§ 3.2 p.m.
§ Lord Dean of Beswick asked Her Majesty's Government:
§ How much of the £1.75 billion in capital receipts estimated by them to be made available to local authorities as a result of the Autumn Statement will be wiped out through clawbacks and redistribution.
§ The Parliamentary Under-Secretary of State, Department of the Environment (Lord Strathclyde)My Lords, local authorities are free to spend the estimated £1.75 billion of extra usable capital receipts as they choose and are not required to repay any of them to the Exchequer as a result of the measure.
The distribution of basic credit approval takes some account of authorities' estimated usable receipts, but this does not reduce the total of central government support for their capital programmes.
§ Lord Dean of BeswickMy Lords, I am grateful to the Minister for that reply because it gives me some hope. Does he agree that when this subject was dealt with by the Chancellor in the Autumn Statement it gave a fragile hope to the building industry, which has already been devastated? Will the Minister also agree that if Mr. Portillo takes his scalpel to the £1.75 billion he may just about ruin the building industry for all time?
§ Lord StrathclydeMy Lords, we have no intention of ruining the building industry. The noble Lord is right, the Autumn Statement was about giving the building industry confidence and giving local authorities money to spend with that industry.
§ Lord Williams of ElvelMy Lords, will the noble Lord accept that his own department now considers that £700 million of the so-called £1.75 billion will be taken up in place of normal borrowing for housing investment programme allocations? Further, is he aware that £56 million will be taken up in supplying the shortfall in renovation grants which the Government have cut? Therefore, even if the £1.75 billion is achieved and, of that, £1 billion is left, to participate in the capital partnership programmes which the department has announced will require further sums. Even if that doubtful target is achieved, how much will be left for building new houses?
§ Lord StrathclydeMy Lords, I find it extraordinary that noble Lords opposite believe that the announcement that we made in the Autumn Statement was some sort of financial trickery, some sleight of hand by the Government. In my original Answer, I explained that local authorities could choose how to spend that 902 money provided it is on capital expenditure. Whether they spend it on new houses or other projects is entirely up to them.
§ Lord Williams of ElvelMy Lords, will the noble Lord accept that it is not noble Lords from these Benches who called it "some sort of trickery"? The leader of Nottingham District Council said that it was a con, a cosmetic public relations exercise.
§ Lord StrathclydeMy Lords, I do not believe that £1.75 billion is a con at all. It is a valuable contribution that is being made to the building industry and one that most responsible local authorities are taking up.
§ Lord Stoddart of SwindonMy Lords, can the noble Lord give an estimate as to how many new houses will be built and how many workers will be put back into employment?
§ Lord StrathclydeNo, my Lords, that depends on how the money is spent.