§ 1. In this Schedule "the facilities" means the facilities and the services mentioned in subsection (1) of section one of this Act; "the grantee" means the person or persons to whom interests or rights are granted under the said section; "the gross takings" means the gross takings in respect of the provision of the facilities and includes—
- (a) takings in cash;
- (b) takings by way of credit given to any person;
- (c) what would have been cash takings or takings by way of credit, but for any trade or other discount, allowed to any person; and
- (d) the value of takings by way of any other valuable consideration;
§ 2. Not more than one grant shall be made by virtue of the said subsection (1):
§ Provided that:—
- (a) a grant may be made to more than one person jointly and may include such provision
352 as appears suitable to the Minister for the apportionment between persons of the functions of the grantee; and
- (b) in the event of the termination of an interest, whether by expiration, revocation or otherwise howsoever, the Minister may grant that interest with such modifications, if any, as are required by the termination to a person or persons other than the original grantee, so however that no such grant shall be for a term extending beyond a period of ninety-nine years beginning with the passing of this Act.
§ 3. The grantee shall procure such works to be carried out as are from time to time agreed between the grantee and the Minister to be requisite or convenient for the provision and maintenance of the facilities. The costs of and incidental to the carrying out of such works, as paid or incurred by the grantee, are herein called "the costs of construction".
§ 4. The grantee shall procure the operation and management of the said works for the provision of the facilities. The costs of and incidental to such operation and management, as paid or incurred by the grantee, are herein called "the costs of operation".
§ 5. For the purposes of the foregoing paragraphs and subject to the following provisions of this Schedule the grantee with the consent of the Minister may grant such sub-leases, licences or other rights and on such conditions as appear to the grantee to be requisite or convenient and with the like consent and with the consent of the Council of the City of Westminster (unless that Council is the grantee) may impose such charges on users of the facilities as appear appropriate.
§ Nothing in the foregoing paragraphs of this Schedule shall have effect to dispense with any permission or consent required under the Town and Country Planning Acts, 1947 to 1959, or under any other enactment (including this Act) or under any instrument made pursuant to an enactment.
§ 7. The grantee shall account annually to the Minister in such form and on such date as the Minister may direct and the accounts so directed shall distinguish, as regards expenditure and receipts, between capital and revenue.
§ 8. The consideration payable by the grantee to the Minister (whether or not it also includes a capital payment or an annual rent) and the terms of any grants, contracts or arrangements made by the grantee in exercise of his powers under the foregoing paragraph 5 shall be such that after the deduction or retention of the proper amount out of the gross takings the Minister shall receive such share (not being less than one-half) of the resulting balance as the Treasury may determine.
§ 9. The proper amount in relation to an accounting period means the sum of the following:—
- (a) the costs of operation, including such supervisory and managerial remuneration as the Minister may with the consent of the Treasury from time to time agree with the grantee or, in default of agreement or of any relevant provision in the grant, determine, and also including any rent paid to the Minister;
- (b) an amount sufficient to amortise the costs of construction, calculated over the term of the grant made by the Minister and so calculated on the basis applicable at the date of the grant to the amortisation of borrowing by local authorities from the Public Works Loan Commissioners;
- (c) eight per cent. of the last-mentioned amount; and
- (d) any deficiencies (with interest thereon) brought forward under the provisions of the next following paragraph.
§ 10. If in any accounting period the gross takings are less than the proper amount, the deficiency and any similar deficiencies for previous periods shall (with interest at the rate charged at the end of the period on borrowings for a term of five years by local authorities from the Public Works Loan Commissioners) be carried forward into the revenue account of the following period.
§ 11. The Minister shall lay before Parliament the accounts rendered to him under this Schedule.
§ Mr. Mitchison
I am much obliged to you, Mr. Deputy-Speaker.
The Amendment, which is to add a proviso to subsection (1) of Clause 1, in effect incorporates that rather long new Schedule as to the conditions of grant. The Bill, as the Minister told us on Second Reading, is an enabling Bill, and it enables him to grant interests and rights over land in Hyde Park so far as he thinks it necessary or expedient to do so to provide parking facilities, facilities for fueling cars and other facilities and services such as are, in his opinion, commonly provided—what I might call accessory facilities. That leaves the matter very much at large.
