§ 8.11 p.m.
§ Baroness Young
My Lords, I do not intend to detain the House long at this time this evening. The purpose of the Duchy of Cornwall Management Bill is to make certain alterations to the existing statutory constitution of the Duchy in order to bring the powers of management into line with modern conditions.
The Duchy of Cornwall is at present administered under Acts going back as far as 1337. These powers are inappropriate to modern conditions and out of line with those which govern the management of landed estates generally. Indeed, they can be an impediment to the proper management of the Duchy's estates.
Although there are, broadly speaking, no major restrictions on the Duchy's general power of buying and selling freehold land—provided that a proper price is obtained or paid—the powers of the Duchy to grant leases are subject to restrictions which serve no useful purpose in modern conditions. The Duchy has no power to take a lease, not only where the freehold is owned by other owners but also where the freehold is owned by the Duchy itself. This arises because, although the Duchy has power to accept surrender of leases, it has no power to buy out a tenant and this has caused difficulties both for the Duchy and for the tenants in cases where payment of a capital sum to the tenant would be in the interest of both parties.
Clause 2 of the Bill overcomes those difficulties. It gives power to take leases, including power to buy out Duchy leases with capital money, and empowers the Duchy to buy land jointly with other persons.
Let me now turn to the other main provisions of the Bill. Clause 1 deals with investments. At present, the Duchy is required to invest money raised by the sale of land—and not required for other purposes—in two parts. One part has to be in Government and other very safe interest-bearing securities, the other part in what are called "wider range" investments—"blue chip" equities. Because the Duchy's assets are in land the need to invest half the money in gilt-edged securities need not apply—as it does not apply in other modern trusts.
Clause 3 provides limited power for the Duchy to mortgage land as security for loans. These days, when the Duchy wants to raise money for some purpose, it may not be possible, or wise, to realise assets in time, and this clause allows the Duchy to offer security for a loan. However, these loans are to be for specific purposes only—broadly speaking, the purchase or improvement of land. It is not intended for the unnecessary sale of other properties simply in order to raise money for a desirable purpose. Any exercise of this power would need the consent of the Treasury, as in the 1863 Act.
898 The same Treasury control applies to Clause 4, which deals with improvements and gives the Treasury power to relax the existing requirement that improvements such as houses, roads and fencing must eventually be paid for out of Duchy revenue. As the improvements add to the capital value of the Duchy estates, the existing provisions are unduly restrictive.
Clause 5 deals with leasing powers and provides that a Duchy lease may be granted for any length of time. It also removes technical restrictions on leases which do not give immediate possession to the lessee.
Clause 6 deals with banking and allows Duchy capital—money which at present can only be held in the Bank of England—to be kept in any bank registered and recognised under the Banking Act 1979. Clause 7 gives the Treasury a general power to authorise any transaction of the Duchy which would assist the good management of the Duchy. This is intended partly to cover such matters as the grant of mortgages for Duchy staff and tenants, the provision out of capital for the purchase of equipment, plant and machinery for the Duchy estates, and the financing of private businesses conducted by Duchy of Cornwall tenants or licensees. It could also cover transactions that cannot at present be foreseen, but which may seem appropriate as conditions change.
Clause 8 requires the Treasury, in considering the exercise of various powers relating to the Duchy, to have regard to the interests of both present and future Dukes of Cornwall or possessors of the Duchy. Its intention is to ensure that the value of the estate should remain an assured base for future Dukes of Cornwall.
Clause 9 deals with accounts and audits. It extends the existing time limit for the presentation of Duchy accounts to Parliament to comply with its present accounting period and so allow adequate time for preparation and presentation to Parliament, allows for the appointment of additional auditors and instructs the auditors to submit a report on the accounts to the Duke of Cornwall or the then current possessor of the Duchy.
The House will want to be assured that the Bill does not in any way alter the constitutional position of the Duchy or its basic structure. Nor does it affect the majority of the activities that can be carried on during the period of enjoyment of any Duke.
The prime public interest in the Bill is a financial one. As the House may know, when there is no Duke of Cornwall the revenues of the Duchy revert to the Sovereign, and under the provisions of Section 2 of the Civil List Act 1952 are then used to reduce the statutory sums payable for The Queen's Civil List.
