§ Mr. Tim Smithasked the Secretary of State for Transport, how he proposes to restructure the National Bus Company before privatisation; and if he will make a statement.
§ Mr. RidleyI have asked the Board of NBC to consider how the local operating companies should be restructured to compete fairly on deregulation and to report to me on that and on options for privatisation. In asking the board to do this, I have made it clear that, subject to parliamentary approval of the necessary legislation, it is the Government's prime objective to achieve deregulation on terms of fair competition.
The next step for NBC is therefore to restructure the local companies so that they can compete fairly on deregulation, without assuming that they will be privatised before that time; though the Government would be glad to see proposals for privatisation under the existing legislation. On deregulation the companies must be able not only to compete fairly and effectively with other operators, but also to do so without cross-subsidy within NBC. I have asked the board to consider whether the policy they have successfully applied to Western National and Midland Red of breaking existing subsidiaries down into smaller units should be extended to other large operating subsidiaries.
The steps to secure fair competition will not, however, dictate the pattern of sale; that will be for the market to decide.
The objectives which the Government wish NBC to pursue under the new regime are as follows:
610Wto handle privatisation so as to increase sustained competition, which is of primary importance;
to proceed as rapidly as possible, compatible with this and with the legislation;
to dispose of NBC operations as going concerns so far as possible;
to offer managers/employees opportunities to acquire the whole or at least a stake in the undertakings for which they work;
with due regard to the other objectives, to maximise the overall proceeds to the Exchequer.