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Stagecoach hits back
Page 23
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IN Perth-based Stagecoach has refuted the charge made by Labour front bench Scottish spokesman Brian Wilson, that its acquisition of Hampshire Bus was "an outrageous fraud on the public purse."
During a Commons debate on the privatisation of the Scottish Bus Group, Wilson cited the fate of Hampshire as an example of the worst aspects of privatisation in England and Wales. Stagecoach, he said, had bought the company for 22 million and only a fortnight later sold off the coach station for £4.1 million. Most of the bus services were then sold to Solent Blue Line for around 21 million, leaving Southampton bus users in the lurch, said Wilson.
"The numbers mentioned are not accurate and they were used in isolation," Stagecoach managing director Anne Gloag told Commercial Motor. "We're not denying that we made money on the sale of property, but that money was reinvested in the form of major orders with Alexander of Falkirk and Leyland. It's not true that money was stripped out of the company."
Wilson also said the Government's financial advisers "must be bent or stupid" and he voiced fears about the future of valuable city-centre bus stations in Glasgow and Edinburgh if safeguards were not put into the Bill. If nothing was done, it would be "a potential assetstripper's charter" he claimed.
Labour MPs also questioned the £500,000 of public money invested in Stagecoach by the Scottish Development Authority. To this, Gloag responds: "We have put together a 25 million consortium which was very over-subscribed. It was not as though we put the SDA under any pressure." The SDA declined to comment.
Labour failed to push through amendments to the Transport (Scotland) Bill designed to protect passengers and bus workers in the after math of privatisation.
Wilson proposed the creation of a watchdog committee to monitor privatised companies, and a rule banning the re-sale of companies within five years without employees' consent.
• Junior Minister Lord James Douglas-Hamilton said that such a committee would defeat the de-centralising purpose of privatisation, and that the resale rule would make privatised firms uncompetitive.
However, he assured MPs that no single buyer would be allowed to purchase more than one Scottish Bus Group subsidiary, and promised that the Government would look at ways to discourage asset stripping.
El Anne Gloag is on the shortlist for the 1988 Veuve Clicquot Business Woman of the Year award. The winner will be announced on 15 March.