HC Deb 25 July 1966 vol 732 cc1194-5
22. Mr. Hilton

asked the Minister of Public Building and Works, to what extent the rise in the price of new houses in 1965 was due to a rise in building costs and to what extent it was due to higher profits or increased land prices.

Mr. Prentice

Between the fourth quarter of 1964 and the fourth quarter of 1965 the price of new houses on which building societies advanced mortgages rose by 10 per cent. and the cost of new construction by 4 per cent. The difference is due to a number of factors including, in particular, the higher cost of land.

Mr. Hilton

I am grateful to my right hon. Friend for that Answer and also for the fact that it proves that the construction industry is not responsible for this high cost. Does he not agree that, if the Government are still further to stimulate housing demand, one of the necessary steps is to make sure that the extra demand does not merely result in increased house prices?

Mr. Prentice

I will draw my right hon. Friend's attention to the latter part of that supplementary question, particularly the considerations in relation to mortgage policy. I agree with what my hon. Friend said in the earlier part of his supplementary question. The answer shows that the rise in new house prices last year was not primarily due to the industry itself.

Mr. Rippon

In view of the fact that his colleagues at the Ministry of Housing and Local Government seemed to be very confused and misleading about it, will the Minister confirm that the 10 per cent. increase in prices last year was a record since his Ministry began to keep records? Does he also agree that the record is almost certain to be broken this year?

Mr. Prentice

No, Sir. I would not agree with either of those propositions. The confusion the last time there were Questions about this was caused by the kind of supplementary questions asked by hon. Members opposite and not by anything said by the Minister of Housing and Local Government.

Mr. Urwin

Does the Minister recognise that the public is open to exploitation in relation to house prices in the private sector? Does he agree that the time is now opportune for him to liaise with his other colleagues in the Government with a view to asserting some control over this situation?

Mr. Prentice

The rise in house prices is disturbing. I hope that the fact that the country has been asked to observe a price freeze will be observed in this sector along with others.

Mr. Mawby

Has the right hon. Gentleman made any estimate yet of how much the price of houses will rise as a result of the Selective Employment Tax?

Mr. Prentice

Yes, Sir—of the order of 2 per cent., although much depends on the extent to which the tax is passed on. As I and as my right hon. Friends have often made clear, we hope that it will be absorbed to a large extent by increased productivity.

Mr. Rippon

On a point of order. I know that it is out of order to call a Minister a liar, but what can we do to correct a lying Minister?

Mr. Speaker

Order. The hon. Member should not have introduced the expression even in that way. I hope that he will withdraw his remark.

Mr. Rippon

On reflection, realising that I should not have said that, I withdraw it, but I resent the Answer which the Minister has given.