§ Order for Second Reading read.3.47 pm
§ The Parliamentary Under-Secretary of State for the Environment (Mr. David Trippier)
I beg to move, That the Bill be now read a Second time.
This Bill amends paragraph 8 of schedule 31 to the Local Government, Planning and Land Act 1980. Part XVI of that Act contains the provisions under which urban development corporations are established and operate. I know that hon. Members will be familiar with urban development corporations. UDCs are given the task of regenerating their designated areas. Their main functions are to assemble, reclaim and service land to provide infrastructure and to promote development. They can bring a single-minded and co-ordinated approach to the problems of their areas, backed by Exchequer funds.
The beneficial effects of such an approach are apparent in London docklands and on Merseyside, where the first two UDCs were set up in 1981. The proposal to set up a UDC in London docklands was scrutinised by an all-party Select Committee, which said that its memberswere forcefully struck by the extent of the calamity in docklands and the vastness of the task facing anybody seeking to regenerate the area.The London docklands development corporation took on that vast task, which was an enormous challenge. After only six years, the docks have become a focus for growth. Private sector investment in excess of £2.2 billion has been committed; 12,000 homes have been completed or are under construction; 2.5 million sq ft of non-residential floor space have been completed and 7.5 million sq ft are under construction. The docklands light railway and the London city airport have been built, and 15 miles of new roads provided. More than £10 million have been given to social and community projects. All that, and more, has been achieved on the back of £350 million of Government grant, supplemented by expenditure out of receipts from land sales.
The Merseyside development corporation faced a different, but equally daunting, task and it has responded with major, imaginative projects, most notably the restoration of the Albert dock warehouses, which has converted the area around it into a hive of activity.
Over 200 acres of derelict land have been reclaimed for housing and commecial development and a further 200 acres of land and water have been reclaimed for recreation and public open space.
The five new UDCs set up during this year have only just embarked upon their tasks. But already the response to them has been most encouraging. The areas are already starting to buzz.
I now refer to the role of this modest Bill in those developments. The background is that schedule 31——
§ Mr. Simon Hughes (Southwark and Bermondsey)
At some stage, will the Minister give us the up-to-date position on job progress in the present two UDCs? Will he tell us the net gain or loss of jobs over the six-year 936 period, as well as progress on housing, with the relative number of houses and distribution between the public and private sectors?
§ Mr. Trippier
I shall be happy to deal in detail with those matters in my winding-up speech. The hon. Gentleman may recall that when we previously debated the matter before the House rose for the summer recess, I referred in particular to the importance of training with regard to encouraging local labour to take advantage of the jobs that would be made available. I think that the hon. Gentleman will agree with me that the jobs are not only in the construction industry. Jobs are now being provided, and will continue to be provided, in the development that is being undertaken. of course, it is a major initiative that we are taking with the London Docklands development corporation, with the Manpower Services Commission and, in regard to the construction industry, with the construction industry training board. I shall refer to that again in greater detail, as well as housing, which the hon. Gentleman mentioned.
I said that I would refer to the role of this modest Bill in those developments. The background is that schedule 31 to the 1980 Act covers the financial arrangements of UDCs. Paragraph 3 of schedule 31 enables my right hon. Friend the Secretary of State to pay grants to UDCs. Paragraph 4 provides that UDCs may borrow money either temporarily or longer term. Paragraph 5 enables the Treasury to guarantee the repayment of loans raised from a person or a body other than the Secretary of State. Paragraph 8 of schedule 31 imposes an aggregate financial limit on those grants, borrowing and the guarantees given to them.
The 1980 Act set that aggregate limit at £200 million, with a provision that it could be raised up to a limit of £400 million, by order. An order was duly approved in 1984, raising the limit to £400 million.
Section 12 of the New Towns and Urban Development Corporations Act 1985 amended paragraph 8 by inserting two new limits. It set the statutory limit at £600 million, with a similar power to raise it by order to £800 million. An order raising the limit to £800 million came into effect in July. Therefore, any further increase in the limit will require primary legislation.
When we debated the 1987 order, I told the House that on spending plans for the current financial year the aggregate by the end of the year would get to within £3 million or £4 million of £600 million. Since then my right hon. Friend the Secretary of State has been able to increase the planned spending of UDCs by £7 million in the current financial year, which he could not have done without that order.
I am pleased to say that my right hon. Friend the Chancellor of the Exchequer announced yesterday that the resources available to UDCs next year will be increased substantially. Overall, the spending counting against the limit in paragraph 8 should be rather more than £200 million, in 1988–89, taking aggregate spending through the £800 million limit before the end of that year. Although the limit would not actually be breached until towards the end of the next financial year, the Supply Estimates covering that spending will be laid before the House in the spring. The House could not be asked to vote that Supply, if it exceeded statutory limits. Therefore, it is necessary to amend paragraph 8.
937 My right hon. Friend the Secretary of State might simply have set a higher overall limit, but he has decided instead to revise the way in which the limit is set. It is cumbersome and time-consuming if regular recourse to legislation is required for what are essentially technical adjustments.The limit currently operates primarily on all grants and long-term loans received since the UDCs were established. We are talking about a collection of bodies in different places and with different needs. No two are the same. Their aggregate expenditure since 1980 is of less interest and relevance than what they have spent, and what they intend to spend, individually.
UDCs are already subject to two separate and significant spending controls. The first is the general public expenditure system, by which an overall external financing limit is set annually. That covers both grants and borrowing. The second is the annual supply process by which the grant-in-aid paid to each UDC is annually voted by Parliament. Supply estimates are provided in some detail. This provides for regular scrutiny of expenditure, and provides Parliament with the opportunity to examine the operation of UDCs through the Select Committee system.
These two systems of control seem adequate and more relevant than that provided by paragraph 8.
§ Mr. Simon Hughes
What is the difference between urban development corporations and local authorities? Local authorities receive grant from central funds, and every year Parliament has to decide whether to approve the grant to the various authorities of different types. Local authorities have the same public expenditure accountability as UDCs, yet the Government propose to take away any regular parliamentary approval and scrutiny of grants to UDCs while at the same time retaining it absolutely for local authorities. Why is there this preference for quangos over local government?
§ Mr. Trippier
I do not think that the hon. Gentleman is right. Every year Parliament has to agree the Supply Estimates which cover expenditure via the Department of the Environment on, for example, rate support grant and housing investment programmes. The so-called urban block held by the Department of the Environment covers UDCs, urban development grants and so on, all of which are annually voted. The significant difference is that the Bill governs the problem that we may have with loans, and I shall turn to that in a moment.
As I said, UDCs are already subject to separate and significant spending controls. The two systems to which I referred seem adequate and more relevent than that provided by paragraph 8.
The next question is: what is the most relevant measure of borrowing? At present, paragraph 8 includes all borrowing which is not temporary, ignoring any repayments. This does not seem the most appropriate measure. A more relevant measure is the outstanding principal on any loans. It is consistent also to count any sums paid to honour guarantees provided by the Treasury. In effect, that would be borrowing which could not be repaid. Therefore, the limit in the Bill is confined to outstanding borrowing and Treasury guarantees paid.
Having established a sensible definition of what should count against the financial limit, the next issue is the level at which that limit should be set. When the 1980 Act was 938 passed, it was anticipated that borrowing could be a significant source of finance. In the event, UDCs have borrowed very little. This is because it would be prudent for a UDC to borrow only if it could anticipate an adequate return. If there is likely to be such a return, then, in general, UDCs have found that the private sector will undertake the spending.
There are, however, certain cases in which a UDC will want to borrow. First, it has powers to lend to others and will need to borrow to finance that lending. Secondly, it may want to undertake, or contribute to, an investment with an adequate return which does not appeal to the private sector. Thirdly, it may want to invest in a project where it is more appropriate for the public sector to take the lead.
The Bill sets a statutory limit of £30 million. That is modest, but it provides some room for manoeuvre. With the seven UDCs we have at present, it implies average borrowing of about £4 million. That is more than the first two UDCs have undertaken—so far they have each borrowed about £1 million—but it is small alongside intended programmes.
We want to provide some leeway —for example, in case significant projects are identified which would best be financed from borrowing. Therefore, the Bill provides for the level of borrowing to be raised to as much as £100 million without further primary legislation. Any increase above £30 million would still require the approval of this House.
This is a sensible measure. It retains a proper degree of parliamentary control over UDCs without requiring regular recourse to primary legislation. I hope that it will have the support of all parties. We had a debate less than four months ago on the order raising the limit to £800 million. In that debate the hon. Member for Bootle (Mr. Roberts) told us:the Opposition usually does not vote against increases in money that might bring some benefit to areas."—[Official Report, 15 July 1987; Vol. 119, c. 1232.]The hon. Member then went on to suggest that the increase in that order — from £600 million to £800 million—was inadequate because there were now seven UDCs. I am certain that the Opposition will welcome the removal of the limit. In fact, the hon. Gentleman was labouring under a misapprehension because, as I hope is clear from my lengthy explanation of this Bill, paragraph 8 of the 1980 Act is not a power to spend money. It simply imposes an overall limit. Under the 1980 Act, that limit can only be raised in stages. Because the Bill proposes that no statutory limit should be placed on total grant-in-aid paid to UDCs, it frees Parliament to vote to each UDC, each year, the resources that it feels are appropriate.
I am delighted that my right hon. Friend the Chancellor of the Exchequer's statement yesterday helps to answer the hon. Member for Bootle's criticism, by making considerably more funds available for this important task of urban regeneration. An amendment to paragraph 8 of the schedule 31 is necessary if UDCs are to continue that important task. The Bill introduces a sensible streamlining of that paragraph, retaining for Parliament the right to vote on significant expansions in borrowing by UDCs but removing from the existing total statutory limit the grant-in-aid that has been voted to all UDCs over the years.
I commend the Bill to the House.
§ 4.2 pm
§ Mr. Roland Boyes (Houghton and Washington)
The first two urban development corporations were created by the former Secretary of State for the Environment, the right hon. Member for Henley (Mr. Heseltine), in September 1979. He said that he envisaged that urban development corporations would be modelled on the well-established and, in many ways, successful new towns.
I have said before in this Chamber that the new towns are a social achievement of which the Labour party can be justifiably proud. They were created after the war by the newly elected Labour Administration—in particular by the then Minister, Mr. Lewis Silkin. That gives me an opportunity to place on record how much I miss Mr. John Silkin who, tragically, died earlier this year. On matters relating to new towns, as well as to political matters in general, he was most helpful to me, particularly when I first became a Member of the House. He will be missed in debates such as this by right hon. and hon. Members on both sides of the House.
The urban development corporations were given enormous powers — planning, Iand assembly and disposal for private sector development, industrial and commercial development and promotion, environmental improvement, housing and the provision of infrastructure— authorities--—Labour local to enable them to achieve the regeneration of two areas: the London docklands and the Merseyside dock area.
Five additional urban development corporations have been set up since then. In general, the new UDCs have hardly begun their work. The recruitment of staff is just about completed, and those connected with the UDCs are already excited about the possibilities. However, it will be impossible for some years to judge how successful or otherwise they will be.
To enable the UDCs to satisfy the objectives that I have just quoted, the original UDCs have to complete the regeneration of the defined areas by attracting a great deal of cash from private investment. That applies also to the five new UDCs. In a press notice, the Secretary of State declared that each UDC could spend between £100 million and £150 million over a period of six to seven years. The notice continued:The bulk of expenditure will go on the reclamation of derelict or disused land, and to the provision of access roads and the infrastructure, to pave the way for subsequent development by the private sector for industry or housing.I shall deal with that aspect in relation to the London Docklands development corporation and the Merseyside docklands corporation a little later, because the comparative success of the two corporations is of much interest.
Through a series of orders and legislation, the aggregate sum of cash available to UDCs—mainly for grants and long-term borrowing—was raised from £100 million to £800 million during the last few years. According to changes in a number of economic variables, it will be necessary from time to time to modify the latter figure. I understand that the purpose of the Bill is to allow for revisions to the statutory ceiling by exempting grants from the financial limits that are contained in the regulations.
I shall say no more about the technical financial aspects, because the Minister has, fortunately, put them on record and it is unnecessary for me to repeat them. However, will the Minister say whether the revision of the statutory ceiling will always be upwards?
940 Another factor that will undoubtedly affect the financial limits will be the creation by the Secretary of State of a series of mini UDCs. They were mentioned in the Conservative party's manifesto for the June 1987 election. The Tory party believes that local authorities— Labour local authorities in particular—are an obstacle to inner-city regeneration. I do not intend to go into the merits or otherwise of the mini UDCs, but we cannot consider the financial limits for all UDCs without considering the possibility of the introduction of new UDCs.
The Secretary of State made a speech on 3 June 1987 that, from our point of view, was highly contentious. It demonstrated clearly the Government's negative attitude to local government and, in particular, to democratically elected Labour authorities. Their contempt for local authorities is expressed both in speeches and in legislation by the Prime Minister, the Secretary of State and others that leads to controversy about the nature, role and judgment of the success or failure of the UDCs. It is a subject for another debate, but it is worth stating that this Government's continuing attack on local government is weakening the democratic process. It is not just local government that is at risk; democracy itself is at risk.
As an illustration, the Minister for Local Government, the hon. and learned Member for Folkestone and Hythe (Mr. Howard), who unfortunately is not on the Treasury Bench at the moment, is reported in an editorial in The Guardian on 30 October 1987 as saying:In some high spending areas the local council has virtually no opposition councillors. It may take many years in those areas for the pressures of the ballot box to take effect. In these circumstances we have a duty to ensure that local people are protected from wild extravagance.That says a great deal about the Government's attitude to the electorate. If the political party that controls a local authority is other than the Tory party, the people who elected their local representatives have to be protected against those whom they themselves chose through the ballot box. That is absurd; it is nonsense. What does the Minister mean bythe pressures of the ballot box to take effect"?Surely the pressures of the ballot box decide who is to lead a local authority.
There are many people in the north and in Scotland, south Wales and other parts of the country who would like to be protected from the wild extravagance of this Government. The Opposition do not like it, but we accept the democratically determined wishes of the people of this land. Why cannot this Government do the same with regard to local government by keeping their ever-meddling fingers out of local government matters? Why will not the Government accept that local people know what they want and that they are able to express it through the ballot box?
I see that the Secretary of State for the Environment is in his place. This afternoon many accusations have been made against Labour-controlled local authorities. [Interruption.] I do not know whether the Secretary of State wishes to intervene. If he does, I shall give way to him. In an article today in The Guardian, David Hencke clearly demonstrates the inefficiency in the Secretary of State's Department. He says:Sir Gordon Downey, the Comptroller and Auditor General, has refused to approve the Department of the Environment's annual accounts for the second year running941 because it does not know where £210 million-worth of urban development grant has gone. It is incredible that £210 million can be lost. What would the Secretary of State say to a Labour-controlled local authority in a similar position? We would probably be hearing demands from Tory Members for gaol sentences or for the police to be sent in.
The other matter that I cannot understand—I accept that it is not the Secretary of State's responsibility, but we are talking about the regeneration of inner cities — concerns the article written by David Hencke. Commenting on figures released yesterday by the Department of Employment, he said:More than half the £7 million for inner cities was not spent.With regard to the high levels of unemployment and deprivation in inner cities, it is incredible that the Government have cash to spend on them yet half the £7 million that was allocated was never touched. I hope that the Minister will comment on that point later. The Secretary of State seems reluctant to come to the Dispatch Box and explain it to us.
UDCs and mini UDCs are further examples of the Government's continuing assault on local government. On mini UDCs, the Conservative manifesto said:These will operate on a smaller scale in areas where there is clear economic potential, but where local authorities are failing to tackle the problem.It is true that local authorities do not always tackle these obvious problems. This is not a matter of understanding or of will, but a direct result of the Government's decision to cut the amount of cash that local authorities have available to carry out the many projects that they wish to complete and to provide the services needed by the community.
More than £21 billion has been cut from the rate support grant since 1979. As a percentage of local authority budgets, the RSG has fallen from 61 per cent. to 46 per cent.
The fact that there are problems that cannot be tackled through cash shortage forces Opposition Members to welcome the additional cash that is being channelled through the UDCs into our inner-city areas. To a degree, it demonstrates that the Government recognise that all is not well in many of our inner-city areas, although their response is pretty feeble. Many Opposition Members believe that this increased cash has more to do with changing voting behaviour than with economic regeneration. The available cash is not being dispersed through local authorities or partnerships between local authorities and UDCs, thus leading to strong feelings about the nature of UDCs. I suspect that many different opinions will be voiced by hon. Members about the nature and usefulness of UDCs.
UDCs arouse strong passions because they are unelected bodies and can bypass and ignore the long and short-term strategic decisions of local authorities.
While cash is welcome, it must be put into the context of RSG cuts and the rate-capping penalties that have been introduced in recent years. In the near future the Government will attempt to introduce a poll tax, which, according to public opinion polls, is rejected by a large majority of British people, especially by those in Scotland, where it was tested in the general election. If the Government enact that legislation, it will be because of 942 Rambo Tory Whips uttering threats of muscle to force some unwilling Tory Members through the Lobbies. Many Tory Members are well aware that many of their constituents are against the poll tax.
Even if £1 billion of Government cash is made available to the UDCs, it is small change compared with what has been taken away from local authorities. It is not new cash; it is simply returning a small amount of what local authorities should have had in the past to carry out economic regeneration projects.
Two of the UDCs will be in the north-east. One will be responsible for developing land on the Wear and Tyne riversides. However, in Sunderland one quango is being replaced by another. Was it not the Government's avowed aim to rid the United Kingdom of quangos? Washington development corporation is being wound up in March 1988. It has a good record of job promotion, and it, the local authority, myself and others made representations to the Secretary of State to keep it in existence for the foreseeable future. However, it is not to be. Completed building and other development work must be sold off to add further to the coffers of the Treasury.
The Washington development corporation is located in the borough of Sunderland. The loss of the WDC and its replacement by an urban development corporation can be likened to taking cash out of one pocket and putting it into another. New cash is, therefore, hardly flowing into the borough of Sunderland. As the Minister is aware, my constituency is one of the three that are conterminous with the borough of Sunderland. This robbing-Peter-to-pay-Paul mentality is unacceptable.
UDCs are undemocratic bodies because the people who serve on them are appointed by the Secretary of State. Anyone who has caused him or his Department problems in the past will stand little chance of being appointed. Anyone who is appointed but does not conform in the future has little chance of staying on the board. Leading councillors from the areas concerned have been brought on to the boards, thus providing a conduit from the board to the local authority. However, the local authority representatives cannot vote down a proposition even if they know that it conflicts directly with council strategies and objectives. By definition, no one is elected to the UDC board, nor are local authorities able to elect who they want on or who they want taken off the board.
That limited representation has merit only when the UDC is created in an area where a single council is responsible for the area to be developed by the UDC. It is not always the case that a single authority is involved, and where more than one is it can lead to some local authorities having privileged access to information and decision-making processes. This is particularly important, because the UDC is given powers of planning and economic development—taken from local authorities— that can lead to conflict with the policy of the local authority. The UDCs should operate within the strategic goals of the local authority. That does not imply or mean that a local authority will have a veto over what the UDC can do, but it limits its activities to those that fit in with the objectives of the local authority.
I can envisage tremendous problems in the creation of the new mini UDCs. In his speech on 3 June 1987, the Secretary of State defined mini UDCs as bodies applying the UDC model to areas of land in larger cities and towns where progress has been slow because of the activities of a given local authority. Those mini UDCs will have a 943 budget of between £10 million and £15 million, which will be used to attract private capital. In his speech the Secretary of State said:We have not yet decided the selection of areas and further studies will have to be made.If the Secretary of State has selected those areas, perhaps he will now say so.
The Secretary of State then said something that greatly concerns Opposition Members and, I am sure, many Conservative Members as well:We hope local people will bring to our attention areas of dereliction which they think can benefit from this approach.What does the Secretary of State mean by "local people"? There was no mention of local authorities in this part of his speech, and if he intends to bypass local authorities it will lead to nothing less than tremendous tension.
It is not clear from the Secretary of State's speech whether he will create more than one mini UDC in a given council area. The financing of UDCs reveals some astonishing anomalies.
In an article in the Municipal Journal of 6 February 1987 Mr. Cliff Davis-Colman quotes from an interview with Liverpool's chief executive, Michael Reddington, who said:'The money that the Development Corporation has is for capital works. If we were to get their money, it would near enough double our spending allocation. They get £30m a year to administer 27 acres, whereas we get £37m—if you take away partnership monies—for housing, social services and everything else for the remaining 236,973 acres'.We agree with the election-night statement by the Prime Minister that something must be done about inner cities. The Labour party is also aware of the problem, but would tackle it in a different way and would not create a proliferation of undemocratic unaccountable, urban development corporations.
It is recognised even by senior people on the LDDC board that the root of the board's problem is that it does not have the relationship with local people that local authorities have. However, it is important to examine in the LDDC the achievements as well as the weaknesses. It is essential that the achievements are neither glossed over nor given inadequate recognition. It is also important to have in the back of one's mind the fact that it is in the interests of the Government and their supporters to exaggerate the position so that their policy of UDC proliferation in Labour areas can be justified.
Employment is important, and the large pool of men and women on the dole is a most important indicator. It appears that job creation results have been mixed. The Department of Employment claims that about 8,000 jobs have been created. This was through a mix of new jobs and a large number, perhaps as many as 5,000, through factory relocation. If a balance sheet were drawn up to show new job creation and job losses in the same period, it would just about balance.
Part of the problem is the ever-increasing land values. That has led to some companies leaving the docklands because it is in their interests to take the cash from property speculators. In addition, the economic policies of the Government have led to job losses. Perhaps the factor that most annoys people in the docklands is the price of housing. It was expected that there would be a housing mix — houses for sale and houses for rent. It was also expected that some of the houses would be priced at a level that would make them accessible to the vast majority of people living in the area.
§ Mr. Trippier
May I take the hon. Gentleman back to the issue of employment? The Labour Government were in power for more than two thirds of the time between 1964 and 1979 and the decline in employment on the east side of London, particularly in the docklands area, proceeded apace. What on earth did the Labour Government do at that time to arrest that decline? That is the question that the hon. Gentleman and his hon. Friends must address.
§ Mr. Boyes
If one compares the level of unemployment during that period with the present level of unemployment, one sees that, despite the Government's horrific advertising campaign for the 1979 election, unemployment now, tragically, is three to four time greater than it was under the Labour Government.
At present the vast majority of houses and flats—at least 75 to 80 per cent.—being built are for sale, but the biggest problem is price. Anyone reading the houses for sale advertisements in the press will immediately see that the price of houses and flats is beyond the reach of all but a minority. One-bedroom flats cost over £50,000 and in some cases the price is as high as £150,000 and rising. This naturally causes resentment among local people.
Although it is vital to get the mix right in terms of tenure, price and location, it is important to recognise that the mix will include some expensive houses. We accept that that is necessary. However, we know that many people are waiting for affordable housing, and housing that people who live in the docklands area can buy ought to be built. If our inner cities are to be regenerated, we must attract the wealth producers. We must attract people, many of them very young, who work in computing, in the media and in the production of videos.
§ Mr. Boyes
I and my colleagues have said that many times. I do not mind starting the sentence again as it seems to say something on which we are in agreement. If the hon. Gentleman will allow me to finish the paragraph, he may find that there are other things on which we agree.
As I say, we must attract to the inner cities the people who work in computing, in the media, in the production of videos and in other newly flourishing industries. We must attract people who are making huge salaries, and to do that we need to provide the type of housing that such people demand. We have had to learn this lesson in the north, but we did not need a UDC to bring it to our attention. We had to learn that, if we wanted to attract industry, housing had to be available for the executives and the skilled workers. That is part of the process of creating stable jobs and wealth, both of which are essential in the inner-city areas.
We must also recognise the contribution made by the architects, builders and designers who have transformed old buildings and have been responsible for imaginative and sometimes spectacular productions. There are many examples of such exciting and interesting architecture. I may now be wandering along a path of controversy — although this is a non-political area.
By definition, the LDDC has had to work with those providing finance. This is an essential task for the newly created UDCs. The public and private sectors must work closely together in the interests of our communities. However, if the mechanism for this has to be a UDC, it 945 is essential that all involved are sensitive to the aims, needs and aspirations of local people. If that objective is ignored, the problems created will be at least as great as those to be solved. The economic problems cannot be solved independently of the social and other related problems.
