LOANS FOR ERECTION OF INDUSTRIAL BUILDINGS ETC.

HC Deb 24 May 1978 vol 950 cc1650-707

7.0 p.m.

Mr. A. J. Beith (Berwick-upon-Tweed)

I beg to move Amendment No. 1, in page 7, line 35, leave out Clause 8.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

With this we may take the following amendments:

No. 2, in page 10, line 14, leave out Clause 11.

No. 3, in page 10, line 39, leave out Clause 12.

No. 4, in page 13, line 33, leave out Clause 13.

Mr. Beith

It is not my intention in moving this group of amendments to delay the main body of the Bill. This Bill has a very long history. It has been with us for two years. It has benefited from the procedure by which Private Bills can carry over from one Session to another and it has become rather long in the tooth. It contains a variety of provisions to which none of us could take exception and many which, happily, other parts of the country do not need.

It contains clauses, for example, designed to license entertainment by way of posing—provisions which I am glad to say are not normally felt to be necessary in my part of the country. For example, it says that the licences are those used for public entertainment consisting wholly or partly of human posing, shall be deemed for the purposes … and so on. I am glad to say we do not need those powers. The Bill includes many important minor matters that the GLC must bring forward—matters such as admission charges to Kenwood House, the closing of parks on Sundays, the fines for non-return of library books and all the general detailed matters which are the stock-in-trade of the Private Bills that come to us at regular intervals from the GLC.

It is not these features which have given rise to concern, but those which are concerned with substantial additions to the powers of the GLC itself and of certain London boroughs in respect of industrial policy. These powers and the proposal to acquire them have aroused genuine concern in many parts of the country, not least in my own constituency and in the area of the North of England Development Council which has had a number of comments to make about them.

It is apparent to everyone, from whatever part of the country he comes, that there are parts of London with very serious problems. These problems are particularly concerned with regeneration. One cannot look at London's dockland, for example, without recognising that here is a major problem to be tackled. Also within other parts of London there is massive prosperity on a scale which is quite unknown in the more generally depressed regions of the country. However, none of us would want to under-estimate the scale of difficulty in some inner London areas.

It would be quite wrong to deny to the authorities in some form—central or local—the means that are needed to tackle these problems. The argument that we must consider is whether these particular provisions should be given to the London boroughs and to the GLC in order to tackle the problems.

Two years ago when this Bill first came before us, the Government's policy on inner urban areas was much less clear than it is today. The Government's attitude to the regions such as the North and the West was much clearer. At that time their inner urban policy was still being developed. Since this Bill has come before us the Inner Urban Areas Bill has been through its stages and is about to become law. It has changed the situation considerably. We must now see this Bill against the background of the Inner Urban Areas Bill and the various powers and special procedures which that establishes.

Parts of London which are thought to merit special attention in the Inner Urban Areas are not in this Bill tonight—for example, Islington and Hackney, which are partnership areas under the Government's proposals.

There are other conurbations waiting in the wings with their own proposals and ideas about powers that they could have. We could finish up with a confused pattern of powers, and even worse we could risk destroying any kind of order of priorities in ways of tackling the problems facing different parts of the country. We could end up with nothing more than a levelling-up process in which each part of the country in turn followed on with new proposals for power. At the end of the day as a result there would be no attempt to use incentives of any kind to steer industries in particular directions because any attempt at incentives would be wholly cancelled out.

The day may come when we have a Government who might go along with that and say that it should be the policy. In that case, why should a variety of local authorities engage in a competitive bidding process, spending their ratepayers' money in order to bring it about? We might as well scrap the whole idea of industrial incentives if the end product is a lot of authorities following suit and increasing their powers in a levelling-up process.

We might even get a process of continued competition in which we have something of an auction. In such a case one authority after another would keep trying to go that bit further than another authority had gone in order to bid up the stakes and opportunities and attract industry in that way. Neither prospect seems encouraging for any kind of sensible regional policy, least of all one which is designed to benefit the inner areas of London.

To give these powers could have that effect on our regional policy at a time when the traditional assisted areas are feeling, particularly with the removal of the employment premium, that they are in a rather weak position.

The North of England Development Council published a lengthy report recently in which it had some very relevant comments. It said: There are good grounds for the regions to ally themselves wherever possible with the Inner Cities. The study by the South East Strategy Team on job loss in London between 1966 and 1974 shows that 73% was due to the closure of plants (there is traditionally a high death and low birth rate for firms in Inner Cities) and reduction of employment in those that remained. Only 9% was attributable to moves to the Assisted Areas. The remainder 18% was lost to the non-Assisted Areas of which 7% was to the new or expanding towns. Thus London lost twice as many jobs to the "prosperous" regions as it did to the Assisted Areas. Conventional regional policy has therefore not been a major factor in employment decline of the Inner Cities outside the Assisted Areas. Some people in London feel, when they see advertisements designed to attract firms to areas like the North, that it is at London's expense that this promotion has taken place. Experience shows that it has been to the contrary. Firms are anxious to move out of London to non-assisted areas but the real decline within inner London has not been the result of regional policy.

Indeed, the NEDC argues that both the regions and the inner cities have a real interest in a proper industrial development certificate policy adjusted to meet the needs of assisted areas and of the pockets of serious problems in Inner London. The NEDC went on to say how concerned it was about this Bill and the powers that it gives. It says: The Bill, if it becomes law will give to ten named Boroughs powers greater than those exercised by any other conurbation, and even those laid down in the Inner Urban Areas Bill. We are concerned about the implications for the Regions and regional policy. Regional policy was about diverting resources from certain areas of the United Kingdom to others so that there would be more balanced industrial growth without overheating of the economy etc. To give London the Power to build advance factories, at present confined to the Assisted Areas, to make 50 per cent. grants towards plant and machinery, while even Special Development Areas are restricted to 22 per cent.; and to promote their area at home and abroad when it is the 'natural' centre anyway, could have grave repercussions on regional policy. Priorities will have been changed and the advantages that regional policy sought to give to the Assisted Areas will largely have been removed. I disagree with the NEDC on one aspect of that. I see no reason why London should not have the right to canvass and advertise its merits like any other area and it would be wrong to seek to deprive it of that. What we are really talking about are the major financial incentives in the Bill. Concern about those remains very real indeed. There can be no doubt about the continued need for selective regional policies designed to deal with areas which face serious difficulty, and that need has been underlined in recent OECD reports which say, for example, Regional problems will not solve themselves, or disappear, as a result of regionally indifferentiated national policies of economic growth which can accentuate, as well as alleviate, unacceptable regional disparities. I hesitate to wonder from what language that was translated. However, its meaning, if fairly distilled, is that any sort of general economic policy that brings a measure of success to the country as a whole could leave some regions out in the cold.

London has every reason to realise that. Even in period of general prosperity in London some of the areas with which the Bill is concerned have faced increasing difficulty. At a time when organisations such as the North-East Development Council, the North-West Industrial Development Association and the Yorkshire and Humberside Development Agency are getting increasingly concerned about how they can attract industry to their areas, we must consider carefully the powers proposed in the Bill.

The Government have expressed considerable reservations about Clauses 8 and 13. Indeed, they expressed almost outright opposition when they were considered. Clause 8 extends the powers granted to local authorities in the Local Authorities (Land) Act 1963. It gives them powers to advance 90 per cent. of the security on an industrial building. The Secretary of State for the Environment took the view that he needed to have, in effect, a veto power over the exercise of that provision. I am not quite sure what happened because the power of authority needed from the Secretary of State has not found its way into the Bill as it appears before us. No doubt individual Ministers who are concerned with these matters will go into the history of that aspect when they contribute to the debate.

In the same group of clauses are wide-ranging powers that in some ways duplicate the powers contained within the Inner Urban Areas Bill. They would seem to set in an odd light the partnership programme and the designated areas pattern that the Government laid down in the Inner Urban Areas Bill. Some of the things that could be done by this measure could be done under existing legislation—for example, under the Local Government Act 1972.

We are bound to question whether expansion on this scale is justified. It is in Clause 12 that perhaps the most dramatic power occurs. The clause gives the 10 specified boroughs the ability to make 50 per cent. grants towards the cost of plant and machinery, grants of £1,000 for each job created in enterprises employing fewer than 100 persons. At some stage I hope that the Minister will clarify whether it is 100 persons in a particular plant or 100 persons in the firm as a whole. It may be that the promoters of the Bill will be able to give us some advice.

That sort of assistance is well above the level that may be offered even in special development areas, where only a 22 per cent. grant towards plant and machinery may be given. The Bill appears against the background that the small firms' employment subsidy is being extended to include the inner city partnership areas.

The Secretary of State for Industry already has powers under Section 8 of the Industry Act 1972 to give financial assistance to certain projects. It is notable that the clause does not contain the cut-off of the mysterious year of 1984 that is included in two of the other clauses in the group. One of the rather intriguing provisions is that of indexation, which is a rather unusual feature in a Private Bill. In page 12, line 21 we see that the financial limits set in the Bill are to be increased according to the increase of retail prices, and increased steadily as a result of inflation. I do not know whether that will become general practice in Private Bills of this sort, but it is a device that we should consider with some care.

At a later stage we shall discuss a clause that it is right to discuss separately. I understand from the information that I have received that it is linked to a loan project involving the possibility of foreign capital being brought into London. It would be fruitful to discuss the clause separately and to hear the views of the promoters. However, we must first consider why it is necessary for a group of boroughs in inner London so to have their present powers enhanced that they cast doubt upon the viability of existing powers available in other areas.

7.15 p.m.

We must know from the Government how they would view the continuation of such a pattern as one authority after another felt obliged substantially to increase its powers so to compete with the incentives available in inner London. It would not be right for us to allow the clauses to remain in the Bill against such doubt. I am reinforced in that view by the strength with which Ministers who know London well have expressed reservations throughout the course of these proceedings. At every stage in Committee strong Government reservations were expressed. The Secretary of State for the Environment has said of the guarantee clauses: Quite frankly I believe the Government is better able to assess this than local authorities. The right hon. Gentleman said that at a Labour Party news conference during the London borough elections. It did not seem to go down too badly.

The extent of the reservations expressed throughout by Ministers must lead us to realise that there are national policy issues at stake. It is the Government's job to assess how far regions that are relatively better off as a whole may use their resources to build in incentives for the authorities within their areas above those that poorer regions can afford.

There are areas in the pockets of central London that have unemployment rates approaching the worst in the North-East, but I do not think that there is an area in London that equals Sunderland's unemployment figures, for example. Even the high rates of unemployment in some of the boroughs of central London are in areas where there are adjacent districts that have lower rates of unemployment. In a region such as the North—if I refer to it a great deal, I hope that I shall be forgiven as it is the area that I know best—we find that there is an area of high unemployment but no area next door with half that level of unemployment offering a greater chance of getting a job. The whole pattern of the region is one of high unemployment.

Mr. Fred Evans (Caerphilly)

If there are areas with high unemployment rates adjacent to areas with low unemployment rates, there is a failure on the part of areas with low unemployment rates to absorb any of the unemployment in the areas with heavy unemployment. If that is so in the hon. Gentleman's region, what is the essential difference between what he is talking about in the North-East and that which I could talk about in South Wales from the pattern that is contained in the Bill?

Mr. Beith

The pattern that I am describing is that in areas of London pockets of high and low unemployment exist almost side by side. In the North-East there is a general high rate of unemployment. There are some extremely high peaks, but there is general high unemployment. One would have to go a long way in the North-East before coming upon an area in which an unemployed man from Sunderland could find a rate of unemployment low enough to improve his chances of getting a job. He would find it extremely difficult to come across such an area. I accept that that is small consolation for those living in the worst-off boroughs of London, but it indicates the dangers of a competition policy for regional aid.

That fear leads me to be most concerned to hear what the promoters have to say in justification of this method of proceeding. I am anxious to hear the Government's view of how that which is proposed in the Bill can be squared with national regional policy.

