HC Deb 20 June 1977 vol 933 cc1023-50

Considered in Committee; reported, without amendment.

10.20 p.m.

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

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

On Second Reading the Opposition suggested that the House was being asked to authorise an additional £1,000 million expenditure of public money without any proper explanation of how this money would be spent, and over what period. In fact, about three-quarters of the money is required to finance programmes covered by the recently published White Paper on the Government's expenditure plans, Cmnd. 6721.

These plans provide for an annual rate of investment in new towns over the next few years of about £300 million per year; over half of that would be for housing, the remainder for roads, water and sewerage, environmental expenditure and the building of shopping centres, offices, factories and the many other developments which go to make a town. These are firm plans, though as the White Paper made clear the later years are subject to review by Ministers in this year's Public Expenditure Survey. However, this money Bill is not seeking to raise the borrowing limit any further than would be required to finance the programme into the second half of the financial year 1979–80. The requirement is thus over a relatively short period of two to two and a half years and relates largely to expenditure which will arise from contracts let in 1977 and 1978.

In addition, the borrowing limit had to provide for about £100 miflion per year which we estimate will be needed to finance revenue deficits—largely in the second- and third-generation towns-caused by inability to meet interest charges out of rents at this early stage of the towns' development.

I want to deal with the suggestion that new town commercial and industrial assets are so valuable that in a very short time very large capital sums might be raised to fund other development in new towns or, indeed, elsewhere. Frankly, the assertion that disposal of those assets should become a significant, or, indeed, the only, instrument of funding policy is just not good enough. In the debate on Second Reading the hon. Member for Aylesbury (Mr. Raison) said: 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 businesslike manner".—[Official Report, 15th June 1977; Vol. 933, c. 448.] How right he was!

It is absolutely vital that the complexity of the background to the creation of the assets since the new town programme began is fully understood. The structure of the holdings in terms of the leasehold intrests which attach to them, the rates of return and the existence or otherwise of the opportunities of review of rentals have to be taken into account. A fundamental analysis of these interests would have to be undertaken so that a realistic assessment could be made not only of the likely market value of those assets which might be selected for disposal but also to form some assessment of the financial loss which might be incurred by premature disposal, and at the heart of the exercise is the identification of the precise kind of interest which might be disposed of, for there is little doubt that outright disposal of freeholds which are, for instance, subject to long leaseholds at low annual rentals without review clauses—which was certaily the acceptable thing in the early days of the new towns—could be an irresponsible short-term activity.

In the last 20 years attitudes towards the terms on which sub-interests have been arranged have changed. Between 1957 and 1961, 25- to 21-year periods for reviews of terms were usually adopted. By 1967 14-year review periods were being adopted, and over the last 10 years we have moved to review periods of seven to five years, which are now the custom. This fact alone must have a significant bearing on the proceeds likely to be obtained from a policy of disposals as apparently now advocated by the Conservative Party. I really wonder whether this is something it realises. The truth is that many very large-value increases are locked in for various periods, in some cases up to 70 years. If the value of the reversion were negligible there might be a case for selling the locked-in interest, but there may well be an equally strong case for holding assets to take advantage of a reversion which is in sight and calculable.

The assets we are talking about in the general category of commercial and industrial are factories, warehouses, service industries, shops, offices and ancillary town centre buildings. These exist in a number of locations built at different times which, as I said earlier, have changed over the years.

The Conservative Party has made the point that the Government should adopt a positive policy of capitalising on new town assets to provide funding for ongoing development. My right hon. Friend has indicated that he is considering the idea. He gave that indication before the debate on the Second Reading of the Bill. But I hope hon. Members will realise that the examination of the possibilities, the arguments for or against and the organisation and basis of a marketing exercise of great complexity would be an operation demanding the attention of the highest skills and a very real understanding of what is likely in the short term and what is at stake in the long term.

What is certain is that the analysis of the proposition and, if it were to be adopted, the establishment of a marketing strategy and organisation could not take place in a time scale which leads to a conclusion that the provision made in the present Bill is not required. It is against this background that we are considering the whole future of new town assets and the possibility of their revaluation.

I ought, too, to point out the legal position. There is no power in the New Towns Act 1965 for a development corporation to dispose of land except in the interest of securing the development of the new town in accordance with proposals approved by the Secretary of State. Thus, a development corporation realising some of its assete would have to apply the proceeds to further development in the same town.

In the absence of a positive arrangement whereby all sale proceeds were recovered by the Exchequer and specifically earmarked for further new town funding, as the law stands neither the commission nor development corporations could dispose of their assets for the purpose of utilising the proceeds for the benefit of other developing towns. New legislation would be required. In other words, whatever proceeds could be got from disposals would go to the Exchequer and would then have to be loaned out again to the newer towns. This emphasises again the need for the Bill now before the House.

Contained in the Opposition's case was the reference to Recommendations 10 and 11 of the Expenditure Committee's Report; namely, that new towns should be able to borrow other than from the National Loans Fund, and be allowed greater flexibility generally in their borrowing powers. No one to my knowledge has advanced any convincing argument why new town corporations should be made the exception to the general rule that public corporations in general borrow from the NLF.

Mr. Peter Hordern (Horsham and Crawley)

Surely that is not the case with the nationalised industries, which borrow very heavily directly themselves, and also the local authorities. Therefore, why should it extend solely to the public corporations?

Mr. Barnett

With respect, local authorities are in quite a different situation from new town corporations. They are independent bodies which operate independently financially, as the hon. Gentleman well knows, whereas the new town corporations are public bodies operating in a field where they are primarily interested in long-term finance. The hon. Gentleman should bear this very much in mind. It is in that sense that they are obviously appropriately provided for by the National Loans Fund. They will attract funds—this is the danger—which are already destined for the gilt-edged market.

The Opposition have not questioned the arguments contained in the Government's response to the report in Cmnd. 6616. The Government examined Recommendations 10 and 11 with great care but came to the conclusion, for the reasons given in that document, that it would not be in the national interest, or in the interests of the new towns themselves, to adopt them.

