HC Deb 18 April 1986 vol 95 cc1221-30

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neubert.]

2.32 pm
Mr. Ron Leighton (Newham, North-East)

The east London borough of Newham has suffered cruelly from seven years of Thatcher government. All its problems have been aggravated and exacerbated. It faces a crisis of decline and decay, and this speech is a cry of pain. My purpose is to state the facts, and to ask the Government to face their responsibilities to help and assist the borough, not to damage it further.

Much of Newham was built in the middle of the last century. Much of its economic life derived from the port of London and the industry and commerce that went with it. Now the port is no more, the old industries have left, much of the housing stock is decaying, and unemployment is rife. We share many of those problems with other inner-city areas, which are time bombs ticking away, threatening to explode. The better off move out, leaving behind those with fewer skills. The major employers leave, and monetarism blights the few remaining companies which are struggling to survive.

In that vicious circle, as jobs go, incomes fall, housing becomes dilapidated, the area becomes down at heel and tatty, and graffiti, vandalism and crime grow. It is in such areas that those out of work become the long-term unemployed, the least skilled are likely to live, the old are most likely to be made redundant, and the young have greatest difficulty in finding work. Moreover, the ethnic minorities are over-represented in all those groups. The frustration from that additional layer of racial disadvantage makes a combustible mixture.

We are becoming an increasingly divided nation; divided between the comfortable Britain of the well housed, with jobs, who live in the suburbs, and the Britain of the poor in our discarded, crumbling inner cities. There, the young are an outcast generation, shut out of society. There are also signs that we are creating a new black under-class—a phenomenon which has no parallel in British working-class history.

Nowhere has the impact of Government economic policy been more harshly felt than in the inner cities. To make matters worse, there has been a massive switch of Government resources away from the inner cities. Nine years ago the Labour Government designated 14 of the 364 local government districts in England as areas of exceptional deprivation and need, for which additional resources had to be found. They were grouped into partnership areas. Three instruments of policy were used to help them: the rate support grant, based on an assessment of needs, the housing investment programme, and the refurbished urban programme.

What has happened since? In real terms, the urban programme in those areas has been increased from about £150 million in 1975 to about £200 million in 1984—in constant prices, an increase of £50 million. However, the rate support grant has been reduced in constant prices by no less than £720 million. In the same period in those 14 areas, the housing investment programme has been reduced in constant prices by £270 million. Those 14 areas of great deprivation have been savaged in six years to the tune of £900 million a year.

It is no wonder that there is an inner-city crisis, social tension, disturbances, petty theft, house-breaking and drug abuse. If there is not to be a breakdown of society in Britain, the Government must take emergency action to tackle the inner-city crisis. Several Government Departments must co-operate in a major development of urban policy. It is no good expecting the invisible hand of the market to solve the problems or addressing them in the rhetoric of the competitive race or saying that these areas should stand on their own two feet. It cannot be left to the private sector, because there is no private profit in clearing away dereliction. Those areas do not have sufficient own resources. It is a national responsibility. There can be no substitute for the public sector taking the lead in halting the downward spiral and creating the environment and conditions for the private sector to follow.

Let me deal with the borough of Newham, which has been treated so unfairly by the Government. The people of Newham face a range of social, economic and environmental problems which are greater than almost anywhere in the country. What are the facts? Some 20,000 people—20 per cent., or one in five, of the work force—are unemployed. Since the Government came into office, 150 Newham residents have joined the dole queue every month. Sixty-five per cent. of council tenants qualify for housing benefit. Well over 30,000 are on the bread line, drawing means-tested supplementary benefit. Many thousands of children live in those families.

Housing is a major headache. The cheaply built working-class housing of Victorian times badly needs renewal. Post-war rebuilding has added problems of high-density, high-rise estates. Newham has 112 tower blocks, including the tragic Ronan Point, and more people living above the 10th floor than in any other area of the country. There are 11,000 households without baths or inside toilets. More than half the privately rented homes do not have those facilities. There are nearly 6,500 overcrowded households and more than 5,000 single-parent households. The waiting list for council housing is 7,300―59 per cent. up on 1983. Can the Minister understand the number of housing cases with which I must deal in my advice surgeries?

