HL Deb 12 July 1977 vol 385 cc852-83

6.56 p.m.

The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk)

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, that the House do now resolve itself into Committee.—(Baroness Birk.)

On Question, Motion agreed to.

House in Committee accordingly.

[The Lord Amherst of Hackney in the Chair.]

Clause 1 [Continuance in force of provisions relating to control of office development]:

Baroness YOUNG moved Amendment No. 1: Page 1, line 12, leave out ("seventeen") and insert ("fourteen").

The noble Baroness said: In moving this Amendment this evening I am very conscious that it has a long history, that we are treading over fairly well-known ground. For the benefit of those who have not studied all the procedures in another place, this Amendment has in fact all-Party support from the Greater London Council, and is, therefore, something which is promoted by local authorities and is very much in their interest. The Amendment was itself carried in Committee in another place and then was reversed on Report, entirely due, I believe, to the different voting of the Liberal Party in another place. I am not quite sure what their view about the matter will be this evening, but I hope very much that they will feel that it is a matter well worth consideration.

The effect of this Amendment will be to limit the purposes of the Bill to two more years only, not the five years as the Bill proposes. It is a matter which we believe is well worth consideration. If one considers what the Government have done in the matter of this Bill, it will be apparent that they, by moving their own Amendments to it, have lifted the need for office development permits from office developments of less than 30,000 square feet. As I understand it, this will have the effect of removing approximately 55 per cent. of the applications for ODPs altogether. So it is in itself a major concession. The Secretary of State also said at Second Reading in another place that he would be prepared to give ODPs for a number of speculative office developments. So again this is quite a change.

The Committee will no doubt be aware that a developer must obtain an office development permit before applying for planning permission. When this procedure was first introduced 12 years ago the situation both as regards planning procedures and the general state of the economy was in fact very different from that which obtains today. One of the facts is that planning procedures have enormously altered over the past 12 years. I would have thought, and it seems to us on this side of the House, that with the strengthened procedures, particularly in structure plans, it is not unreasonable to give to local authorities the power to determine whether or not an office development should take place, without the completely negative procedure of an office development permit. The procedure cannot, as it were, be put there for somebody to develop an office. It can only be either agreed or not agreed when a permission has been applied for. Therefore, since 1965 planning powers have been altered and strengthened. I should have thought that this negative control could be done away with.

Secondly, the economy is in a very different position. There is real concern about the situation in inner cities—not only about development in inner cities but about the consequence of not having development in inner cities, which is unemployment. I carefully read the arguments advanced by the Minister in another place against the Amendment. The principal argument was that by having the working of this Act for only two more years it would create uncertainty for local government and developers. However, I should have thought that two years was a reasonable length of time to allow these powers to lapse. We are not asking that the powers should lapse in August, which is what will happen unless the Bill comes into force.

I read very carefully the arguments put forward by the Liberal Party. So far as I could see, they were concerned largely that there should be no more large office blocks. Whether or not there are more large office blocks could be entirely controlled by planning permissions. I should have hoped, from a Party which at any rate in local government terms has expressed itself very interested in increasing the powers of the local authorities rather than decreasing them, that this opportunity to increase the powers of the local authorities would be one that would have appealed.

Finally, the argument is used that if there is not the ODP procedure, it is even less likely that developments will take place in development areas or what seem to be referred to as "assisted areas" of the country; that is to say, that developers will want to develop only in London and the South East. Time and again during Second Reading, in Committee and on Third Reading this argument was used, but my honourable friend Mr. Rossi said, yet again, that not one office of 10,000 square feet or more, for which an ODP had been refused, had in fact found its way out of the South East, and this never seems to have been refuted by anyone. Therefore, I cannot really believe that this is the case, and I think that we must conclude that there is no real reason of substance for thinking that these powers must continue. As I said at the beginning of my speech, this is a point which, as I understand it, had all Party support in the Greater London Council. I hope that it will commend itself to the Government.

This afternoon I received a Press Notice issued jointly by the Departments of the Environment and Transport on local government's role in industrial reorganisation. I entirely accept that we are not talking about industrial reorganisation. However, we are talking about office developments with their employment and other consequences for inner cities and other places, which is an extremely serious matter. The last sentences of the Press Notice are worth bearing in mind, and I quote them in full: The Secretaries of State offer full support to authorities "—

local authorities— in this initiative"—

that is to say, on industrial regeneration. They have asked their Regional Directors, as Chairman of the Economic Planning Boards, to review progress across the country and to report urgently on administrative or other problems which may impede or frustrate the contribution local government can make to the vital process of industrial regeneration".

I entirely agree with those sentiments. I am glad to see the Press statement and to learn that that is the Government's view. I should have thought that what I was proposing was entirely in line with that. I am talking about office developments which, of course, help with the problem of unemployment and will help both in London, which is losing population and in other parts of the country. It does not seem to me to go against the principle of what is being proposed, because we are simply shortening the length of time that the Bill will work. I believe that the amendment will have beneficial effects for the community at large and I hope very much that it will commend itself to the Committee. I beg to move.

7.5 p.m.

Lord SANDYS

I should like to support the Amendment of my noble friend Lady Young. As the noble Baroness, Lady Birk, listened at some length during my Second Reading speech to the considerable detail which I adduced in regard to the GLC, she will be glad to hear that I shall not repeat all the arguments. However, there are some further and fresh arguments that I wish to adduce and which relate particularly to the Government's document—the Office Location Review—produced by the noble Baroness's Department.

