National Gallery Industrial Dispute
Debate between Diane Abbott and John McDonnell
John McDonnell
I certainly will, because it was a campaign by the PCS that achieved the living wage, but it was intervention by Ministers and others, as the right hon. Gentleman will recall, that urged the employers to give the living wage in London. That shows that interventions by Ministers and others do work in these cases. All that I am asking for today is that we all recognise our responsibility to try to bring both sides together to resolve the dispute, because the gallery is a national institution of great significance.
Some 22,000 have already written to Mark Getty, who chairs the gallery’s board of trustees, calling for Candy Udwin to be reinstated. The gallery’s argument on the matter is that cuts in its grant aid require it to organise a greater number of fundraising events, and that it therefore requires greater flexibility from its workforce. The gallery claims that the staff and PCS have
“refused to agree any changes”
or to agree greater flexibility and that, therefore, it had no choice but to outsource them to a private company. That is simply untrue, as has been shown in the evidence I have seen directly from the union and in meetings with the staff. The union has put forward an alternative plan that proposes a new flexible contract that would guarantee the gallery all the flexibility it needs, as well as being supported by the staff. The union has persistently asked gallery managers and trustees for the opportunity to discuss the alternative plan properly, which it believes has never happened.
The PCS tried to engage in talks at the gallery last year, and at ACAS earlier this year, and it continues to call for talks. The union has even carried out its own scoping exercise, which confirms that there would be support from the staff for its plan and that its proposals would guarantee the flexibility that the gallery requires. The union will shortly present its detailed proposals to ACAS and invite it to organise an independent scoping exercise to confirm the union’s findings with regard to the flexibility of working that will meet the gallery’s demands. Interestingly, as recently as this week, in Newsweek magazine, the outgoing director, Nicholas Penny, was reported as
“voicing a preference to keep visitor services in house.”
There is a responsibility on all of us, including the Minister, to encourage a resolution to this dispute to help get both sides back to talks before further damage is done to the gallery and its reputation. If we can help to encourage the gallery and the union to find an agreeable solution, that would give the incoming director, Dr Gabriele Finaldi, and the new chair of trustees, Hannah Rothschild, who take up their posts in August, an opportunity to heal the wounds of this dispute and the damage done by it and take the gallery forward with the staff in support of them.
I know that Ministers are loth to intervene in arm’s length bodies, but the National Gallery is funded by the taxpayer and has national significance, so it is a special case, where ministerial involvement is required. As the right hon. Member for Cities of London and Westminster (Mark Field) said, everyone was pleased when the intervention took place that helped to ensure that the gallery overturned its previous refusal to pay the London living wage, which will now be paid from 1 July. It would be possible for all of us present in the House, including the Minister, to make a statement to encourage the gallery to attend talks at ACAS in an attempt to resolve this dispute. That has happened before in past disputes and should happen again today.
The crux of the issue is that the National Gallery is arguing that it needs to raise additional funds through out-of-hours fundraising events—an important part of its strategy to cope with the reduction in grant aid. However, everyone is now saying that that should not be at the expense of the quality of the service that the gallery provides to those who visit it for free. In November 2013, the gallery and the board of trustees agreed with this, arguing that privatisation would not be in the interests of the gallery in terms of the quality of service or financially. A document published by the trustees said:
“A well trained and committed workforce in-house, with a good understanding of the Gallery’s specific circumstances”
will provide the best quality of service for the National Gallery, its 6 million visitors, and all those who access its collections for education and enjoyment.
There is no evidence that that does not remain the case. In fact, all the evidence shows that so far the privatisation and outsourcing is leading to reductions in the quality of terms and conditions for staff and of the service that those staff provide. There is some evidence for this at the National Gallery. CIS, the private company that has been brought in on a temporary basis to provide visitor services and security, has told its staff that it is not their job to answer questions from the public about the paintings. This is a gallery! PCS believes that there has also been an increase in the number of complaints from members of the public about the behaviour of the staff working for CIS.
Let us contrast that with the National Gallery’s own staff. They are extremely knowledgeable about the collection and see it as part of their duties to inform the public about the paintings, where they are located, and if they are off-show for any reason, as well as giving information or advice if asked. That is a crucial service provided at the gallery, especially for those visiting for the first time or those without specialist knowledge of the collection. Staff who are planned to be outsourced include those in the information service, those who deal with school bookings and support for school visits, and those who deal with complaints and freedom of information requests. The process of privatisation is going on apace, threatening all the expertise that has been built up over generations.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
Does my hon. Friend agree that it is long overdue that the Government intervened in this dispute in one of the jewels of our heritage? Does he also agree that it is extremely shortsighted of the management of the National Gallery to seek to privatise public sector jobs in this way, because what will happen is what always happens—permanent, stable staff, who are invested in their work and in the museum, are replaced with non-permanent, insecure, privatised staff, and that must, over time, lead to a diminution of the offer to the general public?
John McDonnell
It is interesting that the shortlisted companies bidding to take over two thirds of the staff jobs are security companies: CIS and G4S. These are companies with specialist knowledge of security, not of art, the gallery itself or its history, and certainly not of dealing with people who want to see and enjoy artistic talents going back centuries.
The National Gallery managers claim that they are only doing something that has already happened in other museums and galleries, but that is just not true: no large gallery or museum has introduced an across-the-board outsourcing of two thirds of its workforce, including all the front-facing staff, which is what the National Gallery proposes to do. The National Gallery is therefore proposing an experiment in the face of widespread opposition from not only the staff, but the general public: 45,000 people have signed a petition against the proposals.
