House of Commons Hansard Debates for 20 Feb 1989

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"The Secretary of State shall have the power to direct bus operators operating undertakings disposed of under this Act to implement any recommendations of the Scottish Bus Passengers' Consultative Committee."

That is a very important subsection, because the Scottish transport users consultative committee and the disabled persons transport advisory committee have no such powers. The Government promised to consult the disabled persons transport advisory committee on the introduction of new regulations that would result in better standards of accessibility to buses for the handicapped and the disabled. The Government consult that committee and specifications for both new and existing buses are laid down, but nobody is under any obligation to do anything about them.

Under the Transport Act 1985, local authorities had a duty to pay regard to the transport needs of the elderly and the disabled, but merely having to pay regard to those needs does not mean that anything has to be done about the specifications that have been laid down by the disabled persons transport advisory committee. No duty is laid on the majority of commercial operators to pay any attention to the specifications. The recommended specification published by the disabled persons transport advisory committee says :

"The implementation of this Specification rests on the goodwill that is needed towards those passengers for whom these features cater".

That refers to features such as route numbers, destination displays and entrance and exit steps for the disabled. They have to rely on the Government's goodwill.

In Committee, the Government said nothing that suggested that such a change will be made. The hon. Member for Battersea (Mr. Bowis) trapped the Minister on that point. He asked him whether the bus specification, as laid down by the disabled persons transport advisory committee, would be a requirement in the disposal programme and whether the bus companies that tender will need to give the Minister an answer. The hon. Member said that he welcomed the Minister's positive response. In fact, what the Minister said was that it would be the general policy under the disposal programme. So the Minister has to be very clear, when he comes to the Dispatch Box, on whether any company applying to take over STG subsidiaries will be required to take on board the specifications laid down by the disabled persons transport advisory committee. If he says yes, he will have to go further. It is not just a question of the disabled ; all the other bus users have to be taken into account. Also, the Minister must take these powers not just for the privatised subsidiaries but for all the bus operators currently providing services in Scotland. The only means he has of doing that is by accepting new clause 5. He will have to come up with very convincing arguments to persuade any hon. Member that he cannot accept it, but it is framed in the most uncontentious way anyone could imagine. 5.30 pm

Lord James Douglas-Hamilton : A considerable number of points have been raised. The hon. Members for Cunninghame, North (Mr. Wilson), for Aberdeen, North (Mr. Hughes) and for Glasgow, Maryhill (Mrs. Fyfe) raised the question of the procedures to be adopted if a bus service is withdrawn. Obviously, if a bus service is withdrawn the local authority can replace it with a subsidised service and thus fill any gap. I should make it absolutely clear that since deregulation there has been a

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very considerable increase in mileage served by buses both north and south of the border. In Scotland the increase in vehicle kilometres has followed a pattern very similar to that which resulted from deregulation in England. The figures for Scotland were 285 million vehicle kilometres in 1985-86, 302 million vehicle kilometres, in 1986-87, and 329 million vehicle kilometres in 1987-88. Of course, as hon. Members have suggested, travel for the elderly and disabled is extremely important. The hon. Member for Renfrew, West and Inverclyde (Mr. Graham) made a particular point to which I should like to respond. Local authorities do have the power to subsidise services at times when the provision of a service might not be a commercial proposition. This obviously includes late-night services, which were also a concern of the hon. Member for Maryhill. I have every reason to believe that authorities have made use of these powers. Local authorities also have the power to set up concessionary fare schemes, and all authorities, except one island authority, have concessionary fare schemes covering the elderly and the disabled.

The hon. Member for Maryhill raised various points in relation to the disabled. I am glad to confirm that the disabled persons transport advisory committee, which was set up under the Transport Act 1985, exists to provide exactly the voice for which the hon. Member called.

The hon. Member for Renfrew, West and Inverclyde was concerned about safety conditions. I stress that any person wishing to operate buses must have a PSV operator's licence issued by the traffic commissioner, who has to be satisfied that the person is of good repute and financial standing and has adequate facilities to maintain the vehicles in a roadworthy condition. These vehicles are subject to an initial fitness test by the Department of Transport vehicle inspectors and are then tested annually to a higher standard than cars. They are also subject to spot-checks on the roads. I have to say that since deregulation there is no evidence to suggest that safety standards have been significantly affected, and there is no reason to expect that privatisation of the Scottish Bus Group would affect safety.

