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Inner-City Policy

Volume 131: debated on Wednesday 13 April 1988

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To ask the Chancellor of the Duchy of Lancaster if he will make a further statement on progress in implementing the Government's initiatives for inner-city regeneration.

The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry
(Mr. Kenneth Clarke)

I am pleased to say that excellent progress has been made in implementing the action for cities measures announced on 7 March. My right hon. Friend the Secretary of State for the Environment is finalising the boundaries of the Lower Don Valley urban development corporation and hopes to lay an order before the House next month. He is about to appoint consultants to report on the extension of the Merseyside development corporation. My hon. Friend the Minister of State, Home Office launched the first of 20 safer cities initiatives in Wolverhampton on 7 April. My hon. Friend the Minister of State, Department of Employment is to open the first of six new inner-city small firms service offices in Sheffield on 19 April. 1 took part this morning in Newcastle in the first presentation to encourage company involvement in urban regeneration which was attended by about 200 local business leaders..

I thank my right hon. and learned Friend for that reply and welcome the progress that has been made. Nevertheless, does he agree that resources for investment in the public and private sectors inevitably are finite? Does he accept that for property developers in particular the pickings to be gained by developing in the over-developed, luscious parklands of the south are far easier than redeveloping in urban areas of the kind to which he has alluded? Will he please get together urgently with my right hon. Friend the Secretary of State for the Environment to see whether we can add to the incentives that he has announced disincentives to develop in over-developed areas?

I am glad to say that the total level of investment in the United Kingdom economy, particularly manufacturing investment, is continuing to rise. I do not accept that the level of investment is necessarily finite. However, I understand my hon. Friend's anxiety about the pattern of development, and I am sure that he will welcome many of the measures that I have just announced, because they make it ever more attractive to invest and develop in parts of the country that previously were in decline. Those areas need new factory and housing development for the kind of growth that we are describing.

Does the Minister accept that for the regions and inner cities, particularly in the north and Scotland, to be successful, they will have to be given a fair share of the corporate headquarters and jobs that go with them? What steps does he propose to take to ensure a greater balance and distribution of those jobs rather than an excessive concentration in the south-east, to which the hon. Member for Christchurch (Mr. Adley) referred and by which the right hon. Member for Henley (Mr. Heseltine) is disturbed?

I agree with the hon. Gentleman that the difficulty is that a large proportion of companies tend to have their headquarters in London and the south. The geographical size of the United Kingdom is not so great that that problem cannot be overcome. In the end, it is for companies to decide where to locate their corporate headquarters. In that regard, Scotland has certain advantages over provincial England, and there are indeed more corporate headquarters in Scotland.

Does my right hon. and learned Friend accept that I do not wish to damage the scheme by praising it? I believe that what is being done in the inner cities is the result of one of the best and most robust measures that we have taken in this Parliament. Will he ensure that aid is provided to level old factories so that new industries can rise and thrive? That would be one of the most interesting and useful things that any Government could do for the midlands.

I am grateful for my hon. Friend's support and advice. I hope that we can help those involved in the Birmingham heartland scheme to achieve what he described in that large area of derelict land in west Birmingham. Everybody with an interest in Birmingham must want to see that area developed as rapidly as possible. We hope that Sir Reginald Eyre and his colleagues will be able to make rapid progress.

What is the point of breakfasting business men at £400 a head when the reality is that in a city such as Newcastle, where the Chancellor was this morning, there will be a loss of £2·8 million in purchasing power as a consequence of the changes in the social security scheme? Is not the combined effect of the Government's changes in the Budget and the social security scheme to take money from the deprived in the inner cities and give it to the affluent, who are largely in the south-east? Does that not mean that the effect of the Government's much touted initiative is to perpetrate a cruel and wicked charade?

I do not mind having my leg pulled about breakfasts, but this morning's presentation to the leading business men of the city was very professional. The hon. Gentleman will find that they were impressed by what they heard. They intend to build on what has been achieved with the new Metro centre in Gateshead and the new Burton Design Works in Newcastle. The economy of the area is reviving and will revive in the inner cities. I am sure the hon. Gentleman will welcome the fact that our changes to the rating system, particularly the non-domestic rate, will ensure a reduction in commercial rates in Newcastle of 32 per cent. in the near future. That policy benefits the north, largely at the expense of the south, in a way that he should welcome.