New Towns Bill

HC Deb 26 January 1982 vol 16 cc757-803

Order for Second Reading read.

4.14 pm.

The Minister for Housing and Construction (Mr. John Stanley)

I beg to move, That the Bill be now read a Second time.

The Bill will increase the statutory borrowing limit for the new towns from its present level of £4, 000 million to £4, 500 million, with a provision for a further increase by affirmative order to £5, 000 million. The last two new town money Bills were in 1977 and 1980. The former, under the previous Government, increased the borrowing limit by £1, 000 million, and the most recent Bill in 1980 increased it by £750 million.

This Bill, of course, covers the five Scottish new towns and Cwmbran new town in Wales.

Although the 1980 Act increased the borrowing limit substantially—though not, as I have said, as much as the previous one in 1977—the past two years have seen substantial expenditure in the third generation towns, as well as some further development in the earlier towns, and in Scotland and Wales. Total gross development expenditure in this financial year and the last is well over £700 million.

We estimate that the aggregate net borrowing outstanding will reach the existing statutory limit of £4, 000 million in April or May of this year, but it could possibly be reached as early as mid-March, when towns need to borrow from the national loans fund to cover interest payments due from existing loans. We are, therefore, bringing the Bill forward now to avoid any interruption of the new town programme.

The extra £1, 000 million of borrowing proposed under the Bill is estimated to last approximately two years.

We are taking a more fundamental look at the present method of financing the new towns in the light of an assessment of their present and prospective ability to service their national loans fund borrowings out of their current revenue. Some of the new towns will not be able to do so for a great many years.

The very much higher interest rates that have been experienced since the early 1970s have led to large and long-lasting revenue deficits. It is questionable whether these deficits should continue to be financed by borrowings, which tend to enlarge the deficits still further. The Government will, of course, inform the House when they reach conclusions about the extent of the problem and any measures that are necessary, including, perhaps, the need for legislation. I expect to be able to report our conclusions to the House before the Summer Recess. Until this process is complete, the present method of financing from the national loans fund will continue, and the need for the Bill therefore remains.

I turn to the expenditure that will be made possible by the Bill. The Government's policy is to round off the existing new towns satisfactorily, making the maximum possible use of private sector finance. Public expenditure is now being concentrated on the inner cities. This means that the resources for the new towns will fall, while the urban programme, including provision for the two urban development corporations, is being increased. However, we recognise that in a number of towns, particularly the third generation ones, there are important developments that still need to be completed. Some are already very advanced. For example, the new shopping centre at Peterborough will open in March, and the new railway station at Milton Keynes will open in May. But there are other important developments still to come—for example, the further town centre developments at Telford and the continuing opening up of the industrial area at Corby.

Development corporations and the Commission for the New Towns will be seeking to make the maximum use of private finance, but some public funding will still be needed. It will be needed for essential main road schemes—for example, the eastern expressway at Runcorn and the western approach road at Basildon, which clearly cannot be privately financed. Public expenditure will be needed for other essential infrastructure—roads and sewerage in particular—to round off housing, industrial and commercial areas in so far as this infrastructure cannot be financed by developers themselves.

Public funding may also be required for a limited programme of advance factories in towns such as Washington and Corby, where the private sector may be unwilling to take the development risk, and where there is an imperative local employment need to have industrial space immediately available for incoming firms. The Bill is therefore essential to the orderly and satisfactory completion of the new town programme over the next few years.

Mr. Giles Radice (Chester-le-Street)

Will the Minister confirm that the new towns in the North—for example, Washington—have an important role to play in job creation? Will he say something about the future of those new towns, particularly the three that I am thinking about in the Northern region?

Mr. Stanley

As the hon. Gentleman will be aware, my right hon. Friend has announced the proposed dissolution dates for the three new towns in the North-East, but I certainly agree with him about the important contribution that is made to local employment. I shall return to that matter a little later.

The Government are anxious to keep public borrowing down. We have therefore been seeking to make the greatest practical use of private finance. A considerable volume of new town industrial and commercial development is now being financed by sale and leaseback and lease and leaseback agreements with the private sector. Since May 1979 more than £150 million worth of new town development activity has been financed in this way. Basildon, for example, has recently entered into an agreement with a major insurance company which will finance its new £50 million shopping centre.

Private development finance is also being drawn into the new towns through industrial, commercial and housing developments being wholly privately funded on land sold to the private sector. In the last financial year—1980–81—we estimate that by this means the new towns in England obtained £37 million worth of offices and shops, £38 million worth of industrial space and £100 million worth of housing—all financed entirely by the private sector. These figures are likely to be significantly higher in the current financial year.

A further major way in which private finance is supplementing public expenditure in the new towns is through the sale of completed assets. Quite apart from producing a welcome extension of private ownership in the new towns and giving many firms the opportunity to buy their freeholds, the disposals programme has made, and is making, an indispensable contribution to the continuation of the industrial, commercial and private housing programmes of the new towns.

Mr. John Evans (Newton)

How much cash flowing from the sale of the assets has been paid back to the Treasury?

Mr. Stanley

The receipts from the sale of assets have been used in part within the new towns; in part there has been some cash repayment to the Treasury. Any cash repayment to the Treasury has merely enabled the levels of borrowing and public expenditure for the new towns to be maintained at a higher level than would otherwise have been possible. As I have made clear, we could not have maintained the new towns programme at the level at which we have maintained it during the past three years without the special disposals programme. If the hon. Gentleman wishes to have a figure on that basis for the cash transfer I shall be glad to try to assist him if he puts down a question.

Mr. Evans

With respect, this is a Second Reading debate of a money Bill. It is a question that should be raised during the passage of the Bill. It is grossly unfair to suggest that I should put down a question on an important matter that arises on Second Reading.

Mr. Stanley

Perhaps the hon. Gentleman will let me continue. By the end of this financial year asset disposals will have realised getting on towards £300 million since the Government came to office. There is no question, as I said, that, without this sum, it would not have been possible to maintain new town development activity at the level achieved over the past three years. I can assure the House that we wish to see further public borrowing minimised, and that we shall continue to utilise private finance wherever this is practical.

I turn now to a number of new town issues which I know are of interest or concern to hon. Members and on which it might be helpful if I commented at this stage. My hon. Friend the Under-Secretary of State will, I know, try to deal with particular constituency points when he winds up.

First, there is the settlement of claims for defects in new town housing that has already been transferred. As the House knows, we commissioned the National Building Agency last March to assess and report to us on authorities' claims for grant towards the cost of remedying defects in transferred new town housing. These are, of course, claims under what is now section 51 of the New Towns Act 1981—formerly section 10 of the New Towns (Amendment) Act 1976. This work is well advanced and most of the necessary on-site survey work has already been carried out at all towns except Harlow. In Harlow the survey will start shortly. With the impending wind-up of the NBA, as I said in answer to an oral question from the hon. Member for Easington (Mr. Dormand) on 20 January, we have made arrangements for the contract to be completed by a private sector consultancy set up by former NBA staff. That will ensure the necessary continuity.

Mr. Stanley Newens (Harlow)

Will the Minister confirm that this will mean further delay in reaching a solution to a problem that has already caused considerable difficulties for the new towns?

Mr. Stanley

I am coming to that point.

Under the agreement that we signed with the consultancy last week the report is due to be submitted to us by the end of May. The NBA had in fact told us earlier that it would be unable to meet the original deadline of late April, so I hope that the House will agree with me that the new date for completion does not in practice mean a material slippage of the timetable. We are as anxious to reach conclusions on this long drawn-out matter as the councils concerned. We shall be wanting to put proposals to the local authorities as soon as we can after we hive received the report and have been able to evaluate it.

Some hon. Members have expressed concern about difficulty and delay experienced by new town industrial and commercial tenants who wish to purchase the freeholds, or possibly long leases, of the factories, offices or shops that they occupy. The Government's policy is clear. It is to give sitting tenants every reasonable opportunity to bid when a development corporation or the commission puts the premises that they are occupying on the market. We have issued detailed guidelines to the commission and the development corporations on this point, laying down in detail the way in which advance notice should be given to sitting tenants.

In some cases it may not be possible for tenants to buy individually, because their premises are part of a parade of shops or part of an industrial estate and when to sell properties individually would materially reduce the value of the shopping parade or the industrial estate as a whole. However, in this situation, new town coporations and the commission are ready to deal with the tenants as a group if they wish to buy the whole parade or estate as a consortium.

Mr. Newens

What price the small business man!

Mr. Stanley

We know of at least five cases where consortia negotiations are in train and one where a consortium purchase has been completed.

Apart from this, a large number of sitting tenants, individually, as a result of our disposal policy, have been able to buy the freehold of the premises that they have previously leased. Under the present Government more than 350 industrial and commercial tenants in the new towns have bought their freeholds or are in the process of doing so, thus strengthening the asset base of their own businesses and injecting a substantial element of private ownership into the new towns.

I now turn to the Commission for the New Towns. Some of my hon. Friends have expressed concern that the rate of withdrawal by the commission is not proceeding fast enough. I assure them that the commission is undertaking a major programme of sales, and will have made disposals worth approximately £100 million by the end of this financial year. That represents a substantial proportion of the total disposals of the new towns as a whole. The commission is also making progress in its negotiations for the transfer of its town centre management responsibilities and other residual assets and liabilities to the district councils concerned.

As part of its wind-down programme the commission has decided to close its local offices, except at Corby, and to concentrate at its London headquarters from next January. This will permit significant staff savings. I am satisfied that an orderly but continuous process of rentrenchment by the commission is taking place, and that this will be carried through.

A number of hon. Members—one has already raised the subject—will, I am sure, want to raise the question of the contribution that the new towns can make to mitigate unemployment. Without exception, every new town has generated significant employment opportunities in both the manufacturing and service sectors. The contribution that the new towns have made to creating job opportunities has invariably been not just of local but of regional significance.

During the first three years of this Government we estimate that in the English new towns the development corporations and the commission will have generated almost 2 million sq ft of office space, more than 3 million sq ft of shopping space and 20 million sq ft of industrial space, which is a considerable development achievement. Despite the recession, the overwhelming proportion of this space has been successfully let.

At the same time a major contribution has been made to meeting the needs of small firms. Highly successful small nursery unit estates have been completed in towns such as Peterborough, Warrington, Telford and Washington for small firms wanting units of under 2, 000 sq ft in which to get started. I have visited a number of these. They are the most vivid illustration of the potential of small business to provide new job opportunities. Altogether, we estimate that the English new towns have been creating approximately 20, 000 job opportunities a year in each of the last three years, which is a very material contribution indeed.

I come now to housing in the new towns. The Government consider that a significant and rapid increase in the proportion of home ownership in the new towns is desirable and necessary. I am glad to say that, without exception, all the new towns are making a significant contribution to our low-cost home ownership programme.

Since June 1979, the 11 English new towns still with housing responsibilities have released nearly 1, 300 acres to private house builders. That is sufficient land for more than 14, 000 owner-occupied dwellings. A sign of the confidence that private house builders have in the new towns is the scale of private house building taking place. At Warrington, for example, 16 house builders are building about 2, 000 dwellings on 25 different sites. At Milton Keynes about 35 house builders are building more than 3, 500 houses for sale on 45 sites.

The house builders are doing a great deal to provide homes to buy at a wide range of different prices. At the lowest end of the price range they are being imaginative and skilful in providing starter homes that young first-time buyers with relatively small incomes can afford. For example, right now one-bedroom starter homes are available for sale in central Lancashire for £15, 500. Even in Basildon, in the more expensive South-East, starter homes can be bought for just over £17, 000. Those prices are certainly within the reach of young couples and single people with fairly modest earnings.

As well as building for outright sale, all the new towns have now launched their own shared ownership schemes, thereby bringing home ownership well within reach of those with below average industrial earnings. The comparative costs of buying on a shared ownership basis as opposed to renting are in some parts of the country now remarkably close. I noticed, for instance, in an advertisement put out by Washington new town last year that the weekly cost of buying a new house in Washington on a 50 per cent. shared ownership basis is almost identical to renting the same house.

The new towns have drawn up their own standard shared ownership lease in agreement with the Building Societies Association. This has helped considerably in securing building society mortgage finance for new town shared ownership schemes and is enabling more schemes to go ahead.

At Northampton the corporation expects private developers to build about 200 houses each year for shared ownership in the next few years. At Milton Keynes alone, about 700 houses for shared ownership are expected to start this year. I expect to see a significant increase in shared ownership opportunities in the new towns over the next year or so.

Some new towns, such as Skelmersdale, are making substantial use of homesteading—the sale of dilapidated or badly vandalised houses or flats for improvement by the purchasers. Skelmersdale and Telford have demonstrated vividly that dwellings that have become difficult, if not impossible, to let can be brought rapidly back into use if authorities will release them for sale and let young couples do them up. What the purchasers have achieved with these houses is remarkable as I have seen in Skelmersdale. I hope that more local authorities will take a leaf out of their book.

Lastly, there has been a remarkable response from sitting new town tenants to the opportunity that the Government have given them to buy their houses and flats on favourable terms. By the end of last December, nearly 8, 000 new town tenants in the 11 English new towns had already completed their purchase. Since the Government came to office two and a half years ago, about 14 per cent. of new town tenants—one tenant in every seven—had either completed the purchase of their homes or were firmly negotiating to do so.

There are seven new towns where the proportion of tenants who have either bought or are firmly negotiating to do so is already more than 10 per cent. They are Basildon, Northampton, Peterborough, Warrington, Runcorn, Skelmersdale and Telford. In Peterborough the percentage is 21 per cent. and in Skelmersdale it is a remarkable 25 per cent. Indeed, in Skelmersdale the proportion of owner-occupation in the town as a whole is already one-third higher than it was when the Government came to office two and a half years ago.

There is no question but that, as a result of the initiatives that we have taken, an unprecedented and much-needed upsurge in home ownership in the new towns is taking place. Indeed, I believe that by the end of this Parliament there will have taken place probably the biggest single growth of home ownership in the new towns in any Parliament in the post-war period.

Although the new towns programme is drawing to a close, I am sure that both sides of the House recognise the key contribution that the new towns have made over the past 30 years to the provision of new housing and job opportunities and to creating a better living and working environment for the hundreds of thousands of families who have chosen to move to the new towns and who, by and large, do not regret their decision. The Bill is essential to help the new town programme to be satisfactorily rounded off. I therefore ask the House to give it a Second Reading.

