HC Deb 10 February 1967 vol 740 cc2054-64

Motion made, and Question proposed, That this House do now Adjourn.—[Mr. McBride.]

4.2 p.m.

Mr. Julian Ridsdale (Harwich)

In the course of this Adjournment debate I propose to draw the attention of the House to the sale of houses by the British Railways Board, without advertising and without offering them to its previous tenants, many of whom wish to buy these houses.

My attention was first drawn to this strange conduct of British Railways by the sale privately without advertising, although the Board had informed our local council in 1963, and without offering them to its existing tenants, of 74 houses in my constituency at Parkeston, despite the fact that a constituent of mine said he would overbid any private or secret offer the Board received and travelled to London in circumstances which led him to believe his offer was being considered and might be accepted, and despite the fact that the tenants were willing to purchase. After this I am prompted to ask—why was it all too much bother for the Board to look after the welfare of its tenants?

Since tabling the Motion, my attention has been drawn to similar sales of houses owned by the Board, in some cases without advertising and privately, and without offering them to its existing tenants, at Sheffield, Bristol and Tonbridge and in Paddington. I have been led to believe that there are other cases in the north of England as well. This has led to houses which were bought privately for £300 or £400 being offered for sale to railway tenants at double the price. For example, the Sheffield Morning Telegraph of 29th June, 1966, reported that railway tenants of houses in Hague Lane were being offered the chance of buying their houses for £750 each, a little over £335 more than the original sale price which British Railways had received only a short time previously.

I have not the details of the sales at Parkeston, but I would like the Minister to tell me the difference between the price of these houses which was obtained by British Railways and the price which the railway tenants who have bought these houses have had to pay.

In the Sunday Express of 9th October last year, a railway clerk at Tonbridge, who had spent a lot of money in converting his house from a rather dreary place to a comfortable home, was reported as having been told by British Railways, We will see what we can do. Without warning, he was told that his house had been sold to a property company.

I have been told that at Paddington, British Railways sold 43 houses which they owned en bloc to the Freshwater Company without offering those homes to their existing tenants although they had asked to buy. They were told that it was all too much trouble to enter into individual negotiations.

Is that the way a State-owned industry treats an individual? To me, this conduct is a kind of State Rachmanism of the worst type. Why were these houses not offered for public auction? Is it really to much trouble to offer houses to individuals who want to buy them at, say, district valuer's valuation? That is the normal custom in many Government Departments when a private sale is entered into. It could be done in that way.

I am grateful to the hon. Member for Bristol, South (Mr. Wilkins)—who has asked me to apologise that, because of a previous pressing engagement, he cannot be here this afternoon—for supplying me with information about the sale of railway houses in Bristol. When I asked a Question in the House on 25th January about this kind of sale, the hon. Member for Bristol, South said: This is a shocking scandal and it should have been stopped."—[OFFICIAL REPORT, 25th January, 1967; Vol. 739, c. 1469.] The more I look into these sales, the more I am convinced that not only is it a shocking scandal and that it should be stopped, but that the Minister should issue a general direction at once to order a public inquiry into the conduct and manner of these sales.

In addition, my hon. Friend the Member for the Cities of London and Westminster (Mr. John Smith) has given me details of a private sale by the London Transport Board of commercial property. Although it is commercial, the principle is the same. It entailed the sale by the London Transport Board in Central London of premises bought by the Angus Steak House, although the Peter Evans House, had it known about it, would have offered competitive terms and possibly a better price than the London Transport Board obtained.

I ask the Minister to give that his General direction because such conduct as this in the disposal of property in a Government Department led to Crichel Down and the resignation of a Minister. During the time that I was Under-Secretary of State at the Air Ministry, I had to deal with land and property. I could never have allowed such conduct as I have heard about since initiating this debate. Why can the British Railways Board hide behind the phrase "day-to-day management" when it is evident that we have on our hands a scandal of Crichel Down proportions? But whereas at Crichel Down one farmer was concerned, here we have several hundred railway-men, many of whom have given 25 years or more of service to British Railways or their predecessors.

