HC Deb 02 November 1998 vol 318 cc651-60

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

9.48 pm
Mr. Mike Hancock (Portsmouth, South)

I am delighted to have this opportunity to raise an issue that is important for the people of Portsmouth and south Hampshire; indeed, I am sure that people in much of the United Kingdom will be interested to know about it. I am also delighted that we have a few extra minutes, as the hon. Members for Gosport (Mr. Viggers) and for Portsmouth, North (Mr. Rapson) have said, either to me or to the local newspaper, that they want to contribute to the debate—we would have been stretched if we had had only 30 minutes.

In March 1995, no one in the area opposed the decision by Portsmouth and Gosport to make a bid for funds for a landmark project. The bid offered a great opportunity for jobs, not only in the short term—in construction and in the many different aspects of the scheme—but in the long term, as a result of the development of new and existing attractions. As the then leader of Hampshire county council, I strongly supported the bid; indeed, I convinced my colleagues on the council to invest a great deal of money in the schemes, particularly in those in Gosport.

The schemes were put together in such a way that the community and many members of the council had little real input. They were dreamed up by people who had their vision and then brought other people in. No one can deny that those involved in the initial concept formed a close-knit circle—that may be how such ventures have to start, and I am not suggesting that there is anything wrong with it. However, at every stage, the public, especially in Portsmouth and Gosport, should have been brought in on the act—they needed to have a positive and meaningful share in the proposals. That did not happen.

There could be few doubts about some aspects of the project. Someone needed to step in to redevelop the older and more rundown areas of Gosport, particularly the former service establishment at Priddy's Hard. Realistically, only the millennium package would provide the opportunity for such investment.

There was also a need to rekindle development in the less rundown former Ministry of Defence establishments in Portsmouth. The Mary Rose, HMS Warrior, HMS Victory and the naval museum needed to be rejuvenated so that the heritage area could sustain the number of visitors that we had come to expect and that it had come to depend on. For the area, the millennium package was vital.

It was suggested that we needed something to spark the imagination of the Government, the nation and—most important—the Millennium Commission. The small team came up with the idea of a tower, although no one then knew what it would look like. We saw artists' impressions of cross-channel ferries sailing by the tower through a gigantic arch of water created by water cannon across the harbour between Portsmouth and Gosport. It all looked very nice.

I had been in local government in Portsmouth for nearly 30 years, and was leader of Hampshire county council. I had been a trustee of the naval museum and the Mary Rose, and had been actively involved in raising money for all the projects in the heritage area. Indeed, I had convinced the local authority to give the best part of £1 million to help the heritage area. However, I doubted whether a tower would be a viable proposition in that area, for reasons that I stated loud and clear.

To succeed, a tower would need to attract visitors, but the area contained a number of competing activities—people with limited resources would have to choose what to spend their money on.

As I know from family experience, towers can be divisive. Some people like to go up them and some do not. In a family of four, two may want to go up and two may not, as I found with my family. What does one do?

A day out in the heritage area is a wonderful experience, but it is not cheap. One needs the best part of the day, and the entry fee for a family of four plus buying a small snack at lunchtime costs £60 or more. Not too many families can do that very often. The tower would be another attraction in the area. It will have to be self-sustaining and viable and will need an awful lot of visitors.

I raised strong objections to the tower, which was first suggested in March 1995. Construction should start in a few months, but the planning application that is before the city council tells us nothing.

On Friday, I asked the planning officer to tell me what the tower was to be made of, what colour it would be, what maintenance would be necessary and how long it would last, but he could not. He said that we would have to learn all those things between now and when the planning committee meets. We must bear in mind the fact that the council has just signed a deal with the Millennium Commission to build the tower at a cost of £23 million. How can anyone be so specific, if we do not know what the tower is to be made of? When the concept was first agreed nearly three years ago, the Millennium Commission was to have a 35 per cent. share, but it has now increased it to 68 per cent.

