HC Deb 18 April 1988 vol 131 cc368-9W
Mrs. Ray Michie

To ask the Secretary of State for Transport if he will introduce legislation to amend the present statutory provision which results in bus companies being unable to cross-subsidise their more profitable runs with the lossmakers; and if he will make a statement.

Mr. David Mitchell

There is no statutory provision preventing a bus operator from cross-subsidising unprofitable services with profitable ones. But the Government believes that it is wrong to restrict competition in order to facilitate cross-subsidisation. It is better for socially necessary but uneconomic services to be supported openly by local authority subsidy.

Under the Transport Act 1985 local authorities must go out to competitive tender for any socially necessary services which operators are unwilling to provide on a commercial basis. This ensures value for money and the Government have no plans for amending these provisions.