HC Deb 30 June 1994 vol 245 cc934-5
6. Mr. Raynsford

To ask the Chancellor of the Exchequer if he is proposing to relax the current restrictions on the proportion of local authority capital receipts which can be applied for investment in housing and other capital projects.

Mr. Portillo

I understand that my right hon. Friend the Secretary of State for the Environment has no such plans.

Mr. Raynsford

Why are the Chief Secretary and his colleagues at the Department of the Environment so negative? The Prime Minister rightly pointed out that too many people are begging on our streets because they have no homes. Is it not time to get the unemployed back to work building the homes needed for the homeless and to release local authority capital receipts to make that possible?

Mr. Portillo

We are not in the least bit negative. The fact that 179,000 social housing units are being provided over three years, which is well in excess of our manifesto commitment, rather proves that point. What we are positive about is controlling public sector borrowing. We are positive about establishing stable economic conditions, but the Labour party does not even understand that terminology.

Mr. Hawkins

Does my right hon. Friend agree that local authority receipts should first be applied to paying off the appalling debts of local authorities controlled by the Labour party? Does he agree that it is those spendthrift authorities—put in power by the supporters of the Labour party, who frequently do not pay their council tax—that are unable to budget properly and provide proper housing, which should be condemned?

Mr. Portillo

My hon. Friend is right. The local authorities whose spending of receipts is being controlled are those authorities that have large debts. They ran up those debts generally in the 1930s and the 1960s in order to build houses. When those authorities sell those houses again, it is not appropriate for them to retain the same level of debt. That is rather like saying that if someone borrows to buy a house he can have a large mortgage, but that if he sells that house and does not buy another one, it is, of course, no longer appropriate for him to continue to hold that level of mortgage. It is absolutely absurd for the Labour party to believe that those receipts can be spent without increasing public spending and public borrowing.