HC Deb 15 November 1982 vol 32 cc19-32 3.31 pm
The Secretary of State for the Environment (Mr. Michael Heseltine)

With permission, Mr. Speaker, I will make a statement about certain public expenditure programmes for the Department of the Environment. This follows the statement made by my right hon. and learned Friend the Chancellor of the Exchequer on 8 November. Details are being laid in the Vote Office. I shall also announce the designation of new enterprise zones.

As my right hon. and learned Friend said, for the first time since 1977 a Government's public expenditure plans have not had to be revised upwards from one year to the next. The total of planned expenditure for my own programmes has also remained broadly the same. However, as a result of the considerable success of the programme of sales of council houses and of other assets, significant additional resources are now being realised by local government. In 1983–84 these sales should be worth about £1,750 million. This allows for a marked increase in certain capital programmes.

I deal first with housing. For the current year I have asked local authorities to accelerate their capital programmes in order to spend closer to the national provision. I have offered additional capital allocations for all authorities which need them. Local authorities can increase their expenditure on home improvement grants this year without limit. The Government agree with the proposal—endorsed by The House Builders Federation—that local authorities should buy completed, or nearly completed, low-cost homes direct from house builders for sale, under shared ownership arrangements, to first-time buyers and those on the waiting list. I urge local authorities to promote these schemes.

I have also discussed with the Housing Corporation the effective use of additional resources this year. I have agreed an increase of £150 million in the corporation's cash imit for 1982–83 to £680 million. This allows additional expenditure on fair rent, hostel and low-cost home ownership schemes and the refinancing of private borrowing guaranteed by the corporation.

For 1983–84 the gross capital provision for housing will be increased from this year's provision of £3,190 million to £3,243 million. This is about £340 million above the expected outturn for the current year, taking account of the forecast additional spend from my statement today. It will sustain a substantial increase in construction and improvement activity. I have already announced the continuation of the higher improvement grant rates until the end of 1983–84. I shall be taking additional steps to assist local authorities to meet the resulting demand.

I deal now with other Department of the Environment programmes. For the current year, 1982–83, local authorities have been invited to seek any additional allocations they need for derelict land, urban programme expenditure, or other projects. The grant to the Sports Council is also being increased to allow increased capital expenditure, particularly in communities where the needs are greatest and where the development of small facilities can provide a basis for partnership between voluntary organisations and local government. The Minister for the Arts and I are making a further grant of £5 million to the national heritage memorial fund. I will also provide additions to the grants to the Nature Conservancy Council and the Countryside Commission.

A breakdown of Department of the Environment programmes for 1983–84 is shown in the figures placed in the Vote Office. The external financing limit for water authorities will allow capital investment to be increased from £632 million to £677 million. Provision for gross capital expenditure on local environmental services will be £605 million compared with forecast outturn this year of £481 million. Within the smaller programmes there will be an increase in the heritage, conservation and sports budgets from £156 million to £165 million.

I shall be concentrating further additional resources on the urban and derelict land programmes. The House will be aware that I recently launched a new initiative under the urban and derelict land programmes and invited local authorities to submit viable schemes, provided that they attract substantial funds from the private sector. The response from local government and the private sector has greatly exceeded expectations. We have bids of £275 million from the public sector put forward in conjuction with a potential further £900 million of investment from the private sector, spread over a number of years. Our initial appraisal shows that in the first year a public contribution of £85 million could be necessary. I have therefore increased accordingly the £70 million originally earmarked. Substantial private sector funds will flow as a consequence of this injection of Government support. The balance of both public and private expenditure will be invested over subsequent years.

In addition, I am increasing the remaining special budgets for the urban and derelict land programmes. Including the £85 million for the joint schemes, the urban programme will be increased from an expected outturn of —280 million this year to —348 million next year, the derelict land programme will be increased fom £59 million to £75 million; and the resources of the urban development corporations of London and Merseyside will be increased from £64 million to £67 million. In total, the public expenditure provision for these programmes next year will be £490 million—an increase of £87 million or 22 per cent. on the likely outturn for this year.

As a further part of our efforts to restore economic health to rundown industrial areas, I can tell the House the Government's decisions on the designation of new enterprise zones in England.

My right hon. and learned Friend the Chancellor of the Exchequer announced on 27 July that the Government intended to designate 11 new zones, seven of them in England. More than 50 English authorities have submitted bids, many of high quality.

