HC Deb 20 December 1985 vol 89 cc709-16

12 noon

Mr. Sydney Chapman (Chipping Barnet)

I am grateful to have this opportunity of raising the wider issue of urban regeneration, which in a sense, but only partly, is a continuation of the previous Adjournment debate. I like to think that it is an extension of the more fruitful part of the debate that took place nine days ago, on 11 December.

I am pleased that the Under-Secretary of State for the Environment, my hon. Friend the Member for Ealing, Acton (Sir G. Young), will reply to this short debate. His long ministerial experience covers six years and he was at one time a councillor in an inner London borough and a chairman of a housing association. Both those qualifications will be helpful to him in this debate.

There is no doubt that there is a need for massive additional investment in urban regeneration, and it is important to mention that we are talking not only about our inner cities. The need for urban regeneration extends to most parts of our urban areas. I am told that 77 per cent. of us live in urban areas. Incidentally, over one third of us live in the large conurbations which occupy only 6 per cent. of the land area that we call the United Kingdom. In other words, we are a closely knit community.

We all have our own views about the state of the fabric of the nation and the nation's housing stock, but I suspect that most politicians are uneasy about the low level of investment in our infrastructure. As my hon. Friend knows, there has been a spate of reports recently, including one from his Department's urban housing renewal unit, which estimated that £18.8 billion needs to be spent to maintain the public sector side of housing alone. I am told that if the private sector is included, there is a need for a global £45,000 million to be spent. There has been the Duke of Edinburgh's inquiry into housing and the Archbishop of Canterbury's Church of England report entitled "Faith in the City".

It is self-evident that there is not the remotest chance of adequate public funds becoming available to tackle such a mammoth task on the scale that is necessary for urban regeneration. I happen to think that that is so under the present Government or another one, or even if there is a change of Government direction. If anyone doubts that, I commend to him the excellent article written by my hon. Friend the Member for Horsham (Sir P. Hordern) that appeared in the Daily Telegraph of 10 December.

We must encourage more private investment; that is the key to meeting more but not all of our housing needs. Eighteen months ago the Select Committee on the Environment reported on green belts and land for housing. I think that I can summarise it in shorthand without distorting what the Committee said. In effect, it stated that green belts have a broad and positive role, that of open spaces whose presumption against development can better shape urban areas; green belts were conceived originally as a way of containing growth and have become essential in dealing with the problems of urban decline; green belts should now assist urban regeneration. Basically, that is the guts of one part of the Select Committee's report. I agree with it, if only, but not only, because I was a member of the Committee and I am the president of the London Green Belt Council.

It will be prudent for me to declare interests at this stage. I am a non-practising architect, a non-practising town and country planner and a non-executive director of a development company and construction company.

We need a partnership if we are to realise the goal of urban regeneration. The public sector has the authority and, I think, the public acceptance. It has the contact with communities and can identify the social needs of a particular area. It often owns the land that needs to be redeveloped. The private sector has the access to finance, the development experience and the skills and expertise needed to assemble parcels of land and undertake construction. There is a need for a comprehensive new approach. We must encourage a massive financial input by the building societies, the banks which are now in the mortgage market, and, not least, the pension funds, which have considerable assets.

We have seen what can be done. That may have been an exceptional experience, but I draw the attention of the House again to the success of the London Docklands development corporation, which has already attracted £1 billion of private investment. I am told that every £1 of public money invested has attracted more than £5 of private investment. About 2,700 houses have been completed; 5,000 houses are under construction; and 4,700 jobs have been created. About 1,500 people at any one time are employed on the construction works.

Another good example of what can be done is the Baltimore inner harbour scheme, across the Atlantic, which occurred before the LDDC's projects. That was the greatest single programme of urban regeneration ever undertaken.

The trick is to turn derelict or under-Used sites with negative market values into positive developments that will show a reasonable rate of return and attract money. The problem is that, although successful schemes can attract four times or more as much private investment as the amount committed by the public, the initial ratio of funding required is 3:1 the other way around. The Government must therefore encourage this necessary partnership.

I acknowledge that the Government have taken and are taking certain initiatives. A legislative framework is being built up. The Building Societies Bill, which will make it possible to use the assets of building societies for urban regeneration on a much larger scale; the concept of urban development corporations; enterprise zones and the impending housing and planning legislation, which will bring about simplified planning zones, are part of the legislative jigsaw. The urban programme, which has been substantially increased and is running at about £338 million, the urban development grants of £77 million—a more modest figure—which have attracted £340 million of private money and the derelict land grants are playing their part. I agree with my right hon. Friend the Secretary of State that the grant schemes seem to achieve the most effective results.

