HL Deb 16 June 1978 vol 393 cc681-738

11.24 a.m.

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 ABERDARE in the Chair.]

Clause 1 [Designation of districts by Secretary of State]:

Lord SANDFORD moved Amendment No. 1: Page 1, line 7, leave out ("social").

The noble Lord said: I think that it would be for the convenience of the Committee if we also had in mind Amendment No. 2. With these two Amendments we are in the general area of discussing the criteria by which the special inner areas to be designated by the Secretary of State should be chosen. They have in fact already all been chosen. This was a matter on which in another place they spent two days in committee. I think that perhaps we can dispatch it just as thoroughly in rather less time, because we have been greatly helped by the Written Answer to a Question only last week, in which the Secretary of State fulfilled the obligation undertaken by the Parliamentary Under-Secretary during the Committee stage in another place, to publish in some form the criteria by which these districts were to be chosen and selected. He said at the time that it would be in the form of a circular, or possibly so. I think that would have been very much better and I hope that it might still be considered, because a Written Answer is hardly a firm enough foundation on which to base judgments from which so much else will flow.

However, for the first of these two Amendments, the Secretary of State's Answer to the Written Question is really quite sufficient to indicate that the words "social need" are really inappropriate. The effect of my Amendment would be to make the main criteria read, If the Secretary of State is satisfied— (a) that special need exists in any inner urban area in Great Britain".

In another place my honourable and right honourable friends were concerned to import into the Bill at this point a rather elaborate and I think cumbersome Amendment which attempted to summarise in statutory form what occupied in an already pretty condensed form the whole of Part II of the Government's White Paper, which set out the nature of the problem with which we are dealing in this Bill. That included—just reading the paragraph headings—economic decline, physical decay, social disadvantage, ethnic minorities—by which is meant an unusually high proportion of ethnic minorities—and so on. That cannot possibly be described barely as "social need" and I think therefore that some amendment is necessary. I take the view that was expressed by the Parliamentary Under-Secretary of State in another place, that to attempt to import it into the Bill was a forlorn attempt and it was therefore better to carry the ideas expressed in three or four pages of the White Paper into something like a circular, and to leave out the single misleading word "social" in the Bill itself.

Now we have the Secretary of State's Written Answer, and as all members of the Committee may not have seen it perhaps I could just read one or two sentences from it. It says: Every urban area has a different combination of social and economic stress and, one could easily add, environmental decay. In some districts there are small areas of intense deprivation and dereliction while in others the problems are more evenly distributed. In some areas housing and social difficulties predominate, in others unemployment is the main problem. So whatever you think of that, my Lords, it is not accurate to describe it merely as "social need", and that is my chief reason, now reinforced by the Secretary of State, for leaving out the word "social" at this point in the Bill.

Later on, in the next Amendment, I am suggesting that when the Secretary of State by order does specify any district he should include his reasons, which will be based on his own indications in his White Paper and in this Written Answer of what combination of all the various ills to which inner areas are prey exists in any particular one. It will, I suggest, be necessary to do this because otherwise the exercise of the Secretary of State's power will be purely arbitrary, and that is objectionable from the constitutional point of view.

The other reason is that there may be some in whom unworthy suspicions—and I am not of course referring to anybody in this House but to those in other places where people have to fight elections—are apt to arise when marginal seats come into consideration. These need to be suppressed. If we know the precise reasons and can judge the reasons on which the Secretary of State bases his judgment it will be all the easier for those suspicions to be dealt with. So both in his interest and in the interests of clarity and constitutional propriety I think it is necessary to have the second Amendment. But at the moment, all I want to do is to see the word "social" left out and to hear the noble Baroness give her reasons why it should be there now, and why, if she does, she thinks it ought to stay there. However, I hope she will not do that. I beg to move.

Baroness BIRK

The noble Lord, Lord Sandford, has explained fully his reasons for moving this Amendment, and it has been helpful to speak to both these Amendments, which certainly are very closely linked together. To deal with the first Amendment, to leave out the word "social", the Government intend that the expenditure incurred by local authorities under the powers of the Bill will be eligible for assistance under the urban programme. In the Act which forms the statutory basis of the urban programme, the Local Government Grants (Social Need) Act 1969, the phrase "special social need" occurs but is not defined any further, and this Bill follows it on. Nevertheless, if a district is suffering from economic difficulties, and consequently has high unemployment or very low average family income, that can be said to be "special social need"; and, as the noble Lord pointed out, this has now been expanded in the Written Answer from my right honourable friend.

If the Amendment were accepted, the question would arise whether the district had been designated because of special social need, or because of special need that in some way lay outside the category of social need. In this case, then, there would be doubt as to whether the urban programme could be used to assist the designated district authorities in exercising the powers of this Bill. This is clearly undesirable and the reason why I think this Amendment should be rejected.

If I link this now with the following Amendment on criteria, the first point is that there are no clear-cut criteria or mathematical rules for deciding the relative severity of social and economic deprivation in one district as opposed to another. One may have extensive dereliction; another very bad housing; a third may be characterised by a low average family income. Here we are talking about matters of judgment, and I do not think that any amount of statistical analysis or adding word after word will remove the need, in the end, for that judgment to be made.

Secondly, we are discussing this within the context of the Inner Urban Areas Bill, and the districts which have been selected—and they have all been carefully selected—are in areas which are set in larger conurbations which show the combination of social, environmental and economic problems that is a characteristic of the older and inner parts of our cities. It is not just a question of bad housing. It is not a question of high unemployment, nor just of extensive dereliction. But it can be all three, more, or something quite different. So the range of deprivation to he found in each district has to be a factor in the choice. Thirdly, scale is a factor in itself. One can find pockets of deprivation in virtually any part of the country. We are talking here about sizeable communities, perhaps 50,000–70,000 people in an area with a population of 200,000. Sheer scale is a factor, and this is particularly important in the case of the choice of partnerships.

Fourthly, we have to think about the concentration and intensity of the problems in each district, at least in the indicators of deprivation derived from the 1971 Census—overcrowding, proportion of ethnic minorities, and so on. It is possible there to determine whether there are particular concentrations in certain wards or whether problems are spread evenly over a district. Clearly, if problems are concentrated, that is an important factor. Further, we are concerned with whether 2 per cent. or 25 per cent. of the population in the district are deprived. That is what is meant by the "intensity of deprivation".

Finally, if the powers of the Bill are to give any benefit to the areas with the most acute needs, it follows that they cannot be widely available since this would dilute their effect. So we have to have a limited list, and choosing the designated districts that my right honourable friend announced on 8th May was certainly far from easy, as we all appreciate. It is very difficult to draw lines that separate districts of greater and lesser need, but this is the sort of choice that Governments often have to make. As the noble Lord referred to the fact that my right honourable friend published a great deal of information and also the criteria, I will not go over that. He raised the point of a circular covering this, and we certainly have this in mind once the Bill is enacted, although in view of the announcement last week I doubt whether that will take it much further. In any event, there is a case for saying that a circular to local authorities on the application of the Bill could be helpful in this area.

Finally, the point about the phrase "special social need" is that "social" is a blanket, embracing word which covers all the other points I have mentioned, and also those of the noble Lord—economic, housing, ethnic minorities, and so on. If one starts adding to it, then one comes to the point of where it is to stop. It is now very well understood, and the Written Answer given by my right honourable friend last week has clarified the issue. I should have thought that it was far better to leave it as it is, because it is quite clear to everyone and it is not limiting. This is extremely important. It has far greater flexibility than if one starts specifying.

11.37 a.m.

Baroness YOUNG

I wonder whether I might press the noble Baroness a little further on this. As I have understood her argument, she said that there is no need to amend the clause by leaving out the word "social", because if the word "social" were not included it would not be possible to use the money which comes from the Urban Aid Programme under the 1969 Act. Her second argument, with which she concluded the start to the debate on this Amendment, was that if we did not leave the word "social" in, we would be restricting the clause, which is a rather different argument. I have never myself heard that the word "social" includes "economic" and all the other matters that she has described. I admit that I have not a dictionary beside me, but I should not have thought, to most people, that it did. If it does, however, as she says it does, would it not be wiser to take it out and put something in the interpretation clause so that we know that it does mean? It is quite extraordinary to me to use a term like "social need" in a Bill which, as I read it, is entirely concerned with economic need and industrial regeneration.

It is, of course, perfectly true that on reading the Bill, and futhermore on reading the Press notice which has now been published about it, we see in fact that the Government are taking into account very many other matters, because it is thought that from industrial regeneration other things will flow. I am in no way opposed to that. I think it is an excellent matter. The fact is, however, that a term is used which is not immediately and readily understood to have the meaning which the Government are giving to it. If they are not prepared to take the word out, my first question is, will they put something in the interpretation clause so that we know what it means?

On the second Amendment, to which I will now speak briefly, what the Government are in fact saying is that, as there are no clear-cut criteria for designation, the Secretary of State will decide in each case. As the number of places designated has risen steadily, clearly the criteria for designation are being amended all the time. We are left with the position for local authorities just waiting for the Secretary of State to decide what matters he will consider. It will be very difficult for any other authority, unless it has the detailed social demographic figures and the economic figures that are available in the Government's Press release, to know whether it would qualify, and indeed what mix is required to enable it to qualify. I believe this is a very open-ended commitment; it is something which local government is rightly concerned about, because at the end of the day what authorities are designated will rest entirely with the Secretary of State. It will be very difficult for authorities to know what the criteria have to be on which to establish the designation.


On the first Amendment, I would only urge the Government to resist it if it is true that it might put in doubt the Urban Aid Programme so far as inner city regeneration is concerned. This is a very important aspect, and we should not tamper with it unless we are satisfied that it will not jeopardise any part of the regeneration programme.

On the second Amendment I really am worried. I think it is misconceived. To make it mandatory that the Secretary of State shall give all his reasons will do nothing but increase bureacracy. It will also make for delay, a point I am very worried about, because we have to get the impetus working here. It will make for rigidity and for timidity in the local authorities who, according to the noble Baroness, Baroness Young, will want to know what sort of mix is required in order to get the Secretary of State's authority. I do not believe that one will ever be able to define that mix; every one of these areas has different factors and it is the general picture that one has to look at. Going round these inner city areas, as I have, one can sense that there is deep privation and social need. Something must be done. This tries to put every one of these areas into the same mould; this is bureaucracy run mad. I hope the noble Baroness will resist it; she certainly will have our support from these Benches.


May I add just one point? If the noble Baroness will look at the clause again, especially in respect of the second Amendment, it is after all a power that the Minister will exercise by order. Such orders, as is stated later in the Bill, are subject to annulment by usual procedures in the House. It will therefore quickly become the case that if the Minister were to stray beyond what is reasonable in the exercise of this power, prayers will be introduced against the orders and we should gradually build up a system of what one might call case law about the way these powers are exercised. Surely that is a system that is well within the usual discretion and check that we apply in cases like this? I should have thought it would be most unreasonable, particularly because of the dangers pointed out by the noble Lord, Lord Byers, to introduce the necessity for the Minister to give all sorts of reasons in the first place.

