Urban Development Corporations (Financial Limits) Bill (Hansard, 17 December 1987)

§ Lord Belstead
My Lords, I beg to move that this Bill be now read a second time.
This is a short Bill which comes to the House unamended from another place. I am grateful that your Lordships have agreed to suspend standing orders and to take the various stages of the Bill together.
The Bill concerns aggregate financial limits on urban development corporations. It amends the original Act by removing grant-in-aid from the sums subject to the limit; redefining borrowing so that only nett borrowing is covered; setting a lower limit to reflect these changes in definition. The Bill does not give urban development corporations more money. That will be a matter for Parliament. It simply rationalises their overall financial limits. As such, I commend the Bill.

§ Lord McIntosh of Haringey
My Lords, I thank the Minister for his explanation of the Bill; and I hasten to say from the outset that having agreed that it should pass through all its stages today, we shall not oppose the introduction of the Bill. In particular, we recognise that the revised definition of capital which is now to be in terms of the outstanding principle—in other words the nett amount—is a much more sensible definition than the one used in the past. As regards the overall limits, we recognise that the Government, having willed the end, in terms of the establishment of urban development corporations, must revise the means available to the UDCs. However, the issue of urban development corporations is much more controversial than those concerning the Scottish Development Agency which the House has just been considering. The Scottish Development Agency was set up with the enthusiastic support of local authorities in Scotland and has achieved universal support—not least today—on all sides of the House for the work it has done.
Urban development corporations in this country, on the other hand, have been set up against bitter opposition from most of the local authorities in which their territory has been sited, and that bitter opposition, though it may seem to be defensive of the powers of local authorities, has a good deal behind it. Urban development corporations have been set up under a regime in which rate support grant has been reduced by no fewer than £21 billion since 1979, a regime under which the proportion of local authority expenditure covered by rate grant support has decreased from 61 per cent. to 46 per cent., a regime under which the detailed activities of local authorities, their powers, their vires, their capital expenditure, the use of their capital receipts, has been crawled over by Government both in an administrative sense and in continuing restrictive legislation. Under those circumstances, it is not surprising that local authorities should be resentful of the largesse which they see as being spent on the urban development corporations.
839 I am aware that as soon as one starts to say things of this sort, Ministers have enormously long briefs which will point to the achievements of the London Docklands Development Corporation and in Merseyside. Perhaps I may save the time of the House by saying that I do not dispute the physical achievements in terms of the amount of building that has taken place in the existing urban development corporations or the number of jobs that have been achieved, though I could dispute the social benefit to the areas concerned of those jobs and of that amount of building. Therefore, we need not be in dispute about the facts of the case.
What we must dispute and what the Opposition feels extremely strongly about is that to have urban development corporations—in effect quangos—taking over from and without the agreement of the local authorities cannot be a long-term solution for the development of our inner cities. It may achieve short-term results, largely because the Government are more willing to pour money into organisations over which they have complete control; but, in the long-term, these areas will have to be run by their own people. When the day comes, as I am sure it will, that urban development corporations are restored to the control of local authorities and any new urban development corporations are set up only with the consent of local authorities, we shall feel that the economic development of our inner cities is going hand in hand with the development of the communities in our inner cities, which are equally important. Until that day arrives, we shall not support uncritically the establishment of more urban development corporations or indeed the continuation on existing terms of the present corporations. In the meantime, as I said at the outset, we do not oppose the measure before us.

§ Lord Belstead
My Lords, I am grateful to the noble Lord for his support of the Bill. I listened carefully to what he said and therefore I certainly will not read out a long brief about what has been achieved by the urban development corporations. Suffice to say that it is the case, as the noble Lord was good enough to recognise, that a great deal has been achieved in the London Docklands and a very great deal is being achieved in Merseyside.
Earlier this year my right honourable friend set up four more UDCs in England: Trafford Park, the Black Country, Tyne and Wear and Teesside. A further UDC has been set up by my right honourable friend the Secretary of State for Wales—the Cardiff Bay Development Corporation. These UDCs have set about their business and are attracting considerable interest in their areas. Finally, very recently, on 7th December, my right honourable friend identified areas of land in Bristol, Leeds and Manchester where he proposes to establish smaller UDCs—called mini-UDCs—which are smaller than those so far described. He intends also to incorporate an area of Wolverhampton in the existing Black Country Development Corporation. That is an important record for the people concerned and the generation of skills in those areas.
840 In supporting the Bill the noble Lord was critical of the difference in treatment, as he sees it, between these areas and the other local authorities. He suggested that they were being set up against opposition from local authorities. That is the one point on which I take issue with him. I am advised that the four UDCs which I said were established this year were not opposed by the local authorities concerned. Indeed, each of those UDCs has three local authority members on the board and they are working closely with the local authorities. Therefore, I believe that there are opportunities for co-operation between UDCs and local authorities; indeed, with involvement of the local authorities in the work of the UDCs. Nonetheless, the noble Lord has been good enough to say that the Bill is sensible and in that spirit I once again ask your Lordships to agree to the Second Reading.