Examination of Witnesses (Questions 833
- 859)
WEDNESDAY 19 APRIL 2000
THE RT
HON JOHN
PRESCOTT, THE
RT HON
HILARY ARMSTRONG
AND MRS
MAVIS MCDONALD,
CB
Chairman
833. Can I welcome you to the Committee and
ask you to identify yourself and your team, please?
(Mr Prescott) I have with me Hilary Armstrong,
the Minister for Local Government and Regions and Mavis McDonald
from the Department, who I think was described as a female Sir
Humphrey when she appeared before the Committee last time. She
totally rejects that and I agree with her. Can I say one or two
words in introduction? This government, as you are aware, is committed
to making our towns and cities more successful. We need towns
and cities that are clearly prosperous as well as well designed,
offering a good quality of life and opportunities. The White Paper
which we are referring to will provide a policy framework for
action at all levels of government, national, regional and local
and indeed is the first White Paper to consider policy as a whole.
We are still in discussions and developing a number of the ideas.
It will not sit in splendid isolation as a White Paper. Our whole
approach is based on the interdependence of town and country and
we are seeking to achieve a better and a more sustainable balance
between urban renewal and the protection of the countryside. Improving
quality of life, promoting choice and tackling social exclusion
of course are a direct benefit to our countryside and the Committee
has discussed a number of these aspects before. By making the
urban environment more attractive, we ease the pressure on the
greenfield sites and promote a virtuous cycle of regeneration.
The interdependence with rural areas means that there is a case
for looking at urban and rural issues together in a single White
Paper. I would like to put this problem to the Committee and I
would be grateful for advice on it. You could have one paper that
covers urban and rural areas. We did consider that possibility,
though most people in rural areas would tend to feel that they
were outweighed by all the urban considerations. There is a political
consideration to recognise that there are two distinctly different
communities, though the principles of sustainability may be the
same for both. This poses a particular problem when you bear in
mind that 40 million people in England live in urban areas and
10 million in rural areas; but about 20 million live in suburban
areas. There is no straightforward divide between town and country.
Indeed, Lord Rogers, in his resport, says that 90 per cent of
the population live in urban areas. How is it then that we have
80 per cent, and then you begin to see that Lord Rogers was concerned
about market towns. He said they are really urban development
in the countryside which I think indicates the problems which
in America they call the quality of liveability. It is perhaps
a better word than "sustainability", but I doubt it.
That is how they approach it but how do we deal with it as a White
Paper? Do we have a simple White Paper on urban and then one on
rural? There is a body of principles about sustainability of communities
that apply to them all. Our approach is likely to be that we should
have a statement about the sustainability of communities, their
economic prosperity and all the other things associated with sustainable
communities, and then have how those principles should apply to
the rural and the urban papers perhaps in two areas, but then
we have to deal with the suburban problem as well. I am not suggesting
there should be three papers but I think you can recognise the
political framework we are operating in. That is where I would
be grateful if you could perhaps give some thought to this idea
of how you deal with suburban areas where a lot of people live
and have problems above rural and urban. The Urban White Paper
will need to deal with the economic, social and physical issues
together. Many parts of the framework are already in place. I
did commission the Rogers Urban Task Force—and I know you
have discussed his report with him—to look into the practical
ways of bringing people back to urban areas. I welcome their report.
I believe it is an excellent contribution on how to create an
urban renaissance. The report contained over 100 recommendations.
We are considering them all. We have implemented about a quarter
so far and we will publish a full response at the time when we
publish the White Paper. So far, we have piloted the urban regeneration
companies, and home zones. We are piloting private finance initiatives
in housing. We are putting local transport plans on a statutory
footing and we are working on a ten year transport strategy. We
have published planning policy guidance note three on housing
through my statement to the House in March. We have issued consultation
documents on the East Anglia and the south-east regional planning
guidance, but I am concerned with the big picture, providing a
proper framework for delivering a range of policies to support
sustainable communities. For example, in conclusion, a year ago
we established the Regional Development Agencies, a New Government
for London. We are legislating for new forms of local governance
to bring government decisions closer to the people. We have already
released £5 billion over 1997-2002 to improve the social
housing stock and already 500,000-plus improvements have been
achieved. Two weeks ago we published a Green Paper on Housing
Policy with proposals to ensure everybody had the opportunity
of a decent home and a week ago we published the draft strategy
on neighbourhood renewal, showing how we can tackle social deprivation.
