§ As reported (from ths Standing Comminee), considered.
§ Bill reported, without amendment.11.22 am
§ The Minister for Housing and Construction (Mr. John Stanley)
I beg to move, That the Bill be read the Third time.
§ Mr. Stanley Newens (Harlow)
On a point of order. Mr. Deputy Speaker. Would you make it clear from the beginning that, since this measure did not have a normal Second Reading, those who participate in the debate will have an opportunity to bring in the wider aspects of new town policy which it has been customary to discuss on Bills of this kind?
§ Mr. Deputy Speaker (Mr. Richard Crawshaw)
This is the Third Reading. The House can consider only what is in the Bill.
§ Mr. Newens
Further to that point of order, Mr. Deputy Speaker. I accept that entirely. However, I repeat that the Bill did not have a normal Second Reading. In the past, when discussing Bills of this kind on Second Reading, it has been customary to debate general new town matters. In the circumstances, I am anxious to have some assurance that we shall be able to discuss these matters in the way that was intended when this legislation was first introduced.
§ Mr. Deputy Speaker
The fact that there was no discussion on Second Reading does not alter the fact that this is a Third Reading debate. However, I am sure that the Chair will not be unduly restrictive.
§ Mr. Guy Barnett (Greenwich)
Further to that point of order, Mr. Deputy Speaker. It may be within your recollection that the last occasion on which a Bill of this nature was considered was in February 1977, when there were wide-ranging debates about new towns on Second Reading and on Third Reading. Having received the assurance from the Chair that we have, I am sure that the House will be allowed, as it was in 1977, to debate the issues of new towns fairly broadly in 1865 the light of the fact that this is a money Bill.
§ Mr. Stanley
I begin by welcoming the hon. Member for Edmonton (Mr. Graham) on his appointment to the Opposition Front Bench as a member of the environment team. We look forward to the contributions that he will make.
On new towns, it may be that there will be a greater measure of agreement than there has been on some of the other environment topics that we have debated in the recent past. Those hon. Members who served on the Standing Committee which considered this provision as clause 106 of the Local Government, Planning and Land (No. 2) Bill will already know why it was necessary, as it was debated to some extent in Committee upstairs. I should like, however, to outline briefly for the benefit of the rest of the House the reasons for the Bill.
New town development is largely financed by 60-year loans from the national loans fund. Like all bodies financed in this way, the new towns are subject to statutory limits on the amount of borrowing that may be outstanding at any one time. This limit has periodically been increased, most recently by the New Towns Act 1977 and a subsequent order of 1979. The present limit for all new towns is £3,250 million. I expect this to be reached on 14 September, when interest payments of £150 million to the national loans fund are due.
Without the increase in the borrowing limit by then, the new towns would be unable to raise the money needed to make the payment of £150 million due, and their development programmes would consequently be brought to a halt. The Bill provides for the borrowing limit to be increased to £3,625 million and subsequently to any sum up to £4,000 million that my right hon. Friend the Secretary of State may specify by order—subject to the affirmative resolution procedure. The length of time that the proposed increase in the borrowing limit of £750 million will last is difficult to estimate with precision, but it should suffice at least until the end of 1983.
The new borrowing will cover major expenditure on the four main areas of new town development: housing, roads, sewerage and other local expenditure. 1866 The latter covers industrial and commercial development, parks and items such as community centres. The specific items of expenditure will be a matter for decision by individual corporations, subject to the normal approval procedure by the Secretary of State. To take some examples, the new borrowing will enable the town centres at Basildon and Redditch to be completed. It will also fund some or all of the second phase of the shopping centre at Telford, the completion of the road system at Bracknell, the Riverside Parkway at Peterborough, Cwmbran Drive to open up the new industrial area at Cwmbran, and the Cumbernauld spine road. These are only a very few illustrations but I think they are sufficient to show how important it is for the new towns that the borrowing limit should be raised.
I know there is particular interest in the House about the relationship of the Bill to both housing and industry in the new towns, and I should like to say a word about both. Our central housing policy in the new towns is to bring about a substantial increase in home ownership. In our view, there has in the past been far too much emphasis on the provision of rented housing in relation to the provision of housing for sale.
Apart from the new towns such as Northampton and Central Lancashire being developed alongside established communities, the figures show that the levels of owner-occupation are way below the national average of 54 per cent.
During the last Conservative Government, vigorous steps were taken to promote home ownership in the new towns. The general consent that we issued in October 1970 enabled corporation dwellings to be offered at discounts of 20 per cent. That was followed by a massive increase in sales. Some 27,000 dwellings were sold between 1970 and 1974, when, regrettably, the incoming Labour Government halted sales completely. During the last Administration the imbalance was worsened again when for every seven houses built for rent only two were built for sale.
Up to 31 March this year the proportion of owner-occupied housing built on land passing through the hands of new town corporations nowhere exceeded 50 per cent. of the total housing provided. In many cases it has fallen far short. Of the 1867 second and third generation towns, Red-ditch has provided the highest proportion of owner-occupied housing and there it has been only just over 40 per cent. In Central Lancashire it has been 35 per cent., in Washington and Warrington 31 per cent., in Milton Keynes, Northampton and Peterborough 27 per cent., in Runcorn 22 per cent. and in Telford and Skel-mersdale it has been below 20 per cent.
There is a substantial unsatisfied demand for home ownership in the new towns and we consider it of fundamental importance to try to meet this demand. Within 14 days of taking office in May of last year, we issued a new general consent to enable new town tenants to buy their homes on the terms set out in our election manifesto. The response has shown the measure of support for our right-to-buy policy. During our first 12 months, some 8,000 new town tenants have either bought their homes or are firmly negotiating to do so. That represents about 9 per cent. of all new town tenants—or one in every 11 new town homes.
In Northampton, the proportion who have either bought or are under firm negotiation to buy is now 12 per cent. in Telford 13 per cent. and in Basildon no less than 18 per cent. Equally significant is the number of inquiries about the possibility of buying. There have been a total of 22,500 inquiries, representing a quarter of all new town tenants. Clearly, many still would like to buy, but are unable to do so at present. Here, the Housing Bill will provide them with a new opportunity to do so. Under the Bill they will have the opportunity of a two-year fixed price option if they cannot buy outright immediately. If they still cannot buy at the end of the option period, the corporation will be able to make a sale on a shared ownership basis, with the ownership element being purchased at the original right-to-buy price.
I am confident that a considerable number of those who were new town tenants at the beginning of this Parliament will be new town home owners by the time it ends.
§ Mr. Newens
Does the hon. Gentleman agree that many people who wish to buy feel betrayed by the Government's policy on mortgage rates? Many people cannot envisage buying the houses about which they have made inquiries. 1868 The Government's policy has not made it easier for owner-occupiers. It has made it more difficult.
§ Mr. Stanley
The hon. Gentleman uses the word " betrayal ". Betrayal would come only if the Labour Party was in a position to implement its commitment to withdraw the right to buy from 6 million new town and council house tenants.
With regard to future building in new towns, we see this as being overwhelmingly for sale or shared ownership rather than tor rent.
§ Mr. Roy Hattersley (Birmingham, Sparkbrook)
If the hon. Gentleman intends to use that sort of florid language, will he kindly use it more precisely? Betrayals happen when promises are broken, and this Government have broken promises. The promise to which he referred has never been made by the Labour Party. Its policy on the sale of council houses has been clear for 20 years.
§ Mr. Stanley
I still say to the right hon. Gentleman that if the Labour Party was in a position to implement its commitment there would be a tremendous disappointment among, and sense of loss by, the 6 million council house tenants whose right to buy would be withdrawn.
Given the large stocks of rented housing that already exist, we see no need for a continuing major programme of new rented housing. At the same time, we want to give every encouragement to meet the demand for new homes for sale. Last year, following the change of Government, a total of 770 acres of housing land was made available to private house-builders by the development corporations and the commission, compared with only 440 acres the year before. This trend will continue.
The development corporations are also responding energetically to the seven-point programme for low-cost home ownership that we have put to housing authorities. Telford has 21 developers building on more than 25 sites. Warrington has 18 developers on over 20 sites. Milton Keynes is in negotiation with developers for some major starter-home schemes. Telford has carried out an improvement-for-sale scheme in the Severn Gorge. Skelmersdale has sold nearly 100 houses at low prices for improvement by 1869 the purchasers. Milton Keynes, Peterborough and Central Lancashire have already produced shared ownership schemes to bridge the gap between full home ownership and renting. At Red-ditch the corporation has joined the Dickens Housing Association to provide an extremely imaginative scheme for first-time buyers, which is of wider significance.
Just as they have been pioneers in many other ways, so I expect that the new town corporations will pioneer a number of nationally important home ownership initiatives in the next year or so.
§ Mr. Martin Flannery (Sheffield, Hillsborough)
Does the hon. Gentleman agree that the best houses will be sold and that the people who want to live in a reasonable house, and who are perhaps on the housing list, will have fewer houses from which to choose? Does he agree also that we must ensure that there are many houses that can be rented, so that people with little money will have somewhere to live?
