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7.55 pm

Mr. Oliver Letwin (West Dorset): I begin by congratulating the hon. Member for The Wrekin (Mr. Bradley). I agreed with almost none of what he had to say, but he said it eloquently. I am sure that we shall hear many other speeches of equal eloquence by the hon. Gentleman in the months and years ahead.

I pay tribute at the outset to what I take to be the genuine motives of Her Majesty's Government in this matter. Labour Members have said repeatedly throughout the debate that their aims are to increase employment and to improve housing. No one in my party desires anything other than those two results.

The problem with the Bill has been well described by my hon. Friend the Member for Maidenhead (Mrs. May), who was misdescribed earlier as the right hon. Member for Wokingham (Mr. Redwood), a perhaps more famous participant--

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Nick Raynsford): Not so attractive, though.

Mr. Letwin: No, indeed. My hon. Friend described the Bill as a smokescreen, but I think that the problem goes deeper. The Government's motives, although genuine and noble, will not be realised by the Bill. Three kinds of naivety are at work here. This is a subject which has been debated in the House, by Governments and among learned people on both sides of the political divide for about 25 years. It is not new territory that the Government find themselves occupying today.

The first type of naivety is the belief that, to the extent that the receipts are indeed used by local authorities for housing, they will create long-term sustainable

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employment. On the contrary--if Ministers and Labour Members knew rather more than it appears that they know about the housing industry, they would be as aware as Conservative Members are that the effect will be to create what Labour Members themselves sometimes call a boom and bust culture. A one-off release of large sums for building houses will engender a large expansion of the construction industry, but only briefly--to be followed almost inevitably by an exaggerated contraction of the industry. It is that cyclical pattern which has caused so much difficulty for those who have attempted to remain in that industry through hard times and good. Far from creating additional sustainable employment in that industry, the Bill is likely to lead to over-expanded ambitions and subsequent bankruptcies which, if anything, will tend in the long term to reduce sustainable employment in the industry. There are all too many historical examples of that phenomenon--with which officials, if not Ministers, are only too familiar. If the Government were to seek advice from their officials on the matter, I have no doubt that they would receive advice to that effect.

The second species of naivety with which we are dealing concerns the fact that, alas, much of the money will not be used for housing. Although it may be specified that the receipts, if released, must be directed towards housing, as always there will be a large degree of substitution. Following the release of those receipts, local authorities will no doubt find themselves spending in other quarters the money that would have been spent on housing. The Government will be surprised in due course, and they will be obliged to explain to the House why there is so great a discrepancy between the variously reported £5 billion or £7.5 billion of receipts and the amount actually spent on increased funding of housing.

The uses that each local authority makes of that money will depend on the authority. I fear that in the case of some authorities, especially those controlled by the more extreme variants of the Labour party, some of the uses will alarm the Government and may be advantageous, from a purely political point of view, to Opposition Members. I suppose that, from that point of view, I should welcome that likely development, but from the country's point of view, it will not be advantageous. It will not contribute to employment or to the solution of our significant housing problems.

Alas, a third species of naivety is also at work. The one thing of which we may be confident is that although the receipts will not generate the degree of sustainable employment envisaged, and although much of them will not be spent on housing, they will certainly be spent. The history of local authorities over many decades bears out the fact that a local authority that is permitted to spend extra money will always do so. As Conservative Members have frequently said--and it will not surprise Ministers--when that money is spent, the public sector borrowing requirement increases.

The hon. Member for Sutton and Cheam (Mr. Burstow) offered the Government a marvellous device for resolving the problems that would otherwise occur: creative accounting to reclassify the public sector borrowing requirement into two categories--one caused by current spending, the other caused by capital spending. I presume that the hon. Gentleman imagined that by that means

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Liberal Democrat magic, allied with Labour perseverance, would lead to a sudden disappearance of the problem of the vast increase in the public sector borrowing requirement in the current financial year.

Alas, even if the Government--contrary, I suspect, to the advice of all those concerned with the probity of public accounts and contrary to the dictates of the Treasury--were to reclassify in that way, they would find that there is an economic reality that when debt increases, interest costs increase. Regardless of whether the extra cost is borne in one year through expansion of the PSBR or is borne gradually over time in the form of increased interest charges, it will be borne.

