§ 6.20 p.m.
§ Lord MOWBRAY and STOURTONMy Lords, I beg to move that the Bill be now read a second time. This very short Bill provides for an increase in the statutory borrowing limits for new town development corporations and the Commission for the New Towns. The present limit on the amount of borrowing that may be outstanding at any one time is £3,250 million. The Bill seeks to increase that limit to £3,625 million and subsequently to any sum up to £4,000 million that the Secretary of State may specify by order, subject to an Affirmative Resolution in another place. This is, of course, one of a series of Bills which over the years have authorised further public investment in the new towns in England Scotland and Wales. They offer Parliament the opportunity to review the progress of the new towns and the level of public investment in them.
New towns development corporations are remarkable for the diversity of activities 1435 in which they must engage. Their investment needs cover an equally wide spectrum. There are four main areas of new town investment: housing, roads, sewers and other local expenditure—and the borrowing will cover major expenditure in these fields. I should explain that the category of "other local expenditure" covers the two areas of industrial and commercial development and new town amenities such as parks and community centres. Individual corporations will of course decide, subject to the normal approval procedure, on the specific items of expenditure, but I can give some exemples of the uses to which the new money will be put. It will permit necessary investment in the new town centres of Redditch and Basildon and it will fund some or all of the following projects: the second phase of Telford's shopping centre, completion of Bracknell's road system, Peterborough's Riverside Parkway, Cumbernauld's spine road, and Cwmbran's drive to open up the new industrial area at Cwmbran. These examples give some indication of the need for the borrowing limit to be increased. It is difficult to be precise about the length of time the proposed total increase of £750 million in the borrowing limit will last, but, on current estimates, it should be sufficient until the end of 1983 at least.
There are two areas where we are making substantial changes to change the emphasis of investment from the pubilc sector to the private. The first of these is housing. This Government's policy, as the House knows, is to bring about a substantial increase in home ownership. This is especially so in new towns where, in almost every case, the level of owner occupation is below the national average of 54 per cent. Shortly after taking office, we fulfilled the promise made in our election manifesto by issuing a general consent enabling new town tenants to buy their own homes. The response quite clearly indicates the extent of unsatisfied demand for home ownership which existed in the new towns. During our first year in office, some 8,000 tenants have either bought their own homes or are firmly negotiating to do so. This represents about 9 per cent. of all new town tenants.
There are, in addition, many more who would like to buy, and they will be helped by the provisions in the Housing Bill 1436 currently before Parliament. This will provide for a two-year fixed-price option if tenants cannot afford to buy outright immediately, and for sales on a shared ownership basis if they still cannot buy at the end of the option period. I am pleased to see that Milton Keynes and Peterborough development corporations have already formulated schemes for shared ownership to bridge the gap between home ownership and renting. Other new towns have been producing imaginative schemes for sales of existing houses and building for sale.
The corollary of achieving a better balance between rented and owner-occupied housing is a reduction in the number of houses being built for rent. New town corporations will be permitted to start only 2,000 houses for rent this year compared with 5,500 last year. We see future building being overwhelmingly for sale or shared ownership rather than for rent. We sincerely hope that these initiatives will enable the new town tenant of today to become the new town home owner of tomorrow.
Equally relevant to the provisions of this Bill is the highly significant contribution that the new towns have been making regionally and indeed nationally to industrial development. Both in terms of new industrial floor-space and in provision of jobs, the new towns have been extremely successful. This is especially true in the development areas in Scotland, Wales and the North East.
Particularly welcome is the recent trend towards increasing private investment in new towns. Since the beginning of 1978, over £67 million of private money has been invested for the construction of new industrial premises in the new towns. About half of the new towns' industrial development is now privately financed and we hope to see this proportion increased. The ability of new towns to attract home-based investment has been complemented by the successful attraction of investment from overseas, particularly in third-generation towns such as Northampton and Warrington. As this represents, in many cases, investment that would not otherwise have taken place in this country, it can be seen as another success for the new towns.