Mr. Robert Mellish (Bermondsey)

It seems that we are living in an Alice-in-Wonderland world. As the hon. Member for Berwick-upon-Tweed (Mr. Beith) said, the Bill has been kicking around for quite a long time. At one stage Labour Members voted for certain parts of the Bill whereas tonight Labour Members such as myself will vote against it. At an earlier stage Tory Members voted against the Bill, but I gather that some Tory Members will now vote for it. Do not let us have any pious humbug from the Opposition Front Bench before we start.

Mr. Norman Tebbit (Chingford)

rose—

Mr. Mellish

The hon. Gentleman constantly talks humbug so I do not have to refer to him separately.

It is an extraordinary Bill. The Alice-in-Wonderland feature is incredible. From my point of view a number of important events have taken place since we last debated these matters. My right hon. Friend the Secretary of State for the Environment has introduced the Inner Urban Areas Bill and taken various personal actions to assist the inner London boroughs with which I am concerned. I say to all my hon. Friends—I cannot expect support from the Opposition—that no Minister has done more for inner London boroughs than my right hon. Friend. The grants, the help and the attitudes have all been in their favour. The idea seems to be that, because one or two clauses in this Bill are a little more favourable than the Inner Urban Areas Bill, we should all dash and vote with the Opposition who not so long ago voted the other way round. I shall not be a party to it. I shall not have any of that nonsense.

Southwark is one of the boroughs which petitioned. Therefore, it might be thought that, being a local lad and wanting to defend my local authority, I should dash to support it because it was one of the petitioners. I have already written to my town clerk and told him that he will not get my support. I have told him why, and I am sure that he has passed on my reasons to every chairman.

On the Clause 8 argument, it is true that as now proposed—50 per cent. grants for plant and machinery—that provision is better than the provision in the Inner Urban Areas Bill. But that is restricted. Hackney and Islington are excluded under the GLC set-up. What authority has the GLC to do that? Are Hackney and Islington so much better off than the borough of Southwark? My hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown) may be very surprised to hear me say that. I think that their needs are equal. It is wrong in principle to exclude those boroughs.

I believe that much of what is in the Bill has been overlapped by the Inner Urban Areas Bill. There is no doubt that my right hon. Friend's Bill is a far better vehicle for what I want done for London than the Bill before us. The argument appears to be that the GLC Bill will give more power to Southwark, for example, to deal with London's dockland area.

I said that we lived in an Alice-in-Wonderland world. I do not know what the hon. Member for Berwick-upon-Tweed is doing mucking about with a London Bill. However, as a Londoner, I point out to the hon. Gentleman that London has suffered a great deal down the years. We have had this argument before and it is worth repeating. No one played a greater part than I did in hurting London. I have always admitted that in the past. Indeed, Tory Ministers who preceded and who came after me followed the same attitude as I had adopted. We were advised that London was over-populated and that it had more jobs than it needed. We were advised that London must share, and that is what London did. It sent thousands of people and jobs out of its territory at great sacrifice.

What has happened? This is the important point, and this is where my right hon. Friend's personal action comes in. We in London have said "Halt. Enough is enough." I said that in another context some time ago and was called all kinds of things.

Of course, I come at once to the defence of my London colleagues and my borough. Does anyone suggest that this Bill will provide dockland with more money than it would get under the Inner Urban Areas Bill? Stuff and nonsense. It is absolute rubbish.

The idea has been promoted that Trammell Crow, a great American firm, is interested in part of dockland. I do not know. I have never been to Texas. I should enjoy the trip. However, I gather that Trammell Crow is a great firm which wants to come to my part of dockland—Surrey Docks—and to develop in a very big way. There is talk of several thousand jobs. I shall watch with interest and shall be delighted if those jobs are created.

Trammell Crow will get all the help that it needs, if it justifies its case—it must do that, whatever Bill is before us—under Section 8 of the Industry Act. There is no argument here that somehow the Greater London Council (General Powers) Bill will give powers which are not available in the Inner Urban Areas Bill.

It is against that background that I come here tonight. I say to my right hon. Friend in a friendly way that his trouble is that he is his own worst Press relations officer. If I had his job, I should be on television night after night telling every Londoner how good I was and what I was doing for London. My right hon. Friend has not got what I call the political flair to go out and say what is going on for London. Perhaps he needs a good PRO. Indeed, I might even take on the job. But it has to be said that no Minister has done more for inner London boroughs than my right hon. Friend. I say that in short and simple terms.

I shall support the amendments moved by the hon. Member for Berwick-upon-Tweed, except one about which I am very concerned. I hope that my right hon. Friend will say something on this matter. I have not discussed this aspect with him. However, I hope that Londoners will be allowed to publicise. I hope that there will be no restriction on publicity. Let them put up placards and have a competition about which borough has the best to offer. Let us see whether Hackney is a better place to go to than Southwark. I am all for that. That is the kind of competition to which I have been looking forward for years.

I shall not support what I think is better covered in the Inner Urban Areas Bill. I shall support the Liberal amendments. I said that this was an Alice-in-Wonderland world. Whoever heard of me supporting Liberals? They really are a shower. One has only to think about it. However, I shall support the Liberal amendments for the reasons that I have given.

Mr. Michael Alison (Barkston Ash)

As a representative of a Yorkshire constituency, I hope that the right hon. Member for Bermondsey (Mr. Mellish), who has my brother-in-law living in his constituency and I think voting for him, will not take me to task for sounding a Yorkshire voice from the Back Benches in this London debate.

I intervene for two reasons. I have two different county authorities within my constituency—an unusually large constituency—half in West Yorkshire and half in North Yorkshire. That fact epitomises one of the problems that the Bill will create for the Government.

I do not support the amendments, nor shall I vote in favour of them. However, I hope that the Government will be able to reassure other authorities besides those which are likely to benefit from the powers taken in the Bill.

The West Yorkshire County Council Bill, which has just completed its Committee stage in the House of Lords, is almost identical in its industry provisions to this Bill. Therefore, in my West Yorkshire County Council capacity I have a vested interest in the progress of this Bill. But that does not alter the fact that there will be an increasing number of anomalies and disparities in the powers and provisions available for different local authorities in different parts of the country as a result of the effects of the Inner Urban Areas Bill and of the provisions which may be made available to the West Yorkshire County Council and to the Greater London Council.

Briefly, I should like to spell out some of the differences in the symmetry of powers available to some local authorities. Clause 8 of the Greater London Council (General Powers) Bill provides for loans for the acquisition of land and for works on land up to 90 per cent. Clause 2 of the Inner Urban Areas Bill gives precisely parallel powers.

Section 12(1) of the County of South Glamorgan Act 1976 gives powers up to 90 per cent.—exactly the same as Clause 2 of the Inner Urban Areas Bill. The West Yorkshire County Council Bill seeks similar powers. Now we have the same powers being sought by the GLC in this Bill.

It does not make sense that a limitation as to eligibility should be applied in the Inner Urban Areas Bill to this level of grant for the acquisition of land and works on land and that it should not be possible for other local auhtorities—for example, the North Yorkshire County Council—to qualify for these powers up to 90 per cent. until their existing general powers Acts give out and they have to come to the House to get them renewed and presumably seek and get the same powers as London.

7.30 p.m.

There is an anomaly. If it is the Government's policy to encourage various local authorities to secure specific powers similar to those provided in either the County of South Glamorgan (General Powers) Act or the Inner Urban Areas Bill, they must put those authorities which are not to have those powers out of their misery and tell them that they will be included by designation in the relevant section of the Inner Urban Areas Bill. I hope that the Minister will comment on that.

I hope that he will be able to assure us that North Yorkshire, for example, which is adjacent to West Yorkshire, automatically will be given the rights of 90 per cent. loan facilities as provided in Clause 2 of the Inner Urban Areas Bill if the Government are not to prevent the GLC from taking those powers in its Private Bill. We must have symmetry for local authorities. It is unsatisfactory that the matter should be entirely random and that one must bring forward a Private Bill to secure those powers.

The hon. Member for Berwick-upon-Tweed (Mr. Beith) described Clause 12 as the heart of the Bill. This deals with special powers for industry. The Inner Urban Areas Bill is fairly specific in Clause 3 which gives extensive powers to make grants with a natural limit or a percentage limit. That Bill explicitly excludes the possibility of plant and machinery being eligible for grant or loan, but the Greater London Council (General Powers) Bill seeks that power. That is a power which it should have. In the Inner Urban Areas Bill we tried to include plant and machinery so that it would be eligible for grant or loans as well as works on land. The Government turned down our amendment.

In Clause 12 the Greater London Council (General Powers) Bill provides that plant and machinery shall qualify for those special levels of grant or loan. It will be paradoxical if some of the partnership areas in London, specified as the beneficiaries under the inner Urban Areas Bill, cannot get grants for plant and machinery because the Minister deliberately refuses to allow them to have it in the Inner Urban Areas Bill. However, they will be allowed to have such grants under this Bill. That is an anomaly, contradiction and imbalance which the Government should put right.

If the Government are to allow the London boroughs to have power to make grants for plant and machinery they must extend that power and include it in Clause 3 of the Inner Urban Areas Bill. That would introduce symmetry into these provisions.

There is a precedent for these powers. In the Inner Urban Areas Bill the Minister limits the authorities that can benefit from the provisions in that Bill. But the Tyne and Wear (General Powers) Act makes it possible for all the powers specified in Clause 3 of the Inner Urban Areas Bill to be made available in Tyne and Wear on an improved basis. In that Act there is no Ministerial veto on the provision in the Tyne and Wear area. No ceiling is put on the level of grant. That is another anomaly between what is available in the Inner Urban Areas Bill, what will be provided in the general powers Bill for London and what is available to the general run of local authorities.

Clause 13 deals with the guarantee of rent for industrial buildings. This is another anomaly. Clause 6 of the Inner Urban Areas Bill provides for grants to be made towards the rents of industrial buildings. The Tyne and Wear Act already provides this power for that area. It is now to be provided in this Bill and it will probably be provided in the Bill proposed by the West Yorkshire County Council. A selective range of local authorities which introduce private Bills will have those powers, but authorities covered by the Inner Urban Areas Bill are restricted.

It is necessary for the Government to indicate whether they approve of features such as grants towards plant and machinery, 90 per cent. loans and guarantees for rents on industrial buildings. Do the Government approve of those provisions in principle? If they do approve they must make those powers available to local authorities generally under the Inner Urban Areas Bill.

There is no point in having a restrictive Bill which limits those powers in the partnership or programme areas—which is where the Minister draws the line in the Inner Urban Areas Bill—but which gives a green light to those authorities which bring forward Private Bills.

Mr. Eddie Loyden (Liverpool, Garston)

I am in sympathy with the argument. I sympathise with the London problem. The House generally has a sympathetic attitude towards London. Would not the wider proposition which could be followed by other authorities negate the efforts made in the Inner Urban Areas Bill to solve the problems of those areas which have particular difficulties and which require specific solutions? If the powers under the Bill were extended to other conurbations and local authorities, would it not destroy the whole concept of the redistribution of industry and jobs throughout the United Kingdom?

Mr. Alison

The hon. Member has pinpointed the apparent anomaly and the inherent contradiction in the Government's position. We need illumination. The idea of the Inner Urban Areas Bill was to provide a range of special opportunities and provisions for a limited selected group of authorities with particular problems. So far so good.

But an elaboration and improvement of the provisions in the Inner Urban Areas Bill is before the House in a Private Bill and the Government have said that they will not oppose those provisions and will encourage them. The Minister might be giving the Bill his blessing. We do not know. If that is the case the Government are saying to local authorities "Bring forward general powers Bills and help yourself to the same extent." If that is so, what is the Government's position on the attempt to limit these facilities?

North Yorkshire will be discriminated against in respect of both the Inner Urban Areas Bill and the powers which apparently are to be made available to West Yorkshire.

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

The hon. Member for Barkston Ash (Mr. Alison) asked for a little illumination, and I hope that I can give him some. I think this may be the right moment for me to intervene in the debate. Before I attempt to "illuminate" the hon. Gentleman perhaps I may say, on behalf of my right hon. Friend the Secretary of State, how grateful we are for the remarks by my right hon. Friend the Member for Bermondsey (Mr. Mellish), who is temporarily absent. It is true that significant changes have taken place since the Bill was last considered on Second Reading.