Baroness YOUNG

If I may just take up the point of the noble Lord, Lord Northfield, of course this will be done by order. I have fully read the clause and I appreciate that point. I might suggest that his thinking, that we should have a major debate in the House by annulling an order on a designated area, would, I think, be the most cumbersome way of dealing with it. I would not be at all in favour of that kind of procedure. May I make it quite clear that I am not in any way wishing to hold up this Bill, nor am I in any way opposed to its aims, because they are important. We are all agreed on that. What my noble friends and I were seeking to do was both to widen its aims and to require the Secretary of State to be slightly more specific than he has been already.

Baroness BIRK

I think that most of the answers to this point have been given by the noble Lord, Lord Byers, who put it extremely succinctly and strongly. Also, the point made by my noble friend Lord Northfield has a certain amount of merit. May I make it quite clear that the question that the noble Baroness, Lady Young, put to me is that special social need is not defined in the 1969 Act and is not defined here. To define it would inevitably restrict the meaning, which is undesirable. The noble Lord, Lord Byers, is quite correct in saying that if "social" were to be deleted, it would undoubtedly jeopardise assistance under the 1969 Act.

I must stress again that there is no fixed pattern of desired characteristics for authorities to be designated. I am afraid I must repeat what other noble Lords have said, that problems vary from place to place, and flexibility is absolutely essential if effective policy is to be developed. It is quite true to say, and we are very well aware, that very often it is on a knife edge decision that one authority out of the 43 designated authorities up to date has been designated and one has not; this is a question of finance and resources. It would be not only cumber-some, it would cause enormous trouble among local authorities and create tremendous dissent if reasons had to be given. The noble Lord, Lord Byers, is absolutely correct in saying that in addition it would create enormous delay. This is something that was quite legitimately aired, and I hope that having had this quite wide discussion on it, the noble Baroness will withdraw the Amendment.


We have had a useful debate. I am afraid that to some extent the noble Baroness is using the brief which was prepared for another place to deal with an Amendment by my right honourable friends, who sought to import into the Bill at this point a number of definitions which would have had the effect of narrowing it, and therefore it would have been in some danger of doing what the noble Lord, Lord Byers, is afraid of, sewing the whole thing up and introducing a lot of bureacracy.

The purpose of my Amendment is exactly the reverse; it is to widen the definition. I also agree with the noble Lord, Lord Byers, and with the noble Baroness that the Bill builds on the Urban Aid Programme which started from the point of dealing with social deprivation. I can fully understand that that is why we have the word here, but I really think it is stretching the English language to include in a Bill the word "social", without anything in the interpretation of it, without indicating that for the purposes of this Bill it includes such things as environmental decay, unemployment, lack of private investment, employment problems and so on. No reading of the word in ordinary, plain English will allow it to contain all that.

I should have thought therefore that it really is quite easy to amend the Bill, though perhaps not precisely in this way; if not in this way, then in the way my noble friend suggests, putting in the interpretation something to the effect that for the purposes of this Bill the word "social" embraces all these other things. We have had long enough debate now, but I must confess that I am not at all satisfied with the answers we have been given so far. I beg leave to withdraw the Amendment.

Baroness BIRK

Before the noble Lord withdraws the Amendment I must take him up on one point. I am not reading from a brief that was prepared for another place. I listened very carefully to what was said and replied to the points that were made by noble Lords on this Amendment. When I referred to the narrowing of it, I was talking of the fact that the Secretary of State has to give his reasons, which immediately takes away an area of flexibility and introduces rigidity. I was also explaining what would happen by taking out the word "social", and answering the practical and direct question which was put to me by the noble Baroness. I object to having that sort of innuendo suggested.

Amendment, by leave, withdrawn.

11.48 a.m.

Lord SANDFORD had given Notice of his intention to move Amendment No 2: Page 1, line 12, after ("order") insert ("(which shall include his reasons").

The noble Lord said: We have been discussing this Amendment in connection with the other one, and I will take this opportunity to reply to the point the noble Baroness was making. My own view is that the purpose of the Bill should be expressed in wider terms; there has been discussion about that, but for the very reasons which the Secretary of State gives in his Written Answer it seems to be necessary to indicate which combination of all the various reasons for designating a district have weighed with him at this particular moment. His own Parliamentary Under-Secretary of State said that he would have to exercise a subjective judgment. I have no doubt that in specifying these districts by order he will give the reasons. He has already given in the statistical analysis, which the noble Baroness said would be impracticable, the reasons for which the various areas have been designated; so the difficulties have been surmounted and the reasons are all there for all to see. It seems to me to be constitutionally desirable to incorporate it in the statute, but I will not press the matter now.

Clause 1 agreed to.

Clause 2 [Loans for acquisition of or works on land]:


Amendment 2A. Lord Sandford. May I point out that there is a misprint on the paper; it should be—page 2, line 6.

Lord SANDFORD moved Amendment No. 2A:

Page 2, line 6, at end insert— ("or (c) the installation of any plant, machinery or equipment on land thus acquired and in buildings resulting from such works").

The noble Lord said: I beg to move Amendment 2A and to apologise for tabling the Amendments on the supplementary list rather late in the day. The reason was that they are all Amendments designed to restore into this Bill some of the flexibilities, virtues and merits which were established in the first pioneering industrial improvement area in the Borough of Rochdale and then incorporated in a Private Bill by the County of Tyne and Wear. It was because I have just been able to visit that county, and a number of other programme and partnership areas in the Yorkshire and Humberside region, that I wanted to be sure that these Amendments were well-founded in current practice, and I find them to be so.

The first Amendment adds to the items which are eligible for grant and loan the costs of installation of any plant, machinery or equipment on land thus acquired—referring to the earlier parts of the clause —and in buildings resulting from such works. The other Amendment, 2B, is consequential to it. I do not know whether the noble Baroness would like to answer this Amendment specifically, or deal with the general point of what it is that has persuaded the Government to depart from what the experiments at Rochdale indicated were necessary and have since been further justified by the practical use of the Tyne and Wear Bill by the districts in that county. I beg to move.

Baroness BIRK

Before speaking to the Amendment, there is a point, I am afraid, I must make. I noted the noble Lord's aplogy for the short notice given to the Committee on this series of Amendments; I, personally, only heard of the Amendments about 10.15 p.m. last night. I must point out that noble Lords will recall the recommendations of the Select Committee on Practice and Procedure which the House accepted. The report referred to the tremendous inconvenience to the House of tabling late Amendments and that: The late tabling of amendments is to be strongly deprecated". I fear, therefore, the Committee and I will find it very difficult to give proper consideration to these Amendments, particularly as the House is sitting at 11 o'clock this morning—consideration which is so important with legislation which affects industry and commerce. They are, incidentally—I think I am right in saying—all Amendments which have not suddenly arisen out of this, but the points concerned in them have, in fact, if I can put it this way, been kicked around for some time. I would say to the noble and reverend Lord, echoing and perhaps paraphrasing what is said in Ecclesiastes: there is a time to sow and a time to reap, a time to speak and a time to refrain from speaking. I would add that there is a time for putting down Amendments, which is not 10 o'clock on the evening before the debate.


If it would save the time of the Committee, we could, of course, just gloss over them rather briefly and return to them at Report stage. I am entirely in the hands of the Committee about that.

Baroness BIRK

I shall deal with it as best I can, but I do not think this is the point. I am sorry to be in such a rebuking mood today, but it is really not the purpose of the Committee stage to gloss over things briefly and then return to them on Report. Either they are put down when they should be put down, in time to discuss them properly, or they should not be put down at all.

If I can deal with Amendments Nos. 2A and 2B, the Bill is concerned with specific problems associated with inner city areas, obsolete buildings, derelict sites. Now, all firms anywhere have to obtain machinery and, therefore, it is not a specifically inner city problem and this is why this power is not, and we believe should not be, included in the Bill.

There would also be considerable difficulties in implementing the proposal. For instance, what security can be given on a 30-year loan for machinery that lasts for 10 years? What is to prevent the machinery being moved out of the designated district? I think that in this particular Bill, where one is trying to help with, let us always keep remembering this, limited resources, certainly at this stage, it would only complicate things, make it more difficult and spread the financial butter even more thinly. I would ask the Committee to reject the Amendments.


I do not propose to speak to the merits of the Amendment, but I really feel that this is an important House of Lords matter, because if we are to disregard the recommendations of the Select Committee, such as that on practice and procedure, I believe we are going to get into very grave difficulties. At its very best, it is, if I may say so with all respect to the noble Lord, extremely thoughtless. It creates a very unfair burden on civil servants. It puts all of us in a very difficult position. I only saw these Amendments at 10.50 this morning and they bear, to some extent, on the Amendments I have put down myself. I really do not think the Committee should be asked to deal with the matter at this short notice. Furthermore, I hope that this will be brought to the attention of noble Lords, Members of the House, who are not present today because this is a matter which affects every single one of us.


I stand rebuked and I think probably the best thing to do is to leave these matters and I can perhaps have some correspondence and discussion with the noble Baroness, Lady Birk, before the next stage and if I still think that it is important for them to be debated, I can put them down, with longer notice, at the next stage.

As the noble Baroness says, they are matters which have been gone into before. They are all clauses and items which are in the Tyne and Wear Bill and I do not think it is a fact that we come to them absolutely fresh. As I said in my initial apology, I appreciate that it is improper and undesirable to introduce Amendments at a late stage like this and for that I apologise. I beg leave to withdraw Amendment No. 2A.

Amendment, by leave, withdrawn.

[Amendment No. 2B not moved.]

11.56 a.m.

Baroness BIRK moved Amendment No. 3: Page 2, line 9, at end insert ("; but the council of a designated district shall not make a loan as respects land situated in the same county or region as that district without first consulting the council of the district in which the land is situated.").

The noble Baroness said: Loans under Clause 2 may be made not only in a designated district, but also throughout the county of which the district forms a part, so long as the loan will benefit the designated district itself. This means that a district council for a designated district could make a loan in relation to land in another district and it was suggested by the Opposition in another place when the Bill was discussed there, that this should not be done without the knowledge of the council for that district.

The Government undertook to look at this point and we are now bringing forward this Amendment to require that where a district council for a designated district wants to make a loan in relation to land outside its own area, it must first consult the council for the district in which the land is situated. I beg to move.

11.59 a.m.

Lord EVANS of CLAUGHTON moved, as an Amendment to the Amendment, Amendment No. 4: Line 4, after ("district") insert ("and the council of the county or region").

The noble Lord said: My Amendment to the Amendment seeks to ensure that where the consultation to which it refers is required to take place, something which we very much support, we feel, under an abundance of caution, that the extension accepted in another place to the local authorities included within the ambience of the Bill—namely, county councils—should be included in this clause. In other words, if county councils can now become authorities to benefit from the terms of the Bill, it seems right to me that, in this consultative procedure of consulting other districts within the same area, it would be proper that the county authority in which the district lies should also be consulted.

If it is going to be suggested against me, as was suggested earlier by my noble friend Lord Byers, that this might appear to be bureaucratic, I do not think that it will be, because during the same cycle of consultations taking place with the other districts, such consultations could also be taking place with the county authority. It is out of an abundance of caution that I move this Amendment, because I read carefully Clause 1(2) and I could not see that the definition set out in that subsection included counties.