The Government are critical of Labour-controlled authorities for not working closely with the private sector. The LDDC has had much success in this field. There are lessons to be learned, but the very location of the docklands has made this an easier task than it is for other areas. For example, Labour-controlled authorities in the north-east find it very difficult to attract private capital for development and new industry.
The new urban development corporations will not have an easy ride. Martin Laing, who I suspect may be a friend of the Government and who is chairman of John Laing plc and chairman of the national contractors' group of the Building Employers Confederation, said in a letter to The Times on 6 October:The success of London Docklands, which is a uniquely favoured area next to one of the world's major financial centres, should not lead the Government into believing or expecting that £1 of public expenditure will produce the same £4 to £6 of private investment in less favoured areas—certainly not in the early stages, and probably never in some of the more deprived areas in the North.
§ Mr. Trippier
Before the hon. Gentleman leaves that matter, it is essential for me to remind the House that even in areas of the north—perhaps not in the north-east but in the north-west and especially in Salford with the conversion of the Salford quays and the dramatic transformation of the infrastructure and the development there—the leverage is as high as 1:6. That is higher than the average for the whole of the urban bloc. I am not making a political point, but that leverage shows what can be done in a very difficult area in the north-west.
§ Mr. Boyes
Clearly the tenor of my speech is that we must attract private capital to the north and that we want a partnership with private capital because that is the way to regenerate our inner cities. I welcome the fact that other areas have been successful in attracting private capital.
Speaking as an elected representative from the northeast and as someone who has been a councillor and a local government officer, I am well aware of the difficulties that we experience in the north. Indeed, I have before me the letter from Martin Laing, the chairman of John Laing plc, who wrote to The Times forcefully expressing his opinion that we should not expect the ratios in the north to be the same as those that have been obtained, for example, in the London area. I believe that the Minister should look carefully and favourably on the north when he is allocating grants because of our difficulties——
§ Miss Marjorie Mowlam (Redcar)
I am sure that my hon. Friend acknowledges that we want to bring industry to the north-east. It must be made clear to the Government Benches that not one Labour local authority in the northeast—if there is one, I ask the Minister to name it—has turned down an industry that has wanted to come to the north-east. Many industries have done so and we will welcome many more. Indeed, we have gone out of our way to welcome them. It would be wrong to assume that Labour local authorities in the north-east have not and are not working flat out to get industries to the region.
§ Mr. Boyes
I am grateful to my hon. Friend for making that important point in support of the argument. I hope that she is fortunate this evening to catch your eye, Mr. Speaker, so that she can develop the argument that she has just summarised.
With respect to the LDDC, I do not believe that it is right either to praise or to bury it. It is necessary to work with it. Incidentally, that appears to be the positive attitude taken by local authorities in other areas. Councils would have preferred the cash to be made available to them, but, because that has not happened, they will take whatever advantage they can of the present situation to improve their locality. We shall see some interesting developments with the creation of jobs in industry, commerce and tourism. Where the UDC and the local authority work closely together the results will be even better. However, Ministers will crawl in through the back door claiming, "We did it." But the Government will not fool the canny folk of the north-east, any more than the people of other areas.
§ Mr. Simon Hughes
Will the hon. Gentleman confirm what he has just implied? Will he confirm that the Labour party's strong advice to its colleagues who run my borough council, Southwark, is to work at office and member level on a full-time basis with the LDDC? Over the past six years it has not done so and has lost golden opportunities. Will the Opposition Front Bench tell that council to get on with the job even if, in common with me, they would not have created the LDDC in the first place?
§ Mr. Boyes
I strongly object to Government interference with democratically elected local authorities and I certainly will not send any message of the type suggested by the hon. Member. There is not one rule for the Government and one rule for us to break. When we are next in government, I hope that we will allow local authorities to get on with the job and carry out whatever policies they think are appropriate to their areas. That is the tenor of my speech.
I wish to raise one or two specific questions with the Minister. It appears that the Government determine that the key indicators of the success or otherwise of a UDC is the ratio of private capital attraction to public investment. According to the LDDC, the leverage ratio is 8:1. It claims that committed private sector investment exceeds £2 billion. However, according to Hazel Duffy, writing in the Financial Times on 13 May, the experts say that, taking all public costs into account, the ratio is nearer 4:1. Judged by any consideration, that is still a good result. However, Hazel Duffy quoted Mr. Wyndham Thomas, a LDDC board member, who said:Given the substantial powers, the tidal flow of public money and above all the location, we could not possibly have failed".I do not believe that one would get such a quote from a board member of any of the northern UDCs.
The Merseyside development corporation is the only one with which we can make a comparison of UDC achievements. Here the situation is different. The latest figures that I have show that £140 million of Government money has pulled in less than £20 million of private capital—a ratio of 1:7. That is a mirror image of the results claimed by the LDDC. What are the Minister's expectations for his more recent creations? Will he increase public sector investment if, in any of the new UDC areas, the leverage ratios are similar to that achieved on 947 Merseyside? Will he take the opposite course and see such a ratio as a sign of failure and cut off access to Government cash? Has the Minister defined leverage rates that must be achieved?
Earlier I mentioned new towns. My understanding of the funding arrangements—prior to the announcement of the closure date when things get sticky—was that new towns were funded by long-term loans whereas UDCs are funded quite differently—annually, as part of public expenditure. That makes them more dependent on Whitehall. In a press notice on 14 September 1979, the right hon. Member for Henley (Mr. Heseltine) said:The UDCs can be modelled on the New Town Development Corporations".He then gave a list of functions to be carried out by the UDCs and said:They will need to be provided with resources adequate for their task".Why does not the Minister introduce legislation, if required, to fund UDCs in the same way as new towns? If he will not do so, will he explain the nature of the problem preventing him from doing so?
In view of the fact that the Minister is seeking approval this evening to raise aggregate limits without parliamentary approval, I should be glad if he would inform the House how much cash each UDC will have access to in the next five years and, particularly, how much is available for each UDC this year. In addition, will he inform the House what criteria are used to determine the amount of cash to which a UDC has access in its first operational year? My understanding of the way UDCs must operate is that, each autumn, they submit to the Department of the Environment a corporate plan — a three-year rolling programme. When a project is proposed, the Secretary of State determines, before freeing the cash, whether the project is good value. How does he determine that? What is his definition of good value?
There may be further questions that I wish to raise towards the end of the debate if I am able to catch your eye again, Mr. Deputy Speaker. However, I hope that my hon. Friend the Member for Normanton (Mr. O'Brien) will be able to raise those questions on my behalf if he has the opportunity to speak.
In conclusion, I wish to make the Labour party's position on UDCs clear. We shall work with them until the next general election, although recognising the nature of them and the real reason for their creation. That strategy is no reflection on the people, the officials and board members of the UDCs, because the chairmen that I have met are setting about their tasks with enthusiasm and a desire to get things rolling.
After the next general election, the Labour Government will make a review of all development corporations. We shall decide our policy towards them according to predetermined criteria. In the meantime, we aim to give maximum support to those already set up and support their efforts to improve the environment, attract industry and create jobs.
Our inner cities have tremendous problems and only Labour in Parliament and Labour-controlled local authorities have the policies and the will to succeed in regenerating our inner cities and bringing them back to the standards desired by the people who live in those areas.
§ Mr. Deputy Speaker (Mr. Harold Walker)
I must remind the hon. Member for Houghton and Washington (Mr. Boyes) that he will need the unanimous leave of the House to speak again in this debate.
§ Mr. Churchill (Davyhulme)
I warmly welcome the Bill and, above all, the increased funding provision for urban development corporations. I congratulate the Under-Secretary of State on the able way in which he introduced the Bill. I appreciate the close interest that he takes in the Trafford Park development corporation. He knows the back streets of Trafford Park, not only by day but by night, from his former training as a Royal Marines reserve officer.
It is noteworthy and sad that fewer than half a dozen Labour Members, including the Front Bench, are in their places on this occasion. For a party that claims to be concerned about our industrial areas, that is a disgrace. It was equally disappointing to listen to the attitude of the Labour party to this whole question as enunciated by their Front Bench spokesman, the hon. Member for Houghton and Washington (Mr. Boyes). He adopted a lukewarm attitude when he said that all the UDCs would be under threat should a Labour Government ever return to power. He said that they would pick up the roots to see whether they were worth keeping or whether they should be got rid of. That does not lend to stability and confidence for the future. Fortunately, there seems to be very little prospect that that will materialise given that, if the Labour party persists in its present course, it will have no chance whatever of coming to power.
§ Mr. Churchill
I shall give way shortly.
The hon. Gentleman seemed to perpetuate the attitude of "us" and "them" as between the rights of local authorities, as the Labour party conceives them, and the UDCs, which, above all, exist to cut a swathe through the red tape and bureaucracy that exists in many local authority areas. That seems to be the only way of getting on with the job and attracting business and industry to an area. The hon. Gentleman should come to Trafford Park and see the sort of co-operation that exists across party boundaries between the Labour local authority in Salford and the Labour-dominated local authority in Trafford which are warmly enthusiastic and determined to see the Trafford Park-Salford development corporation succeed. But, clearly, the Labour party in this House seems to be adopting a lukewarm attitude.
§ Mr. Boyes
I shall be extremely pleased to visit the Trafford Park UDC and to talk to management, people and councillors in the area. The hon. Gentleman seems to be basing his whole argument on the fact that the Labour party will review the UDCs. But surely that is what his own Government have been doing over the last eight years with regard to new town development corporations. Indeed, since I have come into the House, they have been under review twice. Once we managed to get a stay of execution, and now the Washington new town development corporation is being wound up altogether. Surely it is natural and normal for any Government to review its quangos from time to time.
§ Mr. Churchill
I am very glad that some new town policies have been looked at once again. In the area that 949 I represent—a large industrial chunk of the west side of Manchester—the new town policy pursued over many years by successive Governments has been an unmitigated disaster. It has drained into greenfield sites desperately needed resources that are required for the regeneration of industry in the traditional industrial areas as well as housing resources needed to maintain the quality and standard of the housing stock in the traditional urban areas. That has been an extremely damaging policy and in my view is in no way comparable with the UDC strategy which is already bearing significant fruit in those areas where it has been established.
§ Mr. Simon Hughes
At the time when the UDC in Trafford Park was created, how many people lived within that area? In terms of planning strategy, there may be a substantial difference between areas in which no one is living and areas in which a lot of people live. I do not know the answer, and it would be helpful if the hon. Gentleman could tell us.
§ Mr. Churchill
Virtually no people are currently resident in Trafford Park. There used to be a considerable community, but the houses were bulldozed during the last decade and the population moved.
The hon. Member for Houghton and Washington used figures in relation to the London Docklands development corporation and said that the very special circumstances of London docklands resulted in a gearing ratio of 4:1 or 5:1 of private capital compared with Government investment. The view of the chairman of the Trafford Park development corporation and his board members is that Trafford Park will achieve an even higher ratio, even though it does not have the advantage of a large financial services area, as is the case with London docklands. Indeed, we are aiming at a 7:1 gearing ratio, which would effectively mean that the £160 million committed by Government will make this a £1 billion project. That is tremendous and I welcome it enormously.
I thank the Government for their imaginative initiative. They are the first Government in the post-war era to tackle the regeneration of British industry in its traditional heartlands. I especially thank my right hon. Friend the Secretary of State for the attention and understanding with which he considered the representations made to him by the major manuacturers in Trafford Park over a two-year period, backed up by the Trafford district council and my own representations. At the end of the day, he decided on Trafford Park as the site for one of the UDCs. We greatly appreciate the close personal interest that he continues to take in the launching and success of this venture.
The Trafford Park UDC is the key to the future prosperity of Trafford Park, which remains the major centre of industrial manufacturing in western Europe. It has been many years since Trafford Park employed 80,000 people, as it did at the height of war-time production. That figure came down drastically, with the arrival of peace after the war, to around the 50,000 mark. But even today there are 650 firms in Trafford Park of every size, including some of the largest in the country. The added stimulus that will be provided by the UDC will enable this area to be regenerated on a scale never before contemplated. It will enable us to look towards the 21st century with every confidence.
950 This positive attitude by the Conservative Government is in stark contrast to the attitude of successive Labour Governments when, in spite of pleadings by the local authority, local industries and myself as the Member of Parliament, we got no sympathy whatever. Indeed, the reverse was the case. There was positive discrimination against Trafford Park as one of the established industrial areas.
I cite but one example. When Kelloggs—which makes and distributes the country's cereals in Trafford Park—applied in the mid-1970s for industrial planning permission, the then Labour Government denied the company an industrial development certificate, and said: "This is already an industrial area. You have to go somewhere else." When the management of Kelloggs asked, "Where do you want us to go?", the reply was, "We think that Huyton would be a rather good place." I wonder whose constituency that was.
Although thousands of jobs were lost under the Labour Government during the late 1960s, there was absolutely no move to bring about the regeneration of industry in that traditional area. Indeed, all efforts to bring back industry were geared towards new towns. Big inducements were given to manufacturers to go to green field sites while traditional industrial areas were allowed to decline and decay. Over the past 17 years, I have seen the constant erosion of employment in that area. The clear prospect that is offered by the development corporation means that we shall be able to bring back about 16,000 new jobs. That will return employment levels in Trafford Park to around the 40,000 mark, where they were more than 20 years ago. On behalf of my constituents, I cannot welcome that move too strongly.
Of the new generation of urban development corporations, the one in Trafford Park has been the first to get off the ground. Our chairman, Mr. Peter Hadfield, was appointed within 24 hours of the development corporation being established by the House in February of this year. Plans are already well advanced, land acquisition is moving ahead rapidly, and the corporation is about to move into the development phase. That is exciting.
One of the factors for the early success of the development corporation has been the tremendous support that it has received across political boundaries from Trafford and Salford local authorities. I pay tribute to their constructive and supportive attitude.
The Trafford Park development corporation is up and running. We appreciate the excellent support that it is getting from the Department of the Environment, at both Civil Service and Government level. Inevitably, one of the key elements in the success of such a venture rests in the ability of the development corporation to acquire a lot of land at an early stage before prices escalate as a result of development corporation-generated improvements. Any delay in the flow of funds to support the early acquisition of land would undoubtedly, in the longer term, involve false economy. I draw the attention of my hon. Friend the Minister to the very fact that, although the Trafford Park development corporation applied for about £12.5 million funding in the current year, thus far it has been accorded only £9.5 million. We can put the extra £3 million that we requested to excellent use, should my hon. Friend be able to furnish us with it.
Although, in the first few months, we are inevitably only in the planning phase, we receive many inquiries from 951 firms which are eager to move into the area. We intend to make a success of Trafford Park and to rebuild employment levels to those which obtained 20 or more years ago. There will be jobs not in warehousing but in industrial manufacturing and high tech. I hope that the concept of development corporations will be used more widely to regenerate the industrial heartland of the United Kingdom.
§ Mr. Peter Shore (Bethnal Green and Stepney)
I welcome, as I am sure other hon. Members do, the opportunity to discuss the Government's strategy on inner cities, particularly with reference to the proposal to extend the role and financing of urban development corporations.
In regard to the Minister's proposed changes in financial provisions for UDCs, I wonder whether we shall have as many occasions in the next few years—we have not had many in the past six years—specifically to discuss urban development corporation policy. I also wonder whether the refurbishment of loan funds, when it tops the £30 million mark, may not occur at some considerable time in the future. That would rob us of the specific opportunity—I know that we shall compete with others in discussing Estimates—to discuss urban development policy.
One of the principal reasons why people, particularly those in built-up areas in which UDCs have been imposed, feel strongly is that they have no opportunity to hold appointed board members to account. That places an additional obligation upon the hon. Members who represent such areas to raise their constituents' problems in relation to urban policy and the urban development corporation institution whenever they can.
It would be silly to proceed without understanding each other's approach to UDCs. They are not necessarily controversial when they are imposed on areas of simple industrial dereliction. As the hon. Member for Davyhulme (Mr. Churchill) said, the Trafford Park area is not residential; it is simply derelict and definitely needs to be cleared up.
The considerations that apply to such areas do not apply to areas with settled populations, as is the case with the London dockland development area. I do not know whether they apply to other areas which have recently been designated, such as Teesside, Tyne and Wear, the black country, the west midlands, and the Cardiff port. It seems that, where there are substantial residential populations, a rather different approach is needed. We do not necessarily have to rule out the possibility of a development corporation, but the approach and the efforts that are made to obtain the consent of the local authority in the relevant area are bound to be crucial.
I remind the House of the way in which we proceeded in the past, not with the green field site new town corporations after 1945, because they were green field sites —there was no real problem about people in the areas —but in the third generation of new towns. We were dealing with massive developments such as Warrington, where we established a new town in the north-west, and the expansion of Northampton and Peterborough. The new town corporation was set up only at the end of a substantial period of negotiation with the relevant local authority, which won its consent and led to a genuine partnership between the existing local authority and the 952 new corporation that was set up to undertake the additional development work, which it could do better than the local authority could. That was consent.
How much consent has the Minister received so far in regard to his proposals to local authorities in Tyne and Wear, Teesside, the black country, the west midlands generally, and so on? It makes a great difference, for the obvious reason that, if there is a population and a local authority is alienated, it is extremely difficult to get the necessary interlock between a local authority's planning functions and the development corporation which is adjacent to it or in the middle of it. They must work together if there is to be success.
It is a great pity that so much of the Government's approach begins with a feeling of hostility and antagonism towards local authorities. Of course there will be some friction and clashing, but we must have more faith in our fellow countrymen and in local government institutions. We must believe that they are capable, particularly with a good deal of ministerial effort and persuasion, of being brought into the general wish to redevelop their areas in their own interests. It is not terribly difficult to persuade people to do that.
My basic approach to UDCs is that they should go ahead only with the consent of the local authorities If there is no real co-operation from them, it will he very difficult to achieve any success. The Government should consider that problem in the light of our experience in the largest of all urban development corporations, the London Docklands development corporation.
A great deal of development has taken place in docklands. Anyone who saw the area in 1979 and looks at it again today could not fail to recognise that there has been an enormous amount of activity. I consider that much of that activity would have happened with or without the LDDC. [HON. MEMBERS:"Oh.!"] I have strong reasons for believing that; there was an enormous amount happening after 1977 with the Inner Urban Areas Act 1978, the 100 per cent. derelict land grant, and the inner-city partnerships which we established in Manchester, Salford and the dockland areas in Newcastle, Gateshead and other areas. We provided special and separate budgets for those areas and for the development of the statutory docklands joint development committee. I know better than most people that there was an enormous amount going on. I am not denying that progress has been substantial in the past eight years. However, the issue is not simply about development, but about development for whom and for what purpose.
§ Mr. Ron Leighton (Newham, North-East)
Does my right hon. Friend agree that one of the difficulties of the joint development committee was that it was not able to get access to land? The land was owned by the public utilities, the Port of London Authority and the gas board and was not made available. Nor was the committee able to get Government money. The LDDC had compulsory purchase powers. It had the land and was given the money.
§ Mr. Shore
There is something in that, but the joint development committee was given a considerable budget. The London dock was bought by Tower Hamlets council in 1977 for about £3 million—for 100 acres. It was going ahead. It had the land and the resources.
The greatest problem for people living in the LDDC area is that they do not feel that these developments have 953 any direct benefits for them. That can be broken down into many headings, but I choose two. One is jobs. Most of the jobs have been imported—people have come with their jobs when firms have moved there. The greater part of Fleet street moved to docklands; people came with their jobs. One would hope that when replacement jobs arise there will be greater opportunities for the people who live in the area.
The great movement of jobs, particularly to the Isle of Dogs enterprise zone, has been in office developments and warehouses. There has been no obvious increase in employment among the people of the boroughs of Tower Hamlets and Southwark—perhaps we shall hear more about that later-and there is not much evidence of it in the borough of Newham. That is not surprising. There is high unemployment in those boroughs — in Tower Hamlets and Southwark it is well over 20 per cent.— and they have existed next to the City of London for many years, but unless great efforts are made to integrate the education and training of the people living in those boroughs with the job prospects available in the City, and now in the extension of the City into the docklands, they will not be recruited — they will simply miss out. Therefore, a great effort must be made if success is to be achieved in recruiting local labour and reducing unemployment in the docklands boroughs.
The second and most seriously worrying feature of docklands is the failure of the LDDC to deal with the problem of housing and homelessness in the London boroughs. That is not a specious point. The LDDC has 12,000 homes either completed or under construction. Although rather more are under construction than completed, it is nevertheless a substantial number. Yet while that has been happening in docklands, since the Local Government, Planning and Land Act 1980 set up the LDDC, the housing problems in the three most affected boroughs — Southwark, Tower Hamlets and Newham — have become considerably worse. The number of homeless people has increased, the number on the waiting list has grown and the general condition of housing has deteriorated.
Who has benefited by the new houses in those areas? At the beginning, the LDDC made an effort to adopt a policy of what it called affordable housing. It deliberately tailored the price of houses to what it thought were the purses of those who lived in the area. But the boroughs are not rich and, on the whole, the people living in them have below, or even well below, average income for the London area as a whole. They could not afford the houses. As the years have gone by, house prices have zoomed higher in docklands and its neighbouring boroughs than in any other part of London. Anyone who lives in London knows what has happened to house prices in London generally during the past few years. The advertisement columns of The Observer and its supplement and of The Sunday Times and its supplement show that a new one-bedroom pied a terre in docklands costs about £70,000 to £80,000——
§ Mr. Shore
That is for a one-bedroom pied a terre. I know of a three-bedroom family house on the Isle of Dogs that was sold recently for £120,000. Such prices have no possible relevance to those living in Tower Hamlets, Southwark and Newham. Indeed, it is cruel for them, 954 because they are among the worst-housed people in London and, when the docklands area at last became free when the port of London moved down to the river mouth, they thought that it was a remarkable and long-awaited opportunity to have decent housing at rents or prices that they could afford. That was a natural ambition for people who lived, as their parents had before them, in squalid housing conditions.
I do not wish to weary the House, but I must give it just a snatch of the housing position in Tower Hamlets. The whole of the docklands area that the council acquired in 1977–78 had to be handed over to the LDDC. The whole of that housing land was transferred, at the stroke of a pen, by a vesting order in 1981. All hope was then lost that houses with gardens could at last be built, rather than the masses of flats, often high rise, in the borough.
§ Mr. David Gilroy Bevan (Birmingham, Yardley)
I am sure that the right hon. Gentleman would not wish to mislead the House. He would surely give credence to the fact that of the 12,000 homes that have been built on LDDC land, more than 60 per cent. have been priced at less than £40,000.
§ Mr. Shore
I am always impressed by statistics, but there are statistics and statistics. I do not believe that those given by the hon. Gentleman are necessarily a complete picture of the sale of houses in docklands. Certainly they do not reflect the position in Tower Hamlets. It is possible that the position in Newham was easier to begin with because it had more housing land and a greater tradition of owner-occupation than other docklands boroughs. I would not accept the hon. Gentleman's figures without first seriously examining them.
Tower Hamlets has 62,000 flats and houses, of which 6,700 are officially classified as unfit for human habitation, 3,600 lack an absolutely basic amenity such as an indoor loo, bathroom or shower and 20,000 need renovation because they are damp, lack central heating or have other defects. In addition, 10,000 people are on the housing waiting list and, to add to the misery, 1,200 families are in bed-and-breakfast accommodation. That is an unbelievable position. I am sure that my hon. Friend the Member for Newham, North-East (Mr. Leighton) and the hon. Member for Southwark and Bermondsey (Mr. Hughes) could relate problems of a similar magnitude in their boroughs.
If money for the boroughs to continue their housing programmes had been sustained on the same scale as money is made available to the LDDC, there would be far less reason for complaint. However, the people in those boroughs know that their housing money has been reduced to about one third of its level a few years ago and that all the new housing developments are taking place in the docklands where only a tiny percentage of people can afford to buy the houses. What kind of friction does anyone expect to arise in such circumstances? There is bitterness and a strong feeling of being deprived and cheated.
955 Our total housing investment programme allocation for the past year was less than the local authority must pay to house its 1,000 homeless families in bed-and-breakfast accommodation. It receives HIP funds of £17 million, but spends £22 million on bed-and-breakfast accommodation. Yet even with that appalling problem, the borough has not been able to build a single new home during the past three years. Therefore, what sort of reception does the LDDC expect in that borough? It is an absolute disgrace.
