HC Deb 15 June 1977 vol 933 cc392-465

Order for Second Reading read.

3.42 p.m.

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

I beg to move, That the Bill be now read a Second time.

The Bill seeks the approval of the House to an increase in the current limit on borrowing by development corporations and the Commission for the New Towns. The last such Bill was in 1975 and a further increase is now needed in order that the work of the new towns can continue.

The practice of setting borrowing limits on new towns allows the House to review from time to time the progress of the new towns and the value which they give in return for the substantial public investment in them. For this reason it is the practice for money Bills to cover the foreseeable need for borrowing for only a fairly short period, say two years or so ahead, thus providing the House with the opportunity for a wide-ranging debate on new town matters. This Bill thus provides a timely and welcome opportunity for such a debate, for which many hon. Members have pressed, following my reappraisal of the new towns programme, which I announced in my statement in the House on 5th April.

First of all, however, I shall deal with the need for and provisions of the Bill itself. In May last year, when the limit was last raised by order, we estimated that the existing limit of £2,250 million would not be reached until towards the end of this year and that a Bill further to raise the limit would not need to be presented until the autumn. Our present estimate here is that the limit will be exhausted in about September or October.

This is only a little earlier than we had estimated previously, but it has meant that we have had to come to the House with a new Bill late in this Session rather than very early in the next. Forecasting the rate at which borrowing approvals will be taken up is not easy, but inflation and the recent exceptionally high interest rates have combined to increase expenditure in new towns, as elsewhere, and to bring forward the date at which a new borrowing limit is required.

These two factors explain why we are seeking the approval of the House in this Bill for an increase of £500 million to £2,750 million in the existing borrowing limit. Following the pattern of the previous New Towns Act of 1975, this Bill also provides for a further increase of £500 million in the limit to be made by order. Such an order will require approval by affirmative resolution of the House.

In my statement to the House of 5th April I outlined my proposals for the reshaping of the programmes for the third generation of new towns. In the longer term this can be expected to produce substantial savings in capital expenditure by development corporations. This is being assessed in detail as part of my present consultations about their revised targets. However, these savings will not begin to accrue for some years, and for many reasons we need to keep up the present momentum in the development of these towns even though the ultimate targets for new town growth have been substantially reduced. I do, however, expect that it will be possible to make some savings in the earlier years providing an opportunity for redeployment of about £10 million in 1978–79 and £20 million per year thereafter.

Clearly, the spending of money on the scale implied by the proposed borrowing limits must be justified by the value which new towns represent to the country as a whole. An investment programme of this size cannot expect to produce its financial returns in the short term, but some of the earlier towns have already produced surpluses, which have accrued to the Exchequer, and thus make a return on the money and faith which have been put into them.

But, just as the investment in new towns is not only in bricks and mortar, roads and factories, but in the people who make them working communities, so the return to society at large is not simply a matter of financial surpluses. It is also to be seen in the improved living conditions for their residents, the jobs which have been provided, and the contribution which the commercial and industrial activity in new towns makes to the economy of the country as a whole. But I think that the whole House will agree that the record of our new towns is one of solid and lasting achievement for the pioneering role in which they have won international respect.

The measure of their achievement is in the 280,000 houses they have built or assisted others to build and in the 200,000 industrial jobs they helped to create, often in the new and expanding high technology industries of the future. The measure, too, is in the social infrastructure of shops and schools, recreational and community amenities, provided because they are necessary to weld the many people of widely different backgrounds into working communities which can continue to develop and respond to their changing needs.

The new towns have an important role in catering for the elderly and the disadvantaged members of the community. Their record in the provision of housing for old people is creditable, perhaps less so for the disabled, although it is improving. In my discussions with development corporations I have made it clear that I am looking to the new towns to reinforce their efforts in this direction.

I also hope to see an increase in the number of people in new towns owning their own homes. Development corporations are free to make land available to private builders building houses for sale, and in 1976 land was made available in 19 out of the 28 new towns in Great Britain.

I expect to see more private house building, especially in the six third-generation towns that will go on building well into the 1980s. I hope that private firms will take the opportunities that are available to them in these towns.

Mr. Stanley Newens (Harlow)

Will the Secretary of State place on record that at the same time the priority in new towns must be in the provision of homes for those who are most in need? It is not desirable to sell off homes while there are long waiting lists of people who have no means of getting a mortgage. It is important, accordingly, to give priority to those in need—those who are only able to get into rented accommodation.

Mr. Shore

I understand that point very well. I am just coming to the part of my speech that touches on that. The Government's attitude to the sale of new town houses was set out in May of last year by my right hon. Friend who is now Minister of Agriculture. Under this we agreed to receive applications for general permission to sell whenever the waiting period for houses to rent for the main categories of tenant was three months or less. This is a carefully considered approach of balancing the need for rented houses with the desire of many to become owner-occupiers.

Fourteen corporations in Great Britain have recently applied for permission to sell rented houses and permission has been given in each case. An application from the Commission for the New Towns in respect of its four towns is currently before the Department. In the remaining 10 towns the view has so far been taken that the demand for rented houses is such that sales cannot be resumed. This balance precisely reflects the assessment by the new towns, in conjunction with the Department, of the actual need in each individual new town.

Mr. Peter Hordern (Horsham and Crawley)

I thought that the Minister said that he had received an application from the Commission for the New Towns covering Crawley, Hatfield, Hemel Hempstead and Welwyn. But those are first-generation towns with long waiting lists. Is the right hon. Gentleman saying that the Commission, in the knowledge of the Minister's remarks last year about the length of waiting lists, should still feel it right to sell houses to existing tenants?

Mr. Shore

We have had an application in that respect, although the detailed proposals for each of the new towns will differ. We are considering the matter. Obviously the case as advanced will reflect the situation in the new towns.

In some of the earlier towns the work of the development corporation is now substantially completed. They are moving towards a more normal situation with the impending transfer of their rented housing and certain other assets to the local authorities for their area. The second and particularly the third-generation towns still have much to do, and it is for this further development that the money which new towns will be authorised by this Bill to borrow will principally be spent.

But problems and priorities inevitably change with time. During most of the post-war period the problems of the cities have been overcrowding, inefficient and substandard housing, and poor quality environment. The new towns, by making accessible public rented housing and readily available jobs amidst pleasant surroundings beyond the green belts, have enabled people to move away from the congested cities. This requirement still remains, particularly in certain areas of London. In recent years, however, the problems of many of our cities have become those associated not primarily with overcrowding but with the loss of population and employment.

I know that there are some hon. Members who would like to use the opportunity afforded by this debate to probe the relationship between the problems of inner cities and the growth of our new towns, and indeed I have today published a White Paper giving further details of the Government's policy on the inner cities.

Mr. Eric Moonman (Basildon)

I am sure that my right hon. Friend will take the opportunity to emphasise that there is no inherent conflict between the new towns and inner city areas; nor is it the case that new towns have created the decay of the inner cities, as I am sure he will agree. No doubt my right hon. Friend will also confirm that only 10 per cent. of the population from inner city areas have moved to the new towns.

Mr. Shore

I shall be commenting on one or two of those points in my speech, but I should like to take this opportunity of thanking my hon. Friends who represent new town constituencies for their persistent refusal to regard the interests of the new towns as being in conflict with those of the inner cities, but rather to see the essence of the relationship as complementary—a relationship in which the new towns and the problems of the inner cities can be seen together so that the one can assist the other. I am grateful to them for their understanding of that relationship.

Our policies for inner cities and for new towns must be co-ordinated and what we do in the new towns must take into account our plans and policies for the inner cities. We must, as I have stressed, ensure that those who go to the new towns include a fair share of the unskilled and disadvantaged. We have made a start on this and we intend to do more. We must also take care that the continued growth and prosperity of the new towns is not at the expense of the inner cities.

The connection between recent changes in the two policies should not be exaggerated. It was a voluntary and unplanned exodus from our cities and not planned decanting to the new towns that accounted for more than 90 per cent. of those leaving the conurbations. Furthermore, my reappraisal of the towns programme was made necessary primarily by radical changes in the forecasts of population growth. A consequence of the review is that the resources released can be put to good use—for example, in the inner city areas—but it would be wrong to suppose that the provision of these resources was a main purpose of the review.

The third generation of English new towns was launched in the mid-1960s against a background of a projected growth of population in England and Wales to 60 million in 1991 and 66.5 million by the year 2000. On this basis the new towns as originally conceived would have taken about 5 per cent. of the increase. But. as the House knows, there has been a continued decline in the birth rate in recent years. Last year, for the first time, the population of Britain actually went down, and recent projections are that the population will rise by only 2 million—not 11 million— by 1991—to 51 million, and only by another 1 million—to 52 million by the end of the century.

Population projections are notoriously difficult, but the latest projections are more likely to be correct at least for 1991. Certainly, even if there were now a dramatic upturn in the birth rate, attainment of the mid-60s projection for 1991 is almost—and I choose my words with care—unconceivable.

Mr. Arthur Jones (Daventry)

Does the right hon. Gentleman see any conflict in the vast resources proposed under the Bill, amounting to £1,000 million, and his announcement that £100 million should be made available for the inner cities and the vast problems in those areas, problems that require solution rather than that there should be expansion of the new towns movement? Will he refer in the remainder of his speech to the use and rolling over of the assets created in the new towns—in other words, the use of existing assets rather than additional resources?

Mr. Shore

I promised to consider that point and I shall do so. Any question of comparison is vitiated, because we are not comparing like with like. The expenditure figures in the Bill cover the total expenditure on new towns, namely, all the capital programmes, housing programmes, roads and other services. When we talk of a figure of £125 million a year in terms of a programme for the inner cities beginning in 1979–80, we assume that that will continue for a substantial period, because it is a longish-term problem.

In other words, I am referring to a programme that is additional to the main spending programme by Government Departments, in addition to their housing programmes and to all the expenditure that they undertake, principally with the help of rate support grant and their own local resources. Therefore, it is not a fair comparison. It would be useful to try to obtain a fair basis of comparison in terms of the expenditure on the two separate projects—the new towns on the one hand and the inner cities on the other.

Offsetting these lower population projections which I have rehearsed is the rate at which households are formed. It will be some 10 years before the household formation rate reflects the lower birth rate since the late 1960s. On top of this overall national situation it has been necessary to take into account demographic changes region by region and the changing needs of the conurbations with which the new towns have traditionally been linked. In the light of their own population decline, some of the major conurbations—London, the West Midlands, Merseyside and Greater Manchester—have revised their own dispersal programmes. Another important factor bearing upon the new towns programme has been the reduction in the amount of mobile industry available to shift to new locations.

My broad conclusions from all these considerations was that in aggregate there was substantial over-provision in the existing planned programmes of the new towns. Significant extensions of the first- and second-generation new towns would in national terms have been inconsistent with this conclusion—even thought, in the local context, the case seemed strong. Indeed, it was clear that the time had arrived to examine the way in which these new towns could be completed and the development corporations wound up within the next five year, with the responsibility for providing for local needs being transferred to the local authorities.

The main scope for making reductions in the new towns programme as a whole lay with the third-generation new towns, all of which had the major parts of their programmes still ahead of them. With the exception of Telford, there had been no review of the long-term population targets of these new towns since they were designated. In the case of Telford, the interim target population set in 1975 was, in any event, subject to further review in the context of a review of the regional strategy in the area. At my request, the chairmen of the five new towns in question—I could not talk to Central Lancashire New Town because I had a decision to make about its future at that time—provided detailed information about possible development options and the likely consequences of pursuing them.

The towns involved were Milton Keynes, Northampton, Peterborough, Telford and Warrington. The evaluation of this information took into account the needs of the area which each new town is serving, the stage and nature of its present development, the best use of expenditure already incurred, the value for money of future expenditure, the extent of commitment to private investors, the view of local authorities as far as they were known and the need to finish up with viable communities.

I also visited each of the five new towns in order to see at first hand the extent of their development. My aim has been to produce sensible proposals for revised target populations for the five towns in order to provide a basis for public consultation with the development corporations and local authorities and others concerned.

These consultations are now well under way. The consultations are thorough and will involve not only the development corporations themselves but all the local authorities involved, host authorities and exporting authorities and those concerned with regional strategic planning. I hope that, on the basis of the results of these consultations, I shall be able to announce to the House new, firm, population targets for the six towns before the Summer Recess.

Reactions to my statement on 5th April were generally favourable. Most commentators have acknowledged that the dramatic fall in the population forecasts made inevitable some cut-back in the new towns programme. Equally, however, it was recognised that if we had abruptly halted a capital building programme of the size of the new towns, more harm than good could have been caused. Indeed, it seems to be well understood that the new towns have a continuing and valuable role to play for a number of years to come in providing an environment in which people and industry thrive. Particularly well received was the proposal that the new towns should do more to help the inner cities by taking their disadvantaged on a greater scale than hitherto, and the firm intention is to translate this proposal into action. This should go some way to meet criticism that the new towns sap the vitality of the inner cities.

Mr. Mark Carlisle (Runcorn)

The Secretary of State has said that he hopes that by the end of July he will be able to give a clear population target for the other towns, including Warrington. Does that mean also that there will be a reduced population figure and will the Secretary of State look at the existing size of the designated areas and see whether some of those areas should be redefined?

Mr. Shore

The size of the designated areas must follow the determination of the size of the new towns concerned, I shall have something to say about that, I hope, at the same time as I make the final statement, but we need a little longer to consider the full physical implications of the new population target.

I should like to say a special word, however, about the reasons for my decision to continue with the development of CLNT. These in many ways reflect views expressed in 1965 by the late Richard Crossman when first announcing the Government's intention to designate a major new town in the area. As well as providing for population overspill from Manchester, he said that the new town 'should contribute to the industrial revival of the whole region, and form a new focus for urban renewal"—[Official Report, 24th February 1965; Vol. 707, c. 399.] There was a second reason as well as the overspill reason that Crossman emphasised. CLNT is well located geographically for growth and, although the changed demographic picture means there will no longer be any major overspill from either of the region's two conurbations, Manchester and Merseyside, it is still in the interests of the regional economy that industrial investment should be stimulated in the three towns of Chorley, Leyland and Preston, which lie within the new town boundary, and for there to be renewal of the older parts of their urban fabric. These are tasks in which the development corporation can play a substantial and important rôle.

Nevertheless, changing circumstances made a re-examination necessary of the growth rate originally set for the new town. A major factor is that the population growth in the North-West has been about the smallest of all the regions in England. The best available information on demographic trends, housing need and supply and the likely availability of mobile industry were all carefully considered. It was also necessary to take into account the new infrastructure provided by the corporation, the need to round-off developments it had already started, and the need to facilitate British Leyland's important expansion in the area.

The House will know that I decided to approve the outline plan in a modified form to provide for a greatly reduced intake of 23,000 people, with the new town's future beyond that subject to consultations with the local authorities concerned and the development corporation. That 23,000 figure compares with an original target figure of 100,000. These consultations are currently in hand and I intend to visit the area on 1st July.

