Contaminated Land

HC Deb 13 June 2000 vol 351 cc159-79WH

Motion made and Question proposed, That the sitting be now adjourned.—[Mrs. McGuire.]

10 am

Mr. Derek Twigg (Halton)

I am grateful for the opportunity to debate this subject, which is very important from a constituency and regional point of view. I want to spend much of my time discussing the terrible contamination incident that occurred in my constituency of Halton. The press and television have given much publicity to the incident, which was dealt with in a recent edition of the "Panorama" programme.

ICI is the largest employer in my constituency. In Runcorn, it has developed one of the largest industrial complexes in Europe, which is concerned mainly with the manufacture of chlorine. As part of a restructuring and refocusing programme, ICI announced a few years ago its intention to leave the bulk chemical business, move into fine chemicals and sell the Runcorn site. My constituents are therefore concerned about future employment prospects with ICI.

Prior to that development, ICI established "project pathway" to investigate the legacy of more than 160 years of industrial activity in and around its Runcorn site. That is an example of good practice, which should be welcomed and which many other companies should follow, but the initiative identified a major problem. At Weston village in Runcorn, a 12 hectare former quarry which was tipped between 1920 and 1970 was found to contain hexachlorobutadiene gas, known as HCBD. HCBD has seeped into properties in the adjoining residential area. The indoor air of more than 150 houses has been tested and HCBD has been detected in 21 properties and the local scout hut. Those families have had to move out of their homes, and ICI has provided a compensation package for 476 properties in the village. It has also guaranteed property prices for up to 20 years for those who stay in Weston village and purchased 53 properties from residents. However, eight families are still staying in hotels and seven are in rented accommodation.

It is difficult to describe the devastation and anxiety felt by my constituents in Weston village. The effect on the entire community has been terrible, and the lives of many have been turned upside down. They are concerned not only about their homes but about the health problems that may be caused by HCBD. The health authority, which has been somewhat overrun by this crisis, has carried out medical checks on those who live in the properties directly affected. However, there is a lack of information on the effect of HCBD on humans, and investigations are being carried out into what constitutes a safe level of exposure.

It is clear that ICI must take the blame for what has happened, but we should recognise that it has done much recently to meet its responsibilities and improve its record. Nevertheless, and despite the compensation package and efforts to identify the problems, there are issues still to be resolved. Unsurprisingly, it is not only those nearest to the problem who are anxious; constituents who live on the edge of the village also want guarantees in respect of property and health. ICI is reviewing the zones for which compensation is provided and house prices are guaranteed. The time that the review is taking is a worry to my constituents, and a conclusion needs to be reached quickly.

ICI has released results from borehole testing around the Weston quarries. The quarries were dug out over a number of years, and some of the sandstone from them was used to build Liverpool cathedral. However, the Environment Agency wants more information on contamination in the vicinity—specifically on contamination of groundwater in the area—to be released and put in the public domain. I do not know whether ICI has released that information yet: it should do so immediately. I should be grateful if my hon. Friend the Under-Secretary would see whether he can expedite the release of the information into the public domain.

Nowhere is the concern outside the immediately contaminated area felt greater than in Weston Point, the neighbouring village, which is downhill from Weston village. Weston Point sits next to the giant ICI complex—outside the factory gates. The residents want to know whether the village is affected by contamination from quarries or the ICI site. They have received assurances that it should not be, but there is no definitive evidence to prove that it is not. Boreholes have also been sunk around the ICI site, and the information from them is needed.

There is widespread concern in Weston Point about property prices and whether building societies will be willing to provide mortgages for people who want to purchase properties there. ICI previously held public meetings for Weston village residents. Weston Point residents now want a public meeting with ICI, the council and the health authorities, so that they can ask questions direct. I urge ICI to organise such a meeting in the near future as a matter of priority. Hundreds of my constituents have written to me about it, seeing such a meeting as a way to bring the issues into the open and discuss them.

Contaminated land can have a disastrous effect on a community. Nowhere is that more clearly seen than in my constituency. What has occurred demonstrates how badly a community can be affected and why the Government, local councils, regional development agencies and other partners must tackle the problem of contaminated land as a priority.

I want to speak more broadly about the problems of contamination for Halton. Halton is the original home of the United Kingdom's alkali and chemical industries. There is no household in the country that does not use a product manufactured from materials made in Runcorn or Widnes, so the industry's importance is clear. However, the heritage of the alkali and chemical industries over the past 150 years has been chemical waste tips of the most unimaginable kind. What were once green fields in Widnes became known as gallygu—a local term—and copper smelting, soap manufacture, phosphate fertiliser manufacture and a host of other chemical cocktails added to the present- day legacy. There was also, formerly, a large asbestos industry in my constituency, and again we see the consequences of that.

When Halton council came into being in 1974, it was determined to tackle that legacy. It has made much progress in reclaiming areas of dereliction, making Halton a greener and more attractive place. The contaminated site in Weston looks a very peaceful scene: it is a grassed area, with horses grazing on top of the quarry. One cannot imagine what is underneath it. Widnes, which bore the brunt of the chemical contamination for many years, is also a much more attractive place now. Since 1974, 180 hectares of land have been brought back into use, representing public investment of more than £20 million through the national derelict land programme.

Despite that good work, much remains to be done. The 1993 national derelict land survey identified 203 hectares of land still requiring remediation and reclamation. That represents 3 per cent. of Halton's land area and is equivalent to a 10-year programme. Many of the sites are large and badly contaminated and will be costly to remedy fully. The scale of the dumping in the past 150 years was such that more than 200 hectares of marshland across southern Widnes were tipped on to an average depth of 4 m. Our Victorian forefathers thought nothing of filling in ditches and watercourses with toxic waste from factories.

Mr. Peter L. Pike (Burnley)

In the north-west, in Lancashire and Cheshire, such reclaimed sites often have no site value afterwards because they have no active use. That has on-going revenue, as well as capital cost, implications for local authorities, which have to maintain additional open spaces which are not required.

Mr. Twigg

My hon. Friend makes an important point, to which I shall return later.