We dealt quite fully in Committee with the question of sanctions. However, I should like to repeat that sanctions do exist. The person principally concerned with the general supervision of standards is, of course, the traffic commissioner. If there is a flagrant abuse of procedures, the traffic commissioner can stop the operator from running the services and can require him to repay part of his fuel duty rebate. Although these sanctions are not used often, they are undoubtedly there. Of course, it goes without saying that any operator will wish to run a reliable and satisfactory service if he is to attract custom.

Mr. Robert Hughes : The Minister has said that the sanctions are seldom used. Can he tell the House how often they have been used?

Lord James Douglas-Hamilton : I shall seek to find out the exact number of times and shall write to the hon. Member, but I think that what I said was absolutely correct : that the sanctions are severe and are rarely used. But they do exist to deal with operators who fail, without reasonable excuse, to provide in a satisfactory manner the services registered. The real test is whether they have been used in all the cases where there has been flagrant abuse, and I have reason to believe that the traffic commissioners

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are doing their job competently in that connection. As I have said, the inspectors are responsible for ensuring that all vehicles are safe and roadworthy.

The question of the disabled was discussed at length in Standing Committee. I shall not go over all that ground again, but I want to mention one point. The specification recommended in the document which has been issued, and which was praised in Standing Committee, has been acted upon by the Scottish Bus Group. The group has revised its own specification to require most of the recommended items to be incorporated in any new vehicles that are purchased.

Mr. Wilson : I do not want to pre-empt anything that the Minister is going to say. We have heard that the Scottish Bus Group has incorporated the recommendation of the Committee. Can he tell us how many private operators in Scotland have done so?

Lord James Douglas-Hamilton : It is considerably more difficult to say. The answer is, of course, that the new clause does not relate to all the private operators, but it does relate to the subsidiaries being set up in the Bill. That is one of the anomalies of the new clause.

I have agreed with the hon. Member for Cunninghame, North that there have been criticisms by the Scottish Consumer Council as to information about bus services. I shall certainly be following up this matter with the council when I meet it shortly. Of course, local authorities have power to make information available if they choose to do so, and they have a very important part to play. I shall take advantage of the discussions to consider what improvements can be made.

The new clause, to which the hon. Member addressed himself particularly, provides that there should be a new body called the Scottish bus passengers consultative committee, whose job would be to monitor the effects of the Bill on bus passengers in Scotland. The committee would make recommendations to bus operators--

Mr. Robert Hughes : Will the Minister give way?

Lord James Douglas-Hamilton : These are factual matters, so perhaps the hon. Member can come back in a minute when I have developed the point.

The committee would make representations to bus operators and to the Secretary of State, who could then direct any of the privatised Scottish Bus Group subsidiaries to implement any such recommendation. These powers of direction go well beyond the powers of the Scottish transport users' consultative committee in relation to rail and ferry services in Scotland. They would apply only to the privatised bus companies ; they would not apply to their competitors. There would, therefore, be the anomalous situation that half of the Scottish Bus Group would be subject to a statutory form of supervision which did not apply to the other half, and that would be unsatisfactory.

Mr. Robert Hughes : I think that the Minister intended some slight criticism of the new clause on the ground that it refers only to the companies covered by the Bill. If my memory serves me well, a broader new clause which was tabled in Standing Committee was ruled out of order on the ground that it was outwith the scope of the Bill. The Minister cannot have it both ways. If he wishes to accept the principle of the Bill, surely it is within his powers, when

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it reaches another place, to have either the long title or the short title amended and to bring in an amendment on a broader basis within the Bill's scope.

Lord James Douglas-Hamilton : The hon. Gentleman is touching on the other matter about the STUCC and its remit--a matter that was mentioned by the hon. Member for Cunninghame, North. If the hon. Member will give me just a moment to finish the point that I am making I shall come to that.

The powers in the new clause are very wide. It appears that the committee could make recommendations about any aspect of bus operations, presumably including fares, and the Secretary of State would be able to direct that such recommendations be implemented. However, one of the objectives of the Bill is to free the STG subsidiaries from central and governmental control. This would not merely perpetuate such control but would allow the Secretary of State to interfere in the activities of Scottish Bus Group subsidiaries to a greater extent than at present.

