§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. MacArthur.]
§ 10.0 p.m.
§ Mr. Niall MacDermot (Derby, North)
I wish to raise the question of the sale of land adjoining St. Mary's Maternity Home at Derby which involves a curious decision taken by the Minister of Health. The problem arose in this way.
Derby, like many towns in this country, suffers seriously from traffic congestion. Like many other towns it has tried to help solve that problem by the construction of a modern, inner ring road with a dual carriageway. Two sections of this road have already been built and another is under construction. One section which is most urgently needed is known as the Bridge Gate section between Kings Street and St. Mary's Bridge in Derby.
In order to get the necessary widening of this section of the road under the plans submitted to the Minister of Transport it will be necessary to acquire the site of St. Alkmund's Parish Church. The attitude of the Church authorities has been most co-operative over this. They have said that they were prepared to dispose of the site to the corporation, provided that they could get a suitable alternative site for a parish church within the parish. If they could not get a suitable site, they would vigorously oppose the acquisition, and it is quite clear that there would be very widespread opposition throughout the parish, holding up the inner ring road.
It came to the notice of the Church authorities and of Derby Corporation that the Minister of Health was proposing to dispose of some land which adjoins this maternity home and which was surplus to his requirements. The site is one which the Church authorities regard as being wholly suitable for their purposes and indeed quite ideal. It is in the centre of the parish and not only is it an ideal site from every point of view but they and the Corporation are satisfied that it is the only available land suitable for this purpose. It also has some historical associations in that the land was formerly part of the garden of the provost's house and was sold by the former provost to the Ministry with a view to an extension of 1053 the maternity home which was then proposed, but the proposal subsequently fell through. In these circumstances, the Corporation requested the Minister, who had already advertised the site for sale at public auction, to withdraw the land from auction pending negotiations for sale by private treaty with the Church authorities.
On the Minister resisting that proposal, it suggested that negotiations should be conducted through the district valuer. The Minister still refused and he was then asked to receive a deputation, which he kindly consented to do. The deputation consisted of the Chairman and Deputy Chairman of the Highways Committee, the Town Clerk, my right hon. Friend the Member for Derby, South (Mr. P. Noel-Baker) and myself. We discussed the matter very fully and urged upon him all the considerations which made the Corporation feel that the Minister's attitude was obstructing something which was undoubtedly in the interests of the people of Derby.
It became clear that the Minister's objection, as indeed I think it has been throughout, was based only on one thing, and that was an ideological belief that for some reason he is under a public duty when he sells land to put it up for public sale so that everybody may bid for it. The public authority which is concerned here, the Derby Corporation, is itself the planning authority. It is the body which has been charged by Parliament with the duty of assessing the relative merits of different needs for land use, and the members of the Corporation are the people who decide for what purpose land should be used. Considering the matter fully and fairly as the planning authority, quite apart from its own requirements as a highway authority, the Corporation was fully satisfied, and told the Minister that it was fully satisfied that this proposal was in its view undoubtedly to the clear benefit of the town as a whole. In spite of that, the Minister still persisted in his refusal.
I should like to make it clear that there is no question of the Minister not getting a proper market value for the land. I do not think that the Minister himself ever suggested that in argument. There is, of course, a quite proper procedure which was proposed whereby the price of the land should be negotiated through the 1054 district valuer. The district valuer is a Government official. It is his duty to know market values. No better advice could be available to the Minister on the question. It is his duty to see that any price which was agreed in this way was one which ensured that the Minister obtained the proper market value and that the Corporation paid the full price.
The Minister's answer to all this was to ask, "Why cannot the Corporation themselves bid in the auction? What better test could there be of market values? After they have satisfied themselves on the right use of the land they can ensure obtaining it by bidding at the auction until they become the ultimate purchasers."
This somewhat naïve argument received two answers. The first was that the Corporation, as it made clear all along, was perturbed that if it had to bid for this land at an auction it would find that the price was raised by speculative bidding beyond what was considered to be the proper market value. This is an argument which, I fear, fell on deaf ears with the Minister of Health. I do not think that he takes into account in his philosophy the conception that there are such things as speculative values. Whatever is achieved at an auction is fair market value to the right hon. Gentleman.
Fortunately for the public interest, the district valuer takes a different view. He has to take account of what are proper market values. He knows quite well that these can be inflated by speculative bidding. This has led to a second point which I am not sure that the right hon. Gentleman has fully appreciated—that when a public authority like the Derby Corporation goes to an auction to purchase, it has to inquire first of the district valuer to find out what sort of price he would be prepared to recommend for approval. Public money is not allowed to be squandered on speculative values.
