HC Deb 20 February 1989 vol 147 cc787-804
Mr. Wilson

I beg to move amendment No. 18, in page 7, line 36, leave out subsection (3) and insert— '(3) It shall be a condition of sale of any undertaking or part of an undertaking under the Act that there be no diminution of any concession, benefit or privilege enjoyed by—

  1. (a) any person who is or has been employed by the Group (or any subsidiary of theirs); or
  2. (b) a member or such a person's family.'.
Clause 13(3) states that the disposal programme may, with the approval of the Secretary of State, include provision—
  1. (a) for the maintenance to any extent of any concession, benefit or privilege enjoyed by—
    1. (i) any person who is or has been employed by the Group …; or
    2. (ii) a member of such a person's family; or
  2. (b) for the making of arty payment or the provision of any other concession, benefit or privilege in compensation for the loss, reduction or limitation of that concession, benefit or privilege".
Our amendment would take out that wishy-washy provision.

There is a simple but revealing difference in approach between Opposition Members and Conservative Members. Opposition Members simply say that some folk have concessionary travel, principally because they, their husbands or fathers have worked for the Scottish Bus Group for many years and it should not be taken away as a result of privatisation. It is not they who are privatising, and it is not they who should lose as a result. Let us keep it simple. Part of the deal of selling the company to the private sector is that such concessions are continued. Our approach is nice and simple, honest and decent.

This clause is hedged by caveats under which the Secretary of State may see fit to include concessions as a condition of sale. If some hard-nosed man of the City says, "We do not want all these pensioners cluttering up our microbuses," that concession could disappear overnight. I should be surprised if the Secretary of State is losing any sleep over that.

It is as simple as that. There is no point in spinning out the debate. We do not want the Government to take concessions from people or their relations who have worked for the Scottish Bus Group. If he leaves the amendment intact, the Minister will earn a little respect from the Opposition. Unless it is written into the Bill, as the companies change hands and asset-strippers and speculators get their hands on them, there will be no place for concessions. There will be places only for what passes for business.

Dr. Godman

This is an important amendment. My constitituents who worked for Clydeside and Western are anxious to ensure that their interests, privileges and so on are respected in the same way as those of the employees at Clark Kincaid in the deal which was signed by British Shipbuilders and its buyers. My busmen constituents want the same sort of fairness shown to them as was shown by the management buy-out just down the road in East Hamilton street in Greenock when Clark Kincaid was taken over by Mr. Bill Scott and his colleagues. The negotiations were fair. I spoke to senior shop stewards, councillor Robert Jackson and John Quigley at Clark Kincaid, and they thought that they had negotiated a reasonable deal for the work force.

Employees of Clydeside and Western, whom I have met recently, are seeking the provision that is contained in the amendment. It states that there should be no diminution of any concession, benefit or privilege enjoyed by— (a) any person who is or has been employed by the Group. That is what they seek if and when negotiations for the purchase of their particular bus company take place. They would prefer to follow that route than the tortuous path that seems to have been followed by the employees at Ferguson in Port Glasgow vis-a-vis the would-be take-over by the Perth-based Ailsa company of that yard. In that case the would-be buyer is arguing for a diminution of benefits, pensions and so on.

I hope that the interests of the Clydeside and Western employees, who provide a fine transport service for the people of Inverclyde, will be honoured, as were those of my constituents employed at Clark Kincaid by those who acquired that company.

Mr. McAllion

These concessions, benefits and privileges are essentially free travel for employees and either free or cut price travel for their families. In Committee the Minister said: These concessions are not a right, but a privilege. The use of the word "privilege" presaged the Minister's intention not to stand up on behalf of the employees who insist that these privileges be maintained after privatisation. He showed that he was prepared to accept that the concessions would be conceded, at least in part, by the STG and through it by the Government in the negotiations with the new private operators.

It is important to recognise that although each subsidiary, for example Strathtay, arranges the free concessions for its employees, the concessions apply to the whole of the STG. Therefore, it is possible for an employee of Strathtay to have a cheap busman's holiday with his family which could take him from Dundee to Perth on a Strathtay coach, on a Citylink coach to Gourock, on a CalMac ferry to the Western Isles and as far as Stornoway without any charge to him and only a part charge to his family. We are dealing with substantial concessions and rights which workers enjoy by custom and practice.

When the Minister was asked what the value of the concessions was, he admitted that they had not been costed and said that he would ask the STG for an estimate. Can he tell us the cost of these concessions?

In Committee the Minister said that the STG had the power to enter into arrangements regarding the continuation of any concession with the new owners of the privatised subsidiaries. Failing agreement in the negotiations, the STG would have the power to make compensation payments for the loss of any such concession. That reveals that the Minister expects the negotiations to fail. In the expectation of that failure he has built into the Bill the provision that the STG can make some sort of pecuniary compensation to those who lose out as a result of privatisation. What sort of financial compensation will be available for people who lose these concessions as a result of privatisation?

