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Lord Rooker: It is on Amendment No. 48 that the figure of 750 million comes in. People always want to know what the cost of an amendment would be. The Opposition tend not to want to know that; they simply want to use an amendment to make a point. I am very depressed to have to announce to the noble Baroness, Lady Maddock, that the amendment would mean that the money available nationally for redistribution to spend on housing would be reduced by 750 million—three quarters of 1 billion—for what, in the 25 per cent and 15 per cent figures, look like small adjustments of the pooling percentages.

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We are dealing with big money for what looks like a little bit of a fairer system. The money is from the sale of assets that taxpayers have funded through the years, one way or another, which would not be available to meet the most pressing needs. Given the politics and policies of the Liberal Democrats, I do not believe that they would genuinely want to support an amendment that would provide 750 million less for redistribution. True, the money would remain where it was, but it would be less available for redistribution to the authorities in greatest need.

Amendment No. 49 seeks to remove subsections (3) and (4). The provisions are intended to ensure that poolings apply only to housing capital receipts. Their removal would mean that the Secretary of State could extend pooling to all capital receipts. In some ways, the amendment would make sense only if it were consequential on Amendment No. 47, which turned up in a previous group.

The noble Lord, Lord Hanningfield, is back in his place. I am sorry; I turned my page over and did not go back, and I actually have the answer to his question. It is very important that the art gallery in southern Essex is not prevented because Rooker did not have answer. So long as the trust uses money for capital expenditure purposes, the Bill will allow that, as now. If it is capital for capital, there should be no difference. However, as I say, be careful of entering the art market.

Baroness Maddock: I thank the Minister for his reply. As I said, I did not expect that he would accept the amendment. He made much play of taxpayers funding housing and its being a national asset. In my last years in local government—the last years of Tory government—the amount of money spent nationally on housing diminished rapidly, and it did not increase under this Government in their early years because they stuck to the Tory spending plans. A lot of the money was from a long time ago. I question whether it is right for us to penalise people who are doing their best in present circumstances for what happened in the past.

The Government, particularly in recent weeks, have boasted about how much money they will put into housing, and especially how much extra money will go into the affordable housing communities plan in the South East. I put the figures that the Minister gave into that context, which makes them look rather different. I suspect that we shall return to the issue on Report.

Lord Rooker: I am speaking off the top of my head. I take the point that the noble Baroness makes. As she has said on more than one occasion, she now lives in the North. The figure of 750 million is not far short of what the Government plan to spend not in the South East, but in the market renewal pathfinder areas in the Midlands and the North, where there has been a collapse and we need to rebuild communities. The figure is 500 million to 600 million, or something of

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that order. It is a substantial amount of money, and 750 million is not to be sniffed at. One can make good use of 750 million.

Baroness Maddock: I hope that I did not give the Committee the impression that I sniffed at it. I was indicating that there was a bigger housing finance picture. Before the Minister gave his point of view, my next sentence was going to be about my intention to look in rather more detail at the finance before Report so that we could continue the debate at a later stage.

Another point that I made is that the matter is not only about finance. It is about giving local authorities the freedom in their own area to do what they think best there. We as a party—we make no bones about it; the Liberal Democrats have said it for years—would give a greater proportion to the local authorities, so that they could decide what they wanted to with it. We have been totally consistent about that. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 49 and 50 not moved.]

Baroness Hanham moved Amendment No. 51:

    Page 5, line 41, leave out subsection (5).

The noble Baroness said: The purpose of the amendment is to probe what is meant by the power to allow the Government to set off a sum that a local authority is liable to pay them against a sum due to it from them. The Explanatory Notes are surprisingly silent on that point.

As the clause is written, it could, for example, mean that by virtue of subsection (3) a regulation could be laid requiring a local authority to pay all or part of its capital receipts to the Government. Although we are theoretically moving away from a specific grant regime, the clause might mean that the Government could declare that they would have paid a grant to that local authority but, because it was due under the subsection (1) regulation to pay a capital receipt, they would not then pay the grant.

If we read the provision correctly, is it not a possible licence for the Government to make their own decisions and—I would not use the word gerrymander but, since we have had a political thrust every so often—to gerrymander? A government could alight on a receipt received by, say, Lancashire County Council and say "We'll have that under Clause 11(2)(b)". Let us say that the receipt was of 1 million. The Government could say under the power that they were liable to pay a grant of so much to Lancashire County Council under the settlement formula, but actually would net off 1 million and let the council keep the capital receipt that it would otherwise have had to hand over.

The power could be applied selectively under the Bill, allowing favoured councils to benefit from capital receipts, while unfavoured ones—whether politically or for any other reason—would have payments to them docked. That surely is not satisfactory. There is already enough messing about in the small print of the annual financial settlement. It would allow a

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government to have a pretext for squeezing authorities, a power that—however much we might wish otherwise—they might be tempted to use politically.

If the Government intend to use the power—the Minister must make it clear how and when it would be used—it must be done openly. Every authority should get its due under the settlement, and then the Government should be required to claw back each capital receipt openly and justify it in each case, if that is what the ultimate decision of Parliament should be. The power under the subsection would allow the Government, in effect, to confiscate a capital receipt even if their action was under challenge in the courts. The amendment would block what is thus a potential route to selective action. I beg to move.

Lord Rooker: I can dispose of the amendment quite quickly. Subsection (5) is simply an administrative measure to ensure that we do not have checks and payments going in two different directions, one from the local authority to the Government, and one from the Government to the local authority. That is its only purpose. It is a sensible measure that does not affect the overall resources available to any local authority, so all the talk of favoured authorities does not apply. What the noble Baroness suggests could not happen. The provision is purely an administrative measure to make sure that money is not flowing two ways when it can simply be netted off.

Baroness Hanham: The whole paragraph is about the use of capital receipts. Is the expectation that a local authority due to pay more than 75 per cent of its capital receipts would do so, but that the Government would net off some other capital issue—not capital receipts, but perhaps housing improvement programme money? I do not think that the provision is as clear as the Minister says. The Government will pass capital receipts to other authorities, but they will not pass them back to the ones that they have taken them from. So what other money is involved in this cheque that is not going backwards and forwards? That is the burden of the question.

5 p.m.

Lord Rooker: I cannot answer the detail of that question but the resources of a particular authority will not be altered by the measure that we are discussing. Wherever the receipts come from and whatever the pooling arrangements may be, the resources of a particular authority will not be altered by the provision in subsection (5). It is purely an administrative measure. It is not even, as it were, central to policy. If it were not included, money would flow in two directions: money that the Government may pay to an authority and money that the Government expect to receive from an authority. It simply does not make sense for cheques to flow in two directions. As I say, the resources of a particular authority remain unaltered but the provision may result in someone saving the postage required in sending a cheque.

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Baroness Hanham: I shall not pursue the matter but I still think that it depends which moneys are involved here. Confusion may arise with regard to other forms of capital flowing to an authority. I refer to money that cannot be considered as revenue and, therefore, must be capital but which is not a capital receipt as that would flow in the other direction. As I say, I shall not take the matter further but perhaps the Minister for his own satisfaction will consider it further at some stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 52 not moved.]

Clause 11 agreed to.

Clause 12 [Power to invest]:

[Amendment No. 53 not moved.]

Clause 12 agreed to.

Clause 13 [Security for money borrowed etc]:

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