Councils sometimes come in for great criticism, but the work that Halton council has undertaken in the past 25 years in dealing with dereliction and contamination should be held up as a shining example of how councils, working in partnership with central Government and other partners, can significantly improve the environment and people's lives by showing innovation and the determination to make a real difference.

I want to highlight two examples in my constituency of how partnership with government can transform an area. St. Michael's golf course is a prime example of a local authority acting in partnership with government to transform noxious and dangerous chemical tips—on which I played as a youngster, as did many others. I apologise for any shortcomings that may have resulted. That area was known as "Ditton Alps", and comprised a series of hills of contaminated chemical waste covered in a white crust in which nothing grew. I shall summarise what happened. Fifty-five hectares of land were reclaimed, 60,000 trees were planted, 800 residents and 395 employees in local factories now view a green golf course instead of a chemical waste tip and 35,000 vehicles pass the site on a major highway route. The physical and visual environment has improved tremendously.

The Greenoaks retail scheme in Widnes is another prime example of the partnership approach. It brought back into use a former 7.4 hectare—20 acre—abandoned chemical works and transformed it into a 250,000 sq ft retail scheme, which provided much needed confidence in Widnes town centre. Direct grant aid reclamation to prepare the site for development amounted to more than £5 million. The consultant engineers to the project commented that there may have been value in open cast mining the site for the barium and zinc spillages that were in the ground. That resulted in £25 million of investment, 250,000 sq ft of new retail floor space in the town centre, dedicated public transport provision and direct pedestrian links to the existing high street.

Those are two classic examples of how a difference can be made. There are many other examples of work that has been undertaken to reclaim land to make it much greener and environmentally better in terms of jobs and housing.

I do not want to give the wrong impression of Halton. It has changed significantly for the better, even during my 40-year lifetime. Widnes, in particular, which historically has had the worst problems, has seen massive improvements. Many people have moved to Halton to live, which shows that it has become a much more pleasant and attractive place. However, more remains to be done.

It is important to stress that not all brownfields are the same. The term encompasses everything from sites previously used for housing or light industry, with limited problems, to severely contaminated sites containing highly dangerous and toxic chemicals. As I said, Halton's legacy from the chemical industry means that our brownfield sites are difficult and costly to deal with. Of course, Halton is not the only council in the north-west that faces such problems. On many sites in Halton, contaminants are not site-specific; adjoining sites have also been contaminated. The costs and liabilities associated with those sites are such that no developer would be persuaded to take on the challenge without financial incentives or legal protection from future liabilities. ICI accepted responsibility for contamination in Halton and has carried out remedial work, but it is often not possible to pinpoint who is responsible, particularly if the contamination goes back 150 years.

Remediation costs are often high. When coupled with low demand for commercial land, as in Halton, it becomes impossible to release redevelopment opportunities. Because the cost of reclaiming contaminated land for hard end users is so high and the demand for commercial land is so limited, the cheaper option of remediation for green end users has often been the only choice. For example, the cost of reclaiming the 3 hectare site of a former asbestos plant in Widnes was £1.2 million and it was sold to a car retailer for £143,000. When it is possible to reclaim land for housing, the value of surrounding housing often makes it difficult to recoup the cost of reclaiming the land. The cost of reclaiming the 1 hectare site of a former soap works in Halton was £500,000. The environment in the area was better than previously, but the site was sold to a house builder for just over £150,000, who sold the houses at around £47,000.

It is important to bear in mind the changing nature of the game. North West Development Agency funding is now targeted at hard end uses, which are not possible on most of Halton's sites because contamination is so severe and expensive to remedy. In the late 1980s and early 1990s, Halton had a rolling programme of direct derelict land grant schemes, which spent an average of £3 million annually. Current spending is £500,000. That shows how the current funding regimes do not help Halton and other chemically affected areas. A fraction of the money spent on the derelict site on which the millennium dome now sits would be needed to deal with the problems in Halton and would make a big difference. In addition, the massively increased costs of removal of contamination to landfill means that it is no longer economically viable to reclaim the majority of Halton's sites in line with current thinking on hard end use. In the early 1990s, the cost of removing contaminated waste was £20 per cubic metre. Today, the cost is £180 per cubic metre. Clearly, there are reasons for that increase, including inflation, but it is a problem.

There is a further problem with the Environment Agency's licence requirement. The cost of contaminated land makes redevelopment less attractive to private developers. The Environment Agency's rules are designed for brownfield sites surrounded by greenfield sites, but Halton has blackfield sites surrounded by blackfield sites. For example, the Environment Agency required a lined cell to be created and £200,000 was spent just to move material around and reshape it on an 8 hectare tip surrounded by 40 hectares of further tips containing the same material. Funding is driven by output—for example, jobs created, length of road built and hectares of contaminated land cleared. Green end use outputs do not carry priority, but when green end use provides the only sensible and practical option, it must be given a high priority.

The easiest and most commercially viable and desirable sites were reclaimed in the 1980s and 1990s. Halton has been left with the expensive, less viable and more hazardous sites. The public health officer in north Halton published a report last week highlighting the fact that Halton has some of the worst health problems in the country and a return to green end use is the only way of tackling some of the health issues related to contamination on many of those sites.

Only 5 per cent. of new house build in Halton is achievable on brownfield sites. The remainder of the brownfield sites are black and cannot accommodate residential uses by the very nature of the ground conditions. It is difficult to do anything with those sites other than to cover them and green them. It is clear that any thoughts of Halton getting anywhere near the Government targets for the redevelopment of brownfield sites are not realistic, and significant help is needed. Halton council will publish its draft unitary development plan in the near future. Much of the debate will focus on any proposed loss of greenfield and countryside sites for development purposes.

There is great anger in the Widnes side of my constituency about Widnes golf club wanting to sell off its land to a housing developer, to enable relocation to occur. I support my constituents' view that it is important to retain this green space in the centre of town, and that it would be a great loss if it disappeared. My constituents see a sizeable amount of derelict land in Halton, and they wonder why we have a problem developing it and why there are arguments about the possible loss of greenfield sites. I have already outlined the reasons. I am sure that, when the unitary development plan is published, major discussions will occur if any proposals are made to use greenfield or green space sites for industry or housing.

