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pavements, parks, playing fields, car parks, shopping centres, roadside verges and roundabouts. They are entitled to them. The Government will take action to ensure that in future, all local authorities deliver what the best already do, permanently. As the House is aware, we have proposed a new duty on local authorities to keep their land clean. This will clarify and codify their present range of duties and responsibilities.We are also proposing a code of practice to which local authorities must have regard in carrying out their duty. For the first time, this will set clear objective standards. Local authorities will be required to meet these standards and will be certain of what they must aim for, and local residents will be able to see when an authority is not reaching the standard, and call it to account. I must emphasise that the code is to be a reasonable document. It will be a tool for local authorities to use, taking account of practicalities in the task of cleaning up as well as the high standards that local residents are entitled to expect. It will spell out specific requirements on particular problems and will give clear advice. It will be a vehicle for recommending the best means of achieving those standards.
In drawing up the code, on which we shall be consulting local authorities, businesses and all interested parties, we have taken care to learn from the lessons of the Tidy Britain Group. The House is aware that my right hon. Friend the Prime Minister launched the group's forward-looking, anti-litter initiative--the 27 pilot projects examining major problem areas such as high streets, tourist areas, transport and special events. In each case, it is not simply a global wish that the place should be cleaned up but a scientific, analytical study of the methods that work and not of the best way of hoping that something will happen.
Before and after studies have been incorporated to assess the effectiveness. The intention is to establish the best ways of cleaning particular areas and getting all sectors involved in keeping them clean. We want to spread the lessons learnt to other areas so that all can benefit. The group will be drawing up practical guidelines on how to tackle particular problem areas.
There has been excellent co-operation between local authorities, chambers of commerce, voluntary groups and others. I have been lucky enough to launch a number of projects. The Government are providing a grant of £3 million for the Tidy Britain Group. It will be used to pioneer the group's schemes. Often the delivery and organisation is a matter for local authorities, businesses and all others who are partners in the campaign against litter.
The local authorities have already embarked, rightly, on contracting out and competitive tendering for a number of services under the Local Government Act 1988. Some Opposition Members have bleated about resources in the context of local authorities being required more effectively to fulfil the responsibility they already have. The Government have provided more resources for local authorities in terms of grant this year and we all know that there is great scope for savings in competitive tendering and in using the private sector. The Audit Commission report entitled "Preparing for Compulsory Competition" makes it clear that savings of 20 per cent. or more can be achieved in contract prices. That is an undeniable opportunity for local authorities.
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Local authorities will also have an opportunity to specify the service they want and the quality they want and to ensure that there are penalty points in the contract so that local residents obtain good value for money and high-quality services, and the best have done that very well. All must be joined in the campaign against litter.The hon. Member for Hackney, North and Stoke Newington (Ms. Abbott) talked about dogs. Local authorities already have powers to make byelaws on fouling. We have made it clear that the new duty to keep land clean will extend to dog mess. That will complement our further proposals announced last week, including a duty on local authorities to deal with strays and the power to charge for kennelling in the meantime. The Home Secretary has announced his plan to introduce powers to control dangerous dogs. The proposals are the right way of tackling dog fouling, straying and attacks by dangerous dogs. They will make an important impact.
No one can tackle the problem of litter alone, and no one will achieve a litter-free Britain overnight. However, the job must be done, and the Government are firmly committed to ensuring that it is. As Minister with special responsibility for litter, I want to make it clear how urgent the task is. It is clear that people have the energy and the will to take it on, but we must mobilise every section of society into playing its part.
Next year is Tidy Britain Year. It marks the beginning of a long-term campaign--the clean-90s campaign--to change fundamentally and permanently our attitude to litter and the way in which we cope with it. The Government give the campaign full backing. We shall provide the tools and ensure that those responsible are properly equipped and motivated to do the job.
Litter is not only a matter of legislation. It is a task for everyone working together, above all, in the local community. We need energy, co- operation and enthusiasm from politicians, officials, business and commerce, schools and voluntary groups and, above all, from individuals. We need people who are prepared to show an example--to bend down and pick up litter. Local authorities must fulfil their responsibilities and give individuals the power to take action when they are dissatisfied with what local authorities are achieving.
