Inner Cities

HC Deb 09 December 1981 vol 14 cc865-74 3.33 pm

The Secretary of State for the Environment (Mr. Michael Heseltine)

The Government recognise that no single announcement can be the measure of the inner city and urban problem, but it is important to take those decisions that we can as soon as practical.

Next week my right hon. Friend the Minister for Local Government and Environmental Services will chair a major conference for the European Campaign for Urban Renaissance which will seek further ways of encouraging the voluntary sector in the inner cities.

I must now take important decisions about the allocation of my departmental resources to the urban areas and inner cities next year. Public expenditure is in many cases essential, but it is not, and of itself cannot be, the whole answer. As important is the need to open a range of opportunities for private involvement and investment, which will add significantly to the public resources in urban areas and will widen the choice in many areas for those living and investing there. The urban areas, and especially the inner cities, have a concentration of unemployment and a deterioration of environment that argue for a particular stimulus for the construction industry and capital programmes.

It is against that background that I have reached certain conclusions about the allocation of my departmental programmes for next year. First, the Government believe that the derelict land programme should play a bigger role in urban policy. Derelict land reclaimed at public expense can lead to development by the private sector that adds very substantial private expenditure to the basic public expenditure. At the moment very little reclaimed land is developed. Next year I intend to increase the derelict land programme from £40 million to £45 million.

In allocating the uncommitted part of the programme I shall have particular regard to bids from local authorities in conjunction with the construction industry demonstrating the use to which the reclaimed land is to be put. I shall look especially favourably on those joint public-private sector schemes drawn from the land registers that offer the greatest private sector enhancement for every pound of public expenditure. I shall especially look to schemes that lead to housing, industrial, commercial, sporting and recreational opportunities. I shall invite representatives of the local authorities and the construction industry to meet me next week to establish the procedures whereby I receive special bids for joint schemes by the end of January.

Secondly, we shall enable the two urban development corporations of London and Merseyside to undertake substantially more projects in 1982–83 than in the present year. I expect to authorise some £50 million worth of schemes compared with the £15 million that they expect to spend on works this year. The House will realise that this, too, will attract much greater sums of private investment to enhance the effort that the public sector is making.

Finally, we have taken a important decision about resources for the urban programme in 1982–83. The local authorities in partnership and programme areas were asked to draw up programmes on a basis that would have implied a total of £215 million for the urban programme as a whole. I am glad to say that we have been able to improve substantially on that figure and will increase the total available by up to £55 million to some £270 million, including a special provision of £5 million additional stimulus to low-cost home ownership.

My announcements today must be seen in the context of an urban problem that will demand our continuing attention. They do not represent a whole response, but they make an important contribution.

Mr. Gerald Kaufman (Manchester, Ardwick)

As we shall be debating these matters at length tomorrow, I shall confine myself today to questions seeking clarification of certain matters.

First, can the Secretary of State say on what annual price basis the sums of money that he has mentioned are posited? Secondly, can he say whether the figure of £270 million is inclusive or exclusive of the two docklands urban development corporations? If it is inclusive, can he provide a comparison on a constant price basis with the £224 million that he announced last February for the whole urban programme at 1980 survey prices? If it is exclusive, can he provide a constant price basis comparison with the £158 million that he announced for the urban programme, exclusive of docklands?

Thirdly, will the Secretary of State give further details of the matters that he announced at Question Time last Wednesday, when he said that he had approved new urban programme projects in Lambeth, Hackney and Tower Hamlets? We wish to have details of those. Fourthly, can he say what decision he has reached about reimbursement to the six local authorities that were successful against him in the October court judgment on the £8,983,000 that he unlawfully withheld from them?

Fifthly, does the Secretary of State intend to reimburse the urban programme grant that he withheld from Hackney, Islington and Lambeth in September 1980? Sixthly, will he now abandon his attention of holding back £44,666,000 in rate support grant from 17 partnership and programme authorities as a penalty for alleged overspending?

Mr. Heseltine

I am holding consultations with the London boroughs involved in the recent court action very much in accordance with the views expressed in the action. Details of further schemes for expenditure approval in the three London boroughs is for discussion among the boroughs, and I believe that it is now taking place.

I shall write to the hon. Gentleman to add to what I say at the Dispatch Box so that he may have a clearer picture, but I can say that the figures that I gave were on a cash basis. The £270 million is inclusive of the urban development corporation's expenditure. To break down the figures to some extent, I can tell the right hon. Gentleman that it is anticipated that next year's urban expenditure programme, on a constant price basis, will be at the highest level ever. The figure for the urban programme for 1979–80 at November 1979 constant prices was £179 million. It is expected to rise to £190 million in 1982–83 on the same money base.

