§ Order of the Day for the Second Reading read.
§ 6.47 p.m.
§ LORD MOLSON
My Lords, I beg to move that this Bill be read a second time. This is a Private Bill promoted
§ House in matters of wages and salaries negotiations, because of his great experience. I felt that I should have been ungenerous if I had not made some response to the noble Lord, but I fully understand the noble Viscount's position and now put the Amendment to the House.
§ On Question, Whether the said Amendment shall be agreed to?
§ Their Lordships divided: Contents, 73; Not-Contents, 35.1069
|Abinger, L.||Falmouth, V.||Lloyd, L.|
|Ailesbury, M.||Ferrier, L.||Luke, L.|
|Ailwyn, L.||Forster of Harraby, L.||McCorquodale of Newton, L|
|Allerton, L.||Fortescue, E.||Mancroft, L.|
|Ashbourne, L.||Fraser of North Cape, L.||Margesson, V.|
|Barnby, L.||Gage, V.||Massereene and Ferrard, V.|
|Bathurst, E.||Geddes, L.||Merrivale, L.|
|Bethell, L.||Goschen, V.||Mills, L.|
|Bossom, L.||Grenfell, L.||Molson, L.|
|Boston, L.||Hacking, L.||Montgomery of Alamein, V.|
|Brecon, L.||Hailsham, V. (L. President.)||Newton, L. [Teller.]|
|Buckinghamshire, E.||Hampton, L.||Northesk, E.|
|Carrington, L.||Hastings, L.||Perth, E.|
|Clitheroe, L.||Hawke, L.||Rockley, L.|
|Colgrain, L.||Hereford, V.||St. Aldwyn, E. [Teller.]|
|Colyton, L.||Home, E.||St. Oswald, L.|
|Conesford, L.||Horsbrugh, B.||Soulbury, V.|
|Coutanche, L.||Howard of Glossop, L.||Spens, L.|
|Craigton, L.||Howe, E.||Stonehaven, V.|
|Crathorne, L.||Jellicoe, E.||Strathclyde, L.|
|Croft, L.||Kilmuir, V. (L. Chancellor.)||Stuart of Findhorn, V.|
|Denham, L.||Lansdowne, M.||Swinton, E.|
|Devonshire, D.||Leconfield, L.||Tweedsmuir, L.|
|Dundee, E.||Limerick, E.||Waleran, L.|
|Elliot of Harwood, B.|
|Alexander of Hillsborough, V.||Darwen, L.||Robertson of Oakridge, L.|
|Amulree, L.||Faringdon, L.||Shepherd, L.|
|Amwell, L.||Geddes of Epsom, L.||Silkin, L.|
|Archibald, L.||Greenhill, L.||Sinha, L.|
|Arran, E.||Kenswood, L.||Stamp, L.|
|Boyd Orr, L.||Kilbracken, L.||Stonham, L.|
|Burden, L. [Teller.]||Killearn, L.||Strabolgi, L.|
|Burton of Coventry, B.||Lawson, L.||Summerskill, B.|
|Chorley, L.||Longford, E.||Taylor, L.|
|Citrine, L.||Lucan, E. [Teller.]||Terrington, L.|
|Colwyn, L.||Morrison of Lambeth, L.||Williams, L.|
|Crook, L.||Peddie, L.|
Resolution, as amended, agreed to.
§ by the Letchworth Urban District Council in order compulsorily to acquire the Garden City. My remarks will fall into three parts. I shall begin by describing the origin and history of the Garden City; secondly, I shall explain the actual proposals of this Bill; and, thirdly, I shall deal with the changes which were made by the Select Committee in another place after it was originally introduced.
§ Ebenezer Howard was one of the pioneers who had all the qualities of a 1071 great man. His life was largely spent in earning his own living, first as a shorthand writer in the Gallery of the House of Commons, and later in the Law Courts; and it was only later that he wrote the book Garden Cities of Tomorrow, published in 1894, which has had a world-wide and profound effect upon the building and planning of cities throughout the world. It was in 1903 that he was able to organise the founding of Letchworth Garden City. He was a remarkable man, with a number of very distinguished friends, including Mr. Justice Neville, and the Cadburys; and there is, I believe, one of his associates who is still alive, a member of your Lordships' House, Lord Grey.
