NEW TOWNS BILL

HC Deb 22 May 1975 vol 892 cc1769-90

Considered in Committee; reported, without amendment.

Motion made, and Question proposed, That the Bill be now read the Third time.

10.16 p.m.

Mr. Arthur Jones (Daventry)

The debate follows the most interesting and wide-ranging review of new town policies which was discussed in the House on Monday 12th May when, in addition to the terms of the Bill, we considered the Government's consultation document on new towns in England and Wales.

I welcome to our proceedings the Under-Secretary of State for the Environment. He brings a wide knowledge and great experience of local government affairs and he is renowned on both sides of the House for his reasonableness and the consideration which he gives to representations.

Our debate tonight may be on a more restricted basis than was our debate on Second Reading. The Bill raises the the limit of advances to development corporations and the Commission for the New Towns to meet capital expenditure, and covers, quite properly, the payment of pensions, allowances and gratuities to some of those serving on these important organisations.

I was chided somewhat on Second Reading by the Minister of State, Scottish Office, who said: But it was a pity, to say the least, that the hon. Member for Daventry was so obsessed with the financial provisions that he said very little about new towns policy. I do not take those remarks too much to heart. They were a statement of fact which I acknowledge. The Bill is completely concerned with financial provisions. In reply to my query about how long the additional allowance of £250 million from public funds was likely to last the Minister of State was kind enough to indicate that on present expectations a further sum would be required in 1975–76. He went on to say but perhaps we can deal with such matters in Committee I am sure we could deal with such matters in Committee. It would not be unfair to say that the Minister of State has passed the buck to the Under-Secretary who has the job tonight of replying to the debate.

I hope I can prevail upon the Under-Secretary to deal with some of my points in detail. First, would it be true to say that the first £250 million is already committed by the development corporations and the New Towns Commission? In other words, will it last only for the current financial year, and is it, therefore, right to assume that that amount must already have been committed? Secondly, is the Under-Secretary now able to answer the question that I put on Second Reading, when I asked the Minister: is the right hon. Gentleman able to tell the House whether or not resources will continue to be made available for new towns?"—[Official Report, 12th May 1975; Vol. 892, cc. 54 and 103.] No assurance was forthcoming at that time on this question, which is of considerable concern particularly to new towns which are in their early stages and have these very heavy capital commitments.

There is widespread uncertainty with regard to public expenditure, and rightly so. It is in evidence in new towns as elsewhere, and if confidence is to be maintained and planning work to proceed apace it must be against a background of a firm commitment. Can an assurance in that respect be given this evening? New town programmes in their early stages are unremunerative and demand a high level of investment, with all borrowing for a term of 60 years, via the Public Works Loans Board, at current interest rates, which I believe I am correct in saying lie somewhere between 14 and 15 per cent. When we discussed it on Monday of last week the rate was 14⅜ per cent., and this is a very heavy burden for new towns to bear over the full length of the period of the loan.

My third question is: are the Government prepared to let development corporations borrow or raise capital from other sources which are available on more favourable terms? Further, would they consider recommending leasehold sales of industrial and commercial properties, thereby making available resources from the private sector, from pension funds and institutional investors? Even in present-day circumstances capital raised in this way would cost significantly less than it does through the PWLB, and one could sell long leaseholds on a 10 per cent. basis, which would mean that capital forthcoming from the private sector would be at an interest rate as low as 10 per cent. I believe such a proposal is not contrary to Government policy as set out in paragraph 4(14) of their consultative document.

I turn finally to the other question of significance in the Bill, the provision for the payment of pensions, allowances and gratuities to chairmen of development corporations, and the payment of remuneration and allowances to members of a local committee appointed by the New Towns Commission. I am indebted to the Library for the following information with regard to the remuneration paid to people who come within this category. I am informed that the chairman of the Commission for the New Towns receives £5,190 per annum plus £7.66 per month under a threshold agreement, that the chairman of the development corporation receives £4,340 per annum plus a similar amount by way of a threshold agreement, and that neither of these office holders has any pension arrangements at the present time.

Members of local committees are unpaid except for the chairman, who receives £1,000 per annum plus a further £1,000 if he sits on the commission. I am told that ordinary members of development corporations are paid £700 per annum. Can the hon. Gentleman give any details of the pensions, allowances and gratuities proposed for the chairmen and members of these various corporations and committees on whom we rely for the past performance and future fulfilment of objectives in the new towns? Prospective expenditure of public funds in the region of £2,250 million, to which must be added significant contributions in terms of private capital, shows the measure of commitment to the new town idea and to the schemes which are under way, some of them mainly completed and others only just beginning. Clearly, we must ensure that such resources are spent wisely in both financial and social terms.

