HC Deb 02 July 1975 vol 894 cc1441-2
1. Mr. Newton

asked the Secretary of State for the Environment if he has yet completed the urgent review of the high mortgage rates of some local authorities to which he referred on 27th January 1975; and if he will make a statement.

The Minister for Housing and Construction (Mr. Reginald Freeson)

The inquiries my Department has been making are not yet complete, and I have nothing to add to the points that my right hon. Friend made arising from the question by the hon. Member for Brentwood and Ongar (Mr. McCrindle) on 11th June.—[Vol. 893, c. 405–6.]

Mr. Newton

As many hon. Memers will, I am sure, find that a very disappointing answer, will the Minister at least undertake that in any further proposals for mortgage stabilisation he will make sure that local authority mortgage holders are fairly treated? Will he confirm or deny whether he has any intention of adding to their burdens by removing tax relief on mortgage interest?

Mr. Freeson

On the first point, the Government have no intention of extending public expenditure by a further subsidy in this connection. There are other aspects of this matter which we are still examining, with the hope that we may produce some helpful suggestions. On the second point, I have already dealt with that publicly elsewhere. There is no truth whatsoever in the rumour or the report that we intend to abolish tax relief on mortgages. There is truth in the suggestion that we are looking at the way in which it operates.

Mr. Wigley

Will the Minister indicate whether there is a limit on the mortgage funds available for local authorities? If there is, and there is no limit on the funds available for building new houses, does he not consider this inconsistent, particularly in areas where there is a high level of owner-occupation, when there is a need for mortgage funds to make money available for the buyers of those houses?

Mr. Freeson

Certainly there is a limit, which was announced recently by my right hon. Friend, on local authorities' mortgage facilities. Broadly speaking it will amount to 50 per cent. of the rate of lending up till now on home loans. There is no inconsistency in this. We are talking about two different aspects of housing finance. New house building requires a different amount of investment from home loans, which go into the demand side of the market.