HC Deb 28 March 1973 vol 853 cc1291-2
17. Mrs. Sally Oppenheim

asked the Secretary of State for the Environment if he will introduce legislation to provide a scheme of interest-free Government grants to assist young married couples to buy their first home.

Mr. Channon

First-time purchasers are already assisted through tax relief on mortgage interest or the option mortgage subsidy. But the most effective way of helping all purchasers is by increasing the rate of new private housebuilding.

Mrs. Oppenheim

In the excellent scheme proposed to me by Councillor John Robbins such grants as would be repayable if the house were sold would have the double advantage of reducing both the initial deposit and the total repayment for young couples who would otherwise find it impossible to purchase their own homes. It would also take the pressure off council waiting lists, and the cost would be considerably less than that of providing council accommodation for such couples in the medium term.

Mr. Channon

Naturally I shall look at any suggestions from my hon. Friend with the greatest care. I am anxious to make sure that any suggestions for help, such as this, do not merely increase the demand. Unless we can increase the supply house prices will be pushed up further.

Mr. Crosland

With respect, the question is ridiculous. We are not discussing interest-free Government grants; we are discussing 9½ per cent. building society loans. Will the Minister care to comment on the fact that it is now generally agreed that at its next meeting—which by an odd coincidence will take place the day after the county elections—the Building Societies Association is certain to put up the interest rate to 9½ per cent., and may well go beyond that? Is that in line with the Government's policy? Has the Minister given one second's consideration to the practical proposals for avoiding these mad fluctuations by such methods as a building society stabilisation fund?

Mr. Channon

Naturally, I consider not only suggestions from my hon. Friend but any suggestions that the right hon. Gentleman cares to put forward. I am not prepared to answer a hypothetical question about what might or might not happen on 13th April.

Sir Harmar Nicholls

Will my hon. Friend refuse to be deviated from his promise to examine the proposals put forward by my hon. Friend the Member for Gloucester (Mrs. Sally Oppenheim)? There is nothing ridiculous in giving all the help possible so that young people may become house owners.

Mr. Channon

I think that the whole House will agree with that.

Mr. Frank Allaun

Does the Minister accept that the Government are responsible for the 9½ per cent. or 10 per cent. interest rate? If there is a high interest policy without a stabilisation scheme as proposed by my right hon. Friend the Member for Grimsby (Mr. Crosland) the building societies have no choice in the matter.

Mr. Channon

We shall have to wait and see what happens on Friday 13th April.