§ When Letchworth Garden City with its new and original ideas was founded, he had as the President the then Lord Salisbury. Should any of your Lordships feel that in the case of a new idea like a Garden City there is anything shocking to Conservative sentiment, the fact that the Lord Salisbury of that day was the President will, I am sure, reassure you. As with his father before him, and his son after him, I am sure that anything with which he associated himself was eminently respectable and in accordance with sound Tory government. Moreover, one of the original members was Arthur James Balfour, the local Member.
§ The principles of Ebenezer Howard were extremely interesting. The first was that, I think almost for the first time since Roman times, an English town was planned as a whole. When it was founded they had a clear idea as to how much it was to be and how it was to be developed; and in developing it they were resolved that rural amenities should be preserved, so far as possible, for the benefit of the town dwellers. Secondly, they had a leasehold system administered under unitary control in order that the increase in wealth and values in the town should go to the tenants rather than to the landlords. In the third place, those who put up the money agreed that the dividend should be limited to 5 per cent., and that in the final winding-up there should be a limit upon what they should receive. Fourthly, the rents were to be reviewed periodically, but that was only to take into account the increase in the value of the land and was not to 1072 take into account buildings or tenants' improvements which had been made. Fifthly, when development was complete, it was to be transferred to some public body.
§ Letchworth has been, as I have said, a model; and in the United States and in all parts of the world a number of towns have been founded since then, all of which followed the example set by Letchworth. It is indeed an example of British enterprise and original thinking of which we can all be proud. From this original conception at Letchworth all the legislation dealing with town and country planning which is now accepted by all political Parties in this country derived its origin. I think that this idea of perpetual leaseholds is of special interest. As a Conservative, I do not consider that there is anything wrong about development such as took place in Eaton Square. There, a landlord made available plots to wealthy men who fully understood what they were doing, and they built houses for themselves on the understanding that when the lease, usually for 99 years, came to an end, that house would revert to the owner of the land.
§ But it is, I think, a principle accepted by all of us that when people engage in some enterprise on certain understandings, and with certain rules laid down, those rules are not to be changed to their disadvantage before the end of the contract. Tenants, individuals, and firms have gone to Letchworth on the understanding that it was going to be administered in accordance with what I shall call the Ebenezer Howard principles. It is obvious that when you come to value land there can be two entirely different bases. One is the value of the property as a going concern, administered on the Ebenezer Howard principles which I have described. There can be another valuation, such as that prescribed for general purposes in the Valuation Act, 1961, which would take into account the value of the land and the property upon it if it were sold as freeholds and broken up.
§ Clearly, there has always been a great temptation for land developers to try to acquire control of the Letchworth Garden City, and to acquire it at the valuation that is appropriate so long as it is administered according to the Ebenezer Howard principles, and then 1073 to dispose of it as freehold or to raise the rents, not according to the Ebenezer Howard principle of the value of the land, but taking into account also the value of the buildings, some of which are extremely valuable factories, which have been built upon the land and, according to the Common Law, naturally go with the land and become the property of the freeholder. Therefore, there was always an opportunity for someone to step in and, buying at one valuation and selling at another, to obtain for himself the profit to be derived from the difference between these two principles of valuation. That is what is now being done. Unfortunately, according to Company Law it is impossible to entrench the Ebenezer Howard principles upon which the Garden City was founded.
Letchworth has made slow, but very steady and satisfactory, progress over the last 50 years. In 1956, there was a takeover bid. This was repelled by the (as we now see) rather short-sighted device of altering the memorandum of association of the company to do away with the 5 per cent. limit upon the dividend. It is easy to be wise after the event, and I do not think we need be unduly censorious of those who repelled the first take-over bid by that expedient. Towards the end of 1960, a company called Holel York, Limited, acquired control. It obtained 50.3 per cent. of the voting power. Before doing so, the chairman of Hotel York sent out a letter containing these words:
In the event of the offer being unconditional it would be the intention of York, of which I and my family are the controlling shareholders, to ensure the future of Letchworth as a unified estate in accordance with the principles upon which the town has been developed since its foundation by your company in 1903.
That was an assurance upon the confidence of which a number of shareholders sold their shares to Hotel York.
