Mr Win Griffiths (Bridgend, Labour)

I remind the Committee that with this we are discussing the following amendments:

No. 59, in

clause 11, page 5, line 4, leave out from 'State' to end of line 5 and insert

'shall not in any circumstances interfere in the use of capital receipts by local authorities.'.

No. 69, in

clause 11, page 5, line 4, after 'use' insert 'by a local authority'.

No. 70, in

clause 11, page 5, line 5, leave out 'a' and insert 'that'.

No. 60, in

clause 11, page 5, line 6, leave out subsection (2).

No. 61, in

clause 11, page 5, line 6, leave out from beginning to end of line 22.

No. 67, in

clause 11, page 5, line 6, leave out 'in particular'.

No. 51, in

clause 11, page 5, line 7, leave out from beginning to end of line 10.

No. 62, in

clause 11, page 5, line 11, leave out from beginning to end of line 12.

No. 3, in

clause 11, page 5, line 11, leave out from 'requiring' to 'of' and insert

'such amount as the Secretary of State shall specify, being not more than 20 per cent.'.

No. 40, in

clause 11, page 5, line 12, at end insert—

'(c) make provision requiring an amount not exceeding sixty per cent. of a capital receipt to be used only to meet capital expenditure in connection with the local authority's functions under part II of the Housing Act 1985 (provision of housing).'.

No. 63, in

clause 11, page 5, line 12, at end insert—

'(2A) Regulations made under subsection (2)(b) may only include the following in relation to payments to the Secretary of State—

(a) in relation to the disposal of dwellings, the maximum amount that can be specified is 25 per cent. of the capital receipt; and

(b) in relation to the disposal of any other asset, the maximum amount that can be specified is 15 per cent. of the capital receipt.'.

No. 39, in

clause 11, page 5, line 14, after '2(b)', insert 'and 2(c)'.

Government amendment No. 25.

No. 41, in

clause 11, page 5, line 20, leave out subsection (5).

Mr Desmond Swayne (New Forest West, Conservative)

The Minister was determined to make the case that his proposals were designed to generate more revenue for expenditure on housing. I do not doubt for a moment his sincerity in seeking to achieve that objective. My concern is that the proposals will have the opposite effect.

The Select Committee's report refers to the evidence produced by CIPFA. It quotes Mr. Bisland of CIPFA as saying:

''I think it is more likely that Members are going to be reluctant to sell assets if they think they are going to be pooled''.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

May I short-circuit this discussion and save the Committee a lengthy detour and the hon. Gentleman some embarrassment by pointing out that the policy that we propose relates only to receipts from the sale of council houses. The council itself has no discretion. It cannot generate sales. It is entirely a matter for the house buyer to decide whether they wish to exercise the right to buy. I am afraid that Mr. Bisland's argument has no force or effect.

Mr Desmond Swayne (New Forest West, Conservative)

Ah, well, I will illustrate that the principle of what Mr. Bisland said still holds good. I will refer to an asset currently possessed by New Forest district council, which falls within the terms of subsection (4)—a mobile home park worth in excess of £11 million. It seems reasonable to ask why a district council is sitting on such an asset when there is a such a shortage of affordable and social housing in the New Forest, not least because of the Minister's Whitehall-imposed policy, which prevents the district council from using its resources to acquire more housing of that nature, but rather directs it to use those resources to renovate its existing housing stock. Such a policy might be appropriate to a northern metropolitan council that has not maintained its stock over many years, but it is inappropriate to the New Forest.

I leave that matter aside, as I am sure that the Minister would not want me to go down that road.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

The hon. Gentleman appears determined to dig himself further into his hole. Nothing in our proposals would impact on this mobile home park in the New Forest, because its occupants will not have the right to buy and therefore the proceeds from any sales will not be subject to the pooling procedures.

Mr Win Griffiths (Bridgend, Labour)

Order. You are pursuing an interesting point, Mr. Swayne, but under which amendment are you raising it?

Mr Desmond Swayne (New Forest West, Conservative)

Amendment No. 59, Mr. Griffiths. It has a certain simplicity and attraction. The difficulty that the members of the council face in disposing of the asset is that there is a political cost, because the occupants of the park do not want it to be sold. They would much rather that it be owned by the district council than by that unique breed, the owners of mobile home parks, who, as I am sure the Minister is aware, often lack the social and managerial skills required to make a success of them.

While the law is so stacked against the tenants, they do not want to be sold off by the district council, so there is a political penalty. The district council has to balance the question of selling the asset to generate revenue to provide housing against the political cost of the campaign mounted by the residents not to be sold off. If the district council will not retain any of the revenue for its own purposes, the motive for selling will disappear and councils will sit on such assets rather than lose control of them.

Ms Kali Mountford (Colne Valley, Labour)

I am confused by the hon. Gentleman's inconsistency. How does what he is saying fit with his party's previous policy of allowing councils to use such capital receipts only to repay debt?

Mr Desmond Swayne (New Forest West, Conservative)

The repayment of debt is a perfectly legitimate use of such assets, because it creates the financial circumstances that enable councils to build. To me, that is evident and straightforward.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I am grateful to my hon. Friend for raising the important issue of mobile home parks, because it is a little known fact that my constituency in Surrey has the second largest number of permanent mobile homes of any parliamentary constituency in the country. That is known by some hon. Members. I can tell the Government Whip, the hon. Member for Oldham, East and Saddleworth (Mr. Woolas), that the hon. Member for Lancaster and Wyre (Mr. Dawson) and I see eye to eye on this issue, although we have little in common politically on any other subject. In fact, his constituency has the largest number of mobile homes.

This important issue is not the Minister's direct responsibility, but he will be concerned to learn that a significant proportion of the mobile homes in my constituency have recently been under water. That in itself is cause for grave concern, although I know that the Office of the Deputy Prime Minister is not responsible for the Environment Agency.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

In the bipartisan spirit of the hon. Gentleman's remarks, may I say that I had great pleasure in visiting a mobile home park in the constituency of my hon. Friend the Member for Lancaster and Wyre. I suggest that the hon. Gentleman pay a visit to the mobile homes in the constituency of the hon. Member for New Forest, West (Mr. Swayne) to tell those constituents about their legal position? Their Member of Parliament

appears to be labouring under the delusion that they might benefit from the right to buy.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I do not think that my hon. Friend labours under any such delusion, but I shall be very happy to visit the mobile home dwellers in his constituency when I have a moment free. At the moment, I am required to visit my own. Tomorrow evening, I shall talk to a group of them about the rather perilous circumstances in which they have found themselves as a result of floodwater—not as a result of recalcitrant landlords on this occasion.

