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Mr. Salmond: From the drift of the hon. Gentleman's argument, I take it that he will vigorously oppose the proposals to force local authorities into repayment of debt as opposed to investing in the modernisation schemes that he is describing.
Mr. Gallie: Unlike the hon. Gentleman, I do not believe that we can pass debt from one area of the public sector to another. It is all the same. If a debt was passed to the central Treasury, as the hon. Gentleman proposed earlier, it would change only the pocket from which the taxpayer pays for the debt burden. Privatisation of companies, to which the hon. Gentleman referred, was a different case. At the same time as we got rid of debt,we passed on the requirement for investment to a different pocket--the private sector. It was obliged to invest after privatisation. There has been massive investment by the private sector in the water industry in England. That must be welcome.
Mr. Andrew Welsh (Angus, East): Does the hon. Gentleman oppose Government policy on writing off water debt in Scotland? All the things that the Government said could not be done have suddenly been done in respect of water. Why have they not been done in respect of housing, which would help solve Scotland's massive housing problem, which the hon. Gentleman is ignoring?
Mr. Gallie: I am not ignoring it. Local authorities were responsible for incurring that debt. They should carry it forward.
Mr. Welsh: What about the water authorities?
Mr. Gallie: The new water authorities are different bodies, a different ball-game. That debt will be paid for by the Treasury and, ultimately, by taxpayers across the country. It is a transfer of resources. Housing, and the budget suggestion of the hon. Member for Banff and Buchan, are different. In Scotland, the water authorities' debt has been contained in the Scottish budget. It has not passed on to the national Treasury, but is contained in the Scottish block grant. That would have to be the case if we changed the rules on housing. I do not believe that other services in Scotland could stand that. The hon. Member for Banff and Buchan laughs, but services such as health and education need all the cash that can be pushed in. We cannot offload the debt on to the national Treasury. That would not be acceptable.
Mr. Matthew Banks: My hon. Friend makes an important point. Given that there is currently more
leverage in Scotland than in the rest of the United Kingdom, should we not strike a balance? We should spend half the money available on improving the infrastructure of our housing stock. However, as local authorities in Scotland are in debt to the tune of more than £5.3 billion, it is right and proper that some of the money should go to pay off that debt, which costs some £154 per head of the population per year.
Mr. Gallie: I sympathise with those comments. I could see the point of local authorities carrying debt and even extending it some years ago, when inflation was out of control. People said that it would be impossible to bring inflation back into line, but this Government tackled the problem. Inflation is now pegged at 2 per cent. to 3 per cent. and that removes the advantage of carrying a high debt burden. A balance must be struck now and we must hold debt at its present level rather than incurring further debt.
The hon. Member for Banff and Buchan talked about the poor standard of the housing stock. That point is recognised because, over the past four or five years, the Government have carried out surveys of a kind that were not carried out in the past. The surveys have identified problems that people suspected were there, but of which they were not fully aware. The problems are beginning to improve, perhaps too slowly, because all of us would like to see massive strides. Once again, I congratulate the Government on identifying the extent of the problems.
There is, of course, housing in the private sector, including rented properties. Through the Government's efforts, there has been massive investment in private housing stock. In the 1980s, there were extremely generous improvement and repair grants. The hon. Member for Glasgow, Govan (Mr. Davidson) is present for this debate. When one wanders around Glasgow,one sees the massive upgrading of the housing stock. One must recognise the massive part that the improvement and repair grants have played in raising standards in the city.
There are still areas of Glasgow where investment is needed. Strangely enough, it is most needed in the post-war housing that was provided by the local authorities, which did not always use good judgment. Many of the real problems in housing in Glasgow are found in relatively modern properties that were provided in the 1950s and 1960s.
I am concerned about the tendency in some areas of my constituency for private landlords to buy large houses and to split them so that they can be used for multiple occupancy. There are real causes for concern. In many instances, there is a lack of control by the landlords.A lack of respect is shown by many tenants who come through the housing benefit system, and who have no real interest in the properties and no real identity with the neighbourhood. Such dwellings are mushrooming in certain areas, which has a bad effect on owners and other residents there. I ask my hon. Friend the Minister to consider that problem in the months ahead, because it is serious and must be addressed.
Mr. Malcolm Chisholm (Edinburgh, Leith):
I congratulate the hon. Member for Banff and Buchan(Mr. Salmond) on obtaining this debate and on being able to find a copy of the Edinburgh Evening News down here before 9.30 am--something that I have not managed to do.
I shall concentrate on the housing revenue account capital budget, which is the key budget for the modernisation, central heating and window replacement programmes that are so desperately needed by many of my constituents. It is also the budget for the building of new council houses, although precious few are being built nowadays.