The Bill has had a rather curious history, which I mention to show the background of this Amendment. When it came before the House on Second Reading, we were told by the Minister that the proposed to grant a lease on a competitive basis fox the purpose of building and operating the garage. By the garage, he meant the underground parking place below Hyde Park. He pointed out in column 1016 of the OFFICIAL REPORT for 1st February:The Bill would permit me to grant such a lease either to a local authority or to a private developer. Discussions have already taken place with Westminister City Council, but at the moment it seems unlikely that the Council would be interested in taking a head lease.When we came to the Committee stage, he told us that he had come to agreement in principle, though not, of course, in detail, with the Westminister City 354 Council, and we had to reshape somewhat our attitude to the Bill. That is the present position.
On Second Reading, the right hon. Gentleman also pointed out twice that the project he had in mind—the operation of a garage at this key site, as he put it, might well prove lucrative. He said in column 1017:In that event, we shall, naturally, take steps to see that the Government participate in the profits.The right hon. Gentleman touched in the same subject in the next column, in which he said:But it must be a very fair deal from the Government's point of view, because ultimately, when the heavy capital cost has been recovered, this will be a key site and will be lucrative."—[OFFICIAL REPORT, 1st February, 1961; Vol. 633, cc. 1016–18.]The object of this Amendment is to ensure that the lucre that is to be obtained from the granting of interests in what is a Royal Park—Crown land subject to statutory restrictions, which requires the Bill to enable that grant to be made at all—shall finally accrue to the Government, and not to any contractor or developer.
When I say the Government, I must mention, also, the position of Westminster City Council. That is the parking authority, and it is in many ways, in our view, the most suitable authority to deal with a matter of this sort. Since the two right hon. Gentlemen primarily concerned, the Minister of Transport and the Minister of Works, have united with apparently little difficulty in disclaiming any intention or power to run the garage themselves, in these circumstances, all that the Amendment which I am now proposing does, or can do, is to provide that half the lucre goes to the right hon. Gentleman; and we must leave it to Westminster City Council and himself, as the responsible Minister, to see that the other half goes, as I hope it would go, to the Westminster City Council.
What I am concerned with is the attitude of the right hon. Gentleman to contractors in the matter. I think that the simplest way in which I can deal with it is to go shortly through the Schedule, which contains the meat of the proposals, say what it is that we suggest, and point out as I go that, though this is a rather long Schedule, and may appear at first 355 sight to be rather tightly drawn, it is, in fact, very much the opposite. It gives the right hon. Gentleman ample power to treat the contractor very fairly indeed, provided only that at the end of the day the lucre, which is what I call the ultimate proceeds, the equity of the transaction, remains with the Minister and does not go to some enterprising contractor.
Since the grant in this case is a very big one which requires a Bill to authorise it, it is made by a Minister who has no connection whatever with Hyde Park except what he assumes under the Bill to give away what he does not possess, and he is doing it because he is performing a public function. This is, therefore, no ordinary grant and it is signalised as something out of the ordinary by the very terms of the Bill. There are in the proposed Schedule definitions which for the moment I shall leave except to refer to the new definition of "gross takings", and "gross takings" is a phrase taken out of the Minister's own contracts in another connection. I think that that has some bearing on what we are talking about.
The Minister has a habit of building large motorways all over the country and on these motorways he provides service stations. He does it by arranging for the contractor to do the work and to pay a fixed rent or a percentage, or a combination of the two. That is all very well when one is dealing with service stations on motorways but, for the reasons I have already outlined, we are dealing, in Hyde Park, with a rather different matter.
A paragraph in the Schedule contains provisions on one side of the picture for making one grant instead of making half-a-dozen, which, I suppose, would be technically impossible in the language of the Bill, and on the other side of the picture for allowing the grantee to share his powers and make the necessary arrangements. The third paragraph deals with what are called costs of construction which, surprisingly, after they have been defined remain the costs of construction. They include digging the garage and, in this case, its maintenance. Then we have the costs of operation. Again, by attempting to obscure the issue by saying what they are, we come back to the fact that they are the costs of 356 operations—the cost of managing and working the garage, the petrol pumps and the ancillary facilities.
The fifth paragraph provides for the machinery of the matter by giving the grantee power to grant sub-leases, licences, and so on. It contains, slipped in at the end, what I trust the Joint Parliamentary Secretary to the Ministry of Transport will welcome warmly. It is a provision that, though he may dislike the burden put upon him, the Minister should be responsible for the charges imposed by the grantee on the users of the garage. The Minister is performing a public duty and it is right and proper that he should see that the grantee who is given power to impose charges should impose only reasonable charges.
