Urban Regeneration

HC Deb 19 December 2000 vol 360 cc267-316

[Relevant documents: Sixteenth Report from the Environment, Transport and Regional Affairs Committee, Session 1999–2000, on the Implications of the European Commission Ruling on Gap Funding Schemes for Urban Regeneration in England, HC 714, and the Government's response thereto, Cm. 4923; and The Department of the Environment, Transport and the Regions: Annual Report 2000, Cm. 4604.]

Motion made, and Question proposed, That a supplementary sum, not exceeding £81,746,000 be granted to Her Majesty out of the Consolidated Fund, on account, for or towards defraying the charge for the year ending on 31st March 2001 for expenditure by the Department of the Environment, Transport and the Regions on payments to the Housing Corporation: Housing Revenue Account Subsidy; grants towards and advice on the renewal of private sector housing; the Estates Renewal Challenge Fund; homelessness, including the Rough Sleepers Unit; housing management; rent and leasehold services; support for the UK construction industry; planning and minerals research and other planning programmes; payments to the Ordnance Survey (Trading Fund); the London Development Agency; Regional Development Agencies; the New Deal for Communities and other help for deprived neighbourhoods; Single Regeneration Budget; Urban Regeneration Agency (English Partnerships); Housing Action Trusts; Estate Action; Groundwork; coalfields regeneration; European Union agency payments including those for ports and railways in Wales; European Regional Development Fund projects not funded by or in advance of receipts; Countryside Agency; Nature Conservancy Council for England; National Parks Grant; bulk pensions transfers; and sundry other grants-in-aid, grants and payments in support of housing, construction, regeneration, regional policy and countryside and wildlife initiatives, including related research, publicity and publications.—[Mr. Allen.]

7.13 pm

Mr. Andrew F. Bennett (Denton and Reddish)

I am delighted to have the chance to debate the report of the Select Committee on the Environment, Transport and Regional Affairs on gap funding and the Government's response to our report. I thank all those who helped with the report, including those who sent in evidence or agreed to be questioned by the Committee, our specialist adviser David Lunts, and all the Committee staff.

In politics, I usually have respect for my opponents. Although they may be misguided or just plain wrong, they usually believe very firmly in what they are doing. Only occasionally, one comes across someone who can be described as really evil—enjoying power for its own sake and using it in an entirely capricious manner with no concern or regard for the consequent destruction and misery. The European Union Competition Commissioner, Commissioner Monti, is such a man.

In deciding to stop the United Kingdom's gap funding programme, Commissioner Monti has dealt a blow to much of urban Britain that is equal to the damage that was caused in many of our urban centres by Axis bombing during the second world war. He has done so because of a perverse belief in an economic theory of competition that is totally divorced from reality. As we said in our report, The Commission's decision is perverse and bizarre. The previous Competition Commissioner found the Partnership Investment Programme acceptable, but, on the arrival of Commissioner Monti, an academic with renewed zeal and determination to search for breaches of State Aid rules, the original Commission decision was over-turned. We go on to state: Moreover, the Commission's view that it is acceptable for the public sector to bear risk using tax payers' money but not the private sector is illogical. We must conclude that the European Commission took its decision casually without regard for the consequences of its action. As witnesses have stated, having made this disastrous decision, the Competition Directorate General now considers that it is our problem, not the Commission's. In paragraph 46, we state: It is extraordinary that while the Regional Policy Directorate General of the Commission spends immense sums on regional aid, the Competition Directorate could destroy that aid.

I should explain the background. For the past 30 years, more and more sites in urban Britain—particularly in our big cities, urban conurbations and small towns, and sometimes even in villages—have outlived their original purpose. However, it has been too expensive for anyone to do remedial work on that land and to restore buildings for new uses on a purely commercial basis. To put it simply, the possible rent from such new development would not cover the costs of the development itself.

Consequently, the Government, using English Partnerships, came up with the partnership investment programme, which is more commonly known as gap funding. When English Partnerships felt that the PIP scheme could help with urban regeneration, it offered a grant intended to bridge the gap between the cost of the development and the potential rent generated by the development.

Such schemes have been increasingly important in the past 10 years, under both the previous Administration and the current one. Many witnesses emphasised to us that not only were the schemes important in their own right, but they acted as seedcorn to encourage other developers to develop nearby sites on a purely commercial basis.

For much of 1997, 1998 and 1999, Commissioner Monti and his officials were questioning whether such schemes broke European Union competition policy. This time last year, he scored a double-whammy by deciding that the scheme was illegal under EU rules. At a stroke, he destroyed the main plank of the United Kingdom's urban regeneration policy and reinforced a view which is very strongly held by many of my constituents that the EU is a bureaucrats' bonanza.

I have to say that I am disappointed that United Kingdom Ministers did not make a much greater fuss about the decision. I appreciate the difficulty that 300 schemes were in the pipeline and could, without a compromise, have been put at risk. I understand those pressures.

The compromise was that, although no new schemes could be approved, the 300 schemes in the pipeline could continue. However, that seems to be absolutely illogical. Either the schemes are legal and we should be able to continue with them or they are illegal. We cannot have such a compromise. Moreover, there is always the risk that someone will go to the Court of Auditors and it will decide that money provided to the schemes has to be repaid.

The Commission suggests that, instead of the schemes being operated by private companies, with state aid bridging the gap in future, they will have to be run by the Government, the regional development agencies or other local bodies such as councils and regeneration companies. Such a proposal seems totally illogical. Those bodies would have to lay out the full cost of running a scheme, and then sell the scheme on at a loss. The problem is that the public sector will have to find 10 or even 20 times as much money to get the schemes going as they would if they merely had to bridge the gap.

I know that the Government have given the RDAs some extra money and that schemes are in the pipeline, but serious problems remain. I do not believe that the RDAs have the staff or the skills to pick up all the good schemes that should come forward.

In addition, there is doubt about whether the RDAs can be effective in regions outside assisted areas. We need to emphasise that some of the most successful gap funding schemes have been in towns that are totally outside the assisted areas. Cities that are very prosperous in general often have a rundown inner core. Gap funding could make a major difference to such areas.

I shall not detain the House, but I hope that, when she replies to the debate, my hon. Friend the Minister will say where the negotiations with the EU, and particularly with Commissioner Monti, have got to. How soon will a replacement scheme be in place? What is happening to ensure that the RDAs have the skilled personnel to carry out schemes in future? What is being done to avoid the waste that occurs when private companies develop people's skills for the schemes? Will they be able to offer the RDAs contracts to do the work for them?

In their response, the Government said that they were looking at compulsory purchase order procedures, but a key element in gap funding has been the way in which private developers have been able to put together packages of land. I hope that the Government will make it clear that the RDAs will be able to use speeded-up CPO procedures to secure the land assembly that is so crucial.

Will the Minister say whether the new schemes will be available in all those parts of the country where otherwise thriving cities have disadvantaged urban communities? Will they be available only in development areas? Will there be limits on the amount of funding made available to them? The suggestion is that, even in development areas, the amount of state aid will be severely limited.

Finally, does the Minister really appreciate the anger felt by so many people in Britain, and the contempt that they have for the behaviour of Commissioner Monti? He has acted out of academic spite, and destroyed an important part of the lifeline that would have secured urban regeneration in Britain. I hope that the Minister will get the message over to Brussels that most of us are disgusted with the behaviour that we have seen.

7.23 pm

Mr. Don Foster (Bath)

I am very pleased to follow the hon. Member for Denton and Reddish (Mr. Bennett), and I share his concern about the issues that he has raised in respect of gap funding. Like him, I look forward to the response that the Minister will give later. I hope that the hon. Gentleman will not mind my not pursuing the points that he raised, as I wish to address my remarks predominantly to the other report produced by the Select Committee. I also want to make some more wide-ranging remarks about urban regeneration.

I was delighted by the words employed by the Deputy Prime Minister when he launched the White Paper entitled, "Our Towns and Cities: The Future, Delivering an Urban Renaissance". He said that he wanted sustainable communities … where economic prosperity and social justice go hand in hand. Liberal Democrat Members entirely agree with that. More importantly, the Deputy Prime Minister appeared to agree with another key Liberal Democrat analysis when he said: To be successful, plans need to be shaped by local people for local people … local people must be fully engaged from the outset. We on the Liberal Democrat Benches entirely endorse that approach. We also agree with what the Deputy Prime Minister went on to say: A good council is one that listens to, leads and builds up local communities—[Official Report, 16 November 2000; Vol. 356, c. 1086.] Having endorsed all that, we want to put on record the view that nothing could have been more counter-productive over the past 30 years than the central Government belief that they knew all there was to know about urban regeneration, and that they could hand solutions down to the grateful poor in our decaying cities.

Yet, having criticised central Government, it is only fair also to express some criticism of local government. The same top-down view can be just as harmful when local authorities decide that they have all the answers for the communities that they serve. Local authorities are also guilty of imposing their solutions, of bulldozing existing homes and of creating huge housing developments where people are isolated from their neighbours. In some cases, that has given criminals plenty of space in which to hide from and evade the law.

In principle, at least, there appears to be much agreement between the Government and the Liberal Democrats, but what will happen in practice? The Deputy Prime Minister's speech on 16 November was full of promise, but what about the delivery? This Estimates debate is about money, so we must consider what is being done with the money already devoted to the areas in question, and what will be done with the money that is to be spent. Will that money be spent wisely? Is it even going to be spent at all?

I shall deal first with the question of how the money will be spent. For some time, the Government have trailed their action plan for urban renewal. Their response to the 11th report of the Select Committee on the Environment, Transport and Regional Affairs claimed: The action plan for neighbourhood renewal due to be published later this year will deal more specifically with the action needed to tackle the problem of deprived areas. Later in the same response, the Government were a little more specific and said that the action plan on neighbourhood renewal was due to be published before the end of the year On 16 November, the Deputy Prime Minister went even further, and said that we have set up a neighbourhood renewal fund of £800 million and will shortly be setting out our action plan for neighbourhood renewal.—[Official Report, 16 November 2000; Vol. 356, c. 1088.] Five weeks have passed since then. The date is 19 December, and we are nearly at Christmas. As far as I am aware, there is still no sign of the action plan. I hope that the Minister will say when that much awaited plan will be made available.

Even when it arrives, it will still be only a plan. The question then will be whether the plan, having been made available so late, will be able to deliver much before the next general election.

The Deputy Prime Minister was right to stress that if we want to have urban regeneration we desperately need to ensure that the relevant key workers—police, health workers and social workers—are in place and are able to buy homes. The right hon. Gentleman said that £250 million would be allocated over the next three years for that purpose and that the Government would set out details following on from the housing Green Paper. Even more recently, another Government document referred to around 10,000 key workers, particularly teachers, nurses and the police. I hope that the Minister will be able to say whether a definitive list exists of who those key workers will be. We know that health service workers will be eligible, but will that mean that a person working in a general practitioner's health centre practice will be provided with support? We know that teachers will be helped, but will the much more poorly paid and vital teaching assistants be helped? Unless those matters are sorted out quickly, there is no chance of action before the election.

The hon. Member for Denton and Reddish made an important point about what the Government have said in respect of compulsory purchase powers. The judicious use of such powers will be very important in future urban regeneration. The Deputy Prime Minister has said that new legislation will ultimately be provided, yet there is no reference to any legislation to deal with compulsory purchase in the Gracious Speech. So presumably, "ultimately" means that we will have to wait until after the election at least for some movement.

Mr. Bennett

I am sure that the hon. Gentleman has looked at the Government's response in which they make it clear that it is possible to make a lot of progress on CPOs without primary legislation, simply using the regulations.

Mr. Foster

I have, and I am grateful to the hon. Gentleman for pointing that out. He will recall that in his speech of 16 November, the Deputy Prime Minister acknowledged that there may be a need for further legislation for some of the more imaginative uses and schemes that he—and, I hope, the hon. Gentleman—want introduced. The Deputy Prime Minister has acknowledged the need to consider additional legislation. My question is whether we will see any reference to those changes, and even consultation on them, this side of the election.

It would be wrong to suggest that the Government have not been taking action on urban renewal. The real question is what is happening, and whether it has been happening in the right place. I suspect that if I asked right hon. and hon. Members which area of the country was fortunate enough to have eight regeneration projects, they might suggest Moss Side in Manchester, Tower Hamlets or Peckham. In fact, the answer is the county of Herefordshire. It has managed to acquire eight regeneration projects, despite being 196th in the index of local deprivation. Many local authorities which are higher up that list because their areas are far more deprived than Herefordshire have far fewer urban regeneration projects, and some have none.

Chesterfield, for example, which is 91st on the index, has no Government initiatives whatever. Newcastle-under-Lyme, which is 19th on the list—near the top—has only two projects. That is a quarter of the number operating in the far less deprived Herefordshire.

There is, sadly, no correlation between regeneration initiatives under the Government and levels of deprivation. We could say that credit should go to the officers and members of Herefordshire county council for all their hard work on successful bids. However, even the bidding scheme has got out of hand. Council officers are spending more and more time preparing detailed bids for funds of one sort or another through this plethora of schemes. Yet on the whole, that time is wasted and should be spent on service delivery.

The research shows that the majority of bids are unsuccessful. In some areas it is rather more than that. For the European regional development fund, 73 per cent. of bids have been successful. That seems good news until we realise what they were successful in achieving. Even those which were successful got only 37 per cent. of the money for which they had bid.

There is a plethora of different schemes. In my office, recently, we looked at 53 of the schemes introduced by the Government. We discovered that there is a huge and frightening overlap that makes it difficult for people even to know which bid to make for a scheme. All sorts of anomalies have occurred. There was a wonderful example in Staffordshire, where a bid was put in for a crime reduction scheme to help the local community. That included building a path 200 yd long. Because a small part of the path fell outside the precise boundary of the single regeneration budget scheme, the whole scheme was denied.

Other anomalies make it difficult in some of the areas that are not so high on the list of deprived areas. I would never claim that my constituency of Bath is particularly deprived. However, like many other right hon. and hon. Members who represent apparently affluent areas, there is within my constituency a number of deprived but small areas. It is often difficult to find a Government scheme that will enable funds to be provided to help the regeneration of those comparatively small areas.

