Housing Investment (Hansard, 17 December 1980)

§ 19. Mr. Hardy
asked the Secretary of State for the Environment if he will estimate the total number of jobs which have been lost and the total cost incurred by local authorities as a consequence of his moratorium on housing investment.

§ Mr. Heseltine
The decision to halt the letting of new local authority housing contracts was taken to prevent expenditure exceeding the cash limit for the current financial year. That cash limit, and, therefore, the employment and work load that it may have been expected to generate, remains unchanged.

§ Mr. Hardy
Does not the Secretary of State perceive that there is a staggering increase in building industry bankruptcies? Does he not realise that the rate of unemployment is increasing to the point where the cost is now £450 million more each month? In view of that, does not the moratorium appear to be socially absurd or economically extravagant in many parts of the North of England?

§ Mr. Heseltine
I realise that the fact that we have had to impose a moratorium on a capital programme to keep within the cash limits presents short-term difficulties for some authorities. But the hon. Gentleman has been in the House long enough to know the consequences of not maintaining proper control over the national economy. During the period of the Labour Government, the whole of local government capital expenditure was halved.

§ Mr. Squire
Does not my right hon. Friend accept that while many hon. Members welcome any determination by Governments to keep within their budgets, one of the continuing problems in housing is the failure to distinguish between investment and revenue expenditure? Is he aware that many hon. Members would welcome greater attention being given by the Government to that aspect, which, in isolation, would do more to assist the construction industry than many other measures?

§ Mr. Heseltine
I agree with my hon. Friend. He will have noticed from my announcement this week that the further cuts that I was requested to make by my right hon. and learned Friend the Chancellor of the Exchequer in respect of housing bore almost exclusively on current account. The House will recognise from my statement about council house rents that it was very much in recognition of the thoughts of my hon. Friend that we switched the emphasis in public expenditure reductions to current, not capital, expenditure.

§ Mr. Frank Allaun
Does not the Secretary of State recognise that the gloom and doom referred to earlier by the Minister for Housing and Construction results from the Government's cuts? Does he intend the moratorium that he announced in October to continue until April? If so, does not that mean halving this year's housing starts, which are already the lowest on record, not simply since the 1930s but since the 1920s?

§ Mr. Heseltine
I think that the hon. Gentleman has failed to understand that the imposition of the moratorium did not reduce the cash limit. We have already fully used, to within a small percentage point, the available cash limit for this year. The hon. Gentleman is asking about the use that local authorities make of that available resource. The local authorities are switching more and more to other purposes rather than to new build. If we give local authorities the power of discretion, they have the power to do that, and if they do so it must be because it reflects the needs in their areas.