I begin my remarks by pointing out that because this was introduced originally in 1964 as a temporary measure, one can quote the well known quotation that there is nothing so permanent as a temporary measure. We believe that the time is now ripe to set aside the procedure. Therefore, I listened with care to, and read with diligence, what the noble Baroness, Lady Birk, said on Second Reading. I remarked upon the majestic, indeed rolling, phrases with which she supported the Government's view when she said: The time has now come again to consider whether powers for office development control should be once more renewed. The Government are firmly of the opinion that they should continue "—[Official Report, 27/6/77; col. 960.] When examining with great care the Office Location Review, I came to a quite different opinion. I believe that the matter deserves a little further examination. Of course the Government lay great emphasis, as indeed did the noble Baroness, upon the assisted area objectives. Therefore, it was that aspect of the Office Location Review that I considered. I devoted my attention to paragraph 5.5 which said: It is arguable that the Government should seek to promote not merely transfer of jobs which are likely in the main to be clerical jobs, but also decentralisation on decision making functions. The argument is that this would, in the short term, provide better career opportunities in the regions and so in the long term contribute in diverse ways to improving their social and economic well-being". Further down, at paragraph 5.11, the report deals with the constraints on movement. It states what we know already, that until recently only some 6 to 7 per cent. of movement out of London was going to the assisted areas. Therefore, this is an extremely small factor. One could say that there is a success rate, but it is a very small success rate. If the noble Baroness, Lady Birk, places the whole weight of her case—which she does—on the movement to the assisted areas, I think that I may quote with justification Disraeli and say that there are exceptions to every rule, but it seldom does to take the advice of one's opponent. I certainly do not take the advice of the noble Baroness on this point because f read further in the report, as regard effectiveness which is dealt with at paragraph 6.9: The Layfield panel on the GLC Development Plan doubted the effectiveness of the control as a means of acting either on volume or on the distribution of employment, since it could operate only on new buildings". One can turn in the summary to the argument which my noble friend Lady Young employed, and I believe that this is most important. It seems, in the main, that office jobs for assisted areas will continue to come from indigenous growth alone. The movement from other areas is likely to be extremely small. Therefore, what is the point of office development control? We have, in total, an excessive control of development from both local and central government which, in our submission, has the effect of inhibiting the creation of employment. I think we may say that the relaxation of controls, which from this side of the Committee we seek to promote, would be a further incentive to the very objects which the noble Baroness seeks to achieve. I hesitate to remind the noble Baroness of Ferrer's Law; she has heard it on many occasions. Ferrer's Law seeks to suggest that most pieces of legislation in the end are counter-productive to their intentions.

7.10 p.m.

Baroness BIRK

I do not think that it will come as any great surprise to the noble Baroness. Lady Young, and the noble Lord, Lord Sandys, who have spoken in support of the Amendment, that I resist the change from five years to two years. I also appreciate that basically they are arguing against office development permits altogether. The noble Lord, Lord Sandys, felt that there should be no controls of any sort and the noble Baroness, Lady Young, spoke about a negative situation which she thought should be eliminated. Therefore, as we start from different ends of the spectrum, it is hardly surprising that we should come to quite different conclusions.

On the basis that one does not like the controls at all one then goes to the minimum; the noble Baroness considers that the five years should be changed to two years. That is quite a different approach to the controls; it is a much more negative approach than our approach. It is quite true, as the noble Baroness said, that when control was first introduced it was given a life-span of seven years. When that elapsed in 1972 the then Conservative Government renewed the control and chose a period of five years. I am aware that then circumstances were different and that we had the structure plans. Nevertheless, there is an analogy here because at that time it was considered necessary in order that the structure plans for regionalisation could be allowed to develop and evolve.

It seems to me that here again we need the five years in order to make an impact on policy. At any time during this period if the Government find that it is unnecessary—and I say straight away that if a control is not necessary I should be the first to say that it should go and not be kept even for two years—it can simply be dispensed with. There is nothing obligatory about the period of five years. However, this legislation enables the Government to have it for five years without having to legislate again. A period of two years seems to be an unsuitable period because it would lead to uncertainty in the office property world and among local authorities in the area in which the control applies.

I disagree with the noble Baroness that this takes decisions away from local authorities. We are talking about a regional, and not a local, policy for office development permits. Office developments of any size take some time to mature; it could take anything from two to five years or more from the time a project is first thought about to completion. With that timetable of develop- ment everybody would very soon find it impossible to tell whether projects which they were planning would be subject to office development control or not, if the control has been extended for only two years.

A much more important point—and this is where the motivation and philosophy come in—is that office development, as we all know, is at present in the doldrums. If developers believe that control might be lifted in a couple of years, there could be a great incentive to delay even those schemes which they are now thinking of starting on the basis: "Well, if we wait for two years we shall not have to bother with this" That would be entirely counter-productive to the Government's plans for encouraging office development in the assisted areas. It is likely —

Baroness YOUNG

I am sorry to interrupt the noble Baroness, but I should like to ask her two questions. First, what are the circumstances in which the Government would be prepared to dispense with the ODP procedure and, secondly, on average how long does it take for an ODP to be agreed by the Secretary of State?

Baroness BIRK

Perhaps the noble Baroness would let me complete my sentence and develop my argument; it would be much easier all round and shorten the time. It is likely that the need for control will be greater in two years' time than it is now. With the upturn in the economy, which is predicted even by the CBI, there will be a growing demand for offices, both in the wrong places as well as in the right ones. The measures which we are now proposing for steering office employment into the areas which need it most will then be seen to be fully justified. We do not want any doubt at that time about whether office control is to continue or disappear.

Another important point concerns the number of ODPs and whether people move out of the area. They may not be very great in number, but those with whom I have discussed this—not just within the Department or with the local authorities, but business people on the ground—have said that when they are aware of this policy they have very often used the Location of Offices Bureau, (which the noble Lord, Lord Sandys, praised very highly last week on Second Reading)—and have asked, "What opportunities are there?" In fact, they have skirted the whole system. They have not even applied for an ODP, but have made their own plans and used the advisory services of the Location of Offices Bureau.

There is an important psychological aspect to this. I agree with the noble Baroness that it is essential for the country's economy to get this as part of the reorganisation of industry and commerce. I believe that we are all agreed on that. It is important that the idea that the offices should not be concentrated in London and particular places in the South-East should be encouraged over a fairly long period. People must get used to the idea. As we know, comparatively new ideas do not always catch on very easily.

As this country is moving away from being a totally industrial society towards becoming a much more commercial society which requires offices, and as we are concentrating greatly on services, the need for offices scattered around outside the concentrated areas, where it has always been thought proper and natural to locate them, is extremely important. We should like perhaps one or two companies to move out either because they have been refused an ODP or because they have not even applied for one because they realise that it is unlikely that they will get one. We now have the relaxation of restrictions on floor space—it is now 30,000 feet—and it means that up to 150 or even 200 people could be employed. That is not a small number if they are employed in an area where there is high unemployment.

