Scottish New Towns

HC Deb 11 July 1989 vol 156 cc811-20 3.46 pm

The Minister of State, Scottish Office (Mr. Ian Lang)

With permission, Mr. Speaker, I should like to make a statement about the Government's decisions on the future of the Scottish new towns. We are publishing today a White Paper, "The Way Ahead", which sets out our decisions in more detail and builds on the earlier consultation document "Maintaining the Momentum".

We welcomed the substantial response to the consultation document, although it meant that the consultation process itself was extended. We are well aware of the key role played by the five new towns in achieving economic success for Scotland and it is for that reason that, following a major review, we have taken a measured and distinctively Scottish approach to their future.

While recognising—few have questioned it—that the time has now been reached to begin an orderly progress towards wind-up, our central purpose is to ensure the continuing economic vitality the towns have achieved. We acknowledge their importance to Scotland's international industrial image. The achievements of the new towns have been outstanding and reflect the commitment and dedication of the boards of the development corporations and of their staffs. I gladly pay tribute to them.

The towns' recent remarkable progress in creating jobs and prosperity has accelerated their growth to maturity. In 1988 I asked the development corporations to determine their key objectives for the next five years, and identify the major remaining development tasks necessary to achieve physical maturity. The Government broadly endorse the resulting development profiles and I know that the corporation staff are anxious to press ahead with these programmes. I can assure them of our support for the work that remains to be done to secure the remaining development of the towns.

Against that background, we have decided that wind-up will begin for East Kilbride and Glenrothes in 1991 and be completed in 1994. Cumbernauld will begin wind-up in 1993, Livingston in 1995 and Irvine in 1996. I believe that that timetable sets a sensible pace, based on the corporations' own appraisals of what remains to be done, but our legislative proposals will afford some flexibility, again reflecting our aim to implement wind-up in such a way as to take account of each individual town's circumstances.

In seeking to maintain the economic momentum and meet the ends of enterprise after wind-up, the Government considered a range of options. We have decided that the most effective way will be through the establishment in each new town area of a local development company. This will be a private sector company formed to own, manage and develop the residual industrial and commercial assets of the former development corporations. In addition, the local development company will fulfil, for a limited number of years, certain public sector functions in its area, under contract to the successor body to the Scottish Development Agency. The kind of functions that we envisage include the promotion of the area, the provision of premises and support for small business and, especially, for inward investment. Local development companies of this kind will, I believe, achieve our economic objectives in an effective and dynamic way. In considering their formation, we shall be willing to give full consideration to management buy-out proposals.

The White Paper details our proposals for the future of community assets, such as public open spaces, halls and local sports facilities. For those, we propose a diverse solution including possible disposal to local charitable, religious or community organisations or sports clubs. The private sector and local district councils may also have a role to play.

On planning, the White Paper makes it clear that the planning system that presently operates in Glenrothes new town, which does not have a Special Development Order, will progressively apply in the other four towns as the wind-up process proceeds. The Special Development Orders will be revoked at the time of dissolution, by which time we envisage that much of the development of new town areas will be complete.

The White Paper sets out arrangements for the reconstruction of Scottish new town finances, following the financial management survey of 1986 and a thorough study by consultants on the necessary amount of debt write-off that forms part of that wider reconstruction. The approach involved is similar to that adopted for the reconstruction of the English new towns' debt in 1986, which was authorised by the New Towns and Urban Development Corporation Act 1985.

Much of the local interest in our proposals centres, understandably, on housing. I confirm our earlier commitment that, until wind-up, each individual new town tenant will have the right to remain the tenant of a development corporation. As dissolution nears, however, choices will have to be made. The Government see two distinct periods here. In the first, running to wind-up, the White Paper makes the corporations' priorities clear. The resounding success of our sales policies and the encouragement of private sector housebuilding will see home ownership this year rise to more than 50 per cent. in the five towns as a whole, compared with only 8 per cent. a decade ago. That is an outstanding achievement. We are equally concerned to see more variety and choice in the rented sector through housing associations and co-operatives. The development corporations have identified a number of locations suitable for the possible establishment of community-based housing initiatives. We shall encourage tenants associations to consider setting up locally based housing associations or co-operatives, where they will be able to participate in the management of their homes and shape the sort of neighbourhood in which they live.

