HC Deb 06 February 1974 vol 868 cc1208-10
16. Mr. Horam

asked the Secretary of State for the Environment if he will make a statement on the progress of Government talks with the building societies.

Mr. Channon

The Government are in continuous contact with the Building Societies Association through the joint advisory committee set up under the voluntary agreement on mortgage finance. I hope that in the longer run the committee will make a useful contribution to the resolution of problems in the private housing sector.

Mr. Horam

Does not that bankrupt answer reveal what an utter failure the Government's policies have been regarding mortgages? What use is it to a young couple wanting a mortgage for which the going rate of interest is 11 per cent. to be told that there is this joint advisory committee? Why do not the Government admit that they have to all intents and purposes given up?

Mr. Channon

What is certainly no good to young couples is the sort of remark the hon. Gentleman has made. What the Government have been attempting to do has been, first, to devise a system of having a more stable flow of mortgage funds. We all know the difficulties in the short term. In the long term this committee may well make a very important contribution to the solution of the problem. The House will be aware, too, of the discussions which have been going on about the introduction of a scheme to help first-time purchasers.

Mr. Gardner

Does not my hon. Friend accept that it is essential that everything should be done to encourage those who want to own their own homes? It is equally important that everything should be done to avoid the temporary, abnormal and, one hopes, only immediate high rates of interest which at present discourage people from buying their own homes.

Mr. Channon

I agree with everything my hon. and learned Friend says. He will not expect me to speculate about the future movement of interest rates. That would be a matter for my right hon. Friend the Chancellor of the Exchequer. I certainly share the sentiments he expressed about home ownership.

Mr. Crosland

The Minister said that in the long run the joint advisory committee might well produce important solutions. Unfortunately we all have many constituents who cannot wait for the long run. They want a house in the short run, and they want lower mortgage rates in the short run. It is now about 18 months since I in the House and others outside the House started pressing for the concept of the stabilisation of building society lending. Is it really the case that the joint advisory committee, which was set up last spring, has been utterly unable in that time to make a single proposal which would either affect the rate of mortgage lending or be able to stabilise the supply of mortgage funds? It seems to have been the most extraordinarily dilatory operation.

Mr. Channon

The right hon. Gentleman is being very unfair. The committee provides a forum in which these matters can be discussed. Indeed, it provides a method of trying to ensure for the future a more stable flow of mortgage funds. What we are faced with at present is the difficult flow into the building societies of mortgage funds owing to the high rates of interest which prevail, not only in this country but all over the world.