The hon. Member for Berwick-upon-Tweed (Mr. Beith) said that the Bill had been hanging around for some time. It has, and a lot has happened in that time. The first thing that happened was that the Department produced its White Paper on Inner city policy which foreshadowed the legislation which passed through this House and is now being considered in another place. However, it is important for the House to recognise that since the Inner Urban Areas Bill was introduced, and during its passage, it has been improved and significantly strengthened.

Let me explain what those changes were. They are important and in some respects they bear very much upon the sort of powers that are being sought in this Bill.

First, it was decided on Report to widen the Bill so that grants in industrial improvement areas and rent grants in partnership areas could be made in respect of commercial as well as industrial buildings.

Secondly, it was decided to introduce building grants in industrial improvement areas for the preservation as well as the creation of jobs, which is a matter of considerable concern to many who represent London constituencies.

Thirdly, a new power in partnership areas was incorporated in the Bill to give interest relief grants to small firms on loans for land or buildings. Lastly, there was the extension of interest-free loans in partnership areas to cover the installation of service and access roads.

The areas to be designated under the Bill for the receipt of the new powers will include a considerable part of inner London. The partnership districts will include Hackney, Islington, Lambeth, Greenwich, Lewisham, Newham, Southwark and Tower Hamlets. The programme authorities will include Hammersmith, the one programme district in the Greater London area, and my right hon. Friend the Secretary of State has announced his intention to designate the districts of Brent, Ealing, Haringey and Wandsworth.

These decisions were made on the basis of a clearly thought-out appreciation of the measure of problems faced by individual London boroughs. I submit that it is possible for decisions of this kind to be made only by the Government. [HON. MEMBERS: "No."] One of the difficulties that arise when private legislation of this kind comes forward, however well-considered it is by the Select Committee, is that the Committee cannot, by the very nature of things, take into account the whole range of problems that may exist. It so happens that 10 boroughs petitioned the House. My hon. Friend who sat on the Select Committee was able to listen to the skilfully presented evidence of those boroughs. But the Committee was unable to consider the problems of Hackney and Islington, authorities that have been designated by my right hon. Friend as partnership authorities but which are excluded from the powers suggested for the specified authorities under the Bill.

Mr. Fred Evans

Is my hon. Friend not aware that the Select Committee received documentary evidence from the Department of the Environment, the Department of Employment and the Departments of Trade and Industry. In addition to the documentary evidence there was personal evidence from leading civil servants who were there to be cross-examined. The point that my hon. Friend is now making was not brought out by any of them.

Mr. Barnett

I am aware of the care with which my hon. Friend and other members of the Committee considered the evidence that was put before them. They did not, however, consider whether Hackney and Islington might enjoy the sort of powers that were being sought by the petitioning boroughs. That is a problem. We have to examine the Bill in that sense.

It is the Department's view that any fair assessment of the relative problems of the boroughs of London—problems which vary very widely, as the hon. Member for Berwick-upon-Tweed rightly pointed out—must be made, so far as it can be, on the basis of an objective study of criteria of social need. That is what we attempted to do. It could be said that we made the wrong choices, but at least we tried to examine the situation in London and in inner urban areas elsewhere in the country to secure a proper ordering of priorities for dealing with urban problems.

Mr. Robert Rhodes James (Cambridge)

How can a Private Bill Committee consider arguments that are not put by boroughs that do not petition? The Committee was dealing with petitioners and arguments on the other side. How could the factors that the Minister has mentioned have been brought to the Committee, except by those boroughs exercising their right to petition?

7.45 p.m.

Mr. Barnett

The hon. Member for Cambridge (Mr. Rhodes James) has made my point; they cannot. That is precisely why the only way in which there can be a fair and proper assessment where needs lie, and what special powers need to be provided, is through public legislation, in which we consider these matters on the basis of objective criteria and not on the basis of petitions that may come from specific boroughs which have every right to petition the House.

Mr. Eric Ogden (Liverpool, West Derby)

There is no joy in making things more difficult, but why cannot the Government assume that if no one has objected there are no objections to make? Surely there are more than enough ways to make objections known, through the procedure of inquiries and petitions. Surely if an authority in London has not objected it must mean that it has no objections to make. Why cannot local ratepayers, through their elected councillors and county councillors, be allowed to spend their money to aid industry in their areas? If Berwick-upon-Tweed wants to do that, let it bring in a Bill to provide for that. If Merseyside wants it—and by God, we need it—let it do the same, no matter who controls the council.

Mr. Barnett

No one objects to a local authority's doing what is provided for within the law. This legislation provides extra powers for certain local authorities. The Inner Urban Areas Bill similarly allows certain local authorities to exercise powers which are not available to other local authorities. The philosophy behind that Bill is to provide extra powers to the local authorities with the greatest needs.

The hon. Member for Barkston Ash provoked me to speak at this point because he expressed proper anxiety about the relationship between private legislation in general and public legislation of the Inner Urban Areas Bill type. It is with that point that I now want to deal. It is important for the House to understand the Government's position on the matter.

Between 1963 and 1973 a number of authorities in different parts of the country sought and obtained in Private Acts varying powers additional to those of the 1963 Act. No authorities in Greater London, however, obtained such powers. Section 262 of the Local Government Act 1972 provides that all local authority Private Act powers outside Greater London will, unless renewed, lapse in December 1979 in metropolitan areas, or December 1984 in non-metropolitan areas.

In the Government's view the present miscellany of supplementary powers could not be defended coherently on the basis of relative need of the areas concerned. The areas include development and special development areas, intermediate areas as well as areas without any assisted area status. We think that advantage should be taken of the "clean sweep" provided by Section 262 of the Local Government Act to start again, and that any powers for local authorities in this field should be taken coherently—though not necessarily uniformly—in general legislation.

The Inner Urban Areas Bill is the first such piece of general legislation, but it need not be the last. Thus, while the Government have been willing for authorities to retain until 1984—and even in minor respects to rationalise—such Private Act powers as their predecessor authorities possessed, they do not consider that this practice should be renewed by enacting further Private Act provisions in this field.

That is the point of principle, and I hope what I have said will go some way to reassure the hon. Gentleman on the points that he raised about West Yorkshire.

Mr. Loyden

Is it not the case that no matter whether action is taken by central Government to accommodate the problems in the regions or whether it is an act by local authorities, both have relevance to the economic situation. Therefore, the actions of the Government will be nullified by the actions of local authorities if those actions are in contradiction to the general philosophy and approach of the Government to the problems of the regions.

Mr. Barnett

My hon. Friend makes an important point. If local authorities were allowed to obtain powers of sufficient effectiveness, it would be possible to vitiate the powers on regional policy. That is a matter to which we must have regard. But it is our view that the sort of powers proposed in the Inner Urban Areas Bill will not do that, because they are concerned much more with the need to preserve and retain jobs in the inner city areas in London and in other parts of the country and in other districts which will be designated under the Bill.

Mr. Loyden

Out of the total economy?

Mr. Barnett

Yes. I do not see any necessary conflict between the Government's regional policy and the action by individual local authorities to assist industry, provided that there is some limitation on the powers possessed by local authorities.

Mr. Alison

The Minister has been helpful in trying to cover some of the points that I have made. Will he illuminate the narrow point in respect of grants for plant and machinery? If this Bill goes through, there will be within the partnership authorities first and second class citizens. First, there will be the partnership authorities which are within the ambit of the GLC Bill—namely, the dockland and metropolitan boroughs, and they will be able to make grants for plant and machinery. The partnership areas in Liverpool, Manchester, Salford, Birmingham, Newcastle and Gateshead will not be within that provision because the relevant clause of the Inner Urban Areas Bill specifically disallows grants for plant and machinery. Will this anomaly be put right in the other place?

Mr. Barnett

For the reasons that I have been giving in my speech, I cannot recommend the House to accept the provisions that are now before us, and I recommend the House to support the amendments proposed by the hon. Member for Berwick-upon-Tweed (Mr. Beith).

I was about to say that the greatest danger that faces us if we do not take this action is that which was mentioned by the hon. Member for Berwick-upon-Tweed, namely, that we shall find local authorities leapfrogging one another in search of more powers to enable them to attract more industry. I believe that to be a real danger in view of some of the Private Bills that are now on their way to this House.

For these reasons, our general recommendation is to resist legislation of this kind, which can only create the kind of anomalies about which many hon. Members are concerned. The only solution to these problems is to have general legislation to provide a proper order of priorities between different local authorities.

Mr. Geoffrey Finsberg (Hampstead)

Will the Minister clear up one point? He has listed the boroughs that will be helped in the Inner Urban Areas Bill—namely, those in partnership or designated areas. There was one notable omission—the London borough of Camden. How will that borough retain its jobs when it has been excluded deliberately from the Inner Urban Areas Bill yet would have an opportunity, under the General Powers Bill, to be given some help?

Mr. Barnett

The London borough of Camden is excluded from the list of designated authorities, as were a great many other of the 32 London boroughs excluded from the list of designated authorities, because its problems were thought by Government not to be of sufficiently great a nature to demand extra powers.

I remind the hon. Gentleman that local authorities in general for some time have had powers enabling them to assist industry in their areas. I draw his attention to the Local Authorities (Land) Act 1963. That legislation has enabled many local authorities in the past, without the benefit of private legislation, to give considerable help to industry in their own areas. As a consequence of this legislation, the hon. Gentleman is right to draw attention to the fact that Camden would not gain as a consequence of the Inner Urban Areas Bill at present because it is not one of the authorities which it is proposed to designate. That decision is taken on the basis of objective criteria to ensure that assistance goes to those boroughs in which the need is greatest.

For these reasons, we believe that it would be wrong to accept the Select Committee's decision. Accordingly, I ask the House to support the amendments.

Mr. John Moore (Croydon, Central)

I wish to make a few general observations. I accept the implied general criticism of the right hon. Member for Bermondsey (Mr. Mellish). I think that we all need chiding in terms of the previous time at which this legislation was introduced. I accept that criticism, but I shall try to speak from a pragmatic point of view.

I find this an almost perverse and a peculiar debate. I have been trying to work out the problem, but it appears that we are in the midst of one of those classic debates involving tidy government. A local authority appears to be saying one of two things. The first is that it has proposed some rather successful methods. It takes the view that those methods are so successful that they cannot be adopted because they will be an astonishing magnet which will draw funds, jobs and activities away from other areas that need them more, according to the decisions of the Government.

Mr. Fred Evans

Does the hon. Gentleman agree that the Inner Urban Areas Bill envisages using the local authority as the major tool to effect the rehabilitation of those areas, with which I entirely agree? It is that kind of local contact which amounts to the closest form of democracy. How can we square that concept with the refusal to award to such local authorities the resources to enable them to carry out essential work such as rehabilitation?

Mr. Moore

I was prompted to rise in this debate by the remarks of the spokesman of the Liberal Party, the hon. Member for Berwick-upon-Tweed (Mr. Beith), and I found the argument even more of an Alice-in-Wonderland affair than did the right hon. Member for Bermondsey. I noted the argument that there would be some kind of levelling-up process. That astonished me, because I thought that that was the sort of mechanism that Governments liked to see in creating jobs and opportunities. Such a move would reduce the level of unemployment and increase the number of job opportunities throughout the country.

The Liberal spokesman denies the validity of that argument by saying that London's decline, and London's inner city decline, have little to do with regional policies. One cannot have it both ways. I suggest that that is a most untidy point. I accept the Department's concern about the lack of tidiness in an administrative sense. So much of inner city as opposed to regional decay is related to the problem that, so much of the time, only those closest to the locality can begin to understand.

8.0 p.m.

Mr. Robert Hughes (Aberdeen, North)

Does not the hon. Gentleman see that if, under the Bill, substantially greater financial incentives were available in Greater London, in my own area of North-East Scotland we might be tempted to try to bring in a Bill providing for even greater financial incentives; then, two years later, the GLC would try to introduce another Bill to provide even higher incentives? In that case we could have this constant pull to and fro and no strategy whatsoever for the overall distribution of jobs.

Mr. Moore

I would have thought that I would not be lecturing the Labour Party on the attractions of the so-called magnet, as it is supposed to be. Forgetting that point for a moment, I do not think that those who do not come from the London area have studied with as much detail as they might the specific provisions of the GLC clauses which have relevance to the particulars that we are discussing on these amendments.

