Examination of Witnesses (Questions 1-19)
RT HON
JOHN PRESCOTT
MP AND MR
RICHARD MCCARTHY
7 FEBRUARY 2006
Chair: Can I welcome you, Secretary of
State, and thank you very much for coming. If we could start off
this discussion about the Bristol Ministerial Informal, would
you like to explain to what extent you felt that the Bristol Informal
contributed to the UK's goals for our Presidency of the European
Union and to what extent it contributed to the priorities of your
Department?
Q1 Sir Paul Beresford: Before you start,
firstly I would like to welcome you, it is really good to see
you here. We would welcome you on more than this occasion. You
have obviously got quite an audience of support behind—
Mr Prescott: I do not know about
support but it is certainly an audience!
Q2 Sir Paul Beresford: I am sure
it is support. I feel I owe you an apology because we should be
using this as an opportunity for you to respond to our report
and I wondered if you would be willing to come on another occasion
to respond to our report?
Mr Prescott: I am willing to come
on any occasion, frankly, and that raises the point about coming
to this Committee. Apologies for last time when, as I told the
Committee Chair, I was touring about five European countries at
the time because it is a stressful job the Prime Minister has
been given, and if I caused any offence I do apologise for that.
Indeed, Chair, I think we met in October when I explained and
gave you my apologies personally and I said that I would be available
to come to the Committee when it calls on me to do so. For any
offence I may have caused in that I do apologise. I think you
would expect me to give a full report and response to the Committee
in the proper way. You have heard my Permanent Secretary say that
and he will do so and I am quite prepared to come along as well.
I hope you will have Mr Clover from the Telegraph to come
and explain the breach of your embargo as well and some of the
terrible things he said. We did not say that the report was rubbish,
as reported in that paper. I know you are pursuing that matter.
I would love to have the opportunity to come along and explain
how we feel about the report. It will give us a chance to give
a proper comparison between what happens in my Department and
other departments which I do not think you take fully into account.
That is the opportunity of reply and response and certainly, Chair,
I will take that opportunity when it comes. Perhaps if I can address
myself to your question now.
Q3 Chair: Indeed.
Mr Prescott: First of all, may
I introduce Richard McCarthy, Director General of the Places,
Planning and Communities Group in my Office. The Department's
policy, as you know, is to develop sustainable communities and
the Bristol Accord was very much in line with that in regard to
the European dimension. At that informal, as you know and we were
grateful for you attending that conference Chair, 29 nations discussed
the whole business of new ideas, new finances, new skills, new
ways of governance to bring about sustainable communities. As
you know, the Department, like the other departments in government
and the communities themselves, tend to have a silo approach to
this. They all make their own decisions. In fact, in my Department,
as you have pointed out in some of your reports, we have the difficulty
of co-ordinating that strategy across government and achieving
those targets. What we were trying to do is to say can we get
the Europeans to recognise that sustainable communities should
be part of the economic policy. As you know, they have a policy
for jobs, which is the Lisbon Policy; they have a policy for environment,
which is the Gothenburg Agreement; and indeed in Warsaw they talked
about the level of governance. What the Bristol Accord was doing
was trying to bring these things together to see if we could make
co-ordinated decisions both in the Commission as well as in governments.
That requires us of course to change the regional policy to a
certain extent and, as you know, the Commissioner came down to
Bristol to talk about a new approach on regional policy that recognised
that urban development and cities were a major part of it, and
that global development was hitting cities as much as it was the
regions themselves. I think what we got accepted at Bristol was
that urban policy should now be part of the cohesion and structural
funds that we have got (known as the regional policies in that
sense) and that is a major part now and a major change. We have
looked at new kinds of skills with the new academies that we have
suggested that we have in Britain and we are working to achieve
better skills and governance in that and a new form of finance.
The European Investment Bank, as you know again Chair, came along
and developed some new financial frameworks and instruments, both
for public and private partnerships, so we were bringing new forms
of finance, new forms of governance, new forms of sustainability,
which means jobs, and we called it the Bristol Accord. I can go
into a lot more detail and questions will allow that, but that
was our general approach. We think that was beneficial for Britain,
certainly beneficial for Europe, and something that we want pursue.
Indeed, I think many of the experts for that are meeting today
in my Department now looking at how we take this programme forward.
Chair: Thank you. Martin?
Q4 Martin Horwood: Deputy Prime Minister,
thank you very much for coming along. We do appreciate you spending
time to come and talk to the Committee. Just on the subject of
the benefit of the Bristol Ministerial Informal; do you think
it is really the responsibility of the Deputy Prime Minister or
of the European Union to deliver sustainable communities in this
country?
