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Lord Falconer of Thoroton: My Lords, I thank the noble Lord for his good wishes. He describes me as moving on from being the Minister for the Dome and prefabs. I am not sure what that was a reference to, but I thank him for his good wishes anyway. I have gone through the matter in some detail because it is right that noble Lords should know the facts so that they
can make an assessment of the situation. Like the noble Lord I welcome the opportunity provided by an NAO inquiry into the sale, so that the detail can be considered. That should give noble Lords confidence that a proper consideration of all the facts will take place. Ultimately the Government have to make decisions about the best deal that can be obtained on the Dome and the surrounding land. We believe we have that.In picking up some of the points that have been raised, I hope that I shall not repeat myself. We are not giving away the Dome. There is a commitment to the development of the Dome and the Dome waterfront in exchange for a share of profits. In addition, there is the development agreement in relation to the rest of the site, which is a common form land development agreement that permits the landowner to participate in the expected increase of value. Yes, the noble Lord is correct to say that there is a risk in relation to that. However, a landowner in such circumstances has to ask whether one is better off taking all the money for the land up front and watching the developer take all the profits as the development takes place, or whether one would be wise to participate in the development over a period of time. With proper protections, we believe that the latter, rather than the former, is the correct course. That is the judgment we have made. The 7.5 per cent of £40 million to which the noble Lord referred has to be negotiated, but that was an agreement reached in relation to the land and would apply to any deal that we struck.
In relation to costs, the noble Lord is absolutely right. The cost to which we refer is the infrastructure improvement costs that MDL has agreed to undertake under the agreement. That is why the agreement contains appropriate engagement of English Partnerships in the process by which those decisions are made. All the points made by the noble Lord apply in practically every joint development. We believe that we have reduced the risk as much as possible.
Lord Corbett of Castle Vale: My Lords, has my noble and learned friend received any recent communication, expression of regret or even apology from the former chairman of the Millennium Commission who altered the rules on the siting of the Dome after the tender bids had been submitted and went against the site chosen by the preferred operator to take the Dome exhibition to the NEC, the Birmingham Solihull site? Does he accept that the noble Lord, Lord Heseltine, is the father of this grief, and that had the original bid gone forward as it should have done, the millennium exhibition would now be encased in the marvellous National Exhibition Centre, the premier exhibition centre in the country?
Lord Falconer of Thoroton: My Lords, I feel that it would be unwise of me to go into the question of where the Millennium Dome should have been sited in the first place. However, the noble Lord, Lord Heseltine, to whom my noble friend refers, was a strong supporter of the Dome from the outset. Throughout the whole period of the existence of the Dome, he has
remained consistent and supportive and he stands by his decisions at the outset. Whatever else one could say about the noble Lord, Lord Heseltine, he has been totally consistent.
Baroness Maddock: My Lords, I extend to the Minister my best wishes in his new role. I have enjoyed working with him on housing matters, inside and outside the Chamber. We shall miss the presence of a housing Minister in this House. I have two questions on the Dome. First, does the Minister have any estimate of how long the planning permission will take and when the contract will go live? Secondly, on affordable homes, how many will there be and when will they be built? Quite often affordable homes are built after more expensive ones.
Lord Falconer of Thoroton: My Lords, I am very grateful to the noble Baroness for her genuine kind wishes. It is difficult to estimate how long the planning permission will take. It will depend on whether the application is called in. The applicant's intention is that an application should be made in the autumn. It is hoped that the planning permission will be granted in such time to allow building work to start in 2003. On the affordable housing point, the master plan envisages that up to 35 per cent of around 7,000 homes to be built on the site will be affordable homes. I cannot say in what sequence the houses will be built. That is a matter to be discussed between the London Borough of Greenwich and the applicant.
Lord Jopling: My Lords, in view of the murky background that has surrounded so many of the deals of this Government, ending in the humiliation of yesterday, will the Minister answer the question put by my noble friend on the Front Bench as to whether a check has been made to see whether any of the individuals from outside companies involved in making this deal or any of their associates has been involved in contributing to the Labour Party? Would it not be better to come clean now rather than to leave it to the press to make a discovery in the months ahead?
Lord Falconer of Thoroton: My Lords, I apologise for not answering that question. I am not aware whether any of the three parties involved has made a contribution. If any of the parties had, it would not have made a jot of difference as far as the deal was concerned.
Lord Campbell-Savours: My Lords, would not those who were responsible for that monument to dereliction, the Battersea power station, do well to keep their heads down in relation to the Dome?
Lord Falconer of Thoroton: My Lords, in a number of respects those on the other side are pretty shameless.
Lord Naseby: My Lords, will the noble and learned Lord answer one question asked from the Front Bench? What return is guaranteed on the £200 million
investment? Is he aware of the Public Accounts Committee report of 15 years ago, when the noble Lord, Lord Sheldon, was chairman, in which it was specifically required that every government contract should contain a clause to ensure that the Government had a share in any extraordinary windfall gains? Is he certain that there is such a clause in the agreements in relation to the Greenwich peninsula development?
Lord Falconer of Thoroton: My Lords, there is no guaranteed return in relation to the investment of £200 million. That investment is not being made by the Government; it is being made by Anschutz and MDL. The agreements in relation to the arena and the Dome waterfront legally commit them to make an investment in excess of £200 million. They are entitled to a specified return before we receive our share of the profit. I shall not say what the share of the profit will be, as that is commercially confidential. On windfall profits, the deal has been so constructed that the Government will participate in any profits in relation to the increase in the value of the land and in relation to any subsequent redevelopment of the Dome.
Lord Hylton: My Lords, following the question posed by the noble Baroness, Lady Maddock, will the Government ensure that the opportunity for securing housing for essential public service employees is grasped and that they have priority in the process of housing development?
Lord Falconer of Thoroton: My Lords, there is a significant element in the housing proposal relating to affordable housing. The precise amount of such housing—how much will be full social housing and how much will be for key workers—is a matter to be resolved in the context of the planning application which is a matter between the London Borough of Greenwich and the applicants or the Mayor, or, if called in, the Secretary of State.
Lord Stoddart of Swindon: My Lords, does the noble and learned Lord agree that it is fortunate that this House is sitting today—the House of Commons has taken an extra week's holiday—as it has enabled him to make an early report to Parliament about the deal? When the House of Commons resumes on 10th June will a similar report be made to that House so that it has an opportunity to discuss what is on offer?
I have a second question. The public have been sold a lot of pups. In the end, if things go wrong, they always have to pick up the tab. I think particularly of the part-privatisation of air traffic control as regards which it seems that the good deal announced to this House and another place has turned sour and the taxpayer may very well be picking up the bill. I hope that this will not be another such deal.
That brings me to my third question about the sale of the land. I understand the necessity of ensuring that the Government and the taxpayer get the enhanced value of land over a period of time. But, rather than selling the land, would it not be better to allow its
development on a long lease? That would ensure that the Government share in the increased land value and the profits, but it would, nevertheless, retain the land in the long term under public ownership, or am I wrong about that?
Lord Falconer of Thoroton: My Lords, indeed it is fortunate that the House of Lords is sitting today. As the noble Lord has acknowledged, once the deal was done I came at the first opportunity to describe its full details. I am very grateful for the opportunity to do so.
Secondly, as to a similar Statement in another place, that is a matter for another place. Thirdly, as regards the enhanced value of the land, the nature of the landholding will be a 999-year lease that will be granted to developers.
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