As a result, the Government have decided that, in England, we should go ahead with nine new zones; in Allerdale and North-East Lancashire in the North-West; Rotherham and Scunthorpe in Yorkshire and Humberside; Telford in the West Midlands; North-East Derbyshire and Wellingborough in the East Midlands; Middlesbrough in the North-East; and in North-West Kent, including parts of Rochester, Gillingham and Gravesham. The Government have also decided to extend the existing zones at Speke in Liverpool and Wakefield in West Yorkshire. There will be further detailed discussions.

These programmes give priority to capital expenditure. Significant additional resources arise from the success of local government—which I commend—in selling council houses to their tenants and in realising other assets. The announcements today underline our commitment to the inner cities and to the restoration and improvement of some of the most rundown and depressed industrial areas of our society, and there is an enhanced opportunity for capital investment by much of local government.

Mr. Gerald Kaufman (Manchester, Ardwick)

If the statement were genuine, it would mark a notable U-turn by the Secretary of State. Why is it that whenever the Secretary of State comes to the House with carefully selected statistics, right hon. and hon. Members know instinctively that he is trying to deceive the House? [HON. MEMBERS: Withdraw.]

Mr. Speaker

Order. If the right hon. Member for Manchester, Ardwick (Mr. Kaufman) examines "Erskine May", he will find that "deceive" is an unparliamentary term.

Mr. Kaufman

I readily withdraw the word "deceive" and substitute "mislead". How does the Secretary of State have the brass neck to come to the House and say that he wishes the housing associations to spend more when, less than two months ago, he imposed a three-month moratorium on the housing associations because he said that they were spending too much?

In his statement the right hon. Gentleman provides a figure for housing capital of £3,243 million. Does that include capital receipts and housing associations? If it does, on the basis of a 6 per cent. inflation rate it means an increase of 5 per cent. on this year's provisional outturn, which he describes as a disastrous underspend. However, if capital receipts and housing associations are included, it means a disastrous reduction in the basic housing investment programme allocation of 14 per cent. That is a total reduction of 60 per cent. since he took office. In 1979 the Secretary of State spoke about over-provision by the Labour Government, which he then cut. The over-provision of 1979 becomes an underspend in election year. His bonanza is at best a 5 per cent. increase and, at worst, a 14 per cent reduction.

As to capital receipts, can the Secretary of State give us his assumption of council house sales for the next financial year, as against the latest available information on current sales, because local authorities cannot plan on the basis of notional capital receipts? They must be told of their allocations for forthcoming years and this statement does not do that. Will the rate support grant settlement compensate local authorities for the interest on capital receipts which the right hon. Gentleman is asking them to forgo? If it does not, there is an incentive to retain the receipts rather than to spend them.

The Secretary of State admitted that the "spend, spend, spend" initiative of two weeks ago will mean, if it is fulfilled, expenditure in the next financial year rather than mostly in the present financial year. As the capital expenditure which the right hon. Gentleman announced today will take place in the next financial year, when the GREA amnesty on rate support grant penalty will not apply, will he promise that the current expenditure and loan charges consequent on the capital expenditure that he is now asking local authorities to make will be exempt from rate support grant penalty? If he does not make that commitment, local authorities will not be encouraged to spend more but will be deterred from doing so.

Is the Secretary of State aware that the increase in the urban programme for this financial year, including the derelict land grant and the urban development corporation resources, comes to £87 million at 1983–84 prices? However, this year he is imposing on the same authorities a rate support grant penalty of £47 million in 1981–82 prices. All but six of those authorities are liable to penalty on the rate support grant in the current financial year and a similar number in the next financial year. The local authorities to which he pretends to be so generous are being forced to finance his generosity by a reduced rate support grant and housing subsidy and massive rate support grant penalties. As a result of his largesse, the local authorities will be net losers on the urban programme.

The Secretary of State has shown once again that he is an expert cosmetician, but a disastrous Secretary of State for the Environment. He should withdraw this statement, which reduces housing investment programme basic allocations by 14 per cent. and forces local authorities to finance their own urban programme allocations, and return to the House with a genuine stimulus to the construction industry, which he has done so much to damage.