The result is that the public authority goes to an auction with one hand tied behind its back, because it knows that there is a limit to the amount which it is allowed to bid. Sometimes, unfortunately, it is thought that leakages occur and that these values get known, with the result that the authority goes to the auction with two hands tied behind its back. In any event, this was the position, and I do not think that it was 1055 fully appreciated by the right hon. Gentleman.
In this situation the Minister had to be informed that if he persisted in his refusal to negotiate, the only result could be that the Corporation would have to make an announcement before the auction that if it were unsuccessful at the auction, it would have to apply to the Minister for sanction for a compulsory purchase order. The Corporation knew that, if it did this, the result might well be to depress the market so that it might acquire the land at the auction at less than the fair market value. The Minister was given fair warning of this.
This occasioned him some surprise. I must say that I was surprised to find how little in touch with reality on these matters the former Parliamentary Secretary to the Ministry of Housing and Local Government appeared to be. If he had been a little more in touch with reality, perhaps he would not have introduced the Rent Act with such fervour. In any event, the Minister was fairly warned. This is not what the Corporation wanted to do. The Corporation had no desire to get the land on the cheap. It does not improve its relations with people locally if it has to give a warning of this kind before a public auction. It wanted to pay the fair market value and was prepared to do so, and do it by proper negotiation with the district valuer.
The Minister persisted in his refusal. The auction took place. The land was knocked down to the Corporation at a figure of £5,500. When the auction was over, the auctioneers made a statement to the effect that, if it had not been for the Corporation's announcement, they estimated that the land would have sold for £7,500, another £2,000.
I do not know where the truth lies. What is the true market value? Can we consider the implications for a moment? If the right implication is that the fair market value is £7,500, the result is that the Corporation has got the land on the cheap. The Minister has lost £2,000. I suppose that the ratepayers of Derby may be thankful to him, but I do not think that anybody else will be. If the true answer is that the fair market value is £5,500, the Minister by his obstinacy has incurred the auctioneers' fees and to that extent 1056 got less than he otherwise would have done, and surely he has caused a lot of unnecessary trouble. But by far the most important point involved is the question of principle. It is whether we are to substitute the haggle of the market for responsible government in these matters. As I have said before, the local authority—the Corporation—is the planning authority. It was not acting in some selfish or irresponsible way but in what it, as the person best able to judge, considered to be in the public interest.
It is true that, if the Corporation had had to carry out its threat of exercising powers of compulsory purchase, a complicated procedure would have been involved. In order to get compulsory purchase, it would first have had to secure an amendment of the development plan by designating this site for purposes of a church. Naturally a detail of that kind does not normally appear in the development plan. Then there could have been objection to that. There could have been an inquiry. The Minister of Housing and Local Government would have had to give his decision. Assuming that it was approved, the Corporation would then make its compulsory purchase order. Again, there could have been an appeal and reference to the Minister for the final decision.
In his final answer the Minister of Health has seized on the technicalities of this point as if they gave some justification for his attitude. In fact they do nothing of the sort. The only question here is whether a local authority which is the responsible planning authority is to be trusted in a matter of this kind. If this was a question of disposing of land by one Ministry which was required by another Ministry, there would be no question of it then being put up for sale by auction. It would be transferred from one Minister to another.
In this case the local authority was supported by the Church authorities. The Bishop of Derby himself supported this application, both to the Minister and publicly in the local Press. When an application of this kind is put forward and supported by all the responsible authorities, have we really reached the state of Government where there is to be abdication of responsibility by the Minister and an insistence that the land 1057 has to be put up for public sale by auction?
We feel that this is really an unwarranted piece of obstinacy on the part of the Minister, who seems wedded here to some ideological principle which forms no part of our planning legislation. There is no requirement anywhere in law that when a Minister sells land he must put it up for public auction; he is quite entitled to do so by private treaty. This matter calls for explanation, and the Corporation of Derby, the Church authorities and the people of Derby are entitled to a more satisfactory explanation than any yet given.
§ 10.15 p.m.
§ The Parliamentary Secretary to the Ministry of Health (Mr. Bernard Braine)
I recognise that the subject which the hon. Member for Derby, North (Mr. MacDermot) has raised tonight is one of considerable public importance. He has questioned the decision of my right hon. Friend to dispose of certain land, vested in him and surplus to his requirements, by public auction, when a sale by private treaty to one interested party might, in his view, have facilitated the public interest. In doing so, however, the hon. Member is questioning the very basis of the Government's policy governing the disposal of surplus land in their possession and it would be as well if, at the outset, I made the position clear.
