HL Deb 28 June 1988 vol 498 cc1375-86

8 p.m.

Lord Hesketh rose to move, That the order laid before the House on 30th March be approved [22nd Report from the Joint Committee].

The noble Lord said: My Lords, I beg to move the Motion standing in my name. It may be for the convenience of the House if at the same time I speak to the second, third and fourth Motions in my name on the Order Paper.

All four orders are made under the provisions of Part XVI of the Local Government Planning and Land Act 1980. They designate urban development areas in Manchester, Leeds, Sheffield and Wolverhampton. Three of the orders also set up urban development corporations or UDCs for the particular area with the statutory objective of securing its regeneration. The Wolverhampton order gives the responsibility for the area's regeneration to the Black Country Development Corporation, which was set up last year.

These orders were judged to be hybrid, but I am glad to say no petitions were received. One other order, to set up a UDC in Bristol, was petitioned against. The case for it will therefore have to be heard before a Select Committee of your Lordship's House before it can be debated in this forum.

As your Lordships will know, UDCs assemble, reclaim and service land, provide infrastructure and facilitate development. They bring a single minded and public sector-backed approach to the task of regenerating their areas. UDCs have a range of general powers, including those to acquire, manage and dispose of land and other property and to carry out building and related operations. My right honourable friend the Secretary of State has the power to confer various functions on a UDC by statutory instrument. He intends to follow the pattern established for other corporations and make orders giving the UDCs development control functions in their designated areas. He may vest certain publicly owned land in the UDCs, but the need for this will only become clear as the corporations develop their strategies. He does not see the need at present to give the UDCs powers over building control, housing and public health.

My right honourable friend the Secretary of State drew on the findings of consultants when he put forward boundary proposals. These proposals were circulated to the local authorities affected for comment before final decisions were taken and the orders laid. In three cases the consultants were appointed specifically by the department and copies of their reports have been placed in the Libraries of both Houses. In Sheffield, consultants appointed jointly by the city council, the department and the private sector had already reported on ways of regenerating the Lower Don valley. It will be for the corporations to decide on the strategies they should adopt, but the studies indicate what the corporations might achieve.

I shall now say something about each of the areas. The proposed Wolverhampton urban development area consists of three separate areas to the east of the town centre totalling about 250 hectares. In common with the other orders, detailed maps have been laid before the House, and a sketch map is provided at the back of the order. The largest area is about a mile from the town centre in the Neachells district. It is predominantly industrial in character, about a third is vacant or derelict sites, and much of the remainder is in need of environmental upgrading and improved infrastructure. The second area is immediately to the east of the town centre ring road. It is known locally as the Heritage Area and contains the former low level railway station, a listed building. The area could offer tourism potential. The third area, the Lunt, consists of vacant and derelict land on the eastern boundary of the borough and adjoining the Black Country Development Corporation's existing area.

The proposed Central Manchester Development Corporation has an area of about 180 hectares immediately to the south and east of Manchester city centre. The area has many listed buildings but much of the area consists of underused or vacant sites and buildings. The signs are that the market is ready to engage in office, residential and leisure developments if there is a concerted effort to remove the legacy of outworn buildings and derelict sites. I would expect the UDC to stimulate a range of developments which will complement and extend the existing range of city centre functions. The foundation is there to be built on in the shape of the work of the city council in Castlefield, of the public/private partnership which has brought forward the excellent refurbishment of the great Manchester exhibition centre and the Midland Hotel and of the work of the Manchester Phoenix.

The proposed Sheffield Development Corporation covers about 900 hectares in the Lower Don valley to the north-east of the city centre. The decline of the steel industry has left large areas of derelict and vacant land and an unattractive environment which have combined to discourage private sector investment. There is considerable economic potential within the valley due to its good motorway connections and its proximity to the existing city centre which is reflected in the increasing interest shown by developers in the area.

The Leeds Development Corporation consists of two areas totalling about 540 hectares. One is to the south of the city centre. It contains a mix of industrial and commercial uses and a number of derelict, disused and vacant sites. Although it has excellent motorway access, the local network is poor. The other is part of the Kirkstall valley. It is dominated by the vacant site of a former CEGB power station and is constrained by poor communications and difficult ground conditions.