§ At the annual general meeting held on February 16, 1961, it was announced that the signatory of that letter, Mrs. Rose, had become the managing director, and a member of her family, Mr. Michael Rose, a director. There are now two other directors of the company, but all the old ones have gone. At that annual general meeting it was 1074 stated that shortly the policy to be followed would be announced. On June 6, 1961, it was announced that parcels of land, not developed but scheduled for residential development, would be auctioned, and this would establish a realistic value—the words used were "realistic value"—of the land and the market interest, and so prove the value of the estate.
§ That was the first departure from the Ebenezer Howard principle of not alienating the freehold of land, except in the case of schools, churches and public utilities, which, despite the argument that has been put forward, cannot, I think, be regarded as a departure from the general principles laid down by Ebenezer Howard. Later, selected lessees were asked to buy the freehold reversion of the land that they occupied. Thirdly, rents were in some cases increased, taking into account tenants' improvements. For example, when a change of user took place one occupier who had been paying a ground rent of £70 a year was asked to pay £5,000 a year. In addition, there was a subsidiary company called Letchworth Cottages and Buildings. This had been registered as a building society under the Industriail and Provident Societies Act, 1893. Since Hotel York took over control it has been de-registered as a society and has been turned into a property company, which is, of course, entitled under the law to make the largest profits that it can.
These facts were not disputed by counsel and I am not suggesting for one moment that anything which has been done is illegal. I am only saying that it is a breach of faith inconsistent with the circular which was issued by Mrs. Rose at a time when she asked the shareholders to sell their shares to Hotel York. I feel I could not do better than quote the words of my right honourable friend Sir Lionel Heald, an ex-Attorney-General, in another place when he said about this that he did not think there was any principle involved in opposing the Bill, but said [OFFICIAL REPORT, Commons, Vol. 656 (No. 79), col. 319]:
I do believe, however, that there are other principles which may be involved, to whichever Party we belong. The keeping of promises, good faith, fair dealing and truthfulness are principles which all of us in this House are anxious to encourage.
§ My Lords, the Urban District Council had begun to consider promoting a Bill in the autumn of 1960, but that a Bill should ultimately be promoted in order to transfer the property to a public corporation had always been in the contemplation of the founders and it is mentioned in the Stock Exchange Year Book, so that no one buying shares could be or should be ignorant of the ultimate intention. On November 14, 1960, the Urban District Council gave a memorandum upon this subject to each of the directors. Mrs. Rose was not at that time a director, but the information was given to her by Mr. Ritchie, the Secretary-Manager of the company. On July 20, 1961, the Urban District Council issued a public statement announcing that it would promote the Bill in order to safeguard the interests of Letchworth leaseholders in accordance with the Ebenezer Howard principles. Its views upon this matter were submitted to a town meeting, which, as your Lordships know, is required before a local authority promotes a Private Bill, and it was carried by an 18 to 1 majority and confirmed afterwards by a poll.
§ I now come to the way in which this Bill attempts to achieve the purpose. In the first place it proposes to set up a public corporation broadly analogous to those which have run the New Towns, in order to acquire the freehold interests of the Company. In the second place that corporation is to manage the Letchworth Estate as an undivided whole, as a public service on Ebenezer Howard principles. Thirdly, the basis of compensation is to be the value of the estate as a going concern run on Ebenezer Howard principles. As I have said, this is, of course, much lower than the breakup value, but in view of the undertaking given by Hotel York when they sought to acquire control that that was the way in which the undertaking would be run, they clearly cannot complain if, when it is compulsorily acquired, the basis of the valuation is the same as that upon which they sought and did in fact acquire the shares.
§ I now come to the Amendments or additions to the Bill that were made by the Select Committee. I should not normally in a Second Reading debate deal with what might be called Committee points, but I think I should do so 1076 now for three reasons. In the first place the Amendments are so substantial that it is not possible fully to understand the Bill merely by reading the account of it when it was originally introduced into another place. Secondly, these Amendments show that the Select Committee were convinced of the justification for the allegations which are made by the promoters of the Bill against the financial interests who have acquired control. Thirdly—this is, I know, in the opinion of some people a matter of controversy—they extend the scope of the going-concern valuation.
