House of Commons Hansard Debates for 14 Dec 1988

The hon. Gentleman went on to say that the Labour party was against competition. We are glad to hear that directly from a Labour Member; they are usually more circumspect. The hon. Member for Glasgow, Garscadden (Mr. Dewar) would not have said anything quite as rash as

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that. We are in favour of competition because the moral arguments are in favour of it. Competition and popular capitalism respond to the market. People want that market, those buses and that service. That service and competition provide for the customer what the state has not been able to provide in the past few years. When 1992 comes, it is likely that European bus operators will have as much right to operate services in the United Kingdom as our operators will have to operate in European markets. We shall then see how well our privatised companies which serve the public are able to take on foreign competition from European operators.

I wish to quote some remarks from members of the Scottish Bus Group. It is interesting to see what Mr. Ian Irwin, chairman of the Scottish Transport Group, says. In The Scotsman of 1 December, he said :

"The interest already shown by the overwhelming majority of staff clearly indicates that they will be very serious contenders for the ownership of these Scottish-based private sector companies." The general manager of Lowland said :

"We are absolutely delighted that Mr. Rifkind has accepted our strong argument that Lowland Scottish should be allowed to stand alone. Now we must convince him that a management-employee buy-out would work."

The general manager of Northern said about privatisation : "I am confident that Northern can go from strength to strength." The general manager of Western and Clydeside said :

"We could be bigger than ever."

The general manager of CityLink said :

"We think we have got a good company and we want it to stay in the current hands."

Even the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) said :

"I am confident workers' buy-out could succeed, for if each member of staff was prepared to commit hard cash to the venture, then that, coupled with the assets like depots and vehicles, would give them a good start in trying to raise the necessary capital."

I end with a quote from a letter of 7 December from the director and general manager of Strathtay to myself. He said :

"The majority of the workforce at Strathtay are very keen to participate in share ownership through the privatisation process. A Savings Scheme ws set up following Mr. Rifkind's announcement in May that Scottish Bus Group was to be privatised, and 60 per cent. of employees are contributing sums ranging from £2--£20 weekly into the fund, which will be used to buy shares if a management-employee buy-out bid is successful."

Mr. Dunnachie : That was to protect jobs.

The letter continues :

"We believe that the objectives of broadening share ownership and developing the enterprise culture will be most effectively served by privatising Scottish Bus Groups Subsidiaries to management/employee buyouts rather than sale to third parties."

Mr. McKelvey : Will the hon. Gentleman give way?

Mr. Bennett : I do not think that the hon. Gentleman can ask me to give way when I am quoting from a letter.

Mr. Dennis Canavan (Falkirk, West) : Give way.

Mr. Bennett : The hon. Member for Falkirk, West (Mr. Canavan) shouts from a sedentary position. As he has not been in his place for most of the debate, I shall not take his advice.

I shall finish quoting what Mr. Renilson wrote :

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"I believe that the privatisation of the Scottish Bus Group presents the Government with an excellent opportunity to genuinely broaden share ownership and change the attitudes of many bus company employees towards private enterprise. It would be a great shame if this opportunity were not exploited to its maximum benefit. In short the important objective is that privatisation allows for employees to become shareholders in the firm for which they directly work. That way the realities of living in a free market world and working for private enterprise business will be realised."

There can be no stronger support for the Bill than from the workers of the Scottish Bus Group, who wish to be privatised, to work for themselves and to provide a better service.

9.57 pm

Mr. Thomas Graham (Renfrew, West and Inverclyde) : I am delighted to have the opportunity to participate in the debate. Whenever a Minister visits my constituency in his ministerial capacity, I find that a week or so afterwards further job losses are announced. There were the job losses at the royal ordnance factory and now we are faced with losses at Caledonian MacBrayne. The deregulation of the bus services in my area has brought a tremendous problem for the rural community that I represent. Bishopton people have written to the Secretary of State for Scotland to ask for an improvement to be made in their bus services. The present services are lamentable. If deregulation is a sign of success, I can assure the House that the folk of Bishopton do not like the service that they are receiving. I find it incredible that folk can welcome the statement that has been made on Caledonian MacBrayne. I represent the area in which its headquarters is located, and I do not welcome it. I recognise that the Secretary of State can introduce privatisation, but it is abysmal that it is suggested that the headquarters should be moved from Gourock to Oban. I note that the hon. Member for Argyll and Bute (Mrs. Michie) is laughing smugly. It seems that she welcomes with open arms, with glee, the proposal to move from Gourock to Oban. She is delighted to see jobs being removed from an area which has some of the highest rates of unemployment in Scotland. It is unfortunate that some hon. Members are welcoming the removal of jobs from an area which is already denuded of employment and lying at the bottom of the pole, as it were.