§ Mr. Stanley
With regard to the best houses being sold, we have debated this issue a great deal already. If we look no further than the new towns and at the experience, for example, of Skelmersdale, which has been selling unimproved homes at low prices, we see that there is a great demand for the very worst houses—which is reflected in their prices. That provides a means whereby people who would have had no other opportunity to buy their homes can do so.
Equally relevant to the provisions of the Bill is the highly significant contribution that the new towns have made, regionally and nationally, to industrial development.
§ Mr. Guy Barnett
The Minister is now proceeding to another aspect of new town development. He has given the House a good deal of interesting information about owner-occupation, whether by new building or by the sale of homes. Will he comment on the provision of further rented accommodation in the new towns, particularly for young married couples?
§ Mr. Stanley
As I have said, we do not see a case for a major programme for rented accommodation in new towns, in view of the proportion of rented accommodation 1870 that already exists. A number of initiatives that have been taken on shared ownership will be of direct help to the families to whom the hon. Gentleman has referred. It may well be within the capacity of many young couples to take a 50, 60 or 70 per cent. equity in a house and to pay rent for the balance. That will enable them to get their foot on to the first rung of the ladder, and it will make easier the transition to full ownership later.
I do not think that many people would seriously contest that, in the area of industrial development, the new towns have been extremely successful. Over the last 30 years new towns have provided, either by building themselves or by providing land for private developers, about 110 million sq. ft. of industrial floor space, representing nearly 200,000 jobs. More recently, the new towns have produced about one-fifth of the total net increase nationally in industrial floor space.
In the development areas, towns such as Washington, Cwmbran and East Kilbride have played an essential role in creating additional jobs. Elsewhere, new towns have developed into regional centres of economic growth.
There are some particular aspects of the new towns industrial development which I should like to highlight briefly. First, the last few years have seen an increasing scale of private investment. Since the beginning of 1978, more than £67 million of private money has been invested for the construction of new industrial premises through the agency of development corporations. In the last financial year £39 million was raised from private sources, providing about 2½ million sq. ft. That meant that about half of the new towns industrial development was privately financed. We want to see this proportion increased.
Secondly, the new towns have demonstrated their ability to attract investment from overseas, and the third generation new towns, in particular, have had conspicuous success in securing foreign firms. For example, Northampton has attracted more than 45 overseas firms, and Warrington has attracted about 32 such firms. In many cases this is investment which would otherwise not have taken place in this country, and it has resulted in economic growth and additional employment 1871 opportunities which would otherwise not have occurred.
§ Mr. Newens
Is the Minister aware that many of the firms which he rightly says have been attracted to new towns have gone there because houses have been provided by the development corporations or the local authorities for skilled workers in the towns? If, as a result of the Government's policy, these houses will not be available in the future, the incentives for firms to go to new towns will be diminished. Is he aware that many firms in my new town have expressed their concern to me on this issue?
§ Mr. Stanley
It is not a question of not providing any houses. It is a question whether the houses provided will be almost overwhelmingly for rent, which is the Labour Party's policy, or whether we try to secure a better range of housing opportunities in the new towns, which is our policy. We think that there is substantial demand, particularly by the skilled and semi-skilled workers who come to the new towns to work in the firms to which the hon. Member has referred, for low-cost home ownership outright and for shared ownership. That is the way in which we are trying to meet the very type of housing demand which the employees and firms in question particularly want to see.
The third point about industrial development in the new towns is that, while they have successfully attracted a wide variety of industries of all sizes, they have achieved considerable success in fostering small businesses. Many new towns have developed nursery factory units, mini factories and small workshop units which have been an important factor in encouraging the setting up and expansion of small firms. Additional assistance is sometimes provided through small business advisory services, as in Telford and Milton Keynes. This, too, is another aspect of the new towns industrial development that we are anxious to encourage.
I hope that I have left the House in no doubt that the Bill is essential to the continuing development of the new towns-essential for their infrastructure development, their shopping development and their residential development. Despite 1872 the substantial injection of private finance that we wish to see, and despite the level of home ownership that we hope to achieve, the continuing use of some public funding will be required. I hope that the House will, therefore, agree to the Bill.
§ Mr. Ted Graham (Edmonton)
First, I should like to respond to the Minister's kind welcome to me on my first appearance at the Dispatch Box for the Opposition. I hope very much, in time, by my contribution, to make him reflect on the warmth of his welcome.
The Opposition are fortunate indeed, because, unlike the Government, they have present four Opposition Members who served on the Standing Committee on the Local Government, Planning and Land (No. 2) Bill. This debate, in effect, is a debate on a clause detached from that Bill. Those Members are my right hon. Friend, the Member for Birmingham, Sparkbrook (Mr. Hattersley) and my hon. Friends the Members for Greenwich (Mr. Barnett), for Harlow (Mr. Newens) and myself.
When listening to the Minister's eulogies about the Government's intentions in respect of new towns I hardly recognised that what he was telling us today was the Government's concept of what should happen in new towns, bearing in mind what my hon. Friends and I had to listen to in Committee Room 12—namely, the Government's butchery and savagery of new towns. We had to endure listening to the Government's intention to dismantle, to our dismay and that of a great many people, a vital part of the new towns and their concept—the forced sale of the industrial and commercial assets.
Opposition Members will not oppose the Third Reading of the Bill. We have facilitated its pasage and its translation from clause 106 of the Local Government, Planning and Land (No. 2) Bill. We are realists and not wreckers on the question of new towns. We always held the view that the Government got themselves into a mess from the beginning concerning that Bill. In their haste to try to deal with what they considered were a number of problems they produced not one Bill but five or six Bills rolled into one.
1873 We have before us part of the outcome, which could have been foreseen by prudent business managers as almost inevitable. My hon. Friend the Member for Greenwich rightly pointed out in Committee that the significance of the date of September 1980 was forecast by himself when he introduced an order on this issue on the previous occasion when it came before the House. That was in February 1979. We have seen the Government's arrogance in presuming that the Opposition would not challenge their intention when they brought forward the Local Government, Planning and Land Bill in another place in December last year. The Minister's excuse in Committee and on the Floor of the House was that because there had been a delay in bringing the Bill before this House, a delay caused by the Opposition's representations, in some way the Opposition had aided and abetted the little local difficulty which the Minister said this represented.
The Opposition do not withdraw for a moment what they did to ensure that the Local Government, Planning and Land (No. 2) Bill saw its passage through this House before going to another place.
The Bill before us now is one of the Bills that was rolled into the Local Government, Planning and Land (No. 2) Bill. Another separate Bill was rolled into that Bill—one concerning enterprise zones. There was another separate Bill concerning urban development corporations. There was another Bill concerning the financial relationships with local government—rates, capital and so on. There was certainly a separate Bill concerning town planning and many other matters. A clause was detached from the main Bill, and the Bill before us has been substituted for that clause. In effect, a new Bill was added to the original Bill—a 32-clause Bill concerning enterprise zones. Also included is the old Bill, but with major parts of it dropped.
It was revealed in Committee that the Government had a remarkable knack of keeping in the main Bill large sections of matters of great interest outside the House that were bitterly opposed. They have jettisoned many parts of the original Bill which would have been welcomed not only by people outside the House but by hon. Members. I refer to the clauses 1874 that were dropped relating to caravans, highways and so on. We shall not oppose the procedure. It is our intention to assist the Government to keep the new towns alive and to encourage in any way their ability not only to pay their debts but to undertake the expansion which the Minister said is part of the intention of the Bill before us.
However, it is not possible for Opposition Members to allow the Third Reading of the Bill to pass without paying special attention to the Government's Jekyll and Hyde attitude to new towns. It is clear that in the Local Government, Planning and Land (No. 2) Bill the Government have embarked upon an attempt to dismantle not only their own work but that of other Governments over the past 30 years in producing what has been recognised throughout the world as a major British success in planning and public work. We are not talking of a small sector of the economy. We are talking in terms of the 2 million people who live in new towns, of 400,000 new dwellings that have been built over the past 30 years, and of areas that have 700 new schools and provide I million jobs.
If, on the one hand, the Government are asking the House to approve the provision of large sums of money for the purposes outlined, we must take into account, on the other hand, their intention to strangle the attempt of the new towns, the commission and the corporations to do a successful job. The commission, the development corporations and many outside bodies deplore the damage that is being inflicted on the ability of new town corporations to produce a viable result by the Government reducing their profits and undoing the sound planning concepts that have been built up over the past 30 years.
What will be left is a disparate jigsaw. The commercial and industrial undertakings that will be sold, whether to a consortium or to individuals, will be those, like housing, which are in greatest demand and can easily be sold. They will be forced sales, and the prices realised will do no good for the new towns.
There is a great mystery. The question of the Secretary of State's ability and right to instruct and advise the managers of our new towns on the sale of their assets has yet to be clarified. We had an 1875 interesting and illuminating debate on the Stevenage Development Authority Bill, when we had the benefit of contributions by the hon. Members for Hertford and Stevenage (Mr. Wells) and for Welwyn and Hatfield (Mr. Murphy), who, I acknowledge, have taken a special interest in these matters. We are still not clear of the extent to which the Secretary of State is acting ultra vires. When the other Bill reaches the statute book, the clauses relating to new towns will give him the powers that he requires, but the Opposition remain wholly unconvinced of his legal right to carry out his present bullying of the new town corporations to sell their assets.
