Local Authority Debt Reduction Strategies

Orders of the Day — Local Government Finance (Supplementary Credit Approvals) Bill – in the House of Commons at 3:45 pm on 8th July 1997.

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'Alter section 55(3) of the Local Government and Housing Act 1989 there shall be inserted— (3A) Supplementary credit approvals shall only be allocated to authorities which have published and submitted to the Secretary of State a five-year strategy for debt reduction.".'.—[Mr. Chope.]

Brought up, and read the First time.

Photo of Christopher Chope Christopher Chope Shadow Minister (Environment, Food and Rural Affairs), Vice-Chair, Conservative Party

I beg to move, That the clause be read a Second time.

The new clause is designed to be helpful to the Government, because its purpose is to ensure that local authorities have the chance to participate in the Chancellor's five-year deficit reduction strategy. In essence, the new clause would require local authorities seeking supplementary credit approvals to submit a five-year debt reduction plan to the Secretary of State.

Debt is a massive problem for local authorities. The "Financial Statement and Budget Report" produced by the Government shows in table 4A.3 on page 115 that local authority interest payments amount to £4.4 billion a year. That compares with some £6.7 billion of gross capital expenditure before depreciation. In other words, interest payments are almost as great as the capital expenditure or investment each year. We have tabled the new clause to try to get local authorities to concentrate their minds on the need to reduce that debt burden.

The latest figures which I have for the total of local authority debt, which were published in the Bank of England Quarterly Bulletin for November last year, show that at the end of March 1996 it was some £49,563 million, or £49.5 billion. That is a very high figure indeed.

Table 1.1 on page 12 of the Red Book shows the projected change to the public sector borrowing requirement forecast for this year as a result of the latest Budget compared with the November 1996 Budget. It puts the issues in context, because it shows the extent to which the Government have been generous by giving £200 million extra under the local authority capital receipts initiative. The table shows that there is, indeed, a £200 million increase in the PSBR forecast as a result of that initiative, but, as a result of everything else, it is reduced by £8.3 billion.

At a time when the total PSBR is falling by £8 billion because of the previous Government's prudent budgeting, the Government find only £200 million extra for local authority capital expenditure under the local authority capital receipts initiative. I suspect that, having looked at the figures more closely, housing authorities and people concerned about local authority housing will express disillusion and dismay at the fact that they have been misled by the Labour party into thinking that there would be a substantial input of extra money, whereas it is £200 million this year, which is paltry in the context of the PSBR forecast.

Photo of Louise Ellman Louise Ellman Labour/Co-operative, Liverpool, Riverside

Would the hon. Gentleman like to comment on the fact that local authorities and the people of this country regarded as paltry and derisory the action taken by the Conservative Government to prevent house building, which led to a period of social crisis? Against that background, he should welcome every attempt to invest in our housing stock to provide homes and employment.

Photo of Christopher Chope Christopher Chope Shadow Minister (Environment, Food and Rural Affairs), Vice-Chair, Conservative Party

The hon. Lady will be extremely disappointed when she looks at the figures. Each year, local authorities receive about £1 billion of capital receipts as a result of sales, so for the current financial year and next year, there will be another £2 billion of capital receipts. When the Labour party made its commitment before the general election to allow more of those receipts to cascade down and produce a housing revival, people thought that that money and some of the previous capital receipts that had been set aside would be made available, and that from the onset of a new Labour Government all capital receipts obtained by local authorities would also be made available.

Existing capital receipts will be released at the rate of £200 million this year and £700 million next year, whereas we were told that £5 billion would be released over five years. The effect of taking this year and next year together is that about £900 million will be released under the so-called capital receipts initiative, but £2 billion will be added to local authority capital receipts as a result of the normal process. A comparison of the position in two years' time with the position as of April this year shows that local authorities will have more capital receipts that they cannot spend after two years of Labour government than they had at the end of 18 years of Conservative government.

Photo of Paul Beresford Paul Beresford Conservative, Mole Valley

I am in slight disagreement with my hon. Friend. The Bill deals with supplementary credit approvals and, in fact, no capital receipts are released, although reference is made to that. We will have the basic credit approvals allocated under the housing investment programmes on one system, and a parallel system—with extra bureaucracy—for supplementary credit approvals merely as a flag-waving exercise for the Labour party's manifesto pledge.

Photo of Christopher Chope Christopher Chope Shadow Minister (Environment, Food and Rural Affairs), Vice-Chair, Conservative Party

My hon. Friend is right to challenge me for having fallen for the Government's propaganda. The Bill deals not with the release of capital receipts but with the application of supplementary credit approvals as a cover for a promise made during the election campaign which Labour has been unable to deliver in practice.

Photo of Brian Iddon Brian Iddon Labour, Bolton South East 4:15 pm, 8th July 1997

Is the hon. Gentleman aware that, after 1979, the previous Government put so many people out of work in the construction industry that restarting that industry will have to be done in a phased way, as my right hon. Friend the Chancellor proposes?

Photo of Christopher Chope Christopher Chope Shadow Minister (Environment, Food and Rural Affairs), Vice-Chair, Conservative Party

I am almost speechless. The Government will have to come to terms with this—the construction industry is either booming or in the depths of a recession. The Chancellor has said that he will release capital receipts, taking account of the needs and capacity of the construction industry. I presume that the fact that the Chancellor only felt fit to release £200 million under the supplementary credit approvals programme shows that he thinks that he has inherited a construction industry from the previous Administration that is extremely healthy and is in danger of overheating. We have read of many fears that there is a danger of overheating in the construction industry. I find the hon. Gentleman's intervention amazing.

I hope that the Government will accept the new clause—which is in line with their deficit reduction strategy—as recognition of the fact that there is a real debt problem for local authorities. The sooner authorities recognise that, if they reduce debt, they will be able to spend more on providing services and investment, the better.

Photo of Andrew Lansley Andrew Lansley Conservative, South Cambridgeshire

On Second Reading, a number of questions were raised, and I was fortunate to be called to raise some. The context in which the Bill would emerge was not clear at that time, as we did not know the character of the Budget or the provision that would be made by the Chancellor. It is timely that my right hon. and hon. Friends have tabled the new clause, since it would have been difficult to structure such a clause at an earlier stage. I agree very much with my hon. Friend the Member for Christchurch (Mr. Chope) that the intention behind the new clause is to assist the Government.

Reference was made in Committee by my hon. Friend the Member for Christchurch to the Labour manifesto, which stated that capital receipts would be phased to match the capacity of the building industry"— to which my hon. Friend and others have referred— and to meet the requirements of sound economic management."— [Official Report, Standing Committee A, 24 June 1997; c. 9.] Treasury Ministers estimate that the capacity utilisation of the building industry is above the long-run average at present.