There is one area that we are looking at, and that is bridging finance. We hope to make some progress on this soon. In that respect new towns are looking for short-term finance. In general, any fair examination will show that new towns have done pretty well out of the NLF, and the fact is that they are usually borrowing to fund long-term investment.

Mr. Arthur Jones (Daventry)

There is great interest in the new towns being able to borrow in the open market rather than from the National Loans Fund. I do not think the Government have given a convincing answer, and I have studied carefully what has been said. Would that not be a means of securing the use of private resources in the new towns in addition to public funds?

Mr. Barnett

First and foremost, the new towns would be operating in precisely the field in which the gilt-edged market operates. Secondly—this is something the hon. Gentleman should bear in mind because it appears to have been ignored by the Opposition—there is the degree to which private finance is already involved in the new towns. One has only to remember the Milton Keynes shopping centre, which is another example of the way in which private finance has been secured in the new towns. Therefore, to say that private finance is not being put into the new towns does not give a true picture of the situation.

I must make clear to the House that the net effect of the House not passing this Bill—which appears to be the intention of the Opposition tonight—would probably be to bring the new towns programme to a grinding halt. It would create a great deal of uncertainty among investors and staff in the new town corporations and the people who live there.

The Joint Parliamentary Secretary to Ministry of Housing and Local Government, Mr. F. V. Corfield, introducing the Second Reading of the Conservative Government's 1964 New Towns Money Bill, said: In asking the House for more money we are not asking for a subsidy. On the contrary, we are asking for authority to continue a policy which has been proved to be sound."—[Official Report,0th January 1964; Vol. 687, c. 724.] I echo his views in supporting this Bill. Indeed, we are asking for money to fin- ance a programme which has already appeared and been approved, as part of the Government's expenditure plans.

I have great pleasure in commending the Bill to the House.

10.33 p.m.

Mr. Peter Hordern (Horsham and Crawley)

As the House will know, the Opposition voted against the Second Reading of this Bill, the principal reason being that we thought that the money involved—a borrowing of £1,000 million from the National Loans Fund—was a very large figure indeed.

In the Second Reading debate the Government made no attempt to defend the reason for borrowing such a large sum of money. I regret to say that nothing said by the Minister in his Third Reading speech has helped us. If this Bill is voted down tonight, the Government will have to bring in another Bill. The Minister said on Second Reading that the present sum of money will last until September or October. We should be satisfied if the Government were to come forward with a Bill seeking to borrow from the NLF a much smaller sum of money.

It is important to recognise how substantial this sum of money is and how inadequate are the reasons the Government have adduced for borrowing such a huge sum. A figure of £1,000 million, even by this feckless Government's standards, is still a very great deal of money. So far the new towns have taken 30 years to get through £2,250. Now the Government come forward to borrow £1,000 million which they believe will be spent in about two years. But when every other form of public expenditure is being closely examined, the Government must make out a very good case why such a large sum of money should be supplied to the new towns. They should make out a case—the Minister did not do so in his speech—for showing why moneys should be lent to new towns instead of allowing them to roll over their assets and use those assets as they are supposed to be used. If we accepted this enormous extra charge without any real explanation from the Government—and there has been none tonight—the Opposition would be failing in their duty. That is we shall vote against the Bill tonight.

We are told that the £1,000 million is supposed to run for two years; that is, £500 million a year. The Minister said that this was in accordance with the public expenditure White Paper. However, I should like to draw the Minister's attention to the financial statement, which shows that the increase in the size of the loan from the National Loans Fund to the new towns for 1977–78 was £403 million. The £1,000 million is supposed to run for two years, so that means that this year the loan will be £500 million and not £403 million. It appears that after a few months the loan to the new towns from the National Loans Fund this year will be larger than the amount that appeared in the financial statement.

Another thing that is worthy of note is that this is the only part of the public sector to which loans are increasing—other than the National Enterprise Board and the British National Oil Corporation. The loans to local authorities and to housing corporations have been cut. Only the new towns, the NEB and the BNOC are exempt from this process. The new towns are keeping strange company. The House will know that we think nothing of the NEB and the BNOC but that we are in favour of new towns. The point was made clearly on Second Reading that the Opposition bear absolutely no antipathy towards new towns at all. It is not the Conservative Party that has ever cut back the programme for the new towns. It is this Government, and they have done so by cutting back the prospective population for the third generation of new towns by 380,000. That, as was mentioned on Second Reading, will affect the prospects of industrial firms moving to those new towns. The Secretary of State said that the reason why the new towns have been cut back is that the population is likely to be only 51 million in 1990 and not 60 million. However, that is not the only reason. The other reason is the formidable cost of expansion for third-generation new towns, and the borrowing allowed in the Bill will simply make this worse.

Up to March 1976—the latest accounts available—these third-generation new towns had borrowed £517 million between them at an average rate each of over 12 per cent. I understand that all these new towns are expected to turn over their housing to the local authorities concerned. Tbeae local authorities—particularly Central Lancashire and Milton Keynes—had little or no existing stock of houses. Therefore, the houses are bound to command the highest rents in the country when they are handed over to the local authorities—and the largest rent rebates. It is interesting to note that the interest rate at which all these new towns borrowed capital from the Secretary of State for the Environment through the NFC was twice that of Harlow. Therefore, it cannot make sense to go on borrowing money indefinitely to build houses that nobody will be able to afford to rent.

It is also interesting that Harlow tenants are not allowed to buy their houses, while tenants in Milton Keynes or Central Lancashire are encouraged to do so. It has nothing to do with the length of the waiting list but is concerned with the cost of housing in those areas. What is the incentive for new firms to move to the new towns where the rents must be higher than anywhere else?

Mr. Stanley Newens (Harlow)

I am grateful to the hon. Gentleman for giving way in view of the fact that he has mentioned my constituency. Will he make clear why the people on the Harlow waiting list for rented accommodation—there is a considerable list—should be forced to wait longer? That would be the result of selling off houses. Will he give details of the way in which industrialists have been deterred from coming to Harlow because in most respects Harlow is a highly successful new town, as the hon. Gentleman will find if he examines its record?