The Minister went on to say: I wish to make it clear … that the provision of any concessions for employees and their families of the privatised companies will be a matter for those companies. In other words, he conceded that the Government would not impose on the new privatised companies the condition that they pick up the concessions, but would leave it to the companies. He said that the Government would expect them to provide concessions for their employees and their families. He may expect them to do that, but what steps is he taking to make them do so? That is the key question that he must answer tonight. So far he has not said how he can do that.

The Minister said that the Government would make provision in the disposal programme for bidders for any SBG subsidiary to be asked what their intentions are with respect to travel concessions. If Stagecoach said that there would be no concession scheme for its employees, would that statement veto the bid or would the Minister accept the bid because of its other merits? Would he allow a bid to be successful although no concessionary arrangements were made?

The Minister pointed to the National Bus Company experience and said: in some cases arrangements regarding concessions were included in sale agreements. For the life of me, that seems to be what amendment No. 18 is suggesting. If the Government were prepared in the sale of NBC subsidiaries to concede that the continuation of these concessions should be part of the sale agreement, the Minister will have to put up a convincing argument why that cannot be included in the sale of the SBG subsidiaries.

In Committee the Minister said that he would give special consideration to the future arrangements for concessionary travel for retired employees of the bus companies and that he would anticipate that it will be possible to make suitable arrangements within the disposal programme, though necessarily covering the full extent of existing concessions. The Minister seems to be prepared to accept the precedent set by the National Bus Company privatisation and to include in the sale agreements the condition that retired employees should continue to enjoy concessions. But he also seems to be arguing that he would accept watered-down concessions by the private companies. He must say clearly whether that is the case.

The Minister also said in Committee: It remains to be decided whether STG employees other than CalMac employees at the date of transfer would remain eligible for CalMac concessions. Has the Minister decided whether any of the employees in the privatised subsidiaries will continue to enjoy the concessions which allow them free travel on CalMac ferries? The same applies to CalMac employees and retired employees. Will they be able to use the privatised buses, as they use the STG buses, free of charge?

The Minister ended in Committee by saying: It may not be possible to make arrangements for the full extent of existing concessions to continue, because, except for CalMac, the arrangements will depend on what is made available by the new companies."—[Official Report, First Scottish Standing Committee; 14 February 1989, c. 384–85.] That is an unsatisfactory way to proceed. These valuable concessions have been enjoyed by custom and practice in the transport industry sinced the second world war. The Minister seems to be washing his hands of responsibility for ensuring that the concessions continue and is leaving the matter entirely to the private operators. He will speak to them and try to reach agreement on including concessions in the new private operations, but he will do nothing to make the private companies accept those concessions. In the end, it seems that he is prepared to back down.

I ask the Minister to remember what he said in Committee and to give now the answers that he did not give then.

9 pm

Lord James Douglas-Hamilton

Opposition Members have made several important points. I am not yet in a position to give a figure on the cost of concessions. It is probably difficult to calculate. The hon. Member for Cunninghame, North (Mr. Wilson) mentioned compensation. Whether it will be paid in respect of the loss of concessions will be decided once the extent of the continuing concessions is known. Such compensation will not necessarily be provided, although the Bill would enable payments to be made if appropriate.

The hon. Member for Dundee, East (Mr. McAllion) asked whether the lack of a concessionary scheme would veto a bid. It would not necessarily veto a bid, but it would be seriously taken into account in evaluating a bid.

Mr. Wilson

If the would-be private buyers of those companies buy their copies of Hansard tomorrow and see that the Government will take such matters into account and that it might lead to a veto, instead of telling the Government what they plan to do when making the bid might they not simply do it a fortnight later?

Lord James Douglas-Hamilton

We shall give special consideration to the future arrangements for concessionary travel for retired STG employees. I would expect those matters to be covered fully in the disposal programme and, if necessary, for provision to be made in sale agreements. However, the arrangements may not provide for the full extent of existing provisions covering the STG network.

The hon. Member for Dundee, East used the National Bus Company as a precedent. I understand that in that privatisation not all the existing concessions were continued, but that the sale agreements provided for some concessions for retired employees.

The STG grants its employees and retired employees travel concessions on STG services for themselves and members of their families. Employees enjoy free travel on STG and Caledonian MacBrayne services within Scotland. Half-fare concessions are given to employees' spouses and children under 16. Employees also receive half-fare concessions on services such as Citylink cross-border services that are not covered by full-fare concessions. Retired employees and their spouses, widows or widowers are entitled to free travel.

As the hon. Member for Dundee, East pointed out, I said that the concessions are not a right but a privilege. But I make it clear to the House that they are of long standing and that it is customary to provide such concessions in the transport industry. The provision of concessions for employees and their families by the privatised companies will be a matter for those companies, but we would expect them to provide concessions. When they submit bids, prospective purchasers will be asked what their intentions are with respect to travel concessions, and that information will be taken into account when assessing bids.

Dr. Godman

Concessions, benefits and privileges enjoyed by employees would come under the rubric of terms and conditions of employment. If that is the case, will employees be allowed—as with the privatisation of British shipbuilding yards—the right to exercise a veto by way of secret ballot over any bid other than that of a preferred bidder? That is what happened at Kvaerner, and it has happened at all the other British shipbuilding yard privatisations for the past few years. It happened most recently at Clark Kincaid—

Mr. Deputy Speaker (Mr. Harold Walker)

I do not see how that can arise under this amendment.