The new clause relates more to the question of sound economic management, and the addition of the new clause to the Bill would assist in that process. The Government have produced a Budget, the intention of which is to secure the reduction of borrowing in the public sector; however, the Bill will increase borrowing in the public sector. The two cannot be right. In present circumstances, we should not enact a measure that would negate the reductions in public borrowing. We ought to set the Bill in that context.

I support the new clause because I represent two authorities in my constituency. One is debt-free, while the other has substantial debts. It is clear from the way in which the consultation paper issued by the Ministers is structured that they contemplate the possibility of debt-free authorities, although having been allocated supplementary credit approvals, choosing not to take them up. Paragraph 24 of that paper states: Arrangements would be made to redistribute any SCAs made available either from debt-free authorities or from authorities which had not produced adequate spending plans. In the case of debt free authorities, I can well understand members of South Cambridgeshire district council choosing not to take up the supplementary credit approvals. Taking them up would remove their debt-free status and lead them to incur costs through borrowing. The absence of such costs and the income that the authority receives from the set-aside receipts which it has accumulated enable it to be an authority that does not levy a council tax.

Authorities that have been prudent and are meeting service needs but are not levying a substantial council tax may be allocated supplementary credit approvals but may choose not to take them up. If those SCAs are reallocated, it should be only to authorities that continue down the path of increased prudence in their financial management. Prudent authorities should not be benefiting profligate authorities that might increase borrowing.

We now understand the consequences of the Bill, which were not clear on Second Reading. At that time, it was not clear who would pay for the cost. There is no cost-free option. The capital receipts do not sit around in a cash fund. Even in South Cambridgeshire district, the council's provision for credit liabilities set aside is not backed by cash. The cash generated has been used to pay off borrowing. Who pays?

On Second Reading, various possibilities emerged—one idea was that it would be paid for through council rents and another was that it would be paid for through the council tax. The implication of the consultation paper is that the general taxpayer will pay, and we see that in the Budget. The increase in public sector borrowing requirement of £200 million and £700 million to which my hon. Friend the Member for Christchurch referred has had to be offset in the Budget by tax-raising measures.

The direct result is that other taxpayers will be funding the increase in borrowing for this purpose. It is all the more important that those taxpayers should ensure that they are not building up a further and growing liability through borrowing that will magnify in time and add to the overall tax burden. It is bad enough that the Budget should have added 1 per cent. to the tax burden this year and another 0.5 per cent. next, without adding to the burden beyond that.

For those reasons, it is important that we add the new clause to the Bill and give ourselves the opportunity to move public sector borrowing in the same direction in both local and central Government. Therefore, I support the new clause.

Photo of James Clappison James Clappison Shadow Spokesperson (Home Affairs)

It is a pleasure to follow the analysis given by my hon. Friend the Member for South Cambridgeshire (Mr. Lansley).

My hon. Friend the Member for Christchurch (Mr. Chope) argued cogently in support of the new clause. It is important to return to the subject of debt and the servicing of debt, because the issue of debt is an important starting point in the history of capital receipts and the Bill. When in opposition, Labour Members and, certainly, present Ministers widely believed that the capital receipts—the proceeds of house sales and other assets—were locked away, being wasted, and were not put to any good purpose.

We were told—the Minister nods his head now, but I remind him of what he said in opposition. Last year, he said that a Labour Government would release capital receipts and added: We will do it because it makes sense to use the resources that are currently wasted to get people back to work, to build homes".—[Official Report, Third Standing Committee on Delegated Legislation, 17 December 1996; c. 10.] The hon. Gentleman also talked about "foolish" Government restrictions. I hope that he realises the folly of his words, because those resources, as he well knows, have never been wasted but have been used by local authorities, as my hon. Friend the Member for South Cambridgeshire rightly said, to make provision for credit liability, to support the expenditure of local authorities and to service local authority debt.

It is one of the fictions perpetrated by the Labour party that receipts have not been put to any good use. As the Minister knows now, if he did not when he uttered those words, debt-free local authorities have always been able to spend their entire capital receipts as they see fit. That is contained in his consultation paper. He has come to that knowledge. Local authorities with debts are required to set aside capital receipts on account of them: 75 per cent. for the proceeds of the sale of houses, and 50 per cent. for the sale of other assets.

We must return to the important issue of how to make provision for local authority debt. It is interesting that the Treasury's financial statement was mentioned, because another fiction perpetrated by the Labour party was that the release of council house receipts would have no effect on public expenditure. I remember having that argument several times with Labour spokesmen in opposition. They would not have it that such a release amounted to public expenditure. As we told them, every penny spent from the capital receipts amounts to additional public expenditure, because provision must be made for the way in which capital receipts are used.

It is interesting that the Labour party now admits, in the "Financial Statement and Budget Report" to which my hon. Friend the Member for Christchurch properly referred, that every penny of the capital receipts initiative, as it is called, amounts to extra public expenditure. That fact appears in the financial statement set out by the Chancellor as part of general Government expenditure, outside the control total, for that is what matters for these purposes.

The Minister nods his head at that, but one of the classic fudges perpetrated by the Labour party was that, if public expenditure was outside the control total, it somehow did not count. He should know that the control total is for the internal purpose of controlling the expenditure of Departments. Expenditure outside the control total is still part of general Government expenditure which has to be paid for. It is also made clear in the financial statement that it counts towards the public sector borrowing requirement. In at least two places in the financial statement, it may be seen that that expenditure is counted as part of general Government expenditure and as counting toward the PSBR.

I referred to the alleged capital receipts initiative because my hon. Friend the Member for Mole Valley (Sir P. Beresford) made an important point, which was properly accepted by my hon. Friend the Member for Christchurch. It is nonsense to talk about this money coming from capital receipts; it does not. There is not one penny piece of capital receipts in any of this expenditure. It is all additional government expenditure by way of supplementary credit approval. The only way in which capital receipts come into the picture is as part of the formulae for the distribution of that spending.

I draw the attention of the hon. Member for Liverpool, Riverside (Ms Ellman) to the somewhat bizarre formulae in the Government's consultation document. Three formulae are set out by the Government as ways in which the money could be distributed. The Government have chosen a way that will penalise authorities such as hers.

Photo of James Clappison James Clappison Shadow Spokesperson (Home Affairs)

I shall let the hon. Lady respond in a minute, if she wishes. I advise her to examine the consultation document formulae. In 1997–98, Liverpool will lose about £600,000 on the Government's chosen formula and will lose more than £3 million in the following year. I shall give way, but I think that she must take issue with her Front-Bench colleagues.

