HC Deb 21 December 1973 vol 866 cc1852-66

3.18 p.m.

Mr. Michael Meacher (Oldham, West)

In drawing attention to the Oldham Study and the new Strategic Plan for the North-West I wish to make clear that I do not propose to engage merely in an exercise of special pleading. I recognise that other regions besides the North-West, and other towns within the North-West besides Oldham, have as much right, and sometimes more right, to extra resources. What I am asserting is that the present system for allocating expenditure aids to the region is patently unsatisfactory, and that within a restricted system for giving aid, whatever form it might take, much more attention should be paid to the rather specialised problems of the North-West arising from its once crucial rôle as the cradle of the Industrial Revolution.

Both the reports which were commissioned by the Government, whilst they recommend certain procedural and organisational improvements, which I know have been noted locally, also make certain radical proposals for changing the balance and the pattern of expenditure on a major scale in order to achieve a regional revival. It is to probe the Government's attitude and intentions towards these proposals that I have sought this debate.

The basic justification for seeking a revamp of regional policy is that, after having been operated for a decade or more, it has achieved relatively little in mitigating the huge and indefensible inequalities between the regions that cost such a slur on the face of our society. There are several reasons. One is that attention has been focused almost exclusively on one criterion, albeit an important criterion—unemployment. Another is that the size of the expenditure devoted to regional aid has never been pitched at a level at which it might seriously be expected to redress this degree of imbalance. It has always been a matter merely of patching up the blackest defects.

The third reason is that Governments—one has to say both Governments—have clung tenaciously to the fallacy that merely topping up the main system of what is a virtually non-redistributive local authority rate support was sufficient to redress gross inequalities, and patently it is not.

What is refreshing about the strategic plan for the North-West is that all of this offers a breakthrough to new and better techniques, and I hope that the Government will respond imaginatively and constructively. The strategic plan argues that the criteria for overall regional allocation of resources should be not only employment opportunities but the need to improve the quality of life, particularly housing, the eradication of pollution, and the quality of the health, medical and social services, education and recreational and cultural facilities.

I am convinced this is the right approach. But if it is accepted, as I hope it will be, it has enormous implications, because the North-West turns out to be the worst off of all the regions in terms of air pollution, derelict land, the general mortality rate and the infant mortality rate. It is also revealed to have the poorest availability of doctors, the worst pupil-teacher ratio, the least open country recreation and the greatest river pollution. The North-West is also near the bottom of the league in terms of black areas not subject to smoke control orders. It has the smallest number of pupils remaining at school beyond the age of 16 and the smallest number of pupils in full-time further education. It is the lowest in urban open space provision and it lacks various recreational features.

That is a remarkable list of needs. The entire set of indices together demonstrate that there is no other region in Britain, with the possible exception in some respects of the Northern Region, that overall is in such bad shape. The point of the debate is that nowhere is that reflected in the degree of aid.

For that reason it is all the more important, with that degree of environmental, social, medical and recreational problems, that the North-West is nevertheless shown for the first time by the report to be comprehensively a long way from receiving due recognition of these factors in public expenditure terms. In 1964 it had the lowest per capita receipt of capital expenditure in the country and the third lowest per capita receipt of current expenditure. By 1970, admittedly, that had risen and in terms of per capita public investment in new construction it had risen to the average position, according to an Answer I received from the Department of the Environment on 26th January last year. But that is still a far cry from relating public expenditure closely to need. That is what the objective should be.

The strategic plan states: It has to be recognised that some of the resources which might be directed to remedying the ills of the North-West are being transferred to other regions where the indications are that the quality of life is already better. Despite the velvet glove language, it would be difficult to find a more direct and straightforward indictment of regional policy than that.

The main reason why the North-West has so signally failed to obtain help in proportion to need is that the rate support grant suffers from a number of defects as a means of distributing subsidies to local authorities. It is only mildly redistributive and tends to trap local authorities in their own poverty. The latter is because any potential extra rate revenue which might accrue from new industrial development is offset, pound for pound, by reductions in the rate support grant; and it is only when an authority is above the national average in terms of the resources element that it begins to obtain a net financial gain from attracting additional rate revenue to its area.

Because it is the poorest authorities, many of which are in the North-West, which often have the severest problems, to use the average as the cut-off point for the resources payment merely ensures that there will never be more than partial progress towards establishing common standards of provision and services throughout the country. I hope that the Minister agrees that this is an unfair and discriminatory system which is bound to penalise local authorities which, like many in the North-West, are burdened by an accumulation of serious and expensive problems.