I should also like to refer to the Com mission for the New Towns, which since the early 1960s has managed four of the earlier new towns—Crawley, Hatfield, Hemel Hempstead and Welwyn Garden City. I well understand that, with the transfer of the housing to the district councils in all four towns next April, Commission staff are concerned about their future position and prospects. So too, are the staff of those corporations that are expected to be wound up in the next five years who might have expected to secure continued employment with the Commission.

But over two years ago when we were debating the last New Towns (Money) Bill my right hon. Friend the Member for Deptford (Mr. Silkin) looked forward to the transfer of housing to local authorities and stated that the new rôle of the Commission would lie in the management of the commercial and industrial assets, a statement he reaffirmed in various other debates last year on the New Towns (Amendment) Act 1976 and one that I also confirmed on 6th April in reply to a Question from my hon. Friend the Member for Chorley (Mr. Rodgers).

I see the Commission for the New Towns continuing to have a vital rôle for the foreseeable future in managing the non-housing assets both of the four towns that are already its responsibility and of further towns as the development corporations are wound up. I forecast in my statement on 5th April that this was likely in at least eight towns within the next five years. Consultations on this have also been put in hand since my statement.

The Commission will thus have a major task ahead of it. But the task will be different from its present one and will become more specialised. As the local authorities take over the housing in the elder new towns I should like to see them lake over on appropriate terms what I term "community related property"— parks and woodlands and some community centres—property which ought essentially to be a local responsibility and which in old established towns is normally a local responsibility.

Similarly, I have promised to consider whether, where local authorities wish to acquire commercial and industrial property from the Commission—and have the necessary resources—they should be able to do so. I want to see—and I think many hon. Members on both sides of the House will want to see—local authorities playing an increasing rôle in the older new towns—some of which are already over 30 years old.

But this will still leave the Commission for the New Towns with an extensive and vital rôle to play for many years ahead—a rôle in managing the great bulk of the industrial and commercial assets of the new towns which have been financed at very considerable Exchequer expense and in respect of which it is right that the Exchequer should get back a proper return on its investment. The Commission has built up valuable expertise in this field and it is our firm intention that it should continue to deploy it in the national interest, performing a complementary task to the increasing rôle of the local authorities in the older new towns.

I hope that the debate will provide the House with the opportunity to discuss the Government's latest thinking about the rôle of the new towns. Changes in our social and economic circumstances and increasing awareness of new problems have led to a reassessment of the future rôle for our new towns, but I have already made clear that changes would take place gradually and in an orderly way and that there would be no abrupt reversal of strategies. Although the longer-term population targets for the newer new towns will need to be revised considerably, we still see the need for a steady flow of investment in them over the next few years. This Bill will enable that to happen and I commend it to the House accordingly.

4.12 p.m.

Mr. Keith Speed (Ashford)

The Bill gives us an opportunity to debate new towns generally and the Government's strategy and it enables those who have new towns in their constituencies to air detailed knowledge and ideas. It is a pity that it is only on such Bills that we get these opportunities, and I shall have more to say about the parliamentary aspect of our relationship with the new towns.

I thank the Secretary of State for sharing his thoughts about the strategy, but what he said about the expenditure of £1,000 million was rather fleeting and we shall wish to go into the whole question of the funding of new town expenditure. The right hon. Gentleman glossed over this point and it was only a question from my hon. Friend the Member for Daventry (Mr. Jones), who apologises that he has had to leave the Chamber to chair a Select Committee, that prompted the Secretary of State to touch on any alternative.

New towns and their development are now in a period of considerable change. It is not their fault and it is due not to any failure or shortcoming on their part but rather to population and social changes. I am glad that planners, whether family or demographic, are proved wrong from time to time and that we get these changes that show that human spirit can emerge triumphant over planners.

This has meant that many grandiose plans of Governments of all political persuasions in the past 10 or 15 years have had to be cut back, and this coincides with our facing severe economic problems and a severe constraint on public expenditure.

There has already been much talk, and I suspect that there will be a great deal more, about the problems of inner cities and the London docklands. I hope that it will not go by default that there are substantial problems of urban decay—perhaps on a smaller scale, but just as important to the people involved—in our smaller towns and cities that are not in large urban areas. I am thinking particularly of North-East Lancashire, parts of the Midlands, the Potteries and elsewhere. When talking about resources, which must inevitably be limited, and applying those resources, whether money or expertise, to the inner cities, we must remember that there are other parts of England with similar problems that must not be neglected.

We broadly accepted and welcomed the Secretary of State's announcement two years ago of a substantial downward revision of the population targets for new towns. It was realistic and took account of the true facts of life. We also accept that it would be a nonsense for new towns such as Milton Keynes and Telford that have a substantial existing intrastructure investment to have it suddenly cut off, leaving roads and sewers all over the North Buckinghamshire countryside with no jobs or people to take advantage of them. My hon. Friend the Member for Buckingham (Mr. Benyon) has been assiduous in making representations to us that this would be a nonsense, and he is right.

Clearly we must consider what the Secretary of State has said about the Central Lancashire New Town. I was in the area at the end of March, and the local authorities there have mixed views. I listened to the Secretary of State with interest, and I appreciate the problems of British Leyland and the industrial regeneration of that part of Lancashire, but I wonder —and I put it no higher than that— whether the revised population target of 23,000 is the best decision. I am not entirely convinced that it is and I shall listen with interest to the views of hon. Members on this matter.

Mr. Moonman

I understand the hon. Gentleman's reluctance to accept some of the Secretary of State's proposals, but this is a viable project involving a considerable number of people. The hon. Gentleman represents the Opposition and if he is unhappy about the proposed solution, what would be his alternative?

Mr. Speed

I am not sure that it is a viable project. I have yet to see figures to show that it is. The original project envisaged a population of well over 100,000 and was very much bigger altogether. I have not seen figures to show whether the new proposal is viable. Looking at the problems of Liverpool and the enormous area there that has infrastructure—the whole site looks like the scene of a blitz—the south docks in Liverpool, certain parts of Manchester and the Warrington and Runcorn new towns, that are expanding at a much slower rate under the new plans, I wonder whether we are not making over-provision. If I were to be brutally frank, I should have to say that the top priority from the social point of view must be Liverpool.

Mr. George Rodgers (Chorley)

I represent the area concerned, and although I appreciate the hon. Gentleman's arguments, the local authorities in the designated areas—Chorley, South Ribble, Preston and the Lancashire County Council—all of which are Torycontrolled, are in favour of the revised project.

Mr. Speed

I know that there are mixed views among the local authorities in the area because they have been put to me. I am not being dogmatic. I merely wish to pose a number of questions about whether the substantial downward revision is the right solution. My view—and this must be a subjective judgment—is that the top priority in this area must be Liverpool and what has to be done there.

Turning to the detailed provisions of the Bill, it appears to increase the borrowing powers by about 44 per cent. In a debate of three hours and 10 minutes, we have to discuss a public expenditure increase of £1,000 million by way of two tranches of £500 million. This is a great deal of money. It is not Government money; it is the money of our constituents and the taxpayers generally. My hon. Friend the Member for Horsham and Crawley (Mr. Hordern), who is to wind up the debate for the Opposition, will have more to say about the public expenditure aspects.

We are critical of the Bill, and I shall invite the House to reject it because we believe that the Government are seeking the easy way out in financing their future new town expenditure. I hope that my hon. Friends and I have said enough to show that we are not anti-new towns, but we believe that by bringing the Bill forward in this form the Government are not helping new towns to make the best use of resources or to have money at the most advantageous rates.

First, the increase in the borrowing power is massive, and the borrowing will come from the National Loans Fund. The Government seem to have set their face firmly against other forms of financing, certainly at present. The right hon. Gentleman, in answer to my hon. Friend the Member for Daventry, said that he was looking at this matter, but the fact is that in August 1975, the Expenditure Committee, in paragraph 68 and 70 of its Thirteenth Report, said specifically that there should be much greater flexibility in regard to new town borrowings. This could save the new towns, as it saves local authorities, considerable sums of money.

I should like to know why the Government have apparently set their face against that greater flexibility. It may be a Treasury argument. It may be an argument from the right hon. Gentleman's own Department. I do not know which. But, certainly, the Select Committee advanced a strong argument, and the local authorities accept that great sums of money can be saved by borrowing in a flexible way, choosing the appropriate moment and using the various means of the money market. In my view, this should be extended to new town borrowings.

But there is another way, and that involves the assets and funding of the new towns themselves at the moment. We all know that the amount of money which will be available for new towns, for inner cities, for urban renewal, for dereliction and all the other purposes will be limited. I am sure that the Secretary of State could have put in much greater bids than the money which he will get. That being so, it seems to me that we must look carefully at the way we raise this money.

Why should we not do what companies have to do when faced with a situation of this kind? They look at their assets to see whether some can be released and to see whether money can be rolled over in order to provide finance for future expansion plans. We believe that free enterprise, both in the individual sense of the householder, shopkeeper or whatever it may be and in the larger sense of companies and pension funds, could and should now play a much more dynamic ô in financing the new towns.

I am told—I shall be grateful if the Minister will correct me if I am wrong— that Telford New Town, for example, had businesses which wished to set up there and wished to buy industrial sites on a freehold basis but were not allowed to do so. This seems unfortunate because it denies businesses the sites they wanted in the area and it denies Telford money which, presumably, could help it. That is a small example, but it highlights what seems to be a general problem.

Mr. Gerry Fowler (The Wrekin)

I suspect that what the hon. Gentleman is discussing is not a small but a tiny example. Can he tell us about the example to which he refers?

Mr. Speed

I cannot give specific details, but I have it on firm authority that there were several businesses which wanted to buy freeholds. They are prevented from doing so, not by the development corporation but by the Department of the Environment. If the Department says that it is possible for businesses to purchase freehold sites in all these new towns, I shall be the first to say that that is fine, but I believe it not to be so.

However, the matter goes further than that, and I should not for a moment argue that such a move would by itself solve the new towns' problems. On the other hand, I certainly argue that by having a much more dramatic policy for making use of new town assets, releasing or selling assets and rolling over their finance, we should not need to have a Bill of this type before the House asking for a further £1,000 million from public funds over the next few years to fund the new towns. On both questions—on the question of existing methods of borrowing and on the question of new methods of financing and releasing assets—there have been criticisms of the Government, and the Government have not met those criticisms.

On the other aspect of the matter, the right hon. Gentleman said, if I understood him correctly, that the reduced programme that he announced two months ago will mean savings of about £10 million in the first year and £20 million in the next. I presume that the £20 million will eventually grow over the programme which had been expected, because the reductions are quite substantial and these seem to me to be rather small sums of money. Perhaps the Minister could expand on that in winding up the debate.

On the question of expenditure priorities as between inner city areas and urban renewal and the new towns, the Secretary of State has already said that he would like to look at the matter to see whether he can produce some figures so that the House and the country may have a fairer and more realistic view of what is being done. I know about all the problems of rate support grant, housing subsidies and the many other things which must be taken into account, but I think that that would be extremely helpful.

However, the reason for our disappointment—indeed, more than disappointment, since we intend to vote against the Bill to night—was the attitude expressed by the Under-Secretary of State, who, I believe, will be winding up the debate for the Government, when he replied to Questions on 18th May. I have to refer here to one of the mammoth tomes of photocopied pages which we have to use because we do not yet have the printed Hansard, and I quote from page 28. The point was put very fairly to the hon. Gentleman by my hon. Friend the Member for Hove (Mr. Sainsbury), who referred to the very considerable assets now involved in the new towns, running to many millions of square feet of industrial space, office space and shop space.

When asked whether there was to be an early valuation of these assets, the Under-Secretary of State replied: It would be an expensive job to undertake a full revaluation of assets. The purpose of revaluing them presumably is to sell them. That is not the Government's present intention. Therefore, I do not see the purpose in proposing it. Then, in reply to his hon. Friend the Member for Hemel Hempstead (Mr. Corbett), he said: I can only repeat that this"— this being the new towns' assets— is a sound investment of public money. In that respect I would be totally opposed to the sale of such sound investments. Two points arise there. First, it appears to us that the Government have totally set their mind against disposing of assets in any way which could help the funding. Second, and more important, how does the Minister know that it is a sound investment unless he has an up-to-date revaluation? If a revaluation showed that the return was extremely low, it might not be a sound investment. Indeed, there might be a great deal of sense in selling the assets anyway, irrespective of the funding arguments in relation to the new towns.

I come now to a number of questions which I hope the Minister will answer, because they are germane to this whole issue. First, for how long does he expect the two tranches of £500 million covered by the Bill to last? In other words, what are the present expenditure trends?

Second, if the Bill were not to be enacted—this is always possible; there could be a General Election or something else which stopped it—the present limits would be reached in two or three months, so what would be the situation then? Presumably, there is some contingency provision.

Third, notwithstanding his rather negative attitude on 18th May, I think that it would be helpful if the Minister told us what he regards, or what his Department and his advisers regard, as a realistic estimate of the current value of the new town assets.

Mr. Leo Abse (Pontypool)

As I understand it, the hon. Gentleman is seeking a revaluation in order that this publicly owned property should be sold. If the revaluation shows that it was a poor investment or an inadequate investment, what does he propose? Is it intended that the assets should be sold at heavy losses to speculators outside? Is that the programme which he is proposing?

Mr. Speed

The hon. Gentleman gave the game away when he used the emotive term "speculators". I am not proposing that at all. What I am proposing is that the assets would be divided into a number of different types. First, there would be the easily realisable assets, even down to such an individual asset as a house which an owner-occupier could buy. My hon. Friend the Member for Horsham and Crawley put an interesting question to the Secretary of State about that, but there was no adequate reply.

Second, there are those assets which could be sold on a longer-term properly organised marketable basis. I shall be honest with the hon. Gentleman here, and I think that the Minister will agree: I believe that the assets now have a very high value, and it would probably make a great deal of sense if some of them were sold off. That would go a long way towards funding the £1,000 million which we are discussing.

Third, there are the very long-term assets in regard to which there would be no question of sale, for one reason or another. But until we embark on this exercise no one really knows, and I am asking the Minister to give us a view about that. If there is still to be no revaluation, we must, with respect, have a better reply from the Minister than the one he gave at Question Time a month ago.

Next, I hope that the Minister will be good enough to tell us what meaningful steps the Government have taken now— it is no good the Secretary of State merely saying that he is still considering it—to change the method of finance. He should be looking at the alternatives and at what the Expenditure Committee said. We should be given some idea about that.

There is also the question of demographic changes. I must ask the Secretary of State about a matter that must be at the back of the Government's thinking in view of the down-grading of the population targets. We read in today's national newspapers that in eight years' time 2½ million fewer children will be in our primary and secondary schools. It has also been reported from time to time that by mid-1980 there will be a substantial surplus of houses.

These two facts—if they are facts— must have been borne in mind by the Government. Does the Secretary of State envisage that there will be a further downturn in the population targets to match a static, if not falling, population? I appreciate the difficulties of anticipating these matters, but a reply from the Minister would be helpful.