With regard to the remit of the STUCC, which was referred to by the hon. Member for Cunninghame, North, by my hon. Friend the Member for Dumfries (Sir H. Monro), and, several times, including today, by the hon. Member for Argyll and Bute (Mrs. Michie), there have been suggestions that the Scottish transport users' consultative committee should have responsibility in relation to bus services and involvement in the privatisation of the Scottish Bus Group. It might be helpful if I were to outline briefly the history of the STUCC and of the Government's thinking on this matter. The transport users' consultative committees number eight in all, and cover Scotland, England and Wales. They were set up under section 56 of the Transport Act 1962. The chairmen and members of the TUCCs are appointed by the Secretary of State for Trade and Industry, who also funds their activities.

Overall responsibility for policy matters that affect the committees therefore lies with the Department of Trade and Industry. I have, of course, spoken to my hon. Friend the Minister for Trade on this subject and my officials have been in touch with his Department concerning comments that were made in Committee.

The main function of consultative committees is to help users who have complaints about rail services and other facilities provided by British Rail and, in the case of the Scottish committee, about ferry services provided by the Scottish Transport Group. There is also the London area committee which, exceptionally, is empowered to look after consumer interests in London Regional Transport services. Road transport was excluded from its remit by legislation.

The Transport Act 1968 applied that exclusion to road transport services provided by the newly created STG. Bus services were excluded from the committee's remit as, even before deregulation, buses operated in a much more competitive and diversified environment than the public sector monopolies over whose transport services TUCCs were designed to act as watchdogs. It was felt that the TUCCs would not have the time or resources necessary to look after the wide range of services and operators, many of them locally based, in the bus sector. That argument will apply even more strongly after privatisation.

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Mrs. Ray Michie : Is the Minister aware that, in its evidence to the Scottish Affairs Select Committee, which studied rural transport in 1980- 82, the STUCC asked the Committee to consider the need for it to have a remit to examine bus services so that there could be an integrated service in Scotland?

Lord James Douglas-Hamilton : I sat on that Select Committee, so I am aware of the circumstances which the hon. Member describes. The bodies were set up to deal with consumers who travel using nationalised industries, not private bus companies. New legislation and changes to other legislation would be necessary to make the new clause effective. I do not think that it would be helpful to create an additional role for the STUCC at this stage.

Mr. Wilson : I shall not prolong the debate, but the Minister's reply was a litany of excuses for doing nothing.

The Minister's latter point was especially interesting. It was not a defence of his stance but a further argument against

denationalisation. He told us that, as long as there are nationalised travel facilities, the consumer has a double benefit. He said that, as soon as we privatise--thus putting the service at the mercy of the market-- consumers will have poorer services and be deprived of the redress offered by a consultative committee or some parallel consumer body.

The Minister was engaged in nothing more or less than casuistry. I do him the credit of suggesting that it was not of his invention. He opposed the new clause because it would cover only half of the Scottish bus industry-- that half which the Bill will privatise. My hon. Friend the Member for Aberdeen, North (Mr. Hughes) said that when an attempt was made in Committee to create a consumer body with a wider remit, the Chairman ruled it out of order on the ground that it went beyond the scope of the Bill. There is nothing in new clause 5 which would prevent the Government from expanding the proposed consultative committee's remit to include the entire Scottish bus industry.

The Minister wasted everybody's time by using that 50 per cent. argument because the real reason for opposing the new clause is that the Government do not believe that private sector operations should be reviewed by any consumer body or consultative committee. That decision is at odds with the fact that consumer organisations have been established to monitor larger privatised industries. Scottish bus users are clearly not regarded as a category of citizenry who must be bought off with window dressing of that type. Privatisation is to be pushed through without even the safeguard of a consultative body.

Question put and negatived.

Clause 1

Transfer of operations of the Group

Mr. Wilson : I beg to move amendment No. 9, in page 1, line 9, after Group")', insert

and management and employee buy-out teams'.

Mr. Deputy Speaker : With this we are discussing the following amendments : No. 10, in page 1, line 9, after Group")', insert and trade unions'.

No. 11, in page 2, line 9, at end insert

the provision that preference be shown to management/employee buyout bids'.

No. 7, in page 3, line 7, clause 3, at end insert--

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(2A) The Secretary of State shall, having regard to section 2(2)(a) of this Act, give directions to the Group to allow a 10 per cent. share to employees and management desirous of aquisition of any undertaking or part of an undertaking.'.

