HC Deb 13 December 1995 vol 268 cc1071-82

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ottaway]

8.33 pm
Mr. Gordon Prentice (Pendle)

I am grateful for the opportunity to raise an issue which is of great concern to my constituents and also to those of my friend, the hon. Member for Burnley (Mr. Pike), who is present.

In one sense the debate has been placed in context and is nicely framed by the report of the Select Committee on Transport, entitled "The Consequences of Bus Deregulation", which was published today. The Committee makes a number of recommendations that I wholeheartedly endorse. It has recommended that the Government should undertake

an urgent review…for the disposal of the remaining municipal undertakings. That is germane to the subject of the debate. The Committee considers

the present means of regulating competition in the bus industry through the OFT"— the Office of Fair Trading—

is unsatisfactory and needs to be changed. I agree. It goes on to recommend that a

specialist regulator be created for the bus industry"— an Ofbus. I also agree with that.

The Committee also recommends that the Government

should make a statement of policy objectives for buses. When I reflected on that, I found it astonishing that we have not had such a statement from the Government. Perhaps the Minister will refer to that when he replies.

I am expecting quite a lot from the Minister following the article which appeared at the weekend in The Observer under the headline

Norris reins in bus companies. The newspaper reported that the Minister plans to rein in the "cowboy operators" this week. It also reported that new penalties will be introduced for sub-standard services. Apparently, predatory companies will feel the lash from the Government after a decade of free-for-all. I hope that the Minister will enlighten us as to his response to the Select Committee report.

We know from that report and the transport statistics which the Department of Transport published earlier this year that since deregulation the average age of buses has risen dramatically. The Observer reported:

More than a third of Britain's buses are now more than 12 years old. I believe that more like 48 per cent. of buses with more than 33 seats are more than 12 years old. The number of new buses that have been ordered by our bus companies since 1990 has plummeted by 66 per cent. Those are desperate statistics. We now barely have a bus industry to talk about. In 1979, we manufactured 25,531 buses; in 1994, we manufactured a paltry 9,566.

That is the context in which I would like to discuss what is happening in Pendle. In October this year, the local council, which is Liberal-controlled, announced that it intended to sell the municipal bus company, Burnley and Pendle Transport. The company is jointly owned by Pendle and Labour-controlled Burnley. It runs some 90 buses and 16 coaches, and employs about 270 people, including 200 drivers.

If Pendle council cannot persuade Burnley to agree to the sale, the council's stated policy is to sell its 50 per cent. stake and to press ahead on its own. That decision to sell came like a bolt from the blue. There was no mention of the planned sale at the local elections in May this year, which returned a majority Liberal council in Pendle. I have asked myself why it was not an issue.

A leading Liberal councillor, who happens to be an employee of Stagecoach, Mr. Ian Gilhespie, told the Pendle Citizen on 30 November:

The buses were not an issue at the election because it was only after the election that Burnley Council approached Pendle to see what Pendle thought about the idea. That is a preposterous claim, and a complete invention. The idea that Burnley was prompting Pendle to sell its stake in the bus company is ludicrous. I want to put the record straight.

The Price Waterhouse report, which set out the options for Burnley and Pendle Transport, went to both councils on 6 July. It made it perfectly clear what the consultants thought of the respective positions of both councils. The report said:

Burnley Borough Council would prefer to maintain the status quo (ie retain the existing ownership) and Pendle Borough Council would prefer to seek an option which allows it to realise the value inherent in its shareholding. That was the position then and it is the position now. Pendle council wants to sell, but Burnley council, to its credit, is not even prepared to contemplate any sale.

There has been an enormous tidal wave of opposition to the sale, which has dominated the local press since the beginning of October. Some 13,000 local people—a phenomenal number—have signed a petition against the sale, and that has been handed to Pendle's chief executive. That opposition shows the extent of the disquiet felt in the area.

The Liberals constantly trumpet about local democracy and they make a great virtue of it, but I challenge them to put the issue to a local referendum. That would not be impossible. Tower Hamlets, which was a Liberal-controlled council for many years, consulted the people on their preferred level of council tax. If it was good enough to consult on that, why is not it good enough to consult in Pendle on the level of bus services? Why will they not test the views of local people?

The idea of selling our bus company came not just from the Liberal group, but from a small number of people within it. Most of the Liberal councillors were kept in the dark. Why do they want to sell? They just want to get their hands on a valuable capital receipt. Councillor Tony Greaves, who casts a long shadow over this matter, told the press that there was no secret about that. On 9 November, he told the Lancashire Evening Telegraph that Pendle would go ahead and sell its 50 per cent. share in the company "with or without Burnley."

