Hamilton College (Hansard, 12 March 1984)

§ Mr. George Robertson (Hamilton)
Unlike the normal beneficiary of the Consolidated Fund Bill draw, I feel no great pleasure in raising the subject of Hamilton college of education. Of course I value the opportunity to air the issues involved and to draw attention to one of the main scandals of the Government's term of office, but I approach the subject with a profound sense of sadness. It is sadness at the loss of a fine college of education that made a significant contribution to education in Lanarkshire by the training of teachers from Lanarkshire for Lanarkshire.
The devastating report of the Public Accounts Committee simply underlines the betrayal of public opinion throughout Scotland at the closure of a fine educational resource. It is sadness, most of all, because in this final saga we now have unbiased evidence that concurs with what we have charged the Government all along—incompetence, recklessness and culpable neglect of the public interest in disposing of the fine buildings and land of the college they have butchered.

§ Mrs. Anna McCurley (Renfrew, West and Inverclyde)
Whence does the hon. Gentleman derive that information, and on what evidence does he base his statements?

§ Mr. Robertson
If the hon. Lady will wait, she will find out how I arrived at that conclusion, which was as also arrived at by the bulk of the Scottish media and public.
As I drive along the Bothwell road in Hamilton and look through the Hamilton palace gates, I feel an overwhelming sadness at the waste of opportunity, resources and public money that are represented by those buildings which are now a private school and a property speculator's windfall.
Under that sadness, I share the burning sense of anger that the people of Lanarkshire feel about those who did the deed; those who resolutely stood against united and deeply felt public opinion; those who rejected the plain public interest, and threw away for a trivial amount the college and its grounds to satisfy their need to escape the nagging reminder of their political ineptitude.
One irony about the debate is that the Minister who will reply—the hon. Member for Eastwood (Mr. Stewart) played a distinguished part in 1980 in assisting us with the campaign to keep open Hamilton college. I record my thanks to him this evening, however embarrassing it may be to him, for the part that he played in the campaign. To emphasise that, I quote from what the Minister said in the debate in the Scottish Grand Committee in December 1980: My purpose is limited and single: to express to the Committee and to the Government the concern, anxiety and opposition of a large number of my constituents to the proposal to close Hamilton college. He concluded a fine speech by saying: The decision to close Hamilton college has touched a raw nerve in the body politic of the west of Scotland. Many who are sympathetic to the Government— Conservatives or independents—believe that a number of questions still need answers." —[Official Report, Scottish Grand Committee, 9 December 1980; c. 18–20.] What the Minister said then is still true. He knows in himself, if not in his brief tonight, that the same anxiety, concern and opposition to the handling of the sale of the 130 college exists in the west of Scotland and way beyond. People believe, as he said then, that a number of questions must still be answered.
Some of the questions were answered by the Public Accounts Committee, to whose report I draw the attention of the House. In doing so, I hope that the Minister can give the House a somewhat better response from the Government than we have heard so far. Stonewalling did not allay public concern. Bland put-downs and delaying tactics have not persuaded a genuinely troubled public that Ministers were acting in the public interest. Nor will the suddenly published Treasury minute this afternoon do much. Until now the Scottish Office chose to hide behind the protocol that it could say nothing until the Treasury minute was produced.
What was that protocol? The Government hid behind it as they waited for the Treasury to cough up the minute that we saw this afternoon, but the indicted Minister—the hon. Member for Edinburgh, Central (Mr. Fletcher), who is of course absent this evening — had no such inhibition. He held a press conference after the publication of the report, and appeared on television defending himself and the decisions that he took. He said that Opposition Members who had criticised him were "stupid and ignorant", and he made a feeble case in his defence.
Today we have the official Government response, produced out of a hat from Treasury Chambers in time for this debate. It is an attempt at a whitewash, but it is not successful, because the dirt still shows through. It is a half apology that admits some of the more glaring mistakes and concedes that procedures will change. That is some progress, but still no one seems to take the blame, and the Scottish Office continues to hide behind the small print and the technicalities. The full force of the criticism of the Public Accounts Committee is unanswered, because it is unanswerable. Gross errors were made, and the changes in procedure underline that, but their effect must be to lose the public purse at least £5.5 million.
Somebody has to take responsibility, and Ministers, who are the political masters of the Department, must carry the can. The unvarnished truth of the PAC report on this lamentable fiasco is barely dealt with by this reply. A comparison of the case that it makes with this threadbare and wholly inadequate response shows who the public should believe.

§ Mr. Michael Hirst (Strathkelvin and Bearsden)
Is the main burden of the hon. Gentleman's criticism that there was a procedural error or that the college was given away, as he has claimed, for a song?

§ Mr. Robertson
It is nice to see so many Conservative Members taking an interest in the Hamilton college case, which has been around for a long time. However belated, I welcome them to the debate. I hope that they have read the PAC report, which they have been picking up all afternoon quite spontaneously.

§ Mr. Hirst
Answer the question.

§ Mr. Robertson
The answer to the hon. Gentleman's question is that criticism of the Government is on both grounds. The hon. Gentleman can take his seat and listen to the rest of the case in silence.
This is no ordinary report. It was not a partisan inquiry. It cannot be shrugged off as a Labour vendetta, a grudge campaign or a political assassination. It is a thorough, 131 considered, detailed and heavyweight inquiry into the way in which Ministers went about selling a publicly-owned asset and managed to get only a tenth of its value back for the taxpayer. It is a damning indictment of the incompetence and fecklessness of those in public office charged with protecting the public interest. It is——

§ Mr. Barry Henderson (Fife, North-East)
On a point of order, Mr. Deputy Speaker. What is the normal custom or rule about reading speeches in the Chamber? Is it in order to read speeches in the Chamber?

§ Mr. Deputy Speaker (Mr. Harold Walker)
Hon. Members are allowed to refresh their memory from notes, albeit copious ones on occasions.

§ Mr. Robertson
The price that was obtained for the college was bad enough, but what the Public Accounts Committee most strongly condemned, and in language unprecedented for it, was the way in which the sale was conducted. It is on this score that no real defence has been offered or is available. That is what makes the complacency, the indifference and the contempt of the then Minister all the more indefensible and inexplicable. That is why The Scotsman called it a tale of fecklessness, bungling and appalling irresponsibility". That is why the Glasgow Herald called it an appalling sequence of administrative ineptitude". The report sets out its case with devastating clarity. The Halliday committee, which was formed after the previous scandal involving the sale of hospital land at Robroyston and the huge profits obtained there, made recommendations that were accepted by the Scottish Office in 1981, and the Secretary of State specifically accepted the use of professional selling agents in future land transactions. Ministers were advised to use an estate agency, but they chose to let the college be marketed by a firm of Glasgow solicitors with no real experience or reputation in selling commercial property of the size and value of the college site. Not only that, but the Ministers allowed the estate to be handed to a firm of solicitors, of which one of the senior partners had only just been appointed by the Secretary of State to the Jordanhill board of governors. A declaration was made, quite properly, by Mr. Pate, the solicitor in question, but for the Scottish Education Department and the Minister to have allowed even the possibility of a duality of interest to arise shows how sloppy, at best, the handling of the event was.
The chief valuer for Scotland was overruled, the solicitors' office of the Scottish Office was overruled, but still nobody will take the blame. Ministers were advised, by an expert who knew that it cost £2 million to build the college, that its replacement cost would be £20 million, but the chief valuer thought that it should fetch £6 million.
When I put forward such a figure earlier, the Minister simply sneered. In an Adjournment debate in November 1982, the present Under-Secretary of State for Trade and Industry, then Under-Secretary of State for Scotland, told me: With respect, the scandal and 'sorry and squalid episode' to which the hon. Gentleman referred consist in the fact that he has topped up and exaggerated the figure. That is the scandal. That is the irresponsibility of which he accuses the Government"— [Official Report, 24 November 1982; Vol. 32 c. 989.] That was said by a Minister who had seen the chief valuer's figures, who had been told to readvertise but who 132 had accepted offers of one tenth of the real valuation. Yet, he had the nerve to describe my amateur and personal, but remarkably accurate, valuation as a scandal.
The report makes it clear that the property was inadequately advertised and, more seriously, that it was never readvertised. It says: This appears to have been a more limited and more passive effort that the Chief Valuer would have expected from an experienced estate agency. It goes on: We find it most surprising that … the Scottish Education Department once again rejected the Chief Valuer's advice to use estate agents in conjunction with the District Valuer to apply a much greater marketing effort. If that were not enough, here comes the crunch: They decided to sell at a bottom of the market price. Those were not my words, but the solemn and unanimous verdict of an all-party Committee of the House of Commons. How can such criticisms be brushed aside?

§ Mrs. McCurley
Does the fact that a prospectus was prepared and distributed to 40 interested parties, and that 15 of those parties were genuinely interested in taking up the offer, not suggest that those who prepared the prospectus knew precisely what they were doing professionally?

§ Mr. Robertson
The Scottish Office briefing may have convinced the hon. Lady, but it did not persuade the Comptroller and Auditor General, nor the members of the Public Accounts Committee, on which there is a majority of Conservatives. I must keep repeating that I am using as the main plank of my argument the PAC report.

Several Hon. Members
ose——

§ Mr. Robertson
It looks as though we have the Scottish Office choir on the Conservative Benches tonight. If it were not for the presence of the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley), I would call them the Scottish Office male voice choir, but they sing not at all in harmony.
After 24 devastating paragraphs, the report's conclusion leaves no room for doubt. It says: We consider that in taking this approach, SED failed to ensure that everything possible was done, particularly through determined exploration of possibilities for alternative use of development, to market the property adequately.

Several Hon. Members
rose——

§ Mr. Robertson
I repeat, to pacify Conservative Members, that they are not my words or the words of the Labour Opposition, but the words of the Public Accounts Committee in a unanimous report. In the light of that report, if the Under-Secretary of State for Trade and Industry continues to hold ministerial office, after such a verdict on his stewardship, what will be left in question will be not just his reputation, or what little is left of it, but the integrity of ministerial office itself.
If he stays in post, the principle of ministerial responsibility will have been replaced by the new principle of passing the buck and shifting the blame. Nobody subject to the criticism contained in this report could remain in any other job outside this House. It will debase the idea of honour and decency in political life of he allows himself, or is allowed, to continue holding a position of public trust. The questioning must not stop yet. Some aspects of this sorry episode still remain to be cleared up.
One of the beneficiaries of the Government's largesse with the public purse was Miller Homes Northern Ltd., 133 which purchased the residences at the college and a sizeable slice of the land. The firm paid £410,000 for the 600-room complex. The terms of purchase were outstandingly generous even by the standard of this bungled affair.

§ Mr. Hirst
I direct the hon. Gentleman to paragraph 380 of the report, in which Mr. Gilchrist, the chief valuer, was constrained to admit that if lots of builders looked at them, … Miller … has possibly paid a fair market price. Will the hon. Gentleman justify the contention that he is advancing that Miller had the flats at give-away price?

§ Mr. Robertson
Paragraph 380 states: if lots of builders looked at them and rejected them and Miller was the only builder who felt he could do something, he has possibly paid a fair market price.

§ Mr. Hirst
Read on.

§ Mr. Robertson
The words "if" and "possibly" appear in that reply. I rely on the verdict that is set out in the report of the Committee of Public Accounts. The Committee considered all the evidence, and its unanimous report is the basis of my case.
No attempt was made to readvertise the residences when it was clear that they were an entirely different proposition from the college itself. Even an uninformed guess would have been based on them being an eminently more marketable proposition than the college. However, the Miller offer, even though it was not the largest, was accepted by the Government.

§ Mr. Albert McQuarrie (Banff and Buchan)
Yes, on conditions.

§ Mr. Robertson
In addition, Miller was not required to pay up until detailed planning permission had been obtained, despite the fact that the largest offer for the entire complex had been rejected precisely because of a precondition that planning permission be obtained. Miller was to have a risk-free period of up to one year with security and maintenance paid by the Government. There was a budget of £180,000 for a property that was sold for £410,000. That goes beyond generosity and becomes suspicious. The cost turned out to be £106,000 and that year, during which Miller had the option to pull out altogether from the deal, the net return to the taxpayer was only £304,000. But now we know that Miller will make a profit, even on its own figures, of probably over £2 million, although it could well be in excess of £3.5 million —[Interruption.]

§ Mr. Deputy Speaker
Order. We have a three-hour debate and hon. Members will have the chance to catch my eye and to advance their arguments in debate. I hope that they will restrain themselves until they are called to contribute to the debate.