Lord James Douglas-Hamilton

The position is clearly different when there are a number of different subsidiaries. It would not be appropriate to make it a condition of sale that all existing concessions should continue. I expect that privatised companies at least will wish to offer some concessions to their own employees for travel on their own services. If privatised companies are willing to go further and to make reciprocal arrangements for concessions on their services for employees of other bus companies, that will be for them to arrange.

We shall consider with the STG what provisions, if any, should be made in sale agreements with regard to concessions for employees and their families, but I do not anticipate that any such provision will go as far as the amendment would require. To do that would be very complicated and would impose conditions on sale that might inhibit bids, including bids from management-employee buy-out teams.

Dr. Godman

My question relates to concessions and privileges. Will negotiations for acquisition follow a similar pattern to that established by the present Government for the sale of British shipyards?

Lord James Douglas-Hamilton

As I have told the hon. Gentleman, the circumstances are entirely different.

Dr. Godman

No, they are not.

Lord James Douglas-Hamilton

It is different when there is a single employer. It is likely, indeed inevitable, in this instance that a series of different companies will emerge. I should also point out that travel concessions do not form part of STG contracts of employment, although it will be open to any company to offer concessionary schemes within the area in which employees and pensioners live. Companies will be at liberty to work out reciprocal arrangements if they wish.

Mr. Wilson

I would not say that the Minister had explained the position clearly; I would say that he had explained it with his usual clarity. Certainly my question went unanswered. I remember that in Committee someone suggested that our proceedings should be called "Carry On Buses", but in the Minister's case they should be called "Carry On Reading", because no matter what he is asked he simply goes on with his brief without pausing to attempt an answer if the question is at all tricky.

I asked the $64,000 question: what if the bidders for the subsidiary companies do not declare at the time that they are going to abandon employees' rights, but subsequently do so? What sanction does the Minister retain in the Bill? If he does not retain a sanction, will he tell us honestly that there is nothing in the Bill to safeguard the concessionary travel rights of the present Scottish Bus Group employees? That is the truth of the matter.

I find it despicable that rights which, although the Minister may consider them a privilege, are clearly understood to be built into the remuneration of transport workers are to be put up for auction along with everything else.

Amendment negatived.

Order for Third Reading read.

9.8 pm

Lord James Douglas-Hamilton

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

We have had a full and interesting series of debates today. In those debates and in Committee we have discussed thoroughly the issues raised by the Bill and have clarified many points.

At the start of the Committee stage the hon. Member for Cunninghame, North (Mr. Wilson) said: we want to make the best of the Bill, particularly by encouraging the idea of worker-management buy-outs."—[Official Report, First Scottish Standing Committee, 17 January 1989; c. 10] I am glad that the hon. Gentleman expressed himself in such terms at an early stage, as it is the Government's objective also to ensure that the Bill is entirely satisfactory and to encourage management-employee buy-outs.

The Bill falls into two main parts. The first deals with the privatisation of the Scottish Bus Group, and the second with the transfer of Caledonian MacBrayne to the ownership of the Secretary of State.

In privatising the Scottish Bus Group we have a number of important objectives. First, we want to increase the amount of competition in the bus industry. Competition increases efficiency and choice: the busy bus routes which have attracted extra services since deregulation, holding the fares down and increasing choice, are evidence of its benefits. Secondly, we want to widen share ownership and encourage management and employees to participate in the ownership of the firms in which they work. That objective has received widespread support. Thirdly, we want to replace a large dominant provider of bus services, which is centrally controlled, with locally based Scottish companies in touch with their local markets. I am sure that the Opposition subscribe to those objectives.

The second part of the Bill transfers the ownership of Caledonian MacBrayne to the Secretary of State. That is an essential consequence of the dissolution of the Scottish Transport Group. Our objective in doing so is to ensure the continuance of lifeline services to the islands off the west coast of Scotland, given the unprofitable nature of the majority of those services. Our first priority with CalMac is always to guarantee the lifeline services which it provides to the islands. The Government's commitment to the services is plain. Since 1979 we have approved £22 million for new vessels and £6 million for new piers. In a fortnight's time a further new vessel will be launched at Port Glasgow, making it the fourth major new vessel to be launched in the past five years. Roll-on roll-off facilities are now available across a great part of the network. The transfer of CalMac to the Secretary of State will allow that commitment to the services to continue. The Secretary of State will be appointing a new board for the company, and I have given a clear undertaking that, although we want a wide spread of experience of commercial and shipping matters on the board, we would look for such persons among those who are resident in the islands.

We are anxious to ensure that CalMac is responsive to its customers. As part of this process the Secretary of State has said that he would like the new board to look at the possibility of moving the headquarters of CalMac nearer to the centre of the area which it serves. He has suggested that Oban would prove a suitable place for this purpose. I am aware from the substantial discussion in Committee and in the House that this suggestion is strongly opposed, particularly by Members whose constituencies would be affected by the transfer of jobs. However, as I have made clear, I am sure that when considering the best arrangements for its headquarters, the new board of CalMac will take careful account of the views of management and employees and will consult them fully before deciding what solution is best in terms of CalMac's overall responsibilities to provide shipping services to the Western Isles.