All joking aside, the Minister will know that the legal position of mobile home owners is far from satisfactory. His noble Friends are discussing the subject with members of the all-party parliamentary group for the welfare of park home owners, and I hope that the Minister's Department will find some legislative time for it. It is a shame that there is nothing on the matter in the Bill, but we hope that it will be included in the draft housing Bill. The Minister is adopting the posture of someone at an auction; he is carefully not moving his head a millimetre in any direction, lest it be construed as a signal that he did not intend to send.

I return to this group of amendments and the Minister's hurried reply at the end of our last sitting when time was short. We had a long debate on the proposals, but members of the Committee may wish to explore some of the issues raised in the light of the Minister's reply.

The Bill has been presented as giving freedom to local authorities, but the clause does precisely the opposite. The Minister seems to expect to receive plaudits for having made a modest, and probably administratively essential, concession to the 34 debt-free local authorities that will be most significantly affected by the measure. The transitional arrangement that the Minister announced on Tuesday is an improvement, but it is a concession made by the emperor rather than the underpinning of a genuine dispersion of power to the local authorities—

Mr Geoffrey Clifton-Brown (Cotswold, Conservative)

Who is the emperor?

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

When my hon. Friend takes over from me in leading for the Opposition for the remainder of our proceedings, he will quickly see who is the emperor. The Minister and his Secretary of State are giving themselves huge powers and conceding small amounts of power to local authorities. The Bill is presented as a wholesale distribution of power that gives freedom and flexibility back to local authorities, but it is the opposite. It is the accretion of a huge additional power—the power of the purse string—to the centre and the granting of concessions when the Minister feels so inclined.

Mr David Curry (Skipton & Ripon, Conservative)

My hon. Friend started by referring to God, and is now down to emperor. May I suggest that he moves rapidly down the hierarchy to clerk, which is closer to reality?

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I have some respect for the Minister and I have noticed that the Deputy Prime Minister makes a point of sitting next to him; he is closely

huddled with the Minister whenever any important complex and technical matters are discussed. I believe that the Minister is the driving force behind these initiatives.

Mr. Raynsford rose—

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I am happy to give way to the Minister as he modestly seeks to declaim his position.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

I am most grateful to the hon. Gentleman for giving way and I thank him for his kind remarks. However, I suggest that he defer to the views of the right hon. Member for Skipton and Ripon (Mr. Curry), who speaks on this subject from experience.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

There is a barbed intention there somewhere, but it has totally passed by me—

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

Or through you.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

Or through me, as the hon. Gentleman says. I look forward to my right hon. Friend's response to the Minister's remarks in due course.

I return to the serious subject of the debate. I want to pick up on several things that the Minister said, and on some things that he did not say, although I understand that he lacked time. He said that in practice clause 11 would affect only debt-free authorities. I will explore that further, because the Minister will leap to his feet to correct me if I have misunderstood the way in which the current system works.

Casting my mind back to my first ever—terrifying—Standing Committee in 1997, I understand that local authorities, if they are not debt free, are required to set aside 75 per cent. of their receipts from housing disposals. That set-aside receipt is, in effect, offset against their housing debt. The Minister says that only the debt-free authorities will be affected by the measure in clause 11. However, I should like to know what will happen to the debt of the indebted authorities. Those authorities would have had their 75 per cent. set-aside offset against their debt, but will now have a 75 per cent. levy taken by the Secretary of State.

The answer lies in clauses 40 and 41, in which the Government give themselves the power to pay off local authority debts—not all local authority debt, but the debt that they choose to pay off. If I am not misunderstanding what will happen, we will move from a situation in which local authorities' receipts are channelled through the set-aside system into repayment of their housing debt, to a system in which local authority receipts are sequestered by the Secretary of State. The Secretary of State will then address the problem of those local authority debts not being repayable because of the sequestration by giving himself the power to distribute largesse in the form of debt repayment on behalf of the local authorities.

That seems to me to be a huge accretion of power to the Secretary of State. I do not want to fast forward to clauses 40 and 41 at this point, but as I understand it the Secretary of State has no obligation to repay all local authority debt, or any class of local authority debt, but has the power to do so. That is a huge

discretionary power. The projected sums for 2003–04 are some £800 million. That is some pork barrel.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

In the spirit in which the hon. Gentleman spoke, saying that he would expect me to jump to my feet if he was incorrect in any respect, I shall make two points.

There is no connection between the provisions that we are currently debating and those in clauses 40 and 41 concerning set-aside debt. We will deal with the issue of overhanging debt when we reach those clauses. The Government facility to extinguish the debt of authorities that have transferred their housing stock is in lieu of the continued subsidy provision which otherwise would apply to those authorities that continued to hold stock. It is not a special treatment and is not connected to this clause.

The clause replaces a regime under which 75 per cent. of certain receipts had to be set aside and were then used by the Government to support increased capital investment for other authorities, with a regime that does that explicitly. The 75 per cent. will be transferred to the Secretary of State to support capital investment by all authorities. That is simply a change in the administrative arrangements. There is no change in policy, and no change in the application of finance, because currently there is no statutory obligation to repay debt under the set-aside regime.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I appreciate the Minister's intervention, but it is not clear to me what happens to the local authority debt that cannot be repaid. There may be no statutory obligation to repay debt, but I understand that the set-aside receipt can be used to repay debt.

What will happen to the housing debts that local authorities have accrued, when 75 per cent. of their sales receipts are creamed off by the Secretary of State? The Minister says that there is no connection to clauses 40 and 41. However, I suggest to him that there must be a connection, because the overhanging debt must be correspondingly larger since the local authorities will have a smaller receipt, the Government having taken 75 per cent.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

No, there is no connection. The overhanging debt applies only in circumstances in which authorities transfer all of their housing stock and the receipt is insufficient to cover the outstanding debt. In those circumstances, the repayment of overhanging debt would avoid the otherwise bizarre position of the authority continuing to receive housing subsidy from the Government to meet those previous debt costs even though the authority no longer had any housing stock, which anyone with experience of the matter will realise would be nonsense.