§ Mr. McQuarrie
On a point of order, Mr. Deputy Speaker. I respect your ruling, Mr. Deputy Speaker, but is it right that the hon. Member for Hamilton (Mr. Robertson) should give the House fictitious figures which are not based on proof? The hon. Gentleman is making a statement——

§ Mr. Deputy Speaker
Order. It is not unusual in this place for hon. Members to quote figures which are challenged by other hon. Members. If the hon. Gentleman 134 thinks that certain figures should be challenged, I hope that he will seek to challenge them in debate and not by means of spurious and bogus points of order.

§ Mr. Robertson
I am grateful to you, Mr. Deputy Speaker. A more spurious point of order could not have been invented. The figures that are available have been examined at considerable length by the Public Accounts Committee. They are based on figures that were supplied by Miller. I repeat that Miller will make a profit, even on its own figures, of well over £2 million. The profit could well be in excess of £3.5 million. This will represent as much profit to Miller as it has made in total over the past three years of trading. Miller has made a profit of less than the likely outturn of the Hamilton college deal over the past three years and we have the right to ask questions of the Government about the transparent generosity of the deal for the residences and the windfall of the speculators, and how it is that Miller is the beneficiary of this surprising and lavish treatment.
I wish to deal with what happens next. We now know that the procedures will be changed in the light of the harsh criticisms of the CPA's report. So they should. What is most worrying is what remains on the record — the astonishing remarks of the Minister, following the publication of the report, and the similarly astonishing remarks of the secretary of the Scottish Education Department, in paragraph 415 of the CPA report: with hindsight I do not think that we would have acted any differently than we have done". That strikes an incredible comparison with what her Majesty's Treasury said today, in language that must be remarkable for Treasury draftsmen: There are lessons to be learned from the sale of Hamilton college". They talk of "regrets" and of accepting that before reaching the decisions to approve the sale they should have explored more thoroughly … It says that the Department should have attempted to reconcile the views of the governing body and the advice of the Chief Valuer", although only a few months ago the secretary of the Scottish Education Department told us that with hindsight I do not think that we would have acted any differently than we have done". The Treasury minute says that there are lessons to be learnt. We hope that those lessons have been learnt, and that those who have not learnt are not left in positions of trust.
Tonight's debate has provided an appropriate occasion to highlight the betrayal of the public interest that this case represents. It also provided an opportunity for those responsible for that betrayal to be called to account. Over the years, it has been an honourable tradition that Ministers, with whom the buck stops, accept responsibility for the mistakes of their Departments. Many have taken that honourable route. Lord Carrington and his team at the Foreign Office are the most recent to have chosen to do the right thing. One has to be big enough to shoulder responsibility. A Minister has to have enough dignity and courage to say, "I was to blame and I accept the responsibility." It is necessary to have guts to accept the full obligations of public office. Not everyone has those qualities, and many lesser men will choose to brazen it out, shift the blame and pass the buck, ignorant of the effect that that will have on public confidence in Government as a whole. The mediocre will rarely accept blame, and will prefer to see the charges drift into the obscurity of time. 135 It remains to be seen whether the Ministers on whose head the blame for this sad fiasco lies will take the route of honour or the route of unprincipled expediency.
However, it is the Prime Minister who must ultimately decide whether she can retain Ministers whose judgment is proven to be so flawed and whose view of rules and expert advice is so cavalier. It is she who will have to decide whether the Secretary of State for Scotland, whose rubber stamp endorsed each stage of this saga, is to go scot-free and without stain on his character. It is for her to decide whether the hon. Member for Edinburgh, Central, if he continues to scuttle from the blame, is to remain as a Minister for a crucial area of business policy, where cool judgment and careful attention to detail—the very qualities manifestly absent in this case — are essential.
I put it to the Prime Minister, as the custodian of the reputation of the Government as a whole, that this scandal has perceptibly weakened confidence in the essential competence and ability of her representatives at the Scottish Office. By the judgment, not of the Opposition, not of the people of Lanarkshire, not just of the whole Scottish press and the bulk of the public, but of a unanimous investigation of an all-party Committee of this House, with a Conservative majority, one of her Government Departments, and the Ministers who are responsible for it, have been guilty of a reckless neglect of the public interest. It is up to the Prime Minister to ensure that those proven to be unfit to hold high office depart from it, and depart from it soon.

§ Sir Hector Monro (Dumfries)
If that was a full-blown attack on the Government it must have been one of the most pathetic that any hon. Member has ever heard. Even by the use of every adjective in the dictionary, the hon. Member for Hamilton (Mr. Robertson) failed to dent the reputation of my hon. Friend the Under-Secretary of State for Trade and Industry one little bit. I cannot but feel that the hon. Gentleman's attack was based on prejudice. The fact that Hamilton college is now a private school and private housing development must be anathema to him. His attack has fallen flat. It must be sad to him that he has only been supported by two of his Back-Bench hon. Friends who represent Scotland. If it were such a contentious issue for Scotland, I should have thought that at least 40 of his hon. Friends would have supported him on the Labour Benches tonight, perhaps stirred up by the tremendously flat impact of their conference at the weekend.

§ Mr. Dennis Canavan (Falkirk, West)
Will the hon. Gentleman confirm that the Scottish Office put out a three-line whip on the Scottish parliamentary Tory group?

§ Sir Hector Monro
The hon. Gentleman must be terribly disappointed in his party. It is no use him trying to suggest that we are here for any reason other than pure voluntary enthusiasm to put the case right.
It was rather significant that the hon. Member for Hamilton never bothered to quote the first sentence of the first conclusion in paragraph 25, which said that there can be no certainty what price would have been obtained for Hamilton college if other ideas had been fulfilled. That is crucial. He tends to forget that any object for sale is only 136 worth what the market will pay on the day of the sale. It is no use him quoting what the buildings cost to build or what they may cost to replace. It is what they were worth in the market at the time of sale that is important.

§ Mr. John Maxton (Glasgow, Cathcart)
rose——

§ Sir Hector Monro
I really made a decision on 1 January that I would not give way to the hon. Gentleman and I shall reaffirm that on April Fool's day in order to save him from further embarrassment. However, as a special concession, I shall do so tonight.

§ Mr. Maxton
The hon. Gentleman has given a remarkable introduction. As an ex-Minister with responsibility for sport, would he care to put a value on a swimming pool, a sports hall and two gymnasia?

§ Sir Hector Monro
The value would be what anybody would pay for them. It is no use the hon. Gentleman saying that something is worth £3 million or £4 million if no one will give that money. It is the value on the open market that is the relevance of the whole issue.
Hon. Members have failed to take account of the fact that the two higher offers that were put in both required planning permission and building consent. To obtain any one of those would have taken a considerable time.
The hon. Member for Hamilton does not seem to have read the report. That says that it would take £325,000 a year for the care and maintenance while the buildings were lying empty and unsold. That has to be taken into account when considering the Government's actions to obtain a quick sale.

§ Mr. Donald Dewar (Glasgow, Garscadden)
I may be being a little unfair and the hon. Gentleman may be about to develop the point, but I want to be clear on his attitude. Is the hon. Gentleman saying that he does not accept the criticisms of the PAC report, that he does not think that they were valid, and that he does not accept the implied criticisms in the Treasury note issued today? When he says that no dent has been made on the Minister's reputation, is he saying that the sale was handled properly and that the chief valuer for Scotland's advice was properly disregarded?

§ Sir Hector Monro
I am developing my speech, and the hon. Member for Glasgow, Garscadden (Mr. Dewar) and my hon. Friends will be able to make speeches on this point. The issue, as I have said, is the market value of the property on the day of sale. Other aspects of a sale negotiation may be hypothetical, and whether it should have been put out to estate agents, as opposed to the customary solicitor-type of sale in Scotland, may be a valid point of the hon. Member for Garscadden. However, whether that would have produced a higher sale value is open to doubt, with reference to paragraph 25 of the conclusion of the report. The hon. Gentleman seems to read only what he wants to read in the report. The issue is one of the market value.
The only issue relative to the report about which I think there is some valid criticism concerns whether the Scottish Education Department should have considered going to estate agents rather than to solicitors. That having been said, with reference to paragraph 25, would an estate agent have obtained more than the 40 inquiries that the solicitor achieved? In the case of a specialised property such as this, in an area such as Hamilton, would there have been a great rush of applicants to buy, if other methods had been used? 137 There is no indication in the report that that would have been so. Indeed, paragraph 25 confirms that there is no justification for thinking that there would have been a flock of willing buyers who would have come rushing forward, had they had greater knowledge of the possibility of the sale.

§ Mr. Dewar
rose——

§ Sir Hector Monro
I shall not give way to the hon. Member for Garscadden, because I have every expectation that he will speak at length before the end of the debate.

§ Mr. Gerald Malone (Aberdeen, South)
Would my hon. Friend care to comment on the practice whereby most people interested in buying specialised property of this kind would in any event register their interest with a firm of estate agents which would see an advertisement of the type that appeared in connection with this college, and would advise its clients with an interest accordingly to make an offer?

§ Sir Hector Monro
What my hon. Friend says, with his legal knowledge, is very likely to be true.
The hon. Member for Cathcart asked me earlier for the valuation of the swimming pool, but he did not inquire in the question whether I was aware of the cost to a likely purchaser of running a swimming pool. One has to bear in mind the important issue that that type of specialised equipment is not valuable, unless resources are available from the ratepayer or the rate support grant to run such a facility of specialised construction. The key issue that hon. Gentlemen seem not to appreciate is that, even if the Opposition aver that the building was worth £3 million, £4 million or £5 million, there is no indication that anyone would have come forward to pay that sort of money for this type of property.

§ Mr. D. N. Campbell-Savours (Workington)
rose—

§ Sir Hector Monro
The important point to remember is that, with the sale made in the circumstances that it was made, very expensive annual upkeep costs would have been incurred while the sale was being considered over a period of time.
At the end of the day, Labour Members may say that the Hamilton area now has a valuable school to add to its other advantages and many more houses available, which also is a worthy objective. It is unfair to criticise my hon. Friend the Member for Edinburgh, Central (Mr. Fletcher) who took the best advice he had and who moved forward with the sale as quickly as possible.

§ Mr. John Maxton (Glasgow,Cathcart)
I have two involvements with this report—

§ Mr. McQuarrie
Are we now to hear from Glasgow academy?

§ Mr. Maxton
The hon. Member is seeking to finish off the pairing system.
First, I am a member the PAC, and one of those who questioned the senior officials from the Scottish Education Department and the office of the Chief Valuation Officer for Scotland. Let us remember that the figure of £6 million is the valuation that the Chief Valuation Officer for Scotland put on that property—

§ Mr. McQuarrie
Where is that?

§ Mr. Maxton
—as the price that he would expect to get —I am seeking to be reasonable—"in favourable circs". Those are his exact words in the report.
Secondly, I used to be employed in that college as a lecturer. Some hon. Members may feel that that makes me slightly prejudiced.

§ Mr. Henderson
I have seen no evidence that the Select Committee interrogated the people handling the sale on behalf of the governors, or the governors themselves. Why did not the Committee take that course?

§ Mr. Maxton
Since the hon. Member was in the House before and returned to it at the same time as I did, he should have a better idea of how the PAC operates. It questions the senior officer of the Department involved—the accounting officer. It does not normally call in anyone else, which would mean a considerably longer investigation than this one was. Very rarely would it question someone such as the principal of the college, the chairman of the board of governors or the people on the working party which arranged the sale. That is the normal operation of the Committee. This report is a powerful report; I agree that it is not worded as some reports are worded.
I may be slightly prejudiced, but I am the member of the PAC — even my hon. Friend the Member for Hamilton (Mr. Robertson) will accept this—who knows those buildings intimately, who knows what was involved in the sale and what was being given away by the SED and the Minister. The college has a swimming pool, a games bar, two gymnasia and a magnificent hall with almost the facilities of a small theatre. There are many teaching rooms, plus science laboratories. There is a whole arts floor. One room was at one time equipped as a television studio. And that is only the main building: it does not include the halls of residence or the flats. It does not include the playing fields, the refectory or the kitchens.
The Government gave away this enormous building, with all its magnificent facilities, for half the cost of building a nine-classroom primary school, with normal facilities, in Northern Ireland. That is what a private school was permitted to pay for the building.

§ Mrs. McCurley
Is the hon. Gentleman trying to claim sufficient expertise to be able to assess not only the value of the college but also its condition? Such considerations can apply to all sorts of buildings that are surplus to requirements. Can he assess the value of the swimming pool, for instance, in the light of depreciation and all the other factors to be taken into account in the refurbishment and rehabilitation of such a building?

