asked the Secretary of State for the Environment what was the number of council house starts in the years 1978, 1979, 1980, 1981, 1982, 1983 and 1984, respectively.

The figures for the first six years are as follows: 75,000, 55,000, 34,000, 21,000, 29,000 and 30,000. The provisional figure for 1984 is 23,000.

Do not those figures reveal a disgraceful position? There are 500,000 building workers out of work, longer and longer waiting lists in all big cities., and houses being sold off at half price, which depletes the urban housing stock, yet the Government produce these figures, which alarm anyone who wishes to house our people. When will the Minister resign?

I urge the hon. Gentleman to broaden his horizon and consider other indicators of housing performance apart from local authority starts. Local authorities' improvement grants have increased from £90 million to more than £900 million. I suggest that he has a discussion with an Opposition spokesman on housing. The hon. Gentleman implied that he was against the right to buy but, as I understand it, Labour party policy, as announced by the hon. Member for Birmingham, Perry Bar (Mr. Rooker), is to admit that the right to buy has been a success, and that the Labour party would face considerable opposition if it went ba/ck on it.

Does my hon. Friend agree that the Labour party is being hypocritical in trying to stop people from buying their homes? That is wholly contrary to the views of the council tenants, who want to buy their homes rather than to see massive additional house building.

There is clearly a private debate going on within the Labour party about whether to remain committed to repealing the right to buy. As I understood it, the party is against that, but the hon. Member for Sheffield, Hillsborough (Mr. Flannery) does not seem to have been party to that decision.

Will the Minister stop diverting the question away from the abysmal number of local authority starts by referring to the Government's other so-called initiatives, which have not resulted in anything substantial? Has not he or the Secretary of State, had a word, for example, with Laurie Barratt, and their other friends in the building industry, who say that their well-cherished joint venture scheme will no longer go ahead because of the 15 per cent. VAT on building improvements and the Government's freeze on the right to of local authorities to spend their capital receipts?

If one looks at the performance of the private sector between 1980 and 1983, one sees that the number of starts increased from 98,000 to 167,000. One must put that in the balance, as well as the factors that the hon. Gentleman mentioned.

Are not Opposition Members foolishly playing the numbers game when they concentrate solely on public sector new building? Is it not the case that many authorities—my own in Nottingham is a case in point, with 47,000 homes in its ownership—should be concentrating on maintaining and improving their existing stocks?

My hon. Friend is right. Whatever the political complexion of local authorities, they have all recognised that the real challenge is to modernise and improve the existing stock and to convert other stock that needs improvement. That has been the thrust of local authority expenditure, and it is wholly misleading to take as the sole criterion of performance, as the hon. Member for Hillsborough did, the number of local authority starts.

Has the Minister had drawn to his attention a report of the commission headed by Prince Philip, which made it clear that those who wanted to rent property were having great difficulty in doing so because of the cuts in capital expenditure determined by the Government?

I have seen an interim report from that commission containing some evidence. As I understand it, the commission has not yet come to any conclusions. The Government await with great interest the findings of this important commission.

Is it not true that many local authorities choose to direct their housing resources into more productive areas? For example, the borough of South Ribble is the national leader in building sheltered accommodation of a private, housing association or even a council nature. Should not local authorities direct their resources towards that?

My hon. Friend is right. We have encouraged local authorities to provide housing for the elderly, the disabled and the homeless rather than try to meet the general needs, which we believe the private sector will have a crucial role in satisfying.

asked the Secretary of State for the Environment what proposals he has for the future of improvement grants.

We intend to issue a consultation document on private sector housing improvement policy, including the future of the home improvement grant system, as soon as possible.

Does the Minister recognise the great anxiety caused by the fact that many councils have already stopped giving improvement grants? The Government must produce not only a new policy, but the essential cash for councils to do this work. Will he carry out his earlier promise to the Government and resign if that cash is not forthcoming?

Not all that we read in newspapers is true. As to the hon. Gentleman's substantive point, it comes ill from a Labour Member to talk about improvement grants. During the last financial year spending on improvement grants was £900 million, compared with £90 million in the Labour Government's last year of office. In this financial year we expect — we cannot give a final figure — spending on improvement grants to be about £750 million.

When the document, which is already rather late, appears, will it address the fact that improvement work is especially labour-intensive—the most labour-intensive in the construction industry—and that it is a cost-effective way of repairing urban decay?

I agree with both parts of my hon. Friend's supplementary question.

Is the Minister aware that many unemployed people who own small terraced houses in cities such as Leeds cannot find the capital sums needed to maintain their homes? Is it not within the Government's brand of Conservatism to assist a property-owning democracy? Do they realise that their schemes would become much more favourable if they made more money available for private sector grants?