No. 13, in page 3, line 11, clause 3, after State', insert and to the interests of trade unions representing employees interests'.

No. 19, in page 3, line 12, clause 3, at end insert

any financial assistance made available for management or employee buyouts shall be available for up to three buyout attempts by existing management or employees within any one of the undertakings created by the Act.'

5.45 pm

Mr. Wilson : We have heard from the Government at every stage that they are in favour of buy-outs. Like good weather, buy-outs are a desirable thing. There is as much in the Bill to ensure the success of buy-outs as there is to ensure good weather.

Once again, we are making it clear to the Minister and putting it firmly on record that, in its present form, the Bill does nothing to make it likely that the Government's words, which have been employed to make the Bill more politically acceptable in Scotland, will be translated into reality.

We want the Minister to say that sales will not proceed until there is agreement--not consultation--among the parties concerned to ensure the success of buy-outs. In each company, buy-out teams are working to put together plausible offers. We do not think that they should have been put to this trouble--we defend the status quo in the Scottish Bus Group.

Confronted with the Government's ideological measures, however, people are working in good faith and, in some cases, raising money in good faith, in an attempt to put a buy-out together. We think that a couple of buy-outs will be allowed to succeed as a form of window dressing. There will be many photo-calls involving the Minister, holding up his little blue bus again, just to show us that, as the Government said, buy-outs have succeeded.

The big sales, however, will go to private sector companies. I am sure that the Minister will not be the ultimate authority on these matters. The ideological jiminy cricket--the hon. Member for Stirling (Mr. Forsyth)--is not with us this evening. I am sure, however, that the idea of the entire SBG being given away or sold to some form of socialised ownership would not be too popular in that quarter. We believe that one or two buy-outs will be allowed to succeed, but that many SBG assets will be sold to the crude private sector. To give us some reassurance, the Minister can easily accept the amendments which propose that the sale of components of the SBG will not be proceeded with until there has been agreement--not consultation-- with interested parties, including management-employee buy-out teams and trade unions. That is a reasonable proposition because, if the Minister is sincere, the last thing that he would want would be to rush in to sell-offs when the buy-out teams were not ready to participate.

Our next concern is about the number of buy-out initiatives that will be given support by the Scottish Office. We have heard a great deal about the assistance that will be given to buy-outs. There will be a guarantee of £48,750 from public funds to the initiators of buy-outs if they do not succeed. Opposition Members do not believe that that

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is very generous because we know that the cost of putting together a serious buy-out offer is likely to be nearer to £250,000. In Committee we learnt from the Minister, almost by accident --it was not clear at earlier stages of our proceedings--that, within each privatised company, only one buy-out bid will qualify for the £48, 750. That is unacceptable. We know that at least one of the companies that is to be sold off--a large company covering a substantial geographical area of Scotland--has two initiatives going ahead. One initiative is management- led and the other is employee-led. It is entirely wrong and against natural justice for the Government to make a pre-emptive strike against one of those bids by saying that they will support the other with the financial guarantee of £48,750. In the legislation the Government have not said that they will support only one form of buy-out and no other. If they had had the courage to say that, they would have saved everyone a lot of trouble. English experience shows that there are various forms of buy-out. Everyone knows that there are various formats and varying degrees of emphasis on management and work force. Anyone who has contact with the real world knows that sometimes the management might not have confidence in the work force and the work force might not have confidence in the management. In those circumstances, surely each of those elements is entitled to try to put together a buy-out on is own initiative.

One of the amendments under consideration proposes that up to three potential buy-outs should qualify for Government support. That will not impose any great burden upon the public purse. We are talking about a maximum of 30 potential buy-out bids. Nobody thinks that there will be 30 bids in reality. It would be unlikely if in any more than two or three of the companies to be bought out there were rival bids from within the existing management and work force. However, to rule out the possibility and say that there are no circumstances under which management or employees will be allowed to diverge and put together rival bids to be considered on their merits is unacceptable and flies in the face of what the Government are supposed to espouse--competition.

If a worker-led bid came forward and there were employees within a company who had drive, initiative and new ideas about how it could be run more successfully and provide more services at no cost to the public purse, why should they, in effect, be disqualified without their case ever having been studied by those who are supposed to study the bids? If the Government adhere to their position, the decision on the bids would be taken not after due consideration and detailed examination but at the outset by telling one bid that it had not been selected to receive the £48,750 assistance.