A survey commissioned by the Government of tenants' attitudes in four of the new towns revealed considerable uncertainty among corporation tenants about their future wishes, as well as a lack of awareness of the full range of rented housing options available. Extensive local consultation is needed and, as part of an information programme for tenants, they will receive in the autumn a detailed information leaflet on the options open to them. I am placing a summary of the tenants' survey findings in the Library today, and the full results will be published later in the summer.

At wind-up, when stage two is reached, the option of a partial transfer to district councils is not ruled out. The alternatives, which also include housing associations, co-operatives, private and other landlords, will each be considered on the basis of their potential contribution to meeting both housing need and the Government's twin objectives of increasing home ownership and providing a wide choice of tenure for those who wish to continue to rent. The present pace of house sales, the new diversification and the rents-to-mortgages initiatives, and the contribution being made by private sector housebuilders are certain to produce a very different housing scene in four years time. The tenants remaining with the development corporation at the time of their dissolution will be transferred to Scottish Homes.

For up to 40 years, Scotland's new towns have grown and matured, providing an attractive environment for their residents and an excellent location for industry, both indigenous and from overseas. The time to prepare for their wind-up, envisaged at the outset, has now arrived. The Government are confident that, with the proposals in our White Paper which I have outlined today, Scotland and the towns themselves will continue to enjoy the import ant benefits that the success of our new towns has afforded. It remains our purpose to maintain the momentum.

Mr. John Maxton (Glasgow, Cathcart)

If the Government are well aware of the key role played by the five new towns in achieving economic success for Scotland why are they so intent on destroying that very success with such half-baked and ideological schemes?

Is the Minister aware that there will be considerable anger in Scotland and especially in the new towns at the way in which that success is being jeopardised by the Government because of what appears to be a purely ideological hatred of public bodies and a pathological fear of democratically elected bodies in Scotland?

How can the Minister justify the cavalier dismissal of local authorities that appears in the document and the absolute non-appearance of local authorities in any future that the Government have in mind for the new towns?

We accept that the new town corporations must cease to exist once they have completed their task, but is not the three-year wind-up period ridiculously short and will it not create enormous difficulties for all who live and work in the towns?

Are not the industrial plans, in particular, a massive rip-off of public assets in the new towns? Will the Minister tell the House today exactly what those assets are worth, what they consist of and what, if anything, the new companies that he is establishing will have to pay for them? Can they possibly do the job that the new town corporations, often together with the SDA, have done in the past?

What business men will come forward to run those companies—[HON. MEMBERS: "Mr. Bill Hughes."]—unless they are being offered substantial rewards? I am sure that that will be true in the case of Mr. Hughes.

Is not one of the attractions of the new towns their open spaces and amenity facilities, including sports facilities? If the planning of those facilities and their use by all in the community is to be maintained, would it not make infinitely more sense to hand them over to the democratically elected local authorities, who know the community's needs, instead of selling them piecemeal to private companies or giving them away to scouts, churches and so on?

Will the Minister give us a little more detail today of the survey carried out of tenants' wishes for future tenure? Like the survey carried out by the same company, using the same methods, for East Kilbride district council, does it not show that on wind-up the vast majority of tenants —up to 90 per cent.—want to be transferred to the local authority, not to any other form of landlord?

Why does the Minister say that he will place the figures in the Library? Is he afraid to give them to the House today? Will he give us a guarantee today that the wishes of each tenant will be fully respected and that all tenants who wish to transfer to the local authority will be allowed to do so? If not, the Government's case for choice goes out of the window.

