§ Dr. Lynne JonesTo ask the Chancellor of the Exchequer if he will set out his reasons for his decision to allow local authorities to reinvest most proceeds of asset sales and his reasons for continuing to limit reinvestment of the proceeds of council housing and associated land. [51759]
§ Mrs. Liddell[holding answer 21 July 1998]: The Government want to encourage local authorities to sell surplus assets to help pay for new investment. Allowing reinvestment of most of the proceeds of non-housing assets provides authorities with the right incentives to identify and dispose of such assets. However, sales of housing assets mainly arise as a result of tenants exercising the Right to Buy, not because of active asset management by Councils, and produce substantial proceeds which do not accrue in a pattern that reflects need to spend. Because this is a national scheme, we have to have regard to the capacity of the economy and of the construction industry to cope with substantial levels of reinvestment, and to bear in mind the distributional impact. For all these reasons, we will continue to limit reinvestment of new Council housing sale proceeds.