Falkland Islands Airfield: Cost of Land (Hansard, 13 March 1984)

§ Lord Beswick
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne)
My Lords, the contract of sale has not yet been signed.

§ Lord Beswick
My Lords, I thank the noble Lord for that Answer, but is it not a fact that the price has already been agreed? Is it not also a fact that responsible people in the Falkland Islands believe that the price so agreed is up to 30 times that being paid in the open market for similar land? If that is the case, should it not be explained to the public why the Government are paying this exorbitant amount?

§ Lord Trefgarne
My Lords. I do not think that it would be appropriate for me to give details of how the price was arrived at. I can say that it happened after negotiations with the Falkland Islands Company. I can 636 also say that it took account of the land value, severance of the company's land and damage sustained to other property and earnings as a result.

§ Lord Beswick
My Lords, the noble Lord is now admitting that the price has been agreed. Am I right in saying that the price so agreed is up to 30 times that of similar land now being offered in the open market?

§ Lord Trefgarne
My Lords, that depends upon how you calculate the value of similar land.

§ Lord Shackleton
My Lords, is the noble Lord aware that these figures are well known, that other farmers have donated land for an artillery range, as Chartres has done, and that another farm has provided islands for conservation? Will the noble Lord not now consider suggesting that the land should be donated in return for restoring the property of the Falkland Islands Company?

§ Lord Trefgarne
My Lords, it is the case, of course, that compulsory purchase could have been used to acquire this land, but as it was possible to reach agreement by negotiation the Government preferred to reach their conclusions that way. As for the value of other land in the islands, there is no single figure, as the noble Lord perhaps suggests. Indeed, land prices in the Falkland Islands are based not on the acreage of land but rather on its productivity, measured, for example, by the number of sheep that it could sustain.

§ Lord Gisborough
My Lords, can my noble friend say whether this increased value of the land reflects some existing or adjacent infrastructure, such as tarmac and drainage and so on?

§ Lord Trefgarne
My Lords, there were certain facilities on the land that has been acquired, and that, too, had to be taken into account.

§ Lord Elystan-Morgan
My Lords, what is the price agreed upon, and what is the total acreage now being acquired?

§ Lord Trefgarne
My Lords, that is a confidential matter between the Government and the Falkland Islands Company.

§ Lord Bishopston
My Lords, have the questions and answers this afternoon not brought into focus the points that have been made on all sides of the House over recent months about the importance of land reform in the Falklands? Is the Minister aware that there is a monopoly situation in the Falklands whereby one company alone owns about 43 per cent. of the land and, indeed, other facilities without which the operation and use of that land would be worth very little? Is he unaware of the facts that have been drawn to his attention by my noble friend Lord Shackleton: that the Falklands are there today because of the sacrifice of lives and the expenditure of considerable financial and other resources to win the war, and that up to the present time about £2,000 million has been expended, quite rightly, to defend the islands? These are surely factors that should be taken into account. Will the noble Lord remind the Falkland Islands 637 Government that they have powers, as the Shackleton report shows, to deal with land reform? The ownership and use of land is the very key to development in those islands.

§ Lord Trefgarne
My Lords, I think that the noble Lord is suggesting that we should have confiscated the land required from the Falkland Islands Government. That was the sort of thing that we set out to stop when we sought to remove the Argentinians.

§ Lord Shackleton
My Lords, is the noble Lord aware that it is ridiculous to use the word "confiscation"? Local authorities and governments frequently use compulsory powers. Is he not aware that the going price for land—which, as he says, is related to its productivity and the number of sheep carried—is moderate for quite good land? It cannot possibly cost more than about £2 an acre. Is he not aware that this is really a scandal?

§ Lord Trefgarne
My Lords, as I said earlier in reply to the noble Lord, Lord Beswick, there were other considerations as well; for example, severance of the company's land and damage sustained to other property and earnings as a result. When I was talking about confiscation to the noble Lord, Lord Bishopston, just now—and I agree, of course, that there are or would be compulsory purchase powers available, but the Government took the view that these were not appropriate in this case—I was, of course, referring to confiscation without any compensation at all.

§ Lord Beswick
My Lords, the noble Lord talks about damage to land. There is some land still being cleared of mines at great public cost and some danger to life. Is the Coalite and Chemical subsidiary to be allowed to exploit that land when it is so cleared?

§ Lord Trefgarne
My Lords, I am sorry to have to tell your Lordships that there is no mine clearance going on in the Falkland Islands at the moment. As your Lordships may recall from a Written Answer I gave to a Question the other day, we have had to say that we cannot proceed at the moment to further mine clearance because of the nature of the mines involved.

§ Lord Broxbourne
My Lords, as my noble friend is aware, when land that is subject to compulsory purchase is bought by agreement instead the normal practice is for the price paid to reflect what would be paid on an assessment of compensation in arbitration on compulsory purchase. Will he confirm that that principle has been followed in this case?

§ Lord Trefgarne
My Lords, yes.

