HC Deb 13 May 1992 vol 207 cc608-10
7. Mr. Vaz

To ask the Secretary of State for the Environment what plans he has to allow councils to spend the revenue they get from the sale of council houses.

Mr. Baldry

Local authorities may currently spend 25 per cent. of their capital receipts from the sale of council houses. We have no plans to change that percentage.

Mr. Vaz

The Minister will know that since 1979 Leicester city council has sold more than 9,500 council houses under the right-to-buy scheme, bringing in £99 million in capital receipts. He will also know that when the Minister for Housing and Planning visited Leicester he told the city council to carry on with the good work. Is not it absurd that that money remains in the bank, and the council cannot spend it on building new homes and repairing defective housing? When will the Government be prepared to change their plans?

Mr. Baldry

Leicester may well have sold a lot of houses and have made some money from that, but it also has considerable debts—£286 million worth. I hope that the hon. Gentleman will not be insensible to the cost to the community charge payers of Leicester of servicing that debt. Once the council has cleared its debts, it will be able to spend most of its receipts as it wishes.

Mr. Hicks

Does my hon. Friend agree that in certain parts of the country there is a genuine need for specialised housing, such as low-cost social housing for disabled people and the single homeless? Is there not a strong case for relaxing the present figure of 25 per cent.—say, to 40 per cent? To do so would not only help to meet a social need but help the housing and construction industry.

Mr. Baldry

I understand my hon. Friend's worries, but to let councils spend more of their capital receipts would not solve the problems that he mentions, because capital receipts tend to be scarcest in the areas of greatest need. Of course we have to tackle the problems of social housing, especially in the important area of housing for special needs. That is why the Housing Corporation continues to receive a large share of public finance which, together with the money that it raises from the private sector, means that its future budget will be almost £2 billion.

Mr. Bennett

What hope can the Minister offer many of my constituents who are homeless and on the council waiting list in Tameside and in Stockport? Does he realise that in Stockport, the number of people on the housing waiting list is now double the number it was in 1974 when I was first elected to the House? Stockport has a considerable sum which it could spend to provide homes for all the people who desperately need them. Is not it time that the Government allowed local authorities to spend their capital receipts, and to solve the problem of homelessness and of those who desperately need better accommodation?

Mr. Baldry

Stockport also has a very large amount of local authority debt. It must be right that, as far as possible, the debt is discharged. It is the past profligacy of many Labour local authorities which has led to local government's enormous debts. Between them, the top five indebted councils in England have a debt of about £5.5 billion.

Mr. Batiste

Can my hon. Friend confirm that over the coming year the Government intend to keep the tightest control over local authority borrowing and spending, and especially that they will not allow Labour authorities to use the introduction of the council tax as an excuse to rip off their taxpayers?

Mr. Baldry

That is absolutely correct. The history of local government finance all too often demonstrates that Labour-controlled authorities have been profligate in handling public expenses. As so often now, their community charge payers have to finance high interest rates and high service charges in repaying the debts incurred by Labour-controlled local authorities.

Mr. Gould

What is the Minister's best estimate of the current level of capital receipts? How many houses could be built and how many homeless families rehoused if that money were invested in housing? What saving could be made to the public purse if local authorities were permitted to rehouse homeless families instead of putting them into bed-and-breakfast accommodation? Does the Minister accept that the answers to those questions are of direct, practical and immediate importance to homeless families and to the construction industry? If he cannot give detailed answers now, why not?

Mr. Baldry

I suspect that we should all like to hear the shadow Chancellor answer those questions. The Opposition are in a complete mess on this issue. During the election campaign, the hon. Member for Hammersmith (Mr. Soley) sought to persuade us that the public sector borrowing requirement rules should be relaxed. That was immediately attacked as monstrous by the shadow Chancellor. It is interesting that the shadow Chancellor could not bring himself to sign Labour's amendment to release councils' capital receipts which was on the Order Paper yesterday, although he is confident in signing the amendment today. The truth is that the shadow Chancellor shows a greater responsibility for public finances than does the hon. Member for Dagenham (Mr. Gould).