4.37 pm

Mr. Ted Graham (Edmonton)

First, let me say that the Opposition will give the Bill an unopposed Second Reading.

I made my first speech from the Dispatch Box for the Opposition on the Third Reading of the previous New Towns Bill. On that occasion the Minister asked the House for permission to increase the borrowing limit from £3, 250 million to a maximum of £4 million. He stated: 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."—[Official Report, 6 June 1980; Vol. 985, c. 1865.] We are now told that the moneys will last only until the late spring of 1982. How did the Minister get his sums so wrong 18 months ago? If, as he has just said, he expects the upper limit to last for two years, how can we believe that that figure is correct in the light of his failure to get the figures right 18 months ago?

We are told that the moneys that we are being asked to approve are to be used to finance housing, sewerage, roads, and other local expenditure. No one on the Opposition Benches would cavil at the list of items for which the money is required—completing, as the Minister said, shop centres at Peterborough, the railway station at Milton Keynes, the town centre at Telford, and the industrial area at Corby. We are certainly in favour of all those projects. However, we are dead set against the crazy economics of the Government. The imperatives for any Government in seeking to provide decent homes must form part of a balanced programme. In my view and in that of the Opposition, the Government have gone overboard in one direction—housing—at the expense of criminally neglecting needs elsewhere.

In the new towns, especially those of the first and second generations, there is the spectre of second and third generations of the original families being forced to look elsewhere for homes. By turning off the tap of finance for building new homes, and by stimulating the sale of existing homes, thousands of young couples are being squeezed out, and cannot live in the new towns where they were born.

I hope that we shall be told not only about the number of houses that are being sold but about the number of people who are on the waiting lists. At Easington in Durham there were 8, 000 people on the waiting list last year; at Warrington there were 2, 000; at Hemel Hempstead 4, 000; at Sedgefield 3, 000. For Basildon the figure that I was given by the Library was 3, 440. So what hope is there for young couples under the Government's policy in new towns of selling houses and building fewer and fewer new houses?

Mr. Anthony Steen (Liverpool, Wavertree)

Does the hon. Gentleman agree that a rather curious paradox has arisen, in the inner areas of old industrial areas, such as Liverpool, where houses were demolished and people moved out, many of them to new towns? Those people now live out in the new towns, and the inner area of Liverpool has about 2, 400 council units which are empty. Does he think that some of the people on the waiting lists in the new towns should be encouraged to go back to the industrial areas? Is that what he wants?

Mr. Graham

I want a decent home to he made available for every young couple, or not-so-young couple, wherever they want it. Families who have lived all their lives, 20 or 25 years, in a new town should have the opportunity, if they wish, to occupy a council house for rent in a new town.

Mr. John Evans

Is my hon. Friend aware that in the new town of Warrington, which I represent, there is much resentment on the part of citizens who have lived there all their lives because the new town regulations preclude them from having a new town house to rent? The regulations say that people have to move into the Warrington area before they can get a house. That resentment has been increased because the strangers who moved into the area to rent a house are now purchasing those houses. People who were trying to get a new house in Warrington three years ago still cannot get one, and they see newcomers purchasing the houses that were originally rented.

Mr. Graham

I thank my hon. Friend for what he says, and I am sure that contributions from other of my hon. Friends will amplify that. The Government, in accordance with their own political imperatives, are concentrating too much on the present, satisfying the laudable ambitions of tenants to become owner-occupiers. They give too little attention to the needs of the children of those former tenants who look to the local authorities in new towns to provide houses for rent.

I hope that the Minister who replies will deal with the conundrum inherent in the Government's policy of encouraging the sale of council houses, and at the same time seeking—in our view, inadequately—to meet the needs of those who need homes. The Secretary of State confirmed to the Select Committee on the Environment the equation that a council has to sell 12 homes to have enough capital to build one new house. If that equation is riot correct, the Minister should tell us the correct equation. It is the economics of the madhouse whereby an authority, to get sufficient capital receipts, has to be encouraged to sell so many houses.

The Labour Party has played a notable part in the history and development of the new town movement. Since 1945, despite the changes of Government, new towns have gone from strength to strength. It is, therefore, no part of Labour's case today to examine in detail or comment on the intricate pattern of control and management that hitherto has been generally accepted as a soundly based system, enabling Government to create and sustain new towns. I am grateful to the Minister for his advance notice that a paper will be published before the Summer Recess to explain to the House and the country changes in the financing of new towns. Labour Members will, of course, examine it with immense care and attention.

Although the Opposition have argued against the way in which the Government have sold industrial and commercial assets, we have expressed more than once our concern at the problems that have been caused, particularly for the small business man and the small shopkeeper. Sales of individual freeholds are not permitted. As a result, the shopkeeper or business man either has to join a consortium or bid for the freehold of a huge block. I know from inquiries that I have made in new towns that shopkeepers are angry and bitter. The chemist or the greengrocer has been gullible. He has listened to the propaganda of the Conservative Party telling him that it would enable him, the shopkeeper or the business man, to buy the freehold of his property.

The Minister should tell us what steps he intends to take to protect the interests of the small shopkeeper. It is no good telling him to join a consortium, because the block of shops may be bought by a speculator who wants only to make a profit. Instead of ending up with a benevolent landlord, the small shopkepper may end up with the worst possible landlord.

The Opposition remain unconvinced that it is in the best interest of new towns to be cajoled and suborned by Government pressure to flog off assets that they wish to retain—not least because they form part of a balanced and profitable property portfolio.

We have been told that there is a programme. I hope, therefore, that the Minister will answer the following question. It relates, in part, to what was said by my hon. Friend the Member for Newton (Mr. Evans). Will he tell us the total of capital receipts obtained by new towns that are forced to dispose of commercial and industrial properties at the behest of the Government, acting under the powers in the Local Government, Planning and Land (No. 2) Act? I accept that there is a quibble. We argue that the new towns are being forced, and the Minister has assured us more than once that they will not be sold at commercially disadvantageous terms. I hope that the Minister will give us the total figures.

The Under-Secretary of State—not the present holder of that office, but his predecessor, the hon. Member for Hampstead (Mr. Finsberg)—told a Committee on 6 May, when the New Towns (Limit on Borrowing) Order 1981 was being debated, that some of the proceeds from these sales were being used to support investment in other new towns. We would not take exception to taxpayers' money invested in Basildon being realised and reinvested in other new towns or urban development corporations. In Committee, Opposition Members argued for that. Will the Minister give the precise figure and the proportion of new investment represented by that rolled-over capital? We do not want generalisations and we do not want to be told that the money comes in and goes out. On Second Reading, such figures should be available and we should know how much money from the sale of assets in one place has been spent in another. Will the Minister give a categoric assurance that no assets have been sold on commercially disadvantageous terms as a result of the recession, so that the Government can meet their targets and reduce the public sector borrowing requirement?

We understand that under the system every area is given a target. If the advice given to an authority by its valuers and others is that it is not the right time to sell, what steps will the Government take? Will they waive their requirement to produce £10 million or £20 million, or will they say that the overall imperative demands that authorities should sell on disadvantageous terms? The only justification for selling assets, particularly in the Government's way, would be if private ownership could manage them more effectively and to general advantage. There has never been a shred of evidence to support the Government's contention, but only dogma, malice and spite.

It is extremely hard to understand the Government's oft-trumpeted cry that they believe in economic efficiency.

New towns are successful, but, alas, according to the Government they are fatally flawed because they are successful public enterprises. The pieces of the Government's jigsaw on new town policy do not fit, even if we accept that the Government are cobbling it together as they go along. I hope that the Minister will seriously attempt to put the sale of industrial and commercial assets in context. I refer to house building, community developments and commercial viability. I hope that the Government will not fob us off with generalisations. The situation is far too serious for that.

The Government do not need to be reminded that they have left a sour taste in the mouths of first generation new towns as a result of their handling of section 10 claims. First generation new towns accepted the hand-over of corporation housing on the clear commitment in section 10 of the agreements that the Government would reimburse district councils for repairs and renovations arising from inherent design faults. The miserable tale has caused intense frustration and anger. The scale of potential calamity is catastrophic and the delays in settling claims do not reflect any credit on the Government. The closure of the National Building Agency by Government diktat has not helped. The Minister seemed to say that that was almost an act of God over which the Government had no control. The delays will be a direct result of the Government's action. The report that will be placed before the Minister in May will give him an opportunity to change that atmosphere of distrust. Before the Minister accepts the detailed report I hope that he will allow new towns to discuss the NBA report on housing. I hope that we shall not be told that the local authority has stated the amount necessary to put any defects right, that the NBA has given its figures and that the Minister has accepted the NBA report without having given the local authority an opportunity to challenge the NBA's figures.

For example, if an authority estimates that the cost of correcting defects is £7 million and the NBA claims that the cost should be £5 million, the Minister may decide that he will provide only 40 per cent.—£2 million—of the £5 million figure. If it is discovered that £7 million is needed to put right the defects, who will pick up the £5 million tab? The answer is the local authority. The Minister has arbitrarily decided to delete certain subjects from consideration. We cannot understand that. The Minister has excluded all matters and works outside the four walls of a dwelling from consideration under section 10. For example, he has excluded the estate sewers, drains, garages and garage compounds. However, when the agreement was made they were part of the development that it was agreed should be taken into account.

The Minister has alluded more than once to the fact that the HIP allocations for new towns contain an element that will help them in the meantime to deal with section 10 claims. New town officials have met that with disbelief, not least because Department of the Environment officials have shown a marked reluctance or inability to identify those allowances. For example, Stevenage asked for £5.8 million in its HIP allocation. It has been given £2.8 million. However, it has not been told that that £2.8 million contains an element of £500, 000, £1 million, or whatever, for use towards putting right section 10 claims. The Minister should resolve the problem quickly and sympathetically. He should not present councils with a fait accompli, and a cut and dried, take-it-or-leave-it decision.

The Minister, who has been listening attentively to the debate, will be visiting Peterlee towards the end of the week. He will know that he is the third housing Minister to visit it in the past two years. I assure him that he, personally, will be warmly received. However, Peterlee and Easington do not want visits from Ministers, but speedy action and money to put right the defects that they know about.

Mr. John Evans

Send them a cheque.

Mr. Graham

My hon. Friend is right. The Minister can do those towns and those who live in the area a great service. He should not ignore the fact that second generation new towns are dragging their feet. They will not enter into anything like a section 10 arrangement because of the treatment given to first generation new towns.

The new towns resent the fact that the Government, in dealing with the block grant and other financial matters, have failed to consider certain factors. New towns are grateful and relieved that the Government's decision about the E7 housing factor will marginally ameliorate the financial situation of new towns. However, those who represent new towns in the London ring have pressed the Minister to give proper weight to factors such as the cost arising from the planning of new towns, the large amount of open space, communal shrubberies and, in particular, the need to create a community and services for the young.

No doubt the Minister has perceived that as much as two-thirds of the difference between the needs of new towns and the woefully inadequate grant-related expenditure is accounted for under the two heads of planning new towns and looking after the population. Will the Government try to adjust the GREs for new towns to take such wholly exceptional expenditure into account?

I must tell the Minister that nowhere more than in the new towns is there complete incomprehension of the basis for GREs. I quote some of the comments that have been made to me recently by chief officers in new towns. They include "suspect and unreliable", inexplicable and widely varying assessments and unrelated to the acual spending needs of the district". Those are not generalities. I would be pleased to tell the Minister the names of the chief officers who made those points. It is seriously being asked whether there is a conscious vendetta against new towns because of the way in which the Minister and his colleagues are refusing to adjust the assessments. The volte-face towards new towns by the Government since May 1979 is causing pain, anger and despair in many of them.

In conclusion, our central charge is that within the general onslaught made by the Government on local government across Britain, piling impossible imposts on already intolerable burdens, they refuse to acknowledge the special factors affecting new towns, arising from their demographic profile, or problems stemming from the base of their funding.

When the Government produced their incomprehensible formula for block grant aid to authorities, they did not hesitate to involve the most detailed yardsticks and measuring rods to prod local authority spending into line. All local government across the geographical and political spectrum has bitterly protested at the depth of interference into local management of local affairs by the Government, a Government who profess to give freedom to councils to run their affairs in their own way.

When I urged the Secretary of State to interfere a little more so that the special financial problems of new towns could be given due weight, his hon. Friend, the then Under-Secretary of State, said to me in a letter of April 1981: It would not be possible w adjust targets for individual authorities to reflect particular circumstances such as population growth without becoming involved to an unacceptable degree in the decision-making of those authorities. That is claptrap. Where there is a will there is a way.

When the Government choose, they do not hesitate to differentiate between the shires and inner urban areas. If they wished to give weight, in adjustment of GRE assessments, to a class of authority such as new towns or a class of authority with peculiar, significant population factors—which would include most new towns—they could do so. The only stumbling block is the refusal to help. That is deplorable and is no credit to the Government, the system or the Ministers responsible.

The Labour Party has always accepted that in due time the forms of central direction and control via the Commission for the New Towns, and below that the individual development corporations, would be loosened and changed. The creation of living, vibrant communities primarily as a result of public initiatives and public capital has never blinded us to the reality that taxpayers' investment requires prudent handling, a proper return and a justified role. During the years, under both Governments, we have seen the new towns blossom into a large sector of British life and achievement.

That background gives the Opposition satisfaction. We are proud to say that we have played a major part in the growth of what we know as the new towns movement.

5.4 pm

Mr. Christopher Murphy (Welwyn and Hatfield)

I support the Bill in the hope that it will assist in bringing about an early normalisation of the new towns. I speak as one privileged to represent two first generation new towns, Welwyn Garden City and Hatfield. The Government should adopt the slogan "Normality for every municipality". The concept of the new town has in many ways proved to be successful in dealing with the circumstances that faced Britain. To support that statement, I quote an independent assessment by Taylor and Chave in their book on the environment: By conventional standards a new town is a good society. It is happy and healthy. Although the end product has produced considerable advantages, many disadvantages must still be overcome. The measure before the House may help to achieve that aim. However, in making certain criticisms, it would be wrong not to recognise the benefits inherent in the building of "garden cities" outside urban areas and the results of the way in which that approach has been subsequently developed.

When Ebenezer Howard first postulated his theories, he saw the logic in transferring people to such garden cities, reducing the population density of the inner city and then renovating and rejuvenating the city centre to an overall plan. There is no doubt that the green belt and decentralised town have been pursued vigorously, but the other side of the equation—the inner city aspect—has been, and has become, neglected. It is therefore to the credit of the Government that such neglect is now being overcome with the constructive policies of enterprise zones and urban development corporations. It is also to the credit of the Government that the outstanding problems of the new towns are being tackled firmly.