Mr. Heseltine

The right hon. Member for Manchester, Ardwick (Mr. Kaufman) mentioned carefully selected statistics. The difficulty is that if I did not select the statistics carefully the right hon. Gentleman would not understand them. In trying to approach the problem of shift resources from the current consumption of local government to the capital reconstruction of our urban areas, the right hon. Gentleman should remember that he was part of a Government who cut local government capital expenditure by half. In his final year at the Department of the Environment there was an underspend of about £400 million on housing alone. The right hon. Gentleman should realise that we are now trying to create the shift in policy about which he is always talking but which he could not deliver when the Labour Party was in power.

The housing associations were expected to keep within their cash limit. That is the regime to which the tight hon. Gentleman would have been expected to adhere had he been Secretary of State for the Environment. The ability to raise the cash limit, as with the extension of other programmes, has happened because of the significant local government underspend that we are now trying to manage with significant success, especially bearing in mind the time of year when the Government are made aware of local government underspending.

The right hon. Gentleman asked me about next year's capital receipts. We expect about 140,000 houses to be sold. That is about 20,000 less than this year's assumption, but the House must realise that we are relying on the best available evidence.

The right hon. Gentleman asked whether I would compensate local authorities for the fact that they are expected to use their own capital and would, therefore, forgo the right to interest arising from that capital. The answer must be "No", because that must be left to the discretion of local government and not central Government. The right hon. Gentleman asked me about urban programme exemptions for partnership or programme local authorities. We intend to carry, through the exemption from holdback that we adopted in 1981–82 into 1982–83 and 1983–84 for the increase in urban expenditure from the previous base years.

The right hon. Gentleman asked whether the rate support grant penalty on the current account should be included in our calculations. I reject that concept. The rate support grant holdback penalties are self-imposed by authorities which believe in increasing their current expenditure at the expense of their capital programmes. That is the wrong priority.

Mr. Kaufman

Does the Secretary of State acknowledge that if local authorities spend their capital receipts in the way that he advises they will forfeit the interest payments on those capital receipts and he will not compensate them? What incentive is there for local authorities to do that?

Secondly, will the right hon. Gentleman acknowledge that there are inevitable current expenditure conseqences on the capital expenditure that he is advising local authorities to undertake, that there are inevitable loan charges on that capital expenditure, and that he is now saying that if they go ahead and incur that expenditure he will penalise them for doing so? If he does that, local authorities will see through him, just as the country will see through him.

Mr. Heseltine

I have already answered both questions clearly today and on previous occasions. There is no point in my endlessly repeating them just because the right hon. Gentleman cannot understand them.

Mr. Malcolm Thornton (Liverpool, Garston)

Will my right hon. Friend accept the thanks of the many business men in Garston, who will be delighted at the news of the extension of the Speke enterprise zone? Will my right hon. Friend tell me when the new boundaries of the extended zone will come into force?

Mr. Heseltine

I am grateful to my hon. Friend. I share his concern to the Speke enterprise zone, and I took the opportunity to visit it recently. The new boundaries will be the subject of early discussion with the parties involved and I hope to see them in operation next year.

Mr. Stephen Ross (Isle of Wight)

I welcome certain parts of the statement, such as those relating to increasing the grants to the Sports Council and the national heritage memorial fund. Does the Secretary of State accept that finance chairmen such as myself and treasurers throughout the country are becoming increasingly cynical about the way in which he is changing the rules of the game, so that we do not know where we stand now?

Will the Secretary of State look at capital programmes which authorities other than housing authorities might like to put before him? There is the problem of waste disposal plants. In my constituency it is urgently necessary to do something within the next two years, because we have no more holes in the ground available. However, if we do something about it now we shall be penalised on our current expenditure, we shall be cut back and we shall fall into penalty. The right hon. Member for Manchester, Ardwick (Mr. Kaufman) has already drawn attention to the problem. Will the Secretary of State look at those matters on their merit?

Mr. Heseltine

I am sure that the hon. Member, as the leader of a county council, will be aware of and pleased with the fact that we are maintaining the Department's other services provisions, which will include waste disposal, to which he refers. It is very much a subject of expenditure which we would be prepared to consider.

