§ Mr. Charles Morrison
asked the Secretary of State for the Environment whether, in the light of the Burns Group's report on local authority powers to assist industry and commerce, the Government have any legislative proposals.
§ Mr. King
My right hon. Friends have given the Burns report very careful consideration. They recognise, on the one hand, the understandable desire of local authorities to encourage the economic development of their areas. On the other hand, they have been conscious of the danger to the Governtment's inner city and regional policies from directly competing activity by local authorities outside the disadvantaged areas, while the variety of powers available to local authorities to assist industry and commerce has proved confusing.
The Government believe that local authorities have a positive and important role to play in sustaining and fostering local employment. Circumstances will differ from area to area so the Government propose to grant local authorities a general power to assist industry in ways appropriate to their own local circumstances. In particular, 466W one of the primary uses of such a power should be to give a helping hand to small firms which underpin the economy of a community. The Government hope local authorities will direct their aid to stimulating additional private investment in new enterprises.
The Government proposes that local authorities should have a new general power to assist independent firms employing up to 25 people in any way they see fit, subject only to an annual limitation on their expenditure of the product of a half penny rate. This would replace local Act powers due to expire in 1984, and the use some local authorities have made of section 137 of the Local Government Act 1972, which will, however, remain available to them for other purposes.
Because of the special problems of the inner areas of our cities, districts designated under the Inner Urban Areas Act would, however, continue to have access to section 137 of the Local Government Act 1972 for the purposes of assistance to industry, as well as their powers under the Inner Urban Area Act.
In addition, the Government propose the following minor extensions to the Local Authorities (Land) Act 1963 in England and Wales:
- (i) increase from 75 per cent. to 90 per cent. the maximum loans on the secured value of a building erected on land sold or let by an authority.
- (ii) allow loans to cover the cost of lease or purchase of land, and any work on land—which might include the preparation and improvement of sites and the provision and improvement of services.
- (iii) remove the current restriction on loans for development to land sold or let by the local authority.
The Government consider that the new package of powers will enable local authorities to make a valuable contribution to the retention and development of sound locally based enterprise, without harming national priorities. Equivalent powers would be available to Scottish authorities. A consultation paper will be issued very shortly inviting views on the details of the proposals. I shall ensure that copies are placed in the Library of the House.