The costs already involved in the employment of CIS are shocking: £1 million has been spent on this private company, effectively to use it as a strikebreaking force during this dispute and to avoid the current legal restrictions on the use of temporary staff to replace striking workers. The company was introduced when outsourcing was first announced in July 2014. The stated reason was the need for additional events during the Rembrandt exhibition. However, the gallery’s own staff have covered all other exhibitions, including the Leonardo exhibition in 2011-12, which was even busier, with more extended opening. To be frank, if there was £1 million to spend on the National Gallery, it should be spent on ensuring that it operates more effectively and to redress the 20% fall in the number of visitors over the past five years.
What has made this dispute even more bitter is the victimisation that I mentioned earlier. The management has refused to engage seriously with the union on the alternative plans, but it has also gone further and victimised a PCS representative, which, to be frank, is despicable. Candy Udwin was a PCS representative involved in helping lead the union’s campaign against the privatisation plans. She was dismissed. What for? For sending an email to a union representative which included an estimate of the CIS costs and suggesting he request information about the costs from the head of human resources. Even though the head of human resources replied that the figure was entirely wrong, Candy Udwin has been dismissed for gross misconduct, since sharing that estimated figure was deemed to be a breach of commercial confidentiality. This would be farcical were it not for the effect it is having on this PCS representative.
An employment tribunal recently awarded Candy Udwin interim relief and ruled that it was likely that a full hearing would find that she had been unfairly dismissed on the grounds of her trade union activity. The judge’s ruling stated that it was likely that her actions would be found
“not to be blameworthy let alone gross misconduct.”
I urge the Minister to encourage the National Gallery to review its decision to dismiss Candy Udwin and to allow her to return to the job she loves and to represent PCS members at the gallery.
The National Gallery has failed to carry out an equality impact assessment of part of the proposed changes and to meet its public sector equality duty under the Equality Act 2010. This has been raised with the gallery and with the Department for Culture, Media and Sport. The Government’s Equalities Office works from within the Minister’s Department, but his Department claims that the provisions of the Equality Act and the public sector equality duty do not apply and can be ignored. Staff protected under the Act, such as the disabled and the aged, are to be told that they have to stand all day, and women with childcare and caring responsibilities could have flexible working practices imposed on them. The union has pressed for six months to work constructively in this area with the Minister’s Department, but without success. Is the Minister comfortable with the equality duty being ignored in that way, and will he review the Department’s decision?
Why is this happening? To be frank, I think there is a crisis of management at the National Gallery. If the director still claims, as has been quoted in Newsweek this week, that he would prefer the staff to remain in-house, and if the executive committee and the trustees still believe, as they did up to the beginning of 2014, that outsourcing would not be in the best interests of the gallery, it might be instructive to understand why there has been such a change of heart. I think it is because of the crisis of management there.
Over the course of two years, nearly all the senior managers left the gallery, whether voluntarily or otherwise. Ten National Gallery directors and senior managers resigned, were dismissed or left with a compensation package between 2012 and 2014. The gallery’s leadership style in response to the problem that they are now experiencing appears to be to remove and replace personnel, rather than to tackle any of the issues that they have to confront.
Once removed, staff have often been replaced by temporary advisers. Where do they come from? For example, there is the employment of David Commins—previously G4S security manager for the Olympics—as the gallery’s security adviser, who was then responsible for the introduction of CIS and the development of the privatisation proposals. A new head of human resources, RoseMarie Loft, was also employed at that time. This appears to reflect an absolute crisis of management at the gallery. I think there is concern right the way across the piece that, actually, unless the issue is resolved, it will sour the introduction of the new director and the new chair of the trustees.
There has been a huge campaign on this issue. Only a few weeks ago, Trafalgar Square was filled not just with strikers, but with their supporters. Artists turned up to read speeches and poems and to present artwork expressing their concern about this overall dispute. An alliance has developed right the way across those who receive the services of the National Gallery and enjoy them and those who provide them, so there must be a way forward before further damage is inflicted on the staff, the reputation of the gallery and the future of the service. This dispute is not going away, because there is such a sense of grievance among the staff themselves, particularly with regard to the victimisation of their trade union representative. There is a view that constructive talks could be held immediately that would find a resolution to the problem on the basis of the alternative plans proposed by PCS. It would not take much to get both sides together to resolve the dispute.
I suggest that we agree some proposals today, and I urge the Minister to back them. First, from this House, we should set a deadline for management and unions voluntarily to come together within 10 days. We should urge them both to get round the table and negotiate. At the end of that 10 days, however, if management and unions have not entered into talks, I believe that the Minister should intervene. His Department funds the National Gallery, and his Department will be held responsible if the National Gallery’s reputation and service is damaged beyond repair as a result of the dispute. Therefore, if there is a lack of willingness from the National Gallery’s management at the end of the 10 days voluntarily to meet with the unions, I believe it is up to the Minister to force them to come together, to convene the meeting, to be at the round-table discussions and, at least, to plan out how the dispute can be resolved. This is too important a dispute for Ministers or individual MPs—particularly London MPs—to stand on one side.
As has been said, this is one of our national treasures—the National Gallery—with 6 million people visiting it every year. We have cherished it over generations, but its reputation could now be severely damaged. I urge the Minister to intervene at this stage. All of us who have looked at the issue think there is a resolution to the dispute if there can be serious negotiations. The onus falls upon all of us to ensure that those negotiations take place.