I can assure the House that there were no discussions with the office workers and head workers of Caledonian MacBrayne. I made an effort to speak to them, however, and I can assure the House that none of them wants to move to Oban. The managing director does not wish to make the move. He believes that the move would be bad commercially and make an unbelievable nonsense of the organisation that Caledonian MacBrayne operates. He says :

"Oban has no staff base. There are communication difficulties and housing shortages in the area."

He thinks that 20 per cent. of the present staff would not agree to move to Oban. I know that none of the staff wants to make the move.

Mr. Wilson : Does my hon. Friend agree that the only way for that to make any sense would be if the Gourock to Dunoon and Wemyss bay to Rothesay routes were excised from the CalMac network? If that is so, does he agree that the hon. Member for Argyll and Bute (Mrs.

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Michie) should take the future of those routes and the interests of her constituents into account instead of simply putting her money on Oban?

Mr. Graham : I agree with my hon. Friend. The folk in Gourock and Inverclyde do not want to see CalMac split up. They want to see it in its entirety serving the islands of Arran, Rothesay and Dunoon. We do not want to see it split up. We believe that Caledonian MacBrayne is a good viable option.

It being Ten o'clock, the debate stood adjourned.

Ordered,

That, at this day's sitting, the Transport (Scotland) Bill may be proceeded with, though opposed, until any hour.-- [Mr.

Heathcoat-Amory.]

Question again proposed, That the Bill be now read a Second time.

Mr. Graham : My constituents do not welcome the Minister's involvement in the constituency. That means job loss after job loss. We also believe that the Caledonian MacBrayne work force has been loyal and has worked very hard to reduce the subsidy and ensure that it serves the islands. The work force gives its wholehearted commitment and dedication to ensuring that the islands receive a proper decent service.

I also remind the Minister that the headquarters contains one of the finest computer services in the country. That installation is one of the largest in the west of Scotland. My hon. Friend the Member for Cunninghame, North (Mr. Wilson) is correct. It is very easy to pick up the phone and contact the headquarters of Caledonian MacBrayne. Caledonian MacBrayne and Gourock offer service which has been there since 1969. CalMac has provided 20 years' service to the people of the islands and there have been no complaints. There are more than 19,000 sq ft of offices and more than 19,000 sq ft of work shops, bakeries, engineering space, catering facilities and other stores, and roughly 75 per cent. of the work force live in my constituency. The company uses local suppliers wherever possible for engineering, office and catering supplies and nearly all the overhaul work on the 31 ships is undertaken on the Clyde and involves local jobs. We are not talking about transferring 100 jobs from my constituency. The Government are threatening far more than 100 jobs.

Caledonian MacBrayne is an integral part of the Gourock area. The area needs the jobs and is desperate for them. We do not need bargaining and we do not need other hon. Members of Parliament jumping on to the weaknesses and backs of unfortunate workers. We are in Scotland to fight for jobs, not to see it denuded of them. When the new board is set up, I believe that it will be the Government's puppet in the same way that the health boards have been. If the board does not have an opportunity to consider the commercial viability of removing from Gourock to Oban. The Gourock office offers much for the success of the Caledonian MacBrayne operation. If the headquarters are moved, the Government will do that to ensure that Caledonian MacBrayne does not operate successfully. If it does not operate successfully, the Government will sell it off to their friends in the private sector, who will strip the assets and do the business. We have had enough of asset stripping with the royal ordnance factories and we shall fight for the jobs. I hope that the Secretary of State will listen to common sense.

