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companies and that the only way of achieving that is by guaranteeing genuine preference to management-employee group bids such as in Strathtay and Tayside.

My hon. Friend the Member for Cunninghame, North (Mr. Wilson) made it clear that the Bill pays lip service to that concept, in the hope that the Government will be able to clothe what it is that they are really about with a measure of credibility. However, in a free market environment, without providing genuine safeguards against predators from elsewhere, the Bill can have no credibility. It represents a sell-out of the interests of the Scottish people and of the Scottish bus industry, and it should be opposed by every right hon. and hon. Member who is against such a sell-out being enforced against their wishes.

9.8 pm

Mr. Bill Walker (Tayside, North) : I congratulate the hon. Member for Dundee, East (Mr. McAllion) on a thoughtful speech that clearly conveyed to me his genuine concern about what may happen. I accept that he is genuinely concerned, and it may surprise him to learn that in some respects, his views and mine are not very far apart. I contrast the quality of his speech with the appalling contribution by his hon. Friend the Member for Cunninghame, North (Mr. Wilson). At this point, I must declare an interest. I have been talking to the Strathtay people. Neil Renilson, the director and general manager, happens to be a constituent of mine. I have conducted meetings with him and the employees and we have gone, fairly extensively, through their concerns. I have been interested in the genuine feeling among employees of wishing to become at least part-owners of the new company in future. That is very encouraging because I, like the hon. Member for Dundee, East believe that if there is to be competition on Tayside, we should not be served well if Strathtay were taken over by Stagecoach.

Incidentally, I have also been involved in meetings with Brian Soutar and Anne Gloag. The comments made by the hon. Member for Cunninghame, North were way off the mark and he was using parliamentary privilege from the Opposition Front Bench, unlike his hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), who is very careful about what he does on the Front Bench. He is never slow to criticise properly what he does not agree with and he is never slow in putting forward his views, but he does not use parliamentary privilege to name people in matters on which the depth of his knowledge is obviously so scarce and superficial that it can be very damaging. All that the hon. Member for Cunninghame, North had to say was a quote by a manager who did not work for Stagecoach, and that is appalling.

Stagecoach is a Scottish company and a big employer, which also employs many people in England. More importantly, it has operations based in my constituency, where the two directors live and work. I found it interesting that the hon. Gentleman brought up the old horny myth of Canadian money. If he had bothered to do any research, he would have discovered that the so- called Canadian money came in an initial loan from an uncle. There is nothing odd about that and the loan has long since been repaid.

That is an important point and I find it disturbing that the hon. Gentleman's comments suggested that

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Stagecoach was somehow unfit to be a good employer. Is the hon. Gentleman aware that, at this very moment, negotiations are at an advanced stage and an employee shareholding scheme for all Stagecoach employees will be announced any day? Such schemes are carried out in enlightened companies and we should encourage them, not criticise them.

I may have views on the difference between the public and private sectors. However, if the hon. Gentleman is an honest man, he must accept that some parts of the public sector are not run as well as he or I might wish. I have been very critical of some aspects of the private sector. You will realise, Mr. Speaker, that I was not slow to say what I felt because I felt strongly about it. That led to prosecutions being brought. If the hon. Gentleman feels strongly about a matter and has hard evidence, he should use that evidence, but he should not use parliamentary privilege as he did.

Mr. Wilson : If the hon. Member for Tayside, North (Mr. Walker) is to continue in this bumptious vein, giving a patronising lecture on parliamentary privilege, will he point out one comment I made that comes within the category he is trying hard to define?

Mr. Walker : When he reads Hansard , the hon. Gentleman will realise that he made such comments. I am also concerned that there are some differences in attitude on the Opposition Front Bench about their basic policy. They tell us on one hand that it is important where a company's headquarters are located, yet the hon. Member for Cunninghame, North then tells us that it does not matter where the headquarters of a particular group are because, after all, that group is at the end of a phone. They cannot have it both ways.

Mr. David Marshall : It is unlike the hon. Gentleman not to respond fully to the questions put to him, and I do not think that he responded fully to the question put to him by my hon. Friend the Member for Cunninghame, North (Mr. Wilson). Can he specify exactly what my hon. Friend said about Stagecoach that involved parliamentary privilege? I thought that my hon. Friend merely spoke the truth, and I do not think that anything in his remarks would need to be covered by parliamentary privilege.