10.25 p.m.

Mr. Michael Morris (Northampton, South)

I am glad to have this opportunity to contribute to the debate. I had thought that after this evening's economic debate I would be able to say that the Bill before us was a case of the last of the big spenders. It seems that, far from having any cuts announced by the Government, we are to continue as before so that this Bill is just one of the large spenders.

We are concerned with the capital side, and I want to refer the Minister to three aspects affecting capital expenditure. I refer first to industrial policy. My hon. Friend the Member for Daventry (Mr. Jones) has already spoken about the selling of long leaseholds. Are the Government prepared to have another look at their industrial policy with a view to improving the financial contribution to new town development by way of the expansion of existing towns in expanding areas? I am sure that the Under-Secretary is aware that there are restrictive covenants affecting the granting of industrial development certificates to local firms wishing to expand in development areas.

The Chancellor said that there was too much investment in the wrong places. Where there are viable local firms wanting to expand and invest, it should be part of Government policy to allow that to happen. Within the context I hope that the Government will consider the financial contribution that nonconforming users from the central redevelopment areas such as my own town of Northampton could make in terms of their being given some provision for expanding their facilities in industrial areas.

The Secretary of State for the Environment referred recently to the restrictions on building for sale. He made the point that there was no permanent restriction on building for sale in development areas, even today. I have the Press release 14/75 from the Northampton Development Corporation stating that 160 homes previously earmarked for private occupation are now to be rented. Yet a start is not to be made until the end of 1975. The Under-Secretary knows as well as I do that there is now an upturn in private sales and an increasing demand in development areas.

It would be to the financial advantage of us all if the Government's policy were to be reviewed now that the housing market is perhaps showing signs of coming up from the bottom. I say with respect to my hon. Friend the Member for Daventry, in his capacity as Chairman of the Expenditure Committee Sub-Committee on the Environment, that I very much hope that he and his colleagues will look at the cost effectiveness of money spent on new towns.

I have the highest praise for the work that has been done in my own area, but I and many other hon. Members are conscious that things are not as good as they should be. I hope that my hon. Friend and his colleagues will leave no stone unturned and will not be afraid to tell the House the implications of what they find. I hope that, in turn, the Government will allow a full debate when the report comes to the House. This is one area of financial costing which will produce some interesting findings.

Lastly, I come to my perennial plea. Those who represent new towns in this House believe that we have shouldered an unfair financial burden on behalf of the country. The Government can no longer expect the people in the counties that support the new towns, who are willingly taking in those from city and urban areas, to carry this unfair burden. I hope that this evening the Under-Secretary will tell us that once again the rate support grant is being looked at in this context.

10.30 p.m.

Mr. Hal Miller (Bromsgrove and Redditch)

In congratulating you, Mr. Deputy Speaker, on the swift passage of the Bill through its Committee stage, by comparison with the Industry Bill which the hon. Member for Wood Green (Mrs. Butler) has been chairing so effectively, I hope that you will extend some tolerance to me if some of my remarks are more suitable to a Committee stage than Third Reading. I shall be confining myself largely to the financial aspects of Clause 1.

In regretting that the commitments of the Minister for Planning and Local Government prevented him from attending this debate, we are well aware of his very close interest in this subject, and we welcome it. None the less, we extend a welcome to the Under-Secretary, more particularly in my case as some of my remarks will reflect on the consequences for the rates of the transfer of assets proposed under the consultative document. I know that the Under-Secretary is closely concerned with the whole question of rates.

On Second Reading the right hon. Gentleman the Minister referred to the Greek Nicias. My advice to local authorities, ratepayers and taxpayers is that they should beware of Greeks bearing gifts. The proposal before us that there should be an additional £250 million of capital expenditure under Clause I, with a back-up of a further £500 million, needs to be examined rather more closely than was possible on Second Reading. In particular, I think that the House would wish to know whether there was a Treasury view on the proposal that the transfer of housing assets, part of the capital of these corporations, should be at the valuation proposed—that is, of outstanding debt. It is not immediately clear to some Opposition Members why that transfer should be effected at that valuation, except for reasons of administrative convenience—except perhaps that some of us fear that the Treasury may be seeking to slough off the continuing subsidy commitment.