The primary responsibility for maintaining and repairing a home rests with the owner of that home—

Is that what the Minister said before the election?

I wish that Opposition Front-Bench spokesmen would not shout from a sedentary position, but would listen to the answer. A major part of the review of our home improvement grant policy is that we should achieve a better targeting of available resources. We shall try to ensure that resources from the public sector go to assist those who cannot afford to carry out improvements and repairs, and to the houses in the greatest need of repair.

Does my hon. Friend agree that it is hypocritical of Labour Members to condemn the Government's record on improvement grants when one considers that in my constituency in 1978—the last year of the Labour Government—the local authority spent £233,000 on improvement grants, and that this year it is spending £1,800,000? Does my hon. Friend further agree that unless we spend even more we shall end up building more council houses?

My hon. Friend's point is a vindication of the Government's policies and an indictment of the policies of their predecessors.

Will the Minister stop his smug, braggart boasting about the generosity of the election bribe of £900 million, which to many people amounts to little more than telling a man about to be executed that he is having a good breakfast? [Interruption.] It is all very well for the smug Minister to smirk as well. Does he not realise that 250,000 home owners have had applications for home improvement grants in for over a year, and that his cuts in the housing investment programmes and freezing the use of capital receipts mean that they are still waiting in anxiety and distress and are now unlikely to get their grants? This is an act of treachery by a Tory Government towards many poor and anxious owner-occupiers.

Some of that synthetic anger—

It is not synthetic anger. Come to my advice bureaux.

The hon. Gentleman is not the only hon. Member who has advice bureaux. When my right hon. and learned Friend the then Chancellor of the Exchequer introduced the exceptional measures for improvement grants in his Budget of March 1982, he made it clear to the House that it was a temporary measure, partly in response to the 1981 English house condition survey. In fact, the exceptional measures for improvement grants were twice extended beyond the period that my right hon. and learned Friend had originally announced.

asked the Secretary of State for the Environment how many officials in his Department are engaged in liaison between his Department and the environment co-ordination unit of the Ministry of Agriculture, Fisheries and Food.

Contacts are numerous and frequent, and no precise figure can be given.

As land use statistics relating to our dramatically changing countryside are collected and assessed by my right hon. Friend's Department rather than by the Ministry of Agriculture, Fisheries and Food, will my right hon. Friend assure the House that there is the closest co-operation between his Department and the recently established environment co-ordination unit of the Ministry of Agriculture, Fisheries and Food? Will he also assure us that the close co-ordination and co-operation will be at ministerial level?

Happily, I can give my hon. Friend assurances on both those counts. There is increasingly close co-operation and also an exchange of views between the Ministry of Agriculture, Fisheries and Food and my Department, both at official and ministerial level.

I remind the Secretary of State that the level of co-operation between his Department and the Ministry of Agriculture, Fisheries and Food has been subject to criticism by the Lords Select Committee, by the Royal Commission tenth report and, most recently, by the House of Commons Select Committee on the Environment. In the light of that, does the right hon. Gentleman not feel the need to introduce a new sense of urgency into his discussions with the Ministry of Agriculture? May we expect a statement or some new policy initiative soon to resolve the undoubted difficulties between the right hon. Gentleman's Department and the Ministry of Agriculture?

The hon. Gentleman is being a little unfair to both Departments. I am sure that he has noticed a number of recent conservationist initiatives taken by my right hon. Friend the Minister of Agriculture, Fisheries and Food, including the initiative in Brussels for the new structure directive, the change in the farm grant system to favour conservation, the participation in the new and very welcome experiment in the Broads to preserve the Halvergate Marshes, the reduced levels of financial support for drainage grants, and support for fanning and wildlife advisory groups throughout England. These all represent a considerable shift in emphasis, which I am sure is welcomed on both sides of the House.

When he turns his mind to matters that have to do with agriculture and with the Department of the Environment, will my right hon. Friend consider the European Community fund for the preservation of the habitat of endangered species? Is the United Kingdom drawing on the fund adequately?

If my hon. Friend would care to put down a specific question on that point, I should be very happy to give him an answer.

Does the Secretary of State agree that the Select Committee report of this House was extremely scathing, but also realistic? Will he acknowledge that since the enactment of the Wildlife and Countryside Act it has been reported that over 156 sites of special scientific interest have been damaged? Do the Government not accept considerable responsibility for that damage? They provided only £600,000 to police the Act in relation to land acquisition and management agreements. Although the Government are to provide £7 million this year, which we acknowledge and appreciate, it shows the degree of ineptitude of the Government. May we have an assurance that the Government will provide sufficient money so that all the responsibilities of the Nature Conservancy Council can be carried out?

