HC Deb 03 June 1997 vol 295 cc170-3
3. Mr. Hanson

To ask the Secretary of State for the Environment, Transport and the Regions what representations he has received from local authorities regarding the phased release of council house sale receipts. [446]

4. Mr. Rammell

To ask the Secretary of State for the Environment, Transport and the Regions if he will make a statement on his proposals to release the capital receipts from the sale of council houses. [447]

5. Mr. Hutton

To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to release capital receipts for housing. [448]

Mr. Prescott

The Local Government (Supplementary Credit Approvals) Bill lays the basis for the Government's capital receipts initiative. The Bill itself is simply an enabling measure that provides for previously set aside capital receipts to be taken into account when supplementary credit approvals are issued. A consultation document, which will be available shortly, will set out our detailed implementation proposals. We will be considering all representations received during that consultation exercise very carefully. A number of local authorities, however, have already written expressing their support for the initiative.

Mr. Hanson

I congratulate my right hon. Friend on both his appointment and his Bill. Many local authorities will welcome the Bill, as it will give them an opportunity to build houses for rent, to modernise old housing stock and to provide many building workers with real jobs in the community to help to alleviate unemployment. Can my right hon. Friend say how many housing starts he expects in the forthcoming terms of the Labour Government, so that we may compare the Labour Government's record of success with the abject failure of the Conservative Government?

Mr. Prescott

I am grateful to my hon. Friend for his remarks. I assure him that those idle resources can now be used effectively to put people to work and to build houses for those in the community. The measure of the success of that, in terms of both housing and putting people to work, will soon be clearly evident to all who study the position. The amount of resources that will be available—phased in over a period—will be determined in the Budget, and we must therefore wait for the Budget.

Mr. Rammell

I thank my right hon. Friend for his announcement about capital receipts, which is long overdue. People in my constituency, Harlow, have been waiting for 18 years to hear it. I know from experience in my constituency—and, indeed, from work undertaken recently by the School for Advanced Urban Studies and the Joseph Rowntree Foundation—that people are more likely to remain unemployed, particularly young people, if they are trained only up to NVQ2 level. To get secure long-term employment, training to at least NVQ3 level is necessary. Will the Secretary of State ensure that the release of council receipts will be tied in some way to training provision and NVQ qualifications so that people in my constituency and elsewhere will get the benefit not only of new and renovated homes but of an important step along the road of the Government's programme for welfare into work?

Madam Speaker

The best questions are the very short ones.

Mr. Prescott

My hon. Friend makes an important point which will condition the phasing of the resources. The shortage of skills in the building industry requires to be addressed. We are short of every kind of skill, and that is the legacy of 18 years of Tory government. I assure my hon. Friend that the money will provide not only jobs and homes but will be used to train our people in the proper skills so that they can contribute to providing jobs.

Mr. Hutton

I also warmly congratulate my right hon. Friend on his appointment. Does he agree that his answers have confirmed the importance that we attach to improving our social housing sector? They will be a welcome boost to the building industry in my constituency and good news for the thousands of families in the Furness area who live in local authority homes.

Mr. Prescott

They will be good news, and I agree with a great deal of what my hon. Friend says. Releasing such resources gives the Government a great opportunity to make changes in various areas. Those changes may be to the quality of houses or to the quality of production in the industry. They will also make a difference to the number of people who are available for training in building industries. The opportunity provided for the industry is that we will be able to guarantee resources over a longer time than the industry would normally expect for its housing programme. That will give a firm start to a good programme for houses and jobs.

Mr. Jack

Can the Secretary of State confirm that the use of capital receipts will represent an increase in public expenditure on current published totals? What will be the effect of their use on the public sector borrowing requirement?

Mr. Prescott

I think that that was supplementary question No.2 in the document that was given to Conservative Back Benchers. [Interruption.] Clearly, the use of those receipts will lead to an increase in public expenditure, and we shall have close discussions with my right hon. Friend the Chancellor of the Exchequer on that matter. Make no mistake about it: we fought an election on the receipts being released to improve housing. That will happen, and in five years the public will judge us not only on public expenditure but on decent housing and on getting people back to work. Those are our criteria.

Mr. William Ross

The right hon. Gentleman will be aware that the Bill that he mentioned is a Great Britain Bill rather than a United Kingdom one. There is also a housing problem in Northern Ireland, especially about repairs. What discussions has he initiated with the Secretary of State for Northern Ireland to ensure that the benefits that will flow from that Bill are also applied in the Province?

Mr. Prescott

Capital receipts in Wales, for example, will be dealt with by the Secretary of State for Wales. They are dealt with differently in Scotland where there will be separate discussions between the Secretary of State for Scotland and the Chancellor of the Exchequer. I am sure that my right hon. Friend the Secretary of State for Northern Ireland will also conduct such discussions with the Chancellor.

Mr. Maples

The right hon. Gentleman describes the receipts as idle resources. Does he agree that they generate interest which helps to defray interest on outstanding local government loans or, alternatively, help to reduce council tax? If they are spent, the inevitable consequence of the loss of interest is that tax will go up.

Mr. Prescott

Those are the matters of concern which we are discussing with the Chancellor. The constant concerns of Conservative Members are interest payments and money. We are concerned about jobs and houses, and that is the fundamental difference between us.

Mr. Levitt

Is my right hon. Friend aware that the phased release of capital receipts from the sale of council houses will be welcomed throughout the country, not just for the reasons given, but because it will give local authorities the opportunity to refurbish housing stock that has design deficiencies and that, in many cases, has been waiting far too many years for refurbishment? There are examples of that in my constituency. I am sure that councils would also welcome clarification on whether the rules on the spending of those receipts apply in the same way to accumulated receipts as to future receipts.

Mr. Prescott

Like many hon. Members, I have buildings in my constituency that have not been constructed to proper standards and cause great problems. It causes great offence to our constituents when we tell them that we cannot do anything, despite money being available in the accounts. We intend to release it so that we can say to our constituents, "The resources are there. We will put unemployed building workers to work to provide you with housing and refurbishment." This is about quality housing and that is what we intend to have.

Mr. Gummer

May I ask the right hon. Gentleman about future receipts? Will a proportion of the receipts have to be set aside by local authorities, or will they be able to spend them?

Mr. Prescott

Again, the amounts of money that are available to local authorities to spend will be in our proposals on the phased release. It will be depend on those discussions. The amount available in total per year will be divided accordingly. We will make those decisions in good time and inform hon. Members in good time, when we produce the Bill.