Photo of Louise Ellman Louise Ellman Labour/Co-operative, Liverpool, Riverside

I am extremely surprised to hear those comments from the hon. Gentleman. The Bill states clearly that the needs as well as the resources of areas such as Liverpool will be considered. That is a major plank of the Bill. I remind the hon. Gentleman and his honourable colleagues that they are opposing the Bill in its entirety; therefore, it is hypocritical of them to pretend that there are deficiencies in the Bill when they are opposed to the principle of more building to meet social need and provide employment.

Photo of James Clappison James Clappison Shadow Spokesperson (Home Affairs)

I accept the hon. Lady's point. She wants more spending. That is a theme that we shall no doubt hear from Labour Members on several occasions during this Parliament. The point that the hon. Lady needs to take up with her Front-Bench team—not with me, because I can see the force of the argument for the Liverpools of this world—is that her party in government has decided to spend this money and then chosen a formula for doing so that will penalise authorities such as Liverpool, the inner-London authorities and 33 of the 36 metropolitan district authorities, rather than authorities such as mine—Hertsmere—and Surrey Heath and Malvern Hills, all of which benefit from the formula chosen by the Labour party.

Photo of Eric Pickles Eric Pickles Conservative, Brentwood and Ongar 4:30 pm, 8th July 1997

My hon. Friend has great knowledge of these matters. Will he confirm that the previous Government's formula took need into consideration, especially in Liverpool, Riverside, and that the new formula dilutes consideration of need by taking into account capital receipts? The good people of Liverpool are materially worse off under the new formula than under the previous formula.

Photo of James Clappison James Clappison Shadow Spokesperson (Home Affairs)

My hon. Friend makes an excellent point. We went to great lengths to produce a fair formula based on need. If the Government had chosen such a formula, they might have produced a different result. The alternative formula is in the Government's consultation paper. I invite the hon. Lady to look at it and do the arithmetic. She will see that her authority and many of those represented by her colleagues will lose out under the proposed formula for spending the money that has been chosen by her Ministers.

Photo of Louise Ellman Louise Ellman Labour/Co-operative, Liverpool, Riverside

I am surprised that the hon. Gentleman persists in his deliberate misunderstanding of what is happening and what happened under the previous Government. Neither Liverpool's overall needs nor its housing needs were met by the previous Government. That is why there is now a major crisis in Liverpool in local authority housing and the housing stock needs to be improved. I suggest that the hon. Gentleman repent a little of the misdeeds of his Government and join us in trying to put right an injustice that has persisted for too long.

Photo of James Clappison James Clappison Shadow Spokesperson (Home Affairs)

The hon. Lady would know if she had served on Committees with me—as the Under-Secretary, the hon. Member for Greenwich and Woolwich (Mr. Raynsford), has—that I am the first to admit a mistake and repent. I put a proposition to the hon. Lady and to the Minister that the Minister may deny. Under the formula that has been chosen by the Government of two thirds need and one third cumulative capital receipts, Liverpool receives less than it would have received under the alternative formula of 100 per cent. need set out in the consultation document. The same applies to many other authorities, in inner-city areas, metropolitan districts, and so on.

Photo of Paul Beresford Paul Beresford Conservative, Mole Valley

While my hon. Friend is in a repenting mood, will he repent a little of the formula and agree with me that it will in some aspects benefit those local authorities that have successfully pushed and promoted the right to buy and vacant sales?

Photo of James Clappison James Clappison Shadow Spokesperson (Home Affairs)

My hon. Friend makes another important point, with which I am sure that the Minister will want to deal in his reply.

Before I stray too far from the subject of debt, I emphasise that new clause 2 is important because local authorities have massive debts. We have to think as much about the repayment and servicing of those debts as we think about new spending, which the Government have undertaken in this new spending commitment. My hon. Friend the Member for Christchurch mentioned the huge proportions of total local authority debt—more than £49 billion. Within that overall total, some authorities have particularly severe problems of indebtedness.

According to figures that the Library has supplied to me based on debt per resident, some of the worst cases of debt are in authorities such as Islington, which has almost £5,000 of debt per head. Many other local authorities of a similar nature have debts running into thousands and thousands of pounds. It is important that, when we look at debt reduction overall, we also look at local authority debt reduction. As my hon. Friend the Member for Christchurch so rightly pointed out, those liabilities are going to persist long into the future for the unfortunate residents of those local authority areas. The figures are huge, and it is right that we should think about that problem.

Photo of Margaret Moran Margaret Moran Labour, Luton South

I apologise for elevating the hon. Gentleman well above his station, but I want to draw his attention to certain facts. He speaks eloquently on the level of local authority debt, but he should perhaps be reminded that, during the period from 1990 to 1996, his Government allowed public sector debt to double from the equivalent of £2,200 per head to £5,600 per head; yet, in the same period, local authority debt fell from the equivalent of £899 per head to £843.

That completely contradicts the point that the hon. Gentleman is trying to illustrate and it demonstrates economic incompetence of the highest degree on the part of the previous Government, given that they also allowed house building to be cut by one third during the same period. Economic incompetence—housing incompetence.

Photo of James Clappison James Clappison Shadow Spokesperson (Home Affairs)

I might be straying from the subject of the debate, but I invite the hon. Lady to pay attention to what is said in Labour's financial statement about the repayment of the public sector borrowing requirement. On the existing figures before the Budget, we were well on course to return to repaying public sector debt by 2000. Those were the figures given by her own right hon. Friend the Chancellor.

As for debt, the overall lesson for Ministers is that, contrary to what they believed when they were in opposition, there is no such thing as a free lunch. Now they are in government, that has been confirmed—there is no such thing as a free lunch, not even if it has the blessing of the Minister without Portfolio.

Photo of Oliver Letwin Oliver Letwin Conservative, West Dorset

Before I turn to the main subject that I wish to address, I cannot refrain from mentioning that it is evident to the majority of people in this country, if not to Labour Members, that the person or persons who were mainly responsible for not attending to the needs of Liverpool under the last Administration were Mr. Hatton and his colleagues.

Photo of Oliver Letwin Oliver Letwin Conservative, West Dorset

Indeed.

The importance of the new clause lies in the fact that the Government's response will constitute an important test of their true motive in drafting the Bill in the first place. As our discussion of the Bill has revealed, the Bill's main purpose is, in the first instance, to release spending. Spending is being released in a way that enables the Government to claim that they can provide local authorities with the ability to spend money that otherwise the spending limits would not have allowed. If that were the sole purpose of the Bill, it would be a disreputable attempt by one Department of State to undermine the very effects that the Government as a whole and the Treasury are seeking to achieve globally.

