INNER URBAN AREAS BILL

HC Deb 09 February 1978 vol 943 cc1686-812

Order for Second Reading read.

Mr. Speaker

In calling speakers in this debate I shall do my best to ensure that various cities are represented, but I can only do my best.

4.10 p.m.

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

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

The Bill gives effect to the proposals that we made in our White Paper "Policy for the Inner Cities", published in June last. Extended powers are to be given to local authorities with serious inner area problems to assist industry. Two of the powers dealing with loans for site preparation and rent grants are intended for use only in the partnership areas. I shall return to that aspect later.

The other two new powers in the Bill would allow designated local authorities to make loans and to set up and give assistance within industrial improvement areas. These two latter powers are intended for use both in the partnership areas and in other areas with serious urban problems. The other major provision in the Bill, Clause 7, simplifies certain planning procedures in inner city areas with the aim of avoiding delay.

The Bill is only one part, albeit an important one, of our attack on the problems of urban deprivation. Therefore, before I deal with the Bill itself in more detail, I think it would be useful to set its provisions in the wider context of our inner cities policy and industrial strategy.

The Bill if enacted will give powers to inner city local authorities to support the creation of new employment opportunities and to improve the environment of industrial areas. As such, the Bill is an important development in the role of local authorities in the encouragement of employment. There are some restricted powers in existing legislation, such as Section 137 of the Local Government Act 1972, for authorities to assist useful developments. Then, too, there are some limited powers in local Acts But this Bill for the first time would give authorities, through general legislation, powers to make particular forms of assistance available within specific types of areas.

There is no disagreement in the House about the seriousness of the social and economic problems facing many of our inner cities. The symptoms of decay and dereliction are only too apparent. Economic decline has been followed by intensified social problems, in unemployment, dereliction, population imbalance, and vandalism. The communities involved have to live in a depresing physical environment and, in some areas, as we all know, racial tension.

Many hon. Members—particularly and naturally on this side of the House—have taken a strong personal interest in inner city problems, and I recall, too, a number of statements of concern from right hon. and hon. Members opposite, including the right hon. Member for Worcester (Mr. Walker). The hon. Member for Birmingham, Hall Green (Mr. Eyre), in a Conservative Political Centre pamphlet of last July, wrote: The growing squalor and lack of opportunity for people in many urban areas is an unnecessary blight on the lives of hundreds of thousands of our fellow citizens. The hon. Member for Aylesbury (Mr. Raison), in a publication of the Centre for Studies in Social Policy last October, said that prolonged inaction could be immoral, many could say is already immoral. What is needed is commitment and this at least the Government has given. I assume, therefore, that we shall have broad support from both sides of the House for this measure.

The Bill is an important element of that new commitment, for which the hon. Member for Aylesbury gives the Government credit, and also is an example of how we are now turning commitment into positive action.

Since I first drew attention to the need for action on the serious inner city problems in my speech in Manchester in the autumn of 1976, a great deal of progress has been made. Our White Paper of last June set out the aims of our policy and our proposals. First, we stressed the need, and proposed mechanisms, for a co-ordinated approach by central Government and local government to inner city problems. Secondly, we are making more resources available through an increase in the urban programme from just over £30 million a year to £125 million by 1979–80. Thirdly, we made proposals to help strengthen the economies of the inner areas.

There are thus three main elements to our policy—committed and co-ordinated action, greater resources and priority for the inner city areas, and measures to encourage employment.

The House knows that the main basis of our approach has been the idea of partnership. This is an expression of a deliberate decision to concentrate effort. Only through concerted and committed action can we make an effective impact on those areas with particularly severe problems.

The first task was to settle the final list of partnership authorities, and, after studying many representations for partnership status put to us, I am satisfied that the seven areas selected for partnership stood out clearly from the other candidates in the scale and intensity of their problems. All the partnership committees have had at least one formal meeting—the opening meeting for the Newcastle-Gateshead partnership committee is today. Some are a good way advanced in the development of proposals for action.

Mr. Norman Atkinson (Tottenham)

Can my right hon. Friend give some indication of how far consideration has gone into the question of extending the list of partnerships to some other areas perhaps not entitled to full partnership or to full participation within the scheme he has now announced? Can he give some idea of the time scale for the other inner areas that he has promises will be considered for inclusion in a secondary list?

Mr. Shore

My hon. Friend has for the moment overlooked the fact that we have not merely defined seven partnership areas but have identified a further 15 authority areas to which we think it right to give programme status. One of the purposes of this Bill, of course, is to provide certain powers that could go wider in their application than the two lists of authorities—the partnership authorities and the programme authorities.

Mr. Andrew Welsh (South Angus)

In the Scottish context, will the right hon. Gentleman clarify what he means by "inner urban area"? Does he mean only cities such as Glasgow, Edinburgh, Aberdeen and Perth? May I call his attention to the problems of some of the large burghs, such as Arbroath, which could benefit from such a programme?

Mr. Shore

The definition of areas for partnership status or any other kind of status in Scotland is a matter for my right hon. Friend the Secretary of State for Scotland, but I will ensure that the point made by the hon. Gentleman is conveyed to him.

Each partnership will prepare by the summer a programme of action for an initial period of three years. This will be based on a consideration of the needs of the area and of its particular priorities. It will cover existing central Government and local government programmes, and existing and previously planned capital and current projects and operations. The programme will not be just a bidding document for urban programme resources. It will be an action programme for urban programme resources. It will be an action programme based on a realistic analysis of problems and possible solutions.

Allocations or urban programme resources for the three years 1979 to 1982, amounting to £200 million in total, or £66 million a year, have been made to help the planning of these programmes. Of course, the partnership areas are already spending their initial allocation from the £100 million construction package announced by my right hon. Friend the Chancellor of the Exchequer in his Budget last March. Much of the value of the programmes will lie in the analyses they make of the needs of their areas and the attention they draw to the scope for improvement in the local economy and environment.

Mr. Eric S. Heffer (Liverpool, Walton)

I am grateful to my right hon. Friend for giving way, because this is a very important point. In relation to Clause 3, dealing with industrial improvements, it seems to me that there is a deficiency in the Bill in the sense that it does not seem to provide for new buildings to be built in some of these areas. It talks in terms of landscaping, fencing, walls and conversions. But new development will be among the most important requirements in certain of these areas. Can my right hon. Friend indicate, therefore, that financial aid for new factory development in some of these areas will also be included?

Mr. Shore

My hon. Friend has somewhat anticipated my arrival at Clause 3. Nevertheless, I tell him that the answer to his question is "No". The inner city area of Liverpool is not merely a partnership area but is also in a development area and a special development area. As he well knows, there are grants and aids, stemming from industrial policy and regional policy, which can assist with new buildings.

Since three of the partnerships are in London, I should like to say how the Bill will affect London. Up to now, London boroughs have had no specific powers to assist industry. The Bill will give a number of boroughs these powers for the first time. In addition, the Greater London Council's own Bill will remove the pre-war statutory restriction on advertising, which has inhibited industrial development in London.

I believe also that our offer to consider a Government guarantee, under Section 8 of the Industry Act 1972, for Trammell Crow for the Trade Mart in Southwark will be seen as a constructive contribution to revitalising that part of Dock-lands. Indeed, I am sure that all the powers in the Bill will be very welcome to the local authorities involved, not only in the London partnership areas but in partnership areas generally.

I have also recognised the needs of a number of authorities outside the partnership areas. Indeed, it was in November that I announced that 15 local authorities would be invited to prepare inner area programmes.

For those local authorities I announced that I intended to put aside £25 million a year of the enhanced urban programme which, as I mentioned previously, is to be increased from the present figure of £30 million a year to £125 million a year. Each of these 15 local authorities is now preparing a programme which will bring together the whole of the authority's activities devoted to its inner area and with which urban programme grant can be linked. Here again, the powers under Clauses 2 and 3 of the Bill will be of real assistance to the local authorities concerned.

I now turn to the immediate background to the Bill.

Mr. Michael Alison (Barkston Ash)

My intervention stems from the question that the hon. Member for Liverpool, Walton (Mr. Heffer) asked when mentioning Clause 2. Clause 2 refers to the carrying out by any person of any works on land and so on. That must surely include building works.

Mr. Shore

No; it is the preparation of land. It is not an actual building. If there are mysteries in the clauses, I shall try to elucidate them as I proceed.

I now turn to the immediate background to the Bill, which is local government's role in the support of industry and employment. In July my Department and the Department of Transport stressed in a joint circular—Circular 71/77—the considerable range of assistance that local authorities can give to industry. Through their planning policies they can help industry to grow or to solve problems of location. They can ensure that the infrastructure which industry needs is ready when it is needed, and they can provide the environment and the social facilities which attract employment. They can improve their responsiveness to the problems facing local industry—for example, by appointing industrial development officers, as so many authorities are now doing. They can also improve their liaison with local industry and help school leavers to match their abilities with job opportunities. These are only examples of what can be done often by using existing resources better.

One of the really serious aspects of the inner city areas is the high rates of unemployment from which they are suffering. We all know that the inner city areas suffer to a greater extent than the surrounding areas from both unemployment and other social problems. Inner Merseyside presents a more serious picture than most other parts of the region. Docklands and the other London partnerships have a more intense and bigger range of problems than London generally or, for that matter, any of the Home Counties. Within regions, therefore, it is important to establish clear priorities in favour of the partnership areas, and this is now being achieved.

Mr. Ron Thomas (Bristol, North-West)

My right hon. Friend continually refers to inner city areas, and we all understand their problems, but I remind him that he has received a very comprehensive report from Bristol, which shows that urban blight is not just simply in the inner city areas. It also exists in other parts of the city, such as Avonmouth, in my constituency.

Mr. Shore

I am aware of that. I am also aware that there is hardly a town or city in the country in which one could not point to an area and say that there is a serious urban problem there, whether precisely an inner city area or otherwise. Our difficulty throughout, as I think my hon. Friend understands, is that if we are to do anything effective we have to look for the areas where the problems are most intense. That has been the basis on which we have tried to proceed.

I was referring to the question of industrial priorities. Mobile industrial projects will still be encouraged to consider the assisted areas in the regions, but otherwise, certainly for industrial development certificate purposes, the partnership areas will have the next priority. As our policy develops, greater priority will be given to our partnership areas in many fields of industrial and employment policy.

We need new investment from both the public and the private sector. The public sector can provide better schools, road improvements, new social facilities, and improve the local environment. These changes will help to provide conditions which will encourage private investment in both the private and public sectors. Many of our leading firms already have a considerable investment in our inner cities—in industrial activities, in shops, property, housing developments, and in markets for their goods. I would certainly like these firms to look again at the extent of their commitment to the inner areas, and to consider how they can channel more work and support to those areas If major firms could push more investment towards these areas, they would be helping to protect their existing interests there. It would be an example which would be most helpful for the return of confidence, which is crucial to the economic recovery of the inner city areas.

We should not look just to manufacturing industry for increased employment. We also need the service industries. Medium-sized and small firms have a very large contribution to make to the economy of the inner city areas. It really is time to overcome some lingering prejudices against service employment. I can quite understand local people, with a tradition of employment in the heavy industries, such as the railways and the docks, hoping to see new industry being introduced in their areas. We certainly want new industry, but the fact of the matter is that many young people especially are attracted to the idea of working in service industries, in offices and in commerce. These are growing sectors. Therefore, the inner city areas should welcome enterprise of all kinds that is likely to create stable employment.

Mr. Nick Budgen (Wolverhampton, South-West)

Will the right hon. Gentleman, who is making a great panegyric on behalf of commerce and small industry, explain why both the development land tax and the community land tax are rigged in favour of manufacturing industry?

Mr. Shore

I do not accept what the hon. Gentleman says, and certainly do not think that it is directly relevant to the matter that we are discussing.

I consider that our policy of concentrating effort on the most difficult areas is the only way of getting things done quickly and effectively. This concentration is reflected in the Bill.

Clause 1 provides a means of specifying the areas which are to receive some of the powers in the Bill. Subject to being satisfied that need exists in an area and that the Bill's powers would be useful in alleviating the condition giving rise to that need, I am empowered to make an order specifying the district containing the area of need as a "designated district". Each tier of local government for the area, that is, both the county council and the district council in England, then automatically becomes a "designated district authority" in relation to that district. Both councils can then exercise the powers in Clauses 2 and 3 for the benefit of the designated district.

No final decision has yet been made on which districts should be designated. As I made clear in my statement on 8th November, all the districts involved in the partnerships, and all the districts where the council has been invited to prepare inner area programmes, will certainly become designated districts. 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, when hon. Members will have an opportunity to make their views known.

Clause 2 contains the first of the new powers. It provides that designated district authorities will be able to offer loans for the acquisition of land or works on land. The loans can be up to 90 per cent. of the value of the security and are to be at commercial rates of interest. This is an extension of the loan powers that all local authorities have. I envisage that this new power will enable the designated district authorities to assist industrialists to acquire and develop land where other sources of finance are not available.

The concept of improvement areas will be familiar to hon. Members in the context of housing. Two local authorities, Rochdale, and Tyne and Wear, have pioneered the use of industrial improvement areas. The aim of these areas is to arrest the spiral of decline that so often occurs in old industrial areas and to rehabilitate and convert the buildings as well as to make improvements to the amenities and facilities of the area. I have been impressed with what these two authorities have done and Clause 3 will provide all designated district authorities with specific powers to declare industrial improvement areas and make loans and grant within them.

Sir George Young (Ealing, Acton)

In view of what the Secretary of State said about the importance of attracting service industries, why is Clause 3 specifically exclusive in terms of industrial improvement areas? Why are the facilities of Clause 3(3) available only with regard to conversion for industrial buildings?

Mr. Shore

I think that it is right to reflect our attempt to attract industry and retain it in these areas—and give a general thrust of assistance to industry policy—in the context of this Bill. The case for assistance to commercial and industrial enterprise building has long been argued in many debates in this House. I have no doubt that it will be argued again in Committee. But, as things are now, I believe that we are right to proceed in this way.

Clause 4 deals with the establishment of partnership arrangements and the delineation of the areas within which the additional partnership powers may be exercised. I have explained the progress which has already been made with them. Even though there is nothing at present to stop Ministers from entering into such arrangements without statutory authority, we thought it right to give them recognition in view of the possibility that the Minister's participation in the development of a programme or partnership might be said to conflict with his statutory responsibilities, for example, those relating to planning or compulsory purchase.

Clause 5 and 6 provide two powers that are aimed at dealing with problems that arise particularly in inner areas.

Many vacant or disused sites in inner areas contain the remains of older buildings, or have been used for dumping waste, and the cost of new building on these sites is often considerably greater than the cost of using a green field site.

Clause 5 therefore provides that in partnership areas—actually within "special areas" defined under Clause 4—the designated district authorities can make loans for site preparation works. Although the loans are to be at commercial rates, the interest on them may be waived for up to two years and this will help compensate to some extent for the extra costs of using these sites as against green field sites.

I recognise that these additional costs of development are not the only factors that inhibit the development of certain inner areas sites. The question of land values and land holdings is a complex one and I do not propose to go into it at great length now. I am proposing that one of the first tasks of the partnerships ought to be to establish, where they do not know it already, what vacant or unused land exists in their areas and to decide what can be done, in terms of planning or persuasion, to bring those sites back into use. As I told the House yesterday during Question Time, I have recently written to the chairmen of all the nationalised industries about their holdings of unused land.

Clause 6 deals with another inhibiting cost burden, that of rents. One of the causes of firms closing in inner city areas has been that they often cannot afford the higher rents that they have to pay when forced to move from old low cost premises by redevelopment. Clause 6 will allow designated district authorities in special areas to make grants towards the rents of firms taking new leases. The Bill does not itself prescribe the maximum amount of the grant—this is left to later directions—but we envisage the maximum grant being of the equivalent of between one and two years' rent depending on the particular circumstances.

Mr. Bruce Douglas-Mann (Mitcham and Borden)

Before leaving the point about the allocation of funds, can my right hon. Friend clarify the scale of financial assistance that will be given as a consequence of the Bill, which most of us warmly welcome? The Explanatory and Financial Memorandum states that the financial effects will not exceed £80 million in the period up to 1981–82". Over a four-year period, that means an average of £20 million a year. We greatly welcome the provisions in the White Paper that expenditure on the urban aid programme will go up from £26 million to £112 million. My right hon. Friend has indicated that it will now be increased to £125 million.

But it is alarming that the White Paper on public expenditure envisaged that this sum will drop to £97 million in 1979–80, levelling off in subsequent years. Will my right hon. Friend clarify the way in which the money is to be spent and how much extra is envisaged as a consequence of the Bill or any changes in the urban aid programme that he has announced?

Mr. Shore

My hon. Friend has brought together many different threads of urban policy and has to some extent confused them. There is no question of any drop in the allocations for the urban programme as a whole, which has been established at the level of £125 million from next year.

The urban programme, however, covers a whole range of ways in which assistance in different programmes and different forms can be given to inner cities. Because the Bill is new, it is inevitable that we cannot give any precise calculations. The cost relates only to the costs involved in using these powers, which are only a small part of the total powers. The reckoning has been for a three-year period. In the first year it was probably unwise to expect any great increase in expenditure, but in the following years we reckon that the cost will be about £25 million a year.

Mr. Norman Atkinson

That is chicken feed.

Mr. Shore

These are some very useful chickens when added together with the inner city programmes and other forms of assistance. My hon. Friend ought to consider that point carefully before talking about chicken feed.

Mr. Jim Craigen (Glasgow, Maryhill)

What about the problem facing some small firms moving into new premises in the initial years? The rental difficulties could be quite considerable. Will the local authorities be given some additional support through the rate support grant, otherwise the poorest local authorities might have to bear the biggest burden with regard to the rent allowances that will be given to those small firms?

Mr. Shore

That raises a wider question of the general resources that are available to local authorities both in terms of annual rate support grant and capital allocation. As we are now emerging from a period of great economic difficulty, I certainly hope that there will be greater opportunities for assistance to local authorities in the years ahead.

Mr. Geoffrey Finsberg (Hampstead)

Will the right hon. Gentleman clarify the last point that he has made? Local authorities are worried that this is another Bill putting extra duties upon them and it seems that the Secretary of State is not prepared to say whether the Government will finance part of the extra duties that they are putting on them.

Mr. Shore

With respect to the hon. Gentleman, these are opportunities rather than duties. With regard to the major expenditures in the partnership and programme areas, the financing has already been separately arranged. What the hon. Gentleman has said is not a justifiable charge.

Clause 7 alters the link between structure plans and local plans in designated districts or districts where partnership arrangements have been made. It will reduce the risk of delay in obtaining an operational local plan where one is needed. In inner urban areas an up-to-date local plan may be needed to replace an out-of-date development plan which may be a prime cause of uncertainty and delay in the exercise of development control. At present local plans, even if they are ready, cannot be carried to the stage where objections are considered at a public local inquiry until the structure plan has been approved.

It is proposed therefore that, where the Secretary of State directs, local plans in these inner urban areas may be publicised with a view to adoption notwithstanding the absence of an approved structure plan for the area. The full procedure for the consideration of objections at a public local inquiry will be followed, and there is no change to the basic provision in the planning Acts that the local plan must conform generally to the structure plan as itstands for the time being. The Secretary of State will be obliged to consult both county and district planning authorities before issuing a direction.

Clause 8 is a small consequential provision that ensures that these selected local authorities' general powers under existing legislation to spend will not be restricted by these new powers, as it normally would be.

Clause 9 corrects a minor flaw in previous legislation dealing with derelict land clearance. Grants of 100 per cent. towards the cost of derelict land clearance are available in the assisted areas and in any area outside Greater London where a derelict land clearance area is declared. This clause provides that if a derelict land clearance area is declared in Greater London it will in future be possible to pay 100 per cent. grants. My right hon. Friend the Secretary of State for Industry is considering the case for parts of London to be declared as derelict land clearance areas.

Mr. Michael Heseltine (Henley)

Are any powers being given to local authorities under this Bill which do not already exist, albeit in the hands of the Government?

Mr. Shore

We have no powers of which I know, for example, to give help for the repair and conversion of old industrial buildings. Many of the powers are limited under the Industry Act 1972 to assisted regions of the country.

Mr. Heseltine

The Industry Act is of national application, but parts of the Act make provision for enhanced grants for specific areas. Are not the matters for which the Secretary of State is giving local authorities grant-aided powers permissible within the discretion of the Industry Act?

Mr. Shore

I do not think that is so, except in the more limited regional context to which I have just referred.

I have described each clause to the House to demonstrate the purpose behind its inclusion in the Bill. However, all the clauses, in their different ways, are directed at one single problem: the economic revival of our inner city areas. Clearly, both the Government and local authorities have a part to play in this revival, as does the private sector. The Government have general economic responsibilities, and success in our main tasks of controlling inflation and reviving industrial investment is fundamental to the prospects of the inner cities.

But dealing with the immediate local needs of each area is the job of the local authorities, in some cases in partnership with the Government. We see the powers in this Bill as desirable additions to the powers of the local authorities that are dealing with these inner area problems. The loans and grants under these new powers will be made by local authorities but the Government will be providing financial assistance through the increasing scale of the urban programme.

But the Bill is only part of a larger, continuing drive to improve the condition of our inner cities. It fits in the framework of selective action in partnership between the Government and local authorities. That partnership can now be extended by the use of the Bill's powers to a partnership between local authorities and local industry. I quite accept that few large-scale employment projects will be attracted to inner cities by the exercise of the Bill's powers. It is the medium-sized and smaller firms that will contribute more to increased employment in these areas.

Additionally, the Government through the Industry Act, will continue to make assistance available in both assisted and non-assisted areas, and will be looking at their own programmes and plans to see what further priority can be given to the inner urban areas.

Hon. Members may be assured that the Government are deeply committed to their inner city policies. They will back local initiative by direct assistance and by giving a clear priority to the partnership and programme authorities in the management of Government programmes.

4.45 p.m.

Mr. Michael Heseltine (Henley)

I had intended to describe the Bill as modest, but the hon. Member for Tottenham (Mr. Atkinson) went a great deal further than I would have gone in his description of its financial implications as "chicken feed". The scale of the financial commitments can be measured by the expenditure of £80 million in the course of three years, according to the Secretary of State, but it is four years in the Bill. However, I take the point that he made. During that time local authority expenditure will be about £40,000 million. Therefore, this legislation deals with a comparatively small sum.

It is true that this is a highly selective Bill. As such its impact on all except a negligible number of companies will be nil. It is also true that the Bill broadly deals with companies that are prepared to move. That in itself greatly limits the number of companies that will be involved in the facilities that are to be made available.

I do not complain about the Bill itself. There is nothing in it that one would not wish to see as a matter of principle made available by way of powers to local authorities. However, I suspect that one of the most significant changes is not to add powers to the partnership arrangements about which the Secretary of State spoke but to make it possible for local authorities to fund the decisions that flow from the partnership agreements as opposed to the Government funding those decisions.

In certain areas the Industry Acts would not be capable of meeting all the schemes that might be prepared under this kind of proposal. I should have thought that, in the main, Industry Act support would be able to deal with the projects for industrial support that are likely to be considered. If the Industry Act powers are not sufficiently wide, the powers of local authorities to spend up to the product of a 2p rate in the interests of the area would dwarf the expenditure on a national scale that we are dealing with in this legislation.

The Secretary of State said—and it is right—that the Bill is part of the urban area strategy and has to be seen in the wider strategy. I should like to follow the argument deployed by the Secretary of State in seeing the Bill not as a narrow measure but as part of the strategy. My concern about the strategy is growing. I suspect that the strategy is more a description for a set of policies than a set of policies that will achieve results in the circumstances. I suspect that it is the illusion of a policy. It is to give a definition which the facts of what is happening on the ground will not justify in the results.

There is wide concern, not only in Britain but across the world, about what is known as the "urban crisis". It is by no means a British phenomenon. It is to be found wherever vast organisations of human society have come into existence. It is beyond question that there are no simple solutions and that there are no solutions based entirely on any dogma or doctrine of one kind or another. There is no way in which the inner city problems will be solved by Socialism, Communism, capitalism or any of the other isms. The fact that everyone in Britain would accept is that we need a range of policies which would create broadly a partnership between the motivations of State ownership and those of the capitalist system.

Mr. Tom Litterick (Birmingham, Selly Oak)

The House would entirely agree with this. If it is not entirely a global problem, it is certainly common in the urbanised Northern Hemisphere. Does the hon. Member for Henley (Mr. Heseltine) agree that it is noticeable that in West Germany, where most urban centres were efficiently destroyed by the RAF, the State has very thoroughly intervened to make sure that the familiar Northern Hemisphere urban disease has not arisen. Would he not agree that we might learn something from Germany, and from Eastern Europe as well?

