Orders of the Day — Local Government Finance (Supplementary Credit Approvals) Bill

Part of the debate – in the House of Commons at 5:06 pm on 17th June 1997.

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Photo of Adrian Sanders Adrian Sanders Opposition Whip (Commons), Shadow Spokesperson (Communities and Local Government) 5:06 pm, 17th June 1997

I pay tribute to the maiden speeches we have just heard from the hon. Member for Bristol, West (Valerie Davey)—Bristol being the capital of Cuba, the County that Used to Be Avon—and from the hon. Member for Runnymede and Weybridge (Mr. Hammond), whose description of his constituency suggested that his predecessors might be spending more time with their golf clubs.

Addressing the Bill at hand, our main concern is that when one is in a hole—and housing finance is in a very big hole—the first thing to do is to stop digging. The Bill basically reduces the rate of the digging, but does no more than that. We heard the hon. Member for Burnley (Mr. Pike) speak of the number of pre-1914 houses and his words are true of many Pennine areas. The United Kingdom has the highest percentage of pre-1919 housing in Europe; much of it is uninhabitable by human beings and that problem is worsening. The scale of the housing crisis will not be tackled by the Bill. The hon. Member for Luton, South (Ms Moran) said that there were 4,777 people on her waiting list and asked whether the Bill would help them. The answer to that is that four or five might be helped, but certainly not 4,777.

We do not consider the Bill to be the right way to tackle the housing crisis, but I have to admit that it is better than no action at all. It is far better to reduce the rate of digging than to fail to do anything, so we broadly welcome the Bill, but we would have preferred two different measures. One Bill we would love the Government to adopt is one that would give a power of general competence to local authorities, so that they could decide whether to sell assets and where to spend the money from capital receipts without the permission of central Government. They would then be answerable to their local electorate for those decisions.

We are not convinced that redistributing supplementary credit approvals is the best way of tackling the housing crisis. We should like to know why housing investment programmes are not based entirely on need—that seems a far more sensible way of meeting housing need. We need to know precise details of the housing needs assessment so that we can judge whether it will be fair and whether it will include all relevant considerations.

I was glad to hear that there will be no restriction on the definition of housing purposes, but will local authorities decide how much to spend on new build or renovation? Will the looser definition of housing purposes extend to capacity building for tenant participation, for instance? We hope for ministerial answers.

Why does the Bill deal only with current or set-aside receipts? How will new receipts be dealt with? Will an extra subsidy be provided to ensure that councils can keep rents affordable and standards high? If the timetable in view is the financial year 1998, when will the first capital receipts become available?

We should also like to know to whom the plans that local authorities will be asked to draw up will be sent? Who will decide whether to approve them? And what criteria will determine whether such plans are approved?

A second fundamental point not yet dealt with in the debate concerns the public sector borrowing requirement and how we account for housing receipts. When an authority has sold an asset, the loss of that asset should be built into the calculations. Thus far it has not been. It seems strange that an investment made possible by realising an asset should count against, in terms of the PSBR. The Government should look into that carefully and perhaps consider a system of general government financial deficit; similar systems are used by other countries to get around the problem.

I leave the House with my reason for believing that the Bill does not tackle the housing crisis to any great extent, even though it is a welcome start. According to Shelter, the £5 billion will, at best, return housing spending to what it was under the Conservatives in 1992. By deciding to stick to Conservative spending plans for two years, the Government have effectively committed themselves to a £1.3 billion cut in housing investment by 1999. That puts the Bill in perspective.

There should be no jumping up and down and cheering for the Bill. We welcome and support it as a step in the right direction, but it is not the right way to tackle the housing crisis. No one should imagine that it will do a great deal to help constituents or the homeless, because it will not.