Mr. Walker : No doubt the hon. Gentleman will read Hansard tomorrow. I shall invite the hon. Member for Cunninghame, North to repeat outside the Chamber exactly what he said today. I think that that is all I need to say. [ Hon. Members :-- "What did he say?"] Hon. Members can read Hansard tomorrow.

Mr. Hood : Is the hon. Gentleman referring to an implication by my hon. Friend that Stagecoach had been prosecuted? Is the hon. Gentleman aware that the company has been prosecuted on at least three occasions?

Mr. Walker : I did not specify that the company had been prosecuted ; the hon. Member for Cunninghame, North did. He named the directors of Stagecoach and then gave his views and comments. He cited as his source and authority a manager who was not working for Stagecoach. I am merely saying that one should be very careful, and that Front Bench spokesmen have special responsibilities. I was watching the expression on the face of the hon.

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Member for Garscadden while the hon. Member for Cunninghame, North was speaking. But we can deal with these matters when we read Hansard tomorrow.

It is interesting that the hon. Member for Dundee, East and I should share such concerns. It would not be right for Strathtay, for instance, to be purchased by Stagecoach. That would not be good for competition in the hon. Gentleman's constituency or in mine. We should certainly be united in our views on that. If we are to have competition, we must have real competition, and he and I know that we now have competition, with the three large companies. All three companies have served Tayside well and I hope that they will continue to do so.

Too often, the Opposiion have overlooked the fact that this is a unique opportunity for employees to become shareholders in the company in which they work. There is a big difference between being an employee of a locally run, local authority-owned concern or of a nationally run concern owned by the public purse, and being an employee of a private company in which one can improve one's position by constantly improving one's shareholding. Companies operating such schemes find that they aid motivation and the smooth running of the concern.

More important, such a system gives employees a say at the annual general meeting, which someone working for a concern run by the local authority, by the Government or by a quasi-governmental body never has. There is a big difference, and that is why I welcome the statement by my right hon. and learned Friend the Secretary of State that we shall be encouraging employee -management buy-outs and placing emphasis on the employee. I hope that the employee-management buy-outs succeed everywhere, but if they do not, I hope that consideration will be given first to Scottish-based companies and secondly to companies that have an employee shareholding scheme. We shall thus increase employee participation and shareholding, which all hon. Members would want us to do.

I am sure that the people of Scotland will welcome this Bill, just as they have welcomed many other Bills on which the Opposition have voiced doctrinaire objections. More important, the employees in the industry will welcome the benefits that will accrue to them which did not exist under the previous arrangements.

9.19 pm

Mrs. Ray Michie (Argyll and Bute) : If we must have bus privatisation in Scotland, I support the management-employee buy-out option. I believe that it is the only way to ensure commitment and a standard of service. I welcome the Secretary of State's assurance that the Government will assist staff contemplating a bid to obtain professional and financial advice, provided that that is timely. It is crucial that a realistic preference be given to

management-employee bidders rather than to the highest bidder. I hope for something similar to the sale of the National Freight Corporation, which was sold to the employees at a discount.

The Minister referred to consideration for preferences, and mentioned one or two. I urge him to give consideration to a company that is prepared to say that it has a "public service" or "social" commitment to, for example, a less-populated area.

The entire exercise would, I feel, become null and void unless the Secretary of State took residual powers to stop a large predator company from buying up all 11 newly

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privatised companies. Whether the company was Stagecoach, Icarus or any of the others, that would make nonsense of the whole enterprise. Despite what was said by the hon. Member for Cunninghame, North (Mr. Wilson), I consider it important that a Scottish company should be involved, rather than one south of the border.

Alternatively, perhaps the Secretary of State could set up a commission to which any takeover must first be referred. But unless he is able to provide real reassurance the exercise makes no sense. If the aim of privatisation is, as the Bill claims,

"to promote sustained and fair competition",

he must take note of the experience of England and Wales, which has led not to sustained competition but to natural monopolies, with the larger operators buying out the smaller ones and often driving them out of business.