The Bill offers the prospect of exciting new developments in the organisation of a major part of Scotland's public transport system. It offers the prospect of new bus companies which are locally based and locally responsive. It offers the prospect of CalMac, with its own board, taking a fresh look at how it can continue to serve the islands in a more cost effective way.

I commend the Bill to the House.

9.12 pm

I thank my colleagues for their support. Without exception, the Opposition Members who served on the Committee have also been present today. The contrast with the turnout and contributions from the Conservative Benches is even more striking than usual. What we are faced with is government by decree, not by discussion or debate, and certainly not by amendment. At this stage in our proceedings the sum total of our achievement has been to turn one "may" into "shall". That is the only amendment that the Minister has accepted.

It is clearly understood that one result of the Bill will be that the STG will be done away with. Therefore, in the past few days I was surprised to read that two new members of the STG board have been appointed for two years. I should be grateful if the Minister could explain what they will do for two years. I hope, in particular, that the Minister will assure us that they are not being appointed now to be transferred to the board of CalMac when it is the successor company. As far as I can tell, reither individual has had any dealings with the operation of ferries. I find it extremely odd that, at this juncture, two new appointments to the board for two years have been announced by the Government.

The Bill is unnecessary, unasked for and unwanted. It is not the stuff from which great political excitement is made. For most people it is fairly mundane and for most hon. Members it is one of the less spectacular pieces of legislation that will be considered in the lifetime of this Parliament. But for the people who work for the Scottish Transport Group it is a major piece of legislation because it disturbs their lives, upsets their security and puts their jobs at risk. For those reasons it is important to those people even if it is not important to Conservative Members who have shown their disinterest by their conspicuous absence from the debate.

To an extent to which many people do not yet realise the Bill is also important to the travelling public, because the level of service will be affected. The incantations by the Minister are insufficient to persuade anyone that services will be affected in a beneficial way. I am reminded of the adolescent Maoists of the late 1960s, who went round with little red books chanting slogans. The equivalent chants from the Minister are, "Competition increases efficiency and choice. We want to widen share ownership. These are exciting new developments." Those are empty slogans and bear no relationship to the consequences of deregulation or privatisation in England and Wales.

As the Minister rightly said at the start of our deliberations on the details of the Bill, I said that I wanted to make the best of it—especially in relation to the disposal of the individual companies in the Scottish Bus Group. I wanted to write into the Bill amendments that would make likely the success of buy-outs. I was not doctrinaire about the form of buy-outs because they are many and varied. As a decentralist, I believe that it is up to the people who work in the group to make their own arrangements and to compete if necessary to establish the best of these arrangements in their own interests and in the interests of the service that they provide. After that has been done my approach would be, "May the best scheme win."

On that issue and as the Minister is aware, I am puzzled and disappointed that he has precluded the possibility of competition in the advancement of buy-out options by a quite absurd adherence to his determination that there will be only one buy-out option eligible for Government support. Therefore, in a completely unjust way, other attempts at buy-outs from within the work force will be disqualified. They will not he allowed to get past first base or to develop to a stage at which they can be judged on their merits. That is the antithesis of competition and choice and all the other wonders that the Minister sought to attribute to the Bill.

It is a quite unnecessary and unreasonable element in the Bill that only one of these buy-out bids will have the opportunity even to be considered. There will be few prizes for guessing that the bids that will be disqualified will be those that have most participation by those who work on the shop floor of the bus industry. The Minister is on record as saying that the only bids that will attract support are management-employee bids. That is disappointing and I still hope that the Government will think again about it.

When I said that we sought to make the best of the Bill I meant that we wanted something in writing setting out the terms on which buy-outs would be encouraged and made to succeed. Not one word of the Bill makes it likely that buy-outs will succeed, whatever format they may take. The Minister has resisted every attempt to strengthen the Bill in support of buy-outs by the existing employees of the bus companies. At the end of the day all that we are left with is his assurance of good will towards them. He tells us that that is what the Government want. We will not have any idea for some months about whether that will become reality, but we know that the private sector does not see it that way. It is not convinced that the Minister will support buy-outs or that this is a matter of transferring the bus holdings to the two buy-outs consisting of management and workers. The private sector knows very well that it is in at least as good a position to succeed with its bids. That is why the private sector—in some cases the exploitive and asset-stripping private sector—will be queuing at St. Andrew's house to put in its bids as well.

I find it extraordinary that at this particular juncture the Scottish Development Agency should have chosen to invest £500,000 in Stagecoach for the specific purpose of strengthening its ability to compete against the buy-out bids to which the Government pay lip service. Until now there has been nothing to strengthen the likelihood of buy-outs succeeding, and everyone who works within Scottish Bus Group, everyone who has followed the Committee's deliberations, and everyone who is interested in a reasonable solution being found to the ownership of bus services in Scotland will watch carefully in the months ahead to see whether the Government's words are turned into action. If they are not, that will be another stick with which to beat the Tories in Scotland.

