§ INCREASE OF LIMIT ON BORROWING
§ Question proposed, That the clause stand part of the Bill.
§ 10 pm
§ Mr. Ted Graham (Edmonton)
On Second Reading of the Bill last week the House had the opportunity to canter over the course of the wide range of interests of the new towns movement. The Opposition intend to waste no opportunity to reinforce the points that we made then. We understand that tonight Conservative Members also want to set out their interest in the new towns. We look forward to debating for a considerable time, at what might be thought to be a late hour, matters of great interest not only to the Committee and the parties, but to those who live in the new towns.
We are pleased that the Government have decided, albeit 18 months after the last increase, that there is a need to make available to the new towns £1,000 million more than was voted before. The Minister for Housing and Construction said on Second Reading that there were two prime reasons why we were being asked to pass the Bill now, when he had originally thought that the money voted 18 months ago would last for three years. One reason was the Government's inability to secure the money that they had thought they would obtain from the disposal of assets. The second was their inability to forecast or estimate the level of interest rates and the effect of those rates on borrowings.
The Minister said that he believed that the moneys that we were being asked for now would last for about two years. Who knows? Perhaps in a year's time the money now being made available—we shall not oppose that—will be running out.
The Minister also told us that later this year we should be able to examine a changed way of financing the borrowings required by new towns over the years. Those of us who are interested naturally look forward to his announcement.
The Opposition recognises the logic behind the prime need for the money. The Minister mentioned four main areas of interest. Besides the normal needs for roads, housing and development, he spoke of the need to finish off and bring to maturity a new shopping centre at Peterborough, a new railway station at Milton Keynes, a new town centre at Telford and a new industrial area at Corby.
I wonder how long it will be before those development corporations get instructions to sell off some of the assets that we are now funding. I wonder whether the Government will be more forthcoming tonight than they were on a previous occasion, when all they would tell us was—and I quote the Under—Secretary of State for the Environment:We are committed to the continuing disposal of new town industrial and commercial assets in order to reduce the public 210 sector borrowing requirement and also to reduce the public sector's role as a large—scale landlord."—[Official Report, 26 January 1982; Vol. 16, c. 797.]There can be a dispute as to duress, there can be a dispute as to urgency, and there may be some disappointment on the part of the Government that the total is less than they would wish, but there is no doubt that assets of the kind for which we are voting money tonight are in the process of being sold off in one new town or another. What is more, there is no guarantee that, if it becomes financially imperative for the Government to do so, particularly in respect of their public sector borrowing requirement, in a very short time suggestions will not be made by the Government to those who need to listen very carefully to the Government that they will need to reorganise the funding and financing, and of course the control and the direction, of the kind of assets I have mentioned-the shopping centre at Peterborough the town centre at Telford and the industrial area at Corby.
Public money has been invested—and tonight we are being asked to agree that it be further invested—and entrepreneurial skills and expertise which have been maximised by the public sector hitherto have been used to get these assets ready for the market.
I believe that it was the hon. Member for Welwyn and Hatfield (Mr. Murphy) who last week said that it was in the interests of the new towns to get to a state of normality as quickly as possible, that it was necessary to redress the kind of imbalance which he and his colleagues feel has existed. I wonder whether the Minister is able to tell the Committee how far that imbalance is to be redressed.
We already see their policies in housing, and I shall deal at length with the housing situation. We see that the Government are very interested in fulfilling their electoral commitment to make available to every tenant in the new towns the opportunity and the right, enshrined in law, to purchase his own house.
The Minister was able to tell us when he dealt with housing that there were a number of ways in which the Government had sought to bring that about. He mentioned low—cost home ownership schemes. He drew to our attention the fact that 1,300 acres of land had been sold or leased to private house builders and that 14,000 owner—occupied dwellings were scheduled to be built thereon. In Warrington 2,000 dwellings has been built on 25 sites. At Milton Keynes 3,500 dwellings had been built on 45 sites. He was very interested in and proud of the homesteading scheme.
Where does the Second Reading debate show the interest, care and concern of the Government not only for those who are living in the new towns now and who may have lived there for 10, 15 or 20 years but for the second and third generations of people not in the new towns? Where is the Government's concern to ensure not only that the houses that have been built can be sold, but that the people who are unable to buy, who may be very young and may have lived there, for far longer than others who may come in for a short period and buy their houses, can get homes?
I look across the Chamber and behind me. Behind me I see empty spaces. On the Government Benches I see a number of hon. Members who have a particular interest in the waiting lists of their constituents.
§ Mr. K. Harvey Proctor (Basildon)
The empty spaces are on the Opposition Benches. That demonstrates the Labour Party's commitment to new towns. After the results in the last general election, I am not surprised.
§ Mr. Graham
Relief is on the way.
I intend, ruefully, to draw attention to the fact that in most of the new towns, particularly in England, the electorate decided to return Conservative Members of Parliament. When I give the Committee the trebled and in some cases quadrupled lists of those now unemployed, most of whom undoubtedly voted Conservative, we shall see that there is a range of statistics about the new towns over the past three years in addition to the figures for the acres of land that have been sold to the private developer or to tenants who have bought their homes.
Hon. Members who represent new towns will tell me if my figures are out of date. They are the latest figures of waiting lists that I have been able to obtain from the Library. The later the period, the longer the waiting lists will have grown. I look forward to being corrected by hon. Members on the Government Benches.
The hon. Member for Basildon (Mr. Proctor) is always in his place during debates on new towns. The figure that I have for the waiting list in Basildon is 3,440. It is about 12 months old. The hon. Gentleman may be able to give me a later figure.
§ Mr. Proctor
I thought that the hon. Gentleman might mention waiting lists. As far as I can ascertain, the figure is 3,316. Over the year there has been an edging down, if anything at all.
§ Mr. Graham
I am grateful to the hon. Gentleman for proving that the figures I have been given for the other new towns are broadly correct. The waiting list should form part of the picture of the new towns. They make depressing reading. For Runcorn the figure is 2,662, for Washington, 4,000, Northampton, 3,700, Peterborough, 2,800, Hemel Hempstead, 3,900. Sedgfield, which is Aycliffe, 3,022, Welwyn and Hatfield, 2,163.
I see that most of the Government hon. Members are in their places. I invite them to explain to their constituents precisely what pressures they are bringing to bear on Ministers not merely to allow houses to be bought, new town land to be sold and the sale of the new town assets to be authorised, but to make more houses available for the second and third generations of citizens.
I come now to the Government's overall strategy for new towns. Because of information received from my hon. Friends who have new towns in their constituencies and from chief officers in new towns, we believe that the Government intend, if not to abandon the new towns to their fate, to give them a lower priority for public money and less attention than they have had from successive Governments over the past 35 years. Until the Government came to office in 1979 the approach to the development, encouragement, stimulation and sustenance of new town movements was bipartisan. At times cash may have been short, but the movement was always forwards. There is now the forced sale of assets. We also criticise the Government's lack of support in the rate support grant.
New towns have special problems. There are extraordinary costs for planning the towns and their 212 communal assets. The higher proportion of younger people in the new towns also necessitates different provision. The Government persistently fail to respond to pressure from both sides of the House to recognise that new towns are different. The Under-Secretary of State properly said that every area believes that it is entitled to special pleading. However, even with the mix of political control and the changes in the past two or three years in the new towns, there is unanimity on the need for a special input for new towns in the GREAs.
The Government have also failed to respond to the needs of new towns in the HIP allocations. They have a responsibility to help to sustain and expand the new towns. I shall again quote some statistics that are relevant to the constituencies of hon. Members who are present. Welwyn and Hatfield put in a bid for its HIP allocation for 1981–82 of £8,922,000, but it received only £2,000,525. That figure was a lot lower than the figure for the previous year; this year it has been marginally improved.
§ Mr. Christopher Murphy (Welwyn and Hatfield)
If the sale of new town assets moves at tremendous speed, as we hope it will, the money can be ploughed back into the new towns and help to provide more finance. Perhaps even more significant in the case of Welwyn and Hatfield is that the receipts from the sale of council houses can be used to provide more housing accommodation for the second and third generation families living there. In addition, perhaps the hon. Gentleman will pay tribute to my efforts to ensure that the redevelopment of the concrete houses in Welwyn Garden City can now go ahead.
§ Mr. Graham
We have repeatedly asked the Minister for an idea of the sums raised. A statistic was produced last week. We also asked what proportion would be ploughed back into the new towns or, alternatively, what proportion finds it way back into the Treasury coffers. Surely it is not impossible for the Minister and his civil servants to be able to give us some idea of that.
We have been told that it is the Government's intention to plough the money back into the new towns. When the Local Government, Planning and Land Bill was considered in Committee, we sought to move amendments to that effect, but they were rejected by Ministers on the ground that they wanted more flexibility.
I hope that the hon. Gentleman is more satisfied than I am that the money raised from the sale of assets will be used for new town purposes. Up to now, we have been unable to get any figures.
The hon. Gentleman also argues that the capital receipts that go to a local authority should be ploughed back. That is the doctrine of the Conservative Party. I know that the hon. Gentleman takes an interest in housing. He will no doubt be aware that in July, when giving evidence to the Select Committee on the Environment, the Secretary of State acknowledged that the amount of money finally left to a local authority to invest in new buildings meant that 12 dwellings had to be sold to realise the capital necessary to build a new house.
When I mentioned that last week, the Minister replied "Yes, but in addition to the new house that is built, there are also the two that have been sold". The Conservative Party's imperative need is to sell the houses. Ours is to continue to retain as many as possible for rent. That is the difference between the two parties.
The Conservative Party wishes to pursue its imperative need to sell assets. Labour Members have no objection to 213 the sale of council houses or to owner-occupation in certain circumstances. One such circumstance is that no people should be desperately in need of housing for rent. Therefore, if the Government intend to continue the sale of new town assets and refuse to tell us how far down the list they will go, we are entitled to alert people in the new towns and others to the situation that will emerge.
Perhaps Conservative Members will also tell me whether my figures for housing starts are correct.
Conservative Members have told us the number of tenants who have bought their houses, and the number of acres that have been sold. I have tried to redress the balance by highlighting the poor allocation of money for housing and the waiting lists. I am told that in Basildon the number of housing starts made between the districts and the corporation in 1979 was 1,099 and that in 1980 the number fell to 350. However, perhaps the hon. Member for Basildon has the figures and can persuade hon. Members and the people of Basildon that to start building 750 fewer houses in the first full year of the Conservative Government's term of office is good for the people of Basildon.
§ Mr. Proctor
I represent the people of Basildon and I Know that they do not want the new town's designated area to be built on all over, like a gigantic concrete building estate. I must weigh that factor against the waiting list that the hon. Gentleman rightly said numbered 3,316. I had not intended to pursue my earlier intervention, but I am glad that the hon. Gentleman has taken up the point, because Basildon is a shining example of a successful new town.
To help him with his speech, I am happy to give the hon. Gentleman the breakdown of that 3,316. For example, there are 1,487 applications on the single persons' list. Everyone knows that there is a high wastage rate among single persons on the waiting list. I am concerned about the provision of housing for single people, but that figure is slightly phoney. In addition, there are about 102 families in Basildon waiting to be rehoused. That puts the 3,316 in perspective. The remainder—the 1,727—
§ Mr. Proctor
The hon. Member for Edmonton (Mr. Graham) was interested in the figures and I am trying to help him—
The Second Deputy Chairman
Order. I am sure that the hon. Gentleman will try to catch my eye later, but he has made a long intervention.
§ Mr. Graham
I am grateful to the hon. Member for Basildon, because in a perhaps lengthy intervention he has demonstrated his detailed knowledge of his constituency and of the waiting lists. In addition, he made the interesting point that, in his view, the people of Basildon do not want the whole of the designated area to be built on. I assume that he is saying that he will oppose not only the building of corporation or council houses, but the sale of land and the building of private houses. Rightly, he did 214 not distinguish between council and private houses but said that he was opposed to further building in the designated area.
I turn to the atmosphere in which new towns find themselves under a Tory Government. I have acknowledgged that in 1979 many people voted Conservative because they believed in the offers contained in the manifesto. They were interested in the opportunity to buy their houses and they thought that the disgraceful unemployment figures of 1.25 million under a Labour Government was a scandal and could be arrested by a Conservative Government. They thought that they would be allowed to retain more of their earnings in their pockets and that inflation—already at the scandalous level of 9.6 per cent.—would quickly fall. Many people in the new towns felt that they should buy that prospectus and did so.
What has happened? I can just about manage to leave out Basildon, but I have evidence about unemployment in Harlow. In December 1979, unemployment in Harlow was 3.1 per cent. —2,291 people. A year later, it had increased to 6.9 per cent. —5,076. In December 1981, it had rocketed to 9.1 per cent. —6,714 people—a modest figure compared with the national figure. There had been a threefold increase in the number of unemployed people. I wonder when Conservative Members who represent new towns will be as loquacious about the effects of unemployment on their constituents as they are in boasting about the sale of council houses and new town assets.
Then there is the situation at Stevenage. The hon. Member for Hertford and Stevenage (Mr. Wells) normally shows an interest in these matters. In 1979, 1,379 people were registered unemployed—3.6 per cent. In 1980, the figure had increased to 2,681–6.8 per cent. Now it is 4,346–11 per cent.
Let us look at another part of the country, Peterlee. I am glad that my hon. Friend the Member for Easington (Mr. Dormand) is present. He knows the figures better than I do. In 1979, just after the Government came to office, the total was already a scandalous 9.8 per cent.—I say "scandalous" regardless of which Government were in power. By 1980, the figure had increased to 13.3 per cent. Now it is 16.4 per cent. Let us take Warrington. In 1979 it was 5.7 per cent., in 1980 it was 10 per cent., and in 1981 it was 14.1 per cent. There has been almost a tripling of the unemployment totals, and it is marginally above the average for the country.
We accept that further money will be available to complete the maturity of certain new towns, but it must be said that the Government have a nerve to boast, as the Minister did on Second Reading, that they are satisfied with the progress with the new towns.
Although we shall not oppose the clause, we are far from satisfied that the Under-Secretary or the Minister of State have answered the many detailed problems that were raised. The Under-Secretary was well received when he visited Peterlee last week. While he was there, there was a programme on BBC television which dealt with the section 10 issue. We were told that the amount that would need to be spent to put corporation houses in a reasonable state was £47 million. I do not accept that as the correct figure, and I am sure that the National Building Agency could produce a different figure, particularly as the 215 Government have already ruled out some of the costs which it had been anticipated would be included, for instance drains.