Mr. Kaufman

Can the right hon. Gentleman help me a little more? The calculations that he makes are not clear. He has clarified what I fear he sought not to clarify in his statement—the £270 million is inclusive of the two urban docklands development corporations.

Mr. Heseltine

I should have said that it is exclusive and in addition to the £270 million.

Mr. Kaufman

In February, the right hon. Gentleman announced an allocation of £158 million for 1981–82, exclusive of docklands. Is the £158 million at 1980 survey prices directly comparable with the £270 million which he has now announced for the urban programme? If so, can he revalorise it so that the two figures are directly comparable?

Secondly, does the right hon. Gentleman intend to proceed with holding back the £44,666,000 from the 17 programme and partnership authorities? If so, it would largely cancel out any increase that he has announced.

Mr. Heseltine

I am not making a statement today about the decision on holdback on the current overspend of local government. I have made my position clear. I believe that the over-expenditure on current account is one reason why we have seen significant reductions on capital account. It would not be right to reduce the pressure to secure reductions in current expenditure to facilitate the increase in capital expenditure. The right hon. Gentleman is familiar with the damage done previously as a consequence of such a procedure. The capital programme of his own metropolitan district of Manchester of £144 million in 1974–75 was reduced to £100 million under the Labour Government. I am trying to bring about a shift in favour of capital expenditure to reverse the trend.

I shall write to the right hon. Gentleman about his second point, as the figures are in different money bases and must be seen in comparative terms, but I can tell him that what I announced is a significant increase in real terms. The £158 million for 1981–82 is in November 1979 prices and compares with the equivalent of £190 million for the 1982–3 announcement, but at November prices the £190 million is the equivalent of the £270 million in cash, which I referred to in the statement.

Several Hon. Members

rose—

Mr. Speaker

Order. I remind the House that these matters are to be debated tomorrow and that we have two important and abbreviated debates to follow, involving eight Front Bench speeches. Therefore, I shall allow questions to run until 4.5 pm.

Mr. Anthony Steen (Liverpool, Wavertree)

Will my right hon. Friend accept that the whole House—apart from the right hon. Member for Manchester, Ardwick (Mr. Kaufman)—welcomes what is one of the most important statements for some time concerning the revitalisation of city areas? Will he confirm that there will be no loss of local authority automony, and that the funds for the reclamation and revitalisation of land will not be confined to inner city areas but can be used for outer areas, where the majority of the vacant, dormant and derelict land lies?

Mr. Heseltine

I am grateful to my hon. Friend for his helpful remarks. There is no intention to reduce local authority autonomy. Indeed, I believe that local authorities will benefit from the opportunities of the enhanced resources on capital account. Outer city areas will be very much considered in the derelict land scheme.

Mr. George Cunningham (Islington, South and Finsbury)

Does the Secretary of State remember that we were able to persuade him that increased spending by local authorities should not be counted when working out whether a local authority had fallen into the penalty area on overspending? In view of his statement, can he guarantee that the arrangement will continue this year?

Mr. Heseltine

If the hon. Gentleman would be good enough to wait until we come to the rate support grant settlement, he will find that all those matters will be taken into account. We shall have to weigh the matter particularly against the changed bases for the Grant related expenditure assessment formula, which in the main, if I may say without anticipating the settlement, are likely to have a favourable impact on inner city areas.

Mr. David Alton (Liverpool, Edge Hill)

How can the Secretary of State talk about increased capital expenditure opportunities for local authorities when in Liverpool over the past two years there has been a £24½ million reduction in capital resources, through a 25 per cent. reduction in the capital allocation of the housing revenue account, and a £11½million reduction in the RSG settlement? Is he not merely giving us crumbs while taking away the meal? What is his answer to the allegation of the leader of the Liverpool city council that over the past five years, because of reductions in capital expenditure, Liverpool has lost 11,000 jobs?

Mr. Heseltine

I am in constant touch with the leader of the Liverpool city council and I hear a totally different message from him about the work that I am doing. I am sure that the people of Merseyside will realise that what I have announced today will be of considerable benefit to them.

Mr. John Stokes (Halesowen and Stourbridge)

Will my right hon. Friend give a categorical assurance that the large sums of money that he announced are not Danegeld to appease rioting areas but are soundly based to assist the recovery of the whole of the United Kingdom?

Mr. Heseltine

My hon. Friend will realise that, despite the real stresses in urban areas, the riots were severely limited. What I have announced today will benefit many parts of the country where there were no riots.