I feel strongly that there should and must be new thinking in the Department of the Environment. It cannot possibly be said that the only way to renew, revive and restore an inner-city area is to establish a high living colony — a kind of cantonment — on the edge of an urban area and leave the remainder to wallow in misery and squalor. That is not the way to revive our cities.
The Government would do well not merely to consider the policies they are pursuing towards adjacent local authorities but to examine again the LDDC parent legislation to see what changes are needed to make it possible for homes to be built in the boroughs in the docklands area to rent at prices that the people can afford and to see whether they can find ways of bringing the LDDC into a much more equal and open relationship with the boroughs in which it is placed. I hope that the Minister will turn his mind to that.
§ Mr. Hugo Summerson (Walthamstow)
Thank you very much, M r. Deputy Speaker, for giving me the opportunity to make my maiden speech.
My constituency is Walthamstow. I have found that many people do not know exactly where Walthamstow is. I recommend that they get on the Victoria line northbound and stay on the train until it stops and they will find themselves in Walthamstow. It is an area with a very interesting history. It is mentioned in the Domesday Book as having a population of 82. In the 16th century it had six fisheries on the River Lea. It also employed a royal forester with an annual salary of £72 which for those days was very generous; he was also permitted to take 20 loads of dead wood and a buck and a doe annually.
In the last century Walthamstow was developed. The Warner estate now covers about 25 per cent. of my constituency. It grew rapidly with the coming of the railways. Large areas which had provided vegetables for the London market and which had grown grass to feed bullocks, also for the London market, went under bricks and mortar.
Walthamstow is part of the London borough of Waltham Forest. To the north I have the constituency of Chingford and to the south the constituency of Leyton. To the east is Epping Forest—alas, no more with deer. The odd fox and the odd rabbit are all that it can boast. To the west are reservoirs in the Lea valley. In those reservoirs I am happy to say that we still have coarse and trout fishing which prove popular for the people of north-east London.
Walthamstow has an interesting political history as well. It used to be two constituencies, East and West. Since the war Walthamstow, West has always been a Labour-held seat. Indeed, from 1950 to 1955 it was Clem Attlee's seat. Walthamstow, East was normally a Tory-held seat. In 1967 Walthamstow, West went Conservative in a by-election. East went Conservative in a by-election in 1969. They both went back to Labour in 1970. In 1970 Walthamstow, West returned Eric Deakins. In 1974 956 Walthamstow, East and West were amalgamated to form one constituency and Eric Deakins then represented the constituency until June of this year.
I know that it is customary to say a few words of appreciation about one's predecessor. Fortunately, in this case I am happy to do so and I do not have to do it through gritted teeth. I met Eric Deakins on several occasions. I always thought that he was an extremely pleasant man. More than that, he worked assiduously for his constituents. I have also heard from people who knew him in the House how pleasant and popular he was. I am very glad to take this opportunity to pay that tribute to him.
Walthamstow is an area which is becoming increasingly prosperous for various reasons. The wholescale development of east and north-east London, London docklands, the M11, the M25 and Stansted airport are all factors.
Another is that housing in Walthamstow is still comparatively cheap. I am looking for a flat there myself. The firm of mortgage brokers that I am using tells me that at present it is getting more inquiries from people wanting to live in Walthamstow than anywhere else in London. That is not surprising when one considers that we have the Victoria line and overground railway lines into Liverpool street. Communications are excellent.
However, a spoke was put in the wheel of burgeoning prosperity in my constituency by my local council. The London borough of Waltham Forest returned a Labour-controlled council last year. Throughout the year there were rumours of an enormous rates increase. As the prospective Tory candidate, I simply could not believe that such a thing would happen, but it did. Three months before the general election, the Labour council in the London borough of Waltham Forest put up the rates by 62 per cent. There was a popular explosion, with enormous demonstrations at Walthamstow town hall. Over 5,000 people attended to demonstrate, month after month after month. It was not surprising that in those circumstances the people of Walthamstow decided not to return a Labour Member.
There are, of course, more problems than just the rates. There is the effect that high rates have on businesses. My largest local employer, which employs 600 to 700 people, has to increase its turnover by £1.5 million a year to generate enough increased profit merely to pay the increase in its rates bill. My local hospital, Whipps Cross, now has to find over £200,000 a year extra to pay its enormous rates bill. So the council is not doing its bit to help with the regeneration of Waltham Forest. In fact, that name is a misnomer. It implies leafy suburbs. That may be so in Chingford but not in the rest of the borough. The council has made many errors and the people call it to account.
I want to turn to planning, another factor in inner-city regeneration which too many councils seem to use as a weapon against those who want to bring in private enterprise. The way that so many councils administer planning law is a national disgrace. In far too many cases, when someone puts in an application it sits on a teetering heap for weeks. It is supposed to be determined within two months but it seldom is. It may be taken to appeal but one will find that with written representations that can take six months. A public inquiry can take up to a year.
All the time, the areas of dereliction in inner cities are waiting undeveloped. Some of them have been undeveloped for decades. That is why I welcome the urban development corporations. They can clear up all the 957 derelict areas which for far too long have been the subject of the misguided efforts of local authorities. They can cut through all the red tape. They can once more bring to these areas a prosperity which has been sadly lacking. I hope to see public finance and private endeavour in a powerful partnership for the future which will bring prosperity to all the people.
§ Mr. Simon Hughes (Southwark and Bermondsey)
We welcome the hon. Member for Walthamstow (Mr. Summerson) to the House. I shared a platform with him recently and heard him make a maiden speech, as it were, outside this House. He appreciates the balance of interests represented by his constituency between the city and the suburbs. Older hon. Members — or those who are younger in age, but older in service — will wish to associate themselves with the tribute that he paid to his predecessor, Eric Deakins, who was a warmly appreciated colleague. Eric did an assiduous job on many issues, including overseas matters. Although his defeat was not in one sense surprising—as the hon. Gentleman explained— it was much regretted. We hope that the hon. Gentleman will live up to the high standards of his predecessor. I am sure that he intends to try to do so.
I see that the hon. Gentleman's majority was about as small as Eric's, so life will be lived fairly sharply on a knife edge for the remaining four years. It is interesting to note that the massive rate rise implemented by Waltham Forest council was a major factor in the hon. Gentleman's success, yet his party now proposes to abolish the mechanism which led to his election, and reduce local authorities' power to do such politically dangerous things. I warn him, gently and kindly, that external forces may not provide such help in the future, so may he profit while he can.
I am uneasy about the Bill for two reasons. The Bill represents a break with tradition which is wrong, and treats corporations differently from local authorities. It deals with two aspects of the financing of urban development corporations, of which there are two up and running — London and Merseyside — and four in the pipeline, about which we are hearing more and more. The hon. Member for Davyhulme (Mr. Churchill), for example, spoke about Trafford Park. The Bill proposes a new limit for loans and removes the limits on the powers of UDCs to obtain grants. The Minister said that the Bill deals substantially with loans, but it also deals substantially with grants. I find it unacceptable that, when the Bill is enacted, UDCs will be treated differently in this respect from local government.
Under the Local Government, Planning and Land Act 1980, which my colleagues and Labour Members opposed—I was not an hon. Member at that time—the Government must lay an order before the House if they need to raise the financial limit. We then debate that order and decide whether to raise the limit. We have had two such debates—the last one was in July—and, in both cases, the orders were approved. We also raised the limit in the New Towns and Urban Corporations Act 1985, but none of these debates has led to a change in the system. This Bill changes the system. UDCs may obtain 958 Government grants from the common allocation of moneys without parliamentary approval, no matter what the limit.
The right hon. Member for Bethnal Green and Stepney (Mr. Shore) was right when he said that we shall have less constitutional opportunity to debate the financing of UDCs because the Government will be able to increase the grant power without consulting the House. Although we will have a general power of debate in the annual Supply Estimates debates and other general allocation debates, there will be no specific development corporation debates. However, we must debate and approve the rate support grant orders every year. This is an unacceptable difference of treatment.
That is why I was surprised that the hon. Member for Houghton and Washington (Mr. Boyes) did not put on record the Labour party's opposition to the Bill. Labour colleagues in my area oppose the idea that local government must come cap in hand to Government and have their finances debated in the House, yet the Government give a quango the power to obtain money as and when it wants, without obtaining any parliamentary approval. It is paradoxical that the Labour party here will not declare its opposition to the Bill. I declare my opposition to it, and, if it is not amended, I and my colleagues will vote against its Third Reading—[HON. MEMBERS: "Where are they?"] The weekly parliamentary meeting started at 5.30 pm, so that is exactly where they are. I hope that the Labour party will therefore join me in trying to amend the Bill.
Why have the Government changed their attitude? Why did we originally have limits on grants if limits are not needed now? Did the Government make a mistake? Did they have second thoughts or did pressure come from somewhere? The Minister did not adequately explain the Government's change of policy. Why have they changed their policy since July 1987? We had no idea during that debate that the Bill would be introduced, and there was nothing about it in the Queen's Speech or the Conservative party manifesto. Do the Government agree that the scrutiny exercised by the House is an important part of monitoring the activities of urban development corporations? Whatever view of UDCs we might have, it is an important exercise. There is no other way to monitor them. They are quangos appointed by the Secretary of State. They meet in secret, except for rare occasions. The Bill will remove some fundamental constitutional rights.
The Bill would increase the limit in relation to loans from £30 million to £100 million. In relative terms, that increase is much greater than the previous upgradings. Borrowing will have to increase more than three times before a further order, in relation to that part of the financing of urban development corporations, must be placed before Parliament.
Unless the Government suddenly agree to provide much more money, we are unlikely to have frequent debates on the matter. My fear — this is the general political point—is that the Government are opening the door for more direct funding of undemocratic authorities. To be fair, they have been doing it since the right hon. Member for Henley (Mr. Heseltine) announced the new urban policy in 1979. We now are to have mini urban development corporations, and housing action trusts which are unaccountable, non-partnership agencies.
I do not dispute the fact that the Government have a role to play and that they take an interest in the matter, 959 but the best mechanism to help urban areas would be to set up partnership agencies to work with local government. There have been some good examples of that. I should be interested to hear from the Minister whether the initiatives taken in Sheffield, Birmingham and elsewhere, together with the the enterprise boards, do not confirm that the partnership model in practice is much more acceptable than these proposals.
§ Mr. Trippier
That might have been in the Liberal party's manifesto; it could even have been in the SDP manifesto. We might have thought it was a good idea to put it in our manifesto, but we did not. We said in our manifesto that we would have more urban development corporations. We were open with the electorate about what we wanted, and we were elected on that platform. As a result, we will create more mini urban development corporations which will mean more money — another major reason for introducing this legislation.
§ Mr. Hughes
I am not against more money being made available — [HON. MEMBERS: "Oh."] No one is against more money being made available for urban regeneration. It is certainly needed, and it is not before time. We all accept that the Government have the constitutional authority to do it, even though they went to the country and lost popular support as a percentage of the total vote. We should not forget that they have been to the country twice and their popular support has decreased each time.
§ Mr. Hughes
Our support increased once and declined once, whereas the Conservative party's support decreased twice.
We accept that the Government have the authority to do it, but we oppose the idea that the money should come through this direct mechanism.
The Minister will remember my next point cropping up during Question Time. I would have more confidence in the proposals if the Government had better control over their own finances. The Minister will have seen the reports in today's press that the Comptroller and Auditor General has not granted a certificate to the Department of the Environment. He refuses to approve its annual accounts for the second year running because of its failure to sort out a backlog of nearly £210 million of unchecked urban development grants. The problem has been caused by the failure of external auditors, some of them private firms —so much for the privatisation activities of the DOE.
The report also states:The National Audit Office confirmed yesterday that the problem was not the fault of the local authorities.It could not have been the fault of some authorities, because the Government have abolished them, but it is clear that the ones that the Government have not yet abolished cannot be blamed either. The Government's management of their finances is not persuasive and gives us cause for great concern.
We must also debate whether the Government have sorted out their policy on urban areas. I shall quote one of the Minister's speeches. On Monday 5 October 1987, the Financial Times reported:Mr. David Trippier, junior minister at the Environment Department with special responsibility for inner cities, has admitted privately that the Government has not yet devised a successful formula for attracting the private sector to invest in the inner cities.
§ Mr. Trippier
I did not dream that I would be given an opportunity to deny as strenuously as I can, not only to the House but to the world, that I said any such thing. The hon. Gentleman will see that the report is by someone called Hazel Duffy. She was not there; I said no such thing; and I am glad of the opportunity to deny it. I have said many times that the Government's policy is clear and has been stated in the manifesto.
§ Mr. Hughes
As I was not there, I must accept what the Minister says, but I will have to hunt for the bankers, contractors and other representatives of the private sector who were at Templeton college, Oxford, to discover what the Minister said — unless he wishes to send me a transcript of his speech.
Even if the Minister does not admit it, I suggest that the report is true. Many of his colleagues are saying the same thing, and I could produce a sheaf of quotations to prove my point. The other day, the right hon. and learned Member for Richmond, Yorks (Mr. Britian) was quoted as saying that the Government should be wary of allowing their radical inner-city package to seem like an all-out attack on local democracy. That is from someone who, until recently, was at the centre of government. The Times of 17 August states:Inadequate local consultation, under-funding and too much Whitehall control are blunting the Government's campaign to revive inner cities, senior executives of several large companies have told The Times."The Guardian of the same date has the headline:Thatcher wrong on inner cities, Bow Group say.That is a Conservative party group. Another article in The Guardian states:There is little prospect of uniting five Whitehall departments in the inner city drive — Environment, Industry, Education, Employment and the Home Office.We still do not know which Department will lead, which Minister will be in charge and whether or not the Government have a policy which allows us, within European law, to give priority to people in the inner cities. All those matters must be resolved. I look forward to the Minister's reply, because until now it has been all cloud and mist and all Government executive action.
I hope that the Government will realise that, although the regeneration of the inner cities is important arid welcome, they must tell us how they will do it and not rely on the hit-and-miss examples that we have seen so far. I have talked, as has the right hon. Member for Bethnal Green and Stepney, to the executives of the LDDC board and to other people in London, and they admit that, at the beginning, the corporation was given the job of regeneration, but without any guidelines being laid down. Quite literally, it had to learn as it went along. That is not a satisfactory experience because it plays with people's lives.
§ Mr. Frank Field (Birkenhead)
I was surprised by the hon. Gentleman's comment that the policy is hit and miss. It does not look like that on Merseyside, where the Government have spent more than £180 million on the urban development corporation. That work has been highly successful, but the vast majority of the funds have been spent on the Liverpool side, with only £4 million being spent on the Birkenhead side. That looks like a precise policy. My constituents want me to raise the fact that, while one side of the river riots and gets a great deal of money, the other side does not. How does that fit in with the Prime Minister's policy that violence does not pay 961 under this Government? How does it fit in with the comment that the Government's policy is hit and miss? The policy is precise in Merseyside. It discriminates against the Wirral while favouring Liverpool.
§ Mr. Hughes
The hon. Gentleman has raised an important and interesting point. It is right to ask the Minister what the Government are going to do. The hon. Gentleman has shown the arbitrary nature of the policy. In his area, the policy concentrates on Liverpool because the then Secretary of State for the Environment took a specific interest in Liverpool and decided to go there and do something. Policy has been left to arbitrary choice. There is no equality about it. This Secretary of State has chosen another four UDCs.
Policy has often targeted specific areas and outside London, areas have been targeted that do not have many people. I inquired about this point of the hon. Member for Davyhulme. It would be helpful if, at some stage, the Minister could tell us the accurate figures for resident population in UDC areas, but I understand that, except in London, development corporation areas have not contained any parts with a substantial population. A different strategy must be applied to areas that have people.
§ Mr. Hughes
I am sorry; I do not have the figures. I am inquiring after them, quite honestly.
I hope that the intervention by the hon. Member for Birkenhead (Mr. Field) will prompt the Government to have a strategy rather than a series of hit-and-miss policies. As the hon. Gentleman said, those policies have hit Liverpool but missed his constituency of Birkenhead. That is poor planning, because often the substantial problems are the same on each side of the river.
I wish to make some brief final points about my own area. From my experience, some funny and unsatisfactory things are going on in London as a result of the Government's strategy. The hon. Member for Birmingham, Yardley (Mr. Bevan), who has now left his place, was wrong about the balance of owner-occupation and rented housing. The figures were given in the Official Report in March and April 1987.
On my side of the river, only 25 per cent. of the properties that have been built in the previous six years on LDDC sites are affordable. "Affordable" means costing less than £40,000, for which one can get one bedroom at most. Indeed, often that will buy only a studio flat. An increasing percentage of those properties are for sale for sums in excess of £100,000. It is scandalous to allow people to have a second home costing such a price when many people have no first home. We must be honest about the results. Yes, people have been willing to buy and many have bought properties. However, that is becoming much more difficult and, increasingly, such development is not in the interests of the local community.
The figures for jobs are even more telling. These are official figures from answers given by the Government. The hon. Member for Newham, South (Mr. Spearing) tabled a written question that received the revealing answer that in London between 1981 and 1987 there was a net loss of new jobs within docklands if transferred jobs 962 that were brought in are discounted. In fact, there has been a net loss of 517 jobs in docklands boroughs during the past six years. It will take a long time to correct that.
Constituencies such as mine have 30 per cent. adult male unemployment. Indeed, my constituency has either the fastest or almost the fastest growing unemployment rate of any constituency in Britain. There is no proof that the docklands development is really working. Indeed, those figures prove that it is not working in the best interests of the local community. Such areas are poor and deprived, and people object to these policies. The Government are going down a route that allows private forces to dominate, without partnership, the democratic locally elected authorities. The Government are not taking account of what has happened during the past six years, and that will lead to further mistakes.
Urban development must be for all, not for the few. It must be for common profit and welfare, not for speculative profit and minimum local welfare. The Government have national responsibility for the next four years. I hope that they will try to change their policy, because at the moment it is selectively beneficial, and that is not acceptable.
§ Mr. Richard Holt (Langbaurgh)
It is always a privilege to be able to compliment a new hon. Member on a maiden speech, but it is doubly so when that hon. Member made his maiden speech without reference to any notes or without reading a single word. My hon Friend the Member for Walthamstow (Mr. Summerson) made a speech that was in the best traditions of this House—it was not controversial, and it complimented his predecessor. That showed that my hon. Friend will speak here and will represent Walthamstow for many years.
I should also like to compliment the Minister on introducing this measure so soon after the July debate. You may ask, Mr. Deputy Speaker, why I wish to speak in the debate when my constituency of Langbaurgh does not have one foot of UDC in it. I suspect that is because the Ministry does not have a clue where Langbaurgh is. I have come to that conclusion because if any Ministers had visited my constituency in a ministerial capacity during the past five years they would have recognised the dereliction there. They would have read the statistics on local unemployment and would have seen the need to include some of the area in the UDC on Teeside.
As far as I can see, the Ministry has decided to provide adequately for the birds and fishes on the north side of the Tees but to provide less well for the human beings as far south of the Tees as my constituency. I hope that the boundaries will be reconsidered soon. I remind my hon. Friend that when the boundaries were first decided I made immediate representations because not one foot of Langbaurgh was included. I was told that the Ministry would take an early opportunity to redress the position. If the Government have taken this early opportunity to redress the position on money, it would not have hurt them too much to slip in a couple of million pounds extra and to give a little of that to my constituency to help with its areas of dereliction.
Langbaurgh suffers because the basis of its prosperity came to an end before the type of nanny state that underwrites corporations today. The iron industry, which extracted its wealth from my area, ran out of iron. Therefore, the area became derelict. That happened before 963 we had such bodies as new town corporations or urban development corporations. Today, we are locked between the urban development corporation in the north, into which money is being pumped, and the rural development corporation in the south which is also having money pumped into it. We are the narrow sandwich in the middle that is never visited or seen by Ministers. We have old mining areas and small villages. Often the village is L-shaped with the mine at its apex. We could do with some help from the Government for the dereliction that needs to be cleared and for the regeneration of jobs.
It is not quite the Government's fault that in about 1980–81 ICI and British Steel offloaded 22,000 out of 47,000 workers in the area. That was the measure of the unemployment caused by two major employers which we have been seeking to tackle. One reason why we have been less successful on Teesside is that local authorities are manifestly poor, both in their elected membership and, in many instances, in their officers.
§ Mr. Holt
There are, of course, always notable exceptions.
I thought that hon. Members would want to find out why these problems do not occur in the south of England. Why are there not these problems where there are Conservative-controlled councils? Why are these problems in the northern region? An examination of the composition of local authorities explains it.
My hon. Friend the Member for Walthamstow (Mr. Summerson), who has now gone after making his maiden speech—Ido not blame him; he has probably gone for a well earned drink—mentioned planning. Planning in Langbaurgh is run by a planning committee, the former chairman of which was formerly a bus cleaner. I cannot imagine what skill, knowledge and expertise in cleaning a bus—I make no apology——
§ Mr. Deputy Speaker
Order. I have taken a flexible and tolerant attitude to the scope of the debate, but the hon. Member is getting very wide of the financial limits on urban development corporations.
§ Mr. Holt
I accept your stricture wholeheartedly, Sir. The UDCs are about planning. Planning is carried out by a local authority. The chairman of the Langbaurgh planning authority was a bus cleaner. That is the calibre of the people whom industrialists and business men have to meet and talk to, with a view to moving their businesses into the area.
§ Mr. John Heddle (Mid-Staffordshire)
Does my hon. Friend agree that, to promote the future well-being of local government and local democracy, it would be a good idea if planning committees and others interested in regeneration—the subject of this debate—encouraged as many of their work force from all levels of industry, both shop floor and management, to take part full-time in the affairs of their authorities?
§ Mr. Holt
I want greater participation. There has been a great deal of discussion about having television cameras 964 in the House. If television cameras were permanently inside some of the town halls in the north of England, especially in Langbaurgh and Middlesbrough, the squalls for local democracy and the way in which local democracy is handled might be seen differently by many people.
§ Mr. Frank Field
The hon. Gentleman suggested that bus drivers, cleaners and others would not be as suitable chairmen as other people. Are we not looking for the qualities that people bring to the chairmanships of committees? A cleaner of buses may bring a fairer mind to the task of being chairman of a planning committee than would a person linked with estate agents.
§ Mr. Holt
I accept that a person can be trained for that purpose. The hon. Member for Redcar (Miss Mowlam) said earlier that Labour-controlled councils had gone out of their way to bring people to the north-east, and so have I. If the industrialists and people of standing who are meeting leaders of local authorities in the north find that those people are unable to string two sentences together, they will not go to the area. They will go to those local authorities where they are better received — in the midlands and the south of England. That is one reason why there is a problem in getting industrialists to go to the north of England.
§ Miss Mowlam
I am served by the same district council of Langbaurgh and can say without any doubt that, in the short time in which I have been an hon. Member, I have had nothing but help, experience and knowledge from the elected members of that council. I hope that when the hon. Gentleman talks about people as "poor" elected members he is not referring to the Labour members. Perhaps he should talk to some of the Conservative members who have been elected before he makes such statements.
The hon. Gentleman asked why local authorities in the north are perceived as having greater problems than those in the south. He prefaced his comments with a statement about the extent of job losses on Teesside since 1979–45,000, to be exact. He then asked why the local authority has problems with housing, education and social services. If the hon. Gentleman had linked those two statements, he would have understood exactly why local authorities in the north face those problems. The hon. Gentleman should think hard before he makes such comments about one of the elected members on Langbaurgh council who has experience and knowledge of the area.
§ Mr. Deputy Speaker
Order. It would be wise for the House to have regard to my earlier comments and to return to the Urban Development Corporations (Financial Limits) Bill.
§ Mr. Holt
I began by saying that it was important for the House and my hon. Friend the Minister to recognise where Langbaurgh is. Already since becoming a Member the hon. Member for Redcar has written an article for "The House Magazine", trying to put on the map where her constituency is. That is hardly a good reflection on her predecessor, who held the seat for 23 years. The constituency was fully inside the UDC area. Little was known about that constituency until I went to that part of Teesside. Very few contributions were made in the House by the hon. Lady's predecessor. The hon. Lady was elected after her predecessor was deselected by his party——
§ Mr. Deputy Speaker
Order. I am not prepared to allow the debate to continue along these lines. Unless the hon. Member can direct his remarks to the Bill, he must resume his seat.
