HC Deb 24 November 1977 vol 939 cc1945-54

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

12.42 p.m.

Mr. Roy Hughes (Newport)

I welcome the opportunity for this debate. I should like to say at the outset that I am in full agreement with the principles that led to the setting up of the Welsh Land Authority and with its objectives. Nevertheless, there is considerable concern now over the appointment of Mr. Anthony Johnson as its legal adviser.

I shall give the House the essential background of the matter. There has been an extravagant misuse of public funds—because it is, of course, ultimately the ratepayers and taxpayers who have to pay the bill. The basic facts are that Mr. Johnson was appointed to this position in the summer of 1976 on a grade going up to £11,500 per annum. He had previously left his job as Secretary to the Hampshire County Council in 1975, allegedly through ill health. No details have been reported publicly, as far as I am aware, of the nature of the illness. Likewise, no independent medical evidence was submitted in support of that claim. There have also been reports in the Press that certain aspects of his work with Hampshire County Council were criticised.

What is confirmed is that Mr. Johnson was paid an index-linked pension. Reports stated that the pension started at £6,400 per annum and that it could eventually amount to more than his present salary. It is now allegedly around £10,000 per annum. In addition, he is reported to have received a golden handshake amounting to about £20,000.

Mr. Johnson is a relatively young man—44 years of age. He left his employment in Hampshire at the age of 42. According to the South Wales Echoof 26th September, the Hampshire County Council chief executive, Mr. Keith Robinson, said that while on sick pay with the Hampshire County Council Mr. Johnson was paid £14,200 and was also given permission to lecture in the Southampton Polytechnic—which, incidentally, is a body funded by the county council—and for this separate appointment he was paid at the rate of £5,400 per annum. Again, according to the Western Mailof 1st July, a spokesman for the county council said that Mr. Johnson is now fit again.

I suggest that this is a pretty remarkable story so far. It would appear to me that the county council was not a particularly zealous custodian of the public purse.

I was concerned about this case, so, early in July of this year, I got in touch with my right hon. and learned Friend the Secretary of State for Wales and my right hon. Friend the Secretary of State for the Environment and called for an inquiry into the whole matter. I posed a number of questions. First, I asked what was the total length of service of Mr. Johnson in local government. Secondly, I asked what was the nature of the illness which brought about his retirement at the age of 42 and what supporting medical evidence was supplied to his employers. Thirdly, I asked what was the precise time at which he took up employment with Southampton Polytechnic. Fourthly, I asked what medical evidence was provided before he took up the latter appointment, and whether that appointment was superannuated. I also asked for confirmation of his salary as Secretary of the Hampshire County Council, the precise amount of his golden handshake from that body, and what were the terms and conditions of his inflation-proofed pension. This information is vital to the public, bearing in mind that he held the post of secretary for only 12 months.

In passing, I could not help comparing the treatment afforded to Mr. Johnson with that afforded to manual workers in heavy industry. I have in my hand a copy of the manual grades superannuation scheme for steel workers employed by the British Steel Corporation. It is fair to suggest that the rewards paid to our Steel workers after a lifetime in the industry are parsimonious by comparison with what Mr. Johnson has received. Many miners in South Wales—some in the constituency of my hon. Friend the Minister—has spent 40 years in that arduous and hazardous industry. Their lungs get clogged in the end, but they receive only a pittance.

I turn to Mr. Johnson's appointment with the Land Authority for Wales. Presumably this body made a full investigation into his background of service in local government and so on. That would seem to be the natural thing to do, bearing in mind the importance of the problem. But can the Minister confirm that this was done, because it seems that that might not be the case? The rôle of people in high places in the Land Authority is called into question here.

I am particularly concerned about obtaining answers to the questions that I have put. I have written to many people about this case, including the Secretary of State for Wales, the Secretary of State for the Environment, the local government Ombudsman for Wales, the district auditor and the Comptroller and Auditor General.

I have heard of political hot potatoes, but this case reminds me of a game played by my young daughters at birthday parties. It is called "Pass the Parcel" and the one left with the parcel at the end carries the can, so to speak. The Secretary of State for Wales told me on 27th July that this case was not his baby and that he was unable to comment on the matter. The local government Ombuds- man, Mr. Dafydd Jones-Williams, said that he had no jurisdiction to look into the matter. He suggested that I went to the district auditor.

In the letter of 9th August, the district auditor said that this matter was not within his jurisdiction. He sent a letter to Mr. A. J. Kappler, the district auditor who covers the Hampshire County Council, but I have not yet heard from him.

The district auditor in Cardiff also told me that responsibility for auditing the accounts of the Land Authority rested with the Exchequer and Audit Department. I wrote to Mr. Douglas Henley there, and on 4th October he said that he had no responsibility for this county council matter, that Mr. Johnson's appointment with the Land Authority had come up for review in the normal course of the audit, but that his conditions of service, including superannuation, had not yet been finalised.