At present one-quarter of the net revenues are voluntarily surrendered to the Consolidated Fund. The public interest, therefore, coincides with that of the Duke of Cornwall himself in promoting the viability and profitability of the estate. This measure is intended to bring up-to-date the conditions in which the Duchy of Cornwall conducts its business, to ensure that the interests of those living in or near the Duchy lands are taken into account while safeguarding the public interest, in the proper management of the estate. I believe that the Bill, as amended in a number of respects during its passage through another place, meets these requirements and provides a sensible balance between granting the necessary additional commercial freedom to the Duchy while maintaining 899 the necesssary degree of restraint and control consistent with the legitimate public interest and with the safeguarding of the interests of future Dukes of Cornwall. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read a second time.—(Baroness Young.)
§ 8.19 p.m.
§ Lord Cledwyn of Penrhos
The House will be grateful to the noble Baroness for introducing the Bill and for explaining it to us. I must confess that I found it rather complicated when I first read it because one has to go back to the three related Acts of the last century and the general history of the Duchy of Cornwall in order fully to appreciate the Bill.
The five Acts of 1838, 1844, 1863, 1868 and 1893 brought the affairs of the Duchy out of the Middle Ages into the 19th century and I assume that the Bill is an attempt to bring it into the 20th century. The Duchy is not the only institution in this country that needs to be introduced into the 20th century, but if I mentioned all the others I would be initiating a very wide debate indeed.
The fairly modest Act of 1838 which started the process of reform was passed when the Duchy was in a very bad way after a century or more of neglect and mismanagement. But the five Acts to which I referred laid the foundation for a much more enlightened regime. It is obviously important that the reputation of the Duchy should not be tarnished by the lack of the necessary administrative and legal powers, which are more appropriate to the time in which we live. There are two points to be borne in mind when we look at the Bill—namely, that the basic parent Act on which the Duchy is now managed is the Act of 1863—nearly 120 years ago—and, secondly, that the Duchy of Cornwall is a very large estate with a variety of properties extending from London to the Isles of Scilly. There is therfore a need for enlightened modern management and husbandry.
I do not propose to go into the Bill in any great detail, but I have some questions for the noble Baroness which I am sure she will be glad to answer. I start with Clause 2, which is one of the Bill's most important clauses. It authorises the Duchy:to purchase a term of years…"—that is, a lease—whether or not the fee simple is parcel of the possessions of the Duchy of Cornwall".This clause gives the Duchy the power to buy out their leases with capital money and empowers the Duchy to buy land jointly with others. In present conditions this does seem to be a necessary power and I shall be grateful if the noble Baroness will tell us if she sees the Duchy using this power extensively once it is granted. I assume it would be used in relation to agricultural land and that the objective would be to encourage more efficient farming. Is that the case? I shall be grateful to the noble Baroness if she can elaborate on that.
Clause 5, as the noble Baroness said, deals with leases and I agree with her that this seems to be a sensible provision. We come now to Clauses 3, 4and 7. They are also important because they go to the heart 900 of management and because they deal with its accounting system. The Bill has already been criticised as being weak in its approach to accounting and I hope that the noble Baroness can go a little further than she did in her speech and confirm that the Government are absolutely satisfied that this criticism is no longer justified, given the changes that have been made in the Bill in another place. Adequate up-to-date accounting procedures are essential to good management and they are also relevant in terms of presenting accounts to Parliament under Clause 9.
The main objectives appear to be the following. First, to ensure that his Royal Highness the Prince of Wales receives the proper income to which he is entitled from a well managed estate; and, secondly, that the estate, itself is progressively maintained and improved, both with that aim in view, and also in the interests of those who live in and work on the estates in many parts of the country.
I was particulary glad to note that the Bill now in its present form contains the words:persons living on, or in the vicinity of, the landin relation to transactions affecting Duchy property in Clause 7. It is also important to note that every authorisation under Clause 7 will be made to Parliament.
I noted that the Duchy account in the new form prescribed by this Bill will be printed as a paper of the other place. I wonder whether the noble Baroness can tell us whether it will be a paper of this House as well? The clause does not specify either House as it stands at present.
The Treasury interest in the Duchy and, therefore, in the Bill is understandable—they receive 25 per cent. of the income from the Duchy. An extension of the powers given in Section 8 of the 1863 Act is proposed in Clause 4 to which the noble Baroness has already referred. This seems reasonable to me, but I would like to know who advises on estate management in the Treasury? Is there some agriculturist hidden in a dusty corner in Great George Street of whom the world is not aware? If not, would it not be sensible to bring in the Ministry of Agriculture who have an estate management unit of high expertise? Perhaps the Treasury may well refer to the Ministry of Agriculture, although they are not prone to seek advice from any other department.
