Greater London Enterprise Board (Hansard, 10 April 1986)

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

§ Lord Brabazon of Tara
My Lords, there are powers in the Companies Act 1985 to investigate the affairs of companies. However, the police are already making inquiries into various allegations concerning the Greater London Enterprise Board and I see no reason for exercise of those powers at present. The situation is being kept under review and any further information my noble friend has about the Greater London Enterprise Board will be considered.

§ Lord Orr-Ewing
My Lords, can my noble friend tell me what progress is being made? Is it true that one prosecution for fraud has been successful and that three others are pending? Are these numbers correct? Now that the GLC has been disbanded, is it for the London councils to monitor the manner in which this company is operating and to see that the moneys that they have spent and loaned to this company are being properly spent and are creating adequate jobs?

§ Lord Brabazon of Tara
My Lords, in answer to my noble friend's first supplementary, I gather that police inquiries are well advanced and that there has already been one successful prosecution. As regards the future ownership of the Greater London Enterprise Board, it is a matter for the boroughs themselves to decide whether or not to join. I gather that so far 12 out of 33 London boroughs have decided to become members and that a further six are considering their position. It is, of course, up to them, then, to take an interest in what happens.

§ Lord Renwick
My Lords, on the question of jobs, is my noble friend aware that when the GLC set up the 307 Greater London Enterprise Board the target was 10,000 jobs a year by 1984–85 and that by December 1985, after liquidations and the failure of various companies within GLEB, its estimate of the jobs created was 1,992, which, after expenditure on GLEB, amounts to something between £20,000 and £30,000 a job?

§ Lord Brabazon of Tara
My Lords, I was not aware of the particular figures that my noble friend has quoted. But it is now, of course, a matter for the London boroughs to decide whether or not they want to continue with this.

Lord Bruce of Donington
My Lords, while applauding the decision of Her Majesty's Government to keep a very close watch on the very legitimate investigations that have been suggested by the noble Lord, Lord Orr-Ewing, will the noble Lord now recommend that the London Residuary Body, which has rather more leisure to deal with these matters, should conduct further investigations into the activities of the housing associations which, in 1983, resulted in the resignation of two councillors from the GLC? It may well be that further information will now come to light.

§ Lord Brabazon of Tara
My Lords, I am not entirely sure what relationship the housing associations have with the Greater London Enterprise Board. The Question relates to the Greater London Enterprise Board. I do not have, at the moment, any information regarding the housing associations.

§ Lord Bruce-Gardyne
My Lords, reverting to the original Question, has my noble friend noted that the auditors to the Greater London Enterprise Board calculate that between 60 and 90 per cent. of the £67 million involuntarily invested by London ratepayers in this organisation has disappeared in three years? Is there not a strong case for a new and independent inquiry into where this money has gone and even conceivably to whom?

§ Lord Brabazon of Tara
My Lords, I said in my original Answer that the police were investigating matters concerning the Greater London Enterprise Board. Of course, there is a world of difference between fraudulent activity and plain incompetence. I did say that I would take note of any further information that we received on the Greater London Enterprise Board in deciding whether we should investigate under the Companies Act.

§ Lord Mellish
My Lords, as we are talking about jobs and their provision in London, would it not be a good idea to follow the pattern established by this Government in setting up the London Docklands Development Corporation that has provided 28,000 new jobs since 1981? In fact, 37 per cent. of the firms that have come in are brand new firms that would not have come in but for the improvement of the area. Would it not be a good idea, in order to avoid the complications that have been mentioned in this question and answer session involving GLEB and people of that kind, to follow a pattern already proved to be successful and continue it?

§ Lord Brabazon of Tara
My Lords, the noble Lord, Lord Mellish, makes a good point, but the Question relates, of course, to the financial affairs of the Greater London Enterprise Board. I am sure that the successor boroughs to the Greater London Council will take note of what the noble Lord has said in deciding whether or not they wish to continue with the Greater London Enterprise Board.

§ Lord Cledwyn of Penrhos
My Lords, while taking the critical questions that have been asked fully into account, is it not the case that the noble Lord's right honourable friend the Secretary of State for the Environment has in fact urged London boroughs to join the enterprise board? Are the Government proposing to make funds available to the enterprise board? Can the noble Lord say quite clearly whether or not the Government support the future of the enterprise board?

§ Lord Brabazon of Tara
My Lords, I can say clearly, as I hope I have made clear, that the future of the enterprise board is now a matter for the London boroughs. Since the abolition of the GLC, it is right and proper that those boroughs should have the right to make their own decision about this sort of matter.