I must ask the House to await the Government's response to what is without doubt an important report by the Select Committee. I thought that the right hon. Gentleman's acknowledgement of the very substantial increase in the funding of the Nature Conservancy Council—an additional £7 million—was singularly churlish. I can tell the right hon. Gentleman that this increae has been very much welcomed by the council.

asked the Secretary of State for the Environment if he is satisfied with the enforcement procedures provided by the Town and Country Planning Act 1971 in respect of buildings constructed in contravention of the planning laws and subsequently occupied as a main or only residence; and if he will make a statement.

My right hon. Friend is satisfied with the provisions of section 87 of the Town and Country Planning Act 1971, as amended. If, however, my hon. Friend is aware of any special difficulties, my right hon. Friend will be glad to consider them.

On tht very point, is my hon. Friend aware that a mobile prefabricated home was recently erected on green belt land in my constituency within a few days without any kind of planning permission and that Bromley council reckons that because of the cumbersome nature of the present planning laws it may take several years for this building to be removed? Is this not an affront to the law-abiding neighbours in that area? Can we not tighten up the law in order to deal more promptly and effectively with those who deliberately flout it in this way?

I do not think that either my right hon. Friend The Secretary of State for the Environment or my right hon. Friend the Home Secretary is anxious to return to the conditions that prevailed in the 1960s, which involved the use of magistrates' courts. They would lead to all kinds of problems. The vigilance of the local authority is absolutely critical and vital in all these circumstances, and Bromley has a good record. Its officers know what legal measures are appropriate. I am aware that there have been exceptional delays in some cases, in particular in the case to which my hon. Friend has referred. However, local authorities can take more effective action quickly by prosecuting for failure to obtain the site licence that is required under the Caravan Sites and Control of Development Act 1960. However, we must have a look at these problems, and I shall write to my hon. Friend.

asked the Secretary of State for the Environment what recent measures he has taken to conserve the rural environment.

Our recent agreement to the Broads experimental scheme is a significant step forward both to safeguard the unique landscape and to test the effectiveness of a new means of achieving a viable agriculture in environmentally sensitive areas. We have also just published the Government's response to the Countryside Commission's review of uplands policies.

I am grateful for that reply, but will my hon. Friend emphasise that if we are to conserve wildlife in the wider countryside we need to develop the concept of integrated farming in its practical applications? In this respect I was glad to hear what my hon. Friend said about the Broadlands experimental scheme, but will he press for the extension of this integrated approach to other areas?

I am grateful for my hon. Friend's support for the experimental scheme. It has been widely welcomed on both sides of the House and by those who are concerned with the integration of farming and the countryside. Similar schemes are in operation in some of the national parks. This is a major step forward. We all want to learn from it how to go forward in this very sensitive area.

In pushing forward his unfortunately inadequate steps to conserve the rural environment, will the Minister be giving wholehearted and full backing to the Bill that is to be introduced on Friday next by my hon. Friend the Member for South Shields (Dr. Clark)?

I am sure that the hon. Gentleman is a great expert on these matters. The Government have done much more than the Labour Government did. It is well known that we welcome the blocking of the three-month loophole, as proposed by the hon. Member for South Shields (Dr. Clark). However, I hope that the hon. Member for South Shields will await my proper response to his Bill when we debate it on Friday.

Does my hon. Friend agree that one of the best ways of conserving greenfield sites in the countryside is for the Government to auction off some of the 112,000 acres still on the land register and in public ownership?

I think that there is something in what my hon. Friend says, but it does not relate directly to these issues.

Obviously the protection of the rural environment depends essentially on closing the loopholes in the Wildlife and Countryside Act 1981. Will the Minister state whether the Government intend to back the Bill that will be discussed in the House on Friday, which seeks to close those six major loopholes? Will the hon. Gentleman make a clear and unequivocal statement to the House on where the Government stand? We need the answer now.

One major loophole is covered in the hon. Gentleman's Bill, and the Government have long made it clear that they welcome its closure. They also welcome the forthright support given by the all-party Select Committee for the Wildlife and Countryside Act, which has been the subject of much rather ill-informed criticism on the part of some Opposition Members, although not the hon. Gentleman.

asked the Secretary of State for the Environment if he will make a statement on the present progress of structure plans in the south-east.

The south-east region comprises Greater London and 12 shire counties. The latter are covered by 17 approved structure plans, most of which are at varying stages of review and alteration. At present I have before me proposals for nine alterations. My hon. Friend will know that Berkshire county council is preparing a single new structure plan to replace the three existing ones for east, west and central Berkshire. A draft for this replacement plan was published last April for public consultation.