Mr. Alec Woodall (Hemsworth)

Will the Secretary of State accept that his announcement of the extension of the enterprise zone in the city of Wakefield metropolitan district council, which involves the Langthwaite Grange, South Kirkby estate in my constituency, is very welcome? The extension into Dale Lane at North Elmsall and into the Kinsley industrial estate will be widely welcomed in that part of my constituency into which the enterprise zone extends. It is, however the only enterprise zone in the whole of Yorkshire and Humberside.

Is the Secretary of State aware that another part of my constituency is the Deane area, in Barnsley metropolitan borough district council, which is in the Mexborough travel-to-work area, in the area of my hon. Friend the Member for Deanne Valley (Mr. Wainwright)? I have a letter dated 8 November from Mr. D. P. Owen, the headmaster of Thurnscoe comprehensive school, which informs me that at the end of the school year 1981–82, out of 173 school leavers on 8 November, only 31 were able to get a job.

The extension of the industrial estate—the only enterprise zone in Yorkshire—is more than welcome, but will the Secretary of State consider the whole of the Hemsworth constituency and Barnsley metropolitan borough district council, as well as the city of Wakefield metropolitan district council, as we have the highest male unemployment rate in the whole of the north of England?

Several Hon. Members


Mr. Speaker

Order. I hope to call as many hon. Members as possible, but hon. Members must bear it in mind that other hon. Members feel equally strongly about their own areas.

Mr. Heseltine

I hope that the hon. Gentleman will feel able to write back to the headmaster and explain that this year all school leavers will be entitled to work experience under the Government's job creation scheme.

I hope that the hon. Gentleman, in passing on my gratitude for the co-operation of his local authority and for the way that the enterprise zone is working in Wakefield, will point out that many members of his party do not want to see enterprise zones anywhere in any circumstances.

I know that the hon. Gentleman will welcome the fact that there are to be two more zones in Yorkshire and Humberside in addition to the one to which he has referred. Although that zone is now proving to be successful, I cannot go further now than to offer to extend its frontiers.

Mr. Peter Hordern (Horsham and Crawley

Will myright hon. Friend confirm that the local authorities in England have sent returns to his Department showing that there are over 70,000 acres of development land which they own and are not yet developing? As the local authorities between them have borrowed more than £10,000 million from the banks, and as none of the land is being used productively, is it not time that the local authorities were instructed to sell the land for private development and set the construction industry to work?

Mr. Heseltine

I am very grateful to my hon. Friend for his comments. The total figure for unused or underused publicly owned land of an over an acre in size is now approximately 100,000. acres, although that includes land under the control of other organisations in the public sector, as opposed to local authorities. It is the responsibility of my Department continually to draw local authorities' attention to the opportunities that the land represents and to do everything in our power to get it into productive use.

Sir Frederick Burden (Gillingham)

My right hon. Friend will appreciate that we in the Medway area are very grateful for his announcement today that the Medway and North-West Kent will be a new enterprise zone. However, he will appreciate that there are particular difficulties there, the most important of which is the proposed closure of Chatham dockyard. I hope that even at his late date the decision will be rescinded.

In creating the new enterprise zone, will my right hon. Friend ensure that there will be the closest possible co-operation between the Department of the Environment, the Department of Trade and the local authorities? That is vital if the local authorities are to benefit in any real way from the reduction of unemployment in the area.

Mr. Heseltine

I very much agree with my hon. Friend. I have visited the area and have recently seen a delegation from the local authorities in the area, who came to talk to me about the potential for an enterprise zone there. I agree that it will be necessary for all public sector bodies to work closely with one another and with the private sector. I shall draw the views of my hon. Friend to the attention of my right hon. Friend the Secretary of State for Transport.

Mr. Allan Roberts (Bootle)

As so many hon. Members want enterprise zones, will the Secretary of State consider moving the one in Speke to one of their constituencies? In Merseyside it is taking industries from the docklands to Speke so that they may get the benefit of the cheaper rates and is not creating any new jobs.

Will the Secretary of State tell the Merseyside Development Corporation not to spend its extra money on reclaiming land as a subsidy to developers, as even then the developers do not come and build on it?

Mr. Heseltine

I think that when the hon. Member gets back to Merseyside and consults the local authorities he will find that they are happy with the prospect of extending the enterprise zone at Speke.

Mr. Ronald W. Brown (Hackney, South and Shoreditch)

The Secretary of State referred to the sale of possibly 140,000 council houses. How much money does he expect to derive from the sale of the other assets?

