§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Archie Hamilton.]
1.38 am§ Mr. Harry Greenway (Ealing, North)There is widespread anxiety among the business community in west London over what they consider to be severe hindrances to economic growth, hindrances which could well be repeating themselves in some form in other constituencies. To bring this anxiety into perspective it should be noted that the industrial and commercial community of west London stretches from the heart of inner London Hammersmith and Fulham through Ealing, Hounslow and Hillingdon to Heathrow airport. Hon. Members who represent these areas are very concerned about industry in the area. I note the presence in the Chamber of my hon. Friend the Member for Ealing, Acton (Sir G. Young), which shows his concern about this important matter.
West London has a total area of 60,000 acres and a working population of nearly 450,000. It contains thousands of vigorous small firms in the manufacturing and service sectors, together with a large number of major manufacturing companies, including household names such as Beecham, Gillette, Glaxo, Honeywell and IBM, many of which make a valuable contribution to our export figures.
A report was recently prepared for the West London Group of the London Chamber of Commerce and Industry, which clearly shows the need for positive action by local authorities, the GLC and central Government in order to bolster industry and commerce in the area and reverse the trend of unemployment. West London has not been insulated from the effects of the recession we have been going through in recent years. Unemployment has risen to levels well above anything experienced in the post-war period, despite the area retaining its basic resilience and the fact that many firms are expanding and consolidating their activities in west London. We should be grateful for the fact that these firms are showing their confidence, not only in the area but in our future economic position and that some local boroughs are supporting the initiatives of business men by designing land for industrial estates.
However, business men feel, and I agree with their view, that, despite all the hopeful pointers for the future, certain factors are bearing down on them and making it more difficult for them to compete. Some of these factors are the fault of the boroughs, some the fault of the GLC and others the fault of central Government. In particular, three issues stand out as of prime concern—regional planning, the burden of rates and transport policies.
Let me deal with each in turn, but before doing so I should like to quote what was said recently by Mr. Keith Barratt, the chairman of the west London group of the London Chamber of Commerce and Industry. He is convinced that should the appropriate measures that I am about to outline be acted upon, the result will be more jobs for west London and that the area could become a growth pole for the wider region, with significant spillover effects for the whole of London and, indeed, our industrial and commercial recovery as a whole.
For much of the post-war period, regional planning policy has been based on offering business men as a whole a series of incentives aimed at encouraging them to go to 304 some other part of the country. In reality, this has effectively meant a policy that has restricted the freedom of some business men to expand or locate in their preferred sites.
In times of overall prosperity and industrial growth, this policy may be defensible, although some would even question that—myself among them. However, in a recessionary economic climate, the costs of such a policy to the community are indefensible. Surely no one would disagree that every possible investment should be sought and encouraged wherever it may be proposed. I emphasise the importance of this. There is no doubt that London as a whole is affected by attempts to direct industrial and commercial development to regions such as Wales, Scotland and the north-east—away from London. Tragically, the result is that this policy merely causes the supression of expansion. It harms London, but produces no benefit elsewhere either.
Put another way, it is now widely agreed that the nation's education standards are not improved by condemning or damaging the growth of good schools. The same applies to industry. Industrial prosperity is not boosted by unfair discrimination against London. Apart from the inner urban sector, west London as a whole does not receive any of the major incentives for industrial development and little official thought is given to encouraging firms to stay in this area. In some cases, when firms move away from London, they take skilled staff with them. Business men in west London do not support or seek indiscriminate handouts of public money, but nor do they seek penalties on operating their businesses in a way that they know will bring the greatest benefits for jobs.
The point has been made that the Japanese operate discrimination against British business men. For many of those same business men in west London, discrimination operates from within, yet it is national economic policy to improve the competitiveness of British industry. This policy is not helped by the discrimination in favour of development areas and suchlike, which makes it harder for industry and commerce in west London to compete on equal terms.
Furthermore, the original concepts upon which this type of regional policy was based are outdated. In some parts of west London, the unemployment rate has recently reached that of Wales. In addition to that discriminatory regional policy, business men in west London are faced by the GLC's operation of its own form of intra-regional policy, whereby certain areas are designated as "preferred" for various forms of activity. This colours the GLC's whole approach to planning applications referred to it by the boroughs, for it has to approve any departures from the Greater London development plan.
