HL Deb 14 April 1980 vol 408 cc44-54

4.34 p.m.

Lord MOWBRAY and STOURTON rose to move, That an humble Address be presented to Her Majesty praying that the Location of Offices Bureau (Revocation) Order 1980 be made in the form of the draft laid before the House on 6th March. The noble Lord said: My Lords, in a general statement about Quangos last September, my right honourable friend the Secretary of State for the Environment announced that the Location of Offices Bureau would be abolished. The purpose of this short order would be to secure the formal dissolution of the bureau. It would revoke the 1963 order, under which the bureau was established, and the 1977 order, which amended its original terms of reference.

Back in 1963, congestion in Central London was seen as a major problem, and when the bureau was then set up it was given a general duty to encourage decentralisation and diversion of office employment from congested areas in Central London to suitable centres elsewhere".

My Lords, there is no doubt that, in discharge of this remit, the bureau played a pioneering and successful role. Through its free advisory services and by its distinctive advertising, particularly on the London Underground, it did much to persuade firms to move suitable office operations out of Central London. But, like all things, times change, and in 1977 the emphasis on London decentralisation was dropped from the bureau's terms of reference. Instead, the 1977 amending order gave it the general duty to promote the better distribution of office employment in England and Wales".

It was also given two specific new tasks: to promote office employment in the inner urban areas and to attract international firms to locate offices in this country. However, in July 1978 the Department of the Environment dis- covered that there were serious limitations on the bureau's powers to attract overseas firms, or, for that matter, to help the assisted areas in Scotland and Northern Ireland. In the light of this advice, the bureau immediately halted the overseas promotions on which it had embarked.

This, then, my Lords, was the situation we found when taking office last year. With the revision of the decentralisation strategy in 1977, the bureau's previous clearly recognisable objectives had been replaced by wide and vaguely defined terms of reference; its powers to discharge some of the new tasks it had been given had proved to be inadequate; and the requirement that it should promote specific areas did not sit easily with the bureau's traditional practice of providing impartial information to its clients.

Furthermore, the Government were not convinced that a publicly-financed body was any longer necessary to assist firms who might be seeking new offices. There is a general awareness, which the bureau has itself done much to foster, of the significant business costs which are attributable to location; and there are firms of consultants, estate agents, surveyors, and so on who are to some extent already providing, on commercial terms, the advisory service offered by the bureau. Altogether, my Lords, the Government concluded that the time had come for the field to be left to the private sector.

As regards the possible overseas role of the bureau, the Government acknowledge the value of attracting office investment from abroad, and are concerned that the United Kingdom's locational advantages should continue to be promoted. Accordingly, the Invest in Britain Bureau, which already exists within the Department of Industry, has taken over from the Location of Offices Bureau the function of supplying information to overseas companies seeking to set up offices in this country. Finally, arrangements have been made to complete the four research projects which the bureau had in hand. The bureau's research library has been transferred to University College, London, and will continue to be available to researchers.

My Lords, the order would provide for the bureau to be dissolved on 1st May. This would mean that four members of the bureau would have their appointments pre- maturely terminated. They would then be compensated on the usual basis for loss of office. Of the former staff of 18, only the secretary now remains in post. They are being compensated in accordance with the redundancy provisions of their superannuation scheme. The bureau's expenses, which had been at a level of around £400,000 a year, had been met out of grants from central Government, and at the date of dissolution there will be no assets or outstanding liabilities.

In conclusion, I would wish to record our appreciation of the work of the bureau, among whose able members, I may say, is the noble Lord, Lord Plant. Over the 17 years of its existence, the Location of Offices Bureau—"LOB", as it has widely and not unaffectionately become known—has both helped many individual firms and generally stimulated interest and ideas on the proper choice of office locations. The last three years have been somewhat testing. The revision of the London decentralisation strategy in 1977 led to popular misunderstandings of the role of the bureau. It took up its new overseas task with energy and enthusiasm, only to be stopped short. And, since the change of Government last year, it inevitably faced a period of uncertainly over its future. But until its intended abolition was made known it continued unfailingly to provide advice and to promote research. I can understand that Councillor Prendergast, who was chairman from 1971 until his term of appointment ran out at the end of last month, his fellow members of the bureau and the staff will all feel disappointment. I hope noble Lords will agree that it is right for the bureau now to be abolished; but, at the same time, the bureau should receive the credit it deserves for the dedicated public service it has provided since it was first set up in 1963.