A great deal has been said on the question of London, which perhaps is more relevant to the next Amendment. It is true that in areas of London unemployment is extremely high. I should like to point out that, whereas the unemployment percentage for the whole of the GLC area is 4 per cent., in the special development areas it is 10.1 per cent., in the development areas 8.9 per cent., and in the intermediate areas 5.9 per cent. Those three last all come under the category of assisted areas. Whichever way one looks at it, the assisted areas have a far higher overall degree of unemployment than London.

It is true that control might be abandoned if there were an alternative way of getting offices to develop in the assisted areas which was seen to be working; for example, a high take-up of the Department of Industry grants. The way to do it is, we believe, to give the opportunity for this tripartite arrangement—consisting of the Department of Industry grants, the Location of Offices Bureau with their advisory service, and the use of office development permits—to work. I quite appreciate that, if one does not like or believe in the whole system at all, one just goes for the minimum; but, as the Government believe in the need for this, it seems to me that it is absolutely right and proper that it should be for five years.

Incidentally, it takes about six weeks from the time of applying for an ODP to get the reply—which replies to a question the noble Baroness asked me. If this Amendment were agreed to, this would mean that another piece of legislation would have to be passed after the two years if it were considered that it was necessary to keep the controls in the interests of the distribution of offices throughout the country. It seems to make much more sense, apart from anything else, and be much simpler, to do as the Government are doing; that is, making it a period of five years, and if it is possible to relax those controls before the five years, doing so. Having said that, I hope that the noble Baroness will withdraw the Amendment.

7.22 p.m.

The Earl of KINNOULL

I did not intervene before because my noble friend had very ably supported my noble friend Lady Young. But listening to the noble Baroness, Lady Birk—and I listened to her carefully both now and during Second Reading—I find that one is disappointed becauses he never produces one shred of hard fact to support the purpose of this Bill. I know that my noble friend's point is a fairly narrow point; it is whether the Bill should be extended to five years, which the Government ask, or two years, as my noble friends ask. The noble Baroness repeated an argument in favour of five years which, I think, was identical with what was said in another place. It was simply that it might upset the office development market and confuse or perhaps damage the three-pronged attack of the Government to try to help the assisted areas.

I do not believe for one minute that the office development market is worried at all about the uncertainty of a Bill which gives the office development control a life of two years or five years. I would seriously challenge the noble Baroness to give us some evidence of how she thinks the office development markets could react in such a way. The noble Baroness knows that at present the construction industry and the office development market are at a very low ebb. Gone are the palmy days of the property boom; gone are the palmy days of new office speculative large blocks being put up. There are no funds now. The banks burned their fingers, as we all know. A lot of property companies burned their fingers. Coupled with that there is now a very rightful tax, the rating of empty office blocks, which discourages wholesale speculative office development without any tenants in mind.

What really happens today is that any sizeable block is always pre-let, because if it was not pre-let the developer would not get the funding. So for the noble Baroness to say that the office development market would be very wary, and that it would damage the market if we reduced the Bill from five years to two years, I believe has no foundation at all. I would seriously ask her now whether she could give us some facts on this. Could she tell us whom she has discussed it with? Was it with the Federation of Developers? Who has given the Government this advice? I hope that my noble friend will pursue this most carefully, because I do not think that the noble Baroness has yet been able to convince myself, or, I hope, the Committee, as to why we should reject this Amendment.

Baroness BIRK

I cannot add very much more to what I have said. We are speaking from opposite ends of a pole. The noble Earl wants chapter and verse. I explained that it is possible to quantify this to an extent. He is arguing—I thought I covered this before—that at the moment, and I agree, the property market is in the doldrums. What I am arguing is that when things begin to pick up it is important to keep controls for the time being, so that office buildings can be steered to the assisted areas. While everything is more or less at a standstill, one could argue that if there is no movement it does not matter so much. But what we are anxious about is that, once there is an uplift in the economy and there is movement and more building, there should be something operating which will encourage firms to go outside the central areas of London and the South-East. It is for this reason that we want to extend these controls for five years.

Although the noble Earl says that office buildings are always taken in advance, one has only to look round in order to see a great many empty office buildings in London, apart from the celebrated Centre Point which now seems to have given up trying to be an office building. There are empty office buildings, so he is not correct about that. The people I am talking about, to whom I have spoken, apart from the Departments, are people who are in business, who are concerned with building, with offices, with finance, and who seem to find this a very reasonable way for the Government to operate. They also take the view that, unless you do it in this way, people are not going to want to budge outside the areas which are familiar to them and which they are used to.

There is a further point; if you want to improve the employment prospects of young people, again you have to disperse office operations so far as you can. This can also have its effect on pressures on housing. We have to be frank about this. We have two entirely different points of view about this. I could go on talking all night about it, and so could noble Lords and noble Baronesses opposite. I hope that we shall not do so. I do not think that we shall ever come to a point of agreement. I am afraid that, in spite of what has been said—and I have listened carefully, and it has been said very courteously—there is no possibility of the Government reducing the five years to two years. In view of the undertaking that I have given, that it is inherent in the Bill—that it is part of it—that this can be brought to an end at any time it is considered to have outlived its usefulness, I hope that the Amendment will be withdrawn.

The Earl of KINNOULL

I am sorry that the noble Baroness, Lady Birk, has declared that she will not accept reason and logic. I do not have any political dogma on this and I regret that she is bored by what I say.

Baroness BIRK

I am not bored at all.

The Earl of KINNOULL

While I do not have any dogma on this, I feel sorry that she has not produced any evidence to support her case. She talks about the influence of ODPs, but she has not produced evidence to support that, whereas my noble friends have produced evidence to show that they have no substantial influence at all. Surely what really influences people to invest in assisted areas is the grants, because cash is involved. I should much prefer the Government to increase the grants to encourage people to build and create jobs in the assisted areas. My experience in the past has been that ODPs have been a very expensive form of control.

The noble Baroness says glibly—I do not mean that unkindly—that it takes six weeks, but of course there is no time scale for these applications. That is one of the awful things about such controls; there is no time scale and no appeal. In the early days, in 1966–67, it took up to two years to get one of these permits. My noble friends are aware of this, although the noble Baroness does not seem to be aware of it. To refer to six weeks is slightly to mislead the Committee.