The history of the concept is interesting. The then Secretary of State for National Heritage, the right hon. Member for South-West Surrey (Mrs. Bottomley), visited Portsmouth—it was one of many visits, as she passed the site whenever she went to her holiday home on the Isle of Wight, and I am sure that she greatly enjoyed the trip out of Portsmouth harbour—and made great play of the fact that the tower should be of national and international significance. She likened the competition that should be held to design it to that held when Trafalgar square and Nelson's column were created. I think she said 144 people submitted bids to build the column and create the spectacle in Trafalgar square. She felt that Portsmouth deserved a similar competition. However, we did not have it.

Well-known architects such as Sir Norman Foster, Michael Wilford, who took over from James Stirling, and Santiago Calatrava, who built the Barcelona Olympic tower, all expressed interest in the concept, but none was asked. The city council and the developers offered the people of Portsmouth and the surrounding area three options. The developer visited me in my offices in Parliament street, and told me that he did not like one of the three. He told me which one he preferred, and said that the third had been included to give people three choices.

Funnily enough, the private sector developer, Berkeley, did not get the design that it wanted, as the public chose the spinnaker. However, the public were not asked whether they wanted a tower at the entrance of Portsmouth harbour. They were simply asked which one of the three designs they preferred.

No one objected to any of the other aspects of the millennium scheme. Many of them, such as the boathouse project, Priddy's Hard and the millennium walkway, are essential to the growth of the areas concerned, and the potential is enormous, but most people in Portsmouth, when asked about the tower, say that it is a waste of money. I would have said so had I not been a member of the council. I would have said that the money could have been better spent on hospitals, schools and many other things.

I had dozens of letters asking me to get the commission to spend the money on other things, but we were not offered a choice. The city council said, rightly, that the commission had made it clear that the money was for a tower, so a tower it had to be.

At the same time, the Ministry of Defence was releasing the Gunwharf site at HMS Vernon, and it was intended that the tower should be part of the development. The millennium scheme and the development of Gunwharf were so interwoven as to be inextricable. I asked the Ministry of Defence about the disposal of the Gunwharf site. I am very disappointed—

It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

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

Mr. Hancock

The reply from the Under-Secretary of State for Defence said: Offers for the Gunwharf site were sought on the basis of open market value and took into account the Planning Brief for the site previously provided … The bid chosen was considered to provide the best value for money. I am withholding information on the details of the sale receipt under exemption 14 of the Code of Practice on Access to Government Information. I find that outrageous from a Government who came into office saying that were for open government. How on earth can the sale receipt for a piece of public real estate be withheld? What on earth can be the commercial significance of that disposal?

Berkeley got the prime site that it wanted. Until March, April, May this year, Berkeley was expected to build the tower. The city council was stupid enough to sign an agreement with the Millennium Commission saying that it was committed to building a tower, without having Berkeley signed up to build it. Once the commission had us on the hook and had checked the projects that Berkeley, the city council and others had submitted, I started to query the figures. I was told that the figures had been put together professionally, and that Berkeley, the city council and, more important, the commission were happy with the figures.

I have written well over 200 letters to the city council, the commission and others, to try to get the answers to questions, but those answers have been difficult to come by. I am a member of the city council, and I have not been able to get straight answers without writing at least three times, on some occasions, with the same question.

When I challenged the figures, I was told that there was nothing wrong with them. I wrote to the Millennium Commission on 11 February asking what it thought of the figures, given that the tourism market was very vulnerable. The commission had always maintained that its role was to be extra vigilant with public money. I wrote to the chief executive to tell him that I would be raising these points, and he had the opportunity, if he had wanted to, to contact me today.

The chief executive of the commission wrote: The testing and assessment of the visitor impact of the various proposed projects, and the impact of each project on the others, is primarily a matter for the Renaissance promoters. As you know, an assessment has been done, it was put to your local authority some time ago. It is the Commission view that that assessment was reasonable. The commission allowed the development to continue, but it did not know that, at the same time as that letter was being written to me, Berkeley, the developer, had told the city council that it no longer believed the figures.