§ Mr. Maxton
Of course I would not claim to be an expert in valuation, but the swimming pool was closed for about eight months for total refurbishment just before I was elected in May 1979. I could no longer swim every day, so I took up jogging in order to maintain my exercise. Of course one must take account of depreciation, but by that time it was an almost completely new swimming pool. It had been refurbished from top to bottom, and its value had been increased even more.
Those facilities were sold off, as I say, for half the price of building a primary school with nine classrooms in Northern Ireland.

§ The Under-Secretary of State for Scotland (Mr. Allan Stewart)
Will the hon. Gentleman explain why the education authority made no offer for the premises?

§ Mr. Maxton
Certainly. I was going to deal with that point later, but I shall do so now if the Minister is determined that I should.
Strathclyde education committee, Hamilton district council and practically every other relevant body in Scotland, including the Minister himself, had opposed the closure of that college and taking it out of the public sector—[Interruption.] The Minister should let me continue. Strathclyde region council hoped that, by refusing to make an offer, it could force the SED to use it for educational purposes.

§ Mr. Hirst
That is not in the report.

§ Mr. Maxton
This debate is not just about the report; it is on the disposal of Hamilton college.
I want to deal with the broader issues as well.

§ Mr. Campbell-Savours
Is not the cavalier way in which Tory Members are approaching this matter an affront to the seven Tory members of the PAC, who supported the Committee's recommendations and who provided some of the most vociferous questioning during our investigations? It was they who said how strongly they felt about the way in which this matter had been handled. How many Conservative Members have asked their colleagues what happened during the Committee's proceedings? If they had done so, they would not be sitting so arrogantly in the Chamber.

§ Mr. Maxton
I am grateful to my hon. Friend for that intervention. He is correct. This is a unanimous report, and Conservative Members fully supported it. The hon. Member for Edinburgh, Central (Mr. Fletcher), the Under-Secretary of State for Trade and Industry, tried to squirm away from that fact by saying, "They are English Members and do not understand what goes on in Scotland." I was a member of that Committee, and I assure Conservative Members that their colleagues took a careful interest in this matter. They studied it carefully, and knew what was happening.

§ Mr. Bill Walker (Tayside, North)
The hon. Gentleman is always reminding the House of the differences between Scotland and England. Will he comment on the fact that recently in Perth a massive complex has been built for the General Accident Fire and Life Insurance Corporation Ltd.? The corporation makes no secret of the fact that the complex cost about £30 million. If that property were sold, it would fetch about £10 million, because no one else in Scotland would want a complex of that size. That corporation wants to be in Scotland, but it has no market. It should get a tax reduction.

§ Mr. Maxton
That makes the point. The Chief Valuation Officer for Scotland said that it would cost £20 million to build Hamilton college now. He was saying, "If we can get £6 million for it, we are doing quite well". That is similiar to the position of the complex built by the General Accident Insurance Fire and Life Corporation. I do not know why Conservatives are continuing in that way. Hamilton college was sold for £600,000, but that does not seem to worry Conservative Members. It is difficult to find terms that are sufficiently harsh to describe them. They have been whipped into the Chamber. They are obliged to protect a Conservative Member from the 140 attacks by a Committee on which there was a majority of Conservative Members who understand better than the Conservative Members in the Chamber what is involved.
Conservative Members are interested in cash terms, market value and what can be obtained from sales. I am interested in the facilities' value to the community, which my hon. Friend the Member for Hamilton represents, and in which I live. The sporting and other facilities in Hamilton college could have been used by the local authority. Conservative Members might say that none of them made a bid. It is true that neither Strathclyde region nor Hamilton district council made a bid in the initial stages. They had a fair idea that the valuation put on the facilities was £6 million. When the Government knew that the bid was £600,000 and the chief valuer was saying "re-advertise", the Government made not one approach—this is in the report, and no one can deny it — to Strathclyde region or Hamilton district council about their views on the sale. They were not asked whether they were interested in purchasing at that price. The local authorities had assumed, especially because of the cash limits imposed on them, that the price might be in millions of pounds, not hundreds of thousands of pounds. They rightly assumed that.

§ Mr. Hirst
Why?

§ Mr. Maxton
Because they had their own experts, architects and staff, and they know the values of buildings and how much it would cost to build a secondary school. Strathclyde regional council is well aware of how much it will cost to build a secondary school in Hamilton because it is going to build one less than a quarter of a mile away from the college. It knew the value of buildings. It may not be £6 million, but it is a great deal more than £600,000. Strathclyde regional council expected to pay a great deal more.
The Government did not make one attempt to return to the Jordanhill board of governors — I blame the Government, not the board of governors because they have no power—or to the local authority to say, "This is the bid that we are thinking of accepting at present. Are you interested in it at that price?"
I shall name another organisation which might have been equally interested at that price—the National and Local Government Officers Association. For the past 10 years it has used the college during the summer for courses to train its officers. One would have thought that under those circumstances the Government or the seller would have approached it directly and said, "You are a regular user. Are you interested in this?"

§ Mr. Hirst
rose——

§ Mr. Maxton
The hon. Member for Tayside, North (Mr. Walker) is grinning, but I can assure him that when NALGO's officers saw the advertisement they did not bother to apply for the brochure because they assumed the price would be in millions.

§ Mr. Bill Walker
They were wrong.

§ Mr. Maxton
Perhaps they were wrong.

§ Mr. Hirst
I am grateful to the hon. Member for giving way. If NALGO had been responsible for putting in a bid for £750,000, which was in excess of what Christian schools and Miller homes offered, would he have approved or condemned it as throwing away money?

§ Mr. Maxton
If a higher offer had been put in I would have expected it to have been accepted by the Government. They should have made more effort to sell the college. They made no effort, and did not even take the highest offer when it was available. It is in this report and the Treasury minute that they did not take the highest offer. Hon. Members say that it was because of the conditions. Miller homes put down conditions and the Government accepted the bid. I will come to that matter. There was a sale and the Government did not make the effort to approach an organisation which had used the building for 10 years and say to it, "Are you interested?"
NALGO has said that if it had known what price the building would go for, it would have approached other trade unions to consider whether they could put in a bid and use it for some form of training college for the trade union movement in Scotland. NALGO told me that, and it told the PAC by means of a letter to the Comptroller and Auditor General, of which I have seen a copy.
There is a case to answer. There is the problem of the advertisements and much has been made of the number of brochures taken up. It is not the Opposition, or the PAC which Conservative Members seem to think is biased against their hon. Friend the Under-Secretary of State for Trade and Industry, but the Halliday committee as a result of a sale that took place under a Labour Government—I do not deny that—laid down certain rules. It was set up in Scotland to make recommendations about Scottish sales, not sales in England, and it recommended that consultations should take place with the local planning authority to discover what was available. That was done perfuntorily and was not repeated and continued in this case. Second, it was recommended that the sale should be put in the hands of an estate agent and not left in the hands of other selling bodies. I accept that solicitors sell properties in Scotland. [Interruption.] The sale was advertised not just in Scotland, but in England and Wales. The Chief Valuation Officer for Scotland and the Halliday report both said that the sale should be in the hands of an estate agent qualified to deal with such problems.

§ Mrs. McCurley
indicated dissent——

§ Mr. Maxton
The hon. Lady is shaking her head again, but is she saying that the Halliday report, the Chief Valuer, the Comptroller and Auditor General and the PAC are all wrong?

§ Mr. McQuarrie
I shall take up just one point, as I hope to speak later, when I shall raise others. I draw the hon. Gentleman's attention to page 7 of the PAC's report, at paragraph 313. Mr. Mitchell was questioned on the Halliday report, and he made it clear that the report was based purely on Crown property. At that time that college did not belong to the Crown but was owned by the Jordanhill governors, who had total responsibility, given to them by the Secretary of State for Scotland, for selling the property. Therefore, the Halliday report was not relevant to that sale.

§ Mr. Maxton
I do not know how far the hon. Gentleman has gone in his research, but if he read paragraph 2 of the Treasury minute, approved by the Scottish Office, he would see that it states that The department accepts that, although Professor Halliday's report dealt solely with the disposal of National Health Service property, its recommendations should in principle apply to the 142 disposal of other Crown property and of the property of public bodies where the proceeds of sale are to go to or otherwise relieve the Exchequer. That is clear. That is what should have happened. The Halliday report laid it down——

§ Mr. McQuarrie
It said "should".

§ Mr. Maxton
Conservative Members are grasping at straws.

§ Mr. McQuarrie
The hon. Gentleman is the one who is grasping at straws.

§ Mr. Maxton
Conservative Members are now quibbling over words such as "should", but the fact is that the Halliday report laid it down that estate agents should be used, even if we accept the point that the sale might have been in the hands of solicitors. Did they handle the sale as efficiently as they might? Again, the answer is no. The advertisements were put into a limited number of newspapers at a bad time of the year. The one that was placed in The Times in the new year was not even put in on the day when commercial property is normally advertised in The Times. It is astonishing that the opportunity was not taken to use the proper day to advertise such property. The advertisement was tucked away. I do not know whether Conservative Members have bothered to look at The Times to see what the advertisement was like. Most people who are looking for specialised property would not look through those advertisements on that day. When people are looking for a job, they look at the Glasgow Herald or The Scotsman on one day. If they are looking for a house, they look on another day. They do not bother to look at the advertisements on other days. That is the way in which the newspapers operate.
Those concerned did not advertise in The Times on the proper day or take advantage of the discounts available—perhaps a minor point—by advertising in The Sunday Times as well as The Times. Much more important they did not advertise in the professional commercial press. The advertisement was not in the Estates Times, which is an important avenue of advertising for those who wish to sell commercial properties. No Conservative Member in his right mind would try to sell such a property without advertising in the commercial press.
Therefore, even if we accept that the solicitors could have done the job, they did it extremely badly. Moreover, having gone back to the chief valuer for advice, they did not simply ignore it. They did worse than that. The instruction to sell was given before the advice was received. What greater insult is there to a fellow civil servant than telling him about the offers and asking his advice on how to proceed and then selling the property before receiving his advice? Conservative Members are very quiet now, because they cannot deny those facts. The entire sale was bungled from start to finish. It is a disgraceful episode. One must now ask why.
The Public Accounts Committee interviews only the Accounting Officer and his assistants. It does not call Ministers. I hope that the Select Committee on Scottish Affairs, of which a number of Conservative Members here today are members, will now investigate the ministerial involvement in this and try to find the truth.
The report leaves us with the feeling that this was a bungling mistake by the Scottish Office which, with the board of Jordanhill governors, managed to mess the whole 143 thing up and obtain such a ridiculously low price. I believe that that is grossly unfair to the civil servants. I believe that those who came before the Public Accounts Committee had an extremely difficult job to do — defending the indefensible without involving their political masters. I do not believe that that was their responsibility — constitutionally it is certainly not their responsibility—because I do not believe that they took the decisions.
I believe that the decisions were taken by the Ministers involved. I cannot believe that after 18 months of incredible controversy, during which virtually every organisation in Scotland and even some Conservative Members, condemned the Government for the closure of the college and the way in which it was done, the Minister told his civil servants that he wanted nothing more to do with the matter and that they should get on and handle the sale so that his hands would be clean. I believe that he told them — before Conservative Members start jumping about, I should say that this, of course, is not in the report —that so long as the building stood empty it was an embarrassment and that they should get shot of it as rapidly as possible.

§ Mrs. McCurley
Will the hon. Gentleman finally tell me where the bloke was, with £6 million in his wallet, who was to buy the college?

§ Mr. Maxton
I cannot answer that question. If the Scottish Education Department had made more effort, I might have been able to answer it. I am not a professional seller of commercial properties. I do not know where the market is. I believe that the Scottish Education Department did not make the effort which was needed and which the CPA expected it to make.
I believe that the Minister said, "Get shot of that building as fast as possible." He knew that the longer it stood empty—an eyesore in the middle of Hamilton—the more strongly people would be reminded about the closure and the fact that the building could still be being used for education in some form or other.
I know that Government Members will make strange noises when I say this, but the offer for the building to be opened as a private school was a good solution from the Minister's point of view. He could not only get rid of an embarrassing building but, by keeping it in educational use, he could embarrass my hon. Friend the Member for Hamilton" the Labour party and me. That is what the Minister hoped would happen. I am sure that in 30 years' time, when—in our secretive society—the records are finally opened, it will appear that that was how it was. The Minister told his civil servants to cause the maximum amount of embarrassment. He did not give a damn what the price was. He decided to get rid of the main building to the private school and of the residences to whomever could make the largest profit out of them. It was a shady deal done by a shady Minister. The sooner he is removed from the Government, the better it will be for them. While he remains in the Government, the credibility and morale of the Government in Scotland — which are at a remarkably low ebb—will continue to worsen.