Rigid distinctions are made on planning applications as between industry, office and warehouse developments, particularly for change of use applications. In some instances, the zoning criteria have not been changed since the initial development plan of 1965, many years ago. Surely such category distinctions, some of which date back almost 20 years, have no place in the 1980s. What is needed is maximum flexibility, speed and imagination by planning authorities, especially the GLC, in processing applications. The costs of delay to firms and thus to the whole community can be, and frequently are, very severe.
In the longer term, the rating system requires national reform, but, in the meantime, more needs to be done to make rating authorities much more aware of the burdens 305 that rates impose on business, and the adverse effects that they can have on developments, and therefore on employment. Rates must be paid by a given date, irrespective of the financial position of the company. The report to the west London group of the LCCI shows that in many cases high rates cause firms to cut their employment levels, and that in some cases firms are lured to relocate in other parts of the country where rates are lower. This is something that the GLC and other boroughs in west London should consider much more carefully, particularly those—notably the GLC—that are quick to criticise the unemployment levels in their areas.
In the past four years, the average increase in rates in west London has been between 16 and 21 per cent. a year. It has represented the fastest rising element of business costs—higher than the increase in energy prices and in retail prices generally. Naturally the pace of increase has varied from year to year and from borough to borough. Some have made great efforts to try to hold down rate increases in the past year. Notable among those boroughs is the London borough of Ealing, which is Conservative controlled.
However, it must be said that recently the GLC has been responsible for a huge zproportion of the overall rates increase. In some instances the share of the GLC rate in total borough rates levied has increased from about 10 per cent. four years ago to some 25 per cent. now. No one should forget that money that is taken from industry and commerce in that way comes out of resources normally available for financing expansion and the creation of further employment opportunities.
In short, excessive rates cost jobs and can destroy the seedcorn of future business and community prosperity. Although the GLC and some boroughs must take a share of responsibility for what has been happening, it is only fair to point out that disproportionately high rates are not caused solely by the actions of local authorities. It is unfortunate, for example, that rate support grant has been diverted away from London in recent times.
The third area of concern is the need for a fast and efficient transportation network, the lifeblood of business. In many ways west London is ideally situated. It is within easy reach of both central London and Heathrow airport. However, if full advantage is to be taken of that, more attention must be given to improving and developing the road system in particular. The current congestion on roads in many parts of west London is unacceptable, not merely because of the inconvenience. Delays impose real costs on businesses and hamper efficiency at a time when businesses are making great efforts to improve their competitiveness. Unfortunately, the roads issue is complicated by the division of responsibility. The Department of Transport is responsible for trunk roads, the GLC for metropolitan roads, and the boroughs for the remaining primarily residential roads. That generates many problems and paradoxes of funding and determining priorities.
The GLC is completely failing to give priority to many roads for which there is a desperate need. Improvements are required on many roads, including the Uxbridge road. Business depends on efficient routes for goods and materials to and from industrial estates, and those feeder road links must be given high priority. In general, it must be said that the area has a good communication layout from east to west, but that north-south links need considerable improvement. The M25 will certainly 306 provide some help, but a coherent improvement programme is needed within the M25 ring with access to the motorway. There is also need for a fundamental reform of overlapping functions. Wherever possible, the boroughs should have the power of decision and implementation with the responsibility for overall co-ordination—assuming, as I hope it will, that the GLC will be abolished—going to the London Boroughs Association.
Public transport is another aspect of transport policy that requires greater co-ordination. There is a particular scope in west London for more harmonisation between London Transport and British Rail suburban services. Finally, Heathrow airport represents a facility of great benefit to west London, but it could be more efficiently used
Those are some of the areas in which action is needed to improve the commercial and industrial base of west London. There is no doubt that it is an area of tremendous potential for industrial and commercial growth. Its location, diverse industrial structure, abundant and well-trained labour force make it well placed to take advantage of a future pick-up in the economy.