I recently had a letter from Mr. Alex Schlesinger, chairman of the London road partnership in Bath. He wrote a couple of weeks ago expressing his concern about the lack of availability of funds for the regeneration of relatively small areas such as the Snow Hill estate on the London road. He had been told by the Government office of the south-west that funding would not be available for such an area because it was statistically insignificant. I can assure the Government office that the deprivation in that area is not insignificant.

Mr. Schlesinger's letter asked what alternative sources of funding the Government had in mind particularly since past Administrations have made it practically impossible for local authorities to regenerate such areas without financial assistance from other sources.

Ms Candy Atherton (Falmouth and Camborne)

Will the hon. Gentleman give way?

Mr. Foster

I will happily give way, especially if the hon. Lady has an answer to my constituent's concern.

Ms Atherton

The hon. Gentleman talks about the south-west, where the regional development agency is making massive strides in Cornwall. Is he suggesting that the more deprived areas of Cornwall should be giving money to Bath?

Mr. Foster

The hon. Lady entirely misses the point. The question is how we define a deprived area. Is an area considered deprived only if it is very large? That is the way in which the current system operates. I hope that she will acknowledge that, for example, relatively small areas such as Snow Hill in my constituency—I am sure that she has similar estates in hers—need a great deal of support, well beyond the resources of the local council to provide. Yet, because of their size, they are denied access to the many different initiatives that have been introduced by the Government.

I hope that the Minister will respond specifically to my constituent's concern, which is no doubt shared by many other right hon. and hon. Members, as to what will be done to provide funding for those smaller areas. At the same time, we welcome the support given to the hon. Lady's constituency and to Cornwall itself, which I recognise is a particularly deprived part of the country.

Some 2,500 projects have stemmed from the 53 initiatives to which I have referred, and there is huge overlap between the schemes. The other problem is that the Government have a tendency to launch project after project, announcing how much money will be available for them, but we never subsequently find out what has happened to the money that has been announced. For instance, the Government announced that £112.5 million would be made available for the new deal for communities project. However, only £48.7 million was spent, because it was difficult for people to find their way through the bureaucracy and the bidding scheme within the required time scale.

The Deputy Prime Minister has frequently referred in the Chamber to the Coalfields Regeneration Trust and its work. Of the budget of £27.7 million allocated to that project, £26.7 million is unspent. It has spent only 4 per cent. of its budget within the time frame.

The Minister for Local Government and the Regions (Ms Hilary Armstrong)

indicated dissent.

Mr. Foster

The Minister shakes her head but my figures are direct from the Library. If she wishes to challenge them, I will be interested to hear her figures. I will give her another figure. Of the £80.8 million that the sure start project was allocated, it has spent only £19 million in the time frame.

Often, the money cannot be carried forward to subsequent years. Early excellence centres spent only 41 per cent. of the budget and employment zones are underspent by a total of £27 million. The single regeneration budget is underspent by £44.5 million in the past three years. The European regional development fund is underspent by a staggering £250 million, which is more than 10 per cent. of its budget.

I hope that we will hear from the Minister whether the Government plan at least to allow those underspends to be carried forward to subsequent years. I hope that they will recognise that one reason why the money has not been spent is because of the bureaucracy of the system—not because there is no need for it—which makes it difficult for people to get their hands on it as quickly as they would like. I hope that it is not a case of the Government making announcement after announcement, but not being concerned about what happens next.

Mr. Mike Hancock (Portsmouth, South)

Before my hon. Friend moves on, is there any evidence to show that underspends can be carried forward in certain circumstances? If so, will my hon. Friend give us examples? In my experience, it has been difficult to carry forward any of the money.

Mr. Foster

My hon. Friend asks me to cite examples. No doubt the Minister will talk about the Coalfields Regeneration Trust in her reply, which can carry forward the money. Unfortunately, many of the schemes to which I referred are not allowed to do so under current regulations.

Notwithstanding the problems, there are a number of good examples of regeneration schemes, which are particularly successful when local people have been directly involved. In the past few weeks, I have had the opportunity to spend a number of days in Liverpool looking at some of the work there, which covers a wide range of areas that encompass what we would define as urban regeneration.

In Liverpool, area committees play an important part and make many decisions that would in the past have been made by the council, liaising directly with service providers, establishing a variety of different partnerships and even employing people directly.

I was particularly impressed by the work of the North Liverpool Regeneration Company, which has set up a number of projects to employ people and give them opportunities to develop their talents and to make good use of premises that have been left empty for far too long. I was impressed by the work that it had done on anti-social behaviour in a unit that has brought together, in the spirit of all regeneration work, a range of different partner—education, housing, the youth service and many other agencies.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich)

I am not clear whether the hon. Gentleman is saying that some schemes work well and some people can get through all the so-called bureaucracy, but that the money is not going to Bath.

Mr. Foster

I have a high regard for the hon. Lady, but she makes a strange point. I have been clear. So far, my argument has been that there are too many projects that overlap and that the Government announced large sums of money that, sadly, because of the bureaucracy of the system, are not fully spent, which is a waste. The bidding scheme for the money is hugely bureaucratic, which makes it difficult for people to get their hands on it. Despite that fact, it would be wrong to deny that there are some imaginative and exciting schemes from which we can learn. I was citing an example in Liverpool that builds on the approach for which the Deputy Prime Minister has called—involving local people to determine the way forward. I hope that the hon. Lady will agree with me and certainly with the Deputy Prime Minister that often—

Mrs. Dunwoody

I always agree with my right hon. Friend.

Mr. Foster

The hon. Lady says that she always agrees with the Deputy Prime Minister, but I have been in the Chamber on so many occasions when that has not been the case. On this occasion, she probably would agree. The Deputy Prime Minister believes—and I agree—that the people who live with the problem are best placed to find solutions, given support.

That is certainly the case in Norris Green in Liverpool, which urgently needs regeneration. The local community has come together and developed the ideas. With the support of the council, it has been given the opportunity to appoint architects, lawyers and advisers to help in the development of what seems, on the surface at least, to be an exciting way forward.

If the hon. Lady agrees about that, I hope that she will share my concern about another area where a different approach has been adopted. I have also visited Newcastle upon Tyne, where I was told about a so-called impressive scheme. The council introduced, "Going for Growth", and consulted the people, asking if they wanted improved public transport, job opportunities and green areas. Of course, the local people said yes. Only when they were confronted by journalists and television camera crews asking them what they thought about plans to bulldoze their homes did they begin to look at the so-called wonderful scheme in more detail and to discover that, although no mention of it had been made in consultation, it involved the demolition of up to 6,500 homes. Clearly, that is an example of where local people have not been directly involved as they should be.

The hon. Lady has given me an opportunity to summarise my arguments. The principle of what the Government want to achieve is right. I am genuinely concerned that the mechanism that has been adopted leaves us with too many diverse schemes with different funding regimes and with a complex bureaucracy, which is not the best way to ensure that the much-needed regeneration of our urban areas takes place.

7.48 pm

Mrs. Louise Ellman (Liverpool, Riverside)

I welcome the Government's comprehensive approach to urban regeneration. This must be the first time that explicitly, as a matter of policy, economic, social and environmental issues have been brought together and tackled together in an integrated way. It is the first time that a Government have recognised the critical importance of co-ordinating and dealing together with approaches from Europe, central Government, the region, local authorities and communities in the locality.

The real question is how effective the approach has been. During the past year, the Environment, Transport and Regional Affairs Committee has looked at what has been achieved and at the problems, and has tried to suggest how matters might be improved.

Liverpool is already benefiting from that approach. Unemployment in my constituency—the area with one of the highest unemployment rates in the country—has fallen by more than one third since the general election and is rapidly improving. There is new confidence and investment. Anyone who walks around Liverpool cannot fail but see the increased amount of development, construction work and activity and feel the buzz of the new confidence that resonates around the city.

Liverpool Vision—the first urban regeneration company to be set up after the Rogers report—is starting its vital work in the city. The company is working hard with the newly formed regional development agency—which the Opposition tell us they would abolish, if they have the opportunity to do so—Liverpool city council, English Partnerships and a wide range of private sector partners. It offers Liverpool a unique opportunity for urban renaissance by investing in the city centre and developing it as a spearhead of growth. The company deserves support. It will be successful if it is able to call on funding and support from all the areas that I mentioned—Europe, the Government, the region and the locality—to enable it to fulfil its major challenge.

The importance of businesses in our economy—specifically in Liverpool's economy—has been recognised. Much of that is due to the pioneering work of the Mersey side special investment fund, set up in 1996 with greatly valued objective 1 European funding, Government funding through the single regeneration budget and private sector investment. Since then, the MSIF has generated investment of more than £84 million for small and medium-sized enterprises, supporting about 4,800 jobs.

Following that lead, the North West development agency is promoting its venture capital fund. I very much welcome the Government's initiative in setting up the Phoenix fund and announcing incentives in the pre-Budget report to back inner city enterprise, providing community-based funds to support businesses in inner cities throughout the country—specifically in Liverpool, I hope.

The knowledge economy is being promoted. After the disappointing decision about Daresbury, major efforts are being made and I hope that regional projects of great economic and scientific importance—including, among others, Liverpool university's centre for accelerator science, imaging and medicine project, and John Moores university's proposals for the development of telescope technologies—will go ahead, and will receive support from the north-west science committee, which is currently considering them.

The North West development agency and English Partnerships are certainly showing the importance of land assembly in promoting brownfield development. The additional funding for RDAs by the Government, together with the increased flexibility in its use, will enable them to become more important in supporting businesses, the economy and society.

Mr. Crispin Blunt (Reigate)

Does the hon. Lady acknowledge that the ending of the partnership investment programme, set against the extra money that has been made available for the RDAs, sets £3 billion alongside £600 million? That is the scale—the order of magnitude—of the hole that has been punched in urban regeneration by the effect of the ruling of the European Commission.

Mrs. Ellman

I accept that the increased funding and flexibility provided to RDAs by the Government should be used to increase the capacity of the agencies. I am extremely unhappy at the prospect that it might be seen as a complete replacement for the previous private sector funding. I shall return to that subject later in my speech.

Major issues must be addressed—but in the context of the progress and improvement that we are experiencing in my constituency, in the north-west and throughout the country. I agree with hon. Members who point out that national, regional and local initiatives must be more effectively co-ordinated. There are a plethora of initiatives; each is much to be welcomed in its own right, but there must be much more national, regional and local coherence. More explicit consideration should be given to the local and regional implications of national decisions. A directly elected north-west assembly working with strengthened local government would be one step in that direction. Will my right hon. Friend the Minister for Local Government and the Regions tell us how such issues might be dealt with in the interim before such an assembly is set up?

In his important comments at the opening of the debate, my hon. Friend the Member for Denton and Reddish (Mr. Bennett) referred to one of the other vital issues that must be resolved—the problem of the removal of gap funding. The change in the interpretation by the European Commission of state aid poses a major problem for regeneration—certainly in my constituency and, I suspect, in many areas.

The ruling on the removal of gap funding, already decided by the Commission, has had an important and damaging impact on my constituency. Important developments in Liverpool, such as those in Concert square, Queens square and Speke-Garston, were dependent on gap funding in the past. I am extremely concerned as to what its removal might mean for the future. I do not accept that the increased funding for the RDAs—welcome as it is—will provide a complete replacement for gap funding. Will my right hon. Friend give us information on the Government's efforts to bridge that gap?

The situation is even more serious. The principles on the interpretation of state aid adopted by the Competition Directorate of the European Commission have been extended and are being applied to structural funding. I understand that, under the objective 1 programme currently being considered for Merseyside, about 14 projects specifically designed for Liverpool have been referred to the state aid unit of the Department of Trade and Industry. Will my right hon. Friend confirm whether that is correct? Can she tell us what is happening?

I am extremely anxious, because those projects include an important proposed development for my constituency and for the inner city—a business centre in Toxteth. That development has been able to attract essential private sector investment that had been lacking in the past. The private sector is willing to invest, yet I understand that that project and others are being closely scrutinised by the state aid unit because of concern about EU rulings on state aid. The matter is extremely important. Other projects are also involved—the north Liverpool resource centre and the Scotland road gateway. Will the Government resolve the matter with great urgency?

Hon. Members have referred to the problem of derelict property in regeneration. That is of special importance in my constituency. I praise the Liverpool Echo for its "Stop the Rot" campaign, which has highlighted that critical problem in Liverpool, although there are wider ramifications. What progress has been made on changing the compulsory purchase order regime?

Other bodies also have responsibilities—including local authorities, which are responsible for addressing issues of immediate concern. I call on the property-owning company, Frenson, to face up to its public responsibilities in the Ropewalks area of the city centre. Frenson is sitting on property, allowing it to rot. When it is let to tenants, rents are forced up wholly unacceptably. It is not good enough to leave listed properties in Seel street, listed merchants' houses in Duke street and the Scandinavian hotel to decline. I call on Frenson to face up to its public responsibilities and to assist in the regeneration of Liverpool, not to impede it.

I have drawn attention to several national and local issues. I am convinced that the Government's comprehensive approach to regeneration is right and that the creation of regional development agencies and the institution of regional chambers and regional assemblies is the right way to proceed, but greater focus is needed. I ask the Minister to address those issues nationally and specifically in terms of Liverpool and the north-west.

8 pm

Mr. David Curry (Skipton and Ripon)

I am sorry that I begin my remarks with a small quarrel with an hon. Member with whom I normally agree and for whom I have great respect. The hon. Member for Denton and Reddish (Mr. Bennett) made remarks about Commissioner Mario Monti. The decision that he took was wrong and damaging. I agree with the hon. Gentleman's assessment of the consequences, but I do not think that describing him as evil or somehow power crazed helps the argument. We accord courtesies to colleagues in the House, and it is sensible to do so to people outside as well. No doubt, I shall be labelled as flying my frightful Europhiliac flag yet again, but in the circumstances I will plead guilty.