That is the purpose of the overhanging debt provisions. They do not relate to the normal processes whereby authorities may reduce their debt through the application of receipts from right-to-buy sales.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

If the Minister reads clause 40, he will see that while he asserts with great confidence how it will be used in precise form, it states nothing of the

kind. It gives the Secretary of State a wide power to repay local authorities' debts. I must press the Minister on the question of debt. How will local authorities repay the debt attached to housing stock sold under the right to buy when the Secretary of State is taking 75 per cent of the receipt? What is the mechanism and how will they account?

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

There is a simple explanation. The authority will continue to qualify for a housing subsidy that will meet the repayments on the outstanding debt in the same way that has applied in the past, so there is no change. It will be free to use its 25 per cent. of the receipt for whatever purpose, plus any other receipts where it will be entitled to use 50 per cent. to extinguish debt should it choose to do so. It will be a local authority's policy decision and authorities will have to find a balance between the advantages of reducing debt and the advantages of using those sums for investment.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

Throughout our debates, the Minister has extolled the virtues of a proper accounting practice approach. He tells us that the system will operate so that councils receive a capital receipt, of which the Secretary of State takes 75 per cent. The debt remains with the local authority, and the Secretary of State then disburses revenue funding to that authority to continue to service a debt that now supports an asset that no longer belongs to the authority.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

No.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

Well, that was my understanding of what he said, but it seems to me the antithesis of appropriate accounting practice. I would have expected that a capital receipt from the sale of an asset would be used to pay debt associated with the asset.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

On reflection, the hon. Gentleman will realise that it would be impossible for local authority accounts to be organised on the basis of a separate debt repayment regime for every property. The arrangements apply to the outstanding aggregate debt. That has always been the case, and there is no change. The difference in clauses 40 and 41, which relate to overhanging debt where there is a total stock transfer, is that the authority ceases to be a landlord and to hold stock. Therefore, it would be inappropriate for that authority to continue to receive housing subsidy.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

There is nothing in clauses 40 and 41 to limit their application to those cases, but I will not anticipate the long and enjoyable debate that my hon. Friend the Member for Cotswold (Mr. Clifton-Brown) will have the pleasure of engaging in with the Minister.

I move on to another point that the Minister made in his reply. I did not intervene at the time because time was so short. That is a generous interpretation; I tried to intervene, but the Minister would not allow me to do so for the same reason. He talked about the increased funding that the Government are making available for affordable housing provision. Will he tell

the Committee how many more affordable houses are being built this year as a result of that increased funding than were built in the last year of the previous Conservative Administration in 1996?

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

As the hon. Gentleman will know, there has not been an increase because the Government have had to address two crucial factors.

The first was the need to increase grant significantly from 56 per cent in 1997–98 to 68 per cent. in the current financial year to ensure that housing was affordable to people rather than leaving them dependent on benefit. I am sure that the hon. Gentleman will agree that that is an important policy consideration. The second factor is that the profile of the new build programme has been changed dramatically to concentrate on areas where there is the greatest shortage, which as he will know—this is not difficult economics—are concentrated predominantly in high-cost areas. Therefore, the unit costs of individual homes provided by registered social landlords are substantially higher than when a rather higher proportion of the programme was being built in parts of the country where there was not a great need and where homes that were built with registered social landlords sadly remained empty and in some cases had to be demolished.

There has been a significant change in both the affordability of the homes being built and their location, which has had a significant impact on the costs. So for any given amount of money, fewer homes can be produced. That is why the Government are increasing and will continue to increase investment in housing, as my right hon. Friend the Deputy Prime Minister will make clear when he announces the communities plan next week.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

The approximate translation of that long intervention is, ''It's a fair cop. We have built only two thirds of the number of affordable houses this year that the Conservative Government built in 1996.'' The Minister should be careful about singing about his record when the end result is so poor.

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

Another point in the Minister's intervention that was interesting was that he claimed that the Deputy Prime Minister and the new housing policy would ensure that extra money went to build affordable houses in high-cost areas. Is that not our argument against pooling and the effect on debt-free authorities? Those authorities tend to be in areas that need affordable housing and the Government are taking money away from them in the clause.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

Absolutely. The Government have a concept of housing need that does not recognise the reality in large parts of south-east England, which is that people in quite well-paid, full-time jobs can no longer afford market housing. That has changed the nature of what social housing has to do. In areas like that of the hon. Member for Kingston and Surbiton (Mr. Davey) and my area social housing is needed to provide housing for people who are earning what in many parts of the country would look like good wages, but who cannot afford a mortgage for any property that is on the market. I am sure that the Minister understands that issue.

So we have two distinct demands for affordable housing. In areas of the country where average wages can support mortgages for market housing, social housing needs to be provided for those who do not have full-time, properly remunerated employment, who are disadvantaged in some way or who are unable to enter the work force. In housing hotspots, which are not exclusively in the south-east, social housing is required for people who are fully participating members of the work force with good wages and salaries, but who have no hope of supporting a mortgage to buy even the most humble dwelling. That issue goes to the heart of the objection of hon. Members on both sides of the House to clause 11. They believe that it will allow the Government to sequester the capital receipts of local authorities in areas of high housing stress. Figures show that there is a strong inverse correlation between sales of right-to-buy housing and indices of deprivation. Right to buy is strongest in the more affluent areas, and those receipts are being attacked in the clause.

I asked the Minister about the role that total cost indicators played in the past and continue to play in limiting authorities' ability to spend capital sums on procuring affordable housing because of the way the market operates. In the past, that has been a serious constraint on the ability of authorities in high-cost areas to recycle capital funding into the provision of new, affordable homes.

The Minister is fond of reeling off a list of authorities that have not spent all their housing receipts on providing affordable housing. Things may be improving, but I would like him to acknowledge that a factor in the equation is an inability to find development or purchase opportunities within the total cost indicators.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

I am happy to respond to the hon. Gentleman, as I did after our last sitting when time had expired. I told him then that, although I recognised that the total cost indicator regime had acted as a break on development in some high-cost areas, it was not now a major constraint for several reasons. First, the change in funding in terms of the grant level would considerably reduce the affordability problems created by high-cost development. Secondly, the encouragement of partnership with the private sector and registered social landlords should make it possible, through section 106 and other planning agreements, for schemes to be developed under which a proportion of the site and land would be made available by the developer. The terms of the agreement would determine how far it was possible to develop cost-effectively. Authorities have the means to negotiate arrangements under which they can secure affordable housing as part of section 106 agreements and to do so cost-effectively.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I understand what the Minister is saying, but I ask him please to bear it in mind that when those developing market housing enter into section 106 agreements to provide land for affordable housing, those who buy in the marketplace subsidise the affordable housing sector. The economics are clear and it applies particularly in the south-east. Although

that may be acceptable to the Government when the market housing in question is very expensive—what the Deputy Prime Minister likes to call executive housing—at the bottom end of the marketplace it must mean that even fewer people can afford to step on the ladder.