My last question has not yet been mentioned but it is germane to the debate. How do the Government see the overspill agreements with the expanding towns, particularly around London? They have played a significant part in helping London and Birmingham, for instance, to deal with the population problem. The trouble is that although the letter of the law may still be the law, the spirit has largely evaporated and neither of the main political parties in London is prepared to export populations. I represent an expanding town and I have therefore an interest in the problem. It would be helpful if the Minister could say how he sees the problem in the context of the new towns.

I turn to the question of parliamentary control. We face a problem in that respect. The hon. Member for Hemel Hempstead has raised this subject at Question Time on several occasions. The problem of democratic control must concern the House. Locally, democratic control is exercised in local elections. In the House we have debates every year or so when we may briefly discuss new towns. We cannot go much further than that. Each new town development corporation has to lay with the Secretary of State its account and report. I should like to see at least in the regional committees of the House and better still in the Chamber, a full day's debate on those reports. Hon. Members could then express their views and they could be read by those who run the corporations. It would result in a more open debate than we have had in the past. We could do more about transport and new towns, which are controversial subjects in a non-party political sense.

Large sums of money are spent on the new towns and many thousands of people are involved. Yet the House has not played a full part in the development of the new towns. I hope that the Minister will accept the principle of my suggestion. The idea should commend itself to the House.

Mr. Newens

I regard the hon. Member's idea as desirable. He has made a number of critical comments about certain powers. Before he sits down will he make clear what is the Opposition's policy towards the financing of new towns? If the House opposed the Bill today would that not cut off all finance to the new towns, for a period of time at least, and result in redundancies and abandoning of plans?

Would the hon. Member also make clear what he intends to do about selling off new town houses? Does he object to my right hon. Friend's policy? Does he wish to sell off new town houses regardless of the waiting list of people who are desperate for accommodation?

Mr. Speed

We have made our policy on the thon. Member's last question quite clear. My hon. Friend will deal with all those matters later.

We resist the Bill not because we are anti-new towns or because we do not understand that they have ongoing commitments for which money is needed. I am critical of the overall strategic parliamentary control of the new towns. We believe that an opportunity is provided by the Select Committee Report for the Government to be more flexible in dealing with borrowing. The Government have spurned the suggestion in the report, which has been with the Secretary of State for nearly two years.

Another aspect of the borrowing problem is that we believe that there are commercial and industrial assets for which people would be prepared to pay a reasonable price. We are talking about the money in pension funds, some of which will belong to trade unions. Let us not use emotive terms such as "speculators". This would produce a fresh injection of new, free enterprise money into the system and the Government would not have to come back for more money at a time when public expenditure constraints are upon us all.

We are not saying that there should be no money or that there should be massive redundancies. We are saying that the Government have again taken the easy way out. They have been shown the way forward by the Select Committee, but they have set their faces firmly against those ideas. That is why we shall show our displeasure by voting against the Bill.

Mr. Deputy Speaker (Sir Myer Galpern)

I should tell the House that Mr. Speaker has asked me to make an appeal for brevity. The debate is to be concluded at 7 pm. I hope that hon. Members will bear in mind that if those who are called to speak fail to exercise self-discipline on the length of their speeches, it will not be possible to accommodate all those who are anxious to participate in the debate.

4.38 p.m.

Mr. Leo Abse (Pontypool)

I shall endeavour to conform with your direction, Mr. Deputy Speaker.

The people in the new town of Cwmbran will have noticed with interest the curious speech made by the Tory spokesman who approved of the goal lucidly expressed by the Secretary of State but at the same time sought to deny the means by which that goal might be reached. The people of Cwmbran will realise that if, alas, we ever have a Conservative Government it will be their intention to put on sale all the publicly owned assets that have been carefully husbanded over so many years. They will recognise that because those assets are showing an increased value—as the Conservative spokesman acknowledged—the Tories will start selling them off. They will sell factories, shopping and commercial centres, all of which are owned by the community.

We must be grateful to the Opposition spokesman for spelling out so clearly and explicitly that he would put Cwmbran and other new towns on the market to be purchased by whatever speculators come along.

I am particularly concerned about the situation in Wales. The Secretary of State patiently explained that the belief that the main purpose of his statement lay in his concern for the inner town areas was to no small degree mistaken and that what was weighing fundamentally in his mind in his recent policy statements was the demographic factor. Nevertheless, we are all aware that he rightly has in mind the urgent needs of the inner town areas.

Those of us who have had the benefits of the new towns all recognise how clamorous are those needs, and how dangerous it would be to ignore the needs of the inner town areas. But, of course, as has been intimated already in the debate, it is not enough to talk in broad generalisations. It is important that we examine, case by case, each individual town, and within the Principality we have a very special and very real problem.

The Secretary of State is too well aware of the condition of the housing stock of Wales, particularly of South Wales and its valleys, to have any illusions about the position. At present in Wales we have a housing stock half of which was built before 1919. The Under-Secretary of State for Wales who is at present on the Front Bench—my hon. Friend the Member for Rhondda (Mr. Jones)—will know, as he pointed out not so very long ago, that within his constituency, if the improvement work in old stock were to continue at the rate that it has been continuing during recent years, it would take 50 years before those older houses had the intended improvements completed.

The fact is that my hon. Friend's constituency in the Rhondda is a microcosm of whole valley communities, such as the community of my hon. and learned Friend the Member for Abertillery (Mr. Thomas), my own and all those inside Gwent. Therefore, having, as we have, so high a rate of increase in the number of unfit houses in Wales—probably about 150,000—the one new town that we have has made a particular and very special contribution to the needs of the Principality.

The truth is that Cwmbran New Town is a veritable oasis amidst a wilderness of old and often unfit houses in the valleys of Gwent. Therefore, if there were any suggestion that even the modest proposals that are now being considered by the Minister concerning an expansion of the designated area—modest proposals realistically presented by the development corporation, recognising the realities, economic and otherwise, and recognising the demographic factors —were to be in any way rebuffed, it would be grievously interpreted inside the Principality. It would mean that Wales would be put at a very serious disadvantage as compared with England and Scotland in relation to new town funds, as England would still have second-generation new towns and Scotland too, and have new towns completed as originally planned, whereas Wales would have only a very small project at Newtown.

Therefore, I am putting a special plea that there should be an avoidance of any action that would affect the small increase in the designated area that is now being considered and the comparatively small number of houses and new factory sites which it is intended to place upon that area. I urge the Minister to bear in mind the reverberations that would go right throughout the Principality if it were felt that Wales was being ignored and that inner town areas in England were getting a special preference that was being denied to those who are so keenly aware of the wide extent of obsolescent housing inside our old valleys.

I acknowledge the demographic factors nationally, but, of course, one has to examine the particular and individual situation. Inside Cwmbran new town we have housed young married couples with children from the beginning. The age profile of the town is far younger than the national average. Children are leaving school and will for some years continue to leave school in greater numbers than the natural wastage of population through retirement and death. As a consequence, the population, in particular the labour force, will continue to increase materially in the next decade, and unless for the whole of that period the development at Cwmbran continues there will be a shortage of jobs and homes to meet the needs of the increased population.

I am concerned that in an area such as Gwent there must be mobility of labour, because of the very fact that in the tops of our valleys great industries are inevitably known now to have to need considerable unloading of existing labour. Whether desirable or not, there has to be mobility into other areas in the southern parts of our valleys, in areas such as the new town. It is important that we have inside the new town at least this modest contribution, to make certain that those people who are at present travelling and will in the future travel a great deal into the new town should have the opportunity of having homes in the new town.

But, no less important, there should be no betrayal of the second generation of those in Cwmbran New Town, in comparison with what is taking place in Scotland and England.

What has been requested is a very modest demand indeed. It is something that can largely be encompassed or serviced by the existing amenities, and it would indeed be a considerable waste if the designated area as proposed and as originally canvassed by the Secretary of State for Wales did not in fact come about.

I hope that the decision will be taken speedily now. We have waited for a very long time. There is inevitably restiveness amongst the staff, who do not know their own future. They are a dedicated staff, who have done considerable work there, often splendid work. I trust that the indecision that was necessary while consideration was being given will now come to an end and that there can be a certainty about what is likely to take place.

I add one further comment. I ask the Secretary of State to consider this matter in relation not only to Cwmbran but to other new towns. I ask him to consider the state of housing in Wales and the lack of capacity of so many of the local authorities to be able to match up to the demands placed upon them, to deal with the acute problems in Wales.

Mr. Jeffrey Thomas (Abertillery)

Does my hon. Friend also agree—I do not for a moment underestimate the problem—that the position would be immeasurably better throughout the whole of Wales if local authorities in Wales spent all the money that has been made available for housing?

Mr. Abse

My hon. and learned Friend has pinpointed part of the problem, and it helps me to move into the point that I was making. The very size of the problem and the lack of capacity—which my hon. and learned Friend is indicating —on the part of the local authorities means, in my view, that it would be tragic if a development corporation were wound up and all its considerable sophistication and expertise in Wales were totally dissipated, as a result of the existing statutory limitations upon the functions of development corporations preventing its operating outside designated areas. The whole of Gwent, as I am sure my hon. and learned Friend would agree, and many parts of South Wales, would benefit considerably if assistance by the development corporation could be given to local authorities which are not able to do the tasks that we would like them to do. All that expertise of the development corporation should be placed at their disposal.

It will be highly unfortunate if a time comes when a development corporation that has shown its excellence in its standards of housing and design, and has got together a good team, is completely dissipated, with the consequence that all the work that is needed to be done in Abertillery, Pontypool, the Rhondda and many other areas does not have the assistance that could be given.

Surely we should allow sophisticated development corporations to tackle problems outside designated areas. We should not be so hidebound by our existing statute that corporations are inhibited from doing something that would be welcomed by most sensitive local authorities. I am sure that that would be welcomed by those who represent constituencies in the Principality.

Having borne in mind your injunction, Mr. Deputy Speaker, I trust that the briefness of my plea for Cwmbran New Town will not mean in any way that the anxieties that exist there and within the Principality—anxieties that Wales might be disadvantaged—will be thought to be unreal. There are considerable anxieties, but in view of the realism of the demand to expand the designated area that is being made they could be removed and a full understanding achieved. Even if the more grandiose schemes cannot be met—for example, we hoped that Cwmbran could grow to 75,000 people and not 45,000—at least the modest target that is presented should be met, so that the second generation of Cwmbran will know that it has not been let down by our Government.

4.52 p.m.

Mr. W. Benyon (Buckingham)

I should like to use the opportunity of this short debate to indicate the disquiet that I and many others feel about one particular view of the new towns.

I am grateful to my hon. Friend the Member for Ashford (Mr. Speed) for what he has said about Milton Keynes and new towns in general. To some extent I was also reassured by what the Secretary of State for the Environment said about the issue that I wish to raise—namely the relationship between new towns and the inner city areas.

There is a danger that we are facing a typical British sequence of events. At the very moment that we have achieved a major success, a situation which is not widespread in our economy at present, and just as we have produced something which is the envy of the rest of the world —in any other country of the Western world our new towns would be lauded abroad as a great success both economically and socially—we are turning on this achievement and using it as a whipping boy for the deficiencies in the centres of our large conurbations.

Obviously, we all support the idea of city-centre regeneration. The decay has gone far too far. However, it is not true to say that new towns are depriving the city centres of finance on the one hand and jobs on the other. The last study carried out in relation to London showed that 70 per cent. of the loss of jobs in London were jobs that vanished and did not reappear anywhere else. It indicated that 20 per cent. of them moved to areas which were unplanned. They were not new towns or expanded towns. Only 10 per cent. of them moved to new and expanded towns. The number of jobs that the new towns have taken from London is very small.

If we want to attract investment from home sources and overseas sources, the new towns, with their planned environments, modern housing and low-cost industrial sites, have a vital rôle to play.

Only yesterday I was talking to an industrialist in Milton Keynes. Incidentally, he had to wait five years before he obtained his industrial development certificate to allow him to move to the area. He told me that when he and his fellow directors had to decide where they were going to go, they were not moved by investment grants or the cost of the site but were influenced entirely by financial and commercial considerations as to where they should put their new plant.

This is relevant in relation to dockland. The regeneration of the inner city areas, especially dockland, will take a considerable time. I see this regeneration as being a very gradual process. That is borne out by what the Secretary of State said about the financial assistance that is being given to these areas in the coming year. I emphasise that new towns are not in competition with the city centre areas. Both are necessary and both have their part to play.

I ask the Under-Secretary of State to answer two specific questions that are worrying local authorities in my area concerning the handover procedure, when it comes, for the third generation of new towns. Obviously, the first and second-generation towns have grown up since the war. Their rent and salary levels are roughly the same as the levels of the local authority that will receive them. That will not be the case for the third generation.

In my area, the existing local authority has housing that it has controlled for a long time. It has produced a rent policy and a rent level that is below the level that exists in the new town. That discrepancy will widen and not close as time passes, especially if inflation continues. When the takeover takes place, will the receiving authority be allowed to make the case that in respect of salary and rent levels no burden should fall on the existing ratepayers of the receiving authority? Is this taken into account by the Secretary of State in arranging the financial formula at the time of handover?

I entirely agree that the method of financing new towns needs changing. At present, all the borrowing for new towns is at high rates of interest over 60 years. The net result is that the new towns are subsidising the Treasury, which does not borrow on the same time scale. There is a pressing need for the flexibility to which my hon. Friend the Member for Ashford referred. There is a need to borrow short and to roll over the assets. My hon. Friend need have no worry about the strictures that came from the hon. Member for Pontypool (Mr. Abse). It is understood that enormous assets are available that can be used more productively. Clearly, BP has shown us the way. We want to encourage investment by the private sector in all its forms. In my new town, for example, an investment of £25 million has already been made by the Post Office Pension Fund. That is something that should be encouraged.

There is a growing need for a new method of controlling the day-to-day finances of new towns. There should be more emphasis on a block grant without the restrictions of the yardstick. There is no need for organisations with the expertise of the corporations to be going backwards and forwards to the Department of the Environment to discuss small aspects of contracts. Such matters could be conducted much more efficiently.

The more that I see of new towns— this goes for many other aspects of our economic life—the more I see the rôle of the State as priming the pump, to get things started and then to allow private enterprise and initiative in housing, commerce and industry to take over and make new towns a success in their own right.

5.0 p.m.

Mr. Gerry Fowler (The Wrekin)

Like my hon. Friend the Member for Pontypool (Mr. Abse), I have been horrified to learn today of the Opposition's attitude to new towns. The hon. Member for Buckingham (Mr. Benyon) referred to "priming the pump". It was a Conservative Government who established the precursor to my new town of Telford, namely, Dawley New Town, in 1963. They did so deliberately on an area of derelict land where there was considerable social deprivation and with full recognition of the fact that, but for the establishment of a new town, with the long-term provision of public funds, there was not the slightest chance of new industry or people moving into the area. That new town is now making a substantial contribution to the industrial and population needs of the West Midlands—partly, I freely confess, because of the foresight of a previous Conservative Government as well as of my right hon. Friends when this party was last in government.

