§ 6.4 p.m.
§ Lord Marshall of Leeds
My Lords, I beg to move that this Bill be now read a third time. As many of your Lordships will be aware, I had the privilege of moving the Second Reading of this Bill when it was debated by your Lordships' House on 18th March last. Little did I think that it would be necessary to be troubling your Lordships yet again, but I must crave your Lordships' indulgence while I explain once more the provisions of the Bill and, in addition, provide an indication of what has happened to the Bill since it was given a Second Reading. I do so because I understand that the noble Viscount, Lord Craigavon, intends to press his objections.
I do not propose to weary your Lordships with more information than is necessary for the purpose of this debate, but I need to explain that the purpose of the Bill is to empower the British Railways Board to construct works as part of an exciting new scheme to provide a rail service across the River Thames and to institute what is known as the Thames Link. The effect of this would be to demolish most of the existing viaduct between Holborn Viaduct station and Blackfriars station which at present carries the railway by means of a bridge over Ludgate Hill.
The proposed new railway would drop below ground just north of the existing viaduct at Blackfriars and follow a route just east of the viaduct 1201 and so connect with the Snow Hill tunnel to King's Cross by way of a new station immediately to the north of Ludgate Hill. Holborn Viaduct station would no longer be required and, with the demolition of most of the viaduct, there would be a considerable enhancement of the amenities of the locality to the west of St. Paul's and improved potential for development of an increasingly important area, much of which has lain derelict since being destroyed by bombing during the war.
That will permit the introduction of through-passenger services from the Midland lines to the north of London, and from north of the river to destinations in the southern region. So for the first time there will be regular through-trains through London from places like Bedford and Luton to places like Gatwick and Brighton.
The Bill attracted 18 petitions in Select Committee, many of which were lodged by those objecting to the effects of the board's proposals so far as their own properties, or properties which they leased from the Railways Board, were concerned. Several had a particular interest in the arches beneath the viaduct which will be demolished under the terms of the Bill. Negotiations with petitioners resulted in the withdrawal of all but one of the 18 petitions. In consequence, only the petition of a brewery company, Whitbreads, was referred and considered by the Select Committee which met to consider the Bill on 5th, 6th and 7th May.
Whitbreads are the owners of a freehold pub called the Old King Lud public house which stands at the corner of Ludgate Hill and Farringdon Street, overlooking Ludgate Circus, and, in conjunction with this property, they occupy part of the railway arches immediately to the east as tenants of British Rail. Whitbreads also occupy arches nearer Blackfriars and use these as a wine bar known as Ludgate Cellars. Whitbreads use both sets of arches as part of their business and they strongly objected not only to the acquisition of the freehold of the Old King Lud, but also to the loss of their leasehold interest in the adjoining arch accommodation and Ludgate Cellars.
Notwithstanding the arguments which were advanced by the petitioners to the Select Committee, the decision of the committee was not in their favour as they had been unable to demonstrate to the Select Committee that the relevant portion of the arches should be preserved or that they, Whitbreads, should have any form of special protection or, in relation to the arches, any compensation additional to that provided for in the Landlord and Tenant Act 1954.
It is my understanding that the noble Viscount, Lord Craigavon, is intent on pursuing in debate tonight the same arguments as he deployed on Second Reading. These are founded on the grounds that those who occupy the various arches and have leases from the Railways Board, under which their right to occupy can be terminated in a way which does not provide full compensation under the statutory land compensation code, should be, and ought to be, entitled to some special treatment. It is alleged that the particular circumstances under which those tenants entered into the arrangement to occupy led them into spending money on the basis of a 1202 commercial judgment as to the future use of those arches and how long they could be used for. The tenants now find that they are not going to have as long a term of enjoyment of the accommodation as they originally expected because of the decision of the Railways Board to repossess for the purpose of the scheme which the Bill seeks to authorise.
The terms of the various leases by which the arches are occupied fully entitle British Rail to recover possession of its property, if it is required for operational purposes, by first giving six months' notice and on payment of the compensation so provided.
