HC Deb 16 June 1994 vol 244 cc836-42
Mr. Morgan

I beg to move amendment No. 19, in page 103, line 29, leave out 'nor more than 7'.

Madam Deputy Speaker (Dame Janet Fookes)

With this it will be convenient to discuss also the following amendments: No. 20, in page 103, line 30, after 'by', insert

?the principal councils in consultation with'. No. 21, in page 103, line 32, leave out 'may by order alter either of the numbers' and insert ?may with the agreement of a majority of the principal councils by order alter the number.'.

Mr. Morgan

Although this is the final group of amendments, I do not feel that we can simply whistle through the provisions to which they refer. They relate to issues that I touched on briefly when discussing Government amendment No. 87, which provided a foretaste of the questions raised by the establishment of the residuary body.

We made certain demands in Committee. This is our first attempt to return to the theme in a big way, and our last opportunity to put right the difficulties encountered by the Government in their attempt to bridge the gap between the definition of quangos as quasi-autonomous nongovernmental organisations, or non-departmental public bodies which are listed in "Public Bodies"—an annual Government publication—and the definition to which the Secretary of State and the Parliamentary Under-Secretary are trying to extend it. They suggest that a quango is something that they define as a quango; a body created by local government could be a quango as well.

That is an absurd proposition, but it is very relevant to the amendments. Quangos are organisations that are listed in "Public Bodies", the Government's bible, because their chairmen are appointed by the Secretary of State and because various other provisions apply. Certain other bodies probably ought to be listed. Several hundred are included, but it clearly is not complete. Occasionally organisations "drop out", as happened with the Commonwealth Development Corporation, which was removed about two years ago when it was deemed to be a commercial trading organisation.

What about the residuary body for Wales? We do not want that to be a quango in either function or name; we want it to be what the Government want to present it as. They may want to present it as not being a quango, but we want it genuinely not to be one. We do not want it to be completely under the control of the Secretary of State; we do not want the Secretary of State to determine the appointment of its chairman, its membership, its powers or the length of its life, or to be empowered to shrink, maintain or extend its powers.

The Bill gives the Secretary of State Henry VIII powers to extend the residuary body, terminate it and move it sideways, forwards, upwards and downwards. It is undoubtedly his creature. Given the way in which it is currently defined in the Bill, it will certainly be a quango —although the Government do not want it to be recognised as such. Our amendments seek to remove it from any such danger by giving the Secretary of State some powers, but requiring the exercise of those powers to be conjoint with those of the new principal councils.

This is, after all, intended to be the body that will deal with the property of the present quantum of local authorities in Wales, if it is determined—after the passage of the Bill, and by means of various orders and subsidiary legislation—that that property is not to be properly housed among the new authorities. Cardiff-Wales airport is the outstanding example. We are concerned that its future lies with the residuary body.

Mr. Redwood

I hope that the current owners of Cardiff airport will come to an arrangement on its future, which could include private capital and a greater role for its management, which would solve the problem. If they do not, it will pass to the residuary body. I do not intend to split the shareholdings among all the new authorities that could have a claim. It is in the hands of local government, and I hope that it solves the problem.

Mr. Morgan

I am grateful, in one sense, to the Secretary of State for his attempt to clarify the matter, although not for the content of his intervention. He is placing a sword of Damocles over local authorities. Democratically elected councillors on unitary bodies, who have spent countless time building and fighting for a financial commitment to Cardiff-Wales airport, are being told, "If you don't sell it, you certainly won't see the benefit of it afterwards." It will be placed under the dead hand of a residuary body which, without amendments Nos. 19, 20 and 21, will be under the control of the Secretary of State.

In the next few months, those councillors will not be able to wait for an appropriate time to undertake the task that the Secretary of State has talked about of bargaining, on a willing buyer, willing seller basis, with private capital through privatisation, a management buy-out or the process that is sometimes known as Prescottisation—an option that the Opposition's employment spokesman adumbrated as an alternative to privatisation before the last general election, whereby private capital is used in transport projects to ensure that they are not restricted by the public sector borrowing requirement.

Such a process cannot be undertaken if it is known that the project must be shovelled off to management within 12 months rather than accepting more appropriate timing, which might be in the interests of the buyer, the investor, if it was taking a minority stake, or the seller—the three democratically elected councils of Mid, West and South Glamorgan. That is unsatisfactory because it puts all the pressure on the three Glamorgans to get shot of the airport now, even though they would receive a better price if the threat of placing it under the control of the residuary body were removed.