Many local boroughs have a positive attitude to the developments of local industry and commerce. They are providing industrial estates and are keen to work with the private sector in imaginative schemes for site development as well as providing advice on a wide range of business needs. The Conservative-controlled London borough of Ealing has an excellent record of keeping down rates, which is in strong contrast to Labour boroughs such as Brent. However, I speak of the broad area of west London in the debate. Too often the objectives of local boroughs, the GLC and the Government differ.
To sum up, there are three main areas of concern for business men. First, the whole system of planning applications suffers from inappropriate interventions from bodies such as the GLC which inhibit many profitable developments. Secondly, rates—especially those of the GLC—are stemming expansion and employment opportunities. Thirdly, there is an urgent need for the reordering of road priorities in west London and for more powers and money to be devolved to the boroughs.
The labour force in west London has an enormous range of skills and an excellent reputation for being reasonable and relatively free from industrial strife. Any employer setting up a business or wishing to expand an existing one in west London should have no difficulty in obtaining the type of employee he needs, whether that employee be an unskilled labourer or a highly qualified professional. Throughout west London there are outstandingly good public transport facilities by underground and British Rail. Despite the recession, shopping facilities are being steadily improved, an example of which is the major new shopping centre in Ealing.
Finally, the Conservative-controlled boroughs, of which Ealing is an example, while still continuing to produce a good public service, have kept down rates to the lowest possible levels. They should be rewarded with a Government policy that assists and encourages their prudence.
§ The Under-Secretary of State for Industry (Mr. John MacGregor)I congratulate my hon. Friend the Member for Ealing, North (Mr. Greenway) on obtaining this opportunity to bring before the House the question of 307 the needs and opportunities for industrial regeneration in west London. In doing so, he has acted in character. He is assiduous in questions and in correspondence about this problem and is always, as he was tonight, constructive.
As my hon. Friend has emphasised, this part of London has been the focus of growth over many decades and has played a vital part in the growth of the region and the nation. I understand well my hon. Friend's points about west London not being immune from the effects of the recession.. I note the closures, which will doubtless be regretted and cause great anxieties for the families affected.
As my hon. Friend will know well from his contacts with the companies in the area, the recession is worldwide, hitting exporters, because even if they increase their share of export markets, they often find that they are having to fight hard because the markets are declining. No area anywhere, here or abroad, can be immune from the recession.
West London is relatively fortunate in that it has a strong and growing service sector that is still comparatively buoyant and in the longer term may compensate for the declining manufacturing employment in the area. As my hon. Friend says, Heathrow airport dominates this part of London and the construction of terminal 4 should provide a boost of about 6,000 jobs in the area by 1985, even without terminal 5.
West London is also relatively fortunate in that it has, as my hon. Friend has said, the strengths and skills to bring about economic regeneration as industrial patterns change. Not least of its advantages is its strong base of small firms to which my hon. Friend referred. He will know of the strong emphasis that the Government are putting on giving opportunities to, and removing obstacles from the path of, small firms.
When one looks at west London, it is clear that these opportunities are being taken and that there is, as my hon. Friend has said, plenty of confidence in the area's future—the regeneration is already under way. In Ealing alone, between 200,000 and 300,000 sq ft of new factory space has been completed each year in recent years. Developers are confident of the regeneration of west London. Judging by the rate at which the industrial space is being occupied, this confidence is well founded. For example, vacant space on the Park Royal industrial estate has fallen from 26 per cent. in 1979 to 14 per cent. in 1982, despite the recession. Some of the major employers have also expressed their confidence in the area.
It is against this background that I turn to my hon. Friend's particular points, the first of which is regional policy. I wish to make a number of points about this, all of which I hope will help my hon. Friend.
Since this Government came into office, the restrictions on the freedom of business men to expand or locate in their preferred locations has been removed. I announced to the House on 4 December 1981 the suspension of the IDC control. There is therfore no question of this Government directing industrial and commercial development to Wales, Scotland or elsewhere—that situation no longer exists. The stick has been removed and the possible embargo on major developments in the non-assisted areas has gone. Regional policy is now dependent soley on the financial incentives to attract new employment into the areas.
