House of Commons Hansard Debates for 7 Nov 1989

Mr. Geoffrey Lofthouse (Pontefract and Castleford) : What will be the effect on the housing revenue account of the Rent Officers (Additional Functions) Order 1989--a statutory instrument which was shoved through the House in the early hours of the morning without any publicity? I honestly believe that it is the most nasty, vindictive piece of legislation that I have seen go through in all the time that I have been in the House.

The statutory instrument will affect the housing revenue account. It means that the rent rebate system for poor people will not be based on the rent of their dwelling, but will be calculated by a rent officer. He will decide how much of that dwelling can be taken into consideration for rent rebate. There is a formula. For example, if Mr. and Mrs. Bloggs, a married couple, are living together, it will be one room plus a little bit. Aged couples will wonder what will happen when one of them unfortunately passes away. How much increase in rent will the survivor have to face because of the reduction in rent rebates?

I concede that Ministers have not understood the implications for housing revenue accounts if some local authorities meet the cost of such a shabby statutory

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instrument. The House may recall that what were National Coal Board houses were sold off to Mickey Mouse landlords, or racketeers. The houses are in the private sector now, and they will be caught by the statutory instrument. Again, there will be implications for HRAs. High rents are being charged on some of the estates of ex-NCB houses, and when tenants are entitled to a rent rebate, someone has to find the cost of the rebate. Under the old system, the Government met the cost. Under the new system, the burden is borne by local authorities' HRAs.

Some of the ex-NCB houses were defective and came within the terms of the Housing Defects Act 1984. In accordance with that legislation, local authorities had a duty to repurchase. Some houses are now owned by local authorities and will not be subject to the statutory instrument, but others are in the private sector. Any responsible local authority would not take the decision lightly that for some dwellings on privately owned estates it should have to find the difference between the provisions of the rent rebate system and the system that applies under the statutory instrument. The local authority can use the HRA, or rent rebate can be reduced to the extent that the rent officer becomes involved. In any event, money will have to be found from capital accounts.

Have Ministers ever considered tenants on private estates of the sort to which I am referring? It seems that they have not. There will be chaos on some estates. One local authority may take a sympathetic view and use its HRA, while the adjoining authority will not. That cannot be just. It cannot be fair.

Many tenants have been thrown to the wolves by the policy of the Government and British Coal. Many tenants do not know who their landlords are. These people will not have the protection that is enjoyed by local authority tenants. I hope that the Minister will tell us whether he has any plans to alleviate the problems of former British Coal estates.

7.45 pm

Mr. John Fraser (Norwood) : The Government's proposal that there should be a ring fence around the income and expenditure of local authorities' housing revenue accounts has been discussed for about a year. I do not have any great objection in principle to having a ring fence around an HRA providing four conditions are met. First, as a result of ring fencing, the rents that will be paid by tenants must be reasonable, and by "reasonable" I mean affordable by the sort of people for whom the accommodation is designed, the sort of people who will occupy the accommodation that is provided by the local authority. Secondly, the system which is devised must be fair and reasonable.

Thirdly, the system must not inhibit good management and repair policies. It must not stand in the way of a local authority ensuring that its estates are well managed, and in inner city areas good management is not an easy task. Repairs must be of a high standard and performed quickly, to the satisfaction of tenants. Fourthly, the deficit which results from the first three objectives--there will inevitably be a deficit in places such as Lambeth and Southwark--must be met by the taxpayer instead of the ratepayer. That would be welcome in the borough within

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my constituency, where the burden that is placed upon ratepayers generally to subsidise the HRA is a pretty heavy one.

My fourth condition is not an unreasonable one, because it would not cost the Government very much money. It would not cost them more than a few hundred million pounds to make up the deficit, and that is a fleabite compared with the £4,000 million or £5,000 million that is paid out each year by taxpayers generally to support the cost of the mortgage interest relief scheme.

Does the system that is being introduced meet the criteria that I have outlined? In my view, it does not. My first criterion is that rents should be reasonable for those who are likely to occupy the accommodation that is provided. We know from an amendment that the Government introduced on Report that the level of rents which they propose for local authority dwellings should be related between authorities to the prices that are obtained when houses are sold under the right-to-buy scheme.

It is comparatively easy to predict the relativities of rents between one part of the country and another. There is not much variation between the comparative prices of houses being sold under the right-to-buy scheme between one area and another and house prices generally. For example, we know that in Rossendale the cost of a house for a working-class family will be about £15,000 to £20,000. There are some who will be able to buy a terraced house for rather less than that. In Lambeth, which is within my constituency, or Wandsworth, which is the borough that the Minister used to represent when he was a councillor, the capital cost of housing is about three or four times higher than in somewhere such as Rossendale, Burnley or Bury.

