§ 19. Mr. McCrindleasked the Secretary of State for the Environment if he had any discussions with the Building Societies Association during the parliamentary recess.
§ Mr. CroslandMy Department has continued the regular contacts maintained with the Building Societies Association over a wide range of subjects.
§ Mr. McCrindleDoes the Secretary of State agree that it has become clear that the building societies, with their more stringent lending requirements, are proving incapable of taking over from the local authorities in the way that the Government required? Has the Secretary 1356 of State any advice to give to people who wish to buy older property, or whose income is below the requirement of the building societies, for clearly the Secretary of State has led such people to believe that with the ending of local authority lending, the building societies would be able to replace them?
§ Mr. CroslandThe hon. Gentleman has referred to what appears to be a perpetual misapprehension. There is no question of ending local authority mortgage lending. It has been reduced, but will continue, and at a rate which, by historic standards, is not unsubstantial.
On the major question of what I might call the £100 million transfer from local authority mortgage lending to building society lending, this is going ahead well, and I very much hope that the first advances under the scheme will be made by the building societies in the next few weeks, if not days.
At the request of the local authority associations, discussions are now taking place with building societies on the question whether the £100 million transfer may be substantially extended.
§ Mr. BlenkinsopAlthough I welcome what my right hon. Friend has said, may I ask him to explain why he thinks that the offer of funds made by certain building societies to major local authorities to assist in further local authority loans should not be accepted, as some of the local authorities wish?
§ Mr. CroslandI should like to have details of that question, but I must emphasise that it looks as though the entire £100 million which we wanted building societies to take over from local authority lending will, in practice, be taken over by the building societies.
§ Mr. Walter JohnsonWill my right hon. Friend say whether the building societies have now paid back the loan that the Government gave them last year? Will he also say what plans and what developments are taking place concerning the setting-up of their own stabilisation fund?
§ Mr. CroslandI am glad to say that the whole of the £500 million loan has now been repaid to the Government by the societies. 1357 Concerning the stabilisation fund, we have achieved a stabilisation policy, because the amount of mortgage lending is now determined not solely by the building societies but by the societies and the Government in co-operation and consultation.
§ Mr. SainsburyAlthough he says that the policy does not mean a cessation of local authority lending, is the Secretary of State aware that in practice it has meant that in many areas no local authority lending has been possible for a considerable time? Is he prepared to risk the displeasure of the Tribunites, to whom he recently referred, by having a rational look at the means of making better use of existing accommodation, and considering whether local authority lending is more effective than municipalisation?
§ Mr. CroslandI do not think it is a question of saying that one or the other is the more effective. In the case of the £100 million switch, given that building society lending was running at a record level at the time, it appeared to me, to most of my hon. Friends—and, I should have thought, to most hon. Gentlemen opposite—to make sense to transfer a certain sum of money from local authority improvement and municipalisation.
Certain local authorities have now run out of their quota for the year, but that is only because they had the good sense to foresee what the Government might do, and lent the whole of their quota in the first three months.