There is no doubt that the polluters should pay, but the difficulty lies in identifying them. As I said earlier, it was very clear in the ICI case who the polluter was, and ICI accepted responsibility. However, in Halton and many other places in the north-west, polluting has been going on for 150 or 160 years or more. Many of the companies responsible no longer exist or have been amalgamated with others, making identification difficult. When they can be identified, they should pay, but in many cases it is not possible to identify those responsible, especially in areas such as Halton.

I have had detailed discussions with my local authority, Halton, whose wealth of experience and knowledge on these issues is probably second to none. Halton has won several awards for reclamation schemes. I shall suggest a number of solutions, which we can debate and which I ask my hon. Friend the Under-Secretary to consider.

The suggestions include the introduction of a strategic plan and framework for dealing with contaminated sites, rather than pepperpotting resources on an ad hoc basis; bringing together different funding streams and bodies working on contaminated land issues; and the establishment of more detailed classification criteria to highlight the varying degrees of severity of contamination on different sites. That last proposal is important, especially in Halton, because some sites are very contaminated and others only mildly so.

Further proposals include the development of a task force, similar to the coalfields regeneration initiative within English Partnerships, to tackle the severely chemically contaminated sites; the introduction of a greenfield development levy on highly profitable developments, to be used to subsidise the development of brownfield sites where negative land values and high-cost remediation combine to discourage private investment; the greater use of landfill tax credits to remediate chemically contaminated sites; and, finally, the possible introduction of a separate strand of national lottery good causes to deal with especially large and problematic contaminated sites. Those ideas are being discussed locally and they are shared by others in the region. It is worth introducing them into the debate, in relation to dealing with this problem.

I shall turn now to the problems in the north-west region. During my speech, I have dwelt on the problems affecting Halton, but they apply equally to many other parts of the north-west. Estimates suggest that there are between 100,000 and 200,000 hectares of contaminated land in the United Kingdom. The Environment Agency has estimated that there could be more than 300,000 hectares, although much of that contamination might be relatively minor.

I want to express my concern to my hon. Friend the Under-Secretary at the delay in producing a definitive study on the issue, caused by problems associated with defining contaminated land and identifying money to tap-remediate such land once it has been defined as contaminated. However, I welcome the Contaminated Land (England) Regulations 2000, which came into force on 1 April 2000, and the important role that local authorities will play in their implementation. I am sure that authorities such as Halton will take proper advantage of them. Placing control with local authorities is right and proper.

The scale of derelict and contaminated land remains a serious problem in the region. With 9,900 hectares, the north-west has 25 per cent. of the country's derelict land in 11 per cent. of England's land area. That is the largest figure for any region. Sixty-eight per cent. of the dereliction in the north-west is in the Mersey belt, the industrial and economic heartland of the region. The regional development agency and the regional assembly see the reclamation of derelict land as a priority, and the assembly is addressing the issue of derelict land in the forthcoming draft regional planning guidance, which will be submitted to my right hon. Friend the Secretary of State at the end of the month.

In its regional strategy, the North West Development Agency proposes a review of priorities and objectives for land reclamation, in partnership with the region's local authorities. The review will cover the 20-year lifetime of the regional strategy and will pay particular attention to the problems created by the chemical industry's redundant and derelict sites.

The physical environment is an important component of sustainable development in the region. It is critical to the quality of life—including health and safety risks—in deprived areas and to the image and perception that businesses and investors have of those areas. That is an important issue for the north-west, which does not do as well as some regions in attracting and retaining investment. Dereliction and contamination can affect a region's image.

Twenty of the 100 worst districts listed in the DETR's index of deprivation are in the north-west. It is no coincidence that those areas suffer from some of the worst problems associated with derelict, under-used, neglected or contaminated land. Hon. Members will not be surprised to learn that that list includes my constituency. The North West Development Agency supports the Government's policy of re-using brownfield land for new development, but believes that that can be done in the north-west only with public sector support. If polluters can be identified, they will be made to pay. However, that will not often be the case. Like Halton council, the agency believes that the variations in the property market mean that, in extensive areas in the region, extra costs are associated with building on previously used sites. The north-west of England has inherited significant environmental liabilities.

The land and property budget of the RDA is the main source of funding for dealing with dereliction. The North West Development Agency is concerned about DETR's plan to distribute the land and property budget nationally. That would reduce the NWDA's share, both in real terms and in proportion to other regions. The region has evidence-based policies, known as net environmental investments, to build on its better assets and bring brownfield sites into beneficial use. The north- west needs sustained commitment to physical regeneration and land restoration if it is to see an urban renaissance and tackle social deprivation. The scale of the problem and the time it will take to address it—a minimum of 20 years—justify additional resources; I need only look at my own constituency to see that. Partnership is the key to real change.

10.28 am

Mr. Tom Brake (Carshalton and Wallington)

I congratulate the hon. Member for Halton (Mr. Twigg) on securing the debate. I could detect no shortcomings in what he said, or anything that could be attributed to his having played on contaminated sites. I will not attempt to match his expertise on the subject of contaminated land in the north-west of England or on the activities of Weston or ICI in the area. I hope that my comments will be relevant to the north-west, but also to the whole of the United Kingdom.

The question of what we should do with contaminated and derelict land and how we pay for reclamation is a crucial one for all areas of the country, including the north-west. It touches on important issues, such as housing, regeneration, the environment, the countryside and—in particular, in the case of the hon. Gentleman's constituency—health. The United Kingdom has many assets, but lots of land is not one of them. Of the land that we do have, about 300,000 hectares, according to the Environment Agency, is affected by contamination, and a smaller area is itself contaminated. The available land that we have is under increasing pressure, and we need to use it as effectively as possible. If we do not, we shall continue to eat into the green belt and build on greenfield sites in urban and rural Britain. The countryside will continue to suffer, and the communities that could benefit from regeneration and the cleaning up of derelict and contaminated sites will continue to decline.