How sad has been the decline of the Conservative Party to its present nadir of arguing that what we want to do with new towns is put in money, make a quick profit and sell them off to the private sector, so that there is no more private development, and no more opportunity to attract industry to areas where we want it to go rather than where the speculators would willingly take it.

I want to talk primarily about the statistical base of the projections which have been made, leading to the statements before Easter about new town policy by my right hon. Friend and his statement about inner city policy. In his White Paper, "Policy for the Inner Cities", my right hon. Friend says: The further development of the English new towns has been determined in the light of lower demographic forecasts". He says that this has led to a reduction of the targets for the third generation new towns, adding: but over the next seven or eight years, the momentum of new town development will be substantially maintained". I question the precision of the forecast which has led to that reassessment. The passage refers to the substantial maintenance of momentum over the next seven or eight years, yet my right hon. Friend has told us today that, whatever happens to the national population, the number of households will continue to rise for at least the next 10 years.

That was a very conservative estimate We all know that not only has average household size been falling, for a variety of reasons, but that the birth rate peaked in 1964 and remained at an historically high level throughout the mid-sixties and that new households are generally formed 18 to 30 years after children are born. Those are the peak years for marriage. On that basis alone, it is apparent that what my hon. Friend has said today is the most conservative statement that one can make.

Certainly the total number of households nationally will not decline over the next 10 years, but it is arguable that even if the total number formed per annum thereafter begins to decline, there may still be for some years thereafter an increase in the total number of house- holds each year, because one is looking there at a net effect, not simply at the rate of household formation. That is likely, but I do not want to argue that it will happen. I merely want to put a question mark against the matter and ask whether my right hon. Friend has sound statistics upon which to base his new policy. There are reasons for doubting it.

I should like to quote from another recent Government publication by the Central Policy Review Staff, "Population and the Social Services": Forecasts of housing demand and needs cover 10–15 years ahead only, and the crucial factor is the projected number of households rather than simple population projections. The report goes on to talk about the projections reflecting a long-term trend towards more people forming separate households". In an annex, the report discusses that matter at some length, saying that more important than demographic factors are changes in the proportion of people in each age/sex/marital group who head separate households. For the last 20 years, 'headship' rates have been rising. More married couples head their own household. More single young people live alone or with other young people. More middle-aged single women are living alone. Widowers and widows are much less likely to go to live with relatives. As a result the number of households has been rising much faster than population and the average size of household has been falling, with a large increase in one-person households. This trend, which has been under-estimated in the past, is expected to continue. The causes are not well understood". Again, in the main text, the report says: Further work now in this area and on the methodology of forecasting housing demand could avoid further timelags in policy reflecting new trends". To that, I can only say, "Hear, hear".

I strongly suspect that in the announcement of the policy changes that we have witnessed in recent months, not only this House but the Department of the Environment still lack adequate statistical projections upon which to justify the firm policies which it is its tradition and our tradition to devise.

I draw two conclusions from that. First, it would be highly desirable if these detailed and complex projections, and alternative projections—I do not expect my right hon. Friend to have any firmer knowledge of the future than I do— could be laid before the House, so that we could judge their value. Second, we should try to get away from the notion of fixed long-term target populations for new towns and look rather at forecasting for the next five or six years what the population growth of a given new town should be, but not going firm more than that far ahead or saying whether growth should continue thereafter or what that rate of growth should be, because every time we do that, we are bound either to under-estimate or over-estimate need and either way we cause great difficulties. If we over-estimate demand, we exacerbate the trend which exists in any event —and which has little in origin to do with new towns—for people to leave inner cities and the conurbations generally. If we under-estimate demand, we ensure that, in the long run, people will continue to leave the inner cities, not for new towns and planned development but at the cost of the erosion of the green belt.

I suspect that the cost of that erosion is a high one to public funds—although this cannot be quantified—in terms of the infrastructure which must be provided for substantial private development within and just beyond the green belt in small towns and large villages. The cost has never been quantified and we have never debated it. I therefore hope for a more flexible approach in future.

The trouble with lurches in policy can be well seen in the fear of many members of the staff of new town development corporations, not least among the third generation new towns, about their future —justifiably and understandably. As my hon. Friend the Member for Pontypool said, they have built up a considerable expertise. I hope that we can begin to consider how to use that expertise in the redevelopment of the inner cities and in dealing with other urban problems if it is necessary to run down the staff of the corporations. However, what we must avoid at all costs is making policy by lurch, which simply leaves these people not only out of work or uncertain of their job prospects but with their expertise wasted and lost to the nation.

Is there a genuine connection between new town policy and inner city policy? I accept everything that has been said about there being no obvious and direct connection in terms of the policies themselves. I accept every word that my hon. Friend the Member for Pontypool said about the desire on the Labour Benches to see the inner cities redeveloped. Incidentally, I believe that our problem has been not that we have spent too little public funds on the inner cities but that we have spent the money incoherently, with housing, welfare, employment and education policies all pulling against each other or at least not in unison. We could obtain much better value for the same amount of money as we have spent in the past, but neither I nor any of my hon. Friends has any hostility towards the inner city policy.

What worries me is that although there is a connection between the policies it is not a policy connection but a financial connection. It is only fair to spell that out. We all know that by far the largest single element in the Department of Environment's budget is the rate support grant, over the detailed expenditure of which it has no control. From my own ministerial career, I am familiar with the same problem in the Department of Education and Science, where we had very little direct control over the vast bulk of our own expenditure. The result of what I have described is that there are relatively few areas where the Department of the Environment has direct control over the sums it spends.

One of those areas now, since the changes of last autumn, is the urban aid programme, since the Department inherited it from the Home Office. Another is new town policy. That is where I suspect there is a connection. If one increases the amount of money spent on one of those areas, under present economic constraints one necessarily reduces it in another. That explains why momentum in the new town programme will be maintained over the next seven or eight years, whereas my right hon. Friend said today that the number of households nationally would not decline for at least the next 10 years. That is a financial connection, not a policy connection. I regret it but have every sympathy, because I have operated under similar constraints. At least we should get this out into the open.

A further point that I wish to make concerns what my right hon. Friend said today, and said again in his White Paper, about the rôle of the new towns in catering for the elderly, the disadvantaged and the like. That is splendid. My own new town has a good record in respect of the elderly, as do many new towns. But the disadvantaged are a separate problem. In Telford New Town we have taken a high proportion of disadvantaged. We started with an area that was highly disadvantaged in any event.

Earlier this year, when new town policy was under scrutiny, I sought to obtain social indicators from a series of Government Departments to compare the area of my new town with the nearest inner city area, which is Birmingham. So many of my right hon. and hon. Friends told me that they regretted that the information was not available that I began to regret that the Government could take decisions on such an inadequate factual base. Of course the information is not available—although where it is available, it indicates that my new town is an area of substantial deprivation. Its unemployment rate has always been higher than the average for the West Midlands and it has normally been well above the national average, Today the female unemployment there is much higher than in Birmingham or the Black Country.

Derelict land is dealt with in a separate section of the new White Paper. I have done my homework, reading it very quickly. We are told that greater priority will be given in future to clearing derelict land in inner city areas. I am all in favour of that. Before the development corporation came, my new town contained the largest continuous stretch of derelict land in the whole of Britain. No assisted area aid was given for clearance.

I am not making a constituency speech. I am not arguing a special case for Telford. I am making the simple point that when we make blanket statements that there should be clearance of derelict land in one part of the country, that it should have priority over clearance elsewhere by category and not by specific area, and when we say that the new towns as a whole must take more disadvantaged people, we are making a profound error. We should say that overall this will be a policy objective but that each case must be examined carefully on its merits, that assistance must be given where it is deemed necessary after hard examination of the local situation, and that we should ensure that there is a balanced examination of need, so far as possible, not only in the inner cities but in the new towns.

I already have a startlingly unbalanced population in Telford New Town, and I am sure that this is so in some other new towns. I very much hope that instead of imposing a blanket policy my right hon. Friend, when he comes to turn his intentions into reality, will carefully examine the needs of each new town, and ensure that they are met in terms of the allocation of resources given to them and of the targets in respect of particular social groups which those new towns are asked to house.

5.15 p.m.

Mr. Michael Morris (Northampton, South)

The contribution of the hon. Member for The Wrekin (Mr. Fowler) deserves detailed consideration, with the exception of his earlier remarks, which were unworthy of him. I think he knows in his heart that what he said at the beginning was untrue. We on the Conservative Benches have said that we welcome the whole concept of the new town. I support it, and I believe that it has the support of my hon. Friends as well.

I should like to take up four or five points arising from the Secretary of State's draft proposals and his speech this afternoon. First, I very much welcome the fact that we are to have a firm policy before the Summer Recess. I urge the right hon. Gentleman to urge upon the Lord President that we should have time for a debate on those firm proposals when they are submitted. It would be a great tragedy if we were not able to comment on them, for the record, until late in the winter.

I should like to spend a few moments on the problems of the disadvantaged. I do not think that the policy has been thought through. That is why I listened with care to what the hon. Gentleman said. I understand that nobody has yet defined exactly who are the disadvantaged who are to come to the new towns. It seemed initially as if we were talking about those who were physically or mentally handicapped, single-parent families, and the like. Then it appeared from a number of submissions that the category included the elderly, who are obviously a charge on society.

I think that there is common ground that the elderly should be very much welcomed to the new towns, because they provide the community with an age balance and stability. My experience in Northampton—and, I believe, the experience of my hon. Friend the Member for Buckingham (Mr. Benyon) in Milton Keynes—is that in the past few years, when the numbers have been building up, they have provided a valuable part of life in our new towns. But the Secretary of State needs to recognise that, welcome as they are, the elderly are a more expensive part of the community. Their demands on the medical and social services— demands that are well documented—are fairly extensive.

The Secretary of State, as a Member for an inner urban area, will probably recognise that the health and social services facilities available in inner London and the other inner city areas are considerably more advanced than they are in the county council areas outside. That is a historical fact. When I hear the right hon. Gentleman talk about the rate support grant, as he does at every Department of the Environment Question Time, I worry very much when he indicates that there will be a further transfer of resources from the county councils to the the inner urban areas. He will have to think very hard to find a means of ensuring that adequate resources are made available to the new towns in the county areas, which are taking on the increased burden of disadvantaged people.

I think that the right hon. Gentleman knows that in recent weeks I have had to spend a little time in Northampton dealing with the Department of Health and Social Security. I find it amazing that under the new proposal for the distribution of resources there is the bland statement that no allowance will be made for the pressures of new towns on the health services.

I find that an extraordinary statement, because whereas at one end of the spectrum there are young married people with lots of young children, and the new towns are among the few places in which the birth rate is still increasing, at the other end of the spectrum we have the right hon. Gentleman's statement that we should take more old people. We welcome this, but they are putting extremely heavy pressure on the geriatric side of the service, and the DHSS blandly ignores this and says that it will make no financial allowance.

I urge the right hon. Gentleman, before he comes back to the House, to have consultations with the DHSS and with his right hon. colleague in order to knock some sense into this policy. I say quite sincerely that unless some financial provision is made, good and proper services cannot be provided to these new communities.

There are proposals to close a major geriatric unit in Northampton simply because of a cut-back in resources. This will give the right hon. Gentleman some indication of the problems that we face on the ground at this time.

With regard to the roll-over of assets, I am disappointed that the hon. Member for Pontypool (Mr. Abse) has departed from the Chamber, because it has always seemed to me that, far from flogging off the assets to the speculators, we are returning the assets to the community. It is, after all, the community that provides them in the form of taxation, and it is right that we should turn over those assets and turn them back to the people.

I say to the right hon. Gentleman that if it sticks in the gullet a bit to liquidate the assets in toto, serious consideration could be given to the liquidation of the assets of the first-generation new towns, to provide the assets and resources for the development of the third-generation new towns and the inner city areas. The money would thereby be kept within the public sector, and there would be one further advantage. There is little doubt in my mind—I suspect that the right hon. Gentleman will have to admit this when he makes a statement in July—that the rate of expansion of the third-generation new towns will have to slow down, because the resources are not now available to the extent that they were hitherto.

If that is the case, I believe that the right hon. Gentleman needs to think very hard whether it would not be a better solution to consider rolling over the assets of the first-generation new towns and making the resources available for a quicker, and in the end cheaper, development of the third-generation new towns I turn now to the question of job opportunities. We have already had an explanation of the situation in Telford I have noted some worrying statistics in my own area of Northampton, which is traditionally an area of below average unemployment. It is interesting that over the last six to eight months, whereas nationally unemployment figures have begun to decline, in Northampton and other East Midlands towns they are remaining constant, or are marginally rising. I believe that the right hon. Gentleman has had a submission from the East Midlands Economic Planning Council indicating its great concern about job opportunities for the future.

I should like to quote very briefly from a combined submission from the general managers of Milton Keynes, Peterborough and Northampton New Town Development Corporation on the Lambeth Inner Area Study. It gives their reactions to the consultants' report. There is one paragraph that sums up the situation. Talking about new town jobs and where they will come from, the managers say: For the future, we see much the greater part of employment growth in all three towns coming from the expansion of established firms and services and from firms attracted from the South East outside London. In so far as firms do move from London, we expect them to be mainly in offices rather than the manufacturing sector. I do not think that the right hon. Gentleman will quarrel with that conclusion. The implications are that we should be careful about the increased rate of acceptance of unskilled labour.

I am sorry to burden the right hon. Gentleman with yet further consultations with colleagues, but he needs to consult very closely with the Department of Industry. We have an extraordinary situation concerning one company in Northampton. We take advertisements in the Financial Times, The Times and other newspapers urging industrialists to come to Northampton, yet the Department of Industry is telling one of our medium-sized manufacturers who wishes to expand that it is terribly sorry but he cannot do this in Northampton and must go north.

In the rephasing and reassessing of the new towns there needs to be close consultation with the Department of Industry concerning the industrial development certificate policy. Certainly for the next few years the principal growth in the five third-generation new towns will come from local manufacturers who are already there. They may be people who have come in in the early stages. They may be traditional firms who, for one reason or another, have wanted to expand before but are only now able to do so. It would cause enormous disruption to the whole concept if we were to invite industry to come to the new towns and at the same time have to tell those who happen to be there already that they must go elsewhere. That would be nonsense. Therefore, I hope there will be some consultations in this respect.

I believe that it is absolutely essential that the policy of selling new town houses should be extended. There are, however, two problems concerning the implementation of such a policy. One is the problem of mortgage availability and the slowness of building societies to move in and support, by way of mortgages, the purchase of some new town properties. There should be consultation with the nominated building societies which are already helping local authorities, and we should urge them to act generously in regard to the sale of new town houses.

I wonder whether the time has come to move outside the top 10 to some of the regional building societies. In Northampton we have the headquarters of the thirteenth, fourteenth or fifteenth largest building society, but it is outside the scheme. Particularly in regard to new town houses, some of the large and medium-sized building societies could be encouraged to give assistance.