Can the Under-Secretary say anything hopeful about the problem that will land on the doorstep of the Easington district council a few months after the report from the NBA is received? Last week he told us that before the Government decided how much they would offer, or the formula for the offer, they would allow Easington district council and others to look at the report and put questions directly to the NBA successor and also to Ministers. When one considers that a district council is faced with a bill that could be £47 million, although grant-aided in part—which may be as little as £15 million to £20 million—and saddled with a housing stock upon which must be spent £20 million or £25 million, it is a horrendous prospect.
§ Mr. Jack Dormand (Easington)
I am grateful to my hon. Friend for making my speech for me. It is much more important coming from him, because he has made many statements about Peterlee. I was one of those who invited the Under-Secretary of State to Peterlee last week. His visit received tremendous publicity and he may also be aware that there was a national television programme about it. I mention that only because of the severity of the problem. My hon. Friend mentions a figure of about £40 million. I hope that he will concur with the view that the position in Peterlee is the worst in the country for new towns.
§ Mr. Dormand
When I say "the country", I mean England. When I raised the matter with the Minister for Housing and Construction, who is present this evening, he said that when the HIP allocation was made to Easington an allowance was included for Peterlee. I have taken that up with Easington district council—I hope that I do not put the point too strongly—which is at a loss—
§ The Chairman of Ways and Means (Mr. Bernard Weatherill)
Order. The hon. Gentleman may be putting his point strongly, but he is doing so at considerable length. Will he kindly bring his intervention to a conclusion?
§ Mr. Dormand
It is fundamentally important to Easington district council that there is an allocation of money for Peterlee. I hope that before the debate ends we can have clarification of this most important aspect of financial assistance to Easington district council.
§ Mr. Graham
I am grateful to my hon. Friend for helping to make my speech. He raises a point upon which I touched. Although we are satisfied with the purpose of the Bill, the clause and the figure of £1 billion, we are far from satisfied with the Minister's response to what we consider to be reasonable questions. For instance, we have been told by the Minister that when the allocation is made there is within it an element which the Ministry has said should help to keep the section 10 claim properties out of trouble. Last week I mentioned Stevenage, which asked for £5.8 million and catalogued the things upon which it wished to spend the money. It was given an allocation of £2.8 million and was told that, within the £2.8 million, there was an element for the section 10 properties. No reference was made to whether that element was £200,000 216 or £500,000. The more money that was intended for that element, the less was left for other purposes. It was already half-cut.
The Under-Secretary of State will do the new towns movement a service by ensuring that his civil servants give him a list of new towns, with against each name the figure in tens or hundreds of thousands of pounds which the people in the new towns will be interested to know is the allocation to be spent on keeping section 10 properties out of trouble.
This is a Government who apparently believe in efficiency, speed, openness and honesty, and I am merely asking them to deliver the goods. They have said that the figures are available and they have been given notice that we want them. We have said that we do not want to argue about them. If the Government do not respond, they may be accused of using generalisations and of fobbing off those who are in a desperate state.
As I have said, Easington may eventually get less than half of the money that it says it needs from the NBA. If that happens, those who are responsible for these matters in Easington will be extremely worried. The former Under-Secretary of State said in Committee and on the Floor of the House that there should be no worry about the section 10 provisions because until the formula is evolved moneys will be made available. I have letters from the chief officers of two authorities who say that they have been told that but that they cannot get the moneys that they require.
The moneys that we shall be voting are welcomed and needed. However, before we allow the clause to stand part of the Bill we require some answers from the Minister.
§ Mr. Norman Hogg (Dunbartonshire, East)
The Bill increases the statutory borrowing limit for new towns from its present level of £4,000 million to £4,500 million. with a further provision to increase it to £5,000 million. Scotland's borrowing from previous provisions was 16 per cent. in 1980–81, and the 1981–82 figure was 18 per cent. Those percentages were provided by the Under-Secretary of State when he replied at the end of the debate on Second Reading on 26 January.
We are dealing with considerable figures and we do not regretful that the borrowing capacity of the new towns is being increased. My right hon. and hon. Friends welcome the fact that more money is being spent on new towns. There are interesting questions to raise on the accountability of new towns and the Under-Secretary of State for Scotland who has responsibility for industry and the Scottish economic planning department, and with that responsibility for the new towns, the hon. Member for Edinburgh, North (Mr. Fletcher), will know that that is an aspect of new town life in which I am interested.
The Bill is an important financial measure, because the sums involved are not inconsiderable. When we are spending money on new towns it is wise to consider accountability. The new towns have a good record on housing, jobs and the environment, but the accounting for the cash that is borrowed leaves something to be desired, as does the accounting for the decisions taken on how the money will be spent.
I decided to break out from Scotland, and I have written to every new town in the United Kingdom. I hope that Conservative Members who represent new towns will forgive me for doing that. I wanted to ascertain the practice 217 in new towns on admitting the press and public to meetings of the development corporation boards. I regret that every new town replied that it did not admit the press and public to meetings of the development corporation board. My hon. Friend the Member for Edmonton (Mr. Graham) reminded Conservative Members that at the last general election the theme to which the Conservative Party returned again and again—the Prime Minister was often heard to stress the point—was that there would be open Government, that there would be accountability and that people would know about decisions concerning their lives.
That being so, I thought it reasonable to write to every new town and find out what the practice was about admitting the press and public to meetings. I discovered that not one did that. Some, like hon. Members who represent new towns, replied at great length, but it added up to saying that they did not admit the press. Some simply wrote back and said that they had never done that and were not going to do it. Of course, they all said that they produced an annual report which had to be laid before the House. That is a statutory requirement. They all laid claim to keeping the public informed.
My point is that the vast sum of money that we are talking about—the Bill will make more money available to the new towns—will be spent by the development corporations and we will not discover what they have done with it until they produce an annual report a year later and place it before the House. I contend that that is not the open government that Her Majesty's Government promised when they were Her Majesty's Opposition. I wonder when they will finally get back to that, because they are kidding us on when they say they are a party of open government. The whole record is to the contrary.
I am sure that the Committee is aware that not only do new towns spend money but they collect it in the shape of rent and from the sale of assets. They make decisions appertaining to planning and environmental matters. They do all that behind closed doors. my constituents are fed up to the back teeth with that policy. I am certain that my hon. Friend the Member for Central Ayrshire (Mr. Lambie), who represents Irvine, can tell the House that he, too, has endeavoured to pursue a policy of open government for the new towns, but has got nowhere.
The truth is that the Government determine rents policy and the new towns must carry it out. I shall say something about that, because the new town that I represent recently decided to increase its collection of moneys from the citizens, which will add to the borrowing requirement about which we are talking. On the Government's instructions it decided that the rents would be increased by between 19.8 and 22.2 per cent., against the background of a 12 per cent. rate of inflation last year and an increase in earnings of below 12 per cent. for those fortunate enough to be in work. It does not take account of the fact that thousands of people have been displaced in the Scottish new towns as a consequence of the crazy economic policies pursued by a crazy Government. As a result of that, money coming out of the economy in Cumbernauld will be fairly considerable and that will be true of other Scottish new towns.
That was all decided in an atmosphere of complete secrecy, because the corporations do not conduct their affairs out in the open although, of course, they produce broadsheets and hold press conferences after their 218 meetings. What is said then is, of course arranged and people do not know the arguements that were offered for one decision or another. It is important to know the arguments. We have the right to know.
If we approve the measure, I hope that the Minister will be able to say that because we have approved the clause he will instruct the new town boards to pursue a policy of open government. It is good to see a Minister from the Scottish Office here. I hope that he will say that he will ask the Government to table an amendment to the Local Government and Planning (Scotland) Bill or a new clause. If we had a new clause that said that the Government would pursue an open door policy, that would be extremely welcome in Scotland.
I shall be mildly complimentary about the Under-Secretary of State for Scotland, as it is late at night. I welcome the fact that the Scottish economic planning department has published a useful paper on the future on the new towns in Scotland. It is useful in the sense that we were able to have a debate publicly in Scotland among those of us who live in new towns. We considered how we saw the future of the development corporations and the development of the new towns as we move towards the end of the century.
Some hon. Members have submitted their views. I know that my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) is actively considering the Government's paper in consultation with development corporation members with whom the Opposition are friendly. It would be desirable if in the Scottish Grand Committee we could discuss the future of the new towns. Some of us have submitted papers to the Minister setting out our views and saying how we see the future.
When we are discussing a measure that substantially increases the borrowing capacity of new towns, it is right that at the same time we should mention some other sources of income and the Government's mistaken view about them. One such source of income to which they are currently directing their attention is the sale of assets. In the paper that I submitted to the Under-Secretary. I made it clear that I did not know of any of my constituents who supported the sale of assets. They write and tell me that that is a mistaken policy. They even stop me on a Saturday morning when I am shopping with my wife in the town centre to tell me that they think that some of the asset selling ideas that the Government are currently pedlling in the new towns are mistaken.
I hope that the Under-Secretary of State for the Environment or the Under-Secretary of State for Scotland will take account of what the citizens of new towns feel about the sale of assets. It is a mistake to believe that that can fund future development, as has been suggested time and again. It is nonsense to think so. It must be a bad time to sell land. I do not know of any time since the Government came to office when the property market has been at a lower ebb.
Others may know more about these matters than I do. I read only the Financial Times,and I do not know how reliable a document it is. I am not in business. My understanding of the current state of the property market is that we are living in very depressed times. Yet the Government choose precisely such a time to sell their assets. What sensible business man would sell his assets on a depressed market? Only a Tory would be so foolish. That is why we are left with estate agents on the Conservative Benches. I remember when those benches 219 were occupied by people of worth and substance in the business world, when there were sweet shop owners as well as estate agents and the whole grotty crew. However, I shall move on from that before I get into difficulty.
One asset of the new towns which cannot be sold and which I do not think that even the Government are trying to sell is manpower. I suspect that there are people who think that slavery was a good idea and should be brought back, but I would not attribute that view to Conservative Members. Nevertheless, in this rundown period there is a danger that people with particular expertise, especially in planning, will be lost to new town development. I am worried that, faced with the rundown of the development corporations, the teams of experts who were brought in to plan the new towns, to attract industry to them or to ensure that the environment was such that people would wish to live there may be quickly broken up and the expertise lost. We know that in Scotland some of the staff will have to go to work for the district councils, because they are the major housing authorities, some will find their way into the regional authorities and others may go to the Scottish Development Agency, the Scottish Economic Planning Department or some other central organisation administered by the Under-Secretary of State for Scotland.
In those circumstances, in which there may be a conflict of interests between the merging authorities or a possible loss of expertise, the Minister should be prepared to set up a staff commission, like that which existed at the time of local government reorganisation, to consider the interests of the towns against the background of the talent available to them. I hope that very careful consideration will be given to that.
I return to the question of assets, as it is what is happening to the financing of the new towns that worries us most today, and the important role played by housing in that respect.
Public sector housing in Scotland forms a large part of the total housing stock. I cannot remember the exact percentage, but the number of houses held privately is considerably lower in Scotland than in England and Wales.
§ The Under-Secretary of State for Scotland (Mr. Alexander Fletcher)
It is the lowest in Western Europe.
§ Mr. Hogg
I am sure that that is correct. It emphasises the point that I make.
The public sector housing stock is immensely important to the standard of living in Scotland and it is essential that everything possible should be done to ensure that the housing is of the highest standard. In the move towards running down new towns in Scotland, I do not want to see too rapid progress towards fixing a vesting date for placing the houses in the hands of the district council so that all the problems associated with loan charges, interest charges and related matters arise on one day.
§ 11 pm
§ Mr. Graham
Does my hon. Friend agree that the greatest concern of second generation new towns is a dragging of feet following dissatisfaction over section 10 claims in relation to the first generation new towns? No agreement is likely to be reached with any new town until the Government settle the question of responsibility on the best terms. A whole range of matters apart from rents and the cost of assets needs to be resolved.
§ Mr. Hogg
My hon. Friend's intervention makes the point that I am trying to impress upon the Under-Secretary of State for Scotland. If the hon. Gentleman insisted on the transfer overnight of development corporation houses to the district authorities, the problems, financial and otherwise, would be considerable. The transfer would have a major impact on rate levels in the new towns. There would be no benefit to the communities either socially or industrially. The Government themselves have plenty to say about the impact of rates on industry.
If an increase in the amount of money made available to new towns will improve their capacity to provide employment—there has been mention of Peterlee—and the attraction of industry, it will be a worthwhile exercise. Although new towns still provide an attractive base for new industry and represent an important feature of our endeavours to achieve inward investment, it is nevertheless a fact that jobs have been disappearing from the new towns at frightening speed. My hon. Friend the Member for Central Ayrshire (Mr. Lambie) will, I am sure, describe the appalling situation that has developed at Irvine.
The same problem exists at Cumbernauld which last year suffered a net loss of 723 jobs. Our second largest manufacturing industry, the clothing industry, in which, I believe, you, Mr. Weatherill, take an interest, could lose several hundred more jobs. I refer, of course, to the Lovable company of Cumbernauld.
I have met the Secretary of State for Scotland and the Under-Secretary of State. I am grateful for the attention that they gave to what I wished to say about the factory.. I grow more worried about the situation. Later this week, I believe, the receiver will finally accept an offer. I fear that that offer will be conditional upon farther redundancies. If that is so, there will be total resistance by the work force, and they will have my full support.
Those situations exist against the background of the clause. If the Under-Secretary of State for the Environment can say that some of the money will be spent on attracting jobs, that will be good news. I hope that he will listen attentively to those of my hon. Friends who will. draw attention to the serious situations in their constituencies.
I was interested in the letter that the Minister with responsibility for industry and education at the Scottish Office sent to my hon. Friend the Member for Garscadden. I was particularly interested that he said:I think that Norman Hogg and David Lambie were perhaps unduly influenced by the immediate situations in Cumbernauld and Irvine in what they said in the debate.I do not think that we were unduly influenced. I have repeated some of the things that I said on Second Reading, and I hope that my hon. Friend the Member for Central Ayrshire will do the same. It is imperative that we impress upon the Government that, although it is true that new towns have been a success, and that they are to some degree a continuing success, the position in Scotland is dangerous.
I fear that the new towns on the periphery of the city of Glasgow will cease to be industrial bases—perhaps with the exception of East Kilbride—and will become simply places where people live and from which they commute to Glasgow for employment, if we are to have any employment there either. What we say is said not because 221 we are unduly influenced by but rather because we are immensely concerned about what is to happen in the new towns.
I shall support the Bill, but I hope that we shall receive assurances that some of the money will be converted to the important role of attracting new industry and employment to the new towns in Scotland.