There have been other snippets of information forthcoming. For example, the Under-Secretary of State for the Environment told me on 18th July: The mode of superannuation for Mr. Johnson in his present employment is undecided. That is 12 months after the appointment had been made. My hon. Friend's letter continues: If Mr. Johnson re-enters the local Government scheme, he will become subject to the abatement provisions, the effect of which is to ensure that pension, together with the pay on entering the new appointment, does not exceed the pay of the former post. Is the pension referred to in that letter the £6,400 that Mr. Johnson was receiving when he left his appointment with the county council or the £10,000 that he gets now?

If Mr. Johnson joins the South Glamorgan superannuation scheme, part of his pension could be wiped out. Then the public purse would be at least partly safeguarded. Nevertheless, the honourable course for Mr. Johnson is to forgo the pension or to resign his position with the Land Authority.

The whole sordid story is one of laxity and mis-management. Some of us have been saying for a long time that the local government reform carried out by the previous Government helped trigger off inflation, which has done so much damage to our economy. Cases such as Mr. Johnson's only confirm our misgivings. How many more Mr. Johnsons are there? His case was brought to public notice only by accident. The Western Mail deserves full praise for bringing it to public notice.

I opposed the Government's recent public expenditure cuts, and I felt fully justified. A few days ago the Government published a study of school buildings. The South Wales Argus reported on 22nd November: Only half the secondary schools in Britain have adequate space for pupils and one in four schools still have outdoor lavatories, according to a government education department survey published today. The survey says there are ' serious deficiencies' in a substantial minority of older schools and it would cost £1,500 million to put all the short-comings right. Education secretary Mrs. Shirley Williams has suggested that only one in ten schools will get the money they need in the next few years. Despite that, money can be misused, as I have illustrated in the case of Mr. Johnson. It is a public scandal.

It has not escaped my notice that many of those opposed to the creation of a Welsh Assembly are allegedly opposed on grounds of cost, yet many of them supported the reform of local government. The cost of a Welsh Assembly would be infinitesimal in comparison.

The Government should grasp the nettle and streamline local government to avoid any more cases such as that of Mr. Johnson, cutting out one tier of local government and ignoring the vested interests which are making so much noise. Then we can talk of saving public money, not squandering it as has happened in the case of Mr. Johnson.

12.59 a.m.

The Under-Secretary of State for Wales (Mr. Alec Jones)

Strange as it may seem, I am grateful to my hon. Friend the Member for Newport (Mr. Hughes) for raising this subject tonight. I am grateful to him for his support of members of the Land Authority for Wales. I am also grateful to him for the support he has indicated for the establishment of a Welsh Assembly.

The matter my hon. Friend has raised has aroused considerable interest among hon. Members—not that one would notice it by the attendance in the Chamber now, although that is the norm on these occasions, so I do not complain.

It has also aroused considerable interest in the Press and among the general public. I believe that to be a right and proper interest.

My hon. Friend and other hon. Members first questioned me about appointments to the Authority at Question Time on 11th July last, but I shall take this further opportunity to supply a more detailed account of the statutory provisions governing the appointment of staff to the Land Authority for Wales so that the House will be clear about my right hon. and learned Friend's position in relation to such appointments.

One of the first tasks of my right hon. and learned Friend in fulfilling his statutory responsibilities under the 1975 Act was to choose the nine members of the Land Authority. This he did shortly after Royal Assent was received. As an indication of the extent to which we value the interest and the co-operation of local authorities in Wales, my right hon. and learned Friend went out of his way to make special provisions for local authority members to sit on the Board of the Land Authority. In fact, four of the nine LAW members were appointed in this way after a round of consultations with the local authority associations.

By the time the Board had been appointed, a small staff was already in post, including staff seconded from the Welsh Office, and office accommodation had been provided. The next step was to build up the complement of staff. In this respect, I would draw my hon. Friend's attention to the fact that when the Community Land Bill was first published a staffing requirement for Wales of 750 was envisaged. Indeed, approval was later given to an initial complement of 200, but, in the event, the Authority has done its "housekeeping" so well that it has managed with fewer than 50 staff. This is a remarkable achievement, and one which should silence opponents of what is sometimes referred to as our "swollen bureaucracy".