The Liberals want to sell the bus company, but not because it runs at a loss. On the contrary, it turns in a healthy profit, and last year it paid a dividend of £71,000 to each council. Nevertheless, there is tremendous pressure to sell the bus company before 31 March. If that is achieved, the council can get a 75 per cent. capital receipt. If the sale slips beyond 31 March and into the new financial year, the ratio will be just 50:50, with the council able to spend only half on whatever takes its fancy, with the other half being used to repay council debt. There is a race to sell, which could affect the sale price. I hope that the Minister will comment on that.

The Liberal leader of Pendle council, Councillor Alan Davies, claimed loftier motives for the sale. He told the "Town Crier", an excellent publication that circulates in the West Craven area of my constituency:

We will not join the ignorant political abuse that is going on. Up until now, all we have had is the biggest set of false suppositions, emotive distortions and downright lies that I have ever seen from anyone. We will at least tell the truth. He said that they would tell the truth. He then said:

We have decided to consider the sale of Pendle's shares because we believe it could be the best for bus services and passengers, best for the company and its jobs and the best for the council tax payers and residents of Pendle. It is certainly not the best for bus services and passengers, as the Select Committee confirmed in its report. It is also not the view of the Liberals in Eastbourne, which has the distinction of having the first municipal bus company in the country. It is still Liberal-controlled, and the Liberals want to hang on to their local authority bus company.

The company's managing director, David Howard, told me in October:

There is no doubt that generally speaking the ownership of a bus company by a local authority can be seen by the population as being a service provided by local management with appropriate knowledge and identity with the area, who may be more sympathetic to consider service provision than the management of one of the larger bus operating groups remote from the district concerned. That is certainly true.

Councillor Davies told people that the sale would be best for the company and for jobs. That is certainly not the view of the former general manager of the Burnley and Pendle bus company, Mr. Roy Marshall. He was general manager for 12 years from 1974 until his retirement in 1986. With his vast experience, he reached the conclusion that the sale would be detrimental to the employees and to local taxpayers. He said that a takeover by Stagecoach—which is one of four companies bidding for the company—or one of the other private operators could mean cuts in staffing levels and wages, closure of depots and workshops and the cutting of routes and services that do not bring in enough income. That is the reality, as testified by today's Select Committee report.

It was Jim Bowie, the well-respected district secretary of the Transport and General Workers Union, who told the Barnoldswick and Earby Times early last month:

Burnley and Pendle has been one of the most successful municipal bus companies in the county. It has the best people, the best fleet and among the best workers. That is a tribute with which I wish to be associated.

Councillor Davies also said that the sale would be best for the council tax payer. That is absolute nonsense. As I have already explained, the company makes a profit year after year.

The leader of the council said that the Liberals would not trade in abuse, yet his colleague Councillor Tony Greaves is a byword for abuse. He is ungracious, brittle and sour, and he constantly trades insults with people. In fact, he recently called Councillor Colin Waite a thug. The Lancashire Evening Telegraph chided him, saying:

Hurly burly and hot tempered outbursts are the stuff of politics but personal abuse deserves no place in any debate. And unless he cares to understand this and apologise Councillor Greaves need not go out to a public meeting in search of thugs to condemn but could stay at home and look in the mirror. Hear, hear to that.

Since then, there have been threats of legal action by Liberal councillors against the Pendle Labour party. I will not weary the House by going into the detail, as I have already covered it in a recent early-day motion.

To try to retrieve the position, the local Liberal party has been sending out a blizzard of leaflets—some 20,000—setting out the reason for the sale. In the leaflet "The facts about the buses", it poses the question:

If it is sold will services get slashed? It gives the answer:

No. Liberals have always been in the forefront of pressing for good local bus services. The fact is the council will not sell without strong guarantees about services. I tell the Minister that the Liberals will not get those guarantees.

I tabled a clutch of parliamentary questions before the end of the last Session. The Minister wrote to me last month saying:

There were very few cases"— he was referring to previous privatisations—

where the employment terms of the workforce were formally protected—although some purchasers promised that there would be no redundancies for a given (usually quite short) period. In a few instances minimum service levels were stipulated as part of the sale, again for a limited (usually three years) period. There are no guarantees, and the Liberals are kidding people if they think that they can get any covering services and jobs.

