Local Authorities (Capital Expenditure)

HC Deb 27 February 1985 vol 74 cc337-88

Mr. Speaker

As a large number of Members wish to speak in the debate, I hope that speeches will be reasonably brief so that all who wish to speak can be called.

I have selected the amendment in the name of the Prime Minister.

Sir Kenneth Lewis (Stamford and Spalding)

On a point of order, Mr. Speaker. The point relates to Report stages of Bills generally.

Mr. Speaker

This is not a Report stage. It is an Opposition day. The Report stage of the Representation of the People Bill will come later.

Sir Kenneth Lewis

I beg your pardon, Mr. Speaker.

3.46 pm

Mr. Jeff Rooker (Birmingham, Perry Barr)

I beg to move, That this House, noting the existence of local authority accumulated reserves of capital receipts of about £5 billion and the Secretary of State for the Environment's acceptance that these reserves belong to the local authorities, noting the existence of housing and infrastructure need, noting the continuing need to create real jobs, but regretting the proposals of the Secretary of State to reduce the prescribed proportion of receipts which an authority may spend in any one year, asks the Secretary of State to review these proposals and restore the prescribed proportion of housing receipts to 40 per cent. and of other receipts to what they were prior to his statement of 18th December 1984. Following the statement on 18 December, there was an emergency debate and it would be futile to repeat today the arguments advanced on that occasion by my hon. Friend the Member for Copeland (Dr. Cunningham), whom we all wish a speedy return to good health.

In my two recent visits to the north-east and the north-west, the building employers and master builders put this new cut in local authority capital spending virtually at the top of the agenda for their discussions with me. They know that this new attack on local authorities will affect the private sector in a real sense, losing business and hence jobs. Small firms have started up on the strength of the crisis identified by the house conditions survey and large building firms have set up divisions to specialise in this work, knowing that it was heavily funded by capital receipts from the sale of land and houses. Building employers' organisations are now desprately trying to place apprentices whose firms have gone bust.

Last week, The Times reported that the National Consumer Council will have a paper before it next month claiming that 1 million homes are unfit to live in, and that one in 20 homes lack hot and cold running water and the same number have only outside toilets. On the same day, The Guardian reported: the Government is to give £25 million to save three stately homes". I am all in favour of saving the country's heritage, but for millions of our fellow citizens an unfit home is their only heritage.

It is all very well for the Tory manifesto to state: Our goal is to make Britain the best housed nation in Europe and for the Prime Minister to say: Of course we must abolish the slums."—[Official Report, 5 November 1974; Vol. 880, c. 898.] In reality, the building programme under this government is the worst since the war. In five full years of Conservative rule, new home starts averaged 180,000 per year compared with an average of 285,000 per year under the Labour Government. Indeed, in the best year under the Conservatives, 1983, housing starts totalled 214,000. That was 50,000 less than in 1978, which was the worst year under the last Labour Government. That is the sort of record we must consider today.

Builders throughout the country are expressing concern lest, if the rate of new build stays low and the improvement programme is cut back, they will be forced in the next decade to return to massive programmes based on system or non-traditional methods. They do not want to do that. Neither do the Opposition. Nor should the Government.

I suspect that this afternoon we shall hear from the Treasury Bench the familiar speech full of local authority financial jargon. We shall be told, and I accept, that unfit housing did not start in 1979. We shall also hear about the improvement programme increases of the last couple of years.

When we are building 100,000 fewer homes a year and when we are clearing slums at only one third of the rate of the last Labour Government, the very minimum required to stand still is an increase in the improvement programme. Thus, the Government have nothing to boast about.

We have some words of the Prime Minister to send us on our way in this debate. Speaking of local authorities selling assets of buildings and land, she said that that would bring a substantial profit to local authorities which they could use to build special units for old people, for which there is a serious need." — [Official Report, 5 November 1974; Vol. 880, c. 897.] The need is no less now than it was when the right hon. Lady uttered those words at this Dispatch Box in 1974, when she was shadow Secretary of State for the Environment. Why, we are entitled to ask, has the building programme for the elderly halved, from 27,000 a year in 1980 to 14,000 in 1983?

I thought that I could safely leave it to the right hon. and learned Member for Hexham (Mr. Rippon)—who, unfortunately, is not in his place — to argue a cogent case on behalf of himself and his 74 right hon. and hon. Friends who signed a motion similar to that before the House today when it was an early-day motion and we were in office. Indeed, The Guardian printed most of those 74 names and described it as "another Tory rebellion."

My hon. Friends will put a powerful case on behalf of their constituents, builders and local authorities. I have with me a sheaf of letters from councils throughout the country, Tory and Labour-controlled, identifying the crisis that has been caused by the further cut. However, the case that will not be put in this debate is that affecting adversely all our constituents and local authorities. Treasury and Department of the Environment Ministers will not make that case clear. It is an omission that I intend to rectify.

Mr. Allan Roberts (Bootle)

Is my hon. Friend aware that, in a recent parliamentary answer to me, the Chancellor of the Exchequer refused to meet the group of eight representing the construction industry? That was the first time that a Chancellor had refused to meet the representatives of the construction industry. Indeed, during the period of the last Labour Government, those representatives were able to see even the Prime Minister. The attitude of the Chancellor is typical of the way in which the Treasury and the Government are treating the construction industry.

Mr. Rooker

My hon. Friend is right. Indeed, the Chancellor of the Exchequer's local authorities, Blaby and Harborough district councils, have between them 1,843 homes in the private sector either unfit or lacking basic amenities, compared with 22 in the public sector. No wonder Blaby district council says that it does not require major urgent capital allocation, with the possible exception of house improvement in the private sector. Harborough district council says that because of the unlimited spend provision available in the last couple of years, it has increased the proportion of the housing capital programme over the past three years… on improvements … from 12 per cent … to 40 per cent. It adds: It has been recognised that the stop-start policy of the last three years has caused unfairness to applicants, has wasted administrative work and has created public confusion regarding the grants available. In that authority, between 1978 and 1984, there was an increase of 79 per cent. in the number of applications for homes for elderly people. That has happened in the Chancellor's own backyard.

Dover district council, the local authority of the Chief Secretary to the Treasury, has 1,984 private sector homes either unfit or fit but lacking basic amenities — I have never understood how a home with an outside toilet or without hot and cold running water could be classed as fit — compared with 40 in the public sector. The district council says: The housing shortage continues … The unprecedented number of grant enquiries and applications during 1983–84 caused considerable administrative and staffing problems … However, the commitment, both legal and moral, that had been entered into before the restrictions were imposed and the 90 per cent. grant level reverted to 75 per cent., will still result in a high level of expenditure during 1984–85 and, to a lesser extent, in 1985–86. The frequent policy changes over the last few years have made the efficient operation of the grant scheme very difficult and has not contributed to value for money. The local authority of the Chief Secretary to the Treasury depends on capital receipts for one third of the resources necessary to meet its programme.

The constituency of the Financial Secretary to the Treasury is in Croydon. Of course, the constituency of Mr. Speaker is also in Croydon, but I would not dream of associating him with current Treasury policy. In Croydon, 5,350 homes in the private sector are unfit or lack basic amenities, compared with 610 in the public sector. In the local authority of the Financial Secretary to the Treasury on census night there were over 2,000 homes with no inside toilet. The council says that it makes major use of capital receipts to supplement its housing investment programme allocation. In regard to the switch of funds to cover renovation grants it says: The number of applications received substantially exceeded all expectations and in the financial year 1983–84 some 4,333 grants were approved — over five times the number in the previous year. The financial consequences of that very large moral commitment to make grants has had a major impact on the council's ability to pursue its longer-term housing strategy and, in the absence of additional resources for 1985–86, will continue to prejudice the council's housing priorities. These are all Tory authorities which are talking about a moral commitment on improvement grants.

The Economic Secretary to the Treasury has a rather more leafy constituency, in the north Hertfordshire district council area, but it is not immune. In the private sector there are 840 homes unfit or lacking basic amenities, compared with 30 in the public sector. The council is dependent on capital receipts for 50 per cent. of its small programme. It says that it has to make use of available housing capital receipts to maintain its capital programme at a realistic level.

I shall not spend too much time on the Minister of State, Treasury, because he is unique in having a Labour-controlled local authority in the London borough of Hounslow. The view of that authority would not reinforce the case I am making about what Treasury authorities are saying. In Hounslow, 7,056 homes in the private sector are unfit or lack basic amenities compared with 2,236 in the public sector. The council relies on capital receipts for 50 per cent. of its housing investment programme.

The Secretary of State for the Environment represents part of the London borough of Redbridge. By now he must be sick of having the activities of his council quoted to him. In that local authority area, 4,529 homes in the private sector are unfit or lack basic amenities, compared with 398 in the public sector. His authority is also unique in that it has England's highest proportion of prefabricated concrete houses in the private sector, so it is under severe pressure to try to put into operation the legislation on housing defects.

I rest my case by quoting Councillor Salter, the Tory, leader of the council; in the Ilford Recorder on 31 January he was quoted as saying: We may find it difficult to carry out our legal duties simply because we are being prevented from spending our own money. The Government have ignored the effect their instructions will have on the most vulnerable sections of the community. For example, by reducing the amount of money for improvement grants, handicapped people will suffer. Many young people will have to put off buying their first home because we will be unable to provide them with a mortgage. I have no hesitation in laying the blame for the savage cuts, and their consequences, fairly and squarely at the door of the Government who have ordered them. In regard to the Government cut in money for housing, that newspaper article says: It will hit the weakest sector of the Redbridge community … the old, the handicapped, the poor and the young. These are the constituents of the Secretary of State for the Environment.

I cannot rest my case without referring to Eastbourne. That authority is not Tory-controlled, nor is it Labour-controlled. The Liberals have control of Eastbourne In Eastbourne, there are 2,403 homes in the private sector that are unfit or lack basic amenities, compared with only two in the public sector. The mix of people and properties has become so bad in Eastbourne— I shall not say that this has happened under Liberal control — that the council says that it could be argued that building houses for families with children is building for a special need. That is because the mismatch of people to properties, including family-sized properties, is so bad. It is reported that the council is due to abandon schemes—I have only a press report on this — for low-cost home ownership because of the proposed changes to the capital receipt rules. That is the state of affairs in the backyard of the Minister for Housing and Construction.

The Under-Secretary of State for the Environment, the hon. Member for Ealing, Acton (Sir G. Young), cannot escape either. The London borough of Ealing has 11,325 private sector homes that are unfit or lacking basic amenities, compared with 1,150 in the public sector.

I intended to refer to the London borough of Barnet, which is the authority in the Prime Minister's constituency. The information that I have quoted has come from the Library. I discovered by accident that it is the only place in the country, save for Marsham street, where all local authority investment strategy reports are lodged. The local authorities cannot read one another's reports, but they are all public documents and we can go through them. When I began to try to discover the number of unfit houses in Barnet, I found that all the boxes which should have contained figures had crosses in them instead. This is the Prime Minister's local authority, and surely this is taking flunkeyism rather too far. If those responsible thought that they were filling in a ballot paper, they were sadly mistaken. The House is entitled to know the number of unfit dwellings in Barnet. I hope that the state of affairs to which I have referred will be rectified speedily.

It is clear from the statement made by the London borough of Barnet that it is dependent on capital receipts for no less than 50 per cent. of its spending on its housing programme, including improvement grants and new build. The borough refers to the extensive use of capital receipts to augment a HIP allocation". It spent £12.5 million and its investment allocation from the Government was only £6.5 million, which was about 50 per cent. of the total spend. It then refers to improvement grants and states: it will be several years before the current 'would-be' applicants will receive grants, and many of them will be disappointed not to receive their grants sooner. Criticism has already been made of the delays and the failure to meet these raised expectations. I wonder whether that has been brought home to the local Member or to the other Members in the area. I do not know how the criticism has been expressed.

I appreciate that this is a short debate and that it would be an abuse of my privilege in opening it for the Opposition to speak for too long. I have presented a thumbnail sketch of the constituencies and local authorities of the decision makers who propose to bring the order to reduce capital receipts before the House. I have referred to the constituencies and local authorities of Treasury Ministers and Ministers of the Department of the Environment who are concerned with housing. I have set out the state of their own backyards. There is massive unmet need for improvement in the private sector. They are ignoring that need and consequently failing to meet it by proposing to impose further cuts in capital receipts.

Mr. Simon Hughes (Bermondsey and Southwark)

Does the hon. Gentleman accept that what he says does not even include the enormous demand in each of the boroughs and districts that he has mentioned from people who wish to move there but who are told that there is no chance at all because the lists are blocked and the opportunities are blocked? The local councils do not have the money to create or rehabilitate any more homes for the people who would like to go to those areas but cannot do so because of the same policies?

Mr. Rooker

Yes. I have read the documents of local authorities that come within the constituencies of the members of the Government who will be responsible for reducing capital receipts. They make fascinating reading; I suggest that right hon. and hon. Members trawl through them.

Birmingham is the largest housing authority in England and the House will know that I have the honour to represent part of the city. There are 36,190 private homes in Birmingham that are unfit or lacking in basic amenities. There are 25,670 public sector homes in the same category. As a result of the cuts in the use of capital receipts, Birmingham will lose £40 million in 1985–86. I and my right hon. and hon. Friends who represent the city in this place have been told by Birmingham's treasurer that this will mean no new building for the elderly and the disabled. It will prevent structural repairs from being undertaken to dangerous high-rise blocks. It will mean that there will be no funds for improvement grants, including those which are a priority for the disabled and the chronically sick. There will be no capital work within the education service and no action will be taken to replace toilet blocks that are still in school yards. Essential fire precaution work in homes for the elderly will be dropped. The clearance and recycling of derelict sites will stop as well. Those six consequences will be the direct result of the loss to Birmingham of £40 million.

In fact, the list is endless. The voluntary sector throughout the country will be stopped from doing its work. Slum clearance programmes will stop and build-for-sale will be stopped. The Institute of Housing undertook a survey of a list of local authorities and the various statements that have been made following the statement make illuminating reading. I hope that one of my hon. Friends will be able to refer to them in detail, because they represent a catalogue of disaster. This is the result of stopping local authorities spending their own money.

Mr. John Powley (Norwich, South)

The hon. Gentleman has catalogued his views. Does he accept that cuts or reductions in local authority capital expenditure are nothing new and have taken place under Conservative and Labour Governments in recent years? Does he recall the words of the Labour Chancellor of the Exchequer on 22 July 1976, the right hon. Member for Leeds, East (Mr. Healey), when he referred to reductions in public expenditure? Talking about housing, he said: It is therefore necessary to reintroduce control over this programme and to limit the rate of approvals so that overspending is avoided."—[Official Report, 22 July 1976; Vol. 915, c. 2015.] Did the hon. Gentleman make the same remarks then that he is making now?

Mr. Rooker

The answer to the last part of the hon. Gentleman's question is yes. I presume that the hon. Gentleman is not one of the 74 Conservative Members who have signed the motion to which I referred about a quarter of an hour or 20 minutes ago.

Mr. Jack Straw (Blackburn)

He is one of the 74.

Mr. Rooker

He cannot be. If he is, I presume that he will seek to intervene in my speech to clarify the position. He has not done so, so it is clear that he is not one of the 74.

Mr. Powley

rose—

Mr. Rooker

I shall give way to the hon. Gentleman later.

Since 1979, there has been a 69 per cent. cut in housing provision. I have detailed the position in 1984–85 coming on to 1985–86 for Tory authorities and Birmingham. I have explained that on average we are building 100,000 homes fewer each year than the number built under the previous Labour Government, notwithstanding the cuts to which the hon. Member for Norwich, South (Mr. Powley) has referred. We are clearing slums at only a third of the rate which was achieved under the last Labour Government. We are building up a massive crisis for the future. Does the hon. Gentleman still want to intervene? It appears that he does not.

Mr. D. N. Campbell-Savours (Workington)

Does my hon. Friend recall that when my right hon. Friend the Member for Brent, East (Mr. Freeson) was the Minister for Housing and Construcion he was always pressing local authorities to spend more? His complaint was that they were not spending the moneys that were being made available to them. It cannot be said that during that period the Labour Administration did not fulfil all their undertakings to the electorate on housing finance support.

Mr. Rooker

My hon. Friend is right. The situation has changed, because since 1980 there has been a new form of funding. The Prime Minister told us, as I said earlier, that we should use the money from capital receipts—she called it the profits — to re-invest. She spoke of re-investing in special housing units for the elderly. As I have explained, even that programme under this Government has been cut by half since 1980. The hon. Member for Norwich, South cannot have it both ways. He cannot keep harping back to the previous Labour Government when the record since 1980 is getting worse.

The Government have admitted that they do not know how the capital receipts have been used. That fact has been given in an answer to a parliamentary question. I cite the one on 9 November at column 23 in Hansard. The Government further admit that they have no information on the level of unspent receipts. I cite column 504 of 28 November 1984. They do not know how the capital receipts are being used or the level of the unspent receipts. What do they know that causes them to bring forward these further cuts? We have the Prime Minister's pledge which she gave in the House to abolish the slums and to use the profits from sales for building. The Government know that, due to their low building programme overall — I am not arguing about tenure — low clearance rates and the now declining improvement programme, the nation has a crisis on its hands. We can make a start today to stop that.

4.11 pm

The Minister for Housing and Construction (Mr. Ian Gow)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: notes the existence of local authority accumulated reserves of capital receipts of about £5 billion and the Secretary of State for the Environment's acceptance that these reserves belong to the local authorities; further notes that housing and infrastructure needs are reflected in the gross provision of over £4 billion for local authority capital spending in 1985–86; and welcomes the Government's determination to keep next year's local authority capital expenditure within the total provided in the Autumn Statement and approved by this House on 6th December 1984. Essentially this debate is about housing and jobs but it is also about public expenditure and the Government' s determination to keep spending next year within the limits provided for in the autumn statement and approved by the House on 6 December. In that statement, the Government provided for gross capital spending by local authorities in England of just over £4 billion.