§ Mr. Dormand
My hon. Friend the Member for Edmonton (Mr. Graham) used a telling phrase on Second Reading. He said:New towns are successful, but, alas, according to the Government they are fatally flawed because they are successful public enterprises."—[Official Report, 26 January 1982; Vol. 16, c. 766.]That was a wise statement. It indicates the whole tenor of this debate and other debates on the new towns. The Government, perhaps more than any other Conservative Government, hate to see public enterprise succeed. Since they came to power they have disbanded public enterprises and put them in a disadvantageous position. We can certainly say that about the new towns, whose residents have been caused immense difficulties.
I want to concentrate on my constituency and Peterlee new town. I referred earlier to the Under-Secretary of State's visit to Peterlee last week. I thank him very much for that visit, which he made as soon as he could. I have asked many questions about Peterlee; I have made speeches about it here; I have sent the hon. Gentleman many letters; and we have had informal chats. I hope that he will agree that going to Peterlee and seeing the terrible state of some of the property there was the only way in which he could understand the problems that some of my constituents are suffering. My complaint is that the Under-Secretary of State managed to spend only three-quarters of an hour with representatives of the Easington district council. It was an additional part of his tour, but it was in some ways one of the most important parts of the visit. He was getting first-hand accounts from councillors who are conscious of the problems facing Peterlee. I hope that he felt that it was worthwhile and that he will take an early opportunity to continue the discussion. I understand that there has been a request for a meeting in London for further discussions. I wonder whether the hon. Gentleman will confirm what I have said on a number of occasions—that he feels that the conditions in Peterlee are the worst of all the English new towns.
A figure of £47 million was mentioned. I concede that a number of sums have been mentioned for necessary repairs. If we settle for £40 million, I hope that that will demonstrate the problems facing the council, the tenants and the Member of Parliament. Hundreds of constituents are affected. Local newspapers are full of the problem, and television and radio continually carry programmes about it.
I wonder whether the Under-Secretary of State would make a statement on the interest which would still be payable on non-existent houses. Twenty-nine houses in Peterlee have been built for only a short time, but their condition is so bad that they are already being demolished. The council will have to pay interest on houses which will not be there. If the Government have any concern for the people of Peterlee, they could do something which would cost little but which would be a gesture to those people and which would show that they are prepared to help the new 222 town. The cost of repairs in such a serious situation should not be a matter for local people. It is essentially a national issue upon which the Government should take action.
The Under-Secretary will know that his predecessor told the Easington district council that the Government knew that conditions were bad, that it should remedy the worst part of it and that the Government would make sure that the money was available. Not a penny has yet been paid to the council. That is a serious statement and an even more serious situation for the council.
In answer to a question from my hon. Friend the Member for Newton (Mr. Evans) who askedHow much cash flowing from the sale of the assets has been paid back to the Treasury?the Minister for Housing and Construction stated:The receipts from the sale of assets have been used in part within the new towns; in part there has been some cash repayment to the Treasury. Any cash repayment to the Treasury has merely enabled the levels of borrowing and public expenditure for the new towns to be maintained at a higher level than would otherwise have been possible."—[Official Report, 26 January 1982; Vol. 16, c. 759.]My hon. Friend the Member for Edmonton referred to the HIP allocation to new towns. How much money from the sale of assets has gone to meet the needs of towns such as Peterlee? Several needy cases have been quoted. None is worse than that in my constituency.
The Under-Secretary of State will know what I am about to say. I have raised the matter many times. Easington has had to jump through a number of hoops set by the Government. I repeat with all the force that I can that the Government are still stalling. The most recent Government hurdle has been to refer the matter to the National Building Agency. They know full well that the inquiry will take months. They are now even privatising the agency, which will mean further delay. The Under-Secretary of State shakes his head. We shall watch developments. The Government have brought the problems of housing on themselves. I hope that they will give priority to this important matter.
I indicated an Adjournment debate on the subject recently, so I shall be brief, but I wish to deal with the winding-up of Peterlee development corporation. The development corporations not only in Peterlee but in Aycliffe and Washington—the three new towns in the North-East—make a valuable and important contribution to employment in the region hardest hit by unemployment, the North. I shudder to think what the position would have been without them. They have an excellent record of job finding.
The Peterlee and Aycliffe development corporations are to be wound up on 31 December 1985. The need for jobs in the area will continue long after that. The Under-Secretary of State says that I suggest an open-ended commitment by the Government to the development corporations. That would be unreasonable, but for at least another five years after 1985—certainly if Government policies do not change—there will be a great need for jobs.
My hon. Friends representing Scottish constituencies know that the wind-up of their development corporations is to be in 1990. I do not know why in England the date should be 1985 and in Scotland 1990.
§ Mr. Graham
My hon. Friend touches on an issue central to the future climate and mood of new towns. If in the desperate recession the Government wish to keep the 223 expertise, knowledge and wisdom built up in the new towns, instead of buying trouble by sticking rigidly to a date that may have looked attractive two or three years ago, they should negotiate a new date. The uncertainty may affect the morale of development corporation employees or their desire to remain with them.
§ Mr. Dormand
That was to be the next part of my speech. These people are dedicated, knowledgeable and often quite young. They saw their future with the new towns. From time to time I meet the general manager of Peterlee, who does a first-class job. He said that they were bound to be concerned about their futures. At present there are no fewer than eight vacancies in Peterlee. If that is not a manifestation of the point that we are putting to the Under-Secretary, I do not know what is. The Government are blind if they say "This is a long way off yet and it is not affecting staff morale". The simple fact is that—
§ The Chairman
Order. I am sorry to interrupt the hon. Gentleman, but he cannot talk about morale. The clause is concerned strictly with money.
§ Mr. Dormand
I am conscious of that, Mr. Weatherill. This is a question of money, because if the Government cut off the money in 1985 the development corporation and all its expertise will come to an end.
If the Government do not give serious consideration to the problems facing Peterlee and other new towns, the desperate unemployment situation in the North-East and in my constituency in particular will become very much more worse. if so, a heavy responsibility will fall on the Government' s shoulders.
§ Mr. Warren Hawksley (The Wrekin)
I do not intend to detain the Committee for long. I wish to raise a specific and important point. The amount mentioned in the clause is adequate to ensure that the third generation new towns in particular are completed, and that is the Government's commitment.
Telford is located in my constituency. I am not particularly concerned about housing, but rather about how much of the money under discussion will be available for health provision. We have heard of new towns getting something from this lump sum for health provision in their areas. We in Telford have inadequate health provision. Our waiting list is increasing, whereas in most parts of the country the waiting lists are going down. A hospital was closed while the Labour Government were in office. As result, there is no hospital within the area.
The Government have given a commitment to provide a new district general hospital. The regional health authority has asked whether it can provide the money for it—
§ The Chairman
Order. I apologise for interrupting the hon. Member, but the clause has nothing to do with hospitals. It is concerned only with an increase in the borrowing limit.
§ Mr. Hawksley
I respect the point that you have made, Mr. Weatherill. Perhaps my hon. Friend the Under-Secretary will say whether part of this sum will go towards health provision within the new towns. I should like to hear what provision will be available. I believe that some new towns get some provision, whereas others do not. Telford gets none.
The regional health authority is not providing the new district hospital at present, not because of lack of 224 resources, but because that is not its top priority. Therefore, I should like to know whether part of this money will be made available for that. Can we expect some provision from this total amount to meet the health needs that everyone in the new town, including the new town corporation and the area health authority, regards as essential?
I hope that my hon. Friend will be able to give assurances to my electorate that he will at least do all that he can to put pressure on the regional health authority to provide the health services to which the Telford area is entitled.
§ Mr. David Lambie (Central Ayrshire)
The clause allows for an increase from £4,000 million to £5,000 million in the borrowing limit. On Second Reading, I was prepared to support the clause, but after my meeting last weekend with representatives of Irvine development corporation I am prepared to vote against it.
Before being prepared to support that increase in the borrowing limit, I want to know how much of the money will be allocated to Irvine new town, in my constituency, and whether the Secretary of State for Scotland will impose any sanctions on local authorities before allocating that money. Like my hon. Friend the Member for Dunbartonshire, East (Mr. Hogg), I welcome to the Chamber the Under-Secretary of State with responsibility for Scottish new towns. We do not often see him at debates in which Scottish interests are also being discussed. The last time that I called for his attendance, I was tole that I had upset him and that he had had to leave a dinner to answer my Back-Bench questions. I hope that he has not had to leave somewhere tonight to come to the Chamber. However, it is good to see the Minister in the Chamber, and I hope that he will consider the points raised 5y my hon. Friend, with special reference to Scotland and the Scottish new towns.
I represent Irvine new town, which was the last new town to be designated in Scotland. Contrary to the views of Conservative Members and some of my hon. Friends, it is not a success, but a disaster story. It is not a new town but a disaster town. Unemployment stands at 24.7 per cent. and male unemployment stands at 29 per cent. Nearly every third male in Irvine is unemployed. Hon. Members can therefore see why I want to know how much of the extra £1,000 million is to be spent on Irvine. If ever an area needed money, and an inflow of capital and Government money, it is that new town.
How much of the money will be allocated to Irvine? More importantly, will the Secretary of State for Scotland impose any conditions on Irvine before allocating it? On Second Reading, my hon. Friend the Member for Dunbartonshire, East said that the Secretary of State had that day issued a press statement implying that the Government recommended that new town boards should increase rents by, on average, 22 per cent. For hon. Members that was the first announcement of the Government's policy to increase new town rents by 22 per cent.
After that press statement, I had an urgent meeting with local councillors for the new town areas. We demanded a meeting with the board members of Irvine development corporation and with the chief officials. That meeting was held on Friday afternoon. I am therefore not prepared to vote in favour of the clause unless we are given certain assurances. We met Eric Dale, one of the senior members 225 of the board and Tony Rickets, the managing director, as well as officials from the finance and housing departments. We asked them to explain what Irvine development corporation would do about the recommendations to increase rents in Scotland by 22 per cent. He told us that the board on 19 January decided that because of economic conditions it could not impose a 22 per cent. increase in rents. By a majority, the board decided to increase rents by 12 per cent., which represented the average inflation rate. Some members of the board wanted rents to be increased only by the Government norm for wage increases—4 per cent—but the majority agreed that rent increases should be 12 per cent rather than 22 per cent., as suggested by the Secretary of State.
When that decision was reported to the Secretary of State he called urban development corporation officials to Edinburgh to explain why they had not carried out his policy. Mr. Tony Rickets and other officials said that the corporation could not increase rents above the 12 per cent. inflation rate. They took that decision on the basis of the poverty in Irvine new town, which has an unemployment rate of 24.7 per cent. One cannot expect people there to pay 22 per cent. rent increases.
To give an idea of the poverty in Irvine new town, I have only to explain that 55 per cent. of IDC tenants receive rent rebates or help with rents through social security. About 75 per cent. of tenants are below the poverty line and therefore receive help either through rent rebates or rent allowances.
Hon. Members who represent English constituencies cannot understand the poverty experienced in Scotland, especially in Irvine new town. The right hon. Member for Down, South (Mr. Powell) often speaks of the poverty level in Northern Ireland. It is nothing compared with that which is experienced in certain areas of Scotland. That is why the Irvine development corporation appealed to officials of the Scottish economic planning department to increase rents by only 12 per cent. They were told that the Secretary of State had powers to apply his directive under the legislation. They were told that the Secretary of State would invoke sanctions on capital and other expenditure. That is why I am raising the matter tonight.
If the Secretary of State has powers to impose sanctions on capital and other expenditure, why do we need the extra £1,000 million? If the local development corporation is not allowed to spend its money as it wishes and is not allowed to get income from various activities in the way that it wants, there is no need for the extra £1,000 million.
Dire consequences have been threatened if the directive is not adhered to. The Secretary of State for Scotland has taken dictatorial powers. Scottish local authorities have fewer powers than Polish local authorities under a military dictatorship. I wish that President Reagan would organise a television spectacular on Scotland instead of wasting his money on Poland. If ever we needed a television spectacular to point out the Secretary of State's powers, it is now.
Therefore, I ask the Under-Secretary of State to assure me that he will intercede and tell the Secretary of State for Scotland that he must meet the hon. Member for Central Ayrshire and local councillors of Irvine new town as 226 quickly as possible so that they may make direct representations to him to change his policy, to rescind the 22 per cent. rent increase which has been imposed on the tenants and to allow the Irvine development corporation to fix rent levels that it feels are suitable for the area.
I ask the Under-Secretary not only to intercede with the Secretary of State for Scotland to arrange a meeting as quickly as possible—because the rent notices are to go out soon—but to explain why the Government need an extra £1,000 million in borrowing limits when they will not allow the local authorities to spend that money, most of which they will get from the tenants.
I have never supported the Government's policy on the sale of council or new town houses, but if these rent increases are to be imposed on public sector housing in Scotland I shall change my view. I suggest that, instead of selling council and new town corporation houses in Scotland, the Government should give them to the tenants. People cannot afford to pay rent increases year in, year out. The Government should give the houses to the tenants for nothing. The Government will not then need the extra £1,000 million for which they are asking tonight.
I hope that Conservative Members—especially the diehard Tories, some of whom are present—will support me on this matter. Instead of selling the assets, we should give them to the tenants. We should not go on imposing ever-increasing rent burdens on tenants.
I want an assurance that the Secretary of State for Scotland will meet me and local councillors from Irvine new town as a matter of urgency to discuss the 22 per cent. rent increase.
§ Mr. Michael McGuire (Ince)
I am pleased to follow my hon. Friend the Member for Central Ayrshire (Mr. Lambie), because he said what I would have said on Second Reading if I had been able to take part. Unfortunately, I was ill and could not be here. My hon. Friend did not join the mutual admiration society which apparently was in operation during the Second Reading debate. Almost all who took part in the debate paid tribute to the wisdom of setting up the new towns. Hon. Members almost vied with each other to eulogise the idea of the Labour Government.
I represent Skelmersdale new town. My hon. Friend the Member for Central Ayrshire said that Irvine new town was a disaster. I do not suggest that Skelmersdale is a disaster, but it has suffered many serious body blows. For statistical reasons, male unemployment figures for Skelmersdale are amalgamated with those for the much older and more stable town of Ormskirk. My hon. Friend the Member for Ormskirk (Mr. Kilroy-Silk) often asks questions about unemployment in his constituency. Because Ormskirk is merged with Skelmersdale, the figure is diluted. That helps my hon. Friend, because in Ormskirk it is inflated, whereas in Skelmersdale it is diluted. The best estimate that we have for male unemployment is broadly similar to the 29 per cent. that my hon. Friend mentioned for Irvine, so I should not have joined that mutual admiration society.