We are putting £800 million into the New Deal for Communities
over three years. We have already done a great deal. We have further
work in hand with other departments to complete this picture.
The White Paper therefore will show how we can bring all these
components together to achieve our vision for sustainable towns
and cities.
834. You were going to produce a Rural White
Paper and an Urban White Paper at the same time. Are you saying
to us that it may now be one paper with, if you like, two sections
to it?
(Mr Prescott) No. I did make it clear I think that
I am committed to two papers. One would be rural. One would be
urban. I then find the question, which one does the suburban one
come into? What I might do is, in both papers, perhaps have a
statement, if I can think aloud. The first chapter would almost
be about the principles of sustainable communities. You may implement
those differently in a Rural White Paper and the application of
rural areas or indeed as opposed to the urban areas, but it will
be two papers. The way to do it is not to have a separate paper
on sustainable communities but to have the same introduction and
then show how they will apply in the specific areas.
835. You would be looking to publish the two
at the same time?
(Mr Prescott) Yes. I think it would be unfortunate
and misinterpreted if you produced one and not the other. People
would say you were giving preference to one rather than the other.
It does raise an interesting point. As you know, the Prime Minister
has had a number of seminars with people in rural communities
and they have set in hand some work to look at various planning
applications and how you can improve it. That work does help us.
I think another seminar is proposed on some of the implications
for planning and we can take that fully into account and put it
into the Rural White Paper. That is one way, a specific application,
of a policy under consideration at the moment that needs to be
put into the Rural Paper, so they will be separate.
836. The cynic in me wonders whether it might
mean that the two are going to be rather later as a result of
being run in parallel.
(Mr Prescott) No. One of the first lessons I learned
in government: do not start making statements because as soon
as it is delayed after proper consideration everybody starts saying,
"Oh, it is late. There is a big argument going on."
We will produce a paper when we think it is good and ready and
have taken all proper consideration.
Mrs Ellman
837. You have spoken about the big picture and
the interdependence of town and country. How are you going to
relate the prosperity of town and country to its regional context?
What will be in this White Paper that will make that connection?
(Mr Prescott) Clearly, a sustainable community is
not only about good housing and good education. It is also about
providing jobs and good community living. It is a working countryside;
it is a visiting countryside. We will try to reflect those principles
outlined in the Rogers Report but also in our memorandum to you,
as to what we think the principles are in the White Paper. You
may have to apply it differently. Can I give you an example? I
noticed, when I was spending a weekend in one of the national
parks, that the farmers and people in the area were telling me
the difficulties they had converting empty buildings into other
use rather than farming. It depended against some of the planning
requirements in those areas. If we address ourselves to that and
recognise that it is a working community and that there are other
things than just the agriculture they need to develop in the area,
we will address ourselves to those principles. Hilary has been
dealing with a number of these things.
(Hilary Armstrong) I know that you interviewed Lord
Falconer about the PIU report on regional coordination. We do
see that the regional strand of understanding, of strategic thinking,
of strategic planning, is very important in both the revitalisation
of our cities and other urban areas and in our rural areas. Certainly,
the role of the Regional Development Agencies is absolutely critical
in making sure that they are pulling together the land opportunities
for development of both city and rural areas. There is very clear
linkage to the regional agenda and that will be reflected in the
White Paper. It is not a paper to take regional policy further,
but it does give us the opportunity to express the importance
of appropriate working at national, regional and local level.
838. Will the White Paper be looking at financial
issues which affect making those connections? How will it be affected
by the Comprehensive Spending Review?
(Mr Prescott) Certainly in the sense that resources
are an important part of the developing and helping in the providing
of houses, economic prosperity, all those decisions, resources
are quite important. Access, transport, all these matters and
certainly the expenditure by government now being reviewed for
the next three year period is a very important part. That is one
of the good reasons you would not produce a White Paper before
the review is concluded, whilst we are giving all the arguments
we can to the Treasury as to why we need these resources in these
areas. Also, do not forget that we have done a cost cutting review
again, combining the town and other areas to look at all the departments,
to make sure that we get the best return from the money that we
are investing in these areas by looking at how we can do it in
a much more directed way and a much more targeted way than we
do at the moment, breaking out of the kind of departmental role
that each puts forward their departmental case and nobody takes
into effect the consequences and whether it might be better to
do it in a more directed approach. The Social Exclusion Unit,
who I know you are taking evidence from, will want to talk more
about that joined-up approach.