We can deduce from those relativities that, if £20 or £15 a week is the right sort of rent in Burnley or Rossendale, the comparative rent based on right-to-buy figures within Lambeth, Wandsworth or Southwark will be £60 or £80 a week. That, however, is not the market rent. If market rents are to be charged for local authority accommodation, which may be the long-term effect of housing action trusts, in my part of London, rents would be between £100 and £200 a week. That can be checked easily by looking through the local paper, the Evening Standard or Loot. They are not exaggerated market rents. Those two sets of figures illustrate the comparison between one part of the country and another. Ring fencing and the Government's formula for gradually increasing local authority rents will lead to rents in a borough like mine being pushed beyond the means of the people for whom the housing was designed.

Secondly, is the proposed system fair? As other hon. Members have said, because of changes in the housing benefit system, ring fencing will mean that some council tenants will pay more rent to subsidise their poorer neighbours--the reverse of the previous system. Poorer tenants will subsidise the poorest in the housing revenue account. That is a strange system.

In Belgravia, people pay more rent because they live next door to rich people. In Hampstead, people pay more for their houses for the same reason. In Pimlico, Chelsea and other areas, the values of property and the rents that people are prepared to pay are often greater because of the affluence in which they live. In an odd reversal of that position, in poorer parts of the metropolis, on the other side of London, poorer tenants will pay more because they live next door to the poorest tenants. They will pay

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towards the cost of their neighbours' housing benefit because of changes in the social security arrangements and the new system of ring fencing.

Thirdly, will the new system satisfy the test of more adequate provision for repairs and management? I have a quarrel with many local authorities. Often--I have to say that to protect myself against anyone who says that this is not true of their local authority--rents are low, but the quality of housing management and repair is also low. If I had to make a choice between a slightly higher rent with better management and repairs and lower rents with poorer management and repairs, I know what I would choose. I should prefer to pay a little more rent to have a little more quality.

In some housing authorities people tell me that the rents are very high. When I ask about the rents for housing association property in the same area, they tell me that they are much higher. One deduces that a huge crush of people must want to move from housing association properties into local authority properties. However, when the transfer applications are examined, it is often found that that is not the case. People do not mind paying more in return for higher quality.

The problem is political as well as financial. Often it is politically difficult to defend the case for putting up rents. Sadly, there is often resistance to increasing rents a little to spend more on repairs. Nothing in the Bill will make it easier to do so. Ring fencing will drive up rents to pay for the reduced subsidy. If local authorities want to follow my suggestion to increase rents, with tenants' consent to raise money for better repairs, they will find that they have been pre-empted.

If rents in Lambeth have risen from £20 to £60 a week to pay both for eliminating the subsidy to poorer tenants who will lose benefits and for the costs of administering housing benefit, there will be no margin to allow an extra pound or two on the rent to pay for good management. Indeed, the converse will happen. Councils will be under pressure to reduce spending on repairs and management because tenants have already swallowed enough rent increases. That is why the amendments are important. In setting notional rents, the Government need to take account of the effect of their proposals on management and repairs.

About two thirds of the cases raised with me in my constituency relate to housing problems. I do not have a monopoly on that. At the end of my Friday night advice sessions, I despair about what I can do to help my constituents. The same kind of cases come up time and time again. Sometimes a husband and wife or partners may live with their two children in a bed- sit. What kind of privacy or life can they have in such accommodation? Such cases are not isolated. Many such families come to me within the same evening and ask, "What are the Government doing about it?"

There was a time when Ministers genuinely cared about housing problems. They thought that we in the Labour party had got it wrong and that their new formulae would get it right. There was a honeymoon period when we gave them credit for their intentions, if not for their achievements. Because of the direction of housing policy and the removal of subsidy from local authority housing, when people ask whether the Government care, I have to

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reply, "They don't care if you die of despair. They don't care if they are driving you into inner-city concentration camps without any hope or prospect of bringing up a family in dignity." Many poorer people in the community, who rely on their local authority for housing, cannot avoid reaching the conclusion that that is the Government's attitude.

Mr. Harry Cohen (Leyton) : I support what my hon. Friend the Member for Norwood (Mr. Fraser) said. Like him, I see many people at my surgery who are in a desperate housing plight. As a result of the Government's policies, there is virtually nothing that I can do for them. I also agree with him about ministerial attitudes.