§ Mrs. Anna McCurley (Renfrew, West and Inverclyde)
Looking at the Opposition Benches tonight, I can count on one hand the number of hon. Members 144 there. Yet I believe that at least 17 hon. Members signed the motion. Where are the hon. Members who forced us to hold this debate?

§ Mr. Maxton
On a point of order, Mr. Deputy Speaker. The number of hon. Members who signed a particular motion is not public knowledge. I wonder whether the hon. Lady would care to tell you where she obtained that information.

§ Mr. Deputy Speaker
Order. I am not aware of how many hon. Members put their names to motions, and I am not sure that that is a point of order for me.

§ Mr. George Robertson
Further to that point of order, Mr. Deputy Speaker. The hon. Lady is making a direct claim that 17 hon. Members submitted an application for the present debate. That information is held only by Mr. Speaker. Surely it is not in order for the hon. Lady to make such allegations?

§ Mr. Deputy Speaker
Order. If that number of applications had been made, that information is in the possession of Mr. Speaker. I do not know how many hon. Members signed the motion, and — to the best of my knowledge — nor does any other hon. Member. However, it is not unusual for hon. Members to make questionable assertions.

§ Mrs. McCurley
We have been allowed a three-hour debate on this subject, so I assume that a large number of hon. Members must have applied for the debate.
It was no surprise to me to find that this subject was to be debated tonight, because I expect that the publication today of the Treasury minute on the ninth report of the PAC comes as a welcome surprise to the Opposition.
I have been aware of the vulture-like activity in the corridors of the House for weeks. The Opposition have been poised over this morsel of carrion ready to tear it apart, and we are hearing the cries tonight. It is notable that, like vultures, they often cry the loudest when there is little meat. I welcome the minute. It reflects the anxieties that we all share about the disposal of public assets. All care must be taken to ensure a just and fair deal by appropriate methods. Nobody is more anxious than me to see that that happens. With the exception of the phrase that the Department should have been responsible for reconciling the views of the governing body and the advice of chief valuer, the minute virtually exonerates the Scottish Office, contrary to the protestations of Opposition Members.
What were the opposing views that were not reconciled? The first was that in Scotland, in a quite normal practice, a firm of solicitors was invited to sell the property. It is a firm of solicitors, the stature of which is not in dispute. Indeed, it was responsible for training the Shadow Secretary of State for Scotland. I am sure that the firm remembers him well. It is frequently involved in the disposal and sale of property and is retained by the largest college of education in Scotland. It produced a detailed prospectus that conforms to the suggestions in the Halliday report. It is suggested in paragraph 86 that an estate agent should have been engaged. That suggests an attack on the status and competence of this long established firm.

§ Mr. Dewar
Like the case of the hon. Member for Dumfries (Sir H. Monro), I understand that the hon. Lady's case is really that there was nothing wrong in the 145 Halliday committee's recommendations being overlooked. Why does she think that the Government, in the Treasury minute, say that they will take steps to ensure that the recommendations of the Halliday committee are appropriately applied in future"? Is she saying that she disagrees with that?

§ Mrs. McCurley
No. If the hon. Gentleman looks at the evidence given to the Public Accounts Committee and what the Committee says, the difference between what is said in the report and what is said in the minute is substantial and exonerates the Scottish Office.
The other half of the equation was that the chief valuer hinted that a value of £6 million could be put on the college in the best possible circumstances for the seller—in other words, the top end of a buoyant market. As I have attempted to confirm with people in the estate agency business, the market at the time was depressed, not at all buoyant. Such highly specialised property was not in great demand. As my hon. Friend the Member for Aberdeen, South (Mr. Malone) said, if someone was in the market for such a property, he would not have been scanning the newspapers, he would have had his name on an estate agent's books. The property was not in great demand. Despite the fact that 40 prospectuses were issued, only 15 inquiries were made, and many weeks passed.
I agree with the hon. Member for Hamilton (Mr. Robertson) that the purchasers got a bargain. However, the condition of the property must be borne in mind. The hon. Member for Glasgow, Cathcart (Mr. Maxton) does not seem to understand that. There were also problems associated with refurbishing the buildings. Taking into account the state of the market and maintenance costs of £325,000 per year, is it surprising that acceptance of the bid was on the cards?
As my hon. Friend the Member for Dumfries (Sir H. Monro) said, an object is valued only at the price that someone will pay for it. 'The fact that the experience of keeping property under care and maintenance is a nightmare cannot be lost on people. One example is Killearn hospital, which costs thousands of pounds each year to maintain. Nothing has been done about it, but I hope that something is done shortly.
The result is that 300 children have been removed from the state education budget since the Christian schools took over Hamilton college—that is one of the best uses that I can think of for it. My right hon. and noble Friend Lord Gray of Contin said in another place that he had no evidence to suggest that a better price would have been obtained had different procedures been followed. It is hypothetical to suggest that an estate agent would have obtained a better price than did the solicitor involved.

§ Mr. George Robertson
As to the care and maintenance of the property, the Government agreed to maintain and secure the residences for up to one year, and they made provision in the budget for £180,000 to do that. Would it not have been more sensible, given that the chief valuation officer for Scotland had recommended re-advertisement, to use that year for re-advertising instead of throwing that money down the drain by allowing Miller Homes to retain its hold on the property, while the state paid for the care and maintenance of the residences?

§ Mrs. McCurley
Is it not the case, however, that there had been several offers for the college but that the 146 conditions under which the college could be sold were impossible to fulfil? There were many problems with planning permission that prevented the sale.
The most severe fault in the report was that the Treasury was not offered the advice of the chief valuer, because there might have been a reconsideration of the sale. This is one issue on which I agree, and agreed in the past, with the hon. Member for Hamilton. However, we might not have been considering Hamilton college tonight; it might have been Craigie college or Falkirk college. The Opposition should not over-emphasise their distress in the circumstances, since their peccadillos are being aired tonight. Robroyston hospital was the scandal of its day; it was valued at £770,000, sold for £410,000 and shortly afterwards a small portion of the property was resold for £2 million.
No one has discussed the role of the chief valuer, who has sounded so far to be in a deified position. I have looked at some of the chief valuer's comments in the Halliday report, and in paragraph 78 it would appear that he was in an anomalous position on Robroyston, and in some ways was not above making mistakes. I would not bank on everything that he says. Although Hamilton college and Robroyston cannot be considered on a similar basis, the principles are the same. The general tenor would appear to be that the sales observed the terms and conditions of the Halliday report. It is beholden on all hon. Members to urge that in future, the disposal of all public property is done with due care and consideration. However, some of the outrageous comments being made by Opposition Members about the sale of Hamilton college, and the inaccuracies that they have bandied about, must be challenged and put on the line.

§ Mr. Dennis Canavan (Falkirk, West)
This is not the first time that the competence of the Under-Secretary of State for Trade and Industry, the hon. Member for Edinburgh, Central (Mr. Fletcher), to hold ministerial office has been challenged in the House, or the first time that he has been accused of incompetence or other imperfections — to say the least — in dealing with Scottish colleges of education. I remember a meeting that I and my hon. Friend the Member for Falkirk, East (Mr. Ewing) had with the hon. Gentleman when he was in charge of education at the Scottish Office. At that meeting there were present representatives of the Callendar park college of education, and senior civil servants at the Scottish Education Department. We received a commitment, afterwards confirmed in writing, that there would be no change in the structure of the Scottish college education system, at least until a consultative document was published.
That was one of the many commitments given by that Minister which he later broke. There was no consulative document, and as we know, the college of education system in Scotland was butchered, including the closure of Callendar park college of education. That building is in my constituency as a result of the boundary changes and now we have this public scandal about the sale of Hamilton college.
As my hon. Friends have said, the Public Accounts Committee has issued a report. I understand that at the press conference when the report was presented by the Chairman, although he is not a man who uses extravagent words, he said that this was probably the strongest, most 147 critical report that the PAC had ever produced in its history. It has a long history of service to the House. I am only sorry that Conservative Members do not seem to appreciate that there is a Conservative majority on the Committee and that the report is unanimous. When they criticise the findings of the PAC, they are criticising members of the Conservative parliamentary party.
The Committee was told that the chief valuer for Scotland thought that the sale might realise £3 million for the college block, and £3 million for the halls of residence. The Scottish Education Department apparently rejected the advice of the chief valuer and of the Government solicitor and ignored the recommendation of the Halliday report. As the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley) said, the Halliday report was about hospital buildings, following the Robroyston scandal.
It was hoped by many hon. Members that, following the publication of that report, greater care would be taken over the disposal of public assets, whether they were owned directly by the Government, or indirectly through the governors of the colleges of education, or whatever. In any case, such properties are public property, for which the Secretary of State has a responsibility, and if he is determined to sell off public property, in whatever circumstances, he should do his best to realise the maximum value and to see that there is benefit to the public purse.
In view of the sale for £680,000, it is possible—we can never be certain—that because of the negligence and incompetence of people at the Scottish Office, more than £5 million was lost to the public purse. That is a serious charge against a Government who claim to have great control over public spending and who want to ensure that taxpayers' money is well spent. They are always groaning and moaning about too much public expenditure, but they lost an opportunity here to add to the public purse. They were guilty either of gross incompetence or of deliberate public asset-stripping, especially as those who benefited from the deal were a private school on the one hand and a private housing developer, Miller Homes, on the other, and I understand that Miller Homes could make £2 million or more out of it. Who was responsible? There seems to have been gross incompetence at a senior level at the Scottish Office.
The head of the Scottish Education Department gave evidence to the Public Accounts Committee and, as I listened to it, I could hardly believe my ears. The hon. Member for Caithness and Sutherland (Mr. Maclennan) asked: May I revert to the question of the Halliday provisions. Do you think, with the benefit of hindsight, that your interpretation of these rules and their applicability was in this case perhaps too constricted and that it would have been better to have abided by the Halliday Committee procedures? Mr. Mitchell replied: No, with hindsight I do not think that we would have acted any differently than we have done. That was an astonishing reply, for Mr. Mitchell was saying that, given the same set of circumstances, the SED would behave in exactly the same way.

§ Mr. Dewar
I appreciate the importance of the point that my hon. Friend is making. Will he, in fairness, accept that the Treasury obviously also thought that Mr. 148 Mitchell's statement was unbelievable, because the Treasury minute has made it clear that it will ensure that it never happens again and that the Halliday procedures will be followed?

§ Mr. Canavan
I am grateful to my hon. Friend for making that point. I should have thought that the head of the Scottish Education Department could have eaten some humble pie when giving evidence and said, in effect, "Sorry, but we made a mistake. We will try to ensure that we do not make the same mistake again." Instead, we had the sheer arrogance, in effect, of him shrugging his shoulders and saying, "We would do exactly the same again, given the same set of circumstances." However, as I understand that Mr. Mitchell is retiring or being transferred, I shall not pursue the matter.
In any event, I have always understood that, apart from senior civil servants being held responsible for what they do or do not do, the ultimate responsibility rests with the Minister. In this case there were two Ministers, the Secretary of State, the overall head of the Scottish Office, and the hon. Gentleman who is now the Under-Secretary of State for Trade and Industry, neither of whom has seen fit to come here tonight to give an explanation for his conduct, and that is a disgrace. I hope that even hon. Members who are not present will note that fact when they read the Official Report of these proceedings.
There is a rather peculiar connection between the Secretary of State and Mr. Louis Pate. Mr. Pate was appointed by the Secretary of State to the board of governors two months before the decision was taken to put the sale of Hamilton college buildings into the hands of his firm, Wright Johnson and McKenzie, of which he is the senior partner. According to the Daily Mirror of last Thursday, one of the most prestigious clients of Wright Johnson and McKenzie is Tennant Caledonian, the brewers, a director of which was the right hon. Member for Ayr (Mr. Younger), the Secretary of State for Scotland, until virtually his appointment as Secretary of State in 1979. — [HON. MEMBERS: "Dear, dear."] Conservative Members are saying "Dear, dear." It is terrible when someone tells the House the truth. If the appointment of Mr. Pate was above board and had nothing to do with the facts that I have mentioned, why was Mr. Pate appointed to the board of governors at that time? What was his qualification? What contribution has he ever made to Scottish education, especially to the colleges of education.

