§ Order for Second Reading Read.4.37 pm
§ The Under-Secretary of State for the Environment (Mr. William Waldegrave)
I beg to move, That the Bill be now read a Second time.
Hon. Members will recall that in the previous Parliament the Government introduced an almost identical Bill in response to doubts expressed by some local authorities as to their powers to make grants in support of urban development grant projects. That Bill failed to complete all stages before the Dissolution of Parliament, and for that reason I must ask the House today to reconsider these issues in this Bill.
The urban development grant scheme is an imaginative one through which we hope to encourage the improvement of many sites in the inner areas of our cities. Its essence is partnership between local authorities, central Government and the private sector. Relatively small sums of public money—money from the local authority supported by a 75 per cent. grant from the urban programme—are spent to secure a considerably larger participation from the private sector for a wide variety of projects. The scheme has been warmly welcomed by local authorities of all complexions.
On 12 May my right hon. Friend informed the House that 72 projects had so far been approved for UDG, representing total investment of some £153 million. Today I am pleased to announce that we have recently approved a further batch of 21 projects leading to additional total investment of £63 million, made up of £51 million of private and £12 million of public money. I am placing details of these schemes in the Library. But the House may wish to know that the authorities concerned are Birmingham, Bradford, Dudley, the GLC, the Greater Manchester council, Greenwich, Hackney, Knowsley, Lambeth, Liverpool, Newcastle, Sandwell, Sheffield, Wandsworth, Wigan, and Wolverhampton.
As with earlier schemes, these latest projects cover a wide range. They include some unusual and imaginative urban development projects. For example, there are commercial and industrial projects ranging from Wandsworth's £14.5 million scheme to create a combined office and shopping development on a vacant and prominent site by Clapham junction station to Lambeth's £740,000 scheme to provide seven small industrial units and office facilities on the site of the former Brixton synagogue. There is Newcastle's £1.8 million scheme to refurbish and convert some ugly and disused transit sheds on the quayside for use as trade workshops with, in addition, an exhibition and tourist centre.
There are housing projects including Dudley's £7 million scheme to open up a 150-acre derelict site for housing and open space; Sheffield's £900,000 project to assist in the development of 43 dwellings for owner-occupation aimed at first-time buyers in a rundown inner city area; and Bradford's £3 million scheme to refurbish three disused listed mill buildings to provide a mixed residential and industrial and commercial development.
428 There are leisure schemes too, like Wigan's £300,000 proposals for the renovation of a derelict warehouse on Wigan pier for conversion to a leisure centre with social, sports, and conference facilities.
The projects demonstrate the variety of ways in which urban regeneration can be achieved. But, even more important, they show how public money can often be used to greater effect in our inner cities if it is used to attract much larger amounts of private investment.
The projects announced today bring the total number of the schemes that we have so far approved for UDG to 93. By spending just £43 million of public money on those projects we shall secure total investment of some £220 million, which will create jobs, improve amenities and, just as important, demonstrate the commitment—
§ Mr. Robert Kilroy-Silk (Knowsley, North)
Whatever value or benefit the schemes may have, not least in the additional jobs that are created in the areas to which the Minister referred, is not that all vitiated by the fines that the Secretary of State has imposed on areas such as Knowsley, which is my constituency, and the London boroughs? Whatever good has been done through the UDG has been destroyed at a stroke by the vicious action of the Secretary of State.
§ Mr. Waldegrave
I cannot accept what the hon. Gentleman says. The hon. Gentleman has heard us say this many times. The overall targets for public expenditure are part of an overall strategy for the regeneration of underlying economic growth. The local authorities have to face the difficult task of setting priorities. It is worth reminding the hon. Gentleman that many of the local authorities involved in those projects are privileged in that they do not suffer from holdback penalties. I repeat that these valuable schemes demonstrate the commitment not only of the Government and local authorities but of the private sector to the slow but essential task of restoring hope to areas where the prospects must often look hopeless.
