Housing and Planning Bill

Lord Young of Cookham Excerpts

Tuesday 8th March 2016 Lords Chamber

If this job is going to be done properly, we should give serious consideration to alternative options that deliver the opportunity for right to buy for housing association tenants.

[Lord Young of Cookham (Con)]

Could the noble Lord explain the theology of the public financing of his proposal? I think he said at the start that this would not add to the deficit, but it would add to the PSBR. If that is right, is it the case that if the Government wanted to stay at the current level of PSBR in order to fund his ingenious proposal, something else would have to give?

[Lord Kerslake]

The noble Lord’s interpretation is correct. Because there is a third-party asset against the expenditure, it shows as debt on the Government’s balance sheet, but it does not show as deficit spending. That was the means by which the Government were able to rapidly expand the Help to Buy initiative; it does not score as expenditure in the traditional way. If the Government were to fund this initiative, they could either take a view about how much they are likely to spend on Help to Buy—and as I said last time, something like £3.8 billion of the £10 billion has already been committed in terms of Help to Buy, so there is still some headroom there—or, alternatively, they could look at whether they would take additional debt on to the balance sheet. Those are the two choices. We are between a rock and a hard place here. We are tying together two policies which, on the face of it, at best, it is a struggle to add up. The alternative is to go straight on to deficit. That is a third option which allows the Government to deliver the opportunity in a way that does not destroy the Chancellor’s intentions in relation to the deficit.