HC Deb 13 October 1969 vol 788 cc165-76

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

10.3 p.m.

Sir Ian Orr-Ewing (Hendon, North)

I should like at the outset to congratulate the hon. Member for Barons Court (Mr. Richard), who is to reply to the debate on having moved into a more responsible seat as Under-Secretary of State for the Army. I am sure that he will be warmly congratulated by many parts of the House. I can only warn him that there was one gentleman who made a maiden speech just as quickly as he did and that was the hon. Member for Buckingham (Mr. Maxwell), but I hope that he will have a long and happy occupation of his seat, though I fear that his majority and the timing of the next election may artificially curtail his performance.

I have asked to raise the matter of interest payments on Grahame Park. Grahame Park will be more widely known in this House as Hendon Airfield. It is named Grahame Park after the pioneer Grahame White, whose name is well known in aviation circle; and especially well known in my constituency, North Hendon.

I put down a Parliamentary Question on this matter in January 1964 which was replied to on 23rd January 1964 asking whether it was possible for the Ministry of Defence, then the Air Ministry, to release some 3,300 acres for use for other purposes. The then Under-Secretary of State for Air, the hon. Member for Harwich (Mr. Ridsdale), replied that it would be possible and that rather more than half would be released.

On 11th February, 1964, a meeting was convened under the chairmanship of my hon. Friend the Member for Harwich which I attended. It was a joint meeting between the Department, the Greater London Council and what was then Hendon Council and is now the Greater London Borough of Barnet. I emphasise this fact because the whole of this development is a tripartite and partnership procedure.

Both councils, the Greater London Council and my local council, have a tremendous interest, and it is on their behalf, and particularly on behalf of the ratepayers who live in North Hendon, and Hendon generally, that I raise this matter. Seventy-five per cent. of the houses to be built on Hendon Airfield are to be council houses and 60 per cent. of the tenants are to be nominated by the Greater London Council. Therefore, both the local council and the G.L.C. are very interested in this tremendous and ambitious project. The Greater London Borough of Barnet has no fewer than 6,000 families in the housing queue, and I know from my postbag just how much hardship is being suffered. Therefore, I wish to see this project pushed forward as fast and as economically as possible.

The total area was measured to be 286 acres, of which the defence establishments—the computer buildings and other established buildings there—would take 73 acres. The Ministry wished to retain for officers' married quarters a further 35 acres. A further 10 acres was to be retained for sports fields. There was thus to be released to the Greater London Borough of Barnet and the G.L.C. 55 per cent. of the total, which made up 168 acres.

I have a feeling that the Under-Secretary, who is new to his job, will have been told in his brief to argue that the Public Accounts Committee insisted that every drop of blood should be squeezed out of the Barnet stone and that he should quote the Public Accounts Committee in support of this. If I am wrong, I shall be pleased, but I shall not miss this portion out of my speech just in case I am right.

The Public Accounts Committee, in its First, Second and Third Reports of Session 1967–68, laid down several points. In paragraph 136 it stated: Committees of Public Accounts have in the past emphasised the need for transactions entered into by public departments to be the subject of firm and binding agreements. The agreement between the Ministry and the two councils is firm and binding. It therefore meets that criterion.

The second point was referred to in the report on the development of the former Woolwich Arsenal, which became Thamesmead. I quote from paragraph 133: … if the Council took possession before payment was received in any particular case no interest would be payable (a concession to which the Treasury agreed, with the stipulation that any interval between the Council taking possession of land and paying for it should be kept as short as possible). It is my contention that as five years was taken between the original parliamentary announcement of the release of this land and the signing of the contract on 15th March, 1969, a short interval is the interval between the period when the local council wanted to enter into the land— 28th October, 1968—and 15th March, when it wanted to acquire the whole of the property. That is a period of only four and a half months after five years of negotiations. By any standards, that should be thought to be a short period of negotiation.

I therefore seek to ask why it is necessary to charge interest between the time when the local council wanted to enter into the land—28th October—and 15th March, when the whole contract for £4.1 million, which was the price for that portion of the land, was due to be accepted. This is unjust. A total of £124,011 falls to be paid. This falls on local ratepayers and, to some extent, on the rates of local council dwellers. It is an unfair levy in respect of the period between when they wanted to enter in and when the contract was completed. They wanted to enter only to lay the main sewers. It was a small portion—a maximum of 10–20 acres—of the total acreage.

The last recommendation of the Public Accounts Committee was: Generally, your Committee wish to emphasise once again that Government Departments should ensure that terms and conditions of agreements are fully understood by both sides and are clearly set out in writing. In this case that criterion was fully met.