When the Government came to power in 1997, 52 per cent. of housing development took place on brownfield sites. Their target is to increase that figure to 60 per cent., which is an improvement on the previous Government's target, although it is still too timid—an overall national target of approximately 75 per cent. would be an ambitious target for the next 10 years. I know that this is a controversial subject—some argue that such a figure is unachievable, but others maintain that it can be realised. Unless we have an ambitious target, the Government will not be pushed. The overall figure, which would apply nationally, would be an average figure that would allow for local flexibility by reflecting the different circumstances that prevail in different regions.

It is disappointing that, according to the report by Lord Rogers, which was published in 1999, the Government's current performance indicates that they will fail to hit their 60 per cent. target. We need to take decisive action to ensure that the target is reached. Hon. Members of all parties share the laudable aim of seeking to maximise the development of brownfield land, but there is less agreement about the way in which to do so. Various solutions are possible—the hon. Member for Halton outlined several that would benefit the north-west of England, by bringing contaminated land into use, and the rest of the country, by reducing development on greenfield sites. In my constituency, the issue involves building on greenfield sites rather than cleaning up contaminated land because, fortunately, we have few contaminated sites. A couple of them have already been successfully redeveloped as housing projects and, as far as I am aware, only one such site remains in my constituency—a large gasholder that may be cleaned up at some stage.

One solution, which was referred to by the hon. Member for Halton, is to impose a greenfield development levy, which could encourage greenfield development and subsidise the cost of cleaning up contaminated sites. He cited the costs of clean-ups in his constituency—everyone accepts that such costs are phenomenal. The practice of building on virgin land will continue unless something is done to redress the balance between the costs of developing on greenfield and on brownfield sites—the extra costs are significant on contaminated brownfield sites. The tax system could be used to redress that imbalance.

Another good approach involves the use of VAT, which is set at zero for new build and at 17.5 per cent. for the renovation or conversion of existing buildings. Many hon. Members and housing and regeneration organisations regard that as ridiculous. That disparity should be redressed very quickly—if possible, in the next Budget. If VAT equalisation was achieved using a 5 per cent. rate, for example, any surplus generated could, as the Rogers report suggests, be used to subsidise the decontamination of the sites that the hon. Member for Halton mentioned. The Chancellor has an opportunity to introduce a greenfield development levy, which could be used to tax the excess profits on land sales. The bulk of the revenue raised could be used to clean up brownfield land, with a small proportion going to environmental projects that benefit local communities. That would help to redress the balance. The cost of cleaning up contaminated land is excessive and, although we have made use of less-contaminated sites that are easy to clean up, many sites require extensive clean-up.

The issue of contaminated and derelict land cannot be addressed without taking into account the role of land speculators. The uniform business rate taxes businesses on improvements that have been made to property, which discourages developers from improving property, because it would increase their tax bills. Developers who build up land banks for speculative purposes and leave the land undeveloped, in a dilapidated condition or even completely out of use, suffer no financial penalty. Does the Minister agree that it is time to consider alternative arrangements to replace the uniform business rate?

Site value rating would levy a tax on the value of unimproved land, but not on buildings on the site. The land alone would need to be assessed and a tax would be fixed on the basis of that value. A tax on land values would be unaffected by a landowner's decision to make good or bad use of the land and it would therefore pay landowners to make the best possible use of their land to gain maximum income. If the urban landowner is taxed on the value of the land, whether it is used or not, the cost of land speculation would pass from the community to the landowner. Urban areas would be regenerated without costly intervention and the pressure to develop green-belt land would diminish.

That is another positive measure. Derelict sites could be brought into use more quickly, which would speed up urban regeneration and reduce the need to develop greenfield sites. The much clearer picture of land availability and housing demand in rural areas would be an added bonus. It is hard to predict demand and know how much land is available for development, which means that more is brought into the planning system for development than is necessary.

It is right that the cost of clean-up should fall on the polluter. However, as the hon. Member for Halton said, the polluter often cannot be found. In such cases, the cost of cleaning up contaminated land falls to local authorities and extra costs are put on the Environment Agency. In an ENDS—Environmental Data Services—report of March 2000, the agency stated: If … the Agency's role should extend to the provision of guidance on any site where a local authority requests assistance, this is clearly a new duty and will require substantial new resources.

Mr. Pike

Does the hon. Gentleman accept that when local authorities consider new planning applications for opencast coal mining, they should be able to take into account the costs of future reinstatement? Bonds are often insufficient and costs that are not met by the private sector are picked up by the public sector. Does he accept that if we are not careful, we will create new areas of dereliction because local authorities cannot consider the financial standing of bodies that make such planning applications?

Mr. Brake

I thank the hon. Gentleman for his useful intervention. Local authorities should be able to take into account the cost of future reclamation. I shall ask the Minister a question on that in a few minutes, in relation to ICI.

I welcome the Government funding in the comprehensive spending review to support the implementation of the contaminated land regime, but I question whether sufficient funds have been made available. I do not know the precise estimate of the costs of cleaning up the quarries to which the hon. Member for Halton referred.

Mr. Derek Twigg

You have made an important point. At present, no definitive answer has been given on how the quarries should be reclaimed. The removal of materials may cause more contamination and pollution. A membrane could be used, but what guarantees will that give to my constituents that the pollution will not spread in the next 20, 30, 40 years?

Mr. Deputy Speaker (Mr. Nicholas Winterton)

Order. Before the hon. Member for Carshalton and Wallington replies, I must inform the hon. Member for Halton that I have not made any interesting observations. The hon. Member for Carshalton and Wallington may have done so. As the Chair, whatever my personal views are in a debate, they are withheld.

Mr. Brake

Thank you, Mr. Deputy Speaker. I am sure that if you had the opportunity, you would make many interesting and useful contributions.

