Inner Cities

HC Deb 27 April 1987 vol 115 cc31-40

4.6 pm

The Paymaster General and Minister for Employment (Mr. Kenneth Clarke)

With permission, Mr. Speaker, I should like to make a statement on the inner cities initiative and the city action teams.

In February last year I announced the setting up of the new inner cities initiative in England. Its aim was to improve the targeting, and increase the benefit to local people, of the money channelled through existing central Government programmes in eight small inner city areas. We give it a modest top-up budget to test out new approaches to local problems, in particular those designed to improve training and increase the opportunities for employment and self-employment for local people. Task forces were set up in shop-front offices in each of the eight areas to co-ordinate Government action and to make better use of the large amounts of public money already being spent there. They were also given the job of working with the private sector, local authorities, voluntary groups and the residents themselves in developing local solutions to local problems.

The inner cities initiative was set up as an experimental programme. In a short time it has already shown what can be achieved by a common partnership of effort between the public and private sector with the active involvement of local people. Five different Government Departments have been involved in this work and I am also grateful for the way in which the Manpower Services Commission has supported the initiative by giving the inner cities high priority in targeting its programmes. The initiative has demonstrated how the Government, by operating at a local level, can give a lead by pulling together the efforts of all those who are involved in our inner cities.

The initiative has now been running for over a year. There have been significant and positive results. Our eight task forces have put themselves firmly on the local map. The task force have shown that new ideas and a fresh approach are just as important as money in releasing the enormous fund of energy and ideas that local people have available to tackle their problems. We said from the outset that any lessons learned from our eight small areas would be applied more widely to other inner city districts.

The results so far are so encouraging that I have now decided to expand the coverage of the initiative to other towns and cities, while retaining its experimental and informal nature. Therefore, I have decided to set up a further eight task forces on the same basis as the original eight. They will be located in parts of Coventry, Doncaster, Hartlepool, Nottingham, Rochdale, Preston, Wolverhampton and the London borough of Tower Hamlets.

The extra funds available to all the task forces to top up other programmes and to support new ideas will be increased to £14 million for 1987–88. Experience shows that the availability of this top-up money will enable all the task forces to develop programmes of action to help achieve the goals of the initiative, particularly in employment and enterprise. The approach works best where there is a genuine partnership of effort. We shall be looking to work with local people, local authorities and local industry and commerce to achieve that partnership.

I also propose to carry forward the work of the five city action teams, which we set up two years ago. Those teams consist of the regional directors of the Department of the Environment, Department of Trade and Industry and the MSC in each of the cities. They dispose of large budgets, which they seek to co-ordinate more closely, and we did not originally expect them to need separate CAT budgets as a team. However, last May we gave £1 million to the Newcastle-Gateshead team as part of a package of measures to relieve the effects in the north-east of the shipbuilding redundancies. That city action team used this sum very effectively to plug gaps in its ability to support services for local business and training in new technology. Its achievements demonstrate that the city action teams have an important part to play in accelerating progress in areas crucial to the regeneration of our inner cities and in attracting private sector support for worthwhile projects. Accordingly I shall be making £1 million available to each of the five city action teams in 1987–88 to be spent on the basis of a clear strategy that each team will be asked to prepare for local action.

The additional resources required for the expanded inner cities initiative and for the city action teams—an extra £10 million in 1987–88—will be found from within my Department's existing provision and, because we are committed to full value for money for Government spending, we shall continue to monitor and evaluate the contribution which these measures are making to urban regeneration.

One of the aims of our inner cities initiative has been to pool the efforts and resources of all Government Departments with a responsibility for our cities. As part of that concerted approach, my hon. Friend the Minister for Housing, Urban Affairs and Construction and I will be making a joint action for cities presentation tomorrow morning in London's docklands. This will be the first of a series of presentations across the country aimed at the business community, the voluntary sector and other opinion formers in our inner cities, to increase their involvement with Government efforts to make our cities better, safer and more attractive places in which to live and to do business.