I am interested, as, I am sure, is the hon. Member for Dumfries (Sir H. Monro), in what happens to the attempted buy-out in the Western and Clydeside areas which are to be merged into one big company. Three Tory Members represent the Western area, and if the buy-out bid is treated with contempt and one of the big private operators is favoured in the disposal, I have no doubt that that will inflict a political cost on the Government in that part of Scotland.

Another matter that I have mentioned today and that dominated our debate in Committee is the attempt in the Bill to protect the assets and the interests of the public purse. I am appalled that the Bill contains nothing to protect the interests of the public purse. I place on record again the experience of Hampshire Bus as an illustration of what can and will happen unless protective steps are taken. Hampshire Bus was sold to Stagecoach for £2 million. Two bus stations were then sold, leaving the travelling public in Southampton with no bus stations. One of those bus stations was sold relatively uncontroversially for an undisclosed price, the other was sold for £4.1 million. Part of the bus operation of Hampshire Bus was then sold by Stagecoach for a further f 1 million producing for Stagecoach a net profit of at least £3.1 million on those transactions, and left it still owning the remaining half of the operation. It beats me how anyone in any corner of the House can claim that the public purse did anything other than extremely badly, as the price of disposal clearly did not reflect the value of the asset being sold. It did not take account of the potential profit through the realisation of the assets if they were transferred from the purpose for which they were sold to another purpose—development.

As I pointed out, the public purse in another form—the ratepayers of Southampton—was left to pick up the tab to build a new bus station at a cost of £138,000. Thal is an illustration of the relative values that can be placed on the same piece of property if the use is different. It costs £138,000 to build a bus station in Southampton, vet another bus station can be sold for £4.1 million. Which value will be reflected in the calculations on which the assets of the Scottish Bus Group are sold? Will it be the value of the bus station or the development value? All the Minister can say is that experts are advising on the matter. But there was expert advice in Southampton and in every other part of England and Wales where similar rip-offs have occurred.

I make it clear that my criticism is not of Stagecoach. If Stagecoach can make £2.1 million, then another .1 million and then another few hundred thousand pounds by selling the assets that it brought cheaply, that is business, from the point of view of Stagecoach. But I am interested to know who advised the Government to sell for £2 million and whether similar people are advising them on this sale. The Minister must tell us that.

In Scotland, we are dealing with capital property assets. at least as valuable as—if not more valuable than—those in Southampton and other parts of England where similar asset stripping has occurred. I am advised that the Buchanan street bus station in Glasgow has a capital value for development purposes of at least £4 million and the St. Andrews square bus station in Edinburgh has a development value of at least £15 million. Are they to be sold at their asset value as bus stations or for their development value?

If the buyers of these companies say that the want to use the properties as bus stations and then—as happened in Southampton—a fortnight later sell them at their development value, will there be any redress for the public interest and the public purse? From what we have heard so far from the Minister tonight, the answer appears to be that there will be no protection and the Bill will be an asset-stripper's charter. If the Minister has any other thoughts on that he should tell us now. He must recognise that his pathetic answer that professional advice is being taken is wholly inadequate.

I turn briefly to the major part of the Bill which deals with Caledonian MacBrayne. I shall not go over all the arguments again, but when the Minister talks about the new board deciding this and that, he merely highlights and confirms what we have said, which is that the composition of the new board is all-important. I should like an answer to the question that I asked at the outset—is there any connection between the new members of the Scottish Transport Group board and the proposed new board of Caledonian MacBrayne? If the Minister can bring himself to do so, let him speak the words and say that posts on the Caledonian MacBrayne board will not be politically motivated appointments of out-of-work Tories, but will genuinely reflect the interests and values of the communities that Caledonian MacBrayne uniquely serves.

The Bill's main feature is unnecessary: nobody demonstrated in the streets of Scotland for a Scottish transport Bill to privatise the bus services. By and large, the Scottish people are reasonably satisfied with the services provided by the Scottish Bus Group. As every survey since deregulation has shown, people are in the main less satisfied with bus services now than they were pre-deregulation. I know that that will be denied by those who choose to believe in the myth that competition increases efficiency and choice.

In many parts of Scotland the Bill could result not in greater competition and choice, but in more monopoly and lack of choice. However, I do not think the Government are concerned about that, because they are really interested in a doctrinaire determination to hand public assets to the private sector without regard to the interests of the public purse, the employees of the public sector or the public who are served by it.

9.23 pm
Sir Hector Monro (Dumfries)

I warmly congratulate my right hon. and learned Friend the Secretary of State for Scotland on bringing the Bill to the House, and my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) on taking it through Committee so effectively and efficiently. I should add that the hon. Member for Cunninghame, North (Mr. Wilson) also played a constructive part in getting the Bill through Committee. The passage of the Bill shows that with good will from hon. Members on both sides it is possible to complete a Committee stage without having to impose a timetable, so that all parts of the Bill receive adequate scrutiny, which is what should happen.