Ebenezer Howard based the financial realisation of his plans on private enterprise, but the post-war new towns movement was entrenched in the public sector. Hence, the unfortunate need for the Bill. The new towns were very much established as authoritarian organisations acting as estate developers and owners, but they held on to their property investments.

It should be noted that that was not the only way to secure such co-ordinated development. Abroad, new town development commissions have had a three-pronged function—land assembly, land planning and land disposal. Rather than raising finance for the purchase of land and the provision of infrastructure and then taking advantage of the skills and expertise of private enterprise to develop the town and sell the properties, we in Britain have erred on the side of almost total public sector involvement. For that reason, to see the task through coherently, the Bill appears necessary.

To achieve a more satisfactory outcome, it must be right to sell the new town assets, be they commercial or domestic property, to give an opportunity to local people to have a stake in their environment. Thus, the imbalance in ownership can be redressed and the benefits of private capital given to the town, albeit it at a later stage with the resultant reduction in taxpayers' contributions and the reduced need for further new towns Bills.

Some of the problems that have been faced in the first generation new towns relate to the assets. Their sale is taking place with an alarming lack of speed. The future of the so-called common parts has still to be settled. Those properties not yet for sale have excessively high rents imposed upon them. The homes transferred to district councils still await the final outcome of claims for section 10 grants. The consequent high level of local authority housing has had a disproportionate effect on the rate support grant because of the E7 factor—now, thankfully, ameliorated. The high rateable value created in a county such as Hertfordshire by the new towns and their properties produces a current imbalance in the rate support grant under existing formulae, with resultant threats to services, such as education. There is a need for consideration of a special new town element in assessing future rate support grants. Those are matters of great importance to my constituents and many others similarly affected.

However, my support for the Bill is tinged with considerable regret. That regret centres on the way in which new towns are administered, and particularly the continuing presence of the Commission for the New Towns. Because of the State's involvement in the development of new towns in the aftermath of the Second World War, it was decided to instigate development corporations that would act as separate entitles from the local authorities and be funded separately by Whitehall. As a town matured, the functions of the corporation were transferred to the NCT, but there the process seems to have foundered.

Inevitably, this measure will assist the continuing administrative costs of the NCT. It is right on this occasion to ask how long this quango will be allowed to continue, recognising that its tasks with respect to the development of first generation new towns should be diminishing day by day. Quangos are born with ease, grow effortlessly, but are "a long time a-dying".

It would be wrong to be totally dismissive of the NCT's efforts in the past, but equally it would be wrong to condone what is becoming an increasingly undemocratic aspect of new towns. An important element of taxation without representation exists for tenants and local people generally. The experiment of the new towns has undoubtedly achieved much for the people whom it sought to help, although at a high price in terms of countryside lost and urban decay.

I return to the assessment by Taylor and Chave, who say: Its families have good homes. Its children have good schools. Work is varied and close at hand. Working conditions are good. There are wide facilities for active recreation. The strains of industrial life are reduced to a degree not achieved in unplanned communities. The House can take pride in that assessment.

I support the Bill, but I do so with a firm request that the Government take urgent action to deal with the problems that I have raised which result from the situation regarding the assets of new towns. I also express my firm belief that in the two new towns that I represent the time has come to say never send to know for whom the bell tolls"— it tolls for the NCT.

5.12 pm

Mr. Stanley Newens (Harlow)

Like those hon. Members who have already spoken, I support the Bill. Its effect is to provide further sums of money for the funding of new towns, which represent a highly successful and proven form of urban development.

As an hon. Member representing a new town, I am anxious because in other respects, whether by accident or design, the Government have inflicted grave damage on new towns, especially those such as Harlow, which I represent and which is regarded as completed.

As my hon. Friend the Member for Edmonton (Mr. Graham) has said, the method of determining rate support grant which the Government have adopted has failed to take into account the specific features of new towns, with the result that many have been severely penalised in rate support grant settlements. For example, in 1981, six of the seven London new towns lost about £6 million of the £8 million paid to them the previous year. As if that were not enough, the Government have also deprived new towns of substantial housing subsidies and have delayed the settlement of outstanding claims made under section 10 of the New Towns (Amendment) Act 1976.

On this issue concerning the provision of funds to remedy design defects of housing assets transferred to local authorities from development corporations the Government have procrastinated and passed the settlement of claims to the National Building Agency and then decided to abolish that agency. They now say that they hope that the result will be reached by May this year. I very much hope that it will, but the delay which they have already inflicted has meant that people have been forced to live in houses with serious structural design problems. They have been forced to put up with that and are continuing to do so.

The position in new towns now is that, but for the change in the treatment of the E7 factor which governs the assessment to housing revenue for rate support grant purposes, new towns such as Harlow would have been faced with catastrophic losses of income this year. The formula by which the rate support grant is determined fails to take into account the special features of new towns, and to allow for them. The result has been that all new town local authorities, even those under Conservative control, are apt to be regarded, quite unjustly, as high spenders. The fact that new towns have only recently acquired amenities and therefore face higher interest charges and other costs than older towns that were able to begin purchasing such amenities many years ago is not provided for in the present formula. The fact that most new towns have large open spaces that have to be maintained, although they are not available for sale or development, is overlooked. The fact that new towns face a succession of problems that arise very rapidly, due first to the large number of children in those areas, then to the number of old people, and so on, is not reflected in the present rate support grant formula.

A case exists for a special new towns factor to be incorporated in the rate support grant formula to ensure that new towns are not in danger in the future of being starved of funds when the development corporations are wound up.

The Government have not only sought to reduce expenditure on new towns. They have also endeavoured to squeeze money out of them in various ways. They have done that, first, by the sale of assets, to which the Minister referred. In speaking of this, the Minister could not give full details. I remind him that when I have tabled parliamentary questions the full details have been refused for a variety of reasons. I believe that the Government have been so tardy about coming forward with the information because their hopes for the success of this policy have never been fully realised on the terms in which the Government originally stated it.

The Minister said that private capital has been attracted to new towns. To a certain extent, I agree that that is true, but not in all areas. However, as my hon. Friend the Member for Edmonton said and the Minister conceded, small industrial or commercial owner-occupiers have often been denied the right to buy and in some cases have had their premises sold over their heads. That is not a good record for a Government endeavouring to posture as the friend of small business men. The same criticism applies to rents.

The Government have been prepared to allow an outrageous increase in industrial and commercial rents to be put forward which, in the CNT towns, can no longer be discussed at local level. The hon. Member for Welwyn and Hatfield (Mr. Murphy) should remember that the Conservative Government were responsible for the way in which those issues have been shifted to the New Towns Commission, and did not consider the fact that there would not be local availability, as there should have been. I have raised the question of rent increases with the local office in Harlow. Although I have no complaint against the people there, they have had to pass my query on and I am still awaiting a reply.

Mr. Nicholas Lyell (Hemel Hempstead)

Does the hon. Gentleman agree that it is desirable that the Government should encourage the Commission for the New Towns, in its negotiations with those businesses that would wish to purchase their premises, to take a reasonable attitude when marriage values—difference in values of premises when they are let and when the tenant and landlord are the same—come to be considered? Will the hon. Gentleman agree that a reasonable attitude should be taken so that the occupiers of the premises have as swift and early an opportunity to purchase them on as many occasions as possible?

Mr. Newens

I am not a great advocate of the sale of public property, but if there are to be sales I agree with the hon. and learned Member for Hemel Hempstead (Mr. Lyell) that the owner-occupiers ought to have not only a prior but a better and more favourable opportunity than outsiders. I hope that the Minister will listen to the hon. and learned Member and me.

The accusation made by the hon. Member for Welwyn and Hatfield against the Commission for the New Towns should be considered, bearing in mind that it is unable to function properly because the Government have not given it the lease of life that would enable it to. For example, an advertisement recently appeared for staff to take on temporary positions. Even in the present situation, the best qualified staff will not go for temporary positions and, in those circumstances, the commission will be unable to act as a driving force in new town affairs. There is still nothing to replace it.

The Minister referred to jobs created, but it is clear that he now presides over the running-down of the system and much of the drive originally available in new towns has been destroyed because of the policies pursued by his Department.

Problems are not confined to small business men because many large operators encounter similar difficulties. The prices of freeholds are unattractive to many larger industrialists. It is infinitely better for town premises to be owned by those concerned with the locality—whether a development corporation, new town commission or an industrialist—rather than a finance organisation that is more interested in the return on its investments.

Increased rents represent an issue of considerable concern to all industrialists and other business men. I hope that the Minister will take note of that and will not continue making tremendous noises about the imposition of high rates on businesses, when the Government are responsible for allowing a policy that imposes considerably increased rents on business men.

The Government still have no clear idea of what they will do with the industrial and commercial assets now held by the commission, which cannot be disposed of before the dissolution occurs. They are still resisting, for doctrinaire reasons, the transfer of commercial assets that will never make a sufficient profit to attract private buyers to local authorities. The authorities should refuse the Government's policy in that respect, particularly if they are concerned about democracy and local control.

On the other hand, local authorities are unprepared to accept all the amenities that will be prime loss-makers unless the Government provide the financial means whereby the amenities can be adequately supported. Authorities will not be taken for a ride on that issue, whatever the Government suggest.

The Government now face many problems in new towns which they cannot resolve with their present policies without doing considerable damage. The Minister claimed that there were increased opportunities for would-be home buyers. I hope that he will recognise that his policy has also greatly diminished opportunities for those who need, but cannot afford to buy, homes. That includes not only those wanting their first home, but those accommodated in flats who wish to obtain the tenancy of a house with a garden, which is the justifiable aspiration of many of my constituents and of many living in new towns.

Labour Governments always provided houses for people to buy in new towns, as well as to rent, but a new problem is being created by the growing waiting list of those who cannot afford to buy and for whom there is no house available to let.

The Bill aims at providing more funds for new towns and that should be supported. However, I hope that it will not be used to obscure the great damage being done to new towns by the Government's general policies. I hope that the next Labour Government will make funds available, and make it possible for new towns to resume the forward march on all fronts that the Labour Government first launched in 1946.

5.28 pm

Mr. K. Harvey Proctor (Basildon)

I cannot agree with the hon. Member for Harlow (Mr. Newens) in his strictures on the Government about the great damage he alleges that the Government have done to new towns in the past two and a half years. It is really the reverse, and I shall try to develop some of the success stories of new towns during my speech.

I welcome and support the Second Reading of the Bill. It underlines the Government's commitment to the development of new towns. I also support the comments of my hon. Friend the Member for Welwyn and Hatfield (Mr. Murphy) about the normality of the new town's position. The sooner that new towns are fully developed, the better. That will not be disputed. I support the Bill for providing a modest increase in the borrowing limits of the new town development corporations. I also welcome the Minister's commitment to a study of the borrowing system by those corporations and his undertaking that, before the Summer Recess, he will make a statement. I shall press my hon. Friend the Under-Secretary of State, who is to reply, on the form of the study and its outcome. Will the result be a Green or White Paper or a ministerial statement with a departmental paper attached? I should be interested in an answer to that question.

Mr. Graham

It will be a diktat.

Mr. Proctor

The hon. Gentleman said that it will be a "diktat", but, when the Minister produces the statement, we shall discuss it with him. This is not a "diktat" House.

I shall say a few words about housing in new towns. I was astonished to hear the hon. Member for Harlow say that the Labour Party had always provided purchase opportunities in new towns. I think that is what he said. It is a remarkable boast. In my constituency and in new town constituencies throughout the country the great political argument during the 1979 election—in the new town in my constituency it was perhaps the political divide—was whether the Government of the day would give the right to sitting tenants to buy the homes in which they lived. In my constituency and in many new town constituencies the electorate gave an overwhelming answer to the question that was posed.

Mr. Newens

Will the hon. Gentleman confirm that development corporations built houses in his new town and in mine explicitly for the purpose of sale to would-be owner-occupiers from the outset, and that those houses were never offered for rent? We are talking not about sales to sitting tenants but about sales generally. Surely the hon. Gentleman will confirm that houses for sale were made available from the outset and that the Labour Party has always been anxious that 100 per cent. mortgages and excellent mortgage conditions generally should be provided for would-be buyers.

Mr. Proctor

I am not disputing what the hon. Gentleman says. The great issue during the 1979 election was whether sitting tenants should buy their own homes. The electorate gave the answer in new town and other constituencies.

New towns under successive Governments have shown great adaptability in responding to Government policy. It is true that the switch in the balance from homes for rent to homes for sale has been demonstrated markedly in new towns compared with a number of local authorities which have tried to flout the law on the sale of houses. The London borough of Waltham Forest owns a number of houses and other homes in Billericay and Wickford. My constituents have had great difficulty in obtaining the right to buy, despite the law of the land. I am pleased that they are now being allowed to buy, albeit incredibly slowly.

In new towns there has been enthusiasm in the private sector among those who, without Government policy, might never have contemplated house purchase. The hon. Member for Edmonton (Mr. Graham), in a rather exquisite phrase, talked about "flogging off" assets. From May 1979 to September 1981, 6, 646 dwellings have been sold by new town development corporations, and firm negotiations are in hand for the sale of a further 4, 783 houses. My hon. Friend the Minister has updated the figures that were given to me in a written answer on 8 December 1981. He said that by the end of December nearly 8, 000 dwellings had been sold. The demand for sale continues. It is not a one-off, one-year adventure. It is a continuing rolling programme. My hon. Friend said that 14 per cent. of new town tenants have completed or are firmly negotiating for the purchase of their homes. That is a remarkable achievement.

In Basildon, which leads the way in the purchase of new town homes, 2, 331 of my constituents have purchased their own homes from the development corporation, and a further 700 applications to buy are being processed. I understand that a further 641 homes have already been sold by the district council and that it has another 260 in the pipeline. That demonstrates clearly that the wish of many of my constituents to purchase the homes of their selection has been translated into practice. The promises made during the 1979 election have been honoured.

Mr. Graham

I do not dispute the figures, because the hon. Gentleman obviously lives with them and knows them very well. However, will he comment on what has happened to Basildon's housing waiting list over a comparable period?

