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House of Commons

Wednesday 21 July 1999

The House met at half-past Nine o'clock


[Madam Speaker in the Chair]

Adjournment (Summer)

Motion made, and Question proposed, That this House do now adjourn--[Mr. Pope.]

9.33 am

Mr. Gerald Kaufman (Manchester, Gorton): Before the House goes into recess, I think it important to raise matters relating to the welfare of my constituents; the conduct of business with integrity; and the way in which a major national utility conducts its affairs. I wish to bring this matter to the attention of the House, of the Government and of the regulator of the Office of Water Services. I shall discuss the circumstances surrounding a planning application to build a business park, which was made by the Arrowcroft Group, the property partner of North West Water. I should like to make it clear that what I say pertains in no way to the merits of the application, which will be considered by a public inquiry under a Government inspector later this year.

I shall talk about the conduct of people in Arrowcroft, in North West Water and in other firms. I am sorry to say that their conduct involves lies, concealment, deception, double dealing, proposed blackmail, proposed bribery and attempts to manipulate Members of Parliament. Certain documents that have come into my possession arouse great concern in me.

The Waterside park planning application was mooted some time ago following the failure of a similar application. My hon. Friend the Member for Denton and Reddish (Mr. Bennett) and I visited Mr. Ferguson, the chief executive of United Utilities, at the building where North West Water and Norweb--the north-west electricity supplier--are housed, in Warrington. My hon. Friend and I met Mr. Ferguson on 27 March 1998. He assured us that no decision had been taken on whether there would be a planning application. He told us that our views would be taken into account. Furthermore, he said that he would communicate with us when a decision had been made.

However, two weeks earlier, a Mr. Terence Holden of Arrowcroft, who has been in charge of the application, wrote to Mr. Ferguson, saying:

a golf club--

    "and the Highways Agency."

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Mr. Ferguson told us that no decision had been made, but he had two weeks previously been involved in correspondence about making the application, and about the way in which my hon. Friend and I should be dealt with and the matters that were to be concealed from us. He lied to my hon. Friend and me by saying that the application had not been decided on and that we would be contacted when a decision was made.

It has also emerged from material that has come into my possession that certain matters have been deliberately concealed and distorted by those who are planning the application. For example, a letter addressed to the design team from Michael Aukett Architects, says:

However, I possess material that says that there would be a hotel and that even contains estimates of the number of workers to be engaged on building it and on working in it.

In addition, North West Water and Arrowcroft claimed that they would provide ample public space to replace the open countryside that they intend to destroy. However, the note goes on to say:

They told us that there would be a lot of public space, but planned to include none.

During that period, my hon. Friend and I tried to obtain information on the damage to the environment that would be inflicted if the planning application were to succeed. There were denials that such damage would occur. Indeed, the claim was that the environment would be enhanced. However, a document circulated within Arrowcroft and North West Water refers to an increase in noise levels for properties along Cornhill lane from 40 to about 65 decibels. Earth-moving noise levels of 55 to60 decibels were anticipated at Debdale, based on the operation of three bulldozers. Noise levels of 65 decibels were expected at Debdale for a short period; the daytime ambient noise levels would increase from between 45 to 60 decibels to between 60 to 65 decibels. The document noted that

The document also refers to an anticipated increase in traffic:

    "This may be regarded as a detrimental impact upon the residents there."

While claiming that the development would inflict no adverse environmental impact, documents were being circulated that admitted just such an impact.

One of the worst scandals in the whole affair is the attempt to blackmail residents of an area in my constituency and that of my hon. Friend. The residents were blackmailed with detrimental developments to their environment unless they caved in and abandoned their opposition to the planning application. Once again, we shall hear from Mr. Terry Holden--I regret that he appears regularly in the narrative. A good deal of my constituency abuts directly on that of my hon. Friend; in one area, two streets--Debdale lane in my constituency and Kings road in my hon. Friend's constituency--were suffering difficulties that North West Water could have solved.

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Mr. Pat McCloskey of United Utilities and North West Water had arranged meetings with my hon. Friend and me. I must point out that Mr. McCloskey is almostthe only individual to emerge from the whole affair honourably and with credit, and as someone who wants to do the best for the area in which his company operates. I hope that I do not do him too much damage by saying that--bearing in mind the kind of people with whom he mingles in his work. On 16 January 1998, Mr. Holden wrote to Mr. McCloskey, stating:

Denton golf club--about which I shall have more to say--wanted that road to be taken out of use as one of its conditions for agreeing, in any circumstances, to North West Water's planning proposal.

