HL Deb 08 February 1995 vol 561 cc290-300

8 p.m.

Lord Stewartby

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

Put simply, the purpose of this Bill is to move the Letchworth Garden City Corporation from the status of a non-departmental body in the public sector to a charitable foundation answerable to the Registrar of Friendly Societies under the Industrial and Provident Societies Act. At this stage I should mention that extensive rules under the registrar will be required and I have placed in the Library a copy of what is described as the 19th draft of the Heritage Foundation rules together with the proposed policy statement by members of the board.

Perhaps I can begin by explaining briefly a little of the history and background of Letchworth Garden City. Letchworth itself is unique in that it was the first garden city established not only in this country, but indeed anywhere in the world. It was the brainchild of Ebenezer Howard and it came into being in 1903. Howard established it in accordance with three main principles which he developed the year before in his hook entitled Garden Cities of Tomorrow. Those principles, which continue to guide the running of the estate are as follows. First, that the best of town and country living is achieved by establishing a town in a rural environment so that its inhabitants can live near their place of work and can have easy access to the countryside and the farmlands producing their food. Secondly, that the increasing value of land over time resulting from the growing prosperity of the garden city should accrue for the benefit of the community. Thirdly, that the garden city estate should as far as possible be maintained as an entity.

I have two personal reasons for taking pleasure in being able to move a Second Reading of this Bill. The first is that for a number of years I represented the constituency of North Hertfordshire, in which Letchworth is situated, and came to admire the town and its inhabitants and what the corporation, following the precepts of Ebenezer Howard, had been able to achieve for them. The second is perhaps even more of a personal one, in that many of Howard's ideas were adapted for the village of Stewartby, named after my great-grandfather and built to accommodate employees of the company which he founded.

Originally, Ebenezer Howard raised the capital for his venture through a company entitled First Garden City Limited. But in the 1960s a property company started buying up shares in First Garden City Limited with a view to exploiting its assets. In order to prevent that the then urban district council promoted a Private Bill which became the Letchworth Garden City Act 1962.

The reason for the present Bill before your Lordships' House is a recognition that the present status of Letchworth. Garden City Corporation as a public sector body is anomalous. It arises from two factors. The first is that in order to guarantee the finances of the garden city corporation in its earliest stages, a guarantee was provided for recourse to Hertfordshire County Council in case the corporation fell short of funds. The second reason is that the Secretary of State currently appoints the majority of the corporation's board members, but he plays no part in the corporation's affairs and for many years the corporation has been in no way dependent upon public funds. Therefore the designation of the corporation as a public sector body is no longer appropriate. In effect Letchworth Garden City is already a charitable foundation and the purpose of this Bill is to convert it into one by law.

The Bill seeks to allow the new foundation to do all things that the corporation currently does—to protect the assets of the garden city estate; to ensure that the foundation has available to it the knowledge and experience necessary to run a complex undertaking; to protect the garden city's present tax-exempt status and to provide an effective operational structure that will stand the test of time.

There has been extensive consultation since those proposals were first brought forward in September 1992 and the corporation conducted them in a most conscientious fashion. Also, thorough consideration was given to the proposals in another place, taking into account many views and representations that were made. Indeed, significant changes were introduced as a result of the Committee stage. For example, an important addition to the Bill—the provision of an ombudsman for Letchworth—was made at the request of the Committee in the other place, as was the inclusion in the draft rules of a provision—Rule 70—for the principles of the Citizens Charter to apply.

The consultation process also strongly influenced the proposed arrangements for the nomination of governors and for other matters such as the provision for an annual town meeting open to all citizens of Letchworth; the right of the county council and district council governors to places on the board of management and so forth.

Perhaps I should say a word about the procedure for the nomination and appointment of governors because their role is crucial in the future of the garden city. The structure which was finally decided upon after extensive consultation includes a system of nomination by clubs, societies and voluntary bodies in the town whose activities correspond in particular to one or more of the stated charitable objects of the foundation. Those objects are set out in the Bill, in Clause 3, Schedule 1, and also in the rules. They are of fundamental importance. They identify the core activity of the foundation and are as follows. First, the preservation of buildings and other environmental features of beauty or historic interest within the garden city; secondly, providing or assisting in the provision of facilities for recreation and leisure; thirdly, promoting the advancement of education and learning within Letchworth Garden City; fourthly, promoting the relief of poverty and sickness within Letchworth Garden City; and, finally, supporting other charitable organisations and purposes within Letchworth for the benefit of the local community.