We are talking specifically about measures seeking to help small firms. This point has not so far been raised in the debate. We are talking about measures to help small firms with fewer than 100 employees, and those who know something of London's problem—the kind of decay we have seen, and the loss of jobs—know that the aid and assistance will go only to small firms.

I take the point put by the hon. Member for Aberdeen, North (Mr. Hughes), but the classic pattern has been the development of a small successful unit, often within London, and then the movement out to a place where the company develops a major plant, having grown from nothing in the central part of London or some other great city. I do not wish in any way to deprive Liverpool or any other conurbation of the same opportunities. We are essentially on an inner city argument. Our problem nationally is that when we debate this issue in a governmental sense we tend to do it regionally rather than in terms of inner urban decay.

Mr. Beith

The hon. Gentleman must not take my words out of context. In talking about levelling up, I was not decrying the objective of levelling up employment so that we get as close to full employment as we can everywhere. I was talking of levelling up the incentives available in different parts of the country so that the local authorities in almost every area each paid an identical high rate of incentive to attract firms away from each other. That would be a great deal of expenditure to no purpose. Either we would have that or we would have the even more frightenting prospect of local authorities trying to outbid each other by constantly trying to exceed that level.

Mr. Moore

Surely, again, we are arguing absurdities. What has happened to the old Liberalism of the nineteenth century? We first seem to be assuming that we automatically deprive by creating an attraction, and we also automatically seem to be assuming—this is what I find bewildering and absurd—that only from the centre could a decision of strategic value be made. Surely the interaction of competitive areas of success might raise the whole threshhold of our society, economically.

Again, we are arguing these specious points about public expenditure. I wish that the hon. Member for Berwick-upon Tweed would study the measure for which the GLC is arguing. We are talking about modest assistance by the GLC to firms with fewer than 100 employees. We are not talking about vast firms with 3,000, 5,000 or 10,000 employees. We are talking about modest little firms, trying to start up and provide employment.

This is crucial. Those of us who represent London, who understand something of its problems, and have grown up in it, will be aware of the nature of the problem of inner city decay. Its nature is so much related to the death of jobs in the inner city, and the kinds of jobs that we are talking about come basically from small units. Obviously, I would seek to try to help those hon. Members from other parts of the country, but in London we have over 11 per cent. of the nation's unemployed. We have about half of those unemployed in the inner city. When we talk about the levels of unemployment, we should also look at the level of unemployment amongst the young people between the ages of 18 and 24 in the inner areas of London.

Let us consider the possibilities of jobs for young black people there. If one says to such a young man trying to find a job "It will all be sorted out ultimately through the inner urban strategy and regional policy", one finds that he has heard it all before. He has heard it before especially in debates on regional assistance, about the ability of Government strategically to decide where and when this country is to develop. We have watched 600,000 jobs disappear from London between 1961 and 1976. Surely we should be leaping in the air saying "Here is a modest measure which has no implications for the public sector borrowing requirement and public expenditure other than within the locality of London." Supposing that it is successful: great; let everyone else seek to emulate that success.

Mr. Fred Evans

I hate to interrupt the hon. Gentleman too often, but he is bringing out some valuable points. The first point he has brought out is that much of the industry in London is seedbed industry, and that once it grows to a certain level and is capable of expansion, it moves out to what are perhaps assisted areas, so the traffic is not all one way. Of the small firms that have gone under in London, only a tiny percentage have relocated themselves elsewhere. Most have simply become non-viable and have disappeared, and their jobs have been lost to everyone.

Mr. Moore

The hon. Gentleman makes my point for me. I do not want to belabour the point that I am trying to make, other than to say that we have essentially a problem of inner city decay and that here we have suggested some modest measures to try to adjust the downward spiral. We have to break out of this cycle of decay. I cannot imagine that anyone could disagree with the proposals. The only argument, it seems, is that they are potentially too successful. With the problems that we have in inner cities, surely hon. Members on both sides of the House should seek to endorse such measures. I hope that we shall reject the amendments.

Mr. Frederick Willey (Sunderland, North)

I have sympathy with the hon. Member for Croydon, Central (Mr. Moore) in saying that a good deal of the initiative in this matter should be local. A few months ago, I argued that what we needed in Sunderland was a local "supremo" who would be responsible for the Sunderland problem. That might be a breakthrough. One needs an approach like that to get something done.

I intervene only because the hon. Member for Berwick-upon-Tweed (Mr. Beith) relied on Sunderland as the example for his case. The Tyne and Wear Act gave the precedent. That Act was justified because it was within the Government's regional policy. It made things better for Tyne and Wear. Tyne and Wear was acknowledged to be a part of the country which should have a regional policy designation.

The crux of the problem is whether we keep the differential between the regions to be assisted and the rest of the country. That is what we are really arguing about. Sunderland would certainly be prejudiced if we were to have an auction for using ratepayers' money. We have a privilege at the moment, but if this source became generally available we would lose out because we are poorer than competing authorities.

The same applies to London. If we compare London with the North-East, we find that the North-East has Darlington and Teesside, relatively better off than the rest of the region, but still we could not compare with the Greater London region.

We are against these provisions in the Bill, but that does not resolve the debate. The Government have to get down to this and make much more alive the local element of responsibility and initiative in solving the unemployment problem. For example, as the hon. Member for Croydon, Central said, the question of small firms is a matter of local knowledge, knowing what one can do and which people one can support. It is not a problem peculiar to London. It is very much now a problem in regions such as my own. We are particularly concerned. It is very difficult to support the small firms. That is a much more difficult problem. It is easy enough to say that we have the NEB and the rest, but it is very difficult to get the support through to the small firms that one feels locally should be helped.

I hope that what will come out of the debate is that the unemployment problem will not be dealt with simply on national lines. It must be broken down and made an individual local problem, with individual local responsibility in tackling it.

Mr. William Shelton (Streatham)

I have found this debate extremely interesting. I have heard two propositions, which I think I have understood rightly, put forward by the hon. Member for Berwick-upon-Tweed (Mr. Beith) and the Under-Secretary of State for the Environment.

The two propositions in support of the amendments, which I strongly oppose, seem to be as follows. The first is that there is only a finite number of jobs in the country, which in some extraordinary way must be competed for by the various regions. That entirely ignores what I believe to be the truth, that jobs are created by the environment and can be created with help under the Bill—for example, by Clauses 8, 12 and 13. Their provisions do not mean competition with other parts of the country.

The second matter, which I found extraordinary, was the arrogant, clear and unequivocal declaration that central Government knew best and that local government knows nothing about it. I very much hope that when the Under-Secretary reads Hansard tomorrow morning and sees what he said, he will write to some of his friends in local government and assure them that that is not the case.

Mr. Guy Barnett

I think that if the hon. Gentleman reads Hansard tomorrow morning he will see that I never uttered the words "central Government knows best." What I said was that the Government had to make a decision on the basis of objectively chosen criteria—rather a different statement—that it had to be done on that basis rather than on the kind of basis on which we are considering individual boroughs this evening.

Mr. Shelton

If that is so, I wonder whether the hon. Gentleman is aware that in foreshadowing the Inner Urban Areas Bill on 6th April last year the Secretary of State for the Environment said: local authorities…must be the main agents for action".—[Official Report, 6th April 1978; Vol. 929, c. 1227.] Paragraph 31 of the White Paper "Policy for the Inner Cities" said: Local authorities are the natural agencies to tackle inner area problems. Paragraph 33 said: Local authorities with inner area problems will need to be entrepreneurial in the attraction of industry and commerce. Paragraph 39 encourages local authorities: to stimulate investment by the private sector". Here we have a case in which local authorities, 10 inner London boroughs and the Greater London Council, are asking for powers to do, out of their own resources, precisely what the White Paper encourages them to do. I repeat that they are proposing to use their own resources. Therefore, it is not a matter of subtracting resources from elsewhere in the country.

It is not a matter of competition for resources. It is not a matter of resources used, for example, by my borough of Lambeth therefore not being available to Berwick-upon-Tweed. If Berwick-upon-Tweed wished to do the same, good luck to it. If Lambeth wishes to do it, good luck to Lambeth.

Ten boroughs have petitioned for Clauses 12 and 13. I remind the House that they are Camden, Greenwich, Hammersmith, Haringey, Lambeth, Lewisham, Newham, Southwark, Tower Hamlets and Wandsworth. At the time, nine of the ten were Socialist boroughs. They were telling the Government and the Under-Secretary "The Inner Urban Areas Bill does not give us exactly what we want in this direction; that is why we are asking for this help now." I did not have the privilege of sitting on the Committee, but I understand that those who did sit on it looked at the matter very seriously for a long time and came forward with this recommendation.

Mr. Guy Barnett

Is the hon. Gentleman aware that on Report on the Inner Urban Areas Bill considerable strengthening was given to powers in that Bill? He might perhaps reconsider the situation in the light of what was done then.

8.15 p.m.

Mr. Shelton

Perhaps the hon. Gentleman is aware whether the boroughs have withdrawn their request. I am not aware that they have. My understanding is that they are as anxious as they ever were—certainly that goes for Lambeth—that these powers should be granted in this Bill.

Resources are not in competition with each other here. We are trying to create more jobs. When we look at London we see a picture of decline over the past 15 or 20 years.

The Under-Secretary clearly has great faith in central planning. I understand that in the early 1890s there was a very high-powered meeting to plan the future of London. No doubt the Under-Secretary of the day was there, together with many other very knowledgeable people. One of the matters they discussed was how large London would become in the next decade, two decades, or three decades. London then had about 5 million people. It was unanimously decided that it could never grow to more than about 6 million, because of the problems of stabling the horses and disposing of the manure. I have always thought that that was a very good example of centralised planning.

By 1961 we had 8 million people. In 1976 we had 7 million. In about 15 years we had dropped about 1 million people in London, which must be a matter of great concern to all London Members. I think that we know the reasons. Some must be to do with planning, with office development permits and the problem of the small company, the small industry, finding a difficult inner city environment in which to grow.

It is precisely on this point that the GLC and the ten boroughs are asking for permission to use their own resources in a certain way, not in competition with Berwick-upon-Tweed or other parts of the country, to try to cope with the difficulties they are meeting. That is why I strongly ask the House to reject the amendments.

Mr. Ronald Brown (Hackney, South and Shoreditch)

The hon. Member for Streatham (Mr. Shelton) has made an extraordinary statement. He is making history rather than telling it. It may be useful if we recap.

I moved the Second Reading of the Bill. I was the Member in charge of the Bill. It is customary for the Member in charge to state the case in the House. I am not the Member in charge on this occasion. The Member in charge is the hon. Member for Hampstead (Mr. Finsberg). It is extraordinary that he sits on his behind and makes no intervention to discuss why the promoters of the Bill have changed their mind since we started on 26th April 1977, when I moved Second Reading.

I do not know what the hon. Gentleman's view is or how I can anticipate what he will say. But the reason we are n the state we are in today is that when the change of political control of the GLC took place in May 1977 Mr. Horace Cutler found the hon. Gentleman's arguments extremely powerful, and he decided that Clauses 8, 9, 10 and 11 should be struck from the Bill. From that moment the clauses we are discussing, which the amendments would leave out, were not in the Bill, because the Conservatives decided that London did not want them, that they were unnecessary and stupid things that should be cut out.

I was then asked on behalf of the London Members how we could react. The Tories were in control at County Hall. I suggested to my colleagues in the London boroughs that maybe some of the boroughs should form themselves into a consortium to petition to have these clauses put back, because the Conservatives in London decided that London did not want that. That is what they did. They formed themselves into a group and when they appeared before a Committee of this House they were successful in defeating the Conservatives by having the clauses put back.

The one impediment to the whole exercise was that the petitioners did not represent all of the boroughs. I fondly expected that the Committee, recognising all of the evidence and the fact that only ten petitioners were there, would find ways and means of extending the issue to the whole of the London area. That did not happen. The action was restricted to the 10 designated boroughs. That is why the present clauses are a nonsense—because Hackney and Islington are left out.

