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There is a joke going around Hull at the moment: what is the difference between Hull city council’s Kingston Communications shareholding committee and the local freemasons? The answer is that we have some idea of what goes on among the local freemasons,
but we have no idea of what goes on in the Kingston Communications shareholding committee.
It is surprising that the local Liberal Democrat manifesto stated that the party was going to ensure that its councillors engaged in “meaningful consultation” with local people. It claimed that
“for too long in Hull, decisions have been taken behind closed doors with little regard to the views of the people whose communities and families they affect.”
Well, 19 days into its time in office, the Liberal Democrat council blew that one, did it not?
My concern is simply that, in an age when all political parties want to gain the trust of local people, strengthen local democracy and engage and consult in a meaningful way, the action taken by the Liberal Democrats in Hull is arrogant. If there had been discussion in the local election campaign about such an important issue, at least there would have been some debate and discussion about an asset built up by generations of Hull people.
My second point stems directly from that, and has to do with the possibilities flowing from the historical local telephone company and the resulting asset base that the council owned in Kingston Communications. I understand that the portfolio holder for Hull city council was advised that the dividend on the shareholding in Kingston Communications could be higher if the council sold its shares and reinvested in the market. However, I understand that other options, which could have been bolder and more focused on the future needs of the city and its people, were available.
With a 31 per cent. shareholding in Kingston Communications, the council had a real opportunity to look at some interesting ideas to benefit the city where the company was born and had prospered. Since I was elected in May 2005, many of my constituents have contacted me about the monopoly position of Kingston Communications in Hull. It is the only telecommunications and internet provider in the area, with uncontested dominance in the local market. Now the influence of local people through a major shareholding in the company has been lost; we have a straightforward privately owned monopoly supplier in the city, with no guarantees about choice or quality of telephone and internet services. Moreover, people have no say in what happens to local Kingston Communications jobs.
One option Hull city council could have considered was how to use its shareholding to force the management of Kingston Communications to realign the corporate strategy towards what is called an open horizontal model. That would have meant that the cabling in the city was brought under the ownership of the city—perhaps by forming a separate company to do that—to ensure that it benefited all who wanted to use it. There could have been investment to install fibre-optic cabling and to ensure that it was made available to all who needed it. The process is akin to the roads being available to whoever wishes to use them, with services provided by lots of different businesses that use the roads.
I am informed that similar models are under development in cities in Europe, such as Amsterdam. An open access model would allow investment to fund an infrastructure upgrade in the city region and allow
for telecom companies to compete with each other for customers by buying access to the fibre-optic network. It would allow the use of other service providers in Hull, so there would no longer be a monopoly supplier as at present. The model would yield great socio-economic wealth to the community of Hull, and put the city on the global map as the first in the UK to adopt it.
The idea has great merit in terms of what would best help the city develop economically and speed up its much needed regeneration. It would put the council at the centre of the process, acting as the guardian for the city, making sure that the cabling in the city was used for everyone. It could secure employment in the city, which of course is now not guaranteed. Kingston Communications is obviously focusing its business on the corporate sector and much of the company’s investment is directed away from Hull at present. The model would ensure that existing and new investments in telecom services and networks were kept in Hull and Humberside. It would be good for the regional economy and local jobs—the modern, skilled local jobs that is Hull is crying out for.
I have set out only one option, but an imaginative and thoughtful debate could have taken place in the city if we had had a far-sighted local authority that was really looking to regenerate the economy in Hull by using digital technology and investing in the wider community. The Lib Dems have again wasted a real opportunity, with a short-term approach to an historic asset of the city. Councillor Sloan, the portfolio holder, said:
“The decision to sell the council’s remaining stake in Kingston Communications was made because it was in the best interests of the city, its people, local businesses, local shareholders and indeed the company.”
I am not sure that it was in the best interests of the city, local people or local businesses simply to grab the money and run. The council could have done something much more imaginative and much bolder. The Lib Dem council in Hull has wasted an opportunity.
