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Mr. Chris Smith : The Secretary of State will know, however, that the annual results of the 10 privatised water companies, published in the past couple of months, show, for just the year 1993-94, a collective profit of £1.6 billion. He will know that their dividends have in every case increased by between 7 and 9 per cent. He will know that the salaries of their senior executives have been increasing in the past three years by far more than a Railtrack signalman could possibly dream of, yet the customers- -especially in the south-west, but also everywhere else in the country--are confronted by sharply escalating charges. When will the Government take action to ensure that the managers look after their customers, not their own share options, first and foremost ?
Mr. Gummer : I am afraid that the hon. Gentleman is wholly wrong in his attitude. The water companies are winning contracts and are providing a better service than has ever been provided before. Let me take as an example Anglian Water Services Ltd., which looks after most of my constituents. The number of complaints about that water company have plummeted since the privatisation took place. The hon. Gentleman does not live in the real world ; he lives in the world of envy, which is the basis of socialism and his policies.
Mr. Banks : May I express my full support for the introduction by my right hon. Friend of compulsory competitive tendering by local authorities in the management of their housing stock, in spite of the opposition from those on the Opposition Benches, given that that policy will benefit the tenants, in the better quality of the services that they will obtain, and the council tax payers, who will achieve a better deal for the money that they have to give to local authorities ? Can my right hon. Friend give us any examples of the voluntary introduction of that policy by local authorities and the benefits that have accrued ?
Sir George Young : My hon. Friend is right to summarise the objectives, which are to have a higher standard of management and a better quality of service. As to the economies that have already been secured from CCT, I was interested to see a survey, published today by the London borough of Wandsworth, analysing the five-year savings from competitive tendering--an average saving of 32 per cent. There are real benefits to be gained from that policy.
Mr. Gerrard : The Government estimate the preparatory costs of CCT in housing management at 10 per cent. of the contract, which is obviously a substantial amount of money. Can the Minister justify the requirement that that money be taken from housing revenue accounts, which means that existing tenants must pay for it from their rents ?
Sir George Young : It is relatively easy to justify that. There is an initial up-front cost of 10 per cent., but there are average annual savings of 6 per cent, so the policy pays for itself in a very short time.
Mr. Nicholas Winterton : Will my right hon. Friend, who is visiting Macclesfield borough tomorrow to attend the opening of a development by the Templar Housing Society Ltd., of which I happen to be a member, accept that borough councils can be extremely efficient and responsible housing management services, and does he accept that it is not necessary for housing management to be put into the private sector for the tenants of public sector housing to have a first-class management service, as they have in Macclesfield borough ?
Sir George Young : I am looking forward with mounting excitement to my visit to the north-west tomorrow. As to my hon. Friend's point, the efficient local authorities are perfectly able to put in for the contracts that are being advertised and if, as my hon. Friend says, they are efficient and competent, they have every prospect of winning that contract and going on to perform the services that they have performed so well.
Sir George Young : In 1993-94, in England, the average local authority rent was £33.70 per week, the average housing association rent for new assured lettings was £44.05 per week and the average rent for other private sector assured tenancies was £73 per week.
Mr. Winnick : Rachman would have been delighted to have been living now. He lived too soon. What possible justification can there be for council rents increasing at double the rate of inflation in the past 15 years and for council rents increasing by 6.5 per cent. on average this year ? In such circumstances, is not it understandable that council tenants and private tenants working in the public and private sectors want justified wage increases, which is the reason for the current industrial dispute ? Those people want a pay increase to compensate for the increase in rents.
Sir George Young : The hon. Gentleman mouths the outdated prejudices of the 1960s. Many Labour-controlled local authorities have positive partnerships with the private rented sector and welcome the role that they can play in meeting housing need. The Government's policy on local authority rents is clear. They should reflect the value of properties. Our policy has been progressively to increase rents to those levels year by year.
Mr. Nigel Evans : Will my right hon. Friend confirm that, thanks to the right to buy, 1.5 million people have turned their rents into mortgages, a move opposed by Opposition Members ? Will he also confirm that, thanks to the lowest mortgage rates in more than 20 years, those people will be paying far less in mortgage payments than they did in rent to local authorities ?
Sir George Young : The figure mentioned by my hon. Friend is the figure for local authority tenants who are entitled to exercise their right under the rent-to-mortgage scheme. I hope that they will follow my hon. Friend's advice and exercise the right that the Government gave them in the teeth of opposition from Opposition Members.
Mr. Battle : Does the Minister recognise that the Government's calculated programme of promoting high rents across all sectors has caused the housing benefit system to break under the strain, and has led to the overcharging of council tenants and the pricing of people out of their homes ? Will he confirm that he and his colleagues in the Department of Social Security oppose the Chief Secretary to the Treasury's cost-cutting review of housing benefit ? Does not the Minister agree that the policy of high unemployment, low incomes and high rents will not work ?
Sir George Young : The Government's policy is to move away from bricks and mortar subsidy towards personal subsidies. There are good reasons for that policy, which we have followed for a number of years. My right hon. Friend has made it clear that a fundamental review of income support is under way. The conclusions will be announced after they have been reached.
Lady Olga Maitland : I congratulate the Government on placing such priority on energy efficiency. How much money are the Government giving in grants to the home energy efficiency scheme, bearing in mind the fact that it is designed to help the most vulnerable of our society--the disabled and the elderly ?