Moved, That an humble Address be presented to Her Majesty praying that the Location of Offices Bureau (Revocation) Order 1980 be made in the form of the draft laid before the House on 6th March.—(Lord Mowbray and Stourton.)

4.41 p.m.

Baroness BIRK

My Lords, I should like to thank the Minister for explaining so carefully why the Government are revoking this order. I thought that the tribute—the "memorial service" if I may call it so—towards the end of his speech made out a good case for the retention of LOB as it is affectionately known, as the noble Lord put it. I find it a great pity. I was Minister at the department when the change in terms of reference came in 1977 and I should certainly not describe that as a change to something wide and vague, as the Minister has said.

It is true, I agree, that the conditions of 1963 when LOB was set up have changed considerably. But the change in 1977 to give the bureau a general duty to promote better distribution of office employment in England and Wales, with special emphasis on inner urban areas and areas of expansion, and also to attract international concerns to set up offices in the United Kingdom, seemed to me to be quite precise, quite specific and entirely the way that the bureau should have been moving. It was a great pity that somehow the wording went wrong, in that the international side of it was not able to be promoted; although, as the noble Lord himself said, in fact a great deal of work was done there and numbers of firms were attracted to this country. If the last Government had been returned in the general election, we would have brought in the necessary legislation to make it possible for the bureau to continue and expand its international work.

I was glad to hear, as the Minister in another place also pointed out, that the four research projects are to be completed. I wonder whether the noble Lord could tell me where they are going to and who will use them; or whether they are to be put in a pigeon-hole marked "research"? He mentioned, as did the Minister in another place, that the Invest In Britain Bureau in the Department of Industry will be taking over a great deal of the attraction of foreign investment to this country. How is this going to come about? I do not think we have much information about the Invest In Britain Bureau. Most people in business knew about LOB, but they did not know about the Invest In Britain Bureau. Is it to be enlarged? Will some of the expertise that has been gained in people, in its reports and in the monitoring that has gone on, be inte- grated in the Department of Industry? Perhaps the Minister could answer that.

I should like also to know how the inner areas of London and other cities will be helped now. I agree that there was a certain confusion at one time between the words "inner" and "central"; but when we are talking about inner city areas (whether of London or other cities) we now all know what we are talking about and we know about the great problems of decay and the importance of bringing commerce and industry to these areas. How are they going to be helped? The noble Lord and the Minister in another place have both stressed that there is now a general awareness which the role of the bureau did much to foster; and the Minister in another place said: Furthermore, there are firms of consultants, estate agents and so on that are to some extent already providing the advisory services offered by the bureau, and the Government have concluded that the time has come for the field to be left to private enterprise."—[House of Commons, Second Standing Committee on Statutory Instruments, &c. Col. 5;25/3/80]. I wonder whether the Government—even one so tied up as this Government with expanding private enterprise and exchanging public enterprise for private enterprise—are doing a wise thing over this. The bureau did not do merely what the average estate office or surveyor did. The bureau provided details of vacant office accommodation all over England and Wales, information about rents, information about planning policies of the local authorities, availability of staff, of housing, of transport, whether there were schools there for the workers' children and Post Office communications—and this was a comprehensive service available in no other sphere of commercial or industrial activity in this country. I do not see how these small areas of private enterprise, individual estate agents there, can provide this.

The Government also ended the whole system of economic planning councils. We have interest rates higher than ever before in this country and rents are high, particularly in the South-East. What it seems to me that we need today more than ever—although its function would be changed from 1963—is an authoritative advisory body to encourage movement from the South-East where the rents are very high to the Midlands and North where the rents are lower and unemployment much higher.

In the last year's annual report of the bureau, the chairman in his introduction said: We have to recognise in this country that the office and service sector of our economy now predominate in terms of employment…". In 1978–79, there were 385 inquiries, which is an increase on previous years. The only year higher recently was 1973–74. These 385 inquiries involved 21,408 potential jobs.

During the year, the report goes on, there were some 46 moves between the main economic planning regions, involving the redistribution of 5,005 office jobs by 36 of the bureau counts. I think that those noble Lords who have read the report would feel rather uneasy about what the Government are going to do. However much one is wedded to private enterprise—and in this country, I think we all agree, we live in a mixed economy—the thing is to get the right mix. In this area I would feel strongly that there is still need for a public body for such public advice as the bureau has provided in the past. It is with really great disquiet and concern that I listened to what has been said and the Government's action in putting before the House a draft to revoke the order.

