Application of Part Iv

Part of Orders of the Day — Clause 37 – in the House of Commons at 11:45 pm on 6th November 1989.

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Photo of Paul Murphy Paul Murphy Shadow Spokesperson (Wales) 11:45 pm, 6th November 1989

I do not agree with the Minister's latter comments, but we welcome some of the changes that have been made in another place.

I shall concentrate on amendment (a) to the Lords amendment No. 46. The fact that my comments will be short and that we will not press the amendment to a Division does not indicate its significance. The amendment would reduce from 75 per cent. to 50 per cent. the reserved part of capital receipts. As a result, local authorities would be able to spend the money that they were responsible for creating. They built the houses. They provided the initiative and the houses that are being sold. It is clear to any sensible person that receipts from sales of those houses should go back to the local authority areas. The amendment asks the Government, yet again, to consider reducing the amount of capital receipts that is reserved, so that half of the money can be put back into the local authority area which generated it.

District councils in Wales recently highlighted the depressed level of provision for housing in Wales, which is at a very low £80 million net. We must also consider the problems of people who are waiting for houses. Some 70,000 people in Wales alone are waiting to be housed. Only this week it was announced that homelessness in the Principality has risen by some 20 per cent. The possibility of houses being built for the homeless, the disabled, single people and elderly people could be achieved at a stroke if these capital controls were altered.

Local authority associations are pressing the Government to allow them to retain the additional spending power of receipts as a major incentive to themselves. I agree. They also draw attention to the bad effects of restricting the use of receipts.

These arguments were well expressed in Committee, and they were highlighted again in the other place. This is the last time when we can tell the Government that the issue of capital receipts is by no means technical, but one that affects the lives of millions of people.

The Government have said that if the amount of spending power from receipts increases, the amount available for distribution through credit approvals, on the basis of needs, decreases. Thus, high need, low capital receipt authorities will be disadvantaged if the reserved part provisions are relaxed. Ministers have been quick to point out that local authority associations that represent those high need, low resources authorities have not been vociferous in their opposition to the Government's proposals. That is not the case. Local authority associations in general think that the aggregate provision is inadequate to deal with today's housing problems.

We believe that a reduction in the reserve part of housing capital receipts from 75 per cent. to 50 per cent. would generate £900 million spending power in one year. I believe that the Government would change their mind as quickly as possible if they considered what that sum of money could do to alleviate our housing problems.

The local government associations have voiced great concern about the timing of the introduction of the new capital control system in 1990–91. The Minister, and all hon. Members who have been involved with local government, would agree that one of the problems in the past has been the inability to plan for housing or any sort of capital provision over a number of years. Unless Parliament and Government give local authorities the opportunity to spend money in a planned programme, well in advance, nothing substantial will be achieved.

The Government should reconsider such changes so that local authorities in Wales and England can plan their housing provision for years to come.