I realise that the question of recurrent subsidy is not immediately connected with the capital expenditure, but the connection lies in the fact that all the capital is being transferred to the local authorities, and there are consequences arising from that transfer. If the subsidy to the corporation is not continued to the local authority, there will inevitably be a rise in the local rates as a result of such transfer.

At the same time, I think that the House would wish to know why the transfer of housing assets should not be made at the valuation that sitting tenants, for instance, were offered, under the Conservative administration at least, in relation to purchasing their houses. Would that not be a better method of valuation, in view of the very sharp increase in values since the new towns were begun? For instance, under the Redditch Development Corporation values have risen from about £6,000 to well in excess of £12,000 capital cost for a house built for rent under the latest scheme.

That frightening figure demonstrates clearly the loss to the nation of the increment in value with the transfer to local authorities on the basis proposed.

The whole question of housing values, capital value, raises very acutely, in the form mentioned by my hon. Friend the Member for Northampton, South (Mr. Morris), the question whether corporations can continue to afford, even with the additional finance proposed under Clause 1, to finance construction for rent at the present rate, quite regardless of the political implications or the preferences of either side of the House.

I have already given the capital cost of a corporation dwelling for rent. It is well in excess of £12,000—the average figure for new construction on the latest project. However, houses sold leasehold by developers in the new towns are currently selling at £8,000. It is ludicrous that there should be this situation whereby people who are willing to undertake the responsibility of owning their own houses are willing to pay £8,000 whereas for those who are able and wish to rent the corporation has to pay £12,000. There is a limit to the amount of construction for rent that is possible within the terms of the capital expenditure proposed in the Bill. The Government will be forced to think again on the question of rented housing in corporation-designated areas.

I now refer to infrastructure facilities. The development of Redditch New Town has been severely hampered by the Government's insistence that capital expenditure should be devoted to housing for rent instead of providing the balanced infrastructure about which the hon. Member for Basildon (Mr. Moonman) spoke on Second Reading. The hon. Gentleman was complimented on his speech by the Minister.

Unless there is a balanced provision of infrastructure—I refer not to amenities but to roads, sewers, schools and hospitals—and unless capital provision is made concomitant with the construction of housing, it will not be possible to achieve the necessary balance. Development in Redditch has been concentrated on the eastern side of the town. There is now a danger that the target population will not be achieved within the designated area because of the difficulties of development on the western side, which involves capital expenditure on infrastructure.

Finally, I made the point on Second Reading that the provision of infrastructure should include medical facilities. The position is that those facilities have not been provided on a par with educational and transport facilities. There is a need to look again at the provision of medical facilities, by means of the envisaged capital expenditure, to ensure that new towns do not become deprived areas.

I shall not again refer to the points which I made in the Adjournment debate on 28th March 1974 about the unfair consequences for local authorities of a great deal of capital expenditure proposed in connection with new towns. Replying to that debate, the Minister for Planning and Local Government said that he would examine the problem. Many months have now elapsed. I had hoped that the right hon. Gentleman would be here to reply to that point today.

Finally, under the heading of capital expenditure, for which provision is made in the Bill, I should like to deal with the provision of amenities. I request the House to pay attention to some of the consequences of the proposed transfer of housing capital assets to the local authorities. Is it proposed that the tenants should be consulted about the transfer of such capital assets? Our experience of the transfer of footpaths and play areas to local authorities has been far from happy. It has caused much concern and dissatisfaction among the tenants.

I should also mention, while talking about the transfer of capital values, that tenants came to Redditch with the commitment and undertaking that they would be able to purchase their rented houses. I should like to know whether that commitment will be honoured.

Finally, arising from the financial provisions in the Bill are the effects of the proposed transfer of capital assets on the staffing of the corporations. For instance, in Redditch half the housing programme has yet to be completed. If the proposed transfer of assets is to take place on 1st April 1977, it will be exceedingly difficult to recruit, let alone retain, the staff needed by the corporation to complete its development programme for which expenditure is being provided in the Bill. I understand that to date the staff associations have been consulted only on possible redundancies, not on other matters which will be affected.

