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Refugee Centre, Sittingbourne

Volume 400: debated on Monday 3 March 2003

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Motion made, and Question proposed, That this House do now adjourn.— [Charlotte Atkins.]

7.46 pm

I thank the House for giving me this opportunity to address the serious issue of the Coniston hotel in my constituency and the workings of the National Asylum Support Service—NASS for short.

First, I should like to apologise to the House. I said sometime in early January on a radio phone-in programme that I was in favour of a two-year moratorium on asylum seekers. Sometimes, on live programmes, we say something that, almost before we have finished the sentence, we know we will live to regret. On reflection, I should have added the words, "Except, first, for bona fide refugees and, secondly, for economic migrants." Of course, what constitutes a bona fide refugee goes to the heart of the current debate about asylum seekers, and we have not reached agreement on what constitutes an economic migrant. Although I would be happy to develop those arguments, this evening is not the time to do so.

I wish to dwell on the decision, taken by NASS, to select the Coniston hotel as an induction centre for 111 refugees and asylum seekers. I have asked questions in the House, as well as tabling two early-day motions. In response to a question that I asked during Home Office questions, the Home Secretary said:
"My hon. Friend the Minister for Citizenship and Immigration has made it clear today that the procedure and process by which this matter was handled was unsatisfactory and that she has undertaken immediately to put in place a review. She is examining the contractual arrangements and why the letter sent by the local authority chief executive on 3 October last was not replied to. All those matters display an incompetence about which our Administration are doing something, as I have explained in the House before, but, with the new director general of the immigration and nationality directorate, we require a step change in the way that that directorate relates to local communities, responds to local Members of Parliament and displays its competence in dealing with these sensitive issues."—[Official Report, 20 January 2003; Vol. 398, c. 6.]
Later, at Prime Minister's questions, the Prime Minister said:
"Let me make it clear that there has been inadequate and wrong use of the consultation procedures. I entirely understand the concern of my hon. Friend and his constituents. That is why the Minister responsible has tackled the issue."—[Official Report. 22 January 2003; Vol. 398, c. 294.]
The consultation period should have begun at the outset. All parties have signed up to that and it has now happened, although I have asked that the decision be taken independently of NASS, as it was at fault in the first place.

Two petitions have been presented over the past six weeks—one to the House and one to the Prime Minister. The first had more than 5,000 signatures and the second more than 7,000. Moreover, as I understand it, more than 4,000 constituents have written to NASS about the Coniston hotel. Swale borough council, largely due to the good offices of Councillor Truelove, has submitted its response, as has the local residents association, SACK, representatives of which came to see my hon. Friend the Minister two weeks ago. May I place on record my thanks to her and her staff for seeing them, the time that she gave them, and the manner and way in which she listened carefully to their arguments. They left the meeting feeling that there was a heart and soul to this government process after all. My response will go in tomorrow, and I sense that this debate is the end of the formal process. I know that the Minister must probably wait not only for NASS's recommendations on the Coniston, but for Swale borough council's legal objections, based on a change of use for the hotel. In her response, perhaps she will let us know when she thinks that she will be able to make a decision, and whether it will be after the legal process has been completed.

First, let me raise my objection to the way in which NASS reached its decision with Accommodata in respect of the Coniston hotel. The Coniston hotel was owned by Mr. and Mrs. Kleczowski. They wanted to sell the hotel, which had been in the family for two generations. They were expecting to sell it to a bona fide hotel group so that it could be improved. They gave instructions to Christie and Co., and on 10 September 2002 a sale was negotiated with Multinational Trading Ltd., with a registered office at P&O distribution unit, 2 Rockware avenue, Greenford, Middlesex. The lawyers acting for the owners were Jarmans solicitors, of Bell house, Bell road, Sittingbourne. The solicitor doing the deal, or acting on behalf of the owners, was Brian Slater. On 13 September, papers were sent to the buyers' solicitors, Jeffrey Green Russell, for the attention of Mr. Benton at 56, New Bond street, London W 1. On 15 November 2003, a new company, called Heatherside Ltd., company No. 106771C, with a registered office at St. George's court, Upper Church street, Douglas, Isle of Man, was going to be the potential new owner of the Coniston. Contracts were exchanged on 19 November, with completion fixed for 20 January 2003.

