§ Sir Wyn RobertsTo ask the Secretary of State for Wales what are his proposals for changing the arrangements for paying tax relief grant to Welsh housing associations; and if he will make a statement. [10460]
§ Mr. Jonathan EvansThe Department received 11 responses in August following the publication of our consultation paper "Proposals for Changes to the Tax Relief Grant Arrangements for Housing Associations in Wales". Most respondents called for more time to plan for withdrawal of the grant and for greater certainty about future rates of payment and some also saw advantages in gearing transitional assistance towards smaller housing associations.
I am pleased to respond to these concerns by setting out our intentions for future years with payments being set on a sliding scale. In 1997–98, claims will be met in full as originally proposed; in 1998–99, we plan to pay 75 per cent. of the first £50,000 of eligible claims, and 50 per cent of the rest; and in 1999–2000, we plan to pay 50 per cent. of the first £25,000 of eligible claims, and 25 per cent. of the rest.
The Government do not believe that continued expenditure on tax relief grant represents the most 621W effective way of using the finite resources that are available to meet social housing need. We therefore remain committed to its abolition when an appropriate legislative opportunity arises. In the meantime, although the statutory discretion to pay tax relief grant will remain, the Government would normally expect that, following the planned reductions outlined, associations will plan to manage without tax relief grant payments.
A list of respondents to the consultation paper has been placed in the Library of the House, and this contains a contact point in the Welsh Office for copies of individual responses.