During the course of the debate on Second Reading I, and indeed the chairman of the committee, explained to your Lordships that if the Bill were to be given a Second Reading it would be referred to a Select Committee, where all matters in dispute would be investigated and where a decision would be made. It is astonishing that out of the 18 petitions lodged, 11 of which were concerned with the consequences of the proposed demolition of the arches, so many of them should have been withdrawn unconditionally by the petitioners without them securing any special terms in their negotiations with the board. It strikes me, and may strike other noble Lords, as singularly strange that with the opportunity having been presented for opposition to be pursued before a Select Committee, not only was that opportunity abandoned at the last minute but also the petitioners' objections are apparently to be rehearsed once again this evening.
I understand it to be the intention of the noble Viscount to press the case on this Third Reading, and I also understand that the occupiers of the arches have every intention of pursuing their opposition in another place, so delaying the passage of the Bill and the ability of the railways board to start work on this imaginative project.
On the one petition which was before the Select Committee that committee discharged its obligations to the full. It produced a decision which is clearly relevant to all those who claim that they will be adversely affected by the repossession of the arches which they occupy. Those tenants, on whose behalf I understand the noble Viscount will be speaking, entered into freely negotiated leases containing clauses providing fur their early determination in certain circumstances which have now come about. All those tenants must have been aware of the possibility of their leases being determined prematurely and they took possession of their premises in the full knowledge of the compensation which would in that event be payable.
With that possibility now becoming a reality, they seek in my view to persuade Parliament to renegotiate the terms of their tenancies. Why should Parliament intervene to rescue tenants when their commercial judgment of the risk freely taken has been shown to be flawed? Nothing which has happend since we debated the subject on 18th March has in any way led me or British Rail to feel that there has been any alteration of circumstances to justify a change of attitude by the board or by Parliament. The case is quite the contrary. The decision of the Select Committee has indicated that the attitude and 1203 policy adopted by the board is the correct one and I shall be doing this House no service if I were now to do more than commend to your Lordships the words spoken by me on Second Reading. I hope that your Lordships will now endorse those words by allowing the Bill a Third Reading tonight. I therefore commend the Bill to the House. I beg to move.
§ Moved, That the Bill be now read a third time—(Lord Marshall of Leeds.)
§ 6.15 p.m.
§ Viscount Sidmouth
My Lords, as a member of the Select Committee I have nothing to add to what the noble Lord, Lord Marshall, has said on the question of compensation and the objections that have been raised. They were listened to most patiently and ably by the chairman of the committee, the noble Lord, Lord Nugent, and the other members of the committee, and we were completely satisfied that the case had not been made.
My main purpose in speaking is to raise in general terms two points on the scheme which lies behind the Bill. It will be common knowledge that British Rail has recently increased its share of the daily commuter traffic coming into London at the expense of road-borne traffic, principally cars. Some figures were published recently which showed that to be the case.
I have no doubt at all that the scheme will enhance that process which all of us feel is very necessary in view of the traffic conditions in London. It will provide an access by rail both from North and South of the city which will go virtually direct into the City of London or into a new station very close to it. That will provide good and easy access to a large number of places of work. I have no doubt at all that it will increase the process of people abandoning their cars and coming into London by rail.
Having said that, it is right to point out that this link across the City of London is a rather unique facility. As is well known, the railways developed in private hands and came into London from different quarters. All the railway companies built their terminals in London, and even Brunel failed to realise that eventually the network would grow and that an interchange between the systems would be required. At the end of the day he had to alter his gauge to meet that of the others.
However that same situation applies in other capital cities in Europe and in the circumstances which are now arising the lack of a direct route through the city for through traffic is becoming a relevant factor. Indeed the Bill which we have just passed in this House—the Channel Tunnel Bill—will in my view create just such necessary conditions.
