asked the Secretary of State for Transport what proposals have now been put to him by British Transport Hotels for the sale of interests in Gleneagles and the Caledonian and North British hotels in Edinburgh; what valuation has been put on the three hotels for the purpose of the sale of interests in them; whether this is based on a professional valuation; if he will take steps to ensure that safeguards are included in any such sale so that a takeover of the three hotels by competitors is excluded for an agreed and stated period; and if he will make an early report to the House on this matter.

I outlined the Railways Board's proposals for these hotels in the answer which I gave to the Member for Kingston-upon-Hull, East (Mr. Prescott) yesterday.—[Vol. 5, c. 912.] The proposals have been produced by the board on the advice of British Rail Investments Ltd. and British Transport Hotels under their existing powers contained in section 14 of the Transport Act 1962. My role is confined to consent to the acquisition of shares by the board.I am glad to have been able to authorise the British Railways Board to pursue this plan. I share its belief that the plan will work to the advantage of the hotels as businesses, of the staff who work in them and of the tourist industry generally in Scotland. The board sees the plan as making a decisive break from a long period of under-investment, especially in the North British and Caledonian hotels, which has led in recent years to a record of poor returns.The method of creating the new company, on which the main advisers to the board have been the British Linen Bank, involves valuation of the businesses at £10·25 million on the basis that the British Railways Board, through British Transport Hotels Ltd, will retain a one third stake in the new company.British Transport Hotels will realise £5·75 million from the transaction and an additional £4·5 million shares and loan stock.Had the board decided to sell the three hotels outright, it has been professionally advised that the total market price might have been £12·73 million. The discount arises because the sales is not outright. I do not recognise the figure of £4 million quoted as the discount on the price by the hon. Member for Kingston-upon-Hull yesterday nor his figure of loss of income.Arrangements for the future trading of shares in the company or the sale of its assets are a matter for agreement between the potential investors including under this arrangement British Rail.