Our suspicions and unease are shared by a number of the development corporations, which are taking legal advice. When the matter was last before the House my right hon. Friend the Member for Sparkbrook told the Minister of State:when we next debate the new towns in this House, whether it is on the Local Government, Planning and Land (No. 2) Bill on Report or the special Report stage that the Minister promised us on the new Bill, which was clause 106, the Government owe it to the House to have a Law Officer of the Crown describing exactly what is the legal position—who can require or enforce sales and what the new town corporations' rights are in terms of selling or retaining their assets. I hope that the Minister will make it clear that we may have a categorical statement on that point.On the Floor of the House and in Committee the Opposition repeatedly sought that clarification.
The Minister of State replied:I listened carefully to what the right hon. Member for Sparkbrook said about the legal aspects. I answered those questions extremely fully in Committee, to my total satisfaction, but I will write to the right hon. Gentleman before Report, as he requested, to ensure that he has a full explanation of our views."—[Official Report, 8 May 1980; Vol. 984, c. 678–82.]We have had no information from the Government. There has been no letter to my right hon. Friend about the Secretary of State's intentions and his legal sanctity. If the Government wish the House to join them in ensuring that the new towns are given the full support that they want, to treat my right hon. Friend so cavalierly is not the right way to go about it.
While the new towns' borrowing is secured by the Bill, we want to know 1876 when the Local Government, Planning and Land (No. 2) Bill will again come before the House. In discussing new towns, we cannot exclude discussion of other matters.
We shall not oppose the Bill. The Opposition look upon our new towns and the new towns movement with pride and passion. We have a proud record of support, not only by making funds available, as the Bill provides, but by giving new towns encouragement to be strong and proud in their own right. We welcome and support the Bill and shall continue to fight to see that new towns flourish and expand, even under this Government.
§ Mr. Bowen Wells (Hertford and Stevenage)
It gives me uncommon pleasure to support the Bill wholeheartedly and to see that we have great support from the Opposition, though probably for entirely different reasons.
I see in the Bill a modest increase to the total amount of money to be borrowed by the new towns. This reflects the policy of building and then disposing of new towns. I congratulate the Government on embracing that policy It is a nettle that successive Governments have failed to grasp.
The establishment of the Commission for the New Towns was an example of the confusion in thought as to exactly how the new towns should be reabsorbed into the general fabric of ownership, control and government of towns. On taking office, the present Government adopted a clear and exact policy. We see the new towns movement as an excellent method of development, which enables a town to be planned in totality and to begin a great deal of industrial and commercial activity. In the Bill we have the element of self-financing, through building and then disposal, therefore making the funds available once more for investment in new towns.
The Bill also confirms the Government's commitment to the new towns, in that the amount of money that the Government will invest in them exceeds the amount of disposals. The commitment to the urban development corporations is another example of this Government's commitment to new towns and their concept.
1877 One of the problems that have not been debated and thought out carefully is exactly how the disposals will be managed and what will be the exact position of borough councils after the disposal of the assets. These matters need careful handling. For example, many new towns have built up new shopping centres which are a whole and which on disposal in parts could disintegrate and become sloppy, dirty, unattractive messes. The management of the disposal of shopping areas needs to be planned into the whole concept when the town is set up. In my own new town, Stevenage, that matter was not taken into consideration.
However, what I have just said does not mean that commercial centres of that kind cannot be disposed of and that proper management for the future cannot be ensured. I urge Ministers to make certain that the commission and the development corporations involved ensure when disposals take place that proper management is built into the developments.
The other question that we must think about is redressing the balance in the housing sector. In my own new town, the borough council still owns 70 per cent. of the housing—far too high a proportion. What is more, the Stevenage borough council has not taken advantage of the general consent of 18 May to dispose of housing to council tenants at advantageous discount rates.
§ Mr. Wells
It is utterly disgraceful, because it has denied many of the Stevenage tenants the ability to purchase those houses at values which 12 months ago were current. Now, some of them cannot afford the houses at the new enhanced values. That is the means by which the borough council has denied the people of Stevenage the ability to begin to own their own homes.
There has been no attempt to introduce shared ownership schemes or to do imaginative things, such as those to which the Minister referred, in terms of starter homes and other arrangements for young married couples and others to begin on the path of home ownership.
If we continue to keep the new towns in the ownership and under the control 1878 of development corporations or totally under the control of borough councils, that kind of bureaucratic political meddling will disadvantage the people who live in the new towns. Therefore, the policy to dispose of the housing assets in new towns to the people living there is to be welcomed and is reflected in the modest increase proposed in the Bill for the total amount of lending in new towns.
I congratulate the team at the Department of the Environment. However, I give one word of warning. We must make certain that these disposals are carried out with sensitivity. We must leave the borough councils involved in a similar position to those of other mature towns of comparable size so that they are able to carry out their functions as planning authorities and to operate on a basis which will not increase rates to an extent which more mature towns would not have to bear. Therefore, they must be left in a position which does not disadvantage new town government.
I am sure that my hon. Friend will give close consideration to this matter. For example, it will mean that the borough councils must own their own town halls. They must have certain assets in common with other mature towns. Therefore, as I said, this matter must be handled with sensitivity.
The policy to share the ownership of the new towns—to spread it around and not concentrate it in one authority—is right and is to be welcomed. I believe that it will stand the test of time.
§ 12.3 pm
§ Mr. Newens
I shall not follow all the remarks made by the hon. Member for Hertford and Stevenage (Mr. Wells), as we have crossed swords on this issue on numerous occasions.
I support the argument put forward by my hon. Friend the Member for Edmonton (Mr. Graham) and congratulate him on his new responsibilities. Like him, I have no wish to oppose the purpose of the Bill, which is to increase the amount that may be borrowed for the development of new towns.
New towns have proved to be a most successful and attractive form of urban development. They have provided pleasant homes in an attractive environment within easy reach of schools, shops, amenities and places of work.
1879 While it is the aspiration of many young people born in our older city centres to move out to homes in the country, many regard that aspiration as one that can be satisfied in a new town. I am continually approached by or on behalf of people living in all parts of the British Isles who would like to live in Harlow. I have a never-ending stream of letters from people who have left the town and gone to other parts of the world—even to Australia—who wish to come back. I am sure that my experience is shared by other hon. Members who represent new towns.
§ Mr. Christopher Murphy (Welwyn and Hatfield)
Could it be that a number of those former inhabitants of Harlow wish to return because they have heard that under a Conservative Government they will be able to purchase the homes in which they used to live?
§ Mr. Newens
On the contrary. I am glad that the hon. Member made that point. It enables me to make my point even more strongly. They get in touch with me when they return because they want the tenancy of a house. If they have come back and wish to buy a house, they do not normally announce to me, as their Member of Parliament, that they have arrived back on the scene. They come to me because they need a house to rent. It is because the Government are denying many people the opportunity of a tenancy that their aspirations will be denied in future.
Moving on to the basic issue in the Bill, I believe that the Government are right to prpvide for the financial limit for borrowing purposes to be raised. However, their proposals contrast with other aspects of their policy, as has already been pointed out.
The attempt to dispose of assets that have been developed in bulk sales on the open market is deplorable. The Government have argued that there is no contradiction and that the money to be invested by the public in new towns should be raised by sales elsewhere. However, great damage will be caused over the next few years by the policy on which the Government are embarking.
The concern and sense of apprehension at what is happening are not limited to Socialists, who have long accepted that the communities created by new towns should ultimately own and control their 1880 assets. Doubts are now also voiced by people of a Conservative turn of mind. I detected from the remarks made by the hon. Member for Hertford and Stevenage that he was concerned. Indeed, I suspect that a number of his Conservative friends have expressed apprehension to him.
At a recent meeting of the new towns sub-committee of the Association of District Councils, universal concern was expressed at some aspects of what is taking place. Many representatives of the new towns believe that they may in the long run be saddled with the no-profit-making—in fact, the loss-making—assets and that they will require to be supported from the rate fund.
The Government have not yet made any clear statement on the details of their policy for the residual assets. They should at the earliest possible stage come clean on this issue. They have stated that the Commission for the New Towns is to be wound up. Therefore, the vestigial loss-making assets cannot be permanently vested with the commission. In these circumstances, only one other possibility is feasible—that the loss-making assets should be foisted on the local authorities. In such circumstances, the local authorities have a right to ask " Will you tell us on what terms you are likely to ask us to take responsibility? "
The fact that we need to be concerned is undermined by experience with the housing assets which were accepted by the local authorities, the transfer of which I firmly supported. However, since transfer many design defects and maintenance needs have come to light, and they are imposing considerable burdens on the new towns. Estimates were submitted to the Department of the Environment some time ago. We are still awaiting the outcome of a full investigation of those estimates by the National Building Agency. I understand that the Government have offered to approve loan sanction for the necessary work to be carried out and that 40 per cent. of the cost will be met from Government funds. It is extremely important to resolve this matter as soon as possible. It is also important that, if at a later stage new town authorities are to be saddled with additional loss-making assets, the same process to secure additional funds should not need to be repeated.
