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seem to believe that they can pass the Ways and Means resolution and take 50 per cent. of the assets of Tees and Hartlepool because many years ago they made a grant to the Tees and Hartlepool. No such grant has been made since 1980. One of the first things that the Government did when they took office was to prevent any further grants being made to the Tees and Hartlepool.Even the Minister for Aviation and Shipping had to accept on the Second Reading of the Tees and Hartlepool Port Authority Bill on 15 March :
"Admittedly it is a long time since such grants were paid to the THPA, and the amounts were small".
One should pause there for a moment. I warned you, Mr. Deputy Speaker, about the number of metaphors that might fly your way this evening, and we have all heard the phrase, "From little acorns mighty oaks grow". It is quite remarkable that, following small grants 20 years ago to Tees and Hartlepool to facilitate the building of certain assets, the Government boldly assert to the House that they will take 50 per cent. of all assets of the Tees and Hartlepool port authority as a result of the Ways and Means resolution. The Minister continued :
"But the grants were paid about 20 years ago towards investment projects in the port, and some of those assets are still in use."--[ Official Report, 15 March 1990 ; Vol. 169, c. 749.]
It is strange that some of the assets are still in use. The Government are seeking to get not 50 per cent. of the value of those assets but 50 per cent. of all assets, which is remarkable.
Mr. Cryer : My hon. Friend will have noticed that the Minister did not touch on the allowable deductions from the 50 per cent. rate of levy. He included a long list contained in new clause 68, such as fees, commissions and remuneration paid for professional services. Given the huge sums that the Government have paid for professional services, does my hon. Friend agree that it should be more adequately defined?
Mr. Bell : I agree with my hon. Friend. I did not want to quote chapter and verse from the new clauses, but we have noticed the reticence of the Financial Secretary, who went so quickly through his notes that I could not keep up with him in my inimitable shorthand. I hope that Hansard had a better chance to note what he said. The Ways and Means resolution will enable the Government not to levy on grants paid against specific investment projects or even specific assets. It will, however, entitle them to 50 per cent. of the assets of all investment projects, whether or not they were financed by the Government 20 years ago or during that period or later by the port authority.
Between 1964 and 1980, as a trust port, Tees and Hartlepool could borrow from the Government, but since 1980 it has had to raise its finances on the money markets. The resolution makes no distinction. I do not want to upset my hon. Friend the Member for Wakefield (Mr. Hinchliffe). We had great difficulty in Committee in distinguishing whether he was the hon. Member for Hinchliffe or for Wakefield. If I may upset his sense of humour again, may I say that, rather like the mills of God, the Treasury grinds exceeding slow, but it grinds exceeding small, though with patience it stands waiting, with exactness grinds it all? For such small sums of money,
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paid in investment grant so many years ago, the Treasury will gain a benefit--I should say a windfall--for the Consolidated Fund of £30 million from the Tees and Hartlepool. As I said earlier, about £100 million will flow from the other privatisation measures.The Financial Secretary touched on that in his opening remarks. He talked about the taxpayer and the benefit to the taxpayer. Perhaps the taxpayer should be happy ; perhaps the Treasury should be congratulated ; perhaps it is all part of the Government's privatisation drive ; perhaps the proceeds will now be considered as the proceeds of privatisation. The Financial Secretary nods his head. Is he saying that the money that goes into the Consolidated Fund as a result of this 50 per cent. levy is part of the proceeds of privatisation? Will it be so treated in the Treasury books? Will it appear in the forecasts in the Autumn Statement as part of the privatisation proceeds? What of a local community such as Teesside? What of my constituents of Middlesbrough? What of the constituents of my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman)? What of the constituents of my hon. Friend the Member for Hartlepool (Mr. Leadbitter)? What of the constituents of the hon. Member for Stockton, South? We have seen the Clyde and the Tees and Hartlepool authorities grow. We have seen the goods going in and out. We look askance at 1992 and all that that means for the port. As my hon. Friend the Member for Makerfield asked, why cannot that money be retained by the Tees and Hartlepool port authority? It does not need to be privatised. Why cannot that money be made available for the whole community? Why do we need this motion?