Transport for London Bill [Lords]
Debate between Diane Abbott and John McDonnell(9 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
John McDonnell (Hayes and Harlington) (Lab)
It is often a tactic in debates such as these to talk at length to delay a Bill as much as possible, to obfuscate and to try to prevent it from becoming law, but we do not need any assistance in that regard for this Bill, as Transport for London has been doing that for us since 2011. It has been a bizarre process.
I reassure the hon. Member for Harrow East (Bob Blackman) that I will not seek to divide the House and vote against the Bill. I am a convener of the RMT parliamentary group and we are assured that clause 7 will assist us in protecting the hedging process for pension funds, so there is one clause that might have a shred of justification.
The hon. Gentleman mentioned that TfL had offered an amendment inserting a new subsection in clause 5. At some stage guidance must be issued to promoters of private Bills. TfL has been promoting the Bill since 2011; it wrote to the RMT in May when it knew about some of the specific objections and the petitions against the Bill had gone in; we had a meeting on Friday afternoon; and at 3 o’clock yesterday we received notice of an amendment. TfL’s parliamentary or advisory team needs to be examined to see how we have reached this parlous state in debating the Bill.
I would have expected TfL at least to consult everyone who had petitioned against the Bill so far before introducing the amendment. It was obvious that such an amendment would be offered, because the lack of accountability to the Secretary of State in clause 5 stood out, but rather arrogantly it thought it could force the Bill through in the next few weeks without considering the main concerns expressed by the petitioners. Perhaps further advice should be given to TfL about how to behave when promoting proposed legislation. Perhaps the hon. Gentleman could suggest that sending a “peace in our time” letter at 3 o’clock on the day before the legislation is considered is simply unacceptable.
At this stage, I would expect TfL to withdraw the Bill, consult on the amendment and bring forward a properly drafted Bill, but I cannot see that happening, so let us have at least some general discussion today about why people are anxious about it. I think it is a matter of ever having confidence in Transport for London dealing with any property development. The hon. Member for Harrow East mentioned problems with taking over tube lines. Many of us have a long memory of what happened with TfL and its relationship with the public-private partnership, which was a disaster. Time and again, TfL officials and others came forward to advise us that PPP was an excellent way to raise funds and provide services, yet it was a complete disaster, which threatened £3 billion-worth of investment in TfL. When we looked at the figures, we found that £400 million had been spent on consultants, accountants and legal advisers, first to set the thing up and then in some way to try to retrieve it from the disaster it became.
I therefore think that this relatively small Bill of seven clauses has excited opposition among some members of the community and some Members of this House because of lack of confidence in TfL’s ability to go into partnerships with the private sector without either creating a disaster or being ripped off. Many of us worry that TfL will be given new powers to enter into partnerships that are not secure. These are not limited partnerships—they are not limited by guarantee or anything like that—but straightforward partnerships in which I suppose the main balance of interest will be with the private sector. The concern is that, yet again, the public sector will be left with the responsibilities. No matter what has been said about the hedging of some of the investments, those responsibilities could be unlimited.
People have examined the recent escapades of TfL in private sector development, and I am sure my hon. Friend the Member for Hammersmith (Mr Slaughter) will want to raise the issue of Earls Court, which does not inspire confidence. In fact, if this legislation had been in place at that time, it would have been used during the Earls Court development, which has aroused an amazingly sizeable opposition within the community. I think it has cost the party of the hon. Member for Harrow East control of the local council, such was the scale of the opposition, and it has subjected local residents to insecurity in their homes as well as raising concerns about the local community and the local environment. The concerns about this Bill are real.
Let me run through some of those concerns. The Bill will enable TfL to sell off or lease out land to developers elsewhere and right across the capital in the attempt to link up with property speculators as a means of gaining significant income—despite the track record of disasters in the past. Discussions with the RMT and other unions involved in TfL revealed their concern that such practices could produce extensive speculation around TfL sites, many of which should be secured for transport operations. Many within the industry raise with us the concern that this rush for short-term gain and short-term profiteering on individual sites will put at risk future developments needed for TfL in the long term.
The Mayor of London has rightly argued that we should be expanding the transport network in the capital, which means that some of the land currently in the ownership of TfL will need to be used. It looks as though individual developments will be allowed to take place, which will take the land away from transport use into speculative development, as we have seen in the Earls Court development. The hon. Member for Ealing Central and Acton (Angie Bray), who is no longer in the Chamber, mentioned that earlier. There is no guarantee that development of land in one area will not have consequences for other sites, and, as the hon. Lady said, it certainly will have consequences in her constituency. There is a real worry that giving Transport for London these powers will result in a virtual frenzy in TfL—certainly under the guidance of the current Mayor—to convert land in central London for uses other than transport.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
Is my hon. Friend saying that he believes that the leadership of Transport for London will sacrifice the long-term strategic interests of London’s transport infrastructure for short-term property development gain?
John McDonnell
What those who work in the industry want is a consistent plan for the development of the transport infrastructure, but what the Bill does is give more power to TfL to enter into speculative developments on the sites that it owns, along with developers. In the case of Earls Court—on which I am sure my hon. Friend the Member for Hammersmith will wish to elaborate—we have seen property development for short-term financial gain override the needs of the travelling public and the need for long-term investment in the future of the transport infrastructure. That example illustrates the loss of confidence in Transport for London among the public that will result from its exercise of the new powers, if they are given to it. We may well see a speculators’ charter in relation to properties that are currently in public ownership under the auspices of TfL.
People are worried not only about the desire to gain income, but about the fact that the current property developments are based largely on the selling off of land for the building of residential properties. Transport for London, as a public body, might well want to enter into a partnership with, in particular, local authorities, in the hope of combining the advantages of improving the transport network with the provision of residential homes. However, it seems from the examples that we have seen so far—notably in Earls Court—that the residential homes will not necessarily be for local people: in fact, that applies to a relatively small percentage. Most of the sites are being used for speculative development, and many are being bought by overseas landlords with a view to letting properties at extremely high rents.
