Mortgages (Interest Rates) (Hansard, 2 February 1965)

§ 9. Mr. Peter Walker
asked the Minister of Housing and Local Government whether he is aware that Her Majesty's Government's policy not to introduce legislation during this Parliamentary Session on the subject of interest rates for mortgages has caused uncertainty amongst those contemplating house purchase; and whether he will give an assurance that any major design to reduce interest rates shall apply to all persons repaying mortgages and not just those taking up new mortgages.

§ 10. Mr. Ian Gilmour
asked the Minister of Housing and Local Government what proposals he has made to the Building Societies Association with a view to enabling its members to reduce mortgage rates.

§ 18. Mr. Ridsdale
asked the Minister of Housing and Local Government what proposals he has for alleviating the high cost of mortgages to young married couples.

§ 23. Mr. Geoffrey Lloyd
asked the Minister of Housing and Local Government what proposals he has for alleviating the high cost of mortgages to young married couples.

§ 30. Mr. Dudley Smith
asked the Minister of Housing and Local Government if he will now take steps to ensure the reduction of current mortgage rates to 3 or 4 per cent.

§ 34. Mr. Evelyn King
asked the Minister of Housing and Local Government what progress he is making in the discussions he is having with a view to providing for lower interest rates on house mortgages.

§ 36. Mr. Fisher
asked the Minister of Housing and Local Government what action he proposes to take to help home owners, in the light of the higher mortgage interest rates announced by the Building Societies Association.

§ 37. Mr. Dance
asked the Minister of Housing and Local Government when he expects to announce details of low interest loans to house purchasers.

§ Mr. Crossman
It remains the Government's intention to take action as early as practicable to reduce the burden falling on house purchasers. In carrying out their social programme the Government decided that priority must be given to measures for the relief of the old and the sick. As I have already informed the House, I also wish first to complete the review of housing subsidies and finance. It will therefore not be possible to introduce legislation on house purchase this Session. Preparatory work is proceeding, but I am not yet in a position to give details of the proposals which the Government will be making.

§ Mr. Walker
Will the right hon. Gentleman now consider answering my Question, whether the legislation which will be introduced next Session will apply to all those involved with mortgages or just to those taking out new mortgages?

§ Mr. Crossman
This is one of the questions we are considering. All I would say is that the second alternative is not excluded.

§ Mr. Gilmour
In view of the fact that the high interest rate is a direct result of Government policy, would not it have been open to the Government to change their policy instead of abusing the building societies?

§ Mr. Crossman
I am grateful to the hon. Gentleman. He has put to me fairly what we are trying to do. He is quite right. The proper attitude to high interest rates is to get them down and not, in this emergency, to tinker with legislation. We want a permanent solution to the problem of interest rates. I am grateful to the hon. Gentleman for his suggestion. The best thing to do is to get the interest rates down.

§ Mr. Ridsdale
In view of the pledge of the Labour Party at the last election, can the Minister say what would be the 879 cost of reducing the mortgage rate to 3 per cent.?

§ Mr. Crossman
The hon. Gentleman knows quite well that that was not a pledge in the manifesto—[HON. MEMBERS: "Oh."]—I remember quite clearly. We are pledged, as a party, to help house purchasers with their interest rates. We shall do so and there is, therefore, no calculation to make, since we gave no specific figure of the reduction.

§ Mr. Lloyd
With regard to the reference to 3 per cent. made by the Minister's colleague, the First Secretary of State and Secretary of State for Economic Affairs, shall we soon hear from the Prime Minister that he has no responsibility at all for this—like Leyton?

§ Mr. Crossman
I suggest to the right hon. Gentleman that he might put the question to my right hon. Friends the First Secretary and the Prime Minister. I make this reply to him. I find it very strange that hon. and right hon. Gentlemen opposite who for 13 years under a Tory Government watched interest rates for house purchasers rising steadily, should have been so rapidly converted by their 100 days of opposition into ardent advocates of what we have been advocating for years and what we shall, of course, do—which is to lower the interest rates to house purchasers.