Mr. Raynsford rose—

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I will give way to the Minister, but I do not want to labour the point.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

I simply ask the hon. Gentleman to bear it in mind that, given the affordability issues, which must be a major driver for house builders in determining pricing policy, there is not a straightforward subsidy from those buying market properties to those getting sub-market properties. Other factors are involved, including the impact on land prices and constraints on the developer's profit. The issue is much more complex than the hon. Gentleman suggests.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

The Minister is right; the equation is complex and the effect on land values is an important factor. This is probably not the place to have that debate, but it would be interesting.

Mr Andrew Turner (Isle of Wight, Conservative)

Will my hon. Friend give way?

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I should like to move on, if my hon. Friend will allow me.

We offered the Government a compromise in the form of amendments. We were picking up on a cross-party concern about the effect of clause 11. However, the Minister snubbed any suggestion of a compromise, and the transitional arrangement that he has offered is a meagre response to the concerns that have been expressed on both sides of the Committee.

The hon. Member for Dagenham (Jon Cruddas), as a representative of what I think will be the largest single loser among debt-free authorities, has a significant interest in this matter. That debt-free authority stands to lose the largest amount of money.

Mr Desmond Swayne (New Forest West, Conservative)

Twelve million pounds.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

Indeed, yet the hon. Member for Dagenham is serving on the Committee. I do not see any other Government Members who have concerns about this issue on the Committee. Perhaps I can correlate the hon. Gentleman's presence to the comment reported to have been made by a Minister of State in the other place that Barking and Dagenham was likely to be the only one of the 34 debt-free authorities which the Government deemed to be in housing need. I assume that the hon. Member for Dagenham has received a private assurance that when the communities plan is made public, which according to the original schedule would have been before this debate, there will be good news for the people of Barking and Dagenham. I am afraid that the other 33 debt-free authorities do not anticipate the communities plan bringing them good news. That is our concern.

Clause 11 is not about securing reinvestment in housing stock. If it were, the Government would have

accepted the amendments that would have ensured that right-to-buy receipts were recycled into new housing provision in the areas where they were generated. The clause is about increasing Government control and patronage; redirecting funding to the Government's favoured areas; and reinforcing the Government's determination to ignore the real issues in the areas of greatest housing stress.

Mr Patrick Hall (Bedford, Labour)

Will the hon. Gentleman briefly outline what evidence he has for saying that none of the other debt-free authorities has any housing need?

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I do not have evidence, because that certainly is not my perception. I am reporting to the Committee a reported—

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

Tittle-tattle.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

It is not tittle-tattle. I am reporting the comment reported to have been made by a Housing Minister to a representative group outside Parliament—none the less, I think that it was authoritatively made—that of the 34 authorities, Barking and Dagenham was likely to be the only one that the Government regarded as being in housing need.

Mr Jon Cruddas (Dagenham, Labour)

I can categorically assure the hon. Gentleman that, in all the lobbying that takes place during these processes, and in the discussions with Ministers, no assurance has been given to Barking and Dagenham. There has, however, been much discussion about the outstanding housing needs in the borough and the hopes that the Government will confront those in their broader housing strategy, of which this measure forms only a part. I just wanted to clarify for the record that there had been no unequivocal statement that we would receive net gains in the total package. The arguments have been advanced thoroughly, however.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

Well, the Government Whips must have looked at the hon. Gentleman and decided that he was reliable material anyway, even in the absence of such unequivocal reassurance. We shall see. When the communities plan is announced, Opposition Members will remember this debate and look carefully at which of the 34 debt-free authorities are privileged to receive some benefit from it. I know that Barking and Dagenham has a real problem, so we will be delighted to see it taken care of properly. However, I suspect that we will be disappointed to find that many of the other 33 authorities do not benefit.

The point that I, and others in the debate, have made is that the lack of affordable housing in the areas that will be hardest hit by the provision will lead not only to a housing crisis, but to a breakdown in the delivery of public services. That goes to the heart of all the matters that the Government say are their principal concerns.

The lack of affordable housing prevents the proper delivery of policing services. Most recruits to the Surrey force commute into Surrey from outside the county. That is in stark contrast to the situation that

prevailed only a couple of decades ago, when the law required police officers to live within six miles of their police station. Police officers now routinely travel long distances from Hampshire and Kent to Surrey, invariably by motor car, with all the negative consequences that that entails. More than half of the police recruits live out of the county.

There is a crisis in the staffing of hospitals. When I was privileged to be an Opposition health spokesman and travelled around the country in that capacity, I did not encounter that problem in other parts of the country in the form in which it is found in the south-east. I do not say that hospitals in other parts of the country have no problems, but they do not have the persistent, chronic and substantial staffing problems that are found in hospitals in the south-east. In my area, for example, 20 to 25 per cent. of nursing establishment posts at Ashford and St. Peter's hospitals NHS trust are unfilled; that has been the case for a long time, and consequently there are huge agency staffing bills.

There is a crisis in the delivery of social services, where relatively low-paid social workers cannot be recruited and retained, and there is a crisis in education. Surrey now has the highest turnover of secondary school teaching staff of any shire county. If I visit schools in my constituency—I know that other hon. Members will have had the same experience—and talk to head teachers, they tell me that there are two polarising trends among teaching staff. First, there is a cadre of young, relatively inexperienced teachers who work for two or three years at the beginning of their careers before moving on in search of a place where they can afford housing.

Secondly, there is the increasing feminisation of the teaching work force. In Surrey, more and more secondary school teachers are women whose salaries are subsidised by a husband or partner who is working in a well-paid private sector job. Thank goodness they are there, or there would be no teachers at all, but the absence of mature male teachers in secondary schools is a serious problem, particularly for male pupils who do not have male role models at home.