Because I regard this as such a shocking scandal, I want the Minister to give a general direction for a public inquiry to be held, because the public have a right to know why the houses were not offered in the first place to the railwaymen, many of whom had lived in them for many years.

Why in many of the cases—for instance, at Parkeston, Bristol and Paddington—did not the Railways Board offer these houses for sale by public auction? Anyone who has had anything to do with property knows that that is the only way to get the best price. After such conduct as this, the public have a right to know who were the buyers and the prices at which the Railways Board bought the houses and sold them back to the railwaymen.

I utterly reject the words that have been used—"It is often to the advantage of the Railways Board to arrange a lease or sale by private treaty rather than by inviting tenders." This cannot possibly stand up to close examination. The Board is in business to provide transport and cannot possibly have an expert knowledge of property. In those circumstances, I am sure that it should have been its duty, after offering the property first to the existing tenants, publicly to dispose of its undertakings.

Why were not the houses in Bristol, Paddington and Parkeston offered for public auction? Why so much secrecy about the sale? Is it true, as at Bristol, that prospective buyers were circularising tenants telling them that they could purchase now but would not be given this opportunity in the future—and this before the sale was completed, and to railwaymen some of whom had been in occupation of these houses for 30 years? This is a scandalous way for any industry to behave towards its servants. Does not the Minister realise that the latest British Railways policy of not offering houses to its employees first inflames the passions of railwaymen? Is it too much trouble for British Railways to enter into individual negotiations? Why should not it have done so? Was it really too much trouble? I would have thought that it would have wanted to go to all the trouble it could to help men who had been in its service for 30 years.

The fear that the Board might be faced with difficulty contrasts strangely with the attitude of the private railway companies which provided the houses for their staffs. I do not believe that in similar circumstances the Great Western Railway or the London and North Eastern Railway would have displayed such unconcern for the welfare of their employees and tenants as has been displayed by their successors. It is because there is much more in it than just this unfair approach to employees that I ask for this general direction for a public inquiry.

I know that in many cases the management of the railways is concerned with the welfare of the men, and that this is especially so in the case of the General Manager of the Eastern Region, Mr. Fienns, who was very helpful to me during the difficult days of the shipping strike. It is to protect the good name of management, and to expose those who are to blame for such scandalous conduct, that I ask the Minister to give a general direction for a public inquiry to be ordered about the whole wretched business of the disposal of these properties by the Railways Board and London Transport. It is vital that this should be clone, for the welfare of the men and so that everybody should know the truth of what happened in these transactions, which have done so much to hurt and destroy the faith of some railwaymen of long service in British Railways.

4.13 p.m.

The Joint Parliamentary Secretary to the Ministry of Transport (Mr. John Morris)

I must begin by emphasising that the questions raised today are essentially matters of managerial responsibility for the British Railways Board. The Government do not, and clearly should not, interfere in such matters, and my main purpose today must be to explain the nature of the Government's interest in certain general issues which arise from the Board's disposal of its land. It would be entirely inappropriate for me—despite the strong words of the hon. Gentleman—to enter into discussion about the details of any particular case. Commercial negotiations of the Board, as with any other undertaking engaged in such transactions, must be confidential.

I understand that the hon. Member for Harwich (Mr. Ridsdale) has had a lengthy correspondence with the Chairman of the Railways Board about the particular case he has mentioned. This is the right channel for such matters, and I certainly cannot comment on, or add to, the information which the hon. Member has already been given by the Chairman. I regret that very much, but that is the position, which is well known to the hon. Member, under the nationalisation Acts.

Mr. Ridsdale

Would the hon. Gentleman admit that it is in the power of the Minister to order a public inquiry into this conduct?

Mr. Morris

The powers of the Minister are very familiar, I am sure, to the hon. Member. He and his side of the House were responsible for bringing in the 1962 Act, and he knows full well the Minister's powers with regard to investment, appointment of the Board and the issuing of general directions. These matters are well understood by the House. Indeed, if the hon. Member were to try to put down a Question on detailed matters of management it would not, as I understand, be accepted by the Table.