The Black Country Development Corporation already has a chairman and board, although further appointments will be made. The other boards will be appointed over the next few days. In each case individual local authority members will be invited to serve and, in accordance with the consultation requirements of Schedule 26 of the 1980 Act, the local authorities concerned have already been approached. Other members will be chosen for their business or professional experience. They will all have connections with the particular area.

I hope the experience of this third generation of UDCs will be similar to that of the second generation which were established last year. In each of those four areas relations between the corporations and the local authorities are good. More will be achieved by the UDCs if they can work with local agencies and carry the local community with them. The UDCs' task, the regeneration of their areas, is one that I hope all of us can support.

The next step in extending the benefits of this approach to the rundown parts of Leeds, Manchester, Sheffield and Wolverhampton is for these orders to be approved by Parliament. These orders were debated in Committee in another place this morning. If this House approves them this evening the orders will come into effect in the next few days. Then the corporations can get to work. I commend each of these orders to the House.

Moved, That the order laid before the House on 30th March be approved [22nd Report from the Joint Committee]—(Lord Hesketh.)

Lord Sefton of Garston

My Lords, I rise not to oppose the setting up of these UDCs but to point out that when the Government set up the original two UDCs, at some time or other—and more than once—responsible government Ministers said that they would look at the experience of the UDCs which existed before going any further. The London and the Merseyside dockland corporations were to be the pilot schemes; that was understood by everybody.

I did not oppose the setting up of the Merseyside Development Corporation. In fact, before this Government came into office I was responsible, along with six leaders of the major parties in Merseyside, for submitting a proposal to the previous Labour Government that we should set up this sort of development corporation to handle the catastrophe that affected Merseyside; namely, the running down of the docks. That was done with this proviso: that the representations from the local authorities would be more than this Government allowed when they set up the corporation. One of the major problems in Merseyside was that that was not done.

I rise because I am very disturbed by some of the remarks made in this report by the National Audit Office on the existing dockland development corporation. If the Government wanted to learn any lessons from the establishment of the earlier UDCs then surely they must have known that this report was being prepared. They would only have had to wait a couple of months and they could perhaps have learnt some of the lessons. We now find that the National Audit Office is seriously suggesting to the Government that they should consider one of two alternatives in respect of Merseyside: winding up Merseyside Dockland Development Corporation or drastically altering its approach.

I do not blame anybody on the development corporation, because they did their best. However, the Government would not listen. They do not seem to be able to grasp the fact that there are forces more powerful than bodies set up by government. There are forces so powerful that they can determine the future of any particular area. They are the economic forces that this Government let loose on this country.

No one who reads this report deeply and objectively has any doubt that the difference between the London Dockland Development Corporation and the Merseyside Development Corporation is highlighted when the report states that the success of London partly reflects its proximity to London and the deregulation of the City. The report also goes on to suggest that before any other urban development corporations are set up the Government should look at the economic potential of certain areas. We know what some of them are. We have had a bitter lesson to learn in the past eight or nine years. They are not very great in Merseyside.

Are the Government sure that the setting up of three urban development corporations, all within the economic field of Merseyside, will help Merseyside? To put it a little better than that: will it prevent the decline of Merseyside? If it does not, then the purpose of a UDC on Merseyside has gone completely.

I illustrate what I mean by the economic forces. If a government set up a place in Merseyside, with all its attendant problems of unemployment and deprivation, and then set up another in London, with all its advantages, no one would dream in their wildest moments or have the wildest fantasy that at some time in the development of those two urban development corporations the Department of the Environment would coolly transfer £13 million that was allocated for Merseyside and allow it to be spent in London. But that is the situation we have. It shows that if the DoE does not look at the matter from the national point of view at least it looks at it from the point of view of spending its budget.

However, there are more important matters than spending the budget of the DoE. There is the important aspect that urban development corporations should be looked at within the national framework. We should not just say, "Put a UDC here, a UDC there and another over there" and not examine the relationship between the three. That is no way to plan the affairs of a nation; yet the Government have seen fit to do that.

