HC Deb 25 July 1967 vol 751 cc299-301
11. Mr. Channon

asked the Minister of Housing and Local Government if he will make a statement about his policy in regard to the availability of local authority mortgages.

15. Mr. Boyd-Carpenter

asked the Minister of Housing and Local Government, following his letter to the Greater London Council, what alternative arrangements he proposes to make to enable the Greater London Council to continue their home loans scheme.

25. Mr. Berry

asked the Minister of Housing and Local Government what plans he has for providing further finance for local authorities' home loans schemes within the Greater London area.

Mr. Greenwood

I have nothing to add at this stage to the reply which I gave to questions by the hon. Member for Bromley (Mr. Hunt) and other hon. Members on 20th June, 1967.—[Vol. 748, c. 209–10.]

Mr. Channon

Since there is so much money available for the building societies to lend, why is it necessary to impose so many restrictions on local authorities, which are having a disastrous effect on many local authorities' mortgage schemes?

Mr. Greenwood

We have to keep some limit upon local authority expenditure. We have said that we would have no objection to local authorities coming to terms with building societies provided we were satisfied that the funds made available in that way were funds that would otherwise be used for housing purposes.

Mr. Boyd-Carpenter

Is the right hon. Gentleman aware that his hon. Friend's letter brought lending by the G.L.C. for house purchase to a complete halt? Is he aware that this has caused great hardship and disappointment to would-be home buyers in this great city? As house purchase, as a form of contractual savings, puts the least burden on the economy of all forms of house provision, will not the right hon. Gentleman intervene to see that lendings are resumed and that the homeless are able to get themselves a house in a satisfactory way?

Mr. Greenwood

Any form of public expenditure which competes with other forms of public expenditure tends to be inflationary in its effect. This year we are making available in the Greater London area £51 million as against £65 million last year, but as against £43 million in the last complete year of the previous Administration.

Mr. Berry

Would not the Minister agree that the reduction of £15 million in the current year merely means that 7,500 London families will not be in their own homes during the coming year and that, even if the figure be increased by £15 million, there will still be only enough for those needed for medical reasons and gross overcrowding? Should not the Government in their third year do somethink about this urgently?

Mr. Greenwood

I am not sure on what the hon. Gentleman bases his figures. Out of a total of £130 million made available this year for the country as a whole, as against £135 million last year, £51 million is going to London. I have to try to strike a balance between the requirements of London and the rest of this country. This is a very fair apportionment of the funds available.

Mr. John Fraser

Is the right hon. Gentleman aware that the Greater London Council's lending stands at a record total of £192 million and, on general building society experience, £19 million will be repaid in capital repayments and redemptions each year? Is that £19 million to be made available again for relending or does it form part of the Minister's total of £30 million?

Mr. Greenwood

The total sum available remains the same. Obviously as more and more is lent each year the repayments also grow. The point that we have to bear in mind is that the in crease in local authority borrowing is an inflationary factor.

Mr. Rippon

How does the Government justify conditions so harsh that a growing number of local authorities in England and Wales, quite apart from London, are having to give up their home loan schemes altogether?

Mr. Greenwood

At the end of December we had a meeting with the local authority associations. They expressed the view that they did not like the previous system of having categories of loans, that they would prefer a quota, and the suggestion put was that the quota should be based on average lending for the three years ending 31st March, 1965. This was accepted by the local authority associations as a reasonable proposition, although the G.L.C. admitted that it would mean some limitation on the number of advances it was able to make.