People fear that if TfL is given these powers, it will go on a development binge with the private sector throughout London, without taking into account either the needs of the transport infrastructure in the long term or the needs of local communities. The Bill seems to take no cognisance of the need for TfL to bear in mind the social criteria or social objectives relating to any future development when using the powers.
As the hon. Member for Harrow East pointed out, there also seems to be a lack of accountability in the case of some of the partnerships. We received that letter on Friday specifically because concern after concern had been raised consistently over the years—for instance, regarding the fact that even the Secretary of State did not have the authority to be consulted about the exercise of some of these powers. We have now been told, in a letter that we received at 3.30 yesterday afternoon, that an amendment will be tabled to deal with that. It would have been helpful to have seen at least a draft of the amendment; all that we have is a letter of comfort, or discomfort, depending on people’s judgment of it .
If we look at TfL’s record of participation in developments with private sector entities, we see that it is the commercial entity that has gained the profit and TfL that has been left with the responsibilities and, often, the liabilities. In the case of some of the partnerships that have already been entered into, ownership of some of the sites is so diffuse that it is difficult for the public, in particular, to hold anyone to account when it comes to some aspects of the deals.
John McDonnell
The concern that many of us have is that Transport for London is not a property developer. It is not a developer with expertise in developing sites for high-value residential properties, yet that is the venture that it seems to want to enter into across London on most of its sites. There is an in-built lack of expertise in Transport for London. Many of us think not only that Transport for London is putting sites at risk by removing the possibility of their being used to develop transport infrastructure, but that Transport for London as a whole will be at risk from some of the liabilities that it will take on as a result of going into limited partnerships, which are not protected, with developers. The Bill has consequences not just for specific site development but for the stable funding of TfL in the long term.
I say to the hon. Member for Harrow East that the Bill seems to be an attempt at a quick fix by an organisation that does not have the expertise to enter the activity that it wants to enter. I would be more convinced that it had that expertise if the progress of the Bill had been more efficient and effective. The legislation has been hanging around since 2011. At this late stage, the clauses have still not been drafted properly. Clause 4 has been redrafted three times in that period. We have just received the letter of comfort on clause 5, but no amendment. That does not inspire confidence. This organisation could sit down with some of the most rapacious developers in the history of property development and secure deals without satisfying not just community interests but the long-term financial security of the sector.
I agree with the hon. Member for Christchurch (Mr Chope): when an organisation is called Transport for London, it should concentrate on providing transport for London, rather than go into property speculation in this way. The argument may be that Transport for London is under financial pressure from the Government or others and needs to look at other ventures, but we must take into account its record of working with the private sector to gain additional income or increase efficiency.
There was the debacle of the public-private partnership under the last Government—this is not a party political point. That demonstrates an inherent lack of expertise—I put it no more strongly than that—in the organisation; it lacks the expertise to be able to do deals with the private sector that deliver the service and that avoid the scale of liabilities that we saw under that partnership. It was extraordinary. Members who were here may recall that throughout that period the House was not kept informed. On both sides of the House there was shock at the scale of the incompetence and risk that TfL ventured into in those developments.
Those are the main concerns. The organisation is strapped for cash, by the sound of it, although the Government advised us earlier in the year that it received a significant grant. However, TfL says that it is strapped for cash and needs another source of income. It is looking at developing its sites to provide that and it wants to do it through partnerships with the private sector. As a result there are concerns that the overall operation of TfL will be put at risk. Those are the general concerns.
Let me turn to the individual elements of the Bill. I advise Members to go to the minutes of evidence taken before the Unopposed Bill Committee in the other House under Lord Sewel. TfL, with the Department for Transport present, took the noble Lord through the details of the Bill. As the hon. Member for Harrow East has said, it went to clause 5 in particular, and it said:
“Clause 5 would allow TfL subsidiaries to borrow and charge against assets and revenue streams. This will provide TfL with greater flexibility on how it borrows. Under secured borrowing, TfL subsidiaries may borrow for a discrete purpose, and the security could then be structured so that the creditor has recourse only against the subsidiary borrowing and not against TfL or other TfL subsidiaries.”
It went on to say:
“TfL subsidiaries may not grant security without the consent of the Secretary of State, other than in respect of those matters that are specified in a new schedule proposed to be included in the Bill.”
The hon. Gentleman referred to that.
Let me take Members to that new schedule. This is not a delaying tactic; I would like TfL to come back with some clarity on all this. The schedule means that it can, without the Secretary of State’s approval, enter into agreement with regard to subsidiaries to borrow and charge against assets and revenue streams. As I have said, it can do that with regard to activities identified in this schedule without Secretary of State approval. Let me give a selection of them. It can borrow against assets including
“property related to a tolling scheme…property related to the generation of power…property related to sponsorship activities being carried out by third parties”.
It can also borrow against
“property related to the use of land for commercial letting”.
I have no idea of the scale that is envisaged, but it means that TfL, without Secretary of State approval, can become a sizeable landlord with commercial lets and borrow against those revenue streams. I would like TfL to say what is meant by this and I would welcome some clarity as we move into the next stages. What is the scale of operation that it is looking at?
The schedule also refers in sub-paragraph (n) to
“land which is not operational land”.
Again, it would be useful to know from TfL what its definition of “not operational land” is and what the scale of that is in its portfolio.