Many of the schemes, including some of those I have announced today, are ready to go ahead now. That is why it is particularly urgent that the legal doubts about the local authorities' own powers to assist should be quickly resolved. That is the reason for our asking the House to compress its consideration of this short Bill into a single day.
I shall give a brief account of how the legal doubts arise and why the Bill will resolve them. The legal doubt was raised with us by some of the local authorities themselves. It concerns local authorities' powers to make grants towards projects that involve land acquisition or development work on land. Many UDG projects require such grants.
Section 137 of the Local Government Act 1972 provides local authorities with a discretionary power to spend up to a limit of the product of a 2p rate in their area. That power, however, cannot be used when other spending powers already exist for the same purpose. The problem arises because section 3 of the Local Authorities (Land) Act 1963 gives local authorities a power to make loans for land acquisition and work on any land. Some local authorities took the view—the Government's own legal advice agrees with that view—that that precludes the use of section 137 to make grants for those purposes.
The Bill therefore provides that the existence of the 1963 Act's loan-making provisions shall be disregarded in 429 deciding the purposes for which section 137 can be used. Its immediate relevance is UDG, but it will be needed for other grant-aided urban programme projects too. That is the main provision. In addition, there is a similar problem for some local authorities because of the existence of a number of local Act powers to aid industry.
Some of those powers have limitations in the form of the aid to be given, in a similar way to the 1963 Act. They too could get in the way of UDG projects. The Bill therefore provides that where local Act powers would similarly inhibit the use of section 137, the Secretary of State can make an order designating the local enactment to be disregarded in deciding the purposes for which section 137 can be used. The only change to the Bill from that introduced in the last Parliament is that it has now been made retrospective to a limited extent.
If the House accepts the Bill, the disregard for the 1963 Act will have effect from the beginning of the 1983–84 financial year and the disregard of any local Acts made in an order will have effect from the beginning of the financial year in which the order is made. Our intention here is to safeguard from legal challenge any expenditure under section 137 for the purpose described in the Bill initiated since the Government's intention to legislate was first announced. That is an important point, which has been put to us by local government, and indeed by the Labour party, for the protection of the individuals concerned. I hope that the House will look favourably on the very limited degree of retrospection that it involves.
Some hon. Members may also recall the undertaking given by my hon. Friend the Under-Secretary in the last Parliament that the Department would consider how best extra publicity for section 137 could be brought about. That was in response to concern over the way in which some local authorities may be misusing their discretionary power conferred by the section. My hon. Friend said in Committee that we had it in mind to include details of section 137 expenditure in the summary of accounts that we propose local authorities should prepare in future. We shall be consulting the local authority associations shortly about our detailed proposals so that we can implement the change at the earliest possible moment.
I hope therefore that both sides of the House will agree that the Bill is needed to remove an unnecessary obstacle to the success of the urban development grant initiative; an initiative to which local government has so imaginatively responded. It would be foolish to allow this technical legal doubt to continue to inhibit a policy that can bring considerable benefits to areas that desperately need them. It is in that spirit that I commend the Bill to the House.
§ Dr. David Clark (South Shields)
As the Minister said, this is our second bite at the cherry of this short Bill. On 30 March, my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) said that the Opposition had no intention of holding up the Bill. I give the House the assurance that that is still our policy, with consistency being our hallmark. It is slightly ironic that we are discussing a Bill which makes sensible provisions, when the Chancellor of the Exchequer has just been talking about how public money does not create jobs. The Bill shows that public money can create jobs and improve the environment. It is for such reasons that we are so keen to support it.
430 I have said that this is our second opportunity to have this debate. I only hope that the present Secretary of State has more luck than his predecessors. They plunged themselves and local government into great confusion, and at times into legal action that was not desirable either for the local authorities or for the good name of the Government. The raison d'etre of the Bill is that there is doubt about local authority powers, as the Minister clearly explained.
Therefore, the Secretary of State must be supported, in marked contrast to his predecessors who, when faced with the doubt, did not take action. We have had the unsightly procedure of one of the former Secretaries of State acting illegally and coming before the House—having been challenged and lost his case in the courts—and asking for retrospective legislation—in that case, under the Local Government Finance Act 1982.