§ Mr. McQuarrie
I am not trying to detract from what the hon. Gentleman is saying about Mr. Pate, because I accept that he is making a pertinent point, but will he agree that the firm with which Mr. Pate is connected, and of which he is a partner, acted as solicitors to the Jordanhill governors before Mr. Pate's appointment as a governor?

§ Mr. Canavan
It has already been said that the sale of the college would probably have been better handled by an estate agent rather than left with a firm of solicitors. It seems suspicious to objective people such as myself that Mr. Pate just happened to be appointed by the Secretary of State for Scotland. It just happened that his firm was the firm of solicitors normally used by the board of governors.
It seems that the entire affair stinks. Many questions remain unanswered and I hope that the Minister, when he replies, will supply the answers to some of them, if not all. The Under-Secretary of State for Scotland knows that no 149 one is after his blood. However, the facts that have been discovered so far by the Public Accounts Committee and the lack of positive response from the Scottish Office, are such that at least one ministerial resignation should take place. The hon. Member for Edinburgh, Central the Under-Secretary of State for Trade and Industry, is now supposed to be looking after consumer affairs, having been head of a department which mishandled the use of valuable public assets. To my mind, he is incompetent and unfit to hold ministerial office. If he does not have the decency voluntarily to tender his resignation, the Prime Minister should sack him.

§ Mr. Barry Henderson (Fife, North-East)
I know that some of my hon. Friends felt that the hon. Member for Falkirk, West (Mr. Canavan) had made some outrageous remarks this evening. I understand their feelings, but I would say that when they have been in this place for rather longer they will discover that, by his normal standards, the hon. Gentleman was in a statesmanlike mood this evening.
The weakness of the position of the Scottish Education Department arises from the fact that normal procedures were not carried out. No one has argued that they were carried out. Normal procedures were not adopted. They should have been adopted, or, if not, all those who did not adopt them clearly placed themselves at risk of substantial criticism from this House.
We must question further and ask, "Would the answer have been different, had the proper procedures been carried out?" The Select Committee tells us that there is no answer to that question. We just do not know.
Opposition Members have sought, quite legitimately, to place the responsibility firmly on my hon. Friend the Member for Edinburgh, Central (Mr. Fletcher), who was the Minister responsible at the time. Nowhere in the Select Committee report was there anything to say where and at what level the decisions about proper procedures were taken. That makes it difficult finally to decide where the responsibility should lie. Clearly, a Minister is responsible for the decisions of his Department.

§ Mr. George Robertson
The hon. Gentleman is making fair points and what he says is perfectly reasonable, but he underestimates the procedures adopted by the PAC, which are to investigate dealings within a Department. Historically, the principle has always been that if decisions are taken by the Department, the Minister is the only one who can be responsible to the House of Commons.

§ Mr. Henderson
I accept that. As the hon. Member for Glasgow, Cathcart (Mr. Maxton) explained to the House earlier, there are limitations on what the PAC normally does by way of investigation. All I am saying is that, having properly brought out the fact that the correct procedures were not carried out, it is in many ways unfortunate that the House does not have the benefit of a deeper inquiry into why and at what level decisions were taken not to carry out the proper procedures.
The speeches of Opposition Members were not based entirely on what the Select Committee told us or on the Government's response in the Treasury minute. Hon. Gentlemen took a great leap beyond that, and started to quote other people's views about what should happen or who was responsible. What they said was not based on the evidence that came from the Select Committee report.
150 We do not know from the Select Committee's report —the most authoritative report that we have had so far — where in fact — as opposed to the constitutional position—the decision was made, and who made it, not to follow the procedural advice. Lacking that information, hon. Gentlemen go a little too far in assuming that the Minister himself was responsible.

§ Mr. Maxton
Will the hon. Gentleman give way?

§ Mr. Henderson
I am trying to make a brief speech.

§ Mr. Maxton
The hon. Gentleman is a senior member of the Select Committee on Scottish Affairs. Will he perhaps take up my suggestion that the Select Committee might now look at the involvement of Ministers in this affair in an attempt to get to the bottom of the matter?

§ Mr. Henderson
That is a matter for the Select Committee, not for me as an individual member of it. The hon. Gentleman is capable of making his own suggestions about the future course of inquiries of the Select Committee.
The second major issue to emerge—it is unfortunate that we do not have more information than that which comes from the PAC—is the implication in the report that it would have been better if an estate agent, rather than a solicitor, had handled the matter. As far as I know, the report makes no criticism of the firm of solicitors that was engaged. That is important. It is speculation, no more, as to whether a firm of estate agents or solicitors is better able to handle this type of business. I do not know the answer. I certainly do not find it surprising that in Scotland solicitors were employed. I do not find it surprising that a Committee composed almost, but not entirely, of Englishmen felt that estate agents would be more normal. A Scottish Committee might have taken a different view on balance. Therefore, I do not find that criticism very convincing.
I am grateful to the hon. Member for Cathcart for telling us about the limitations of the PAC in regard to those whom it interrogates. It was unfortunate that someone who was being criticised was not interrogated by the Committee in order to find out whether that criticism is merited.
Finally, the PAC has not given a full assessment of the way in which the Scottish Education Department carried out its financial analysis of the benefits of selling at a particular price as opposed to selling at a better price that might arise if it waited longer. Undoubtedly, the cost of keeping property in the hope that a better bid might come along is an important part of the equation and depends on judgment. I have already said that those who are responsible for the decisions clearly put themselves at risk of criticsm by not following the procedures, but it does not necessarily follow that they were wrong to accept an offer that had been made and could be taken. At the end of the day, value, as opposed to cost, is only what someone is, prepared to pay.

§ Mr. Albert McQuarrie (Banff and Buchan)
First, it is fair to say that Labour Members have endeavoured throughout this campaign to assassinate the character of my hon. Friend the Member for Edinburgh Central (Mr. Fletcher), now the Under-Secretary of State for Trade and Industry. This is not the first occasion on which the matter has been raised. This is a scurrilous attack by Labour 151 Members because the evidence in the report on which today's debate is founded in no way, part, or section criticises my hon. Friend.
We must establish right away that the sale of Hamilton college followed the decision to close it. The title to the property was transferred to the board of governors of Jordanhill college of education which was instructed to sell it subject to the Secretary of State's consent. At that stage a joint Jordanhill SED committee was set up to deal with the disposal and to ensure that the SED was party to all decisions.
The hon. Member for Falkirk, West (Mr. Canavan) gave us a statement made by the chief valuer for Scotland. He said that the chief valuer of Scotland thought that the sale might realise £3 million from the main college block and £3 million from the halls of residence. What he did not say, but what is vital and should have been said, was that the chief valuer also stressed that these were not firm opinions and presented only a possible outcome based on conditions most favourable to the seller. In other words, as has been said by my hon. Friends, if there is no buyer for a property, the seller has to take what is available to him.

§ Mr. Canavan
Does the hon. Gentleman accept that there was an onus on the seller, in this case the Government, to try to get the best possible price, and, quite obviously in this instance, they did not do everything possible to get the best price because they ignored the advice of the chief valuer and their solicitor?

§ Mr. McQuarrie
With respect to the hon. Member for Falkirk, West, they did not ignore the advice of the solicitor, nor did they ignore the advice of the chief valuer. They took the advice of the solicitor. When the chief valuer wrote to the Scottish Education Department suggesting several points that were not satisfactory, arising out of the bid which had been made, he said in his letter of 5 August: The total of around £6 million referred to in our letter of 9 December 1981 represented the possible outcome in a situation most favourable to the sellers. That situation did not apparently apply. The paragraphs are there, and they are the proof. I am trying to put before the House that Opposition Members have come forward with a fictitious figure of £6 million based upon——

§ Mr. Maxton
rose——

§ Mr. McQuarrie
—a hypothetical figure which has been set out by the chief valuer, but he has qualified that hypothetical figure on every occasion by insisting that it could only be based on conditions favourable to the seller.

§ Mr. Maxton
The hon. Member cannot claim that £6 million is a fictitious figure. It is in the report. It is clear that is what the chief valuer said. The qualification is accepted. Indeed, every Opposition Member has accepted that qualification. No Opposition Member has attempted to say that, in every circumstance, that is the figure that should be reached, but one has to remember—and I think the hon. Member for Banff and Buchan (Mr. McQuarrie) was a builder—that the building value, in other words, the replacement value, was £20million, and it was not even going to reach the price that it would cost to replace it. The figure of £6 million was not, in fact, a particularly high figure.

§ Mr. McQuarrie
The figure of £20 million is a red herring, for the simple reason that Hamilton college was not going to be replaced. It was quite evident from the information from Hamilton district council and Strathclyde regional council that, because of the amount of education property available to those authorities, they had no intention of buying. The position that the hon. Member for Glasgow, Cathcart (Mr. Maxton) put before the House earlier, that the Strathclyde regional council did not put in a bid, for the reason that it thought it would force the issue with the Government on the basis of taking over the building, is absolute nonsense. It is clearly laid down, as evidenced in the report — and it is a report that Opposition Members consistently throw in our teeth—that the Strathclyde regional council had no intention of buying it, and neither did Hamilton district council.
As to the £6 million, I refer the House to the oral question that the hon. Member for Hamilton (Mr. Robertson) put to my right hon. Friend the Prime Minister on 28 February: Will the Prime Minister take time, between her meetings, to read the ninth report of the Public Accounts Committee, on the sale of Hamilton college of education? Will she reflect on the fact that the Minister responsible for taking the decisions that gained the unanimous censure of the Public Accounts Committee, and who lost the taxpayer more than £5 million." — [Official Report, 28 February 1984; Vol. 55, c. 135.] I will not continue, because it is the £5 million with which I wish to deal. How could anyone suggest that £5 million was lost to the taxpayer when there was no taker for the buildings? This is the vital question in the debate. If there is no buyer, other than the one on offer, then that one is the only one the Government are in a position to accept.

§ Mr. George Robertson
The hon. Gentleman makes much of this point. He should look carefully at the Treasury minute. The burden of criticism in the report of the Committee of Public Accounts is of the procedures that were used, and the casual way in which the Scottish Education Department went about selling the college. Of course nobody knows what precise figure could have been obtained at the end of the day, but the chief valuer (Scotland) who is employed by the Treasury—hardly the most radical in its view of the valuation of anything — concluded that it was worth approximately £6 million. I draw the attention of the hon. Gentleman, who is a reasonable man, to the fact that the Treasury Minister now accepts that the procedures were not right, and it is the Treasury that is saying that the procedures will be changed. The procedures were wrong, so the chances are that there would have been something substantial in excess of the figure obtained, had the Treasury gone about it in the right way.

§ Mr. McQuarrie
I shall not give way again. A small point is all right, but I am not interested in hearing another speech from hon. Members who have already spoken.
In paragraph 313 of the report, Mr. Mitchell, the Secretary of the Scottish Education Department, said of the Halliday report: May I correct you, Chairman, with respect. The Halliday report was concerned with the sale of hospital property by the Secretary of State, in other words it was Crown property. In the case of Hamilton College, it was not Crown property".

§ Mr. Norman Hogg (Cumbernauld and Kilsyth)
rose——

§ Mr. McQuarrie
No, I will not give way.

§ Mr. John McWilliam (Blaydon)
rose——

§ Mr. Deputy Speaker
Order. The hon. Member for Banff and Buchan (Mr. McQuarrie) has made it absolutely clear that he is not giving way.

§ Mr. McQuarrie
I have given way enough. Mr. Mitchell also said: Having said that, we certainly accept that the guidance and recommendations given in the Halliday report had some bearing on this case and we took very serious account of its recommendations. No Labour Member has mentioned the fact that the Department considered the Halliday report, although it was not obliged to do so.
I have read this report very carefully. I am sorry to say this of civil servants who cannot answer back——

§ Mr. Dewar
rose——

§ Mr. McQuarrie
No, I will not give way.
I say this with the greatest regret, but it is clear from the evidence that the Minister was misled by his officials throughout this sorry history.
In questioning those officials, and this evening, the hon. Member for Cathcart raised the question whether NALGO would have purchased this property. In Committee, it was said that NALGO might have done so if it had known the offer which had been made. If NALGO was seriously interested in any part of the college, it would have been one of the 40 people and organisations that sent for the brochure, one of the 10 which were shown around the college, one of the four which made a direct——

§ Mr. Maxton
rose——

§ Mr. McQuarrie
I shall not give way. I have given way often enough.

§ Mr. Maxton
Will the hon. Gentleman give way?

§ Mr. Deputy Speaker
Order. Mr. McQuarrie.

§ Mr. McQuarrie
I will give way once more to the hon. Gentleman.

§ Mr. Deputy Speaker
Mr. Maxton.