In debating that Bill we heard a great deal about the need to overcome the North/South divide. In practical terms that comes down to allowing the free-est possible access for trains, both passenger and freight. I emphasise freight because that has emerged as being even more important than passenger traffic in general financial terms in the traffic going to and from the Channel Tunnel.
British Rail in its wisdom has felt that it would not be justified and it would cost too much to bring this 1204 link up to a gauge and to a standard of operating which would allow Channel Tunnel traffic to pass through London. British Rail is justified in making that point at this stage as on the traffic forecasts which have been made it will undoubtedly be able to manage with the rather less useful facilities it has going round via Olympia. However I feel that that traffic, particularly the freight traffic, has been underestimated. Only last night a report commissioned by Transport 2000 was published which gave some very interesting figures of potential freight traffic as well as the traffic which will naturally come to the railways if they simply do nothing further about the link or continue to operate with their existing technology.
The report gave details also of potential traffic that would accrue if rather more advanced technologies were developed. Approximately three times as much freight traffic could accrue if these methods of working were adopted. They will obviously be considered by British Rail in the six-year period, which, I emphasise, is none too long for doing the kind of work that is necessary. I refer to combined transport operations, which are quite common on the Continent and not yet common here because the conditions do not at present exist.
One interesting figure in the report is that 40 per cent. of the road traffic originating in this country—imports and exports to the Continent—travels more than 800 kilometres and 21 per cent. travels over 1600 kilometres. This is an extraordinarily long haul. That level of traffic must be well within the grasp of British Rail if it takes a forward-looking attitude. I refer not only to its technology—it will need a certain amount of improvements and new methods of working—but particularly to its rating policy. As is well known, railways can make a very aggressive attack on long-range traffic of that order and should be able to capture it.
On the technical side I think that it will eventually become clear that British Rail must try to get a route from Folkestone via London to the North that has been brought up to a better standard, one more comparable to the continental loading gauge, so that at least traffic can be channelled to and from the North. At that point the link through Snow Hill tunnel, which could give good interchange facilities to the east and west coast mainline, should be looked at again to ensure that the divide between North and South at least is bridged in that way.
§ 6.32 p.m.
§ Viscount Craigavon
My Lords, the noble Lord, Lord Marshall of Leeds, said that I intended to press my objections. I hope that no one was led to believe by that that I intended to divide the House. I have never given that impression, no one has asked me that and it would be improper for me to do so. The noble Lord also told the House and me what kind of speech I was going to make, and that I would repeat the arguments of Second Reading. Again, that is not the case, as will be seen. I hope to make a constructive speech based on what has happened since Second Reading and on information that emerged in Committee.
1205 It is proper for someone like me to speak on Third Reading. This time last week, on Third Reading of a private Bill, the Hampshire (Lyndhurst Bypass) Bill, we had a very good debate which went on for two hours with about 10 speakers. It was most productive. We also had an interesting speech just now from the noble Viscount, Lord Sidmouth. I hope that the House will take my speech in the spirit in which it is delivered.
To make my position clear, as I stated on Second Reading, I am concerned with a group of arch-holders under a line being redeveloped. I am a friend of one who uses three of these large arches as a restaurant with snooker tables. I give now my own interpretation and understanding of the present situation.
The group of arch-holders whose side of the case I am trying to expound are running their businesses on a minute scale compared to the might and muscle of British Rail. They have nothing approaching the back-up resources and expertise of British Rail. It is not surprising that they do not choose to step into the ring with British Rail at every possible opportunity.
At one time the intention was to argue their petition upstairs before the Select Committee of your Lordships but, as events unfolded, a perfectly proper decision was taken to withdraw the petition. One main reason was the prospective cost. I personally was rather astounded at the likely cost of appearing in this way properly represented before your Lordships' Committee. It seems a reasonable decision to await the outcome of a petition submitted to Messrs Whitbreads, which had similar although, I stress, not identical elements to those of the arch-holders with whom I am concerned. Whitbreads, unlike my friend, is an example of a large firm which would not have to think twice about the cost of matching legally the big guns of British Rail.