I have not seen the estimate of the clean-up costs. Indeed, from what the hon. Member for Halton has said, no estimate has been made at present and nor has a best approach been decided on to sorting out the problem. It is not unreasonable to think that the clean-up costs will be very substantial indeed and could eat into any funds made available through the comprehensive spending review. That is why I question whether sufficient funds have been granted through the comprehensive spending review to deal with the level of clean-up that is required. Any further moneys could be part-funded through a greenfield development levy or by additional revenue generated by VAT equalisation.

What assessment has the Minister made of the costs associated with part IIA of the Environmental Protection Act 1990? What assessment has he made of the cost to local authorities in this and future financial years? How does the Minister expect those costs to be funded? What assessment has he made of the role of insurance in the clean-up of contaminated sites? Does he agree that insurance is underused because the insurance companies are not in a position to insure budgets against overspend in relation to the clean-up of contaminated sites if that proves to be more costly than had been anticipated? Does he think that if ICI buys out all the homeowners in Weston—as was suggested in an article—it will have breached the spirit of the Act? Does he think that the purchase of the homes, while ensuring that the polluter pays, will allow it to pay less than the genuine cost of the clean-up?

Financial and fiscal rules are crucial to the debate. The planning process also needs to be reformed, perhaps through the creation of special planning zones for major reclamation projects, which would simplify and regularise the present, perhaps over-complex process. A shift from greenfield to brownfield development and the clean-up of contaminated land could be achieved by a small number of relatively simple fiscal changes. The question is whether the Chancellor will bite the bullet.

10.44 am

Mr. Tim Loughton (East Worthing and Shoreham)

I add my congratulations to the hon. Member for Halton (Mr. Twigg) on raising the subject. It sounds as though he has been preparing for the debate for the past 40 years, given that he has acquired practical experience of the subject since childhood and in his constituency. I admire your restraint, Mr. Deputy Speaker: no doubt, you have views on the subject, which relates to that part of the country which is your home, and you would have expressed them, had not the rules of the Chair restrained you.

The subject of the debate might be less sexy than those of others in the Chamber this week, but it is arguably the most important. I say that the subject is less sexy, but even Hollywood has taken it to itself—it is topical. The current film "Erin Brockovich" goes to the heart of problems that the hon. Member for Halton has described. It is a shame that more hon. Members are not here to share their experiences, to hear of the problems in Halton and to tackle the Minister about the Government's attitude.

The subject is important in two main respects. First, we all have examples in our constituencies of contaminated sites: such sites might be former landfill sites, where there is a risk of contaminants leaching into nearby residential areas or into water aquifers. That is a potential problem in my part of the country, which contains the chalk downs of Sussex. Problems might also arise from former industrial sites. The hon. Member for Halton mentioned severely affected sites in Halton and referred to ICI. If those sites are not properly cleaned up—often because the liabilities of the polluter, if he, she or it is known and is still around, are uncertain—they are wholly unusable for future industrial, residential, leisure or other developments. The advantage of tackling the problems is that redevelopment brings community benefits. Many successful schemes have come from community partnerships. They bring many dividends, not least in terms of economic development and improvements to residents' health.

Secondly, the subject is important because derelict land, whether or not it is derelict because of contamination, is a wasted resource. We can ill afford such waste, which is a shared national problem. A thousand hectares of unused brownfield sites in the north-west represent 1,000 hectares of greenfield sites in the north-west or the south-east that could be saved from bulldozers. The problem is mutual, shared across the north-south divide and between town and country. The more that we can do to bring derelict areas in and around cities back into use, the greater protection there will be for green belts, greenfield sites and our countryside. Yesterday, the south-east regional planning committee voted on the Government's proposed house-building figures. The Government's response appears to be that they will carry on regardless—that is, regardless of the views of democratically elected members of councils in the south-east.

Proper recycling of derelict and contaminated sites will become more urgent by the day, especially if the Government stick to the White Paper forecasts of a 20 per cent. increase in the number of households from 20.2 million to 24 million by 2021. The forecast contradicts the experience of the past 30 years, during which the number of houses increased by only 10 per cent. at a time of a falling birth rate.

We welcome the new contaminated land regime legislation, which came into force in England on 1 April of this year. It results from part IIA of the Environmental Protection Act 1990 as inserted by section 57 of the Environment Act 1995, which was introduced by the previous Government. That legislation had five key points: focus, transparency, integration, consistency and better tools. We all agree with those aims and hope that the new framework will be successful, because we all have an interest in solving the problem.

As the hon. Member for Halton suggested. perhaps nowhere will the success of the legislation be judged more accurately than in north-west England, which, as he pointed out, has more than 25 per cent. of the all the derelict land in England. That is not surprising, given his constituency's history of heavy industry, especially the chemical industry. He referred to ICI, which has acknowledged its responsibilities and liabilities and is now seeking to take action. We can argue about whether its decisions are the right ones, but at least the company has acknowledged that it is responsible. A bigger problem is smaller businesses that have long since flown the coop leaving behind problems for others to clean up at their own expense.

The north-west also has environmental problems: I gather that its 6 per cent. tree cover is the lowest in Europe, which has average tree cover of 35 per cent. In addition, one third of the region's rivers are classified as poor or bad, and Liverpool and Manchester are the second and third worst cities in the United Kingdom in terms of failure to meet urban air quality guidelines. The north-east has an acute interest in making the legislation work, but it must provide a solution that the whole of the country can share and enjoy. We have a shared interest, politically and geographically, in the success of the new regime. I do not take issue with the legislation, especially as much of it was introduced by the previous Government. It is too early to judge its success, as it took effect less than two months ago.

I should like to ask the Minister some questions. I am sure that he will have copious time in which to respond to my comments and those of other hon. Members. First, I shall deal with spending. The hon. Member for Halton mentioned several times the number of successful schemes conducted during the past 10 years or so, under the present and previous Governments. However, in the financial year 1994–95, spending in the north-west on derelict and contaminated land treatment was £29.07 million, whereas by 1998–99, it had more than halved, to £13.62 million. During that time, 899 hectares of land in the north-west were reclaimed: £76.82 million was spent on the reclamation, which works out as roughly £85,500 per hectare, which is not cheap. The hon. Gentleman cited many examples that involved the expenditure of a seven-figure sum per hectare. That all goes to show that reclaiming land involves no small amount of resources.