Two other factors have contributed to the new towns' industrial success. First, 1437 their ability to attract small businesses by provision of nursery factory and small workshop units, and through small business advisory services such as those provided in Milton Keynes and Telford. Second, the new towns have provided an environment in which firms can prosper and grow. Modern premises are naturally important in this respect, but it is also significant that staff turnover tends to be lower in the new towns.
To sum up, the new towns are and have been a success story of which we can be proud. We believe that we can build upon that success with the increase in home ownership which I have outlined and with more private finance for industrial development. Nevertheless, public funding still plays an essential part in new town development, and that is why I hope the House will give this Bill a Second Reading.
§ 6.26 p.m.
§ Baroness BIRKMy Lords, I should like first to thank the noble Lord for his clear exposition of what this Bill is about and for his courtesy in writing to me about it in advance. As we are aware, this Bill was originally part of an enormous local government Bill and, among other areas like the enterprise zones and urban development, it was rather peeled off in layers and now comes to us bit by bit. I have only a few points to make on the Bill. First, I should like to say something on the increase in finance to which the noble Lord referred, an increase, I understand, of £750 million, which is supposed to last until the end of 1983. When the noble Lord gave his shopping list, it seemed rather long to me for that amount of money, taking account of inflation and the present economic situation; and, although money is tight as we all appreciate, it seems that a great many of the roads, sewers and developments to which the noble Lord referred may have to go by the board.
Secondly, in parallel with the local authorities, the housing allocation for new towns has been drastically cut and, as the noble Lord himself said, there will probably be an increase of only 2,000 houses to rent. It seems, from what he has said and from what was said in another place, that the Government think that the need for incoming workers to new towns can be met by home purchase or by the 1438 shared ownership schemes which he outlined. The point that, sadly, is strongly missed here is that when people go to jobs in a new town, or apply for jobs and go to try it out in the first instance, they do not know whether they are going to like it or whether their family will be able to settle there. Therefore, to assume that people will immediately buy seems to be an entirely wrong approach.
Although the emphasis has changed—and we are well aware that it has changed—it would surely make economic and social sense to have sufficient rented accommodation available in order to make mobility of labour a reality. Furthermore, the reduction in the housing investment programmes means less rented houses. I will not pursue this point about housing as we are going to spend a considerable time on it in the coming days. It is all tied up with the same proposition that we are going to discuss on the Housing Bill: the right to buy or the compulsory sale of houses.
Thirdly, I should like to refer to the instructions to new towns to sell their assets. They were told last July that £100 million must be raised by the end of March. This sum has not yet been raised, and now the Secretary of State wants more. It means that the new towns will have to sell—have been selling—their assets, commercial assets, shops, industrial assets; and if they are, as they are, being pressed very hard to do this, what is going to happen? Demand has declined. The economic situation at the moment is very low. It means that things will have to be "flogged" cheaply in the market or practically given away. This is not something that one can look at in a superficial, trivial way because these are public assets, and for public assets to be treated in this way seems to me, again, an example of extraordinarily bad management and extraordinarily bad practice of economics.
The Government want to speed up the demise of the new towns, we know. Four went some years ago; Corby has recently gone; and Stevenage winds up on the 30th June. The pressure really should not be put on before they have done their job. There is no large objection to a gradual wind-up. My noble friend Lady Denington, the chairman of Stevenage New Town, would have been here this evening to emphasise this point, had she 1439 not had to go to Stevenage about the winding-up of the new town.
I agree with the Minister that our new towns have been a success story. This has been recognised all over the world, but one wonders if their recognition abroad is not now greater than it is at home, in view of the way the Government are now acting. Our new towns are growth points which the Government should be cherishing at this time, not trying to wipe out of existence. It is, I feel, an odd and an unfortunate attitude to take. If it were done in the way in which it should be done, so that these very valuable assets were not just thrown away and lost, it would not take an enormous number of years; but it requires much more understanding and much more give and take.
