HC Deb 07 March 1979 vol 963 cc1229-30
3. Mr. Andrew MacKay

asked the Secretary of State for the Environment if, to facilitate the building of new factories and the creation of new jobs, he will reconsider his decision not to allow local authorities to sell land freehold under the Community Land Act.

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

No, Sir. The freehold interest should normally remain with the local authority. I have no evidence that this is a significant factor inhibiting industrial or commercial development.

Mr. MacKay

Is the Minister aware that certain large companies, particularly multinationals, will not buy factory sites unless they are freehold? Does he agree that it is disturbing when that means that jobs go to other countries in Europe? Would it not be sensible to sell these factory sites freehold where necessary and forget about political bigotry?

Mr. Barnett

I am not aware of that. Some firms prefer the freehold, often for precisely the reasons why we believe it should remain in community ownership. Leasehold land has been customary in new towns and in many local authority areas, and it has never caused difficulty.

Mr. Litterick

Does my hon. Friend agree that the level of ground rents and the sale value of land are significant factors in determining whether industrial and commercial premises are located in urban areas, or anywhere else? Since, under the Inner Urban Areas Act, large quantities of money are being poured into the urban areas, may we have an undertaking that the Department of the Environment will monitor the level of land prices and ground rents in the inner urban areas?

Mr. Barnett

That strays a little far from the original question. This matter is under review. My hon. Friend is right to point out that a whole range of factors will determine decisions taken by industrialists when locating their firms.

Mr. Heseltine

Will the Minister consult the Secretary of State on this issue? I have had to intervene twice to secure the Secretary of State's permission for the sale of freehold, as opposed to leasehold, land. Do the Government understand that one reason why the Community Land Act has failed so signally and so little land has been resold is that industrialists wish to buy freehold and not leasehold land? Does he recognise that this is just one more irritant that is frustrating industrial development?

Mr. Barnett

The hon. Member is wrong. The evidence does not bear out what he has said. Many firms prefer the freehold for the same reasons that local authorities wish to keep it. There is hardly any evidence to suggest that what the hon. Member says is true. Indeed, the evidence of the new towns, stretching back many years, proves the opposite to be the truth.