§ Mr. Maxton
If the hon. Gentleman saw an advertisement offering a Rolls-Royce — he will know more about Rolls-Royces than I ever will—for £25,000, he might decide not to reply because it was way beyond his means. However, if he later discovered that it was sold for £5,000, which was well within his reach, he might think that he had been slightly swindled or diddled on the deal.

§ Mr. McQuarrie
Once again, that is an interesting hypothetical example. As I have said — the hon. Gentleman apparently cannot take this on board — NALGO had the same opportunity as any other bidder but did not take it.

§ Mr. Norman Hogg
Will the hon. Gentleman give way, because I can help him? I wish to declare an interest, Mr. Deputy Speaker, because, as you say, I represent NALGO. That appears in the Register of Members' Interests.
Shortly after this evidence became public, I and my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) had a meeting with the education officer of NALGO. The position put to us was exactly the same as my hon. Friend the Member for Cathcart has just explained. That is NALGO's position—that it would have considered making an offer for the college if it had 154 thought that the price was going to be anything like the figure for which it was sold. It would have offered much more, because it would have taken a much more responsible attitude to a public sector asset.

§ Mr. McQuarrie
I am grateful for that intervention, because it brings us back to the very point that I am trying to get over to the hon. Member for Cathcart. If NALGO had been seriously interested in the property, it would have bid for it and not waited until it was told the price by someone else. That is all right for local authorities or public bodies, but the hon. Member knows that in Scotland, when we have no upset price, which is a competitive price——

§ Mr. George Robertson
Do we not?

§ Mr. McQuarrie
I said "when" we have no upset price, not "as" we have no upset price. The market was being tested in this case. With no upset price, it would have been normal for NALGO to make its bid and not wait for a later opportunity.
Mention has been made of the profits which are possible in this matter. In the PAC, the hon. Member for Cathcart mentioned the cost to Miller Homes of converting these buildings into luxury apartments. In paragraph 377 on page 13, he said: One would not expect that it was going to cost £18,500 to convert each flat to luxury standards. Mr. Gilchrist replied: I am not really in a position to say whether it is a fair cost or not. As the hon. Member for Cathcart said, I am a builder. I know that a luxury kitchen costs at least £10,000 and a luxury bathroom suite £5,000. Those two items go a long way towards making apartments luxury apartments. That is £15,000 of his £18,500, so it would cost a lot more than that to make the buildings into luxury apartments. So there is little likelihood of Miller Homes making anything like the figures which have been bandied around in this debate.

§ Mr. Maxton
On that point, will the hon. Gentleman give way?

§ Mr. McQuarrie
No, I will not.

§ Mr. Maxton
Will the hon. Gentleman give way?

§ Mr. Deputy Speaker
Order. Mr. McQuarrie.

§ Mr. McQuarrie
I have given way often enough.
I now refer to the Treasury minute, of which Labour Members have made great play tonight. Paragraph 2 says: The department accepts that, although Professor Halliday's report dealt solely with the disposal of National Health Service property, its recommendations should in principle apply to the disposal of other Crown property". It says that they "should in principle apply", not that they must apply.

§ Mr. George Robertson
Look at the last sentence in paragraph 5.

§ Mr. McQuarrie
The hon. Member should hold his horses; I will come to paragraph 5.
Nowhere does this paragraph say that those recommendations "must" apply in such cases.

§ Mr. Robertson
Yes, it does.

§ Mr. McQuarrie
Nowhere is that said in paragraph 2.
Then we come to paragraph 3. This is another paragraph that Labour Members have failed to bring to the attention of the House. It says: 155 The department notes the Committee's view that it failed to ensure that everything possible was done to market the property adequately but does not accept that its approach was casual or that its efforts to explore the possibility of alternative use or development were inadequate. Labour Members have not mentioned that. They are trying to blow up the importance of paragraph 2.
The hon. Member for Hamilton (Mr. Robertson) says that I should read the last sentence in paragraph 5. That sentence states: This guidance will ensure that the recommendations of the Halliday report are appropriately applied. One must accept, from the report's wording, that the action is to be taken only when appropriate. [Laughter.] This is no laughing matter. I fail to understand why an hon. Member with the ability of the hon. Member for Glasgow, Garscadden (Mr. Dewar) should laugh. The power to sell Hamilton college rested with the Jordanhill governors who were not obligated to implement the Halliday report.

§ Mr. Maxton
Will the hon. Gentleman give way?

§ Mr. McQuarrie
I shall not give way again. It is clear that in no case has there been a valid criticism of the Under-Secretary of State.
The report discusses whether the property should have gone to commercial estate agents. I believe that in this instance it would have been wiser to have done that, and to have advertised on Friday rather than Monday, as was pointed out by the Hon. Member for Cathcart when questioning the witnesses. It would have been wiser to have advertised in the The Sunday Times ass well as the The Times. It would have been wiser also—I do not know why solicitors could not accept this point—to advertise in the Estates Gazette because that is where commercial property is advertised. The report contains valid criticisms, but I do not accept that my hon. Friend the Under-Secretary of State for Trade and Industry was in any way responsible for the decisions taken. If one reads the evidence thoroughly, one can see that the blame for the whole sorry business lies at the feet of the officials, not the Under-Secretary of State.

§ Mr. Donald Dewar (Glasgow, Garscadden)
I often tell people that I value political loyalty, but in the past couple of hours we have seen an extraordinary display of gut loyalty from Conservative Members. At times the loyalty has been so advanced that it has led Conservative Members into extraordinary intellectual positions. On many occasions they were bereft of argument and therefore tried to shrug off and laugh off the Hamilton college sale. This is a serious matter, and important points are raised in the Committee's report. I did not enjoy the spectacle of the laughter and hooting during the debate. I make an exception of the hon. Member for Fife, North-East (Mr. Henderson), who made a short and thoughtful contribution to the debate, although I did not agree with everything he said.
We should not pretend that nothing went wrong in the sale of Hamilton college, and only a small group of Conservative Back Benchers attempted to do so. I am sorry that the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley), who with some justice, has been critical of the attendance of hon. Members during the 156 debate, has departed from the Chamber. She may be intending to return, but she will have to read in Hansard my critical remarks of her speech.
It was extraordinary that the hon. Lady argued that in some way the villain of the piece was the chief valuer for Scotland. It is true that, as the hon. Lady said, the Halliday report had some criticisms of his position and the way, that he was integrated into the system, but the hon. Lady should take the trouble to read what Halliday said in recommending how to overcome the difficulties. We understand that those recommendations were implemented. The hon. Lady's point is only of historic and academic interest, and should not apply to the position of the chief valuer.
Even more extraordinary was the contention of the hon. Lady and the hon. Member for Dumfries (Sir H. Monro)—who seems to have wandered off into the night—in attempting to defend the fact that the Halliday recommendations were ignored by the Scottish Office over the sale of Hamilton college. The Scottish Office seemed to be perfectly happy with the advice offered by the chief valuer and the solicitor's office, but it was jettisoned in a remarkable way by the Minister and his immediate advisers.
That may not worry the hon. Members for Dumfries and for Renfrew, West and Inverclyde, but, to be fair, it worried the PAC, which was numerically dominated by Conservative Members, and it also worried the Government. That is why we have the Treasury minute which makes it clear that it recognises that the recommendations of the Halliday committee, which were ignored in the sale of Hamilton college, should not be ignored in future.
While I admire the ingenuity, and the kind of barrack room lawyer's skill of the hon. Member for Banff and Buchan (Mr. McQuarrie), any reasonable interpretation of paragraph 5 of the Treasury minute suggests that the Government accept that the guidance they issue will ensure that the recommendations of the Halliday report are appropriately applied. If the Minister is going to say that his hon. Friend the Member for Banff and Buchan is right, that he does not mean that the Halliday report recommendations will be applied in future, that he accepts that in the case of the Hamilton college the Ministers were correct to ignore its recommendations and that what occurred can happen again, he should make that clear when he replies to the debate. However, I do not believe that he will take that line.
I assume, and the Minister must tell me if I am wrong, that we are correct in our interpretation of paragraph 5 of the Treasury minute and that the Halliday report recommendations will be observed in future and that we will not have the kind of charade that seemed to take place during the negotiations for the sale of the college of education at Hamilton.
It is clear, and I want to be fair to the Government, that they accept, although it has not been accepted by any Conservative Back Benchers, that something went wrong and that there is a need to change the rules. If we get into this position in future, there will be a different result and the market will almost certainly have been tested again, as the chief valuer recommended in his second letter and second advice to the Scottish Office. I shall return to some of these points later.
157 I regard this as a sad and sorry tale. There was a good deal of muddle, a great deal of thoughtlessness, a certain amount of panic, and pressure and embarrassment about the matter when the sale was taking place, and there was a level of incompetence as well.
I should he saying that some Opposition Members and some people outside the House who have been reading and following the case think that in talking about muddle and incompetence I am being charitable. I accept that there are half a hundred ways of presenting the facts. One can talk about a bewildering range of infamy, speculative theories, and proper and improper motives. I am not interested in that. I should prefer to study the record, the PAC findings, and the evidence submitted by the Scottish Office and to try and make some deductions. I believe that if one approaches the matter in a reasonably clear minded way, and is not blinded by a loyal wish to do one's best for a colleague, the deductions that one will draw from the fact are devastating enough by any normal standards.
The hon. Member for Renfrew, West and Inverclyde produced the information as some kind of coup, but I had a connection with one of the parties to this matter. The Minister will confirm that I mentioned it to him this evening and rather jokingly said that I had to declare, if not an interest, at least a connection, because about 20 years ago I was an apprentice with the firm of solicitors that acted in the sale of Hamilton college. I do not believe that I have had any connection with them since, but my memories are perfectly amiable. I have no complaint about the way in which I was treated, although it may well have complaints about the way it was treated by its apprentice.
Having got that off my chest, I express my thanks to the PAC for what I believe is the careful work and fair and balanced submission of the argument and the evidence that it produced. I make no complaint about the fact that they are not here, but I believe that those members of the Tory majority on the Committee would not have been grateful for or impressed by the somewhat cavalier way in which their work was treated by their colleagues in Scottish Conservative group. Of course, on occasions in Parliament we deal in coded messages. There is no doubt that, in the context of the normal expressions of a PAC report, this is a strong criticism of the way in which the Hamilton college sale was conducted.
There is much common ground, although it has been hidden in the debate. Many basic facts are not in contention and will be agreed by all parties. There was a transfer of the property to the governors of Jordanhill college. There was a direction by the Secretary of State to sell. All that took place against the background of a considerable public scandal and disquiet over the sale of certain land at Robroyston in 1977, which led to the appointment of the Halliday committee. As a result, specific guidelines were introduced by the Scottish Office to try to ensure that such a situation would not arise again.
I say to the hon. Member for Banff and Buchan that it is a matter of fundamental importance that it is not right to say that because Halliday was dealing with hospital property, Robroyston hospital, in some way there was no need to regard his recommendations as more than persuasive in terms of the transaction that we are discussing. We know for a fact that the PAC did not take that view. If the House likes—I am sure that it will be prepared to do so — to look at paragraph 19 of the report, it will see that specifically it came to the conclusion that it was not possible to shelter behind the argument that 158 the Halliday report did not cover this circumstance. It said that the Jordanhill governors were financed by the Scottish Education Department, were selling on a direction from the SED, and that a special joint committee had been set up with SED officials on it to control and monitor the situation because they were responsible for it. Ultimately, the sale had to be approved by the Minister. It is clear that ministerial responsibility runs here.
If the hon. Gentleman looks at paragraph 5 — it is important in view of the prominence of the defence that has been given to the argument — he will see the following: When disposing of a property on the open market, Scottish Office Departments are expected, under guidance issued by the Scottish Solicitor's office in 1981, to adopt procedures recommended by the Halliday committee in 1980". In other words, as a matter of fact—the fact is culled from the Scottish Office — the Scottish Solicitor's Department made it clear in 1981 that the Halliday committee report would apply to such situations, and the Treasury minute does not attempt to maintain the argument that the Halliday committee report was not expected to apply to the sale of Hamilton college. Therefore, we can genuinely put that argument on one side.
Initially, that advice was followed. That is why, in October 1981, the chief valuer for Scotland was consulted. On 9 December we received his advice, with the famous estimate. I accept that it was heavily qualified by the fact that it was only in favourable circumstances that he thought a figure of £6 million could be realised. Perhaps more importantly, from my point of view, he went on to make some firm recommendations about the use of a commercial selling agent, an estate agent, which he thought, in a quaint phrase in the report, might be able to discover specialised pockets of potential purchasers.
There was a firm recommendation that that should be done. I am familiar with the custom that Scottish solicitors are more involved in the sale of property than their English counterparts, although that phenomenon is rapidly changing with the growth of estate agencies. In my view, however, there are not many solicitors with experience of disposing of property of that specialist nature. Even allowing for that, it is unfortunate that the Halliday report was not followed.
The PAC commented on this in paragraph 16 in what for that Committee are very strong terms indeed. Hon. Members will recall—I give anyone still here at this hour credit for having read the report — that it commented as follows: We were astonished to learn that SED had approved the appointment of the Jordanhill College's own solicitors as selling agents … and … had then made no attempt either to change their decision or to discuss with the Chief Valuer their rejection of his advice. That is one of the most extraordinary themes running through the report. The chief valuer, presumably a man of great skill and expertise, was twice asked for his advice and on both occasions his advice was entirely rejected without any attempt to discuss the reasons for that or the risks or dangers involved.
Events, of course, largely justified the chief valuer's doubts about the selling methods. I shall not rehearse at length the charges made in the PAC report, but I believe that the advertising was inadequate in terms of both timing and placement. Two advertisements appeared, one between 14 and 18 December, and the other between 11 and 15 January. Even a person whose conveyancing 159 experience is as sketchy as mine must recognise that that was a very narrow testing of the market at a time of the year when the market is peculiarly and seasonally sluggish. Placement was in The Scotsman, the Glasgow Herald, The Times, and the Times Educational Supplement. Even I—I say this without undue modesty — should have thought that some of the technical journals such as the Estates Gazette and Estates Times were obvious publications to advertise such a highly specialised property.
I concede, of course, that we shall never know what might have happened if a different policy had been followed. I certainly do not believe that the full £6 million would have been obtained in that depressed market. Nevertheless, as the Treasury minute itself concedes, the offers forthcoming were extremely disappointing. In view of that concession and the feeling in the Scottish Office itself, it is indeed surprising that no attempt was made to test the market again and put the situation right. I accept that there was also the consideration of the substantial upkeep costs for caretakers, heating, rates and so on and that a balance had to be struck. Nevertheless, given the price that was offered, the advice originally given by the chief valuer and the factors taken into consideration in his second round of advice, the decision taken by the Scottish Office was very strange indeed—and hindsight has done nothing to remove or weaken that feeling.

