DECLARATION OF, AND CHANGES IN, INDUSTRIAL IMPROVEMENT AREAS

HC Deb 26 April 1978 vol 948 cc1398-454

1. '—(1) The provisions of the Schedule to this Act shall have effect as respects the procedure for declaring areas to be, and for making changes in, industrial improvement areas.
2. (2) In this Act "industrial improvement area", in relation to a designated district authority, means an area declared to be such an area by that authority.'—[Mr. Guy Barney.]

Brought up, and read the First time.

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

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

Mr. Speaker

With this we may discuss Government New Clause No. 2—Grants for converting or improving buildings—and the following amendments:

No. 7, in Clause 3, page 3, line 36, after section', insert Commercial and'.

No. 13, in page 4, line 13, after second 'of', insert 'Commercial or'.

No. 14, in page 4, line 14, after 'into', insert 'Commercial or'.

No. 18 in page 4, line 27, after 'created', insert 'or retained'.

No. 34, in Clause 12, page 8, line 33, at end insert '"Commercial" has the meaning given by Classes I, II and III of the Town and Country Planning (Use Classes) Order 1972'. No. 36, in page 9, line 1, leave out from 'building' to end of line 6 and insert 'means any building used for the purposes of manufacturing goods or providing services or of carrying out operations ancillary to this'. We may also discuss Government Amendments Nos. 3, 6, 8, 11, 12, 22, 44, 35, 39 and 42.

Mr. Barnett

With New Clauses Nos. 1 and 2 and the related group of amendments we are seeking to clarify the operation of Clause 3 by separating out the definition of an industrial improvement area and the two types of assistance that can be given in those areas. In addition, we are introducing a number of changes to the actual provisions. Some of these changes were pressed on us in Committee, and although we were unable to accept them then, we now consider that there are a number of useful improvements that can be made. As we discuss the various changes that we are putting forward, the House will appreciate that the work of the Committee was well worth while and that we learned a good deal from the arguments that were advanced from both sides of the Committee. We have taken full cognisance of the useful suggestions that were made.

This group, particularly Amendments Nos. 3 and 22, also provide for the powers in these clauses and throughout the Bill to be capable of exercise by county councils, as well as by district councils. This reinstates the provisions to this effect which were deleted in the Standing Committee.

It might be useful to the House if I describe briefly the purpose of each amendment.

Amendment No. 6 deletes subsection (1) from Clause 3 so that New Clause No. 1 can provide specifically for the declaration of industrial improvement areas by reference to the procedure in the Schedule. Amendments Nos. 11 and 12 delete the building grant provision from Clause 3 to pave the way for their replacement by New Clause No. 2. The remainder of the old Clause 3 will then deal only with the loans and grants for environmental works in industrial improvement areas.

Apart from these rearrangements, the only change to Clause 3 is to amend the wording in subsection (2) with Amendment No. 8. It seemed from the discussion in Committee that using the words the amenities of the area or of buildings in the area might give rise to some doubt. We are therefore seeking to replace that phrase with the simpler concept of the carrying out of works being of "benefit to the area". This brings Clause 3 into line with the other clauses in the Bill where the designated district authority in deciding whether to aid works must consider whether they will benefit the appropriate area. The same formula is also used in subsection (1) of the New Clause No. 2 and similar wording is used in the proposed amendment to the Schedule—Amendment No. 39.

The other changes of substance are in New Clause No. 2. Hon. Members will see that subsection (2) of the new clause refers to grants being given for works to industrial or commercial buildings. We had considerable discussion of this point in Committee and an amendment was carried to the definition of industrial building to include warehouses. We so long as the industrial improvement area is primarily concerned with industry—we deal with that point on Amendment No. 39—it is reasonable to provide for grants to be paid for works on any industrial or commercial building. This will cover offices, shops and service trades as well as manufacturing industry.

This goes somewhat wider than the amendment carried in Committee, but it emphasises our concern—which was expressed by the Secretary of State on Second Reading—that all forms of employment should be assisted and encouraged in these areas. The hon. Member for the Isle of Wight (Mr. Ross) has tabled amendments on the same lines. I hope that he will be satisfied by our amendments.

The second change that hon. Members will notice is the addition in subsection (3) of the new clause of the words "or preserved". The limit on the grant that can be paid is now related to the number of jobs that are "created or preserved" in the improved or converted building.

Again this is a point on which we were pressed by the Committee and the opinion was expressed that there was no need for such a grant limit at all. We think that it is right for there to be such a limit on the grant to avoid extensive subsidy to unnecessarily expensive projects. However, one of the main problems of inner city areas is that firms, particularly small firms, are often forced to close because of the difficulty of funding improved premises at a cost they can afford.

The grants provided under this clause will now be available to such firms which could, with assistance, survive if they improved their existing building. The grant will not simply act as an indiscriminate subsidy propping up failing firms, because the firms will still have to match the grant with their own investment.

I notice that Opposition Members have put down an amendment, Amendment No. 18, with a similar effect to this change, and I therefore hope that they will be able to support this Government amendment.

4.30 p.m.

There is one further, minor change in the new clause. By including in subsection (5) the wording "intended for use" we seek to ensure that grants will be available whatever the existing use of a building so long as it becomes an "industrial or commercial" building.

Amendment No. 35 makes consequential changes to the definitions in Clause 12.

Amendment No. 39 revises the wording of paragraph 1 of the schedule to reinstate the requirement that an industrial improvement area should be an area that is predominantly industrial, although in addition it provides that an area zoned for industry can also be made an Indus trial improvement area. We also reinstate here the requirement that one designated district authority should consult the other before declaring an industrial improvement area. This is consequential upon the restoration of the counties in Clause 1, achieved by Amendments Nos. 3 and 22.

In addition, perhaps I should refer to a minor consequential amendment, Amendment No. 44, which arises from the rearrangement of Clause 3. The order-making power relating to the limit of building grants is now in the new clause.

I need also to refer to Amendments Nos. 33 and 22, which make possible the exercise of the powers of these clauses and the powers throughout the Bill by county councils as well as district authorities. As members of the Committee will recall, we had an extensive debate on this subject. I emphasised then, as I do now, that our inner cities policy is founded on the principle of co-operation between different levels of government—central government, county authorities and the districts. Each has its part to play acording to its resources and statutory functions, although quite clearly on many matters the district will be in the lead. This co-operative approach, enabling concerted action to be taken to tackle inner city problems, finds its highest expression in the seven partnerships. But all inner areas need the same concerted approach. So it is completely against the spirit of co-operation to exclude the counties from the scope of the Bill.

I realise that concurrent powers have sometimes resulted in friction between authorities. But I believe that the clear need to take effective action in our inner city areas, and the co-operation that this implies, make it necessary and desirable for the powers in the Bill to be concurrent. I might add that we need flexibility in the Bill to take account of local needs. Circumstances vary across the country. In some areas county authorities have taken the lead in promoting industrial economic development and in others the districts have taken the lead. This amendment enables the Bill to cover either case. We also need the extra resources that counties can bring to the problems of inner areas.

On industrial improvement areas in particular, the procedure for their declaration requires one authority to consult the other before making the declaration. In the unlikely event of authorities failing to agree, the Secretary of State's power to negative the declaration of an area provides an opportunity for the dispute to be resolved.

We had an extensive discussion in Committee on the exact wording of this part of the Bill. It was suggested that it should read and the council of the county or region which includes that district". I gave an undertaking to examine the wording closely, and I have done so. I am satisfied that this wording does exactly what is wanted. The present amendment enables both tiers of local government independently to exercise the Bill's powers. It does not require them jointly to exercise the powers which the substitution of "and" for "or" would entail and it does not permit the Secretary of State to select only one tier for the exercise of the powers.

I am sorry to have gone on at such length. In these main amendments we seek to take notice of the representations that were made in Committee and elsewhere about clarifying the wording of provisions relating to industrial improvement areas as well as improving and extending the powers in various ways. I very much hope that they have the support of the House.

Mr. Michael Alison (Barkston Ash)

I begin by thanking the Minister for his kind and courteous reference to the Committee proceedings, and I congratulate him on ensuring that the fair words have also buttered the parsnips. He has produced some solid changes as a result of the Committee proceedings.

If the debates in Committee enlightened the Minister, as he said, I do not want to be unduly partisan in claiming that if he looks at the column inches of print in the Official Report he will discover that most of the speeches were made by my hon. Friends and myself. I am sorry that there was not one Liberal on the Committee to help us in this improving process. Perhaps the Liberals will be able to help us a little today.

I want to question one or two matters and to probe a little the provisions that the Minister has put forward. I start by concentrating on the reinstatement of the county, which is a very important matter. We had an interesting debate on it in Committee. The Opposition's decision to support the amendment of the hon. Member for Sheffield, Heeley (Mr. Hooley) to eliminate the county was based very much on the uncertainty we felt on studying the drafting of the clause and the meaning of "or" in the context. There was the question whether it meant "and" and so on.

The Minister has been kind enough to write to me and to other members of the Committee at some length, making the position crystal clear. But while reaffirming that we have no intention of resisting his attempt to reinstate the county, I ask the hon. Gentleman and the House to reflect a little on the real dilemma that we face.

In explaining to me and other members of the Committee why it was desirable that the county should have, as it were, collateral powers with the district, the Minister referred back to the form of words in the Local Government Act 1972, where the phrase "local authority" has a variety of applications, depending on the context in which it is used. But I think that it is also true to say that in that Act there are various schedules in which specific powers are allocated to specific local authorities, so that the interchangeability of the words "local authority" in that Act was rationalised by the fact that the specific local authorities had specified powers.

As I understand it, the difficulty here is that making the district council and the county council interchangeable activating authorities in the context of the Bill means that the county will be able to interfere and do things on its own initiative in an area which is normally the preserve of the district, an area in which, under the Local Government Act 1972, the district has designated, specified and exclusive powers. As a result of the way in which this Bill has been drafted, it will be possible for the county on its own initiative to make decisions affecting the local government district in which the district council has specific powers and in a sense to override it, duplicate it or take an initiative which is against its wishes.

There is a safeguard that the Minister has introduced in Amendment No. 39 which provides for consultation between designated authorities. The Minister has said himself that there is a fail-safe mechanism within the narrow context of the declaration of industrial improvement areas in that the Minister's sanction must be secured and his veto can be exercised. If there is a real clash the Minister can step in and resolve it.

I do not think that this is totally satisfactory. If he has to step in to make a judgment of Solomon in respect of competing claims whether to designate an industrial improvement area, difficulties will arise. The county may want to designate part of a district and a district, for its own very good reasons, may not want that designation.

For example, Leeds City Council may, for very good reasons, not want an industrial improvement area in part of the Leeds district. The council—quite legitimately—might want to do its own slum clearance and to reinstate the area in a different way from the inner urban area philosophy. On the other hand, the West Yorkshire County Council may want part of the Leeds district designated as an industrial improvement area because it wants to built up industry and commerce in that area. The result would be a straight clash of views, and the county view would in a sense, override that of the district council. If the Minister comes in as a sort of Solomon, he is bound to outrage one side or the other and obviously it is not very satisfactory that we should provide for this kind of operation.