§ Clause 4 is the Interpretation Clause and it distinguishes between "the undertaking "and" the included interests". Put quite briefly, the undertaking, which is precisely defined in the First Schedule, is, broadly speaking, the Garden City itself. The included interests are, broadly, those that were disposed of by the company between July 21, 1961—which is, of course, the day after the Urban District Council announced its intention to promote this Bill—and the date of transfer, which it is intended shall be January 1, 1963. Under Clause 16 of the Bill as originally drafted the corporation must acquire the included interests within twelve months at the valuation prescribed by the Land Compensation Act, 1961. That will be, using the familiar words that I have used before, what one might call the breakup value. It is at this point that a series of Amendments were made by the Select Committee. It appeared to them desirable to prevent the company from making more out of selling the included interests before the date of transfer than by retaining them as part of the undertaking. This, of course, could be done by taking advantage of the different basis of valuation in Clauses 15 and 16. The shares in a subsidiary are to be transferred to the corporation on January 1 next, but if sold before then they would become investments and not included interests and therefore they could not be acquired by the corporation under Clause 16.
§ There is an important subsidiary, which I have referred to, called Letchworth Cottages and Buildings Limited, which the new controlling interest have already converted, as I have mentioned, from a non-profit-making housing association registered under the Act of 1893 1077 into an ordinary property company. It would therefore be possible for First Garden City Limited, in the intervening time, to sell those shares at the low valuation at which they are now standing in the books of the company, and then for the nominees later to proceed to dispose of those assets at a greatly enhanced valuation.
§ The Select Committee in another place decided to block up this loophole, and they proceeded to do so by amending the Bill so as to do five things: first, to make shares in a subsidiary company which have been sold an included interest; secondly, to make it possible for the Corporation to acquire interest in property created or disposed of by a subsidiary; thirdly, to create a new category which they called "post-deposit included interests"—that is, property alienated otherwise than in the ordinary course of business after November 27, 1961, which was the date of the deposit of the Bill—and to make them subject to transfer with the undertaking on the day of transfer and subject also to the provisions of Clause 15, which deal with the consideration for the transfer of the undertaking; fourthly, to provide that the shares of Letchworth Cottages and Buildings Limited should be valued on the assumption that they were shares in a housing association and not in an ordinary property company; fifthly, to provide that purchasers of post-deposit included interests could recover what they paid from the persons from whom they acquired them.
§ I apologise for the technicality of these matters, but they really are very important provisions of the Bill as it now is. Your Lordships will see from these Amendments three things: first, that the Select Committee, who were unanimous, accepted the desirability of legislation in order to maintain the objectives of First Garden City as set out in the memorandum of association of 1903; secondly, they went beyond what the Promoters of the Bill had asked for in order to give full effect to the object in view, which they thought was a right one; thirdly, they extended the scope of the going concern valuation to the post-deposit included interests.
§ My Lords, that is all I need to say, in order to explain and to commend this Bill to your Lordships' House. In the 1078 first place, it is promoted by an urban district council with strong popular support. Secondly, its purpose is to preserve Letchworth Garden City in accordance with Ebenezer Howard principles. Thirdly, it is in order to ensure that the 30,000 inhabitants of the Garden City should continue to be able to occupy it on the principles and under the conditions which they thought would obtain when they first went there. One of these is that leases should foe perpetually renewable at a fair ground rent, taking no account of buildings put upon it. The basis of compensation is not that which applies normally according to the law of the land, but it is what is deemed to be fair and just having regard to the special circumstances of this case. The local authority which is the Promoter of this Bill is able and willing to bear the extra burden which it may for a time involve upon the rates. This Bill will vest administration in the hands of a corporation broadly analogous to those which have administered the New Towns. I submit that this is a proper and reasonable Bill and one to which your Lordships would foe well advised to give a Second Reading. I beg to move.
§ Moved, That the Bill be now read 2a.—(Lord Molson.)
§ 7.17 p.m.
§ LORD SILKIN
My Lords, we are all greatly indebted to the noble Lord for the manner in which he has introduced this Bill, and for having explained it so cleanly, so forcibly and so convincingly. There is, indeed, very little left that anyone who desires to support it can say. I had wondered whether we should have any opposition to the Bill in this House. Judging from the list of speakers, I imagine there will be no opposition at all; but, of course, one never knows. Even if there ware, I doubt if there is anything more I could add to what the noble Lord has already said, and so I will confine myself to a very few observations.