The right hon. Gentleman, with his peculiar faith in private enterprise, believes, as I gather from what was said on Second Reading, that, prima facie, what Selfridges does is right and reasonable, but whatever his views he should discharge his responsibilities by saying that the person to whom the grant is made is not the sole person who should impose charges on the people who use the garage. They are, I believe, the class of people known as "essential long term parkers", E.L.Ps., people who have to come into London and leave their cars for some considerable time underground in Hyde Park. We all have considerable sympathy for them. I will not go into all that now, but, clearly, the least the Minister can do is to see that the charges are reasonable.
Paragraph 6 preserves the need for planning permission, which I think is right, and paragraph 7 provides for annual accounts. Then we come more particularly to the meat of the matter. The grant, as the Minister told us on Second Reading, is to be in the form of a lease. The lease implies rent. It implies, as lawyers would say, some consideration or another. This provides that the consideration under that grant and the terms of any arrangements made by the grantee—those are the arrangements made under paragraph 5—shall be such that after the deduction or retention of the proper amount out of the gross takings the Minister shall receive such share (not being less than one-half) of the resulting balance as the Treasury may determine.357 I said, "one half", but we know that the Treasury, if it scents some lucre about—and we were told twice by the right hon. Gentleman in a comparatively short speech how lucrative this is to be—might conceivably want a larger share. That, I think, is a matter in which I would not wish to interfere.
I repeat:…shall receive such share (not being less than one-half) of the resulting balance as the Treasury may determine.Clearly, all that will depend on what is the proper amount to be allowed. The proper amount was defined in the following paragraph in this way—first of all, the costs of operation. These will include the supervisory and managerial salaries and percentages, whatever they may be, that are reasonable in the circumstances. Their reasonableness is to be ensured by the Minister agreeing with the grantee and doing so with Treasury consent from time to time, or, if they cannot get an agreement, then something has to be fixed by the Minister himself.
I can see no difficulty about this. I do not know whether the Westminster City Council, so far as it may be concerned, and the Minister, so far as he may be concerned, intend to have one person to do the actual work of excavation and incur what are called the costs of construction, and whether they intend that same person to go on with the costs of operation. It may be that for this purpose some arrangement will be made by the Westminster City Council; I do not know. All I am concerned with is that when we come down to the actual cost of operation they should be the proper costs of running the place and they should be a reasonable amount for supervision or management, however one likes to put it. I can find no possible objection to that. One is always blind to one's own faults; at least, I am.
Secondly, what about the costs of construction? What is suggested about those—and this is in paragraph 9 (b)—is that they should be amortised year by year—this, I imagine, is good practice both officially and I suppose even in commercial circles—and that the amortisation should be over the period of the grant. There has to be a rate of interest for the purpose, and the rate of interest should be the rate charged to local authorities by the Public Works Loan Commissioners at the time when 358 the grant is made. That seems to me to provide for them.
Then it is said that those who do the construction must be allowed a proper remuneration for the work they do, and on that basis they are to be allowed 8 per cent. of the annual amortisation charge. I must say I see the point of the intervention of my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes). I think that 8 per cent. is rather good.
§ Mr. Mitchison
Good for the people who are doing the work and are getting that rate of interest. Be that as it may, there are other instances, and what I am concerned with is not so much whether it should be 8, 7 or 6 per cent. but that the final lucre should not rest with the people who have done the construction or with the people who do the actual management.
The next two paragraphs, in effect, provide for this. There is little doubt, I should have thought, as a matter of common sense, that at the beginning of the operation it will not be very profitable. For the first year or two, however, we deal with the accounting, it is, at any rate, possible, let me put it that way, that there will be no great profit. This simply provides for carrying forward the losses and in due course writing them off in the annual accounts. It is perfectly simple and, I trust, perfectly clear.
Finally, there is the provision that the Minister should lay the accounts of "the grantee", the accounts which will contain all this stuff, if I may put it that way, before Parliament. They will be, of course, annual accounts. That is the intention.