Recent press reports suggest that competition is being affected by price- fixing deals and agreements to end competition. Sir Gordon Borrie, Director -General of Fair Trading, has found 115 cases of firms that are believed to be colluding to restrict competition in the wake of deregulation. Some are said to have arranged timetables to avoid competition, and others have fixed common fares. How will the Secretary of State stop that happening in Scotland?

Can the Minister also give an assurance about bus stations? If the Government's aim to promote competition is genuine, they must ensure that bus stations are not sold to one company. If there is not a station for all to use, the reliability of services is affected. Competing operators must surely be able to use a central base. Mr. Nicholas Bennett rose --

Mrs. Michie : If the hon. Gentleman does not mind, I shall not give way. I have been accused before of giving way too often and then speaking for too long. [Interruption.] No, I will plough on. There is a great fear about the future of rural services. I know that very well from my part of the country. Many people do not have cars and may find themselves isolated--as, indeed, they often do now. They are on the unprofitable routes. What does the Minister advise? If privatisation of the bus company will not improve the service to those people, what is the point? How can the Minister visualise an integrated transport system with bus meeting train, ferry or plane and through-ticketing systems covering the different forms of transport that have to be used on one journey? That will be difficult to achieve with all-round privatisation.

Will the Minister give an assurance that there is no hidden threat to rural railway lines in the north and west of Scotland? It was reported recently in the press that British Rail had produced a document that was supposed to show how routes could become more cost-effective. I am suspicious of that document. It contains a list A and a list B. List B refers to the rural routes of Ayr to Stranraer, Helensburgh to Oban, Helensburgh to Fort William, Aberdeen to Inverness and Inverness to Thurso. Is there some secret strategy to replace those lines with buses and is it all in preparation for the eventual privatisation of the railways?

Obviously, I must say something about Caledonian MacBrayne. I have said before and I say again, quite

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unashamedly, that I welcome any move of the headquarters to Oban. I appreciate that my Scottish Democrat councillor colleagues are concerned about unemployment if the HQ moves, but I hope that the Government would do what they could to alleviate any adverse consequences.

I welcome the causeway to Vatersay. That is excellent news for the many bachelors on the island, where there are very few women left. It was becoming a serious problem because more and more people were leaving that island.

The Secretary of State referred to Uig, a terminal in Skye. The correct pronunciation is "Ooig", not "Yuig". I hope that everyone will note that, because it sounds extremely ugly when it is mispronounced.

The hon. Member for Dumfries (Sir H. Monro) referred to the fact that Caledonian MacBrayne did not have proper timetables and that it was difficult to get to the Isle of Rhum. One reason for that is because there are no people left on the island, except employees of the Nature Conservancy Council, which now owns the island. It is of considerable regret and sadness to me that this island, which used to be populated with Gaelic speakers, can now attract only tourists who come to see our white- tailed sea eagle, which has been brought back to the area, or deer or whatever else, but not the people. The tourists are interested only in the animals and flora. No effort has been made to bring back the people who were cleared out years ago. That is cause for concern.

Caledonian MacBrayne's new board ought to be properly balanced. It should not consist solely of business men, accountants and a token islander. The majority of board members should come from as many islands as possible. They should include those with expertise in running a shipping line or a ferry service. It is essential that the board should genuinely represent the areas that it serves. It should not be peopled by characters who never set foot on a ferry unless they are going to the islands for their summer holiday.

It is wrong to limit the share of the surpluses that can be retained, with the balance having to be repaid to the Secretary of State. If the company does well, it should be allowed to reinvest the surplus, without a consequent loss of subsidy.

The Bill singularly omits to provide any assurance that islanders will be protected from having to bear the full cost of running the service, through increased fare and freight charges. I ask the Minister to think again about the road equivalent tariff--the RET. It works well in Norway, where fares are cheaper than in Scotland. The road equivalent tariff is flexible. Contrary to what the Secretary of State said in his statement a few days ago, a flexible RET system would include a distance element, whereby the longer distance ferry routes would not be penalised. The people in the north and west of Scotland want a flexible RET system.

Mr. William McKelvey (Kilmarnock and Loudoun) : I have listened carefully to the hon. Lady, and what she has said is absolutely correct. Those were the findings of the Select Committee on Scottish Affairs. The reason why these matters are totally overlooked by Conservative Members is because that Committee no longer exists.