The corporation board were mindful of the need to identify closely with those objects. They were also conscious of the importance of having a sufficiently high number of governors to provide the expertise and experience necessary and to reflect the width and variety of interests found in Letchworth, but without having so many that their individual contributions were unduly diluted. That led to a proposal for a maximum of 30 governors, the majority of whom will be nominated by clubs, societies and voluntary bodies within the town together with the two local authorities with an interest in Letchworth. The remaining 14 will be appointed by the board of management with a majority drawn from residents of Letchworth. The intention is that the clubs and societies will put forward nominations who then come together in selection meetings corresponding to the objects of the foundation and that each selection meeting will nominate two governors. The board of management has no control or influence over which persons are nominated as governors and will be bound to appoint those nominated. The two local authorities—Hertfordshire County Council and North Hertfordshire District Council—as governors each have the right to a nominee, and the rules provide that the local authority nominees each have a place on the board of management.

The board of management will also use its powers of appointment of general governors to ensure that the knowledge and coverage necessary to the running of the foundation are available to it; that there is an adequate representation of, for example, the local business community and professional interests; and that those have a voice as well as the broad spectrum of residential interests in the town—freeholders, leaseholders and tenants alike—and that all those interests should be well represented.

The system has been very carefully devised to ensure a proper emphasis on the objects of the foundation, the effective running of the organisation and accountability to the town at large, both through the clubs and societies and through the general governors.

All in all, the framework I have described should provide a suitable basis for taking the Letchworth estate forward into the 20th century in conformity with the enlightened principles established by its founders more than 90 years ago. I hope therefore that the Bill will commend itself to your Lordships, accordingly.

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

8.11 p.m.

Baroness Hamwee

My Lords, there is only one issue that I should like to raise this evening. It is a matter to which the noble Lord, Lord Stewartby, referred, but is not provided on the face of the Bill. That is the composition of the governing body to take over when the Letchworth Garden City Corporation becomes the Letchworth Heritage Foundation.

To find how the governors of the new body will be chosen, one has to look at the rules of the heritage foundation. As the noble Lord has mentioned, these are now in their 19th draft; but, after all, I recognise that solicitors do have to be kept in business. According to the rules as in draft —and also the proposed policy statement which I understand has been drawn up by the present board of management—the foundation is to have a board of management consisting, in the first instance, of seven founder governors. As the noble Lord has said, these will include two councillors from the county and district councils. The board may then appoint up to 30 governors—14 general governors, of whom half must reside in Letchworth, and 16 nominated governors selected, as we have heard, by clubs, societies and voluntary bodies with interests inside Letchworth. That sounds appropriate and is good so far as it goes; but I suggest that it does not go far enough.

The categories for nomination are listed in Rule 10. There are many groups which are barred from eligibility—to mention just two, residents associations and churches—unless of course the board considers that they fall within the terms of paragraph (gg) of Rule 10(b) (i), which provides a sort of catchall for representatives of: any other interest which is in the opinion of the board from time to time of significance within Letchworth Garden City in relation to the objects of the foundation". On reading the equivalent provision in the policy statement —and this has only just occurred to me—I wonder whether it is quite the same. Paragraph 6(g) states: other charitable interests which the board considers to be of significance within Letchworth". In other words, the distinction is that in the policy statement the interests have to be charitable ones. I am not asking the noble Lord to respond to this now—as I say, I have only just thought of this point—but it may be that because the objects referred to in the rules must be charitable objects, that translates in the policy statement into charitable interests. However, it seems to me that they are not quite equivalent. I am not sure that resident associations, for instance, will fall into this category because they may not be charitable interests.

The only echo of any sort of democracy is the indirect appointment of the two councillors on the board of management.

In May 1993, the local Liberal Democrats in Letchworth distributed forms to local residents in order to gauge public opinion. I understand that 85 per cent. of those who responded opted for the proposal that residents of Letchworth be elected by ballot from valid nominations; that they would be able to elect a majority and the remainder would be chosen by the present governors.

I understand that at this stage calling for governors to be elected may not be a practical proposition—and I am sorry that the matter was not pursued earlier—but I wonder whether there would be more confidence in the process if the list of clubs and societies was widened to include, perhaps, residents associations. Or, alternatively, paragraph (gg) could be made in some way more objective so that long-standing Letchworth residents—who are perhaps not members of the local cricket club, but are nevertheless good citizens of the town who deserve to have their interests reflected directly in the workings of the board of management—could feel that they had a stake in the selection of the governors of their own city.