§ Mr. Henderson
I have already made clear my views on the fact that the proper procedures were ignored. Even when they are properly followed, however, there will always be a difficult matter of judgment between the certain costs of a delay in the sale and the uncertain benefits that might flow from it.

§ Mr. Dewar
I recognise that argument, which is fully set out in the evidence. Nevertherless, taking a global view, the balance was strongly in favour of readvertising. As the hon. Gentleman knows, when the chief valuer was brought in again in August 1982 he said that he thought the price was too low. He knew about the depressed state of the market, but said that he thought it had not been properly tested.
Coming from a man of such skill, I should have thought that that would be a persuasive—nay, compulsive—argument to reconsider the postition. He referred also to matters such as the likely value of the unbuilt acresa of land outwith the loop of the Hamilton racecourse and made it clear that, despite the factors to which the hon. Gentleman draws attention, an attempt should have been made to test the market again and to obtain a better price.
Instead, the £680,000—£270,00 plus £410,000 from the two companies offering — was accepted, further reduced by £106,000 as a resutl of the surprising provision that the SED should remain responsible for the upkeep costs of the building from November 1982 until December 1983. The final take was thus brought down to £574,000.
I do not seek to overstate the case, but I find it difficult to see what possible defence there can be for the failure to safeguard public assets and the public interest as I see it when the chief valuer had given such firm and definitive advice. If the Department had said that it would not follow the suggestions of the chief valuer and there had then been a rush of business and a good offer, the Department would have been entitled to say, "We told you so, mate. It is just 160 as well that we did not take your stuffy, institutional advice. We went our way, and see what has happened." However, having ignored the chief valuer's advice, the Department ended up with an offer that was extremely disappointing, on its own terms. It must have known that it would be open to sustained public criticism, and it was faced with definitive advice from the chief valuer. In that situation, it was foolhardy and, I believe, irresponsible of the Department to press on and accept a clearly unsatisfactory offer.
We now have the Treasury minute. I welcome that fact, because we wanted to know the Government's view. The minute is not much more than a poor plea in mitigation, and is written in coded language. I have formed the impression that, in most of its comments, the Treasury is careful to make it clear that the view that it is expressing is that of the Department — presumably the Scottish Education Department — rather than its own. My impression is that the Treasury is distinctly uncomfortable and uneasy, and so it should be.
The first line of defence is that Halliday was not really relevant. That does not hold water. The second attack, which I do not think is dealt with, was on the total failure of the Department to accept the advice of the chief valuer and of the Scottish Office solicitor. One of the most eloquent passages in the evidence is at question 330. The reply by Mr. Gilchrist was admirably brief. He was asked: Were you not surprised that the Scottish Education Department did not take your advice and he replied, "Yes." Everyone else has been surprised, too, and in the circumstances that surprise is well justified.
The main charge is that there was an insulting disregard for all the expertise available within the Minister's Department. I do not know exactly what is meant by the following formulation of words: the Department accepts that it should have attempted to reconcile the views of the Governing Body and the advice of the Chief Valuer. The Department should have taken the chief valuer's advice in August 1982, when it was clear that its policy had brought thoroughly bad results for the public purse and the reputation of the Scottish Office.
It is maintained in the minute that the Department notes the Committee's view that it failed to ensure that everything possible was done to market the property adequately but does not accept that its approach was casual or that its efforts to explore the possibility of alternative use or development were inadequate. I believe that that charge sticks. The advertising was a joke. The Department spend about £3,000 on it. It spent about £12,000 in total on the sale, not including the legal fees, which were, of course, the scale fees of the Law Society. The sum was not large, and most of that £12,000 was presumably spent on the brochure. The circulation of the brochure was not wide, because the advertising was inadequate. There was no warning of the low price that might well have succeeded in attracting potential public sector purchasers. The Treasury was not even told about the chief valuer's advice, and we are casually informed that that was inadvertence. The whole thing seems to have been a muddle, and it is easy to understand why those who have studied the situation draw, on occasion, more sinister conclusions than I have done. On the face of it, an asset that was expected to raise considerably more than the offers that were made was sold for a knock-down price after a very inadequate marketing effort.
161 The building firm Miller's must be pleased with what it got, and it looks as though it will do extremely well out of the transaction. There was total disregard for the rules, despite carefully considered guidelines laid down by Professor Halliday and his colleagues. The hon. Member for Dumfries said that the Minister took the best advice available to him. The exact opposite is the case. He deliberately ignored and flouted it. That is why we are complaining so bitterly. We are entitled to ask why it happened. There have been many suggestions—there always are when people who are normally reasonably rational, at least when defending their own interests, take an inexplicable course of action.
Circumstances in this case justify ingenious explanations. I have much sympathy with what my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) said. Some of the explanation lies in the circumstances in which the sale took place. There is no doubt that the embarrassment that surrounded the closure and sale of Hamilton college was something that Ministers would have liked to end. There might well have been a temptation just to get it off the front page by concluding a quick sale and closing the issue.
If that was the motivation it cost the public purse a bit, but it was a reasonable bargain in terms of political advantage. That can never be justified. If that is not the explanation, I find it difficult to envisage as other than amazing incompetence the fact that the Minister should have ignored all the advice and acted in an enormously arbitrary way. That would have shown a basic lack of control over his Department that I find extraordinary.
I do not believe the suggestion advanced by the hon. Member for Banff and Buchan, which was the most wounding of the attacks made on the hon. Member for Edinburgh, Central (Mr. Fletcher) now the Under-Secretary of State for Trade and Industry. He said that the Minister was a dupe, that he was misled by his civil servants. I do not believe that for one moment. I do not believe that the civil servants would have wanted to mislead the Minister, and I can think of no motive for their withholding information from him. I believe that the Minister was in control of his Department and knew what he was doing. That is one of the reasons why we believe that he and his credibility are at risk as a result of this business.
There is a clear admission in the Treasury minute that something went wrong. It accepts that lessons have to be learnt. It talks about revised guidance that is to be issued shortly and ensuring that the recommendations of the Halliday report are appropriately applied. There is a concession, albeit coded and muted in the reassuring anti-climatic prosaic prose of Departmental minutes, but there is an admission that something went horribly wrong. I believe that the Minister must be responsible for that.
Of course the Government now hope, having made that admission, that nothing else need to be done and that the whole think will quietly go away and be forgotten. However, I do not believe that the minute is enough. I am glad that lessons have been learnt and that the Government will not be allowed to act irresponsibly as happened with Hamilton college. Ministers carry ultimate responsibility. I believe that the Minister concerned knew what was happening. It was not a minor anonymous transaction that was unknown and unobserved and lying at the edges of ministerial knowledge.
162 There had been a policy decision, a nominal implementation of the Halliday report, and even the appointment of a committee with civil servant representatives to ensure that there were no slip-ups. There was a great deal of political attention on Hamilton college and a great deal of political pressure. In those circumstances, it is almost inconceivable that the Minister concerned was not fully aware of what was going on. He must have been a party to the decision to conclude the sale, despite the overwhelming pressure and advice from his own experts, especially from the chief valuer of his own solicitors department.
We must not allow the Government to cut and run from this issue on the basis of this flimsy note from the Financial Secretary to the Treasury, which arrived yesterday afternoon. What has happened in this sad affair is that the credibility of a Minister, of the Government generally, and of the Scottish Office especially, has been affected, and the competence of the hon. Member for Edinburgh, Central has been called into question. He must have seen those reports, and he must have taken the decision. if he is rightly reported as saying that the criticisms of his conduct are stupid and ignorant, he is impliedly attacking not only his and my colleagues on the PAC, but the Government, on a fair reading of the Treasury minute.
If there is stupidity and ignorance — I am sorry to have to say this—it is on the part of the hon. Member for Edinburgh, Central. He does no credit to himself when he blusters and strikes out in that way, when a genuine administrative problem has been shown up in sharp detail and for which he was clearly responsible. On the balance of the evidence, and on the clearly arbitrary, unsatisfactory and unwise way in which he acted, he should look carefully at his position.

§ The Under-Secretary of State for Scotland (Mr. Allan Stewart)
I agree with the hon. Member for Glasgow, Garscadden (Mr. Dewar) on at least one point: that this is a serious matter. When my hon. Friends greeted some of the remarks of the hon. Member for Hamilton (Mr. Robertson) with some hilarity, it was because of the wild and colourful language that he used—terms such as "national scandals" and so on, when 38 Scottish Labour Members have not bothered to attend the debate.
We heard excellent speeches from my hon. Friends the Members for Dumfries (Sir H. Monro), for Renfrew, West and Inverclyde (Mrs. McCurley), for Fife, North-East (Mr. Henderson) — even the hon. Member for Garscadden conceded that—and for Banff and Buchan (Mr. McQuarrie). The speeches of Opposition Members improved as they went along. After the rather colourful and unjustified generalisations of the hon. Member for Hamilton, the hon. Member for Glasgow, Cathcart (Mr. Maxton) made some disgraceful allegations, to which I shall return. The House had to wait until the speech of the hon. Member for Falkirk, West (Mr. Canavan) to near an Opposition Member concentrate on the specific points in the PAC report. I hasten to add that I did not agree with all of his remarks.
The PAC report criticises my Department, and it is only reasonable that hon. Members should seek to debate the matter. I agree with the hon. Member for Cathcart that the debate need not be limited to the PAC report, and it is reasonable for hon. Members to try to establish to what extent the criticisms are justified. We published the 163 Treasury minute today, which has, in the main, been welcomed by hon. Members. To clear up any misunderstanding about it, I assure the House that responses to PAC reports are always in the form of Treasury minutes, which represent the collective view of the Government.
The Treasury minute accepts that, especially in matters of procedure, some things could have been done better. That includes further discussion with the Chief Valuer of his recommendations at two stages. It shows that action is being taken in the Scottish Office to ensure that procedures in the disposal of property will in future be such as to take appropriate account of the recommendations of the Halliday report.
That said, I must also point out, as my hon. Friends have done, that in this debate and in much of the publicity outside the House, deductions have been made, allegedly from the report, that are not supported by the evidence to or the findings of the PAC. There is the repeated allegation that Hamilton college of education was sold at a throwaway price. That is not a formal complaint about the PAC report, but it has figured in the debate tonight and I shall answer it first.
My hon. Friend the Member for Dumfries, who spoke first, apologised to me for the fact that he would have to leave before the end of the debate. My hon. Friends the Members for Renfrew, West and Inverclyde, for Fife, North-East and for Banff and Buchan all pointed out that no one has dissented from the argument that the true value of property is the price that can be obtained for it on the open market. The PAC report, in paragraph 25, stated: There can, of course, be no certainty what price would have been obtained for Hamilton College if SED had sought to have its sale handled in accordance with the Chief Valuer's and Solicitor's Office advice. When the Chief Valuer put a price of £6 million on the property, he stressed that it represented only the possible outcome, based on conditions most favourable to the seller, and recognised the possibility that the estimated value might not be realised. He conceded in correspondence that the situation apparently was not most favourable to the seller, but did not offer a revised valuation of the property.
After property had been offered for sale on the open market, the best offers that were received were the two offers adding up to £680,000, which were eventually accepted. It is true that there were two offers that in purely financial terms were higher, but both were hedged about with conditions that raised the serious risk that no sale would ever have taken place, and for that reason they were found unacceptable. The PAC report does not suggest that the decision not to accept those offers was mistaken.