Clause 2 is even worse. It says that a designated district authority may be satisfied with the acquisition by any person of land situated within the designated district or within the same county …". It may be that the district council in a designated area, for reasons best known to itself, does not want a particular development to take place in inner urban area terms. It may not want a particular individual or group of individuals to come into that district and acquire land. If this occurs, that person or group wanting to acquire the land will go to the county, and the county, without any obligation to consult, can give its full range of support to that outside body, under Clause 2. This can be against the wishes of the designated district council.

There is no provision in the clause for consultation. This is a hazard, because there is a real likelihood of the county stepping in and taking the initiative which the district council wants to resist. There is a further paradox here. Although the Minister is responsible for designating districts under Clause 1, it is actually possible under Clause 2 for a county to launch the whole Clause 2 process in a non-designated district. The clause says: the acquisition by any person of land situated within the designated district or within the same county …". If the Minister has not designated a particular district, because it is in the same county, the county can still go in and start Clause 2 operations in a non-designated district. This is a very curious situation in which the county can short-circuit the provisions of Clause 1.

4.45 p.m.

Mr. Hooley

In fact, there is precisely such a collision of view in South Yorkshire at present. The county, for good reasons, believes that it should attack the serious problems of dereliction and unemployment in the Dearne Valley. It is giving this very high priority. On the other hand, the Sheffield District Council, not unnaturally, takes a somewhat different view of the priorities. It thinks that its own inner urban area problems should be accorded priority. If the county and the district have concurrent powers it is clear that there will be very serious collisions about the order of priorities. The possibilities for the county to be obstructive, unco-operative and awkward are virtually infinite. This is the kind of danger which my amendment in Committee sought to avoid, but which the Government are trying to bring back again.

Mr. Alison

I understand the hon. Member's point in relation to Sheffield and South Yorkshire. Under the Clause 2 powers there cannot even be a clash because the county has full powers to override the district and go ahead and make facilities available to entrepreneurs. It can launch Clause 2 powers in a district adjoining the designated district of Sheffield if it wants to do so.

There is a dilemma here because the country has an important contribution to make and because of this we shall not resist the new clause. However, the Minister must reassure us that he has thought through the kind of problem to which the hon. Member for Heeley has referred. I hope that the Minister will consider the apparent looseness in Clause 2 and perhaps think about it again with a view to amending it in the House of Lords.

I move from the possible clash of interests to a couple of other points that I wish to make briefly on New Clause No. 2. We welcome the Minister's very helpful installation of the commercial dimension in the Bill. I am sure that this is right and I am grateful to him for listening to our arguments in Committee. I believe that this will make the Bill more powerful and effective.

I hope that the Minister will tell us how the scheme will operate in respect of New Clause No. 2. I draw his attention to the amounts of grant available here. The particular points are raised in Clause 3 (5)(a) and (b) where it says: The amount of a grant under subsection (4)(b) above shall not exceed—

1. (a) 50 per cent of the cost of carrying out the works; or
2. (b) £1,000, or such other amount as may be specified in an order made by the Secretary of State, for each job which, in the opinion of the authority, is likely to be created …"

I put a hypothetical case by way of an illustration. Suppose the conversion of a building was likely to cost about £500,000. That is not an unreasonable sum in respect of a derelict large, old building which needs conversion and modernisation. Suppose that about 100 jobs were likely to result from the conversion—either new jobs or the preservation of existing ones or a combination of the two. On the basis of £1,000 per job, the lesser of the two amounts—50 per cent. of the conversion cost, or £1,000 per job—is £100,000 for 100 jobs. That is a long way short of 50 per cent. of the cost of converting the building.

It may be that some better balance can be struck here. What is not quite clear is the number of new jobs created which are relevant. For example, are the jobs involved in the construction firm engaged in the business of converting the building relevant jobs? If that is not so, I fear that the lower figure is always likely to be the one that will be chosen. The value of the jobs created is almost certainly likely to fall a long way short. I fear, of the cost of converting some of these old buildings.

However, the Minister may be able to reassure us that he thinks that the figures are meant to be virtually interchangeable, so that one is not much of a loser by one or the other, and one gets about the same amount. I suspect, particularly if the jobs involved in the actual conversion process are discounted and one ends up only with consideration of new jobs or preserved jobs in a different kind of work, that there will not be enough incentive to get people to launch into a major conversion project.

Incidentally, will the Minister explain, in passing, why we are limiting ourselves to grants only in respect of this range of operations, the conversion, extension, improvement and so on, whereas for the amenities section it is to be grants and loans? It is a technical point. I do not quite remember from the Committee stage why we are limiting ourselves in this way.

I do not want to detain the House too long on points of detail, but I am afraid that it is inevitable when we are considering complicated new clauses and provisions. I should like, finally, to turn the Minister's attention to Amendment No. 39, just on a further point on the declaration of industrial improvement areas. It follows on from the change made in the new clause by which we have introduced the commercial dimension.

Why is it that, having introduced the commercial dimension in New Clause No. 2, we are going back to a form of words in respect of industrial improvement areas which seems, prima facie, once again to exclude the commercial dimension? We are confronted here with areas which would be predominantly industrial areas, as being those which can be susceptible to an industrial improvement area designation. But it is the heart of the argument about the commercial dimension that one may very well want to attract a general, mixed, balanced development of employment in a locality by majoring on commercial development, if that is relevant, or on industrial development—whichever is the most relevant to that locality.

It may be an inhibiting and limiting factor to say that one can carry out the commercial dimension, which is being brought forward in the new clause only in an industrial area. In a sense, that seems to be a contradiction in terms, because a lot of the commercial attraction of coming into a particular locality in a district such as Leeds, for example, might well be that one does not want necessarily to settle in a predominantly industrial area for the purposes of building one's new office blocks and so on, but one would rather like to develop one's office blocks adjacent to—not too far away from but not necessarily cheek by jowl with—new factories that are being erected simultaneously.

It is difficult to understand why the Minister has insisted on reintroducing the concept of the predominantly industrial feature of the industrial development area provisions of Clause 3 when he has also given us the commercial concession, as it were. I can see some clashes arising here, because the commercial folk may very well not want to try to move in on an industrial area. It may be exactly the reverse of the kind of environment that they are seeking to create—for example, to attract white-collar workers. In a city such as Sheffield, for example, which has long been trying to attract white-collar jobs, to make it a balanced industrial and commercial environment, I am not sure that it would necessarily be helpful to be landed with this rather limited designation, as supplied in the change to the schedule in Amendment No. 39.

Those are the queries to which I immediately give expression on behalf of the Opposition. They are mostly queries, but my hon. Friends may well have other points to raise, so perhaps the Minister could give us a considered view of all these matters.

Mrs. Barbara Castle (Blackburn)

I, too, welcome the changes set out in New Clause No. 2 and the extension of the provisions of the Bill to cover commercial buildings and the preservation of jobs and not merely the creation of them. But, of course, these extended provisions make designation even more valuable. That is why I am sorry that the Secretary of State is not present this afternoon to fulfil a promise that he made on Second Reading. In New Clauses Nos. 1 and 2 we are restating and slightly extending the basic provisions of the Bill with regard to the designation of areas and the declaration of industrial improvement areas. We are starting again, as it were.

On Second Reading on 9th February, my right hon. Friend told us about the decisions and the selections that he had already made, the seven partnership areas and 15 other areas already identified for treatment under clauses such as these. He went on to say: I envisage that a number of other districts with serious problems of urban decay will also be designated, and I intend to make a statement about this further selection of authorities during the later stages of the Bill's passage. Today we are on the remaining stages of the Bill. My right hon. Friend is not here. I have no doubt that he has much pressing work to do. But it means that we are not getting the further statement that we were promised before the Bill leaves this House at this stage of its parliamentary passage.

The more I have studied the Bill and what my right hon. Friend has said, and, indeed, what my hon. Friend the Under-Secretary said this afternoon, the more vividly clear it has become to me that other areas qualify for this kind of assistance on the kind of criteria that have been spelled out during the discussions on the Bill.

Having listened to my right hon. and hon. Friends, I might have imagined that the Bill was almost tailor-made for my own constituency from the criteria that have been laid down and that we are repeating in the new clauses. Blackburn is certainly predominantly an industrial area. It is an area which has, tragically, suffered economic decline, which has left it with intensified social problems and considerable areas of dereliction. There is a population imbalance. Its unemployment rate is above the national average. As I think all hon. Members know, it is the centre of considerable racial tension. Indeed, it has been the centre of the leadership of the National Party in its campaign, and the chairman of the National Party was one of my opponents as a parliamentary candidate at the last two General Elections.

The racial tension is intensified by the employment problems and environmental problems from which Blackburn is suffering. It is struggling against a depressing physical environment. That is why, as long ago as last February, I wrote to my right hon. Friend welcoming his willingness, as stated on Second Reading, to enlarge the number of authorities that he was prepared to announce as being designated, and asking him to realise that the problems of the inner urban areas are not confined to the large urban mass areas. The problems appear vividly in areas of smaller scale, which proportionately, have even greater urban problems.

Mr. Michael Morris (Northampton, South)

Is the right hon. Lady saying that the proportion of the problems in her constituency is greater than that of those in the centre of Liverpool?

5.0 p.m.

Mrs. Castle

No, I am not saying that. I am not trying to devalue the nature of the problems in Liverpool. I am saying that when my right hon. Friend on Second Reading said "I intend", he was not saying that he was merely considering. He said: I intend to make a further statement about this further selection of authorities".[Official Report, 9th February 1978; Vol. 943, c. 1694.] He was accepting the argument of some of us that in microcosm some of our constituencies have problems of almost equal intensity.

I give the hon. Member for Northampton, South (Mr. Morris) an example. In Blackburn we suffer from industrial dereliction in proportion to our population on a scale that is even greater than in some of the more dramatically derelict inner city areas. That is why I welcome the fact that my right hon. Friend realised that we are dealing not merely with one or two major cities but with a problem that is of the same sort as that in many other inner city areas.

In Blackburn we are left with the relics of the textile age. I cannot imagine any area that would be able to benefit more obviously, or would act more quickly as an industrial improvement area, than that part of my constituency where, lined up along the derelict side of a choked up canal, there are old mills that have fallen or are falling into decay. There are many examples to show that Blackburn has all the qualifications of an industrial improvement area.

In the post-war period my authority has done remarkable things to pull the town up by its own bootstraps. Thanks to the Labour Government, we have had the advantage of being scheduled as an intermediate area. We have not been scheduled as a development area. I recognise that Merseyside would have prior claims over Blackburn in that respect. However, this Bill deals with inner urban areas struggling with the problems of dereliction and needing industrial revitalisation and environmental revitalisation, and that describes my constituency. We have done a great deal, and we are yearning to do a great deal more, given the powers, the opportunities and a little extra help. What we have achieved shows how much more we could achieve. We in Blackburn believe that there may be inner city areas that have already been scheduled and given powers but may not use them, whereas, Heaven knows, we would.

Will my hon. Friend the Under-Secretary of State convey to his right hon. Friend my regret that he has not been able to be in the Chamber this afternoon to announce the additional list? I shall forgive him, provided that he is actively and sympathetically considering adding Blackburn to the list.