Is my right hon. Friend aware that his Department's diktat to Berkshire county council to make provision in its structure plan for central Berkshire for a vast number of new houses to be built is completely opposed by the population of Berkshire for three very good reasons? First, there is not the demand for those houses. Secondly, terrific damage will be done to the environment. Thirdly, employment in the regions concerned and our inner-city policy will be adversely affected.

I understand that the county council issued a consultation document containing a figure of nearly 8,000 extra houses, but that it has now issued a further consultation document, and public meetings are being held and public consultation is being carried out about it. I appreciate that there is considerable pressure around London and in the home counties for new houses, but there is also a strong counter pressure against new large estates. A balance must be struck in such matters.

asked the Secretary of State for the Environment if he will make a further statement on the Government's response to the Commission on Energy and the Environment's report, "Coal and the Environment."

Progress continues to be made in implementing the commitments given in the Government's response to the commission's report.

Will the Minister give further attention to two aspects that are emphasised in the report? First, renewed efforts should be made with regard to dereliction. However, I immediately recognise the excellent work that has been done under Governments of both parties. Secondly, the despoliation of beaches is as serious now as it was when the report was published in 1981. In coalmining areas beaches provide an important amenity, yet they are an eyesore now as they are covered with coal waste. Will the hon. Gentleman do something about that?

We share the hon. Gentleman's anxieties and agree with the strategy that he wants to see implemented. Within the resources available, I can give the hon. Gentleman that full assurance. The Horden pipeline experiment is of great importance but is not at present operating because of the dispute. However, in use it has proved technically very successful. The experimental period is to be extended to allow a full assessment to be made once the dispute is over.

When considering the Government's response to the impact of coal on the environment, will my hon. Friend and his ministerial colleagues be prepared to give full weight to the possibility of installing equipment on a pilot basis which might reduce the emissions of acid and other noxious substances from coal-fired power stations?

I note my hon. Friend's request. I shall study it and write to him.

Are the Government satisfied that no longer will opencast coal mine workings be permitted as near to occupied dwellings as 50 yards?

We have considered many elements of planning and coal, coal extraction and the general development order. They are all under review and are constantly under discussion, though the role of the local authority is obviously of prime importance. We have made great steps, and I shall look into the point that the hon. Gentleman raises.

Will the Minister also look into the cost of the protection of the environment arising from coal mining? Does he think, for example, that the Exchequer might relieve the National Coal Board of some of its costs, so making pits more economic?

The hon. Gentleman, representing the part of England that he does, will be pleased to hear that my right hon. Friend has agreed to provide £2·5 million to help finance spoil disposal schemes. A list of possible schemes has now been drawn up and discussions between my Department, the NCB and the local authorities involved are continuing. That is good news.

asked the Secretary of State for the Environment why the London borough of Brent has been forbidden to issue negotiable bonds to assist in its financial responsibilities and with the construction of new homes; and if he will make a statement.

No such instructions have been issued, either by the Government or, I understand, by the Bank of England.

Does the Minister realise that the fact that the Conservative-controlled London borough of Brent is rate-capped means that, although the instructions have not been issued, there is no way in which negotiable bonds can now be put on the money market to deal with the crisis there of 17,000 on the housing waiting list and £30,000 a week being spent on the homeless? Is he aware that because of that taxpayers and ratepayers will have to pay an extra 0·5 per cent. if, after July, when we reach the top of the reserve list, the London borough of Brent is then able to borrow capital to deal with its problems? Does he realise that, as a result of the situation, taxpayers and ratepayers will have to pay an increased subvention, all because of the way in which the Government are looking after the money market first and homemakers second?

The hon. Gentleman has got hold of the wrong end of the stick. The list of authorities wishing to make bond issues is full until the beginning of April, but the Bank of England has accepted bookings for Brent bonds to be issued subsequent to that. The hon. Gentleman rightly says that Brent is under Conservative control. That is why it is one of the rate-capped authorities that will comply with the law. It has already shown the way to many other rate-capped authorities by making savings of up to £20 million without making one person redundant.

rose—

Does the hon. Gentleman's supplementary question relate to Brent?

Yes, Mr. Speaker. As the right hon. Gentleman will be aware, Brent council is a hung council, with the Tories only governing by agreement with the Liberals. Is he aware that the only way in which that authority will be able to meet the rate-capped limit—[Unterruption]—is if the £3 million of housing benefit repayment due is paid into its budget? What does the right hon. Gentleman propose to do to make sure that outstanding repayments of millions of pounds to that and other rate-capped authorities are paid so that they may be able to fix a rate? [Interruption.] May we also have an assurance that the money brokers will not charge extra interest just because they are rate-capped authorities.