Mr. Robert Parry (Liverpool, Scotland Exchange)

Is the right hon. Gentleman aware that the Tory-Liberal coalition on the Liverpool city council is not building any public housing in the inner areas, in spite of the long waiting list and the demolition of pre-war tenement blocks? Will he speak to the council about that fact?

Mr. Heseltine

I cannot compete with the hon. Gentleman's knowledge of his area, but he will be aware that to solve the housing problem in Liverpool requires the restoration and rehabilitation of the large number of empty and derelict houses and not the building of more houses.

Mr. John Cartwright (Woolwich, East)

Is the Secretary of State aware that many of us welcome his acceptance that the problems of the inner cities can be tackled effectively only by a partnership between public and private investment? Does he accept that the extra resources that he announced today will not have the dramatic impact that is needed, particularly when they are set off against cuts in the rate support grant? What will he do to tackle the problem of the appalling quality of life on many inner city housing estates and provide more jobs in inner cities, particularly for the young unemployed?

Mr. Heseltine

I am grateful to the hon. Gentleman for recognising what I believe every serious observer of the position understands—that only with the combined resources of the public and private sector shall we bring about a new approach in the urban areas. I wonder whether the hon. Gentleman has fully understood the gearing effects of my proposals. I hope that the substantial sums of money that are being made available will attract additional sums from the private sector. I believe that there will be a significant impact on job creation in the area, but to have gone forward at a significantly different speed from the one that I announced today would not have measured up to the difficulty of making decisions on the precise schemes that we should follow.

Mr. Fred Silvester (Manchester, Withington)

I congratulate my hon. Friend on making another contribution to the repair of the inner cities and particularly on the way in which he has done it. He spoke about capital and the involvement of the construction industry, and referred to special bids being made by January. Are we putting a time limit on that which would make it difficult to get the full benefit from such a scheme?

Mr. Heseltine

I have had to consider that carefully. It is a question of balancing the opportunities to prepare in detail the schemes with the need to bring an urgent injection of help and hope to those areas. I believe that many authorities already have schemes and, working quickly in conjunction with the private sector, will be able to put forward proposals. It is right, therefore, to err on the side of moving quickly, although it is open to me to modify the timetable if necessary.

Mr. Charles R. Morris (Manchester, Openshaw)

Is the Secretary of State aware that the major feature of Britain's inner city problem is the question of the young jobless? Is he further aware that in Greater Manchester alone 68,000 young people are unemployed? In the allocation of the funds, will he encourage local authorities to give priority to projects for the young unemployed?

Mr. Heseltine

I share the right hon. Gentleman's view. On Merseyside, I have been trying to put precisely that emphasis on my proposals. I hope to make additional announcements about how we are experimenting precisely to find opportunities of that sort. One experiment in which the House may be interested, and which I hope shortly to he able to confirm, is that we should have a higher ratio of apprentices to craftsmen on some of the schemes that we are trying to pioneer for building new houses.

Mr. Anthony Beaumont-Dark (Birmingham, Selly Oak)

I join other hon. Members in welcoming my right hon. Friend's statement. We are particularly grateful for the fact that he should be showing real and abiding interest in urban problems. Are we to understand that the £35 million extra for London and Merseyside is the total and that the extra £55 million is therefore to go to the other deprived areas? Is my right hon. Friend aware that the fact that Birmingham did not involve itself in the unruly elements does not mean that there is not a great deal of work to be done there? Will he take up the point made by my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen) that the outer city areas have just as many problems and could be helped that much quicker to make the cities really worth living in?

Mr. Heseltine

Of course, I want to ensure that the West Midlands has an appropriate share of the funds that are available because that area is having a difficult time at present. I have tried to make it clear what funds are available to the urban programme at large, as opposed to the urban development corporations. I want to ensure, when I consider the bids under the derelict land schemes, that the outer areas are considered as important as some of the inner areas.

Mr. John Maxton (Glasgow, Cathcart)

Is the Secretary of State aware that, although we have had no riots in any cities in Scotland, the problems of industrial decline and social deprivation are just as great, certainly in the city of Glasgow? Will the right hon. Gentleman say whether we shall have an equivalent statement from the Secretary of State for Scotland about the measures that he intends to take to tackle the problems of inner cities in Scotland?

Mr. Heseltine

All territorial Secretaries of State are grappling with their own regional and urban problems. I have been privileged to send my officials to Glasgow to see what is happening with the GEAR scheme, and I hope to go there myself. My right hon. Friend the Secretary of State for Scotland is in the Chamber and doubtless has heard the hon. Gentleman's comments. I am sure that, in the fullness of time, he will want to draw to the attention of the House the excellent work that he is already doing in Scotland.