Will the right hon. Gentleman understand that in placing reliance on home improvements grants he faces the problem that no one wants to have the work done in the winter? Therefore, will there be flexibility for those who undertake to have the work done during the next year?

Is it possible to have loan charges and interest rates put against the capital account?

Mr. Heseltine

The answer to the last of the hon. Gentleman's three questions is that what he suggests would not be practical, possible or desirable, as it is very much a current expense and not a capital expense. The hon. Gentleman's second question concerned the need to give some indication that the level of improvement grant work could be continued next year. I expect to be able to identify a reasonable level of expenditure on improvement grants next year and to tell authorities that any expenditure on improvement grants above the identified figure will be matched by an increased allocation.

With regard to the level of receipts expected from other than housing sources, the figure is tentatively £360 million.

Mr. Michael Brown (Brigg and Scunthorpe)

Will my right hon. Friend acknowledge the grateful thanks of the Scunthorpe Labour-controlled borough council for his response to the arguments that they put to him? Notwithstanding the fact that the severe unemployment in Scunthorpe will not be solved by the enterprise zone alone, will my right hon. Friend acknowledge that Labour-controlled local authorities recognise that enterprise zones will be able to play a part in the regeneration of British industry?

Mr. Heseltine

My hon. Friend raises an interesting dilemma for the Labour Party. While on its national platforms it decries enterprise zones, when it comes to the real world, Labour authorities apply for them.

Mr. Douglas Jay (Battersea, North)

Will the Secretary of State give an assurance that when local authorities have completed these capital projects he will not then instruct them to close them to save money?

Mr. Heseltine

The right hon. Gentleman will know that all Governments try to maintain a proper balance between the capital and current expenditure parts of local government. I should greatly deplore being part of a Government who did what the previous Government did, which was to allow current consumption to rise to record levels and to halve the level of capital expenditure.

Mr. Peter Fry (Wellingborough)

On behalf of the people of Wellingborough, the council and myself, I sincerely thank my right hon. Friend for his statement. We are very glad that he and the Government listened to our representations. Above all, I thank him for giving renewed hope to the above average number of young school leavers in my constituency.

Mr. Heseltine

I am grateful to my hon. Friend for his statement. The enterprise zone at Corby in the East Midlands has been a significant success. I very much hope that Wellingborough will be able to demonstrate similar results.

Mr. Reginald Freeson (Brent, East)

Is the Secretary of State aware that I have been asking his hon. Friend the Minister for Housing and Construction, since June at least, to switch resources within Government programmes because of the prospects of underspend? I have not yet had a reply to the specific proposals that I put to him and invited him to meet me upon.

More specifically, will the right hon. Gentleman advise local authorities at any stage to use some part of these massive capital receipts to which he has referred to re-finance borrowing, in the same way as he is advising the Housing Corporation to do, in order to reduce revenue costs to the ratepayers?

Finally, does the right hon. Gentleman really expect local authorities to undertake any significant increase in capital investment in the remaining three and half months of the financial year without informing them of what their allocations will be after 31 March? Is this not an example of conning the public and local authorities?

Mr. Heseltine

Perhaps I should remind the right hon. Gentleman and his right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) of the situation in the Department in which they served. The local authorities make up their returns to the end of June, which then have to be submitted to the Department. In practice, one does not know the likely capital trends until the autumn. While it is possible for the Opposition to make assertions about what will happen, that is not practical in Government until much later in the year.

The right hon. Gentleman asked about the effect of revenue interest charges arising from the receipts. Those are already taken into the revenue accounts of local government, because the revenue from deposit accrues to the current accounts of local government. If the right hon. Gentleman has any suggestions to put forward that will enable local authorities to take up their particular allocations or their flexibilities under capital receipts, he has only to make those suggestions to his own local authority and we can then consider them.

With regard to the general view about next year's allocations, we hope to make the HIP announcement before the end of the month.

Mr. Anthony Steen (Liverpool, Wavertree)

Will the Speke enterprise zone allow a new airport terminal to be built within its boundaries, or will my right hon. Friend concentrate on the old airfield? Secondly, is my right hon. Friend considering the establishment of a free trade zone on the old airfield at Speke?

Mr. Heseltine

My hon. Friend is concerned with the concept of a free trade zone. The Government have considered it but have not been able to take a positive decision in favour. It will be possible for the extension of the zone to embrace the possibilities of commercial development in association with the airport at Speke.