Mr Prescott: I do think it is
both because so many of the policies in Europe impinge upon our
economic development, whether it is regional policy, whether it
is agricultural policy, a whole range of them affect economic
growth. As we know, particularly with Objective 1 for example,
there is a European policy that affects very much what happens
in Cornwall or other areas like South Yorkshire and Liverpool,
and so it is important for us to recognise that it is sustainable,
that growth must take into account environmental considerations,
that we should be looking at the jobs, the training, and recognise
that global development will affect cities, so I think to that
extent it is absolutely important we bring the European and the
national policies together, and that is what we are trying to
do.
Q5 Martin Horwood: If I were to be
unkind I would say that reading through many of the detailed policies
in these documents, they look like policies which under a principle
of strict subsidiarity could have been carried out at local or
national level, which suggests that perhaps a great ministerial
conference on this scale was something of a waste of European
taxpayers' money, especially as Austria and Finland seem to be
prepared to do without them altogether during their Presidencies.
Mr Prescott: If I were unkind
I could reply this way: if you look at what is happening in the
resources in the agricultural funds and in the regional funds,
all of these affect economic growth in this country, and I think
it is right for us to recognise how we can best use that money
and how we can get it more effectively used. In the past, the
regional policy largely concerned itself on whether you were a
part of the country or a part of Europe that had a below 75% GDP
level and that roped all the structural funds in. Now we have
decided to make a change that affects Britain much more. The cities
which are very much affected by global economic development can
now be part of those resources. If you say that we should get
rid of the agricultural funds and the regional funds, that is
an argument you can have, but whilst they are there we are best
off using those funds effectively.
Q6 Mr Hands: Secretary of State,
it is just a question really about the Bristol Accord and linking
it back to our Committee's report. Two of the things that we said
in the report were, firstly, that the Department is often guilty
of an unjustifiably favourable presentation of its achievements
and, secondly, there is too much focus on a single case study,
in particular the Thames Gateway. Looking at the Bristol Accord,
I was wondering if you would take a look at the other end of London
and some of the developments that are going on there just to see
if Britain accords with the Bristol Accord. You talk about environmentally
sensitive buildings, it being fair for everybody, good transport
services, responding to the challenge of social segregation, and
then you are putting up 37-storey and 45-storey towers along the
Thames in the west of London that really satisfy none of those
requirements, so how can we lecture or talk to our European colleagues
on it when in west London it seems that your policies are entirely
at variance with your own Accord?
Mr Prescott: That seems a silly
question, quite frankly. Are you actually saying to me that whether
a tower gets built or a building down on the Thames gets built
is going to affect European policy? I do not think so at all.
Q7 Mr Hands: What I am arguing is—
Mr Prescott: Can I just give an
answer to your question. The Thames Gateway was seen by many of
the people who came to the Bristol Informal and also the high-level
meeting before it and they were very impressed with it. They also
saw what we have done with the Northern Way. There are many things
in regional economic development that we have been doing up and
down the country which are generally welcomed by all parts of
the country. There can be an argument about the buildings and
architectural design, et cetera, that comes from building these
towers on the Thames, and I gave my judgments in the planning
inquiries and people can make a judgment about that. It has produced
quite a lot of social housing as well, which is quite important.
In the end, I think that is the point that is made in your report
about levels of efficiency, and we will come back to that when
the Committee returns to it.
Q8 Mr Hands: But is it justified
to completely override local councils in that way? Surely that
is not in accordance with your own Accord which talks about sustainable
communities that have community support? I think it is a key part
of it.
Mr Prescott: Canary Wharf was
a classic example in the previous administration where they did
not talk with anyone, but leaving that aside—wait a minute.
We are still using urban development corporations. A massive amount
of consultation is going on on both on the Thames Gateway and
on the Northern Way. The development of regional development agencies
in all the regions (that I brought in) has had a major effect
on developing regional economies.
Q9 Sir Paul Beresford: I was listening
to your interesting comment about bringing finance in from Europe
and the European involvement in it. Is part of this plan the reorganisation
that you have for local government? There is a feeling that local
government in England is going to be back into unitary authorities
which will be larger than the district ones now and that your
intention is to remove the county councils and move things up
to the regional assemblies, strengthening them, which would appear
to fit in with the pattern of what you have just told us. Am I
correct?
