HL Deb 18 March 1987 vol 485 cc1498-507

8.5 p.m.

Lord Marshall of Leeds

My Lords, I beg to move that this Bill be now read a second time.

This Bill is promoted by the British Railways Board with the consent of the Secretary of State for Transport, pursuant to Section 17 of the Transport Act 1962. Its purpose is to develop further an important railway corridor across central London.

I am delighted to be associated with this Bill on a number of counts. First, for some time I was a member of the British Railways Property Board; and, secondly, I have been associated in the past with various studies of the government of London and Greater London. Any opportunities to develop prosperity and ease of movement around this great City in my view are to be welcomed. Lastly, I still work and move around in London for some four days a week. I believe that this Bill will be welcomed by many of the commuters who pour into the City to work each day.

As a result of powers granted by Parliament under the British Railways Act 1986 the railway line that for the most part used to run underground between Blackfriars and Farringdon is currently being reinstated and this will permit from May next year the introduction of through passenger services from the Midland lines on the north of the river to a range of destinations in the southern region. British Rail are calling this service the Thames Link.

For the first time there will be regular through trains from Bedford and Luton to Gatwick and Brighton, and, for instance, from St. Albans to Croydon and from West Hampstead to Bromley. These are exciting opportunities for railway passengers and they will be made possible by the restoration of a small link in the railway system which has been disused since 1968. In fact, it has not seen regular passenger services since 1916.

Following the grant of these powers, further opportunities to enhance and improve the potential of this cross-London link have become clear. It is for those reasons that the board is seeking further powers in the Bill that is currently before your Lordships.

The principal work—work No.1—is the realign-ment of the railway at Ludgate Hill in order to relocate Holborn Viaduct station beneath the ground on the cross-London route. At present it is effectively on a branch line and therefore will not be served by the Thames Link trains. An opportunity now exists to construct a new station below ground, beneath the existing Holborn Viaduct station. The railway will be diverted for a short distance to the east of the present line, to run in a shallow tunnel beneath Ludgate Hill. The new station will be less cramped and more modern and will provide direct access to the City for passengers, including the disabled, on the Thames Link services.

It is hoped to start construction not later than the middle of 1988 and to complete the works approximately 15 to 18 months later. The greater part of the existing railway viaduct between Queen Victoria Street and Holborn Viaduct will be taken down, as will Holborn Viaduct station, and the bridge over Ludgate Hill will disappear. The scheme will also provide an opportunity to improve the locality by releasing land for redevelopment in an area of the City which, since the war, has lain somewhat neglected. It was only by realising the potential for redevelopment that it has been possible to fund the new station on the link.

I realise that there is substantial concern among the tenants of properties that are directly affected by this Bill and among the occupiers of adjoining properties. Clearly there will be disruption and inconvenience associated with rebuilding. but I am assured that the board will take all proper measures to minimise noise and inconvenience during the construction period.

I am conscious that there is also concern about compensation. As a statutory corporation, the board takes the view that it should not depart from the statutory code. The board considers that changes to the compensation code should be brought about only as a result of a change in the general law. However, for a number of British Rail-arch tenants, the measure of compensation will be governed by the terms of their leases. The leases arc not all in identical terms but, broadly speaking, they provide that if British Rail consider that they need to repossess the demised premises for the purposes of their business, they may do so by giving six months' notice to determine the lease. The prospect of the scheme has of course caused understandable concern to British Rail's tenants, and some of them have petitioned against the Bill, seeking more generous compensation terms than provided under the leases. However, your Lordships will know that this is a matter which the committee considering the Bill will want to address.

I wish to make just one comment. Would it not be unreasonable for those tenants, who have freely entered into leases in the knowledge of the existence of the provisions for early determination, now to seek to avoid the consequences of early determination by contending that they are special cases? I do not wish to be tendentious, but British Rail feel that an agreement is an agreement and should be so regarded, and honoured accordingly.

Works No.2, 3A and 4B in the Bill seek powers for important links to be provided to other parts of the railway network north of the Thames. Works Nos. 3A and 3B provide for the restoration of two tunnel connections at King's Cross—the hotel curve and the York Way spur. They would connect the Thames Link directly to the east coast mainline immediately to the north of King's Cross. That would allow through services to run from the Southern Region to north London, Hatfield, Hertford, Stevenage, Peterborough and indeed Cambridge after the recent and welcome announcement in another place of the approval of electrification north from Royston.