Perhaps I should begin by explaining to the House that when a Government Department possesses land surplus to its requirements it is, in general, the duty of the Minister responsible to seek to obtain the best price for the land, and also to give both public bodies and private persons an opportunity of bidding for whatever is available. Only in the most exceptional cases, where it is abundantly clear that the land in question is imperatively required by a public authority for the public good, can a Minister feel justified in following an alternative course of disposal by private treaty.
What is the general intention behind this policy? It is not one of ideology, as the hon. Member suggested. It is, surely, to safeguard the interests of the taxpayers at large while leaving to any Government Department owning land opportunity to dispose of it by private sale to a public authority where to do 1058 so—and only where—it would manifestly serve an important object of public policy. I cannot conceive that this policy in itself is unsound, although I readily admit that difficulties can arise in its interpretation.
Such difficulties of interpretation stem from the unavoidable difference of view between a potential purchaser by private sale—who will invariably consider the use to which he would put the land as important in the public interest—and the Minister, who must attempt to assess the extent to which the public interest in the use of the land overrides the equally important public interest of securing the best price for it, and of giving all potential purchasers an equal opportunity to buy.
It is also of the first importance that a Minister should not prejudge issues of a kind for which adjudicating machinery has been set up under the law, and should not take it upon himself to determine a local pattern of development which is quite outside his sphere of responsibility. In the disposal of hospital land my right hon. Friend adheres to this policy, namely, that the interests of the taxpayers and of the public are best served by selling the land in a way which will realise the best price and enable any interested purchaser, whether public or private, to have a fair chance to acquire it.
This, in our experience, almost invariably means sale by public auction. It has been our practice to make an exception when the local authority was the former owner of the land. Apart from this, exceptions have been relatively rare, and have occurred only when a private sale has been made to a local authority which needed the land in question for some project of major importance to the community as a whole, as when a local education authority requires land for a school. Even then, if there is any other interested person, except in the most demonstrable case of public importance it is desirable to sell by auction.
The land to which the hon. Member refers covers slightly under one acre in Kedleston Road, Derby. It was declared surplus to hospital needs in the middle of last year, and the auctioneers were instructed to effect a sale in September.
The Derby Corporation indicated that 1059 there was no objection in principle to the development of the land for residential purposes. In November, 1962, the Derby Town Clerk informed my right hon. Friend that ring road developments in Derby would involve the acquisition and demolition of St. Alkmund's Church in the same parish as the land at Kedleston Road, and that unless the Church could be reinstated in the same parish the compulsory acquisition of the existing building would be strenuously opposed.
Now this land had never been owned by the local authority, nor by the Church. It was suitable, however, for residential development and the Derby Corporation had so indicated. Moreover, it had come to my right hon. Friend's notice that apart from the local authority there were a number of people who were interested in acquiring the land. He therefore felt it was his duty to give everyone a fair chance and at the same time secure the best price for the taxpayer. A decision to sell the land privately to the Church would have meant that my right hon. Friend was taking it upon himself to decide that the best future use for the land was to use it for the erection of a church rather than for the erection of houses or any other kind of building. My right hon. Friend did not feel that he was competent to take such a decision.
I must reject any suggestion that sale by auction prejudiced the position of the Church in any way. The Church naturally had a very high interest in obtaining this site, but sale by auction did not in itself prejudice its position, because under the Land Compensation Act, 1961, it would be compensated for the cost of reinstatement. Nor would it be right to assume that the price payable at auction would be vastly greater than that which would have been settled in respect of the sale by private treaty. Land normally will not command more than it is worth and the price obtained at an auction can fairly be regarded as fair market value.
§ Mr. Braine
The hon. Member has given figures tonight. I am not in a position to discuss whether those figures reflect the true market value or not. My right hon. Friend could not judge on an issue of this kind. The assumption is that when a matter goes to public auction it will be dealt with 1060 fairly and squarely and the true market price will be realised.
Even had my right hon. Friend decided to proceed with a sale by private treaty it would have been his duty to secure a price at least as high as he was advised could be obtained by public auction. Thus, the possibility that the price realised by private sale would be less than the market price could not possibly have been a consideration which would have swayed my right hon. Friend towards a sale by private treaty to the Church or any other body, precisely because of his duty to the public at large. We have to ask ourselves, in order to arrive at a fair judgment of this matter, whether any of these arguments would have justified my right hon. Friend in depriving other interested parties of an opportunity to bid for the land.