8.16 p.m.

Lord Graham of Edmonton

My Lords, I apologise for the absence of my noble friend Lord Williams.

I know Letchworth and endorse what has been said about it being a lovely place. It has a place in the history of garden cities, including Welwyn Garden City and many others. The work of Ebenezer Howard is well known to those of us who have followed the attempts of benefactors of his kind this century.

I have had an opportunity of looking at the Bill, and I saw nothing wrong with it until I heard the noble Baroness, Lady Hamwee. She did not say that there was anything wrong with it, but she was clearly very well briefed. I understand why when the noble Baroness told us towards the end of her remarks where her brief came from.

This is the opportunity for matters to be: raised and questions to be asked. I have scribbled down a note to ask the noble Lord, Lord Stewartby, why we should bring about what, quite frankly—by any stretch of the imagination—is a major change in the legal nexus for a city. He went some way to reassuring me, but I should like him to satisfy me that the purposes behind it are wholly altruistic.

I understand that when one does something like this the ravages of a predator need to be taken head on—a possibility that might have emerged 30 years ago. I am delighted that the quick action taken against what might have been in the offing has been sufficient to deny a speculator, a developer or a group of people on the make from taking advantage of something over which local people and the community, through the law, have built.

I would ask the noble Lord to say a little more about consultations. I have scribbled down here "consultation and the results", and we have heard from the noble Baroness, Lady Hamwee, that there was a form of consultation by asking the people. It is an eminently sensible way of getting answers to ask the people what they think.

Will the noble Lord tell us that everything that I have heard is in the best interests of Letchworth? There must have been a body of opinion that objected to what was being done or, if not to what was being done, to how it was being done.

I should be grateful if the noble Lord, Lord Stewartby, could advise the House whether there has been what one would call opposition, dissatisfaction or unease in any shape or form. I would not want to quantify it because something of this kind could have got to this stage only if the noble Lord, who has my greatest respect regarding his service for his community and for his party, felt comfortable and able to bring it forward. However, I should like to know a little more about that.

I am delighted that the vehicle to be used is the industrial and provident society. As a good Co-op man, I am very familiar with the history of the industrial and provident societies and the manner in which they have been a vehicle for so much good work which provides opportunities for what is proposed here and a range of other community and communal activities, not least the establishment of co-operatives and the expansion of the co-operative idea.

Can the noble Lord say a little about the Letchworth commissioner? I plead ignorance. When I made my notes I wrote "ombudsman?" The noble Lord, Lord Stewartby, went some way to clarify the point. Is there a comparable person or position in post now before the Act comes into being? In other words, is this a renewal of something that is in existence? I am not frightened by the term "commissioner" because the ombudsmen are called commissioners for local government.

Perhaps I may raise a point which was also made by the noble Baroness, Lady Hamwee, who has great knowledge in this area. Why on the face of the Bill was not an opportunity found to spell out in schedules to the Bill not the nitty-gritty—that has to be worked out—but the structure proposed? Schedules to a Bill are provided in order to take off the face of the Bill a lot of detail which explains things. A schedule seems to be a sensible way of producing the democratic structure. Why was not such a schedule added to the Bill so that amendments to it might be moved at a later stage if one felt that what was proposed needed to be altered?

The noble Lord, Lord Stewartby, is lucky to have the opportunity on behalf of the people among whom he has lived, and whom he has served with distinction for so long, to bring the Bill before the House. I can see it quickly being passed by us. I hope it will then be a useful vehicle to enhance the beauty of Letchworth.

8.23 p.m.

The Earl of Lindsay

My Lords, it may assist if I intervene briefly to indicate the Government's view on this Bill, which has been so ably and conscientiously moved by my noble friend Lord Stewartby.

The Government recognise the need to safeguard the special nature of Letchworth as the first garden city and. to preserve its heritage, while also guarding against a repetition of events which led up to the Letchworth Garden City Corporation Act 1962. We are content with the Bill's proposals to create the Letchworth Garden City Heritage Foundation, thereby ending the corporation's anomalous treatment as a non-departmental public body. In addition, we see no reason why the proposal to create an industrial and provident society, with charitable status, should not provide an adequate safeguard to ensure that the affairs of the heritage foundation are conducted efficiently and effectively, and with due regard to financial propriety and regularity.

I therefore recommend to the House that the Bill be given a Second Reading and be allowed to proceed in the usual way to Committee for detailed consideration.

8.24 p.m.