§ Lord Diamond
My Lords, as the noble Lord has made clear that the contract has not yet been entered into, and as it is perfectly clear from comments made in various quarters of the House that there is great anxiety about the proposed price, will the noble Lord use his good offices to see that there is further negotiation and that the contract is not entered into at the price contemplated at present?

§ Lord Trefgarne
My Lords, no.

§ Baroness Seear
My Lords, will the noble Lord agree that the evasiveness of his replies has left in a great many people's minds a suspicion that was not there before, and that it would be greatly to the benefit of the House if he would give us more precise information in reply to precise questions?

§ Lord Trefgarne
My Lords, as I have said, this is a confidential matter between—

Noble Lords
Why?

§ Lord Trefgarne
As I have said, this is a confidential matter between the Government and the owners of the land. When land is acquired by private treaty, such as in this case, it is almost always confidential with regard to price.

§ Lord Cledwyn of Penrhos
My Lords, is the noble Lord aware that a very large sum of public money is involved, or so we are now given to understand? Is he aware that a figure of over £250,000 has been mentioned? That is 33 times as much as the land would be sold for in the open market. Will the noble Lord be good enough to assure the House that the contract will not be signed until a full statement on the cost of this land has been made by his right honourable friend? Is he aware that there will be considerable public disquiet if that does not happen?

§ Lord Trefgarne
My Lords, I am afraid that I cannot give that assurance, but I can say that the price referred to in a newspaper report which I saw on Sunday is not correct.

§ Lord Molloy
My Lords, when the Minister says that the deal is confidential, does he mean the details of what has been entered into or the details of the people with whom the Government have done business? For example, can he tell us with whom the Government have been deliberating on these elements which he calls confidential?

§ Lord Trefgarne
My Lords, the company from whom we are purchasing the land—namely, the Falkland Islands Company.

§ Lord Bishopston
My Lords, surely the Minister must appreciate the considerable disquiet in all parts of the House about this matter? If the Government have decided to have a runway in one area and the land is owned by a certain company, how do they hope to ensure that only a reasonable price is paid for that land? If the price offered by the Government does not satisfy those who are the owners, then the price they are asking would surely be far too high. This is a monopoly situation not only in land but in other facilities as well. Surely the Government should think very carefully before disregarding the views expressed so strongly by the House this afternoon?

§ Lord Trefgarne
My Lords, if the British Government had sought to acquire this land by a compulsory purchase arrangement, the price would have been subject to independent arbitration, and the Government took that into account in reaching their agreement with the Falkland Islands Company.

§ Lord Beswick
My Lords, perhaps I may ask the last question. The noble Lord said that the price quoted in the Sunday press was incorrect. I saw the figure myself. Does he mean that, instead of £33 it should have been £30, which is what responsible people in the Falkland Islands think it was? Will the noble Lord bear in mind that there is great feeling not only in this House but in the Falkland Islands themselves? There is much disquiet that an absentee landlord appears to be doing very well out of the war.

§ Lord Trefgarne
My Lords, when I said that the figure given in the press report was inaccurate I was referring not to the price per acre hut to the total sum included in that report.

§ Lord Derwent
My Lords, is it not unfortunate that this has turned into a debate?

§ Lord Mishcon
My Lords, whether the debate be unfortunate or not, Question Time is meant for the very purpose that these questions are being asked. Will the noble Lord the Minister recollect his original reply to a very open question, which was that contracts had not yet been signed? Would he agree that that gave the impression to the House that this matter was still under negotiation? If the reply to the question was that contracts had not yet been signed, is the noble Lord saving that indeed what is confidential before a contract is signed is not confidential afterwards? Would he also be good enough to say quite openly to the House upon what independent guidance this price was fixed?

§ Lord Trefgarne
My Lords, the Government have available to them a number of advisers on these matters and all their views were taken into account.

§ Lord Mishcon
My Lords, no—

Noble Lords
Order!

The Lord President of the Council (Viscount Vslitelaw)
My Lords, I obviously would wish to respond to the noble Lord. I did not get up in any way to stop him from speaking. I think it would be fair for him to ask his question. I have been, as Leader of the House, extremely tolerant. We have spent 36 minutes on these Questions. I am most conscious that if any of the Government Ministers are being questioned severely by the House it can be no part of my business as Leader of the House to interrupt that process—quite the reverse. However, I equally feel that 37 minutes is a long time and I know that the noble Lord would agree with that. Would it be reasonable for me to suggest that he asks his question and then after that we move on to next business?

§ Lord Hale
My Lords, is the Leader of the House aware—

Noble Lords
Order!

§ Lord Mishcon
My Lords, I wish to reply courteously to the noble Viscount the Leader of the House and say that I believe that most noble Lords in this House would have wished that he could have 640 answered these questions himself, and then we would have got franker answers. Would the noble Lord the Minister be good enough to direct himself to the question which I asked, which was: will he please say upon what independent advice as to value this contract was negotiated? Will he please be good enough to indicate the profession or the nature of the adviser upon whom the Government have relied?

§ Lord Trefgarne
My Lords, as the noble Lord may be aware, the Property Services Agency is normally the agency that advises the Government in these matters, and in this particular case it was indeed the Government's principal adviser.