In this debate, which is essentially about money, I do not want to give too many hostages to fortune and say that the money resource that was used to develop Skelmersdale new town might have been better used if Skelmersdale had not been developed as a new town. One of the prime intentions was to resuscitate Liverpool. Liverpool has 227 suffered because four new towns have sucked the lifeblood out of it, and we are now paying the price for that. Money and the resources could have been used to help St. Helens, my home town, which could have absorbed 10,000 or 15.000 people from the Liverpool area. Those people could have moved to a settled community. There would have been no need to spend money on developing shopping centres, and the like.
The same is true of Wigan, which I do not have the honour to represent, although much of my constituency surrounds it. Wigan, like St. Helens, could have been asked to absorb 10,000 or 15,000 people from the Liverpool area. Again, those people would have moved to a settled community, and again money need not have been spent on what I call new town shopping facilities, and so on. Those old towns, which had problems of social and industrial dereliction, could have been helped to overcome those problems. That would have been a wiser proposition—albeit with the benefit of hindsight.
However, we have Skelmersdale. The grand design of any new town means—and should mean—that certain facilities are built in. Education springs naturally to mind. I join the hon. Member for The Wrekin (Mr Hawksley), who asked the Minister how much of the money allocated in the Bill would provide better hospital facilities in his new town of Telford. I ask the same question about Skelmersdale. The grand design cannot be completed if there is no provision for a hospital, albeit one that is scaled down from the hospital that was originally planned. That would assuage the feelings of the people there that the Government have abandoned them to their fate.
Expectations are raised when a new town is created. We tell the people there that everything will be brand new—roads, shops, schools, and so on. I do not blame this Government or the Labour Government. We are too fond of saying that everything is the Government's fault. The two massive closures at Courtaulds and the Thorn colour tube plant took place during the period of the Labour Government. We debated those closures in the House, and I had sympathy from all sides. About 3,500 jobs were lost.
One cannot easily say that that was the Government's fault. It happened. I wanted the Government to take some action, but they could not take it. The jobs went and the people felt that they are abandoned. We raise expectations when we build new towns, and people who go there think that they are gong to new industries that will last for ever.
Order. We are now getting on to the merits of new towns. This clause is concerned only with money. The hon. Gentleman is correct to argue about whether that money should go to his new town, but he must not dwell on the merits of new towns.
§ Mr. McGuire
I apologise for straining your good temper, Mr. Weatherill.
We lack jobs in Skelmersdale. It is not easy for any Government to provide jobs. However, it is easy for the Government to take the initiative to provide us with a hospital. I wish to know how much of the money allocated will go towards that purpose. The hon. Member for The Wrekin also wished to know that. It will help not only by providing jobs, but by providing a better medical service, which the very name of a new town implies.
The grand design remains unfulfilled in many respects. It would at least assuage the feeling of the residents that 228 they have been abandoned by an uncaring Government. I wish the Government to say that they will provide the hospital facility, although it may be scaled down from the plan of a few years ago. The latest date given for construction of a hospital was 1981–82, but we are a long way from that.
The Under-Secretary of State is reported in the Official Report as saying that in Skelmersdale a remarkable 25 per cent. of people own their houses or are buying them. It stands out as the high point of any of the established new towns. It must certainly be the highest of the third generation towns.
There is a lesson to be learnt from the use of the money that we are discussing tonight, which I hope will go a little way towards remedying the defects of Skelmersdale. Those houses that have been bought—the high proportion to which the Minister referred—were abandoned and derelict because people did not find them desirable. The cancer was spreading. The population of Skelmersdale should be about 85,000, but we have been stuck around the 40,000 mark for some years because jobs have disappeared and people are not coming to live in the town. The houses became empty and we could not get tenants for them.
What happened there has happened in other areas. If one does not board the windows up after a tenant leaves, they are smashed, or people break into the houses and vandalise them. The houses became an eyesore. When decent people who lived nearby saw that the houses were being left empty they also wished to move, because they saw the cancer spreading. That is when the policy of selling the houses cheaply started. I welcomed the initiative, because I believed that nothing else could be done.
§ Mr. McGuire
They were nearly given away, because they were sold at such low prices. However, they were sold because they were not a commercial proposition. The people who bought the houses needed much do-it-yourself ability and initiative to restore them. They have made most of them into grand houses. However, because of the Government's change of policy since the scheme to sell houses in new towns was started, many people have bought at very inflated prices. A larger subsidy has been given and the new town corporation has been told, on the Minister's directive, to relax the conditions governing sale.
I have written to the development corporation and I have been told that it is trying to persuade the Government to help the new town by releasing people from commitments that they entered into that have led them to feel gravely disadvantaged. They know that some of their neighbours who bought a few months later have received much greater subsidies because of a change in Government policy. I do not think that any of us would like to have that done to us. The Minister could say to the corporation "The change in policy has had a bad effect on some. We did not want that to happen. We did not think things through. We shall try to put those who have been disadvantaged on a par with the others."
I hope that the Minister will help the corporation to implement a change in policy. In doing so he will give succour to those who feel that they have been badly done by. If the money that we allocate tonight will be used for 229 that purpose among others, I shall welcome the Bill. I hope that I shall get a favourable response from the Minister. In my bones I can almost feel him preparing to give me the answer that I want to hear.
§ Mr. Dewar
This is a narrow debate and I do not intend to stray any further than any other hon. Member during my brief remarks. It has been a useful debate. We have even had one contribution from the Conservative Back Benches, which showed a degree of courage at this time of night. We shall conclude our discussion fairly shortly. There is no intention on the Opposition Benches of unnaturally or unnecessarily prolonging the proceedings. I shall comment briefly on Scottish aspects of the debate.
We have heard contributions from my hon. Friends the Members for Central Ayrshire (Mr. Lambie) and Dunbartonshire, East (Mr. Hogg). There are five new towns in Scotland and they are a significant percentage of the new towns in Britain. The Scottish new towns have a considerably longer life expectancy than many of those in England. My hon. Friend the Member for Easington (Mr. Dormand) said that in the consultative document the Government stated that they did not anticipate that any Scottish new town would be wound up before the end of the 1980s. They will be with us for considerably longer than the Government, but they will be influenced in their development and in the pace of development by the money that is available, especially the substantial sums that are mentioned in the clause.
On Second Reading we did not have the benefit of the presence of a Scottish Office Minister, but tonight we have with us the Under-Secretary of State for Scotland, the hon. Member for Edinburgh, North (Mr. Fletcher), who sits mute on the Government Front Bench, to remind us that we have Scottish Ministers. I have received a letter from the Under-Secretary of State for the Environment which deals with a number of the financial issues that were raised on Second Reading. The hon. Gentleman promptly honoured the promise that he made at that stage. I am glad that the Under-Secretary for Scotland is present because there has been some criticism recently of the absence of Scottish Ministers, especially on Monday night when we had an important debate on nuclear power.
Money is fundamental, and we must know exactly what is meant by the increase in the borrowing limit and the extent to which that will influence the five Scottish new towns. There is a great deal of anxiety about the situation in the new towns. I have some sympathy with the point made by my hon. Friend the Member for Ince (Mr. McGuire)—that, on occasions, there is an atmosphere of complacency as we address ourselves to this problem. The Minister wrote to me on 2 February 1982 about the success of the new towns and said:I think that Norman Hogg and David Lambie were perhaps unduly influenced by the immediate situations in Cumbemauld and Irvine in what they said in that debate.They probably were greatly influenced by the situation. My hon. Friend the Member for Central Ayshire is right in saying that the extra money that the clause represents could be of vital importance in combating an unemployment rate of 24.7 per cent. which is appalling in a new town which the Minister referred to as a success and complains that the unfortunate hon. Members have beenperhaps unduly influenced by the immediate situations".230 How I wish that "immediate" meant short term. With the Government's economic policies, we fear that that will not be so. What we want to know from the UnderSecretary—who once again has the unfortunate task of acting as the mouthpiece of the Scottish Office—is exactly how much extras finance will be made available to Irvine new town to counteract the appallingly serious situation that has developed in its employment prospects.
In the same letter, the Minister hopefully said:in the last 14 months over 3,650 new jobs, mainly from overseas companies, have been announced by firms setting up or expanding in the Scottish new towns.That may be so, but the deafening lack of information relates to the number of jobs which in the same 14 months have been lost, to offset probably many times over the 3,650 jobs to which the Minister rather superficially referred.
It is important when we consider the money invested in new towns to consider the impact that the additional borrowing requirement will have. Considering a slightly earlier period, in reply to a written question from my hon. Friend the Member for Dunbartonshire, East—who has displayed a close and continuous interest in these matters for some time—the Under-Secretary stated:For the year ended 31 March 1981, 12,788 jobs were lost and only 4,933 were created."—[Official Report, 11 November 1981; Vol. 12, c. 97.]In the nine months since, I suspect that the picture has not greatly changed and, although I would not say it borders on the dishonest—that would be too harsh a charge—the Minister, when referring to the job creation figures, was giving us an incomplete picture in a way that he knows must be misleading.
The Minister was good enough to quote my remark on Second Reading that we could not insulate the new towns from the economic blizzard that is blowing. That may be so, and I accept that there is no magic formula which will make the new towns immune from the economic disease affecting Scotland as a whole.
However, that is not an excuse for complacency or for the Minister to say "Because we cannot insulate, we can do nothing". We ought to be doing a great deal more and I am not satisfied by the tone of the paragraph from the letter I have quoted, nor indeed the general remarks made by the Minister in the past few months. I am certainly less than satisfied by his actions that the Government are doing everything they can to help the new towns and the rest of Scotland, particularly Cumbernauld and Irvine.
When the Under-Secretary replies, I hope that he will give us some indication that he will be prodding the Scottish Office Ministers into renewed activity to deal with these severe and difficult problems.
I turn comparatively briefly to one or two technical points about the allocation of the money. I say unashamedly that I am not an expert in the allocation mechanisms of public expenditure. Therefore, I read with particular interest the remarks of the Under-Secretary, or of the civil servants who composed the letter. In any event, it is signed in the hon. Gentleman's name and raises some aspects that we should ruminate on at this stage.
I accept that in the past Scotland had a fair share of the borrowing of the money available under the borrowing requirement. I am told that Scotland normally receives between 11 per cent. and 14 per cent. of the total new towns' borrowing in any given year. It was £49 million out 231 of £440 million in 1980–81 and £52 million out of £381 million in 1981–82. I have no great quarrel with that. Scotland has been borrowing money, not receiving it. We all often make the mistake of thinking that the Government are giving the new towns that money, but they are merely giving them permission to go to the money market to raise the cash and pay the interest on it. The Scottish towns have been receiving a fair percentage of the new towns' borrowing.
The Minister is involved in the intricacies of the system and will be able to give a short answer. I should like to know how the Scottish figure is separated from the United Kingdom total. The hon. Member for Edinburgh, North goes on to say in his letter:In any case the proportion"—that is the Scottish proportion of the money we propose to vote in the clause—
is not determined by a directly related share out of resources among the English, Welsh and Scottish new towns; the Scottish new towns' borrowing requirement is a consequence of the share of resources which the Secretary of State decides should be made available for the new towns from within the Scottish block".That is a little ambiguous, but I take it to mean that the Scottish Office block is the overall budget that the Secretary of State has under his control in Scotland and within which he can do a good deal of switching. Much flexibility is built in between specific spending programmes.
The picture that emerges for me, of which I should like confirmation, is that the Minister is saying that there is no attempt to take the cumulative figure for a specific year—£4,000 million or whatever it may be—and the tranche that will be borrowed in that year, and divide it in the 85:10:5 ratio, the updated Goshen quotient with which we in Scottish politics are familiar.
The Secretary of State for Scotland looks at his total budget and presumably the area that will be devoted to housing investment and resources and says that out of that he will carve a capital sum which will be allocated to the new towns and which they will be allowed to borrow from the national loans fund or from the market. I understand that; it is clear and comprehensible. However, I should like to know whether there is any control on the discretion of the Secretary of State in deciding what he will allocate to new towns.
The more the Secretary of State allocates in Scotland, and if the discretion is left entirely with him, the greater will be the impact on the total United Kingdom figure that we are told is not allocated in any sense on a Scottish, English, Welsh or any other geographical basis. If there were a Secretary of State for Scotland who gave high priority to housing or who had a special vested interest in new towns—for example, my hon. Friend the Member for Dunbartonshire, East, if he became Secretary of State in a future Labour Administration, which is not impossible—and he drastically increased the borrowing requirement available to the Scottish new towns, that would have a great impact, perhaps a distorting impact, on the margin on the borrowing requirement in the Bill.
I should like more information on how the two processes—the decision on the United Kingdom total which we are discussing now, and the impact of the quarrying out of a Scottish sub-total, which is entirely within the discretion of the Secretary of State—are correlated and intermeshed in the mysterious intricacies of the Whitehall machinery. I hope that the Minister will say a word or two about that.
232 As the Committee will have gathered, there is a good deal of anxiety in Scotland, not just about the total investment in new towns and what the Government allow, but about some of the other ways in which money is raised for new towns, which affects what their borrowing requirement will be and the necessity for the limit.
We are all familar with the considerable anger justifiably generated by my hon. Friend the Member for Central Ayrshire, and I know that it is shared by my hon. Friend the Member for Dunbartonshire, East. One way in which we can spare the borrowing requirement and thus take the strain off the total moneys allocated under the clause is to increase revenue from rents. I shall not go into that at length, save to say that I entirely share the concern of hon. Members representing new towns when I discover that the Government are dictating to the new town corporations in this matter. There is no apology about it. There is not the shabby pretence which exists in the wider sphere of local government that an element of discretion is left to local government in these matters. It is pure dictation. The corporations are expected to produce rents between £1.90 and £2.10 per week higher in the current financial year than in the previous year.
The Under-Secretary of State for Scotland says in his letter that this figure
is slightly below the figure sought from local authorities".That may be so, but it is cold comfort, especially when it comes on top of the substantial increase forced upon the new towns the previous year. New town rents are considerably higher than local authority rents in Scotland as a whole and this is therefore extremely unfortunate. Even if it is in an effort to cut the public sector borrowing requirement and to ensure that the money or rather the borrowing requirement provided by the clause lasts a little longer, it is getting close to the point at which social justice should call a halt even to the rapacious interests of this collection of Ministers in wringing from the electorate the highest possible rent income.