Finally, there is the question of what happens when one council wants to sell but the other does not. Again, I raised that matter with the Minister. I do not know whether Burnley and Pendle is unique, but it might well be. The Minister told me that such matters would be considered case by case.

On 1 November, the Lancashire Evening Telegraph indirectly quoted Councillor Tony Greaves as saying that the Secretary of State had already given his informal approval for the sale. I find that absolutely astonishing, and I want the Minister to comment on it.

The Minister has told me previously, in reply to a parliamentary question, that the Government's policy is to legislate to force councils to get rid of their bus companies. However, the Government are running out of time. There is nothing down for this Session to facilitate that. The whole system of deregulation, as the Transport Select Committee report says, needs to be put under the microscope because it is certainly not working.

The industry needs to be re-regulated to protect services, diversity and consumer choice. We need to encourage the Monopolies and Mergers Commission to take vigorous action to prevent anti-competitive behaviour, and the Select Committee agrees. We need to strengthen the powers of the Office of Fair Trading. We need to help municipal bus companies such as Burnley and Pendle to compete effectively, free of the artificial financial restrictions created by Government rules on council-influenced companies.

The incoming Labour Government desperately need to re-regulate the entire bus industry to give local authorities powers to plan and contract sensibly for bus services in their area.

Mr. Peter L. Pike (Burnley)

rose—

Madam Deputy Speaker (Dame Janet Fookes)

Before the hon. Member speaks, may I ascertain that the hon. Member for Pendle (Mr. Prentice) and the Minister agree to him speaking? That is the tradition in an Adjournment debate.

Mr. Gordon Prentice

Yes I do, Deputy Madam Speaker. Forgive me.

The Minister for Transport in London (Mr. Steve Norris)

indicated assent.

8.50 pm
Mr. Peter L. Pike (Burnley)

I am glad that the early start of this debate has given me the chance to make a few brief comments because the debate is very important. I congratulate my hon. Friend the Member for Pendle (Mr. Prentice) on securing the debate, which he has initiated because the council in his constituency has caused a problem.

The transport undertaking in Burnley and Pendle was brought together some 60-odd years ago as—originally—the Burnley, Colne and Nelson joint transport undertaking. It ran in that context until the local government reorganisation of 1974, when it took the new name Burnley and Pendle. Before I became a Member of the House, I was a councillor in the borough of Burnley, where I served on the joint transport committee for a number of years, and therefore have some knowledge of it.

My hon. Friend referred to the Transport Select Committee report, "The Consequences of Bus Deregulation" that has been published today. It is somewhat fortuitous that that report has come out today. I certainly endorse my hon. Friend's comments and echo his full support for the points that he highlighted.

My hon. Friend referred to the guarantees that are said to be being given by some of those who are bidding to buy the Pendle shares in the Burnley and Pendle joint transport undertaking. I emphasise "the Pendle shares" because there is no doubt that the Burnley shares are not for sale. Indeed, we hope that we can persuade Pendle to think again and not sell those shares.

Pendle Liberals, and those who are inclined to support the sale in that borough, need to think twice on two particular points. First, the petition has clearly shown that the public are strongly opposed to the proposed sale. Secondly, as my hon. Friend said, the Liberals and their supporters should know that guarantees given now are not worth the paper that they are written on.

Certainly in Burnley we all know that when the Burnley building society was taken over by the National and Provincial building society—in the early 1980s it was called a merger—certain undertakings were given. Those undertakings were guaranteed in a letter sent out by the then chairman of the Burnley building society. All the undertakings given, including those that said that one third of head office jobs would remain in Burnley and that Burnley's name would appear in every office of the National and Provincial building society, were not honoured for very long at all.

Now there are no head office jobs in Burnley, and only a computer that may well go when the society is taken over by Abbey National plc. We do not even have a regional office. We know that, if any shares are sold with regard to the transport undertaking, the same thing will happen—and we will lose services.

One thing that people in Pendle have to understand is that while the profit of the Burnley and Pendle company is shared 50:50 between the two boroughs, most of it is in fact made within my borough of Burnley. That is because of the nature and geography of the constituency of Pendle. It is more rural, and has a scattered population, and services do not very easily make a profit. My hon. Friend and myself believe that the provision of services are far more important than making profit, but we recognise the context of the Transport Act 1985. I remember that you, Madam Deputy Speaker, were joint Chairman of the Committee on that Bill, along with Madam Speaker when she was a Committee Chairman.