I should like to offer some suggestions to my hon. Friend the Under-Secretary of State. First, because of the success of the LDDC and the Merseyside development corporation, the Government should seriously consider creating more urban development corporations. I understand the difficulties, but I believe that parcels of land could be assembled in some of the other major conurbations where relatively few people live and where comprehensive development of this new type could be better managed by a special agency. The phrase "urban development corporation" is not particularly attractive. I prefer the acronym SPA, or special priority area.

Secondly, there is a need for a new form of national agency to tackle the massive cost of urban regeneration. I do not know whether it should be called a national urban task force or a national urban renewal agency, but we need to draw together people from industry, Government and local authorities who have an expert knowledge of industry and administrative ability. They are the type of people who served on the new town corporations.

That national agency could set up a programme of work and monitor it, and be a catalyst for ideas and experience. There is a case for setting up urban development trusts in selected areas to attract the private finance needed. They could put the money to work to create viable schemes.

There is a need for a rearrangement of finances. There is not so much a need for significantly more public funding for urban regeneration as a need to redirect the money. Urban development grants should not go to the local authorities which in any case have to provide 25 per cent. of the finance needed, but should be redirected to the developers.

I refer my hon. Friend to paragraph 79 of the Select Committee report: Short-term public service public sector savings are hindering the creation of the sustained thrust for redevelopment that characterises the success of the LDDC. The Secretary of State accepted that the money that would have gone on those schemes is used inevitably in ways that pressurise vacant land and Green Belt land. The absurdity is that to save the public sector £90 million of expenditure over the whole country, over half a billion pounds of private money is pushed away from urban areas, to intensify pressure on agricultural land. Of course there is a considerable prospect that if Derelict Land Grant were demand-led huge spending might result. However, these grants do not meet the whole cost of schemes, only local authorities' shares of about one seventh. Their operation should be determined by the willingness of the private sector to put up money, and not by cash limits. A major opportunity to promote urban infrastructure and regeneration is being squandered. I refer my hon. Friend also to paragraphs 64 and 66 of the report. The vexing but real problems should not be used as an excuse for inaction. Difficulties, for example, in producing title due to previous inefficient conveyancing should be and could be dealt with by statutorily guaranteed absolute title if necessary. The Secretary of State should use his reserve powers more regularly to order the disposal of unused land held by local authorities, statutory undertakers and nationalised industries. I know that some progress has been made since the report was published.

This is an opportune time for a major urban regeneration initative. It is clear that the construction and development industries are ready, able and willing to take part. To realise that, one has only to read the recent speeches of the president of the Chartered Institute of Building, Mr. Norman Wakefield, who was last year's chairman of the national contractors group of the Building Employers Confederation. The Chartered Institute of Building and the Building Employers Confederation have taken significant initiatives. The Phoenix Partnership has been set up by the building material producers and there is also the Urban Investment Review Group which is chaired by Mr. Tim Melvill Ross. To show that initiatives are being taken by other parts of the construction industry I should like to quote part of the leader in the current issue of the Chartered Surveyor Weekly written by the editor, Mr. Michael Hanson. It is the journal of the Royal Institution of Chartered Surveyors. It states: The British Property Federation's working party on urban renewal under the chairmanship of Gerald Powell is one other initiative. This is on the point of identifying an actual inner-city site of about 20 acres (not in Liverpool or London) where a hypothetical redevelopment, mixing residential and commercial, can be shown to bring real benefits to the local community. The Housebuilders Federation is going further, by embarking on an eight-month tour of Britain's worst inner-city areas, after which it will produce its own White Paper of proposals. These will differ from the recent report of the Archbishop of Canterbury's working party on inner-city deprivation by producing hard evidence and practical solutions, duly costed. Clearly, not all Britain's housing needs can be solved by building in the inner cities, bur it might be a step in the right direction if the inner cities are regenerated before too much more countryside is laid waste". We need to harness and channel all those initiatives. It is a matter of the attitude and will of the Government at national and local level. Of course there are difficulties and problems, but I believe that they can be sorted out. I remind my hon. Friend the Under-Secretary that some of our inner-city areas are a disgrace to a nation that calls itself civilised. There is a tremendous challenge. We have a last opportunity to save our inner cities from going into terminal decline. I am told that the Cabinet discussed the need for new initiatives in urban regeneration at its meeting yesterday. I know that my hon. Friend was not present at that meeting, because he is not yet a member of the Cabinet. However, I hope that he will be able to reply to the debate in the positive spirit that is his hallmark.