This is a partnership. Not only the Greater London Council and the local council, but also the Ministry of Defence, are concerned in the development, because it is the two councils which are responsible for constructing all the infrastructure for this great development. The infrastructure will serve the wellbeing of the tenants of the 35 acres of married quarters and of the Service men who are now housed in married quarters around the perimeter of the airfield.

I will list some of the facilities to be provided at local cost and which will clearly be used by the Ministry of Defence personnel. First, and perhaps rather sordidly, come the sewers. This is why we wanted to get into the land. Those are common to all users. Then parks, open spaces, schools, churches, shops, roads, the health centre, the welfare centre, the library—all those many other facilities are being provided by local funds and will obviously be of importance as valuable amenities to Service personnel living in the new quarters or in those now existing.

The local council has been very co-operative. One of the projects which the Ministry has launched is a museum—very appropriately so at Hendon Airfield, which is the cradle of flying. The museum there is to show the development of flying and some of our old and more recent aircraft of which we are all very proud. My local council has subscribed £1,000 towards the museum. One would think, in view of this, that the Ministry would be equally forthcoming and not try to squeeze every drop of blood out of this stone.

It is not as if the Ministry has not done pretty well on its own behalf, or on behalf of the taxpayer, in the price it has received—£.4.1 million, or £24,000 per acre. In 1926 nine of these acres were acquired at £330 per acre. Not bad to sell them back at £24,000 an acre. If it has been a private landlord, he would have been called a bloodsucker and a profiteer. We are not complaining about the price. I am pointing out that the Ministry has got a lot of value for a fairly modest investment. In 1933 another 25 acres were acquired at £40 an acre—to be sold back to the local community for council houses at £24,000 an acre. Another great area was voluntarily given to the nation because it was felt that it was valuable for the defence of our country. That land was obtained free of charge, and it is to be sold to my local council at £24,000 an acre.

The Ministry cannot argue that it has not done well in achieving a price of £4.1 million for this open space, and I cannot help pointing out that this sum takes into account, as it must, the development levy. I do not know how much that is, but it has obviously inflated the price because the district valuer must take that into account. The Ministry has done well for itself and for the taxpayers.

This time last year I toured Malaya and Singapore, where I saw acres and acres of desirable undeveloped land. I have since learned by Parliamentary Question that the Ministry of Defence has disposed of no fewer than 6,000 acres in Malaya and Singapore. What has the Ministry charged Malayans and Singaporians for this land? The answer is not £24,000 an acre. The answer is not one penny. The Ministry has given away these 6,000 acres. Is it not a little strange that whereas it is believed to be fair and equitable to charge my local council and my ratepayers £24,000 an acre, land is given to people who are well able to pay for it? It seems that different standards are employed in dealing with different people.

If the hon. Gentleman says that he would like to do this but the Treasury insists on having this money, perhaps he will tell the Treasury that it laid before this House the agreement which gave all that land and all those facilities and amenities to Singapore and Malaya. The Treasury is obviously willing to give defence land overseas away free of charge. Incidentally, it is also prepared to make a loan of £25 million to Malaya and £50 million to Singapore, even though there are many rich Chinese who would be delighted to pay for the land. The different treatment meted out by the Treasury to my local ratepayers and taxpayers in this country and to people overseas in respect of defence land is so marked that I cannot help drawing it to the attention of the House.

Mr. W. Howie (Luton)

I am one of the ratepayers concerned, unlike the hon. Gentleman, though I know that he is very interested in this issue. On the whole we are rather more able to pay our rates and look after ourselves than are the great majority of people in Singapore. On the whole we as ratepayers do not mind quite as much as the hon. Gentleman thinks is the case.

Sir Ian Orr-Ewing

I am glad to hear that one ratepayer does not mind paying this sort of money. Because of the feeling of equity and of levelling down to which the hon. Gentleman's party subscribes, I should have thought that he would take the view that all people should be treated the same, but that is not the philosophy which is applied to his personal interest.

In the interests of fairness and harmony I suggest that we should now arrive at a compromise. Officers of my council have been to the Ministry, I have led a delegation to the Ministry, and all that is left to me now is this Adjournment debate. The Minister has just moved into his new office. Let him take a new look at the situation and ask whether what is being done is fair. Let him concede that I have a case and that he ought to concede something. If he does not stand up to his civil servants in the opening weeks, he never will stand up to them. This is a wonderful opportunity for the hon. Gentleman to persuade them of the rightness of the case which I am deploying, which I am sure he supports in his heart.