If the Government persist in that intention and cannot be dissuaded, we will face the problem of their in effect nationalising Cardiff-Wales airport. The Government are opposed to nationalisation, but that will be the result if the Bill is enacted and the Secretary of State executes his threatened action, because a satisfactory price will not be obtained by the three present owners with a sword of Damocles hanging over them, and control will pass to the residuary body—all of whose members will be provided by the Secretary of State—from the airport's municipal owners.

That would probably be the first nationalisation that the Secretary of State for Wales has undertaken. When he got home that night and told his wife that he had nationalised an airport in Wales, the dog would bite him. We are trying to get him out of that difficulty by asking him not to make the residuary body completely responsible to him for its membership and the power to terminate or extend its life. He should make it clearly a transitional body by means of which powers may be passed from one group of democratically elected councils to another group of democratically elected councils. The transitional bodies should contain a majority of democratically elected councils. That would be the solution and it would enable the Secretary of State to avoid being bitten by his dog when he gets home after inadvertently nationalising Cardiff-Wales airport.

I ask the Secretary of State to give serious consideration to his future state of health, in relation to either his leg or his backside, and accept our amendments to the clauses dealing with the residuary body.

Mr. Rowlands

We cannot just nod through the clauses dealing with the residuary body without trying to discover a little more about the nature of the animal.

Mr. Morgan

The dog.

Mr. Rowlands

I do not know whether it will be of that character, but it will be an interesting animal.

The only precedents that we have for this type of body are the residuary bodies created under previous local government reorganisation in England on the break-up of the metropolitan authorities. I took the opportunity to look at the annual and final reports of a handful of residuary bodies to discover what sort of animal it is likely to be. I shall give the House the benefit of this modest degree of research.

Each of them turned out to be a huge property company. For example, the West Yorkshire organisation took over the powers of West Yorkshire metropolitan council. It took over about 28,000 deeds and 800 sites worth about £20 million, which it sold for £33 million, handing the distribution to the five district councils. At its peak, it employed 219 people, full time and part time.

That is one authority, dismantling one unit of local government and distributing the powers to five others. We are talking about a residuary body that will take over the surplus land of eight county councils and 36 district councils throughout the Principality. It will be one of the largest property companies in Wales. It will have enormous power. It will have the power to levy. However, one hopes that after the experience of the West Yorkshire organisation, the levies will be less than the distributed proceeds. The Secretary of State may nod his head. The reason for the success of the authorities at that time is that they coincided with the big property boom. The years 1986, 1987 and 1988 were a good time to get one's hands on property and then sell it off.

I do not think that the new residuary body will be operating in the same type of market. [Interruption.] I hope that it does not, because it would have a disastrous effect on inflation. I thought that the Government did not want a boom and bust economy. The Secretary of State seems to be backing a boom and bust economy. Is this another division between the Secretary of State and the Chancellor?

We are right to draw attention to the amazing character that the residuary body will have. It will be dealing with sensitive issues. I do not know whether, like the West Yorkshire authority and others, it will handle the pension funds for a time. I assume that it will not. I assume that it will take surplus revenues, as opposed to just surplus land and property, from every one of the existing district and county authorities. It will also have in its possession a large number of sensitive civic buildings that might be surplus to requirements. My hon. Friend the Member for Cardiff, West (Mr. Morgan) has mentioned one. I am thinking of the Mid Glamorgan county council office. Will that be taken over by a residuary body and sold off? Will we have a Greater London council re-run in the middle of Cathays park?

As I have said, we should not just nod this organisation through. I have a practical suggestion to make to the Secretary of State. I can see the need for an organisation, but I wonder why he needs to create something new.

My hon. Friend the Member for Cardiff, West has suggested one model that I suspect the Government will refuse. So why not use the Land Authority for Wales as the main body? If it is to be what I suspect, which is a five-year property company, why create a huge new organisation when there is in existence a rather successful and well-organised body? I should not really draw attention to it in case the Secretary of State decides to look at it. It was my creation and I am proud of it. Way back in 1974–75 it survived the abolition of the community land legislation. It has done a very useful job alongside the Welsh Development Agency. Why does not the Secretary of State use the Land Authority for Wales as the main vehicle for carrying out that function, given that, in many cases, it has created sensitive and good working relationships with local government? It will not be a completely new animal. I hope that the Secretary of State will accept the model suggested by my hon. Friend the Member for Cardiff, West, but, assuming that the Government do not accept that model, perhaps the Secretary of State would consider the practical solution of using the land authority.

We shall be very interested; we shall watch with great care and scrutinise the new body, which will be an enormous property company, handling large numbers of parcels of land from the four corners of the Principality, at a time when it may not be the easiest thing in the world to sell that land and achieve values such as those obtained by the residuary bodies created under previous legislation.

