HC Deb 13 March 1973 vol 852 cc1253-62

10.31 p.m.

Mr. Charles Loughlin (Gloucestershire, West)

In a recent Adjournment debate I said, in what was almost a throw-away line, that a member of the Gloucestershire Planning Authority was, and might still be, a director of a land development company. The Western Daily Press, which circulates in my area, pursued this matter and subsequently disclosed that three members of that planning authority were directors of building and land development companies, and indeed that an official of the Highways Department was also a director of a land development company.

This debate must not be construed as an attack on the Gloucestershire Planning Authority or individuals associated with that authority. This is a national issue and what applies to Gloucestershire applies equally to planning authorities throughout the country.

Planning permissions could lend themselves to a degree of possible graft. We have only to bear in mind that fallow land which may be worth £500 an acre could be worth with planning permission £15,000 per acre—and, depending on the area, it could be worth substantially more.

The refusal of planning permission, if my constituency experience is anything to go by, beggars description. I must have examined hundreds of sites and in the majority of instances have yet to understand the real grounds for refusal. It may be that I lack knowledge of good planning principles, but I was at the Ministry of Public Building and Works for a considerable time and some of the gilt must have rubbed off on me when dealing with planning matters in that Department.

My biggest problem is in seeking to deal with those cases where the planners say that the area should be developed on a "comprehensive" basis. Let me try to illustrate the problem. A man has a piece of land which has been in the possession of his family for generations. He wishes to build a house for his son or daughter. He is turned down. Along comes a developer who is granted permission to develop the area, including the piece of land on which refusal to build was upheld by the planners. It is impossible for me to convince my constituent that nothing untoward has happened. Indeed time and again I have been asked to become the go-between for the passing of what my constituents call "back handers", and it is difficult for me to convince them that this is not done and that this is not the way to get planning permissions. From cases reported in the national and provincial Press it is obvious that the problem applies particularly in rural areas where the ownership of small pieces of land is not uncommon. The same problem arises when refusal is based on the projected development being outside a development area. There are cases when such grounds have been advanced and subsequently developers have come along and carried out substantial developments.

All members of planning authorities and their officials are certainly not crooks. The great proportion of them are good, honest people trying to help their fellow men. I am concerned about the minority who, in the words of a leading banker, referring to the Stock Exchange, said that there were those who would take every advantage of every situation to make money no matter how close to the wind they sailed.

In what I have to say I refer to this minority alone and it is against this minority that I want action taken. When Ministers of the Crown take office they are issued with the Prime Minister's guidance notes. They have to divest themselves of directorships and major shareholdings. There are some loopholes, and I would not claim that these notes are the absolute answer to possible corruption. I believe that over the years they have worked well. I wish that they applied not merely to Ministers but to Members of Parliament.

I would say that the avenues of graft and corruption at local level are in some instances greater than those at national level. The temptation to some people who are directors or major shareholders in building or land development companies must be almost irresistible. How can we explain the situation to ordinary men and women who are refused planning permission on their own land and are driven into the hands of these sharks who have filched hundreds of thousands of pounds from the community?

When it was discovered that a deputy surveyor of Gloucester County Council was a director of a land development company I was amazed to find that the County Surveyor, Mr. R. Downs, knew all about this. Apparently in law there is nothing wrong with such a situation. It was said that Mr. Downes had given the deputy surveyor permission to take up this directorship. This cannot be allowed to continue. Without commenting on the specific case, we cannot allow civil servants at local authority level who are intimately connected with planning to be directors of land development companies. The possibilities of such a situation are beyond belief. I hope that the Minister will look at this carefully. I am prepared to press this at Question Time and in future debates. I hope he will do whatever he can to change the situation.

There are two grounds on which those who support the present position under which members of the planning committees can be directors of building and land development companies, or major shareholders in those companies, argue that it should continue. First, it is said that if these people were debarred from being members of a planning committee the community would be robbed of a degree of expertise and would therefore be much the poorer. That is palpable nonsense because my experience of almost all the people who are directors of development companies is that they are not particularly interested in good planning principles. They are interested in maximum profits, and in many instances if they had their way we would be back to building 60 houses to the acre as happened in the 1830s.