That extra cost will have to be borne by something else. It will have to be borne by the reduction of other parts of the departmental total or of the global total, in which case other programmes--perhaps those dear to Labour Members--will need to be cut, with consequent effects on, among other things, employment. Or it will have to be borne by an increase in taxation which, such being the way of the world, will not be free of employment consequences. Every time taxation increases, either consumer spending or industrial profit declines, threatening jobs.

The Bill, although noble in its motivation, proves on examination to be a tissue of naiveties. It will not result in a stable increase in employment in the industry to which it is ostensibly devoted. It will not result in an expansion of housing on a scale approaching that which is considered to be the obvious outcome by those who have not examined the position. It will result in a great increase in the public sector borrowing requirement, which will come to bear on all of us in the form of reduced expenditure elsewhere, perhaps on even more urgent services, or in the form of an increase in taxation, which will inevitably reduce employment.

The Government would do well to reconsider the Bill, if theirs is the noble motive of trying to increase employment and to improve housing. Some other Bill, better fashioned, would serve that purpose better.

8.4 pm

Mr. David Drew (Stroud): Thank you, Mr. Deputy Speaker, for allowing me to make my maiden speech in this important debate.

I will start by thanking all those in my constituency who worked so hard to ensure that, after almost 50 years, Stroud returned a Labour Member to Parliament, and all those electors who, having thought long and hard about what was in the area's best interests, voted for a better future. In the process, they overturned one of the safest Conservative seats in the south-west on an unprecedented wave of enthusiasm for Labour's message. I fully intend to do everything possible to live up to the trust that they have placed in me and to fight for fairness and social justice in everything that I do.

As well as being a Labour Member, I am proud to represent the Co-operative movement in this place. As one of 26 Co-operative Members of Parliament, I am sure that we shall make a considerable contribution. It is important to recognise that the Co-operative party is a sister party to the Labour party and that, although we share similar objects, we maintain our separate identities. We shall take every opportunity to pursue co-operation in all its

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different forms and we look forward to the early introduction of a Bill that will encourage co-operation in all those forms.

I pay tribute to my predecessor, Roger Knapman, who represented the Stroud constituency for the past 10 years and in so doing achieved the reputation of being "a good House of Commons man," rising to the office of Government Whip. He may have been a person of relatively few words in this place, but he was always known for his mordant wit and his ability to present his case clearly and coherently. He was magnanimous in defeat on the morning of 2 May, which I greatly appreciated, and I hope that I shall be able to follow him with dignity and good sense and serve the area to the best of my ability.

There is one respect in which I would not want to emulate my predecessor. In his maiden speech, he warmly welcomed the introduction of the poll tax. With hindsight, I feel that that did not get him off to an auspicious start. However, in due course it did his chances no irreparable harm because he served as part of the Government.

I cannot leave my tributes without mentioning two former Members of Parliament for Stroud. Sir Anthony Kershaw, who represented Stroud for an impressive 32 years from 1955 to 1987, developed an enduring and endearing relationship with local people, based on his reputation as a highly conscientious Member of Parliament. He also managed to be a high achiever in the Commons, gaining ministerial office and becoming an acknowledged expert in the sphere of foreign affairs. I have been the recipient of good advice from Sir Anthony, for which I was very grateful.

I also pay due regard to the last Labour Member of Parliament for Stroud, Ben Parkin, who served in the 1945 Parliament. On his election, he restored hope and a sense of renewal to the people of Britain after a period of undeserved misery and pain. He went on to represent the interests of his constituents with characteristic commitment and gained widespread respect as a valued parliamentarian. He had a lifelong belief in the need for peaceful international relations, based on a foundation of moral leadership, and in the need for socially useful, productive and fulfilling employment, especially for the young. Those remain laudable objects today, and Ben will be long remembered by many of my constituents for giving a lead to social and moral renewal. London Members will know that Ben went on to represent a seat in the capital for many years and that he is best known for his exposure of Rachmanism.

I am not only extremely proud to represent my constituency but extremely fortunate to represent such a beautiful part of the country. I am not alone in describing my area as such, and the Stroud district has a special resonance for all who know it. It is not just a beautiful place. Over the centuries, Stroud has seen remarkable change. For so long associated with the wool trade, it was at the forefront of the industrial revolution and retains its integral interest in and support for manufacturing. Hon. Members may be surprised to learn that some 40 per cent. of the work force are still involved in manufacturing--a much higher percentage than elsewhere in Gloucestershire and a significant proportion in relation to the whole country. That was brought home to people last week when we experienced the tragic loss of some 200 jobs at one of our major firms, Lister Peters in Dursley.

