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Topical Questions

Volume 480: debated on Tuesday 14 October 2008

I normally do not make a statement on departmental responsibilities, but I am delighted to welcome our new team to deal with matters across the piece, including local government planning, housing, regeneration and community cohesion.

Will the Secretary of State provide assurance that assistance given to local authorities and councils in England with their investments in Icelandic banks will also apply to Wales?

My hon. Friend raises a point that concerns all Members and all local authorities. We are working extremely closely with the Welsh Assembly Government and the Welsh Local Government Association. We had a meeting last week with the latter, and we plan to have another meeting tomorrow at which the Under-Secretary of State for Wales will be present. We will keep in close contact and make sure that the information and the way in which we can provide support and assistance is shared between us.

The right hon. Lady just admitted that no investment advice had been issued to local authorities since 2004, and that the advice on Icelandic banks remained that they were good until almost the end. Perhaps she has inadvertently forgotten that, Arlingclose, the financial advisers, was advising its clients and local authorities to avoid Icelandic investments. Why was no additional advice issued to local authorities in the intervening period? Does the right hon. Lady understand that there is a difference between light-touch regulation and neglect?

The hon. Gentleman is well aware that local authorities are informed investors. They are major organisations that have fully qualified and professional directors of finance and treasurers, who have access to the very best advice. The advice that the Government issued was to local authorities, and it was on the criteria to be taken into account when making their range of investments. As I have already said, the advice is very clear: security and liquidity are the top priorities. It is only within that context that local authorities should then seek to get the highest return on their investments. Local authorities are well informed and intelligent investors, and therefore have access to the very best advice.

The Secretary of State criticised my hon. Friend the Member for Louth and Horncastle (Sir Peter Tapsell) for relying on newspaper reports for the list, but still the Department has not produced a comprehensive list of the authorities affected. Will she undertake to do that, so that we know what the position is for councils, police authorities and fire authorities? Is she now actively examining the investments of housing associations, of PFI schemes in local authorities and of regional development agencies, which we understand are at risk? Until we have a comprehensive list, the Government cannot take serious action. It is no use their relying on others to provide it; it is up to the Government to provide that list.

I would hope that the hon. Gentleman was absolutely up to date with the action that the Government have been taking on all these issues. He will know that last Thursday there was an extensive meeting with the Local Government Association, and that at that time just over 100 local authorities had investments in Icelandic banks. So far, we have details of 116 local authorities with £858.3 million invested. We are also examining the position of housing associations, and the Minister of State, Home Department, my hon. Friend the Member for Gedling (Mr. Coaker), who has responsibility for policing, met the police authorities last week. I can absolutely assure the hon. Gentleman not only that this Government are on the case, but that we have taken bold and decisive action that has been welcomed everywhere.

There will be a further meeting with the LGA tomorrow to try to identify the authorities that are struggling with these issues, but local authorities have confirmed that none of them will struggle to meet their payroll bill. Many local authorities have said that there will be no impact on the front-line services that are crucial to council tax payers, but we will ensure that where people are in difficulty, we stand ready to help.

I inform the hon. Gentleman that we now have a rapid response team, fully staffed by people from local government who are able to go in and assist.

T6. May I ask about the Olympics? As we know, the social and economic impact of the Olympic games on my constituents could be massive and very beneficial. What is the Secretary of State doing to ensure that we derive a good, positive social and economic impact for my constituents and the rest of the east end? (226366)

My hon. Friend is clearly concerned about the legacy of the Olympic games for her constituents, and rightly so. At the moment we are working with all five boroughs in the Olympic area and developing a multi-area agreement to examine social and economic issues. The most important thing is to enable the people from those deprived boroughs to get the skills that they need to take up the jobs that will be left in those areas as a result of the massive £9.3 billion investment that is taking place in the Olympics.

T2. Is the Minister for Housing aware that her officials are putting it about that they will shortly publish the planning policy statement on eco-towns, and that it will be site-specific? If so, may I please urge her to reconsider? Much of the evaluation on the sites has yet to be completed. For example, in Weston Otmoor the rail infrastructure evaluation has yet to be done with Network Rail, First Great Western and Chiltern Railways. This is a really dysfunctional way of doing things and will inevitably lead to further judicial review and further delay. (226362)

I am grateful to the hon. Gentleman for raising the issue, because I think that there may be some misunderstanding. The planning policy statement to which he refers will be a draft and subject to substantial consultation. Not for quite some considerable time do I expect the final version. I am sure that he will know, because he follows the issue closely, that the previous consultation has resulted in a slight delay in the issuing of the draft policy statement, because the response has been so substantial. If the same thing happens again, we will be talking about more time. I would say that we are therefore some distance from any site-specific, and particularly final site-specific, proposals. I hope that that gives him some reassurance.

T8. The housing market pathfinder programme is, at long last, starting to make a real difference in Stoke-on-Trent. Will the Minister confirm that the money originally allocated this year as part of that programme but withheld from the indicative amounts will still be available to programmes, such as the one in my constituency, that are deemed to be performing well, including by an independent Audit Commission audit? (226368)

I have been to Stoke and Staffordshire to examine Renew North Staffordshire, and I was greatly impressed by some of the progress being made there. Like me, my hon. Friend will have been delighted that I was able to announce a £1 billion investment for the next three years, with flexibility of plus or minus 10 per cent. on that budget. Given the current turbulence in housing markets and the need to ensure that the gap between the housing market renewal areas and the rest of the market is as small as possible, I am keen to push forward that flexibility as much as possible and to work with her and others, such as Renew North Staffordshire, to ensure that that happens.