Mr. Heseltine

That is a tempting line of explanation, but I find it rather difficult to see how we could create the circumstances similar to those applying in West Germany when it began the exciting development of its cities. The hon. Member's point does not seem to offer an option that the House could consider.

There are two simple questions that we must ask about the crisis. How can we persuade the sort of people who live in these areas to stay there or, even more important, to return to them? Secondly, how can we persuade people to invest in city centres? The Secretary of State has made the point that industry should, as an act of social conscience, inject investment into these areas. But industry cannot be expected on such a significant scale to base its investment judgment on that sort of criterion. We all know that that sort of encouragement from the Dispatch Box does not actually create jobs in one part of the country or another.

We are asking questions about basic human motivation. In looking at the problems of the inner cities, one realises the daunting scale of the difficulties. We have a vicious circle of decay and decline. The historical reasons for it are easy to find and are numerous.

Without doubt, the rigidity of rent control practised by one party after another in office has had a cumulative effect which has caused serious problems for city centres. [HON. MEMBERS: "Rubbish".] Hon. Members cannot deny that the rigidity of rent control has denied the motivation of both landlord and tenant to maintain the property and over seven decades this has brought about the creation of slums, which now have to be dealt with by the subsidies of the same people who live in them.

The next area that can be analysed clearly is that of the consequences of the bulldozer clearance which has laid waste to vast sections of human communities and replaced them with council houses, schools and roads without the warmth of human society and character. These areas are the potential slums of tomorrow; indeed, many are becoming the slums of today.

They create a one-class society. Broadly, the people who stay in them come from that section of the community in which there is a higher proportion of the elderly, the poor and the sort of people who are unable to help themselves. The younger people, the managers and those with determination to acquire skills and make their way, have tended to look at this background and decide that it is one against which they do not want to live or bring up their children. Therefore, they have set off for the outer suburbs or the smaller towns and villages.

Mr. Heffer

In certain cities, such as Liverpool, there is no class society because there is nobody there. There is nothing there but waste land which has been bulldozed. We want the redevelopment of such areas, and we want industry and people to be brought back into them. At the moment there is no question of class at all—there is no one there.

Mr. Heseltine

I have spent a lot of time recently walking around Liverpool; indeed I have visited the city three times in the last month. The position is not as clear as the hon. Member for Liverpool, Walton (Mr. Heffer) would have us believe. There are empty patches but there has been redevelopment. He cannot say that there has been no development of these areas. I admit that the development has been patchy, and this has tended to contain the ability of the planners to introduce variety.

Mr. Robert Parry (Liverpool, Scotland Exchange)

The point made by my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) is quite correct. In the inner areas of Liverpool, particularly my constituency, there are acres and acres of land lying barren. Is the hon. Member for Henley (Mr. Heseltine) aware that we have vast areas in Everton like this, and we want buildings and jobs?

Mr. Heseltine

I shall say later in my speech what I think should happen to this land. I agree that it is a dispiriting situation. Certain sections of the com munity have gone, and unless we find ways of reversing that trend, we shall maintain the vicious circle of decline.

We face a difficulty here because we are left only with the public sector solution. That is broadly what Liverpool has had to face. We are rehousing the communities living there and maintaining the society already there, and that is not making the area more attractive to encourage people to return and to bring back the balance, excitement and self-motivation. We have the perpetuation of local government subsidy in these areas which tends to compound the crisis developing over a long period. It is a one-class community. In finding the people to create jobs, run factories, take on voluntary work and shoulder responsibility we are relying on an ever-decreasing number of people who will become involved in that process.

The situation in these areas is appalling, even where open spaces are created, because the ability of the local community to finance maintenance is increasingly in question. There are no voluntary organisations or tenants' committees to look after the management of blocks of flats, for example, yet these are the areas that would benefit if that sort of community spirit could be created. Without it there will be no solution to transform the characteristics of these areas.

Mr. Mike Thomas (Newcastle upon Tyne, East)

The hon. Member for Henley (Mr. Heseltine) has based his argument on an objectionable premise involving the words "this sort of people". The sort of people who live in my constituency effectively do all the things that he is suggesting that only the sort of people who live in Henley are able to do.

Mr. Heseltine

I am saying nothing of the sort. Everyone to whom I have talked in these areas is concerned about the lack of community spirit. They are concerned that more and more people are afraid to go out at night. They are frightened of rising vandalism, and they are worried by the lack of involvement of parents in the quality of education. All these characteristics in these areas are contributing to the atmosphere that is driving people out.

Mr. Kevin McNamara (Kingston upon Hull, Central)

The hon. Gentleman expressed anxiety about this matter. Is he not aware of the rents charged by the Humberside County Council for public buildings, such as schools, when organisations which are trying to work with more community spirit and take an interest in their district and in society are being priced out by Tory councils?

Mr. Heseltine

I do not think that is relevant to the problem.

Mr. McNamara

These public facilities are being denied to the people.

Mr. Heseltine

I am trying to find a way—and I believe that this crisis demands an answer—of solving the problem and of persuading those who manage, take investment decisions and wish to create jobs to come to live in the inner city areas. If we do not recognise the need to produce an environment in which they will stay, I believe that the problems which have been growing year after year will continue.

Iit is naive not to recognise the vital importance of the human commitment to these areas. A classic example of this phenomenon is the destruction of the choice of education in inner city areas. What has happened through the destruction of grammar schools in the centre of our cities is that an increasing number of parents have decided to move from the inner city areas to educate their children in comprehensive schools in the dormitory suburbs or other parts of the country. The people who have suffered are not the parents and children who have moved, but those who have remained behind in the inner urban areas in which the sort of society is immediately identifiable.

We have the dilemma of how to create a climate in those areas to attract people back voluntarily. If one does not take that course, one is forced to rely on the State, and the State in recent years has shown its inability to create in those areas communities that are sympathetic to the people who live in them.

Similar answers follow when we examine the subject of investment. It is not enough to say to the industrialist "You must take the problem of the cities on your backs and make decisions favourable to them in your investment programmes". They will not take that course. Their task is to invest for profit. That is what people do if they are making investment decisions. It is no use saying that they should take these decisions if they know that the rate levels for the industrial premises they want to occupy are of the present order.

We all know that 10 years ago rates were a small part of a company's cost structure. At the moment they are often larger than the rent paid by the company. They are a major factor and a major deterrent. The site values are often artificially maintained by the bureaucratic process, which has paid too much for a site and is reluctant to put in the right amount of capital. We must also consider the lack of environmental features which everybody can identify in these centres because they are a major deterrent to companies whose management is trying to decide whether to persuade managers and skilled workers to live close to the jobs which the company is expected to create. Furthermore, planning constraints in such areas are a major hindrance. They are undoubtedly part of a scene that can be noted throughout the world.

I am suggsting not that the kinds of problems I have outlined have been created by one party or the other, but that, because we have not had the courage to tackle the fundamental problems which have been with us for a long time, the situation has been made a great deal worse.

The Labour Government, in their four years of office, have been responsible for a number of features which have significantly worsened the problems of the inner cities. Let me indicate eight areas of activity by the Labour Government in the past four years which have significantly worsened the prospect for jobs and the general climate of inner city areas.

First, there is the Community Land Act. There is no doubt that the existence of that legislation and the development land tax is a major deterrent to the flow of land for development in our inner cities. When the Minister of Housing yesterday was pressed about the tax, he said that it affected the nationalised industries but that the situation was not as serious as we suggested. He felt that there were ways by which one could get round that situation. In other words, he was saying that it is, or has been, a deterrent but that he will find a way of fixing the matter for the nationalised industries so that the deterrent effect is missing.

What do the Government intend to do about the private sector? Some of the land in inner cities is owned by private sector owners. Therefore, if it is a deterrent for the nationalised industries, it is an equal deterrent for private owners. How can anybody doubt that a land tax of 83 per cent. makes it a marginal matter for an owner in deciding whether it is worth selling the land he happens to own? I am arguing not that there should be no tax on capital gains flowing from land but that the tax must be pitched at a level at which the owner reckons it to be worth while selling. If the Government want land to come into use they will have to have confiscatory powers—unless a voluntary supply of land is made available in the market.

Furthermore, the capital transfer tax is a major disincentive for people to create jobs and businesses. If Labour Members speak to the entrepreneurial community about the creation of investment and jobs, they will learn that capital transfer tax has become a major source of concern. All sorts of action flows from this situation. Those people do not invest here; they invest abroad. Therefore, it is a deterrent and it is measured in terms of job losses in inner city areas.

Let us take capital expenditure cuts. The Labour Government put forward public expenditure reductions and the political decision was made as to where those cuts should be concentrated. Those cuts fell on capital expenditure as opposed to revenue expenditure. Everybody understands politically that that is easier to do, but reduction in capital expenditure cuts, which action has brought the building industry to a parlous state, has contributed massively to the problems of the inner cities because of the sudden way in which expenditure goes up and down.

The Minister is keen to give direct organisations and local authorities the power to compete with private authorities on a massive scale. Does he ever stop to think of the impact on the small builder and business man? What will be the effect on such a person in deciding whether to remain in business or to ask his son to continue in that business? He will know that one of the first things the Labour Government did on assuming power was to allow unfettered competition by direct labour organisations with the private sector.

Furthermore, under the Labour Government the reductions in improvement grants as a result of cuts have been enormous. On the subject of the shopping list, the Minister might like to know that in Liverpool virtually half of the improvement grant money has been cut. It must be remembered that £4.5 million out of £11 million is spent in that way. It is an example of the policies of the present Government and is a dramatic example of the effect of the Government's cuts.

Mr. Heffer

The Tories wanted more cuts. The hon. Gentleman is being hypocritical.

Mr. Heseltine

The Government's attitude on the sale of council houses is at the centre of the dialogue involving the opportunities given to people who live in city centres. There is no doubt that the vast majority of council tenants in city centres want to own their own homes. That fact has been established in one independent survey after another. If there were more commitment in that respect, more resources would be put into the maintenance and improvement of those houses if people were given the chance to own them. Why was it that only this week Labour Members trooped through the Lobby to deny those people the opportunity to become property-owning democrats? That is one more example of what could be done to change the climate within these great communities.

The Government came to power in 1974, with a Chancellor of the Exchequer whose attitude to taxation was that he would increase it until the pips squeaked. The fact is that the pips did squeak, the jobs were destroyed, people went bankrupt and companies went into liquidation. How can Labour Members dissociate the reduction in the disposable resources of the private sector from the consequences of unemployment and reduced investment? The two were bound to follow one after the other.

It is to be seen more glaringly in the inner cities crisis than in any other part of the country. There is no doubt that the Rent Act 1974 has played a part in denying certain people the opportunity to find accommodation for rent in our inner cities. All these characteristics and the responsibility of this Government have done incomparably more to worsen the crisis than any of the cosmetics about which the Secretary of State has talked this afternoon.

I say a word about the concept of partnership, and I want to press the Secretary of State about it, because he has a deep personal involvement in the problem. I understand well that the first thing to be done by Government in those circumstances is to have a dialogue, to meet the people concerned, and to try to talk through the problems and find solutions.

Mr. Nigel Spearing (Newham, South)

A partnership, it is called. That is what my right hon. Friend is doing.

Mr. Heseltine

That is exactly what I am saying. It is a sense of commitment which follows precisely from what my right hon. Friend the Member for Worcester (Mr. Walker) was working towards when he set up the first inner cities investigations in 1972.

The fear is that it is just one great layer of bureaucracy which has not within itself an administrative framework with the capability of achieving results as quickly as one would want. It has highly selective powers. More and more discretion is being concentrated in the hands of central Government.

It was reported to me—I am sure that other hon. Members will have heard the same argument—that, for example, 46 people, including seven Ministers, attended the first meeting in Hackney and Islington in order to decide how to spend Eli million over the following year. The Minister of Housing does not understand that if we are to take decisions and obtain results 46 people in a room will never do it. Because that sort of pattern is being created all over the country, with these very interesting and important dialogues, without the cutting edge to get results as a consequence, the Secretary of State should consider whether the machinery is as effective as it should be to deal with the problem. I had hoped that he would have said more about whether there was a possibility of fur ther development to create a framework that is more able to take decisions and obtain results more quickly.

It was interesting to hear the Secretary of State today talk about the need to get service industries back into the inner cities and about the role that they can play. It is probably within the memory of many of us, as it was not very long ago, that the Secretary of State, who was then at the Department of Economic Affairs, introduced the selective employment tax, which had severely prejudicial effects on the service industries.

The Government are unable to be consistent in the policies that they want to apply. Ten years ago we wanted more manufacturing industry. Therefore, it was reasonable to penalise the service industries. Now we need jobs of any sort. So the Ministers now say that service industries have a crucial role to play. In practice, Governments do not and cannot know those things. It is only the private sector that is capable of playing so sensitive and responsive a part, if it is allowed to, within a climate that entitles it to seek reward and in which its decisions can be taken relatively speedily.

There are a number of actions that the Secretary of State should add to the initiatives that he is taking. Some of them, I am prepared to say at once, he will not do because they would be against the party politics of the Government. However, within the momentum that he has started, there are many other initiatives that could be added, but there is no substitute for the overall climate of confidence which would encourage the private sector to believe that it will be allowed to invest relatively quickly with a view to earning profits.

The first thing that he should do is to get rid of the Community Land Act. One of the early purposes of a Conservative Government would be to do precisely that. Secondly, he should put far greater momentum behind the survey that he has now started into the derelict land banks in inner urban areas.

Yesterday the Secretary of State told the House that he had written to the chairmen of the nationalised industries to find out what land they had. It is years since my hon. Friend the Member for Hornsey (Mr. Rossi) pressed the Minister to do precisely that. My hon. Friend was sitting alongside me with the letters from all the chairmen of the nationalised industries answering the questions in detail about what land they each owned. It is easy to obtain this sort of information. We in the Conservative Party already have it. Yet the Secretary of State responded to the pressures only because we tabled six Questions to try to move him forward on the matter. Unless we know who owns that land and question the owners on what they intend to do with it—largely they are in the public sector—and exert a discipline on them to bring it on to the market, there is not the opportunity for the private sector to become involved in the ownership and development of that land.

The third area which I believe should be subject to change is the whole question of planning controls and the rigid use of ODPs, which in today's circumstances must be another bureaucratic irrelevance to the process. There must be a faster process within which planning permission can be dealt with.

The next matter is that I believe, as the Secretary of State knows, that we should reduce the development land tax to a point at which it does not impede the flow of land for development. In the structure of the partnership arrangements there should be a role for the private enterprise companies and for the voluntary organisations. The present balance is centred too much upon the traditional bureaucracies. The record of bureaucracies does not encourage one to believe that they will achieve the results and the much more open-handed balance that the private sector would be able to achieve.

The next step should be to introduce imaginative and far-ranging schemes to sell council houses. I believe that, as in Liverpool, to take a familiar example, there should be encouragement to local authorities to build for sale and to build a mix of houses to encourage owner-occupation to come much closer into the city centres. Tenants in council houses which they do not wish to buy should be encouraged to play a much more involved role in the management of the estates in which they live. It should be a priority of local housing authorities to hand over much of the management of the estates to the people who live on them.

It is sad that the bureaucrats who manage the housing estates do not live on them. It must have a daunting impact upon the council tenants who always expect someone else to take the decisions affecting them. I believe that the experiment of the GLC in the introduction of homesteading ought to be taken up across the country.

I believe that our proposals for the introduction of short-hold tenancies should be considered in order to try to bring back a market in the private rented sector. The concept of using central State power to destroy grammar schools should be abandoned so that there is a choice of education in city centres. There should be a totally different attitude towards small, medium and large companies. There ought to be a genuine acceptance that they will be given a role and allowed to continue to flourish. As long as Labour Members pursue their doctrinal obsessions as set out in the various Labour programmes for 1976 and 1977—the hon. Member for Walton knows of the harm and uncertainty that follows—Ministers should not expect a positive response from the private sector.

Local authorities as an act of policy, should hand over a certain part of their procurement to the small businesses within the area. It should be part of their deliberate policy to ensure that, where contracts can be placed with the private sector, a given percentage of their expenditure should be placed with companies which therefore have the encouragement and incentive to start up and operate in these areas.

Finally, the ability of the pension funds and the life assurance companies to play a role in this should be recognised. That could be done by allowing them to acquire assets from the new town corporations, bringing very large sums into various Government agencies, which could then be redeployed in areas which everyone recognises as being much in need of additional resources.

This is a subject on which there are great areas of consensus. However, there are also areas of consensus about the crisis which exists and about the need for positive and sympathetic Government action. If Government supporters would only be prepared to look at the facts and to recognise that we are looking for not just a public sector solution but a genuine partnership in which the private sector will be given a consistent and permanent opportunity which alone is capable of changing the climate, we should be well on the way to resolving the problem.

Our inner cities have to become attractive for people to live in and for business to invest in, otherwise the people who have helped to create the problems, simply because bureaucrats are not ideally suited to resolving these economic problems, will be left with the responsibility which the State has proved patently incapable of resolving.

Several Hon. Members

rose—

Mr. Deputy Speaker (Mr. Oscar Murton)

Before I call the next hon. Member to speak, I remind the House that there are many large cities with urban areas and very many hon. Members desirous of discussing them. I appeal for short speeches in the interests of all right hon. and hon. Members.

5.23 p.m.

Mr. Douglas Jay (Battersea, North)

The hon. Member for Henley (Mr. Heseltine) made an extraordinary speech. Seldom have I heard so little said at such length. He described life in a way which bears no resemblance to anything which goes on in my constituency, and he said almost nothing about the Bill. All he said was that the Tories would have liked higher Government expenditure, which does not seem to tie up with what we have heard in the last year or so.

If I understood the hon. Member correctly he implied that too little would be spent under this Bill. As a matter of fact, the £20 million or so a year that is to be spent is just about the same as the amount allocated annually to this country under the famous Regional Fund of the EEC, and I have never heard that described by the Opposition as "chicken feed". In each case, it is not very much. But it is something and, for that reason, I welcome the Bill, as will most hon. Members who represent London constituencies, and London local authorities.

Of course, this is a national Bill and, as such, it is applicable not just to development areas or intermediate areas but to any needy urban area in any part of the country. In my view, there can be no doubt any longer that many areas of Inner London have become so industrially and socially deprived—in some cases almost derelict—as to need special help.

In the first few years after the war, it was national policy to steer industry and special help to the old, intensely depressed areas in the North and West, in Scotland, Wales and Merseyside and on the North-East coast. I was always a champion of that policy at that time, because of the undoubted greater need of those areas. But it is the considerable success of that policy which to my mind has created the need now for a new strategy.

Industry and employment have been deliberately and to some degree successfully steered out of London—to a very significant extent out of the area which I represent—and the ratio of unemployment between the North and the outlying areas and London has been diminished considerably. Incidentally, though no one says it, this story proves that Government action of this kind can achieve a major effect in influencing the direction and location of industries. It also shows that, if we are not careful, we can go too far and that we must adjust the policy after a period.

At present, in my view, we do not need to reverse the policy. But I think that we do need to adjust it. There is still some case for firms moving from some parts of the South-East of England to areas which still have greater unemployment in the development areas. But there is no case now for pushing industry out of Inner London into the new towns in the South-East of England. Industrial employment has now become the greatest single need in Inner London, though I agree with my right hon. Friend the Secretary of State that service industries are also desirable. But they are expanding, and the need most acutely felt is now undoubtedly for industrial employment.

According to my contacts with the London local authorities, what those authorities most require now is power to make loans and grants for the acquisition construction, and extension of premises, for the provision of plant and for the preparation of sites. These powers are included in the Greater London Council Bill, which we have not yet discussed and strictly are not discussing today. I understand that the present GLC, about which I forbear to say very much today, is being pressed by the Government to delete these powers from its Bill. It is the view of the Wandsworth Borough Council, and I understand of most of the London local authorities, that they oppose the deletion of those powers from the Greater London Council Bill, and that they would like to see them included both in the GLC Bill and in the present Bill.

Secondly, as I understand this Bill, which we are supposed to be discussing, the main powers are to be usable only in certain designated areas and certain secondary special areas which are to be specified by the Minister. This leaves London local authorities—I make no apology about speaking of London, because the need is so great—in a state of considerable uncertainty until the Minister makes up his mind and names the areas. I understood him to say today—and I hope that it is perfectly clear—that he will name the areas in the later stages of the Bill and before it finally receives the Royal Assent. In the area which I represent there are quite a number of promising prospects for employment which are held up by the present uncertainty as to the powers which local authorities will get. I should welcome, therefore, as urgent a statement as we can have.

Thirdly, as we must all make some reference to the areas which we know best, I must press the Minister to confirm and, if possible, to improve upon the undertaking which he gave in his letter of 29th December to the leader of the Wandsworth Council, which covers my area, that the powers in the forthcoming Inner Urban Areas Bill to make loans and decline industrial improvement areas will be given to the programme authorities, but we have it in mind that they should also be available to a number of other authorities with major inner area problems. While no decisions have yet been made about this, I would certainly accept that Wandsworth has a strong case for inclusion in any longer list. I very much hope that the Minister will be able to make the decision soon.

I would not dream of arguing that the Wandsworth local authority should be treated more favourably than the authorities in Lambeth, Hammersmith, Isling ton, Hackney and Camden. But the Minister has really made a mistake in including all those areas, particularly Lambeth and Hammersmith, which are on either side of Wandsworth, in the partnerships while excluding Wandsworth. This is inexplicable to anyone who has studied the figures. My right hon. Friend has produced no figures to justify his decision, and if he disputes what I am saying, I shall be glad to give him a number of figures to support my case.

Together with several other authorities, Wandsworth has already embarked on a number of employment schemes, has constructed one industrial estate and is ready to go ahead with an industrial improvement area as soon as powers are available. It has shown itself to be a constructive and practical, as well as a progressive, authority. I hope that my right hon. Friend shares that conclusion.

I think that I speak for many London Members in saying that, although the total amounts provided for in the Bill are only moderate, it is one of the best chances that we have had for some time to tackle the problems of industrial unemployment and social deprivation in Inner London. I wish the Bill well and I hope that the Minister will carry out his undertakings. For the Bill would be even more welcome if there were greater powers and they were more widely distributed. I hope that my right hon. Friend can give positive and early answers to my questions.

5.32 p.m.

Mr. Peter Walker (Worcester)

I agree with the right hon. Member for Battersea, North (Mr. Jay) that the Bill will provide some benefits to some districts of London and other inner city areas. For that reason, I welcome it, but there has not been any sense of the urgency for action in a number of inner city districts.

I recognise that most hon. Members probably share that feeling. A situation is arising in these areas that is developing at a very fast rate. The Secretary of State said that much progress had been made since he made a speech in April about the inner cities. He meant progress in preparing plans. Since his speech, unemployment in inner cities has become worse, and racial friction has increased; and when, in the coming months, the crime figures for some of our inner city areas are published, they will show alarming increases. What alarms me is that political forces, including the National Front and extreme Left-wing revolutionary organisations, are taking the fullest possible advantage of this situation. The objective of the National Front and the assorted Trotsky groups is to create out of this situation riots, civil commotions and frictions.

Welcome though it is, the Bill makes only a small contribution and is chicken feed compared with what is needed. It provides an additional £10 million a year for the West Midlands conurbation, which has considerable racial problems and a number of districts of deprivation. The current expenditure by local authorities in that area is £1,253 million. As a result of the Bill, that will become £1,263 million. It will not make a large contribution.

We are pouring money into the inner cities primarily in unemployment and social security payments. Those who criticise this and claim that pouring money into the cities does not solve the problem suggest that we should look at the United States as proof of this fact. But exactly the same error has been made in the United States where money has been poured in through unemployment, social security and welfare payments without the fundamental problems of the districts being tackled.

I have to tell my right hon. and hon. Friends that there is no way in which this problem can be solved by easy application of free market forces. Mr. Milton Friedman has only to take a short cab ride from his university in Chicago to see what free market forces have done to some districts of that city. Such forces will not operate in some districts. If firms have a choice, they will not go into areas of high crime where there is a lack of skilled workers and managerial talent and where there are few decent facilities and much bad housing. We either neglect these districts or we put in considerable resources.

One problem is that all Governments talk of public expenditure in gross terms. The situation in our inner cities provides a classic illustration. We put into Birmingham about £150 million a year in unemployment and social security payments—about £75 million a year more than when the Government came to power —yet under the Bill only another £10 million will be spent.