The Government's policies on local authority capital expenditure strike a necessary balance between the needs of local authorities and what the nation can afford. Those policies are part of a wider strategy to reduce inflation and to sustain economic growth. The hon. Member for Blackburn (Mr. Straw) laughs about sustaining economic growth and keeping down inflation but an inflation rate of 5 per cent. is the lowest we have had for 16 years and we now have the fourth year of economic growth at 3 per cent. It is the longest period of sustained recovery since the war. The numbers in work increased by 342,000 in the year ending September 1984, and last year total public and private capital investment is estimated at £55 billion—an all-time record — and that record is likely to be exceeded this year.

Mr. Straw

With that catalogue of economic success, which only the Minister and his friends in the Cabinet recognise but which is completely unrecognisable by the rest of the country, will the Minister say why Britain's unemployment record is now the worst of all the major industrialised countries when in 1979 it was at average? The Government's real international record is that they have raised unemployment to record levels this century.

Mr. Gow

The hon. Gentleman's facts are wrong. He knows that over the past year the rate of increase in unemployment in most EEC countries has been higher than that in the United Kingdom.

An essential part of our strategy is to achieve low inflation and the basis of economic growth is to control the level of public expenditure and borrowing, including that of local authorities. For a time, at any rate, those were the policies of the Labour party. It is true that the hon. Member for Birmingham, Perry Barr (Mr. Rooker) was never a member of the Administration in which his right hon. Friend the Member for Leeds, East (Mr. Healey) served as Chancellor, but it was the then Chancellor who wrote to the managing director of the International Monetary Fund in these terms — [Interruption.] Hon. Gentlemen do not like this, but they will be reminded of it. On 15 December 1976, the then Chancellor writing on the subject of today's debate—I am entitled to quote it—said: The Government's intention in the years ahead is to reduce the share of resources taken by public expenditure. It is also part of this strategy to reduce the public sector borrowing requirement so as to establish monetary conditions which will help the growth of output and the control of inflation.

Mr. David Winnick (Walsall, North)

Despite the letter that the Minister has just quoted, not once during the Labour Government's period of office did the number of new public sector starts fall below 100,000. As a result of the cuts that will take place in the next financial year, the number of starts will be about 20,000. Will the Minister bear in mind that the Rosehill estate in my constituency desperately needs to be modernised? It was stated that modernisation work would start in 1985–86. I have been informed by the council that as a result of the Secretary of State's statement no work will start until the next financial year and that even then it is likely that only a few dwellings will be modernised in 1986–87. Does the Minister recognise that as a result of these policies thousands of my constituents and hundreds of thousands of other people elsewhere will be denied necessary improvements to their council dwellings, and that hardly any new dwellings will be built?

Mr. Gow

It was a mistake for me to give way to the hon. Gentleman but I nevertheless remind him that there were 198,000 completions in 1984 and that the 150,000 private sector completions last year was the highest figure for eight years.

I should like to explain to the House why it was necessary for my right hon. Friend the Secretary of State to announce on 18 December that the prescribed proportion of housing receipts would be reduced for the coming financial year from 40 to 20 per cent. As the House will be aware—this has been the practice since 1981—a cash limit is set each year for local authority capital spending. It is true that there was an underspend on capital account in 1981–82 and 1982–83 but that underspend of £633 million in the first year and £870 million in the second was more than offset by a massive overspend on current account.

In 1983–84, the local authority cash limit was exceeded by £368 million. My right hon. Friend has explained that there is certain to be another overspend this year. It could be as high as £650 million. If no corrective action were taken, there would be an even larger overspend next year — possibly by as much as £1 billion. Faced with the known overspend last year, the substantially larger overspend this year, and the certainty of an even greater overspend next year, no responsible Government, having set a cash limit, could fail to take steps to secure compliance with their policy.

When the Local Government, Planning and Land Act 1980 came into force on 1 April 1981, it was always envisaged that the prescribed proportion arising from the sale of council houses might need to be reduced to control the rate of spending of the massive receipts generated by a policy that was becoming increasingly popular. Indeed, the 1980 Act provided specifically for the prescribed proportion to be reduced. That was precisely the step that we took with effect from 1 April last year, when the prescribed proportion for council house sales was reduced from 50 to 40 per cent.

Mr. John Heddle (Mid-Staffordshire)

If my hon. Friend fears the possibility of an overspend of £1,000 million in 1985–86, what assurance can he give the House, if it subsequently approves the order, that the prescribed proportion will not be reduced next year from 20 to, say, 10 per cent.?

Mr. Gow

As my hon. Friend knows, the prescribed proportion is reviewed each year in the autumn. I have just been explaining to the House that, with effect from 1 April last year, we reduced the prescribed proportion from 50 to 40 per cent., and the proposals that will be laid before the House in the form of an order next week will deal with the prescribed proportion for the coming financial year. As I have already said to the House, we shall, of course, keep the prescribed proportion under review.

There is one other point that I wish to make to my hon. Friend. Both I and my right hon. Friend have said from the Dispatch Box that the present system of controlling local authority capital expenditure is the reverse of perfect. We are seeking better ways of controlling local authority capital spending. For that purpose my right hon. Friend the Secretary of State, the Treasury and the local authority associations are currently engaged in discussions. I can tell my hon. Friend that I hope and believe that we will be able to find a more satisfactory way.

Mr. Allan Roberts

rose—

Mr. Gow

We have been asked to make short speeches, and I understand that the debate must finish at seven o'clock. If I catch your eye, Mr. Deputy Speaker, I hope to speak later in the debate and I will then have an opportunity to reply to the points that are raised. I ought to get on because some of my right hon. and hon. Friends wish to take part in the debate.

At the start of the next financial year, accumulated receipts are expected to amount to some £5 billion. This reflects the outstanding success of our right-to-buy policy, a policy to which the hon. Member for Perry Barr and Deng Xiaoping have become notable and welcome converts. I recognise that the whole of the Labour party does not share the view of the hon. Member for Perry Barr.

I remind the House that the following sentence appeared in the manifesto upon which the Labour party fought, and lost, the last election. Some Labour Members still believe in the policy. The manifesto said: Labour will end enforced council house sales, empower public landlords to re-purchase homes sold under the Tories on first resale and provide that future agreed sales will be at market value. Let me say what that means in plain English. I am talking about the sale of council houses, which happens to be the subject of today's discussion.

Mr. Allan Roberts

Will the Minister give way?

Mr. Gow

I have told the hon. Gentleman that I will not give way.

Mr. Roberts

Frightened?

Mr. Gow

Frightened of the hon. Gentleman? Of course I am not.

Mr. Roberts

Then give way.

Mr. Gow

The reason that I am not giving way is that some of my right hon. and hon. Friends, who are present in much greater strength than Labour Members, want to make a contribution to the debate.

Put in plain English, the policy of the Labour party means that Labour would end the right to buy, re-municipalise if the present owner wishes to sell and scrap the general consents available to local authorities to sell at a discount even though throughout the period of the last Labour Government local authorities were allowed to sell to sitting tenants with a discount of 30 per cent.

I shall give way to the hon. Member for Perry Barr so that he may clarify the policy of his party about the sale of council houses.

Mr. Roberts

Will the hon. Gentleman give way?

Mr. Gow

No.

Our proposal to reduce the prescribed proportion from 40 to 20 per cent. does not mean that local authorities are being deprived of their capital receipts. On the contrary, they will retain those receipts. We are controlling, as we always have done, the rate at which those receipts may be spent.

Next year's housing investment programme allocations amount to £1.6 billion. To that figure local authorities will be able to add 20 per cent. of accumulated housing receipts and 30 per cent. of other receipts. In addition, of course, local authorities will be able to use 20 per cent. of housing receipts arising in 1985–86 and 30 per cent. of non-housing receipts.

Wider opportunity for home ownership is one of the key elements of our housing strategy. Since my right hon. Friend the Prime Minister arrived in Downing street, more than 800,000 local authority, new town and housing association homes have been sold, almost all to sitting tenants, and some 70,000 homes have been sold under low-cost home ownership schemes, including building and improving for sale, homesteading, shared ownership and building under licence. Those were matters to which the hon. Member for Perry Barr referred in his speech.

Mr. Allan Roberts

Will the Minister give way?

Mr. Gow

I have already said that I will not give way to the hon. Gentleman. When we say something on this side of the House, we mean it.

Over and above those 70,000 homes, 5,000 acres of land have been sold by local authorities and new towns—sufficient land for about 45,000 homes. The House will agree that that is a massive achievement.

Following my right hon. Friend's statement on 18 December 1984, many local authorities have expressed concern that the reduction in the prescribed proportion may make it difficult to promote low-cost home ownership. Indeed, that was one of the points to which the hon. Member for Perry Barr referred in his speech. Some of my hon. Friends have also made representations about this matter. We have decided, therefore, that it is right to make a special exemption when a local authority incurs capital expenditure on a low-cost home ownership scheme and then disposes of the home or land immediately.

I am glad to be able to tell the House, and particularly those of my hon. Friends who have made representations, that the prescribed proportion will remain at 100 per cent. in the following circumstances: first, where an authority buys property for resale, for example, on shared ownership terms; secondly, when it builds for sale; and thirdly, when it arranges for a developer to build for sale under licence on land which it owns.

Mr. Rooker

It could not do anything else.

Mr. Gow

I hope that this news will be welcome to the Labour party because of its professed commitment to allowing the least well-off to get their feet on the first rung of the home ownership ladder. Despite the proposed reduction in the prescribed proportion for most sales, local authorities will still have a real incentive to generate higher capital receipts in 1985–86.

I deal next with the wider issue of housing capital expenditure and spending on repairs and maintenance.

Mr. Rooker

Given the agreement of the Treasury, how much new money might be available? Can the Minister put a figure on it? Is it possible to make an estimate?

Mr. Gow

I think that the consequence that the hon. Member for Perry Barr and certainly some of my hon. Friends feared was that, if the prescribed proportion for those categories had indeed been reduced from 100 per cent., as suggested originally by my right hon. Friend, those excellent schemes might have dried up altogether. The hon. Member for Perry Barr is confirming the fears of my hon. Friends. We have been able to respond to the perfectly legitimate anxieties that were expressed by some of my hon. Friends. The answer I have given is that there will be no cost because the schemes might have dried up. It is because we accept the validity of the arguments presented to the Government that we have decided that it would be right in these circumstances to make an exception.

Gross housing provision next year — [Interruption.] What I have said to the House is that we have revised the original proposals to make a special exemption so that 100 per cent. of the prescribed proportion will continue to apply. Gross housing provision next year is £3,051 million, compared with £3,274 million in the current year. In each of the past two years, spending by local authorities on repairs and maintenance out of current account has exceeded £1 billion. In addition to that £1 billion, local authorities have spent on capital account a further £1 billion in each of the past two years on repairs and improvements to their housing stock.

With regard to the private sector, the House will remember that in the last year in which the Labour party was in power spending on improvement grants was £90 million, compared with £900 million in the last financial year, and an estimated £750 million in the current financial year.

Most repairs and improvements in the private sector are, of course, not financed through grants at all. We estimate that in the year ended 31 March 1984, about £8 billion was spent on repair and improvement of existing houses, financed from savings or from private sector borrowing.

When we made our housing investment allocations for the coming financial year, we took account of the severe problems that some authorities have with their older estates and with their prefabricated reinforced concrete houses. For the first time we included a special factor in the generalised needs index to take particular account of that type of dwelling. We are discussing with the local authorities more effective methods of establishing the condition of their housing stock.

Mr. Campbell-Savours

Will the Minister give way?

Mr. Gow

No.

I understand that the reduction in the prescribed proportion is a tough measure, but I say to the House—and to my hon. Friends in particular — that keeping public spending within the limits decided by the Government and approved by this House is a tough business. Other Governments, including a Labour one, have set out on the road that they knew was necessary if we were to restore honest money and sound finance. What marks out this Government from their predecessors is that where they lost their nerve we shall keep ours, and where others failed we have the determination to succeed.

4.33 pm

Miss Betty Boothroyd (West Bromwich, West)

By its very nature, the debate, as it progresses, will no doubt develop a local flavour. I intend to put into that flavour and place on record the situation that is experienced by my local authority and by very many families who live within that area.

I do not want to go into detailed figures, but I must place on record that in the year 1985–86 my local authority, Sandwell, was planning on using about £10.5 million from council house sales to supplement the housing investment programme. But by his sweeping statement the Secretary of State is now withholding about £4 million of the council's own money which had previously been planned for housing purposes and to help those in need of a home.

My council is not in the habit of sending resolutions to Ministers, but it was driven to respond to the Secretary of State's December announcement with an emergency resolution, couched in the strongest possible terms, protesting at the effect it will have on Sandwell's housing programme. I support that protest.

The Minister, in opening his speech today, was right about one thing. He said that the debate was about public expenditure. It is. This latest savage exercise in voodoo economics is dictated by inflexible Treasury cash limits which have been drawn up with obsessive concern for the amount involved rather than for the quality of its use or the public need—and need there certainly is in many urban areas such as my own.

The housing authority in Sandwell has 6,000 families on the waiting list for council accommodation. In addition, an average of 130 new cases of homelessness per month are reported. Yet for the first time in our history in Black Country towns we are unable to make any new starts on house building. I thought that the Minister was about to leave. I hope that he will not leave until I am able to make this point to him.

A couple of weeks ago, when I asked the Minister what words of comfort he had for the people on waiting lists, he said that council properties which had remained empty for 12 months or more should be let. There are 76 properties in that category where structural work is now taking place. Perhaps the Minister can advise us how to fit 6,000 families into 76 houses. If the Minister will remain a little longer, I will tell him that, because of his Government's restrictions, Sandwell has not been able to continue to build sheltered housing for the elderly. That has affected the movement of families from the housing list who could have moved into properties vacated by elderly tenants.

In the private sector, we have 21,000 houses in urgent need of repair. About a third of them are unfit and need to be demolished. Yet Sandwell is not allowed the resources to declare any new housing action areas. Instead, there is cancellation or postponement of plans, many of which have been promised to tenants and are in current programmes. We are lagging far behind any reasonable assessment of need.

Total expenditure on housing for my borough has now been cut back to £17 million for 1985–86. We have actually moved backwards. £17 million was the housing budget in 1979, when the Government came to power with the manifesto boast of "Helping the Family". Not many families in my area have had housing help since the Government came into office.

Today my local authority needs £38 million to carry out its housing investment programme, but we are permitted to spend only half of what is required. In spite of inflation, in spite of natural growth, and in spite of increased demand and need, the clock has been put back six years for the people of Sandwell. We are now back to the level of 1979 when the Government came into office.

The draconian cuts under which people are having to suffer fly in the face of the words of a Government who came to office with the proclaimed falsehood of making us a better housed nation. That just was not true.

The Minister will have received representations from the leader of Sandwell council in the past few days about the costly legacy that is of additional and urgent concern to us. I refer to the findings of a survey carried out in Wednesbury, in my constituency, showing that 350 houses are at risk from the collapse of old limestone workings some 500 ft below ground.

I am sure that the Minister will join me in expressing sympathy for the families concerned, who are naturally upset and very worried about their plight. Their personal safety is not in danger, but there is understandable anxiety about the situation in which they find themselves, living as they do above mines long ago abandoned and now collapsing. I am seeking the Minister's assurance today that he will not ignore the plight of those families and that he will regard the circumstances in that area as exceptional, and be generous in his approach to it. I have no estimates of the work required for housing needs there, but, of 350 houses, about one third are owner-occupied and awards for blight or any other compensation must come by way of special grant from the Minister's Department. I hope that the Minister agrees and will say so today.

For families in council accommodation, expenditure on housing or rehousing must also be met by grant aid. Having savaged housing expenditure and imposed stringent borrowing controls on the local authority, to the extent of reducing spending on housing and taking it back to the levels of 1979, the Minister cannot ignore the plight of families living above Cow Pasture mine, in Wednesbury. Sandwell's limited resources cannot possibly be stretched to deal with the emergency. I hope that the Minister will give some guarantees and assure the council and local residents that the finance will be forthcoming.

4.41 pm

Mr. John Heddle (Mid-Staffordshire)

I am sure every hon. Member will agree that 90 per cent. of the constituency cases that are brought to our advisory bureaux or which come in our post concern housing and the plight of the homeless. Is it not therefore extraordinary that, at this relatively early hour in the parliamentary day, there are present only four hon. Members from the official Opposition, just one Social Democratic Member and no Liberal Members?

Mr. Peter Pike (Burnley)

The hon. Gentleman cannot count.

Mr. Heddle

I am, of course, excluding the Front Benches.

I declare an interest as a vice-president of the Building Societies Association. It is not a pecuniary interest, but an honorary one, but one that I feel I ought to declare in view of what I have to say. I applaud the sentiments that my hon. Friend the Minister for Housing expressed, and I applaud also the Government's dedication to restricting the country's overdraft — the public sector borrowing requirement. High borrowing means higher inflation, which means high interest rates, which means more distress for industry and commerce and every borrower, including home owners.

I must confess that I find an element of contradiction — although I am not an economist, far less an accountant—in the Government amendment. However, I am prepared to listen to both sides of the argument and not to be strangled by the collar of mongrel political dogma. There is an answer to the problem. Local government finance is beset with a myriad of contradictions and mysteries resulting from what I understand is called annuality, which means that in any 12 months a sum of money still in the council's bank account must be spent before the end of that year, otherwise the council will not get more in the next year. That is not how industry and commerce runs its affairs, or how right hon. and hon. Members run their domestic affairs. That is why I applaud the statement that my right hon. Friend the Secretary of State made in October at Brighton, when he said that he was prepared to examine local government finance, not simply the rating system. If we can find a solution to that problem, those which we are debating today will not arise.