T3. Does the new Minister for Housing accept that, unlike energy surveys, home information packs help very few homes? Will she take this opportunity to help very hard-pressed home owners who wish to sell their properties by announcing that there will be a moratorium on HIPs, which will eventually lead to their demise? (226363)

Good try! I am new to the portfolio, but not so new to it that I do not know both that HIPs are a subject of some controversy and that the reason they were devised in the first place was a strong level of perceived need for something to help in the housing market. I assure the right hon. Gentleman that I shall examine the issue. I cannot assure him, at present, that I am mindful to take the course that he urges.

T9. May I tell the Minister for Housing and the Secretary of State that I recently held a well attended housing information event in my constituency? My constituents were engaged in it, and were interested to learn about the new shared ownership schemes that the Government have introduced. However, it was obvious that there was a lack of awareness about the details of such schemes and about to whom they were available. Most people thought that they were available only to key workers. What steps is the Department taking to ensure that people are made aware of shared ownership schemes and that they are therefore able to access them? (226369)

I am grateful to my right hon. Friend for that, because, as she says, the Government have introduced a number of initiatives to try to help people through the particular difficulties arising at present. She also rightly identifies the various shared ownership and shared equity schemes as a good way forward. I am sure that she is right to say that not enough people are yet aware of what is on offer. The Department has begun the programme of information and intends to develop and extend that. I am grateful to her for making it clear how necessary that is.

After their joint meeting last week, the Department and the Local Government Association issued a joint statement saying that

“there is no evidence of recklessness by local authorities.”

Given that almost £1 billion of public money is tied up in the collapse, if it is not local authorities, who or what does the Secretary of State think is to blame? Is it the credit ratings agencies, the organisations advising the councils, or her Department for the guidance it issues? Is it not vital that that is reviewed? Should there not have been a six-point plan, rather than a five-point plan, today?

I genuinely do not think that at this point, when we are trying to help in difficult economic circumstances and get stability into the banking system, and trying to ensure that people can get mortgages and that small businesses do not fold during this difficult time, we should seek to play the blame game. At this point, we must consider what we can do to help the local authorities that are in difficulty. That is my absolute top priority at this moment, and not simply in order to help the local authorities; we need to help those people who depend on their services—some of the most vulnerable people in this country. I mean to ensure that the Government put their full effort behind that.

T4. Ministers have confirmed that there is sufficient previously developed—or so-called brownfield land—in the Thames corridor to meet the Government’s current building targets for the region in full, so why are the Government continuing to put so much green belt at risk in the area, and in Castle Point in particular? (226364)

The hon. Gentleman is mistaken. The Government are not putting green belt at risk. Indeed, when it comes to housing development, we set our face against any such development. He will also know, however, that it is for local authorities to consider how they make their proposals; indeed, that is in train in his constituency. Knowing him as I do, I am confident that he will keep a close eye on that and, should the local authority make such proposals, that he will raise them again—[Interruption.] My understanding is that the local authority has talked of perhaps doing so at some time in the future, but that there are no concrete proposals at present.

In 1996, when I was chair of South Yorkshire fire and civil defence authority, we employed just one woman firefighter. Now, South Yorkshire fire and rescue service employs 32 women firefighters, up 25 per cent. in the last four years. The service is working towards level 3 of the local government equality standard. Will the Minister join me in congratulating the service on the progress it is making on the equality and diversity agenda?

I thank my hon. Friend for the passion he shows on the issue of gender equality, not only in South Yorkshire, but around the country. He will be aware that in 1997 less than 1 per cent. of firefighters in South Yorkshire were women, but now 13 per cent. of new recruits are women. I join him in congratulating the service on the huge strides that it is making towards becoming more fair and gender-equal.

T5. Does the Secretary of State not now accept that, at the very least, the guidance that was issued to local authorities should have included advice that the higher the rate of interest, especially over the basic deposit rate, the higher the risk? (226365)

This is the third time that I have reiterated the advice that was issued. It provides a good framework, because it tells authorities up front that their top priorities must be security and liquidity and that only in that context should they consider the rate of return and try to get the highest rate they can. Local authorities are informed investors, as I said to the hon. Member for Brentwood and Ongar (Mr. Pickles). They all have professionally qualified treasurers and investment accountants. Clearly, they should seek to spread their investments to ensure that they do not take unnecessary risks, but the guidance is clear and provides a good framework in which they can operate.

T10. Is the Secretary of State aware that the boundary committee’s proposals for a unitary authority for the whole of Norfolk and part of Suffolk have met universal opposition? All the MPs, including the four Labour MPs, are totally opposed to the proposals, which would undermine democracy in Norfolk. Does she agree that at a time of economic crisis, when each Department’s budget will be under huge pressure, those highly damaging proposals should be scrapped? (226370)

I do not agree with the hon. Gentleman, but he will know that at the moment this is a matter for the boundary committee. He will also know that we have charged the boundary committee with reporting to us by December with proposals for any changes it thinks appropriate. For the moment, he and anyone else with strong views on the subject should make the boundary committee aware of them so that it can take those views into consideration—which it will do.