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Baroness Hayman: As the noble Lord says, the new clause would impose a statutory requirement on Ministers to publicise the effect on the PSBR of decisions on amounts of supplementary credit approvals issued in any one year.

The effect of the Bill on the public sector borrowing requirement is an issue to which noble Lords opposite have returned on many occasions. I would not have mentioned it myself but for the fact that the noble Lord, Lord Bowness, referred to his paranoia. I suggest that in this area they are perhaps over-concerned that there has been some sort of conspiracy about the clear admission

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from this side of the House that there are effects on public expenditure of issuing supplementary credit approvals for the capital receipts initiative.

Although the noble Lord tempts me to do so, I do not think it would be appropriate under this clause to set out once again the reasons for choosing the route for supplementary credit approvals in order to fund this initiative. It was made clear in the debate at Second Reading why this mechanism was being used. As the noble Lord said, the amounts have been made clear: £174 million for this year; £610 million in 1998-99. The effect that this would have on individual local authorities was also made absolutely transparent in the consultation document on the scheme issued during the summer.

We have always been completely open in saying that these credit approvals will increase public expenditure; but I do not think that we should go on to say that that suggests a necessity to publish a report. We have also promised that the funding of the initiative will be handled to be consistent with our well-known commitment to prudent economic management and ensuring best value. It is not clear how issuing an annual report on this scheme--if that is what the noble Lord envisages--rather than on supplementary credit approvals as a whole would add to that commitment.

In making any decisions on public spending, prudent governments--and this Government are absolutely determined to be prudent in their economic management--will always have in mind the effect on public sector borrowing. We are, as the noble Lord, Lord Bowness, said, much in favour of openness in government and have no objection to publicising the basis of our decisions on allocations under the capital receipts initiative. We have been very clear about the circumstances in which we will make receipts available and the balance that will be struck between the authorities in housing need and those having housing receipts. I do not see that a requirement that spending decisions by government should include a statutory obligation to publish results would add anything to what is already clear, explicit and transparent. What it would add to is the administrative burden on local government. I do not believe that the benefits could in any way justify that burden. As with any other spending programme--and the noble Lord, Lord Bowness, is quite right to point out that this is a spending programme--it will be reflected in the department's published spending plans, and the impact of each department's public spending will be reflected in the public accounts.

The proposed new clause is also unclear as to whether it is intended to relate only to supplementary credit approvals issued in connection with our capital receipts initiative--which is what the Bill is about--or all supplementary credit approvals. If it is meant to refer to all areas of capital expenditure, it is outside the scope of the Bill and would, besides, add time-consuming and we believe quite unnecessary burdens on local authorities and on the department in publishing information.

I suggest to the Committee that there is no need for this provision. We have been clear about the impact of our initiative on public finances; we have been explicit

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and transparent about the sums of money involved; the Chancellor will make clear in Budget statements and in the accounts published afterwards the public sector borrowing requirement; and we shall continue to adhere to prudent economic and accounting disciplines. In the light of that, I urge the noble Lord to withdraw the amendment.

Baroness Hamwee: My problems with this amendment are in large part to do with my difficulty in accepting that capital expenditure should be treated as part of the public sector borrowing requirement. But that is a whole other debate--one which your Lordships' Select Committee on central and local government relations referred to as a Humpty-Dumpty argument: "It is so because we say it is so". I shall not pursue that now.

However, perhaps I may take this opportunity to ask the Minister whether she is able to expand on the references to monitoring in the guidance recently issued. Paragraphs 40 and 41 of the guidance explain that the Government are--quite rightly--concerned to ensure that resources released are used "wisely and well". The paragraphs do not suggest mechanisms for reporting back to local authorities on the Government's own monitoring. Given that the scheme appears in general terms to propose that future releases of receipts will depend on how previous releases are used, I hope that the Minister can give an assurance about a continuing dialogue and partnership with local government in that monitoring exercise.

Baroness Hayman: I am happy to give that assurance in general terms to the noble Baroness. As she points out, it is important that we monitor the effectiveness and value for money of receipts that are approved and that, as we forge future policies, we can look back to see what has been successful and encourage that. A good precedent was set during the summer by the consultation document and the extremely constructive response of local authorities to it. I hope that that sort of partnership in terms of monitoring the effect of the release of supplementary credit approvals and their effectiveness will be something that in the new climate of relationship with local government can inform policy-making for the future.

