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Sir Paul Beresford: Will the hon. Lady give way?
Ms Armstrong: No, I shall not.
The clause will therefore replace the obligation to specify a period for repayment with a discretion to do so, enabling Ministers to take better account of particular circumstances.
Sir Paul Beresford:
Will the hon. Lady give way on that point?
Ms Armstrong:
I shall not give way, because I want to conclude.
Clause 1 is at the heart of the initiative, and I should remind hon. Members why it is so important. For too many years, social housing has been the poor relation, starved of investment while its assets were sold off. The results of that policy are clear. People are condemned to live in damp and unhealthy housing--a cost in personal terms and to the health service. People are living on estates that most of us would rather not visit--but the police frequently do. Vulnerable families are crowded into tiny flats where there is nowhere for the kids to do their homework. It is no wonder that they fail at school. People are excluded from a basic right: a decent home.
Mr. David Curry (Skipton and Ripon):
I welcome the Minister of State, Department of the Environment, Transport and the Regions, the hon. Member for North-West Durham (Ms Armstrong) to her post for her first full-scale performance. I had hoped that she would come in the guise of Salome and gradually remove the veils from the Bill. She has shown a few petticoats, but we need to find out a lot more if we are to get to the heart of the measure. Her speech consisted, as far as I could tell, of a quite remarkable transition from introduction to peroration, with almost nothing between the two. We should like a great deal more detail. We will clearly have to explore it in Committee--assuming that the Government, quite exceptionally, intend the Bill to go into Committee.
The Bill is not about capital receipts; it is about giving supplementary credit approvals. The words "capital receipts" are a smokescreen. The Bill is entirely about that nice gentleman at the Department of the Environment, Transport and the Regions dishing out some more conventional borrowing approvals to local authorities.
I agree with the Minister that the area is complex. It is no doubt reminiscent of the Schleswig-Holstein question. I wish her luck in getting abreast of it. All I can say is that once one gets abreast of the question and no longer needs to follow it, one's understanding is difficult to sustain in the face of one's preoccupations.
There are three main components of provisions for credit liabilities. I know that if I do not use that phrase, I will get some retrospective disapprobation from those in the Chamber who are not hon. Members. The first component is the amount set aside from council house sales, the second is the amount set aside from other asset sales, and the third is the amount set aside annually from revenue, representing a fixed percentage of net indebtedness, which is why local authorities such as Birmingham end up with provision not purely from the local authority housing side.
It is worth recalling that the sale of council houses was the most successful privatisation of the entire period of the Tory Government. More than £20 billion was raised by a privatisation which Labour opposed root and branch, stage by stage and week by week. If the privatisation had not happened, we would not be having the debate today.
There is a case for mobilising capital receipts, but it should follow certain clear conditions. The first is that the Government must have the intellectual honesty to recognise that authorising additional borrowing will have financial consequences that will have to be reconciled with the Government's public expenditure commitments. The Government chose to lock themselves into the previous Government's expenditure framework for two years. Whether they were right or wrong to do so, we wish to ensure that they maintain a commitment that they have given repeatedly in the House and outside.
The second condition is that the additional money should be devoted to clearly defined purposes. The Minister of State went very wide in describing
the purposes to which additional money could be devoted and she implied that it could be spent on broader regeneration. We need to know exactly what will be allowed and what the procedures will be for monitoring the expenditure. By the Minister's admission, expenditure on certain schemes has had to be tightened up in the past and we wish to ensure that the conditions are tight from the start.
Sir Paul Beresford:
Does my right hon. Friend agree that that point applies especially to clause 2? As it stands, and without the explanation that I sought from the Minister, it appears that an incompetent authority, such as Harlow, which consistently spends some 60 per cent. above its standard spending assessment, could tell the Secretary of State that it was spending over cap yet again and ask whether it could pick up a revenue cost and capitalise it. The local authority could say that it did not want to pay in seven years, but wanted the loan on the never-never. If it kept the capitalisation quiet, the House of Commons would not know, because there is no requirement to report it.
Mr. Curry:
My hon. Friend has hit on a pertinent point. When we come to clause 2 in Committee, we will wish to explore such contingencies and possibilities. Whenever somebody tells me that a Bill is a technical measure, I get slightly suspicious about what lies behind it.
There is a good case for devoting the allocation of the credit approvals, which is what we are talking about, to the renovation of existing stock. New build should be done only in partnership with housing associations in order to lever in additional private sector resources. In other words, the money should be used as local authority housing action grant. That has a long-established pedigree and has worked well.
Local authorities should not be told that they can go back to building council houses, except in the case of certain specialist provision. I doubt whether they will, because the right to buy will be a disincentive, but I do not want them to be encouraged to do so.
Mr. Peter L. Pike (Burnley):
Does the right hon. Gentleman accept that the ending of mandatory grant by the previous Government caused major problems for areas that have low-value properties, residents with low incomes and much pre-1914 stock that is in need of major improvement? Does he agree that local authorities should be allowed to spend money on improving such houses, as my hon. Friend the Minister of State suggested, because if one house in a long terrace becomes derelict, it can destroy the whole terrace?
Mr. Curry:
I was about to come to the third condition; the hon. Gentleman anticipated me. I have visited the houses in Burnley to which he refers. I was trying to get to Blackburn at the time, but I made an unannounced visit and was able to inspect them in all their glory. There is a good case for using some of the resources to help with private sector renovation. We will all increasingly have to depend on private sector accommodation. That is agreed across the political spectrum.
I have visited areas such as Bradford and seen the problems closely connected with the fate of the ethnic minority communities. We need to ensure that we can
direct money effectively to renovation in those areas. The Labour party has not pledged to reverse the changes in renovation grant and, therefore, we have a common interest in trying to ensure that it is used effectively.
I was pleased to hear the Minister of State say that the resources could also be used to support transfers. Even if all the set-aside receipts were to be mobilised--as if it were available in old socks under the bed and could be poured out into the housing market--they would not match the resources that are required. We will have to mobilise private sector funding, and the best way to do that is by the transfer programme. That programme, which depends on the consent of the tenants--that is written down in the law--is a sensible way forward. I agree with that, but it must be done by consent. The new social landlords, for whom we legislated--the Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Greenwich and Woolwich (Mr. Raynsford) was involved in that--will be an effective way of doing so.
Dr. Brian Iddon (Bolton, South-East):
Does the right hon. Gentleman realise that after the Tory Government came to power in 1979, housing benefit escalated from £3 billion to more than £13 billion and is one of the biggest crises in housing? The Tory Government's dogmatic pursuance of market rents and large-scale voluntary transfers caused the problem. He is now advocating that the present Government make that problem worse.
Mr. Curry:
As the Government have just said that they intend to continue the policy, I hope that the hon. Gentleman will express his discontent in the proper quarters. If one wants to bring a significant amount of private sector funding into the housing market, one must do so on a basis of realistic rents. Otherwise, the housing associations will not be able to earn the revenues they need to support their activities. That is a plain matter of economic fact.
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