We must look at the net effects and not the gross effects. No doubt the Secretary of State would have liked to provide more money in the Bill. I am sure that he argued about that with the Treasury. I have had similar arguments and I know the sort of reply given by the Treasury, which never looks at the gross effect. It makes great announcements about slashing public expenditure by £100 million here and giving an extra £20 million there, but it does not consider the total impact and the effect of those actions.

I share the desire of my hon. Friends for the minimum amount of public expenditure. We should allow people to have more money, but if we do not put public expenditure into our inner city districts that will cost us much more in public expenditure through unemployment and social security payments or and social services and vastly more in crime.

The total public expenditure impact of crime is enormous and it can be shown, in my judgment, that crime is linked with high unemployment and bad social conditions. Some people say that young West Indians are muggers and naturally prefer crime. Of course, in an area of high West Indian unemployment, this is true, but in the same way in parts of the North-West and Glasgow, where white unemployment is high, there is a high incidence of crimes carried out by white youngsters.

We are entering a phase in which a whole crowd of young people are becoming committed to be hostile to society. We are discussing problems that exist in districts with between 40 per cent. and 60 per cent. teenage unemployment, particularly among black youngsters. These youngsters get on the streets and get into trouble. They go into petty crime and get sent to Borstal or the psychiatric units where they are in the hands of people who say that in this society the youngsters have no prospects and who support the idea of revolution. As yet, these young people are not organised by the criminal networks, but they will be if the current situation continues.

The idea of designated districts and partnerships is right in principle, but restraints on public expenditure and the uncertainties in local government will make this a slow process. My hon. Friend the Member for Henley (Mr. Heseltine) referred to a meeting in Camden. There was a similar meeting in Birmingham where 35 people met to discuss how the money should be used. None of it will be used until the beginning of 1979, by which time the situation will have become somewhat worse.

We must cut through the red tape of the relationship between the Government and local authorities. We should not decide on a limited number of designated districts as an experiment. We should decide on a whole range of districts where there is desperate need for action.

We should say that we agree that basic deprivation exists; that there is deprivation in housing, jobs and public transport. We should say that we agree that that situation needs a programme of public expenditure so that in five to seven years those areas move from deprivation to at least the average position of the country. That would be a big commitment for public expenditure.

Mr. Shore

That is what we are doing.

Mr. Walker

If the Secretary of state goes ahead with this scheme and he succeeds in it, when we debate the inner cities in two or three years we shall find that the situation is worse and not better, in spite of applying the provisions in the Bill.

The Bill does not commit enough resources. The Secretary of State will not designate enough districts and the whole procedure will take too long. The matter is far more urgent than that. The commitment has to be made heavily and quickly. What I suggest is not a commitment massively to increase public expenditure because in the short term, the medium term and certainly in the long term it will reduce public expenditure.

Until we recognise the dramatic dangers that are involved in the depression in our inner city areas we shall not make that commitment. The commitment will come only when we have something like that which happened in Los Angeles, when the whole of Watts district was burned down, and in Detroit, where there were riots, and the country at last recognises that it has ignored a fundamental problem for far too long.

5.42 p.m.

Mr. Robert Parry (Liverpool, Scotland Exchange)

I welcome the Bill. I am certain that many of my hon. Friends who represent inner city areas will also welcome it. I should declare an interest, because not only do I represent a complete inner area of Liverpool but I was born there, was educated and still live there. I have lived there all my life. I am aware of the great problems that face the people in the inner areas of our cities, particularly in Liverpool.

A number of issues are raised in the White Paper. One section could have been written about my constituency. A typical example is contained in paragraphs 11 and 12, which deal with physical decay. Paragraph 11 states: The most characteristic single feature of the inner city is the age of its housing. Despite the extensive redevelopment and clearance of slum property since the war, there still remains a great deal of poor quality housing lacking basic amenities, not in good repair and set in a drab environment. Paragraph 12 states: In some cities the processes of clearance and redevelopment have got badly out of step. The bulldozers have done their work, but the rebuilding has lagged behind. Sometimes this has been caused by changes of plan as more people left the cities than expected. In other instances it has resulted from reductions in the allocation of resources, central and local Whatever the explanation, there is a wide extent of vacant land in some inner areas, mainly in public ownership; and there is much under-used land and property". That was the cause of my earlier intervention. As both I and my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) have said, there are acres and acres of land in Liverpool which have been lying fallow and barren for many years. In the Everton and Scotland Road areas we now see fields, which was unthinkable some years ago.

Mr. McNamara

My hon. Friend will accept that, although unacceptable in the past, Scotland Road was always green.

Mr. Parry

And it still is green. It was unthinkable that the Scotland Road and Everton areas should be as they are today.

Over the years, because of the various structure plans—the creation of inner motorways, the building of flyovers and subways and the new Mersey Tunnel—thousands of people have moved out of the inner areas although they would like to live there. It is tragic to see acres of land not being used when people could be rehoused there.

The White Paper deals with unemployment in the various inner areas. My information is that in certain parts of my constituency the level of unemployment is higher than 40 per cent. In some areas the figure for young school leavers is a shattering 50 per cent. That is why we need to build small factories.

My hon. Friend the Member for Walton mentioned Clause 3, which deals with the construction of walls and fences and landscaping, but there is no mention of building. This is what we need. We need factories to create employment, and we need houses and flats in the inner areas of my constituency.

Paragraph 2 of the annex deals with the problem of council estates and high-rise flats. The local authority in my constituency is considering demolishing many of the pre-war tenement blocks of flats which were built in the 1930s. I recently visited some of them. The environment in which these people are expected to live is disgraceful. If the local council eventually approaches the Secretary of State for powers and funds to assist it in the demolition of these blocks of fiats, I hope that the Government will give their support.

Mr. Reginald Eyre (Birmingham, Hall Green)

When were the flats built?

Mr. Parry

The majority of the flats were built in the early or middle 1930s. They were built in bad areas. Because of the redevelopment of the city centre, they are now situated in vacant areas. For instance, there is a massive block called Caryl Gardens which was built in 1935. Because of the change in the environment, it is now adjacent to an old railway yard which has not been used for many years. It is next to a hospital which is due to close and a block of flats which has been vacant for a few years.

Therefore, the conditions in which these people live are absolutely intolerable. I hope that the Government will support the city council if it makes an application to demolish these pre-war tenements, and I hope that they will assist in the building of small houses and bungalows on the vacated sites, thus providing a reasonable environment for the population.

The money which will be allocated to the inner areas is welcome, but it is not nearly as ambitious a sum as it should be. If the Secretary of State is to achieve his objective, there will clearly need to be an outlay of hundreds of millions of pounds. That is the only way to tackle the problem properly.

Mr. Shore

The question of resources has been widely misunderstood. The specific urban programme grants are only the smallest part of the total sums made available. I looked up the rate support grant arrangements for Liverpool for only the last two years. Over £200 million a year is going from the Government to help Liverpool, and similar sums are going to our other major cities. The major programmes are being financed in that way, and they will make all the difference. But it is the additional inner city programmes which will enable the cities to do things which the main programmes do not provide for.

Mr. Parry

I agree with my right hon. Friend, and I am sure that all Liverpool Members are grateful for the money which is being made available by the Government to our city.

Mr. Heffer

May I point out for the record that £49.25 million is being granted by the Government for various forms of housing in the city of Liverpool? That is not chicken feed.

Mr. Parry

On the question of further expenditure for the inner areas, I hope that the Government will take into account the revenues that will accrue from North Sea oil and that they will consider spending more on the inner areas, thus making up the money they lost through the public expenditure cuts. Those cuts, which I did not agree were necessary, have led to a further fall in the living standards of the poorer people who live in the inner areas. I hope that the Government will bear that in mind when they are deciding what to do with the profits from North Sea oil.

The partnership agreements for certain cities are welcome. I had the pleasure of meeting my right hon. Friend the Secretary of State and other Ministers in Liverpool to discuss the city's problems. I hope when the question of partnership is considered the people who live in those areas will not be forgotten.

The White Paper refers to the voluntary organisations. Those organisations have played and still play a very important part in the running of the city. However, the majority of the chairmen and members of the voluntary organisations live in the plusher areas of Merseyside. Many of them probably do not even live in Liverpool but probably have their homes in the Wirral, Formby or the Southport area.

The people who should be considered are those in the tenants' associations representing the large blocks of tenements and the multi-storey tower blocks of flats. Note should be taken of the views of the neighbourhood councils. I have two in my constituency—the Southern neighbourhood council, which was recently visited by my right hon. Friend the Member for Huyton (Sir H. Wilson) and the Leader of the Opposition, and the Vauxhall neighbourhood council. Consideration should be given to the views of the various community councils such as the West Everton community council, Shrewsbury House, the Victoria Settlement and other such organisations which deal day in and day out with the people living in their areas. We wish to see that the money that is allocated by the Government is wisely spent for the benefit of the people of these areas.

Although I congratulate my right hon. Friend on promoting the Bill and reversing the expansion of the new towns—expansion which has been at the expense of people living in the heart of our major cities—he must be aware that the decision is long overdue. I hope that he will bear in mind the extra cash which will be needed to achieve his objectives.

In conclusion, I mention the point dealt with in paragraph 76 of the White Paper concerning dockland authorities. In Liverpool, the South Liverpool Docks have been lying vacant for many years and have fallen into a state of decay and deterioration. I trust that the Government will at the appropriate time provide funds for assistance to local authorities that wish to acquire dockland areas for the development of offices and small factories to create employment and for the location of housing and leisure amenities.

5.57 p.m.

Mr. Geoffrey Finsberg (Hampstead)

The hon. Member for Liverpool, Scotland Exchange (Mr. Parry) has said something with which most of us would agree—that the major problems of most of our inner cities can be put down to the discredit of bulldozers and town planners. We have said this before on more than one occasion, and I see no reason to change my view at this stage.

The Bill can be examined in the light of two questions. First, what will it achieve? Secondly, are there any parallels on which to draw?

There is an extremely interesting parallel. On 2nd October 1977 President Carter signed into law a $14 billion housing Bill, commenting that the collection of programmes involved would be a giant step forward in improving living conditions in that nation's cities.

The House should recall the history of that Bill's predecessor. It was the model cities programme of 1966. and the area designated for the experiment was Atlanta, Georgia. It was an area of some 3,000 acres. Its major thoroughfare had been the site of grand and elegant buildings. The area underwent a metamorphosis to shabbiness, truncation into low-income white boarding houses and, a few years ago, racial transition to the point where the six neighbourhoods were 70 per cent. black.

The initial publication of the model cities programme put the situation simply: Today much of the Model Cities is a festering ghetto". That was the situation at the start. What happened? There are now new buildings, new housing units and paved streets, but for the most part—and that means life in general—the situation is about the same, if not a little bit worse. At least, most of the indicators seem to support that conclusion.

Today, nine years and $170 million later, what remains? Let me quote the author, who was himself the Member of Congress for the area. He said: It is trite but true to say that we learn from experience. I know that almost all the people involved in the programs I have analysed here had nothing but good intentions and worked hard to make the policies set by Congress and the Administration work. The fact is that it did not work.

I am a little uncertain whether enough conclusions have been drawn from the only major parallel that I am able to find. Six years and $173 million later, things are worse. Educational deficiencies are wider, unemployment is up, there are fewer houses and crime is up. Therefore, I say to the Secretary of State, do not be quite so sure that this will necessarily work. All the experience that we can find show that it may not work.

I believe that much more could be achieved if the State would actively encourage instead of indulging, as I fear the Secretary of State is doing, in window dressing and, in many cases, actively discouraging. For example, the threat of industrial development certificate controls deters far more people than the 7 per cent. refusal rate actually represents. It is no good the Minister shaking his head, because that is a fact. If one talks to those who are scared off and do not bother to go through the bureaucratic nonsense of applying, one can see that if we were able to log that number it would not be 7 per cent. but would be nearer 27 per cent.

What does Shelter think of the Bill? Shelter sums it up very briefly as follows: Our central concern is that the Bill is solely concerned with employment and ignores the million families in the conurbations trapped in substandard houses. A million families … are trapped … as shown by the 1976 English Housing Condition Survey. Yet the Government's house improvement policy is in ruins and Shelter says that the Government are doing absolutely nothing about it. We need to take note of some of these indicators that are given to us.

I want briefly to see how this problem is being tackled in London by the GLC, with special emphasis on the inner areas. For example, in the years 1978 and 1979, the GLC will be making available £35 million to people who wish to buy their own homes in Inner London but who are unable to obtain a building society mortgage. This is a massive increase on the last two years' lending by the GLC. This concentration of limited funds on lending in the inner city reflects the need to increase home ownershop there. Only 19 per cent. of householders in Inner London are owner-occupiers as compared with 56 per cent. in outer London. Much of the low-cost property which attracts first-time buyers is old and often in a decayed condition and, therefore, would not be good security for a building society mortgage.

Concerning housing action areas, 39 have already been declared in Inner London by the GLC. The GLC intends to step up its declaration of areas in 1978 to provide assistance to those boroughs without the resources to improve the poor housing in their areas. I think that no one would dissent from those objectives.

I wish that my own borough of Camden would take note of what so often the Secretary of State has said—forget the bulldozer. Yet it is still going ahead with demolishing sound large houses against the opposition of local people because it does not understand that rehabilitation keeps communities together, instead of the destruction caused by massive redevelopment. Haverstock Hill is the latest example of what Camden is trying to do in defiance of the Minister's sensible policies.

However, one needs to look at Inner London as a whole. We have had circulated to us the comments of various local authority associations on this subject. I merely want to make one comment that will give some facts to show how deprived London is becoming.

Between 1961 and 1976, employment in London's manufacturing industries fell by 600,000, representing a loss of 42 per cent., as compared with a loss of 12 per cent. in England and Wales as a whole, with an increase in the rest of the South-East Region of 14 per cent. In 1961 London's share of United Kingdom manufacturing employment was 15 per cent. In 1976 it was 11 per cent.

In the inner city areas of London, as the Secretary of State and I know very well, resident male unemployment rates are significantly higher than the national average of about 6 per cent.—Poplar 14 per cent., Deptford 13½ per cent.—and the Secretary of State's constituency of Stepney 11½ per cent. In eight other local employment areas there was a rate of 7 per cent. or over.

I do not think that it is fair for the Secretary of State to try to differentiate between parts of inner London. I really cannot see the justification—I do not think that the Secretary of State's hon. Friends who sit for the other two-thirds of Camden can justify it—for putting Islington and Hackney into a partnership and leaving out Camden, because the proportion of unemployment has risen in Camden in almost exactly the same way as it has in Islangton and Hackney. It has trebled over the same period. It is really serious, and the Secretary of State should not differentiate in this way.

I want to get a few more facts perfectly clear. Time after time when we have tried to get London moving, the Government have cut the various plans. I take the Jubilee Line as the perfect example. The GLC had earmarked £121 million to start stage 2 of that line. The Government said "No". The GLC has now said "All right, we shall find the first amount from the GLC's £2 billion budget, by savings from that budget". Because this will provide employment, it means that the Government, instead of pouring money into British Leyland and British Steel just to pay wages, could put money into a project that would provide employment. But the Government do not do that. They ignore the problems of London and come to the House with this sort of Bill. I do not think that it is the sort of Bill that Londoners want, and it is not right that the Government should try to do this.

Mr. Spearing

Does the hon. Gentleman recall that, when the GLC elections were pending and Mr. Cutler said that he was going ahead with the Jubilee Line come what may, I asked the official spokesman of the Opposition whether, if the Conservatives became the Government, they would provide the money? The Conservative spokesman did not answer me then. Perhaps the hon. Gentleman will answer me now.

Mr. Finsberg

I do not think that we need to give the answer now. Mr. Cutler has said: We have said we would go it alone and we were not bluffing. The GLC has called the Government's bluff. The Government do not like their bluff to be called. The Government know that the people who are spending money in London are the ratepayers and not the Government, as I shall indicate.

However, I should like the Secretary of State to return to my earlier point, which concerned the rate support grant and Clause 6. It is perfectly true that this is a discretionary power. But if a local authority embarks upon payment towards rents in various areas, the Secretary of State has not said whether that would be allowed for in the rate support grant in all circumstances. The local authority, in good faith, will make the payments to which it is committed for a period, because the Secretary of State will give directions, and it does not know whether in the end its ratepayers will pick up the tab.

I want to look very closely at the figures, because they are important. I should like to look at the construction package, about which we have heard so much. The construction packages for 1977–79 total £28 million and cover the Docklands, Lambeth, Hackney and Islington. It ought to be made perfectly clear that these amounts are not grant but authority to borrow, and that approved projects included in the packages will be considered for urban aid grant at 75 per cent. of capital cost when no other grant is available. Therefore, the Government are not giving in the construction package £28 million, or, indeed, in the urban aid programme for 1978–82 £82 million in the same area. It is not grant. It is approved projects that will be eligible for urban aid grant when no other grant is available. This will probably be at 75 per cent. of revenue cost and not against capital cost.

What was said by my hon. Friend the Member for Henley (Mr. Heseltine) and my right hon. Friend the Member for Worcester (Mr. Walker) indicates that the Government have had to produce this mouse of a Bill. It really is a mouse of a Bill. No one can object to it, because it does not mean very much. But the publicity, the sheaves of Press statements that come out of Marsham Street saying what a marvellous thing it is, ought not to deceive people.

The Government may think that the Bill has some justification, but I do not think that we have heard that justification yet. Perhaps the Government think—this is a fair point—that the massive Government backing would provide the psychological backing needed to get the inner cities moving again. If they genuinely believe that, good; I like it. But I have not heard it yet, and I am not certain whether that sort of psychological warfare is part of the Secretary of State's armoury. I would not resent it if it were part of his armoury, but I do not think that he has thought this matter through sufficiently to be able to say that.

In the end, we need to say that the Bill will encourage the local authorities to do a job themselves. A form of pump-priming is needed, but I am not sure that we needed this massive Bill to do it, this massive Bill of nine clauses. The Secretary of State laughs. It is, alas, his trouble that he laughs before the end of the story. This massive Bill adds up to the chicken feed about which the hon. Member for Tottenham (Mr. Atkinson) spoke. His hon. Friend's remark contained more truth than the right hon. Gentleman cared to hear. If this massive Bill, massive in that context, does nothing else, it will provide the seed corn for people to risk their own money.

It is the entrepreneur who will bring back to the derelict areas jobs, houses and life. The Government do not bring jobs. They merely close factories and pay dole or redundancy money, as in the latest nonsense at Swan Hunter. That does not revive inner cities. Private enterprise will revive them, given the right conditions, and the right conditions will not exist until, amongst other things, the Under-Secretary of State for Industry now sitting on the Front Bench, the hon. Member for Keighley (Mr. Cryer), is no longer in the Government casting his baleful influence on profit making, which provides jobs.

6.11 p.m.

Mr. Joseph Dean (Leeds, West)

The Bill deals with only one aspect of inner city deprivation, but the Opposition Front Bench spokesman, the hon. Member for Henley (Mr. Heseltine), cast his net very wide. Some of the subjects on which he touched had little to do with inner city deprivation but were more related to local government as a whole.

I was glad to be able to agree with much of what the right hon. Member for Worcester (Mr. Walker) said. As a political party, the Conservative Opposition are bound to be critical of the Government, but we are entitled to look back to see what was the Conservatives' treatment of the bigger cities.

I was born in a deprived area, and until the outbreak of war I was one of a family of six who lived in a two-up and two-down slum house. I went to a school with 50 boys in each class. That may be the type of society the Opposition Front Bench wanted to retain, but I did not want it, and I played a large part in removing it from the city that I later represented at local level. I do not want to talk about the warmth of those communities, because I think it is a good job that most of them have been removed. Some of the things that have been said about the Bill have been completely on the wrong track.

I am disappointed that Leeds has not been offered a partnership, though it is on the additional list for certain types of assistance, and I have no doubt that discussions are taking place. Some of those cities that have not been able to obtain partnership agreements must look at their whole performance in the provision of some of the basic services and put their own house in order before they talk to the Government.

Compared with the overall spending of local government, the sum involved in the Bill is very small. The most massive sums are distributed through the rate support grant. I recall what was happening in 1972, when the right hon. Gentleman was Secretary of State for the Environment and I was chairman of the housing committee of the Association of Municipal Councils. The rate support grant was then so appallingly unfairly distributed that where the norm was that the local authority would receive 60 per cent. support, and find the other 40 per cent., the reverse was happening in the six largest authorities outside London and in most of the London boroughs. The Leeds, Manchester and Birminghams of this world were having to find 60 per cent. instead of receiving 60 per cent.

A deputation went to see the then Prime Minister, the right hon. Member for Sidcup (Mr. Heath). It was led by Bob Thomas, the Manchester leader, and leaders from Leeds, Birmingham, Liverpool, Sheffield and the other big cities. I think that Sir Lou Sherman, representing the London boroughs, was on the deputation, which had a special meeting with the then Prime Minister, who conceded that the cities in question were being shabbily treated and that they were really the deprived areas. The authorities were having to do a job that was being done in some places by authorities that were almost being given new town status, and they were having to do it from their own rate poundage.

The case was given a sympathetic hearing, but nothing happened. The Government said "We shall discuss it in our current rate support grant negotiations." I believe that this happened in the autumn of 1972. The right hon. Member for Crosby (Mr. Page), the Minister involved, started to make certain movements in favour of the big cities, but then he suddenly discovered, or was made aware, that if he did any such thing as he had in mind it could only be at the expense of the Conservative areas, the shire counties. Apart from a little extra for the needs element for the big cities, the money was all clawed back.

Just treatment of the six largest authorities and the London boroughs came only after the 1974 General Election, when the late right hon. Member for Grimsby, who unfortunately passed away at probably the peak of his career, made the equalisation order. There was panic on the Conservative Benches, and some of my hon. Friends also panicked, but even with the large percentage increases that were given, those with the highest percentage increases were often still paying the lowest rates, because the rates were so badly distributed at the time.

Anyone who examines the present structure of rate poundage charged by authorities will inevitably find that the big cities and even the smaller cities, as well as authorities in the conurbations, have to charge in support of their services a far higher rate poundage than some of the areas in the shire counties which are continually moaning. Therefore, although I concede that he initiated the first committee to look into the question, it is not good enough for the right hon. Gentleman to say that we are not doing enough, because the Conservatives did nothing, and they were the Government for four years.

The whole question of inner urban deprivation has been opened up by hon. Members who have spoken so far. The Bill is a pretty narrow brief, but hon. Members have widened the debate. The debate about inner city deprivation is about the quality of life within the areas concerned and what can be done to improve the position. I have already said that I am sorry that Leeds is not in a partnership, unlike its nearest comparable authorities and the others that were called "the Big Six" before reorganisation. Hon. Members will know the authorities that I am talking about.

The Conservatives always speak of the city of Leeds as showing what can be done in local government under the Conservatives, with very low rates. They say that they can save money, that they do not need to charge realistic rates, and that everyone is happy. A short time ago the Conservatives did a political broadcast in which the leader of the Conservative group which controlled Leeds was heavily featured. Shortly before Christmas the Leader of the Opposition appeared on "Weekend World" in which she said what a wonderful performance the Conservatives were putting up in Leeds on very low rates.

Therefore, I decided to ask a series of Questions. I believe that local authorities should always be given responsibility for the administration of some of the major services, such as education, housing and the social services. Lo and behold, I discovered that annual expenditure per child at school by Leeds was £100 less than that of the highest other big city and £40 less than that of its nearest neighbour, Bradford, which is a smaller authority.

Immediately those figures were were published in the Press the local politicians said "But we are more efficient." That will not wash, because the sums are too considerable to be written off as merely the result of efficiency. If we divide the money that is spent on social services by the population of Leeds, it is clear that Leeds is well down the league. As for Leeds housing record, over the past decade there has been a change from the city being one of the pioneers of local authority house building to its being almost at the bottom of the list of the major housing authorities. It has slumped from a position near the top to fifth place. That is at a time when there has been no restriction on new house building.

Mr. Heseltine

Would not the hon. Gentleman's argument be more impressive if he were able to show that examination results, the quality of schooling, housing or any of the genuine statistics, are inferior in Leeds? All that he is saying is that Leeds does not spend as much money as some other cities and gets better results.

Mr. Dean

I did not say that. I do not accept that it is possible merely to write off the fact that Leeds is spending considerably less than other local authorities. The lower expenditure of Leeds cannot be written off by putting forward the argument of efficiency. I imagine that other local authorities, especially Bradford, which is next door, would take a dim view of that argument. If we select any facet of local government, Leeds spending is well below that of other comparable authorities.

