland. If they are delivering anything at all to the people of Scotland, it is poverty, deprivation and increasing injustice—and, in this instance, a rundown in our public transport services which, although not perfect, have served the people of Scotland very well over many years.

A straw poll, or even an accurate opinion poll—or a local or general election—on public transport alone would, I think, reveal that the vast majority of people in Scotland were in favour of public ownership. That would be not for doctrinaire reasons, but for the simple reason that in their experience it has served them, their families and the work force. It has served many shoppers and commuters who cannot afford the chauffeur-driven cars that Ministers have, and thus rely on reasonable standards of public transport with reasonable fares. If that involves subsidy or cross-subsidy, I am very much in favour of it.

Mr. David Marshall

Will my hon. Friend give way?

Mr. Canavan

Yes, I shall give way to my hon. Friend, who has much more knowledge of public transport than I have, having been brought up with it.

Mr. Marshall

My hon. Friend referred to the problems that the Bill would pose for companies in his constituency. Earlier I mentioned the firm of Walter Alexander, coach and bus builders, which is in his constituency. Clearly he is more familiar with the firm's problems than I am. Would he care to elaborate on the problems that the Bill will cause for it?

Mr. Canavan

I understand that my hon. Friend began his working life as a bus conductor.

Mr. Marshall

A tram conductor.

Mr. Canavan

A tram conductor. My hon. Friend was also educated in my constituency, at Larbert high school and other illustrious educational establishments in the area. I know that as a result he can speak with great eloquence and expertise about public transport in Scotland. I have the Scottish Midland bus group in my constituency and the Walter Alexander coachbuilding company. The Bill will obviously have a knock-on, or should I say knock-off, effect on the coach building industry.

A year ago I led a delegation from Scottish Bus Group Engineering Ltd, one of the subsidiaries of the Scottish Transport Group. The Minister will remember that because I went along with local authority and trade union representatives on behalf of the work force at the Scottish Bus Group which is located in Glasgow road, Falkirk. We feared that the Scottish Bus Group was planning to close down the operation in Glasgow road, Falkirk because privatisation was, as I described it at the meeting with the Minister, "just around the corner".

The Secretary of State is conversing and perhaps conspiring with the Government Whip. He probably wonders what time the debate will finish. The cards are in our hands for a change, and I will carry on regardless. If the Secretary of State wants to get his troops home early to their beds tonight, we deserve a better reply to the debate than that we received from the Duke of Hamilton's wee brother. He has probably never been on a bus in his life. I have certainly never seen him on a bus in Bannockburn. [Interruption.] Perhaps the Minister will correct me later if I am wrong.

Mr. Sillars

On a point of order, Madam Deputy Speaker. I am trying to listen to the hon. Member for Falkirk, West (Mr. Canavan) who is making a valuable contribution to the debate. May I remind you that earlier this evening you asked several Conservative Members who continued to talk through speeches to remove themselves from the Chamber and talk elsewhere?

Madam Deputy Speaker

I need no reminding. Three times this evening I have asked hon. Members who wish to carry on conversations to do so on the other side of the swing doors.

Mr. Canavan

I was talking about the Government's lack of mandate in Scotland for their transport policies particularly the Bill. As you probably know, Madam Deputy Speaker, I have been rather outspoken about the abuse of patronage powers by the Government and the increasing abuse of those powers since they were rejected by 76 per cent. of Scottish people at the general election. I have referred to the Secretary of State using his patronage powers as a job creation scheme for failed Tory Members of Parliament, whether it is Michael Ancram, John MacKay—

Mr. Bill Walker

On a point of order, Madam Deputy Speaker. Like you, I have been trying to relate the hon. Gentleman's speech to the contents of the Bill. I can see nothing in the Bill about the jobs that the hon. Gentleman has mentioned.

Madam Deputy Speaker

The hon. Gentleman knows that Second Reading debates are fairly wide-ranging. I am therefore very tolerant.

Mr. Canavan

For once, the hon. Member for Tayside, North (Mr. Walker) has made a fair point. I do not intend to elaborate on the use of the patronage powers with regard to Alex Fletcher, Anna McCurley and Peter Fraser. Last week, I met John Corrie who was kicked out by my hon. Friend the Member for Cunninghame, North (Mr. Wilson). John Corrie told me that he had been appointed a member of the Transport Users Consultative Committee for Scotland. [HON. MEMBERS: "Chairman."] Yes, chairman. I could not believe it. I asked him, "When were you last on a bus?" but he ran away from me on his horse. [Interruption.] I was on a bus last week. I frequently travel by bus. I have little option.

We ought to investigate in Committee how people like John Corrie are appointed to such positions. I do not criticise the man personally; all of us have our attributes, but for his constituents, he certainly kept his light hidden under a bushel. That is why my hon. Friend the Member for Cunninghame, North is now sitting on the Opposition Front Bench.

The Government are using their powers of patronage in a very despotic manner in an attempt to disestablish public transport and to appoint people who have no experience of public transport matters to such positions.

Mr. Salmond

I suspect that John Corrie's interest in public transport is similar to Michael Ancram's sudden interest in public housing. Does the hon. Member believe that the support for this measure in Scotland is greater or less than the 19 per cent. that was accorded to the Conservative party in the most recent Scottish opinion poll?