This is the position, and this is why I am giving this explanation of where the Government's responsibility lies and where the Board's responsibility lies. I would, however, like to emphasise that I understand that there have been no complaints from the tenants about the handling of this case in the hon. Member's constituency. I understand that the houses were offered to the local authority, but the offer was not taken up. It would, perhaps, be helpful if I were to remind the House of the circumstances in which the Railways Board disposes of its surplus property.

The Board has powers under Section 14 of the Transport Act, 1962, to dis- pose of any property which, in its opinion, is not required by it for the purposes of its business. The Board inherited from its predecessors about 42,000 houses. Generally speaking, these had been built many years ago when houses were often needed to meet operational requirements because staff had to live near their work. This was in the days when there were few, if any, houses available for letting from local authorities, and few railway staff were able to become owner-occupiers. Circumstances have, of course, greatly changed since the days in which the Board's predecessors built these houses. There are now very few cases in which there is an operational requirement to provide housing for railway staff. On operational grounds, such provision can now be justified only for staff such as station masters and crossing keepers.

When the Board was set up in 1963, therefore, it found itself with a great many houses surplus to operational needs, and many of these needed money spent on them to bring them fully up to current standards. The Board is, of course, under a statutory obligation to conduct its business so as to eliminate its deficit at the earliest possible date. This is relevant to what the hon. Member has said. It would, therefore, not have been justified in incurring expenditure on the maintenance and improvement of properties not required for any operational purpose. It accordingly introduced a programme for disposal of surplus properties, and since 1963 has disposed of about 18,000.

Mr. Ridsdale

While the Joint Parliamentary Secretary says that there have been no complaints from Parkeston, would he not agree that there has been a considerable number of complaints from other places all over the country?

Mr. Morris

I shall come to the extent of the complaints in a moment. I take the hon. Gentleman's point. I take it also that he does not dispute what I said earlier, that there have been no complaints from the tenants at Parkeston. I think that one constituent of the hon. Member has made a complaint, the person who wants to purchase the 74 houses concerned.

Mr. Ridsdale

It is on the principle of going to auction and selling privately.

Mr. Morris

The position should be made clear to the tenant. There has been no complaint from the tenants in the hon. Gentleman's constituency.

As I said, since 1963 the Board has disposed of about 18,000 houses. A census last year revealed that less than 50 per cent. of the tenants of properties to be disposed of were, in fact, railway employees.

In any operation on this scale, there are bound to be complaints of one kind or another from people whose expectations have been disappointed. One sympathises with them. Indeed, it would be surprising if some errors had not occurred—perhaps a failure by an agent to keep tenants fully informed about an impending sale, for example. I have been aware from time to time, as the hon. Member indicated, of some complaints of this nature. But, given the scale of this operation, comparatively few complaints have come to my notice.

The Board's policy is to give sitting tenants the first offer of single houses or of pairs of houses. But where a block of houses is concerned, very considerable difficulties would arise if individual tenants were offered the opportunity to buy. Some would not wish to do so and the Board would be faced with serious difficulties in disposing of the residual houses in a block. As the hon. Gentleman says, the Board's business is to run the railways and it is not an expert in housing and other activities. Its difficulties would become manifest if it were to dispose of houses in any other way.

In these circumstances, the Board would be left with a continuing burden of management and maintenance. In order to avoid this piecemeal handling of houses in a block, the Board's practice is to sell blocks as a whole, and they are now invariably offered first to the local authority. Where the local authority is not interested, as in the case mentioned by the hon. Member, the Board must be left to complete its disposals in the manner it considers best suited to its circumstances and obligations.

It is not my responsibility, and would not be in the Board's commercial interests, to explain its methods of disposal, but I understand that the Board is satis- fied that its methods are entirely appropriate and enable it to discharge its responsibilities to the full, including its social responsibility of ensuring that sales are made to bodies of good standing. I understand that in some cases sales are made by auction, while in other cases a measure of selectivity is considered desirable.