The second argument is that they declare their interest and take no part in a discussion and do not vote on issues which concern their firms. That is no safeguard. The damage has already been done well before the specific case comes before the planning authority for decision. It is the pre-planning infomation that is of importance. That information may have been gleaned years previously. Such people might get the information they require two years before the meeting at which they declare an interest.

If the type of person to whom I am referring—and not the generality of members of planning authorities who may be directors—hears the slightest whisper that a particular area is to be developed under the long-term plans of the authority, that is enough to send him in grabbing land at low rates, sitting on it, knowing that in the fullness of time the community will pay through the nose to build a school, a road, or a hospital and that the ordinary man and woman, as we have seen in the last two-and-a-half years, and possibly the local authority will have to pay him fat profits for the privilege of buying the land or houses built on it. It is solely because such people have been able to get this information as members of the planning authority that they have been able to take advantage of the situation.

I challenge the Minister to make a random spot check on a number of authorities and to examine an area where members of the planning authority who are directors of development companies operate. Let him take possibly a five-year period. Let him examine the activities in the developments of companies of which they have been directors. I will almost gamble that he will discover a cesspit of corruption that makes Poulson pale into insignificance.

Persons who are engaged in public life should be incorruptible. That applies to Members of Parliament. I not only support publication of all information about the incomes of Members of Parliament on a register of interests but I go further and would prohibit many of the activities now engaged in by Members of Parliament, particularly in public relations matters.

Persons who are engaged in public life, whether they are Members of Parliament, members of local authorities or planning authorities, have to be not merely incorruptible but seen to be incorruptible by the average man and woman.

I have said some harsh things, and I want to repeat what I said earlier that I do not want anyone to think that I am making a blanket attack upon all members of planning authorities or even upon members of planning authorities who may be, or have been, directors of land development or building development companies. The majority of them may be as good as gold, but enough of them have taken or are taking advantage of the community, of local authorities, of the ordinary people, to justify a full-scale investigation by the Minister's Department.

10.46 p.m.

The Minister for Local Government and Development (Mr. Graham Page)

The hon. Member for Gloucestershire, West (Mr. Loughlin) has characteristically raised again the standard of the standard of behaviour in public life, and has directed the attention of the House to local government, where high standards of behaviour are essential, because the opportunities for self-interest bringing big rewards are frequent. The hon. Gentleman said that he thought that in those areas the temptation was irresisible. I would not go as far as that, but I agree that the temptations in certain areas of public life are very great.

The hon. Gentleman's examples concerned planning committees—both members and paid officials, as I understood him. The law has dealt with the subject of elected members over the past one-and-a-half centuries, with a changing attitude. A Poor Law Act of 1815 provided that poor relief administrators should not supply or contract for their own profit goods, materials or provisions used for poor relief in the area of their administration. Under the Municipal Corporations Act 1835 nobody was qualified to be elected or to be a councillor or an alderman during such time as he shall have directly or indirectly, by himself or his partner, any share or interest in any contract or employment with, by, or on behalf of the council.

There was then, early in the last century, the wholesale disqualification of people who were contracting or who had contractual relationships with their authority. For a century that idea prevailed, but in the 1930s control swung away from disqualification from election to disqualification from speaking or voting. Since 1933 the view has been that the wholesale disqualification went too far, and that professional people, skilled in business or having practical knowledge of the working of local administration, have much to offer to the deliberations of local authorities, and that it would be wrong to exclude them altogether. Therefore, the law concentrated on saying, "You must disclose your interests. Under certain circumstances you should not speak and you should not vote in connection with those interests."

The key factor is the possession of a pecuniary interest in a contract or other matter under discussion by the local authority or by one of its committees. If a member has such an interest and is present at the meeting at which the subject is to be discussed he must disclose his interest as soon as practicable after the start of the proceedings, and it must be recorded in a book kept specially for the purpose. The Member is then debarred from speaking or voting on:he matter in question unless he has already applied for and obtained a special dispensation from my right hon. and learned Friend the Secretary of State for the Environment. There is also the provision that if he, his spouse, his partner or his nominee is connected with bodies contracting with the council he is disqualified.