Mr. Derek Foster (Bishop Auckland)

Is the Secretary of State aware that he has only himself to blame for the mess in the construction industry and the mess in local authority finance? If he continually urges local authorities to economise on revenue expenditure and at the same time urges them to spend, spend, spend on capital expenditure, is he surprised when they become increasingly sceptical and cynical about his instructions? Is he further aware that the best thing that he could have announced for South-West Durham is an increased grant for Sedgefield district council, to allow it to undertake repairs under section 51?

Mr. Heseltine

I can understand why the hon. Member feels it necessary to make those assertions, but what is interesting is the number of bids that are being put in to my Department and the significant expenditure that will prove to be possible in the relatively short period available to us. That is different from the assertions being made from the Opposition Benches and in some parts of the national press. On the early indications—we are dealing with tentative figures both about the scale of the underspend and the possible spend that we will be able to make good in the period—it appears that we might be able to make up for about £300 million in the relatively short time that we have. The House will appreciate that that arises because of the underspend that local authorities have created.

Mr. Tim Rathbone (Lewes)

It may be that my right hon. Friend has just answered my question. I was about to ask what limit he envisages to the amount of funds being made available by the Government for local authorities, particularly for those councils that are not housing authorities.

Mr. Heseltine

My hon. Friend has asked how much cash is likely to be available. So far I have mentioned a figure of about £300 million in total for various capital programmes which look as though they may have been added to the programmes since we started trying to make up for the slack created by the local authority underspend. It appears that there might be about £300 million, which would be made up of an increase of £150 million in the cash limit of the Housing Corporation, about £100 million on local authority housing—largely improvement grant bids—and about another £50 million on items such as derelict land grant and the urban programme. I do not want to pretend to the House that there is an endless number of schemes that can be put in, but we are receiving bids from local authorities where they have found that they can make use of this money.

Mr. Ken Eastham (Manchester, Blackley)

Is the Secretary of State aware that many Labour-controlled authorities are not thrilled or excited about enterprise zones? Is he further aware that in the Greater Manchester area the Labour authorities feel that they have been damaging to the inner city programme? There appears to be a measure of muddled thinking on the part of the Secretary of State, who seems to believe that the inner city areas can suddenly embark on a programme of capital projects when they are already short of manpower as a direct consequence of his policies. Will he answer the question of my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman)? If authorities embark on programmes of capital expenditure, what will be the consequences for the revenue accounts of needy areas?

Mr. Heseltine

My experience is that a large number of Labour-controlled authorities are not thrilled or excited about anything. My experience of the figures is that we are now at last seeing an increase in local authority capital expenditure, after years of decline since 1975. That is coincidental with reducing local authority manpower. What is fascinating about the Labour Party's record in Government is that it increased manpower to a record level. According to the hon. Gentleman, that should have led to an increase in capital expenditure. In fact, it halved the capital programmes of local authorities.

Mr. D. A. Trippier (Rossendale)

Is my right hon. Friend aware that his announcement that an area of North-East Lancashire is to be designated as an enterprise zone will be widely welcomed in the area? However, will he be a little more specific and tell us which district authorities the zone will cover?

Mr. Allan Roberts

Whose marginal seat is it in?

Mr. Heseltine

It is a series of three or four specific sites in that area. We shall be discussing the precise boundaries with the local authorities concerned, and I shall keep my hon. Friend informed.

Dr. David Clark (South Shields)

Does the right hon. Gentleman appreciate the seething anger felt in South Tyneside as a result of the Government's turning down our plea for help yet again? Is he aware that one in three of the men in my town—I am speaking not of part of a town, but of a big town of 100,000 people—are without work and that 2,000 or 3,000 will be added to the dole queues this month because of shipyard closures? Will he tell us what a local authority must do to get an enterprise zone, or tell us once and for all, so that we know where we are, that the Government are not prepared to give us any help?

Mr. Heseltine

I am not unsympathetic to the hon. Gentleman, but I have had 50 bids for enterprise zones, against the Government's announcement of a potential seven. The Government have increased the seven to nine and have extended two others, but I readily understand that a significant number of authorities, including many Labour authorities, have been disappointed this time.