In July, Berkeley wrote to the city council: During the course of our discussions, however, we agreed to work in co-operation with Portsmouth City Council and to be helpful as possible in terms of helping Portsmouth to secure the building of the Tower … we offered a contribution of £3 million". They were offering £3 million because they wanted to walk away.

In the same letter, the developers say: At that meeting we made it absolutely clear to you that we considered that the visitor numbers produced by Deloitte & Touche for the Tower were badly flawed and that the Tower was not financially viable. Those people were set to make millions of pounds out of the development, with the tower right next door as the landmark project. The developers had verbally committed themselves, and certainly the city council innocently believed that they were going to build it. However, the developers walked away once they had scrutinised the same figures which the Millennium Commission assured me—and, I suspect, their commissioners and the Secretary of State—had nothing wrong with them. The developers were even prepared to offer £3 million to the city council as a consolation.

We were then left with no private finance, except for the £3 million, and some land for the scheme. What could the city council do next? Where could it get the money? Nearly 200 press releases have been issued by the city council about the project since 1995. The amount of spin that has been put on the tower project would make Shane Warne, the Australian spin bowler, look professionally inept.

Within weeks, the press releases contradicted themselves. One week it was claimed that 4,000 jobs would be created, and the next it was 3,500. Ludicrous claims were made, including that the Fine Arts Commission was to be consulted on the design of the tower so that we would not get a second-rate design. It has never been asked in three years for its opinion on the tower. Why not? Press releases sent out by the city council claim that the Fine Arts Commission would be a key player in ensuring that the tower would be the best we could have.

We were left with no private money, except for the £3 million, and a very difficult problem for the city council. It tried to attract other private finance. It could not do so, so it went back to the Millennium Commission, which suggested the downgrading of the whole scheme from more than £40 million to £38 million. The water feature was felt to be impossible to achieve and the only satisfactory alternative was a mobile water cannon mounted on a barge. The Millennium Commission felt that that was unacceptable, so it turned it down. Car parking was reduced, and sculptures and other landscaping around the heritage area were removed from the plan.

The Millennium Commission said that it would put more money into the tower, the cost of which escalated from 35 per cent. of the project to 68 per cent. That meant that the tower would cost the largest sum of any single project in any landmark scheme. The commission is basing that investment on the assurances given by Portsmouth city council. I know that the city council wants the tower to succeed, and I do not want to see it left in a mess. I represent too many people who find it hard enough to get through the week, without having to pay bigger bills to fund any unsuccessful aspect of the project. Once it is started, there is no alternative to success.

Two Secretaries of State have visited the area, and they were both enthralled by the concept. Both have given substantial support, although one would have liked to see a competition and the other, the current Secretary of State, did not seem to be too interested in any criticism of, or possible liabilities arising from, the scheme.

The purpose of the debate tonight is to try to obtain from the Minister firm assurances for the people I represent that she will not allow Portsmouth city council to be left holding a very expensive baby, in the short, middle or long term. We are talking about a 500 ft-plus tower that people can go up and down, costing £23 million. The project remains to be built, and the original concept was for design, building and operation in a single package by a single partner of the city council—Berkeley Homes. None of that has happened. Now, the tower will, for the first time, be in the ownership of the city council. That is an amazing and enormous liability for the next 50, 75 or 100 years. No one expects the tower to come down in 25 years. It will be there for a significant period, and it will be an continuing liability.

Portsmouth city council is negotiating with two types of people. It needs someone to build the tower for £23 million, and I have been assured that there is a good chance of a fixed-price contract. The council is also seeking someone to operate the tower at no cost to the council. I wish it luck. Anything short of that would be totally unacceptable. The Government must see that that cannot be allowed to happen. When the Public Accounts Committee discussed landmark projects, it said that no local authority should be left with a continuing liability, as that would be unfair, and not sensible.