I am definitely a "don't know" and shall listen carefully to both sides of the argument and cast my vote accordingly. However, I shall not cast my vote with the Opposition, because nothing that they have said has a vestige of originality. They say that we should spend more on home improvements and build more council houses, not overnight, but in the lifetime of a Parliament or two. They believe that that will resolve the crisis, but it is nonsense. Building more council houses has not reduced waiting lists. The nation's housing crisis will be resolved only if greater use is made of our existing housing stock and if more local authorities take the trouble to examine the tenants' charter enshrined in the Housing Act 1980.

If more single people on council house waiting lists took the trouble to find the many elderly people who live in three-bedroomed council houses and who would dearly love the company and rent of such people, and if local authorities took the trouble to spell out the rights which the Government have given to every tenant, there would not be such a housing crisis.

I am not attracted by the crocodile tears of Opposition Members who talk of the reduction in money spent on home improvements in the past two Parliaments. Six short years ago, £90 million was spent on home improvement grants. How much was contributed by the ratepayer and the taxpayer in the last financial year? Twice as much? Five times as much? The answer is 10 times as much—£900 million — and yet Opposition Members bleat that not enough is being spent. Of course, enough can never be spent on the nation's housing stock. It is our heritage. Nevertheless, we must find a means of investing the money which ratepayers and taxpayers provide to the maximum public effect.

Mr. Pike

The announcement of £900 million for improvement grants was made shortly before the 1983 general election. Does the hon. Gentleman agree that the bonanza and blank cheque approach was an attempt to persuade people to vote Conservative at that general election?

Mr. Heddle

I am tempted not to reply to that rather banal intervention, but I should like to remind the hon. Gentleman, who obviously has the statistics at his fingertips, that, two years after that historic general election victory, £700 million is to be spent on home improvements this year.

My hon. Friend the Minister for Housing reminded us that there was an overspend of £368 million in 1983–84 and a £650 million overspend in 1984–85. Unless steps are taken under the order that we are to debate on another occasion, there is a possibility of the overspend being as much as £1 billion. I appreciate the answer that my hon. Friend the Minister gave to my intervention, and I shall take it into account when considering which way to vote. It is nonsense to hear that councils are overspending to the tune of £650 million and for them at the same time to be pleading poverty. It is also nonsense that there is a possibility of an overspend of £1 billion next year when there is no money to satisfy improvement grant applications this year, and when applicants might have to wait three years before their applications are considered.

It is nonsense, in the overall context, that £5,000 million of capital receipts are owned by local authorities, are invested by local authorities and are not being properly used by local authorities. Therefore, I understand the point made by my hon. Friend the Minister that there has to be an argument for restraining the amount that local authorities can spend in any one year. I can see the Logic of restricting capital receipts from 40 to 20 per cent. The other side of the argument is that all our constituents want to own their own homes and to borrow or obtain grants from the local authority, but, because of the way that local authorities' finances are ordered, they are not able to do so.

I put to the House what I believe is a practical and sensible solution to this problem. In addition to that £5,000 million, some £4,000 million is locked up in mortgages granted by local authorities to former tenants of theirs who have bought their houses either voluntarily or under the right-to-buy procedure. Some £2,300 million of that £4 billion was granted by way of mortgages for 15, 20 or 2.5 years to former tenants who have now exercised their right to buy. I do not believe that local authorities are in the building society business. It is not their duty, as guardians of the ratepayers' money and stewards of the rate support grant system, to lock the taxpayers' and ratepayers' money up for such a long time. If they are to sell their assets, they have a duty to use those assets to the maximum benefit of the community which they are elected to serve. If they sell council houses, it is their duty to reinvest the proceeds of that sale in providing more and better housing for more people by conversion, improvement for sale, low-cost home ownership or home improvement.

Therefore, I submit to my hon. Friend the Minister that the solution to this accounting problem is to impose a duty on all local authorities to sell their mortgage books to building societies, thus releasing money which would otherwise be locked up for almost a generation, and enabling it to be used by them to the advantage of the present generation. The benefit to the local authority would be an immediate cash receipt—whether 100 per cent., 50 per cent. or whatever may be the subject of the basis of negotiation between my right hon. Friend the Secretary of State and the local authority associations.

The benefit to the borrowers will be rather more considerable. They will have the benefit of the flexibility that a building society mortgage provides, and that will enable them to obtain a further mortgage when they sell the house and trade-up to buy another one. It would also mean that, in certain circumstances, they would be able to borrow from a building society at a lower rate of interest. At a time of temporary, I hope, but uncomfortably high rates of interest, they might receive a much more sympathetic and compassionate hearing from the local building society manager over their temporary cash flow problems than they would from a bureaucratic and possibly anonymous local authority.

The critics of my scheme, like my right hon. Friend the Chancellor of the Exchequer, tell me that it would have a distorting effect on the money supply or the PSBR. I tabled a question to my right hon. Friend the Chancellor of the Exchequer on this point. I asked: what the effect would be on (a) the money supply and (b) the public sector borrowing requirement if the funds currently lent on first mortgages by local authorities were transferred with the borrowers' consent to building societies or other approved financial institutions in the following sums in each respect (i) £1 billion, (ii) £2 billion, (iii) £3 billion and (iv) £4 billion". He replied: Providing other expenditure does not increase, then transferring local authority mortgages to the building societies or other approved financial institutions would reduce the public sector's borrowing requirement. The effect on the money supply would depend on the response of those who took on the mortgages, but it is likely that monetary conditions in the economy would be very little changed. If public expenditure did increase in line with the transfer of mortgages, then the PSBR would revert to its original level, but because monetary conditions had been largely unaffected by the initial fall in the PSBR this increase would imply some loosening of financial conditions, and would thus be inflationary unless offset by higher interest rates."—[Official Report, 19 February 1985; Vol. 73, c. 433–34.] The sting is in the tail of my right hon. Friend's answer. As I have already said, I am neither an economist nor an accountant, and therefore I am stung by the more practical, commonsense and commercial approach that lies between the lines of my right hon. Friend's answer to my rather simple and basic question.

The political reality is that the purchase of one's home is the largest, most significant and important step that each and every one of our constituents can take in his lifetime. It is a decision into which none of them enters lightly or wantonly, but it is a decision which, once entered into, brings to all our people private ownership, independence, stature and a feeling of independence in the community. Some 800,000 have taken that step, and many more could and would, but, sadly, there are some local authorities which are not entirely in tune with the aims, aspirations and ambitions of our constituents. They are politically motivated and will wish to frustrate those aims and ambitions, and now will use the excuse of being able to reinvest only 20 per cent. of capital receipts in any one year from so doing.

If the motion were carried tonight, the political reality would be that the number of council house sales would fall and a number of people who elected us in 1979 and 1983 on the promise of extending home ownership could be frustrated by forces over which the House has no direct control. The motion, if carried, would, I fear, provide those local authorities with a cast-iron excuse to procrastinate and frustrate the freedom of those council tenants, and would perpetuate divisions in every town and city.

4.57 pm

Mr. John Cartwright (Woolwich)

I am sure that the House will watch with interest to see how the hon. Member for Mid-Staffordshire (Mr. Heddle) resolves his internal conflict. As he has ruled out the prospect of voting for the Opposition, he does not have many options left when it comes to deciding how he will cast his vote. I speak on behalf of the Liberal party and the SDP. We have no such inhibitions. We shall be voting solidly for the motion tabled by the official Opposition because we are concerned about the impact of the Government's most recent proposed cut in local authority capital spending.

First, this will have an impact on the construction industry. On that point, I quote the Building Employers Confederation, an organisation whose members have long been noted for their loyalty to the Tory party. It says that what the Government are proposing could mean a 28 per cent. cut in the local authority capital spending in England in 1985–86. It is in no doubt what that would mean. It says: Such a massive reduction in workload would cause grave problems for the construction industry and could lead to the loss of more than 150,000 jobs. Such an impact would come on top of the already far from buoyant state of the construction industry.

The current state-of-trade inquiry by the Building Employers Confederation suggests that the outlook for the building industry is "bleak". Building industry output is expected to fall this year, reversing the modest recovery of the past two years. The inquiry, which was undertaken among 500 Building Employers Confederation members of all types and sizes throughout Britain, showed that barely one quarter of those questioned were working at full or almost full capacity. Some 41 per cent. of those questioned expected their work load to fall in 1985, and only 23 per cent. expected an increase. The same dismal prospect is offered by the Federation of Master Builders. It reports: that only 26 per cent. of companies in its sample are now working at full capacity, and puts the blame firmly upon the combined effects of government restraint on public expenditure and the imposition of VAT on alterations". Therefore, the Government's proposals for further cuts in capital spending by local authorities are not good news for the construction industry.

Then there is the impact that this will have upon local authorities. We are discussing yet another stage in the stop-go process of local authority capital programmes. The one thing that local authorities can be certain of is complete uncertainty. They were lectured by Ministers about underspending. Indeed, they were lectured by the Prime Minister herself before the general election when the Government were anxious to engineer some signs of activity. Now that local authorities have geared themselves up in order to respond to that challenge they are threatened with penalties for alleged overspending.

Ministers have encouraged local authorities to sell homes and land in order to build up their capital assets. As recently as 18 July 1984 when the Secretary of State for the Environment announced some degree of restraint upon local authority capital expenditure, he was still encouraging local authorities to build up their capital assets. He said: This arrangement leaves every authority with the incentive to continue to make sales and so to add to the prescribed proportion of receipts which they will be free to spend. He continued: In this way, they can spend without adding to net public expenditure."— [Official Report, 18 July 1984; Vol. 64, c. 331.] I suggest that that is a very different picture from the one that is being presented to the House today by the Minister. We ought to be very concerned about the impact of these cuts upon ordinary people.

I take first the council tenants. Many hon. Members understand the problems facing many large council estates, particularly those whose construction involved various forms of system building in the 1960s and the 1970s. It is wrong for Ministers to blame local authorities for the problems created by system building. Governments of all parties put pressure upon local authorities to adopt system building, saying that it would be cheaper and faster. It turned out to be neither and resulted in a product that has become unacceptable to the many tenants who are forced to live in that kind of housing.

I shall give one example from my own constituency, but I have no doubt that it is typical of the experience of many other hon. Members. The Morris Walk estate was erected in the 1960s. It was a system-built estate and received a design award, which tells us something about the attitude of architects towards system building in the 1960s. That estate is now plagued by worrying structural defects. It has major damp and condensation problems; it suffers from rotting window frames; there is an expensive and completely ineffective heating system which tempts far too many tenants to use calor gas, with all its associated risks in that kind of building. The tenants have campaigned for years for the sensible modernisation, improvement and rehabilitation of their homes. At last a start has been made on a couple of the blocks, yet the future of that rehabilitation programme is thrown into turmoil because of doubts about the continued availability of finance, even though the local authorities concerned have the required resources.

A number of estates in my constituency do not face such serious difficulties but need major rehabilitation work. Other estates do not need major improvement or repair, but their comparatively simple problems could be solved by, for example, the provision of entryphones to keep out the vandals and prevent the nuisances which plague so many council estates. Even that kind of modest programme is now thrown into uncertainty because of doubts about the availability of finance. Tenants find it very hard to understand why they should be required to go on living in what they, with great justification, regard as substandard conditions when the local authorities have the cash available to tackle the problem. I listened with great care to the Minister's explanation, but if he were to come with me to the Moms Walk estate and offer his explanation to my constituents he would get a very short, sharp and colourful response. I challenge him to try to explain to ordinary people the impact of the policies that he is advocating.

I turn to the impact of these cuts upon owner-occupiers, in particular the impact upon those owner-occupiers who were encouraged to buy old properties on the basis that repair, improvement and maintenance grants would be fairly readily available. I pay tribute to the way in which the Government boosted that programme before the general election in 1983. There was a very effective increase in the take-up of repair and improvement grants. In 1983 there was a 121 per cent. increase in the take-up, with 230,000 grants being made. However, as was pointed out in an earlier intervention, that took place before the general election of 1983. The picture now is very different. There are cash constraints. Repair grants are rationed in many local authorities. Many of those who are in the queue for repair grants have absolutely no chance of getting them because of the constraints upon the available resources. The National Home Improvement Council referred to this problem. It said: Financial constraints are also likely to force authorities to reduce the resources allocated to grant aid in the current financial year. It continued: The prospects for subsequent years are no more encouraging, so that it is anticipated that the peak of activity generated by the boost to grants is now past. That was said before the cuts which we are now debating. Therefore, the prospects for many owner-occupiers who believed that they would receive repair grants are not very good.

On the impact of the capital spending cuts upon the nation as a whole, I believe that there is general agreement that the work which will be delayed because of these capital spending cuts will have to be carried out at some time or another. I doubt whether the next generation will easily forgive us if we hand over to them an infrastructure that is shabby, seedy and down at heel. If the Minister considers that comment to be unfair or exaggerated, I suggest that he should consider the lifestyle of many of the ordinary citizens of this country. He should look at the quality of life that is inflicted upon them. He should consider the real position in many of our urban areas Let him go to the south-east London area which my hon. Friend the Member for Southwark and Bermondsey (Mr. Hughes) and I represent. Let him look at the holes in the road, the broken paving stones, the boarded-up flats, the graffiti-covered walls and the vandalised facilities. A vast amount of new building, repair work and improvement needs to be carried out in terms of both housing and the infrastructure generally.

The construction industry is ready, willing and able to carry out the task. The construction industry could call upon a vast army of unemployed building trade workers to do the work. The local authorities have the cash in the bank to pay for the work. All that stands in its way is the Government's blind adherence to an incomprehensible economic dogma. That is why we shall support the motion tonight.

5.8 pm

Mr. Michael Howard (Folkestone and Hythe)

When this matter was debated on 19 December 1984, I sought to support the Government's attitude on the basis that it was essential to keep interest rates as low as possible in order to enhance the general economic climate in which the wealth-creating private sector of our econony can operate. I believed it to be essential that interest rates should be kept as low as possible in order to create the maximum number of viable, lasting jobs in our economy, the kind of jobs which many of my right hon. and hon. Friends are accustomed to call real jobs. I am encouraged to find that the phrase "real jobs" appears in the Opposition motion. I hope that it marks an advance in their thinking and that they grasp the significance of the concept which underlies that phrase.

Since then, we have seen developments in interest rates which are not entirely helpful to the kind of developments that I am anxious to see in the furtherance of the Government's economic objectives. But that makes the need for the Government's policies more rather than less important. It reinforces the need for the kind of control which is exemplified in this policy and it makes it even more important that we do not give the impression on world markets that the Government's grip on the economy is weakening and that their strategy has lost the force which underlies the achievement of the objectives to which so many of us attach so much importance.

When we debated the matter last, the concern that was expressed by many of my right hon. and hon. Friends was based largely on the extent to which the Government's proposals were seen as interfering with the autonomy of local government. That matter was referred to by many during that debate and was touched upon by the hon. Member for Woolwich (Mr. Cartwright) a few moments ago.

The Government's proposals mark no change in principle in the relationship between central and local government. During the debate that we had in December, my right hon. and learned Friend the Member for Hexham (Mr. Rippon), who we are all sorry not to see in his place this evening, intervened to suggest that the way in which the matter was dealt with in the autumn statement would lead an interested reader of that document to suppose that the Government intended local authorities to be able to spend all the capital receipts which they received from the sale of council houses and other assets. I am sure that my right hon. and learned Friend had given the matter long and serious study before he made that intervention, but I am bound to say that his intervention smacked more of the kind of ingenious and imaginative improvisation of which the profession to which he and I belong are rightly proud than it did of long and serious study.

There has been a limit on the proportion of receipts from the sale of such assets which local authorities have been permitted to spend ever since the introduction of this system of control of local authority capital expenditure in the Local Government, Planning and Land Act 1980. This year, that prescribed proportion is 40 per cent. It is to be reduced next year and was previously 50 per cent. There has always been a limit on the proportion of receipts from sales which local authorities were able to spend.

If one goes back beyond the introduction of the Local Government, Planning and Land Act 1980, one finds that the control then exercised by Government over local authority spending and borrowing in such matters was even more restrictive. Before that Act, under the previous Labour Government, permission had to be sought project by project for such spending. It was control of a most restrictive and detailed kind and it was exercised on a detailed basis.

To those of my right hon. and hon. Friends who were tempted by the argument that the proposals represent an interference in the autonomy of local government, I would say that the introduction of the Local Government, Planning and Land Act 1980 marked a relaxation by the Government of the extent to which Government interfered in such matters; that ever since that Act has been introduced there has been contained in it a restriction on the proportion of receipts from the sale of capital assets which local authorities have been permitted to spend, and that therefore there can arise no conceivable question of principle in the Government's proposals.

That does not deal with the point which has featured in so many of the contributions that have been made to today's debate. Those contributions have been concerned, rightly, with the effect of the Government's proposals on the amount of money which can be spent on what are undoubtedly the housing needs of large numbers of our citizens.

There was something in what the hon. Member for Woolwich said, when he recognised a common view across the House, that much could be done and that much needs to be done to improve the housing conditions of our people. Of course that is so. But equally it will avail our people little if we seek to spend money now on the purported objective of improving housing conditions when, by doing so, we damage the objectives of sustained growth and improvement in the economy. That must be the overriding objective. It is not impossible to explain that to people.