Mr. Proctor

There are over 3, 000 on the waiting list in my constituency. There will always be a waiting list for an item that is subsidised. There will obviously be a waiting list for anything that is subsidised. That is an example of the law of supply and demand that even Labour Members cannot suspend for their ideological endeavours.

Mr. John Evans

The Minister has boasted that one-bedroom starter homes are being built for £15, 500 in the North of England and for about £17, 500 in the South of England. Does not the hon. Gentleman consider it immoral that those on the waiting lists should be invited to purchase one-bedroom starter homes at £15, 500 to £17, 500 when others, more fortunate, are able to purchase three-bedroom semi-detached houses for £7, 500 to £8, 000? Does he agree that there is great immorality in that sort of transaction?

Mr. Proctor

There is a division of opinion between the hon. Gentleman and his right hon. and hon. Friends and myself. I think that most of his right hon. and hon. Friends would prefer to see people in rented accommodation, whereas my right hon. and hon. Friends would prefer to see increasing numbers in their own private accommodation.

Mr. Evans

No.

Mr. Proctor

The difference between the parties on this issue is being demonstrated clearly in the debate. The housing departments in Basildon, the development corporation and the district council are to be congratulated on the part that they have played in bringing home ownership within the reach of thousands of my constituents. Similarly, development corporations and district councils throughout the country are to be congratulated. We must add to this achievement the low cost schemes for house purchase, including shared house purchase, joint development with private developers and starter homes which, in my constituency, range from about £17, 000. Basildon has taken the lead in shared purchase, and 30 contracts have already been signed for shared purchase schemes. I understand that 110 homes have been set aside for the schemes and that 300 applications have been received. At present the scheme does not apply to rented accommodation. A great success story is in its initial stages. I hope that there will be more shared purchase schemes in my constituency and in many other constituencies in due course.

Partnership arrangements, shared ownership and reduction in land prices for those on the waiting lists are the Government's initiatives and represent a success story. The schemes were pioneered by the Government, development corporations, developers and building societies, especially in Basildon. For example, the Abbey National Building Society has provided the funding and lubrication of mortgages for the private sector.

Of course, there are housing difficulties in new towns, particularly with regard to the elderly and the provision of single person accommodation. A special survey of the elderly in Basildon revealed that there was a shortfall of special old-age pensioner accommodation of about 528 units, of which 414 are of the sheltered housing type. Projections for 1989 are 1, 436 and 896 units, respectively, and for 1994, 1, 804 and 1, 094 units, respectively.

In common with many new towns, the population of Basildon is growing old. It is growing older at a faster rate than other towns. Nevertheless, the council is experimenting with build-for-sale sheltered housing schemes. Thirty units have been provided, with possibly another 30 units if the initial scheme is a success. Already a great deal of interest has been shown, even before the scheme has been marketed.

I turn to commercial and industrial matters. Housing is not the only success story for new towns and their development corporations. My hon. Friend the Minister referred to the Western Approach road at Basildon, which is provided for and funded by the Bill. That will be very helpful to my constituency. Development corporations, in conjunction with private developers and finance, are expanding the commercial and industrial assets of the new towns.

My hon. Friend also mentioned that in Basildon, with the aid of Norwich Union, the development corporation is constructing what will become the biggest and best shopping centre in the South-East of England. The second phase development is the logical follow-on of the Government's investment in roads two years ago relating to the town centre development—then at a cost of about £1½ million, which is provided for in the New Towns Act 1980. That has led directly to a £65 million investment, which will provide jobs in my constituency, including jobs in the construction industry. However, as my hon. Friend said, the experience in Basildon is not unique.

I have a number of questions to put to my hon. Friend who will be replying to this important debate. The hon. Member for Newton (Mr. Evans) asked my hon. Friend about the sale of assets. Clearly the hon. Gentlemen and his hon. Friend the Member for Edmonton were not adept at scrutinising Hansard in the few days just before Christmas. Otherwise, they might have seen a reply I received on 21 December, just before the Christmas haze came upon us. I asked my right hon. Friend the Secretary of State for the Environment what proceeds to the Exchequer have derived from the sale of new town assets; and if he will make a statement. My hon. Friend the Minister for Housing and Construction replied: Between 1 April 1979 and 30 September 1981 £212 million had been realised from the sale of industrial and commercial assets in the English new towns. We estimate that about £40 million will have been paid to the Exchequer in tax. A further £21 million has been paid into the national loans fund to redeem debt. The remaining benefit to the Exchequer has been a reduction in the call on the Exchequer to finance the new towns' investment programmes."—[Official Report, 21 December 1981; Vol. 15. c. 318.] I hope that that answers some of the questions posed by hon. Members. No doubt those figures will be confirmed by my hon. Friend when he winds up. I should like to ask my hon. Friend whether the sale of assets could proceed faster and make a bigger contribution than at present.

Mr. Norman Hogg (Dunbartonshire, East)

The reason why the Government are unable to sell the assets faster than the development corporations is the recession that the Government's policies have created.

Mr. Proctor

Many of my constituents write to me saying that they want to buy an asset and that the. development corporation is being a little sticky about selling it. The demand is there. A firmer prod might result in a few more assets being sold in the not too distant future.

It is interesting that Opposition Members seem to be in a quandary about the sale of assets. On the one hand they want nothing to do with it, but on the other they want to make sure that their constituents have their fair slice of the action. I am glad that they are on our side with regard to the sale of assets and that they are rightly defending their constituents who want to buy them.

Will my hon. Friend say a little about short-term borrowing from the private sector for development corporations? Will he give a little more freedom for them to negotiate with banks and other financial institutions to establish more private funding for new towns? Will he arrange for the limit of about £500, 000 on development corporations to be raised to a more reasonable figure of about £5 million? I should be grateful if my hon. Friend would say whether that it is possible.

My next question has been touched upon already by a number of hon. Members, including the hon. Member for Harlow and my hon. Friend the Member for Welwyn and Hatfield. The Bill allows for an increase in spending by development corporations, but there will be substantial financial consequences and implications for local authorities and their expenditure. Before Christmas a number of Members of Parliament representing new towns met. They wrote to my right hon. Friend the Secretary of State for the Environment about this point.

Mr. Newens

It was an all-party letter.

Mr. Proctor

That is right.

The seven London ring new towns have come together to demonstrate that decisions made by previous Governments, the present Government and individual development corporations about the sort of places that new towns should be have placed inescapable costs upon the councils concerned. At present those costs are not allowed for in the Government's view of what constitutes acceptable council spending or in the formula for calculating rate support grant. The pressure of population expansion in new towns must also be taken into account.

I should be grateful if my hon. Friend could answer some of my questions. I assure him of the support of Conservative Members for Ministers in the Department of the Environment for all that they do for new towns and their success and prosperity. Finally, I add a word of thanks to the staff of the development corporations for all the work that they do in our new town constituencies.

5.50 pm

Mr. Norman Hogg (Dunbartonshire, East)

As has already been made clear, we do not intend to vote against the Bill. We welcome it, but at the same time it must be seen against the background of what the Government are doing to the new towns. I profoundly disagree with almost everything that was said by the hon. Member for Basildon (Mr. Proctor). I cannot see the success story to which he referred. It is not reflected in the Scottish new towns, and certainly not in Cumbernauld.

Mr. David Lambie (Central Ayrshire)

Does not my hon. Friend recognise that, according to the unemployment figures published today, my new town of Irvine has an unemployment rate of 24.7 per cent.? One in four of the population is unemployed and one in three of the male population is unemployed. That is not a success story. It is a story of disaster.

Mr. Hogg

The unemployment figures for all Scottish new towns are bad, but for Irvine new town they are particularly bad. My hon. Friend does well to draw attention to them. The story is far from the success story to which we were treated by the hon. Member for Basildon.

The new towns are a success in one respect. They have brought high quality housing and the garden city concept, which has replaced the urban areas of our great cities of Glasgow and London. The planners have done an excellent job. It was proper of the Labour Government of 1945 to introduce legislation to provide for the new towns.

The story now is one of contraction. In my constituency, factory after factory has closed. We have redundancies upon redundancies in the factories that remain and many have introduced short-time working. Other factories, where we had hoped for expansion, have at best marked time. Later this week, the official receiver may sell the Lovable company of Cumbernauld, where over 300 women are presently employed. It is the second largest manufacturing industry after the Burrough corporation, which itself has had many redundancies over the past two and a half years. Many of my constituents will view these events with the gravest concern. If the work force at the Lovable factory choose to fight the redundancies it can be certain of my support and that of many of the people who live in Cumbernauld.

In addition, the Secretary of State for Scotland, who is not noted for dexterity in his handling of Scottish affairs, nor for good timing in dealing with matters of importance, has chosen today to announce that there will be rent increases of 22 per cent. in Scotland. That is against the background of a rate of inflation of 12 per cent. during the last year and an average increase in earnings of 11.3 per cent. As my hon. Friend the Member for Central Ayrshire (Mr. Lambie) said, new towns are facing massive unemployment. What justification is there for rent increases of 22 per cent. when the rate of inflation is considerably less? Why should the Secretary of State direct the new towns to increase rents to that level? It is disgraceful. I shall write to the Secretary of State about it and demand a meeting with him because I am certain that my constituents will be protesting loudly tonight over the imposition of these scurrilous rent increases.

It is not only local events that concern me. The overall picture is just as worrying. The Government want to undo the achievements of the new towns. Over the last 30 years, two and a half million people have been found homes in new towns, with a range of supporting services such as schools, health services, sporting and recreational facilities. We have heard from the Minister the extent to which industrial space has been provided for about 300, 000 jobs. He said that 12.5 million sq ft of office space has provided 60, 000 jobs and that 15 million sq ft of shopping area has provided 40, 000 jobs. That is funded by £3.2 billion worth of borrowing, and payments on loans are funded from the income on assets.

I am surprised that the Minister and those hon. Members who have endeavoured to present a success story have not said that the new towns have become profitable. In 1976—the most recent year for which I have been able to obtain figures—they made a profit of £8 million without any significant sale of assets. Assets are the great issue in the new towns at present. They have in hand about £500 million worth of assets, although some claim that the figure is as high as £1, 000 million. The Government, true to their mistaken dogma, insist that the assets should be sold, and the development corporations have been instructed to sell off property to the value of £120 million for 1979–80 and £200 million for 1980–81. The hon. Member for Basildon drew our attention to the latest figures that he obtained in a written answer.

The Government are asking too much of the new towns. They are creating conditions whereby, if these assets are sold off, the capacity of the new towns to be profitable and self-sufficient will be seriously undermined. That is bad business. The Tory Party has now become the party of bad business. The Government want the new towns to sell off the assets, but if they do so they will be cutting off future income. The hon. Member for Basildon misunderstood my concern that the new towns are selling in a distressed market. I do not believe in selling off the assets, but the matter is made even worse if they are asked to sell them in a depressed market, because then the British taxpayer will get a bad deal.

The Bill increases the borrowing capability of new towns. I welcome that, but it must be seen against the background of what the Government have done. It is largely irrelevant, given the scale of the problem. There is massive unemployment in our new towns, particularly youth unemployment, which is even more of a problem in communities such as mine, where the average age of the citizens is 30. Now there are to be massive rent increases, a loss of manufacturing capacity, widespread asset-stripping and a conspiracy to cheat the taxpayer on the sale of assets. The Government's record on new towns is disgraceful. There is not the success story that they are attempting to present. I hope that the House will approve the Bill, but that it will do so knowing the Government's record.

6 pm

Mr. W. Benyon (Buckingham)

I apologise to the House for my absence for a short time during the debate. Fashions come and fashions go. New towns, certainly in the official world, appear to have gone out of fashion in favour of inner city renewal. That worries me because the two are complementary. In London and the outer London ring, they go together. The new town of Milton Keynes has been an undoubted success from the social point of view and also commercially and industrially.

I have made a point of asking industrialists whether, had the infrastructure been available in central London and in docklands, they would have gone there in preference to Milton Keynes. Their answer has been "No". Certain factors influenced their decision to develop on a green field site. There was room for expansion, a whole new setup and good communications.

In the third generation of new towns, it is essential to keep a strong element of public rented housing. It has been calculated that over 30 per cent. of those going to the new city of Milton Keynes cannot afford a starter home or shared ownership. When they have been there for some time, have managed to get on their feet and are earning the level of wages available, they can look towards buying or other forms of ownership. Initially, to keep this large enterprise going, it is necessary to have a great deal of housing for rent. I hope that this will not be lost sight of in future allocations, particularly in relation to what is happening in the inner cities.

I was delighted to hear of the study which is being carried out—the results will be announced this summer—on the financing of future developments in new towns. This is excellent news. Hon. Members know of the difficulty faced not only by the present Government but by successive Governments. It is sometimes described as the dead hand of the Treasury. The fact that moneys raised have to go back into the pot and are then reallocated militates against the successful economic and commercially viable development of new town financing.

It was always my hope, as a Conservative, that we would recreate the Commission for the New Towns as a properly run property company which would roll over its assets for development not only in future new towns but also in the development of the inner cities. However far one looks into the future, the sums of money that will be needed for this purpose will be considerable. If we are constantly to have to measure this element against other elements in public expenditure, we shall not achieve the results for which we all hope.

I hope it is not too late to reconsider the establishment of a properly based Commission for the New Towns which might be described as an urban renewal company which would continue to roll over the assets into the type of things that have been done so successfully. With the base that it already has in new town assets, it would have great borrowing potential. It could borrow on these assets.

The commission could also underwrite housing schemes to a greater degree. Some of the most successful operations have been developments of housing for sale that are underwritten by the local authority or the new town development corporations, if the houses cannot be sold. This is impossible under the present arrangements. Above all, it would be able to sell the assets at the time and price at which they should be sold. I remember asking my hon. Friend's predecessor this question in another debate. He assured me that there would be no move to try to sell now town assets against the best commercial advice available. Obviously, during a recession, this becomes difficult advice to give. Assets can always be sold provided the price is right. However, whether this is the right time to continue to sell large amounts of urban properly investments remains to be seen.

I welcome the increase in the borrowing power. My only regret is that the Bill is necessary. New towns in the future, and the sort of developments that are taking place in the constituency of my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen) and in London can be financed much better by a properly organised and properly run national corporation established for this purpose.

6.5 pm

Mr. John Evans (Newton)

The hon. Member for Buckingham (Mr. Benyon) made a more sensible contribution to the debate than the hon. Member for Basildon (Mr. Proctor), who seemed to involve himself more with rhetoric than with the problems that exist in new towns and the facts of the case. However, I join in the welcome afforded to the Bill. I do not know whether hon. Members of the Social Democratic and Liberal Party alliance welcome the Bill because they obviously take no interest in it. The have not shown their faces during, the debate. They are obviously not interested in the problems that face the great new towns of our country.