Mr. William Shelton

May I ask the hon. Member whether Hackney petitioned to be included.

Mr. Brown

I shall come to that. Let us get facts first. The hon. Gentleman has just argued that these clauses are so important and that the GLC wanted them so much that it took them out. That is the silly part. It did not put them back. That is precisely what the GLC did not do. It opposed the move to put them back into the Bill. The petitioners wanted to put them back. The Tories opposed that. We had better get that clear.

The hon. Member for Streatham asked about my beloved Hackney. I had hoped that Hackney would have joined the other ten. It did not matter whether it was ten or twenty. All that I wanted was the defeat of the Tories in London who were trying to spoil London. They argued that they did not want the powers. I fondly believed that, even if Hackney and Islington thought that there was no reason for them to go ahead, if the petitioners won they would be covered as a result. That is why Hackney did not join the petition—because it thought that it would be covered if the case was won.

The hon. Member for Streatham has told us how much these powers are wanted. We ought to return to the debate of 26th April to see how we looked at the matter then. In introducing the Bill I talked about Clauses 8, 9, 10 and 11. The numbers have changed now but they are still the same clauses. I argued that I believed that London wanted them. The hon. Member for Hampstead was speaking on behalf of the Opposition. It is interesting to note how he described them. He ranged very widely. He called them "Bennery" and a back-door method employed by the National Enterprise Board. He said that in no circumstances would he have them; he would see them passed over his dead body. Some of his quotations are super. As I re-read them I understood why he wants to speak last. Dealing with Clause 8 he said that he thought it: would permit the GLC to undertake extensive direct labour building operations. He went on: These clauses are not good. He went on to explain how the Government ought to control the situation. He told us about the whole problem. He explained that in ten days' time there would be a change at County Hall. Referring to the London boroughs and the GLC, he said: I do not want them to have these powers…I should be happier for this place to retain control over the Secretary of State when he tries to do anything under the National Enterprise Board's powers—at least until it is possible to take control of the London boroughs. That is slightly different from what we are hearing today. He wanted control to remain in this House, as my right hon. Friend is suggesting. He said then that that was the right thing to do because he did not trust local government. The hon. Member for Streatham has said that he hopes that my hon. Friend the Under-Secretary will tell his hon. Friends that he does not trust local Government. The hon. Member for Hampstead has already said that he did not want local government to have these powers because he did not trust local government. In any event, he said: To that extent, it is not right or necessary to have duplication of powers. That was only with regard to Clause 8. The hon. Gentleman was not satisfied. He went on to Clause 9 and described that in pretty scathing terms. He said that it provided power to make loans for the acquisition of land for the provision, extension or improvement of industrial buildings. He said that he thought that that was quite wrong, and he finished by saying: I do not believe there is the need for further powers to be taken by a subsidiary body."—[Official Report, 26th April 1977; Vol. 930, c. 1130–1.] I do not quite understand all of the arguments today. In case it was thought that he was the only convert to the idea that these clauses were totally wrong and ought to be discarded, his hon. Friend the Member for St. Marylebone (Mr. Baker) intervened to ask whether he did not believe that if the clauses remained in the Bill they would be turning Government regional policy on its head. He thought that that was terribly wrong. The hon. Member explained why the clauses could only do harm and would ruin any regional policy. The hon. Member for Hampstead went on to describe Part III of the Bill. He wanted to tear away Salome's veil. When he had gone through it all he then said that he thought the clauses were academic. He said: It is academic, however, in this case"— talking about Part III and these provisions we are discussing now— because the GLC will not be willing to operate such a provision in ten days' time. He was saying that the Tory GLC did not want Clauses 8, 10, 11 and 13, the very ones which the hon. Member for Berwick-upon-Tweed (Mr. Beith) is trying to take out. The hon. Member for Hampstead said that the Tory GLC did not want the clauses and would not operate them. To cap it all he said: We repudiate this type of interventionism."—[Official Report, 26th April 1977; Vol. 930, c. 1126–36.] We have been listening to this nonsense tonight about the desires of the Tory-controlled GLC. It is hocus pocus, There never was any desire on its part. In case there is any doubt, in case anyone in the House or outside thought there was a chance that the hon. Gentleman had got it wrong, at the end of the debate we had to move the closure because the hon. Member was busy trying to talk the Bill out. He even wanted the good parts of the Bill to be destroyed. When we moved the closure—on a Private Bill with no Government Whips operating—my hon. Friends and I had to turn out 190 "Ayes" for the closure. The Conservatives, pretending that there was no Whip, had to turn out 163 "Noes". When we got the closure, there was still some doubt. The London Tories thought that there was some doubt because it was possible that they would be in favour of these clauses and so they divided on the Bill. We had to turn out 192 votes in favour of the Bill—containing these very clauses—with the Conservatives turning out 162 against it. That made it quite clear to this House and to the world at large—and particularly to London—that Mr. Horace Cutler and Conservative Members regarded these provisions as wrong and fundamentally unsound, and were prepared to lose the Bill rather than have them in it. I hope, therefore, that we shall take their advice tonight and ensure that these clauses are left out.

I do not want to rehearse all the arguments. It is not true that the London boroughs said that they found the provisions in the Inner Urban Areas Bill insufficient. I have told the House the reason for the Conservatives' action. It was because Mr. Horace Cutler had taken out the provisions and they wanted them back in again. The boroughs could not have said what is suggested because the Inner Urban Areas Bill was not then in existence.

The London boroughs backed up a position in the hope that if the Government were unable, through parliamentary problems in this House, to get through the provisions of the Inner Urban Areas Bill, the London boroughs would have salvaged at least one issue in the face of complete Conservative opposition. If the Conservatives had their way, Londoners would have been deprived of jobs, and it would have stopped industry from being brought into London.

8.30 p.m.

I hope that with those brief remarks I have brought to the attention of hon. Members the real issue that is involved here, and shown that what we have seen from the Conservatives is a charade. I hope that the amendments will be supported.

Mr. Rhodes James

I do not want to get involved in the more interesting aspects of London politics but, as a member of the Private Bill Committee which considered the Bill, I wish to speak briefly for myself, and not for my colleagues on the Committee, to emphasise to the House the dominant reasons which influenced me in voting for the clauses which are now the subject of the amendments.

The fact was that ten boroughs petitioned for these clauses, and the only opposition to the clauses came from the representatives of the Government. There was no opposition from the GLC. For three days the Committee listened to the evidence given against the ten boroughs and decided in favour of the boroughs' arguments.

Speaking entirely for myself, I thought that the dominant factors in our decision were these. First, there was the argument of need. As that argument developed, there was no question in my mind but that the need existed. The figures speak for themselves. As hon. Members on each side have emphasised, the flood of jobs and opportunities away from inner London represents one of the great tragedies and the great challenges of our time.

Secondly, there was the argument that local authorities, knowing their own particular areas and their own particular problems, were in a far better position than Whitehall or anyone else to give real direct help. They could do it much more effectively than by a general public Act. That is an argument which impressed me very considerably. It was put forward at great length and in detail.

Apart from this, what influenced me very much was an argument which was never fully developed but which lay behind the case put before us. What is the role for local government at all in this country if local authorities are not enabled to use their own resources and their own judgment to assist their own areas? I know that this argument can be carried too far, and I accept some of the points made by the Under-Secretary, but it seemed to me—and I think to all my colleagues—that, faced with this particular crisis in inner London, the local authorities, recognising and knowing their own problems, were only asking for the opportunity to use their own limited resources in the way which they felt would best assist their own businesses—and particularly small businesses, as has been emphasised—in their own areas. These arguments seem to me to be overwhelmingly strong.

I do not wish to over-emphasise the point, but it is unusual for a Private Bill Committee to be overruled by the House on consideration. It has happened several times before but it is still unusual. Private Bill Committees are chosen from hon. Members with no direct personal interest in the area under discussion. For several days they take very detailed evidence. They come to a decision that is based entirely on their judgment, and with no local or national party political basis at all.

I think it would be very regrettable if the House were to overturn the decision of the Committee in this matter. We came to our decision fully recognising the general implications of what we were doing. We also recognised the case for need, the particular problems of the ten boroughs, their desire to try to resolve those problems by their own resources, in their own way and with their own local knowledge. That Committee was in no position to say to those boroughs that they could not do that. The House is in no position to say to those ten boroughs that they cannot do what they think is best with their own resources, their own areas and their own people.

Mr. Ronald Brown

Will the hon. Gentleman confirm that when his Committee was asked to examine that Bill it was a different Bill from that which left this House? Clauses 8, 10 and 11 were obsolete and Clause 9 was being amended.

Mr. Rhodes James

That is correct.

Mr. Brown

Clause 9 was being amended by the Tory GLC.

Mr. Rhodes James

I am not making any party point. I am referring to the situation which faced that Committee, when it had proposals and petitions put before it for clauses moved by the ten boroughs. We took evidence on those matters on the merits as we saw them.

The House would be ill-advised, in spite of what the Minister has said, to overturn the judgment of that Committee that local authorities should resolve local needs and local problems with their own resources.

Mr. Douglas Jay (Battersea, North)

I start with at least one advantage, which is that I did not take any part in the debate in April 1977. We are in Wonderland, as has been said this evening. The Conservative contributors to the debate are in favour of more liberal expenditure by local authorities, the Liberals are in favour of less liberal expenditure, and my hon. Friends are apparently in favour of even less. The one person who does not speak at all is the promoter of the Bill.

As we are thus somewhat in Wonderland, I choose my words carefully. I agree with my hon. Friend the Minister that we must have some sort of coherent and rational policy covering the country as a whole. Having said that, I hope that there is no doubt in the minds of everyone in the House about the seriousness of the inner London employment and dereliction problem.

I have in the past been a strong advocate of steering industrial development to the development areas some distance from London. I have encouraged and assisted firms in my constituency to move from there to Tyneside, to the Swansea Valley and elsewhere, where there was then much greater need of employment. The very success of that policy has to some extent, together with other causes, altered the problem. Unemployment in London in some cases is nearly as high as it is in those areas, and probably even more industrial areas in London have derelict sites. The recent report of the Port of London Authority shows that there may be even worse to come.

I therefore welcome the powers in the Bill, particularly the publicity and advertisement powers for London, on which at least we are all in agreement. I congratulate the Secretary of State on the help which is being given in the Inner Urban Areas Bill, which most of us welcome. I agree with the Minister that it is right to concentrate the help that we are to give in those areas that need it most, whether in London or elsewhere. I congratulate the Secretary of State on including the London Borough of Wandsworth in the list of designated areas—although he took rather a long time to do so. That was a welcome and sensible step.

I hope that my right hon. Friend will realise that great anxiety is still felt among the petitioning boroughs, including Wandsworth, about the present situation. These councils would have liked to see the powers in the Inner Urban Areas Bill and the additional powers in this Bill all made available. They argue—and I agree with them—that these powers are intended to assist small firms in difficulties and not to discourage large firms from going to other areas in the country. That was the argument advanced by the hon. Member for Cambridge (Mr. Rhodes James) and there is great truth in it. There is no point in allowing small firms to collapse in London when, if they are not assisted, they will not move elsewhere but will simply go out of business altogether. There are certainly some such cases.

Mr. Beith

No one would wish that to happen, but surely the right hon. Gentleman must consider the attraction of small firms from other areas, perhaps including some in difficulties, into London. In many ways it is easier for the small firm to move than it is for the large firm.

I know from my own area how, until the Government rightly extended the small firms employment subsidy, there was a tendency for small firms to move to special development areas where the incentives were greater. It was a lot easier for them to do that than it is for large firms to uproot themselves. The right hon. Gentleman must consider the competitive attraction of high rates of assistance for small firms in one area and not in others.

Mr. Jay

All these cases may exist, but I know of few instances of small firms moving from outside London into the inner London area.

I gather from the Minister that the Government feel that the ten petitioning boroughs are asking for too much in wanting still more powers added to those that the Government are offering in the Inner Urban Areas Bill. If that is the Government's attitude, I hope that they will at least realise the genuine anxieties in the minds of some of those responsible for the London boroughs and I hope that the administration of the Inner Urban Areas Bill will be positive and flexible enough to allay some of the fears that exist.