I ask the Minister, first, to what extent he accepts the proposals in the strategic plan for achieving greater equity. In particular, does he agree that we should be aiming at formulae which would equalise rate payments per house for each authority and for equalising the non-domestic rate poundage given standard expenditure? What is his response to the Oldham study recommendations set out on page 50 of the report: The Department of the Environment should consider making adjustments to the rate support grant formula to take greater account of urban obsolescence and the need to compensate for a low level of private investment. The report goes on to suggest that the needs element in the rate support grant might also include the percentage of unfit houses and the lack of sanitary facilities and that the resources element might take into account low incomes and low rates of commercial floor space construction per head of the population.

Does the Minister agree with those formulae, or does he prefer alternative formulations directed towards the same end; or what guarantee can he give that in future expenditure will be proportional to needs as they are more comprehensively defined in the report? That is the key question. The essential point is that it is not enough merely to top up a virtually non-redistributive local authority grant with specific projects, as Governments of both parties have done, such as community development projects, educational priority areas and the urban aid programme. Welcome though these are in our area—and I should be the first to admit that the Oldham area has gained from them—they are on a relatively miniscule financial scale and are not even aimed at securing the across-the-board uplift in the regional quality of life which must be the objective.

The third and most essential part of the strategic plan concerns the estimate of expenditure which might be required over the next decade to transform the environment in all its manifold aspects. On the question of environmental pollution, in respect of which the North-West is assessed as being worse off than any other region, the plan estimates that to secure significant improvement in this decade will cost £300 million to £450 million, over three-quarters of which should go towards improving the quality of the region's rivers.

On current trends—and this is taken from the report which pre-dates the last public expenditure cuts—likely expenditure will be only £185 million. That is scarcely more than half of what is needed. Perhaps the most important single question that emerges from this debate is what proposals the Government have towards doubling the present target expenditure in the North-West in the light of this report which they commissioned.

The importance of this question lies in the dramatic effect which it has on the time-span of improvement that the North-West can look forward to. In respect of reclaiming derelict land, for example, it is a particularly vital factor. As the North-West plan says: If reclamation were maintained at a rate of 800 acres a year as it stands at the moment— existing dereliction would not be cleared until 1994. Surely, that is not acceptable, quite apart from the fact that it takes no account of accumulated obsolescence in the meantime.

With regard to urban environment and all its interconnected social aspects—and one of the most distressing and difficult things is the way they interconnect—the strategic plan makes several important recommendations, and I urge the Minister to make clear the Government's reaction on each of these main points which I will detail.

First, there has been quite a sharp rise, which is very creditable, in the level of uptake of improvement grants. At this level it is estimated that it should be possible to secure within a decade—that is, the time-span of the report—the upgrading of all the 432,000 improvable private houses that were located by the Circular 50/72 survey. But, if such a rate of improvement is accepted as the long-term objective of regional policy, it will require, as the plan rightly puts it, the extension beyond June 1974 of the present temporary 75 per cent improvement grant. Although I am well aware that the Government have already turned this down, will they not now reconsider their decision rather than sacrifice a desirable objective that is probably considered now to be within our grasp?

Secondly, the strategic plan recommends, as a means of breaking the self-perpetuating cycle of educational deprivation, that the educational priority areas should be extended not only within the inner city areas but also to new housing on the peripheral estates where there are social problems. I am sure that is right, but do the Government accept that view?

Thirdly, the plan notes that the Northwest is badly provided for in terms of urban open space and recommends minimum aims for both urban parks and playing fields of three acres per 1,000 population. Oldham and Tameside, the new metropolitan districts, both have considerably less than half this at present. What is needed here are specific grants, with, I hope, flexibility for local authorities to deploy Exchequer aid within these areas as they see fit. Will the Government extend the countryside grants on the scale that is necessary to renew the environment in the way that is proposed in the report?

Fourthly, the plan suggests that in the past decade the availability of cheap industrial buildings, especially where they are no longer required by the textile industry, has slightly helped new enterprises to get a foothold in the region, especially in those areas that were formerly used by the textile industry. But the plan also takes the view that this advantage is generally outweighed by the environmental disfigurement which these buildings present and recommends that they should be progressively cleared.

I therefore ask the Minister whether the Government will sanction the use of compulsory powers in respect of old and derelict buildings, even in those cases where there is no intention to engage in housing redevelopment. This change, although a relatively small one, could greatly improve the face of the Northwest.

