HOUSE PURCHASE (LOCAL AUTHORITY MORTGAGES) (Hansard, 24 March 1971)

§ The Minister for Housing and Construction (Mr. Julian Amery)
With permission, I will make a statement about the level of local authority mortgage lending for house purchase in 1971–72.
As the House knows, the Government attach a very high priority to the extension of home ownership. In pursuit of this aim, I am engaged in talks with the building societies which undertake the great bulk of mortgage lending. Their facilities are already very comprehensive, but I am considering with them how these could be improved. There are, however, important areas of mortgage demand which may not be wholly met under normal building society practice. Here, local authorities, with their special knowledge of local conditions and individual needs, can make a contribution yielding social dividends out of all proportion to the capital involved.
The previous Administration sought to limit local authority mortgage lending by putting a series of money ceilings on the finance available. At one point, indeed, in 1969–70, their ceiling for England and Wales sank as low as £30 million.
I have concluded that the extension of home ownership will best be served by abolishing the money ceilings. At the same time, I am asking the local authorities to limit their lending to categories of borrowers who might not qualify for a building society loan or who are otherwise in need.
The principal categories will be:
Homeless people.
538 People living in overcrowded conditions, or conditions otherwise detrimental to health.
People displaced by slum clearance or, indeed, other development.
People who want to buy older and smaller homes unlikely to attract a commercial mortgage advance.
People high on the local authority's waiting list.
Existing tenants of the local authority.
Members of self-build groups.
People who wish to buy larger property with a view to letting a part of it in areas where there is overcrowding.
People who want to buy a house in or around a development area or in an overspill receiving area.
I would also consider proposals by local authorities to lend to other categories of people whose needs in the area concerned seem of broadly the same priority.
My officials have discussed these proposals with the local authority associations which, I am advised, regard them as a considerable step forward. They see no difficulty in arranging with my Department to keep a running check on the capital expenditure involved. Special arrangements are under discussion with the Greater London Council since it and the London borough councils lend within the same area.
My right hon. Friends the Secretaries of State for Scotland and Wales have authorised me to say that they are proposing to proceed on similar lines.

§ Mr. Crosland
The Secretary of State announced on 3rd November a comprehensive new housing policy. This is only one very small and partial glimpse in that Pandora's box.
Is the Minister aware that we certainly welcome this statement if it leads to a real increase in local authority lending? It is fully in line with Labour policy. Indeed, it was exactly a year ago that the Labour Government raised to £155 million the ceiling on local authority lending.
I have three specific questions for the Minister. First, will this lead to an increase in lending, or is it window dressing? In other words, how far have the 539 local authorities got towards the present ceiling of £155 million?
Second, to what extent does the Minister expect that this will lead to an increase in housing building?
Third, is the Minister aware that the real cause for worry at the moment is the decline in local authority building, a decline strongly encouraged by the Secretary of State's admonitions to Tory Councils, a decline which this statement will do nothing to reverse, and a decline which the threatened movement to so-called fair rents will certainly intensify? When will the House have a statement on the full implications of the Government's housing policy?

§ Mr. Amery
I have had occasion previously to refer to the statements of the right hon. Member for Coventry, East (Mr. Crossman), and I do not propose to do so today. In reply to the right hon. Gentleman's claim that this is in harmony with Labour policy, I can only say that the policy adumbrated by the right hon. Member for Coventry, East was dropped in 1967 by Lord Greenwood and that the Labour Government transferred support from the idea of rationing by category to rationing by ceiling.
The right hon. Gentleman asked me three specific questions which I will do my best to answer. He asked me, first, whether this will lead to an increase in lending. I should be surprised if it did not lead to a dramatic, perhaps spectacular, increase in local authority lending. [An HON. MEMBER: "Give us a figure."] What we are doing is not trying to limit by a ceiling but to limit according to the needs of people. I hope that I have dealt with that point sufficiently. This is the most important of all. The House will find that when we come to measure the outturn—it will not be very long before we do so—we shall be facing perhaps the greatest overall increase in mortgage lending by local authorities in all our history.
The right hon. Gentleman asked whether this would lead to an increase in house building. The main purpose is to provide home ownership for those who cannot tap the building society market. So a good deal of this money will go into the buying of existing properties. There is no harm in that. This will 540 provide relets for council houses and new accommodation for others.
Local authority building seems out of context with what I have been talking about. However, I shall always be glad to receive representations from the right hon. Gentleman. What we are doing is the most spectacular attempt to help local authorities to encourage home ownership which has been made since the war.

§ Mr. Boyd-Carpenter
Is my right hon. Friend aware that his reversal of the previous Government's policy of limitation, which caused so much unnecessary hardship in London in particular, and the greater encouragement which he is giving to home ownership, results from this Government attaching greater importance to home ownership than did the previous Government or to better financial and economic management, or to a bit of both?