Therefore, for two reasons, one an abundance of caution in case the subsection does not include counties—and I suspect that it does not—and, secondly, because I think that counties, as demonstrated in debates in another place, should be fully involved in this Bill, I move the Amendment to incorporate counties in the consultative procedure. I beg to move.


I am as interested as anybody else in upholding the dignity of the importance of county councils. But as I look at the Bill I see that Clause 2 and this Amendment refer to "designated district authorities". I then turn back the page to Clause 1(2) and I see that "designated district authority" includes the council of a district or the council of the county. So surely the point is already covered by Clause 1?


That really is the point. I looked at this all through the day and late into the night, and I cannot be satisfied from the wording there, that a "designated district" clearly includes the council of the county or region in which is that district. If I can have the assurance that it does, as the noble Lord suggests, I shall be delighted to withdraw the Amendment.

Baroness BIRK

I think, as I suspected, that what the noble Lord is concerned about is that districts and counties ought to consult each other generally. I agree entirely with that, but I do not think that it needs writing into the Bill. My noble friend Lord Leatherland has pointed out that the designated district authority set out in Clause 1 means the council of that district, and he has explained the matter in that context; and this would apply to all concurrent councils, both under the Bill and under existing legislation. Many powers of local authorities are concurrent under the Local Government Act 1972.

We have put this in in this way here, and it was done at the request of the Conservative Opposition in another place, to write in a legal requirement for consultation where there are certain special circumstances, for example, here one authority is acting outside its own area. Otherwise, if we are to keep on reiterating in the Bill—I am not talking about any other consultation document or of encouraging local authorities to consult—my noble friend Lord Leatherland is right. This is a specific case where land is being used, where there is a legal requirement, and we feel that this should be spelt out rather more specifically than the general encouragement to consult anyway. I hope that my explanation will satisfy the noble Lord and that he will not press the Amendment.


My wish sprang from my experience in metropolitan counties and districts, and it was to avoid one of the main reasons for the virtual breakdown in some areas of cross-communication between districts and county councils, the jealousies and the lack of consultation, and to try to ensure that those problems that local government reorganisation created were not exacerbated in the Bill. In view of the assurance given by the noble Baroness, however, I beg leave to withdraw the Amendment.

Baroness YOUNG

On behalf of my honourable friends in another place and ourselves on this side of the Committee, I should like to thank the Government for bringing forward the Amendment. It meets points that were raised in another place, and we are glad to see them put in this way. I accept what the noble Baroness said about the question of consultation, and I believe that if there was further consultation written into the Bill we should be making unnecessarily bureaucratic requirements to meet this particular need.

Amendment to the Amendment, by leave, withdrawn.

On Question, Amendment agreed to.

Lord SANDFORD had given Notice of his intention to move Amendment No. 4A: Page 2, line 31, leave out ("Secretary of State") and insert ("designated district").

The noble Lord said: I shall willingly not move this Amendment and others on the supplementary list, but would the noble Baroness agree that between this stage and the next it would be useful to correspond with me on these matters so that I may judge the necessity or otherwise of tabling the Amendments again?

Baroness BIRK

As I understand the noble Lord, he is referring not just to this Amendment but to all the other Amendments on the supplementary list. I shall be happy to write to him about the various matters because, as I explained earlier, I do not think I can give a satisfactory answer today. I suggest that it would be to the convenience of the Committee if I wrote to the noble Lord.

(Amendments Nos. 4A, 9A, 9B, 10A, 14A and 21 not moved.)

Clause 2 agreed to.

12.5 p.m.

Baroness BIRK moved Amendment No. 5: After Clause 2, insert the following new clause:

Loans and grants to common ownership and co-operative enterprises

(".—(1) Where a designated district authority are satisfied that the establishment by any persons of a body which is intended to meet the requirements of—

  1. (a) paragraphs (a) to (c) of subsection (1) of section 2 of the Industrial Common Ownership Act 1976 (common ownership enterprises); or
  2. (b) paragraphs (a) and (b) of subsection (2) of that section (co-operative enterprises),
would benefit the designated district, they may make a loan or a grant or both to those persons for the purpose of enabling them to establish that body.

(2) The Secretary of State may, either generally or with respect to particular cases, give directions as to the making of loans and grants uuder this section and, in particular, as to the imposition of conditions.

(3) Subject to subsection (2) above, a designated district authority, in making a loan or a grant under this section, may impose such conditions as they think fit and may, in particular, impose a condition requiring the repayment of all or any part of the loan or grant—

  1. (a) if any other condition is not complied with; or
  2. (b) in such other circumstances as they may specify.").

The noble Baroness said: I beg to move Amendment No. 5 and, with the leave of the Committee, I propose to speak also to Amendments Nos. 10, 12, 15 and 16 which are consequential on Amendment No. 5. My honourable friend the Parliamentary Under-Secretary in the Department of Industry undertook in another place that the Government would introduce a clause to enable designated district authorities to give financial assistance to facilitate the setting up of a co-operative or common ownership enterprise. This group of Amendments introduces a new clause to this effect, and makes consequential Amendments to other clauses which, as I have already said, merely reflect the order of the new clause in the Bill. This would enable the local authority to give a grant or loan, or both, to anyone wishing to set up a body meeting the requirements of the Industrial Common Ownership Act 1976 for certification as a co-operative or common ownership enterprise.

It might be helpful if at this point I say a few words of explanation about these types of enterprise. Many noble Lords will be familiar with co-operatives, if only from experience of shopping at the local "co-op". The common ownership enterprise is a more recent development and I suspect that it may be less well-known. This is the sort of enterprise in which control rests wholly with the people who work in it, on the basis of an equal say for each worker. Only people working in the common ownership enterprise can be members. Perhaps the best-known example is the Scott Bader Commonwealth at Wollaston, in North-amptonshire, which makes plastics and chemical products, and has over 400 employees. This concern is collectively owned by its workforce, and this was thanks to the farsighted generosity of the founder-owner, Mr. Ernest Bader, who literally gave away the business to his workers and, I am happy to say, has not regretted it since. Most common ownership firms are, of course, on a much smaller scale than this, but the democratic principle remains the same.

The membership of a co-operative enterprise is less rigidly restricted but, for the purposes of the Industrial Common Ownership Act 1976, the principle of control by a majority of the work force still applies. The Act does not embrace, for example, the co-op shop which is owned by its customers rather than by its employees, although these Co-ops will be eligible, like any other retailer, for assistance under the other clauses of the Bill.

The clause reflects the Government's belief that workers' co-operatives and common ownership enterprises should be encouraged, and this is demonstrated by our introduction of the Co-operative Development Agency Bill which was given a Third Reading by your Lordships' House yesterday. These types of enterprise have a part to play in the economic regeneration of the inner cities, along with other types of small businesses which the Government are also actively encouraging. All provide valuable new jobs for inner city residents and each can benefit from assistance under the provisions of the Bill, whether they be individual small businesses co-operatives or the common ownership enterprises to which I have just referred.

The extra assistance which can be given under the proposed clause to co-operatives or common ownership enterprises will not give them any unfair advantage over other types of business in the area. It is intended that it should be used to help with the administrative and other expenses of setting up such an enterprise. The people concerned will need legal advice. They may need advice from accountants on the viability of their project. They may have to consult experts on various other aspects of the project. They will have to spend time and administrative expense on planning and organising the project. They will incur incidental setting-up costs, such as the fee for registering under the Industrial and Provident Societies Act, and it is these kinds of expense which the clause is intended to cover. It is not intended that the clause should be used to assist with items such as plant and machinery or working capital. Nor is it intended that it should be used to assist with the cost of land or buildings beyond that available to all types of organisation under the other clauses of the Bill. To do so would discriminate unfairly against other types of small businesses.

As with most of the other powers of assistance under the Bill, the clause would be subject to the direction-making power of the Secretary of State and to a provision allowing the authority to impose conditions on its assistance. No decision has yet been taken on whether the Secretary of State should issue a direction under the clause, but one might be necessary to ensure that it is indeed used mainly for administrative and related expenses, as the Government intend that it should be. I commend the clause to your Lordships. I beg to move.

Lord EVANS of CLAUGHTON moved, as an Amendment to the Amendment, Amendment No. 6: Line 8, at end insert ("or (c) subsections (4) to (7) below,")

The noble Lord said: Amendment No. 6, which stands in my name, is a paving Amendment to cover Amendment No. 7, and I should like to speak to both those Amendments for that reason. In principle, I very much welcome the Amendment that the noble Baroness has set down. I congratulate her and the Government warmly upon it. It may seem churlish, therefore, to move an Amendment of such length and apparent complexity as an addition to the proposals that the noble Baroness has made.

I apologise for the length of these Amendments, which I put down in this extended way. I could have moved a brief Amendment to include Commercial Premises Associations in the Amendment, but I realise that such a simple definition would properly have exposed me to the criticism that the Commercial Premises Associations were not sufficiently or closely enough defined by those words. The reason for the length is to give as tight and precise a definition as possible of the term "Commercial Premises Associations".

They are a new type of organisation not covered by the Amendment that the noble Baroness moved. My Amendment is framed to describe them and to limit them, and to give them the opportunity to apply for means to get themselves set up in a similar way to that proposed for co-operatives and the common ownership enterprises referred in the noble Baroness's Amendment.

The first of these commercial premises organisations is already in existence in London, in the shape of the Soho and Covent Garden Commercial Premises Association Limited. I understand that the Greater London Council is giving consideration to sponsoring something similar in other parts of London, and that town development trusts, which are very similar concepts, are being set up in many provincial towns, and similar enterprises are being considered in large inner urban areas such as Merseyside, where my experience mainly lies.

These bodies are not profit making. They are run with voluntary management committees and employ professional staff. The crucial difference between them and housing associations is that they operate on a self-financing basis, and they operate in areas—and this is the crux—where there is a mixed residential and commercial use in the same building or buildings. Housing associations cannot acquire premises which have a commercial user, while private property developers, unfortunately, are not, generally speaking, interested in financing mixed residential and commercial uses, because generally these locations are in secondary areas and, secondly, because small businesses are often not good covenants to private landlords. Schemes are usually too small and management costs are high, and there is as yet no proven track record for these associations.

They operate in particular inner urban areas and they offer a service to the local community and the local housing associations. They also take burdens—or potentially take burdens—off local authorities and they give mixed development a chance in areas where this is generally rejected, though I think most noble Lords would approve of the concept of mixed residential and commercial development. Local businessmen get involved in the regeneration; local bank managers, estate agents and accountants are involved as members of the management committee.

All that is sought in the Amendment is the opportunity for this kind of body in inner urban areas to have access to starter finance towards the initial expense of setting up such an organisation. They have a very important role in creating in inner urban areas an atmosphere of success and change. The proposals that I am putting forward and the kind of organisation for which I am pleading have received widespread support from all Parties in another place. It was the hope of those advising me that the concept that I am putting forward would have been accepted in the late stages of consideration of the Amendments that we are now considering. But as this did not happen I felt obliged, though at a fairly late hour because of the hope that had been expressed that the Government might take this up, to put down this Amendment in the hope that consideration could be given to these very important voluntary organisations which have a valuable part to play in inner urban regeneration. I beg to move.