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10.5 pm

Mrs. Margaret Ewing (Moray) : I do not intend to speak with as much vehemence as the hon. Member for Renfrew, West and Inverclyde (Mr. Graham), but I wish to raise several points of concern about the Bill.

The Secretary of State laid great emphasis on his belief in viable and sustainable competition and said that 11 units would be established throughout Scotland. He appeared to assume that because there would initially be 11 units providing a great deal of variety, there would be permanent competition based on those units. We fear that the establishment of 11 units will not be a safeguard. The Scottish Bus Group has drawn attention to the English and Welsh examples and we do not hold out much hope that the units will operate in the way that the right hon. and learned Gentleman suggested. The Scottish Bus Group said :

"The National Bus Company was split into 70 operating units which were sold off individually. But in a short time a process of acquisition and expansion led to the emergence of five largish groups The danger is that a similar pattern would emerge in Scotland leading to increasingly competitive bus wars between such groups which would create even stronger commercial logic for the companies not to service the remoter areas."

Our deep concern is that in both the medium and long term, predators will attempt to take over the 11 units so that rather than their providing real competition we will be deprived of any competition. The history of takeovers in Scottish industry is not happy. Many companies were taken over without reference to the Monopolies and Mergers Commission and without concern for the future of the employees. We are concerned that the competitive element should be safeguarded, but there is nothing in the Bill to ensure that that happens.

If there is over-fierce competition and one group wishes to take over another, there will be a concentration on the profitable routes--which are not those in the rural communities. The hon. Member for Renfrew, West and Inverclyde spoke about the difficulties of the people of Bishopton with bus transport since deregulation. I represent villages as remote as Tomintoul and Dufftown, and the problems in my constituency are even more severe. Just as Caledonian MacBrayne is seen as a lifeline to the islands, my constituents and those of other hon. Members representing remote areas see the public service bus as their lifeline. They do not understand why they should suffer because of the Government's ideological stance.

It is important that the elderly and the poor in our rural communities should not be cut off from the basic amenities and facilities that everyone else takes for granted on their doorsteps. They have to travel vast distances to gain access to hospitals and other services. I want to ensure that my constituents are not deprived because of over-concentration on profitable routes within the city communities.

It is all very well for hon. Members to talk about the eventual arrival of minibus services, post bus services and so on, but that is little consolation for those who face major problems and the possibility of further cuts in rail services. It may be that the leaked documents, denied by British Rail, do not show a severe cut in services, but when British Rail begins to talk about cost effectiveness we must question the future for such routes as the Aberdeen to

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Inverness line, which runs through my constituency. There is genuine concern about the Bill's implications for rural communities. The Secretary of State had a great deal of fun talking about the position in Grampian. It is another example of intellectual somersaults in the Scottish Office, where one incident is somehow translated into being ideological support for the Government's activities. For example, the hon. Member for Stirling (Mr. Forsyth) this week took an opinion poll supporting parental involvement to mean support for school boards. [Interruption.]

Madam Deputy Speaker (Miss Betty Boothroyd) : Order. There are a number of conversations going on in the House which show great discourtesy to the hon. Lady.

Mrs. Ewing : Thank you, Madam Deputy Speaker, for drawing the attention of hon. Gentlemen below the Gangway who have just arrived for the debate to the irritation of the noise during this important debate on Scottish legislation.

It involves an intellectual somersault to take what happened in Grampian region as proving that there is ideological support in that region for privatisation of the bus group. A conscious decision was taken by the regional councillors to safeguard the jobs of 600 employees in the area in the face of the likelihood of yet more legislation with which Scotland disagrees being railroaded through the House by hon. Members who do not represent Scottish constituents. The genuine and responsible approach taken by Grampian regional council is done a great disservice by attempts to turn it into praise for the Scottish Office and this legislation.

We are worried about the jobs of people employed in the bus industry, our rural communities and safeguarding the proposed elements of competition. We do not believe that there are enough guarantees in the Bill. We shall certainly be interested to see what happens in Committee, but, because of our basic opposition to the privatisation of the Scottish bus service, we shall vote against the Second Reading.