When we see on the Order Paper of our House a private Bill with the words "British Rail" in the title, we might think it fair to assume that this was British Rail trying to rationalise, to tidy up or to improve small parts of its network. If one looked at the more detailed preamble in the case of this Bill, one might still hold that belief. However, by far the largest part of the Bill is concerned with property development—over £450 million-worth of it in the neighbourhood of Blackfriars and Holborn Viaduct stations. I have it on the highest authority in a letter that I shall mention later written by the chairman of British Rail himself that,the development is in effect speculative".That is the nature of the vessel that is sailing before us named so disarmingly and simply "British Railways (London) Bill."
Parliament is entitled to look very closely at what it contains. I shall try to avoid going into too much detail but shall deal mainly with matters that have come to light since Second Reading. I have three main points to make. They are all concerned with the Blackfriars/Holborn Viaduct element. That is where the arches with which I am concerned are sited.
In brief, the problem arises from the fact that a six-month break clause in the leases of the arch-holders has been invoked as a result of the claimed 1206 need for redevelopment by British Rail under the Bill. Investment and goodwill in these businesses, built up over many years, often with the encouragement of British Rail, is likely to evaporate, the compensation offered being minimal, often barely enough to meet redundancy requirements of staff.
The first of my three points centres round the speculative nature of the developments. My estimate on Second Reading was that, out of a total of £400 million, only about £30 million was concerned directly with the British Rail work. I now revise both those figures upwards, the first to a total of about £500 million, of which £40 million is directly for British Rail work. It turns out that almost all that £40 million devoted to British Rail work is to be found from the developers who will then reap the whole gain or, in very unlikely circumstances, loss, whatever the outcome of the scheme.
It follows from that—this is my central point—that the level of compensation paid to arch-holders is directly, that is, 100 per cent., reflected in the level of profit to the developers. British Rail would not gain or lose at all by what compensation is paid. If British Rail can evict all arch-holders with minimum compensation, the consequent gainers will be the developers.
My evidence for this is clearly to be found in a letter written by the chairman of British Rail, Sir Robert Reid, to the right honourable David Howell, who had forwarded the concerns of the constituent, who was also an arch-holder. The letter is dated 15th December 1986, but came to light only after Second Reading of the Bill. Perhaps I may quote two sentences from that letter:I turn now to the allegation of 'speculative property development'. As I have explained, this scheme is not being carried out at BR or public expense so that whilst the development is, in effect, speculative, only Rosehaugh Stanhope stand to lose or gain, whatever the outcome of the scheme".That is my clear evidence from the top that to the extent to which any compensation to arch-holders for their investment and goodwill is kept down the sole beneficiary will be the developer.
The noble Lord, Lord Marshall, quoted some words of mine at Second Reading when I said:This Bill provides for what is essentially a private property redevelopment mainly for the benefit of private investors". [Official Report, 18/3/87; col. 1503.]The noble Lord said:That is not so and is seriously denied by British Rail". [Official Report, 18/3/87; col. 1506.]I leave others to judge the nature of the development.
The extent to which others are able to judge the nature of the development brings me to my second main point. Although this vast development is predicated on British Rail's requirements being funded by a developer, we learnt from what was said in Committee that BR has not reached any written agreement with a developer. Thus it could be maintained that not only is the development speculative but also that this whole Bill is speculative. It is not unreasonable to say to British Rail that no further progress should be made with the Bill until it has a developer firmly committed in writing. In principle, it is still possible that any existing developers involved could withdraw or be forced by 1207 totally other considerations to withdraw. Much of the time spent on the Bill by this House would then be wasted.
My third main point emerges partly from what happened in the committee when the question was raised regarding whether the whole project was developer-led and also what status evidentially should be given to the declared requirements of a developer in absentia. It would seem desirable, when a developer is found and committed in writing on the project, that the promoters should give us an assurance that a senior representative of the developer should be available to give evidence about his intentions, his requirements and his financial forecasts.