Lord Bowness: The noble Baroness, Lady Hamwee, quoted the Humpty-Dumpty argument: "It is so because we say it is so". I feel that that is to some extent the position of the Government on this Bill: "This is about the release of capital receipts because we say it is about the release of capital receipts". In fact, it is about borrowing, and I believe that that needs to be repeated long and often.

At Second Reading I said that I understood that in many instances local government would understandably want to have the opportunity to spend the proceeds of some of its released assets. However, that in no way takes away from the responsibility of government in going into this new area--as they are by virtue of this Bill--without our knowing where it will all end. At the moment it is housing receipts that are concerned, but the

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Bill leaves it open for all receipts to be used in the future. We do not know when that will be or in what circumstances the Government will think that right. The amounts involved are modest at the beginning but might not be modest in future years. As the Minister agreed, the Government want to be open in all their dealings and prudent in their economic management. If they are looking to release the considerable sums held by local government in the form of unapplied receipts through additional borrowing, which will have a considerable consequence on the public sector borrowing requirement, I cannot understand why they cannot accede to the amendment. It would in no way affect the Government's wishes or the intent of the Bill. I am sorry that the Minister cannot accept the amendment and I ask for the opinion of the House on it.

Baroness Hayman: I respect the noble Lord's right to test the opinion of the Chamber. However, I should like to say that the Bill is not about borrowing; it is about improving housing for some of the people most in need of it in this country.

Front Bench Members opposite spoke of mechanisms and processes but have not welcomed the fact that we are beginning to address the years of under-investment in homes for people who need them. I refer to the homes which are ill-insulated and badly heated and which give rise to ill health and to all the other problems that surround ghetto estates and poor housing in some of the most deprived local authority areas. That is what the Bill is concerned with. If the mechanism allows us to take those aims forward, then the Committee should support it.

Lord Bowness: I thank the Minister for those additional comments. I understand what she says. However, it was stated in the other place and in this Chamber that, whether or not those ambitions would be met by the Bill, they would be achieved by the phased release of capital receipts. The Minister said that she did not want to go into those arguments today. But the fact is that those ambitions are not being achieved by the release of those receipts but by additional borrowing. In those circumstances, I maintain my position on the amendment.

4.31 p.m.

On Question, Whether the said amendment (No. 4 ) shall be agreed to?

Their Lordships divided: Contents, 99; Not-Contents, 125.

Division No. 2


Aberdare, L.
Addison, V.
Alexander of Tunis, E.
Anelay of St. Johns, B.
Beloff, L.
Biffen, L.
Birdwood, L.
Blatch, B.
Boardman, L.
Bowness, L.
Boyd-Carpenter, L.
Braine of Wheatley, L.
Bridgeman, V.
Brigstocke, B.
Broadbridge, L.
Brougham and Vaux, L.
Bruntisfield, L.
Butterworth, L.
Cadman, L.
Campbell of Alloway, L.
Campbell of Croy, L.
Carnegy of Lour, B.
Carnock, L.
Chesham, L.
Clark of Kempston, L.
Cochrane of Cults, L.
Courtown, E. [Teller.]
Cowdray, V.
Cox, B.
Craig of Radley, L.
Cullen of Ashbourne, L.
Cumberlege, B.
Davidson, V.
Dean of Harptree, L.
Denbigh, E.
Denton of Wakefield, B.
Dixon-Smith, L.
Elles, B.
Elliott of Morpeth, L.
Foley, L.
Fraser of Carmyllie, L.
Gisborough, L.
Goschen, V.
Gray of Contin, L.
Harding of Petherton, L.
Harmar-Nicholls, L.
Harrowby, E.
Hemphill, L.
Henley, L.
HolmPatrick, L.
Hooper, B.
Howe, E.
Kimball, L.
Lauderdale, E.
Liverpool, E.
Lucas, L.
Luke, L.
McColl of Dulwich, L.
Marlesford, L.
Merrivale, L.
Miller of Hendon, B.
Milverton, L.
Mottistone, L.
Mountevans, L.
Munster, E.
Murton of Lindisfarne, L.
Northesk, E.
O'Cathain, B.
Onslow, E.
Pender, L.
Pilkington of Oxenford, L.
Platt of Writtle, B.
Prior, L.
Rathcavan, L.
Rawlings, B.
Renton, L.
Renton of Mount Harry, L.
Rotherwick, L.
Sandford, L.
Seccombe, B.
Shaw of Northstead, L.
Simon of Glaisdale, L.
Skelmersdale, L.
Stewartby, L.
Stodart of Leaston, L.
Strange, B.
Strathclyde, L. [Teller.]
Strathcona and Mount Royal, L.
Sudeley, L.
Swinfen, L.
Taylor of Warwick, L.
Teviot, L.
Thomas of Gwydir, L.
Trefgarne, L.
Ullswater, V.
Vivian, L.
Waterford, M.
Wharton, B.
Wilcox, B.