§ Mr. Maxton
If the Minister had a house valued at £60,000, and for reasons connected with his job he had to move away so that it was standing empty, and he put it on the market knowing that he valued it at that price, but one person offered him £7,000 and another £6,000, would he accept either of those offers without going back to the market place to see whether he could get a better offer? If he could not then get a better offer, would he accept the £6,000 rather than the £7,000?

§ Mr. Stewart
The hon. Gentleman's second point is absurd, and the hon. Member for Garscadden would 164 concede that. As to the first point, one would make a judgment on the offers that one received. I shall come to the judgment that was made.
It must be emphasised that the Chief Valuer's original estimate of £6 million was based essentially on the assumption that the most likely purchaser for the teaching block would be Strathclyde regional council but that, because of the special nature of the accomodation, it might be necessary to accept substantially less for the teaching block if Strathclyde was not prepared to pay as much as £3 million. In the event, it elected to make no offer for any part of the property—not, I understand, because of the political factors suggested by the hon. Member for Cathcart, but because of the high running costs.
I come now to an allegation made in the debate that must be forcefully rejected—the allegation by the hon. Member for Cathcart and referred to by the hon. Member for Garscadden that the sale of the Hamilton premises was rushed through with the object of getting rid of the property as quickly as possible without due regard to the price obtained.
My right hon. Friend's decision to close Hamilton was announced in August 1980 and the college legally ceased to exist as a separate college in September 1981. The public advertisement of the Hamilton property as available for disposal was issued in December 1981 and January 1982. The following six months were devoted to establishing the extent of interest in the property, and firm offers were invited in June 1982 from those who appeared to be most interested—[Interruption.] I am making an important point because a disgraceful allegation has been made.
Following the closing date for offers at the end of July, there was a further period during which offers were considered. Authorisation to accept two of the offers was issued at the beginning of October, and missives were exchanged in November. No reasonable person looking at that timetable could possibly suggest that whole thing was rushed.

§ Mr. George Robertson
rose——

§ Mr. Stewart
I will give way to the hon. Gentleman, but I am anxious to have my answer to the debate on the record.

§ Mr. Robertson
We are anxious to hear the Minister's reply, so I shall not delay him for long. The hon. Gentleman said that the whole thing was not rushed. The PAC documents all the advice that was given to Ministers about the need to readvertise and to examine, through the district valuer, the extra potential of the land given different planning permission. A decision was taken not to go ahead with that advice. The evidence is that, despite the timetable, the decision was still rushed so as to give the properties to those who had made low offers.

§ Mr. Stewart
No, the decision was not rushed. I shall come shortly to the point the hon. Gentleman makes about why the offers were accepted, despite the fact that they were disappointingly low.
As for the criticism that the SED did not follow the advice that estate agents should be appointed to handle the disposal of the premises, we have accepted that my Department should have attempted to reconcile the views of the governing body of Jordanhill college of education and the advice of the chief valuer that estate agents should 165 be appointed before finally approving the appointment of the selling agents for Hamilton. However, the question was not so much a matter of black and white as has been suggested tonight. It is not clear that the definition of "selling agents" in the Halliday report necessarily excludes firms of solicitors experienced in large property transactions. It has been pointed out that solicitors in Scotland continue to have a major role in property transactions. Indeed, my Department received strong assurances that Jordanhill solicitors possessed such experience.
The governing body of the college—the owners of Hamilton college at that stage—was disposed to use its own solicitors. While my Department naturally had to examine the proposal critically on its merits, it is fair to make the point that we have long experience of dealing with the Jordanhill governing body on matters for which it assumes substantial responsibility and have every reason to put the highest value on its judgment. There is every reason to suppose that, in such an obviously important matter, it would have reached a decision only after careful consideration of the consequences.

§ Mr. Maxton
rose—

§ Mr. Stewart
I must get on.
At the point at which the Jordanhill proposal was approved, we had other advice. The solicitor's office had advised us that an estate agent might know of specialised pockets of potential purchasers who would be interested in such a property. We were advised to consult the estates officers of the Scottish Development Department. The advice from that office at that time suggested that the use of an estate agent would not necessarily bring to such a transaction experience that would not be available to Jordanhill solicitors. Nevertheless, we accept, as I said, that there should have been an attempt to reconcile the views of the governing body and of the chief valuer, and it is regrettable that that was not done.
I come to the measures that were taken in marketing the Jordanhill college premises—the point made by my hon. Friend the Member for Fife, North-East. It is fair to point out why the PAC did not take evidence from bodies such as solicitors. I believe that it was regrettable that the PAC subsequently criticised not just the SED but the solicitors directly without having taken evidence from them. They advertised the property for sale in a usual way. Forty-nine copies of the brochure were issued to inquirers and leading estate agents.
My hon. Friend the Member for Aberdeen, South (Mr. Malone) intervened to make an important comment about the role of estate agents. The Public Accounts Committee, in paragraph 15 of its report, states that potential buyers were not falling over each other to bid for this specialised property. Paragraph 25 states: There can … be no certainty what price would have been obtained". It was felt that the price would have been uncertain had a different procedure been followed.
As my hon. Friend the Member for Renfrew, West and Inverclyde said, in the spring of 1982 about 15 purchasers were showing serious interest in the premises. It would be unfair if the impression were left that the admittedly disappointing price ultimately paid for the Hamilton premises was the result of shortcomings on the part of the selling agents.
166 The hon. Member for Cathcart mentioned NALGO's interest. The first that anyone connected with the sale heard of an alleged NALGO interest was when the hon. Gentleman was asked a question during his evidence on 16 November 1983. I must emphasise that no upset price was fixed on the property.

§ Mr. Maxton
Why not?

§ Mr. Stewart
The chief valuer recommended against divulging his own estimate to any potential purchaser. It was thought better by him and everyone else to leave the price to be settled through the market.
The hon. Member for Hamilton asked why the Miller offer was accepted with the planning conditions which applied to it when there were higher offers. The PAC did not dispute that issue. The conditions were not comparable. The Miller conditions, after discussion with the planning and building authority, appeared capable of being, and were, met. The higher offers were subject to conditions which appeared to run a serious risk of not being met.
I move on to the decision to accept the offers by Miller and Christian schools north-west, which is a central area of criticism in the minds of Labour Members. All the offers for the property were regarded as low.

§ Mr. Henderson
Will my hon. Friend emphasise that the PAC never criticised the Department for not taking the higher offers in view of the difficult conditions surrounding them?

§ Mr. Stewart
That is correct. My hon. Friend is right.
The offers for the property were all regarded as low. The option of rejecting all the offers and seeking to market the property anew had to be seriously considered. An investment appraisal was carried out, which sought to appraise all the options, including that of readvertising. The general effect of this, allowing for maintenance costs during the time likely to be needed to complete the various sales, was that the two lowest offers taken together fell not far short of the next highest offer for the entire property, and significantly short, in purely money terms, of the highest offer.
There were conditions attached to the two highest offers which, in our view, raised an unacceptable risk that no sale would take place. If the property had been readvertised, it would have been necessary to obtain by the likely completion date a price amounting to more than double that which was obtained. It seemed unlikely that a new prospective buyer willing to pay such a price would come forward in the near future. There is no evidence to suggest that that was anything other than a sensible conclusion. Substantial account was also taken of the fact that so long as the property remained empty, maintenance and security costs estimated at £325,000 a year would be incurred, with the possibility that, as time passed, there might be a need for greater expenditure on repairs. Therefore, on balance, the view was taken that the property should be sold for £680,000.

§ Mr. Bill Walker
Does my hon. Friend agree that one of the advantages of having made the sale is that the local authority is now getting rates for the school?

§ Mr. Stewart
My hon. Friend is right. The local authority gains that benefit.
I want to emphasise the point about the investment appraisal. Opposition Members suggested that, at that 167 point, the Government took a rushed decision not to consider the option of going back into the market from scratch. That is not true. The option was considered very carefully. A full investment appraisal was undertaken, and on the basis of that appraisal the Government decided that it would be sensible to accept the recommendation of the Jordanhill college board of governors that the acceptable offers that had been put in should be accepted.

§ Mr. Maxton
rose——

§ Mr. Stewart
Time is pressing. I hope that the hon. Gentleman will be brief.

§ Mr. Maxton
I shall be brief. Will the Minister tell us why, if the matter was given this careful thought and having asked the advice of the chief valuer, the board of governors and the SED did not wait until that advice had been received before taking the decision?

§ Mr. Stewart
At that point the advice of the Chief Valuer had been received. The hon. Gentleman is confusing two different matters. It was on the basis, in particular, of the investment appraisal that the decision was taken.
The Chief Valuer thought that all or part of the property might fetch a higher price at a later date, but he had not suggested what that price might be or how long it might take to market the property. On the basis of the careful consideration that was given, not only by the SED but by the Jordanhill college board of governors, that was a reasonable and justifiable decision to take. If the Government had decided to keep the property empty, without any guarantee of a preferable customer in the future, there would have been considerable criticism of that in the House tonight.

§ Mr. Dewar
Before the Minister sits down, will he say a word about the meaning of the last sentence of paragraph 5, which the hon. Member for Banff and Buchan (Mr. McQuarrie) said meant nothing?

§ Mr. Stewart
That sentence is self-explanatory. The guidance will ensure that the recommendations of the Halliday report are appropriately applied. That is clear.
I want to answer one issue that was raised by the hon. Member for Falkirk, West, who is not present, about Mr. Pate's role. It is clear from the evidence taken by the PAC that Mr. Pate behaved with complete propriety. When the 168 question of appointing his firm to act for Jordanhill in the sale of Hamilton came up, he declared his interest and played no part in discussions on the matter, either on the Jordanhill governing body or within his firm. I see that the hon. Member for Garscadden confirms that the Opposition formally accept that position.
The key point is whether or not the market was tested. I have put evidence that it was before the House, and that is the point that my hon. Friends have consistently put forward. The £20 million figure is a complete red herring. The £6 million figure applied in ideal circumstances, and ideal circumstances did not apply.
It is understandable that the hon. Member for Hamilton, and the hon. Member for Cathcart, who was employed at Hamilton college of education, should have strong feelings about the closure of the college. Those feelings were made clear at the beginning of the debate when I was kindly reminded of some previous speeches that I had made. The hon. Member for Hamilton has sought every opportunity to challenge the decision of my right hon. Friend the Secretary of State. He is entitled to support the criticisms made in the PAC report of some of the detailed procedures which were followed by the SED in the arrangements for the sale of the property. As indicated in the Treasury minute published today in response to that report, we entirely accept that the Department made some errors in procedure and that revised guidance should be issued on the sales of public property.
However, the hon. Gentleman spoilt his case tonight by overstatment, exaggeration and unworthy speculation about ministerial motives. Criticisms have not been confined to the Department's errors in procedure. There have been quite unsupported accusations against my right hon. Friend the Secretary of State and my hon. Friend the Member for Edinburgh, Central (Mr. Fletcher), now Under-Secretary of State for Trade and Industry. We are convinced that the decision to advertise the property for sale was correct and that strenuous efforts were made by the selling agents to market the property and to find out what change in use would be acceptable to the planning authority. I have not talked about that point because it was not raised in the debate. My right hon. Friend the Secretary of State was fully justified in his decision to accept the offers made. The buildings are now in productive use as a private school and will provide much needed flats in Hamilton for those who wish to buy them. That is an acceptable outcome, and it ought to be an acceptable outcome to the House.