CRITERIA FOR ISSUING CREDIT APPROVALS (Hansard, 13 June 1989)

§ Mr. Tony Banks
I beg to move amendment No. 171, in page 53, line 36, leave out from 'received' to end of line 38.

Mr. Deputy Speaker
With this it will be convenient to discuss amendment No. 172, in page 53, line 40, leave out 'or likely to be received'.

§ Mr. Banks
Clause 47 sets out the criteria that the Secretary of State shall use when fixing total credit approvals for local authorities. The clause sets out two things to which the Secretary of State should have regard and among other factors they are any grants or contributions which it appears to him that the authority concerned have received and are likely to receive within the year and any capital receipts that the local authority has received or is likely to receive within the year.
The amendments seek to remove from those factors capital receipts as one of the things that the Secretary of State shall take into account when fixing total credit approvals.
I move the amendments more in hope than in expectation.

§ Mr. Gummer
The hon. Gentleman is on to a good point when he rightly suggests that it is not easy to take into account future receipts and that that is what he wants to restrict.
It is important to reconsider the example I gave in Committee. When an authority has completed the sale of its housing stock and is about to receive the proceeds of the sale and those proceeds greatly exceed the authority's capital programme for several years to come, it would be ridiculous for us to have to ignore that information simply because the totality of the proceeds had not yet reached that authority, but was about to reach it.
One of the purposes is to ensure that we are able to give more capital allocations in accordance with need. Under the present system we are tied to giving capital allocations where there are considerable receipts in any case and people have considerable opportunities to spend. Then, in addition, they get capital allocations, which reduces those available for local authorities in much greater need.
I do not think there is any difference between the two sides of the House on what we are trying to do here. It would be wrong to restrict the Secretary of State's ability to take into account such future receipts as I have indicated. I accept that it is not an easy matter. We shall handle it with very considerable care. We have not yet decided exactly how best to do it, but the case I have quoted is very much the kind of case that we have in mind. There is nothing secret or special behind this proposal. It is merely that we shall be able to have more capital allocations available for those whose needs are not met by their ability to spend from their own capital receipts.

§ Mr. Banks
A number of problems still arise even given what the Minister has said. Although one can misunderstand what can be read between the lines, perhaps the Minister shares some of my unease about this aspect of the Bill, in particular with regard to how he proposes to find out what future capital receipts a local authority may have and how he proposes to estimate what they might be. There is the matter of the prospects for interest rates. It will be extraordinarily difficult for anyone to say for sure how interest rates will move.
I know that there will be continuing discussions with local authorities and, that being so, I beg to ask leave to withdraw the amendment.