10.11 pm

Mr. Jimmy Wray (Glasgow, Provan) : To look at the Bill, I would think that the great train robbers wrote it. All it does is pass power to one person--the Secretary of State for Scotland.

Clause 1 gives the Secretary of State power to go in and take over. Clause 2 gives him power to dispose of all the assets. Clause 3 allows him to direct the Scottish Transport Group what to do. Clauses 4 and 5 enable him to transfer the assets wherever he sees fit. The shipping transfer, and even the accounts, are also his

responsibility. Clause 10 gives him the opportunity to guarantee Treasury borrowing.

We are not talking about any chickenfeed. We all know that the Government are sitting like vultures, raping the land and public assets. They are ready to take anything that makes a profit. We are not talking about chicken feed when in 1986 the Scottish Transport Group had a turnover of £180 million. We are talking about a profit of £4.5 million in 1986. Then the Government introduced deregulation. They do not understand the harm that it has done. If they look at the figures hard enough the evidence is clear. The Scottish Transport Group has even stated that, since deregulation in 1987, the £4.5 million profit of

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1986 has been reduced to a loss of £400,000. All the pirates and operators ganged up on it and put a stranglehold on it.

The Secretary of State has been taking advice from no one. How hypocritical his statement was when he said that he was placing an emphasis on the employees. He did not go for advice to the employees. He did not consult them. Who did he go to? Did he go to the Scottish Transport Group which did not want him to break it up? No, he sought the advice of Quayle Munro the merchant bankers, who told him that the only way to make a quick buck was by dividing the group. He was talking in February of this year about splitting it into 10 units, but he has now decided to split it into 11.

In 1984, the Government brought out a White Paper on buses, and deregulation took place in 1986. All the London buses--the scrap buses-- came to Glasgow and people were falling off them in Sauchiehall street. It was impossible to get parts for them. We know of the great private company Kelvin transport, which ended up in the dust bucket with debts of £3 million.

Last week, the Evening Times let us know clearly what the private operators feel about the consumers and commuters ; they refused to come out over the festive season. The Evening Times had an editorial about this, but it did not tell us anything that we did not know. These people thought that they would become millionaires overnight, but when the future of the buses was being discussed, nobody gave any consideration to the poor people from areas such as mine, where there are families with 10 children who see the town only once a month. The mother takes the children on a rota basis because she can afford to take only one or two of them at a time. That is what deregulation brought to the people of Scotland and the people of Glasgow.

We know how bad the situation is. We know that, when the Scottish Transport Users Consultative Committee gave advice to the Government, they did not heed it. The council said that deregulation, and the privatisation of bus groups in Scotland or anywhere else, would not help to improve services. Hundreds of services in Strathclyde have disappeared. All sort of strange tenders came in, and the Strathclyde bus group got its fair share of them. It then had to rescue some of the private operators who could not manage the services that they had won on tender. That is the kind of rubbish results we have had from privatisation, which never brought any good to anybody except the vultures looking for profits. The Scottish Consumer Council advised the Secretaries of State for Scotland and for Transport that services were disappearing, with the result that fewer people were using the buses.

Clauses 4 and 5 set out share schemes for employees, but the Secretary of State for Scotland did not make it clear what percentage of shares employees will get. He did not appear to understand that rural transport suffered badly as a result of deregulation. Will he make any changes when he privatises CalMac? What will happen to the 10,000 employees? Where will they go? What will happen as a result of clause 147? Who will get the big pay-offs and the golden handshakes, and what will be the cost that the taxpayers will have to meet? I hope that, after tonight, the

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Secretary of State will have a rethink, and will bring to a standstill the privatisation of the Scottish people's public assets. 10.19 pm

Mr. Alistair Darling (Edinburgh, Central) : The Scottish Transport Group has its headquarters in my constituency and at the time of deregulation I was chairman of the Lothian region transport committee, so I think that I know something about the subject--more, I suspect, than the hon. Member for Pembroke (Mr. Bennett), who is no longer in the Chamber, having done his duty to the Conservative Whips and made his contribution. Most of his knowledge seems to be gleaned from reading a magazine. It is difficult to find out what it is like waiting for a bus at 11 o'clock at night in Scotland by reading a magazine that is written several hundred miles away.

