TRANSFER OF LAND AND OTHER PROPERTY TO HOUSING ACTION TRUSTS (Hansard, 11 November 1988)

§ Mr. Deputy Speaker (Mr. Harold Walker)
We now come to Lords amendment No. 76, with which we shall take amendment (a) thereto and Lords amendment No. 120.

§ Mr. Tony Banks (Newham, North-West)
I beg to move, as an amendment to the Lords amendment, after 'authorities)' in sub paragraph (a) insert
'and the amount of expenditure prescribed for an authority under the said Part shall be adjusted by the amount of any such payments'. We shall not ask the House to divide on this amendment—[Interruption.] I could be pushed. However, we will save the surprise for a little later.
We do not like the Lords amendment because it suggests that if the property taken over by a HAT is given a positive value, the money that the local authority receives will be treated as a capital receipt, and currently only 20 per cent. of such receipts can be spent in any one year. The Government have issued a consultation document suggesting that in future 75 per cent. of capital 697 receipts will have to be applied against debt. Any local authority, such as Newham, that is desperately trying to provide homes for the homeless, or to repair ageing or defective stock, will have to come to a halt in 1990–91 if it has any debts outstanding. Such treatment of capital receipts will inhibit the ability of local authorities to deal with problems in their stock.
Of course, that is really what the Government want. They are setting up local authorities so that they fail as landlords. The Government want to ensure that local authorities cannot carry out major repairs or improvements so that they can take away even more properties. The spiral of loss of stock without compensation and without the ability to improve remaining stock will continue, yet the best evidence shows that disrepair in the public sector stock is not the fault of the local authority landlord. The Audit Commission made that quite clear in its 1986 report.
The position is complicated because the Chancellor, in his Autumn Statement, announced a cut in housing allocation of 26 per cent. in real terms. Where will the money come from to pay a dowry to a HAT? Unless an increase in local authorities' proscribed expenditure is announced, that money will have to come from other housebuilding programmes. That is grossly unfair. If we did not have this nonsense of a procedure this afternoon, we would press the amendment to a Division.

§ Mr. Ridley
I can answer the hon. Gentleman briefly by telling him that amendments Nos. 76 and 120 bring payments received by a local authority on transfer of property to a HAT or under tenants' choice within the normal workings of the capital control system. As the hon. Gentleman said, under the present regime 20 per cent. of housing receipts are available to be spent each year on a declining basis. If we switch to the system described in the consultative document, authorities will be able to spend 25 per cent. and the remaining 75 per cent. will be applied to debt. There will thus be an increase from 20 to 25 per cent.
The hon. Gentleman asked about a dowry if the stock is of negative value. My officials recently discussed this with local authority associations at a meeting of the Housing Consultative Council and noted the desire of the associations that additional resources should be made available if dowries were required. It will be some months before sufficient information is available on the valuation of properties to be transferred to HATs, but I assure the hon. Gentleman and the House that we shall consider the matter sympathetically at the appropriate time.

§ Mr. Tony Banks
I beg to ask leave to withdraw the amendment.