Finally, may I repeat that I am in favour of British Rail creatively developing sites such as the Blackfriars-Holborn Viaduct site. I am in favour of that being done as speedily as it properly can be done. As everyone knows, some of the sites have been derelict for far too long. However, I am not in favour of British Rail using its considerable power and muscle to clear such sites of small businesses in haste and handing the benefits of so doing directly to developers.
I understand that the noble Lord, Lord Underhill, also approved the general thrust of the Bill and was in favour of development. I hope that he will be sympathetic to the problems of small businesses. In the case of the arches, they are occupied by small businesses with no vast resources or other branches to fall back on. They have generally been encouraged by BR to invest and develop and to serve the locality. I hope that British Rail will consider its position over the summer months and feel able, in a reasonable manner, to offer fair compensation to the arch-holders.
§ Earl Attlee
My Lords, I apologise that I did not have my name down to speak. I am grateful to the noble Lord, Lord Underhill, for allowing me to do so. I declare an interest in that I shall be in receipt of a pension from British Rail, and I am also a member of the Press Club which will be disenfranchised if this Bill goes through. I know the owner of Duffers, in which the Press Club has premises.
I apologise for not being present at the beginning of this debate and assure the noble Lord that I had no intention of showing any discourtesy. I only wish to say that I fully endorse what the noble Viscount, Lord Craigavon, has said.
§ Lord Underhill
My Lords, I have only a few remarks to make. The noble Viscount, Lord Craigavon, has referred to what he regards as my general support of the project. At Second Reading I made it quite clear that I fully agreed with the description given by the noble Lord, Lord Marshall of Leeds, when he said that this was an imaginative enterprise and an exciting project. There is not the slightest doubt that providing the link from the Midlands to the South-East has the support of everyone, including that of the noble Viscount. When he first began to speak of the development, I thought that he was going to criticise British Rail for linking 1208 with development schemes. I was very pleased, as his speech unfolded, to see that he is not at all critical of the general attitude of British Rail in arranging developments on such sites. Travelling to your Lordships' House, I pass Liverpool Street every day and there is massive development going on there. That is good for British Rail and I hope its finances will be assisted at the end of the day.
The other point that I made at Second Reading was that I hoped that the Select Committee would give general approval to the project (as they have) and I hoped that it would give the most serious consideration to the question of compensation for the persons to be removed from the arches. From what I have heard today it would appear that the committee gave consideration to that matter. However, I believe that I heard the noble Viscount say that the petition was withdrawn.
§ Viscount Craigavon
My Lords, the petitioners withdrew to fight another day. There is no direct comparability with the Whitbread case; there was similarity but not direct comparability. It was said that there was a test case, partly of how Whitbreads got on. However, my petitioners did not come to any agreement with the promoters. They are coming back to fight another day.
§ Lord Underhill
My Lords, if the petition was not before the committee, that places my second point in some difficulty. I wished to ensure that adequate consideration was given by the committee to the problem of compensation. I have great sympathy with the position of the tenants of the arches. We have heard, not only from the noble Lord, Lord Marshall, but also from the noble Viscount, Lord Sidmouth, as to procedures of the committee. If the whole question is really one of procedure, whereby certain persons find it difficult to meet the cost of coming before the committee, that is another matter entirely. That would have to be dealt with elsewhere.
My first point was that the general project should be approved. However, on my second point it would appear that the onus is on those who withdrew their petition and that removes any criticism I might have made.
§ Lord Brabazon of Tara
My Lords, it may be helpful at this point if I briefly intervened to restate the Government's view on the Bill. I apologise to noble Lords that my name was missed off the list of speakers.
As my noble friend Lord Davidson said at Second Reading, the Government have considered the content of the Bill and have no objection in principle to the powers sought by the board. It is for the promoters to persuade Parliament that the powers they are seeking are necessary and justified.
