Housing (Scotland) (Hansard, 18 March 1986)

§ The Secretary of State for Scotland (Mr. Malcolm Rifkind)
I beg to move,
That the draft Housing Support Grant (Scotland) Variation (No. 2) Order 1986, which was laid before this House on 6th March, be approved. I shall explain briefly the reasons for the Government bringing forward the order. It will be welcomed by all sides of the House. Hon. Members will recall that the first variation order for 1985–86 was debated on 12 February at the same time as the main housing support grant order for 1986–87. Members with longer memories may recall that a similar variation order for 1984–85 was debated in late January 1985, at the same time as the 1985–86 main order. Early 1985 saw exceptional rises in interest rates and authorities' actual outturn interest rate figures, which have only recently become available, now show that average levels for 1984–85 exceeded even those taken into account in the 1984–85 variation order.
For this reason, and because a substantial sum would otherwise be lost in payment to local authorities, the Government have decided to take the exceptional step of bringing forward tonight a second variation order, which has the effect of paying an additional £4.6 million in total to 30 of Scotland's housing authorities. If the House approves the order, the extra payments will be included with next week's final support grant payments for the current financial year.
In addition to the payments approved on 12 February, this will assist authorities in keeping 1986–87 rent increases within reasonable bounds, and in maintaining levels of expenditure on the management and maintenance of their housing stock.
I will not burden the House with further details. Full explanation and details of the calculations that are most concerned are listed in the report which accompanies the draft variation order.
The Convention of Scottish Local Authorities has welcomed our introduction of the order. The action that we are taking to expedite payment of £4.6 million in housing support grants demonstrates our continuing concern to ensure that authorities do have the resources to meet essential local needs. I commend the order to the House.

§ Sir Russell Johnston (Inverness, Nairn and Lochaber)
The House would be more than a little gullible if it accepted the last statement that the Secretary of State made, that the payment of this sum of money represents any noticeable change in Government housing policy.
Like the right hon. Gentleman, I also do not wish to detain the House for any length of time, but I would like to put one point to the Secretary of State. He said that this variation emanated from the fact that, because of changes in interest rates and so on a certain amount of money that he originally thought was not available has become available. That has certain consequences for local authorities. In many cases, it has meant that the local authorities have over-increased rents in anticipation of their support grants.

§ Mr. Rifkind
indicated dissent.

§ Sir Russell Johnston
I see that the Secretary of State is shaking his head, but I can think of at least two local authorities in my constituency that have charged a higher rent than they would have charged had they known that this payment might become available.

§ Mr. Rifkind
The councils should not have had to do that, because local authorities have always received extra payments for extra expenditure caused by interest rates. That has been the policy for many years and is well known to all local authorities.

§ Sir Russell Johnston
Badenoch and Strathspey, in my constituency, an example that I am sure is mirrored throughout Scotland, is receiving a substantial sum. If it had known that that money would be available, it would not have increased its rents to the level it did.
Many local authorities set their budget at the beginning of the year, and the support grant variation comes perhaps two thirds of the way through the year, after the new rent levels have been set. The complaint is not that the Government give them this back payment, in view of fluctuations that perhaps the Government cannot immediately control, but that there should be some way in which the Government can stabilise the payments for local authorities.
I do not know exactly how this can be done, and neither do the councils, but it is unsatisfactory that local authorities do not receive such payments until all their budgets have been set. We are well into the year and in many cases—for example the Inverness district council—authorities would not have increased rents to the level that they have had there been the possibility of such payments.

§ Mr. Rifkind
indicated dissent

§ Sir Russell Johnston
It is all very well the Secretary of State shaking his head, but that is the view of finance officers of local authorities, and he should take some account of it.
Like any other hon. Member, I welcome increased payments for local authority housing accounts. However, local authorities should be able to forecast their budgets more realistically.

§ Mr. John Maxton (Glasgow, Cathcart)
While I welcome any extra money for housing, let us be clear that the money being given by the Government is designed, not to benefit or improve any houses, but to ensure that local authorities do not get into financial problems because the Government got interest rates wrong in the first place. The extra money, to put it in crude terms, goes to the money lenders and not to any council house tenants. It will not reduce one rent, modernise one of the 216,000 houses that require complete modernisation, modernise one of the 134,000 houses that need partial modernisation, rewire one of the 107,000 houses that require rewiring, cure the dampness in one of the 108,699 houses that are damp, nor carry out major repairs on one of the 62,000 houses that require major rapairs. Not one extra penny will be spent on the disastrous crisis in Scottish housing.

§ Mr. Rifkind
I shall withdraw the order.

§ Mr. Maxton
The Secretary of State thinks that he is beginning to develop a sense of humour about Scotland. Most of us do not find the housing crisis and the conditions 259 in which many of our constituents live a laughing matter. It is not a laughing matter at all. If the Secretary of State finds it funny, he should ask his constituents in Westerhailes whether they find their housing conditions at all funny. I feel sure that they would not like to see him sitting there and laughing at the housing problems of Scotland.
We welcome any money that will ensure that Scottish local authorities do not get into problems with housing finance, but the Secretary of State should not run away with the idea that the order will benefit, or do anything to stop, the major housing crisis that Scotland faces now.
It is worth pointing out to the Secretary of State that only seven of the 30 local authorities receiving the money have Labour-controlled councils. The rest of them are a variety of different authorities.

§ Mr. Rifkind
Ah!

§ Mr. Maxton
The Secretary of State says "Ah", but the interest rates that he was so keen to talk about are paid by those other local authorities as well. Where help has not been given through housing support grant, the tenants have to pay the 60 per cent. loan charges through their rates. The Secretary of State is very keen to give extra help to those other local authorities. For many Labour-controlled authorities there is no help at all. The tenants will face increased rents to pay for those loans.
We welcome whatever sums are available, for whatever purposes, but the Secretary of State should not run away with the idea that by this order he is giving great benefit to housing in Scotland.