1881 The position with regard to housing assets varies from one new town to another. In Crawley, where industrialised building techniques were apparently viewed with greater suspicion than elsewhere, fewer defects remain to be made good than in other new towns. In Harlow, estimates amounting to £10 million have been submitted. The situation is perhaps most critical in Peterlee, where the local authority is Easington. My hon. Friend the Member for Easington (Mr. Dormand) is deeply concerned. There the estimate of the sum required to put the housing in proper order is £13 million. We need to resolve the issue speedily, but we also need sufficient funds to put the defects right. While we are discussing the question of funds, the Minister should deal with that most important issue. In opening he said nothing about the source of the funds to remedy those defects or whether it was envisaged that they would be encompassed in the moneys that we are voting today.
The Government are starving new towns, along with local authorities generally, of funds needed for many purposes, but particularly for new housing. The reduction in the HIP allocation will be serious for many areas, including Harlow.
The Minister said that there was a great demand from tenants to buy their own homes. Many of us in the Labour Party are concerned about provision for owner-occupiers. As I have said on many occasions, I am an owner-occupier in Harlow new town. In the past I strongly favoured a policy whereby the Harlow development corporation built houses which those who wished to buy could purchase and others which could be rented. The hon. Gentleman said that he could not see a case for providing further rented accommodation for newly married couples in view of that which already exists. However, he is proposing that that rented accommodation should, to a large extent, be sold to owner-occupiers. Where, then, will the rented accommodation come from for newly married couples? The Government's policy will deprive young people who cannot afford to buy of hope of a home of their own.
The Government's concern is with those in the income bracket that provides them with the opportunity to buy, and the devil take the rest. That is wrong. 1882 We should be concerned about owner-occupiers, and I endorse any effort to assist them. However, this Government have little credit in that regard with their policy on mortgage rates.
People who want houses to rent will be denied the opportunity of a home. Tomorrow morning, together with local councillors, I shall be in the Harlow advice bureau dealing with problems. I guarantee that not one person will tell us of his difficulty in finding a house to buy, but there will be a long queue of people to tell us that they cannot afford to buy but want a house to rent. Those people are being sold down the river by this Government. Those of us who are against the wholesale sale of houses in new towns are standing up for the whole communty and not only the better-off sections with which the Conservative Party has traditionally been exclusively concerned.
§ Mr. Bowen Wells
Does the hon. Gentleman agree that the reduction of the HIP allocation will have this effect? In order to provide housing in Harlow, other new towns or elsewhere, new housing will have to be built by the private sector. It will also enable the private sector to build those starter homes which the public sector has conspicuously not provided up to now.
The hon. Gentleman asks where people who wish to become council tenants will go. He and I know that in new towns people move around the town. People will come out of tenanted occupation into the new houses built for sale. Those who cannot afford to buy—and I hope that they will become fewer—will go into that tenanted accommodation. That is how the policy will work. It is a dynamic concept which Labour Members fail to understand.
§ Mr. Newens
We fail to understand the concept on the basis of experience and facts. Not far from my new town, and within my constituency, there are quite a few houses previously owned by the Ministry of Defence. I sought for many years to persuade the Epping Forest district council to purchase them. It has now done so but insists that they should be sold and not let. Throughout the time that the council resisted purchase and since it has owned those houses, they have stood empty, in some cases for as long 1883 as seven years. The hon. Member for Hertford and Stevenage is shaking his head. I shall provide him with details. I do not make any statements idly. I am not blaming the local authority for the houses standing empty for the entire period; I am blaming the difficulties that exist. The houses have stood empty for a long period while people have been crying out to rent houses, and the houses could not be sold. I merely ask that such practices should not continue.
§ Mr. Bowen Wells
I do not support the situation of houses lying empty. If houses in the possession of local authorities stand empty for seven years, it is a disgrace. It should be avoided at all costs.
§ Mr. Newens
I did not say that the houses were in the ownership of the local authority for that length of time. They were in the ownership of the Ministry of Defence and were transferred more recently to the local authority. As a result of the difficulties of the policy of sales, houses have stood empty for as long as seven years.
Industry must be encouraged, but one of the attractions to industry of the new towns has been the availability of housing for key workers. If the Government are now to dismiss that need, as the Minister did this morning, I shall bring that to the notice of local industrialists who continually pester me—I entirely welcome their attentions—on the need for a continuing supply of houses for their key workers if they are to achieve the results that we all wish them to achieve.
The Minister referred to small businesses. Many small business men feel gravely threatened by the proposal to sell over their heads the premises that they now rent to a pension trust or some other outside authority.
The Government are insisting that assets are sold off in blocks. That is understandable, but it often means that small business men can buy their premises only if they form a consortium. In some rare cases it may be possible for small business men to form a consortium, but in the majority of instances that is not possible. As a result, small business men will find themselves under a new landlord—for example, a pension trust—who understandably will be out to obtain the highest return on the capital invested 1884 and will not be concerned, as the development corporations have been, with the service provided by the local industry and the employment opportunities that exist in the town.
There is no doubt that small business men in general deplore the Government's policy. They regard it as detrimental to their interests. When Conservative Members claim to be defending the interests of small business men, they should recognise that in this respect they are betraying their interests.
The policy of the disposal of assets is fraught with tremendous dangers. However, the Government refuse to allow new town communities such as Stevenage—for example, when the Stevenage Bill was introduced—to purchase their own assets. The Government's policy on new towns is damaging and the new towns' populations will reap the harvest in future years. They will have reason to rue a great deal of what the Government are now doing. That in no way gainsays the need to raise the borrowing limits that the Bill proposes.
The Government's general policy on now towns is to be viewed with the greatest concern and even alarm, but I shall support the Bill's passage.
§ Mr. Christopher Murphy (Welwyn and Hatfield)
It is to the credit of the Government that the circumstances of the new towns have at last been fully recognised. It was because of the clear understanding of the problems and difficulties in such communities that the Conservative Party received such overwhelming support from the electorate in new town constituencies at the general election.
The sale of assets has been of fundamental importance to many families in new towns. The opportunity to purchase one's own home is greatly desired, and the Government's determination to provide that opportunity with a generous discount scheme is to be applauded. Under the previous Conservative Administration, new town tenants in my constituency, in both Welwyn Garden City and Hatfield, had that chance and it was greatly accepted. It was a disgrace that the Labour Government sought to end that provision. It is equally to their shame that the Opposition are determined on that course once again.
1885 It is vital that new towns have the opportunity to become similar to other urban areas. It must be right to enable private enterprise to buy the assets rather than continuing pseudo-Government involvement via the Commission for the New Towns or the new town corporations.
New towns do not need to be under the thumb of the quango. There should be full democratic principles exercised locally, as in older towns. It is significant that the concept of giving the tenants of factory and commercial premises special options to own their property has been accepted and that those who have put their faith in towns such as Hatfield and Welwyn Garden City can have that opportunity.
The Government are right to deal with the current situations to be found in the new and expanding towns and to look for their completion in realistic terms. Equally, the longer-term approach towards the concept of new towns has to be considered.
It seems unnecessary for any more new towns to be created. Their initial growth coincided with an upturn in population trends which has not continued and with trends in social policy which in some respects have been found wanting. Destroying further countryside by green field new towns would be a serious and legitimate concern. The attraction of those in industry to such areas would be achieved largely in consequence of unfair competition with inner city and other urban areas. The net result would be to create further environmental problems of serious proportions in the major towns and cities.
The lessons of the new towns have been largely learnt, and that experience can be used to regenerate the inner urban areas. The urban development corporations are a step towards that. We must ensure that the balance is right between Government involvement and the private sector. What is needed is the provision of infrastructure and the giving of real freedom to private enterprise to develop, thus ensuring that a return on Government money is eventually made and that further public finance is not involved.
The initiation of enterprise zones is much in tune with that thinking, and 1886 such an approach, in tandem with the advantages of new town development, could revitalise our cities.
The team of Ministers in the Department of the Environment has taken positive steps to fulfil the hopes and aspirations of those who live in the new towns. The confidence that the electorate in new town constituencies placed in a Conservative Government is clearly seen to have been built on sure foundations.
§ Mr. Guy Barnett
I begin by congratulating my hon. Friend the Member for Edmonton (Mr. Graham) on his promotion to the Front Bench and on his speech. We are debating an extremely important subject, and someone should protest that we are doing so when, inevitably, it is difficult for hon. Members on both sides of the House to be present. I know that Government business sometimes has to be taken on Fridays. However, it is relevant to members that when the House last debated a new towns money Bill in 1977 the Second and Third Readings were fully debated during normal weekdays. It was, therefore, possible for many more hon. Members to take part in the debates.
The discussion of a new towns money Bill is invariably an opportunity to raise new town issues in general, and that is precisely what the Minister did. We heard an encomium of everything that the new town movement has achieved. The hon. Gentleman described how it is that some 2 million of our fellow citizens live in new towns and that over I million find their jobs in such towns.
