HC Deb 14 July 1971 vol 821 cc510-6

4.15 p.m.

The Secretary of State for the Environment (Mr. Peter Walker)

With permission, Mr. Speaker. I wish to make a statement on infrastructure works.

The Government have decided to authorise increased capital expenditure on infrastructure works in the development and intermediate areas. This will give still further practical support for the improvement of the economic and social infrastructure of these areas and will help alleviate unemployment, particularly in the construction industry.

The so-called winter works programme of the previous Administration did not give local authorities and others involved the time and scope needed to plan and execute works of lasting benefit. The work under these programmes had to be completed in the winter months—in the least favourable weather conditions for the construction industry as a whole.

The provision we are making now will, therefore, allow the inclusion of more substantial schemes than was possible in the winter works programmes. The infrastructure works now to be undertaken will be those which can be substantially completed during this and the next financial year—that is, by the end of March, 1973.

The Departments concerned will now discuss the implementation of the increase in expenditure with the local authorities and others concerned as a matter of urgency. We estimate that in England, Scotland and Wales the spending authorities should be able to incur total extra expenditure of about £100 million during 1971–72 and 1972–73.

My right hon. Friend the Secretary of State for Scotland announced yesterday the main arrangement for Scotland and my right hon. and learned Friend the Secretary of State for Wales is making a similar announcement.

This £100 million will cover a wide range of projects, such as trunk and principal roads, improvement and extension of educational buildings, minor capital works for hospitals and other health and personal social services. There will be provision also for infrastructure works selected by local authorities within the field of locally-determined capital expenditure. It certainly should be possible for a good deal of work to be done during the remainder of this financial year, with a larger amount to follow in 1972–73.

This expenditure is wholly additional to the estimated £46 million that will be incurred over the next two years under the measures already announced for higher grants for the improvement of older houses in development and intermediate areas.

These additional sums, totalling an estimated £146 million, should be seen within the framework of the Government's determination to help in bringing about a large improvement of the economic and social infrastructure of the development and intermediate areas. But they will also make their contribution to employment in these areas in the period immediately ahead.

Mr. Crosland

The House will welcome any measures to strengthen the infrastructure of the regions, and, in particular, the House will welcome the belated admission by the Government that there is a serious regional problem with which to deal.

Will the right hon. Gentleman say how many jobs he estimates will be created by this new programme? He will be aware that unemployment nationally now stands at about 724,000. By how much might this figure be reduced as a result of his announcement?

Will he accept that any measures designed to improve the infrastructure, extremely welcome though they are, are no substitute for direct measures to attract new industry, such as the investment grants, which the Government are now so hastily and fatally withdrawing?

Will he convey to his right hon. Friend the Chancellor of the Exchequer that the state of the economy, particularly in the regions, with rising unemployment, falling investment and stagnant production, is too serious to be dealt with simply by palliatives of this kind and that what is now called for is a major policy of general reflation and expansion?

Mr. Walker

The right hon. Gentleman will appreciate that a series of announcements has already been made affecting the regions—in connection, for example, with the road programme and extra expenditure on clearing derelict land and on sewerage—in addition to this announcement.

I cannot give a figure for the number of jobs that will result, because until one has consulted the local authorities on the nature of the work involved, it would be wrong to put a figure on this. But obviously the injection of £146 million of extra work will mean a substantial uptake of people in the construction industry.

As for the relationship of this to the general unemployment situation, I would have thought that in addition to these proposals the regions will benefit considerably from the substantial tax reductions which have come into operation this month and the considerable injection into the economy that will result from that.

Far from being a palliative, this is a very considerable injection. It is far greater than has ever been made previously in a similar approach to this problem, and is certainly far greater than anything done by the Labour Government—[Interruption.]—in a period of rising unemployment.

Dame Irene Ward

Will my right hon. Friend accept the appreciation of all parties in my part of the world? We shall take full advantage of what is offered to us, though we shall come for more and more until we get the position properly established. Is he aware how right he is to improve the infrastructure because this is very important to our area? The more improvement we can get the more likelihood there is of our attracting new industries. Whatever the right hon. Gentleman the Member for Grimsby (Mr. Crosland) may say in his carping way, we are very grateful to my right hon. Friend.

Mr. Walker

I am very grateful to my hon. Friend for her remarks. I believe that if we can progress with the road programme as announced and with the increases which are taking place in derelict land clearance, there is no reason why during the decade there should not be a fundamental change in the infrastructure of these regions.

Mr. Fernyhough

Can the right hon. Gentleman give a regional breakdown of the additional Government expenditure? He said at the General Election that the Government would reduce this expenditure, but now they are increasing it. Can we have a breakdown, so that we may determine how effective or ineffective the programme is likely to be in relation to the growing unemployment problem in the regions concerned?