On 7 January, that changed again—this time with a new company and a new set of lawyers. A notice was received from Jeffrey Green Russell, but a contract had been signed with Munro Properties Ltd., care of RBC Trustees (Guernsey) Ltd., of PO box 48, Canada court, St. Peter Port, Guernsey. Their solicitors were stated to be GSC of 31–32 Ely place, London EC1. Accommodata, of which the owners had not heard, never appeared anywhere in the sale document. On 10 January 2003, GSC wrote to the owners direct as the licence holders to say that the applicants would be Paul Greenwood and Ian Michael Richards of Accommodata Ltd., and stated:
"It has been anticipated that Munroe Properties Ltd. will complete the acquisition on 20 January 2003. The Property will however be operated by Accommodata Limited".
On 15 January 2003, a licensing application was received by Jarmans, the solicitors for the owners, when it first became aware that the new licensing owners would be Accommodata. Finally, on 4 February 2003, the hotel acquisition was completed.

It seems to me that NASS began negotiations with Accommodata well before it owned the hotel—I suspect in the middle of 2002. It had certainly signed a deal with Accommodata to provide an asylum and induction centre by 13 November 2002, with a start date of 29 January 2003. If you will forgive me, Mr. Deputy Speaker, I find this part of the process extraordinary. The lawyers for the hotel owners had no idea that it would end up with Accommodata and that it would end up as an induction centre, but NASS did. That is not how a Government agency should be allowed to work or act. You will see, Minister, that the owner of the Coniston—

Order. I do not know whether the hon. Gentleman has read the Speaker's recent letter, but he is in breach of it in two respects at present. He must not use the second person when referring to another hon. Member. I shall leave him to think about what the other matter is.

I apologise, Mr. Deputy Speaker, and you are quite right.

My hon. Friend will know that the Coniston's former owners did not know until 6 January the intent of the owners, who were finally revealed as Accommodata. Their lawyer, Brian Slater from Jarmans, did not know until four days later, and Slater's partner handling the change of title for the liquor licence did not know for another five days, on the morning of the request at our local magistrates court in Sittingbourne. Our support services in Kent were given less than two weeks to cater for 111 refugees and asylum seekers, yet NASS had begun negotiating with Accommodata perhaps as early as six months before anyone knew that that would happen. Will my hon. Friend tell us, as I asked at our second meeting, whether NASS will put into the public domain its due diligence on Accommodata? I hope that she will tell us tonight that that will be done.

Let me turn to one or two people behind Accommodata. I shall concentrate on three companies in particular. The first is a company that I think was established in 1988 called Buckingham International. By 1993, it had losses of approximately £100 million. We may have to take this with a pinch of salt, but according toPrivate Eye:
"In the process, offshore Jivraj family trusts and companies in Jersey, Switzerland and the Netherlands Antilles swapped highly priced assets and debt for cash and Buckingham shares in a tax free haven."
The second company, Petersham House Kensington Residents Association Ltd., went into compulsory liquidation. A petition was presented by the directors to the High Court on 10 June 1992, reference 003594. Its directors included N. N. Jivraj and N. G. R Jivraj. Three firms of accountants were reported to the Institute of Chartered Accountants in Milton Keynes, which took four years to reach a deliberation. As the investigation committee at the ICA included members from PKF and Stoy Hayward, it is strange to record that no action was taken. After all, they were two of the three accountants reported to the ICA in the first place, so no surprises there then.

