HC Deb 26 April 1978 vol 948 cc1525-48

'It is hereby declared that, notwithstanding any limiting provision in the Town and Country Planning Act 1971, no industrial development certificate shall be required in respect of the erection of any industrial building in any area of special social need included in any district designated as a "designated district" for the purposes of this Act.'.—[Mr. Geoffrey Finsberg.]

Brought up, and read the First time.

Mr. Finsberg

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

The new clause is designed to remove from the special areas referred to in the Bill the need to obtain IDCs. It is self-explanatory.

It is clear that there is a need under legislation for IDCs in the case of extension, as well as erection, of industrial buildings. I concede that the clause may not be sufficiently well drawn, but it indicates what I hope is the right line of approach.

As the Bill now contains references to commercial properties, there is also a case for the removal of office development permit requirements in the special designated areas. I admit that the Government have made several moves over the years to ease both IDC controls and office development permit controls, but I think that the Minister will agree that, whether it is justified or not, there is a psychological blockage in the minds of many undertakings which feel that it is not worth the bother of going through all the mechanism to try to get an IDC.

We know that the limits have been raised. I think that the Minister will confirm that the figure of refusals is down to as low as 6 per cent. But what he and I do not know is how many people have decided that it is not worth the effort of discussion and filling in documents in order to see whether they will be among the 94 per cent. or the 6 per cent.

The Bill applies to areas in many of which there is high local unemployment. Many of our inner city problems are both caused by and the cause of unemployment. Therefore, I see no justification for retaining IDC control in those areas.

There has always been an argument put forward by the Department of Industry that because there are assisted areas and development areas, other places should not be put in such a favourable position as regards IDCs as the assisted or development areas. I do not accept that argument, but I understand why it is made. However, when we are dealing with this Bill, which does not differentiate between different parts of the country but says that there are inherent problems in those areas that are designated, there is a case for saying that in those areas, if in no others, IDC control should go.

I remind the Minister of the problems of the inner areas of London, which are typical. The figures are the same sort of figures as one would find for the inner areas of Merseyside or Manchester. There is no difference; they are merely different spots on the map.

Between 1961 and 1976 employment in London's manufacturing industries fell by 600,000, which represented a loss of 42 per cent., compared with a loss of 12 per cent. in England and Wales as a whole. The rest of the South-East region had a rise of 14 per cent. In 1961 London's share of United Kingdom manufacturing employment was 15 per cent. By 1976 it was down to 11 per cent.

Mr. Hooley

What percentage of total employment in London is represented by manufacturing anyway?

Mr. Finsberg

The figure was fairly substantial at one stage, but it has been gradually going down percentage-wise. I cannot give a figure because I do not have it at hand. I do recall that manufacturing interests in London, which provided a substantial volume of employment, have steadily gone down, as a percentage of the total employment prospects in the capital. I could probably put down a Question on this matter, and get the answer, which the hon. Member could read in Hansard when it is printed.

In using these figures as an illustration I have shown that there is a clear need to bring manufacturing and service industry and commerce back into the inner areas. This could put whole parts of Cornish Street, Sheffield, for example, back into business, as this has been disappearing rapidly as a source of jobs.

There have been arguments over the years that IDCs are necessary to preserve the special status that is part of the regional policy. This Bill deliberately sets out to override these limitations in the inner areas. Because it has done so, it is incomplete in not providing that in these inner areas there should be no need for IDC control.

I do not believe that there is any mileage to be gained from making long speeches on this simple matter, so I shall be brief. There is a case for making a change of this limited nature. It would cost nothing—indeed it might release one more civil servant. When we were given the figures in the last debate, the number of civil servants operating IDC control had gone down to 22. Perhaps this change would enable it to go down to 21. Perhaps civil servants could be redeployed in helping to organise the participation of voluntary bodies in the partnership committees. It would not involve any extra public expenditure and it would not be a breach of the principles of regional policy, any more than the Bill is a breach of those principles.

Mr. Hooley

I want to make a few quick comments. I regard IDC control as a very important part of the apparatus of economic control in this country, and I believe that it would be a serious error to abandon it, even in a small area.

The hon. Member for Hampstead (Mr. Finsberg) has already said that in 94 per cent of cases, the control does not act adversely anyway. We must look at the position not only as it is at present, but as it will be in the future. When we get out of this recession and move into economic expansion, there may be a good case for using IDC control to allow those parts of the country that are expanding more slowly to take advantage of the economic upturn. IDCs could be very important for this purpose, and it would be extremely difficult to reimpose them once they had been abandoned.

IDC control is an important technique for economic direction, and it would be a serious mistake to abandon it simply because of the current—and admittedly difficult—position of the inner urban areas.