Deregulation is where all this nonsense started, for it was the essential prerequisite of privatisation. The Government said that it was not, and the more they said that, the more obvious it became to the rest of us, and to the general public, that that was what deregulation was all about. Deregulation enabled bus companies--I use that term to describe former municipal undertakings, as well as Scottish Transport Group undertakings-- to get rid of unprofitable services. There was a mechanism allowing local authorities to subsidise unprofitable routes, and I shall say more about that later.

Under deregulation, the Government deliberately allowed companies to unload unprofitable routes so that on privatisation, they would not be burdened with providing those services. The one ingredient that has been missing at times in the debate, most importantly from Conservative Members, is a definition of what exactly a bus service ought to be. Is it something that provides a social service and transport for people living in the country or is it a business and purely a means of making a profit and looking after shareholders? Therein lies the fundamental difference between the Government and ourselves.

We believe that a bus service should be just that--a service. One of the few points upon which I and the Under-Secretary, the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton), agree--or at least, he agrees about this in private--is that bus services are a service. In my maiden speech, I made the point that, when I was chairman of the transport committee, the hon. Member for Edinburgh, West was a regular caller at my door, asking whether I could do something about this or that bus service, because it had been withdrawn from his constituency. He would say to his constituents, "Isn't this awful? Isn't this terrible?" I believe that he forgot to tell them--I am sure that it was an oversight--that he voted for the very measures that brought about that state of affairs. As the hon. Member knows, deregulation proved a disaster, and had Lothian regional council not been prepared to spend substantial sums keeping unprofitable services on the road, many areas--including several that the hon. Member for Edinburgh, West represents--would have been without bus services. The Secretary of State said that many local authorities are better off. I can tell him that Lothian regional council was spending about £2 million a year more operating the new deregulated system than it spent when it ran the bus services itself. The reason is obvious. Under the old

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system, the surpluses made from the profitable routes were used to keep socially necessary services on the road. Under the new regime, that is not possible and will cause a great deal of difficulty. It is nonsense and hypocritical to say that, just as local authorities are willing to subsidise, and must subsidise, the STG and the former municipal undertakings, they will now be invited to subsidise private operators--who, in some cases, are no better than cowboys--to keep services on the road. The public purse will be raided yet again to keep certain services operating, which is wholly objectionable. When deregulation was introduced, there was a great deal of talk about competition, just as there has been tonight. There was not really much sign of competition, and I shall give the House an example. In Midlothian on one occasion, Eastern Scottish, a Scottish Transport Group subsidiary company, announced that it proposed withdrawing 12 routes. The local authority was left with no option but to put those routes out to tender, because they were all socially necessary and served villages having no other method of transportation, because car ownership was minimal and train services did not exist in most areas.

What happened when the services were put out to tender? Only one company tendered for the services, and that was Eastern Scottish, which had withdrawn the service only two weeks before. In other words, Eastern Scottish asked to be paid by the local authority to provide services that it had not been willing to provide. It had the local authority over a barrel, because no other company was willing to operate those routes. That is what will happen in the event of privatisation. Private companies because local authorities know that they cannot leave their people isolated and cut off.

Mr. Tam Dalyell (Linlithgow) : As the Member for the area concerned, may I confirm that everything that my hon. Friend the Member for Edinburgh, Central (Mr. Darling) has said is quite right.

Mr. Darling : I am grateful to my hon. Friend.

Lothian and Strathclyde regional councils have had to pay substantial sums to keep unprofitable services on the road. There is not the slightest doubt that, as local authority expenditure is pressed and as the effect of the poll tax is felt, local authorities will come under substantial pressure to cut expenditure. One item of expenditure that could be cut--although I hope that this will not happen--is the subsidising of unprofitable bus routes.

It will be interesting to see whether the hon. Member for Edinburgh, West goes to Lothian regional council and asks for his bus routes to be kept on the road at night and yet says, at the same time, that he wants the councils to reduce their poll tax. That is the double-talk that we have come to expect. I hope that the Minister will deal with that later and will tell us what he expects local authorities to do to keep services on the road within his constituency.