The amendments are about housing revenue accounts and rents. I wish to deal with the serious implications for Waltham Forest. I know that there are similar problems in other hon. Members' areas but I have the provisional figures for my area which I want to share with the House and the Minister. I am not sure that he is aware of the serious implications in my area for rents, capital investment, repairs and the local authority's ability to tackle homelessness, which is an immense problem. All the available accommodation in my area is taken up by the homeless, so that there is little movement of other people on the waiting list, even if they are in dire need.

Withdrawal of housing subsidy according to the Government's guidelines will mean a loss of about £4.7 million to Waltham Forest. That will mean a rent increase of 21 per cent. with effect from 1 April next year. To that will have to be added the cost of unsubsidised management, and maintenance costs, inflation, charges from the current year and provision for bad debts, which the Government have not taken into account in their notional figures. The actual figures will be greater than the notional figures set by the Department of the Environment. That is another £3.75 million, which pushes up the rent rise to 38 per cent. In addition, there is a shortfall on the capital account, which again arises out of the Bill and which must be met by the housing revenue account so that the capital books can be balanced. It is another £7 million in Waltham Forest, which pushes the rent rise up to 70 per cent. Why must there be such a rise in rents under the Bill? Even if it were 20 per cent.--although 70 per cent. is more likely--it would not be in line with inflation, which is much lower. It is between three and 10 times the rate of inflation. What is the justification for that ? 8 pm

The Government proclaim that fighting inflation is their top priority. If so, why are they pushing through a measure that will have such an impact on rents? Does the Minister really understand the implications of the Bill, especially as they affect tenants? If not, the Government should urgently review the Bill. If they do, they are effectively saying they do not care a fig about the problems that the Bill will create.

The figures that I have for the capital account for 1990-91 show an HIP allocation for the borough of £10 million, and that is being optimistic. If we add to that capital receipts of £6 million, the total resources amount to £16 million. That is only half the 1989-90 resources. The Bill provides three main reasons for that. First, councils cannot use the previous year's capital receipts. Secondly, they cannot use their prescribed receipts--that is, the

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right-to-buy money--for repairs as opposed to major investment. Thirdly, 75 per cent. of the right-to-buy money cannot be used for investment ; it must be used to repay past debts.

The capital programme was set about a year ago, so it cannot simply be cut. It includes mandatory grants in excess of £1 million and contractually committed schemes, which are unavoidable without penalty, of £15 million. In other words, that £16 million is already committed. There are urgent 1989-90 schemes that Waltham Forest must fulfil, and they amount to another £7 million. There are only a few of them--for example, Northwood tower where there is serious structural and fabric disrepair. There is Cogan avenue, which is needed because Whitebeam tower has similar disrepair problems and 100 families must be decanted to Cogan avenue.

Three housing association schemes are also included which are intended for people with mental and learning disabilities. Those crucial schemes must be fulfilled. That brings the capital programme to a total of £23 million, yet the resources available under the Bill will be only £16 million, a shortfall of £7 million.

Will the Minister guarantee that the new system under the Bill will allow the same current level of investment to continue? The figures show that that will not be the case, but there will be cuts in capital investment of 50 per cent. or even more. The only way that that could be avoided is for the additional burden to fall on the rents, as I have already explained. What is the Government's intention? Do they really understand the impact on local authorities such as Waltham Forest? If they do not, they should review the Bill. If they do, they are cynically uncaring.

The Bill has implications for the fight against homelessness. One method to deal with homelessness is leasing, and Waltham Forest has a programme to secure about 500 leases in three years. It is a central part of its strategy of avoiding the use of bed-and-breakfast accommodation, although other boroughs are forced to use that option. Waltham Forest should be congratulated on not putting people into bed-and-breakfast accommodation, and the leasing scheme plays a great part in that success. The Bill includes regulations that will penalise councils that swap short-term leases. If a council takes out a lease for more than three years, the total capital value of the lease is assessed and the amount that the local authority can then borrow is reduced by that amount. That is iniquitous.

If a local authority leases a property for three years and then releases it, and then my authority, Waltham Forest, takes up that lease, the first authority's holding of the lease counts against the credit limit of Waltham Forest. Councils such as

Conservative-controlled Westminster and Liberal-controlled Tower Hamlets have already taken up at least 300 properties in Waltham Forest. That will restrict Waltham Forest's right to lease homes in its own area.

That is wrong. A local authority should be able to take out a lease for longer than three years. The homelessness problem will not be solved in anything like three years ; it will take much longer to tackle it. Therefore, Waltham Forest is effectively being penalised for trying to sort out its homelessness without having to resort to bed and breakfast. Is the Minister really suggesting that Waltham Forest should use bed-and-breakfast accommodation? That would be the effect of the regulations.