I should like to point out to the House that this does not preclude some arrangement about rent, which may be broadly similar to the kind of arrangement that is made in respect of the service stations on the motorways. This is something that goes beyond that. We have to leave it to the Minister and to the Treasury, which takes a very proper interest in these matters, to see that the final result in the annual payments is not excessive. But it does not tie the right hon. Gentleman to any particular form of agreement with the contractors or with "the grantee", as he is called 359 here; it simply lays down the conditions which must be fulfilled.
If this Schedule were accepted by the right hon. Gentleman as, undoubtedly, he will accept it, the only result would be not that he would be cramped in his negotiations or arrangements, but that at the end of it if this were, as he confidentally expects it to be, a lucrative proposition, the benefits would accrue to the public. He is performing a public duty in this matter and he is dealing with a public site of a somewhat unusual and special character. I cannot believe that it is right, in these circumstances, so to arrange the Bill or the Schedule in it that the final result was that the gross takings went to the contractor. I think it right, in a case of this sort, where we are dealing with Crown property and acting in the interest of the public, that the final result, the ultimate lucre, should come to the responsible Minister of the Crown. That is the object of the Amendment.
No private Member has the facilities which, properly and rightly, are open to the Government, and if the Minister proceeds to pick this Schedule into bits on small and niggling points he will do something which I do not expect him to do and which will serve no useful purpose. What he has to answer is the substantial point: will he do what he has done in connection with service stations on motorways, allow the contractor to reap the ultimate fruits of the enterprise, or will he see that he gets the ultimate profits—in this case half of them, because of the position of the Westminster City Council?
That is the broad question which has to be answered. I repeat for the third time, with my apologies to the House for doing so, what I believe to be the common sense and the justice of the matter. When a Minister of the Crown is taking action which is required and can be justified only by a public need; when, for that purpose, he is dealing with public property of a special kind; when, for that purpose, he intends to mess about with a resort of the public such as Hyde Park, and intends to do things which require some justification and which we in the House nevertheless believe should be done, then be must see 360 that the public, who are carrying the burden of this, and for whom it is being done, receive the final proceeds of the transaction. At whatever rate the service charges are fixed, the ultimate beneficiary should be the public.
I urge the right hon. Gentleman to get out of the contractors' frame of mind which, from time to time, seems to afflict him like a political disease and to treat this matter as it ought to be treated—as something which arises out of his position as Minister of Transport.
§ The Joint Parliamentary Secretary to the Ministry of Transport (Mr. John Hay)
I assure the hon. and learned Member for Kettering (Mr. Mitchison) that I do not intend to approach his Amendment and the new Schedule in the niggling frame of mind which he thought I might have. It is true, as he acknowledges, that there are certain drafting defects in the text of the Schedule, but I propose to deal with the issue which he raised on the basic arguments.
It is clear to anyone who has followed our proceedings both on Second Reading and in Standing Committee that the Opposition's attitude throughout has been to ensure that if private interests are to run the garage, whoever builds it and whatever may be the leasing arrangements, the profit which these private interests are allowed to make must be limited to a reasonable figure. The Opposition say—and rightly—that this is public property, this is Hyde Park, this is a most valuable site in the centre of London and therefore, quite apart from any issue of amenities, which is dealt with elsewhere in the Bill, there must be no question of profiteering.
Perhaps they are a little encouraged in this attitude by a misunderstanding, which has been repeated tonight by the hon. and learned Member, of what my right hon. Friend said on Second Reading about the possibility that the operation of the garage would be lucrative. It is true that my right hon. Friend said:Nevertheless, we shall bear in mind that the operation of a garage at this key site may well prove lucrative".With respect, I think that the hon. and learned Member and his hon. Friends have not given equal weight to what my 361 right hon. Friend said in the next sentence, because he continued:In that event, we shall, naturally take steps to see that the Government participate in the profits."—[OFFICIAL REPORT, 1st February, 1961; Vol. 633, c.1016–17.]If I may sum up what I conceive to be the attitude of the Opposition, it is that fetters must be placed upon the Minister's power of leasing and on the terms of the lease to ensure that the profit which comes into private hands as a result of the operation of the Bill is not excessive and also to ensure that the Exchequer receives any excess.
