§ 9. Mr. Forman
asked the Secretary of State for the Environment whether he is now in a position to make a statement on the outcome of his Department's review of housing finance.
§ 20. Mr. MacGregor
asked the Secretary of State for the Environment when he now expects to publish the conclusions of his Housing Policy Review.
§ Mr. Forman
Is that not just another example of the right hon. Gentleman's sluggardly—to use his word—consideration of these matters? Will he kindly get a move on? When he does come to formulate his policy proposals, will he bear in mind that average council rents now account for only 7 per cent. of the average manual wage? Will he be prepared to adjust them upwards slowly, and perhaps in conjunction with the Chancellor's next round of direct taxation cuts?
§ Mr. Shore
Of all the issues that face us—there are many and they are complex—perhaps housing policy is the one that repays some serious prior thought. If I wanted to look for a monument to mark impetuous and unwise legislation in this area, I should point to the Housing Finance Act 1972, the last major piece of Conservative legislation in this sector.
§ Mr. Douglas-Mann
Will my right hon. Friend ensure that when the proposals are considered he will consider them in the context of investment patterns? Is he aware that house prices have risen eight times since the war whereas share prices have risen only three times since 1935? Will he consider whether that is a consequence of the highly preferential subsidy terms for owner-occupiers, which have diverted investment to provide housing from the direction of industry generally?
§ Mr. Shore
As my hon. Friend suggests, there is a connection between what I think is generally accepted as a deliberately favourable tax régime and house prices. That is a matter on which evidence has 314 been taken and on which we want to form a view. In the context of housing policy we must consider not only current housing expenditure, which is certainly very high, but investment and the mix of investment as a whole.
§ Mr. MacGregor
On the contrary, will the right hon. Gentleman bear in mind that the increase in interest rates has meant that very many owner-occupiers are now facing enormous difficulties, to the extent that many mortgagors would have been entitled to rent rebate if they had been in the rented sector, while at the same time many local authorities believe that it would be more cost-effective for them to concentrate a good deal more of their local authority money on mortgage lending? In his review will the right hon. Gentleman concentrate on giving priority to the owner-occupied sector?
§ Mr. Shore
I want to give proper consideration to the owner-occupied sector. I believe that the long-term trend is towards a considerable and, in my view, beneficial growth of owner-occupation in the country as a whole. As for interest rates generally, I am aware that owner-occupiers have had to face the relatively recent increase in building society rates. I remind the hon. Gentleman that interest rates were 11 per cent. when the Government came to power in March 1974. In spite of all the storms, which have been pretty fierce over the past two and a half years, we have managed even at the worst to keep to a 12¼ per cent, interest rate. As the House knows, that rate was reached some months ago.
§ Mr. Frank Allaun
Will my right hon. Friend not accept the advice from the hon. Member for Carshalton (Mr. Forman) but confirm that the average subsidy for council tenants is £174 and the average subsidy for owner-occupiers is £170, the former including extra expenditure on items such as advice centres, planning and related matters? Secondly, will he continue to support Labour Party policy to maintain subsidy for both sectors except for the very wealthiest of house buyers?
§ Mr. Shore
I certainly give my hon. Friend the assurance that I think he wants from me—namely, that I have the interests of both sectors very much in mind. I am aware, as the whole House should 315 be, that both owner-occupiers and council tenants are in receipt of different forms of tax support, tax subsidy or tax concession. In my view, we should be unwise if in our considerations we excluded one half of the problem from the other. We must constantly keep them in mind together.
§ Mr. Heseltine
To bring the right hon. Gentleman back to reality, does he not now appreciate that as a result of these policies we now have more empty houses than for over a decade? The only urgent priority that he should observe relates to his own position.
§ Mr. Shore
I must remind the hon. Gentleman, who appears to be a little short on memory, that when Labour came to power we inherited a total collapse in the public and private sectors, a mortgage famine, and an interest rate of 11 per cent. Whatever else we have done, we have considerably improved the situation that we found, despite the far greater difficulties that we have faced.