308 The areas for assistance themselves have been reduced. When we came into office, 44 per cent. of the working population was in assisted areas of one form or another. That was a major element of what my hon. Friend would describe as unfair competition for the non-assisted areas. Moreover, it meant that the aid was being spread too thinly and was clearly proving to be ineffective. We have therefore reduced the assisted area coverage to about 27 per cent. of the country. That is right for regional policy, and for the assisted areas. It also means that the unfair competition aspect for the non-assisted areas has been greatly reduced.
Furthermore, many of the schemes in my Department are nationwide. I refer to section 8 of the Industry Act, the small firms measures, support for innovation and so on. In Ealing, since 1979, 16 offers of assistance under the various measures amounting to £868,000 have been given. I sometimes think that the concentration on discussing regional assistance means that companies both in the assisted areas and in the non-assisted areas neglect these other measures. I am sure that my hon. Friend will be drawing them to the attention of companies in his area.
My hon. Friend said that west London does not receive any major incentives for industrial development. That is not so. A large part of the incentives for industrial development and industrial investment in this country, including premises, is given through the tax system and capital allowances which are available all over the country. These incentives and many locational and other advantages are possessed by Ealing and west London. There is much evidence, which I have in front of me, of substantial industrial redevelopment and much evidence of people getting on with the job of providing new jobs to replace the old.
I am sure that my hon. Friend will accept that there must remain a case for regional policy and special assistance to those parts of the country without west London's advantages, with much deeper structural change problems and with persistently higher rates of unemployment. The highest resident-based unemployment rate in west London is 14.5 per cent. in Southall. In my hon. Friend's constituency, it is 7.7 per cent., a tribute to the work of so many there, including himself.
The unemployment rate for the whole of Wales in December was 16.9 per cent. Of the 40 travel-to-work areas in Wales to which he referred, only 14 had unemployment rates below this national figure. It is not realistic to compare the unemployment rate for a small job centre area such as Southall, located within a large travel-to-work area, with the rate for a whole travel-to-work area in Wales. With this perspective, I am sure that my hon. Friend appreciates that west London is not suffering the fundamental structural weaknesses to be found in the assisted areas.
I wish to deal now with planning difficulties and to mention a number of points raised by my hon. Friend. My hon. Friend referred to the difficulties associated with the zoning criteria in development plans. He will appreciate that much of what he had to say was directed to the Greater London Council. I hope that his remarks will be noted by that authority. The Government have been moving in the direction that my hon. Friend has urged. The Government, in the 1981 amendment to the Town and Country Planning General Development Order, ensured that planning permission could be given automatically to changes of use from general industrial and warehousing uses to light 309 industrial use where an undertaking occupies no more than 235 square metres. In circular 22/80 to local authorities, the Government pointed out the damaging effects of rigid zoning policies and encouraged the authorities to take the more flexible approach that my hon. Friend recommends.
My hon. Friend asked for the application of maximum speed and imagination by planning authorities in processing applications. He will know that my right hon. Friend the Secretary of State for Defence did much in his previous capacity to speed up planning procedures and gave particular priority to industrial applications. As a result, in general, 70 per cent. of applications are now processed within eight weeks compared with 60 per cent. when we took office.
I am in total agreement with the points made by my hon. Friend in relation to the rates burden. As my right hon. Friend the Secretary of State for Industry said in Birmingham the other day, these are a heavy and sometimes crippling burden on many companies and we are particularly concerned to ensure that the interests of industrial and commercial ratepayers are safeguarded. We emphasise constantly the threat to local jobs of high spending by local authorities. These are difficult issues that are not directly under Government control. My hon. Friend is aware of the various measures that the Government have taken to bring about a more realistic approach and a more realistic level of expenditure by local authorities. In particular, by proposing a severe holdback scheme in 1983ߝ84 for local authorities which substantially exceed their expenditure targets, the Government aim to prevent this inexorable rate rise.
