CROWN ESTATE BILL (Hansard, 25 October 1956)

§ THE MINISTER OF STATE, SCOTTISH OFFICE (LORD STRATHCLYDE)

My Lords, I rise to move that this Bill be now read a second time. In doing so, I have it in command from Her Majesty The Queen to signify to the House that Her Majesty, having been informed of the purport of the Crown Estate Bill, has consented to place Her Majesty's interest, as far as it is concerned on behalf of the Crown, at the disposal of Parliament for the purpose of the Bill.

This is a small Bill but the changes which it proposes are of some importance. The Bill relates to the properties which arc at present administered by the Commissioners of Crown Lands. There tends in that connection to be some confusion as to what these properties are. Accordingly, it is proposed in the Bill to give them a new name with a view to clarifying the position. It may he helpful to your Lordships if I begin by giving a brief outline of their history.

The Crown Lands are the hereditary possessions of die Crown—in other words, the properties belonging to the Sovereign in right of Her Crown. Their origin -is very ancient—going back to the Norman Conquest, and even earlier. The hereditary possessions fluctuated with the fortunes of the Monarch: some Kings depleted them, others restored them. In the outcome, by the beginning of the reign of Queen Anne the hereditary possessions had reached so low an ebb that the annual income was no more than about £6,000 a year. It was at that stage that Parliament intervened and by an Act passed in the year 1702, began to exercise control over the disposal of Crown Lands.

Experience gained during the 18th century, however, showed that the position was not entirely satisfactory, and before the end of the century an inquiry was instituted into the management of these lands The inquiry extended over a very considerable number of years, and as a result of it an Act was passed, in 1810, setting up Commissioners of Woods, Forests and Land Revenues to take over the duties of the former 1075 Surveyors General and to manage the hereditary possessions under the control of Parliament. The powers and duties of the Commissioners were redefined in the Crown Lands Act, 1829, which Act remains to-day as the first of the current Statutes under which the Commissioners operate.

At the turn of the century the hereditary possessions were managed by two Commissioners of Woods, Forests and Land Revenues. Both of those gentlemen were permanent officers. In the year 1906, the President of the Board of Agriculture and Fisheries (the predecessor of the present Minister of Agriculture. Fisheries and Food) was made an additional Commissioner, ex officio. Some time afterwards, the number of the permanent Commissioners was reduced from two to one by the simple expedient of not appointing a second Commissioner.

In 1924, the Royal forests and woodlands, which up to that time had been managed by the Commissioners, were transferred to the recently set up Forestry Commission; and the Commissioners' title was changed from the old one of Commissioners of Woods, Forests and Land Revenues, by which they had been known for more than a century, to that of Commissioners of Crown Lands. In 1943, following the acquisition by the Commissioners, just before the war, of very extensive estates in Scotland, the Secretary of State for Scotland became an additional Commissioner of Crown Lands ex officio. That then was the position. There were, in practice, three Commissioners of Crown Lands—two Ministerial Commissioners, ex officio, and one permanent Commissioner. Your Lordships will observe that there was still statutory provision under an Act of 1851 for the appointment of a second permanent Commissioner.

That was how matters stood when, in December, 1954, the Prime Minister appointed a Committee, under the chairmanship of Sir Malcolm Trustram Eve, to examine the present organisation for the administration of Crown lands and to report whether any changes should be made. That Committee made an exhaustive investigation and, in their Report, which is dated May 17, 1955 (Command Paper 9483), recommended 1076 certain changes. I should like to take this opportunity of expressing in your Lordships' House the thanks of Her Majesty's Government to Sir Malcolm Trustram Eve and his colleagues for the time and care which they gave to this matter, and for the excellent Report which they produced. The main changes they recommended were, briefly; that Crown lands should be re-named the Crown Estate; that the present Commissioners of Crown lands should be replaced by a Board, consisting of a chairman and between four and seven other members; and that the Minister, not having a special interest as Minister in the use and control of the land should be responsible for the Board to Parliament, with a power of giving directions to the Board. The Committee further recommended that, as an interim measure, the vacant post of permanent Commissioner authorised by the Act of 1851 should be filled and that the new Commissioner might be Chairman designate of the new Board.

In June of last year the Prime Minister announced that Her Majesty's Government had accepted the recommendation of the Committee that the present Commissioners of Crown Lands should be replaced by a Board and that in due course legislation would be presented for carrying this recommendation into effect. In November last it was further announced that Her Majesty had been pleased to approve the appointment of Sir Malcolm Trustram Eve to the vacant post of Commissioner. with a view to his being appointed, in due course, as Chairman of the proposed Board. The appointment of Sir Malcolm Trustram Eve represented the first of the three stages in which the Committee suggested that their recommendations should be put into operation.