The hon. Gentleman extended an invitation to my hon. Friend the Minister to visit a housing estate in his constituency and explain the Government's policy to the people. I can understand why he extended that invitation. Those of us who are familiar with the activities of the alliance in such matters know full well that it is not in the business of trying to explain unpalatable truths to the people whom we represent. It is in the business of pretending to the people whom we represent that difficult choices do not exist; that there is some escape into a political option where one does not have to choose between more or less public spending, more or less taxation, more or less borrowing and higher or lower interest rates, and that all will be all right if only one trusts the alliance. But it is not impossible to explain such matters to those whom we represent.

Undoubtedly, the district council which is conterminous with my constituency would like to spend more money on housing next year than it is permitted to spend by the Government. As it happens, it is also true that it will be permitted by the Government to spend more on housing than it is spending this year and more than it spent in every year but one previously, particularly on rehabilitation and improvement grants.

We have a duty to explain such matters to those whom we represent. They will understand and see, as they have done in the past and as they did at the election, that the overriding objective to which we must address ourselves is the creation of conditions in our economy which will lead to a lasting improvement in the standard of living of all our people. That will include an improvement in housing conditions. They will see that it would be folly to pursue policies at this moment which might lead to some short-term improvement in housing but which would do lasting damage to the rest of the economy and in time to housing as well. That is why I shall support the Government in the Lobby tonight.

5.18 pm

Mr. Derek Fatchett (Leeds, Central)

The hon. and learned Member for Folkestone and Hythe (Mr. Howard) said that there was no division in the House over social objectives — and we all agree that we need a housing policy that will satisfy Britain's needs — but that we must relinquish those objectives in the short term until the longer-term economic objectives are achieved.

Labour Members, and, I suspect, many millions of people in the country, worry about when those long-term economic objectives will be realised. When I listened to the Minister and to the hon. and learned Member for Folkestone and Hythe, I got the impression that we had not had a Conservative Government for the past six years and that they were doing their best to distance themselves from the Government. I can understand that. If I were a Conservative Member, I would want to do exactly the same.

There is a point in the life of the Government, perhaps six years is not too short a time, when Conservative Members must accept that they are partly responsible for the state of the country's economy, that they have some responsibility for the social objectives." They cannot say that they are not responsible for social objectives by pretending that they are meanwhile concentrating on maximising long-term economic objectives. Judging from the way that matters are progressing, we shall never achieve those long-term economic objectives.

I suspect that the hon. and learned Member for Folkestone and Hythe introduced implicitly a novel political doctrine, which is that we go back on each occasion to the electorate and say "We failed miserably in all our economic policies, but we have the same social objectives as the Labour party and the alliance, so please give us another five years because just over the horizon is the achievement of those economic objectives. Give us a mandate again and we shall continue to work for those long-term economic objectives." The reality is that the realisation of those objectives will always be long term, and many of us think that they will never be realised. That is the backcloth to today's debate.

Mr. Robert Wareing (Liverpool, West Derby)

Is it not ironic that, although the hon. and learned Member for Folkestone and Hythe (Mr. Howard) believes that the objectives of the Government's economic policy should transcend even the needs of people living in squalor in many of our urban areas, no doubt he would support the profligate expenditure by the same Government on Trident, which the Secretary of State admits has increased in cost threefold or fourfold? What is the difference between the two?

Mr. Fatchett

I am pleased that I gave way to my hon. Friend, because he made an important point which I was just about to make myself.

The central point of the debate is that it emphasises the important difference between the parties on social and economic issues, and it lays bare the difference in terms of values.

My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) set out in great detail the national housing picture. It is a depressing one and it is reproduced in city after city. Sadly, it is reproduced in my own city of Leeds; a proud city now facing a multitude of housing problems.

In the city of Leeds, on 31 December last year we had 18,536 households on the waiting list. Of those, 1,200 qualified under the homeless persons legislation. An additional 3,006 households were in substandard housing or had special needs priorities. Those are depressing figures.

In addition, in the city of Leeds we have the problems of system-built housing, all the difficulties created by that type of housing, and all the difficulties created by the fact that we have a Government who are not prepared to finance the public sector in any meaningful sense to deal with the problems associated with system-building.

We in the city of Leeds made a major mistake. In September last year we invited the Secretary of State for the Environment to come to see the city's housing problems. That might be said to be a sensible way for any local authority to approach its problems—bring along the Minister responsible, show him the problems and try to persuade him that they will be alleviated only by injections of cash. The Secretary of State came in September. We took him to some of the inner city areas. He said, "It is dreadful. There are problems here." We thought that we had cracked it and that we had found a sympathetic Cabinet Minister who would listen to our problems.

We made a bid. Perhaps we were a bit ambitious, but we were encouraged by the right hon. Gentleman's sympathy. The bid was for £64 million as the housing investment programme allocation for 1985–86. Incidentally, that would only project forward in real terms the value of the HIP which the last Labour Government gave the city in 1978–79, so it was not extravagant. It was a sensible bid, based on the right hon. Gentleman's encouragement.

The Secretary of State has allocated £24.8 million to the city of Leeds, a reduction this year of between £2 million and £2.5 million. The Secretary of State came, he saw and he sympathised. But when it came to finance he did not care a damn about the problems of the city.

In terms of social values, the Government give housing a low priority. I have listened to the rhetoric of Ministers and their supporters on many occasions. The Government's record shows that they care little about homeless people, people on council house waiting lists and people living in system-built houses. They do not bother about them and they are not bothered about a great city such as Leeds. It is all a question of cuts, and further cuts, regardless of the social and personal misery involved.

In the last year of the Labour Government, we in the city of Leeds completed 1,700 houses in the public sector. In 1983–84 the figure was already down to 530. In this financial year we have a start of 101 new council houses. How can we solve the problems of the city with its waiting list when we have a new build programme of 101 houses?

The Minister will say that the Government are shifting resources away from the public sector into the private sector and that it is the private sector which will provide the houses so that the housing stock does not deteriorate. Looking at the national picture, we see that that is not the reality.

A comparison of the requirement for housing looked at on a national scale with private sector and public sector building combined demonstrates that we are well below our overall building requirement. The Minister is presiding over the decay of our housing stock. He says that the Government have made great efforts to help owner-occupiers in terms of improvement and repair grants, but that is not the stark reality that we find in our surgeries and in the letters that we receive daily from people who have made applications for improvement and repair grants.

The reality in Leeds and many other parts of the country is that it is impossible to get a repair or an improvement grant, and people are going on to waiting lists. In my constituency, which is in an inner city area, there are large numbers of Victorian and Edwardian houses which need repair and renovation. Many of them are owner-occupied. Because of Government policies, those people have no hope. In terms of social values, we find that housing is given a low priority by the Government.

I am interested in the language of politics and the way in which the Conservative party likes to present its policies. The Conservatives say that they are the party of opportunity. They say that they are opening Britain's society so that the thrusters — people with ability and enterprise — can take the opportunities presented to them. The Prime Minister says again and again, "We are the enterprise and opportunity Government." How does that language of opportunity compare with the record of Britain's housing? It does not compare. What opportunity is there for a young couple in my constituency who want to move into a council house? What opportunity is there for an elderly couple who want to spend money on improving their house? What opportunity is there for those living in system-built houses with high heating bills caused simply by the nature of the original build?

In the minds of the Conservatives, the language of opportunity extends to a very small sector of society. The reality of opportunity in housing for the vast majority of people does not exist. The Government use opportunity, but they abuse the chances of opportunity for many thousands of people.

Mr. Gow

Is the hon. Gentleman saying that he would have denied the 800,000 former local authority tenants who were given the right to buy by the Government and bought their houses that opportunity?

Mr. Fatchett

I am interested in the fact that we have a Minister who has not only a myopic interpretation of his responsibilities as Minister for Housing, but a limited brief from his civil servants. There is more to housing policy than the right to buy a council house.

Mr. Martin M. Brandon-Bravo (Nottingham, South)

Answer the Minister.

Mr. Fatchett

I shall certainly answer the Minister, and I should love to hear the Minister answer some of our questions.

Mr. Brandon-Bravo

rose—

Mr. Fatchett

I shall not give way, because I must answer the Minister's question.

Mr. Brandon-Bravo

Get on with it, then.

Mr. Fatchett

I do not wish to take on the apprentice boy when I have the craftsman.

We are talking about opportunity across the whole housing market. The Minister is responsible for owner-occupiers, people in need of improvement grants and people on waiting lists, but he is not looking after them. A housing policy should be more than the right to buy, and it is about time that the Government recognised that. As I believe in local autonomy and democracy, I would not force local authorities to sell council houses. That is a sensible argument. If the local electorate vote for councillors who believe in selling council houses, so be it, but that is their choice. It is no good the Minister smiling at that point, because we know the Government's record on local democracy. The Labour party believes in local democracy, but the Government do not, which is why they force a range of policies on local authorities.

I turn from the social implications of the Government's policy to questions of economic management. Time and again the Government tell us that they have expertise in managing the economy. Sometimes I wonder when they will display it. I guess that it is a covert expertise, which on some future occasion they will show to the public's advantage. Does it make economic sense for local authorities to be unable to plan on capital receipts from one year to another? Who would manage a business on that basis? The hon. and learned Member for Folkestone and Hythe said that receipts had been cut from 50 per cent. to 40 per cent. to 20 per cent., and seemed to find satisfaction in it. Perhaps it is part of the hair shirt of economic management, but, in reality, no local authority can manage its affairs if it does not know how much it will receive in capital receipts from year to year. The Secretary of State made his statement seven days before Christmas. That is during local authorities' budget season and gives them no time to plan ahead.

The Government talk about managing resources, but they are a Government of waste. The major criticism of the Government is that they are wasting natural resources when they need to be spent in ways which will be socially and economically beneficial. The Government preside over decay of the infrastructure, and, of many inner cities. At the same time, hundreds of thousands of skilled building trade workers are unemployed. Although the Government say that they do not believe in public spending, they are happy to spend £17 billion to keep people unemployed.

It does not need a great deal of imagination or political will to see that when we need money spent on the infrastructure and when our people have the necessary skills, we can match resources to people and satisfy the need. However, political will and intellectual commitment are needed to do that. The Government have neither the political will nor the intellectual commitment and ability to carry out that task. Until we have a Government with that sort of ability, the country will face further decay in our inner cities and in housing, and the homeless, those on council house waiting lists and the unemployed, who are unemployed simply because of the Government's disastrous policies, will face more and more misery.

5.34 pm

Mr. Nicholas Winterton (Macclesfield)

I was interested to listen to the hon. Member for Leeds, Central (Mr. Fatchett). Towards the end of his speech he touched on an issue which worries me—that is, the ability of local authorities to manage their own affairs. For some time I have been deeply worried about Government interference in and attitude to local authorities. I speak as one who served for some years in local government, and as the parliamentary adviser to the Construction Plant Hire Association. Therefore, I am well aware of the deep problems facing that industry. I also speak on behalf of the area which I have the honour to represent.

I must say to my hon. Friend the Minister, who gave a robust explanation of the Government's decision on capital receipts, that I shall not join him in the Lobby tonight. I intend to abstain because I do not understand the logic behind the Government's decision regarding the capital expenditure and capital receipts of local authorities. My decision to abstain is also tied up with the rate support grant settlement. Once again it has heavily penalised my local authority, Macclesfield borough council. That burden is wholly contrary to the expectations which were raised in the undertakings given at the conclusion of last year's settlement.

I am trying to paint the reasons for not supporting the Government. Next year, my council will lose grant worth £370,000, irrespective of the amount that it now cannot spend from capital receipts. That is on top of a loss of about £186,000 for the present financial year. The officers and elected members of my authority confidently expected that the settlement this year would not have such a drastic effect on authorities which are, to use the Government's term, low spenders and have consistently followed Government policies on expenditure.

In support of its case, the council has followed policies which keep spending at or below target and well below the grant-related expenditure assessment figure; has had appreciable success in reducing staffing levels — 195 posts have gone during the past 10 years, which is a sizeable number for a non-metropolitan district council; keeps its own expenditure under careful scrutiny and control and at levels which have only increased some way below inflation; provides favourable comparative statistics on the costs of its services; provides its own value-for-money team in a constant search for greater economy and efficiency; has produced extremely favourable reports from its private auditors; and keeps within the Government's capital allocations. That is not a bad record for an authority, and I am glad that the Minister nods in agreement.

Macclesfield borough council has pursued central Government policies relating to public expenditure under both this and the previous Government. We believe that the House has a right to dictate, and that if it lays down laws the authority must carry them out. I am worried about many of the legislative measures that the Government are introducing, because they fail to realise the importance of local government. If local government is to have any meaning, it must be allowed to manage its own affairs.

My local authority's success is measured by its performance, which shows that its increase in rate levy during a 10-year period from 1974–75 to 1984–85 is only 13 per cent., as against an increase in the retail price index of more than 180 per cent. This year it will levy the lowest rate poundage in Cheshire for the ninth successive year.

Those achievements have taken place despite the increases in some services necessitated, as in many other areas, by demographic factors and, sadly, the imposition by Parliament of additional responsibilities. Once again, the council's expenditure will be below the rate of inflation. An increase of 3.7 per cent. is envisaged for the forthcoming year. Like all responsible authorities, the council wishes to do everything possible to avoid increasing the burden on the ratepayers, but increased efficiency and economy can no longer keep pace with the severe losses in grant compounded by the capital spending restrictions. Rates will have to be increased by about 12 per cent., 9.6 per cent. of which is a direct result of Government intervention and failure to honour commitments given at last year's rate support grant settlement. Only 2.4 per cent. reflects increased spending by the council.

Many other issues have already been raised. My council, too, will have to reduce considerably the money available for improvement grants. It is one of the few authorities in the north-west seeking to keep a vestige of its housing improvement scheme going. The hon. Member for Leeds, Central (Mr. Fatchett) has said that housing improvement grants in his area will be cut almost completely due to lack of resources. The growth and industry of Macclesfield formed part of the industrial revolution and there are many terraced houses which, as I know my hon. Friend the Minister agrees, could provide excellent homes not just for the elderly but for first-time buyers. Those houses are part of long-established, stable communities in towns such as Macclesfield, but they require urgent improvement and as a result of Government diktats the money will not be available. As a consequence, many may have to be demolished rather than improved and the cost of constructing new houses or improving those which remain when money becomes available by permission of the Government will be very much higher.

The Government's action in limiting the amount of receipts that can be spent means that Macclesfield council will have to reduce the number of local authority mortgages. My hon. Friend the Member for Mid-Staffordshire (Mr. Heddle) suggests that local authorities have no right to be involved in the mortgage business, but the House has emphasised on many occasions the part that local authorities have to play in this respect. I remind my hon. Friend that local authorities are prepared to cover types of housing that building societies refuse to cover and those properties are very important to the communities in which they are located.

The Government's decision will also set back the capital programme for modernisation of council housing in Macclesfield, especially the important programme for the Moss estate, the oldest local authority housing estate in Macclesfield. When the authority housing account is awash with money it is quite wrong that work which will improve the standard of life for many of my constituents is not to be allowed to take place. I am extremely concerned about that, quite apart from the employment implications.

The borough council is now constructing only specialist accommodation for elderly persons. The leader of the council, Mrs. Margaret Duddy, and the Conservative group which controls it strongly oppose the Government's policy which has led to the shelving of two such projects for the elderly, despite the urgent need for them. When that accommodation is finally built, of course, the cost will be a great deal higher.

On the general rate capital fund, 30 per cent. of receipts can be spent. The allocation to Macclesfield this year, however, was only £520,000 on the general rate allocation fund. In addition, the council may spend 30 per cent. of its capital receipts, but the figure for next year—there is nothing that we can do about the year already past—has been reduced to £499,000. As a result, there will be no resources to provide a multi-storey car park. The cost of even a modest project is about £1 million and the borough council has plenty of money, but the Government say that it cannot use that money to fund its own projects.

The council has a fine reputation for good housekeeping and I challenge my hon. Friend the Minister to check that. It is building a new swimming pool as an extension of the excellent leisure centre which was built without borrowing one penny. The swimming pool project has been funded by a five-year covenant scheme organised through merchant bankers Morgan Grenfell. The council has been able to pay Morgan Grenfell as soon as bills are submitted by the contractors, thus avoiding any interest charges. From April this year, however, the council will not be allowed to use the money in its own bank account to pay Morgan Grenfell as and when bills are submitted by the contractors. As a result, the project will cost more—at the ratepayers' expense—and scarce resources will have to be used to pay interest charges which benefit no one but the banks.

The borough council has the resources to carry out all the projects that I have mentioned. The housing revenue account is currently being credited with about £750,000 per year from housing capital account interest. The account is awash with money. Council house rents will not be increased this year. I welcome that decision, as will all council tenants in the area. From the information that I have given, my hon. Friend the Minister will surely appreciate that a prudent, thrifty and responsible council is suffering in its ability to plan for the future due to ham-fisted Government policies which take no account of the good practice of that council over so many years, and the Department has figures to prove what I am saying.

As I have great respect for my hon. Friend the Minister, it is with regret that I must inform him that I shall not be supporting the Government in the Lobby today. My hon. Friend advanced a highly articulate case which may have a bearing on many authorities, but it has no relevance whatever to Macclesfield council, which manages its affairs so responsibly. Indeed, it is an insult to the elected councillors and the first-rate officers who serve the residents of the borough. I therefore ask my hon. Friend to look again at the difficult cases, many of which have been and will continue to be highlighted in this debate.

5.48 pm

Mr. Peter Pike (Burnley)

It is a pleasure to follow the hon. Member for Macclesfield (Mr. Winterton). I spent three weeks in Macclesfield during the 1971 by-election campaign, seeking to ensure that the hon. Gentleman was not elected, but I welcome his statement that he will not support the Government today. I hope that, having heard the rest of this short debate, he and a number of other Conservative Members will have the courage to come into the Lobby with the Opposition and to vote against the Government. I sincerely believe that that is the only way to get the Government to think again on this vital issue.