Mr. Stephen Ross

I shall speak only for a few moments. I have a confession to make in that I have attended a recent meeting of the GLC, and it was the unanimous opinion on all sides of that body that IDCs and ODPs should be removed. The reason that GLC members wanted this—Labour members, just as much as Conservatives—was that they saw it as an extra piece of unnecessary bureaucracy. Apparently many people thought that once they got an IDC they had actually got planning permission to go ahead and develop. But having to go through two processes took so much time that some people who were interested originally, moved elsewhere. At that meeting, all sides asked specifically—and there were Labour Members present when I was there and they seemed to go along with this proposition—that the IDCs should be removed.

I still remain to be convinced about office development permits, but in this case, as it is limited purely to the areas of special social need, there is a lot to be said for the new clause.

10.45 p.m.

Mr. Tim Sainsbury (Hove)

As this is the first time that I have intervened on this Bill, perhaps I ought to start by declaring an interest as a director and substantial shareholder of a commercial company which could potentially benefit, and as a director and shareholder of industrial companies which could potentially benefit, under the provisions of the Bill if it is enacted.

I agree with the hon. Member for Sheffield, Heeley (Mr. Hooley) that in many of the areas of special social need, industrial employment is now only a minority of total employment. But I suggest that the hon. Member would agree with me, and, indeed, that there would be general agreement in the House, that industrial employment in any area of special social need is very valuable, not just because it adds to the total volume of employment in that area but because it provides in certain particular problem areas the variety of employment and the variety of job opportunities which I think we all believe to be necessary.

There have been substantial criticisms of the employment opportunities available in areas which become dominated by commercial activities. There have been criticisms in the London area, for example, of the problems that could possibly flow from excessive concentration on tourist-related activities. I do not entirely go along with these criticisms, but I could feel stronger in resisting them if I believed that there would remain in those areas a volume and variety of industrial employment that would provide sufficient variety of employment opportunities, particularly to the school leaver, to make him or her feel that there was no reason for leaving that area.

When we consider whether we should have IDCs in these areas, one of the first factors that we should take into account is the psychological effect that the requirement to apply for an IDC has upon the potential industrial developer. The biggest deterrent to investment, in any sphere but particularly new industrial investment, is uncertainty. Too often in this House we tend to assume that industrial investment takes place against a background of determined factors which allow for certain decisions to be taken. Without wishing to criticise civil servants, I must say that we behave, in a way, as though we were civil servants dealing with a predictable set of facts and could determine exactly what would happen, so that if we took decision A there would be a certain result, and if we took decision B there would be another result.

New industrial investment is not of that character. There is always an element of uncertainty. There is usually quite a lot of uncertainty. There is uncertainty about not just the financial return but also the timing of the matter. Timing can be crucial as regards how quickly one can bring a project to beneficial development. Indeed, in some cases, unless one can bring one's product line on stream fairly quickly, one will miss the market. Someone else will have got in, either in this country or, even worse, in another country, and got his product established in the market place, and one will have a much more difficult job in getting one's rival product established and in competition with the market leader. There is that significant, important psychological factor.

I am sure that when the Minister replies he will tell us that IDC applications in the areas of which we are speaking are not refused. He will probably produce figures to show how easy it is and how his Department, the Department of the Environment and the local authorities are all trying to help. However, all that is no good. It is no good, to use the analogy of the Grand National, to be told that when we get to Beecher's there will be some people to lift us over. We shall still be rather nervous about the idea of going across. In any event, we cannot be sure that they will be there to lift us until we get there and they have lifted us over.

Additional uncertainty is introduced into the mind of the potential investor as long as he is required to cross the additional barrier of the acquisition of an industrial development certificate. Presumably the Bill is before the House because we want to help the areas with which it deals. If we want to help these areas with employment, surely we want to remove any unnecessary obstacle to employment.

I go along with those who say that we must try to have a balanced regional policy. However, I cannot see that allowing freer access and removing obstacles to industrial development in areas of special social need will damage regional policy. The effect, if any, would be so marginal. What is regional policy about but trying to help areas of special social need? Why prejudice one area of special social need at the expense of another such area?

I do not accept that it is sufficient for the potential industrial developer to be reassured by the Minister, by his civil servants, by the local authority or by the Department of the Environment that he will get his industrial development certificate and that there is no difficulty. Developers will ask "If there is no difficulty, why have I to go through this rigmarole? There must be some potential difficulty. If there was no possibility of being refused, why am I being required to apply in the first place?" Some of us would sympathise with that view. Why is all the bureaucratic time and all the time of the applicant staff to be taken up in completing all the forms and answering the questions if the developer is bound to get an affirmative answer?

The industrial developer is bound to have an additional uncertainty if he has to apply for an IDC. Further, the inevitable consequence of having to make application for an IDC is delay. There are enough delays inherent in our industrial development process, especially delays arising from the somewhat imperfect operation—that is being modest about it—of our development control system. That is a matter to which we may return on a later amendment. If a developer has to obtain an IDC before applying for planning permission, there is additional delay.

As I have said, there are projects—sometimes extremely valuable ones in terms of export potential, or import replacement—which for their success depend upon the speed at which they can be brought into operation. If in addition to the uncertainty there is delay, there must be a deterrent factor to the potential industrial developer.