This figure of £124,011 must ultimately be reflected in the rents for council houses, and partly in the rates paid by ratepayers in the surrounding area. If the Ministry of Defence had agreed, as my council suggested, to the occupation in stages by the two councils, as with the scheme which was approved in the case of Woolwich Arsenal which became Thamesmead, we would not have paid £124,000 extra in interest, but would have saved ourselves £91,400. I ask the hon. Gentleman to remember that it is not just a matter of £124,000, because if the money is borrowed to pay this levy, over 60 years two and a half times this sum will ultimately have to be found. Surely the Government should say: Here is a partnership, a scheme which we want to see, for council houses to be built as soon as possible. It would be unreasonable to charge the full levy from the moment they started to lay the drains until the contract was completed—4½months at £124,000. Let us come to a compromise. Let us start it on a 50–50 basis."

10.20 p.m.

The Under-Secretary of State for Defence for the Army (Mr. Ivor Richard)

I should like to start by thanking the hon. Member for Hendon, North (Sir Ian Orr-Ewing) for the kind words he used about me at the beginning of his speech. I can perhaps distinguish myself in one regard from the hon. Member for Buckingham (Mr. Maxwell), to whom he referred. I believe that his first intervention was voluntary—at least, I think somewhat more voluntary than mine has been this afternoon.

I want, first, to get rid of one red herring in the hon. Gentleman's argument, that about Singapore. I was not aware that we had withdrawn an immediate obligation to defend Hendon, North. This is still part of the United Kingdom. The Ministry of Defence retains an actual and immediate duty to do something about this part of England. Therefore, it is utterly and totally dis- tinguishable from a situation where we are withdrawing from a base which we have held for perhaps a century.

Sir Ian Orr-Ewing

Would the hon. Gentleman describe it as conscience money in regard to Singapore?

Mr. Richard

Whether it can or cannot be described as conscience money, Singapore is a long way from Hendon, North.

It is clear that there is here a definite argument of principle. I accept what the hon. Gentleman says about the strong feelings of the Barnet Council on this point. I hope, however, that he will agree that there are feelings on the other side of this argument about the utter impossibility of the Ministry of Defence doing what he is asking it to do within the limits of normal public accounting procedures.

I will come on to the point the hon. Gentleman makes about the Public Accounts Committee, but, before doing so, I think it will be instructive to look into the history of the matter. The hon. Gentleman did, but not in sufficient detail.

The history of the whole affair goes back some years to the decision of the Ministry of Defence to release for housing approximately 169 acres of the old Hendon aerodrome. That is the starting point for the argument between the Ministry of Defence and the Barnet Council. It is important to recognise that the amount of land released and the price paid for it are not issues now between the Barnet Council and the Ministry of Defence. I was surprised to hear the hon. Gentleman talk about the excessive nature of the £4.1 million that was fixed by the district valuer. It was not something between an unwilling buyer and an unwilling seller. It was not artificially inflated. It was fixed, as all public contracts of this kind would be, by a public official—and rightly so.

It is important that we should get those two pink, if not totally red, herrings out of the argument before going any further.

It is also important to recognise that completion took place on 14th March this year, but that the council in fact, and indeed in law I suppose, entered into possession of the land on 28th October last year. So there are at least two variations of what I might call normal conveyancing procedure. First, the variation that the council was allowed in prior to completion—

Sir Ian Orr-Ewing

That is always done.

Mr. Richard

Not always, with respect. The council was allowed into possession prior to completion because it so requested. Therefore, to that extent that was a concession. The second variation from normal conveyancing procedure was that, at the council's request, the completion date was put back to virtually the end of the financial year 1968–69.

The real difficulty in the case is clearly financial. Naturally, the Barnet Council was under two pressures which, to a certain extent, were conflicting. First, it wanted to get on with the job for which it was acquiring the land. Second, there was the pressure that to do this it had to find £.41.1 million at a time when money was tight, and, in the open market at any rate, it would have been difficult to raise such a large sum.

But the argument tonight is not basically a commercial one. There are no circumstances in this case which would take it outside normal conveyancing and commercial procedures. I am a little surprised to hear the hon. Member, representing the party that he does, in effect ask the Ministry of Defence to remove this case, in which I hope I can convince the House there are no special circumstances, from normal commercial procedure.

Therefore, the question which we should ask is whether there are any special circumstances around this particular development which make it so exceptional that normal procedures should not be followed. The Public Accounts Committee's criticisms of the Woolwich development are highly relevant—

Sir Ian Orr-Ewing

They are not.