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

My hon. Friend the Member for Chipping Barnet (Mr. Chapman) is better informed about what happened in the Cabinet than I am. I can shed no light on what was discussed yesterday.

My hon. Friend is right to say that there is a real challenge to the Government. A growing number of professional bodies, trade associations and construction companies are interested in the inner cities. They are producing new ways of tackling the problem. They have made it clear that they are prepared to invest their own resources and manpower in partnership with the Government. Over the past few months we have read many reports and had many approaches, some of which my hon. Friend mentioned. It is now up to the Department of the Environment and the Government to respond and harness that enthusiasm and build a fresh approach to the inner cities in a spirit of partnership.

It is common ground, certainly between my hon. Friend the Member for Chipping Barnet and myself, that the traditional public sector approach is unlikely to work and, in any case, would be fiendishly expensive. Te some extent, we are currently suffering from the public sector oriented approach in our inner cities. We must make the resources available to tackle those problems. Central and local government must have a much closer relationship, be prepared to understand the issues as they are seen by the private sector and recognise that the private sector is not a loss-making social agency. It has a responsibility to shareholders and we must reconcile its interests with our interests as administrators and parliamentarians.

Only yesterday the House approved, without a Division, the Building Societies Bill that was mentioned by my hon. Friend. That will unlock the substantial resources of the building societies, in a way that is not possible at the moment, to tackle some of the problems of dereliction and decay. My hon. Friend is well placed to address himself to the subject. He is a member of the Select Committee. He has exhibited great interest and he represents a London constituency with the green belt on its northern boundary, but not too far to the south he is exposed to some of the pressures of the inner cities.

My hon. Friend mentioned the London Docklands development corporation and made a powerful case for extending such corporations and setting up similar bodies in other parts of the country. The legislative framework exists and I shall draw his suggestions to the attention of my right hon. Friend the Secretary of State. He also made a more radical suggestion for a national renewal agency, which I suspect will involve primary legislation. That is something that we will have to look at carefully.

My hon. Friend's theme was partnership. He mentioned the gearing that we have secured in the LDDC. Last week it broke the £1 billion landmark for private investment attracted to its area. As he said, every £1 of public money spent in the docklands has drawn in nearly £6 of private investment.

The level of owner-occupation in docklands has risen from 5.3 per cent. in 1981 to 15.7 per cent., but, encouragingly, nearly half of all occupiers of the new homes were previously residents of the three docklands boroughs of Tower Hamlets, Newham and Southwark. Many new jobs have been created in the LDDC area. We shall look closely at ways in which we can apply the lessons learnt from the urban development corporations elsewhere.

Another element in my hon. Friend's theme of partnership was the derelict land grant. One of our priorities, as he rightly said, is to bring disused or under-used tracts of urban land into better use. That is a key priority of the derelict land programme. We have increased its budget from £23 million in 1979 to £82 million this year. We have concentrated it on recycling land and on schemes that lead to development and private sector investment. Derelict land grant can be paid direct to the private sector to enable it to reclaim sites for its own use. Earlier this year we approved the largest ever private sector reclamation scheme costing £1.4 million and covering no less than 90 acres of the Normanby park steelworks in Scunthorpe. The site will be developed by Pipe and Rail Limited for several manufacturing activities.

My hon. Friend referred to land registers. It is common ground between us that far too much public sector land is lying idle in the inner cities. There are often exciting opportunities for new investment or housing development, but we cannot achieve that unless the land is made available. My right hon. Friend the Secretary of State is making increased use of his power under the land registry system to require public sector owners to dispose of unused land. Twenty-one directions were issued on 19 November requiring the disposal of 139 acres. Speaking from memory, I think that one of those directions was in my hon. Friend's borough, although I think that it was in the Prime Minister's constituency rather than his own. We are looking actively at more directions and are determined to get a big momentum behind the scheme. In all, over 10,000 acres have been taken off the register by being sold or brought into use since October 1984.

My hon. Friend mentioned urban development grant and suggested that, instead of having to go through the local authorities, we should introduce a new power enabling us to give grant direct. We shall want to look at that. Urban development grant has made a substantial impact. In England as a whole, by the end of last month, we had approved over 165 UDG schemes. They involve grant offers of £74 million, bringing in their wake private sector investment of £325 million. About £60 million of the approved grants will enable industrial and commercial projects creating 16,000 jobs to go ahead. The remainder is being concentrated on housing development, leading to the provision of nearly 4,000 homes.