When the Conservatives took control two years ago their first act, which was a popular gimmick, was to reduce the rate by 6p. They did that in readiness for the next local elections. However, now they are approaching the Government cap in hand. They want additional aid. Whenever I table Questions about Leeds spending, the stock answer from the Tory politicians in Leeds is to the effect "It is the Government. We ask them and they do not give."

Nearly 12 months ago I was lucky to draw first place in the Ballot on Notices of Motion. My motion was on education. The figures showed that the pupil-teacher ratio in Leeds was the poorest in the list, and still has more than its share of slum schools. Once again we had the answer "We are more efficient". That is the theme that runs through a large authority that is charged with providing considerable services on behalf of the people.

If services in Leeds had to be improved to bring them to about the level of the services provided by other large cities, there would have to be a considerable increase in the rates. It may be that the increase would have to be phased. However, some Conservative Members appear on television, or take part in Supply Day debates, to cite Leeds as an example for other local authorities to follow. I wish that they would visit parts of my constituency.

Leeds was specially unlucky as a result of local government reorganisation. I know that all other areas consider that they were unlucky. My constituency has some nice parts, but the inner segment is an extremely deprived area. It is as bad an area as I have seen anywhere. In the reorganisation the boundaries of Leeds were extended quite considerably to include more affluent areas. The centre of Leeds has been somewhat "masked" by the inclusion of those areas.

The right hon. Member for Worcester has spoken of another tier for local authorities. From my recent experience it is clear that one of the features, blocking decisions on the implementation of the inner city programme, that has been sponsored by the Government, is the disagreement that is arising continually between the new metropolitan county authorities and the metropolitan county districts.

Where do we go from here? It is not on merely to say that the Government are blocking progress when the biggest mistake made this century was the most recent local government reorganisation, which has swallowed resources without producing any additional facilities or any different services. The reorganisation of the Health Service was also a great mistake. It must be remembered that the Health Service has to be included in any debate on inner city problems.

The hon. Member for Henley spoke about thousands of people waiting to buy council houses. The hon. Gentleman suggested that they needed only to be given permission and that they would be queueing up with their cheques to pay their deposits. He suggested that it is only the local authorities that are stopping that from happening. Let the hon. Gentleman remember that most of the large housing authorities became Conservative controlled following the previous local elections. The flood gates were then opened. Discounts were offered, in some instances amounting to 30 per cent., but there has been no flood. There has been no more than a trickle.

From where does the hon. Gentleman get his information? Does he get it from walking round Liverpool three times? I do not know to whom he has spoken but I am sure that Bob Paisley, the manager of Liverpool, or Bill Shankly, the previous manager, could have given him better information. If the hon. Gentleman comes to Leeds, he will find that there has been no flood of applications to buy council houses. That is the position, whether the Opposition like it or not.

In some circumstances I might support the building for sale of houses by the local authority, but where there is an existing housing shortage, as in Leeds. I would stop such sales immediately. I know that we are not debating the sale of council houses, but it is a fact that if a council house is sold it will cost the local authority twice as much as the sale price to replace it. If the Conservative Party is the party of economics, heaven help us.

I welcome the Bill as it is a step in the right direction. I hope that as we start to get the benefit of a stronger economy and increased resources from the newfound wealth in the North Sea, the oil revenue, we shall be able to give the highest priority, in a general sense, to the inner city areas. I do not think that there is a simpler way of doing it than by giving very much larger rate support grants. I hope that my right hon. Friend the Secretary of State will find some way to make reactionary local councils accept their responsibilities and to cease playing ducks and drakes with rate poundages for the sake of winning elections in May

6.28 p.m.

Mr. Stephen Ross (Isle of Wight)

The hon. Member for Leeds, West (Mr. Dean) may have criticised his colleagues unfairly in 1972–73 by not giving them credit for what they achieved. As far as I know, they were responsible for persuading the Conservative Administration to change the rate support grant formula to one based on regression analysis, for which my constituency has suffered ever since. Perhaps the hon. Gentleman's colleagues had rather greater success than that for which he gives them credit.

As for the sale of council houses, the contribution of the hon. Member for Hampstead (Mr. Finsberg) was interesting. The hon. Gentleman pointed out that the GLC is now selling vast numbers of its houses. It is entitled to do so. The Conservatives took power on that policy. What I cannot understand is the policy of the hon. Member for Henley (Mr. Heseltine) that the sale of council houses has to be compulsorily forced down the throats of local authorities.

Do the hon. Gentleman and his right hon. Friends believe in local autonomy? I gather that the right hon. Lady the Leader of the Opposition wants to give local authorities more say in their own affairs. If local Conservatives gain control on the platform of selling council houses, they should be allowed to do so within the reasonable constraints that the Government have set down.

Local authorities have a right to sell council houses if they wish to do so, but the borough council that has the largest number of council houses in my constituency, and which is certainly not a Liberal council—the housing chairman being a Conservative—has voted once more against selling its council houses. It is probably right in the circumstances that prevail in that area Why do we not leave the matter to the local authorities to decide on merit?

I acknowledge the powerful and knowledgeable speech by the right hon. Member for Worcester (Mr. Walker), and I want to put on record that it obviously came from the heart.

The hon. Member for Henley talked about tenant management schemes, leading on from that to tenants looking after their own affairs to a greater extent. As I understand it, some of these schemes are being carried out with some success in Newcastle and with limited success but some failures in Liverpool. He also praised that authority for building for sale. I agree. The hon. Gentleman did not, however, say whose achievement this was. He, and, indeed, the Government, might at least give credit for what has been done in Liverpool, where the Liberals have played so important a part. But I welcome the fact that the Secretary of State has since recommended all local authorities to move more in this direction.

Our inner urban areas should present an exciting challenge to those interested in reviving lively communities through the provision of satisfying working conditions, decent homes and schools, good recreational facilities and improved transport. In this connection I welcome the decision of the Greater London Council, taken, apparently, against Government wishes, to extend the Jubilee Line. The GLC must get the transport right if it is to develop the dockland area properly.

Mr. Spearing

The reply given by the hon. Member for Hampstead (Mr. Finsberg) when this point was put to him was clever, but the point is that Mr. Cutler of the GLC has gone ahead with test boring. I do not know whether he has gone further. We have heard nothing from the Conservatives as to whether, if they were in Government, they would make available the money that Mr. Cutler asks for.

Mr. Ross

I hope that the borings will lead to construction, which is what is needed.

The Bill also goes some way towards providing the necessary powers and finance to attract industry, which must form the backbone of any successful rehabilitation. It is, therefore, welcome in that respect. But it is limited in its application—indeed, so much so that one wonders whether it will have a genuine impact on these vast problems, which should be looked at in a much wider context, particularly in relation to housing, transport and recreation.

There are two great facets of inner urban area living—inadequate business activity and psychologically daunting living conditions. To deal with the situation comprehensively we need efficient communications—including, incidentally, for walking and cycling—a full range of housing provision, arranged in clearly identifiable communities and of differing tenures, so that we can get mobility, power to bring land on to the market for development, and good schools and healthy recreational facilities.

Some of these matters are dealt with by the Government in Circular 71/77, but the Bill can be criticised for the limitations placed on its application. I appreciate that the Secretary of State has already established seven partnership areas and 15 special areas and is likely to announce some more. But surely there is need to co-ordinate to a much greater extent the various bodies and the many grant-aided schemes that, used sensibly together, could make a genuine impact but which at present will inevitably be pulling in different directions. It is all getting far too complicated because of all these different types of area and different forms of grant aid.

Again, what about the work of the housing associations and producer cooperatives, for example? What sort of role can they play? Where do they fit into the Bill? In its brief to hon. Members, Shelter rightly draws attention to the need to extend the provisions to stimulate the rate of housing improvement. It is doubly important that we should do a great deal more in that direction. The right hon. Gentleman increased the range and scope of improvement grants last autumn, but in the inner urban areas we have to do a great deal more than that. The right hon. Member for Worcester recently pointed out that about 80,000 West Indians in some of our inner urban areas need good housing and decent jobs. I am sure that the improvement grant scheme can play some role in dealing with that situation in parts of inner London.

The services of housing associations are deeply involved in renovation and modernisation work, and they possess considerable expertise which must be fully employed, whether for the provision of short-life accommodation or of longer-term letting. Why not allow the housing associations to move into such things as the provision of craft centres and small workshops? I believe that this view is beginning to gain credence in the Department of the Environment. We must also make proper use of private initiatives instead of leaving everything to the heavy and often unimaginative hands of central and local government.

For example, such areas are natural places for experimentation in worker cooperatives. Where is the stimulus and finance to come from? It is not in the Bill, and I wish that it were. I draw attention to the recently published book by the Anglo-German Foundation on the Mondragon achievement. It should be compulsory reading for every hon. Member. There one learns of the revitalising effect of the fantastic increase in employment over the 20-year period from 1956 to 1975. In that time no fewer than 50 industrial enterprises with a combined turnover of over £200 million and a labour force of over 13,000 were created, and more have been launched since 1975. I am sure that Labour Members would go along with this approach in working for industrial and community rehabilitation of inner areas.

I want to see greater use of voluntary workers in things like tree planting and street maintenance, for example. Of course, we could do that in a wider context. I feel depressed when, in my own constituency, I see trees planted at the roadside blown over or otherwise damaged. Yet many local people are anxious to play a role in preserving or improving their environment. In my area, for example, many retired people would be pleased to go out and put the trees back in order and maintain them. I am sure that such a spirit applies equally to inner urban areas.

I am not, as hon. Members will appreciate, a regular reader of The Daily Telegraph, but I did read an article by Professor Denman the other day in which he called for the abolition of development land tax on inner urban land. I believe that his proposal merits serious consideration in view of the high costs involved in its redevelopment—for example, through irregular size, suspect foundations and so on. One way, I suggest, could be the replacement of DLT by a site value tax to be collected by the local authority. Once planning consent had been given, a site value tax would be put on and would yield a certain amount of money, based on the annual value of the site. This would have the desired effect of getting the land developed and should prevent hoarding for capital gain purposes.

The suggestion is not just an old Liberal chestnut but is recommended by no less an authority than the Civic Trust in its admirable publication "Urban Wasteland" three or four months ago. I also support its view that demolition should require planning consent, so preventing the wasteful or premature destruction of useful buildings. I draw that to the right hon. Gentleman's attention. The point should be taken on board.

In considering the further encouragement to small businesses that we need so desperately to establish, I ask the Government to consider the proposal in The Economist this week that small businesses should be freed from some of the bureaucratic operations which so often stifle their success by registering them in a dif ferent form. The article suggests that they might become incorporated instead of limited liability—but that, I think, is more a matter for the Chancellor of the Duchy of Lancaster, or perhaps rather more for the Chancellor of the Exchequer.

I remind the Secretary of State that it is not just our inner urban areas that need reviving. Many of our old market towns need it as well. I live in one of them, with a derelict pub on one side and an empty house on the other. Many of our old market towns are facing similar problems, and, indeed, whole villages whose source of employment used to be agriculture or mining are rotting away. It is in these areas that the Development Commission can play such an important role. Given the chance, I am sure that it would succeed. It has a good record already.

I am sorry that, as became evident yesterday, we are still using depopulation as a basis on which to decide the role of the Development Commission. It is to my sort of constituency that many of the people from the inner urban areas have come to retire. We have an increasing retired population, and it is not contributing to employment in the area. Nearly 25 per cent. of the population in my constituency are retired, and I believe that similar figures could be given for parts of the South Coast and the West Country. Depopulation should not be the criterion for bringing in the Develoment Commission.

I have today been to the exhibition of international crafts in Birmingham, and I feel very envious of the work of the Development Board for Rural Wales, which has taken a complete train to promote the crafts of Mid-Wales. The Highlands and Islands Development Board has also been very successful in assisting in the sale of craft goods produced in areas which formerly had high unemployment. I wish that we had their money to enable us to do the same sort of thing in my constituency.

Although I welcome any measure to bring new life to our inner urban areas and meaningful employment to their inhabitants, I do not think that we yet have the right overall structure to coordinate the activities of the many bodies which will be involved. The Mondragon achievement got off the ground through the efforts of Father José Arizmendi; he was the initiator. It is necessary to have some similar powerful person to get these schemes together. We have heard about the counties and the districts falling out. The Secretary of State wishes to make changes in this respect, and I support him, but they will not happen quickly. I wonder whether we should not look to the American system—although not for everything—and certainly to the French, and consider whether we should have an elected mayoral system in this country. Someone will have to knock heads together and get things done, and that might be one way to do it.

6.42 p.m.

Mr. Tom Litterick (Birmingham, Selly Oak)

It might help us to get the Bill into perspective if we reflect that, for example, in the case of Birmingham the amount of money that will be put into Birmingham as a result of the passage of the Bill will be less than the amount of money taken away from Birmingham's budget by the Chancellor of the Exchequer's various cuts, and by those cuts made autonomously by the Tories who have run Birmingham since they took it over.

As somebody said, it is chicken feed, although it goes some way towards putting right some of the damage that has already been done by the damnable inflationary strategies which have been pursued with dogmatic enthusiasm by the Treasury Bench since we came to power. They have contributed their mite, by their economic policies, to the ongoing destruction of our inner urban areas. Let us not forget that.

Let us not forget either that that policy is a direct continuation of the policy that was pursued by the mob on the other side of the House when they were in power. They, too, attacked the cities. They, too, used the same bloody-minded dogmatic economic policies which have been applied to us for the last three years by the Government, and the whole country is having to reap the consequences.

The debate has an unusual dimension to it compared with our usual debates, because it dramatises in an interesting way the fact that in this House we have the town party on the Government side and the country party on the Opposition side. Only a handful of Tories come from urban constituencies. That is one reason why their opening spokesman could be so barbarously and brainlessly irrelevant throughout his speech. Perhaps the fact that he is a director of four property companies has something to do with it.

I noticed that the hon. Member for Henley (Mr. Heseltine) did not declare his interest, and it is a pound to a penny that the four property companies of which he is a director are very much interested in urban renewal in an old-fashioned way. How much money is in it for him? It may explain why he is so keen on talking to us about capital gains tax, development land tax and so on. He has a personal interest in this and in any Government policy likely to put money into the hands of property speculators. He is a property speculator, and he did not have the guts to tell the House this when he opened the debate in such a disgusting fashion for his own side.

I had hoped that this subject, above all, would prompt this House into remembering that the problem of urban degeneration is an international problem, one that has been created by urban man and by the urbanisation of society. But not a bit of it. The bon. Gentleman made one reference in passing to that simple fact and then went waltzing off on his dogmatic, self-serving line which did no credit to his party. The right hon. Member for Worcester (Mr. Walker)—the one civilised Tory in the whole regiment—showed him up very dramatically. The right hon. Gentleman is a Tory who is prepared to consider the fact that towns are places for people to live in, not just to work in and make profits for somebody. They are places in which to live, and perhaps to live fulfilled lives, but so far only the right hon. Gentleman has been prepared to think about that. The nut on the Tory Back Benches could only go on about how his local London borough council intended to build a Tube station, or something of that sort, and was wittering on about how much money could be made for somebody if only the free market could be allowed to have its head.

I wish the House would remember that living in cities is a modern thing, by which I mean that it is a phenomenon only of the past 200 years or 300 years for a significant number of people. With a very small number of exceptions, living in cities has been bloody awful for most of the people who live in them. The novels of Daniel Defoe are mostly about urban life in London, which was a very unpleasant place in which to live. The novels of Dickens show us what London was like in the nineteenth century, and again we discover that for the majority of people it was a hideous place in which to live.

Jane Austin did not write about people who lived in cities. She described only environments which were intrinsically pleasant, open and sparsely populated. Dickens described a world which is familiar to us—a world in which people live cheek by jowl, on top of one another. Both Dickens and Defoe described urban worlds which had been created by a free market economy in which there was no State intervention at all and in which there was no planning of any sort.

Indeed, the first beginnings of any kind of town planning at all in this country took place when the owning class, whose representatives filled this House, suddenly discovered that the diseases emanating from the working class in the cities threatened to kill them. They were prepared to vote public moneys to build sewage systems and water systems which made sure that they would not be killed by the diseases of the undernourished working classes. That was the only reason for doing it, and again it was self-serving. This, too, was a reflection of the fact that the free market could not build a city in which people could actually survive. The State, the municipality, had to interfere to prevent the free market quite literally from killing people.

Mr. Peter Blaker (Blackpool, South)

Has the hon. Member compared the housing situation in the Soviet Union with that in the United States? Is not the Soviet Union perhaps the most striking example of the planned economy?

Mr. Litterick

I have not the faintest idea. I do not have the hon. Gentleman's familiarity with the Soviet Union or America. What I know is that in America, according to what I have been able to read, there are urban problems which are very similar to our own, and I understand that the Americans have never had a Socialist Government.

Mr. Blaker

What about the Soviet Union?

Mr. Litterick

I have never heard of the Soviet Union's urban problems, but I know that in both West Germany and East Germany, as I was trying to tell the idiot who opened for the Opposition—[Interruption.] He proved it at great length. I tried to point out that in both West Germany and East Germany the problems which we are talking about do not exist. The reason is that the State in both West Germany and East Germany took a firm hand in reconstructing the cities in such a way as to make them habitable. The hon. Member for Henley made a joke about it when I intervened, seemingly forgetting that our cities were devastated in the same way as the German cities. But the opportunity to reconstruct and renovate our cities was not taken. That failure is attributable to successive Governments.

Since the pioneering work in the last century of people like Patrick Geddes and Lewis Mumford, we at least know in theory what we ought to be doing about our cities. Those men produced sensible theoretical works based on the practical experience of working in town planning and so forth. They were the pioneers in town planning.

It is only recently that this has become fashionable, not because urban life is a new thing but because larger proportions of the developed world's population actually live in cities. We are suffering from the sins of omission of generations of capitalism. We must somehow or other demolish those sins of omission and put something else in their place.

That something else has to be a set of cities and towns in which people will actually want to live. We know that the normal reaction of people to city life is to flee from it. They flee from it at the weekend, if they have a motor car, or simply flee from it altogether and never want to come back because cities are such unpleasant places. It is a fact that the centres of our cities are now more thinly populated than a decade or 20 years ago simply because people do not wish to live there and because they are such unpleasant places.

It is hopelessly inadequate for the hon. Member for Henley to blether on about making these places somehow more attractive if local capitalists can be allowed to make more profit. Only two days ago, the Birmingham Tory Party announced through one of its mouthpieces that it would like to create a tax-free zone in the centre of Birmingham and then all would be well. The fool obviously did not realise that Clauses 2, 3, 5 and 6 probably give as much opportunity for the individual capitalist to make money—that is, public money—out of his own operations as would any kind of rates amnesty.

"Give concessions to capitalism", the Tories keep saying, "and all will be solved." There is no evidence of that in the citadels of capitalism in North America.

The Bill, of course, is offering inducements in Clauses 2, 3, 5 and 6 to capitalists to come into these areas and create work. It is not a housing Bill. It is a mistake to criticise the Secretary of State for the Environment for the fact that it does not deal with housing. We should remind ourselves that the major components in the quality of city life are housing, transport, education and recreational facilities as well as the opportunity to work.

These other major aspects are, and should be, the subject of other major pieces of legislation, some of which are already in operation. But if we do not look, for instance, to the quality of housing in cities, I do not see how we can pretend that this Bill matters at all, since houses are where people spend most of their lives.

While, at the same time as the Secretary of State for the Environment is bringing forward this Bill to inject a little money into certain aspects of city life, the Chancellor is removing money from the housing budgets of the major cities, on balance the cities are not doing very well. Not until housing budgets are significantly increased can we expect to see a major improvement in the quality of town life in this country.

I should like to be parochial for a moment as other hon. Members have been in respect of their own areas. I mentioned to the Minister of State yesterday that I was somewhat disappointed to see the definition of the partnership area. Moseley, in my constituency, suffers from multiple deprivation. It is included in the partnership area. I must point out again that the omission of the Bournbrook area of Selly Oak is serious because the deprivation there is as serious as Moseley or anything to be found in Small Heath which figures largely in the well-known unequal city report.

Contrary to the fantasies of the hon. Member for Henley, the people of Selly Oak are actually clamouring at the doors of the local authority to participate, influence and be involved in making decisions about their community. It would be a tragedy if the strategies that are being pursued as a result of the partnership policy resulted in a pre-emption of resources at local level—we know that discrimination in the allocation of resources is involved in the Bill—so that their interests were severely damaged.

The whole area of Bournbrook has been in decline for well over 20 years for a number of reasons, all of them familiar to people who have examined urban problems. It would be wretched if the usual mechanics of local politics in towns were allowed to operate in such a way that local politicians could syphon off the available resources for very many projects in the middle of the city, which might have politically advantageous consequences. For the people of the Bourn-brook area, however, that would be devastating, because, in effect, they would yet again be consigned to another generation of constant degeneration and hopelessness. That would encourage more people to flee to the periphery of the city, thereby enlarging the area of degeneration throughout the once great city of Birmingham.

The Minister ought to appreciate that this is an important omission for Birmingham. It would be of great help, and much appreciated in Birmingham, if when replying to the debate he could give the people of Birmingham some assurance that that eventuality is not likely to happen as a consequence of the operation of the policies implicit in the Bill.

6.57 p.m.

Mr. Andrew MacKay (Birmingham Stechford)

I shall not be drawn by some of the red herrings which the hon. Member for Birmingham, Selby Oak (Mr. Litterick) introduced into the debate. It would be tempting to reply to some of his intemperate language and comments about my hon. Friend the Member for Henley (Mr. Heseltine), particularly when he suggested that my hon. Friend knows nothing about industrial areas because he represents a constituency like Henley. If I recollect correctly, the hon. Member for Selly Oak, who represents a seat in Birmingham, has not and never has lived in the metropolitan area or in the city but lives in the lush pastures of Kenilworth, near the castle.

Mr. Litterick

I was born and brought up in Strathclyde, as it is now called. I spent some of my formative years in Coventry and worked in Birmingham for eight years before I became a Member of this House. I also lived in Coventry for 10 years. I know about city life, which the hon. Gentleman does not.

Mr. MacKay

Many problems in urban life have developed and become even worse in recent years. It is a pity that the hon. Gentleman still does not live in an urban area. I shall not pursue this matter, because I believe it is important to try to be as non-partisan as possible in this debate.

I believe that the immense problems in our urban areas are too important for hon. Members to score party political points.

It is vital that we show to the people of the urban areas our care and concern. We should not allow this debate to degenerate into the sort of debates that have brought politics in this country into disrepute with members of the public, particularly those who are suffering greatest in our inner urban areas.

I want to return directly to considering the Bill. I have studied it carefully and I certainly do not oppose it. I feel it does no harm for hon. Members on both sides to put questions to the Secretary of State. Indeed, I think that for once the right hon. Gentleman is on the side of the angels. I believe that he should therefore be given backing by hon. Members on both sides of the House, though with certain reservations.

I give one word of warning to the Secretary of State and to the Minister for Housing and Construction, who, I gather, will be replying to the debate. Their publicity machine has done much to tell the public about what they are going to do for urban areas. Do they not think that they are promising a little too much? Are they not raising hopes a bit too high? Should they not cool it just slightly? The right hon. Gentleman knows that the problems are great and that they will not easily be solved by this Labour Government or by a Conservative Government. The problems will take a long time to solve. Therefore, I ask for moderation in publicity.

I am mindful that many other hon. Members wish to speak in the debate. Therefore, I shall make three brief points.

The first is in support of the intervention made by the hon. Member for Liverpool, Walton (Mr. Heffer), who said that the key to the whole problem in the urban areas lay in the derelict land and the lack of houses in city centres. The Bill deals with factories and employment in our cities. I suggest that if we concentrate on building houses in the inner cities the factories and the jobs will come naturally. In this age, when the cost of travel to and from work is so considerable, I believe that companies will be only too pleased to move their factories into the inner cities if they know that there will be a work force willing to work in those factories.

Yesterday the Minister for Housing and Construction gave me some information about derelict land in Birmingham. He said that there were 1,920 acres of derelict and waste land in that city. That, I am sure he will agree, is a frightening figure. I believe that in other cities the figure is even larger. We must ensure that not only derelict and waste land but unused land is brought into immediate use for house and factory building.