We have, however, been told by Labour Members and Ministers that the purpose of the Bill goes beyond that and that it is not designed merely to allow local authorities to spend rather more in the current year and the next. They say that the intention is to permit a progressive and phased—I believe that was the word used by the hon. Member for Bolton, South-East (Dr. Iddon)—increase in the amount that can be spent on the construction industry's activities, so as to permit a sustainable, long-term development of the housing programme in this country. That is a laudable aim and I have no doubt that it is shared by all hon. Members on both sides of the House.

As I said, the new clause and the Government's response to it is a good test of the proposition that that is indeed the Government's true motivation. There can be no doubt that the Bill permits, not only spending, but a considerable increase—in fact, pound for pound—in the amount of net borrowing in which local authorities will be engaged. Ministers have entirely admitted that proposition.

If that is the case, the cumulative effect on the public sector borrowing requirement and on the stock of public debt in the coming years will be very noticeable. There will come a time, towards the end of this Parliament, when the Treasury, if not the Department of the Environment, will have to call a halt to that increase in PSBR and in the public debt. We are reminded, are we not, of the phrase, too happy to be quoted, of a late lamented Labour Member, Tony Crosland, when he eventually spotted that his policies were sending the PSBR in relation to local authorities out of control?

If, in this instance, the Government genuinely intend not merely to release extra expenditure to mollify their Back Benches in this first year but to create a sustained programme of development, it must follow that the Government would wish to support moves to ensure that, over the long term, debt does not go out of control, and that the increased spending is matched by a phased debt reduction programme, as recommended in the new clause. For that reason, my hon. Friend the Member for Christchurch (Mr. Chope) has said that this is a helpful clause, which the Government should be prepared to accept if they are genuinely committed to a long-term programme.

Photo of Oliver Letwin Oliver Letwin Conservative, West Dorset

Mr. Deputy Speaker, I suspect it was not you who were saying that but I, but I am privileged to be associated with you, and I would that I had your eloquence or your authority in the Chamber.

Undoubtedly, the previous Government were extremely anxious to control the public sector borrowing requirement. If I may reply in one word to that intervention and to the earlier remark of the hon. Member for Luton, South (Ms Moran), there is a great difference between increasing the PSBR at a time of recession and doing so at a time of growth. The Chancellor says in his recent great work—the magnum opus with which we have all been presented some time after the Budget was given to us—that he intends us to be in a time of sustained growth.

In the theology—perhaps I should say the metaphysics—of the Chancellor and his colleagues, there is no excuse for an increase in the PSBR on a systemic basis over a period of sustained growth during this Parliament. If this is a coherent policy to achieve sustained growth in the housing market, there should be a phased debt reduction programme. If, in the light of that, the Government insist on rejecting the new clause, that will prove to the House and the country that the purpose of the Bill, as of much else that is being proposed in that domain, is merely to increase spending in the hope that no one will notice what is going on, without the slightest view of a long-term progression that we could support.

Photo of Paul Burstow Paul Burstow Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Health)

I shall make only a few brief comments on the new clause—no doubt to Labour Members' relief. I want to pick up one or two remarks that Conservative Members have made about the alleged virtues of the new clause.

It is a hit rich for the Conservative party to advance the cause of debt reduction, given the overwhelming contribution that it has made in recent years to increasing the national debt. It is not that there are no lessons that Members of all other parties on both sides of the Chamber can learn from the Conservative party in that respect—simply that that might provoke some comment.

Photo of Oliver Letwin Oliver Letwin Conservative, West Dorset

Does the hon. Gentleman not accept the proposition that I was advancing, that there is a significant difference between an increase in the PSBR in times of recession and such an increase in times of growth?

Photo of Paul Burstow Paul Burstow Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Health)

I am sure that, if the hon. Gentleman reads the Committee Hansard, he will note that I and my hon. Friend the Member for Torbay (Mr. Sanders) have been advancing on behalf of others—notably the Chartered Institute of Housing—the case for a change in the accounting regime, moving towards the use of the Government general finance deficit to deal with these issues.

I note from reading the report of the Second Reading debate that the hon. Gentleman criticised the Liberal Democrats for advancing that device. We regard that device, not as a crock of gold or a panacea, but as a means by which we can change the accounting regime and treat borrowing for investment in the creation of new assets—which is what we are talking about—differently from borrowing to fund on-going recurring expenditure, which is what the previous Government often did. We criticise the way in which privatisation receipts have been used to deflate the PSBR but not for proper funding.

Conservative Members have adopted a contradictory position. Surprisingly, they are moving hack towards supporting assessing the allocation of capital receipts solely on the basis of housing need. Having watched the way in which challenge and single regeneration budget initiatives progressed under the previous Government, I find it refreshing that a short time in opposition has changed the Conservatives' minds.

We shall not support the new clause, because it adds nothing to the Bill. We do not believe that the argument about the Government's desire to increase expenditure is especially well made, because we criticise the fact that the Government are not adequately investing in housing as a consequence of the Bill, and we see no need to tie to it a specific measure to require local authorities to reduce debt. However, we do think that, obviously, local authorities need to manage their debt prudently, and that that should be a matter for local authorities, not Parliament, to dictate.

Photo of Hilary Armstrong Hilary Armstrong Minister of State (Local Government and Housing), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions) (Local Government) 4:45 pm, 8th July 1997

We have had an interesting little debate. When the hon. Member for Christchurch (Mr. Chope) moved the new clause, he appeared to have difficulty in keeping a straight face because, obviously, he was simply stirring the pot. He knows that the new clause is not serious, because, even were it incorporated in the Bill, it would not do what he wants it to do.

For many years, the Conservatives were responsible for local authority debt, sanctioning the amounts that local authorities could spend and borrow. They frequently castigated local authorities for having so much debt, but they never took action to tackle that problem or even saw the need to do so. As hon. Members have noted in interventions and the hon. Member for Sutton and Cheam (Mr. Burstow) has noticed, the Conservatives have been responsible for increasing debt, without using that debt to good effect—in other words, without using it to invest.

Photo of Hilary Armstrong Hilary Armstrong Minister of State (Local Government and Housing), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions) (Local Government)

Of course I will allow the hon. Gentleman to intervene, but I want to finish the point.

The previous Government did not use increased borrowing to invest and get the economy growing—they did the opposite. The hon. Member for South Dorset (Mr. Bruce) appeared to acknowledge that we are just emerging from 18 years of recession. I believe that most people experienced the past 18 years as two severe periods of boom and bust, which is why we have adopted a very different approach to borrowing.