Mr. Holden continued:

He was intending to intimidate and to blackmail those residents over their attitude to any planning application.

I fear that I shall again have cause to refer to Mr. Holden's views on my hon. Friend the Member for Denton and Reddish and myself. The letter went on:

What that man seemed to fail to understand--obviously, it is not part of his nature--is that people can act for altruistic reasons, in order to assist their constituents. Both my hon. Friend and I have large majorities; although we should like them to be larger, we do not have to go around cherry-picking for votes.

Mr. Holden then wrote to Mr. McCloskey, who had agreed to see my hon. Friend and me, expressing his concerns that Mr. McCloskey was assisting us and our constituents by meeting us. Mr. Holden wrote:

He meant that he was far from happy that Mr. McCloskey was being open and honest, and was trying to assist our constituents.

There was further correspondence about Kings road in which Mr. Holden stated that Denton golf club would not

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    He continued:

    "I am concerned about the negotiations which will have to be concluded with the ten or so people having rights of way over Kings Road and do not want them to get the idea when the time comes to negotiate that the whole development is dependent on the success of those negotiations!

    You will now begin to appreciate why I was so concerned to learn of the discussions with the residents via Kaufman and Bennett. Our best negotiating angle with these residents is to be able to say Kings Road is in poor condition. We could repair it, but you the residents are obliged legally to pay a proportion of the cost i.e. probably £10-15,000 each. If, however, you will agree to us having an option to vary your right of way in due course when the new road is built from Manchester Road to Cornhill Lane . . . we will carry out short term repairs to Kings Road to improve it for a year or two at our expense. We will also pay you (say £5/10,000 each) when the option is exercised."

In effect, Mr. Holden was saying, "You get in our way and you get nothing; you help us and we'll do a bit of work for you and, in addition, we shall pay you some money."

Mr. Holden wrote again to Mr. McCloskey on 3 February 1998. He said:

that is, helping the constituents of my hon. Friend and myself--

    "it will remove our best negotiating position and have exactly the opposite effect to that which I hoped to achieve.

    You have no liability to pay for the repair of this road and I simply cannot understand why you should offer to do so, particularly when it creates difficulties with regard to the development strategy.

    As I view the situation we have played right into the hands of Mr Bennett and Mr Kaufman. Did you not consider it odd that two MPs were getting involved on behalf of 10 residents with regard to the repair of a private access road. Also, one of the residents on Debdale Farm is the leading light in the Action Against Kingswater Campaign."

He continued:

    "I don't think you will gain any goodwill with these people"--

my hon. Friend and myself--

    "either in relation to the development or from the corporate point of view and my instinct would be to do nothing to help their cause for the time being."

Mr. McCloskey was badly put out by that. He had cancelled a meeting with my hon. Friend and me for what I thought were reasons arising from his own schedule of engagements, but it now emerges that he had beenforced by Mr. Holden to cancel the meeting. Finally, Mr. McCloskey wrote to Mr. Holden:

    "When we last met, we agreed a two week delay in arranging my meeting with Gerald Kaufman in respect of Debdale Lane. As I have now had contact from the residents and, today, a letter from Gerald Kaufman, I cannot, in all honesty, delay this matter much more."

The words "in all honesty" used by Mr. McCloskey are singularly foreign to others involved in the affair.

Two golf clubs are situated on the land. North West Water and Arrowcroft had decided to destroy one golf club--Fairfield gold club. A letter from Mr. Holden says:

On the other hand, they were seeking an agreement with the other golf club--Denton golf club--to minimise the opposition at any stage of the planning process or apublic inquiry. Therefore, negotiations were taking place between Arrowcroft and Denton golf club. We have a

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letter from Mr. Holden to Mr. M. Aukett of Michael Aukett Architects about a meeting that Mr. Aukett was going to hold with the agent of Denton golf club. The letter states:

    "I am rather concerned that you are meeting Alex Dawson"--

that is the agent--

    "He will try and pump you for any information he can obtain which will help his negotiations with me.

    I think you must express complete ignorance of everything. Otherwise one word could upset the very sensitive balance of my negotiations with them. For example, do not tell him anything about the United Utilities meeting later this month and in particular do not tell him that we are working to get an application submitted by the end of this year.

    I have led him to believe we will only submit an application when we have secured a deal with them. They must not think they have us in a corner under time constraints. Their support to the planning application is all a part of the deal so you have to do nothing to enlist their support. Please do not show them any further plans or discuss anything to do with the UDP allocation and our discussions with Tameside."