9.15 pm

What will be the method of redistribution? How are the proceeds to be redistributed? It was not difficult for the property of the West Yorkshire body to be distributed among five district councils. In this case, the residuary body will be acquiring properties from 36 councils and eight counties and distributing them among 21—I cannot remember the exact number—unitary authorities. Will the method of distribution be related to the location of the land and property? Will the proceeds stay in the community, or will there be some form of pooling of the resources and an equalisation of the distribution of proceeds? Those are big and serious issues of public policy and before we nod the body through, we ought to find out a little more about the Government's thinking on it.

Sir Wyn Roberts

We discussed the residuary body fairly extensively in Committee. The hon. Member for Cardiff, West (Mr. Morgan) argues that it is a quango, but it has many of the characteristics of a local authority for the simple reason that it has to take over local authority contracts, deeds and so on.

We certainly do not accept that it would be right for the new councils to appoint all the members of the residuary body or for there to be no limit on the number of members, as the amendments suggest, for the following reasons. Of course, the body will at times have to take difficult decisions on competing claims for an asset, for example, or on whether an asset is surplus. If all the members were appointed by councils, it could give rise to conflicts of interest. That is therefore one of our objections to the proposals in the amendments.

The residuary body will have limited functions and, indeed, a limited life. It will advise my right hon. Friend the Secretary of State on the transfer of property and the disposal of surplus assets. It would certainly make the body unwieldy if we had rather more than four to seven members, which we think would suffice. Having said that, we do not want the residuary body to be dominated by councillors, as proposed in the amendments. My right hon. Friend is open to suggestions—without commitment, of course—as to the membership. He is quite open to any suggestions from local authority associations or individual councillors, as well as from hon. Members.

The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) raised a specific point about the disposal of assets, and especially of proceeds. The proceeds will go to the new local authorities which have taken over from those authorities whose assets have been sold. Therefore, in the hon. Gentleman's words, the proceeds of the assets will stay in the area served by the authority from which the assets have been sold.

Mr. Morgan

The Minister of State said that the residuary body had some of the characteristics of a local authority because it would oversee some local authority contracts, but he omitted to mention that it would have one characteristic which is definitely not shared by local authorities: none of its members will be elected. That is a significant distinction which he chose to slide over rather quickly. Perhaps an authority with no councillors is the ideal Tory authority of the future.

The Minister of State also said, incorrectly, that the residuary body would have a limited life. If he reads the small print, he will find that the Secretary of State can extend or shorten its life as he wishes. The Secretary of State has Henry VIII powers to do as he wishes. He could, for example, decide to wait for a property boom. The Minister implied that it could be wound up neatly and that the danger of putting so many powers in the hands of the Secretary of State was therefore far less significant than it really is. The Secretary of State's powers in respect of the residuary body are almost infinite. We are not happy about the way in which it will operate, despite the olive branch so characteristically offered by the Minister of State.

This may be my last opportunity to pay my respects to the remarkable actuarial parliamentary longevity of the Minister of State, so I do so now. His record for holding the same office without being sacked or promoted is similar to the record length of time it took for the Cardiff Bay Barrage Act 1993 to pass through both Houses of Parliament. He and I share the latter record, so we can both appear in the "Guinness Book of Records". The Minister is known throughout the land for his ability to plough indomitably through his briefs and, if he is retiring shortly, I am sure that he has been offered the life presidency of the Freedom from Dyslexia Association. We look forward to the Minister's return to commercial television, the world from which he came. He would be the ideal host for a game show such as "The Price is Right" in Welsh, but I am sure that he will find suitable cultural pursuits. In any event, we shall miss his contributions enormously.

Amendment negatived.

Amendments made: No. 87, in page 107, line 43, leave out from '17.' to end of line 45 and insert 'The Residuary Body shall be included among the authorities to which the Parliamentary Commissioner Act 1967 applies.'.

No. 88, in page 109, line 9, leave out 'enactments to' and insert 'circumstances in'.

No. 89, in page 109, line 38, leave out from '(1)(b))' to 'and' in line 40 and insert ?and 443 (local authority contributions to mortgage costs);'.

No. 90, in page 109, line 42, at end insert— '. The Residuary Body shall be treated as a housing authority for the purposes of sections 444, 452 and 453 of the Housing Act 1985 (provision in connection with local authority mortgages).'.

No. 91, in page 110, line 1, leave out from '88)' to end of line 2 and insert '(retention or resumption of land required for public purposes)'.

No. 92, in page 110, line 21, leave out 'Section MA of and insert 'Paragraph MA of Schedule 2 to'.

No. 93, in page 110, line 21, after '1971' insert '(official pensions)'.—[Mr. Redwood]

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