§ Mr. Amery
I am grateful for my right hon. Friend's intervention. I think it is a bit of both. But I should also stress that we are trying to bring home ownership within the reach of those in need who otherwise may not have the means.

§ Mr. David Steel
Will the right hon. Gentleman say whether in his talks with the building societies he has encouraged or will encourage them to advance 90 to 95 per cent. loans to young married couples for property other than new houses, which has been the real problem in the past?
In view of the grave imbalance between public and private ownership of post-war housing in Scotland, will the right hon. Gentleman, or the Secretary of State for Scotland, impress on the local authorities in Scotland the need to give mortgages on older properties there?

§ Mr. Amery
The hon. Gentleman has asked about my talks with the building societies. My statement today is confined to local authority lending. I hope that the hon. Gentleman will be grateful for the large mercies which we have advanced. I will make a statement about the building societies when I have concluded my discussions with them. I should be grateful if the hon. Gentleman would put his question to the Secretary of State for Scotland, not to me.

§ Mr. Julius Silverman
Whilst broadly welcoming the Minister's statement today, will not this be quite meaningless unless local authorities use the powers vested in them?
Will the Minister tell us how many local authorities at the present time are not lending up to their quotas? To my knowledge there are quite a large number not doing so. Also, what steps will the Minister take to ensure that local authorities use their powers and lend the money to those who need it?

§ Mr. Amery
One of the reasons which led me to the decision which I have just announced was that under the system inherited from the previous Government Liverpool, Sheffield, Leeds and several London boroughs had to stop lending money in the autumn of last year because there was no money left for them to lend.

§ Mr. Allason
Will my right hon. Friend give widespread publicity to the advantage of home ownership in order that a very large number of people can avail themselves of his generous scheme?

§ Mr. Amery
My hon. Friend is right to stress the point that possession of an asset like a home is a great advantage for anyone who sees an opportunity or is faced with a misfortune. We should encourage this as much as we can.

§ Mr. Blenkinsop
Will the Minister give special attention to the position of the development areas because of the need for wider choice of homes in those areas? Will he consider withdrawing the special categories from those areas because of the general need to encourage building?

§ Mr. Amery
I should stress that the right hon. Member for Coventry, East (Mr. Crossman) tried to limit categories. I have tried not only to give certain categories which will be eligible but to say that I will also consider other categories where equivalent priority can be established.

§ Mr. Tebbit
Does my right hon. Friend accept, first, that the mean and carping reception given to his statement by right hon. and hon. Gentlemen opposite is probably not because they do not want to encourage home ownership but because they are tired and dispirited after traipsing through the Lobbies last night?
542 Secondly, will my right hon. Friend give an estimate of how much expenditure from public funds we can expect from this new proposal?

§ Mr. Amery
I agree with my hon. Friend about the failure of right hon. and hon. Gentlemen opposite to keep the red flag flying this morning. This was noted by hon. Members on both sides of the House.
I cannot give any estimate of the cost, because what we have done is to lift the ceiling. However, I should be extremely surprised if it did not involve a very substantial increase on any limit set by the previous Government.

§ Mr. Buchan
Does the Minister agree that whatever this proposal may do for England it is of no relevance to the Scottish situation? is it not time that we had an answer from the Secretary of State for Scotland on this matter? In Scotland it will be seen as replacing a financial ceiling with a tragic human ceiling, because the first three categories which he mentioned—the homeless, the overcrowded, and those high on the list for council houses—are precisely the people who can afford it least, and this will not serve as an excuse for the Scottish Office to fall back even further in the housing programme. I hope that the Minister will tell his right hon. Friend that.

§ Mr. Amery
It is not for me to speak about Scottish matters; but, with my right hon. Friend's permission, I should think that what I have just said would be very much welcomed by the homeless in Glasgow. Perhaps the hon. Gentleman would care to put down a Question to my right hon. Friend.

§ Sir H. Legge-Bourke
I warmly welcome my right hon. Friend's statement today. Will he bear in mind that many people, because of the comparatively low basic rate of remuneration which they draw compared with their actual earnings, be they agricultural workers or road haulage drivers, are very often prevented from getting a building society loan or mortgage? Will my right hon. Friend therefore consider suggesting to the local authorities that it is these categories of worker which might particularly be eligible for this help?

§ Mr. Amery
Yes. I think that my hon. Friend will follow from what I said in my statement that, apart from the categories which I have defined, I am ready to receive representations from local authorities about particular classes of people which would also qualify for the same kind of priority. They would vary from area to area and might be the kind of people to whom my hon. Friend was referring.

§ Mr. Simon Mahon
Is the right hon. Gentleman aware that those who come from areas like Merseyside always appreciate and welcome anything which makes the housing situation in such places a bit easier? I have never objected to people buying their own homes. I agree with it in principle and I always have. I do not remember my party differing from me in any way on that issue.
Does the Minister agree that it has always been hard to purchase houses? Therefore we welcome what he is doing. But if the principle is good for some is it not also good for the war disabled, the disabled and the chronic sick?