When I picked up the Bill, I thought that it represented either a substantial U-turn in the Government's policy because it increases the borrowing limits of the new towns from £4 billion to a staggering £5 billion, or a monumental piece of incompetence in the Department of the Environment. When I listened to the Minister's opening speech, I came to the conclusion that incompetence was far more involved in the Bill than a U-turn.

My hon. Friend the Member for Edmonton (Mr. Graham) referred to the fact that there had been a money Bill in June. I did some research on the subject of money Bills because the Minister rather quickly glossed over the fact that this is the third money Bill associated with new towns from the Government since they took office. I checked when last such a money Bill appeared before the House. That is the obvious action to take with a Bill that seeks to allow a major increase in borrowing limits. The answer is that the borrowing limits for the new towns were settled in the New Towns Act 1981 which was, in effect, nodded through the House. It had its Second Reading on October 23, and Committee, Report stage and Third Reading on October 29 and received Royal Assent on October 30. The Act was placed on the Statute Book and fixed the borrowing limits for the new towns as long as three months ago.

The Minister told the House that he expected that the present borrowing limits would run out in mid-March of this year. Surely, if the limits were fixed as late as October last year and are running out now, this exhibits incompetence by the Department of the Environment. If we are having to increase them by a staggering £1 billion, someone in the Department of the Environment cannot do his sums.

Another question that arises—it is interesting to consider the debate on the Local Government, Planning and Land (No. 2) Act—is the Government's determination to cut public sector investment in the new towns. It is self-evident, whatever the Government may have said during the debate and subsequently, that they have not succeeded. They are increasing it by a substantial amount. In his statement—it was not so much a statement as a series of planted questions which were taken at the end of Question Time—the Secretary of State, in answer to a question from the hon. Member for Peterborough (Dr. Mawhinney), said: In his first question, if I understood him correctly, my hon. Friend was talking of the consequences of the reduction in public investment. It is my view that there will be a reduction in public investment."—[Official Report, 4 February 1981, Vol. 998, c. 292]. Of course, the evidence from the Bill is that, far from there being a reduction in public investment, there is, has been and will continue to be a substantial increase. I welcome that increase. That is why I welcome the Bill. But it is essential to point out to the House and particularly to the residents of new towns the rhetoric of Ministers. They say one thing on one occasion but when hard facts are presented to them they have to adopt different tactics.

Mr. Guy Barnett (Greenwich)

Very much in character.

Mr. Evans

Yes. It is important that the House recognises precisely what is going on. In the rather heated debates on the 1980 Local Government, Planning and Land Bill, there were substantial rows over the parts dealing with the hiving off of new town assets. I am sure that my hon. Friend the Member for Greenwich (Mr. Barnett) will recall the discussion as to whether the Secretary of State for the Environment was acting legally in demanding £120 million, I think, from the sale of new town assets. It does not seem that that amount has been paid back to the Treasury. The hon. Member for Basildon gave helpful answers on this; it is a pity the Minister could not supply the answers to me.

Mr. Proctor

At the beginning of his speech the hon. Member attacked me for using rhetoric. Now he is congratulating me on giving the facts. He cannot have it both ways.

Mr. Evans

In that case the rhetoric of the hon. Member was factual. I am thanking him for supplying the answers with which the Minister could not supply me at the beginning of the debate. On a Bill of this nature one would have assumed that the Minister who was moving the Second Reading would have had that sort of fact at his finger tips because it was bound to be a question that he would be asked. I do not know whether the Under-Secretary will have further evidence for us when he winds up the debate; I will listen with interest.

The point I wanted to make was that the Secretary of State for the Environment, throughout the heated rows we had on the Report stage of the Local Government, Planning and Land Bill, insisted that the purpose of the provisions was to reduce the amount of public expenditure in new towns and to ensure that they paid their full whack so that the public sector borrowing requirement might be reduced.

I suppose that I would be in order if I asked the Minister whether the additional £1 billion will have an impact on the public sector borrowing requirement. I assume I am right when I say that it will have a major impact. Where is the Secretary of State's rhetoric on that? I do not object. I want a substantial part of the increased expenditure to be incurred in my constituency because I have the honour to represent most of Warington new town; most of the designated area is within my constituency.

Without any shadow of doubt, Warrington is one of the most successful new towns. It has a magnificent record of attracting first-class industry and of providing splendid homes in a good environment for people from all over the North-West. I must say to the hon. Member for Basildon that the people who have lived in Warrington all their lives felt and still feel a sense of unfairness because they have been precluded from obtaining houses to rent. I am sure the hon. Member understands the frustration of those who are desperately anxious for decent homes when they see thousands of splendid homes being erected and are told that they cannot have them because they already live in Warrington and do not come from the designated sending area.

It was difficult for me to explain to many people that those were the rules by which the new towns were governed. I was not popular when I had to explain that. Now those people are deeply concerned because the newcomers who received rented houses are buying them at attractive prices.

Mr. Proctor

If I have understood the hon. Member correctly, he seems to be criticising what the hon. Member for Harlow (Mr. Newens) was taking credit for in an earlier speech.

Mr. Evans

I will deal with that in a moment. I am talking about the Government's policy of selling houses which were built to rent. That was the purpose of building houses in new towns. I am trying to explain to the hon. Gentleman—he cannot visit his constituency often or he would get this complaint—is that people resent the fact that others who get preferential treatment are being allowed to buy their rented houses at substantial benefit, whereas those who have always lived in Warrington are told to purchase a house, presumably one of the one-bed starters about which the Minister boasted, at a price of £17, 500.

I will deal now with the point made by the hon. Member for Basildon. It is a smear to suggest that the Labour Party is opposed to people owning their homes. No doubt on reflection the hon. Member will wish to withdraw that remark. What the Labour Party has always believed in is building homes for people either to buy or to rent. There is a clear recognition in the Labour Party, which obviously does not apply in the Tory Party, that millions of poor people will never be able to afford to purchase houses but will require houses to rent. It is self-evident from the Government's legislation that they have washed their hands of the poorer people by not providing houses for them to rent.

Mr. Murphy

Does the hon. Gentleman not recognise that the Government have shown their determination to encourage the use of property for renting on shorthold tenure which unfortunately his side of the House has condemned?

Mr. Evans

We have been down that track many times. I am talking about public expenditure by the Government through local authorities and new towns to provide decent housing for people to rent. That is what the Government have utterly rejected.

It is right to pay a glowing tribute to the gentleman who has just finished his term as chairman of Warrington and Runcorn development corporation, Mr. Jim Mason, who did a splendid job over four years. He built up an enviable reputation not only in the Labour Party and with the trade union movement but with all political parties, with the local authority, with parish councils, with business and commerce and with almost everyone who came into contact with Warrington new town.

It was with great regret that the people heard that the Secretary of State did not propose to reappoint Mr. Mason. Many people in the new town have said that the sacking of Mr. Mason was a political decision of the Secretary of State. One Warrington borough councillor, Mr. Mike Hall, has commented on this; I quote from the Warrington Guardian of 22 January 1982: Councillor Hall said he believed Mr. Mason, who was strongly connected with the Labour and Co-operative movement, was sacked for political reasons. In the light of this Bill, the letter sent to me by the Under-Secretary on 16 November makes strange reading. He said: We are, of course, aware of the high reputation that Warrington new town enjoys, and appreciate the hard work that James Mason has put into promoting it. The task of the Development Corporation is however changing; the main period of rapid development financed by the Corporation is now drawing to a close, "— I will return to that later— and the emphasis over the next few years will increasingly to towards preparing the two towns"— Warrington and Runcorn— for the day when the Development Corporation must withdraw, leaving private investment to continue the work the Corporation had started. We have therefore decided, that for the new phase in the towns' development, a fresh approach is required. In the light of that letter and in the light of the speech of the Minister for Housing and Construction, it is difficult to see how any genuine reason could be advanced for not reappointing Mr. Mason as chairman. I do not quarrel with the Secretary of State's appointing his own nominee to the office, but those who are concerned with the well-being and the successful continuation of Warrington new town see it as a political appointment.

I have some sympathy for the new chairman, Mr. Donald Forster. I shall judge him on his actions over the months and years to come, but I have a great deal of sympathy for him, because he is coming in the wake of a successful and well-liked chairman and with the background that I have mentioned—that his was simply a political appointment and that Mr. Mason's major handicap was that he was a prominent member of the Labour party. I shall give the new chairman every support, and I shall give him every assistance on some of the issues that will arise in Warrington new town over the next few months. I am sure that he will follow Mr. Mason's path in many matters.

One of the major problems in Warrington new town is the completion of the transportation network. We have spent many millions of pounds on building one of the finest transportation systems to be found in any area. It includes a highly successful new railway station at Birchwood.

We are left with the terrible problem that at the very heart of Warrington we need a new high-level bridge over the Mersey. The problem has been going on for a long time. It is essential that the new bridge be completed. Lack of it makes nonsense of the tremendous expenditure on the expressway and the links between the M6 and the M62, which are beneficial to Warrington. We desperately need this new high-level link across the Mersey.

Many business men in the area have complained repeatedly that the problems that arise from time to time are costing them substantial sums. The Warrington Guardian of 22 January said: The 33-year-old managing director of Ardex Fabrications, Mr. David Hughes, described the task of entering and leaving Warrington from the south side as 'a desperate battle'. 'The moment there is any additional stress caused by an accident or weather conditions, the situation becomes quite impossible. It is costing business and industry time and inconvenience—which is the same as money'. I trust that out of the additional £1 billion now available to the new towns we can have some money to build the high-level link across the Mersey. One beneficial effect of that would be to open up the whole southern part of the designated area, where considerable sums of public money have already been spent on the infrastructure—roads, sewers and so on. It is waiting for that link.

Mr. Guy Barnett

My hon. Friend earlier made some interesting remarks about the retiring chairman of the new town development corporation, Mr. Mason. As I was in the Department of the Environment when the then Secretary of State appointed Mr. Mason, I should like to add to what my hon. Friend said. One of the prime reasons for Mr. Mason's appointment, as I recall, was his tremendous experience in local government. It seemed to us that he had an important contribution to make, and it is clear from what my hon. Friend has said that he has made such a contribution to Warrington's development. I very much hope that the new chairman, whom I do not know, will be able to make a similar contribution. It is very important that the corporation can work in harmony with local authorities in the area.

Mr. Evans

I am extremely grateful to my hon. Friend for what he has said. As the Minister who had so much to do with the new towns, he had to work with Mr. Mason, and over some time got to know Mr. Mason's capabilities.

As I have said, I shall give the new chairman, who I do not think has a great deal of local government experience, my full support. I appeal to everyone else in the area to support him, because he has a major task, but it is important that Ministers should be aware of the hostility to, and feeling about, their decision not to reappoint Mr. Mason.

Another important decision that needs to be taken quickly is a decision to speed up development of the Westbrook site in my constituency. Almost every factory that is built in Warrington is quickly snapped up. If we could have the go-ahead to proceed with the Westbrook site—the sewers and roads and the rest of the infrastructure—we should be able to get on with building more houses. Under the Minister's edict, they would all be for sale, and unfortunately none would be available to rent. Nevertheless, we could get on with building them and the factories, which we could then let in order to start employing people. That would also give a shot in the arm to the construction industry in the area. I do not have to tell the Minister for Housing and Construction that the industry is on its knees, or on its back, depending on how one views the industry. We desperately need a decision about that site.

I want also to mention the tremendous success of the Birchwood science park. It has been so successful that the development corporation has now created an overspill site, known as the Birchwood science boulevard. In the past there was often criticism of the development corporation because so many of the newly attracted firms were in the distribution industry. Indeed, those who were hypercritical used to say that the corporation built nothing but warehouses. I do not know who first thought of the science park. It was certainly a brilliant concept, and it has been a tremendous success. We are there attracting the science-based industries of the future, offering jobs of excellent content, particularly to youngsters. Those jobs will be very important in the future.

It is with some trepidation that I turn to another matter, as the area concerned is not in my constituency but in the constituency of the right hon. and learned Member for Runcorn (Mr. Carlisle). I shall not go into the pros and cons of the arguments about the site, but I can say that there is a desperate need for a decision on the Pewterspear science park. I do not enter into the controversy over whether it is a good or a bad thing. The issue is on the Minister's desk. A decision is needed so that at least the new town development corporation and the people in the area know what the future holds for them.

Mr. Steen

A little while ago the hon. Gentleman criticised my hon. Friend the Member for Basildon (Mr. Proctor) for what the hon. Gentleman described as his factual rhetoric. The hon. Gentleman has now spoken for one minute longer—22 minutes—and his speech is sheer rhetoric. Will it become more factual?

Mr. Evans

If the hon. Gentleman had sat through the debate, as the rest of us have, instead of coming in halfway through, as he normally does, he would be in a better position to talk about fact and rhetoric. The length of my speech is a matter for the Chair rather than for a Conservative Back Bencher. The hon. Gentleman may not like what I am saying, but I have dealt with facts both in relation to the Bill and in relation to my constituency, which is affected by the Bill.

It is important for the Minister to understand that I am not entering into the controversy. I merely ask him to arrive at a conclusion about Petersfield. People in the area need to know what will happen. The proposal will have a major impact on the plans of the new town development corporation.

Warrington new town, as I said, has been a tremendous success. It is a wonderful comment on the necessary alliance between public and private expenditure. Warrington new town has always been prepared to cooperate in that way.

In the debate on the Local Government, Planning and Land Bill, I pointed out that for a considerable time Warrington new town had been using the roll-over principle in the sale of its assets. Warrington was quite prepared to enter into agreements with private industry to sell, build and lease. That is the sensible approach. It is not the Government's approach, with its stress on ideology rather than common sense. As my hon. Friend the Member for Dunbartonshire, East (Mr. Hogg) pointed out, if we are to sell assets we must sell them in a more helpful market. We must not sell them in the depressed market created by the Government.

I only hope that in a few months we shall have an even greater recognition by the Government of the importance of public expenditure, and that they will present another money Bill further to increase the borrowing limits of the new towns.