Finally, I see that I have left out a point that I wished to make about the need to ensure that the capital resources of the corporations are assisted by the practice adopted in Redditch of releasing land to builders by tender to be made available to the public at an agreed figure for owner-occupation. I have already quoted the figure of £8,000 for a private house. The whole point is that not only the purchaser but the construction industry will benefit from the corporation holding the land bank. Builders, not afflicted with the financing of the land bank, will be able to continue building in the new town and at the same time make additional resources available to the corporation.

The final point—

Mr. J. D. Dormand (Easington)

What, again?

Mr. Miner

There was one final point.

Mr. Deputy Speaker (Mr. George Thomas)

Order. I do not wish to be unkind. I congratulate the hon. Gentleman the Member for Bromsgrove and Redditch (Mr. Miller) on his fifth final point.

Mr. Miller

Some of us have to take our finals more times than others, Mr. Deputy Speaker, especially if we are doing them by correspondence, as I did for my degree in estate management, if I may have the immodesty to recall it.

The conclusion of my remarks tonight rests upon the capital provision in the Bill. We need a decision urgently about the future size of the Redditch New Town, whether the designated area needs to be expanded, and how the target population is to be achieved in the light of the restrictions on the capital expenditure imposed by the Government under the Bill. Unless we have satisfactory answers to these points, I shall feel obliged to join my hon. Friends in opposing the Third Reading.

10.45 p.m.

Mr. Mark Carlisle (Runcorn)

As the only Member present, I think, who represents a constituency which includes two new town designated areas, one of them wholly—namely, the new town of Runcorn—and one of them partly—namely, the new town of Warrington—and as someone who sat through the whole of the Bill's Second Reading, I hope that I am within the terms of order in making a strong protest to the Government about the way in which they have conducted the Bill's passage.

We had less than three hours on Second Reading. That meant that it was impossible to be called by the Chair. It is regrettable that the problems of new towns are seldom debated in the House. If I attempted tonight to make the speech that I wanted to make on Second Reading I would rightly be ruled out of order. I do not propose to do so, but I say to the Under-Secretary of State, if I might call him in non-parliamentary terms "my hon. Friend", who sits for the neighbouring constituency of Widnes, that I feel it is extremely hard when hon. Members are not given the opportunity to express their views. When the Government produced a consultative document dealing with new towns we were invited to consult our local authorities, and I did so. I consulted the local authority that the Minister and I represent, and I went to the trouble of getting the views of the other local authorities concerned, only to find that the House had been given such a short time to debate the matter.

To keep within the terms of order on Third Reading I merely make three comments. First, I take up the comment made by my hon. Friend the Member for Northampton, South (Mr. Morris). The Minister will know that a request has been made by certain of the county councils involved with new town developments to meet the Minister to discuss the serious problem of providing local authority services within the overall problem that any county council now has from a rating point of view. I have written to the Minister about that matter and I hope he will agree to see the deputation. Cheshire has immense additional claims on its resources from the new town development corporations in Runcorn and Warrington in providing local authority services, together with the much-needed development of a housing industry to be provided by the development authorities.

I am sure that the Minister will agree, sharing as we do the representation of a similar area, that one of the great difficulties within the district council which we both represent is the feeling that all the resources go to the new town of Runcorn rather than to the older parts of Runcorn or the borough of Widnes which the Minister represents. There is a real strain on county councils. I hope that the hon. Gentleman's right hon. Friend will agree to see the deputation to which I have referred and discuss its problems.

My second point is to take up what was said by my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) regarding the sale of houses to existing tenants. I intervened in the winding-up speech of the Minister of State, Scottish Office on Second Reading, and I had the impression from his reply that his right hon. Friend was saying that he supported the view of the new town authorities that tenants of new town corporation houses should be able to buy their houses. I immediately tabled a Question to ask whether the right hon. Gentleman would announce that they could do so, only to receive the answer "Not at this moment."

We now have a situation where chairmen of all the new town development corporations, right across the spectra of political affiliation, have jointly recommended to the present Government that the ban imposed by the Labour Government on the sale of houses to tenants should be lifted. It can be nothing but the worst type of Socialist dogma that means that the Minister is not prepared to accept their advice to allow tenants to purchase houses from new town development corporations. There are to my knowledge many tenants of the Runcorn New Town Development Corporation who are anxious to buy their own houses—and who, indeed, had the opportunity to do so under the Conservative Government and are now being deprived of that chance by the political diktat of the present Government.

I notice that part of the Bill deals with possible pension arrangements for chairman of new town development corporations. I merely wish to draw attention to the service put in by the first Chairman of the Runcorn New Town Development Corporation during his 10-year tenure of office. I hope that if there is some intention to provide some form of recognition to chairmen, the efforts made by the first chairman of the Runcorn corporation will be fully recognised.