We need energy, enthusiasm, education, enforcement and example. We shall not hesitate to set an example. We shall shortly be bringing forward our clear proposals for our campaign against litter. We shall not hesitate to take the decisive action that is necessary to tackle this unacceptable and offensive scourge once and for all.
2.26 pm
Mr. Geoffrey Dickens (Littleborough and Saddleworth) : I join other hon. Members in congratulating my hon. Friend the Member for Chelmsford (Mr. Burns) on raising this issue. He did so, as he always does on behalf of his constituents, with great dedication. He puts many hon. Members to shame by the amount of work that he does in this place.
It is peculiar speaking after my hon. Friend the Minister. It is a long time since I heard a junior Minister make such a wonderful speech, making the Government's case clear to the country. All who listen to broadcasts of her speech or read reports of it tomorrow will be encouraged by the efforts that she and her officials are making to ensure that once again Britain can take pride in
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being clean and sparkling for visitors and people who live here. One often returns from foreign countries and enviously says, "I wish that our towns were as clean as some of those that I visited." As my hon. Friend the Minister said, the difference between us and other countries is our attitude. Parents, teachers and headmasters should teach children not to drop litter. If street cleaners do their work well, they set an example, and people will not add to their task by throwing litter and rubbish everywhere.Westminster city council was mentioned earlier. Westminster must almost be the dustbin of the world. It is one of the greatest tourist attractions in the world. It is faced with a huge task, because overseas visitors are not always as careful in our city as they are in their own.
The hon. Member for Hackney, North and Stoke Newington (Ms. Abbott) mentioned Hackney. The rubbish in Hackney does not result from visitors dropping it there. The rubbish in Hackney is probably the people of Hackney. The hon. Member for Hackney, North and Stoke Newington, like me, must set an example. I must conclude and allow my hon. Friend the Member for Chelmsford to sum up the debate. 2.29 pm
Mr. Burns : I am pleased that we have had the opportunity to debate this important matter and I thank hon. Members for their valid contributions. I am reassured by the Minister's statement that the Government are determined to beat the litter louts and to get Britain clean again in the next few years.
Question put and agreed to.
Resolved,
That this House welcomes the Government's commitment to taking decisive measures to tackle the problem of litter ; urges all those responsible for land in cities, towns and countryside to take account of widespread public concern at littering and discharge effectively their responsibility to keep that land free of litter ; calls for urgent new measures to discourage littering, to assist those who are already taking seriously their responsibilities and to ensure that those who do not are obliged to do so ; and supports the Government's proposal to place a duty on local authorities to keep their areas clean and to publish a code of practice.
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Orders of the Day
Private Members' Bills
ELIMINATION OF POVERTY IN RETIREMENT BILL
Order for Second Reading read.
Second Reading deferred till 7 July.
2.30 pm
Mr. Jeremy Corbyn (Islington, North) : On a point of order, Mr. Deputy Speaker. I mean no disrespect, but I detected some tardiness in the Clerk getting to his feet. I was on the point of moving, That the Bill be read a Second time. Yesterday, 500 London pensioners came to the House to lobby in support of the Bill. Only one Tory Member agreed to meet them. They will be disappointed that the Bill was not discussed.
Mr. Deputy Speaker (Sir Paul Dean) : Objection has been made to the Bill and the hon. Member has given a date for Second Reading.
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ITINERANTS (CONTROL) BILL
Order for Second Reading read.
Second Reading deferred till 30 June.
FIRE SAFETY INFORMATION BILL
Order for Second Reading read.
Second Reading deferred till 7 July.
PUBLIC SAFETY INFORMATION BILL
Order for Second Reading read.
Second Reading deferred till 7 July.
PROTECTION OF RESIDENTS IN RETIREMENT HOMES BILL Order for Second Reading read.
Second Reading deferred till 7 July.
GAMING MACHINES (PROHIBITION ON USE BY PERSONS UNDER EIGHTEEN) BILL
Order for Second Reading read.
Second Reading deferred till 7 July.
RE-ENFRANCHISEMENT OF THE PEOPLE BILL
Order for Second Reading read.
Second Reading deferred till 7 July.
COAL MINING SUBSIDENCE (DAMAGE, ARBITRATION, PREVENTION AND PUBLIC AWARENESS) BILL
Order for Second Reading read.
Second Reading deferred till 7 July.
BRITISH RACING COMMISSION BILL
Order for Second Reading read.