Baroness BIRK

I was not deceiving the Committee. I am not sure about what happened some years ago, but I am told that it now takes an average of six weeks to get an ODP. That is what I was talking about. I was not talking about six or seven years ago. The noble Earl may be right. I do not know, but we seem to be going round in the same circle.

The noble Earl mentioned the grants from the Department of Industry and I agree, but what we are saying is that we need the grants together with the permits and the other advice to complete the package. The noble Earl does not think that the three together are necessary. We do, because we think that that is the extra element of persuasion to encourage people to move out. We accept that that will not happen in vast numbers, but it is necessary to have the provision there to be used when it is essential to do so. Beyond that, I cannot go. Incidentally, I might inform the noble Earl that I am not bored; like everybody else, I am just rather tired.

7.32 p.m.

Viscount SIMON

As the noble Baroness, Lady Young, particularly appealed to my noble friends and me to support the Amendment, I feel that something should be said from these Benches. I must confess that this is not a subject that I have studied deeply, although I have listened with care to the arguments that have been put forward both from the Opposition and by the noble Baroness, Lady Birk. It seems to me that this is a very evenly balanced argument and it has been possible for both sides to put forward very interesting and compelling cases.

In the end I lean towards the view of the noble Baroness, Lady Birk, because it seems to me that the fundamental point here is that a power to issue ODPs is a power which can at any moment be relaxed. There may be some small delay, but I cannot believe that in the sort of time scale that is involved in building office buildings that delay will be of great importance. I believe that, if the continuation of the power helps to move any substantial office buildings into areas which are less fortunate than London, the power should remain. After all, the power need never be exercised and, in all the circumstances, I think it wiser to accept the Government view on this.

I was rather surprised to hear the noble Lord, Lord Sandys, say he did not think a two-year period unduly short. Most developments of this kind take a great deal of planning and working out and I should have thought that two years was a very short time for developments of this kind to be subject to this control. The noble Baroness pointed out that there would be the possibility of people saying," We will wait two years and see what happens then". If Lady Young is asking what we on these Benches intend to do, while I do not know what my noble friends will do, I shall be inclined to support the Government on this issue.

Baroness YOUNG

I thank my noble friends Lord Sandys and the Earl of Kinnoull for their support on this occasion. I find it disappointing that the Government are not prepared to move at all on the Amendment or give any further consideration to it. As my noble friends have made perfectly clear, the noble Baroness, Lady Birk, has not produced a shred of evidence to support her case. She said that the Government required five years to make an impact with their policy and that to reduce the length of time to two years would create complications. She went on to say that, if circumstances differed, they would review the situation, but when I asked what would determine those circumstances she did not answer.

Yet we know from past policy that the ODP procedure made no difference to the assisted areas before 1972 and has made a difference subsequently only because of the grants that have been given. Therefore, we do not know in what way circumstances would differ. Before 1972, the economy was healthier than it is now, and ODPs made very little difference. Now that it is worse, they do not appear to be making much difference unless grants are given. So I do not know how circumstances will alter or the Government change their mind. They have clearly made up their mind that they prefer controls and want them to continue.

I was enormously interested, indeed touched, by the intervention of the noble Viscount, Lord Simon, and I appreciate his difficulty. It is rather like the difficulty of his honourable friend in another place who found himself in Committee and, as another of his honourable friends said, did not know very much about it and that was why he voted the wrong way. However, it was nice of the noble Viscount to intervene and I hardly expected him to say he would support me. We appreciate that, whatever happens, the Lib-Lab pact must remain intact. I hope, however, that he will not mind my telling him—in any event, he has made up his mind on the matter—that delay matters to some people. It is not an academic argument and, if an office development which may help to get rid of unemployment gets on, I should have thought that a good thing and something which the Liberals would have wished to promote. To say that delay does not matter is not true.

Viscount SIMON

I accept what the noble Baroness, Lady Young, says but, on the question of delay, the noble Baroness, Lady Birk, said that it was at present a matter of weeks and I do not think that that sort of delay really affects an issue of this kind. When the noble Baroness, Lady Young, speaks about a development that causes some added employment, surely we are entitled to say that, in the present dreadful situation in this country, if one can save 100 jobs in Newcastle it is better than saving 100 jobs in London. It is a horrible thing to say for the people of London, but we must try to see if we can spread unemployment more evenly through the country.

Baroness YOUNG

I am not sure that I would agree with the noble Viscount in that argument; unemployment wherever it occurs is terrible and one should do what one can to prevent it. I think that, in many cases, if controls were relaxed and developments allowed to take place, we should be more likely to get rid of unemployment than we shall by keeping controls on. However, that will be on the noble Viscount's conscience if unemployment is not helped.

We come back to the core of the argument, which is whether the ODP procedure helps assisted areas. This has been well trodden ground but the whole case was summed up most succinctly in the Commons Hansard on 15th June, when the noble Baroness's right honourable friend, Mr. Barnett, was summing up the debate. Tonight, the noble Baroness has been confirming what he said, and the Committee should take note of his words: The review"— the Office Location Review— indicates that in the particular period examined large firms that were refused ODPs did not move to the assisted areas. The period concerned ended in 1972. In the following year the Government introduced a system of incentives to the service industries in order to attract mobile non-manufacturing employment to the assisted areas". I underline that point. Then he goes on to say: … to repeat and emphasise to the House that in my view office development control is unlikely to be fully successful unless accompanied by grants of assistance to firms prepared to move to the regions and also accompanied by the Location of Offices Bureau with its new terms of reference".—[Official Report, 15/6/77; cols. 480–81.] That makes it clear that it will not be the ODP procedure which will get offices in the development areas; it will need money to persuade them to go there, and the facts are perfectly plain—

Baroness BIRK

Will the noble Baroness give way? As I have said several times, it is the three things together. Of course the grants are a very important incentive, but what I have argued, and my honourable friend argued in the same way in another place, is that it is the combination of the three things together: the grants, the ODPs, and the Location of Offices Bureau. Those three are needed in order to get help to the assisted areas. To take out one and say that it is no good when it is part of a whole process does not prove anything. I am sorry that I forgot to answer the noble Baroness on the question of the circumstances in which there would be a relaxation. I should say that this would be when we get an upturn in the economy, and when there is an upsurge in the assisted areas, so that the back of the unemployment to which the noble Viscount referred has been broken and there is a better distribution of work throughout the country. Of course, unemployment is terrible wherever it occurs. But I remind the noble Baroness of the figures that I read out which showed that unemployment in the assisted areas is very considerably higher—more than double in every case—than it is in the area of the GLC.