Despite those needs, which mean that Newham rates second only to Lambeth in housing need, the council receives a housing investment programme allocation from the Government smaller than that of almost all the inner London boroughs.

A Department of Education and Science study showed that, of 104 education areas in England, Newham has the highest percentage of children from low socio-economic roots, the highest percentage of children living in poor housing, the fourth highest percentage of non-white children and the fourth highest percentage of children from large families. About 35 per cent. of schoolchildren come from ethnic minorities. This large cultural diversity needs a wide range of special curricula.

As a result of difficult backgrounds, motivation and aspiration are low. Only 3 per cent. of children go on to university and another 5 per cent. to other forms of higher education—the second lowest in the country. By contrast, in Richmond upon Thames, 18 per cent. of children achieve university entrance. Many of Newham's schools are Victorian or Edwardian buildings lacking play space or sports fields.

The people of Newham come from many races and cultures. Well over a quarter belong to one of the New Commonwealth ethnic groups. Only Brent and Hackney have a larger black ethnic population, and they both receive special urban programme resources, while Newham does not. For Newham's ethnic minority groups, the problems of inner-city deprivation are compounded by racial disadvantage and discrimination. Newham's ethnic minority communities have special requirements which need additional resources. The size and diversity of Newham's ethnic population means that we have a range of needs, aspirations and outlooks, so that the task of fulfilling them is more complex and extensive than in other areas.

Newham has more than its fair share of social problems and of people in need of special care and attention. The frail, the elderly, single parents, families in tower blocks, the ill and the handicapped all make heavy demands on the borough's social services. Mortality and morbidity rates are above average. Many young people are disillusioned about the prospects of life on the dole and have slipped into a sub-culture of truancy, vandalism and crime. Too many get into trouble with the police.

That is Newham's plight. It needs special urban programme support in the form of partnership status. On the positive side, Newham's communities are resilient. They showed that during the blitz. There is a wealth of talent and of ideas for overcoming the difficulties. In this spirit, public, private and voluntary agencies have joined together to produce an action plan in anticipation of partnership status and the additional funds that it would produce.

The plan embraces six main proposals. First, we need to tackle unemployment and local employment problems, supporting existing jobs and firms and encouraging new jobs and investment. Secondly, we need to improve the physical environment. There is much to be done in improving drab local surroundings. Thirdly, we need to overcome Newham's acute housing stress. That would directly improve people's quality of life and in particular reduce the stresses reflected in the indicators of poor health and social and educational disadvantage. This would encourage skilled and qualified workers to stay in, or move to, the borough.

Fourthly, we need to tackle racial disadvantage and promote good race relations. Newham is a prime example of a multiracial society. We want to build on our vibrant multicultural community, in which everyone participates fully in the life of the borough. Our ethnic minorities need full access to the range of local services and help in establishing their own facilities to meet the social, educational and cultural needs of their communities.

Fifthly, we need to cope with social stress and people in need. Newham has a disproportionate number of people suffering from the stresses of low income, unemployment, old age and disability and in need of health and support. The strategy is to develop complementary statutory and voluntary services to help people to lead full lives. We want to develop care in the community rather than in institutions. In addition, the borough wants to develop intermediate treatment projects as an alternative to custodial care for juveniles in trouble.

Sixthly — last but not least — we need to widen educational opportunity and to help people to realise their full potential.

I have outlined the borough's problems and how local people want to tackle them. The plan and the approach to that Government have the full support of Newham council, Newham health authority, Newham chamber of commerce, the Newham voluntary agencies council and the Newham race relations association. It is also, of course, supported by my hon. Friends the Members for Newham, South (Mr. Spearing) and for Newham, North-West (Mr. Banks), whom I am pleased to see in the Chamber. I am making a plea for central Government to stretch out their hand in partnership and to work in co-operation with Newham to solve the borough's problems. So far, the Government have discriminated against the borough. The Government's statistics show that other areas, less deprived, get more. Nor does the allocation of traditional urban aid offer a solution. Newham receives less and less from the source every year.

