HC Deb 23 November 1977 vol 939 cc1501-6
4. Mr. Joseph Dean

asked the Secretary of State for the Environment what criteria will be used in apportioning the extra financial resources that will be made available for next year, to local authority house building and improvement programmes, in accordance with the Chancellor's statement of Wednesday 26th October.

Mr. Shore

The extra resources, amounting to £150 million, will be added to the public expenditure provision for housing investment in 1978–79. We are currently considering the criteria on which allocations will be made and are consulting the Housing Consultative Council. I expect allocations to have regard both to an assessment of need as well as to authorities' own proposals for expenditure.

Mr. Dean

I thank my right hon. Friend for that answer. Does he agree that if the criteria used this year and last year are continued, those authorities that have done well under that system will continue to do so while authorities like Leeds, which is the one that I represent, which did rather badly under the criteria, will still be victimised?

Mr. Shore

My hon. Friend certainly has a point. When we introduced controls over new house building last year, we produced in a rather rough and ready way stress areas and non-stress areas. My hon. Friend, of course, represents a constituency in a city which we deemed to be a stress area. But inevitably in allocating these sums we had to take account of what those authorities had been spending in the last two years. Under the new consultations that we are having, we hope to take account not only of past expenditure but of a more factual basis of actual need.

Mr. Michael Morris

Is the Secretary of State aware that in large parts of the Midlands the greatest need is not new house building but a combination of improvement grants and local authority mortgages for terraced properties? Can he give an assurance that local authorities will have greater discretion to move budgets around if they so desire? Will he also say that he will not prevent the allocation of local authority mortgages for this purpose?

Mr. Shore

Obviously the hon. Gentleman is entirely happy with the development of the Government's housing policy, because we have established precisely three blocks of local authority housing expenditure and we are allowing, as it were, total freedom of manoeuvre within each of those large blocks and some movement from one block to another.

Mr. Frank Allaun

Do not the extra resources amount to only half the cuts made in the past year? Do we not need a far greater increase? Would not a visitor from Mars arriving here think that we were crazy on seeing the desperate housing need, on the one hand, and 250,000 unemployed building workers, on the other?

Mr. Shore

My hon. Friend knows that I always welcome his encouragement. I am very much in favour of increasing the totality of the housing programmes. Of course, I am sure that the decision announced a short time ago about the increase of £150 million in money available for capital investment in housing gives my hon. Friend considerable satisfaction, as well as it does me. It would give him even more satisfaction, which I would share, if we were able to improve on that in the future. Perhaps we shall be.

Mr. Heseltine

Will the Secretary of State confirm that when deciding on needs as he sees them he has no intention of limiting the discretion of local authorities to choose within which of the three blocks of apportionment they allocate their revenues and expenditure?

Mr. Shore

There has to be some general discussion and agreement on the blocks across the country—as a whole, as it were—otherwise there would be no point in having any blocks at all. One would simply make a total allocation. We have gone a considerable way in liberalising the systems introduced in the past and I believe that is widely welcomed by local authorities.

14. Mr. Skinner

asked the Secretary of State for the Environment what are the latest official figures for house building in the public and private sectors.

Mr. Freeson

In September there were 28,400 starts in Great Britain, of which 13,500 were in the public sector and 14,900 were in the private sector. There were 28,100 completions, 15,600 in the public sector, 12,600 in the private sector.

Mr. Skinner

Is my right hon. Friend aware that these appalling figures have arisen because he and his colleagues, especially those in the Cabinet and the Treasury, paid heed to the hysteria from the Tories about cuts in public expenditure as a result of which we today have a lobbying of the House by many thousands of people protesting at the situation? Will he explain more precisely what he intends to do to increase the amount of money available for housing in 1978–79 when this exercise is balanced against the fact that, according to the IMF decision in December last, there is to be a further £300 million cut in housing? Therefore, is there not likely to be a further reduction in expenditure on housing?

Mr. Freeson

Whatever may be the arguments over the action on public expenditure agreed in the IMF settlement, it would be a mistake to comment that the rate of house building by local authorities throughout the country in the months that have ensued has been affected by that. The position now—as I indicated some months ago was likely to be the case—is that, although the Government have provided resources for about 150,000 housing starts in the public sector in 1977, there is clear evidence that a number of local authorities are not taking up the resources already available.

The figures that I have referred to relate to a shortfall on provided expenditure, irrespective of the argument whether or not cuts should have been imposed last year.

Mr. Frank Allaun

Will the £300 million cut imposed by the IMF for this year be restored next year? Should not half of the profits from North Sea oil be devoted to housing and other social expenditure? I should particularly like the Minister to reply to my first question.

Mr. Freeson

I have my own views on the broad strategic questions relating to the future use of profits from North Sea oil and I shall participate in presenting them in Government, but that question would be best directed to the Chancellor of the Exchequer.

As for the prospects for housing in the coming year, it is already our intention to increase provision by about £150 million in 1978. However, that is not my immediate concern. I am concerned about the failure on the part of a number of local authorities to take up resources that have been provided. I am doing my best—although with difficulty—to reallocate resources that have not been taken up by some authorities to those authorities which are able to use the cash. However, that is a difficult exercise when we are already more than half-way through the year.

Mr. MacKay

Is the Minister aware that there will he a further reduction in the number of houses built in the private sector next year because of the decreasing supply of land that has resulted from the disastrous Community Land Act? Does he realise that those who will suffer most will be the first-time buyers whom the Minister professes to want to help, because costs will go up as a result of supply and demand?

Mr. Freeson

The hon. Gentleman is a little mixed up. Whatever views there may be on the future of land supply—some house builders are concerned about the prospects in three years' time—there is no reason to believe that that will affect house building in 1978. There has recently been a marginal uplift in the number of housing starts in the private sector, and I hope—and I wish to help it—that that will be sustained in 1978.

Mr. Douglas-Mann

Is it correct that the underspending of public expenditure allocated for housing in 1976–77 was about £400 million and is likely to be even higher this year? While I appreciate the Minister's proposals to reallocate money between local authorities, from those which are not pressing forward with schemes towards those which are, could there not be an additional allocation to take account of what was not spent before?

Mr. Freeson

That is a broad issue. In fixing the allocation for the new housing investment programmes for 1978–79, we shall certainly take into account the experiences that we have had with certain local authorities in recent months. However, we cannot consider the underspending of 1976, 1975 or even earlier being made available for allocation during 1978—if that is the point that my hon. Friend was seeking to make.

Mr. Heseltine

Does the Minister recognise that the only good figures that have come out of his Department have been ones that show that local authority and housing association renovations of older homes have increased by 9 per cent.? Does that not show a welcome diversion of resources—mostly by Tory-controlled authorities—towards improving existing houses and away from expensive new building? Does the Minister realise that, although he may tell the House that there has been a slight improvement in the number of housing starts, the House will remember that his Department recently announced that housing starts were 17 per cent. down over the previous 12 months? Does that not amount to a total failure of the Minister's housing policies?

Mr. Freeson

The hon. Gentleman is trawling back over points that I have already dealt with. I said that there had been a decline, but I should point out that a large part of that has been due not to a failure to provide resources on the part of the Government but to a failure by a number of local authorities to take up resources available.

We certainly welcome more rehabilitation of homes. It is part of Government policy to increase the amount of rehabilitation that is carried out by local authorities and housing associations, and we are encouraging that. However, the hon. Gentleman is mistaken if he thinks that that has come about only in this year as a result of the diversion of resources from new building to rehabilitation. That is not the case. It has come about as part of the provision for which we budgeted. What we are seeing this year is an under-spending of resources, not a switching of resources.