Some London councils feel that in the exercise of the powers under the Inner Urban Areas Bill, too many consents and approvals will have to be obtained before expenditure is sanctioned, that the industrial improvement areas will be too limited and that problems will arise outside them or that the administrative delays may be so long that, in some cases, firms will go out of business before the machinery has been gone through.

I should have liked to see the fullest powers available in both Bills, but if the Government are unable to support that proposal, I hope that they will make the fullest use of the powers that will be enacted in both Bills. The need in London—and I do not believe that I need to convince Ministers on this point—is very great and is likely to grow greater. The Bill may not be perfect, but I hope that we shall enact it, even in a curtailed form.

8.45 p.m.

Mr. Tebbit

I mistrust the role reversals that one encounters in life from time to time so I find myself faintly uneasy to hear the way in which the hon. Member for Hackney, South and Shoreditch (Mr. Brown) enthusiastically quotes slices of the speech of my hon. Friend the Member for Hampstead (Mr. Finsberg). The witty descriptions of the right hon. Member for Battersea, North (Mr. Jay) of those in favour of public expenditure in this context also leave me a little uneasy.

I do not altogether believe the reasons which have been put forward for the role reversals. I do not think that Labour Members have changed their minds because of the Inner Urban Areas Bill. If that were so, I would have thought that their colleagues who sit on the councils of those Labour boroughs which have asked for these powers would also have changed their minds. I am deeply puzzled why the hon. Member for Hackney, South and Shoreditch should have seen this light and should have suddenly understood how right my hon. Friend the Member for Hampstead was—how everything that he said was so correct—yet the councillors, so recently elected to the council in the hon. Gentleman's borough, have not seen the light. I suspect that there is a little more in this than has been admitted.

Mr. Ronald Brown

The hon. Gentleman has not got the story right. I do not agree with his hon. Friend the Member for Hampstead (Mr. Finsberg). What I am saying is that the Government have now brought forward an Inner Urban Areas Bill which transcends what we were trying to achieve, because the hon. Gentleman's political colleague—Mr. Cutler—in County Hall wiped them out. That is a different issue.

Mr. Tebbit

I appreciate that. The point that I make is that it seems that all those Labour councillors who have so recently been elected to the Borough of Hackney after such a strong election campaign, have either not heard about the Inner Urban Areas Bill or do not believe it. It is one thing or the other. It seems to me that the hon. Gentleman and several of his hon. Friends from inner London seats have suddenly seen this light and understood the situation, whereas Labour councillors who have been elected very recently have not.

I suspect that this is a straightforward question of "Ya-boo, the Tories are in at County Hall. Let us knock 'em around a bit." That is what is going on here tonight from the Labour side of the House. But that is not what is happening in the town halls in Hackney and the other London boroughs.

Therefore, I am not very keen about taking too much notice of the arguments of Labour Members about the reasons why, tonight, everyone is supposed to go into the Lobbies opposite to those which they went into last time.

What we are really talking about are the problems of unemployment in London. These are problems which should concern us. There are two or three points that we should consider. There are the problems which arise in London from the national problems of low demand in the economy, the economy running with a pathetic rate of growth, and from a number of pieces of legislation. I shall not argue the point for the moment; I shall merely take my case from that of the Chancellor of the Duchy of Lancaster and say "from a number of pieces of legislation" which are interpreted as being anti-business and, therefore, acting against employment prospects throughout the country.

I do not want to get into a tangle over the question whether they are anti-business or whether they have worsened employment prospects. For the moment I merely agree with the Chancellor of the Duchy that that is the way they have been interpreted and that is the effect they have had. All of us from Land's End to John o' Groat's suffer from those problems. Therefore, I put them on one side for the moment because this Bill does not affect these problems.

We then have another major problem in London, as in other places—the problem of the unsuitability for the work available of many of the people currently on the market and coming on to the market. The obvious need is for retraining in some cases and training in many others. The need, more particularly, is for education. Employers in my part of London complain bitterly to me about the difficulty of obtaining the people whom they need in their works. Earlier today I spoke about the problems of British Rail in my part of London, where there are frequent cancellations of trains because of staff shortages.

I find it difficult to believe that the problems of unemployment are quite as simple as they are sometimes presented to us. I know many employers who say that they could employ more people if only they could get skilled people. All too often employers say that they have advertised for people to do basic clerical work only to find that none of the applicants was in any way literate or numerate to the standard required. Tragically, many of these are school leavers. This Bill will not affect them.

Whatever the progress in education and training—and obviously all of us want to see standards improve in both, whatever differences we may have about the way to go about it—there will be a number of people in London especially who are simply not suited to the types of office and service work which are now beginning to dominate London.

My hon. Friend the Member for Croydon, Central (Mr. Moore) referred to the problem of immigrants in London, especially recent immigrants with a poor command of English. It is almost certain that because of that, if not because of other factors, many young immigrants have a low educational standard when they leave school and, because of it, a poor chance of finding work in the sort of employment which is now, happily, expanding in London. As a consequence, many of them will look for jobs in manufacturing industry.

Here we have the problem that is facing London. It is a problem with which the original Bill sought to deal and which this Bill, as it has been modified, is seeking to grapple more than anything else. We do not need to subsidise office jobs in London. If we need to do anything at all, we need to provide jobs in manufacturing. So we have to ask ourselves whether the Bill's provisions, especially those clauses which at the moment are in dispute, are likely to help resolve the problem that I have described.

The hon. Member for Berwick-upon-Tweed (Mr. Beith) pointed out that it would be ridiculous if we all tried to wear shoes with higher and higher heels in order to be able to look over each other's heads. He said that regional aid had not been notably effective in transferring jobs from London, as the most overcrowded and prosperous part of the so-called overcrowded and prosperous South-East, to the development areas and special development areas. There have been problems in that regard. Most of the jobs which have disappeared from my part of London have tended to go to the new towns rather than to the more distant areas. To that end, the Secretary of State was right, not all that long ago, to check the growth of those new towns around the London area.

I am glad that we have throttled back places such as Milton Keynes. Some of the earlier new towns—for example, Hemel Hempstead—have been outstandingly successful, but the moment has come when we should not go further down that road, and the Secretary of State was right to act as he did.

If, as the hon. Member for Berwick-upon-Tweed said, these incentives are so lack-lustre in their effect that they are failing to drag jobs from overcrowded London to places such as Berwick and the Northern Region generally, we must question whether the relatively modest measures in the Bill would drag them back again or stop them from leaving London. The hon. Member cannot have it both ways. It seems to me that he is questioning the whole basis of discriminatory regional aid throughout the country.

Mr. Max Madden (Sowerby)

Does the hon. Member agree that doing anything of necessity interferes with the free market? As a fierce advocate of the free market, why does he allow the London area to be an exception to his general philosophy?

Mr. Tebbit

The hon. Member should wait and see whether it is to be an exception from my general philosophy. When I consider the reasons why industry and jobs have left London, I find that there are a number of them. The first is a shortage of suitable sites, coupled with planning problems.

I shall give a small and simple case to illustrate this. When I lived in Islington I had the good fortune to find a little old man who was a wrought-iron worker. He employed only two other people. He was working in a rundown part of Islington which has now been redeveloped as a "planner's paradise". Whether people are happy there now I do not know. The next time I went to find my wrought-iron worker, I found that he was gone. He had retired and packed in his business—not because he wanted to, but because he had nowhere to go. The great redevelopment had come, the planners had washed the antiseptic paint over everything, and all was good—not as good as it was in the days when we were building tower blocks, of course, but pretty good, anyway. The poor little old man and his job had been extinguished—he was just one more statistic.

Another factor in driving jobs out of London is the high cost of labour in the capital. Will this Bill reduce it? I do not think so. Site access problems are very severe in London. Will this Bill solve these problems? I do not think so.

Will it solve the problem of high rates in London? I do not think that anyone would suggest that this Bill provides a way of reducing the rates, yet the problem of high rates is one of those which drive small firms—and some big ones—out of London. I have asked myself whether the proposition that firms can be kept going or created by this form of aid holds any water at all. It is the deep-rooted conviction of people like the hon. Member for Hackney, South and Shoreditch that this aid does keep jobs going. But he does not want to see it extended tonight. He has certainly not convinced his local government colleagues, or they would not be asking for the powers in the Bill—

Mr. Ronald Brown

They are not asking for them.

Mr. Tebbit

All right. Perhaps his borough is not, but there are one or two inner London boroughs which are.

I find it very difficult to believe that this sort of aid will deal with the problems. Our problems are different from those which can be dealt with purely by subsidies. Force feeding industry in London, even to this extent, will prompt other parts of the country to do the same. I do not think that that will be good for London, for the London ratepayers or for ratepayers in other parts of the country.

I am not naturally a centralist in government terms, but if overall aids and incentives are to be offered to industry, it is better for someone, whose vision is not blinded by the trees, to see the whole wood.

Mr. Ogden

If that is so, perhaps the hon. Gentleman will tell us why the House of Commons has discussed devolution to Scotland and Wales over the past six months.

9.0 p.m.

Mr. Tebbit

I cannot imagine any good reason for the House debating those matters. As an exercise in occupational therapy to keep us out of mischief when we might have been doing something worse, that may be acceptable. I do not object unduly to that approach, provided that we do not enact the ridiculous Bills at the end of the day. I am entirely with the hon. Member for Liverpool, West Derby (Mr. Ogden) on that score. I shall not go into the question whether he is with his Front Bench.

I fancy that we could find ourselves bringing disadvantage to many parts of the country. I understand from my friends in business that there is no shortage of cash to back viable firms with viable products that have sales and all the other elements that are needed to be in business other than the literal cash. Interest rates are too high and they are increasing, but it is a bit much to expect the poor old London boroughs, or the GLC, to counter-balance the Government's economic policies. In general I should prefer to get local authorities back to undertaking the activities for which they were established. Some of those activities are extremely important in helping industry.

I do not want to be dogmatic. I am not against the appointment of industrial liaison officers, for example, to find industry that might like to go to the boroughs, to try to make arrangements that are suitable for it, and to help in many ways. For example, in my borough we desperately need a road to go from a derelict and disused marshalling yard to connect with the M11. The road would help to provide jobs and bring industry back into London. That is a proper activity for the local authority, because nobody else can do it. Money can be borrowed from the bank, but we cannot go to the bank to get it to build a road. Let the local authorities do the things for which they were established and which only they can undertake.

The selective use of aid for some firms and not others, which would be inevitable under the Bill, is not something that we should lightly encourage. I agree with other London Members that London is special. It is absurd for others to want in some way to pull London down. We cannot make the rest of the country richer by making London poorer. We do not want to move in that direction. London has suffered badly in recent years because of the efforts of some to make it poorer so as to make the rest of the country richer. That does not work.

There are other special things in London. There is derelict dockland. That dockland is not derelict for the lack of the powers that are in the Bill. We should deal first with that sort of problem. If we find that by dealing with those problems—in other words, getting local government to understand the needs of industry—we have not worked the trick we may again consider whether local government should go into competition with the NEB, which is the basic proposition behind the clauses.

Mr. Fred Evans

First, it has become clear that I was a Member of the Committee on Opposed Private Bills that examined this issue. Secondly, I come from an assisted area with a large element of unemployment and a travel-to-work area that at one time not so long ago achieved the distinction of being the area of highest unemployment in the whole of England and Wales.

The last thing that I want to do is further to aggravate the chronic situation that has continued for many years in my own area. However, when I receive letters from my local authority asking me to oppose the Bill I can trace the moves back. It would be the Welsh Development Corporation that suddenly saw some great threat in the Bill.

Frankly, I find it faintly ridiculous when I listen to evidence that, say, Walthamstow, where 80 per cent. of companies employ fewer than 25 people and large elements of that percentage employ only two, three or four people, will pose a great threat to the status of my area which is an assisted area. I find that quite comic. But that is the bogy that has been built up in the Press and other mass media.

I do not want to enter into the polemics which have gone on between my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown) and others because, like all good Welshmen, I am particularly free from polemics. It was absurd of the hon. Member for Berwick-upon-Tweed (Mr. Beith) to talk about these small firms—almost backstreet industries—being attracted from Berwick-upon-Tweed to this great metropolis. When I hear such things, I honestly smile with compassion.