Mr. Hordern

I am not saying that industrialists are deterred from going to Harlow. They are attracted to Harlow as they are to my own new town of Craw-ley. However, they are deterred from going to the third-generation new towns that are being cut back and are having to build at very great cost.

Our policy is plain; it is right to offer tenants the opportunity to buy their homes, first, because they want to buy and, secondly, because the money thereby released is much greater than what could be obtained from rents. The prospects of building more houses—whether in Harlow or anywhere else—must be much better.

Mr. Newens

What about the waiting lists?

Mr. Hordern

The waiting lists have nothing to do with it. The hon. Gentleman does not understand the basic economics of the matter. If the Government go on building houses only for rent, it is certain that the supply will dry up.

It is no wonder that the Government are keen that the corporations in the third-generation new towns should offer tenants the opporuntiy to buy their homes. Otherwise both rents and housing subsidies will go through the roof. Is it still Government policy that the housing assets of these new towns should be handed over to the local authorities? I assume that this is the position. Is it still Government policy that rents must be 50 per cent. of outgoings? I ask the Secretary of State about this in the previous debate. He mumbled and said that it was not Government policy. Let me remind him that the public expenditure White Paper said: In this year the percentage of costs borne by rents, after rebates, will stay at about 43 per cent. Thereafter it is assumed that the percentage will rise so as to exceed 50 per cent by the end of the period, so enabling savings of about £180 million a year to be made by 1978–79. Are the Government serious about making these savings? The IMF would like to know if they are not proposing to make such savings. Ministers made no attempt to answer the point in the previous debate.

I am pleased to see the Minister of State, Treasury on the Front Bench. He will recollect the Chief Secretary to the Treasury saying that the 50 per cent target for rents was "modest". No doubt the Minister of State, as an assiduous Treasury Minister, agrees.

If the Government are going to have to make sure that rents total 50 per cent of outgoings in third-generation new towns, the rents will not be less than £15 a week and might even be £18 a week. How many people will be able to afford such rents? What can be the sense of borrowing money from the taxpayer to build houses with the most expensive rents in the country—they are bound to rise faster in these new towns than anywhere else in the country—which no one can afford to pay?

Our first reason for voting against the Bill is that it offends against common sense. The second reason is that no one can say that the new towns should be the only priority in housing. The Secretary of State agreed with this view on Second Reading, but the Government are borrowing £1,000 million for new towns, compared with £129 million for inner cities by 1979–80.

London is losing jobs at the rate of 100,000 a year, Birmingham has lost jobs to Telford and Redditch, Newcastle has lost 23,000 jobs in the past 10 years, many of them to Washington; Liverpool has lost 300,000 people in the past 10 years, many of them to Runcorn and Skelmersdale; Manchester has lost 250,000 people. What sort of priority is that?

It would have been understandable if the Government were borrowing for the resuscitation of our great cities that are fast losing industry and people, but that is not the case. They are borrowing for new towns that are already full of commercial and industrial assests, assets that could be recycled either for dockland development or for a new generation of new towns. It is no answer for the Minister to say that fresh legislation would have to be introduced. The Government are not usually backward in introducing fresh legislation. It is only now that they cannot introduce it. That is because they cannot even get it through their own party, let alone the House. They could use the money by recycling the existing funds in the new towns corporations and the Commission for New Towns.

Why should the Commission be regarded as a holding company for industrial and commercial assets? That was never the purpose of the Commission. The purpose of the Commission and the corporations is to build new towns, to develop new assets, not to keep old ones and to collect rents from week to week. For some reason the Government consider the assets of the Commission to be sacrosanct. It amazes me that the hon. Gentleman put forward the argument that if the assets were sold that might have a serious effect on the gilt-edged market. What does he think is happening in respect of the sale of BP stock? That sale will raise £450 million. That is something that could otherwise have gone to gilts.

I see that the Minister of State, Treasury nods. He is right to do so. If it were said that the sum is even greater, that would extend the argument. I ask the Under-Secretary of State in future to take the advice of his hon. Friend the Minister of State, who will be able to fill him in on these matters. The hon. Gentleman should not suggest that that is a good reason for not selling new town assets.

It is curious that the one sector that is not allowed to buy new town assets includes pension funds and insurance companies. No, the private sector is not allowed to buy them. Those who save through their pension and insurance schemes are not allowed to do so. The only bodies that are allowed to buy them are local authorities. I do not know which local authorities will be in a position to buy these assets. Having looked at some of the accounts, I do not know of any new town local authority that can afford the price that should properly be asked.

The Under-Secretary of State and his right hon. Friend have suggested that local authorities should be expected to borrow money at 12½ per cent. to buy assets which, if they are properly valued, would give a return of 6 per cent. That is exactly what the fringe banks were doing some five years ago. That is the sort of action that commends itself to the Government. The only difference is that it takes them five years to wake up to a bad idea.

We are not against borrowing, but we are against borrowing at such a rate as to make it impossible for any return to be commensurate with the cost of borrowing. That is another reason for voting against the Bill. It is simply barmy economics. Nothing demonstrates that better than the most recent public expenditure White Paper.

We are told that £1,000 million will last two years. It has taken 30 years to spend just over £2,000 million, or just over twice as much. We are told that all this is to go to capital expenditure, such as housing and rates. I do not understand what has happened. No one seems to have told the Secretary of State that the new towns housing building programme was supposed to have been cut in the last public expenditure White Paper from £211 million in 1976–77 to £146 million this year and £143 million next year.

What is the £1,000 million that will be available to the new towns to be spent on? If it cannot be spent on investment such as building and housing, on what will it be spent? Clearly, the expansion in public expenditure will be much larger than the figure that appeared in the White Paper, which is of such concern to my right hon. and hon. Friends. It seems that cash limits do not operate in the housing sector.