A third inevitable consequence of the need to apply for an IDC is that there is a cost element. I am sure that the Under-Secretary of State will acknowledge that that is so. My hon. Friend the Member for Hampstead (Mr. Finsberg) reminded us that not many people are now involved in the mechanism of scrutinising and approving or rejecting applications for IDCs. I suggest to my hon. Friend that the number to which he was referring were those directly employed by the Department. I suspect that many others are involved in consultation. My limited experience as a part-time unestablished civil servant is that the paper tends to go round and round. It appears on various desks with little flags asking for quick replies. All sorts of people are asked to give their replies to questions that perhaps do not provide for their answers. Departments are asked to comment and to give their views. So, although there may be only 22 people employed directly, the messengers employed by the service could run into quite a number.

That is not half the problem. Much more serious is the amount of time that will be taken up of the skilled, experienced, senior staff of the applicant trying to answer questions which do not allow for any certain answers. For example, how many people of what sex and what age—not precisely what age, but under and over 18—will the applicant be employing in one, two, three, four or five years? The average industrial employer wishes that he knew the answer. The answer is entirely dependent upon the success of his operation, which may in any case be dependent on the speed with which his application for an IDC can be processed. So there he sits scratching his head and wondering how many people he should say he will be employing in, say, three years when all he wants to do is to get on with the wretched project.

It seems absurd that, if we are trying to provide real help to areas of special social need, we should continue to require industrial developers to go through the rigmarole of applying for industrial development certificates. I suggest that as long as an industrial developer knows that is a hurdle that he has not got to cross in some parts of the kingdom, but has to cross in other parts of the kingdom—whether in London or the Greater Birmingham area—it will be a deterrent. It is not sufficient for the Minister to say that he will be helped or that he is likely to get an affirmative answer. The industrial developer, seeing the uncertainty, the delay, the costs of the application and the requirement to answer questions, which I suggest do not permit of certain answers, will inevitably be deterred and made that much less likely either to go ahead with the project or to put it in that area of special social need.

I hope that the new clause will commend itself to the Government. It would be even better if they told us that no longer would the new clause be required because the whole unnecessary bureaucratic delaying mechanism of industrial development certificates was to be scrapped altogether. We could then go back to a really effective regional policy, get the economy moving again and provide proper incentive backing so that no mobile industry would be looking for sites. All these advance factories and these other proposals in the Bill would then be worth while.

The provision of this infrastructure, buildings and so on will be effective in terms of job opportunity only if employers seek to make use of the facilities and provide the jobs. I suggest that this hurdle of industrial development certificates could sensibly be taken away for the benefit of the areas about which we are talking.

Mr. Hodgson

My hon. Friend the Member for Hove (Mr. Sainsbury) used the word "uncertainty" to describe the industrial development certificate policy. I prefer to use the word "threat". It is a threat about the future, a threat of uncertainty. It is a sword of Damocles hanging over many successful firms which, if they make a go of things, fear that they may not be able to find room to expand and, as a result, feel that the future of their operations will be cramped.

Nowhere has this policy had more disastrous effects than in the urban West Midlands and, in particular, in the areas which will be covered by the proposals in the Bill. The centre of Birmingham, Wolverhampton and parts of Walsall have been badly affected, because successful firms have been forced by the operation of this policy over many years to leave the area. They have been forced to go, first, to South Wales and to development areas and, later, to new towns. That is all very well, but the result is that the successful firms have gone and the conurbation—in particular, the centre of Birmingham—has been left with the mature firms which are not expanding fast and with the firms which have no immediate prospects of increasing employment and job opportunities. Most importantly, we are left with an increasingly narrow industrial base.

11 p.m.

The West Midlands Economic Planning Report shows how dependent the West Midlands is on metal bashing, as it is known in the trade—on engineering in steel in one form or another. We have missed out on many of the new industries, on plastics and electronics and many others which will be important in Britain in the last quarter of the twentieth century. Therefore, if the Minister is not prepared to give this assurance, he is knocking away one leg of the policy on which many of the proposals in the Bill are based.

I would go further than that, and suggest that the IDC policy has failed so far to comprehend the real nature of industry and the way in which firms are linked with one another. Nowhere is that more important than in small firms, on whose role the Minister and Government have placed, and continue to place, great stress in the creation of job opportunities and employment prospects generally and in rebuilding the fabric of the economy of the inner urban areas. Small firms are particularly badly affected by the operation of the IDC policy because they are linked in a series of intricately woven relationships.

Mr. Edge

No small firm needs an IDC at all. If the hon. Gentleman looks at the small firms in Birmingham, to scarcely one is big enough to require which he is referring, he will find that an industrial development certificate.