The drive to help our inner cities is a key priority for the Government. It reflects our determination that all our people, wherever they live—north, midlands or south—should have the opportunity to share in this country's growing economic success. It reflects our belief in the younger generation, including those young people growing up in our multiracial inner cities, and our determination to improve their prospects. We have always made substantial resources available. What we are now doing is targeting those resources better to ensure that it is the people who live in our inner cities who benefit from our efforts. This initiative is designed to help inner city residents by helping them acquire new skills so that they can compete on equal terms for the opportunities which are increasingly becoming available; by helping them overcome the problems they face in setting up in business on their own account; and by helping to make our inner cities the sort of place where people want to live and where businesses want to invest. Today's announcement is just the latest in a long line of measures to promote action for cities, and I commend it to the House.

Mr. John Evans (St. Helens, North)

It is increasingly obvious from the bribes that are flowing from the Cabinet that a general election is imminent. It is obvious that it will be in June, whether it be on 11 June or 18 June. If the hypocritical waffle that we have had from the Paymaster General today is an election bribe, it is the most miserable little sprat that we have ever had. It will not catch any mackerel and it certainly will not persuade anyone to vote other than Labour in the areas that he mentioned.

The Government are proposing to establish a further eight city action teams and are giving them all of £10 million to tackle the appalling problems of massive unemployment, had housing and multiple deprivation. The Government regard £10 million as the solution to the problem. But what is the background to the problems of most of the inner cities in our country today? Since 1979 about £200,000 million has been cut from the rate support grant to local authorities. Indeed, the authorities mentioned in this statement have been collectively deprived of hundreds of millions of pounds of rate support grant. The Government propose only a further £10 million. Twenty-five per cent. of Britain's schools do not have inside toilets. There is a £700 million backlog of repairs to Britain's secondary schools. The council house repair backlog is rising at the rate of £900 million a year and 1,300,000 householders are now on council house waiting lists. There is a £1,700 million backlog of repairs to sewers and drains, most of them in the inner city areas of our nation. However, the Government have pledged to spend only £10 million solving the problems of inner cities.

Despite the smallness of the extra funds, I am certain that the local authorities of this country, especially the Labour-controlled authorities such as those the Paymaster General has listed, have shown themselves willing and anxious to co-operate in any meaningful scheme that will help to solve the problems of unemployment and deprivation in their areas. But can the Minister say whether he has consulted the local authorities he named in his statement and, if not, why not? Will he consult them in the future because in his statement he informed us that he will be looking to work with local people, local authorities and local industry and commerce to achieve a partnership of effort? Will he give an undertaking that the local authorities will take the lead role in any initiatives to solve the problems in their areas?

Under this Government, unemployment has tripled in these areas since 1979, most of it in what was once the manufacturing industry. With that increased unemployment has come increased poverty and hardship. The problems of those areas, like the problems of the rest of the country, will not be solved by gimmicks such as city action teams and job training schemes, but by the election of a Labour Government with powers and pledges to solve the problems of unemployment in this country. That is why we will win the election in June or whenever the Government call it.

Mr. Clarke

I suppose I am not surprised that the hon. Member for St. Helens, North (Mr. Evans) began by relating all this to elections. If he feels that further Government assistance to inner cities will do his party harm, I hope that his worst fears are justified. He began by saying that we are producing election bribes. I point out that this is merely a logical extension of the work that inner city task forces started 12 months ago and that city action teams started two years ago, together with the enterprise zones, the urban development corporations and the concerted policy the Government have been developing on inner city problems for many years. The hon. Gentleman accused me of hypocrisy, but in this case I think he is guilty of hypocritical cynicism about every good idea that comes from the Government about employment, training, inner cities or any other action.

The hon. Gentleman keeps mentioning local authorities. So far as I am aware, the sole policy of Her Majesty's Opposition on inner city problems is that more money should be given to Labour local authorities and that they should be allowed to put up the rates again. However, that has had the effect of driving away business and employment opportunities from a large number of the areas we are talking about.

Trying to put together inner city or city expenditure as a whole is difficult. However, in the past year the Government spent well over £700 million tackling inner city housing dereliction and decay. We are talking here about eight small areas, now to be 16 areas, where the Government will work directly on the ground with small groups of officials and will work with the local people on a shop-front basis, targeting money into those small areas. We spent about £80 million last year in the original eight task force areas and we are spending this year about £82 million in the eight new task force areas. On top of that is this £14 million in top-up funds to encourage new ideas and new approaches, and to help stimulate progress more quickly.