There will be a problem in the not-too-distant future as to the price at which some properties can be sold. This is not necessarily the fault of anybody at this time, but it is a hard fact of life that in the third-generation towns we are dealing with some houses that were built earlier on and may be selling now for £7,000 or £8,000, whereas those built in the last year or two, at a cost price of £15,000 to £17,000, have a market valuation of only about £11,000 or £12,000.

I urge the Department to give consideration possibly to allowing development corporations to average their costs across the totality of their stock. This would be a more realistic approach, and one, I believe, that the general managers themselves would very much welcome.

Very little has been said today about dockland, probably rightly so, because we have not had a chance to see the White Paper that the right hon. Gentleman announced today. At least two years ago hon. Members on both sides were suggesting to the Government that the expertise in the new towns should not be confined to the green field developments, that there was an expertise, a drive, an enthusiasm and a competence there which was badly needed in inner city areas. I say that as one who has been deeply involved in an inner city area.

We would be less than realistic if we did not tell the Secretary of State—or his successor, if one of my right hon. Friends takes over—that it cannot be left to the inner London boroughs and the GLC to solve the problems of London's dockland. I do not believe they will ever solve it, and all of us need to be sufficiently strong minded on this issue. I know that I shall not be too popular with some of my hon. Friends for saying that, but this problem need to be taken hold of, and the expertise in the new towns is available for that purpose.

On the whole, the right hon. Gentleman's White Paper is sound and I welcome it very much. I welcome the speed with which we are to get a response and I hope that we shall have an opportunity of a good debate before the Summer Recess, so that we may continue the good work that has been done to date.

5.52 p.m.

Mr. Eric Moonman (Basildon)

This is probably the most worrying of all the debates on new towns that I have listened to or taken part in the last 10 years. It is not that the Government's case is so crystal clear that I can necessarily embrace everything that my right hon. Friend said, although I appreciate his earnestness and determination to reassure some of us about how new town strategy will be developed.

I am, however, concerned about the way in which the Opposition are now treating the whole question of new towns. It is not good enough to suggest that certain of my right hon. Friend's remarks were not particularly worthy. He, too, senses his feeling and mood. If we study Hansard tomorrow we shall see that the hon. Member for Northampton, South (Mr. Morris) indicated that he thought that a Division at the end of the debate was somewhat irrelevant. He was complimentary to many of the things associated with new towns.

The hon. Member for Buckingham (Mr. Benyon) said nothing to suggest that this was a matter on which the House should divide. If there is a Division it will not be understood in the new towns, and in that event I hope that the Conservatives will realise the absurdity of the position.

The hon. Member for Ashford (Mr. Speed), however, declared war with the Government Benches on the question of new towns. He made much of the fact that a Select Committee report dealt with the question of financing. I was a member of that Select Committee. When I was re-elected to the House I was responsible for getting published the evidence that accumulated while I was away from the House.

In that report we said, in looking at the whole question of financing, that there should be other ways of financing new towns. We did not suggest that this was a matter to be implemented within a couple of years, nor was it right to take the issue through the Division Lobbies. The only argument that the hon. Member for Ashford has advanced for having the Division is based on references to the Select Committee. This is humbug and hypocrisy and I am afraid that the good people of the new towns in Britain will not understand his intentions.

I wish to endorse what was said by my hon. Friend the Member for Harlow (Mr. Newens), who pointed out that many people's jobs could be threatened if the Opposition managed to defeat the Government tonight. There is another consideration. Because of the finely balanced nature of the House these days I do not believe that the Opposition can act as they might act in other circumstances and force a Division, knowing that they could not succeed—tonight they might do so. I do not know what arrangements the Whips have made, but I am certain that this is not a frivolous matter. We cannot engage now in the parliamentary gamesmanship that goes on when the Government party has a more substantial majority than is the case today.

I am the chairman of the Parliamentary Labour Party's new towns committee. Many of my hon. Friends on that committee will not be here to speak in the debate, but they feel as strongly on the issue as I do. I believe that it is widely accepted that I do not attempt to create political issues out of the new town movement. We are on a serious course this evening, and in view of what the Opposition intend to do I draw attention to what was said by their housing spokesman— the hon. Member for Hornsey (Mr. Rossi) —three weeks ago. He said: We are realising almost too late that the success of our new towns has been bought at the expense of our inner cities. That declaration is an attempt to polarise feelings in the two areas between the inner city areas and the new towns, and it is very different from what was said by the hon. Member for Buckingham. The tone of that declaration was not in the spirit of the new towns debates of the last 10 years. It was not even in the spirit of the new towns movement. Conservative Members who have some interest in new towns will have to do a great deal of explaining at the next General Election to justify the type of behaviour that we have seen this evening.

Mr. Hordern

I do not know how the hon. Member for Basildon (Mr. Moon-man) works out his comments or whether he thinks carefully about them beforehand. Is he not aware that Members on the Conservative Benches have at least as much experience as he has of new towns, and at least as much regard for them? However, we also have regard for the inner cities, and if we think that the Government's policy is inappropriate we shall say so and vote accordingly.

Mr. Moonman

The hon. Gentleman probably did not listen closely enough to what was said by my right hon. Friend the Secretary of State. The hon. Gentleman is saying that there is no contradiction here. Surely the critical issue is the way in which the new towns have developed, and not at the expense of the inner city areas. These areas have their own peculiar problems. If the hon. Member for Horsham and Crawley (Mr. Horden) doubts that, let him visit Liverpool or London. Let him go along to the constituency of my right hon. Friend the Secretary of State.

Underlying some of the pressure on new towns in the last six months is the feeling that somehow they have been rather more favourably treated than the inner city areas. Some of us have been trying to erase this impression. I do not think that anyone gains by such distortions. If the hon. Member for Horsham and Crawley is now saying that the needs of the two areas are complementary, we are not in dispute. However, I do not want the people in the new towns to feel that they have achieved their better standards at the detriment of the inner city areas. We should avoid polarising the different communities in this country.

Mr. Timothy Raison (Aylesbury)

No one wants a conflict between the inner cities and the new towns, but there is a problem of resource allocation. Either one can put the money into the inner cities or one can put it into the new towns. One can put some of it into both, but one must make up one's mind about the priorities, and that is the problem.

Mr. Moonman

That has been the basis of my right hon. Friend's statements before the Easter Recess and now. He has decided to cut back. This is an active Government response to the argument that the hon. Gentleman has put forward in suggesting that we cannot go ahead with development in certain towns.

More positively, we must put on record the fact that Britain's new towns are unique. Their reputation is worldwide. They are admired not only by industrialised nations such as the United States and Japan but by the underdeveloped countries of Asia and Africa. One of the difficulties is that we tend to take them for granted, and we have forgotten how widely respected are the principles underlying them.

Reference was made to the competence and expertise shown in the way in which the new towns have been developed. This is one aspect that should be applied to the inner city areas. If there is something successful in the new towns, why not try to use that competence as specialised skills in the inner city areas?

However successful the first 30 years of the new towns, we must look to the future. I welcome the Minister's consultation document for the assessment it makes of new town achievements, problems and possible solutions. One of the main aims of the new towns is to keep housing and employment growth in balance. This has not been achieved over the last decade, largely because there has not been any incentive to get manu facturing industry into new towns unless they were in development areas. New town development must be part of a total strategy in which the rôle of the new towns must be considered in any national employment planning, for houses without jobs is one kind of planning nonsense.

One point is that after 25 years the housing responsibility of the new town is twofold—to accommodate newcomers from the inner city areas and to acommodate the second generation. One of the interesting comments mentioned earlier was the importance of having a series of reports on the various activities of new towns so that we can look at some of the specific problems, such as the second generation, which in the Essex new towns is causing quite a dilemma.

The other point is how far the new towns succeeded in creating real communities. Between 1946 and 1977 more than 2 million people have come to live in the designated new towns. It is big business, in terms of the number of houses, shops, schools, factories and offices. Governments arc constantly having to look to the development corporation and the agencies to see how successful that has been.

I now turn specifically to the Minister's statement with regard to the cutback. The cutback as outlined before Easter affects mainly the third-generation developments—Milton Keynes, Northampton, Peterborough, Telford, War-rington and Central Lancashire. Central Lancashire was planned for a population of 500,000 but is now scheduled to end up with only 23,000. As envisaged in the 1960s, these developments between them were ultimately targetted to provide homes and jobs for about 1,172,000 people. This has now been scaled down by about one-third in the light of the radically changed population forecasts for the country as a whole.

Personally I believe that the serious trimming will also start taking effect in other ways. Although one may wish to make this trimming and cutback, I am concerned that it may affect the attitude of industrialists who will see that a particular project will not be completed and that they will not have the range of employees and skills. That could be quite serious.

There is also the problem of the £100 million set aside in the Budget to finance construction work in certain inner cities. Incidentally, it will provide work for some of the 250,000 building workers currently unemployed. But that, as some of my colleagues have been quick to point out, has to be offset against other moves, like the £57 million taken away from the housing associations, which do much work in run-down city areas and the £20 million which has been lopped off Liverpool's home improvement plans.

The latest surgery is based on the premise that the United Kingdom population, once anticipated to reach 60 million people by 1999, now looks like attaining only 51 million people. As a result, some Whitehall forecasts now look forward to a substantial housing surplus in the mid-1980s. But my main fear is that the ambiguity of the Government's intentions will frighten off industralists whose manufacturing and marketing plans were based on the assumption that Telford and the rest would attain their full original size.

I conclude with a reference to my own constituency. In talks that I have had with the development corporation it appears that there are some items which ought to be given close attention by the Government. The first is that the handling of the announcement of any alteration in the new town structure can cause considerable anxiety to the staff.

In Basildon we are faced with an intensive programme over the next five years at least but already many of our best young professionals are thinking seriously of leaving us. Some have already done so. What I am arguing is that confidence in the future must be restored. The staff are not unreasonable and they clearly see that there is a job to do in finishing the town properly, and they believe it is a task which they should be allowed to complete.

The other point is that in a town like Basildon there is an intensive programme of housing, industrial and commercial development. But the failure to finish the town in a sensible manner could bring with it the real possibility of creating a depressed area for the future.

Mr. Shore

I can assure my hon. Friend that there is every intention of completing the town of Basildon. All that has been said is that when a town is completed a terminal date must be set and there must be a transfer of housing assets. I hope that that allays my hon. Friend's anxieties.

Mr. Moonman

The point that I was making was that the announcements prior to my right hon. Friend's statement in April needed some clarification. This goes back to my right hon. Friend's first statement in October last year. I am only offering my right hon. Friend the views of those who could be affected. We have lost professional staff in the new town development corporation because there was a feeling that their work was coming to an end. That may have been a mistaken impression, but that is exactly what happened. The feeling among people I have spoken to is that if the corporation is not allowed to plan and execute the completion of Basildon there is every reason to believe that it will never be done.

I believe that there is a whole series of areas that will cause concern, not only from the point of view of the way this is done but also to people in the new town, if one of the techniques for the future is to establish the Commission for the New Towns and run-down of the development corporation. If that is the case, I hope that my right hon. Friend will take into account the fact that one would like to see the democratisation of the Commission for the New Towns, because the development corporations, perhaps in some cases more than others, have been criticised for the way in which they have taken decisions. In some cases there has been a much closer relationship than others, but if we are to see the ending of that relationship with the individual Member of Parliament, the Commission for the New Towns could become rather more authoritarian and remote than what we have experienced up to now. That is another case for looking rather more into the future about how this can be done.

These are some of the problems which I believe are worthy of attention, rather than some of the suggestions made earlier in the debate, which could polarise the two sides.

5.47 p.m.

Mr. Hal Miller (Bromsgrove and Redditch)

If I were a betting man I would not have been laying money on a horse at Ascot this afternoon but rather on the fact that a new towns debate would be taking place during Ascot week.

I should like to deal with the anxieties expressed by the hon. Member for Basildon (Mr. Moonman), although I am not privy to the thoughts of my colleagues on the Front Bench on this matter. The hon. Gentleman suggested that somehow the Conservative Party has declared war on the new towns on the basis of political bias, and he was concerned—I share his concern—that a dichotomy has been made between the new towns and the inner-city areas. I believe that Conservative Members are concerned with the management of assets that have been created. Up to now the whole concentration has been on the creation of the assets of the new towns. We are saying that it is right that the public authorities should pursue a policy of active management of those assets in order to provide the resources needed to continue the programme of development in the new towns. They should complete these new towns and carry on the development of the third-generation towns.

If those resources are not available out of taxation because of competing demands from inner cities—I shall shortly make a plea for rural deprived areas, for do not let us imagine that deprivation is unique to the inner cities—the Government have a duty to see whether the assets and the resources can be found to enable new town development to be continued and completed in accordance with all our hopes.

It is not a question, as the hon. Member for Pontypool (Mr. Abse) suggested, of these assets being made available to speculators, to do what they like without planning control and all the other horrors that his fertile Celtic imagination raised. It is a question of selling freeholds to pension funds and the like in order to raise more funds to continue the development of infrastructure and other public uses. It is not a question of building Centre Points or whatever—

Mr. Abse rose

Mr. Miller

I am sorry not to give way, but I should like to continue. It is a question of enabling public development to be continued. It strikes me as perfectly proper that public assets should be actively managed, just as we would wish to see the real estate assets of British Rail actively managed in order to provide for continuing investment in the railways. I hope that that is a ground on which we can all meet. There is no point in creating an asset and leaving it idle, whether it is in the public or the private domain. The problem is to manage it and to produce what the main object is. In the new towns, our common object is to proceed with their development and completion.

Mr. Abse

Taking only one of these examples, does not the hon. Gentleman appreciate that in many cases the reason why the freehold should not be sold in any circumstances is that, once the freehold is disposed of, it is impossible sufficiently to embrace control of the property? Therefore, to suggest that it is possible, even after disposing of assets, still to maintain the level and quality of planning which is now possible is to fly in the face of the facts.

Mr. Miller

The hon. Gentleman's understanding goes a great deal deeper than he tries to pretend. If he is suggesting that developments cannot be controlled if they are not in the public domain in the new towns, that is a proposition which even on his own second examination will not stand up for a moment.

In discussing the management of new town assets I wish to move on to refer especially to a matter which has been raised by several hon. Members with new town constituencies—the failure of any Government so far in their capital expenditure to provide for health facilities to match the growing populations. In my own case, it is exceedingly serious that there is no hospital in Redditch. A hospital has been in the public programme since 1962, but there is still no realistic prospect of its being built. In the meantime, in the cottage hospital, which is available, there is no casualty service after hours or over weekends in a manufacturing centre.

This is a matter which I raised with the Department of Health and Social Security when I first came to the House, and I have been trying ever since to impress it upon the Department of the Environment in various debates. I understand that there was a joint official working party set up to examine whether something could be done about this, but still nothing seems to have transpired. I hope that the Minister will be able to make some reference to this very serious matter before the conclusion of today's debate. Although other capital facilities, amenities, infrastructure, roads and schools are provided, there is still no apparent means of dovetailing in the necessary medical provision.