I congratulate the Birmingham City Council on selling much of the land that it owns to private developers for the building of houses for first-time buyers. In the interests of the House—particularly the hon. Member for Selly Oak—I should declare my interest. I am a consultant to Birmingham Housing Industries Ltd.—a Birmingham-based house building company. If planning authorities act with care when they sell land as Birmingham has done, they can specify, through their planning approvals, that the houses to be built should be of the type and size that first-time buyers will be able to afford. Secondly, they can stipulate that the houses are to be built quickly. That will stop speculators buying and holding the land for gain.

I firmly believe, as does the Minister for Housing and Construction and many hon. Members on both sides of the House, that private house building is important. The right for people to buy their own homes is vital. I look forward to the first-time buyers' Bill—the Home Purchase Assistance and Housing Corporation Guarantee Bill—which I understand is to be brought before the House in the not too distant future. I appreciate the efforts being made through the introduction of that Bill and wish it every success. Therefore, we should encourage local authorities to sell land in the inner areas.

Again, I congratulate the Minister and the Secretary of State on encouraging Government-controlled organisations, nationalised companies, water boards. British Rail and so on, which own land to sell such land. Will the right hon. Gentleman encourage and push them to sell their land as quickly as possible? It will be in the interests of all, because money from the sale of such land will be brought back into use for the public good.

We are all aware that in inner areas there is land in private ownership, whether by individuals or companies. Many private owners are not prepared to sell their land. I share the view of the hon. Member for the Isle of Wight (Mr. Ross), who made an excellent speech, that development land tax is the reason why private owners are not disposing of their land. I realise that the Minister disagrees with me on this matter, so there is no need for me to pursue it. However, I make one suggestion to the Minister as I am trying to be as bipartisan as possible. Will he consider reducing the rate of development land tax on owners of land in certain inner areas as an inducement to sell? That would be a logical compromise between our views.

Another area of derelict land is that to be used for bypasses and roads—areas affected by what is loosely termed "planning blight". We must encourage local authorities and, in turn, the Department to make their plans clear. If there is no prospect of a bypass being built in the foreseeable future, I suggest that the plans should be scrapped. That would remove the planning blight and allow the people to develop the areas affected. I should appreciate the Minister's comments on that matter.

I am sure that the Minister will agree that it is important to ensure that we get the economic factors right and encourage small businesses by cutting as much red tape and taxation as possible.

Another reason why people do not go back to inner city areas is the problem of law and order. I hope that the Minister will pass on to the Home Secretary the message that we must improve law and order in inner city areas. We can do that by paying the police more and by increasing the punishments for crimes of violence and vandalism.

There is also the problem of immigration. The majority of immigrants move to inner city areas and create great problems. We must give special aid and encourage them to disperse further out. One reason why immigration should be stopped as quickly as possible—I realise that Labour Members disagree—is that it is not fair to immigrants or to people living in inner city areas to allow further influxes of immigrants because they will invariably go to certain deprived areas, not to areas which are able to cope.

I am glad that the hon. Member for Bristol, North-West (Mr. Thomas) has returned to the Chamber, because there are not many occasions on which I agree with him. However, I entirely agreed with his intervention when he asked the Secretary of State whether the Bill and the partnership agreements were wise in view of the problems of the inner areas. Those problems are great and have already been described. But there are considerable problems in the outer suburbs—certainly in Stechford and no doubt in Bristol, North-West. We all know about the bulldozers coming in and knocking down houses. That was a great mistake. They merely left the inner cities empty.

Under both Labour and Conservative Governments large council estates were built in the outer suburbs. The problem was that we did not build the facilities to go with them. Stechford is desperately short of recreational and other services and facilities. The problems for people on these estates are as great, if not greater, than those for people in some inner urban areas. These estates have no soul. Whatever we thought of the slums that we knocked down, they had one asset—community spirit. People had a sense of belonging. These large new estates—certainly in my constituency—do not give that sense of belonging. That is another reason why the bipartisan approach is vital.

We need to refurbish rather than to knock down houses. It makes sense from a financial point of view, because it is cheaper to refurbish than to knock down and rebuild. It makes sense because it keeps existing communities intact, it does not despoil the green belt and it does not put people in outer suburbs from which they have a long way to travel to work.

Therefore, I ask the Minister to take account of the problems of the outer suburbs, at the same time in no way decrying the fact that we are considering the inner suburbs.

That is all I wish to say now, but a lot more can be said in Committee. However, I am aware that many other hon. Members wish to speak in this debate.

7.10 p.m.

Mr. Jim Craigen (Glasgow, Maryhill)

Along with many other hon. Members, I welcome the attention that the Government seem to be giving to the problem of inner urban areas as expressed first in the White Paper and now in the Bill.

"Massive" was not the word which came to my mind when I first saw the Bill. I think that it seems rather modest, and I wonder whether it will be successful in seeking to reverse the tide of postwar urban planning history.

In the last century, the main problem facing urban areas was the influx of people to live and work. Since the war, and in Clydeside particularly, we have been operating overspill programmes so that people would move into new town areas. There has also been another voluntary overspill with people moving into suburbia around the cities.

I acknowledge the work that the Government are doing in respect of the Glasgow East End Project. It does not affect me directly, but it has come to my attention that there is a certain duplication of effort and resources between the Scottish Special Housing Association and the Scottish Development Agency. It is a case of there being too many cooks in the kitchen and most of them fairly highly paid. There has not always been a concentration on the ground about doing something in the community.

I hope we shall be more successful in the comparatively mini project on the Maryhill Corridor. I am glad to see the Under-Secretary of State for Scotland, my hon. Friend the Member for Glasgow, Provan (Mr. Brown), in the Chamber. No doubt he will confirm that whereas the East End project is being largely overseen by the SDA and Strathclyde Regional Council, the Maryhill Corridor project, which affects my constituency as well as that of my hon. Friend the Member for Glasgow, Kelvin-grove (Mr. Carmichael), is spearheaded by the district council through its local plan. I hope that the attention of the Scottish Development Department and other agencies will be drawn to the need to offer encouragement to this project.

One point that has come out in this debate is the fact that urban decay is often associated with the problem of community decay. It has been heartening to see the emergence of greater pride in the communities since the setting up of some community councils in Glasgow. If we are to instil pride in the community obviously both the Government and the local authority must encourage this wherever possible. The absence in many inner city areas and peripheral areas of suitable recreational and adequate community facilities is a major drawback in life in these areas.

I thought that the White Paper scanned over the urban scene without adequately defining the objectives. How do we envisage our cities in the year 2000, which, after all, is only 22 years away? Will our cities be better or worse places in which to live? I have a great fear that it may prove to be the latter.

People have been telling us with their feet that they do not like city life as much as they did in the past. They have been moving to the new towns and the suburbs. It has been mainly the skilled element within our society that has been able to move. Will the planners be as unsuccessful in getting "community transplants" as surgeons have been in making suitable heart transplants? There is a problem of rejection in communities which is every bit as great as rejection in the medical sense.

Another problem within city areas is immobilism. We seem to be running fast here, and often because of the sheer array of agencies dealing with the problems, and yet virtually at a standstill.

I hope that we shall tackle the yawning gaps that exist in many central areas. These gaps should be highly prized because they are so central. One finds that many of them are owned by British Rail or the British Waterways Board, and the conditions under which they are expected to release their land are those of commercial return.

Another area which the Scottish Office should examine is the problem of derelict tenements where the people have been rehoused. The tenements stand defiantly, because of the legal problems of tracing the former owners who have long since abandoned their property. I hope that the Scottish Office will look into this and ensure that the planning process is speeded up.

The White Paper—and to some extent the Bill—is right in saying that the employment factor is the key to doing something towards improving life in inner city areas, by providing more employment opportunities not only for young people but for older workers as well. In doing this, we shall increase the purchasing power within the local community.

One of the problems is the substantial proportion of unskilled people living in inner city areas. That was brought out in the White Paper. I have already raised the matter of our new skillcentre in the Glasgow area and I hope that this aspect of training policy will be considered.

The new towns have had a great advantage over the years not only in respect of green field sites for industrial development but also in facilities for housing and in some industrial thrust. If we were able to apply this, we could attract new firms into the inner city areas.

I have questioned the Secretary of State as to whether it should be the task of local authorities, in effect, to subsidise from rates incoming industry or small firms that are about to move into new premises. This seems to be adding to the rate burden that local authorities already must meet. Moreover, there is evidence that some firms are moonlighting to enjoy the benefits of rental relaxation.

I am not happy about the way in which the Bill deals with rate support grant in respect of local authorities. What happens in an area such as Glasgow, where the city faces a future of population decline and where the age structure in the city is such that the financial resources of a sizeable section of the community must inevitably diminish as the years pass? There will be a surplus of housing but a shrinking of the economic base. If we are relying totally on rate support grant as a means of trying to encourage firms, I believe that we shall not improve the employment position as effectively as we must.

We cannot overlook the inter-relationship of services such as transport, recreation, educational and community facilities, employment opportunities and life within our community. I hope that in the work which now appears to be done on the problems of inner city areas the difficulties encountered by people in the use of transport will be given a much higher priority than they have been given in the past. I am referring to the availability of transport and also to the cost of moving about from place to place, particularly moving from home to one's place of employment.

7.22 p.m.

Mr. Anthony Steen (Liverpool, Wavertree)

We are all agreed that the purpose of the Bill is to improve the quality of life and the quality of work in our cities. Yet it should be made clear that the Bill covers only one paragraph in a White Paper containing 103 paragraphs. In his reply, will the Minister say what is his timetable for bringing into effect some of the recommendations in the other 102 paragraphs because the Bill as drafted has extremely limited consequences?

The sole result as I see it is to increase the powers of local authorities. Will this not create bigger bureaucracies if the Bill is to be effective? Surely the Government have wide experience of the problem of introducing legislation, namely, that a large number of Bills which have come before the House and which have been passed have been totally ineffectual because the local authorities have not the resources or the manpower to put them into practice. Will the Minister say how the Bill will operate in practice? Will it require much more bureaucracy, and will it be possible to put it into effect?

It is odd that the Government have chosen the local authority as their work horse. The local authority is the one agency that has an appalling track record in dealing with industry in the cities. City councils have been responsible in the last two decades—and this applies to councils on both sides of the political spectrum—for the demolition of the inner areas. Because of this demolition, jobs, homes and factories have been taken away from those areas. Skilled people left for the new towns and for the greenfield sites beyond. In inner Birmingham 6,000 businesses were displaced as a result of the demolition by the city council of the inner area. Liverpool lost 80,000 jobs in the inner area as a result of the local council's policy.

It is curious that the Government have chosen city councils, which have a bad track record, to rejuvenate local industry. The most pressing problem in the inner cities lies in how to revive vacant and derelict land and to increase the rate base.

Mr. Arthur Blenkinsop (South Shields)

Does the hon. Gentleman agree that a great deal of movement in industry came about because of the determination to obtain sites which afforded better transport and other facilities rather than concentrating on old areas in cities? Are we not mistaken in believing that we can bring that kind of industry back to these areas?

Mr. Steen

The problem is that the rents charged for green field sites outside city centres were more attractive for industrialists starting from scratch than the high land value in inner areas. Therefore, industry pulled out.

Mr. Mike Thomas

Surely it is clear that most modern large-scale industry cannot exist on inner city sites. There is no room for expansion in the first place. Surely that is the crucial problem rather than the matter of rents.

Mr. Steen

The hon. Gentleman misses the point of my argument. I was saying that 6,000 small businesses in Birmingham which closed were not large but small businesses. In other words, the 80,000 workers who left Liverpool were in not large but small firms. As a result of demolition in the areas, industry has moved out. An interesting point is that 100,000 jobs have been created on the outskirts of Liverpool. Therefore, the inner city has been derelict and without work.

The most pressing problem is how to revive vacant and derelict land. We shall lose the rate base so long as we are not bringing that vacant and derelict land into productive use. We are just not obtaining the rate base to provide the resources to run services in inner areas. If one analyses the rates, one sees that the outer owner-occupiers and ratepayers are subsidising the inner area services.

The first priority of this Bill should have been aimed at involving those who own vacant land in bringing that land into productive use and thus contributing to the wealth of the city. We do not need so many subsidies. The Bill is based on subsidy. We should seek to bring derelict land into general use. In Liverpool the survival of the city depends on the ratepayer in the outer areas rather than in the inner areas. They get bad value for money for the rates they pay. Therefore, we must analyse who owns the land.

So far as I can see, in most of our major cities the majority of the vacant land is owned as to 60 per cent. by local authorities. The rest is owned by the nationalised industries such as the railways and water authorities. We must build small businesses on those sites.

The second problem that results from bringing this derelict land into circulation relates to where people are to live. If small businesses are pulled down and vast areas demolished, there is nowhere for people to live. Unless one has a good public transport system, they will not want to live outside the city. They want to live reasonably close to where they work.

The Bill is deficient in seeking to deal with derelict and vacant land, and the Minister might like to say whether he has plans for future Bills. I should like to see a clause providing that local authorities should not continue to hoard land but should auction it off. If nothing constructive is done by the local authority to deal with that, land, it should be put on the open market for public auction. If that happens, it would bring in a new life force.

The other more sinister aspect of the Bill is that the poorest local authorities—the partnership authorities—will be asked to borrow money. The local authorities are being given some money only as a carrot. They will have to borrow some money on the market, and I believe that this will store up more problems for those poorer authorities in the coming years.

The problem of creating new industry and new jobs in the inner cities is one aspect of the Bill. The other aspect is concerned with what is called partnership.

The word "partnership" is part of a string of what I call weasel words that the Government are very prone and gifted to use. They are words which deceive people into believing that something is being done when nothing is being done at the grass roots. Many of those words are used in the community field. There is the community development project. One thing that it did not do was to develop communities. There is the National Enterprise Board. We are still to see some enterprise from it. There are community projects, quality of life projects, one after another.

Such words tell one about a scheme which is not happening at the grass roots. "Partnership" is another example. One thing that the partnership does which all other Government measures have done is to say that the Government and local government must work together. That has been happening for a decade or more. The curious thing which is different about the partnership agreement is that it excludes the very people living in the city itself. There is an argument that they will be included.

In Liverpool a partnership committee has been set up which is chaired by the Minister. There is an officers' steering group. There is an inner area subcommittee made up of councillors. There are policy and finance committees and a working group consisting of all the heads of the local authority departments, but no voluntary community or neigh bourhood organisations are involved in decision making.

Mr. John Sever (Birmingham, Ladywood)

Will the hon. Member take it from me that when I, living in the centre of Birmingham, which is in one of the core area wards, and recognising that I have a seat on the local authority of Birmingham, applied to the Conservative leader of the city council for permission for either myself or one of my colleagues to sit on this committee in order to put into the work of the committee that to which the hon. Member is referring, he flatly refused?

Mr. Steen

Yes, I sympathise with the hon. Member for Birmingham, Lady-wood (Mr. Sever). The answer that I received from the Secretary of State for the Environment at Question Time about a month ago was that the place for voluntary and community organisations was not the decision-making point. The directive seems to be quite clear from the Government downwards or upwards—whichever way one looks at it—that the people themselves should not be involved in decision making, but they can be consulted. That is the unique part of the partnership agreement. The word "partnership" suggests tremendous togetherness. The one thing that such an agreement excludes is togetherness.

I sympathise greatly with the hon. Member in his problem. In the last 10 years there has been a string of urban poverty projects. Each one, as hon. Members must know, has pointed to the need to involve people at the point at which decisions are made. It may be very tiresome and tedious and make the process much longer, but at least we are involving the people whose future will be affected.

I hope that the Minister in his reply will assure partnership areas that the people who live in them will be involved in decision making and not just in consultation. The Government decide the partnership areas. The Minister said yesterday that he could not tell us the extent of those areas; they were a matter for the partnership committees. When I look at who heads the partnership committees, I see that in Liverpool it is the Secretary of State for the Environment. Therefore, perhaps the Minister can explain why the inner city of Liverpool includes an area five miles from the core area, which happens to be the area represented by the hon. Member for Liverpool, Garston (Mr. Loyden). It is a deprived area. There are many other deprived areas. Some of them are in my constituency and there are some in other parts of Liverpool.

What are the criteria by which the Minister decides that this area five miles from the core should be included in the partnership inner area? I suggest that there must be other considerations. One does not want to suggest that there is a party political motive. It may well be that all the areas represented by Labour Members are the poor areas and they are the partnership areas.

It is curious that the old housing has been included in the Liverpool partnership area but not the new housing. The Minister has fallen into the trap of thinking that old houses are the ones that need help without actually thinking who lives inside them. In my experience, the most unhappy people in my constituency are not those living in older houses in which there is a strong sense of family community but those on the vast council estates on the edge of the city, where there are no community and social facilities.

As the Bill progresses, the Minister might like to extend the definition of "partnership" to include the vast tracts of modern council housing which are as seriously deficient as the old ones. The Secretary of State must remember that the people who live on those vast council estates are the people who used to live in the inner urban areas. When their houses were demolished the people were transferred to those peripheral estates. The problems are of the people who are in the inner areas rather than their houses. The Minister may have overlooked that point.

The Bill should deal with a different category. It should deal not with the age of housing but with the problems of people living in them. That is what the Conservative Party is concerned about. The Minister knows that I have been a critic of the partnership schemes. I see them as a smoke screen. Liverpool is a good example. There have been more urban schemes in Liverpool than in any other city in the country. We have had the urban aid programme, community development projects, an educational area experiment, a neighbourhood project, a quality of life study and an urban deprivation unit that is very interested in what we have been doing. My right hon. Friend the Member for Worcester (Mr. Walker) introduced the inner area study in inner Liverpool, and there is a cornprehensive community programme trial on the Wirral, over the water.

One would have thought, with all those experiments, that Liverpool would be a very much happier place, better-looking and able to say "Look at what the Government have done". Ten years have passed since those projects were introduced and yet Liverpool looks worse off. The partnership agreement, with the money that it brings in, does little more than make up for the money that we have lost over the last four years, for example, in improvement grants and local authority mortgages. It does not give us very much fresh money. It merely replaces the money which has been withdrawn from us over the years. It is a very suspect Bill if it says that it will give us more money.

I have a further point about which I should be grateful if the Minister would consult his hon. Friends. This is indicative of how the Government are working. On the one hand, the Government declare a partnership agreement with a city. On the other hand, other Government Departments take things away. Liverpool Airport has been downgraded to a category C airport. There is a possibility of its closing, with a loss of jobs.

Then there is the freeze put on the building of a new magistrates' court. This resulted in tremendous problems of vacant land not being used. We are now told that, in spite of the partnership, there will be £2½ million worth of cuts in the public bus and railway services of the inner city. Even if people could be persuaded to come back, they would not be able to get about. The Minister should realise that there is no point in declaring partnership arrangements if another Government Department takes away all the benefits.

The Bill is irrelevant because it does not deal with important issues. It tends to be misleading and suggests that the Minister has not begun to understand that the problems of the cities are about people and not buildings.

7.40 p.m.

Mr. Arthur Palmer (Bristol, North-East)

In the early part of his speech, the hon. Member for Liverpool, Wavertree (Mr. Steen) described without understanding the causes a number of the symptoms of what happens now in the inner parts of our cities. I think that the fundamental causes are not the wickedness of individuals or the plans—or the lack of them—of local authorities, but technical and technological changes which have taken place over a long period. That is why people no longer live close to their places of work. With the development of the internal combusion engine they can move about easily, and employers can also get electric power anywhere, which means that the exact siting of industry does not matter as it did in the past.

I represent the old, inner part of a city, and I am surprised that my right hon. Friend the Secretary of State does not rate Bristol's problems as being very great. I put a Question to him fairly recently asking whether Bristol would be included in the arrangements to which this Bill proposes to give statutory force. My right hon. Friend agreed that Bristol had problems, but he said that they were not as great as those of many other parts of the country. He may be right about that, but I wonder how he knows. That is what puzzles me. How can my right hon. Friend or his advisers decide so arbitrarily that Bristol's problems are less than those of other areas?

I am not necessarily blaming him for it. It is a subjective question. As the White Paper says in paragraph 72: There are no satisfactory objective criteria, comparable between one area and another, covering the whole span of problems—economic decline, physical decay and social stress. My St. Paul ward and my Easton ward share all these symptoms—economic decline, physical decay, social stress, and some racial tension as well.

The first clause of the Bill provides: If the Secretary of State is satisfied—

1. (a) that special social need exists in any inner urban area in Great Britain; and
2. (b) that the conditions which give rise to the existence of that need could be alleviated 1762 by the exercise of the powers conferred by this Act,

he may by order specify any district ". How will my right hon. Friend be satisfied? I should have thought that Bristol met all the criteria for action, but unfortunately, unless there has been a recent change in the attitude of the Department, Bristol is not likely to qualify very easily for assistance under the Bill when it becomes an Act.

I suggest, therefore, that this first Part of the Bill needs a great deal of new thought and possible alteration, and that it should be looked at in Committee to see whether there could not be some arrangement under which a local authority which found that it did not qualify, in the view of my right hon. Friend, could take advantage of an open appeal mechanism.

Mr. Ron Thomas

Hear, hear.

Mr. Palmer

I am glad to have the agreement of my hon. Friend the Member for Bristol, North-West (Mr. Thomas).

We need to have all the arguments for and against, aid made public. Failing that, I should have thought that a better arrangement would be the older one under which the local authority itself, knowing the detailed needs of an area, could make the decision. Provided that it satisfied other reasonable conditions laid down by the Ministry, the authority should qualify for grant in that way.

It is wrong for my right hon. Friend to suppose that he can decide from on high that Liverpool requires assistance but that Bristol does not or that a London district qualifies whereas some other more remote part of the country does not. I doubt whether he can do that in a way that will satisfy anyone. Therefore, I think that the first part of the Bill needs a great deal of attention, and I hope that it will get it in Committee.

Several Hon. Members

rose—

Mr. Deputy Speaker (Sir Myer Galpern)

Before I call the next hon. Member, may I say that the winding up speeches will begin at about 9 o'clock? Naturally, I want if possible to accommodate all those hon. Members who are anxious to take part in the debate. That can be done if hon. Members speak for about six minutes apiece.

7.43 p.m.

Mr. Arthur Jones (Daventry)

I shall bear in mind what you have said, Mr. Deputy Speaker, and do my best to comply with your request.

The purposes behind the Bill lie in recognition of the urgency and the need to take action about the dereliction which exists in many of our great cities and towns up and down the country. I welcome its provisions in the knowledge that they are attempts to grapple with an increasingly serious problem and a means of using Government funds which should have as their principal objective the promotion of schemes by local authorities. I agree entirely with hon. Members who have expressed that view. However, I did not agree with the hon. Member for Bristol, North-East (Mr. Palmer) when he said that the problems of the inner cities arose from technical evolution. It is clear that they arise from a misassessment of the speed at which this state of affairs has come about and the inability or unwillingness of local authorities essentially to grapple with it.

I am critical of the attitude of many local authorities responsible for the proper planning of our towns and cities. The out-of-town development which they have promoted arose from the best of motives—namely, to improve the living standards and environmental circumstances of their citizens. But many authorities appear to have been mindless of the effects that this would have in terms of the inner city areas. For the residents remaining there, to a significant extent the industrial and commercial activities have been quashed or neutralized, with the consequent loss of employment and the destruction of the social fabric of urban neighbourhoods.

As my hon. Friend the Member for Henley (Mr. Heseltine) said, there is no easy solution. It needs a combination of measures and a determination over a long time. That is why we need to have programmes which can be phased over a quinquennium, a decade, or even longer than that if there is to be any hope of reaching a solution.

The hon. Member for Glasgow, Mary-hill (Mr. Craigen) asked rhetorically what our city centres would look like in AD 2000. It was a very fair question, and I do not believe that we have any answer to it yet. London's dockland is perhaps an outstanding example, and the Environment Sub-Committee of the Select Committee on Expenditure looked at that carefully some years ago.

When I was a member of the Select Committee on Immigration and Race Relations about five or six years ago, our journeyings took us to Liverpool, where I was horrified to see the dereliction of District 8, which was a disgrace to the city. I am told that very little has been done in the interim to improve matters significantly.

The neglect of the problem by local authorities does not apply only in the great cities. In towns up and down the country, perimeter development has been encouraged without adequate plans and resources to ensure the restoration of the inner areas. Many could have been saved by rehabilitation. The worst possible course has been taken in some cases with vast areas being cleared without any plans being prepared for their redevelopment. Central areas were allowed to rot, with the consequences of social unrest for which the planners must carry a heavy share of the blame.

As permitted development took place and vast assets were created, no long-term plans were made to ensure that they should be utilised for the restoration of areas where redevelopment is essential for the future well-being of our society.