A final point of some substance relates to the disposal of assets, which again affects the strain that will be put upon the total figure that new towns will be able to borrow under the clause. As my hon. Friend the Member for Easington and others have made clear, there is no doubt that the more money that is raised by the sale of assets, the less presumably will have to be borrowed on the open market and the less the necessity for this increase in borrowing limits.
Until recently, because I had not been deeply involved in new towns, I was under the impression that very little effort had been made to force the disposal of assets in this context. I was aware that there was a major dispute in England, but in Scotland it has been rather more under cover and perhaps less of a public issue. Again, I am grateful to the Under-Secretary of State for Scotland for giving me some facts and figures in his extremely useful letter, in which he tells me thatover the three financial years 1979–80, 1980–81, and 1981–82 £21.1 million will have been raised by the sale of industrial and commercial assets".I should say in defence of the Government, because I want to be fair, that the letter continues by saying thatalmost £20 million has been used immediately to finance Further development".It is, as it were, a recycling process in which money is raised on the finished product and then reinvested in further development. Although I dislike the whole system, 233 I realise that, if it is to be operated at all, it is useful for reinvestment to be made directly in the new towns so that to that extent we see some benefits.
Perhaps the Minister will briefly answer one or two questions on this. First, will the pace of asset-stripping in Scotland be maintained? [Interruption.] The Minister seems to feel that "asset stripping" is a pejorative term. It is merely a useful shorthand term, although it has the advantage of at least provoking a reaction from the Scottish Office which I believe is sufficient justification for its use.
§ Mr. Dewar
My hon. Friend suggests the term "flogging off' as an alternative. In any event, £21.1 million has been raised in this way over the past three years. Does the Minister expect the alienation of assets in Scottish new towns to continue at that sort of pace and level? Equally as important, I wish to know whether the level of reinvestment will be the same. As the Scottish Office Minister has been able to give precise reinvestment figures in Scotland, I see no reason why figures should not be available south of the border.
§ Mr. Alexander Fletcher
I cannot believe that the hon. Gentleman does not know the difference between selling and reinvesting in the institution, in this case the new towns, and selling and hiving off the proceeds of the sale elsewhere, which is asset stripping. As the hon. Gentleman said correctly at the start of his remarks, the funds realised from the sale of assets are reinvested in the new towns. The hon. Gentleman should withdraw the charge of asset stripping: it is wholly inaccurate.
§ Mr. Dewar
I am not convinced by what the hon. Gentleman says. The Minister protests too much. If he had stated that the principal reason for the sale of the assets was to reinvest, I would disagree with the policy but accord it some sympathy. I suspect that the hon. Gentleman is trying to save his face with the Treasury in terms of reducing the public sector borrowing requirement and the level of public expenditure. I do not believe, at this time and in present circumstances, that a directive to new towns to sell assets makes economic sense.
In the initial stages, it may be possible to dispose of some items without great loss or public inconvenience. I fear, however, that as the policy is pursued, as the Government, I suspect, will say must happen, we shall find ourselves in a bad market at a bad time selling assets and capital that could be handsomely used by the public and appreciate in value. I dislike the element of expediency that appears to dictate the Government's policy. The Minister, in his letter, says thatthere has been no evidence of a kind of disagreement which you attempted to read into the passages from the Annual Reports".I believe that that was a reference to the East Kilbride report and its references to the selling of assets in that new town.
There has been a great deal of private disquiet. If the Minister insists on expanding the policy, he will encounter much disagreement in the years ahead. My fear is that the extra room provided in the clause for allowing borrowing consent to individual new towns will not be sufficient to have an impact on the problems facing the new towns.
Figures for early 1981—they are older than I would have liked—show that planned provision for gross capital 234 expenditure on housing by new towns in Scotland amounted to £76 million in 1977–78 and £36 million in 1981–82 at constant prices. Public investment in new towns, especially housing, shows, I believe, an overall pattern of decline, less steep perhaps in some areas than others, during this Government's period in office. It is an extremely serious situation. The Government's slogan formerly was "Invest in success." I recall the days when Conservatives talked about growth points in another context. Some hon. Members may have had grave reservations about the effects of growth point policy in general industrial terms.
The new towns were seen as success centres. However, in the climate created by the Government, they are not self-perpetuating. They cannot maintain momentum. They need help. The financial support likely to be available under clause 1 does not convince me that the impetus, vision and enthusiasm required to support the new towns exists among Scottish Office Ministers. I pass no judgment on their English counterparts. I have heartfelt sympathy for the points made by hon. Members about unemployment levels in Irvine and the difficulties faced in other new towns. There has been a steady loss of confidence, a steady draining of jobs, from the new town concept, which was right and which should and can have a future if Ministers are prepared to put their backs into supporting it.
§ The Under-Secretary of State for the Environment (Sir George Young)
In trying to deal with some of the points raised in over two hours of debate I shall start with the hon. Member for Edmonton (Mr. Graham), who seemed to get a second wind over the weekend after his 27-minute speech on the subject on 26 January. It would be a discourtesy to last week's speech if I said that there was much in his speech tonight that called for additional comment. However, perhaps I might re-emphasise one or two points. We are investing more in the new towns than we are receiving from the sales. That is why the Bill is needed. We are increasing the resources available.
The hon. Gentleman spoke about our policy to try to redress the imbalance in the new towns. The majority of the town centres and industrial estates were built not with taxpayers' money but with private institutional funds. The new towns are to that extent the exception; they have been built with taxpayers' money. Our policy is to return the new towns to the normality that exists everywhere else. That is what we mean by trying to achieve a proper balance.
§ Mr. Graham
As town centres in places that are not new towns are perhaps the products of 200 or 300 years, is it not unreasonable to try to achieve a balance, or return to normality, in new towns in such a tight time scale as five or 10 years.?
§ Sir George Young
I do not accept the hon. Gentleman's premise. In my own constituency the Ealing town centre is being rebuilt by private development funds, so I do not accept that new towns are unique in that respect.
The hon. Gentleman suggested that the fact that some people were unable to buy was a justification for continuing to build for rent. What my hon. Friends have been trying to do is to introduce policies that make it 235 possible for people who previously could not buy to afford their own homes. That is why we have been concentrating a whole range of initiatives on low-cost home ownership, which we think is a more realistic solution to the housing problems facing the income group to which the hon. Gentleman referred. Housing completions in the new towns in 1978–79 were 9,920. In 1981–82 they will be 13,160—a substantial increase, due mainly to the increase in the number of private housing completions.
The hon. Member for Dunbartonshire, East (Mr. Hogg) spoke about accountability and his campaign to open up the meetings of the development corporations to the press. The matter has been the subject of considerable discussion in the House. Ministers responsible for the new towns in Scotland as well as in England have made it clear that, largely because of the importance of maintaining commercial confidentiality, we do not think that it would be right for us to direct the corporations to open their meetings to the press and the public. However, because we recognise the importance of keeping people well informed, the development corporations in Scotland have, at the request of my right hon. Friend the Secretary of State for Scotland, taken measures to develop regular and frequent contacts with the press and to improve the presentation of their activities to the public. The position remains exactly as it was when the Labour Government were in power before the last general election.
The hon. Gentleman asked what the money would be made available for. The answer is that it will be made available, certainly in Scotland, for developing the industrial infrastructure in new towns, with the main objective of attracting new jobs into the areas.
Contrary to what the hon. Member for Easington (Mr. Dormand) said, the Government rejoice in the success of the new towns, but we believe that they will be even more successful if the inhabitants can own their own homes, if the resources of private industry are harnessed in the development of new towns, and if the development land which the public sector does not have the resources to build on at present can be developed by the private sector.
I had a friendly reception from the councillors of the Easington district council when I visited the hon. Gentleman's constituency. I find the councillors in the North-East far easier to deal with than the Labour councillors in London. I spent three-quarters of an hour in formal discussion with them and also had lunch with them. Officials from the district council were available when I visited the properties. I await the National Building Council's report on the properties. I am not a builder. I do not have the slightest idea what is wrong with them, but clearly the condition is serious. I cannot in any way prejudge the outcome of the independent survey.
The hon. Gentleman asked whether I could say by how much the HIP allocation had been increased to take account of the problems facing the district council. Ministers do not break down HIP allocations in this way. A block sum of money is available to the local authority. It is for the local authority to spend it in the way that it thinks best.
I confirm that interest on debt is payable even if the buildings are demolished. A parallel with the private sector is that one would have to continue paying the hire purchase on one's car even if one had written it off.
§ Mr. Graham
The Minister tells us that within the HIP allocation there is a portion earmarked for section 10 236 renewals. His predecessor said more than once that an allowance is made. More than one development corporation and new town have been told that there is an inbuilt figure, so the figure must be somewhere. The hon. Gentleman says that Ministers do not break the figure down, but he asks us to believe that there is a portion contained within it, so why can we not be told what it is? We should then know precisely how much it is reasonable to spend on putting right section 10 properties.
§ Sir George Young
Our policy on this is exactly the same as that of the Government of whom the hon. Gentleman was a member. In making the HIP allocation to the authority we have borne in mind the problems created by the defects in the Peterlee new town houses which have been transferred to Easington. We have taken a large number of other factors into account. We are not in the business of breaking down component factors and announcing them to Easington council.
The reason why wind-up dates are different in Scotland is that the maturity of the new towns in Scotland is different. They were set up later, and, as a result, they will be wound up later.
I was impressed in Easington by the partnership between the development corporation and the local authority. I was also impressed by the determination of all the bodies to get more jobs into the area.
I tell my hon.Friend the Member for The Wrekin (Mr. Hawksley) that the money for hospitals does not come from the provision in the Bill. As I believe he knows, the health facilities are provided by the DHSS. The allocation of resources within the National Health Service is a matter for my right hon. and hon. Friends in the DHSS. I shall take the matter up with the Minister for Health and get an answer for my hon. Friend on the pressing constituency health problems that he raised.
The hon. Member for Central Ayrshire (Mr. Lambie) asked how much money there would be for Irvine. The Bill increases the borrowing limits for all the new town corporations. The actual allocation of money to individual corporations is a separate procedure. In Scotland it is the responsibility of the Secretary of State for Scotland, who within his block allocation allocates funds to the separate new town corporations.
The hon. Gentleman asked whether any conditions were attached. In practice the development corporations pass on the rent increases that the Secretary of State announces. The procedure is exactly as it has been under past Administrations.
§ Mr. Lambie
The Minister should know that on previous occasions the rent increases imposed in Irvine were the lowest in Scotland, because of economic conditions and because Irvine was the newest of the new towns. This time the rent increases were the same as in all the other new towns in Scotland. There is a tremendous difference this time compared with other years.
§ Sir George Young
From the figures that I have in front of me I see that rents in Cumbernauld are slightly higher than those in Irvine. The best thing that I can do is to ask my hon. Friend the Under-Secretary of State for Scotland, who wrote such an excellent letter after the Scottish interventions last week, to write another excellent letter to Scottish Members who have intervened in this debate.
237 I am accused of being the mouthpiece of the Secretary of State for Scotland. My name is not dissimilar to his. Owing to a mistake by the telephone exchange at No. 10 shortly after the general election, I nearly was the Secretary of State for Scotland.
The hon. Member for Ince (Mr. McGuire) made a thoughtful and balanced contribution to the debate. I welcome his support for what we did in Skelmersdale to bring the properties into sensible use. I see enormous difficulties in trying to tackle the problem of those who bought their properties at a discount which was subsequently increased when we came to power. If we tried retrospectively to apply the more generous discounts introduced in the Housing Act 1980 we should open a can of worms. I do not see where it would stop. I shall raise with the Minister for Health the question of resource allocations for the hospital in the hon. Gentleman's contituency.
The hon. Member for Glasgow, Garscadden (Mr. Dewar) asked how the Scottish figure was allocated within the Great Britain figure. The Scottish new town resources are allocated from the total Scottish Office block, as he said. The Scottish borrowing is aggregated with the English borrowing only for the purpose of the Bill and for the statutory limit. The Secretary of State for Scotland is accountable for the money spent on the new town programme.
It is our policy to dispose of the assets. We shall pursue that policy for as long as we can. Once the houses, factories and shops have been built, we do not see why the corporations should hang on to them. It makes sense for them to get the cash by selling the assets and to recycle it by further development either within that corporation or another corporation.
The disposal figures for Great Britain were given in column 800 of last week's debate. For England alone, from 1979–80 to 1981–82, total gross investment was £887 million. Of that, £370 million was from capital receipts from the sale of assets. The rest—£517 million—was from borrowing.
I have tried to deal with the main points raised in the debate. I hope that the Committee can now agree that clause 1 should stand part of the Bill.
§ Question put and agreed to.
§ Clause I ordered to stand part of the Bill.
§ Clause 2 ordered to stand part of the Bill.
§ Bill reported, without amendment.
§ Motion made, and Question proposed, That the Bill be now read the Third time.—[Sir George Young.]12.28 am
§ Mr. Proctor
I supported the Bill on Second Reading last week and I do so again tonight. I am delighted that we debated the Bill in Committee and are now debating it on Third Reading, thanks in large measure to my hon. Friends, who take a substantial interest in new town affairs. It is noticeable that on Second Reading, in Committee and on Third Reading no Liberal or Social Democrat has been present. Our constituents should be aware of this lack of attention to their affairs and to those of new towns.
Perhaps unanimous agreement will now end, because I want to make three brief points about housing, unemployment and borrowing. I shall not weary the House 238 again with the sucess story of the Government's right-tobuy provisions in Basildon and the large number of my constituents who have taken up that right.
The hon. Member for Edmonton (Mr.Graham)—up-todate as usual—quoted figures for the Basildon housing waiting list that were 12 months out of date. He referred to a figure of more than 3,000. In a brief intervention I tried to set that figure in context, and perhaps I can now do so in more detail.
That figure of 3,316 as at 31 December 1981 is divided between the district council and the development corporation. It is not entirely related to the new town of Basildon, because it includes those waiting in other parts of my constituency in Billericay and Wickford.
If one looks at the global figure of 3,000 and breaks it down, one finds that there are 1,487 applicants in the single person's category, 102 in the family category and 1,727 provisional applications, such as those from engaged couples or people with a common law relationship. The number of provisional applications also includes outstanding inquiries.
It is true that there is a high fall-out of applicants from the single persons' waiting list. The take-up rate is certainly lower in the other two catgories. A portion of the 102 family applicants move from the waiting list into the private sector. I shall not weary the House with Basildon's success story of build-for-sale and starter home projects, save to say that that takes the pressure off that part of the waiting list. Similarly, some of the relationships covered by the third category do not move forward to become an actual demand on the housing resources in Basildon. If anything, although the waiting list in my constituency is stable, it has been edging downwards over the last year.