Work No.2 proposes similar connections at West Hampstead to the north London line, which in turn will provide a link with the west coast mainline for services to Watford, Rugby and Northampton. The board has decided that, while that is still a long-term aim, it could not move to activate those powers within five years and so it will seek leave in Committee to withdraw those measures from the Bill.

Work No.4 is the final measure. That small but important improvement provides for an escalator linking the low-level station at King's Cross with the mainline station. It will run from the existing subway which links the low-level station to the tube lines and will provide an all-weather route for the many passengers British Rail expect will use that new route from the densely populated markets south of London to join the mainline services from King's Cross to the North of England and to Scotland.

In conclusion, this is an exciting and important opportunity for British Rail and its customers. The volume of business on Network SouthEast has grown by 9 per cent. over the past two years. Its management is dynamic and seeking to tap new markets and to serve its customers better. The scheme that we are considering is only one of a number of measures designed to reintroduce passenger services to electrified routes, introduce new vehicles and improve standards of customer service. However, I am sure that your Lordships will recognise the significance and potential of the proposals contained in the Bill and the importance that railway managers attach to their successful completion. I should now like to move the formal Motion for Second Reading. I shall try to answer any points raised by your Lordships when I reply.

Moved, That the Bill be now read a second time.—(Lord Marshall of Leeds.)

8.15 p.m.

The Chairman of Committees (Lord Aberdare)

My Lords, I am sure that the House is grateful to the noble Lord, Lord Marshall of Leeds, for explaining so clearly the Bill's provisions. I shall say a few words on procedure. There are at present 18 petitions against the Bill, many of them, as the noble Lord said, from occupiers under the viaduct which will he demolished if the Bill becomes an Act. If your Lordships give the Bill a Second Reading tonight, it will be referred to a Select Committee, and that committee will carefully consider the evidence put before it by the promoters and the petitioners.

I should explain, as I have explained on numerous occasions before, that if your Lordships give the Bill a Second Reading, as it is a Private Bill, the House does not necessarily accept the principles behind it. A Second Reading of a Private Bill merely decides that the Bill should be referred to a Select Committee for further consideration. That committee will then decide whether the Bill should proceed and, if so, whether and how it should be amended. I would therefore advise the House to give the Bill a Second Reading tonight so as to allow it to go to a Select Committee which will in due course report back to the House.

8.16 p.m.

Viscount Craigavon

My Lords, I am grateful to the noble Lord, Lord Marshall of Leeds, for the way in which he introduced the Bill. I shall say something about the special cases that he mentioned. I am glad to have the opportunity to raise the problems arising from the Bill on the Floor of the House and to be able to draw them to the attention of the Select Committee. The problems to which I should like to refer affect 10 of the 18 petitioners against the Bill—those who are represented by Rees and Freres. They are each concerned with one or more of the arches beneath the railway line between Blackfriars station and Holborn Viaduct station.

If the Bill goes ahead, the main problem concerns whether the level of compensation to be received by those petitioners is fair, just and reasonable. None of them wants to wreck or stop the Bill. But they are concerned that, given the special Circumstances and British Rail's actions, there should be adequate compensation on a proper scale to reflect the full market value of the various businesses.

I should say that I do not represent those petitioners, and that anything I say is my interpretation of what I have learned about the matters. My attention has been drawn to this situation by one of the petitioners. who is a friend, and who has invested (as I shall mention later) almost £500,000 in three of the arches, to form a successful restaurant with snooker tables.

I shall try to state in a few sentences the basic problem that has arisen for those tenants. One part of British Rail has, until recently been actively encouraging the development of those arches and investment, and granting leases of normal commercial length. However, those leases all contain (as is British Rail's invariable practice in such cases) a six-month break clause in case the premises are required for redevelopment for the purposes of the undertaking. I shall return to the phrase "for the purposes of the undertaking".