Lord Stewartby

My Lords, with permission, perhaps I may respond briefly to those who have taken part in the debate. First, I thank my noble friend the Minister for his expression of support on behalf of the Government for a Bill which will enable Letchworth to have a second successful century of existence, retaining the original principles of the founder.

The noble Baroness, Lady Hamwee, raised the question of the composition of the governors and their method of appointment. She also asked whether an open franchise for citizens of Letchworth would be appropriate. Perhaps I may comment first on that point. It was very carefully considered but it was felt for two or three reasons that it would be less appropriate than the form now proposed. There have been over past years attempts to politicise the garden city corporation. They have always been strongly resisted. However, it was felt that if a significant number of places on the board were open to public election, even if that did not happen for the time being, there was a risk that at some time political influences might come to play an undue part in the affairs of the corporation and indeed might at times produce conflict between the foundation, as I should now call it, and one of the local authority bodies in whose area it lies. There was also a wider question as to how appropriate it would be for governors, who are in effect charitable trustees, to be elected by that kind of public means.

The system which has been recommended is an attempt to ensure two things: first, that the majority of governors shall be residents of Letchworth; and secondly, that they shall, as broadly as possible, represent the interests in the town which reflect the founder's original objectives but giving the hoard of management the opportunity to call on others to fill in the gaps. Those nominated by the voluntary bodies, clubs, societies and so on will provide a cross-section of a number of interests of Letchworth residents but they will not necessarily take into account the kind of things which the noble Baroness has sensibly raised, such as the leaseholders, residents generally, and so on.

I shall not try to give a legal answer to the very interesting point the noble Baroness raised by comparing paragraphs in the draft rules with paragraphs in the statement of policy but they are perfectly fair questions. I shall ensure that either through me, or directly, she gets a proper reply to the questions she asked. However, I can assure her that the idea behind the structure is to enable the board of management to be answerable to a group of governors who not only embody the direct charitable purposes of the original garden city concept but who are also equipped to deal with matters such as architecture, agriculture, local businesses, professionals, and so on, so that there is the proper mix.

From my own experience I can say that in the 1970s and 1980s there were distinguished persons on the board such as a local doctor, a local businessman, and so on, who contributed very much. Clearly, they would not be nominated, except by accident if they happened to be a doctor or a businessman, by the particular clubs. It will be important to ensure that the board contains the whole range of necessary experience.

Lord Graham of Edmonton

My Lords, if there is a query about the future, how was the present management or board on which the doctor and businessman were invited to serve peopled, and who had the power to do it?

Lord Stewartby

My Lords, I mentioned very briefly in passing that the majority of the board was appointed by the Secretary of State, but it was a small board. The members were appointed after extensive local consultation in order to get the appropriate range of skills. It was a very small board and therefore one did not have the opportunity of bringing in as many people as generally seems desirable.

I turn to the points made by the noble Lord, Lord Graham. I thank him for his very kind personal comments which I appreciate. He first asked about the consultation process. That was initiated with the proposals put forward in 1992 with public meetings and representations invited in Letchworth. In addition to those which were made at the time various representations were made to the committee on the Bill in another place and petitions were lodged and so on. The committee proceedings in another place went through the whole process from start to finish. Those who had made representations to the corporation in the consultation process frequently made further representations so that they could be considered by others. I believe that it is open to anyone to make such representations to the committee of your Lordships' House. If there are matters which are still unresolved those representations will be made and it will be in order to do so.

Various objections have been raised on this; for example, there was a proposal to include specific provisions about future land use which would be exceedingly difficult to formulate. There are certain general principles already embodied in the preservation of the estate but to specify which pieces of land can be used for which purposes indefinitely would probably be impractical.

Other objectors were concerned about the accountability of the board. From what I have said I hope that the noble Lord will have gathered that the new structure provides very much wider accountability to the interests in the town and it is something which I would have welcomed in my time, but it was not within the constitutional structure at that stage.

The noble Lord also asked about the commissioner. The Letchworth ombudsman will have powers broadly analogous to those of a local government ombudsman under the Local Government Act 1974. He will be concerned with maladministration in the foundation but not with contractual or commercial transactions. He will be totally independent of the foundation and will be appointed by the president of the new society. He must also be somebody with no previous interest in the foundation or the town. That is an innovation. Because the garden city has not been a local authority it has not partaken of the legislation which applies to local authorities. It is therefore a move in line with up-to-date arrangements for local authorities.