The local council, Kensington and Chelsea, in an unprecedented move, also instituted proceedings. Mr. N. Brydon from the Insolvency Service handled the case, and J. R. Sibley was listed as the official receiver. It may be—this is part of the complication of some of the companies that I am talking about—that PHKRA Ltd. was a subsidiary or owned by another company called Brimtal Ltd. A DTI inquiry into Brimtal Ltd. took place in 1993–94. Apparently, it had committed five breaches of company law, and its accounts had understated losses by £160,000. Peter Joyce, then the chief executive officer of the Insolvency Service, part of the DTI, failed to take any criminal proceedings against the directors. That is despite the fact that from 1981 to 1989 it appears that the company was treated as dormant, although in fact it was trading. It appears that no annual general meetings were held between 1981 and 1989, no accounts were distributed to shareholders, and information to Companies House apparently may have fallen outside the law of the day. A third company, Calfayre Ltd., owners of the 157-bed Holiday Inn hotel in Cromwell road, Kensington went into receivership with estimated debts of £20 million. The joint receivers were Alan Barrett arid James Wilding of Price Waterhouse.

Let us move forward to 2000, when Accommodata Ltd. was incorporated on 16 February with an address of 5th floor, Regina house, 124 Finchley road, London NW3, registration No. 04663698, company No. 3926871. Other shareholders included Shallan Ltd. and Zareno Ltd., which are also wholly or partly owned by Nurdin and Nick Jivraj. The last accounts were registered on 31 December 2001, and the next accounts were due on 31 October 2003. As we know, Accommodata Ltd. appears to have purchased the Coniston hotel through Multinational Trading Ltd., then Heatherside Ltd., and then Munro Properties Ltd.

For my peace of mind, will the DTI, the FSA and the Serious Fraud Squad undertake an analysis of those companies, especially Buckingham International? Last Thursday'sFinancial Times ran a leader asking for an independent system of monitoring auditors. I wish that it had also asked for an independent system of monitoring liquidators. The Government need to look at preventing offshore companies registered in tax havens from owning residential properties in the UK. Alternatively, the rules governing those offshore companies' finances should be the same as ours. I could not access the Jivraj's accounts in the Isle of Man or Jersey because their financial rules and obligations hide the information. That cannot be right. The Tories may have sat on their hands for 18 years over that, but our people expect better from the Labour Government.

However much information I put into the public domain, my sense about NASS is that because Accommodata had already worked with it at centres in Leicester and Cardiff, it never undertook an original forensic due diligence examination of the company directors back when it was formed in February 2000. Therefore, when the Coniston was put up for another induction centre, it was already a done deal. I hope that the legal department at NASS is subject to a separate inquiry.

That is enough about NASS—let me turn to the Coniston itself. The Coniston is our only major hotel in Sittingbourne.

I am extremely grateful to my hon. Friend for being his usual generous self and allowing me to intervene. Rockware avenue in Greenford, which my hon. Friend has mentioned, is in my constituency and I have looked into this issue. My investigations have led me in a different direction from that of my hon. Friend. Is he aware that both Migrant Helpline and the Refugee Council have given unequivocally glowing endorsements of the standard of service that is provided by Accommodata?

That is not the case in Leicester, where I think a High Court case is about to take place.

As I have said, the Coniston hotel is the only hotel in Sittingbourne. The economic report of Swale borough council said that we desperately need another hotel as demand is outstripping supply. Four weeks ago, I started an e-mail conversation with Hammerson, the owners of the Oracle at Reading and Brent Cross in north London. The company has bought 51 acres in the heart of Sittingbourne. No doubt it will want to develop a retail park, a multiplex cinema and an indoor swimming pool—as well as an inlet marina with housing. All that that will do is increase the need for hotel beds and hotel investment.

We need the Coniston. We want people from Hammerson, as well as our current business visitors, to stay and spend their money locally and enhance our local economy. We need the Coniston and we would like it hack. We need it most because it is our community hotel. Already, 40 weddings have had to be postponed. Can NASS understand the heartache and disappointment that rearranging those 40 weddings has caused my constituents?

Is it true that NASS neither visited the Coniston before signing the deal with Accommodata nor asked for any economic or social data from Swale borough council? Coniston is not a secure site. Will my hon. Friend confirm that police costs for securing the Coniston have already reached £100,000 in less than two months? Should NASS go ahead with its plans at the Coniston, the police bill, over three years, will be somewhere between £1.5 million and £2 million. Who will pay for that—Accommodata, NASS, Kent county council or Swale borough council? Our citizens have a right to know.