7.12 pm
The Parliamentary Under-Secretary of State for Communities and Local Government (Angela E. Smith): I congratulate my hon. Friend the Member for Kingston upon Hull, North (Ms Johnson) on the way in which she put her case to the House. She clearly has deep concerns, and the passion with which she spoke and her commitment to her constituents does her enormous credit. Her views are shared by other Hull Members. The Secretary of State for Education and Skills, my right hon. Friend the Member for Kingston upon Hull, West and Hessle, has moved to the Back Benches today—unusually and, I hope, temporarily—to show his commitment and his deep feelings about the issue, which are shared by the Deputy Prime Minister, my right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott).
All local authorities, including Hull, have to make complex decisions about how best to manage their assets and investments, but those are matters for the judgment of each authority; central Government have
no powers to intervene. We want authorities to have as much flexibility as possible to manage their investments, which was one of the freedoms we conferred under the prudential capital finance system in 2004. Before that, investments were subject to a complex system of regulation that we inherited from the previous Administration. Now, instead of regulations, we have statutory guidance, which is in simple language and gives authorities considerable discretion to make decisions.
Authorities are allowed to pursue any form of investment that they consider appropriate. They may also cash in existing investments whenever they want. No Government consents are required at any stage. It is a matter for the political judgment of the local authority. However, the investment guidance contains important safeguards for local taxpayers. It requires the authority to produce a yearly investment strategy, which must be put to the full council. The strategy must set out the general investment policies of the authority and explain how risks will be monitored and managed.
I listened carefully to what my hon. Friend the Member for Kingston upon Hull, North said that she would like the Government to do, and I understand how deeply concerned she is. However, putting any constraints on the disposal of shares by local authorities would be inconsistent with the freedoms that we have recently conferred on them. When making decisions on whether to acquire, keep or dispose of an investment, an authority’s main concern should be security and seeking to minimise the risk of losing money that it holds in trust for the local community. Having addressed that, the authority may seek to maximise its return from its investments.
All of an authority’s investments need to be monitored carefully, and authorities must be ready to respond to changing market circumstances. That may sometimes lead to long-standing investment policies being reversed or changed. These are complex matters, which require specialised professional advice. There can be differences of opinion between technical experts. It is important that, for any sale to take place, the council must fully investigate all the options that are open to it. When making decisions about the disposal of any asset, we would expect the authority to consider the impact that the disposal would have on the community, the broader local economy and, of course, jobs.
I understand my hon. Friend’s regret at what she feels is a lost opportunity to consider other alternatives. I was struck by her comments about the opportunities available in Amsterdam. If she can undertake that kind of research in the time she has had available, she may want to ask her local authority what opportunities it took to research the available alternatives. Clearly it is too late for that to have an impact on the sale, but she may want to look into the matter to reassure herself and her constituents about whether alternatives were considered.
I appreciate the fact that the council could not have laid out its exact plans in this matter, but I was interested to hear my hon. Friend say that her understanding from the Financial Services Authority was that a commitment in the manifesto to review all assets would have been acceptable and would not have caused any difficulties. I want to refer to a story in a
local Hull newspaper; it is regular reading for me. The article is dated 25 May and states:
“A few months ago Lib Dem leader Carl Minns was dismissing the idea of selling off the city council’s remaining stake in Kingston Communications as ‘typical Old Labour thinking’.”
I can assure Councillor Minns that, judging from the comments made by my hon. Friend, it is certainly not Labour party thinking.
Despite the deep concerns that my hon. Friend has raised, there is little that I can do in this matter. It is a matter for the discretion and judgment of the local authority, and the administration in Hull has decided to proceed in this way. If she wants to raise any complaints about financial impropriety, and would like the Audit Commission to look at them, she can look at the rules and regulations to see whether the complaints can be investigated. However, I am not aware that Hull city council has acted improperly financially. We are talking about a matter of judgment, and the council’s judgment is clearly at odds with that of my hon. Friend.
Adjourned accordingly at eighteen minutes past Seven o’clock.
Deferred Division
That the draft Community Drivers’ Hours and Recording Equipment Regulations 2007, which were laid before this House on 14(th) May, be approved.
The House divided: Ayes 362, Noes 60.