In volume 1, paragraph 56 of its second report, the Select Committee on the Environment said that waiting listsare not per se a good indicator of real housing need".As I said on Second Reading, wherever there is a subsidised commodity, including council or development corporation homes, there will at the same time, by the very nature of supply and demand, also be a waiting list. There will always be a waiting list for council and development corporation housing if it is not priced at the market rate.
§ Mr. Anthony Steen (Liverpool, Wavertree)
My hon. Friend makes an interesting point. As I said on Second Reading, in Liverpool 2,400 units of accommodation are vacant. That is disastrous, because the people on the waiting list never get a chance to move into those houses. It is probably true that lists all over the country are distorted. That is particularly true of new towns. Is it true of Basildon.
§ Mr. Proctor
My hon. Friend has made an interesting point, which I understand. He refers to housing units that are empty for some time and for several different reasons. Some care must be taken about empty units. There are several reasons why they may be empty. I happen to have the figures for Basildon with me, and I shall give them. On 21 January 1982, the development corporation had 446 units. Of those, 34 have been accepted for tenancy as from 1 February and 158 are out of use for routine maintenance and inspections. However, 157 of the units are ready for letting. In addition, some units have burst pipes as a result of recent weather conditions. Substantial work must be done on 97, and they will be out of use for longer.
239 To put housing in context, the number of empty units must be set beside the number on the waiting list and an analysis of that list. I support the Government's policy of trying to achieve a better balance of housing within new towns. A Conservative Administration are rightly achieving that.
On listening to the debate in Committee one would have thought that the Labour Party had a monopoly of concern about unemployment. That is not true. I am worried about the high level of unemployment in my constituency, but I know that it did not begin in May 1979. An article on unemployment in the South that appeared in The Sunday Times is relevant to the debate and to my constituency. It said:Future jobs are likely to be in commerce and distribution—and here there is optimism. In spite of the recession and because it is a new town close to London, Basildon is the centre for a mini development boom that will see approximately £250 million spent on commercial, industrial and housing projects. The town centre shopping precinct, which will be the biggest covered shopping area in Europe, will eventually employ around 16,000 people. In the next 18 months a £50 million complex of shops and offices will be built, creating around 1,600 permanent jobs. The Distillers Company is building a £45 million bottling plant that will employ 600 people. Plans are in hand for a new industrial estate that could create another 4,000 jobs".That is taken from not a Conservative Party handout, but from an article that appeared in The Sunday Times on 31 January 1982. It reaffirms a point that I made last week about private money and enterprise in the new towns. It underlines the success story of new towns.
My final point relates to the correlation between private and public money. I see why the State should lubricate new towns to attract—after the infrastructure—private funding. On Second Reading I raised a point which I probably did not make sufficiently clear. I refer to the short-term borrowings of development corporations.
My hon. Friend the Minister thought that I was referring to Basildon development corporation's overdraft limit. That was not the point. I was asking about short-term borrowing for roll-over projects. For example, a few years ago there was a possibility the development corporation could borrow £5 million for investment. However, it was forbidden to do that because of Treasury control. That would have provided funds for industrial factories in my constituency. Can the Minister be more sympathetic to that approach to industrial development by private funding by providing some bridging finance on a small scale for new town corporations that need it—in particular Basildon, which has raised the matter with me? I welcome the Bill.
§ Mr. Murphy
Before the Bill receives its Third Reading, it is right to reconsider the overall structure in relation to the completion of the new towns for which the finance will be used.
I represent two first generation new towns. There are clear lessons to be learnt from their experience for the second and third generation developments. The older new towns—if that is not a contradiction in terms—basically were established around London to reduce population pressure in the centre of the capital and to encourage industry to move out in accordance with Government policies. Subsequent new towns are being created with Government finance, for a wide variety of reasons—to 240 develop an already established locality, to provide housing for an existing industrial estate, to form the focus of a community and to produce employment.
The new towns that will benefit from the finance measure came into being following the Scott and Uthwatt reports and the closely linked trio of the Town and Country Planning Act 1947, the location of industry measure and the New Towns Act. I have no doubt that they represented a political conception of building on State-owned land by energetic and, on the whole, highly skilled professional teams which were not bound by the restraints of public consultation and participation.
The lessons that need to be learnt to ensure a good return on the finance are these: housing—far too much rented accommodation is being built; industry—insufficient jobs are being created latterly to match the level of housing; infrastructure—its provision is often lagging behind the house building programme; and land—excessive amounts are being held for anticipated future needs. Essentially, it is a case of too much public sector involvement and too little opportunity for private enterprise.
The finance provided by the Bill should be used to ensure that the existing new towns can be completed as quickly as possible to a realistic level. But it is highly commendable that the Government have already announced the date for winding up a number of development corporations which will curtail any further unnecessary expansion at the taxpayers expense. Only natural growth should then continue, and the new towns should be fully consulted about what aspects of their community should be completed by the wind-up dates.
At the same time, the process for the transfer of assets should be given high priority, both because of the advantages gained by the town in terms of normalisation and by the redressing of the balance in favour of private ownership, and because of the finance accruing to the Treasury in return for past investment by the taxpayer. In addition, the removal of extraneous bureaucracy such as the Commission for the New Towns can only be good for the new towns.
A further and even more fundamental lesson to bear in mind when assessing the finance measure is redressing the other great imbalance—that between town and countryside. Destroying valuable countryside. be it agricultural land or areas of natural beauty, has rightly concerned many people. The Government have given serious consideration to it.
The approach that has been adopted has correctly necessitated ever greater attention being paid to the green belt, which is now a vital component of our planning policies, but already far too much countryside has fallen victim to the swathes of concrete which turn us so easily into a grey and unpleasant land. Families—particularly those in the Home Counties—want to live on the outskirts of the metropolis, not on its inskirts.
§ Mr. Steen
Is my hon. Friend aware that Dr. Alice Coleman, in her second land utilisation study, estimated that no fewer than 60,000 acres of good agricultural land have been lost in the past 30 years? Is he not concerned that, by giving powers to new towns to increase their borrowing powers by £1 billion, we may see the erosion of the green belt going outwards from the new towns towards the outskirts of the old towns?
§ Mr. Murphy
I thank my hon. Friend for underlining the point that I am trying to make about the need for bringing the new towns to an end as early as possible. I am sure that that is the Government's intention in bringing forward the Bill.
As I said, the approach that has been adopted has reached the point where we must recognise that no longer should the appetite of the bulldozer be appeased in the inner city. It is now essential to look inwards once more. Renovation should replace destruction; vitality should replace decay.
The Bill has provided the House with the opportunity to look again at the new towns and the way in which their finance is raised and used. This in turn provides pointers to how the inner urban areas might be regenerated, as this, too, is of paramount importance.
I quote my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen) in his book "New Life for Old Cities", supported by about 50 of my hon. Friends, some of whom hope to take part in the debate:Revitalisation of our cities will only come about if Government creates the freedom in which revitalisation is no longer prevented from happening.
§ Mr. David Gilroy Bevan (Birmingham, Yardley)
I am one of those 50 supporters of my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen) and I should like to follow some of the remarks that have been made.
In considering the Bill, which is to allow £1 billion to be drawn or borrowed from one of four different sources, one must consider carefully whether it will have the desired effect. The book to which my hon. Friend the Member for Welwyn and Hatfield (Mr. Murphy) referred tried to point out salient ways in which cities could and should be regenerated. If the money that is available from either public or private sources is a finite sum—in other words, it is only so much of a cake that can be generated from either of those sources—then, though we share the concern of right hon. and hon. Members who have new towns within their constituencies and wish to see them completed so that we can proceed with the real job of rebuilding the inner cities, which have been and are sadly neglected, we must consider whether voting such a vast sum of money will be counter-productive.
First came the planners, then the bulldozers, and then the open and wasted arid acres in the centres of cities such as Birmingham. Those centres have not been rebuilt. Too little money from either public or private sources has been made available to accomplish such rebuilding. I want this change of direction to be noted.
In the 10 years between 1967 and 1976 more than 19,000 houses were demolished in Birmingham. In the next three years, from 1977 onwards, nearly 3,000 houses were demolished. All that was administered by an authority which had 197 architects, 127 lawyers, 360 planners and 960 accountants and financial assistants to take part in this process of non-regeneration.
I agree that this money must be devoted to finishing the new towns that we have started and then, I hope—selling them off as quickly as possible and never repeating this "ginormous" planners' abortive mistake of building on green field sites until we have regenerated our towns, 242 unless we intend to create industrial and urban Klondikes, which in a few years' time will be as abandoned as their American counterparts were.
I ask Ministers and right hon. and hon. Members on both sides to bear in mind what I have said. We must rebuild our inner cities before it is too late, otherwise, they will be irreclaimable.
§ Mr. Den Dover (Chorley)
I want to put one question to the Minister: why do the Government want a further £500 million or £1,000 million of borrowing for the new towns? I ask that because I told the people of central Lancashire around my constituency of Chorley at the time of the last general election certain things. I said that they would have the legal right to buy their new town houses, as well as their council houses. I said that we would run down the activities of the new town in an endeavour to keep green open spaces.
I said that we would correct the massive imbalance that had taken place between rented housing and houses for sale. The ratio should have been one-quarter rented and three-quarters for sale, but under the Labour Government it had been 80-odd per cent. for rent and only 15 or 18 per cent. for sale. We wanted to redress that imbalance. The purpose of redressing that imbalance was to save rather than to spend more money, bring private enterprise into the housing market, and reduce massively public expenditure in the rented housing sector in an area where there had been 60 per cent. owner-occupation before the central Lancashire development corporation was set up about 10 years ago.
I am therefore glad that over the past two and a half years the Secretary of State and his Ministers have made clear statements that they want to have only private housing and have cut off public expenditure on rented housing. They want merely to provide an infrastructure for private housing or private industry, and perhaps provide some roads and sewers. Thus, a paradox is created.
I welcome the Under-Secretary's statement on what schemes he will allow in the period to December 1985 when the central Lancashire development corporation will be wound up. If he allows the programme to be massively run down, if he has identified certain key schemes which he will allow to proceed in the next four years, and if that expenditure is very much reduced from what it would have been if the overall strategy had been implemented and a new town had been built, much less public expenditure will be needed in central Lancashire. Indeed, the figure is £50 million or £60 million, as opposed to the sum of about £250 million that was envisaged.
If that is good enough for central Lancashire—and I welome the swing to private housing and industry away from the public housing rented sector—in line with the statement of 5 February 1981, it is very much the Government's policy throughout the United Kingdom. If that is the case—I accept that certain parts of new towns must be completed—it means that we can make massive reductions in public expenditure on new towns in the future. That is a major plank of the Conservative Government's policies in today's world.
My question to the Under-Secretary of State is: why are we looking for £500 million or £1 billion extra in borrowing? Has there been a mistake in the figures? We envisaged sales of only £200 million to £300 million, so 243 if we have under-achieved, surely the figure does not account for the massive leeway. I wish that question to be answered.
§ Mr. Nicholas Lyell (Hemel Hempstead)
I am glad to take part in this important Third Reading debate at this late hour.
In striking a balance, which the Conservative Party wisely does, between public and private expenditure, the debate is a good example of how we are willing to provide more money to the public sector when it is deemed to be necessary. However, we should not forget the enormous contribution of the private sector. I wish to refer to the first generation new towns, including Hemel Hempstead, which I represent. Hemel Hempstead started with the development corporation, which came to an end some years ago. Now all the Commission for the New Towns houses are owned by the district councils. They have been following a popular policy of selling those houses to the tenants who wish to buy. It is a fallacy for Opposition Members to believe either that that policy is unpopular or that it significantly damages—if it damages in any way—the opportunity for other people to find homes in the towns.
§ Mr. Graham
We do not disagree that to sell a council house to a sitting tenant is unpopular. No one in his right mind would look such a gift horse in the mouth. If a sitting tenant has a house with a market value of £30,000 and along comes a good fairy who says that he can have it for £15,000, of course that is popular. We do not argue about that. We believe that it is wrong in the context of a balanced housing stock.
§ Mr. Lyell
I understand the sincerity with which the hon. Member speaks on such matters, but we believe that he is misguided.
I wish to carry forward the debate to consider the Commission for the New Towns' ownership of all large industrial properties. I am anxious to hear from the Minister in reply that he is taking steps to urge the Commission for the New Towns to encourage and make easier the purchase of business sites. That raises the more important question of marriage values, which may give the impression that we are talking about something quite other than a finance matter. However, the Commission for the New Towns is under the impression that it has done the State a disservice if, in selling off its assets, it does not screw the last possible penny out of the potential purchaser. It has the impression that, if the potential purchaser can make an ounce of profit out of the deal, it has failed the nation.
That is not the right attitude, because one is trying to get things moving. If the purchaser, especially the owner, can buy his property and is thereby encouraged to develop it and to expand and improve his business, and perhaps to borrow against it to create jobs elsewhere, the silver dollar is going round and private enterprise is producing the expansion that we are all anxious to achieve. We are beginning to see it in Hemel Hempstead, while coming out of the bottom of a deep world recession. Some businesses, which were not so effective in keeping up, have sold parts of their sites, which are being redeveloped by top class property companies.
244 They will produce new and secure jobs. I am thinking of the AM International site in Hemel Hempstead. New and secure jobs will be created in place of jobs that have sadly gone to the wall in the past two or three years.
I am glad to see expansion in other modern companies in Hemel Hempstead. It has taken place in computer machinery companies, and Interfood Ltd is taking on a second site. I could take up much of the time in this debate in referring to other opportunities for expansion that are being grasped in Hemel Hempstead.
Having primed the pump, so to speak, by setting up the new towns, we need to sell the assets to those who can make best use of them. That will release money for the Government, produce a much better return than the Government are probably getting through the Commission for the New Towns by being a landlord, and provide an opportunity for the use of energy by those who purchase to create expansion.
I shall give a small anecdotal example of how things have happened much more swiftly in the private sector in my constituency than in the public sector. This is not strictly a new town matter but it provides a good illustration. A charming old mill in Tring was purchased by the district council. The council, with the best will in the world, considered ways of developing it. For several years it considered a number of different and expensive plans. Eventually it wisely came to the view, after no improvements had been made for a number of years, that it would be better to sell it in the private market. It was sold during the past few months and now it is being renovated extremely attractively and sensitively. A building that seemed to be crumbling is now being developed. That is an example of the old story about letting a thousand flowers bloom.