I want also to echo the fears expressed already on behalf of the receiving authorities of the assets to be transferred on the winding up of the development corporations, about the assistance to be made available to them to meet disparities in rents and, in particular, the burden of interest charges. This was a matter discussed when we debated the New Towns (Amendment) Bill. With the creation of continuing higher-valued assets, the increase in the loan charge and interest burden is very considerable, and there is a real apprehension amongst receiving authorities that they will be in difficulty in meeting them.

This problem is emphasised and accentuated in new towns in rural constituencies—the shire counties—by the reduction in the rate support grant. We have the ludicrous situation where our population is expanding and schools especially are very hard pressed but where the rate support grant has been cut. The education provision in the county as a whole has had to be cut, although the school population is expanding. The only way that it has been possible to meet even the bare statutory commitment is to deprive the more rural areas of the county. This is becoming a real problem.

I hope that the Minister will not go away with the thought that there is only urban deprivation. There is real rural deprivation in terms of transport, schooling and other social facilities. This problem is accentuated in our case by the the cuts in the rate support grant, despite the presence of an expanding new town and an expanding population, with its call on facilities. Those facilities can be stretched severely in the case of the elderly and the deprived. I should not like the Minister to imagine—it seems to be a sort of blanket concept in his Department—that new towns do not have elderly or disabled persons or single-parent families.

I wish that he had been with me at some of the Jubilee celebrations in my new town. He would have met a great many elderly and disabled people and a considerable number of one-parent families, and he might have been told of the real difficulties new town communities experience in providing services. For example, only recently has it been possible to extend the meals-on-wheels service into the new town area. Many elderly people lead very lonely and deprived lives, with inadequate, expensive transport, and very few community facilities of which they can take advantage.

New town blues is a real phenomenon. The community health council recently has been studying the problem of alcoholism, which is one of the unfortunate consequences of new town deprivation. I share the view of the hon. Member for Basildon that new towns should not be regarded as fortunate and blessed in all respects. They suffer from real social problems.

I shall be joining my right hon. and hon. Friends in voting against this Bill because—apart from the need to maintain public assets actively—of the continuing failure to do anything about the necessary co-provision of medical facilities; the continued failure to appoint members to the board of the Redditch Development Corporation to fill posts which, apparently, have been kept vacant for political reasons for an excessively long time, despite the need to provide guidance and experience in the handover of the assets to the local authorities in what is now a very short-time scale; the uncertainty about the relief which will be available to the local authorities on the handover of the housing assets; and the uncertainties in the minds of the staff about their future—all of which are far from being resolved.

5.59 p.m.

Mr. George Rodgers (Chorley)

The New Towns Bill enables us to discuss afresh the situation that has arisen from the changed position facing new towns in the light of the observations made today by my hon. Friends and the recent decision by my right hon. Friend the Secretary of State to restrict the immediate advance of the new towns programme.

I say at once that in the Central Lancashire New Town, which is a development of enormous interest to people in my constituency, there is great relief that the long period of waiting and uncertainty is ended, and a general welcome has been given to the revised scheme.

The Central Lancashire New Town— it is a very cumbersome title, and I hope that the Department will come up with another name for the project—remains the focus for industrial and economic growth and a spearhead for urban renewal. The process of revitalisation is essential for Lancashire and the whole of the North-West Region. Therefore, the project continues to have the support of all the local authorities in the immediate vicinity. Chorley, South Ribble, Preston and the Lancashire County Council are all anxious to see the development corporation press ahead by building on the foundations that have already been laid.

A document issued very recently after consultation with the development corporation and with the agreement of all parties gave full approval to the revised scheme. This intends that there should be an induced intake of 23,000 on the present population of 247,000, and, together with natural growth in the area, this will give a population of 285,000 in the mid-1980s. There is considerable satisfaction that the capacity of the land use allocation endorsed by the Secretary of State can well accommodate the needs of the area, reflecting this revised population.

Somehow the fallacy lingers that the Central Lancashire New Town is based on a requirement for overspill. This is simply not the case, although it is widely believed both in Merseyside and Manchester. In fact, the new town attracts a greater number from the South-East than it does from Merseyside and the development is performing its acknowledged role in attracting people from all parts of the country.

We must accept that people who are seeking a new environment and job opportunities cannot be caged or contained in desolate areas. If the new towns offer an opportunity for prosperity and brighter horizons we should accept that people have the entitlement to move into these new areas. It is folly to deny them the opportunitiy for a better life.

The changed pattern of the Central Lancashire New Town enables variations to be introduced and despite the reduced scale of the programme the concept remains vast, in that it embraces three boroughs—those of Chorley, South Ribble and Preston.

I sound a note of warning. Unless some of the saving envisaged by the diminished nature of the development is directed towards the renewal and strengthening of the old inner cores within the existing boroughs, the whole exercise will be placed in jeopardy. It is essential, too, that the development corporation should concentrate to a much greater extent than previously on the relocation of existing industries rather than devote its attention to attracting new industries.

There is a positive welcome for the Secretary of State's decision on the corporation's involvement in urban refurbishing. With the support of a little of the financial saving made possible by the curtailment of the original programme, a real impact can be made on the problem of decaying areas on the fringe of the new town development. The changed circumstances will allow a partnership between the local authorities and the development corporation to be brought about with considerable speed. There is room for much greater co-operation on housing construction and allocation, land planning and usage, and transportation.

Since the early days of the new towns there has been a great improvement in the relationship between the local authorities and the towns already existing in the designated areas. For too long the new town corporations appeared to be aloof and almost isolated from the locally elected bodies. Happily, this situation has been largely remedied, and the better the co-operation the more successful the new town enterprise. Indeed, it would be absolute folly to neglect or ignore the knowledge and know-how available in the existing community.

I conclude by declaring my faith and optimism in the Central Lancashire New Town and in the overall concept of new towns generally. This concept has proved a post-war success story in the United Kingdom. With a few exceptions the new towns have created good living conditions and prosperity. They have proved a sound and splendid investment. I accept that there is room for improvement, but I am uneasy about the attitude of Conservative Members. Apparently they intend to vote against the Bill tonight— there is no confusion about that. The confusion arises over their motives and their purpose. I do not find the reasons that have been put forward very satisfactory.

Of course there is room for improvement in the scheme of things, but it is essential that the vision and boldness on which the programme was founded should not be allowed to wither because of current economic difficulties. Much can be accomplished, at little cost, if the democratic principle is encouraged and those who serve the existing community are invited to participate in the development of the new town rather than merely witness its progress.

Central Lancashire New Town will make a substantial contribution to the economic well-being of a deprived region and it will enhance the quality of the lives of people who have long been at a disadvantage when their lot is compared with that of those living in more fortunate regions. The Bill before us will assist in securing these worthy aims, and I support it.

6.7 p.m.

Mr. Timothy Raison (Aylesbury)

I was interested to hear the comments by the hon. Member for Chorley (Mr. Rodgers) about the Central Lancashire New Town. I spent a day there last year, and I came away with the feeling that the Government have to face a very difficult problem over this new town. In surrounding parts of Lancashire there is a good deal of opposition to the continuance of the new town. My hon. Friend the Member for Ashford (Mr. Speed) talked about the case for putting the investment into areas such as Liverpool, and North-East Lancashire where people in the old cotton towns have lost their traditional livelihood and have pretty crummy surroundings, and can do with the money that is going to Central Lancashire. I believe that some hon. Members on both sides of the House are not all that enthusiastic about this new town development at the end of the day.

However, I am inclined to think that the Secretary of State is right. Obviously the Central Lancashire New Town has economic potential which does not attach to other contenders for the money in that part of the world. Also, if Central Lancashire does not get the money there is no guarantee that it will go to North-East Lancashire or Merseyside instead. I have no doubt that the Treasury would find ways of disposing of it very satisfactorily.

I do not advocate spending money for the sake of it, but it has always been inherent in the Central Lancashire case that it is good to put money into areas where it will pay off. The whole essence of this is that Central Lancashire is a potential growth area. I am more worried about the espousement of various projects in inner city areas and I wonder whether we are now using money spread across the country to prop up decaying areas at the expense of those areas that have a capacity to grow.

Central Lancashire is sited very well in terms of communication and transport— much better than other places in Lancashire.

Mr. Eddie Loyden (Liverpool, Garston)

When the hon. Member for Ayles-bury (Mr. Raison) refers to decaying parts of the region I take it from his previous comments that he means Merseyside. Is he aware that Merseyside has lost a quarter of a million of its population? The city of Liverpool had to establish the wherewithal to provide education, health and other essential services for a major conurbation, and now these services are becoming under-used. This is having a direct effect on the people in the area. While we do not want to throw out the baby with the bath water in relation to new towns, the Government must recognises the balance in remedying the problem of places like Merseyside and continuing with the programme of new towns.

Mr. Raison

I am aware of all those facts and I do not think that I would dispute any of them, but one has to make difficult judgments: is it best to prop up areas which have declined for profound and hard-to-dispose-of economic reasons, or to pick out those areas with growth potential and put money into them? There is a risk in pouring money into Merseyside because, although one may produce some kind of temporary alleviation, a certain number of jobs and better conditions of life for people whose conditions are bad, one will weaken the structure of the economy overall.

One could put more resources into Merseyside and the London docklands by having a strong economy instead of diverting limited resources to areas where the return on investment, in harsh economic terms, will not be satisfactory. A vast problem underlies this argument, and I shall not seek to develop it now. I believe that the Minister is right to see the potential of the Central Lancashire New Town, and I am glad to see that it has not been chopped off.

In other respects I very much agree with what has been said by my hon. Friends. I believe that we are right to vote against the Government on this matter. I hope that the Government will consider the points made about hospital provision in new town areas, although I appreciate that this involves a different Department. My hon. Friend the Member for Buckingham (Mr. Benyon) represents Milton Keynes and knows the enormous problems of hospital provision caused by the creation of new towns. It is almost immoral of the Government suddenly to decide that it does not matter too much if there is over-provision of hospital facilities in London—as unquestionably there is—because that involves inner city areas, and because it is Government policy to support inner cities, when there is true hardship and under-provision of a grave nature in counties such as Buckinghamshire and Northamptonshire. I hope that the Minister will underline to his colleagues in the Department of Health and Social Security that there is great concern about these problems.

My hon. Friend the Member for Ash-ford and others were right to criticise the Secretary of State for his complete failure to say where the money is going. We are talking about a great deal of money—£500 million which, following a subsequent order, can rise to £1,000 million. I repeat that it is a vast amount of money. It is interesting to note that the money employed in the new town programme from 1947 to the present time amounted to £2,250 million. The Government are now asking the House to vote a further 1,000 million. Only two years ago the House passed legislation allowing the Government to have in their hands a similar large sum of money in this context. It is intolerable that the Government now come to the House asking for this enormous sum without explaining the purposes for which the money is needed. The Minister should tell the House how this money will be used. He should say why a reduction in the new town development programme has not produced anything resembling a comparable reduction in the amount of money that needs to be spent.

Several of my hon. Friends have made a powerful case about the effective use of new town assets. The Secretary of State said that he would think about the matter. It is much too late in the day for him to take that view. About a year ago, a number of my hon. Friends and I were engaged in the legislation involving the transfer of new town assets. We seized all opportunities to make the point that the transfer of assets should apply to commercial assets, and that they should be capable of being transferred or sold of to the private sector. The Secretary of State should not adopt the attitude, as he appeared to do, that this is a new idea that nobody has thought of before and that he would have to think about it. The idea has been floating around for a long time and was raised by many of my hon. Friends a year ago.

Mr. Hal Miller

The Secretary of State said that he was contemplating allowing the sale of such assets to local authorities. Will my hon. Friend comment on that aspect?

Mr. Raison

The right hon. Gentleman said that it might be reasonable to sell these assets to local authorities, just as housing assets are being sold. It is a bizarre argument to advance at a time when there is a desperate shortage of money in the hands of local government to finance anything. To encourage them to think that they might buy up town centres is ludicrous, especially in present economic circumstances. I can see no objection to allowing the Commission for the New Towns to sell off these town centres to would-be commercial buyers. I should qualify that my saying that I believe the right policy is not to say that the Commission has an absolute duty to sell off these properties, but that it has a duty to manage them commercially in the most effective possible way. It should be in a position to make a commercial judgment whether it is best to sell freeholds or to issue very long leaseholds. There are a number of arguments in the property and new town worlds as to the most appropriate use to be made of these assets. I do not wish them to do other than act in the most effective and business-like manner.

It makes no sense for the hon. Member for Pontypool (Mr. Abse) to talk about the planning considerations. As I understand it, he is probably happy to see leases that may run for 99 years or so and that inhibit planning changes, but the hon. Gentleman then wishes to put his foot down on the sale of freeholds. The truth is that this is a piece of outmoded dogma, which is part and parcel of the same philosophy that produced the ludicrous and disastrous Community Land Act, which has now become the object of so much ridicule. I should have thought that the Secretary of State for the Environment—who possesses less dogma than his right hon. Friend the Member for Deptford (Mr. Silkin), who was responsible for these matters at an earlier period and who was addicted to public ownership of land—may have the sense to see that there is a strong case for making the best use of these huge assets.

There is no doubt that the value of the commercial element in the new towns is enormous, so that we may get that money back and use it to alleviate the desperate problems that exist in London's docklands or anywhere else, or to reduce public expenditure. I hope that the Minister, in reply, will explain what the money is needed for, and will produce solid reasons why these assets should not be sold off— or, preferably, will give a positive indication that the Government will have a change of heart on this matter.

6.18 p.m.

Mr. Peter Hordern (Horsham and Crawley)

We have had a very interesting debate, as are all our debates on new towns. This debate is unusual, because on this occasion the Opposition intend to vote against the Second Reading of the Bill.

The reason is plain and important— namely, that the sums of money involved are very large indeed by any standards, even judged by the standards of this profligate Government. The fact that £1,000 million is to be added to the public sector borrowing requirement is very significant indeed. It would have been totally irresponsible for the Opposition to let the Bill go through without showing that we are consistent in our view that Government expenditure and borrowing should not rise by this amount unless very good reasons are adduced. So far, as my hon. Friend the Member for Aylesbury (Mr. Raison) said, not a single reason has been advanced.

It is as though these sums of money are to be voted for reasons which the Government will be pleased to bring forward at their convenience instead of at the convenience of the House. This will not do. The sums of money are so large that we could not possibly pass the Bill without a vote unless and until we obtain a clear explanation of why the money is required.

The hon. Member for Basildon (Mr. Moonman) was not right to suggest that the Opposition have any antipathy towards the new towns. I do not think that any such charge should be levied at my hon. Friends or at me. The hon. Member for Basildon has no monopoly of knowledge about new towns.

The progress of new towns is a matter of wide interest. As far as I am aware, no Conservative Government have ever suggested contracting the programme for new towns. The present Government have done that. My hon. Friend the Member for Aylesbury was correct in saying that the programme and the Secretary of State's announcement on new towns must be looked at carefully and and in the context of inner cities. We are now at an important phase—although it has been going on for years—because it is only recently, possibly only in the debate today, that the problem of inner cities in all its horror has been recognised by the Government. The two must be linked together. I do not mean by that that we are any less fervent in our appreciation of the rôle of new towns or their achievements in past years.