AYES
Afriyie, Adam
Ainger, Nick
Ainsworth, rh Mr. Bob
Ainsworth, Mr. Peter
Amess, Mr. David
Anderson, Mr. David
Armstrong, rh Hilary
Atkinson, Mr. Peter
Austin, Mr. Ian
Austin, John
Bailey, Mr. Adrian
Baird, Vera
Balls, Ed
Banks, Gordon
Barlow, Ms Celia
Baron, Mr. John
Bayley, Hugh
Begg, Miss Anne
Benn, rh Hilary
Benton, Mr. Joe
Bercow, John
Berry, Roger
Betts, Mr. Clive
Binley, Mr. Brian
Blackman, Liz
Blears, rh Hazel
Blunkett, rh Mr. David
Blunt, Mr. Crispin
Bone, Mr. Peter
Boswell, Mr. Tim
Bradshaw, Mr. Ben
Brady, Mr. Graham
Brazier, Mr. Julian
Brennan, Kevin
Brown, Lyn
Brown, Mr. Russell
Browne, rh Des
Browning, Angela
Bryant, Chris
Buck, Ms Karen
Burgon, Colin
Burnham, Andy
Burns, Mr. Simon
Burrowes, Mr. David
Burt, Alistair
Butler, Ms Dawn
Byers, rh Mr. Stephen
Byrne, Mr. Liam
Cairns, David
Cameron, rh Mr. David
Campbell, Mr. Alan
Carswell, Mr. Douglas
Caton, Mr. Martin
Cawsey, Mr. Ian
Challen, Colin
Chaytor, Mr. David
Clapham, Mr. Michael
Clappison, Mr. James
Clark, Greg
Clark, Paul
Clarke, rh Mr. Charles
Clarke, rh Mr. Tom
Coaker, Mr. Vernon
Coffey, Ann
Cohen, Harry
Connarty, Michael
Cook, Frank
Cooper, Rosie
Corbyn, Jeremy
Cormack, Sir Patrick
Crabb, Mr. Stephen
Crausby, Mr. David
Creagh, Mary
Cryer, Mrs. Ann
Cunningham, Mr. Jim
Cunningham, Tony
Darling, rh Mr. Alistair
David, Mr. Wayne
Davies, Mr. Dai
Dean, Mrs. Janet
Denham, rh Mr. John
Devine, Mr. Jim
Dhanda, Mr. Parmjit
Dismore, Mr. Andrew
Djanogly, Mr. Jonathan
Dobbin, Jim
Donohoe, Mr. Brian H.
Drew, Mr. David
Duddridge, James
Dunne, Mr. Philip
Durkan, Mark
Eagle, Angela
Eagle, Maria
Efford, Clive
Ellman, Mrs. Louise
Engel, Natascha
Ennis, Jeff
Evennett, Mr. David
Fabricant, Michael
Fallon, Mr. Michael
Field, rh Mr. Frank
Field, Mr. Mark
Fitzpatrick, Jim
Flello, Mr. Robert
Flynn, Paul
Foster, Mr. Michael (Worcester)
Foster, Michael Jabez (Hastings and Rye)
Fox, Dr. Liam
Gale, Mr. Roger
Gapes, Mike
Garnier, Mr. Edward
Gauke, Mr. David
Gerrard, Mr. Neil
Gibb, Mr. Nick
Gibson, Dr. Ian
Gilroy, Linda
Goggins, Paul
Goodman, Helen
Goodman, Mr. Paul
Goodwill, Mr. Robert
Gove, Michael
Gray, Mr. James
Grayling, Chris
Green, Damian
Greening, Justine
Grieve, Mr. Dominic
Griffith, Nia
Grogan, Mr. John
Gwynne, Andrew
Hague, rh Mr. William
Hain, rh Mr. Peter
Hall, Patrick
Hamilton, Mr. David
Hamilton, Mr. Fabian
Hammond, Stephen
Hands, Mr. Greg
Hanson, rh Mr. David
Harper, Mr. Mark
Harris, Mr. Tom
Hayes, Mr. John
Healey, John
Heathcoat-Amory, rh Mr. David
Henderson, Mr. Doug
Hendrick, Mr. Mark
Hendry, Charles
Heppell, Mr. John
Hesford, Stephen
Hillier, Meg
Hoban, Mr. Mark
Hollobone, Mr. Philip
Holloway, Mr. Adam
Hood, Mr. Jim
Hoon, rh Mr. Geoffrey
Horam, Mr. John
Howarth, rh Mr. George
Howells, Dr. Kim
Hoyle, Mr. Lindsay
Hughes, rh Beverley
Humble, Mrs. Joan
Hunt, Mr. Jeremy
Hurd, Mr. Nick
Iddon, Dr. Brian
Illsley, Mr. Eric
Irranca-Davies, Huw
Jack, rh Mr. Michael
Jackson, Mr. Stewart
James, Mrs. Siân C.