It is not always people who live in new towns who find jobs there. The new towns provide jobs for people who live in the neighbouring region, just as some people who live in new towns find it convenient to work elsewhere. What has characterised the debate and practically every speech—certainly the informed speeches—is that the whole new town story has been a success story of which we can be proud. It is a success story in terms of town planning at a time when a good deal of criticism is bandied around about planning in general. It can be stated without fear of contradiction that the 21 new towns in England are magnificent examples of town planning.
1887 As has been pointed out by several hon. Members, new towns have been remarkable in the degree to which they have been able to attract industry. They have attracted innovative firms from overseas. We should place on record the degree to which towns in the North-East of England have been able to provide jobs for people living in the area—jobs that would otherwise never have gone to the North-East, if, indeed, they had come to this country at all.
Why have new towns been so successful in attracting industry on to their estates? There are a number of reasons. My hon. Friend the Member for Harlow (Mr. Newens) gave one reason that the Government have not taken fully into account. New towns, as part of their policy, have been able and willing to provide housing for key workers if firms moving to the town wish to bring them with them. It is not always possible or easy for a skilled worker to enter into a purchase arrangement for a house because he wants to move to a new town. There needs to be a reservoir of rented accommodation to attract a new firm, especially a firm that may think of investing in this country although its headquarters are located abroad.
Another consideration is that new towns, almost without exception, have on their industrial estate some of the highest levels of environmental care and estate management that exist anywhere in this country. I have visited a large number of industrial estates in new towns, and I can bear witness to the fact that immense care has been taken to see that the working conditions are of the highest standard. Industrialised estates in this country generally can be criticised for the fact that they are below the standard of many of our industrial competitors. New towns are the exception. For that reason, new towns have been conspicuously successful in attracting investment from abroad.
I have mentioned two points that seem to characterise the great success of the new towns—their magnificent record as planning authorities and their success in attracting industry, particularly modern, technological and innovative industry, from abroad to their areas. One would have thought that with a record of almost unqualified success behind them the Government would want to develop some 1888 of the policies that have orginated in the new towns movement.
There was, many years ago, a good deal of talk about " new town blues ". One finds in many new towns thriving new communities living and working in happy and well-planned environments.
§ Mr. Murphy
Does the hon. Gentleman agree that the phrase " new town blues " now has a different meaning in terms of the large number of people in new towns who vote for the Conservative Party?
§ Mr. Barnett
The hon. Gentleman has wasted the time of the House once. I do not propose to give way to him again if it means having to deal with frivolous comments that are out of character in this important debate. I am surprised that the hon. Gentleman, who represents a new town, should waste the time of the House in that fashion.
The people of this country, particularly those who live and work in new towns, have a great deal for which to thank the planners of the new town movement. It is therefore surprising, after hearing the Minister's speech, to recall the haphazard fashion in which this legislation has come forward. It needs to be underlined that in 1977, when the House had two full debates on new town matters, the Conservative Opposition found it expedient to oppose the new towns money Bills brought forward at that time.
My hon. Friend the Member for Edmonton spoke of the willingness of the official Opposition to be as helpful as possible, despite the disgraceful muddle into which the Government got themselves, in order to provide sufficient money for the new towns so that they are not rendered bankrupt in September of this year. The Labour Party has always been a strong supporter of the new towns movement. I should like to believe the same of the Conservative Party. In past years, I think that the Conservative Party has been a supporter of it, but the disgraceful manner in which this matter has been handled must call into doubt the Government's commitment to the new towns as a whole.
We are debating a money Bill. The Minister has given scant indication of whether the sum of money that we are 1889 voting is sufficient for new towns development or what sort of development he foresees. He has, admittedly, given some examples, but it is important that questions should be asked about the sums of money being requested. The amounts appear to be remarkably small. I understand that we are voting the sum of £500 million as a consequence of the passage of the Bill. The Minister said that he expected the sum to last until the end of 1983. That is at least three and a half years, yet he informs the House that he needs only £500 million to cover that period. That strikes me as odd—
§ The Under-Secretary of State for the Environment (Mr. Geoffrey Finsberg)
If the hon. Gentleman looks at the face of the Bill—no one on the Opposition side appears to have done so—he will find that the figure is £750 million, not £500 million. That is a rather different sum.
§ Mr. Barnett
I agree that it is a rather different sum. I beg the hon. Gentleman's pardon if I have not done my mathematics correctly. The sum is £250 million more. I stick to my point, however, in wondering whether the sum is sufficient. If the Under-Secretary of State consults the housing and construction statistics published by his Department, he will see the degree to which inflation has affected the costs of new construction.
Taking 1970 as the base year, the sum of £3,250 million increased in money terms by 1980 to about £16,091,000. Similarly, £2,750 million in 1970 is represented in 1980, with construction costs having increased considerably, by £13,616,000. That may put into context, although admittedly the figures do not do it precisely, whether we are talking about £500 million or £750 million, the additional borrowing power being given to the new towns generally. One has to ask whether the money that the Government are seeking to provide will be sufficient for the various sorts of work that has to be done in the new towns.
Recently I discussed this matter with my hon. Friend the Member for Kettering (Mr. Homewood), who, unfortunately, cannot be present today. I have been in 1890 touch with the management of Corby new town on this issue. I understand that it is likely that Corby, which is doing a magnificent and highly relevant job in answer to the serious problems facing the town, will run out of money for its industrial programme by Christmas. There will then be nothing left to finance advance factory building. Work is now being done and will be done in the next financial year on sewers, roads and other forms of development. Given the facts that my hon. Friend the Member for Kettering has frequently quoted about the level of unemployment in Corby, I should have thought that the Government would give business and commercial development the highest priority and prevent the Commission for the New Towns from being short of funds to build the advance factories that Corby desperately needs if it is to attract industry.
I am also informed that the Government are operating two schemes in Corby as a means of attracting industry. The first scheme is to try, as the last Government did, to attract the interest of pension funds to invest in the new towns. I gather that the commission is holding cocktail parties and various other events to try to persuade the pension funds to invest in Corby. That is all very fine and relevant. However, my experience was that often the public interest was better served by selling off completed assets than attempting to get the pension funds to invest in building new factories and offices.
One of the strong arguments in favour of the roll-over of assets is that generally the public interest does better from the sale of completed assets or of an interest in them than from trying to attract private funds into the development of new construction. Nevertheless, that is one form of investment in Corby that may be successful. I hope that it is.
I find it interesting that the Government are trying to pioneer another form of investment in Corby. It is to persuade private industrialists to invest in the town; that is, to move in, build their own factories and develop new industrial enterprises. I gather that very little progress has been made on that score. In view of my interest in the experience of the last Government, and given my concern for Corby—and I emphasise here the concern felt about Corby by my hon. 1891 Friend the Member for Kettering—I should be interested to hear the Under-Secretary's comments on those points. Regardless of whether we live in Corby, we have every reason to be concerned about a town that faces the most serious consequences from the Government's policy towards the steel industry.
My hon. Friend the Member for Harlow very properly raised the issue of the future of the Commission for the New Towns. That is an issue that the House ought to consider. We want something that looks like a definitive statement about the Government's plans for the future of the commission. The commission and its staff do not know what the future holds. Many highly qualified staff on it are now consequently beginning to seek jobs elsewhere because of the uncertainty that clouds their future. If they knew that the commission would be wound up in 1985, they would know where the hell they were—if I may put it in those terms—but they have no idea of what is to happen. I think that the Government should come out with a clear statement on the future of the Commission for the New Towns.
I do not understand how the Government can give any clear undertaking for the winding up of the Commission for the New Towns, for two reasons. The first, given by my hon. Friend the Member for Harlow, is that the commission is responsible for a number of assets in a variety of new towns. Those assets include parks, gardens and community assets of one sort and another, and unless the Government force the local authorities, possibly against their will, to take responsibility for these assets the Commission will, presumably, need to consider, administer and run them.
The second, and most important, reason is the consideration of the future of the industrial and commercial assets in the hands of the Commission for the New Towns relating to Welwyn and Hatfield, Hemel Hempstead, Crawley and Corby. There is a programme, though I do not know whether the Government are sticking to it precisely, to wind up the first-generation development corporations and hand over their commercial and industrial assets to the Commission for the New Towns. Therefore, in one way or another, the commission will for some 1892 years continue to be an important management body, whether we like it or not.
I know that it is the policy of the Government to sell off assets as fast as they can. I have warned the Government on several occasions—as I warned them when they were in Opposition—of the dangers of the wholesale disposal of industrial and commercial assets. The consequence of placing large numbers of assets on the market will be to depress the price, which will be to the disadvantage of the directors, the Treasury, the taxpayer and the public interest. If industrial and commercial assets are to be sold, their sale must be to the general advantage of the public purse.
I am afraid that the Government are so anxious to wind up the Commission for the New Towns, and to pursue their ideological belief that no assets should be owned by a public authority, that they are likely to promote the sale of assets regardless of the public interest and to do so with questionable legality. The House and the country are entitled to an indication of the policy of the Government on this issue. How long do the Government expect the Commission for the New Towns to continue in order to manage assets that are either unsaleable—such as community assets—or assets that should not be sold now so that the country can expect to recoup a proper price on an investment originally made by the taxpayer? Questions need to be asked on this issue.