The bus service is a service, and is valued by the elderly, by people who want to go out at night, by people who need to see relatives in hospital and by people who do not want to drink and drive. One would have thought that the Government would want to encourage that.

Deregulation has not been the success that the Government talked about. The Secretary of State said that it was a success because millions more miles were run. The answer is perfectly obvious. At peak times, on profitable routes, there are more buses chasing each other. I do not

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dispute that, if one wants to go on a bus on one of the main routes, there is a greater choice and more buses. However, the evening service in the area that I and the hon. Member for Edinburgh, West represent is far worse than it was before deregulation. If the hon. Member and the Secretary of State ever went on buses, they would know that evening services are poor and not half the services that they were before deregulation.

Ownership is crucial. It is a point on which the Secretary of State has had some difficulty, as he had when we debated the privatisation of electricity yesterday. I want to refer to management buy-outs, because the Secretary of State paid lip service to them and said that he hoped that there would be management buy-outs and, better still, that there would be management and employee buy-outs. However, the history of management buy-outs is not especially successful. In the English bus companies, managements bought out services and were quick to realise the assets. In one case, the management was quick to sell out to a Gibraltarian company. Once ownership and control pass outside the jurisdiction of Parliament, there is little chance for us to influence the way in which companies operate and conduct business. That is why we object to ownership passing abroad. That was the issue with Scottish and Newcastle Breweries and Scottish electricity.

I do not object to employees having a great say and substantial control of the industry in which they work. That is a thoroughly good thing. However, the Secretary of State did not promise to give employees a major stake or guarantee that they should have, for example, 51 per cent. of the industry in which they work. If he had said that, our attitude might be different. Of course, he will not say that, because he is in the business of looking after people who want to invest in the bus companies to make a return for themselves and other shareholders.

Incidentally, it is no wonder that we hear so much from people who are likely to be in the driving seat--managing directors, and those who represent Scottish Bus Group--and who say that they have no objection to privatisation. Of course they do not ; some of them see a good opportunity to make a fast buck. Eastern Scottish, for instance, happens to own a rather large piece of real estate in central Edinburgh, which could easily be sold off and the assets then switched to shareholders in Scotland, England or abroad.

The same thing as happened in England will happen again. Assets were stripped. Many of those who want into the industry will come in not because they want to operate buses but because they want to get their hands on the assets the companies will own. That is the real attraction for many of these investors. They have no interest in whether the No. 23 bus runs after 10 pm, but they have a great interest in what they will own and what they will be able to do with a large site in the centre of Edinburgh. The position is the same in other parts of the country.

Another important point about ownership and the location of offices is their responsiveness. I do not think for a minute that someone in London who had bought Eastern Scottish would care if there was much public outcry about the sale of valuable land, or about services not running. If the Secretary of State is determined to press ahead with privatisation, as I am sure he is, why does he not do something that would be revolutionary and extraordinary, and give the employees at least 51 per cent.

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of the company? He will not, because he does not believe in employees' rights, any more than anyone else in the Government. The Government are opening the nation's tills and allowing their supporters and allies to run away with the nation's assets. It is no coincidence that companies such as Stagecoach are warm backers of the Government and friendly towards the Government's policies. Of course, they want a slice of the action ; they are looking after their own pockets, not the bus services. There will be cowboys and people who are unfit to run a bus service. Some will drive their coaches down roads and motorways at 90 mph. There will be companies such as Stagecoach, which has been prosecuted for breaches of the road traffic regulations. That is the story of privatisation, because these companies' greatest priority is to make a return on their capital. The last time I looked at Stagecoach's timetable, I saw that the company runs a bus service from Edinburgh to Perth, calling at Dunfermline, within an hour. How is that possible within the speed limit?

The Secretary of State was also at pains to say that he wanted to return the bus service to the private sector. It is worth looking at why it was taken into the public sector in the first place. If the right hon. and learned Gentleman examines the minutes of the body that was the predecessor of the corporation of his home town of Edinburgh, he will see that, at the beginning of the century, Edinburgh's private bus operators were taken into municipal ownership because they were failing to provide a service. I suspect that that was done by people who were more in turn politically with the Secretary of State than with me.

