HC Deb 11 November 1980 vol 992 cc370-9

Lords amendment: No. 100, in page 97, line 20, leave out subsection (3).

Mr. Fox

I beg to move, That this House doth agree with the Lords in the said amendment.

Clause 114 enables the Secretary of State to direct a development corporation or the Commission for the New Towns to pay him a specified sum on a certain date. We expect the new towns to raise this money from the sale of industrial and commercial assets using the powers of disposal in clause 115.

Subsection (3) merely provided the simplest and most appropriate procedure for enforcing a direction in the unlikely event of a new town failing to comply. But another place, with its unerring eye for detail, took exception to the subsection. Some noble Lords denounced it as wicked and detrimental. I can assure the House that it had no such sinister intentions. But since it raised sufficient worries in another place to cause a majority to want to delete it, we are prepared to leave it out as we are satisfied that the Bill is workable without it.

Mr. Hattersley

Oh.

Mr. Fox

The right hon. Gentleman should not be surprised that we occasionally bow to votes, whether they be in the other place or here.

As I was saying, we are satisfied that the Bill is workable without subsection (3). The amendment does not, therefore, affect the basic policy of this part of the Bill, and I ask the House to agree to it.

Mr. John Evans (Newton)

Contrary to what the Minister said, this was a substantial defeat for the Government in the other place. This was a classic example of the other place performing a noble service in the cause of good local government and democracy. The Government are accepting the defeat because they have to. They have no alternative.

I wonder whether my right hon. and hon. Friends have adopted the right strategy. My view—and I accept that I have not given it all that much thought—is that we should oppose the Lords amendment and encourage the Government to vote against us so that this could go back to the Lords, because in the limited time that is available the chances are that not only the clause—which is iniquitous and disgraceful—would disappear but the whole damned Bill too. Some important points were made in the other place, and I shall refer to them in a moment.

What affect will the amendment have on the clause? Under subsection (1) the Secretary of State is taking powers to direct a development corporation or the Commission for the New Towns to pay to him on the date specified in the direction, such sum as is so specified. Already in this financial year the Secretary of State has specified that the new towns shall pay to him a sum of £100 million. To this day the right hon. Gentleman has no authority to demand that sum from them. Indeed, the chances are that in some areas the right hon. Gentleman has acted illegally. I challenge him to deny that he acted illegally in his direction to the new towns over the payment of £100 million, and we know that he has directed them that in the next financial year they must pay to him £200 million.

The right hon. Gentleman does not have the authority to do that. I submit to the House that once the measure is on the statute books he will not have the power to force the commission or the corporations to pay to him anything like £200 million. We know that under subsection (1) he will have the power to direct a development corporation or the commission to pay to him certain sums of money, but with the deletion of subsection (3) he has no power to do so. In that respect, there are certain elements in the clause that should be considered carefully.

In the interesting debate in the other place my noble Friend Baroness Denington put her finger on the issues facing democratic government in this country. We know that the record of the Secretary of State on the question of democracy is appalling, but even he has succeeded in over-reaching himself on this occasion. It is worth repeating to the House what my noble Friend said when referring to what the right hon. Gentleman has said to the meeting of the chairmen of new towns, which he convened: But I have been through this story, and to me it is a very distressing story"—[Official Report, House of Lords, 14 October 1980, Vol. 413, c. 1140.]

Mr. Deputy Speaker

Order. Unless the hon. Member is quoting from the speech of a Minister in the other place, he must paraphrase and not read the extract.

Mr. Evans

I am grateful to you, Mr. Deputy Speaker, for correcting me. My noble Friend referred to the diktat of the Secretary of State at the meeting that he convened of the chairmen of the new towns, when he ordered them to hand over £100 million of their assets to him. It was said that he had merely ordered them to hand over the assets. My noble Friend said that when the development corporation of which she was chairman had attempted to carry out the diktat of the Secretary of State and discussions took place with those responsible for the GLC pension fund about taking over certain of its town centre assets, it was told by the solicitor acting for the GLC that it was not possible to proceed with the agreement between the GLC pension fund and the development corporation because it was illegal. That brought the proceedings to a stop.

11.45 pm

The Secretary of State, arrogantly as usual, has assumed powers that he does not possess. He has overridden the democratic process with the arrogance that is typical of him. He was not prepared to wait until the democratic processes had taken their course.

The Minister says that the deletion of subsection (3) does not mean a great deal. I submit that it will mean a very great deal. My advice to the development corporations, especially the Warrington new town development corporation—a great deal of its area is in my constituency—is completely to ignore the Secretary of State's direction because he does not have the power to enforce it.

I know that subsection (4) states that the debts shall carry interest. Theoretically the interest could mount up if there is a refusal to obey the right hon. Gentleman's diktat to hand over the assets to him or to sell valuable assets that the Warrington new town development corporation and other corporations possess to meet his demands. I advise the corporations that the next Labour Government, which cannot be too long delayed, will totally ignore the iniquitous debts that the right hon. Gentleman will cause to accumulate.