In Committee the Minister said--

Mr. Robert Hughes : I just want to check my memory. Is it not the case that if the buy-out bid is successful, the money would have to be paid back?

Mr. Wilson : That is right. As my hon. Friend knows, that supports rather than contradicts my point.

It would be extremely unattractive to any group of workers or management to enter a serious bid if they had been told by the Scottish Office that the bid was so contemptible that it would not even qualify for assistance if it failed because another bid from within the same

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management or work force had been judged as superior. That is what the Minister is suggesting and that is what we find unacceptable. Within the framework of this short debate the Minister has an opportunity to say whether the Government will give any substance to their words. We lack confidence. Time and again we have put down the markers and placed on record that we would regard it as a perfectly reasonable alternative to what exists now if there were a series of companies throughout Scotland which represented the ownership of those at present employed by the Scottish Bus Group under the same conditions as at present and with the same commitment to the current level of services. In the legislation as drafted, where is any provision that underwrites the existing conditions of employment for those working in the Scottish Bus Group?

The only way that that can be ensured, as the Minister recognised in our debate on pension schemes, is if the buy-outs are given a real opportunity to succeed. On the basis of what the Minister says, we will learn whether the Government's thinking has advanced. We will discover whether there is a real commitment or whether it is simply words which they hope that the Scottish public will forget were ever uttered so that in the fullness of time they can shunt the companies off to the private sector to do with them as it will.

Lord James Douglas-Hamilton : A large number of points have been raised by the hon. Member for Cunninghame, North (Mr. Wilson), but the preferences are those stated on the first day of our Committee proceedings. First, a preference is given to bids where there is a high level of employee participation through an employee share ownership plan or some other scheme designed to ensure significant employee participation. Secondly, for competitive reasons, new independent companies will also receive preference and, thirdly, companies which are locally based with their headquarters in the area to be served will receive a preference to increase local responsiveness.

Amendment No. 9 would require the Secretary of State to consult management- employee teams when drawing up the disposal programme. We have already made clear that we are determined to encourage management-employee buy-outs. We welcome the widespread interest that has been shown by management-employee teams in developing bids for their companies. Financial assistance will be given by the STG to one team per company to develop a bid. When considering bids, preference will be given to bids involving significant employee participation. The STG and, through that, the Secretary of State will keep in touch with the development of bids. The disposal programme will set out the criteria against which the bids will be assessed, including the basis upon which a preference will be given to bids involving significant employee participation. It would not be appropriate to consult prospective purchasers, whether or not they are management-employee buy-out teams, in drawing up the disposal programme. The preparation of the programme is a matter for the Secretary of State, in consultation with the STG.

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Therefore, the amendment is inappropriate. As I have said, we will keep in touch with the development of bids by management-employee buy-out teams and we shall take account of any relevant points that arise from that process.

Mr. Robert Hughes : The issue of who receives assistance and who does not is extremely important. Will the Minister confirm that the Scottish Office, or somebody, will carry out an initial selection process if there is more than one employee-management buy-out effort and that there will be, in effect, a preferred bid for assistance? If a bid falls flat quickly, will it be possible for the Secretary of State to switch the assistance to the other bid which was previously ruled out and to give those involved the chance further to develop their proposals?

6 pm

Lord James Douglas-Hamilton : If more than one bid is forthcoming from different management or employee teams in a given company, we shall, of course, consider those bids. All bids, from whatever source, will be given due consideration. I hope that there will not be more than one bid from within a company and I believe that it is unlikely to happen. Amendment No. 19 seeks to require the group to make any financial assistance offered to management-employee buy-out teams available for up to three buy-out attempts in any company. It may be helpful if I remind the House of the basis on which financial assistance will be made available to management-employee teams. The assistance will be available to one team per company and will consist of an underwriting of 75 per cent. of the costs of the professional fees required to mount a bid up to £65,000--that is, a maximum of £48,750. The assistance will be required to be repaid in the event of the bid being successful. The assistance will be provided by the Scottish Transport Group, which will consider applications from management-employee teams against the background of promoting the buy-out of a controlling interest by management and employees. The best way to encourage and promote a controlling interest by employees, who include management personnel employed by the company as well as other staff, is to encourage strong competitive bids by management-employee teams. We have made it clear that bids involving a substantial degree of employee participation will receive a preference. Successful bids by management- employee teams would also help to meet the competition objective by establishing independent, locally based companies.