10.57 p.m.

Mr. Tim Sainsbury (Hove)

The Minister in moving the Second Reading of the Bill on 12th May 1975 is quoted in col. 53 of the Official Report as referring to the "foundling fathers" of the new towns. I feel that that was not perhaps what he said. If those founding fathers had had any idea that today we would have been talking of the sums of money set out in the Bill, some people might have been orphaned by the shock.

We are talking of considerable sums of money at a time when there is general agreement that resources are scarce. It is not inappropriate to recall that the vision of those founding fathers was not restricted to the new towns. Their vision was concerned with the existing urban areas as much as with the new towns which they saw working in conjunction with those urban areas.

I am reminded of a quotation from a recent publication "More Help for the Cities"—which includes among its distinguished authors my hon. Friends the Members for Sutton Coldfield (Mr. Fowler) and Aylesbury (Mr. Raison), both of whom are in different ways particularly interested in this subject. On page 8 of the document we see the following passage: Central government must greatly increase the resources available to help areas of urban stress; within total government spending (inevitably constrained for some time ahead) these areas need to be given higher priority. I feel that in the light of what was said in the House today in the debate on the economy, there is unlikely to be great disagreement about the nature of that constraint. Therefore, it is right when we come to consider the financial implications of the Bill to do so against the background of a need to argue carefully the cost-effectiveness of any expenditure.

My hon. Friend the Member for Daventry (Mr. Jones) has reminded us that this is a financial matter. Although we should all like to spend a great deal more time in discussing the social aspects of new towns and urban stress areas, today we must concentrate on discussing the allocation of considerable sums of money to the new town programme. It is right that we should look on this money first, as to whether it should be spent on new towns, and, secondly, as to how effectively it should be spent among new towns. Thirdly, we must consider the allocation of resources not only to the new town corporations but to the local authorities in whose areas this—some would say—cuckoo is placed. I hope that the Under-Secretary will be able to say something more about that and about the other points raised by my hon. Friends, including the whole problem of cost-effectiveness.

We perhaps do not have enough opportunities to discuss the important and much-admired programme of new towns, involving not only many constituencies but a great deal of public money, and, because of the rôle of the new towns in relieving urban stress, affecting many other areas that hon. Members would like to speak about.

One question that I should like the hon. Gentleman to give particular attention to is that of resources, the possibility of the sale of homes and commercial and industrial assets, at a time of scarce financial assets. I said on Second Reading that I had been the author of a pamphlet called "The need for new cities", but I was properly modest in refraining from quoting from it. My restraint has now run out, and I should like to quote the following statement: Growth centres can be the principal method of achieving these objectives, but only if they are successful in attracting and sustaining employment growth. In the consultative document it is suggested—one could say that it is more than suggested—that there should be a restricted programme of making available commercial and industrial premises. Paragraph 4.14 says: An important consideration in the industrial and commercial field is to ensure that the right proportion of benefits that may accrue over the years is shared by the community. That is a commendable concept in the abstract, but, for the benefit to the community that we seek, surely the most important thing is the creation of new towns that provide attractive environments to the people who live there, that provide them with the sort of homes and social infrastructure that they want, and—one would almost say "precedent to that"—jobs.

It is failing to appreciate the needs of industry to adopt for perhaps doctrinaire reasons a rigid approach requiring industrial and commercial premises to be, as far as we can understand, rack-rented. I am sure that the hon. Gentleman is aware that there are good commercial and industrial reasons why this form of tenure is inappropriate to many commercial and industrial ventures, and presents considerable difficulties to them.

Therefore, it seems to me that there are two advantages to be derived from reconsidering this aspect of the policy. The first is that it would reduce the borrowing requirement. It would reduce the amount of money that must be produced from Government resources for the new town programme. Secondly, it would make those new towns more attractive to employers. As my hon. Friends have said, based on their experiences of the new towns in their constituencies, this argument is doubly strong when it comes to the homes, on the one hand providing what people need and on the other providing relief to the Government at a time when any relief should be more than welcome. So I would put to the Under-Secretary that we need considerable further examination of the financial aspects of this whole field of new town expenditure.