Mr. Stephen Ross

I add my welcome to the new clause and the Government's conversion to my idea of including commercial buildings within the Bill's provisions. I referred to the matter on Second Reading and I have made personal representations to the Secretary of State. However, I congratulate those hon. Members who pushed the matter in Committee. If that had the effect that has been described this afternoon, it is to be welcomed.

The hon. Member for Barkston Ash (Mr. Alison) made some relevant comments about the contents of the clause. I have some queries to put to the Minister. When tabling my amendment I had in mind the mixed-use type of property that abounds in inner parts of London and elsewhere. In talking about London, let us take Covent Garden as an example. That is an area where a scheme to demolish a few acres has, thank goodness, been rescinded and where a fair amount of renevotion is taking place. It is to be hoped that in that area we shall be able to bring back some of the small businesses that flourished in years gone by. I recognise that some of them have never left the area.

I presented to the Secretary of State a case prepared by a local housing association that pointed out how it could create living accommodation over the many shops in the Covent Garden area by getting help from the housing corporation or from local authorities. It came unstuck when it tried to deal with the commercial sector, namely, the shops.

As hon. Members will know full well, that type of property does not lend itself immediately and appealing to insurance companies and pension funds. Those organisations always look for the first-class sort of investment. They regard secondary and tertiary locations as not being the type of investments for which they are looking. Very often such schemes are too small in size. Further, small businesses are often regarded as not being good covenants. Often small businesses are not prepared to enter into the pre-let arrangements that multiple companies find acceptable. The problem has been to provide help for those whom everybody would like to see succeed by getting additional finance to allow them to purchase. There has also been difficulty in dealing with the commercial side of the operation. There is help available on the residential side but not on the commercial side. I believe that the clause will meet that position.

The Minister has said that the clause will include shops. The hon. Member for Barkston Ash quoted some figures, and I have seen schemes that are in a fairly forward stage. In Covent Garden there are schemes ranging from £65,000 to about £500,000. If the money is to be restricted to the number of jobs that are created, there will be difficulties, but I take heart that in subsection (3)(b) there is reference to £1,000 per job created or such other amount as may be specified". We may visualise a service industry in that area doing a worthwhile job but not employing more than five or 10 people. If it is to be £1,000 per job created, £10,000 will not go very far in a scheme of anything up to £500,000.

I hope that the Minister will have more to say about that. Obviously, 50 per cent. of the cost of guaranteeing the work would be more than ample. It is probable that those concerned could get away with less and take a loan from one of the other sources that I have indicated, provided that matters are well under way with the initial grant.

If that can be explained, together with the point that was raised on Amendment No. 39, which seems to contradict the commercial definition, I think that the clause will meet the point that many of us have been making and will go a long way to bringing in parts of inner London, Birmingham and other cities where there are literally hundreds of empty shops in inner urban areas that could be put to some other use—for example, manufacturing or servicing.

Such premises could be used for the repairing of wireless sets. They could be put to a useful purpose, but there must be the finance available to obtain such premises, renovate them and enable them to be offered at rents that people can afford. The initial starting finance has not been available. I see the clause as meeting that very desirable need, but if it is to be restricted to the lower amount, I do not think that it will go far enough.

Mr. Eddie Loyden (Liverpool, Garston)

I did not have the privilege of serving on the Committee, but I have tried to follow what my hon. Friend the Under-Secretary of State and the hon. Member for Barkston Ash (Mr. Alison) said about New Clause No. 1. I welcome the moves that have been made in Committee and since to introduce industrial and commercial interests into the Bill. But I express some of the fears which have been advanced by the hon. Member for Barkston Ash about the conflicting interests and the problems which may emerge.

I do not want to argue the parochial attitude of Liverpool, because it is one of the cities involved in the inner area programme. Part of my constituency is also involved. There is a great deal of industrial decay and land left idle in my constituency because of the decline of industries in the area. There is also a need, because people desire to remain in the area, for a decanting system of housing. Looking at the possibilities of the twin interests pulling at the centre, I see conflicts arising and a certain amount of delay and argument occurring when those two interests are seen as not being complementary the one to the other.

We have to be cautious about allowing control of inner area policies and activities to extend into the more remote hands of the metropolitan county. The present agency arrangements could satisfactorily meet the interests of both the metropolitan county and district council. These arrangements have worked reasonably well when the county has acted as agent on behalf of the district or when the district has acted as agent on behalf of the county on the kind of work which requires collaboration. However, difficulties could occur if the interests of the county were in the commercial development of an area in which housing and so forth should have priority for available land.

Looking at the Bill as it has come from Committee, I think that to a large extent our expectations have been met. But I have one or two worries if the area of activity is to be extended. I should prefer to see the involvement of organisations which, in my locality, have already taken positive steps to involve themselves in thinking about and presenting the needs of the inner city areas in terms of industry and the refurbishing of the fabric of cities.

My right hon. Friend the Member for Blackburn (Mrs. Castle) referred to the designation of certain areas. I think that we should regard the inner area programme as being complementary to the other activities and designations which are taking place in industrial cities.

We see this measure not as an alternative to special development areas or to the other steps taken by the Government, but as complementary to deal with particular problems in some of our major industrial conurbations.

I hope that the Minister will pay due regard to the fears of people about widening activities, to the county and will consider what arrangements may be made for the district to be designated and for the county to act as an agent when required by the district. I think that would simplify the arrangements and overcome, to a large extent, the possibility of confrontation between the two authorities if there is no agreement on any particular project. I hope that the Minister will bear those matters in mind.

5.15 p.m.

Mr. Michael Morris

I think that the hon. Member for Liverpool, Garston (Mr. Loyden) made a particularly poignant contribution. I take the point that the solicitations from the right hon. Member for Blackburn (Mrs. Castle) may be valid, but I could probably make as strong a case for the derelict shoe factories in the centre of Northampton. However, that is not the problem that we face. The problem facing the nation is that some difficult inner city areas need the concentrated attention of the Government and Government money through the agency of local authorities. I think that the House would do well to concentrate its mind on that aspect and not to get deflected into the arguments of different constituencies.

I spoke on Second Reading, but I was not privileged to serve on the Committee. In a sense, I am somewhat disappointed at the large number of Government new clauses and amendments. We know that a number of detailed constultants' reports on inner city urban areas were prepared prior to publication of the White Paper. The new clauses and amendments seem to suggest that there was not the depth of thinking and preparation that there should have been. I suggest that this may lie at the door not of the Under-Secretary of State for the Environment, but of the Under-Secretary of State for Industry who, unfortunately, has departed from the Chamber.

Having said that, I welcome New Clause No. 2 and the addition of the word "commercial". I believe that the Under-Secretary of State for the Environment attended the initial meeting of the partnership area of Islington and Hackney. Therefore, he will know that unless "commercial" is added to that area, the whole concept will have no validity. If Islington and Hackney are to survive, they must survive as extensions of the City of London. It is in the general commercial concept—in terms of their office and quasi-office and craft context—that they are likely to revive as inner London boroughs. Therefore, the new clause is to be welcomed.

I think that the point made by my hon. Friend the Member for Barkston Ash (Mr. Alison) about the seemingly restrictive nature of AAA versus B should be taken on board by the Government and, if not this evening, at least in another place, thought about very seriously.

I should like to comment on two other amendments. First, Amendment No. 22, which deals with the county councils. I find myself, not for the first time, in agreement with the hon. Member for Sheffield, Heeley (Mr. Hooley), as I was on Second Reading. I have the experience, which not many hon. Members have, of having a development corporation in my constituency. The lesson that all of us learn when we have a development corporation in a new town working alongside the district council and county council is that it achieves a single mindedness of approach to a problem. The buck stops at the development corporation. It the county and district do not combine and act—in my constituency they do—the development corporation can get on with the job.

The great danger that I sense—I suspect that the hon. Member for Heeley also senses it—is that if the county council is to be involved, no one will know where the buck stops. There will be consultations between one and the other and no decisions will be taken. If I were an industrialist who was asked to go into the deprived areas—for example, some of the derelict areas of Liverpool which I do not claim to know as well as the hon. Member for Garston, but at least I have taken the trouble to visit them—I should want to go to one office and know that I could get a decision and that no one would change it at a different level of local authority.

I understand that the county boroughs are chafing at the bit to get more decisions taken at district level. I believe that, despite having had the counties wiped out in Committee, the Government should pull them in again here on the Floor of the House.

Mr. Hooley

The matter is even more complicated than the hon. Gentleman suggests. Not only are the two tiers of local government involved, but seven or eight Government Departments. The size of the committees that will consider these partnership programmes is quite staggering.

Mr. Morris

The hon. Gentleman is quite right. Furthermore, he did not mention the fact that nobody from the private sector has yet been invited to participate. If they were so invited, it would make those committees even larger. I believe that the chambers of commerce should be invited.

I do not sit for a Liverpool constituency, but I notice that the council there has a membership of 41 Labour, 41 Liberal and 17 Conservatives. That suggests that if one can get a decision out of the district council, that is enough for anybody.

I turn to Amendment No. 39, which is an important amendment with wide implications. It is a pity that the Under-Secretary of State for Industry has left the Chamber in this crucial debate, and I hope that somebody from that Department is taking note of this debate. I understand that the Government are saying that these areas must be designated as predominantly industrial areas. My experience in an older industrial town is that by far the most successful renovation of old shoe factories has taken place in non-conforming areas. They are no longer metal bashing factories or factories of a noisy nature. They have been changed to different forms of factory, but they are now renovated and are making a contribution.

The tragedy is that where an area has not been regarded as an area of dereliction and where old factories are still standing they may well be of a non-conforming nature, but what we must do in the Liver-pools of this world is to stop the rot. That rot has been setting in fast. Figures published in the Press today show that unemployment in Liverpool is rising, although it has fallen in the rest of the country.

I do not think that Amendment No. 39 addresses itself to that problem. We have to be single-minded and use every possible means to ensure that employment is stabilised in these crucial and desperate areas. If that does not happen, unemployment will continue. The amendment is good so far as it goes, but I urge the Government to examine these points, if not today, when the Bill reaches another place.

Mr. Douglas Jay (Battersea, North)

We are now dealing with a wide group of new clauses and amendments, and I welcome them so far as they go from the point of view of some of the London areas.

My hon. Friend the Minister does not need me to urge on him the seriousness of some of the problems of industrial dereliction and unemployment in the inner London areas. For these reasons the changes in the Bill are very welcome. However, from the point of view of those whom I represent in Wandsworth—and the Wandsworth Borough Council covers my area—the people there would have been glad to be granted even more concessions.

I wish to take up some of the points made by my right hon. Friend the Member for Blackburn (Mrs. Castle). I had understood that in the later stages of this Bill a statement would be made about the designation of further areas. The Secretary of State in a letter dated 1st March to the Wandsworth Borough Council made the following categorical statement: I shall be making a statement about the further selection of designated districts during the later stages of the Bill's passage. I do not know how much longer my hon. Friend expects the Bill to take in passing through Parliament. Those who served on the Committee will know the answer better than I do. The serious point concerns whether the Minister intends to make a statement today or at some stage in the Bill about the further designation of areas, because that is what we were virtually promised. Perhaps at some stage he will tell us when that statement will be made.