The first is that Letchworth Garden City is one of the greatest achievements of the present half-century. It is an ideal Which was conceived by Ebenezer Howard and has actually been carried out; and in these days it is very rare that we find an ideal, begun in very small circumstances by a handful of people, finding itself completed in 1079 accordance with the ideas of the original founder. But it is more than that. It is not only a model town, with a population of 30,000, but has been an example to a number of others. It has set the pattern for Welwyn Garden City, Hampstead Garden Suburb, and many other smaller towns up and down the country, which have been started by philantrophic employers for the benefit of their workers and so on; and it has also set the pattern for the seventeen or eighteen New Towns which were set up under the New Towns Act, 1946. All those New Towns have closely followed the pattern of the Letdhworth Garden City. Therefore, it is a precious thing that we ought to maintain, in these days when mercenary considerations seem to predominate. I am delighted that this Bill has been introduced for the purpose of perpetuating the spirit of these towns and the ideas which were behind it.
In 1948, when I was Minister of Town and Country Planning and was concerned with the creation of New Towns, I had considerable pressure put upon me by the Letchworth Urban District Council to designate Letchworth as one of the New Towns. I think I had already designated Welwyn Garden City as a New Town and was about to take it over, and Letchworth were anxious that we should do the same as regards their town. Their object was to preserve the spirit behind their town and to ensure that it never became a subject of commercial enterprise. I seriously considered the possibility of taking over Letchworth, and we had many conversations with the then board, particularly with the late Sir Eric Macfadyen who was the chairman of the board.
It soon became apparent to me that the spirit which permeated that board was identical with the spirit with which we were anxious to conduct the New Town. They were more or less willing to accept the principle underlying New Towns, to fall in with the general pattern, to ensure that the growth of Letchworth would be in accordance with our idea, which was to regard the New Towns around London as places to which we could remove our population and industry. They were prepared to give an undertaking that Letchworth would always be run in accordance with the principles of Ebenezer Howard. In 1080 those circumstances, it was felt that there was no need to take over Letchworth Garden City; that they were more than prepared to carry out all the purposes for which the New Towns Act was passed; and the understanding which was arrived at was incorporated in a number of resolutions passed by the board, which are on the record and which were accepted by the shareholders, as well as by the board itself.
As the noble Lord, Lord Molson, has told us, there is a danger that these principles will be broken. I do not think I need elaborate on what would be the fate of the town of Letchworth if it became the subject of commercial enterprise, of the selling of leases at the highest possible price. But I would emphasise that it would be not only a breach of faith with the Government of which I was then a member, and on the strength of which Letchworth was not incorporated under the New Towns Act, but also a breach of faith with those individuals who hold leases from the town of Letchworth. The noble Lord has explained exactly in what way this breach would take place, and how it would become an ordinary commercial enterprise run by people in order to make the highest profit, with all the idealism gone out of it. So it is timely that this Bill should have been introduced; and it is to the credit of Parliament that, regardless of Party, the Bill received a Second Reading in another place by a vote of 280 to 30. It will be even more to the credit of this House that it should receive an unopposed Second Reading.
There is a principle in law which lays down that no person shall benefit from his own wrong. If this Bill were not passed it would be open to the present board and the existing shareholders to benefit greatly by two breaches of faith: first, as the noble Lord, Lord Molson, has explained to us, by departing from the basis upon which they acquired a controlling interest in the company, the promise that it would be run in accordance with the principles of Ebenezer Howard; and, second, by departing from the basis upon which the Government of the day refrained from creating Letchworth a New Town under the New Towns Act. The noble Lord, Lord Molson, has quoted the speech of Sir Lionel Heald in another place. It is because I value honour and integrity in 1081 commercial dealings as much as I desire the continuance of the spirit of Letchworth, that I hope that this Bill will receive an unopposed Second Reading in this House.
§ 7.24 p.m.
§ THE EARL OF ALBEMARLE
My Lords, I rise for a few minutes only. At the beginning of this century I was lucky enough to be thrown, as one might say, at the feet of certain men, idealists and of a liberal cast. One of them was my dear grandfather, Egerton of Tatton. The other was Albert, Lord Grey, not Charles Grey, his son. In fact, there is nobody now left living of that group, although one is conscious of the shadow on the Benches opposite of that dear and most respected figure that we knew as Lord Pethick-Lawrence. But for the rest, it is a question of sons and grandsons.
