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Lord Ezra: My Lords, is it not a fact that the resources available for home improvement have fallen very substantially—by three-quarters over the past 10 years? Even though the 1989 Act provides for mandatory and discretionary grants, the resources available to local authorities have fallen to such a low level that very few of those can have effect.

The Earl of Lindsay: My Lords, the Government continue to commit significant resources to home renovation grants and other improvements in this area. As I have already stressed, even if the width, as it were, and quantity of this stream had been better defined, the accuracy with which we are delivering the benefits is considerably better. In terms of cost-effective delivery, the situation is much better now.

With continuing constraints on public spending, the Government are aware that they must consider carefully how best to use the resources at their disposal to ensure that maximum benefit is being obtained for those in need from every penny of public money spent. That is why, since the mid-1980s, the balance of subsidy has shifted away from "bricks and mortar" to suppliers, and has moved towards personal subsidy of rents in the form of housing benefit. That means that resources are targeted on those individuals who need them most.

Social rented housing, with rents set below market levels, will continue to play a vital part in housing people on low incomes. Affordable rents help people escape from the poverty trap and give them stronger incentives to work and save. They are also the right answer in public expenditure terms. We make resources available to the housing associations, the main providers of new social housing, through the Housing Corporation, which allocates the resources in its capital programme on the

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basis of the Housing Needs Index and on the value for money offered by individual housing association schemes.

I stress that the budget for the housing association sector is some £1.2 billion in 1995-96. The Housing Corporation confirmed that during the period 1992-93 to 1994-95, housing associations will have provided homes for 178,000 households—that is 25,000 more than the target in our manifesto. Over the next three years, it is expected that Housing Corporation and local authority expenditure together, and the private finance that they will attract, will produce a further 180,000 new lettings.

A number of contributors to today's debate questioned why the Government do not allow local authorities to spend all of their capital receipts. The noble Lords, Lord Williams and Lord Haskel, both suggested that one of the options would be a phased release of capital receipts. However, the Government believe that it is right that when local authorities sell assets they should use part of the proceeds to pay off old debt and so keep their council tax down. With local authority debts totalling some £37 billion at the moment and costing almost £4 billion per annum to service, it is quite right that the Government have that priority. As I said, the Government's long-term policy is that there should be prudent management of debt and optimum targeting of available resources.

I should like to touch on the very interesting observations made by the right reverend Prelate the Bishop of Oxford on the shortage of housing in rural areas. Since 1988, the Housing Corporation has run a special rural housing programme targeted at villages below 3,000 in population; 60 per cent. of the programme is targeted at villages of 1,000 or less; 40 per cent. at villages between 1,000 and 3,000. This programme is working well. Between 1989 and 1990 and the end of 1994-95, over 10,800 units were approved in rural areas; that is some 1,600 above target. The target for the 1995-96 rural programme will be some 6 per cent. of the Housing Corporation's new development programme.

The construction industry exercised a number of noble Lords, notably the noble Lords, Lord Howie, Lord Sefton, Lord Howell and Lord Dean. The Government recognise that the industry is an important part of the economy, accounting for 10 per cent. of the gross domestic product and also for an increasing share of exports, as was mentioned. It has an essential role to play in the creation of the nation's wealth and, to quote another noble Lord, if it contributes to the nation's wealth, it contributes to its health. Lower levels of investment are naturally of concern to housebuilders as well as other organisations not directly involved. However, no one can seriously question that the best answer for the construction industry in the long term is to deliver steady, sustainable, non-inflationary growth. Reductions in the number of spending programmes have been necessary to help us to achieve that. But we continue to have a substantial programme of housing investment—over £2 billion in England alone—providing work for the construction industry.

The construction output increased by 3 per cent. last year after three-and-a-half years of decline and the fall in employment has halted. New orders held up well after their strong resurgence in 1993, and sustained though

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modest growth is set to continue. British firms are also doing very well abroad. I would also point out that there have been major boosts for construction from private finance on transport projects. The noble Lord, Lord Howie, covered some of that area. It is now coming through elsewhere, particularly in health and education. Private finance initiative contracts worth up to £5 billion should be signed this year. New rules from 1st April have extended PFI to local authorities, providing over £75 billion worth of opportunities. In addition, the volume of private house building output was 7 per cent. higher in 1994 than in 1993 and the first quarter of 1995 was 2 per cent. higher than a year earlier.

Many noble Lords referred to the Latham Report. Perhaps I may update your Lordships on the progress achieved by it. The construction industry board is chaired by Sir Michael Latham and my right honourable friend the Secretary of State for the Environment is its president. It was established to oversee working groups set up to take forward Latham recommendations and to provide a channel for industry and client comment on any proposed legislation.