Although all new town assets are supposed to rise from £78 million to £174 million in 1978–79, who will be allowed to buy them? Apparently only local authorities, which are already plunged in debt, and the tenants of the most expensive houses in the various new towns will be able to do so. How will the £174 million be got out of them? What the Government are doing is contrary to the public expenditure White Paper, against all common sense and something that this country cannot afford. That it why I ask my right hon. and hon. Friends to oppose the Third Reading of the Bill.

10.51 p.m.

Mr. Gerry Fowler (The Wrekin)

I shall be brief. I intended to speak on only one matter, but, having heard the hon. Member for Horsham and Crawley (Mr. Hordern), I now feel that I must briefly mention two other matters.

The hon. Gentleman suggested that rent levels must historically be very high in he third-generation new towns and must continue to be very high. The notion is that the third-generation new towns have small housing stocks, apart from new town housing. The hon. Gentleman has not done his homework. Telford new town, in my constituency, has in the ownership of the district council no fewer than 12,000 houses. How the hon. Gentleman can suggest that that is a small housing stock for a district with a population of only 113,000 is beyond my comprehension. I suggest that before he again speaks on this subject he should do his homework.

Mr. Hordern

Will the hon. Gentleman give the House the figures for Milton Keynes, where historically there is no large stock of houses? Indeed, there are no houses at all.

Mr. Fowler

The hon. Gentleman may be right. I was not talking about Milton Keynes. The hon. Gentleman referred to all the third-generation new towns. What he said was wrong, and that is the end of the matter.

The hon. Gentleman suggested that Birmingham was losing jobs to Redditch and Telford. Birmingham may have lost a few jobs to Telford and, for all I know, to Redditch—which is represented by one of his hon. Friends—but he knows as well as I do that the employment situation in Birmingham is scarcely related to the jobs lost to Telford and Redditch. Most of the jobs which have gone to Redditch and Telford would not have been in Birmingham in any event. That is certainly true of Telford. Therefore, it is again false to suggest that Birmingham is in some obscure way suffering because of job loss to two new towns in the West Midlands.

The major point on which I rose to speak relates originally to what the Minister said and to the gist of the speech made by the hon. Member for Horsham and Crawley. On Second Reading and again tonight the Opposition argued that we needed a policy of roll-over assets in the new towns. I can think of a variety of reasons why such a policy might be advanced. One—I believe this to be the true reason—is that the Opposition passionately believe, as we can see from their policy on the sale of council houses, that private ownership is always superior to public ownership and that we should sell public assets into private ownership because private ownership is virtuous.

The Opposition could, of course, adduce other reasons. There is a possible argument that, in our present economic circumstances, the only way to fund new town development is by selling assets and using the proceeds for such further development. I do not believe that for a moment. Nothing suggests that we have yet reached the point where the only way to continue to fund new town development is by the sale of existing assets.

Another interesting argument—this seemed to be the one that the Opposition were deploying tonight—is the extraordinary version of the false doctrine of the hypothecation of revenue. That is the view that we should sell what exists in the new towns and apply the proceeds therefrom further to develop them. That is a nonsense doctrine. If we sell the assets of new towns, there is no good reason why we should apply the proceeds resulting therefrom to the further development of new towns rather than to any other public purpose.

Mr. Hal Miller (Bromsgrove and Redditch)

That is a stupid argument.

Mr. Fowler

I hear "That is a stupid argument." Does the hon. Gentleman accept that we should go back to the 1930s doctrine of applying the proceeds of the road fund licence purely to the development of roads? We have rightly gone away from the hypothecation of revenue. It would be fatal to go back to that doctrine for the new towns. I and other hon. Members on this side of the House believe strongly that it is to the advantage of the community that we should allow these assets to increase in value in public ownership rather than to sell them off for a short-term gain and a long-term loss to the community. That is what the Opposition advocate and what can never be accepted by hon. Members on this side of the House.

10.56 p.m.

Mr. Hal Miller (Bromsgrove and Redditch)

I cannot follow the hon. Member for The Wrekin (Mr. Fowler), who developed many inconsistent arguments. He tried to establish the proposition that it was wrong to sell new town assets in order further to develop new towns. Why, therefore, is it right in his view to borrow? If it is right that the Government wish to develop new towns—and the hon. Member subscribes to that policy—why is it wrong to look at different sources of raising money for that purpose?

I turn to the purpose for which this huge sum of money is being spent. We have not had an adequate explanation from the Minister. I am grateful to him for alluding to various categories of expenditure but they all involved items of capital expenditure—infrastructure, roads, housing. He also included shopping centres. Why is that a necessary subject for expenditure by the Government? Even if one accepts his argument for a moment—which I do not—why is it not possible to raise other money to assist in the development of shopping centres?

My new town of Redditch has just had a session with estate agents from all over the country about the third phase of the Kingfisher shopping precinct and ways in which they can participate. Why should such a centre be a charge on public funds, particularly when funds are short? We are not approaching this matter from a doctrinaire point of view. We are trying to develop the new town and to find resources to do so. That is a common sense approach. I agree with what my hon. Friends have said on that subject. It is not adequate for the Government to concentrate on capital infrastructure expenditure alone. That is one reason why I am so keen to get other resources in on the development.

The Government have a huge social task in the new towns. I picked up the Secretary of State on Second Reading when he said that new towns were not taking their share of the afflicted in society. I checked with my own new town and find that in the last five years, of the 2,200 rented houses, 734, or over one-third, were rented to those in the Department's own five categories of need; namely, the unemployed, the retired, the unskilled, the disabled and the single-parent families. It is not correct to say that new towns are not taking their share of disadvantaged people.

Mr. Guy Barnett

I have before me the words of my right hon. Friend the Secretary of State. On Second Reading he said: 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 town to reinforce their efforts in this direction."—[Official Report, 15th June 1977; Vol. 933, c. 394.]

Mr. Miller

No, but there was a clear implication that more was expected of the new towns. I know that new towns are doing their best to take their share of disadvantaged people, but the Government have not given them the finance or the facilities for the purpose.