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Mrs. Michie : I thank the hon. Gentleman for pointing that out. I should also mention that it had been this Government's intention to introduce the road equivalent tariff, but they walked away from it and discarded it.

It is essential that high standards of safety should be maintained. When a boat comes to the end of its working life, it must be replaced by a new one. We do not want to be fobbed off with second-hand vessels. We have been fobbed off with old rolling stock on the railways. Time and again we were fobbed off with old rolling stock from the midlands. It is absolute rubbish ; it breaks down, day in and day out. We do not want the new Caledonian MacBrayne board to introduce such a policy. As for the buses, without firm guarantees about employee buy-outs, fair competition and opposition to a large private monopoly, the competition exercise will be a complete nonsense.

9.32 pm

Mr. Nicholas Bennett (Pembroke) : I am delighted to take part in this debate on the Bill, especially as I am the joint secretary of the Conservative party's Back-Bench transport committee. I have taken an interest in the bus industry for nearly 30 years. I am a subscriber to the main magazine that is issued for the bus industry, and I am a member of a transport study group. I have taken a great interest in the deregulation and privatisation of bus services in England and Wales and in what has happened in Scotland as a result of deregulation.

I had a feeling of de ja vu as I listened to the speeches of Opposition Members, especially having read the reports of debates on previous transport Bills. It is worth referring to what Opposition Members have said about these transport Bills that were introduced by this Government. There was a debate in 1979 on what became the Transport Act 1980. In that debate, the hon. Member for Glasgow, Shettleston (Mr. Marshall) said :

"In five years' time nothing will remain of the existing public transport system. There will be a substantial loss of jobs in the transport industry."--[ Official Report, 27 November 1979 ; Vol. 974, c. 1218.]

I welcome back to the Chamber the hon. Member for Shettleston. He is in time to hear one of his own quotes. Five years on, far from the industry collapsing, there had been a 40 per cent. increase in patronage of express coaches, fares had fallen sharply and the number of express services had increased. That was the result of the Transport Act 1980.

When he spoke in the debate on what became the Transport Act 1985, the hon. Member for Shettleston had the good grace to admit that he had been mistaken in 1980, but he continued on the basis of a gambler trying double or quits when he said :

"Privatisation will be a disaster for the bus industry."--[ Official Report, 12 February 1985 ; Vol. 73, c. 237.]

We now know what has happened as a result of deregulation. The number of bus miles has increased by 13 per cent. and the number of routes has increased. There are 400 more bus operators and operating costs have been reduced. The Transport and Road Research Laboratory report on the first year said that deregulation of bus services had been an immense success.

When I tried to intervene in the speech of the hon. Member for Argyll and Bute (Mrs. Michie), I did not want to be unhelpful. I wanted to make a point about bus stations. After deregulation, when a bus company tried to bar other operators from using a bus station--I believe

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that it was in Southampton--the Monopolies and Mergers Commission did not allow the ban because our legislation was strong enough to oppose such monopoly. The hon. Lady can rest assured that any bus operator who wishes to use a bus station is entitled as a result of that ruling to use it.

The hon. Lady also mentioned a report in The Guardian of 8 December which said that 36 rail lines face the axe. I also read it and felt some anxiety as it mentioned the Swansea-Milford Haven line. I have tabled a question to my right hon. Friend the Secretary of State for Transport to establish the status of those plans and to see what we can do about them.

When I intervened in the speech of the hon. Member for Cunninghame, North (Mr. Wilson), I mentioned the Bus and Coach Council conference at Eastbourne this year. The theme of the conference was, "Succeeding in the New World" and the magazine Buses for November 1988 reported :

"it was interesting to observe how bus-industry attitudes have changed in that time. Some years ago there was much evidence of concern about the future of a deregulated and privatised industry, but now it was evident that most of the assembled delegates were enjoying the new environment and their new role of entrepreneur. This was reflected particularly in the warm reception given to the new Minister of Transport"--

my hon. Friend the Member for Enfield, Southgate (Mr. Portillo). It is clear that the bus industry has welcomed what has happened as a result of deregulation. It has recognised the exciting new ventures which it has been able to operate because of commercialisation of the market.

Mr. David Marshall : I am grateful to the hon. Gentleman for giving way and flattered that he should take the trouble to read what I said--he must be the only one.