§ Mr. Amery
I am prepared to review all categories of this kind, if they are proposed to me by the local authorities, and I welcome what the hon. Member has said. I was very glad to hear him say that he has no objection to the extension of home ownership. Perhaps the difference between his party and ours is that we welcome it, as well as having no objection to it.

§ Mr. Hugh Jenkins
Is it not regrettable that the Minister did not mention newly married couples as one of his categories? Is this not a very great need? What action does he propose to take to meet the needs of these couples, which cannot be met in many other ways? Is it not also true that in May, when we recapture control of many local authorities, we shall start spending the money? Will the right hon. Gentleman undertake that when that happens he will not seek to put any ceiling on it?

§ Mr. Amery
The hon. Member is on to a very good point when he mentions newly married couples, and I am well aware of their need. Of course, many of them would be able to meet their 544 need through the building societies. Others would come into the categories which I have mentioned. I do not wish to make newly married couples a category in themselves. I know many who are quite well off and do not need to qualify for this special provision. Of course I shall not be influenced by the political colour of a local authority. In helping it to extend home ownership I will do everything I can to help.

§ Mr. Crosland
Is the right hon. Gentleman aware that through the introduction of the option mortgage scheme, through the encouragement of local authority mortgage lending and through the introduction of 100 per cent. mortgages, the Labour Party did more than any previous Government to encourage private home ownership? Is he also aware that under the Labour Government for the first time in British history 50 per cent. of our houses were owner-occupied?

§ Mr. Amery
It would be difficult to pervert the truth more totally than the right hon. Gentleman has just done.

Several Hon. Members
rose—

§ Mr. Speaker
Order. We appear to be entering the area of debate rather than the search for information. I must protect the business of the day.

§ Dr. Dickson Mabon
On a point of order. If it is in order for the Minister for Housing and Construction to answer on behalf of other Ministers and to say that he is making a statement on behalf of other Ministers, is it in order for that same Minister then to refer fair questions which are put to him to other Ministers to be answered at some other time? Is this not a complete abuse of the procedure of the House? Is it not unfair that we should be left in this state of dissatisfaction? Why does the Secretary of State hide behind the Minister in this?

§ Mr. Speaker
It may be right or wrong, it may be fair or unfair, but it is not a matter for the Chair. Ministers must take responsibility for their own answers.

§ Mr. Freeson
Further to that point of order. Reverting to your remark, Mr. Speaker, that this should be a time for seeking after information, could I draw your attention to the fact that one specific 545 question seeking information was not answered? Perhaps the Minister would like to take the opportunity—

§ Mr. Speaker
Order. I was encouraged when I was elected to try to avoid what one of my predecessors, using a rather strong epithet which I have never used, called "fraudulent" points of order. The content of a Minister's answer has nothing to do with the Chair; whether or not he has answered, or what he has said is not for me. If the House changes its Standing Orders and makes it a matter for me, then I would be very ready to comment, but at the moment I have no power to do so.

§ Mr. Freeson
Further to that point of order—

Hon. Members
Sit down.

§ Mr. Freeson
I am addressing Mr. Speaker. You did use rather strong language just now, Mr. Speaker. You are entitled to do so, but may I draw your attention to the fact that I was not a sking—

§ Sir H. Legge-Bourke
Arrogant.

§ Mr. Freeson
—for a bogus point to be settled. I was asking not for an answer to be queried but for the answer to a question which was not given to us at all.

§ Mr. Speaker
I certainly do not want to be unauly unfair or strict with the hon. Member. I am in the hands of the House on this. The Chair can only be as strong as the House will allow it to be, but I have had it impressed upon me again and again that I must try to stop points of order which are not points of order—[HON. MEMBERS: "Hear, hear."] When hon. Members on one side applaud that statement, I hope they would applaud equally strongly a similar comment on a point of order coming from their own side of the House. This is a matter in which the whole House is interested. One 546 must try to get on with the business according to the rules of order.

Several Hon Members
rose—

§ Mr. Buchan
On a point of order and genuinely seeking your guidance, Mr. Speaker. This has now become a general practice. This is not a particular point on a particular question nor the particular Minister who has answered today. But it has now become the general practice that statements have been made with which the Secretary of State for Scotland has been associated. When we have asked questions about them, we have been told that they should be referred to the Secretary of State, who by definition of the statement is not coming before the House to make the statement. How, then, are we to be protected in this way? Perhaps the Leader of the House may wish to answer this rather than you, Mr. Speaker.

§ Mr. Speaker
The hon. Member is on a real point, but it is not for me to attempt to answer it. This is a matter for representations—

§ Mr. Buchan
For the Leader of the House.

§ Mr. Speaker
No, it is a matter for representations, I think, through the usual channels, to see whether the wishes of the House can be met in this matter. It is not a question of order for me at a time when we have a very important debate in front of us.