I am delighted that the Conservative group in Brent has the support of the Liberal group there in implementing economies without Brent having to suffer. That is the policy that has been followed by the authority, which is conducting its affairs in a responsible and sensible way.

asked the Secretary of State for the Environment why projects in Alnwick are no longer eligible for urban aid.

Our policy is to concentrate traditional urban programme resources in the more extensively deprived urban areas with 20,000 or more population. Alnwick district has no urban centre of that size.

May we be told who dreams up the arbitrary lines and population figures so as to exclude from urban aid places which his officials have hitherto recognised have problems of social deprivation and unemployment just as great as those of areas of larger population? Will the hon. Gentleman recognise, when making future grants, the problems of areas such as Alnwick, whose problems were recognised in the past?

I understand that even during the time of the Lib-Lab pact Alnwick did not receive any special treatment under the urban programme. The policy, which I am prepared to defend and which I hope the hon. Gentleman will support, is to concentrate the urban programme on areas which suffer from extensive deprivation. Having looked at the statistics for his constituency, I must tell the hon. Gentleman that the needs do not compare with those of other urban areas, where the need is far more extensive. There are small acute pockets of deprivation in Alnwick, but the scale of the problems is such that the local authority should be able to cope with them from its normal resources.

asked the Secretary of State for the Environment whether he is satisfied that the amounts allocated to housing capital expenditure in "The Government's Expenditure Plans 1985–86 to 1987–88" will be sufficient to prevent the deterioration of the housing stock.

The Government's plans allow for over £3 billion of public investment in housing in each of the next three years. It is for local authorities to decide what proportions of their share to use on renovating their stock, on home improvement grants or on other capital expenditure.

What advice does the Under-Secretary of State have for authorities such as my own, which have already entered into legal and binding agreements for next year's capital programme and now find that their allocation is insufficient to meet those contracts? What advice does the hon. Gentleman have for authorities which have stopped their housing action area programmes and have put most of their resources elsewhere?

The message to Liverpool must be that it needs a heavy injection of realism. The council's stated intention for capital expenditure on housing stretches far beyond any reasonable expectation of capital provision. The message to go back to Liverpool is that Liverpool must try to live within its means.

Is my hon. Friend aware that housing expenditure is one of the most labour-intensive forms of any public expenditure? Is he further aware that the reports in today's press of the possibility of further cuts in housing expenditure have given rise to considerable concern?

There is no foundation for that headline.

Is the Under-Secretary of State aware that, because of the Government's pernicious financial policies, for the first time in the history of the Black Country towns within Sandwell are unable to build council houses? What message does the hon. Gentleman have for the more than 6,000 families who are on a council waiting list in that area?

The first message to any local authority must be that it should look at the number of vacant units it already has. Often those units are vacant for more than 12 months. The local authority's first priority must be to get that stock back into use.

Does my hon. Friend agree that we are accustomed to the press selectively quoting from leaked Government documents? Will he go beyond what he said to my hon. Friend the Member for Suffolk, South (Mr. Yeo), because, unless he knocks on the head the impression given in The Guardian today that councils will not be eligible to use their assets, there will be no incentive for councils to sell their assets, which is central Government policy?

I have seen the article to which my hon. Friend referred. The headline in particular is grossly misleading. No such proposal is on the table.

Does not the hon. Gentleman's answer to the questions asked by the hon. Members for Leeds, North-West (Dr. Hampson) and for Suffolk, South (Mr. Yeo) mean that he is denying the figures contained in the reports, which claim to come from his Department, showing that there has been a severe reduction in the number of new starts in house building in the public and private sectors? Is the hon. Gentleman denying those figures?

When my right hon. Friend the Secretary of State announced on 18 December his proposals for the capital spending in 1985–86 by local authorities, he indicated that the pesent system was unsatisfactory and that he was embarking on discussions with the local authority associations. My right hon. Friend has held a useful meeting with the chairman of the local authority associations. That article arises from a subsequent discussion between my right hon. Friend's officials and officers of the associations.

As the London borough of Redbridge has had its share cut by £7 million, how does my hon. Friend think that Redbridge, with a large number of Airey houses, can repair those units? The cut will seriously delay those repairs.

I am well aware of the particular problems in Redbridge, where there are a number of Airey houses. I have had a meeting with the chairman of the housing committee. The representations made by my hon. Friend and by the chairman of the housing committee have been taken into account in assessing Redbridge's housing allocation for next year.