The noble Lord asked why the change was being made and why it was necessary. I go back to the point that the current constitution is anomalous in many respects. I have already explained that I do not believe that it provides wide enough accountability. But, purely in constitutional terms, to have what is technically a public body, and therefore in the public sector, for what is in substance a charitable foundation creates a great many difficulties. For example, its expenditure has to be vetted by the Government not because there is anything improper about it but merely because technically it is part of the public sector. As I said, the public sector status derives from the fact that the Secretary of State has been appointing the majority of the board and the residual funding guarantee from the county council in case, in the early stages, the corporation had not got enough resources of its own. It is now very prosperous; the town has been successful and the estate is more valuable. It has a good revenue, so that provision no longer applies.

Lord Graham of Edmonton

My Lords, as regards Schedule 1 paragraph 1(d) and the objects of the foundation, can the noble Lord tell us what is meant by, promoting the relief of poverty and sickness within Letchworth Garden City"? The mind boggles because one imagines that there is not a community in the country which would not like a group of good people promoting the relief of poverty and sickness within their community. What is in the minds of those promoting this provision and what is the manner in which they would do that?

Lord Stewartby

My Lords, one area is housing. The essence of the garden city is the garden city estate.

There is a great deal of public housing which is not local authority housing. Nevertheless it is owned by the garden city. It has enabled the provision of better housing in many cases. In other areas such as health and so on, there is a hospice in Letchworth and various worthy causes of that kind which can receive support from the garden city.

I do not want to wear your Lordships' patience any longer with the details because I believe that they should be very thoroughly considered by the committee. A great deal of what we are discussing is very technical. Anyone like the noble Baroness who has looked at the 19th draft of the rules will know that there is a great deal of detail to be looked at. I strongly support the general principle. It will create greater accountability in the first garden city. It will also provide a structure which recognises the actuality of the fact that this is a charitable foundation which we all hope can continue the original aspirations of its founder.

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

Electricity Generation Lands (Rateable

Values) (Scotland) Order 1995

Electricity Generators (Rateable Values)

(Scotland) Order 1995

Mines and Quarries (Rateable Values)

(Scotland) Order 1995

Electricity Generators (Aluminium)

(Rateable Values) (Scotland) Order 1995

Electricity Distribution Lands (Rateable

Values) (Scotland) Order 1995

Water Undertakings (Rateable Values)

(Scotland) Order 1995

Formula Valuation (Revocations)

(Scotland) Order 1995

Docks and Harbours (Rateable Values)

(Scotland) Amendment Order 1995

Electricity Transmission Lands (Rateable

Values) (Scotland) Order 1995

British Gas plc (Rateable Values)

(Scotland) Order 1995

8.37 p.m.

The Earl of Lindsay rose to move, That the draft orders laid before the House on 18th and 23rd January be approved [6th Report from the Joint Committee].

The noble Earl said: My Lords, the 10 draft orders before the House tonight relate to the implementation of the forthcoming rating revaluation in Scotland. These all follow a well-precendented pattern and, in introducing them, I will therefore touch only briefly on their detailed provisions.

The coming revaluation is being conducted on a fully harmonised basis north and south of the Border with assessors and the Valuation Office Agency working closely together to approach subjects on a similar basis. This allows special ad hoc provisions that attempted to; iron out previous differences to be removed. Also, the emerging outcome of the revaluation has allowed the Secretary of State for Scotland to fix the new rate poundage at the English level, and rates burdens should, therefore, now be fully harmonised. Together, these allow the abolition of industrial derating and the revocation of special orders relating to petrochemical plants and caravan sites. It is with these matters that the revocations and the mines and quarries order are concerned.

For the utility undertakings concerned, the remaining orders roll forward the prescription of rateable values for these major undertakings and others in direct competition with them, such as independent electricity generators. Here, the general level of values has been rolled forward on a fairly static basis to reflect the emerging outcome of the revaluation throughout Great Britain. The valuations are on the same basis as those for England and Wales which are contained in equivalent orders that have already been approved. The arrangements for annual adjustment and apportionment to rating areas which are incorporated in these orders reflect the well-established arrangements that have operated successfully, with the approval of the House, in previous years. I commend these orders to the House, and I beg to move.

Moved, That the draft orders laid before the House on 18th and 23rd January be approved [6th Report from the Joint Committee].—(The Earl of Lindsay.)

Lord Graham of Edmonton

My Lords, my noble friend Lord Carmichael apologises for not being here. He has asked me to say that there is nothing exceptional in what has been done and the orders meet with the approval of this side of the House.

On Question, Motion agreed to.

House adjourned at twenty-one minutes before nine o'clock.