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11.58 am
Mr. Shaun Woodward (Witney): I congratulate my hon. Friend the Member for Totnes (Mr. Steen) on securing this important debate. I also join others in congratulating Lord Rogers and the members of the urban task force.
There is no doubt that it is right for us to consider this issue--albeit, as my hon. Friend said, yet one more time. The question is, what will now be done? Hon. Members have rightly praised aspects of the report, but wheredo we go from here? The report contains 105 recommendations, and yesterday the Government proudly claimed that they had already implemented one of them. That leaves 104. At that steady rate of progress, the Government should have worked through the report by 2003.
The Minister is clearly anxious for the White Paper to be published soon. It will be interesting to see whether the Deputy Prime Minister is prepared to take on what are undoubtedly powerful political interests. The crucial question is whether he will win the battle for money from the Treasury--and, indeed, where the extra money will come from for investment in public transport and housing. Is the right hon. Gentleman prepared to tackle local authorities, and ensure that their planning powers are loosened? Hon. Members have rightly mentioned that. The need for urban regeneration arises from the need to find 3.8 million extra homes in the next 25 years. Again, the crucial question is: where will they be?
In some respects, the report makes uncomfortable reading for the Government. Lord Rogers highlights the failure so far to meet the Government's targets on brown-field sites. As he says:
By the same token, as we can see from the report, if the Deputy Prime Minister were to adopt a more rigorous, exacting attitude, enormous benefits would accrue and many areas of the countryside would be saved. Indeed, if he had read the report in detail, he would have seen that the potential for things to get worse in relation to the proportion of housing to be developed on previously developed land is considerable. We could fail to hit not just the target of 60 per cent. but the target of 55 per cent. Even worse, it could easily fall to 47.4 per cent.
By the same token, if the Government were to discount their sloppiness and go for a rigorous approach, as Lord Rogers rightly points out, increasing average density of new development on previously developed land by just 10 per cent. would allow them to hit the 60 per cent. target. He recommends other ways in which the Government could improve on their appalling record.
The report makes uncomfortable reading for the Deputy Prime Minister for other reasons. Despite Government claims, the report shows that Government spending on inner-city regeneration is behind Conservative levels when we left office. As the report says--[Interruption.] The Minister nods.
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Nick Raynsford)
indicated dissent.
Mr. Woodward:
Let me refer the Minister to page 286 of the report, which is headed, "The big numbers". It states:
Mr. Woodward:
The report shows that the levels in 1995, 1996 and 1997-98 were above the Government's levels in 1998-99. If the Minister doubts it, he should turn to page 286 and see for himself.
The Deputy Prime Minister must know the trouble that he and his Ministers are in with the report. Schemes to cut VAT rates on construction will not endear him any more to the Treasury. His disastrous transport policies will not win support in the country if he adopts the report's proposal to cut road spending. Perhaps the Minister could tell us this morning whether he intends to cut road spending further.
The hon. Member for Stroud (Mr. Drew) rightly drew attention to the report's emphasis on the importance of public transport, yet the Deputy Prime Minister continues to preside over some of the worst transport chaos in decades. If we had to take just one example, we would take London. Let us look at investment levels on the tube in London. In 1996, the Government put in more than £1 billion. This year, it is half that: £564 million.
People cannot get to work in London. They cannot get from work to their homes in London. How on earth does the Minister intend to persuade people to follow the report's recommendation and to come to live in the capital when the Government have engineered chaos on its public transport?
People do not need Lord Rogers's report to tell them the truth. The Government have cut spending on the tube and it is getting worse by the day. The Deputy Prime Minister still has no proper agreement and implementation date for his PPP--the public-private partnership. He will almost certainly not be able to hand over London Underground to the mayor next April or May. He still has no agreement for extra money to finance the tube next year and beyond.
The report rightly highlights the fact that it is no use adding to all the derelict land throughout the nation and demanding that it be covered in new houses if no one wants to live there. Houses follow jobs, as all those Ministers who live in Admiralty Arch and Dorneywood know.