Mr. Guy Barnett

Perhaps it will save the House further trouble if I say something on this topic. This matter has been raised with justification by several hon. Members.

My right hon. Friend intended as soon as possible to make a statement about the full list of designated authorities. It is fair to add that if this Bill passes through this House today, it will then go to another place. I suppose one could regard that as the "passage of the Bill". I know that, if possible, it was my right hon. Friend's intention to make a full statement on the list by the time we considered Third Reading. Unfortunately, it has not been possible for him to do so because there are difficult decisions of judgment that still need to be made. I know that he hopes to make such a statement within a week or so, but not today.

Mr. Jay

If we can take it as an undertaking that a statement will be made while the Bill is in its passage through the other place, although we shall feel a little disappointed, we shall at least be reasonably satisfied.

Mr. Alison

I hope that the right hon. Gentleman appreciates that in pressing for designation of further areas, there is one small fly in the ointment. The resources available under the Bill have been predetermined and fixed. If further candidates wish to dip their spoons into the soup, there will be smaller helpings for existing candidates. There is an inhibition on the extension of the list.

Mr. Jay

I appreciate that, but as the area which I represent is to receive nothing at all, that argument does not carry very much weight with me.

This is not the place to argue in a parochial sense the place of particular areas. Nevertheless, in view of what was said by my right hon. Friend the Member for Blackburn and by the Opposition on the subject of Hackney and Islington, I must remind the Minister of the representations which have already been made to him. It is puzzling to many people in South London that he should have included in the partnership or designated areas the boroughs of Lambeth and Hammersmith and left out the whole of Wandsworth—an area that comes between the other two boroughs.

I shall not argue the case now because in his letter of 1st March the Secretary of State said: While no final decision has yet been taken on additions to the list, I certainly accept that Wandsworth has a strong case for designation. It will come as an acute disappointment to those in the area—an area which suffers a great deal of industrial dereliction and unemployment—if the Secretary of State fails to include Wandsworth in the list.

Mr. Anthony Steen (Liverpool, Waver-tree)

Perhaps I may help the right hon. Gentleman. The problem is that the Government have refused to define an "area of special social need", despite attempts by the Opposition to elicit a definition. We tabled an amendment in Committee to identify an area of social need. It appears rather as a chameleon because it changes shape and moves round the country. Until the Government define what they mean by that phrase, I feel that they will be making the wrong decisions and that the constituency of the right hon. Member for Battersea, North (Mr. Jay) will be neglected as a result.

5.30 p.m.

Mr. Jay

I understand that there is no definition, but in the past I had a good deal to do with scheduling areas as development areas, and although there was a general phrase in the legislation, there was never a precise definition. Nevertheless, I think that the areas selected received general public acceptance.

The particular problem in London at the moment is that there is no possible social, economic, statistical or other definition which could be produced to include, for instance, Lambeth and Islington but not Wandsworth. However, I do not wish to labour this point in that sense, because I think that my hon. Friend the Under-Secretary of State, who represents a South London constituency—and what is more a constituency bordering on the river, which is where many of the derelict areas are—understands the point perfectly well.

Although we are considering here the Inner Urban Areas Bill, there is also a Private Bill relating to Greater London Council powers, which is not before us this afternoon and which we cannot now discuss but which has some bearing on the proposals in this Bill. The point that I wish to make is that those in my area, including the local authority, attach very great importance to the powers in the GLC Bill. I hope that whatever further improvements are made here—and some have been made already—my hon. Friend will not use the argument that what he has done in this Bill is a good reason for not proceeding with and not enacting the powers proposed in the other Bill.

Mr. Steen

I think that the Minister must by now know some of the arguments that were deployed in Committee aimed at showing that in many ways the Bill was a puff of smoke, had no substance, and would be unlikely to help the areas which it was supposed to help. But in welcoming these amendments, I do not think that it would be constructive of me at this stage to attack the Minister on all the matters which I raised in Committee—certainly not at this stage, anyway.

I should like first to reiterate the points which have been made from the Labour Benches about the areas of special social need and the need to define a little more exactly why certain areas are included and other areas are not. We had a very interesting and lengthy debate on this very point in Committee, and the Minister will remember that I moved Amendment No. 2, hoping to identify the areas of need by specific reference to matters such as areas with unemployment above the national average, with housing stock older than the national average, with more than average lack of basic amenities, with earnings below the national average, with significant numbers of single-parent families, with indictable offences above the national average, and with more than proportionate numbers of unskilled and semi-skilled workers.

The Minister resisted any definition, and as a result that is the difficulty in which he will place himself and the Government as he gets more and more demands that one area or another should be included. I ask him to look again at the whole thinking behind the Bill, for unless he can specify the criteria by which he includes one area and not another, he may be choosing the wrong areas.

In my constituency, in Liverpool, as I have indicated in Committee, the needs are not in the inner part of it. They are on those vast, soulless council estates built by successive local authorities, and in which the social needs are far greater than in the inner areas. For this reason, the needs of the outer area are becoming synonymous with the needs of the inner area, if not overtaking them in that sense.

Perhaps the Minister will look again at the need to define the criteria by which help will be given. If he does not do this he will find that while he is fiddling, Rome will burn. While he is looking at the problems of the inner area, the population will be moving out, and there will be nobody left in the inner area. The real areas of social deprivation, these vast council estates—the sort of area which surrounds our major cities—will be neglected. That is my first general point.

The Minister's aim is to bring back industry and jobs to the inner areas. That is the whole thrust of this series of amendments and new clauses. The Minister will remember my comment about 80,000 jobs having been lost in the inner area of Liverpool, to be replaced by 100,000 jobs in the outer area. I said that it is no good talking about reviving industry in the inner area unless we can bring back some of the skilled men who are now in the outer area. I do not want to deal now with the problems which will be created in the outer area by bringing these skilled men back into the inner area, but unless they are brought back there will be insufficient skilled labour to operate the small firms and businesses which the Minister is trying to interest in coming back into the city.

The Minister will remember that in areas such as Liverpool there is so much vacant and derelict land, belonging to the city council and to nationalised industries, that unless he can persuade these bodies to release their land holdings at a viable price, it will be no good offering grants and loans and assistance, because none of the small firms will be able to borrow enough money to buy the land which is hoarded by nationalised industries and local authorities, and which has been hoarded for a decade or more. In the event, the main thrust of the amendments and the new clauses would be lost.

It is no good offering people loans if the cost of the land is prohibitive. There is no point in offering them land on which to build factories if they have not the skilled staff with which to operate those factories.

I should like to draw the Minister's attention to a firm in my constituency which has written to me in exasperation, at a time when the Government are committed to a revival of the inner city and to creating more jobs and bringing new life to the inner city areas. The letter states: We are a small manufacturing company employing…14 people. Our present premises, which are rented on lease, are becoming inadequate". The company would like to expand its business and create new jobs. It has found suitable accommodation and would like to move. It was under the impression that it would be eligible for a Government grant for the purpose. However, it now learns that the grant is available only if it actually moves into a new building, and not if it moves into an old building.

I hope that the Minister, when he replies, will help me with the problems of this company. It must be one of many such companies wanting to move from one building to another and unable to wait until the Government build an advance factory. In any case, the company would not be able to afford that.

Will the Minister deal specifically with the question whether the Bill will allow the company to move from one building to another, as it wishes, and whether the Government will help it to do so—or does it have to move into new premises in order to qualify for the grant?

Mr. Mike Thomas (Newcastle upon Tyne, East)

I do not want to follow the hon. Member for Liverpool, Waver-tree (Mr. Steen) but rather some of the earlier speeches and particularly that of my right hon. Friend the Member for Battersea, North (Mr. Jay). I also come from a constituency which borders on a river and with very serious problems adjacent to it, as I think he well knows, and I have studied the GLC Bill, to which he referred.

I recognise that the present position is one of very great difficulty. I do not say this in any spirit of "Pull up the ladder, Jack—Newcastle is all right". That is not the feeling I have. It is simply that with the Inner Urban Areas Bill, the GLC Bill, the Act dealing with the Tyne and Wear, and so on, we are getting into the most almighty confusion about inner area support of various kinds. We ought to bear that in mind, perhaps, when looking at the provisions of the Bill.

As the Minister will know, I served on the Committee. It would only be right to give an unreserved welcome to the changes proposed in New Clause No. 2 in particular. Both from the point of view of the co-operative movement—whose interests I represent in the House—and from the wider purview of the retail trade—with which I share the distinction of being a member of the all-party group with the hon. Member for Hampstead (Mr. Finsberg)—the provisions, including commercial buildings, are very welcome indeed. We are grateful to the Government for them and for the amendment of the hon. Member for the Isle of Wight (Mr. Ross) with regard to the precise definition to be used for the word "commercial".

I know the perils of quoting one's own speeches, but in this instance it is perhaps justified. While thanking the Minister for this major concession, I would draw his attention to the speech that I made in Committee when I said: If my hon. Friend —in this case I was referring to the Under-Secretary of State for Industry— says that this is the thin end of the wedge, I say in reply that that is precisely what I intend. I want that wedge to be in and the gap to be opened up. I do not hide that. I say it straightforwardly to him. It is a very tiny wedge, with a very tiny end, and it has been inserted a bare millimetre."—[Official Report, Standing Committee A, 16th March 1978; c. 399.] That was certainly the case with the original amendment in Committee.

It is fair to say that the millimetre has become at least a centimetre, possibly a little more, by the inclusion of New Clause No. 2. However, when replying to the debate can my hon. Friend perhaps give some hope to the distributive trade that this particular development signifies a change in the Government's thinking. Can we hope that this is a real change of heart? I hope that we shall now see a genuine conviction on the part of the Government that distributive and retailing activity is just as important—not only in inner cities—as the creation of jobs in manufacturing industry.

I shall not rehearse all the arguments again. I said in Committee, as did my hon. Friend the Member for Woolwich, East (Mr. Cartwright), that a man who drives a fork lift truck and puts pallets in a heap—whether he is doing it in the warehouse of the North Eastern Co-operative Society or in the workshops of C. A. Parsons Ltd in my constituency—is still a man doing a job, being paid a wage and supporting his family on it.

This is a welcome change in the direction of ending the discrimination that we have seen against the distributive and commercial sector. I hope the Minister can give us some assurance that this will be extended and that this small measure we have today is not the extent of it.

I want to refer to one other matter. In this regard I believe that the hon. Member for Barkston Ash (Mr. Alison) and Isle of Wight have rather missed the point. I refer to the question of jobs. Of course, the provision in the Bill is there and, of course, it is intended to relate the grants to jobs precisely because one of the concerns we have about almost all other forms of assistance to industry is that at the end of the day they help most of all the capital intensive industries. We know that we do not particularly want capital intensive industry in inner urban areas. We do not want major chemical plants or oil refineries, or other plants of the sort that have done rather well under the regional assistance schemes. We want smaller operations that will provide genuine jobs.

I make no complaint about the provision relating to the number of jobs to be created. However, I think that the hon. Member for the Isle of Wight missed the point. I very much welcome the inclusion of jobs to be preserved.