I ask the Under-Secretary of State two questions. First, will he answer question No. 12 and say whether the money will prevent a deterioration in the housing stock? Secondly can the hon. Gentleman categorically tell the House whether the proposal announced by the Secretary of State to cut to 20 per cent. the amount that local authorities can use will be the figure in the order brought before the House, or will the figure be less than 20 per cent., as forecast in The Guardian this morning?

The figure will be 20 per cent. On the first question, the responsibility for preventing the deterioration of the housing stock has to rest in the first instance with the owner-occupier, who is, in the vast majority of cases, the owner of the stock, rather than the Government.

asked the Secretary of State for the Environment if he will take action to privatise local authority housing other than through individual sales to sitting tenants or third parties.

Private developers have bought, improved, and successfully resold, thousands of derelict and vacant local authority dwellings. Some local authority tenants are taking on the responsibility for running their own estates through management co-operatives. I want to see these welcome trends accelerated.

As it appears that in those countries where rented accommodation is provided by commercial enterprise rather than by a municipal organisation the housing and the environment are better and the cost is somewhat less, will my right hon. Friend consider being more radical in his proposals and require some local authorities to divest themselves of some of their larger and less well-run estates to private enterprise organisations licensed by the Government and operating within certain requirements?

There are now some 70 schemes of substantial local authority estates or blocks of flats being refurbished and developed in partnership between the public and the private sector. Some of those include tenanted estates. It is encouraging to find that when tenants are offered the chance of and consulted about participating in such ventures they prefer to do that rather than to stay with the local authority. That is something that we are pursuing with considerable energy, because I believe that it is an important development.

Why does the Secretary of State not recognise that hundreds of thousands of people are living in great housing hardship and misery because they cannot be housed by their local authority? Is it not a striking illustration of the Government's callous indifference that they have each year cut the amount of money made available to local authorities? In my borough, only because it has not had the money available, no contracts for new council housing have been entered into for the past six years. When will the Secretary of State recognise his responsibility towards people in such a desperate housing plight in my borough and the rest of the country?

I am a bit surprised that the hon. Gentleman is not prepared to welcome schemes where private sector money will relieve local authorities of the cost and responsibility of refurbishing some of their most unattractive and difficult to let areas so that the local authorities can concentrate on providing for the needs where the hon. Gentleman has identified. He has a blinkered view of the best way forward in this matter.

Does my right hon. Friend agree that it is only too self-evident from the evidence of Socialist city councils up and down the country that the vast amounts of money that have been directed into those quarters have not benefited the council tenants, who were meant to be the beneficiaries, and that it is necessary to consider new methods of financing housing for those who cannot afford to pay for it themselves?

I agree with my hon. and learned Friend. I am prepared to adopt the words of one Labour leader of a council in the north-west, who said the other day:

"In many of these great urban estates the public sector has caused the problems, and they will not be solved without the support of the private sector."

Does the Secretary of State confirm that the best way to deal with monolithic council estates is not to sell them for private profit but to devolve power to the tenants to enable them to run their own affairs through management and maintenance co-operatives? What practical steps is he taking to encourage local authorities to make progress along those lines?

I agree with the hon. Gentleman. There is room for a variety of solutions. Some of the tenants' cooperatives that have been developed have been extremely successful. If he consulted his hon. Friend the Member for Liverpool, Mossley Hill (Mr. Alton), he would find that it is a matter of great regret that Liverpool city council has cut off tenants' co-operatives from any access to city finance—

Quite right.

The hon. Member says "Quite right." He should go and talk to the people who are waiting for their houses from those co-operatives.

Does the right hon. Gentleman accept that in many areasa local authorities are not allowed to improve as many houses as they would like, or as their tenants and local ratepayers would like? Is the right hon. Gentleman also aware that in those areas regional and local newspapers are frequently given to criticising councils for their failure to improve as many houses as they would like? Will the right hon. Gentleman make it absolutely clear to the media that councils cannot improve the number of houses that they would like because of Government policy and ministerial action, rather than because of their own decisions?

If the hon. Gentleman has only just discovered that it is the Government's policy, in pursuit of their general economic initiatives and the control of inflation, to keep a firm control of public spending, I am not quite sure where he has been for the past five years. I would have more sympathy for any council that had gone out of its way to seek private sector partnership to try to resolve some of its problems—[Interruption.] I am glad to hear that the hon. Gentleman's council has done just that. That is the way in which those blocks of flats and estates can be refurbished and developed. There are now examples all over the country which are cheered and applauded by those who live on the estates.

asked the Secretary of State for the Environment when he last met the chairman of the Thames water authority; and what subjects were discussed.