I am a representative of one of the older new towns, and possibly one of the most successful of all—Crawley New Town—because it has a high employment record and a good record of industrial and social achievement. It is worth looking at the problems of the new towns in the context of the problems of the inner cities and inner centres. The two must be looked at together, and those of us who represent new towns are perhaps best fitted to look at the problems of the inner cities because we know about our own successes.

I have said that we see no reason for the extraordinary sums of money included in the Bill and that we intend to vote against it on Second Reading because we have received no proper explanation. We are seeing the end of an era. This is the first time that the new towns programme has been cut by any Government, and it is being done by a Labour Government. It is no longer possible to build new towns as a solution to overcrowded conditions in large cities. My hon. Friend the Member for Buckingham (Mr. Benyon) talked about his own constituency and about Milton Keynes in particular. He said that it would be quite wrong to stunt one of the few success stories that the country has had—new towns—just because of the problems of inner cities.

I must put this point in passing. I have observed in my constituency in Crawley New Town that the firms that came there originally moved from London, and I am sure that any hon. Member representing a new town constituency could say the same. I doubt that those firms would have prospered as well in London as they have done in Crawley. The hon. Member for Liverpool, Garston (Mr. Loyden), who intervened, also made this point. I shall come to further evidence later. There has been a loss to the inner city areas when not only the population has moved out but industry has moved out too. That cannot be ignored.

It is right to look at the new towns in the context of the inner cities and all their problems—and those problems are formidable. They are not solved by encouraging people to move to new towns or by refusing to allow a firm to expand unless it moves to a development area. The problems certainly are not solved by the work of the Location of Offices Bureau. I hope that the Minister will say something about this state of affairs. What is the Location of Offices Bureau doing now? Is it inviting firms to leave London or to come back to it? The House has not been told of its present function and would be relieved to know about it. I dare say that the Location of Offices Bureau itself would be relieved to know.

What is the Government's strategy for both new towns and inner cities? I know that we have had a White Paper today, but the old concept of new towns is plain enough, and that is to relieve overcrowding in large and growing cities and to plant acorns from oak trees. Certainly in the first generation of new towns these acorns took root and grew. The new towns have made a contribution to exporting industry and to the people in the new communities. They have surely proved to be an outstanding success.

There is a chain of events in these affairs. When the economy is expanding and industry is growing, there is an impetus for expansion for which new towns are particularly suited, but when the economy as a whole is staggering, unemployment is rising and the population in the inner cities is declining, the growth of the new towns naturally comes into question.

The situation is far more serious than the Government have recognised so far, because when the population in major cities starts to decline seriously, as it has done in London and Liverpool, these problems become all the more pressing. Services continue to expand while those who can pay for them have departed. This has also happened in the United States and France, in New York and in Paris. In both those cities, firms were driven out by high rates and because better communications made their departure possible. This has been happening here for many years and its progress is seemingly inexorable. It is becoming more serious, particularly in London, where rates are going up steeply and people are moving out, not through planned departure but because they cannot afford the rates any more. That is also true of industry.

If we take London as an example, we now find a net loss of 100,000 people a year. The population has declined from 8 million to 7 million and the rate of unemployment in some areas of London is over 13 per cent. The situation is also serious in Birmingham. Large numbers of people have gone to Telford and Redditch, and unemployment in some parts of Birmingham is at the rate of 7.8 per cent. In Newcastle 23,000 jobs have been lost in 10 years and many of the best workers have gone to Washington New Town. Unemployment in Newcastle is 11 per cent. In Bristol the number of manufacturing jobs has fallen by 11 per cent.

In Liverpool there was a massive urban clearance in the 1960s. The Minister knows about this. Some 30,000 homes were bulldozed in 10 years and many people have moved, as I believe the hon. Member for Garston said in his intervention, to the new towns of Runcorn and Skelmersdale. It is not only big firms that have moved, but small businesses have done the same. They have taken with them some of the rate revenue. In 10 years the population declined from 850,000 to 560,000. In Manchester 82,000 houses have been demolished and scores of small businesses have gone. The population has fallen from 700,000 to 500,000 and the rate of unemployment in some parts of the city is 16 per cent.

These are massive problems in themselves, and in transferring responsibility from the Home Office to the Department of the Environment the Government have not done nearly enough to recognise the scale of the problems. Neither is it enough either simply to step up the funds available from £30 million to £125 million by 1979-80, especially when one takes into account the £57 million that has been taken from the Housing Fund. Ministries and money alone can solve nothing. All that can be said with certainty is that much money will be wasted unless great conurbations such as London and Liverpool are allowed to attract industry and business on the same terms as the development areas do and as the new towns originally did. I do not mean that the growth of new towns should be stunted but that their opportunities should be given to London and Liverpool also.

London has not declined simply because of the attraction of the new towns, but that the new towns have an attraction cannot be denied. Whole areas of London, such as the docklands, have gone out of business. The same is true of Newcastle, except that the industry affected there is shipbuilding and not the docks. It has declined because some firms have moved to development areas and new towns, but it is declining most of all because of the demise of small businesses in inner cities. This is true in London and Birmingham and, I should guess, in Liverpool and other cities.

There is nothing inevitable about this decline of small businesses. They can survive any normal competition, but they cannot survive high interest rates, high levels of direct taxation and constant Government interference. If the Government were really anxious to help these businesses, they would not bring forward a Bill such as this, which can only have the effect of increasing the borrowing requirement and interest rates far above what they would otherwise have been.

The Government's prescription, through the Bill, is likely to be a contributory cause to the disease. High interest rates are the greatest enemy of small businesses, and the situation is far more serious than the Government have acknowledged. Essentially, the problem is not how to deal with expansion and overcrowding, but how to deal with contraction and decay in industrial areas. These problems are not solved by moving people out of the declining urban areas into new towns. That results in life becoming even more intolerable for those who are left in the urban areas and forces them to move out as well.

Mr. Moonman

I understand the framework within which the hon. Gentleman is making his argument, but I hope he will point out that people do not leave inner cities solely for new towns We have to consider the expansion of suburbia. Many people moved into the Essex new towns, but not all came from East London.

Mr. Hordern

The hon. Gentleman was not here when I started my speech. I referred to some of the points that he made. Certainly not all the people who have moved out of inner cities have gone to new towns. It is generally accepted that only about 10 per cent, of them have done so. However, the new towns around London almost all started with large and successful industrial firms which originally came from London and a lot of people came with them. They acted as a magnet for work. It is the disappearance of these firms that causes the problems in inner city areas today.

In his statement on 5th April, the Secretary of State said that the population of England and Wales seemed likely to be only 51 million by 1990 instead of the 60 million that was forecast in the 1960s. He sought to meet the situation by reducing the populations of third-generation new towns by about 380,000. I suggest that there may be another reason for his decision—namely, the considerable cost of third-generation new towns. This is an important factor.

My figures come from the accounts prepared to the end of March 1976, and I imagine that the sums involved are higher and the rates of interest may be even more onerous now. The Central Lancashire New Town has received loans from the Secretary of State totalling £48 million at an average rate of interest of 13.9 per cent. Milton Keynes has borrowed £147 million at an average 12.3 per cent., Northampton has received £62 million at an average 12.3 per cent., Peterborough has received £88 million at an average 12.6 per cent., Telford has received £117 million at an average 11.3 per cent, and Warrington has received £55 million at an average 12.45 per cent. Taken together, housing and land account for about half of the total capital cost of these assets that, we understand, are to be handed over to the local authorities at what are bound to be a record high cost. This means that, unless extra taxpayers' money is provided, rents in these towns will be the highest in the country.

The more houses that are built, the more onerous the rents will become. The rate of interest paid by the Central Lancashire New Town is more than twice that paid by the Harlow Corporation. It is difficult to see the justification for this or why Harlow residents should subsidise tenants in Central Lancashire. As Harlow has been going for 30 years, I assume that its housing assets will be handed over to the council next year.

The hon. Member for Harlow (Mr. Newens), who is not here at the moment, asked whether it was Conservative policy that houses built by the Commission should be sold in places where there was a long waiting list. The answer is "Yes, most certainly". It is not the length of the waiting list that matters but the best method of getting more houses built, and if we get a higher contribution by selling to tenants than from rents it is much more sensible to sell.

Quite apart from any question of the size of the population, the high cost of these new towns would have acted as a severe restraint in due course and will do so. Therefore, this is a fitting time for a reappraisal of development strategy and of the future of the new towns.

The Government have not done anything like enough to recognise the desperate problems of London, Liverpool, Newcastle and Birmingham. It is no use spending money on a piecemeal basis. We need a substantial redevelopment of the London and Liverpool docklands. I am glad that my hon. Friend the Member for Northampton, South (Mr. Morris) made this point so ably in his speech. There should be a redevelopment corporation for the docklands in both cities. They have become increasingly derelict over the years and jobs have become increasingly difficult to find. That is the direction in which we should move—the resuscitation of our great cities.

The role of the New Towns Commission, which will be expanded by the handing over of commercial and industrial assets from the other corporations, should not be simply that of managers of some industrial and commercial trust. That is not what it was intended to do. It was intended to build new towns, and it still has a considerable task to perform in this area.

The problem of finance lies at the heart of the debate and it is one of great urgency. In our view, finance should come from the development corporations and the Commission's own resources—that is, from the sale of their industrial and commercial assets. There can be nothing sacrosanct about assets that were built on behalf of the community and should be used to the best purpose for the community. There can be nothing objectionable about the sale of these assets, especially as the buyers would be pension funds and insurance companies acting on behalf of the people through their savings. There could be no better way of selling the assets. The Government have sold the pass on this question by offering BP shares not just in this country but in the United States as well.

Mr. Abse

My constituents will be interested to learn whether the Conservatives are prepared to sell assets to the United States. Do they intend that the city centre of Cwmbran should be sold to the United States?

Mr. Hordern

The hon. Gentleman is always helpful, and never more so than on this occasion. It is not we who wish to sell assets to the United States; it is the Government. We have no intention of doing so. The Secretary of State has given the game away. He is not averse to selling the commercial and industrial assets, but he does not want the people who put them there to have them. He wants the local authorities to have them, although I cannot imagine how he can believe that the towns under the Commission could possibly have the resources to buy commercial and industrial assets. He should ask his advisers to show him the latest balance sheets of local authorities. They will show the impracticability of such a scheme. The right hon. Gentleman is concerned not with the principle but only with the fact that the people should not get these assets through pension funds and other means.

There is no particular merit in selling commercial and industrial assets as opposed to borrowing money, but there is a clear optimum benefit between borrowing money and the disposal of assets and their proper management. No industrial or commercial company would borrow on the expectation of future earnings of the industrial and commercial assets at these rates of interest.

I offer it, therefore, purely as a matter of judgment, which is what we on this side are concerned with, that it is much better to put those industrial and commercial assets to their best and proper use by selling them to the people and by using the money for expanding new towns or for expanding docklands than simply to keep them in some extraordinary industrial and commercial holding company for which they were never originally intended.

Therefore, whatever the figures may show, unless there is some change in the financing of new towns their future development must be in doubt. What would be tragic would be to stunt the development of new towns while allowing the old cities to continue to deteriorate.

Nothing that the Secretary of State has told us can allay our fear that he does not understand the gravity or urgency of the situation, and he is not prepared to use the assets of the new towns to proper effect. I therefore invite my right hon. and hon. Friends to vote against the Second Reading of the Bill, since we are being asked to allow the Government to borrow up to £1,000 million for reasons which they have made no attempt to explain and for purposes which in any event are totally unnecessary at this time.

6.41 p.m.

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

The debate has enabled hon. Members representing new towns, as well as others who are interested in new towns and the problems of inner cities, to range fairly widely over the whole area of policy which has been developed over relatively recent time.

I recall, for instance, that only last week the New Towns (Amendment Bill became law, and that at present housing transfers are taking place, or schemes are being prepared, in some 11 towns. I recall also that over the last few months my right hon. Friend has undertaken a considerable reappraisal of the new towns programme, and, in addition, the White Paper on the inner cities has been produced. No one, therefore, can accuse the Government of inactivity or lack of interest in the substantial issues that have been raised in the debate.

I imagine that many of the hon. Members who have taken part in the debate are aware that in the whole area of policy involving planning in the new towns and inner cities there are a number of fundamental questions which need to be asked in the light of population projections and the rest. Indeed, those questions have been asked in the debate.

I am glad to echo what has been said by hon. Members on both sides who have made clear that they do not believe that there is necessarily any opposition between the interests of new towns and the interests of inner cities. My hon. Friend the Member for Basildon (Mr. Moonman) spoke strongly on that point. I echo what has been said, because the suggestion has been put about by some—not, I am glad to say, in the House—that the main purpose behind my right hon. Friend's reappraisal was to find money for the inner cities from the new towns programme. I am quite sure, from what has been said in the debate and from the description which my right hon. Friend gave of what formed the reappraisal programme, that it is now fully understood in the House that the Government expect a continuing programme in new towns for some years to come.

Even though the population projections show a slowing down of growth, so that we are expecting to reach by 1991 a population not of 60 million but of 51 million, so that the demands will not be so great, nevertheless, as has been said, the amount of household formation which will take place during the years up to 1985 means that there will be a continuing need for homes.

My hon. Friend the Member for The Wrekin (Mr. Fowler) had certain suspicions about that but, in the light of the figures, the Government see a continuing need for a house-building programme in the six third-generation new towns in the light of the demand presented to us by the extent of household formation which will be taking place during the 1980s as a whole. The house building will need to go on during the next seven or eight years, and it is that, in part, for which the Bill is intended.

I have been asked by the hon. Members for Aylesbury (Mr. Raison) and for Horsham and Crawley (Mr. Hordern) to go into greater detail on the purposes to which the £1,000 million is likely to be devoted. The House knows that the new town development corporation spend their money on roads, on housing, on servicing industrial estates, on building factories and the rest. The Bill is designed to provide moneys to enable new town corporations to borrow money as and when they require it.

Our difficulty is that we do not know precisely when new town corporations will need to raise certain sums of money in order to continue their programme, and, for reasons which my right hon. Friend explained—the rise in interest rates and the fact that there has of late been considerable activity by new town corporations—the present borrowing limits will unfortunately run out a month or two earlier than we had expected. That has necessitated the Bill now before us.

I am surprised to hear that it is the Opposition's intention to vote against the Bill.

Mr. Raison

I wanted to ask the hon. Gentleman a question on the passage in his speech which he has just passed. Can he at least tell us how long the £500 million or £1,000 million will last?

Mr. Barnett

Not with absolute certainty. I should say about two years, but I cannot be certain how long it will last. It will depend upon the speed with which new town corporations are able to get on with their job. It will depend upon what the interest rate happens to be next year and the year after. There are unquantifiable factors, and I cannot give a precise answer to the hon. Gentleman's question. That is the difficulty we are in.

Mr. Raison

But this is important. The public expenditure projections must contain something about the rate of spending for this purpose.