The hon. Gentleman has produced all manner of figures to back up his argument about deregulation, but figures can be used to demonstrate all manner of things. Does he ever go out into the real world and talk to passengers or would-be passengers? My experience is that people do not know when they will get a bus in many areas and where it will take them. In my opinion--it is only that--the situation now is much worse than it was before deregulation. Deregulation has not been an advantage either to the travelling public or to employees in the industry.

Mr. Bennett : The hon. Gentleman cites anecdotal evidence. We can all do that. I also am a bus user. I went recently to Glasgow to study the effects of deregulation.

Mr. Marshall : On a bus?

Mr. Bennett : I went on many buses. Many of them were bought from London Transport and are being operated with conductors. Competition is such in Glasgow that operators now ensure that they have conductors because that is what the public want. They realise that, as a result of deregulation, they now have to compete for the public market and purse.

Mr. McAllion : The hon. Gentleman is trying to make the case that deregulation has been an unmitigated success in terms of increased vehicle mileage, and so on. Does he not realise that in Scotland, in the first year after deregulation, the number of bus passengers fell? The customers were turning from the bus industry in its

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deregulated form. That is the one statistic to which the hon. Gentleman has not referred in trying to defend deregulation.

Mr. Bennett : The hon. Gentleman referred to bus passengers, and, as he knows, bus passenger usage has been falling for many years. However, using the Scottish example specifically, under deregulation there are far more services and far more operators and the passengers' choice has improved.

Let us consider the Scottish example. An article called, "Deregulated ramblings" by Alistair Douglas, published in December 1986, just as deregulation was being introduced, stated : "I am convinced that deregulation will be beneficial to both passengers and operators in the end, but many lessons will have to be learned or relearned on the way But deregulation provides a challenge which will stretch the ingenuity of operators and there are rewards to be won".

That was a fair warning in December 1986.

What has happened in Scotland? If one goes through the pages of the bus industry's largest selling magazine Buses, and looks at the Scottish column, one sees that in May 1987

"the Scottish Traffic Commissioner rejected Strathclyde Regional Council's plea to order a one-third reduction in the number of buses operating in Glasgow city centre. The Region's request had been opposed by the seven subsidiaries of the Scottish Bus Group". They did not want a reduction in the number of buses. The Scottish Bus Group, a nationalised group, wanted that competition and wanted a fair crack of the whip, against the views of the Strathclyde regional council.

Mr. David Marshall : Does the hon. Gentleman agree that Strathclyde regional council was forced to appeal to the traffic commissioner simply because Glasgow city centre had been brought to a standstill by hundreds of buses containing no passengers blocking all the through routes of the city? Some order had to be brought into the chaos that had resulted from deregulation.

Mr. Bennett : The hon. Gentleman may say that, but what did the commissioner say?

"The commissioner's decision was based on the view that the increase in buses operating in the city since last August had not been the cause of severe traffic congestion or additional danger to other road users."

The hon. Gentleman says one thing, but the commissoner says the exact opposite.

Mr. Hood : What about the rural areas?

Mr. Bennett : I shall come to the rural areas in a moment. In July 1987, the Scottish column in Buses magazine stated : "Strathclyde Region have witnessed interesting developments in the provision of bus services, completely unconnected with the tussle between the Scottish bus Group and Strathclyde Buses Ltd, which deregulation has intensified."

It refers to Oban and the introduction of minibuses by Midland Scottish, and continues :

"Further south, the Gourock, Greenock and Port Glasgow area is now the scene of fairly fierce rivalry between a number of operators which has developed since last year."

Turning to more recent editions of Buses. issued this year, the Scottish column states :

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"In the past few months increased competition has been experienced by Central Scottish in the Lanark sub- region of Strathclyde".

Mr. Bill Walker : My hon. Friend will be aware that my constituency covers 2,000 square miles of rural Scotland. Is he also aware that since deregulation something unique has happened? Not only has the service improved, but, more importantly, operators have been prepared to deviate from their routes to serve small hamlets that previously had never had buses.

Mr. Bennett : My hon. Friend makes an excellent point. One of the great advantages of deregulation has been the tremendous increase in the use of minibuses throughout England, Wales and Scotland to serve small communities, visiting council estates that had not had a bus service before. Not only the heavily populated areas of Scotland have experienced increased competition. Inverness has recently witnessed the full effect of deregulation.