Regeneration policy has tended to oscillate over the years. I shall not talk about particular cases; my constituency is very much a rural one, but I had responsibility for such matters for four years and the emphasis was on physical regeneration, then on social regeneration and then city challenge and the single regeneration budget. The emphasis is now on social exclusion, and the policy is beginning to come together in the realisation that physical regeneration must go hand in hand with trying to help communities in a more personal sense. As a result, the policy tends to be bitty; it tends to be a bottom-up policy and is difficult to describe in broad, sweeping terms, but we have all learned the lesson that regeneration policies have to be built on a neighbourhood basis. The time is long past when politicians could drop strategies on to communities in the hope that they would work.

We have accepted that design is important. The key to regeneration is creating a critical mass in compact, socially mixed neighbourhoods with a mixture of uses, so that a market is created for public and private services. If no market place is created—in other words, if there is no mass of people who demand the schools, who can serve on public transport and who need the local barber's shop and betting shop—we will not produce those polycentric cities that actually work. It would do no harm to go back and read Jane Jacob's book, "The Death and Life of Great American Cities", which shows what went wrong when the mixed uses and all the informal relationships that existed in neighbours gave way to monochromatic uses.

Mr. John M. Taylor (Solihull)

I am following my right hon. Friend's remarks with my customary interest; he is a man of fertile mind and interesting thought. He knows France far better than I do, and various quarters are dedicated to particular activities in the planning of French cities. How does he reconcile that policy, which clearly works, with what he is saying about multiple-use areas?

Mr. Curry

My hon. Friend would find that many French cities have a zone industrielle on their edge, and people commute out to them. The difference between many British and French cities is that many people live on top of the activities in the cities themselves and the densities of the cities is much greater He would also find that street markets are much more frequent and used by all sorts of people, which makes French cities function better. However, the French countryside is a catastrophe because anyone who is anybody has gone to the cities. That is the fault of Louis XIV. We could have a long dissertation on the consequences of Louis XIV on French rural decay, which still continues today.

Dr. Stephen Ladyman (South Thanet)

I agree with the right hon. Gentleman's comment that we cannot impose solutions on neighbourhoods. Solutions must come from neighbourhoods. It is fashionable to say that politicians cannot impose such things, but does he agree that politicians have a clear role because, in areas of urban blight, communities often have low morale and believe that they cannot contribute to their own regeneration and that it is important that politicians show them leadership to get them to the point where they can contribute to their regeneration?

Mr. Curry

I absolutely agree with the hon. Gentleman. We must not fall into believing the cheerful myth that suggests that regeneration is waiting to happen in every neighbourhood and that if people are given the tools, by gosh, they will be on their way. Some neighbourhoods are pretty grim for all sorts of reasons, and people are very incompetent in those neighbourhoods. That can be seen in the some schools' catchment areas, which I wish to deal with in a moment. Politicians have a job to do; they must try to ensure that people can use the instruments of help that they devise in a way that lasts and creates a cycle of improvement. That is not impossible.

The White Paper and the Pre-Budget statement must be viewed in that context. The White Paper was written by this Government, so it is windy and wordy and there is no grand sweep of ideas. The Minister for Housing and Planning has just entered the Chamber, and he may have had a hand in it because his housing Green Paper, which suffered from similar problems, will have given him good practice. However, that is not necessary a failing; there is much that is welcome, such as the VAT changes for residential conversions, although that is applicable universally and is not specific to inner cities. It could be applied in the smallest village in my constituency, were it relevant. The changed tax treatment for contaminated land is welcome and overdue. The smaller incentives on stamp duty and the 100 per cent. capital allowances to create flats over shops are useful, small changes.

As the hon. Member for Liverpool, Riverside (Mrs. Ellman) said, we still await two key policies—first, the codification and reform on the law compulsory purchase, which will facilitate land assembly. It would be interesting to know whether the DETR has drawn any conclusion from the recent court case that set the Secretary of State's planning powers against the European convention on human rights and threw into doubt the way in which that system operates. Clearly, that will need consideration. Secondly, we await the revision of planning policy guidance 1—the book of Genesis of the planning system that sets the tone for the way in which planning proceeds. To mention what is welcome in the urban White Paper highlights how much policy is still tentative and timid.

The hon. Member for Denton and Reddish referred to the funding problem. As I have said, I agree with his condemnation of the decision that was taken. The RDAs can now invest directly, but that does not provide the answer because it does not produce the leverage, as the hon. Member for Riverside has said. We must be careful that the RDAs do not have too many functions placed on them, otherwise the next phase will simply involve differentiating those functions. I should be interested to know how many of the skilled staff of English Partnerships have gone into the RDAs and how many of them have taken flight into the private sector.

The White Paper does not address the long-term funding issues of the inner city programmes and it fails properly to tackle the perverse workings of the tax system. I do not blame the DETR; it had a noble battle with the Treasury—but a few months from the election, it lost. That is not surprising; we have all had battles with the Treasury, and most of us have lost them. That is the nature of political geometry. However, we have ended up with half a carrot and no stick. Tax on renovation has not been equalised. It would have been sensible to put a levy on greenfield development and 17.5 per cent. VAT is still paid on conversion between uses. The conversion of an inner-city office block into accommodation still attracts 17.5 per cent. VAT. The Government have shown that they have spotted the problem, and have nibbled at a bit of the solution, but there is still some distance to travel.

There is of course a vast land bank of greenfield sites ready for development. The south-east regional planning committee reckons that sites capable of taking almost 225,000 homes have already been earmarked in the south-east. That is a different debate and those of us who represent Yorkshire constituencies ought to be somewhat tentative before we venture into that minefield.

There are still problems with contaminated land. The tax treatment proposed in the Chancellor's statement is welcome, but there are still problems relating to regimes for waste and for water, which are not always working and pulling in the same direction. The Government need to consider such matters in the round if they are to address the complex disincentive that still operates for development on some contaminated land.

To turn to a broader issue, there is a lack of joined-up government. I see in the DETR annual report a chapter picturesquely entitled: The Department's Role in 'Joined-Up' Government, and some very endearing pictures of the ministerial team. However, the joining up between Departments is not immediately apparent. I am glad that the Minister for Housing and Planning is present. He has been busy proposing in his Green Paper rent increases under the formula of the retail prices index plus 0 per cent., which would have shot to pieces many of the development plans of registered social landlords at the time we were being told how important it was that more people lived in inner cities. I see that he has pulled back to a formula of RPI plus 0.5 per cent., which at least shows that he has done some listening.

I turn to the transfer programme. I agree with the Minister that transfer is a central issue. We should not allow local authorities arm's-length companies. They are, on the whole, for rather dismal local authorities that cannot hack it, and we should not give such authorities a way out. However, we need a wider menu.

I want to know the Government's view on proposals for securitisation. It is a way of raising money directly against the rent stream, cutting out the landlord. It is made difficult owing to section 47 of the Local Government and Housing Act 1989, which stipulates that all a local authority's liabilities must be charged against all its assets. Therefore, a council cannot provide security in favour of a particular lender. The Government could help in the short term by amending the 1995 European system of accounts rules. I would be interested to know whether the Government would like to consider securitisation as one part of the menu of getting to grips with the regeneration of housing.

We have all had problems with binding education to the regeneration process. I would have made the same reproach of the Conservative Government because the Department of Education was not even represented in the regional offices. There are many specific initiatives on education, but nobody has successfully married it to wider regeneration issues.

Clearly, DETR Front Benchers are reading their annual report for the first time, since they are entranced by their own photographs in it. I am glad to have been the bearer of such happy tidings. I hope that the cult of personality will not strike too deeply. The pictures are very small, but Ministers can always live in hope.

Many inner city schools with multi-ethnic catchment areas are often characterised by violence against children, parents and teachers. There is a great deal of abuse, much deprivation and enormous disintegration of society in such schools. The kids often do not know where they are going home of a night, and the teachers do not know whether the kids have come to school on a breakfast in the morning. I have never thought of free school meals as a satisfactory indicator of deprivation, but some such schools have a very high proportion of children eating free school meals.

The problem is that, often, parents are incompetent in many ways. Any policy based on an educational strategy that assumes a competent and caring parental force must come to terms with some reality.

Mr. John M. Taylor

In striking such a sound chord, has my right hon. Friend ever given thought to who teaches parenthood? Is it possible?

Mr. Curry

Parenthood must mainly be taught by example, which is why I agree with the Government that the traditional nuclear family appears to represent the best formula for bringing up children—that is not to deny that people who are not part of such a family are perfectly able to bring up successful children.

We should be careful before we load schools up with too many civic responsibilities. Our job as a nation is to make them competitive. If schools are competitive, they are likely to be more competent in dealing with civic responsibilities. If one wants someone to do a job in society, one on the whole finds that somebody who is busy tends to do the job more willingly.

It is impossible to exaggerate the extent to which head teachers of some inner city schools live in dread of losing the three or four middle-class parents whose children make the difference between standard assessment test results that are verging on respectability and those that look catastrophic. The battle that goes on to try to ensure that a few middle-class parents hang on in there and do not send their kids elsewhere is a noble one. It is a measure of the difficulty of the circumstances.

I would like head teachers to be given more power to fire poor quality teaching staff—such as the Monday-to-Friday brigade who have got used to survival as the main essence of the week—and to reward quality staff. I find it inconceivable that people who teach in inner city schools are on the same pay scales as those in the leafy suburbs. Compared with the problems encountered day after day by some teachers in the inner cities, those in the suburbs do not know that they are born.

I would like there to be more support from local education authorities. Some, such as Lambeth, do not even provide supply staff. So schools must go to private sector organisations for supply staff, at great daily cost, in order to replace teachers who are on holiday or taking maternity leave. As a consequence, classes can have three or four teachers in a year.

Dr. Ladyman

Will the right hon. Gentleman comment on LEAs that make the system even worse by introducing selective education and, in my constituency, thereby creating sink schools that are guaranteed to be in the bottom 25 for GCSE results?

Mr. Curry

The hon. Gentleman has asked that question of the wrong Conservative Member. He will recall that we had a ballot in Ripon. We won it because the argument was not between the grammar school and the city school. They were on the same side. The argument was about how we enhanced education in the city school in partnership. It has now become a technology college, its examination results are improving and it has demonstrated, under a committed head teacher—the alpha and the omega of real education—that it can haul itself into contention as a competitive school. I appreciate that the hon. Gentleman holds his views firmly, but we just happened to win the ballot 2:1 because we sought not to divide but to unite people.

I would like a primary school head teacher to be in charge of two or three schools. Much depends on building blocks, structures and being able to ensure that the school knows what it is seeking to do daily. Given the shortage of staff in inner city schools, there is something to commend the most able teachers who want to continue working with children, not undertaking advisory functions but remaining in schools and assuming wider responsibility.

There should perhaps be a link between the secondary school and primary schools. I am amazed by how many secondary schools appear to have no contact with the primary schools before the new kids walk through the main gate on the day they begin secondary education—

Madam Deputy Speaker (Mrs. Sylvia Heal)

Order. I feel that the right hon. Gentleman is straying rather wide of the debate. I have been generous in allowing him some comment on education, but we must now return to the subject of the motion.

Mr. Curry

I was anxious to demonstrate where the joined-upness was not joining up. I thought that more joined-upness would work well in education. Mercifully, I am coming to end of my remarks on that subject. I leave with the Minister the need to bind education into the regeneration process. Today's children are the citizens of the next generation, to whom we are trying to give competences. They are the people whom we shall ask to provide leadership in the community. If we cannot provide them with the education that they need, they will not be able to do that job.

Mrs. Linda Gilroy (Plymouth, Sutton)

I am not sure where the right hon. Gentleman's nearest education action zone is, but I recommend the one in Plymouth, which is working very hard with the regeneration projects to ensure that the young citizens of the town are able to play their part in a regenerated Plymouth of 2020.

Mr. Curry

My nearest education action zone is probably in Bradford. However, there are not many zones and the head teachers in charge of them are often paid miserably too little for the responsibilities that they take on. Madam Deputy Speaker would no doubt reproach me if I pursued that point, so I shall resist the temptation to be diverted again.

The White Paper is welcome and the beginnings of a strategy are emerging through the mist. However, we need to see the structures of that strategy more clearly. Some of the issues that have been sketched in should be more positively addressed. In particular, I refer to the issues that relate to fiscal incentives and that are essential to pulling in private sector involvement.

We have seen the emergence of an almost consensual approach to regeneration. The Labour Government have built on the programme that was put in place by the previous Administration.

Ms Atherton

I am astonished that the right hon. Gentleman can suggest that there is a consensus on regeneration, given the Conservative party's policy of abandoning regional development agencies and their budgets just as they are getting into their stride.

Mr. Curry

To regard regeneration as synonymous with the regional development agencies seems to be a curious piece of intellectual gymnastics. The Conservative party's policy is interesting because it represents examining the most successful programmes that were carried out previously and attempting to bring elements, such as effective policing and effective education, into the strategy. The hon. Lady might not like that, but the intellectual undertow of that policy is not greatly different from the approach taken by the Government. There is a difference of view about mechanisms and delivery vehicles, but there is no philosophical divide between what we are trying to do, what this Government have done and what we did previously.

I rejoice in the continuity in the programme. We are trying to build communities even though we should use that phrase with hesitation, because building communities is much easier said than done. If there is continuity of programme and an element of planning, and if people feel that they can be adventurous and take risks, we might all be more successful in what we universally wish to achieve in our great inner cities.

8.22 pm

Dr. Stephen Ladyman (South Thanet)

May I ask for your indulgence, Madam Deputy Speaker, before I start my speech? I wish to express my deepest sympathies to the family of Police Constable Jon Odell, who was killed while on duty in Margate last night by a hit-and-run driver. Although Margate is in North Thanet, the Thanet police force serves both the North Thanet and the South Thanet constituencies very well. The anger and distress at what has happened will unite the whole of Thanet.