It is indeed a pleasure to be able to support the persuasive and admirably clear way in which the noble Lord, Lord Molson, has introduced this Bill. There is but one small point upon which I should like clarification. I cannot understand why the ratepayers, the leaseholders, will be at the mercy of a majority not of their own seeking. Apparently they will be at the mercy of men, no doubt excellent men, to be appointed by the Minister of Housing and Local Government. I do not like it. It does not sound wholly democratic. I do not understand that point. I think I will content myself with asking for clarification on that point. It seems to me that the leaseholders are at the mercy of other people and, so far as I can see, will eventually have to pay, because the original shareholders, some of them no doubt having got tired of a 5 per cent. fixed-interest return, have sold to other people, who under the terms of the loan conditions are to make something out of it. They have every right to do so; they are legally entitled to do so. What worries me is that eventually the leaseholders are left to buy back, so to speak, their original low-cost equity. Perhaps the noble Earl who is going to reply will help me to understand the position in this connection.
§ 7.29 p.m.
§ LORD DARWEN
My Lords, I should not have intervened in this debate were it not for the fact that I have a special 1082 interest in Letchworth. For a number of years Letchworth was my home—in fact, my youngest son was born there. So it is in this personal frame of reference that I make my few brief remarks. It is natural that the future of the City should be a matter of deep interest to me. Besides that, I feel that I should be failing a number of the friends I made there if I remained silent and did not say a word in support of this Bill.
In the course of part of the time during which I was in Letchworth, I was engaged in work which brought me into contact with quite a large number of the many sections of the community. At that time, and as is the case now, the town was expanding quite rapidly, and newcomers were arriving from all over this country to take up residence in Letchworth. There was, as I think is not generally realised by the public who read about Letchworth, a strong, thriving, industrial section of the town. The noble Lord who introduced this Bill mentioned the very careful planning that went into the town, and I should like to put on record, as a matter of experience, how well that industrial section had been planned. It was so planned that it was almost invisible from any other part of the town, and was so sited that the prevailing winds carried away any fumes and smoke, and so forth, so that in fact they never came over the town.
Most of the people who came to Letchworth from various areas scattered up and down the country knew little or nothing about the origins of Letchworth, but the name of Ebenezer Howard and his principles were never forgotten. It was a matter that was talked about quite commonly, and I think a large proportion of the newcomers shared, in some measure, the enthusiasm and interest of the older residents in what was, as the noble Lord has told us, a pioneer experiment of great interest. Ebenezer Howard and his associates, the founders of the Garden City, had quite clearly defined their principles and objectives and, to put them briefly, I would say that they could be expressed in this way.
They set out to create a town for the benefit of the community—the community that would later on, through successive generations, live in it. They 1083 also set out to limit the dividends from investments in the company which they formed in order to raise the necessary capital to buy the land, so that any profits in excess of a limited return for the shareholders could be used for the benefit of the town or its inhabitants. I think it is true to say that the majority of the leaseholders understood this; they were well aware of the general principles, and, as the noble Lord, Lord Molson, has said, they had it clearly put to them from time to time that that was the policy of the company. Moreover, if one reads the history of the whole project there can be no doubt whatever about the position of the original shareholders. They were never at any time in the early days, for the first fifty years, led to expect any large dividends; and thus the question of capital appreciation did not really arise. But, as it turned out in the event, there was a loophole whereby the dividends could be raised in excess of 5 per cent.; and when, as we have heard, in 1956 there was a take-over bid and Letchworth, the First Garden City, was faced with the problem of how to fight this off, they took what now, in retrospect, may seem to us a rather unwise course, in that they gave a one-for-one free issue and also abolished the limitation on dividends. This they did, as a matter of fact, against the advice of the Urban District Council and many of the loyal shareholders who were so much in favour of the original principles laid down by Ebenezer Howard.