I do not want to rehearse again the argument about the rate support grant, but while that percentage that I mentioned of disadvantaged families have been taken into rented accommodation in Redditch, there has been no increase in the county council social services establishment in the town over that period. The means are not available, therefore, to deal with the problem imported into that town. Forty new lettings a week are being made at the moment. This is not just a question of the Government putting money into bricks and mortar. The services for which the people depend on the Government are services for the people—social services. The Government are falling down here, and that is why I shall join my hon. Friends in voting against the Bill.

11.1 p.m.

Mr. Stanley Newens (Harlow)

I have listened with some scepticism to the arguments of Conservative Members to justify their voting against the Bill. I cannot believe that Conservative Members who represent new towns are engaged in anything but a shallow political manoeuvre. If it is successful, they will deprive their own and other new towns of funds, thus bringing many projects to a standstill and producing redundancies and difficulties for all who live in new towns, including their own.

Mr. Hal Miller

Is the hon. Gentleman really insinuating that there should be no care in the Government's expenditure plans for deprived people, no provision for the social services in the new towns? That suggestion is not worthy of his record in the House.

Mr. Newens

Of course deprived people should be a prime concern of this Government, but I cannot see why that means that hon. Members opposite should vote against the Bill. If funds to any new town which they represent are cut, deprived people will suffer. Hon. Members would immediately blame the Government, and would then write, protest and lead deputations to get the Government to change that expenditure decision. One reason why politicians are regarded with such suspicion is that they say one thing and do another. It is obvious that Conservative Members do not mean what they say. Is it a worthy exercise to vote against the Bill when they would be the first to protest if funds were cut off?

Mr. Hordern

The money will last certainly until the end of this year, and if the Government brought forward a Bill to raise £300 million or £400 million, we should have no objection. What we object to is the raising of a large sum with no attempt properly to use the assets of the new towns.

Mr. Newens

It is ail very well for Conservatives to say that they would not object to a certain amount of money being proposed. But immediately they say that they are conceding my case. If this Bill is defeated tonight, the result will undoubtedly be to make it difficult for new towns that are in need of funds. The hon. Gentleman cannot get away from that by fallacious and specious arguments like those he has been advancing this evening.

The argument that the new towns should sell off assets is quite fallacious. If housing assets are sold, the most attractive houses, those on which most of the loan has been paid, would be sold off first. Furthermore, as Conservatives have argued, these houses would be sold at 20 per cent. discount. That means that no development corporation, local authority or new town commission could replace a housing unit that had been sold off for as little as it was sold.

Therefore, the loan debt and the economic rent on the new houses built in place of those sold would be higher. Therefore, as the older houses were sold off the prospect of rent increases would grow greater for the remaining tenants. To lament the high level of rents that the tenants are asked to pay—which was part of the argument of the hon. Member for Horsham (Mr. Hordern)—is to shed what amounts to crocodile tears.

Mr. Hordern

Will the hon. Member tell the House whether he is against the policy of selling new town houses to tenants in third-generation new towns?

Mr. Newens

The hon. Member dodges the point by attempting to shift his ground. There is no answer to my point from Opposition Members. But I shall answer the point which the hon. Member put. Regardless of what the Government say, I do not believe it is right to sell off properties which are available for rent as long as there are people who need houses to rent and cannot afford to buy. I would apply that policy both to third-generation new towns and to others.

Mr. Guy Barnett

In the light of what my hon. Friend the Member for Harlow (Mr. Newens) said earlier, what he has just said reflects Government policy very accurately.

Mr. Newens

I believe that that is the position. But I want to make my situation quite clear. In no circumstances will I agree that it is correct to sell off housing assets while there are people who cannot afford to buy a house and need to rent. It is totally wrong. It is deprived people with whom I am concerned, and with whom the Government are concerned in bringing this Bill before the House tonight.

In voting against the Bill, the Opposition will demonstrate the damaging character of their policies for new towns. I hope that they will go to their own electorates and proclaim as loudly as possible that they are prepared to cut off the funds necessary for developing these new towns. If they do, their own populations will see very clearly what a Conservative Government would mean for the people of the new towns. It is nonsense for the hon. Member for Horsham and Crawley to suggest that we should superimpose the situation in older city centres on to new towns. The Front Bench and Back Benches on this side are equally concerned about rundown city centres and new towns. The position adopted by the Opposition on Second Reading and to-night is absolutely hypocritical, and the House would do well to demonstrate how strongly it rejects it.

11.10 p.m.

Mr. Michael Morris (Northampton, South)

I hope that the hon. Member for Harlow (Mr. Newens) will stand in the centre of Harlow and explain to the 80 per cent. of occupiers who must remain rented for ever that that is his policy and Labour Party policy. I hope that he will tour the country telling the rest of the nation that that is the position.

Mr. Newens

Let me assure the hon. Gentleman that in Harlow there is a list of people who want houses to rent but there is no list of people wanting to buy houses. I am all in favour of those who want to buy being able to buy.

Mr. Morris

They all have to live outside Harlow if they want to buy—that is clear.

I am conscious that the House has had to listen to a housing debate that left much to be desired, so I shall not detain the House for long. The key fact is that there is disappointment on this side that what the Minister has called the Conservative new frontier of financial responsibility has been received quite so frostily by the Government. On Second Reading the Secretary of State said: 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."—[Official Report, 15th June 1977; Vol. 933, c. 392.] All that my hon. Friend the Member for Horsham and Crawley (Mr. Hordern) has said to the House on Second Reading and tonight is that it is the rôle of the House to question, to assess and to judge what is being proposed. The Minister could do better. I have heard him do better on many subjects than he has been able to do on this Bill. He has not said to the House "In the past two years we have achieved this and that. The reason the money has run out earlier than we expected is that we have done better than we planned." We have had no assessment. There has just been a statement of the overall situation.