The Opposition, including my hon. Friend the Member for Edmonton and others, have pointed out the importance of the role of the new towns in the management of their industrial estates. My hon. Friend the Member for Harlow has quite rightly told the House on previous occasions that there has been hardly any criticism from the tenants of industrial estates in new towns about the quality of estate management, and similar evidence has come my way. Unquestionably, this has been a factor in the relative economic success of the industrial firms operating in new towns. I am afraid that one of the consequences of the sale of assets and the disappearance of the development corporations and of the Commission for the New Towns as landlord will be that the same level of service will not be available to the firms that operate in new towns.
1893 Rightly, there is much talk about the importance of small businesses. What impressed me was that if a small business man saw the opportunity of expanding, because of the development of a market at home or overseas, he had little or no difficulty in finding accommodation to suit the needs of his expansion through the good offices of a new town development corporation. The level of flexibility that the development corporations were able to provide to enable business men to occupy suitable premises was one of the great assets obtained from the new towns movement. It is a retrograde step to sell off the assets. The Government might make a buck or two as a consequence, but that action will deprive the new towns of their pre-eminence as attracters of industry and as areas of success for British industry.
We should not throw away those assets. We have done extremely well in a variety of ways as a consequence of new town development. We should learn from the success of the past. We are concerned enough about our economic future. The Government propose to sell off freeholds, which the last Government refused to do on the best possible professional advice. Professionals always advise against selling off the freehold. However, that is precisely what the Government are doing. Freehold is a tremendously valuable growing national asset. We should not deprive the national investment of it.
I am apprehensive about the way in which Government policies on new towns are developing. I welcome the increase in the borrowing limit available to new towns, and, therefore, I have no intention of delaying the Bill's passage. However, I should like an assurance that the Minister believes that the demands for new jobs in the towns will be satisfied by the money available for investment and the extension of industrial estates.
I should like an assurance also on the Corby question, because that causes anxiety to many people. I should also like some fairly certain information about the future of the Commission for the New Towns and how the winding-up programme is proceeding. If there is to be dispersal of assets—and in principle I am not against that—may we be assured that it will be undertaken in a responsible 1894 fashion, to the benefit of the community as a whole?
§ Mr. K. Harvey Proctor (Basildon)
As a new town blue, I am delighted to follow the hon. Member for Greenwich (Mr. Barnett), particularly since he speaks with great experience and knowledge of new towns and their development. New towns do not stand still. They move forward with the position in which they find themselves. That rightly affects the Government's attitude to them.
The hon. Member made an error when he said that the Bill raised the borrowing limit by £500 million. My hon. Friend the Minister pointed out that it was £750 million. Of course, to Labour politicians £250 million here or there is pure chicken feed.
I welcome this modest Bill because it will place only a modest burden on further Government spending. I am delighted that from this public funding we shall be able to complete Basildon town centre. That is directly connected with the feelings of my constituents, many of whom believe that it is the facilities available to the present populations of the new towns that need developing rather than more development corporation housing estates.
When I meet people in my surgery or in the constituency, they say " When are you going to stop building more houses in the new town of Basildon, which is already very large? There are too many houses and people and not enough entertainments, recreational facilities or jobs for those already living there."
I am very much a supporter of the Government's housing policy. Of course, I do not say that there should be no further building. There should be specialised provision, particularly of sheltered accommodation for the elderly, who are largely neglected in many new towns, and there should be increasing provision, as there now is in Basildon, for single-person accommodation. Whether it is the role of the development corporation, of the local council or of private investment to provide that accommodation, I am sure that the private sector has a role to play even in those specialised areas.
I welcome the right-to-buy provisions in the Housing Bill. I am delighted at the 1895 take-up by the tenants of the development corporation and of Basildon district council. Basildon leads the new towns. Where it goes today, the rest follow tomorrow. Already, over 1,000 development corporation tenants have bought their homes and many thousands will do so. When they were able to do so before, in the early 1970s, they bought their own homes until the Labour Government stopped it. We are picking up where we left off.
A number of problems arise, and as this is a wide-ranging debate I hope that I shall not be out of order in referring to them.
§ Mr. Deputy Speaker (Mr. Bernard Weatherill)
The hon. Genueman should not go too wide. This is the Third Reading of the New Towns Bill.
§ Mr. Proctor
I will certainly take your strictures to heart, Mr. Deputy Speaker.
The right-to-buy provisions have given rise to a number of housing problems in my new town. For example, estates were built in times of high inflation and very high land values. As a result, the houses on them have a very high all-in cost price—the base rate at which people can get in to buy their homes. People who would like to buy cannot do so at the moment because of that high all-in cost. The reason is that those homes were built for rent and not for sale. But it is not a party political point to say that they were built in a period of high inflation.
Some of my constituents in the new town live on estates which are served by district heating schemes, and there are difficulties there with the right-to-buy provisions. They want to buy, but there is the problem of what is to happen to the district heating scheme. There are people living in houses built by the development corporation which have structural defects. If a person cannot buy the house in which he is living, he may want to buy another one. I should like to know the Minister's views on that.
The treatment of stamp duty varies between the district council and the development corporation, levied in the one on the discount price and in the other on the market price. The reason seems to be the different arrangements made if the house is subsequently sold within a five-year period and the differing schemes as 1896 between the council and the development corporation. In the right-to-buy provisions, I believe that the type of scheme which will be adopted is the one that new town development corporations adopt currently, which is a one-fifth pay-back for each year up to five years. Stamp duty treatment on that sort of deal is higher than that in the district council scheme. I should be grateful if the Minister would look at that, too.
A problem has arisen recently involving a constituent of mine who lived in council accommodation in Northern Ireland and who is not covered under the Housing Bill as it is currently drafted from the point of view of having that discount allocated to the purchase of a house in Basildon under the right-to-buy provisions. I understand that the Government are giving serious consideration to amending the Housing Bill in another place. I add my encouragement to them to do so so that a person living in Basildon and wishing to buy his house may get the discount provisions set out in the Housing Bill regardless of where he lived before—in council or development corporation accommodation in England, Scotland, Wales or Northern Ireland.
I do not wish to incur your wrath, Mr. Deputy Speaker, so perhaps I should conclude my comments on the problems which arise from the right-to-buy provisions, which are going smoothly in my constituency. However, I wish to add a brief word or two about industrial development in new towns.
All hon. Members who have contributed to the debate so far have spoken of the role of new towns in attracting industrial development of various shapes and sizes and how successful they are. That is undoubtedly true of my constituency. However, I wish to put one matter to the Minister. It concerns the very small entrepreneur who may have got himself into difficulty with the local district council by falling foul of planning regulations, being moved from one locality to another because of planning regulations, and finding the small industrial sites in new towns too big and perhaps too sophisticated for his purposes.
What the really small man needs is a small area of accommodation before his business starts to take off—one that does not need a very sophisticated infrastructure. He needs somewhere to go. 1897 Many people who come to my surgeries have fallen foul of planning laws and have been directed to the development corporation. The accommodation and the prices charged by the development corporation are beyond their means. Therefore, I shall be grateful if Ministers will examine that point also.
All hon. Members are pleased to have had this opportunity to debate the new towns. We do not often have the opportunity to discuss their problems, so that this debate has been useful. I congratulate the team of Ministers at the Department of the Environment on their policies in this area, which are to the advantage of my constituents and to people in other new towns. Ministers richly deserve the praise heaped upon them by Conservative Members and by my constituents for honouring the election manifesto pledges that we made a year ago.
§ 1.6 pm
§ The Under-Secretary of State for the Environment (Mr. Geoffrey Finsberg)
The House has had a useful debate. As with all debates on new towns, anyone listening to this debate will have been impressed by the unanimity of view that the new town corporations have substantial achievements to their credit. In the course of a relatively short period—in some cases as little as 15 years—they have brought into being new and thriving communities. That is a credit to the enerev and drive of the boards of the development corporations and to the ability of their staff.
There is, of course, room for some divergence of opinion about whether the way in which new towns have developed has always been for the best. In our judgment, their initial development in the 1940s relied far too heavily on public investment and Dr. Dalton's cheap money. Many people who were conned into investing their money now bitterly regret having taken out Government bonds in those days.
As time has gone by, the private sector has played an increasing role in the development of new towns. We believe that the involvement of the private sector has not gone far enough or fast enough. As my hon. Friend the Minister for Housing and Construction made clear, the Government are committed to pursuing force-fully 1898 a greater involvement of the private sector in the new towns. That covers not merely future development. We have to redress the imbalance of the past. We need to review the proposals in the Bill against that background. The new towns need further public investment, and the Bill will provide that.
It is perhaps a commentary—I am sure that hon. Members will not mind any saying so—that the economic disaster that the Government inherited owes much to the point made by the hon. Member for Greenwich (Mr. Barnett) when he underestimated by 50 per cent. the provision that the Bill makes. That characterises so much of what the previous Government did in economic affairs.