I am sure that we are all extremely grateful for the study being given to this by the Committee under the chairmanship of my hon. Friend the Member for Daventry, and we look forward with interest to his report. I hope that when it is available there will be ample time to debate it, but I hope also that those in the Under-Secretary's Department who have responsibility in these areas will give us a little more financial data than has been forthcoming in the documents put forward so far on the new towns programme. I find it not very satisfactory that the whole of the consultative document is totally lacking in this sort of financial appraisal. Bearing in mind the sums of money involved, this House is not being given, in any of the plethora of publications on new towns, the hard financial analysis and comparisons that we ought to look for in these times. New town publications are notable for their glossy and attractive photographs. I hope that in future editions we shall have more charts and financial analyses.

I ask that the Under-Secretary should not only answer the questions put to him by my hon. Friend the Member for Daventry and my other hon. Friends but give us some indication of how the Government intend to approach the problems that are faced now by the new towns in our present climate, particularly with regard to the sale of homes, the tenure on which they make available commercial and industrial property, and the further consideration that they are going to give to the cost-effectiveness of the programmes for new towns at this time.

11.3 p.m.

The Under-Secretary of State for the Environment (Mr. Oakes)

First, I thank the hon. Gentleman the Member for Daventry (Mr. Jones) for the kind words he said at the beginning. I apologise that my right hon. Friend the Minister for Planning and Local Government is not answering this debate, but at least I am a Member for a constituency—as my hon. and learned Friend and neighbour the Member for Runcorn (Mr. Carlisle) has said—which, although not a new town itself, nevertheless is part of a district which comprises one of the new towns and, therefore, I have a very close interest in new towns, and particularly the effect of new towns on the county in which they are situated and on the district in which they are situated. The hon. Gentleman has put a number of specific points to me. He asked whether the first £250 million is already committed. Yes, indeed, it is really committed in the 1975–76 programme. He asked whether resources will continue to be made available for new towns. I should have thought that the very fact that this Bill is being brought before the House was proof positive of the Government's firm resolve that new towns shall continue to be supported not only because of the vitally important rôle they play in housing, in the attraction of industry, and in environmental considerations, but because they have proved in the past, and will continue to prove in the future, an exciting and interesting way to develop our urban environment.

The financial provisions of this Bill extend over two to three years, but I can assure the hon. Gentleman that the intentions of the Government are that resources will continue to be made available for new towns.

The hon. Member for Daventry also asked whether the Government were prepared to allow borrowing from other sources than Government ones. I am afraid not—except with Treasury consent. If the Treasury consents, that is allowable. But, at present, within the Act borrowing is not possible other than from Treasury sources. Other sources are not allowed.

Then I come to the interesting question of leasehold sales. Here, there is a difference between the two sides of the House. It is the Government's policy, as regards industrial and commercial development, not only in new towns but within the terms of the Community Land Bill, to adopt a leasehold basis and not a sale basis. It is important that the new town or, in the context of the Community Land Bill, the local authority concerned should be able, as a community, to reap the benefit of changes in value which occur from year to year. A sale cannot possibly benefit the community in the way that a lease can.

In the present state of the economic climate, it is surprising to find the Opposition arguing that industry should divert its resources to the purchase of freeholds or long leases when it may be better for those resources to be spent on plant and machinery for the benefit of industry.

Mr. Arthur Jones

I was not suggestting that an industry should itself make the acquisition, but that resources would be forthcoming from institutional investors, pension funds and resources of that kind. As for leasehold sales, in circumstances where factories have been nut up by a development corporation, it can by means of a leasehold sale ensure a proportion of the rack rent. It would get some benefit, even under the terms of a sale of that kind.

Mr. Oakes

I did not realise that the hon. Member for Daventry was referring to institutional investment in addition to the actual purchase of premises. I shall look into his point about a sale and a rack rent. I understood him to mean the sale of the freehold or a long lease at a nominal rent, as distinct from the terms of an ordinary letting of industrial or commercial premises. I shall write to the hon. Gentleman about it. But certainly the Government are against the sale of land, either freehold or on a long lease, from which the community will not benefit in the future when changes occur in the economic situation.

Mr. Sainsbury

This is an important matter for some industrialists. Has the hon. Gentleman taken into account the very high value and the rather fixed nature of the plant which many industries have to put inside relatively low-value factories? They are looking for a degree of certainty in their occupation of buildings, bearing in mind that they have put into them considerable resources in financial and planning terms. They need to be able to project cash flows over a longer period than the three or five years between rent reviews.