Second Reading deferred till 7 July.
FOOTBALL SPECTATORS (No. 2) BILL
Order for Second Reading read.
Second Reading deferred till 7 July.
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Enfield Royal Ordnance Factory
Motion made, and Question proposed, That this House do now adjourn.-- [Mr. Maclean]
2.32 pm
Mr. John Hughes (Coventry, North-East) : I am grateful for the opportunity to raise a matter of great importance--new evidence which has been presented to me about the sale of the Royal Ordnance factories by the Ministry of Defence to British Aerospace and, in particular, the sale of the former Royal Ordnance factory at Enfield, north London.
The Enfield factory, which opened in 1811, was one of the best-known rifle factories in the world and its highly skilled work force produced one of the Army's best-known weapons in the Lee Enfield rifle. It was a tragedy when the closure of the Enfield factory, with the loss of 1,200 jobs, was announced in August 1987, four months after British Aerospace had purchased Royal Ordnance for £190 million. At the time, the Enfield factory was valued by the Ministry of Defence at just £1.5 million. However, estimates of its redevelopment value have since ranged from £50 million to £125 million. It is a prime 100-acre site just within the M25, which has become a natural boundary for the green belt. Plans to develop the site for industry, commerce, housing and leisure were announced in May this year.
In a report published last year, the Public Accounts Committee said that it was concerned that the Ministry of Defence did not explore the possibility of redevelopment at Enfield or obtain an alternative valuation of the site based on the assumption that redevelopment might be approved in the future. The report of the Public Accounts Committee warned that British Aerospace could make a substantial gain on the site's sale or development without benefits accuring to taxpayers. Opposition Members and even some Conservative Members believe that these events are an indictment of the Government who have given away Royal Ordnance at a knock-down price and closed their eyes to the development potential at Enfield.
However, new evidence has been passed to me which suggests that the Government actively connived at the closure of the Enfield factory because they knew that the site would be closed and redeveloped before they sold Royal Ordnance to British Aerospace. The evidence also suggests that the Government engaged in a charade of competition in which other companies as well as British Aerospace were supposedly bidding for Royal Ordnance, while the Government had already made up their mind to hand the factories to British Aerospace.
The managing director of an engineering firm which used to make parts for the Enfield factory has informed me that about 30 subcontracting firms were called by the Ministry of Defence to a meeting at the Enfield factory in the autumn of 1986, about seven months before the sale to British Aerospace was announced. During interviews which lasted about four hours, the managing director told me that the subcontractors were told at the meeting that British Aerospace would be purchasing Royal Ordnance and would be closing the Enfield factory because the site was worth a great deal which would cover the cost of the purchase of Royal Ordnance.
All the 30 subcontractors present were asked under no circumstances to report that information and not to allow the closure plan to be known. According to the managing
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director, British Aerospace officials were present at the meeting. Indeed, they openly discussed the terms and conditions under which the subcontractors would work once British Aerospace had bought Royal Ordnance. British Aerospace officials also had with them full specifications and samples of the SA80 rifle, production of which was to be transferred from Enfield to the Royal Ordnance factory at Nottingham as part of the closure plan.The Minister may wonder why I have not revealed the name of the engineering firm or the managing director who has told me about the Enfield meeting. The reason is that he passed on the information in confidence although his firm no longer works for the Ministry of Defence. He has no axe to grind with the Ministry because the company decided to expand into other sectors. He wishes to remain anonymous because he fears that going public could jeopardise his chances of winning orders not from the Ministry of Defence, but from other big companies. I can understand his reluctance to allow his name to be made public. Look what happened at the Coventry Webster Machine Tool factory, which was drawn to the attention of the House on 18 June 1980 by my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker). I am aware that on that occasion the John Brown company brought pressure to bear on the individuals involved with threats of closure and redundancies. Ironically, it has suffered the same fate earmarked for Enfield. In Coventry, a housing estate now exists where the factory once stood.
