I would welcome that opportunity. The whole trouble with the Government is that they cannot distinguish between Government borrowing for this sort of purpose and the wastage which it generally brings.
In practical economic terms, the Government will be placing into the hands of shareholders £70 million worth of cash. If the Minister of State really considers that that will not result in an increase in consumption, he must have a remarkable manner of assessing people's likely reactions. In addition, in term; of pressure upon resources, I could quote to the hon. Gentleman a number of speeches by some of his right hon. Friends who are now in the Cabinet arguing how, for example, road building created no pressure on imports and very little pressure on manpower, but that the economic return in the saving of other services as a result of road building made it a viable economic proposition. However, the Government have decided to do away with some of the investment in roads and to invest, instead, in buses and coaches.
Think of the effect of this Bill on opinion abroad. The Government have recently gone round the world explaining why our currency has had to be devalued and why those who deposited in London had to lose 14 per cent. of their savings. Within weeks of doing that, they come to the House and ask for £70 million to nationalise buses and coaches. How will they explain the effect of this to the people overseas from whom we are borrowing this money? They will have witnessed today with great interest the statement of the Prime Minister. Doubtless they will have noticed that, at the moment that he went out of the House, another of his Ministers took his place and asked for £70 million to nationalise buses and coaches. Then, to add the final insult to those who are lending the money, they announce today that they intend to publish the Industrial Expansion Bill as well. It is a remarkable combination of events.
The explanation given by the Minister of State was, to say the least, inadequate. Let us take the specific position of the B.E.T.C., including the minority interests. As I have said, I gather that a total of £52 million will be going to them, £35 million to the shareholders in B.E.T.C. and f17 million to the minority shareholders. If I am wrong in those figures, no doubt the hon. Gentleman will correct me. They are the figures which I have been able to obtain from those who know something of the dimension of the minority interests.
The current return upon those bus services is 5¼ per cent. So here we have a Government, with an 8 per cent. Bank Rate at present, having to pay well over 7 per cent. for Government borrowings, borrowing money at between 7 per cent. and 8 per cent., and investing it in industries where they get 5¼ per cent. And that is a 5¼ per cent. in relation to something that has been diminishing over the years, and not increasing; 5¼ per cent. that, on all the projections of the Government as to the future of our bus services, the manner in which the public are going over to their own motor cars, and so on, is likely to have a declining earnings power.
" But ", says the Minister of State, "the great advantage is that there will be economies; we will be joining bus companies together and thereby getting a better yield". Has he consulted the Transport Holding Company on this? Last year a paper was presented by Mr. Glassborow, who is head of economic research at the Transport Holding Company—the nationalised company that is making this purchase—to the Public Transport Association. That is well up to date.
Mr. Glassborow referred to the Government White Paper on transport, and commented particularly on the phrase in it which reads:
In many of these areas the efficiency of bus operation is hampered by the small size of the Undertakings.
On that statement, the head of economic research at the Transport Holding Company commented:
There is no evidence that the customer is the more satisfied with the bus services provided, the larger the size of the Undertaking. If efficiency is to be measured by costs, there is equally no evidence that larger size reduces costs. So far as the cost of municipal services are concerned, the following table, based on rather out-of-date figures. cannot be regarded as conclusive. As I have said earlier many factors other than the size of the undertaking must also affect their costs. I have confined my attention to the municipal undertakings, because of their number, wide range of size and the largely urban nature of their territories.
There then follows a table that shows the average working expenses per car mile. It shows that with a fleet of up to 30 buses the expenses are 37d., and for a fleet of between 31 and 60 buses the figure is 39·4d. So the table continues to rise until for 1,000 buses we have a figure of over 46d. The whole statement of the head of economic research at the Transport Holding Company, and the whole of his argument, was on the point that no case has been made that to increase the size of the undertaking reduces costs. Indeed, what evidence
there is—and he admits that it is not conclusive—points the other way.
Therefore, we have a Government, with an economic crisis at hand, who intend to borrow £70 million, and the Minister gives no explanation where the money is to come from. His explanation is, "We shall give it to the Transport Holding Company—a good sound commercial concern—at the going rate, so we will be getting back in interest very much more from the Transport Holding Company, which will, therefore, reduce its surplus in order to meet the interest that the Government will have to pay in making more borrowings from the public."
There are only two ways in which the £70 million can be obtained by the Government: one is to increase taxation by £70 million and the other is to go to the public and borrow yet a further £70 million at the present very high rate of interest. Any commercially-minded person who wanted to go in for a transaction of this kind would not dream of doing so at a time when an 8 per cent. Bank Rate prevails. Any sensible commercial person would go in for a transaction like this when borrowing rates were at their lowest, not their highest. But not the Government when, with their gay abandon, they decide at this moment to introduce such a Bill as this and go to the public for £70 million.
For us, there was what I thought was a particularly touching remark by the Minister of State. He said that three bus companies have actually come forward to be taken over. I am surprised that only three have, because we know how the Government operate. Indeed, we know how they started this particular transaction. They published a White Paper in which they stated that within the P.T.A. areas they intended to compulsorily purchase the best routes of the bus companies. They then started negotiations with B.E.T. Likewise, they now have before Parliament the Transport Bill, in which they take power for the P.T.A.s to compulsorily purchase the best routes of private operators.
Then, of course, they are kind enough and considerate enough to say, "If, with the taking over of the best routes of private operators, the private operators' businesses are no longer viable, we will be willing to buy the whole of their businesses". What a generous Government they are! No one, in such a circumstance, with a Bill before Parliament threatening every private bus operator in the country with being taken over—the Minister of State shakes his head: can he say which bus company operating stage services will not be affected?