LICENSING (ABOLITION OF STATE MANAGEMENT) BILL (Hansard, 14 July 1971)

§ LORD WINDLESHAM
My Lords, I beg to move that the House do again resolve itself into Committee on this Bill.

THE DEPUTY CHAIRMAN OF COMMITTEES
Amendment No. 3 to Clause 2 has already been moved, but the debate on the Amendment was not finished and will now continue.
The Amendment was as follows: Page 2, line 1, leave out (" The Secretary of State ") and insert (" There shall be constituted a body to be called the State Liquor Trade Management Agency (hereinafter referred to as the Management Agency) which ").

§ LORD WINDLESHAM
As noble Lords who were present on Monday will recall, the noble Lord, Lord Stonham, had moved Amendment No. 3 and had spoken at the same time to Amendments Nos. 4 to 16. What I propose to do now is to reply to the principle behind all these Amendments, which is that a State Liquor Trade Management Agency should be set up. Amendments Nos. 4 to 16 concern Clause 2(1). All the remaining Amendments (Nos. 17 to 30) concern Clause 3(1); and they make a similar proposal as regards the assets in Scotland.
The noble Lord, Lord Stonham, in moving the Amendments explained that their effect would be to constitute a new body described as the State Liquor Trade Management Agency with a discretionary power to dispose of the Carlisle State Management assets on such terms as appear to the Secretary of State to be expedient in the public interest. The Management Agency would consist of three persons, appointed by the Chancellor of the Exchequer, qualified and experienced in land and property valuation and with no financial interest in the liquor industry. Similar Amendments to these were tabled and discussed in Committee in another place and the Opposition at that time argued strongly in favour of an independent agency to handle the valuation and disposal of the State Management assets.
433 The argument seemed to rest on the proposition that the Government could not be trusted to handle these matters themselves without risk of accusations of impropriety being made. This argument overlooks the ordinary arrangements for Exchequer financial control which would effectively safeguard the public interest. The Exchequer and Audit Department can, and no doubt will, report to Parliament on the transaction and bring any criticisms to Parliament's attention. No Government could possibly act improperly in this matter; and in the debate on Second Reading the noble Lord, Lord Stonham, from the Opposition Front Bench, utterly rejected any suggestion that they would. The proposed arrangements therefore seem not only unnecessary but also cumbrous and disproportionate to the value of the assets concerned. Nor does it seem to us that any comparison can usefully be made with the scale of operation involved in the denationalisation of the steel industry. The cost of setting up a special agency of this sort would be out of all proportion to the assets involved. There is no doubt at all in our minds that far and away the best, the most effective and the least cumbersome way of handling this particular exercise is to leave the responsibility for determining how the assets should be disposed of in the hands of the Secretaries of State, subject to the normal methods of Government financial control.
The Government's proposals to dispose of the assets involve making use of the independent valuation service which exists within the Government machine; namely, the Valuation Office of the Inland Revenue. The valuations received from the outside agencies will be checked against those of the staff of the Valuation Office—the District Valuer and, in the case of the licensed properties, the Regional Licensed Property Valuer. We believe that this is a more effective safeguard than the proposal in the Amendments to appoint a Management Agency consisting of three people experienced in the valuation of land and property; these people would be in no position to check the independent valuations obtained unless they went out to inspect each of the premises. In any case, mere experience of property valuation is not enough. The valuation of licensed property is a specialist job which relatively few agencies 434 in this country are equipped to perform. The joint agents appointed by the Government, on the recommendation of the President of the Royal Institution of Chartered Surveyors, to dispose of the licensed property in Carlisle are a well-known Northern firm with specialised experience and a London firm which is one of the foremost in the country in this specialised field.
Another feature of these Amendments is that the proposed State Management Agency would be given no power to run the business while the properties were being disposed of; so presumably the Secretaries of State would have to continue trading. Thus responsibility would be shared in an uneasy partnership: the Secretary of State trying to run the business, in the realisation that the Agency was trying to dispose of the properties at the same time. Moreover, since the Agency would not be required to sell, the Amendments merely giving it power to do so, the Secretary of State would have no control over the pace at which the sale proceeded, although he would remain responsible to Parliament for the operation of a gradually declining business.
The noble Lord, Lord Stonham, in moving these Amendments on Monday went further and implied that the Agency might decide not to dispose of the assets of the scheme after all. This means that Amendment No. 4, which provides that the Agency shall"have power to"dispose of the properties rather than, as in the Bill, imposing an absolute requirement, could be interpreted as being designed to enable the Agency to preserve the State management assets intact, if it thought it right to do so. This is clearly open to strong objection as a matter of principle. The Government have made clear their view that this is an inappropriate activity for the public sector, and have presented this Bill to Parliament on that assumption. It would not be realistic to set up an Agency which might then decide to implement the policy in a way different from that intended by the Government and different from that intended by Parliament in approving this Bill. These are the reasons of principle why these sets of Amendments are not acceptable to the Government and why I must ask the Committee to reject them.