I want to speak not only because I served on the Select Committee on the Environment, Transport and Regional Affairs when it discussed what it wanted in the urban White Paper and when it produced its report on gap funding, but also because as a Member of Parliament representing Thanet and, before that, as a councillor, I have had experience of regeneration.

Thanet is in east Kent; many people think that means that it is in the leafy suburbs in a wealthy part of the United Kingdom. In reality, Thanet is among the top six areas of England for unemployment and has one of the lowest wage rates in the whole country. That is evidenced by the per capita take-up rate for housing benefit in Thanet, which is usually the highest in the country. More than 40 per cent. of the work force in Thanet are unskilled. Those problems are recognised by the fact that we have assisted area status at tier 2 and objective 2 funding from the European Union. Despite that assistance, regenerating Thanet is extremely difficult for several very practical reasons. In a capitalist economy, the practical reasons usually relate to the way in which the figures add up, so I shall give the House some practical examples of those figures.

First, however, I shall comment briefly on the remarks of my hon. Friend the Member for Denton and Reddish (Mr. Bennett). Perhaps I would not go as far as him in the description of Commissioner Monti. Commissioner Monti is probably more bonkers than bolshy, and more mad and misguided than malign. However, on the issue of the partnership investment programme, he is clearly wrong. I shall try to illustrate my view with a practical example.

Three business parks have been created in Thanet, because we need to attract new industry and investment to the area to deal with our high unemployment. We were able to provide services to two of those parks by using funding that came to us from the single regeneration budget and objective 2. The parks are in private hands and building a factory on one of them costs some £50 to £56 a square foot. I have checked those figures, and they are very competitive for the south-east. Ashford is 40 minutes down the road, and building a factory there also costs £56 a square foot.

The difference is that, once one has paid £56 a square foot and taken occupation of the premises in Thanet, they are worth about £30 a square foot. That is how much one would receive from selling them. However, if one sold the premises in Ashford, one would receive very close to the £56 a square foot that one paid for them. Even if we assume that property inflation is about 4 per cent. a year, it would take a considerable time before the factory in Thanet was worth what one paid for it.

To deal with that problem, help is provided through tier 2 assisted area funding. That can work out at 20 per cent. of capital cost. However, even allowing for a 20 per cent. grant towards the capital cost of building the factory, it would still take 10 years of 4 per cent. per annum price inflation on the value of the property to get back to the discounted value of the factory that one had just bought.

That does not mean that we cannot attract new factories and new investors to Thanet; it means that it is very difficult to do so. Investors have usually to come to Thanet for something else that it can offer: our available work force. Thanet recently attracted a prestigious Spanish car component company, Grupo Antolin. One reason why the company came to Thanet, despite the fact that the figures that I quoted are perhaps working against it, is that it is looking to train its future work force from among our unskilled and semi-skilled workers, who are anxious to get back into work. It was therefore attracted by the work force that Thanet offered rather than by our ability to put together an interesting financial package. However, such companies are few and far between.

Time and again, we lose investors to Ashford and other areas in Kent. When I knock on companies' doors and ask why they decided not to invest in Thanet, they say, "The local council was great; the business parks were great; the quality of life that you were offering was great; but the figures simply don't add up." That is where the partnership investment programme could have stepped in. It could have provided the difference between the price that people have to pay to build their factory and the actual value of that factory. By taking away that plank, Commissioner Monti has made it extremely difficult for us to continue the regeneration of Thanet. I gave the example of a factory, but the principle is the same for areas that we are trying to regenerate with leisure attractions, housing developments and all the other forms of development that Thanet needs if it is to recover.

The European Commission rules say that state aid is inappropriate if it distorts the marketplace. They go on to say that derogations might be possible if compatible with the common market, but that aid schemes that are not compatible with those derogations are illegal. That is why the Commission has said that the partnership investment programme is illegal. To my mind, however, it has failed to consider that the first basic clause in the rules is that the scheme is illegal if it distorts the marketplace. If it does not, why would the Commission even look at whether it is compatible with the derogations? That is the mistake that Commissioner Monti has made.

If we give money to a regional development agency and ask it to carry out development, it may build a factory in a business park; but to sell that factory at market value, it has to make a loss. The difference between the price for which the agency builds the factory and the price at which it sells will be exactly the same amount, to the penny, as the gap funding that would have been provided through the partnership investment programme. By definition, the amounts are identical. The factory owner buys the property at the market rate in both cases, so there is no distortion of the marketplace in either scheme and no difference in the funding that is provided. The only difference is that, without the partnership investment programme, the publicly accountable RDAs have to do the development. As they do not have the necessary staff and expertise at present, as my hon. Friend the Member for Denton and Reddish (Mr. Bennett) said, their task is very difficult.

I turn now to housing. I could take you, Madam Deputy Speaker, to Ramsgate, the town in which I live, and I am willing to bet that with very little effort I could find 50 empty properties that are being allowed to become derelict, all of them in private hands.

The urban taskforce report says that the Government should introduce new measures to encourage the restoration and use of historic buildings left empty by their owners. These should include revised planning guidance … inclusion of heritage issues in regional economic strategies, a review of building regulations and an end to the business rate exemptions on empty listed buildings. The Government's response did not go nearly so far. They simply said that they will consider these issues in the light of the forthcoming report from English Heritage on the historic environment. I am a new Labour politician, and I do not deal in the language of nationalisation without compensation, but empty properties that are unpleasant to look at and which drag my town down—destroying the quality of life for the people who live there and lowering the value of surrounding properties—make me very angry. We should stop messing around, give local authorities the power of compulsory purchase over such properties as quickly as possible and put them into the hands of people who will redevelop them. When we consider what compensation we should provide for those properties, we should ask ourselves what income they are generating for their owners and how much it would cost to capitalise that income. If a property is empty, it earns its owner nothing, and the local authority should take possession at no cost.

Mr. John M. Taylor

The hon. Gentleman may find me an extraordinarily unlikely ally, and may ask himself whether he has it right after all. Does he agree that, in addition to compulsory purchase—I am not quite sure about at no price—it would be constructive for the local authority to be able to grant me re or less omnibus planning permission and then auction the property?

Dr. Ladyman

I completely a free with the hon. Gentleman. I am pleased that I haw an ally on the other side of the House. I am not quite as Stalinist as I thought I was on the issue.

Mr. Tim Loughton (East Worthing and Shoreham)

I offer the hon. Gentleman the support of the Opposition Front Bench as well. It is a waste, whether the properties are owned by the local authority, by registered social landlords or privately, as most of them are. Would he extend the premise to council-owned properties that lie unoccupied and dormant for whatever period, and force authorities to take them over and give them especially to young couples who need to get on the housing ladder, perhaps with homesteading grants?

Dr. Ladyman

I would. I am happy to say that local authorities that neglect their housing stock should answer to my right hon. Friend the Secretary of State for why they are doing that. They should have to put in place a strategy for dealing with the problem as expeditiously as possible. If they are not capable of doing that, somebody else should be found who is.

Mr. Don Foster

May I embarrass the hon. Gentleman still further by offering full support from the Liberal Democrats for his proposition? However, like the hon. Member for Solihull (Mr. Taylor). I am not entirely convinced by a no-cost approach. Is the hon. Gentleman prepared to go further, bearing in mind the scandal that there are 750,000 empty homes and 150,000 homeless households? Something must be done Is he prepared to go as far as equalisation of value added tax for renovation, and reducing it to a much lower level? That, too, would help.

Dr. Ladyman

I agree. There should be a clear tax advantage in regenerating existing properties and developing brownfield sites. I think that I signed an early-day motion to that effect.

Now that we have established cross-party consensus, we have a perfect opportunity for my right hon. Friend the Secretary of State and other Ministers to leap to their feet to announce that they will introduce strong powers for local authorities to engage in the compulsory purchase of empty properties.

I agree with something else that the hon. Member for Bath (Mr. Foster) said earlier. He talked about the amount of council officer time that has to be spent on preparing bids, working through regeneration programmes and other administrative work. It takes a significant amount of councils' time, and the councils tend to be the poorest and the least able to afford the quality of officers that are needed to generate the work. Until programmes are under way, whether they are assisted area, single regeneration budget or objective 2 programmes, and until it is possible to claim back the percentage that will cover administrative costs, it is difficult to get officers in place to design the projects in the first place. It would help councils that are becoming regeneration areas for the first time to receive some seedcorn to help them set up the necessary departments before they can begin claiming back money.

Occasionally, I have found English Partnerships too rigid with its policy of being the funder of last resort. It was often difficult to get an exciting project started until contracts could be signed. English Partnerships would not sign the contracts because it was always hoping that a private individual would step in. As a result, programmes have often been delayed and thereafter fallen through. The Government should consider that.

I am immensely proud of being involved in the regeneration of Thanet. It has given me much satisfaction and a great deal has been achieved. The seafront has been modernised and we have started to recover some streets to regenerate them. We have three business parks and we have got businesses into them. Thanks to the Labour council donating land and the Labour Government donating money, we have our own university campus in Thanet, which is the greatest achievement that any politician has been able to announce for Thanet for a generation. We can succeed, but we would do so much better if obstacles were not put in our way. I ask my right hon. Friend the Minister to address these issues this evening and when considering how the White Paper will be implemented in the coming years.

8.40 pm

Mr. Peter Lilley (Hitchin and Harpenden)

Urban regeneration and preservation of the countryside are two sides of the same coin. Both those who live in towns and those who live in the country want their green fields preserved, and everyone wants more housing. We can have both, as long as we ensure that we build primarily in built-up areas or on built-up land, not on green fields. That will be a major concern of the public in the coming months, and it will be a major issue in the coming election.

I draw the attention of the House to four very recent events that have a bearing on those issues. The first occurred yesterday, when the Minister for Housing and Planning sneaked out in a written answer the figures for the number of houses to be built in the south-east by the Government. He tried to give the impression that the target number had been reduced. In fact, the target is higher than that proposed by the south-east regional planning committee—39,000, instead of 33,000. The target is only for five years. The Government propose then to raise the level to 43,000 houses a year, or possibly even higher. That is a fudge to get the Government through the election next May. They hope that they can obscure the burden that they are imposing with the demand for new houses in the south-east.

The second event occurred today, when my right hon. Friend the Member for Richmond, Yorks (Mr. Hague), the leader of the Conservative party, launched the Conservative campaign to save our green fields. He launched it, I am happy to say, in Hertfordshire, on a piece of greenbelt land threatened by planning development under this Government.

The campaign proclaims my party's commitment to protect green fields and to promote urban regeneration. It spells out our policies and highlights the Labour and Liberal Democrat parties' hypocrisy on the matter. They say one thing, but they do another—[Interruption.] As I think the Minister for Housing and Planning is saying, no doubt echoing the words of his boss, the green belt is a Labour achievement and the Government are building on it.

Mr. Andrew Love (Edmonton)

I thank the right hon. Gentleman for giving way. After the consensus of the past hour, I am pleased that we are back to good old-fashioned party politics. Does the right hon. Gentleman accept that the net impact of what he suggests will be higher house prices, when they are already going through the roof, and more homelessness in the south-east?

Mr. Lilley

I am saying that house building should be focused on the already built-up areas. I am simply pointing out what the Government are doing, as opposed to what they are saying, and the discrepancy between the two. The hon. Gentleman is rather more open than those on his Front Bench, and I give him credit for that.

The third event to which I draw the attention of the House is occurring simultaneously with this debate. It illustrates the Government's attempt to do one thing and say another, and the problems that are caused as a result. While we are engaged in the debate in the House, the North Hertfordshire district council in my constituency is considering advice from its officers to withdraw its local district structure plan. That advice is based on legal opinion delivered to the council by Queen's Counsel, who has pointed out that the Government's own policy planning guidance note 3 requires the council to do that. He spelled out the fact that the Government have created a dilemma for local authorities. The origins of that dilemma lie in an earlier period when Hertfordshire county council—under the control of Labour and the Liberal Democrats, with a majority of one—steamrollered through a proposal to build 10,000 houses on greenbelt land west of Stevenage.

The council did that using an undemocratic procedure, which prevented the full council from voting on the issue. Only 14 councillors—Liberal Democrat and Labour, of course—voted for the measure. The Conservatives tried to take the issue in full council, and a majority of councillors voted to do so, but the standing orders were then changed so that abstentions counted as votes against taking the matter to full council. By that undemocratic procedure, the measure was steamrollered through.

My right hon. Friend the Leader of the Conservative party came to my constituency to highlight the proposal, because it was the biggest incursion into the green belt ever approved by the Secretary of State, who is not in the House today. The resulting uproar at what the Government were authorising, and at the precedent that it would create throughout the country—planning proceeds by precedent, after all—led the Secretary of State to come to the House in a panic with a proposal to try to cover up what the Government were doing and to pretend that they were changing direction. As a result of that, they introduced the new planning policy guidance.

The Secretary of State said that the Government would never in future authorise massive incursions into the green belt or on green land, but would instead give priority to development on brown fields. I said that, if the Government were genuine about that, I would salute what they were doing.

Dr. Ladyman

Given that the policy that the right hon. Gentleman espouses would dramatically accelerate the boom in house prices in the south-east, including Hertfordshire, and that the Government of whom he was a member scrapped housing allowances for key workers such as the police, v here would the key workers live if his policies were implemented in a Tory south-east?

Mr. Lilley

They would live in houses that were not built on the green belt. That is my proposal. They would live in houses built on brown land, or, if there had to be any incursion into greenfield land, it should be greenfield land that is not green belt.

The Government also gave the impression that that was to be their priority when they introduced the planning policy guidance. Meanwhile, in the small print, they were still pressing ahead with concreting over Hertfordshire and other areas. They intended that those proposals should still go ahead. However, they did not realise that they had launched a torpedo that would threaten to sink their proposals to build t rose massive developments west of Stevenage and elsewhere. It now appears, from the legal advice of Mr. Christopher Lockhart-Mummery, QC, that that is just what they have done.