We wish to co-operate with local authorities and I trust that the eight local authorities in whose areas we intend to operate will work with us. We have had good co-operation so far. In the case of Labour-controlled Birmingham, for example, I disapprove of quite a lot of its politics and it disapproves of quite a lot of mine, but the fact is that we have worked together to produce a lot of extremely good projects which have benefited the people of Handsworth and Aston. When dealing with useless organisations that will not co-operate, such as the Labour councils in Southwark and Leicester, one has to go to voluntary bodies, the private sector or anybody else of good will to do some good for the residents.

I hope that the eight authorities we are now approaching will work with us. Our intention is to work with them. We have made informal soundings of some. We shall be consulting them and I look forward to working in partnership with the local authorities, the private sector, voluntary bodies and the people who live in the inner city districts of the eight cities I have mentioned.

Mr. Ian Mikardo (Bow and Poplar)

Will the Minister kindly tell me where in Docklands he is holding his lush high-profile public relations exercise tomorrow? Would it be in one of the penthouse flats being made available to my constituents at no more than £375,000 a time, or would it be in the workshop of one of the 50 or 60 small and medium-sized firms that are presently being driven out, with their employees being put out of work, by the activities of the London Docklands development corporation?

Mr. Clarke

The conference is being held in the Limehouse Studio. Limehouse Studio is one of the places I have visited most recently in the docklands urban development corporation area. It has only to be seen to bear witness to the outstanding success of the whole idea of urban development corporations. It shows what can he achieved by attracting private sector investment into a derelict area.

As a Minister, I first went to the docklands when I was a junior Minister at the Department of Transport. I visited those empty expanses of water and derelict warehouses that have been created by years of industrial relations problems and a failure to adjust to change. I attended meetings where Labour councillors from the local authorities bickered endlessly about no solutions in particular for turning Docklands around. I have seen since what the Docklands development corporation has achieved. If the hon. Gentleman prefers Docklands as it was before the Government acted, compared with Docklands as it is now after the work of the development corporation, I can say only that he is advocating a policy of total despair for inner city residents all over the country.

Mr. Michael Fallon (Darlington)

Does my right hon. and learned Friend agree that the biggest handicap for the inner cities is the bureaucratic, negative and cynical Socialism practised by Labour local authorities within the areas mentioned? Does he also agree that the city action teams of Tyneside and Cleveland are regarded as a breath of fresh air, and that the extra million quid will be very welcome? However, does he also agree that that partnership will not reach fruition until local authorities such as Newcastle and Middlesbrough reduce their rates and promote policies that encourage business and job creation?

Mr. Clarke

I agree with my hon. Friend that his description of the role of the local authorities in the cities is true in most, if not all, cases. However, to a varying degree, many Labour authorities are, unfortunately, hostile to new ideas and resistant to innovation. Even where we co-operate with them, as we strive to do, I find that the process of decision-making within the local government machine is distressingly slow. Nevertheless, I concede that I can cite examples of Labour-controlled local authorities with which it is possible to work. We shall be striving to work with local authorities of whatever political complexion in the eight places I have mentioned.

I agree that rates are particularly destructive to the development of new business. A restraint on rate levels in the cities will be an enormous advantage in attracting new investment. Rate capping was about the only good news that businesses had in some of those boroughs and it is the only thing that is making it possible to attract new business into them now.

Mr. Ron Leighton (Newham, North-East)

Is the Paymaster General aware that no areas have suffered more grievously under this Government than the inner cities? In my constituency, unemployment has gone up by over 300 per cent. Inner cities have suffered in particular by losing large sums of rate support grant. My borough of Newham has been robbed of more than £100 million since the Government have been in office. Around the country, many hundreds of millions of pounds of rate support grant has been lost. Is he aware that the puny £8 million that he announced last year and the £10 million he has announced today are derisory by contrast? Is he also aware that his press conference tomorrow will be seen as an insulting election gimmick, and that what we really need is a partnership between Government and local authorities—not making war on the local authorities—to bring back enterprise and employment? In the inner cities we need a major housing programme, rather than a cut in expenditure on public sector housing by 60 per cent., which is what the Government have done.