839. How are you addressing the issue of match
funding for the European objective one and two programmes so that
to achieve the prosperity you spoke about the maximum use of European
funds can be gained without putting at risk the needs of other
parts of the regions involved?
(Mr Prescott) Hilary has been very involved with the
Department of Trade in dealing with these matters. She will give
a response to that. As you well know, the Commission did not accept
our approach to the assisted areas in that. We were trying to
target them in the way I have just been describing. I think personally
they are wrong about that and other countries agree with us but
at the moment that is the rule. We do need to target the money
much more effectively than we do at the moment. As for match funding
and those other issues, Hilary has been at the DTI.
(Hilary Armstrong) There is already substantial work
going on on that. That is almost completed now and that therefore
will be completed before the Urban White Paper comes out. We do
not see that as a specific issue for the Urban White Paper. What
we have been doing is working with all of the agencies who are
capable of being involved in matched funding, from the Highways
Agency all the way through to RDAs, to looking at how other mainstream
funding is used in order to make sure we get the right balance
between the European funding and the matched funding. We have
been working with each of the areas, particularly the objective
one areas initially, to get that programme in place. We will be
seeking to do that with them over the next few weeks, to make
sure that we get a robust case with the European Union which will
make sure that they can go forward. On the other hand, as you
say, we are not then jeopardising opportunities in other than
objective one areas.
840. What is the most important part of the
Urban Task Force report that you have not yet addressed?
(Mr Prescott) That we have not identified?
841. That you have not addressed.
(Mr Prescott) We are addressing them all but we have
not come to conclusions on them all.
842. That you have not acted on?
(Mr Prescott) We tried to do them in the order of
the 25 per cent approximately that we have implemented of the
100 recommendations such as, I would imagine, Liverpool, the Urban
Regeneration company, we think is quite important. We have acknowledged
that and that is one of the pilot studies we have underway at
the moment. A whole range of proposals on fiscal instruments is
something we have to argue with the Chancellor. I know this Committee
is concerned about it as well. You have talked to the Treasury
about it here. I think we have dealt with those things that we
can implement immediately and a proper response and how much more
we can implement will be given at the time of the White Paper.
Chairman
843. This whole vision of the White Paper surely
should be about a 20 year programme and yet the spending review
is only going to be for three years, is it not? Is it not a little
illogical to hold up the White Paper vision just to see what you
can spend in the first three years of it?
(Mr Prescott) It is horses for courses in a way. It
would be very good if all of us agreed that if you agree something
now for the public expenditure it will be going in 20 years' time.
I suspect politicians may disagree about that. We have a different
view between the parties and that is what limits the period of
time you can guarantee for. That does not mean to say that we
do not rule it out. In areas where there is a tremendous amount
of capital expenditure, it is important. The Ministry of Defence
is an important area. You cannot just do something for two or
three years and governments have to recognise that and do. We
hope to do that on the transport policy. Of course, we are looking
at a ten year programme as to what the capital investments are.
If you look at our housing programme, we are settling in for ten
year programmes. We have different timetables but the finances
are never going to be guaranteed much beyond three years, though
if you look at the transport paper again it does talk about a
road programme over six and seven years. There are always these
conflicts but we have to live with them. By the way, it was quite
revolutionary to go to three years. Before, it was one.
844. The Urban White Paper: how long a timescale
are you looking at that for? More than three years?
(Mr Prescott) Yes. We have to. If you take the housing
programme we are planning for ten years, that is going to be more.
That is an important point. If you are looking for a reduction
of differentials between north and south and the internal divisions
which are clearly about standards of living, equality, jobs etc.,
you clearly have to take a longer term framework; but for decision
making you have to work with what is practical.