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I ask the Minister to review the position. The Government are doing precious little to tackle the problem of rising homelessness. At the very least, they should not be imposing restrictions that will hamper the legitimate attempts of a local authority to tackle the problem. I ask the Minister seriously to consider those points.

Mr. Redmond : I had not intended to make a speech but having listened to the Minister I felt that I must make a few comments. I am concerned that this Minister is no different from those who went before him in his attitude towards housing. The Government's hatred for the council house tenant is crystal clear, and it appears to increase each year. I used to think that the Government hated the miners more than anything else, but it now appears that they have turned their hatred towards the council tenant. Their policies are detrimental to a section in our society that requres cheap accommodation because they cannot afford to purchase in the private sector. I am a little worried that that hatred is blinding the common sense that should prevail in order to meet the needs of that section of our society.

Since 1979 there has been no long-term planning for local authorities, never mind housing. For a housing authority to function properly it needs a long-term strategy. However, when the Government interfere with the money available to an authority, the needs of council tenants cannot be met successfully.

The Minister talked about the fairness of the legislation and, in particular, of the group of amendments. I listened to him carefully, but I cannot see any fairness within the system. One thing is sure : when the Bill is enacted the council tenant will be a damn sight worse off than he or she is now. Compassion for and understanding of the needs of the council house tenant are in short supply. The Minister talked about the Government meeting a housing authority's needs, coming along with a pocketful of money and doling it out if the council proved that a need existed and that it had acted within the guidelines laid down by the Government. He cannot live in the same world that I live in. When Doncaster, like I am sure every other local authority, submits its housing investment programme, it usually finishes up with 50 per cent. of what it requires to meet its needs in the forthcoming year. However, the Government have seen fit to cut that allocation, which has a knock-on effect.

The money from the sale of council houses is the tenants' money which should be invested in a local authority's housing stock. However, the Government appear to say one thing and do another. They have allowed housing authorities to spend only a percentage of capital receipts when all of it could have been spent to improve conditions for tenants.

The Minister appeared unable to say what he thought a fair rent was. I do not know how long a piece of string is, but the Minister appeared unable to say any more than that rent increases would depend on this, that or the other. However, I have no doubt that rents will continue to escalate. It is no good the Minister saying that they will go no higher than inflation, or whatever. Experience shows that not to be true and that is a great pity.

The Minister talked about fabrication versus repairs. He appeared to accept that the cost of installation of new window frames would form part of the HIP allocation but said that the cost of painting window frames would not, and that is a tragedy. Local authorities struggle like hell to

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try to maintain their properties in a reasonable state of repair, but older properties require more money spending on them to ensure that they are maintained to a reasonable standard. Unfortunately, the money is not there to maintain them, so a gradual deterioration is taking place. It is a great pity that the Government will not provide money to invest in fabrication while authorities continue with their repair programme. Fabrication reduces the need for repairs. One-off repairs are a damn sight more costly than a fabrication programme, which can lead to savings in the long term. It is a tragedy that the Government are not interested in long-term solutions to housing problems.

8.15 pm

Between 1975 and 1979, when there was a change of Government, Doncaster council had 1,500 new starts a year. That figure dropped in 1979. Those new starts were made possible as a result of Government money and the Government's permission to borrow money to meet a need within the community where housing waiting lists were growing. Those 1,500 new starts comprised houses to meet the needs of large and small families and decent bungalows to meet the needs of our senior citizens. However, the ring fencing that the Minister talked about will stop investment in such bungalows, for which the need is escalating. As people in our community become older, they become more infirm and need suitable accommodation. I regret that the Government are treating the elderly with contempt.

Doncaster, like many other authorities, provides accommodation for senior citizens from all sections of the community--private and public. Unfortunately, ring fencing means that the council house tenant is being asked to pay an increased rent to provide accommodation for the private sector, and that is wrong. Money should come not only from the Government but from the rates to provide accommodation to meet the needs of the elderly in our society. There is a complete lack of understanding about what will be needed in the future. It will be a great pity if the Government do not stop to reflect and then come back to the House with a sensible policy for that section of the community which they can view with pride. Yet again, the Government are trying to kid the public that they are providing something when they are not. When the public come to taste the fruits of that policy they will find that they are bitter fruits indeed. At the next election many Conservative Members will have cause to condemn their Ministers for not providing suitable and sensible policies which meet the needs of the community.

