HC Deb 04 August 1976 vol 916 cc1693-4
2. Mr. Forman

asked the Secretary of State for the Environment whether he is now in a position to make a statement about the future of housing finance.

The Secretary of State for the Environment (Mr. Peter Shore)

The review is progressing. I expect to have the conclusions later in the year.

Mr. Forman

I am grateful for that rather partial answer. In view of the fact that council house subsidies have been increased by 400 per cent. in five years, at a time when rents, taking account of rebate, have increased by only 63 per cent., will the Government accept that, regrettably, rents will have to be increased if they are to reach anything like the half way level, as a proportion of total costs, that they were at some years ago or the two-thirds level that they were at five years ago?

Mr. Shore

There has been a fall in the proportion of the housing revenue account covered by rental incomes, but the hon. Member will know that the main reason for such an escalation in housing subsidies is the historically high interest rates which have been falling on local councils. In any sensible policy addressed to rents we must consider the direct impact on the housing revenue account and the broader social policies, including the counter-inflation policy, which we have had very much in mind.

Mr. Joseph Dean

While not agreeing with all the details, I think that my right hon. Friend has hit the nail on the head when he says that the increase in subsidy was a vital factor in stabilising rents in order to ensure the acceptance of the social contract package.

Mr. Speaker

Order. I ask the hon. Member to put his supplementary remarks in the form of a question. Will hon. Members on the Opposition side of the House also recognise that Question Time is not a time for stating a case? It is a time for asking questions.

Mr. Shore

I understood my hon. Friend's question very well. He was saying—and I wholly agree—that one must take account of the social contract in any decision affecting rents, and that we intend to do.

Mr. Raison

Does the Secretary of State agree that he has already made one important decision about housing figures, namely, ending the unlimited building of council houses? What reduction in council building does he expect as a result of that?

Mr. Shore

We shall have before the House a more detailed statement, because only yesterday we had discussions with the local authorities. But in local authority building I am aiming for a rate of completions consistent with the figures in Cmnd. 6393, which was approved a few months ago.