The fact is that the company is now controlled by persons who became stockholders as recently as November, 1960—that is, 57 years after the formation of the company. In this way the whole character of First Garden City Limited has changed. It has not changed for the benefit of the community, but primarily for the benefit of these people who are not concerned with the earlier pledges of the company, or its history, or the intention of the people who formed the company. Thus, the only way in which the town can ensure that some of the earlier intentions are carried out and that the inhabitants do not suffer from oppressive demands is by a Bill to vest the estate in a corporation—such a Bill, indeed, as is now before your Lordships' House. The Bill 1084 provides for the purchase of the company's shares by the corporation, and, if the parties cannot agree about a price, it will be determined by the Lands Tribunal as the amount which the undertaking might have been expected to realise if it were sold as a going concern on the day of transfer in the open market by a willing seller to a willing buyer.
To my mind, the only debatable question raised by the introduction of this Bill is whether the townspeople of Letchworth are not being asked to pay too much. However, the explanation of the noble Lord, Lord Molson, in his very helpful and brilliant opening speech, allayed my anxieties when he referred to the Amendments of the Select Committee. These seems to give the kind of protection that was necessary. In any case, everyone will agree that the stockholders should be compensated. On the other hand, it is reassuring to learn from the noble Lord that the speculators (who, I remind your Lordships, are without interest in the express purposes of the company in which they have invested) will not profit by their un-scrupulousness. So it is a great pleasure for me to join in welcoming this Bill, which clearly has the approval of all sides of this House.
§ 7.40 p.m.
§ LORD AUCKLAND
My Lords, I crave your indulgence for intervening in another debate in your Lordships' House to-day, but my interest in this Bill is primarily nostalgic. For many years my parents lived in the very charming town of Baldock only two miles from Letchworth, and I spent much of my childhood in that town. I know Letchworth reasonably well and it is a place for which I have the greatest partiality. Only three days ago I paid a visit to the town and embarked on a tour with the Clerk of the Council, who has served the town ably for many years. During the course of my journey I met an old lady, who is now just over eighty, who has lived in the town for nearly sixty years. She and her family have had much to do with the formation of this admirable Garden City which Letchworth now is.
Anybody who has visited Letchworth cannot fail to be impressed by the beauty of its set-up. The Broadway, particularly, 1085 is a model of admirable planning; the factory area, which I visited only the other day, is likewise. I would emphasise that the factory area of Letchworth contributes very considerably to our national economy. Household firms such as K. and L. Steelfounders, Marmet Ltd., Sigma, Spirella and others perform very valuable functions. It is interesting, as was said by my noble friend Lord Molson in his most lucid opening speech, that when a plebiscite was held in the town the voting in favour of the corporation's measures was 3,183 for and 903 against, with a poll of 25 per cent. which is very high for any Private Bill.
Little has been heard recently from Hotel York. Last year I read in the Hertfordshire Gazette, which I take regularly, a very scathing speech by Mrs. Amy Rose, its principal director, attacking my honourable friend the Member for Hitchin, in whose constituency Letchworth is situated. It accused him of supporting municipalisation, and practically said that his views were alien to any Conservative opinion. I would remind your Lordships that last year there was a truce declared on the council elections, because all Parties, Liberal, Labour and Conservative supported the principles of this Bill.
Letchworth is a town in which all classes of people and all strata of society reside. There is a large element of business executives and white collar workers, there is a farming community, and there are a number of factory workers; and all classes have shown the greatest support for the ideals behind the Garden City. I am, of course, too young to have known Sir Ebenezer Howard, but I have read his admirable book Garden Cities of Tomorrow, in which he so movingly and so convincingly expressed the thesis of the Garden City. Letchworth, as you will know, is a town of entirely leasehold property. Most of the houses, and I believe the factories, have leases of between 99 years and 999 years.
It has been said that the compensation is, in fact, over-generous and, indeed, if it were made more generous than it is now it would be quite iniquitous for the ratepayers of the town. As I understand it, if this Bill becomes law they will have to pay something like 1s. 3d. in the £ for a period of about three years, and 1086 I think that few people would consider that a high, expensive burden to preserve the beauty of a Garden City. Those who seek to remove the present face of Letchworth have no local connections with the town, they have admitted that they are primarily out for their own gain, and therefore I cannot see how they can possibly improve on the present situation. If Letchworth has survived as it has for this large number of years, it would be a great pity if it were now destroyed. I cannot really envisage what might happen if the speculators got hold of the town. I can only presume that a number of ugly buildings will spring up, that land will become the centre of a great deal of speculation, and merely give headaches to the local planning committee.