If I may quote what the hon. and learned Member said on 1st February, on Second Reading, he summed it up in this way:This is a case in which the Government might reasonably say to the contractor, We shall have the profits once you have made a reasonable return on a percentage basis on whatever you spend on doing the job for us'."—[OFFICIAL REPORT, 1st February, 1961; Vol. 633, c.1025.]I do not think I am over-stating when I say that that has been the Opposition's attitude throughout. To achieve this end they moved a number of Amendments in Committee. Anyone who knows the hon. and learned Member will not be surprised that those Amendments, which bore traces of his own fair hand, exhibited various degrees of artistry and ingenuity. The fact is that they all had one common feature; they all restricted to a greater or lesser degree the Minister's freedom to negotiate with the potential lessees of this garage.
For example, at one stage an Amendment was moved that all the proceeds from the garage operation, other than the expenses and a fixed percentage on the capital, would have to be paid over to the Minister. Another Amendment said that the grant would have to be made to the Westminster City Council and no one else. Another Amendment said that it should be made to a local authority and not to a private interest. A further Amendment said that the terms of any lease would have to be approved by an affirmative Resolution of both Houses of Parliament.
We now have the Schedule. I freely admit that it comes closer to our own position than did some of these earlier variants on the theme. It does not re 362 strict us in the choice of a grantee, nor does it prescribe Parliamentary control of the terms of the lease, nor does it reserve all the profit in the transaction to the Minister. But—and this is the essential point—it still refuses the Minister a free hand in the negotiation of the terms of the lease. This, I am afraid, we cannot accept, and that is why I cannot accept the Amendment.
I must therefore tell the House why we ask that the Minister should be given a free hand. In the Bill and in the whole of the operation we have two principal objectives, and in these objectives we are, I understand, fully supported by the hon. and learned Gentleman and his hon. Friends. The first is to get a good garage in being for public use as soon as we possibly can. The second is to get as good a bargain as we can for the public purse. Nothing divides the two sides of the House on these objectives. But to achieve these objectives, as we see it, our need is the maximum flexibility in negotiation. We cannot tell until the negotiations proceed further what sort of reaction we shall get. For example, we hope, as has been said before, to agree terms for a head lease with the Westminster City Council, but it is possible that we may not succeed. Terms that might be acceptable to private enterprise might not prove to be acceptable to a local authority, and vice versa. Again, terms that may be suitable for the first grant might not be suitable for subsequent grants which would fall to be made a good many years from now under conditions that none of us can now foresee. Again, until we actually test the market we shall not know precisely what length of lease is necessary.
As to the division of the profits—the financial terms, if I might so call them—there are two possible extremes. On the one hand, we might ask for a small ground rent and a substantial share of the profits—and this is the sort of thing that is outlined in this proposed new Schedule. On the other hand, we might ask for a large ground rent and a very much smaller share of the profits. In between those two extremes there are all manner of possible situations.
One might speculate at some length on the different variations possible, but in all these essential points—and this I want to impress on the hon. and learned 363 Gentleman—the Schedule, were we to accept it, would bind our hands. Let me explains how. As drafted paragraph 2 (b) limits the duration of the power to lease to 99 years or less. Paragraphs 8 and 9 taken together would bind us to receive at least half of what I might call the net revenue; that is to say, the gross takings less the cost of operation, the rent, amortisation provisions and an 8 per cent. profit. The deficiencies are to be carried forward from year to year at the Public Works Loan Board rate of interest.
I am advised that it is most unlikely that the Westminster City Council or a private developer would agree to such terms. If that were the case, if the proposed Schedule were added to the Bill, and if we were bound in this way to offer only those terms then, should we find that nobody would accept those terms, we would be in a very great difficulty. We would have only two alternatives; either to come back to this House and ask for amending legislation—with all the consequent loss of time that that would entail—or to have no garage at all. I must, therefore, advise the hon. and learned Gentleman and his hon. Friends that on that ground alone we must resist this Amendment. It is true that there are various minor drafting faults, and I shall not take up time in mentioning them.
That is not the only ground on which we object to what is proposed. It is true that this project for an underground garage at Hyde Park is in some respects unusual. We are dealing with a Royal Park, and there must therefore be special provisions and safeguards for amenities, but once that point of amenity is taken care of—and I claim, and I do not think that the other side disagrees, that the Bill does protect the amenities—in essence this is nothing more or less than another letting by the Crown.
