HC Deb 30 April 1980 vol 983 cc1349-51
1. Mr. Stephen Ross

asked the Secretary of State for the Environment if he will undertake a study of the problems facing prospective owner-occupiers who find themselves unable to purchase due to high prices and interest rates.

The Secretary of State for the Environment (Mr. Michael Heseltine)

The best way to help prospective home buyers is to take the steps necessary to reduce inflation and interest rates and the Government's fiscal and monetary control policies will achieve this. It is also essential to ease the constraints faced by house builders in, for example, the planning and land supply fields. Steps are being taken to meet this objective. In addition, the Government are encouraging local authorities to implement a wide-ranging programme to promote low-cost home ownership.

Mr. Ross

The Secretary of State might think that that is an adequate answer, but is he aware that I do not? If owner-occupation is the cornerstone of the present Government's policies on housing, is it not up to the Government to inquire why house building starts are at their lowest ebb since the 1920s? Is he aware that increasing numbers of prospective owner-occupiers are being priced out of the chance of buying, and are having to turn to local authorities and housing associations to seek accommodation which is not available because of cuts in the housing investment programme?

Mr. Heseltine

We do not need an inquiry to establish that public expenditure demands are taking too much money and causing interest rates to be too high. Until we redress that balance we shall never restore the growth in the economy on which prospective house purchase depends.

Mr. Michael Morris

Is my right hon. Friend aware that I accept the strategy of his answer? However, is there not a problem with local planning authorities and local government in general in relation to the release of land and the easing of planning permission for those projects that private builders wish to pursue?

Mr. Heseltine

I am grateful to my hon. Friend. He is right. The repeal of the Community Land Act will contribute to a solution of this problem. Our land registers and our determination to speed up planning processes are part of our strategy.

Mr. Winnick

Is the Secretary of State aware that there is an acute housing crisis? Is he aware that many people who wish to buy are unable to do so because of property price inflation and the record mortgage interest rate? Is it not a tragedy that so many people who would stand a chance of being re-housed by local authorities are now the victims of the Secretary of State's actions, under which council house building has come to a virtual stop?

Mr. Heseltine

The hon Gentleman was not in the House when his Government ran down the level of council building to such extraordinary levels. I dare say that he was prepared to defend the record of that Government when he stood at the last election. Of course, I am aware of the crisis in house building, which was precipitated by the appalling economic circumstances which we inherited.

Mr. Dover

Does the Secretary of State agree that if house prices are rising by 18 or 20 per cent. a year and mortgage interest is at 15 per cent., with tax relief, that is a good bargain for owner-occupiers?

Mr. Heseltine

My hon. Friend will also remember that house prices rose by 30 per cent. in the year before we took office. I understand that they are not now rising at all.

Mr. Frank Allaun

Is it not a fact that the overwhelming majority of the 1 million families on council house waiting lists cannot afford to buy in any circumstances, and even less so with higher prices and interest rates? What will happen to such people? Are not they in an impossible position in view of the virtual ending of council house building which is coming, and the sale of existing council houses?

Mr. Heseltine

I am sure that the hon. Gentleman will have borne in mind the difficulties of council house building—which declined to such an extent under the last Government—against the background of the programme which he supported in the Lobby time and time again. The overall position is, broadly, as the House knows, that unless we restore the economy to strength and real growth we shall not achieve the growth in real disposable income on which home ownership depends on an increasing scale.

Forward to