Mr. Canavan

I think that support in Scotland for this measure is even less than the abysmal 19 per cent. support for the Tory party in the most recent opinion poll. Support for the Tory party in Scotland will, I suggest, become even weaker as the weeks and months go by.

Earlier, before I was so rudely interrupted by some Conservative Members, I was reminding the Minister about a delegation that visited him at St. Andrew's house about a year ago. It consisted of representatives from the Central regional council and members of the Transport and General Workers Union and other trade unions at Scottish Bus Group Engineering Ltd. in Falkirk. I think I told the Minister after that meeting that never before—I have been a Member of Parliament for 14 years and I have led delegations to Ministers in Governments of both political complexions—had any Minister's performance been so incompetent. He sat there, as he did tonight, and just read the brief that had been prepared for him by civil servants.

My local government friends were there, as were my friends and comrades from the trade union movement. [Laughter.] Hon. Members laugh. [HON. MEMBERS: "Not at you."] People's livelihoods were at stake. I went along to the Minister, but all I got was a lot of guff. It was all prepared. We were told, "Oh, you must understand this, that and the next thing. All this has been written down by the Scottish Office." It was utterly incredible. I do not know whether it is possible for the Minister to reply later with the leave of the House, but his previous reply was as unsatisfactory as what he said at St. Andrew's house.

Mr. David Lambie (Cunninghame, South)

Before my hon. Friend finishes his speech, would he care to comment on the Government's decision to transfer CalMac's headquarters to Oban? Like my hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham), I think that it is a bad decision. When the Select Committee on Scottish Affairs investigated road passenger transport and ferries, it visited Tromso in Norway. Tromso is inside the Arctic circle, and the Norwegian Government built a new university there, which resulted in it becoming a centre of economic activity.

Madam Deputy Speaker

Order. This is very interesting but it is an intervention, not a speech.

Mr. Lambie

I am not making a speech. I am drawing my hon. Friend's attention to the fact that, when the Norwegian Government made Tromso the centre for a university, they made it a centre of economic activity in northern Norway, which draws people to the area. If the Government are to transfer the CalMac headquarters, why do they not transfer them from Gourock to Stornoway, and make Stornoway a centre of economic activity? That would revitalise the whole of the Western Isles. Would my hon. Friend care to comment on that point, which I think legitimate?

Mr. Canavan

I do not want to digress at this time of the morning, and I shall come a little nearer home. I remember when we had a Labour Prime Minister who took the Gourock-Dunoon ferry to the Labour party conference at Dunoon. He did not manage to sink that boat. I am sorry that my right hon. Friend Lord Callaghan is not here.

The Government are shifting the CalMac headquarters from Gourock to Oban because the old Tory Member for the area has been displaced by the new hon. Member for Argyll and Bute (Mrs. Michie). They are playing the old patronage game again. The Tories are desperate to win the seat back again, so they are shifting everything to Oban so that they can get MacKay back here. He would be an even bigger disaster than the Minister.

I have seen a lot of incompetent Ministers of various political complexions in my time, and I have just told the Minister what I think of him, but at least he is a nice man. He always has a nice smile when we go to see him. He gives nothing, though. MacKay is a horrible creature. He does not even smile and gives nothing. If fact he kicks us in the teeth. He has certainly kicked working-class people in Scotland in the teeth for many years.

Mr. Salmond

On a point of order, Madam Deputy Speaker. The hon. Member for Falkirk, West (Mr. Canavan) has had to put up with a great deal of provocation during the debate, but is it really in order for the hon. Member for Crawley (Mr. Soames) who has just left the Chamber, to sit through the debate waving his socks at the hon. Member for Falkirk, West?

Madam Deputy Speaker

I thought that I had extremely good eyesight, but I never saw that.

Mr. Canavan

I am not worried about socks; I am more worried about the tackety boots that will be on my poor head tomorrow morning.

Before all the interventions, rude, helpful or otherwise, I was telling the House about a delegation which I led to the Prime Minister. After the delegation to St. Andrew's house, which had a most unsatisfactory outcome, I decided to take on the Prime Minister herself. The Prime Minister was on record as saying that any hon. Member who was faced with a closure in his or her constituency was entitled to an audience with her. Because of the proposed closure of Scottish Bus Group Engineering Ltd. in my patch, I decided to take the matter up with the Prime Minister. I asked whether the delegation could include representatives from the trade union and from the local authority.

In view of her public commitment, the Prime Minister had to accede to my request and meet me, but my constituents and I were bitterly disappointed when she refused to meet representatives of the trade union representing the work force and representatives from the central regional council and from Falkirk district council who were experienced in such situations and wanted to provide support in the form of increased public investment at local authority level to keep the plant going.

Imagine my surprise a year ago, when the Prime Minister's private office wrote to me saying, "Dear Mr. Canavan, I am sorry but the trade unionists and those horrible local authority people cannot come along." However, I was invited to meet the Prime Minister, and who did I see in the waiting room but the Under-Secretary of State, the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton), who was acting as the Prime Minister's lap dog. I went in and I was surprised when the Prime Minister offered me a cup of tea. She even offered me milk to put in it, which was incredible considering what she did about the bairns' milk in schools many years ago. I do not take milk in my tea. I sat down with the Prime Minister. I thought that I would get some support for the Scottish bus industry from the Minister. I thought that he was there with his mandate on behalf of the people of Scotland. I thought that his main remit, his main criterion, and his top priority would have been to present the case of the people of Scotland, including my constituents, as the Scottish Bus Group Engineering Ltd. workplace in my constituency was not just a parochial interest, but had repercussions throughout the Scottish economy in that the service offered by my constituents was of great advantage to consumers throughout the rest of Scotland.