A little earlier I referred to agriculture. It is of course, the Duchy's primary activity. It has been said that the fear of some Duchy agricultural tenants is that reform could lead to more amalgamations of holdings. This is something which has to be handled with great sensitivity, there are, of course, instances where amalgamation is defensible and desirable, if only because the larger holding gives the farmer an income to live on, wheras a small farm may be non-viable or is generally non-viable. On the other hand, amalgamations which create very large holdings are neither defensible nor necessary and I hope that the noble Baroness can assure us that this Bill will not tend in that direction—that is, towards the creation of more and more huge holdings—because this again limits the opportunity for young men to enter the farming industry.
It may seem a little unfair at times, but the fact is that the standards of the Duchy are expected to be 901 exemplary. We live in unpredictable and disconcerting times and those who work for the Duchy must appreciate that what they do in the estates management, how they do it and when they do it will sooner or later come under public scrutiny, and, as President Truman once said, the buck stops with the landlord. Although His Royal Highness the Prince of Wales takes a close personal interest in the estate and the welfare of those who live and work on it, he cannot for obvious reasons follow everything that goes on. The position is sui generis and for that reason great sensitivity and wisdom are required. I hope that this Bill will help His Royal Highness and those who assist him to manage this great estate efficiently and compassionately.
§ 8.26 p.m.
§ Baroness Young
My Lords, I am very grateful for the speech of the noble Lord, Lord Cledwyn of Penrhos. I think that we are in entire agreement about the principles of the Bill and I am grateful to him for the way in which he has framed his remarks and for what he has said about the Bill generally. I am sure that we are all agreed that the Bill is important because it does permit of the possibility for the Duchy to bring its estate management up to date and so to bring about all the things which we would all like to see, which must be in the best interests of the estate of His Royal Highness the Prince of Wales and, of course, all those who live and work on the estate. So I thank the noble Lord very much for his remarks.
The noble Lord asked me a number of detailed questions about the Bill which I shall certainly do my best to answer. The first concerned Clause 2 and the new powers that are conferred upon the Duchy. Of course, the object of the Bill is to enable the Duchy to manage its affairs better, and so the whole purpose here is to create better management. I have not the slightest doubt that the powers will be used and that they will, in fact, promote more efficient farming and estate management generally.
The noble Lord went on to ask me about accounting, which is in Clause 9. The answer is, as the noble Lord will be aware, that the arrangements for accounting are now made much more up to date. They will be presented to Parliament as he quite rightly has said and, of course, they will be available to this House as well as to another place, which I think is important. The noble Lord also asked me, again as regards accounting, about advice. I should like to confirm that the provisions of the earlier five Acts, including the 1863 Act which is the basic Act governing the management of the Duchy, do provide for Treasury comments. This Act in fact preserves that position. I think that really what we are interested in is financial comment from the Treasury as an outside organisation to satisfy Parliament in this respect.
Finally, the noble Lord asked me a question about farm amalgamations and so on. I should like to confirm that wherever possible it is the intention to enable farms to continue as independent holdings. Sometimes that is not possible, but the intention is, as far as possible, that the farms should continue as independent holdinbgs. In recent months, indeed, a Cornish farm which had been intended under the old policy for amalgamation and the selling off of the 902 buildings has been re-let to a young married tenant as an independent holding. Therefore, I hope that that is encouraging news and is in answer to the point the noble Lord has made.
At this hour, after a long day in your Lordships' House, I hope that I have answered the points that the noble Lord, Lord Cledwyn, has raised and, once again, I should like to thank him for the most helpful and constructive way in which he has approached this Bill. I think we all agree that improvements were made to it in another place. In my opening remarks, I made a reference to an important amendment that was moved and carried in another place about taking into account the concerns and interests of those living in or near the Duchy lands in all its estate management. Therefore, the Bill includes powers for the Duchy to act in the most efficient way not only in its own interests but also in the interests of everyone living and working near it. With that, I hope that the House will give this Bill a Second Reading.
On Question, Bill read a second time, and committed to a Committee of the Whole House.