We have had no forecast of how long the £1,000 million is to last. We are told that it will last two years but with no firm argument. I hope that in winding up the Minister will answer some of the financial questions posed by my hon Friend. If I heard the hon. Gentleman aright, he said that the money would be spent at the rate of £300 million a year. My hon. Friend checked in the White Paper and found a figure for housing of £143 million, which is less than 50 per cent. of the annual expenditure. The figures do not tie up. It behoves the House to question.

The hon. Member for Harlow may be able blandly to assume that £1,000 million can be just tossed aside because he—in Harlow—needs a little extra money. I am prepared to stand up and be counted in Northampton and have a debate with him any time he likes in Northampton about whether the money should be just voted like that or whether the House should question and probe. I know that the people of Northampton want to question where the money is going and over what period it will be spent.

I confess to some disappointment with the Government's response about the roll-over of assets. As I understand it, the hon. Gentleman says that the Government will look at the situation, that they will undertake an assessment, that it is a complicated one, that it requires some expertise. One hopes that the expertise is readily available. That was a disappointing response, albeit a small advance.

I am also slightly disappointed that we have had no response to the proposition about the pooling of costs of new town houses in relation to sale. That would meet one of the points raised by the hon. Member for Harlow. If we were allowed to pool the cost price of new town houses and sell on the basis of the pooled cost, it would overcome certain points that have been made in the House. I believe that in the short and medium term that is the only viable way forward for substantial sales of housing assets in the third-generation new towns with substantial numbers of houses to sell.

I return to the point that my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) made so clearly. It was again symptomatic that the Minister, in his catalogue of expenditures, mentioned housing, roads and shopping centres, but made no mention of health facilities. I do not wish to bore the Minister, but this is a real problem, and the sooner his Department adds health facilities to the list the sooner we shall have a total approach to the needs of the new towns.

Mr. Timothy Raison (Aylesbury)

This debate has not focused very much on one of the facts that the Minister revealed, that £100 million a year of the sum for which he is asking is revenue deficit. It has been assumed that the money is going in capital investment. That £100 million, if applied to the great health needs in my hon. Friend's area, my own county, Buckinghamshire, and many other places, could be far better spent. What we have heard from Labour Members has been absurd.

Mr. Morris

I am grateful to my hon. Friend, who shares my regional health authority, and who, like me, is very much aware of the problems.

Mr. Deputy Speaker (Mr. Oscar Murton)

Though the hour is late, the debate is growing even wider. We must stick to the question of new towns.

Mr. Morris

I am guided by you, Mr. Deputy Speaker, but it is difficult to have a new town without a health service, though I suppose that that is what we now have in Northampton.

Mr. Deputy Speaker

The hon. Gentleman did not understand me too well. Perhaps it was my fault. We must discuss only what is in the Bill.

Mr. Morris

What my hon. Friend the Member for Horsham and Crawley has persistently maintained is that £1,000 million is, in anybody's money, a great deal of money. It is the job of the House to scrutinise that expenditure. There are enough resources to last until certainly the autumn and probably the whiter. We should welcome the Government's coming back with a Bill containing a smaller figure and some substantiation of how long it will last and to what effect it will be put.

11.17 p.m.

Mr. Guy Barnett

The hon. Member for Horsham and Crawley (Mr. Hordern) and several other Conservative Members referred to the £1,000 million as a large sum. I explained in my speech—I wonder whether certain Conservative Members were listening—that that sum concerned that expenditure which has already been approved in the public expenditure White Paper and that this is part of on-going programmes for which contracts have been let.

Mr. Raison

I seem to remember that there were certain difficulties about the public expenditure White Paper. I am not sure that it was approved by the House. I seem to remember that the Government ran into certain trouble. Even if the White Paper was approved, which I recall it was not, it is not the programme by which Supply is granted to the Government. The public expenditure White Paper is simply a statement of intentions over the next few years. For Supply, the Government must ask the House specifically for money. It is a constitutional abuse, a complete misreading of the situation, to say that the White Paper has granted sums of money to the Government.

Mr. Barnett

I did not argue that it had granted sums of money to the Government. That is the purpose of the Bill. That is why a money Bill is being placed before the House. As Conservative Members have rightly argued, the Bill has provided occasions on which we have debated very fully, on Second Reading and Third Reading, the new towns programme. I have tried to help the House as far as I can with information that has been asked for.

The hon. Member for Northampton, South (Mr. Morris) mentioned the figure of £143 million. That is the housing figure for England only. The figure of £170 million is the figure for England, Wales and Scotland in the White Paper. That is what is covered by the Bill. As for the figure of £1,000 million that has been quoted, I made it clear that what we were talking about was capital expenditure at a rate of about £300 million a year. What the Government are asking the House for is not a subsidy and not a grant but the right for the National Loans Fund to lend money to the new towns corporations in the future in the light of their needs.

Mr. Hordern rose—Ȕ

Mr. Barnett

I shall not give way. I have given way a great deal this evening.

We have given as much information as it is reasonable to give, or as any previous Government have given, about the new towns programme. The House must accept that the Government have put forward their proposals in the public expenditure White Paper, and the individual towns—Ȕ

Mr. Hordem rose—Ȕ

Mr. Barnett

I shall not give way to the hon. Gentleman. I have listened to his speech, and I am now proposing—Ȕ

Mr. Hordern rose—Ȕ

Mr. Deputy Speaker

Order. If the Minister does not desire to give way, he cannot be pressed to do so.

Mr. Barnett

I am trying to reply to the speeches that have been made, and the hour is late, as you have said, Mr. Deputy Speaker. I am doing my best to help hon. Members who have spoken, and my task is not made easier by constant interruptions. I gave way generously when I opened the debate, and I am conscious that I speak again by permission of the House.