If building begins and the finances do not run according to plan, I want the Millennium Commission or the Government to support the costs. There is no guarantee that the tower can be built for £23 million. We do not even know what it will be made of. Will it be steel and concrete? Will it be concrete alone? We do not even know what will be on the outside. What we do know, however, from our experience in Portsmouth at three schemes—a housing development at Portsdown park, the Pyramid leisure complex and the Tricorn development—is that building projects can cost local authorities a great deal of money and heartache. The people of Portsmouth will not forgive the council, any of the city's politicians or the Government if the scheme goes wrong, leaving them holding a very expensive baby.

As the agreement stands, the Millennium Commission can step aside like Pontius Pilate, self-righteously saying that its job is to protect public money, and that, once an agreement is made that the city council should deliver the project, its obligations to safeguard public money and the interests of the people of Portsmouth cease. Portsmouth city council would be left alone to be responsible, because it had signed an agreement to build the tower.

The tower is too important to be regarded as a matter for a political row between colleagues, as the hon. Member for Gosport has suggested in the local paper. What I am saying is too important to be dismissed as waffle or grandstanding, as it has been by the hon. Member for Portsmouth, North in the local paper. The matter is important because people have not been consulted, except by way of press releases that contradict themselves over a three-year period and that, in some cases, give nothing but misleading information.

Portsmouth has significant problems relating to education, social services, housing and many more policy areas. Every precious pound that can be squeezed from the Department for the Environment, Transport and the Regions is needed to fund local government services. We need every penny we can get. The city succeeds because of its successful ferry port, but nothing should be allowed to jeopardise our fragile financial situation, and we are no different from Gosport or any other local authority area in that. We must maintain the stability of our finances, and that can be done only if someone gives some assurances that will remove the burden from Portsmouth city council.

If we have to have a tower—and I am not convinced of the need for it—it must be something of which we can all be proud. It must not require other things to be added to it to make it viable, so that it is something short of an Alton Towers feature. It should be publicly accessible, it should be something that we can be proud of as a nation and the people of Portsmouth should not have to pay for it in years to come. I hope that tonight the Minister will lift much pressure from me and, potentially, from the people of Portsmouth.

10.14 pm
Mr. Syd Rapson (Portsmouth, North)

I have a different story. Although the tower is not in my constituency, the city council covers a tightly knit area. I represent the people of Portsmouth as much as the hon. Member for Portsmouth, South (Mr. Hancock) does. The hon. Member for Gosport (Mr. Viggers) and I speak with the authority of the local authorities involved in the scheme.

I have been a local councillor for as long as the hon. Member for Portsmouth, South. We are local government people as well as Members of Parliament. I believe in local government. I believe that democratically elected local government has the right to decide planning for local people. It is not the job of Parliament to try to overcome that, as if we are the guardians of everything that goes on and can overrule what people want locally.

The project was originally dreamed up as a landmark scheme. The tower and the water fountains were an important part of the scheme that was chosen. Berkeley did not do enough investigation into visitor numbers. It is basically a building company. When it did its homework, it found that the numbers were not quite correct. The city council had to re-evaluate the scheme, which it did recently with the support of the Millennium Commission. The commission crawled all over the figures to ensure that everything was absolutely correct.

The commission insisted that the city council underwrote the cost of the scheme. The city council did that, although it has operators ready to guarantee to underwrite the commercial risk involved. Delicate negotiations are going on, which is why things are kept fairly confidential. The city council has a millennium sub-committee, which has all the information, with a representative of the Liberal Democrat group on it. All the information is with local councillors.

The scheme is viable. An operator is ready to come in to run the tower. I must explain one confusing point. The original idea was that a company would take on the whole scheme and had to build a tower that would cost a considerable sum. It had not worked out the figures and has drawn back, offering £3 million back. The package has been rearranged with commission money and other moneys. The tower will be built within the money envelope that we now have. The only difference is that the operator does not have to find the money for construction, only for operation. It can do that.