I wrote to the Minister and received a reply from him. Mr. Lockhart-Mummery considered that reply and wrote: I find it hard to accept some of the logic in the letter to Peter Lilley MP from the Parliamentary Under-Secretary at the DETR. He went on to say that that reply from the Minister was the "antithesis" of what PPG3 was seeking, and that it was "illogical". He also said: The course suggested in the Minister's letter cannot be appropriate. In short, the Government are on a course of action that runs contrary to the law and to the legally binding advice that they have set out. I hope that North Hertfordshire district council will take a decision tonight that will expose the contradiction between the Government's proclaimed policies and their actions on the ground.

A fourth, very sad event that was announced last week—a tragedy to many local people—was the closure of the Vauxhall plant at Luton, just adjacent to my constituency. If there is no possibility of rescinding that decision, the priority must be streamlining planning processes on the site to ensure that the development of new business is as rapid as possible. I was glad that the Secretary of State for Trade and Industry responded positively when I put that proposal to him. I hope that he has taken it up with the Department of the Environment, Transport and the Regions, and that the Department will include in the remit of the taskforce that is considering the Vauxhall works the question of whether it can streamline the process to ensure the rapid development of new businesses on the site. The site is massive, and if there is any spare land after the first priority of developing new businesses is met, it should be available for housing, which could further remove the need for the development that is proposed only a few miles away, west of Stevenage.

Those four major recent events demonstrate the importance of the issues that we are discussing. They show that the Government are not doing what they are purporting to do, and also demonstrate that the Conservative party is probably speaking for the bulk of people in towns and rural areas when it calls both for more development—focused, above all, on brownfield land and developed areas—and the regeneration of city centres. We would not, as the Government have done, authorise the largest incursion of building on the green belt ever authorised by a Government in living memory.

8.51 pm

Mr. Hilary Benn (Leeds, Central)

In one sense, it is a pleasure to follow the right hon. Member for Hitchin and Harpenden (Mr. Lilley), as I want to devote most of my remarks to the issue of the development of brownfield land.

However, first I want to respond to a comment about neighbourhood renewal made by the hon. Member for Bath (Mr. Foster), who is not in his place at the moment. From my experience, I believe strongly that renewal is about practical action. We must recognise that the Government deserve credit for the initiatives that they have begun. I shall mention two that impact particularly on my constituency, one of which is the neighbourhood warden scheme, to which I referred last week in a debate on the Gracious Speech. The other is excellence in cities. Those are two examples of ways in which money is being targeted specifically on areas on social disadvantage. Indeed, for the first time in 20 years that I can recollect, excellence in cities has meant that schools in inner-city urban areas, which face the biggest challenge, have received additional funds because of that fact.

On the issue of the single regeneration budget and potential underspend, one reason why it takes time to spend money wisely is that, if we are serious about asking people in the local community what they want, it takes time. It is easy to rush ahead and say that we have already got a plan at the centre, but if we ask people what they want, that takes time. On the issue of initiatives, the Government's approach clearly has the advantage of allowing resources to be targeted and encouraging new initiatives. The disadvantage is that it is a challenge to join up all of those.

I hope that, in time, as we learn from the experience of the initiatives, we will allow local authorities, especially the strategic partnerships that we are now encouraging, to come to the Government and say, "We want to achieve the same objectives as you. We have some ideas about ways in which we might be able to combine the pots of money that you have made available to achieve those objectives and, in effect, we want to bid to take on those programmes and join them together it ways that make the most sense on the ground." In doing so, we could focus more on the outcomes that we want to achieve, rather than the outputs.

I wanted principally to address what I regard as the most serious problem facing our inner cities prospects for regeneration, especially on brownfield land: the decision of the EU Commission, which was mentioned by my hon. Friend the Member for Denton and Reddish (Mr. Bennett), who chairs the Environment Sub-Committee of the Select Committee on the Environment, Transport and Regional Affairs. It strikes me as deeply ironic that, between the publication of Lord Rogers' visionary report on our cities and the Government's White Paper earlier this year, the EU Commission should have taken a decision that does more to threaten successful urban regeneration than anything else.

All hon. Members understand why gap funding developed. It did so for the simple reason that the free market works well in some places, but not in others. Where it does not work well, it fails to provide for wider social and economic need and intervention is required. Gap funding was created because of the failure of the free market, and it has now been banned because of the philosophy of the free market. We know how successful it has been. Indeed, it is an example of a public-private partnership of which every hon. Member is strongly in favour. One cannot say that about all forms of PPP.

The partnership investment programme made possible the development of the waterfront in Leeds. In the past 15 years, the decaying mill buildings that lined the river like spectres from Leeds' industrial past have been transformed into living buildings containing homes and offices. The Victoria quays scheme was the first such development and was the catalyst for the others. Anybody who remembers the Leeds riverside of old and who visits now is amazed. It is estimated that the riverside regeneration and its knock-on effect have created some 15,000 jobs in the inner city. That is what I call urban regeneration. The development is a success that makes it all the more inexplicable that the source of practical support that made it possible is being brought to an end.

Mr. John M. Taylor

The hon. Gentleman has described some good developments on the riverside in his constituency. Does he believe that there might be something to learn from the London docklands experience, which suggests that it is necessary for the local planning authority to be pretty broad minded and willing to say yes?

Mr. Benn

I agree with the hon. Gentleman. In a moment, I shall comment on the success of Leeds city council in taking precisely the approach that he describes.

In May, members of the Environment Sub-Committee met European Commission representatives in Brussels. It was clear that the Commission had not understood the implications of the decision that it took when it took that decision. However, we left it in no doubt of the consequences, and others—especially my right hon. Friend the Minister—have done the same. The Commission has also come to realise that one of the reasons why it did not understand what it was doing was that the United Kingdom has evolved a very different system for dealing with regeneration. Our system principally involves partnership between the public and private sectors, while the rest of Europe has a much greater reliance on public development, partly because so many of its city centres are publicly owned.

I realise that the Commission is responsible under the treaties to act as guardian of the rules. It is, however, worth reminding ourselves precisely of what article 92(1) of the treaty of Rome says. My hon. Friend the Member for South Thanet (Dr. Ladyman) referred to the thrust of that article, but the crucial wording states that any aid granted by a Member State … which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between the Member States, be incompatible with the common market. The words in so far as it affects trade between the Member States are crucial to the argument.

Not for want of a lot of trying, I cannot fathom how the Commission has reached its decision. It seemed to have three concerns: first, that a windfall payment could be made to the owner of land; secondly, that a subsidy could be provided to a developer; and thirdly, that a subsidy could be given to the organisation that rented the new premises. Let us consider those concerns in turn. First, the Sub-Committee asked about windfall. The Commission gave one example involving a car manufacturer, and we were told that a complaint had been made. If that happened, why did not the Commission use its powers to say that the project could not go ahead? Secondly, subsidies are the point of gap funding. Local authorities will sometimes have to deal with a single developer that owns the land. If the problem is that developers should have an equal chance to compete, why cannot the Commission deal with the matter under its public procurement rules?

Thirdly, I do not understand the Commission's concern about potential subsidy to the end user. Much of the riverside development in Leeds has consisted of flats. Unless I have missed something, a flat cannot be regarded as a tradeable commodity. A person cannot pick up a flat from Holbeck, put it down in Hamburg and say that he or she has traded it. The suggestion is nonsense. Such events would not occur, any more than the head of a company that is occupying business or retail space in Milan would suddenly say, "Gosh, cheaper premises are available for rent in the centre of Leeds and we'll move the whole business, lock, stock and barrel." It simply will not happen. An ideological sledgehammer has been used to crack the hard nut of trying to regenerate our inner-city areas and it has smashed it to pieces.

I shall give three quick examples of what is now at risk in the centre of Leeds. In Leeds, we feel strongly about the matter for the reasons to which I have referred. The city council, together with business through the Leeds initiative, has successfully regenerated the city, although Leeds is the first to acknowledge that parts of the city and large parts of my constituency have not benefited from that regeneration.

There is a great contrast between the successful and unsuccessful parts of Leeds. The best measure of that is relative house prices—the most sensitive index that we have developed as a society for measuring the quality of life in the areas in which we choose to live. Two weeks ago, the Yorkshire Evening Post highlighted the difference between a £725,000 penthouse flat that was for sale in the centre of Leeds and a four-bedroom house with front and back gardens that was on sale for £7,250, which will come as something of a shock to hon. Members who represent seats in the south-east.

The first thing at risk is Holbeck urban village—50 acres of old mills and factory buildings, 17 of which are listed. They are of great historical significance and hold the key to regenerating an area between the centre of the city and Holbeck, one of the most deprived parts of my constituency. Regeneration could bring 1,000 jobs to the area, but parts of that development are at risk because of the ban on gap funding.

Secondly, a large bit of land in the Aire valley has potential for industrial development and has been earmarked for that in the plan. To open it up, issues of contamination and land access need to be addressed. I am glad to say that last week, in their transport announcement, the Government said that they would fund their share of the east Leeds link road, but that leaves the city council to raise the funds for its matching contribution.

One of the sources that the city council wants to look to are the owners of that land. They are a bit reluctant to put the money up front because they are not sure what will happen. Gap funding would have met not just the funding gap, but the timing gap, by allowing the investment to go in first, opening up the land and then possibly leading to a situation where all the money could be clawed back fix m the owners of the land after successful development. That has come to an end.

On the issue of funding from regional development agencies, I understand that it is Conservative party policy to abolish the RDAs. It would be helpful if the Opposition Front-Bench spokesman made clear what would happen to that funding, which at the moment is the only game in town in relation to regeneration because of the decision on gap funding.

Thirdly, Mount St Mary's church is on the east bank, which overlooks the city. It is a grade II listed, unused Catholic church, which the Mount St. Mary's trust, working with a developer and a housing association, wants to convert into housing. It has secured single regeneration funding but Yorkshire Forward and English Partnerships have now said that they cannot help because they no longer have access to gap funding.

That is a tragedy. If we apply the three Commission concerns, we realise how ridiculous it is. There is no windfall for anyone to benefit from. How could the developer, which is a housing association with a development company, get an unfair advantage? The flats cannot be exported. It is nonsense. As a result, a piece of Leeds history that commands a magnificent view over the city lies idle and pro vides homes for pigeons, rather than for people. It is almost as though the Commission has reversed that old conundrum about theory and practice and said about gap funding, "That is all very well in practice, but how might it affect trade in theory?" That seems to have been its thought process.

As hon. Members will gather, I find it hard to detect any common sense. What the Commission has done is actively to discourage the bringing forward of the brownfield land that every hon. Member in the Chamber agrees should be the focus of development, a subject I notice is dear to the heart even of the right hon. Member for Hitchin and Harpenden. I wish the Minister all good speed and success in her discussions with the Commission, although, based on our discussions with it, I do not know whether it will act terribly quickly. However, I hope that she will continue to impress on the Commission the urgency of agreeing a new framework. It is what we desperately need in places such as Leeds if we are to carry on successfully with urban regeneration.

9.5 pm

Miss Anne McIntosh (Vale of York)

It is a pleasure to follow the hon. Member for Leeds, Central (Mr. Benn), even though his constituency is more eligible for brownfield sites than mine, where we have a dearth of appropriate sites. I was slightly bemused by his comments about the transport settlement last week because I saw that it was only Labour-held seats that received any such settlement. Perhaps the Minister might tell us in which part of north Yorkshire any of my Conservative colleagues might benefit.

For the benefit of interest to right hon. and hon. Members I should declare that in 1978 I was a stagiaire—I did a traineeship—with the Commission in Directorate-General IV where we were all allowed to work on briefs such as this. I worked on joint ventures and was not able to participate in any article 92 agreements.

We may have had a new insult aided to the House's vocabulary today—we could call it a full Monti—in relation to whether it is a greater insult for a Commissioner to be called an unelected bureaucrat or, in the words of the hon. Member for Denton and Reddish (Mr. Bennett), an academic.

I should like to use my experience to draw hon. Members' attention to why article 92 applies in cases such as gap funding in so far as it affects trade between member states. In May this year, I was on the same Select Committee visit as the hon. Member for Leeds, Central. I understand that this issue was brought to the Commission's attention because a complaint was made by a constituent in another member state where it was felt that state aid had been misused. It was felt that a car distributor was benefiting and was deemed to have been given an uncompetitive advantage over his competitors in other member states. Having said that, I am intrigued as to why it is more appropriate for the state to take the risk than a private sector company. I am sure that all hon. Members would feel much more comfortable if the private sector, which stands to gain, were to take the risk rather than passing it on.

Dr. Ladyman

Will the hon. Lady give way?

Miss McIntosh

No. The hon. Gentleman has spoken and has intervened on almost every speaker. I hope to allow time for my remaining hon. Friends to participate in the debate.

I hope that the Minister will bring us up to date on her discussions with the Commission, and Commissioner Monti on how it will be appropriate to enable local authorities to continue to operate gap funding in assisted areas. There was some evidence to suggest that a slight delay in her Department's drawing up the maps for the new assisted areas had compounded another delay. I hope that the right hon. Lady will report on that to the House. I hope that she will also tell us about her longer-term discussions with the Commission on a possible new regeneration framework and whether the Commission and Commissioner Monti are minded to have regard to that.

We took a great deal of evidence on alternatives, and perhaps the Minister will report on that, too. One possibility was to look at public service exemptions from competition policy under article 88. There were three other alternatives, which included scope within the current EU aid provision so that grant regimes, albeit at a reduced rate, would remain within assisted areas. Another was horizontal aid rules providing opportunities for regeneration funding to a particular industry or region, albeit greatly reduced in scope. A further alternative was direct development, whereby the state undertakes site assembly, reclamation and provision of infrastructure and thereafter releases the development on to the open market.