I am sure that hon. Members share my general dislike of retrospective legislation, but in the Bill the element of retrospection, which is limited, is not only wise and sensible but is to be welcomed.
I hope that the Minister will give us some reassurances, because we need them. It seems that the main justification is that the doubt over legality may hinder local initiatives. The Opposition share the Government's enthusiasm in the sense that it is right to encourage local authorities to do what they can to improve their environment and create employment.
I wish that we did not have occasions such as those in the past few days when well-meaning and well-deserving local authorities have suffered at the hands of the Government because of holdbacks. Many exciting initiatives to create jobs and improve the environment are taking place in local government, as the Minister showed. We should be encouraging that across the board, and not just in the narrow area of urban development.
We are particularly concerned about the Government's intentions on section 137 powers and I listened carefully to what the Minister said. That section allows local authorities to levy a 2p rate and spend it on projects for the good of local communities. That is a necessary and sensible power for local authorities and it is up to the local electorate to decide whether that money is being spent for the benefit of the community. Therefore, we are concerned when the Government start talking about taking action against local authorities and especially against section 137.
Yesterday, the Secretary of State was asked by the hon. Member for Uxbridge (Mr. Shersby) whether he would considerabolishing the discretionary power to spend the equivalent of a 2p rate".He replied:As my hon. Friend knows, the Government regard that provison as unsatisfactory. Last year we proposed legislation to replace it with something more rational, but the legislature felt unable to accept it. It is a problem we must tackle."—[0fficial Report, 6 July 1983; Vol. 45, c. 276.]It would be helpful to the House and everyone concerned if we had a clearer statement from the Minister. It is rather ironic that the Secretary of State and the Government are lauding the urban development scheme, which depends entirely on section 137, while saying that they do not like section 137. The Government must make up their mind. Will they continue with section 137? If not, 431 it makes a mockery of the Bill. I have an inclination warmly to support the Bill, but a little clarity on this issue would help.
Another minor point concerns clause 1(3), to which the Minister referred when talking about the designation of an authority. I understand that, under the Bill, the Secretary of State can choose the authorities to which the powers in the Bill will or will not apply. He thus has even more ability to place one authority in a more advantageous position than another. As I understand it, he does not have to give specific reasons for his choice and has only to consult the authorities that would be affected by such an order. A Government would be able to play off one authority against another, and that is unsatisfactory.
Those are our worries and concerns about the Bill. The matter of greatest concern is the Government's attitude to section 137, which I hope that the Minister will explain. I repeat myself, because it is essential to make the point that without section 137 the urban development programme, which the Minister has praised and to which I am happy to add my praise, is a non-starter, because it depends entirely on that money for the local government interest.
§ Mr. Tony Lloyd (Stretford)
I rise to speak as a nervous new Member, but I am somewhat fortified by the knowledge that I come here to represent all the people of the Stretford constituency. I am proud to represent it, as I was born in that area and can claim to know it well and. I hope, to understand its people and many problems.
The constituency, like many others, is relatively new, and I have to acknowledge two previous hon. Members who represented different parties in the previous Parliament. The hon. Member for Davyhulme (Mr. Churchill) is still a Member here, and I pay tribute to the former Labour Member, Mr. George Morton, who represented the people of Moss Side and who spent years working for his constituency both inside the House and outside.
The constituency is like many others, in that it covers both an inner city area and suburbia. Like all such constituencies, it has a unique place. It is, with a great deal of pride, the home of two great football teams, the two great Manchester teams of Manchester United at Old Trafford, still flushed with the victory in the FA cup final, and Manchester City at Maine road, fallen temporarily on hard times, but nevertheless bound to surge back, like the traditional phoenix, at the end of the season. It would be grossly unfair if I did not mention the other Old Trafford, home of the Lancashire county cricket club, another fine sporting institution.