Does the Minister recognise that his decision to transfer all remaining tenants to Scottish Homes on wind-up means transferring them to private landlords, because Scottish Homes will cease to be a public landlord in the near future?

Will not this piecemeal and disorganised approach to winding up Scottish new towns make it difficult to sustain the planned growth and development that has been their unique contribution to Scottish life, thus damaging their future and Scotland's economic future?

Mr. Lang

The hon. Gentleman asked why we are proceeding with the wind-up of the new towns. He will know that their ultimate wind-up was envisaged at the outset in the legislation that established them. It is plain that East Kilbride and Glenrothes are now close to maturity and that, over the next few years, the other new towns will also be close to maturity. Once the development of their areas has been largely completed, it would be wrong for them to continue to enjoy special privileges not enjoyed by the rest of Scotland's residents, and special funding arrangements which have accumulated substantial borrowings from the national loans fund over the years. We are not seeking to destroy success, but to ensure that the great success achieved by the new towns is sustained after the wind-up. That is what our proposals envisage.

The hon. Gentleman suggested that three years was too short for the wind-up process, but I disagree. Three years will he adequate to complete the wind-up process, particularly when one bears in mind that in the case of the first two new towns it will not start until 1991 and, in the case of the others, until some years later.

There is no question of a rip-off in the disposal of the assets. The corporations will continue to dispose of some of their assets—and, indeed, will be able to fund further developments with the proceeds—but when the local development companies are set up there will be no question of the assets' being handed to them. A price will be paid that will reflect their value at the time, and the proceeds will be for the benefit of the Exchequer.

The hon. Gentleman asked who would come forward to bid. There are a number of possibilities. An existing company may make a bid, a new private company may be established or there may be a management buy-out frame. As I said in my statement, that might have considerable advantages.

We certainly do not rule out the transfer of community assets to local authorities: it is possible that a number will be so transferred, and, if necessary, it may be possible to consider an appropriate endowment to ensure that authorities do not thereby incur excessive losses. I consider it right, however, to give voluntary bodies such as charitable organisations, sports clubs and religious organisations—and, possibly, some of the industrial residents of the new towns—the opportunity to become more closely involved with the environment in which they live. Some will, I believe, wish to take advantage of the opportunity to buy the assets that they have enjoyed over the years.

The hon. Gentleman asked for more details of the housing survey carried out by Market Research, Scotland, and I am happy to give him some figures. It is interesting to note that, if invited to make a choice now, more than two thirds of those surveyed would not exercise it—and would therefore be content to remain with the development corporation—while fewer than 20 per cent. would elect to go to the district council. If obliged to choose now, 58 per cent. would choose to go to the district council; but they are not obliged to choose now. If they had to choose at the time of the wind-up, fewer than half would choose to go to the district council. The hon. Gentleman's challenge was that tenants' wishes were not being accepted, but their wishes seem far from clear or precise. That supports our proposal to carry out an information campaign to ensure that all the objections are brought to the attention of the tenants.

Far from being a "piecemeal and disorganised" proposal, these measures, to which much consideration has been given, offer the best prospect for the new towns to move forward to a new environment and to maintain the momentum that they have so firmly established.

Sir Hector Monro (Dumfries)

Does my hon. Friend agree that the new towns have been a great success in both industry and housing, and that there is no reason why they should not be further enhanced under the proposal that he has announced? Will he try, through the SDA, to promote throughout the rest of Scotland some of the excellent ideas that have borne fruit in the new towns? Finally, can he assure me that new towns with airstrips, which are important for executive travel in Scotland, will ensure that they are still available in the long-term future?

Mr. Lang

I am grateful to my hon. Friend for welcoming the proposal. I certainly agree with his suggestion that the enterprise and ideas that we seek to advance in the new towns should be promoted throughout Scotland, and, if my hon. Friend can contain himself until my right hon. and learned Friend the Secretary of State is able to make his statement on the Scottish Enterprise proposals, I think that he will then see the kind of enterprise initatives that we are keen to foster.