Fifthly, in terms of employment opportunities the plan recommends that a labour subsidy, possibly an improved form of regional employment premium, is required to maintain a better balance between capital and labour incentives. This matter has been debated many times in the House, but in view of the clear evidence that capital investment is so often job contracting rather than job expanding, I hope that the Government might still be prevailed upon to think again on this issue.

Sixthly, the plan points out that while the North-West has a fair share of office employment, it is still weak with regard to higher-grade work, especially the headquarter or regional office component of manufacturing and service industries. It suggests that there are important multiplier effects to be reaped from the introduction of "higher order" type of office employment into areas with economic difficulties. What proposals have the Government to secure a better spread of this type of employment with such valuable side effects?

Lastly, the plan draws attention to the importance of the regional rail link. I quote from page 217 of the report: Achievement of the recommended land-use pattern is particularly dependent on improved access across the conurbations, especially in Greater Manchester. Here we think it most important that uninterrupted cross-conurbation connections should be provided on the north-south axis so that the present imbalance in economic and social fields should be minimised…. Hence we support the Piccadilly-Victoria network in general and the Piccadilly-Victoria link in particular. It is particularly relevant that the Minister for Transport Industries in a Written Answer yesterday stated on the Piccadilly-Victoria project: I told the Chairman of the Selnec PTA last August that the project could in no circumstances start before 1975–76", although it must be said that the Government have now relented on the principle of the project by making it subject to the new transport grant under the proposed local government legislation. There must, especially in present circumstances, be an overall ceiling on expenditure, but I still hope that, in view of the high strategic importance attached to this conurbation underground rail link, the Government might still deem it a waste of time to change these priorities in the meantime.

I believe that the strategic plan is a document of explosive significance. It is the first time that an official Government report has undertaken systematic interregional comparisons on a comprehensive set of indices. It lays a foundation, in a far more detailed manner than ever before, for a more rational channelling of resources into areas of greatest deprivation.

On the balanced assembly of all this evidence, the North-West is revealed for the first time as the worst-off region in the country, yet it is subject to a net loss of resources under current grant-aid policies. The plan in paragraph 292 comments on the need for … a massive injection of additional resources and consequently recommendations on revision of rate support grant, for reorganisation of specific grants, and for an additional regional fund for work outside other programmes ". I hope the Government will respond to this report in an equally constructive and positive spirit since it is a report commissioned by the Government.

3.40 p.m.

The Minister for Local Government and Development (Mr. Graham Page)

Perhaps I may respond first to the last remark made by the hon. Member for Oldham, West (Mr. Meacher). I appreciate that the Government commissioned the report. We would not have done so had we not realised the problems of the North-West.

However, it is misleading of the hon. Gentleman to say that the North-West Region is the worst off in the country. He chose certain items which were tested in the strategy and said that in these respects the North-West was bottom of the league table or, at any rate, near the bottom. I shall come back to that again. I say only that to take a number of matters in which one region is worse off than others, even though there may be a considerable number especially, as in this case, does not service to the region when they are grouped together and given publicity in the Press to show that the North-West Region is the worst off in the country. I shall come back in a moment to why I deny the value of that sort of analysis, and I shall try to give some figures about it.

I compliment the hon. Member for Oldham, West on bringing to the attention of the House the two documents, the Oldham Study and the Strategic Plan for the North-West. However, I must disappoint him with regard to the second and the series of questions which he put to me on it.

A few prints of the Strategic Plan for the North-West were commissioned so that those whose comments we especially desired should have copies. I fear that the document itself, which is a massive one, needs very careful study. At this stage however, it is a discussion document, and it was only a few days ago that I directed that a copy of it be provided to right hon. and hon. Members with constituencies in the North-West, the report being their particular concern.

On a discussion document which still has to be considered by all the local authorities concerned and others and from whom the Government will look for comments which they will then consider in great detail and very carefully, I am unable at this stage to give Government decisions. It would be wrong for me to do so before hearing the comments of those who are interested in it, taking all those into account and giving them careful study.

This has been the practice in the preparation of regional strategies throughout the country. The previous Government set in hand the Regional Study for the South-East. They did it by getting together the Economic Planning Council for the South-East and the Standing Conference of Local Planning Authorities in the South-East. My right hon. Friend who is now Secretary of State for Trade and Industry, who was then Secretary of State for the Environment, approved that Regional Study for the South-East after fully considering it, and after discussing it with all the authorities concerned.

