House Building (Hansard, 8 December 1976)

§ 10. Mr. Ovenden
asked the Secretary of State for the Environment what are the latest figures for housing completions in the public and private sectors ; and if he will make a statement.

§ 11. Mr. Skinner
asked the Secretary of State for the Environment what are the latest figures for house building, both public and private.

§ Mr. Shore
The house building figures for October show 153,700 starts and 135,800 completions in the public sector in Great Britain for the first 10 months of this year, and 136,900 starts and 124,800 completions in the private sector. In spite of disappointing figures for the month of October, the figures for the first 10 months of this year show increases over the levels of house building achieved in the same 10 months of 1975.

§ Mr. Ovenden
As public sector housing starts and completions are bound to decline still further as a result of public expenditure restraint, what action does my right hon. Friend intend to take to ensure that the stock of public sector housing is preserved and made available to those in housing need? What action will he take against local authorities such as mine which insist on going hell-bent on the indiscriminate sale of council houses and which allocate houses on the fifty-fifty principle with public money on criteria other than those of housing needs?

§ Mr. Shore
I shall be willing to hear from my hon. Friend any details that he cares to give me about the housing policies of his own housing authority. As he knows, there is not an open door to the sale of council houses. The information that I have so far this year shows that the sale of council houses is probably at its lowest level since we started keeping the figures. We should not necessarily assume that what may be the intentions of certain councils are being turned into actual practice. As for the decline of the house-building programme, we have given the figures and our view of what will be the figures of starts and completions for the next year. I do not think I have any reason to add to or detract from that.

§ Mr. Skinner
Will my right hon. Friend admit that in the past quarter completions are down roughly 10 per cent. across the private and public sectors? Does he accept that it is no longer good enough for him to blame the Tory Government, the weather or the thousand and one other things that Ministers constantly trot out? Does he accept that he and his Department are responsible for throwing building workers on the dole and having millions of bricks stocked? These are the consequences of cutting back public expenditure on housing. My right hon. 438 Friend's job is to ensure that no more is conceded to the IMF in the current negotiations.

§ Mr. Shore
I have to advise my hon. Friend again to wait and see what comes out of the statement that is to be made. I am very conscious of the need to maintain the house-building programmes, in particular in the public sector. I remind him that last year, 1975, we built 50 per cent. more houses than in 1973. The information which I have indicates that we shall not do worse than that this year either—that is to say, in 1976 we shall build about 50 per cent. more houses than were completed in 1973. I am not expecting any collapse of the public building programme in 1977 either.

§ Mr. McCrindle
With regard to the private sector, has the Secretary of State seen the suggestion that anything short of a 14 per cent. mortgage lending rate is unlikely to attract sufficient funds to the building societies to enable them to sustain the reduced programme to which he has referred? Will he comment on where, in these circumstances, he feels that funds are likely to come from to complete this unsatisfactory number next year?

§ Mr. Shore
I am sure that the building societies will continue—as they have tended to do for some time—to give priority to new building in their allocation of new funds. I am aware that in the last month particularly there has been a drastic falling-off in funds for building societies. I believe that that particularly reflects the very high level of interest rates. But, looking to the period ahead, we have obviously, as have the building societies, to take a view about the likely trend of interest rates and the likely trend of comparable rates. The building societies have built up a certain cushion of reserves, and they have been able so far to manage to maintain a high level of lending, although obviously they will have to keep this under permanent review.

§ Mr. Fernyhough
With regard to the selling of council houses, to which reference was made earlier, can my right hon. Friend say whether they are still being sold as public property at 25 per cent. of their value? If that is so, ought he not 439 to take steps to induce the private property holders to sell their property to their tenants at 25 per cent. less than its value?

§ Mr. Shore
As I recall the circular that was sent out a little over 18 months ago—and I have no reason to believe that things have changed—certain sales were permitted to sitting tenants at 20 per cent. below the market value—not of the market value, but below the market value. To the best of my knowledge, that remains the situation. If my right hon. Friend needs any more information, he can get in touch with me.

§ Mr. Heseltine
Will the Secretary of State recognise that his quotation of and reliance on historic figures for completions is wholly misleading in relation to the crisis facing his house-building programme? The October figures show that starts in the public sector were down 14 per cent. on a year ago and that they were 6 per cent. down in the private sector. Will the right hon. Gentleman recognise that his programme is now in ruins and that the only prospect of restoring faith to the house-building industry is by getting interest rates down, so that in the public and private sectors people can afford to buy and to build houses?

§ Mr. Shore
It is all very well for the hon. Gentleman to unleash an attack in that way, but it is no good any of us, if we are serious, bandying figures about on the basis of one or three months. I have given the figures, showing that, based on all the information we have, our completions will be higher in 1976 than in 1975. That is the first point. We shall maintain a strong public sector programme in 1977, and the figures have already been given.
With regard to interest rates, here again one would imagine from the question that interest rates had never gone up before. When the hon. Gentleman's party came to office in 1970, interest rates, as I recall, were at 6 per cent. When the Conservative Government left office, interest rates were at 11 per cent. [Interruption.] Of course they have gone up since. If, however, the hon. Gentleman is putting forward the idea that the only factors operating on interest rates are those that affect Labour Governments, he had better think again.