The members of the Authority and this reduced staff have worked extremely hard in their first year. Even the Press acknowledges their efforts—and I can do no better than to quote the Economistof 3rd–9th September, in a special article on the community land scheme, which reviewed progress by local authorities in England and went on to describe the Land Authority for Wales as one of the good bits of the scheme". The quotation continues: In contrast to England, where the jam for the scheme has been spread thinly over a large number of local authorities, the government gave one £3m. dollop to the Land Authority for Wales, and left it alone. Because of that, and because it concentrates solely on buying and selling development land, it acquired 400 acres of land at a cost of £1.9m., in just six months leading up to April 5th. If the full value of the land is realised when it is sold the authority stands to make a profit of £¾–2m. Comments like this—and I could quote many more—are most encouraging, and especially satisfying to my right hon. and learned Friend and myself, because we know, from our detailed surveillance of the work it does, that the Authority is doing a first-class job. Its approach combines business realism and social awareness. It is seeking profit for the community, and it looks for areas where development is needed to assist local people—when houses are wanted or land should be secured for a new factory or shop. It has carried on the fullest discussions with local authorities—which is of the first importance—and it has consulted Government Departments, agencies, trade associations and many other bodies.

These are early days, of course, and I am not offering a final judgment. But the Authority is working well, and much of its success can be directly traced to the skills and determination of its Chairman. She has shown all the qualities which were essential to build up this structure and, what is more, to make matters go so well.

I said at the beginning of my remarks that I would be giving an account of the statutory provisions governing the appointment of staff to the Land Authority. As my hon. Friend knows, the Authority was set up under the provisions of Part II and Schedule 3 to the Community Land Act 1975. Under paragraph 5 of Schedule 3, the Secretary of State is required to give formal approval to the appointment of the "secretary", as he is referred to in the Act—in other words, the Chief Executive. But in all other cases the choice of individual is a matter entirely for the Authority to decide.

I repeat what I said to the House on 11th July—that the only appointment to the staff of the Authority which needs my right hon. and learned Friend's specific approval is that of its Chief Executive. Of course, in the final analysis the Government retain the overall controls of the Authority's administration. The complement of staff and the various gradings and salaries can be determined only after consulting the Secretary of State, acting with the consent of the Minister for the Civil Service.

I said a moment ago that the appointment of particular officers to fill posts below the rank of Chief Executive was a matter for the Authority itself. But the Land Authority for Wales was nevertheless encouraged from the beginning to adopt the recruitment procedures generally followed by public bodies when taking on staff, and I expect that my hon. Friend would like to know something about the steps taken by it to comply with these procedures in relation to the post of Director of Legal Services.

The post was widely advertised in the usual way, and candidates from a short list were interviewed in January 1976. The Authority's choice finally settled upon Mr. Anthony Johnson, who took up his post in May after supplying medical and other references. I have been in touch with the Authority about this, and I have no reason to question its statement that, as with all other appointments, its aim was to choose the person best qualified to be its legal adviser and ensure that he was paid the rate already agreed for the job.

My hon. Friend made certain references to Mr. Johnson's previous appointment. Neither I nor my right hon. and learned Friend has responsibility for those matters. That is an arrangement between Mr. Johnson's previous employer and himself. But I have made inquiries into this, and some of the figures which my hon. Friend gave are not quite right, according to my information.

I place on record that my information is that Mr. Johnson's pension on retirement amounted to £4,876, and that he is now, with inflation-proofing, which was decided by this House, getting £5,812 per annum. Any question about his state of health for pension purposes is a matter for the Hampshire County Council.

Indeed, my right hon. Friend the Secretary of State for the Environment has no power to intervene in pension matters affecting individuals, except in so far as the employee himself has and exercises a right of appeal.

Mr. Roy Hughes

With regard to the figures which my hon. Friend gave concerning Mr. Johnson's retirement pension with Hampshire County Council, with inflation proofing, I fail to understand the lack of communication, because the figures I gave have been repeated time and again in many sections of the Press. Why, if they were inaccurate, have they not been refuted before?

Mr. Jones

I do not propose to spend my time refuting figures which have appeared in the Press. If I am wrong I shall certainly do everything I can to correct this. My information is that the figures I have given are the actual figures for the pension Mr. Johnson received at the time of his retirement. With inflation-proofing the figure at 25th July 1977 was £5,812. My right hon. Friend the Secretary of State for the Environ- ment does not have powers to intervene in pension matters. Any local government elector in Hampshire can challenge the employer's actions at the annual audit of account, and I understand that this is being done.

My hon. Friend asked me about the extent to which Mr. Johnson's conditions of service with the Authority have yet to be finalised. I readily concede that it is taking a long time to settle the superannuation arrangements arising out of Mr. Johnson's conditions of service with the Authority but superannuation is, after all, a complicated subject, and complicated subjects take time to unravel.

What I can say is that we are looking at all the implications of the matter and will reach a full and considered judgment as soon as we possibly can. In our review of the case we shall make a close examination of the facts and opinions which have been expressed by my hon. Friend in tonight's debate.

Question put and agreed to.

Adjourned accordingly at eleven minutes past One o'clock.