§ 2.54 p.m.
§ The Question was as follows:
§ To ask Her Majesty's Government what action they propose to take to mitigate the damaging effect of the proposed cut in capital programmes for 1977–78 and 1978–79 upon the Voluntary Housing Movement, its employees and sub-contractors and the consequences for those now homeless or badly housed.
§ The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk)
My Lords, the Government regret the need to impose a substantial cut in the Housing Corporation programme, but the housing association movement unfortunately cannot be immune from the constraints which apply to all Government spending programmes. As my right honourable friend the Minister for Housing and Construction has today announced in another place, we are discussing with the Housing Corporation ways in which they might be able to raise private finance to mitigate the effect of the cuts and preserve their main priorities.
§ Lord HYLTON
My Lords, while thanking the noble Baroness for that slightly hopeful Answer, may I ask 29 whether the Government accept that housing associations very often provide the only hope for people who are living in the worst conditions in the twilight areas of the big cities? Secondly, may I ask whether the Government are aware that if a very serious capital cut is imposed a great deal of the voluntary effort which is put into housing associations, and also voluntary funds, will simply become redundant? Finally, in view of the fact that it is not possible to cancel tenders which have been accepted, may I ask whether the Government agree that the savings will have to come out of purchases of land and houses for future programmes? If that is so—and I think it is—there will be a multiplier effect as a result of these cuts, not only in these two years but in the future programmes.
§ Baroness BIRK
My Lords, first may I say that I do not think that the noble Lord needs to qualify "hopeful" with the word "slightly". The situation is extremely hopeful. What the Government are now doing was found to be very acceptable at the meeting of the Housing Corporation Board which took place this week. If private loan finance can be made available, the reduction in the Housing Corporation's forward programme may be as little as 15 per cent. No cut has been made in that part of the housing association programme which is funded by local authorities. Therefore the noble Lord is correct in saying that if the cut were to stand as it does at the moment it would affect the new schemes, some of which would have to be cancelled. The cut nevertheless amounts to only about 17 per cent., which is similar to the proportion of cuts in the case of new towns; and it is certainly far less than the municipalisation cut of £50 million out of £110 million. The hopeful point is that negotiations are taking place at the moment and that the Treasury has agreed in principle that the Housing Corporation can guarantee £50 million of private finance, which is to be spread over two years in this way.
As to the point that the noble Lord raised about discouraging charitable donations, I do not believe that this will happen. If these negotiations over private loans are successful, as we hope they will be, although the programme will be modestly trimmed by about 15 per cent.
30 there will be plenty of opportunities for charitable organisations to donate money for extra amenities, about which I know the noble Lord is very concerned. I am not sure whether there is a third limb to the noble Lord's supplementary question or whether I have covered everything.
My Lords, I hope that the somewhat cheerful speech of the noble Baroness is borne out in practice. I can testify to the fact that a cold chill has gone through the whole of the Voluntary Housing Movement. They feel that they have been singled out for especially severe treatment. The noble Baroness has made a number of points which deserve careful study, and I hope that she is right in saying that the picture is a little better than we thought it was.
§ Baroness BIRK
My Lords, I do not think that I should say it all over again for a third time, but I believe I am right in saying that these negotiations are taking place and that the proof of the pudding is that the Board of the Housing Corporation, meeting this week, were very happy with the way matters were progressing.
§ Lord NORTHFIELD
My Lords, will my noble friend allow me to offer a very warm welcome to the announcement she has made this afternoon about the possibility of there being private money available to help the Housing Corporation through this difficulty? This might be a considerable breakthrough and a great help. Does my noble friend realise that this announcement may be very welcome to the new towns which have had to lose Housing Corporation activities but which might now find that they are to be restored, thus giving us variation in the tenure of houses which we greatly welcome and which we should like to be extended?
§ Baroness BIRK
My Lords, I thank my noble friend for making those points so succinctly. I am glad that at last somebody has welcomed some good news.
§ Lord AVEBURY
My Lords, does the noble Baroness agree that the voluntary housing associations are doing a magnificent job in renovating older properties at a cost which is substantially lower than that which is involved in providing new 31 dwellings? Will the noble Baroness therefore use every influence to ensure that whatever funds are available they are applied for the renovation of older properties, and will she look in particular at the case of Lambeth where the voluntary housing association has offered to renovate some houses which are proposed to be demolished by the local authority?
§ Baroness BIRK
My Lords, so far as the rehabilitation of old property is concerned, the noble Lord does not need to persuade me of that because I am conscious of it and work hard on it in all fields. With regard to the particular case he mentioned, I should like to go into it and write to him.
§ The Earl of KINNOULL
My Lords, how is the noble Baroness able to modify her splendid socialist principles in order to welcome the advance of £50 million of private money for the housing scheme?
§ Baroness BIRK
My Lords, the noble Earl really must be joking! Is he really suggesting that in a mixed economy we should not work together in this way? I have the feeling that today bad news is uppermost in the minds of noble Lords.
My Lords, are the Government aware that the whole housing programme will continue to be in the doldrums until the Government cease pre-empting the entire savings of the nation at usurers' rates and allow the price of money to fall?