My hon. Friend referred to the former general manager, Mr. Roy Marshall, and his strong view that the sale would be bad for transport and the provision of a public service for the people of Burnley and Pendle. When the joint transport undertaking became a company as a result of 1985 Act, the general manager was Mr. Luddeman, who is currently the manager of London General. Now the manager is Mr. Jelpke. Both those men faced the challenges of the 1985 Act and made Burnley and Pendle transport a very successful and viable undertaking.

I want to refer to the question of who is submitting bids for the company, since we do not really know. We understand that it might be Stagecoach, which took over the former Ribble undertaking. When the 1985 Act went through, Ribble, which was part of the National Bus Company, was split into three. The main part of Ribble, based at Preston, was the subject of a management buy-out and was subsequently acquired by Stagecoach. Indeed, Stagecoach garages some of its buses at the Burnley and Pendle transport depot in Queensgate in my constituency. Ribble used to have a depot in Centenary way, but it closed it a few years ago.

We understand that other potential bidders are Blackpool Bus, First Bus Yorkshire Rider, Greater Manchester Buses (North) and Preston Bus, which is submitting a bid in conjunction with Burnley and Pendle management and employees.

We know for a fact that the Preston Bus bid was considered by a specially appointed Pendle council sub-committee yesterday, but we do not know exactly what happened. We know that Mr. Souter, the multi-millionaire owner of Stagecoach, has already been to the Queensgate depot and met the work force. He has made no secret of the fact that there will be job losses, especially among the managerial, clerical, administrative and mechanical staff. The drivers' position is a little less precarious—in the short term at least. But once the services start to go, so will those jobs. We know that there will be job cuts and service cuts. On 4 December, a letter was sent to the chief executive of Pendle borough council by the chief executive of Burnley borough council, who was trying to ensure that there was no misunderstanding on the part of the Pendle controlling group. The final paragraph of that letter says:

I think it is important that you draw the contents of this letter to the notice of all Members of your Council but particularly to the attention of those who will be involved in the decision to dispose of the shares. It is also important that you draw it to the attention of prospective purchasers as I am not certain that all of them will be aware of Burnley council's position in relation to the sale, the Articles and the replacement of Directors. Burnley feels that Pendle council should know, as should potential purchasers, exactly where Burnley stands. That is why the letter was sent.

Among other things, Burnley has been told that if it does not sell, its 50 per cent. of the shares will not be worth as much as the other 50 per cent., when those are bought. As far as I am concerned, if there are two halves, one owned by the private sector and one by the public sector, instead of the two halves being in the public sector, as at present, the two halves are still equal to one, so if one half share is devalued, the other must be devalued too.

Burnley borough council wrote to Pendle:

I understand that your Council are still considering the disposal of your shares in the Transport Company, that bids have now been submitted and that a decision will be reached following further consideration by a Special Sub-Committee and your Policy Committee. Burnley Borough Council remain completely opposed to any form of sale of the company or the whole or part of its shares and I have been asked to write to you formally to inform you of this position and to ask you to draw the content of this letter to your Members, particularly the Liberal and Conservative Members who are supporting the share sale. We have carried out our own survey of the effect of local authorities disposing of their transport companies and the pattern is all too familiar—job losses amongst both managerial and operational staff; less favourable working conditions; longer working hours; reduced pension arrangements; increased fares; poorer services; loss of less viable and rural services; lengthened 'bus frequencies; and loss of public involvement. This pattern has, I understand, simply been confirmed in a recent discussion which the Chairman of Stagecoach had with company employees when he implied that apart from some of the drivers the job prospects for the remaining workforce, if his company were the successful bidder, were poor. Those are the things that both the public and the employees need to know.

Finally, I shall quote the paragraph that tells potential purchasers exactly where they stand:

I have to tell you that my Council are prepared to take what action is considered necessary to prevent the sale and I am currently discussing various options with my Members. However, I think it would only be fair to draw to your Members' attention the possibility that Burnley council will not feel obliged to co-operate with any purchaser of the Pendle shares in amending the Memorandum and Articles of Association of the company. Similarly, my Members may not feel obliged to approve any nominations which a purchaser may put forward to replace the Pendle Directors with their own nominees. Let the buyer beware. Pendle Liberal council should think again, decide that the sale is not in the best interests of jobs or of transport in its area, and it should not go ahead with that sale. Anyone tempted to buy shares should recognise that Burnley will not co-operate, because we believe that a sale would not be in the interests of Burnley or of Pendle in connection with either employment or transport. The proposal is an absolute outrage.