Ms Sue Doughty (Guildford, Liberal Democrat)

Does the hon. Gentleman agree that another major problem in Surrey is delayed discharges from hospitals? That is related to the fact that we cannot get people to work in nursing homes or to care for people in their own homes. The prohibitive cost of housing means that such workers cannot afford to live in the area, or, if they do live in the area, they cannot afford to do the work and will seek work that is more highly paid.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

The hon. Lady is right. I think, Mr. Griffiths, that you would probably prefer that we did not widen the debate into a general analysis of the problems of delivering public services in the south-east.

However, the Minister, who I assume is responsible for housing—

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

No.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

Wisely, the Minister says that he is not, but he is certainly responsible for snaffling the

capital receipts from those 34 authorities, who would have liked to be able to spend them. The issue goes far beyond the important issue of the provision of affordable housing. It goes to the heart of whether the Government will be able to deliver the improvements in public services that they say they want, and into which they are putting a large amount of money.

The large increases going into the NHS in Surrey, for example, are expected to allow the system to stand still. All other things being equal, it is expected to keep its head above water, but it will not deliver the step change in quality and volume of services that the Government hope for. The root cause of the problem is the housing crisis. It means that people on public sector salaries, which are broadly similar throughout the country, cannot afford a workable and worthwhile lifestyle in areas of high housing cost.

Mr Andrew Turner (Isle of Wight, Conservative)

I do not wish to widen the debate, but does my hon. Friend agree that this problem is not limited to the areas of the south-east with the highest costs? Even in my constituency no fewer than 90 members of staff at my district general hospital were recruited from the Philippines.

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

Only 90.

Mr Andrew Turner (Isle of Wight, Conservative)

Thank goodness it is only 90. They are needed elsewhere in the country too. My hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) has got to the nub of the matter. Public sector salaries do not reflect market forces. The only way to solve the problem, regrettably, is through social housing. If we had a system that better reflected market forces, we would not need to argue about the social housing receipts to the extent that we have today.

Mr Win Griffiths (Bridgend, Labour)

Order. We obviously will not have a clause stand part debate, but could I ask hon. Members to tighten up some of their interventions?

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

The point has been made. We all understand how crucial the provision of affordable housing is to the operation of our society, particularly in the delivery of good public services. On top of all the other funding pressures on the 34 authorities such as the inadequate local authority finance settlement and the continuous pressures for higher spending in education and social services, they now face an attack on their capital receipts.

It all fits into a pattern. Authorities in areas that are perceived by the Government to be rich and leafy are to be attacked. They are to have their capital receipts sequestered; they are to have their grant funding cut; they are to be forced to make council tax increases that are massively above inflation. The Surrey police precept this year will rise by 40 per cent. just to try to maintain services. Many county councils across the south-east will be increasing their council taxes by 12, 13, 14 and 15 per cent. because of the inadequacy of the Government's funding and the pressure to increase the passporting of money to schools.

This is also an attack on the right to buy. The Government do not like the fact that it delivers real freedom to ordinary people so they are attacking it.

First, they are undermining the ability of individuals to buy their council homes through the announcements that the Deputy Prime Minister has already made. Secondly, in the clause, they are attacking the receipts in the hands of the recipient authorities that sell the housing.

The clause gives the lie to everything that the Government have said about their attitude to local government. The freedom that they purport to give with one hand they take away with the other. I shall urge my hon. Friends to vote for amendment No. 66. I will also ask you, Mr. Griffiths, for a separate vote on amendment No. 3. If the amendments are not accepted or the Minister is not prepared to look at them again at a later stage, to change the clause so that local authorities can retain their receipts and use them for housing purposes in their own areas, I will have to ask my hon. Friends to vote against the clause.

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

This has been a long debate divided over two sittings. Unfortunately, we do not yet have Hansard for the previous sitting to scrutinise in detail what the Minister said. He made some important announcements, which I shall come to. Nevertheless it has been a good debate.

When one sits back one sees that here are two separate arguments, and the amendments before us allow us to deal with both. The first argument is about how one uses capital receipts in general. The Minister was right in his exchanges with the hon. Member for Runnymede and Weybridge (Mr. Hammond) that many of the provisions in clauses 9 to 11, which we are debating on this group of amendments, really just change the administrative system. The old system of receipts taken into account, set-aside is what the pooling system is trying to achieve.

We can argue about whether the old system and the new mirror system are right—I wish to argue the opposite. I believe that the old system was wrong, because it infringed the rights of local councils to use the receipts in the way they thought best. In a moment I shall turn to the second argument about how the new aspect of the system affects debt-free authorities.

The Conservatives have a greater problem than may have emerged in the debate because they had the same sort of rules for many years. There is no change for the majority of councils; this is a Conservative policy. Labour has not brought in a new policy but has kept the same policy for the majority of councils. That was one of the problems with the right-to-buy policy, which the Liberal Democrats support.

The problem was that councils were not allowed to reinvest in social housing the receipts generated by that policy. That is why we have an affordable housing crisis now. We have stacked up major housing problems over a long period. The housing crisis did not arise in the past five years; housing policy does not work like that. It has grown worse, but the root causes go back many years. The Conservatives have to take responsibility for not allowing the important capital receipts to be reinvested in the local communities.

Hon. Members:

Hear, hear.

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

Labour members say, ''Hear, hear,'' but they are about to be asked to vote to continue that policy.

Mr Andrew Turner (Isle of Wight, Conservative)

Not only that, but they also promised before 1997 to release capital receipts. They have released them in such a slow and desultory fashion that the number of houses being built has decreased. But that was not the point of my intervention, which was to ask the hon. Gentleman whether he agrees that part of the problem relates to public sector salaries being controlled nationally.

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

I do indeed, which is why our party's policy is for greater flexibility at local and regional levels. The hon. Gentleman is right: we must have greater flexibility in public sector pay, not only because of housing costs but for other reasons.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

At the risk of taking the debate too far, I understand the hon. Gentleman's point, which is sensible, but is he going to propose that public sector pay in any area should go down, or whether the current levels will be the base line in the lower index areas and it should go up everywhere else. If so, at how much does he cost that Liberal Democrat commitment?

Mr Win Griffiths (Bridgend, Labour)

Order. The hon. Gentleman does not have to answer that question.

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

I ask the hon. Gentleman to read our policy papers. Everything is costed and in the public domain. Having been in charge of costing our pre-election manifesto, I can say that we cost in great detail.