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Stroud's dependence on manufacturing means that we have a vested interest in recovering this nation's secondary base. If we are to succeed in that, we must move away from too great a reliance on the low-wage, low-security jobs that have become all too prevalent in my constituency. Given the Government's priorities of investment and educational opportunities, there could be no better test bed than the Stroud constituency. In wishing the Government every speed in their venture to rebuild this country, the people of Stroud will welcome any initiative that strengthens our manufacturing and engineering base. I am sure that that is the case on both sides of industry. For the reasons that I explained earlier, it is especially important to my constituents.

My constituents are lucky to live in such stunning countryside. The constituency consists of Cotswold Edge and the Severn Vale. It has two major market towns: Stroud in the north and Dursley in the south. There are four other market towns: Minchinhampton, Nailsworth, Berkeley and Stonehouse, where I live. It has been my great pleasure to represent Stonehouse over the past decade as a town, district and county councillor. As an apprenticeship for this place, I am sure that the experience is second to none. In addition to the market towns, there is a rural hinterland with sizeable parishes such as Cam, Cainscross and Rodborough, as well as many smaller villages and hamlets too numerous to mention.

The strength of our area is in its diversity. However, we face an increasingly uncertain future. Like the rest of the country, Stroud has suffered from a free-market approach to planning, which has seen the hearts of towns and communities eroded by the interests of developers and the restraining of local government powers to act in their communities' interests. At this very moment, developers are preparing to build numerous houses on some of our most precious green-field sites, ignoring the needs and wishes of local people and failing to take account of the economic and environmental consequences of their actions. I have referred more than once to the "locust" tendency of taking up more and more of our precious countryside and the "lemming" effect of failing to question whether that is right or fair. I intend to initiate a full debate on the whole development process so that we can genuinely move towards a more sustainable future with much more carefully thought-out strategies.

Stroud has achieved some notoriety of late, with an intervention by the former Secretary of State for the Environment, the right hon. Member for Suffolk, Coastal (Mr. Gummer). In visiting my constituency over the past week through the columns of various publications, he was rather rude about Stroud district council's attempts to put forward proposals for consultation in its local plan. His views were at best unhelpful and his words have done nothing to prevent the attack by developers. If he had spent more time talking to developers to try to restrain their ceaseless attack on those green-field sites, it might have been more helpful than having a go at what we are trying to do in Stroud. As I am not allowed to be controversial in my maiden speech, I shall return to that matter later.

Hon. Members may wonder what all this has to do with a debate on capital receipts, but I understand that I am allowed a certain licence in my maiden speech and I shall return to that issue later. I wish to discuss three other matters before coming to the capital receipts implications for Stroud and the rest of the country.

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First, my constituency has suffered from a financial and democratic deficit. Services have declined and council taxes have risen at both county council and district level, despite a rapid increase in population caused by a standard spending assessment system that is rigged against us. My colleagues from Gloucestershire and I intend to turn that round so that we can provide better education, good transport and a proper community infrastructure.

The second issue concerns the campaign to save Standish hospital from closure. I have long supported the campaign and hope that, as a Member of Parliament, I can bring it to a successful conclusion. To my constituents, Standish exemplifies what the NHS is all about. I have pledged to continue to battle to keep the site and have already begun discussions to ensure that that happens.

The third issue is more complicated. It involves my horror at the increase in poverty and social exclusion in my area. Many hon. Members, particularly Labour Members, may question that comment, as deprivation in their areas may seem more commonplace. However, there are surprisingly large pockets of poverty in Stroud. Like many other areas of the country, we have problem estates. Just as worrying is the increased incidence of rural poverty. While we know much about urban poverty, we have yet to grasp what it is like to be poor in a rural area. Problems caused by poor transport, lack of jobs and absence of shops and services are all too prevalent and are all wrapped up in social isolation. It may seem a paradox that anyone can feel hopelessness and despair when living in a rural idyll, but the aphorism, "You can't eat the countryside" sums up the reality that far too many people face.