Mr Prescott: No, I think what
we have said about that is we do believe in unitary government
(so did the previous administration when you were a Minister in
that department) and sometimes it meant that county councils were
abolished, again as the previous administration did. What we are
not saying, as indeed the previous administration did, that we
will abolish you. We are saying we will give you an opportunity
if you want to make a decision to become a unitary authority and
we will leave the choice with you, and that is what I think my
colleague has been putting forward as a proposal. We think the
unitary form of government is a good way of government and if
the people wanted it in county council areas then we are quite
prepared to consider it. In regard to the regional assembly issue,
yes, we are making more and more decisions on a regional dimension.
It is done with regional offices at present which, as you know,
the previous administration set up. I believe that Regional Bodies
should be on elected representation. We have not reached that
stage yet but I have no doubt that democratic accountability requires
a regional structure. However, I only give you my view. At the
moment we are looking at the local government structure and organisation
and saying to people who live in the unitaries and the counties
if you want to have a unitary then you can have a ballot[2],
discuss it with the people, but if you want it, fine. What is
wrong with that?
Q10 Sir Paul Beresford: If they do not
want a unitary authority and they wish to stay the same—?
Mr Prescott: They will vote presumably
for that. If you look at the regional ballot that we had in the
North East, people had the vote as to whether they should be unitary.
Some voted for it and if we had gone ahead with the regions they
would have been unitary. We let the people make the decision.
That seems to be fair enough.
Q11 Sir Paul Beresford: Will it matter
because in fact we have had a vote on at least one regional assembly
and it was fairly decisively rejected?
Mr Prescott: It was.
Q12 Sir Paul Beresford: But you still
seem to going down the same line. Is it just try and try again?
Mr Prescott: I hope I can still
keep to that view although it has been rejected at the moment.
Welsh and Scottish devolution was rejected and it took 20 years
before they came back to that decision. I can still hope and I
believe that is what will happen. What I do not like, but inevitably
it is happening more and more, is regional decisions being taken
which are less and less accountable. You can ask yourself whether
you want democratic accountability, Paul, but I belong to the
school that believes there should be democratic accountability.
At the moment there are regional assemblies which I notice even
in the areas that are Tory-dominated they have not chosen to get
rid of them so there is some semblance of accountability though
it is indirectly appointed.
Chair: Can I please return to the European
agenda and bring in Alison.
Q13 Alison Seabeck: You said in your
memorandum that the UK was "required" to ensure continuity
with existing work on the European Urban Policy Area. Owing to
the short periods for which the Presidency of the EU is actually
held, this is not straightforward, particularly when you are grappling
with issues like unemployment across the EU. What is your understanding
of the nature of this requirement and how will you try and ensure
that Austria and Finland take forward the requirement for continuous
policy development given that they are saying they not intending
to hold informal ministerial meetings?
Mr Prescott: I think that is probably
true of Austria, perhaps not of Finland. That is a very important
point. My experience of running with the European informals was
the time when Britain had the Presidency in 1998 and I called
the two committees of transport and environment together, which
was the first time it had been done, and what you quickly realised
is that six months is not sufficient time to get decisions in
the Community, so the best thing is to try and have what I call
the "baton". We started the environmental issue off
against the background of Kyoto. We got the agreement for decisions
on Kyoto in the Community but it has to pass from Presidency to
Presidency. In reality you can either start something in a Presidency
or finish it. You very rarely start it and finish it. I asked
the Dutch Ministry in their Presidency about 12 months ago, "Why
don't we do something about urban development within the regions?
Why don't you start it?" and they developed what was called
the Rotterdam Acquis, which for the first time developed the idea
of cities and urban policy. We will continue it as we have done
with the Bristol Accord and at that Bristol meeting we had agreement
that we would take it right through the next Presidency which
begins with the Austrians, who said they are not going to have
informals, although their director generals (as they call them)
are still going to meet on that matter, and then there is Finland
and then Germany, and Germany has agreed in 2007 to have a report
back on this whole business to see how far we have got. That is
why they are meeting in my Department today. There is continuity
and it stretches across a number of Presidencies and we designed
that from the beginning. We started it with the Dutch who agreed
to do it. We have carried it through in the Bristol Accord and
we will go on to the Germans and I think what we will see there
is a major development in the thinking of sustainability that
cities and urban development, if you want to do something about
growth and jobs, is a very important issue.
Q14 Alison Seabeck: You clearly identified
in advance of our Presidency something that you wanted to take
forward and obviously with the Dutch and the others you are progressing
that through, hopefully ending up with Germany.
Mr Prescott: They are still playing
a part in it, yes.
