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6.28 pm
Mr. Iain Coleman (Hammersmith and Fulham): Thank you, Mr. Deputy Speaker, for calling me to speak in this important debate. I congratulate my hon. Friends the Members for Bristol, West (Valerie Davey), for Bury, North (Mr. Chaytor), for Harrow, West (Mr. Thomas) and for Stretford and Urmston (Ms Hughes) and the hon. Members for Runnymede and Weybridge (Mr. Hammond) and for Taunton (Mrs. Ballard) on their interesting, intelligent and coherent maiden speeches.
I wish to place on record my thanks to the voters of Hammersmith and Fulham for electing me as the first Member of Parliament for the new constituency. My constituency is made up of the whole of the previous Fulham constituency and the five most southerly wards of what was previously the Hammersmith constituency. It has areas of considerable affluence and wealth, notably around the southern locations of the Fulham road and the New King's road, which are generously scattered with glitzy wine bars and expensive restaurants. However, there are also pockets of deprivation sitting beside this affluence which rank with anything anywhere in the United Kingdom.
It may come as a surprise to the House to learn that Hammersmith and Fulham is the 16th poorest borough in the United Kingdom, according to the former Department of the Environment's statistics. To demonstrate what that statistic means in practice, I shall cite some further facts that may also surprise some hon. Members.
In Hammersmith and Fulham, more than 35 per cent. of households are dependent on benefit; 38 per cent. of children have no parent who is working; 42 per cent. of pensioners have a serious long-term illness; 53 per cent. of primary school children are entitled to free school meals, which is twice the national average, and in south Fulham the figure is a staggering 75 per cent; and the death rate for males under 60 is more than 60 per cent. higher than the national average.
I have advised the House of those stark and disturbing statistics to nail the wide public perception that my inner-city constituency is a cosy London base for the chattering classes and City stockbrokers. The true picture is only too often one of a community bravely but desperately struggling against poverty, sickness, unemployment and deprivation.
I also wish to pay tribute to my hon. Friend the Member for Ealing, Acton and Shepherd's Bush (Mr. Soley). For 18 years before 1 May, my hon. Friend represented in the House those residents living in the five wards I mentioned which were in the southerly part of the old Hammersmith constituency. During those years, my hon. Friend justly earned a reputation for being an excellent constituency Member. On behalf of my constituents in those old Hammersmith wards, I wish to place on record our thanks for his years of dedicated service to our community.
Some very distinguished current and former Members of the House represented the old Fulham constituency. Not least among this group was Lord Michael Stewart
who represented Fulham from 1945 to 1979 when he retired. Lord Stewart was a much-loved local figure who is still spoken of in Fulham with great warmth and huge affection. Martin Stevens was the Member of Parliament from 1979 until his untimely death in 1985. At the by-election that followed, my hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford) was elected in a famous victory for the Labour party. I had the privilege of working for my hon. Friend in that by-election and have been pleased to work with him since on several issues. I am delighted that he has been appointed to his critical new job in the Government.
I also wish to take the opportunity to pay tribute to the last-ever Member of Parliament for the old Fulham constituency, Matthew Carrington. While it was inevitable that in our different roles--he as a Conservative Government loyalist and I as a Labour council leader--we would often publicly disagree, I also found Matthew to be courteous and honourable. He earned his reputation as a conscientious and diligent constituency Member of Parliament.
I shall briefly and somewhat belatedly congratulate the two professional football clubs in my constituency on their recent splendid achievements. Fulham football club has so often been threatened recently with extinction, but I am delighted to say that it is now safe and secure in its ancestral home at Craven Cottage. Doubtless, difficult negotiations lie ahead, but these are exciting times for Fulham. Recent developments have been a splendid way to end a splendid season for Fulham, which earned promotion to division two last season.
Congratulations are also in order for Chelsea football club. The Evening Standard recently castigated the right hon. Member for Kensington and Chelsea (Mr. Clark) for failing to attend the cup final even though his local side were represented. I am more than happy to defend the right hon. Gentleman against that scurrilous and disgraceful calumny against his good name, because Chelsea football club is, of course, located in my constituency. While my own footballing loyalty lies in London N5, I sincerely congratulate everyone at Stamford Bridge on their terrific achievement in winning the Football Association cup in such style.
The Evening Standard recently claimed that Chelsea had little local community support. Anyone who visited the constituency in the weeks before the cup final and saw the huge amount of decorations and bunting, or who witnessed the fantastic scenes outside Fulham town hall on the Sunday morning, when 100,000 people greeted the team and the Minister for sport, my hon. Friend the Member for West Ham (Mr. Banks), as they paraded the cup on an open-top bus will understand how off beam the newspaper's report was.
I shall turn briefly to the details of today's debate. I welcome the Bill because it demonstrates the Government's commitment to tackling homelessness and bad housing conditions. Since 1979, investment in public sector housing has declined by more than 70 per cent. Even in the current financial year, the overall housing budget has been cut by one third, which has led to a cut in London alone of approximately £285 million. The Government are correct to acknowledge that the existing
distribution of set-aside capital receipts does not necessarily reflect those areas in greatest need, which must be our greatest priority.