Mr. Holden was seeking negotiations with Denton golf club in which the club would be brought on side for the project, but he was lying to Denton golf club and concealing information about the course and purpose of the negotiations.

Here is Mr. Holden--yet again--writing once more to Mr. Aukett:

Those people are organising a planning application about which they have lied to my hon. Friend the Member for Denton and Reddish and me, about which they have concealed vital information, and about which they are now behaving in a seriously underhand manner in respect of a crucial establishment, Denton golf club, in the area that they would ruin.

I have yet another letter from Mr. Holden, in which he states:

While negotiating--apparently in good faith--with Denton golf club, Arrowcroft prepared for the possibility of a compulsory purchase order. That order has now been applied for, and it goes way beyond the area of the planning application. Arrowcroft is now seeking to destroy both golf clubs--Denton and Fairfield.

Throughout, my hon. Friend and I have been trying to obtain details of the costs of the development, which we and all our constituents as customers of North West Water would have to pay. Those costs have been withheld from us, and I can understand why, for, within weeks, two different costings were circulating within the organisation, one of £66 million and another of £104 million. There is no reason to believe that either of those costings is accurate.

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Mr. Holden's attitude toward my hon. Friend and me is fairly risible. My hon. Friend is regarded as the more reasonable of us two, as most people might expect. Mr. Holden says in a letter:

He is not the first person to have said that, and I trust that he will not be the last. However, in another letter, Mr. Holden writes:

    "I suggested to Bennett that he should consider supporting the proposal very carefully. I ventured the idea that he may gain more political 'kudos' by doing so rather than by blindly condemning it."

The letter continues:

    "I reached a prior agreement with Bennett that neither he nor I would publicise our meetings or use anything discussed for political ends. He has honoured that agreement so far. I am, however, doubtful whether Kaufman would agree to such an arrangement. It is not for me to make such suggestions, but you might like to consider trying to get them to agree before your meeting that it is private and that any matters discussed will not be publicised or passed on to third parties."

With an acumen that ought to ensure his employment as a political commentator for one of our better newspapers, Mr. Holden says:

    "Political intelligence tells us that Kaufman no longer carries much weight in his party, particularly with 'new labour'. Bennett however appears to have straddled the divide between 'old' and 'new' labour. He has, for example been given a job on an Environmental select committee."

My hon. Friend is no longer present, because he has gone off to his job on the Environment Sub-Committee of the Select Committee on the Environment, Transport and Regional Affairs, of which he is Chairman. Mr. Holden sums up as follows:

    "It is not clear why but a definite view has been expressed that Bennett can control Kaufman and it is the former that we should work hard on."

Those are the matters that I thought it appropriate to bring to the attention of the House, but I should like to add one more point. Arrowcroft is the property partner of United Utilities, an enormous organisation, which owns both North West Water and the North Western electricity board, Norweb. It is therefore curious that Arrowcroft is not a public company and that all its shares are held by very few people. A list of shareholders shows an Alan Jones and, a little further down, a Catherine Leslie Jones; they live together and have 35,000 shares between them. The list of shareholders also shows a Bankim Chand Gossai and, further down, an Umeshwatie Devi Gossai; they, too, share an address. Then, we have Barbara Priscilla Eppel, who owns 440,000 shares; Leonard Cedric Eppel, who is chairman of the company and owns 600,000 shares; and Stuart Neil Eppel, who owns 330,000 shares; other members of the Eppel family are also shareholders. Nicholas Paul Hai and Rochelle Eleanor Hai own more than 360,000 shares between them. One short list comprises the names of all the shareholders in the property company of one of the biggest companies in the country--it is a family company, and the relationship between the two companies is baffling, to say the least.

However, it is clear that they are not a very successful family. While the property company registered a profit of £501,472 in 1997, in 1998--these accounts were published last month--it made a loss of £192,531. On the other hand, the family certainly know how to look

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after themselves. In 1997, directors' emoluments were £487,204 and, in 1998, they increased to £605,939. The emoluments of the highest-paid director increased in one year from £119,679 to £194,353. The House may agree that certain fishy matters should be investigated.

First, in the light of the evidence that I have presented to the House today, I believe that it would be best for North West Water to withdraw the planning application instantly because it is a shoddy, seedy affair. Secondly, the company should dismiss Mr. Holden who is, at best, a fool and, at worst, a rogue. He does not do any credit to the company for which he works. Finally, I believe that the matter should be referred to Ofwat because a major water company is acting in property speculation in a most disreputable and deceitful way.

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