Local Government

Part of New clause 4 – in the House of Commons at 11:05 pm on 24th October 1988.

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Photo of Matthew Taylor Matthew Taylor Liberal Democrat Spokesperson (Local Government, Housing and Transport) 11:05 pm, 24th October 1988

The hon. Gentleman should allow me to elaborate. [HON. MEMBERS: "Give way."] I shall not give way, so the hon. Gentleman can sit down and bide his time. He can hear what I have to say before he comes back and he might find it instructive.

In the 1987 manifesto, the Conservatives said: For the sake of those living in our inner cities we must remove the barriers against private investment. Many authorities see this prescribed expenditure amendment as just such a barrier to private investment because many authorities have undoubtedly kept to the required principles on capital expenditure, but believe that the best service for local people will result from leaseback deals with commercial companies. In that sense we are tonight debating a prime example of Conservative party double-speak, welcoming the combined efforts of private enterprise and local government on the one hand and blocking it on the other.

The Association of Metropolitan Authorities is concerned that the proposals will result in a reduction in private sector investment in inner-city areas. What assurances can the Minister give that that is not the case? The Royal Institution of Chartered Surveyors is concerned that a whole range of perfectly legitimate transactions could be adversely affected. Similar transactions have been a staple element of efficient property management for many years and it is important that they should not be needlessly hindered. It also states: Restrictions on leasing arrangements will also have a highly adverse effect on the leasing market and investment market generally. The Audit Commission has advised the Government that in the interests of sound estate management and to enable authorities to rationalise their property holdings. capital expenditure controls should be relaxed. It would be interesting to hear from the Minister by what means he encourages such joint venture projects between local authorities and private developers.

As a result of these new regulations many worthwhile projects have been abandoned, despite local authorities, with the private sector, undertaking the sort of enterprises that the Government say they want authorities to do. My first example concerns an excellent project to alleviate the housing crisis in Tower Hamlets. Some families have to stay in bed-and-breakfast accommodation for as long as three or four years because of the shortage of housing stock. In an effort to alleviate this, Tower Hamlets combined with private finance to provide temporary accommodation outside the borough. It would have involved a total of 2,400 people. That project has now had to be abandoned.

In Tower Hamlets, a project for 800 homes for shared ownership schemes over three years and 300 to 400 ordinary rented homes for people in Tower Hamlets provides another example. The sites were to be sold to housing associations in Globe Town. The project has now been abandoned. Both examples were genuine and enterprising ways of raising private capital to cope with the crisis of homelessness in the inner city. Both were cancelled by a Conservative Government who claim private enterprise as their own—