The evidence taken by the Committee prompts the question of why gap funding has beer used so much only in the United Kingdom. At paragraph 102 of the minutes of evidence, Professor Fothergill, the co-ordinator of special programmes for Barnsley metropolitan borough council, said: I am only guided … by what other people tell me and other people tell me that we have been ahead of the rest of the European Union in employing public/private partnerships. The tradition in the other Member States of the EU is much more one either of direct development by the public sector or of end users of buildings going through the whole development process themselves. The firm that finally uses the building buys the land, puts the bricks on the ground and so on. In his evidence, Mr. Chris Brown said: In Europe, they put much more public sector money into regeneration. They have much more public sector land ownership. The contrast is we have a much greater regeneration need because we industrialised earlier and therefore we have the problems of that industrialisation. Also, we are much better at urban regeneration than they are. At paragraph 10, Mr. Gill, the commercial director of English Partnerships, said: elsewhere in Europe agencies or the equivalent of our local authorities, very often carry out direct development site preparation. I ask the Minister to confirm that, as the Government's response to the report states: The UK Government is proposing to convene a seminar to which representatives from all the Member States have been invited in order to identify the different approaches which are used to achieve the physical regeneration of derelict or contaminated land across the Community, and the extent to which private sector partners are involved. Such a development would be very positive indeed.

I also query some of the evidence that the Committee took. At paragraph 14, Mr. Gill seemed to be rather surprised that under European Union rules, contrary to our usual conception, a subsidy is not deemed to be a subsidy when the state takes the risk and the hit.

I am delighted to have been able to make this short, modest speech—which has been especially brief to allow my hon. Friends to speak. However, I hope that the Minister will be able to bring the House very much up to date on the negotiations and tell us which assisted areas the Department hopes to ensure will continue to benefit from that status. I hope that she can also tell us how far we are in establishing for the United Kingdom a new regeneration framework that meets with the Commission's approval.

9.13 pm

Mr. John M. Taylor (Solihull)

I am very pleased that the hon. Member for Leeds, Central (Mr. Benn) has returned to the Chamber, as I wanted to say in his presence that, in his interesting speech, he made a very interesting observation on contaminated land.

I dare say that other hon. Members will say, "What on earth is the hon. Member for Solihull doing speaking in this debate? Solihull is hardly a place of great deprivation or even of much regeneration." There is certainly not much regeneration in my part of the borough. I should explain that I am in that unusual position of representing a constituency that has the same name as a borough whereas I represent only half of the borough. Arguably, in the north of the borough—in the constituency represented by my hon. Friend the Member for Meriden (Mrs. Spelman)—there is some deprivation. However, as there is hardly any deprivation in my constituency, I am not going to pray in aid the constituency of Solihull to inform me in the debate.

Perhaps I shall, however, hark back to a previous existence of mine, in the 1970s, when I was leader of what was called the West Midlands metropolitan county council—which, after the Greater London council, was the largest local authority in the country. A funny thing happened to the GLC. The then Prime Minister considered herself somewhat provoked by the GLC and set about abolishing it. To my great disappointment, the other provincial metropolitan authorities—West Midlands, Merseyside, West Yorkshire, South Yorkshire, and Tyne and Wear—also went. I considered that the West Midlands county authority had a real role to play in regeneration, and it was beginning to develop it. When it granted a peripheral planning permission for a greenfield site—not in the green belt—the authority would set the condition that the developer had to deal with an inner-city brownfield site as well.

The classic example concerned Saltley gas works, and it was that example that caused me to return to the remarks made by the hon. Member for Leeds, Central. At Saltley, the ground was contaminated to a depth of at least 12 ft, and there were very difficult workings underneath the gas works. The problems gave rise to a concept about which I have not heard much recently but which was very current in the 1970s—negative value. Was it possible that a property could become so worthless and rundown that no one would take it for nothing, and that anyone taking it over would have to be paid? There was quite a lot of discussion about negative value in those days.

Incidentally, in the county council areas there were two cities—Birmingham and Coventry—and five boroughs, namely Solihull, Walsall, Sandwell, Dudley and Wolverhampton. Of course, now that Wolverhampton is a city, we would have to say that there are three cities in the area, and I am sure we all very pleased about that.

I have always lived either in Birmingham or close to it. It is possible to see how Birmingham, as a typical big provincial city, has rolled out into the countryside over some 200 years. Its progress at various stages can be traced, rather as the rings of a tree display its growth. What is quite near today's city centre was once the edge of the city: proud villas with a name and a date over their doors can be found there, and one realises that they belonged to what was once fashionable Birmingham. However, the city's progress has gone dangerously far into the Warwickshire countryside, as the economically mobile have headed for suburbia and, ultimately, for rural addresses.

Any constituency with a great industrial city on one side and Warwickshire countryside on the other will experience pressure on its green belt. There are some very sensitive areas in my part of the world and the pressure on the green belt is remorseless.

Mention has been made today of the north, the south and the south-east; I hope that I might aspire to be the authentic voice of the midlands. Our greatest anxiety is that Birmingham will sprawl into Coventry. There is a crucial corridor of green belt called the Meriden gap between the two cities, and everyone in my area wants to defend it.

Mr. Andrew Stunell (Hazel Grove)

I agree very much with the hon. Gentleman, as my constituency is in a somewhat similar position on the edge of Manchester. The hon. Gentleman suggests that debate has centred on the south and the midlands, but I want to extend the case that has been made to the north-west. Does he agree that this is one of the most crucial issues for suburban constituencies such as ours?

Mr. Taylor

Yes, I do. I have travelled through the hon. Gentleman's constituency and accept that it bears distinct similarities to mine.

In my area, we are very anxious about three motorway service station applications in Solihull, which would mean that local people would never see the night sky again. There is interesting talk of a rail link between the Land Rover plant that is the largest employer in my constituency and the west coast main line. I cannot but think that the Deputy Prime Minister would be extremely enthusiastic about that link, as it would take more than 100,000 lorries a year off the roads. However, I trespass not on the constituency of Meriden, through which most of the track goes—the plant is in my constituency.

I am conscious of the pressure of time; there are others who would like to speak. I will end with a yuletide indulgence, if I may. I took the opportunity last Friday of planting an oak tree to Brueton park in Solihull. The oak tree was twice as tall as me, which would not be very difficult. I end on a note of tribute to the Warwickshire wildlife trust, which made this all possible—in particular Dr. Andy Tasker, the director.

My final word is simply this: let us all remember that the renaissance was financed by the private sector. There is a real role for the private sector in regeneration, and I look forward to seeing it.

9.20 pm

Mr. Crispin Blunt (Reigate)

I am grateful to my right hon. and hon. Friends for their restraint in allowing me to contribute to the debate. Like my hon. Friend the Member for Solihull (Mr. Taylor), I represent a constituency that is largely green belt. I sympathise with and endorse the remarks of my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley). Our constituencies, where the green belt will be concreted over, are the flip side of the difficulties of urban regeneration. If we suck investment and the most talented people from the north-west and the north-east down to the economic magnet of the south-east, we will continue to make problems for ourselves, which any amount of urban regeneration schemes will be unable to solve.

I compliment my hon. Friend the Member for Vale of York (Miss McIntosh) on a brave speech—with all the loaded meaning that "brave" has when one politician uses it to compliment another—for being prepared to defend her former employers in the European Commission for a decision as outrageous as that made by Commissioner Monti.

I commend the speech of the hon. Member for Leeds, Central (Mr. Benn). I, like him, had the privilege of visiting the Holbeck urban village. For Holbeck to be the victim of the Commission's decision—and there are hundreds of other victims in schemes such as Holbeck up and down the country—is a disaster for urban regeneration. That is why I endorse the introduction to the debate by the hon. Member for Denton and Reddish (Mr. Bennett), Chairman of the Environment Sub-Committee, on which I have the honour to serve.

My right hon. Friend the Member for Skipton and Ripon (Mr. Curry) chided the hon. Member for Denton and Reddish slightly for the extremity of his remarks. As far as I was concerned, the hon. Gentleman lost me only when he effectively compared Commissioner Monti to the Luftwaffe. Until then, I was with him all the way.

The right emotion about the decision is anger. It was a capricious, foolish, stupid decision by the European Commissioner; there was no question of balance in terms of the effect on the single market and the disaster that it has wrought on urban regeneration.

The first point that I want to make to the Minister is one of regret. The Government should have fought over the decision. For them to roll over and say that one of the factors that led them not to fight the case was because it was part of our wider interests within the European Union was wrong. If the right hon. Lady wanted to hear the legal case for fighting the decision, she had only to listen to the speech of the hon. Member for Leeds, Central. With forensic skill, he laid out the legal weaknesses of the European Commission's position.

I am appalled at the quality of the legal advice that the Minister must have received if she thought that there was no case to fight. The Government should have taken the case not only to the European Court of Justice but to the Council of Ministers and the European Parliament, because the decision was a disaster for urban regeneration. I should like to explain in a little detail why it is as bad as the Select Committee report says. The key point is the scale of the money that has been lost to urban regeneration.

In the previous three years that the partnership investment programme was working, £2.1 billion was levered into urban regeneration, with nearly £1.5 billion of that coming from the private sector. That was building on a history of successful urban regeneration schemes that began with the urban regeneration companies of the late 1980s and the 1990s, which was picked up by English Partnerships and then by the partnership investment programme. It was a stunning success, but that success is now being lost.

Part of the Government's case was that they wanted to protect the 300 existing schemes in that quixotic way, although they were somehow in violation of the state-aid rule according to the Commissioner' s ruling, and to allow those schemes to continue. The fact is that we have lost all the other schemes that were to come on stream.

All that the Government have been able to do is put £500 million extra into the RDAs to fund urban regeneration. Of course, that extra money for the RDAs is not only for urban regeneration. It has to meet a host of other priorities. It will be up to the RDAs to decide their order of priorities.

All we know is that, for the next three years, that £500 million is a maximum figure. As has been said, the real problem lies in the fact that the costs are now all up front. When the schemes have to be under way, a public sector body will have to find public-sector money for the up-front costs of the urban regeneration schemes that they want, in a battle with the Treasury and with all the other demands that are always there on public sector bodies. That will put a huge burden on individual schemes that are competing for the limited pot of money. The risk is being borne entirely by the public sector. In terms of the scale of resources available for urban regeneration, the quantum on the face of it is extremely high, but the resources will also all have to be sound within the public sector.

The second disaster is what has happened to the people and the talent available to undertake urban regeneration projects. When the Select Committee took evidence on the urban White Paper and the partnership investment programme we heard from some impressive people. Chris Brown of AMEC Developments and Tom Bloxham of Urban Splash are two names that spring to mind as witnesses who came across not only as outstanding entrepreneurs in their own field, but as men of immense quality, who have brought private-sector drive and enthusiasm to urban regeneration projects.

My right hon. Friend the Member for Skipton and Ripon asked how many people from English Partnerships have gone to the RDAs to help them to deliver. The real question is not where have those people gone from English Partnerships, but what has happened to the people in the private sector.

I draw the attention of the House to the evidence that we took from Chris Brown of AMEC, when he was asked: What are the implications for urban regeneration programmes? I agree with your analysis about where we have come from and what land we have but what really are the implications? He said: Jonathon Blackie used the word "disastrous". I would agree. For my part, in my organisation, my colleagues are looking at me and saying, "What do you do now?" It is personally quite a problem. Chris Brown was the director of AMEC Developments for urban regeneration. He also stated, when considering the effects and what is already happening within the industry: It has hardly started. What happens in practice is, if we take a scheme to an RDA and say, "This needs some grant", they say, "Unlucky. Bring it back maybe sometime in the future. We are not sure." What we— Amec— say to our people is, "Do not bother yourselves with schemes which you think need grant. Go and do something that looks commercial. That is the real disaster, as well as the money. All the talented people from the private sector who involved themselves in urban regeneration will do something else. The victims will be people who live in places such as Holbeck urban village—schemes whose success we desperately need in order to deliver urban regeneration throughout the country. The European Commission ruling was a disaster; we should continue to fight it and we should try to reinstate that scheme.

9.30 pm

Mr. Tim Loughton (East Worthing and Shoreham)

It is high time that the House discussed urban regeneration. We have had a good debate—albeit conducted under the obscure parliamentary device of a 20-line motion on supplementary estimates, comprising a medley of environmental causes. Before this debate, the House had been entitled only to a short session of questions on the long-awaited urban White Paper and to some references in the pre-Budget report to urban regeneration tax breaks.

The attendance in the House, on an otherwise quiet evening, makes it clear that the latest buzz words—urban regeneration—strike a chord with many hon. Members. There is an obvious breadth of interest and experience across many constituencies. We heard of the experiences of the hon. Member for Liverpool, Riverside (Mrs. Ellman); I too have visited some of the projects that she mentioned. The hon. Member for South Thanet (Dr. Ladyman) clearly demonstrated that partnership investment programmes were essential when the figures do not add up. The hon. Member for Leeds, Central (Mr. Benn) made an excellent speech.

We heard outright condemnation of Mario Monti; words such as evil, mad, misguided and bonkers were used—that was the toned-down version. There was universal condemnation of the decision over which he presided. The current attacks on the green belt will continue and accelerate unless we get urban regeneration absolutely right—as was clearly demonstrated by my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) who described the attack on green fields in Hertfordshire. He pointed out that brownfield and greenfield interests are inextricably linked. My hon. Friend the Member for Vale of York (Miss McIntosh) mentioned the greenfield problems in her area. There are similar problems in Solihull and Reigate.

There was a broad consensus on many issues—with the possible exception of the suggestion of the hon. Member for Falmouth and Camborne (Ms Atherton) that RDAs had a monopoly on urban regeneration; I shall return to that point later in my remarks.

As I said, the latest buzz words in environmental parlance are urban regeneration. The profile of urban regeneration was raised considerably by the report of Lord Rogers—who has perhaps become its great guru—and the work of the urban taskforce. However, the urban White Paper, which responded to the report, singularly failed Lord Rogers's own test. Generously, only 14 proposals from the Rogers report were adopted by the urban White Paper.

Yesterday's news that the Government intend to overrule local authorities in the south-east—by rejecting the south-east regional planning committee figures and imposing 39,000 homes per year for the first five years and then accelerating the programme—is a slap in the face for local democracy. It is an act of environmental vandalism—as my right hon. Friend the Member for Hitchin and Harpenden so correctly said—and makes effective urban renewal even more urgent.