Mr. Hodgson

Taking the Birmingham example to which the hon. Gentleman refers, the classic case is where we have a steel stockholder who supplies a series of engineering firms which drill the steel, shape it, fabricate it, or send it somewhere else to be painted and finished. That is then incorporated in a much larger product and sold somewhere else. These firms are all linked in a chain, and somewhere along that chain, one may come to a firm sufficiently large to be constrained by the IDC policy. If one removes one link from that chain, one affects not merely that link but the whole chain. One cannot, therefore say that small firms will not be affected. They may not be immediately, but of course they will be affected if they grow and particularly if their suppliers or customers are affected.

My most important point is, therefore, that we have to consider the effect of the overall linkage of firms and their relationship one to another. If we are to enable the rebuilding of the economies of the city centres and to be able to get employment prospects and the creation of wealth which both sides of the House agree is vital, we have to make sure, on the one hand that there can be no threat to the small business man who may be successful and then find that his growth is constrained and, on the other, that there is no threat to the big firm which wishes to expand but cannot expand. That firm will remove its entire operation, thus affecting its many suppliers and customers.

I hope that in his reply the Minister will consider carefully the importance not of what he will say—that no IDCs have been refused in Birmingham in the last 12 months, which as my hon. Friend the Member for Hove said, is not the point—but of the uncertainty. Most of the modern fast-growing industries have not, as a result of IDC policy, been located in the West Midlands. If the Minister is serious about making a go of inner urban area policy, he will have to do something to make sure that firms are able to prosper in those areas. To remove the IDC policy is just a small step in that direction.

Mr. Edge

I had not intended to intervene on this new clause but I am very concerned about many of the fallacies put forward about the effects of the IDCs.

I believe there should be a complete review of our regional policy, but to suggest that inability to obtain IDC certificates has in any way produced the economic problems of the inner cities seems to me unsupported by the evidence.

The reason for the situation is simple. Most of the firms in the inner city are small—too small to require an IDC certificate. Although it is true that there is a linkage with larger firms, I would point out that most of the firms in the West Midlands with which the small firms are linked are in the area anyway and are unlikely to require an IDC certificate. If they require such a certificate to extend existing premises and carry out an existing operation, in most cases they are quite likely to get it.

If the hon. Member for Walsall, North (Mr. Hodgson) examines the statistics, he will find that there are hardly any examples of a large firm being forced to move from a conurbation because it could not obtain an IDC. If there is a criticism of the IDC system, it is that it prevents entirely new industries moving into cities such as Birmingham.

Mr. Eyre

The hon. Gentleman said that there was no record of any large company moving from a conurbation because it could not obtain a certificate. Has he taken into account the case of Typhoo Tea at Bordesley which recently, as a result of an IDC decision made years ago, left Birmingham resulting in the loss of 600 jobs in the inner area of Birmingham?

Mr. Edge

I take the point about Typhoo Tea, but we are talking about linked firms, and there are not many engineering firms linked with Typhoo Tea.

The argument I am developing is simply that most of the small firms in the inner cities are the firms which characteristically occupy the inner cities and do not require IDCs. They are likely to be affected only if the firms to which they are linked require an IDC.

The major problem is that most of the firms that remain in the inner cities are firms which are not growing. If they were growing, they would seek cheaper land outside the inner city area. They are either firms which are not growing and which are the failures, or firms in industries which are declining in any case. Therefore, no amount of money pumped into those industries will bring about any new growth.

The major factor in the decline of the inner cities has not been IDC policy but the policies of successive local authorities which have demolished large areas of cheap industrial premises, some of them sub-standard, which were available at very low rents.

To give an example, when the Birmingham City Council redeveloped the jewellery quarter in the city, they replaced premises which were available at less than £1 a week rental with a square footage which even in 1970 required £3,000 a week in rental. It is not surprising that many small firms disappeared, but to argue that we must not apply the IDC policies to the inner city areas as an aid to bringing about regeneration seems to me to miss the target completely. What we need to do far more is to argue that this Bill ensures a supply of cheap industrial premises and the cash available for small firms to expand—because shortage of capital is the major reason for small firms declining and going out of business—rather than to concentrate on IDC policy itself. I personally believe that IDC policy needs changing, but to raise that issue in this debate is irrelevant.

Mr. Durant

I always understood that IDCs existed to dissuade industry from entering places where it was felt not advisable for it to be and to try to spread industry to other parts of the country. That was its original concept. Here we are dealing with a Bill that is trying to attract people back. Therefore, I cannot see that there is anything wrong in this particular case with doing away with IDCs.

The hon. Member for Aldridge-Brownhills (Mr. Edge) said that the main problem is new industries. This is surely one of the things that we are talking about—trying to get new industries to come back into city centres. That is why I believe that the IDC is a deterrent. It is another hurdle.

The hon. Gentleman also said that the problem was one of planning blight, and I agree with him. The planners, indeed, have been the cause of half our trouble, but the IDC is all part of the trouble and we cannot knock one off without the other.