Why was spending reduced during that period, and what are the Minister's future spending projections? Will there be a significant increase and, if so, where will the funds be found? How will liability be split between local authorities or central Government and private companies? Will the Minister give us some indications as to the size of the bill?

Mr. Pike

Does the hon. Gentleman accept the point that I made earlier? Sometimes, local authorities are not prepared to go ahead with schemes because they involve an on-going revenue commitment that cannot be met. For example, if they create a new open space, the grass must be cut. Even if the cost of such work is minimal, it is an additional cost that often cannot be met.

Mr. Longhton

I agree that such schemes are not one-offs. It is no good reclaiming a site and then letting it go, as that merely builds up problems for the future. I shall deal in a moment with the implications of orphan sites, which can arise from different sources. The problem remains of how to sustain funding, not least for the 20 years that most reclamation projects are designed to last.

I hope that the Minister will address the question of spending on the land reclamation programme, which provides funding for local authorities to reclaim derelict land if private-sector firms have no incentive to undertake the task. Under that scheme, because local authorities do not receive central Government funding specifically for that purpose, 100 per cent. of the eligible cost of approved projects is met. To what extent is the programme likely to be expanded? What percentage of the total area of derelict land under consideration has been identified as orphan land? How important is that consideration to the submission of the Department of the Environment, Transport and the Regions to the Treasury in respect of the current comprehensive spending review?

What tax breaks do the Minister and his Department think would act as an obvious incentive for a private clean-up in cases where no obvious private liability can be shown? The Minister will be aware that it often proves too risky for new owners of previously contaminated land—or even land that is only suspected of being contaminated—to assume such a liability, given the much greater legal requirements that are, rightly, placed upon them and the consequent risk of being sued for contamination damage. Mixed ownership, where various firms or private individuals own a contaminated area, is also a problem. What measures do the Government envisage taking to ensure that a common approach is adopted toward such landlords, companies or individuals?

My third question relates to definition, which has already been mentioned. What is a brownfield site? What are the blackfield sites mentioned by the hon. Member for Halton? There is an inconsistency in the definitions used in the national land use database, which came into force in May 1999. Under those definitions, derelict land may include existing landfill sites. It may also include derelict land next to railway stations that is used for car parking, which use we and the Government would encourage, as we want to promote interchange facilities between various forms of transport to maximise the use of public transport. In no circumstances would we want housing, supermarkets or factories to be built on such land because that would have a detrimental effect on our transport strategies.

It has been estimated that only 20 per cent. of what is termed derelict or brownfield land in England is available and suitable for development. That equates to only 164,000 new dwellings, which is substantially less than the number of houses that the Government want to be built on brownfield sites. That potential shortfall is enormous, so the definitions must be correct.

A fourth factor is regional influence. The Rogers report recommended that the Government should have a strong economic policy to incentivise regeneration and the use of derelict land. I praise the north-west regional development agency report on derelict and contaminated land for recognising the problems mentioned by the hon. Member for Halton. The report stated that land reclamation will be a "central task" for the agency, which, at an early stage, will carry out a review of priorities and objectives for land reclamation in partnership with local authorities. However, it warned that it had serious doubts about the accuracy of the national land use database figures. What steps are the Government taking to ensure that we are all singing from the same song sheet and that that song sheet contains the right notes? There are many grey areas in relation to brownfield sites.

I am sorry to ask the Minister so many questions, but I am sure that he will be delighted to write to me in reply, because I know that he takes these matters seriously. What value additional to that offered by local authority projects does he think is added by the involvement of regional development agencies in these matters? All the schemes mentioned by the hon. Member for Halton were local authority projects that were instigated long before regional development agencies appeared on the scene. How much derelict land reclamation work is to be funded in future by regional development agencies and how much by the Environment Agency grant in aid assistance for special site designation for orphan linkages—the problem of unclaimed land where the polluter cannot be traced? It seems to me that all the current action of regional development agencies takes the form of reviews and studies. When will those agencies tackle the problem and clean up the sites, rather than continue to hold apparently endless consultation exercises and reviews of the problem?

The hon. Member for Carshalton and Wallington (Mr. Brake) mentioned insurance. I have had discussions with an organisation called Certa, which specialises in insurance underwriting for contamination problems. Will the Minister comment on the work that has been done in the United States by the Environmental Protection Agency on the availability of environment insurance and risk transfer mechanisms? The Environment Agency in this country has been surprisingly quiet on the matter. Open-ended liability is a real problem, as it acts as a disincentive to companies becoming involved; exploring insurance underwriting to minimise the risk is a practical solution. Will we hear more from the Government about promoting that practical solution?

It would be helpful if the activities of the west midlands-based ground water and contaminated land national centre were more widely known. Much expertise is to be found at the centre, on which many authorities, especially those in the north-west, could draw, but it seems to be an unsung organisation. There are also problems where the Environment Agency has supported the use of an insurance-backed bond to satisfy the regulatory requirements of the Environmental Protection Act 1990. However, the general opinion of the waste management industry is that bank bonds are the only mechanism available. Will the Minister comment on the use of bonds?

Let me give an example from personal experience. I was employed by a City merchant bank that had an investment trust. That merchant bank dated back to the 1870s and had been built on the financing of railway construction in north America. The investment trust was deemed to be liable for some asbestos that had been used in the original railway building work back in the 1870s. As recently as two years ago, it faced the prospect of a multi-billion-dollar lawsuit for something done by the builders of those railways, in which the investment trust had invested 130 years ago. If that lawsuit had gone ahead and a settlement had been made, the investment trust would have gone bust. Long-term insurance liabilities are open-ended risks, because one might be liable for events that go back not just a few years, but centuries, especially if there are American ramifications, because of the litigious approach adopted to such matters in that country.