I should like briefly to welcome Amendment No. 5, moved by my noble friend. I shall listen with particular interest to what she may have to say about the Amendment just moved by the noble Lord, Lord Evans. She has explained that Amendment No. 5 fulfils an undertaking which was given in another place, and, to those of us who have co-operative principles and co-operative development particularly at heart, this is a very welcome Amendment.

As was explained in another place, the Bill as already drafted would probably enable designated authorities to aid co-operatives, as well as other businesses. But, in my view, the development of co-operatives is so important and so particularly appropriate for the purposes of the Bill that separate and specific provision, which is contained in this Amendment, is very fully justified.

I would make only two points in support of it. The first is that the concept of partnership is very germane to the Bill—that is, partnership between local authorities and the central Government. This Amendment, I suggest, opens up the possibility of another partnership, which is—at least in principle—equally important. That is a partnership between local authorities and co-operatives in their area.

My second point concerns the special appropriateness, as I see it, of co-operatives as a means of industrial development under the Bill. The Bill, of course, is very much concerned with the industrial and social well-being of the local community. As we were saying on Second Reading, it seeks to counter the undue movement that has taken place if industry, of population and of the skills of workers away from inner urban areas. That is a process that has been going on in the past, and the Bill seeks to counter that.

It is the very nature of a co-operative organisation that it is local. It is a local enterprise, locally controlled. It depends on the direct and close involvement of the local workers as members of the cooperative in the decisions concerning the business carried on by the co-operative. No external board of directors, no external people, can sell it or move it or wind it up. It is the workers themselves—the members of the co-operative—who live in the area and who have their savings invested in the co-operative, who alone are entitled, under the law and by the rules of their society, to make decisions of that kind. Therefore, it seems to me that, in a Bill which is very local in its intent, a co-operative—so firmly based in the local community—is a most approp- priate instrument for fulfilling the purposes of the Bill. It is for those reasons that warmly welcome this Amendment.

Baroness BIRK

May I first thank my noble friend Lord Oram for his support for the Amendment that I moved, particularly because of his tremendous knowledge and experience of the co-operative movement. His contribution was extremely helpful and constructive.

I turn now to Lord Evans' Amendment to my Amendment. At first hearing, it is an attractive proposition, but I am afraid that I have to recommend that it should not be accepted. I do this for three reasons. First, it would not really provide for the kind of finance that is required. What the promoters of the Commercial Premises Associations are really aiming at is pump-priming grants and loans to tide the associations over while there is no return from the projects they are supporting. My new clause would only provide for assistance, for example, for legal fees, in establishing the associations themselves, and that has been particularly tailored to the type of operation to which I refer—the co-operatives and the common ownership projects.

Secondly, Commercial Premises Associations will already be eligible, like anyone else, for loans and grants under the clauses of the Bill. They would be in that same position. Thirdly, it would be difficult to exclude from the provision other institutions which are being set up for promotion of worthy causes if the CPAs were included.

I do not want to sound restrictive or bureaucratic on that last point, but when we are launching something like this, if we are to have the co-operatives—the common ownership enterprises—added to the very wide range of individual small businesses which one wants to help and to see revitalising the inner areas, I think that at this early stage it could be a great mistake to spread the net too far. If this is actually brought into the Bill, at which point does one stop?

Finally, although organisations of this type probably have a useful rúle to play in the inner urban areas, there is not at present any widespread indication that they are vital in helping to provide premises for small businesses and mixed use developments. As the noble Lord himself admitted, we are certainly only aware of the one association to which he refers. Therefore, in rejecting this, I am not rejecting the concept of the CPA, but I am saying that, certainly at this point, I do not think it really has a proper place in the Inner Urban Areas Bill.

Baroness YOUNG

I have listened with great interest to the arguments on both sides regarding this Amendment to the noble Baroness's Amendment. I must say that I have very considerable sympathy with what the noble Lord, Lord Evans, is asking for. It seemed to me that the proposal to extend the Bill in this way fell naturally as an Amendment to the Government's Amendment on co-operatives, with which I completely agree.

I could not quite understand the noble Baroness's final argument that, if this were to be included in the Bill, if would be necessary to include ail sorts of other worthy causes. My understanding of the Bill is that it is an attempt to regenerate life in urban areas, and this is one rather interesting example of what can be done. As the noble Lord, Lord Evans, explained, it is a suggestion for a development which includes commercial and housing provision. It therefore falls into rather a different category and, I should have thought, one much to be welcomed.

I take the noble Baroness's point that commercial developments can be helped under the Bill. The point about the Amendment, however, is that it is not just about commercial developments; it covers joint commercial and housing developments. Although the noble Baroness said in her first objection to the Amendment that the Bill would not necessarily provide all the finance that was required, it would at least help the establishment of these organisations.

If the noble Baroness feels that perhaps it is too much to include an Amendment in precisely these terms, would it not be possible, as she appeared to be in sympathy with the principle of it, for the Government to take this away and look at it and draft something which was perhaps slightly wider but which could include this particular type of development and others of a similar nature, which could only be of benefit for inner urban areas?


I am greatly obliged to the noble Baroness. Lady Young, for the point she has made. All I can do is to reiterate what she says. Admittedly, the finances available would be small, but they would be very much better than nothing at all. The kind of organisation which I have described is one which I should have thought played an extremely vital part in certain inner urban areas, helping to bring back life to areas which have previously been deserts in the evenings because of commercial use, and assisting in encouraging a vigorous and active life in the centre of our inner urban areas. As the noble Baroness, Lady Young, said, I detected a desire on the part of the noble Baroness, Lady Birk, to be helpful, and I wonder whether she might be willing, as has been suggested, to take this away and have a look at it and possibly bring something forward at a later stage. I feel that this ties in very closely with precisely the kind of things that the noble Baroness herself is trying to promote and that her noble friends are trying to promote.

Baroness BIRK

I tended to have sympathy there again because I am always interested in any new idea, and anything original, and it would also help in this particular Bill. But I think we must be fairly practical about it. The noble Lord, in putting forward what sounds like and could work out to be a good idea, is asking for something to he put into the Bill which at the moment we really do not know much about. He himself admits that there has been only one experiment in this area, and he is asking for this to be put into legislation which is an entirely different thing. I certainly cannot commit myself to having any change of mind—or say that my colleagues will—on Report about this, because the same arguments I am putting now will operate, that what we are being asked to do is to incorporate an idea into legislation, in an area where we are trying to deal with hard facts. If I may, I will write to the noble Lord and perhaps then I will be able to set out in greater detail the way I see the position.


I am greatly obliged for that suggestion. As I say, I think we are very close to agreement, from what I understand has been going on. I would hope that the noble Baroness would not resist a thing purely because of its novelty. Many things that we now accept as issues that have made a great difference in urban areas were novelties very recently, but if the noble Baroness is kind enough to write to me about this, I will, with leave, withdraw the Amendment at this stage and reserve my position on Report.

Amendment to Amendment No. 5, by leave, withdrawn.

[Amendment No. 7 not moved.]

On Question, Amendment No. 5 agreed to.

Clause 3 agreed to.

Clause 4 [Loans and grants for improving amenities.]

12.33 p.m.

Lord EVANS of CLAUGHTON moved Amendment No. 8: Page 4, line 17, leave out ("or").

The noble Lord said: This Amendment which stands in my name on the Marshalled List is a paving Amendment to Amendment No. 9 and I should like therefore if they could be discussed together at this stage. I want to assure your Lordships that this will be considerably shorter, both in length of the Amendment and the length of what I have to say, because I think it is a much more straight-forward matter. Since I understand it is the policy of Her Majesty's Government to transfer where possible freight from road to rail or water, that is why I have inserted the words: wharves, docks or railway sidings in my Amendment. Furthermore, I understand that it is the policy of the European Community not to discriminate against any particular mode of transport.

I think all of us from our experience will accept that all inner areas have railways and that derelict railways are some of the most appalling eyesores in the centre of some of our great cities. Many cities in inner urban areas, such as Liverpool, Salford, London, Bristol and many others, have either rivers or canals, and all the areas that I have mentioned have docks, many of which are in an advanced state of decay. I think some of the worst problems of the inner urban areas are created by the derelict condition of the dock areas. I think that anyone who read in The Times earlier this week the article on the Port of London would see that point, and anyone who visited the Mersey or any of our other great estuaries would appreciate that some of the worst dereliction in inner ubran areas exists in docks which for one reason or another have been allowed to decay, and for which no money for improvement appears to be available.

My Amendment would cover users of all types of transport, not just road transport. It would cover all types of transport, by rail and by inland and seagoing vessels. It would also cover the use of docks. Finally I added the words: shelters for users of public transport", because I cannot see anywhere that assistance is given to people who have to use public transport, and more than half the population of this country still has to do this. I think it is important that help should be available for the building and maintenance of shelters for people who ore obliged to use public transport. Many of the worst eyesores and problems are in rain-swept areas particularly again—because my experience lies there—in the North of England. One sees areas where shelters for public transport are damaged beyond repair, where they do not provide any shelter at all and where they contribute to the problems of inner urban areas. That is why I include "shelters for users of public transport". In other words, what I am trying to do is to extend the uses here, so that problems relating to public transport, problems relating to docks, to inner urban waterways, to rivers and to docks generally are brought within the compass of this clause. I beg to move.

Baroness BIRK

As I understand it, the Amendment seeks to enable designated district authorities to make grants and loans for bus shelters for people waiting for transport. I can understand the bus shelter point, but I am not sure whether the noble Lord is talking about shelters for people waiting at railways, docks and wharves. Perhaps he could just clarify that. I am not quite sure about it.


My wish was that the first part, shelters for users of public transport", would bring into the orbit of this clause public transport, which is not mentioned at all. I am sure that it is intended that the measure should extend to it, but by using the words in my Amendment I deal first with public transport and then I go on to deal with wharves, docks and railway sidings, not for users of public transport but for generally extending the points for which support is given in Clause 4 of the Bill. Clause 4 refers to: …the construction of parking spaces, access roads, turning heads or loading bays", I am saying that, in addition, works should include work on wharves, docks and railway sidings and shelters for users of public transport. If I had put it that way round, I think it would have been clearer.

Baroness BIRK

I thank the noble Lord. I appreciate that it is very difficult to draft these Amendments. Now that I am clearer about it, when the noble Lord refers to shelters for public transport I can say that these are certainly already covered because they can be financed by local and public authorities, so no new provision is necessary in the Bill. He is also—as I now gather from what he has just said—suggesting that there should be assistance for constructing docks. By taking out the "or" and just stringing the words together the Amendment is not clear. It seems to refer to shelters for people waiting at docks or railway sidings and so on. If I am right, and he is asking that there should be assistance for the construction of docks, wharves and so on, this is something that I should like to have the opportunity to consider, because I think I misinterpreted what he meant by his Amendment. I wonder whether the noble Lord would say if he was concerned with the construction and not just with the shelters.


Indeed. My concern was to extend the clause to cover the construction and improvement of railway sidings, wharves, docks and so on because, as I said in my speech, these in many ways contribute more than any other form of inner urban dereliction to the problems of inner urban areas. It was for that purpose that I sought to extend the provision. I concede that it was not the best draftsmanship in the world, but one is learning slowly as one goes along, and I apologise for misleading the noble Baroness.

