Previous SectionIndexHome Page

Ms Sandra Osborne (Ayr): Does the right hon. Gentleman agree that if his preferred option of full-scale privatisation were to proceed, there would be no new Scottish centre at Prestwick?

Mr. Redwood: That is a false assumption. We would not sell NATS on the cheap. If we were to proceed, we would wish to protect all the important interests, including safety.

The Deputy Prime Minister is in a terrible muddle over the sale proceeds from NATS. The Bill's financial memorandum states not only that the gross proceeds will be £350 million, but that NATS has outstanding loans of about £300 million, which will have to be settled either by refinancing, repayment or writing off. If we write off £300 million, but raise only £350 million from the sale--and if the costs amount to £35 million, as we are told they will--we would be selling off NATS for £15 million net.

When I first pointed out the position, the spin from the Department was that it would not write off £300 million at the taxpayers' expense, despite the very clear language of its memorandum, which it has still not amended. Is the Deputy Prime Minister therefore saying that clause 55 is redundant? That clause strengthens the impression given by the financial memorandum because it gives him the power to write off that debt. Presumably, he seeks that power because he thinks that he may need to use it,

20 Dec 1999 : Column 545

in which case he will be selling NATS at the devastatingly cheap price of £15 million net--[Interruption.] Labour Members say that that is ridiculous. It is entirely ridiculous, but it is what the documents say. The Deputy Prime Minister has been unable to clear up the uncertainty.

Mr. Gordon Prentice (Pendle): Is the right hon. Gentleman the same person who, as a Minister in the previous Government, authorised the selling off of British Rail and the extinguishing of a debt of £19,000 million? British Rail was sold for a fraction of its true worth.

Mr. Redwood: I was not the Minister who signed off anything on the sale of British Rail. The hon. Gentleman was quite right in thinking that I was not the Minister. Perhaps he should cross-examine those on his own Front Bench. It is deeply embarrassing because they are unable to explain the numbers. The fact that they are all remaining seated displays that they cannot do so. They have a great problem.

Mr. Prescott: The right hon. Gentleman knows that, in a letter to the hon. Member for North Essex (Mr. Jenkin), we explained precisely the mistake that we believe the Conservatives are making. First, their judgment about the £350 million figure is based on present circumstances, not on any judgment by a company that wants to buy. Such a company would take into account debt and equity as well as the income stream that would have to be determined by the prices to be charged. It is nonsense to say that £350 million would be the price. One cannot make that judgment until someone makes a bid.

As for debt, it can be structured over a longer period, as the right hon. Gentleman himself has already said. Such decisions will be taken during the progress of negotiation as we choose a strategic partner in this matter. Only then can we come to a proper judgment, although the Committee will, of course, be able to debate the matter.

Mr. Redwood: I am relieved to hear that the Deputy Prime Minister wants to walk away from the clear statement made to the House in the paper tabled on the financial and manpower effects of the Bill. The mistake is not mine, but the Government's. I did not invent the figures, I simply read out what the Government had produced. They say that they will receive only around £350 million. They leave open the possibility--that puts it at its lowest, although I believe that clause 55 states it explicitly--that they will have to pay off £300 million of debt into the bargain. I urge the Deputy Prime Minister to tear up those figures, to recognise that the assets are much more valuable, and to sell them differently and for a sensible price. On the available figures and information, our charge stands that the Government's original intention was to sell those assets on the cheap for a net £15 million.

As my hon. Friend the Member for North Essex (Mr. Jenkin) has said, there is also considerable vagueness over the golden share. The right hon. Gentleman seems quite unclear about what the Bill says. It makes it crystal clear that the golden share, which we thought had been included to protect some of the British taxpayers' interests, can be overridden at the Secretary of State's request without the proper protections that we shall demand.

20 Dec 1999 : Column 546

Clauses 92 to 138 tackle the issue of buses. We object most strongly to the wish of the Secretary of State and the Minister for Transport to bring back the monopolist to the bus industry. The kernel of the proposals would, in given areas, enable quality contracts to lock out competitors for up to 10 years. Competition is best for the traveller and the passenger, so we shall fight that proposal tooth and nail. In addition, it may not be permissible under European law, and we look forward to exploring that issue.

Mr. Corbyn: Does the right hon. Gentleman recall that during the 10 years after the Tories deregulated bus services outside London, there was a consistent fall in passenger usage? Meanwhile, in London--the one place where bus regulation was maintained--there was a consistent increase in bus usage. Is that not the answer to the problem?

Mr. Redwood: I remember deregulation of the buses producing a lot of new services and retaining passengers who would otherwise have been lost. It is true that during the Conservative years people became a great deal more prosperous and many of them decided to buy and use cars. We see nothing wrong in that even if the Government, speaking with one of their voices, have trouble with that idea.

Mrs. Dunwoody: I know that the right hon. Gentleman studies very closely the reports of the Transport Sub-Committee, which I Chair, and I am exceedingly grateful to him. He will therefore acknowledge that the evidence that we received on areas in which privatised bus companies operated revealed the astonishing fact that, somehow, very few of them managed to compete with one another in the same places. As we looked at the map appended to our report, we might almost have thought that the companies did not want any real competition among themselves.

Mr. Redwood: That is not a good argument for trying to prevent competition by legislating for lock-outs of the kind envisaged in the Bill. [Interruption.] Ministers may suggest that I am shifting my ground, but that is not so. There are good examples of areas in which competition worked extremely well before Labour councils caught up and wrecked it. In Oxford, for example, there was tremendous bus competition until a Labour council arrived recently and tried to stop buses moving around the streets, as well as cars. That has begun to undermine the good work that deregulation undoubtedly did.

In my local area, the Liberal Democrat opposition were all ready to run a strong campaign against bus deregulation. Then someone kindly sent us one of their memos, which said "Don't bother with running this campaign, because unfortunately there are more buses around since deregulation, and such a campaign would backfire." At least they were sensible, unlike the Labour party on this occasion.

One of the Government's big problems is that they cannot make up their mind whether to make a U-turn. I have already asked the Deputy Prime Minister whether he stands by the statement in which he said:

20 Dec 1999 : Column 547

    Meanwhile, the proper Minister for Transport--Lord Macdonald--is busily briefing everybody that there is no chance of car usage decreasing over a five-year period. Not only is he saying that more cars will be bought, but that, as a result of that and of what he wants to do--which is to make motoring cheaper--there will be more journeys by car. His latest statement on the "Today" programme this morning--the official Government view--was that the best that he could ever do would be to have the odd year of zero growth in car journeys, while most years would see some growth.

Mr. Don Foster (Bath) rose--

Mr. Geraint Davies (Croydon, Central) rose--

Mr. Redwood: I am still making an important point.

We need to know from the Government why the previous Transport Minister--now the retired one--still seems to believe that he can reduce the number of car journeys over a five-year period, bearing in mind that over the first two years of the Government's term in office they have gone up substantially, when the true Minister is clearly telling us that there is no chance of achieving that. Lord Macdonald said:

He was clearly putting the boot into the Deputy Prime Minister's ambitions.

Next Section

IndexHome Page