The Rogers report called for fiscal action to recycle derelict sites, especially the 1.3 million urban buildings that it calculated were lying empty. We are told by a report in The Guardian in May that The patience of new Labour's favourite architect finally snapped this week. The article goes on to say that Lord Rogers described the Government's attitude to the urban report, which was produced almost a year ago, as "disappointingly negative". Lord Rogers has now decided that the only way to influence the Government is to go over the head of the Deputy Prime Minister and appeal directly to the Treasury, possibly on the basis that the Chancellor would be more likely to be in the country, as we are told that the Deputy Prime Minister has now become the Prime Minister for the third world. The article quotes a member of the urban task force as saying: But it is clear that the urban agenda has not yet occupied the centre ground of Government thinking. What progress has been made, after three years of the present Government and 12 months on from Lord Rogers' urban regeneration report and the formation of the urban task force? What recommendations have been implemented, as opposed to further consultation being held, such as on stamp duty? Why did the Government not support the Urban Regeneration and Countryside Protection Bill presented by my hon. Friend the Member for Totnes (Mr. Steen), which dealt with many of the problems that I have mentioned? We were told that Government measures would make that Bill superfluous, but I see no evidence of that.

The matters that I have raised are detailed, but they are of concern to everyone present and to many of our colleagues who did not attend this morning. We have a mutual interest in ensuring the proper working of the new legislative framework, whether we represent southern or northern, Welsh or Scottish, urban, rural or suburban constituencies. I ask the Minister to consider what I have said, although he might like to deal with it in more detail outside this Chamber.

11.6 am

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Chris Mullin)

My hon. Friend the Member for Halton (Mr. Twigg) has raised an issue that is serious, not only to his constituents, whose predicament he graphically outlined, but to the whole country, especially its old industrial areas. He comes from the north-west; I represent part of Sunderland in the north-east, which has many of the same problems. He described a truly shocking state of affairs relating to Weston quarries. I can well understand the devastation and anxiety caused to those of his constituents who are directly involved. The only mitigating factor is that ICI has accepted its responsibilities and is taking action. All too often, in areas of contamination, the original polluter has long since disappeared, or it makes arrangements to do so when the scale of the problem becomes obvious.

Amid the bad news, some better news and some lessons for the future can be found. I am glad to say that we are not creating more sites of the sort in question. Industry must now comply with rigorous controls on the way in which it disposes of waste, policed by the Environment Agency. We must still identify and resolve problems from the past, but the interesting lesson of Weston quarries is that the polluter, ICI, found and owned up to the problem. Thanks to the company's diligence in investigating problems that may have been caused by its past operations, risks to Weston residents have been identified. From my hon. Friend's remarks, I understand that some arguments about the details remain to be resolved with ICI, but the company is actively exploring ways in which to deal with the contamination risk. It also accepts that it will have to pick up the tab.

It would be wrong to say that everything has been handled perfectly or that it is now plain sailing—far from it. We have a lot to learn about the underlying science, and long-term solutions are still to be found. I am sure that ICI will have heard my hon. Friend's plea for the process to be accelerated. I shall raise with ICI the need to release information more speedily. In this case, ICI has taken a responsible attitude, but if the company had not done so, strong new powers are available to local authorities and the Environment Agency to deal with contaminated land.

The new contaminated land regime in part IIA of the Environmental Protection Act 1990 came into force in April this year. It places local authorities under a duty to inspect their areas to find problem sites and gives them regulatory powers to ensure that the polluter pays to deal with contamination. However, it is clearly better not to have to wait for legal action and for intervention by regulators: industry should find the problems that it has caused and sort them out.

My right hon. Friend the Minister for the Environment wrote in April to the chairmen of the top 300 companies asking them to help to clean up Britain's past and challenging them to act responsibly if they were responsible for problem sites. He specifically asked them to develop their own company strategy for identifying contaminated sites for which they are responsible—to be positive, instead of waiting for the regulators to call. I am pleased to say that the initiative is receiving a positive response from industry and that many companies are well ahead in looking at their land holdings to find problems and clean them up. That is good business practice, apart from being good for local communities and the environment. At few contaminated sites are the problems as dramatic or stark as they are at Weston quarries, but contamination issues must be considered carefully wherever old land is recycled to new uses.

The development industry, the professions and the emerging specialist land remediation industry are doing a great deal to clean up and inject new life into old contaminated sites, but we still face a significant problem throughout the country of derelict land, much, but not all, of which is contaminated. In some cases, contamination is the straw that breaks the camel's back and prevents redevelopment from taking place. I am sure that the north-west has more than its fair share of such sites.

My Department is working with Ordnance Survey, English Partnerships, the Improvement and Development Agency and local authorities to develop a national land use database. The first phase of the work has produced a snapshot of previously developed vacant and derelict land and other land in use that may be available for redevelopment. In 1998, that work identified 2,830 hectares of vacant land and a further 3,400 hectares of derelict land in the north-west. The figures for my hon. Friend's constituency are 38 hectares vacant and 31 hectares derelict.

Such areas of land in the north-west are noticeably smaller than those recorded in the 1993 derelict land survey. That reflects three factors. First, some of the land has been redeveloped and is no longer derelict—indeed, my hon. Friend described the work of his local authority and others in helping to deal with the problem. Secondly, some of the derelict land in the 1993 exercise was not counted in the new database, because it is urban and not suitable for new development. Land in that category includes derelict mines and quarries, and railway and military land that has blended back into the natural environment. Thirdly, there may be some under-recording on the new database. All that has been produced so far is a first snapshot: more work needs to be done to complete the database as a regularly updated source. Despite the lower figures, the database still shows that some 20 per cent. of the national total area of vacant and derelict land is in the north-west, compared with 25 per cent. as identified in the 1993 survey.

The Government are committed to bringing derelict land, in whichever region it is located, back into use for housing and other purposes. That is an important part of our goal of urban renaissance, which aims to improve the quality of life for local communities and to tackle social exclusion. My hon. Friend gave a couple of examples from his constituency—the golf course, reclaimed at great expense from a chemical waste tip, and Greenoaks retail centre. In Sunderland, there is the well-known example of our football stadium, which was built on the site of the old Monkwearmouth colliery and seems also to have improved the quality of the football played.