Mr. John Lee (Nelson and Colne)

In contrast to some of the churlish and sour comments from the Opposition, may I thank my right hon. Friend for his statement and join my hon. Friend the Member for Rossendale (Mr. Trippier) in thanking him for designating part of North-East Lancashire as an enterprise zone? As has already been proved, an enterprise zone is not a panacea for some of the problems, but it will certainly help, and I assure my right hon. Friend that North-East Lancashire will respond, as is evidenced by the tremendous take-up of the enterprise allowance scheme in the area. My hon. Friend the Member for Rossendale asked about the specific area of the enterprise zone. May I ask my right hon. Friend when he hopes to make a decision about the precise designation of the zone?

Mr. Heseltine

I am grateful to my hon. Friend for his comments. We accept that Rossendale borough council will co-operate enthusiastically with the zone, for which it put in a bid. We intend to contact the council forthwith and hope to see the component parts of the zone in operation next year.

Mr. David Stoddart (Swindon)

Is the right hon. Gentleman aware that hurling insults at my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) is no substitute for giving real answers about the Government's programme, which is too little and too late? Will he give an assurance to local authorities that the revenue consequences of additional capital expenditure will not be used against them in fixing their rates and that they can take on the necessary additional staff to put the programmes into operation?

Mr. Heseltine

I am very upset that the hon. Gentleman should feel that I was less than fair to the right hon. Member for Ardwick. I searched for the most flattering things that I could think of to say about the right hon. Gentleman, but obviously they did not live up to the hon. Gentleman's high expectations.

The hon. Gentleman knows that there is no way in which I can fully protect individual authorities from the cost of using cash that they could otherwise put on deposit. I have made it clear that a local authority that has achieved the Government's targets will find that it is below those targets as a result of the interest arising from its capital receipts and will not be affected by my penalty arrangements. I have today announced significant waivers for urban programmes of partnership and programme status. Certain urban programmes will enjoy immunity on the basis that I have set out.

Mr. Warren Hawksley (The Wrekin)

I thank my right hon. Friend for announcing the enterprise zone at Telford, which will be welcomed in the area. Is he aware that The Wrekin district council refused to apply for one of the original enterprise zones for reasons of political dogma, but has now seen the success of those original zones? Is my right hon. Friend prepared to encourage the local council to include some privately owned land in the area of designation?

Mr. Heseltine

I shall certainly look at the possibility of privately owned land being included. There is a wide variety of practice among local authorities throughout the country. Some zones are on local authority owned land, some on land owned by nationalised industries and some on privately owned land. There is no reason why a mix of all three should not be possible in certain circumstances. I accept my hon. Friend's view that the Labour Party's views towards enterprise zones have changed dramatically at local government level.

Mr. Edwin Wainwright (Dearne Valley)

I welcome anything that will bring jobs to South Yorkshire, because my constituency adjoins Rotherham, Doncaster and Barnsley, but is the right hon. Gentleman aware that the Mexborough district has 23.7 per cent. unemployment and will gain little from what he has suggested for Rotherham? Is the right hon. Gentleman not aware that he s playing ducks and drakes with the employment of men and women by establishing enterprise zones? Instead of creating new jobs, he is transferring jobs from one district to another. Does he not realise that the only hope of reducing unemployment is to give the economy an uplift and to make sure that the benefits are shared out more fairly? If the right hon. Gentleman intends to continue his present policies, let him sit back tonight and ask "How many more jobs have I created through the new enterprise zones?"

Mr. Heseltine

I think the hon. Gentleman will find that new jobs will flow as a result of the enterprise zone policy and from the significant capital spending increases announced today. There is nowhere in the world where simplistic statements about the desire for more jobs actually create them.

Mr. Ivan Lawrence (Burton)

Is my right hon. Friend aware that even those of us who represent areas that do not have an enterprise zone greatly welcome the increased business stimulus and the reduction of unemployment that will follow from his proposals? Will his statement help authorities such as East Staffordshire district council, which has spent its money for mandatory 90 per cent. improvement grants and has, therefore, had to stop the discretionary grants that it would otherwise be allocating?

Mr. Heseltine

I am grateful to my hon. and learned Friend. It will be for the local authority to decide whether it wants to apply for additional allocations this year. We would favourably consider an application, but if the council has unused capital receipts it may already have the flexibility to increase its spending.