The second of those stages is represented by the Bill now before your Lordships' House. Clause 1 of this Bill provides for the reconstitution of the Commissioners of Crown Lands as Crown Estate Commissioners. The new Commissioners will assume the functions hitherto performed by the Commissioners of Crown Lands in managing under the provisions of the Crown Lands Acts the hereditary possessions of the Crown, which the Committee recommended should be renamed the Crown Estate. In that connection, the Committee 1077 pointed out in their report that the name Crown Lands was confusing, as it tended to blur the distinction between the proportion administered by the Commissioners of Crown Lands and land acquired and maintained by the Government for public purpose. Clause 1 of the Bill contains provision for giving effect to this recommendation.

The clause further provides that the existing statutory provisions, under which the Minister of Agriculture, Fisheries and Food. and the Secretary of State for Scotland are, by virtue of their offices. Commissioners of Crown Lands, shall cease to have effect so that these Ministers will no longer be Commissioners. it is also provided is Clause 1 that the new Commissioners shall consist of such number of persons, not exceeding eight, as Her Majesty may from time to time determine, and that of the persons appointed as Crown Estate Commissioners one shall be appointed as First Crown Estate Commissioner and shall be the Chairman of the Commissioners and another may, if Her Majesty thinks fit, be appointed as Second Crown Estate Commissioner, and, if so appointed, shall be the Deputy Chairman of the Commissioners. Her Majesty's Government have decided that the responsible Ministers shall be. so far as concerns properties situated elsewhere than in Scotland, the Lord Privy Seal and, so far as concerns properties in Scotland, the Secretary of State.

Clause 2 of the Bill provides that Section 32 of the Crown Lands Act. 1851, under which the Commissioners of Crown Lands are required to comply with orders, instructions and directions given to them by the Treasury, shall have effect, in relation to the making or giving of orders, instructions and directions to the Crown Estate Commissioners with respect to the execution and discharge of their ditties, as if the reference in that section to the Treasury were a reference to the Minister; and under a provision in Clause 3 of the Bill the Minister, in relation to any matter relating exclusively to Scotland, means the Secretary of State; in relation to any matter relating to other parts of the United Kingdom, but not to Scotland, means the Lord Privy Seal: and in relation to any matter not falling within either of the preceding paragraphs means the Lord Privy Seal and the Secretary of State acting jointly.

1078 There is one further point to which I should draw your Lordships' attention. Under a provision in the Crown Lands Act, 1829, the Commissioners of Crown Lands are required to furnish an annual report. The preparation of this report was suspended as a measure of economy during the war and publication has not since been revived. The Committee pointed out that in the statutory provision of the Act of 1829 the form of the report was prescribed in too much detail, and they recommended that reports by the new Board should be in the form normal to other reports of statutory bodies. The Bill accordingly, in Clause 2, makes fresh provision as to the annual report of the Commissioners.

Briefly, by virtue of this Bill, the new Crown Estate Commissioners will step into the shoes of the present Commissioners of Crown Lands for the purpose of carrying oat the functions of the Crown Lands Acts. The intention is that the new Crown Estate Commissioners, after appointment, should examine the provisions of those Acts, so far as they are still in operation, with a view to considering to what extent they need modification to meet the requirements of the present day and to making recommendations which will form the basis of further legislation for revising and consolidating the Acts. When this task has been completed, the third and last of the stages in which the Committee suggested that effect should be given to their recommendations will have been carried out; and there should he provided for the Crown Estate, which to-day comprises properties of great extent and variety, situated in England and Wales, Scotland and Northern Ireland. properties which have a gross annual income in the region of £2½ million, an administration suitable to its importance and complexity. I beg to move that this Bill be read a second time.

§ LORD MILNER OF LEEDS

My Lords, I am sure your Lordships will wish to express your obligation to the noble Lord, Lord Strathclyde, for the historical résumé which he has given and for his clear explanation of the contents of the Bill. I feel that we also ought to join with him in paying tribute to the Eve Committee, upon whose recommendations 1079 this Bill is based. I have had an opportunity of reading the Report of the Committee and I imagine that there has rarely been such a brief, yet clear and adequate factual statement reviewing the position in respect of a not uncomplicated state of affairs, with the result that, for the most part, your Lordships will wholeheartedly agree with the Committee's recommendations. Here we have another case where it is surprising that action has not been taken upon the Report some months ago. Unfortunately, a period of delay, which it is apparently difficult to justify, seems to follow upon the recommendations of any Committee or Commission set up nowadays.