Jenkin, Mr. Bernard
Jenkins, Mr. Brian
Johnson, rh Alan
Johnson, Ms Diana R.
Jones, Mr. David
Jones, Helen
Jones, Lynne
Jowell, rh Tessa
Joyce, Mr. Eric
Kaufman, rh Sir Gerald
Kawczynski, Daniel
Keeble, Ms Sally
Keeley, Barbara
Kelly, rh Ruth
Kemp, Mr. Fraser
Kennedy, rh Jane
Key, Robert
Khan, Mr. Sadiq
Kidney, Mr. David
Kirkbride, Miss Julie
Knight, rh Mr. Greg
Kumar, Dr. Ashok
Ladyman, Dr. Stephen
Lait, Mrs. Jacqui
Lancaster, Mr. Mark
Lansley, Mr. Andrew
Lazarowicz, Mark
Lepper, David
Levitt, Tom
Lewis, Dr. Julian
Liddell-Grainger, Mr. Ian
Lidington, Mr. David
Lilley, rh Mr. Peter
Linton, Martin
Lloyd, Tony
Loughton, Tim
Lucas, Ian
Luff, Peter
Mackay, rh Mr. Andrew
Mactaggart, Fiona
Main, Anne
Malik, Mr. Shahid
Malins, Mr. Humfrey
Mallaber, Judy
Maples, Mr. John
Marris, Rob
Marsden, Mr. Gordon
May, rh Mrs. Theresa
McAvoy, rh Mr. Thomas
McCarthy, Kerry
McDonagh, Siobhain
McDonnell, Dr. Alasdair
McDonnell, John
McFadden, Mr. Pat
McFall, rh John
McGovern, Mr. Jim
McGrady, Mr. Eddie
McGuire, Mrs. Anne
McIntosh, Miss Anne
McIsaac, Shona
McKechin, Ann
McLoughlin, rh Mr. Patrick
McNulty, Mr. Tony
Meacher, rh Mr. Michael
Meale, Mr. Alan
Merron, Gillian
Michael, rh Alun
Milburn, rh Mr. Alan
Miliband, rh David
Miliband, Edward
Miller, Andrew
Miller, Mrs. Maria
Milton, Anne
Mitchell, Mr. Andrew
Mitchell, Mr. Austin
Mole, Chris
Moon, Mrs. Madeleine
Morden, Jessica
Morgan, Julie
Morley, rh Mr. Elliot
Mountford, Kali
Mullin, Mr. Chris
Mundell, David
Munn, Meg
Murphy, Mr. Jim
Murphy, rh Mr. Paul
Murrison, Dr. Andrew
Neill, Robert
Newmark, Mr. Brooks
O'Brien, Mr. Mike
O'Brien, Mr. Stephen
Olner, Mr. Bill
Osborne, Mr. George
Ottaway, Richard
Owen, Albert
Paice, Mr. James
Palmer, Dr. Nick
Paterson, Mr. Owen
Pelling, Mr. Andrew
Penning, Mike
Pickles, Mr. Eric
Plaskitt, Mr. James
Pope, Mr. Greg
Pound, Stephen
Prentice, Bridget
Prentice, Mr. Gordon
Prisk, Mr. Mark
Pritchard, Mark
Prosser, Gwyn
Purchase, Mr. Ken
Purnell, James
Randall, Mr. John
Raynsford, rh Mr. Nick
Reed, Mr. Andy
Rifkind, rh Sir Malcolm
Riordan, Mrs. Linda
Robathan, Mr. Andrew
Robertson, Hugh
Robertson, John
Robertson, Mr. Laurence
Rooney, Mr. Terry
Rosindell, Andrew
Ruane, Chris
Ruddock, Joan
Russell, Christine
Ryan, Joan
Salter, Martin
Scott, Mr. Lee
Seabeck, Alison
Selous, Andrew
Shaw, Jonathan