Baroness BIRK

The noble Lord has no need to apologise. Drafting is very difficult, even when the professionals do it. It does not always come out right the first time. My reply on the question of shelters still stands. This is, as for other bodies, public authorities and local authorities. If we have now established that, and he will accept it, then I will look into the question of the construction side.


I am greatly obliged by the noble Baroness's acceptance of that, and on that ground I withdraw the Amendment that stands in my name.

Amendment, by leave, withdrawn.

[Amendments Nos. 9, 9A and 9B not moved.]

12.41 p.m.

Baroness BIRK moved Amendment No. 10:

Page 4, line 18, leave out subsections (3) and (4) and insert— ("(3) Subsections (2) and (3) of section (Loans and grants to common ownership and co-operative enterprises) above shall apply in relation to the making of loans or grants under this section as they apply in relation to the making of loans or grants under that section.").

The noble Baroness said: I spoke to this Amendment with Amendment No. 5. I beg to move.

On Question, Amendment agreed to.

On Question, Whether Clause 4, as amended, shall stand part of the Bill?


May I ask my noble friend whether she would have a look at Clause 4 before Report stage? I am not asking for an answer now on these points, but I want to make sure that subsection (2) has not been drawn too restrictively. I will take the sort of example I have in mind. This is about trying to help an area with amenities—if one takes subsection (2)(d): the cleaning or demolition of structures or buildings". One kind of thing one finds in derelict areas—I have them in my new town—is, say, a decaying church which is no longer required by the Church but which some voluntary body would gladly restore rather than demolish, or clean, and put to community use in some form. It is not always the local authority which does that. It might be some trust or collection of citizens. I wonder if this provision is not rather restrictively drawn. These buildings are often as worthy of restoration as of cleaning, or demolition.

Then, looking at subsection (2)(b), landscaping and the planting of trees, shrubs and plants", and (2)(c), the cleansing of watercourses", again, one wonders whether such things as paving associated with the landscaping, even on private land, could be included, and whether one is reaching the point of restriction to so narrow a definition that some of the interesting things that could be done and would be regarded as part of the total amenity will be excluded by the words in the subsection.

I say no more than this at this stage. It is a case of sitting down and thinking of all the nice things that can be done with some of the dereliction that we see around us in the inner urban areas, and making sure that we have not been too restrictive in the definitions in the clause. I would be happy if my noble friend would agree to have a look at that sort of consideration before we reach Report stage.


Before the noble Baroness replies, may I make the point to the noble Lord who has just spoken that the two Amendments that I am not moving on this occasion cover the points which he has just made? Perhaps he and I, and Lord Evans and the noble Baroness, could get together before the next stage and concoct a series of Amendments which will meet the general point which he has been making.

Baroness BIRK

There is nothing that I want to say about this except that I will have another look at it. My noble friend Lord Northfield made a good point on the question when he referred to the restoration and rehabilitation of buildings, and if I may I will take this back and look at it. I would, however, point out at this stage that they are not all equal. There are problems that I can easily see with some of these paragraphs of subsec- tion (2). I will make no promise now, but I will certainly look at it.

Clause 4, as amended, agreed to.

Clause 5 [Grants for converting or improving buildings]:

[Amendment No. 10A not moved.]

Baroness YOUNG moved Amendment No. 11: Page 5, line 1, leave out ("£1,000") and insert ("£1,500").

The noble Baroness said: In moving this Amendment I am conscious that we have been round this course before. I read carefully what was said both in Committee in another place and on Report. I put this Amendment down because it seemed to me that there is a real point as to whether or not Clause (5)(3)(b) would actually meet the case of either providing extra jobs or retaining extra jobs in these areas. The first question that I wish to ask the noble Baroness is this. On what basis was the sum of £1,000 drawn up, and is it recognised that it is large enough to meet the case? I do not feel strongly about the sum of £1,500, but I can indicate why I put it down as an Amendment. I have done so because my understanding is that in order to provide a job, at any rate in London, it is generally regarded that the cost is probably of the order of between £2,000 and £3,000. It therefore follows that 50 per cent. of the cost would be about £1,500, and it is for that reason that I have put in this particular figure.

I did so also because in making a grant to help employment, or to keep jobs, the grant is either 50 per cent. of the cost of carrying out of the works—that is to say, doing up an old building—or £1,000 per job created or preserved. Many illustrations have already been given which show that subsection (b) would amount to a very much smaller sum of money than would subsection (a). As the Bill reads, the proposal is that whichever is the lesser sum of money is the sum which will be accepted. It is therefore worth having yet another look at this point, because I am sure that we are all agreed that we need to create opportunities for employment in inner cities, and certainly to retain opportunities where they exist.

I do not feel that this is an Amendment to do more than probe the question. It is not one that I would press. As an alternative, which I have not tabled but which seems to me would fit the case, we could leave out subsection (b) altogether; that might be another way of doing it. I hope, however, that the noble Baroness will recognise that there is a point here: that the sum of £1,000 is already too low, that with inflation continuing it will become progressively too small, and it will not, therefore, meet the case that it is designed to. I hope that in her reply she will tell us why the figure of £1,000 is in, but I hope much more that she will be able to tell us that she is quite certain that it will meet the case as I have identified it.


May I express some guarded sympathy for the noble Baroness in this Amendment. I realise that at the top of page 5, about which we are talking, any other amount could be specified in an order made by the Secretary of State. In other words, it is flexible to some extent. Nevertheless, one has one's eye on the figure £1,000 as put there, and relates it back to subsection (a). It is obviously an attempt at "guesstimating" what is 50 per cent. If it is any guide, the cost today of new building in provision of jobs in new factories, especially small ones—and a lot of these will be small—in the rural areas is approaching £20 a sq. ft. in building. When one works out the cost of 1,000 sq. ft. which, by the usual rule of thumb, is expected to provide about four jobs, one can see that in the case of new buildings one can often get a cost of about £5,000 a job.

On the other hand, when one looks at the cost of converting old buildings, which is what this is about, one is lucky if one can get it to 50 per cent. of that, which is the sort of figure that the noble Baroness has mentioned—£2,500. My experience in converting premises as far away as an old factory in Buckfastleigh, in Devon, or a very beautiful village school in Middleham, in Yorkshire, which I hope we shall be able to convert, is that we shall he very lucky if we can get away with anything under £2,500 to £3,000 a job.

I have some sympathy with the noble Baroness. I think that this Bill was originally drafted before the recent up-surge in industrial building costs took place. For safety's sake and certainly from my own experience, I should have thought that there was a good deal to be said for pitching it slightly higher than the figure of £1,000 with which we are faced in the Bill as drafted.

Baroness BIRK

When one is talking about figures in this way it is always difficult to land on the one that will be absolutely right; also there has to be room for flexibility which, as my noble friend Lord Northfield pointed out, is covered in the Bill. The limits on these grants for improving or converting buildings in the industrial improvement areas were very carefully thought out before they were chosen. We think it right that there should be a healthy contribution from the private sector in such conversions. That is why we have the overall 50 per cent. about which there appears to be no disagreement. One has to try to find a careful balance so that one does not unnecessarily subsidise expensive conversions from public funds; and therefore we have had to include the cash limit. We are talking about work-manlike conversions of old industrial property to provied accommodation as cheaply as possible for new small firms. These conversions clearly need to meet all the legal requirements; but we are quite frankly not looking for unnecessary frills in this operation.

It is true that there is not much information on the cost of converting older industrial property for new use, and it is again variable. But what there is indicates to us—and this takes into account the projection of the time that the Bill takes to go through and is not just looking backwards at it—that a total cost of £2,000 for every person to be employed in the building (which is the way that it has been assessed) is not unreasonable. If, however, there is clear evidence that the figure has turned out to be too low, my right honourable friend can make an order to change it.

The fact that this provision is included in the Bill ought to allay fears, because I am sure that noble Lords, the noble Baroness who spoke and my noble friend Lord Northfield are just as aware as I am of the need to keep these cash limits and to try to find the right balance between giving adequate help but not being over-generous, simply because we cannot afford it. No Government could afford to do so at this time. But if the figure appears too low, my right honourable friend can make an order to change it. I can assure noble Lords that the figure will be kept under review, because we are also aware that this is something that we must approach in a flexible manner. Only experience will show whether it is right. I am convinced that it is reasonable at the moment. Therefore, for the time being, I ask noble Lords not to press the Amendment.


May I support my noble friend Lord Northfield and the noble Baroness, Lady Young, on this matter. I quite understand the Minister's explanation of the case, but this is an absolutely unrealistic figure at this time. Anybody who has had the smallest alteration done—even calling in a plumber — would know that.

Baroness YOUNG

I listened with great care to what the noble Baroness, Lady Birk, said about this and I still do not feel that she has quite answered my question as to where she got the figure of £1,000 from. She said—and I hope that I am repeating this correctly—that the Government estimate that it costs £2,000 approximately to provide a job. I was very interested in what the noble Lord, Lord Northfield said, because he has had a great deal of experience in these matters; and he estimates that it costs £5,000 to provide a job if one starts with a new building and probably between £2,500 and £3,000 starting with a converted building. My evidence is very much the same as that of the noble Lord, Lord Northfield, on this matter. It therefore seems to me that, with all the evidence we have, we are in fact beginning from too low a figure.

I absolutely agree with the noble Baroness, Lady Birk, that we do not want unlimited subsidies. I have no quarrel at all with the restriction in subsection at all with the restriction in subsection (3)(a) to, 50 per cent. of the cost of carrying out the works". I think that is quite fair. What does concern me is that when the amount of the grant comes to be given it has to be whichever is the lower, either 50 per cent. of the cost or £1,000 per job. If the figure of £1,000 is too low, the grant will not be effective because the work will not be done. Therefore, not only will this not provide employment, but it will not preserve a derelict industrial building. Many old industrial buildings are very fine buildings indeed and, if converted, contribute a great deal to the architectural heritage of industrial towns. I was looking at some in Greater Manchester, only a few weeks ago, and there are some very striking buildings that are empty and could be used. So for both these reasons, this would be valuable.

I think that this is a point on which we are all agreed. But to leave it at the start of a Bill to the Secretary of State to make an order means that, if the figure proves to be low, we shall wait at least a year to find out and in the meantime nothing will happen. If there has been one argument that has run through this entire debate, it is the need to move expeditiously on this Bill; and that is my objective.

We have had a good discussion this morning. I shall read very carefully what the noble Baroness has said and, unless I am fully satisfied, it is a point to which I shall return at the next stage of the Bill. In the meantime, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Baroness BIRK moved Amendment No. 12: Page 5, line 9, leave out ("(3) and (4) of section 4") and insert ("(2) and (3) of section (Loans and grants to common ownership and co-operative enterprises)").

On Question, Amendment agreed to.

Clause 5, as amended, agreed to.

1 p.m.

Lord BYERS moved Amendment No. 13: After Clause 5, insert the following new clause:

Power to guarantee loans

(".—(1) Without prejudice to the provisions of any enactment, a designated district council may, on such terms as it thinks fit, guarantee, or join together with any other person in guaranteeing, the payment of the principal of, and interest on, any money borrowed (including money borrowed by the issue of loan capital) by any person for the purpose of enabling or assisting him, on any land in their area of which he is the owner or lessee or intended owner or lessee, to build an industrial or commercial building or to extend or improve any such existing building.