6.31 pm

Mr. Anthony Steen (Liverpool, Wavertree)

I am sure that the hon. Member for Newton (Mr. Evans) will take my comments in the spirit intended. I take support from his comments. I make no party political point, but merely comment that there are no Social Democrats or Liberals in the Chamber. I entirely support his drawing attention to that fact. [HON. MEMBERS: "Where are they?"] They are not here anyway.

This is an important Bill, which should be debated. We are increasing the amount that the House gives new towns the power to borrow. It is a sizeable sum. It is so large that it is hard to grasp what the sum is. Furthermore, we shall not be told, by the sound of it, exactly what the money will be used for. No shopping list has been drawn up.

Although I was out of the Chamber for a while, I heard most of the speeches, which were of a high standard and interesting. The Minister did not give us a shopping list. He merely said that corporations will decide how they want to spend the money. That is a blank cheque to increase their borrowing power. Presumably they will use the money to improve the infrastructure and finish off the work that they want to do. That means they will be more attractive and will be able to continue development and expansion programmes.

That opportunity is very much at odds with what is happening in the major industrial urban areas. Large industrial cities do not have such powers. While their borrowing of public money is being strangled, the new towns are given opportunities to increase their borrowing. This will put large industrial cities such as Liverpool at a continued disadvantage.

I support what the hon. Member for Newton said about Warrington being a successful new town, but its success has been at the cost of the decline of Liverpool. A great number of people who lived in Liverpool have moved to Warrington.

My first concern is that the Bill gives the new towns opportunities to make themselves more attractive—to buy new cosmetics—while the old cities continue to look plain and dowdy. What will the money be used for? It would be helpful if the Minister explained a little more fully exactly what the increased borrowing powers will give to the new towns.

I shall explain my principal concern. In the 1960s local authorities were encouraged by the Government to borrow increasing amounts of money to extend and develop their most ambitious redevelopment plans. In 1965 local authorities in England borrowed £455 million, in 1966, £546 million, in 1967, £398 million, in 1968, £589 million and in 1969, £556 million. We know what happened. The massive demolition programmes in the principal industrial cities resulted in an enormous loss of population. Glasgow lost 21 per cent. of its population, Liverpool, 22 per cent., Manchester, 18 per cent. and inner London, 16 per cent. This was a direct result of the increased borrowing by the local authorities similar to that which the Bill is now giving to the new towns.

The money was used for mammoth demolition programmes. Between 1966 and 1976, Liverpool demolished 21, 489 buildings, Birmingham, 19, 715 dwellings, Glasgow, 53, 396 and so on. It was the local authorities' borrowing of public money that allowed them to demolish those houses and that resulted in the people moving out.

This is not something of the past. In 1967 at the Habitat conference in Vancouver the Secretary of State for the Environment said that Britain had pensioned off the bulldozer. He may now regret having said that. Between 1975 and 1980 Liverpool demolished 6, 446 dwellings, Glasgow, 17, 497 and Sheffield, 11, 130. The pattern is continuing.

As local authorities borrow more public money, houses are demolished. New towns in the North-West and the Midlands, such as Warrington, benefit from the outflow of population, so they need more public money to pay for the infrastructure to provide for these people. It would be wiser for the Government to realise that they have got these ailing industrial areas—for example, Liverpool, with about 2, 400 empty units of public housing. They are just not being used. They need to be maintained and improved. That would he better than demolishing older housing and pushing people out to the new towns. More public money will then need to be borrowed. The large industrial cities need power for increased borrowing to improve the declining housing stock, which will be demolished in due course.

A curious factor in a city such as Liverpool is that the bulldozer has demolished the bulk of the private housing in the inner city. The bulldozer is still hungry. It is starting to demolish public housing. In my constituency we are to dispossess 2, 000 people living in a spine block on a council estate that won an architectural award in 1972. It is barely nine years old, yet it is being demolished. A similar thing happened in St. Louis in the United States, where they pulled down eight or nine high-rise blocks because people would not live in them.

That is just what is happening in my constituency on a public housing estate. Blocks barely a decade old are being pulled down. That is in Belle Vale. In the neighbouring constituency of Garston about 2, 000 units are being pulled down. About 6, 000 people will be dispossessed. The bulldozer has already started to smash vast council estates built only seven or eight years ago.

What will happen to the people who live there? We should give priority not to extending the new towns, increasing the infrastructure and improving what is there, but to using public money to revitalise inner cities and revitalise, rejuvenate and rehabilitate the existing declining housing stock. Public authorities in industrial cities should be allowed to borrow money for that purpose.

The Minister would not dream of bringing a Bill to the House that he did not believe was necessary and of great importance. I do not want the new towns to compete with the old, but there is a connection between them. We should revitalise what we have and not continue to extend new towns, successful though they are.

Let me suggest one or two ways to improve the Bill. It is important to encourage private enterprise, but public funds should be used only as starter finance to persuade private enterprise to come into schemes as partners and encourage it by the use of public money. That was the original concept of the new towns—the public sector would do the essential work and then private enterprise would come in. That has not happened as much as we hoped.

On the horizon is a similar problem with the urban development corporations in London and Liverpool. Their purpose is to clear the sites, put in the infrastructure and encourage private enterprise to set up industries on the waterfront. We must be careful that we are not asked in a year or two to increase the UDCs' borrowing power because they wish to build the factories that private enterprise should build.

I am not sure that the proposals in the Bill could not be carried out in a more private enterprise way. The corporations should be encouraged to borrow public money, but on terms. Will the Minister consider a pound for a pound? For every pound borrowed from the public purse the corporation must be satisfied that it can attract one pound from private enterprise.

If there were problems in getting the money, could we not encourage private investment in a more attractive way? For example, could we not persuade the banks and insurance companies to invest in the new and old towns by giving them tax exempt bonds? They could borrow money tax exempt, without having to pay interest, 2 per cent. or 3 per cent. below the bank rate. The banks could invest in, say, building a road in a new town and would be paid interest 2 or 3 per cent. below the bank rate by the corporation. Such a proposal would increase the rates revenue for the area by attracting new firms, and the rate income could be used to pay the interest on the loan.

The Minister does not appear to rule out such a proposition. He appears to suggest that the borrowing need not be confined to public funds but could include private funds, although not English capital. Why cannot we not lend money from the banks and insurance companies? The explanatory memorandum states that the new town development corporations can borrow temporarily, from any person, sums required to perform their functions. in currency other than sterling". I do not know whether the Minister feels that sterling is not a good currency to borrow in, but it would be useful to know why sterling is excluded. There must be a good reason.

These are large sums. I understand why the Opposition are in favour of the proposal. It involves a lot more money from public funds. I support the Bill, but with reservations, unless we know that the large old towns such as Liverpool, Manchester and Birmingham will have the same opportunity to improve their infrastructure. Had the Bill a more private enterprise flavour I should be happier. It is a trend in which we on the Conservative Benches are interested. I should like to see a tax exempt revenue bond or municipal bond similar to those in the United States. Private enterprise should invest in the schemes. It should not be left entirely to the public purse. Subject to those reservations, I support the Bill, but I hope that the Minister can satisfy me that the Government understand the full force of the Bill.

6.45 pm

Mr. William Hamilton (Fife, Central)

It is interesting to hear the churlish welcome for the Bill from the Conservative Benches. It is basically an ideological conflict. Tories believe fundamentally that public enterprise and spending is, by definition, bad and should be minimised, if not eliminated, and that private enterprise, investment and spending, conversely, is always good. They have said that not only today but on the Second Reading of the original Bill—way back in 1946.

I take a firm view of the matter, based on experience from the day when the new towns were created. Two of the most exciting social experiments in the world since the war have been the National Health Service and the new towns, which are still the envy of the world.

The new town of Glenrothes is in my constituency. I have watched it grow from green fields. It now has a population of 40, 000 or more. I have watched every brick laid and every factory and house built through conscious and deliberate planning and Government and local authority intervention. The houses and factories have largely replaced the old colliery rows and the mines themselves. Glenrothes new town is now a jewel in a Scotland that is being torn to pieces by the Government.

I was interested in the comments of my hon. Friend the Member for Dunbartonshire, East (Mr. Hogg) on Cumbernauld and of my hon. Friend the Member for Central Ayrshire (Mr. Lambie) on Irvine. They have stories to tell of devastation, but that is not my experience with Glenrothes, which is a considerable success. The town has largely ridden out the worst effects of the recession and Tory policies since 1979. Glenrothes is visited by people from all over the world. No other social experiment compares with our new towns.

When I see the new towns I look back with some amusement to the New Towns Bill debate on 8 May 1946. I shall not weary the House too much with the extravagant language used by quite prominent Conservative Members. A former Speaker of the House, Mr. W. S. Morrison, then the Member for Cirencester and Tewkesbury and the official spokesman for the Tory Party, accused Mr. Silkin—the father of my right hon. Friend the Member for Deptford (Mr. Silkin) and my right hon. and learned Friend the Member for Dulwich (Mr. Silkin)—who introduced the Bill, of trying to build Utopia and of creating synthetic communities. That wild man, Viscount Hinchinbrooke, who was never temperate in his language said: The Bill… is frankly totalitarian in form". He went on to say that this kind of experiment has never been attempted before in the whole history of this country". He said that it had not been tried anywhere else except in Russia and no one knew what profanities were being perpetrated in the Urals. The implication was that we were copying a vicious, nasty, totalitarian experiment. Viscount Hinchinbrooke, referring to the clauses on Scotland, said: Alas, poor Scotland. Another deadly blow; another mighty Empire overthrown."—[Official Report, 8 May 1947; Vol. 422, c. 1153-55.] I remember him as quite a card, but nobody in the House took him very seriously.

I can contrast that prediction with my experience in Glenrothes. In its early days, Lady Balfour and the agricultural communities were antagonistic to the whole concept of new towns. Lady Balfour, who lived in a magnificent country house with hundreds of acres round it, said that it was awful for a corporation to build houses for ordinary people and thereby deprive the country of good agricultural land. She was surrounded by hundreds of acres on her private estate. I told her that when we built high rise flats in the town—if we did—we would save the agricultural land by putting her at the top and taking over her house and estates to grow barley and oats and anything else she cared for. She was not very impressed by that suggestion. I told her that in Glenrothes new town we would produce not oats or barley, but damn good citizens, and that is what we are doing.

For example, the education system, from the nursery schools through the primary and secondary schools to the technical colleges and the five or six universities almost within spitting distance, has no equal in the world. What we have is a direct consequence of public enterprise, public interest, and public intervention from the beginning.

Mr. Steen

The hon. Gentleman is making the important point that these were green field sites and that houses were built on virgin land. How does he view the people who were left behind in the large industrial cities of Glasgow, Newcastle and Liverpool? Is he suggesting that all the people in these socially deprived and unhappy areas should be moved out into the new towns and the inner cities grassed over, or does he agree that the old cities should have the same opportunities as the new towns?

Mr. Hamilton

The old cities were built by people such as the hon. Gentleman and others whom he supports. They were built by private enterprise for a system that exploited the needs of people. After the last war, the Socialist Government of 1945 decided that they would house and educate the people in a better way than they had ever been educated before. As a result, people came to Glenrothes, East Kilbride and elsewhere out of Glasgow.

There were problems remaining. It would be silly to pretend that all the problems were solved by creating new towns, but they made, and are still making, a considerable contribution to the solution of the social, economic and industrial problems with which this country was faced at the end of the last war. We are not yet out of the wood.

There is a great deal of jealousy. In Fife there is a love-hate relationship between Kirkcaldy, seven miles away from Glenrothes, and Glenrothes because they and the other languid areas in Fife believe that Glenrothes is getting far more than its fair share of the cash that the Government are providing for the new towns. Kirkcaldy district council and Fife regional council are having to struggle to get anything from the Government. They cannot understand why the Government are giving £1 billion to the new towns while they are having to scrimp and save and get permission to build one or two houses—and no schools. They are feeling the pinch, and I can imagine their reaction to the Bill.

Another problem in Glenrothes and, no doubt, to a lesser extent, in other new towns is special development area status. Levenmouth, which lies cheek and jowl with Glenrothes, has an unemployment rate far in excess of that in Glenrothes, but the new industry goes to Glenrothes. This problem has to be dealt and lived with. I hope that the Government will take it on board and give back to Levenmouth its special development area status. That might satisfy it and help its relationship with Glenrothes.

I do not know how Scotland fits into the Bill. There is a global loan figure of £1, 000 million. I do not know whether the Minister will answer the specific Scottish points. For example, what proportion of that money is going to Scottish new towns? We do not know. We have a global sum. The Scottish Minister looks reasonably pretty, but we do not want him just sitting on his bottom. He ought to be playing his part in the debate. We ought to have an official Scottish spokesman to spell out what the Bill means in a Scottish context.

My hon. Friends who represent Scottish constituencies have made it clear that Scottish new towns, particularly in the west, are in a disastrous state. In Glenrothes it is a different story. The Minister should have insisted. He should have gone to his mistress—I had better not speak in that context in view of what happened to the Scottish Solicitor-General. The Minister should have gone to the lady at the top and said that he wanted to take part in the debate, because active Scottish Members would be taking part and asking Scottish questions which an English Minister was not competent to answer.

I want to pay tribute to Brigadier Doyle, who died recently. I think he was at the Rothes colliery when it collapsed. The new town concept was built around that colliery. When the colliery collapsed, for geological and other reasons, many people thought that it meant the closure, the final coup de grace, for Glenrothes. However, Brigadier Doyle and others regarded that as a challenge. They went out and brought in industry—electronics industries from the United States, and light engineering industries. Now we have more than 150 new firms, most of them small.

I believe that small is beautiful. Industrial relations in Glenrothes new town are probably the best in the whole of the United Kingdom, because, by and large, it has small firms with a high technological content. It should be an example of the kind of progress that can be made in regional policy. New towns are an important element in the Government's regional policies and should be pursued more energetically than happens at present. If we combine industrial diversification, new technologically advanced industries, a superlative education system, modern housing, and an environment in which almost everyone has his own house and garden, we shall provide conditions in which ordinary working people can thrive and be happy.

That does not mean that there are no problems. There is a great deal of hidden poverty in Glenrothes as a direct consequence of what the Government are doing in social security and in other ways. Glenrothes has a problem with the regional road. It is the only new town in Scotland, if not in Britain, that does not have direct access to the motorway system. I hope that my hon. Friend the Member for Central Ayrshire (Mr. Lambie) will take part in the debate and comment on the shortcomings in Irvine. The problems there are far greater than in Glenrothes.