Councils of all political persuasions throughout the country are critical of the Government over the capital allocations for the forthcoming year, particularly in regard to the spending of capital receipts. Even the friends of the Conservatives in industry are concerned about the consequences of the Government's proposals. The hon. Member for Woolwich (Mr. Cartwright) referred to a document produced by the Building Employers Confederation. That is one of many examples of concern being expressed by industry and commerce about what the Government are doing.

On Saturday of last week I was speaking to a prominent member of the Conservative party in north-east Lancashire; until a few years ago he was the leader of an authority close to my constituency. His business is in the construction industry and he made it clear to me that the Government's action would force many building companies, though not his, out of existence, which in turn would put people out of work. There are, therefore, those two aspects: first, we shall not be able to deal with the problems facing local government and, secondly, we shall add to the number of people unemployed.

Nationally, the proposal for next year involves cuts of over £1 billion in housing provision. That, in cash terms, represents a spending cut of 19 per cent. Urgently required housing programmes involving new build, sheltered housing, improvement and repair grants and even mandatory grants will be threatened in some areas.

The forecast of additional unemployment in the housing sphere alone arising from the Government's proposals is between 75,000 and 150,000. For the whole of the capital programme for 1985–86, the Government have projected a 28 per cent. cut, from £5.1 billion to £3.8 billion. It is a cut almost too serious to contemplate.

A large part of capital spending occurs in the private sector, not within local authorities' direct works departments. Even councils which win contracts — for improvement work or new build — must purchase materials, and that in turn provides work for the private sector. No wonder private companies in the industry are concerned about what will happen as a result of the cuts.

People in industry find it surprising that councils do not know, until a late stage, the extent of their capital programmes. That means that many councils cannot plan ahead sufficiently far to be properly viable. Compared with that situation, most industries work on a five-year rolling programme and are thus able to plan well ahead.

The Minister may say that councils have been assured of 80 per cent. of expenditure so long as they comply with certain guidelines and do not defy Government policy. That will not be sufficient and, in any event, it will give them only one third of what they really require.

My hon. Friend the Member for Leeds, Central (Mr. Fatchett) dealt with two important issues. First, he said that the Secretary of State had visited his area. We in Burnley did not get the Secretary of State; we got the Minister for Housing and Construction. He examined the housing problems in my constituency in the public and private sectors. He saw some of the major problems facing the borough council and expressed considerable sympathy. Unfortunately, that sympathy has not been matched with allocations which will enable the authority to deal with its problems. We gave the Minister a potato pie lunch. In view of the response from the Department, he would be lucky now to get a biscuit. I hope that he will bear in mind the difficulties that we face locally.

My hon. Friend the Member for Leeds, Central referred, secondly, to council house sales. The Government tend to hold these sales up as a glowing solution to the housing problem. My position is clear: I am opposed to the compulsory sale of council houses. I am not opposed to people buying their own homes—indeed, I would give every encouragement to foster home ownership — but every local council should have the right to determine its policy on council house sales according to local circumstances.

Even if one accepts the Government's view that everybody should have the right to buy, that right is not the answer for many people who live in council houses. The elderly, the unemployed and many others will never have the opportunity in their lifetime to buy the property in which they live, so the right-to-buy policy holds no attraction for them.

That policy creates a problem for them and for local authorities. In my area we have sold almost 1,000 council houses, but an examination of the places in which they have been sold shows that we have sold almost none on the problem estates. On the attractive estates, on the other hand, large numbers of properties have been sold. Indeed, we are rapidly reaching the position when, on some of those estates, 50 per cent. of the properties will be in private occupation.

That means that people living in less favourable houses have a slim chance of getting transferred to more decent accommodation. I accept, as I said, that people should have the right to buy — I would hope that everybody could buy their own homes—but perhaps we should try to assist people to move out of council houses so that others may have the opportunity to move into better homes.

Because of the way in which subsidies have been changed, financial burdens and other problems have been forced on to council tenants, with the rents charged to those who are not in receipt of housing benefit reaching massive levels. The way in which the Government have dealt with housing revenue accounts means that people who do not buy the property in which they live, if they are in a position to buy are silly because the financial attraction to buy is so great. But not everybody would want to buy if there was parity of treatment between people in the private sector and those living in municipal housing.

Mr. Heddle

The hon. Gentleman said that he accepted that people had the right to buy, and I am sure that Hansard will record faithfully his comments about that. So that his opponent at the next election may be sure where he stands in the matter, will he confirm that if people have the right to buy the council in those circumstances has a duty to sell?

Mr. Pike

I did not quite use the words that the hon. Gentleman attributes to me. I said that I believed that people had the right to buy their own houses, but I went on clearly to say that the policy of selling council houses should be determined at local level. Of course people have the right to buy their houses, but councils should not be forced to sell. My local council may now wish to sell its houses because it now has empty properties — this applies in the public and private sectors—because of the large number of people who have moved away from the town due to lack of employment.

Mr. Ted Leadbitter (Hartlepool)

My hon. Friend must not be tempted by the titillating observations of the hon. Member for Mid-Staffordshire (Mr. Heddle) to enter into an argument on the right to buy and the right to sell. The bone of contention is that the right to buy exists. The accumulated reserves referred to in the motion are the reserves of capital receipts arising from the right to buy. If the proportion of capital reserves for the provision of new housing was not limited, the proposal would be to bring men and materials together to provide new houses to meet what authorities judged to be their needs. Therefore, that would not affect the economy adversely. If that is conceded, the Minister's case for restricting tae proportion is lost.

Mr. Pike

My hon. Friend has made a valuable point. Many people accept the Government's case that capital receipts have an effect on the public sector borrowing requirement; many others disagree with that. Certainly I do not share the view that capital receipts should be restricted in that way.

The hon. Member for Mid-Staffordshire (Mr. Heddle) spoke about transferring mortgages from councils to building societies. When I was leader of Burnley council we tried to transfer our mortgages to the National Provincial building society—or the Burnley, as it was at that time. After considerable resistance from the Government, ultimately we got their agreement to that transfer. It was done on a voluntary basis. Obviously, if people were getting a cheaper interest rate it was sensible for them to take up the option to transfer. It was also to the advantage of the council because, instead of getting capital in dribs and drabs, it got it all in one go. That should be done wherever possible, but it is nonsense to do it if the council cannot use the receipts.

I hope the Minister will refer in his reply to what St. Albans council has done, as reported in the press this week. It has transferred its mortgages to a merchant banker for a commission fee. There has been a cash exchange, with no interest paid. This will give the council the right to use the money. I do not know all the details, but no doubt the Minister and his Department are aware of them, and he should comment on that arrangement.

Burnley's HIP bid for 1985–86 was £10,793,000 and the allocation was £4,288,000 — a reduction of £1 million on this year. The amount we got this year was completely inadequate. We shall have a shortfall next year of at least £6.5 million. When the council prepared that bid, it was a realistic bid which did not go over the top.

We have many houses in Burnley which need improvement. We have over 1,000 pre-war council houses that the council cannot do anything about. There are many houses in the private sector which need improvement, but the council cannot give the necessary grants. A particular problem arises where people were given prior approval for work to be done because of its urgent nature and they cannot get the money to pay the bills. That must be of concern to the Minister.

In regard to other services, we bid for £2,044,000 and the allocation was £401,000. Even at this stage, next year's urban aid allocation is not known, so we cannot plan ahead. The derelict land reclamation figures have not yet been finalised for next year. The Inland Revenue is reported to want retrospective legislation which would have the effect of altering the present leasing arrangements. Again, that could have disastrous effects for local government.

The council has had consultations with the chamber of commerce and industry, no great ally of the Labour party. It made three points on the Burnley budget. First, it failed to understand the logic of keeping back capital receipts, which are limited to 20 per cent. Secondly, it clearly understood the injustice to the local ratepayers of withdrawing in effect a 5p rate due to the general reduction in rate support grant to just over 48 per cent. Thirdly, it felt that the local authority, like a private sector company, should be able to plan over a longer period than one year.

These are the problems that local government faces. In addition to my authority's problem, Lancashire county council has £2 million of capital receipts which it cannot use. This causes major problems. The Government should think again. I hope that many hon. Members, like the hon. Member for Macclesfield, will join us in the Lobby tonight.

6.5 pm

Mr. Tony Marlow (Northampton, North)

I understand and believe that the hon. Member for Burnley (Mr. Pike) cares for the needs of his constituents, just as the hon. Member for Leeds, Central (Mr. Fatchett) cares for the needs and requirements of his. I only wish that Opposition Members would appreciate that we on the Conservative side also care for the needs and requirements of our constituents. If they were to examine objectively the provision of Conservative local authority areas compared with Labour local authority areas they would find that not only do we care but that we actually provide.

The Opposition have another motivation. They are hooked on public money to sustain and expand the Socialist republics, the very leaders of which are on the management committees that are responsible for the reselection of many Labour Members.

I note a correspondence between depressed areas and Socialism. Where there is Socialism there is a depressed area, and where there is a depressed area there is Socialism. I am not sure which comes first, which is the chicken and which is the egg, but many Socialist areas have a vested interest in the dependence of their clients and their constituents and a vested interest in continued depression in the area so that they can climb on the back of the poverty of their people to try to get back to the House.

Mr. Simon Hughes

rose—

Mr. Marlow

I am afraid there is not time for me to give way.

Some of my hon. Friends are concerned about the Government's approach to local authority capital expenditure, but they are also concerned about the level of public expenditure. They know that public expenditure increases, either taxation increases or interest rates increase and the economic problems of the country increase. Some of my hon. Friends believe that there is a particular virtue in local authority capital expenditure. I would agree that if we can cut local authority revenue expenditure we should spend more on capital, but an increase in local authority capital expenditure does not produce more jobs than leaving that money with industry and with the productive sector of the economy.

Another point that those few of my hon. Friends who are concerned about the issue have passed by and have not yet noticed is that the infrastructure is being improved. We are spending more on all areas of infrastructure, except for one area, public sector housing. I wonder sometimes what it is that concerns some of my hon. Friends. Of course, many of them had a background in local government. Somewhere in the back of their minds there is this love affair with their first political institution, local government. What they want the Government to produce above all is a land fit for local government to live in. It is far more important that we should produce a land fit for our people to live in.

In some local authority areas some of our people are appallingly abused. Some of the areas that have Left-wing Labour local authorities look upon local government not as an opportunity to provide services for the people who are their constituents but as a platform for propaganda and social engineering. They have a cynical and complete disregard for the people under their charge. They are concerned with revolution, and heaven help the casualties among those for whom they have responsibility.

Mr. John Fraser (Norwood)

rose—

Mr. Marlow

No, I shall not give way. Time does not permit me to do so.

Mr. Fraser

The hon. Gentleman was prepared to give way to me yesterday.

Mr. Marlow

Yes, but the circumstances today are quite different, as the hon. Gentleman knows.

I think that there is a growing awareness that in any area of public endeavour there is growing a more recognisable conflict between the interests of the public sector unions and the interests and needs of those who live in the area. Increasingly the needs of the local people are being put on one side. In many areas of local government we should strive towards giving it the responsibility mainly to regulate and control services within its area. However, the services should be provided by the private sector and not by local government.

Local authority housing has been perhaps the greatest human and environmental disaster that Britain has seen since the war. Those who doubt that should go abroad and compare the urban and inner city areas of other countries in the European Community with like areas in Britain. They will find that the housing that is provided in other member states is provided partly by municipal means but mainly by the private sector. We should compare the environment in those areas with that of our own. It is clear that something has gone wrong somewhere.

What has gone wrong? First, local government housing has now outgrown its strength. After the war the average local authority was responsible for about 1,400 houses. It is now responsible, on average, for about 14,000 houses. It is manifest that in many areas — I accept that this cannot be said of all areas — authorities have not retained the ability to control, manage and look after housing under their control.

Another problem has been the politicisation of local authorities. There were times when councils were Labour-controlled and sometimes Conservative-controlled but, whatever their complexion, they were concerned mainly with the needs of those in their areas. Politics has taken over with a vengeance.

The hon. Member for Norwood (Mr. Fraser) spoke about Lambeth recently. He knows as well as I do that Lambeth raises £35 million a year in rents and that it costs the borough £135 million a year to run, manage and finance its housing. That means that the taxpayer and the ratepayer has to make up £100 million. At the same time Lambeth proudly prepares expensive glossy pamphlets proclaiming this fact which it has the cheek to put through people's doors.

Let us give credit to Lambeth where credit is due.

Mr. Fraser

The Lambeth council gave the hon. Gentleman a grant.

Mr. Marlow

That is a silly point.

Over the past year the number of void houses in Lambeth has been reduced. A comparison should be made with Liverpool. In Liverpool, virtually one house in 10 is void. There are twice as many voids in Liverpool as in Birmingham — I pay credit to the hon. Member for Birmingham, Perry Barr (Mr. Rooker) — and Birmingham has about twice as many houses in its area as Liverpool. Surely there is a lesson to be learnt there somewhere. Someone is getting it wrong. Someone is causing mischief in this area.

We all know that there are severe problems of homelessness, inadequate housing and lack of housing for the elderly. We all want to do something about these problems. However, we have got the formula wrong. The public sector housing formula is wrong. Rate controls and political vindictiveness towards the private sector have got the private sector wrong as well.

Mr. John Fraser

rose—

Mr. Marlow

No, I shall not give way for the reason that I have already given.

I believe that there is a solution to the problem and that the Government, in all our interests, are moving courageously towards it. The solution lies in moving towards privatisation. This has been done successfully elsewhere in the economy. It has been successful for those for whom services are provided and for those who operate the provision of the services. We are moving towards privatisation. This is not confined to the sale of council houses. I mean more than that. We are moving towards privatisation in housing. We want to introduce private skills and capital. We want to introduce professionalism as far and as fast as we can into the housing sector for the benefit of those who need houses and not for political reasons. People have suffered so badly in some of our city areas and in some of our Socialist republics since the war. In many areas conditions are getting worse rather than better. However, there have recently been valuable developments.

The hon. Member for Burnley wants to know what to do about housing in his constituency. He should take a look at Stockbridge village, where there are 3,000 houses. The private sector has been brought in. A trust has been set up and the environment has been improved. We should move in that direction. There is the way forward. That is where help lies.

Mr. Pike

The hon. Gentleman is not comparing like with like.

Mr. Marlow

My hon. Friend the Minister for Housing and Construction will be aware that it is the policy of some local authorities — it does not matter whether they are Conservative or Labour controlled — to help those who live within the area. They have done what they can to help them. They have sold off some of the tower blocks and deck-access housing to private sector companies, which have developed them and produced decent, reasonable housing from slums. That is the way in which we want to go.

We should encourage the private sector of housing to help produce accommodation for the elderly, single people and one-parent families. It has the skills and it will do it if it is given the opportunity to do so. It will provide a better environment and better housing than at present. The tragedy is that Labour Members do not embrace this policy for they are concerned as Conservative Members to provide the housing that is needed. I suggest to my hon. Friend the Minister for Housing and Construction that the time may come when we shall have to remove the roadblocks which are being erected to prevent improvement. At some stage we may need to ask local authorities to move some of their housing estates across to the private sector. Of course, they would have to be moved to licensed companies and there should be a great deal of control and restraint in terms of housing allocation, standards and a commitment to make improvements. Such companies may well be able to provide a better solution than some of the appalling results that we have now.

6.16 pm

Mr. Bill Michie (Sheffield, Heeley)

I, too, understand that all right hon. and hon. Members are concerned about housing. If they make that claim, I am prepared to accept it.

The general tone of the debate, and especially the speech of the hon. Member for Northampton, North (Mr. Marlow), has suggested that privatisation offers the simple solution and that if it is implemented all our problems will go away. If the hon. Gentleman lived in the area that I represent, he would know that the private sector is suffering as much as the public sector. In many instances the standard of accommodation in the private sector is much worse than in the public sector. There are many examples of the private sector pleading with the local authority to help it out with improvement grants or the purchase of large private blocks of flats.

It must be understood that the massive cut in the capital programme and restrictions on capital receipts has had a drastic effect on housing and other services across the board. Sheffield's capital receipts reduction amounts to £8 million and it will lose £3 million in grant. That means that it will lose £11 million in total. That cannot be found overnight from another source, and at the same time plans cannot be changed overnight to take account of the reduction. This has meant that the Sheffield housing programme is over-committed.

Conservative Members may ask, "Why did you over-commit?" The simple answer is that the Government have requested local authorities in the past to plan ahead. Having planned ahead, Sheffield is in the ludicrous position of being over-committed. Like many other authorities, it is still asking the Government to think again and to redress the balance.

It is not so long ago that the Minister for Housing and Construction visited Sheffield. After a good visit and a good debate he conceded that work had to be done almost immediately on some of Sheffield's housing stock, especially on dangerous blocks of flats. We all agreed that it should be done and everyone went away happy, thinking that something would be done.

But what happened? The result was the very opposite of that which we hoped would follow from the Minister's visit. Sheffield received less in capital grants and allocation and now we have lost the flexibility that is provided by capital receipts. This means that the city cannot service the areas which it, and the Government know are priorities because of the dangers they pose.

Ministers and the city council have agreed that those living in the Broomhall flats should be decanted to other properties. That presents a difficulty, as we cannot achieve much new build in Sheffield. It has been agreed also that the flats should be demolished once those living in them have been decanted. The bill for demolishing one block of flats at Broomhall is £1 million. That, of course, does not include the costs of finding alternative accommodation and building new housing for those who are still on the waiting list.

