HL Deb 17 November 1992 vol 540 cc528-30

2.47 p.m.

Lord Jay asked Her Majesty's Government:

Whether, in view of their policy for growth, they will ease the restrictions on the use of capital receipts by local authorities for the building of new homes to let.

The Parliamentary Under-Secretary of State, Department of the Environment (Lord Strathclyde)

Yes, my Lords. As from 13th November 1992 to 31st December 1993 local authorities will be able to spend 100 per cent. of their receipts on most capital receipts programmes.

Lord Jay

My Lords, will the Minister assure me that the Government will give an equally prompt response to any further suggestions I may make regarding changes in government policy? In this case, however, is it not rather a pity that this concession has been hedged around with so many absurd restrictions as greatly to reduce its practical value?

Lord Strathclyde

My Lords, I think the noble Lord is being less than charitable to the announcement that my right honourable friend the Chancellor of the Exchequer made last week. We believe that the announcement will have a substantial effect on the building and construction industry and that it will be worth some £1.85 billion during the course of the next 14 months.

Lord Dean of Beswick

My Lords, is the Minister not aware that the Chancellor, in the way he has jigged this so-called benefit, has been less than charitable to those trying to build houses for people who are endeavouring to leave the homeless queues? Is the Minister aware that at the present cost of building a house, and with a 60 per cent. discount, for example, on the sale of each council house, five or six council houses will have to be sold to build one new property? Why is the Chancellor being so mulish and obstinate in not unlocking immediately some of the substantial sums of money held by local authorities? It amounts, I believe, to £5 billion. There is no guarantee whatever that the sum of money that the Minister has just indicated should be available will be available. The Government should unlock the money local authori-ties now have and let houses be built straight away. Let us stop messing about and playing with words.

Lord Strathclyde

My Lords, there is no reason why local authorities should build houses themselves. They can support housing associations that can build houses far more quickly than local government. Local authorities can, of course, spend the money on renovating and improving their housing stock which they have always maintained is a priority. The reason we are not releasing the money held by local authorities is because some local authorities have used that money to pay off debt. It would discriminate against those who have paid off debt to allow others who have not done so to spend that money now.

Lord Skelmersdale

My Lords, is it not a fact that for many years local authorities have been able to spend 100 per cent. of their capital receipts on building for re-sale? If they really want to help the construction industry in their areas why do they not do just that?

Lord Strathclyde

My Lords, that is correct. We want to see the money used as quickly as possible, which is why we consider that renovation will help the construction industry and further our plans for growth more rapidly than if local authorities were to build new houses.

Lord Dean of Beswick

My Lords, does the Minister not understand that, although many people consider it desirable, the policy of the sale of council houses has contributed adversely to the number of homeless people? Will the Minister stop talking about the rapidity with which housing associations can build properties? During the period of a Conservative Government, local authorities employing private sector companies and their own building departments were building 300,000 houses a year while the target for housing associations is, I believe, 68,000 properties a year. Will the Minister please listen to some sense and unlock some of the £5 million which local authorities have? There are builders in the private sector who have package deals ready and who are able to start building tomorrow. Let us get on with it.

Lord Strathclyde

My Lords, local authorities will now have that money. They can put plans which are on the table into effect immediately with the resources that they will be able to release.

Lord Swinfen

My Lords, will my noble friend confirm that even when council houses are sold that does not change the total number of houses in the country which are available for occupation? Does he agree that it does not really matter whether houses are in private or local authority ownership and that it is highly misleading to suggest that when council houses are sold they go out of the housing stock?

Lord Strathclyde

My Lords, my noble friend is quite correct.

Lord Dean of Beswick

My Lords, perhaps the noble Lord inferred that I meant that the sale of council houses was the reason why there are no houses available for rent. I said that that was a contributory factor. That was all that I said; I did not say that it was the only cause of the problem.

Lord Ezra

My Lords, in connection with the refurbishment and renovation of houses for which the noble Lord has indicated some of the funds could be used, does he agree that the need goes way beyond the sums we are now discussing? Will he indicate whether, once those resources have been exhausted, other measures will be introduced to make more funds available?

Lord Strathclyde

My Lords, we obviously keep under review the resources available for the improvement of housing. This is a once-and-for-all injection to be made available over the next few months to help local authorities release their receipts and spend 100 per cent. of those receipts on capital projects which they regard as most suitable.

Lord Gisborough

My Lords, in view of the large numbers of people who are homeless and on very low incomes, can my noble friend say what provision there is for providing houses for the lower paid who cannot afford the high prices?

Lord Strathclyde

My Lords, this will be a tremendous opportunity for the Housing Corporation to enter into partnership with central government and local authorities to provide more low-cost social housing.

Lord Brabazon of Tara

My Lords, does my noble friend agree that the sale of council houses is not the only means by which local authorities can obtain capital receipts to spend on new housing? Does he agree that they could consider selling some of their other assets, such as local authority airports? Does my noble friend agree that if they are serious about finding money to help solve the housing situation local authorities should consider doing that?

Lord Strathclyde

My Lords, my noble friend is very wise to bring to the attention of the House the fact that local authorities have huge resources in assets other than housing.

The Countess of Mar

My Lords, does the noble Lord agree that in order to produce income there have to be buyers who are ready to purchase what people are willing to sell? Is he not over-estimating the capital assets which councils will accumulate in view of the present state of the market? Does he not agree that many people have had their fingers burnt with mortgages and will not take them on lightly?

Lord Strathclyde

My Lords, we believe that there is money in the economy. With the reduction in interest rates and the renewal of confidence following last week's announcement, I think that it is very likely that local authorities will be able to divest themselves of their assets.

The Viscount of Oxfuird

My Lords, can my noble friend tell the House the amount of additional resources which it is estimated will be available in 1992–93?

Lord Strathclyde

My Lords, we expect more than £1 billion of additional expenditure in 1992–93.