Mr. Allen McKay : The Bill and the Government's attitude towards the Lords amendments suggest that they have launched a continuing attack on local government and all that it stands for. It would have been far better for the Government to be honest and to say at the outset that the Bill represented a continuation of their policy of moving all local authority housing into the private sector, with the possible exception of free sheltered accommodation.

I should like a categorical statement from the Minister about what is meant by the proposals in the amendments concerning the housing revenue account, rents and rent rebates. I expect rents in my area to be forced up to £50, £55 or £60. The Government say that that is fine, because there is a system of rebates--which, over the years, has

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caused problems that we are now gradually surmounting. According to the Government, a group of people who do not receive the rebates will bear the brunt of the attack.

I cannot help but think that the Government's policy is to try to force that group out of their chosen status as council tenants, leaving them no alternative but to buy their houses. If the Government had made that clear, fair enough, but they have tried to cover it up.

The reason for my continued opposition to the Government's ring-fencing policy is the fact that my authority ring fenced years ago, long before the Government ever thought of doing so. For years we have taken nothing from the rates to help with housing. Some of my colleagues in other authorities have said that we are wrong. Fair enough : they have their views, and we have ours.

In my area council housing, by and large, has financed itself, but we always had a plan for housing development that was 10, 12 or 14 years in advance. We increased the rents of existing council houses to pay for the void during which no rents would be received for houses that were being built, and did not take the money from the rates.

Under our system, elderly people could be moved out of three-bedroomed houses into bungalows, leaving the houses free for families. Under the Bill and the Lords amendments, housing benefit will be cut if the Government consider that the recipients are living in houses too large for them. If that happens, those people will of course turn to the local authority, hoping to be rehoused ; but many houses have been sold. The Minister shakes his head, but what I have said is true, and we can prove it.

Will ring fencing force tenants to pay for the rebates of other tenants? That is what was intimated by the previous Secretary of State. Will tenants have to pay for the rent arrears of others? That seems likely to me. If the Minister can refute what I have said, let him tell us from the Dispatch Box that every treasurer of every local authority who submits an account of rent rebates and arrears will continue to receive money under the present system.

The Minister has talked of targeting subsidies, and has said that the Bill will make things simple. When a Minister in the present Government talks about making things simple, I immediately assume that he has found a way of saving money, for they never make anything simple unless there is something to be gained. Everything that the Government have said suggests that they intend to load council house tenants with the debts of others : the poor will pay for those who are poorer still, as my hon. Friend the Member for Knowsley, North (Mr. Howarth) has pointed out.

All that we want is for the Government to be honest about what they are doing and what it will mean. Will rents be raised by as much as I have suggested? Why should a housing account not pay for itself? When we accused the Government of centralising the rent scheme, they denied that they were doing so. The Minister, however, mentioned a minimum of 95p for each council house, which must mean that rents are to be controlled centrally. What is to stop a Minister--whatever his party--from increasing rents time and again without the local authority's permission? Will the 95p minimum and the £4.50 maximum be based in such a way that the authority will be left free to decide how to spend the money?

If an authority is paying its way in council housing, as mine is, why should it have to put 95p on the rent if it does

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not need that money? What authority has central Government to impose such a requirement on a council that has achieved what local government has wanted to achieve for years, and has managed to make council housing responsible for itself?

Moreover, it is the houses that have paid for themselves--the houses whose rent has contributed to the "global" sum of the housing revenue account-- that have been sold, although they are the seedcorn of the council housing system. Far from helping local authorities and their tenants, the Government are destroying a housing system that has lasted for years, for the sake of a purely ideological concept of house ownership.

As the Minister knows, I agree wholeheartedly with home ownership. My local authority bought land and put in sewers and roads at the ratepayers' expense to ensure that those who wished to build could do so more cheaply than many others elsewhere. Houses were purpose built for sale. Much of what the Government have done, however, has ruined such policies, in my area and others, and I find that very sad. It is even sadder to know that some tenants will be paying through the nose--unless the Minister can tell us that that will not happen. I wish that he would say that all housing rebates will be paid as they are now rather than being taken from other tenants, and that rent arrears will not be paid by tenants either. Council tenants in my area should be crying out. There may be six houses in a row, four of which may have been sold. The others will be occupied by council tenants. In their rents those council tenants are paying, for example, for the grass to be cut in the gardens of the other four houses. If the Bill is passed, as I expect it will be, my local authority will have to look again at what belongs to housing and what belongs to rates. If the Minister honestly and truly looks at the position, I am sure that he will acknowledge that council house tenants are being imposed upon. He will then come to the Dispatch Box and say exactly what is to happen. Our council house tenants will have to pay for the rebates of others. They will also have to pay for the rents of other people. We should be given the answer to that question. Council house tenants ought to be able to decide what their future is to be. 8.30 pm

Mr. Pike : I have waited for some time to take part in the debate. I did so quite deliberately because I had expected to hear contributions to the debate from a few Conservative Members. It is surprising that no Conservative Member has taken part in the debate on these important Lords amendments and the amendments that have been proposed to them.