Mr. Clarke

The hon. Gentleman confirms what I said to his hon. Friend the Member for St. Helens, North (Mr. Evans). As far as I can understand it, Labour party policy is that the amount of rate support grant should be increased to allow Labour local authorities to go back to spending money at whatever level they wish, and that they should be allowed to put the rates up again. That is just about the Labour party's policy, full stop. When it comes to the work of urban regeneration and the figures quoted by the hon. Gentleman, I remind him that the urban programme, for which my hon. Friend the Minister for Housing, Urban Affairs and Construction who is sitting alongside me is responsible, has trebled in real terms during the lifetime of the Government. A total of 75 per cent. of that money comes from central Government and it is making a big contribution to the regeneration of local areas. The Government must work directly. It is no good saying that our only contact with the cities must be through Labour local authorities, which must have money given to them and be left to get on with the job. I am afraid that far too many of them show that, left to themselves, they cannot get on with the job. Neverthelss, partnership with them is what we wish to achieve.

Mr. Barry Porter (Wirral, South)

I am delighted that my right hon. and learned Friend can find £10 million for the problems of the inner cities. However, would he not have thought that there are other parts of the United Kingdom that have greater priorities, where people are being murdered by the day? Would not the Northern Ireland Office be better off with the £10 million to spend on security in the Province, rather than to have to make expressions to the House of abhorrence, disgust and shock, which do nothing to save lives?

Mr. Clarke

Like my hon. Friend, I sat through the statement made by my right hon. Friend the Secretary of State for Nothern Ireland a moment ago. I know that my hon. Friend has a close involvement with the affairs of Ulster and the problems the Province faces. I accept that Ulster requires considerable help in restoring its economy and giving people worthwhile employment and training opportunities to raise their expectations and hopes. I hope that I can persuade my hon. Friend that our initiative for the inner cities in England is not in competition with any worthwhile claims for resources in Northern Ireland, Scotland or Wales.

Mr. Ian Wrigglesworth (Stockton, South)

Welcome though the idea and practice of partnership and the new resources are, does the Paymaster General not accept that there are still many other areas in the inner cities in Britain that require this sort of assistance and partnership? Does he agree that the major problems of our inner cities have been caused by the economic and industrial policies of the Government, particularly in the regions and the cutbacks in rate support grant that have hit many areas, not least my own, very hard in recent times? The cuts in rate support grant have made it impossible for the local authorities to cope with the problems of economic and industrial decline that the Government's economic policies have brought about.

Mr. Clarke

I accept that there are many areas other than the 16 in which this initiative will be operating and the five city action team areas that could benefit from a concerted, direct Government approach. We are working on an experimental, informal basis in those representative 16 areas now. However, it is plainly our intention to apply any lessons we learn there throughout other areas. The agencies with which we are working—Business in the Community, the National Association for the Care and Resettlement of Offenders, the Evangelical Alliance, many of the clearing banks, and the residents themselves—are, I trust, developing new approaches to a long-standing problem that needs to be tackled in many of our cities.

With respect, I do not think that the hon. Gentleman really believes that the problems of our inner cities are some sudden creation of the past few years of economic difficulty. Inner city problems have been growing in this country because of profound structural and social change for over 20 years. What we are now seeing is an attempt to tackle them by central Government giving a lead to every other agency of good will in a more direct way than we have seen before, and I trust that that lead will be returned. I do not accept the hon. Gentleman's simplistic analysis, which Labour Members share, which is that somehow the problem has something to do with rate support grant and that if the rate support grant was put back we would not have any inner city problems. Giving more rate support grant to some of the inner London boroughs would make their problems worse rather than better.

Mr. Ken Eastham (Manchester, Blackley)

The Minister was remarking to the House about the great successes of the past 12 months. Can he tell us whether that includes the inner city areas of Manchester, because I can tell the House that unemployment there is now standing at 35 per cent.? That hardly illustrates the success story of a Government who have been in power now for eight years. The Minister refers to finding the £10 million from his own Department's estimates. Can he tell the House where the £10 million is coming from? Does it mean that other schemes will be abandoned to find that money, or was it already in the Department?