The report does not confront directly the fundamental loss of jobs in the north, which has led to the north-south migration. People are leaving the north in huge numbers. The Government continue to preside over that tragic collapse of northern urban areas. After two years, there is still no clear policy on how to reverse it.
At the heart of the report lies the following question: who will pay to halt the decline in our inner cities? Where will the money come from? It will be interesting to see whether the Minister even begins to answer that question.
Briefing before the report was published--unfortunately, as always with the Government, there is a fair amount of leaking before reports ever find their way to the House--estimated that, net, it would cost between £1 billion and £2 billion a year to implement the report's recommendations. The report believes that inner-city regeneration could best be achieved by, among other things, cuts in council tax in inner-city areas, cuts in stamp duty and, crucially, cuts in VAT on conversion properties.
In addressing that crucial question--it is crucial; it will be interesting to see whether the Minister addresses it this morning--the report says on page 255:
There is no question but that harmonisation at 0 per cent. across the board would be welcomed by everyone. However, how will that be paid for? [Interruption.] The Minister rightly says, "Dream on." We look forward to seeing the White Paper, but can he tell us when it will appear? Will it be like his Department's Railways Bill, which was cancelled last year by No. 10 and delayed this year by No. 10? It is now anyone's guess when it will arrive, let alone be implemented.
Sadly, the true fate of the report rests in the hands not of the Minister or the Deputy Prime Minister, but of the Chancellor of the Exchequer. In the Deputy Prime Minister's extraordinarily unwieldy and stagnant empire, it is not he but the Chancellor who makes the decisions. The Chancellor will decide which, if any, of those policies can be implemented. He will make the money available and he will tell the Deputy Prime Minister whether he can have his report.
From where will the money come, if not from the Treasury? The Minister nods, but perhaps he will answer that question. Will it come from current revenues--if so, what will be cut? Will it come from new taxes--if so, on whom will they be levied?
As so often, the success of the Deputy Prime Minister's policies rests in the Chancellor's hands.
"Our model leads us to estimate that on the basis of current policies, just over two million dwellings will be developed on recycled sites over the 25-year period of the housing projections. This equates to 55 per cent. of the projected 3.8 million extra households being accommodated on brownfield sites. In other words, if we continue on the current path, we will fall short of the Government's target."
The Deputy Prime Minister's response to that was interesting:
"We shouldn't become obsessive about the figure."
That is an extraordinary signal for him to send. It is precisely the wrong signal to send to local authorities and to those involved in planning. As long as such sloppy signals are sent, green field will be built on and brown field will remain vacant. Such indifferent sloppiness from the Deputy Prime Minister will have a continually devastating impact and the targets will be missed.
"Following the Government's Comprehensive Spending Review . . . the Government promised to increase its regeneration expenditure over each of the next three years. In real terms, however, the increase in expenditure only means that by 2001/02 we will have just overtaken the amount that the previous Government was spending in 1993/94."
Mr. Raynsford:
What happened after that?
"Refurbishment or conversion of existing residential properties carries full VAT at 17.5 per cent. New housebuilding incurs no VAT, nor does conversion of commercial buildings for housing. There is therefore a strong case for harmonising the different rates, preferably by removing VAT on refurbishments or conversions of residential buildings, or introducing zero-rating."
14 Jul 1999 : Column 357
Therefore, as the report says:
The crucial question for the Minister is: are the Government pressing the European Commission to enable harmonisation to occur without imposing VAT on new houses? If they do not, if the Treasury does not make extra money available and if the Minister's only solution is to cut VAT on converted property and to raise VAT on new houses, anyone who wants to buy a new home, any young couple, any starter group embarking on a new home, had better realise that the report carries a serious probability--unless the Minister will tell us today that he rules it out: a 5 per cent. tax on new homes over the next 25 years. Perhaps he will tell us whether the Government have plans to introduce that 5 per cent. tax, or say categorically that there will be no 5 per cent. tax on new homes, now or in the foreseeable future
"It is essential that the UK presses the European Commission to enable harmonisation to occur without the need to impose VAT on new build housing development."
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