Only partnership status will give an assured source of special financial resources. It is a mystery to me why it has not been granted already, and why Newham is discriminated against. When we visited the Under-Secretary of State recently, the hon. Lady said that she was mystified as to why adjacent and very similar boroughs were sometimes treated so differently. I will hazard a guess about the reason. Such decisions are often worked out by computers in the Department. I suspect that someone has fed into the computer the information that part of Newham falls within the area of the London Docklands development corporation, which is given extra resources to promote development in dockland. The computer has concluded that Newham is already being aided and therefore does not qualify for partnership status. Incidentally, Tower Hamlets has partnership status, although it is also a dockland borough.

If this is so— it is the only explanation that I can think of—the Minister should tell the computer that it is a delusion and a misreading. Other facts should be fed into the computer. Although one third of the borough's space is in docklands, 94 per cent. of its people live outside. The non-docklands part of the borough has a population greater than the whole of Hackney or Tower Hamlets and has a range of inner-city problems of the same magnitude, but it does not receive the resources that these adjacent areas receive.

The majority of the ethnic minorities live in the north and east of the borough. Action to meet their needs will have to be concentrated there. The computer should be told as soon as possible that the establishment of the LDDC by the Government has made it more difficult to tackle the borough's problems. For example, the LDDC's concentration on building homes for sale has depleted the land stock that had been reserved for council housing. That makes it more difficult to reduce housing shortages and retards the process of decanting young families from tower blocks. The needs of the north of the borough where my constituents live are different from those in the docklands. Partnership resources are urgently needed to meet those needs.

I hope that the Minister will not try to fob me off by talking about the traditional urban programme. The seven partnership authorities receive an additional £10 million to £25 million each, and even the 23 programme authorities receive an additional £3 million to £6 million each, but Newham receives only £1.5 million under the urban programme. Newham is more deprived than six of the seven partnership authorities and more deprived than all the programme authorities. What explanation do the Government have for that unfair treatment of Newham?

It is no use the Minister talking about urban development grants. Newham has received only one large grant, for Gunson Sortex. Such grants do not tackle social problems and are limited by the private sector's interest. Few firms are coming forward with plans.

The Minister should not talk about other designated districts or ODD funds. Newham receives only £400,000 here. There are six applications for derelict land grants in, and we are awaiting the results.

Traditional urban aid is the only source of special Government funding available to Newham for community and social projects, but this is actually being reduced. In 1985–86 the figure was unchanged, at about £400,000, but the 1986–87 grant has been cut by almost half, to £254,000. Why is Newham being treated so badly?

The one-off nature of the funding contrasts sharply with the rolling programmes which are a feature of partnership authorities. Newham has only mainstream funding. Exchequer support for council revenue expenditure has been cut from 61 per cent. in 1979–80 to 46 per cent. in 1986–87. This has resulted in losses of tens of millions of pounds to the council.

In recent years the council has been able to use internal funds to meet part of its annual expenditure. It has done that to keep rates lower than they would otherwise have been. This is sometimes called creative accounting. However, in 1986–87 it is not able to do that. Although revenue balances will be used to alleviate the final rate demand, a strong element of shortfall has to be passed on to the ratepayer. Rates are being increased by 13 per cent. this year because of Government rate support grant cuts. Newham's rates have gone up this year because, by special measures, the council kept rates down in previous years.

The Minister has been to Newham. He knows about its severe problems. He must also know that Government action in mainstream capital and revenue finance to the borough and the absence of partnership status shows a complete disregard for the problems. The Government have made false promises to the people of Newham. If the urban crisis in Newham is to be tackled vigorously, new programmes, projects and facilities will be required. Newham's case for partnership, which the Government are sitting on, identifies a practical strategy and a plan of action for addressing these issues.

Do we have to wait for a new Government before there is action? I look forward to hearing whether that is so. I call on the Government to work with us to help the borough to implement the new programmes, to tackle the special and severe problems of Newham by giving partnership resources and creating conditions which can offer a more purposeful and rewarding way of life to my constituency.

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

I congratulate the hon. Member for Newham, North-East (Mr. Leighton) on his presentation of the case for Newham. If promotion to partnership status were based just on the energy, persistence and eloquence of Newham councillors and Members, Newham would have been promoted some time ago; however, the Government have to take other factors into account.