I raise this because many of our individual constituencies will contain pieces of TfL land which are set aside for future transport developments, and it looks as though this will enable TfL to raise revenue or borrow against those pieces of land without any Secretary of State approval whatsoever. It would be useful to know the scale of that and to have some form of report setting out where these pieces of land are. They could be fairly sizeable.
Again, I would welcome clarity about the purpose of this particular venture in this particular case. As Members have said earlier, we all have sites in our constituencies that TfL may want to borrow against and therefore develop with a private sector subsidiary. If it then removes a transport operation from that site, it will have a knock-on effect on other sites because of the shift of functions, as is planned at Earls Court. I am concerned that there seems to be a lack of clarity from TfL in its dialogue with the petitioners on some of these issues with regard to the supply of information.
In the presentation to the Unopposed Bill Committee in the other House, clause 6 was explained as follows:
“Clause 6 of the Bill will allow TfL to form or join with others in forming limited partnerships. TfL would like to be able to use partnership structures to seek third-party investors in its property estate, and to manage secondary income generated from the estate.”
TfL mentioned, I think to reassure the noble Lord in charge of the Committee, that
“Pension funds and development partners are identified as likely investors, who often prefer limited partnerships to other legal structures to invest in.”
I am sure that we will deal with this matter in Committee, but I would like to ask Members to look—if not today, then in Committee—at some of the concerns raised by the petitioners about the concept of limited partnerships and, in particular, at a petition from Mr Richard Osband and other parties. Mr Osband was with us on Friday when we met TfL. He is a knowledgeable person who has done a large amount of research in this area. He admits that he is not a lawyer, but he has vast experience in property development and commercial activities. He tried to explain his concerns, which I now share, to TfL regarding limited partnerships.
The issue that Mr Osband raised was that a registered limited partnership may not carry out any activities at all. The partnership is between one partner and a general partner, and the general partner largely bears the main liabilities. If the other partner becomes active in some way in the management of the process, it will then become part of the definition of the general partnership and will bear liabilities. Mr Osband argued that the limited partnership concept was opening up TfL to bearing almost unlimited liabilities as a result of the process that the legislation will enable it to enter into. On Friday, we were mystified as to why there was a need for limited partnerships. The legislation itself provides for the ability to enter into partnerships with companies and others. These would be proper legal entities and they would ensure that the burden of risk was shared with the partner rather than falling significantly on to TfL.
We are now at a late stage, and the petitioner has made his position clear. On Friday, he was simply inviting TfL to get further legal counsel’s opinion, because he and a number of others had contested the original counsel’s opinion that TfL had brought forward. I have yet to hear a convincing argument from TfL as to why it would want to enter into limited partnerships, given the element of risk involved. TfL said on Friday and in some of its other discussions with Mr Osband that this was the preferred route of the developer. I am afraid that that does not inspire confidence that any public investment in these developments would be secure.
John McDonnell
Yes, that is one argument, but the point of the legislation is to enable TfL to enter into not only limited partnerships but proper partnerships. Clause 4 will enable TfL to enter into partnerships that are limited by guarantee, so why do we need a mechanism that is novel for TfL, that requires new legislation and that heightens the risk to TfL when there is already a vehicle available that will protect it? This mechanism appears to have been included purely and simply at the behest of some of the development companies that have approached TfL. That cannot be right. Surely the public purse needs to be protected in the best possible way.
I understand what my hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott) is saying, but it does not mean that the sole way in which TfL can raise income streams is simply by a sell-off; it can enter into proper partnerships with limited companies. The hon. Member for Harrow East mentioned, on a grander scale, the ability to have shareholders and so on, but that is the normal way of protecting one partner and another: having a common shareholding in that way.
I came at this on Friday afternoon, and I find it mystifying that although Mr Osband’s petition and further detailed notes had been received, we had not been given by today, even in the last throes of the briefings that were flying around yesterday, some form of assurance about the legal protections that would be provided as a result of introducing the availability of limited partnerships to TfL.
Mr Osband quoted to the TfL representative the issues raised by the Law Commission on this matter. It said:
“The essential feature of a limited partnership is that the liability of the limited partners for the debts and obligations of the partnership is limited to the amount of their contributions. This protection is lost if a limited partner takes part in management.”
So as soon as TfL gets involved in the management of any element of the partnership and the development—I interpreted that, as did Mr Osband, as meaning any form of management of even the individual site or some asset on it—it is no longer limited in its liabilities; it becomes a general partner open to unlimited liability.
I find it extraordinary that we have got to this stage in the Bill—three years on from its original promotion by TfL, nearly six months since the petitions were submitted on this issue and following a meeting on Friday—yet we still have not had a response in any detail on Mr Osband’s valid criticisms of what has taken place in terms of the development of a concept of limited partnership at the behest of the private developers.
Let me quote from the briefing note that Mr Osband provided for TfL on Friday, although I will not use the names of TfL officers, as to do so would be invidious. He said that one of the officers dealing with this
“seems oblivious to the fact that it would be TfL’s Limited Partner that would be at risk of unlimited liability by virtue of TfL’s participation in the management of the General Partner. Would TfL really want to enter a Joint Venture with no management control?”
This is like choosing between the devil and the deep blue sea. One can enter into a limited partnership and one’s liabilities are limited if one is not part of the management of that, but as soon as one enters into the management one’s liabilities are unlimited, yet a public body such as TfL would be expected to have some form of management responsibilities for the venture that is taking place. So it automatically gets caught, as this is a Catch-22 situation. I cannot see what benefit there is for TfL, although there must obviously be benefits for the individual developers who want to enter into these limited partnerships with TfL, because I fear that they will seek to ensure that the liabilities are placed on TfL and not themselves.