I could not believe it—the Minister sat there and supped his tea, with milk and sugar. He smiled at the Prime Minister and reiterated the Government's case. He did nothing to fight for Scottish jobs in my constituency or elsewhere. I had had great respect for the hon. Gentleman. I know that he came from a great fighting clan which turned up on horseback before the buses came to Bannockburn. Some of the Douglases and Hamiltons changed their jerseys at half-time to ensure that they were on the winning side. Robert the Bruce gave out land throughout Scotland. Some of the Douglases—not the working-class Douglases, but the Hamiltonian Douglases —have benefited ever since. They have never needed the buses, or their horses, except to hunt the poor wee foxes at weekends.

It is incumbent on the Minister to tell us in more detail why we should support this nasty legislation, which, like the poll tax, is an attack on most of the lower income groups in Scotland. Has he looked into the effect on the Scottish bus building industry? I say "bus building" rather than "coach building" because I am proud to represent the constituency of Falkirk, West, which has the best bus builders in the world. If the people of Scotland and England do not recognise that, many people throughout the world certainly do. Walter Alexander of Glasgow road, Camelon, is winning export orders in places such as Singapore and Hong Kong and helping to lower the trade deficit.

The Secretary of State does not realise the Bill's international repercussions. He is drafting in all the English Tory Members. They are coming out of the woodwork. Normally, they are pleased to come into the Chamber at Scottish Question Time for a 45-minute stint of "Ha, ha, jolly, jolly, hockey sticks" and ex-public schoolboy behaviour. But I shall keep them from their beds tonight. I hope that some of my hon. Friends will speak after me to punish those Tory Members and ensure that they do not get back to their dormitory and matron. It is about time the matrons and the other English Tories realised the Bill's knock-on effects on Scottish, British and international industry.

My constituents are building double-decker buses. Even in London, public transport leaves much to be desired. We must wait for the findings after the catastrophic accident this week before we make pronouncements about the reasons. People in the south of England could learn a lesson from some aspects of public transport in Scotland.

Mr. Salmond

I discovered recently from a Grampian Television programme that the hon. Member for Tayside, North (Mr. Walker) was an international bus consultant. Does the hon. Gentleman suspect, as I do, that the hon. Member for Tayside, North might be the guiding hand behind this legislation?

Mr. Canavan

The main contribution of the hon. Member for Tayside, North to transport was crash-landing his glider many years ago. I am sorry about the physical hurt that that caused him. 1 am also sorry about the physical harm that was caused to Lord Hailsham recently and about the accident involving the former Member for Glasgow, Central, the late Tom McMillan.

In the south of England, the standards of public transport are unacceptable and abominable compared with what I would tolerate in my constituency. I would go as far as to say that Tom McMillan would not have died if the standards of public transport in London had been the same as those in Scotland, where, in many areas, those open back-door buses are not acceptable. Getting rid of those buses would improve safety standards and improve job prospects for the workers at Walter Alexander in my constituency.

Insufficient tribute is paid to the worldwide reputation of the Scottish bus-building industry. Many people take double-decker buses for granted and we tend to look on double-decker buses as the norm. A great deal of scientific expertise goes into the building of a double-decker bus and into establishing the exact centre of gravity to minimise the possibility of tilting. It is also necessary to measure the height of the bridges on the routes along which such buses pass.

The cowboy operators who will take advantage of the Bill will not necessarily give the same priority to public safety and the satisfactory construction of buses. My constituents are very concerned about reducing the number of accidents from both the consumer and producer point of view.

Several hon. Members have referred to the effect of the legislation on fares. Will the Minister tell us what is his estimate of the effect on public transport fares? It is all right for the Minister, who has a chauffeur-driven car at his disposal. I must say in the Minister's defence, however, that very occasionally—[Interruption.] He is one of the best of a rotten bunch. I say in the Minister's favour—I have a good word to say about everyone—

The Parliamentary Secretary to the Treasury (Mr. David Waddington)

rose in his place and claimed to move, That the Question be now put.

Question put, That the Question be now put:—

The House divided: Ayes 256, Noes 191.

