Housing Starts (Hansard, 24 July 1974)

§ 19. Mr. Costain
asked the Secretary of State for the Environment if he can make an estimate of the effects which his recent policies have had on the level of private housing starts; and if he will make a statement.

§ Mr. Crosland
The decision of the Building Societies Association to hold the recommended mortgage rate at 11 per cent. coupled with the Government's initiatives to increase the flow of mortgage funds, should encourage the private house-building industry to undertake a higher level of building. The Government is urgently pursuing longer-term studies on how best to ensure a steady flow of funds and on related matters.

§ Mr. Costain
Does not the right hon. Gentleman agree that his answer is purely a political one to hide the facts? Does he not appreciate that housing starts are about half what they were this time last year and that the building industry is in a state of complete chaos? I remind the right hon. Gentleman of a statement by one of his predecessors a number of years ago when I asked whether what the Labour Party was proposing was to nationalise the building industry. He replied "No. All that we have to do is to break individual contractors and we shall get them for nothing." Is that the right hon. Gentleman's policy?

§ Mr. Crosland
I respectfully congratulate the hon. Gentleman on his nerve, since in the last Parliament he was PPS to a Minister who left the building programme in the most disastrous state that we have seen this century. We have taken a number of important measures to encourage private house-building. Certainly I am not satisfied with the outlook at the moment, although there are now beginning, for the first time in two years, to be slightly encouraging signs that we may get a pick-up in private house-building.

§ Mr. Ronald Atkins
Does my right hon. Friend agree that the fall in the level of private house-building occurred especially during the period in office of the previous administration and that the bad position today is directly the result of their policy?

§ Mr. Crosland
My hon. Friend is absolutely right. While the hon. Member for Folkestone and Hythe (Mr. Costain) was ensconced in the Department of the Environment, the rate of private housing starts fell from 20,900 in the first quarter of 1973 to 11,400 by the first quarter of 1974. It was almost halved as a result of the actions of the previous Government.

§ Mr. Lawrence
Does the right hon. Gentleman agree that there is in some areas a complete breakdown in planning procedures and that this is a contributory factor to the low level of private housing starts? What is he doing about it, and what were the encouraging signs about which he spoke just now?

§ Mr. Crosland
The encouraging signs are that an improvement of starts occurred in May, the last month for which we have figures, for the first time for very many months. As for the hon. Gentleman's planning point, there may be certain areas where that is an inhibiting factor. If he has specific examples in mind I hope that he will write to me about them. There is no doubt that the main inhibiting factor has been the lack of confidence on the part of builders that they will be able to sell their houses in 12 or 18 months' time, and the object of our policy is so to increase the supply of mortgage funds that they will feel confident about their ability to sell.