(2)(a) In this section "commercial building" means any building or part of a building used or designed for use—

  1. (i) for the display, storage, packaging or handling of any thing in the course of a trade or business; or
  2. (ii) as a conference centre.

(b) For the purposes of this subsection, premises which are used or designed for use for providing services or facilities ancillary to the use of other premises as a commercial building or are, or are to be, comprised in the same building or the same curtilage as those other premises shall themselves be treated as a commercial building.").

The noble Lord said: It may be for the convenience of your Lordships if in moving Amendment No. 13 I speak also to Amendments Nos. 18 and 19, which will, I hope, enable us to get through rather quicker.

This clause would give to a designated district council the power to guarantee, alone or with others, the payment of the principal and interest on money borrowed by a person or firm for the purpose of building an industrial or commercial building or for extending or improving any such existing building. My concern is to make available to authorities covered by the Bill every reasonable vehicle for enabling more money to be obtained to rehabilitate the inner areas and to generate new jobs. I have in mind that guarantees will be one of the ways in which large industrial and commercial firms in the private sector may be able to assist smaller firms and organisations to set up in business or to expand, and in doing so they will, of course, take the risk. But I see no reason why the designated authorities should not be able, if they so wish, to guarantee loans which can be obtained from sources such as banks, insurance companies and so on. Amendment No. 13 does not impose a duty on designated districts, but where it is implemented it will result in an increase in the availability of cash for industrial and commercial development and in the creation of jobs.

Amendment No. 18 is a new clause which empowers the designated district authority, again, to guarantee the payment of rents and other sums payable in respect of an industrial building or any sum payable to any statutory undertakers, such as the Post Office, electricity and gas boards and others. This, again, is intended to help to get things moving at a faster rate. It is permissive and not mandatory, and I would welcome the Government's view on the desirability of doing something along those lines.

Finally, I turn to Amendment No. 19. This is another new clause, and the intention here is to empower the designated district authority to lend money to people or firms to obtain machinery or equipment for industrial or commercial purposes; to provide capital for the conduct or development of any industrial undertaking and, most importantly, to secure advisory or other services to help in the promotion of the undertaking.

Let me make it clear once again that I believe that the private sector can and will be interested in helping quite substantially in this field, but it is going to take time to set up the appropriate systems within the partnership areas to enable the private sector resources to be tapped for cash and for seconded expertise. In the meantime, there are a number of cases where a worthwhile job-creating project is either held up or prevented from expanding for the lack of a simple piece of equipment costing only a few thousand pounds. Similarly, there are projects which get bogged down at the outset for the lack of good professional advice on how to ensure that the project is a viable one, and this is vital. The cost need not be too high, but I believe it is essential to incur it.

There will be new and existing projects which need professional marketing assistance or the undertaking of a market survey or a product study, and my purpose in all these Amendments is to find a way of getting things moving in the right direction as quickly as possible. I do not, I repeat, see this as a substitute for involvement of the private sector in such projects. I believe their involvement is very important, indeed vital, to the overall success of the regeneration policies; but these Amendments, if accepted in principle, provide an additional source of cash which, hopefully, will be repaid for re-use by new projects. I beg to move.


I should like to say, from my experience in visiting and assisting and considering the problems of these inner areas, that what the noble Lord, Lord Byers, is urging now is very necessary and I hope that the noble Baroness will give it her sympathetic attention.

Baroness BIRK

I am very grateful to the noble Lord, Lord Byers, for taking his three Amendments together. I think it is of considerable help to the Committee as they are very closely linked. I can see the point as he explained it, as he did with great clarity, and what it is he is wanting to do; but I must explain to him why I am resisting him and the Amendments.

We believe that the Inner Urban Areas Bill as it stands contains provisions which are commensurate with the needs of the inner cities; and the Government in fact strengthened the Bill during its course through another place in order to ensure that the local authorities had sufficient powers to play their full part in stemming the decline of industry in the inner cities and regenerating the economies of those areas. However, the new clauses which are proposed in the three Amendments moved by the noble Lord are, I think, going too far over the other way. As the noble Lord, Lord Evans, will know, successive Governments have committed themselves to a strong regional policy to encourage industry to expand in the assisted areas in parts of the country suffering from long-standing and deep-seated industrial problems.

A White Paper on policy in inner cities makes it clear that regional policy must continue, and in our view to accept this clause would harm the interests of the assisted areas. It would mean that local authorities in inner areas outside the assisted areas would be able to offer assistance of a kind which would not be available to local authorities in the assisted areas generally. This would blunt the effect of the Government's regional incentives under the Industry Act 1972, which are designed to encourage firms to move to the assisted areas, and this is not the intention of the Inner Urban Areas Bill. This Bill was carefully drawn up in order to enable local authorities to have a substantial impact on the special problems which industry faces in the inner city, but to do this without disturbing the overall priority of the assisted areas.

Amendment No. 13 seeks to enable designated district authorities to guarantee loans given to industry. The Government themselves have power to give guarantees under the Industry Act and are currently considering whether such assistance would be appropriate in the proposal, like Trammel Crow Limited, to develop a trade mart in the London dock-lands. A scheme has also been introduced to allow small and medium firms in the assisted areas to borrow from the European Investment Bank. They are guaranteed against exchange loans and, where necessary, the Department would also provide a guarantee of repayment to the bank.

Nevertheless, apart from the EIB scheme and some special schemes for shipbuilders, guarantees under the Industry Act are rare. Most selective assistance is in the form of grants and loans. Similarly, the assistance under the Inner Urban Areas Bill takes this form. The Government have reservations about guaranteeing as a general form of assistance. A guarantee scheme for loans to small firms is one of the proposals currently being considered by the Chancellor of the Duchy of Lancaster in his review of the problems of small firms. He has asked Neddy, the committee on finance for industry, for their views. It is also among the proposals considered by the Wilson Committee; and I think we should agree that it would be quite wrong to plunge into guarantees for inner cities alone before a decision has been taken on a national loan guarantee scheme which is currently under consideration. Moreover, it would be anomalous for such assistance to be available generally in the inner cities but not in the assisted areas. The Bill already provides adequate powers for local authorities to give financial assistance for land and buildings and for work on land.

The Government's reservations about the principle of assistance by way of guarantee also apply to the second of these new clauses, Amendment No. 18, which will enable any designated district authority to guarantee rents and other payments. Clause 9 of the Bill already enables local authorities to give grants to assist with rents in partnership areas. This clause is, therefore, an unnecessary addition as far as the partnership areas are concerned, while to extent assistance with rents to every designated district would erode the advantage enjoyed under the Bill by the partnerships in view of the greater problems found in those areas. In fact, an identical clause was proposed for the Bill in another place but there it was rejected.

The third proposed clause, Amendment No. 19, moved by the noble Lord, Lord Byers, would allow any designated district authority to give loans towards the cost of industrial plant and machinery or to provide industry with capital, or secure any advisory or other services for industry. The loans could be on any terms; for example, a local authority could give loans on heavily subsidised terms. We are strongly opposed to this clause, since it would seriously erode the effectiveness of the Government's regional incentives under the Industry Act. Also— and this is very important—it would go beyond the intention of the Inner Urban Areas Bill. The Bill is not meant as a means of generally subsidising firms in inner cities; its aim is much more to provide selected local authorities with extra powers to tackle the special problems encountered by firms there—namely the problems relating to inadequate sites and inadequate, old or expensive buildings. This clause on the other hand is concerned with matters which are quite unrelated to these special problems. It is for all these reasons that I ask the House not to support these three clauses.


I sympathise with the difficult position that my noble friend is in on these proposals. I should like to say a particular word about Amendment No. 19. The discussions which the Chancellor of the Duchy of Lancaster has been having about small firms have revealed that we are in a rather ridiculous situation in this country. In regard to small firms, we have in the Council for Small Industries in Rural Areas, CoSIRA, a system of capital loans, machinery loans—I am looking at Clause 19 in using these words—and advisory services for firms in the rural areas with some special systems in these matters available in the areas suffering from depopulation. The Chancellor has found in considering the small firm problem generally that we have nothing equivalent to this in, the urban areas. In other words, where most of the small businesses are we have nothing equivalent to CoSIRA. CoSIRA with its services is dealing with a minority of small firms in the country. We have this all the wrong way round as history has developed.

I sympathise with my noble friend in resisting these Amendments for the reasons she gives, but I feel I must say that it is high time that the imbalance in this matter as between the urban and the rural areas was rectified. The Chancellor has been considering it for some long time now— indeed, for the best part of a year, to my knowledge. I am very pleased with the number of steps which the Government have taken to help small firms in general. This has been one of the best breakthroughs we have had in the last 12 months. The Government and my noble friend deserve all congratulations for the great steps that have been made in this direction, but this one is a step the need for which is outstanding. It really is time that a general service equivalent to CoSIRA was built up for the urban areas. That would then, I am sure, satisfy the noble Lord, Lord Byers, insofar as he is talking here about the small firms.

I would say to the noble Lord, if I may, that I think we all ought to join in putting pressure on the Government to put this nation-wide urban service into existence without much more delay. It would help him a great deal on the proposals he is making. I will say nothing about the remainder of his Amendments, because I am not equipped to do so. The price of withdrawing these Amendments, if the noble Lord does so, is that we ought to be asking the Government to make haste on this late stage of help for small businesses in the urban areas. It would provide an immense relief and would be greatly appreciated, I am sure, by the partnership authorities who are involved in this Bill.


May I make two further points before the noble Lord, Lord Byers, decides whether to press or to withdraw his Amendment. It seems —particularly in the light of what the noble Lord, Lord Northfield, has said—that we ought not to let slip this opportunity to give the designated districts the powers which the noble Lord's Amendment seeks to give them. But I take the point the noble Baroness is making that to give them the powers without any restraint would perhaps blunt some of our other industrial and regional policies. Is it not therefore possible for the noble Baroness to consider accepting the general intentions and purpose of the Amendments of the noble Lord, Lord Byers, and incorporating them in the Bill, but at the same time giving the Secretary of State power for the time being to restrain the local authorities in the exercise of their powers? This would mean that when the Chancellor of the Duchy of Lancaster had reported, the power would be there on the Statute Book and available for the designated inner urban areas to use to whatever extent and at whatever moment the Secretary of State subsequently decided.


I am grateful to the noble Baroness for her very full reply. This has been a very useful discussion. I am grateful also to the noble Lord, Lord Northfield, for what he has said about the small businesses and the imbalance between the urban and rural areas. Without wishing to make this into any sort of partisan forum, I would remind him that Harold Lever's appointment was requested specifically by the Liberal Party under the Lib-Lab pact and very quickly acquiesced in by the Prime Minister; it has had a very good effect indeed. We on these Benches are extremely grateful for what he and his colleagues have achieved.

I am sorry that the idea of guarantees should be resisted at this stage, but I quite understand that if a proposal for a national loan guarantee scheme is being discussed, it would be inappropriate to put that into the Bill until we had had a pronounced view on it. In the light of what has been said and of the very full answer, I would wish to study that answer in detail and in the meantime to withdraw this Amendment.

Amendment, by leave, withdrawn.

Clauses 6 and 7 agreed to.