(Hilary Armstrong) The spending review is relevant
not just in terms of how it will be allocating money over the
next three years, but in some of the ways that we are looking
at how we spend money and how we actually organise money, in a
sense. For example, this year in the spending review we have spending
groups which are interdepartmental and which are looking, for
example, at spending in deprived areas and how we make that more
effective. None of us expects that we will get all of that right
within three years. We need to therefore be setting the programme
now as to how we change spending in order to meet our overall
priorities. That is a major theme of the spending review this
year and that is why, in looking at the Urban White Paper, we
have specifically wanted to do that in line with those considerations.
They are not simply considerations for the next three years; they
are considerations that will really move much further forward.
If we are able to move them forward, that will enable the work
that we want to do in terms of urban renaissance to be, I believe,
much more fruitful.
Mr O'Brien
845. There is one question I would like to put
arising out of the statement when you expressed concern over suburban
areas. I agree with you. We are finding that some of our town
centres in suburban areas are now becoming deprived areas because
out of town shopping is creating problems. Have you any specific
ideas as to how we can reinvigorate our small town centres to
bring back some of the need for commerce and trade in those town
centres and to stop them from dying altogether?
(Mr Prescott) One of the most important areas was
that PPG6 was changed by the previous administration. That was
the business about supermarkets and enforcing forms of sequential
testing. You had to say what is the basis in town. There had been
the massive growth of supermarkets outside towns. That was an
important step forward. We hope now, with the commitment in the
housing policy, to begin to develop brownfield sites largely within
the towns themselves so the housing area is important. New Deal
and the other development areas that we have just announced, are
largely in the towns in an attempt to make them more attractive.
Of course, there are fiscal frameworks which you can operate.
Whether it is VAT or Stamp Duty or whatever the Chancellor may
be talking about in the recommendations from Rogers, there are
ways that we can go forward which recognise that we want to rebuild
our town centres and our urban areas and reduce the outflow. People
leave towns not because somehow they want to live in the countryside.
I am sure people would enjoy that, as beautiful as it is, but
I think the real problem is that some people leave because the
education is lousy in the cities or they fear getting mugged or
the crime. All those kinds of reasons force people out of towns.
We have to change that. What is absolutely critical to my mind
is the built up environment of an area. If you walk in, you see
it and it is a nice area, you say, "That is lovely; I want
to stay here". That is why they come to marinas in the middle
of towns now because the built up environment is nice. If you
go to areas like Boston and you go outside that immediate area,
it is still a lousy area and people want to get out of it. That
is the challenge. How do we make our towns and cities more attractive?
I believe people want to live in towns and cities and our proposals
are designed to achieve that.
Mr Gray
846. You mentioned VAT there as if that was
something which you were strongly in favour of in terms of encouraging
development on brownfield sites. No mention in the budget?
(Mr Prescott) No mention in the budget. That is right,
but what he did talk about was whether there might be differential
pricing between greenfield and brownfield. He highlighted it in
regard to Stamp Duty.
847. You mentioned VAT in your evidence.
(Mr Prescott) There was no VAT. There was a proposal
by Rogers and we are arguing with the Treasury about these matters.
I think the fiscal framework can make a difference in encouraging
development. I want it to be in the towns and I think there is
a positive role for it. I welcome the fact that the Chancellor
was prepared to look at that. I think it was confirmed by Mr Timms
when he came before the Committee here to make it clear there
is a role for that and I will be pressing hard like everyone else.
Dr Ladyman
848. It costs more to develop a brownfield site
than a greenfield site. If you develop in a deprived, urban area,
you are going to make smaller profits on your development than
in a prosperous area. Why would developers do either of those
things without some form of incentive? What sort of incentives
are you thinking might be appropriate?
(Mr Prescott) I think sequential testing is quite
important. It certainly stopped the growth of the supermarkets.
If you have the land there in the towns, then fine; redirect them
to it and say that is the requirement. We already have some builders
now saying, "If you can give us the development in the greenfield
sites, we will do so much in the town as well". There are
a number of ways they are doing it without the incentives but
I do think incentives may well play a part. If you look at the
cost of actually getting rid of the problems associated with brownfield
land, the kind of poisoning, it costs about £50 million.
It is a very expensive operation, I agree, but we have to seek
to tip the balance. Some of it is by planning. Some of it may
be by fiscal framework and incentives. We are looking at a whole
range of options which indeed Rogers pointed out and we will have
to give a response to it at the time of the White Paper.