Mr. Hordern

The Minister said that the investment programme for the new towns will be £300 million in this year. He also said that the public expenditure White Paper figure was £170 million. He must, therefore, be saying that the new towns investment programme is almost double the public expenditure allowance for the purpose. That White Paper was produced only a few months ago. Are the Government now proposing to sanction twice as much investment in the new towns as appeared in the White Paper

Mr. Barnett

No. Clearly the hon. Gentleman has not been listening to me. When I mentioned the figure of £170 million, I was talking about housing alone. When I spoke of the £300 million, I was talking about office and factory developments and the other things which new towns need. We are talking about a capital expenditure on average of £300 million a year. The figure of £300 million appears in the capital expenditure proposals year by year, and on that basis, adding to it the revenue deficit of roughly £100 million a year, the total figure is made up.

I thought that I had already replied to the point about the length of time that this sum will last. The answer is that it will last between two and two and a half years. We cannot say precisely how long down to the last month, and it would be unwise for us to try to do so in the light of the factors, such as rates of interest, how fast the corporations will be able to get ahead with their tasks, and what the rate of inflation will be at the time. All these factors will inevitably determine the rate at which the new town corporations take up the tasks which we are laying on them.

The hon. Member for Horsham and Crawley repeated the argument about the apparent disparity between the large sum of money that we are making available to the new towns corporations and the money we are making available to the inner cities. He must learn not to compare unlike with unlike. To talk of the borrowing requirements of the corporations is one thing; to talk of the inner cities is another. A whole range of funds is avail- able to the inner cities, as my right hon. Friend has repeatedly made clear.

First—and I think that the Opposition support this—the rate support grant has been geared generously to help inner cities, which have many social problems, and the Government's main programmes have been redesigned to show that they regard the problems of the inner cities as major problems. The Chancellor of the Exchequer's recent proposals for the construction industry are an example of that policy, and the larger grant proposed to the urban programmes are a major part of the Government's policy designed to help inner cities. It is not fair, therefore, to compare the amount made available in this way to the inner cities, which are annual figures, with those for the new towns, which are on a basis, as I have said, of two to two and a half years. The inner city figure is also one that we hope to increase in future years as economic circumstances improve.

It is suggested that somehow the Government are opposed to the investment of funds from private sources in the new town corporations. That is not true, as I have explained. I made it clear that Milton Keynes city centre is dependent upon £23 million of investment by the Post Office pension fund. The hon. Member for Bromsgrove and Redditch (Mr. Miller) said that the same was true of his town. There is a limited quantity of pension funds available.

I explained that the Government are not rigidly opposed to the possibility of the sale of certain assets. What I tried to do, since the Opposition are obviously interested in this matter, was to be as helpful as I could to the Opposition in explaining some of the difficulties which might be involved in view of the length of leases which had been let in the early development of new towns and the difficulties which might be involved in protecting the national interest, while naturally considering carefully, as we are doing, the proposal that certain assets possibly could be sold. We are considering that possibility in the light of the Expenditure Committee's Report and the Opposition's suggestions.

Local authorities have a perfect right to have aspirations to own industrial and commercial assets, and we are considering that also, whatever the hon. Member for Horsham and Crawley may say. If we can find ways in which local authorities which have aspirations in that direction may become the owners of certain properties which are owned by new town corporations or by the New Towns Commission, we shall want to facilitate that.

A debate of this kind is of enormous value in airing issues which affect new towns, and I welcome the opportunity which this debate and the Second Reading debate have given us to debate new town matters in general. I wish that there were more such opportunities, and I agree heartily with the hon. Member for Ashford (Mr. Speed), who spoke on

Second Reading, about the need for plenty of opportunities to debate them. However, I cannot but comment on the total irresponsibility of the Opposition in voting against the Government on Second Reading—apparently they propose to do so again on Third Reading—because, were they to be successful, the consequence of their actions would be highly damaging to the new towns programme and to the degree of certainty that one wants to provide to the private interests in which they appear to be so interested.

Question put, That the Bill be now read the Third time.

The House divided: Ayes 146, Noes 118.