Division No. 18] [12.20 am
Adley, Robert Batiste, Spencer
Aitken, Jonathan Beaumont-Dark, Anthony
Alexander, Richard Bellingham, Henry
Alison, Rt Hon Michael Bendall, Vivian
Allason, Rupert Bennett, Nicholas (Pembroke)
Amess, David Benyon, W.
Amos, Alan Bevan, David Gilroy
Arbuthnot, James Body, Sir Richard
Arnold, Jacques (Gravesham) Bonsor, Sir Nicholas
Arnold, Tom (Hazel Grove) Boscawen, Hon Robert
Ashby, David Bottomley, Peter
Aspinwall, Jack Bowden, Gerald (Dulwich)
Atkins, Robert Bowis, John
Atkinson, David Boyson, Rt Hon Dr Sir Rhodes
Baker, Nicholas (Dorset N) Brandon-Bravo, Martin
Baldry, Tony Brazier, Julian
Banks, Robert (Harrogate) Bright, Graham
Brown, Michael (Brigg & Cl't's) Haselhurst, Alan
Browne, John (Winchester) Hawkins, Christopher
Bruce, Ian (Dorset South) Hayes, Jerry
Buck, Sir Antony Hayhoe, Rt Hon Sir Barney
Budgen, Nicholas Hayward, Robert
Burt, Alistair Heathcoat-Amory, David
Butcher, John Heddle, John
Butler, Chris Hicks, Mrs Maureen (Wolv' NE)
Butterfill, John Hicks, Robert (Cornwall SE)
Carlisle, Kenneth (Lincoln) Hill, James
Carrington Matthew Hind, Kenneth
Carttiss, Michael Holt, Richard
Cash, William Hordern, Sir Peter
Chalker, Rt Hon Mrs Lynda Howarth, Alan (Strat'd-on-A)
Channon, At Hon Paul Howarth, G. (Cannock & B'wd)
Chapman, Sydney Howell, Rt Hon David (G'dford)
Chope, Christopher Howell, Ralph (North Norfolk)
Churchill, Mr Hughes, Robert G. (Harrow W)
Clark, Dr Michael (Rochford) Hunt, David (Wirral W)
Clark, Sir W. (Croydon S) Hunt, John (Ravensbourne)
Colvin, Michael Hunter, Andrew
Conway, Derek Irvine, Michael
Coombs, Anthony (Wyre F'rest) Jack, Michael
Coombs, Simon (Swindon) Janman, Tim
Cope, Rt Hon John Jessel, Toby
Couchman, James Johnson, Smith, Sir Geoffrey
Cran, James Jones, Robert B (Herts W)
Critchley, Julian Jopling, Rt Hon Michael
Davies, Q. (Stamf'd & Spald'g) Key, Robert
Davis, David (Boothferry) King, Roger (B'ham N'thfield)
Day, Stephen Kirkhope, Timothy
Devlin, Tim Knapman, Roger
Dickens, Geoffrey Knight, Dame Jill (Edgbaston)
Dorrell, Stephen Knowles, Michael
Douglas-Hamilton, Lord James Knox, David
Dover, Den Lang, Ian
Dunn, Bob Latham, Michael
Durant, Tony Lawrence, Ivan
Dykes, Hugh Lennox-Boyd, Hon Mark
Eggar, Tim Lester, Jim (Broxtowe)
Emery, Sir Peter Lightbown, David
Evans, David (Welwyn Hatf'd) Lilley, Peter
Evennett, David Lord, Michael
Favell, Tony Luce, Rt Hon Richard
Fenner, Dame Peggy Lyell, Sir Nicholas
Field, Barry (Isle of Wight) MacKay, Andrew (E Berkshire)
Fishburn, John Dudley McLoughlin, Patrick
Fookes, Miss Janet McNair-Wilson, Sir Michael
Forman, Nigel McNair-Wilson, P. (New Forest)
Forsyth. Michael (Stirling) Maginnis, Ken
Forth, Eric Malins, Humfrey
Franks, Cecil Mans, Keith
Freeman, Roger Marland, Paul
French, Douglas Marshall, Michael (Arundel)
Fry, Peter Martin, David (Portsmouth S)
Gardiner, George Mates, Michael
Garel-Jones, Tristan Maude, Hon Francis
Gill, Christopher Mawhinney, Dr Brian
Glyn, Dr Alan Mayhew, Rt Hon Sir Patrick
Goodhart, Sir Philip Meyer, Sir Anthony
Goodlad, Alastair Miller, Sir Hal
Goodson-Wickes, Dr Charles Mitchell, Andrew (Gedling)
Gorman. Mrs Teresa Mitchell, Sir David
Gow, Ian Moate, Roger
Gower, Sir Raymond Monro, Sir Hector
Grant, Sir Anthony (CambsSW) Montgomery, Sir Fergus
Greenway, Harry (Ealing N) Moore, Rt Hon John
Greenway, John (Ryedale) Morris, M (N'hampton S)
Griffiths, Peter (Portsmouth N) Morrison, Sir Charles
Grist, Ian Morrison, Rt Hon P (Chester)
Ground, Patrick Moss, Malcolm
Grylls, Michael Moynihan Hon Colin
Hamilton, Hon Archie (Epsom) Neale, Gerrard
Hamilton, Neil (Tatton) Needham, Richard
Hampson, Dr Keith Nelson, Anthony
Hanley, Jeremy Neubert, Michael
Hannam, John Nicholls, Patrick
Hargreaves, A. (B'ham H'll Gr') Nicholson, David (Taunton)
Hargreaves, Ken (Hyndburn) Nicholson, Emma (Devon West)
Harris, David Onslow, Rt Hon Cranley
Oppenheim, Phillip Soames, Hon Nicholas
Paice, James Speller, Tony
Patnick, Irvine Spicer, Sir Jim (Dorset W)
Pawsey, James Spicer, Michael (S Worcs)
Peacock, Mrs Elizabeth Squire, Robin
Porter, Barry (Wirral S) Stanbrook, Ivor
Porter, David (Waveney) Steen, Anthony
Portillo, Michael Stern, Michael
Price, Sir David Stevens, Lewis
Raffan, Keith Stewart, Allan (Eastwood)
Redwood, John Stewart, Andy (Sherwood)
Renton, Tim Stewart, Ian (Hertfordshire N)
Rhodes James, Robert Stokes, Sir John
Riddick, Graham Stradling, Thomas, Sir John