849. You seem to be stressing the stick rather
than the carrot.
(Mr Prescott) All of them play a part. Stick and carrot
is like black and white. It is hard to get the balance. Developers,
if they find that people want to live in the city, there is an
incentive because the demand is there. What we have to do is play
that part on demand as well. Some may be by planning. You may
call it a stick but it is a very useful type of tool to get a
proper balance.
850. The European Union appears to be bringing
in the question of the legality of Gap funding and that brings
under threat things like the Partnership Investment Programme.
What do you feel about that?
(Mr Prescott) Hilary has been negotiating on these
matters.
(Hilary Armstrong) Yes. I have met the Commissioner
twice on this and we have now withdrawn the PIP programme. We
are negotiating with the European Commision alternatives that
will also be considered during the spending review. We think that
the European Union has failed to keep up with the innovative ways
in which public/private partnerships work in this country and
in other countries. We have now negotiated a very good transitional
scheme for PIP over the next two years, but we are considering
alternatives and we are looking at how, in the long term—and
we have the agreement of the Commission to do this—we can
look at how on the one hand we can uphold state aid but on the
other hand encourage public/private partnerships. In this country,
public/private partnerships have been very effective in bringing
land to the state where it can then be developed from contamination
and so on. To assemble all of that land in the public sector and
for the public sector to get it to that stage will be initially
more expensive, but we also think there are other things that
we will lose through that. We are looking to negotiate and we
have support from other European Member States in the longer term
to try to unravel this.
851. I suspect that around the country there
are probably quite a few projects on hold while these negotiations
go on. Can you give an indication of timescale?
(Hilary Armstrong) All the projects that have been
negotiated, that were in the RDA plans and so on, will be carried
through in the transitional scheme. We are now looking at how
we will fund new projects.
Mr Cummings
852. During the course of the inquiry, the Committee
has been told by developers, investors and public agencies that
what they need is what they have coined to be called tools, not
rules, a term coined by the developers, who believe that there
are too many rules about what developers should and should not
do. If you subscribe to that premise, Secretary of State, what
tools do you think the government could provide to further urban
development?
(Mr Prescott) I do not subscribe to it.
(Hilary Armstrong) There has to be a balance. We live
in a small country and we cannot simply say, "Develop as
you like" because we have to think about the sustainability
of development. We have to make sure that development is both
good for people living there and also offers competitive opportunities
for companies to thrive and so on. We are not like other countries
that have vast swathes of land, where they do not really have
to worry about those things in quite the same way. The Secretary
of State has to worry about it when he goes to negotiate air quality
targets and so on, but we have to worry about it all of the time
because of the nature of our land. The aim of the government is
to get a balance between the ambitions of the developers and the
needs of sustainable development too. That means we have to have
some rules but we also want to get effective development within
that framework. We see the Urban White Paper as our opportunity
to be clear about the framework but also to develop a framework
that will encourage competitive development that will bring people,
jobs and opportunities back to our cities and back to our inner
cities but in a way that is sustainable. You cannot do it without
thinking about transport, without thinking about accessibility
and all of those things.
853. Perhaps my second question is now superfluous.
I was going to ask which rules you are proposing to abolish.
(Hilary Armstrong) We are constantly looking at that.
The better regulation task force from the Cabinet Office continually
gets on to us about what rules we can get rid of and we are, with
local government through the central, local partnership with local
government, looking at what we can get rid of, but we have to
be sensitive on that.
Chairman
854. Could you give us one example?
(Hilary Armstrong) Off the top of my head, no. I will
write to you about it.
Christine Butler
855. Urban regeneration companies were recommended
by Rogers in the task force report, with the first recommendation
of the government to actually implement. You have set three up:
Sheffield, Liverpool and Manchester. I know it is early days yet.
They were to coordinate area regeneration within cities. Could
you tell us how you think they are getting on and what your view
of them is at present?
(Mr Prescott) Rogers had a different view to ourselves.
We tried to have a broader approach to these regeneration units
and allow the people in the area to decide how they should work.
They are pilots and we will certainly be reporting on them and
perhaps giving first observations when we get to the White Paper.
856. You say you are taking a different approach?
(Mr Prescott) I was trying to recall. I think there
is a little bit of a difference between us on that but not in
principle.