In the north-west, the regional development agency is responsible for the Government's land and property programme, which addresses the need for land for a variety of purposes, including industry and commerce, infrastructure, housing, leisure, recreation and green space. The national budget for the land and property programme is £254 million for the current financial year, allocated to the different regions on the basis of relative economic, social and physical need, as well as on-going commitments to projects. The north-west's share of the budget is £81 million.

In addition, English Partnerships is taking forward a national coalfield programme, which involves working with RDAs to assist coalfield communities who are suffering deprivation as a result of pit closures. An investment package of more than £354 million over three years is in place. In part, that might answer the point made by the hon. Member for East Worthing and Shoreham (Mr. Loughton), who quoted figures suggesting that spending declined between 1994 and 1998. In the light of previous discussions with the hon. Gentleman on Government spending figures, I want to examine, not merely the two figures that he plucked out of it, but the entire picture, which is often rather different.

I should make two important points: first, for 1998–99, we operated according to the previous Government's spending plans; secondly, and more significantly, money for regeneration comes from many different budgets, not just the one to which he referred. I have mentioned some of them, such as English Partnerships' national coalfield programme. In the north-west, 26 hectares of land at the former Agecroft colliery, near Salford, have been reclaimed and serviced. The land is ready for development, and developers are showing a strong interest.

I appreciate that there are concerns about the budgets that will be available to RDAs and English Partnerships as receipts from the sale of industrial properties begin to decline. The long-term resource requirements of RDAs are being considered in the 2000 spending review. The hon. Members for Carshalton and Wallington (Mr. Brake) and for East Worthing and Shoreham invited me to give an insight into the current spending round. Far be it from me, at my lowly level in government, to make commitments on behalf of Her Majesty's Treasury. However, my Department has made clear to the Treasury the importance that we attach to reclaiming derelict land and making it attractive to developers, and recycling money in some of the ways that the hon. Member for Carshalton and Wallington suggested. He and my hon. Friend the Member for Halton can rest assured that their points about VAT and the greenfield levy have been put to the Chancellor by various parties over a long period, and my right hon. Friend is well aware of the arguments. Indeed, I recall making some of those arguments, too, in a previous incarnation. However, I am now a servant of the Government and everything that I say has to be strictly in line with the official position, which is that the Chancellor is considering all such matters.

Mr. Pike

On VAT, the Government have made it clear that the door has not been closed—it may not be wide open, but it is at least ajar. Does my hon. Friend the Under-Secretary agree that it is up to all of us who believe that there is a case for VAT to be equalised between new build and renovation to make that case very strongly to the Treasury?

Mr. Mullin

I certainly agree that the Treasury is the right place to make that representation and I would not prevent my hon. Friend or other hon. Members from making those points to the Chancellor. I think that he is probably well aware of them already, but repetition can do no harm.

My hon. Friend the Member for Halton made a number of very helpful suggestions. His first two—the introduction of a strategic plan and framework for dealing with contaminated sites rather than pepperpotting resources on an ad hoc basis, and the bringing together of different funding streams and bodies working on contaminated land issues—are the reasons why we set up the regional development agencies, which we hope are beginning to make progress in those respects.

I shall certainly reflect on my hon. Friend's proposal for a task force similar to the coalfields regeneration initiative within English Partnerships to tackle severely chemically contaminated sites, although it might, to some extent, be at odds with his earlier suggestion, in which he wanted everything brought together. I have already dealt with the introduction of a greenfield development levy; the same point was raised by the hon. Member for Carshalton and Wallington.

My hon. Friend mentioned greater use of landfill tax credits to remediate chemically contaminated sites. We stated in the waste strategy published a week or two ago that we are reviewing the use to which the landfill tax credits are put. That proposal is one possibility. The introduction of a separate strand of national lottery good causes to deal with especially large and problematic contaminated sites is a matter that my hon. Friend must pursue with our right hon. Friend the Secretary of State for Culture, Media and Sport. As hon. Members have pointed out, some lottery money has already been spent on projects involving contaminated land, the best example of which is the millennium village in Greenwich.

The hon. Member for Carshalton and Wallington made the reasonable point that we must do all that we can—perhaps we are not yet doing enough—to increase the amount of new development on brownfield sites. One of the difficulties is that there tend to be more brownfield sites in the north of England, where there is least development pressure, and fewer in the south of England, where there is greatest pressure. All Governments have to face that difficulty. My hon. Friend the Member for Halton made the point that some brownfield sites are not suitable for development—they are, in effect, blackfield sites, on which houses should never be built. He cited the example of the Weston quarry.

The hon. Member for East Worthing and Shoreham asked several detailed and difficult questions, and, having given them mature consideration, I shall probably have to write him a letter setting out some of the replies. One or two of his points were of a pettifogging nature, if he will forgive my saying so; they were attempts to score points, and do not merit a reply. On his question about insurance, he might be interested in a research project on the management of financial risks that is reaching its conclusion. It is funded by DETR and organised by the Construction Industry Research and Information Association. Its report is to be published soon and I commend it to the hon. Gentleman. That is all that I can usefully say in response to the hon. Member for East Worthing and Shoreham, save that we can all learn from his point about promoting insurance underwriting in the light of the American experience.

In conclusion, I thank my hon. Friend the Member for Halton for drawing this serious problem to the attention of the Chamber. Those of us who represent the older industrial areas have more reason than most to confront the consequences of our industrial legacy. The Government take that very seriously, and a great deal has already been done. Although I cannot promise that the problems will be solved overnight, I can offer the sustained commitment to addressing them for which my hon. Friend asked.

Partnership is the key to change; it cannot all be achieved by Government or local authorities. The polluters must also play a part. I am glad to say that in respect of those who are the most responsible, of which ICI is one, that is what is happening.

Mr. Deputy Speaker

The debate has come to an end a few moments before time. As the initiator of the next debate, the hon. Member for Billericay (Mrs. Gorman) is present, and the Minister has arrived in the nick of time, we can progress immediately to the next debate, which concerns the Government's response to the sixth report of the Committee on Standards in Public Life.