There is often an important place for State intervention in getting things started, but to continue with a dogmatism that provides that assets must remain in State or quasi-State hands indefinitely is seriously to miss the point.
Another example of encouragement of self-help in my constituency is one for which the Government and the county council are entitled to credit, although the maximum credit is due to the people of Grove Hill, which is a district of Hemel Hempstead. The community wanted a youth club and it managed to raise £20,000 towards building one. The county council put in £20,000 and the Government provided £40,000. The youth club was built with an enormous amount of local initiative. I am told by the architect that the community obtained for itself a club that could not have been built in any other way for less than about £130,000. The Government and the county council supported self-help and enterprise in a locality that involved personal effort. The building of a club worth £130,000 was stimulated by an initial effort from the community of £20,000. It was backed by State funding of £60,000.
That vitality and enterprise is represented by developments in Hemel Hempstead. It is to be seen since the Government took office in the taking of important decisions for the town. I am delighted to say that a £7 million hospital development, which had been longed for for many years, has at last been given the go-ahead during the Government's tenure of office. We look forward to the bulldozers coming on to the site in September 1983. The construction of the east-west link road in Grove Hill has been brought forward. When I was first involved in the project it seemed to be 15 or 18 years away. It will provide 245 access to the newest and one of the most flourishing parts of Hemel Hempstead, and I am glad that it has been brought within a time scale of two or three years. That is very welcome news.
I hope that the Government will grasp the nettle and that, with a new chairman, we shall see the Commission for the New Towns—which is being given substantial extra finance—ready and willing to sell properties that it does not need to its tenants who wish to buy them on terms which give a decent return to the commission but also give a decent opportunity to the purchaser. I hope that the Under-Secretary will say that he intends to encourage that in the coming months and years.
§ 1.6 am
§ Mr. Bowen Wells (Hertford and Stevenage)
I am grateful for the opportunity to speak on the new towns and, particularly, about the giving of another £1 billion to the Commission for the New Towns. That signals the Government's failure to enforce the sale of the new towns' assets quickly enough. If those sales had occurred as the Government anticipated and as they were entitled to anticipate, the additional £1 billion would not be necessary. I do not have to remind the House that it is only 12 months since the Minister came to the House for additional borrowing powers for the commission.
The assumption last year was presumably that sales would take place at a faster rate. I have no doubt that in Stevenage there has been a major dragging of feet and insufficient enthusiasm shown by the commission and the Minister has not been enabled—this is a deplorable example of how the democratic influence on Government policy has been denied the opportunity of making clear its decisions—to make certain that the old new towns, such as Stevenage, were sold off to encourage and provide capital for new towns and particularly for urban development in new towns. That was the obligation given to Stevenage and yet it was denied by the commission.
I passionately feel that housing development and industrial development have been inhibited by the fact that the commission has not sold large parts of the land to the east of Stevenage which is practically the only land available for industry and housing development in Hertfordshire. That is why the Minister had to come to the House for an additional borrowing requirement for the commission. In those circumstances, I would normally oppose the additional £1 billion borrowing requirement for the commision because only in that way could I demonstrate the frustration of Stevenage at the dilatory manner in which the commission conducted this business.
The Minister visited Stevenage in May last year to try to speed up the process of applying for planning permission by the commission for just a small part of the available housing land. We are not talking about development for development's sake; we are talking about jobs for the building contractors of Stevenage and, therefore, for their employees. What happened? Planning permission was applied for and the borough council has not approved the application, nine months after the Minister tried to encourage development on that land.
That is a disgraceful record on the part of the Commission for the New Towns. What is more, there are many more acres where it should have applied for planning permission. That land can provide starter homes. It is the 246 way in which ordinary people can begin to own some part of the country. The basic objective that the Minister set out in his programme of house purchase has been denied by the commission.
It makes me furious that the Minister must apply once more to the House for an additional sum of money to achieve the objectives that my constituents voted for at the last election. I want to see the Minister achieve the objectives that we set out for the people of Stevenage. I want to see development in what is proving to be a town in which the genius of the British people can be allowed to flower, yet is being stultified by the fact that no sales are taking place.
The way in which the Ministry has laid down the values at which that property may be sold is an inhibition to the purchase. The market value situation is an art that should be financed by the Minister for the Arts. However, it is being used as a weapon by the Commission for the New Towns and others to prevent the tenants of the factories and of the houses from purchasing the land owned by the commission.
The Minister must take extraordinary powers and galvanise his enthusiasm and energy to stop that. In normal circumstances, if he were not a Minister in a Government whom I support, I would oppose the additional borrowing to force the Government to force those sales, to obtain the enthusiasm and enterprise necessary to make the sales and make the money available for the development of old town centres and for new towns, to roll the money over and to make Stevenage a new town in which the community can stand on its own feet.
To do that the Minister must take into account the fact that the new town of Stevenage is over-rated. Over-rating is an inhibitor to its development and to those who would invest in the town. Ministers need to pay attention to that matter. The new towns need a special rating factor. It should be recognised that they were developed as new towns that were designed with more public land and facilities than other towns, which must be paid for in a short time. That means that a special element must be entered into the new towns' rating calculation that will enable them to attract business and will enable the Government to sell the industrial land. It should be sold not just at market value, whatever that is, but at the price that it can be sold for right now, so that the money can be given to the Minister and he does not have to borrow another £1 billion. It can be rolled over and used in old town centres and new towns and Stevenage can become a town standing on its own feet with its own dignity, attracting the most ambitious and enterprising people of this country to expand the industries which exist there.
Mr. Steen This
debate has raised a number of passions and shown the strength of feeling throughout the House about the importance of the new towns and the consequences of asking the House to approve a further borrowing of £1 billion of public money to help their development.
I congratulate my hon. Friends on the very high quality of debate. Their short, succinct speeches and telling points have been in contrast with the Opposition speeches in Committee. None the less, the Opposition speeches have shown the passionate feelings aroused by the problems of 247 the new towns. I appreciate that not every hon. Member has been in rapturous delight about the time of night at which the debate began, nor about its length.
Those who were not rapturously delighted are perhaps those who do not fully understand the importance of the urban areas and the new towns. Indeed, those who are not ecstatic about the debate probably represent constituencies south of Watford, where there are very few new towns and the problems of the urban areas are perhaps not fully felt, and where Son. Members prefer to go home rather than to debate the problems with which we are concerned and a Bill which will bring a further £1 billion to the service of those problems. Moreover, we are not only talking about the new towns, although the Bill concerns them specifically. Giving £1 billion in public funds to the larger new towns must have a profound effect upon the other conurbations. In any case, why should we not debate the new towns at this time of night?
Last Tuesday we were asked to come and make speeches. I was told to make a good long speech, so I prepared one. Halfway through the debate, however, I was told that I had better keep it short, so I cut the long speech and planned a short one. When I came into the Chamber, however, I was told to make it a little longer so as to spin out the debate. I rushed out to fetch my notes for the long speech and stuck them to the short speech.
The problem is that when one makes a long speech in the Chamber one incurs the dissatisfaction and displeasure of the Chair, but when one makes a short speech nobody really understands it because it is too short. I have therefore been caught between Scylla and Charybdis. Either I cut my speeches to the point at which they make no sense, or I make a long speech and displease everybody in the Chamber. I should have thought that at this time of night, however, at least a few people would be prepared to allow a slightly longer debate on a matter which causes concern, especially as 80 per cent. of the populations live in new towns and urban areas.
The Bill will have enormous ramifications. It will increase the amount of public funds to the new towns, not by £1 million or £100 million, but by £1 billion. That is an extraordinarily large sum. It amounts to £500 million now and £500 million a little later. [Interruption.] The problem that faces me is now demonstrated. I have just started to speak and I am told that I should sit down. I hope that I am able to continue a little further with the speech that I am trying to develop.
§ Mr. Deputy Speaker (Mr. Ernest Armstrong)
Order. I remind the hon. Gentleman that debate on the Third Reading of a Bill has to relate to what is contained within the Bill. I have no control over the length of speeches, but the hon. Gentleman must confine his remarks to what is contained within the Bill.
§ Mr. Steen
I intend to do so, Mr. Deputy Speaker.
Had the measure been brought forward by a Labour Government, the sums of money contained in it would probably have been fought tooth and nail by the Conservative Opposition. Because the Bill is introduced by this Government, Conservative Members will support the Third Reading, even though public expenditure will be increased.
What are the reasons for the Bill? Why is this borrowing taking place? Does it result from higher interest charges? Can the Minister give the old interest charges, 248 the capital sum and the amount of extra money that has to be found? Hon. Members are advised that the privatisation of the new towns has failed to take place as quickly as the Government would have liked. Will the Minister confirm that this is the case? Has the flow of money from the sale of new town assets not materialised? What was the estimated flow? What is the current flow? What is the shortfall?
It is only right that the Minister should explain why so much additional money is needed from the public purse. If hon. Members are not given the information tonight, they are unlikely ever to receive it. One wonders whether the civil servants advising the Minister have pulled a fast one over him and have convinced him that unless the borrowing power is increased the new towns will go into the red. What if they do go into the red? What evidence exists that that will happen? Which new towns will go into the red? And when?
§ Mr. Murphy
I suggest that my hon. Friend should rephrase his remark. It is a known fact that most new towns have gone into the blue and intend to stay that way.
§ Mr. Steen
My hon. Friend's comments are worth making, but I do not wish to delay the progress of the Bill. The question that I raise is whether it matters if new towns go into the red. How many have already gone into the red? How much money has already been realised from the sale of assets? Has there been any cross-financing? Has the money realised in one new town been used to subsidise another? Has the Minister asked his officials these questions? If he has received answers, will he announce them to the House? If he has not received answers, how can he ask the House to approve £1 billion?
Conservative Members, both from the new towns and the older cities, are concerned about the Bill's implications. As I said on Second Reading, the evidence from our cities on the effect of increased levels of public intervention is that it drives out private enterprise. The more public money is pumped into the ailing urban areas, the faster people move out. We have seen evidence of that in the past 30 years. The faster we pump public money into the older industrial areas, the faster the people, firms and jobs leave, the faster the homes deteriorate and the faster the rate base shrinks and rate income is lost.
Public intervention at such levels was originally meant for ambitious redevelopment plans. Local authorities borrowed £455 million in 1965, £398 million in 1967, £589 million in 1968 and £556 million in 1969 to carry out major development programmes. That level of public borrowing provided the resources that allowed the major cities to embark upon massive demolition, which caused Glasgow to lose 21 per cent. of its population, Liverpool 22 per cent., Manchester 18 per cent. and inner London 16 per cent.
What the public authorities commissioned was a direct result of the increased borrowing powers that gave them the funds to do what they did then. The Bill gives the new towns in the 1980s similar powers to those of the older cities in the 1960s, but instead of giving loans for redevelopment the House is tonight being asked for money for unspecified development.
Admittedly the older cities were rebuilding in order to replace what they had demolished, but where cid they rebuild? They rebuilt on green field sites outside the city boundaries. The new towns are built on green field sites 249 outside the city boundaries, but whereas the public borrowing in the 1960s resulted in massive council housing estates being built mainly on green field sites on the periphery of the cities, the public borrowing of the 1980s is for infrastructure and houses and to help spread the sprawl of the new towns outwards. This will provide even greater attractions for those living in the older cities, and this will move them out into the new towns, causing the loss of good agricultural land—a loss that will continue unabated.
The House has perhaps never quite comprehended the scale of that. Dr. Alice Coleman suggests in her second land utilisation study that 60,000 acres of food-producing land are disappearing each year. The Department of the Environment estimates that in the five years to 1979 the average annual loss of agricultural land was about 100,000 acres, of which 30,000 were for urban development. However, the Ministry of Agriculture, Fisheries and Food has said that the average yearly loss of agricultural land to development or other uses, excluding woodland, in the five-year period ending June 1980 was 45,800 acres. In answer to a question on 12 November 1981, my right hon. Friend the Minister said:The average annual loss of agricultural land to urban development in England during the five-year period June 1975 to June 1980 was estimated at 8,400 hectares."—[Official Report, 12 November 1981; Vol. 12, c. 644.]Every one of those answers from each Government Department is different, but whether we accept the lowest or the highest figure it is a dramatic loss of good agricultural land.
In the 1960s the Government closed their eyes to the effect of their policies on the loss of food-producing land. The Bill looks like going the same way.
§ Mr. Steen
The figure comes readily to hand. The latest estimates are from the Civic Trust. It estimates that in the major conurbations 250,000 acres are dormant, derelict or vacant, of which approximately two-thirds is in public ownership—not just local authority ownership but nationalised industry ownerships and so on.
In the 'sixties, successive Governments lent sizeable sums of money to redevelop the older industrial area. People were pushed to the outskirts and the urban sprawl was pushed outwards. What could happen—the Minister should take this extremely seriously—is that by lending a further £1 billion to the new towns the urban sprawl will move outwards. That would result in the loss taking place on the edges of the new towns, just as it took place on the edges of the old towns.
With the new money the new towns may be pushed out towards the periphery of the old towns, which would reduce the wedge of agricultural land in between. The basis of the new towns was to provide an overspill for the old towns, but the old towns are expanding outwards. In 1982 we could be agreeing to the erosion of the green belt from the other direction. In years to come we could end up with a continuous urban sprawl from the new towns to the old. There will be one large suburban area, similar to parts of the eastern United States, with continuous town after town.
250 My concern is whether the funds should be used for this purpose. How will the Minister stop it from happening? We have heard the Minister of Agriculture Fisheries and Food confirm that in his view it is important to halt green field site development until we have filled the vacant wasteland sites in the inner areas. We should do that in preference to allowing further agricultural land loss. Will the Minister confirm that he will not allow the Bill to finance the continuation of urban sprawl? Unless the Minister has detailed plans of how the money will be used in each new town, he must be concerned that he is giving tacit consent to further destruction of food-producing land.
We are approving the injection of an enormous sum of public money into a few selected areas, but there is overwhelming evidence that the time is right for many of them to give up their special status. By giving those areas more public money the Bill is extending their active life. Is that really what we want? More public expenditure will result in a continued population drain from the older cities. Good food-producing land will continue to be lost. It is for these reasons that I and my hon. Friends representing both old and new towns are deeply concerned. The Minister should consider the effects of the Bill extremely seriously.
If it is the Government's intention to sell off the assets why is the Commission for the New Towns not being wound up? Why do we not have a date for the disappearance of this quango? Will the Minister fix a date for its demise?
