§ Lords amendment: No. 81, in page 70, leave out lines 43 to 45.
§ Mr. David HuntI beg to move, That this House doth agree with the Lords in the said amendment.
§ Mr. HuntThese amendments were agreed with the Opposition in another place to improve part V of the Bill which deals with the interests of local authorities in companies. It is our intention to introduce an order setting out the rules for those local authority companies. We have invited responses to the consultation by early December and it is our intention to draft the regulation as soon as possible thereafter.
§ Mr. O'BrienAs the Minister explained, part V of the Bill deals with companies in which local authorities have an interest. In Committee and in the other place questions were put to Ministers about issues that are not on the face of the Bill. Part V has consequences for the operations of local authorities which are encouraged by the Government to enter into company organisations for economic development, trusts, charitable trusts, housing associations and for recreation and leisure. Many companies are formed through the co-operation of local authorities and private organisations. Part V raises questions which must be answered.
We are worried about the influence of the Secretary of State on part V through regulations. In this House and in the other place the Government did not bring forward any substantial evidence of abuse by local authorities and the companies with which they are involved.
According to part V, companies that fall within the control or influence of a local authority will count against a local authority's capital allocations and thereby raise substantial obstacles to working with the private sector to promote economic regeneration and to conserve local employment. We would like to see part V withdrawn.
We have noted that the Minister referred to the fact that some agreement has been reached, so I hope that he will be able to respond to some points that I want to make now. In Committee I referred to a company that might be formed in west Yorkshire in relation to the mining museum established by the local authorities in Wakefield, Kirklees and the former South Yorkshire county council and the West Yorkshire county council. We asked how the Bill would affect the company that has been formed to run that mining museum, and the Minister replied:
Our officials at the Department of the Environment are ready, willing and waiting to give advice on the structure of the trust. At present I do not know what it is. That is nobody's fault. Perhaps the hon. Member for Normanton will ask the secretary of the trust to outline it in a letter to my right hon. Friend the Secretary of State, or to me, and we shall do whatever we can to help. We are also prepared to meet representatives of the trust."—[Official Report, Standing Committee G, 11 April 1989; c. 767.]The representations were made and we were advised that the trust should move from being an involved company to an arms-length company—or one that would not include local authorities to the extent that it had previously.In the House of Lords, Lord Hesketh was asked about the difference between a controlled company and an 803 influenced company. Officers of the Department advised the trust to which I referred to move from being a controlled company to being an influenced company. What are the benefits of that change?
In the House of Lords, the Minister was asked:
Can the Minister give more information about the difference between a controlled company and an influenced company? The exact difference is not made clear in the Bill. I particularly have in mind the Yorkshire mining museum which at present is a controlled company but has already been advised by the Minister in another place that it might be advisable to consider restructuring. But would restructuring mean for such a company that the restrictions and controls imposed upon it would relate only to the borrowing controls? Would all other financial controls be removed from such an influenced company?Would an influenced company still be eligible for a share of local authority provisions through the European Community? Would such a company be able to continue to take advantage of the services of a local authority such as specialised legal, financial, administrative and personnel services?" —[Official Report. House of Lords, 24 July 1989; Vol. 501, c. 1256.]Those questions have been asked in this House and in the other place. Lord Hesketh promised that they would be answered in a consultative document which was issued last month. However, only one question was answered. Will the Minister now explain the real consequences of the change from a controlled company to an influenced company? It can affect many companies that are formed and influenced by local authorities. The answers to those questions will help local authorities to decide how to form their interest in certain companies.I should like to probe many other issues, but, in view of the lateness of the hour, if the Minister is prepared to answer my questions we will at least obtain some satisfaction.