To date, the Government do not have an impressive record on urban regeneration. In their first four years, they budgeted about £5.7 billion for urban regeneration projects, but that compares with £6.1 billion—before inflation—in the last four years of the previous Conservative Government. The Government have introduced about 26 conflicting and disjointed initiatives—as many hon. Members pointed out—many of which cut across the same resources and local expertise; for example, education action zones, sure start, health action zones, neighbourhood support funds and so on. They all have merits, but they are a disjointed and unco-ordinated muddle.

Mrs. Gilroy

When I was elected to my constituency, I had the doubtful privilege of inheriting from my Conservative predecessor the poorest ward in England. In Plymouth, the disparate projects to which the hon. Gentleman refers add up to the fact that unemployment in the city has returned to the average figure for the first time in 20 years. Will he clarify how the cuts of £55 million, which would result from the £16 billion package of cuts proposed by the shadow Chancellor, would be spread across Plymouth's greatly valued public services and regeneration projects?

Mr. Loughton

The disparity and disjointedness of the various initiatives has posed an enormous problem. The hon. Lady does not know what the budget for urban regeneration will be under the next Conservative Government. If she waits, she will be rather pleasantly surprised.

The Government's performance and innovation unit stated that the clear evidence from those on the ground is that there are too many Government initiatives causing confusion, not enough co-ordination and too much time spent negotiating the system, rather than delivering. I shall continue to deal with that record. More families now live in poor households than did under the previous Government. Some 14.25 million people live in households with less than half the average income, which is more than double the number in the early 1980s and an additional 500,000 on the high point in 1992–93, when the country was in recession.

Despite the Government's lofty claims about eradicating child poverty, there is no evidence for any reduction in number of children—there are 4.5 million—who live in households with less than half the national average income. One million older people have no income other than state benefits. More people live in temporary housing. The number of priority homeless has risen by 3,000. In London, the number of priority homeless has risen by 14 per cent. The number of families in bed-and-breakfast accommodation has risen by 51 per cent. since 1997. The numbers of low weight births, problem drug users, excess winter deaths and people in young offender institutions have all risen. According to almost any measure of poverty, social deprivation or social exclusion, the Government's record is not impressive, but they do not like to hear that.

Mrs. Gilroy

Will the hon. Gentleman give way?

Mr. Loughton

I want to make progress; the hon. Lady had a good shot before On rising crime, making the streets safe must be the prerequisite of any sustainable urban regeneration project, but the figures for the inner cities are most worrying—3,000 fewer police officers and hundreds of early releases are inextricably linked with the fact that crime has risen by 4 per cent. in Greater Manchester; by 12.6 per cent. in the Metropolitan police area; and by 5.2 per cent. in Merseyside, partly because of the exodus from our cities of about 90,000 people a year.

The Government's record is not impressive, and it is right that we should analyse the details of the grants under the no less than 27 headings and sundry titles to discover whether the money is being well spent.

The Joseph Rowntree Foundation report, published earlier this month, included evidence to show that regeneration attempts are being undermined by a breakdown in trust between residents and service providers, especially on large, problem council estates. It is little wonder that the Environment Select Committee said in its 11th report in July that the quality of services provided to urban neighbourhoods is very poor, despite the large amount of mainstream funds spent.

How will the Minister judge the success and the value for money of the urban regeneration grants? The pre-Budget report announced the possibility of up to 12 new urban regeneration companies based on three pilot schemes, but gave no indication of how those schemes were performing or on what criteria they were being judged. How much of that policy can be achieved given the absence of any primary legislation, especially to give urban regeneration companies proper teeth, and given the absence of a renaissance Bill, any urban priority area legislation or any compulsory purchase measure?

I want to ask the Minister some more questions on the Pre-Budget report because its detail does not bear close scrutiny. On the proposals for zero stamp duty in disadvantaged areas, when will she tell us what constitutes a disadvantaged area? Where are they? Will they be established on a ward basis using an index of deprivation? If the amount of stamp duty exemption is not capped, how much will it help residents in larger, higher value homes?

Last week, during a meeting of the Select Committee on Environmental Audit, the Financial Secretary seemed to think that the zero-rate stamp duty exemptions were aimed at business, with purely a knock-on effect on residential property, yet everyone knows that the stamp duty take from business and residential properties is split roughly 50:50.

Last year, 660,000 properties were sold worth less than £60,000—the sum at which stamp duty kicks in. That represents more than 40 per cent. of sales. Without those in London and the south-east, the vast majority of property sales last year did not qualify for stamp duty. So how will the measure help most deprived areas rather than act as a kick-back for people living in houses worth £500,000 or £750,000 in Islington, Hackney and such places?

There are similar question marks over certain measures that, as my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) said, sound good and can be welcomed in principle, but in practice do not amount to much more than a row of beans. Let us consider regional development agencies. It is true—we have been clear—that we do not believe that RDAs add value. Typically, between 75 and 80 per cent. of their budgets are purely for distributing single regeneration budget spending.

Urban regeneration happened long before RDAs came on the scene. From 1981 onwards, there were urban development corporations, enterprise action zones and everything else. RDAs are not essential. So, I assure the hon. Member for Leeds, Central that we would first save the £70 million of RDA administration costs and recycle it into sharp-end regeneration and spending. Their powers would be devolved to local authorities or the Government offices of the regions, as before.

Mr. Bennett

Will the hon. Gentleman give way?

Mr. Loughton

If the hon. Gentleman does not mind, I should like to make some progress as I am very short of time.

There is a serious question mark over the distribution of the sixth round—in the summer—of single regeneration budget funding, which the Minister has failed to address. Of the top 10 Labour-held marginal constituencies involved in a bid under SRB—six in August—why did all 10 receive their bid, yet nine of them contain no ward among the 10 per cent. most deprived on the normal deprivation index? Indeed, only one contained a local authority eligible for neighbourhood renewed funding. The hon. Member for Bath (Mr. Foster) made that point, but the answer is rather more sinister than he suggested. Will the Minister assure us about the balance with which the funds are distributed?

I should like to raise many other questions about the way in which funds from the grant will be used, such as those for the ordnance survey—even though we are still awaiting last year's results from what is supposed to be a profitable organisation. We could consider the way in which money will be spent on national parks grants and on the Housing Corporation, which has failed to meet its own targets over the past three years and continues to do so.

I shall end as we started, with reference to gap funding. Friday is the first anniversary of the European Commission's absurd ruling that the partnership investment programme was in breach of state aid rules. As the Select Committee report rightly says, the decision threatens seriously to undermine … regeneration in England … A body blow for the Urban Renaissance. The report concluded that the Commission's decision was "illogical and ill-considered" and that it brings the European Union into disrepute". As all hon. Members have said, the PIP was highly successful over six years in providing seedcorn—gap—funding of £1.1 billion, which levered in £2.5 billion from the private sector for remediation of land, refurbishment of buildings, site servicing, new build and so on by providing the minimum necessary to allow projects to go ahead. Those projects would not otherwise have done so. The programme was ruled against because it could provide a windfall to the owners of land, represented a subsidy to developers and is a subsidy to an organisation that rents the new premises—or so we are told. As one hon. Member has said, it was clear that the Commission just did not understand what it was doing.

Now, not only are planned schemes at risk, but the good work in many areas may be undermined. The decision will have a serious effect on RDA budgets, as has been said. The 60 per cent. brownfield target, which the Government are far from reaching but we are constantly promised—the actual target date is not until 2008—will now surely be impossible to achieve and can only fuel further pressure on greenfield sites.

How final was the decision? How are we to get out of this mess? How are we to finance the smaller bread-and-butter projects of English Partnerships in particular? How on earth was this allowed to happen?

In the words of the report, the whole issue has been handled abysmally. The Competition Directorate has decided effectively to abolish the most efficient, effective and imaginative regeneration scheme in the European Union. Will the Minister give the whole House—we are all interested—an up-to-date account of the way ahead and what effect the judgment has had on the estimates to which we are agreeing today? I hope that she will also answer the other questions raised, because many more questions have been asked than have been answered by the Government on their record on urban regeneration.

9.45 pm

The Minister for Local Government and the Regions (Ms Hilary Armstrong)

We have had a wide-ranging and interesting debate. However, may I begin by thanking my hon. Friend the Member for South Thanet (Dr. Ladyman) for reminding the House of the tragic death of a policeman in Margate last night? We all join my hon. Friend in offering our deepest sympathies to the policeman's family and to the people of Thanet who, as my hon. Friend made clear, have been so distressed by this incident.

Several Members concentrated on the issue of urban regeneration in its widest form. The hon. Member for Bath (Mr. Foster), the right hon. Member for Skipton and Ripon (Mr. Curry) and the hon. Member for East Worthing and Shoreham (Mr. Loughton) mainly concentrated on issues other than the cancellation of the partnership investment programme. However, my hon. Friends the Members for Liverpool, Riverside (Mrs. Ellman), for South Thanet and for Leeds, Central (Mr. Benn) covered that programme as well as other issues.

The hon. Member for Solihull (Mr. Taylor) made some interesting points about the metropolitan counties that we no longer have. He also reminded us about suburbs, which were an important aspect of the urban White Paper. I hope that he will take the opportunity to consider the ideas in the White Paper and examine how we have given local authorities and regional development agencies the framework within which to deal with the issues that he raised. We continue to consider the involvement of the private sector as central.

The cancellation of the partnership investment programme has meant that the private sector has woken up to how useful it was. It is now engaged much more fully with regional development agencies and local authorities to examine how it can contribute much more effectively to regeneration and how it can develop an effective replacement to the programme.

I talked to someone from a major financial institution and I was impressed that, because of the Government's work and the commitment that was in the urban White Paper, urban regeneration has become a central part of that institution's corporate strategy. It now seeks to be much more engaged in regeneration, and I hope that the House will be pleased to hear that.

The hon. Member for Bath raised a whole range of issues and, clearly, I cannot respond to all of them this evening. I want to set out the way in which the Government approach urban renaissance. Urban regeneration and rural development go together, and that is important. The work of the urban taskforce was the foundation of the urban White Paper and we have set a clear strategic framework that identifies priorities and does so at a regional and local level.

I was struck by the exchanges on the Floor of the House about empty properties and I noticed that everyone who contributed to the exchanges represented a southern constituency. The issue is different in different parts of the country and those exchanges had nothing to say to those people who deal not with empty properties that have not been renovated quickly enough, but with abandoned properties and properties that are impossible to let or sell.

Mr. Don Foster

I hope that the Minister will accept that the figures show that empty homes are a problem throughout the country, but she is right to say that there are different approaches to dealing with it, not least in the role of registered social landlords.

Ms Armstrong

Of course I accept the general thrust of the hon. Gentleman's point, but we too often take a one-dimensional view of the problem which does not reflect differences in the country. That is precisely why a regional approach is so important. Having set out a strategic approach, we now have a much more clearly focused neighbourhood approach, with far greater involvement of local people.

I point out to the hon. Gentleman and others that some of the money was not spent in the first year because we involved local people in a way, they say, in which they had never been involved before. That was so important to them that they asked us to delay the timetable so that they could have more time to get things right. We were happy to do so because we did not want them to be constrained by our timetable; rather, we wanted to be energised by their timetable so that our actions would be effective.

I want to make only one more point on wider regeneration because I cannot respond to every point that was made. We seek to ensure that mainstream programmes work more effectively. The neighbourhood renewal fund, which will provide investment of £800 million over the next three years, is geared to that. We want to ensure that no area has an educational or health profile that does not reach the targets that have been set. I thought it interesting that the right hon. Member for Skipton and Ripon mentioned education so often, because this Government have put education at the centre of urban regeneration, and our development of the urban renewal fund demonstrates that fully.

I turn now to the main debate, which concerned the partnership investment programme. I congratulate my hon. Friend the Member for Denton and Reddish (Mr. Bennett), the Chairman of the Environment Sub-Committee, on his relentless pursuit of the issue. Other colleagues mentioned the benefits that the scheme has brought to their constituencies and the problems that they now face because of the scheme's removal. The Commission's decision on the PIP was clearly a blow, and many hon. Members have spoken of how urban regeneration, in their constituencies and more widely, will suffer. The PIP was an extremely cost-effective way of delivering regeneration, and apart from reducing the call on public funds, it enabled us fully to harness private sector skills.

When the Commission considered the scheme I argued strongly that the PIP was not illegal state aid because the grant given was the absolute minimum necessary to bridge the gap between the development costs and the market value of the regeneration site. The scheme did not give an unfair competition advantage to the developer because any undertaking could apply for assistance under the PIP, and all costs and values were assessed at open market rates. There was negligible, if any, intra-Community trade in the development of derelict land and buildings.

Despite that, the Commission decided that the PIP breached the state rules for reasons that have been given in the debate. Obviously, we were disappointed, but that decision was logical under a very strict interpretation of the rules. The hon. Member for Reigate (Mr. Blunt) asked why we did not pursue the matter in the European Court. Once the decision was made, that was that, and we had to live with the consequences. We could have decided to argue, but that would have brought great uncertainty to the market, including developers, regional development agencies and local authorities. We took the view that we should get on with the transition and with agreeing new schemes that could be implemented. Once the PIP had finished, we could not operate it—even if we had appealed—without having made an agreement in the way that we did on the transition scheme. A legal challenge would have been lengthy and there was no guarantee that it would have succeeded.

What have we done? First, we were successful in negotiating a deal with the Commission to allow more than 300 projects already in the pipeline to come to fruition, despite the adverse ruling. We are working closely with English Partnerships and regional development agencies to ensure that these projects come on stream as quickly as possible.

Mr. Blunt

Will the right hon. Lady give way?

Ms Armstrong

I am sorry, no. I do not have time.

Secondly, we provided extra resources to ensure that the projects which previously would have been funded under the PIP could continue. We have made an extra £60 million available this year, which will rise to £150 million next year. That, together with the other money that we have made available to English Partnerships and the RDAs, brings the total for their land and property budgets to £351 million in 2001 and £379 million in 2001–02.