My right hon. Friend the Chancellor said in his Budget statement that the Government would keep total national debt at a prudent and sensible level, but that, where the Budget does allow increased borrowing, it will be borrowing to finance investment, not day-to-day expenditure. I have said that throughout. I wondered whether hon. Members had not been present on Second Reading or had not read the report of that debate, because I have always said that we know that borrowing will increase, but that it is borrowing to finance investment, not to be frittered away on day-to-day expenditure. We want borrowing for investment, so that we may increase the capacity of the economy, and increase the capacity of the construction industry so that it may play its part in a growing economy.

Photo of Paul Beresford Paul Beresford Conservative, Mole Valley

May I take it that the Government are putting in £200 million, and then £700 million, in SCAs; and that BCAs will continue next year at the same amount, plus inflation?

Photo of Hilary Armstrong Hilary Armstrong Minister of State (Local Government and Housing), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions) (Local Government)

This measure has to do with supplementary credit approvals, not basic credit approvals.

The hon. Member for Christchurch tried to suggest that local government borrowing is increasing all the time, and that local authorities must play their part in the Government's overall programme for reducing national debt—hence the idea of a five-year debt reduction strategy as suggested in the new clause. Indeed, the new clause would make the issue of any SCA subject to local authorities publishing and submitting to the Secretary of State a five-year strategy of that kind.

The new clause does not deal with basic credit approvals, or with how local government will pay for them or manage the debt. The condition would apply to any SCA, not just to SCAs issued under this initiative. I am not sure that that was the intention of the Opposition—although they may have intended to contrast SCAs issued under the capital receipts initiative for local authorities—a debt-increasing move—with the Chancellor's five-year reduction plan for the PSBR.

Photo of Paul Beresford Paul Beresford Conservative, Mole Valley

I have not yet heard an answer to my question. In helping local authorities to control their debt, is the hon. Lady going to bring in a reduction in BCAs partly or completely to compensate for the SCAs? I repeat: may we assume that SCAs for next year will be the same as they were in this financial year, plus inflation?

Photo of Hilary Armstrong Hilary Armstrong Minister of State (Local Government and Housing), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions) (Local Government)

Opposition Members should listen more carefully. I have answered that three times today; I also answered it on Second Reading and in Committee. This is additional spending—I have already accepted that it is.

Photo of Hilary Armstrong Hilary Armstrong Minister of State (Local Government and Housing), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions) (Local Government)

If it is additional spending, it means that there will be no specific measures to reduce what is already committed spending by the same amount—otherwise, it would not be additional spending.

Photo of Hilary Armstrong Hilary Armstrong Minister of State (Local Government and Housing), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions) (Local Government)

Opposition Members are having trouble keeping a straight face, and if we go on much longer like this, the whole House will have the same trouble. We know that the Conservatives are not serious about dealing with housing need, which the Conservative Government left in a state of desperate neglect. That explains the need for this Bill.

Several hon. Members:

rose

Photo of Hilary Armstrong Hilary Armstrong Minister of State (Local Government and Housing), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions) (Local Government)

I may take more interventions later; meanwhile, I suggest that Conservative Members keep listening, because that will help them to understand what I have been saying.

Conservative Members appear to believe—I deduce this from the new clause itself—that there is no prudent or sustainable strategy for reducing local authority borrowing. Yet the position in local government is fairly healthy. Local authorities' debts have remained steady in recent years; at the end of 1996, they represented only 13 per cent. of general Government debt. and 7 per cent. of GDP.

It is important to allow local authorities themselves to decide how best to manage their debt and their investments, in conformity with good Treasury management practice and the need to achieve best value for money for the local taxpayer and rate payer. By insisting on publication and submission to the Secretary of State of a debt reduction strategy, the new clause would undermine the work that local authorities are already doing, thus necessitating extra spending and more paperwork. That would be undesirable, and unnecessary for local authorities.

Photo of Eric Pickles Eric Pickles Conservative, Brentwood and Ongar

If, as the hon. Lady says, local authorities already have a coherent strategy for reducing debt, what is the problem with announcing what that strategy is?

Photo of Hilary Armstrong Hilary Armstrong Minister of State (Local Government and Housing), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions) (Local Government)

The hon. Gentleman's problem is that he lacks patience. I am about to explain to him what local government already does, and why what he seeks would impose more bureaucratic burdens. The former Administration said that they wanted to reduce bureaucracy and increase deregulation, which is why I find the hon. Gentleman's support for the new clause somewhat bizarre.

Photo of Paul Beresford Paul Beresford Conservative, Mole Valley

We already have the bureaucracy associated with BCAs. Now we suggest a parallel system similar to it. That will indeed double the bureaucracy, and it would not be necessary, but for the fact that the Government feel the need to genuflect in the direction of their manifesto commitment on capital receipts—even though none is being released.

Photo of Hilary Armstrong Hilary Armstrong Minister of State (Local Government and Housing), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions) (Local Government)

Perhaps the hon. Gentleman believes that political parties need not think about their manifestos. The Bill meets our commitment in that respect.

It is far from obvious what the obligation to prepare a five-year strategy for debt reduction would require a local authority to do. The Chartered Institute of Public Finance and Accountancy already gives guidance to local authorities, building on section 45 of the Local Government and Housing Act 1989, which requires local authorities to make a Treasury management policy statement. I note that no Conservative Minister in the past seven years. when issuing SCAs, thought it desirable to require local government to produce such a strategy. In fact, existing controls on borrowing appear to have been accepted as perfectly adequate.

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

Has not my hon. Friend just put her finger on the bogus nature of the new clause? The previous Government extended the use of SCAs with no such debt reduction requirement. There is surely a world of difference between extending SCAs to stimulate the housing market and meet a need, and issuing SCAs, as the Conservatives did, simply to reduce Government support to local authorities.

Photo of Hilary Armstrong Hilary Armstrong Minister of State (Local Government and Housing), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions) (Local Government)

Absolutely. That is why I began by pointing out that the hon. Member for Christchurch had difficulty keeping a straight face.

Local authorities already have a statutory duty to set aside a fixed proportion of their net debt each year from revenue—known as the minimum revenue provision. I see no case for further restrictive controls or further bureaucracy.

The new clause is flawed because it would act on supplementary credit approvals but not on basic credit approvals. As the hon. Member for Mole Valley (Sir P. Beresford) said, basic credit approvals authorise the bulk of new local authority borrowing each year, so much of local authority debt would not be covered by the new clause.

May I deal briefly with the point made by the hon. Member for South Cambridgeshire (Mr. Lansley), who is no longer in the Chamber, about debt-free authorities? Debt-free authorities will not be disadvantaged or penalised by this measure. They will be free to take up credit approvals if they so wish, and they may choose to use them to meet housing need, without ceasing to be debt free, by spending money that they have set aside to meet their debts. That matter is clear because we have been through it several times in Committee, and most Committee members are now clear about the position of debt-free authorities.

