We are grateful to the Minister of State for introducing the Bill, but we feel that his opening remarks have been extraordinarily brief. Clearly, this is a complicated and important Bill. I am disappointed that he has not touched on a good many parts of the affairs of the Covent Garden Market Authority.
We do not oppose the Bill. We concede that over the years a measure of this sort has become necessary. However, although we feel that it is a necessary measure we are not unnaturally disturbed that the Authority's finances have reached such a state as to make essential the financial provisions that are contained within the Bill.
I hope that those remarks will not be taken in any way as implying criticism of the Authority. On looking back at the events that have assailed it and the move of the market from the old site to the Nine Elms site, I do not see how it could have avoided this situation. That applies to the entire extent of the situation in which it finds itself.
I hope that the Minister agrees with those remarks and that when the Parliamentary Secretary replies to the debate he will agree that the reasons that have led to the introduction of the Bill do not reflect in any way a record of incompetence or neglect on the part of the Authority. It is right that the House should put those comments on the record at this stage.
On the face of it, it appears that we are either writing off or suspending a great deal of money, namely, £38 million. Over the past few years I think that the Authority has been lucky to have had as chairman two such distinguished and capable figures as Sir Henry Hardman and Sir Samuel Goldman to look after its affairs and to supervise the move of the market from the old site to the new. The two chairmen were saddled with a nightmare situation that was not basically of their own making.
As for the way in which the Authority has been run and organised, it is as well to put on record that there have been a few criticisms of the Authority. Some of the tenants believe that the Authority is somewhat overstaffed. I am in no position to confirm or deny those allegations. I have see no definite evidence that the Authority is overstaffed, but at a time when the whole financial structure of the Authority is being built it is important that when tenants have reservations about the way in which the Authority conducts its affairs the Government should do their best to settle expressions of disquiet.
The 14th annual report of the Authority underlines the fact that administra- tive costs are running at a rate of £129,000 per year and that the estate's revenue account shows a figure for salaries, pensions, and other contributions of a further £244,000. In the last month or so the Minister has declined to answer specific questions on staffing put to him by my hon. Friend the Member for Maidstone (Mr. Wells). The Authority's operations in the market were also questioned, and the Minister suggested that the Authority might provide some figures on staffing.
I am sure that the Minister can give us a little more help on these matters, because I understand that the staff inspection and evaluation branch of the Civil Service Department has recently carried out a survey of the staffing at the market and in the Authority. I hope that the Minister will refer to that survey. This is a golden opportunity to confirm or confound the tenants' claims about over-staffing.
I labour this point because it is important at this stage that as may as possible of the reservations held within the market can be dealt with. I hope that the Minister will be able to say that the Civil Service Department's report shows that staffing in the Authority is not overgenerous. I know that the Authority is taking steps to deal with the staffing situation. I gather that it intends to install automatic toll gates at the entrances to the market, which will reduce the number of staff.
I turn to the current problems of the market, and the Minister dealt with some of these matters in his speech. I am sure that hon. Members will agree that many problems have been caused almost entirely by circumstances outside the Authority's control. What has caused more trouble than almost anything else stems from the decision to schedule certain buildings within the old Covent Garden Market as listed buildings. In 1973 many of the buildings within the area of 6½ acres were listed.
This is not the place or the time to argue the merits of that decision. The decision was taken after a great public outcry, but it is not unfair to point out that the property owned by the Authority in the old market which it has sold, according to the 14th report, for £9·1 million would have been worth about £20 million, judging by a recent estimate, if the buildings within the market had not been listed. When those who are keen on conservation get to work and cause buildings to be listed, it can be an expensive operation for the public purse.
I hope that my remarks will not be construed as an attack on conservationists or on conservation policies. Indeed, coming from the Lake District I regard myself as a conservationist, but it is true to say that if those buildings had not been listed the Authority would have been £10 million better off and the financial crisis would have been considerably lessened.
The second major problem which has assailed the Authority since the new market was thought up in the early 1960s stemmed from the immense increase in building costs. The Minister said that £43 million had been spent on developing the new market at Nine Elms. I understand from the Authority that in 1964 the estimated cost of carrying out this work was about £31 million. As a result of increased building costs, the Authority has found itself saddled with extra costs to the tune of £12 million. This has led to the great indebtedness on the part of the Authority that leads us to consider this Bill today. These factors have caused the Authority to run into debt to the tune of over £20 million.
Matters have been made considerably worse since the concept of the new market was first born by the pause to which the Minister referred—a situation that led to a three-year delay in starting work. The market would have been open at a very much earlier date if it had not been for the restraint on public expenditure imposed by the Labour Government in 1966. Indeed, the delay meant that no further work, apart from minor operations, could be done until 1969. If that delay had been avoided, the massive cost increase to which I referred could have been partly avoided and the Authority would have been in much easier financial straits than it is today.
Furthermore, the Authority has been assailed by the tremendous increase in interest rates in the same period. The Authority has already drawn attention to the increased burden of interest charges which it has had to bear.
I recently asked the Authority how much it was paying in extra interest charges. It estimates that the rate of interest on these loans has gone up by about 3 per cent. during recent years. According to the figures in the 14th report of the Authority for 1974–75, interest charges for that year were £3·3 million on loans amounting to about £32 million. That is an interest rate of about 10 per cent. The Authority originally based its calculations on an interest rate of about 7 per cent. Therefore, rising interest rates are costing the Authority about £1 million a year. The Authority has been put in a difficult position as a result of events over which it has had little control.
The Authority faces an added difficulty to which the Minister referred. I am sure that the Authority was right in attempting to move all trade from the old market into the new because it would have been catastrophic if a rump had been left behind in the old market. Therefore, low rents had to be offered to traders initially as an inducement for them to move to the new market, and that has added to the Authority's problems.
I have frequently referred throughout my speech to the Authority's latest statement of accounts, but that statement only goes up to 30th September 1975. Yet in January 1977 we are discussing a Bill to deal with the Covent Garden Market Authority's current financial problems. That puts the House in a difficult position. We are trying to deal with a current financial situation on the basis of 16-month-old figures.
However, I notice in the 14th report that the Authority must send a statement of financial affairs to the Minister. I recently asked the Authority for a copy of that statement, but it refused me because it felt that the statement was the Minister's property and that it would not be right to release it to me. I do not complain about that, but hon. Members will be put in an intolerable position in Committee if up-to-date figures giving the current situation of the Authority are not made available. It will be impossible for us to do our work unless the exact positon is made known.
There is an easy way out of this problem and it would be helpful if the Parliamentary Secretary could help us find it. I understand from the Authority that the latest annual figures up to 30th September 1976—only four months ago—have been audited and are now awaiting printing before being sent to the Minister, according to the statutory duty of the Authority. It would therefore be of the greatest assistance to both sides of the House if the Minister could make the draft accounts available.