Clause 8 [Loans for site preparation]:

Baroness BIRK moved Amendment No. 14: Page 6, leave out lines 33 to 35 and insert ("by any statutory undertakers or other authority").

The noble Baroness said: I beg to move Amendment No. 14. This is a minor Amendment to correct what now appears to be a slightly misleading piece of drafting in subsection (3). In making specific reference to one type of authority in Scotland, the subsection appears to exclude from the scope of the clause statutory undertakers in Scotland. As this is not the intention, the Amendment therefore inserts some simplified wording that makes this clear. I beg to move.

On Question, Amendment agreed to.

Clause 8, as amended, agreed to.

Clause 9 [Grants towards rent]:

[Amendment No. 14A not moved.]

Baroness BIRK moved Amendment No. 15: Page 7, line 20, leave out ("(3) and (4) of section 4") and insert ("(2) and (3) of section (Loans and grants to common ownership and co-operative enterprises)").

The noble Baroness said: I have already spoken to this Amendment. I beg to move.

On Question, Amendment agreed to.

Clause 9, as amended, agreed to.

Clause 10 [Grants towards loan interest]:

Baroness BIRK moved Amendment No. 16: Page 7, line 36, leave out ("(3) and (4) of section 4") and insert ("(2) and (3) of section (Loans and grants to common ownership and cooperative enterprises)").

On Question, Amendment agreed to.

Clause 10, as amended, agreed to.

1.20 p.m.

Baroness YOUNG moved Amendment No. 17: After Clause 10, insert the following new clause:

("Applications for Improvement Grant

.In section 57(3) of the Housing Act 1974 (general provisions relating to applications for grants) there shall be inserted after the words "the date of the application", the words: "In a designated district, a local authority shall entertain an application for a grant from any applicant who has the written permission to apply of the person who has, in every parcel of land on which the relevant works are to be carried out, an interest which is either an estate in fee simple absolute in possession or a term of years absolute of which not less than five years remain unexpired at the date of the application".

The noble Baroness said: I put down this Amendment on improvement grants because we have not at any point discussed housing, and it is such an important matter in inner city areas that I am, in a sense, testing the temperature of the water with this Amendment. After our considerable discussion on the first Amendment on the definition of "social need", I find it difficult to believe that housing is outside the Long Title of the Bill. Indeed, on reading again the Department of the Environment Press Notice, I see that one of the considerations on making a designated area is that in some areas housing and social difficulties predominate.

This Amendment deals with only a very small aspect of the totality of housing problems, but it is one which is really a matter of importance to those of us who would like to see property rehabilitated, and the opportunity given to those who wish to buy rehabilitated property to do so. I have put it down because in many instances up and down the country we have what is really a chicken-and-egg problem. A local authority will refuse to give an improvement grant until a person has managed to get a mortage. On the other hand, the building societies refuse to grant a mortgage until the person applying for the mortgage has managed to get an improvement grant. The result of this situation is that nothing happens; the person cannot get the mortgage and the house is not improved.

I believe that one of the suggestions for dealing with this has been that local authorities should give people in this situation a written indication that they would be given a grant. Unfortunately, many local authorities do not follow this procedure, and the purpose of this Amendment is simply to rectify what seems to me to be an absurd situation, one which I am sure everybody in the Committee would wish to see put right, because it is of no benefit to the inner city, let alone to the individuals concerned. I have put it down in the hope that the Government will look favourably upon it. I beg to move.

Baroness BIRK

I understand entirely what the noble Baroness is seeking to do in this Amendment. I also recognise and sympathise with the chicken-and-egg situation which often faces purchasers where they are having to get both a mortage and an improvement grant. It is the first-time purchasers of the cheaper, older houses who have mostly encountered these difficulties and to which the Government's Green Paper on Housing Policies drew attention. Administrative measures have been taken to tackle this chicken-and-egg problem whereby a prospective purchaser cannot obtain a loan until he has secured an improvement grant, but the local authority cannot entertain a grant application until he owns the property, and there are encouraging signs now that these measures are overcoming the problem. If they were not, I should be very much more receptive to the noble Baroness's Amendment, because I am in entire agreement that something must be done to help this particular deadlock, which, frankly, becomes quite ridiculous.

The measures already taken are twofold. First, the Building Societies Association has advised its members that they might reasonably make a loan if a local authority indicates informally its intention of making a grant. Secondly, the Department of the Environment has encouraged local authorities quite firmly in DOE Circular 38/77 to give informal indications of the availability of the grant.

The impression which the noble Baroness had and gave was that probably most local authorities were unwilling—or did not know about—or were not prepared to give an informal indication of the availability of a grant. But a recent survey carried out by a leading building society found that nearly 90 per cent. of local authorities were prepared to give an informal indication of the availability of a grant upon which building societies could proceed to offer a mortgage. This suggests that the problems which undoubtedly arose in the past should no longer do so in the future. This is an impressive figure which encouraged me enormously.

I am aware of the recent article in the May edition of Roof which criticised the present arrangements on the grounds that the local authorities are unwilling to give informal indications of grants, but, frankly, the findings of the building society survey do not support this criticism. Incidentally, their survey was not concerned with just their own business but was a survey right across the field. But if a small minority of local authorities is still reluctant to give informal indications and this is giving rise to problems in a few localities, we would certainly try to deal with these remaining difficulties through further discussions with the local authorities concerned. If noble Lords are aware of any specific examples where difficulies of this kind are still arising, I should be very grateful if they would let me know.

The proposed new clause in the Amendment moved by the noble Baroness has disadvantages of its own and could create more difficulties, unfortunately, than it is intended to solve. This is in addition to the fact that we now know that the vast majority of local authorities is prepared to give these informal indications.

Informal indications—if they work and are given—have positive advantages for the prospective house purchasers, since under them they can obtain what amounts to a decision in principle on the availability of grant without having to go to any very great lengths of expense in order to get this. If a prospective purchaser had to comply with a formal grant application procedure, he would have to supply a considerable amount of detailed information about building proposals, detailed estimates and possibly incur the expense of having plans drawn up. A prospective purchaser would be placed in a difficult situation as he would not have detailed information about the house, such as drainage arrangements, precise room measurements and other matters, in order to work out his proposals in sufficient detail for formal grant purposes. Then, if for any reason he did not complete his purchase of the house, his grant application would have involved him in unnecessary time and also, very likely, expense.

Further, there is often more than one potential purchaser and the proposed clause could lead to several grant applications being made for the same property. There would then be a number of people losing all this time and also going to considerable individual expense. Some potential purchasers might have different proposals for improving the property, which would also result in additional grant applications for the same property. The clause would, therefore, open the door to an unlimited number of grant applications, some of which would prove abortive or merely speculative, and it would also create significant extra work for the local authorities.

It is for all these reasons that I feel unable to accept the clause, but what I can undertake is that the Department will continue to encourage local authorities to institute this system of informal indications and will be only too ready to pursue any remaining difficulties that arise. And, as I said earlier, I shall be very anxious to hear of them where they apply to any particular local authority.

Baroness YOUNG

I should like to thank the noble Baroness for that reply. I always accept that any Amendment I put down is badly drafted and does not really meet the case, but the purpose of this Amendment was to discuss the issue that I raised. I recognise that the Amendment itself goes somewhat wider than the particular issue, so I do not press it on those grounds.

I am grateful for the opportunity to have discussed this matter, and perhaps the noble Baroness would be kind enough to send me the report of the building societies on this matter, which I should be most interested to read. With the assurances that she has given, I will withdraw the Amendment. I will read carefully what she has said and if I have further information that I feel would be helpful at another stage, I will consider this matter again. But, in the meantime, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

[Amendment No. 18 not moved.]

[Amendment No. 19 not moved.]

Clauses 11 to 14 agreed to.

Clause 15 [Financial provisions.]:

1.31 p.m.

Lord SANDFORD moved Amendment No. 20:

Page 10, line 3, at end insert— ("(2) The Secretary of State may, with the consent of the Treasury, make grants for assisting establishments engaged in promoting or assisting schemes and research relating to, and dissemination of information with respect to, the enhancement of the physical environment and the promotion of employment in industrial improvement areas.").

The noble Lord said: I beg to move Amendment No. 20 in the names of my noble friend Lady Young and myself. This is a probing Amendment at this stage to secure a short debate on the powers of the Secretary of State to give grant aid to national voluntary bodies engaged in promoting environmental improvement works in areas of special need, and to do so in preparation for the meeting which I understand the Secretary of State is to have with the National Council of Social Service on Tuesday next week—which was envisaged when we had our Second Reading debate but has not as yet, I understand, taken place.

Before going any further, I must declare an interest as the president of one national voluntary body—the Council for Environmental Education, which has been very handsomely treated by the Department; as the chairman of another, Task Force North, which for the time being has been rebuffed; as a member of a third—the British Trust for Conservation Volunteers, who are still waiting, although we are two and a half months into the financial year, to hear whether or not their quite substantial grant is to be continued; and as one who is associated, but not directly, with a number of other regional voluntary bodies who, surprisingly at this stage, appear to have had their grants, which they have had for some years, cut off altogether.

It seems to me that if Her Majesty's Government are in earnest in what they say in paragraph 34 of the White Paper, the voluntary organisations and community groups are to have an increasing rôle, over the years ahead, in assisting local and central government strategy for the regeneration of the inner city areas. Voluntary organisations are already active in the social service and environmental fields. This was clearly demonstrated by the findings of the Wolfenden Committee, and illustrated in the debate initiated by my noble friend Lady Young only a few months ago, in January.

Already many voluntary bodies are active at the local level, making efforts to direct their activities to assisting the local authorities who are the main agents of the Government in the complex business of planning and implementing their inner area programmes. Most of these local organisations, particularly those on the social side, are assisted in their efforts, guided and advised by national and regional organisations which carry out information gathering, research and promotional work on behalf of their local affiliates.

At the national level this work is already long established in the fields of personal social services, education and housing, where support is also often forthcoming from the relevant Government Departments. Work is also well established in the field of environmental conservation and is growing in other environmental fields. But in the new fields to which we now need to pay particular attention—the economic, employment and investment fields, which are so important now—there are far fewer national voluntary and charitable organisations undertaking work to help promote local developments. It is here where we need to see a substantial increase over the next few years.

There are three reasons, which I should like the noble Baroness to bear in mind and perhaps comment on, why this further increase is called for. First, there is the increasing public awareness of the damage that is being caused by the existence of so much derelict land and buildings. Secondly, there are the employment schemes administered by the Manpower Services Commission, which are being increasingly used, especially by voluntary bodies, to undertake small-scale environmental improvements and establish small-scale businesses such as the noble Lord, Lord Byers, was talking about just now, and to assist them and advise them until they become viable economic projects in their own right; and, in doing all this, to harness and train the available supply of labour in the inner cities which at present is unskilled and untrained. Thirdly, there are the expanded terms of reference of the Urban Programme to cover environmental and economic schemes. That is the new scenario in which the voluntary organisations are working.

It is true that the voluntary organisations can already benefit from the broad grant-aiding powers of local authorities—where forward-thinking local authorities choose to use these powers imaginatively. They can also benefit from grant aid made available to them through the Urban Programme. In addition, the Inner Urban Areas Bill will allow designated local authorities to make loans or grants to persons, which will include voluntary organisations, to undertake environmental improvement work.

