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10.14 pm

Mr. Syd Rapson (Portsmouth, North): I have a different story. Although the tower is not in my constituency, the city council covers a tightly knit area. I represent the people of Portsmouth as much as the hon. Member for Portsmouth, South (Mr. Hancock) does. The hon. Member for Gosport (Mr. Viggers) and I speak with the authority of the local authorities involved in the scheme.

I have been a local councillor for as long as the hon. Member for Portsmouth, South. We are local government people as well as Members of Parliament. I believe in local government. I believe that democratically elected local government has the right to decide planning for local people. It is not the job of Parliament to try to overcome that, as if we are the guardians of everything that goes on and can overrule what people want locally.

The project was originally dreamed up as a landmark scheme. The tower and the water fountains were an important part of the scheme that was chosen. Berkeley

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did not do enough investigation into visitor numbers. It is basically a building company. When it did its homework, it found that the numbers were not quite correct. The city council had to re-evaluate the scheme, which it did recently with the support of the Millennium Commission. The commission crawled all over the figures to ensure that everything was absolutely correct.

The commission insisted that the city council underwrote the cost of the scheme. The city council did that, although it has operators ready to guarantee to underwrite the commercial risk involved. Delicate negotiations are going on, which is why things are kept fairly confidential. The city council has a millennium sub-committee, which has all the information, with a representative of the Liberal Democrat group on it. All the information is with local councillors.

The scheme is viable. An operator is ready to come in to run the tower. I must explain one confusing point. The original idea was that a company would take on the whole scheme and had to build a tower that would cost a considerable sum. It had not worked out the figures and has drawn back, offering £3 million back. The package has been rearranged with commission money and other moneys. The tower will be built within the money envelope that we now have. The only difference is that the operator does not have to find the money for construction, only for operation. It can do that.

This is a local government issue. We have total confidence in the scheme, which is well supported by the people of Portsmouth. It should be considered in that context. It is a worthwhile project, which should be supported by all.

10.17 pm

Mr. Peter Viggers (Gosport): The hon. Member for Portsmouth, South (Mr. Hancock) was fortunate to obtain this debate, in which I intervene with his consent. It was particularly good of him to allow that, because he knows that my view is not exactly parallel with his.

The Portsmouth harbour millennium project is very important to the whole Portsmouth-Gosport area. It will involve the development of walkways with retail opportunities around the museums and the characterful Portsmouth harbour area, with its naval and civilian yachting movements. It will develop the defence heritage area of Portsmouth harbour. If successful--I am confident that it will be--it should result in the sort of project that has been so successful in places such as Barcelona, San Antonio and Philadelphia.

It is a big project, involving £81 million, of which about half will be provided by the Millennium Commission. We hope that, whereas in the past people have visited the Portsmouth area specifically for one purpose--perhaps to see Victory, Warrior, of which I am proud to be a director, or the submarine museum--the scheme will develop into the sort of project that people will visit not for a day but for two or three. There is overwhelming support for the tower's spinnaker design, to which the hon. Member for Portsmouth, South referred. The local newspaper said:

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    That is a strong way of putting it, but the tower is an important part of the millennium project. It is a symbol of the imaginative plan that is so important to the Portsmouth harbour area and the whole of south Hampshire. I hope that the Minister will reassure us that she gives her full backing to completion of the project.

10.20 pm

The Parliamentary Under-Secretary of State for Culture, Media and Sport (Janet Anderson): I am grateful to the hon. Member for Portsmouth, South (Mr. Hancock) for the opportunity to put the record straight regarding Portsmouth city council's support for this exciting project. I am also grateful to the hon. Member for Gosport (Mr. Viggers) for confirming the project's importance to Portsmouth, and to my hon. Friend the Member for Portsmouth, North (Mr. Rapson), who has long been a supporter of the project, and who illustrated his firm wish to see it succeed.

I must emphasise, first, that local authorities are independently elected bodies, answerable for their policies to their electorate. It is for each authority to decide whether the scope of its powers is wide enough to carry out a particular activity. Section 137 of the Local Government Act 1972 allows authorities to incur expenditure up to specified limits if, in their opinion, it is in the interests of their local area.