Division No. 155] AYES [11.28 p.m.
Archer, Rt Hon Peter Garrett, W. E. (Wallsend) Morris, Rt Hon J. (Aberavon)
Armstrong, Ernest George, Bruce Murray, Rt Hon Ronald King
Ashton, Joe Gilbert, Dr John Newens, Stanley
Atkins, Ronald (Preston N) Gould, Bryan Noble, Mike
Atkinson, Norman Grant, George (Morpeth) Ogden, Eric
Barnett, Guy (Greenwich) Grocott, Bruce Palmer, Arthur
Bates, Alf Hamilton, James (Bothwell) Park, George
Bean, R. E. Harrison, Rt Hon Walter Parry, Robert
Benn, Rt Hon Anthony Wedgwood Hatton, Frank Pavitt, Laurie
Bennett, Andrew (Stockport N) Hooley, Frank Penhaligon, David
Bishop, Rt Hon Edward Horam, John Prescott, John
Blenkinsop, Arthur Howell, Rt Hon D. (B'ham, Sm H) Roberts, Albert (Normanton)
Boyden, James (Bish Auck) Howells, Geraint (Cardigan) Robinson, Geoffrey
Callaghan, Jim (Middleton & P) Hoyle, Doug (Nelson) Roderick, Caerwyn
Canavan, Dennis Huckfield, Les Rodgers, George (Chorley)
Cartwright, John Hughes, Mark (Durham) Rooker, J. W.
Clemitson, Ivor Hughes, Robert (Aberdeen N) Rose, Paul B.
Cocks, Rt Hon Michael (Bristol S) Hughes, Roy (Newport) Ross, Stephen (Isle of Wight)
Cohen, Stanley Hunter, Adam Rowlands, Ted
Coleman, Donald Irving, Rt Hon S. (Dartford) Silkin, Rt Hon S. C. (Dulwich)
Colquhoun, Ms Maureen Jackson, Miss Margaret (Lincoln) Skinner, Dennis
Concannon, J. D. Jeger, Mrs Lena Small, William
Conian, Bernard John, Brynmor Smith, John (N Lanarkshire)
Cowans, Harry Johnson, James (Hull West) Snape, Peter
Cryer, Bob Jones, Barry (East Flint) Stallard, A. W.
Cunningham, G. (Islington S) Kerr, Russell Stott, Roger
Cunningham, Dr J. (Whiteh) Kilroy-Silk, Robert Swain, Thomas
Davidson, Arthur Lamborn, Harry Thomas, Dafydd (Merioneth)
Davies, Bryan (Enfield N) Lamond, James Thomas, Jeffrey (Abertillery)
Davis, Clinton (Hackney C) Latham, Arthur (Paddington) Thomas, Ron (Bristol NW)
Deakins, Eric Lestor, Mist Joan (Eton & Slough) Thorpe, Rt Hon Jeremy (N Devon)
Dean, Joseph (Leeds West) Loyden, Eddie Tinn, James
Dempsey, James Lyon, Alexander (York) Wainwright, Edwin (Dearne V)
Dormand, J. D. Lyons, Edward (Bradford W) Wainwright, Richard (Colne V)
Douglas-Wann, Bruce McCartney, Hugh Walker, Terry (Kingswood)
Duffy, A. E. P. McDonald, Dr Oonagh Ward, Michael
Dunnett, Jack McElhone, Frank Weetch, Ken
Dunwoody, Mrs Gwyneth MacFarquhar, Roderick Wellbeloved, James
Eadie, Alex MacKenzie, Rt Hon Gregor White, Frank R. (Bury)
Ellis, John (Brigg & Scun) McMillan, Tom (Glasgow C) Wigley, Dafydd
English, Michael Madden, Max Willey, Rt Hon Frederick
Ennals, David Mahon, Simon Williams, Rt Hon Alan (Swansea W)
Evans, Gwynfor (Carmarthen) Mallalieu, J. P. W Williams, Alan Lee (Hornch'ch)
Ewing, Harry (Stirling) Marks, Kenneth Wilson, Alexander (Hamilton)
Fernyhough, Rt Hon E. Maynard, Miss Joan Wise, Mrs Audrey
Flannery, Martin Mendelson, John Woodall, Alec
Fletcher, Ted (Darlington) Millan, Rt Hon Bruce Woof, Robert
Foot, Rt Hon Michael Miller, Dr M. S. (E Kilbride) TELLERS FOR THE AYES:
Fowler, Gerald (The Wrekin) Mitchell, Austin Vernon (Grimsby) Mr. Joseph Harper and
Freeson, Reginald Molloy, William Mr. Ted Graham.
NOES
Aitken, Jonathan Boscawen, Hon Robert Bulmer, Esmond
Atkins, Rt Hon H. (Spelthorne) Bottomley, Peter Burden, F. A.
Awdry, Daniel Boyson, Dr Rhodes (Brent) Butler, Adam (Bosworth)
Bell, Ronald Brooke, Peter Carlisle, Mark
Berry, Hon Anthony Brotherton, Michael Chalker, Mrs Lynda
Biffen, John Buck, Antony Clark, Alan (Plymouth, Sutton)
Clarke, Kenneth (Rushcliffe Lawson, Nigel Roberts, Michael (Cardiff NW)
Clegg, Walter Le Merchant, Spencer Roberts, Wyn (Conway)
Cooke, Robert (Bristol W) Lester, Jim (Beeston) Rossi, Hugh (Hornsey)
Cope, John McCrindle, Robert Sainsbury, Tim
Corrie, John MacKay, Andrew James Scott, Nicholas
Douglas-Hamilton, Lord James McNair-Wilson, M. (Newbury) Shelton, William (Streatham)
Drayson, Burnaby McNair-Wilson, p. (New Forest) Shepherd, Colin
Dykes, Hugh Marshall, Michael (Arundel) Shersby, Michael
Eden, Rt Hon Sir John Mates, Michael Silvester, Fred
Edwards, Nicholas (Pembroke) Mather, Carol Sims, Roger
Fairbairn, Nicholas Mawby, Ray Skeet, T. H. H.
Fisher, Sir Nigel Maxwell-Hyslop, Robin Smith, Timothy John (Ashfield)
Fowler, Norman (Sutton C'f'd) Meyer, Sir Anthony Spence, John
Gardner, Edward (S Fylde) Miller, Hal (Bromsgrove) Spicer, Jim (W Dorset)
Goodhart, Philip Monro, Hector Sproat, lain
Goodhew, Victor Montgomery, Fergus Stanbrook, Ivor
Gow, Ian (Eastbourne) Morris, Michael (Northampton S) Steen, Anthony (Wavertree)
Gower, Sir Raymond (Barry) Morrison, Charles (Devizes) Stokes, John
Grylis, Michael Neave, Airey Stradling Thomas, J.
Hannam, John Nelson, Anthony Taylor, Teddy (Cathcart)
Hastings, Stephen Neubert, Michael Tebbit, Norman
Hodgson, Robin Newton, Tony Temple-Morris, Peter
Hordern, Peter Page, Rt Hon R. Graham (Crosby) Thatcher, Rt Hon Margaret
Howell, Ralph (North Norfolk) Page, Richard (Workington) Townsend, Cyril D.
Hunt, David (Wirral) Pattie, Geoffrey van Straubenzee, W. R.
Hunt, John (Bromley) Percival, Ian Viggers, Peter
Hutchison, Michael Clark Prior, Rt Hon James Walder, David (Clitheroe)
Johnson Smith, G. (E Grinstead) Pym, Rt Hon Francis Weatherill, Bernard
Jopling, Michael Raison, Timothy Wells, John
Kaberry, Sir Donald Renton, Rt Hon Sir D. (Hunts) Winterton, Nicholas
Kimball, Marcus Renton, Tim (Mid-Sussex)
Kitson, Sir Timothy Rhodes James, R. TELLERS FOR THE NOES:
Lamont, Norman Rhys Williams, Sir Brandon Mr. Peter Morrison and
Latham, Michael (Melton) Ridley, Hon Nicholas Sir George Young.
Lawrence, Ivan Rippon, Rt Hon Geoffrey
Question accordingly agreed to.
Bill read the Third time and passed.