Mr. David Gilroy Bevan (Birmingham, Yardley)

I thank my right hon. Friend for the help that he has announced, which is desperately needed by inner cities such as Birmingham, where it is possibly more desperately needed than in other areas. I thank him also for promoting active schemes between the private sector and local government. Without pre-empting his conversations next week, will he be more precise about how he will utilise the private sector to help statutory owner schemes?

Mr. Heseltine

I sympathise with my hon. Friend's interest in that aspect of my announcement. Although I shall take a flexible attitude, depending on the response, I have it in mind that local authorities that are able to show that they have derelict land that can be cleared with the aid of derelict land grant shall be given preference if they say that they can then make use of the land for building or recreational purposes, which will give a private sector enhancement to the public sector finance that I am prepared to provide.

Mr. Clinton Davis (Hackney, Central)

Does the Secretary of State agree with the Commission for Racial Equality which has argued that effective measures to tackle racial disadvantage have been frustrated by the shift of resources from the inner cities for which he has been responsible? What will he do to deal with the inequalities that he created by the shift in policy on the rate support grant, which is now clearly to be seen to the prejudice of inner city areas, particularly in an area such as mine in Hackney?

Mr. Heseltine

The shift of resources that I made was largely from London to the provinces. Within that shift there was significant proportionate gain to some of the inner city areas. That was necessary in order to deal with the problems that had been created by the Labour Government, who made such a major shift from the provincial areas, including the metropolitan provincial areas, to London. The biggest shift took place because some London authorities very much overspent their targets and therefore, under the block grant mechanism, voluntarily went through a process where they accentuated the shift away from London. As part of the process of trying to regenerate capital investment in this country, we have to pull back on current consumption.

Mr. Michael Latham (Melton)

Is my right hon. Friend aware that one reason why this statement will be particularly warmly welcomed is that it will bring new work and new hope to the sorely stricken construction industry? Has he any intention of using the funds for fast-moving schemes, such as improvement schemes and land reclamation, because the problem is getting people back to work in the industry?

Mr. Heseltine

I am grateful to my hon. Friend, who knows a great deal more than I do about the construction industry. I want to keep an open mind as to the schemes that I select. Having "put on the table" the sum of money that is available, I would be better advised to wait for the response of the construction industry and the leaders of local government about how the money should be spent. I shall be calling urgently for meetings in order to get that under way.

Mr. Kevin McNamara (Kingston upon Hull, Central)

Will the right hon. Gentleman say what sort of regional spread he envisages? Will he say how much will go to Merseyside, Humberside, the city of Hull, and so on, so that we may have some idea of whether our local councils should spend time preparing schemes?

Mr. Heseltine

I do not at present have in mind a regional spread. I am interested in the quality of the schemes and the work that can flow from them. I believe that local authorities, particularly the local authorities in the hon. Gentleman's area, will react quickly to ensure that they get a proper share of the available finance.

Mr. Den Dover (Chorley)

Is my right hon. Friend aware that the private sector will greatly welcome his further involvement of it in the rebuilding of inner cities? Does he accept that many of us welcome the fact that he is using public expenditure in the most effective and efficient way—by pump priming?

Mr. Heseltine

I am grateful to my hon. Friend. It is necessary to take every advantage that we can of the incremental expenditure from the private sector. I am aware that many local authorities have substantial capital receipts at their disposal which, under the new regimes, they are free to spend on capital programmes. They are not fully utilising those receipts.

Mr. Allan Roberts (Bootle)

Does the Secretary of State accept that everyone on Merseyside, other than the hon. Member for Liverpool, Wavertree (Mr. Steen), will consider his announcement as being inadequate to deal with the problems of Merseyside? How much of the £50 million being allocated to the urban development corporations will be spent on Merseyside? Does the right hon. Gentleman accept that there is a need not to distribute the rate support grant, which has already been greatly reduced by the Chancellor of the Exchequer, in such a way that inner city areas such as Merseyside suffer once again?

Mr. Heseltine

I am sure that the hon. Gentleman has a meaningful dialogue with some people on Merseyside, but my experience shows that there is a real welcome for what I have been trying to do on Merseyside. It is curious that the hon. Gentleman has failed to notice that. It is difficult to allocate money to the UDC on Merseyside and then spend it in another part of the country.

Mr. John Sever (Birmingham, Ladywood)

Will the Secretary of State bear in mind that the money he is prepared to allocate to Birmingham will be well spent? There is no shortage of schemes available to use the money. Does he recognise that the regeneration that he is looking for in such places as Ladywood, in the centre of Birmingham, will come about only when much greater Government attention is given to the problems of inner cities and far greater resources are made available? May we look at today's statement as being the forerunner of many others?