Now, suddenly, under the terms of this Bill, those arches are scheduled to disappear. The initial basis of compensation, taking into account the existence of the six-month break clause in the leases, turns out to be derisory. In many cases, it would not even cover the normal staff redundancy entitlement. The petitioners are therefore seeking amendment of the Bill to provide fair, realistic and adequate compensation for the damage that they will suffer as a result of the Bill.

I shall refer to the background to the situation. It should be remembered that although the Bill is a British Railways Bill, in this case the element of property development heavily outweighs that concerned merely with alterations to the British Rail system. I understand that out of a total of £400 million which may be spent only about £30 million is concerned directly with British Rail work. I understand that British Rail are in partnership with a number of property companies. In the proper parliamentary process of the Bill, they request various compulsory purchase powers, alterations to public roads, and so forth, all of which will enable them, one hopes, to make the best use of all the land available.

I say genuinely that I am not against any of this in principle. I am not against the Bill. I mention all this to show the very small part played by these arches which are to be demolished to make way for this scheme. I would want to encourage British Rail to make best use of its spare land wherever it is, providing that it was done sensitively and responsibly, taking due account of its obligations to any third parties involved, however small.

Perhaps I may now briefly describe how these arches came to be developed and the context in which their occupants came to have reasonable expectations that it was prudent to plan for the longer term. Again, I would commend British Rail for recently encouraging the use of its arches generally. One has seen some delightful and considered developments in different parts of the country which seemed particularly appropriate to such arches.

The arches to which I have been referring, and which are of considerable size, were mainly developed in the last 20 years from dirty shell condition. Substantial sums of money were spent creating proper and attractive working environments in what was a rather run-down area. Here again I would commend BR for trying to put life back into what was a rather derelict area by encouraging a number of mainly service firms to meet the needs of local office workers. In addition, the numbers employed in these small businesses probably total about 150 people.

For example, the restaurant which belongs to my friend has a membership of 2,500. It has recently incorporated within it the London Press Club, which comprises about one-quarter of the membership and which had been made homeless from its previous premises. About one-third of the space is devoted to snooker tables. Part of the substantial figure of half a million pounds for development costs that I mentioned earlier was incurred by adding an extra level to the premises.

I mention this detail to show that this is not the old image of arches for fly-by-night second-hand car dealers. Indeed, I imagine that is just the image that British Rail was trying to get away from. These arches were regarded as successful models of what arches should be. British Rail sent interested people, and even a television crew, to look at them.

New leases of some length were being directly encouraged and granted until recently. In a couple of cases that encouragement took the form of BR itself investing money in those businesses. With this background, there was no warning, either explicit or implict, that longer-term investment was unwise. The opposite was in fact true. A railway line above the arches was being developed as part of a scheme that is to be opened in May 1987. It is called the Snow Hill link. This scheme is estimated to have cost many millions of pounds. With regard to the line above these arches this investment will have to be written off when the development proposed in this Bill is started. Paradoxically, BR currently has available a very attractive promotional colour leaflet entitled Railway Arches describing their virtues, featuring colour photographs of five, presumably ideal, developments and mentioning their locations. The paradox is that two of those five are due to be demolished under this Bill.

That sums up the dilemma of British Rail. It is, rightly in my opinion, encouraging the use of arches hut, while it is reserving its position by putting in six-month break clauses, it also wants to encourage longer-term investment and development for the benefit of all. If the six-month break clause is generally to be in this kind of lease, genuine longer-term investment can be encouraged only if all tenants have a justified confidence in the utmost good faith of British Rail and in the signals that they receive in various ways as to the intentions of British Rail. Where a sudden change of course by BR takes place against that background, it is only equitable that the treament of those affected should be seen to be completely fair, especially, if I may say so, in the case of small businesses which normally might have no other premises or resources to fall back on and which could be ruined by anything less than full compensation at market value.

As I mentioned before, in this case it also needs to be considered whether the proviso attaching to the six-month break clause—namely, the redevelopment being for the purposes of the undertaking—is properly applied. That will clearly be an important matter for the Select Committee to consider.

