| Previous Section | Index | Home Page |
The Minister for Local Government and Housing (Ms Hilary Armstrong): Are you saying, Mr. Deputy Speaker, that the previous Government were not interested in controlling debt?
Mr. Letwin: Mr. Deputy Speaker, I suspect it was not you who were saying that but I, but I am privileged to be associated with you, and I would that I had your eloquence or your authority in the Chamber.
Undoubtedly, the previous Government were extremely anxious to control the public sector borrowing requirement. If I may reply in one word to that intervention and to the earlier remark of the hon. Member for Luton, South (Ms Moran), there is a great difference between increasing the PSBR at a time of recession and doing so at a time of growth. The Chancellor says in his recent great work--the magnum opus with which we have all been presented some time after the Budget was given to us--that he intends us to be in a time of sustained growth.
In the theology--perhaps I should say the metaphysics--of the Chancellor and his colleagues, there is no excuse for an increase in the PSBR on a systemic basis over a period of sustained growth during this Parliament. If this is a coherent policy to achieve sustained growth in the housing market, there should be a phased debt reduction programme. If, in the light of that, the Government insist on rejecting the new clause, that will prove to the House and the country that the purpose of the Bill, as of much else that is being proposed in that domain, is merely to increase spending in the hope that no one will notice what is going on, without the slightest view of a long-term progression that we could support.
Mr. Paul Burstow (Sutton and Cheam):
I shall make only a few brief comments on the new clause--no doubt
It is a bit rich for the Conservative party to advance the cause of debt reduction, given the overwhelming contribution that it has made in recent years to increasing the national debt. It is not that there are no lessons that Members of all other parties on both sides of the Chamber can learn from the Conservative party in that respect--simply that that might provoke some comment.
Mr. Letwin:
Does the hon. Gentleman not accept the proposition that I was advancing, that there is a significant difference between an increase in the PSBR in times of recession and such an increase in times of growth?
Mr. Burstow:
I am sure that, if the hon. Gentleman reads the Committee Hansard, he will note that I and my hon. Friend the Member for Torbay (Mr. Sanders) have been advancing on behalf of others--notably the Chartered Institute of Housing--the case for a change in the accounting regime, moving towards the use of the Government general finance deficit to deal with these issues.
I note from reading the report of the Second Reading debate that the hon. Gentleman criticised the Liberal Democrats for advancing that device. We regard that device, not as a crock of gold or a panacea, but as a means by which we can change the accounting regime and treat borrowing for investment in the creation of new assets--which is what we are talking about--differently from borrowing to fund on-going recurring expenditure, which is what the previous Government often did. We criticise the way in which privatisation receipts have been used to deflate the PSBR but not for proper funding.
Conservative Members have adopted a contradictory position. Surprisingly, they are moving back towards supporting assessing the allocation of capital receipts solely on the basis of housing need. Having watched the way in which challenge and single regeneration budget initiatives progressed under the previous Government, I find it refreshing that a short time in opposition has changed the Conservatives' minds.
Ms Armstrong:
We have had an interesting little debate. When the hon. Member for Christchurch (Mr. Chope) moved the new clause, he appeared to have difficulty in keeping a straight face because, obviously, he was simply stirring the pot. He knows that the new clause is not serious, because, even were it incorporated in the Bill, it would not do what he wants it to do.
For many years, the Conservatives were responsible for local authority debt, sanctioning the amounts that local authorities could spend and borrow. They frequently
castigated local authorities for having so much debt, but they never took action to tackle that problem or even saw the need to do so. As hon. Members have noted in interventions and the hon. Member for Sutton and Cheam (Mr. Burstow) has noticed, the Conservatives have been responsible for increasing debt, without using that debt to good effect--in other words, without using it to invest.
Sir Paul Beresford:
Will the hon. Lady give way?
Ms Armstrong:
Of course I will allow the hon. Gentleman to intervene, but I want to finish the point.
The previous Government did not use increased borrowing to invest and get the economy growing--they did the opposite. The hon. Member for South Dorset (Mr. Bruce) appeared to acknowledge that we are just emerging from 18 years of recession. I believe that most people experienced the past 18 years as two severe periods of boom and bust, which is why we have adopted a very different approach to borrowing.
My right hon. Friend the Chancellor said in his Budget statement that the Government would keep total national debt at a prudent and sensible level, but that, where the Budget does allow increased borrowing, it will be borrowing to finance investment, not day-to-day expenditure. I have said that throughout. I wondered whether hon. Members had not been present on Second Reading or had not read the report of that debate, because I have always said that we know that borrowing will increase, but that it is borrowing to finance investment, not to be frittered away on day-to-day expenditure. We want borrowing for investment, so that we may increase the capacity of the economy, and increase the capacity of the construction industry so that it may play its part in a growing economy.
Sir Paul Beresford:
May I take it that the Government are putting in £200 million, and then £700 million, in SCAs; and that BCAs will continue next year at the same amount, plus inflation?
Ms Armstrong:
This measure has to do with supplementary credit approvals, not basic credit approvals.
The hon. Member for Christchurch tried to suggest that local government borrowing is increasing all the time, and that local authorities must play their part in the Government's overall programme for reducing national debt--hence the idea of a five-year debt reduction strategy as suggested in the new clause. Indeed, the new clause would make the issue of any SCA subject to local authorities publishing and submitting to the Secretary of State a five-year strategy of that kind.
The new clause does not deal with basic credit approvals, or with how local government will pay for them or manage the debt. The condition would apply to any SCA, not just to SCAs issued under this initiative. I am not sure that that was the intention of the Opposition--although they may have intended to contrast SCAs issued under the capital receipts initiative for local authorities--a debt-increasing move--with the Chancellor's five-year reduction plan for the PSBR.
Sir Paul Beresford:
I have not yet heard an answer to my question. In helping local authorities to control their debt, is the hon. Lady going to bring in a reduction in
Ms Armstrong:
Opposition Members should listen more carefully. I have answered that three times today; I also answered it on Second Reading and in Committee. This is additional spending--I have already accepted that it is.
Sir Paul Beresford:
So the answer is yes?
Ms Armstrong:
If it is additional spending, it means that there will be no specific measures to reduce what is already committed spending by the same amount--otherwise, it would not be additional spending.
Sir Paul Beresford:
So the answer is yes?
Ms Armstrong:
Opposition Members are having trouble keeping a straight face, and if we go on much longer like this, the whole House will have the same trouble. We know that the Conservatives are not serious about dealing with housing need, which the Conservative Government left in a state of desperate neglect. That explains the need for this Bill.
| Next Section
| Index | Home Page |