HC Deb 20 February 1969 vol 778 cc841-9

Order for Second Reading read.

Mr. Speaker

I have not selected the Amendment in the name of the hon. Member for St. Albans (Mr. Goodhew) and his hon. Friend the Member for Hemel Hempstead (Mr. Allason)— On Second Reading of Luton Corporation Bill, to move, That the Bill be read a second time upon this day six months. This will not cramp the debate. The only limit on the debate will be the scope of the Bill. It will help the Chair if those who are for or against either of the Bills we are to discuss will inform the Chair so that I may endeavour to balance the debates.

7.0 p.m.

Mr. W. Howie (Luton)

I beg to move, That the Bill be now read a Second time.

It seems that I have spent by far the greater part of today sitting on this bench. First we had the House of Lords reform Bill and now we have the Luton Corporation Bill. This is a fairly simple but useful financial Bill. Briefly, its purpose is to give the Luton Corporation an additional and cheaper method of borrowing money. The Bill will authorise it to raise money by the issue of bills and empower it to invest the superannuation fund more widely.

The borrowing powers the corporation seeks are dealt with in Clause 3. It would issue bills, to be called Luton Corporation Bills, which would be rather similar to Treasury Bills. I understand that they would be freely negotiable on the London money market and, therefore, would usually carry a rate of interest rather below the three-month deposit rate. I am told that the saving might be about three-eighths to half per cent. I am also told that the G.L.C., using a similar means of raising money, has obtained a rate of interest of 71/16 per cent. compared with a going rate of 7⅞ per cent.

The Bill is not a great financial Measure, but it is not trivial. The total amount of money involved would be £1 million, and it is limited by Treasury regulations. This compares with a total borrowing by Luton Corporation of about £45 million. The saving would be about £4,000.

Money raised through the medium of the Bill would go into a consolidated fund from which the capital expenditure of the corporation would come in due course. The Luton Corporation Bills could be used to borrow in the expectation of revenue such as rates. If Clause 3 is defeated, the only effect will be that the money would need to be raised in a more expensive way, to the disadvantage of the ratepayers of Luton, their dependants and other citizens.

Almost exactly similar powers have been obtained by a number of other local authorities since as far back as the turn of the century. In the past two Sessions of Parliament they have been obtained by the Greater London Council, the Kingston upon Hull Corporation, Manchester Corporation, Somerset County Council, Cheshire County Council, Durham County Council, Lancashire County Council, Leicester Corporation and Newcastle-upon-Tyne Corporation. There are many more going back over a substantial period. This would be a very useful addition to the borrowing powers of Luton, and I hope that the Bill will be accepted with Clause 3 intact.

The other important power in the Bill is in Clause 4, which is appropriate because it deals with a minor extension of public ownership. The Luton Corporation seeks power to increase the range of securities in which it can invest its superannuation fund. At the moment, it is restricted to an investment of 50 per cent. of the fund in securities, and I understand that it desires to increase its investment from 50 per cent. to 75 per cent. It has given an assurance to the Treasury that, should the power sought in Clause 4 be approved, it would be the intention to comply with the Government's voluntary programme of restraint on overseas investment and the new power in respect of overseas investment would not be used for the time being.

I think that I am known here as a man prepared to give credit where credit is due, regardless of party, and I therefore give credit to Luton Corporation for this modest but important extension of public ownership. Clause 5 permits the corporation to charge expenses in regard to the superannuation fund. The Clause 4 power has already been obtained by a substantial number of corporations, which I shall not list, although I have a list here.

I understand that there is some opposition to the Bill. In the past, a number of hon. Members have kept a close eye on Luton and its financial activities, especially as these activities are appropriate for debate and Question in the House. My hon. Friend the Member for Bedfordshire, South (Mr. Gwilym Roberts) is one of them. The hon. Member for Hemel Hempstead (Mr. Allason) is another. He and I have had many discussions about Luton affairs. Another is my hon. Friend the Member for Hitchin (Mrs. Shirley Williams), who is unfortunately unable to be present. She is in a particular difficulty in that, being a Minister, she is unable to speak in the debate.

I well understand the difficulty this gives rise to since I myself once faced some problems in dealing with a Luton matter in this House when I was a member of the Government. It is the kind of problem which a Minister, even so minor and obscure a Minister such as I was, has to face with fortitude, although sometimes ill-intentioned people take advantage of it in a political sense. I hope that my hon. Friend's difficult position will be properly and fully understood outside the House exactly as it is in the House. She, like the others I have mentioned, has been assiduous in her attentions to Luton.