Ridsdale, Sir Julian Summerson, Hugo
Rifkind, Rt Hon Malcolm Taylor, John M (Solihull)
Roberts, Wyn (Conwy) Temple-Morris, Peter
Roe, Mrs Marion Thompson, D. (Calder Valley)
Rost, Peter Thorne, Neil
Rumbold, Mrs Angela Thurnham, Peter
Sackville, Hon Tom Waddington, Rt Hon David
Sayeed, Jonathan Walker, Bill (T'side North)
Shaw, David (Dover) Waller, Gary
Shaw, Sir Giles (Pudsey) Wells, Bowen
Shaw, Sir Michael (Scarb') Wheeler, John
Shephard, Mrs G. (Norfolk SW) Widdecombe, Ann
Shepherd, Colin (Hereford) Wiggin, Jerry
Shepherd, Richard (Aldridge) Wood, Timothy
Shersby, Michael Woodcock, Mike
Sims, Roger
Skeet, Sir Trevor Tellers for the Ayes:
Smith, Sir Dudley (Warwick) Mr. David Maclean and
Smith, Tim (Beaconsfield) Mr. Michael Fallon.
Abbott, Ms Diane Dixon, Don
Adams, Allen (Paisley N) Dobson, Frank
Anderson, Donald Doran, Frank
Archer, Rt Hon Peter Douglas, Dick
Armstrong, Hilary Duffy, A. E. P.
Banks, Tony (Newham NW) Dunnachie, Jimmy
Barnes, Harry (Derbyshire NE) Dunwoody, Hon Mrs Gwyneth
Beckett, Margaret Eadie, Alexander
Beggs, Roy Evans, John (St Helens N)
Bell, Stuart Ewing, Harry (Falkirk E)
Bennett, A. F. (D'nt'n & R'dish) Ewing, Mrs Margaret (Moray)
Bermingham, Gerald Fatchett, Derek
Bidwell, Sydney Field, Frank (Birkenhead)
Blair, Tony Fields, Terry (L'pool B G'n)
Boateng, Paul Fisher, Mark
Bradley, Keith Flannery, Martin
Bray, Dr Jeremy Flynn, Paul
Brown, Gordon (D'mline E) Foot, Rt Hon Michael
Brown, Nicholas (Newcastle E) Foster, Derek
Brown, Ron (Edinburgh Leith) Foulkes, George
Buchan, Norman Fraser, John
Buckley, George J. Fyfe, Maria
Caborn, Richard Galbraith, Sam
Callaghan, Jim Galloway, George
Campbell, Menzies (Fife NE) Garrett, John (Norwich South)
Campbell, Ron (Blyth Valley) Garrett, Ted (Wallsend)
Canavan, Dennis Gilbert, Rt Hon Dr John
Clark, Dr David (S Shields) Golding, Mrs Llin
Clarke, Tom (Monklands W) Gordon, Mildred
Clay, Bob Gould, Bryan
Clelland, David Graham, Thomas
Cohen, Harry Grant, Bernie (Tottenham)
Cook, Frank (Stockton N) Griffiths, Win (Bridgend)
Cook, Robin (Livingston) Grocott, Bruce
Corbyn, Jeremy Hardy, Peter
Cousins, Jim Hattersley, Rt Hon Roy
Cox, Tom Haffer, Eric S.
Crowther, Stan Henderson, Doug
Cryer, Bob Hinchliffe, David
Cummings, John Holland, Stuart
Cunningham, Dr John Home, Robertson, John
Dalyell, Tam Hood, Jimmy
Darling, Alistair Howarth, Geroge (Knowsley N)
Davies, Rt Hon Denzil (Llanelli) Howells, Geraint
Davies, Ron (Caerphilly) Hoyle, Doug
Hughes, John (Coventry NE) Patchett, Terry
Hughes, Robert (Aberdeen N) Pendry, Tom
Hughes, Roy (Newport E) Pike, Peter L.
Hughes, Sean (Knowsley S) Powell, Ray (Ogmore)
Illsley, Eric Prescott, John
Ingram, Adam Quin, Ms Joyce
Janner, Greville Radice, Giles
Jones, Martyn (Clwyd S W) Randall, Stuart
Kaufman, Rt Hon Gerald Rees, Rt Hon Merlyn
Lambie, David Reid, Dr John
Lamond, James Richardson, Jo
Leadbitter, Ted Robertson, George
Leighton, Ron Robinson, Geoffrey
Lestor, Joan (Eccles) Ross, Ernie (Dundee W)
Lewis, Terry Ross, William (Londonderry E)
Litherland, Robert Rowlands, Ted
Lloyd, Tony (Stretford) Ruddock, Joan
Lofthouse, Geoffrey Salmond, Alex
Loyden, Eddie Sedgemore, Brian
McAllion, John Sheerman, Barry
McAvoy, Thomas Sheldon, Rt Hon Robert
Macdonald, Calum A. Shore, Rt Hon Peter
McFall, John Short, Clare
McKay, Allen (Barnsley West) Sillars, Jim
McKelvey, William Skinner, Dennis
McLeish, Henry Smith, Andrew (Oxford E)
McNamara, Kevin Smith, C. (Isl'ton & F'bury)
McTaggart, Bob Spearing, Nigel
McWilliam, John Steinberg, Gerry
Madden, Max Strang, Gavin
Mahon, Mrs Alice Taylor, Mrs Ann (Dewsbury)
Marek, Dr John Thompson, Jack (Wansbeck)
Marshall, David (Shettleston) Turner, Dennis
Marshall, Jim (Leicester S) Vaz, Keith
Martin, Michael J. (Springburn) Wall Pat
Martlew, Eric Wallace, James
Maxton, John Walley, Joan
Meacher, Michael Wardell, Gareth (Gower)
Meale, Alan Wareing, Robert N.
Michael, Alun Welsh, Michael (Doncaster N)
Michie, Bill (Sheffield Heeley) Williams, Rt Hon Alan
Michie, Mrs Ray (Arg'l & Bute) Williams, Alan W. (Carm'then)
Moonie, Dr Lewis Wilson, Brian
Morgan, Rhodri Winnick, David
Morley, Elliott Wise, Mrs Audrey
Morris, Rt Hon A. (W'shawe) Worthington, Tony
Mowlam, Marjorie Wray, Jimmy
Mullin, Chris Young, David (Bolton SE)
Murphy, Paul
Nellist, Dave Tellers for the Noes:
O'Brien, William Mr. Ken Eastham and
O'Neill, Martin Mr. Frank Haynes.
Orme, Rt Hon Stanley