The new clause is undesirable and unwanted. I urge the House to reject it.

5 pm

Photo of Christopher Chope Christopher Chope Shadow Minister (Environment, Food and Rural Affairs), Vice-Chair, Conservative Party

I am disappointed with the Minister's response, because the new clause was tabled to try to help the Government. The Minister demonstrates the Government's inability to come to terms with the fact that there is more than one way to have a debt reduction strategy. She talks about phasing the payments and ensuring that local authorities pay so much capital back each year, but another debt reduction strategy is asset realisation—[interruption.]

Labour Members are commenting on the fact that a number of Conservative Members have absented themselves from the Chamber. The reason is that they wish to participate in a democratic election for an important post on a Conservative Back-Bench Committee. They will be back. I am grateful for their active participation in this debate and to debates in Committee.

I remind Labour Members that when the Bill was in Committee, speeches on the Government side were made only by Ministers; none was made by Labour Back Benchers. Indeed, there were no Scottish or Welsh Committee members, despite the fact that the Bill applies to Wales. We surmise that that was because Welsh Members might have wanted to speak, and it was clear that the Government had delivered an edict ensuring that only Government Front-Bench Members could speech.

Photo of Christopher Chope Christopher Chope Shadow Minister (Environment, Food and Rural Affairs), Vice-Chair, Conservative Party

We are not struggling at all. However, local authorities are struggling with the debt burden, which will increase as a result of the Bill.

We suggest that local authorities should be encouraged in the process of asset realisation. During the debate, it has been suggested that the previous Government did nothing to help reduce local authority debt. The previous Administration did a mass to reduce local authority debt, because we enabled people to buy their own council houses, which was the largest privatisation that this country had ever known. Some £20 billion was realised as a result of that process. Without that successful policy, national debt would have increased by even more than it did during the recession.

Some Labour Members talked about the net public sector debt per person. In 1979, when the last Government took office, the Conservative Government pulled this country up from virtually the worst performer in terms of net debt to one of the best, compared with other European countries. At the last general election, the only European country with a lower debt ratio was Luxembourg.

Photo of Adrian Sanders Adrian Sanders Opposition Whip (Commons), Shadow Spokesperson (Communities and Local Government)

Was not this country's debt reduced purely because of the privatisation programme and how it related to the public sector borrowing requirement?

Photo of Christopher Chope Christopher Chope Shadow Minister (Environment, Food and Rural Affairs), Vice-Chair, Conservative Party

We knew all along that the Liberal Democrats were against the privatisation programme. We now have the spectacle that the Government have made some obiter dicta to the effect that they may be in favour of certain privatisation programmes, but even the Liberal Democrats have not yet come round to accepting the benefits that flow from privatisation, particularly in housing—the large-scale voluntary transfer of housing to housing associations, and the sale of individual council houses to tenants who wished to buy them. Those initiatives, which were the hallmark of the last Conservative Government, were opposed tooth and nail by the Liberal Democrat party.

Photo of Dave Watts Dave Watts Labour, St Helens North

Will the right hon. Gentleman comment on the cost of bed and breakfast to the taxpayer during the 17 yeas that the Conservatives were in power?

Photo of Christopher Chope Christopher Chope Shadow Minister (Environment, Food and Rural Affairs), Vice-Chair, Conservative Party

Any money spent on bed and breakfast was too much. One of the problems was that the last Government brought in measures to deal with bogus asylum seekers who came to this country—

Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. I should be grateful if the right hon. Gentleman would now return to the new clause.

Photo of Christopher Chope Christopher Chope Shadow Minister (Environment, Food and Rural Affairs), Vice-Chair, Conservative Party

I was looking forward to the opportunity to respond to a point made in an intervention, but I accept your ruling, Mr. Deputy Speaker that it was too wide of the new clause.

The new clause is designed to deal with capital debt reduction. I hope that the House will accept the purpose behind it. The hon. Lady's response was that it would create too much bureaucracy. She said that it would be too burdensome on local authorities to produce a debt redemption strategy, yet we know that any local authority worth its salt could produce such a strategy and should already have an asset realisation strategy, if it is to deliver what its rate and charge payers deserve. [Interruption.] I cannot hear what the Minister is mouthing from a sedentary position. I remain disappointed at her response.

I am grateful to my hon. Friends who contributed to this debate so effectively. During the last Parliament, my hon. Friend the Member for Hertsmere (Mr. Clappison) witnessed from the Front Bench the suggestions made by the Labour party, leading people to believe that a pot of gold would be released as soon as a Labour Government came to power. My hon. Friend drew attention once again to the manner in which those people were cruelly misled.

My hon. Friend the Member for West Dorset (Mr. Letwin) made another powerful speech, and effective interventions were made by my hon. Friends the Members for Brentwood and Ongar (Mr. Pickles) and for Mole Valley (Sir P. Beresford). We think that this issue is sufficiently important to divide the House. The burden of local authority debt should be brought under control and we are frightened that, under the present Government, it will run completely out of control without such a measure.

Question put, That the clause be read a Second time:—

The House divided: Ayes 142, Noes 355.