The Orkneys are among the most depopulated and under-bussed areas in the United Kingdom. The September 1988 edition of Buses says : "In Orkney, competition which developed on a tendered route in 1986 has continued for almost two years".

Labour Members said in 1985 that that competition would not last long but would collapse as one company took over the others. The article continued :

"a new bus war has just started with three operators having now registered commercial services on one of the main routes." In Orkney--where there cannot be said to be rich pickings--there are three operators.

Mr. Hood rose --

Mr. Bob McTaggart (Glasgow, Central) rose --

Mr. Bennett : There is an embarrassment of riches before me. I shall take the point to be raised by the hon. Member for Clydesdale (Mr. Hood).

Mr. Hood : My problem differs from that of my hon. Friend the Member for Glasgow, Central (Mr. McTaggart). He has too many buses, whereas I have none. My constituency of Clydesdale, covers more than 1,000 square miles. There are rural areas where people are lucky if a bus comes every two or four hours. In parts of my constituency there is a better chance of seeing a Wells Fargo stagecoach than of seeing a Stagecoach bus.

Mr. Bennett : I cannot speak in detail about the hon. Gentleman's constituency. There has been an increase in the number of buses in my rural constituency. During the past few months, in Tenby and Saundersfoot--two of the smaller towns in my constituency--minibuses have been operating in new estates which previously had never seen a bus. Wherever we look, whether in Scotland or in England and Wales, deregulations has produced new ideas, new buses and minibuses.

Mr. Jimmy Dunnachie (Glasgow, Pollok) : Glasgow, Pollock had a fair bus service until deregulation. A tour which used to take half an hour to reach Paisley now takes an hour. Buses used to travel at 10-minute intervals to each part of my area. How can the hon. Gentleman defend what has happened, when people have lost their previous service and now have a lesser one?

Mr. Bennett : The hon. Gentleman says that the buses now visit all sorts of areas. That sounds as though they

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visit streets that were never previously served by buses. The hon. Gentleman knows that I believe in the market. If there is a market for bus services, a commercial, privatised bus service will provide them. Companies are kept in being by attracting customers.

Mr. Dunnachie : On a point of order, Mr. Speaker. The hon. Gentleman says that the bus companies do not have to provide a service to people in the area--

Mr. Speaker : Order. That is not a point of order, although it may be a point of disagreement.

Mr. Bennett : Another interesting statistic has resulted from deregulation and privatisation in England and Wales. The number of vehicles built has increased. In recent years, there have been serious problems with the construction of new vehicles. I am glad to say that, because of privatisation, the number of minibuses built has increased. I pay tribute to the new companies which have come on to the market, especially Optare, which seems to run minibuses all over London as well. According to the latest edition of the bus industry's journal, there has been a large increase in the number of large vehicles built for use by bus services. We are seeing the regeneration of the bus industry throughout the United Kingdom and should welcome that as one way of providing new jobs and new services for the public.

The privatisation of bus companies in England and Wales over the past two or three years--

Mr. Dunnachie : Disaster.

Mr. Bennett : The hon. Gentleman shouts, "Disaster." Of the 46 national bus companies in England and Wales which have been privatised, 26 were sold through management buy-outs.

Let me quote the example of one of those companies, Badgerline, which is a management-employee buy-out. The managing director, Mr. Trevor Smallwood, who is this year's president of the Omnibus Society, said that the Transport Act 1985 had produced competition, efficiency and opportunity. His company has been in the forefront of providing new services and going into towns which previously had a monopoly provision from another operator.

The hon. Member for Cunninghame, North, who has sadly left us, made a speech of-- [Hon. Members :-- "Excellence".] Opposition Members say "excellence". It was excellent from the point of view of those of us who wish to be able to quote in future from the speeches of Front-Bench Opposition Members and provide reasons why people should not vote Labour. The hon. Gentleman spoke about class war. If a Conservative Member spoke about class or race war, he would rightly be hounded out of public life, but, apparently, to wage war against people of a different class is respectable and should be carried on. We shall remember those remarks and ensure that they are quoted in future. The idea that there is something morally correct about waging war on people who happen to be of a different social class is a disgrace and I am surprised that any Labour Member still trots out that 1930s Communist claptrap.

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