As the hon. Member said, the case has been put to me on several occasions and, more recently, on 10 March, to my hon. Friend the Under-Secretary. I have been to Newham several times and have had a guided tour with the both the hon. Member for Newham, North-East and the hon. Member for Newham, North-West (Mr. Bank.). I have met leaders of the council on several occasions, and through my contact with the London Docklands development corporation, I have an insight into some of the difficulties that the hon. Gentleman mentioned. I would not dissent from some of his analysis, although he will not expect me to endorse his criticisms of the Government.

We accept the need for Newham to be given help to take advantage of opportunities for urban regeneration and to tackle the social, housing, economic and educational difficulties in the borough. Sadly, these problems are not peculiar to Newham. They are shared with many inner-London and a few other outer-London boroughs, but I accept that they are present in acute form in Newham; that underlines the need for priority to be given to the borough in distributing any additional resources.

While recognising the strength of Newham's case for partnership status, we consider it important that existing partnership and programme authorities should receive support that is sufficiently substantial and long terra to underwrite a full programme of projects, so that a real impact can be made on the ground and an assessment made of the relative merits of different types of projects.

Limited urban programme resources have meant that we have had to restrict the number of partnership and programme authorities to avoid spreading resources too thinly. Total urban programme resources are constrained and there is little likelihood in the immediate future of further partnership or programme authorities being created. I know that this will come as a disappointment to the hon. Gentleman, and to Newham, but I can assure him that this is something that we keep under review, and that Newham's case will be given priority if and when changes are made. This does not mean that we are currently ignoring Newham's problems or refusing to help the borough. Help is being offered to Newham in a number of ways.

The hon. Member ended by referring to rate support grant and the rates, but he was on fairly thin ice there. Under the 1986–87 settlement, we were willing to increase Newham's rate support grant by £21.8 million—that is, 34.7 per cent. — over 1985–86, for spending at the assumed level of a 3.4 per cent. increase on 1985–86 levels. We estimated that Newham's expenditure would increase by 14.5 per cent. largely due to abolition of the GLC. The proposed settlement would have allowed for a rate reduction of some 14 per cent. Unfortunately, Newham has chosen to increase spending by as much as 26 per cent., and it has therefore inflicted on its ratepayers the largest rates increase— 12 per cent—in London. The hon. Gentleman must accept that that represents an opportunity lost to ease the burden on local residents and business and to encourage enterprise. I mention this only because the hon. Gentleman spoke in a somewhat provocative way in that regard.

We are determined to help Newham to tackle its urban problems in a number of specific ways. It is an "other designated district" in urban programme language and is making good use of its powers under the Inner Urban Areas Act, with the aid of grant from the Department.

In 1985–86 we approved 79 projects, attracting grant of nearly £360,000. Of those approvals, more than a third were rent grants for start-up businesses taking space in the Stratford workshops—the old Plessey works, which had been converted to provide 93 small managed workshop units. I recently approved a project to provide additional workshop space at the Shalom employment action centre, with grant support of £47,000. That centre is aimed at the long-term unemployed. The majority of users are from Asian or Afro-Caribbean backgrounds and special provision is also being made for the young unemployed.

In relation to the traditional urban programme, £694,000 was allocated in 1985–86, compared with £264,000 the previous year. There were exceptional reasons, due to underspend elsewhere, and I cannot hold out any prospect of such a large increase this year. Nevertheless, that was a substantial sum to help industrial and commercial projects in Newham. Quite a few of the projects were aimed directly at ethnic minority groups. At the top of the list, approvals for children's holiday projects worth nearly £32,000 were given and the Department is making more than £500,000 available to help Newham to support voluntary bodies previously backed by the GLC.

Mr. Tony Banks (Newham, North-West)

We are grateful for the various packages offered by the Government, but does the Minister accept that, as Newham is the second most deprived local authority area in England, the resources received from the Department are inadequate to deal with our problems?