I have already spoken about the high levels of deprivation in parts of Hammersmith and Fulham. The council-owned stock is some of the oldest in London, with a high percentage of properties built before 1945. Inadequate capital investment has left too many homes with inadequate heating systems, rotten windows, leaking roofs and other major defects. Some of the council properties in my constituency do not have internal bathrooms. All that is despite the fact that, under the five major criteria used to measure the performance of local authority housing departments by the previous Government--the quality of the housing strategy, the commitment to the enabling role of the local authority, the quality of housing management, the degree of tenant participation and the track record in delivering capital schemes--my local authority was classed in the top 20 per cent. in London. In other words, even if local authorities played the Tory Government's game, they were still starved of the necessary investment.
In Hammersmith and Fulham today, more than 6,000 households are on the housing register. Some 2,724 households are on the transfer list, including 367 that have a family member suffering from a serious medical condition or are statutorily overcrowded. Some 748 households are in temporary accommodation. That has led to the break-up of working-class communities that have lived in those areas of my constituency for generation after generation.
With a three-bedroomed flat in south Fulham now costing an average of £200,000, young people have been forced to move away from their families, friends and relatives, leading to much heartache and anguish. The private rented sector, where it exists, is entirely beyond the reach of ordinary working people. Therefore, many young families from my constituency have been forced to move east or west, or accept that they have no prospect of bringing up a family in decent housing conditions.
No one expects that we can reverse the situation overnight. People understand that reversing almost two decades of neglect will take time. However, the opportunities presented by the increase in capital investment mean that housing strategies can be revised to allow for a planned improvement to existing housing stock.
In the past few years, those council tenants fortunate enough to have any work undertaken have had to suffer as their homes have effectively been turned into building sites for years on end while work is done in small phases to match the small levels of funding available.
Mr. Andrew Lansley (South Cambridgeshire):
I am pleased to welcome the maiden speech by the hon. Member for Hammersmith and Fulham (Mr. Coleman), who spoke about his constituency with obvious affection and knowledge. I am sure that the House will look forward to his forthcoming speeches.
The hon. Member's references to Stamford Bridge and the comments of the hon. Member for Stretford and Urmston (Ms Hughes) have taken us on an FA tour in these maiden speeches. I hope that that augurs well as the Government pursue the objective of bringing the world cup to Britain at the earliest opportunity.
The hon. Member for Stretford and Urmston stated that she was looking forward to the establishment of the Imperial War Museum of the North, and, as I have the Imperial War Museum at Duxford in my constituency, I can tell her that it will be a much-valued and impressive addition to her constituency.
Turning to the matter at hand, I begin with two criticisms of the timing of the Bill. First, it is unfortunate that we are debating Second Reading when we cannot know the details of the consultation to which the Minister of State referred. It would be far preferable if the Minister were not explaining at the Dispatch Box how the measure is to work--we will then have to examine in Committee--and we could see the manner of the system that she is proposing and how the supplementary credit approvals are to be distributed, and for what purposes, during the consultation.
It would have benefited the House if it had been possible for Members to consult within their constituencies. I was able to talk to two local authorities within my constituency, but without the benefit of knowing some of the items about which the Minister told us; for example, the proportion of supplementary credit approvals related to the possession of capital receipts and the proportion to be related to need. That would have been relevant to the debate, but I was unable to discuss it with local authority representatives.
The devil is in the detail--as my hon. Friend the Member for Mid-Worcestershire (Mr. Luff) said--and, although we will come back to the detail in Committee, it would have been better to see some of it prior to Second Reading.
A number of hon. Members have referred to the Bill as a "technical measure". When I hear that expression from a Labour Government, I think that it would be best to check the implications of the measure carefully. The last "technical measure" that we debated in the House was on an issue of great constitutional significance, the Referendums (Scotland and Wales) Bill. Here is another so-called "technical measure" which could have significant implications for my constituency and for council tax payers generally.
My second reason for regretting the timing of the Bill, and the haste with which the Government have published it, is that it would have been better for the House to debate the Bill in the wake of the Chancellor's Budget statement, rather than in advance of it. By reference to Ministers' statements, my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) illustrated that the Government have pledged to maintain departmental public expenditure totals. Yet Ministers assert with great confidence that the Bill proposes additional public expenditure through the supplementary credit approvals. The only consequence can be that those additions to expenditure will be compensated for during the next two years by reductions in expenditure elsewhere in the same votes.
The role of the House--and of this debate--in looking at those additions to public expenditure is to examine the merit of what is proposed against the merit of public
expenditure in other respects. Yet the House is signally unable to do that. This is the worst kind of debate, in which one is invited to debate whether such a thing as additional housing investment is good or bad; by definition, it is good. However, the question is what is to be lost in consequence. To what extent will the burden fall on the taxpayer? To what extent will the cost be represented as a reduction in public expenditure in another part of the Department?
