HC Deb 13 October 1975 vol 897 cc836-8
4. Mr. Anderson

asked the Secretary of State for Wales what consultations he has had with representatives of building societies designed to make the societies more flexible in their lending policies to meet the needs of those who would in normal circumstances receive local authority mortgages.

6. Mr. D. E. Thomas

asked the Secretary of State for Wales what advice he has given to district councils in Wales about lending for local authority mortgages.

The Under-Secretary of State for Wales (Mr. Alec Jones)

As I told the House on 7th July, local authority mortgage lending in Wales had to be suspended while a review was made of amounts committed. This review showed that the amount provided for local authority mortgage lending in Wales in 1975–76 had already been fully taken up. I cannot say at present when lending might be resumed.

I am, however, glad to tell the House that the Building Societies Association has agreed to make an additional £5 million available to borrowers in Wales. This is intended to help fill the gap caused by the suspension of local authority lending; I am grateful to the building societies for their co-operation. Discussions are now proceeding between the Welsh Office, the Council for the Principality and the building societies on the application of this money.

Mr. Anderson

This extra money is welcome, but will it go to those people, on limited means who are finding it difficult to obtain deposits and wish to buy the smaller terraced houses—of which there are many in Wales—and who would otherwise simply be on the council house waiting list? What evidence is there that the building societies will modify their policies in this respect? If they will not, should they not be made to do so?

Mr. Alec Jones

This £5 million from the building societies is certainly an extra £5 million worth of business, some of which might have been undertaken by local authorities had it not been for the freeze. We have been holding discussions with the building societies and with the Council for the Principality. Whilst broad agreement has been reached on the sharing out of this money, it is somewhat early to make a detailed announcement, since there are further details to be discussed.

Mr. D. E. Thomas

Is the Minister aware that, on past performance, money lent in Wales through the building societies has not noticeably found its way to people on low incomes, people wanting older property, and self-employed persons? Is he aware that, because of the preponderance of older property in Wales and of house buyers on low incomes, the withdrawal of local authority lending is a severe blow? Will he consider making up the deficiency by withdrawing tax relief on mortgages to people on higher incomes?

Mr. Alec Jones

The question of tax relief is not for me but for my right hon. Friend the Chancellor of the Exchequer. We appreciated from the beginning that our decision to restrict mortgages for local authority lending at this time would present a serious difficulty to many people in Wales. There was considerable over- spending, and in view of the national economic and financial situation we felt that it was the only prudent step to be taken at this time. We are grateful to the building societies for coming partly to our help in this matter.

Mr. Wyn Roberts

Can the Under-Secretary hold out no glimmer of hope about the restoration of local authority lending, which was brought to an abrupt end without any warning whatsoever? Does he not think that it would be far better to restore local authority lending than to spend between £50 million and £60 million implementing the Community Land Bill?

Mr. Alec Jones

First, I do not think that the Community Land Bill is related to the question of local authority lending.

Mr. Roberts

It is for housing.

Mr. Alec Jones

If the hon. Gentleman will be patient, he will get an answer. It is not related to local authority lending. But we are aware of the tremendous difficulties. It is somewhat early to make an announcement for next year, but we are holding discussions with the Council for the Principality to try to ensure that in the next financial year we establish priorities acceptable to the Government and to the local authorities in Wales to ensure that money for housing in Wales is spent in areas of greatest need.

Mr. Grist

Does the hon. Gentleman agree that cutting off local authority mortgages at the same time as allowing the municipalisation of private housing demonstrates a strange language of priorities?

Mr. Alec Jones

I must remind the hon. Gentleman that the acquisition of houses was also stopped at the same time

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