The second argument is in many ways the new policy debate. It is important to address that, particularly given the Minister's announcement. There is no doubt—he has not tried to hide this—that debt-free authorities will be worse off as a result of the new pooling system. In trying to mirror the old system, the Government felt that they wanted to make one slight change, which was to ensure that the right-to-buy receipts were taken away from debt-free authorities. The Minister frowns, but that is exactly what the legislation will do.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

My quibble is not with the overall concept that the hon. Gentleman is setting out—which I agree with—but with the wording. Our concept is to ensure that debt-free authorities are treated in exactly the same way as all other authorities, and that a proportion of capital receipts from right-to-buy sales are put into the pool, as they are with all other authorities. We are not taking them away from debt-free authorities, but applying to those authorities the same principle as applies to other authorities.

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

I said that the receipts would be taken away, and I think that the Minister has confirmed that that is what he is doing. He says that he is trying to treat debt-free authorities in the same way as other authorities, but let us remember that debt-free authorities worked hard to pay their debt so that they could have the freedoms. In the main, those authorities run their finances well. There are one or two examples where that is not the case, but in the main they have managed their budgets well to get

those freedoms, and now those freedoms are being taken away.

The question is: did the Government's announcement last Tuesday evening make any difference? As far as we can see, the transitional relief that they announced is pretty paltry. It is for a three-year period and is a declining amount—[Interruption.] The Minister laughs and says that it is not paltry, but he gave us no figures.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

I did.

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

The only figure that the Minister gave us was when he said previously that the cost to debt-free authorities of the whole policy was £120 million. If he wants to intervene to say how much he is giving back, that will be very welcome, because it will be news.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

I gave all the figures, including the £120 million that the hon. Gentleman acknowledges. I also made it clear that as a result of Tuesday's announcement, 75 per cent. of the set-aside amount available to debt-free authorities in the first year would be available to them if they used it for housing investment. By no stretch of the imagination is 75 per cent. of £120 million a paltry sum, although it may be to the person responsible for doing the Liberal Democrat finances.

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

The point is that this is an ongoing issue; it will not be an issue just for one year. Okay, in the first year the Minister has found some money, and I agree that 75 per cent. of £120 million is not a paltry sum, but that is only for one year. We are talking about capital assets that are managed over a period of years. In year two it goes down, and in year three it is gone. The point is that a lot of money will be taken away from debt-free authorities under the new regime that was not under the former regime.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

The hon. Gentleman has slipped into the trap that I slipped into earlier of talking about a three-year transition. The Minister has announced a two-year transition. In the third year, the full burden will be imposed. My understanding of what the Minister said is that 75 per cent. will be available in the first year, 50 per cent. in the second year and 25 per cent. in the third year, which is the norm.

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

That is what I had understood, but the Minister clearly wants to clarify it, because the statement on Tuesday was rather rushed. We do not have Hansard and it is useful to go over this ground, not only for us, but for people outside.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

In the nicest possible way, I point out to the hon. Member for Runnymede and Weybridge, through the hon. Member for Kingston and Surbiton, that a scheme that gives 75 per cent. relief in year one, 50 per cent. relief in year two and 25 per cent. relief in year three cannot by any normal mathematical calculation be described as a two-year scheme.

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

I think that I can accept that logic, but the question remains of the costs to the debt-free authorities over a period of time. I began by saying that housing policy had to be seen over a long period, but the Minister's proposal is a short-term and partial

let-off for the debt-free authorities. Eventually, all the money will be taken away from them. He does not seek to deny that, which is why the debate is important. We believe that there are other ways of dealing with the problem. One solution was provided by amendment No. 40, tabled by the hon. Member for Runnymede and Weybridge. I am at a disadvantage; the Minister is explaining his policy in a quiet way to the hon. Gentleman, and I may be missing out on some golden nuggets that will help me to understand it.

Is there another way round the issue? Can we meet the Minister half way and protect the debt-free authorities but ensure that we tackle the housing issue about which he is deeply concerned? Amendment No. 40 would ring-fence the receipts for housing investment in perpetuity, which is a much better way forward, but I would rather there was no penalty on debt-free authorities, and our amendments would remove the provision altogether.

If we are to reach a compromise, the best solution would be ring-fencing the money for housing investment, not the bizarre transitional relief scheme about which we learnt more today. The hon. Member for Runnymede and Weybridge went into detail on the matter and said that my constituency, for example, is not in a debt-free authority, but it suffers from a lack of affordable housing.

Next week, the Government will announce the communities plan—presumably, it is the buzz word for building, developing and reviving communities—but they must realise that communities are not properly built when the police, teachers, nurses, carers, people who sweep the streets and those who deliver the post cannot live there. How can there be a rich, sustainable community when those people have to travel to work from way out in surrounding counties? People regularly travel to London from the midlands to work in the public sector.

The communities plan will have a hole in the middle if it does not tackle that problem. Some of us find these measures bizarre because they take money away from areas that are losing social housing, which is being sold off under the right to buy, and give it to the Secretary of State to use elsewhere. But those areas are where communities are under the greatest pressure.

Mr. Raynsford indicated dissent.

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

The Minister shakes his head, but the list of debt-free authorities shows areas that have problems.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

I did not quibble with the fact that there might be housing pressure and need in those areas; our policy specifically gives an incentive to authorities, not all of which currently do so, to use their receipts for housing purposes. I objected to the hon. Gentleman's suggestion that they were the areas of greatest need. Any fair-minded observation of needs throughout the south-east would highlight not only the 34 debt-free authorities; there are many other authorities in that region and elsewhere with intense need, especially for housing investment. How would the Liberal Democrats secure the additional funds for investment in those areas.

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

The key question is balancing local democracy and local management of the budgets, and deciding when to use national resources to deal with areas that are in crisis. Many councils that will be badly hit by the measure have housing problems. Why create a ridiculous administrative system to claw back relatively small amounts of money from individual authorities and give it to the centre, which will give it out at its own discretion? If the Government believe in freedom and in rebuilding local democracy and local government they should allow the councils to keep their receipts and deal with their own housing problems using the large amounts of money announced last July.