Less glamorously, Stretford has a share of the Trafford park industrial estate. As a Mancunian and a Stretfordian, one of the saddest things that I have seen recently has been the steady decline of that industrial estate because of the failure of the private sector to invest and re-invest, not simply in the plant, machinery and building, but in the skills of the people in the area. Trafford park had a fine tradition of skills and as a centre of excellence in engineering and other allied industries. Sadly, investment 432 in apprenticeship and training has diminished considerably. Thousands of jobs have been lost over the past few years, and that is an indictment of the Government's failed economic policies.
My constituency is strongly linked by unemployment, which, far from being a problem only of the inner city area, conditions the lives of many people in Stretford. Unemployment at its highest is 40 per cent. in the Moss Side area. Fortunately, it is lower than that in other areas, but it is still degrading and hopeless for the individuals concerned wherever it happens.
I have a large slice of the inner city in the Moss Side and Old Trafford areas, which are both areas of great vitality but of tremendous problems. I pay tribute to them before talking about their problems. Manchester as a whole, and those areas in particular, have a fine record of racial tolerance, despite the vast variety of people with different ethnic origins and backgrounds who live there, which is a tribute to Mancunians and to the efforts and contributions by those ethnic minorities. I am proud of that fact.
It has become something of a cliché to talk about the hard-pressed inner cities, but because it has become a cliché we should not lose sight of the fact that there are many problems that are self-reinforcing, such as those of poverty, single-parent families, social isolation, atrocious housing and inadequate schooling, with the loss of employment tacked on to those. We have seen a failure at national level of both intelligence and imagination in the ways in which we tackle the problems of the inner cities.
I welcome — one of the few moves in local government that I have welcomed from this Government—the Bill for what it does. I should also welcome the contribution by both private and public capital in the regeneration of the inner city areas. The pump-priming exercise can be vitally important, but we should not delude ourselves that the scale of resources now being applied is even remotely adequate to cope with the scale of the problems that the inner cities face. It would be a tragedy if we were to pretend that we were really getting to grips with the problems in those areas.
The third report from the Environment Committee, dealing with the problems of management of urban renewal, says in paragraph 104:High levels of economic distress and social discontent have long been apparent on Merseyside. Disorders of the summer of 1981 we believe were both predictable and predicted.The analysis for Merseyside is precisely the same as that for the inner city of Manchester and of other greater urban areas. Over the last two years the problems have considerably worsened, at least in part because of the Government's vindictiveness towards local government. As a serving member of a local authority, I claim that we should be equal partners and not subservient whipping boys whose job is simply to allocate the cuts made by the Government.
The city of Manchester has lost, in real terms, about £60 million in grant over the last few years. There is no way in which the urban development grant will compensate for the loss of that massive amount of resources. Even Conservative-controlled Trafford, my own local authority and always a cheerful cutter, has not fared much better than others in real terms under the Conservative Government, despite its faithfulness to the whims of the various Secretaries of State for the Environment.
433 Inevitably, the cuts have pressed most harshly on the inner city areas and on those who reside in them. As I represent a constituency with a sizeable inner city area, I must view with the greatest unhappiness the seeming callousness of the way in which the inner cities are treated. As a democratic Socialist, I must believe that a society which is prepared to exclude many millions of its countrymen from fair and equal access to the nation's resources is morally bankrupt.
As I said earlier, the inner cities have suffered from a failure of imagination. I am sad to ay that, while I welcome the Bill for what it does, I deeply regret the many things that it fails to do.
§ 5.2 pm
§ Mr. Bill Michie (Sheffield, Heeley)
I shall try to follow my hon. Friend the Member for Stretford (Mr. Lloyd) in the same style and, I hope, with the same competence.
I consider it a privilege to represent Sheffield, Heeley in the House of Commons. I thank the Heeley people not just for their support, but for the many good wishes that I have received since I took my seat here.
I pay a special tribute to Frank Hooley who represented the old Heeley constituency. It is obvious that he was greatly respected in this House. Many of his colleagues and I have discussed the work that he did in the House, particularly concerning the Third world I should like to record the appreciation and respect that 11 have for Frank, whom I have known for more than 15 years, and to wish him well and all the best in the future.
