Examination of witnesses (Questions 160
THURSDAY 7 MARCH 2001
QUIN and MR
160. My question was on the timescale and a
deadline. This needs to be got on with. Why are they not given
a reasonable time and told "We must have your objection in
(Ms Quin) I am not sure that we are in a position
to impose a deadline, but certainly I know that the Minister has
taken up the issue again with the Corporation of London.
161. Before I ask you some questions about the
site, in schedule 3 of the accounts that were submitted to the
Committee from the Covent Garden Market Authority, there is a
note saying that out of £2.5 million of short-term investment
in 1999, £2.3 million was on short-term loan with an unnamed
local authority. Are you happy with the use of that money, and
if so, why can that not be used to meet some of the immediate
investment requirements of the Authority?
(Ms Quin) We are happy with the way that the Authority
has acted in that respect. It is to do, as I think you are aware,
with the money that covers the contingent liability for the sale
of Market Towers.
162. The Chairman told us that that was a diminishing,
almost minimal liability in his evidence to the Committee, and
therefore it seems an over-provision of quite a substantial amount.
(Ms Quin) It is not diminishing. It remains in force
until there are none of the original tenants left.
163. How many are left?
(Ms Quin) I think only two or three.
164. They cannot have £2.3 million worth
(Ms Quin) Nonetheless, I think that those tenants
do have leases until at lest 2010.
165. What are the value of the outstanding leases
at this time? £2.3 million?
(Ms Quin) I am not able to answer that.
(Mr Llewelyn) The liability does not cover the leases.
It is the liability for anything that goes wrong in Market Towers.
166. For those three tenants or in total?
(Mr Llewelyn) In total. The Authority carries a contingent
liability if a problem should arise in Market Towers and if any
of the original tenants are still there.
167. There does seem to be a difference between
the Chairman's analysis, if I have understood it correctly, and
what you have just told us. When was this last examined to see
if this is a correct figure?
(Ms Quin) I was asking questions myself about this
before coming along today, and the information that we have given
you is the information that I understand to be correct.
168. Perhaps you might care to re-appraise that
in the light of what appears to be a difference of opinion between
that and the Chairman's evidence.
(Ms Quin) Let me just say that we did look at that,
and that is why I have come with the information today.
169. You have indicated to us your wish to,
in due course, sell the market and therefore its site, as a going
concern. Can I ask therefore does that rule out any kind of piecemeal
disposal of the site? In the report of the Authority it indicated
that at some time recently you as a Ministry had discussions with
the Ministry of Defence about selling part of the site for Chelsea
Barracks, and that was rejected on practical grounds, but clearly
that pre-dated the Minister's position of selling it as a going
concern. Does that statement by the Minister mean it is all or
(Ms Quin) My understanding is that yes, the decision
that the Minister made refers to the whole of the site that the
170. To be clear, at this juncture, you would
entertain no proposal either from the Authority or by virtue of
an approach from a third party to dispose of part of the existing
assets, which are the site and the market?
(Ms Quin) No. If the Authority came up with a proposal
which was part of its future plans for keeping the market as a
going concern, we would look at that.
171. What do you mean by the words "going
(Ms Quin) That it is able to survive and has the potential
for expanding economically.
172. But not physically?
(Ms Quin) If you mean could the market be put in a
position in the future where it might acquire land or physical
premises, then we would not rule that out.
173. In the sense that there are spaces on the
site, the site could be redeveloped, it could be more intensively
usedthere are a whole variety of formulations of what you
could do even on a restricted area, or by making better use of
the whole site. There is just doubt in my mind. In this context
of selling it as a going concern, would you put into the sale
arrangements, legally or otherwise, a requirement parallel to
the current requirement that Covent Garden market has which requires
the Authority to run a market? Would you require the person who
acquired it as a going concern in perpetuity to run a market?
(Ms Quin) That is an interesting question. We would
certainly want to safeguard the market as a going concern for
the foreseeable future, and I think we would also want to safeguard
our financial position if it was sold to some organisation which
then tried to undo some of the conditions within a short period
of time by, say, trying to get a huge amount of money from developing
the land in a way that was not originally foreseen. In other words,
some kind of claw-back provision, which is very common in government.
174. This relates to Mr Todd's line of questioning,
where he was talking about what you could do with the site.
(Ms Quin) Indeed. We would certainly need to look
at that angle very closely.
175. Some time ago the Chancellor started what
I call a "Domesday Book" exercise, in which I gather
he was collecting a list of assets held by the Government. The
first question is: I assume the Covent Garden Market site is on
that list, is it?
(Ms Quin) I am sure it is, yes.
176. Have the Treasury, since you have put it
on the list, positively come to you and said, "What are you
doing with it?" So far this discussion has centred on your
overtures to the Treasury, but have they come back to you and
said, "You are on the list here. You have 56 acres of prime
London site. What on earth are you doing with it?"
(Ms Quin) Ministers have not approached ministers
177. That is a very Delphic answer. What about
officials to officials?
(Mr Llewelyn) I might be able to answer that. The
Treasury are extremely well aware of this, because in the Comprehensive
Spending Review settlement of 1998 the MAFF baseline for capital
spending was reduced by £44 million pending receipts from
the sale of Covent Garden. You may recall that we did have some
difficulty over the past few years because of the reduction of
the MAFF baseline and the failure to get receipts from Covent
Garden. So the Treasury are well aware of our desire to sell Covent
Garden, and indeed took it into account.
178. So that is pending. Let me move on to one
other aspect of selling it as a going concern. The question of
congestion charges was raised with us by the Chairman in unequivocal
terms, and I wondered what evaluation you had done to deem the
effect of the introduction of congestion charging on the value
of the market. Certainly traders made it clear to us in our visit
that they thought there would be a substantial on-cost. There
are a large number of vehicle movements in and out, where UK vehicles
would have to pay the charges but continental vehicles, I gather,
would not, so there would be some very interesting questions raised
by that. But it is potentially a big extra cost on to the market
operations. What is your opinion and what have you done about
(Ms Quin) We have not made a separate assessment from
the assessment that the Authority itself has done, and indeed,
I would say that it was the Authority's responsibility to make
that assessment. Obviously, however, we share the Authority's
concern if congestion charges were introduced in a way that made
life both difficult and expensive for the operation of the market.
179. Have you or are you planning to make a
submission to the Mayor of London and his experts about this matter?
(Ms Quin) We do not rule it out, but the Authority
has taken the initiative on this so far and has kept us informed.