House of Commons Hansard Debates for 3 Feb 1997 (pt 10)

Mr. Hardy: Will the right hon. Gentleman give way?

Mr. Gummer: Yes. Then, to be fair, I shall give way to the hon. Member for Newham, South (Mr. Spearing).

Mr. Hardy: From time to time in his speech, the right hon. Gentleman has tried to build divisions between different types of local authorities--for example, when he referred to Sir Jeremy Beecham. Does he agree that the vast majority of local authorities want a sensible relaxation in the capping level? He should look carefully at the possibility of relaxing the capping level, to allow local authorities to take from capital receipts their contribution to single regeneration budget repayments and capital challenge costs, so that they can contribute to the repair and essential maintenance of buildings that are beginning to fall apart because of neglect.

Mr. Gummer: I remind the hon. Gentleman that we recently made some changes along those lines. However, we understand that, in general, the capping arrangements are now to be supported by the Labour party. If he believes that there should be a change in the arrangements, I suggest that he first speaks to the right hon. Member for Dunfermline, East. He has said that, far from what was said last November, there would be no question of any relaxation, were there ever to be a Labour Government. He has said that capping arrangements would remain as they are, at least for the foreseeable future. So the hon. Gentleman must first convince the right hon. Member for Dunfermline, East, and then he can perhaps come to me.

Mr. Hardy: What about capital receipts?

Mr. Gummer: The hon. Gentleman should consider what the Labour party suggests on capital receipts. It now

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suggests that it could do a fiddle on capital receipts and move them outside controls, as a way in which it could get round its promise not to increase capital expenditure. However, Labour Front Benchers have not told anyone that, if they were to do so, authorities in many parts of the country that might think that they were to receive capital receipts would not, and many others that were not determined to require receipts for housing would receive them.

Under Labour's new fudge, Newcastle, Birmingham, Hackney and Southwark, which have no capital receipts, would not be able to build any new homes, whereas Newbury, Basingstoke, Malvern Hills and West Dorset would be able to build almost as many council houses as they wanted. That is what would happen under Labour's capital receipts system. Not only is it a fudge that no one else in the world would accept, but it increases demands on the Government and would not help the very areas that Labour claims would be helped. Capital receipts would go to the leafy areas and not to areas with the greatest need. Yet again, the Labour party--although not the hon. Member for Wentworth (Mr. Hardy)--has shot itself in the foot by trying to fudge and to slide in something.

Several hon. Members rose--

Mr. Gummer: I must try to continue, although I promised the hon. Member for Newham, South that he could intervene, and I keep my promises.

Mr. Spearing: Having heard Conservative Members' remarks in this debate, will the Secretary of State acknowledge that, two years ago, I led a deputation from Newham, when he acknowledged that Newham was an outer London borough with inner London needs? As my hon. Friend the Member for Newham, North-West (Mr. Banks) pointed out, one of those needs is connected with the social costs of 15,000 refugees. The Secretary of State has acknowledged that that is a national problem. However, there is a need for equity. Should not those additional costs be a national matter and not be laid upon residents in the areas to which refugees naturally tend to go? Is not the truth that he has done nothing yet about the matter?

Mr. Gummer: It is of course true that it is a national matter, but it has a local dimension; it is a mixture--[Interruption.] We have said that there would be special grants to help the localities most in need, and I have reaffirmed that. When we have completed the discussions, we shall ensure that the hon. Gentleman's local authority--like others, not least those in London--receives those grants as soon as possible. I say the same to the hon. Member for Newham, North-West (Mr. Banks), who is speaking from a sedentary position.

Mr. Rendel rose--

Mr. Geoffrey Clifton-Brown (Cirencester and Tewkesbury): Will my right hon. Friend give way?

Mr. Gummer: In a moment--I shall try to, but I must continue.

Having set out the Government's proposals in such detail, I should reply properly to a point made, sometimes sotto voce, by the Opposition. Fewer than three months

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ago, in reply to my oral statement on the settlement, the hon. Member for Holborn and St. Pancras said that our proposals for local government spending were inadequate, and that they made

"no allowance for inflation, the cost of pay increases or the cost of providing extra services for the growing number of old people and of children at school"

and that, consequently,

"local people will once again have to pay more and get less".--[Official Report, 27 November 1996; Vol. 286, c. 343.]

Although the hon. Gentleman did not say by how much, it was clear from his remarks that he believed that both total standard spending and aggregate external finance should be higher.

Those comments are why Conservative Members, and--judging from their interventions--some Opposition Members too, were very surprised to hear the right hon. Member for Dunfermline, East say that a Labour Government would not reopen departmental spending allocations for the financial years 1997-98 and 1998-99. If the shadow Chancellor is to be believed, Opposition Front Benchers have changed their mind and decided that our spending plans are adequate after all. That is the inevitable result. Either the right hon. Gentleman is right now or he was right in November--on any reading of either statement, he could not be right on both occasions.

In the light of what the shadow Chancellor has said, I was looking forward to the Labour party supporting the Government in the Lobby tonight. I was therefore astonished to hear the hon. Member for Holborn and St. Pancras on the "Today" programme on Friday morning repeating his previous claims that the settlement was inadequate and promising that Labour would vote against it. He does not seem to have heard what the right hon. Member for Dunfermline, East said.