§ 18. Mr. McCrindleasked the Secretary of State for the Environment what recent discussions he has had with the Building Societies Association.
§ Mr. ShoreRegular contacts continue with the Building Societies Association. These have been built up over a number of years and enable discussion to take place over the full range of issues affecting the housing market.
§ Mr. McCrindleHave any discussions taken place recently about the effect of abolishing or cutting back tax relief on mortgages for more expensive properties? Does the Secretary of State not agree that the log jam that would be likely to result from such a move would only lead to increased prices for the less expensive properties?
§ Mr. ShoreThis matter has not been under current discussion, but if moves were made in any way to alter the tax arrangements affecting mortgages for the purchase of houses we would have consultations with the building societies.
§ Mr. Frank AllaunIs the Secretary of State aware of the new and growing practice by many building societies of red-lining or blue-zoning the old inner city areas within which they refuse mortgages on all houses, even if they are not to be demolished? As local authorities, in contrast, provide mortgages for such houses, and particularly since the present £100 million scheme with the building societies is proving a deep disappointment, will my right hon. Friend require building societies to provide to the local authorities 10 per cent. of their advances for this purpose?
§ Mr. ShoreI am interested in both the questions that my hon. Friend puts. He follows these matters very closely. I shall be glad to hear any evidence on the question whether there is in practice a red-lining of the inner cities. That is a most important point, because we wish to get the maximum co-operation from the building societies in two respects—first, to increase their lending on older properties, and, second, to increase their lending to people with average or below-average incomes.
On my hon. Friend's second question, there is an encouraging trend in the figures for the first quarter of this year, which show that 26 per cent., by number, of new mortgages went to people whose income was below that of the average manual wage.
§ Mr. SainsburyIs the Secretary of State aware of the considerable problems caused in certain areas, of which my constituency is an example, by the restrictions placed on the amount of money available for local authority mortgages? Following his talks with the Building Societies Association, what information has he about the extent to which the building societies have been able to fill the gap left by those restrictions?
§ Mr. ShoreThere was general agreement about the £100 million that the building societies were trying to make available in addition to their other lending in order to take up the reduction in 1595 local authority lending enforced by the previous year's Public Expenditure Survey Committee, but the hon. Member must think carefully if he is urging me, on behalf of his constituents, to increase public spending and the public sector borrowing requirement—because that is the implication of his question.
§ Mr. George CunninghamIs my right hon. Friend aware that if tax relief on mortgage interest were restricted to the basic rate there would be a saving of £80 million a year? Does he recollect that last year we were told that the relief would not be cut back in the Budget, because of a Department of the Environment reason relating to the building industry? Has the Department of the Environment this year opposed the restriction of that relief to income tax at the basic rate?
§ Mr. ShoreIf there were to be a change in this area, of course it would require conversations with my right hon. Friend the Chancellor, and it would have to conform to the timing of whatever measures were put forward at the time of the next Finance Bill. Our consideration of the timetable is related much more to the housing finance review.
§ Mr. BudgenWill the right hon. Gentleman confirm, in relation to one of his earlier answers, that he has no power to direct building societies to lend to any individuals or to any sector of the housing market?
§ Mr. ShoreI am not certain what my powers are in this respect, but now that the hon. Gentleman has put that question I shall inquire further. I think that by far the best way of proceeding, however, is by co-operation and good will between the Government and the building societies.
§ Mr. DalyellHas it occurred to my right hon. Friend that, if Opposition Members in the third row below the Gangway got their way and we had a £ Scots and a £ sterling, building societies would be faced with mind-boggling problems of disentanglement and extreme cases of difficulty when an English customer was based in Edinburgh or a Scottish customer in London, or elsewhere in England?
§ Mr. ShoreI agree with my hon. Friend that there are so many areas in which the Scottish, English and Welsh economies are interwoven that their separation would be so enormously complex and difficult as to be self-defeating, in terms of the objectives of those who advocate such a course.
§ Mr. LoydenIs my right hon. Friend aware that there is positive evidence that discrimination is being exercised by building societies against certain areas? Is it not time that the Government took some control of building societies, in order to ensure that money is channelled to places where it is most needed?
§ Mr. ShoreI agree that it is terribly important to get as much building society money as possible into inner city areas, but we should have a basis of fact before we start drawing conclusions. If my hon. Friend has any additional information, I hope that he will send it to me.
§ Mr. CrawfordIs the right hon. Gentleman aware that the £ Scots with the basis of a healthy Scottish balance of payments—and our nation is now self-supporting in terms of oil—will be very much healthier than the English pound when we gain independence?