The Minister asked me where the money would come from and the answer is from the money that his right hon. Friend the Deputy Prime Minister will announce next week. My party would use that as the main source for dealing with housing need and not try to pull back to the centre small crumbs from a huge cake.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

I put it gently to the hon. Gentleman that it is precisely because of the existence of the former set-aside rule—now the pooling rule—that it will be possible for my right hon. Friend to make the announcement next week enabling a substantial increase in investment to be made in areas of greatest need.

I understand that the hon. Gentleman does not object to the set-aside regime, which ensures that some capital receipts are recycled. It has existed for several years and currently applies to the great majority of councils. Why, therefore, does he object to the same principle applying to debt-free authorities?

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

I thought I made it clear that I objected to the set-aside regime. That is what I said. I object to it is because housing policy is not always best set from Whitehall. I thought that was something that Labour and the Liberal Democrats had in common. When Labour was in Opposition they said that councils should have the freedom to invest their receipts. Now they are in Government they have changed their policy.

The Minister asked where all the money would come from but there is a large amount of extra money that is additional to the pot we are discussing—

Mr. Raynsford indicated dissent.

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

The Minister shakes his head but that is what his Department's report suggests. I hope he is not suggesting that the 34 debt-free authorities and the others affected by set-aside will not get any money at all? The question is who decides how the funds will be distributed.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

I am most grateful for the hon. Gentleman's clarification of Liberal Democrat policy. I understand it now: his party is opposed to any set-aside or pooling of capital receipts. The expected capital receipts in the current year will be about £1.4 or £1.5 million—

Mr Christopher Leslie (Parliamentary Secretary, Cabinet Office; Shipley, Labour)

Billion.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

I am sorry, the figure is £1.4 or £1.5 billion. The right hon. Member for Skipton and Ripon suggested that a sudden surge or boom is taking place, but it is not. We expect the figure to be broadly comparable in the coming year to the current figures. If there is no mechanism for making use of those receipts for investment in housing and the receipts will simply be left with the authorities, what mechanism is there to assist those areas of the country that do not have the advantage of substantial capital receipts? Would the hon. Gentleman leave it entirely to the market, where there will be spending power, and do nothing to help the poorer areas? If so, how will the Liberal Democrats make up for the £1 billion hole in the budget that their policy will create? Where will they find that sum of money for additional housing investment?

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

The Minister failed to answer my question. The Treasury has other national resources, which will be disbursed on housing, so moneys are available. The hon. Gentleman seems to think that the money would not be invested locally in affordable housing, but it would be. It is not taking money out of the housing budget. The question is how decisions are taken; this Government takes the centrist route every single time and that is their huge mistake. [Interruption.] The Minister says that is surrendering to the market; far from it. The money stays in the public sector for social housing.

We do not want Whitehall getting its grubby fingers on every penny that local authorities generate themselves for their communities to be invested in their communities. It is bizarre that the Government are talking about a communities plan but trying to undermine the communities.

Mr Mark Todd (South Derbyshire, Labour)

Will the hon. Gentleman further clarify his policy? If his concern were mainly about an infringement of local democracy, presumably he would not wish any restriction on the purposes to which the capital receipts could be put. That would be the logical extension of his argument.

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

Our party would invest them in affordable housing, as we have made clear. That is our policy. It is the Government who are trying to have it both ways. They are trying to say that they are in favour of local democracy. That was the whole point of the Minister's supposed trump card of referring to ''Focus'' the other evening. He held the leaflet back as if it contained something wounding, but when we finally heard its content, it concerned a debate in Dorking on how the local council should use its money. The Liberal Democrats believed that it should be spent on affordable housing and the Conservatives did not. I thought that that was what democracy was about.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

I am grateful to the hon. Gentleman for confirming in everything he has said this morning the point that I was making on Tuesday, that Liberal Democrats locally pretend that they would like to use

the money for housing, but nationally deny the opportunity to ensure that that happens. The Liberal Democrats' two-faced approach has been exposed.

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

When people see the record, they will see that I am arguing for democracy and local accountability, whereas the Minister is arguing for national control and national direction. That is the difference between his party and mine.

This has been a long debate and we have much more business to discuss. I believe that I have made my point clearly. We would like a separate vote on amendment No. 62. I hope that through that we can change this new policy, and remove the idea that debt-free authorities should be penalised.

Ms Sue Doughty (Guildford, Liberal Democrat)

I will not detain the Committee for long. However, I was concerned about some of the points that the Minister made. Local authorities, if they have constrained non-housing areas to become debt-free so that they can invest in housing, must be grateful for the transitional funding as crumbs that drop from the table. The short period of transitional funding is, as I say, a drop, because those authorities already will have restricted other areas to try to deliver more housing and improved housing stock.

In Waverley a large number of older houses will require much work to bring them up to a decent standard. We mentioned earlier that, because of the shortage of funding for housing, holes in windows have been painted over rather than the windows being replaced.

Mr Paul Goodman (Wycombe, Conservative)

Would the hon. Lady clarify one point for me? She said that the transition arrangement was a drop, but I thought that her Front Bench spokesman said a moment ago to the Minister that the transitional relief in year one was by no means meagre.

Ms Sue Doughty (Guildford, Liberal Democrat)

Yes, of course I can help with that. When one is looking at the long-term housing strategy, a two-year plan or, as the Government would have it, a three-year plan, is not significant in the grand scheme of things. When councils are trying to get the money together to invest in housing, the work that they have to do to become debt-free is not achieved in one or two years. It takes a number of years to develop such a strategy. I am surprised that the hon. Gentleman asked the question when it is clear how much work has gone into making those local authorities debt-free so that they can invest in housing, which is what we all would like them to be doing.

Some areas seem to have been completely missed by the Government. Many of the authorities about which we have been speaking are not demolishing empty homes. They are not saying, ''Well, we have a number of people who live in three-bedroomed houses, but we have lots of single-person dwellings that we can move them into.'' That would not be possible because of the higher level of housing occupancy in those areas.

Some local authorities may be able to accommodate someone who comes along and says, ''I am on a low income, and am married with two children, but I am a

postman and cannot afford private rented accommodation or to buy a property.'' But in probably all the local authorities in Surrey and many other parts of the south-east, normal, decent families, who do jobs that we value in the postal service, in shops, offices and elsewhere, will never have a hope of even having a council house, despite our having worked so hard to achieve that. Yet we need those families and those jobs in order to have balanced communities and to support the local economies, which, in the more prosperous areas, support the national economy, where so much Government funding comes from.