Division No. 49][5.9 pm
AYES
Ainsworth, Peter (E Surrey)Bercow, John
Amess, DavidBeresford, Sir Paul
Ancram, Rt Hon MichaelBlunt, Crispin
Arbuthnot, JamesBody, Sir Richard
Atkinson, David (Bour'mth E)Boswell, Tim
Atkinson, Peter (Hexham)Bottomley, Peter (Worthing W)
Baldry, TonyBottomley, Rt Hon Mrs Virginia
Beggs, Roy (E Antrim)Brady, Graham
Brazier, JulianLloyd, Rt Hon Sir Peter (Fareham)
Brooke, Rt Hon PeterLoughton, Tim
Browning, Mrs AngelaLuff, Peter
Bruce, Ian (S Dorset)Lyell, Rt Hon Sir Nicholas
Burns, SimonMacGregor, Rt Hon John
Butterfill, JohnMcIntosh, Miss Anne
Cash, WilliamMacKay, Andrew
Chapman, Sir Sydney (Chipping Barnet)Maclean, Rt Hon David
McLoughlin, Patrick
Chope, ChristopherMadel, Sir David
Clappison, JamesMalins, Humfrey
Clark, Rt Hon Alan (Kensington)Mates, Michael
Clark, Dr Michael (Rayleigh)Maude, Rt Hon Francis
Clarke, Rt Hon Kenneth (Rushcliffe)Mawhinney, Rt Hon Dr Brian
May, Mrs Theresa
Clifton-Brown, GeoffreyMerchant, Piers
Collins, TimMoss, Malcolm
Colvin, MichaelNicholls, Patrick
Cormack, Sir PatrickNorman, Archie
Curry, Rt Hon DavidPage, Richard
Davis, Rt Hon David (Haltemprice)Paice, James
Davies, Quentin (Grantham)Paterson, Owen
Dorrell, Rt Hon StephenPickles, Eric
Duncan, AlanPrior, David
Duncan Smith, IainRedwood, Rt Hon John
Evans, NigelRobathan, Andrew
Faber, DavidRobertson, Laurence (Tewk'b'ry)
Fabricant, MichaelRoe, Mrs Marion (Broxbourne)
Fallon, MichaelRowe, Andrew (Faversham)
Flight, HowardSayeed, Jonathan
Forth, Rt Hon EricShephard, Rt Hon Mrs Gillian
Fowler, Rt Hon Sir NormanShepherd, Richard (Aldridge)
Fox, Dr LiamSimpson, Keith (Mid-Norfolk)
Fraser, ChristopherSoames, Nicholas
Gale, RogerSpelman, Mrs Caroline
Garnier, EdwardStanley, Rt Hon Sir John
Gibb, NickSteen, Anthony
Gill, ChristopherStreeter, Gary
Gillan, Mrs CherylSwayne, Desmond
Goodlad, Rt Hon AlastairSyms, Robert
Gray, JamesTapsell, Sir Peter
Green, DamianTaylor, Ian (Esher & Walton)
Greenway, JohnTaylor, John M (Solihull)
Grieve, DorninicTaylor, Sir Teddy
Gummer, Rt Hon JohnTemple-Morris, Peter
Hamilton, Rt Hon Sir ArchieTownend, John
Hammond, PhilipTredinnick, David
Hawkins, NickTyrie, Andrew
Hayes, JohnViggers, Peter
Heald, OliverWalter, Robert
Heathcoat-Amory, Rt Hon DavidWaterson, Nigel
Horam, JohnWells, Bowen
Howard, Rt Hon MichaelWhitney, Sir Raymond
Howarth, Gerald (Aldershot)Whittingdale, John
Hunter, AndrewWiddecombe, Rt Hon Miss Ann
Jack, Rt Hon MichaelWilkinson, John
Jackson, Robert (Wantage)Willetts, David
Jenkin, Bernard (N Essex)Winterton, Mrs Ann (Congleton)
Key, RobertWinterton, Nicholas (Macclesfield)
Kirkbride, Miss JulieWoodward, Shaun
Laing, Mrs EleanorYeo, Tim
Lansley, AndrewYoung, Rt Hon Sir George
Leigh, Edward
Letwin, OliverTellers for the Ayes:
Lewis, Dr Julian (New Forest E)Mr. Richard Ottaway and
Lilley, Rt Hon PeterMr. James Cran.
NOES
Adams, Mrs Irene (Paisley N)Ashton, Joe
Ainger, NickAtherton, Ms Candy
Ainsworth, Robert (Cov'try NE)Atkins, Charlotte
Allan, Richard (Shef'ld Hallam)Austin, John
Allen, Graham (Nottingham N)Baker, Norman
Anderson, Janet (Rossendale)Ballard, Mrs Jackie
Armstrong, Ms HilaryBarnes, Harry
Ashdown, Rt Hon PaddyBarron, Kevin
Bayley, HughDarling, Rt Hon Alistair
Beard, NigelDarvill, Keith
Beckett, Rt Hon Mrs MargaretDavey, Edward (Kingston)
Begg, Miss Anne (Aberd'n S)Davey, Valerie (Bristol W)
Beith, Rt Hon A JDavidson, Ian
Bell, Stuart (Middlesbrough)Davies, Rt Hon Denzil (Llanelli)
Bennett, Andrew FDavies, Geraint (Croydon C)
Bermingham, GeraldDavies, Rt Hon Ron (Caerphilly)
Berry, RogerDawson, Hilton
Best, HaroldDean, Mrs Janet
Blackman, LizDenham, John
Blears, Ms HazelDewar, Rt Hon Donald
Blizzard, BobDismore, Andrew
Boateng, PaulDonohoe, Brian H
Borrow, DavidDoran, Frank
Bradley, Keith (Withington)Dowd, Jim
Bradley, Peter (The Wrekin)Drew, David
Bradshaw, BenDrown, Ms Julia
Brake, ThomasEagle, Angela (Wallasey)
Brand, Dr PeterEdwards, Huw
Breed, ColinEfford, Clive
Brinton, Mrs HelenEllman, Ms Louise
Brown, Rt Hon Nick (Newcastle E)Ennis, Jeff
Brown, Russell (Dumfries)Etherington, Bill
Browne, Desmond (Kilmarnock)Fearn, Ronnie
Bruce, Malcolm (Gordon)Field, Rt Hon Frank
Burden, RichardFisher, Mark
Burgon, ColinFlint, Caroline
Burstow, PaulFlynn, Paul
Butler, ChristineFollett, Barbara
Byers, StephenFoster, Don (Bath)
Cable, Dr VincentFoster, Michael John (Worcester)
Cabom, RichardFyfe, Maria
Campbell, Alan (Tynemouth)Galbraith, Sam
Campbell, Mrs Anne (C'bridge)Galloway, George
Campbell, Menzies (NE Fife)George, Andrew (St Ives)
Campbell, Ronnie (Blyth V)Gerrard, Neil
Campbell-Savours, DaleGibson, Dr Ian
Cann, JamieGodman, Dr Norman A
Caplin, IvorGodsiff, Roger
Casale, RogerGoggins, Paul
Caton, MartinGolding, Mrs Llin
Cawsey, IanGordon, Mrs Eileen
Chapman, Ben (Wirral S)Gorrie, Donald
Chidgey, DavidGrant, Bernie
Chisholm, MalcolmGriffiths, Jane (Reading E)