On Second Reading the Minister confirmed that the money to be borrowed would in no way prejudice the level of Government funding to older cities, but that begs the question. The Bill's effects may be far more devastating than to reduce by a few million pounds the money going to inner urban areas. The growth of new towns could be the major threat to the revitalisation of our principal cities. Liverpool, Manchester, Birmingham, Sheffield and Newcastle all need revitalisating. They need people, skills, jobs and new firms. They will not get them if the new towns continue to act as a magnet to the inner urban population. The £1 billion of borrowed money could well sustain the magnet and continue to drain the older inner city areas of their population.
Nor should public borrowing be seen as an end in itself. We need a partnership. As I said on Second Reading, we should use public money to attract private money. It is too easy to spend from the public purse in the hope that private money will be forthcoming. That is the mistake of the UDCs. They believe that by using public funds to provide the infrastructure for the docklands and so on private capital will follow. It may not.
Unless the Government are committed to capitalising on private finance, we cannot be sure that public investment is the best possible value. Why is the Bill silent on private investment? Perhaps the Minister will confirm that the Treasury will not permit the new towns to borrow from the private sector. If the Government are committed to privatising the new towns and encouraging private funds, why are the new towns being prevented from borrowing money from the private banks and the private purse?
I have explained my concern about the impact of the Bill. I conclude by asking the Minister seriously to consider introducing industrial revenue and municipal bonds. The new towns and old towns could be designated special areas in which the local authorities could issue bonds that could be purchased by private institutions from 251 the corporations. They would be tax exempt. The institutions would get paid interest by the corporations at 3 or 4 per cent. below the bank rate. The investors would get the interest on their money tax-free. The corporation would attract private funds. With the cash they could generate new rate income and new jobs.
For example, instead of giving the new towns £1 billion, we could allow them to issue tax-exempt bonds for infrastructure and industrial development. In either case the lending institution would be getting an attractive deal and the corporation would be borrowing money from the private rather than the public sector. Bonding would not cost anything. It would generate new jobs, create more rate income and provide an incentive for the private sector to invest in ailing older urban areas and new towns.
The Bill may not be needed. I am not opposed to giving new towns more finance, but I need to be satisfied about the effects of such funding and particularly about the damage that it may do. It might do good; it might do harm. It gives exclusively public money to exclusively quasi-public corporations, which will inevitably further distort the market economy and could put yet another nail in the coffin of the older cities. It could also damage the new towns.
§ Mr. Graham
I rise to reverse the trend of recent speeches and support the Government wholeheartedly and without reservation.
I acknowledge that every hon. Member has spoken with absolute authority because he has done so from his own experience as well as from the heart. The Government ought to be warned that to the casual observer—as I have been for the last hour or so—however they consider they are carrying out their remit, they are not going far enough or fast enough for some Conservative Members. Therein lies the great difference between us.
Labour Members have never argued that once the new towns were established, managed and financed that was the end of it and there would never be any change. The handing over of the new towns to local people and changes in their democracy have always been accepted by Labour Members as a continuing exercise. It is a question of when and how.
The hon. Member for Welwyn and Hatfield (Mr. Murphy) talked about bringing the new towns to an end as quickly as possible. I shudder to think what he meant. It is one thing to talk about the designation of an existing new town, how it is to be managed and financed and its assets distributed. However, during the debate the hon. Gentleman nodded vigorously at many of the phrases that in effect meant that there would be a dissolution of the new towns as we know them and a complete transformation to something completely different.
Conservative Members may sincerely believe that that is what their constituents want. The hon. Member for Hertford and Stevenage (Mr. Wells) was not present on Second Reading, nor was he here for the Committee stage. He came into the Chamber for part of the Third Reading debate and has now gone. He said that his constituents were furious at the Government's ineptitude. I suggest that they are angry at the Government for more cogent reasons than the manner in which they are allowing the sale of new town assets. A whole range of things affect the 252 constituents of Hertford and Stevenage and elsewhere far more directly than this issue, important as it is. The hon. Gentleman should put it into perspective.
The hon. Member for Birmingham, Yardley (Mr. Bevan) welcomed the Bill because it would enable the assets to be sold as quickly as possible. That is municipal vandalism. We are being asked to build sound commercial businesses and sell them once they are profitable. That puts out of balance the portfolio of the town's management. In effect, we are selling off the profitable bits and leaving the district council or development corporation with what is left. They will then be accused of being bad managers because they do not have a balanced portfolio.
The hon. Member for Liverpool, Wavertree (Mr. Steen) and others rightly drew attention to the fact that we are not looking at new towns in isolation. The Bill is narrowly drawn, but, as an hon. Member representing an urban constituency, I am concerned at the problems in the new towns. Equally, hon. Members who represent new towns should realise that what appears to be good for them has connotations for others. I accept the unity of interest between those hon. Members who represent new towns and those who represent other areas.
The hon. Member for Wavertree was a bit unfair to the Minister, although no doubt that was, on more than one occasion, his design. He asked why the Bill was being introduced now. On Second Reading, the Minister made a fleeting reference to that and later the Under-Secretary spelt out the two reasons, which are both admissions of failure. The Government underestimated the speed at which they could persuade development corporations to sell the property, and the interest rate. The marketability of the property and the justice of the matter are other issues. However, both the speed at which development corporations could be persuaded to sell and the interest rate fall within the Government's domain.
The hon. Member for Wavertree asked many other questions and I wish him better luck than Opposition Members have so far had. However, I understand that it is not always possible for the Minister or the officials in the Box to give an answer to every question. It is right that questions should be asked and that they should go on the record. Next week, I and other hon. Members will read the debate and return to the questions to which we have not received answers and will ask them again.
The hon. Member for Hertford and Stevenage has returned to the Chamber. I am grateful to him because he was the only Conservative Member, representing a new town, to have the courtesy, grace and good sense to plead for his new town in the context of the new town factor in the rating system. The Government should acknowledge that factor. I understand the problem of giving special rating for special circumstances, but no other Conservative Member—
§ Mr. Proctor
To be fair to other Conservative Members, I should put it on the record that several hon. Members raised that point on Second Reading.
§ Mr. Graham
The speech made by the hon. Member for Hertford and Stevenage impressed me more than the other speeches. Therefore, this is an all-party, new town point. I hope that the Government and the new towns will be able to work in a better ambiance and that the Minister and his colleagues will consider that point.
I certainly give the Bill a warm welcome.
§ Sir George Young
We have listened, on Third Reading, to several speeches of high quality. My hon. Friend the Member for Basildon (Mr. Proctor) opened the batting in the second innings with a purposeful speech, which swept the hon. Member for Edmonton (Mr. Graham) to the boundary time after time. The importance of his speech was that he showed that crude statistics on waiting lists can be misleading and must be interpreted carefully to find out exactly what is happening in a town.
We are all delighted to hear of the growth in the number of new firms moving into my hon. Friend's constituency and of the Corporation's success in generating inward investment. My hon. Friend asked me about short-term borrowings by corporations, and my hon. Friend the Member for Liverpool, Wavertree (Mr. Stead) also touched on that point. If the development corporation takes the risk on the development, the expenditure is public, and it must be controlled as such. The only question is the most economical way of financing that public expenditure. Successive Governments have held that public expenditure would be financed most economically if the necessary borrowing were managed centrally. Nevertheless, I shall reconsider short-term Exchequer loans. If the private sector takes the risk, that is a different matter.
Several of my hon. Friends asked about the rundown of the programme of developing houses for rent. In 1978–79 a total of 7,005 development corporation homes were built for rent. That figure will decline to 1,330 in 1982–83. The last few of the rented schemes approved in 1980 are coming through as completions. From now rented schemes will be the exception and will have to be cleared personally by Ministers. That has been balanced by a substantial increase in the building of properties for sale. The statistics for that have risen from 2,900 in 1978–79 to the 8,374 that are planned next year.
A number of my hon. Friends asked about plans for winding down the commission. The Government's firm intention is to do that. Already we have made substantial progress in reducing staff numbers. The regional offices are being closed, with the exception of Corby, and are being concentrated on London. That has a beneficial effect on staff numbers and overheads.
The disengagement is being pursued energetically. Our policy is to wind up the commission, but legislation is required. A major disposal programme is under way.
§ Mr. Bowen Wells
May we have an assurance that the necessary legislation to wind up the commission will be introduced in this Parliament?
§ Sir George Young
I cannot give that assurance, because the legislative programme does not rest in my hands, but my hon. Friend's comment will be noted in the appropriate quarters.
Some of my hon. Friends rightly pressed for more and faster privatisation. Of course, it takes two to tango. The sales of assets require not only that the new town be a willing seller—and certainly we shall do what we can on that—but that a buyer be able and willing to purchase the property at a fair price. Property put on the market has to attract interest from investors. As I said on Second Reading, many sitting tenants at this stage have not felt able to pay a fair proportion of the marriage value, given the present interest rates and the world recession.
254 Some of my hon. Friends suggested that more private capital for new development might be attracted to the new towns. Forward funding of development corporation-sponsored new development by financial institutions and the like amounted to £20 million in 1978–79 before we took office, rose to £76 million in 1980–81 and is expected to be £50 million in the current financial year. That is over and above the sum spent by private firms building their own factories on land made available by corporations. So, new towns are seeking as much private risk capital as possible in that way.
My hon. Friend the Member for Birmingham, Yardley (Mr. Bevan) put an inner city dimension on the issue, as did my hon. Friend the Member for Wavertree. No one is keener than I am on rebuilding the inner cities, because I represent a constituency with inner city problems. May I tell my hon. Friends who subscribe to "New Life for Old Cities"—a stimulating publication—that Ministers are considering the proposals in it? We shall respond to them in due course.
Hon. Members will appreciate the existing scale of private investment in the new towns. I have given a figure for that. If one adds up the forward funding of the £76 million development by the development corporations, the £37 million investment in offices and shops, the £38 million in industrial space and the £100 million in housing provided by private funding on land sold to the private sector, one comes to a total of £250 million of private investment in the new towns. That compares well with the gross public capital investment of £310 million in the same period. We are trying to achieve a partnership.
Not all the new towns are on green field sites. One should not forget the contributions by corporations such as Warrington and Runcorn to urban renewal in the old towns within their designated areas.
Some hon. Members asked why we had to introduce the Bill. The reasons were set out in the Minister of State's speech on Second Reading on 26 January at columns 757 and 758. In response to my hon. Friend the Member for Chorley (Mr. Dover) my hon. Friend set out some of the major projects that would be funded in the next few years in the new towns. I am sure that the Members for those new towns will appreciate the investment that is to take place in them.
§ Mr. Steen
My hon. Friend has rightly drawn attention to two matters. First, it is rewarding to learn that so much private money is going into the new towns, but the more private money that goes into them, plus the £1 billion provided for in the Bill, the greater will be the disincentive for private money to go to the older urban areas. I was proposing industrial revenue bonds and municipal bonds to give some incentive to private investment. Secondly, the more money we give to the new towns, the more they will move outwards. I hope that my hon. Friend will deal with that point. How does he propose to stop the erosion of the green belt?
§ Sir George Young
My hon. Friend is now moving into a slightly wider area. He has raised an issue that is the concern of the Treasury, namely, how we finance public investment. One of my hon. Friends from the Treasury is on the Front Bench, and I know that he will have taken that point on board.
The other matter is basically a planning rather than a public expenditure matter—namely, what percentage of 255 the country we designate for agriculture and for development. Such issues are dealt with in the structure plans. They are not central matters for the Bill. I remind my hon. Friend that on Second Reading my hon. Friend the Minister of State said that the new town programme had effectively been raided to put more money into the inner cities I hope that he accepts that we have our priorities right. We are putting more money into the inner cities and trying to bring to an end the investment programme in the new towns. A substantial amount of the money that will be borrowed under the terms of the Bill will be used to pay interest on the accrued deficit in past programmes. Therefore, not all the money will go into more public investment in the new towns.
My hon. Friend the Member for Chorley knows that we have recently turned down some proposals for industrial development at Shade Lane in the Yarrow Valley because of the unsuitability of the site on environmental grounds. I know that he will respond to the consultation document on the future of the Central Lancashire new town.
My hon. and learned Friend the Member for Hemel Hempstead (Mr. Lyell) summed up very well the approach that we should adopt in disposing of assets when he referred to the taxpayer and the purchaser getting a reasonable return. That must be the objective of Ministers. If any hon. Members feel that the Commission for the New Towns is not being reasonable in its relationships with their constituents, they can refer the matter to Ministers, who will be interested in looking into it. I agree that the State does not have to hold on to all the assets in the new towns for ever and a day and that there is a strong argument for selling them and recycling the money. I was delighted to hear of the high gearing that has been achieved for the youth club in my hon. Friend's constituency.
§ Sir George Young
When I wound up the debate on 26 January—I seem to do nothing but wind up debates on new town Bills—I tried to define the marriage value and how the bonus should be divided. I cannot go much further than that. I think the point is taken that all the bonus should not go to the Commission for the New Towns. The chap buying the site is entitled to a share of the action. If my 256 hon. and learned Friend feels that there is some unreasonableness about which Ministers should know, I urge him to refer it to us and we will see what we can do.
Generally, we are asking the commission to carry out a careful review of all its development sites to ensure that they are offered at proper prices. At regular intervals my hon. Friend and I look at the progress that the commission is making in disposing of its sites.
My hon. Friend the Member for Hertford and Stevenage (Mr. Wells) spoke about the sites to the east of his constituency. I visited them a few days ago. We are in correspondence with the CNT with a view to developing these sites. I shall take a personal interest in the matter to make sure that action is taken.
On the question of grant-related expenditure assessments for constituencies, there is an open invitation to see whether the formula can be improved in any way, as I said on Second Reading. We have to do that in a way that is fair to all parts of the country and is genuinely based on extra needs in the new towns.
My hon. Friend the Member for Wavertree wound up the debate for me with a general tour d'horizon and put the Bill in a slightly broader perspective. He is right to say that the rate of disposals has taken a little longer to build up than Ministers predicted, but the target is the same. It is the speed at which we achieve it that is behind the need to have the Bill earlier than we had envisaged. Some towns are in surplus and others are in deficit. If my hon Friend wishes to know which are which, he will find the information in the annual accounts of each corporation. It will be a fascinating exercise for him.
I assure my hon. Friend that there is no question of the Bill being used to finance urban sprawl. The planning controls will ensure that. The new towns have designated areas which it is planned they are to develop. That is the constraint on their future expansion.
My hon. Friend also raised the matter of industrial development bonds, which I shall take up with the Treasury.
The Bill is unusual in that we have had three Second Reading debates in quick succession. I hope that after all three of them the House will now agree to give the Bill a Third Reading.
§ Question put and agreed.
§ Bill accordingly read the Third Time and passed.