Let me give a London example of the success of the UDG. I refer my hon. Friend to last Thursday's edition of The London Standard, which contained a profile of the Royal Agricultural Hall. The report reflected on the astonishing variety of uses to which the hall had been put in the past, the entertainment ranging from the Grand Ball of 1869, when 5,000 guests waltzed beneath the chandeliers and 4,000 gas jets, to Ubini's Original Exhibition of Performing Fleas—the wonders of minute creation. We are restoring the hall with £2.8 million of urban development grant, although not necessarily for that historical use. The scheme involves the refurbishment and conversion of the hall into an international business design and exhibition centre. That transformation of a building that has been run down over decades will contribute significantly to the regneration of that part of London.

My hon. Friend referred to enterprise zones. Some areas have suffered from particularly serious decline over a prolonged period. It was to help those areas that we designated the first enterprise zones in 1981. Since then, further zones have been designated and there are now 25 in the United Kingdom. They are a success. The number of jobs in the zones has increased dramatically and the areas concerned, which have been in decline for so long, have been given a new lease of life.

My hon. Friend touched on housing. The Government are committed to strengthening housing choice and promoting opportunities for low-cost home ownership in our cities.

Earlier this year we set up the urban housing renewal unit, which encourages local authorities to improve the management of their stock, to involve tenants in plans for the future of their estates, and to develop management systems, which are more responsive to their needs. It is also exploring private sector solutions to some of the more problematic housing estates, and improving the standard of housing education by funding 15 part-time graduate studentships at the London School of Economics housing management centre.

Among the initiatives that the unit hopes to develop is an extension of the community refurbishment schemes, which were successfully piloted on Merseyside. They involve local people who have been out of work for more than a year refurbishing their estates, and, in some cases, rebuilding their homes. The unit has an urgent programme of visits and meetings with the authorities with the most severe housing problems. It will be an important part of its job to transfer such successful experiments to areas which have not previously considered them.

My hon. Friend mentioned the urban programme, and was kind enough to say that we have increased substantially the resources available to it. They have increased from £93 million in 1978–79 to £338 million, which is a reflection of our commitment to the regeneration of our inner cities. It is an example of how central Government and local government can work effectively together. Much is made of the friction in the relationship between the two. Indeed, the report of the Archbishop's commission on urban priority areas claimed that there is a regrettable lack of will on the part of Central Government to support local government and to devote adequate resources to Urban Priority Areas. We have put fresh impetus behind the urban programme. Under it, some 12,000 projects are being supported, all of which have been submitted for ministerial approval by local authorities. Since 1978–79, more than £1.9 million has been allocated in support of local authorities' programmes of urban renewal. We have sought to concentrate resources on the worst areas, and have worked with local authorities, with some of whom we have political differences, to ensure that maximum value for money is obtained.

It is sometimes suggested that the increases have been more than offset by cuts in the rate support grant. We make no secret of the fact that there has been a change in the relative contributions of central and local government towards the financing of local authority expenditure. The Government's share has been reduced for every local authority to strengthen local accountability and the financial responsibility of those who manage local authority expenditure programmes. There has been no shift in the share of rate support grant to the inner cities, and the share of the rate support grant for urban partnership and programme authorities is much the same in percentage terms now as it was in 1979. The expenditure assessments on which rate support grant is based recognise that inner city authorities have higher spending needs than other areas. To use the terms of the grant calculation, their grant-related expenditure assessments are often much higher in relation to given functions than the national average.

I could say a great deal more about the Government's commitment to inner-city areas. The Government remain firmly committed to the notion of the green belt, which is one of my hon. Friend's particular interests. However, it is important to emphasise its positive role, as my hon. Friend did. There is something in the green belt for the inner cities, as resources must be redirected to the inner cities, and developers no longer have the option simply to take the easier solution of greenfield redevelopments. The green belt is a positive aspect to our inner-city approach, and has a role to play in tackling problems.

One small example of our determination to restore hope—and, dare I say, faith—in the inner city is apparent in Brixton during the festive season. I ask hon. Members who travel through Brixton to bear in mind that the excellent illuminations have been provided with support from the urban programme. As I would not wish to spoil our reputation for thrift, I must point out that they were obtained second-hand from Blackpool. On that festive note, may I say that we have had a more constructive 30 minutes on inner cities today than last week when Labour Members howled down my right hon. Friend, the chairman of the Conservative party.

Mr. Deputy Speaker (Mr. Ernest Armstrong)

I am grateful to hon. Members, and especially to the Minister, for bringing us back to the timetable.