Question accordingly agreed to.

Question put accordingly, That the Bill be now read a Second time:—

The House diveded: Ayes 257, Noes 189.

Division No. 19] [12.33 am
Adley, Robert Beaumont-Dark, Anthony
Aitken, Jonathan Bellingham, Henry
Alexander, Richard Bendall, Vivian
Alison, Rt Hon Michael Bennett, Nicholas, (Pembroke)
Allason, Rupert Benyon, W.
Amess, David Bevan, David Gilroy
Amos, Alan Body, Sir Richard
Arbuthnot, James Bonsor, Sir Nicholas
Arnold, Jacques (Gravesham) Boscawen, Hon Robert
Arnold, Tom (Hazel Grove) Bottomley, Peter
Ashby, David Bowden, Gerald (Dulwich)
Aspinwall, Jack Bowis, John
Atkins, Robert Boyson, Rt Hon Dr Sir Rhodes
Atkinson, David Brandon-Bravo, Martin
Baker, Nicholas (Dorset N) Brazier, Julian
Baldry, Tony Bright, Graham
Banks, Robert (Harrogate) Brown, Michael (Brigg & Cl't's)
Batiste, Spencer Browne, John (Winchester)
Bruce, Ian (Dorset South) Haselhurst, Alan
Buck, Sir Antony Hawkins, Christopher
Budgen, Nicholas Hayes, Jerry
Burt, Alistair Hayhoe, Rt Hon Sir Barney
Butcher, John Hayward, Robert
Butler, Chris Heathcoat-Amory, David
Butterfill, John Heddle, John
Campbell, Menzies (Fife NE) Hicks, Mrs Maureen (Wolv' NE)
Carlisle, Kenneth (Lincoln) Hicks, Robert (Cornwall SE)
Carrington, Matthew Hill, James
Carttiss, Michael Hind, Kenneth
Cash, William Holt, Richard
Chalker, Rt Hon Mrs Lynda Hordern, Sir Peter
Channon, Rt Hon Paul Howarth, Alan, (Strat'd-on-A)
Chapman, Sydney Howarth, G. (Cannock & B'wd)
Chope, Christopher Howell, Ralph (North Norfolk)
Churchill, Mr Howell, Geraint
Clark, Dr Michael (Rochford) Howells, Geraint
Clark, Sir W. (Croydon S) Hughes, Robert G. (Harrow W)
Colvin, Michael Hunt, David (Wirral W)
Conway, Derek Hunt, John (Ravensbourne)
Coombs, Anthony (Wyre F'rest) Hunter, Andrew
Coombs, Simon (Swindon) Irvine, Michael
Cope, Rt Hon John Jack, Michael
Couchman, James Janman, Tim
Cran, James Jessel, Toby
Critchley, Julian Johnson Smith, Sir Geoffrey
Davies, Q. (Stamf'd & Spald'g) Jones, Robert B (Herts W)
Davis, David (Boothferry) Jopling, Rt Hon Michael
Day, Stephen Key, Robert
Devlin, Tim King, Roger (B'ham N'thfield)
Dickens, Geoffrey Kirkhope, Timothy
Dorrell, Stephen Knapman, Roger
Douglas-Hamilton, Lord James Knight, Dame Jill (Edgbaston)
Dover, Den Knowles, Michael
Dunn, Bob Knox, David
Durant, Tony Lang, Ian
Dykes, Hugh Latham, Michael
Eggar, Tim Lawrence, Ivan
Emery, Sir Peter Lennox-Boyd, Hon Mark
Evans, David (Welwyn Hatf'd) Lester, Jim (Broxtowe)
Evennett, David Lilley, Peter
Fallon, Michael Lord, Michael
Favell, Tony Luce, Rt Hon Richard
Fenner, Dame Peggy Lyell, Sir Nicholas
Field, Barry (Isle of Wight) MacKay, Andrew (E Berkshire)
Fishburn, John Dudley McLoughlin, Patrick
Fookes, Miss Janet McNair-Wilson, Sir Michael
Forman, Nigel McNair-Wilson, P. (New Forest)
Forsyth, Michael (Stirling) Malins, Humfrey
Forth, Eric Mans, Keith
Franks, Cecil Marland, Paul
Freeman, Roger Marshall, Michael (Arundel)
French, Douglas Martin, David (Portsmouth S)
Fry, Peter Maude, Hon Francis
Gardiner, George Mawhinney, Dr Brian
Garel-Jones, Tristan Mayhew, Rt Hon Sir Patrick
Gill, Christopher Meyer, Sir Anthony
Glyn, Dr Alan Michie, Mrs Ray (Arg'l & Bute)
Goodhart, Sir Philip Miller, Sir Hal
Goodlad, Alastair Mitchell, Andrew (Gedling)
Goodson-Wickes, Dr Charles Mitchell, Sir David
Gorman, Mrs Teresa Moate, Roger
Gow, Ian Monro, Sir Hector
Gower, Sir Raymond Montgomery, Sir Fergus