§ Miss Mowlam
On a point of order, Mr. Deputy Speaker. I should like to clarify the position of the previous hon. Member for Redcar, who was not deselected but stood down of his own free will. If the hon. Member for Langbaurgh (Mr. Holt) had read the article in "The House Magazine", he would have seen——
§ Mr. Holt
I hope that at the end of this debate a few more hon. Members and people outside will know where Langbaurgh and Redcar and the UDC's boundaries are. Even Ministers might begin to know where the UDC is. Perhaps more industrialists will get to know where Langbaurgh and Teesside are and there will be greater penetration of job prospects in the area.
The UDC in Teesside is only newly formed. It has been suggested that the composition of its membershp was biased and that there were not sufficient Labour members. When the Government first announced the UDC, the leader of the Middlesbrough council denounced the Government and said that it would be a terrible thing to have a UDC—until he was offered a seat on the board. Then it became fashionable to be a member of the UDC.
While I accept your strictures in full, Mr. Deputy Speaker, I must refer back to planning, in the context of a UDC that will be able to cut through much of the present bureaucracy. Whichever party is in power, the Government of the day sit on planning applications for a long time, until it suits them to allow a plan to go through. When I led a local council in the south of England, a planning application went in that the Ministry did not want. Two and a half years passed before a public inquiry was announced. That is how things can be slowed down. I am not making a party political point, because the Government and the local authority in question were Conservative. The UDC will be able to cut through all that red tape. It will be able to take many more instant decisions and that is good.
Recently, and sadly, we lost the Wali of Swat. I am sure that all hon. Members read his obituary a fortnight ago. He did away with the lawyers in his kingdom; the UDCs are doing away with planners in their kingdoms. The Wali of Swat was able to deal with case after case every day —as many as 80 to 100 cases—and he dispensed justice. If we can speed up planning applications in this country through the mechanism of the UDCs——
§ Mr. Frank Field
I am sure that the hon. Gentleman would not want to mislead the House. Merely because a development corporation has been created does not mean that it will act as the hon. Gentleman says. I intervened during the speech of the hon. Member for Southwark and Bermondsey (Mr. Hughes) to say that we in the Wirral —in Birkenhead—are covered by an urban development 966 corporation, and little action has taken place. The hon. Gentleman is right to point out that if development is not held back by waiting for planning application to be processed, it will take place more quickly, but the mere fact of having an urban development corporation does not mean that action will follow—it has not followed on our side of the river. Other hon. Members who think that something may happen in their areas because of their designated status should look at Merseyside to see the difference in treatment.
§ Mr. Holt
I accept what the hon. Gentleman says. The UDCs are relatively new, and each area has its own unique features. Probably, each will develop in a slightly different way. I hope that the failures and mistakes of some of the UDCs will not recur in the Teesside, Tyne and Wear and other development corporations, which are, as yet, embryonic. They have only a few officers, and have not yet achieved much. One cannot make a generalised statement about them, except that they are in operation, and we hope that they will learn, rather than repeat others' mistakes.
The north-east of England deserves better than the representation it has had by the Labour party over many years. The UDC that we are to have in Teesside will give a fresh stimulus. For many years, we had the North-East development corporation, which spent a fortune and achieved nothing. It did not produce jobs—except for the boys. It did nothing——
§ Mr. Holt
With respect to the hon. Gentleman, we are talking at cross purposes. The NEDC, which was unique to the north-east of England, had nothing to do with Birkenhead. It was a composite body of trade unions, local authorities and others. It spent a lot of money and became moribund. It has been replaced by the Northern development corporation, which is a new corporate unit trying to bring industry into the north-east of England. One of the reasons why the NEDC failed lamentably was that it was too big. It was overloaded with representations from all sorts of people. One of the beauties of the UDC is that the representation is small, so it can make decisions relatively quickly and is not overloaded with bureaucracy.
§ Mr. Stuart Bell (Middlesbrough)
I am grateful to the hon. Gentleman for allowing me to intervene before he finishes. He made a comment about Councillor Mike Carr and the attitude of Middlesbrough council when the UDC was announced. All the councils in the area have said that they will co-operate fully with the urban development corporation. Will the hon. Gentleman take it from me that when councillor Mike Carr and I saw the Prime Minister in Middlesbrough after the general election, we made it plain that we would support the UDC?
§ Mr. Holt
I accept what the hon. Gentleman has said. I am saying that there was a change of heart by Councillor Carr, who condemned the Government on the first announcement of the UDC for Teesside, and changed his mind later on. I have no doubt that he is an honourable man who will support the UDC as he says he will and that he will stand by its corporate decisions even if he, as an individual, does not agree with some of them. I am not criticising any of the local authorities in Teesside, all of which are Labour-controlled and have said that they will 967 co-operate with the UDC. I am not criticising their willingness to co-operate. I have some reservations about their ability to do so, which is a different matter.
§ Mr. Holt
The hon. Gentleman has not been in the House much this afternoon, but he could have interrupted at any time. I see no reason to give way, because I doubt whether there will be much of a contribution from him.
We have been debating the amount of money that the Government are putting in, and the financial controls on that money. We have also had quite a proper shot across the bow on the accountability of the spending of that money. As far as I can work it out, only Members of Parliament will be able to raise questions sufficiently frequently and in depth to find out what exactly the UDCs are up to. I am not sure that that additional, onerous task is one that we should have.
Will my hon. Friend the Minister tell us whether the UDCs, with their additional funding, will be able to issue some sort of regular bulletin or minutes of their work, so that we can see exactly where they are going, without having to ask questions all the time? Perhaps the Government will not go along with my thoughts. If not, they must make the case for why not, rather than dismissing them out of hand. The whole issue of accountability in an area carries with it suspicion, lack of knowledge and fear of the unknown. If the Government are to make the UDCs successful in areas such as Teesside they must take all the people with them, and to do that, they must make available information that might sometimes be embarrassing but must always be accurate.
Will the Government give some sign that they are prepared to examine again the boundaries of the areas covered by the UDC, and incorporate part of my constituency, which is just as derelict as any part of the constituencies of the hon. Members for Redcar and for Wolverhampton, South-East (Mr. Turner)? Many areas in my constituency are worse in many ways than those areas. The rate of unemployment is no different. I cannot say why we have been singled out for exclusion by the Government, so I hope that they will reconsider the boundaries of the UDC so that Langbaurgh can be included in future.
Until fairly recently the debate was pretty quiet, low key and almost a non-event. I confess that it was difficult to stay awake during the major thrust of the speech by the Opposition Front Bench spokesman, the hon. Member for Houghton and Washington (Mr. Boyes). It was a speech of moderation of the first order. Yet we are talking about inner cities, about urban development corporations, about the main plank of the Government's policies in many ways and areas where, in the main, the people are represented by Labour Members. A derisory number of Labour Members have been in the Chamber for the debate, yet in many ways——
§ Mr. Holt
My hon. Friend the Member for Davyhulme (Mr. Churchill) said that there were only five hon. Members on Opposition Benches, including the Front Bench spokesman. [Interruption.] I get the impression that many Opposition Members learned their trade in town halls from the way in which some have been shouting from a sedentary position.
968 I ask my hon. Friend the Under-Secretary to define, for the benefit of the hon. Member for Houghton and Washington, the difference between a wealth-creating entrepreneur and a speculative developer. At the beginning of the hon. Gentleman's speech he was condemning the speculative developers and at the end he was praying that there could be more entrepreneurs and risk takers. He was condemning the docklands development. I wonder how many people realise that one of the principal men behind the development of the architectural excellence of the constituency of the hon. Member for Southwark and Bermondsey (Mr. Hughes) conceived the idea of redeveloping the warehouses when he was 23. He had the gumption to go to the bank, get the money and do it. That is real risk-taking and the sort of entrepreneur that we hope will now go with the UDCs to the Tees and Tyne areas and the north-east of England. I hope that when they get there they will not be stultified by local authorities that are negative and have no idea about profit-making jobs. This is all about jobs.
§ Mr. Simon Hughes
I do not want to postpone the ending of the hon. Gentleman's contribution for too long, but he referred to the 23-year-old developer. I presume that he means Mr. Wadsworth, who started at the age of 23. Fine. Let him do well, but not when one of the results the other day was to propose a tower block of luxury flats in the middle of Bermondsey that looked like a phallic symbol, which nobody wanted but which would provide a massive profit for himself and his company, but not benefit the community. That is not a benefit, but a disadvantage of development.
§ Mr. Holt
That was an aesthetic argument. I was talking about entrepreneurial risk taking. That man is doing that and seeking to make a profit.
You asked me to be brief, Mr. Deputy Speaker, and I have been—[HON. MEMBERS: "Oh."] As a consequence of that, I shall draw my remarks to a conclusion by saying that this has been a happy debate because the Government are putting more money into the area next to mine. It will be an even happier debate when they start putting some of that money into Langbaurgh.
§ Mr. George Howarth (Knowsley, North)
I hesitate to comment on some of the issues raised by the debate following the remarks made by the hon. Member for Langbaurgh (Mr. Holt), but we must address ourselves to them.
With the Government's new-found interest in the inner cities, there may be some cause for concern that the outer areas are being neglected. There seems to be some difficulty of definition, particularly with regard to urban development corporations—for example, what areas are in, what areas are out, which schemes apply where and how the problems are to be tackled. My concern is as much with the approach through UDCs as with outer areas, particularly as my constituency is one. I was interested to note that the then Secretary of State for the Environment, the right hon. Member for Henley (Mr. Heseltine), said on 14 September 1979 when he announced the urban development corporations:It is important that we learn the lessons of the impact of the various policies that have been pursued by successive Governments. The Government, over the coming year, will be looking very closely at the mix of schemes produced under the present arrangements.969 Perhaps this is the most important point:In addition we will need to review the role of inner city policy within the wider context.I take it that "the wider context" also covers outer areas and the plethora of regimes and systems that have been introduced.
In that context, we must start to measure the effectiveness of UDCs and other types of scheme. My right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) and others covered leverage and gearing. I do not intend to go into that. However, currently in England about 210,000 hectares of urban land are vacant, and much of that is derelict. I am reliably assured that this is the equivalent of the whole of Nottinghamshire. That is a great problem that needs to be tackled. I suspect that the UDC model is the only way to tackle it.
The effect of such concentrations of that problem in certain areas is worrying. In Liverpool, which has figured in some of the debates today, it is estimated that 10 per cent. of the land is vacant. One has only to drive casually round the city to realise that there are horrendous eyesores and problems as a result of that vacant urban land. In my area of Knowsley it is conservatively estimated that about 15 per cent. of all urban land is vacant. Driving around some of the industrial estates, one sees derelict sites which, in the 1950s and the 1960s, were formerly thriving industrial areas and which are now nothing more than a heap of rubble. Such areas are in a queue with many others to be redeveloped by the local authorities for industrial use some time in the future, I hope.
One also sees the parts left over from large municipal developments in the 1950s and the 1960s that have not been treated properly and are an eyesore, often because of reductions in local government expenditure. They are badly maintained and not kept up to a reasonable standard. Thus people's lives are impoverished because of the environment in which they live and work. There is no question but that the visual impact of the area is also damaged, as well as the prospects of the local authority and others of attracting further industry and investors.
§ Mr. Trippier
There is quite a lot of sense in what the hon. Gentleman says. Some of the dereliction to which he refers is acknowledged by his area being one of the 57 programme authorities. So it should be. Will the hon. Gentleman say what he has just said to the House to Liverpool city council? Will he ask what it is doing about the dereliction that we detected, and that he must acknowledge, within the enterprise zone area? When I visit Liverpool, I have to pass through the enterprise zone if I arrive at Speke airport. Although so many Labour-controlled authorities in our region, in the north-west, have been successful in marketing their enterprise zones—most of them are now full—there seems to be a lack of willingness on the part of the local city council to market that area, which would transform it dramatically. What does the hon. Gentleman have to say about that?
§ Mr. Howarth
It is not my role to speak, in the House or elsewhere, for or on behalf of Liverpool city council. However, I acknowledge that there are problems and that some of the development that has taken place in the enterprise zone was not what was intended when the enterprise zone was established. In defence of my local authority, I remind the hon. Gentleman that, while it is 970 true that it has had urban programme status and has used it to redevelop the industrial estates, it has been a drip-feeding process. Developments are not taking place quickly enough, which has left my authority at a disadvantage in competing with firms that may be considering going into new towns or the urban development corporation area. It is the Government's conscious policy to concentrate investment in that area in preference to other outer areas.
That is precisely my point about the mistaken assumptions. No matter how much attention is paid to urban development corporations, and no matter how large the number of derelict land grants and urban development grants available, there has been during the Government's period of office a steady growth of vacant urban land. The amount of vacant urban land has increased because factories in industrial areas have closed and there has not been enough investment to counter that. While the Government are doing something about the problems in some areas, the problems of other areas are growing at an alarming rate.
§ Mr. Frank Field
Will my hon. Friend comment on my point that urban development corporation status is not a panacea in itself? It does not follow that anything will happen once one has gained that status for one's area. The Merseyside development corporation needs a kick in the pants to get it working as effectively on our side of the river as it is on the Liverpool side.
§ Mr. Howarth
I accept my hon. Friend's point and I know from previous forays that he has made into various battles that he is probably the best man to give Merseyside development corporation a kick in the seat of the pants. It is fairly evident that the Merseyside development corporation has concentrated on the areas fanning out from the pierhead. There is little or no evidence of the corporation's work on the other side of the Mersey.
My main point is perhaps less controversial than some of the other points that have been made during the debate. I repeat that the Government are missing some of the problems that bedevil urban planning in this country. I have some experience of the processes and practices of valuation. We have to contend with a number of problems in that respect, whether through the creation of UDCs or through the local authorities.
Having worked for a housing association, I have some indirect experience of negotiating inner-city and outer-areas sites for community-based housing schemes. The practice and processes of land valuation are based on some strange assumptions. On some occasions the housing association for which I worked was the only organisation interested in developing a site but we nevertheless spent months and months negotiating with the land valuers. I am criticising not the local authorities but the professions. Endless time is wasted. Often the value of the site may be virtually zero, but the land valuers negotiate as if there was oil underneath it.
Commercial developers could be forgiven for walking away in such cases. It is only organisations such as community-based housing associations that have the time, patience and commitment to the community to negotiate their way through the maze of procedures and professional problems. The land valuation arrangements are more than ripe for attention. We must do something about them because otherwise, no matter what bodies we set up, the blight and problems in urban areas will continue.
§ Mr. Irvine Patnick (Sheffield, Hallam)
The hon. Member has missed a fundamental point. In my experience, land ownership is a jigsaw and we need an organisation to bring the pieces together.
§ Mr. Howarth
As my hon. Friends have said, it is too early to judge the overall performance of the UDCs. However, I believe that some of the disciplines that they use are bedevilled with the same problems as those from which other bodies suffer.
Before the Government proceed with the other initiatives that are said to be in train, they should take a long hard look at the matter. They should also spend some time trying to jettison some of the ideological baggage that they seem to be carrying these days. I am sure that many of my hon. Friends agree that many of the traditional urban planning processes and other procedures have failed in the past. The Government must concede that frequently the market has failed, too. They have not really come to terms with that problem yet and we must recognise those simple facts of life.
I conclude with some suggestions to which I hope the Government will give some thought. In considering some of the vacant and derelict sites in urban areas, they should examine the groundwork trust model. The Minister will be familiar with that model. That method, which also involves the local authorities, represents one way of clearing up some of the eyesores inexpensively but effectively and to prepare sites to make them more attractive for development.
Without going into too much detail, I ask the Minister to consider the procedures that have been developed in Austria, Japan, Denmark, Sweden and other countries in collating, mapping and publishing land valuation data. That is an important part of the process of turning over and developing land.
The Government should examine more closely the lessons that can be learned from the Scottish Development Agency's experience in Glasgow through the GEAR scheme — Glasgow Eastern Area Renewal. The SDA works in close co-operation with the local authorities in developing programmes for land development. Those schemes are undertaken in partnership with the local authorities, and I understand that they have been quite successful.
The Government should give some thought to the suggestion of the Royal Institute of British Architects, which proposes the establishment of a national urban renewal agency with an annual budget of £1 billion. That may well be the spur that we need to review professional procedures and practices. If the body worked in partnership with local authorities, a great deal could be achieved through that mechanism.
The Government's policy lacks clarity of purpose. It is piecemeal and is weighed down by ideological baggage. I suggest to the Government that they spend more time listening and a bit less time lecturing.
§ Mr. Tim Devlin (Stockton, South)
In this, my first speech to the House, I pay tribute to the electors of Stockton, South whom I represent and to my predecessor, Ian Wrigglesworth, who in 13 years in the House built up 972 a reputation as a very good constituency Member of Parliament, first as the Labour Member for Thornaby and later as the SDP spokesman on trade and industry matters. May I also mention, Madam Deputy Speaker, that it is 42 years since my most illustrious predecessor left this House as the Member for what is now a quite different constituency. Harold Macmillan returned as the Member for Bromley, but he never forgot our town by the Tees and he paid Stockton the great honour of taking its name when he went to another place.
I represent a northern constituency and my cause in the House is the north. Much has been said about the north-south divide but I submit that that divide is more a perception than a reality. It persists in the minds of southern folk who think that we northerners all live in back-to-back houses and keep whippets.
The divide between rich and poor is as sharp between Hilton, a plush village in the southern part of my constituency and Ayresome, an inner-city ward of Middlesbrough, also in my constituency, as it is between Mayfair and Brixton in London. In Ingleby Barwick, in Stockton, and in Yarm, executive housing of the very highest quality is being built at high speed to accommodate the young urban professionals of Teesside. Most of them have at least one car and many have two cars. We have some of the busiest BMW and Vauxhall dealers in the country. Where others think that there are dark satanic mills, many are enjoying a standard of living that is more consonant with the new Jerusalem.
It is not just that the southern perception is geographically wrong—we have seen tonight how many hon. Members cannot point out Cleveland on the map. It is also economically incorrect. Recent surveys of disposable income show that the northerner is far better off than his London counterpart. Less of his income is swallowed up by the cost of housing. More can be spent on the enjoyment of life. The average travel-to-work time on Teesside is a mere 20 minutes—more often than not through open country lanes to a factory or office with guaranteed parking.
Sometimes it is thought that enterprise has shifted exclusively to the south-east, to allegedly greener pastures, but earlier in this debate we listened to the speech of my hon. Friend the new Member for Walthamstow (Mr. Summerson). He said that those green pastures have disappeared beneath cramped housing estates and busy motorways. The population of London now live in overcrowded tenements and travel in inhumane conditions on the London underground trains—200 or more to a carriage. Their view is restricted to the hanging straps and curved advertisements on those trains. That restricted view—that limited horizon—must not form the limit of the perceptions of the north in the House.
I am not here to ask what the Government can do for the north. That is simple. The Government must help us to help ourselves. They must bolster our self-confidence, encourage the enterprise that we already have and help us to seize our opportunities. Those few requests are all answered by the instigation of the Teesside and Tyneside development corporations. I wholeheartedly welcome them.
I am also here to ask what the north can do for the Government. The south seems to have forgotten, in its new-found prosperity, that it is traditionally in the north that the wealth of our nation is created. At the apogee of empire, when men of liberal views stood in this House and 973 debated the welfare of the Indian and the Chinaman, the engines of the expansion of empire were built in the north and were driven by coal, hewn out of the earth by northern men and women. We were the people who turned out the cannon and cutlery of every great expedition. From King's Cross to Hong Kong, the steel came from Dorman Long.
The spark of enterprise which flashed when John Walker of Stockton first invented the safety match sparked again as the first nail was driven into the first public railway in the world from Stockton to Darlington. Now the sparks fly again as we make steel and plastics to send throughout the world. Those sparks of enterprise will not be extinguished by the damp, laconic lectures of the Opposition, who seek to gain pity for our region instead of the admiration that it so rightly deserves. Those sparks of enterprise will be fanned to a flame by the new development corporation that was set up by the Conservative Government last year to help Teesside to help itself. It is a flame to warm the soul of the nation and it is a flame to perform that vital chemistry which creates new jobs.
The people of Teesside have learnt from the past and they are looking to the future with growing confidence in their own abilities. In the last three months, 58 per cent. of our companies have increased their sales. Similarly, during the last three months 53 per cent. of our companies have increased their work forces and 28 per cent. expect to employ more people in three months' time. A massive 75 per cent. of our companies expect their turnover to increase in the next 12 months.
My constituents have sent me here to tell the House of their successes and to shout for the north. All is not perfect. We have heard during the debate that we on Teesside have suffered job losses on a massive scale, but the turnround has been quite dramatic. Large and successful enterprises have been set up with redundancy money. In each of the last three years, 6,000 new businesses have been set up in the north, more than 10,000 people are now self-employed and one in six people in the north own shares. Moreover, 65,000 families have bought their council homes and the youth training scheme on Teesside has been more successful than anywhere else. The talent, initiative and ability are there.
Recently the Prime Minister visited my constituency and said:With talent, initiative and ability, money will flow.That phrase will be the slogan under which the Teesside development corporation launches its advertising campaign this week. My only qualfication of that statement would be to agree with the words of Tennyson in a song in which he said:Bright and fierce and fickle is the South, And dark and true and tender is the North.It is true that we keep our successes in the dark. Until now, we have kept the good things about the north quiet and have listened with concern to the sad stories of northern life from Opposition Members. That must change before we do our region irreparable damage.
That campaign starts this very day, this very week. Teesside will tell the world of its successes, and every pity-seeking speech from the Opposition will be met from this side of the House with a proud statement of our achievements. The Conservative party will not hold out the begging bowl for Teesside. This party will rebuild the 974 future of the north on the sure foundation of its glorious industrial past. We shall not merely seek to subsidise those few great industries that we had in the last century. Shipbuilding, unfortunately, has finished on the Tees, just a surely as wooden boat building has gone from Stockton. It is time to encourage the new sparks of enterprise, not to stir the embers of the old industrial fires.
Our Teesside development corporation is pressing forward, with speed and co-operation with all the agencies concerned, on schemes to build high-tech offices, workshops and new developments the length and breadth of Teesside—from Bowesfield lane in my constituency to Hartlepool marina. Yesterday, we were heartened by the news that next year my right hon. Friend the Chancellor of the Exchequer is to give an additional £65 million to the urban development corporations. Our new development corporation should go forward with the blessing of the House and with the benefit of this Bill. It must build on the past and look to the future.
If, as I suggest, a brilliant future can be built on a successful past, I can do no better than welcome the Bill with the same words as were used by my predecessor, Harold Macmillan, when he ended his maiden speech 62 years ago. He said:the people of this country have made up their mind that these proposals are to their benefit, and I am quite certain of this; that … although we are but young, newly arrived, and inexperienced members of the party, it has been, to have a measure like this, an immense encouragement, and we claim it as a sign of what Conservatism can do and has always done when it is true to itself."—[Official Report, 30 April 1925; Vol. 183. c. 406.]
§ Mr. Gordon Oakes (Halton)
It is always a great privilege to follow a maiden speaker. I congratulate the hon. Member for Stockton (Mr. Devlin), on a number of grounds. First, I have to tell him that he did not beat one of our candidates. He beat a Social Democratic party candidate, so it was easier for him to make his speech than otherwise it would have been. Secondly, he kept strictly to the traditions of this House by referring to his predecessor and his constituency. I particularly warmed towards him, because he is from the north-east and I am from the north-west. I agree completely with much of what he said.
The image of the north of England in the south of England is completely wrong. It is not the "Coronation Street" world that many people in the south think it is. As he said, it is a warm and friendly community. It is a working community in the north-east, just as it is in the north-west. I hope that the hon. Member will follow in the traditions of the Conservative party and of his great predecessor, Harold Macmillan.
The hon. Member for Langbaurgh (Mr. Holt) has unfortunately just left the Chamber.
§ Mr. Oakes
No, it is not, because I was going to congratulate him, too, on his absolute honesty. The hon. Member for Langbaurgh expressed far better than did the Minister the true intentions of this Bill. The hon. Gentleman let the cat out of the bag. He told the House exactly what the Bill is about. He gloried in the fact that the chairman of a planning committee in Langbaurgh was previously a bus cleaner. What he neglected to tell the House was that that cleaner was an elected member of the 975 council. People voted for him. People do strange things when they vote; they vote for the most unlikely people. Some even vote for bookmakers, and they have every right to do so.