Baroness YOUNG

I entirely appreciate the argument of the noble Baroness, but what she and her honourable friend in another place are saying—and this is on the record—is that when, before 1972, there were OPDs only, firms did not move. They moved only subsequently when grants were given. I entirely accept the fact that we ought to help development areas. All I am saying is that I do not think that the ODP procedure is making any difference to the situation. I can see that we are not going to agree on this matter tonight. I am very sorry that the Government have clearly made up their mind that controls will help the unemployment situation; I do not believe that they will. However, this is a matter on which we can read the Committee proceedings in Hansard, and then consider what to do at a later stage. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Baroness YOUNG moved Amendment No. 2:

Page 1, line 12, at end insert— ("(2) The provisions of subsection (1) of this section shall not apply in relation to the development of any land in Greater London.").

The noble Baroness said: I beg to move Amendment No. 2. This Amendment, too, has the support of all the Parties in the Greater London Council, and the argument is that London should be withdrawn in toto from the scope of the Bill. Again, I have looked at the argument about this Amendment, which is that this proposal would, once again, be favouring London at the expense of the development areas. Yet the 1976 Review of Strategy for the South-East, which was a Departmental report, recommended that office development permits should be dropped for London. According to the Office Location Review of 1976, the principal reason for introducing office control in 1974 was because employment was increasing very rapidly in London, particularly when there were more offices, so that there was great pressure in particular on housing and transport in London.

As we all know, the situation has changed entirely since then. Far from there being growth in London, there has been a drop in the population every year for the past few years; and the Government's own plans for inner cities include great concern about what is happening in Inner London. At the same time, I believe it to be true that the Government would very much like to attract to London offices of international companies which would like to set up here. That would help unemployment in London, and the position could in turn be helped if London could simply determine these matters by using its own planning procedures. Once again I return to the argument that the Greater London Council is a very large and powerful local authority. It is advised by very good officers, and I should have thought that it, too, could determine whether or not office developments should take place.

Baroness BIRK

As I think the noble Baroness will be aware, in the context of the Bill, this is a wrecking Amendment. Its effect would be to allow the control of office development to lapse on 4th August, 1977, in relation to Greater London, but to carry on in respect of the South-East Region. This would produce a completely unbalanced state of affairs in which firms would be encouraged to build offices in London instead of elsewhere in the South-East.

I should like to draw the attention of the Committee to the White Paper A Policy for Inner Cities, at paragraph 55 of which it is stated that the development of services and office employment in the centre of cities and inner areas themselves would help to provide employment. In South East England office development permits which are required for the construction of offices over 30,000 square feet will be used to steer to inner areas outside central London those firms which can demonstrate that a move to an assisted area is not practicable. In addition, a limited number of speculative office buildings will be permitted in the inner areas where there is a shortage of office space, reasonable transport facilities, and the development is judged to be of maximum benefit to a declining area". The Amendment does not make any distinction between these various areas within London. I am certainly not impressed by the fact that every person on the GLC supports the Amendment. It would be extremely odd if they did not; they have a special interest in this, and they are not ashamed to state it. But it is for the Government to be above the special interest and special pleading of the London area, and to look at the country as a whole and at the assisted areas.

The Amendment strikes at the root of the Government's policy towards office employment location which, I repeat, is to secure a better distribution of office jobs over the country as a whole. I must also repeat that although London's unemployment problems are severe—and I agree that in parts they are very severe—they certainly do not compare with those of the assisted areas, as I have shown. I do not want to repeat the figures. In the assisted areas, there is far less chance of obtaining an office job than there is in London, where there is a concentration of offices. As I said earlier, there is also a national trend towards office employment and away from industrial employment; and this trend is emerging all over the country. Therefore, the Government consider it of vital importance that the assisted areas should benefit from this swing by receiving, where possible, an increase in the number of jobs available. To withdraw the whole of the GLC area from this would be an absolutely fatal blow, and would completely unbalance the whole system. I think that here the noble Baroness is on even weaker ground than she was on her first Amendment.

The Earl of KINNOULL

Before my noble friend replies, I wonder whether the noble Baroness can say, in view of the fact that the Amendment deals specifically with London, and bearing in mind the Government's publication of the White Paper, and the interest in, and policy on, the regeneration of inner cities, taken together with the Minister's undertaking that he would regard sympathetically a number of cases in the GLC area, what has happened in London as regards ODPs during the last two or three years. What has been the policy of the Government? How many applications have there been? How many have been refused; and what has happened to them? I am quite sure that the Location of Offices Bureau must monitor all these things. Those are hard facts which would certainly help my noble friend and those outside.

I should like particularly to ask the noble Baroness what the Government mean by being sympathetic to applications within the GLC area. Can she give any indication of the number of applications which might be granted in the next three or four years? I think that that would be helpful.

Baroness BIRK

It is extremely difficult. I really cannot give the number of applications which might be granted. The number of applications to be granted also depends on the number of applications that are going to be made. When I quoted from the inner areas policy document, the point I was making and underlining was that, if we removed the whole of the GLC area from these controls, one could no longer differentiate between Central London and the West End —where I think many of us are agreed that office development should not be encouraged—and the inner areas outside Central London in relation to those firms which can demonstrate that a move to an assisted area is not practicable. In other words, what we are saying is that, outside Central London and the West End, some of the inner areas will in fact be treated in the same way as assisted areas. Then I went on to say that a limited number of speculative office buildings will be permitted where there is a shortage of office space, where there are reasonable transport facilities and where development is judged to be of maximum benefit to a declining area.