If the Government had asked its top 300 towns and cities to share in the process of accommodating refugees and asylum seekers, we could manage the current influx. Had NASS brought people in Sittingbourne inside the decision-making process, and helped us to lay the issues in front of our citizens, we would have suggested properties and had a mature debate with our stakeholders—including our local churches, which I am sure would have taken a lead. We would have understood these issues better. I believe that if the site had not been our only hotel, we would have welcomed the refugees. Sittingbourne people are decent people. They understand how serious an issue this is for the Government—any Government. However, they have turned against us. They do not fully understand the relationship between the Home Office and NASS; people think that they are one and the same. Consequently, people have lost trust in the process of democracy.

When my hon. Friend the Minister reviews this case, I hope that she will agree that NASS has to be broken up, that it has to be moved from Croydon, and that it needs better management and management systems across all Government Departments. Notwithstanding the costs involved at the Coniston, I hope that it will be given back to our community. After all, it is our only community hotel.

8.3 pm

I thank my hon. Friend for the way in which he has presented his case and for his courtesy in sending me a copy of his remarks a little earlier in the day. That helped me to ensure that I could answer as many of his points as possible.

As he knows, I have made it clear before that I am deeply unhappy with the way in which NASS failed to maintain communications with Swale borough council during the procurement process for bed spaces at the Coniston hotel. He also knows that I have instituted a review of NASS operations generally and that, since my appointment as Minister, I have accelerated the regionalisation of NASS. That is on track. I regard it as an evolutionary process. We will consider extending functions that can be regionalised as the first wave of regionalisation settles. I hope that it will be successful.

Since 10 January, there have been regular meetings between NASS and the council. In addition, NASS officials have attended two public meetings in Sittingbourne, at which members of the local community were able to raise concerns. My hon. Friend thanked me, for which I thank him. As he said, I was able to meet local councillors and community representatives in Sittingbourne. The meeting was useful and constructive, and conducted in a mature and open way. At the meeting, I made it clear that, although we could not allow consultation to continue indefinitely, I was happy to agree to an extension to ensure that everybody felt that they had had an opportunity to contribute. At that point, residents asked to continue at least until 28 February. As soon as people feel that the consultation has run its course, I will be in a position to receive a report and make a decision. I hope that many concerns can be resolved during discussions between NASS and the council—although we may have to accept that some issues will not be resolved. I will get a full report and I will make the decision on whether or not we will place asylum seekers at the Coniston hotel.

Bearing in mind some of my hon. Friend's comments, this debate gives me an opportunity to set out again what happened during the exercise to procure bed spaces to support an induction centre for those making their applications in the south-east. NASS ran a competitive tendering exercise, in line with standard Government procurement guidelines. There was nothing underhand or secretive about the process. It was done in the normal way. The guidelines require that information on tenders must be considered as "commercial in confidence"—a technical term with which I am sure my hon. Friend will be familiar—until a contract is awarded. However, the need to treat tenders as commercial in confidence does not prevent consultation. As part of the exercise, bidders were told that details of their tender would be passed to the relevant local authority. Letters were sent to chief executives of local authorities in areas where we were looking to procure bed spaces. The letter, while making it clear that the information contained was commercial in confidence, did not prevent information being shared with anyone in the council, or outside the council, whom the chief executive thought it was necessary to supply information to. NASS needed the information to enable it to undertake a full and careful evaluation of all the tenders.

Two letters were received from Swale borough council. I have seen them. They are very short and anyone reading them would see no concerns that they would think that the authors had thought significant. The second letter passed on some information about possible crime and disorder concerns. However, I want to make it clear that those concerns were generalised and did not relate to the possibility that asylum seekers staying at a hotel would engage in criminal activity in the local area. NASS considered the contents of the letters but took the view that there was nothing in them to prevent the hotel from being used as accommodation only. A report came to me and a contract with Accommodata was signed on 11 December. As I have already said, it is my real regret—and I admit that I had assumed that things were happening differently—that while the process was continuing, NASS did not correspond with the council. It should have done. It is also a fact that, once the contract was signed, NASS could have, and should have, engaged more quickly with the council to allay public concerns.