Again, let me cite what the Law Commission said, which was quoted by Mr Osband on Friday. He provided the quote directly to the TfL officers and still has not had a response from them. The Law Commission said:
“We understand this lack of clarity is considered a major defect in the law of limited partnerships in the United Kingdom.”
Again, a structure has been proposed in the Bill which even the Law Commission now considers relatively opaque in its operation.
I urge TfL, at this late stage, to reconsider the Bill and whether or not the legislation—certainly the clauses up to clause 7—is actually needed, given the facilities that TfL has for forming partnerships under the existing structures, which are flexible. My hon. Friend the Member for Hackney North and Stoke Newington has said that until now TfL has relied upon the sale of land to gain income, but that is no longer the case. It is able to enter into wider partnerships and does not have to rely purely on such sales. This concept of limited partnership is introducing a real vulnerability to the tax payer—the London council tax payer in particular—and the Government who fund Transport for London. I do not understand why TfL wishes to persist with this clause of the Bill.
I am extremely worried that the general public will not be able to scrutinise development deals if limited partnerships are established, and, even with the Secretary of State’s approval now being floated by TfL as an amendment, that there will not be sufficient political accountability. My hon. Friend the Member for Hammersmith will cite the example of what happened at Earls Court. On the examples that we have so far, this issue of commercial confidentiality has prevented, without resort to law in many instances, the ability of members of the community or individuals who are affected by developments from gaining information on the partnerships —their purposes and their operations. When redacted documents have been offered, they have been redacted in such a way to make them virtually meaningless. I worry that this Bill offers the potential for a whole series of disastrous ventures by TfL on site after site.
The hon. Member for Harrow East also mentioned taxation. At the meeting on Friday, representatives of the National Union of Rail, Maritime and Transport Workers said that they were concerned about ensuring the transparency of the operation not just of the partnership itself, but of the individual partners who have participated so far under existing structures. They were concerned about their willingness to abide by and adhere to tax legislation in this country and also to some of their responsibilities. At least one company that was mentioned on Friday and that TfL entered into a partnership with is based in a tax haven and is seeking to avoid taxation as a result of its established structure. Again, that is not uncommon, but it is not something that a public body such as TfL should be encouraging. Furthermore, it is not something that we should be seeking to facilitate even further by putting forward this limited partnership proposal.
The concern is that if such a company is willing to operate from a tax haven to avoid taxation, it is quite likely and quite able to walk away more easily from the liabilities on risks if any venture becomes problematic in the future. Again, it provides us with another example of questionable judgment by TfL. Going into a partnership with a company that is based in a tax haven and that is seeking to avoid its taxation responsibilities does not inspire confidence in the ability of TfL to develop future deals. Such practice may not be unlawful, but it is immoral, and that point was put to TfL on Friday.
Those are many of the concerns that have been raised in the discussions so far. My hon. Friend the Member for Hammersmith will go into some detail about what has happened at Earls Court. If Members want an example of what could happen under this Bill because of the lack of protection within it and because of the structure that has been put forward with regard to the limited partnership, Earls Court is a classic example. In fact, this Bill was designed to enable TfL to go into a limited partnership specifically with regard to Earls Court. TFL was not able to do that, because the legislation had been delayed for so long, but it went into another form of partnership that has exposed the local community to devastation, almost, and that has exposed TfL to being ripped off for the development.
Overall, in that example we have seen a complete lack of transparency about the discussions with the limited company. The potential issues with that site and the safe operation of the rail transport network have been raised and, as I have mentioned before, there is an increasing threat to social and affordable housing. Indeed, there is even a public health threat because of the air pollution caused by the increased activity around that site, and a threat to some of London’s cultural heritage.
Concern has been expressed about the lack of an independent economic impact assessment on the development and a lack of accountability to local people and the elected local authority in its current form. This is a shining example of how TfL, although I am sure it has the best of intentions, can be driven by political motives. I know that there have been statements about the nature of the people that some politicians want to live in the area. Mr Greenhalgh, in particular, wanted to remove working-class people from the area and to populate it with wealthier people. That was one of the statements he made publicly, but, regardless of that, TfL seems unable to defend itself against such political diktats from above and demonstrated extreme incompetence in its negotiations with developers and extreme ruthlessness in preventing local people from having a say in the development. That has resulted not just in a degrading exploitation of public assets but a debacle.
That is the example we would give of Transport for London’s incompetence in dealing with a major strategic site and with speculative property developers. If this legislation goes through, developers in London will binge at the expense of the public sector and TfL in particular. The land assets of TfL have been developed over nearly a century and they are land holdings specifically for development of the transport infrastructure. They are not there for speculative development by TfL to gain some short-term income at a long-term cost to Londoners. The Bill will risk the long-term planning of our transport infrastructure, increase the risk of the liability for property speculation falling on TfL and have an impact on the public purse.
We gave these warnings on the public-private partnership and we were ignored. We were ignored by the previous Government and, in fact, we were derided for those warnings that came from the RMT, the TSSA and the other unions that were working on the ground on London transport. They warned us and we had report after report that TfL was being ripped off in its dealings with the private sector and that there would be a catastrophe, and that is exactly what happened. The PPP became a disaster: the companies had to be brought into public ownership and control, we lost at least £400 million through payments to advisers, accountants, lawyers and so on and we put TfL at risk. I think that this is what will happen in this case.