Sir George Young

The reality of government, as compared with the aspiration of opposition, is that one has to make difficult decisions. The London borough of Haringey, for example, can make a case almost as eloquent as that made today for Newham, but if we promote boroughs such as Haringey and Newham we must inevitably demote others. If one accepts that the purpose of the partnership programme is to make a sustained attack on the problems of a borough, it cannot simply be switched off from one year to the next. We are committed to an element of continuity in the programme and it is difficult to promote boroughs such as Newham and Haringey unless additional resources are made available for the programme as a whole.

Mr. Banks

That is up to you.

Sir George Young

With regard to derelict land—

Mr. Leighton

rose—

Sir George Young

The hon. Gentleman slightly overreached his time, and I wish to say something about derelict land.

The impression that I got when I visited the borough was one of considerable dereliction. The Department is writing to Newham today to convey approval of two projects for derelict land of some £36,000, with the possibility of further approvals to come. The two approved projects involve the reclamation of land and buildings off High street, Newham at the Bow bridge site—I do not know which hon. Gentleman has the fortune to have that site in his constituency—and off the North Woolwich road at Knights road, in an industrial improvement area.

The first project concerns the clearance of land and the second involves the clearance of obsolete industrial buildings and the removal of rubble. We have also been discussing with the borough and with the gas board the possibility of supporting, through derelict land grant, a major survey of the Beckton gasworks site. We are now awaiting proposals from the gas board, which we shall consider as positively as we can.

It is true that, so far, only one approval has been given for urban development grant — the Gunson Sortex project — but the Department is in touch with the borough about two possible further projects and I am pleased to see that good progress has been made in working up those cases.

As the hon. Member for Newham, North-East knows, we set up an urban housing renewal until last year, with £50 million available, to tackle local authority housing problems. On top of that, resources were available for community refurbishment schemes to improve municipal estates. I am glad that, at the council's request, my Department's urban housing renewal unit was able to visit Newham on 6 February to offer advice on how to tackle some of the worst rundown housing estates.

As a result of that visit, the borough has now submitted proposals for four schemes involving the Rathbone estate, Clements Avenue estate, James Sinclair Point and Dennison Point. The proposals are now being considered, and my Department will be in touch with Newham shortly about some of the details.

The hon. Member touched on the London Docklands development corporation. It is not a computer which makes the decisions, it is the Minister. I am not sure whether that is good news or bad news for hon. Members. We know that the LDDC area represents a relatively small area of Newham. None the less, it has brought considerable investment and activity to the borough. For example, 1,339 homes had been built on LDDC land in Newham up to September 1985. That represents nearly two thirds of total house building on LDDC land.

Mr. Leighton

Prices.

Sir George Young

The hon. Gentleman shouts, "Prices." However, nearly half the houses have been sold for less than £40,000, which, for London, is relatively cheap. We have widened housing choice to residents of the borough. If the hon. Gentleman looks at those who have bought houses from the LDDC, he will find that a substantial number, about one third, are either tenants of existing local authority houses or those on the waiting list.

I hope that the wide range of projects and initiatives I have mentioned in the short time available will reassure the hon. Gentleman and Newham that the Government are concerned to help the borough with the process of urban regeneration. I am impressed by the width of support for the borough's efforts to stimulate the local economy and improve the environment and the efforts of all sections of the business community and the voluntary sector. Within the resources available, we will continue to give what help and support we can in working up good schemes for further specific grant support.

Mr. Leighton

Does the Minister not agree that the moral of what he has said is that the Government are not appraised of the seriousness of the inner-city crisis and are not putting in sufficient resources? Last year we spent half a billion pounds in the Falklands. Would it not be better to put half a billion pounds into our inner cities before they explode?

Sir George Young

When the Govenment took office in 1979, £90 million was spent on the urban programme. The figure for the current year is £317 million. It has gone up very substantially. Therefore, it is not true that we have switched our priorities away from the inner cities. We are spending more and more on them. We have introduced the derelict land grant scheme and the urban development grant and we have a new grant in the Housing and Planning Bill, currently going through the House.

Therefore, I reject the criticism that we are insensitive to the problems of inner cities. However, it is not just a question of public expenditure; it needs the commitment of the private sector and the voluntary sector. We are determined to harness the energy of those sectors in tackling the problems in Newham and elsewhere.

Question put and agreed to.

Adjourned at two minutes past Three o'clock.