I think the noble Earl, who knows quite a lot about the property side of these matters, must agree that it is very difficult to be more precise about a future policy without having the firms applying at a particular time. What I have done is to give the general outline of the policy which is laid down and the guidelines within which the planning and permits in London will be operated, and I hope this is enough to convince the noble Earl that it would be a grave error. I can see his point, and I appreciate it though I do not agree with it. He probably does not want the control permits at all. But if you have them, to take out the whole of London not only does not make sense but completely reacts against the whole thing. The numbers given or refused, which I think was the other point the noble Earl asked me about, are published each year in an annual report on office development control; and if the noble Earl will allow me to do so, perhaps I can send him the most recent copy, as I am afraid I have not got it with me.

The Earl of KINNOULL

The noble Baroness will know, of course, that I was not being aggressive to her in any way, but she was kind enough to write to me before the Committee stage giving certain facts as to the number of applications which have been made in a year in the case of ODPs. This is a very important part, and I am surprised she is not able to give the number of applications which were particularly involved with the GLC area. I hope the noble Baroness will recall that, whatever the Government's policy is on London and the GLC, from 1965 onwards, for a period of about four or five years, there was a very sharp increase in office rents due entirely to the scarcity value of new developments going up. This is really one of the reasons why I was trying to pursue that argument.

Lord SANDYS

I should like to support this Amendment because I believe my noble friends have a very real point here. Perhaps I can concentrate my few remarks on the Government's own document, the Office Location Review, because the heartbeat of the statistics lies in Table 6, where figures are indeed given of the number of moves. They are: for the Greater London Area, 705; Outer Metropolitan Area, 586; and Outer South-East Area, 185—a very large number of moves in the South-East. But what is so significant is that, of all the moves in the period 1963 to 1976, 82 per cent. of the firms who were circulating within the South-East stayed within that area; and I think it is quite false, so far as we see the argument from this side of the Committee, to suggest that if the GLC area was taken out of the argument it would alter the situation. In our view, it would make no difference.

Baroness YOUNG

I am very surprised that the noble Baroness should not be surprised that there was unanimity of view in the GLC. In my experience of that body, there is very rarely unanimity among all Parties on anything. In this case, I drew attention to it because this is not a Party political matter from the point of view of local government, and that is the point I was trying to make. What I think the noble Baroness must realise is that we all wish to see unemployment brought down, in particular in the development or assisted areas. The question is whether or not this piece of legislation will have that effect; and, if it does, whether it is going to make the position of London much worse. I am very glad that my noble friend Lord Kinnoull drew attention to the fact that the last time the Government limited the number of offices in London they of course gave a golden handshake to every single property developer, whose rents rose enormously on the scarcity value of offices. This could well happen again, but I do not believe that this is the intention of the Government, although when you interfere in these matters it is the likely outcome.

I was also grateful to my noble friend Lord Sandys for being able to supply the figures which were required. My noble friend Lord Sandys, who is always so conscientious, has of course looked at all these matters, which are most relevant on the number of moves, the number of permissions that were given and the number that were refused. As I indicated, this is in no sense a Party political matter. It is something about which local government feels very strongly. It is something which we should have very much liked to see happen, because we think it is in the best interests of London; and no one can really be satisfied with the dereliction in so many parts of London. No one who has read the inner city reports can be anything but concerned about the degree of unemployment, certainly, in the inner areas of London; and one must recognise the amount of employment in London which is entirely in clerical work. I understand that more than 80 per cent. of office employment of females and more than one-third of office employment of males is by way of clerical workers in London. That means that enormous numbers of people are employed in these office developments, which would make a great deal of difference to unemployment and, I should have thought, would make a lot of difference to unemployment among the young. However, this is not a matter upon which we will agree this evening. I think I must consider what the noble Baroness has said and decide whether we shall return to it at another stage. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 1 agreed to.

Clause 2 agreed to.

7.58 p.m.

Baroness YOUNG moved Amendment No. 3: After Clause 2, insert the following new clause:

Amendment of s. 75 of the 1971 Act .Section 75 of the 1971 Act (Exemption by reference to office floor space), shall have effect subject to the following amendments—

  1. (a) in subsection (7) (which defines the prescribed exemption limit for the purpose of that section), for the figure "3,000" there shall be substituted the figure "100,000";
  2. (b) in subsection (8) (which empowers the Secretary of State by order to modify the prescribed exemption limit), for the words "(whether greater or less than 875 3,000 but not less than 1,000)", there shall be substituted the words "(being greater but not less than 100,000).

The noble Baroness said: As the Committee will appreciate, this Amendment is really a rather poorer version of Amendment No. 2, and as I got nowhere on Amendment No. 2 I should like to move Amendment No. 3 to see whether the Government will consider it, or indeed the Amendment to it by my noble friend Lord Kinnoull. This would in fact be continuing the principle that the Secretary of State has already started by raising the limit to which the ODP will apply to offices of more than 30,000 square feet. This Amendment would put the figure up to 100,000 square feet.

The reason for moving this Amendment is that we believe that in smaller developments there will be relatively few applicants who will be applying except when they are already established in a place, and will perhaps be wanting to increase their office space, or something like that. Up to this amount and over it would be somebody coming in with a very large development, indeed. If the Government are so set on the ODP principle, then it would be right that they should apply it only to those very large developments where it would work. It seems to us that this would be a very fair compromise between the two positions that have been indicated on either side of the House this evening. I do not view this in any sense as a Party political matter. I think that this Amendment is a compromise. It is not what we would have wished. I hope that the Government will consider it favourably. We think it falls half way between the position we should have preferred and the one the Government have adopted. I beg to move.

Lord SANDYS

I referred on Second Reading to a particular resolution which was passed by the Greater London Council on October 12th last year—

Baroness BIRK

I understood that the noble Earl, Lord Kinnoull, was going to move his Amendment to the Amendment of the noble Baroness; otherwise we shall get into some confusion.

The Earl of KINNOULL moved Amendment No. 4 as an Amendment to Amendment No. 3: In paragraph (a), leave out ("100,000") and insert ("75,000").