However, I believe that there is also merit in the Government's giving serious consideration to increasing the role of the national and regional voluntary organisations in the environmental and economic spheres, for two reasons. The first is that the support of national voluntary organisations in these fields will enable more effective development to take place at the local level—and a great deal of that development will be hampered if they are not getting strong guidance from the centre—and thus assist the Government in achieving their objectives for the inner cities. Secondly, it would be very much in the spirit of the inner cities White Paper for the Government to have an additional inner area dimension in their grant-giving policies to national voluntary organisations working in the environmental and economic fields.

So my Amendment, which is to Clause 15, is designed to provide those powers if they are lacking, or in order to hear from the noble Baroness, if they are not lacking, why they are not being used used as extensively as those arguments would seem to indicate that they should be. I know that the Secretary of State already has certain grant-giving powers in relation to national voluntary organisations which are based, among other things, on Section 253 of the Town and Country Planning Act 1971. This section authorises Exchequer grants, for example, to the Centre for Environmental Studies and other bodies concerned with planning research which might be appropriate. But my submission is that either these powers, if the Secretary of State does have them, are not flexible and are not all that they should be—in which case this Amendment offers an alternative or that he makes insufficient use of them, or that he is prevented from using them by the Treasury.

By way of background, perhaps I could quote to the Committee some figures which have recently been given in Written Answers in another place, comparing the Department of the Environment in its grant-giving activities with the Department of Health and Social Security, and comparing the last financial year with the year before. In response to the inner area policies, the Department of Health and Social Security has increased its grant-giving activities to voluntary bodies from £2.7 million in 1976–77 to no less than £5 million in 1977–78. In 1976–77, the Department of the Environment, with all its responsibilities in this field, was deploying a mere £650,000—a quarter or so of the DHSS figure—in grant aid to national voluntary bodies. In 1977–78 that seems to have been reduced to some extent rather than increased, because the Department of Transport was hived off from the Department of the Environment in this year and took some of that grant-giving activity with it. But there has certainly not been anything like the substantial increase which the DHSS, in my view, thought to be appropriate as they came to grapple more with the inner city policies.

I am not arguing for large increases in public expenditure. These are not large amounts, taking the whole range of public expenditure controlled by the Department of the Environment. But I am calling either for a firmer statutory basis for the DOE grants, if that is what is needed, or if it is available, for a greater use of these powers and one which bears a closer resemblance to the kind of strategy which I think this Department ought to be exercising in relation to other Departments in Whitehall, and ought to be exercising this year compared with previous years. I beg to move.

Baroness BIRK

I am extremely grateful that the noble Lord who moved the Amendment is not asking for an increase in public expenditure. It would ill become him to do so from those Benches. The noble Lord asked about certain individual grant applications, and on that I suggest that I should look into the cases mentioned and write to him about the progress of the applications as soon as possible. I do not think that it would be helpful to try to elicit details during the Committee stage.

It is perfectly true that the voluntary bodies, rightly, want to be as deeply involved. They want the participation side and they also naturally would like increased grants. Clearly I should like to see our being able to increase grants to voluntary bodies to which we give at the moment, but noble Lords will be aware that it is difficult in the present economic situation. We are certainly not prevented by any lack of powers from making grants of the types to which the noble Lord referred in the Amendment. From that point of view the Amendment is not necessary, although I appreciate that it has opened up the debate on the question of voluntary bodies, their work and the contributions they receive. As the noble Lord knows, applications have to be considered on their merits. The Amendment would enable the Secretary of State to give grants to bodies concerned with improving the environment or employment prospects in industrial improvement areas. This makes it a somewhat narrow remit because we do not envisage these as very extensive areas, perhaps 20, 50 or 100 acres, where a special input of resources and intentions will make a real impact.

If we are talking about voluntary bodies being helped by the Government, and those bodies feel that they should be but they cannot at present, it would surely be better to relate their activities to the whole of a designated district, not just to the industrial improvement areas. As I pointed out, it is not a question of drafting which would be irrelevant at this stage. The Government give grants to voluntary bodies, some of which are concerned with just the sort of activities referred to in the Amendment. In fact, my Department gives grants of £150,000 annually to relevant national bodies concerned with the environment or with the problems of unemployment. A recent award, of which the noble Lord is probably aware, went to the National Association of Youth Clubs to undertake work concerned with youth unemployment in inner cities.

It is surely right that local authorities should be the public bodies to support what are essentially local activities in the industrial improvement areas or the designated districts. But the Government can support the local authorities in this way by making grants to the Urban Programme. In the latest allocation of Urban Programme resources to local authorities which was announced last Monday, 38 per cent. of the money was for projects run by voluntary bodies which the local authorities wished to support. No fewer than 180 projects will be supported in this way. I think this is the right avenue along which we should go. This year these will not include projects related to the environment or to employment, because the scope of the Urban Programme has not yet been widened, but from next year onwards such projects will be eligible, and I hope the local authorities will wish to support them as well as projects of a more traditional kind.

As the noble Lord himself said, representatives of the NCSS are to meet the Secretary of State next Tuesday, and as this date is so close I suggest that we should wait to see what arises from that meeting. I feel that we have translated the concern and commitment which was expressed in the White Paper from which the noble Lord quoted, into action. I repeat, we are encouraging the local authorities in each partnership area to seek the fullest participation of residents and businesses in the area. As a result each partnership has taken steps, some have taken extremely imaginative steps, to inform people about what is happening and to seek their views.

I accept, too, that it will always seem to active local groups either that there is insufficient opportunity for them to influence statutory bodies or that insufficient grants are given. Those of us who have been involved with various groups, when we have been with that side, have pressed very hard as well. But there is no question of the Government not wanting to give support to, or see the active participation of, voluntary bodies in the inner city areas. We consider not only that they have a vital part to play but that it is essential that they be involved, because unless we involve people in what is happening in the inner city areas the whole thing becomes a completely bloodless structure and will not help the community at all. Therefore, it is essential that people should be involved to the fullest possible extent. I think that the only problem for discussion is in what way this can be fitted into the structure, bearing in mind, too, the present limitation of financial resources.

Baroness YOUNG

I think this is a good opportunity to debate the role of voluntary organisations in the inner urban areas. It may be that this is not precisely the right moment to meet all the points we want to raise, but I believe this to be an important matter; namely, that there is a recognition of the valuable part that voluntary organisations can play in revitalising inner cities. The noble Baroness made the centre of her argument an economic one, and I think that the important matter on public expenditure is value for money. There is no doubt that one frequently obtains vastly better value for money by supporting a voluntary organisation to do something than attempting to subsidise it, or to run the particular project either by local government or by central Government. It can frequently be the most cost-effective way of getting something done. In its consideration of these matters, I hope that the Government will recognise this important cost-effective point.

The noble Baroness made the point that the local authorities themselves can support voluntary organisations in their designated districts and that the Government can contribute to local authorities through the Urban Aid Programme. The noble Baroness herself recognises that the Urban Aid Programme at present has nothing in it either for environment or for employment, the two particular areas in which this Bill is concerned. The Urban Aid Programme, I think I am right in saying, follows the same financial year, so this means in effect that there will be nothing until the next financial year by way of help for voluntary organisations in these two areas. Perhaps the noble Baroness will correct me if I am wrong on that.

Secondly, it would be helpful to know whether it is the intention to increase the amount available under the Urban Aid Programme because if it is not, it simply means a switch of resources from some of the projects or voluntary organisations presently supported to those proposed under the Bill. I would be glad to know what their proposals are in that regard.

Baroness BIRK

I do not think I can give any very precise answers on those points today and, if I may, I would like to write to the noble Baroness about it. I should also prefer, and I think it would be much more useful all round, if I wrote after the meeting on Tuesday. I should like to do that, but I do not want to say or do anything at this moment that could jeopardise those discussions and also we could all be better informed on what has happened then.

I do not really think there is very much more I can add, except to reiterate and agree with the noble Baroness that many voluntary schemes where there is a voluntary input into other schemes can be extremely cost-effective as well as socially desirable. These are new projects in the partnership schemes and the other designated authorities and I think it really is a case of finding the best way in which one can get integration of central local authority work and voluntary contribution as well. I think it is quite right that we should be spending some time discussing this, looking at different ways of doing it and also seeing, as I have pointed out, that it varies from place to place. Again this is as it should be, so that there where are imaginative schemes it may well be that other areas will feel they can take them up or find something which is more suitable to their own needs and their own resources.

I think it extremely important not to get it streamlined to such an extent that not enough opportunity is given for imagination, ingenuity and local enterprise on the voluntary side and on the social side, as well as on the economic side. I really do not think there is anything more I can add, but if there is anything that occurs to me when I read Hansard, particularly on the points that the noble Baroness put directly to me, I should like to write to her after the meeting on Tuesday. I think this whole debate will be extremely useful for my right honourable friend to read before he meets the representatives.

1.52 p.m.


I am glad that the noble Baroness feels that because that was the main intention in moving it. If I may say so, I was not at the beginning of my remarks intending to raise the case of any of the voluntary bodies I mentioned, but I thought it proper to declare my interest in them which, in some cases, was direct.

I think one of the main immediate uses that the debate has achieved is to assure us that the Secretary of State does no feel in any want of powers to grant aid to the voluntary bodies that are trying to help him in implementing the inner city policies. I appreciate that most of the support to the voluntary bodies will go from the local authorities, but I hope I made the case that, in addition to that and complementing it, it is necessary for the Secretary of State to grant aid to some of the central and regional voluntary bodies.

The particular form of Amendment that I have tabled today is not needed. Whether any Amendment will be needed I think depends a little on what we hear about the meeting between the Secretary of State and the National Council of Social Service and whether we feel that, in the light of it, it would be appropriate to give the other place an opportunity of discussing this topic, which is an important one, but which, in that it is financial, is more a matter for them than for us.

Not surprisingly, the noble Baroness made something of the fact that this is a difficult financial climate in which to increase any form of public expenditure. That is true, but the point I was making, and which she has not answered today, though perhaps she might answer on another occasion, is why it is possible for the Department of Health and Social Security to double its grants to national voluntary bodies as between 1976–77 and 1977–78 and, at the same time, for the Department of the Environment, which says it has all the powers, to be able to do no more than to hold its grant aid to voluntary bodies steady at a time when one would be expecting it to be increasing that aid by at least as much as, if not more than, the Department of Health and Social Security. That is a point which needs answering, but I shall not ask for it today.

The second point that I should like to stress with the noble Baroness is that we are not arguing—I do not think any of us would argue—about the correctness of the Government's choice in choosing the local authorities as their main agents for implementing the inner city area policies. That is correct. But what I was arguing for was that that local support for voluntary bodies is not enough on its own and needs to be complemented by central Government support for a fairly wide range of national voluntary bodies and regional voluntary bodies.

I am very content to leave it there for the time being. I should like to take up the suggestion which the noble Baroness, Lady Birk, has made that she might write to us, after the meeting, or correspond with us in some way, so that we can judge in what form this debate needs to be continued at the next stage of the Bill. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 15 agreed to.

Remaining clauses agreed to.

[Amendment No. 21 not moved.]

The Schedule agreed to.

House resumed: Bill reported with the Amendments.