The hon. Gentleman revealed that under the Bill the Government do not think that ex-bus cleaners who have been elected by the people are superior to people appointed by the Minister—they may be estate agents, or from other professions — but at least an ex-bus cleaner will not have an indirect financial interest in what he is doing, whereas some of the members of the UDCs may have. It is breathtakingly amazing that a Government that screws local authorities are prepared to give almost unlimited budgets to UDCs. If a UDC fails to attract private money, the Government will underwrite it in the same way that they underwrote the BP share issue. The Government will look after their own.
I found very disturbing what my hon. Friend the Member for Houghton and Washington (Mr. Boyes) said about the Government's intention to set up mini UDCs. What does that mean? It means that a mini UDC—planning powers are very important—can take decisions that go against the interests of the community and its elected representatives.
Unfortunately, I had to leave the Chamber when my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) was making his speech. We were on the Front Bench when the London Docklands development corporation was set up by the Government. We were assured then that the residents of the area would be able not only to rent but to buy. I do not live in that area, but I have seen the advertisements in The Observer and in other newspapers, and I could not afford to live in it. Very few Members — certainly Labour Members — could afford to live there, let alone those members of the community whose parents, grandparents and great-grandparents have lived there. They are being driven out of the area by the yuppies who are buying all the properties. Is that an example of a development corporation? Is that what will happen with regard to mini UDCs?
With regard to areas of dereliction, it is very easy for Conservative Members to point out that local authorities have done nothing about them. Are they saying that Labour councils are being malicious and will not develop an area? Are they saying that Labour councils are unaware of problems in their area, even though the councillors live there? The problem is that the Government will not give local councils the money to develop that derelict land. They screw them down by rate capping and other measures. The money will go not to elected representatives but to appointed development corporations.
§ Mr. Anthony Coombs (Wyre Forest)
The hon. Gentleman is talking about the lack of money for inner-city areas. He might like to reflect on the words of Councillor Rabbani, who is a Labour councillor on Birmingham city council. He criticised his own council members in these terms:There is already enough money to solve Handsworth's problems, but it is being wastedby the local council.
§ Mr. Oakes
He is an elected representative and he is entitled to say that. He and his colleagues do not agree as to how that money should be spent.
976 The Bill is about the erosion of democracy. The Government believe that representatives should be appointed to do things, especially in areas that are politically unfavourable to them. That is what the Bill is about and what the Government are trying to do. The hon. Member for Langbaurgh let the cat out of the bag in his remarks about the chairman of a planning committee being an ex-bus cleaner.
I have great regard for the Minister — we are both north-westerners — but when he says that expenditure can be controlled by the appropriation Act he is talking nonsense. The appropriation Bill is the measure on which we have an all-night sitting when we talk about anything under the sun. Nobody votes it down, because to do so would block all Government expenditure for a range of other matters.
The Bill gives the Government economic power to do what they like for urban development corporations and al the same time screw down elected representatives on local councils regardless of their party. Many Conservative councillors, who are true democrats, bitterly oppose what the Government are doing.
I do not believe that there will be a vote on the Bill. I hoped that there would be, because we should vote against it.
Mr. Martin M. Brando-Bravo (Nottingham, South)
I join hon. Members in complimenting my hon. Friends the Members for Walthamstow (Mr. Summerson) and Stockton, South (Mr. Devlin) on two superb maiden speeches. On 12 June—when I was coming down from a blue cloud, having been re-elected—I felt sad at the loss of some very able colleagues. That sadness is at least softened by the quality of the class of '87.
My hon. Friend the Minister said that this was a modest measure. If one judges a Bill by the number of its pages and clauses, this is indeed a modest measure. Its size belies its importance. The concept of the urban development corporation, whether it be mini or maxi, is one of the great motor ideas of this era. Its growing impact on urban regeneration cannot be under-estimated and we must encourage it all that we can.
I acknowledge some of the faults that have been mentioned by hon. Members with regard to the showpiece UDC, the London Docklands development corporation. It is still a showpiece of which we can be proud, and it demonstrates what can be achieved against the warring factions of local authorities that, sadly, put parochial obstacles in the way of desired objectives.
There is no point in the Opposition trying to persuade people that all was sweetness and light in that area of London and that the Opposition would have done this by themselves without a UDC. The reality for all to see is that that is not true. For docklands and for the whole of that area of London, the development corporation was a brilliant idea and is becoming an ever more obvious success.
Not all UDCs are London ones, nor are they likely to be. Nevertheless, the principle is valid. We are debating the narrow point of financial limits and parliamentary control, but we must recognise the party political divide on the issue as to whether we should have development corporations at all. On 12 May, a Committee was dealing 977 with Tyne and Wear, the black country and the Teesside development. The hon. Member for Jarrow (Mr. Dixon), who is an Opposition Front-Bench spokesman, said:We are entering a general election campaign. Why are we considering the order this morning? Why not wait until after the general election? Under the next Labour Government—we shall have a Labour Government by 12 June—there will be no need for such orders.The hon. Member for Jarrow was challenged by my hon. Friend the Member for Darlington (Mr. Fallon), who said that the hon. Member for Jarrow was saying that, should there be a Labour Government after 11 June, they would repeal the orders and scrap development corporations. In unequivocal terms, the hon. Member for Jarrow said yes.
§ Mr. Boyes
The hon. Gentleman is being selective in his quotations from the official record of that Committee. The then Minister, the hon. Member for Oxford, West and Abingdon (Mr. Patten) asked if there wasnow a clear commitment by the Opposition to abolish all urban development corporations in this country.My hon. Friend the Member for Jarrow (Mr. Dixon) said:My hon. Friend who leads for the Opposition will answer that question when he catches your eye, Mr. Knox.My hon. Friend the Member for Jarrow said:I also said that I do not speak for the Opposition. That is the job of my hon. Friend the Member for Houghton and Washington (Mr. Boyes).My hon. Friend stressed that again, when he said:However, my hon. Friend the Member for Houghton and Washington speaks for the Opposition Front Bench."—[Official Report, Sixth Standing Committee on Statutory Instruments, &c. 12 May 1987; c. 6–22.]My hon. Friend the Member for Jarrow had every right to express, as have other hon. Members in Committee or in the House, a personal opinion. On three occasions in the Committee he recognised that I spoke for the Opposition. I made it clear then, as I have done in this debate, that the Labour party has no intention of winding up the urban development corporations immediately on taking power. I said then, as I said earlier in this debate, that when we come to power we will review all urban development corporations or quangos in exactly the same way as the Government have done with new town corporations and with many of their quangos.
As I said, the hon. Member for Nottingham, South (Mr. Brandon-Bravo) is being highly selective in his quotations. I hope that he will be honourable enough to accept that I have given the position of the Labour party.
§ Mr. Brandon-Bravo
I am grateful to the hon. Gentleman for his speech; I doubt whether it could be classed as an intervention. I was not being selective. The hon. Gentleman is quite correct when he says that his hon. Friend was challenged on more than one occasion about his remarks. He then ducked the issue by saying that he was not the Front-Bench spokesman on this matter. The hon. Member for Houghton and Washington (Mr. Boyes) did not rise and unequivocally deny that statement by the hon. Member for Jarrow. Indeed, on the Floor of the House that day, when the Paymaster General was answering questions, I brought up the matter. The hon. Member for Houghton and Washington was present when I made it quite clear that our understanding in Committee was that the Labour party would abolish the urban 978 development corporations. Once again, that was not denied by the hon. Member for Jarrow or the hon. Member for Houghton and Washington or by any Opposition Member. My reading of the Official Report of proceedings in Committee and in the House is perfectly correct and fair.
Those of us who had to suffer the speech by the hon. Member for Houghton and Washington will be forgiven for feeling uncertain about the Labour party's policy on this matter. The hon. Gentleman has fudged the issue by saying that a Labour Government would review the urban development corporations. Nothing that we have heard from the Opposition, either before the general election or since, shows that they are other than opposed to the principle of urban development corporations. We accept that such corporations remove some authority from local government. That is an inevitable consequence of setting up a UDC, and no one seeks to deny that. We hope that there will be co-operation between the UDCs and the local authorities, but we cannot deny that the UDCs take away some of the authority of local government.
The stated objective of UDCs is to secure the physical, social and economic regeneration of their areas with—I place special emphasis on this—"the maximum amount of private investment."
§ Mr. Nigel Spearing (Newham, South)
The statute says:The object of an urban development corporation shall be to secure the regeneration of its area.That does not include the word "social", although I moved in Committee that that word should be included. If the statute included that word, its history would be very different. I hope that the hon. Gentleman will accept this statutory correction from section 136(1) of the Local Government Planning and Land Act 1980.
§ Mr. Brandon-Bravo
I accept that that is what the statute says, but the hon. Gentleman will agree that its main thrust is to ensure that there is a mix of public and private capital. We want the maximum amount of private capital to come in with the UDC in order to give maximum benefit to all concerned. That is the matter that divides the House.
§ Mr. Brandon-Bravo
I was, and I listened to everything that the hon. Gentleman said. I grant that the Labour party in the city of Nottingham has certainly not been dogmatic, because it has welcomed the mix of private and public money. The money was in respect of urban development grants, and we have had a multiple of about 5:1 of private money coming in to mix with public money. That has been an excellent development for our city. But the willingness to mix public and private capital is not universal within the Labour party. Indeed, there is a growing body of opinion in the Labour party in Nottingham and its surrounding area that believes that public money only should be involved, and it wants nothing to do with private capital. That attitude does not seem to put the emphasis on the necessary priorities—what is good for our cities up and down the country.
§ Mr. Frank Field
I apologise, as I am obviously going to bore the House on this point, but in my constituency it is difficult even to get the public money. I shall be grateful when someone on the Conservative Benches 979 addresses himself to that problem. My hon. Friends have already raised the effective point that local authorities lose power to the new corporations, but it appears that the Government Front Bench also have difficulty regarding what some of those bodies do.
§ Mr. Brandon-Bravo
The hon. Gentleman has made that intervention five times this afternoon. He is such a nice fellow that I cannot understand why the Government have not responded more favourably to his representation. The hon. Gentleman speaks well on behalf of his constituency, and I am sorry if he has not been successful.
I am the first to admit that my city was Labour-controlled until May of this year. The city sought public money, when available, and put it together with private money, and it has been extremely successful. Indeed, in the past three years 1 believe that £30 million-worth of development has taken place in our city as a result of that co-operation. However, I am afraid that that is not true of all local authorities. If those authorities take the view that they do not want private development in their areas, the gearing that I have described is lost and much of the regeneration that we believe should take place simply does not occur.
My hon. Friends have suggested that some authorities give the appearance of having a vested interest in misery. They will rest content with the dereliction and deprivation that may exist in their areas because they fear that, if those conditions are ever put right and the area becomes prosperous, its political complexion will be changed. That may or may not be true, but, as I drive around the country, the evidence before my eyes sadly suggests that there is more than an element of truth in that suggestion.
One thing is clear: if the public hold the Government of the day responsible for the regeneration of our towns and cities and the Government of the day find themselves thwarted by local authorities, for whatever reason, that Government are entitled to say, "If we are going to get the blame for inaction, we have the perfect right to take powers to see that what has to be done is done, even if that means going over the head of a local authority that, for whatever reason, has blocked the way." As a Government, we cannot be expected to carry the can for dereliction if a local authority wants to claim the absolute right to refuse to allow us to deliver the regeneration that we were elected to bring about.
The hon. Member for Knowsley, North (Mr. Howarth) made an extremely valid point about the availability and value of land. I hope that my senior colleagues on the Front Bench will give some time to that matter. All of us, in our local authorities, must have come across the situation where a private owner sits tight on a bit of land because he knows that the value of a retail development will be much higher than an ordinary factory development. Therefore, he will not release that land until, somehow or other, he can generate that retail development.
Similarly, and sadly, some of our statutory undertakings, such as British Rail and the Central Electricity Generating Board, hold on to their land. I acknowledge that they want the best value for the land that they hold, hut, in a sense, they hold that public land in trust for the benefit of the community. We must find a way of forcing those statutory undertakings to put that land on the market at a reasonable price for the benefit of the 980 community. They should not sit tight, acting as a kind of land bank for the future, in the hope of finding a handsome retail consortium to develop that land.
I believe that when the operation of the UDCs involves more than one local authority, it is an ideal mechanism. We have the perfect right to establish a mini corporation if a local authority has not undertaken the necessary regeneration.
In May this year, the city of Nottingham — part of which I represent — came under Conservative control after eight years of Labour control, albeit by just one seat, but that is enough, as they say. There has been and is a real desire to co-operate and encourage the involvement of the private sector. The city has selected David White — I hope I shall not embarrass him by describing him as a captain of industry — to be chief executive of a Nottingham enterprise initiative. When a local authority is seen to be co-operating with the private sector and making absolutely certain that it is doing everything that the present Government would wish it to do, I hope that it will not be denied public funds for those enterprises just because it is getting on with it. I hope that those public funds will go not just to those towns and cities that will not co-operate and hence need a mini UDC.
In conclusion, I issue a challenge to the Opposition Front Bench. I listened to the speeches in Committee when we dealt with three corporations. Then the Opposition attitude was, to say the least, extremely woolly. Even today, the hon. Member for Houghton and Washington has vaguely said that they will look again at these corporations. However, the reality is that, unless and until the Labour party can return those corporations solely to the control of a local authority, it will not be content. It is ideologically opposed to the concept of the UDCs. I believe that the Labour party should have the courage to be honest about this, instead of trying to hide behind woolly words.
§ 7.8 pm
§ Mr. Tony Banks (Newham, North-West)
I can tell the hon. Member for Nottingham, South (Mr. Brandon-Bravo) that I am much opposed to UDCs and have been since 1980. I am especially opposed to the existence of the London Docklands development corporation. During the course of a fairly short contribution, I hope to explain to the hon. Gentleman exactly why I take that attitude.
The Government have given UDCs an extremely privileged status. That is in stark contrast to the way in which the Government have treated local authorities in this country, and certainly those in the east end. We in the east end do not like the LDDC because it is not accountable to the people of the east end. It is creating developments in that part of London that do not meet the needs or the wishes of the local people, and the people of the east end have no way of influencing or determining the policy decisions of the LDDC. To that extent, this is an ideological objection. Labour Members happen to believe in democratic accountability, but we cannot get that from the LDDC.
The amount of power given to UDCs is enormous. For example, the LDDC managed to acquire 1,000 acres in the boroughs of Newham and Tower Hamlets in its first year of existence. It just moved in and took the land over, and neither the local authority nor anyone else had any right of appeal. Contrast that with the procedures through which a local authority must go if it wants to introduce a 981 compulsory purchase order. We know exactly what happens. Such authorities are held up and eventually stopped because of the ideological objections of Conservative Ministers to Labour local authorities going in for compulsory purchase. But if it is a UDC, such as the LDDC, made up of hand-picked Tory stooges, such bodies can move in and take things over straight away.
§ Ms. Mildred Gordon (Bow and Poplar)
Is my hon. Friend aware that the massive development at Canary Wharf received LDDC planning permission in only two weeks? I understand that the new developers today held a press conference about which I was not informed and to which I was not invited, although I am the elected representative for the area. The LDDC is a fiefdom. There is no consultation whatever. That is disgraceful and points to the truth of what my hon. Friend has just said.
§ Mr. Banks
I am grateful to my hon. Friend — [Interruption.] The Minister should not laugh. My hon. Friend makes a serious point because she speaks as one of the elected representatives of the area. The fact that she has been totally ignored is indicative of the way in which the LDDC treats elected representatives. Yet the Minister sits there looking the epitome of tonsorial artistry. I get sea sick looking at the waves in his hair. He should not laugh, because that is one of our major objections to the LDDC and to UDCs generally. They are not accountable, and take no account of the interests, wishes or needs of the local inhabitants.
The LDDC stole Newham's land which could have been used for housing the homeless of the borough—assuming, of course that the Government would have allowed the borough to build any homes. My right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) said that Tower Hamlets was in no position to build any homes at present. It is very easy to say that the LDDC is doing a wonderful job, but the Government are preventing local authorities from building the homes that they need on land that could have been theirs.
It is no mere coincidence that homelessness in London has doubled since 1979, given that the Government have cut by 50 per cent. the funds available for housing investment. There is a correlation between the two. It is therefore dead easy to praise the LDDC for building, because it has been given a wonderful cash bonanza by the Government which has not been accompanied by any planning requirements or accountability whatever. Any fool could make a success with terms of reference such as that, even the fools on the Conservative Benches.
Let us look more closely at some of the aspects of the LDDC. An undertaking was given to provide houses for renting and for sale at affordable prices. The LDDC has done nothing of the sort. Although it gave a commitment to the House of Lords to provide 50 per cent. of housing at affordable rents or prices, only 15 per cent. falls into the LDDC category of "affordable". In LDDC terms, that means prices of less than £40,000. However, there are not many such properties in docklands, as anyone can see if he reads the poncy newspaper advertisements that extol the virtues of housing developments. They are all called something fancy to attract the yuppies to the east end, who move in and take the houses that should be available for the people of Newham, Tower Hamlets and Southwark.
982 Surveys in our borough have shown that 75 per cent. of Newham households in the LDDC catchment area have incomes of less than £10,500 a year and that 75 per cent. of those in Tower Hamlets have incomes of less than £8,500 a year. At that level of household income, mortgages of even £25,000 are barely affordable. Let us hear no more rubbish from Conservative Members about affordable houses. The people of Newham and Tower Hamlets cannot afford such prices. They do not have the income, and the unemployed stand no chance whatever.
Therefore, the LDDC is not providing the housing for the people of Newham, Tower Hamlets and Southwark, nor is it providing the jobs. We have heard some statistics, and I shall give some more. According to answers that we have received to parliamentary questions, 2,838 new jobs were created in docklands between 1981 and 1987 and 5,059 jobs transferred to docklands, but, according to the LDDC itself, during the same period some 7,000 jobs have been lost through closures and cuts. The reason for such closures and cuts is that the LDDC has been forcing some of the so-called unsuitable firms to close down because of compulsory purchase of their premises or of the land on which they are sited.
Indeed, the jobs that the LDDC has been able to create do not match the skills that the people of my borough possess. It should be remembered that the LDDC is located in an area in which, in the 1960s, provided some 60,000 jobs in the docks. Many of those jobs were unskilled or semi-skilled, but the jobs that the LDDC is providing do not meet the needs of the large number of unskilled and semi-skilled people who live in Newham. The Government and the LDDC should therefore undertake massive retraining exercises in the area so that when high-tech jobs are created the people of Newham will have a chance of getting them. Even so, such jobs will not be on the scale required, given the level of unemployment and the mismatch of skills in the London borough of Newham.
My last point, like my first, relates to the ideological objection. Labour Members think that UDCs are profoundly undemocratic. In no sense whatever are they accountable either to the local people who live in the area or to Parliament. It is nonsense to suggest that we have an opportunity to debate the affairs of the UDCs and to exercise control over their management. We have no such power, and the Minister decieves himself, even if he does not decieve the House, if he believes that to be so.
I have tabled dozens of questions about the LDDC, and the reply to many of them is that it is a matter for the LDDC itself. We cannot hold the LDDC to account in any practical sense. Its meetings are held largely in secret. It does not issue minutes. The press and public are not allowed into the meetings so that they can report what goes on. They must rely on a sort of No.10-type lobby briefing afterwards. Therefore, there is no way of holding UDCs to account. Would any Conservative Member tolerate such an attitude from any local authority in the country, be it Tory or Labour?
Here we see the difference in treatment between a UDC and a local authority. Whatever we may think about the local authorities, ultimately they are accountable to the people through the ballot box. If the people do not like what the local authorities are doing, at least they have the opportunity of getting rid of them in an election. The Minister could make a few friends on the Opposition Benches if he held elections for urban development 983 corporations. At least they would then be subject to the rigours and requirements of the ballot box. I doubt whether he will do that.
Urban development corporations are what the future of local government is all about. We know what is going on on the Government Benches. This evening, Conservative Members have said—certainly, in the past, Ministers have said so—that they would like to replace local authority functions by urban development corporation-type machinery. In other words, inner cities would, in effect, be organised and administered by Tory business men.
That is what it is all about. That is why additional funds are going into urban development corporations: so that they can continue to extend their power throughout inner cities, give them enormous privileged status, give them vast sums—sums that local authorities can only dream about—subject them to no democratic accountability, and then say, "What a wonderful job they are doing." As I said, any fool can make a success of an area in those circumstances.
I look forward to the day, as all Opposition Members do, when we have a Labour Government. [Interruption.] That would hardly come as a surprise to Conservative Members. Opposition Members would hardly be sitting here looking forward to the day when a Conservative Government were re-elected. One of the first things that I hope that a Labour Government will do is to get rid of the London Docklands development corporation and restore the assets and the land to the people of the east end which, on their behalf, will be exercised by their democratically elected local council. I look forward with great relish to that day.
§ Mr. Anthony Coombs (Wyre Forest)
I add my congratulations to my hon. Friends the Members for Walthamstow (Mr. Summerson) and for Stockton, South (Mr. Devlin) on making their maiden speeches. In particular, I single out my hon. Friend the Member for Stockton, South, who will a worthy heir to his predecessors.
I welcome the extension of the financial powers which the Bill gives to urban development corporations. As a west midlands hon. Member and currently a member of the Birmingham city council, I have no doubt that, in areas of the greatest dereliction, urban development corporations are the most effective way of harnessing the energies of inner-city people, of co-ordinating central and local government initiatives, and of attracting private sector investment, thereby speeding up the revival of enterprise and drive that made our cities the growth areas that they once were.
Most people who have an interest in inner cities are beginning to recognise the value of urban development corporations. That may even extend to the Labour party. Although the Opposition spokesman, the hon. Member for Houghton and Washington (Mr. Boyes), said that, in principle, in the unlikely event that the Labour party returns to government, he is prepared to look at urban development corporations and review them, the hon. Member for Newham, North-West (Mr. Banks) totally objects to them in principle. That is another example of the Labour party's unity of purpose.
984 However, more sensible people who are concerned about inner cities support urban development corporations. Indeed, in July, the Under-Secretary of State for the Environment told us that the hon. Member for Berwick-upon-Tweed (Mr. Beith) said:The Alliance believe that UDCs can do a very useful job. We shall seek to work closely with them.That hon. Member for Birmingham, Perry Barr (Mr. Rooker), the Opposition's housing spokesman, said:We hope that the urban development corporations will be a success. Setting them up is not an attack on local government.It was reported in the Financial Times on 28 March this year that the hon. Member for Birkenhead (Mr. Field) urged the Government to use the Merseyside development corporation as a conduit for Government grant aid to Liverpool.
More important than that, the more sensible local authorities, of all political persuasions, are beginning to support urban development corporations. One cannot expect that of the more ideological London boroughs such as Southwark, which has 3,850 empty council properties because it cannot collect £27 million-worth of rent, or Waltham Forest, which closed down a community training programme which, in its words, concealed the true level of unemployment. But, elsewhere, more sensible authorities such as Birmingham, which sadly, at the moment, is under Labour control, Dudley, and, as we were told earlier, Trafford Park, which is near Manchester, have shown a willingness to work with the Government and the EEC to attract private investment to derelict city areas.
Indeed, it is interesting to note that the document entitled "Birmingham City Partnership Annual Review for 1987" states that what is needed for inner cities is precisely the kind of targeted investment and attraction of private investment through business employment schemes that characterises urban development corporations. So convinced are the authors of that view that the Labour Birmingham city council, in Aston, Nechells and Washwood Heath, is busy setting up an urban development association which will have all the characteristics of an urban development corporation, except the compulsory purchase and planning powers. It is quite understandable why they take such a view, having seen the success and potential of urban development corporations in other areas.
We have heard arguments that the docklands comprise a special case. The docklands comprised total and absolute dereliction. Despite that, as a result of the London Docklands development corporation, we have seen no less——
§ Mr. Spearing
As half my constituency is in docklands, will the hon. Gentleman kindly withdraw the remark or at least suspend it until I have been shown the facts? It is not true to say that docklands was totally derelict. A lot of it was Port of London Authority dockland which was abandoned, but it was not derelict.