§ Mr. Dudley Smith
May I ask whether the Minister is aware that a significant number of otherwise pro-Tory electors in key marginal constituencies voted for his party at the last election purely because of the pledge that the mortgage rate would be reduced to 3 per cent. given by the First Secretary of State and Secretary of State for Economic Affairs? Does not the right hon. Gentleman think that he owes it to these poor miserable people to take action now, to make sure that this is one pledge which is not broken?

§ Mr. Crossman
Let me repeat to the hon. Gentleman what I said before. We are going to honour our pledges with the proper priorities—[HON. MEMBERS: "When?"]—and we have already honoured a major pledge to the old and to the sick which we promised would come first. We made perfectly clear that this was a five-year programme and there was no question of doing everything in 880 the first Session, let alone in the first three months. I will say to the hon. Gentleman that he will find that these people are going to have these pledges honoured to them, and they will respect us for doing so in the right order.

§ Mr. Fisher
In view of the preface to "The New Britain"—[HON. MEMBERS: "Reading."]—

§ Mr. Loughlin
On a point of order, Mr. Speaker. Is it in order to quote from a document at Question Time?

§ Mr. Speaker
It is not in order to quote verbatim from a document in a question.

§ Mr. Fisher
May I put it in this way? Does not the right hon. Gentleman feel a certain embarrassment in postponing to the indefinite future the keeping of his party's election promise because, in the light of Leyton and Nuneaton, if the right hon. Gentleman does not honour it now he may not be able to keep the promise at all?

§ Mr. Crossman
So far from postponing this to the indefinite future, I am now actively engaged in sorting out the alternatives and in preparing legislation. There will be no postponement to the indefinite future. These are plans which will be carried out. I will say this, that those people opposite who are chiefly responsible for the high rates of interest have no right to complain.

§ Mr. Boyd-Carpenter
Is the right hon. Gentleman aware that his failure to give the assurance asked for in Question No. 9 must inevitably discourage young couples from taking out mortgages for the time being, because otherwise they might find themselves saddled with higher rates of interest than is necessary? Is that the intention of the Minister? Is the right hon. Gentleman further aware that his remark about fulfilling pledges in due order might carry weight if rates of interest had remained constant, but that there is an air of cynical detachment about this Government presiding over an increase in these rates in the face of their declared pledge to reduce them?

§ Mr. Crossman
There is actually no evidence whatever, accordinig to reports from building societies, of any falling off in the numbers of those who wish to become house purchasers. It is very 881 striking that the demand has been sustained despite the high interest rates. I should like to get the rates down. I repeat what I said before, that really it is intolerable that hon. Members opposite, who are responsible for creating the conditions under which we had to raise the Bank Rate, should start talking as if they had nothing whatever to do with it.

§ Mr. Frank Allaun
I look forward to the early introduction of cheap loans, but is it not odd that the building societies have increased their borrowing rates by ¼ per cent. and raised their lending rates by¾ per cent.?

§ Mr. Crossman
I repeat, in answer to my hon. Friend, what I think the Prime Minister said a few days ago: "Whatever they did they claimed to do it because of the Bank Rate and I hope that they are going to take it down again as quickly as they put it up."

§ Mr. Boyd-Carpenter
Is the right hon Gentleman aware, in view of his remark about the intolerable nature of those who remind him of his election pledges, that those pledges were given with a full knowledge of the circumstances by himself and his right hon. Friends, and that it cuts no ice at all to follow what is now the normal practice of trying to blame someone else for this Government's failure?

§ Mr. Crossman
I repeat once again that our election pledges were a five-year programme. The Opposition are now trying to make party political capital out of the fact that the whole of the programme has not been done in three months. That is plainly ridiculous. It is quite clear that the average elector, when he studies this kind of party political attack, will begin to realise the insincerity of those who make it.

§ Mr. Peter Walker
In view of the unsatisfactory nature of that Answer, beg to give notice that I shall raise the matter on the Adjournment.