We hear a great deal about ring fencing and the earmarking of grants, but by abandoning the motion and then abandoning the Tees and Hartlepool Port Authority Bill we would ensure that the port authority's assets did not disappear into the maw of the Consolidated Fund but would be available to the community as a direct and easily calculable benefit.
My hon. Friend the Member for Makerfield referred to the Opposed Private Bill Committee and told us the view of the Transport and General Workers Union. Why cannot the money be invested in better port facilities to meet the challenges of 1992? Why cannot the money be used to create useful work for the skilled work force on Teesside? Why cannot the money be used for the regeneration of Teesside, which would be a joy and pride to us all? In those circumstances, the motion would not even have to be debated.
The Minister for Aviation and Shipping is rather ubiquitous, but he is still on the Floor of the House. On 15 March 1990, when trying to explain himself to the House, he said :
"There is a general rule that, when assets acquired or improved by a non- Exchequer body with the aid of Government grants are disposed of, an appropriate proportion of the proceeds should go to the Exchequer."
I submit that 50 per cent. is not an appropriate sum to be taken by the state. By any stretch of the imagination, 50 per cent. of the assets can hardly be described as appropriate.
Mr. McCartney : We are talking about 50 per cent. of the market value of the assets. The most iniquitous aspect of the proposal is that the perceived market value of the company's assets is not necessarily the sale price at flotation.
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Mr. Bell : That is an important point. In response to an intervention, the Financial Secretary said that the expenses were those associated with valuations of what was or was not the market value.Mr. Dennis Skinner (Bolsover) : This seems to be an odd kind of privatisation scheme. Naturally the Government are hellbent on privatisation in many ways. I heard the exchange involving the Financial Secretary when reference was made to a substantial rake-off, which was said to be well over 50 per cent. in terms of taxes. On the basis of ex-Cabinet Ministers joining the board of privatised companies to get a big fat salary --
Mr. Skinner : Hear me out, Mr. Deputy Speaker.
Mr. Deputy Speaker : Order. I shall not hear the hon. Member out if he is not in order. He seems to be going far from the motion.
Mr. Skinner : No, Mr. Deputy Speaker. The burden of the debate has been about the Government taking a rake-off from these companies in taxation and so on. It has been suggested that that could amount to well over 50 per cent., based on capital gains and the rest. We now know that one ex-Minister joins the board of most privatised companies. Clearly, the Financial Secretary has not considered the matter properly. If he is the bod who is to get a job on one of the privatised port authorities, he should bear in mind that there will not be enough money for him--certainly not enough money--
Mr. Deputy Speaker : Order. The hon. Gentleman has gone far enough. Mr. Bell.
Mr. Bell : I am grateful to my hon. Friend the Member for Bolsover (Mr. Skinner), although I suspect that the Financial Secretary has a political career ahead of him rather than a career on a board of directors. I am sure that he has great expectations as 17 July appears on the horizon.
Let me again refer to the Minister for Aviation and Shipping, who is so ubiquitous that I cannot see him. He has drifted from the Front Bench to the Back Benches or out of the Chamber altogether. Like the competent Minister he has become, the hon. Gentleman duly reached for an appropriate fig leaf to disguise what the Government were doing and to seek to give this Ways and Means resolution some semblance of dignity and decency. On 15 March, he said that the Public Accounts Committee rightly attached great importance to the principle that, where grant money has been given to a particular enterprise, the Treasury has a right to an appropriate return on the investment. It is the House rather than the Public Accounts Committee which is debating the resolution tonight, but I will wager with the Minister for Aviation and Shipping, when he comes back to the House, and even the Financial Secretary, deep in thought as he is, that the PAC has never said that it considers 50 per cent. of an asset value an appropriate return on any investment--never mind an investment of such small proportions made 20 years ago.
Mr. McCartney : We are not talking about 50 per cent. of the disposal price or 50 per cent. of the value of the orginal investment in terms of grant. We are talking about 50 per cent. of the market value of the assets disposed of.
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That is considerably in excess of any minimal amount of grant provided 20 years ago. The Government are not getting a return on their capital ; they are getting an excessive return on an asset in which they did not invest in the first place. It is called asset stripping.Mr. Bell : I said earlier that the Government are asset stripping in a way that would make other asset strippers blush with shame. My hon. Friend the Member for Bolsover referred to the Financial Secretary to the Treasury. There is a clear confusion between the Financial Secretary, who is responsible for financial matters, and the Secretary of State for Transport, who is responsible for transport, and I am trying to elicit the precise difference between the two with my references to the Minister for Aviation and Shipping.