Against that background, I have little difficulty in moving on to the substance of the Bill and I am particularly pleased to make my maiden speech in a debate on local authority capital receipts. I have a long association with, and specific interest in, housing issues. The restriction on the use of capital receipts from the sale of council houses has long caused anger and resentment in all housing authorities. My authority has more than 6,000 properties, many of which are in a good state but some of which need repair or bringing up to date, such as the installation of central heating or better windows. It is vital that that should be done and anything that can help it on its way will be welcomed.

Like many other areas, Stroud also has a high percentage of poor quality housing in both the private and the public sectors. Much of it dates back to pre-1919, so it is in considerable need of repair. There are therefore good reasons why local authorities should be able to use those capital receipts. It is a disgrace that while homelessness rose inexorably under the Conservative Government, a major source of funding was proscribed. Had those moneys been made available over time, I wonder how many families and individuals who have suffered the inequity of homelessness would have been housed without having to face the despair and uncertainty of waiting in bed-and-breakfast accommodation or even worse. Stroud has managed to avoid the use of bed-and-breakfast accommodation, apart from on rare occasions. On the positive side, we have an estimated £5 million in the form of cashback which, if used sensibly, could make a real hit in attacking poverty and deprivation.

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As democratically elected bodies, local authorities should have the right to decide how they allocate their funds. Too often, the Conservative Government's first response was to restrict councils from exercising their authority. In so doing, they not only sought to frustrate councils' genuine wish to provide good quality services but created a complexity in local government housing finance which few people would purport to understand. That is especially true in relation to capital receipts. I hope that my hon. Friend the Minister will aim to cut through the complexity so that it will be easier for local authorities to understand the mechanism and, accordingly, for electors to measure their performance.

Several Conservative Members referred to debt. No one is in favour of local authorities delaying repayment indefinitely or failing to make it a priority, but it is not beyond the wit of local authority treasurers to take responsibility for that, in liaison with their councillors. It is wrong and counterproductive to impose repayment of debt, without giving discretion. Rather than saving money, that can lead to a loss of revenue in the long run, through the absence of housing provision and other creative uses of receipts.

Councils should be allowed over a period of time to use their capital receipts from the sale of council housing. It would be foolhardy for authorities to try to use all of the receipts in one go, or even to frontload the receipts, no matter how desperately they wanted to tackle housing problems in their area. The impact on rents and council tax would be unacceptable, as Conservative Members have made clear. I know that the Government will take that carefully into account in their calculation of subsidy support and subsequently of SSAs.

Instead of rushing into the use of their receipts, local authorities should work out the best schemes possible, preferably through a partnership approach, to maximise the value accruing from the receipts. There will be a temptation to restore the cuts of one third in capital which the previous Government imposed, but that must be resisted in the short run, at least.

I wanted to know from my hon. Friend the Minister how the release of capital receipts will affect supplementary credit approvals. I am happy with her response, and even more pleased that there will be a period of consultation on the way in which the details of the scheme will operate. That takes account of the prerequisite for fairness to authorities such as Stroud which have managed their capital assets so successfully over the years.

In conclusion, I return to the link between the growth of social housing and the possible attack on the countryside. Seeking the building of extra social housing may seem to be at odds with my earlier plea that we must end the destruction caused by green-field development, which hangs like a pall over much of my constituency. There is, however, no contradiction. I am not against development per se: I am against the imposition of unbalanced and unacceptable development.

For example, in many cases the only housing that is needed in a particular place is more social housing. It is my contention that if local authorities were given back the resources to provide more social housing, that could prove helpful to those of us who favour greater constraints on development. If social housing will be required in the future, more capital should be available in the public

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sector to initiate that development, thus restoring the balance between public and private sectors. I heartily support the views of my hon. Friend the Member for The Wrekin (Mr. Bradley), who said that we must look again at planning policy guidance PPG 3, which would be a means of achieving that objective.

Too often, the only way in which social housing can be commissioned at present is on the back of much larger estates through planning gain. That is, at best, undesirable.

I support the Bill. It is clearly set out to deal with the problems of homelessness and of renovation and refurbishment, and it provides a helpful link with welfare to work schemes. Most of us went into politics to try to raise the quality of life of those whom we represent, and the Bill will do much to further that aim.

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