Because of the success of that document we decided that each region should proceed with a regional strategy. The West Midlands was already dealing with a strategy for that area by means of the local planning authorities. But what I was eager to do was to get the regional economic planning council together with the standing conference of local planning authorities for a region to sponsor an expert team. That was what was done in the North-West Region.

I recollect well the meeting when this study was commissioned. It was a meeting held at Wigan between the Standing Conference of Local Planning Authorities and the North-West Economic Planning Council, and the Secretary of State took the chair. We set this in motion and it has been successful in producing a document for study, for discussion, for consultation and finally for decision as a framework for future planning in the area.

If we could have proceeded neatly and in order, it was my hope that we could have regional stategies for each region, that we could then proceed to have structure plans drawn by the counties and that we could then proceed to local plans drawn by the districts. But things cannot be done in that nice, neat order, otherwise we should take generations to complete them. Many studies have to go on concurrently. When we decide upon the regional strategy as a result of this report, the structure plans will have a framework in which to fit.

I say again that this is at the moment a consultation document, and I do not propose to give any Government decisions upon it.

I return for a few months to the Oldham Study, to compare the two documents. The Oldham Study was one of three studies—Sunderland and Rother-ham were the other two—set up in an effort to obtain guidelines on which to redevelop, to revitalise, our cities, which are often dependent on obsolescent industries. Where the industries on which a town has relied are changing and becoming obsolescent, new industries need to be attracted there. We wanted to see the right way to manage those towns and to attract the right kind of industry and to work out the change in the pattern—industrial, commercial and social—within the town.

We set up the study of these three towns so that this should be, not merely an academic study, but a study on the ground in real towns of real problems. The three reports are of very great value. I hope that we shall be consolidating our thoughts on these by means of a seminar of all those interested one weekend in the near future, to see how we can progress on the matters we can learn from the studies.

The hon. Gentleman mentioned one or two points which were brought out by the Oldham Study. Each of these studies has brought out different aspects of the same problem. The problem is how to get a total approach to all the problems of a town—not merely physical planning, but the social, educational and employment aspects. We want to get a total approach to planning and management by local government in respect of those problems.

The Oldham Study and the North-West Regional Strategy call attention to the financial side of matters—the grants made by the central Government. The hon. Gentleman put some questions to me about the distribution of the rate support grant. I assure him that he was urging a willing horse, or knocking on an open door. In the formula for distribution of the rate support grant for 1974–75 we have already taken into account many of the matters which appear in these studies. The hon. Gentleman will find, if he refers to the present formula for distribution, which has been published in one way or the other in discussions with local authorities, that our great problem in working out the formula for 1974–75 has been that it has given such a lot to what might be called the deprived cities—the cities which need redevelopment so much—that it has put the whole distribution out of balance for the counties and we have had to feed in other formulae to get the spread a little more even.

The whole object of the new formula was to make exactly the sort of provision for which the hon. Gentleman was asking and which the Oldham Study and the North-West Regional Strategy called for. They both asked that we should give consideration to the towns which suffer most because of the derelict state of the town centres, due generally to a change in the industries there.

Oldham is the best example because, with changes in the textile industry, it has been left with many unused mills which clearly cannot be used for any other type of industry. As the hon. Gentleman said, the only thing to do is to get rid of them and redevelop. Considerable assistance has been provided by the central Government for coping with that sort of development by means of capital grants, and the new distribution of the rate support grant will be of great advantage.

The distribution of the rate support grant is not the only way in which these cities can be helped, and it was wrong of the hon. Gentleman to give the impression that very little help has been given to the North-West. The area has had considerable help from the Government in the last few years. The figures which the hon. Gentleman chose to give from the North-West Regional Strategy were based in some cases on a 1966 census and in other cases on 1971.

Since then, there have been significant developments. Because the North-West got off the mark quickly with Operation Eyesore, it derived greater benefit from it than any other region in the country. I am speaking from memory, but I think I am right in saying that the North-West had more than one-quarter of the total finance laid out on Operation Eyesore.

The North-West has benefited enormously from the 75 per cent. improvement grant over the last few years and will continue to benefit in future, even though that 75 per cent. in general over the country will return to 50 per cent. because we are now to concentrate on properties and dwellings where improvements are so necessary—in the twilight parts of the greater cities. By concentrating on that rather than giving 75 per cent. improvement grants right across development areas, we shall serve the public much better.