I also agree that the airports are a valuable asset. I have flown from the airport at Cumbernauld, and I believe that those assets should be developed, and will be to the advantage of the new town areas in future.

Mrs. Margaret Ewing (Moray)

As one who has lived in, worked in, and at one stage had the honour of representing, one of the new towns, I am appalled by the Minister's proposals. Does he not accept that one of the greatest strengths of our new town communities has been the sense of identity and community that was fostered so carefully in them? Where will that sense of identity and community be respected in the proposed local development companies and the proposed sell-off of community assets?

Mr. Lang

I believe that a sense of community is to be found not only in new towns but in all other towns and cities around Scotland. When the new towns no longer have the special status that they have enjoyed in the past, I believe that the maturity and sense of community that they achieved will be sustained and carried forward into the future. Nothing that we are doing will undermine that.

Mr. Bill Walker (Tayside, North)

Does my hon. Friend agree that, while we in Scotland have welcomed the development of the new towns, there has always been a feeling in the old towns and boroughs that the new towns have advantages not enjoyed by others that have been established for much longer? My hon. Friend's proposals will provide more of a level playing field, and other towns will now enjoy some of the advantages that may formerly have been the sole benefit of new towns. Does my hon. Friend also agree that the introduction of private sector enterprise, skills and initiative will help the new towns to build on what they already have?

Mr. Lang

I agree entirely with my hon. Friend. The new towns are extremely important to the economy of Scotland. Over the last seven years, some 40 per cent. of inward investment has gone to them. That has created over 30 per cent. of the jobs that have been derived from inward investment. We are keen to foster and preserve that kind of achievement in the new arrangements. I am grateful to my hon. Friend for his support of them.

Mr. Adam Ingram (East Kilbride)

The 45,000 tenants of the new towns in Scotland and the 250,000 people who live and work in the new towns will view the statement with anger and dismay. Will the Minister give an assurance that the assets will be transferred at full market value at the time of wind-up? Will he also confirm that he is saying to new town tenants that on wind-up they will not be allowed to choose the district council as their landlord?

Mr. Lang

I believe that, far from being angry, the tenants will be pleased that they are not being pressed to make a decision on their future housing, given the uncertainty about their preferences. I canot tell the hon. Gentleman what the value of the assets will be at the time of wind-up, but he may rest assured that the Government's purpose is to secure an appropriate value for them. That value will reflect what the market is willing to pay. There is absolutely no mystery about that.

Mr. Robin Cook (Livingston)

Does the Minister not appreciate that it is hardly surprising that new town residents are uncertain about which tenure they wish to have, given his refusal to come clean about the choice that will be available to them? If it is indeed the case that the figures that he has received show that less than half would wish to choose the district council, why is he so afraid of putting that choice to every tenant of the new towns? Does he not appreciate that the Government's rhetoric about tenants' choice will sound like humbug to them if he rules out the one option that the largest single body of tenants would wish to exercise?

Mr. Lang

The hon. Gentleman seems not to have heard what I said. We have not ruled out the district council as an option. We believe that all the options must be considered at the appropriate time. What is plain is that the vast majority of tenants have not given adequate thought to the matter. They need to be made more aware of all the options that will be open to them.

Mr. Norman Hogg (Cumbernauld and Kilsyth)

The statement will be deplored by the people who live and work in the new towns, not least the highly professional staff who administer the new towns. Is the Minister able to say a little more about what will happen to those highly professional people? What steps does he intend to take to ensure that they are retained in the service of the new towns until wind-up in order to maintain the efficiency to which the new towns have become accustomed?