The work force, with their expertise, and those who work deep within the heart of TfL are warning that the property speculation promoted by the Bill will put the long-term infrastructure of transport in London at risk. As I say, I will not oppose the Bill this evening because there is at least one clause on the hedging of protection for pensions that is supported by some elements of the work force, but I hope that by the next stage of our debate TfL will either withdraw some of the clauses, making the Bill workable, or at least provide some form of accountability and set objectives and parameters about the speculative developments that can be undertaken as a result of the powers that TfL will be given. Unless we set those parameters, London’s transport infrastructure could be put at risk, and we might face significant costs and burdens. I hope that the House will fulfil its responsibilities by not taking Transport for London’s assertions at face value, but will be looking at the expert evidence with which we have been provided.
I advise hon. Members to read some of the petitions against the Bill submitted by individuals with expert knowledge of the operation of Transport for London and the consequences of its developments so far. Given that TfL has brought forward, at this late stage, its letter of comfort, it would be useful if we advised it that the petitioners should be not only contacted, but invited to petition again, if they wish, specifically with regard to the amendment to which the letter refers. Although we are yet to see that amendment—we have received only the letter—I would welcome the petitioners’ views on that proposal. I have so far received only a couple of e-mails from those who attended Friday’s meeting, although I know that others have an opinion, and their view is that the amendment proposed in the letter would not save the Bill. They believe that the Bill should be opposed, despite TfL’s assurances. As I said, I shall not oppose the Bill today, but unless we get a definitive view from Transport for London on some of the questions raised in the debate, unless we have clarity about some of the Bill’s provisions and unless we understand how to set parameters for TfL’s operations in this speculative area of development, we will oppose it at a later stage.
I treat the Bill with real scepticism. It could be a speculator’s charter for the Mayor of London, whoever that might be in the future, and that may well be at a cost to London’s council tax payers. I warn the House that, as was the case with the PPP, the Bill could be a disaster for the taxpayer overall, and if it goes through, I fear that the Mayor and Transport for London will place a sizeable bill before us in a couple of years because we will have to bail them out for the losses that they have incurred due to speculative development.
To echo what was said by the hon. Member for Christchurch, TfL should concentrate on providing transport for London. It is not a property developer. If there was the expertise in TfL to carry out negotiations on such matters, an element of confidence might be inspired in us, but its track record, especially at Earls Court, demonstrates not only that such expertise is lacking, but that it does not even understand that it lacks that expertise. Property speculators run rings around it time and again, and those speculators then go off to international festivals to market sites that were once owned by the public of London. It is scandalous that speculators can make vast profits out of public asset in such a way because of either the connivance or gullibility of the people responsible in TfL.
I urge hon. Members to pay more direct attention to the Bill. There are few Members in the Chamber today, which I understand, given events in Scotland and elsewhere, but the Bill could be as catastrophic for London as elements of what might happen following the referendum in Scotland. We might not only be presented with an extraordinary bill in the future, but lose considerable assets on which we were hoping to build a modern network for transport in London. While the Bill is in Committee, I hope that we can find sensible amendments that will allow us to set parameters in the Bill to assure us that this leap in the dark will not lead to a future disaster.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
I have listened with great interest to my hon. Friends the Members for Hayes and Harlington (John McDonnell) and for Hammersmith (Mr Slaughter), and in particular to all the ups and downs of the developments in Earls Court and Shepherd’s Bush.
This debate is taking place under the long shadow of public-private partnerships and private finance initiatives—two wholly misconceived financial fixes designed to achieve public sector good. I will take this opportunity to say that PFI is of narrow merit and normally suited to capital projects that have a natural revenue stream, such as toll bridges. I certainly did not support the vast extension of PFI that happened under my own Government; nor did I support the misconceived PPP for public transport.
I can understand the scepticism being expressed by Members on both sides as a result of local authorities trying to be clever with financial instruments. However, I was taken aback by the headlong attack on the management of TfL by my good Friend the Member for Hayes and Harlington. He accused them of wanting to go on a property development binge and of sacrificing the long-term strategic interests of transport in London to property development. That is a tiny bit unfair.
John McDonnell
Let me make this clear. TfL is working under the political direction of the current Mayor of London. This is about Boris Johnson selling off sites to speculator friends to try to bail himself out following the cuts that have been made by this Government. This is not an attack on the individual officers of TfL—far from it. There is political direction behind this.
Ms Abbott
I will come on to deal with political direction later. The point I make is that on the long-term strategic development of transport in London the key elements in the current TfL management have an exemplary record, be it under a Mayor for whom I did not vote or under a Mayor for whom I did vote twice. It is a little unfair to accuse them of not having any long-term strategic vision. A lot of what has been spoken about by my hon. Friends the Members for Hayes and Harlington and for Hammersmith, and the hon. Member for Christchurch (Mr Chope) is the consequence not of malign forces within TfL’s management, but an overheated property market in London, predatory developments and a climate of tax avoidance generally among multinationals. The House must address such things. We need changes in planning law; enhancement of local authority powers; and fiscal measures to deal with issues relating to the overheated property market in London and some of the consequences.
Ms Abbott
I will not, because I am mindful of the time and I believe there is a wish to close this debate at 7.15 pm.
As my hon. Friend the Member for Hayes and Harlington said, much of what is happening is due to financial pressures from the Government—they would say that they are obliged to do this. It is important not to confuse TfL, which was named throughout this debate, with the Mayor of London. It is not my role to stand up to defend him, but I would want to defend the long-term, responsible, strategic approach taken by the management of TfL.