9.1 pm

The Minister for Transport in London (Mr. Steve Norris)

It has been a pleasure to hear the debate so far. One hesitates to intrude on private grief, but it is a pleasure to witness the spectacle of the hon. Members for Pendle (Mr. Prentice) and for Burnley (Mr. Pike), both Labour men, using the debate to attack their Liberal opponents on local authorities. If I may say so, it has been a commendable performance by both of them, and it is a shame that there is no Liberal Member here to respond. I certainly do not intend to respond on the Liberals' behalf.

First I shall say a word about the Select Committee report. As the hon. Member for Pendle rightly said, it was fortuitous that, with brilliant timing, he chose today for his debate. He must even have anticipated the Select Committee's decision when to publish its report. Then I shall talk about the bus company itself.

I appreciate that it must be difficult for Labour Members to stomach the fact that, in its report, the Select Committee said that it did not wish to turn the clock back to before regulation, or to introduce franchising outside London. It rejected both those propositions, for the simple reason that ideology is one thing, but facts shout louder.

As the House knows, and as is now taken for granted even among such organisations as the Association of Metropolitan Authorities, which, when I last encountered it, was hardly a bastion of Conservatism, the reality is that, over the past 10 years, subsidy has been reduced by 50 per cent. and operating costs by one third, while route mileage has increased by about 27 per cent. There is a general recognition throughout the country that deregulation has been good for services and good for customers.

What the Select Committee and I have recognised—it has been generous enough to acknowledge that I set up the bus working group a year ago precisely to deal with this point—is that we can make the service better still. Everybody recognises that, as the bus is fundamental to any public transport strategy, we must see how we can make it a more attractive mode of transport.

Clearly, we do not want to turn the clock back—as the hon. Members for Pendle and for Burnley wish—to those dreadful days before the 1985 Act which introduced deregulation. I imagine that both hon. Members have impeccable new Labour credentials, but I shall have to examine their records in slightly more detail. I fear that there may be those on the Opposition Front Bench who will not take kindly to this outbreak of the dreaded "S" word, a word which is now to be excised from anything that emerges from Walworth road and about which we are not supposed to speak in the House for fear of offending public sensibilities.

Let me say a word about the Burnley and Pendle bus company. First, I must make it clear that Pendle borough council has not yet asked the Secretary of State for his consent to the proposal to sell its half of the company. I hope that the hon. Member for Pendle will appreciate that, in the circumstances, I cannot respond to some of his comments, because we have not yet received an application.

The hon. Gentleman described the company, and I will not therefore repeat the description. I should point out that, while the company makes a reasonable profit, it is a very static operating profit. The hon. Member for Burnley speculated as to whether it was a unique company. BPT is the last remaining municipal company which is a joint company. It is owned equally by Burnley borough council and Pendle borough council. The articles of association of BPT do not contain any pre-emption rights in favour of either partner and Pendle is entitled to sell its half share in the company independently of its partner.

For all the municipal companies—whether in joint or single ownership—the 1985 Act allows disposal of shares by the local authority owners. This can be done only with the consent of the Secretary of State, who has three basic principles in mind—that the objective should be to promote fair and sustained competition in the bus industry; that a fair market price should be obtained, subject to any small discount that one might allow for a work force buy-out team; and that the new pension arrangements are precisely set out and carefully considered.

Our aim throughout is to ensure that such sales result in the best value for money for the local authority, bearing in mind the state of bus competition locally. Our preference is for a normal open competitive sale. But where it is argued by a local authority that a public announcement of the intention to sell may bring about destabilising competition that could depress the value of the company, we will be prepared to consider agreeing to a private competitive sale. In such cases, local authority vendors have to clear the shortlist of bidders with the Department to ensure that the essential features of a competitive sale are retained.

The Government firmly believe that it is best for these companies to be run by and passed to the private sector. The evidence for that is that there are now only about 20 public sector companies left. The subsidiaries of the National Bus Company, the Scottish Bus Group and London Buses have all been successfully sold off and are now in the private sector. More than 90 per cent. of all bus operations are in the private sector. Frankly, we think that, if the remaining companies are sold, they will be more efficient operations, spurred on by private ownership and the need to generate profits. They will be more responsive to the needs of passengers and will be able to demonstrate that they are not receiving favourable treatment from their owners.

The companies will also have access to long-term private sector finance. It is now rapidly becoming evident that, far from any investment shortfall, investment in the bus industry is now extremely healthy. The hon. Member for Burnley had some rather disparaging things to say about Stagecoach. He neglected the fact that the company has just ordered 1,000 new buses. Other larger operators are also now ordering hundreds of new buses. The process of deregulation has introduced tremendous diversity into the bus market. Minibuses, midibuses and other essential design features are now commonplace. These have been pioneered in the new deregulated environment.