I am a great believer in voluntarily timetabling legislation beforehand to avoid the guillotine, which results in the latter parts of Bills never receiving proper discussion. I felt that the Bill proceeded through Committee properly and there was plenty of time for all of it to receive proper discussion.

The principal objective of the Bill is to achieve better bus services in Scotland and we shall achieve that. I know that the Opposition dislike any form of change, but I think that the Bill brings a change for the better. We shall have better bus services and more buses of varying sizes, including the minibus services that are so effective. There will be just as much, if not more, employment, with bus services being run effectively for the public and for school children in rural constituencies.

The bus operators and staff of Western in south-west Scotland are looking forward to the opportunity to participate in management buy-outs. That is exactly what my right hon. and learned Friend hopes will happen. I take the point that in buy-outs, of whatever kind, great value is placed on the capital assets and that vast profits are sometimes made, due to the arrangements for the original sale. I hope, however, that lessons have been learnt from other disposals. I agree with the hon. Member for Cunninghame, North that the capital value of the bus stations in Edinburgh and Glasgow is enormous. At a more humble level, so, too, is the capital value of garages in Dumfries and elsewhere in Scotland.

The bus services that are about to be deregulated enjoy the use of valuable capital assets. I am sure that those who advise my right hon. and learned Friend about the sale of capital assets will bear their value in mind. City centre developments are very big business. It would be unacceptable if bus companies sold their capital assets for redevelopment as shopping centres or office accommodation. Their capital value ought to be borne in mind when they are sold.

I am disappointed that the Opposition have not welcomed entrepreneurs such as Stagecoach which has been highly successful. The services that it has provided in both the south and the north of England and in Scotland demonstrate that it is able to provide excellent services at reasonable fares. We are after good bus services and cheap fares.

Despite the Opposition's arguments, the Bill provides that the pensions of those who work for the Scottish Transport Group will be protected. The employees have nothing to fear from the Bill.

The Government's attitude towards CalMac and the islands is right. The islands need better services. Most Scottish Members have visited the islands, and we want to be able to visit them in future from time to time. The ferry services leave much to be desired, especially in their frequency. Those who wish to visit Rhum because they are interested in nature conservancy—the service also serves Eigg and Canna as well—find that it is difficult to make the round trip during the tourist season. They have insufficient time on the island if they want to return to Mallaig the same day, or even the next day. The better the services that we can provide for the islands, the better the opportunity that we shall have to develop the tourist industry.

All in all, I certainly welcome the Bill. As I have said before, I congratulate my hon. Friend the Minister on the way in which he has taken it through this House, and I wish it well in another place.

9.35 pm
Mr. Robert Hughes

I shall be brief because I know that many of hon. Friends wish to speak, but it would be uncivil of me if I did not thank the Minister for having acceped my amendment to delete "may" and "insert" shall". It is the only amendment that has been accepted. Indeed, in Committee I spent hours trying to persuade the Minister. Lo and behold, in my absence, without my having offered a word, he accepted it. That must say something about the power of my advocacy. Perhaps I had better not set out to seek my living in the law.

I hope that when the Bill goes to another place the Minister will reflect on some things we have argued about—the need to protect property rights; the need for consumer protection; and the right of workers to some say in the control of their own destiny, which, patently, the Bill, as it leaves this place, does not provide. I hope that the Amendment Paper in another place will not be flooded with amendments that might properly have been tabled for discussion here.

One of the difficulties that we have had with the Bill is that it is an enabling measure. There is little of substance in it very little detail by which we can judge how it is going to work. It seems to me that the absolute, prime points of inconsistency occur in clause 4, subsection (1) of which says: Without prejudice to any powers conferred on them by or under any other enactment, the Group shall have power to do, in such manner as they think fit, any thing required in pursuance of the disposal programme."— blanket power for the Scottish Transport Group to do as it likes. Then we look with some astonishment at clause 4(2): The Group shall not exercise their powers under subsection (1) above in relation to any disposal required in pursuance of the disposal programme except with the consent of the Secretary of State"— exactly the opposite. It is worth repeating what I quoted in Committee: The Lord gave, and the Lord hath taken away". This shows the difficulty we have, so far as the future is concerned, in trying to deal with this legislation.

We are very seriously concerned about the issue of property stripping. My hon. Friend the Member for Cunninghame, North (Mr. Wilson) voiced our concerns very eloquently and in some detail. The Minister gave a hint that he might seriously think again. He said that there was an option available to the Government that would have to be considered. The option is to have in the contract a clause to the effect that if money were made as a result of the sale of property for development—for speculative purposes—a proportion of it would accrue to the Secretary of State. That is not entirely satisfactory. It would be much better if any development moneys made in that way were to go to the people who work in the industry. If the Minister is looking at options, he should consider making a proportion of any speculative gain available, in the form of a bonus payment, to those who have worked in the industry all their lives. That would not satisfy us entirely, but it would at least be a move in the right direction and would be a means of giving some credence to the people who built up these companies and created the possibility of their becoming viable concerns.