A number of precedents and examples of similar Crown letting were given in Committee. I shall not traverse them again, but the fact that this site is a valuable one is not something that, in our view, requires the type of treatment proposed by the new Schedule. Much Crown land is extremely valuable. I remember being told a couple of years 364 ago, when I had somewhat limited responsibility for civil aviation matters, that the most valuable land in the whole of the United Kingdom was not, as one might imagine, in the centre of the City of London but the central terminal area of London Airport. That is the case.
In all of these lettings of Crown land, Government Departments, with the watchdogs of the Treasury behind them, are trusted by Parliament to fix the best terms that they can for the public purse, and Parliament—the House of Commons in particular—through the Public Accounts Committee has always the power to call the Department to account if it thinks that the Department has behaved improperly. I suggest to the House that these safeguards have always been proved to be sufficient in the past and can therefore be treated as sufficient for this project.
I come to the central point of the argument, and it is a point relevant not only to this discussion but to everything that has gone before, both in the Standing Committee and on Second Reading. This is an enabling Bill. Its purpose is to give the Minister of Transport limited powers for letting land in Hyde Park. If the House decides to write into this enabling Bill all manner of controls over the Minister's powers of negotiation, I must frankly and truthfully warn hon. Members that it will jeopardise the prospect of obtaining the best results for the public purse. That is one of the objectives with which the Opposition as well as ourselves are in sympathy.
If, of course, the Opposition say that they just do not trust my right hon. Friend and his Department to play fair with the public interest, or if they really and honestly think that on some vague ideological grounds he wants to give some large and unconscionable profit to private enterprise, we shall not only have to deny that that is a favourable and fair imputation but will also have to ask our hon. Friends to support us at the appropriate time.
I do not, however, honestly think that that is what the hon. and learned Gentleman and his hon. Friends really want to say. I do not think they really go as far as that. When it somes to the point, I think that they will accept that we wish to do right by the public interest, and that for these reasons we should not 365 have our hands tied in the negotiations on which we are about to embark. If, on consideration, the hon. and learned Gentleman comes to the same conclusion, I suggest that he considers withdrawing the Amendment. If not, we shall have to resist it.
§ Mr. John Diamond (Gloucester)
I was not one of those who had the good fortune to be a member of the Standing Committee which considered the Bill, and I am, therefore, unable to know precisely what was said. I hope that I shall not weary the House if, by mischance, I refer in principle to one or two matters which were fully argued at that time.
That is inevitable and, presumably, on Report it is understood that there are those who cannot serve on every Committee, and that is part of the reason for having this part of our procedure. Listening with a fresh and completely unbiassed and objective mind, I was very disappointed by the Parliamentary Secretary's reply. He dealt with certain arguments relating to the Schedule and the Amendment, but not with the other side of the case.
I do not have HANSARD with me, but I understand that on Second Reading the Minister undertook that in certain circumstances the Government would participate in the profits. The Minister is unable to say for certain that the profits will not be of such dimensions that those circumstances ought not to apply. Nobody can say at this stage that whatever arrangement is made may not be too cautious and too conservative and based on forecasts of traffic development which might not mature, or which might be totally inadequate, but very considerable profits might result from a lucrative arrangement.
Nobody, even with the greatest possible judgment and ability to forecast, can say for certain that those circumstances will not arise, putting it very modestly indeed. We therefore thought that in that situation in either the first or future grants—and that does not affect the principle—considerable profits might accrue to the contractor. The Minister said, on Second Reading, that the Government would participate in the profits in those circumstances.
That is not an enormous Bill, and although I have not studied it in detail I 366 cannot find any provision giving legal effect to the Minister's undertaking. Nor can I find any provision in which the Minister is limited in any way as to the kinds of terms which he can impose and the way he shall approach the contract. In short, I can find nothing in the Bill which limits the Minister in any way.
It is going far too far for the Parliamentary Secretary to resist the Amendment just because my hon. and learned Friend the Member for Kettering (Mr. Mitchison), whom I support in this matter, wants certain provisions which might not be appropriate for every possible contractor and in which there might have to be a slight variation—a contractor preferring 49 per cent. instead of 50 per cent. With his typical elasticity and breadth of mind, my hon. and learned Friend would be willing to adjust from 50 per cent. to 49 per cent., but that does not affect the principle of what we are discussing.