Q15 Alison Seabeck: Did either the
Finns or the Austrians come to you in advance of their Presidency
and say, "There is something we would like to start discussions
on at this point that we might want to take forward," or
are they very much running with the existing agenda?
Mr Prescott: I think what happens
with Presidencies is they have to decide how many informals they
are going to have. We had quite a few and it depends on the scale
of organisation and resources that you have available. Obviously
there are more in the bigger countries than the smaller ones.
The Austrians told us they definitely wanted to be involved. They
were not sure whether there would be an informal because of the
difficulties and the things they faced, but the Finns are certainly
going to do it, followed by the Germans, and we agreed that continuity.
Not only did we agree, everybody put a certain amount of money
into the pot to develop the idea and keep it going, so I am quite
confident that this idea will develop and grow. It is an important
and major change in the thinking in the achievement towards sustainable
communities.
Alison Seabeck: Thank you.
Q16 Martin Horwood: I am sure you
are right to say that the urban agenda is very important and the
Commission working paper we received talks a lot about helping
urban areas to realise their full potential. We recently heard
evidence from the West Midlands Development Agency who said that
your market-led housing supply policy risked overheated areas
of high demand. They have mentioned the Vale of Evesham and I
have mentioned Gloucestershire because that is where I come from.
They said that risked encouraging out-migration from the cities
and undermining the agenda of urban renaissance. Is that not in
contradiction to the policies set out here?
Mr Prescott: No, it is exactly
the opposite to what has happened in what we have seen develop
in our cities now. I think that has been one of the most successful
parts of our development. If you look at the cities, when we came
in we developed the urban development agencies and we took certain
planning decisions, and now we know that more people have come
back into our cities. We have done quite a few reports on it and
it has been confirmed by a great deal of evidence; more people
have come back to the cities. There are a couple of reasons for
that. The first is the level of economic development which has
been sustained for a good period of time which has been very attractive
for jobs and growth in cities. Secondly, I think the fact that
I took action to reverse the policy passed by the previous administration
on out-of-town shopping. I said, "Right, it will be in the
cities", and what we have seen is a 30% increase in retail
inside our cities. That came from very direct decisions and we
have got more people in work, more jobs, more economic growth;
it is a damn good policy.
Q17 Martin Horwood: I would agree
with you about out-of-town shopping. I think that is something
on which you should be congratulated, but is the future policy
that is now being mapped out for housing supply encouraging the
development of urban extensions on greenfield sites? It certainly
seems to be the impact that it is going to have in Gloucestershire,
which seems to be pandering to those market forces in a way that
you did not do for out-of-town shopping?
Mr Prescott: If I remember, and
I may be wrong about this, is there not a major development in
Gloucester with the British Waterways Board and that whole section
of housing inside the town itself?
Q18 Martin Horwood: Yes.
Mr Prescott: There is quite of
lot of this happening. If you go to Birmingham or you go to Sheffield,
one of the first things I did was to relieve the pressures that
were on the British Waterways Board to get them out of our public
finance rules so that they could get together with the private
sector. The major developments we are seeing in our cities are
often around the regeneration of our waterways. I am very pleased
that that has occurred. Therefore, with what we are doing with
housing provision through the concentration on sequential tests
and brownfield sites (which I know you have been talking to my
Minister about) means that in the towns we have in fact now gone
from 55% of houses that were being built on brownfield when we
came in to over 70% now, and that has led to more buildings in
towns and greater priority being given to the growth of the cities.
It is not going out; it is coming in.
Q19 Martin Horwood: That is not true
in the way it is going to affect Gloucestershire in the future.
There is plenty of brownfield development planned, but from the
kind of numbers that your Department seems to be handing down
to the South West Regional Assembly (and they seem to be handing
down to Gloucestershire and other parts of the South West) it
is going to force development on greenfield sites.
Mr Prescott: We have been very
successful in getting the change of balance between greenfield
and brownfield and we will continue to watch it. Even if I claim
70% on brownfield, that is 30% on other sites that are not brownfield,
so there will be a growth in some of those sectors. I would also
say that one of our other successes has been density of housing.
It started in the south at about 25; I think it is now well over
40. There are more houses being built on less land to such an
extent that when you talk to my Minister about the extra houses
we are talking about under Barker we can get those extra houses
on even less land than what we were doing a few years ago and
that is because of the increase in density. That is another important
change we have made in the planning regime.
2 Following the evidence session, the Office of the
Deputy Prime Minister have offered the following as additional
clarification: "It is open to local authorities to carry
out whatever test of opinion they think appropriate when considering
proposals for the structure of their local area, including ballots". Back
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