§ Mr. A.. J. Beith (Berwick-upon-Tweed)I should like the Minister to consider the question of building preservation trusts—an issue which was fully and effectively raised by Lord Montagu of Beaulieu in another place. Building preservation trusts represent valuable self-help in the preservation of our architectural heritage. In my constituency, the Berwick preservation trust is one of the pioneering bodies in this matter. Most are known as revolving trusts, which carry out a project, sell the resultant improved building, and use the capital on another project, thereby ensuring that many historic buildings in historic towns are saved and that capital continues to be used for further restoration work. That is a million miles from the Government's various anxieties to which the Bill is directed. Leaving aside for a moment whether those anxieties are justified—I seriously doubt it —how will the Minister ensure that building preservation trusts' work is not impaired by provisions which were conceived without reference to their problems and which bore no relation to the world in which they operate?
My greatest fear is about borrowing powers. Companies caught by the definition in part V of the Bill will be subject to the regulations in part IV affecting local authority borrowing. Many building preservation trusts have a close association with their local authorities, to which they look for practical help and often like to have a good representation of local authority people on them.
The end result of the provisions could be that borrowing by a controlled or influenced preservation trust from any third party, including the architectural heritage fund, would count against the relevant control total for the 804 local authority. Therefore, the local authority will have to approve the building preservation trust's borrowing in advance and to have a degree of influence over it that the, authority would never have sought in the first place. If the provisions are still in that form, and if the Minister cannot give me some fresh assurances, he will end up with local authorities exercising more influence rather than less and doing so in a way that they would not have sought. In addition, the work of preservation trusts in attracting new funds and capital into the projects will he impaired.
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I know that the Minister in another place, Lord Hesketh, gave assurances that the matter should be discussed. Indeed, a meeting was held in August between the Department of the Environment, English Heritage and the various other bodies involved but, as far as I am aware., we are not a lot further forward except that we know that the Minister may make some kind of exemption under the powers that have already been referred to. However, it would have been much more satisfactory to have a class exemption, exempting the whole category of building preservation trusts. Anything less than that, which still leaves the borrowing powers under some threat of involvement with local authority borrowing in general, is not satisfactory. I am sure that the Minister does not want to harm the work of building preservation trusts, and I wish that he would make it absolutely clear that he will disentangle them from the Bill.
§ Mr. David HuntI reassure the hon. Member for Berwick-upon-Tweed (Mr. Beith) that I recognise the important work done by building preservation trusts. We have said that we shall exempt building preservation trusts that are registered with the architectural heritage fund from being influenced companies. I understand that the exemption has been accepted by English Heritage and the architectural heritage fund as removing any such problems for such companies. If the hon. Gentleman would like to raise any other points with me, perhaps he will get in touch with me after the debate.
I can advise the hon. Member for Normanton (Mr. O'Brien) that I have the consultation paper with me. Perhaps the hon. Gentleman missed annex D, which sets out clearly the differences between influenced companies and controlled companies. There are eight points on influenced companies and five points on controlled companies operating at arms length, with a further four points on other controlled companies. If the hon. Gentleman will look at annex D, he will find that the provisions are set out simply. If he has any further queries, perhaps he will let me know. That would be better than my reading out the whole annex and putting it on the record.
I understand that my Department's officials had a meeting with the trust about the West Yorkshire mining museum. We understand that the trust is content with the position as explained to it. The Department did not, of course, advise on any particular action because it is for the company to make up its own mind, but the consultation paper that we issued clearly sets out the trust's position. A copy has been sent to the West Yorkshire trust.
I readily accept that these are technical matters. As the hour is late, I shall simply advise the hon. Member for Normanton that, if he would like to raise any further points, I should be glad to hear from him and perhaps we can deal with them at a later stage.
§ Mr. O'BrienI am grateful to the Minister for taking the trouble to introduce the consultation document. I appreciate its reference to interpretation. However, two points are not made clear in the document. One is the question of the availability of EEC funds for charitable trusts, and in particular for the West Yorkshire mining museum. Secondly, would such bodies still be able to use the expert knowledge of local authority officials, such as their legal, personnel and financing people, without breaching any of the provisions of the Bill?
As the consultation document does not make those two points clear, I should be grateful if the Minister or his officials would take the time to consider them and to let me have their observations.
§ Mr. HuntI believe that it is clearly set out, but I shall write in more detail to the hon. Gentleman.
§ Question put and agreed to.
§ Lords amendments Nos. 82 to 111 agreed to.