I am also happy to welcome the hon. Member for St. Albans (Mr. Goodhew) to the club. I hope that we shall have the pleasure of his assistance in matters concerning Luton's financial affairs, just as the others have given theirs. The opposition to the Bill is, as I understand it, ill-conceived and the fears which have been expressed are groundless.

Finally, I would merely say that the Bill has been tested to some extent before public opinion by means of a town poll. It is difficult to argue that the result of the poll was totally conclusive in arithmetical terms since no more than 6½ per cent. of the 100,000 people entitled to vote actually did so. Nevertheless, we must conclude that those who did not vote did not wish to do so and that those who voted expressed their attitude towards the borrowing powers which the corporation is seeking.

The result of the poll was that the Bill was supported by a considerable, though not overwhelming, majority of those who voted. I do not stress that greatly, but nevertheless the Bill has been tested before public opinion and, in so far as the arithmetic can be regarded as conclusive, we claim that it has the support of public opinion.

This is a useful Measure which should provide a marginal saving for the citizens of Luton. The borough council wants the Bill. According to the town poll, the citizens appear to want the Bill. I think that they should have the Bill, and I urge the House to give it a Second Reading.

7.10 p.m.

Mr. Victor Goodhew (St. Albans)

The hon. Member for Luton (Mr. Howie) said that he liked to give credit where it was due even if it were to his political opponents. I would like to do the same. He introduced the Bill with great clarity. I do not know whether he was trying to reduce my anxieties and opposition to it when he talked about a slight increase in public ownership under Clause 4, but he knows that that is not my principal fear.

The hon. Member has said that the Bill provides an additional and cheaper way for the corporation to borrow money. He said that it would be disadvantageous to the ratepayers if it was prevented from doing so. My concern is that the activities for which this money may be spent —the capital projects he mentioned— may well be to the disadvantage, not only to the ratepayers of Luton, but to 580,000 others.

Mr. Speaker

Order. This is a narrow debate. We cannot discuss capital projects on which Luton may spend this money.

Mr. Goodhew

I was anxious about what the Minister of State, Board of Trade, said in reply to me in August, 1967, when he said that the Board of Trade has no power to make restrictions on aircraft movements. I thought I should try to seek a way of finding out——

Mr. Speaker

Order. I admire the hon. Gentleman's ingenuity, but he cannot seek to do so on this Bill, which sets out to do certain things which have been clearly explained to the House. Luton Corporation wishes to raise some of this money by Bills and wants to invest some of its superannuation fund in certain ways. That is all we can discuss.

Mr. Goodhew

Naturally, I must bow to your Ruling, Mr. Speaker. I must look to some other occasion. Perhaps I can give notice that I shall seek to raise the matter on the Adjournment on a suitable occasion.

7.12 p.m.

The Financial Secretary to the Treasury (Mr. Harold Lever)

I want to intervene briefly on behalf of the Treasury to say that the proposal to use bills to convenience Luton Corporation and to cheapen the cost of borrowing is quite in accordance with Treasury policy. The method has a respectable ancestry and we see no reason why it should not be granted here.

The particular purposes for which the bills are applied would not be relevant, as you have ruled, Mr. Speaker, but perhaps I can give a reassurance that any application to use these bills for capital purposes, including matters connected with Luton Airport, would not be sanctioned under Treasury powers contained in the Control of Borrowing Order, 1958.

There is no Treasury objection to the power being granted. If there are any points of detail which hon. Members wish to put, they may be raised in Committee when I shall be happy to give the Treasury view. But there is, I repeat, no objection in principle to the proposal of the corporation so far as the Treasury is concerned.

7.13 p.m.

Mr. James Allason (Hemel Hempstead)

The hon. Member for Luton (Mr. Howie) spoke of the result of the town poll. I assure him that, had the polling area been somewhat wider, there would have been a different result, because a great number of my constituents take a very keen interest in the affairs of Luton Corporation. Indeed, it is possible that, following the review of local government and proposals for larger units of local government, some parts of my constituency, or even the whole of it, will come within the scope of Luton and, therefore, inherit the financial position which exists in Luton at the time.

Clause 3 confers powers on the corporation to raise money. I would have thought that, if we are asked to grant powers to raise money, there would be some responsibility on this House to consider the consequences of raising the money. For example, the Financial Secretary to the Treasury has just said that massive elements of capital expenditure would not come under this scheme, but I am rather concerned with current expenditure. Last year, Luton Airport lost £118,000.