No Opposition Member likes the idea of privatisation. We do not think that the Bill will succeed in its aims and intentions. We think that the service will suffer as a result. But I certainly hope that the employee buy-outs—the different employee participation schemes—will succeed, and I hope that they will be widespread. That would be some saving grace. I would certainly give those a fair wind. A lot rests on them—the interests of the employees, and the interests of the consumers—and I hope that the Minister will look very seriously before the Bill proceeds further at the very strong points that we have made and that he will accept more than one amendment.

9.39 pm

It seems from part I that employee buy-outs will get short shrift, and that we will have a choice between a management buy-out and a company which has been encouraged to buy out a bus company. In other spheres of privatisation, employees of public utilities or state-owned organisations have been given an opportunity to negotiate with the potential buyer. The Norwegian firm, Kvaerner, was encouraged to negotiate with the work force at Govan before it acquired that yard. The Government encouraged it to negotiate. The work force decided democratically to accept the Norwegian bid, and it went ahead.

With the sale of Clark Kincaid by British Shipbuilders at East Hamilton street, Greenock, the work force, following negotiations with the would-be purchaser—Mr. Bill Scott—voted overwhelmingly to accept the terms and conditions of employment offered by the new owner. I am simply asking that a similar pattern of negotiation be adopted in part I. Following negotiations, which were led on the employees' side by Councillor Robert Jackson and John Quigley, the work force at Clark Kincaid accepted, with few dissentients, the deal that they negotiated with the new owners.

At the moment, there are negotiations involving the privatisation of Fergusons at Port Glasgow. The would-be purchaser is Ailsa-Perth of Troon. When put to the work force, the initial offer was overwhelmingly rejected in a most democratic way—by a secret ballot which conformed in every way to the Government's legislative provisions. Almost 400 men and women voted on the initial offer, and only five voted to accept it. The would-be buyer has been told by British Shipbuilders to make a fresh offer which presumably must include an improved package of terms and conditions of employment.

Before bus companies such as that in my constituency are sold, employees should be consulted. Employees should be treated as employees of British Shipbuilders in Scotland and south of the border have been treated.

I sincerely hope that the new board of Caledonian MacBrayne will place orders with Scottish shipyards. I am pleased to see the Secretary of State in his place. I said earlier that a CalMac ferry is to be launched from the Ferguson yard in Port Glasgow in about two weeks' time by a member of the right hoe. and learned Gentleman's family. I hope to be at the launch and that the right hon. and learned Gentleman will be there, too. I have no doubt that there will be employees at the yard who are anxious to say a thing or two to him—in a most courteous way —about the sale of CalMac. They are a very courteous lot on the lower Clyde, as the right hon. and learned Gentleman knows.

I look forward to the day when the Secretary of State orders and launches a series of ships built for Caledonian MacBrayne by the work force in Port Glasgow and the equally skilled work force in Aberdeen.

9.44 pm
Mr. Tony Worthington (Clydebank and Milngavie)

The theme behind the Bill was uttered by the Minister earlier. It is the belief that competition, which is what the Bill is said to be about, leads to efficiency. That is sometimes true. Opposition Members recognise that there are occasions when competition leads to efficiency. However, it does not inevitably do so. This weekend, Mr. Frank Bruno and Mr. Mike Tyson will be joined in competition but it will certainly not lead to efficiency. It will lead to one or the other being in a comatose state. In fact, some Conservative Members seem to be previewing the Tyson-Bruno fight.

As I said in Committee, the weakness of the Government's argument is that in order to stimulate competition they bring into play actors whose sole aim is to eliminate competition and to ensure a monopoly for themselves. By and large, that is what has occurred. The consequence of bus deregulation is that there is less competition this year than last year and there will be less competition next year than this year.

The method by which those who are involved in the alleged competition seek to achieve profits is by eliminating competition. There may be economy or efficiency for a while, but the aim is to eliminate competition, particularly in large parts of Scotland where the traffic on the routes is not such as to be able to sustain competition and where there is enough business only for one supplier. It would be far better for that supplier to be a public provider than a private one.

Mrs. Teresa Gorman (Billericay)



My words have reached Billericay.

Mrs. Gorman

Does the hon. Gentleman agree that, although competition might not breed efficiency, monopoly, particularly state monopoly, almost inevitably breeds inefficiency?

Mr. Worthington

I am delighted to hear the assurance from the hon. Lady that competition does not automatically lead to efficiency. Those wise words have been signally absent from the Minister's contribution. It is something we have to take into account.

The hon. Member for Dumfries (Sir H. Monro) and other hon. Members have pointed to the contribution that has been made by minibuses since deregulation. I am sorry that the hon. Member for Dumfries has acquired a minibus only in the past couple of years. Under the regionally provided services in Strathclyde, all the innovations that have been attributed to deregulation have been present for a number of years. I cannot think of any innovation that has occurred within the region since deregulation.

Competition is often followed by a neglect of those things that are crucial to the public provision of transport, such as safety. We should have perhaps spent more time on the consequences of deregulation in terms of the standard of buses, which has visibly declined. There is no longer the same commitment to a modern fleet and one wonders what the breakdown rates are. Therefore, as I have said, competition does not inevitably lead to efficiency.