There is no question that there is a danger that TfL may be dazzled by the glories of the property world. I was looking on TfL’s website at what it says about itself and property development. It states:
“Transport for London is a brand that is recognised around the world and owns great properties in prime locations. Our unique selling point is the:
Location of our assets
Impressive property space”
and so on. Clearly, it sounds like people who are perhaps overly dazzled by the notion of being property developers, but I remind the House that it is not a question of TfL buying and selling property just to make a profit; TfL, in the course of its activity, has acquired assets that could be developed, be it airspace above tube stations, bus stations, disused depots, archways, surplus London underground land or large-scale transport projects. It is not as if TfL has been wilfully engaged in property development; it has these assets, which in some cases have transpired because of changes in the nature of public transport and in technical aspects relating to transport, and clearly it wants to do the best with them. I do not think TfL has any aspirations to be a property developer.
Ms Abbott
I do not think TfL has any aspirations to be a property developer; I think TfL would argue that it does not simply want to sell off assets in a one-off manner, as some Members have suggested. It wants to construct a way to have long-term revenue streams to pay for things, such as bus service enhancement. TfL can get capital, but revenue is harder to come by.
I listened with great care to what was said about Earls Court and it seems to me that the Earls Court deal may have been misconceived; it may be one of those unfortunate instances where the public sector was out-negotiated by private developers. The only point I wanted to make in this debate is that, in addition to the undoubtedly passionate attacks on TfL, we must give TfL credit for its stewardship of London’s transport system over the years. I hope that in Committee the Bill can be improved, so that whatever vehicles emerge from it ensure fairness on both sides of the agreement. Given the constraints under which TfL operates and given an overheated property market, which is not its responsibility, Members would be unreasonable in not seeing the need for TfL, and in not allowing TfL, to go forward with measures that it hopes will provide it with ongoing revenue. As for this being a quick fix, it surprises me that Members can say that a Bill that has taken five years to get this far is a quick fix. I understand what my colleagues are saying, and I am particularly concerned about what I have heard about Earls Court, but let us give the management of TfL just a little credit going forward.
Private Rented Sector
Debate between Diane Abbott and John McDonnell(9 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
John McDonnell
I was going to come on to that, but let us deal with it now. Tenants are defenceless at present. They may well know their rights, but they are not able to exercise them. Because the law centre in my area is on a contract, it is limited in the work that it can do, and it is swamped. The citizens advice bureau is swamped continuously. There are lines of people on a Tuesday morning queuing up to go to the CAB to book their appointment. In my constituency we have moved to an open door policy so that people can come to the office at any time. All the agencies that I am aware of are swamped.
Tenants cannot get into the system even to challenge what is going on. It is not just about getting access to a property; it is about defending themselves, once they are in that property, against abuse by landlords and threats of eviction. All this has resulted in the use of bed-and-breakfast accommodation in my constituency going up. The figure was 30 in 2012; the latest figures I have from the beginning of 2014 show that there were well over 200 families in bed and breakfast. I thought that on a cross-party basis we had committed ourselves to ensuring that no family would be in bed and breakfast.
The bed-and-breakfast establishments that I have been visiting are squalid. They are appalling. Because families are stuck in bed and breakfast for a long time, children are being brought up in squalid and often unsafe conditions.
John McDonnell
Suitable accommodation is non-existent. Firefighters in the Hayes station were commuting from Devon and Cornwall. It is very difficult to find anyone in public service locally who can afford a property in the area.
This means that the overcrowding in my constituency is appalling. In the 40 years that I have lived there, I have not seen it on such a scale before. People tell me it is as bad as it was after the second world war. We complain about kids being out on the streets and joining gangs, but overcrowding means that kids are forced out on to the streets, and they become incredibly vulnerable. Think about a child going home and having to do homework in the room where the other kids are having tea, or having their bedroom in the room where they have to do their homework either on their knees or on the bed. The social impact is horrendous.
Financial Services Bill
Debate between Diane Abbott and John McDonnell(12 years ago)
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John McDonnell
I wholeheartedly agree, but sometimes in relationships with the Government a line is drawn in the sand, which makes the right of veto sometimes crucial, particularly if there is a bloody-mindedness in the direction of policy making by the Chancellor when it comes to appointments to key posts. Although I take the gist of the hon. Gentleman’s argument and can see how the Treasury Committee could create a climate of opinion or produce a report that influences the appointment in a way that makes it impossible for a person to take it up because of the lack of credibility, I think there needs to be an even stronger role for the Treasury Committee and therefore Parliament in all these matters.
This is a crucial opportunity missed in respect of the Treasury Committee’s ability to influence the Government; in respect of the Government’s ability to demonstrate to this House a greater openness when it comes to the transparency of the operation of the Bank of England and of the new regulatory authorities; and in respect of the Government themselves in how they make appointments to these crucial positions.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
Does my hon. Friend agree that this is not just a matter of the relationship between the Government and this House, as it also relates to the relationship between the Government and the public? As we move into a period of austerity, if there is not sufficient accountability for the sorts of measures the Government view as necessary, it creates political instability. People do not see where the accountability lies for some of the austerity measures that are coming—not just in this country, but across Europe.
John McDonnell
That is exactly the point I am seeking to make. This post will have wide responsibilities and the decisions taken will have immense ramifications for the country as a whole and for all our constituents. Because of the unique role of the Governor of the Bank of England, the individual will be subject to public scrutiny in a way that a Bank of England Governor has never been under scrutiny before. I think he will become an individual in whom people must have confidence. I have to say that I have some anxieties about some of the names being bandied about at the moment, such as the appointment of a former member of Goldman Sachs, a company that does not have a particularly distinguished record in relation to the operation of economies throughout the world before and after the financial crisis.