§ Mr. Guy Barnett
I am not sure from where the Minister gets the figure of 50 per cent. I was concerned with the sum of money available under the Bill before the Government have to present an order to the House to enable them to obtain the other £250 million. That is what I had in mind, but I may have got a little confused. We deserve some response to the comments that I made about the adequacy of the sum in the light of the needs to which the Minister now draws attention.
§ Mr. Finsberg
I assure the hon. Gentleman that that was merely an hors d'oeuvre. I was indicating the general way that we felt the previous Government looked at these matters. In no way is it possible to make an increase of from £2,750 million to £3,625 million or from £3,250 million to £4,000 million the £500 million to which the hon. Gentleman referred. However, I shall return to that matter shortly.
The debate was opened for the Opposition by the hon. Member for Edmonton (Mr. Graham). I join in the congratulations and good wishes offered to him. My hon. and silent Friend the Member for Southgate (Mr. Berry) wishes to be associated with that. I wish the hon. Gentleman well—and a very happy decade in that position. I do not think that he quite aspires to be leader of his party yet, although many of us feel that the Labour Party would be in good hands in Opposition under his control.
The hon. Gentleman made much of what he called the butchery of new 1899 towns and the forced disposal of assets. I have said before, particularly in the debate on the Stevenage Development Authority Bill, that what the Government's policy on new towns is doing is to ensure that the national taxpayer is being repaid some of his forced investment. It is no good Opposition Members thinking that all the money that has been put into the new towns came from the new towns themselves. It did not. The overwhelming bulk of public money that went into them came from the national Exchequer, and the national Exchequer is long overdue to be repaid some of its investment. That is what is behind our policy, and I see nothing wrong with that.
As my hon. Friend the Minister for Housing and Construction said in opening the debate, we believe that private investment has a growing part to play in the future of new towns. I do not propose to follow the hon. Member for Edmonton on his tour de force on the Local Government, Planning and Land (No. 2) Bill. I had quite enough to endure in the adjoining Committee room on the Housing Bill. The delights of the Local Government Bill may well become apparent to the House when the Report stage catches up with us in the not-too-distant future.
The hon. Gentleman also said that the new towns and the commission deplore the decisions that we have taken which are against the new town concept. Those are not words that I have heard from most of the new town corporations. They recognise, unlike the hon. Gentleman, that the original intention of the new towns legislation was not that new towns would remain a permanent feature of this country but that as their tasks were done they would be wound up. The Government of which the hon. Gentleman was a member had already set dissolution dates for several of the new towns, so there is nothing new in what we are doing concerning new towns. I think that the hon. Gentleman's words were a trifle extravagant—but that might be thought to be the champagne bubbles of celebrating his new position on this occasion.
§ Mr. Newens
Is it not true that the original intention of those who put through the new towns legislation was that when the corporations were wound up the assets would be transferred to the local community and not disposed of in the way that the Government are proposing? 1900 Although there have been Bills such as that of 1959 and others since, the Government have embarked upon what is a recent innovation in disposing of such huge assets in this indiscriminate manner. Surely my hon. Friend the Member for Edmonton (Mr. Graham) is perfectly correct in what he said about the original intentions of those who put the legislation through the House in the 1940s.
§ Mr. Finsberg
I was referring to the new towns themselves. I shall come later to the commission. It was never intended that new towns would remain a permanent feature as separate, undemocratic, non-elected bodies. That is all that I am saying at this stage. I shall come to the other points as I go through what has been said.
I have had the privilege of visiting every new town in England, some more than once, although I have not yet had my passport franked to visit new towns in Scotland or Wales because I have no direct responsibility for those, although they are covered in this legislation. The outlook that I found in those new towns is very different from that which I should have picked up from most of the Opposition's comments if I had been a visitor from Mars. In all the new towns I found a realisation and acceptance that the ideal for them was to complete their task and then cease to be separate bodies.
My hon. Friend the Member for Hertford and Stevenage (Mr. Wells), who has apologised for not being able to remain, raised the important point of his new town shopping centre. He was right to stress the need for proper management. I do not think that anyone would disagree. Equally, I do not believe that any hon. Member, certainly on the Conservative Benches, would feel that purchasers, particularly the pension funds that we were told about, would put their investment at risk by running down a shopping centre or allowing it to become an eyesore.
I also warmly support my hon Friend's view that the time has passed when new town tenants, and tenants where the housing stock has already been transferred from the new town corporation to the local authority, should be treated as second-class citizens, as Stevenage council still persists in treating them.
§ Mr. Finsberg
Perhaps I am being unfair—the tenants are probably being treated more as third-class citizens, when everybody says that Stevenage council wants to own the property that it occupies as offices yet denies its own tenants the right to buy their own homes. Let us have an end to these double standards and that hyprocrisy that we heard from Stevenage when its Bill was being put forward, not by its own Member but by the hon. Member for Harlow (Mr. Newens). He put it forward sincerely and capably, but double standards still exist there.
There is one problem with the hon. Gentleman. I mean it genuinely when I say that he is very pleasant and sincere. Any brutal rebuttal of his arguments must be tempered. I shall try to be less than my usual abrasive self when I deal with the hon. Gentleman, but I hope that I can still convince him.
The hon. Gentleman spoke about community-related assets, which are a very important issue. We are considering to whom community assets in the new towns should go and on what terms. The local authorities have a clear interest in assets such as parks and open spaces and the water gardens which are a marvellous feature of places such as Hemel Hempstead. I hope that it will be possible to arrange for the appropriate local authority to take them over on acceptable terms. We hope soon to be able to reopen discussions about this matter with the local authorities concerned.
The hon. Gentleman also asked me about defects. When going round the new towns I have made a point of looking at as many housing defects as possible. I have seen the substantial defects at Peterlee to which the hon. Gentleman referred. Indeed, one of the earliest Adjournment debates that I took was one answering the hon. Gentleman's hon. Friend the Member for Easington (Mr. Dormand) on this matter.
I cannot tell the hon. Gentleman very much about the matter, because we are discussing with the Association of District Councils the whole question of defects, and we are waiting for the claims to be quantified by the National Building Agency. I hope that it will not be too long before we can have discussions, 1902 based on the same criteria as were laid down by my predecessors. I do not believe that it will be possible to widen the areas where recompense can be made for defects involving further expenditure by the Government.
The hon. Gentleman asked me where the resources would come from. The answer is that they will come from the local authorities' housing investment programme allocation. Their needs for repairing defects are taken into account when HIP allocations are made. The Government have promised a grant towards financing the provision of those resources. That is the information for which the hon. Gentleman asked. It is not a surprise to the local authorities, although it may be a surprise to him.
§ Mr. Newens
If the Minister looks at the record, he will see that what he said is similar to what I was seeking to say. Will he enlarge on the question of the 40 per cent. grant? Will he look at the possibility of reviewing the effect on the HIP allocation? It would be unfortunate if, because of these defects, the local authorities in the new towns had additional burdens that were not imposed on other local authorities.
§ Mr. Finsberg
The hon. Gentleman puts two points to me. He asked about the offer of 40 per cent. That was not the original percentage. The 40 per cent. follows a meeting that I had with the relevant committee of the ADC. I had to tell the committee that I hoped that it would not take too long to make up its mind whether to accept that figure, because it cannot remain open for ever. I have to leave it at that.
I can hold out no hope to the hon. Gentleman that the HIP allocations will be changed. We do not have available a small crock of gold from which we can draw extra money. When we have the quantification, we shall look at the HIP allocations to the relevant authorities. The defects list would be one factor that we would take into account in an area that had to meet them which we would not take into account in another area.
The hon. Gentleman expressed the view that small industries would be worse off under a pension fund. I must say to him almost exactly what I said to my hon. Friend the Member for Hertford and Stevenage. I do not believe that it is in 1903 the interests of a pension fund to treat its tenants in such a way as to drive them away, thereby causing a void and a loss of return on investment. Equally, a pension fund will be subject to the provisions of the Landlord and Tenant Act 1954 regarding commercial rents, so it will not be able to overcharge small firms. I hope that more consortia will be formed so that small businesses can buy the premises which they and their neighbours occupy. If they are not able or do not wish to do so—some may not wish to do so—I can see no reason why those tenants will be in any worse position under the ownership of a major pension fund than under the ownership of a development corporation.
My hon. Friend the Member for Welwyn and Hatfield (Mr. Murphy) spoke of the need for a balance of interests. I hope that the tenor of my hon. Friend's speech and of what I have said so far reassure him that it is our firm policy to reduce the taxpayers' involvement and to encourage more injection of private capital into the new towns.
The hon. Member for Greenwich spoke last for the Opposition. From my knowledge of the work that he did on new towns, I should like to pay tribute to him. In going round the new towns, I hear nothing but glowing reports of his involvement, support and interest. Anyone who has anything to do with the new towns finds them fascinating institutions.
I was glad to hear the hon. Gentleman's views on industry in the new towns, because it clearly is a success story. The House will be pleased to know that, for example, in Washington new town in the first six months of this year 28 new companies, providing more than 500 new jobs, have started operating.