What has been missing from the Government's perception is that transport is not simply a means of travelling from A to B. Transport is a means by which communities are linked, families are linked and friendships are allowed to occur. That consideration has been missing and the Government have shown collectively over the past few years a great dishonesty about transport. They have said that it is always open to regional councils to provide transport where it is socially necessary.

There are two problems about that. The Government say that it is up to the regional council to provide the subsidy but the Government also say that regional councils are spending too much on all their services, including transport. The Minister should acknowledge that it is the view of the Scottish Office that far too much money is spent by regional authorities on the maintenance of concessionary fares. It would be honest of the Government if the Minister said that it is their intention and hope that regional councils will lessen their commitment to concessionary fares. We hope for such honesty. The Government have been saying dishonestly that regional councils should support socially necessary fares. In recent years, the Government have introduced the poll tax and in doing so they have taken control of 80 per cent. of local government expenditure. That will make it increasingly more difficult for regional councils to sustain socially necessary services.

I hope that, although so many powers will be given to the Secretary of State by this enabling legislation, a means will be found by which we can keep an eye on what happens. I do not share the Minister's optimism that employee-management buy-outs will figure commonly. I do not share the Minister's optimism that locally based companies will be formed and will survive. What will occur over the next 10 years is a process whereby private monopoly establishes an inefficient stranglehold on route after route in Scotland.

9.53 pm
Mr. Calum Macdonald (Western Isles)

First, I must apologise for not being here earlier. I was at a funeral in my constituency. I understand that earlier the hon. Member for Argyll and Bute (Mrs. Michie) said that I might be in favour of moving the headquarters of CalMac from Gourock to Stornoway. As I made clear in Committee, I would not be in favour of such a move if it led to the removal of jobs and to upheaval of the community in Gourock, in the constituency of my hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham). I want to put that on record.

I realise that time is marching on, but I want to pick up one point from the Minister's remarks. He described the Government as being absolutely committed to the lifeline services to the islands. I recall in Committee the Minister extolling the proud and historic name of Caledonian MacBrayne. I asked then why, in that case, it was ever in the Government's mind to change the historic name to that of Sealink or P and 0. There is no doubt that that was the Government's intention earlier this year. They intended to privatise Caledonian MacBrayne. Opposition Members pointed out something that the Government had not yet realised—that to privatise Caledonian MacBrayne would be to lose vast sums of investment and subsidies coming from the EEC. When the Opposition pointed that out, the Government had to go back and look again at their plans. Although they had been trying for some months to find a way round the obstacle of most of the money coming from the EEC, they could not do so. That is why Caledonian MacBrayne has not been privatised under the Bill. It is not because of the Government's commitment to those lifeline services but simply because they could not find a way around the problem of the potential loss of money from the EEC.

The great danger presented by the Bill is that it still holds the potential for further—creeping—privatisation of Caledonian MacBrayne services. We fear that, should the EEC become less generous to the lifeline services to the islands, the Government will take that as a cue to proceed with their preferred option of privatisation. Any such move would be fiercely resisted, not just by myself but by local councils and communities throughout the highlands and islands which rely on those ferry services.

My hon. Friend the Member for Cunninghame, North (Mr. Wilson) said that there had been no demonstrations in the streets demanding a Scottish transport Bill, and indeed there were not. However, there were demonstrations in the islands against any potential privatisations and there would be again if the threat of the privatisation of Caledonian MacBrayne recurred. The Minister should take heed of that and abandon now any intention of reintroducing the privatisation of the ferry services.

9.56 pm
Sir Nicholas Fairbairn

I shall comment briefly on some of the comments made by Opposition Members. First, however, I congratulate my hon. Friend the Minister on his masterly conduct of the Bill.

The Opposition have said that the present system of nationalised bus routes is a source of community spirit and a method of sustaining friendship. A variety of other phrases were also used. If there is one thing of which we are certain in the rural communities of Scotland, it is that the bus routes as organised by the regional authorities under their present structure do the opposite.

It has been interesting that the Opposition have consistently had to shift their ground because they could not accommodate the desires of those who work in organisations such as Strathtay. Those people have been actively pursuing a policy of attempting to take over and run the organisations themselves to the extent that they have been shedding their wages and putting them into an account in order to bid for and take over the services which they are anxious to see serving people and which at present they recognise are not serving people. What could be a better litmus test of public feeling than that?

Opposition Members have had to retreat from what they would like to call the "workers'" interest to the consumers' interest. Those who want to take over the buses and who presently drive the buses or run the service are interested in the passengers. I assume that in Labour terms passengers are consumers, but I call them passengers because I do not know anybody who consumes buses. It is important that the people who work on the buses, who run the buses and who know the people who travel on them want to take over the buses in private organisations for the benefit of those who travel on them. That seems an argument on which the Opposition have been completely defeated. Now that the people of Scotland are to be able to take over their own buses, the Opposition's argument is thoroughly defeated.

Mr. Wilson

Before the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn) works himself up into a too satanic and demonic condition, in view of his certainty about the wishes of the people who work in the bus industry in Scotland, would he advise the Government to conduct a ballot of workers within the Scottish Bus Group on whether they want to retain the status quo or opt for the Bill?

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