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Mrs. Gilroy: When I was elected to my constituency, I had the doubtful privilege of inheriting from my Conservative predecessor the poorest ward in England. In Plymouth, the disparate projects to which the hon. Gentleman refers add up to the fact that unemployment in the city has returned to the average figure for the first time in 20 years. Will he clarify how the cuts of £55 million, which would result from the £16 billion

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package of cuts proposed by the shadow Chancellor, would be spread across Plymouth's greatly valued public services and regeneration projects?

Mr. Loughton: The disparity and disjointedness of the various initiatives has posed an enormous problem. The hon. Lady does not know what the budget for urban regeneration will be under the next Conservative Government. If she waits, she will be rather pleasantly surprised.

The Government's performance and innovation unit stated that the clear evidence from those on the ground is that there are too many Government initiatives causing confusion, not enough co-ordination and too much time spent negotiating the system, rather than delivering. I shall continue to deal with that record. More families now live in poor households than did under the previous Government. Some 14.25 million people live in households with less than half the average income, which is more than double the number in the early 1980s and an additional 500,000 on the high point in 1992-93, when the country was in recession.

Despite the Government's lofty claims about eradicating child poverty, there is no evidence for any reduction in number of children--there are 4.5 million--who live in households with less than half the national average income. One million older people have no income other than state benefits. More people live in temporary housing. The number of priority homeless has risen by 3,000. In London, the number of priority homeless has risen by 14 per cent. The number of families in bed-and-breakfast accommodation has risen by 51 per cent. since 1997. The numbers of low weight births, problem drug users, excess winter deaths and people in young offender institutions have all risen. According to almost any measure of poverty, social deprivation or social exclusion, the Government's record is not impressive, but they do not like to hear that.

Mrs. Gilroy: Will the hon. Gentleman give way?

Mr. Loughton: I want to make progress; the hon. Lady had a good shot before.

On rising crime, making the streets safe must be the prerequisite of any sustainable urban regeneration project, but the figures for the inner cities are most worrying--3,000 fewer police officers and hundreds of early releases are inextricably linked with the fact that crime has risen by 4 per cent. in Greater Manchester; by 12.6 per cent. in the Metropolitan police area; and by 5.2 per cent. in Merseyside, partly because of the exodus from our cities of about 90,000 people a year.

The Government's record is not impressive, and it is right that we should analyse the details of the grants under the no less than 27 headings and sundry titles to discover whether the money is being well spent.

The Joseph Rowntree Foundation report, published earlier this month, included evidence to show that regeneration attempts are being undermined by a breakdown in trust between residents and service providers, especially on large, problem council estates. It is little wonder that the Environment Select Committee said in its 11th report in July that the quality of services provided to urban neighbourhoods is very poor, despite the large amount of mainstream funds spent.

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How will the Minister judge the success and the value for money of the urban regeneration grants? The pre-Budget report announced the possibility of up to 12 new urban regeneration companies based on three pilot schemes, but gave no indication of how those schemes were performing or on what criteria they were being judged. How much of that policy can be achieved given the absence of any primary legislation, especially to give urban regeneration companies proper teeth, and given the absence of a renaissance Bill, any urban priority area legislation or any compulsory purchase measure?

I want to ask the Minister some more questions on the Pre-Budget report because its detail does not bear close scrutiny. On the proposals for zero stamp duty in disadvantaged areas, when will she tell us what constitutes a disadvantaged area? Where are they? Will they be established on a ward basis using an index of deprivation? If the amount of stamp duty exemption is not capped, how much will it help residents in larger, higher value homes?

Last week, during a meeting of the Select Committee on Environmental Audit, the Financial Secretary seemed to think that the zero-rate stamp duty exemptions were aimed at business, with purely a knock-on effect on residential property, yet everyone knows that the stamp duty take from business and residential properties is split roughly 50:50.

Last year, 660,000 properties were sold worth less than £60,000--the sum at which stamp duty kicks in. That represents more than 40 per cent. of sales. Without those in London and the south-east, the vast majority of property sales last year did not qualify for stamp duty. So how will the measure help most deprived areas rather than act as a kick-back for people living in houses worth £500,000 or £750,000 in Islington, Hackney and such places?

There are similar question marks over certain measures that, as my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) said, sound good and can be welcomed in principle, but in practice do not amount to much more than a row of beans. Let us consider regional development agencies. It is true--we have been clear--that we do not believe that RDAs add value. Typically, between 75 and 80 per cent. of their budgets are purely for distributing single regeneration budget spending.

Urban regeneration happened long before RDAs came on the scene. From 1981 onwards, there were urban development corporations, enterprise action zones and everything else. RDAs are not essential. So, I assure the hon. Member for Leeds, Central that we would first save the £70 million of RDA administration costs and recycle it into sharp-end regeneration and spending. Their powers would be devolved to local authorities or the Government offices of the regions, as before.

Mr. Bennett: Will the hon. Gentleman give way?

Mr. Loughton: If the hon. Gentleman does not mind, I should like to make some progress as I am very short of time.

There is a serious question mark over the distribution of the sixth round--in the summer--of single regeneration budget funding, which the Minister has failed to address. Of the top 10 Labour-held marginal constituencies involved in a bid under SRB--six in August--why did all 10 receive their bid, yet nine of them contain no ward

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among the 10 per cent. most deprived on the normal deprivation index? Indeed, only one contained a local authority eligible for neighbourhood renewed funding. The hon. Member for Bath (Mr. Foster) made that point, but the answer is rather more sinister than he suggested. Will the Minister assure us about the balance with which the funds are distributed?

I should like to raise many other questions about the way in which funds from the grant will be used, such as those for the ordnance survey--even though we are still awaiting last year's results from what is supposed to be a profitable organisation. We could consider the way in which money will be spent on national parks grants and on the Housing Corporation, which has failed to meet its own targets over the past three years and continues to do so.

I shall end as we started, with reference to gap funding. Friday is the first anniversary of the European Commission's absurd ruling that the partnership investment programme was in breach of state aid rules. As the Select Committee report rightly says, the decision

The report concluded that the Commission's decision was "illogical and ill-considered" and that it brings

As all hon. Members have said, the PIP was highly successful over six years in providing seedcorn--gap--funding of £1.1 billion, which levered in £2.5 billion from the private sector for remediation of land, refurbishment of buildings, site servicing, new build and so on by providing the minimum necessary to allow projects to go ahead. Those projects would not otherwise have done so. The programme was ruled against because it could provide a windfall to the owners of land, represented a subsidy to developers and is a subsidy to an organisation that rents the new premises--or so we are told. As one hon. Member has said, it was clear that the Commission just did not understand what it was doing.

Now, not only are planned schemes at risk, but the good work in many areas may be undermined. The decision will have a serious effect on RDA budgets, as has been said. The 60 per cent. brownfield target, which the Government are far from reaching but we are constantly promised--the actual target date is not until 2008--will now surely be impossible to achieve and can only fuel further pressure on greenfield sites.

How final was the decision? How are we to get out of this mess? How are we to finance the smaller bread- and-butter projects of English Partnerships in particular? How on earth was this allowed to happen?

In the words of the report, the whole issue has been handled abysmally. The Competition Directorate has decided effectively to abolish the most efficient, effective and imaginative regeneration scheme in the European Union. Will the Minister give the whole House--we are all interested--an up-to-date account of the way ahead and what effect the judgment has had on the estimates to which we are agreeing today? I hope that she will also answer the other questions raised, because many more questions have been asked than have been answered by the Government on their record on urban regeneration.

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