At the same time, the Deputy Prime Minister complains that we are not building enough houses. We do not want executive houses; we need affordable houses for decent folk who need a home to live in. Those who have been dealt a rotten deal by life and who may never be able to come off benefits because of disability or other problems also need housing.

I need to know from the Minister, as do those who have new towns in their constituencies and who are not represented on the Committee, how debt-free authorities will be expected to bring their houses up to a decent standard. We are talking about apparently prosperous areas that contribute so much to the national economy and the work that the Government are trying to do nationally. The Minister may ask how the Government are meant to do that, but the reality is that it can be achieved through the work that we do and through the vibrant economy of the south-east, even though from time to time it is hindered by a lack of a suitable work force. That is how we contribute to the national pot.

The money that is in the housing receipts has come by and large not from the most affluent, but from tenants' own rents. It has come from council tax. That is a regressive tax: it is related not to ability to pay, but to the house one lives in. How will the Minister recognise the needs of the poorest people living in the affluent areas? How does he expect councils to deliver? Will the debt-free authorities receive fair consideration in return for giving up that cash?

Mr Paul Goodman (Wycombe, Conservative)

I have greatly enjoyed the company of the Minister on the Committee. Indeed, I wish that I could have enjoyed more of his company in a certain circumstance. I wish that he had been present at surgeries that I have held in my constituency of Wycombe over the last year, so that he could have heard poorer constituents of mine asking for my help in obtaining a council house.

I am told that I have the largest proportion of Muslim voters in my constituency, which is a debt-free authority, of any Member of my party. Most of those voters originate from poor communities in Pakistan and Kashmir. They were poor when they arrived in Britain and they are still relatively deprived and socially excluded now. They seek my help in obtaining a council house, and in at least one case a constituent has told me that 10 people are sleeping under one roof and they need help to get council accommodation.

Will the Minister explain how those people will be helped by what my hon. Friend the Member for Runnymede and Weybridge correctly describes as a ''grab'' by Government nationally on capital receipts that previously would have been available to my local council to build the council and social housing that my constituents need? As far as I can see, the policy will transfer to other constituencies money and resources that would otherwise have helped my poorer constituents. In some cases they are very poor.

Mr Desmond Swayne (New Forest West, Conservative)

The Minister tried to reassure me by saying that that will apply only to right to buy. That is bad enough, but the clause refers to any housing land, which is defined as any land that has been subject to the duty to maintain a housing revenue account.

Mr Paul Goodman (Wycombe, Conservative)

I am grateful to my hon. Friend for making that point as it might have slipped my mind. As far as I can see there is no guarantee, or even the likelihood, that my constituency, unlike Dagenham, will gain through the Community Fund which might have compensated my constituents for the loss that they will experience if the clause stands part of the Bill.

Mr Robert Syms (Poole, Conservative)

My hon. Friend may have seem the film a few years ago in which Danny DeVito plays a corporate raider who really loves other people's money. Is this not an ''other people's money'' Government?

Mr Paul Goodman (Wycombe, Conservative)

My hon. Friend would be astonished if I my reply were anything but yes. In conclusion, I have one ward—it is being re-warded but as it stands it is Booker and Castlefield—which is among the top 20 per cent. of local authorities for child poverty. My constituents in that ward and in similar deprived wards in Wycombe will be hit by these proposals. I hope to get some reassurance from the Minister on this point. I simply do not see how I can receive any when the clause stands as it does.

Question put, That the amendment be made:—

The Committee divided: Ayes 10, Noes 15.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

On a point of order, Mr. Griffiths. The Minister told the Committee at the beginning of its deliberations that the Government intended to table a new clause or amendment to repeal section 19 of the Fire Services Act 1947. Since then, the Deputy Prime Minister has announced to the House—on Tuesday—that he intends to table further-reaching legislation in relation to that Act. Have you had any indication, or could the Committee be made aware, of whether the Government intend to proceed with the repeal of section 19 during proceedings on this Bill, or whether Tuesday's announcement by the Deputy Prime Minister subsumes the Minister's earlier intention?

It is important to hon. Members and right hon. Members in all parts of the Committee that they should be aware as early as possible of additional business to be placed before it.

Mr Win Griffiths (Bridgend, Labour)

I have had no indication of what business may proceed in the coming weeks in the Committee.

Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

Further to that point of order, Mr. Griffiths. For the Committee's information, may I make it clear that the Deputy Prime Minister's announcement on Tuesday that the Government intend to consult on additional powers in relation to the fire service will not involve any additional amendments being placed before the Committee? It is not our intention to make any of the changes outlined by the Deputy Prime Minister in the Local Government Bill.

No decision has been taken as to whether it might be appropriate for the proposed repeal of most of section 19 of the Fire Services Act to be effected by an amendment to this legislation, as originally planned, or whether it might form part of the new proposed legislation announced by the Deputy Prime Minister. There is no change to the current plan, but we would inform the Committee at the earliest opportunity if there were to be an alternative route for the section 19 repeal, which would have implications for easing the time pressures on the Committee.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

Further to that point of order, Mr. Griffiths. That debate will be of considerable interest to hon. Members in all parts of the Committee. I hope that the Minister will ensure that any such Government new clause or amendment is not tabled at the latest possible moment, effectively making it impossible for other Members to table amendments to it, as it would be unstarred for debate on the relevant occasion.

The Minister has been good in letting the Committee have draft regulations in good time. I hope that he will ensure that the same thing happens in relation to any such new clause.

Mr Win Griffiths (Bridgend, Labour)

I am sure that he will.

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

Further to that point of order, Mr. Griffiths. When we heard from the Deputy Prime Minister earlier this week, he suggested that the Government would be taking powers to themselves

in any emergency legislation; in other words, centralising some powers, when we understand that the amendment for the repeal to be put to the Committee would have decentralised similar powers. I should like your advice, Mr. Griffiths. We know that the proposed legislation could take the opposite direction from that which the Committee might be asked to see. How would the Committee deal with it when there would be contradictory legislation coming before the House in a few weeks?

Mr Win Griffiths (Bridgend, Labour)

The two issues are totally separate. If the Government wished to introduce a provision in the Bill to decentralise and move down some of their authority, I hope that that would be acceptable to all members here. If they wanted to take some power to themselves on a separate issue to do with the fire service, there would be a consultation about it, so it does not need to detain the Committee any further.Clause 12 Power to invest