We have been knocking down vast areas well ahead of our resources and the desires of the people concerned. The planners have been moving ruthlessly into areas and leaving them completely devoid of anything.

This is a simple step which will at least remove another hurdle in the way of the development industry within the inner city areas, which is what we all desire to see. I accept that small businesses are not necessarily affected and that in some places we want the big firms to return. There is an inclination at the moment to go out into new pastures and to new comfortable sites because they are more attractive in some ways. The problem is that anyone taking an old site in an inner city area can find that he is landed with a lot of problems.

In the context of the Bill, it should be quite in line with our policy to do away with IDCs, and this simple step is one that we should all support.

Mr. Steen

The Minister is no doubt concerned about the inner city areas and how they are to be rejuvenated. Although there may be sighs from Government Members at the thought of having to listen to another long speech from me. I hope that the House will recognise that this subject concerns the principal areas of population in this country and it concerns the most deprived people in the cities. It would be quite wrong of the Government to try to steamroller the Bill through and rush us out of the House in order to get home, because we are debating one of the most serious matters of our time—the revival of our inner city areas and the improvement of the quality of life in them.

On the Conservative Benches we are as concerned as we can be to try to get to the bottom of this problem and to improve the Bill if we can, because it is the only Bill that we are likely to have in this Parliament to do something about the inner cities and the urban areas.

I hope that my approach is the same as the Government's, and the question is: how are the Government to rejuvenate the inner cities? How are we to breathe back fresh life into the core areas rather than the inner city, because the term "inner city" is a wider one. It is the city centres of the major urban areas and conurbations with which we are concerned here.

The purpose of the clause is to help this process by lifting the IDCs. That is the principle behind it. We on the Conservative Benches believe that by lifting the IDCs a new incentive will be given to industry to return.

The Government's attitude was rather curiously expressed. I hope it was not a reflection of the total Government commitment to this subject, but the right hon. Member for Swansea, West (Mr. Williams), who is a Minister of State, Department of Industry, at a meeting I attended with Merseyside trade unionists, chamber of commerce officials and other officials, and Members of Parliament, in the Department of Industry recently, took some exception to my remark that the Government should discriminate positively towards the inner cities by discouraging new industrial buildings on the greenfield sites on the edges of the cities. He was quite frank in his response, saying that the Government cannot dictate to industry where it should go.

That is a curious view for a Minister of this Government to take, because the one thing that the Government like to do is to dictate where people should go. I should have thought that the basic requirement of the revival of the inner city is dictating to new industry where it shall go. Unless the Government are prepared to dictate that industry must fill up the inner city area sites first, they will never see the rejuvenation of the inner city. In fact, I believe that the clause strikes at the root of the whole Bill.

If one of the purposes of the Bill is to bring back new life to the inner city, and if there is an obstruction in the shape of IDCs, preventing that new life from coming back into the cities, the Government should welcome the new clause. It is no good the Government saying that they do not like the words. Unless they can explain what incentives they will offer to industry to come back to the city, they will find that this Bill is worth no more than the paper it is written on. There is nothing in the Bill, as drafted, to attract industry back from the edges of the cities to the core areas. Let us test the Government's seriousness whether they think the Bill is worth more than the paper it is written on by asking just how they envisage industry returning to the inner core areas.

11.15 p.m.

As things stand, in the major conurbations of this country the land encircling the city—the greenfield sites—is always cheaper than the derelict or vacant sites in the inner areas. This means that new industry will inevitably be attracted to those greenfield sites rather than coming into the inner area. The simple reason is that not only is it cheaper but infrastructure is easier. By laying in one's drains, sewers and services on the outer city one can get a far better deal than if one comes into the inner area and does so on land which has already been used.

This means that business will continue to go on and on moving outwards from the centre, building on greenfield sites and applying for Government infrastructure grants—which are available—rather than being invited first to fill up the space which is at present unused in the inner city areas.

The purpose of the new clause, as I understand it, is positively to discriminate in favour of the city centre, and to bring back new life to the inner area.

Unless I have got it wrong, that is what we have been debating for the last six or seven hours and that is what the Standing Committee was all about.

If the Government are to tolerate an obstruction and blockage which is preventing the very things which they say the Bill is all about, then one must question the intergrity, motives and ideology of the Government with regard to this Bill. The reason positive discrimination is necessary is that industry has been progressively driven out of the city centres by a combination of factors, the principal and most important of which is the view that we must demolish much of the old city and rebuild. The only snag is that the demolition was not accompanied by rebuilding.

Let us take, for example, the inner Birmingham area. I am told that 6,000 small businesses were destroyed by the bulldozer. Few ever surfaced again, because by pulling them down, and destroying their goodwill and location, there was nowhere for those firms to start up again. Therefore 6,000 small businesses in inner Birmingham were destroyed an with them all the jobs. The demolition of inner Liverpool has followed a similar pattern.