Mr. Robert Hughes

I accept that there is little likelihood of people coming from Berwick-upon-Tweed or from Aberdeen to London. But if the powers in the Bill were sought and achieved by other areas further north of London, because they will all argue precedence, would not the possibility of industries in those small areas moving closer to London become a very serious threat to the assisted areas?

Mr. Evans

I should not think so. I hope that the proving of something in the Greater London area will lead other areas to emulate and to ask for such powers.

Despite the existence of the Welsh Development Agency and the Scottish Development Agency, I still believe that local government means what it says—the command of as great a totality of its forces as it can get for the people being governed by that institution. That is the very soul of democracy. It is what this place ought to exist for. It is certainly what we ought to make local government try to exist for.

The fact that I come from an assisted area means, I hope, that I well understand, when I look at cold statistics and see X percentage of unemployed, that for any man unemployed that is to him 100 per cent. unemployment. I was born in South Wales and lived through the tragic mining period of the 1920s and 1930s. I have seen the further sufferings inflicted today. Therefore, I feel the necessary compassion to want to do something about it. I want to do the best possible for London as well as for my own part of the country. Although my part of the country has its own special niche in my heart, the problem is essentially the same.

I assure the House that Members serving on the Committee on Opposed Private Bills do not idly dream away the moments. At least, they do not seem to do that when I am there. I may be unlucky in escaping the sleeping sessions. The Committee was hard working. It spent over three days examining the problem in depth for about six hours a day. It heard expert barristers on all sides. It cross-questioned witnesses and learned counsel. It arrived at a decision. I believe that the decision was sincerely arrived at and that it was strongly based on opinions.

I spoke a moment ago about the futility of dealing with obstruction such as percentages of unemployment. Yet there is an equal danger in the other direction. We talk loosely about unemployment and we do not relate it to what it means in human terms. Somewhere between those attitudes is right. Hon. Members might be fully conversant with those facts but they should go on record.

I shall try to paint the picture of what is happening in London. London is a special case. Its special case is endemic in its size and will probably increase as its population increases. About 7 million people live in London. That population is larger than eight European nations, three of which are members of the EEC and which carry out their full range of functions as members of the EEC.

The rate of unemployment in the Greater London area surpasses the rate of unemployment in such a severely hit country as Scotland. Inner London has 83,000 unemployed. A little over one-ninth of the total unemployed in the British Isles are in the London area. When one considers those facts one can see that London has a special problem and that there is a need for special approaches.

Many of the aspects at which we have looked have been nitty gritty compared with figures of that kind. It is absurd to expect people to carry out local democracy, to apply the Inner Urban Areas Bill when social rehabilitation rests so much with them and then say that we shall not give them the right to attract resources by their own initiatives.

If the evidence that I heard is correct, London does not want to attract large-scale industry such as the Surrey Docks but the small industry employing perhaps only half a dozen people which, when it perishes—as was pointed out in the case of the hand wrought-iron manufacturer—does not flee to the assisted areas. Such firms are totally wiped out with a total loss of employment opportunity to everybody, in the assisted areas and in London. The jobs disappear and there are no opportunities for further jobs to be created. This cumulative problem continues.

9.15 p.m.

Between 1961 and 1976 the number of people in London fell by 12 per cent. from 4.3 million to 3.8 million. Yet in the South-East as a whole that trend was reversed. In that region the number rose by 30 per cent. In the whole of England and Wales, even including the assisted areas, the number went up by 5 per cent. London was therefore being continually drained, and that trend was assisted by the myth of London's wealth.

Every capital city has its big spenders and its high earners. But traditionally every great city has its squalid side of life, and London is no exception. The squalor however tends to be lost in the garish show of ostentatious wealth. But what is happening now in London? At one time London could afford to have its jobs creamed off without feeling unduly perturbed. But now the trend means that London is beoming increasingly derelict both in employment and social terms. The economic climate is limiting job opportunities. However, the image of wealthy London persists and therefore no one hesitates to drag industry out of London, increasing the severity of the blow felt by the capital every time that happens.

This is the background against which we conduct our debate tonight. The loss of office jobs was greater in London during the period I have mentioned than it was not only in the rest of the South-East but in England and Wales as a whole.

London cannot continue to sustain such blows and survive. It is a matter of prime national importance that London, with its great history, should survive. We must have a place of fascination for the tourists and a home for the historian and the musician. All the multifarious aspects of London life must be sustained, and efforts must be made to secure that.

I do not understand how London can be regarded as the magnet of the South-East. The greatest fall in employment was in manufacturing industries where the number dropped from 1,430,000 to 827,000 by 1976. When people call into doubt the efficacy of regional policy, as they do, particularly in my area, they are in effect saying that they could do the job better on their own. They take that view because the response of government tal institutions to the organic changes in our society is often too slow.

In the London area the organic changes that have taken place are only just beginning to be caught up with by the provisions of the Inner Urban Areas Bill. The ten boroughs to which I have referred and which live day to day with these problems do not see the present provisions as being as expeditious or as efficacious as they should be. That came out strongly from the evidence we heard.

If one examines the record of manufacturing industry and other industries in London, one sees that 500,000 jobs have been lost. That puts the matter in a nutshell. Some of the rundown manufacturing industry is cyclical, but the major part of that rundown has resulted from the long-term migration of firms that have left London and from the shrinkage and eventual closure of the small firms that operate in London. That is one aspect that was stressed by the ten boroughs. They do not want to compete with other assisted areas. They require the ability to say "We are willing to help, and we have the power to help these small industries of up to 20 people." The criterion for the small firm was dropped to a figure of under 100. There is little incentive for someone employing under 100 people to emigrate to an assisted area.

I have been involved in this exercise. The assisted area in which I live was so badly in need of jobs that we actively encouraged the firms that wanted to expand a little to undertake this kind of exercise. I do not think that there are many of them. I should like to be given the percentages of these movements so that I can judge whether many small firms have moved into London. I believe that it is a surprisingly small number.

The introduction of regional policies to cream off some of the London benefits is a very different situation. There are many people who now question the way in which regional policy is succeeding in dealing with the situation. In my part of South Wales this has been very much the case for a couple of years. There has been some activity in the buoyant areas which has generated some kind of growth. But the national population has become roughly stable. The national economy is not as buoyant as it was. Therefore, there is not the investment or the urge to try anything just in case it may not come off. These things are still very much of a gamble. If population and jobs are being drawn out of London, that will be at the expense of the London economy.

Let me deal with the question of the inner cities—the areas where the effects have been felt so tragically in human terms inside the family and in many social relationships. This again was shown by the evidence we heard from the ten boroughs. Therefore, on top of the severe social problems, local authorities have to contend with another factor. They have to contend with the fact that the decline in employment tends to be greater, both in numbers and proportionately.

The male resident unemployment in London, especially in these ten boroughs, increasingly outstrips the national rate for male unemployment. The rise in the figures reflects the situation. In October 1973, the unempolyment rate was 2.4 per cent., and in January 1978, it was 7.8 per cent. There were 2,400 men out of work in Poplar alone.

Mr. Ronald Brown

My hon. Friend is doing a remarkably interesting job for the House in drawing attention to the London problem, but I draw his attention to the fact that if we do not get this Bill completed by 10 o'clock we shall have no Bill at all. We understand the point that he making so powerfully, but we are anxious to complete the Bill.

Mr. Evans

I shall not deal separately with the problems of the ten boroughs, except to say that they see this Bill as an answer to many of their problems. The Committee became convinced of the truth of the argument and accepted it. It made the necessary amendments, with the results that we have before us. I hope that party feelings will not enter too strongly into this issue and that we shall look at the problem as a human one.

Because I have personal as well as political experience of the kindliness of my right hon. Friend the Secretary of State for the Environment, I yield to no one in my regard for him, but I also know that Governments find it difficult to accept that they have been defeated and that they will do almost anything to undo a defeat. The evidence of the Ministries to the Committee, on which I served, was shot to pieces. Therefore, the House should not lightly dismiss a sustained piece of work by a body of people who have gone into this matter very deeply and heard all the evidence. It should think very clearly before it negates the whole of the exercise.

Mr. Finsberg

Clearly, the Bill is three-headed. It has clauses that affect the boroughs, clauses that affect the boroughs and the GLC, and clauses that affect only the GLC. This group of amendments is not a simple one because it covers two of those groups. There has been a great deal of fun in looking at speeches made in April 1977, and the hon. Member for Berwick-upon-Tweed (Mr. Beith) was entitled to have his fun. But perhaps his speech showed why there are no Liberals on the GLC or sitting for London parliamentary seats.

The right hon. Member for Bermondsey (Mr. Mellish) said that he was satisfied with the Inner Urban Areas Bill. Not many people are. The London borough of Camden is not. It is also clear that the arms of many London Members on the Government Benches have been twisted by the Government not to support these clauses.

But the facts are clear. The Inner London Consultative Employment Group, in a letter dated 22nd May and signed by Councillor Kotz, of Hackney, still wants all these powers. The group makes it clear that it wants the clauses kept in because it does not accept the view, put by the Government and others, that the clauses seek to give sweeping powers to give incentives to incoming industries which would otherwise go to the assisted areas. Nor does it believe that it should seek special powers for one local authority when it would be more appropriate for such legislation to be general.

The group asks the House to ignore these arguments for a variety of reasons. The letter was signed by Councillor Kotz, who speaks on behalf of the TUC as well as the London borough of Hackney.

9.30 p.m.

The Secretary of State had plenty of time when he could have taken action on the Surrey Docks, for example. When this Bill first came in, the Inner Urban Areas Bill was not even a whispy promise. We knew nothing about it. That is why it was right that this Bill should have been introduced then.

Not many people in London can join in the paeans of praise that the right hon. Member for Bermondsey uttered in respect of the Secretary of State. If he thinks that the Secretary of State has done an enormous amount, not many other people do.

The essential difference between this Bill and the Inner Urban Areas Bill is that the latter believes that Whitehall knows best and this Bill believes that the matter is "better left to the boroughs". That is a quotation one has heard more than once.

I hope that it will also be remembered if the clauses are struck out that it was a Lib-Lab pact that caused even more jobs to be lost in London. I do not think that that would be very popular, certainly with the TUC in London.

It is nonsense. What the opposition to these clauses is saying is that it has a dog-in-the-manger attitude. London is losing jobs. Most of them will not go to Yorkshire, Humberside, Scotland or Merseyside. All that is happening is that there is an attempt to remove from the Bill a chance of helping an area. That will not help anyone else. Therefore, it is being monstrously unfair to London to try to do this.

The hon. Member for Aberdeen, North (Mr. Hughes) put forward a theory. He said that if the Bill went through it would encourage authorities in Scotland to introduce other Bills at a later date with even high incentives. That may be true, but not many firms will move businesses offering fewer than 100 jobs from London to Aberdeen. So that is a non-starter.

My hon. Friend the Member for Croydon, Central (Mr. Moore) made it perfectly clear that there was monstrously high unemployment in London—167,000. This is a threat to the entire fabric of the capital city. It exacerbates all the existing social problems—crime, racial tension and urban decay. The Inner Urban Areas Bill does not do enough to remedy those defects. It is wrong that these clauses should be opposed just because they are not available in the generality.

My hon. Friend the Member for Streatham (Mr. Shelton) rightly turned our minds to the other side of the equation, which had not been mentioned until then, that one needs not only to retain jobs but to create even more. He made the point that the cake needed enlarging. We do not want more people biting at the same-sized cake. We want a large cake for more people to share. That is the purpose of the clauses under discussion. The Government's philosophy on this matter is the philosophy of despair—because not everyone can have it, no one can.