I thank hon. Members, and the staff, who have been very helpful in assisting me to find my way around the various corridors, which, I am sure, were designed purely to confuse, as each looks exactly the same as the others, no matter whether one walks up or down them. No doubt the mysteries of the procedure will slowly disappear in the coming months. I shall no doubt crack the system eventually and become a more effective Member of Parliament. Then I shall have to pinch myself to remind myself whence I came and why I came.
Knowing the Heeley people, I am sure that they will keep me in line. Heeley, like any other industrial area, is experiencing the problems of the economic depression and of unemployment. The industries in the constituency are small to medium sized, but they too have suffered the pain of redundancies and closures, no matter how much workers, management or councils try to help.
Many of my constituents work just outside the constituency, in the British steel corporation and in large engineering works. I do not have to spell out what has happened to those large companies. There is a very sad joke being bandied around in Sheffield. It concerns the Prime Minister's pledge in 1979 that, if elected to office, the Conservatives would help small businesses in every possible way to be more competitive in the market place. The joke is that the Sheffield people did not realise that BSC would have to be included in that category.
The unemployment rate in the constituency cannot be claimed to be the highest in the city or in the country. Overall figures can be misleading. There are areas with over 20 per cent. unemployment, and there is a well-off area with less than 7 per cent. But, whatever the figures, we are all genuinely concerned about the problem. I have had the experience of being without a job for two years, and I know that the statistics are of no comfort. I invite 434 Ministers to walk round the industrial area of the east end of Sheffield. It is all very well to say that we can have money for an urban programme, for landscaping and so on, but we would rather have productive jobs back in the area, so that we may use the skills of which we are so proud.
The damage caused to the Sheffield industrial base is nothing short of criminal. In the homes and on the dole queues, one can meet people who for many years not only enjoyed being in work, but were proud to make a contribution because of their special skills in engineering. All that skill and experience has been thrown away, and it is one of the biggest tragedies that I have witnessed in my life. There does not seem to be any protection for them, and they feel a sense of hopelessness.
When people pick up the newspapers and read about the European Community and its dilemmas, and where cuts should be made, they realise that Britain has taken perhaps half the total cuts in steel in the whole of the Community. They also read that the United States Government, being worried about their steel industry, take action. The Sheffield people ask why our Government cannot do the same for our people in the industrial areas of the north.
When skills have been lost they cannot be immediately replaced at will. It is crazy to think that skilled workers, having been put on the dole to waste away for five or 10 years, can be replaced in one year as a result of youth training schemes. Those schemes will never work and we shall be ever more dependent on other countries to produce the special steels which have made Britain great and powerful. We are scrapping wealth that is irreplaceable. That is one side of the problem.
The other side of the problem is the effect of unemployment on the community as a whole. There is the damage that it is doing to family life and home life, and the effect that it is having on health. Workers who previously worked hard and enjoyed good health are now quite ill. At one time, steel workers and engineering workers were seen only rarely in doctors' surgeries. That is no longer the case, and there are now psychological and mental as well as physical problems. Those problems must not be ignored. People desperately need help, but not in the form of handouts or compensation for not having a job. The only help that they want is the provision of a good productive job, so that their dignity can be restored to them.
Sheffield city council has done its best to protect its people by giving advice when they have become unemployed. It has done its best to protect the jobs and skills of the city. In addition, it has increased the social services. It took the initiative to create an employment department under section 137 of the Local Government Act 1972 and in those early days did much pioneering work to find out what exactly could be done under section 137.
In those early days, section 137 was an absolute minefield. I give credit not just to the officers in the town hall and the legal department and even in some Government Departments, but to members of the city council who spent a whole day going through the Act, understanding it and picking things out that would be useful to the city and its residents.
Urban aid is useful, but as with any other grants, unless one has a good machine to implement such plans, one may cause further problems. Every time that a local authority 435 such as Sheffield tries to help by using section 137 and urban aid, it is forever looking over its shoulder to see whether a curb will be placed on it.