The Government must have been made aware of some of the fears that were being expressed by the National Audit Office—and if they were not, it was extremely negligent. What is the point of the National Audit Office if the Government were not made aware? We have been told over and over again of the success of the Merseyside Development Corporation and how well it has done in renovating the housing stock and regenerating the area. However, the facts are—and again I repeat that I do not blame anyone in the development corporation because they have done their level best—that fewer jobs have been created than were created by local authorities in the same period. With all the criticism levelled against the Liverpool local authorities, in the same number of years those local authorities created nine times as many new jobs as did the urban development corporation. So what went wrong?

In London, of course, there is no problem, as I pointed out when we were debating the Canary Wharf development. There were 10,000 new jobs and as much money as was required for the London Docklands. Satellite receiving stations were set up which could well have been sited in Merseyside because it does not matter where they are sited. The Government are not looking at the problem from the national point of view.

I put this question to the Minister. Let us assume that the trend in Merseyside which the National Audit Office reveals continues in the way that it appears to be doing. Let us also assume that the Manchester Development Corporation (which I am glad to see because it is nearer the centre of economic activity and nearer the centre of the market) goes on like a house on fire—almost as good as the London Docklands. What effect will that have on Merseyside? If it has a retrograde effect and the problems of Merseyside get worse, what are the Government going to do if that scenario becomes obvious? The Government have had eight or nine years to answer that question. I believe that there is a great possibility of that happening.

I recommend that the Minister should read page 5 of the report. The DoE did not analyse the achievements of either of the development corporations. The Government have thrown money at them, but this is the Government who say that throwing money at a problem never solves it. You must know what you are doing with money, but here the report says that the Government did not bother to analyse the problems or what was happening inside the urban development corporations. Some of the reading in the reports dealing with Merseyside gives grave cause for concern. Equally, it can be said that because of the economic activity in London one has grave cause for concern over the way it was handled there.

I do not want to take up much more time, but I put forward one point. Again, I make no apologies for repeating this, even if it is to an empty House. If the Government want a solution to the problem of deprived areas they must get off their backsides and visit the regions. They must look at the regions from the point of view of the nation as a whole. We now hear Mr. Heseltine, the convert. It was not on the road to Damascus that he was converted; it must have been in Runcorn because that is where I met him. He completely turned down, with all his officers, the suggestion that I made that the only way to solve the problems of Merseyside is to create a new reason for its existence and move some government departments away from the South-East.

Well, he has come home. I do not know whether he is looking for the leadership of the Tory Party but he certainly seems to be trying to impress people in the South-East that he is worth voting for. He is worried about the overdevelopment in the South-East, but he makes sure that he does not touch the really important problem from the point of view of the Government. Here we are, yelling at the private sector of our economy to up stakes and move to the regions in order to assist and regenerate the country. All I say is: why do not the Government do it themselves? They have one of the biggest generators of employment sitting here like a cuckoo in the nest and paid for by the rest of the regions. Over and over again from the Government Benches we have heard that the Government are anxious to look at the regional problem, that they want a decentralisation policy for the nation, that they are anxious to consider the problem of moving government departments out of London and relieving the congestion that exists there. However, all we get is words.

I conclude by saying that if the Government continue doing this and continue to believe that urban development corporations, on their own, with only money thrown at them by the Government will solve the problem, then they will fail. The position is the same as for enterprise zones, which we hear nothing about nowadays. Enterprise zones are merely damaging the areas that surround them. Perhaps one day the Government will instigate a study on the effect of enterprise zones on the areas that surround them. We may then get to know the real story. In the meantime, I hope and pray that we do not have to wait for the National Audit Office report, which the Government may or may not ignore. Perhaps the Government will give their conclusions on what they intend to do if things go wrong.

Lord Northfield

My Lords, I am delighted to follow my noble friend. I shall pick up one of his themes a little later. I begin by declaring a very indirect interest in this matter as chairman of a consortium of the major house-building companies which, individually, play a significant role in the areas of the existing urban development corporations. We shall probably be performing that role in the new corporations that we are speaking about tonight. I also speak as the chairman for 12 years of the Telford New Town Development Corporation. As I have said in this House before, Telford is not simply a new town. Telford was a vast reclamation and revival project covering about 20 square miles. Its centre was a former coalfield—spoiled land—and some 3,000 acres of it needed years of reclamation before the new town could receive new infrastructure, new industry, new confidence and a new heart.