4.50 p.m.


My Lords, I rise to speak in this matter with a great deal of diffidence and a certain amount of confusion. My confusion arises from the fact that it seems to me that if we are inclinded to make changes in any way in the structure of society, these changes ought to lead to improvement or at any rate they ought to be believed to be likely to lead to improvement. I do not have any strong feeling about LOB—as it is affectionately known—or whether it would be better under private enterprise or public enterprise; but I should like to be told by the Minister just why he thinks improvement would arise from the proposition he puts before us.

With the greatest respect, I do not think that the Minister's speech in supporting the proposition today made the slightest attempt to show that the change would lead to any kind of improvement at all.

He was so kind and laudatory towards LOB that it seemed to me extremely unlikely that any change would lead to any improvement at all. If he thinks that LOB was doing such a good job, why is he changing it? He may have excellent reasons—and I see that he looks up sharply at me as I say that. He may well be able to convince me and other noble Lords present that he has those excellent reasons. He must attempt to do so. He has not yet made the slightest effort to show that this change would lead to any improvement. Before we pass this measure the Minister should try to convince us that the change is necessary.

4.52 p.m.


My Lords, I am very grateful to the noble Baroness, Lady Birk, and the noble Lord, Lord Plant, for being kind about me in my kind words about LOB. Because, in the view of a Government, something loses its usefulness, it does not mean that one is not appreciative of what it has done. As I tried to explain, we feel that the time has come when the job for which it was set up originally in 1963 is no longer necessary. The job does not need that type of organisation. As noble Lords are aware, we are trying to decentralise and pass to the private sector, which does not cost central Government money, as many things as can be done.

The noble Baroness, Lady Birk, asked one or two direct questions. I do not like attending memorial services any more than she does. The work of various Ministries, departments and committees often goes on under another hat and in another place. It is not that the work is not going to be done. We must not get too upset because LOB is being put to rest. The Bureau was a source of free advice, but it had no power to steer firms and nor did it seek to do so. Financial assistance will continue to be available to firms which are prepared to move to the assisted areas. We are also continuing our initiatives in the deprived inner urban areas, which the noble Baroness was asking about. Development can be controlled adequately through the normal planning system. Within the safeguards that this provides, we believe that firms should be encouraged to pursue their own investigations and exercise their judgment about their locational requirements.

My right honourable friend the Secretary of State for the Environment is to continue to receive advice from the Property Advisory Group; and, in addition, there are contacts through the PSA and dealings with local authorities, notably through consideration of their structure plans and development proposals. There is involvement with the inner city programmes and the setting up of the urban development corporations. I do not think that we now also need the bureau on these points. We should in any case consider how far it is sensible, as I have just said, for central Government to try to intervene in detail in the office market.

The noble Baroness inquired: Would not inner urban areas suffer from the loss of the bureau? We believe that office employment has an important contribution to make in inner city areas where the traditional, largely industrial, job market has declined sharply in recent years. I do not believe that the bureau would be likely to be an effective instrument for promoting such employment. The local authorities in those areas are free to promote them for office development where they regard this as appropriate. I very much hope they will do so. In London and Merseyside docklands the urban development corporations will be able to do the same. These are the bodies whose agreement will be essential if schemes are to go ahead, and they can give prospective developers more specific advice than the bureau were able to do. This is not a criticism of the bureau, but a belief that the task in the inner cities is one which needs a method of working which the bureau could not easily adopt.

The noble Baroness also inquired about the IBB. It already works to attract both service and manufacturing industry to the United Kingdom, and has a network of contracts in overseas diplomatic posts and elsewhere. It is likely to be more economical and also more effective to build on an existing organisation rather than to establish another overseas promotional body. Seeking office investment is an integral part of the IBB's work. The IBB staff and the FCO staff in posts overseas are continually on the lookout for opportunities in this field. The IBB is presently studying the report on the location of offices of multinational companies which was commissioned by the Location of Offices Bureau and published earlier this year. In due course, the IBB will make available the results of this research to those within Government, including posts overseas which are engaged on inward investment work. The IBB is also studying European corporate structures and the strategies of major United States corporations. Opportunities for encouraging such companies to establish regional headquarters and other office facilities in the United Kingdom which emerge in the course of study will naturally be followed up.