We on this side of the House are not opposing this Bill. We are glad to see more money being given to the new towns, although, sadly, I do not think it is enough. But what we are concerned about is the lack of rented accommodation, both for young people and for people moving into the new towns. They are now under tremendous pressure, which can only be bad for the new towns and bad for the country.
§ Lord MOWBRAY and STOURTONMy Lords, I thank the noble Baroness, Lady Birk, for giving us her views and the views of her Party on the Bill in such a charming way, as she always does. This short debate has, I think, provided this House with a useful opportunity for putting forward both views on the progress of our new towns. I personally re-emphasise that I think they have been one of the great success stories of the last 30 years. The boards and the staff, the development corporations—I would agree with the noble Baroness on this point—are to be congratulated very much.
As I understand it, the nub of the noble Baroness's arguments were (and I agree that there is a philosophical argument between our two parties on this subject) that there is going to be less rented housing. As she has said, we shall be able to discuss this later on the Housing Bill, but I would point out to your Lordships that in the new towns we have substantial housing assets—100,000 housing units which are available. Numerous 1440 houses will become available every year and these are to meet the needs of incoming key workers. I do not think we need be too worried about that particular point.
§ Baroness BIRKMy Lords, is the noble Lord saying that hundreds of thousands of houses are going to come up for renting, not for sale? Are they coming on to the market for renting? That is certainly not the impression I get from the chairmen of the new towns I have spoken to, nor indeed from many Conservatives who are concerned with new towns.
§ Lord MOWBRAY and STOURTONNo, I merely said that substantial numbers of houses do come up each year for renting, and there is an on-going flow of people moving, dying, and so on, who do not necessarily own their own buildings. It is one of the facts of life, sad though it may be, but there is no cause to despair.
Our policy is to encourage new people to come into these towns, and the success story of people settling in new towns is very great. New industry seems to provide jobs for the younger worker, who tends to go in with his new job and his new family. That has been one of the reasons why the new towns have been so successful. We agree that there is not complete unanimity of view between the two parties about the development of new towns in this way, as the noble Baroness made clear. They are still placing heavy reliance on public investment and public control, of which we are trying to divest ourselves for, as we think, the greater good of the country in the long run and the social good of the people at large. This Government believes that it is time to change the emphasis and, as I said previously, pursue the much greater involvement of the private sector in the new towns.
The noble Baroness was worried about the £750 million up to 1983. This, of course, is a net figure increase from the Government. There will be sales from buildings going on all the time, which will be available to the new towns for investment. So as they sell off bits and pieces to whoever it may be they have this money available, which, I emphasise, is Government money, over and above their normal sales.
§ Baroness BIRKMy Lords, I wonder whether I could interrupt again while the 1441 noble Lord is on that point? This is precisely one of the matters I am concerned about. The selling off of assets too easily and too quickly, because of pressure from the Government, is not going to do the new towns any good and is certainly going to take away from them the great success story which the Minister mentioned. That was precisely the point I was speaking about when I mentioned the pressure for the selling of assets instead of the slow wind-down of the new towns.
§ Lord MOWBRAY and STOURTONMy Lords, I think one of the great troubles with the party opposite is that they assume that as soon something is sold it vanishes into thin air. May I say, with great respect to the noble Baroness, that as soon as something is sold it belongs to somebody; he is going to take just as much care of it and interest in it and will look after and nurture it as much as any public servant who is merely acting as a paid officer of a council. I do not think it is a fair conclusion to assume that assets sold go into thin air. A good corporation, a good tenant, a good owner in a new town is going to nurture whatever he buys, be it a shop or a factory, just as much as when it is publicly owned. And, my Lords, the new towns were never envisaged as being bodies that would own assets for all time. If I remember aright, there was a time limit within which they would have had to pay the Government back. That was always the case. It is not a new policy of ours; it was there from the word go.
My Lords, we can discuss most of these matters on the Housing Bill. This Bill provides for the continuance—and I repeat, the continuance—of essential public investment as a contribution to the development of our new towns, and I very much hope the House will now give it a Second Reading.
§ On Question, Bill read 2a; Committee negatived.