The Department of the Environment has one outstanding point on the Bill in connection with the impact of the development on Export House, 50 Ludgate Hill, on which negotiations are continuing with the promoters. It is hoped to resolve the matter satisfactorily. Those business and other interests which remain dissatisfied with the provisions of the Bill will have a further opportunity to petition against 1209 the Bill in another place. I recommend that the Bill be allowed to proceed.
§ Lord Marshall of Leeds
My Lords, I am greatly obliged to my noble friend. Lord Brabazon of Tara, for his statement. I am also obliged to the noble Viscount, Lord Sidmouth. I believe that the points he raised will he noted by British Rail and I am sure that it will give proper regard to them.
It is true that British Rail has increased its carryings in this particular area, as the noble Viscount said. As I said at Second Reading, the Bill will be welcomed by many of the commuters who pour into the City every day to work. That matter was touched upon by the noble Viscount, Lord Sidmouth.
I listened very carefully to the case put forward by the noble Viscount, Lord Craigavon, but I could not detect any new matter which appeared in his Third Reading speech compared with his Second Reading speech. Certainly, he advised that Parliament is entitled to look very carefully at what is going into the Bill. It comes a little hard to listen to such a statement when the friends he represents were given every opportunity to explain and plead their case to a Select Committee. Yet of the 18 petitioners no fewer than 17 withdrew unconditionally and rather suddenly without securing any special terms for their withdrawal. In fact they abandoned their petitions.
Noble Lords set up a Select Committee to consider these matters and expect that they will be treated with proper respect by those who have objections to the matters referred to in a particular Bill. However, if the great majority of petitioners unconditionally withdraw and disappear, it comes a little hard to hear today that Parliament is entitled to look very carefully to what is going into the Bill. One might almost say that they have had their opportunity but we know they are taking the opportunity in another place.
I do not wish British Rail to be thought to be guilty of any misleading intention in regard to this Bill or any site which is affected by it. I was quite open a few moments ago when I said that Holborn Viaduct Station would no longer be required, and with the demolition of most of the viaduct there would be a considerable enhancement of the amenities of the locality to the west of St. Paul's and improved potential for the development of an increasingly important area much of which has lain derelict since being destroyed by bombing during the war. Those were my words.
However, I said at Second Reading, and I repeat now, that property development is not the prime reason for the Bill. The prime reason is a matter of operational requirement. The name Whitbread was again canvassed after I had mentioned that point. There is a significant difference in the position of Whitbread in that it was the only freeholder. Of course none of the tenants who were tenants of the arches was a freeholder at all.
The noble Viscount, Lord Craigavon, spoke first, second and third about compensation. Compensation rules and codes are laid down and British Rail will abide by its obligations under those codes. If the Select Committee had thought it was 1210 being unfair and should offer more, it would have included a recommendation that that should be so. I repeat that I see nothing new in the three matters raised except that they all refer to compensation.
To put the matter very shortly, if anybody takes a lease or a tenancy of an arch from British Rail in all cases they sign a lease or tenancy agreement, one of the provisions of which provides that British Rail can re-possess by giving six months' notice without compensation, if it requires recovery of possession for operational purposes. When you enter into an arrangement of that sort you must be slightly out of your mind if you take a commercial risk to spend a vast amount of money on the arch which you occupy.
At Second Reading I remember that the noble Viscount alleged that a friend of his had spent probably half a million pounds. All I can say is that anyone who does that is in my view committing a grave commercial error. He cannot expect that British Rail will compensate the amount of money he has very unwisely spent. It is a sad case, but he is on six months' notice, no more and no less. It is a matter for commercial judgment. If your commercial judgment is wrong it is a matter for the person who made the mistake. I am sorry to say that.
I am obliged to the noble Earl, Lord Attlee, who did no more than support the arguments of the noble Viscount on the basis that friendship was one of the arch tenants. I am greatly obliged to the noble Lord, Lord Underhill, for the responsible way he treated this matter not only on Third Reading but also on Second Reading. I commend the Bill to your Lordships.
§ On Question, Bill read a third time, and passed, and sent to the Commons.