This is a sad occasion. Nobody likes having to say, "Thank you" in these circumstances to good and trusted friends who have done well. But there comes a moment in everybody's life when we think that we can do something better in another way. We are saying, "Thank you very much" very gratefully to LOB. From what I have said in my original speech and now, the case is made for this order to be revoked.

Baroness BIRK

My Lords, before the noble Lord sits down, may I point out to him that he did not answer one, at least, of my questions. I have given my notes to Hansard and I think there were more that he did not answer, but I cannot now remember them! Where are the four research projects which are to be continued going to find their home? Will they go to University College, the library, or IBB. Who is going to get the benefit of this research?


My Lords, just off the cuff, I cannot answer the noble Baroness. I will see that she is informed. The noble Baroness may like to see the answer in Hansard. If she will put down a Question for Written Answer all noble Lords will see it.

4.59 p.m.


My Lords, my noble friend Lord Howie of Troon spoke a little while ago and the noble Lord, Lord Mowbray and Stourton, thought it was me. I want to thank the noble Lord for the generous tribute that he has paid to LOB. Like the noble Baroness, I felt that he was making out a very good case indeed for the retention of LOB which was set up by the last Conservative Government. The speed with which the present Conservative Administration has abolished an organisation which was set up by the previous Conservative Administration, and was felt to be so necessary in the life of the country, is somewhat bewildering.

I am sorry that there will be a loss of stimulus in equalising office employment throughout the country. This can only be done by one agency. It cannot be left to scores of different authorities pulling in different directions. I am sorry, too, that there will be a loss in one place of a centralised index of living information and of office accommodation at a new location. I regret very much that, because of the mix-up in the terms of reference and the legal setting up of the bureau, it was not clear about the bureau being able to extend its influence overseas.

A visit was made to America by the chairman and secretary of the Location of Offices Bureau, and they were having some success in attracting oil companies to open offices in this country. Some money was spent—apparently unauthorised—but I regret very much the loss of impetus in attracting multinational companies to open offices in this country. I do not believe that any other Government agency has the independence and freedom to go out and attract such companies to open offices in the United Kingdom. It is extraordinary that the terms of reference were so narrowly drawn that the writ of the Location of Offices Bureau ran only to England and Wales. We found to our great distress that we could not influence office employment in Scotland and Northern Ireland.

I believe that much of the work done by the bureau will go on, as the noble Lord, Lord Mowbray, has said; but I believe it will go on in various parts of Government at greater expense than the £400,000 that was spent on the bureau. I believe it is right and proper that I should place on record thanks to the staff and officers of the bureau, who worked tremendously hard and gave impartial advice to many employers who sought it. I am sure it is the employers—people who perhaps want to change their location and do not quite know where to go to get impartial advice—who will suffer. I regret very much indeed that the bureau has been one of the tragedies of attacks by the media in this perhaps fashionable way: "Get rid of the Quangos".


My Lords, I think we are thoroughly out of order. Although the noble Lord said it was right and proper that he should speak, technically it is not right and proper that he should have spoken in fact after I had spoken. If, with the leave of your Lordships, I may speak again, I should like just to answer questions put by the noble Baroness, Lady Birk. Some answers have now come to hand and it might be as well to give them now rather than later. She asked where the four projects were to go. The study of the impact of and potential for office development in inner city areas with particular regard to their identified economic and social problems, which is a project by Mr. Peter Damesick, now of Birkbeck College in London, is virtually complete. Follow-up work will be taken over by the Department of the Environment and will be submitted to them shortly.

The second study of the factors influencing the location of offices of multinational firms has been published and is being promoted by the Economists Advisory Group, which produced it. The third study is of job prospects in the office sector of the economy, both nationally and spatially, over the next decade or so. Miss Diana Morris, the bureau's senior research officer, has been given the opportunity to complete this work and she will be promoting it herself.

The fourth study, relating to business services and regional office employment, is looking at the demand for and the supply of business services; for example, insurance, banking, market research, accounting and legal services, research and development services. It is assessing the extent to which possible shortages of these services may restrict future office development. This study is being carried out by Professor John Goddard at Newcastle University, and financial responsibility for the project is being assumed from 1st May by the Department of Industry.

On Question, Motion agreed to: the said Address to be presented to Her Majesty by the Lords with White Staves.