The noble Earl said: I beg to move Amendment No. 4. In principle, I support my noble friend's Amendment in moving my Amendment. Whereas perhaps Amendment No. 1, in the words of the noble Baroness, Lady Birk, was a matter of blind dogma, this I do not think can in any way be described as dogmatic because what we are discussing is a matter of judgment, a judgment which even in the Government's eyes has varied from 3,000 square feet to 5,000 square feet, to 10,000 square feet, to 15,000 square feet and now to 30,000 square feet. The Government's judgment in increasing from 15,000 square feet to 30,000 square feet is where it stands at the moment. I think I should be correct in saying that every time the Government—either the present Government or other Governments of the day—increased the limit there was a unanimous "Whoopee!" from all the office developers who saw that the yoke of ODP was being removed from a sector of the development market so that they could then concentrate their minds on the often long and tortuous business of the planning procedure. What we have not mentioned this afternoon in Committee is that it is not just the ODPs which decide the issue. In fact, they have no relevance to it; it is the planning consent which matters after the ODP.

The reason why I have chosen 75,000 square feet—and one must remember that it is gross square footage—is that I am sure it is my noble friend's judgment and the Government's judgment that it is a matter of choice. If we accept that this policy is to help the assisted areas, then the only criteria of what the minimum should be is the question of jobs. The calculation that the noble Baroness gave us on Second Reading was that in the Government's view 30,000 square feet represented 200 jobs. I looked into this very carefully. In my view, and in the view of others, this is a very optimistic figure because we are talking about the gross square footage and in the gross square footage one has storage, all the common parts and all the facilities in an office block. I am told on the best advice that one should think more of the figure of 150 jobs for 30,000 square feet; in other words, 2 to 1, or 50 per cent.

What I am suggesting with 75,000 square feet gross as a minimum would be that 350 jobs would be the norm and, in the case of my noble friend, 500 jobs. When one looks at the office development market at the present time and for some time in the past, one sees that new development of over 75,000 square feet in any part of the United Kingdom has come as a result of either a Government decentralisation scheme or a national or multinational company deciding to relocate its business in that particular area. The general trend at the moment in new office development to cater for replacing some of the old offices is not in that category. Therefore, as the Government have shown a very welcome flexibility in increasing from 15,000 square feet to 30,000 square feet and knowing the charitable mind of the noble Baroness and in view of her earlier comments in not being able to give way on Amendment No. 1, I hope she will consider my Amendment and my noble friend's Amendment with sympathy; and I hope that she will accept one of them. I beg to move the Amendment to the Amendment.

Baroness BIRK

I shall take Amendment No. 5 as consequential and presume that it will be moved separately. Unfortunately, I must tell the noble Earl who very courteously hoped that this one would get through the net that neither the proposed new clause of the noble Baroness nor his Amendment to it, which reduces it somewhat, would be acceptable to the Government because a limit of either 100,000 square feet or even of 75,000 square feet would be too high for ODP control to have any worthwhile effect. The purpose of the recent increase—and I will not go over the history which has been stated by noble Lords opposite—in the limit to 30,000 square feet was to free from control the smaller developments which are not likely to be steered to an assisted area or to any London area; but there are many projects between 30,000 square feet and 75,000 square feet and even more between 75,000 square feet and 100,000 square feet which would be likely to be steered in this way. This is generally, I think, well known to be the view of the Department of Industry.

We should not wish to lose the opportunity of influencing the location of developments of the larger sizes by exempting them from control, which is what this Amendment does. An office of 75,000 square feet would accommodate about 550 staff and one of 100,000 square feet about 750 staff. Incidentally, I think that it is a matter which varies from building to building, but I think the noble Earl is being generous when he says that he thinks that the figure of 200 is too much for 30,000 square feet.

The Earl of KINNOULL

I said 350 for 75,000 square feet.

Baroness BIRK

I thought that he remarked that my figure of 200 people for 30,000 square feet was too large. I think that his 150 is on the generous side; but I think that we will settle for between 150 and 200 depending on the office and the planning and so on. Even 75,000 square feet would be far too high a level over which to relinquish control if there is to be control at all. We come back to the basic factor that noble Lords opposite do not want controls and therefore are now lifting the limits to such an extent that it makes it quite ludicrous.

There is another point. A change of this magnitude in the exemption limit would give great scope for avoidance. It would be very difficult to split a large office into five units of 30,000 square feet each; obviously, it would be much easier for a firm to split their staff between two units of 75,000 square feet or between one unit at 100,000 square feet and one of 50,000 square feet and thus avoid the control altogether. On the basis of the Amendments moved now, it is negativing the control altogether. A large exemption limit would also remove all flexibility from the operation of the control. While there may be little prospect in the near future of control being applied to offices below 30,000 square feet, it would be far too inflexible to have a limit of 75,000 square feet or 100,000 square feet without the possibility of moving down the scale.

I am sorry, I have made a mistake. I did not mean "in the near future"; I was looking at this the other way round. We would not be increasing the exemption in the near future. Certainly there is no question of applying control below 30,000 square feet now that that area has been increased. To have a limit of 75,000 square feet or 100,000 square feet is far too great and knocks the whole ODP scheme. It is impossible for me to accept Amendments Nos. 4 or 5, and the consequential one, Amendment No. 5.

The Earl of KINNOULL

The noble Baroness said that if she accepted these Amendments it would be ludicrous to the whole policy. I take issue because the whole purpose of these Amendments is to keep the policy going; and where it really creates jobs are the large developers. It is a matter of judgment. What we are trying to achieve is a reasonable upgrading, and meeting the ways where the office development controls do not have the bad effects that they have had in the past but have the good effects that the Government want to see in the future.

The noble Baroness used the word "avoidance". What the Government fear is that the multinationals, or some large group, would deliberately frustrate the ODPs by some clever manipulation. I imagine she meant by building two office blocks, splitting them separately. This creates a legal situation, whether or not, if one develops two office blocks on the same site, it constitutes two office blocks. What constitutes two office blocks? Does the block have to be separated by so much land or can it be joined together? If the noble Baroness is going to use that argument, she must give some further guidance as to how serious the argument of avoidance really is. This is a new angle on the whole argument that we are putting forward.