The right hon. Gentleman is contemplating creating the Tory rip-off of the century by causing the new towns to hand over their assets to him. He is sacking the majority of Socialist nominees on new town boards and putting in Tory hacks to do his dirty work. We shall examine the new appointments that are shortly to be made. The policy of successive Governments has been to maintain a political balance on the new town boards. If that balance is maintained as in the past, the Socialist nominees, bearing in mind that subsection (3) has been deleted by Parliament, will ignore the right hon. Gentleman's diktat issued in the course of attempting to hive off their assets. His demands are not based on good business practice or common sense, nor are they in the interests of the corporations, which through successive Governments have done a magnificent job in managing their assets on behalf of ratepayers and taxpayers.

No one but a lunatic—there appear to be lunatics on the Government Front Bench at present—would be prepared in the present climate to instruct new town corporations to put on the market many millions of pounds worth of valuable assets—

Mr. Deputy Speaker

Order. The hon. Member is going wide of the terms of the debate. The House is discussing whether it should leave out subsection (3). That is all that we are concerned about in the amendment.

Mr. Evans

I am saying, Mr. Deputy Speaker, that the deletion of subsection (3) changes fundamentally the nature of clause 114. The Minister, in his brief and cursory introduction of the amendment, did not face the implications of the Government's defeat in another place. Clause 114 has been fundamentally changed. The Secretary of State is taking powers to direct the development corporations and the commission to pay assets to him. He does not have to stipulate how he has arrived at his decision. He merely makes demands. If subsection (3) is deleted, he will not be able to enforce his decision. That completely changes clause 114.

The Labour Party recognises that the Government have been defeated. How do the Government propose to enforce the Secretary of State's diktats. The Secretary of State may try to instruct the new town development corporations or the commission to hand over assets despite the fact that he has no power to do so. How will he enforce those demands? That is an extremely important point. It is nice to see that the democratic process can work.

It was interesting to be told that this amendment was not fundamental. I have shown that it is fundamental. I do not wish to go wider than that, Mr. Deputy Speaker, as you might rule me out of order. On report, we pointed out that many new towns in which there was a mixture of new town capital and private capital would experience difficulties. The Minister will recall that in Warrington—

Mr. Deputy Speaker

Order. This is a debate on whether subsection (3) should be deleted. The amendment would remove the Minister's power to claim the money. The hon. Gentleman should direct his mind to that.

Mr. Evans

I accept that. May I again point out that as a result of the deletion [HON. MEMBERS: "No".] I shall gladly accept whatever directions you, Mr. Deputy Speaker, may give me. If any Conservative Member thinks that I shall accept directions that a Tory tries to give me, he will find he has a difficult fight on his hands. Under no circumstances will I accept any direction from a Conservative Member. Of course, Mr. Deputy Speaker, I shall accept your direction.

This provision is of fundamental importance to thousands of my constituents. They will see the Government rip off something that they have built up over the years. Far from being an abuse of the House, it would be a negation of my responsibilities as a Member of Parliament if I did not raise this basic issue. Clause 114 is a rip-off.

Mr. Ronald W. Brown

My hon. Friend is on the right road and he should continue the argument. Once subsection (3) has been deleted, there will be no definition of "the debt" in subsection (4). Subsection (3) determines the "simple contract debt". Once that is removed, the word "debt" has no meaning. Therefore, my hon. Friend is making a good point and should continue.

Mr. Evans

I am grateful to my hon. Friend. With his usual perspicacity he has put his finger on the important point. My hon. Friend has made a better point in a few brief words than I could have made in more words. I hone that the Minister will not try to cover up the Government's defeat, or the humiliation that the Secretary of State has had to suffer once again as a result of his arrogant arrogation of powers that he does not possess. [hon. Members: "Rubbish".] "Arrogant" is the correct word to use when describing the Secretary of State.

Mr. Graham

The House will be grateful to my hon. Friend the Member for Newton (Mr. Evans). He speaks from experience of new towns and knows the effect that the measure will have on his constituents. Conservative Members are entitled to disagree with his views. However, the Government constantly seek to have it both ways. At all stages of the Bill the Government said that subsection (3) was vital. Attempts to remove it were resisted time after time. In the other place that subsection was rejected and the Government recognised that they had a fight on their hands. They also at that time lost another amendment concerning new towns. The Government had to make a political decision. It was not a democratic decision. They had to calculate finely their chances of getting away with as much as they could.

The Minister now says that the Bill can work without subsection (3). Why, then, was it put in the Bill in the first place? Is anything that is defeated in the other place ipso facto seen by the Government as superfluous to their requirements? They should have the grace to acknowledge, as has been the case more than once today, that they have been beaten by argument. On political reflection they have decided that discretion is the better part of valour. The Government have been wise to acknowledge their defeat in another place.

My hon. Friend is right. Before we approve an amendment from another place, we are entitled to view the disembowelled clause. It is proper to reflect on the Bill and clause, as amended.

We shall continue to maintain, whatever arithmetic or argument may be put forward by the Government, that such measures are part of a fundamental attack by the Government on the concept of the future funding of capital and development of the new towns. The noble Lords share that view. The Government received the greatest mauling over this part of the Bill in another place. What has been the Government's change in attitude in their concept of towns? Merely a willingness to consult a little more with some of those affected.