My hon. Friend the Member for Barnsley, West and Penistone (Mr. McKay) spoke about housing subsidy for those in receipt of benefit. He also referred to ring fencing. I listened carefully to the Minister's interventions during the speech of my hon. Friend the Member for Hammersmith (Mr. Soley). Whenever the Minister was pressed on those issues, he changed the question that my hon. Friend had asked and gave the answer that suited him. At no stage did he answer the questions that were put to him. Every time that the Minister rose to his feet, which he did several times, he deliberately changed the question because notes were being pushed at him. We want to be convinced that at no stage will the poorest tenants who are

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able to pay their rents and other council house tenants be asked to meet part of the housing subsidy that is to be given to those who need it. Do the Government intend to meet the shortfall that arises from any additional burdens that local authorities have to bear as a result of the proposed changes?

Mr. Soley : My hon. Friend knows that the Bill, as drafted, clearly states that the poor will have to subsidise the poorest through the housing benefit system. The Minister got himself into trouble when he said that any difference would be made up by the taxpayer. He had to retreat from that position during the series of interventions that my hon. Friend has rightly identified. We need to know whether the Government's intention is to make people pay for the housing benefit of others in the area, or whether the taxpayer will have to pick up that bill.

Mr. Pike : That is an important point. If the Bill becomes an Act, it is what the legislation says that will count, not what the Minister says. If the Minister meant what he said--that the taxpayer, not council tenants, will meet the bill--that must be spelt out clearly in the legislation. Even at this late stage an amendment ought to be tabled to make that clear.

The Bill has been altered at every stage. I was not a member of the Committee, but I know that the Bill was altered in Committee. It was considerably altered on Report and it was almost completely redrafted in the other place. If the Bill is still not right at this stage, the Government must get it right. We need to know whether the Minister's original statement was correct--that taxpayers will have to bear the cost, not council house tenants.

It is regrettable that local authorities have been made to bear the burden of administering housing benefit. They were never fully recompensed for their work. The burden was shifted from the Department of Social Security to the local authorities. They had to carry out the Government's dirty work.

The Government have deliberately discriminated against those who want to live in rented housing, particularly in council houses. They have encouraged people to buy their homes, a point that has been made on several occasions during the debate. In 1979 the Government's subsidy to the housing revenue account in Burnley was £1.6 million. That was rapidly eroded, over a period of two years, to zero, and it has been at zero ever since. Furthermore, housing factor E7 in the grant-related expenditure assessment is affected if councils do not increase rents in accordance with the Government's wishes. We want council tenants to be given a fair deal. If the Government are not prepared to do what we wish them to do, council tenants will, once again, be unfairly penalised.

A person who is buying his house gets tax relief, whatever his income. If he is paying tax at the higher rate, his tax relief will be at the higher rate, subject to the £25,000 limit. His position has to be compared with that of a council tenant. I hope that the Government are prepared to accept that they have made a mistake. They ought to make a concession to council tenants and treat them fairly and equitably. However, the Government do not believe in fairness and equity, so I shall not be surprised if they are not prepared to go down that road.

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We deal with capital receipts in one of our amendments to the Lords amendment. It would enable councils, if they so wished, to use capital receipts for repairs. It is important that we should allow local authorities the right to do that. I have never agreed with the way in which the Government imposed restrictions on the use of capital receipts through the 20 per cent. factor and I certainly do not believe that they should now prevent them from being spent on repairs. If they do that, there will be an immediate shortfall on the housing revenue account. Local authorities either will have to put the rents up even more to ensure that important repairs are carried out, or, worse, the repairs will not be carried out and there will be a further deterioration in our housing stock.

The Government should be concerned that in the past 10 years there has been a deterioration in public and private sector housing. We do not have a housing crisis. We have a number of housing crises which have all been created by the Government.

When I was a local council member I did not agree that capital receipts should be used for repairs to council property. However, I strongly believe in local government and I believe that local government should have the ability to take such a decision. That is the fundamental difference between the two sides of the House. Although we might not always agree with what local authorities choose to do, we certainly believe that they have the right to choose. I believe that that money should not be used in that way, but I might be in a minority. Nevertheless, that is the view I took when I was on a local authority. However, I recognise that, due to further reductions in their HIP allocations, pressure to increase rents by other measures has forced local authorities to consider that option. They have no alternative. I do not blame local authorities, as I recognise why they have been forced into that position. I stopped being leader of Burnley council in 1983 and the situation has continued to worsen year by year. I appreciate why local authorities have had to do that.