How can the Minister say to us that finding £1 million for the redundant shipbuilders will help when there are thousands and thousands of redundant engineers? What difference will £1 million make when what they really want is jobs?

Mr. Clarke

Many good things have happened, and are still happening, in Manchester in recent years, and the city is steadily recovering. One of the major physical contributions that the Government have made is the new G-MEX exhibition centre which has largely been funded by central Government money. The hon. Gentleman should look next door to Salford and see what is happening in Salford quay and elsewhere. In the Moss Side task force area, with which this initiative is concerned, we are pursuing a programme with Selcare Trust to provide new engineering workshops for 75 people. In addition, bursaries are being provided to the Prince's Youth Business Trust in Moss Side. These are only the first of many projects that are now coming along to help the inhabitants of Moss Side and Hulme. Instead of simply trying to denigrate and run down these programmes, I hope that the hon. Gentleman and those who represent these great cities in England will see that they are beginning to succeed and that they will lend their efforts to encourage local people to co-operate with them as well.

Mr. Peter Thurnham (Bolton, North-East)

I welcome my right hon. and learned Friend's announcement and share his disappointment that Opposition Members have not given it a better welcome, especially as so many of these problem areas come under Labour-controlled authorities. When can we see an extension of this excellent initiative to areas such as Bolton where there is high unemployment and where I am sure this initiative would be much welcomed? Secondly, will he consider widening the membership of his city action teams by including the regional director of the DHSS?

Mr. Clarke

I am grateful to my hon. Friend for his condolences about the reaction of the Labour party. It is wholly predictable on this subject. Every statement that I have ever made as a Minister in the Department of Employment has been greeted by the Opposition with nothing but sneering cynicism coupled with no positive proposals of their own. There is merely an attempt to run down what we are doing. I do not find that a very encouraging approach to the problems of the inner cities.

I appreciate the claims of Bolton, and the selection of further places in which to experiment in Lancashire was extremely difficult. We tried to get as representative a mix as we could and we have now chosen Preston and Rochdale, with which Bolton might be bracketed. Any lessons learnt there can, I trust, rapidly be extended to Bolton as well.

Although the city action teams principally comprise the three Departments that I have mentioned, I take my hon. Friend's point that it is important that those responsible for the policy of other Government Departments should get involved as well, and to a large extent they do.

Mr. Don Dixon (Jarrow)

Does the right hon. and learned Gentleman appreciate that the devastation caused by the Government's policies is not confined to inner city areas? For example, South Tyneside — the local authority that I represent—has the highest unemployment rate outside Northern Ireland, and the total amount of money that the right hon. and learned Gentleman has announced today in his election gimmick is less than the amount of rate support grant that the Government have stolen from South Tyneside since 1979. Incidentally, South Tyneside is the smallest metropolitan district council in the country.

Mr. Clarke

I have been to the hon. Gentleman's constituency, and I would not for a moment underestimate the appalling economic problems that it faces. His claim that they are the result of the economic policies of the last few years is, frankly, ridiculous. There has been a longstanding industrial and employment problem in his area. I have not announced a new task force for Jarrow and Tyneside today because my right hon. Friend the Secretary of State for the Environment only recently announced a new urban development corporation for Tyneside, with more than £100 million of new resources going in over the next five years.

The hon. Gentleman's claim that good news of this kind is all election gimmickry ignores the fact that this policy has been steadily emerging over the last five years, despite the sustained suspicions and resistance of the Labour party and other Opposition Members.

Mr. Martin M. Brandon-Bravo (Nottingham, South)

All reasonable people will welcome my right hon. And learned Friend's statement today and recognise the Opposition's comments as nothing more than sour grapes. I thank him very much indeed for including the city of Nottingham in the additional aid, because I know that, following his visit to our city, he was made well aware of the willingness of the public and private sectors to work together. I also add my thanks to my right hon. and learned Friend and other senior colleagues who have demonstrated that it is possible for a number of Departments of State to work together and join in common cause for the benefit of our inner cities.