This is a local government issue. We have total confidence in the scheme, which is well supported by the people of Portsmouth. It should be considered in that context. It is a worthwhile project, which should be supported by all.

10.17 pm
Mr. Peter Viggers (Gosport)

The hon. Member for Portsmouth, South (Mr. Hancock) was fortunate to obtain this debate, in which I intervene with his consent. It was particularly good of him to allow that, because he knows that my view is not exactly parallel with his.

The Portsmouth harbour millennium project is very important to the whole Portsmouth-Gosport area. It will involve the development of walkways with retail opportunities around the museums and the characterful Portsmouth harbour area, with its naval and civilian yachting movements. It will develop the defence heritage area of Portsmouth harbour. If successful—I am confident that it will be—it should result in the sort of project that has been so successful in places such as Barcelona, San Antonio and Philadelphia.

It is a big project, involving £81 million, of which about half will be provided by the Millennium Commission. We hope that, whereas in the past people have visited the Portsmouth area specifically for one purpose—perhaps to see Victory, Warrior, of which I am proud to be a director, or the submarine museum—the scheme will develop into the sort of project that people will visit not for a day but for two or three. There is overwhelming support for the tower's spinnaker design, to which the hon. Member for Portsmouth, South referred. The local newspaper said: without the tower, the whole project collapses into meaningless rubble. It is the focal point, the beacon that will lure visitors to the revitalised harbour area. That is a strong way of putting it, but the tower is an important part of the millennium project. It is a symbol of the imaginative plan that is so important to the Portsmouth harbour area and the whole of south Hampshire. I hope that the Minister will reassure us that she gives her full backing to completion of the project.

10.20 pm
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Janet Anderson)

I am grateful to the hon. Member for Portsmouth, South (Mr. Hancock) for the opportunity to put the record straight regarding Portsmouth city council's support for this exciting project. I am also grateful to the hon. Member for Gosport (Mr. Viggers) for confirming the project's importance to Portsmouth, and to my hon. Friend the Member for Portsmouth, North (Mr. Rapson), who has long been a supporter of the project, and who illustrated his firm wish to see it succeed.

I must emphasise, first, that local authorities are independently elected bodies, answerable for their policies to their electorate. It is for each authority to decide whether the scope of its powers is wide enough to carry out a particular activity. Section 137 of the Local Government Act 1972 allows authorities to incur expenditure up to specified limits if, in their opinion, it is in the interests of their local area.

It is also important to remember that the renaissance of Portsmouth harbour is a Millennium Commission project, not a Government initiative. As the House is aware, the commission is a politically independent body, and the Government do not wish to compromise that independence. The detail of the project and the associated contractual negotiations remain matters for the Millennium Commission and the grant recipient.

In September 1995, the commission awarded a grant of £40 million to the project, against an anticipated total cost of £86 million. The renaissance of Portsmouth harbour is an ambitious development, incorporating many individual projects. The scheme emphasises public access to the harbour water front, linking the communities of Portsmouth and Gosport, and promoting the area's maritime history. It focuses on creating an international maritime arena that will provide leisure opportunities for local residents and visitors alike.

The project was developed by the Portsmouth and South East Hampshire Partnership, a consortium of local authorities and businesses. It has been led by Portsmouth city council on behalf of Portsmouth Harbour Renaissance Ltd. At an early stage in the appraisal process, the Millennium Commission identified the project as having the potential to become one of its landmark developments. Combined with the scheme's complex nature, that fact led the commission to work in partnership with the applicant during the development stage.

Tonight's debate, however, concerns specifically the construction of the millennium tower. The tower has always been a key element of the project, integral to its success. In March this year, local people unambiguously selected the spinnaker design as the preferred design concept, and outline planning permission was secured. The intended cost of the tower—some £22 million in total—was to be met partly by the commission, which would contribute £9 million, and partly by the Berkeley group.