I hope that the Minister recognises the importance of our amendment. If the Minister does not want to force up rents to totally unacceptable levels, if he does not want council houses to deteriorate and the housing stock to worsen, and if he is a reasonable man, he should agree with it. I wait to be surprised some day by a positive response from the Government. I hope that tonight the Minister will choose to surprise me.

The Government must recognise that the further turning of the screw on local authorities, and particularly on council tenants, is becoming increasingly unacceptable. If they believe that council tenants will support them in the next general election, they are sadly mistaken. The categories of people to whom they can appeal for support will dwindle as they increase the numbers of people that they attack.

I hope that the Minister has taken note of the points that have been raised by my hon. Friends. We have had a constructive debate, although no Conservative Member has contributed to it. I assume that either Conservative Members are not interested in council tenants, particularly those on housing benefit, or that they accept our argument and hope that the Minister will respond favourably. Perhaps they will join us in the Lobby. I hope that the Minister responds positively and at least meets my two

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specific points by ensuring that council tenants do not have to pick up the tab for any housing benefit payable to the poorest among them, as that would be wrong and unacceptable. I hope that he also recognises the importance of ensuring that capital receipts can be used to maintain and repair council housing stock.

8.45 pm

Mr. Tony Banks : I hesitated before I stood up because I saw the hon. Member for Harrow, West (Mr. Hughes) poised in his seat and, in view of what my hon. Friend the Member for Burnley (Mr. Pike) said about the lack of speeches by Conservative Members, I thought that we would hear from the hon. Member for Harrow, West.

I have a programme from the Institute of Housing, Northern Counties. There is to be a conference called, "Housing--Moving into the Nineties". It is to be held on Wednesday 8 November. That is tomorrow. There will be an official opening of the conference and an opening address by a Mr. R. Hughes, MP, who, as we all know, is the hon. Member for Harrow, West. He is the parliamentary consultant to the Institute of Housing. I was hoping for a little taster of his opening address. Unfortunately, I cannot make the conference tomorrow, but I shall be speaking there on Thursday when I shall be talking about the Local Government and Housing Bill, so I shall have to rely on an accurate report of what the hon. Member for Harrow, West will have said about housing following the debate tonight and the passing of the Bill.

Mr. Robert G. Hughes : I hope that the hon. Gentleman can assist me ; he is taking so long over the preamble to his speech. Is there any chance that I will be able to getaway from the House after the votes to catch my plane at 8.30 am tomorrow?

Mr. Banks : I cannot give the hon. Gentleman that assurance, but I will certainly urge my hon. Friends to make way as speedily as possible so that we can hear the learned words of the hon. Member for Harrow, West. I suspect that he will catch his plane quite comfortably and will be able to say what small contribution he made to the debate this evening. It is certainly far more substantial than that of any other Conservative Back Bencher so far, so perhaps that is to his credit.

The Opposition amendment (a) to the Lords amendment is designed to ensure that, before the Secretary of State makes a determination with regard to the amount of allowance he is to make in calculating housing revenue account subsidies for 1990-91, he has regard to the likely changes which will result from such a determination. We raised many of our arguments in Committee, but we have to return to them here, because, as we see it, the new financial system which will be introduced as a result of the Bill is designed to give the Secretary of State even greater power over the affairs of local authorities. There seems to be no small part of local authority activity over which central Government do not wish to exercise some form of control. In many ways it is yet a further nail in the coffin of local democracy and accountability. I cannot understand why so many Conservative Members, including the Under-Secretary of State, who have a background in local government are prepared to connive at the unwinding of local democracy throughout the country. This is only one aspect of it--the further control over the housing revenue account, making

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sure that there can be no discretionary payments from general rate income into the housing revenue account. We know what will happen. Either rents will go up alarmingly, or the standard of repairs and maintenance will fall from fairly lamentable levels, at least in London.

I cannot understand why Conservative Members with so much background in local government are prepared to go along with this. I understand that all things are now done in the name of the Prime Minister and that all decisions emanate downwards from No. 10 Downing street. She has no background, feeling or taste for local government. She seems to have a total abhorrence of it. However, I should have thought that one or two Conservative Members would be prepared to say to the Prime Minister, "This has gone too far. You are destroying the local democratic structures of the country and creating a social and economic crisis, particularly in the inner cities, that will be appalling for the country and even more disastrous for the fortunes of the Conservative party at the next election."