There is no case for the Minister to intervene in such matters. But there are questions in which it is proper for the Government to interest themselves, and these we took up as soon as the Labour Government came to power. These are questions involving the wider national interest. It was, for example, vital to ensure that the first offer of surplus land including buildings, not only by British Railways but by other nationalised industries, was made to local authorities, so that the land can be put to the most advantageous use in the public interest. In the past the general practice had been to dispose of surplus land on the open market, without any priority being given to local authorities.

Mr. Ridsdale

As far as Government Departments are concerned, does not the hon. Gentleman agree that the Crichel Down ruling was that land had to be offered to other Government Departments, including local authorities, and that therefore one would have thought that that practice would also have been the practice of the nationalised industries as well?

Mr. Morris

I am given to understand that the position regarding the nationalised industries is as I have stated it. The advice tendered to me is that what I am stating is a reflection of the position as we found it on taking office. That is why it is necessary to make a change in the conditions as regards giving preference or at least first offer to local authorities in the manner that I have set out.

When I was interrupted I was about to say that we consulted the nationalised industries and secured their agreement to a procedure under which they now make the first offer to the local authorities in whose area the land is situated. If the hon. Gentleman has not been aware of the position, I hope that, after what I have said, it is clear to him that there has been a marked change of practice in the disposal of land by nationalised industries since the present Government took office.

Mr. Ridsdale

rose——

Mr. Morris

I am sorry. I have given way to the hon. Member on four occasions and I have several other things still to say. I think he will agree that I have been more than generous.

This procedure was introduced last year and all local authorities were informed by a Circular issued by the Ministry of Housing and Local Government and the Welsh Office on 17th October. Under this procedure, the nationalised industries give local authorities in whose area surplus land is situated six weeks' advance notice of an impending disposal. During this period of six weeks an authority has an opportunity to give notice of its interest in acquiring the land; failing which the nationalised industry is free to go ahead and sell the land at its discretion. But if a local authority express an interest in acquiring, it is allowed a further period of six weeks in which to make a firm application to purchase. The price is a matter for negotiation.

Local authorities are not expected to pay more than the district valuer is prepared to certify, but if agreement on terms cannot be reached the nationalised industry is free, at any time after the end of the second six weeks period, to dispose of the land by such other means as it thinks fit. As the Circular to local authorities makes clear, the aim of these arrangements is to establish a flexible procedure.

It is intended that the system should be worked in a spirit of co-operation. In particular, the suggested time limits are intended to operate purely as safeguards. There may often be unavoidable difficulties which make a quick conclusion impossible, and in such circumstances it is not intended that negotiation should be broken off merely because a time limit has expired. On the other hand, the nationalised industries cannot be expected to hold surplus land indefinitely.

Another broad issue is the question of whether the position of tenants is fully safeguarded when British Railways dispose of houses. This is a matter which may be one of great concern and I am glad that the hon. Member has confirmed that this issue has not arisen in the particular case that he has brought before us. This was another point that we looked at carefully when the Labour Government came to power, and the position has been explained to the House before. But in case any misunderstanding still exists, I want to repeat that when British Railways sell a house to somebody other than the tenant, the tenant continues to enjoy the wide measure of protection provided by the Rent Acts, including control of rents and security of tenure.

I hope that this is a matter of further assurance to anyone in the hon. Gentlemen's constituency or anywhere else who may be worried. I would remind the hon. Member that the present Government had a small part to play in ensuring that the protection of tenants was improved following our coming to power. I would have thought, so far as his constituents are concerned, that this is a matter of some joy to them. The tenant is thus in no different position from that of any other tenant when his house is sold. Provided that the Board fulfils its obligations, as I am sure that it does, there are no grounds for any fear that its tenants are under any disadvantage.

Broad issues of this kind are matters on which we have felt it right to satisfy ourselves. But this does not mean to say it is right for us to get involved in the facts of individual cases, or in details about the Railways Board's methods of obtaining offers from potential buyers. This is the sort of thing which any undertaking must be left to decide for itself, in the light of its financial and other obligations, and of its circumstances from time to time. These are essentially matters of judgment for management to take.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes past Four o'clock.