Grant, Sir Anthony (CambsSW) Moore, Rt Hon John
Greenway, Harry (Ealing N) Morris, M (N'hampton S)
Greenway, John (Ryedale) Morrison, Sir Charles
Griffiths, Peter (Portsmouth N) Morrison, Rt Hon P (Chester)
Grist, Ian Moss, Malcolm
Ground, Patrick Moynihan, Hon Colin
Grylls, Michael Neale, Gerrard
Hamilton, Hon Archie (Epsom) Needham, Richard
Hamilton, Neil (Tatton) Nelson, Anthony
Hampson, Dr Keith Neubert, Michael
Hanley, Jeremy Nicholls, Patrick
Hannam, John Nicholson, David (Taunton)
Hargreaves, A. (B'ham H'll Gr') Nicholson, Emma (Devon West)
Hargreaves, Ken (Hyndburn) Onslow, Rt Hon Cranley
Harris, David Oppenheim, Phillip
Paice, James Spicer, Sir Jim (Dorset W)
Patnick, Irvine Spicer, Michael (S Worcs)
Pawsey, James Squire, Robin
Peacock, Mrs Elizabeth Stanbrook, Ivor
Porter, Barry (Wirral S) Steen, Anthony
Porter, David (Waveney) Stern, Michael
Portillo, Michael Stevens, Lewis
Price, Sir David Stewart, Allan (Eastwood)
Raffan, Keith Stewart, Andy (Sherwood)
Redwood, John Stewart, Ian (Hertfordshire N)
Renton, Tim Stokes, Sir John
Rhodes James, Robert Stradling Thomas, Sir John
Riddick, Graham Summerson, Hugo
Ridsdale, Sir Julian Taylor, John M (Solihull)
Rifkind, Rt Hon Malcolm Temple-Morris, Peter
Roberts, Wyn (Conwy) Thompson, D. (Calder Valley)
Roe, Mrs Marion Thorne, Neil
Rost, Peter Thurnham, Peter
Rumbold, Mrs Angela Waddington, Rt Hon David
Sackville, Hon Tom Walker, Bill (T'side North)
Sayeed, Jonathan Wallace, James
Shaw, David (Dover) Waller, Gary
Shaw, Sir Giles (Pudsey) Wells, Bowen
Shaw, Sir Michael (Scarb') Wheeler, John
Shephard, Mrs G. (Norfolk SW) Widdecombe, Ann
Shepherd, Colin (Hereford) Wiggin, Jerry
Shepherd, Richard (Aldridge) Wood, Timothy
Shersby, Michael Woodcock, Mike
Sims, Roger
Skeet, Sir Trevor Tellers for the Ayes:
Smith, Sir Dudley (Warwick) Mr. David Lightbown and
Smith, Tim (Beaconsfield) Mr. David Maclean.
Speller, Tony
Abbott, Ms Diane Davis, Terry (B'ham Hodge H'l)
Adams, Allen (Paisley N) Dixon, Don
Allen, Graham Dobson, Frank
Anderson, Donald Doran, Frank
Archer, Rt Hon Peter Douglas, Dick
Armstrong, Hilary Duffy, A. E. P.
Banks, Tony (Newham NW) Dunnachie, Jimmy
Barnes, Harry (Derbyshire NE) Dunwoody, Hon Mrs Gwyneth
Beckett, Margaret Eadie, Alexander
Beggs, Roy Evans, John (St Helens N)
Bell, Stuart Ewing, Harry (Falkirk E)
Bennett, A. F. (D'nt'n & R'dish) Ewing, Mrs Margaret (Moray)
Bermingham, Gerald Fatchett, Derek
Bidwell, Sydney Field, Frank (Birkenhead)
Blair, Tony Fields, Terry (L'pool B G'n)
Boateng, Paul Fisher, Mark
Boyes, Roland Flannery, Martin
Bradley, Keith Flynn, Paul
Bray, Dr Jeremy Foot, Rt Hon Michael
Brown, Gordon (D'mline E) Foster, Derek
Brown, Nicholas (Newcastle E) Foulkes, George
Buchan, Norman Fraser, John
Buckley, George J. Fyfe, Maria
Caborn, Richard Galbraith, Sam
Callaghan, Jim Galloway, George
Campbell, Ron (Blyth Valley) Garrett, John (Norwich South)
Canavan, Dennis Garrett, Ted (Wallsend)
Clark, Dr David (S Shields) Gilbert, Rt Hon Dr John
Clarke, Tom (Monklands W) Golding, Mrs Llin
Clay, Bob Gordon, Mildred
Clelland, David Gould, Bryan
Clwyd, Mrs Ann Graham, Thomas
Cohen, Harry Grant, Bernie (Tottenham)
Cook, Frank (Stockton N) Grant, Bernie (Tottenham)
Cook, Robin (Livingston) Griffiths, Win (Bridgend)
Corbyn, Jeremy Hardy, Peter
Cousins, Jim Hattersley, Rt Hon Roy
Cox, Tom Heffer, Eric S.
Cryer, Bob Henderson, Doug
