HC Deb 16 December 1969 vol 793 cc1109-10
12. Mr. Murton

asked the Minister of Housing and Local Government if he will take steps to secure a reduction in the existing rates of mortgage interest.

70. Mr. Lubbock

asked the Minister of Housing and Local Government if he will take steps to reduce mortgage interest so as to make home ownership easier.

Mr. Denis Howell

Mortgage interest rates could not be reduced without also reducing building societies' rates to investors, and at present this would seriously affect the supply of mortgage finance. Borrowers with option mortgages will however pay lower rates of interest as a result of the changes my right hon. Friend has recently made in the option mortgage scheme.

Mr. Murton

Does not the hon. Gentleman agree that it would be better if the historically high rates of interest obtaining at present in this country were reduced? Does this not bring sorrow to the hearts of all young people still unable to obtain mortgages for new homes? Will he not urge the Government to do something about it?

Mr. Howell

That is rather different advice from what I was getting late last night from the hon. Member for Crosby (Mr. Graham Page) who, on behalf of the Front Bench opposite, was making the point that interest charges to local authorities are too low.

Mr. Graham Page rose

—

Mr. Frank Allaun

In view of the seriousness of the house building situation and the greatly improved financial situation of the country, could not my hon. Friend consider giving a margin to lower-paid workers on mortgages not just of ½ per cent., bringing it to 2½ per cent., but something like 5 per cent. which would restore the building programme and help people on low incomes?

Mr. Howell

We want to do all we can to facilitate mortgages for lower-paid workers. If my hon. Friend or any other hon. Member has any specific proposals, we will study them. The difficulty is keeping the whole of what the Government do within the bounds of public expenditure.

Mr. Graham Page

Is the hon. Gentleman aware that he has deliberately misled the House about what I said last night? I was then asking him how the Government intended to hold interest rates down, having regard to the great rise in them over the past few months?

Hon. Members

Withdraw.

Mr. Howell

Far from withdrawing, I will sustain the point I was making. Hon. Members can read it for themselves in HANSARD. The hon. Gentleman was drawing an unfavourable distinction between the lower rates of interest to local authorities and the higher rates of interest for the Save-As-You-Earn scheme.