HC Deb 25 July 1979 vol 971 cc580-2
6. Mr. Neubert

asked the Secretary of State for the Environment when last he had a meeting with the president of the Building Societies Association.

21. Mr. Ioan Evans

asked the Secretary of State for the Environment when last he met representatives of the Building Societies Association.

Mr. Heseltine

I have had two meetings with representatives of the Building Societies Association since taking office.

Mr. Neubert

On the next occasion will my right hon. Friend convey the appreciation of the thousands of people in my constituency who are supporters of the Conservative concept of a property-owning democracy that the BSA did not impose an avoidable increase in the mortgage rate for the time being? At the same time, in the interests of wider home ownership, as the Labour Party moved into its new home yesterday in Walworth Road, Southwark, will he do his best to fix it up with a mortgage so that it may be free of obligation to its trade union landlords?

Mr. Heseltine

I do not know that I would want to rely on a long term covenant for repayment from the Labour Party. I agree that the building societies approached the whole question of the recent rate changes in a most helpful way.

Mr. Ioan Evans

The fact that the Building Societies Association is not putting up the mortgage is not due to the efforts of the Government. Does the Minister realise that the interest rate will be going up in the new year unless the Government bring MLR down from its present high rate of 14 per cent.? Although the Government keep talking about competition, where is the competition between the building societies? They are all putting up their rates simultaneously.

Mr. Heseltine

The hon. Gentleman is starting halfway down the road. The reason for the high interest rates is the high level of public expenditure that we inherited from the previous Government.

Mr. McCrindle

Is it not the remarkable form of intervention by the Government, unlike that of their predecessors, with the building societies which has succeeded in freezing lending rates while ensuring that investors continue to obtain the commercial return on their money?

Mr. Heseltine

This must be a decision for the Building Societies Association to reach in its own best interests. I believe that it did so in the most helpful way possible.

Mr. Straw

Will the Secretary of State confirm the newspaper reports that he has been discussing with the Building Societies Association the provision of further funds by it for the sale of council houses? Will he say where those discussions have got to and what effect any transfer of funds for the sale of council houses will have upon the provision of home loans to first-time buyers at this difficult time?

Mr. Heseltine

Yes. The hon. Gentleman raised a most important question. If we are to finance a considerable extension of the property-owning democracy there is a need for additional mortgage finance to do so. I am conducting discussions with, among others, the Building Societies Association to find out how we may finance the explosion in ownership which I am sure that the Opposition want as much as the Government.