As I said, the 50 per cent. taken by the Government as a result of the Ways and Means resolution may be described as extortionate ; it can never be described as appropriate.
The Ways and Means resolution is part of a double sleight of hand by the Government. First, it ensures that the Tees and Hartlepool port authority will be privatised under a private, rather than a public, Bill. Secondly, it ensures that the Bill cannot be described as a hybrid Bill because the Government have tabled new clauses to the Finance Bill.
I pray in aid again not the logic of the situation, which speaks for itself, but the words of the Minister for Aviation and Shipping. The hon. Gentleman is probably right to have left the House as I do not know that my words will assist his career or the events that may take place on 17 July. On 15 March, he said :
"If the Bill"--
the Tees and Hartlepool Port Authority Bill--
"were amended to provide expressly for a share of the proceeds to go to the Exchequer, it would cease to be a private Bill. There would then be the problem of accommodating it within the Government's legislative programme, to which I have already referred."--[ Official Report, 15 March 1990 ; Vol. 169, c. 749.]
The Minister confirmed to the House that here was a public Bill on a private Bill route which required the modification of the Finance Bill to take into account its financial provisions. If that is not a perversion of the procedures of this House, I do not know what is. The Minister is to be congratulated on his lucid honesty. There was nothing opaque about the Government's intention. It is simple straigthforward chicanery, and they have subverted the procedures of the House in this Ways and Means resolution tonight by treating a public Bill like a private Bill and a modified Finance Bill like a hybrid Bill.
My hon. Friend the Member for Greenock and Port Glasgow sat through the charade earlier this evening called the Third Reading of the Clyde Port Authority Bill. He will no doubt understand the points that I am making on behalf of his constituency.
Mr. Skinner : Have we gone into extra time yet?
Mr. Bell : Extra time is for penalties, and we will have to see whether the penalty taker is up to it.
Other trust ports might be tempted to take the privatisation route. The hon. Member for Stockton, South earlier made a valid intervention in the speech of the Financial Secretary to the Treasury when he referred to the Ways and Means resolution and the 50 per cent. of market
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value that the Government will take and corporation tax of 35 per cent. on top of that. The hon. Member for Stockton, South wanted to know what incentive there would be for other ports to follow the privatisation route. Why should other ports follow that route and see the Government take their asset values by way of taxation through the impost or levy? Should they follow that route because of a vague element of competition among themselves so that they can invest in ports in Europe or buy our smaller ports in this country? Why should they follow the privatisation route once they know that the Government will take 50 per cent. of the money?The former Secretary of State for Transport, the right hon. Member for Southend, West (Mr. Channon), did not hint when he proposed the privatisation of the ports through the private Bill route that that should be achieved in such a way that the Government should have 50 per cent. of the assets.
Mr. Nicholas Brown : I draw my hon. Friend's attention to the fact that that was not mentioned in the Budget speech or on Second Reading of the Finance Bill. The Government did not mention it when discussing private legislation and it was not mentioned when we were discussing public legislation either.
Mr. Bell : I am grateful to my hon. Friend for reminding me of that. We are considering a new tax. The Government are introducing in this Ways and Means resolution the second new tax in the past year. They have introduced the poll tax and they are now introducing this new tax on the assets of our ports.
At least some small service has been served by this resolution. The House is entitled to know whether on each privatisation of each trust port, whether through the private or public Bill route, we are to have similar resolutions before the House ; or will the new clauses to the Finance Bill to which I have referred, hopefully suitably amended by the amounts tabled by the hon. Member for Isle of Wight, be repeated in Finance Bills in future? In short, are we debating a blanket resolution covering future privatisation of ports? I hope that the Financial Secretary to the Treasury will consider those matters when he replies.
I want to bring my comments to a close so that other hon. Members may make useful contributions to the debate. Teesside and its community will be worse off as a result of this motion if it is passed tonight. Those who work for the authority will not be heartened by the knowledge that the Government have an eye on the assets that they have built up over the years --assets not just of bricks and mortar, but of toil and sweat. The workers' investment in their workplace has been life long. They have been sadly and severely damaged by the abolition of the dock labour scheme. They will be further damaged by the privatisation of Tees and Hartlepool, and they will be undermined by this motion. I urge my hon. Friends to vote against the motion.