Mr. Stephen Ross

I do not disagree with the hon. Gentleman's comments, but does he not think that £1,000 per job will be far too low a sum to enable some of these commercial developments and renovations to take place? After all, he is welcoming it on behalf of the retail trade. I have no objection to this being related to jobs. I agree with that entirely. But £1,000 is mentioned, and if that is the sort of sum which the Secretary of State has in mind, I am afraid it is peanuts and just will not work.

5.45 p.m.

Mr. Thomas

With regard to these matters, a balance has to be kept. The object is to go for projects that are to some degree labour intensive. If the amount of money available per job goes up too dramatically, again one gets back into the business of encouraging capital intensive operations. A figure of £1,000 may be too low—no doubt many of us would wish that it was £2,000, £3,000 or £4,000—but there has to be a question of balance.

I should like to ask an important and detailed point which we did not seem to deal with properly in Committee. What exactly is a job? The Minister shook his head when it was suggested that construction jobs would be included. He will know that in the area I represent, as in other development areas, there is very great concern with regard to people receiving grants having their operations in existence for a short time—perhaps one, two or three years—and then in time of difficulty closing down the plant in the assisted area and withdrawing to their central headquarters which may be somewhere else. We know that there is some mythology about that. It perhaps does not happen as often as some people think. Nevertheless, it is a genuine concern. It seems to me that by putting the business about jobs into the Bill the Government are inviting the question, what do they mean by this provision?

If in reply the Minister were to say that there will be a general relationship to some general calculation about how many jobs are created or preserved, that is fine. But I would then say to him that I am not entirely sure that I see the point of putting it into the Bill in this form. If he does not say that, then some more detail must be given to us. If it is not construction jobs, is it jobs that are created for a year, two years or five years? Will there be a time limit? The Minister knows the sort of questions that I have in mind. I hope that in his reply he will cover them rather more fully than he did at the outset.

I repeat the welcome that I gave to the amendments and new clauses that we are now discussing. We are grateful for them. We know the work that my right hon. and hon. Friends have put in to take account of the points that we made in Committee. The response we have had is magnificent and direct, and we much appreciate it.

Mr. Timothy Raison (Aylesbury)

The two points made by the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) are both valid and relevant. The first was to stress the importance of the retail industry. I am sure that that is absolutely right. The second was to ask exactly what is meant by "jobs" and whether New Clause No. 2 refers to short-term jobs or long-term jobs. That is also a point on which I should like to hear the answer.

I should like to say a little more about jobs. I am not sure that what I want to say will be welcomed by every hon. Member. I accept the need for inner city policy and for public resources to be directed to bringing about some kind of effective inner city policy. I also accept that the key to a successful inner city policy must be some kind of economic revitalisation in the area concerned.

There is a school of thought which says that one cannot hope ever to make these areas into reasonably dynamic areas in terms of their contribution to the national economy and that one has to regard the inner city areas as being areas of dependence on the rest of society. There are quite plausible and rational arguments for putting forward that point of view, but I believe that it would be a disastrous point of view to put forward. Above all, it would be disastrous because of its effects on morale.

I accept that we want to think in terms of economic revitalisation. I also accept the point that small businesses have an important part to play in these areas, if we are to bring that revitalisation about. But the note of warning I should like to sound is that I do not accept the case for continuing job subsidisation or for creating wholly dependent economies. I do not accept the case for shoring up the obsolete or even the obsolescent. There is a real danger that the kind of provisions embodied in New Clause No. 2 could be used for these purposes.

It might not be a declared statement of policy on the part of the Government, but I believe that the risk exists. There is already in this society an exaggerated creation of what I would describe as bogus jobs. I feel this particularly strongly because there are so many genuine things which still need to be done in our society if only we could afford to do them. So I hope that when New Clause No. 2 talks specifically about providing £1,000 or whatever it may be to create jobs, it will not be interpreted as a licence to create jobs which are not genuine jobs in their own right.

There are many arguments against what I describe as phoney jobs—jobs which are not justified by their economic contribution to society. For one thing, they reinforce the poor productivity which is the scourge of the country's economy at the moment. From time to time, the Prime Minister says that he cannot understand why productivity is not going up because, after all, more people are beginning to be in work. But he overlooks the fact that so many of the people now in work are not fulfilling productive jobs but are there as part of a job creation programme. Although it may be that in the short term there is a case for some of them, in the long term there is no case for them which solves either the country's problems or those of the inner cities.

If we mishandle this kind of policy, there is a risk that we shall lead people to despise work. If we create jobs which are not valid jobs, people may say "This is not really a serious operation. It is a way of getting a bit of money at the end of the week." But I believe that it can help further to undermine the forces in society which are already causing a lot of our trouble. However, I do not think that it will check the demoralisation in these areas to create bogus jobs. What is more, of course, it will waste resources. As I have said already, there are plenty of things which need doing. To use resources purely for job creation is a waste of resources which can be applied elsewhere.

I hope that the Government and the local authorities will bear in mind these lessons and see that what they have to do with the aid of this Bill and New Clause No. 2 in particular is to create what I describe as a real inner city economy. To some extent, this will be done by measures quite outside the scope of the Bill and quite outside the scope of the local authorities. It will be done by our general tax policy, our general planning policy, and so on. Probably all of us will admit that those factors will have much more to do with the strength of our inner cities than any specific inner city measures will ever have.

The question is whether I am being very depressing and damping to the possibility—[HON. MEMBERS: "Realistic."] My hon. Friends say that I am being realistic. I think that that is right, but I also think that in some ways there is more opportunity in the inner cities for genuine economic revival than some people give them credit for. There are realistic opportunities, and I have been struck, when talking about them to business men as well as to others over the past year or so, by the fact that quite often business men are more optimistic than some of the academics and other pundits. However, they are optimistic only if the principle adopted is a realistic horses for courses principle rather than a generalised and unthought-out principle of saying "Let us have jobs for the sake of jobs".

I take the well-known example of the dockland area of London. That is an excellent example of an inner city area. I am struck by the fact that one business man to whom I have talked, who is concerned with development, and so on, makes the point that at the west end of the dockland area at any rate there is a great deal of scope if one says, roughly speaking, that it can provide a cheaper version of the City of London. It is very near the City of London, and a lot of businesses like being in or near the City of London. What deters them from being in the City of London is that they can get there only at very high cost in terms of rent and so on. The dockland area lies immediately beyond the City and, if we could find a way of enabling rents to be reasonable in that area, I can well believe that it could have a considerable commercial attraction for a number of firms. I give that as just one example of the scope for horses for courses policy.

When we are talking about the kinds of businesses which may be appropriate for inner city areas, there are a number of other factors at which we must look. It must be said that one of them is wage levels. We have to accept that in some parts of the country businesses have been priced out of inner city areas partly because wage levels have been pushed up to an unrealistic height. That is a fact. Another one is the problem of land prices. This will come up in a later debate, but I am sure that it is critical to the revival of our inner city economies and that we have to find a way of breaking out of the present absurd situation.

There are two specific measures about which we should be thinking. One is the simple and basic market measure of seeing whether we cannot get land auctioned off, especially publicly held land. That provides the best possible chance. To go back again to dockland, we all know that the Port of London Authority and the gas board are sitting on great tracts of land for which they have no real use and which they are not selling largely because of the Community Land Act and its adverse consequences but which they sit on in any event because public bodies love sitting on land. They cannot bear parting with it. They are very good at inventing spurious reasons why they might want to use it one day. But I do not think that they have genuine reasons, and a bit of chivvying and firm action on the part of the Government could force them to disgorge land. I think that the best way of getting rid of it is simply to auction it so that it goes to people who want to make use of it.

Failing that, there is a case for what is called the reduction factor—the introduction of a "no hope" element in land values which would say realistically "This land will not get anywhere unless it is brought into operation as part of an inner city policy. Therefore, let us accept that its value is less than the value attributed under current valuation procedures." That could help to get the inner city economies going, and it is that sort of area at which we should be looking.

Obviously it will help if we have labour intensive employment. But I do not think that we can carry that too far as a dogma. Provided that the wage rates are not too high, labour intensive employment will often prove to be the appropriate form of employment as well as being beneficial to the local population. By and large, it will be good if these forms of employment are directly consumer oriented rather than what might be described as old-fashioned industry oriented. Obviously, it will be advantageous if they employ women, numbers of immigrants and numbers of not very skilled people. I sometimes think that the prototype inner city firm is Grunwick, which meets all those criteria.

If we are realistic about this and we allow natural forces to operate, perhaps with a little encouragement here and there, we shall do very much better than we shall by adopting the generalised notion that jobs should be created and maintained at all costs.

How does this come back to New Clause No. 2? I am not saying that I am against the clause. I do not think that it is a mistake to write it into the Bill. However, this provision about job creation in it has to be watched with the very greatest care. If this Bill turns out merely to be a job subsidisation effort, I do not think that we shall help the inner cities. Instead, I think that we shall perpetuate the demoralisation and economic decay which afflict them, and we shall be barking up completely the wrong tree.

Mr. Geoff Edge (Aldridge-Brownhills)

I intend to confine my remarks to New Clause No. 2. Although the reference to commercial buildings is to be welcomed, I do not think that it goes nearly far enough. Underlying the Government's thinking there is still the mistaken notion that we can attract back into inner city areas manufacturing employment which will generate new jobs and a new inner city economy.

At a time when the number of manufacturing jobs in the long term, is falling in all the developed countries, it is an illusion to believe that we can attract manufacturing industry back into the inner cities on a substantial scale. That does not mean that some firms, especially small firms, cannot be encouraged to locate in the inner city areas, and I see that later today we shall be discussing an amendment designed to help small firms. The fact remains that the economies of our inner cities are more and more dependent on commercial activities rather than on industrial activities.

Hon. Members may ask why I quibble about commercial buildings being included in the clause. I do so because they have to be commercial buildings in industrial improvement areas. There are many areas in our great conurbations where whole town centres, predominantly commercial centres, are decaying. Is it the case that because these areas cannot reasonably be classed as industrial improvement areas they will be denied aid? Will these areas of commercial decay be able to benefit under the new clause in the same way as industrial areas? If the answer is "No", the Bill's impact will be very small indeed. We cannot possibly hope to revive the inner cities without encouraging a considerable growth of commercial activity.

6.0 p.m.

Mr. Steen

Following the hon. Gentleman's argument, would one not have to rejig regional development aid? At the moment, it is geared to building on green field sites and creating jobs there, which militates against rebuilding the inner city community, with all that derelection and vacant land. Unless one rejigs regional aid, the Bill will make no contribution to rejuvenating the inner cities.

Mr. Edge

I agree with the hon. Gentleman completely. What is needed is a re-examination of regional aid so that it considers not only the economies of regions but the great disparities within regions. The contrast between the poverty of the inner cities and other parts of a region can be just as great as that between an area in the South-East of England and the development areas. That sort of fallacy still underlies much of the Government's thinking, not only about the Bill but about their whole regional economic policy.

I should like an assurance that the Minister will define—there is no definition in the Bill at the moment—an industrial improvement area so that commercial areas which are in decay can benefit as much as predominantly industrial areas. Without that assurance, the effects of the Bill will be very limited.

Mr. Andrew MacKay (Birmingham, Stechford)

I support the hon. Member for Aldridge-Brownhills (Mr. Edge). Many areas which are in need of attention are not included among the designated areas. My own constituency of Stechford has been left out of the designated area within Birmingham, yet some parts in the Alum Rock end of the constituency have areas of terrific deprivation, particularly where commercial enterprises have left and nothing has replaced them.