NASS has entered into a contract with Accommodata to use up to 111 bed spaces at the Coniston hotel, as my hon. Friend has said. In turn, Accommodata—which has a licence to operate the hotel but does not own it—has a contract with the owner, Munro Properties, to lease bed spaces there to enable it to fulfil its contract with NASS. I am told that there are other bedrooms at the hotel that are not part of the agreement between Accommodata and Munro. Those are available for use by the public—although I have heard comments from local residents on the feasibility of that use continuing with asylum seekers in the hotel. I understand those points.

I want to assure my hon. Friend and the residents of Sittingbourne that no asylum seekers will be placed in the hotel as a result of the contract between NASS and Accommodata until I have decided whether that is appropriate. However, I cannot stop Munro Properties or Accommodata doing work at the hotel if they want to.

My hon. Friend will know that the purpose of the induction centre concept is to make sure that, at the very earliest opportunity, we make strong contact with asylum seekers when they make their claims and establish a mechanism for that contact to continue We brief them fully on the asylum process and start to prepare them for the outcome that the vast majority of them will face—that their claim will not succeed. We are trying to bring order and rationality to the system and to increase the number of removals of people whose claims do not succeed.

It is envisaged that people will be in the induction centre for a very short time while their fingerprints are taken, their identities are established and they are issued with the new identity cards that we are using for asylum seekers. They will then be dispersed. They do not stay in the induction centre and, as my hon. Friend knows, Kent is not a dispersal area and we have no plans to alter that. There is no suggestion that asylum seekers staying at the Coniston hotel or anywhere designated as an induction centre will be provided with longer-term accommodation in the area while their application is being considered.

My hon. Friend made a number of points about Accommodata as a company. According to my information, this Accommodata Ltd.—I shall shortly come to the other companies that share this name—is owned 50:50 by Shallan UK Ltd. and Zareno Ltd. Both companies provide loans to Accommodata at commercial rates of interest. I am providing this information, because I take my hon. Friend point's about NASS's due diligence appearing in the public domain. This information was revealed by NASS's checks on Accommodata. Accommodata, Shallan and Zareno are all registered in the UK. Accommodata was incorporated as a UK registered limited company on 16 February 2000. It acts as a property manager; it does not own accommodation facilities or associated services.

The background checking process for Accommodata's bid evaluation started in June 2002 when NASS placed advertisements for expressions of interest in providing hotel services in the south-east. In September 2002, along with nine other companies, Accommodata submitted a detailed tender in response to NASS's 94-page invitation to tender document, and NASS then undertook detailed commercial and technical evaluations. Each evaluation took place independently of the other. Accommodata scored very highly compared to the other bidders, and the Consiton proposal was found to be fully compliant in the technical evaluation. In addition, the company was required to provide details of its health and safety policy, insurances, track record and statements of its methods. References were demanded.

My hon. Friend may be familiar with Dun and Bradstreet reports, and they were obtained for Accommodata and for its parent companies. The invitation to tender document also required Accommodata to disclose whether, in the previous five years, any of its directors or the company secretary had been associated with a company that had gone into liquidation, any of them had been liable for bankruptcy proceedings or had been involved with any bankrupt company, whether the company had been subject to a termination of contract due to failure to fulfil contractual obligations and whether the company had been a defendant in a tribunal, civil court case or law suit relating to contractual performance or obligations to employees. The answer provided to all these questions was no, except that in reply to the first question—whether anyone had been associated with a company that had gone into liquidation—it was disclosed that one director, Mr. Somji, had been a director of Primedeck Enterprises, a subsidiary of Shallan, that had gone into liquidation in July 1998.

Accommodata was also required to submit full audited accounts and its bid was assessed with reference to profit, liquidity, the net worth of shareholders, audit opinion and risk rating. As a result of this analysis, it was judged to be a financially sound company. The evaluation methodology provided that, where a tenderer appeared to have breached company law or to have engaged in any other irregularity—for example, failing to submit accounts to Companies House—that would be ground for rejection of the tender unless there were exceptional mitigating circumstances. None of this applies to Accommodata. Contact was also made with other parts of the Home Office to check for any other adverse experience of the company.