§ Mr. Coombs
Nevertheless, it is true that, since the advent of the London Docklands development corporation, no less than £2 billion of private investment has gone into the area. It did not go into that area before. Recently it was interesting to see that the London borough of Newham has dropped its opposition to the extension of the royal docks through the development corporation. In Liverpool, we see £60 million-worth of private investment 985 and 94 per cent. of contracts going to local firms. In Tyneside, there are projections of 6,500 extra jobs, and on Teesside there are projections of 3,000 jobs. Independent assessments of the black country development corporation estimate that, over the next 10 years, with Government investment of about £130 million, no less than £500 million of private investment will be injected into a previously derelict area. Independent consultants regard that estimate as conservative and say that the amount could be as much as £1 billion. Therefore, in a practical way, these people recognise the potential of urban development corporations to act as catalysts to unlock private sector cash and free enterprise in inner cities.
That potential is enormous, but if it is fully to be realised, there are two respects in which urban development corporations and mini urban development corporations have a part to play. The first relates to coordination. Everybody will agree that there is an enormous variety of schemes with different sponsors and, often, different aims.
Overall, the task forces report to the Department of Trade and Industry but are headed by different Government Departments in different respects. The city action teams report to the Department of Trade and Industry, enterprise workshops go to local councils, partnership programmes are responsible to local councils and the Department of the Environment, training programmes are with the Manpower Services Commission, and enterprise agencies are very often the products of voluntary organisations such as Business in the Community and the Industrial Society. As to the Government initiatives, there are some five major block schemes in the Department of the Environment, 32 schemes in the Department of Employment and 64 schemes in the Department of Trade and Industry. I am not criticising the variety of those schemes. Their variety responds to local considerations and local conditions in various parts of the country.
I appreciate that larger companies have the resources to lock into the schemes that are right for individual areas. National Westminster bank spends 1 per cent. of its pretax profits on community schemes and Shell, IBM and British Petroleum are involved with the London enterprise agency.
There is no doubt that the contributions of small and medium-sized firms could be greater if they had a conduit through which they could get into what they regard as a maze of schemes. It should be a function of the urban development corporations to act as points of contact and co-ordination so that medium-sized and smaller companies could make any contributions that they wish. The urban development corporations should be able to be the conduits whereby incentive is given to small and medium-sized firms to channel their energies into the inner cities.
The incentives I have in mind are tax allowances and accelerated write-offs for investment in inner-city areas in training, research and development and new enterprise. This approach has been used successfully in some states of America and in regard to training, it would be only part of wider strategies to promote training in private industry, sadly, on an industrial firm basis. Expenditure on training per year in this country varies between one third and one twelfth of that of our foreign competitors. As we heard earlier this week, the "Engineering Vacancies Directory" 986 referred to 7,600 jobs being unfilled because of lack of skills. I take the hon. Gentleman's point that there are inner-city residents who need such training. If we give medium-sized and small companies incentives through tax allowances to provide training, those areas will improve.
The tax allowance approach could be extended to the construction of factory units, and to larger companies investing in smaller companies through the use of corporate venturing, which generally, in the countries that use it, has had a good effect on research and development.
I am aware from the Estates Gazette last week that Lord Young is against tax allowances. He said that they distort the market, and I appreciate that argument. However, in some urban development corporations, particularly in Bilston in the west midlands, even the anticipated rents, when buildings are built, are between £2.50 and £3 a square foot. The flow of private capital needs to be speeded up because the rate of return would otherwise be marginal to the private investor. The best way in which to do that would be through tax allowances. I must stress, however, that these are merely improvements that could be made to the urban development corporation strategy, which is basically sound.
I conclude by congratulating the Government, first on having the foresight to set up the urban development corporations in 1981; secondly, on having the guts to extend them now, and on their proposals for mini urban development corporations, which are extremely valuable; and, thirdly, on backing them with the necessary cash, both through this Bill and through the Chancellor's Autumn Statement. Yesterday we heard that an extra £65 million will be spent on urban development corporations. That demonstrates practically the Government's basic and strong commitment to the revival of enterprise and prosperity in our inner cities.
§ Mr. Paul Murphy (Torfaen)
I am glad to add a Welsh dimension to the debate. I remind the hon. Member for Wyre Forest (Mr. Coombs) that it was Labour, not a Conservative Administration, who introduced urban development corporations.
I am glad to see the Under-Secretary of State for Wales on the Government Front Bench because within the next two years the question of urban development corporations will be of concern to Wales. My hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael) will have a new UDC in his constituency, while my constituency of Torfaen had, for 30 years, the only new town development corporation in the Principality of Wales.
It is important that Conservative Members realise that, during the past 30 years, the Opposition have been appreciative of the work of the corporations. They have housed millions of people, created new industry, brought in wealth and created large commercial and industrial centres. However, at the same time they have created a paradox because those who came to work in the new industries generated in the new towns often came from the inner cities.
Earlier in the debate reference was made to John Silkin. I recall a meeting in Harlow new town many years ago, when he was the Minister responsible for new towns, at which he compared Harlow with his constituency in the London docklands. It is that paradox that has, in a sense, 987 sucked out from the inner cities the prosperity and wealth that it was necessary to develop in the satellite towns around London and elsewhere.
As we are now considering the corporations in a different light, the Government must take note of the mistakes of the past 30 years. The biggest mistake was clearly in the way that those corporations were organised. It was never the intention of the 1940s Labour Government for corporations to develop the towns and then continue to run them. The essence of the corporations then, as opposed to today, was the intention to hand over all of the assets to local authorities. Unfortunately, both Labour and Conservative Governments have reneged on that pledge. All that was offered to the local authorities were the houses. The assets—rather than the liabilities—such as the factories, industrial estates and town centres were, if not privatised, handed to nominated bodies. In England, that was the Commission for the New Towns and in Wales it was the Welsh Development Agency and the Land Authority for Wales. Yet that was never the intention of the original Act.
The framers of this Bill should have asked for the advice of the Association of District Councils new towns committee, on which I served for some years. It was composed of Conservative and Labour members, who were at one in saying that it was wrong for new towns not to be handed to local authorities to be democratically run. During those 30 years, there was a sort of municipal schizophrenia in the new towns. The people did not know who was responsible for what. Even worse, the corporations were run by appointed people who often did not live in the towns, but were appointed because they came from the list of the good and the great. That was wrong. Consequently, the local authorities and the corporations were often at loggerheads.
I am concerned that, under the Bill, the same mistakes could be made. I remind the Under-Secretary of State for Wales that in the town of Cwmbran the corporation will be wound up in a few months and the Welsh Development Agency will look after the industry. There is an unhealthy concentration of power and influence in the hands of a few individuals in the corporations, and it is wrong that that should be continued, whether in Wales, England or anywhere else.
I know from experience over the past couple of decades that if the corporations are to be a success, they must work closely with local authorities and have upon their boards people who live in the towns and know the local problems. If they do not, they will be doomed. I am convinced that the corporations will not do that and that they are nothing more than a sop to the most deprived areas of our land.
§ Mr. David Gilroy Bevan (Birmingham, Yardley)
I wish to clarify one or two points. I must declare an interest because since coming to the House in 1979 I have been joint chairman of the Conservative urban affairs and inner city committee, which has taken a non-stop look at docklands since its inception. The committee has made dozens of visits to docklands and met the various chairmen and chief executives of the London Docklands development corporation. It has heard from them about the remarkable contribution made by, for example, Bob Mellish, who is vice-chairman of the LDDC's board and 988 who was a Labour Member of Parliament. He knows the area a great deal better than does the hon. Member for Newham, North-West (Mr. Banks) who is grimacing.
For several years, both under a Labour and then a Conservative administration on Birmingham city council, I served on the inner-city partnership. The hon. Member for Newham, South (Mr. Spearing) said that one of the failures of the terms of reference of the UDCs was that they did not include a social reference. However, it was that very term of reference to the inner-city partnership that created an imbalance from the start and resulted in some social work being done but no real infrastructure being provided.
All in all, I do not consider that the Brothers Newham—not the Brothers Grimm—have made too much of an impact tonight. Although I am one of those who is called a fool, it is about as important to be called a fool by a ranter as it is to be called irrational by a certified psychiatrist. Furthermore, their speeches have clearly shown the very divisions between local authority and corporation workings that impede the progress that could be made. Such speeches defy, probably well into the next century and perhaps the next millenium, the advent of the Labour Government for whom they so dearly wish.
§ Mr. Bevan
I will not grant the hon. Gentleman time. because he has already had a great deal of time, during which he gave out many expletives and was generous with his adjectival descriptions. Perhaps it is time that he took some of them for a moment or two.
I welcome the Government's initiatives and praise the manner in which they were introduced by my hon. Friend the Under-Secretary who has grasped the importance or his portfolio so quickly and injected into it the dynamism which he showed in the tourism portfolio. Indeed, I hope to develop the theme of the importance of tourism in urban redevelopment. Deprivation of urban areas accumulated over many years under the previous Administration. They were littered with good intentions but little else. Many documents were produced, but there was not much action. The result was the squalid condition in the docklands area along the banks of the Thames and not far from the House. I shall repeat figures that I gave in an earlier intervention. Under this Government, in docklands 12,000 houses were built on LDDC land or ex-Port of London Authority land in Tower Hamlets and parts of Newham. Of those properties, 60 per cent. were sold at under £40,000 and were readily available.
§ Mr. Bevan
I point out to the hon. Lady that 40 per cent. of those houses were bought by residents of the three boroughs to which reference has been made.
We have seen the progress that has been made. Again, I must declare an interest. Until I came to Parliament I practised as a valuer and surveyor concerned with both residential and commercial development. I cannot carry out that work now, but I make that point lest I am accused of having an interest. I am proud to have had an interest in the past and in having chaired two professional bodies.
The Government have had to tackle this matter because of the inability of local authorities to find an answer. I speak as a west midlander who not only served on Birmingham city council for many years but held the 989 transport portfolio for the West Midlands county council. Therefore, I think I am entitled to comment on these matters. I am glad to see the hon. Member for Wolverhampton, South-East (Mr. Turner) nodding in agreement. I welcome him to the debate.
Deprivation was exacerbated under the previous Administration. The policy of the Board of Trade under Sir Stafford Cripps was that in urban areas such as the west midlands not one brick should be laid on another to build structures of over 5,000 sq ft. Assisted area status was wrongly granted to other areas. Strong areas such as the west midlands were weakened by the Labour Government's policy. That has been put right because of the campaign that I and other hon. Members on both sides of the House waged for intermediate area status to be given to the west midlands.
This legislation is another example of the Government putting forward proposals to make progress which regrettably was not made previously. The Government have found that one essential ingredient is co-operation between private and public enterprise. Members of the Conservative parliamentary tourism committee, which I chair, went at no public expense to study inner-city conditions in America. We wanted to be able to plead the case for urban renewal and for tourism and to learn. My colleagues and I saw the success that the Americans achieved in the Baltimore inner port area which had been dynamically redeveloped. That provided a lesson which could be readily understood by the rest of the world.
§ Mr. George Howarth
Will the hon. Gentleman accept that the significant factor about those developments on the eastern seaboard was the substantial amount of Government-led expenditure, particularly in the industries that have been located there and have blossomed?
§ Mr. Bevan
The expenditure was initiated by the local board although it was partially Government expenditure. That is the very proposal that we are debating—that the threshold of Government expenditure should be increased. That is on the front of the Bill. We have seen the caring attitude of the Government. For each pound of Government expenditure in London, £9 has been generated in London. That policy has been successful. We have seen infrastructure spring up along the Thames. What started as lots of pepperpots has developed into something greater. The corporation is to be thanked for that. Housing has been developed not only in Surrey docks but in the Isle of Dogs and in Tower Hamlets. Communications are keeping pace with development. The Docklands light railway is one example. The stolport has been developed. That is not to be denigrated but appreciated.
We note also the success of the other urban development corporation in Liverpool, although I am the first to concede that it has not been such a success as London Docklands. About £136 million of Government money was spent on a garden festival in the first instance, in the redevelopment of Albert dock, and Wapping warehouse is being converted into flats, but there is still much derelict land to be cleared between the City and the Albert docks, which stands on its own, rather like a far outpost of Liverpool itself.
The Black Country urban development corporation, which was created on 15 May, will deal with no less than 990 2,345 hectares. I have only just become used to acres and yards, instead of rods, poles and perches, and must now translate these terms into hectares. For those who, like me, are slow in the uptake of such matters, a hectare is about 2.471 acres, so, if we multiply the hectare figure by 2.5, we will see that the area to be dealt with in the black country is about 5,860 acres. That vast area of land to be affected by industrial and new activities sees the UDC already well established and stretches from junction 10 on the M6 in the north to junction two on the M5 in the south. A new zone has been successfully created in that chunk of land, which is the heart of England.
The gearing will be about 4: 1. That is not as successful as in London, but each £1 of Government money will create about £4 from the private sector, if we are wise enough to adopt these proposals. The UDC will deal with an investment of about £130 million over 10 years and will create no fewer than 18,400 new jobs.
We have heard some excellent and succinct speeches in the debate. I join the praise for the maiden speeches of my hon. Friends the Members for Walthamstow (Mr. Summerson) and for Stockton, South (Mr. Devlin). Their speeches were worthy of the House and augur well. I also wish to commend the speech of my hon. Friend the Member for Wyre Forest (Mr. Coombs), who has been a Birmingham city councillor and knows about these matters. He, too, has expressed the views of the west midlands.
I wish to give an interim report on the success of the Black Country UDC. It has got under way successfully and has been much acclaimed by all the interested parties. It is already creating interest in an area which needs major rejuvenation. Many national organisations have expressed their interest, including Trafalgar House. Is it a coincidence that the first chairman of the LDDC is also the chairman of Trafalgar House? This and other great companies are investing in the future of these areas and in the regeneration of our country.
The Black Country UDC has so much to offer. There is a highly experienced work force in the west midlands with adaptable skills. There are hundreds of businesses in and around the area providing supplies and services and, within a radius of 30 miles, there is a population of about 5 million.
My hon. Friend the Member for South Hams (Mr. Steen) has just entered the Chamber. He is my co-chairman of the urban affairs and new towns committee and he can contribute much to the debate. Having assisted him in the creation of his book "A New Life for Old Cities", I know that he could spell out the further objectives that we should have in the west midlands. Not only must UDCs have the power of planning, land assembly, granting of planning permission, land clearance and the building of new roads, but they must be allowed to grant even more concessions. Tax-exempt bonds would draw even more investment into our area.
If urban development corporations are to succeed, local authorities must not artificially hoist land values to historical values. Sometimes, land owned by a statutory undertaking has little value. Some land has negative value and some land nil value. Former gas works land might need to be sweetened and reclaimed and would have a nil or even negative value.
In 1983, my hon. Friend the Member for South Hams and I and others persuaded the Government to initiate a register of derelict land. For the first time, we had a record 991 of the amount of unused land in our cities which should be put to work. But about 100,000 acres of that land is still undeveloped. Perhaps there are good reasons for that. The configurations may be wrong, as in the case of land next to railway lines. Many of us believe that now is the time to carry our successful programme of privatisation a little further and privatise unused public sector land which has not been brought into beneficial use. I should be very gratified if the money that we will vote tonight would help us to use that land in the great task of regenerating our urban areas.
It is good news that the Government are doing a job which was not done by the squabbling local authorities — [HON. MEMBERS: "Untrue."] it is true, and hon. Members know it. Methinks they do protest too much. If local authorities cannot agree or will not get a move on, the Government can now create mini urban development corporations—this is what the Opposition do not like—with powers for land assembly, clearance, redevelopment and refurbishment. This is another important aspect of the Government's policy.
Finally—[HON. MEMBERS: "Hear, hear."] I am glad that what I am saying meets with acclaim from the Opposition.
§ Mr. Bevan
The Secretary of State is no doctrinal man in this area, as are some Opposition Members who can think only in outdated local authority terms. I was there when the leader of the Conservative party on Birmingham city council, Sir Neville Bosworth, and the Labour leader, Dick Knowles, appealed to the Secretary of State saying, "We want to redevelop and refurbish an area in east Birmingham, but we do not think the only answer is an urban development corporation. We would like an urban development authority for this area." The Government thought about it and the Secretary of State was good enough to say, "You shall have your urban development authority, which will be controlled mainly by the local authority, but which will also involve great public companies and small private companies."
I plead with the Government, who, in their wisdom, conceded the creation of that authority, to ensure that there is no great disparity between the authority and the urban development corporations in terms of powers or amounts of money. The authority must be allowed to prove its success, just as the urban development corporations continue to prove the success of the Government in tackling the problems of the residual tips of the past.
I urge hon. Members on both sides of the House to support the Bill.
§ 8.7 pm
§ Mr. Dennis Turner (Wolverhampton, South-East)
I was sorry to hear the hon. Member for Birmingham, Yardley (Mr. Bevan) say what he did about local government. As chairman of transport in the west midlands, he developed a transport programme for the region. It is sad when an hon. Member castigates local government after he has made a great contribution to it. There is an element of politicking in this and a sense of unreality about the issues that must be faced.
So that it is not overlooked, may I put on record our thanks and appreciation for the work done for some years 992 by four authorities—Walsall, Wolverhampton, Dudley and Sandwell—in regenerating the black country. Those four authorities, of different political colours, have worked together. They are a credit to the way in which we expect people to work together in a community that has been decimated by the past eight years of economic recession. Ministers will ignore these communities at the peril of their own communities if they do not recognise the worth or such local authorities, which have worked with the chambers of commerce and the Confederation of British Industry in the black country on projects to rejuvenate the community.
I am sorry that the hon. Member for Langbaurgh (Mr. Holt) is not present. His speech was most unfair and uncharitable. It must be true: with friends like that, who needs enemies? His contribution was a disgrace and he brought great disdain on himself. His comments on the Labour-controlled authorities and the Labour representatives of the north-east and north-west were also a disgrace. I hope that his constituents will reflect on what he said and wonder about the calibre of their representative. I am of a mild disposition and an affable person; I try to go through life making friends; but I must say that the hon. Gentleman's contribution was underwhelming.
I am not going to say that I do not wish for progress, or that I hold in ill regard the people who have been appointed to serve on the Black Country urban development corporation, because a massive and major job needs to be done. However, unless the Government take account of the role of local government in that exercise—I know that representations are being made to the board—and reach out far more expansively and meaningfully to local government, I am afraid that the experiment will fail.
I have already said that we in the black country have a good reputation for working together. We work across the political divide, with industry and commerce, to try to uplift our community. It is imperative that that team is kept together and that the special relationship that exists between the four black country boroughs and Birmingham is maintained. I hope that the Minister will seek to continue to develop and harness the good will and expertise that exists in those boroughs so that we can make the progress that we wish.
I worry about the reason for this new development as it ignores the existing democratic input of local government. I know that this is a political point that will be challenged, but we have suffered continued reductions in the rate support grant during the past few years because the Government believe that there has been wasteful expenditure, that local government has not progressed as it should, has not been fully accountable or has not done its job properly. All those arguments have been advanced as the reason for reducing the rate support grant to local government. We know—because it is on record and a fact—that whereas in the 1970s we gave 63 per cent. of the national Exchequer contributions to local government, that figure is now 44 or 45 per cent. The amount of money that would have gone to Wolverhampton if that rate support contribution had flowed into its coffers over that period has been identified as about £60 million. That should be related to the amount that is being ploughed in to the Black Country urban development corporation. My figures relate to one authority only, but the corporation will span four or more local authorities. If we put together 993 cumulatively the amount of money that has been withdrawn from local government and compare it with the money that will be given to the new corporation, it is easy to see what we could have done had the resources been available.
I know that this will be challenged, but I wish to give my view of the disdain that has been shown for local government by the Prime Minister and the Government. That disdain borders on the unhealthy. A month or so ago, the Prime Minister visited my constituency, but she almost ignored the civic status of my local authority. Only 10 minutes were given to the leader of that council. The hon. Member for Wolverhampton, South-West (Mr. Budgen) spoke during education questions yesterday about the need for a city technology college in Wolverhampton. The local authority is now Conservative controlled for the first time in 17 years and we have a Conservative mayor.
§ Mr. Turner
The hon. Gentleman says, "Bravo."
I concede that the Prime Minister had a busy programme, but she never found the time even to meet and receive the mayor of our borough. That was not regarded favourably, and I do not need to explain why. That seems to underline——
§ Mr. Turner
Indeed. It typifies the Government's approach because they seek to undermine and ignore local government. All hon. Members will recognise the great benefits and contributions that they receive from local government and local authorities. We must all concede that civic pride is vital to our communities.
I wrote to the Prime Minister to ask why she could not take the time to give due and proper civic status and recognition to our authority. She visited a shop called "The Complete Lady" in my constituency. Some members of my local community would not necessarily ascribe that title to the Prime Minister. However, I am told that she bought a lovely handbag and two hatpins. I understand that the handbag cost £40. About 25 per cent. of the people in my constituency are unemployed and receive what is now called "income support" from the DHSS. Those people suffer great difficulties and deprivations, and they must wonder how somebody could spend £40 on a handbag, when they receive that amount to keep mind and body together for a week. However, I must admit that the shop is a good little example of local enterprise. That is an example from the visit made by the Prime Minister to the new area, part of which will be the Black Country urban development corporation.
The black country has things to offer, including its marvellous museum and the best real ale one can buy in the British Isles, and we are developing, through the West Midlands county council, consensus policies and strategic planning. The hon. Member for Yardley has contributed in no small way to the overall development of our transport policy. We have been exploring new ways of developing our economic infrastructure. One improvement which we regard as crucial to the redevelopment of the black country is the black country route. If the Minister wants to contribute to the black country's 994 redevelopment, after the job and industry losses over the past few years, I urge him to reject the application of British Coal's opencast executive for development and possible mining on the route of the new black country road network. The Minister will hear representations from the new development corporation and local authorities which will be as one in saying, "Please do not hold up the black country route because of anything that the opencast executive wants." If the application is accepted, many of the efforts which are expected to be made by the new black country urban development corporation will be wasted.
Some progress will be made if there are meaningful working relationships with the local authorities. I would be the last to pour cold water on anything that will help to rejuvenate the community that I represent or the whole of the black country. I hope that working relationships will be allowed to develop at some stage and that more democracy will be built into local plans. Local people are sceptical about people who live away from the local community and may have no knowledge of it going on the new boards. Our problems can be solved only by people pulling together and contributing. The Government can help us by doing what is necessary to paint the economic backcloth and develop our community. The black country has taken knocks, but its people are no less resilient than people anywhere else in the world. I love them and am proud to represent them.
It is important that we get the legislation right. We shall not vote against the Bill. We want to ensure that people work in harmony to get the groundwork right, not just for people today, but for those who have yet to come and live in the black country and have jobs, security and dignity.
§ Mr. Michael Fallon (Darlington)
I should like to follow up some of the observations of the hon. Member for Wolverhampton, South-East (Mr. Turner) about the relationship between local government and urban development corporations. He made the important point that that relationship must be right. If urban development corporations are to be a permanent feature of the political landscape, more thought and time need to be given to that relationship.
No one could possibly accuse a Government who present a Bill of this kind of neglecting the inner cities. There will be a considerable increase in resources as a result of the Bill and yesterday's statement by my right hon. Friend the Chancellor. It can no longer be said that the Government are in any way neglecting inner urban areas or the north-east. There are two urban development areas in the north-east, one on Tyne and Wear and the other on Teesside—plus a wide range of other supports. I have been told that some £700 million has been invested in the north-east since 1983. The UDCs typify the much more carefully targeted nature of Government support.
The north-east has suffered more than any other region from a general blanket approach to its serious structural and social problems. There was regional aid, which was automatic and general and covered 96 per cent. of the north-east. There was rate support grant, spread by Labour-controlled local authorities in the north-east, universally benefiting everyone through extravagant subsidies of housing and transport. The great trick of the urban development corporations is that the resources which they apply are much more specific and carefully targeted than resources from other bodies.
995 Teesside development corporation is a good example, covering one of the larger areas covered by such corporations, but it is a specific geographical area, closely related to the riverside. Anyone who has studied the problems of the north-east knows that they are concentrated on the river areas. One must start by regenerating the rivers of Tyne, Wear and Tees, because that is where the older industries were concentrated and where the decay and dereliction of the old industrial landscape are greatest. That does not mean that a development corporation specifically concentrated on a small area of the river Tees does not bring benefits to a more general area. My constituents will benefit. They may find jobs in the factories that the UDC brings to Teesside. If the UDCs can do anything, they should be able to lift the north-east out of some of the more parochial envy that local authorities have demonstrated. It does not matter where a factory is located, provided that it is in the north-east or within the areas covered by other UDCs, rather than in Belgium, Ireland or Denmark. The factory should be here.