The figure this year for the HRA capital budget in Edinburgh is £32 million. Three possible figures have been given for next year under the resource planning assumptions. Edinburgh has been told that it will get£26 million, £24 million or £22 million. Figures have been given three years in advance; if we take the central figure, Edinburgh will suffer a cut of £30 million, not taking account of inflation, in its council housing capital budget over the next three years. The Greater Pilton area in north Edinburgh, which is part of my constituency, will lose £11 million of desperately needed housing investment over the same period. I shall describe the effect that that will have on my constituency.
If we have the same amount next year as we have had this year, we could have some new council houses in the West Granton area of my constituency. As a result of the cut, even if we get the highest figure, there will be no new council houses there. The Minister will say, "Okay, let the private sector do it." However, attracting private sector money for houses for rent in that area is a problem. Even if we are successful in attracting private sector money, there will be fewer houses for rent than there would have been, and the rents will be higher.
We have a serious problem in Edinburgh. Only 16 per cent. of the stock is council housing. I know that the Minister wants to continue to increase home ownership, but the reality is that many people cannot afford to buy their houses and, because of increasing job insecurity, that situation is becoming more common. We shall have a serious problem in terms of the number of houses available for rent and the change in the budget figure means that the problem will get worse.
The Muirhouse area is in much need of housing modernisation and new build. On the top figure that the Government have suggested--£26 million--some modernisation work can be carried out in Muirhouse. There will be no modernisation work anywhere else in Edinburgh, but there will at least be some in Muirhouse. The council has taken the view that to attract private finance into the area, it must keep up its commitment to
public housing. Obviously £26 million is not enough,but I tell the Minister that if he must pick one of the three figures, the top figure is the least that Edinburgh needs. Some modernisation work can then go ahead in Muirhouse and that may have knock-on effects on other developments in the area. Many of the houses have already been vacated, ready for modernisation. The tenants have been devastated by the news that the programme may not go ahead and I have had many representations on the issue. I make this plea to the Minister. If he cannot go beyond £26 million, he must at least give us that amount.
The other area of my constituency that has been affected is the Granton-Royston area. Some 311 houses in Royston were expecting modernisation in the next three or four years, but that modernisation scheme has been taken out of the housing programme. Granton Medway,a street in Granton, has been the subject of two housing studies in the past few months, by Edinburgh university and by the home energy advice team. The information was sent to the Minister.
Much information has been available from those studies about the state of houses in that not untypical street.It was found that 58 per cent. of people complained of dampness, 78 per cent. of condensation and 45 per cent. of mould. Two thirds of the bedrooms surveyed were below the official tolerable standard, which means that they were so cold that they were a risk to health. Many of the health problems, especially children's respiratory problems, were described in that report. Another fact that emerged was that tenants in that street were paying between 10 and 15 per cent. of their income on heating bills--twice the national average--because of poor insulation and the poor condition of windows.
That street is not unique. Recently, I visited houses in Crewe road gardens, quite nearby, and saw many similar problems. Much work therefore needs to be done.We need far more than £26 million, but at least, if we are given that top figure suggested by the Government, some window replacement and central heating work might go ahead in the Granton and Royston areas.
If the Minister cannot go beyond £26 million, I make a plea to him that at least we may have that figure. It is still a massive cut of about 20 per cent. on the £32 million that we had this year. I know that the Minister will say that the council must sell its stock and make money in that way. There are plenty of arguments about that, which I do not have time to make. Even if the council met the target that the Government have set for next year of£1.25 million through selling stock--that is, in blocks rather than in individual sales--that would represent, even at the top figure, a massive cut for next year's budget in Edinburgh.
The Government will also say, "We are putting money into housing associations and so on and new houses can be built by them instead of by councils." We know that, as the hon. Member for Banff and Buchan said, Scottish Homes has had a massive cut in its budget and its development programme is down by £40 million next year. We know that the number of new starts by housing associations next year will be half what was planned, and that depends on Scottish Homes transferring £50 million of its stock, which may not happen, so we may have even fewer new starts than the 650 throughout Scotland about which Scottish Homes is now talking.
We have a massive housing crisis in Scotland. At the last count, there were 42,000 names on council housing waiting lists. The Scottish Office estimates that, because of demographic changes, 150,000 extra households will be required in the next 10 years.
We know from the Scottish home condition survey about the condition of Scottish houses. One in 20 is below the official tolerable standard and one in four suffers from dampness, condensation and mould. The Government's response is to slash housing expenditure, especially council housing expenditure. There is also a problem, which I do not have time to go into, with the budget for private housing, which must now compete with education and everything else for a share of a much diminished capital cake. We know that one in eight tenements in Edinburgh needs repair, and that cannot be done on present resources.
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