Thirdly, we have begun the important work of developing a new framework by notifying the Commission of five new schemes that will partially replace the PIP. Two of the schemes will provide gap funding in the assisted areas for bespoke and speculative projects. The three other schemes, which will operate anywhere in England, cover direct development, neighbourhood renewal and environmental regeneration. I am confident that all of these schemes will be approved shortly.

More widely, we underpinned the Government's total commitment to the regeneration of our towns and cities and to addressing the decline in social cohesion in the country when we published the urban White Paper. This sets out our vision for an urban renaissance and builds on the work of the Rogers taskforce.

The White Paper contains a wide range of proposals that is designed to stimulate the regeneration of our urban areas. The proposals include the fiscal incentives, to which hon. Members have referred, to encourage the clean-up of brownfield land, up to 12 new urban regeneration companies and five more millennium villages, new planning policy guidance to put urban renaissance at the heart of the urban planning system, and a new £100 million public-private partnership for the English cities fund, subsequently rising to £250 million. Together with our work on tackling social exclusion and neighbourhood renewal in addressing the problems of the most deprived areas, this represents the most comprehensive set of measures that has been designed to regenerate our towns and cities.

We believe that we have good arguments that support the need for a regeneration framework. Physical regeneration serves community objectives by improving the standard of living and quality of life, for example. None of the existing frameworks serves regeneration goals. Regeneration is a horizontal rather than a sectoral issue, and can apply across the range of economic sectors. The hon. Member for Vale of York (Miss McIntosh) understands these terms because they are used by the Commission. If the right hon. Member for Bromley and Chislehurst (Mr. Forth) had been in the Chamber all evening, he would know that they represent the issues that we have been discussing.

All existing and future member states would benefit from the existence of a framework for furthering regeneration objectives. Having a regeneration framework in place will, in our view, help those countries that are hoping to join the Community by giving them a range of delivery mechanisms to make regeneration work.

We are working with the Commission and examining the scope for creating a new regeneration framework under which state aid would be permitted for the physical regeneration of derelict and disused sites throughout England and the rest of the Community. We are actively engaged in a dialogue with the Commission, and I am optimistic that it will be possible to negotiate a new framework.

Those of us in the House who wish to see the effective enlargement of the EU will want the framework to be in place as soon as possible. The seminar will be held next year. We have engaged with other member states, and they are interested. I believe that we can make progress. I am sure that all sensible people who support regeneration will welcome the proposal.

It being Ten o'clock, MR. SPEAKER proceeded to put forthwith the Questions relating to Estimates which he was directed to put at that hour, pursuant to Standing Order No. 54(4) and (5) (Consideration of Estimates).

The House divided: Ayes 301, Noes 9.

Division No. 13]	[10 pm
AYES
Ainger, Nick	Blizzard, Bob
Ainsworth, Robert (Cov'try NE)	Boateng, Rt Hon Paul
Alexander, Douglas	Borrow, David
Allen, Graham	Bradley, Keith (Withington)
Anderson, Janet (Rossendale)	Bradley, Peter (The Wrekin)
Armstrong, Rt Hon Ms Hilary	Bradshaw, Ben
Ashdown, Rt Hon Paddy	Brand, Dr Peter
Ashton, Joe	Brinton, Mrs Helen
Atherton, Ms Candy	Burden, Richard
Atkins, Charlotte	Burgon, Colin
Austin, John	Butler, Mrs Christine
Bailey, Adrian	Campbell, Alan (Tynemouth)
Barnes, Harry	Campbell, Mrs Anne (C'bridge)
Barron, Kevin	Campbell, Rt Hon Menzies (NE Fife)
Battle, John
Bayley, Hugh	Campbell, Ronnie (Blyth V)
Beard, Nigel	Cann, Jamie
Beckett, Rt Hon Mrs Margaret	Caplin, Ivor
Begg, Miss Anne	Casale, Roger
Beggs, Roy	Caton, Martin
Beith, Rt Hon A J	Cawsey, Ian
Benn, Hilary (Leeds C)	Chapman, Ben (Wirral S)
Benn, Rt Hon Tony (Chesterfield)	Chaytor, David
Bennett, Andrew F	Clark, Rt Hon Dr David (S Shields)
Benton, Joe	Clark, Dr Lynda (Edinburgh Pentlands)
Bermingham, Gerald
Berry, Roger	Clark, Paul (Gillingham)
Blackman, Liz	Clarke, Charles (Norwich S)
Blears, Ms Hazel	Clarke, Eric (Midlothian)

Clarke, Rt Hon Tom (Coatbridge)	Hopkins, Kelvin
Clarke, Tony (Northampton S)	Howells, Dr Kim
Clelland, David	Hoyle, Lindsay
Coffey, Ms Ann	Hughes, Ms Beverley (Stretford)
Coleman, Iain	Hughes, Kevin (Doncaster N)
Colman, Tony	Humble, Mrs Joan
Cooper, Yvette	Hurst, Alan
Corston, Jean	Iddon, Dr Brian
Cox, Tom	Illsley, Eric
Cranston, Ross	Jackson, Helen (Hillsborough)
Crausby, David	Jamieson, David
Cryer, Mrs Ann (Keighley)	Jenkins, Brian
Cryer, John (Hornchurch)	Johnson, Miss Melanie (Welwyn Hatfield)
Cunningham, Jim (Cov'try S)
Curtis-Thomas, Mrs Claire	Jones, Rt Hon Barry (Alyn)
Dalyell, Tam	Jones, Mrs Fiona (Newark)
Darvill, Keith	Jones, Helen (Warrington N)
Davey, Edward (Kingston)	Jones, Ms Jenny (Wolverh'ton SW)
Davey, Valerie (Bristol W)
Davidson, Ian	Jones, Jon Owen (Cardiff C)
Davies, Rt Hon Denzil (Llanelli)	Jones, Dr Lynne (Selly Oak)
Davies, Geraint (Croydon C)	Jones, Martyn (Clwyd S)
Davies, Rt Hon Ron (Caerphilly)	Jowell, Rt Hon Ms Tessa
Davis, Rt Hon Terry (B'ham Hodge H)	Keeble, Ms Sally
	Keen, Alan (Feltham & Heston)
Dawson, Hilton	Keen, Ann (Brentford & Isleworth)
Dean, Mrs Janet	Khabra, Piara S
Denham, John	Kidney, David
Dismore, Andrew	Kilfoyle, Peter
Dobbin, Jim	King, Andy (Rugby & Kenilworth)
Dobson, Rt Hon Frank	Kirkwood, Archy
Donaldson, Jeffrey	Ladyman, Dr Stephen
Doran, Frank	Laxton, Bob
Dowd, Jim	Lepper, David
Drew, David	Leslie, Christopher
Eagle, Angela (Wallasey)	Levitt, Tom
Eagle, Maria (L'pool Garston)	Lewis, Ivan (Bury S)
Edwards, Huw	Lewis, Terry (Worsley)
Ellman, Mrs Louise	Liddell, Rt Hon Mrs Helen
Etherington, Bill	Linton, Martin
Fisher, Mark	Livsey, Richard
Fitzpatrick, Jim	Lloyd, Tony (Manchester C)
Fitzsimons, Mrs Lorna	Llwyd, Elfyn
Flint, Caroline	Lock, David
Flynn, Paul	Love, Andrew
Follett, Barbara	McAvoy, Thomas
Foster, Rt Hon Derek	McCabe, Steve
Foster, Don (Bath)	McCafferty, Ms Chris
Foster, Michael J (Worcester)	McDonagh, Siobhain
Foulkes, George	McFall, John
Gapes, Mike	McIsaac, Shona
Gardiner, Barry	McKenna, Mrs Rosemary
George, Andrew (St Ives)	McNamara, Kevin
Gerrard, Neil	McNulty, Tony
Gibson, Dr Ian	MacShane, Denis
Gilroy, Mrs Linda	Mactaggart, Fiona
Godsiff, Roger	Mahon, Mrs Alice
Goggins, Paul	Mallaber, Judy
Golding, Mrs Llin	Marsden, Gordon (Blackpool S)
Gordon, Mrs Eileen	Marsden, Paul (Shrewsbury)
Griffiths, Jane (Reading E)	Marshall, David (Shetllston)
Griffiths, Nigel (Edinburgh S)	Martlew, Eric
Griffiths, Win (Bridgend)	Maxton, John
Hain, Peter	Meacher, Rt Hon Michael
Hall, Mike (Weaver Vale)	Meale, Alan
Hall, Patrick (Bedford)	Merron, Gillian
Harvey, Nick	Michael, Rt Hon Alun
Healey, John	Michie, Bill (Shef'ld Heeley)
Henderson, Ivan (Harwich)	Miller, Andrew
Hendrick, Mark	Moffatt, Laura
Hepburn, Stephen	Moonie, Dr Lewis
Hill, Keith	Morgan, Alasdair (Galloway)
Hinchliffe, David	Morgan, Ms Julie (Cardiff N)
Hood, Jimmy	Morley, Elliot
Hoon, Rt Hon Geoffrey	Morris, Rt Hon Ms Estelle (B'ham Yardley)
Hope, Phil

Mountford, Kali	Smith, Llew (Blaenau Gwent)
Mullin, Chris	Smith, Sir Robert (W Ab'd'ns)
Murphy, Rt Hon Paul (Torfaen)	Soley, Clive
Naysmith, Dr Doug	Spellar, John
Norris, Dan	Squire, Ms Rachel
O'Brien, Mike (N Warks)	Starkey, Dr Phyllis
O'Hara, Eddie	Steinberg, Gerry
Olner, Bill	Stevenson, George
Pearson, Ian	Stewart, David (Inverness E)
Pendry, Tom	Stoate, Dr Howard
Pickthall, Colin	Stuart, Ms Gisela
Pike, Peter L	Stunell, Andrew
Plaskitt, James	Sutcliffe, Gerry
Pope, Greg	Taylor, Rt Hon Mrs Ann (Dewsbury)
Pound, Stephen
Powell, Sir Raymond	Taylor, David (NW Leics)
Prentice, Ms Bridget (Lewisham E)	Taylor, Matthew (Truro)
Prentice, Gordon (Pendle)	Thomas, Gareth (Clwyd W)
Primarolo, Dawn	Thomas, Gareth R (Harrow W)
Prosser, Gwyn	Thomas, Simon (Ceredigion)
Purchase, Ken	Timms, Stephen
Quin, Rt Hon Ms Joyce	Tipping, Paddy
Rapson, Syd	Todd, Mark
Raynsford, Nick	Truswell, Paul
Reed, Andrew (Loughborough)	Turner, Dennis (Wolverh'ton SE)
Rendel, David	Turner, Dr George (NW Norfolk)
Robertson, John (Glasgow Anniesland)	Turner, Neil (Wigan)
	Twigg, Derek (Halton)
Roche, Mrs Barbara	Tyler, Paul
Rooney, Terry	Tynan, Bill
Ross, Ernie (Dundee W)	Vis, Dr Rudi
Ross, William (E Lond'y)	Walley, Ms Joan
Ruddock, Joan	Wareing, Robert N
Russell, Bob (Colchester)	Watts, David
Russell, Ms Christine (Chester)	Webb, Steve
Ryan, Ms Joan	White, Brian
Salter, Martin	Whitehead, Dr Alan
Sanders, Adrian	Wicks, Malcolm
Savidge, Malcolm	Wigley, Rt Hon Dafydd
Sawford, Phil	Williams, Alan W (E Carmarthen)
Sedgemore, Brian	Williams, Mrs Betty (Conwy)
Shaw, Jonathan	Willis, Phil
Shipley, Ms Debra	Wills, Michael
Short, Rt Hon Clare	Wood, Mike
Singh, Marsha	Woodward, Shaun
Skinner, Dennis	Worthington, Tony
Smith, Rt Hon Andrew (Oxford E)	Wright, Anthony D (Gt Yarmouth)
Smith, Angela (Basildon)	Wright, Tony (Cannock)
Smith, Miss Geraldine (Morecambe & Lunesdale)
	Tellers for the Ayes:
Smith, Jacqui (Redditch)	Mr. Don Touhig and
Smith, John (Glamorgan)	Mr. Clive Betts.
NOES
Blunt, Crispin	Lilley, Rt Hon Peter
Bruce, Ian (S Dorset)	McIntosh, Miss Anne
	Swayne, Desmond
Chope, Christopher
Fabricant, Michael	Tellers for the Noes:
Hogg, Rt Hon Douglas	Mr. David Wilshire and
Howarth, Gerald (Aldershot)	Mr. Eric Forth.

Question accordingly agreed to.

Resolved, That a supplementary sum, not exceeding £81,746,000 be granted to Her Majesty out of the Consolidated Fund, on account, for or towards defraying the charge for the year ending on 31st March 2001 for expenditure by the Department of the Environment, Transport and the Regions on payments to the Housing Corporation: Housing Revenue Account Subsidy; grants towards and advice on the renewal of private sector housing; the Estates Renewal Challenge Fund; homelessness, including the Rough Sleepers Unit; housing management; rent and leasehold services; support for the UK construction industry; planning and minerals research and other planning programmes; payments to the Ordnance Survey (Trading Fund); the London Development Agency; Regional Development Agencies; the New Deal for Communities and other help for deprived neighbourhoods; Single Regeneration Budget; Urban Regeneration Agency (English Partnerships); Housing Action Trusts; Estate Action; Groundwork; coalfields regeneration; European Union agency payments including those for ports and railways in Wales; European Regional Development Fund projects not funded by or in advance of receipts; Countryside Agency; Nature Conservancy Council for England; National Parks Grant; bulk pensions transfers; and sundry other grants-in-aid, grants and payments in support of housing, construction, regeneration, regional policy and countryside and wildlife initiatives, including related research, publicity and publications.

cc311-3
1. SUPPLEMENTARY ESTIMATES, 2000–01 1,400 words, 1 division
c313
1. CONSOLIDATED FUND BILL 50 words
cc313-6
2. BUSINESS OF THE HOUSE 1,255 words, 1 division