HC Deb 19 December 1975 vol 902 cc1955-67

12.15 p.m.

Mr. John Wells (Maidstone)

. In seeking to raise this morning the subject of the financing problems of Covent Garden Market, I wish to examine the situation against the background of the considerable difficulties that now face British horticulture.

A very large amount, perhaps as much as 55 per cent., of the nation's fruit and vegetables passes through Covent Garden and perhaps as much as 85 per cent. of high quality flowers. Therefore, in any problems affecting Covent Garden the entire background of the horticulture industry must briefly be mentioned in passing.

Today the industry faces grave problems as a result of increased fuel oil prices and because of the introduction of equal pay for women in the tomato, flower-producing and fruit-picking sector of the industry. All these increases in costs mean that prices to the consumer are bound to increase. Therefore, there will be bankruptcies among small firms. Indeed there have already been a number of bankruptcies among the traders in the Covent Garden Market. We have seen bankruptcies among the smaller nurserymen who supply that market.

This is a difficult time in the industry. It is essential that the Government should tackle the problems quickly and sympathetically otherwise, if these sources of supply disappear, the sources of fresh fruit and vegetables will decrease. If the supply decreases the price will increase even further. This is a vicious circle and it is important that the Government should tackle the matter swiftly.

Having set the background to the problem, I wish to confine myself this morning to the problems affecting the market. I hope that the Minister in his reply will bear in mind that the market's problems cannot be taken in isolation. The market traders—or market tenants as they are called—are at present suffering higher rents than any other market in the country. They are paying £2.85 per square foot in contrast with a figure of £2.15 per square foot at the Western International Market, which replaced the old Brentford Market, and a figure of £1 per square foot at Spitalfields Market organised by the Corporation of the City of London. Therefore, the tenants in Covent Garden receive less for their money than tenants anywhere else in Britain's markets. I believe that if that is the case the Minister must see to it that they are treated fairly and equitably.

I believe that the problems all stem from the unsound financing of the market in the first place. When the market authority was originally set up to take over the old Covent Garden properties, they were let at a figure of £3.9 million, but the authority failed to met the interest charges. Thus, with interest piling upon interest, by September 1974 the market authority owned the Government a sum of £7.2 million. That was an incredible escalation of the original figure of £3.9 million. The new market has cost a great deal to build and the final costs are not yet published, but we see from last year's annual report a figure of £20.7 million, plus unpaid interest of £5.3 million. I believe that the total indebtedness now is £33 million to £34 million.

How has the problem arisen? It has come about almost entirely as a result of the preservation orders on the old market buildings—a situation that prevented those buildings being sold at an open market price. I am sorry today that in this debate on the horticultural industry there are only three horticultural hon. Members who intend to make a contribution. Apart from my speech, the House will no doubt hear my hon. Friend the Member for Folkestone and Hythe (Mr. Costain) and the Minister, who will reply to the debate. The problems of British horticulturalists lie not at the door of the Ministry or of my hon. Friend the Member for Folkestone and Hythe or myself. As I said in 1961, when attacking the proposals of my own Government, this change should have been charged to the GLC or the Department of the Environment. They are the people who have mucked about British horticulture. I believe that the Minister who is to reply to the debate will do his best to help the traders. The fault lies with the conservationists. They have put the heavy burden on our horticultural community. I am the first man to be in favour of conservation, but when conservationists get special treatment that mucks up other people, the bill should be paid by the Department of the Environment or the GLC and not by market traders.

The surplus from the sale of the old market which went towards building the new market at Nine Elms was only £1 million and the new market has already cost £33 million or £34 million. It is clearly absurd that we should be in this position. I hope that steps will be taken to recover from other people the burden that is being placed upon horticulture.

It is ludicrous that the old flower market should be preserved. I am not talking about the Floral Hall and it is unfortunate that people who do not understand these things do not know the nomenclature. The Floral Hall is a magnificent building, but the flower market is a nasty, tatty tin shed and the sooner it is pulled down and the site put to a proper commercial use, the better. I know that the Campaign for Real Ale is giving a temporary boost to its use and this is a good thing, but the site-contracting which has happened in the use of the old market is deplorable.

The new market is a fine building, and a large percentage of the nation's produce passes through it. If we have a Channel Tunnel one day, we may need a railhead into the new market. This was included in the original plan and the market could be a trend-setter for markets in this country. It is important that the Government recognise the premier and leading position of the Covent Garden Market.

It is believed that the Treasury has ordered the Market Authority to increase its revenue by £300,000 a year as a matter of urgency. This may well be true, but instead of bullying tenants, the Authority should be looking to use its resources in a more sensible way. There is an area of about 14 acres where the builders' site office used to be. This could be used for other purposes, but Wandsworth Borough Council is preventing any entry or egress from the road. It is most unfortunate that local authority after local authority has added to the problem.