Mr. Speaker

Order. The hon. Gentleman must find some other opportunity of debating his dissension with Luton Corporation on the subject of the airport. The Bill empowers Luton Corporation to raise some of its money in a certain way. It also gives it power to invest some of its money from the superannuation fund in a certain way. He may speak on those matters. This is a very narrow Bill and a very narrow debate.

Mr. Allason

I realise that, Mr. Speaker, but the Financial Secretary related it to capital projects. I was inquiring whether the £80,000 just spent by Luton Corporation in a great hurry really counts as a capital project.

Mr. Speaker

Order. The Financial Secretary could not answer that question.

Mr. Allason

You are making life very difficult, Mr. Speaker, but I think that I have made the point that my constituents, at any rate, are greatly concerned about the effects of the financial arrangements of Luton Corporation.

7.17 p.m.

Mr. Gwilym Roberts (Bedfordshire, South)

I congratulate my hon. Friend the Member for Luton (Mr. Howie) on the masterly way in which he asked for the Second Reading of the Bill. As he has said, it is a simple Bill. I would never suggest that he was at any time a man acting under authority, although this evening he may be to some extent a man acting for authority.

I have a natural interest in the Bill. In some sense, I probably have a greater interest in it than any other hon. Member, because I am also a ratepayer within the County Borough of Luton. Clearly, not only as an hon. Member, but as a ratepayer, I am interested in whether the Bill is an efficient way of doing what it sets out to do.

We are told by the Tory Luton Corporation that this is the best way of raising the money. My hon. Friend the Financial Secretary to the Treasury says that he has no objection to the Bill. Naturally, he has not said that this is probably the best form of raising the money because it is not his function to judge whether it is the best, or perhaps the worst, way. The only way we can decide on whether this is the best way or the worst way is by looking at Luton Corporation and judging its frankness and its sincerity in some of the other actions it has taken. When any authority or organisation wishes to raise money, we are naturally anxious to judge its frankness and sincerity. This is why we are having this rather prolonged Second Reading debate on a simple Bill.

Things have happened over the last couple of years which may have caused some hon. Members to have doubts about the frankness and possibly even the sincerity associated with some of the things which the authority has done. There is certainly not the necessary frankness in the operations of this authority. I am not an expert in this matter, but I should like to quote from a local evening newspaper and refer to the views of a journalist of 17 years' experience about the frankness of the authority. Mr. Bainton's reaction to the council was this: Chairman and councillors should never be too busy to inform the people they represent what decisions they are taking"——

Mr. Speaker

Order. The hon. Gentleman must refer to something that Mr. Bainton said about the Bill. The hon. Gentleman is a ratepayer of Luton and he can raise any criticisms of the policy of the Luton Corporation in the city.

Mr. Roberts

I accept your Ruling, Mr. Speaker. My point, without dragging Mr. Bainton into the discussion, is that there are doubts about the accessibility of information to people in Luton. It is, therefore, difficult for them to formulate decisions on council policies.

Mr. Goodhew

To bring the hon. Gentleman back into order, may I ask him whether, being a ratepayer, he voted against the Bill in the poll?

Mr. Roberts

I voted neither way, because I was in Wales when the poll was taken.

Doubts have been raised about access of the Press to certain council committee meetings.

Mr. Speaker

Order. The hon. Gentleman cannot go into a general disquisition on the sins or virtues of the Luton Corporation. The council seeks to borrow some of its money by a special way in Clause 3. It seeks to invest some of its superannuation money in ways set out in Clause 4. These are the matters that the hon. Gentleman must speak about.

Mr. Roberts

I will try to keep in order, Mr. Speaker.

Openness must be a matter of judgment for any authority when it presents a Bill of this sort. There is also the question of sincerity. The party in office in Luton has been in power for a couple of years. If we look back at some of its words which it put before the electors of Luton——

Mr. Speaker

Order. The hon. Gentleman cannot discuss on this Bill the local government elections of two years ago.

Mr. Roberts

I was attempting to show, Mr. Speaker, that the party's actions be lied its words. The fact that it offered or suggested certain things to the people of Luton a couple of years ago—a reduction in parking meters, improved bus——

Mr. Speaker

Order. This is becoming almost intolerable. The hon. Gentleman must come to the Bill, or sit down.

Mr. Roberts

I accept your rebuke, Mr. Speaker.

The Bill could make a useful contribution to the ratepayers of Luton. The only doubt which I have is one which I cannot develop, namely, how the present authority in Luton would spend the money.

Question put and agreed to.

Bill accordingly read a Second time and committed.