HC Deb 15 July 1992 vol 211 cc1124-6
5. Mr. Hain

To ask the Secretary of State for the Environment if he will give figures for the total in local authority housing capital receipt funds for England.

Sir George Young

It is currently estimated that English local authorities held about £0.8 billion of usable capital receipts at the end of March 1992. In addition, authorities are estimated to hold over £5 billion of capital receipts which have been set aside as provision to meet credit liabilities. Housing receipts are not separately identifiable.

Mr. Hain

But the Minister is dodging the issue. Does he have any sympathy at all for the tens of thousands of families who do not have their own homes and who are squeezed into the houses of relatives or friends? In my constituency, and in many others, there are examples of young parents sleeping with their babies on the floors of parlours and living rooms—and in garages, in some cases. Even worse, some young women are being advised to get pregnant in order to get a house. When will the Minister release all these billions of pounds of funds and enable local authorities to build council houses?

Sir George Young

I am not sure whether the hon. Gentleman listened to the first part of my answer. I made it quite clear that £0.8 billion of usable capital receipts were available at the end of March 1992. Last year, local authorities spent only 67 per cent. of the receipts that they were entitled to use. Before the hon. Gentleman develops his case for the use of further receipts that have been set aside, he should make sure that local authorities already spend the receipts that they are entitled to spend.

Sir Anthony Durant

Does my hon. Friend agree with the right hon. and learned Member for Monklands, East (Mr. Smith) who said that the Treasury rules for capital receipts were correct and sensible?

Sir George Young

Yes, indeed. I was only disappointed that that sensible statement by the shadow Chancellor was not swiftly endorsed by the rest of the Opposition Front Bench. We look forward with interest to seeing how the Labour party's economic policies develop with a new leader.

Mr. Madden

Does the Minister remember the promises made by Tory Ministers that when council homes were sold, the money raised would be spent on building new homes? How does he explain that in Bradford 12,000 council homes have been sold, yet not a new council house has been built in the past seven years because of a shortage of cash? Why is he not doing more to release the funds that have been locked up for years to enable people to have the new homes that they desperately need?

Sir George Young

Bradford city council has been spending substantial sums of money on modernising and improving its existing stock. The new provision needed by people in Bradford is, as the hon. Gentleman knows, provided by housing associations, the budget for which is increasing substantially from £1 billion two years ago to £2 billion in two years' time. It is sensible to ask local authorties to concentrate their energy and money on improving their stock and to look to the housing associations, which make the nominations to the local authorities, to provide the new social housing that the country needs.

Mr. Conway

Is it not the case that the sale of council houses and the receipts that come from them are still providing valuable housing stock? Will my hon. Friend confirm that there is no restriction upon local authorities to try to rescind some of their outstanding debts by the use of their capital receipts?

Sir George Young

That is a valid point. The total debt of local authorities is £44 billion a year. Servicing that debt costs each adult in this country £140 a year. There are strong arguments for reducing that debt and the burden on ratepayers.

Mr. Gould

Given that the £6 billion in capital receipts already exists—it does not have to be raised through taxation or borrowing—that there are many local authorities such as mine in Barking and Dagenham that are desperate to spend their money on meeting an urgent housing need and that there is no one in the housing world or construction industry who would not dearly like to see the money released to provide a stimulus to the industry, what common sense explanation can the Minister offer for the Government's policy? Will he use language that will be understood by the homeless in my constituency and elsewhere?

Sir George Young

For a start, there is the comon sense of the hon. Gentleman's right hon. and learned Friend the Member for Monklands, East (Mr. Smith). The hon. Gentleman must understand that the same money cannot be spent twice. When a local authority uses its receipts to redeem debt and reduce its borrowing, it enables my Department to increase the borrowing of another local authority that does not have those receipts. The same money cannot be spent twice without pushing up taxes or interest rates.

Mr. Jenkin

Does the Minister agree that it is rather sad that councils such as Colchester and Tendring in my constituency do not do more to help themselves by transferring their housing to housing associations and releasing the capital to repay their debt so that they can invest more in housing?

Sir George Young

My hon. Friend is right. He will have read in the manifesto that we remain committed to large-scale voluntary transfer. That is an option which many local authorities have endorsed, hut, sadly, so far no Labour authorities. It offers benefits to tenants when they transfer. It offers benefits to the local authority in terms of debt redemption and it enables the new housing association that is set up to make faster progress because the local authority can plough back part of the receipts from the sales. It is an important part of Conservative housing policy which I wish to see developed over the next few years.

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