Cummings, John Hinchliffe, David
Cunningham, Dr John Hogg, N. (C'nauld & Kilsyth)
Dalyell, Tam Holland, Stuart
Darling, Alistair Home, Robertson, John
Davies, Rt Hon Denzil (Llanelli) Hood, Jimmy
Davies, Ron (Caerphilly) Howarth, George (Knowsley N)
Hoyle, Doug Patchett, Terry
Hughes, John (Coventry NE) Pendry, Tom
Hughes, Robert (Aberdeen N) Pike, Peter L.
Hughes, Roy (Newport E) Powell, Ray (Ogmore)
Hughes, Sean (Knowsley S) Prescott, John
Illsley, Eric Quin, Ms Joyce
Ingram, Adam Radice, Giles
Janner, Greville Randall, Stuart
Jones, Martyn (Clwyd S W) Rees, Rt Hon Merlyn
Kaufman, Rt Hon Gerald Reid, Dr John
Lambie, David Richardson, Jo
Lamond, James Robertson, George
Leadbitter, Ted Robinson, Geoffrey
Leighton, Ron Ross, Ernie (Dundee W)
Lestor, Joan (Eccles) Ross, William (Londonderry E)
Lewis, Terry Rowlands, Ted
Litherland, Robert Ruddock, Joan
Lloyd, Tony (Stretford) Salmond, Alex
Lofthouse, Geoffrey Sedgemore, Brian
Loyden, Eddie Sheerman, Barry
McAllion, John Sheldon, Rt Hon Robert
McAvoy, Thomas Shore, Rt Hon Peter
Macdonald, Calum A. Short, Clare
McFall, John Sillars, Jim
McKay, Allen (Barnsley West) Skinner, Dennis
McKelvey, William Smith, Andrew (Oxford E)
McLeish, Henry Smith, C. (Isl'ton & F'bury)
McNamara, Kevin Spearing, Nigel
McTaggart, Bob Steinberg, Gerry
McWilliam, John Strang, Gavin
Madden, Max Taylor, Mrs Ann (Dewsbury)
Mahon, Mrs Alice Thompson, Jack (Wansbeck)
Marek, Dr John Turner, Dennis
Marshall, David (Shettleston) Vaz, Keith
Marshall, Jim (Leicester S) Wall, Pat
Martin, Michael J. (Springburn) Walley, Joan
Martlew, Eric Wardell, Gareth (Gower)
Maxton, John Wareing, Robert N.
Meacher, Michael Welsh, Michael (Doncaster N)
Meale, Alan Williams, Rt Hon Alan
Michael, Alun Williams, Alan W.(Carm'then)
Michie, Bill (Sheffield Heeley) Wilson, Brian
Moonie, Dr Lewis Winnick, David
Morgan, Rhodri Wise, Mrs Audrey
Morley, Elliott Worthington, Tony
Morris, Rt Hon A. (W'shawe) Wray, Jimmy
Mowlam, Marjorie Young, David (Bolton SE)
Mullin, Chris
Murphy, Paul Tellers for the Noes:
Nellist, Dave Mr. Frank Haynes and
O'Brien, William Mr. Ken Eastham.
O'Neill, Martin

Question accordingly agreed to.

Bill read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).

Mr. Sillars:

On a point of order, Mr. Deputy Speaker. I do not imagine that I am the only right hon. or hon. Member who witnessed an altercation just before the Division, when the hon. Member for Wirral, South (Mr. Porter) took a totally unprovoked swing at the hon. Member for Glasgow, Hillhead (Mr. Galloway). I wonder whether you, Mr. Deputy Speaker, will rule on whether that was unparliamentary conduct.

Mr. Brian Sedgemore (Hackney, South and Shoreditch)

Further to that point of order, Mr. Deputy Speaker. I want to be helpful, because I witnessed three, or possibly four, criminal offences. I witnessed the offences of assault, battery, conduct likely to cause a breach of the peace, and possibly the offence of unlawful assembly. It occurs to me that there are three ways of dealing with those matters—

Mr. Deputy Speaker (Mr. Harold Walker)

Order. I hope that the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) will leave the matter for me to deal with. An allegation has been made that an hon. Member engaged in disorderly conduct. No such incident has been reported to me. If it occurred, it should have been raised at the time. I cannot rule retrospectively.