The best chance of success for a management-employee bid will arise if there is only one such bid from within the company. The hon. Member for Cunninghame, North made an important point on that. More than one bid would probably be counter-productive because of the substantial danger that neither of the two bids would succeed. If there were disruptive factors at work, one management-employee buy-out team might not come forward. I expect the Scottish Transport Group, before reaching a decision on assistance, to see what it could do to encourage any separate teams to come together to mount a single bid. I hope very much that management and employees in the various companies will be able to agree to mount one bid. I consider amendment No. 19 to be counter-productive in terms of what the Government and the Opposition wish to achieve.

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Mr. Wilson : I fully understand that the Minister hopes that one bid will emerge and perhaps that would be the best answer, but if one bid does not emerge, will the Minister maintain the right to dictate that either only one bid will emerge or that he will condemn those involved in an alternative bid to effective disqualification?

Lord James Douglas-Hamilton : Clearly, financial assistance will be given for one management-employee buy-out team per company and no more because that would be counter-productive. Were I to agree to do more than that, it might have the effect of making it extremely difficult for either management or employees to launch a successful bid.

Mr. Wilson : So the Minister categorically denies the right either for management to have insufficient confidence in the work force to mount a bid or, more probably, for the work force to have insufficient confidence in management to mount a bid. I remind the Minister that, when the National Bus Company subsidiaries were sold off to the private sector, the first thing that the private company did in many instances was to get rid of the management because of its dissatisfaction with it. That right will not exist for workers within a company. There may be a good relationship between management and employees in most companies, but if people are not prepared to go down the road together they will not be allowed to go down the road at all.

Lord James Douglas-Hamilton : Obviously, the hon. Gentleman feels strongly about this. We are not preventing anybody from making a bid, but we believe that there should be one form of assistance per company. The Scottish Transport Group will give advice about which body it should go to.

Mr. Wilson : The Minister must accept that if another potential buyer was coming cold on the scene, there would be no question of qualifying for financial assistance. Yet if there are two bids from within the company that is to be sold off, a unique pre-judgment would be made by the Scottish Office about the superiority of one bid against another. It is against natural justice for the mere existence of a bid to be the basis for judgment, rather than the quality of the bid.

Lord James Douglas-Hamilton : I very much hope that that situation will not emerge. The Scottish Transport Group will made recommendations and give advice. I remind the hon. Gentleman that clause 3(2) provides :

"The Secretary of State may, having regard to section 2 of this Act, give directions to the Group as to the manner in which they are to implement the disposal programme generally or in any case specified in the directions."

I accept that the Secretary of State will have the ultimate responsibility because he will have to approve each sale. Any group can make a bid and will be considered seriously, but assistance will be given only for one management-employee buy-out team per company.

Mr. McAllion : The Minister said that there will be only one form of financial assistance per company, in the form of the £48,750 to help people to put together a bid in the first place. In Committee, it emerged that the Scottish Development Agency has been investing public money in the private operator Stagecoach to enable it to put together £5 million with which to buy some of the public assets involved in this privatisation. The Minister said that

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the money that the Scottish Development Agency invested in Stagecoach was more than £65,000, but less than £1 million. Will he tell us exactly how much public money the Scottish Development Agency has invested in the Stagecoach operation and whether the same level of investment will be available to every bid, including management-employee bids, that is made to buy one of the subsidiaries? If there are one, two or three management-employee bids within a company, will they all receive the assistance from the Scottish Development Agency that Stagecoach has received?

Mr. Bill Walker (Tayside, North) : I want to speak briefly. As those hon. Members who were in Committee know, I have been giving advice to Strathtay, which is the current Scottish Bus Group company, and to Stagecoach, both of which operate in my constituency. I hope that both companies will be successful in the privatisation programme because both have much to contribute in different ways.

There is some merit in amendment No. 19, which deals with the possibility of more than one group within management and employees considering a buy- out. In any auction, the more who bid, the greater the likelihood of obtaining the best possible price. In this instance, that is in the interests of taxpayers and also of managers and employees because it is only through learning what the values are and what the method of bidding is that they will achieve a learning curve. Anyone who has had dealings with the present management of the Scottish Bus Group will realise that that is new, uncharted territory for most of them. Some people have previously worked in the English companies when they were privatised and have some direct experience, but the majority have not. There would have been merit in considering the possibility that more than one proposal might come forward in any given company in the group.