I hope that the Ministry of Agriculture will have serious and urgent discussions with the GLC for proper compensation to be paid for the old site, and with the borough council, so that use can be made of the vacant 14 acres on the new site. Instead of penalising the traders, the Authority should be looking at other ways of raising revenue.

I understand that the tenants were told fairly recently—and I sought to adjourn the House 10 days ago on this topic—that they would have tolls introduced in addition to their rents. However, in a letter dated 11th July 1969, the Covent Garden Market Authority said: Following discussions with the Flower Market working party we have decided to introduce rent increases coupled with abolition of tolls (as has already happened in all the Fruit and Vegetable markets) and of bye-day rents (to bring the system into line with the arrangements which will apply at Nine Elms). In another letter, even earlier, on 17th January 1967, the Authority wrote it is likely that a fixed rent and no toll will be charged in the new market and any changes in the procedure in the present market leading to a more ready appreciation of the implications of renting space in the new market and to a more gradual 'acclimatisation' to the expected conditions in the new market are to be welcomed;". The whole trend of the information given to tenants in the past has made them assume that tolls were "out". The Market Authority has acted improperly at the behest of the Treasury, first in trying to bring in vehicle parking and entry charges. The tenants resisted these on legal grounds and the Authority accepted their point. When they were defeated on that, the Authority resurrected the question of tolls and that is equally improper against the background of the information from seven and eight years ago which I have already mentioned.

As to possible alternative sources of revenue, there is the 14-acre site I have already mentioned and there is still 150,000 sq. ft. of the Market Towers building unoccupied. Negotiations were taking place with Mobil Oil, but they stopped overnight. I wonder why? I suspect that it was because the proposed rents were too high. Instead of accepting a reasonable rent, the Authority probably opened its mouth too wide. What will happen now? We are told that a Government Department is to rent the building, and I must complain about this. There must have been secret negotiations between one branch of the Treasury and another—fiddling their books in private. The House would like to know the open figures and if we do not discover them today, I hope they will come out in response to some Select Committee within the year.

It is an extremely bad thing for the Authority to have been negotiating in the open and then suddenly to go behind closed doors at the same time as the Treasury has told the Authority to squeeze another £300,000 out of its tenants.

There have been bankruptcies in all sectors of British horticulture. I visited the market in the early morning the day before yesterday and saw more empty sites than on any previous visit. I was glad to see that one man had actually had the courage to come in, but the number of newcomers was very small. Instead of traders, there are vegetable processers and others. I welcome them, but the market is not the proper market it should be.

Not only are the tenants being asked too much, but many shop sites are still unlet and some cafés are not entirely successful. On the one hand, the market is too grandiose and on the other, it is tatty. There are doors that were broken when the market was being built and they are still broken today. Stairs which were to have had metal strips on the front are crumbling and there are no strips. Heated panels which are meant to give a reasonable warmth at this time of the year are pretty well cold.

There has been grave mismanagement and cheese-paring, on the one hand. One appreciates that the cheese-paring results from the financial difficulties, but if the project had been financed aright from the start these difficulties would never have occurred. I say that the shop sites are empty because the prices are too high. The railway arches are empty. True, they are not attractive industrial sites, but there are many small independent traders who would be glad of any industrial site in the centre of London.

I therefore urge the Minister to talk to the Market Authority about cutting its cloth to please its public. I urge him to talk seriously and urgently to the local authorities, which, I believe, have created many of these problems. I mentioned the unlit shop sites. Can the Minister imagine the plight of a young secretary working at Covent Garden? About 3,000 people work on that site. Where does he think they could go to get a toothbrush, for example? The young secretary would not have a car and would be unable to get to a chemist's shop. A man would have to work right through the day and would have no opportunity to go shopping. There is one extremely good newsagent who has diversified a little, and all credit to this chap for running a good business, but it is totally inadequate to service the Market's large working community.

Under the rules of Adjournment debates I am not permitted to ask for changes in legislation even though the Minister knows that that is what I should like. Let me ask, however, for swift negotiations with the local authority to enable the unused areas to be occupied. Secondly, I should like a swift commercial appraisal of the use of the Market Towers building. Thirdly, I ask for the shop sites to be let at an economic price so that they do not stay vacant for ever. If they are let there will be more trade and more life at the market.

It was said that one of the problems in the old market was pilfering and that one of the strengths of the new market would be that since it was within a perimeter fence there would be no pilfering. This has not, unfortunately, proved to be the case. The perimeter wall is not quite high enough to keep out some of the gentlemen who were being discussed in the previous debate. I urge the Minister to ensure that other trading activities take place within the perimeter fence so that instead of its being a dead, deserted Colditz there should be a bit of life about it.