Today, thanks to the overall plan of total revival, Telford is a resounding success, with hundreds of new firms having moved in, modern facilities and near-boom conditions in a delightful, green environment, totally recreated. With that experience of urban regeneration I look at the UDCs that we are talking about tonight. First, are the areas of these bodies really large enough? Surely, the aim must be in some cases—I take as an example the Black Country plus Wolverhampton or Sheffield—to use the urban development corporation to act as a catalyst stimulating, as in Telford, total revival of a much larger area.

To recreate confidence on the scale that is needed and to provoke full regeneration over a wide area needs a comprehensive plan which excites investors and gives them confidence about the future and which brings in house-builders, manufacturing industry and commerce and persuades them to share the load in conjunction with the pump-priming money of the Government's development corporation. I wonder if the areas are large enough.

My noble friend mentioned the experience of the Merseyside Development Corporation, which was relatively disappointing, as he said. I suspect that it shows what happens when the development corporation area is too small. By confining the corporation to a small area mainly of disused docks, no wider planning has been possible. The garden festival site has not been taken up by private enterprise for imaginative development. As my noble friend also pointed out, the development corporation has been unable to spend all the money allocated to it and £13 million was diverted to Docklands.

In the end and this is most significant—the DoE has had after seven years to expand the development corporation's original 865 acres in Merseyside by adding another 800. I presume that this has been done in the hope that there will be a wide enough plan to secure that catalytic effect that will regenerate a larger area, bringing confidence and starting real growth again. The LDDC area (the London Docklands area) is easier to stimulate because, as my noble friend said, of its proximity to the area of the thriving City of London. Significantly, it covers 5,000 acres, which is a big enough area in which to do the job.

With those kinds of figures in mind and with the background of what has happened in Merseyside, I look at the proposals before us. Manchester has 400 acres, Bristol, 800 acres, Sheffield is a little larger with 1,800 acres; Leeds has 1,100 acres. The first question I put to the Minister is, are the areas really big enough to be the catalyst for wider revival in those cities? Will they really start arousing confidence? The crucial point is rising land values in a wide area, which, as in Docklands and in Telford and in all these really successful areas, finally produce real self-generating growth that carries on when the development corporation has gone. That is a test. Does the UDC start something wider that persists or does it simply clean up a few black spots? Cleaning up black spots is not good enough.

The second question I put to the noble Lord is to ask him whether, after the experience of this last decade and of the new towns, the Government can expand on something which was said from the Dispatch Box this evening? Can they encourage the urban development corporations quite deliberately to forge with the local authorities in their areas a total partnership based upon acceptance and goodwill? Too often there is at least the danger of hostility and no attempt to put the UDC planning into the wider framework of a revival of adjoining areas controlled by the local authority. Sometimes those adjoining areas are nearly as bad as regards the quality of life and the environment as the UDC areas themselves. They need to be planned for revival together. In my view it is up to the development corporations to approach local authorities openly with that objective in mind.

This approach is particularly needed in the Black Country. In my view, planning takes in revival and refurbishment of the areas between the pockets that have now been designated as urban development corporation areas. Local authorities are now more receptive. They see the success in regeneration of Telford and Docklands. I believe that imaginative leadership on both sides, in both UDCs and local authorities, can achieve much more spectacular rescue of these areas that in many cases have been so badly blighted by our past industrial history and by a good deal of unsuccessful public sector housing.

My final point is to touch upon what my noble friend said about a national approach to this problem. About eight years ago I presented to a specialist Select Committee of your Lordships' House proposals for an urban development corporation for England. Your Lordships' committee approved of that proposal and put it in its report on unemployment. I did not press and the committee did not press that this should be an active agency trying to do all the jobs of revival in the inner cities by itself. It was to be a body rather like the Development Commission, which, in the rural areas, energises projects and makes sure that local initiatives are taken. It would draw together the lessons of those experiences and help with the organisation of local effort in an ad hoc way to tackle individual cities, areas and problems. It would not be a do-all agency, but a helping one as the Development Commission is in the rural areas.