1.32 am
Mr. Bob Cryer (Bradford, South) : Hon. Members should examine the motion with great care. As occurred earlier, we have seen demonstrated, as lawyers say, beyond peradventure the way in which the Government have tried to deceive the House in how this legislative process is being
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undertaken. It is accepted that this is a taxation measure. A Ways and Means resolution is a common requirement of a taxation measure. As was said in a useful outline of the position, the measure was not announced in any manifesto, the Finance Bill or the Budget. There has been an attempt to slip the measure through the back door. Fortunately, due to the vigilance of the Opposition, the Government's ploy has been exposed. If we had depended on the Minister, we should have had virtually no information at all. Bit by bit, it was revealed that the basis of the resolution is a component not of the Finance Bill but of the new clauses that were tabled for discussion in Standing Committee E tomorrow. The Government assumed that the Committee would approve the new clauses. It is offensive and arrogant for the Government to make that assumption. When hon. Members are to consider a subject on the Whip the following week, how many hon. Members actually pick up copies of new clauses, tabled in relation to a Ways and Means resolution, to be dealt with in Committee the following week? Normally, hon. Members go to the Vote Office, as I did, and get hold of a copy of the Finance Bill. In the Finance Bill there is no information about the resolution. It is a monumental evasion of convention that hon. Members should have no information available.I am grateful to Mr. Deputy Speaker for saying that we could discuss the new clauses. That is an important component of our debate, and must necessarily be so. In the ordinary course of events, it would be left to the Standing Committee, which would then report to the House on alterations to the Bill, including any new clauses. However, because of the special circumstances, we have perforce to refer to the new clauses.
Mr. Beith : The position is worse than the hon. Gentleman has described. If he had gone to the Vote Office on Friday morning and picked up a copy of the amendments then tabled, he would have found that no new clause of this nature had been tabled. If he had made further inquiries, he would have discovered that there had been one but that it had been withdrawn. Only if he had been in the Public Bill Office in the last moments of Friday would he have discovered that the Government rushed back to table the new clauses.
Mr. Cryer : I am grateful to the hon. Gentleman for that information. He is a member of Standing Committee E and has been taking an interest, as members of the Committee normally do. Only a tiny proportion of hon. Members are on a Standing Committee at any given time. Having a knowledge of proceedings on the Finance Bill, and knowing that the clauses were previously tabled but were withdrawn, the hon. Gentleman would naturally know more than the vast majority of hon. Members who are not on the Finance Bill Committee. The hon. Gentleman is right--it is a dodge to withdraw the new clauses and then to retable them at the very last minute on Friday. My original assertion, which the Minister disputed, that it would be extremely difficult for hon. Members to take the information home with them over the weekend is correct. Even hon. Members who were here until the last moment of Friday's sitting would have had difficulty in doing that.
Mr. Skinner : Is my hon. Friend saying that the Minister is lying?
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Mr. Cryer : I would not go as far as that. I am saying that the Minister was certainly being economical with the truth when he maintained that hon. Members could get the information to enable them to debate the money resolution and the Ways and Means resolution, because that patently was not the case.New clause 68 shows the purposes for which the levy is to be used. The Ways and Means resolution gives authority for the levy to be made and new clause 68 excludes certain expenditure from that levy. If the clause is accepted by the Committee and becomes part of the Finance Act, those will be statutory exclusions and for that reason, we must discuss them. According to new clause 68(3)(a), they are
"fees, commissions or remuneration paid for professional services".
That is the first item, but there are three others.
It is alarming that in opening the debate the Minister did not touch on any of those items. It is encouraging that such expenditure will require statutory approval. In a recent Adjournment debate I raised the issue of the sale of skill centres. One of the scandals about that giveaway was that Deloitte Haskins and Sells received £500,000 in fees for professional services, which included marketing and valuation services. Subsection (3)(d) of new clause 68 deals precisely with that because it mentions
"expenses reasonably incurred in ascertaining the market value of the securities disposed of."
