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Mr. David Curry (Skipton and Ripon): If you believe that, Mr. Deputy Speaker, you will believe anything.

I assume that it is a matter of common sense that denying development in the south does nothing automatically to encourage it in the north. We must be careful not to make that rather silly arithmetical assumption. The north has its own needs which must be dealt with by policies designed to address them. We know what they are: the exodus from cities, whether to the immediate neighbourhood or beyond; surplus housing; dismal education performance, as the Office for Standards in Education reports in Leeds and Sheffield either have shown or are about to show; and problems of community safety which make people not want to live on estates. I shall address my remarks mainly to the subject of housing, so I am grateful to the Minister for Housing and Planning for remaining in his place.

In the north-east, for example, there is an annual population decline of 1.4 per cent.--3,500 people a year are expected to leave--but household numbers are increasing due to the phenomenon experienced across the country. There are 9,400 local authority voids--3.2 per cent.--but, across all sectors and the range of tenure, there are 77,000 unfit houses. The real problem is the inexorable rise in the number of properties that are difficult to let: 14 per cent. in the local authority sector and 10 per cent. in the housing association sector.

The north-east's annual clearance programme accounts for 1,400 properties a year, yet regional planning guidance provides for the building of 6,000 new houses a year. So, there will be a continuation of over-supply. It takes a lot of money to demolish properties--£16,000 a property under the Housing Corporation's scheme, "New Tools". There is already a dislocation of the planning process and real need on the ground.

Let us look at Newcastle slightly more closely. Of 36,500 council properties, 1,600--4.3 per cent.--are voids. The problem is one of turnover: 8,000 properties a year see a change of tenant. How on earth do we build a stable neighbourhood with a 20 per cent. turnover? The tenancy structure shows a division between very old people and youngsters. There is a great hole in the middle of tenants between the ages of 30 and 45, who have families and, let us say, jobs, who might play an active part in the community.

The reason for such a hole is obvious. One can buy a terraced house in a decent part of Newcastle for £30,000 or a semi-detached Barrett-type house on north Tyneside for less than £50,000. Why pay £40 a week rent when one can put that money into a mortgage?

Let us consider Sheffield--I see the hon. Member for Sheffield, Attercliffe (Mr. Betts) in his place. With a housing stock of 65,000 and the same problem of an ageing tenant population, the city calculates that in 10 to 15 years, up to one third of its tenants will have died or will need to move to different accommodation. There is no new generation of tenants that the city can identify coming along behind, which is one of the reasons why it is actively canvassing transfer options.

Let us take Liverpool, one of the greatest of our northern cities--the hon. Member for Liverpool, Riverside (Mrs. Ellman) is present. The council has 38,000 properties and other registered social landlords have roughly the same, but in the city there are 15,000

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too many properties, of all sorts of tenure. The local authority has embarked on a programme of mothballing or demolishing houses, simply because there is no use for the stock.

I shall not to continue my recital of statistics. Instead, I shall suggest three areas in which Government action is needed, the first of which is stock transfer. That activity received great impetus from the ability to set up housing companies being established under legislation introduced by the previous Government; the Minister for Housing and Planning and I sat on Benches opposite to those upon we now sit when that legislation was passed. The projected programme is for 300,000 transfers, but that includes the whopping Birmingham transfer of about 90,000 units.

There are decisions to be made. As the Minister knows, there is a problem with penalties on the early repayment of debt that are consequent on transfers being made. I hope that the hon. Gentleman will take a firm view of the size of transfer permitted: we do not want transfers from one monopoly to another. It is the nature of the management that counts, not the ownership. There is a real danger of great cities being carved up into zones, each of which has a monopoly provider.

I would prefer the division to be achieved in such a way that associations own properties in different parts of a city, so that tenants can compare the performance of different registered social landlords. In addition, we must encourage the development of mixed tenures within housing corporations, housing companies and housing associations, and encourage them to offer tenures across the full range, so as to achieve the sort of mixed development that we know is necessary.

We need a new concept of social housing. We must get away from its present characterisation as residual housing. We are witnessing the death of the council house, but not the death of social housing. We need to find a new definition and a new perspective on social housing, so that it addresses the social problems that hon. Members have identified.

The second issue I shall examine is that of VAT on home refurbishment and repair and on greenfield sites. Let me state clearly, so that there is no confusion, that I would be in favour of a uniform rate of VAT covering greenfield development and housing refurbishment and repair. I asked the Treasury how much that would cost. The reply was £670 million, but I do not believe a pound of it, for very good reasons.

Let us make some assumptions. Let us say that 175,000 new houses are built; at about £80,000 each, that brings in £700 million at 5 per cent. VAT--£600 million if social housing is exempted. According to calculations carried out two years ago by Business Strategies Ltd., we find that such a change in VAT leads to more small firms registering for VAT, more VAT being collected from those who are registered, and higher levels of activity. There are fewer empty homes--the Minister was and remains a great fan of the empty homes initiative--with about 30,000 properties being brought back into use. Let us assume an end to work on listed buildings being categorised as "new" so as to avoid VAT. The overall result is additional VAT receipts of more than £100 million.

If we use the English house condition survey--a little out of date, but the relative values still hold good--we find that the total declared private spending on

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improvement, repairs and maintenance is £20 billion, and public spending is £3 billion, giving £23 billion in spending across all sectors. That should yield £4 billion in VAT, but the actual yield is £1.78 billion. Either there is gargantuan evasion, or an enormous proportion of work is being done by people who are below the VAT threshold. I think the truth is probably a bit of both, but it is certain that the scale of evasion is immense.

Even if no extra building work results from a reduction in VAT, which is an extremely pessimistic assumption, and if no evasion occurs, which is an extremely optimistic assumption, so the two assumptions balance each other out, and VAT is charged on all building works, we are talking about a VAT figure of about £1.35 billion in today's prices. That second calculation shows a fall of £400 million in Government VAT receipts.

However, the measure would actually result in a net gain for the Treasury of between £300 million and £800 million. The Treasury reckons a loss only because it makes no allowance for any change in the rate of black work or lessening of evasions, or for whether small firms are registered for VAT and larger ones consistently charge for it. The Treasury makes no calculations in respect of whether customers would be happier to have proper builders and proper receipts than cowboys to whom they pay no VAT. We do not know whether private investors, contractors or regeneration agencies would carry out more property improvement and renovation. The chances are that they would, but the Treasury answer to every single one of these questions is no. I do not believe that.

I suggest that there should be a pilot scheme in three or four major conurbations to see what would happen. The VAT on greenfield sites need not be charged for the purpose of the experiment. Let us see what is right.

I do not expect the Minister to reply in this debate, but I shall make sure that Hansard has a clear record of the points that I have made, and I should like a letter setting out the figures, which are crucial to the Government's response to the Rogers report. The Treasury response, as always, has been calculated to give the least information, and has little credibility. The issue is extremely important.

I mention education briefly. Education action zones are fine, but the problems exist in far too many schools. We are beginning to learn that putting strong heads into individual schools will do a great deal more than the constant multiplication of zones, which last only for a limited period and are spread almost across the political spectrum.

Finally, the Government have a major decision to take. They must decide what their relationship will be with the regions and with local government in the regions--in other words, what political geometry they will use to address the issue.

We all know that the regional assemblies have floated off into never-never-land. Either the Government believe in local decision-making, a regional agenda and democratic accountability, or they do not. We need to know what they plan. The Government promised these things.


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