It is interesting that the Minister believes that that could have a damaging impact on the quality of bids and that it is better to receive one bid that represents management and employees. He must know--as I know--that some managers are more acceptable to some of the employees than others and that the employees may wish to follow those managers down this road. That is fairly common--there is nothing unusual about it. In any large, structured company, some people are better motivators and better at getting on with the work force than others. Although that does not necessarily mean that they are good or bad managers, it may have an impact on the employees' decision about whether they wish to be part of any bid.

We are talking about a lot of money. Although it may not seem much to people who are used to talking in millions, it will be a substantial risk for the individuals involved. That, too, will have an impact on the decisions made, especially by the employees. I hope that both Stagecoach and Strathtay will be successful. Strathtay is a good operation and well put together. Those companies could be successful in different parts of the country. Strathtay could be successful in Tayside, and Stagecoach elsewhere. I have never made any secret of the fact--

Mr. Wilson : We know that the hon. Gentleman is advising both companies--he informed us of that in Committee and has said so again tonight--but is it correct

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that he is backing Strathtay for his own area? Can he give us any reason why the same principle should not be applied to any part of the country that does not happen to be his own?

Mr. Walker : I can answer that easily. I do not know the facts and the background and have not met the people at other firms, but I am impressed by the quality of the management and the attitude of the employees at Strathtay. If I had the opportunity, which I have not had, to go round the rest of Scotland, perhaps I would form the same view of the rest. I am judging by the quality of the management, the leadership and the fact that Strathtay employees--the hon. Gentleman knows this because it came out in Committee--are having funds deducted from their pay every week to make their contributions to buying the shares. I do not know whether that is being emulated elsewhere, so I am asking rather than making a statement. However, as I have said, I am impressed by the quality and the attitude adopted and therefore hope that Strathtay will be successful.

In the final analysis, I hope that whoever acquires the independent groups will be committed to road transport and to public service vehicle activities. That applies equally to those in the private sector and to those who are now in the public sector but who hope to make some kind of management-employee buy-out. It is important to Scotland that those who end up running our bus operations are committed to bus operations. That is one reason why I have no hesitation in saying that I support Stagecoach also.

Lord James Douglas-Hamilton : I thank my hon. Friend the Member for Tayside, North (Mr. Walker) for his speech. Obviously, he will give whatever support he can to his constituency, and that is welcome. In Committee I promised the hon. Member for Dundee, East (Mr. McAllion) that I would follow up with the Scottish Development Agency the need for management-employee buy-out teams to receive the same treatment as any other applicant for assistance from the SDA. I confirm that my officials have written to the chief executive of the SDA to strengthen that point.

Mr. McAllion : Has the chief executive of the Scottish Development Agency acted on that letter?

Lord James Douglas-Hamilton : I have not yet seen a reply from the chief executive, but my understanding is that the position is exactly as I told the hon. Gentleman in Committee. There will be comparable treatment, which is what the hon. Gentleman wants.

Mr. Wilson : We have noted with interest the declaration from the hon. Member for Tayside, North (Mr. Walker) that he will support Stagecoach everywhere except in his own backyard--

Mr. Bill Walker : I have made it clear that I would not be unhappy if Stagecoach ended up with the Strathtay area, but that I would prefer Strathtay bus company.

Mr. Wilson : The hon. Gentleman has not added anything to my previous comment.

I come back to the Minister on the question of Scottish Development Agency assistance to Stagecoach. My hon. Friend the Member for Dundee, East (Mr. McAllion)

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asked specifically how much it has received. My understanding is that it is no secret and that it is public information- -that is unless it has received £250,000 or more. Surely it has not received £250,000 or more.

Lord James Douglas-Hamilton : The Scottish Development Agency, in syndicate with a number of other financial institutions, subscribed part of a total of £5 million new money raised by Stagecoach. The SDA's investment was made in accordance with our normal commercial criteria to help to strengthen the financial and business position of an expanding company, headquartered in Scotland, which is prepared to provide the prospect of continued growth.

I stress that that money relates to new equity and is not directly linked to any specific plans by Stagecoach for bids for SBG companies. The point that the hon. Member for Dundee, East was making was about assistance to management-employee buy-out teams. 6.15 pm

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