Finally, if the Select Committee of this House felt that it was right that full compensation be stipulated in the Bill, this would not be without precedent. Perhaps I may briefly mention two recent similar Bills where this was done. Detailed and special provision was made in both cases. First, it was done in Section 16 of the London Transport (Liverpool Street) Act 1983, where certain tenants of London Transport were given entitlement to compensation over and above that provided by the compensation code. The second example is to be found in Section 21 of the London Docklands Railway Act 1984, where provision was introduced to provide very substantial compensation of a novel kind to occupiers of premises used for specialised printing equipment.

In the case of these two precedents those two Acts provided for railway developments essentially for the public benefit. On the other hand, this Bill provides for what is essentially a private property redevelopment mainly for the benefit of private investors. There is no reason why those investors should enrich themselves at the expense of the tenants who are petitioning against this Bill.

I hope that I have shown where a reasonable person might expect the duties of British Rail to lie in this special case. I hope that the Select Committee will consider all these matters very carefully and seriously

8.27 p.m.

Lord Taylor of Gryfe

My Lords, I am happy to be associated with the noble Lord, Lord Marshall, with whom I served for a number of years on British Rail property board. I am also happy to have this opportunity of paying a compliment to the management of British Rail for developing this imaginative scheme. It provides for improved rail services in the City and a new rail link across the centre of London. The service will provide direct links from 44 stations south of the river to King's Cross for the consequent link to the railway service that travels north of the Border. It is a reflection of the imaginative and energetic management of British Rail in this area.

One of the matters that used to be the subject of great public comment and criticism was the failure of British Rail to release sites and to develop them commercially. The noble Lord, Lord Marshall, will agree that a good deal of our time on the property board was spent considering such references. This Bill does precisely that. I do not think that there should be any apology for the fact that British Rail are releasing a site for commercial development because British Rail will benefit from that investment in an area which is rundown and neglected. There is therefore a good environmental reason for the development that is envisaged in the Bill. The Bill provides for release of a site. It provides for a new station. In these days the provision of a new station is certainly to be welcomed when one has been accustomed to a number of rail and station closures over the years. I certainly commend this Bill to your Lordships.

With regard to the detailed comment of the noble Viscount, Lord Craigavon, there was a certain reflection on the integrity of British Rail. There was an implied suggestion that they had misled people who had spent a lot of money on the arches. Certainly British Rail have sought over the years to develop their arches, which were neglected, slummy, dirty and scruffy. Suddenly they discovered that to let these arches was a new source of property revenue. Some of the arches have been transformed. For example, there is the one which has been described.

I should like to say in relation to British Rail that at no time did they mislead the occupants of these arches. The occupants of the arches were fully aware of the terms of the lease before they engaged in the substantial capital investment. It is quite clear that they had, and understood, the leases. I have no doubt that the question of compensation, which was raised by the noble Viscount, will be considered in due course in the discussions that will take place. I do not think we should discuss the terms of the agreements and the compensation. These will be the subject of serious negotiation.

Consequently, I certainly support the Bill. The proceedings of the Select Committee will take care of some of the issues that have been raised.

8.31 p.m.

Lord Underhill

My Lords, I should like to thank the noble Lord, Lord Marshall of Leeds, and congratulate him on sponsoring the Bill and also on the way in which he explained its contents. The fact that I am going to be very brief does not mean that I do not regard the Bill as an imaginative enterprise on behalf of British Rail, as it has been described. I think the noble Lord, Lord Marshall, described it as an exciting project, and with that I would thoroughly agree. The opportunities for commuters, not only with a cross-London link, but also the link between the Midlands and the south-eastern network will be imaginative and of great value to the general public.

I know the use to which some of the arches of British Rail have been put over the years. I did most of my voluntary political work in Leyton. I know the arches in Leyton and Walthamstow and the type of use to which they have been put. They are valuable to very small businesses. When one listens to the account that the noble Viscount, Lord Craigavon, was given of the development of the arches, it appears that there have been some imaginative schemes.

I should like to feel that when the Bill comes back to your Lordships' House from the Select Committee its general proposals will have met the approval of the committee and will be for the approval of your Lordships. I should also like to feel that the points raised by the noble Viscount will have been given the most serious consideration. He has put forward a case, not in any way to damage the scheme, but where reasonable compensation should be given. I hope that the Select Committee will be able to approve this generally imaginative project, and will also look at the question of fair compensation for the people who have developed these properties, obviously with the consent of the board.