I met the chairman on 14 January. We discussed several subjects, mainly financial.

Can my hon. Friend tell me why he has chosen to ignore the view put forward by the chairman of Thames water authority that the figure that my hon. Friend uses as a reasonable return on assets is hypothetical and unrealistic? Is my hon. Friend seriously asking me to vote this evening in support of orders to limit the extent to which local authorities can increase their rates, and is he asking me tomorrow evening to vote for orders that will place on the Thames water authority the duty to impose a far higher rate than it wishes or needs to impose?

The net tangible assets of Thames, as at 31 March 1984 and as certified in the accounts that were signed by the chairman and the director of finance and audited by Arthur Andersen, are £4,425 million. I understand the views expressed by my hon. Friend. He is correct in that, to my regret, there is no agreement between the chairman of Thames and myself about the basis on which a proper return on investment is required. Nevertheless, it is true that for the current financial year the rate of return required by Thames is 0·5 per cent., which is the lowest target for any water authority, and for the coming year the target set for Thames is 1·37 per cent., which is still the lowest target for any of the 10 water authorities.

Will the Minister convey to the chairman of Thames water authority the admiration of many hon. Members on both sides of the House for the way in which he has resisted the Government's attempt for the first time, to make water a taxable commodity? Will the Minister convey our thanks to the chairman for standing up to the Government in the vigorous way that he has already done?

We are setting higher targets for the water industry as a whole, including Thames. I should like to join the hon. Gentleman in paying a tribute to Mr. Roy Watts — [Interruption.] Oh yes. The chairman of Thames water authority is fully aware of the fact that he was chosen by my right hon. Friend the Secretary of State to be chairman of Thames because he had the qualities that were required of the chairman. I pay tribute to what he has achieved. The dispute is about the rate of return that should be required on a current cost accounting basis.

Will my hon. Friend please explain why any financial return on capital is needed at all for this public utility operating in a monopoly beyond what is required for current outgoings, for provision for future construction and repair and for repayment of debt over a reasonable period, such as eight or 10 years?

Because it is the Government's policy that assets in the public sector should earn a proper rate of return. In that respect we are following precisely the principles that were laid down by the Labour Government in their White Paper in 1978.

When my hon. Friend met the chairman of the Thames water authority, did he discuss the denationalisation of that body? Is he aware that the board is in favour of such a course of action? Could he not agree with the chairman of the board on that objective at least?

I did not discuss that possibility with the chairman of Thames Water Authority on the occasion to which the question relates. My hon. Friend will be aware of a reply that was given last week by my right hon. Friend the Prime Minister to a question on this subject.

Is the Minister aware that we welcome his confirmation that Mr. Roy Watts has not only acted with courage but within his terms of reference, unlike the hon. Gentleman, who seems to be doing everything possible to exceed his in leaning on the chairman, second-guessing him, overruling him and imposing a tax on water consumers in the Thames area? Will the hon. Gentleman confirm that, by normal accounting methods, Thames Water is the seventh most profitable business in Britain? Will he also confirm that the current cost accounting methods he is seeking to impose are not widely employed in business in Britain and amount to an imposition by the Government of a naked tax on water consumers?

It is strange that there should be this conversion of the hon. Gentleman. The orders that will be debated tomorrow evening are the fourth and fifth orders that have been laid before the House. The first three orders, which were made under section 29 of the Water Act 1973 and which were calculated on exactly the same basis of current cost accounting, were not opposed by the Labour party. I remind the House of the conclusions reached by Price Waterhouse and Co. in its report in 1981 on the principle of current cost accounting. It said:

"The approach to current cost accounting, which has been adopted by the water authorities, is both soundly based and sensible."

asked the Secretary of State for the Environment what representations he has received from ratepayers concerning the likely level of rates for 1985–86; and if he will make a statement.

I have received a variety of representations. If authorities budget to spend at target the average increase in rates should be in low single figures.

Does my right hon. Friend agree that high rates are inimical to job creation and that there is much support for the Government's rate-capping proposals in areas such as Basildon, which is spending £600,000 on housing administration, and Lewisham, which has just commissioned a report that will cost the ratepayers of Lewisham about £5,000, into the psychological impact of golliwogs on children in Lewisham?

My hon. Friend has to suffer under the district council of Basildon, which is living in an unreal world, having increased its planned spending last year by 20 per cent. Undoubtedly, the ratepayers of Basildon will be helped considerably by the rate-capping that we are introducing this year.