Clapham, MichaelGriffiths, Nigel (Edinburgh S)
Clark, Dr Lynda (Edinburgh Pentlands)Griffiths, Win (Bridgend)
Grocott, Bruce
Clark, Paul (Gillingham)Grogan, John
Clarke, Charles (Norwich S)Gunnell, John
Clarke, Eric (Midlothian)Hall, Mike (Weaver Vale)
Clarke, Rt Hon Tom (Coatbridge)Hall, Patrick (Bedford)
Clarke, Tony (Northampton S)Hancock, Mike
Clelland, DavidHanson, David
Coaker, VernonHarvey, Nick
Coffey, Ms AnnHeal, Mrs Sylvia
Colman, Tony (Putney)Healey, John
Connarty, MichaelHenderson, Ivan (Harwich)
Cooper, YvetteHepburn, Stephen
Corbett, RobinHeppell, John
Corbyn, JeremyHesford, Stephen
Corston, Ms JeanHewitt, Ms Patricia
Cousins, JimHill, Keith
Cranston, RossHodge, Ms Margaret
Crausby, DavidHoey, Kate
Cryer, Mrs Ann (Keighley)Home Robertson, John
Cryer, John (Hornchurch)Hood, Jimmy
Cummings, JohnHoon, Geoffrey
Cunliffe, LawrenceHope, Phil
Cunningham, Jim (Cov'try S)Hopkins, Kelvin
Cunningham, Rt Hon Dr John (Copeland)Howells, Dr Kim
Hoyle, Lindsay
Curtis-Thomas, Mrs ClaireHughes, Ms Beverley (Stretford)
Dafis, CynogHughes, Kevin (Doncaster N)
Dalyell, TamHumble, Mrs Joan
Hurst, AlanMorgan, Ms Julie (Cardiff N)
Hutton, JohnMorgan, Rhodri (Cardiff W)
Iddon, Dr BrianMorris, Ms Estelle (B'ham Yardley)
Illsley, EricMorris, Rt Hon John (Aberavon)
Jackson, Ms Glenda (Hampstead)Mountford, Kali
Jackson, Helen (Hillsborough)Mudie, George
Jenkins, Brian (Tarnworth)Mullin, Chris
Johnson, Miss Melanie (Welwyn Hatfield)Murphy, Denis (Wansbeck)
Murphy, Jim (Eastwood)
Jones, Barry (Alyn & Deeside)Norris, Dan
Jones, Ms Fiona (Newark)O'Brien, Bill (Normanton)
Jones, Jon Owen (Cardiff C)O'Brien, Mike (N Warks)
Jones, Dr Lynne (Selly Oak)Olner, Bill
Jones, Martyn (Clwyd S)Öpik, Lembit
Jones, Nigel (Cheltenham)Organ, Mrs Diana
Jowell, Ms TessaOsborne, Mrs Sandra
Keeble, Ms SallyPearson, Ian
Keen, Alan (Feltham & Heston)Pendry, Tom
Keen, Mrs Ann (Brentford)Pickthall, Colin
Keetch, PaulPike, Peter L
Kemp, FraserPlaskitt, James
Kennedy, Charles (Ross Skye)Pollard, Kerry
Kennedy, Jane (Wavertree)Pond, Chris
Khabra, Piara SPope, Greg
Kidney, DavidPound, Stephen
Kilfoyle, PeterPrentice, Ms Bridget (Lewisham E)
King, Andy (Rugby & Kenilworth)Prentice, Gordon (Pendle)
King, Ms Oona (Bethnal Green)Prescott, Rt Hon John
Kirkwood, ArchyPrimarolo, Dawn
Kumar, Dr AshokProsser, Gwyn
Ladyman, Dr StephenPurchase, Ken
Lawrence, Ms JackieQuin, Ms Joyce
Laxton, BobQuinn, Lawrie (Scarborough)
Lepper, DavidRammell, Bill
Levitt, TomRapson, Syd
Lewis, Ivan (Bury S)Raynsford, Nick
Lewis, Terry (Worsley)Rendel, David
Linton, MartinRoche, Mrs Barbara
Livingstone, KenRogers, Allan
Lloyd, Tony (Manchester C)Rooker, Jeff
Llwyd, ElfynRooney, Terry
Love, AndrewRoy, Frank
McAvoy, ThomasRuane, Chris
McCabe, StephenRussell, Bob (Colchester)
McCafferty, Ms ChrisSalter, Martin
McCartney, Ian (Makerfield)Sanders, Adrian
McDonagh, SiobhainSavidge, Malcolm
Macdonald, CalumSawford, Phil
McDonnell, JohnSedgemore, Brian
McFall, JohnSheerman, Barry
McGuire, Mrs AnneSheldon, Rt Hon Robert
McIsaac, ShonaShipley, Ms Debra
McKenna, Ms RosemarySimpson, Alan (Nottingham S)
Maclennan, RobertSingh, Marsha
McNulty, TonySkinner, Dennis
MacShane, DenisSmith, Rt Hon Andrew (Oxford E)
Mactaggart, FionaSmith, Angela (Basildon)
McWalter, TonySmith, Miss Geraldine (Morecambe & Lunesdale)
McWilliam, John
Mahon, Mrs AliceSmith, Jacqui (Redditch)
Mallaber, JudySmith, John (Glamorgan)
Marek, Dr JohnSmith, Sir Robert (W Ab'd'ns)
Marsden, Paul (Shrewsbury)Snape, Peter
Marshall, David (Shettleston)Soley, Clive
Marshall, Jim (Leicester S)Southworth, Ms Helen
Martlew, EricSpellar, John
Maxton, JohnSquire, Ms Rachel
Meacher, Rt Hon MichaelStarkey, Dr Phyllis
Meale, AlanSteinberg, Gerry
Michael, AlunStevenson, George
Michie, Bill (Shef"ld Heeley)Stewart, David (Inverness E)
Milburn, AlanStewart, Ian (Eccles)
Mitchell, AustinStinchcombe, Paul
Moffatt, LauraStoate, Dr Howard
Moore, MichaelStott, Roger
Moran, Ms MargaretStrang, Rt Hon Dr Gavin
Straw, Rt Hon JackWalley, Ms Joan
Stringer, GrahamWatts, David
Stuart, Ms Gisela (Edgbaston)Webb, Professor Steve
Stunell, AndrewWhite, Brian
Sutcliffe, GerryWhitehead, Dr Alan
Taylor, Rt Hon Mrs Ann (Dewsbury)Wicks, Malcolm
Williams, Rt Hon Alan (Swansea W)
Taylor, David (NW Leics)
Thomas, Gareth (Clwyd W)Wlliams, Alan W (E Carmarthen)
Williams, Mrs Betty (Conwy)
Thomas, Gareth R (Harrow W)Wills, Michael
Timms, StephenWinnick, David
Tipping, PaddyWinterton, Ms Rosie (Doncaster C)
Todd, MarkWood, Mike
Touhig, DonWoolas, Phil
Trickett, JonWray, James
Turner, Dennis (Wolverh'ton SE)Wright, Dr Tony (Cannock)
Turner, Dr George (NW Norfolk)Wright, Tony D (Gt Yarmouth)
Twigg, Derek (Halton)Wyatt, Derek
Twigg, Stephen (Enfield)
Tyler, PaulTellers for the Noes:
Vaz, KeithMr. Clive Betts and
Wallace, JamesMr. David Jamieson.

Question accordingly negatived.