Mr. Peter Hardy (Rother Valley)

Is the right hon. Gentleman aware that the announcement of the Rotherham enterprise zone will be greeted with considerable interest in the area and the project will receive effective co-operation from the borough council? Does he share my hope that the zone will significantly increase the net number of jobs in the area and thus represent a substantial step towards alleviating the brutal and bewildering effects of the increased unemployment which we have experienced? Will he tell us how many net jobs he expects the zone to produce for Rotherham within the next two years?

Mr. Heseltine

I should like to help the hon. Gentleman because I sympathise with his views. There has been a substantial rise in unemployment in that area over a considerable period, starting long before the election of this Government. The enterprise zones are creating a new stimulus in areas that are among the most deprived and rundown in the country, and they are introducing work in areas that have been denied that opportunity under earlier initiatives. I hope that the zone will have that effect in the hon. Gentleman's area.

Mr. Peter Rost (Derbyshire, South-East)

Is my right hon. Friend sanctioning more investment for energy conservation in public sector buildings, since that would reduce revenue expenditure, is highly employment-intensive and can be started more quickly than many other capital investment projects?

Mr. Heseltine

My hon. Friend makes an interesting point. The public sector building programme falls largely within the budgets of my Department and the Property Services Agency. We shall find what we can within those budgets for energy-saving investment, but it will have to stand claim alongside many other programmes.

Mr. D. N. Campbell-Savours (Workington)

Is the right hon. Gentleman aware that the release of additional money for capital expenditure programmes and the designation of the Workington area as an enterprise zone will not resolve the acute problems in my constituency, but they will certainly help? On behalf of the Allerdale district council and myself, I offer the right hon. Gentleman our gratitude but express the view that if the proposal does not resolve our problems we shall have to look to all future Governments for far greater initiatives.

Mr. Heseltine

I am grateful to the hon. Gentleman for his comments. As he knows, I have visited the area. I have promised to do what I can to help. I see this very much as a first step. I look forward to returning to the area to see how we can give further help.

Mr. Tim Brinton (Gravesend)

Will my right hon. Friend accept that everyone trying to alleviate the jobs situation in my constituency will welcome the new programme for derelict land and the creation of the enterprise zone? If it is correct that the enterprise zones in Gravesham, Rochester and Gillingham will be small pockets, there are cautious voices in Kent—we have not had enterprise zones before—which would appreciate an answer, or a "guesstimate" of some kind, on how many jobs might be created within the enterprise zones when set against the problems that might occur in Swale or Thanet, which also have hight unemployment.

Mr. Heseltine

My hon. Friend's question touches upon the whole concept of enterprise zone policy. It is very much the same problem that arises over regional policy when certain parts of the country are designated for various incentives. There are always frontiers, and there are always people who are left just outside. Since the early days of enterprise zones, many of the most heartfelt concerns about them in areas just outside the zones have not been manifested. There is some early and tentative evidence that the surrounding areas may begin to gain as the enterprise zones fill up.

Mr. Frank Dobson (Holborn and St. Pancras, South)

Will the Secretary of State give the total value of housing schemes submitted to his Department by local authorities in this financial year that have been turned down and say what proportion they represent of what he calls local authorities' underspend on housing schemes? In the furtherance of the alleged principles of his statement, will he cease to interfere with the schemes that have been put forward and at least make sure that none of his officials again suggests this year that local authorities might leave damp-proof courses out of some of their proposed housing schemes?

Mr. Heseltine

I take it that the hon. Gentleman is referring to the project control system which we operate and not to the overbidding process through the HIP system. In regard to the project control system, we intervene in about 5 per cent. of the number of schemes going through. This compares with 100 per cent. intervention under the previous Government, when it was necessary, to get a single scheme approved, to complete six forms and answer 80 questions.

Mr. Andrew Faulds (Warley, East)

I welcome, restrainedly, the moneys announced for the National Heritage Memorial Fund. Will the right hon. Gentleman confirm that if one or two major heritage properties were to come on the market the trustees would be entitled to approach him in the expectation that he would grant additional moneys for those properties?

Mr. Heseltine

The hon. Gentleman will realise that his question relates to a hypothetical situation. Everyone realises the contingent risks. In my experience, some of the risks take longer to materialise than one might fear, which is a great help in respect of available public resources. We have a close relationship with the various heritage bodies. When a national heritage crisis arises, we try to meet it.