The Sheffield authority can honestly claim to have saved many jobs. It has helped workers suddenly made redundant after 20 years to claw their way back into society. That has been a tremendous psychological boost to the Sheffield people. The Sheffield city council went to the people, instead of waiting for the people sooner or later to cry for help. It has helped people to regain their self-confidence, and has helped skilled workers to set up their own businesses and worker co-operatives.
In a way, it is strange that some workers, through their own inspiration and with financial help and guidance, should have set up co-operatives in the engineering and steel sectors—the very areas in which, when they were made redundant, they were told, "There are no orders." The orders exist. All that is needed is the will to fight and to make the right products. Those co-operatives have been successful and we are proud of them.
Small firms in the private sector are also going like a bomb thanks to section 137 money. I received a letter from a small engineering company thanking the city council for its help. In the last paragraph—this was unprompted—it said that it was ironic that in 1979 a Tory Government were elected on a pledge to help small businesses, yet it has taken a Left-wing Socialist council to help put it on the right track. That letter is pinned on the town hall notice board, and we are very proud of it.
As well as the political argument for and against the right way to proceed, there is also the moral argument about how we get the country back to work by creating skilled jobs that will make products that are socially useful. In that sense, the Sheffield city council has always cared, particularly during the past four or five years when redundancies have hit the city hard. The Sheffield people have always been appreciative of that. They have always supported the council's policies. Indeed, that support is increasing. The people appreciate what the council is trying to do for young people. Instead of putting them on training schemes after six months, it is trying to provide training that will be of real benefit if there is ever an upturn in the economy.
However, for backing the city council the Sheffield people have been punished by the Government. By exercising their democratic right to vote for caring policies, the Sheffield people have in the last few years effectively been fined £127 million. That is unacceptable, not just to Labour supporters, but to others across the political spectrum.
It is obvious that legislation is on the way to curb the freedom of city councils such as Sheffield even more. I am sure that the voice of Sheffield will cry out, "Leave us alone to try to help the people about whom we are concerned."
The Sheffield Star, in its editorial last night, clearly stated what it thinks about the measures that are coming before us. In an article headed "Outcry that is justified", it said that the outcry by local councils over Government cuts was predictable but totally justified and understandable. It added:The councils have not overspent, other than by passing an arbitrary mark dictated by central government to fit their national perspective, not the needs of local people.436 The argument is that the Prime Minister won a majority, and therefore a mandate. To some extent, that can be accepted. It is true that the nation did give overwhelming support for the Prime Minister's reelection, and in doing so signalled some support for her policies. But it is equally true that local councils have been elected with overwhelming majorities, particularly in south Yorkshire. They have also been supported by the voters, and therein lies a dilemma.
The message from our local paper is quite simple. It is not necessarily of Labour party persuasion, but it has been a keen watchdog and on more than one occasion has brought the council to task when it felt that its policies were not right or beneficial to the ratepayers. That paper has been fair to the ratepayers and the local authority, but has pointed out any injustice. At the end of its editorial, it said:The present Government attitude is too strict and the constraints on local councils doing what is best for their people ought to be loosened.I am grateful that such a comment should be made by an independent local paper.
It seems that the Government are going out of their way to be dictatorial, and, like all dictatorships, they tend to remove impediments to their doing exactly what they want. The warning signs are already there. If they take too much control and take all freedom away from local government, they will remove a safety valve which is crucial to our democracy. If we are not careful, there will be no outlet for frustration, and there will be no way in which local communities can ever again have any faith in such democracy. I therefore plead with the Government to stop before it is too late.
The message that all Sheffield Members have received from the city council—I believe that it has gone to Ministers—is to urge the Government to carry out as priorities, first, the restoration nationally of the 20 per cent. drop in manufacturing output and one third drop in investment since 1979; secondly, the restoration locally of the employment of the 43,000 people currently unemployed, including 9,000 young people; and, thirdly, the immediate lifting of penalties and the restoration of some of the £127 million in grants and housing subsidy that was taken from the council in 1979.