Labour Members are very proud of the new town concept. For that reason, we are glad that the Government have introduced the Bill. I do not care whether, as my hon. Friend the Member for Newton (Mr. Evans) said, it is a U-turn or any other kind of turn. We shall approve as long as the Government persist in giving good public money to good public causes. In that respect, we welcome the Bill.

7.2 pm

Mr. Donald Dewar (Glasgow, Garscadden)

There has been a fairly strong Scottish input in this debate.

I start by welcoming back my hon. Friend the Member for Kirkcaldy (Mr. Gourlay), who has been absent for many a long month as a result of a serious accident. I hope that he will soon be fit enough to be here regularly and give us the benefit of his views. He was just in time, I think, to hear the remarks of my hon. Friend the Member for Fife, Central (Mr. Hamilton) who was passing judgment on Kirkcaldy. I hope that my hon. Friend agreed with what he said.

As I said, there has been a strong Scottish theme in the debate, and the only thing that is missing is a Scottish Minister. I do not complain about the absence of the Under-Secretary of State for Scotland, the hon. Member for Edinburgh, North (Mr. Fletcher), because he told me that he could not be here tonight. I congratulate the Under-Secretary of State for Scotland, the hon. Member for Renfrewshire, East (Mr. Stewart), who stuck doggedly to his task, and heard much of the debate. So when I complain about the absence of a Scottish Minister, I mean a Scottish Minister at the Dispatch Box. I am sure that the hon. Member for Renfrewshire, East is not here as decoration. No doubt he will supply the wants, if there is any want, in the no doubt well-briefed mind of the Under-Secretary of State for the Environment, the hon. Member for Ealing, Acton (Sir G. Young), who I am sure will be able to deal with some of the specific Scottish points that I intend to raise.

Let us return, first, to the simple question that was asked by my hon. Friend the Member for Fife, Central. We do not want a breakdown for individual new towns; that would be preposterous. However, there is clearly a separate Scottish system. We have five new towns in Scotland. Perhaps I should know, and I hope that I shall be told tonight, how the allocation of total new town finance is broken down between Scotland and England. I do not know whether it is done in that way, whether there is an apportionment in these simple terms, or whether there is an updated Goschen formula. However, I am sure that the Minister will tell us.

The common ground among those who have spoken tonight—although the hon. Member for Liverpool, Wavertree (Mr. Steen) appeared briefly, he equally promptly disappeared after he spoke—was reservations about the Bill. Most of us welcome it and regard it as an unexceptionable measure. We accept that the borrowing limits for new towns have to be raised, as for many other public authorities. There is nothing controversial in that. When I spoke recently to people in new towns, either living in new towns or living and working in the administration of new towns, I found that they were more worried about the Government's general economic policy and about the economic blizzard that is now blowing in Scotland than about the nuts and bolts of this legislation. It is sad that when 347, 000 people are out of work in Scotland, however successful an individual new town corporation may be, there is no way in which it can insulate its people from such a disaster.

The reports on the five Scottish new towns are conveniently packaged for consultation. The one for the year to 31 March 81 is the most instantly available. I accept that it deals with the financial year 1980–81, but even at that stage it can be seen that Conservative economic policy, despite the bland optimism of Conservative Members, particularly the hon. Member for Basildon (Mr. Proctor), has been biting severely in the Scottish new towns. Let us take the East Kilbride development corporation about which the combined reports say, on page 49: As a result of the government moratorium on new house construction, the Corporation found itself for the first time in the unfortunate position of having no new housing starts under consideration at the end of the year. This inability to provide housing to meet locally generated needs, both from incoming industry and from second generation families, causes the Corporation considerable concern. That concern has not been removed by anything that has happened to housing in East Kilbride since that report was written.

On Cumbernauld, the report for the year 1980–81 laments the fact that it has been restricted to only 97 completions in the course of the year. Although my hon. Friend the Member for Fife, Central said that Glenrothes was perhaps less immediately hit than those on the West coast, I remind him that the Glenrothes development corporation report says on page 103: One major disappointment during the year has been the virtual cessation of the public sector house building programme. At the time of writing it appears that there will be no significant starts during the year 1981–82. The Corporation fears that a long lasting prohibition on house building will eventually put at risk its ability to sustain its efforts to make the town an industrial and commercial growth point. That is the story in three of the five new towns in Scotland, but the story is the same in them all. Opportunities are being cruelly limited there, and their new build programme has come to almost a complete halt. My hon. Friend the Member for Dunbartonshire, East (Mr. Hogg) fairly said that just at the time when the Government are choking off investment in the essential housing stock of new towns, the Secretary of State for Scotland comes along and forces ever-increasing rent bills on tenants.

It is announced that the rents will go up in the Scottish new towns, by, I think, £2.10p a week on average. According to my calculations, that is over 20 per cent.—and it is not just this year; it was 20 per cent., or close on 20 per cent., the year before, when the rise was £1.90p. Those decisions are taken arbitrarily and entirely by the Minister. It is extraordinary that Ministers—I accept that the Minister who opened the debate is not necessarily, except in constitutional theory, responsible for what the Secretary of State for Scotland does—smoothly suggest that in some cases, the smaller private housing units, it is cheaper to buy than to rent. I do not deny that but it underlines the illusion of the rents policy pursued in new towns in Scotland. No doubt the same applies to England, but I cannot speak with authority about that.

The hon. Member for Basildon made great play of his dislike of subsidies. However, in the job lot sales policy being pursued in the public sector of housing there is an enormous element of subsidy, both in terms of discount and the support that taxpayers give to mortgages. I do not object to the encouragement of home ownership, but we have an unfortunate, divisive and inefficient way of supporting home ownership, which makes the management of housing stock by new towns and district councils difficult to maintain.

In the past few years, the picture of investment in the new towns in Scotland has been depressing. In April 1981, Hansard gave figures covering the years 1977-78 and 1981–82 for the provision of gross capital expenditure on housing by new towns. In that period the figures more than halved and they are still falling in real terms. Housing is a story of disaster. I do not wish to labour the point, but the same sad story can be told about employment. It is true that East Kilbride development corporation is a little more cheerful than before, largely because it is struggling to recover and has not faced last year's disaster of the closure of BSR and McDonald Electronics.

In Cumbernauld there was a net loss of 723 jobs in 1980–81. In the same year, Glenrothes faced a net loss of 1, 200 jobs. That type of economic depression has become worse. My hon. Friend the Member for Central Ayrshire (Mr. Lambie) was right to draw attention to the horrifying fact that in a new town, Irvine—which is supposed to be a growth point and a leader in the recovery under a Conservative Government—unemployment is running at 24.7 per cent. In the march back to economic prosperity, male unemployment is considerably higher than that. That underlines the fact that the Government's impact on new towns, as on everything else in Scotland, has come to a sad pass.

New towns in Scotland are at a different stage from those south of the border. The Minister referred to new towns drawing to a close. However, the discussion document recently launched in Scotland by the Secretary of State makes it clear that no new towns in Scotland will close before the end of the 1980s. The target for the size of the population in the five new towns is 372, 000. At present, the figure is well short of 250, 000. Therefore, we have a long way to go before we can say that the new town development corporations have met their targets and completed their tasks.

In paragraph 16 of the Secretary of State's consultative document, he states that development corporations are to continue in the meantime to sell their housing in accordance with the existing legislation and to dispose of other assets as at present in order to finance further development. In the latest East Kilbride development corporation report there is a reference to that. In paragraph 32 on page 57, it states: Negotiations continued for the disposal of a number of the Corporation's commercial assets in accordance with the requirements of the Secretary of State for Scotland. Those rather laconic words probably cover up a good deal of disagreement among board members in that new town and in other new towns. I do not know what commercial assets have been alienated and sold in Scotland and I do not know what the targets are. It would be useful if the Minister put us in the picture and told us about the requirements in accordance with which East Kilbride is, probably reluctantly, acting.

I accept that the document is preliminary and consultative, and that a timetable has not yet been laid down. However, I understand that it is proposed to begin winding up the new towns when the target population is within 5, 000 of the total. Even in East Kilbride—the most advanced new town in terms of meeting its population quotas—that will not be for a good number of years. I do not dissent from the view that at some point there will have to be a phased takeover and that the democratic structure of local government will become responsible for the housing cares of new towns. No doubt the Scottish Development Agency will hold some discussions and negotiations about the industrial assets, factories and sites. To wait until we reach that point, which is near the end of the road, may be a mistake.

Having listened to hon. Members' comments on the experience in England, the great discontent about the section 10 negotiations and the bickering over terms, I imagine that the run-in may be difficult and that the process may have to take place over a longer time-scale than planned, if it is to be completed in an orderly manner, without the frustrations and difficulties that attended the operation in England. I accept that the Government are consulting, but I hope that they will consider more flexible proposals than those set out in the paper.

I welcome the Bill. I accept that there are always jealousies and tensions—constructive or otherwise—between new towns and the older urban areas. I know some of the new towns in Scotland very well. I come from Glasgow and no doubt reservations are freely expressed there. I understand them. However, everyone in Scotland admires the skill, perseverance and energy with which the new towns have pursued their aims in difficult circumstances—never more difficult than now—and tried to build a future. I look forward to the day when they will be able to bow out, but that must be a matter of negotiation, arrangement and, above all, co-operation. The timetable must bear that in mind.

Important as those long-term objectives are and important as it is to get them right and to make an orderly and amicable transfer, the economy in Scotland still shows signs of genuine, long-standing and deep-rooted distress. The people of Glenrothes, Livingston, East Kilbride, Cumbernauld and Irvine are worried by the unemployment figures, the rents forced on them and the lack of investment in the infrastructure. That investment is needed to provide the reasonable standard of living that we expect new towns to offer. Until the Government are prepared to accept that their record in the past two or three years has been lamentable and destructive and until they are prepared to take steps to reverse that downward trend, anxiety and frustration will continue in the new towns, just as they continue to find expression in all the other communities in Scotland and in the United Kingdom as a whole.

7.18 pm

The Under-Secretary of State for the Environment (Sir George Young)

The debate has been useful and constructive and I shall try to deal with the many points raised during its course.

I welcome the fact that the hon. Member for Edmonton (Mr. Graham) made it clear that the Opposition would not oppose the Bill's Second Reading. He asked why the borrowing limit had run out earlier than originally envisaged. There are basically two reasons. First, the assumption about the interest rate that was built into the earlier judgment turned out to have been over-optimistic, because interest rates have been higher than expected in the past two years. Secondly, the rate of disposals has taken a little longer to build up than predicted. For those reasons, we are reluctant to be pinned down and to give the prediction that the hon. Gentleman requested about when the current borrowing limits will run out. I cannot add to what has been said, but we expect that they will last for about two years.

The hon. Member for Edmonton went on to allege that there is a shortage of new town accommodation. He tried to attribute that to our policies for the sale of local authority and development corporation property. The switch to shared ownership and private site provision has not adversely affected the ability of the new towns to meet, needs especially those of the incoming populations. At the end of September 1981 there were about 6, 800 rented dwellings vacant in the English new towns that have kept their housing, which is about 6 per cent. of the total stock. Some of those dwellings were unoccupied for valid reasons, such as the need for repairs. However, there are many vacant dwellings immediately available for rent in nearly all the new towns. For example, there are over 800 at Telford, another 800 at Peterborough and over 480 at Northampton. One cannot sustain the case that the emphasis towards home ownership has resulted in a shortage of houses for rent in the new towns.

The hon. Member also produced the red herring that we come across time and time again—that 12 council houses must be sold to finance the building of one new house. However, that assumes that the 12 council houses that have been sold would otherwise have become available for renting. That is not the case. It also overlooks the fact that, by selling, one can sustain a higher public investment housing programme than would otherwise have been the case.

The hon. Member for Edmonton and one or two of his hon. Friends indulged in some hypocrisy by suddenly championing the cause of the small business man arid complaining that we are denying him the opportunity to buy his freehold. The fact is that that opportunity did not exist until the Government came to office. We have extended that freedom to many business men who until now have rented their sites. For the reasons given by my hon. Friend it is not practical to extend that freedom to everyone. If one indulges in widespread pepper-potting, that has an adverse effect upon the value of the development. However, I do not see how Opposition Members can criticise our policy on enfranchising the small business man.

A number of hon. Members asked me about asset disposals. As my hon. Friend said, by the end of this financial year asset disposals will have realised about £300 million since we came to office. There is no question but that without that sum we could not have maintained new town development activity at the level achieved during the past three years. That is an English figure.

Perhaps I should make it clear that the statistics that I have given apply to England and Wales. The Scottish position is relevant because the overall borrowing comes within the capacity of the Bill. However, the allocation of money to the new towns in Scotland has nothing to do with Department of the Environment Ministers. It is a matter for the Secretary of State for Scotland, who deals with it as part of his provision.

Mr. Graham

I am grateful for the information that the Minister has given on that point. However, as to the sale of assets, will he tell us what criteria the Government use periodically to decide how much they will ask the new towns to dispose of? We know that they would rather dispose of nothing. Will the Minister also answer the point made by my hon. Friend the Member for Newton (Mr. Evans) as to how much of the assets that are realised are then rolled over, ploughed back and used to finance either other new towns or urban development corporations?

Sir George Young

We are committed to the continuing disposal of new town industrial and commercial assets in order to reduce the public sector borrowing requirement and also to reduce the public sector's role as a large-scale landlord. Sales are proceeding as fast as possible, although not as fast as originally anticipated due largely to the effect of the recession on sitting tenant sales. Disposals are proposed only where the development corporation is satisfied that it is getting the best consideration reasonably obtainable. That includes, in appropriate cases, a fair proportion of marriage value. Sitting tenants are given as good an opportunity to buy the premises that they occupy as is consistent with securing for the taxpayers a proper return on their investment. The figure that the Government assume for disposals is arrived at after consultations with the development corporations and their professional advisers.

Our policy is that new towns should sell their industrial and commercial assets so that they can become more like other towns. It will also enable the winding-up of the Commission for the New Towns to take place, for which legislation is needed.

Mr. Dewar

I do not know English terminology, so perhaps the Minister will tell me what "marriage value" means. We do not have that in Scotland and it is foreign to me. Secondly, if we are selling off assets to help the PSBR, is there any bottom to that? One could sell off 100 per cent., which might be desirable for the PSBR but which would be thoroughly undesirable for the new towns. What is the bottom point at which the wild chase for quick returns will stop? Thirdly, perhaps the Minister can be briefed by the Under-Secretary of State for Scotland, who is responsible in Scotland. Perhaps he can get the Scottish figures from the Under-Secretary now or arrange for him to intervene and give them to the House.