That has occurred because the companies have been freed from the interference of the owning local authority, and freed from the restriction that they cannot carry out activities beyond their pre-1986 operation. In other words, private companies can diversify into other areas.

There is a further incentive to local authorities to sell the bus companies. If assets are sold before 31 March 1996, local authorities will be able to devote 75 per cent. of the proceeds to local projects, such as improvements in public transport. The spending of the proceeds can, of course, take place after that date. For sales that take place after 31 March 1996, however, 50 per cent. of the proceeds will again have to be used for the reduction of debt in the traditional way.

Mr. Gordon Prentice

Is not the existence of the 31 March deadline likely to depress the price which private sector companies will offer, because they know that the percentage that can be applied will go down from 75 per cent. to 50 per cent?

Mr. Norris

As the number of bus companies remaining in the public sector dwindles ever more, the circumstances in which the owners of those companies approach the market are likely to be less attractive for a variety of reasons. That is a further incentive for local authorities to accept the clear commercial reality, the clear operating advantages and the clear advantage to customers which are implicit in selling those operations while there is a market.

I imagine that purchasers are, indeed, aware of the capital rules surrounding sales, but if the local authority is sufficiently vigorous in prosecuting its ambitions to sell, it will be able to obtain a fair price with or without the additional proportion of proceeds which they can spend on public transport. As the hon. Gentleman knows, the difference after 31 March will simply be that the balance of the proceeds will have to be used for debt reduction and will not be available for current spending.

The local authority vendor has imposed conditions on the sale in almost all the cases in which a municipal bus company has been sold. I shall not list the companies in detail, but suffice it to say that the conditions were of varying complexity and duration depending on the importance given to them by the vendor. Standard concessions have often dealt with the assets of the company, such as property, so that any subsequent excess profits in the event of an on-going sale could be shared, usually on a 10-year reducing taper, with the vendor.

As for employment terms, some purchasers gave promises that there would be no new redundancies for a given, often quite short, period. In a few instances, minimum service levels were stipulated as part of the sale—again for a limited period, generally of about three years. I should emphasise that that sort of covenant is essentially a matter for the local authority and the purchaser.

The Secretary of State's concern when deciding whether to consent to the terms of a sale is confined to ensuring that the purchaser does not take on such onerous conditions that it will fetter the purchaser's ability to react in a commercial way should market conditions in the area change. The Secretary of State also examines the purchaser's arrangements to cover the pension rights of employees of municipal bus companies when considering whether to give consent to a sale.

I have outlined the general principles. I should now like to return to the particular case in Lancashire. Pendle wishes to sell; Burnley does not wish to sell. Burnley, as the hon. Member for Burnley said, is furthermore firmly opposed to the proposed sale of Pendle's half of the company. As we understand the present position, Pendle has invited expressions of interest and is currently having indicative bids professionally analysed. I should say nothing further on that issue, for reasons of straightforward commercial confidentiality. We have received requests in the past for part-sales of municipal companies, varying from as little as 10 per cent. upwards. We normally see no advantage in part-sales, first, because it is difficult to determine the true value of part of a company. The second reason is that, where the buyer also runs bus services in the area, the buyer is effectively getting in return for payment of only part of the company's value a guarantee that there will be no competition. There may also be a loss when the rest of the company is sold. Those points in a way reiterate what the hon. Member for Burnley said.

Despite those reservations about part-sales, however, I have every sympathy for a local authority which is willing and keen to withdraw from involvement in its bus company. I recognise that Burnley and Pendle is a unique company and that it is in a unique situation.

Under section 75 of the Transport Act 1985, the Secretary of State will consider each sale on its merits and take account of the different circumstances which prevail in each case. The Secretary of State is bound to look at every proposal that is put to him. I can confirm to the House that he will do so in this case. We shall take account of the fact that Burnley is opposed to the sale, and we have told them that we shall take account specifically of that view in considering any proposals that may be made by Pendle.

A number of options are available to Pendle borough council, but it is the council that has not yet decided what to do, and, as I have said, it has not yet asked us for consent. If and when it does, my right hon. Friend the Secretary of State will make a decision on the merits of the case. I hope that the hon. Member for Pendle will understand that I cannot comment further until he makes that decision.

Question put and agreed to.

Adjourned accordingly at fourteen minutes past Nine o'clock.