The purposes of UDCs are specific. Unlike local authorities, they have a clear remit—to sweep away the old industrial landscape and debris of the past, physically to clear away the dying, decrepit factories and industrial sites and to renew that landscape by providing the buildings that will attract new investment. The geographical targeted area of an urban development corporation is as specific as its purpose.
Perhaps most important of all, the development corporations will be much better spenders of public money than local authorities. They will be able to do what local authorities have signally failed to do, even where there were financial incentives for them to do so—to bring in private money in partnership with public money and apply it to the purposes of regeneration. I am thinking specifically of the north-east.
Not only do UDCs attract private money to go alongside public money in generous proportions, but they give the taxpayer much better value for the public pound that is spent. If the urban development corporations are to become a permanent feature of the political landscape, and if my hon. Friends on the Government Front Bench are thinking of going further and establishing fresh UDCs — I have heard mini urban development corporations suggested — as the hon. Member for Wolverhampton, South-East implied, the Government will need to reconsider the relationship between the development corporations and the local authorities.
Of course, it is wrong for Labour Members to say that a few million pounds more for the UDCs must be looked at in the context of the reductions that have taken place in rate support grant. That argument is nonsense, because the money that would have been allocated to rate support grant and local authorities if Opposition Members had had their way would have been spent in all the bad old ways—on subsidised council housing at ridiculously low rents, on council workers' overtime payments and on wasteful, extravagant local government services.
Of course it is right such a transfer of money should take place. However, that does not mean that we do not have to consider the relationship between UDCs and local government. First, we must ensure that as the UDC takes over, begins to spend money and develop more and more of its functions, it does not add to the burden on local government, but paves the way for a reduction of that 996 burden. The Labour party has rightly suggested single-tier local authorities. At the beginning of this year, it was getting near to advocating the abolition of the shire counties and the concentration of their functions at the district level. One has only to look at Teesside to see the sheer folly of having a Teesside development corporation and a Cleveland county council — and three or four district councils as well.
If the UDC is to be a permanent feature of Teesside, we must re-examine the need for Cleveland county council. Its functions merely duplicate what could be done at district authority level — because the area is predominantly urban — so there is no need for the extravagant bureaucracy and heavy-handedness of such a council, which has done little during the past seven or eight years except to discourage investment and business in Cleveland — with economic development units, and so on, producing a series of gloomy reports. I hope that when Mrs. Justice Butler-Sloss makes her recommendations at the end of the child abuse inquiry, she will recommend the abolition of Cleveland county council, so that there will be a clearer relationship with the Teesside development corporation refurbishing the industrial landscape and attracting fresh business into Teesside and the district councils getting on with the traditional functions of local government.
There is, therefore, a corollary for my hon. Friend the Minister to consider. If Teesside and other development corporations are to exist for many years, my hon. Friend must examine the way in which he appoints local authority members to those boards. Of course, it may be right to begin by choosing a couple of leading Labour politicians, putting them on the board and evoking some enthusiasm for the development corporation concept by paying them £4,000 a year each. However, will the Minister for ever continue to appoint the same type of leader of a Labour local authority? Will he reappoint such a leader in each case? How do we select local authority representatives to serve on urban development corporations? Could not there be some slightly wider consultation process about the way in which those people are selected? The relationship between the development corporations and the district councils is centred on that membership.
I shall deal next with the concomitant review of regional policy. I know that my hon. Friend the Minister has moved from his former Department, which dealt with small businesses, to one that deals with larger ones. However, as the development corporations have a package of incentives to attract fresh investments to their areas, it is important to ensure that the other aid measures that are available from the other Department concerned—the Department of Trade and Industry—complement and do not overwhelm what the other corporations are doing. I hope that we shall soon hear how the review of regional support measures is proceeding and how the measures are to be properly tallied with what is available from the development corporations.
In the meantime, we wish the urban development corporations well. They now have the physical resources, the finance, the skills—they are beginning to assemble the teams—and the leadership to set about their task. That task is not only the physical one of cleaning up the riverside and building new factories. It is also a psychological one. The corporations must not only sell their areas to the rest of the United Kingdom and the world, but must raise the level of self-confidence in their 997 areas. They must make people on Teesside believe again in what Teesside has to offer. Development corporations are ideally suited to this task. They have a clearly defined sense of purpose and direction, and, through this Bill, the resources to match that commitment.
§ Miss Marjorie Mowlam (Redcar)
I want to respond to a couple of points made by the hon. Member for Darlington (Mr. Fallon). To suggest, as he did, that the psychological atmosphere in Cleveland could be improved, and then to say that the child abuse inquiry should consider doing away with Cleveland county council, was irresponsible and flippant. The inquiry is a difficult, complex issue, about which one should not be flippant. The hon. Gentleman also suggested that Cleveland county council is bureaucratic and top-heavy. He seems to forget that it is an elected body, which the UDC certainly is not. that is an important distinction, and one that I hope the hon. Gentleman will accept.
I agree with the remarks of my hon. Friend the Member for Wolverhampton, South-East (Mr. Turner) about the comments made by the hon. Member for Langbaurgh (Mr. Holt), who has now left the Chamber. It is a sad reflection on the Chamber that the hon. Gentleman should have made such comments about the leadership of Middlesbrough county council. Clearly, Mr. Carr has his doubts about the Teesside UDC and its ability to deliver for the people of Middlesbrough. However, when faced with another four years of Tory government, it is in his best interests to do what he can for the people there. So he is doing his best to co-operate and to deliver more jobs and a better existence for the people of Middlesbrough. To condemn him, as the hon. Member for Langbaurgh did, was disgusting.
The hon. Member for Langbaurgh has the incredible ability to stab himself in the foot. After he had carried on about how inefficient and awful Labour authorities were, he went on to describe how the planning delays in a Tory-controlled authority went on for years. It is incredible that he should criticise our side, and then his own, in that way. It was interesting, too, that when the new hon. Member for Stockton, South (Mr. Devlin) made his maiden speech, he failed to identify himself with his hon. Friend the Member for Langbaurgh.
I shall keep my remarks short as there have been a number of excellent contributions from the Opposition Benches.
The problems in Teesside—where, since 1979, 45,000 people have lost their jobs—mean that Teesside will welcome investment warily, but in the hope of regenerating and encouraging industrial development in the area. If, when he goes north, the Minister did not always fly over Redcar but sometimes stopped and visited it, he would see the advantages that it has to offer to industry. Not only do we have an attractive hinterland in the Cleveland hills, but we have good access by road, rail and river, as well as a great many skilled workers who at present have no work. I am willing to acknowledge the silver lining to the cloud, but I wish that Conservative Members would not fantasise and try to ignore the dark clouds, the problems, in Teesside. They must face the reality of our difficulties.
998 I said that I questioned the Government's sincerity and welcomed the proposals warily. One must do that if one looks at the Government's record on Teesside. We must not forget that when the Tory Government first came to power in 1979, the first thing they did was to reverse the decision to bring the Property Services Agency to Teesside, which meant that many potential jobs were immediately lost.
I emphasise the comments that have been made so often from the Opposition Benches tonight about the lack of democratic accountability and the erosion of democracy that the UDCs bring. After all, we must remember that it is public sector money; therefore, there should be public accountability.
It is clear that the Government do not even trust their own UDCs. Looking at the small print of what the UDCs have to do, one sees that each time they make a decision they must go to the Department for the decision to be okayed. That shows how much trust the Government place in the organisations that they themselves set up.
The Opposition do not want to solve problems just by throwing money at them. We should like to see problems dealt with differently. It is not only a matter of developing property. We should like to see development that is technology-led and skill-based. We want different forms of development, not just development. We should like a strategic plan based on the region that involves local people and relates training to future industrial development. That is the progress that we should like on Teesside.
I should like to finish with five specific questions to the Minister. I should appreciate it if he addressed them in his winding-up speech. First, in view of the massive scale of the problems that we have on Teesside, will the Minister do his utmost to see that there is no hold-up in the cash flow within the UDCs?
Secondly, the problem of drawing up the boundaries to which the UDCs apply is one which I hope the Minister has considered in great depth, but I ask him to look again at those boundaries in relation to Redcar and Langbaurgh. Many areas there need to be considered because of the high level of deprivation.
Thirdly, will the Minister do all that he can to ensure that jobs created by the UDCs are based locally so that local people can benefit from them?
Fourthly, will the Minister review article 15 of the European regional development fund so that there is a chance for more money for the area, which would not mean additional local government funding or Department of the Environment funding?
Finally, it is incumbent upon the Minister to address a question that has been posed several times in the debate. How can we have faith in his Department's ability to introduce the UDCs when the National Audit Office has refused to approve the Department of the Environment's annual accounts, because nearly £200 million has been unaccounted for, which, it is clearly stated, is not the fault of the local authorities?
§ Mr. Trippier
As there is an acknowledgement in several articles that covered the same subject this morning that the procedure has been streamlined and improved, and even the Comptroller and Auditor General has accepted that that is unlikely to happen again, how does the hon. Lady explain the dichotomy that she has just revealed? On the one hand, she complains that the Department of the Environment wants to keep a fairly 999 close check on the UDCs, yet she now draws the attention of the House to the problem which, perhaps, has been caused by our not keeping as close an eye on them as we should in the past.
§ Miss Mowlam
That is exactly the point that I am trying to make. If we do not have local democratic accountability and are dependent on the Department for the control of the funds, it is incumbent on the Department to make sure that the money is carefully checked. It is interesting that the Minister should acknowledge the problems in previous years. I hope that with him at the head of the UDCs we do not see the similar problems and waste of public funds in future.
§ Mr. Simon Coombs (Swindon)
It is a great pleasure to address the House after the hon. Member for Redcar (Miss Mowlam), for two reasons. One is the fact that, according to her excellent article in The House Magazine, I am apparently one of only three Conservative Members who know where her constituency is. I have been there. Secondly, she and the hon. Member for Wolverhampton, South-East (Mr. Turner) have brought a spirit of moderation into the debate that was sadly lacking in one or two of the earlier contributions. Bearing in mind the state of dereliction of the Labour party in 1987, perhaps there is a case for an urban development corporation for that party. If so, I shall be happy to suggest to my hon. Friend the Minister that the hon. Members for Redcar and for Wolverhampton, South-East should be selected for membership.
I speak in the debate not as a representative of a constituency in one of the UDC areas, but as a representative of a constituency which has found its own way of achieving results similar to those that we are beginning to see in the UDCs. I pay tribute to all the members of Thamesdown borough council, formerly Swindon borough council, who had the foresight—I speak of members of both major political parties—to recognise that a major industry was in decline in the town and that it was necessary to go out and look for jobs.
It is significant that Swindon is 80 miles from London, but has managed to attract so many more jobs than London dock lands, which is right there next to the heart of the City of London. It has been only because of the initiative taken by the Government and the LDDC that that story of decay has been turned around. I hope that Opposition Members will recognise that some Labour-controlled local authorities have been successful in following the entrepreneurial policies that create regeneration and bring jobs. Therefore, it is not good enough for them to say, "We never have the money." Swindon has never had a penny of Government money, yet it has achieved 50,000 new jobs in the past 25 years to replace the 30,000 that were lost. Such an achievement can be made and should have been made by local authorities that are now overborne, as some Opposition Members would say, by the UDCs.
I have had an interest in one of those areas, the LDDC, for many years. I worked not far from Wapping in the City of London and many times in younger days I used to walk down Wapping high street and look at an area which, for all the protestations of one or two Opposition Members, had become seriously derelict. The jobs had gone and to a tragically great extent the life had gone out of that area.
1000 Why had that happened? The answer is that the great industry of that area had decayed. The docks industry had all but disappeared. A few years ago I went with a group of fellow Members from both sides of the House to Rotterdam docks. The attitude of people in the London docks in those days was, "Don't try to modernise us. Don't try to frighten us into accepting the modern technology of containerisation." The people of Rotterdam, however, responded positively to the challenge. That is why we must regenerate the area that we still call docklands and why the port of Rotterdam is now the most successful in Europe.
The Government are entitled to a tribute for their success in inner-city policy over the past seven years, and particularly for the activities of the urban development corporations. I welcome the extension of the financial support available to those bodies. The Merseyside and London Docklands development corporations are transforming previously derelict areas into areas of economic growth, prosperity, and—very important—hope. It is a testimony to their success that the Secretary of State has created five new urban development corporations in the past year — Tyne and Wear, Teesside, Trafford Park, Black Country and Cardiff Bay.
The success of the London Docklands development corporation is particularly remarkable and shows how good an investment of public money the UDCs can be. For every £10 spent in docklands, only £1 comes from the taxpayer. The rest of the £5 billion now committed to or already spent on regenerating the areas has come from the private sector. Public funds have primed the pump and stimulated private investment, providing jobs, housing and amenities for docklands and an addition to the economic base of the nation as a whole. Unemployment has started to fall in docklands. The LDDC has brought nearly 10,000 jobs to the area so far and 80,000 new jobs are projected by 1992. Only today the Secretary of State for Trade and Industry officiated at the ground-breaking ceremony at the Canary Wharf development, which will create 40,000 new jobs when it is fully operational.
§ Mr. Spearing
Perhaps the hon. Gentleman was not present when my hon. Friend the Member for Bow and Poplar (Ms. Gordon) complained to the House that she had heard of a press conference relating to her constituency to which she had not even been invited. Is the hon. Gentleman now telling us that the Secretary of State for Trade and Industry has travelled today to Bow and Poplar for a ceremony without my hon. Friend's knowledge and, indeed, without her invitation?
§ Mr. Coombs
I cannot answer the hon. Gentleman's question, because I do not know the answer. I do not know whether the Secretary of State travelled to Bow and Poplar without informing the hon. Lady. If he did, I would regard it as a mistake, but it would be a mistake that followed hard on the footsteps of innumerable Opposition Members, including the right hon. and learned Member for Monklands, East (Mr. Smith) who have regularly come to my constituency in the past year without giving me notice. Let us think carefully before we cast any blame.
The LDDC recognises that new job opportunities often do not match the skills of local people. That is why it has launched a major training initiative under which 1,000 local people are now being trained in new skills by an organisation called Skill Net with the co-operation of the LDDC, the Inner London education authority and the 1001 London borough of Newham. The developers of Canary Wharf have signed an agreement with the borough of Tower Hamlets to fund additional training initiatives. In Newham, the borough council has signed an agreement with the LDDC for co-operation on homes, jobs and training. All of that makes an interesting contrast with the total hostility demonstrated by the hon. Member for Newham, North-West (Mr. Banks).
That is the way forward, and other Opposition Members have stressed the need for it. If only all Opposition Members would take the pragmatic view. Still more jobs are being created at the London City airport to be opened tomorrow by the Queen. The airport will be a magnet for still more jobs in the area.
Critics of the London Docklands development corporation like to say that the housing created in the area has not benefited local people. That is simply not the case; 45 per cent. of the houses sold were sold for less than £40,000. That represents the best possible value for money.
Under local tenants priority schemes, 2,000 previous tenants of local authorities have bought new homes. In 1981, 96 per cent. of housing in docklands was rented; today that figure is down to 83 per cent.
The Labour party is in the unfortunate position of having to denigrate success and achievement. It is clear from their remarks that many Labour Members wish that that were not the case, but on they go. There is a deep conservatism among Opposition Members. The Conservative party is now the radical party and is prepared to look for radical approaches to tackle the problems that remain.
Opposition Members should remember these simple points. Regeneration of derelict areas creates jobs and cuts unemployment, and surely they are not against that. It saves taxpayers' money, which can be used for other purposes in social services, education and housing, and it provides the rate base—let us say, the community charge base—for the future when the development corporations have ceased to exist and the local authorities are again entirely responsible for activities in their areas.
Let Opposition Members remember that the so-called yuppies, whom they love to denigrate and in whose so-called downfall they exalt, are often the sons and daughters of residents of the docklands area. With the success that their new jobs in the City has brought them, they want to own their own homes. They want to be part of the property-owning democracy. If the Labour party continues to fail to recognise that point, it will continue steadily to lose its political support.
New companies establishing themselves in the areas of the development corporations should be encouraged to support not only job creation enterprises in these areas but provision for leisure and for the arts. The quality of life for people moving into the areas is vital. It is not good enough simply to provide the infrastructure, jobs and houses. We must ensure that those who come to the areas will enjoy living in them and that they will be attractive parts of our country in which to reside.
As I see him in the Chamber, let me pay tribute to the activities of my hon. Friend the Member for South Hams (Mr. Steen). He has encouraged and sponsored and now chairs a charitable trust called the Outlandos Trust, which is essentially the brain child of the pop group The Police. The trust tries to bring the necessary funds to young 1002 people in deprived areas to enable them to establish pop groups and engage in other forms of activity that will encourage them to get out of difficult circumstances. That is the kind of practical help that we need and that is given by Conservative Members.
I support urban development corporations because they are pragmatic and because they work. I support the new generation of mini urban development corporations, which will be much shorter in life and much smaller in size but which, I hope, will have an equally galvanic effect on the areas where they are established.
Certain Opposition Members have talked about democracy. Which is the more important aspect of democracy? Is it the caucuses of Labour party activists in smoke-filled rooms, the protesters, or is it the policy of a Government who have been re-elected twice and who are regenerating the areas that are most in need of it by means of the highly successful urban development corporations? The people of this country endorse that policy, when given the opportunity to do so. I ask Opposition Members to recognise that fact, to drop their opposition to these corporations and to show the kind of pragmatic, responsible realism that will enable all of us to create jobs for the people who live in those areas.
§ 9 pm
§ Mr. Nigel Spearing (Newham, South)
I am grateful to you, Mr. Deputy Speaker, for calling me immediately after the hon. Member for Swindon (Mr. Coombs) because I echo 100 per cent. his last words: regeneration for the benefit of the people who live in these areas. But his selective quotation of an area that he knows in part does not reflect the truth.
The truth about the London Docklands development corporation and its strategic plan is that it is not based on meeting the needs of the people of east London. The hon. Gentleman, who is a good debater and who is relatively fair, shakes his head, but that is the truth. The LDDC is not meeting the pressing needs of the people of east London. There are 600 homeless families in Newham, the second most deprived borough in the country. The LDDC is not meeting their needs. The hon. Member for Nottingham, South (Mr. Brandon-Bravo), who courteously allowed me to intervene during his speech, unintentionally put his finger on the spot. As the hon. Member for Swindon may not realise, the Bill refers to the regeneration of the area, not to the regeneration of the community.
The hon. Gentleman said that the sons and daughters of my constituents are working in the City. Yes, some of them are working in the City, but some of them are not, and never will. I am referring to the children and grandchildren of the people of Canning Town, Silvertown and north Woolwich. Their opportunities to remain in the area and obtain employment in it are, if anything, being reduced by the LDDC.
I have in my hand an advertisement for the Shadwell basin area in Wapping. The Tower Hamlets council wished to erect houses to rent there. Lord Cross said that the overriding demand in docklands was for small houses for people to rent. Shadwell basin is now advertising for sale flats and maisonettes costing £185,000. Those who bought their properties during the early stages of the LDDC have gained, but the price of similar properties has now soared beyond the reach of almost the rest of the original population of east London. Properties of £20,000 1003 or £30,000, which people could afford provided they were in a job, now cost up to £100,000. That is not an unusual price in my area.
§ Mr. Brandon-Bravo
I do not think that anybody fails to recognise the needs of those who live in the area that the hon. Gentleman has described. However, during the latter part of his speech the hon. Member for Houghton and Washington (Mr. Boyes) said that if the social mix of an area is destroyed and the mangement class leaves, one has to rebuild the social mix during its regeneration. One cannot avoid, therefore, bringing people from outside into the area to give it wholesomeness.
§ Mr. Spearing
The hon. Gentleman has demonstrated the partial knowledge that Tory Central office and LDDC briefings impart. Often the figures for docklands are related to the area of the LDDC—along the river—but the dockland communities of east London are different, with centres away from that area. The London borough of Newham is a hive of intellectual and artistic activity, as no doubt are Nottingham and Swindon, but it does not figure in the dockland figures. We wanted to use the docklands for the pressing social needs of the community of Newham so that it would act as a balancer for the needs of the rest of the borough. The 200 acres that the borough was allocated to build 8,000 homes for rent was taken by the LDDC and sold to Sir Lawrie Barratt and others. It is true that some housing associations were formed, but not in sufficient numbers. The hon. Member for Swindon said that we have signed an agreement. We have done that because we want something rather than nothing, and I am glad that he agrees that that something is not what it should be.
Another myth about the past — this was said on television by the right hon. Member for Chingford (Mr. Tebbit) and the right hon. Member for Worcester (Mr. Walker)—is that we had not done anything in the area and did not wish to do much for the docklands. Mr. Reg Ward, who is the retiring chief executive of the LDDC, was interviewed on the World Service. The interviewer pointed out that the plan was introduced by a Conservative Government, but that before that the Labour Government had planned to redevelop the area.
Mr. Ward said:Yes, I think there were about four major plans produced over the early nineteen seventies which culminated in the plan of the Docklands Joint Committee in 1976, which tended in fact to see the plan as being the means whereby all the social needs of the area might be redressed.He meant that his plans did not fill that objective. Perhaps the hon. Member for Swindon will now understand why we feel aggrieved.
The greatest grievance of all concerns Canary Wharf. The Minister has confirmed in written answers to me the cost of the land. The programme was developed with north American capital and will eventually cost about £3,000 million. We were promised 50,000 jobs and a piazza the size of Paddington station. Written answers show that that land was acquired for £20 million — £12 million in equivalent public development and £8 million cash. Will the Minister say how the developers obtained £3,000 million of development for £8 million cash? There are suspicions in east London that there has been a fiddle.
There is a surplus of about £49 million on the consolidated income and expenditure account of the LDDC. Much of that has been accumulated by land deals.
1004 Is it not right and proper that that £49 million should be ploughed back into meeting the social needs of the borough? The land values are being increased by the mechanisms of the LDDC, so it should meet the needs of the area.
§ Mr. Simon Coombs
Does the hon. Gentleman understand the distinction that we make between the years and years of decline of the docklands and the innumerable plans, and the short period between the establishment of the development corporation and all the activity that is occurring there now?
§ Mr. Spearing
I regret giving way to the hon. Gentleman because he does not appreciate what was happening. About £20 million of public money from the
Thames water authority was spent on draining Beckton marsh. Plans were being made and many of the council houses in Tower Hamlets were built and can be seen in Shadwell today.
Last week The Independent carried a report about the accounts of the LDDC auditors, Messrs. Robson Rhodes. They drew attention to the sum of no less than £7.9 million being spent on consultants and said that over 40 of those deals were not put out to competitive tender and did not comply with the rules laid down by the LDDC. I have a document here that I think I got out of the back of a copying machine. Robson Rhodes are the retiring auditors and I believe that they were appointed by and are accountable to the Secretary of State. The communication from Robson Rhodes says:On other financial controls we noted instances of incorrect invoicing, failure to raise credit notes or otherwise action adjustments agreed with tenants, and uncertainty about the respective responsibilities of finance and area teams in a sample of 22 accounts examined.Under the heading "Establishment and maintenance of a contracts register" the auditors say:We commented last year on the absence of this control over the correct accounting for interim payments under contracts. We understood then that efforts would he made to establish such a register. As yet, although there have been some systems design work on the project, a contracts register is not yet operated. Establishment and maintenance of a register of fixed assets: we have previously pointed to the absence of such a register, which in our view is required as a condition of the Corporation's Memorandum of Financial Arrangements.If a local authority had done only one of those three things, I am quite sure that the district auditor would, quite properly, have been down on it like a ton of bricks.
This audit report shows that there is no reason to suppose that a corporation is any better at these things. A corporation is out of the public spotlight and away from the automatic checks that are inherent in our historic system of local government. In spite of that, through this Bill the Minister will pour largesse into organizations which are not only undemocratic, but which have leakages and difficulties of the sort that I have mentioned.
§ Mr. Anthony Steen (South Hams)
I apologise to the House for not being present until soon after 7 o'clock. As you will know, Mr. Speaker, I attended a memorial service for a former hon. Member, Sir Henry Studholme, who was a Whip here for many years. I was not being discourteous in not being here at the start of the debate.