Mr. Walker

I am in some difficulty here because until one has selected the actual schemes one cannot know in exact terms. But as general guidance we expect the figure to be in the region of £102 million, which will be divided as to £55 million for England, £33 million for Scotland and £14 million for Wales. Looking at the nature of the development areas at the present time, of the £55 million for England something in the order of half will probably go to the Northern Region.

Mr. Redmond

Will my right hon. Friend accept that I support what my hon. Friend the Member for Tynemouth (Dame Irene Ward) has just said? May I make a plea for the regions that need great help with their infrastructure but which are not development or intermediate areas and seem to be getting no help at all? I refer particularly to the county borough of Bolton.

Mr. Walker

Such areas are going ahead apace with improvement grant schemes and I know that Bolton has taken a substantial part in such efforts. There are various other ways of increasing help for infrastructure, such as sewerage and sewage disposal schemes, and the like. But it is right that we should discriminate between those areas which have suffered from long and difficult unemployment problems and others which have been more fortunate.

Mr. Orme

I agree that the position in all areas is bad at the moment. The greater Manchester area, with a population of about 2 million people, now has an unemployment level of nearly 5 per cent. When is that area to get intermediate status? Will any of the schemes announced cover it in any way?

Mr. Walker

These are schemes for development areas and intermediate areas. Future designation of areas is a matter for my right hon. Friend the Secretary of State for Trade and Industry. The more one extends such areas the less priority one can give to the areas concerned, and I think that the policy pursued by both Governments of concentrating fundamental help on areas which have suffered for a very long time is correct.

Mr. Skinner

Can the Minister guarantee that the £100 million will be provided in total by the Government? In any case, how much will it cost the ratepayers as a whole to go ahead with these schemes?

Mr. Walker

On the improvement grant side, we have increased the proportion provided by the Government to 75 per cent. With regard to the £100 million, it depends on the nature of the works. Trunk road schemes and schemes connected with hospitals will attract 100 per cent. Government grant, but in other cases the percentage will vary.

Mr. Nott

Is my right hon. Friend aware that his statement will be greatly welcomed in Cornwall, which is a development area? He said that of the £55 million for England about half would go to the Northern Region : may I assume that a very high proportion of the remainder will go to Cornwall? While we welcome the priority given to hospitals and schools, can the nature of the work be regarded fairly flexibly, because all sorts of schemes which could be of enormous benefit to unemployment in Cornwall are on the margin of infrastructure?

Mr. Walker

I am aware of the unemployment situation in Cornwall, and I hope that the local authorities will quickly prepare the schemes they would like to submit to us.

Mr. Bagier

While welcoming the Minister's announcement, can I take it from the figures he has given that about £25 million is to be spent in the Northern Region in the next two years? If that is correct, does that figure take into consideration existing schemes which have been lumped together, and therefore is to that extent not additional? Will the right hon. Gentleman take into consideration the very relevant fact that it is jobs that are required, and that he must not write off the question of winter works? That being so, will he not very urgently consider labour intensive schemes because this is the time to start if they are to take effect?

Mr. Walker

One should get the figures in perspective. In the last three years of the previous Government the total for winter works in all regions was £51 million. We are now talking of injecting £146 million in two years. It is a dramatic difference. As to the hon. Gentleman's first point, this expenditure is completely additional to any existing schemes.

Mr. Evelyn King

My right hon. Friend referred to discriminating in favour of areas of high unemployment and that, of course, I accept. Is he aware that in South Dorset there is an area where the rate of unemployment is as high as it is in the areas mentioned, and where the wage rate is lower? Can my right hon. Friend tell us of any way in which those areas will benefit by what he has announced and, if not, why not?

Mr. Walker

I am aware of these problems, but I believe that the basic infrastructure in some of the regions presents far more of a problem than is the case in South Dorset, and I think it right to concentrate more help on them.

Mr. Gwynoro Jones

Is the right Hon. Gentleman aware that £14 million for Wales will cover hardly half of the total loss in investment grants? Will he give an assurance that the £14 million spread over two years will balance out the 30 per cent. increase in unemployment in Wales since last June?

Mr. Walker

I must point out that the hon. Gentleman is not comparing like with like. If he wants comparisons of taxation effect, he should look at the reductions in S.E.T., in income tax, and all the rest.

Mr. Waddington

Is my right hon. Friend aware that his statement will be very welcome in North-East Lancashire, but am I entitled to hope that as a result of his announcement some quite major roadworks will be included in the programme, and that even more important programmes, such as phase 3 of toe Calder Valley Highway, will be accelerated?

Mr. Walker

We have already speeded up the phasing of parts of the Calder Valley programme, and we shall have urgent discussions with the authorities concerned as to the best projects which may be started as soon as possible to help the construction industry and the regions concerned.

Several Hon. Members rose——

Mr. Speaker

Order.

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