Clause 40 - Loans by Public Works loan commissioners
Local Government Bill
10:45 am
Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich and Woolwich, Labour)
Several points have been raised and I shall try to cover them as I respond. I thought that the opening remarks made by the hon. Member for Cotswold were most unfortunate. I am sure that Conservative councillors in Carlisle will not be pleased to hear his remarks about the management of their housing. Carlisle city council is one of the authorities that transferred its stock and received the benefit of overhanging debt. Councillors on Blackburn with Darwen borough council, which was recently identified as one of 22 excellent authorities in the country, will equally feel extremely upset by his unjustified disparaging remarks about local authorities.
The clause will create an express power for the Secretary of State and the National Assembly for Wales to make payments to public works loan commissioners to repay local authority debt. Subsection (1) provides for the Secretary of State to make a payment if he thinks it appropriate in order to reduce or extinguish a local authority's debt. The term ''reduce or extinguish'' is used because writing off the debt might remove all debt owned to the Public Works Loan Board in some cases. However, there will be other cases when the authority has debt other than that relating to only the housing transfer, and it would be inappropriate to extinguish all the debt. The term reflects the circumstances of each case.
The hon. Member for Cotswold will appreciate that there are safeguards to enable the sum to be properly determined and to recognise the independence of the public works loan commissioners. There is a parallel provision in Wales, on which I will not linger.
Subsection (3) contains a provision for the commissioners to determine the amount of payment that is required to extinguish or reduce a debt, which should give the hon. Member for New Forest, West the reassurance that it will not be an arbitrary figure chosen by the Minister. The commissioners will decide the appropriate amount, and subsection (4) acknowledges their independence by providing that they may refuse to accept a proposed payment. Clearly, we hope that that will not happen and that our discussions will usually ensure agreement, but they are an independent body, and we cannot insist that they accept our payment proposals.
The clause will not have any added public expenditure or manpower implications in England and Wales. As the hon. Member for Cotswold recognised, it effectively recycles public debt. The
hon. Member for Isle of Wight asked about the valuation. Valuation assumes a rental income over 30 years for each house and expenditure over a full 30 years. The valuation also takes account of the long-term arrangements, including any potential right-to-buy receipts.
I hope that those explanations deal with the points raised by hon. Members and that the clause will stand part of the Bill.