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Lord Dixon: Yes, my Lords, and it will stand for many years to come.

5.42 p.m.

Baroness Hayman: My Lords, it has been an interesting debate, even though a brief one. As the noble Lord, Lord Lucas, said, it was enlivened by two excellent maiden speeches. I rather guessed the contributions that would be made by my noble friends Lord Dixon and Lord Lofthouse of Pontefract. I did not quite anticipate the trenchancy of those contributions, nor the wonderful vision of the tug-of-war contest that was evoked. My noble friend needs no lectures from the noble Lord, Lord Lucas, about exercising his judgment in regard to speaking his mind on government policies. I felt that the support he gave to this initiative was wholehearted, and greatly welcomed from the Front Bench. They were two outstanding speeches, showing clearly to those of us in this House the value of being rooted in experience of local and national politics and of the building trade, if I can put it in that way. The contributions that will be made by both my noble friends in the future will be looked forward to from all sides of the House.

It has been an interesting debate and one in which we were accused of over-caution, on the one side, and of flying under a flag of convenience, not speaking our mind or explaining what we were doing, on the other. I should like to try to deal with both of those criticisms.

The noble Baroness, Lady Hamwee, talked about first tottering steps. I would rather take tottering steps and stay on my feet than take large strides and fall flat on my face. We have always recognised that this is a limited beginning after many years of frustration, which I well understand, among local authorities.

My noble friend Lord Dixon asked whether we would be taking into account the pre-1990 receipts that were generated. I have to tell him in all frankness that that will not be possible. We have a large challenge in dealing with the receipts generated post-1990 under the present financial regime for capital receipts. We simply cannot put the clock back for £23 billion of expenditure. But we do intend to start now in putting the clock forward and reinvigorating the contribution that government can make to the housing needs that were so clearly explained by my noble friend Lord Dean, the two maiden speakers and the noble Baroness, Lady Hamwee. It is a start; it is a limited start, but one that we believe is nonetheless valuable.

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The main criticism focused once again on the mechanism that is being used and why we have not simply released capital receipts. I reiterate what I said in my opening remarks and what the noble Lord, Lord Bowness, acknowledged in his speech. Were we simply to release receipts where they lie, that would not ensure that the badly needed resources were available where they were most needed. That is for two reasons. One is that receipts were not always generated in areas of highest need; the other is that different regimes for dealing with the set-aside receipts are employed by different local authorities. It would be quite wrong and arbitrary not to take into account housing need and what has been generated rather than what is now in the coffers in terms of this initiative.

I was asked by the noble Lord, Lord Bowness, and by the noble Baroness, Lady Hamwee, about non-housing receipts and their treatment. They came at the question from slightly different viewpoints. From the noble Baroness there was a plea for greater release for a wider range of projects, as I understand it. From the noble Lord, Lord Bowness, there was the suspicion that we were not being completely frank and were somehow hiding a non-housing need, a non-housing plan under a housing Bill. Perhaps I may make the position quite clear.

It is our specific objective in the first instance and in this measure to facilitate a capital receipts initiative for housing and housing associated regeneration projects. In that context it is right that we should take into account housing receipts in terms of the money generated. However, the Bill would also be available to facilitate the release of additional resources related to set-aside of non-housing receipts. We believe that that is right and proper. We should not in this Bill limit the Government's capacity to launch further non-housing initiatives in future years.

Perhaps at this point I may reassure the noble Baroness, Lady Hamwee, that we are anxious that issues such as energy efficiency which come completely within the broad ambit of government policies should be facilitated by this measure. We would certainly encourage local authorities to do that.

The other main issue raised in the debate was the relationship between local and central government: whether we were being too didactic and too prescriptive. I say to the noble Lord, Lord Bowness, that the concept of partnership between government at local and national level is something that we have lost over past years. The view has grown up through the experience of the past 18 years that there must either be prescription and central control or total local autonomy; there is no way of bringing those two together. We reject that attitude. It is imperative if we are to achieve what are demanding targets and ambitions under difficult and restrained circumstances that we have a concerted effort. We are trying to set out clearly what are the overall national priorities for this receipt which is national public expenditure that is being generated.

Lord Dean of Beswick: My Lords, I am glad that the Minister has raised that point because it was ever thus before when the huge housebuilding programmes were under way. It was a partnership between national

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government and local government. The housing investment programme was carried out on that basis. Local authorities did not get everything they wanted but things were done on an acceptable basis. There was always the fallback position that, through the operation of the housing investment programme, the government could stop a local authority doing something silly.