That is the policy of the city council, supported by many people, not just the Labour party. We believe that a commitment to those priorities will bring healing and hope to a country and a city ravaged by four years of destructive and savagely divisive national economic and social problems. I therefore ask the Government to think again and to give some hope to the people of Sheffield.
§ Mr. Michael Meadowcroft (Leeds, West)
I am beginning to realise, Mr. Deputy Speaker, that on occasions events in the House can move rapidly, because only two weeks after going through the same pangs as the hon. Members for Stretford (Mr. Lloyd) and for Sheffield, Heeley (Mr. Michie), I now have the pleasure of thanking them for their contributions.
§ Mr. Meadowcroft
It is a pleasure to follow two hon. Members from the inner cities, particularly two local Members, because in my experience the person who comes from the depths of such an environment can often speak with the most feeling.
I appreciated what the hon. Member for Stretford said. He twisted the knife in the wound somewhat by reminding me of Manchester's football and Lancashire's cricket. Apart from that, we shall look forward to hearing his fluent speeches.
The hon. Member for Heeley spoke with great feeling about the problems of his constituency. No doubt we shall enjoy more of his speeches. Hon. Members will have appreciated his reference to his predecessor, Mr. Frank Hooley, who accepted his fate at the hands of his colleagues in a dignified way.
On the face of it, it would appear that Liberal Members can agree with the Bill, as it extends the independence and financial powers of local authorities and clarifies some ambiguities. However, as the hon. Member for South Shields (Dr. Clark) said, it raises some problems. I should like to re-emphasise his point about the Secretary of State's answer to the hon. Member for Uxbridge (Mr. Shersby) during Question Time yesterday. It is odd that only 24 hours ago the Secretary of State undermined the concept of section 137 by agreeing with his hon. Friends that he wanted to dilute local authorities' powers. It ill becomes a new Member of Parliament in become cynical quite so soon. Perhaps the Under-Secretary of State can put our minds at rest.
Is the Bill a deliberate attempt to get local authorities to use up their discretionary powers on behalf of Government initiatives, thus preventing the use of those powers in ways with which the Government do not agree? If that is so, it is a shame to use the obvious advantages of urban development grant, with which all hon. Members are happy, to denude local authorities of their powers. Local authorities used not to be able to top up their powers between Acts. When will a combination of powers be possible, or will it remain a case of either/or? If the Bill enables topping up, local authorities will benefit enormously. It is not clear whether that will be possible.
A question mark hangs over the Bill's application to local Acts and the limitation of powers, apparently arbitrarily, by the Secretary of State. When we consider the long and often traumatic procedure of getting a measure from a local authority on to the statute book, it seems odd that a simple sentence in a new Bill such as this will limit those powers. I remember the long-drawn-out process of getting the West Yorkshire (Parking and Transport) Bill on to the statute book. If the Secretary of State is to be able to limit the local authority's powers to one district of west Yorkshire, that would seem to be arbitrary.
Although I have outlined some problems, any Bill that gives local authorities more freedom in the interests of the community that they represent is to be welcomed. From that point of view, I have pleasure in supporting it.
§ Mr. Waldegrave
I am grateful for the spirit in which hon. Members have welcomed the Bill. It is fair to say that, although they have asked questions about it. I am grateful to the hon. Member for South Shields (Dr. Clark) for the spirit in which he responded to my opening speech.
438 I shall try to clarify a few points, but, when I face such experienced local authority operators as the hon. Member for Leeds, West (Mr. Meadowcroft), I am nervous, as I am a new boy to the subject. Urban development grant programmes do not rely only on section 137. In some projects, other local government powers are more relevant. Section 137 is used most for industrial development and the purchase and use of land. That is why local authorities came to us with their initial doubts.
The hon. Members for South Shields and for Leeds, West laid a marker of anxiety about the discriminatory use of the order-making power in relation to local Acts. I understand the anxiety. The request to take such a power came from local authorities. They suggested that the complexity and range of relevant local enactments was such that if we tried to specify everything we should be in difficulty. I shall repeat what my colleague said last time this matter was discussed, so that our response is clear. We regard the power as reactive. When local authorities tell us that they are blocked by an enactment, we shall respond. We shall not initiate such action and cause trouble for local authorities. I hope that that has stilled some doubts.