There has been a massive cut in the housing improvement programme for the private sector. This has had an effect on many elderly people who need adaptations to their homes and on many who feel that their present accommodation is not conducive to good health. These people are in desperate need of Government money to allow improvements to be carried out.

The massive capital allocation reduction and lack of flexibility in the use of capital receipts has caused a ripple effect upon services such as the social services which look after children in need, those in bad housing, the disabled, infirm and old. We cannot help that department because of the drastic cut in the use of capital receipts. The department has a capital development programme of £658,000. That is less than half last year's allocation. How can a council carry out its statutory obligations if such arbitrary cuts in capital receipts and allowances are made? The amount of £480,000 already allocated to those services leaves only £178,000 for Sheffield to deal with all the problems of the old, the infirm and others.

I am sure that all hon. Members receive details of sad cases every week where a little money spent in the private sector would make life much easier for people living in difficult accommodation whose problems are made worse by infirmity or old age.

The cuts affect building adaptations. The cuts will mean that some non-statutory projects will be shelved. That is important in homes where the chief fire officer has recommended that fire precautions should be taken. Although those are non-statutory obligations, I am sure that no hon. Member will disagree that it would be foolish to ignore the chief fire officer when he talks about property lived in largely by children, the infirm or the old.

I have studied the report of the Association of Metropolitan Authorities. I cannot understand why Sheffield's allocation is so low and why it has been so severely affected compared with other local authorities. One argument that I have seen used in the press to justify the overall reduction from £116 million to £70 million was the persistent underspending on social services throughout the country. That does not apply to Sheffield, so I do not understand why it has been so heavily penalised.

There appears to be no logical relationship between the proposals for reductions and the size of the authority. The decision does not seem to have been taken on account of need or size of population in a place such as Sheffield. I can only speculate that the allocation relates to contracts already let. If that is the case, I am mystified as to the rationale, because the Secretary of State requested us to hold back on letting contracts during the latter part of 1984–85 to keep within his expenditure targets.

Sheffield has made no formal representation other than what I am saying. The cuts will not just affect the electorate, in particular those in need; they will affect jobs. Jobs will be lost in old people's homes. At least 100 jobs will be lost in Sheffield.

I would appreciate it if the Minister were to take cognisance of the points and anomalies that I have mentioned. Increased strains will be placed upon housing and social service officers. I ask him to reconsider the proposals, but if he feels that he cannot, will he at least think more about their implications and offer a much more realistic and fairer allocation to authorities such as Sheffield? If the Secretary of State cannot do that, will he meet the members of Sheffield's committees and some of the users of the services? There is all-party support in Sheffield for what I am saying. That is how serious the matter is. I hope that the Minister will take those matters on board and consider them more realistically in the near future.

6.24 pm

Mr. Roger Gale (Thanet, North)

I support entirely the need to curb public borrowing for the reasons that my hon. Friend the Member for Mid-Staffordshire (Mr. Heddle) expounded so eloquently. I accept entirely the need to use a proportion of capital receipts prudently to invest and generate interest to be offset against local authority borrowing. What is in question is the level of permitted expenditure. It is an issue of degree, not of principle. If the level of permitted expenditure in any one year is too low, under-utilised assets will not be sold, the capital receipts will not be generated and the policy will be counter-productive. That is the position in which we find ourselves today.

If my hon. Friend the Minister is lucky enough to have an heirloom in his attic worth £200 and needs a new washing machine but cannot afford it, he may sell the heirloom to buy the washing machine. If he cannot generate enough revenue from the sale, he may not make the purchase. In that case he would not make the sale. I do not believe that he would sell the heirloom to reduce his overdraft.

It may be parochial, but my local authority is in that position. There is a leisure plan for Thanet which states: The current financial situation, which has imposed a virtual stand-still on expenditure, is probably the most important reason for the formulation of a Leisure Plan. Given clear guidelines, which create a settled situation, and a corporate approach, the Council could achieve a great deal by making the most of what it has got. Before Opposition Members make too much of my reference to the "financial situation", I should tell them that that report was written in 1976.

My local authority has, as have many others, the family heirlooms—properties and long leases—that could and should be sold. If the amount of money generated by those sales and available for use on pet projects is insufficient, the properties and leases will not be sold. I therefore believe that the present balance is wrong and that the policy will be counter-productive.

My constituency has an above average number of elderly people living in under-occupied public and private sector houses. Many of them wish to move to sheltered housing. It is desirable to use capital receipts to build sheltered housing for one reason only. My hon. Friend the Member for Northampton, North (Mr. Marlow) said that he believes it desirable that housing should be built by the private and not the public sector. I endorse his sentiments, except on one point. The elderly people about whom we are talking have been living in public sector accommodation for a long time. Many of them are too old to change their ways. There is a need for sheltered housing. Were the money available to build it, we should be able to release properties for greater use and for sale.

I wish to deal with mortgages. Each of my two local authorities has about £9.5 million on mortgage. I entirely agree with my hon. Friend the Member for Mid-Staffordshire that those mortgages should not be in the public sector but should be made available to be bought by the private sector. However, some of those mortgages will have been extended on properties on which building societies would not normally extend mortgages. Unless the receipts from such a handover are sufficient to encourage local authorities to change, I believe that they would sooner sit on the money.

I regret that I shall be unable to join my hon. Friend the Minister in the Lobby tonight because I believe that we have the balance, although not the policy, wrong.

6.29 pm

Mr. Martin M. Brandon-Bravo (Nottingham, South)

I intend to support the Government in the Lobby tonight because I believe that their position is a reasonable one based on a mix of need, expectation and national good housekeeping. I fear that a fixed percentage use of capital receipts is not necessarily right or fair for all authorities, but I understand the complications and difficulties of trying to apply different percentages in different parts of the country. I understand and acknowledge the deep concern for the construction industry of my hon. Friend the Member for Macclesfield (Mr. Winterton), and the impatience of many local authorities which have projects, some good and some bad, in the pipeline.

The motion and the amendment refer to local authorities' own money, a phrase that has been repeated on a number of occasions. Far be it from this lesser Member to question his betters, but it should be remembered that much of that money—in some cases as much as 60 per cent. — has come from central Government finance for housing. Therefore, while the ownership of those reserves does not change, at least some moral substance is given to central Government's right to decide how it should be spent and at what rate.

The hon. Member for Birmingham, Perry Barr (Mr. Rooker) mentioned the problem of stop-go. I agree that the construction industry wants not stop-go but long-term stability and planning. I suggest that the spread of capital receipts tends to give some steadiness and underpinning to a council's spending pattern over the years when its right to borrow may fluctuate and cause precisely the stop-go mentioned by the hon. Member for Perry Barr.

The hon. Member also drew the House's attention to slum clearance programmes. I understand that this will vary from town to town. In Nottingham, which is no small city — 300,000 people — by party agreement the city's slum programme ended in 1979–80. Inevitably, the statistics of new build now look sad compared with the new build before the completion of that programme. That is no criticism of either of the two parties which have been in control of the city of Nottingham. Indeed, it is precisely that problem that results in the involvement of the House and many other bodies in the silly numbers game of seeking to use new starts, and particularly new starts in the public sector, as a measure of whether an authority is good or bad.

We should consider the problem of what I might describe as political waste among local authorities in this respect. In Nottingham, there is a 17.5 acre site on which 250 homes could be built. It has been lying idle for five years because the local Labour-controlled council decided that it was not prepared to allow private houses and private building on it. It wanted public sector housing.

The council compounds its financial problems. There are two major blocks of system-built homes. The council had an opportunity to conserve its capital, its plans and the two buildings, Balloon Woods and Basford. A city publication says: Demolishing the Balloon Woods and the old Basford flats was budgeted in the sums of £558,419 and £1,072,700 respectively. As several hon. Members have said, the local authority, awash with housing money, is spending that amount to demolish those sites, and has turned down offers from the private sector to pay £250,000 to the city, thereby saving £1,750,000 in a single stroke, and to build homes for sale on those two sites. However, for political reasons that is turned down.

There is the other side to the coin of not spending capital receipts too quickly. Here I regret that I have to differ from my hon. Friend the Member for Mid-Staffordshire (Mr. Heddle). The Nottingham local authority, when it embarked on voluntary house sales before the right to buy, decided that it wanted to be the building society. It was a deliberate act of the council. We never denied people the right to go to the building society, but there were benefits flowing to the city if it acted as a building society also. This spread over a greater number of years both the income in terms of interest benefit and the benefits from capital receipts.

The city has had the following benefits. The gross expenditure of the local authority is £130.5 million. The net rate levied is £9.2 million. As a result of the investment of capital receipts, the interest benefit flowing to the city is £10.5 million, over £1 million greater than the amount levied in rates. The present controlling Labour group would like to blow the capital receipts in a spending spree over two or three years. That would double the city rate without taking into account any other factor. The housing revenue account receives £8.2 million-worth of interest benefit in its total budget of £44.4 million. To every tenant in the city—approximately 47,000 homes are managed by the local authority in the city of Nottingham—this is worth £3.50 per week.

While I understand and sympathise with the pressure for more spending and for a greater percentage use of capital receipts, there is another side of the coin. The rates in Nottingham are half what they would otherwise be and the rents are £3.50 per week lower because of the retention of those capital receipts.

6.36 pm

Mr. Ted Leadbitter (Hartlepool)

It is my intention to sit down promptly at 6.40 pm. I therefore concede that there is not much time in which to develop an argument which would satisfy either me or the House. There is time only to pinpoint the nature of the problem and to state that 1 million houses are in a state of disrepair. Over 1 million houses are not up to modern standards of amenity provision to provide decent living conditions for families, and over 500,000 people live in overcrowded conditions.

Each local authority knows specifically, much better than the Government and the House do, the needs of its own people. That is the enormity of the problem and the specific understanding, which is at the service of the House, of local authorities, who know their business best. They know the nature of their requirements for housing in four-bedroomed houses, maisonettes and bungalows, including adequate provision for old people and invalids, and on that knowledge the Government should place considerable reliance.

Because of the right to buy, capital receipts have been pouring into the coffers of local authorities, and, with accumulated reserves of over £5 billion, there is one simple question that we should ask. If it is easy to bring together materials and unemployed people in the construction industry to produce houses for people to live in, how, in terms of capital expenditure considerations at the national level, does that adversely affect the economy? It cannot do so. It enriches the economy. The potential for production arises from the health and proper housing of people.

As a conscientious man, the Minister will realise, I hope, that I have put forward the problem briefly and in a proper spirit. If he cannot show how the economy will be adversely affected by bringing men and materials together when there are the capital resources to do it, will he answer this question: if the restriction of the proportion of capital receipts is a matter for determination by the Government, how does he justify it?

6.40 pm

Mr. Rooker

With the leave of the House, Mr. Speaker, perhaps I might reply to the debate.

The Minister could have come to the debate today and said, "There are half a million families who have outside toilets. As a special concession to them, we shall give them inside toilets before the next general election." The Minister could have given a special concession to the half a million families who have no hot and cold running water systems. He could have promised them hot and cold running water before the next election. Instead of doing that, the Minister has come here to tough it out. That is basically the Government's position.

I pay tribute to the hon. Members for Thanet, North (Mr. Gale) and for Macclesfield (Mr. Winterton). They are the only two Conservative Members out of 74 who signed the early-day motion who have been in the Chamber today and risen to their feet. They have made it clear that they will not support the Government. We shall be watching what the other 72 hon. Members do at 7 pm. [Interruption.] Every hon. Member is accountable to his constituents. No one put a gun to the heads of the 74 Conservative Members to make them sign the early-day motion. They have all been to see the building employers. Some building employers have told me, "Our Member is doing what he can. He is going to see the Ministers. He has signed a motion in the House of Commons." But when those hon. Members are given the opportunity to vote with their feet in favour of the motion they signed, most of them are not taking that opportunity.

Mr. Den Dover (Chorley)

rose—

Mr. Rooker

I shall not give way.

In 1977 the Labour Government, with the approval of the Opposition, changed the arrangements for nationalised industry capital spending. Up to then we were counting as public expenditure the whole of capital investment in the nationalised industries, including that part financed from internal resources. That was a crazy arrangement and out of line with the practice of other Governments in the European Community. The new arrangement has not been changed by the Conservative Government since they came to office. Why can we not do the same for local authorities? Why do we have to count as public expenditure all the capital expenditure, including that generated from within their own resources? Will the Minister see what can be done to bring local authorities into line as nearly as possible with the treatment of nationalised industries?

In my opening speech, when I referred to local authorities, I neglected to give a quotation from the London borough of Waltham Forest — not Labour-controlled. On 10 January 1985 the council passed the following resolution: The Council condemns the Secretary of State for the Environment's proposal to restrict the spending of capital receipts which represents a further attack on local decision making. We support the Local Authority Association's opposition to this proposal, and request the three Members of Parliament representing constituencies of this borough to vote against the Order when it is presented to Parliament. The local authority in the constituency of the Secretary of State for Trade and Industry is asking him to vote against the order. In other words, the principle involved transcends some of the arguments of Conservative Members.

The hon. Member for Northampton, North (Mr. Marlow), towards the end of his speech, made many sensible points which would find favour with Labour Members, but the first part of his speech was a tirade of abuse against local authorities just because they were Labour-controlled. The fact that they might be doing something right seemed to be irrelevant for him.

I have particularly sought to highlight what Tory-controlled authorities are saying about the proposal. Far from weakening my case, it must strengthen it. We are dealing with an attack on local decision making. The money is there to be spent. It has been generated by a change of policy approved by this House since 1980. That means that many of the old arguments are no longer valid. Before 1980, for reasons that we all know, the capital receipts were not available on the necessary scale. I referred earlier to the Prime Minister's assurance that the money could be used to replace capital assets, in particular with regard to the elderly.

Employers have a vested interest in the question because of their businesses. This is a debate, not about public housing, but about the use of capital receipts by local authorities for public housing, voluntary housing and private housing. That is what the argument is about, despite the usual smokescreen from one or two hon. Members.

We have had a letter from the Building Employers Confederation telling us: Total local authority capital spending in 1985–86 could fall to £3.8 million, a 28 per cent. reduction from this year's expected £5.1 billion. Such a massive reduction in workload would cause grave problems for the construction industry and could lead to the loss of more than 150,000 jobs. That is what is said on behalf of people who are involved in building, refurbishing and improving housing in the private, public and voluntary sectors.

We have had a letter from the British Aggregate Construction Materials Industries organisation telling us: despite the collective overspend by local authorities in 1983–84 and 1984–85, local capital spending in 1984–85 is less in cash than it was in 1979–80—representing a 40 per cent. real fall. If local authorities adhere to the Government's plans for £2.2 billion for capital spending in 1985–86, this would mean that local investment would be 60 per cent. down on the 1979–80 real level. It is no good going back to what happened under previous Governments. Expenditure has been cut and cut again, even in relation to the levels inherited by the Government.

I mentioned earlier the survey by the Institute of Housing. Every sentence in the survey comes from a local authority. All the comments deal with the cut that we are discussing. Under the heading "Elderly/Disabled", the following sentences appear: One elderly scheme cancelled for sheltered … 100 units cut to 31 for sheltered … Elderly programme deferred … No new elderly or disabled starts. Under the heading "Modernisation/Rehabilitation/Capitalised Repairs", it says: Adaptations for disabled deferred … No new improvement contracts … Fire prevention schemes for flats, water mains renewal, re-wiring, re-roofing postponed. Under the heading "Defective Dwellings", it says: Cannot meet legal requirements under Defects Act … 500 defective dwellings untouched … Cutback on asbestos removal. Under the heading "Improvement Grants", it says: 4,000 on list, 4–5 years before process applications … 6,500 on list, none removed. Under "Build for Sale/Low Cost Home Ownership Etc", it says: Leasehold scheme for elderly cancelled. I should like to know what the Minister thinks about that.

Under "Housing Association Funding", it says: Stopped. Stopped new build 90 dwellings. Stopped. 2 projects postponed. Heavily affected. Under "Slum Clearance" it says: Deferred. Slum clearance affected. Under "Mortgages" it says: All but RTB mortgages stopped. Excluded from programme. Reduced. Loans for house purchase no longer available from council. Those are sentences picked out at random from hundreds of sentences provided by the Institute of Housing as a result of its survey. They are directly related to the cut.

The Building Employers Confederation is in the numbers game, and I do not blame it for that. Of course, we are in the numbers game; we are talking about homes for people. The confederation has made it clear that there has been a disturbing shortfall of 100,000 new homes in each of the past seven years. The Minister mentioned completions; I have been quoting starts. I do not argue about that; we have to look at the different years. The Building Employers Confederation, in its latest note to Members of Parliament, said that in 1984 only 190,000 houses were completed, compared with an average of 304,000 per annum in the 1970s.

If the slum clearance programme and the new build programme are reduced, we demand an increase each year in the improvement and renovation schemes. We do not want a cut. I shall not reiterate my earlier arguments. It makes no sense to have the building programme and the slum clearance programme reduced, and now to have reductions in improvement grants, and we are storing up a crisis of massive proportions for our constituents. Ministers are not ignorant of that, and we are merely asking them to start facing it.

6.49 pm

Mr. Gow

With the leave of the House, I should like to respond to the debate. Thirteen hon. Members have spoken and I should like to answer the points that they have raised. If, in the time available to me, I am unable to answer all of their questions, I shall be happy to write to them.

The hon. Member for West Bromwich, West (Miss Boothroyd) raised a constituency matter. Arrangements have been made to monitor the houses above Cow Pasture mine. My hon. Friend the Parliamentary Under-Secretary of State for the Environment has asked the limestone expert panel which advises on limestone matters for its view on the consultant's proposals for extending the scope of the present monitoring arrangements. The panel will visit the site tomorrow.