Baroness Hayman: My Lords, I am grateful to my noble friend for that helpful contribution. It is important to recognise that there is a national framework for this programme but that we are being open and are consulting local authorities both about issues like phasing and also about allowing them to set their own priorities in relation to their local need, whether it is a regeneration programme or a new-build programme or whether it is renovation of properties or energy efficiency measures. We are interested in allowing them scope to do that. However, it is important--and it is a responsibility of government--to monitor the effectiveness of that programme, to see how public money is spent and to disseminate good practice. There is a good deal of scope for that as well.

I was slightly surprised that the noble Lord, Lord Bowness, was so concerned about the role of the Audit Commission. I believe that the Audit Commission has a valuable function to fulfil here. Certainly, my experience in the NHS is that the Audit Commission has not in the past confined itself only to accounting matters. It has carried out value-for-money studies that are comparative and those have proved extremely important both in making all of us within that service question what we were doing and also in terms of being able to disseminate good practice.

We recognise that this is a limited measure. We recognise and have always been clear that it has effects on the public sector borrowing requirement. Those effects were made clear in the Chancellor of the Exchequer's Budget. I understand the point that was made by noble Lords about planning ahead and certainty. We tried to cover that at least in terms of giving both the 1997-98 and 1998-99 figures in the Budget.

Noble Lords participating in the debate asked about new receipts. I understand their interest, because we are creating a new stream of capital receipts even now. Straightforward release would give us exactly the same problems as have led to us using this mechanism of supplementary credit approvals, because they are not necessarily being generated in the areas of most housing need. However, we will be continuing to monitor the level of receipts and the extent to which these offset new expenditure by authorities. We shall be looking closely at the function and the future of existing set-aside rules during the comprehensive spending review.

Perhaps I may respond to one further point. If I have missed out other points I shall certainly write to those noble Lords who have contributed. I was asked how housing need is to be assessed. The consultation paper makes it clear that need will be

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measured by the generalised needs index. I understand the reservations that were expressed about that, but it is the measure already employed to distribute housing capital resources to authorities. In order to get the proposal up and running for this year we have had to take some fairly clear, already definable criteria and implement them. But we are willing and we are publishing the consultation document in order to be able to listen to what people have to say. Nothing is ever perfect. I would not suggest that this year's programme will be the best. I hope it will be better next year and better the year after that. However, we can improve it by listening to constructive contributions from local authorities and from others who comment on the paper.

I do not believe we have been dodging our manifesto commitments in introducing the Bill. I believe we have been fulfilling them in responsible and sensible ways. In the manifesto we stated that we would be reinvesting in building new homes and rehabilitating old ones. On 13th May the Municipal Journal described the Bill as,

    "an important, practical and symbolic measure which signals the new administration's commitment to economic development and job creation and recognises the strategic local authority role in developing partnerships with the private sector and housing associations for the provision of social housing".

For too long social housing was a Cinderella service under the previous administration. My noble friend Lord Dean referred to targets. I betray my age if I say that I remember when a Tory Prime Minister was aiming for 500,000 homes a year in terms of fulfilling responsibilities. We take our responsibilities about housing very seriously. This country used to take a pride in its council housing. Good quality homes were there for those who needed them, giving them a base from which to work and support their families. Those homes have been allowed to decline--in some cases so badly that no one can now live in them--so vulnerable families have to live in small flats while perfectly adequate houses go to rack and ruin. It is wasteful in terms of people's lives and wasteful financially and it is the cause of great social concern.

The capital receipts initiative will not, as I have said before--we are clear about this and do not pretend otherwise--at one stroke reverse all the years of decline. It will not solve all the housing problems that are out there. But it is a start. I am pleased that this is the first piece of legislation over which the noble Lord, Lord Bowness, and I have crossed swords. I congratulate him on his responsibilities, as he was kind enough to congratulate me. It is the commitment to housing and to the social problems that are engendered by bad housing that will underline much of the policy that I shall be putting forward on behalf of my department. Our priority for making use of the new power provided in the Bill is to issue resources under this initiative, taking account both of the receipts that were set aside from the sale of council houses and the housing need of various areas. I commend the Bill to the House.

On Question, Bill read a second time, and committed to a Committee of the Whole House.

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