I cannot overstress the vulnerability of that company director and I repeat that I understand his reluctance to allow his name to be made public. Can Ministers who use their office to carry out this form of grand larceny, and who culpably devalue the parliamentary rights of every hon. Member and the democratic rights of every British citizen, be trusted to protect the trading position of this public-spirited individual and his employees? I must tell the House that I fully believe the managing director's assertions that such a meeting took place at the Enfield factory. All the evidence points to the fact that the Government, who supposedly believe in market forces, stitched up a deal with British Aerospace to ease the company's cash flow problem and to rob the taxpayers of millions of pounds. The Enfield case is not an isolated one. Last November, a leaked memo from Warburg Securities revealed that British Aerospace was sitting on a land bank worth £1.1 billion, much of which it acquired when Austin Rover and Royal Ordnance were privatised and sold to British Aerospace. The report valued Enfield and the nearby Waltham Abbey Royal Ordnance factories at a total of £450 million. Royal Ordnance had already decided to close the Waltham Abbey site before it was sold to British Aerospace. Despite that, it was still valued at only £2 million.
The leaked Warburg memo gets to the heart of the matter and suggests that British Aerospace should
"move out of the southern sites where possible"
and
"move into cheaper labour northern areas."
It says that
"unemployment in the south is not a political issue"
and that
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"redundancy costs are more than covered by land sales and pension fund surplus."British Aerospace and the Government have connived in nothing less than naked asset-stripping on a massive scale. Yet Ministers at the Ministry of Defence have not been held responsible for deliberately cheating the taxpayer out of millions of pounds and allowing British Aerospace to make a killing. If a local authority had become involved in a scandal remotely like this one, I am pretty sure that the Government and the district auditor would have intervened and the councillors responsible would have been surcharged, disqualified and even sent to prison.
Ministers are fond of talking about local authorities' alleged abuse of power. The Government are currently pushing through Parliament a Bill supposedly designed to tackle the minuscule problem by banning 130,000 council officers from political activity. That is hypocrisy of the highest order because the real abuse of power is carried out by central Government. Nowhere has that been done more openly than with the sale of the Royal Ordnance factories to British Aerospace.
Ministers often say that legislation is needed to reform local government but not central Government because Ministers are accountable to Parliament. That has been exposed as nonsense by the Royal Ordnance sale. Yesterday's National Audit Office report clearly established that the foundation for the privatisation of Royal Ordnance was laid down in 1984. It also established that the Ministry of Defence's degree of commitment for the Government's privatisation philosophy was such that it no longer recognised its responsibility to the House of Commons. The comptroller's report pointed to the blatant contempt which was shown when, having set up a meeting of 30 subcontractors in September 1986, the Ministry then issued an information memorandum to supposed prospective purchasers in October 1986. That is conclusive evidence that the Government, through their Ministries were involved in asset-stripping.
Enfield originally made 115 of the rifle's 140 parts, and only 25 were out- sourced. Since production was transferred to Nottingham, only 12 parts are manufactured in house and 138 are manufactured by the vultures who, in 1986, sat down and tore to pieces the process and the Enfield work force. It is about time that questions were asked inside the Ministry of Defence, which was responsible for the give-away sale, and connived in a plan to close Enfield, which put 1, 200 workers out of a job, and redeveloped the factory site. This is a matter of the gravest public concern and warrants an urgent investigation into the conduct of the Government and the Minister. 2.43 pm
The Parliamentary Under-Secretary of State for Defence Procurement (Mr. Tim Sainsbury) : Any disinterested observer who had not read thNational Audit Office report but who read the varying press comment on it might be forgiven for believing that at least two--perhaps even more--reports had been published yesterday. He would have been still more confused if he had heard the hon. Member for Clackmannan (Mr. O'Neill) during the Army debate claiming that the Enfield site had already been sold for between £300 and £400 million.
There is just one report, and the accounting officer, Sir Michael Quinlan, will be giving evidence on it on Monday. We do not of course wish to pre- empt the Public Accounts
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Committee's study, but the report repays careful study. Indeed, I am tempted to read it aloud, the better to inform those who have apparently not bothered to study it.It may be of help if I explain the background to the sale. The first point, and one which seems to be constantly overlooked by critics, is that the sale was not of a piece of land, but of a business. As the report says, it was the Government's aim to sell Royal Ordnance as a going concern ; it was sold with a number of assets but also with all its liabilities. The net worth of the company reflects both those elements.
Before any increase in the value of the sites at Enfield and Waltham Abbey can be realised, high costs will have to be incurred. I shall say more about that in a moment. As an illustration, Royal Ordnance provided £100 million in its 1987 accounts for rationalisation and restructuring. Against that background, it is completely unrealistic to look at only one side of the balance sheet.