The Government seem to recognise this in their own White Paper "Policy For The Inner Cities". Paragraph 74 states: In the big cities, the rapid rate of decline in population and jobs, and the ways in which they have got out of step, have compounded the difficulties. Between 1966 and 1976, Glasgow lost 205,000 people (21 per cent.), Liverpool lost 150,000 (22 per cent.), Manchester 110,000 (18 per cent.), Inner London 500,000 (16 per cent.), Birmingham 85,000 (8 per cent.). In the cities of Newcastle and Nottingham, 12 per cent. and 8 per cent. of the population moved outwards. They did not move outwards becaus they chose suddenly to move. It was part of a grand design by most of the city councils, which we now recognise was totally misplaced, to destroy the old landmarks, old warehouses, old factories and old houses on the basis that old was bad. The idea was to demolish what was old and move the people out, and this is a process which has continued ever since. In fact, the exodus from Liverpool at the moment is at the rate of 25,000 a year. It is continuing, and it is continuing only because the bulldozer is continuing to demolish.

So long as the land is being cleared and so long as people have to live somewhere and work somewhere, they will continue to move outwards, and factories will go on being built on greenfield sites outside our cities, unless the Government take positive discriminatory action to make it attractive to go into the inner city areas. Presumably, part of this Bill is aimed to do that, and presumably the Minister will say that this new clause will not help. However, the Opposition say that it is one factor which may help and that, if the Bill is really to have the teeth that we wish it to have, it must try every means possible to encourage business back into our inner city areas.

We know how the rot started in Liverpool. Land was being cleared at a rate faster than people had the resources to replace what had been cleared, and this was the pattern in many other major cities. This was at a time before the economic recession set in. The accelerated slum clearance programme introduced, I believe, at the suggestion of the National Building Agency in 1965, aimed at demolishing 33,000 housing units by 1974, followed by a further 16,000 dwellings declared unfit in Liverpool a year later. To date, 60,000 dwellings have been destroyed. That means 60,000 units in which people were living and 60,000 familes being displaced.

The moral is clear. The city council allowed the housing department to pursue its own self-imposed operational objectives without recognising the consequent problems which were even then becoming apparent—for example, the visual and economic blight, the social disruption, and the loss of local facilities for those who remain in the inner area. What is especially curious is that the people who are left in the inner cities—that is, the city centres—whether it be Birmingham, Liverpool or Newcastle, are those who could not get out. They are the unskilled, the unemployed and the pensioners. Those are the most disadvantaged communities in our society which this Bill hopes to help.

But the most serious criticism that we make of this Government is that, as the Bill stands, we all know if we are honest with ourselves, it will not help any of these people. We are misleading them if we suggest that the Government's urban programme through this Bill will be of any use to anyone.

Mr. Cryer

The last thing that I want to do is prolong the hon. Gentleman's speech, but will he say how his comments relate to the clause, which proposes to remove IDC control from the partnership areas? How would it affect Liverpool, for example, and Newcastle, because, of course, there is no IDC control in those areas?

Mr. Steen

I am seeking to explain, and illustrating it by reference to Liverpool and Newcastle, that any area, whether or not it has IDC control, will need encouragement to bring industry back to the inner city. We need not concentrate upon any specific town. We can deal with the general principle, which is that the only way we can bring industry back is by a positively discriminatory programme.

I point out to the Minister—and I do so by way of example only—that the inner area studies which the Department of the Environment started to conduct in 1972 and which placed teams of professional surveyors and researchers all over the country, revealed that in my own city 11 per cent. of the land in the project area was vacant and that three-quarters of it was owned by the city council. A third of the vacant land was allocated for highways, none of which was likely to be implemented. Half of the highway land had already been vacant for more than five years, while more than one-fifth of the land zoned for housing would be developed in two years. So an immense amount of land remains to be used.

Mr. Cryer

I am trying to understand how the new clause which the hon. Gentleman supports relates to his present argument, since there is no IDC control on the land he is talking about and the new clause proposes the removal of IDC control.

Mr. Steen

As the argument develops, the hon. Gentleman will see—

Mr. Deputy Speaker (Mr. Oscar Murton)

Order. I must intervene. The Chair has been wondering the same thing. The hon. Gentleman must come to the point. We are discussing a new clause dealing with industrial development certificates.

Mr. Steen

With respect to the Minister and the Chair, the point that I am making is that there is an obstruction. The Minister has seized on two cities—Liverpool and Newcastle—but I shall not emphasise them if he does not wish me to. But the urban problem of this country will not be solved until the new clause becomes law and the IDCs do not discriminate against the return of industry to the inner areas. With the clause there will be none of the prohibition which at the moment is a disincentive.

One of the biggest problems of the modern industrialist is that the growth industries prefer to go where the skilled labour is—not the inner cities but the new towns and the greenfield sites. The clause would help the skilled men to return to the inner cities. That means giving positive incentives.