My hon. Friend referred to the high level of rate increases in west London over the past four years. I am pleased to see that for 1982ߝ83 the percentage increase ranged between 0 per cent. in Hounslow and 17 per cent. in Hillingdon. My hon. Friend referred to the considerable efforts that Ealing and Hillingdon borough councils, both under Conservative control, have made.
For the 1983ߝ84 financial year, my right hon. Friend the Secretary of State for the Environment has allowed no local authority an expenditure target more than 4 per cent. above its current year's budget. Ealing has done as well as any authority, and has a target of £112.8 million for 1983ߝ84. If it meets that target—and I understand that it is its intention to do everything it can to avoid grant holdback—Ealing will receive £55.1 million block grant from the Government. This is an increase of more than £1.5 million on the grant it is likely to get in the current year.
Last year, with its 42 per cent. increase in precept since Labour took control and for the immediate future, the rub lies with the GLC. I hope very much that Ealing ratepayers will face a very low rate increase next year. How much will depend upon the actions of the GLC. I hope that my hon. Friend's remarks in that context will have been noted.
Finally, I agree with my hon. Friend about the importance of fast and efficient transport for business and industry. My right hon. Friend the Secretary of State for Transport is responsible for the trunk road network in London. In west London, these are the radial routes A30 310 and M3, A4, M4 and A40 Western Avenue. My hon. Friend knows those roads well. He knows that I do not have ministerial responsibility for the area, but perhaps I may comment on what he said. The orbital trunk roads in west London are the North Circular road A406 and the outer London orbital M25 which presently reaches northward to the west of Heathrow. These radial trunk roads will be the main feeders to M25, and I understand that all will be connected to the M25 in about three years from now.
On this network of trunk road radials and orbitals my right hon. Friend's construction programme includes completion of the M25, two-level interchanges on the A40 in the London borough of Hillingdon, and a substantial improvement of the North Circular road from Chiswick northward to the Harrow road junction in the London borough of Brent. No further major schemes are proposed on the other trunk roads in the area because they are regarded as being already to an acceptable standard.
As my hon. Friend pointed out, there is a complication arising from the division of responsibilities for the roads in London, and this matter was foremost in the considerations of the Select Committee which reported to this House last summer. My right hon. Friend the Secretary of State for Transport is considering the recommendations of that Committee.
Apart from the North Circular road and the M25, the main north-south links in west London are the responsibility of the Greater London Council. It is up to that council to arrange its road constructon programme and priorities. The principal scheme it has in hand in west London is the Hayes bypass, from just north of the M4 northward to the "White Hart" junction on the Ruislip road in my hon. Friend's constituency.
§ Mr. GreenwayWe do not want it.
§ Mr. MacGregorI understand that that scheme is priced at about £60 million. I heard what my hon. Friend said about it. However, my right hon. Friend the Secretary of State for Transport is prepared to consider funding under the transport supplementary grant arrangements. No doubt my hon. Friend will take up the matter with him. I believe that this is the full extent of GLC major road schemes to improve north-south links—except, perhaps, for the Roxborough bridge in Harrow at the junction of the A404 and the A312.
On the question about who should be responsible for roads in London, the Select Committee on Transport has analysed a number of weaknesses in the present organisation of transport responsibilities in London and has made some far-reaching recommendations as to how they might be tackled. The Government are carefully considering these recommendations, and a response will be published as soon as possible.
On public transport, the Government, too, would like to see closer integration between London Transport and British Rail in those places where there are now clearly gross anomalies, ans we are encouraging both operators to examine the scope for further progress in this area.
311 In conclusion, the area of west London—as my hon. Friend pointed out clearly; he described many of the advantages which I am sure will attract businesses to the area—is an area of industrial and commercial potential which will certainly benefit from the economic recovery when it comes. I have been most impressed with the positive approach of developers, industrialists and the borough councils in this area. I hope that my hon. Friend 312 will agree that the Government are making an important contribution to west London's regeneration by helping to remove many of the constraints mentioned by my hon. Friend this evening—
§ The Question having been proposed after Ten o'clock on Tuesday and the debate having continued for half an hour, Mr. Deputy Speaker adjourned the House without Question put, pursuant to the Standing Order.
§ Adjourned at eight minutes past Two o'clock.