Mr. Nigel Spearing (Newham, South) : Does my hon. Friend agree that he is acting on an assumption that may be incorrect? Is it not possible that many of the hon. Members to whom my hon. Friend refers will have gone into local government not with a sense of enthusiasm for its place in the country but with a mission to minimise it or, in some cases, disrupt it? That may sound cynical, but in my experience it is possible.

Mr. Banks : My hon. Friend has a good point. Some hon. Members on both sides of the House have used local government as a jumping-off board for a career in Parliament. They are the careerists that we know are among us, and lamentably they are not wholly confined to the Conservative Benches.

When I was elected to the House in 1983, it did not even occur to me that I should stand down as a member of the Greater London council. I acknowledge the debt that I owe to the GLC for training and teaching me about local government and for being an example to the country of how an efficient local authority can be run. It brought a great deal of credit not only to the Labour party but to local government generally through the policies that it pursued. I acknowledge that debt and will continue to pay for it.

I am one of those who never forget an insult. Local government in this country has been insulted by Conservative Members and a council has been destroyed. If nothing else, that will keep me in politics because I want revenge. The old saying "Don't get angry, get even" runs through my political psyche and will continue to do so. I want to see Tory blood on the walls and on the carpets. It will be running thick through County hall and through the county halls and town halls of the country. I am grateful to my hon. Friend the Member for Newham, South (Mr. Spearing) for sparking me off on a subject about which I feel strongly. I did not use local government.

Mr. Deputy Speaker (Mr. Harold Walker) : Order. Now that the hon. Gentleman has got that off his chest, perhaps we can return to Lords amendment No. 112.

Mr. Banks : I am sorry, Mr. Deputy Speaker ; I got carried away by the moment. Feelings are running high on the Opposition Benches.

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I thought--and I still believe--that some Conservative Members enjoyed being in local government, thought that it contributed a great deal to democracy and that it underpinned parliamentary democracy in many respects. I cannot understand how those right hon. and hon. Members can now agree to a further dismantling of local government.

We are dealing with the problems that will arise in the housing revenue account and the maintenance of local authorities' housing stock because of the Bill. When my hon. Friend the Member for Hammersmith (Mr. Soley), in his excellent speech, talked about the homelessness crisis in London, the Under-Secretary of State, a former leader of Wandsworth borough council, was shaking his head in disagreement as if my hon. Friend's speech was being made up on the spur of the moment from his fevered imagination rather than from factual evidence.

Anyone who knows anything about London will realise just how appalling the housing crisis is. One only has to leave the House, perhaps on the way to a reception to which hon. Members are constantly invited, and walk along the Embankment to see people sleeping in the boxes of the cardboard cities. If one goes to an excellent concert at the Festival hall, the Queen Elizabeth hall or the Purcell room--they were built, paid for and excellently maintained by the London county council and the GLC--one will see homeless young people. Surely one or two Conservative Members still have a heart and a conscience after 10 years of serving Polly Pot in No. 10. Surely they will feel a twinge of conscience when they see what is going on. We are not making any of this up. The crisis is real. Homelessness in London has doubled since the Prime Minister took office in 1979.

Mr. Pike : I recognise the problem of homelessness in London. I wonder whether my hon. Friend realises that, due to the benefit changes that have taken place this year, homelessness is occurring in many towns where it never existed. Many bed and breakfast hostels are being closed because the amount of benefit being paid to them no longer enables them to remain open and provide even minimum accommodation. The problem does not exist only in London and the big cities but now covers the length and breadth of Britain.

Mr. Banks : I agree entirely with my hon. Friend. I have a cutting that I was going to introduce later but I will introduce it now as it is apposite. It comes from The Sunday Correspondent this week. It is on the back of the two pages containing that weird interview with the Prime Minister. There is an even weirder picture--she has clearly lost her marbles. Page four says :

"Patten acts on cardboard cities."

The two points are closely linked. When they were changing the social security regulations we warned the Ministers about what would happen. We pleaded with them, but they said they were just scare stories and alarmism that the Minister said could be expected from us. However, the facts are in the newspaper. It says :

"Homeless school-leavers may again be allowed to claim social security as part of a Government campaign to stop them begging and sleeping rough. Action to cut the growing cardboard city' population in London and other towns by providing more hostels is to be announced later this month by Chris Patten, the Environment Secretary. It will form part of a wide- ranging review of homelessness ministers have been forced to recognise that their virtual ban last year on social

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