Mr. Richard

If the hon. Gentleman will follow me for a moment, I think I shall convince him that they are not only relevant but extremely relevant.

The difference between the Woolwich case and the Hendon case is that, in the former, land was released slowly as the Ministry no longer required it—[Interruption.] That was the position, if the hon. Gentleman would care to check the facts. The criticism of the Committee in the Woolwich case was simply that the Ministry had not tied up the contractual side of the release sufficiently so that, as land was becoming vacant and was no longer required, the Greater London Council was not contractually tied to take it up quickly and the agreement by the Treasury to waive interest arose, as the hon. Member will see from the Report, very simply because no one foresaw at that time that there would be any delay in the successive stages of contract being gone through.

What the Committee said in the Woolwich case was that the Ministry of Defence had been wrong in not ensuring that land upon the purchase price of which interest would have been payable was taken up quickly, and money paid quickly. If that is the criticism over Woolwich, it applies with even greater force in relation to land over which there was no question of its gradually being released by the Government as they no longer required it, and which is one plot of land available for sale in one block, at one time, to one purchaser. If the Committee's criticisms are valid in relation to Woolwich, they are doubly valid in relation to the Hendon case.

Sir Ian Orr-Ewing

The whole matter turns, I maintain, on the definition of the term "quickly". I maintain that four and a half months from 28th October to 15th March, is not "quickly" in relation to the five years of the negotiations.

Mr. Richard

It does not turn on that: it turns on the fact that, in the Woolwich case, the land to be sold came on the market slowly as was released from Government use, but in Hendon it is available in one piece for sale to one purchaser at one time. If the Ministry can be criticised for delay between the stages by which the land was released at Woolwich, it is doubly open to criticism, a fortiori, in the case of a plot of land available for sale in one block.

Therefore, one should perhaps consider the suggestions of the Barnet Council in this case. The first was that it should acquire the property but should postpone payment not until the financial year 1968–69, but even further, until 1969–70. I hope that the hon. Member will agree that that it was right that that was turned down by the Ministry. I am sure that, had it been accepted, the Ministry would have been subject to severe criticism on later scrutiny—

Mr. Ian Orr-Ewing

rose—

Mr. Richard

With respect, it would be a good idea if the hon. Member allowed me to try to develop the case. He may not think much of it, but, having looked at it as carefully as I can in 24 hours, I think that the merits of the arguments are on the Ministry's side and not on the side of the Barnet Council.

The first suggestion made by Barnet would have meant treating the whole acquisition in two parts—the physical hand-over of the property, and the later and postponed payment. There could be no possible justification for that course.

The second suggestion was perhaps even more fanciful—whether the Barnet Council could take possession of the land in the autumn of 1968, with completion and payment to be postponed as long as possible, nearly to the end of the financial year, on 15th March, with the Defence Department waiving interest in the interim. The interest has amounted to £124,000.

I think the hon. Gentleman would agree that in normal commercial procedures this would be almost totally unheard of. If he bought a house or perhaps an office block and decided that he wanted to decorate one floor prior to completion, I have never heard of a transaction in which he could do it and in which the vendor would say, "I will not charge interest on the whole purchase price from the time you take possession." That is the normal commercial rule, and there seems to be nothing in this case to take it out of the normal practice.

I turn to the two arguments being put up by the Barnet Council to justify the exemption it claims. The first is the one the hon. Gentleman put this evening, that the work it is doing is partially on behalf of the Defence Department, and that that somehow entitles it to special treatment. But nothing it is doing on behalf of the Defence Department meant that it had to get possession of the land six months earlier. One cannot say that the percentage of the sewers coming to the Department's part of the development necessitated an earlier possession date or postponed completion. One cannot say that the earlier possession date can be attributed therefore to the fact that the development was joint, though I suppose it may be attributed to the fact that, rightly, the Barnet Council wanted to get on with the job.

The second ground is that pressure was being put on the council, as on all others, by the Government to build, particularly in the public sector, to house those on its waiting list. Obviously, that is absolutely true. Pressure has been continually put on local authorities by the present Government ever since they came to office to build more council dwellings. We have been more successful with some councils than with others. I am not aware that the Government have ever said that local authorities are entitled to receive what would in effect be a hidden subsidy if the land on which the houses were to be built was Defence Department land rather than land they acquired on the open market.

The Question having been proposed after Ten o'clock and the Debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty-seven minutes to Eleven o'clock.