However that may be, as the noble Lord, Lord Strathclyde. has explained, this Bill is the second stage in the procedure recommended by the Eve Committee. The first stage was the appointment of the chairman-designate and, I thought, of the deputy chairman-designate, but the noble Lord has not mentioned him and I do not know whether in fact a deputy chairman-designate has been appointed. I am sure that the appointment of Sir Malcolm Trustram Eve himself as the first Commissioner of the Crown Estate will be received with approval in all quarters. I can think of no one who is more adequate to fill that post. The second stage is to set up an operative body, the future administration of the hereditary possessions of the Crown, who in effect are to be the trustees of the Crown Estate. I agree with the noble Lord and the Committee that the term "Crown Estate" is more appropriate, because the Estate does not include only lands, but also, as your Lordships will see if you peruse the Report, a number of Stock Exchange securities, mostly Government stock. Therefore Crown Estate would appear to be the more appropriate.

The comment I would make on the newly constituted body is that changes have long been necessary in the administration of the Crown Estate, and the proposals in the Bill offer an opportunity, of which I hope the new Commissioners will take advantage, to put the administration of that Estate on a much more sound basis than has been the case in the past. For a year or more, some twenty years ago, I served as a Parliamentary Private Secretary to the 1080 then Minister of Agriculture, and from time to time since I have had occasion to be in touch with these matters; and my experience has always been that both the Minister and the Department considered the administration of the Crown Estates as very much of a sideline—I do not reflect upon them in any way—and, having much more immediate responsibilities, really took little interest in the matter.

I believe that the Commissioners never. or rarely, met. The result was that the responsibility for administering this large estate, estimated in the Report as being of a value of upwards of £50 million, fell upon the Permanent Commissioner, a civil servant who, as a rule, had no special knowledge of the work of administering such an enormous estate, and still less of doing so as a business proposition: conserving and augmenting the estate, where possible, and, meanwhile, obtaining an adequate income from it, always having in mind good management and the public interest. If your Lordships peruse the Report, the result of that administration of the past is obvious: assets of £50 million produce a net revenue of only £1 million per annum. Therefore, I cannot agree with the Committee in one thing, and that is their statement that in the past a high standard of administration has been achieved. I have no detailed knowledge of the administration of the agricultural side, but one has only to look through the list of investments in urban properties, and of securities, to see how lacking the past Commissioners have been, for whatever reason. in ordinary business acumen.

It is a cardinal principle of investment in real property that the property, where possible, should be within a defined area and capable of easy and efficient oversight, supervision and management. Yet if one looks through the list of investments—I take Yorkshire as an example one sees that there is one shop, or it may be two, in the City of Bradford purchased in 1939, and an odd shop apparently purchased in Doncaster in 1954; and then we have a factory and two houses purchased in Nottingham in 1954. Those would hardly seem to be appropriate investments, spread about as they are, unless there was some special reason for them of which I know nothing. My experience in London, 1081 also, admittedly, very limited, has been that there has been a lack of supervision and consequent waste in the rebuilding of certain of the Commission's war-damaged properties in London.

If your Lordships look at the list of securities, there is a capital loss shown at the present time of some £500,000. We all know that gilt-edged securities are at a low ebb, but when one looks at the choice of investments, it has not been a particularly happy one. One sees that 40 per cent. of the investment consists of irredeemable stock, and that there is a loss on that investment alone of some £400,000. There is also a complete absence of what, as a lawyer, I always think amongst the best and safest of all investments—namely, investment in mortgage securities: there do not appear to be any of the surplus monies arising from Crown Lands invested upon mortgage. All this may be due, as indeed the Committee suggest, to defects of organisation; but it is regrettable. Clearly, what is required is what the Committee term "a team of experts". That, as I understand it, is what this Bill proposes to set up.

I am bound to say that I cannot altogether see the newly constituted Commissioners, a maximum of eight in number, as a team of experts on all the varied matters for which they are to be responsible, but they can—and under Sir Malcolm Trustram Eve, no doubt, will —so organise the Board as to sub-divide the work, and they can employ, or obtain the advice of, experts while themselves having overriding general knowledge and business capacity. I hope that the Commission may have a greater degree of independence than the past Commissioners have had. The Commissioners in the past seem to have been a little restricted in their powers and duties—which, incidentally, are not set down anywhere—and while the Commissioners now will have to submit themselves to general directions from the Minister responsible, the Lord Privy Seal, as I 1082 understand it, it is expected that they will have a greater degree of independence and freedom in investment than has been the case hitherto.

I would add only one further comment. It is curious that nowhere, neither in the previous Crown Lands Acts nor in this Bill, are the precise powers, duties or functions of the Commissioners set cut, though there are, in those Acts various limitations of their powers. I assume—and perhaps the noble Lord, Lord Strathclyde, will tell us—that at the third stage a report from the Chairman designate, or the Chairman, as he may be in a short time, and the newly constituted Board will make recommendations as to the powers and functions which should be entrusted to them by a later Bill which will come before your Lordships' House. Meanwhile, one can only agree, in the main, with the very necessary recommendations of the Committee, and express hope that they may soon be carried into effect and will have the desired results.