In the event, the land was auctioned by order of my right hon. Friend on 5th March. At the auction a letter to the auctioneer from the Derby Corporation was read out. This letter indicated that if the Corporation's bid were unsuccessful it would apply to my right hon. Friend the Minister of Housing and Local Government for an amendment of the town development plan so as to designate the land as subject to compulsory purchase and it would then submit a compulsory purchase order for the Minister's confirmation. The result of the auction was that the land was sold to Derby Corporation for the reserve price. There was no other bidder.
Thus, the end of the story is that each party has attained its objective. The Corporation obtained the land at a price which was certainly no more than the apparent value of the land. The Church authorities, I trust, will be able to provide on the site a satisfactory replacement of St. Alkmund's. The parish church will still be in the parish, in the heart of its congregation. My right hon. Friend has disposed of the land at a satisfactory price and with the fullest regard to the widest conception of his duty to the public interest.
It may be argued that this result has a fortuitous element, but I do not think that anyone can complain on that account. I repeat that, in the circumstances, my right hon. Friend could do no other than he has done. I ask the 1061 hon. Gentleman to reflect that, if my right hon. Friend had been swayed in this particular instance to follow the course the horn. Gentleman would have liked, my right hon. Friend might feel free to be swayed in some other instance, and I am stir, that the hon. Gentleman would be one of the first to criticise my right hon. Friend or any Minister who departed from the general principles laid down. It is not a matter of ideology. It is a matter of common sense, common prudence and good government. I am glad that despite the happy ending to this sad story, the hon. Gentleman has raised this matter tonight, so that I can have an opportunity to say this.
If this land had been in the possession of the Derby Corporation before, that would be another matter. If it had been in the possession of the Church before, that would be another matter.
§ Mr. Philip Noel-Baker (Derby, South)
It belonged to the Provost of the Cathedral who sold it to the nursing home for its benefit, and that is how it came into the possession of the Ministry.
§ Mr. Braine
I said, and I repeat, that the land was not in the property of the Church. The right hon. Gentleman is quite correct in the point which he makes. It was the property of the Very Rev. Micklem, who had it for his sole use and benefit. It was purchased from him by the trustees of the Royal Derby and Derby Nursing and Sanatorium Association. The Association was the former owner. When my right hon. Friend has to consider the various factors, he has to consider who has owned the land. The Church had not owned the land, nor had the local authority.
§ Mr. P. Noel-Baker
The Provost owned it and sold it to a health institution for the public benefit.
§ Mr. Braine
He sold it for the public benefit. As I have carefully explained, as a result of my right hon. Friend pursuing the policy which it is his duty to pursue, the matter has ended happily, with the land being acquired for a purpose which must gladden the heart of the right hon. Gentleman and his hon. Friend.
§ Mr. MacDermot
I am not following the hon. Gentleman's argument. I understand him to say that there has been a happy solution and everyone has achieved his object. I thought that the 1062 whole point of the Minister's objection to sale by private treaty here was that he wanted to give an opportunity—by that I presume he meant a real opportunity, not a sham opportunity—to private bidders to bid for the land. Does the hon. Gentleman think that that result has been achieved?
§ Mr. Braine
The hon. Gentleman has overlooked, or perhaps he did not hear, what I said earlier. When the view of Derby Corporation was sought in the first place, it indicated that the land was suitable for private residential development. It follows, therefore, when it is within the knowledge of my right hon. Friend that there are several interested parties, that he could do no other than he did.
§ Mr. Braine
It may be argued that this result has a fortuitous element, but I do not think, in the event, that anyone can complain. It is clear that the operation of the Government's customary policy for the disposal of surplus land has not in this case acted adversely to the interest of any of the parties principally concerned.
§ Mr. P. Noel-Baker
The hon. Gentleman says that the Minister could have done no other than he did. That is saying that he had no discretion under the law to grant what the council asked. Of course, he had a discretion under the law. He said so to us in our deputation, the most extraordinary deputation in which I have ever taken part, on either side of the table. If I may say so, the hon. Gentleman has done nothing to improve the case made by the Minister, and he has done nothing to diminish the resentment felt in Derby in Church circles and in the town.
§ Mr. Braine
The right hon. Gentleman was not paying attention to what I said. It is not a question of the Minister's discretion. The Minister has discretion. In this particular case he acted in accordance with principles I have explained.
§ The Question having been proposed at Ten o'clock and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
§ Adjourned at half-past Ten o'clock.