In July, Berkeley decided to reduce its cash contribution from some £10 million to £3 million, although it remained committed to a contribution in kind of £4.3 million to provide the necessary infrastructure. That decision created a funding gap.

Portsmouth city council has now agreed, if necessary—I stress the words "if necessary"—to underwrite a portion of the commercial risk of the tower's operation. I understand that the hon. Member for Portsmouth, South takes issue with that decision. It is not unreasonable to ask why the city council should choose to invest in a scheme which the Berkeley group apparently did not find attractive.

Fortunately, I am able to answer that question. In July, Berkeley undertook a review of the business plan, and decided that the anticipated income projections from the millennium tower did not justify the level of capital expenditure that it was committed to provide. That was partly because the initial business plan had incorporated a number of commercial enhancements to the tower—restaurants, and so on. However, the spinnaker design—which, as the hon. Member for Gosport pointed out, was chosen by local people when they were consulted—does not include those elements; it is an architectural piece, a landmark.

Mr. Hancock

Have the Minister's officers at the Millennium Commission told her that there are proposals to enhance the tower? Have they told her that there could be a rollercoaster going around the base of it, or up part of it, and that there might be some sort of exciting ride as well? That would reduce what the Minister has just described as a free-standing piece of architecture to something that might have to be continually upgraded to keep people coming.

Is the Minister aware that the viability figures that she mentioned have now been reduced by nearly 300,000 in terms of the number of visitors?

Janet Anderson

I hope that, if the hon. Gentleman is patient, I shall be able to answer his questions. If I do not, he is at liberty to write to me, and I shall answer them then.

Berkeley's decision is not the issue here. It is perfectly reasonable for a commercial company to choose to withdraw from a project if it does not appear that substantial returns will accrue. Portsmouth city council, however, is a body with different priorities. It exists not to make a profit, but to promote the best interests of the local population. The city council strongly believes that the scheme in its entirety will have significant benefits for the local community. The most conservative analysis suggests that it will increase the number of visitors to the area, create additional employment, and raise the profile of Portsmouth, both within the United Kingdom and abroad.

Furthermore, the decision to underwrite the project merely makes explicit an implicit undertaking that was always part of the project's business plan. As a partner of Portsmouth Harbour Renaissance Ltd., the city council was party to an implicit underwriting of the entire scheme. It formalised that commitment to provide the Millennium Commission with additional security, although it is unlikely that it will ever be called upon to honour it.

Portsmouth Harbour Renaissance Ltd. is currently involved in complex negotiations to find a replacement commercial operator for the tower. It and the Millennium Commission have every confidence that such an operator—one who shares their view that the millennium tower is an integral part of the harbour renaissance scheme—will be found. It is regrettable that, at such a delicate stage in this exciting project's development, the hon. Member for Portsmouth, South should see fit to push into the public domain the subject matter of such sensitive negotiations.

Mr. Hancock

Will the Minister give way?

Janet Anderson

I hope that the hon. Gentleman will forgive me if I do not. I have only a few minutes left, and the hon. Gentleman said that he wished to hear what I had to say.

I hope that what I have said will reassure him, but let me make one final point to provide him with yet more reassurance. The leader of the council has given me an absolute assurance that, in the very unlikely event of the council's ever having to underwrite the operating costs of the millennium tower, there will be no question of its front-line services being cut as a result.

The hon. Member for Gosport mentioned a leader in the 2 October issue of the Portsmouth paper The News. Let me repeat part of what that paper said: when the Portsmouth South MP gets his teeth into something, he doesn't let go. But he is as wrong about the harbour's millennium tower now as he has been all along … Mr. Hancock never wanted the tower but he has lost the argument and it is time he accepted it.

The Government's opinion in this matter is straightforward. We believe that the Millennium Commission has made the right decision in agreeing to support the renaissance of Portsmouth harbour project, and we hope that the negotiations will soon be resolved in the interests of the people of Portsmouth and Gosport. We invite the hon. Member for Portsmouth, South to join us in that desire.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes past Ten o'clock.