Acton, L.
Addington, L.
Alderdice, L.
Allenby of Megiddo, V.
Ampthill, L.
Annan, L.
Archer of Sandwell, L.
Ashley of Stoke, L.
Avebury, L.
Barnett, L.
Berkeley, L.
Blackstone, B.
Blease, L.
Borrie, L.
Brightman, L.
Brooks of Tremorfa, L.
Bruce of Donington, L.
Callaghan of Cardiff, L.
Carlisle, E.
Carmichael of Kelvingrove, L.
Carter, L. [Teller.]
Castle of Blackburn, B.
Chandos, V.
Cledwyn of Penrhos, L.
Clinton-Davis, L.
Cocks of Hartcliffe, L.
Currie of Marylebone, L.
Dahrendorf, L.
Dean of Beswick, L.
Dean of Thornton-le-Fylde, B.
Diamond, L.
Dixon, L.
Donoughue, L.
Dormand of Easington, L.
Dubs, L.
Eatwell, L.
Elis-Thomas, L.
Evans of Parkside, L.
Ezra, L.
Farrington of Ribbleton, B.
Gallacher, L.
Geraint, L.
Gilbert, L.
Gladwin of Clee, L.
Gladwyn, L.
Gould of Potternewton, B.
Graham of Edmonton, L.
Greenway, L.
Gregson, L.
Grenfell, L.
Grey, E.
Hamwee, B.
Harris of Greenwich, L.
Haskel, L.
Hayman, B.
Healey, L.
Holme of Cheltenham, L.
Hooson, L.
Howell, L.
Howie of Troon, L.
Hoyle, L.
Hughes, L.
Hylton, L.
Inchyra, L.
Irvine of Lairg, L. [Lord Chancellor.]
Jay of Paddington, B.
Jenkins of Putney, L.
Johnston of Rockport, L.
Judd, L.
Kilbracken, L.
Kirkhill, L.
Lockwood, B.
Longford, E.
McCarthy, L.
McIntosh of Haringey, L. [Teller.]
Mackie of Benshie, L.
Mallalieu, B.
Merlyn-Rees, L.
Milner of Leeds, L.
Mishcon, L.
Molloy, L.
Monkswell, L.
Morris of Castle Morris, L.
Murray of Epping Forest, L.
Nicol, B.
Paul, L.
Plant of Highfield, L.
Ponsonby of Shulbrede, L.
Prys-Davies, L.
Ramsay of Cartvale, B.
Randall of St. Budeaux, L.
Redesdale, L.
Richard, L. [Lord Privy Seal.]
Robson of Kiddington, B.
Rochester, L.
St. John of Bletso, L.
Sandwich, E.
Sefton of Garston, L.
Serota, B.
Sewel, L.
Shepherd, L.
Shore of Stepney, L.
Simon, V.
Simon of Highbury, L.
Smith of Gilmorehill, B.
Stoddart of Swindon, L.
Stokes, L.
Strabolgi, L.
Symons of Vernham Dean, B.
Taylor of Blackburn, L.
Taylor of Gryfe, L.
Thomas of Gresford, L.
Thomas of Walliswood, B.
Thomson of Monifieth, L.
Thurso, V.
Tordoff, L.
Turner of Camden, B.
Wallace of Saltaire, L.
Wedderburn of Charlton, L.
Whitty, L.
Wigoder, L.
Williams of Crosby, B.
Williams of Elvel, L.
Williams of Mostyn, L.
Winston, L.

Resolved in the negative, and amendment disagreed to accordingly.

14 Oct 1997 : Column 411

Clause 3 agreed to.

House resumed: Bill reported without amendment.

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