The Government have repeatedly said that they are in principle prepared to legislate and support Sir Michael's recommendations. However, legislation is subject to a number of provisos. Briefly, they are that we need to know what is wanted in terms of consensus. We need to know what practical legislative solutions can be devised to achieve what is proposed. A consultation paper on proposals for post-dated legislation in the area of latent defects liability and build insurance was published on 12th April. A second paper on fair construction contracts was published on 17th May. Responses to these are awaited or are being analysed.

There are plenty of initiatives in response to the Latham Report. There is plenty of progress and commitment from all the players involved, not least the Government. But I remind all noble Lords who touched on this matter that the majority of the recommendations contained in the report are directly addressed to the construction industry. I do not accept therefore the inference of the noble Lord, Lord Sefton, that the Government alone are responsible for pursuing the Latham Report.

The noble Lords, Lord Howie and Lord Sefton, touched on training in the construction industry. I remind them that the Latham Report acknowledged the importance of training and indeed the points they raised. The Government agree with that. We work with the industry to help sustain a professional workforce. The general enabling response that the Government are producing to the initiatives required by the report are helping in that direction.

Homelessness attracted wide and often inaccurate comment from noble Lords taking part in the debate. It is an extremely important topic and most of the Government's housing policies are directed to reducing it. I am pleased to inform noble Lords, particularly the noble Lord, Lord Ewing, that the latest homelessness statistics have reinforced some encouraging trends throughout the UK, not solely in England. The first three months in 1995 were the 12th successive quarter to show a reduction in the number of households accepted by English local authorities as statutory homeless over the same quarter 12

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months earlier. The noble Lord, Lord Stallard, suggested the contrary. The statistics also show that there was a fall of 11 per cent. in the number of households placed in temporary accommodation over the previous 12 months. The situation should improve further as more homes are made available through government grants to enable those local authority and housing association tenants who cannot at present afford to do so to move to a home of their own, releasing their existing home for a family in housing need.

The noble Lord, Lord Ewing, painted a dire picture of Scotland which is a long way from the truth. Sheltered housing has quadrupled since 1979; over 300,000 new houses have been built in Scotland since 1979. The total gross capital provision for investment by local authorities, Scottish Homes and Scottish new towns amounts to nearly £1 billion. On current plans, over the next three years a further £2.8 billion will be made available. The Scottish Homes development programme has been maintained at around the same level in cash terms this year as last year, at £320 million. Resources of over £540 million will be provided to local authorities in 1995-96; nearly £424 million will be available for investment in council housing in 1995-96. Scottish Homes attracted some £500 million in private investment over the past five years through its development programme. Its target for 1995-96 is £175 million. I did not recognise the country the noble Lord was talking about, though we both live in the same county up there.

The noble Lord, Lord Williams, was equally misleading about the proposals to reform the homelessness legislation. He admitted that he was picking up fag ends on this point. But, first, I encourage him to be patient for the White Paper to be published shortly; and, secondly, to take note of what I am able to tell him at the moment.

The Government's proposals to reform the homeless legislation are designed to achieve a fairer approach to the allocation of local authority and housing association tenancies. Under the proposals, local authorities would continue to have a duty to secure accommodation for families and other vulnerable people who have nowhere suitable to live through no fault of their own. The then Housing Minister, my right honourable friend Sir George Young, made clear in July 1994 that there is no question of vulnerable people, which includes families with children, not having a home. There is no question of families having to sleep on the streets or children being separated from their parents and taken into care. The Government are clear that the new legislation must continue to provide safety nets for families and other vulnerable people in need of accommodation to tide them through a crisis. The new provisions would ensure that those in real need would have a satisfactory and settled home for a reasonable period. The aim of the proposals is simply to secure fairer access to social housing.

There are no easy answers to many of the issues raised today, whether we are talking of homelessness, rented housing, the private sector, local authority housing or the fabric of housing itself. The Government must decide where the frontier should lie between state initiatives, private sector initiatives, owner initiatives and so forth.

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The Government have already achieved a revolution in redefining the role of the state, and housing has been at the heart of that revolution. Four million more households have become home owners. The right to buy has given millions of public sector tenants the chance to become home owners. Local authority tenants enjoy a significantly improved service from landlords, and the private sector has become a major partner in the Government's efforts to ensure that decent homes are available.

The Government do not intend to stop there. They continue to look closely at their policies and programmes. Indeed, many noble Lords will be aware that the Department of the Environment is currently preparing a housing White Paper which will be published before the Summer Recess. What matters most to this Government is that maximum benefit is being obtained for those in need from every penny of public money spent.

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