If privatisation goes ahead, any hope of an integrated public transport policy will go out of the window. One of Edinburgh's difficulties is the city centre congestion caused by the large number of cars seeking to enter the centre. [Interruption.] The Secretary of State and his junior Minister, the hon. Member for Stirling (Mr. Forsyth), shout, "The western relief road." That would have done nothing but add to the congestion. It should be obvious to most people that if we had a public transport system that carried a large number of people quickly and cheaply in and out of the city centre, the problems of car parking and congestion would not exist. Other European cities recognise that fact. Amsterdam recognises that its centre should be protected and has a cheap and efficient tram and bus service that allows the speedy transit of many people into and out of the city. London is a superb example of public transport breaking down and of people leaving home at 4 am to get to work in their cars. It is happening in Edinburgh, Glasgow and throughout the country--public services are falling apart at the seams because of the lack of public investment and the Government's doctrinaire attitude to public transport. For all those who rely on public bus services, privatisation presents the greatest threat that they have ever known.

The details of the Bill raise issues of principle. Part I deals with the disposal of the Scottish Bus Group. Its five clauses basically come to this : the whole lot is to be transferred to the Secretary of State and he will decide what to do about it. In other words, after the Bill leaves this place, no opportunity will arise for Members of Parliament to discuss on what terms the bus companies are to be sold off, or when. I suspect that-- just as in the sale

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of MacBrayne Haulage to Kildonan--many of the companies will be sold at knockdown prices because the Government will be anxious to sell them off quickly.

After the Bill becomes law, I am sure that we shall see a procession of people coming down from the golf clubs and Conservative clubs, knocking on the door of St. Andrew's house and saying, "How about a slice of the action? We backed you ; now you back us by handing over these bus companies nice and cheap." The Bill gives no protection to the public purse or to the travelling public. Instead, we see the vacuous statement that the Secretary of State must consider "sustained and fair competition."

I will tell the Secretary of State what happens in competition. When deregulation was being discussed, we were told that the Scottish Transport Group would not allow its subsidiaries to act as a monopoly. I know--and everyone who understands what was going on also knows--that that is precisely what happened. Lowland Scottish and Eastern Scottish never competed against each other in the tendering ; the whole thing was run centrally. The more I was confronted with denials by individual directors, the more obvious it became what was happening.

When the companies are sold, they will slowly but surely amalgamate. Ultimately we shall have a monopoly--or perhaps, as in the case of the electricity industry, a duopoly--with the Scottish travelling public held to ransom in a stranglehold by the private sector, with any unprofitable but socially necessary routes subsidised from the public purse.

Part II of the Bill deals with Caledonian MacBrayne. Although my constituency cannot exactly be described as maritime, as someone who from the age of nought has been travelling on MacBrayne's boats--especially to the outer Hebrides--I know something about them. It is interesting to note that the reason the Government are not privatising all routes other than the Clyde routes is that no private sector operator would touch them, because a profit cannot be made from them.

The Secretary of State talks about investment in new piers, ferries and roll-on/roll-off facilities. No private sector investor would touch that. In many cases, the number of passengers and vehicles carried in the winter months would not provide a commercial return. It would indeed by monstrous if, after public money had been spent on building new vessels for Caledonian MacBrayne, they were handed over at a knockdown price to some private operator.

Incidentally, as I use the vessel comparatively regularly, let me support my hon. Friend the Member for Western Isles (Mr. Macdonald) in his campaign for a new vessel to cross from Ullapool to Stornoway. The present one is little better than a cattle ship. If we are to build causeways from Vatersay--which I thoroughly support--the replacement of the Suilven must be a priority. I hope that the Secretary of State will deal with that, and not then hand it over to some private operator.