Mr. Baldry : I am glad to be able to tell the House that money being spent on the home energy efficiency scheme has almost doubled to £70 million. That extra money will provide grants for 200,000 extra homes this year. It will help them with energy efficiency measures, and will be positive action to help the most vulnerable.
Mrs. Ewing : Does not the Minister realise that the Government policy of imposing additional VAT on domestic fuel can hardly be viewed as one that promotes energy efficiency ? Indeed, it will take away the right of ordinary people, particularly the disabled and the handicapped, to have decent heating in their houses. Areas such as the north of Scotland, which I represent, have a green energy policy. We achieve energy efficiency through hydro-electric power schemes. Does not he recognise that, far from actually promoting energy efficiency, he is promoting energy inefficiency ?
Mr. Baldry : That is nonsense. Before we introduced VAT on energy, all the Opposition parties in different ways advocated introducing a tax on energy. The Liberal Democrats complained that it was an anomaly not to have VAT on domestic energy. Labour wanted an energy tax, as did other parties. It is monstrous that when those parties are confronted with the Government's courageous decision to introduce VAT on domestic fuel, they renege on their environmental commitments.
Mr. Alan W. Williams : What is happening to the Energy Savings Trust ? The Minister will know that in this financial year and the next it was due to spend £175 million on energy efficiency, raised from a levy on the gas and electricity industries. Clare Spottiswoode, the Director General of Gas Supply, has said, however, that such a levy is illegal. Is the Department challenging that view, or is the trust set to collapse from a lack of funds ?
Mr. Baldry : I am glad to be able to tell the House that the Energy Savings Trust has made an excellent start. It has recruited a core of high- quality staff and run a number of successful pilot schemes. We are considering how best to secure the funding of the trust and its associated schemes.
Mr. Robathan : Although I welcome what the Minister has said, will he enter into conversations with my right hon. Friend the President of the Board of Trade to ensure that the funding problem is resolved, because it appears that the new gas regulator is failing to implement Government policy ?
Mr. Baldry : As I have told the House, we are considering how best to secure the funding of the Energy Savings Trust for the future. It is an excellent body ; we are determined that it shall play its full part in promoting energy efficiency policies.
Sir George Young : Local authorities and other public sector bodies completed 1,254 dwellings in 1993. Housing associations are now the main new source of subsidised housing : in 1993-94 they provided 56, 500 homes with grant from central Government, and 8,334 homes with grant funded by local authorities.
Mr. O'Brien : That response shows just how pathetic is the Government's policy on providing affordable housing. Does the right hon. Gentleman accept that the organisations best placed to manage and provide affordable houses are local authorities, with my local authority of Wakefield in the lead ? Does he accept that the Government's policy is wrong ? Is he prepared to argue with his colleagues to change the direction of that policy and allow local authorities to provide more public, affordable housing for the people who need it ?
Sir George Young : No, the policy is not wrong at all. The hon. Gentleman will know that we have provided about 25,000 more homes than we promised in our election manifesto three years ago. Some local authorities may be the best managers of local authority stock ; clearly, some of them are not. We get more homes for people in need by routing public money through housing associations than we do by routing it through local authorities. So there is a great deal of common sense behind the Government's policy of involving housing associations in providing the homes for rent that the country needs.
Mr. Patrick Thompson : Is my right hon. Friend aware that Labour- controlled Norwich city council is determined to maintain its traditional role as the main provider of rented housing in Norwich ? Does he agree that that antediluvian, hidebound attitude does nothing to reduce the waiting list, now running at about 3,000 in Norwich ? Would not it be better to encourage the council's co-operation with housing associations to solve some of the problems of Norwich in a sensible way ?
Sir George Young : I very much hope that Norwich will do what many other local authorities, including Labour-controlled ones, are doing, and will route some of its capital through housing associations, simply because it will provide more homes in that way. No one can be in favour of a monopoly of social rented housing in any city. Many local authorities are encouraging positive partnerships with housing associations, to provide different management styles and types of homes. If any antediluvian authority still wants to go the whole distance on its own, it is way behind what many forward-looking local authorities of all parties are doing.
Column 811year after year ? Even with the houses built for rent by housing associations, there is a massive shortfall, leaving many people desperately in need of houses to rent. Earlier, the Minister said that 94 per cent. of builders believe that the situation will improve. That is hardly surprising, given that they do not believe that it can possibly get any worse. Why does not the Minister get builders back to work and use councils' capital receipts, and do it now ?
Sir George Young : Builders are getting back to work. If the hon. Gentleman looks at the recently published statistics he will see that they show rising output in the construction industry, more private sector house building starts, more housing association house building starts and growing activity. The key statistic for those in housing need is the number of new lettings and the fact that the figure for 1992-93 was 321,000 compared with 312,000 in 1979-80. That is the currency which matters for those on the waiting list.
Dr. Spink : In view of the previous question, will my right hon. Friend confirm that there are now 2.4 million more homes in Britain than there were in 1979 as a result of the low inflation and low interest rates that the Government are pursuing and now achieving, and will he continue to encourage his right hon. Friends in that pursuit ?
Sir George Young : My hon. Friend is right to point out that the housing stock has risen faster than the population and that the prospects for a recovery in the house building market are now very good, with house prices affordable, confidence returning to the housing market and land with planning permission readily available. I hope that the confidence that we have begun to see emerging during the past few months will carry forward during the next months and years.
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