Mr. Oakes

In the general run of events, I think that the lease is longer than the life of the machinery, given the pace of technological change, and so on. The hon. Gentleman has raised an important point. This matter has not escaped the attention of the Government or of the individual new town corporations which have to make a decision about the rent and the length of lease of particular industrial developments. Where certain types of process machinery are installed this question can be of vital importance, and regard must be had to that fact when the rent and the term of the lease are being considered.

The final point of the hon. Member for Daventry was about the payment of pensions, allowances and gratuities. Under the Bill pensions are paid only to chairmen or past chairmen. The standard basis of calculation of entitlement to pension is virtually whether the person involved devoted two full days a week to the work. Under the provisions payment does not run to members of the board or deputy chairman. The hon. and learned Member for Runcorn mentioned the distinguished Chairman of Runcorn Development Corporation. I have the very highest regard for that gentleman. I do not know how he would fare under the calculations, but I would imagine he would come out very well, knowing as I do the time that he has devoted to these affairs.

The hon. Member for Northampton, South (Mr. Morris) raised a number of points, including the question of building for sale and the sale of existing assets and property of the development corporations. The hon. and learned Member for Runcorn and the hon. Member for Bromsgrove and Redditch (Mr. Miller) both raised the same point. I shall deal with it briefly, because the question comes not within the context of the Bill but within the scope of the consultative document. As its name suggests, that document contains the Government's views, and we shall be receptive to comments advanced by the development corporations and the authorities of areas in which those corporations are sited.

My right hon. Friend the Minister said on Second Reading that many of these matters would require very careful consideration, particularly the transfer of assets between a development corporation and the local authority, and the basis of that transfer. I know from first-hand experience that in the case of Runcorn New Town there could be difficulties, unless the matter is carefully handled, over the cost of new town houses and the basis on which they are transferred to the new authority compared with the existing stock of council houses within that authority. This matter falls within the scope not of the Bill but of the consultation document.

The points raised by hon. Members will be taken into account along with the views of the development corporations and the district councils which are at present the owners of other council houses within a district.

Mr. Carlisle

I was not talking about the transfer of the assets of the new town development corporations to the local authorities, on which subject I share the Under-Secretary's views. I was talking about the right of the individual tenant to buy his house.

Mr. Oakes

I shall be moving on to that point in a moment. I am sorry but I thought the hon. and learned Gentleman had been concerned about this matter. The hon. Member for Bromsgrove and Redditch certainly was, and I thought that the hon. and learned Gentleman was to some extent echoing some of the fears his hon. Friend had expressed.

I now come to the question of the sale of council houses to existing tenants. The policy of the last Government was the virtually unrestricted sale of the assets of new towns and thereby the depletion of those assets at a time when there were houses available for sale—and empty houses in most new towns—but waiting lists for houses to rent. We agree with a proportion of owner-occupation. We agree with building on plots for owner-occupation, because a new town must have a balanced community. But it is lunacy, when there is a desperate need for rented accommodation in new towns, to be selling off the seed corn and thereby depriving ourselves of the availability of housing accommodation for our people.

My right hon. Friend made it clear that we do not set our faces against owner-occupation. It would be foolish for any development corporation to embark upon a policy of selling houses that are available for renting. That was why we made it clear that as a Government we set our faces against such a policy.

Mr. Sainsbury

We are all interested in what the Under-Secretary has said about the proportion of home ownership in the new towns. Could he say what sort of proportion he has in mind?

Mr. Oakes

I cannot at the moment. What I say is that there is not the slightest objection if a person wants to build a house on a plot bought from the development corporation. What the hon. Gentleman was talking about was the sale of existing rented accommodation to sitting tenants. Those sitting tenants who want to own houses can avail themselves of other facilities to buy properties within the new towns. There is a clear policy division between us, and I could talk until 11.15 tomorrow evening without being able to obtain agreement from Tory Members about this.

Mr. Robin Corbett (Hemel Hempstead)

Would my hon. Friend agree that the policy of flogging off existing houses is self-defeating because it costs far more to replace those houses than it did to build them?

Mr. Oakes

My hon. Friend is right, and that is why I spoke of selling off the seed corn. It is also palpably wrong to do this when there is a waiting list for rented accommodation. The issue of cost-effectiveness—

Mr. Michael Morris

May I raise the point about virgin land originally designated for private housing? The private housing sector is picking up again yet, because of Government's directives, there is no private housing in these areas. The houses will be rented. This seems totally wrong when the local development corporation wants to build private housing.

