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House of Lords

Monday, 9th June 1997.

The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.

Prayers--Read by the Lord Bishop of Lincoln.

Several Lords--Took the Oath.

Local Authorities: Release of Capital Receipts

Lord Dean of Beswick asked Her Majesty's Government:

    When the £5 billion capital receipts of local authorities will be made available to them, and whether they will discuss with the local authorities the phasing of the release of this money, both to assist the building of new housing units and to reduce unemployment in the building sector.

The Parliamentary Under-Secretary of State, Department for the Environment and Transport (Baroness Hayman): My Lords, the Local Government (Supplementary Credit Approvals) Bill lays the basis for the Government's capital receipts initiative. The Government will ensure that any resources released are available to local authorities to use in support of priority schemes which represent good value for money and meet key objectives. These objectives will be set out in a consultation document which will be available shortly and will be sent to the local government associations, local authorities in England and to other interested parties.

Lord Dean of Beswick: My Lords, I am grateful to the Minister for that Answer. Is the noble Baroness aware that it satisfies some in your Lordships' House from all round the Chamber, including myself, who persistently pressed the previous Government to put such a policy into operation to enable local authorities to provide more housing for rent? Is the Minister aware that had the previous Government continued with the policy that they inherited there would have been approximately 600,000 more houses available today to let to people who are in trouble and who need low cost rented housing that is usually provided by local authorities?

Baroness Hayman: My Lords, I am well aware of my noble friend's longstanding concern in this area which is shared by many local authority associations and individual local authorities. We are anxious to reverse a policy which caused great damage both to the construction industry and to the interests of people in this country who are living in inadequate housing.

Viscount St. Davids: My Lords, what are the implications for the public sector borrowing requirement of the release of these funds?

Baroness Hayman: My Lords, we have always recognised that these plans had public expenditure

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implications. We are committed to the phased release of capital receipts from council house sales, and equally to prudent economic management.

Lord Barnett: My Lords, will my noble friend clarify that reply? Is she saying that the Treasury has approved this measure and that it will not count against the public sector borrowing requirement, or that it will and the phasing will mean there will be only a small amount each year for many years?

Baroness Hayman: My Lords, the phasing is one of the issues on which we shall consult.

Noble Lords: Oh!

Baroness Hayman: My Lords, I am glad to have thrilled those on the Opposition Benches. I point out to my noble friend that the manifesto commitment clearly indicated that there were public expenditure implications and therefore we would have to consider the phasing of the release of these assets. I remind my noble friend that the manifesto commitment stated that,

    "capital receipts from the sale of council houses received but not spent by local councils will be reinvested in building new houses and rehabilitating old ones. This will be phased to match the capacity of the building industry and to meet the requirements of sound economic management".

Lord Ezra: My Lords, will the noble Baroness kindly confirm that when the funds are released a due proportion will be made available for the improvement of existing housing stock because at least 10 per cent. of it is in urgent need of repair? There is no way in which new houses can be found to replace these old and inadequate houses.

Baroness Hayman: My Lords, I very much take the noble Lord's point. We have to consider the priority areas for spending which will certainly include plans for badly needed repairs to dilapidated stock.

Lord Bruce of Donington: My Lords, will my noble friend confirm that the effect of this step on the public sector borrowing requirement in the immediate future will be nil; and that it will take some little time for the expenditure on wages and various other factors of cost to filter through in detail to the consumer market, by which time unemployment will have been reduced and there will be further taxation revenues exactly because of the Government's new steps?

Baroness Hayman: My Lords, my noble friend is absolutely right to point out that there is an important additional benefit as well as the housing benefit involved in the proposal; namely, it can feed into our strategy to reduce unemployment and to get a skilled workforce back to work, which in turn will generate receipts in terms of income taxation.

Lord Skelmersdale: My Lords, can the Government explain how they can solve the basic conundrum that in general those local authorities with the most capital receipts have the least need for housing?

Baroness Hayman: My Lords, it is a conundrum, but we believe that it is possible to solve it by having a

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balanced strategy which looks at both the areas where the receipts have been generated and those with the most housing need and balances the two demands.

Lord Stoddart of Swindon: My Lords, is my noble friend aware that she should not take lectures from the wastrels opposite about public expenditure bearing in mind that the expenditure on housing will be highly desirable expenditure whereas the party opposite used thousands of millions of pounds to no good use, not least on the BSE crisis which they brought about themselves?

Baroness Hayman: My Lords, I shall certainly note my noble friend's advice. I am sure that I can have plenty of lectures from this side of the House before I need to listen to that side.

Lord Bowness: My Lords, perhaps I may return to the problem to which the noble Lord, Lord Skelmersdale, referred. How do the Government propose to overcome the problem that in general where there is the greatest need there are the least receipts and vice versa? Will the Minister confirm that her balanced strategy does not involve taking away receipts from those authorities which have generated them? In some instances the spending of those accumulated receipts will reduce the authority's income by the interest lost. If that happens, does she envisage that it will lead either to higher council tax or to greater levels of government grant to those authorities?

Baroness Hayman: My Lords, we do not envisage that we shall be talking about greater levels of council tax. If noble Lords will consider the proposed enabling Bill, the mechanism is through supplementary credit approvals. They will allow us to make exactly those rational decisions about distribution between areas where the receipts were generated and those with the greatest need for housing.

Lord Dean of Beswick: My Lords, I am rather surprised that the noble Viscount, Lord St. Davids, asked the Minister to explain what effect the proposal would have on the public sector borrowing requirement. When I asked the noble Viscount a similar question from the other side, he could never answer it.

Baroness Hayman: My Lords, I am not sure that I should intervene in private grief.

Lord Hayhoe: My Lords, will the Minister reply to the specific question asked by the noble Lord, Lord Barnett, about whether there was Treasury approval for this change; and if so, for how much?

Baroness Hayman: My Lords, if noble Lords opposite think that the Chancellor of the Exchequer was not aware of what was in the Labour Party manifesto, they are deceiving themselves. The exact scale and timing of the expenditure has yet to be settled. In advance of that settlement, I am unable to give the precise figure to the noble Lord.

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Quota-Hopping: IGC Discussions

2.46 p.m.

Lord Lucas: My Lords, on behalf of my noble friend Lord Pearson of Rannoch, I beg leave to ask the Question standing in his name on the Order Paper.

The Question was as follows:

    To ask Her Majesty's Government what they hope to achieve at the Intergovernmental Conference with regard to quota-hopping under the common fisheries policy.

The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, under the previous Administration, the number of quota hoppers in the UK fleet rose to 160 vessels. The last Government tabled a protocol for discussion at the Intergovernmental Conference. That proposal has met with no support from other member states. Moreover, it would not have provided any quick solution, nor removed any quota hoppers from the UK registers. This Government attach great importance to achieving progress on this issue. We are striving to secure the best possible deal before the conclusion of the IGC. This includes provision for economic links between those who use our national quota and our local fishing communities.

Although quota-hopping has attracted a lot of public attention in the run-up to the IGC negotiations, it is only one of the problems facing the UK fishing industry. We need to work with our industry, the Commission and other member states to build a long-term future for the fishing industry which both conserves fish stocks and meets the interests of the fishing communities. This Government are committed to a thorough overhaul of the common fisheries policy.

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