A more fundamental point which the hon. Members for South Shields and for Leeds, West raised related to the future of section 137 and the Government's attitude to it. Last year the Government brought forward a proposal in a consultative paper not to do away with section 137 but to produce a new ½p rate power aimed specifically at industrial development. The proposal was withdrawn after discussions.
It is no use my denying the existence of the anxiety which the former hon. Member for Islington, South and Finsbury (Mr. Cunningham) expressed. He was always a one-man Opposition, to which ever party he belonged. I am not making a party political point by saying that I am sad that he is no longer with us. In a previous incarnation as a junior Minister I sometimes found him more formidable than the rest of the House put together. We shall miss him. He and some Opposition Members pointed to what looked and sounded like abuses of section 137 by a minority of local authorities. I know that my right hon. Friend the Secretary of State was responding to that anxiety yesterday when he said:I do not dislike the section; I dislike the way in which some irresponsible Labour authorities are using it."—[Official Report, 6 July 1983; Vol. 45, c. 279.]There is no question that the Government accept the 2p rate as a fundamental part of the local government set-up. Although this is not the proper time to discuss it, there is some anxiety about some of the uses to which some of those powers have been put. I should be misleading the House if I did not say that the Government are wondering what to do about that.
§ Dr. David Clark
As section 137 clearly provides for up to a 2p rate for the benefit of the community and represents a crucial part of the Bill, is it not extremely dangerous for any Government to delimit the powers of a locally elected authority?
§ Mr. Waldegrave
Any Government would want to tread warily in that regard. Governments of both parties accept that there can be such things as abuse. We shall take no action without careful consideration, but some Opposition Members have expressed their worries about abuses.
§ Mr. Meadowcroft
Does the Minister agree that there are other ways in which to control the abuse? First, the authorities to which attention has been drawn happen to be those that do not have annual elections. Perhaps altering that constitutional feature would achieve the same object.
§ Mr. Waldegrave
The hon. Gentleman's remark shows how wide such discussions must go, and perhaps we would be outside the scope of this Bill if we pursued them today.
We heard two powerful maiden speeches today. It is not that long since my maiden speech, and it is difficult not to sound absurdly patronising, but both speeches showed that it is possible to make a powerful case without breaking into stridency. That is how the House likes to hear its Members. George Morton was popular on both sides of the House, and I am sure that his successor will also have friends on both sides of the House. We listened to him with respect and interest today. Although we all miss the former Member for Sheffield, Heeley—the eponymous hero, as he nearly was—the new Member for Sheffield, Heeley (Mr. Michie) made a powerful speech to which the House listened with care. I am sure that many people in his part of the world, and many others, will read it with great interest.
There is no doubt that the Bill is necessary. The spirit in which it has been received endorses the way in which the Government asked the House to speed through the measure, although the detailed points made by Members may need to be followed up. The hon. Member for Leeds, West asked about topping up, which is a technical area of local government finance where I tread warily. The Local Government Act 1972 allows local authorities to use section 137 to make a grant, whereas the Local Authority, Planning and Land Act 1980 enables them to grant a loan for the same purpose.
The Bill ensures that there is no hole in the middle. If I have not clarified that matter to the hon. Gentleman's satisfaction, I shall be glad to discuss it with him later.
I commend this short Bill to the House. It will remove some obstacles in the way of a valuable programme which I was glad to hear welcomed on both sides of the House. I am grateful for the way in which Opposition Members, and the representative of the Liberal party—I would offend him if I called him the representative of the alliance—have welcomed the measure.
§ Question put and agreed to.
§ Bill accordingly read a Second time.
§ Bill committed to a Committee of the whole House.—[Mr. Thompson.]
§ Bill immediately considered in Committee; reported without amendment.
§ Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 58 (Third Reading), and agreed to.
§ Bill accordingly read the Third time, and passed.