It is the practice of my right hon. and learned Friend to give dispensations to members who are disabled by pecuniary interest as follows: first, dispensation to speak is given fairly freely, provided that the member's interest is not peculiar to himself. Dispensation to vote is given only where at least half the council cm committee is disabled, or where the balance of political power is such that otherwise policies might be adopted to which the majority of members were opposed.

The hon. Gentleman drew attention to cases—which he said were a minority—where members take advantage of their position. I sought in his remarks for some solution to this beyond merely seeking for an inquiry into these cases. The hon. Gentleman drew attention to the use of pre-planning information. That can be used by anyone, whatever his profession or business, and therefore the disqualification of directors of development or property companies might not reach the mischief which the hon. Gentleman saw in this.

I sympathise greatly with the lion. Gentleman in his concern about these cases, and I assure him that I am considering very carefully what course can be taken to prevent this sort of thing from happening. One cannot prevent it altogether. There are black sheep in any profession, business or public body, but one can go as far as possible to make the opportunities less and the circumstances more difficult.

The position of officers in local government is slightly different from that of elected members. They are primarily answerable to the elected members. Their function is not to take statutory decisions but to implement the decisions of the elected members. However, there are occasions when the interests and the duty of a local government official can come into conflict.

There is the statutory provision that where an officer has a pecuniary interest in any contract or proposed contract involving his authority he must give written notice of this to the authority. In the case which the hon. Gentleman cited, apparently the official had disclosed his interest—his directorship—and had in that respect done all that was required of him, but I wonder whether he did all that was required of him in accordance with the conditions and standards to which I shall refer in a moment.

One must always remember in these cases that officers of local authorities are subject to the Prevention of Corruption Acts which would cover such conduct as the taking of bribes to influence decisions in a particular direction—what the hon. Gentleman referred to as "suspected backhanders".

Apart from those statutory provisions, there are particular restrictions on freedom of action of local authority officials in what I refer to as the national conditions of service, but what I understand is known in the service as the "Purple Book" which applies to administrative, professional, technical and clerical grades, and failure to comply with this standard would be a proper ground for disciplinary action against the officers concerned.

The Purple Book declares—and I think quite rightly—that The public is entitled to demand of a local government officer conduct of the highest standard and public confidence … would be shaken were the least suspicion, however ill-founded, to arise that he could in any way be influenced by improper motives. An Officer's off-duty hours are his presonal concern but he should not subordinate his duty to his private interests or put himself in a position where his duty and his private interests conflict. The "Purple Book" goes on to provide that senior officials … shall devote their whole time service to the work of their Council and shall not engage in any other business or take up any additional appointment without the express consent of the Council. A similar provision applies to chief officers.

Mr. Loughlin

I make it clear that, although I had to use a specific case as an illustration, I was dealing with the generality of the position of officers being able in law to carry on jobs of this kind. I was not in any way suggesting that the individual concerned had done something wrong in law, but that it was morally wrong.

Mr. Page

Yes. The "Purple Book" says in the part dealing with senior officers that: The employing authority should not attempt to preclude officers from undertaking additional employment, but any such employment must not in the view of the authority, conflict with or react detrimentally to the authority's interests or in any way weaken public confidence in the conduct of the authority's business. I think the hon. Gentleman has raised sufficient points to make us pay attention at that phraseology in the "Purple Book".

I return now to the general theme of the debate. Later this week, the House will be considering a motion asking the Government to initiate legislation to remove certain disqualifications of those who seek election as councillors. Tonight the hon. Gentleman has indicated a desire to impose more disqualifications. This shows the difficulty of the matter, and it is one in which all parties in the House can assist in finding a solution.

The qualifications and disqualifications of our democratic institutions should not be adopted merely upon the Government's diktat, but with all-party advice. I hope I shall have an opportunity of developing, in the debate on the motion later this week, the idea that we should seek all-party advice on the membership and qualifications and disqualifications in the democratic institutions of local government and in the other democratic institutions in the country, and that we shall be able, by that means, with the help of all right hon. and hon. Members and of experts outside, to protect the public to the utmost against the black sheep that are in our midst.

Question put and agreed.

Adjourned accordingly at two minutes to Eleven o'clock.