HL Deb 11 July 1989 vol 510 cc144-7

6.6 p.m.

The Minister of State, Scottish Office (Lord Sanderson of Bowden)

My Lords, I beg to move that the Report be now received.

Moved, That the Report be now received—(Lord Sanderson of Bowden.)

Lord Carmichael of Kelvingrove

My Lords, although there are no amendments tabled at this stage of the Bill, I feel that I must take this opportunity to re-emphasise the very genuine worries expressed by a number of noble Lords in Committee. Your Lordships may remember that the noble Earl, Lord Perth, who is held in high esteem when he speaks in this House, was most uneasy about the possibility of asset stripping. The noble Lord, Lord Tordoff, speaking on behalf of the Liberal Democrats, was even more concerned that the Bill could be a charter for very lucrative asset stripping.

In Committee we discussed three related amendments together. I believe that the Minister satisfied us that, however much of a longstop it may be regarding one company buying into a number of different sections of the bus industry, at least the Monopolies and Mergers Commission exists to give some protection against multiple buying which would destroy the whole concept which the Government believe to be the basis of the Bill; namely, to encourage competition.

I believe that at least machinery exists to help if the bringing together of the bus industry got out of hand. However, I suggest that no such machinery exists to protect the public purse from asset strippers. Our amendments sought to have a longstop provided so that sale of assets—perhaps particularly lucrative city centre based parts of the bus industry in Scotland—would be referred to the Secretary of State to decide whether or not it was in the public interest to sell off the assets.

The Minister did not accept our amendment but, in fairness, he suggested a number of ways in which the public purse could be protected. He mentioned four examples which I shall not again go through. I had hoped that he would be in a position, following our debate, to report progress on that extremely important issue. I am aware that Committee and Report stages of this Bill are much closer together than is usual. There is nothing unconstitutional about that, but we are used to having two weekends between Committee and Report stages. Therefore I can understand that perhaps the Minister and his department have not had time to examine what was said as well as they normally would.

However, the Minister made one point which we all felt could help; namely, that the Scottish transport group had appointed property advisers to give some valuation of the property so that, on a bid for it, everybody would be aware of the value of the property involved as against the transport running side of the business. The Minister said that the Secretary of State would also be appointing a property adviser.

The purpose of my intervention is to ask the Minister whether any progress has been made in this field or whether he expects any progress will be made before we reach a further stage of the Bill. I have deliberately raised the matter again because I should like it clearly in the public domain. We are concerned about the possibility of asset stripping so that, should it happen, we will be able to alert the public to it and perhaps, in the nicest possible way, gently remind the Minister of his promises.

Lord Tordoff

My Lords, I should like to add a voice from these Benches in support of the noble Lord, Lord Carmichael. I said at the previous stage that the Minister had gone some way to reassuring us, and the noble Lord, Lord Carmichael, has reiterated that point. Nevertheless, this is a serious matter and one upon which I am sure the general public wants some reassurance that public assets are not being stripped off to fill the coffers of the new undertakings, almost regardless of who their property belongs to, whether it is a management/ employee buy-out or an existing transport company.

We are asking whether the Minister can find some words that will underline what he said previously and, if possible, strengthen the safeguards that the Government believe are already built into the Bill.

The Earl of Perth

My Lords, since the noble Lord, Lord Carmichael, has mentioned my name, I should like to repeat that it would be very good if the Minister could further reassure us. It might be possible to do so at a later stage. In the meantime, we have his words that the Government are going to take mighty good care that nothing goes wrong in the way of assets being sold to the loss of the public good.

Lord Sanderson of Bowden

My Lords, I am grateful to noble Lords who have taken part in this brief exchange. The noble Lord, Lord Carmichael, expressed concern, as he did at the previous stage and as two other noble Lords have done, about the disposal of properties. The possibiliy of asset stripping was uppermost in your Lordships' minds.

I have already assured the House in earlier proceedings that we are very much alive to the need to avoid substantial profits being made on re-sales of property after privatisation. Reference was made at the last stage of the Bill to the case of the sale of the Hampshire Bus Company to Stagecoach and the very large profit which was made by Stagecoach when it resold the Southampton bus station. I understand that such problems arose only rarely in the National Bus Company privatisation, but I assure noble Lords that we are well aware that there are no grounds for complacency in this matter. We have learned from the NBC's experience. We shall be examining, with the Scottish Transport Group, the best arrangements for the disposal of all property held by the Scottish Bus Group.

In this connection the Scottish Transport Group's property advisers—Ryden's—is currently examining the properties concerned to establish valuations and to identify those properties where there may be significant development value in an alternative use which would be higher than the value in their current bus operational use. It will also be advising on how particular properties should be dealt with at the time of sale. My right honourable friend, the Secretary of State for Scotland will also be appointing property advisers to advise him on the recommendations made with regard to the proposed treatment of properties by the STG and its advisers. The purpose of this is to ensure that all aspects of property disposals are thoroughly examined.

I cannot anticipate the details or this advice on properties, but there are clearly a number of city centre properties which will require particularly careful consideration because of their potential development value. Properties held by subsidiaries of the Scottish Bus Group which fall into this category include the bus depots on New Street, Edinburgh, and at Motherwell and Greenock. I am sure that the noble Lord, Lord Carmichael, would like to hear about St Andrew's Square bus station, Edinburgh, and Buchanan bus station in Glasgow which are owned centrally by the Scottish Transport Group; in the latter case on land held on a long lease from Glasgow District Council. These two sites are clearly likely to have substantial development value and special arrangements will be necessary with regard to their disposal.

I remind the House that there are a number of options, to which I referred at an earlier stage, for dealing with property disposals so as to obtain satisfactory sale proceeds and avoid asset stripping. I will not repeat those options. They are on the record and clearly described. Decisions will be made on the best arrangements for the disposal of properties before companies are offered for sale. Where special treatment is to be given to particular properties which are to be included in the sale of a company, the details will be set out in the documents relating to the offer for sale of the company. All prospective purchasers will thus be bidding for a company on the same basis. Those properties which are to be sold on their own will be the subject of separate offers for sale. Alternatively, it may be appropriate for some properties to be included as part of a portfolio of properties to be sold as such.

No detailed decisions have yet been made on these matters pending the advice of the STG's and the Secretary of State's property advisers, I have to say to the noble Lord, Lord Carmichael, that this will not take place before the passage of the Bill through this Chamber. The general arrangements regarding the disposal of properties will be set out in the statutory disposal programme. The detailed arrangements regarding particular properties will, as I have said, be set out at the time companies are offered for sale. I have explained the arrangements regarding properties. The detailed arrangements will be decided in the light of the disposal programme made after the legislation is enacted.

As a final word of comfort to noble Lords who have taken part in this discussion, no disposals can take place without the consent of the Secretary of State. This will apply to properties, as with other assets, of the bus companies. I take very seriously the points made by all noble Lords who have spoken on this matter. It will be seen from our response that we are very alive to the dangers which can transpire if asset stripping, as it has come to be known, takes place.

Lord Carmichael of Kelvingrove

My Lords, I should like to thank the Minister for his reassuring statement. The four points which, for reasons of time, he decided not to reiterate give us as much reassurance as we could expect, given our general disagreement over the Bill.

On Question, Motion agreed to.

Report received.