In another place it is possible even on Third Reading to move amendments. Lord Mishcon, as late as last week, attempted to introduce an amendment to the clause that would have given a veneer of rationality to the Governments protestations that they have the best interests of new towns at heart. He merely tried to ensure that whenever the Government activate clause 114 and demand £ 100 million or £200 million, before the Secretary of State asks for that money he should have due regard to the planned programme of development of the new towns. Even that persuasive advocate was unable to convince Lord Bellwin. The amendment would have given a veneer of respectability to the charade that the Government are advancing as a justification for denuding new towns of future capital.

We have not argued that it is wrong to sell assets in new towns and to use the money for other new town purposes. The Government maintained in Committee that there were better uses of public money, on occasions, than spending it in new towns. I remember the Minister saving that there would be nothing wrong in the money raised from the sale of new town assets coming into the public exchequer and being recycled into, for example, the purchase of kidney machines. We certainly see a need for increasing public expenditure on the provision of kidney machines, but we fail to see the argument for placing the future of new towns in jeopardy.

12 midnight.

I want the Under-Secretary, in his reply, to pay special attention to the growing concern and anxiety in the new towns. He and the Government have failed miserably to have accepted by the new town corporations and the commision the basis on which the Secretary of State has decided to milk new towns of their money. I want the Under-Secretary to refer particularly to the future. We know that what the Government want to do in 1980 and 1981 could be widened in future.

I want the hon. Gentleman to look at the future of, for instance, the third-generation new towns. There is great concern about when the Secretary of State is likely to turn his avaricious eyes to the third-generation towns. The Government must understand that the maturity aspect in the development of assets is important. It is criminal folly to sell an asset before the full realisation of the value and benefit of that asset has been enjoyed by the new town.

Let me give examples from a third-generation new town to illustrate the need to allow assets to mature for a number of years before the Secretary of State should even consider ordering that they should be sold. In the new town that I have in mind, a 10,000 sq ft advance factory site was let in 1971 at 50p per sq ft per year. By 1976, the rent had increased to £1 and in 1980 it was £1.80. The yearly rental for a one-acre industrial site was £1,000 in 1971. By 1976 it was £2,000 and this year it is £4,000. In the same new town, city centre offices were let in 1971 at a square foot yearly rental of £1.25. In 1976, the rent was £2.75 and in 1980 it is £4.50.

Those examples illustrate that it is important that the Minister takes this last opportunity to reassure those who have an interest in new towns—professional or otherwise—that it is not his intention progressively to turn on the third-generation new towns and make them pay up as the others will have to. The cases that I have outlined illustrate the wisdom of allowing the benefits of public investment to mature and that, as Labour Members have said time and again, it is folly needlessly to denude the new towns of the assets that they have built up.

Dr. Brian Mawhinney (Peterborough)

I represent a third-generation new town. I have listened carefully to the speeches of the hon. Members for Newton (Mr. Evans) and for Edmonton (Mr. Graham). My constituents would have great difficulty in recognising themselves in those speeches. They do not share the anxiety expressed by those hon. Members. The claims about the lurid effects of the amendment are hard to understand. The effect on my constituents must be the same, but they do not have the same anxiety. My local development corporation would not dream of refusing to comply with a direction from the Secretary of State to save money. The Opposition's arguments are specious.

Mr. Fox

With the permission of the House, I shall reply.

The House will not expect me to make a speech similar to that which I made on report when I defended our new towns policy. I did it so effectively that the right hon. Member for Birmingham, Spark-brook (Mr. Hattersley), who accused the Secretary of State of behaving irresponsibly and illegally, disappeared without trace. On that occasion I showed that all that we have done is within the law. In our determination to reduce the public sector borrowing requirement the Secretary of State asked the new towns to reduce their net call on the Exchequer by about £100 million. They adhered to that request.

The hon. Member for Newton (Mr. Evans) should examine his new town carefully. Warrington has agreed to the request to realise some assets and is doing well in selling them. In case he thinks that we have taken over the development corporation, I remind him that since we came to power we have not had the opportunity to appoint many new people. I know of no Conservative additions to that corporation. His own friends are accepting our sensible policy.

The hon. Member for Edmonton (Mr. Graham) suggested that we had suffered a massive defeat in the House of Lords. I must disillusion him—and that is a pity because he is such a nice chap. I should like him to leave with some satisfaction. The amendment makes it that much harder for us to enforce repayments. It is a legal matter, and we can recover, as we can from anyone else. The amendment does not defeat our intention. It shows how sensible we can be. When we know that we can achieve our aim we are always happy to accept alternative methods.

Mr. John Evans

How will the Secretary of State recover an ordered sum from a new town corporation if it refuses to pay it?

Mr. Fox

That is a hypothetical question. No new town corporation would get in such a situation. Such bodies have legal obligations, and it would be possible for my Department to recover whatever money necessary under the law. It would be a simple matter of enforcement.

Question put and agreed to.

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