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Does the Minister agree that the natural solution to the level of rates is to let those who have to pay them speak through the ballot box? Through various measures, such as the abolition of the GLC and metropolitan councils, and now rate-capping, the Government seem to think that democracy can be thrown out of the window at their whim. They will suffer as a consequence of that in future.

Only 18 out of the 413 local authorities will be rate-capped this year. This means that some 390 will be living within the system. Some of those authorities will be allowed—and are already predicting—very large rate increases. For example, Liverpool city council, which is not rate-capped this year, is predicting a very substantial rate increase. We feel that the Government share the responsibility for protecting ratepayers in the hard-pressed areas.

Could not my right hon. Friend hold out hope for hard-pressed ratepayers, and avoid the necessity for future rate capping, by bringing forward proposals to reform local Government finances in such a way as to reestablish the connection between voting and paying tax, the lack of which is one of the main reasons for the current problems in local government?

My hon. Friend is absolutely right. The link between the rate demand and the ballot box has grown very thin in many areas. This is one of the many matters that I am considering in my review of local government. I hope that it will be possible to bring forward proposals later this year for public discussion.

Does the Minister not understand that at a time of mass unemployment, when thousands of people are awaiting housing, and when, in many towns and cities, there is an aging population, local authorities need not less but more finance to provide for those problems, which have been directly caused by the present Government?

The hon. Gentleman represents part of the city of Liverpool. His city council is making such demands upon the national Exchequer that no Government could possibly meet them. I hope that that will not result in a grave crisis in the city of Liverpool later in the year. If the hon. Gentleman wishes to help to solve the housing crisis in Liverpool, he should persuade the city council to end its policy of buying co-operatives and instead to encourage co-operative housing development, which is what many of the people of Liverpool want.

In Leicester, which is to be rate-capped, I have received fewer than 12 letters expressing opposition to rate capping and more than 150 expressing approval of it. Will my right hon. Friend assure his Department that the majority in Leicester believe that rate capping is important for the future of the city?

I thank my hon. Friend for his robust defence of Government policy.

I must correct a wrong. I call Mr. Fatchett.

I am most grateful to you, Mr. Speaker. Despite the embarrassment that you caused my hon. Friend the Member for Houghton and Washington (Mr. Boyes), I thought that he did very well with his question.

Since 1979 we have succeeded in restraining the rate of growth in local government expenditure to 1 per cent. a year in real terms. In the 1960s and 1970s there was growth of about 3 per cent. a year in real terms. The 18 rate-capped authorities together account for excess spending this year of £550 million.

When Mr. John Clout, the leader of Conservative-controlled North Yorkshire county council, complained last month that of the 8·6 per cent. increase in the rates more than half was due to cuts in central Government grants, was he telling the truth?

Speaking from memory, I believe that in North Yorkshire there was an increase in grant this year. Several shire counties have suffered a reduction in grant this year, including my own county of Surrey, which has just announced a rate increase of 4·9 per cent.

asked the Secretary of State for the Environment what has been the response of water authorities to the Government's decision to revise their financial targets in 1985–86; and if he will make a statement.

Mixed. If I should catch your eye tomorrow, Mr. Speaker, I hope to make a statement then.

Can my hon. Friend explain the logic of the Government pursuing a strict anti-inflation policy and then deliberately imposing an increased scale of water charges on business and domestic consumers?

I understand my hon. Friend's point, but it is Government policy that a proper rate of return should be earned by assets in the public sector. As to the effect of inflation, a 1 per cent. increase in water charges would add one hundredth of 1 per cent. to the retail prices index. Mercifully, charges for water are a modest part of household budgets. Moreover, water charges are taken fully into account when calculating supplementary benefit, and 3 million households receive help in that way.

Will my hon. Friend think again, even at this late stage, as many of us do not see the logic of the Government's policy? What is more, many people outside will be angry when they receive their water rate bills in a couple of weeks' time.

I shall do my utmost to persuade my hon. Friend in the debate tomorrow.

Will the Minister come clean either now or tomorrow and admit that the Government are imposing a tax on users of water, whether private or industrial? There is a tax on gas and electricity for the benefit of the Government's coffers, and water authorities are now being used in exactly the same way.

I do not agree that the Government are imposing a tax on water. We are requiring a higher rate of return on assets owned by water authorities. A consequence of that higher rate of return will be higher investment and a reduction in borrowing. The latter is a central purpose of the Government's economic policy.

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Order. We must move on, but in the debate tomorrow I shall bear in mind those hon. Members who wished to get in on this important question.

On a point of order, Mr. Speaker.

Order. Does the point of order arise out of questions?

I cannot pretend that it does. If you cannot accept it now, Mr. Speaker, may I give notice that I intend to raise a point of order with you at the first opportunity?