Mr. Clarke

I am grateful to my hon. Friend and look forward to working with him in that part of the area that is in his constituency. He does not represent the entirety of Forest Fields, Radford and Lenton, but he represents enough of it. I shall certainly need his assistance. My right hon. Friends the Secretaries of State for the Environment and Employment and myself have been to Nottingham recently and have followed its affairs very closely. We tried to engage the interest of the local authority and local industry, and some of the things that have happened recently are an attempt to respond to that on the part of the people of Nottingham. I believe that, through the task force approach, we have already established that people will work with us and take advantage of the new ideas and resources that we can bring in order to turn round areas such as Radford, Lenton and Forest Fields, where the residents need further help to obtain skills and training so that they can get back into the economy.

Mr. Nigel Spearing, (Newham, South)

Does the Paymaster General recall that a few minutes ago he either said or implied that the activities of urban development corporations assisted local people? Will he take it from me and my hon. Friend the Member for Bow and Poplar (Mr. Mikardo) that the activities of the London Docklands development corporation mostly disadvantage local people—[HON. MEMBERS: "No."] It is true! Firms and people are being driven out by escalating land values and the arrogance and acquisitive instinct of the LDDC. When the right hon. and learned Gentleman goes to Docklands tomorrow, will he announce those features of his policy that are to the advantage of local people, and only those?

Mr. Clarke

I flatly and totally disagree with the hon. Gentleman's description of urban development corporations—

Mr. Spearing

In London.

Mr. Clarke

As I told his hon. Friend the Member for Bow and Poplar (Mr. Mikardo), it seems to me that he and his hon. Friends are advocating the conservation of dereliction and decay, presumably because that is the political power base of themselves and their friends. That is not the way to cure the problems of inner city London.

Mr. Tony Baldry (Banbury)

Does not my right hon. and learned Friend agree that in much of the inner cities Labour-controlled local authorities have been part of the problem rather than part of the solution, and that one of the great advantages of the sort of initiatives that my right hon. and learned Friend has been taking is that at last they are attracting entrepreneurs and those concerned about building up business to come back and play a full part? Unless entrepreneurs are again prepared to take a leading role in the inner cities, there is very little future for such areas.

Mr. Clarke

I wholly agree with my hon. Friend. Unfortunately, in some Labour local authority areas, although not all, the activities of the local authority do more to exacerbate the problems than to cure them. The local authority can itself be part of the problem in places such as Leicester and Southwark, as I have discovered through the task force policy during the last 12 months. I agree with my hon. Friend that we must get the private sector, voluntary bodies and local people, much more directly involved, and the task force approach has succeeded in doing that. Clearing banks are collaborating with us in some of these areas, and major firms are showing an interest and helping us by working through Business in the Community. Well-respected voluntary bodies such as NACRO and APEX are working with us, too. Where a local authority joins in, that is all to the good and speeds things up. Where a local authority refuses to and simply creates difficulties, we must find others of good will who want to do something to alleviate the problems of the inner cities.

Several Hon. Members

rose—

Mr. Speaker

Order. I must apply the same principle as I did on the previous statement. I shall call one more Opposition Member and we shall then have to move on.

Mr. Frank Haynes (Ashfield)

Is the Paymaster General aware that from now on it seems that the Government Front Bench will show a completely different attitude towards the inner cities because of the coming general election? Is he also aware that he, the Minister for Housing, Urban Affairs and Construction, and his sidekick, the hon. Member for Nottingham, South (Mr. Brandon-Bravo), who happens to be a member of the Nottingham city council, have been severely critical since they came to power in 1979 of what the city council was not doing? It now appears that the electorate will take notice of what has been said this afternoon and will bear it in mind in the local district elections. They will let the Government know exactly where they stand on this fiddle of money for inner cities.

Mr. Clarke

All the talk about elections has come from the Opposition, and I can only think that several hon. Members are gripped by a sense of panic about the consequences. From the hon. Gentleman's remarks I could not understand whether or not he supports the announcement of a new task force for the inner area of Nottingham. I await the reaction of his allies on Nottingham city council and Nottingham county council, but I am genuinely hopeful that they will respond and offer to approach the problems in a spirit of partnership and step up the efforts that we should make in order to improve conditions in that inner city area.