My Lords, this is not a Party political matter. As I have said, and as other noble Lords have said, this Bill commands the support of all Parties in the town, and of all Parties in the County of Hertfordshire. I would therefore urge that this Bill receive a very prompt and a very justified Second Reading.
§ 7.48 p.m.
My Lords, I feel your Lordships may desire me to give an indication of the Government's attitude towards this Private Bill. In view of the simplicity of what I have to say, I can be brief. But I trust your Lordships will not infer from my brevity that either I or the Government in any way under-estimate the importance of this Bill or the importance of the principles underlying it. That would be far from the case.
Your Lordships at this stage are faced with the simple choice of whether or not to give a Second Reading to this Bill, whose pedigree, if I may use the term, has been explained to your Lordships with such force and clarity by my noble friend Lord Molson. Given the course of our discussion this evening, I have little or no doubt what your decision will be. I am glad that this is so, given the circumstances, for as your Lordships are aware this Bill comes to this House fresh from another place, where it was given rather special consideration. I would remind your Lordships that it was passed by a massive majority at Second Reading of, I think, 246 votes to 13, and unanimously, as 1087 my noble friend has pointed out, by the Special Committee of nine members (instead of the usual four) appointed to consider it. This follows the strong support which these proposals received at a town meeting at Letchworth and in the subsequent town poll. Given this background, I have no hesitation in recommending your Lordships to give this Bill a Second Reading, so that the pros and cons can be threshed out in detail before an impartial Select Committee.
My right honourable friend will, of course, be submitting a report to the Select Committee, as in fact he did to the Special Committee in another place. I should not wish to anticipate that report; nor do I think it would be right for me, at this stage, to enter into any detailed disquisition of the merits of the case. But perhaps I might briefly touch on one or two important points made in my Minister's report in another place. In the first place, I would remind your Lordships that, in that report, my right honourable friend expressed a good deal of sympathy with the view that it was undesirable that virtually a whole town should be in the hands of a single commercial company. Secondly, he drew particular attention to the compensation provisions and the financial implications of the Bill. A number of noble Lords have this evening reverted to this question of compensation. I would merely reiterate that this is essentially a question to which the Select Committee should give their close attention, as indeed I am sure they will.
My Lords, there is a great deal that is unusual about this important Bill. In a way, it is a memorial to the unusual—I think the unique—achievement of a great man, Ebenezer Howard. I also believe that the particular circumstances which have caused the Promoters to bring this Bill to Parliament are most unlikely to be repeated. In all the circumstances, I have no shadow of hesitation in recommending your Lordships to give this Bill its Second Reading.
§ 7.53 p.m.
§ LORD MOLSON
My Lords, the Promoters of this Bill will be more than gratified by the cordial reception, regardless of Party, which it has received in this House. I rise, as I think courtesy obliges me to, merely to reply to the point that was made by my noble friend Lord Albemarle in the friendly speech in which he welcomed the proposals. He expressed some slight doubt as to whether it was entirely desirable that the members of the corporation in whom the administration will be vested should be nominated by the Minister. I do not think that this is a matter of principle in the Bill, and it is clearly one of the matters which can be considered by the Select Committee. It is difficult, however, to think how else the members of a public corporation of this kind can be appointed.
Clearly, there are difficulties about their being elected by any shareholders. It is the difficulty which has arisen in that connection, the danger of power getting into particular hands, which has made it necessary for this Bill to be introduced at all. There are, I think, strong objections to the administration being in the hands of those who are popularly elected to sit on the local authority. It is manifestly difficult for them to be quite impartial in deciding upon rents, and so on, when they are subject to the votes of the tenants whose rents they are fixing. I think that if my noble friend looks at Clause 11 of this Bill he will see that it lays down extremely clearly how they are to administer their trust, and I therefore hope that he will agree that probably the best person to make the majority of the appointments is the Minister. My noble friend will notice that one is also elected by the local authority and one by the county council.
My Lords, again I would thank your Lordships for the way in which this Bill has been received; and I assume that we need have no doubt that it will now be given a Second Reading.
§ On Question, Bill read 2a, and committed to a Select Committee.