You, Mr. Deputy Speaker, well know from your native city the joy and life of a real market place. There was joy and life in the old Covent Garden, but Nine Elms is a dreary depressing place. The executives come early and go early because there is nothing to keep them there. They get through their work as quickly as they can and then they are off. That is bad. It should be a pleasure for anyone to be at his place of work. Nine Elms should be made attractive. The Government monopoly is depriving the porters, the staff and all the work-people there of a joyous place to work, which is what the old market used to be.

The malaise of British horticulture, with which I opened my remarks, extends to other markets, notably Birmingham. However, there are others. Western International rents are still 70p lower than at Covent Garden, and there are still vacant sites there. I must urge the Minister to look sympathetically at the whole problem of British horticulture and, in particular, the problem of Covent Garden Market.

12.36 p.m.

Mr. A. P. Costain (Folkestone and Hythe)

We all know the interest that my hon. Friend the Member for Maidstone (Mr. Wells) takes in horticulture, and we know, too, for how long he has been pressing to get this debate before the House. He is an expert in horticulture, and he grows produce. The Kent Members who see his stall at the Kent County Show are amazed at the produce that he brings forward. Perhaps I should declare an interest, in that my hon. Friend sometimes supplies me with apples. We use the House of Commons car park as a miniature Covent Garden Market.

The problem we face is that if prices at Covent Garden get too high, people will not use it. Covent Garden is probably one of the best known markets in the world. It is a pace-setter. My friends in the horticulture industry tell me that Covent Garden is the place to sell when produce is in scarce supply, but that when produce is plentiful other markets may be more suitable.

The original concept of the Covent Garden move was developed in 1961. I was then a relative newcomer to this House and I had the privilege of serving on the Committee dealing with the hybrid Bill. We had a careful discussion of the whole procedure, and the Covent Garden Act was the result. Of course, we did not realise that there would be another such Act in 1966. It was this latter Act that gave preference to the payment of tolls.

It is well to consider an article by Mr. Donald Mack, who is an expert on marketing and managing director of the Mack Organisation, one of the largest marketing concerns in the country. He draws attention to the varying costs of market operation. His article shows that the rent in Cardiff is 81p per square foot, in Gateshead 95p, in Bristol 92p, in Liverpool 203p, in Western International 215p, and in the new Covent Garden 258p. He says that the new Smithfield Market at Birmingham will produce the staggering figure of 365p per square foot. These prices have all to be paid for eventually, either by the ratepayer or by the consumer. Mr. Mack points out that EEC markets get support from their individual Governments and from the EEC itself. What steps have the Government taken in the Common Market to secure grants for our market projects?

The NFU is worried about the situation in horticulture. This subject was raised in the debate on the Christmas Adjournment last night, so I shall not weary the House again with it today. Suffice it to say that we must improve our marketing facilities, but we must do so economically.

The idea behind the legislation was to clear up the old Covent Garden Market and turn it into an asset for London. All the opportunities are there to do this, but because of planning control financing of the project has gone wrong. That has caused rents to go up, and that has led to partial failures in property development. I have no interest to declare on property development at the moment, but I have spent a good deal of my life in it and I know of the dangers of putting up rents to try to provide some recompense. As my hon. Friend the Member for Maidstone said, if this were a private enterprise proposal those shops would not be empty; they would be let at nominal rents to encourage tenants to come to the Market.

In a debate of this sort we cannot ask for finance. However, I impress upon the Minister the need for a thorough inquiry into this matter. Can he give an assurance today that a full-scale inquiry will be held in public, so that we may understand the situation?

12.40 p.m.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Gavin Strang)

Perhaps not surprisingly, the hon. Members for Maidstone (Mr. Wells) and Folkstone and Hythe (Mr. Costain) have both taken this opportunity to raise some fairly pertinent points in relation to the horticulture industry. I do not propose to follow them, save to make one point. Less than two hours ago I met a top-level deputation from the National Farmers' Union, led by Mr. Richard Butler, specifically to discuss the position of the horticulture industry.

The Government recognise the difficulties that the industry is experiencing and, in particular, the effect on the glasshouse sector of the sharp increase in prices that was announced recently by the oil companies. I make the further small point that it was a little unfair of the hon. Member for Maidstone to imply that the smallness of the attendance of today's debate is a reflection of the lack of interest by hon. Members in horticulture.

Mr. Wells

No. The Minister has misunderstood me. I was not complaining about the smallness of the attendance. I was putting the blame at the door of the Department of the Environment, the Metropolitan Police and Wandsworth County Council—everyone but the hon. Members who have taken part in the debate.