I, too, congratulate the Minister on bringing commercial enterprises into the Bill. Is this a change of policy? Several hon. Members have rightly said—I do not think that we are misinterpreting Government policy—that in the last few years commercial enterprises have not been encouraged as much as manufacturing and industrial enterprises. Many of us regret that, for two reasons in particular.

First, the Bill's objective—we all agreed this in Committee—is to encourage jobs in the inner cities. I believe that as many new jobs could be gained in the commercial sector as in the industrial. Throughout the country, therefore, it is just as important, if not more so, to encourage commercial enterprises.

Secondly, the growth areas in our economy and in other industrial economies are not so much in manufacturing as in commercial areas. So if we are looking for real jobs—not artificial jobs, but jobs that will last—we must look more to this sector.

Another objective of the Bill is to encourage people to return to the inner cities. People have left most cities in great numbers. This is unfortunate. Apart from the resulting dereliction there, they have to live somewhere else. Again and again, decent countryside and ex-green belt land has been used unnecessarily for development and house building. We should have encouraged both private and public builders to build in the inner cities.

Mr. Steen

Has not my hon. Friend put his finger on the point at issue in the Bill? He is talking about the demolition of the inner cities by the local authority which resulted in this mass exodus of the inner city population in the last 10 years. The question is how to get those people back. Surely, unless the Government say something about the artificially high land values caused by hoarding by public authorities after demolition programmes, whatever is done about industry or jobs will have no effect, because that land is locked into the public sector. Surely that is the key to this argument.

Mr. MacKay

As usual, my hon. Friend, with the far-sighted vision which the House has always recognised in him, has beaten me to it. I had intended to make that point. To continue on the theme of encouraging people back into the inner cities, we shall not get people to live there voluntarily without plenty of facilities, including good shops and plenty of jobs. The two must go hand in hand.

We shall not solve any of these problems in this Bill or by other means until we solve the problem of the high cost of land in many of our cities. I am afraid that much of that land is owned by State bodies—local authorities, the Government or nationalised industries. For various reasons, they are hanging on to it. One reason is the Community Land Act and the development land tax.

But there are other reasons. First, as my hon. Friend the Member for Aylesbury (Mr. Raison) said, these bodies are very acquisitive. They like to hold on to land and have no incentive to sell. The Government should give them such an incentive. They should instruct them to sell, preferably by public auction.

Mr. Edge

To whom?

Mr. MacKay

I believe that at public auction the land would go to many construction companies, which would be only too pleased to have a profitable venture to build factories or houses within the city. Alternatively, the local authority could do the same. Declaring an interest, as a builder in Birmingham, I believe that private enterprise would do it more cheaply and effectively.

Mr. Joseph Dean (Leeds, West)

Is the hon. Gentleman aware that before the Community Land Act land values in the inner cities on normal slum clearance rocketed to astronomical heights when the market was left free and prices were supposed to level out? Under that system, prices went to all-time records. Would not the effect of returning to that system, as the hon. Gentleman suggests, be the same?

Mr. MacKay

I do not think that the hon. Gentleman has taken that argument to its logical conclusion. There was a boom then, but prices later fell again. The reason that they have gone up again now is the shortage of land because of the Community Land Act, brought in by the hon. Gentleman's Government.

We must encourage all State bodies to sell land in the inner cities so that this Bill, which I have broadly supported in Committee, will be effective. I know that we will all appreciate hearing from the Minister on this point and about further encouragement to commercial enterprises, not just in the designated areas but in other areas which need assistance.

Mr. Hooley

The grouping of the amendments has made the argument somewhat diffuse, but I want to concentrate on one point touched on by the hon. Member for Barkston Ash (Mr. Alison), my hon. Friend the Member for Liverpool, Garston (Mr. Loyden) and others. This is an argument about the designation of one tier or two tiers as the effective partnership of programme authorities for the central Government in carrying out the purposes of the Bill. This argument was raised in Committee. I argued then that the districts were disignated and that it was undesirable that there should be confusion of responsibility between the two tiers of local government. It is well known that the present system of local government is regarded as highly unsatis factory and as having caused many problems since it came into effect.

One of the major problems has been the overlapping of responsibilities between the two tiers on matters such as planning, highways and recreation. In the Bill, the Government are perpetuating this kind of difficulty, storing up a lot of trouble for themselves and undermining the effectiveness of what they want to achieve. I fully support what the Government want to achieve. I support many of the amendments in this group through which the Government are trying to improve the Bill. There is no quarrel on the main principle. However, on the mechanics of it, I remain unconvinced that it is sensible or efficient to have dual responsibility—apart from the fact that about half a dozen or a dozen Government Departments are involved at central level and they will have to negotiate with two tiers of local government.

This is not a personal eccentricity of mine. It is not a whim, or an academic argument; it is a real fear on the part of one of the great cities of this country which I have the honour to represent—namely, Sheffield—that concurrent powers would diminish the effectiveness of the Bill. There has been much friction in the past about concurrent matters, and there will be friction in the future if the Bill is enacted.

The Committee, perhaps reluctantly, agreed with my view. It took out the provision relating to the concurrent arrangement and agreed to an amendment that I proposed. Unfortunately, in Amendments Nos. 3 and 22 the Government are asking that we should go back to the original very unsatisfactory position. Oddly enough, the hon. Member for Barkston Ash seemed earlier to underline my argument. He pinpointed the various difficulties—not only in Clause 1 but in Clause 2—which will arise if we continue with this concept of concurrent powers. He went on to say that he would nevertheless accept Government Amendments Nos. 3 and 22. I am sorry that he has had as much difficulty in making up his mind in the House as he did in Committee—though in Committee he came to the right conclusion in the end, so it is possible that I shall be able to persuade him to come to that conclusion again and oppose the amendment. There is no dispute in any part of the House that the Bill is concerned with inner urban areas. We are concerned with the central part of the major cities of England and Wales and, possibly, Scotland.

It is clear that the authorities which have the direct day-to-day responsibility for the problems of the major inner city areas are the district councils. In certain metropolitan areas they are concerned with housing, personal social services and education, which will impinge greatly on the rejuvenation of the inner cities that is to be accomplished partly by means of the Bill.

6.15 p.m.

I do not know what advantage will be gained by complicating the administration and consultation process by dragging in the county authorities. As was pointed out, cogently by the hon. Member for Barkston Ash, it appears, if his construction is correct, that in some cases counties can take the initiative and interfere with the inner urban areas on certain matters, contrary to the interests or the wishes of the district councils concerned. That is unlikely to happen, though, judging from some of the friction that has arisen between the two tiers, it is not entirely out of the question. Nevertheless, there will clearly be a built-in possibility of conflict and friction if the Government reject the wisdom of the Committee and insist on reverting to the original arrangement.

This is not a personal eccentricity of mine. The authorities in South Yorkshire—Barnsley, Doncaster, Rotherham and Sheffield—made a clear statement of their views. They said: The problems of the inner urban areas are concentrated in relatively small geographical areas and the solutions to the problems should lie within the district council. It is the district council which has the responsibility for the local plan exercise within the framework of the county council structure plan. The types of problems to be found in these areas include industrial and housing obsolescence and a declining population faced with social and personal difficulties associated with the lower income groups. The need is to make these communities more prosperous and industrial regeneration is one of the keystones of this policy. An energetic district council is in constant touch with the existing industrialists within their area and is able to respond quickly to approaches made by prospective developers. I echo the comments that have been made that if a business man has to become involved in arguments with a district council, a county council, the Department of the Environment, the Department of Industry, the Department of Transport, the Treasury, and so on, by the time he has gone through that rigmarole he will have lost interest, or forgotten what he intended to do in the first place. The statement from Sheffield and other authorities continued: It is strongly conteded that in metropolitan areas only district councils should become designated districts. If county councils were also to become designated authorities, the difficulties which have arisen in South Yorkshire in the exercise of concurrent powers would be likely to be extended and intensified with results that would probably hinder rather than assist in overcrowding some of our local problems. There is considerable force in that argument. I have already mentioned the powers that districts have—metropolitan districts at any rate—in housing, education, social services and local planning. But there is a strong current of opinion that certain powers should be switched from the counties to other cities not in the metropolitan areas, such as Nottingham, Derby and Hull, which lost their status of borough counties under the new arrangements. It is now generally believed that they should take back some of the old powers that they had in housing and other matters.

Whether or not Conservative Members accept this trend, the trend exists. The argument will be difficult to resist. It is fantastic that there should have been taken from great cities such as Nottingham, Derby and Hull powers which they exercised effectively for years, and that those powers should have been given to some more remote county authorities.

Mr. Raison

The authorities to which the hon. Gentleman refers have housing powers.

Mr. Hooley

My information is that the counties have the housing powers. I may be wrong. There are other powers which these cities want restored to them and which, I believe, in time will be restored to them. That will strengthen the case for having one tier instead of two tiers involved in administration of the Bill.

The Bill recognises the problem because in Clause 7 on the subject of planning it is suggested that on certain planning points the district can go ahead even though the structure plan of a metropolitan county has not been approved by the Secretary of State. The Bill acknowledges that there is a difficulty in a concurrent power system and tries to overcome it by saying "We shall allow them to ignore the statutory power and the statutory procedure which the upper tier, in strict terms, possesses."

I have some evidence that other authorities besides South Yorkshire share this view. I understand that they include Leeds, Liverpool, Bolton, Sunderland, Nottingham and Oldham. If that is correct, we have in Leeds, Sheffield and Liverpool, three of the greatest cities outside London in the United Kingdom supporting the argument.

I have received a letter from the chief executive of Sheffield, saying: My understanding is that the Government will seek to reintroduce concurrent powers on the basis that, firstly, economic development for inner city areas requires co-operation and co-ordinating action between the two tiers of local government. Secondly, that in some areas county authorities are very active in promoting industrial development and, thirdly, that more resources can be brought to bear when county authorities are involved. These arguments suggest to me that government have entirely missed the point that we have been trying to make. The whole history of concurrent powers, particularly in relation to industrial development and promotion, shows that the keenness of both tiers of local government to get involved leads only to confusion, conflict and duplication. That is not the argument of a politician; it is an argument put by a man who has executive responsibility for running one of the biggest cities in the United Kingdom. His considered view is that the provision that the Committee deleted would have been likely to lead to serious difficulties, and that it would be much better to have a one-tier arrangement.

I welcome many of the Government's amendments, but I cannot accept that Amendments Nos. 3 and 22 are necessary or desirable. I believe that the Committee was wise to alter the original form of the Bill.

Mr. Geoffrey Finsberg (Hampstead)

This has been a long and interesting debate on a collection of items, and I start with three specific questions so that the Minister will have time to get the appropriate advice before he applies.

The first question concerns the concurrent powers given under the proposed amendments to designated authorities. Will it be possible for an applicant to go first to a district that is a designated authority to obtain a grant or loan and then to go to the county which will, by then, have become a designated authority with concurrent powers? As far as we can see, there need be no consultation on individual applications to designated authorities, and the amendments appear to give complete discretion, within the figures, to the designated authorities without the need to refer back to the Minister.