§ LORD HUGHES
In recounting what took place on Monday the noble Lord, Lord Windlesham, pointed out that Amendments Nos. 3 to 16 are more or less duplicated in Clause 3 by Amendments Nos. 17 to 30, applying more or less the same set of amending conditions to the Scottish clause. I do not intend to move any of these Amendments when we come to them, because all the arguments which have been put forward so ably on Monday by my noble friend Lord Stonham could not possibly be bettered by anything I say over again in relation to Clause 3. I am therefore personally happy to accept that what he said on Monday, in speaking to Amendments Nos. 3 to 16, should be taken as applying equally to Amendments Nos. 17 to 30.
I am reinforced in that decision after having listened to the noble Lord, Lord Windlesham, though he put forward what seemed to him to be perfectly valid reasons, from the point of view of the Government, objecting to certain of the Amendments; and when he stated what was possible if those Amendments were put forward he was, of course, reiterating things with which we are in complete agreement. We agree that those could be the consequences of some of these Amendments, but, unlike the Government, we consider them to be desirable consequences. So he will not be surprised if I find my noble friend's statement on Monday much more acceptable than his reply to-day.

§ LORD STONHAM
I am extremely disappointed, but not wholly surprised, at the nature of the noble Lord's reply. It seemed to me that the only objection he put forward to our proposal for the setting up of a State agency was that it was far too cumbersome. He thought that the appointment of these three people (one of whom, I imagine, would have had knowledge of property licences)—these three wise men—would be far too cumbersome. I do not see that it is so very different from the Government's proposal. They will be appointing estate agents who, it is true will draw a commission on all the work they do, but when these estate agents have come to a provisional decision and have seen prospective buyers they will then have to submit the proposal to the 436 Home Office. How cumbersome is that, and how expert are the gentlemen who at the Home Office will make the decision either to accept a bid or to reject it? They are estimable and experienced gentlemen in many fields but they have no expertise in this one. Therefore I should think that not only is the management agency not cumbersome; it is no more cumbersome than the actual machinery that the Government propose to set up, and the decisions would be more reliable. As for its being such a large organisation to set up, out of all proportion to the total value of the assets, I flatly disagree. I believe the values are much greater than the noble Lord thinks or the Bill suggests. In any case, this is public money. These are assets we have had for a very long time. They should not be given away or sold on inadequate advice.
The noble Lord referred to the fact that under my Amendment the Secretary of State still has to trade. That is only in theory, because the proposal is that this management agency should manage and should relieve the Secretary of State of day-to-day problems. But in Clause 5 of the Bill it is provided that the Secretary of State must remain in the business until all the properties are sold. Of course that means that he is eventually responsible for trading, but there is no objection at all to that. As my noble friend Lord Hughes said when the noble Lord, Lord Windlesham, objected to our Amendment No. 4—" shall have power to dispose of property "—there is nothing wrong with that. I find it difficult to understand why the Government feel that in a trade of this kind, something they are giving up because it is not appropriate for a Government to deal in pubs and the sale of beer, they nevertheless feel it is appropriate for the Minister to deal with it instead of having a small expert organisation to value the properties and to negotiate their sale. I think it is quite right that such a body should have power to do so.
This may be the last opportunity to speak on this Bill. All our Amendments were designed to be helpful. The Government have rejected them. They do not want more time, which they could so usefully use; they do not want any organisation, however small—and three experts 437 does not constitute a big organisation—to settle this business. I think they are wrong. The noble Lord reminded your Lordships that I said on Second Reading that I utterly rejected suggestions which have been made that the Home Secretary has not got clean hands in this matter. Of course I do, and I stick to that; but in the very nature of things it must be better that this is not done by a Minister of the Crown. It is far below his work, and I can only regret that the Government are forcing this Bill through without accepting these Amendments.