What we are saying is that there is a prospect, or at least a possibility, of large profits being made on a Government letting or grant as a result of limiting the rights of individuals, namely, the nation. As it is impossible for human beings to be sure of what will result, the only way to deal with the matter is to share the profits. But the Bill does not mention sharing profits in any way. The Parliamentary Secretary's arguments were totally unconvincing and in some ways irrelevant. I do not understand his complaint about the period of ninety-nine years, for that is mentioned in Clause I itself, and I do not understand why he criticised my hon. and learned Friend for repeating words already used in the Bill.
The Government are requiring a completely free hand to do what they like and I do not see why they have consulted Parliament at all, except to get the powers. I do not see how the Minister regards his position and responsibility vis-à-vis Parliament.
The example of London Airport has been quoted, and it so happens that I was concerned with this matter. London Airport was run by a Government Department and had certain facilities to let and grants to make—I am referring especially to a news theatre. So as to 367 get the greatest competition, it advertised the fact that facilities were to let. It was suggested—and I know that it was because before I was a Member I wrote the letter suggesting it—that the proper way to deal with the grant was for the Ministry to retain the profits out of running the news theatre. That suggestion was turned down, presumably on the ground that the Ministry did not feel that it could accept a contract in which the contractor carried out his duties for a fixed sum, as we now propose, the Ministry retaining the profits.
It is no use the Parliamentary Secretary quoting that as an example, for that is an example of precisely what we fear, namely, that terms will be made deliberately preventing the accrual of a portion of the profits to the people from whom the rights and amenities and enjoyment of facilities have been taken away. The Parliamentary Secretary's reply was totally unsatisfactory and does not meet the main complaint that there is nothing in the Bill in any way to limit the Minister.
§ Mr. Norman Cole (Bedfordshire, South)
I wish to support my hon. Friend the Joint Parliamentary Secretary in rejecting this Amendment. This is a new project to put an underground garage under a Royal Park. If we were to try to exhaust all the possible business alternatives—and this is a business proposition—and put them in various Schedules as instructions to the Minister we would have a Bill of about 50 pages. To attempt to include one constricting Schedule clearly to tie the hands of the Minister is a quite impossible situation.
If we were to pass this Schedule and attach it to the Bill not only might the contractor lose in the long run, but so would the Minister, because we would so limit the number of people who would look at the proposition. I doubt very much whether Westminster City Council would take it on. I certainly should think twice about it. We would be saying to the public that they should take on a very visionary project. I do not think that there would be many takers.
There is sometimes in this House and among many people outside the attitude that the Government should say, "Heads I win, tails you lose." That will not do at all. No one wants to see a developer 368 getting a disproportionate amount of the profits. I am not supporting that in the slightest, but, on the other hand, I do not want to see anyone putting capital into venture and then having to ask after two or three years to be released from his lease because he is not making enough for it to be worth while. All these things could arise under a constricting Schedule and it would be a drawback to the Bill.
Over and above everything else, the one thing I would have expected from the Opposition, if they wanted to serve the public—and, after all, the purpose of the Bill is to provide off-street parking—would be to put handcuffs on the wrists of my right hon. Friend, and to include in this Schedule the maximum charge for cars in the garage. There is no mention of that. This Schedule starts nowhere and gets nowhere. I very much support the view that we should reject it. If we go into the Lobby, I should be happy to vote against it.
My right hon. Friend the Minister, of all members of the Government, has experience by which he can bargain for a good deal on behalf of the Government. I am prepared to trust my right hon. Friend, as a business man, to get the best possible deal for the Government while bearing in mind that, unless there is some livelihood to be made by other people, there will be no one to pay taxes.
§ Mr. Emrys Hughes
I certainly hoped when I heard the very convincing case put from the Opposition Front Bench that the Government spokesman would announce acceptance of this proposed Schedule. Instead of that, we have had all sorts of pettifogging reasons against it which failed to answer what I thought were the absolutely convincing arguments of my hon. and learned Friend the Member for Kettering (Mr. Mitchison). I hope that when we go into the Division Lobby hon. Members opposite will have second thoughts.
This, after all, is purely public enterprise and public initiative. This is an underground facility which, if it had not been for the fact that there is a publicly-owned park, it would not have been possible to develop. The park above being public and Crown property, I fail to see any logical reason why the benefits should not accrue to the public. The 369 difference between the two sides of the House is that we are public-minded and hon. Members opposite are contractor-minded. In my association with public life I have always found, in discussing such matters as are contained in this Schedule, whether in a town council, in a county council or in the House of Commons, that the contractor is hoping to make the best bargain for private vested interests while the Socialists are arguing for public enterprise.
