HC Deb 23 April 1969 vol 782 cc447-8
7. Mr. Clark Hutchison

asked the Secretary of State for Scotland what he estimates will be the effect upon the housing programme in Scotland of the 8 per cent. Bank Rate.

Mr. Ross

The direct effect of Bank Rate on new construction is small. From the parallel increase in market rates local housing authorities are protected in considerable measure by the subsidy system introduced in 1967. The effect of increased mortgage rates on the private sector was the subject of a debate on 19th March.

Mr. Hutchison

But in view of the great importance of housing and the cost to local authorities and others of the interest rates, can the Government look into the possibility of something like a housing bank or special account isolated from everything else, which can lend at very low rates?

Mr. Ross

That is a reasonable suggestion, and I shall certainly consider it. The hon. Gentleman should appreciate that by our subsidy system introduced in 1967 we have created considerable protection for the local authorities from fluctuations of interest rates, as compared with, say, 1962, when there were high interest rates and the house building programme for local authorities in Scotland fell to 18,900.

Mr. William Hamilton

Will my right hon. Friend give an assurance, first, that the 40,000 figure of completions will be reached this year, and, second, that we shall never again get down to the very low figures produced by right hon. and hon. Gentlemen opposite?

Mr. Ross

I can assure my hon. Friend that I am not at all pessimistic about the outcome of our house building programme for this year. The thing to appreciate is that we have 55,000 houses under construction.

Mr. Gordon Campbell

Can the right hon. Gentleman explain the very sharp drop in the number of houses completed in the first quarter of this year compared with the numbers completed in the same quarter last year?

Mr. Ross

The number of houses completed varies from quarter to quarter and year to year. I can assure the hon. Gentleman that I am not as pessimistic as he is about the target which we hope to achieve this year.