Subject to advice from the panel, my hon. Friend is ready to authorise the use of derelict land grant for the additional monitoring work. The Government have already provided £3.6 million for limestone investigations in the west midlands and for the development of methods of tackling the problem. For 1985–86 my hon. Friend has increased the allocation to £2.6 million—£600,000 more than for the previous year. I know how worried the hon. Lady is, and it goes without saying that I shall be pleased to discuss the matter further with her. Moreover, if she would like to bring representatives of her council to see my hon. Friend or me, of course we shall be glad to see her and them.

The financial consequences of spending the accumulated receipts of local authorities, which have resulted from the outstanding success of our policy of selling council houses, has been a continuing part of the debate. Local authorities' external debts total about £30 billion. If the £5 billion of accumulated receipts were spent, that external debt would be increased.

In a characteristically powerful speech, my hon. Friend the Member for Macclesfield (Mr. Winterton) considered this problem, as did some others.

Mr. Eric S. Heller (Liverpool, Walton)

Address the Chair.

Mr. Gow

I am entitled to address my hon. Friends, and I hope that you, Mr. Speaker, were able to hear what I was saying.

If the Government are committed — and we most emphatically are—to reducing public sector borrowing, we cannot ignore the fact that a significant part of public sector borrowing lies with local authorities. The journey to diminished debt and to abate the evil of inflation cannot be carried through to success painlessly.

Earlier Governments have made exactly the same diagnosis — that we have too much debt. They have recognised that inflation is the parent of unemployment and a major source of social envy, malice and injustice. The difference between the Opposition Front Bench and those who sit on the Treasury Bench is that, although we have made the same diagnosis and started on the same path towards a policy of sound money and honest finance, when the going got tough Opposition Members abandoned the policy.

Characteristically, I was rebuked by the Opposition Front Bench because I quoted an excellent letter written on 15 December 1976 by the then Chancellor of the Exchequer to Dr. Johannes Witteveen. The right hon. Member for Leeds, East (Mr. Healey) was not alone in wanting to embark on the policy that we are now following. As I have been reminded of the compassion that Opposition Members claim is exclusive to them, I should like to remind them, although they will not like it, of what the former Prime Minister, the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan). said—

Mr. Rooker

Put your finger down.

Mr. Gow

No, I shall not put my finger down. It needs to be wagged at the Opposition; besides which, it is my finger.

Addressing his comrades at the Labour party conference of 1976, the former Prime Minister said: We used to think that you could spend your way out of a recession and increase employment by boosting Government spending. That is what the Opposition are asking us to do now. The right hon. Gentleman continued: I tell you in all candour"— [Interruption.] I should have thought that the Opposition would show a little more respect for the man who used to lead them. I am showing the right hon. Member for Cardiff, South and Penarth respect. However much Opposition Members shout, I shall get this quotation out because it is important that we be reminded of truths. Some truths continue to be valid although they were uttered nine years ago.

The right hon. Gentleman said: I tell you in all candour that that option no longer exists and, in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step. Opposition Members who argue, sometimes with the highest motives, that it would be right on grounds of compassion to increase public expenditure now would bring about the higher inflation and higher unemployment of which their former leader warned.

We know that genuine hardship still exists, but it will be relieved only if we lay a firm foundation for more jobs. I therefore ask the House to reject the motion and approve the amendment.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 206, Noes 314.

Division No. 134]	[7 pm
AYES
Ashdown, Paddy	Brown, N. (N'c'tle-u-Tyne E)
Ashley, Rt Hon Jack	Brown, R. (N'c'tle-u-Tyne N)
Ashton, Joe	Brown, Ron (E'burgh, Leith)
Atkinson, N. (Tottenham)	Bruce, Malcolm
Bagier, Gordon A. T.	Buchan, Norman
Banks, Tony (Newham NW)	Caborn, Richard
Barnett, Guy	Callaghan, Jim (Heyw'd & M)
Barron, Kevin	Campbell, Ian
Beckett, Mrs Margaret	Campbell-Savours, Dale
Beggs, Roy	Canavan, Dennis
Beith, A. J.	Carter-Jones, Lewis
Bell, Stuart	Cartwright, John
Bennett, A. (Dent'n & Red'sh)	Clark, Dr David (S Shields)
Bermingham, Gerald	Clarke, Thomas
Bidwell, Sydney	Clay, Robert
Blair, Anthony	Clwyd, Mrs Ann
Boothroyd, Miss Betty	Cocks, Rt Hon M. (Bristol S.)
Boyes, Roland	Cohen, Harry
Bray, Dr Jeremy	Coleman, Donald
Brown, Gordon (D'f'mline E)	Concannon, Rt Hon J. D.
Brown, Hugh D. (Provan)	Conlan, Bernard

Cook, Frank (Stockton North)	McGuire, Michael
Cook, Robin F. (Livingston)	McKay, Allen (Penistone)
Corbett, Robin	McKelvey, William
Corbyn, Jeremy	Mackenzie, Rt Hon Gregor
Cowans, Harry	Maclennan, Robert
Cox, Thomas (Tooting)	McNamara, Kevin
Craigen, J. M.	McTaggart, Robert
Crowther, Stan	McWilliam, John
Cunliffe, Lawrence	Madden, Max
Dalyell, Tam	Maginnis, Ken
Davies, Rt Hon Denzil (L'lli)	Marshall, David (Shettleston)
Davies, Ronald (Caerphilly)	Mason, Rt Hon Roy
Davis, Terry (B'ham, H'ge H'l)	Maxton, John
Deakins, Eric	Maynard, Miss Joan
Dewar, Donald	Meacher, Michael
Dixon, Donald	Meadowcroft, Michael
Dobson, Frank	Michie, William
Douglas, Dick	Millan, Rt Hon Bruce
Dover, Den	Miller, Dr M. S. (E Kilbride)
Dubs, Alfred	Molyneaux, Rt Hon James
Duffy, A. E. P.	Morris, Rt Hon A. (W'shawe)
Dunwoody, Hon Mrs G.	Morris, Rt Hon J. (Aberavon)
Eastham, Ken	Nellist, David
Edwards, Bob (Wh'mpt'n SE)	Nicholson, J.
Ellis, Raymond	Oakes, Rt Hon Gordon
Evans, John (St. Helens N)	O'Brien, William
Ewing, Harry	O'Neill, Martin
Fatchett, Derek	Orme, Rt Hon Stanley
Faulds, Andrew	Owen, Rt Hon Dr David
Field, Frank (Birkenhead)	Paisley, Rev Ian
Fisher, Mark	Park, George
Flannery, Martin	Parry, Robert
Foot, Rt Hon Michael	Patchett, Terry
Forrester, John	Pavitt, Laurie
Forsythe, Clifford (S Antrim)	Pendry, Tom
Foster, Derek	Penhaligon, David
Foulkes, George	Pike, Peter
Fraser, j. (Norwood)	Prescott, John
Freeson, Rt Hon Reginald	Radice, Giles
Freud, Clement	Randall, Stuart
Garrett, W. E.	Redmond, M.
George, Bruce	Rees, Rt Hon M. (Leeds S)
Godman, Dr Norman	Richardson, Ms Jo
Gourlay, Harry	Roberts, Allan (Bootle)
Hamilton, James (M'well N)	Roberts, Ernest (Hackney N)
Hamilton, W. W. (Central Fife)	Robinson, P. (Belfast E)
Harman, Ms Harriet	Rogers, Allan
Harrison, Rt Hon Walter	Rooker, J. W.
Hattersley, Rt Hon Roy	Ross, Stephen (Isle of Wight)
Haynes, Frank	Ross, Wm. (Londonderry)
Healey, Rt Hon Denis	Ryman, John
Heffer, Eric S.	Sedgemore, Brian
Hogg, N. (C'nauld & Kilsyth)	Sheldon, Rt Hon R.
Home Robertson, John	Shore, Rt Hon Peter
Howell, Rt Hon D. (S'heath)	Short, Ms Clare (Ladywood)
Howells, Geraint	Short, Mrs R. (W'hampt'n NE)
Hoyle, Douglas	Silkin, Rt Hon J.
Hughes, Dr. Mark (Durham)	Skinner, Dennis
Hughes, Robert (Aberdeen N)	Smith, C. (Isl'ton S & F'bury)
Hughes, Roy (Newport East)	Smyth, Rev W. M. (Belfast S)
Hughes, Simon (Southwark)	Soley, Clive
Janner, Hon Greville	Spearing, Nigel
John, Brynmor	Steel, Rt Hon David
Jones, Barry (Alyn & Deeside)	Stott, Roger
Kaufman, Rt Hon Gerald	Strang, Gavin
Kennedy, Charles	Straw, Jack
Kilroy-Silk, Robert	Taylor, Rt Hon John David
Kinnock, Rt Hon Neil	Thomas, Dafydd (Merioneth)
Kirkwood, Archy	Thorne, Stan (Preston)
Lamond, James	Tinn, James
Leadbitter, Ted	Torney, Tom
Leighton, Ronald	Wainwright, R.
Lewis, Ron (Carlisle)	Walker, Cecil (Belfast N)
Lewis, Terence (Worsley)	Wallace, James
Litherland, Robert	Warded, Gareth (Gower)
Lloyd, Tony (Stretford)	Wareing, Robert
Lofthouse, Geoffrey	Welsh, Michael
Loyden, Edward	White, James
McCartney, Hugh	Wigley, Dafydd
McDonald, Dr Oonagh	Williams, Rt Hon A.

Winnick, David
Woodall, Alec	Tellers for the Ayes:
Wrigglesworth, Ian	Mr. Austin Mitchell and
Young, David (Bolton SE)	Mr. Sean Hughes.
NOES
Aitken, Jonathan	Eyre, Sir Reginald
Alexander, Richard	Fairbairn, Nicholas
Alison, Rt Hon Michael	Fallon, Michael
Amery, Rt Hon Julian	Farr, Sir John
Amess, David	Favell, Anthony
Ancram, Michael	Fenner, Mrs Peggy
Arnold, Tom	Finsberg, Sir Geoffrey
Atkins, Rt Hon Sir H.	Fletcher, Alexander
Atkins, Robert (South Ribble)	Fookes, Miss Janet
Atkinson, David (B'm'th E)	Forman, Nigel
Baker, Rt Hon K. (Mole Vall'y)	Forsyth, Michael (Stirling)
Baker, Nicholas (N Dorset)	Forth, Eric
Banks, Robert (Harrogate)	Fowler, Rt Hon Norman
Batiste, Spencer	Fox, Marcus
Bellingham, Henry	Franks, Cecil
Bendall, Vivian	Freeman, Roger
Bennett, Rt Hon Sir Frederic	Fry, Peter
Best, Keith	Galley, Roy
Bevan, David Gilroy	Garel-Jones, Tristan
Biffen, Rt Hon John	Glyn, Dr Alan
Biggs-Davison, Sir John	Goodhart, Sir Philip
Blackburn, John	Goodlad, Alastair
Blaker, Rt Hon Sir Peter	Gorst, John
Body, Richard	Gow, Ian
Bottomley, Peter	Gower, Sir Raymond
Bottomley, Mrs Virginia	Grant, Sir Anthony
Bowden, A. (Brighton K'to'n)	Gregory, Conal
Bowden, Gerald (Dulwich)	Griffiths, E. (B'y St Edm'ds)
Braine, Rt Hon Sir Bernard	Griffiths, Peter (Portsm'th N)
Brandon-Bravo, Martin	Grist, Ian
Bright, Graham	Ground, Patrick
Brinton, Tim	Grylls, Michael
Brittan, Rt Hon Leon	Gummer, John Selwyn
Brooke, Hon Peter	Hamilton, Hon A. (Epsom)
Brown, M. (Brigg & Cl'thpes)	Hamilton, Neil (Tatton)
Browne, John	Hanley, Jeremy
Bruinvels, Peter	Hannam, John
Bryan, Sir Paul	Harg reaves, Kenneth
Buchanan-Smith, Rt Hon A.	Harris, David
Budgen, Nick	Harvey, Robert
Bulmer, Esmond	Havers, Rt Hon Sir Michael
Burt, Alistair	Hawkins, Sir Paul (SW N'folk)
Butcher, John	Hawksley, Warren
Butterfill, John	Hayes, J.
Carlisle, Kenneth (Lincoln)	Hayhoe, Barney
Carlisle, Rt Hon M. (W'ton S)	Hayward, Robert
Carttiss, Michael	Heathcoat-Amory, David
Cash, William	Heddle, John
Chalker, Mrs Lynda	Henderson, Barry
Channon, Rt Hon Paul	Heseltine, Rt Hon Michael
Chope, Christopher	Hickmet, Richard
Clark, Hon A. (Plym'th S'n)	Hill, James
Clark, Dr Michael (Rochford)	Hind, Kenneth
Clark, Sir W. (Croydon S)	Hogg, Hon Douglas (Gr'th'm)
Clarke, Rt Hon K. (Rushcliffe)	Holland, Sir Philip (Gedling)
Clegg, Sir Walter	Hordern, Peter
Colvin, Michael	Howard, Michael
Conway, Derek	Howarth, Alan (Stratf'd-on-A)
Coombs, Simon	Howarth, Gerald (Cannock)
Cope, John	Howe, Rt Hon Sir Geoffrey
Corrie, John	Howell, Rt Hon D. (G'ldford)
Couchman, James	Howell, Ralph (N Norfolk)
Cranborne, Viscount	Hubbard-Miles, Peter
Crouch, David	Hunt, David (Wirral)
Currie, Mrs Edwina	Hunt, John (Ravensbourne)
Dickens, Geoffrey	Hunter, Andrew
Dorrell, Stephen	Hurd, Rt Hon Douglas
Douglas-Hamilton, Lord J.	Irving, Charles
du Cann, Rt Hon Sir Edward	Jackson, Robert
Dunn, Robert	Jenkin, Rt Hon Patrick
Durant, Tony	Jessel, Toby
Edwards, Rt Hon N. (P'broke)	Jones, Gwilym (Cardiff N)
Eggar, Tim	Jones, Robert (W Herts)
Evennett, David	Jopling, Rt Hon Michael

Joseph, Rt Hon Sir Keith	Raffan, Keith
Kellett-Bowman, Mrs Elaine	Raison, Rt Hon Timothy
Kershaw, Sir Anthony	Rees, Rt Hon Peter (Dover)
Key, Robert	Renton, Tim
King, Roger (B'ham N'field)	Rhys Williams, Sir Brandon
Knight, Gregory (Derby N)	Ridley, Rt Hon Nicholas
Knight, Mrs Jill (Edgbaston)	Ridsdale, Sir Julian
Lamont, Norman	Roberts, Wyn (Conwy)
Lang, Ian	Robinson, Mark (N'port W)
Lawler, Geoffrey	Roe, Mrs Marion
Lawrence, Ivan	Rossi, Sir Hugh
Lawson, Rt Hon Nigel	Rost, Peter
Lee, John (Pendle)	Rowe, Andrew
Leigh, Edward (Gainsbor'gh)	Rumbold, Mrs Angela
Lennox-Boyd, Hon Mark	Ryder, Richard
Lester, Jim	Sackville, Hon Thomas
Lewis, Sir Kenneth (Stamf'd)	Sainsbury, Hon Timothy
Lightbown, David	St. John-Stevas, Rt Hon N.
Lilley, Peter	Sayeed, Jonathan
Lloyd, Ian (Havant)	Shaw, Giles (Pudsey)
Lloyd, Peter, (Fareham)	Shaw, Sir Michael (Scarb')
Lord, Michael	Shelton, William (Streatham)
Luce, Richard	Shepherd, Richard (Aldridge)
Lyell, Nicholas	Shersby, Michael
McCrindle, Robert	Skeet, T. H. H.
McCurley, Mrs Anna	Smith, Sir Dudley (Warwick)
Macfarlane, Neil	Smith, Tim (Beaconsfield)
MacGregor, John	Soames, Hon Nicholas
MacKay, Andrew (Berkshire)	Speed, Keith
MacKay, John (Argyll & Bute)	Speller, Tony
Maclean, David John	Spence, John
McQuarrie, Albert	Spencer, Derek
Major, John	Spicer, Jim (W Dorset)
Malins, Humfrey	Spicer, Michael (S Worcs)
Malone, Gerald	Squire, Robin
Marlow, Antony	Stanbrook, Ivor
Marshall, Michael (Arundel)	Stanley, John
Mates, Michael	Steen, Anthony
Maude, Hon Francis	Stern, Michael
Mawhinney, Dr Brian	Stevens, Martin (Fulham)
Mayhew, Sir Patrick	Stewart, Allan (Eastwood)
Mellor, David	Stewart, Andrew (Sherwood)
Merchant, Piers	Stewart, Ian (N Hertf'dshire)
Miller, Hal (B'grove)	Stokes, John
Mills, Iain (Meriden)	Stradling Thomas, J.
Mills, Sir Peter (West Devon)	Taylor, John (Solihull)
Miscampbell, Norman	Taylor, Teddy (S'end E)
Mitchell, David (NW Hants)	Tebbit, Rt Hon Norman
Moate, Roger	Temple-Morris, Peter
Monro, Sir Hector	Terlezki, Stefan
Montgomery, Sir Fergus	Thatcher, Rt Hon Mrs M.
Moore, John	Thompson, Donald (Calder V)
Morris, M. (N'hampton, S)	Thompson, Patrick (N'ich N)
Moynihan, Hon C.	Thorne, Neil (Ilford S)
Murphy, Christopher	Thornton, Malcolm
Neale, Gerrard	Thurnham, Peter
Needham, Richard	Townend, John (Bridlington)
Nelson, Anthony	Tracey, Richard
Neubert, Michael	Trippier, David
Newton, Tony	Trotter, Neville
Nicholls, Patrick	Twinn, Dr Ian
Norris, Steven	van Straubenzee, Sir W.
Onslow, Cranley	Viggers, Peter
Oppenheim, Rt Hon Mrs S.	Waddington, David
Osborn, Sir John	Wakeham, Rt Hon John
Ottaway, Richard	Waldegrave, Hon William
Page, Sir John (Harrow W)	Walden, George
Page, Richard (Herts SW)	Walker, Rt Hon P. (W'cester)
Parris, Matthew	Wall, Sir Patrick
Patten, Christopher (Bath)	Waller, Gary
Patten, J. (Oxf W & Abdgn)	Ward, John
Pattie, Geoffrey	Wardle, C. (Bexhill)
Pawsey, James	Warren, Kenneth
Pollock, Alexander	Watson, John
Portillo, Michael	Watts, John
Powell, Rt Hon J. E. (S Down)	Wells, Bowen (Hertford)
Powell, William (Corby)	Wells, Sir John (Maidstone)
Powley, John	Wheeler, John
Price, Sir David	Whitney, Raymond
Proctor, K. Harvey	Wiggin, Jerry

Wilkinson, John	Younger, Rt Hon George
Wolfson, Mark
Wood, Timothy	Tellers for the Noes:
Woodcock, Michael	Mr. Robert Boscawen and
Young, Sir George (Acton)	Mr. Carol Mather.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments).