The Bill arises from the fact that local authorities are now devoid of the resources to develop their inner areas which, I maintain, they could have provided for themselves if proper policies had been followed. In the dual role of planners and developers, under statutory powers that have existed for the whole of the post-war period, local authorities were able, if they so chose, to undertake their proper responsibilities. The great majority have failed to do so.

Vast acquisitions of land have taken place by local authorities, which are the country's greatest landowners, as a number of hon. Members have mentioned. The reluctance of these authorities to dig pose of land is well known, and some authorities are said to have followed policies under which no freehold sale has ever taken place.

If there had been a willingness and determination to use their resources to the best advantage, assets created by new development could, in roll-over programmes, have been realised and used elsewhere—for example, in inner city areas—and we need not have been faced with a problem of such a vast scale as we see today.

The question of the financing of capital expenditure from the sale of assets was referred to in paragraph 5(3) of the Green Paper on local government finance. A register of land and property owned by councils, but not required for operational purposes should be maintained, and such assets should be considered to be part of their resources when financial assistance is being reviewed.

Development, if and when undertaken, should be planned to maximise its investment value, commensurate with proper planning considerations. In fact, with a view to minimising demands upon the Exchequer, there is a great deal to be said for requiring that assets should be realised as a prerequisite to further borrowing. With the continuing demand for the investment of life and pension funds, a market exists which would make possible a desirable shift of investment from the public to the private sector, releasing the former for re-use. By means such as this, demands upon the public purse, local and central, could be kept to a minimum. Local authorities should be encouraged to think and act along these lines.

The £100 million of the special capital construction programme available for England and Wales for 1977–78 and 1978–9 could have wider application, as could the urban programme, which is to be expanded to £117 million for 1979–80.

The great bulk of that money will, I understand go to the seven partnership areas and 15 special areas, only four of which are within non-metropolitan areas, which could well be among those that have considerable assets capable of being realised and releasing capital for redevelopment purposes. A start might be made on early sales of land suitable for private development. This is a cause that I have pressed in the House many times.

Assets in the new towns created by central Exchequer funding could similarly be realised if the Government were committed to a policy which ensured the optimum use of resources and a roll-over of assets. However, we know that they deny the right of development corporations to sell. Those towns expanding by way of co-operation with the development corporations are an example of the positive advantages of land use planning operated in conjunction with development, both private and public.

Northampton is going ahead well under such an arrangement. Government funds made available via the development corporation are enabling the Northampton District Council positively to ensure the redevelopment of inner town sites.

Among local authorities generally there is resistance to the concept of development corporations. Their independence of operation apparently gives cause for concern, and I hope that the so-called partnership agreements will be found to be an effective compromise. They need to be powerfully promoted if they are to succeed. I agree with what my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen) said in this respect.

The commitments under the Bill, which, we are told, will not exceed £80 million in the period up to 1981–82—a sum referred to as chicken feed, which might be an accurate description—could easily be met by a phased policy of sales of new town assets with no call on public expenditure by way of the ratepayer and taxpayer. The Government, however, are committed to State and municipal ownership and have hitherto rejected such a course.

I welcome the steps proposed in the Bill to promote the proper renewal of our inner urban areas and I applaud this initiative by the Government. However, the local authorities have the all-important role to play, and my advocacy is that they should be required to use their assets to the full and should not continue to extend their ownership, regardless of the consequences, as some towns and cities have done in the past.

Much of the responsibility for inner city dereliction lies with the local authorities, and I hope that the Bill will do a great deal to stir them out of their lethargy and point the way to the realities of land use planning and the most effective use of resources.

7.55 p.m.

Mr. Mike Thomas (Newcastle upon Tyne, East)

I want to take up three points related to the general question of the Government's inner city and urban area policies of which the Bill is part. First, I shall deal with the overall objectives that the Government are trying to achieve; secondly, with the resources that they are prepared to make available; and, thirdly, with the methods they are seeking to use to achieve those objectives and to use those resources.

On the objectives, I turn first to the attitude of the Opposition. It is clear from what we heard earlier that we cannot expect any guidance from the hon. Member for Henley (Mr. Heseltine) on the Opposition's policy, if they have one, on this very important topic. We have to turn to what I call the Shadow Opposition to find any shred of policy.

If there was any hint of consensus this afternoon, it came not from the hon. Member for Henley but from the right hon. Member for Worcester (Mr. Walker), who is the only Conservative Member who has produced any sort of policy for inner urban areas. It was spelt out clearly in an article in The Sunday Times on 31st July last year.

Even taking into account the fact that, according to some of the things that the right hon. Gentleman said today, he has moved a little since he wrote that article, it is clear that he could have been a little more generous and gracious in what he said about the Bill. In his article, written shortly after the White Paper was published, he listed nine areas in which action was needed. The Government have made major moves in the direction that the right hon. Gentleman and I both favour on almost every one of those points, whether in providing more money for the construction industry or improving educational services and crime prevention in designated areas. But at least the right hon. Gentleman has a policy. It is sad that the official Opposition clearly have no policy, and I hope that people outside the House will note that fact.

I have two reservations about the overall objectives of Government policy, which the Secretary of State summed up admirably as "the economic revival of inner city areas". The first reservation, which directly affects the Bill, is the emphasis on employment in inner city areas. I have no reservations about the emphasis on employment. No one who comes from the North-East will argue about that, but the emphasis of employment in the inner city areas may be misguided.

We must consider first the problem of sites. I accept some of the points made by the hon. Member for Liverpool, Wavertree (Mr. Steen) about small businesses. But major industrial development will provide the large number of jobs, and we cannot reasonably expect it to take place on inner city sites. It is not realistic because there is too little room for expansion. That sort of development will inevitably take place on the outskirts or on green field sites.

Secondly, and more important, it is often the existence of large-scale industry, particularly heavy engineering, which is the primary problem in inner cities and the primary cause of some environmental problems. If we are to make Goverment policy work and regenerate the inner cities, it is necessary for people to want to live there. It is not necessary for them to want to work there. We must not lose sight of the critical point that people must want to live in such areas. Large-scale industry is often inimical to those who live next door to it.

All this leads me to suppose that we must pay greater attention to supporting existing industries to ensure that they do not disappear. In my area, industry is mainly heavy engineering and shipbuilding. There will be other areas with different products and different names but with the same basic industries. We must emphasise the need for moving industry to green field sites that are near enough to towns to provide employment. If we do that, we must also look at public transport to ensure that people can move from one place to another.

I beg the Government to remember that in my constituency and in other inner urban constituencies not everyone owns a car. In the United Kingdom two in three households own a car. In my inner area, about eight in 10 households do not have a car. This is the critical importance of public transport.

My second reservation about the overall policy aims concerns the difficulty of implementation. The policy laid out in the White Paper, particularly in the last annex which deals with what happens in other Departments and with the need for closer collaboration between other organisations, seemed to be full of problems and potential difficulties.

I have had two personal experiences of dealing with the type of co-ordination that the Government are trying to achieve. The first was unfortunate and occurred when I spent a period of time in Northern Ireland working with the Community Relations Commission. Even when the good will existed, it was almost impossible to persuade Departments of the Northern Ireland Government—who were primarily interested in education, commerce and so on—to treat community relations as a priority. It was impossible, even with a special agency.

The second experience will be close to the hearts of my hon. Friends from North-East constituencies. It concerns the problem of regional policy. Everyone has failed to impose upon a series of different Government Departments—environment, industry, procurement and defence—a sense of regional priorities. This has led to considerable frustrations in the implementation of an effective regional policy. We even tried a special Minister. The Minister of State was probably right to go for the co-ordination that he is attempting to achieve now, but I beg him not to underrate the difficulties.

I turn to the question of resources. Are they sufficient? The proposal is for £125 million in 1979 plus expenditure on some main programmes and changes in the rate support grant arrangements. Discounting the Henley revisionist policy on public expenditure, we have to turn to the Shadow Opposition for a policy on this. The Tory Reform Group, in the pamphlet "Cities in Crisis", states: Nevertheless at least £25m should be spent in the first year, which is considerably above the present urban aid grants. But to make any real impact at least £100m a year will have to be spent by the central Government. I give my hon. Friends a serious warning about substitution. The question of whether this is additional money or a redirection of existing money is important. There is a danger that the Henley description of "the illusion of a policy" will result. For example, we could find, as some of us did with the European Regional Fund, that the amount of addi tional money is smaller than the apparent amount. As the House knows, I am pro-European. We must have a clear statement from the Government on what extra resources—I use that word with its precise meaning—are to be made available.

I turn to the question of the method of implementation. We must ask whether the policy of taking seven partnership areas and 15 programme authorities is right. I declare an interest. I believe the policy to be right not only because Newcastle was included because of a late rush of blood to the head of the Secretary of State, but I fear that the Government's approach could be weakened by making powers available to a larger number of authorities. I remind my right hon. Friend the Member for Battersea, North (Mr. Jay) that the unemployment ratio in the North-East may be better when compared with London, but the ratios do not give us much comfort on Tyneside. Unemployment there is higher, remains higher and has been higher as long as most hon. Members can remember than it has ever been in any part of the Greater London area.

I now turn to the areas to be chosen within the authorities. Clearly, there is a need to select areas. My hon. Friend the Member for Bristol, North-East (Mr. Palmer) did not do the Government justice on this subject. The criteria to be used are moderately useful. They are objective. If anything, they need refining more. In Newcastle there are ward profile arrangements. We have more experience than the Government in deciding on priority areas. We use more sophisticated material than has been used elsewhere, and I hope that the Minister will make good use of it.

I disagree with the hon. Member for Wavertree. Priority areas are not necessarily all geographically in the centre of cities. As the hon. Gentleman said, there are outlying council estates which are in a bad way. Wards on the outskirts of towns can be just as deprived as those in the centre. In medium-sized cities such as Newcastle and Liverpool, priority areas are not necessarily in the centre. I hope that the Minister will be flexible about that.

I have a further point to make.

Mr. Deputy Speaker

The hon. Member's final point?

Mr. Thomas

I said "a further point". Mr. Deputy Speaker. I have taken a great deal of trouble and time to prepare this speech.

Mr. Deputy Speaker

There have been several appeals for brevity. If all hon. Members take as long as the hon. Member for Newcastle upon Tyne, East (Mr. Thomas), there will be no time to call others.

Mr. Thomas

I meant no discourtesy, Mr. Deputy Speaker. I shall finish as quickly as possible. I have three or four points to make.

Perhaps there needs to be more selection to focus on particular streets and neighbourhoods. I plead for flexibility when decisions are made about the use of funds. Can they be used to encourage employment outside the priority area as long as it is ensured that inner city dwellers benefit? Can they be used to employ more policemen or child minders and to finance things which may not be the responsibility of the authority concerned? Can my right hon. Friend the Minister ensure that money is not taken away from the police authority, the health authority or the social services departments if funds are used in that way? We do not want to find that the police get less money at the end of the day as a result.

I say to my right hon. Friend the Minister for Housing and Construction that I hope that the Newcastle model of priority areas and the Gateshead comprehensive community programme will provide a base from which he can operate the scheme. I think he is already finding that that is so.

Let us be quite clear that there is a difference of opinion between the Government Benches and the Opposition Benches about where the ideas should come from. The hon. Member for Henley clearly thinks that they should come down from the top and that a small group of people should tell people what is good for them. I believe quite the opposite—that the ideas should come from the bottom, from the communities themselves. There is a contrast between Henley and Wavertree, if I may put it so. Clearly, the hon. Member for Henley thinks that there ought to be there a "sort of person", as he puts it, who ought to be telling people what they need. I think that community involvement is vital. If the hon. Member thinks that there are no community activists in the inner cities, he ought to go and find them, because there are many. Certainly in my area there are plenty.

I conclude, Mr. Deputy Speaker—you will be relieved to hear that—by making a quotation from an article that I heartily recommend to the House. It was an article by the leader of Newcastle City Council, Councillor Jeremy Beecham: published in January 1978 in Municipal Review. He finished the article by responding to the rhetorical question in W. H. Auden's poem "Spain", where Auden says: What's your proposal? To build the just City? Jeremy Beecham's reply to that was: That is precisely our proposal in Newcastle; to build as far as we can, a just City, a more equal City, a pleasant and thriving City, a City whose people feel committed to breaking free from the shadow of deprivation and disadvantage which history has bequeathed us. I am glad that through the partnership arrangements the Government will give us an opportunity to build on the work we started in Newcastle in 1974 towards that end.

8.12 p.m.

Mr. Ian Grist (Cardiff, North)

The hon. Member for Newcastle upon Tyne, East (Mr. Thomas) certainly put his finger on one point of particular concern on the Opposition Benches. We, too, would like to know whether the money involved in the Bill is new money or some form of recirculating money. Equally, we look forward to hearing what the Minister has to say this evening.

Certainly, the Bill does not go very far. Indeed, it goes only a tiny way towards curing the problems of the inner areas. It has been said time and again, as it was in our last debate on inner city problems, that the problems are multifarious and that they extend way outside the immediate inner areas of cities—the problems of unemployment, vandalism and social isolation.

Moreover, the Bill does nothing and does not pretend to want to do anything about the problems of housing. The rundown in our housing has been associated already in this debate with the effects of the various Rent Acts or, for instance, the effect in the last three years of the cut-back on house improvement grants. During the next financial year, in Cardiff less money is to be made available for house improvements than has been made available even in the present year, and that heaven knows, was a record low.

Even if we are to take the Bill within its own very limited terms of reference we cannot be very satisfied. In particular, there is the question of ministerial judgment of what may be the criteria for a designated district. This was a point brought up very briefly by the hon. Member for Bristol, North-East (Mr. Palmer), and fairly cuttingly. The ACC has rightly pointed out that nowhere is there to be found a definition of social need. In arriving at any decision, there is apparently a presupposition that the Secretary of State and his advisers have some God-given power to spot the winners or those in most serious difficulty.

In any event, the provision or encouragment of industry and employment, which is what the Bill is primarily about, rests on many factors lying quite outside the scope of the Bill, as the Secretary of State said, and in particular the successful running of the entire national economy. However, reverting to authorities with a claim to be treated as "designated". I wish, like other hon. Members, to make a case for that of my own city of Cardiff.

In employment terms—if this is to be one of the touchstones—matters are extremely serious in Cardiff. Currently we have a male unemployment rate of between 9½ and 10 per cent. In some wards of the city, particularly those in the constituencies of the Prime Minister and Mr. Speaker, the rate ranges upwards to around 20 per cent.

When the British Steel Corporation's East Moors works closes, as it will do within the relatively near future—we do not know whether it is two months or perhaps 18 months—our unemployment rate is likely to rise by half as much again, so we are already in bad unemployment difficulties and we are heading for worse.

In Cardiff there is a severe lack of manufacturing employment. Service industry we have. That has been mentioned earlier as taking up unemployment. Of course it does, and we welcome all the service employment that we can get in the city. Nevertheless, we are badly out of gear in the capital. Our manufacturing base is now below that of any comparable city of a comparable size in Britain. As the House will know, we have a fair slice of the Civil Service, universities and councils of various kinds. All this paraphernalia gives us a very fine back-up for service employment. But we are not able to offer young people in our city a chance to use their hands in manufacturing employment.

The British Steel Corporation has even ceased taking on apprentices. Until very recently, the steelworks provided the major source for apprentices in Cardiff. If it is not employment that should have got us on the original list, and the Welsh Office seems to think that our difficulties are not as great as those of the English cities, let us refer to the 1971 census. If one looks at households with no hot water, one sees that of the households in Cardiff 9 per cent. have no hot water, and in the inner areas it is 19½. per cent. That is a worse position than on Merseyside or in Greater London, Tyneside, the West Midlands and South-East Lancashire.

Let us look at households with no fixed bath or shower. The figure is 14.2 per cent. in Cardiff, which is worse than that for Tyneside, Merseyside, South-East Lancashire, Greater London and the West Midlands. Furthermore, of the households in the inner areas of Cardiff, 31½ per cent. have no fixed bath or shower. Let us look at households with no inside WC. The figure for Cardiff is 16 per cent. which is worse than Merseyside, the West Midlands and Greater London. In the inner area of Cardiff the figure is 31 per cent. For households sharing a WC, the figure for Cardiff is 5.2 per cent., which is worse than Merseyside, the West Midlands, South-East Lancashire and Tyneside. In the inner areas of Cardiff the figure is 11.3 per cent. If one is looking at those criteria of social need and at that type of problem, I should have thought that Cardiff must qualify on that basis. However, as I have said, the Welsh Office has not so far seen fit to accord Cardiff the same priority as certain English cities.

I just hope that in winding up the debate the Minister will be able to say whether, when the further English list is announced in the coming weeks by the Secretary of State, his right hon. Friends will be able to announce whether any similar steps are to be taken for Scotland and Wales.

Moreover, it seems that with Wales two further assumptions are made. One is that our problems can be dealt with through the Welsh Development Agency, which, of course, has little or nothing to do with local democratic initiative, and the other is that our problems can be dealt with through the urban programme. That programme can help to a degree, but the current allocation in Wales on the programme is only £800,000, and that with a maximum of £60,000 per project, so I do not think that that will carry us very far.

In short, the Bill is too limited. It is too full of ministerial selectivity. It is too full of uncertainties. But if it is to go into action Wales and Cardiff demand their just and fair share.

8.19 p.m.

Mr. Frank Hooley (Sheffield, Heeley)

The principle of the Bill is to create a system of priority aid to refurbish the systems of our great cities. This principle is absolutely right, and for that reason I support the Bill, but some of its details need to be looked at closely to make sure that we are going the right way about achieving what we want.

Clause 1 talks about designated districts. If I correctly understand my right hon. Friend the Secretary of State, he said that if the district were designated it would be designated at both tiers. I am concerned with the metropolitan counties. If Sheffield were designated, the designation would apply equally to the county authority and to the district authority. I beileve that that would be an immediate receipt for confusion and muddle.

I cannot understand the principle of double, concurrent designation for handling the programme under the Bill. I should like my right hon. Friend the Minister for Housing and Construction to cover this point, which is a matter of considerable concern in the South Yorkshire metropolitan area. It is an important point as regards administration, because clearly if it is the city itself which is concerned it should have control and a direct voice, in partnership with the Government, in whatever programme is put through. I find it hard to understand why the county level should be involved, assuming that I have correctly interpreted what my right hon. Friend said.

I turn to Clause 2, on the question of land. The Bill gives local authorities power to make loans to persons, which presumably means private individuals or companies, so that those persons can buy land. What has gone wrong with the Community Land Act, the whole purpose of which was surely to put in the hands of the local authority the power to acquire land which it could then lease or sell—it would be more sensible to lease it—to people who wanted to carry out development? Why should we provide another source of public money to local authorities which will then give it to private individuals who want to buy land?

I do not understand why this second source is necessary, as we already have the admirable legislation of the Community Land Act. Although I accept that there have been complaints from local authorities that the Government are not being as co-operative as they should be in allowing them to use the provisions of that Act, I do not see the need for a double system of providing money for the purchase of land, such as appears to be envisaged in Clause 2.

The problem of derelict land owned by public corporations has been mentioned. I do not want to elaborate the point, except to say that the Government should have high-powered talks with the major corporations to discover what financial arrangements can be made so that they can realise land that they do not require is lying unused and damaging environmental standards.

We must keep a wary eye open for speculators. The admirable system of house improvement grants was grossly abused by speculative property owners who took a grant, improved the property and then sold it at a handsome profit. If there is to be another source of funds for the acquisition of land, we must make sure that the speculative interests are watched very carefully in the course of handling this source of money.

Clause 3 deals with the question of buildings. My hon. Friend the Member for Liverpool, Walton (Mr. Heller) raised an interesting and important point when he said that the clause did not refer to new buildings in any way. We surely do not want a system under which public money will be made available simply to tart up some of the old, Edwardian or even Victorian factories in the centres of our cities. One of the great problems of city centres is environmental improvement. If we are to make money available so that old industrial buildings can be brought back into use, that may be good in a certain sense, but it would be much more sensible to get rid of them and provide money so that the new flatted factories, specially designed modern factories, can be built to accommodate small industries, if it is desirable to have industry in the city centre at all.

I echo the comment of my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Thomas) that we need to be very cautious about the idea that employment should be established in the centres of cities. We want the city centres to be regenerated for people to live in. However careful one is with industrial development, it creates traffic, noise, rubbish and waste dumps. If in addition there is the problem of shift working, one can create serious social tension between the centre of employment in a city centre and the residential development that might take place.

This is not idle theory. I have had troubles in my constituency with an industrial belt alongside a residential belt. That creates friction and trouble. I cannot imagine that any local authority will put a great forge, or something stupid like that, in the centre of a city, but even light industry creates certain problems. We shall have to watch carefully the principle of mixed development which appears to be envisaged in Clause 3.

Clause 4 refers to special social need. I hope that here there is scope for imaginative development. The great problem of the dereliction in our cities is that the young, the wealthier and the skilled do not find them pleasant areas in which to live. Consequently, they have gone away. Those with little or no choice—the poor, the weak, the old and the handicapped—are left. Until we make a serious attack on the environment in the city centre, we shall not make it a place where people will live voluntarily.

The problem of work, which is separate, was dealt with by my hon. Friend the Member for Bristol, North-East (Mr. Palmer).

I hope that as the programme progresses we can give our mind to the creation of parks, squares and other areas within our city centres which are recognised as pleasant places for people to walk around, to live in and to look at. Unless we do, the mere process of building factories or whatever in the city centre will be self-defeating. The skilled, the wealthier and the professional people will still get out, as they always have done, and we shall be stuck with the social problems that we have now. Therefore, the programme should have a strong environmental thrust.

I should like to say a few words about the problem of Sheffield. The city has not been offered a partnership and has been left out of the main stream of the scheme. Sheffield has probably done a better job in city centre development than many other cities. It has considerable achievements to its credit, but it has an ageing population, youth unemployment, the problem of population drift from certain of the central areas and physical dereliction. On the latter point I want to quote briefly from a document produced by the city council: The Canal Basin is in the dual ownership of the City Council and the British Waterways Board and can be accurately described as an environmental desert. The old railway goods yard which forms part of the site has closed down, the Canal itself is virtually unused, other than for a minimal number of pleasure craft and the adjacent areas have little economic value. The goods yards were constructed on an elevated area over arches and this construction, coupled with the presence of the Basin itself, has been the main reason why comprehensive development has not taken place. It is, however, pertinent to mention that this site is within 800 yards of the major shopping locality of the City … The site is, therefore, strategic and its development would be a catalyst for the improvement of the whole Don Valley environment. It can be seen that Sheffield has certain of the problems. It has dealt with them much better than many other cities have in the past, but it has problems and deserves to be included in the main stream of the programme.

I am becoming increasingly concerned about the weird contradictions in my Government's policy. Over the past three financial years public expenditure has been cut by £4 billion—the figures are to be found in the White Paper—with a consequent loss of jobs. At the same time, we are going in for all sorts of gimmicks, such as the job creation and work experience programmes, to fill in what we have destroyed.

There have also been cuts in local government spending. Sheffield has been disgracefully treated this year on the rate support grant, which creates serious trouble. On the one hand, difficulties are created, but the Government come forward with the urban programme to make up for them, as it were. If we could have a clear, consistent policy on public spending on the basic, essential social necessities, such as education, housing and planning, we would not need so many gimmicky programmes. However, the urban programme deals with a great and historic development that needs tackling as a social priority, and I fully support the Bill.

8.29 p.m.

Mr. Michael Morris (Northampton, South)

The hon. Member for Sheffield, Heeley (Mr. Hooley) made a valid point when he questioned, as did the hon. Member for Newcastle upon Tyne, East (Mr. Thomas), whether it is right to bring industry back into some central areas. There is no simple answer. To do so is the right answer in some areas but totally the wrong answer in others. The tragedy is that the problems can still provide an opportunity to solve the problems.

The lack of open space that we see in most central areas could still be overcome. This is a simple matter of resources, or the allocation of resources. The excessive housing densities in certain areas could be solved by providing houses with gardens. The problem could be solved if we were to accept lower planning densities and a more sensible attitude towards the housing cost yardstick. Poor facilities for industry, especially for small businesses, could be improved if we could persuade the planners to stop driving out industry because it is a non-conforming user.

There are local authorities throughout the country, especially in the inner urban areas, that are still driving out non-conforming users without offering them alternative sites on which to start again. When the Secretary of State said that it was the emphasis on the industry that was important, that showed again that there is still great prejudice against commerce. It is commerce which on the fringes of the central areas, certainly of London, will give opportunities to the Islingtons, Hackneys and Tower Hamlets. It is not manufacturing industry that will provide opportunities for those areas.