I think I am again right in saying that more general improvement areas have been set up in the North-West than in any other region. It has benefited accordingly. In March 1972 intermediate area status was granted to parts of the North-West, and that was later extended throughout the area. The whole region became eligible for development grants for building, and it took advantage of them. Selective financial assistance under the Industry Act was also made available for modernisation schemes where previously loans and grants had been limited to schemes providing additional employment. Again the North-West was an area which particularly needed that kind of assistance, and it has taken advantage of the offers.

While recognising the need to modernise the industrial structure of the North-West, we have devolved a considerable amount of authority to the regions so that decisions can be made there quickly for those who want the help which they can get from selective assistance. The process of modernising industrial buildings is necessarily long, and there is still much to be done in the North-West. Nevertheless, our policies of national growth and regional aids have created the confidence necessary to industry to invest.

If we look at the fall in unemployment in the region, we see that there was a drop from 147,000—5.2 per cent.—in April 1972 to 82,000—2.9 per cent.—in November 1973. That was a fall of about 44 per cent. in unemployment.

Mr. Meacher

I acknowledge that aid has been given in this patchwork form to which the Minister has referred. But is he not missing the whole point of the strategy plan, which is to draw attention to certain target levels of achievement on an across-the-board basis which should be achieved within 10 years; and the level of expenditure should be geared to achieve the common standards of provision and services which prevail in other parts of the country?

Mr. Page

That is exactly the reason for regional strategies, to take an overall picture and to set targets for the future. In answering the hon. Gentleman, I was showing the aid which has been given up to the present. He cannot say that we have not in the past recognised the needs of the North-West Region. We have recognised those needs with some success, indicated by the figures which I gave on reduction of unemployment between 1972 and the present. The success is shown also by the fact that notified vacancies have risen almost two and a half times, from 16,400 in November 1972 to 40,800 in November 1973. Taking Oldham alone, unemployment has been almost halved over the past year from 3.1 per cent. in November 1972 to 1.6 per cent. in November 1973, which is well below the national average.

This is not piecemeal assistance. It may be assistance in a number of forms, but surely flexibility is needed in the forms of assistance to be given to an area. The same encouraging picture emerges from figures for selective financial assistance. Under the Industry Act up to the end of October last the offers of assistance totalling £7.5 million had been made in respect of 106 applications which were expected to result in creating or safeguarding over 8,000 jobs in the Northwest.

There is a similar story on industrial development certificates. In the year ended November 1973, 266 IDCs were granted for an area of 13½ million sq. ft., with estimated additional employment of nearly 18,000. That was about 3½ million sq. ft. more than in 1972. Also in the past year there have been 815 inquiries about industrial locations in the region, an increase of over 400 on the previous year. This shows an increasing interest in the region among industrialists. There has been help to service industries, provided that their move there would create at least 10 new jobs in the area. This has been a great help both in the south of the region, on Merseyside and in Manchester, as well as in the north. By these various means, which the hon. Gentleman calls piecemeal and which I say are flexible means of assisting an area, we have given real assistance to the North-West. To select for test those items which do not relate to all the factors affecting the quality of life, and merely to restrict oneself to narrow subjects, totting them up in order to say that the North-West is top or bottom of the league, or to say that the North-West is the worst served region, is not to make a true analysis of the position.

I take, for example, the suggestion that the North-West is worst in dereliction. The amount spent in the North-West on clearing up derelict land is greater than that spent in any other region. It starts off with a larger problem, and so the expenditure on it should be greater.

It being Four o'clock, the motion for the Adjournment of the House lapsed, without Question put.

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

Mr. Page

I have almost run over my time because there are so many points on which I would wish to answer the hon. Gentleman. Indeed, he has put forward and categorised the points on which he wants answers. Essentially, however, he has asked me to answer the question whether I accept a document which has just been published as a discussion document upon which the Government will make up their minds in due course, when they have consulted and discussed the contents of it with the appropriate authorities, and studied those contents carefully, over the next few months. It is a little disappointing when my Department has had the courtesy to provide hon. Members from North-West constituencies with copies of this document then to find it said in the Press that Labour Members have discovered a secret weapon in an unpublished document. That remark appeared in The Guardian today. It is not a secret weapon. It is an unpublished document. It was provided for hon. Members—they did not discover it—so that they might assist in the discussions and consultations on the document.

I am grateful to have had the opportunity of answering those points. I shall certainly take into account all the points that the hon. Gentleman has raised. It may well be that we shall have an opportunity to discuss them further when the hon. Gentleman brings to me a deputation from Oldham during the next few days.