I publicly congratulate the Secretary of State on his appointment to the Cabinet. He has commented on the addition of my hon. Frind the Member for Westhoughton (Mr. Stott) to Labour's Front Bench transport team, and on the fact that there will now be more Shadow Transport Ministers than Ministers. That, however, is totally appropriate, because the Labour Party attaches at least 50 per cent. more importance to maintaining and expanding public transport than do the Government, who are apparently more concerned to see its diminution and are making that clear in the Bill.
At a time of the most massive financial crisis facing British Railways, the Bill brings to bear upon them provisions which are at best irrevelant to that crisis and, at worst, downright damaging to their future. The Secretary of State is proposing powers to force them to sell their profitable subsidiaries. He said that it gives powers to the BR holding company, which is not mentioned in the Bill. But BR will have no power to sell subsidiaries without the Secretary of State's consent. That is made clear in clause 1.
My right hon. and hon. Friends and I would be opposed to the forced sale of BR subsidiaries at any time. However, we can hardly envisage a worse time at which to force that sale than the present. The Government are apparently seeking to have the subsidiaries sold as cheaply as possible, to have the least possible sum realised by the public for their considerable investment in the railways over the years.
I do not necessarily dissent from the Secretary of State's view that there has been insufficient investment in British Railways' subsidiaries. Nevertheless, investment in recent years has been significant. It has put these businesses in a positon that in normal trading times, rather than during the massive recession that is being presided over by the Government, would enable them to make considersable profits. The railways are prevented by their external financing limit, which the Government set, from obtaining loans or making leasing arrangements to meet current and future needs. Whether the Bill can assist British Railways or their subsidiaries in dealing with the problem to even a limited extent will depend upon the agreement of the Treasury that the proceeds of the sale should be added to the external financing limit. That clearly would be the only circumstance in which British Railways could be assisted by the sale of subsidiaries.
If that is not to be the case, and if the Secretary of State intends that whatever money is realised by the sale should be deducted from the borrowing powers of BR, they will have no more money than they have at present. In other words, BR will be deprived of any future income from the subsidiaries and of any addition to their current financing. If the Secretary of State intends that the proceeds should be further invested in the subsidiaries, the benefit will accrue to those who acquire the subsidiaries. BR will benefit only to the limited extent that they retain any holding in those subsidiaries.
The effect of the Bill could therefore be greatly to worsen, even in the short term, the financial position of British Railways. The explanatory and financial memorandum suggests that one of the purposes of part I is to reduce the call of British Railways on the National Loans Fund.