The hon. Member for Hackney, South and Shoreditch (Mr. Brown), as so often, added many words and much noise but little weight to the debate. He was certainly very short on facts. Three times he accused Horace Cutler of withdrawing certain clauses that the London boroughs wanted. I should like to read from a letter dated 25th July 1977 from the London Boroughs Association, under Labour control, addressed to Mr. Fitzpatrick, the GLC's solicitor and parliamentary officer, because the GLC Bill has to be the vehicle for the London borough clauses. The letter said: Thank you for your letter dated 12th July enclosing a copy of a letter you had written to Mr. Hooper about the assistance to industry clauses of the GLC (General Powers) Bill. I now write formally on behalf of the Association withdrawing the reference to London Borough Councils in clauses 8, 10 and 11"— that was the Bill before it was amended— which has the effect of removing those clauses from the Bill, and agreeing to the retention of Clauses 9 and 14 subject to the addition of the stipulations required by the Department of the Environment. One of the reasons why I did not speak earlier was that I wanted to allow the hon. Member for Hackney, South and Shoreditch to dig the elephant pit into which he has twice fallen. He told us that the GLC withdrew those clauses. That is not a fact, and it is proved not to be a fact by the letter from the London Boroughs Association. I shall not waste time on the rest of the hon. Member's arguments because they all seemed to build up on that point.

The clauses now before the House are different in concept and intent from those originally produced. Some of them include the wording which the Government suggested—the cut-off date, for example. It is also untrue to say that the clauses are identical. We had a lot of light thrown on this by the hon. Members who sat on the Opposed Bills Committee. I am grateful to them for the detailed scrutiny they gave to the Bill. They did not make the mistake of misquoting; they gave us the facts. I prefer to accept their factual version to anything that I have heard from Labour Members. I believe that any impartial observer would do the same.

The right hon. Member for Battersea, North (Mr. Jay) rightly said that he took no part in the April 1977 debate. He voted on that occasion. During the Report stage of the Inner Urban Areas Bill he pressed for the inclusion of Wandsworth in the list of places. As I pointed out to him then, the inclusion of Wandsworth meant that a cake of the same size would have more people biting at it, so that everyone would have a bit less. The right hon. Gentleman recognised that then and it is necessary for him to recognise it again.

Although the Minister did not use the words, the implication throughout his speech was that Whitehall knows best, that it knows better than the local authorities. This was exactly what he said, as Hansard will show. That was the intent of his speech. It is not an identical quotation. It was the gravamen of what he said. It was pointed out over and over again that this was in sharp contradiction to everything said in the White Paper and the statements made by the Secretary of State about the inner urban areas programme. It is a pity that my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen) is not present, because we now see those marvellous words translated into weasel words which Ministers are using when delivering the goods.

The issues in this debate and in this Bill are those of attracting and retaining jobs. Yet it was in Committee that eventually the Minister was forced to accept retention of jobs qualifying for help. He did not want to do so. He did not think that it was a good thing.

Mr. Guy Barnett

indicated dissent.

Mr. Finsberg

If I am wrong I shall gladly apologise. My recollection of the weary hours spent on that Committee was that the amendment originally tabled by the hon. Member for Putney (Mr. Jenkins) had to be moved by one of my hon. Friends, and the Minister was not happy and advised the Committee to reject it. I will check the facts.

What the Minister has done is to reiterate the Government's opposition to these clauses and to some aspects of the Bill. The Government tried to do the same on the Opposed Bill Committee and lost. Tonight they are seeking to shelter behind, in some cases, men of straw. This Bill was blocked for a long time by someone who has not even tried to participate in our proceedings tonight. We wondered, when we saw the name, whether it was a man of straw. The fact is that the Bill was blocked.

I believe that the person who has most made the case for the Bill tonight in its present form is the hon. Member for Hackney, South and Shoreditch, who so misquoted and so misled the House. He sought to give the impression that he knew what he was talking about, but when the words of the London Boroughs Association are quoted he stands condemned. I believe that we ought to let these clauses go through.

Mr. Ogden

I am aware of the pressure of time and the usual convention that hon. Members from outside the area of a County Council Bill do not usually intervene unless the effects of the Bill are wider than the geographical area of the Bill itself. At 7 p.m. I believed that the internal politics of Liverpool were the most complicated in the United Kingdom. After hearing tonight's history of London government, and of the role reversal disclosures of the hon. Member for Chingford (Mr. Tebbit), and various other matters, I have come to the conclusion that in comparison with London's party politics, we are pure and crystal clear in the North-West, and thank God for it.

The debate has produced common anxieties, and anxiety makes strange companions. There has been talk of Alice in Wonderland and of role reversal. Those who previously supported, now oppose. Those who previously opposed, now support.

I am guilty of the charge of consistency. I voted in favour of the closure on 27th April 1977. I voted for these clauses, or something very close to them, on Second Reading. If there is to be a vote—I hope that there will not be— I shall support them again tonight. I shall do so not simply because of the virtue of the clauses, although those clauses and the needs of London have been made abundantly clear to me over many years, but mainly because I have the good fortune to share an office here with my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown). This makes for an interesting and lively life, and the needs of London are constantly being pressed on me by my hon. Friend. So, tonight, Liverpool stayed to support London. My hon. Friend now says that in the meantime, between 27th April 1977 and today, the Inner Urban Areas Bill has come along, and that this makes all the difference. That might be so for London, but I do not think it applies to Merseyside.

This is a pathfinder Bill. There are other county council Bills with similar clauses. This Bill contains a mere 17. The Merseyside County Council Bill, making progress through the other place, has 165 clauses. Some clauses of that Bill are almost exactly the same as these clauses. We know the help we have from this Government. We ask again and again for more. I have heard my hon. Friends from Liverpool, from Merseyside, from the North-West and the North-East saying that we need more aid, more help, from Government, either nationally or regionally. What we say is "Help us to help ourselves." I do not much care where the help comes from, whether it is from the National Enterprise Board, or the CBI, the Government, Sir Arnold Weinstock, or anyone else. I am told by independent people, as well as by politicians, on Merseyside that these clauses would provide one way of enabling us to reduce unemployment.

The Government and the Minister have not been saying that their way is best. The Minister has said that he wants an orderly priority, assessment of where the help ought to go. He believes that his way is right, but there are other ways of giving assistance—complementary ways, particularly for the service industries.

If the clauses fall tonight, I hope that no one will take this as a precedent for saying that similar clauses should not be included in any other Bill for any other area. I hope also that my hon. Friends who oppose the powers for London will not automatically oppose similar powers when they are put forward for Merseyside. I hope that if the Government cannot accept such means for Merseyside they will have alternative proposals when the Merseyside County Council Bill comes along.

Mr. Loyden

Is my hon. Friend aware that the main problem in Merseyside is in Liverpool, and that it would not help the inner area programme to transfer any responsibilities overall to the Merseyside County Council? The identifiable problem in Liverpool should be the responsibility of the Liverpool district councils and not the Merseyside County Council.

Mr. Ogden

As I have been here arguing for more help for Liverpool 10 years longer than my hon. Friend, perhaps he will accept that there is no reason why those powers should not be operated by the Liverpool District Council, independently or as agents of the county council. My hon. Friend has often called for more help for Merseyside. This way is one way of getting at least a little more than we have, and of helping Merseyside to help itself.

9.45 p.m.

Mr. Beith

I wish to proceed to a Division on this matter because I hope that we can press the case that has been put forward so far. I wish to underline particularly the fact that the question is whether we encourage an unhealthy competition between areas which may have more resources to engage in it and those which have not, and disrupt the whole of regional policy in the process. The House would be unwise to launch upon that course.

Question put, That the amendment be made:—

The House divided: Ayes 87, Noes 58.

Division No. 226]	AYES	[9.45 p.m.
Armstrong, Ernest	Boardman, H.	Callaghan, Jim (Mlddleton & P)
Barnett, Guy (Greenwich)	Booth, Rt Hon Albert	Cocks, Rt Hon Michael (Bristol S)
Barnett, Rt Hon Joel (Heywood)	Bottomley, Rt Hon Arthur	Coleman, Donald
Bates, Alf	Brown, Ronald (Hackney S)	Cook, Robin F. (Edin C)
Bennett, Andrew (Stockport N)	Buchan, Norman	Cowans, Harry
Blenkinsop, Arthur	Butler, Mrs Joyce (Wood Green)	Cox, Thomas (Tooting)
Crowther, Stan (Rotherham)	Janner, Greville	Rees, Rt Hon Merlyn (Leeds S)
Cryer, Bob	Jones, Alec (Rhondda)	Richardson, Miss Jo
Davies, Rt Hon Denzil	Kerr, Russell	Ross, Stephen (Isle of Wight)
Dewar, Donald	Lamborn, Harry	Sandelson, Neville
Dormand, J. D.	Lamond, James	Sever, John
Douglas-Mann, Bruce	McDonald, Dr Oonagh	Sheldon, Rt Hon Robert
Duffy, A. E. P.	McGuire, Michael (Ince)	Shore, Rt Hon Peter
Dunnett, Jack	Madden, Max	Silkin, Rt Hon John (Deptford)
Eadie, Alex	Marks, Kenneth	Skinner, Dennis
Ellis, John (Brigg & Scun)	Marshall, Dr Edmund (Goole)	Spearing, Nigel
Ewing, Harry (Stirling)	Marshall, Jim (Leicester S)	Tinn, James
Fitt, Gerard (Belfast W)	Maynard, Miss Joan	Urwin, T. W.
Foot, Rt Hon Michael	Mellish, Rt Hon Robert	Wainwright, Edwin (Dearne V)
Forrester, John	Mikardo, Ian	Wainwright, Richard (Colne V)
Freeson, Rt Hon Reginald	Millan, Rt Hon Bruce	Walker, Terry (Kingswood)
Graham, Ted	Mitchell, Austin (Grimsby)	Watkins, David
Grant, George (Morpeth)	Morgan, Geraint	Whitlock, William
Grocott, Bruce	Newens, Stanley	Willey, Rt Hon Frederick
Harper, Joseph	Noble, Mike	Woodall, Alec
Harrison, Rt Hon Walter	O'Halloran, Michael
Hooley, Frank	Palmer, Arthur	TELLERS FOR THE AYES:
Hooson, Emlyn	Pardoe, John	Mr. A. J. Beith and
Howells, Geraint (Cardigan)	Parker, John	Mr. Eddie Loyden.
Hughes, Robert (Aberdeen N)	Pendry, Tom
Irving, Rt Hon S. (Dartford)	Radice, Giles
NOES
Atkins, Rt Hon H. (Spelthorne)	Jay, Rt Hon Douglas	Rifkind, Malcolm
Bendall, Vivian	Jenkin, Rt Hon P. (Wanst'd & W'df'd)	Rossi, Hugh (Hornsey)
Bennett, Sir Frederic (Torbay)	Jessel, Toby	Scott, Nicholas
Berry, Hon Anthony	Latham, Arthur (Paddington)	Shersby, Michael
Bottomley, Peter	Lawson, Nigel	Sims, Roger
Bowden, A. (Brighton, Kemptown)	Lester, Jim (Beeston)	Stanbrook, Ivor
Boyson, Dr Rhodes (Brent)	Loveridge, John	Steen, Anthony (Wavertree)
Clark, Alan (Plymouth, Sutton)	Macfarlane, Neil	Stewart, Rt Hon M. (Fulham)
Clark, William (Croydon S)	Mawby, Ray	Stradling, Thomas, J.
Davies, Bryan (Enfield N)	Moore, John (Croydon C)	Townsend, Cyril D.
Evans, Fred (Caerphilly)	Nelson, Anthony	Vaughan, Dr Gerard
Fairgrieve, Russell	Neubert, Michael	Wakeham, John
Finsberg, Geoffrey	Newton, Tony	Weatherill, Bernard
Fisher, Sir Nigel	Ogden, Eric	Whitney, Raymond (Wycombe)
Forman, Nigel	Page, John (Harrow West)	Young, Sir G. (Ealing, Acton)
Fraser, John (Lambeth, N'w'd)	Prentice, Rt Hon Reg	Younger, Hon George
Goodhart, Philip	Raison, Timothy
Gow, Ian (Eastbourne)	Rees, Peter (Dover & Deal)	TELLERS FOR THE NOES:
Grant, Anthony (Harrow C)	Renton, Tim (Mid-Sussex)	Mr. John Hunt and
Havers, Sir Michael	Rhodes, James R.	Mr. William Shelton.
Hayhoe, Barney	Rhys Williams, Sir Brandon

Question accordingly agreed to.