For those two reasons, it would be better to debate the Bill in two or three weeks' time when we have heard in the Chancellor's Budget statement the allocation that he is proposing to make to the Departments concerned. We could also see the consultation document that the Minister of State is proposing to publish soon.
My hon. Friends have stressed that we are talking not about a Bill which either mentions housing or is principally related to the release of capital receipts, but about a Bill which proposes to increase borrowing or spending by local government. When the Minister of State talks about one third of the supplementary credit approvals being related to possession of receipts and two thirds being related to need, she is illustrating that, in practice, two thirds of the additional spending will be unrelated to the possession of capital receipts. That is unless--I say "unless", because this is another point on which I am unclear--capital receipts that have accumulated in places where there is less housing need are pooled, or at least distributed to other parts of the country where there is greater housing need as reflected by the new provision indicator.
Will some authorities with greater capital receipts find that their credit approvals or capital expenditure approvals--and the subsidy that goes with some of those--are to be constrained artificially to allow other authorities to spend more? There is concern in my constituency that that is the intention of Ministers, and that a consequence will be that those authorities that rightly resisted the temptation to spend, and hang the consequences, will find that their thrift and prudent management have led to their being penalised, while other authorities that have spent without regard to the consequences will find that the Government are trying to bail them out.
I give credit where it is due. Questions were raised about what measure of receipts was to be used by the Government, and about whether there was a danger that the provision of credit liabilities might be used by Ministers to determine capital receipts for the purpose of the allocation of additional credit approvals. The Minister has said that that will not be the case, but that it will be related to accumulated reserve receipts. That is the better way to proceed.
Ministers are continuing to mislead the House on the implications of the Bill for public expenditure and taxpayers. First, I wish to refer to the consequences for the public sector borrowing requirement. If the authorities that have retained receipts have used them to repay debt or have invested them, they will lose the revenue accruing from the interest or will incur additional revenue costs arising from expenditure on additional borrowing. In either case, that will lead directly to additional Government expenditure and an increased public sector borrowing requirement.
More significantly for my constituents, there will in either case be additional costs for the council tax payer. For example, South Cambridgeshire is a debt-free authority with a provision for credit liabilities balance of about £25 million, but none of that provision is backed by cash. If South Cambridgeshire were to be required, by one route or another, or were to choose as a consequence of the legislation, to spend more, the inevitable result would be additional borrowing.
At present, South Cambridgeshire gets a revenue of about £1.2 million a year notionally derived from its balances on the general fund side, so we can clearly see the revenue consequences of about £25 million. The £1.2 million is the equivalent of about £25 a year for a band D council tax payer. We can therefore get the measure of a council tax payer's liability if the whole of the capital receipts available to a local authority were to be spent.
Cambridge city is not a debt-free authority, but has set-aside receipts of about £25 million or £26 million. If those receipts were not available and additional borrowing were needed, the increase for a band D council tax payer would be about £35. I am concerned, because the impression has been given that there is a cost-free option.
It is important that the costs should be identified and attributed, as they are potentially large. The chief executive of Camden council, writing in the Local Government Chronicle some time ago, estimated that
I suspect that we would find that the costs were attributed back to the council tax payer in due course. Ministers said that the costs would not fall on council rents; if they are also not to fall on council tax payers, there will have to be compensation by way of revenue subsidy, in which case they will fall on the general taxpayer. The costs are large and will be attributed back to either the general or the local taxpayer.
I hope that the hon. Member for Stretford and Urmston will forgive me for referring to a remark made in a maiden speech. She said that when council houses were sold and the receipts accrued to the local authority, the revenue loss from the council rents was not counted back to the local authority; but the revenue gains from the reduction of interest payments must also be taken into account. We cannot count one way only.
I have four criticisms of the Bill. First, it has been introduced before we have seen the detail of the Government's proposals and the public expenditure consequences. Secondly, it is being presented as a cost-free option, when in fact it is a back-door way of increasing public spending, even though Ministers said repeatedly before the election that they did not intend to do that in the next two years.
Thirdly, there is no such thing as a free lunch, and the eventual cost may be as much as £400 million. For my constituents, that could represent an additional £25 to £35 a year on council tax bills or a significant increase in general taxation.
Fourthly, clause 2 is objectionable in that it is a licence for local authorities to borrow imprudently for both capital and revenue purposes. It should be local
authorities' responsibility to amortise their expenditure over a reasonable time scale and to make provision from within their revenue expenditure to meet the additional costs of borrowing or to expunge that borrowing over time. If we give local authorities an open-ended opportunity to borrow, without a reasonable time scale for reduction, it will further exacerbate their tendency to participate in the Labour party's common approach of borrow and spend.
On the basis of those four objections, I believe that the Bill should not be given a Second Reading.
"interest rates on reserved receipts would be financing around £400 million of local authority expenditure."
I suppose that that would be over and above current expenditure. It is not an insignificant additional cost.
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