I am sorry that the hon. Member for Greenwich was so sharp with my hon. Friend the Member for Welwyn and Hatfield when he intervened to lighten the tone of our proceedings. I believe that the hon. Gentleman would secretly admit that the new towns wanted a change of Government and voted out in large numbers, including a Cabinet Minister, those Labour Members who were clearly out of touch with the aspirations of their voters. It does no harm for my hon. Friend to remind the House of that.
The hon. Member for Greenwich asked about provision for the new towns, specifically 1904 Corby. The assets of Corby were transferred to the commission on 1 April. The corporation is to be dissolved at the end of the month. The commission, in partnership with the local authorities, will continue the corporation's efforts to diversify the industrial base of the town to alleviate the serious unemployment caused by the closure of the BSC's steelmaking operation. The commission is providing advance factories, opening up land on which industrialists can build factories and taking an active part in efforts to attract industry to the town.
As the hon. Gentleman will know, Corby now has assisted areas status, which is helping considerably in attracting industry to fill the gap caused by the closure of the BSC's operation. We have made funds available to the commission to build the advance factories and open up Weldon, where firms will be able to build their own factories. We believe that, in general, the construction of factories could be financed by the private sector and that public finance should be confined to the form of investment not capable of being financed in other ways.
The commission, which is responsible for Corby, has not complained to the Department about a shortage of funds for the necessary development at Corby. The allocation of investment resources that we have made to the commission took full account of the needs of Corby, and I repeat that we have not been told that they are proving inadequate.
The hon. Member for Greenwich mentioned the New Towns Act 1977. He painted a somewhat misleading picture, I am sure unintentionally, of why, in Opposition, we took the line that we did. We felt that lending to the new towns was the easy way out and that more of the provision for new towns should have been financed by the sale of assets. That is what we are now proposing to do. The Bill and the Local Government, Planning and Land (No. 2) Bill will enable more to be done.
§ Mr. Graham
The Minister rightly keeps to the theme of the Government's intentions to finance many of their projects through the sale of assets. However, in Committee the Minister more than once stated that, from total commercial and industrial assets amounting to £760 million, they had instructions in the first 1905 year to dispose of £120 million worth and in the second year £200 million worth. They made it clear that they would not be satisfied until all the industrial and commercial assets that could be sold were sold. If all the assets worth buying are sold, and the management in new towns is left with only those that are unsaleable, the viability of those assets will be very poor.
§ Mr. Finsberg
The hon. Gentleman perhaps has not taken on board that the sale of assets that we mentioned for the first two years is the figure that we believe is realisable. We have not said that all the assets will be sold by a certain date or in a certain year. In the light of that, and in the light of what I said earlier about community-related assets, we have to work out the best way of making certain that the remaining assets, whether commercial, industrial or community-related, are disposed of in the most sensible way. I do not think that what the hon. Gentleman is predicting will happen. He would be wise to be a little patient. I do not think that at the end of the day his fears will be realised.
After some mental arithmetic without his pocket calculator, the hon. Member for Greenwich queried the adequacy of the money that we are providing. There are two factors that he may have overlooked. First, the new town programme is nearing completion. The first and second-generation towns are, in general, to be wound up over the next few years by decisions announced by the previous Labour Government. Secondly, about half of the new towns' finance is for housing. As the hon. Gentleman knows, we are reducing substantially new investment in public housing. That in itself reduces dramatically the need for a vast amount of new money. I assure him that the provision that we have made is sufficient, in our judgment, to cover the needs of the new towns as we have seen their programme.
§ Mr. Guy Barnett
I am reassured by what the Under-Secretary of State is saying. My experience was that the very rounding-off of the programme of the towns that were due for handover and the completion of work was putting one burden on resources, while the progress that was being made by the third-generation 1906 new towns was imposing a second burden. I found that the two burdens were making considerable demands on funds. That is one of the reasons why I expressed anxieties.
§ Mr. Finsberg
I hope that I have set the hon. Gentleman's mind largely at rest. I do not pretend that I have set it completely at rest. I hope that he will recognise that the provision that we are making will make a contribution to the new towns which we believe they need and which they feel that they can do with.
It was clear from what the hon. Gentleman said that he still does not have asset sales quite right. He, like his hon. Friend the Member for Edmonton, seems to think that they will all be unloaded on to the market at a time and in such quantity as to depress the market. That is not what we propose. Such an unloading would be detrimental to the best realisation of the assets. That is why we announced a staged programme. The hon. Gentleman referred to a two-year programme. He need have no worries that what he said might happen will happen, because that would not be sound management.
I do not accept that ownership by private enterprise will diminish the quality of management or the local environment. We have only to see the derelict—that is, in environmental terms—acres of rebuilt East London or parts of Liverpool to appreciate the quality of management and the quality of the environment built by local Socialist councils. All that they have done is to satisfy the local aspirations of the local Tammany Halls. Labour Members are wrong to say that private ownership of the new towns' assets will produce a lesser quality of life. I do not accept that.
I do not draw my comparisons from a narrow range of areas. I look at all areas. In a substantial number of areas, local government—I fear, mainly under the control of the Labour Party—has nothing to be proud of in what it has given to its citizens at vast expense.
§ Mr. Finsberg
I have been to Greenwich, and there are certain comments that I could make about parts of the high-rise development in Greenwich. 1907 However, I shall accept the hon. Gentleman's invitation to visit Greenwich. I shall do so with the greatest of pleasure. He might provide me with a " pair " on that suitable occasion.
§ Mr. Newens
Does the Minister regard estate management in any of the new towns as being of the retrograde variety that he has described as existing under Labour authorities? The hon. Gentleman would perhaps like to comment on my own town.
§ Mr. Finsberg
My criticisms were not directed at the management of the industrial estates of new towns, which, as I have already said, are extremely good. It is only a pity that so many of those new towns, packed in too many cases with nominees of the Labour Party—
§ Mr. Finsberg
—did not manage to teach their friends in local government what was happening. The hon. Gentleman says " Rubbish ". He might reflect on how many non-Labour members there were of the Washington, Aycliffe and Peterlee boards when he left office. He can then decide whether my remarks are rubbish.
§ Mr. Barnett
That is most unjust. The hon. Gentleman knows that appointments to new town development corporations were made in the light of the political complexion of the local authorities in the area. He may say what he likes about new town corporations in the North-East. He had better look at Bracknell and other local authorities where Conservative councillors predominate and he will find that it is totally untrue to suggest that the Labour Government packed new town development corporations with members of their own political persuasion.
§ Mr. Finsberg
I do not withdraw a word.
The hon. Gentleman raised the question of freehold and leasehold. There is a problem over freehold and leasehold. Sensible estate management, in general, says that there is little purpose in holding on to a freehold. If a tenant has a long lease, it is, in general, wiser to realise the asset and to allow the tenant to become an owner.
1908 I am not privy to the advice or papers given to the Labour Government. The only reason, I guess, why advice might have been given to them to obtain the freehold is the knowledge that the policy of the Labour Party was to keep its hands on every bit of property that it could and to give no opportunity to individuals, whether council tenants or industrialists, to buy their own freeholds. I cannot be certain; I do not have the documents. I merely have to draw the conclusion from what I know of Labour Party policy.
I am glad that the Government have satisfied my hon. Friend the Member for Basildon (Mr. Proctor) about his excellent town centre. I hope that, on completion, it will be the credit that I am sure it will be. I endorse his wise words about the new direction of housing needs, with greater emphasis on the elderly, the handicapped and single people. I do not believe that the problems mentioned by the hon. Member for Harlow will be nearly as widespread as he claimed.
We shall look at the important point about stamp duty. We would not wish to have anomalies that acted to the detriment of tenants. We are also looking at the point about Northern Ireland to see whether it can be met.
On houses with defects, we are encouraging development corporations, where people want to buy but where their present house is not satisfactory for sale, to offer an exchange for another house that is suitable for sale. From my knowledge of development corporations, I can say that they are actively accepting this point of view.
Neither side of the House goes back on its support for the principle of new towns. We on the Conservative side are planning for the 1980s and 1990s. We have left behind the 1940s and 1950s, with the many mistakes that both parties made in those days.
It is right that I should deal with the unanswered question of the hon. Member for Greenwich about the future of the Commission for the New Towns. The commission has responsibility for the management of the disposal of its existing assets and those of Harlow and Stevenage which are being taken over in the next few months. My right hon. Friend the Secretary of State has made it 1909 clear that our policy is to wind up the commission in due course, but we have as yet reached no decision on a date.
We are anxious that the new towns should become as much like other towns as possible. More than one chairman has said to me " I will know that we have been successful when people forget that this is a new town."
Our debate today, given your semi-blind eye, Mr. Deputy Speaker, and that of the previous occupant of the Chair, has been an opportunity for Parliament to review what is happening in new towns. I hope that most of us have managed to stick strictly to the financial aspect which is the central consideration today. Nobody listening to the debate could doubt that the balance of stock-taking shows that the new towns have made and are continuing to make a positive contribution to the country's well-being, with thousands of pleasant new homes, thousands of new jobs, an attractive environment in which to live and a major contribution towards economic growth. I hope that the House will therefore give the Bill its Third Reading.
§ Question put and agreed to.
§ Bill accordingly read the Third time and passed.