Mr. Barnett

Indeed. If the hon. Gentleman is interested to have specific details about a new town, I shall certainly give him any information I can about the progremme which the town is planning and the speed with which it hopes to proceed, but the fundamental point I make is that there are variables, about which we cannot be absolutely certain at the moment, which may determine the speed at which money is being spent after a year or two.

As I say, I am surprised at the Opposition's intention to vote against the Bill. It is apparent from the debate that they have some ideas about raising finance by other methods. My right hon. Friend has explained, and we have explained in answer to Questions, that the Government are interested in the ideas which are being put forward by the Opposition and by others. However, whatever ideas they may have, I should at this point make clear to the Opposition the dangerous implications of their voting against the Bill. They ought to realise that whatever proposals they may have for raising money cannot be adopted in the next two years on the sort of scale which would remove the need for further provision under the existing arrangements.

My hon. Friend the Member for Harlow (Mr. Newens) said that we must bear in mind the serious effect upon the development corporations' staff if their contribution to the development of new towns were to be subject to the decisions of private investors. Such investment— in new town assets—may or may not be attractive to the new towns, and is so speculative a basis on which to work that it would be irresponsible to adopt it.

Mr. Speed

The Minister is suggesting that the House should vote £1,000 million over an unspecified period to be spent on something about which he cannot give us any details. He is asking us to take that on trust. We are in an economic crisis. What the Minister has just said reinforces me in the conviction that the House should throw out the Bill.

Mr. Barnett

This has been the practice of the new towns programme since it began. Both parties have indulged in it. The country is in economic crisis, but it would be in a far worse crisis if, through voting out the Bill, the House denied the new town corporations the money that they require to pursue their programmes.

The debate has been useful and well-informed in some respects. However, the hon. Member for Ashford (Mr. Speed) seemed to assume that if the Bill were rejected some simple way could be found of continuing to fund the new towns programme. By rejecting the Bill the House would vote to bring the new towns programme to a halt within a few months. That would be the direct consequence of the House throwing out the Bill on Second Reading.

The Opposition have every right to be interested in the Bill, but the Second Reading is hardly the occasion for discussing matters of detail. The House has procedures by which it can discuss details which individual hon. Members may wish to raise about new towns in their constituencies or which they know and have visited.

I turn now to the Opposition's proposals. As has been said by several hon. Members, there is a restraint on public expenditure. The idea that the Opposition have put forward certainly has its attractions in that context. My right hon. Friend has said that he is considering the idea. It is a new idea for the Opposition. They have never implemented it nor put it in their programme in previous years. Now they find there is an urgency to take it on board. Frankly, it is a new idea, which the Government must carefully consider. Although the idea may have merits, the House must bear in mind that we are discussing sound public investments. They are potentially very profitable public assets which are appreciating in value. The Commission has a duty to enhance their value. In the 15 years since it was established it has accumulated a substantial gross operating surplus, part of which has been paid into Exchequer funds for other programmes. It is important for hon. Members to bear that in mind, and to recognise that the case would have to be very convincing before we changed our present policy.

I cannot believe that the attitude which either my right hon. Friend or myself have taken on this issue is sufficient justification for the Opposition suddenly to decide that they are right to vote against the Bill and, as a consequence, endanger the future of the whole new towns programme.

I must now deal with issues raised by hon. Members from both sides of the House. First, I shall deal with the questions posed by my hon. Friend the Member for Pontypool (Mr. Abse). He knows that I am not responsible for new towns in Wales. A decision on the extension of designated areas will be announced by the Secretary of State for Wales in the near future. That decision will take into account the needs of Cwmbran as well as the needs of Wales. That is the only assurance that I can give my hon. Friend at the moment. I found his speech very interesting. He made a number of interesting comments.

The hon. Member for Buckingham (Mr. Benyon) spoke about Milton Keynes, the new town in his constituency. I was glad he said what he did about the complementary relationship which exists, and will continue to exist, between new towns and inner city areas. He asked me about the likely consequences of housing transfer when it takes place in Milton Keynes. The only answer that I can give him is that the business of housing transfer is well ahead in the future for Milton Keynes and Redditch and some other new towns. But the terms that we are working out now will not necessarily predetermine the terms that will affect second or third-generation new towns. The hon. Member was a member of the Committee that considered the New Towns (Amendment) Bill. We shall try to ensure that no undue burden falls upon the ratepayers of any district where transfer takes place. Hon. Members who represent constituencies in which first-generation new towns are situated will agree that we have behaved fairly and reasonably so far.

My hon. Friend the Member for The Wrekin talked about the statistical situation. I have tried to deal with that. He also suggested that one of the dangers is for Governments or public opinion generally to indulge in policy making by lurch. I cannot agree more about that danger but I hope that we are now avoiding it. Where there has been an unfortunate concurrence between the need to examine inner city policy and new town policy, some people have regarded that as implying an enormous lurch in one direction. I hope that the shape of my hon. Friend's statement on new towns and inner cities has demonstrated that there has been no sudden lurch of policy, and that we are continuing the new towns programme in a responsible fashion.

The hon. Member for Northampton, South (Mr. Morris) was particularly concerned about the problems of the disadvantaged and the elderly. He was worried about the burden that might be placed upon the social services and about the inadequacy of hospital provision. I am aware of complaints in a number of new towns about the inadequacy of hospital provision. All I can say is that I shall certainly examine that argument. I shall have discussions with Ministers to see what can be done in the hon. Member's area.

I am sorry that there will not be time for me to deal with other speeches hon. Members have made. This has been a useful debate. I hope that we have been able to assure the House of the need for the Bill, and that the details can be properly considered at the proper time and in the proper place.

Question put, That the Bill be now read a Second time: —

The House divided: Ayes 179, Noes 140.

Division No. 1511 AYES [7.00 p.m.
Abse, Leo Graham, Ted Pavitt, Laurie
Allaun, Frank Grant, George (Morpeth) Penhaligon, David
Anderson, Donald Grant, John (Islington C) Phipps, Dr Colin
Atkins, Ronald (Preston N) Grocott, Bruce Price, William (Rugby)
Atkinson, Norman Hamilton, James (Bothwell) Radice, Giles
Bagier, Gordon A. T. Hardy, Peter Reid, George
Bain, Mrs Margaret Harrison, Rt Hon Waller Robertson, John (Paisley)
Barnett, Guy (Greenwich) Hatton, Frank Robinson, Geoffrey
Barnett, Rt Hon Joel (Heywood Hayman, Mrs Helene Roderick, Caerwyn
Bates, Alf Heffer, Eric S. Rodgers, George (Chorley)
Beith, A. J. Henderson, Douglas Rooker, J. W.
Benn, Rt Hon Anthony Wedgwood Hoyle, Doug (Nelson) Rose, Paul B.
Bennett, Andrew (Stockport N) Hughes, Rt Hon C. (Anglesey) Ross, Stephen (Isle of Wight)
Blenkinsop, Arthur Hughes, Roy (Newport) Ross, Rt Hon W. (Kllmarnock)
Boyden, James (Bish Auck) Jeger, Mrs Lena Sandelson, Neville
Brown, Hugh D. (Provan) Jenkins, Hugh (Putney) Sedgemore, Brian
Brown, Robert C. (Newcastle W) John, Brynmor Sheldon, Rt Hon Robert
Buchanan, Richard Johnson, Walter (Derby S) Shore, Rt Hon Peter
Campbell, Ian Jones, Alec (Rhondda) Slllars, James
Canavan, Dennis Jones, Dan (Burnley) Silverman, Julius
Cant, R. B. Kerr, Russell Skinner, Dennis
Carson, John Kilroy-Silk, Robert Smith, Cyril (Rochdale)
Carter-Jones, Lewis Lamble, David Smith, John (N Lanarkshire)
Cartwright, John Lamborn, Harry Snape, Peter
Cocks, Rt Hon Michael (Bristol S) Lamond, James Spearing, Nigel
Cohen, Stanley Lee, John Spriggs, Leslie
Coleman, Donald Lestor, Miss Joan (Eton & Slough) Stallard, A. W.
Colquhoun, Ms Maureen Lewis, Arthur (Newham N) Steel, Rt Hon David
Conlan, Bernard Lewis, Ron (Carlisle) Stoddart, David
Cowans, Harry Loyden, Eddie Summerskill, Hon Dr Shirley
Cox, Thomas (Tooting) Luard, Evan Taylor, Mrs Ann (Bolton W)
Craigen, Jim (Maryhill) Lyons, Edward (Bradford W) Thomas, Dafydd (Merioneth)
Crawshaw, Richard Mabon, Rt Hon Dr J. Dickson Thomas, Ron (Bristol NW)
Crowther, Stan (Rotherham) McCartney, Hugh Thorne, Stan (Preston South)
Davidson, Arthur McDonald, Dr Oonagh Thorpe, Rt Hon Jeremy (N Devon)
Davies, Bryan (Enfield N) MacFarquhar, Roderick Tinn, James
Davies, Denzil (Llanell) MacKenzie, Rt Hon Gregor Tomney, Frank
Deakins, Eric Mackintosh, John P. Tuck, Raphael
Dean, Joseph (Leeds West) Maclennan, Robert Wainwright, Richard (Colne V)
Dempsey, James McMillan, Tom (Glasgow C) Walker, Terry (Kingswood)
Doig, Peter Madden, Max Watkins, David
Dormand, J. D. Magee, Bryan Watt, Hamish
Douglas-Mann, Bruce Marks, Kenneth Weetch, Ken
Duffy A. E. P. Marshall, Dr Edmund (Goole) Weitzman, David
Dunnett, Jack Meacher, Michael Wellbeloved, James
Edge Geoff Mendelson, John White, Frank R. (Bury)
English, Michael Mikardo, Ian White, James (Pollok)
Ennals, David Millan, Rt Hon Bruce Whitehead, Phillip
Evans, Fred (Caerphilly) Miller, Mrs Millie (llford N) Wigley, Dafydd
Evans, loan (Aberdare) Molloy, William Williams, Rt Hon Alan (Swansea W)
Fernyhough, Rt Hon E. Moonman, Eric Williams, Rt Hon Shirley (Hertford)
Fitch, Alan (Wigan) Morris, Rt Hon J. (Aberavon) Wilson, Gordon (Dundee E)
Fletcher, Ted (Darlington) Moyle, Roland Wise, Mrs Audrey
Foot, Rt Hon Michael Mulley, Rt Hon Frederick Woodall, Alec
Forrester, John O'Halloran, Michael Woof, Robert
Fowler, Gerald (The Wrekin) Orme, Rt Hon Stanley Wrigglesworth, Ian
Garrett, W. E. (Wallsend) Ovenden, John Young, David (Bolton E)
George, Bruce Padley, Waiter
Ginsburg, David Pardoe, John TELLERS FOR THE AYES:
Gould, Bryan Parker, John Mr. Joseph Harper and
Gourlay, Harry Parry, Robert Mr. Joseph Ashton.
Adley, Robert Brittan, Leon Cooke, Robert (Bristol W)
Arnold Tom Brooke, Peter Cope, John
Atkins, Rt Hon H. (Spelthorne) Brotherton, Michael Costain, A. P.
Bennett, Dr Reginald (Fareham) Brown, Sir Edward (Bath) Crowder, F. P.
Benyon W Buck, Antony Dean, Paul (N Somerset)
Berry, Hon Anthony Budgen, Nick Dodsworth, Geoffrey
Riff on John Bulmer, Esmond Drayson, Burnaby
Biggs-Davlson John Carlisle, Mark Eden, Rt Hon Sir John
Blaker, Peter Chalker, Mrs Lynda Elliott, Sir William
Body Richard Clark, Alan (Plymouth, Suttoft) Emery, Peter
Boscawen, Hon Robert Clarke, Kenneth (Rushcliffe) Eyre, Reginald
Bottomley, Peter Clegg, Walter Falrbalrn, Nicholas
Braine Sir Bernard Cockcroft, John Falrgrleve, Russell
Farr, John Lawson, Nigel Sainsbury, Tim
Fell, Anthony Le Merchant, Spencer Shaw, Giles (Pudsey)
Finsberg, Geoffrey Lester, Jim (Beeston) Shelton, William (Streatham)
Fookes, Miss Janet Luce, Richard Shepherd, Colin
Forman, Nigel McCrindle, Robert Silvester, Fred
Gardiner, George (Relgate) MacKay, Andrew James Sims, Roger
Gilmour, Rt Hon Sir Ian (Chesham) Mates, Michael Sinclair, Sir George
Glyn, Dr Alan Mather, Carol Skeet, T. H. H.
Goodhew, Victor Maude, Angus Smith, Dudley (Warwick)
Gow, Ian (Eastbourne) Maxwell-Hyslop, Robin Smith, Timothy John (Ashfield)
Gower, Sir Raymond (Barry) Meyer, Sir Anthony Speed, Keith
Grant, Anthony (Harrow C) Miller, Hal (Bromsgrove) Spicer, Michael (S Worcester)
Grieve, Percy Mills, Peter Stainton, Keith
Griffiths, Eldon Miscampbell, Norman Stanbrook, Ivor
Grist, Ian Moate, Roger Steen, Anthony (Wavertree)
Hall, Sir John Monro, Hector Stradling Thomas, J.
Hampson, Dr Keith Montgomery, Fergus Taylor, Teddy (Cathcart)
Hannam, John Moore, John (Croydon C) Thatcher, Rt Hon Margaret
Harvie Anderson, Rt Hon Miss Nelson, Anthony Thomas, Rt Hon P. (Hendon S)
Hodgson, Robin Neubert, Michael van Straubenzee, W. R.
Holland, Philip Newton, Tony Viggers, Peter
Hordern, Peter Page, John (Harrow West) Walder, David (Clitheroe)
Howe, Rt Hon Sir Geoffrey Page, Rt Hon R. Graham (Crosby) Walker, Rt Hon P. (Worcester)
Howell, David (Gulldford) Page, Richard (Workington) Warren, Kenneth
Hunt, David (Wirral) Percival, Ian Weatherill, Bernard
Hurd, Douglas Price, David (Eastleigh) Wells, John
Hutchison, Michael Clark Raison, Timothy Wiggin, Jerry
James, David Rathbone, Tim Winter ton, Nicholas
Jenkin, Rt Hon P. (Wanst'd&W'df'd) Rees, Peter (Dover & Deal) Wood, Rt Hon Richard
Jones, Arthur (Daventry) Renton, Tim (Mid-Sussex) Young, Sir G. (Ealing, Acton)
Kershaw, Anthony Rhodes James, R. Younger, Hon George
Kimball, Marcus Ridley, Hon Nicholas
King, Evelyn (South Dorset) Roberts, Michael (Cardiff NW) TELLERS FOR THE NOES:
Langford-Holt, Sir John Rossi, Hugh (Hornsey) Lord James Douglas-Hamilton and
Latham, Michael (Melton) Rost, Peter (SE Derbyshire) Mr. Peter Morrison.

Question accordingly agreed to.

Bill read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Coleman.]

Committee tomorrow.