Sir George Young

The marriage value is the extra value that would accrue to the tenant if he is entitled to buy the property. It is the difference between the value of the site with a sitting tenant and the value of the site with vacant possession. It is a matter for negotiation, when one sells a site with a sitting tenant, to whom the marriage value accrues—to the sitting tenant or to the landlord. The interests of the taxpayers must be preserved and a proportion of the marriage value must come back to the development corporation.

I shall deal in a moment with the community-related assets, which is what is left if one disposes of the revenue-earning assets, as we are at the moment.

As to the last question, I am sure that my hon. Friend the Under-Secretary of State for Scotland made a note of it and will deal with it as best he can.

Mr. Murphy

May I impress upon my hon. Friend the concern that is still being expressed by many sitting tenants—who wish to purchase commercial or industrial assets—about whether they are given sufficient advantages in the purchase procedure?

Sir George Young

The best answer to that is that if my hon. Friend will draw to my attention any problems that affect his constituents I shall do what I can to resolve them.

I was asked by the hon. Member for Harlow (Mr. Newens) about the position of small tenants. There is no case for giving tenants of commercial and industrial property especially favourable terms for buying their premises. It is important for the taxpayer to get a fair share of the marriage value through the new town corporations. Tenants have an opportunity to buy at a fair price, something that was denied to them by the Labour Administration.

A number of hon. Members asked me about housing transfers and section 10. We are making progress towards a settlement of authorities' claims for grant under section 51 of the New Towns Act 1977, formerly section 10 of the New Towns (Amdt) Act 1976, and towards the cost of remedial work on former new town houses. We have asked the National Building Agency to advise us on those claims. The work is due to be completed by the end of May by a company established by former staff of the agency. We aim to take a final decision on the extent of assistance to be made available as soon as possible after we have received the report and held any further discussions with the authorities and with the Association of District Councils. If the ADC had not rejected the offer that we made in January 1980, the authorities could have been receiving some grant during the current year. I hope that it will be possible to reach an equitable settlement. In the meantime, we have made it clear to authorities that they can carry out any urgent work without in any way prejudicing their claims.

Mr. Graham

Can the Minister be categorical and say that, once the NBA report has been received, before the Government finally make up their minds about their action, they will provide the new towns, through the ADC or otherwise, with an opportunity to discuss or challenge the NBA report?

In a new town that I know the figure that has been calculated by the district council to put right the inherent design defects is about £7 million. I assume that it is possible that the NBA may say to the Minister that the figure should be £4 million. I am not saying that the Minister should accept the figure of £7 million rather than £4 million, but the district councils should have at least an opportunity to challenge or question the report. At the end of the day, the Minister and his colleagues will make up their minds, but there is a great anxiety that the Minister may produce a fait accompli. May the district councils understand that no action will be taken until the people who must spend the money and suffer the consequences have an opportunity to challenge the figures?

Sir George Young

It is indeed our intention that the report commissioned by the NBA should be available to the district councils and the ADC and that there should then be a period of consultation so that we can come to an amicable settlement. I hope that that assurance is acceptable to the hon. Gentleman.

A number of hon. Members raised the question of grant-related expenditure assessments for the authorities in which the new towns find themselves. I do not think that any hon. Member thinks that the GREA gives his constituency a fair deal, but most, although not all, district councils with new towns in their areas are spending at levels well above the GRE assessments that underpin the block grant system. The assessments for those authorities are made on the same basis as for any other authority. To the extent to which they have chosen to provide a higher level of service than the average, it is right that they should be expected to make a larger contribution from their own resources than authorities that have chosen to provide lower levels of service and to levy lower rates. That is what the block grant system achieves using the GRE's as a measure of what it costs each authority to provide a typical level of service.

I concede that the GRE is a new system and will not be perfect in its first year of operation. There may be factors that affect what authorities need to spend but which are not incorporated in the formula, and others which have not been given enough weight. One change that the Government have made to the GREs for next year will assist a number of new town authorities. We have dropped the assumption incorporated in the 1981–82 GREs that authorities with the potential to make a surplus on the HRA would transfer it to the rate fund. That will certainly reduce the disparity between expenditure by new town authorities and their grant-related expenditures.

The Government are always ready to consider further proposals for improvement in the GREs so long as they are based on principles that can be applied to all local authorities, which is a legal requirement of the GRE method.

My hon. Friend the Member for Welwyn and Hatfield (Mr. Murphy) put Government policy in the context of our strategy for inner cities and for harnessing the resources of the private sector in housing, commerce and industry. I was grateful for his strong support for the Government's proposals to put right the imbalance that has arisen in the ownership of assets in new towns. He pressed me and my hon. Friend about the Commission for the New Towns. In September 1979 my right hon. Friend the Secretary of State announced that the commission would be retained for the present, but that it would be wound up in due course. I cannot say when that will be, as legislation is required, but we have given the commission an assurance that it will not be wound up before the end of 1984. In the meantime, however, we have urged it to dispose of its industrial and commercial assets to the private sector and it has played a major part in the disposal of assets programme. The Government have also asked the commission to open negotiations with those local authorities that have commission towns in their area about the transfer of its remaining responsibilities that cannot reasonably be included with the sale of properties to the private sector. Government policy is that the commission should withdraw from those towns in which it has responsibilities as soon as it is practicable for it to do so.

A couple of weeks ago I visited Harlow and had talks with the leader of the council and the chief executive about section 10 and other matters. It is important to remember that work on urgent repairs can take place. One must send a message to Harlow that properties transferred to it by the development corporation were transferred at outstanding loan value and that if it made slightly quicker progress to sell properties to tenants who wished to buy them it would have more resources to tackle the serious housing problems that it faces.

Mr. Graham

In the absence of my hon. Friend the Member for Harlow (Mr. Newens), I must point out that he was concerned at the terms on which the non-industrial and non-housing assets would be transferred. Did I understand the Minister to say that there would be sympathetic discussions between the Government and the authority concerned? If it is proposed that only the unprofitable communally used assets are to be transferred to the authority and the profitable ones are to be given to privateers, the situation will be extremely difficult. Can the Minister give an assurance that sympathetic consideration will be given to the terms on which district councils accept that kind of asset?

Sir George Young

That is really a matter for negotiation between the district council and the Commission for the New Towns. Some community-related assets such as club premises are leased by development corporations to private tenants and others, such as playing fields, are leased to parish councils, and we have asked the development corporations to give such tenants the opportunity of buying the freehold. Other assets, such as parks, are the type of community asset normally provided by district councils. We believe that assets of that kind should pass to the local authorities, and we are encouraging the new towns to negotiate the terms of transfer with their own local authorities. We shall be considering with them the kind of terms that provide a fair balance between the interests of the taxpayer and those of the ratepayer.

A number of hon. Members asked about the totality of cash flowing either from the Government to the new towns or in the reverse direction. The simplest way to put it is to explain briefly what has happened in the three financial years from 1979–80 to 1981–82. Gross capital expenditure for new towns in England and Scotland will be £1, 092 million and capital receipts over the same period will be about £444 million, so net investment by the Government in the new towns will be about £650 million. There is, therefore, no question of the Government asset-stripping the new towns and giving the money to the Treasury. The flow of money is the other way. That is why we need the Bill, to enable the new towns to borrow more money.

The hon. Member for Edmonton asked about disposals at the behest of the Government. The only directions issued under the Local Government, Planning and Land Act were to the commission concerning £24 million and one to Bracknell development corporation for £7£5 million.

My hon. Friend the Member for Basildon (Mr. Proctor) made a very thoughtful speech. I cannot go further than what my hon. Friend said about the review of the financial position of the new towns, but I undertake to keep hon. Members informed about the progress of the review. Hon. Members seem to forget that the reason why my hon. Friend represents Basildon and Mr. Eric Moonman is now chairman of an area health authority is that the policy of not selling council houses to tenants was unpopular. Swings against the Labour Government in the new towns were among the largest in the country, and I see that the hon. Member for Harlow is down to his last 1, 400 votes.

My hon. Friend the Member for Basildon spoke with justifiable pride about the shared ownership and other partnership schemes in Basildon. I have been to see them myself and spoken to young couples who had queued through the night to put down a deposit on a property available to them under the shared ownership scheme, which had brought house purchase within their reach for the first time. I was enormously encouraged by the progress being made in Basildon and other new towns in devising ingenious new methods of making house ownership available to people with average incomes. Instead of posing questions, my hon. Friend answered questions and I have nothing to add to what he said when he referred to a parliamentary question tabled before Christmas.

My hon. Friend asked about the liberalisation of the regime for getting private finance into the new town programme. If a new town borrows from the private sector to carry out development on its own account, that expenditure counts as public expenditure and must be controlled as such. It is only when the private sector takes a significant share of the risk that the expenditure does not count as public expenditure.

My hon. Friend referred to a limit on borrowing by the Basildon development corporation of about £500, 000 and asked for it to be increased. I think that he was referring to the limit on its bank overdraft. In fact, the Basildon overdraft limit is £1 million and the development corporation has not asked for it to be increased.

The hon. Member for Dunbartonshire, East (Mr. Hogg) put the matter in a slightly broader context, relating it to the real problems facing parts of Scotland. The Government will do what they can to help the new towns, but they cannot be totally insulated from economic developments in the country as a whole. The new towns stand to gain perhaps more than any other areas from the upturn in the economy that our policies will secure—[Interruption]—however distasteful the prospect of that success may be to the Opposition.

The hon. Members for Dunbartonshire, East and Glasgow, Garscadden (Mr. Dewar) tried to tempt me into Scottish local government issues. After 13 years, I think that I understand local government in England. I considered local government in Scotland, and the learning curve seemed rather steep. I shall ask my hon. Friend from the Scottish Office to write to those two hon. Members about some of the issues they raised. I am sure that those letters will be of the highest quality.

My hon. Friend the Member for Buckingham (Mr. Benyon) urged us to introduce basically publicly owned property companies. We have done that with the urban development corporations in Liverpool and the Docklands.

In a lengthy speech, the hon. Member for Newton asked whether the PSBR would be increased by the measures before the House. The Bill increases the statutory limit and that is necessary to enable new towns to carry out the programmes foreseen in the public expenditure White Paper. Those programmes, taken as a whole, determine the PSBR. The hon. Gentleman was muddled about the legislation on new towns. The legislation of three months ago was basically a consolidation measure, and it would not then have been possible to increase the borrowing limit. I was grateful for his support, but the limit on the consolidation measure was fixed earlier and it was impossible to increase it last autumn. I am grateful for the support that he extended to the newly appointed chairman of the Warrington development corporation and I was delighted to hear of the demand for housing land in his constituency.

The hon. Member for Newton also raised an important local issue about Pewterspear, which I am sure hon. Members should not decry. A three week public inquiry was held last autumn into planning proposals and an associated compulsory purchase order for a science park and high quality residential development on 101 hectares of land at Pewterspear and at the southern end of the new town. The inspector's report is still awaited and the proposals may have implications for the consideration of future infrastructure needs and, particularly, a new high level crossing of the Manchester Ship Canal. They will be considered when we have the inspector's report.

My hon. Friend the Member for Liverpool, Wavertree (Mr. Steen) asked what the money would be spent on. Basically, the money will enable new towns to carry on with the programmes that are set out in some detail in each new town's annual report. It is not being done at the expense of inner cities. When the Minister of State introduced the Bill, he said that public expenditure is now being concentrated on the inner cities. This means that the resources for the new towns will fall, while the urban programme, including provision for the two urban development corporations, is being increased. I can reassure my hon. Friend for Wavertree on that point.

My hon. Friend the Member for Wavertree raised many issues that are for the Treasury to deal with rather than me. However, as I understand it, the borrowing in sterling does not preclude borrowing in pounds, but that must be done by the Secretary of State. The provisions governing from whom a new town may borrow were introduced by the Statutory Corporations Financial Provisions Act 1974.

Successive Governments have taken the view that, in general, public bodies borrowing in long-term sterling should be managed by the Treasury and no use has yet been made of the power to borrow in foreign currencies.

Mr. Steen

I am grateful for my hon. Friend's remarks. However, I urge him to correct one statement in his excellent speech. He said that new town borrowing did not affect inner city investment. Successive Governments have concentrated on the inner cities and neglected the problems of the middle and outer cities.

Will my hon. Friend say something to reassure the majority of the population living in the middle and outer areas of large, industrial cities that the new town development will not be at their expense?

Sir George Young

I hope that I can give my hon. Friend that reassurance. However, it would involve a rather lengthy intervention into our policy towards inner cities and those areas just outside, one of which I represent. I can assure my hon. Friend that in deciding how resources are allocated, we have in mind the inner city's problems and the outer ring, on which he has written some imaginative leaflets. He will find that our inner city strategy takes on board some of the points that he has made in his thought-provoking literature over the past two or three years.

The hon. Member for Fife, Central (Mr. Hamilton) made it clear that he had two prides—the National Health Service and new towns. For the past two and a half years I have listened to his speech about the NHS and, for the first time this afternoon, I heard his very good speech on new towns, which had some remarkable aspects in common with his NHS speech. The hon. Gentleman hankers after a golden age between 1945 and 1950 and turns a fairly blind eye to everything that has happened since. He called for a Scottish Minister to reply and I have heard the same call time and again during debates on the NHS. The hon. Member for Fife, Central did not set about canvassing Lady Balfour's support for his policies in a tactful way. I am not surprised about how she reacted.

The hon. Member for Garscadden asked what percentage of the money would be available to Scotland. The historical picture is that borrowing in 1980–81 and 1981–82 for Scottish and Welsh new towns was £73 million in the first year and £78 million in the second out of totals of £440 million and £381 million. Therefore, in 1980–81, as I understand it, Scotland received about 16 per cent. and about 18 per cent. in 1981–82.

There has been unanimity on two points during the debate. First, hon. Members have welcomed the Bill and, secondly, deplored the absence of members of the Social Democratic and Liberal Party alliance. Whether or not the alliance has broken the mould is a matter for debate, but its silence certainly remains intact.

Anyone concerned about new towns will be grateful for the interest and commitment of those hon. Members representing them who have spoken. The Government share that interest and commitment and the Bill before the House is evidence of that.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Thompson.]

Committee tomorrow.

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1. NEW TOWNS (MONEY) 133 words