This body could have begun, with the receptive local authorities, to try to build a partnership in order to make sure that the idea spread. The Government turned down the idea. I notice that Mr. Heseltine has taken it up and now makes it a cornerstone of his policy. My noble friend is right. The inner city initiative of the Government is failing; it is halting, lame and insufficient. Something much bigger is needed if the inner city people are really to believe that revival is on the way. Therefore, it is with a slightly jaundiced view that I look at these proposals tonight. I hope the noble Lord on the Front Bench will try to answer at least some of the questions I have asked.

8.30 p.m.

Lord McIntosh of Haringey

My Lords, I am pleased to follow my noble friends Lord Sefton and Lord Northfield, who have special expertise in this area and who have spoken on the orders with passion and understanding. I repeat what both of them have said and what my right honourable and honourable friends have said in another place. We are not opposed to the orders and we shall not seek to have them negatived. However, we have great doubts about the policy context in which the Government are putting them forward.

We have grave doubts, which my noble friend Lord Northfield has just expressed very clearly, about the adequacy of the Government's total effort in the regeneration of our urban areas. As my noble friend Lord Sefton said, we fear that unless adequate powers, adequate areas and adequate instructions to co-operate fully with local authorities are given, some urban development corporations—not all, but possibly some—will fall into the trap of being what the enterprise zones eventually became, no more than policy gestures designed to cover up a lack of real policy and real commitment to the urban areas of this country.

It is significant that these orders come in the middle of the consideration by the House of the Local Government Finance Bill. The Bill reduces local authorities' control of their income to only one-quarter instead of a half, puts on the head of the Secretary of State regulation-making powers which interfere more and more in the detailed conduct of local authority affairs, gives no adequate assurance that the Section 137 powers which have been used so effectively, in particular by urban local authorities, for economic regeneration and job creation in the community, will continue—I hope that the noble Lord will take up this point, not only tonight but as we proceed with the Report stage of the Local Government Finance Bill—and generally carries on the distrust and dislike which virtually throughout their life the Government have shown of local authorities. This distrust and dislike have been evidenced by increasing attempts to control local authorities, increasing attempts to take away their powers and responsibilities and, in the end, to discourage progressive and enterprising people from taking part in the work of local authorities.

My noble friend Lord Sefton referred quite properly to the report of the National Audit Office. I remind the House that the National Audit Office expressed in a gentlemanly way polite surprise that, during the six years of the first two urban development corporations, the Government should have undertaken no systematic analysis of the work of those development corporations, and should still have pressed ahead with further urban development corporations without analysing the achievements and difficulties of the first two.

The Government consistently claim success for the London Docklands Development Corporation. I do not deny that. In the absence of the noble Lord, Lord Mellish, I shall not go into any more detail about that because I know that he would intervene if he were here. It is certainly true that the London Docklands Development Corporation has had some magnificent successes due, the National Audit Office says, largely to its proximity to the commercial centre of London and Britain. I need not comment on the experience in Merseyside. It has been commented on in detail by my noble friend Lord Sefton. From those two examples there is no assurance that the Government have the mixture right, either in terms of the size of the areas or of the powers to be given to the urban development corporations.

As my noble friend said, on Merseyside, the National Audit Office went so far as to conclude that either the existing constraints should be removed or consideration should be given to winding up the urban development corporation. We are now faced with four urban development corporations, which will be as small as or smaller than Merseyside, with no additional powers and no relaxation of the existing constraints.

In putting forward these new urban development corporations, what answer are the Government prepared to give to the criticisms levelled by the National Audit Office at the Department of the Environment in its thinking about the existing corporations? It says that there is no adequate definition of what is meant by "regeneration". It says that the Department of the Environment will have a difficult task of maintaining, monitoring and evaluating—not day-to-day supervision—unless there is a definition of what is meant. It says that the new corporations should look for the best economic potential and use of land. It says, as my noble friend, Lord Northfield, says, that this means that the area should be large enough. Is that the case? Are we all convinced that that is the case?