Mr. Lang

As the hon. Gentleman will have heard, wind-up will proceed over a period of years, with the last new town completing wind-up some 10 years or so from now. During that time, each new town will approach the matter of divesting itself of some of its activities—by hiving off or by the privatisation of functions—in a different way. There will be opportunities for employees of the new town corporations to move out with the functions that they fulfil. There will also be a measure of natural wastage and retirement, and even early retirement. The redundancy payment arrangements, supervised by the Whitley council and the Scottish National Joint Council agreements, will of course be honoured. In the meantime, we have already given the new towns permission to exercise the appropriate use of retention provisions for key workers.

Mr. David Lambie (Cunninghame, South)

As the Member of Parliament who represents Irvine new town, I, too, wish to express my anger about the statement which will lead to a rip-off of public sector assets in the new towns. I am glad that the Minister confirmed that the wind-up will be phased. Will he also confirm that the wind-up of Irvine new town will start in 1996 and that it will not be completed until 2000? I am quite happy about that, because there will have been a general election before that which will return a Labour Government.

I hope that the Opposition Front-Bench spokesman will confirm today that a Labour Government will rescind the statement and continue the build-up of the new towns.

I am glad that the Government are considering the possibility of a management buy-out for the private local development companies. Will they guarantee that Strathclyde regional council or Cunninghame district council will be allowed to hid for Irvine development corporation? Every survey carried out by Cunninghame district council and every ballot among the tenants of Irvine new town shows that more than 90 per cent. of the tenants want the district council as their future landlord if they are taken away from Irvine development corporation. Will the Minister confirm that if those figures are verified in any future survey, the tenants of Irvine new town will be allowed to choose Cunninghame district council as their landlord and will not be handed over to the wolves of Scottish Homes?

Mr. Lang

I am happy to confirm to the hon. Gentleman that the wind-up for Irvine will start in 1996, by which time he will probably be resting at home with his feet up or in another place watching our proceedings. In the meantime, there is a certain amount of work to be done in Irvine. It is clear from the survey that the tenants are uncertain about their future, and if they were invited to choose now, a very small proportion—fewer than one in five—would choose a district council. That underlines our conviction that it is right not to make a firm decision now, but to give the tenants the opportunity to find out more about the alternatives open to them.

Mr. Henry McLeish (Fife, Central)

I am sure that the people of Glenrothes will be dismayed, disappointed and bitterly angry at the Minister's statement. They will feel that it is a betrayal of 40 years of success and achievement in Glenrothes. They will also find the statement breathtaking in its contempt for local authorities, the staff, the tenants and the residents of Glenrothes. Will the Minister tell the House on what model he is basing the private sector company that will take over the industrial assets of the new town? If the three-year time scale is not appropriate because of the problems involved, will he be willing to reconsider that part of today's statement?

Mr. Lang

Far from our indicating contempt for local authorities, in many ways the role of the district council will be enhanced as a result of the proposals. Local democracy will be far more complete than it is now, as it has often been said in the past that development corporations stand in the way of local democracy. In many aspects, such as special needs housing, the housing of homeless persons and the possibility of taking over community assets, the district council will have an important role to play. The local development company will be a private sector company with share capital and articles of association. It will be commercially driven and will be a normal company.

Mr. Harry Ewing (Falkirk, East)

Referring specifically to the industrial and commercial aspects of the proposals announced by the Minister of State, will regional and district councils be allowed to tender to purchase those industrial and commercial assets of the new towns, and if not, why not? Is it true that Mr. Bill Hughes of the CBI has been given a specific role to attract interested parties to purchase those industrial and commercial assets? Finally, is the Minister aware that a fair number of people in prisons throughout Scotland who have been sent there for corruption will feel hard done by tonight?

Mr. Lang

I am not quite sure what the hon. Gentleman meant by his last remark, but perhaps that is just as well.

In regard to local authorities bidding for commercial and industrial assets, we are considering the Widdicombe prosposals on the economic role of local authorities and will make an announcement in due course. I do not envisage a regional council or local authority forming the basis of a bid for a private sector company. That does not seem to be an appropriate measure. A private sector bid, put together by business men who have an awareness of these matters and commercial and enterprising drive, would be more appropriate.