§ Lord Cledwyn of Penrhos
But, my Lords, does not the fact that the noble Lord's right honourable friend has urged the boroughs to join the enterprise board mean that the Government themselves see a future for the enterprise board?

§ Lord Brabazon of Tara
My Lords, I am not entirely sure of the extent to which my right honourable friend has urged the London boroughs to join the Greater London Enterprise Board. My noble friend Lord Elton, in a statement last month, when he refused the application of the GLC to give a further £8 million to the Greater London Enterprise Board, made clear that it was a matter for the boroughs to decide. As I said earlier, only 12 of the 33 boroughs have so far decided to become members.

§ Lord Molloy
My Lords, was not one of the ideas behind the establishment of the Greater London Enterprise Board to look after, during the interim period, many of the cultural and educational aspects that had been within the safekeeping of the GLC until such time as the London boroughs might be able to help? Is that still the situation—that they are safe until agreement has been reached with the London boroughs? Was not this one of the ideas behind the creation of the Greater London Enterprise Board?

§ Lord Brabazon of Tara
My Lords, with respect, the noble Lord is, I think, slightly confused as between the Greater London Enterprise Board and the residuary body. The Greater London Enterprise Board has been in existence for a number of years and was set up by the GLC.

§ Lord Orr-Ewing
My Lords, can my noble friend advise the boroughs that while a total of 1,992 jobs has been created by GLEB at vast cost to the ratepayers, 28,000 were created by the London Docklands 309 Development Corporation? Is there not a lesson to be learnt here? Is my noble friend aware that Haringey Council, under Mr. Bernie Grant's leadership, earlier this week gave another £100,000 interest-free loan to GLEB? Is this correct? Surely this company, if it does not get all these grants from London borough councils, is not trading at a profit and, if not trading at a profit, it has an obligation to go into liquidation at the earliest moment.

§ Lord Brabazon of Tara
My Lords, as to whether I should give advice to the London boroughs on joining the Greater London Enterprise Board, I feel that we spent an enormous amount of time last year on the abolition Bill specifically to give powers of this sort to the boroughs to make up their own minds about what they should do. As regards the £100,000 interest-free loan that Haringey has given to the Greater London Enterprise Board, I am not entirely sure of the details. I understand that the company did change its articles of association in order to allow London boroughs to take over control on payment of £100,000 each. It may be that this is the £100,000 in question.

§ Lord Sefton of Garston
My Lords, arising from the reply of the noble Lord the Minister to the noble Lord, Lord Mellish, does he not agree that the excessive development taking place in the South East of England is denuding now, and will denude completely, any prospect of further investment in the northern regions of this land?

§ Lord Brabazon of Tara
My Lords, I am looking again at the Question on the Order Paper. I fail to see any connection between the question which the noble Lord, Lord Sefton, has asked me and that on the Order Paper.

§ Lord Sefton of Garston
My Lords, if the noble Lord cannot see any relationship between the developments in the South East and developments in the northern regions of this country, I suggest that he should resign.

§ The Lord President of the Council (Viscount Whitelaw)
My Lords, I think that it is for me to say this. First, I do not think that the noble Lord would suggest that I do not know much about the North of this country. If he did, he would be very unwise. Secondly, the point at issue is not that. The Question is about the Greater London Enterprise Board's finances. The supplementary question of the noble Lord had nothing to do with that at all, if I may humbly say so. The rule of this House, recently put forward by the Procedure Committee, is that questions completely wide of the original Question should not be permitted. I think it is my job on behalf of the whole House to try to make sure that that rule of the Procedure Committee is properly upheld.

§ Lord Sefton of Garston
My Lords—

Noble Lords
Order!

Lord Bruce of Donington
My Lords, is the noble Lord aware that the affairs of an independent limited company should not be treated with levity in this 310 House? Does he agree that it is most unwise to use the privilege of this House to allege insolvency against a company until the audited accounts justify that? Is he prepared to say that so far as the Greater London Enterprise Board is concerned he will be unmoved by any party propaganda and will await its finally published and audited results before allowing himself to be made a party to its partisan denigration?

§ Lord Brabazon of Tara
My Lords, I hope that I made clear in my original Answer that we have powers under the Companies Act 1985 to investigate such affairs. We have decided at the moment that we can see no reason to do so, because the police are investigating certain allegations. The police have not asked us for help at this stage. If they were to do so, we should stand ready to assist. That is as far as I can go on this subject this afternoon.