The House divided: Ayes 307, Noes 204.

Division No. 135]	[7.15 pm
AYES
Aitken, Jonathan	Dorrell, Stephen
Alexander, Richard	Douglas-Hamilton, Lord J.
Alison, Rt Hon Michael	du Cann, Rt Hon Sir Edward
Amery, Rt Hon Julian	Dunn, Robert
Amess, David	Durant, Tony
Ancram, Michael	Edwards, Rt Hon N. (P'broke)
Arnold, Tom	Eggar, Tim
Atkins, Rt Hon Sir H.	Evennett, David
Atkins, Robert (South Ribble)	Eyre, Sir Reginald
Atkinson, David (B'm'th E)	Fairbairn, Nicholas
Baker, Rt Hon K. (Mole Vall'y)	Fallon, Michael
Baker, Nicholas (N Dorset)	Farr, Sir John
Banks, Robert (Harrogate)	Favell, Anthony
Batiste, Spencer	Fenner, Mrs Peggy
Bellingham, Henry	Finsberg, Sir Geoffrey
Bendall, Vivian	Fletcher, Alexander
Bennett, Rt Hon Sir Frederic	Fookes, Miss Janet
Best, Keith	Forman, Nigel
Bevan, David Gilroy	Forsyth, Michael (Stirling)
Bitten, Rt Hon John	Forth, Eric
Biggs-Davison, Sir John	Fowler, Rt Hon Norman
Blackburn, John	Fox, Marcus
Body, Richard	Franks, Cecil
Bottomley, Peter	Fry, Peter
Bottomiey, Mrs Virginia	Galley, Roy
Bowden, A. (Brighton K'to'n)	Garel-Jones, Tristan
Bowden, Gerald (Dulwich)	Glyn, Dr Alan
Braine, Rt Hon Sir Bernard	Goodhart, Sir Philip
Brandon-Bravo, Martin	Goodlad, Alastair
Bright, Graham	Gorst, John
Brinton, Tim	Gow, Ian
Brittan, Rt Hon Leon	Gower, Sir Raymond
Brooke, Hon Peter	Grant, Sir Anthony
Brown, M. (Brigg & Cl'thpes)	Greenway, Harry
Browne, John	Gregory, Conal
Bruinvels, Peter	Griffiths, Peter (Portsm'th N)
Bryan, Sir Paul	Grist, Ian
Buchanan-Smith, Rt Hon A.	Ground, Patrick
Budgen, Nick	Grylls, Michael
Bulmer, Esmond	Gummer, John Selwyn
Burt, Alistair	Hamilton, Hon A. (Epsom)
Butcher, John	Hamilton, Neil (Tatton)
Butterfill, John	Hampson, Dr Keith
Carlisle, Kenneth (Lincoln)	Hanley, Jeremy
Carlisle, Rt Hon M. (W'ton S)	Hannam, John
Carttiss, Michael	Hargreaves, Kenneth
Cash, William	Harris, David
Chalker, Mrs Lynda	Harvey, Robert
Channon, Rt Hon Paul	Havers, Rt Hon Sir Michael
Chope, Christopher	Hawkins, Sir Paul (SW N'folk)
Clark, Hon A. (Plym'th S'n)	Hawksley, Warren
Clark, Dr Michael (Rochford)	Hayes, J.
Clark, Sir W. (Croydon S)	Hayhoe, Barney
Clarke, Rt Hon K. (Rushcliffe)	Hayward, Robert
Colvin, Michael	Heathcoat-Amory, David
Conway, Derek	Heddle, John
Coombs, Simon	Henderson, Barry
Cope, John	Heseltine, Rt Hon Michael
Corrie, John	Hickmet, Richard
Couchman, James	Hill, James
Cranborne, Viscount	Hind, Kenneth
Crouch, David	Hogg, Hon Douglas (Gr'th'm)
Currie, Mrs Edwina	Holland, Sir Philip (Gedling)
Dickens, Geoffrey	Hordern, Peter

Howard, Michael	Ottaway, Richard
Howarth, Alan (Stratf'd-on-A)	Page, Sir John (Harrow W)
Howarth, Gerald (Cannock)	Page, Richard (Herts SW)
Howe, Rt Hon Sir Geoffrey	Parris, Matthew
Howell, Rt Hon D. (G'ldford)	Patten, Christopher (Bath)
Howell, Ralph (N Norfolk)	Patten, J. (Oxf W & Abdgn)
Hubbard-Miles, Peter	Pattie, Geoffrey
Hunt, David (Wirral)	Pawsey, James
Hunt, John (Ravensbourne)	Pollock, Alexander
Hunter, Andrew	Portillo, Michael
Hurd, Rt Hon Douglas	Powell, Rt Hon J. E. (S Down)
Irving, Charles	Powell, William (Corby)
Jackson, Robert	Powley, John
Jenkin, Rt Hon Patrick	Price, Sir David
Jones, Gwilym (Cardiff N)	Proctor, K. Harvey
Jones, Robert (W Herts)	Raffan, Keith
Jopling, Rt Hon Michael	Raison, Rt Hon Timothy
Joseph, Rt Hon Sir Keith	Rees, Rt Hon Peter (Dover)
Kellett-Bowman, Mrs Elaine	Renton, Tim
Kershaw, Sir Anthony	Rhys Williams, Sir Brandon
Key, Robert	Ridley, Rt Hon Nicholas
King, Roger (B'ham N'field)	Ridsdale, Sir Julian
Knight, Gregory (Derby N)	Roberts, Wyn (Conwy)
Knight, Mrs Jill (Edgbaston)	Robinson, Mark (N'port W)
Lamont, Norman	Roe, Mrs Marion
Lang, Ian	Rossi, Sir Hugh
Lawler, Geoffrey	Rost, Peter
Lawrence, Ivan	Rowe, Andrew
Lawson, Rt Hon Nigel	Rumbold, Mrs Angela
Lee, John (Pendle)	Ryder, Richard
Leigh, Edward (Gainsbor'gh)	Sackville, Hon Thomas
Lennox-Boyd, Hon Mark	Sainsbury, Hon Timothy
Lewis, Sir Kenneth (Stamf'd)	St. John-Stevas, Rt Hon N.
Lightbown, David	Sayeed, Jonathan
Lilley, Peter	Shaw, Giles (Pudsey)
Lloyd, Ian (Havant)	Shaw, Sir Michael (Scarb')
Lloyd, Peter, (Fareham)	Shelton, William (Streatham)
Lord, Michael	Shepherd, Richard (Aldridge)
Luce, Richard	Skeet, T. H. H.
Lyell, Nicholas	Smith, Sir Dudley (Warwick)
McCrindle, Robert	Smith, Tim (Beaconsfield)
McCurley, Mrs Anna	Soames, Hon Nicholas
Macfarlane, Neil	Speed, Keith
MacGregor, John	Speller, Tony
MacKay, Andrew (Berkshire)	Spence, John
MacKay, John (Argyll & Bute)	Spencer, Derek
Maclean, David John	Spicer, Jim (W Dorset)
McQuarrie, Albert	Spicer, Michael (S Worcs)
Major, John	Squire, Robin
Malins, Humfrey	Stanbrook, Ivor
Malone, Gerald	Stanley, John
Marlow, Antony	Steen, Anthony
Marshall, Michael (Arundel)	Stern, Michael
Mates, Michael	Stevens, Martin (Fulham)
Maude, Hon Francis	Stewart, Allan (Eastwood)
Mawhinney, Dr Brian	Stewart, Andrew (Sherwood)
Mayhew, Sir Patrick	Stewart, Ian (N Hertf'dshire)
Mellor, David	Stokes, John
Merchant, Piers	Stradling Thomas, J.
Miller, Hal (B'grove)	Taylor, John (Solihull)
Mills, Iain (Meriden)	Taylor, Teddy (S'end E)
Mills, Sir Peter (West Devon)	Tebbit, Rt Hon Norman
Miscampbell, Norman	Temple-Morris, Peter
Mitchell, David (NW Hants)	Terlezki, Stefan
Moate, Roger	Thatcher, Rt Hon Mrs M.
Monro, Sir Hector	Thompson, Donald (Calder V)
Montgomery, Sir Fergus	Thompson, Patrick (N'ich N)
Moore, John	Thorne, Neil (Ilford S)
Morris, M. (N'hampton, S)	Thornton, Malcolm
Moynihan, Hon C.	Thurnham, Peter
Murphy, Christopher	Townend, John (Bridlington)
Neale, Gerrard	Tracey, Richard
Needham, Richard	Trippier, David
Nelson, Anthony	Trotter, Neville
Neubert, Michael	Twinn, Dr Ian
Newton, Tony	van Straubenzee, Sir W.
Nicholls, Patrick	Viggers, Peter
Norris, Steven	Waddington, David
Onslow, Cranley	Wakeham, Rt Hon John
Osborn, Sir John	Waldegrave, Hon William

Walden, George	Wiggin, Jerry
Wall, Sir Patrick	Wilkinson, John
Waller, Gary	Wolfson, Mark
Ward, John	Wood, Timothy
Wardle, C. (Bexhill)	Woodcock, Michael
Warren, Kenneth	Young, Sir George (Acton)
Watson, John	Younger, Rt Hon George
Watts, John
Wells, Bowen (Hertford)	Tellers for the Ayes:
Wells, Sir John (Maidstone)	Mr. Robin Boscawen and
Wheeler, John	Mr. Carol Mather.
Whitney, Raymond
NOES
Ashdown, Paddy	Dubs, Alfred
Ashley, Rt Hon Jack	Duffy, A. E. P.
Ashton, Joe	Dunwoody, Hon Mrs G.
Atkinson, N. (Tottenham)	Eastham, Ken
Bagier, Gordon A. T.	Edwards, Bob (W'h'mpfn SE)
Banks, Tony (Newham NW)	Ellis, Raymond
Barnett, Guy	Evans, John (St. Helens N)
Barron, Kevin	Ewing, Harry
Beckett, Mrs Margaret	Fatchett, Derek
Beggs, Roy	Faulds, Andrew
Beith, A. J.	Field, Frank (Birkenhead)
Bell, Stuart	Fisher, Mark
Bennett, A. (Dent'n & Red'sh)	Flannery, Martin
Bermingham, Gerald	Foot, Rt Hon Michael
Bidwell, Sydney	Forrester, John
Blair, Anthony	Forsythe, Clifford (S Antrim)
Boothroyd, Miss Betty	Foster, Derek
Boyes, Roland	Foulkes, George
Bray, Dr Jeremy	Fraser, J. (Norwood)
Brown, Gordon (D'f'mline E)	Freeson, Rt Hon Reginald
Brown, Hugh D. (Provan)	Freud, Clement
Brown, N. (N'c'tle-u-Tyne E)	Garrett, W. E.
Brown, R. (N'c'tle-u-Tyne N)	George, Bruce
Brown, Ron (E'burgh, Leith)	Godman, Dr Norman
Bruce, Malcolm	Gould, Bryan
Buchan, Norman	Gourlay, Harry
Caborn, Richard	Hamilton, James (M'well N)
Callaghan, Jim (Heyw'd & M)	Hamilton, W. W. (Central Fife)
Campbell, Ian	Harman, Ms Harriet
Campbell-Savours, Dale	Harrison, Rt Hon Walter
Canavan, Dennis	Hattersley, Rt Hon Roy
Carter-Jones, Lewis	Haynes, Frank
Cartwright, John	Healey, Rt Hon Denis
Clark, Dr David (S Shields)	Heffer, Eric S.
Clarke, Thomas	Hogg, N. (C'nauld & Kilsyth)
Clay, Robert	Home Robertson, John
Clwyd, Mrs Ann	Howell, Rt Hon D. (S'heath)
Cocks, Rt Hon M. (Bristol S.)	Howells, Geraint
Cohen, Harry	Hoyle, Douglas
Coleman, Donald	Hughes, Dr. Mark (Durham)
Concannon, Rt Hon J, D.	Hughes, Robert (Aberdeen N)
Conlan, Bernard	Hughes, Roy (Newport East)
Cook, Frank (Stockton North)	Hughes, Simon (Southward)
Cook, Robin F. (Livingston)	Janner, Hon Greville
Corbett, Robin	John, Brynmor
Corbyn, Jeremy	Jones, Barry (Alyn & Deeside)
Cowans, Harry	Kaufman, Rt Hon Gerald
Cox, Thomas (Tooting)	Kennedy, Charles
Craigen, J. M.	Kilroy-Silk, Robert
Crowther, Stan	Kinnock, Rt Hon Neil
Cunliffe, Lawrence	Kirkwood, Archy
Davies, Rt Hon Denzil (L'lli)	Lamond, James
Davies, Ronald (Caerphilly)	Leadbitter, Ted
Davis, Terry (B'ham, H'ge H'l)	Leighton, Ronald
Deakins, Eric	Lewis, Ron (Carlisle)
Dewar, Donald	Lewis, Terence (Worsley)
Dixon, Donald	Litherland, Robert
Dobson, Frank	Lloyd, Tony (Stretford)
Douglas, Dick	Lofthouse, Geoffrey
Dover, Den	Loyden, Edward

McCartney, Hugh	Roberts, Allan (Bootle)
McDonald, Dr Oonagh	Roberts, Ernest (Hackney N)
McGuire, Michael	Robinson, P. (Belfast E)
McKay, Allen (Penistone)	Rogers, Allan
McKelvey, William	Rooker, J. W.
Mackenzie, Rt Hon Gregor	Ross, Stephen (Isle of Wight)
Maclennan, Robert	Ross, Wm. (Londonderry)
McNamara, Kevin	Ryman, John
McTaggart, Robert	Sedgemore, Brian
McWilliam, John	Sheldon, Rt Hon R.
Madden, Max	Shore, Rt Hon Peter
Maginnis, Ken	Short, Ms Clare (Ladywood)
Marshall, David (Shettleston)	Short, Mrs R. (W'hampt'n NE)
Mason, Rt Hon Roy	Silkin, Rt Hon J.
Maxton, John	Skinner, Dennis
Maynard, Miss Joan	Smith, C. (Isl'ton S & F'bury)
Meacher, Michael	Smyth, Rev W. M. (Belfast S)
Meadowcroft, Michael	Soley, Clive
Michie, William	Spearing, Nigel
Millan, Rt Hon Bruce	Steel, Rt Hon David
Miller, DrM. S. (E Kilbride)	Stott, Roger
Molyneaux, Rt Hon James	Strang, Gavin
Morris, Rt Hon A. (W'shawe)	Straw, Jack
Morris, Rt Hon J. (Aberavon)	Taylor, Rt Hon John David
Nicholson, J,	Thomas, Dafydd (Merioneth)
Oakes, Rt Hon Gordon	Tinn, James
O'Brien, William	Torney, Tom
O'Neill, Martin	Wainwright, R.
Orme, Rt Hon Stanley	Walker, Cecil (Belfast N)
Owen, Rt Hon Dr David	Wallace, James
Paisley, Rev Ian	Wardell, Gareth (Gower)
Park, George	Wareing, Robert
Parry, Robert	Welsh, Michael
Patchett, Terry	White, James
Pavitt, Laurie	Wigley, Dafydd
Pendry, Tom	Williams, Rt Hon A.
Penhaligon, David	Winnick, David
Pike, Peter	Woodall, Alec
Prescott, John	Wrigglesworth, Ian
Radice, Giles	Young, David (Bolton SE)
Randall, Stuart
Redmond, M.	Tellers for the Noes:
Rees, Rt Hon M, (Leeds S)	Mr. Austin Mitchell and
Richardson, Ms Jo	Mr. Sean Hughes.

Question accordingly agreed to.

MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved, That this House notes the existence of local authority accumulated reserves of capital receipts of about £5 billion and the Secretary of State for the Environment's acceptance that these reserves belong to the local authorities; further notes that housing and infrastructure needs are reflected in the gross provision of over £4 billion for local authority capital spending in 1985–86; and welcomes the Government's determination to keep next year's local authority capital expenditure within the total provided in the Autumn Statement and approved by this House on 6th December 1984.

7.22 pm

Mr. Rooker

On a point of order, Mr. Speaker. As 74 right hon. and hon. Members have signed a motion which is virtually identical to that which has just been defeated, is it consistent with being an hon. Member of the House that only the hon. Member for Chorley (Mr. Dover) has voted for what he signed?

Mr. Speaker

I am in no way responsible for what hon. Members sign or for what they do in the Division Lobbies.