(Hilary Armstrong) We decided to get going on these
straight away and to set up urban regeneration companies. Indeed,
there was one set up in Liverpool the day that the Urban Task
Force reported. I was involved in the setting up of the one in
east Manchester and there has now been one set up in Sheffield.
They really are looking at how they can pull together all of the
activity in an area to really give it some emphasis and some sense
of direction and identify, if you like, the things within that
area that need to work and need to change. They are pilots. Rogers
probably saw that there was going to be money attached to these.
At the moment, they are simply frameworks for activity. We expect
both Manchester and Liverpool to come forward with their strategies
for consultation round about June. Once they have done that, we
will have a much better idea of how effectively they are working.
People from Liverpool and from Manchester tell me that it is going
reasonably well. I know your own adviser is conducting the evaluation
of the three pilots. We cannot say too much because we cannot
preempt the evaluation but we do think they are working reasonably
well.
Mr Brake
857. How important for the urban renaissance
are restrictions on the use of greenfield land for housing or
other uses as proposed in PPG3?
(Mr Prescott) In housing, the targets we have set
for ourselves in the use of land are to get a better, more efficient
use of it. We define it between the brownfield and the greenfield
sites and set a 60 per cent target we set for ourselves, and obviously
the higher density levels for the building of the houses in those
areas will enable us to use land much more efficiently. There
will be use of greenfield sites. There always has been. When we
talk about 60 per cent, 40 per cent is being built on greenfield.
Before that, it was something like 50 per cent plus used of greenfield
sites. It is a combination of that, though with our sequential
testing there is the desire to see that first choices are to build
within the areas within the towns and that is what we are trying
to do.
858. Given that PPG3 is going to allow for higher
densities, why have you not adjusted the 60 per cent target to
a higher target?
(Mr Prescott) First of all, nobody knew just how much
land there was or whether it was brownfield or greenfield, so
the first thing we did was to set up a land register. I think
Lord Rogers gave us some views on the provisional figures we have.
We hope to be able to publish those figures shortly. Therefore,
the first thing is to find how much land there is. Even on the
basis of that, we still think 60 per cent as a national average
is a better way of doing it. There is some controversy at the
moment as to whether you can achieve that in some areas, but if
you look at the East Anglia report, when we have looked at housing
and development there, we have set it at 50 per cent for brownfield
sites because some obviously have far more possibility for utilisation
of brownfield sites than others. Within an area, you can get more
of that kind of brownfield site in London than you can in some
of the south-east. You have to make a judgment. We think 60 per
cent, the highest target anybody has ever committed themselves
to in government, is achievable and we are in the process of implementing
that but, as we have said, we do have to take into account the
density of the land take that is used. When you say it is higher,
that is right of course but 24/25, which is the average in that
area of density at the moment, has been rather low. We can get
good quality housing, good environment, good communities with
higher densities. I do not have to just believe that. If we look
at all the housing in London, where there are Georgian terraces,
you could be talking about 100 or 120 plus, if you like. Even
the Greenwich site is a density of 80 so it is possible to get
a good built environment to give us housing and a more efficient
utilisation of the land.
Miss McIntosh
859. The Urban Task Force is recommending that
65 per cent of money raised publicly, locally, should be spent
on transport. Yet the research shown by another party in my own
area has shown that the Government has cut public expenditure
in transport by eight per cent.
(Mr Prescott) You have to differentiate between your
first question about local and the second one is really about
national resources. We can go into an argument about resources
either in this Committee or the other one, but those national
figures are affected by how much you reduce subsidies, for example,
on the railway, which I think was your policy in the government
you were in. That would naturally have led, whether you were the
administration or us, to a cutback in those resources. We have
switched the priorities of those expenditures, if you like, but
what is important to recognise is that local transport has more
than it has ever had before, the £800 million for the local
transport plans. The rural areas you represent now, £160-odd
million, which I know you welcome, and something like 1,800 new
buses, so if you took the figures for the question you are mentioning
of how much resources are going to the local area, that has been
an improvement. There is another problem I have. York has been
highly successful in getting people to visit York and use car
park and ride. I think that is a very good example of a use of
land, but as you know if they are to get that better facility
they have to build on a greenfield site. I do not know how you
feel about that, but that is the decision I have to have if I
want sustainable communities.
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