Married Quarters: Sale of Estate (Hansard, 19 June 1996)

The Parliamentary Under-Secretary of State, Ministry of Defence (Earl Howe)
My Lords, as my right honourable friend the Secretary of State made clear, the sale of the married quarters estate depends upon reaching agreement on terms which satisfy the interests of the services and on a price which properly reflects the public interest.

§ Lord Vivian
My Lords, I am grateful for my noble friend's reply. However, does he agree that the proposed sale of married quarters is not in the interests of the Armed Forces, as it may reduce the availability of quarters? Does he further agree that if it is possible to sell off only the 20 per cent. of the vacant married quarters, funds would be provided for the refurbishment of existing married quarters? It would also provide income to the Treasury from the remaining rents.

Earl Howe
My Lords, I believe that I can reassure my noble friend on both counts. Our policy remains to provide the right housing in the right locations for all entitled personnel who wish to exercise that entitlement. This will continue to be the case after the sale of the 314 estate. We have planned the sale and release of surplus properties on the basis of very cautious projections of our future housing needs. We have built in a substantial management margin of vacant properties as well. I am confident that the availability of quarters to entitled personnel will not be affected.
As to the second part of my noble friend's supplementary question, the short answer is that the course which he proposes would not deliver the wider benefits of the sale. In particular, it would not deliver the investment needed for upgrading properties, nor the in-built discipline for disposing of surplus empty homes in an efficient manner.

§ Lord Bramall
My Lords, does the Minister agree that, whatever the theoretical financial advantages of the sale, his department has been completely unable to convince those most closely connected with married quarters that for service families the outlook at the end of the sale would be anything other than bleak?

Earl Howe
My Lords, I recognise that there are real worries among service families about the Government's proposals. To a degree, I blame myself for not having reassured them sufficiently because I believe that many of the worries are misplaced. The only difference that a service family will notice after the sale goes through is the upgrading of those properties which badly need attention. In all other respects, families' lives should remain exactly as they are now.

§ Lord Dean of Beswick
My Lords—

§ Lord Boyd-Carpenter
My Lords, will not the sale of the married quarters—

The Lord Privy Seal (Viscount Cranborne)
My Lords, I am always in the hands of the House and I know that the Question exercises a great deal of interest. If we proceed expeditiously on this side of the House first, we will have time to fit everyone in.

§ Lord Boyd-Carpenter
My Lords, will not the sale of the married quarters have a bad effect on recruiting, at a time when service recruiting is causing difficulties anyhow? Will the Government therefore reconsider the decision?

Earl Howe
My Lords, I do not believe that my noble friend is correct. As I said earlier, the Government's policy remains to provide service housing to all those entitled personnel who wish to have it. That will not change. There should be no apprehension among those who wish to join the forces that they will not have such housing when they are entitled to it.
I stress again that wider benefits arise from the sale, most notably a means of correcting what, I am afraid, has been a poor record over the years by the Ministry of Defence of disposing of surplus empty houses. A much tighter discipline will be in place once the sale goes through, with the private sector in charge.

§ Lord Dean of Beswick
My Lords, is the Minister aware that a different point of view is widely felt at present? Will the Government accept that there is an 315 enormous shortage of housing to let in the public sector? Is the minister further aware that local authorities and housing associations have expressed a wish for the ownership of the properties to be transferred to them, where possible, so that they can let them at the lower end of the market? What are the Government waiting for?

Earl Howe
My Lords, I am grateful to the noble Lord for raising an important point. He will be interested to know that we have sold or let over 5,000 surplus properties in the past four years, many to housing associations and local authorities. The sale will reinforce those efforts. We will commit ourselves to releasing thousands of surplus properties over the next 25 years. We have also looked after the immediate interests of the social housing sector by excluding over 1,500 quarters from the sale.

§ Lord Williams of Elvel
My Lords, the noble Earl will be fully aware of the resentment that has been caused by the Government's proposals. I understand from his first Answer that the price that the Government hoped to achieve would properly reflect the public interest. Is not Nomura Securities one of the bidders for the property? Would it not be a trifle odd, even for this Government, to sell the married quarters of service personnel to the Japanese?

§ Lord Graham of Edmonton
They will sell to anyone.

Earl Howe
My Lords, I am not prepared to disclose the identity of any of the short-listed bidders. I do not believe that we should object in principle to overseas investment. What interests us is not the source of the funding—a transaction of that size is bound to draw upon international capital markets, whichever way the funding is sliced—but the relationship we can expect with the future owners of the estate. Our position as tenants is safeguarded by the lease structure and, for day-to-day purposes, the identity of the new owner will make no practical difference whatever.

§ Lord Shaughnessy
My Lords, will the Minister advise us whether any survey was made of the opinions of those in the Armed Forces involved with the new measure before the decision was taken?

Earl Howe
My Lords, the service chiefs have been involved at all stages and consulted along the way. Service families have also been kept in regular touch with the Government's plans.

§ Lord Harris of Greenwich
My Lords, a moment ago the noble Earl said that the service chiefs had been consulted. Will he go a little further? Did they agree with Ministers and, in particular, the Secretary of State that this course of action was desirable?

Earl Howe
My Lords, the service chiefs have agreed that the policy represents the best way forward for 316 service families, bearing in mind the problems that I have identified, most notably the need to upgrade service housing.

§ Lord Ironside
My Lords, in spite of my noble friend's remarks, the sale and leaseback arrangement is fraught with dangers of all kinds. I hope therefore that he will act cautiously and prudently. Will he give the House assurances that those quarters that are leased back are those best placed to suit service families? Will he also assure the House that the new owners will not be able to interfere in any way at all with the tenancies and rentals that are entered into by service families with the Ministry of Defence?

Earl Howe
My Lords, I give my noble friend a complete assurance on that point, particularly as regards rents. The rents that service families will pay will continue to be set by the independent Armed Forces Pay Review Body. Neither the Government nor the Ministry of Defence will have any say in that matter.

§ Baroness Strange
My Lords—

Noble Lords
Next Question! Order!

Viscount Cranborne
My Lords, something tells me that we shall be returning to this question. I am aware that the noble Baroness has a fourth Question. I am sure that the House would like to give her a clear run.