The National Audit Office says that the urban development corporations should have a long-term stategy. Do we have that long-term strategy? Are we convinced that they have that strategy adequately agreed with the local authorities in the area, or, even more importantly, that they have the regional and national strategy to which my noble friends have referred? It says above all—and I recognise that the noble Lord, Lord Hesketh, said this in his introduction of the orders—that one of the keys is successful co-ordination with local authorities.

These are severe criticisms. They raise severe doubts about the quality of the thinking in government and in the Department of the Environment about the urban development corporations. I recognise that the orders have been agreed with the local authorities concerned and that they are Labour local authorities. I shall certainly not go against those agreements. However, the Government have an obligation to improve the quality of their monitoring, to improve the explanation and understanding of the objectives they put forward, and they have a duty to come clean with the public about the success of urban development corporations. We wish them luck. We hope that they will succeed. We are convinced that the local authorities concerned will do their utmost to make sure that they succeed. The omens in every case are not entirely encouraging.

8.36 p.m.

Lord Hesketh

My Lords, we have had a wide-ranging debate which may have gone slightly beyond the four orders before the House. Perhaps I may deal first with the report of the National Audit Office, which was mentioned by all noble Lords. It is not for the Government to respond to an NAO report. The Public Accounts Committee, after due deliberation, will issue a report and the Government will respond to that. As noble Lords will expect, while the Government have no quarrel with the facts presented in the report, it might be expected that they would come to rather different judgments on some of the issues. I must point out that my right honourable friend the Secretary of State has kept the UDCs continuously under review and has drawn on those experiences in designating further UDCs, the orders for four of which are before your Lordships tonight.

The noble Lord, Lord Sefton, drew attention to the greater number of jobs that had been created on Merseyside by the local authority compared with the UDC. However, it is important to remember that in the first stage of this major operation a huge amount of the Merseyside Urban Development Corporation's money has been used to reclaim heavily polluted land and silted up docks. These projects were necessary and very expensive and had to take place before jobs could be created. The noble Lord, Lord Sefton, drew attention to his meeting in Runcorn with a right honourable gentleman in another place. He said that there should be new reasons for the existence of Merseyside. I draw the noble Lord's attention to the fact that under the Channel a substantial engineering project is taking place which could lead in the years after 1992 to Merseyside becoming once again a gateway port for the Atlantic, with direct rail access to the middle of Europe.

Lord Sefton of Garston

My Lords, will the Minister tell me how on earth the benefits of the Channel Tunnel will be shared on Merseyside if there is no link through London? If the Minister says that there is a link, will he say what British Rail will spend on upgrading the line through London?

Lord Hesketh

My Lords, if we went into the finer points of infrastructure we might be here for a considerable time. I ask the noble Lord's indulgence so that we might be able to discuss that at a later date.

The noble Lord, Lord Northfield, brought to your Lordships' attention his view that the areas involved in these urban development corporations were too small. The areas were chosen following studies by consultants and several of them are quite small, but the areas of dereliction in those places were also relatively small and they have still proved to be intractable. The surrounding areas are reasonably prosperous and there will be no basis for designating them as areas of dereliction. While they may be small areas, it does not seem to me to be a good idea that we should avoid trying to attend to the duty, if we can, of renewing them.

Both the noble Lords, Lord Northfield and Lord McIntosh, referred to the relationship between UDCs and the local authority. The Government certainly want to see the UDCs co-operating with their local authorities and with other local agencies. I should remind noble Lords of my opening remarks, that the record of the second generation of UDCs has been a very good one. I hope that the third generation will also prove to be as successful with the relationships that they have with their local authorities.

The noble Lord, Lord Sefton, made remarks with regard to the Government's "throwing money at the problem". Perhaps I may just give him one example. The investment that the Government have made in docklands is some £400 million and that has resulted in about £4,000 million of private investment. I should have thought that everyone can look upon that as a successful investment. We have an opportunity tonight to take a significant step in reinvigorating four of our famous urban areas. I commend the orders to the House.

On Question, Motion agreed to.