I question whether the concept of a partnership will work. I use as evidence one borough that I know about in some detail. The London borough of Islington is one of the partnership areas, or is half of one. The borough had a population of about 500,000 at the turn of the century. That population was halved by 1960 to about 250,000. Over 100,000 people have left the borough in the past 10 years. That is the rate of depopulation that has occurred in Islington. I imagine that the Hackney figures are fairly similar.

In the borough of Islington nearly half the housing is council housing. It has a fairly modest waiting list of 6,500. There are 3,500 empty council-owned properties. There are 3,000 voids. Therefore, there is possibly not such a major housing problem. In five years the town hall staff has increased by 1,000. The district auditor has commented that someone has lost £2 million, and as a result Coopers & Lybrand has been called in to ascertain what has happened to the money.

Despite that background, the borough is receiving about £75 million in a capital expenditure allocated to it for the corning year. That is made up of nearly £50 million on housing and a mixture of inner city partnership money, inner city construction money, original urban aid and additional urban aid, totalling £75 million. In addition, it will have its share of GLC money. That will make a total of about £100 million of capital moneys being spent in one year in one borough that has a population of 170,000, or just over 40,000 families. That is going some.

I question seriously whether on top of that sort of expenditure, with a track record of that sort for Islington, and with the district auditor working overtime, any Government will get a return for their money if they now divert resources into bringing back industry. Surely it would be far better to concentrate on the housing that is required and to lift the present restrictions on commerce. If those restrictions were to be lifted, commerce would come back into the central areas at the bottom end, which would solve part of the problem.

I am disturbed that the Bill adopts a piecemeal approach. That argument has been raised by several hon. Members. It does not begin to tackle the problems of London's dockland, where the Secretary of State's own constituency is situated. The problems there are on so great a scale, and the resources required so huge, that this sort of Bill cannot possibly help. Something has to be done to get that sort of area moving, for otherwise the deprivation will continue into the foreseeable future.

As hon. Members have said, all this requires investment in transport. It also requires a degree of policy towards retailing. No one has yet mentioned in the debate the role of modern retailing, of the supermarket and of the hypermarket. I hope that the Department, certainly in some of the major areas, will involve the major retailers.

What do we do in this terrible dilemma? There is real danger that we are producing too many little budgets for too many different things. As the hon. Member for Heeley said, at the moment there are too many gimmicky budgets around. I urge the Government to go back to the single large budget that people can use to their own discretion.

It is important that the Government should be involved in these problems. My experience as Member for a new town, having done my traineeship in a central area, is that the new town concept does work. It works in a partnership sense because it can and does work well with the local authorities. The great benefit of a new town corporation which no local authority has is that it can and does work at twice the speed that a local authority can work.

The Government should not close their eyes to the role of an old town corporation. There may be cities whose existing organisation and infrastructure work well, but in the really crucial areas the case may be different. For example, I do not believe that Liverpool City Council has the ability, the resources, or even the will now to tackle the deprivations of central Liverpool. Nor do I believe that the problems of dockland will be solved by the GLC in combination with the authorities there. That is a personal view, but I think that it will be proved right.

I ask the Government to make it clear whether these resources are extra, or whether they are just pulling further money out of the rate support grant. Many of us have suffered in that way. No wonder the Secretary of State is cringing. He knows that he has already cut £3½ million off the education budget for Northamptonshire, although it has more children than it had a year ago.

There is an aspect of training that is desperately important. In our debate on employment on 30th January, my right hon. Friend the Member for Sidcup (Mr. Heath) explained in some depth the rather pathetic response that we have had both from the Conservative Party and the Government in terms of training. One of the greatest problems in the inner city areas is the young people who are coming out of school without skills. We would do far more good if we spent a few more millions of pounds on training these young people in skills to give them a job for the future. I hope that if resources are to be pumped in that direction now, serious consideration will be given to setting up mammoth training programmes in the areas where these young people have no job prospects.

The concept of a partnership may motivate the local authorities, and I would not wish to criticise the New-castles, the Sheffields, and others, as I do not have sufficient experience of those areas. But from my experience in London, I do not believe that the present partnership boroughs selected have the ability to push through what is necessary.

My experience in a fair number of visits to Liverpool leaves me with the feeling that the authorities will fail there. If they do—I hope they do not—I trust that the Government will then say "You have had your chance. These problems are too great to be left as they are, and we shall move in an old town corporation to deal with these very old problems."

8.40 p.m.

Mr. Iain MacCormick (Argyll)

In the short time available, the consequent necessity for brevity will prevent me from referring to many of the most interesting speeches to which I have listened during the debate.

I begin by referring to two interesting features of two of the speeches made from the Government Benches. One was the speech of the hon. Member for Glasgow, Maryhill (Mr. Craigen) and the other was the speech of the hon. Member for Birmingham, Selly Oak (Mr. Litterick). They are both Scotsmen, although they do not both represent Scottish seats. I would agree much more with the hon. Member for Maryhill than with the hon. Member for Selly Oak, who, in the course of a rather impassioned oration, tried to imply that there was some basic difference between rural life and town life.

I do not think that it is justifiable to make such a distinction. Representing, as I do, one of the most rural constituencies in the whole of the United Kingdom, I have found that many of the problems of my constituents are very similar to those of people who live in towns. That explains, I think, why a former Labour Government found it necessary to create the Highlands and Islands Development Board, which fulfils for a very rural area some of the kinds of functions that I fancy the Bill is designed to supply in a more urban setting.

I am sure that very few hon. Members, if any, would contradict me when I say that there are two reasons why the position in Scotland is particularly relevant in relation to the concepts contained in this measure. There is a basic imbalance in Scotland. The local government region of Strathclyde contains half the population of Scotland, which is concentrated upon the city of Glasgow. On the one hand, there is the fact that in Scotland we have roughly half the population living within a very small geographic area. On the other hand, there is the fact that the part of Scotland in which all these people are concentrated exhibits perhaps the worst form of urban deprivation to be found not only anywhere within the United Kingdom but also anywhere within Western Europe.

Indeed, I believe that the last proper study to be made showed that 95 per cent. of the 1 per cent. of areas of the worst urban deprivation existed on Clyde-side in Glasgow. At the time when that survey was carried out in 1975, The Economist said: When deprivation is measured at small area level, Scotland and Clydeside have more of it than anywhere else. I do not think that it could be put more succinctly than that.

I move from the acknowledgement of the existence of that problem and ask whether the consideration of it is something new. I doubt whether that is the case. When the hon. Member for Henley (Mr. Heseltine) was opening the debate for the Opposition, the hon. Member for Selly Oak mentioned in an intervention the position in Germany after the war. He referred to both parts of Germany, and he was considering the urban renewal which had to take place there in view of the destruction caused by our bombers in the last war. But surely in this country we also began to think about urban planning at precisely the same period. Was it not in 1947 that the first measures were introduced which were designed to bring about urban improvement? Indeed, if the excellently thought-out and wonderful plans produced for the Clydeside area had been carried out, perhaps we would not be having this discussion tonight.

In a recent article in New Society, Professor Denman of Cambridge University asks: Where is the fulfilment of the hopes of 1947? Have we unwittingly planned for decay instead of life? Maybe a too rigorous planning regime, a too Calvinistic committal to law and planned order, has killed the spirit of life. I suspect that that is exactly what has happened.

I do not think that it is the object of anyone in the House tonight, or of any hon. Member of the House, to apportion blame too much, but I should not like the Government—least of all the Scottish Members of it, none of whom appears to be present at the moment—to feel too smug about having introduced this measure.

At the same time as one considers the development of the thought which underlies the Bill, one must remember the failure of the thought which already exists with regard to the commitment made as long ago as a couple of years after the war. Indeed, in 1975 The Economist, when discussing the survey which showed that the urban deprivation in Clydeside was as bad as it was, said: The conurbation's problems are as much the fault of the ageing and uninspiring worthies of the Clydeside Labour Party who have run the Clyde Valley with the iron grip of a one party State for the past 40 years. I do not think anyone could deny that. Nor can anyone in Scotland deny the fact that there is a relationship between the Clydeside Labour Party and the Government inasmuch as most Scottish Ministers were members of Clydeside Labour Party or were councillors on Glasgow Corporation or the town and burgh councils in the areas round about Glasgow exactly where the 95 per cent. of the 1 per cent. of worst deprivation exists.

I do not want to labour that point, but I should like to end my contribution by putting one or two questions to the Government. First, when will the by-election in Glasgow, Garscadden be held? That is probably the best way of deciding who will solve the problems of Glasgow and Clydeside in the future.

Secondly—this is a question which genuinely interests me—to what extent does the Bill intend to supplant the powers and responsibilities of the Scottish Development Agency? The SNP feels that that Agency does not have enough funds at its disposal, although it is effectively and efficiently led by Sir William Gray, former Lord Provost of Glasgow.

Lastly, does the Government Front Bench genuinely believe that of the sums mentioned in the Bill—£80 million in total—10 per cent. or £8 million is a proper sum to be expended on eradicating the urban deprivation which exists in Glasgow and to bring about a genuine and lasting revival of industry and housing and all the other things which make up human life in the area? If that sum is not enough, will the Government agree to give the Scottish Development Agency a great deal more, or, indeed, to give the appropriate local authority a great deal more?

8.48 p.m.

Mr. Kevin McNamara (Kingston upon Hull, Central)

I listened to the start of the Garscadden election campaign with interest. It is a pity that the hon. Mem- ber for Argyll (Mr. MacCormick) did not mention the considerable aid given to that area by this Government, particularly through such measures as the Shipbuilding and Aircraft Industries Act, which saved many jobs and the Polish order.

In the short time available to me I should like to turn my attention to the Bill and to give it a welcome on behalf of the city and council, as well as the people, of Kingston upon Hull. Unfortunately we are a city within a shire county, which means that we are not quite certain about the degree to which we shall be able to exercise and operate all these powers without Big Brother looking over our shoulder.

If my right hon. Friend had been successful in giving us back the powers that we had in the past, that would have been a more powerful aid to us than many of the measures contained in the Bill. We are not to be one of the partnership areas. I regret that, because our problems are just as acute and desperate and needing of solution as those of the partnership areas. I accept that they may not be equivalent in size, but in degree and intensity they are just as great. Nevertheless, we look forward to the time when perhaps the areas which are not partnership areas will be given the powers contained in Clause 4.

I should like to deal not with housing in the city centre, with which Kingston upon Hull is going ahead and doing reasonably well, but with the problem at which the Bill is aimed and which did not attract a great deal of attention from hon. Members. I refer to employment in our decaying city centres. We must put it in perspective. We are talking not about a new Ford assembly plant and putting it in the middle of some old city area but about the regeneration of industry which was there.

Let us consider the type of progress that has been made in our cities. In many areas—for example, the docks, there has been a decline in the service industries serving, in particular, the railways, road transport and the docks. With the rundown of the railways and the revolution in sea transport, many of the service industries which were needed have now gone. That is part of the problem.

Another part of the problem is that, as the city areas went into decay as people moved out and the areas were cleared, the small one-man, two-man, 10-man and 15-man firms—the jobbing printer, the panel beater and the car repairer—were driven out. Such businesses were essential to the life of the city. As they were driven out, they were faced with problems that they could not properly solve. In many instances, clearance resulted in the disappearance of the small workshops. Many small business proprietors, faced with the difficulties of starting afresh in new premises, were frightened off by the financial implications. They could not face the prospect of moving from low-cost, low-rated business premises into purpose-built factories, even when designed to meet the needs of small firms.

I want to turn my attention to the solution to these employment problems. We are concerned with the regeneration of jobs—small but important jobs. In the small workshop or engineering plant, one might have the proprietor, two skilled men, an apprentice and a labourer. For example, a printer would do his job employing one apprentice. Such jobs, which kept life alive in inner city areas, have now gone. There were houses and businesses cheek by jowl, but not necessarily hostile to one another in that environment.

I objected to the sneering tone of the hon. Member for Henley (Mr. Heseltine) when he talked about the people and organisations on our estates, but it is true that many errors were made in the planning of estates. We broke down the nexus of the extended family and put people in areas without the necessary social infrastructure of the club, the corner shop, the pub, the church and the cinema. That is all true, but it came ill from the mouth of the hon. Member for Henley. In public buildings controlled by the Tory Humberside County Council, many social functions were performed in both the old city centres and the modern suburbs, but many of these were curtailed by the Tory council pushing up rents and forcing out tenants. But I am not wearing my party political hat. That is the end of the party political.

When considering small businesses, I think that the Bill has one major omission. I refer to small business men who have been affected by compulsory purchase orders. I am talking not of the man who drives a Jaguar and smokes a big cigar but of the man who might be lucky if he takes home the average manual wage, but who may run a car. He has pride in working for himself.

There is no power in the Bill to cover the need for professional advice to smaller businesses involved in compulsory purchase orders. Small businesses so involved sometimes have to face the possibility of either having to go out of business or trying to carry on. In such cases, the availability of professional advice and consultancy services would be invaluable.

The Hull City Council has considered this proposal and in its opinion this service is necessary and could be supplied. It could be supplied by a general consulting service or by an outside adviser working with the local authority, provided that confidentiality could be kept. The third possibility is that the local authority could set up the service and then look for someone who had retired from business or commerce and offer help to people. This is something which we could consider, and I hope that the Minister will look favourably on such an amendment at Committee stage.

The second point of vital importance is that the power of equity participation by local authorities to help small businesses and small men has not been given. The Bill does not allow the local authorities to provide grants and loans to secure property and land, but there is no actual risk equity coming forward and in many cases it will not come from the private sector. An extension into the field of risk capital for local authorities should be considered.

It will be argued that the Bolton Committee's report came out against this because there was the money around. We should remember that that was in the days when the former right hon. Member for Altrincham and Sale, the then Mr. Barber, was printing money. We should now look at this problem more carefully. However, a general power in the Bill would mean that this money could be used in the formation of new companies and the extension of existing companies in inner urban areas and to encourage them to move there with direct help with innovations for individuals.

What we need locally is what we already have nationally—a mini National Enterprise Board to look at areas and companies. My hon. Friend the Under-Secretary of State for Industry might say that the Department of Industry is doing that through the Small Firms Information Bureau, but, with all due respect to my hon. Friend, whose attributes and qualities I admired long before he came into this House, this is not being done in inner urban areas and areas of decay. Very small firms have not been given encouragement to develop in these areas.

On page 3 the Bill talks about 30 additional staff, and this is nonsense. It is already difficult for local authorities to carry out their work properly. Clearly, they need substantially more staff. How otherwise can advance factories, access roads, sewers and building refurbishment be considered unless there are a lot more people to deal with them? One simply cannot talk about it in the way that the Bill does.

One of the real problems that we have in the shire towns is that of locally determined services. Whether they are for a telephone system or other services, we have to share them with other district councils. We do not have a proper say in how the money is allocated. We have had to scrape and to be assisted. Thus we must look at the proposal for an innovation centre.

We wanted a place in Hull City where people can come forward with ideas. The university had been working with us on this problem to help us to regenerate employment and employment opportunities for ourselves. Without the allocation of LDS, we find that impossible. The innovation centre would have been a significant move. For example, there are companies such as ICI which, because of economies in scale, are unable or unprepared to develop ideas to enable people to build up these things for themselves and on occasion to finance some of their employees. These are some of the things that the innovation centre could do.

I am afraid that in the time available I have not been able to cover all the points I hoped to make, but I urge the Minister to think carefully about consultative services, equity capital and getting the large shire cities out of the shackles of county councils which are hostile to those cities' intentions and ideas. This will enable us to develop as we have done in the past and to tackle our own problems without the disruption of social, educational, housing, planning and other policies.

Several Hon. Members

rose—

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

Mr. Eyre.

Mr. Arthur Latham (Paddington)

On a point of order, Mr. Deputy Speaker. I wish to place on record my protest that during this debate only one London Labour Member has been called. In other words, for a total of 10 million inhabitants only one voice has been heard in this debate. I am the chairman of the Labour Party in London and I have an overwhelming constituency interest, but I have not been called to speak in this Session so far.

9.2 p.m.

Mr. Reginald Eyre (Birmingham, Hall Green)

We have had a realistic debate on this Bill and the surrounding circumstances that much affect its operation. It seems to me that no Member on either side has exaggerated or been overoptimistic about the limited effect of the Bill on what are regarded by hon. Members on both sides of the House as difficult problems requiring solutions which are not entirely clear to any of us.

We on the Conservative Benches regard the problems of the inner urban areas with great concern, although we see those problems in the context of the city as a whole. Our studies lead us to believe that the problems run across the whole city area. We have had great anxieties that the middle areas and part of the outer areas are deteriorating at the same time as we are making this effort and focusing attention on the problems of the inner areas, serious as they are.

The hon. Member for Birmingham, Selly Oak (Mr. Litterick) made this point effectively in referring to a localised area of decline in an older housing region of Birmingham. There are points that deserve attention, which are outside the inner area question.

We see all these problems of the inner, middle and outer areas as being interrelated, and we feel that true long-term solutions can be found only when all these factors are taken into account. That is the first basis on which to judge the adequacy and scope of the Government's measures and of the Bill's provisions in particular.

We can underline the errors leading to the erosion and bulldozing of the inner area economy. The hon. Member for Kingston upon Hull, Central (Mr. McNamara) gave a vivid account of this process and told the House how it affected small businesses and trades, with all that meant in loss of jobs and reduced living standards for the people. We well understand the shortage of private investment which is essential for the regeneration of the economy of the inner areas.

Nobody would deny the continuing role of Government and local authorities in providing essential services in health, educational and road work aspects. They are most important. But when we turn to the economy of the inner areas our hope for the future must lie in attracting new private investment. With regard to the inner area economy, the Government and the local authorities have a need to stimulate investment in the private sector—by firms and individuals in industry and commerce. It is on that basis that we must test these provisions and the whole range of Government policies directly relative to the achievement of success in that respect.

Since everything that is attempted or carried out to ease the problems of the cities and inner areas must be judged against a background of understanding of the needs of people and how best they can be encouraged to play an effective part in recovery, the third test that we would apply is the progress to be made in encouraging social stability, growth in the community and neighbourhood feeling and in improving housing and environmental conditions. All these matters concern people in vital human respects and they affect the contribution of people in their working lives in terms of economic revival.

In that respect we can say at once that the Government's approach is woefully lacking in understanding the needs of people in densely populated areas. This is an essential element in the battle against urban decline and decay even when we consider the material aspects such as those encompassed in this modest Bill. I shall return to that subject.

In assessing the worth of the Bill we must apply as a test the degree to which private investment, which is essential to regeneration, will be attracted. We must express relief that the Government acknowledge the need for private investment to come to the rescue of the inner area economy as set out in the White Paper of June 1977. Indeed, for some years we have been urging on the Government the same policies for the economy as a whole.

At a time when industrial production is low, and investment on the part of medium and larger industry is not as great as the Government expected or we would have wished, which is understandable in the present climate of economic caution, and unemployment is shockingly high in many inner areas, particularly amongst young people. The hon. Member for Liverpool, Scotland Exchange (Mr. Parry) gave dramatic evidence of this when he said that no less than 50 per cent. of his school leavers were still unemployed. There is great concern felt by both sides of the House about the social aspects of that problem.

We realise and emphasise that economic improvement and job opportunities in these areas need to be encouraged to ensure the survival, updating and expansion of existing businesses of all sizes and kinds. That means halting the disastrous record run of liquidations and bankruptcies. Secondly, we need to encourage in an effective and sustained way the founding of new small businesses, many of them making new products and providing new services. A great number of new business founders must come forward and be prepared to take risks, to overcome difficulties, to flourish and to grow.

Our essential need, therefore, is to encourage the development of new wealth creators and new job creators. Paragraph 40 of the White Paper says that the aim must be to encourage changes in the attitude of industry and finance so that they play their full part. That means particularly in the inner area problem. We say, and have said repeatedly, that there must also be a substantial change in the attitude and policies of the Government, including a lessening of the burdens of taxation and legislation, if industry in general and small businesses in particular are to be able to make the contribution that is absolutely essential to the revival of the economies in the inner areas.

As small businesses could play such a vital part in inner area regeneration and are so much part of the local initiative which comes from the people in the district, it is a pity that the Bill is so restricting in its geographical sense. The new powers in Clauses 2 and 3 are restricted to relatively few designated local authorities. Moreover, the provisions in Clause 4 restrict the exercise of the powers specified in Clauses 5 and 6 to the very small number of partnership authorities.

Whatever the Secretary of State may be able to say by way of consolation about giving small additional help under the urban aid programme to other local authorities outside his lists, the fact remains that there are large numbers of local authorities with substantial inner area or similar problems which are excluded from operating the powers to be given under the Bill.

Mr. Jay

Then is it the hon. Gentleman's advice to the Government that they should increase public expenditure and reduce taxation?

Mr. Eyre

I am trying to emphasise the extreme importance of creating a state of affairs where private investment can play a more effective part in reviving jobs and saying that there is a case for looking at these other towns, in circumstances that I will describe, which have a claim.

Mr. Jay

Spending more.

Mr. Eyre

Taking it all into account, within the Government's programme I believe that it could be shown that the economic return would be much more effective than that from a great number of other expenditures on which the Government are at present engaged. That does not mean that there would be a substantial increase in total Government expenditure, but it would mean that it was directed into an area where there was likely to be a much more effective return.

Mr. Shore

As I understand it, as a result of the intervention of my right hon. Friend the Member for Battersea, North (Mr. Jay), the hon. Gentleman has declared that he would wish the Government to extend territorially the provision of powers under this legislation beyond the partnership and programme authorities. I can tell him that we have every intention of doing so. However, that does not mean that we are making it universal.

Mr. Eyre

I had realised from the words that the Secretary of State used earlier that he was contemplating some form of extension. I am still not clear from what he said how he will operate in this respect. I appreciate that there is every reason why he should be offering inducements to Government supporters to look forward to the proceedings in Committee when he may be able to make additional offers. However, I hope to establish some principles which should be applied about how the few additional ones will be chosen.

As I have said, a great many large towns and cities with very similar problems are excluded from operating the powers to be given under the Bill. I believe that that is difficult to justify. Accordingly, great areas of the Black Country, including Dudley, Sandwell and Walsall, are excluded. Anyone who knows those areas will agree that they have massive problems. Also excluded are some towns and areas in the North-West, especially in Lancashire, and in the North-East, Yorkshire, the East Midlands, the West Country, including Bristol and Plymouth, and some of the London boroughs, although the position there is not clear.

The Secretary of State must say what criteria he has adopted in justifying these decisions, and I think that those criteria have to be examined carefully, especially as the Secretary of State has now said that he intends to extend his lists. A great number of right hon. and hon. Members are concerned and dissatisfied, and I do not think that the right hon. Gentleman will be able to please more than a fraction of them. He will have to demonstrate, therefore, how he has made his decisions and why he has preferred some and deferred the claims of others. If he fails to do that, there will be charges of unfairness. They are bound to arise. It will be thought that there is a kind of reverse black list in operation—a kind of white list. I am glad to note from the Secretary of State's nods that he agrees with this approach and will announce details of the criteria, thereby avoiding the suspicion that political pressure will be the basis upon which this matter is decided.

The system establishes a league table of local authorities. The first division comprises the partnership areas, the second division includes the designated authorities outside the partnership agreements and the third division includes the also-rans who will get so little benefit from the system.

There are further restrictions that apply universally. Despite the reference in the White Paper to the need to stimulate industry and commerce, and despite the Secretary of State's remarks about the importance of service industries, which were supported by the right hon. Member for Battersea, North (Mr. Jay), any question of stimulating the development of offices has been left out of the Bill. When one thinks of the range of jobs needed in the inner areas, this is a regrettable omission and I hope that the Secretary of State will reconsider it in Committee.

Mr. Mike Thomas

Is the hon. Gentleman prepared to join his hon. Friend the Member for Henley (Mr. Heseltine) in talking about the construction industry, which is a side issue to this? Is he also prepared to say that it is now official Opposition policy that public expenditure cuts in the construction industry should be restored and that public expenditure in this area should be increased?

Mr. Eyre

The hon. Gentleman is obsessed with partisan politics. He speaks well about these problems and it is a pity that he spoils his contributions by the needling tendency that he shows so often.