Mr. Strang

I am grateful to the hon. Gentleman. I misunderstood him. I shall not follow the arguments advanced by the hon. Member for Folkestone and Hythe about the EEC. We are always looking to the Community for sources of finance. We have had long discussion and question-and-answer sessions on the oil subsidy and on the position that the Community takes in regard to horticulture and the glasshouse sector.

I am grateful that the hon. Member for Maidstone has initiated the debate, because it gives me an opportunity, on behalf of the Government, to set in better perspective the origin and rôle of the Covent Garden Authority.

Only today I signed a letter to my hon. Friend the Member for Harlow (Mr. Newens), who wrote to me about some of the very points that the hon. Member for Maidstone has raised. I also take this opportunity to pay tribute to the work of the Authority in accomplishing successfully the major task of moving the country's premier and largest wholesale horticultural market from its former site.

The old Covent Garden Market may have been picturesque and full of tradition, but it was also an anachronistic clutter. Those who kept the market going in its last years, the Authority, the traders and users of the market, the local authorities and the police all deserve the greatest credit. However, very few of the hon. Member's constituents, with their interests as growers seeking outlets or as consumers wanting a great variety of fresh produce from all over the world delivered to them as quickly and economically as possible, can doubt the real benefits that the new Covent Garden Market can provide from its spacious site and modern premises at Nine Elms.

The Authority was set up because the Administration at that time believed, as we do, that it was not practicable for a private organisation to undertake the task of running and improving such a major market serving all parts of Greater London, the Home Counties and, indeed, the whole country—both as a means of distribution and in a price-setting rôle.

As the Authority's present Chairman, Sir Henry Hardman, will within a few days be stepping down after nine years' splendid service to the cause of a new Covent Garden Market, let us leave him in no doubt at all that his achievements have been greatly appreciated. I trust the whole House will welcome the new Chairman, Sir Samuel Goldman, and wish him well in the challenging task that he takes up on 1st January.

The financial problems facing the Authority are indeed considerable. There is no baulking that fact, but it is a matter deserving the most careful consideration and it is not to be assumed that one course or another must automatically be taken.

The Authority has placed upon it by statute the obligation to provide suitable services for the trading in horticultural produce by wholesale and at the same time it is statutorily required to break even, taking one year with another. My right hon. Friend the Minister of Agriculture has made it clear in recent discussions with organisations—including the National Farmers' Union—which have approached him that he is fully aware of the financial difficulties created for the Authority by circumstances outside its control, and that he is considering what action, if any, it would be appropriate for him to take. I do not think I can usefully go further than this today.

Hon. Members are, I trust, fully aware of the effects of inflation on all walks of our national life. Indeed, the hon. Member for Maidstone referred to the problems being experienced by other markets. My hon. Friend the Member for Birmingham, Northfield (Mr. Carter) has been leading a vigorous campaign for assistance for the Birmingham market. At the same time, we have to recognise that the Covent Garden Market is in a special position, it being a single-purpose statutory authority.

The hon. Member referred to the proposed introduction of a system of entry charges or tolls on produce brought into the new Market. I have explained that the Authority has a statutory duty to break even, taking one year with another, and the introduction of charges of this sort is a reasonable way of contributing to this end. It has been argued that the revenue from entrance charges or tolls is small in relation to the Authority's total indebtedness to the National Loans Fund. I cannot accept this as an argument for doing nothing to increase the Authority's revenues.

My right hon. Friend has considered very carefully these and other points put to him on behalf of users of the Market and has concluded that he would not wish to intervene in the Authority's managerial decision, which has been taken in the light of all the circumstances.

The hon. Member for Maidstone would recognise that perhaps it was a little incautious of him to refer to the breakdown in negotiations with the Mobil Oil Company without his being prepared to state all the reasons and considerations that led to that development. I hope that he will not be so unkind as to imply that there was any "fiddling", which was the word he used.

Mr. Wells

Not in that context.

Mr. Strang

I am glad that the hon. Gentleman has made it clear that he was not criticising the management of the Authority about the Mobil Oil situation or any organisation or Department that may move into these premises.

Mr. Wells

I do not think that I have made the position quite clear. Members of the public and hon. Members do not know the situation. We should like it to be made clear. The word "fiddling" had nothing to do with the Mobil Oil Company or the Market Authority; it related to pressures from the Treasury upon the Market Authority to have another Government Department. If one Government Department works with another everything is done behind closed doors and no one knows how the negotiations are proceeding. In the end, it is still the miserable taxpayer who pays, and that is what I object to.

Mr. Strang

The hon. Gentleman should not expect me to comment on the specific points related to the Treasury. It is normal practice for Government Departments to pay economic rents for premises. However, these points are out-with the scope of this debate.

We take note of all the points made in this debate. I repeat: my right hon. Friend is giving the financial position of the Authority his close attention.