At the moment, the emphasis is on the large new towns around the major cities. We cannot change the emphasis while the Government insist on cuts in commuter transport, which make it more difficult for those on the edges to come into the inner city. In my area, the number of trains from the commuter belt is to be cut from 76 to six a day. That will not help to rejuvenate the inner area.

Mr. Deputy Speaker

Perhaps I might ask the hon. Gentleman how it will help the discussion of the new clause, which relates to industrial development certificates.

Mr. Steen

One must outline the problems of these people and ask how to get them back into the inner areas where the IDCs operate. I will not labour this point much further, because the House has the message, but it is very important. Unless we can reverse this drift, there will be no redevelopment of the inner areas.

11.30 p.m.

The major problem in most of the urban inner areas is the amount of vacant and derelict land there. In many cities as much as 50 per cent. of the vacant land is in the ownership of the local authority—in my own city it is about 60 per cent.—and a further 15 per cent. to 20 per cent. is in the hands of nationalised industries. The Minister will remember the Bill which I introduced the other week under the Ten Minutes Rule, by which I sought to make it compulsory for local authorities either to develop their land by themselves and brine it into constructtive use within, say two years, or to put it on the open market by way of public auction so that it could be used by somebody.

One of the problems of getting factories back to the inner areas is the artificial land value that it attracted to vacant sites that are owned by the local authrority. Unless we lift the IDCs—

Mr. Deputy Speaker

Order. Is the hon. Member going to mention IDCs? I thought that he was just about to do so. I hope that he is.

Mr. Steen

Yes, Mr. Deputy Speaker. I was coming to that.

Mr. Deputy Speaker

I hope so.

Mr. Steen

Unless vacant land that is being hoarded by public authorities can be brought into productive use those industries that would have come to the inner areas will be prevented from doing so by the operation of IDCs. The Minister will understand that this strikes at the root of the Bill. Unless we can encourage businesses to come to these vacant and derelict spaces of our inner cities, the Bill will be a nonsense. I hope that the Minister will address his mind to how the Bill will help to get factories and skilled men to come from the outer to the inner areas. I hope, too, that the hon. Gentleman will tell us why he feels that the clause will not help that process.

Mr. Cryer

The clause is unacceptable to the Government, as many Conservative Members suspected. It would completely remove many inner areas from the scope of industrial development certificate control.

We regard IDC control as an essential part of regional policy. It is concerned with identifying projects which have a genuine choice of location and encouraging them to go to the assisted areas, particularly to the special development areas and development areas. The control also restricts speculative industrial building to developments which do not harm the interests of the assisted areas.

I was staggered to listen for 21 minutes to a representative from Liverpool where there is no IDC control. The basis and reason for IDCs is to try to encourage mobile projects to come to the assisted areas, and every word that the hon. Member for Liverpool, Wavertree (Mr. Steen) uttered was against the interests of the part of the country that he represents. I intervened on two occasions during his speech specifically because he mentioned areas in his part of the country and tried to relate them to a clause which is trying to do something which is not connected directly with what he was saying and which, if it were accepted, would harm the position of the part of the country which he represents.

My right hon. Friend the Secretary of State for the Environment announced on 8th November that the partnership areas of inner London and inner Birmingham would take precedence before their new and expanding towns but after the assisted areas in respect of applications for IDCs coming forward from the South-East and West Midlands. Furthermore, the Department of Industry is now prepared to grant some IDCs for speculative developments in these partnership areas. Already under this new policy IDCs have been granted for over 1 million sq. ft. in the London partnerships and for over 300,000 sq. ft. in the Birmingham partnership.

We cannot relax the control further without harming the interests of the assisted areas whose needs must continue to have priority over the non-assisted areas. Moreover, a relaxation of the control outside the partnership areas, to other designated districts, would be against the interests of the partnerships.

I assure the House that the IDC system will continue to be operated flexibly with due regard to the circumstances of individual firms and of the areas concerned.

The hon. Member for Hampstead (Mr. Finsberg) and other hon. Members mentioned the possibility of a psychological barrier because of having to make an application. We have no evidence whatsoever that substantial numbers of business men are deterred from applying for IDCs. They certainly should not be. I want to make it clear that my Department and my regional offices are willing to give advice to business men in the light of individual circumstances. Cases are dealt with as rapidly as possible and in the vast majority of cases the applicant knows where he stands almost at once.

As for the question of having to apply for an IDC before applying for planning permission—as one hon. Member suggested—I can go as far as to suggest to applicants that they should contact their local authority in parallel to applying for an IDC in order to avoid delay as much as possible. Department of Industry officials are well aware of the need to avoid undue delay and bureaucracy. IDCs are for reasonably substantial ventures in any case, because of the exemption limits which this Government has recently extended, but if a move is being made, if a project is genuinely mobile, it must be very carefully undertaken, and an IDC application is not an undue additional requirement on a move that is being properly planned.