Having specified the limitations, the estimated financial effects of the Bill, judged against the background of the needs of our conurbations, towns and cities with inner area problems, show that it is a very modest contribution to the solution of the problems. Expenditure by local authorities throughout the period up to 1981–82 will not exceed £80 million, according to the Government's estimates. That works out at an average of £20 million a year and that is not much compared with, for example, the annual loss of £500 million in the steel industry, especially when that £80 million is being used towards dealing with probably the major social and economic problem affecting so many of the people of this country.

A substantial share of the resources under the urban aid programme will go to the partnership authorities in the first division. When judging the total economic and social effect of the Government's policies, we must remember that the housing improvement programme—and this is relevant to the point made by the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) about the construction industry—has been severely reduced. The flow of funds to improve older housing in areas such as Sandwell and the Black Country which have been left out of the Bill has considerable social significance in solving problems in those areas. The areas left out of the Bill are suffering twice over. They have lost the benefit of the house improvement programme and they will not have the benefit of their economies being stimulated through this Bill.

Mr. Mike Thomas

Is the hon. Gentleman saying that we should spend more money?

Mr. Eyre

Indeed. We have made clear that the balance of the housing programme should be changed. We could reduce a certain element of new housing and increase expenditure on older housing and improvement grants. That would be very much better.

Major reservations have been expressed in relation to Clause 2(4). The clause allows for the acquisition of land, and the carrying out of works. The proposals for interest rates in Clause 2(4) are totally unsatisfactory and will create a situation which will be as difficult as that which currently exists for house mot-gages provided by local authorities. The provisions must be positive and flexible and enable local authorities to do everything possible to encourage new development.

One suggestion is that Clause 2(4)(b) should refer to such rates as the local authority may fix in the case of the loan. Some stability is desirable. Some small business men have said that possibly these loans would be available to them from the banks on more favourable terms than those in the Bill.

The provisions in Clause 3—the amenities clause—could be of considerable importance for the conversion of older industrial and other buildings such as warehouses. But existing businesses in older premises which are seeking to survive by improving their efficiency are unlikely to receive much assistance from the clause, especially from the part which relates to the creation of extra jobs.

Clause 4 invites comment on the concept of the working of the partnership agreement. The powers in Clauses 5 and 6 should also be mentioned. Clause 5 relates to the land available after the demolition of buildings and land clearance. It is to be welcomed, especially in view of the tremendous importance of land clearance and of bringing unused land into use.

Would it not be desirable to avoid a discretion and to give a straight two-year remission of loan interest and repayment of capital? A firm which takes on the job of clearing a site normally has enough problems. I suggest that the Secretary of State should consider reducing the number of discretions because they are administratively expensive to operate and there is a danger of certain influences being brought to bear. We regard the rehabilitation of land as important. It would be better if the Secretary of State later considered making automatic a remission of interest and repayment of loans for two years.

Clause 6 gives a discretion to local authorities to make grants towards the payment of rents. I understand that, and I am pleased about it. But many business men would prefer to know their position for certain. The discretion on rents is difficult to assess and it would be subject to certain pressures. It might be better to have a zero rating system so that everyone would have a clear understanding of their position. It would not be more expensive and people would know where they were. Business men had told me that they would often Prefer a remission of that kind rather than a rent allowance.

I turn to the subject of partnership agreements. It is important to prevent the development of further bureaucracy. Some local authorities, particularly Birmingham, have a healthy concern for this problem. Most local authorities will soon develop a corporate view of their responsibility under the partnership arrangements, but there will be difficulty in getting the Government Departments to come together in a similar manner. I have been told that some Departments are more keenly interested than others and that there is an uneveness of commitment.

The decline of the National Health Service, the problems in hospitals and the growing waiting lists mean that we require more information about the role of the area health authorities in the partnership agreements. I hope that the Minister will be able to say something about those matters. Certainly they are of great concern in the inner areas.

Similarly, because of the concern for law and order and the heavily rising crime rates in the cities, the relationship of the Home Office to the partnership arrangement is a matter of concern and importance. My hon. Friend the Member for Birmingham, Stechford (Mr. MacKay), who stressed the concern about law and order in Birmingham, raised an important point.

My right hon. Friend the Member for Worcester (Mr. Walker), who, of course, played a tremendous part as Secretary of State in initiating all the studies which led to these programmes, emphasised the problems of the ethnic minorities in the inner areas. The involvement of the Home Office, which has substantial and continuing responsibilities in these matters, should be brought to the fore. I hope that the Minister will be able to say something about the work of the Home Office and its connection with the partnership authorities.

Undeniably, the Department of the Environment has gained influence and power, and I ask the Secretary of State to consider carefully whether he needs so many powers of intervention in the Bill. On many occasions he is in a position to override local decisions and local discretion, and administratively this means that the papers will be passing back and forth between the local authority and Whitehall. Will the Secretary of State look critically at the Bill in Committee to see whether he can drop some of these powers of intervention and show that he trusts the local authorities, because I believe that the trust will be justified?

There is genuine concern about Clause 4 and the arrangements for determination by consultation between the parties to the partnership. The word is "consultation", not "agreement". Therefore, the agreement and its working are ultimately subject to the direction of Ministers. I ask that the Secretary of State and all the Ministers involved should be careful in the exercise of that kind of power. I ask the Secretary of State also, through the centre in Whitehall, not to insist on too much statistical information to justify every small move. There is that tendency.

I appreciate the feelings of the partnership, and particularly about the need to take action to get things moving, but I ask that in the longer run a system of better consultation and monitoring should be developed. Although there is the need for action and for early decisions, if we do not watch out a climate could develop such as that which led to the clearance of areas and the building of tower blocks. That happened because we did not take sufficient account of people's desires and needs.

Very soon in the partnership arrangement a monitoring system is desirable, and I should like that to be developed to take more account of the feelings of voluntary bodies, including youth movements, residents' and tenants' associations, and the chambers of commerce, which will have some relevant views on the economic aspect.

Mr. Jay

Am I not right in thinking that earlier the hon. Member for Henley (Mr. Heseltine) complained that there was a meeting at Hackney at which there were 46 people? Surely if all these other organisations are to be brought in there will be far more.

Mr. Eyre

I am asking for smaller, more effective meetings of that kind. I appreciate the need for action, but I am saying that in due course there will need to be this monitoring to keep the authorities in touch with patterns of local feeling.

I turn now to the question of industrial development certificates, which is of concern to Birmingham and London. My hon. Friend the Member for Hampstead (Mr. Finsberg) raised this matter from his considerable knowledge of London. Of course, Birmingham and London are now ahead of the new towns, but they are still behind the assisted areas. There is a case in Birmingham now in which 600 jobs could disappear from the inner area because there are heavy inducements for a company to move to Merseyside. It will need many new businesses to make good that loss of 600 jobs. Will the Secretary of State consider reviewing the assisted area policy in its relationship to the working of the inner areas of Birmingham and London?

I close with a reference to unused land and the vast areas of derelict land. This problem goes to the nub of the situation. Regular reviews of land holdings by local authorities and nationalised industries are required. It is necessary to enforce the disposal of unwanted land. My hon. Friend the Member for Daventry (Mr. Jones) made a valuable suggestion with regard to the sales of these properties. This matter is very important.

On all these economic matters, I hope that the Government will pay attention to the many points made in the debate.

On the question of social stability, on which the hon. Member for Kingston upon Hull, Central raised a number of matters affecting the movement of population from the inner areas to vast council estates, I believe that a great deal of social work needs to be done to stabilise the community on a neighbourhood basis also by way of a tenants' charter and in a great number of other matters involving people more closely in what is going on. So far we are short of thought about that on the part of the Government, but I am sure that these aspects will be raised on a number of occasions in future.

9.32 p.m.

The Minister for Housing and Construction (Mr. Reginald Freeson)

The debate has demonstrated our deep concern for the problems of our inner cities—the deprivation caused by unemployment, the squalor of derelict land, poor and inadequate choice in housing and a decaying environment. However, I should like to start with the general observation that we must remember, too, that these are areas, as at least one hon. Member has said during the debate, of opportunity, often enhanced by the young migrants and immigrants who have been attracted there. We should not always be talking in terms of problems. There are challenges and opportunities in these areas. It will take years of consistent effort to renew them, but nevertheless challenge and opportunity are there.

In closing the debate I shall deal with a number of general points which have arisen, implicitly or explicitly, about our urban renewal policy. First, let me deal with at least some of the specific questions raised about the Bill, taking first some of the points raised by the hon. Member for Birmingham, Hall Green (Mr. Eyre). The hon. Member raised a number of detailed points which, without disrespect, I think it would be better to take up as Committee points when we go into Committee. However, there were one or two points that he made which perhaps I can deal with now.

The hon. Member spoke of too much power of intervention by the Secretary of State and he said that we should give our confidence to the local authority and that in Committee we should delete these powers of intervention. He said that a matter of seconds after he had been pleading with us to remove the power of discretion of local authorities in one or two clauses so far as the issuing of financial aid was concerned. We have to get some consistency here. The hon. Member cannot be pleading for greater discretion while at the same time pleading with us to remove discretion.

The hon. Member asked a specific question about the set-up of the partnership, which, he seems to suggest, should be smaller and more efficient but with more members. I am not quite sure how we are to achieve that. However, he asked a specific question about the position of the area health authorities. Obviously, that is not for me. I would not be able to say at this stage what would be their precise and detailed input in each of one of the seven areas, or, indeed, in the programme authorities, where one hopes also to get some kind of liaison going. But they are members in the partnership and they bring their appropriate back-up secretariat and resources to bear as part of the partnership. They will be participating in the machinery and in the formulation of programmes in one way or the other according to the different areas' needs.

The hon. Gentleman asked about the police authorities being brought in. Outside London they are already there by virtue of the local authorities being participating members. In some of the partnership committees there are police representatives—indeed, in one or two instances, chief constables. Certainly the chief constables are represented or are attending at the earlier meetings. The Home Office is not represented, but we have a range of Ministers present. However, we are more concerned to get at these matters in the local context. Issues such as race, education, housing and so on come up in that they will be part of the input of the local authorities, the county and district authorities, as well as the Government in formulating the policies.

The IDCs are matters which are subject to review, as regional policy is subject to review, by the Department of Industry. But it is my experience, going back even to the time before this initiative on the partnerships was started, that IDCs were not the main problem, if they were a problem at all, in inner city areas, even in cities such as Birmingham and London, except to a degree psychologically. They have been so relaxed in recent times that there is little reason to attach a great deal of importance to them.

My hon. Friend the Under-Secretary of State for Industry will have heard the observations made in the debate and will no doubt take them on board in his consideration of these matters within his Department. My hon. Friend has been particularly assiduous in attending today because he has a responsibility for small firms. With my right hon. Friend the Chancellor of the Duchy of Lancaster and myself, he has been very active in the conferences we have been sponsoring on this matter.

Mr. Michael Morris

We shall watch the Under-Secretary's progress.

Mr. Freeson

If the hon. Gentleman is referring to Committee membership, that is not for me. There are other channels for arranging it.

The welcome given to the Bill by hon. Members, particularly Conservative Members, was somewhat marred by the tone set by the hon. Member for Henley (Mr. Heseltine) and followed by others. That is unfortunate on such a matter. The hon. Gentleman and other hon. Members commented somewhat contemptuously on certain aspects of the partnership arrangements. The hon. Gentleman was particularly critical of the famous first meeting of the Hackney and Islington partnership, which had 46 members. One of his hon. Friends wanted to increase the number to 146. The right hon. Member for Worcester (Mr. Walker) was critical of the 35 who attended the first meeting in Birmingham.

Hon. Members' reaction is based on a misunderstanding. The partnerships will not be concerned with the distribution of £1 million, £2 million or £5 million of urban aid money. At the first meetings the issue of distribution was not discussed. They will be concerned increasingly with the full range of public services and expenditure in these areas, which will be helpfully primed to a degree by the enhanced urban aid programme. We are concerned not simply with the distribution of £125 million, or a large part of that £125 million, of urban aid but with main programmes and how they shall develop in these areas.

Central and local government programmes costing hundreds of millions of pounds a year are involved. In Liverpool the amount is £150 million to £200 million and in Birmingham it is about £300 million of budget per year by the local authority, a large part of which is supplied by the Government through the rate support grant. Various other provisions are being made. These are the programmes that must be viewed in a total way in the development of this policy.

Let me take one example from the Liverpool case—£49 million of capital expenditure on housing alone in 1978. The sooner these resources are enhanced as the economic situation improves, the more I shall like it, provided that we can use them to improve our housing. To talk of one element that reflects the expenditure that will arise under the Bill as chicken feed, and to do so out of the context of that which we are trying to develop across the board, is totally to misunderstand what we are about.

I say to my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Thomas) that it is a matter just as much of redistributing or reshaping expenditure as of enhancing, and for quite a long time to come that will be even more important. When we are talking about large parts of about £13,000 million a year being spent in local government services, of which about 60 per cent. is provided by central Government and a large part of that is expenditure already taking place in the old urban areas, we have to ask ourselves about the methods that are being used by the Government, by local government and other agencies in the use of these resources. Can they be better organised to achieve a more consistent and sensitive urban renewal policy in future than in the past? This is an important issue that must be made clear at the outset of our policy.

Mr. Mike Thomas

Is my right hon. Friend aware—I am sure he is—that associated with this general strand of development there will be considerable concern among local authorities which from time to time argue that they wish to have greater freedom to spend and less influence from the central Government? I do not make a judgment as to whether that is right or wrong in certain instances, but the pursuit of the policy of redistribution will have to be a road carefully trod if the experience of local authorities such as Newcastle, which is extensive, is to be used properly and the best use is to be made of the input. One small additional point is that the Home Office is represented in the Newcastle-Gateshead partnership agreement.

Mr. Freeson

The Home Office is represented, yes, but the Minister is not likely to be there. All the Departments involved are likely to be represented. I was talking about ministerial representation, but I take my hon. Friend's point.

What we must do in the Government is what Newcastle and a number of other authorities have been starting to do in recent years. They have begun to redirect their resources and to alter their budgeting systems. That will be a key development in future at local authority and Government levels. It will not be easy. It will have to be done carefully and consistently, and it will be difficult. However, it must be done because we cannot get a total integral approach to urban renewal in these areas, using the phrase in its broadest sense, if we continue with the old compartmental levels that we have had in the past at every level. It is a problem not easy of solution, but that is the direction in which we must proceed.

Mr. Arthur Jones

The Minister is on an interesting point which I mentioned in my speech. Some of us take the view that the development corporations have played a valuable role in the past. Are we looking now at a form of partnership arrangement whereby the Government will apply the same limited resources and will involve themselves in the chosen areas to promote development by local authorities along the lines that the Government think desirable? I subscribe to that. It is clearly a change of approach. I hope that the right hon. Gentleman is able to assure us that there is recognition of the necessity of that approach.

Mr. Freeson

Clearly there is a change of approach.

At this stage I cannot add to the general description in the White Paper. However, if hon. Members are interested in pursuing the matter and obtaining more detail, we can make available to them the background documents that have been used to provide what might be termed guidelines for discussing and setting up the committees and the necessary machinery. That will not be revealing of the details for which the hon. Gentleman is asking, but the documents will provide an indication of the Government's thinking as regards the creation of the professional teams and the partnership arrangements in each of the areas. They will be used as guidelines for the programme authorities and other authorities.

A number of detailed matters have been raised. My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) asked how far Clause 2 powers could be used. I think that there was a certain amount of confusion in the terminology of the question. At one stage my right hon. Friend was being asked whether there will be grants for new buildings. At a later stage the questioning swung over to the powers to give loans. For the purposes of clarification before we discuss these matters in Committee, we have been asked whether Clause 2 powers could be used for new buildings. The answer to that is "Yes", but that is not a matter of grant aid in that particular case if we look at the terms of the clause. There was a certain amount of confusion which I thought I should dispel.

I was sorry to hear my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) suggest that co-operation between county and district authorities in his area might be difficult. We are providing concurrent powers against the back ground of wanting to see, in a spirit of partnership, both in the partnership areas and in the programme authorities, close co-operation between county and district authorities. All the indications—I have no reason to think that they are false—are that there will be such cooperation. I have seen those indications in each of the meetings I have attended either as chairman or as a participant in the discussions.

Mr. Alison

The right hon. Gentleman has pointed out that loans for buildings are available under Clause 2 but that grants are available in relation to Clause 3. As £1,000 is the limit per operation under Clause 3, it is not likely that it will go far in making a building.

Mr. Freeson

That point can be pursued in greater detail in Committee. I was making a general policy point about the framework of the Bill. Most of the debate has dealt with the general considerations, so I will leave detail to be pursued at greater length in Committee and will now turn to some of the more important issues.

Mr. McNamara

Will my right hon. Friend answer the general question I put about consultancy? It is of particular interest to people covered by compulsory purchase orders.

Mr. Freeson

I listened carefully to what my hon. Friend said, because I was interested in the approach to small firms. I was not clear, however, whether he was seeking to establish CPO advisory services or a wider kind of consultancy or advisory service. If the latter is the case, I suspect that the answer is that we are already taking the initiative along those lines. The Department of Industry is soon to embark on the first of these small industry advisory bureaux—I have forgotten the precise title—to do what my hon. Friend wants.

Mr. McNamara

But after the compulsory purchase orders?

Mr. Freeson

I do not think that we shall set up a consultancy service merely to advise small firms of their position under compulsory purchase orders. That would be a narrow remit. But the advisory bureau which we are establishing generally to help them can cover questions like compulsory purchase orders, amongst other things. I am sure that my hon. Friend's point will be adequately met. If there are difficulties, no doubt the Department of Industry will go into them.

Over the last decade, as has been stressed by the hon. Member for Liverpool, Wavertree (Mr. Steen), there has been a variety of initiatives, not just in Liverpool but elsewhere, to deal with urban decay and deprivation on an area basis, but all rather fragmented—housing priority areas, education priority areas, the urban aid programme and several other schemes, some still operating while others have passed into the record.

The Government decided, especially in the light of the work of the inner area studies, which I chaired for three to four years—they were started by the right hon. Member for Worcester in 1972—that the time was long overdue to draw these efforts at positive discrimination together. Large parts of our cities are in a mess and we have to act speedily, consistently and comprehensively—I use the words advisedly—over a long period, starting from now, to make them worth living in in every possible respect.

We need to tackle the priority areas, as reflected in the partnerships, in a comprehensive and continuing programme of action on housing, education, employment, the environment, community services and planning, because they are all interrelated and are not separate issues or separate services. This needs close cooperation, co-ordination and integration. I cannot stress enough the words "co-ordination" and "integration", because in my view the chief practical obstacle to advance in the inner urban areas is compartmented and fragmented Government and local authority policies, programmes and budgets. This was already clear to a growing number of people by the mid-1960s. We did not need research to tell us what we had concluded over a decade ago. The corporate methods of developing our new and expanded towns need to be adapted—not aped—and applied to the problems of urban renewal in the old areas.

Organisation and co-ordination are the essence of our approach to urban renewal. In our deprived and run down inner city areas, there is no one problem to solve. There are many problems. Employment is a major one and has been the central theme of the debate. There are other factors which influence employment, and they have been brought out in the debate. There are matters such as environment, education, health, social services, land management, planning, transport and traffic, and also housing, in type, quality and tenure.

All these matters are closely related, physically, administratively and policy-wise. They affect customers in all their different ways. By "customers" I mean the people living down on the ground. Hence the partnership approach that we have evolved, which is a formal involvement, co-operation and commitment of all the various Departments of Government, organisations and local authority departments.

We are advocating this comprehensive approach also to the programme authorities, and, I stress, to any other cities wishing to tackle urban renewal. It is not simply a question of adding small or large sums of money to the urban aid programme, however important that is. It is a question of method and approach. Many lessons will emerge from these initiatives in the partnership areas—lessons for the programme authorities and lessons for other authorities with similar problems.

Mr. Steen

Why are the Government so insistent that the people themselves in the inner areas should not be part of the decision-making process? Why does the Minister want them to be only consulted but not involved in the decision-making process?

Mr. Freeson

In relation to the point I was making that is a total non sequitur, but no doubt the hon. Gentleman intended to get it on the record. He is quite wrong about this, and, incidentally, is in contradiction to the remarks of one of his hon. Friends about community involvement and interest.

Contrary to what the hon. Member for Wavertree suggests, there is more interest now being created in what we are trying to do among the community groups for Liverpool, Manchester, Birmingham, London and elsewhere around the country than we have seen for a very long time. We are looking at ways, which will vary from one partnership and programme authority to another, in which we can create the right kind of liaison, the right kind of co-ordination and consultation. They are now beginning to be worked out.

For example, in Manchester the city authority will hold special conferences with the various bodies across the city. In Salford a different method has been adopted, and special channels of communication will be established with the town hall. In Liverpool other methods will be used. The work is now in hand. I do not know what the final outcome will be, but let there be no misunderstanding about it. It is essential—and central to what we are trying to do in this field—to get community bodies involved.

Mr. Heseltine

I wonder whether the Minister has considered preparing, when all these discussions have taken place, some sort of statement of purpose and objectives, so that we may see what is supposed to be coming out and whether any progress is being made.

Mr. Freeson

As a matter of fact, in at least one partnership authority that is precisely what has been done. There is a preliminary document and it will be repeated elsewhere. I know about it personally, having been chairman of the group concerned. The document refers to the aims, objectives and problems and it has been circulated for discussion as a preliminary document, by the many bodies to which reference has been made, while we are still formulating the work. But these are not debating societies that we are creating. They are partnerships, groups and committees which are designed to get programmes going. We do not want to spend so much time on consultation as to hold up the programmes. We want to have sufficient consultation to influence action, not to prevent it, and it is an important and difficult balance that has to be struck.

In the remaining time available to me I want to try to touch on some of the other ground covered in the course of the debate. In regard to what was said by one or two hon. Members, I stress that central to our policy, not singular to it, is that the decline in the employment base of the inner cities is the biggest single problem now facing us in those areas. It is not the only one but it is the biggest single one. Unemployment and underemployment—also very important—in inner city areas have been exacerbated by but are not products of the present world recession. They were there before. If we are not careful, when times get better generally the problems will still remain in the inner areas.

The industrial structure of the country has been changing as traditional industries have declined. This has taken place particularly sharply in the central parts of the old urban areas. It is not simply a question of firms dispersing to outer areas. It is a question of the death of firms. The whole character of these areas has changed, partly because of planning changes but also because the changing demographic, social and economic nature of the areas has closed down the outlets of goods and services that were provided in the past.

In some cases redevelopment has been unavoidable and desirable, and that has astened the decline of small businesses. The way in which development has been carried out, together with the pull of owner-occupation to the more spacious suburbs, has disrupted communities. It was not simply the bulldozer, however significant. It was the cumulative effect of decades of moving out, much of which has been spontaneous.

If we look at the available figures, we find that the 15 per cent. or at the most 20 per cent. of the industry and population that have moved out of inner city areas have been planned movement out to new towns or planned programmes of development on estates. The rest has been spontaneous with no planning or control. What we must do is check this movement out—which was quite right for the most part—without returning to the inner areas the pressures that were removed from them.

As a consequence of that—this is a generality but it is valid—we have had the selective movement out which many hon. Members have referred to today and in previous debates. The old, the unskilled and less well off have predominantly been left behind and the better off, whether working-class or middle-class, and others, have moved out. But that has nothing to do with planned Government policy of any kind, contrary to what the hon. Member for Henley told the House earlier. The problem is more complex than that. We have to look at these things much more sensitively.

Mr. Heseltine

I do not want there to be any misunderstanding. I did not want to imply that the movement I was talking about was planned. The fact that it is critical does not mean that it was planned. But reversing the process surely depends upon persuading that very 80 per cent. to come back voluntarily.

Mr. Freeson

No. That is nonsense. It is not our objective to get 2 million people to move back into London so that we again have 8 million people living in London. That is a gross overstatement. What we are concerned about is slowing down the rate of movement out and also to get a better balance of movement out or in so that we do not have a repetition of the sharp cleavages socially and economically that emerged over the past decade or so.

It is not a question of getting 2 million people to move back into London. That is not the kind of issue we are concerned about. If we are to case the problems that ruined these areas, there must be not less intervention by public authorities but more positive development planning, coordination, public participation and more coherence in the way in which we handle these city centres.

I reinforce the point made by the right hon. Member for Worcester that we cannot leave this to market forces. There must be public involvement. That is the only way to underpin any renewal of our city centres along the lines that I have been advocating to the House this evening.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

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1. INNER URBAN AREAS [MONEY] 81 words
2. STATUTORY INSTRUMENTS &c.
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1. POULTRY 44 words
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3. OVERSEAS DEVELOPMENT 36 words