Mr. David Marshall (Glasgow, Shettleston)

Contrary to the Minister's opening remarks, there is nothing particularly Scottish in this statement, only particular contempt for the Scottish people. The statement smacks of potential corruption and asset-stripping. Will the Minister give a cast-iron guarantee that no tenants of new town houses will have their homes sold to private landlords without their consent?

Mr. Lang

Perhaps I may first be allowed to refer to the point made by the hon. Member for Falkirk, East (Mr. Ewing) about Mr. Bill Hughes. It is nonsense. I am not aware of any reference to Mr. Bill Hughes being involved in the disposal of these matters.

As for the tenants of the housing corporations, we are not ruling out the option of possible transfer to the district council at a later date. However, we are saying that now is not the time to take a decision in favour of that or any other option. The important point is to make the range of options clear to tenants, to increase awareness and understanding of the various forms of diversification of tenure and the possibility of increasing ownership—with 40 per cent. of tenants in new town houses wishing to buy their homes—and to ensure that all those matters are fully explored before final decisions are taken.

Mr. John McAllion (Dundee, East)

The Minister has already admitted this afternoon that the two thirds of tenants who wish to stay with the new towns are to be denied that choice and instead, are to be transferred forcibly to Scottish Homes on wind-up.

Another Minister has admitted that Scottish Homes will be set targets, including the target of disposing of 60 per cent. of any houses acquired within three years. Given that the tenants are to have no choice about staying with the new towns, about being transferred to Scottish Homes on wind-up and about being moved on by Scottish Homes into the private sector, how can the Minister continue to defend the idea that the Government's policies are about increasing choice to tenants?

Mr. Lang

Many tenants of new towns have exercised the choice in favour of private ownership, which has risen from 8 per cent. a decade ago to over 50 per cent. now over the five new towns and to over 50 per cent. in four of the five new towns. Forty per cent. of the remaining tenants have expressed interest in buying their homes. That is an exercise of choice which is highly desirable.

The hon. Gentleman asked me about tenants being forced to leave the development corporation. When the development corporation is finally dissolved, they will not, of course, be able to remain tenants of the development corporation and we have, therefore, provided for Scottish Homes to take over the remaining tenants who have not exercised other options by that time.

Mrs. Maria Fyfe (Glasgow, Maryhill)

Will the Minister describe a little more fully what he means by an appropriate valuation for the assets that are to be sold off? Will it have any resemblance to Lady Porter's valuation of a Westminster cemetery? Will he also describe what impact the proposals may have on the rent that tenants in the new towns have to pay? What impact will the proposals have on the job conditions and pay of those who work at places such as sports centres? The Opposition feel that the proposals lack rigour and seem to provide great dangers for the future existence of many of those facilities.

Mr. Lang

I see no reason why the job conditions should be affected by the change. Rent levels are covered by existing leases and will not be affected directly by the proposals affecting the new town. There will be a value of assets that the market will be able to sustain. I cannot tell the hon. Lady what that market value will be. That realistic appraisal of the value of the property will guide the sale price at the time.

Mr. Tam Dalyell (Linlithgow)

In his statement, the Minister said: I know that the corporation staff are anxious to press ahead with these programmes. Which staff? How does he know? Has any ballot been taken? People working in Livingston are gravely worried about the future.

The Minister also said: At wind-up, when stage two is reached, the option of a partial transfer to district councils is not ruled out. Will he answer the question of my hon. Friend the Member for Livingston (Mr. Cook) about whether each individual tenant has a right to an option?

Mr. Lang

The hon. Gentleman will know that I and my Department have close and continuing contact with the new towns. It is clear that they are anxious to complete the development profiles. We are seeking to enable them to do that by phasing the wind-up processes as we have arranged. We have made it clear that we are not ruling out the district council as an option for tenants, but we are equally taking the view that now is not the time when there is the need or the desire to take a decision one way or the other.