HL Deb 10 July 1969 vol 303 cc1181-4
VISCOUNT MASSEREENE AND FERRARD

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government:

  1. (1) whether the construction of the Craignure Hotel, Mull, is on a fixed price contract;
  2. (2) what rent the operators are paying;
  3. (3) whether they consider this rent to be a satisfactory return on the capital;
  4. (4) where the facilities for fishing and stalking mentioned by the Minister on June 19 will be provided.]

THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR SCOTLAND (LORD HUGHES)

My Lords, the contract for the construction of the hotel has been placed on a firm price basis. The terms of the lease between the Highlands and Islands Development Board and the operating company are a matter of commercial confidence and it would not be proper for me to say more than that the rent is a fixed annual charge plus a share of tie profits. The Board regards this hotel as a key project in its plans for the development of tourism in Mull, and the return is regarded as adequate in these circumstances. The activities which I mentioned on June 19 are those for which the Board is seeking to improve or develop facilities: fishing and stalking rights have not yet been negotiated.

VISCOUNT MASSEREENE AND FERRARD

My Lords, while thanking the Minister for his reply and also for settling the first part of my Question, that the contract is on a fixed price basis, which is extremely important for the Island of Mull, may I ask whether the Minister is aware that many people may think it rather odd that the Highlands and Islands Development Board should give this extraordinarily large sum of money, over £300,000, and that we are not told the amount of rent? Further, is the Minister aware that many people think that this hotel ought to have been put out to tender, so that all hoteliers could have had the opportunity of taking it? Furthermore, may I ask the noble Lord—

LORD HUGHES

My Lords, would the noble Viscount give way? I am rather in danger of losing the thread of what question, if any, he is asking. In order that I may return to the scene, would he perhaps make clear at the next stage of asking his question whether he is talking about going to tender for the building of the hotel or going to tender for the letting of the hotel?

VISCOUNT MASSEREENE AND FERRARD

I am talking about going to tender for the letting of the hotel.

LORD HUGHES

My Lords, may I then answer that part? During 1968 the Board had discussions with eight leading Scottish hotel groups, and it was following these discussions that the lease was fixed with this particular one.

VISCOUNT MASSEREENE AND FERRARD

My Lords, does the noble Lord realise that it will be extremely difficult to make a profit on an hotel in this area? The noble Lord said that the Highlands Development Board were engaging with the operators on a certain profit-sharing basis. Regarding the last part of my Question, the noble Lord is aware that the—

THE LORD PRIVY SEAL (LORD SHACKLETON)

My Lords, may I interrupt? If the noble Viscount knows the noble Lord is aware, there is no need to ask him. Without wishing to harass him, I would ask the noble Viscount whether he could put a rather more direct question. Or perhaps he feels he has got enough information already.

VISCOUNT MASSEREENE AND FERRARD

My Lords, the form in this House, as the noble Leader knows, is that one has to say, "Is the noble Lord aware", or, "May I ask".

LORD SHACKLETON

My Lords, the noble Lord was not saying "Is the noble Lord aware"; he was saying "The noble Lord is aware".

VISCOUNT MASSEREENE AND FERRARD

I apologise, my Lords; I thought I said, "Is the noble Lord aware?" that the majority of fishing and stalking rights in this area, the properly regulated sporting rights, are already let and are fully utilised.

LORD HUGHES

My Lords, the conditions of this House are not that noble Lords use the words "Is the noble Lord aware?" in order to get away with a speech which would otherwise be out of order.

THE EARL OF DUNDONALD

My Lords, may I ask the Minister one further question on this matter? The noble Lord will agree that a substantial sum of public funds is involved—over £300,000. Could he say whether a rental of something of the order of 5 per cent., which would provide a figure of £15,000 a year return on capital, is the sort of figure that he would indicate as a fair return?

LORD HUGHES

My Lords, I indicated that to a certain extent this was a matter of commercial confidence. The percentage which the Highlands and Islands Development Board will actually get will, of course, turn on what their share of the profits is. May I return to something the noble Viscount said: that it was difficult to earn profits? All this company are going to get out of it is their share of the profits, so they will presumably expect that there are going to be some.

THE EARL OF DUNDEE

My Lords, may I ask the noble Lord whether he is aware if the rents charged for these hotels, et cetera, are, or are not, eventually subject to the scrutiny of the Public Accounts Commitee? I do not know whether they are or not, and I wonder whether the noble Lord can tell me.

LORD HUGHES

My Lords, I am not aware.

LORD SILKIN

My Lords, could the noble Lord tell us what is the objection to informing the House of the amount of the rent, and even the share of the profits?

LORD HUGHES

My Lords, because it is the established practice that in commercial transactions of this nature they are not disclosed. This is not something which is confined to the Highlands and Islands Development Board.

LORD SILKIN

My Lords, this is public money: surely the public is entitled to know how its money is being used and what return it is getting.