IDCs are an important method of identifying mobile projects. If the Department of Industry did not have them we would have to employ civil servants to comb through newspapers or go round asking industries whether they intended to move, and if they did would they consider moving to the assisted areas, or we would have to run extensive advertising campaigns of a similar character. The clause proposes to exclude IDC control. Clause 4(4) refers to a designated district. An area "of special social need" is not an area defined in the Bill. The designated district would include considerably larger areas than the areas of special social need. This would bring enormous pressures for exemptions from other areas. They would seek designation, and this pressure would result in an erosion of non-assisted areas.

Within the areas local authorities with exemption from IDC control would be able to attract mobile projects to areas that were not in fact the inner city areas about which we are talking. For example, in Bradford the designated district covers the whole of the Bradford local authority area, which includes places such as Guiseley, Ilkley and Baildon. Ilkley, which is a residential area, but which has an industrial sector, is about 12 miles from the inner urban area of Bradford, which is the problem area about which we are all talking tonight.

The exemption would cover the whole area and it would be conceivable that a local authority would use its powers of exemption in order to attract industry to a place that it chose, and that might not be the area that we all wanted to improve. In order to retain an element of fairness it is essential to retain a national pattern for mobile projects. In this sense IDCs are necessary, including the designated areas.

I well understand that there is more pressure for this sort of thing in a recession. My hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) was quite right to point out that in a time of expansion IDCs are under much less pressure; people accept the situation far more readily. I understand quite well that hon. Members such as the hon. Member for Hampstead, from London, and the hon. Member for Isle of Wight (Mr. Ross), have been at meetings, which have included London Labour Members who are putting forward the view that controls should be removed. It is because of the recession. Jobs are important in every area of the country, but the traditional assisted areas are still the worst off—difficult though the position is in some parts of London, Birmingham and the West Midlands. We must pursue a regional pol icy.

Mr. Geoffrey Finsberg

The Minister says that he dos not think that there will be problems and that if he did not have

Division No. 193] AYES [11.42 p.m.
Bain, Mrs Margaret Ross, Stephen (Isle of Wight) TELLERS FOR THE AYES:
Bottomley, Peter Steel, Rt Hon David Mr. Robin Hodgson and
Brooke, Peter Steen, Anthony (Wavertree) Mr. Tony Durant.
Penhaligon, David Taylor, R. (Croydon NW)
Rhodes, James R.
Allaun, Frank George, Bruce Newens, Stanley
Armstrong, Ernest Golding, John Palmer, Arthur
Barnett, Guy (Greenwich) Grant, George (Morpeth) Parry, Robert
Bates, Alt Grant, John (Islington C) Rowlands, Ted
Benn, Rt Hon Anthony Wedgwood Hamilton, James (Bothwell) Sever, John
Blenkinsop, Arthur Harper, Joseph Shore, Rt Hon Peter
Bray, Dr Jeremy Harrison, Rt Hon Walter Snape, Peter
Cant, R. B. Hooley, Frank Spearing, Nigel
Cocks, Rt Hon Michael (Bristol S) Horam, John Spriggs, Leslie
Coleman, Donald Jackson, Miss Margaret (Lincoln) Stallard, A. W.
Cowans, Harry Jones, Barry (East Flint) Summerskill, Hon Dr Shirley
Crawshaw, Richard Lambie, David Taylor, Mrs Ann (Bolton W)
Crowther, Stan (Rotherham) Lamond, James Thomas, Ron (Bristol NW)
Cryer, Bob Loyden, Eddie Walker, Harold (Doncaster)
Davis, Clinton (Hackney C) Luard, Evan Ward, Michael
Dormand, J. D. McCartney, Hugh White, Frank R. (Bury)
Douglas-Mann, Bruce McElhone, Frank Woof, Robert
Duffy, A. E. P. McMillan, Tom (Glasgow C)
Evans, John (Newton) Marks, Kenneth TELLERS FOR THE NOES:
Ewing, Harry (Stirling) Maynard, Miss Joan Mr. James Tinn and
Fernyhough, Rt Hon E. Millan, Rt Hon Bruce Mr Ted Graham.
Freeson, Rt Hon Reginald Murray, Rt Hon Ronald King

Question accordingly negatived.

these powers, his officials would have to comb newspapers and so on. That means that they keep fairly accurate records. Would it be possible for them to keep a record in the 12 months after the Bill is enacted to find out how many applications are refused in the areas covered by the Bill?

Mr. Cryer

That is a useful suggestion. We do keep records and we shall take an interest in finding out the pattern of refusal, though it is slim. We want to be encouraging, but we wish to retain control. For example, 692 IDCs were granted and only 17 refused in the GLC area between 1974 and 1977 and none was refused last year. That may be a reflection of the dearth of mobile projects because there are not enough to go round. We could do with a great deal more.

The IDCs are still an important component of regional policy and one of the most important factors in putting IDCs in context is the need to ensure that economic improvement takes place. That is the most important factor for the inner urban areas and the rest of the country. I hope that the Opposition will withdraw the new clause.

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

The House divided: Ayes 8, Noes, 61.