I am not here to argue the case for Accommodata; I am simply setting out the standard process of checking that is used throughout Government procurement. That process was applied to the company and I have outlined the results that it revealed. I am grateful to my hon. Friend the Member for Ealing, North (Mr. Pound) for his intervention outlining some of the views of voluntary organisations about the company. My hon. Friend the Member for Sittingbourne and Sheppey claimed that a case against Accommodata is pending in Leicester, but we know of no case pending against the company in Leicester, in any other local authority or by anyone else.

I apologise for interrupting my hon. Friend the Minister. However, I have a document that shows that, as she will be aware, Accommodata has operated the Leicester International hotel. The east midlands consortium for asylum seeker support offers an equally unequivocal endorsement of the company's operation of the hotel and of the service that it provides in that area. I will happily give her a copy of this document.

I am doubly indebted to my hon. Friend. I thank him for that information and I would be very pleased to see a copy of the document.

I do not know whether this information is relevant but other companies have similar or identical names to Accommodata. There is an Accomodata, an hotel booking website, registered in Tadworth in Surrey, and a New Zealand-based hotel booking shares a similar name. A direct mail provider is based in Indianapolis and an American company provides services to ophthalmologists and similar professionals. Our contractor, Accommodata Ltd. has assured us that it has no links with any of the above companies, but I do not know whether some of the critics of this UK-based company are acting under the mistaken belief that all the companies are one and the same. I understand that Swale council's planning enforcement notice may have been sent to the Tadworth company by mistake.

I wish to make a few general points about our attempts to improve radically the asylum system. We are trying to bring into place facilities that will help us to do that in the way that I outlined earlier. In particular, we seek to keep in contact with asylum seekers. My hon. Friend the Member for Ealing, North will know that many local authorities, including his own, are already responding by receiving significant numbers of asylum seekers through the dispersal system. I am grateful to them for that. It is right that we try to evaluate mechanisms for receiving and processing asylum claims.

I am grateful, too, to my hon. Friend the Member for Sittingbourne and Sheppey for his remarks about the willingness of the residents and the council in Sittingbourne to grapple with that problem. It seems that they simply do not like the proposal that the only substantial hotel in the town should be used for this purpose because residents could not use it as they do now. That point was made at the meeting that I had with local residents and councillors, as was a promise that details would be provided of more suitable accommodation in the area which we could consider. Freda Chaloner, the head of NASS, raised the same point at a public meeting.

In fact, I have to tell my hon. Friend, with some disappointment, that neither the council nor anybody else has come forward with an alternative in the area which might be used to accommodate asylum seekers. It is important that we find accommodation in the southeast, because this is where many people enter the country. It is vital that, metaphorically speaking, we take hold of them at that very early point, and that is why we need induction centres in London and the south-east.

I want to involve local authorities much more in the process of managing asylum seekers, and many authorities tell me that they want to be more involved. However, when we put the question to them, we find in practice that concrete offers of help and support do not appear. We gave other regional consortiums and the local authorities involved in them the chance to be involved in the provision of regionally-based induction centres because local authorities were telling us that that is what they wanted. To date, the offers that we have received amount to 685 bed spaces, when we need a total throughout the country of about 3,500.

Unless local authorities are willing not only to say that they want to be involved and to co-operate but to translate that commitment into practice, NASS and the Government have no alternative but to seek accommodation from private sector providers such as Acommodata. I am speaking to local authorities in general when I say, "We are in your hands." I want to work with local authorities, and there are many reasons connected with their responsibility for local communities why we ought to have been working with them more.

The offer is there, but if it is not taken up by Swale borough council and others, we must provide this accommodation through the private sector, and we will. If Swale council has some alternatives, I would be grateful if it suggested them. Today I asked my official who is responsible for the induction centre programme to make renewed contact with Swale council, which has not, I am told, so far responded to her requests of recent weeks for meetings about this matter. If we are not to use the Coniston hotel, the council should allow us to consider any alternatives in the area.

Question put and agreed to.

Adjourned accordingly at twenty-three minutes past Eight o'clock.