Mr. Oakes

The difficulty arises not from directives given by the Government but from the inability of the building industry to sell houses which it has built, not only in new towns but in non-designated areas and other places.

The hon. Member for Northampton, South referred to cost-effectiveness. We are concerned with cost-effectiveness, and a review is being undertaken in the South-East of the cost-effectiveness of new towns. New towns provide housing in a better environment for people who have been living in cities in overcrowded conditions. They attract industry so that the people may live and work in the same place. It may be said that environmental amenities and landscaping are not necessary because they are not cost-effective. But a new town is a community of people as much as a community of buildings. We must have regard to cost-effectiveness but not be slaves to it.

The hon. Gentleman spoke of the unfair burden which is placed upon the county and the district and asked for an assurance that we would continue to bear that in mind when considering the rate support grant. The present rate support grant provides an infinitely better allocation of the needs element than did its predecessor which we inherited, but it is not perfect. What strikes me forcibly is the effect of rapid development on an area, whether that development is organised within the context of a new town or is generated from outside economic forces. We are examining that matter and the question of a proportion of the needs element going to the district as distinct from the county in certain cases.

The problems of Northamptonshire, which are curiously akin to those of Cheshire, are receiving the Government's attention.

Mr. Ronald Brown (Hackney, South and Shoreditch)

I hope that the current examination of the new towns element of the rate support grant is not taking precedence over the long-awaited review of the London element, on which I have been pressing the Department for years.

Mr. Oakes

I guessed that was what my hon. Friend would say. I cannot go into London matters, but I assure my hon. Friend that London and the new towns are receiving equal attention.

The hon. Member for Bromsgrove and Redditch referred to the transfer of assets and mentioned the phrase Timeo Danaos et dona ferentes. He fears the Greeks, especially when they are bearing gifts. This matter must be looked at very carefully within the context of the consultative document, and the Government will do so very closely.

The hon. Member for Bromsgrove and Redditch and the hon. Member for Northampton, South raised the question of a contribution from a development corporation to the infrastructure that the county has to bear. The corporations already have the power, subject to the approval of the Secretary of State and the Treasury under the terms of Section 3(3) of the New Towns Act 1965, to make contributions to local authorities when the latter have incurred expenditure resulting from new town development.

Such contributions have been made in the past and will be made again in appropriate circumstances. They are regarded more favourably by the Government in a partnership situation. In recent months Northamptonshire, for example, has been a case in point. But it is open to any local authority which feels that it is from the corporation, and if the corporation is agreeable the case will come unduly burdened to seek a contribution to the Department for consideration.

Mention was made also by the hon. Member for Bromsgrove and Redditch about the future size of Redditch. My right hon. Friend is in consultation about this, and there will be full consultation with the local authorities and other interested parties on expansion proposals.

I do not think that the hon. and learned Member for Runcorn did it deliberately, but, in speaking about the policy within his local authority on the non-sale of tenanted houses, he referred to the Socialist or Labour Chairman of the Runcorn Development Corporation. I do not think that he meant that the policy pursued locally by the corporation was a personal policy. It is not a personal fad of the present chairman, who, I am sure the hon. and learned Member will agree, is doing a good job, as did his long-serving predecessor, but Government policy.

Mr. Carlisle

I have great personal respect for the present Chairman of the Runcorn Development Corporation. My point was that he and his predecessors—both of them are supporters of the Labour Party—recommended to the Government that they should be allowed to sell their development corporation houses to sitting tenants. I made only a passing comment about their political persuasion.

Mr. Oakes

I apologise to the hon. and learned Gentleman. I misunderstood what he was saying. I have equal regard for the present Chairman of the Runcorn Development Corporation, but I cannot agree with him in the present circumstances. I assure the hon. and learned Gentleman that my right hon. Friend and I are willing to see a deputation to deal with some of the problems of the new town in his constituency.

I think I have answered at some length most of the matters raised in the debate, and I will write to any hon. Member who feels that I have failed to answer a point he has made. The hour is somewhat late on this last but one day before the recess.

Mr. Arthur Jones

By leave of the House, I should like to thank the hon. Gentleman for dealing so fully and competently with the questions raised by hon. Members and for the assurance he gave in respect of the Greater London area as well. We are much obliged to him.

Question put and agreed to.

Bill accordingly read the Third time and passed.