Secondly, I should like to refer to our proceedings in Committee. I asked the Under-Secretary of State for the Environment whether, if he were going to exercise certain powers under this schedule which were, in general, the opportunity to revoke a particular proposal, he would at least say that the decision would be taken not in his name, but by a Minister himself. He replied: I shall certainly consider it with a view to trying to respond to the hon Gentleman later."—[Official Report, Standing Committee A, 9th March 1978; c. 307.] I hope that "later" will be today, and I should be grateful if that point could be clarified.

My third question concerns the position that will arise if the hon. Member for Sheffield, Heeley (Mr. Hooley) fails when he divides the House—I cannot assure him of our support—and the amendments to which he is opposed are passed. I take the hypothetical case that my hon. Friend the Member for Barkston Ash (Mr. Alison) has put on various occasions, namely, West Yorkshire, which is a county, and Leeds City. I understand that if there is a disagreement on a proposal that originated from the city, no cost would fall upon the county.

However, if there is a disagreement and the city is overruled and the county proceeds, am I correct in assuming that the precept put upon all the authorities within West Yorkshire will fall not merely on Leeds—which, having objected to having a particular section designated, will still find that it has to pay—but upon all the other authorities on which West Yorkshire would precept during the rateable years when the payments have to be made?

I welcome the repentant sinner and I shall be quoting at length the words of the Under-Secretary of State for Industry, because he was clearly utterly opposed to any intention of widening the definition in the Bill to include commercial activities.

Mr. Mike Thomas

The hon. Gentleman is being most unfair.

Mr. Finsburg

I do not wish to be unfair. If the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) wishes to defend the Minister, it would have been helpful to the Minister to have had his support at an earlier stage in Committee. The hon. Gentleman was also a late sinner, but I was not going to quote him because, in the end, he voted correctly and helped us.

Mr. Mike Thomas

I ought to inform the hon. Gentleman that my conversations with my hon. Friend the Under-Secretary do not accord with the hon. Gentleman's comments. I found a ready response and I am glad that the matter has turned out as it has.

The hon. Gentleman's approach is a little churlish. I hesitate to describe his attitude to me as churlish, since I may be thought to have some direct interest in the matter, but he knows that I was unable to be at the Committee on the first occasion when an amendment was moved because I had to be in my constituency. I made clear before and after that occasion that I had not wished to be absent, but that I had no choice. Indeed, I think that the hon. Gentleman was good enough to accept that, and it is a little unkind of him to return to that theme.

Mr. Finsberg

I had not intended to include the hon. Gentleman in my remarks, but, by trying to defend the Minister, he brought some of this on himself. However, I shall not pursue him.

The Under-Secretary of State for Industry said in Committee: It would be anomalous if assistance were to go to all commercial activities in the inner cities, including inner cities in the non-assisted areas, but not to those activities in the assisted areas generally, but which must continue to have priority. That is why I am most reluctant to go beyond what I think is a generous definition."—[Official Report, Standing Committee A, 7th March 1978; c. 246]. In fairly similar words, he repeated that opposition on two later occasions. There was no movement at all and when we gained our minor victory the Committee voted against the Minister's advice.

6.30 p.m.

In this way and in the Minister's whole attitude in Committee we had little or no help. As I shall show later, he paraded before the Committee his well-known antipathy towards the EEC when we were discussing the amendment to save jobs. But he is never prepared to stand up and do this in a way that would mean that he might have to choose between his views and his Government portfolio. I was trying to persuade him to say this more clearly. We often suffer because the hon. Member makes remarks from a sedentary position. I was giving him the chance to say something, but I see that he does not intend to rise.

It is important that we get the facts on the record. I echo what my hon. Friend the Member for Barkston Ash said earlier. We have had nothing but co-operation from the Minister from the Department for the Environment, who understands these problems.

The hon. Member for Isle of Wight (Mr. Ross), who supported our view about commercial operations, was not, alas, on the Committee. But the representative of the non-official Opposition shared our view. That was one reason why we were able to register one success on this issue. I welcome the robust view taken by the hon. Member for Isle of Wight. We thought that the idea would help to attract industry back to the inner cities. As my hon. Friend the Member for Ealing, Acton (Sir G. Young) said at length, if one converts old factories into new places of work but nearby there is nowhere to shop, there will still be a derelict wilderness. That was one of the reasons why we tried to introduce opportunities for service industries and commerce. This has certainly improved the Bill.

The right hon. Member for Blackburn (Mrs. Castle) chided the Secretary of State for not keeping his promise to announce his further list of authorities to participate in the pork barrel. We had a fair answer from the Minister, when he was pressed by the right hon. Member for Battersea, North (Mr. Jay). I am surprised that neither of those right hon. Members realised that if there was to be an announcement, the timing would be more suitable and that it would be made a day or two before 4th May instead of being lost during the Report stage today. I hope that I am not assuming anything, but I shall be surprised if this list is not announced a day or two before 4th May, in the hope that it will have some effect on the local elections in those areas that are having elections.

I noted what the right hon. Member for Battersea, North said. He does not mind depriving Lambeth or Hammersmith of its limited share if Wandsworth gets something, because it now receives nothing. That is what the right hon. Member said in answer to an intervention. I understand his feelings. I could make the same case and demand that Camden be included because Hackney and Islington are to receive money and Camden is not. But one should not be so ungenerous in a limited Bill when there is a limited amount of money. One should not try to deprive one area in an attempt to get a slice for oneself.

Mr. Jay

The hon. Member is being unnecessarily provocative. That is not what I said. I said that similar areas should have similar treatment. I should have thought that he would agree with that.

Mr. Finsberg

I do agree, but there is no provision for more money. If there were 40 areas sharing £80 million and one added another 40 areas, one would deprive 40 areas of half their money in order to give something to the other 40. If the Minister had said that the amount of money and the number of areas were to be doubled, it would be logical. I might have been trying to be provocative in certain cases but not to the right hon. Member for Battersea, North, whom I describe as a friend outside the Chamber. But that was what the right hon. Member was saying. He might not have intended to say that. I should not wish to assign any impure or improper motives to him.

Mr. Henley

It is silly to suggest that the amount of money has been determined for all eternity. What is important is that we are establishing a framework for bringing assistance to these areas. At present, £1 million is all that we can afford, but it is within the pro vince of this Government—I am sure that they will continue for a long time—to increase the amount as new needs and new areas are established. It is absurd to argue that we are cutting up a finite cake which will remain the same for ever.

Mr. Finsberg

That is a fair point. But this is the amount of money that has been allocated. If the Government name more areas, it would be consistent at the same time to produce more resources. Much of this is a transfer of money which has been already allocated. Far more money is being spent in the inner areas of London by the GLC, for example, than all the money that is proposed in the Bill. I am sure that the hon. Member for Heeley accepts that. As my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen) said, there is a smokescreen, but I welcome the provision

Mr. Steen

I should like my hon Friend's view on two issues. First, does he realise that it is not a question of £80 million or £100 million more? Some of that money will come from the outer wards and will be diverted from the domestic rates to pay for the shortfall in the inner rate bill. Secondly, is my hon. Friend aware that in Liverpool the amount of money that has been taken away already through the reduction of improvement grant finance from the Government and local authority mortgage loans is about the same as the money which is now being offered by the Government in the shape of partnership money and that provided under the Bill? There is hardly any new money for Liverpool. It is either diverted money from the outer areas to the inner areas or the replacement of money which the Government have taken away in the last three or four years.

Mr. Finsberg

If what my hon. Friend said in his second question is right—and I take what he says as fact—on 4th May the deprived city will be able to register its view of what is being done to it. The local people can do far more than I can do today and they may take along with them some fellow sinners.

My hon. Friend was correct in his first point. This is reflected in the rate support grant and the elements that make it up. There is an extra disadvantage.

an extra canister of smoke, in that argument.

The hon. Member for Newcastle upon Tyne, East spoke of building a co-operative supermarket to try to create more jobs. I go along with him on that. But I wonder whether building a supermarket, which is capital intensive whoever builds it, will bump up against the limitation about which my hon. Friends have spoken—the £1,000 job related to the overall total cost. I wonder whether that figure might be an inhibiting factor. It might have been wiser to have a larger figure. I appreciate that the power that the Minister is taking will enable him to designate a different figure in certain circumstances. I merely put to the hon. Gentleman that that is a possible danger that he may not have realised.

Mr. Mike Thomas

The hon. Gentleman and I are largely at one on these matters, as he knows. But I did not refer to a supermarket. I talked more about the distributive warehousing facilities, although I agree that shops and supermarkets are also a possibility. I hope that the hon. Gentleman will agree that it is better to have this power available for commercial building than not to have it at all, so I beg him not to be too churlish.

Mr. Finsberg

Certainly. I am glad that the hon. Gentleman is agreeing with me. I do not think that I am agreeing with him necessarily. It is a case of the chicken and the egg. We agree. Let me put it that way.

My hon. Friend the Member for Aylesbury (Mr. Raison) did a helpful analysis of the dangers, which have been expressed on many occasions in the House before, of the creation of "phoney" jobs. As I think he said very fairly, the real danger is the attitude that it may create in the minds of those who have "phoney" jobs. This is the worrying factor that we shall not know about for a long time.

My hon. Friend the Member for Birmingham, Stechford (Mr. MacKay) analysed the problems that existed and gave us the helpful views of a Member from an inner city.

The hon. Member for Heeley reverted to the argument with which he convinced the majority of the Committee, although he will recall that I was not convinced and I abstained on that issue. There was a certain amount of confusion on this matter in the Minister's mind. He was good enough to send a three-page letter to all members of the Committee because of the problem he caused us by telling us that "or" meant "and" and "and" meant "or". He was trying to be helpful.

Alas, when this happened and I tried to put forward certain other interpretations we were not able to have a debate on a selected amendment. But I am glad to know, and the House should be glad, that "and" is not always identical with "or". If it had been, that would have created a large number of problems for many people. I think that this is one of the reasons why some of my hon. Friends felt that to try to clear the matter up they should support the hon. Gentleman's amendment in Committee. I think that the Minister has now cleared up the discrepancy. Certainly, I believe that what is now proposed is correct, that the powers should be concurrent and both authorities should have the right to designate according to the particular needs of the area.

We have discussed a substantial number of amendments. I think that all, perhaps with one exception, are helpful. I am not certain whether the hon. Member for Aldridge-Brownhills (Mr. Edge) will press the Government on his Amendment No. 36. He certainly received a degree of acceptance and support from my hon. Friend the Member for Wavertree. It struck me as a helpful sort of amendment. It adds to the sort of argument that the hon. Member for Newcastle upon Tyne, East and I put in Committee, together with his hon. Friend the Member for Woolwich, East (Mr. Cartwright), to try to widen the scope of the provisions.

The widening of the scope of this Bill must, as the hon. Member for Newcastle upon Tyne, East said, take it more than a millimetre—indeed, more than a centimetre. It will force the Treasury to think very carefully about a wide variety of matters where so far it has been prejudiced against commerce. This is a very important first step. The amendment would take us one stage further.

The debate has been useful. Many questions require an answer. I hope that the Minister will be able to answer them and clarify the various issues that have been raised.