Baroness BIRK

I do not think that I have to go into details. I was saying that the greater possibilities are there because of the sheer size of putting up the limits so very high. There is that possibility. I am not at this stage saying that so many people are likely to do that or not, but there is that possibility and the sheer figures, the size, indicate that. That is all I am saying. That is a possibility: it may happen; it may not happen. It was an added argument; but the main argument is that we consider that this is putting the matter far too high. I consider the relaxation has been a generous one: 15,000 square feet is now doubled to 30,000 square feet. Now there is talk in terms of 75,000 square feet and 100,000 square feet. Incidentally, Amendments along these lines were not put down or moved or attempted to be moved in another place. So the colleagues of noble Lords opposite evidently did not think that there was anything in them, or that they would possibly find a place in a Bill of this sort, even if they were opposed to the Bill.

The Earl of KINNOULL

May I take up the point of avoidance again because it is very important? It is really effectively a smear on our Amendments. Is the noble Baroness saying that at the present time, with the permitted 30,000 square feet, a developer can buy a site fit for 70,000 square feet and split it up into two companies and therefore avoid the ODP? Is that what she is saying could happen? If so, then they come up to our limit. She must clarify that for the Committee. Is she saying that this is a real threat—a threat which has materialised—or is it something which has come out of her brief from which to try to stimulate her argument?

Baroness BIRK

I cannot say that it has materialised because the limits are not that high. All I am saying is that it is a physical possibility. It is not a smear on the Amendment. If, when one moves an Amendment, one says "X", and that there is a possibility that "Y" may follow, that is not a smear. I am saying that this is a possibility; this is what could happen. I am not saying it has to happen; I am not saying it would happen. If one opens the floodgates to that extent and makes this possible, it is something that I have to point out. I have pointed it out, and I accept that probably it had not occurred to the noble Earl. It is something he should think about. If he would like me to expand on it in terms of whether it is next door or not, I could write to him further about it. It is something, because of the sheer size of it, he must see as a possibility. I think it is both unfair and rather silly to say that it is a smear. It was not, and was not intended in that way at all. One has to look at the consequences of an action that one has taken. This is a possible consequence.

8.17 p.m.

Lord SANDYS

It may not have been a smear, but shall we suggest it was a slight? Implicit in the remarks of the noble Baroness was a suggestion that perhaps she placed some constraint upon the activities by my noble friends in putting on the Marshalled List Amendments which had not been put down in another place. Your Lordships are able to put down Amendments which are felt to be suitable.

Baroness BIRK

I know it is hot and everybody is getting weary, but I must say again that it is not a slight; it was not intended as a slight. Of course not only are noble Lords able to, but quite rightly do move Amendments. Many Amendments moved in this House have improved Bills beyond recognition. Since every aspect of this rather complicated, difficult and contentious little Bill seems to have been looked at, I was merely commenting—as I am entitled to do—that it does not seem to have been anything that had occurred to the noble Lord's friends in another place. Since they are very alert about this matter, and many of them also dislike this Bill as much as noble Lords opposite, I thought that once again it was just a fair comment. If the noble Lord would also like me to admire his ingenuity—and I know it is something which started in London with the GLC—then that is fine. I am prepared to answer it. It is something which I think is relevant when discussing a Bill which is going through the two House of Parliament.

Lord SANDYS

I return to the central point of the argument of the noble Baroness. It is a question of relinquishing control. The impression may have been gained by some noble Lords who are not so conversant with the Bill as the noble Baroness obviously is, that in the background there are two other powers of great importance. One is the normal planning procedure which in every case must be applied to any development of whatever size. Secondly, there are the reserve powers of the Secretary of State where a call-in procedure can be applied. In our submission, these are sufficient safeguards.

I should like to refer to what took place in the Greater London Council last October. I referred to this on Second Reading. I believe it is relevant to this Amendment. The Greater London Council at that time was controlled by the Party opposite. If I may, I will quote once again their resolution, which reads: That representation be made to the Secretary of State for the Environment as follows:

  1. 1. That the Office Development Permit system now be dropped and in any event should not be renewed when the present powers expire in August 1977;
  2. 2. That if, notwithstanding the Council's representation to the contrary, the control is to be continued it should be limited to developments of over 100,000 square feet".
There is a very clear recommendation of the GLC—on an all-Party basis, if I may say so. I believe that it underwrites most strongly the Amendment and, of course, the Amendment to the Amendment put by my noble friend.

Baroness YOUNG

We have had a very useful discussion on this matter. I am sorry that the noble Baroness should feel that new Amendments raised in this Chamber have just been thought up. I thought the function of the House of Lords was primarily to be an amending Chamber and —

Baroness BIRK

I thought I had explained this to the noble Lord. I am sorry; I seem to be misunderstood this evening. I said quite the contrary; I said that it had not been raised in another place, but I went to great lengths to say that not only was it right and proper but that many Bills had been greatly improved by Amendments moved by your Lordships, but that I did not think that was the case with these Amendments.

Baroness YOUNG

I am sorry that the noble Baroness does not think so, because I should have thought these Amendments would improve this Bill. I think there is a very valid point about this. One can argue about the figures. I do not believe that my noble friend Lord Kinnoull has had an answer on the very interesting point that he raised on the size of office development, nor indeed as to what would happen if a developer buys a site and asks to put up two office blocks, which amount to 75,000 square feet—perhaps one should say not two, but three office blocks of 30,000 square feet each, making 90,000 square feet in all, cumulatively. That is a very interesting point on which, of course, we have not had an answer.

We can argue for a very long time about these matters. When a great many reports have said that there would be a regeneration of Inner London, help for unemployment and regeneration of industrial life generally by the dropping of the rigid controls of the ODP system, it seems tragic that the Government are not prepared to move at all in this matter. As my noble friend Lord Sandys has indicated, there are already very adequate planning powers for local authorities in controlling developments and there are already grants to encourage office developments to go to the assisted areas. That is the way they are most likely to go when a grant is given to them. However, I can quite see that we are not going to be able to convince the Government tonight. I therefore beg leave to withdraw the Amendment.

Amendment to the Amendment, by leave, withdrawn.

Amendment, by leave, withdrawn.

[Amendment No. 5 not moved.]

Remaining clauses agreed to.

House resumed: Bill reported without amendment.

Baroness BIRK

My Lords, I do not know whether noble Lords opposite would be willing, since the Bill has not been amended, for me to move the Report stage now?

Baroness YOUNG

My Lords, I am afraid that we on this side of the House could not agree to this being taken on Report now. We should obviously want to have an opportunity of studying the report.