The background of the Minister of Works is public contracting. I apologise, I mean the Minister of Transport. The Minister of Works has the background of landowning. The Minister of Transport has a land speculating background.
§ The Minister of Transport (Mr. Ernest Marples) indicated dissent.
§ Mr. Hughes
I apologise if I have done the right hon. Gentleman an injustice, but I was aware that at one time when he spoke from the Opposition side of the House he was very enthusiastic about private contracting enterprise because he used to be associated with it. He is now a Minister of the Crown and I thought he would use his influence on the Government for the acceptance of this Schedule.
It is no good the hon. Member for Bedfordshire, South (Mr. Cole) pretending that there is to be any possibility of a loss in this enterprise. It is going to be a gold mine. Here will be garage facilities in the very heart of London which is crying out for those facilities. There are to be underground park facilities with a petrol filling station and ancillary services. Will there not be a profit, a very big profit, to be made out of the petrol filling station? Of course there will be. The vultures are there already. I submit that the House is perfectly entitled to insist that this Schedule should be put into operation.
Indeed, I am surprised at the Ministry of Works which is prepared to spend so much public money in other parts of London not very far away from the site of this underground garage. We have heard recently at Question Time about this. I wonder why the Minister of Works has not used this opportunity to say "Here we have this underground garage and a possibility of making a very big income for the Government, 370 in order to offset the balance on the expenditure which some of us think is unjustifiable not so very far away." We hear of the possibility of a return on capital of 8 per cent. Here at several points in this operation we have financial interests, contracting interests, oil and petrol vested interests and every other kind of harpy, vulture and parasite which preys on private enterprising. [HON. MEMBERS: "Oh."] Of course they do.
The more I have read this Schedule—I have studied it very carefully; I do not think I could have improved upon it if I had drafted it myself—the more reasonable it becomes to me. So I hope that when we vote on this matter there will be a revolution on the part of the publicly-spirited hon. Members opposite and that the Government will be forced to accept the Schedule.
§ Mr. Mitchison
I should like to reply to what the Government have said on this matter. First, let us be quite clear that there is no doubt that the right hon. Gentleman himself not only thinks that this may be a lucrative proposition but thinks that it will be. I should have thought that we could really count on that even without the right hon. Gentleman's assistance. He picked up confidence as he went along.
In column 1017 of the OFFICIAL REPORT of the Second Reading debate the right hon. Gentleman said only that it "may" well prove lucrative, but in column 1018, after a few more minutes of his own eloquence, he said:But it must be a very fair deal from the Government's point of view, because ultimately, when the heavy capital cost has been recovered, this will be a key site"—I should have thought that it was one already—and will be lucrative. It must be a fair division between the Government and private enterprise."—[OFFICIAL REPORT, 1st February, 1961; Vol. 633, c.1018.]If Parliament is not allowed to intervene to say what a fair division between the Government and private enterprise is, then I submit that we are not doing our duty as a House. It is our business to see that there is a fair division, and it is not enough to pass an enabling Bill leaving a question of this sort, dealing with this particular piece of property, entirely within the discretion of the right hon. Gentleman.
371 When the right hon. Gentleman or the Parliamentary Secretary gets up and says, "You will never find a contractor to do it on those terms", my first reply to him is that there is not a jot or tittle of evidence that he has ever tried, and he has had every opportunity of telling us so. Every time the Minister concerned gets up and says, "This is impossible", but never does he get up and say, "I have approached various persons on these lines, and they say that this is not good enough." If the Minister asks me to accept, as a matter of common sense, the proposition that nobody will incur the costs of construction when all he gets is an 8 per cent. return on his outlay, I find it very difficult indeed to accept it.
When one is further told that nobody will incur the costs of management un less he gets something more than what the Minister and the Treasury agree with him is reasonable remuneration for supervisory and managerial services, my reply is that I do not believe that businessmen are all quite such vultures as the Government would have us believe. We are talking about vultures tonight. The birds are topical. I simply say that I think that the Tory Party is not doing justice to the business community. Hon. Members opposite tell us that nobody will do any work for the Government unless he is—
§ It being Ten o'clock, the debate stood Adjourned.