HC Deb 16 February 1994 vol 237 cc930-2
3. Mr. Knapman

To ask the Secretary of State for the Environment what uptake he expects of the rent-to-mortgage scheme.

The Minister for Housing, Inner Cities and Construction (Sir George Young)

The early response to the scheme has been encouraging, although it is as yet too early to say how many of the 1.5 million tenants who are eligible will take advantage of it.

Mr. Knapman

I am grateful to my right hon. Friend for his considered reply. Does not the success of the scheme depend on the level of interest shown in it? Had the Opposition parties been in power, what level of interest would there have been?

Sir George Young

My hon. Friend rightly points out that the scheme is of interest to 1.5 million local authority tenants who would not have the choice that is now available to them had we listened to Opposition Members. I hope that all hon. Members will bring to the attention of their local authority tenants the potential of the rent-to-mortgage scheme, which will be of interest to the 1.5 million local authority tenants who are paying their rents in full.

Mr. Soley

Does the Minister remember just before the last general election accepting a mortgage-to-rent scheme that I proposed, at least in part? The then Chancellor of the Exchequer, supported by the Minister, said that the scheme would save thousands of people from being repossessed and going into bed-and-breakfast accommodation. That was therefore a similar sort of scheme. Why did the Government say before the election that they would save thousands of those families, but fail to do anything afterwards?

Sir George Young

That is a good example of Opposition Back Benchers implying that the Labour party is committed to substantial public expenditure when they know perfectly well that Opposition Front-Bench spokesmen have distanced themselves from any such commitment.

The last figures were published in January and showed a welcome reduction in the number of repossessions and most forecasters agree that the figures will continue to fall.

Mr. Waterson

Is not the golden thread running through the rent-to-mortgage scheme, the right to buy council homes and leasehold enfranchisement that Conservative Members believe in people having control over their own lives? Does my right hon. Friend agree that that proposition has never been welcomed by Opposition Members?

Sir George Young

My hon. Friend makes the point in his characteristically clear way. The Conservative party is interested in choice and in giving people the opportunity to make decisions about their lives. Opposition Members want to deny people that choice.

Mr. Simon Hughes

Before the Minister gets too enthralled by the golden thread of rents to mortgages, let me point out that, as he knows, many people who have bought under the right-to-buy scheme, to which the hon. Member for Southampton, Itchen (Mr. Denham) will later allude when he introduces his Assistance for Local Authority Leaseholders Bill, are finding it impossible to sell their homes or pay for the capital or service charges. Can he tell them when he will relieve them of the consequences of buying under the Government's scheme, before he puts other people in a similar position?

Sir George Young

As I think that the hon. Member will agree, most of those who bought flats from their local authorities did so with the benefit of substantial discounts, also benefited from the fall in interest rates and in no way regret the decision. A minority—

Mr. Battle

Seventy thousand.

Sir George Young

It is nowhere near 70,000. A minority of those who bought are having difficulty selling their flats. My Department is having discussions with the Council of Mortgage Lenders and the local authorities. We are encouraging some local authorities to follow the example of authorities such as Wandsworth, which gives mortgage indemnities to those who want to buy flats. I urge all local authorities to consider whether they have a role to play in proposing mortgage indemnity schemes—48 are doing so—or doing what the London borough of Enfield has done and buying the flats back.

Mr. Harry Greenway

Should not that excellent scheme now be extended to housing association tenants? Will my right hon. Friend look at the ways in which that could be done, despite the early opposition in another place to home purchase by tenants of housing associations?

Sir George Young

As my hon. Friend knows, housing association tenants do not have the opportunity to take up rent to mortgage, because housing associations use private finance to supplement their resources to build new homes. We have given those tenants opportunities to get access to home ownership by extending the tenants' incentive scheme, which gives them the cash sums that they need to purchase homes in the open market. To some extent, that is a broader choice, because it does not confine them to buying the home in which they currently live.