It is also important to remember that the renaissance of Portsmouth harbour is a Millennium Commission project, not a Government initiative. As the House is aware, the commission is a politically independent body, and the Government do not wish to compromise that independence. The detail of the project and the associated contractual negotiations remain matters for the Millennium Commission and the grant recipient.

In September 1995, the commission awarded a grant of £40 million to the project, against an anticipated total cost of £86 million. The renaissance of Portsmouth harbour is an ambitious development, incorporating many individual projects. The scheme emphasises public access to the harbour water front, linking the communities of Portsmouth and Gosport, and promoting the area's maritime history. It focuses on creating an international maritime arena that will provide leisure opportunities for local residents and visitors alike.

The project was developed by the Portsmouth and South East Hampshire Partnership, a consortium of local authorities and businesses. It has been led by Portsmouth city council on behalf of Portsmouth Harbour Renaissance Ltd. At an early stage in the appraisal process, the Millennium Commission identified the project as having the potential to become one of its landmark developments. Combined with the scheme's complex nature, that fact led the commission to work in partnership with the applicant during the development stage.

Tonight's debate, however, concerns specifically the construction of the millennium tower. The tower has always been a key element of the project, integral to its success. In March this year, local people unambiguously selected the spinnaker design as the preferred design concept, and outline planning permission was secured. The intended cost of the tower--some £22 million in total--was to be met partly by the commission, which would contribute £9 million, and partly by the Berkeley group.

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In July, Berkeley decided to reduce its cash contribution from some £10 million to £3 million, although it remained committed to a contribution in kind of £4.3 million to provide the necessary infrastructure. That decision created a funding gap.

Portsmouth city council has now agreed, if necessary--I stress the words "if necessary"--to underwrite a portion of the commercial risk of the tower's operation. I understand that the hon. Member for Portsmouth, South takes issue with that decision. It is not unreasonable to ask why the city council should choose to invest in a scheme which the Berkeley group apparently did not find attractive.

Fortunately, I am able to answer that question. In July, Berkeley undertook a review of the business plan, and decided that the anticipated income projections from the millennium tower did not justify the level of capital expenditure that it was committed to provide. That was partly because the initial business plan had incorporated a number of commercial enhancements to the tower--restaurants, and so on. However, the spinnaker design--which, as the hon. Member for Gosport pointed out, was chosen by local people when they were consulted--does not include those elements; it is an architectural piece, a landmark.

Mr. Hancock: Have the Minister's officers at the Millennium Commission told her that there are proposals to enhance the tower? Have they told her that there could be a rollercoaster going around the base of it, or up part of it, and that there might be some sort of exciting ride as well? That would reduce what the Minister has just described as a free-standing piece of architecture to something that might have to be continually upgraded to keep people coming.

Is the Minister aware that the viability figures that she mentioned have now been reduced by nearly 300,000 in terms of the number of visitors?

Janet Anderson: I hope that, if the hon. Gentleman is patient, I shall be able to answer his questions. If I do not, he is at liberty to write to me, and I shall answer them then.

Berkeley's decision is not the issue here. It is perfectly reasonable for a commercial company to choose to withdraw from a project if it does not appear that substantial returns will accrue. Portsmouth city council, however, is a body with different priorities. It exists not to make a profit, but to promote the best interests of the local population. The city council strongly believes that the scheme in its entirety will have significant benefits for the local community. The most conservative analysis suggests that it will increase the number of visitors to the

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area, create additional employment, and raise the profile of Portsmouth, both within the United Kingdom and abroad.

Furthermore, the decision to underwrite the project merely makes explicit an implicit undertaking that was always part of the project's business plan. As a partner of Portsmouth Harbour Renaissance Ltd., the city council was party to an implicit underwriting of the entire scheme. It formalised that commitment to provide the Millennium Commission with additional security, although it is unlikely that it will ever be called upon to honour it.

Portsmouth Harbour Renaissance Ltd. is currently involved in complex negotiations to find a replacement commercial operator for the tower. It and the Millennium Commission have every confidence that such an operator--one who shares their view that the millennium tower is an integral part of the harbour renaissance scheme--will be found. It is regrettable that, at such a delicate stage in this exciting project's development, the hon. Member for Portsmouth, South should see fit to push into the public domain the subject matter of such sensitive negotiations.

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