Viscount Davidson

My Lords, speaking for the Government I shall be briefer than the noble Lord, Lord Underhill.

The Government have considered the content of the Bill and have no objection in principle to the powers sought by the railways board. Indeed, we broadly welcome the proposal in as much as it would enable British Rail to offer improved cross-London direct services. My department will need to pursue a few points with British Rail, but I see no reason why these should not be resolved satisfactorily.

As the noble Lord the Chairman of Committees said, there are 18 petitions against the Bill. If the Bill is given a Second Reading, the petitioners will have the opportunity to present their objections to the Select Committee. I have to say to the noble Viscount, Lord Craigavon, that the committee will be in a better position than we are tonight to examine the detailed issues involved, since it will have the added advantage of expert testimony. However, I am sure that it will consider everything that has been said in debate today.

I therefore recommend that the Bill be given a Second Reading.

Lord Marshall of Leeds

My Lords, I am very grateful to my noble friend the Lord Chairman of Committees for the advice he gave to the House, and also to the noble Lord, Lord Taylor of Gryfe, with whom I have worked for many years, for his words of support. I am also grateful to the noble Lord, Lord Underhill, for the very constructive approach he brought to bear and also to my noble friend Lord Davidson for what he had to say. Perhaps I can leave until last my remarks concerning the noble Viscount, Lord Craigavon, because I thought I had made clear in opening that the question of compensation was twofold.

In so far as the compensation code is laid down by a statute, that is a matter for statute, unless somebody wishes to change it. In the event of compensation being provided by the terms of one of the leases, then the terms of the lease must apply as to compensation.

I very much regret the noble Viscount saying—I hope I quote him fairly—that the property redevelopment outweighs the operational considerations. That is not so. Nor is it the case that the Bill is being promoted—and I quote the words of the noble Viscount—"mainly for private investors". That is not so and is seriously denied by British Rail. I have to say that British Rail wrote to the noble Viscount some two or three weeks ago inviting him to discuss the problems as he saw them concerning the people on whose behalf he has spoken this evening. British Rail has received no reply from the noble Viscount, and, so far as I know, has never met him. I also asked if l could see him, but there has been no reply—

Viscount Craigavon

My Lords, to set the record straight, I did have an informal conversation with the noble Lord, Lord Marshall, as soon as I knew that he was taking the Bill. I have implied that I am very much an amateur in this field, and the noble Lord and I know that the various sides have been having informal negotiations. Therefore, there would be absolutely no point in me, as a relative amateur in that field, joining in very technical discussions concerning property and redevelopment.

Lord Marshall of Leeds

My Lords, I am very grateful to the noble Viscount and I accept fully what he says. However, it might have been more helpful had a discussion taken place between British Rail and the noble Viscount before the debate this evening.

To say that British Rail gave no warning that long term investment was unwise—and I quote the noble Viscount's words—is really a long way from the situation as I see it. If a friend of the noble Viscount wishes to spend half a million pounds on the beautification or refurbishment of railway arches, it would be open to him to approach British Rail, inform it of his intention, and say "Well, do you think in the Circumstances I am being wise? Or have you proposals which would negative or nullify, or make valueless, the money I propose to invest in the refurbishment of your railway arches?" So far as I know there was no approach to British Rail by any of the friends of the noble Viscount. Had they approached British Rail, the reply would have been, "Well, we have operational intentions at some unidentifiable time, and if you ask our advice we say you should not commit that amount of money in case we have to do what the lease says we can do—that is, to give you six months notice of the termination of demise." Anyone sitting on a six months notice is really not so wise to spend half a million pounds on property out of which he may be expelled on a six months notice by British Rail for operational reasons.

Having said that, compensation is a matter for the Select Committee. I regret having to reply in these terms because the matter of compensation is not a Second Reading matter and should not have been raised this evening. It is a matter which will of course be amply discussed and explored by the Select Committee in due course. I commend the Bill to the House.

On Question, Bill read a second time, and committed to a Select Committee.

House adjourned at twenty minutes before nine o'clock.