Sheridan, Jim
Simmonds, Mark
Simpson, Mr. Keith
Singh, Mr. Marsha
Skinner, Mr. Dennis
Slaughter, Mr. Andy
Smith, Ms Angela C. (Sheffield, Hillsborough)
Smith, Geraldine
Smith, John
Snelgrove, Anne
Soames, Mr. Nicholas
Soulsby, Sir Peter
Spellar, rh Mr. John
Spelman, Mrs. Caroline
Spicer, Sir Michael
Spink, Bob
Starkey, Dr. Phyllis
Straw, rh Mr. Jack
Streeter, Mr. Gary
Stringer, Graham
Stuart, Ms Gisela
Sutcliffe, Mr. Gerry
Swayne, Mr. Desmond
Syms, Mr. Robert
Tapsell, Sir Peter
Taylor, Ms Dari
Taylor, David
Taylor, Mr. Ian
Thomas, Mr. Gareth
Thornberry, Emily
Timms, rh Mr. Stephen
Touhig, rh Mr. Don
Tredinnick, David
Trickett, Jon
Turner, Dr. Desmond
Turner, Mr. Neil
Ussher, Kitty
Vaizey, Mr. Edward
Vara, Mr. Shailesh
Viggers, Peter
Villiers, Mrs. Theresa
Walker, Mr. Charles
Wallace, Mr. Ben
Waltho, Lynda
Ward, Claire
Wareing, Mr. Robert N.
Waterson, Mr. Nigel
Watkinson, Angela
Watts, Mr. Dave
Whitehead, Dr. Alan
Wicks, Malcolm
Widdecombe, rh Miss Ann
Wiggin, Bill
Willetts, Mr. David
Williams, rh Mr. Alan
Williams, Mrs. Betty
Wilson, Mr. Rob
Winnick, Mr. David
Winterton, Ann
Winterton, rh Ms Rosie
Woodward, Mr. Shaun
Wright, Mr. Iain
Wright, Jeremy
Young, rh Sir George
NOES
Alexander, Danny
Beith, rh Mr. Alan
Brake, Tom
Breed, Mr. Colin
Browne, Mr. Jeremy
Bruce, rh Malcolm
Burstow, Mr. Paul
Burt, Lorely
Cable, Dr. Vincent
Campbell, Mr. Gregory
Campbell, rh Sir Menzies
Carmichael, Mr. Alistair
Chope, Mr. Christopher
Clegg, Mr. Nick
Davey, Mr. Edward
Dodds, Mr. Nigel
Farron, Tim
Featherstone, Lynne
Foster, Mr. Don
George, Andrew
Goldsworthy, Julia
Harris, Dr. Evan
Heath, Mr. David
Holmes, Paul
Hosie, Stewart
Howarth, David
Huhne, Chris
Keetch, Mr. Paul
Kennedy, rh Mr. Charles
Kramer, Susan
Lamb, Norman
Laws, Mr. David
Leech, Mr. John
Llwyd, Mr. Elfyn
MacNeil, Mr. Angus
McCrea, Dr. William
Mulholland, Greg
Öpik, Lembit
Pugh, Dr. John
Reid, Mr. Alan
Robertson, Angus
Rogerson, Mr. Dan
Rowen, Paul
Shepherd, Mr. Richard
Simpson, David
Smith, Sir Robert
Stunell, Andrew
Swinson, Jo
Taylor, Matthew
Webb, Steve
Weir, Mr. Mike
Williams, Hywel
Williams, Mark
Williams, Mr. Roger
Williams, Stephen
Willis, Mr. Phil
Willott, Jenny
Wilson, Sammy
Wishart, Pete
Wyatt, Derek
Question accordingly agreed to.
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