The Clyde crossing is also an important issue. It illustrates exactly where public service and private enterprise mix--or do not mix, as the case may be. Let me take the Secretary of State back to what happened when privatisation of the Gourock-Dunoon route was considered. An inquiry was set up because the then Secretary of State was under considerable pressure to help those who operated Western Ferries. It is nonsense to have made Caledonian MacBrayne cut its crossings from Gourock

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and Dunoon from two to one an hour, with the result that one expensive ferry is tied up for substantial parts of the day to make it more profitable for the private operator.

That private operator is operating three or four ancient vessels, purchased from a company that used to cross to the Isle of Wight. Caledonian MacBrayne was made to restrict its services simply to give the private sector operator a chance. That is not fair competition. It was rigged from the start to help the private operator. There was a negative public subsidy to keep a public asset tied up at a pier rather than providing the necessary service. As my hon. Friend the Member for Cunninghame, North (Mr. Wilson) said, it would be nonsense to take away that part of Caledonian MacBrayne because the result would be to

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step up subsidies for the outer-isle services. No doubt the Secretary of State would then say that it costs more because it is in the public sector.

The Bill is obnoxious and is flawed simply because it does not recognise the fact that transport is a public service. Many people rely on buses and ferries as part of their way of life and without them they will be marooned and substantially worse off. It is nonsense to suggest that the Bill will improve matters, except for one or two money-grubbing cowboys who will seek to profit out of it. Those are the people the Government seek to protect. The Secretary of State knows that, as does the Under-Secretary. We will oppose the Bill because it undermines a public service which most people in Scotland want to see remain intact. It is one of the reasons why the Conservative party is currently placed so low in the polls.

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10.41 pm

Mr. David Marshall (Glasgow, Shettleston) : The Secretary of State and his fellow Tories have made much of employee-management buy-outs in the Scottish Bus Group and in the public transport sector in our cities. The Secretary of State also referred to the Transport and General Workers Union's support for such buy-outs. I declare an interest as a TGWU- sponsored Member of Parliament and I can tell the Secretary of State that the union and its members--the bus workers in the Scottish bus industry-- did not decide to opt for such a buy-out by choice. Given freedom of choice, their decision would have been to remain as they are now. However, the Government do not believe in freedom of choice, except for the rich. Therefore, the bus workers have opted for what they see as the next best option. They have opted that way largely out of fear for what will happen to them as a result of the Bill. They are afraid of what will happen to their wages and conditions of work and to their jobs. If they fall into the hands of some of the asset-stripping predators waiting in the wings, who knows what will happen to them? They have every right to be afraid. I shall look at the much-mentioned and much-maligned Stagecoach company. In Scotland, Stagecoach is a non-union company--if I am wrong I am happy to be corrected and I will apologise--but in England it allows trade union membership. However, it pays lower wages and offers poorer conditions than those in the Scottish Bus Group, but the fares are basically the same. Therefore, Stagecoach is not passing on the benefit of its saving in operational costs to the fare-paying passenger by offering lower fares and better services. It is more concerned with making higher profits and exploiting its employees.

I seek positive clarification from the Minister on several issues which are important to employees in the industry. Is the Minister prepared to include within the articles of sale of the companies the proviso that the successful purchaser must continue with membership of the present pension scheme, which is known as TOPS--the transport operators pension scheme? Will there be any difference in the treatment of pension rights for existing and new employees, or will there simply be no legal requirement to provide a pension scheme? Will workers who have left the industry after years of loyal service--many of them on health grounds--and who have earned entitlement to a pension, have that pension safeguarded? Those are important points. I am sure that the Minister will deal with that when he replies to the debate.

On the question of financial assistance to employee-management buy-outs, the Secretary of State boasts that up to 75 per cent. of professional fees, subject to a maximum payment of £48,750, can be provided. If, however, the bid is successful, that assistance has to be repaid. The Secretary of State gives it with one hand and claws it back with the other. The only beneficiary of that type of assistance will be the ever-increasing number of consultancies that are springing up all over the place. In the main, consultants are the friends of this Government.

My hon. Friend the Member for Cunninghame, North (Mr. Wilson) referred to the 5 per cent. discount on the highest bid that was made available for employee-management buy-outs when the National Bus Company was sold. The Secretary of State has not said whether that

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