Mr. Heseltine

I agree that money spent in Birmingham under the schemes will be well spent. The response of the local people will be typical of the determination to help themselves which characterises many people in the West Midlands. I very much sympathise with that view. I understand the need to continue to exert pressure and to help the inner cities—provided the hon. Gentleman realises that that means public and private help in partnership.

Mr. Jack Straw (Blackburn)

Will the Secretary of State confirm that the additional resources for land clearance will be available to the designated inner urban areas such as Blackburn? Is he aware that much of the problem of unused land in inner urban areas arises from the obliteration of the public housing programme, which has not been, and cannot be, met by the private sector? Are there any proposals to increase the allocation of funds to the public housing programme? Does he accept the truth—however unpalatable—that, in the words of his own minute to the Prime Minister, it took a riot to make the Government change their policy?

Mr. Heseltine

The whole House realises that it serves no purpose to pretend that the inner city problem grew up under this Government. The decline throughout the inner cities is long standing. Local authority capital expenditure was halved by the Labour Government, which must be remembered when attempting to apportion blame. Let us remove ourselves from trying to apportion blame. The derelict land programme can be considered for the area represented by the hon. Gentleman. I hope that it will make an appropriate bid.

The hon. Gentleman referred to the decline of public housing, which I have always been the first to recognise. However, that was continuing in a straight line downwards under the Labour Government, and the capital programmes were substantially reduced by them after 1975—as the hon. Gentleman and the right hon. Member for Manchester, Ardwick (Mr. Kaufman) know. I greatly deplore the fact that the right hon. Gentleman is doing his best—although not an effective best—to prevent new rental accommodation from being made available in the private sector. He is also doing his best to persuade people not to buy their council houses, which would provide cash for the improvement of other council houses.

I hope that the whole House will welcome the fact that our announcement about next year's capital programme for public sector housing is the first time for many years that a Government have looked for stabilisation rather than decline in the programme.

Mr. Peter Bottomley (Woolwich, West)

Does my right hon. Friend accept that additional capital investment in inner cities is greatly welcomed? Will he find some way whereby local authorities, if they keep within Government spending targets, may know in advance what capital sums are likely to be made available to them?

Mr. Heseltine

I very much agree with my hon. Friend's remarks. The more certainty and the longer period of notice that we can give in these matters, the more probable it is that we shall maintain the levels of expenditure. I am concerned because the local authority capital programmes appear to be significantly underspent. There are substantial resources that are not being spent but which could be spent under the freedom of the local government capital regimes. I hope that my hon. Friend will bear that in mind.

Mr. Guy Barnett (Greenwich)

Is the Secretary of State aware that I agree with his emphasis on co-operation between public and private enterprise in the redevelopment of inner city areas? He will know that one of the best examples of that is pursued by the London borough of Greenwich, where there has been highly successful co-operation. I hope that he will learn from that. The whole of his package appears to concentrate on physical construction projects. Does he not realise that one aspect of inner city redevelopment is investment in people? What funds will he make available to extend nursery, adult and further education and skill training, all of which are vital to the redevelopment of industry in inner city areas?

Mr. Heseltine

The hon. Gentleman, perhaps through my fault, may have misunderstood the implications of what I said in my statement. While I wish to see the weighting of the programmes swung more and more towards capital investment, it is within the powers of the urban programme to support current expenditure. Indeed, a substantial amount of current expenditure is being sustained on the urban programme.

I said in my statement that the Government attach great importance to encouraging the voluntary sector in many of the inner urban areas. That can be supported by the urban programme. It is a question of balance. It is not an absolute determination that only capital sums should be brought into play during the coming year. It is a question of swinging the balance and trying to make correct judgments.

Later—

Mr. Ken Eastham (Manchester, Blackley)

On a point of information, Mr. Speaker. As you know, it was announced on the television screens that there would be a statement on the inner cities. Some of us have a special interest in the subject, and we sat patiently in our places and attempted to catch your eye, Mr. Speaker. What is the purpose of notifying us that a statement is to be made if we cannot join in the questioning?

Mr. Speaker

The hon. Gentleman is not the only person who is disappointed. Many hon. Members will be disappointed later this evening when they fail to catch the eye of the Chair during the debate that has been delayed. If every hon. Member lets his indignation pour over me when he is not called while making what is not a genuine point of order, it will make life extremely difficult. When I was not called by the Chair, I used to go and have a cup of tea in the Tea Room.