6.45 p.m.

Mr. Guy Barnett

Inevitably, with such a wide range of amendments and new clauses grouped together, we have had a diffuse but very interesting debate. A number of very important points have emerged, as they did in Committee.

In a way, I was surprised by the speech of my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley), although I recognise his feelings on the issue of the counties. The hon. Member for Barkston Ash (Mr. Alison) also raised the matter, in view of our amendments to restore the powers of counties under the Bill.

I want to emphasise to the House, and particularly to my hon. Friend, that one of the reasons why we have been insistent on this point is that, for the very reason that the Local Government Act 1972 exists, there is a range of powers and responsibilities in the hands of the counties. There are also resources in the counties' possession which are valuable for the operation of inner city policy. It would be absurd to deny those counties with a contribution to make to inner city policy the ability to make it, and particularly to do so on the grounds that in certain parts of the country there appears to be such hostility, suspicion or whatever between the two levels of local government as to make it impossible for them to co-operate.

The assumption behind some speeches on this topic today was that the only consequence of allowing powers to the counties would be constant confusion and overlapping, and that presumably inner city policy would suffer as a result. I deny that, certainly on the basis of the two partnership committees that I chair. I have seen no evidence of such a thing happening so far. I suppose that it might happen in the future, but everything in the shape of co-operation has taken place. In both committees, because they are London authorities, the Inner London Education Authority has also been involved and has co-operated.

We must accept that if we are to do the sort of job that needs to be done in the inner cities we must have a measure of co-operation, and that must extend beyond local government. Some hon. Members spoke today as though they did not want Government Departments to be involved, because it would mean that too many people would be sitting around the table at partnership meetings for anything to be done. I have chaired several partnership meetings, and on the basis of my personal experience I can assure hon. Members that this is not so. We need the active participation and involvement of statutory authorities, whether at central or local government level, in order to do the job that needs to be done.

I suppose that the fact that we need all that assistance and co-operation could be a criticism of our present system of government, but that is not what we are here now to change. We must take the system that we have and accept that many powers under the Local Government Act are concurrent in precisely the same way as the powers in the Bill are. For example, the powers in the Local Authorities (Land) Act 1963 are similarly concurrent. Clause 2 is founded on that Act. There is no restriction in the 1963 Act requiring a district council to act in its own area. It can carry out works outside it for the benefit of its district. There is no restriction on counties either, nor any requirement for consultation. But, of course, any works requiring development will require planning permission.

This is not a new idea that we have invented. We must accept that concurrent powers exist as between the two tiers of local authorities. The present partnerships have led the way by showing that co-operation is possible and desirable. I hope that in those other areas where districts are designated there will be co-operation.

There is another point. The assumption has been made by some hon. Members that it is the district that is the relevant authority, yet in terms of industrial development there are parts of the country in which the county has taken the lead. In those areas it clearly would be damaging to leave the county out of the Bill.

The hon. Member for Barkston Ash raised the question of consultations with regard to the powers contained in Clause 2. He may have exaggerated his case, on the ground that Clause 2 concerns the giving of loans at commercial rates. It would hardly be thought necessary for a bank that wanted to give loans to a particular company to have to consult the local authority, and I do not think that if a local authority is providing loans at commercial rates it should be necessary to write into the Bill the requirement to consult. However, obviously consultation between the two tiers of local government would be highly desirable.

We have had an important and useful debate about the commercial aspect of the new clause. I emphasise one point. The suggestion has been made that somehow the Government are at last changing their policy towards the acceptance of commercial activity as respectable and important in the inner cities. The Under-Secretary of State for Industry has been criticised for his attitude in Committee. I quote him quoting himself, which he did in Committee. He said: We do not have a lingering prejudice, as the hon. Member suggested, because assistance is available under the service industry scheme to any non-manufacturing activity which has a genuine choice of location and which chooses to move to or expand in the assisted areas."—[Official Report, Standing Committee A, 16th March 1978; c. 401.] Hon. Members can read the rest of the quotation for themselves. What, in effect my hon. Friend is saying is that there is no prejudice against commercial activity; indeed, there is encouragement of it.

Mr. Geoffrey Finsberg

Does the Minister agree that immediately after that, on the advice of the Under-Secretary, Government Members voted against the commercial amendment before them?

Mr. Barnett

The hon. Member is being a little ungenerous, in view of the amendments that we have moved this afternoon. To expect the Government to respond immediately to powerful arguments advanced in Committee would be quite unreasonable. We have considered the arguments carefully and have come forward with amendments on Report which I know the Opposition are more than anxious to accept.

The suggestion has been made that we should have commercial and industrial improvement areas. It has been said that commercial activity will provide more jobs in inner city areas than will manufacturing industry. Hon. Members have claimed that if we are interested in jobs we should think about this suggestion. We had an interesting speech from the hon. Member for Aylesbury (Mr. Raison) on the whole question of job creation, but there is no time for me to go into that now. The House should take account of the highly successful series of conferences that have taken place for small business firms in various parts of the country, centred on the inner city areas with which the Bill is concerned.

There has been very active and ready response from small firms, and interest of local authorities and others in the ways in which small firms could be encouraged to operate in inner cities. Some of the lessons that we have learned from the conferences are highly relevant to the ways in which small firms can help to provide jobs in inner city areas.

The reason why we held these conferences was that small firms tend to be labour-intensive. Had Opposition Members spent a morning last week, as I did, going around Hackney, which is part of the partnership area that I chair, they would have seen the number of small manufacturing jobs that are available, and the small operations that take place, sometimes in difficult circumstances. They would then realise that there is potential in manufacturing industry and also commercial industry. But it is in manufacturing industry that one can hope to provide many of the jobs that are needed in inner city areas to lower the level of unemployment.

Mr. Edge

Can my hon. Friend produce one vestige of statistical evidence to support that claim? Can he produce one example of an inner city area where manufacturing employment has increased?

Mr. Barnett

Not without notice. Also, it is not my responsibility to produce that evidence. I simply said that there are many firms operating successfully in the area that I visited recently, in spite of relatively little assistance, and a great many problems created by congestion and other difficulties. Much of the evidence that we have had shows that with a more helpful attitude from central and local government more can be done. I am not in a position to produce the evidence that my hon. Friend requires, and if I were to do so I am not sure that it would either prove or disprove the case that he puts.

Naturally, in a debate of this kind one expects to listen to speeches such as those of my right hon. Friends the Members for Blackburn (Mrs. Castle) and Battersea, North (Mr. Jay), who put the case for their areas. The Secretary of State and I have had many such representations from all over the country from those who wish to use the powers contained in this Bill. The hon. Member for Hampstead (Mr. Finsberg) rather spread himself on the question of how little money would be available. It is the powers that will be of value to the authorities, in enabling them to do the job that needs to be done.

Mr. Steen

When the Minister talks about money, surely he is talking about powers to borrow, because that is what the Bill is about.

Mr. Barnett

No, not necessarily. My two right hon. Friends raised the question of the designation of their own districts. I apologise for the fact that the Secretary of State is not in a position yet to announce the full list of designated districts. We hope to do so as soon as possible. I know that an undertaking was given that this would be done during the passage of the Bill and there was general expectation that it would have been done by today. However, there are inevitable difficulties in making the sort of decisions that need to be made about designations.

One of the difficulties is that, however many lists one publishes of the sort of factors that need to be taken into account—racial tension, unemployment, dereliction, quality of the environment and the degree of industrial decline—there is still a large element of judgment entering into the final decision. However accurate the statistics, judgment is necessary for two reasons.

The first is that if there is racial tension in Blackburn, for example, it may be a factor of great importance. But for quite different reasons Newcastle is a partnership area, and it is an area that has no significant racial minority. Despite this it has been made a partnership area, because other factors have influenced us in making that decision.

7.0 p.m.

Mrs. Castle

First and foremost, as I pointed out in my speech, all the factors operate in the case of Blackburn. Secondly, if, as my hon. Friend says, it is primarily a matter of giving people powers to do something that they want to do, what is the difficulty? Why withhold powers that can enable people to achieve the ends that the Government want?

Mr. Barnett

The answer to that is that if one gives powers to certain authorities and not to others, one gives a distinct advantage to the authorities that are given those powers in being able to retrain, preserve and attract jobs to their areas on an intra-regional basis. Therefore, the decisions on which particular districts are designated are important, because designation will give them the edge over other districts in the area in their ability to attract more jobs, industry and activity into their own areas. That is the reason for that.

As I have said, it is difficult to cover the whole range of issues that were raised during the debate, but I ought to deal specifically—because it relates to an undertaking that I gave the hon. Member in Committee—with the issue that the hon. Member for Hampstead raised again this afternoon. I refer to the question whether Ministers in person would be involved in the decision about the revocation of an industrial improvement area.

The answer is that I looked at this issue very carefully and decided that, on the whole, it would be wrong for me to give any such undertaking that Ministers would always be personally involved in such a decision. That is not to say, of course, that the Minister, whoever he might be, would not be answerable for whatever decision was made. Indeed, we shall issue clear guidelines to local authorities about the size and type of areas that we would expect to be declared as industrial improvement areas, and each declaration will be looked at to ensure that it conforms to these guidelines. I do not expect that many declarations will have to be cancelled, and, as always, officials will be given a clear indication of what cases will have to be seen by Ministers personally.

However, I think that to give that kind of indication here and now would be quite wrong. Indeed, I think that decisions of that sort are probably invariably taken on the basis of the experience of the working out of a particular piece of legislation. Therefore, I do not think that I can undertake to provide an answer to that particular question, certainly not in the way that the hon. Member wants.

I do not want to detain the House for longer than I can help. A number of detailed points have been raised in the debate—

Mr. Geoffrey Finsberg

I specifically asked at the beginning whether, by going to the two sets of authorities that designate, one could get two loans, and whether, by the system that is now being proposed, the county, by precepting upon all the districts, would be able to get money from the district which itself had not wished to designate.

Mr. Barnett

Briefly, the answer is that the county precept would, indeed, fall on all the local authorities in the county. The answer to the other question is "Yes", it is indeed possible for an applicant to get loans and grants from both tiers of local government, but we should ensure by directions that the maxima are not exceeded in total. I hope that answers the specific question.

I recognise that other detailed questions were asked, some by the hon. Member for Barkston Ash in an interesting speech. Perhaps I may undertake to write to him dealing with the specific issues raised. I also say to him and other hon. Members that I was very grateful indeed—as will be my right hon. Friend when he reads what was said—for the kind remarks made about the degree to which we have been able to respond to the criticisms and suggestions made in Committee. I genuinely meant what I said about the quality of the debate in Committee, and I think that today's debate has been useful and interesting, as well.

In the light of all that has been said, although inevitably a range of opinion has been expressed, I hope that our amendments and new clauses will be accepted by the House.

Question put and agreed to.

Clause read a Second time.

Mr. Stephen Ross

On a point of information, Mr. Deputy Speaker. May I ask whether it is proposed that I shall be allowed to move my amendment, No. 34? As I see things now, we do not have a definition of "commercial".

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

Order. We go through the Order Paper in the way in which it is printed, in accordance with the Bill. When we come to Amendment No. 34, the matter will be dealt with.

Clause added to the Bill.