I must make it quite clear yet again that the Ministry of Defence did not sell the Enfield site for £1.5 million or any other figure : we sold a business which was, and remains, one of our main defence suppliers.
It may help the House if I describe the history of the valuations of the Enfield site. In preparation for the privatisation of Royal Ordnance, the Department commissioned a valuation of all the company's land holdings, from a highly reputable firm of chartered surveyors. That company valued the company's sites on two bases--their existing use value, based on the open market value of the land itself and the depreciated replacement cost of the buildings and other works, and their alternative use value, based on the open market value of the sites taking into account the possibility of use for other purposes. The existing use valuation of Enfield, as at 31 December 1985, was £4.1 million. The alternative use valuation taking into account the possibility of use for other purposes was £2 million- -that is, less than half the existing use valuation. The higher, existing use, valuation was made available to prospective purchasers of Royal Ordnance.
For those who are familiar with neither the complexities of property development, nor the site and the difficulities, risks, delays and uncertainties which would be involved in developing it--I fear that they include many of those who commented on the transaction--perhaps I should explain why the alternative use valuation was apparently so low.
In arriving at their valuation, our surveyors took into account a number of factors that seem to have been completely ignored by those who have simply assumed that the entire site would be capable of maximum development and would therefore command a high price for every one of its acres.
First and most important, the assumption ignores the fact that the site is within the metropolitan green belt, and at that time had no planning permission for development. Indeed, it still has no planning permission-- nor is any planning application outstanding. It therefore remains to be seen whether permission will be granted, and if so, on what terms, and for what parts of the site.
Secondly, in valuing the site, one has to take into account the likelihood that any planning consents would be restricted as to the type of development which might be permitted.
Thirdly, there are the substantial restructuring and redundancy costs. Enfield was, after all, a manufacturing
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site, and British Aerospace has estimated that there will be a £40 million cost in closing it and providing the facilities at Nottingham.Fourthly, there are likely to be significant decontamination costs, particularly at the Waltham Abbey site, although the full extent of these is not yet clear. That is a typical example of the uncertainties that surround any development proposals.
Fifthly, other substantial costs will be involved in preparing the site for development, and for example, in site clearance. As the report says :
"The National Audit Office's consultants considered it likely that a developer would be required, as a condition of planning permission, to carry out an abnormal amount of landscaping over an extensive area and to undertake other costly works."
Suitable access is a particular problem at Enfield, where there appears to be only one means of access. In such cases, where a specific piece of land has to be purchased for access to an otherwise land-locked site, it is known in the trade as "ransom land". Ransom land is well named. It is commonly the case that its owner can negotiate a price with those who hope to purchase it based on a share of the development value of the entire site to which it gives access. That share can be up to 50 per cent. of the development value in cases such as Enfield, where there is only one possible means of access.
Finally, there is the delay in receiving any returns on all this investment. It is already more than two years since the sale, and no receipts are yet in prospect.
There has been reference to whether there should have been a clawback provision in the sale. Clearly we will be looking carefully at what the report has to say on clawback, both in general and with reference to this case. All clawback arrangements have about them an element of swings and roundabouts. The possibility of more later not surprisingly usually means less now. However, when the sale is just of a piece of land, the inclusion of a clawback provision is relatively straightforward and the advantages and disadvantages comparatively easy to evaluate. The sale of Royal Ordnance was not like that. Nor is there evidence that clawback is at all common when businesses, as distinct from land as such, are sold. That is the view of Rothschild, our merchant bank advisers for the sale, which has wide experience in such matters.
One of the aims of privatisation was to put Royal Ordnance on a full commercial footing, as free as possible from Government restraints on the way it conducted its business. A clawback provision would have had the undesirable result of a continuing involvement by the Department in the rationalisation of the company, because manufacturing facilities would have to be relocated before the site was fully available for redevelopment. Furthermore the Ministry of Defence is its main customer.
As I have said, when selling a business as a going concern a number of judgments have to be made--for example, what land potential purchasers of the company might consider to be surplus to their overall requirements, and different purchasers might have different views on that, depending on the requirements of other parts of their business ; what type of redevelopment might maximise the value of such land ; and how likely it is that planning permission for that could be obtained. It can take years to
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