§ Q1. Mr. Bruce Douglas-Mannasked the Prime Minister whether he is satisfied with the co-ordination between the Secretary of State for the Environment and the Chancellor of the Exchequer with regard to the administration of mortgage interest tax relief.
§ The Prime Minister (Mr. James Callaghan)Yes, Sir.
§ Mr. McCrindlerose—
§ Mr. SpeakerMr. McCrindle.
§ Mr. Douglas-Mannrose—
§ Mr. SpeakerOrder. The hon. Member for Mitcham and Morden (Mr. Douglas-Mann) did not rise initially. I shall call him later, if he wishes. I looked in his direction but he did not rise after the Prime Minister had said "Yes, Sir." The hon. Gentleman merely smiled. We are now wasting time. I have called the hon. Member for Brentwood and Ongar (Mr. McCrindle).
§ Mr. Douglas-MannI was, perhaps, too anxious to congratulate my right hon. Friend on what has obviously been a most successful visit—
§ Mr. SpeakerOrder. I shall call the hon. Gentleman later, if he wishes. I told him that I have called the hon. Member for Brentwood and Ongar.
§ Mr. McCrindleDoes the Prime Minister agree with the National Executive Committee of the Labour Party that the maximum mortgage upon which tax relief should be allowed should be reduced from £25,000? Is this because the price of houses has decreased or because the influence of the Left has risen?
§ The Prime MinisterThe NEC has put forward a series of very interesting proposals, which were drawn to my attention this morning and which I shall study with great care. As for the limit on the value of houses—£25,000—I understand that for the past two years since the limit was fixed the price of houses in that range has not varied very much, and therefore the figure is pretty well stationary.
§ Mr. Douglas-MannDoes the Prime Minister agree that there are many owner-occupiers at present receive far too little help? I have in mind particularly those buying for the first time, those who have bought within the past five years, and retired people who cannot afford to keep up their mortgages. On the other hand, there are others who bought their houses a good many years ago and whose housing costs now represent a very small proportion of their income and who, therefore, are receiving too much help?
Will my right hon. Friend also pay attention to the NEDC Report, the contents of which were leaked by the hon. Member for Hornsey (Mr. Rossi), which drew attention to the extent to which savings are diverted from productive investment to investment in housing? Does my right hon. Friend consider that there would be social and economic benefit if he were to ask the two Ministers concerned to review this matter with a view to ensuring that there was at least some redistribution within the owner-occupier sphere?
§ The Prime MinisterMy hon. Friend raised a number of very important points, including the position of those who are first-time buyers as well as others who have to move their place of residence because of their work. The trouble with our mortgage interest relief system is that, like Topsy, it has "just growed." I think that there is a very good case for reviewing it, as the Housing Finance Review is now doing, and we shall present our conclusions to the House in due course—[Interruption.] I agree that it is taking rather longer than I had hoped, but this is a very complex topic and we must balance equity and fairness in studying these matters. I would sooner not rush it, as the system has grown up over such a long period.
211 I observed some of the newspaper remarks about the NEDO report. It may well be that my hon. Friend is right in saying that investment in housing has increased faster than investment in manufacturing. I do not think that that necessarily means that we should cut down investment in housing so much as increase investment in manufacturing.
§ Mr. CormackWill the Prime Minister discuss with the Chancellor of the Exchequer the very special problem facing the clergy and other low-paid people who must live in tied houses and who at the moment are denied mortgage interest relief on their retirement homes? This is a very deserving class of people.
§ The Prime MinisterI understand that the Financial Secretary to the Treasury discussed this matter with the House last year, during the Finance Bill debates, and that he said that he would consider the matter again in the light of the interdepartmental review of the tax treatment of representative occupiers. At this stage in the financial year it is not right that I should anticipate my right hon. Friend's Budget.
§ Mr. AllaunIs it not fairer that we should devote to owner-occupiers and council house tenants at the lower end of the scale some of the subsidies that now go to the richest house purchasers, some of whom are receiving over £40 a week in housing subsidy? Will my right hon. Friend devote some of the savings that I hope he will secure in that way to restore the cuts in house building and improvement?
§ The Prime MinisterI cannot add to what has been said in earlier exchanges relating to the last part of my hon. Friend's question. The extent of mortgage interest tax relief and the levels at which that relief should be given are matters that should be left to the Housing Finance Review. I do not wish to anticipate the proposals.