That is exactly the area that was critically examined. I and many people thought that the fees paid for those professional services were excessive. The resolution in conjunction with new clause 68 encourages expenditure in such areas by giving statutory exemptions from payment of the levy. It includes costs of transfer and advertising.
I am amazed that the Minister did not mention the expenditure that the Government have in mind. For example, is it the lavish expenditure on professional services and advertising in which the Government have been engaged? Will they put down guidelines? The Government frequently do that in all sorts of areas. When they pass primary legislation--as in this case- -they issue guidelines that become almost laws in themselves to, for example, the trust ports. They are simply the instructions of a Minister to a civil servant, or from a civil servant to a Minister to say yes to the provision of guidance on the amount of expenditure that can be incurred.
The levy is the specific provision in the resolution. There are penalties. The levy can be varied by the Minister by way of statutory instrument. That is in new clause 68. The Minister talks about the levy being 50 per cent. However, if the new clause is passed, it will be subject to the affirmative procedure for statutory instruments. That is better than the negative procedure.
Mr. Cryer : It is where one has to table a prayer in order simply to obtain time for a debate. The Minister and all hon. Members present know that in the affirmative procedure, unless hon. Members object--
Mr. Skinner : The Minister is asleep.
Mr. Cryer : Under the affirmative procedure, unless hon. Members object, the matter can be dealt with in what is called a merits committee.
Mr. Skinner : The Minister knows what happened to Lawson : he fell asleep and got sacked.
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Mr. Cryer : Often few hon. Members turn up for discussions in merits committees-- [Interruption.]
Mr. Deputy Speaker : Order. The hon. Member for Bolsover (Mr. Skinner) must not keep calling out from a sedentary position and interrupting his hon. Friend, and he knows that he must not.
Mr. Skinner : Will my hon. Friend give way?
Mr. Cryer : I give way to my hon. Friend the Member for Bolsover (Mr. Skinner).
Mr. Skinner : If Mr. Deputy Speaker will allow me. I was pointing out to my hon. Friend and others that the Minister had dropped to sleep two or three times during my hon. Friend's speech. I wondered whether my hon. Friend thought that it was right and proper that while he was making important points about taxation the Financial Secretary was dropping off. The Chancellor of the Exchequer dropped off to sleep and six months later he got the sack. I was being fair to the Minister. I was pointing out that he might follow in the same fashion. That is all that I was saying.
Mr. Cryer : I am grateful to my hon. Friend for making that point. I thought that that was the drift of the interchange that was taking place. I was alarmed to find the Minister dozing off in the middle of my speech when I was making important points. It is characteristic of the Government's arrogant behaviour towards the House. The Minister made a nominal speech. He read out his brief virtually word for word. He finished it in five or six minutes, packed up and expects the motion to go through the House on the nod. The Government have had a bit of a jolt tonight. We have been exercising the vigilance that an Opposition should exercise--
Mr. Neil Hamilton (Tatton) : I beg to move, That strangers do withdraw.
Notice being taken that strangers were present, Mr. Deputy Speaker,-- pursuant to Standing Order No. 143 (Withdrawal of strangers from House), put forthwith the Question, That strangers do withdraw :--
The House proceeded to a Division--
Mr. McCartney (seated and covered) : On a point of order, Mr. Deputy Speaker. You did not call a Division. No Division was called.
Mr. Deputy Speaker : The hon. Gentleman was not listening. The House having divided : Ayes 1, Noes 123.
Division No. 277] [1.42 am
AYES
Ashby, David
Tellers for the Ayes :
Mr. Neil Hamilton and
Mr. Harry Bellingham.
NOES
Alexander, Richard
Alison, Rt Hon Michael
Allason, Rupert
Amess, David
Arbuthnot, James
Arnold, Jacques (Gravesham)
Aspinwall, Jack
Baker, Nicholas (Dorset N)
Barnes, Harry (Derbyshire NE)
Batiste, Spencer
Beaumont-Dark, Anthony
Beith, A. J.
Bell, Stuart
Bendall, Vivian
Bennett, Nicholas (Pembroke)
Boswell, Tim
Bowis, John
Brandon-Bravo, Martin
Brazier, Julian
Bright, Graham
Brown, Michael (Brigg & Cl't's)
Browne, John (Winchester)
Bruce, Ian (Dorset South)
Budgen, Nicholas
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