One has a feeling of OA vu when one listens to the hon. Member for Newham, South. I have heard similar 1005 speeches from him over and over again on urban development corporations. They are always very enlightening, but they all have the same theme. We appreciate his consistency in this matter.
Urban development corporations are a vehicle for central Government to take things away from local government in the belief that if they pour increasing sums of public money into a locality they can put things right. The idea of pouring vast sums of public money into urban areas is not necessarily the right approach. It is an illusion to think that more public money pumped into selected areas will create a better environment and a better habitat for the people who live there.
President Carter spent $190 million in one very small neighbourhood of Atlanta in the belief that if the area was razed to the ground and the people moved out and a completely new neighbourhood built, when the people moved back the situation would immediately improve. Statistics were prepared showing the number of people on probation, the number of single parent mums, the number of elderly people, young people, alcoholics and unemployed in the area before it was knocked down. Ten years after the area was rebuilt the incidence of deprivation was virtually the same as before.
Therefore, the Minister should be cautious about pumping vast sums of public money into the UDCs, because those corporations will not, by themselves regenerate our cities. They will enable new buildings to be put up and make the place look better, but they will not, in themselves, improve the quality of life for the people in those areas.
Since 1968 endless sums of public money have been pumped into the cities. I have attended many debates in this House on urban regeneration, yet the cities continue to look worse. Whenever I visit my old constituency, in Liverpool, the city does not look any better despite the vast sums of public money that have been spent there.
Although the UDCs are supported by both sides of the House, I do not believe that they will regenerate ailing neighbourhoods, help rundown communities and improve the quality of life in those areas. I believe that the Minister should consider whether he can go a bit slower regarding the UDCs. Rather than pumping money into one small locality for job creation and economic revival, perhaps the Minister could put some more money into neighbourhood renewal. I do not think that public money alone should be pumped into neighbourhood renewal; I believe that the people living in vast council estates and rundown inner-city areas should be encouraged to help themselves.
It is apparent that Baltimore, Cleveland and Atlanta in the United States have been revitalised not by pumping massive dollops of Government money into small localities, but by giving the people in those neighbourhoods the opportunity to help themselves by partnership with central and local government. For example, someone living in Baltimore in a rundown house would be given a grant at an interest rate of about 2 or 3 per cent.—that was the interest rate 10 years ago—to do up his house. That person would borrow the money from the bank and paint the house, inside and out. In return, the local authority would landscape all round his house and the Government would lay a new road. It is that type of partnership between central and local government and the people that will regenerate our cities.
1006 In the past, either local government or central government have been involved in regeneration; the people have always been excluded. Even the task forces that play a great part in the Government's inner-city revival consist of people sent from Westminster to live in the chosen areas. Although it is much slower and more painful, we shall see the restoration of wealth creation and community development only by giving the proverbial carrot to the people living in the area.
I ask my hon. Friend not to increase the money given to the UDCs, but to start giving more money to fund the partnership between local and central Government and the people. That is important. I believe in neighbourhood renewal and that people must be involved in the regeneration process.
Although the UDCs are a fitting vehicle for economic regeneration and the creation of jobs, they do not result in an improved quality of life for the people in those cities. We need to improve their quality of life first and I hope that the Minister will say something about that when he replies.
§ Mr. Alan Michael (Cardiff, South and Penarth)
It is a pleasure to welcome the closing remarks of the hon. Member for South Hams (Mr. Steen). They were a welcome change from some of the remarks that we have heard from the Conservative Benches during a long, but not always entertaining, debate.
I had intended simply to speak about some aspects of the co-operation that is needed to ensure the success of the UDCs, but I must refer to one of two of the diversions that have taken up so much time.
Two Conservative Members made maiden speeches, and the Conservative party would benefit from taking note of what they said. One hon. Member warned that we in this House should beware of being trapped by the limited horizons of the London tube line. That was a worthwhile warning, especially as a number of Conservative Members reflected just such a horizon and gave a perspective of our country that I did not recognise.
The hon. Member for Walthamstow (Mr. Summerson) appealed for partnership between public and private enterprise. Many Labour Members are used to such a parnership being effective and successful in local areas. I hope that the Minister will proselytise his own colleagues to that approach as a way of regenerating our communities. It is very much needed. Indeed, some of the rhetoric in the debate has been terrible to hear and is something that our communities do not need.
The hon. Member for Langbaurgh (Mr. Holt) failed to recognise the achievements of public enterprise over many years. He failed to recognise the wisdom and business acumen that have often been contributed to those achievements, by those with a manual or non-academic background. Like many of my hon. Friends, I resented those remarks.
Such contributions have been made through local government, whereas often a narrow commercial experience in public has not released creative energies into enterprise and local government. Only if the best of the creative ability of all aspects of our communities can work together will development corporations or local authorities work effectively for the communities that they 1007 represent. These work well only when people have a care and love for their localities and feel passionately that they want to do the best for them.
The regeneration of the inner cities is important. I care about the regeneration of the Cardiff and Penarth area. It is too important to become a political football to be used as a symbol in debate. I hope that the Minister will explicitly reject the narrow and doctrinaire approach that has been urged on him by some of his more extreme Back Benchers. That is not what the Opposition are arguing for. We are arguing for the positive approach that can come about only through co-operation by everyone who cares about the locality.
It is sad that the debate has been used as an opportunity to denigrate the democratic traditions and effectiveness of local authorities. We should be encouraging the positive aspects of local government and praising the successes rather than keeping the eye always on the odd failures, which have been blown out of all proportion by some hon. Members. We should not wallow in self-indulgent criticism of the work of others, but should look to those aspects from which we can learn. I hope that the Minister will be positive and not follow those negative criticisms.
It seems that the world in which I live is different from that in which some Conservative Members live, because where I come from the Labour party through local government has taken the initiative either on its own or in partnership with commercial interests to regenerate the area. I am sure that the Under-Secretary of State for Wales will confirm that description of the way in which things have operated in Cardiff and south Wales.
The redevelopment of Cardiff city centre is one example of local government success. In that case local government initiated regeneration and worked in partnership with companies in the private sector. It effectively brought about a redevelopment that was in the interests of the city and the area that it serves.
The Cardiff Bay development corporation has been referred to. That has an opportunity to build on a firm foundation that has been offered by local government. It also has a duty to build on that firm foundation, in co-operation with all the other agencies involved. That foundation is sound because it has been created over a number of years by local government. Labour councillors have played a full, positive and leading role in that regard and that is the right way to proceed.
It is a ludicrous misrepresentation to say that we need an urban development corporation to cut through the red tape of local government. My experience in local government is that we have been battling against the red tape of national Government, which has increased over the last five or six years. I hope that there will be some reversal of that trend in the coming years.
The positive aspect of development corporations is that they can be used as constructive mechanisms. They are not a magic wand, as some hon. Members seem to think. They can be used as positive, constructive mechanisms for improving inner cities. Development corporations are being given jobs and the resources to create jobs. I welcome that development. In my area, I shall work with the Cardiff Bay development corporation and everybody involved in it to make sure that it is successful, that it works for the area and my constituents—many of my constituents live within the hoard's area, although I 1008 understand that that is not the case in some other areas—and that resources are used for the benefit of the area.
I welcome the support of the previous Secretary of State for Wales, who was rather quicker than some local Conservative county councillors to recognise the potential of the docklands area, and the present Secretary of State for Wales even if the initiatives are based on the urban development corporation structure. That may not be the necessary structure, but if that is the structure that we have, we should use it in the best way that we can.
I suggest some points to be taken on board in ensuring how that can be done. The effect on employment needs carefully to be measured. We need to ensure that there is evidence, criteria, targets and that we measure the success of the actions that are taken and the way in which resources are used. From experience to date, there is a suggestion that that has not always been the case with some earlier development corporations.
We need to make sure that resources are not simply diverted so that the success of one element in the reconstruction of a city is at the expense of other needed developments—that is, in effect, that money is not creamed off to generate success by stealing from other headings.
We need to encourage a partnership with other job creating agencies. That is important. There is a danger that something such as a development corporation may want to become almost a unitary authority. Local authority partnership with bodies such as the Welsh Development Agency and Cardiff and Vale Enterprise is essential if we are to achieve long-term success. I hope that that aim will be encouraged by Ministers as the corporation develops.
Area priorities need to be recognised. There is a danger that something will be identified as meeting the needs of a development corporation. We must always ask whether it meets not only the short-term needs of a company but the long-term needs of an area. The way in which a criterion is set and the way in which that question is asked and answered is important. We could have heard more in that respect, and I hope that we shall as time goes on.
We must examine the danger of a loss of jobs. During relocation for the purpose of clearing areas, there is a danger that some jobs may disappear. For example, firms may go out of business rather than go to new sites. That aspect needs carefully to be monitored and measured.
In the end, local people will inherit the results of a development corporation's work. It is important that they should be heard and involved at every stage of the decision making process.
Accountability is so important that it has been stressed many times during the debate. At a time when local authorities must make their workings and information—and the basis on which they take decisions—open to the public in a way in which they did not have to in the past, it is ludicrous for an organisation such as a development corporation not to be equally open. I hope that the Minister will say that such accountability and understanding of the process will be built in.
If people are appointed to a corporation, and they are uncertain about what they should say and what should be public, there is a temptation to say as little as possible. I hope that the Government will provide encouragement and confidence to corporations to be as open as possible with the public.
1009 I hope that I have made some positive suggestions about the way in which urban development corporations can be successful. There is a danger, which was reflected in the comments of some Conservative Members, that a mechanism can become flavour of the month and later, when people or the Government lose interest and move on to other things, be left to decay. The enterprise agencies are in such a danger.
The Minister took an active part in the promotion of enterprise agencies, as I have through local government in my area. There is a danger that they will go on to the back burner now when they have achieved success in many areas. They need consistent encouragement over a long time. Enterprise agencies offer a mechanism that can be used for the positive benefit of local communities and should not be allowed to become a political football.
If the Government take on board and respond positively to the points I have raised, we will be able to work in co-operation for the benefit of the community.
§ Mr. William O'Brien (Normanton)
This has been a long and interesting debate, and I add my congratulations to those hon. Members who made their maiden speeches. I hope that we shall be hearing more from them.
I congratulate my hon. Friends on their defence of local government, because we are talking about local services which are mainly provided by local government. Therefore, it is only right that we should express our appreciation to those hon. Members who have been defending local government.
The Minister referred to the Chancellor's declaration that there will be further increases in UDC expenditure next year. The Minister used the word "substantially". I hope that there will be some increase in the resources channelled into local government because urban development corporations cover only small areas of the country that are being given extra resources for extra services. It is important that we take note of the services that are provided by local government, as there is very little difference in principle between the services provided by UDCs, for which we are increasing the available resources, and the services provided by local authorities, although the services provided by local authorities greatly exceed those provided by urban development corporations. I refer to social services and care for the elderly. There are now joint management schemes for health services and social services, and resources should be channelled directly to them. Those services are not provided by the urban development corporations.
It is important that we remind the Minister that some areas in this country are served by good local authorities which need resources to meet responsibilities that they are having to face because of the demise of hospital services in many localities.
On 24 October the right hon. and learned Member for Richmond, Yorks (Mr. Brittan) said:Why does the Government seem to be taking so many powers away from local government? Is this justified? Is it democratic? Will there still be a significant role left for local government? Do the changes proposed deal with temporary problems? Or do they mark a permanent shift in the constitutional balance of power?As Parliament begins to embark on a massive programme of change in local government finance, in education and in 1010 housing, it is natural to ask these questions and the anxieties that have been aroused make it sensible to try to provide answers. To start with, it is impossible to deny that the Government's proposals will reduce the scope of local government activity, and it is best to be candid about this. Within their areas, Urban Development Corporations take on the development powers of local government. Housing Action Trusts are to be allowed to take over council estates. And schools will be permitted to opt out of local authority control. In total, potentially a major reduction in the power and influence of local government.In other words, it is an attack on local government. That speech was made by a former Tory Minister.
It is significant that several Conservative Members are concerned about the attacks on local government. I am pleased to see the hon. Member for Langbaurgh (Mr. Holt) in his place, as he has been absent for some time. He made personal attacks that were both unfair and unreasonable. I was a member of the Wakefield local authority, which was commended by a former Tory Secretary of State for speeding up the processing of planning applications. I therefore reject the hon. Gentleman's attacks on local authorities and their planning departments.
§ Mr. O'Brien
If that is the level of politics debated in the hon. Gentleman's constituency, I am sure that his office will be of short duration. It is certainly not the sort of debate that we expect in the north-east.
My hon. Friend the Member for Houghton and Washington (Mr. Boyes) outlined the Opposition's policy on UDCs. He said that their aim was to attract private investment, although that is difficult in some areas. I understand that the Minister is due to visit the Wakefield metropolitan district. We will tell him that some areas are difficult to develop. Areas that formerly were the home of the mining and steel industries are not considered suitable by hi-tech industries, because it is claimed that the ground might be unstable. There is, therefore, a blight on those areas even before the establishment of a UDC. I hope that the Minister recognises that areas in the industrial north are blighted because of their former industries. In addition, because of the lack of infrastructure it is difficult to attract employers who might generate job opportunities.
My hon. Friend the Member for Houghton and Washington put some questions to the Minister. He asked whether there would be cuts in the finances available to urban development corporations. Can we be assured that financing of the corporations will increase? The introduction of mini UDCs was also raised. It would be helpful if the Minister could explain how areas are selected, because that has created much concern.
Reference has been made to the decision of the Comptroller and Auditor General on grants allocation. The Minister said that action is being taken about that problem. What vehicle is to be used? How can we prove that urban development corporations are giving value for money?
My hon. Friends have pointed out that urban development corporations are not democratic and are answerable only to the Secretary of State. Local people do not have a real input and their destiny is left in the hands 1011 of those who are in control of the UDCs. If we are sincere in our wish to provide local services and in the rhetoric that local services are important, we must ensure that local people have some say in the way services are provided.
§ Mr. Simon Hughes
Given the concern that the hon. Gentleman has expressed about local services — a concern that 1 expressed earlier—what still troubles me slightly is that I have not heard any opposition from his Front Bench to the principle of removing Parliament's control over the money granted to UDCs. Is the Labour Front Bench opposed to the principle of reduced accountability, or is it, like most of the Back Benches of the Labour party, supportive of the principle that the House should still have control over that money?
§ Mr. O'Brien
I thought that we had made it clear that we, as a party, are opposed to the fact that there is very little democracy about the way urban development corporations are established and will operate. We are opposed to undemocratic procedures.
Money is needed in many areas for the provision of local services. Further resources should be made available for that purpose. When I was elected to a local authority 30 years ago, I wanted to make changes to improve the environment of the area. That is the purpose of local authorities. I hope that the Minister will encourage local authorities whose areas are not included in the UDC development to stimulate job opportunities and develop housing amenities and recreation facilities.
The Minister says that the success of urban development corporations is measured by the amount of private money that they can attract into the areas. Unless facilities are made available it will be difficult for local authorities to match up to the way that UDCs are measured. I hope that the Minister will explain how resources will be provided for the long-term planning of UDCs. We shall not divide on this issue, but we are concerned about the way in which the areas are selected, and the fact that the UDCs are undemocratic.
§ Mr. Trippier
With the leave of the House, I should like to reply to the debate.
This has been a wide-ranging, interesting and enjoyable debate. I congratulate the hon. Member for Normanton (Mr. O'Brien) on his first speech from the Dispatch Box. I also wish to compliment and congratulate my hon. Friends the Members for Walthamstow (Mr. Summerson) and for Stockton, South (Mr. Devlin) on their excellent maiden speeches. It is significant that they both paid warm tributes to their predecessors, Eric Deakins and Ian Wrigglesworth respectively, who were highly regarded by hon. Members of all parties.
I particularly enjoyed the part in the speech of my hon. Friend the Member for Walthamstow about the ridiculous rate increase with which we are all familiar—the 62 per cent. increase imposed by Waltham Forest council. My hon. Friend the Member for Stockton, South made a stirring speech, the theme of which could be dubbed, shouting for the north. It contrasted with the contribution of the hon. Member for Redcar (Miss Mowlam), who gave what could only be termed a dark cloud speech. That seemed to be its theme. I am pleased that we now have an hon. Friend who is prepared to shout for the north and talk about its great strengths. Those of us who are 1012 passionate northerners become a little fed up when some of our fellow northerners are too quick to sell themselves short or pull themselves down rather than talk about what is best. I was delighted that the right hon. Member for Halton (Mr. Oakes) picked up that theme and agreed with my hon. Friend the Member for Stockton, South.
The speech of the hon. Member for Houghton and Washington (Mr. Boyes) was constructive. He said that Labour Members will work with urban development corporations and give them maximum support. Obviously, Conservative Members welcome this support. We have found it difficult to understand the Labour party's official position with regard to UDCs. I appreciate that the hon. Gentleman may have difficulty with some of his hon. Friends, particularly in London, because they still cannot decide whether the LDDC is a good thing. The number of Labour Members from London constituencies who are decrying UDCs shows the ideological stance which caused Labour to lose seats in the capital at the last general election—for example, in Walthamstow.
I welcome the contribution of the hon. Member for Cardiff, South and Penarth (Mr. Michael), which was most constructive.
The right hon. Member for Bethnal Green and Stepney (Mr. Shore) asked me whether we have the local authorities' support for the new UDCs. The right hon. Gentleman has much experience in this field, particularly in the Department of the Environment. We have both the support and participation of councillors, many of whom are Labour, on UDC boards. We are having considerable difficulty, as the right hon. Gentleman will know, with the LDDC board and, to a lesser extent, with the NDC board. I welcome the vast majority of contributions made by Opposition Members during this debate. It has been very refreshing to hear them.
§ Mr. Frank Field
I hope that the House counts me as a northern Member who wishes to shout for the north. The shouting that I did in earlier interventions was designed to draw attention to the unfair distribution of resources by the Merseyside development corporation, which gave £180 million to Liverpool and only £4 million to Birkenhead. In support of those who shout for the north, I plead with the Minister to grip the Merseyside development corporation gently by the throat and make sure that, in years to come, the distribution of resources is fairer than it has been during the past five years.
§ Mr. Trippier
I am broadly sympathetic to the hon. Gentleman's point and to the interventions that he made earlier. He knows that a major difficulty has been the transfer of land from the Mersey docks and harbour board to the Merseyside development corporation, as it owns the bulk of the land on his side of the river which is within the development corporation boundary. He and I will be pleased when that transfer of land takes place, and I hope that in the near future I can announce some good news about that.
§ Mr. Trippier
Yes. I am especially keen to have balanced development on both sides of the river. I am aware of what the hon. Gentleman has said, publicly and privately, about extending the boundaries on his side of the river.
1013 I was pleased to hear the hon. Member for Houghton and Washingtoon say that he endorses private sector investment. Not all his colleagues have agreed with that. We need private sector money and ingenuity. We do not except similar leverage in each area. As I said in opening, no two areas are the same. The leverage will depend on many local circumstances. In the less promising areas, it may be some years before private sector investment builds up, and I accept the point made by hon. Members from the north-west and the north-east that it may be a little more difficult in their areas. But I refer again to the example of Salford quays, which is next door to Trafford Park urban development corporation, where there is an impressive leverage of 6:1.
The Merseyside development corporation leverage has been low, but that is a reflection of the fact that it has had to concentrate on reclaiming severely despoiled land. That is nearly completed, and the MDC is concentrating increasingly on development. It envisages £100 million-worth of development, which will have a significant impact on the gearing ratio.
The hon. Member for Normanton asked about the financing of UDCs. Recently my right hon. Friend the Chancellor of the Exchequer announced finance for the UDCs for the next three years of more than £200 million each year. The division of that sum among the UDCs will depend upon the programmes that they introduce each year. Full corporate plans will be prepared next year. The allocation of funds for next year will be based on preliminary strategies and the early opportunities that are available to each UDC
Several hon. Members asked how we determine value for money. Individual projects are introduced by the UDCs and are the responsibility of the boards, which must decide their priorities within their budgets. As one would expect, the Department will check whether they conform with the established rules under which grant is paid and that they have been properly appraised. What constitutes value for money will vary from one project to another. The answer to the question why we cannot fund them as we did the new towns is straightforward: the new towns were financed from loans and were building on green field sites. The UDCs are building in areas where many millions of pounds must be spent before sites can be developed, and the only prudent way of financing such expenditure is by grant.
I especially welcomed the contribution of my hon. Friend the Member for Davyhulme (Mr. Churchill), who knows Trafford Park extremely well. He mentioned a good example of a Labour-controlled authority —Salford —which is prepared to work in co-operation with the private sector and with central Government. It might impress the Opposition if I said that co-operation between central and local government, whatever its political persuasion, and the private sector— the tripartite form —increases leverage. In some circumstances, we have had to bypass the local authority. We take no pleasure in doing that. I believe that that reduces the leverage and therefore Salford is a good example. However, my hon. Friend will not be surprised to hear me say that cheek by jowl and next door to Salford is Manchester city council which, from time to time, has proved extremely difficult for us to work with.
The right hon. Member for Bethnal Green and Stepney made a sensible contribution. We are all familiar with the 1014 background to it. However, I found it absolutely staggering when he said that much of what has happened in London docklands would have happened in any event, assuming that a Labour Government had been in office. We are all politicians, and I think that I have a vivid imagination, but that is stretching credulity to breaking point. I would suggest that not one hon. Member among the right hon. Gentleman's hon. Friends, let alone among Conservative Members, believes that. It is palpable nonsense and is demonstrably daft because it never happened. All the plans to which Opposition Members have referred and which perhaps were being considered in the 1960s or even the 1970s were never implemented. That is the difference—we got on and did the job.
The right hon. Gentleman asked me about housing. We should be clear about the role of the LDDC in housing. It is not the local housing authority for the docklands area of Tower Hamlets, Southwark or Newham. The local councils have that role. The LDDC has no statutory power to build or provide housing in its area. It does not receive any money for that purpose. It has not diverted housing funds away from the local councils as the right hon. Gentleman appeared to imply. The conditions on docklands council estates are matters for the landlord councils. Their HIP allocations from central Government reflect the housing needs in their areas as a whole. They must determine their own programmes to reflect their view of local priorities. The LDDC has no locus in that.
§ Mr. Trippier
I am sorry, I cannot give way as I have only four minutes left.
It should be clear that the LDDC has shown considerable concern about local housing needs and has acted in a number of ways to complement local authority initiatives. It has promoted an affordable housing policy and has aimed to ensure that more than half of the houses built on LDDC land are priced below £40,000. It has acquired local rundown council estates, often for low-cost home ownership schemes. It has co-operated with boroughs on joint developments of adjacent sites for housing. However, perhaps there should be greater concentration on social housing.
I had the opportunity recently of meeting the chairman of the LDDC board, his deputy and other representatives. I stressed that there is no lack of sympathy with the point made by the right hon. Member for Bethnal Green and Stepney about the need for social housing. Certainly I am prepared to discuss the matter with him in detail on any occasion that he wishes. Perhaps we shall find that we agree more than we disagree.
The hon. Member for Southwark and Bermondsey (Mr. Hughes) referred to UDC finance. As I said in my opening speech, there is no shortage of ways in which Parliament can debate and investigate UDCs. There is obviously the formal process of voting on the Estimates, which offer scope for debate. The Select Committee on the Environment scrutinises the Department of the Environment's main Estimates and can look and has looked at proposed UDC projects. The Public Accounts Committee also examines UDCs. The National Audit Office is currently considering the LDDC and the NDC, and, of course, Opposition Members could choose to debate UDCs on their Opposition days. In addition, there are numerous opportunities during Adjournment and other debates on other subjects for UDCs to be discussed.
1015 However, I found it a little difficult to stomach taking lessons from the hon. Member for Southwark and Bermondsey on co-ordination. It is a little rich to hear a Liberal Member talk about co-ordination. Indeed, it takes the biscuit that he should lecture us about partnership in view of the internecine warfare that has been going on between the Liberal party and the SDP, and the bloodletting that has taken place since the last general election. At the risk of hammering the nails out of sight, the hon. Gentleman has the temerity to ask who is in the lead on the Conservative side, when we have been baffled as to who is in the lead on the alliance side. The Prime Minister is in the lead. The day after polling day, she said that inner cities were at the top of the agenda. It will be for Parliament and the UDCs to play a vital part in that policy.
§ Question put and agreed to.
§ Bill accordingly read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).