HC Deb 30 April 1980 vol 983 cc1367-9
14. Mr. Allan Roberts

asked the Secretary of State for the Environment what estimate he has made of the level of local authority home loan lending likely in the financial year 1980–81.

Mr. Heseltine

Under the one-block system local authorities now have complete freedom to decide on their own priorities within their housing investment programme allocation, and the proportion of that allocation they use for the private sector mortgage lending.

Mr. Roberts

Why, if the Minister makes a virtue of public expenditure cuts, does he not tell the British people the consequences of the public expendi- ture cuts that he has introduced? Surely he knows that his cuts in housing investment programmes mean a virtual end to local authority home lending, which is an attack on owner-occupation and proves that the Government do not want to support owner-occupation but merely want to attack the public rented sector so as to favour the landlord-owned sector.

Mr. Heseltine

I do not think that that is the view that will be taken of our policies. Perhaps the hon. Member will have in mind, when he makes his rather exaggerated statements, that under the previous Government the amount of local authority lending for home purchase fell from £1,096 million a year to £226 million a year—in other words, it was reduced to nearly a quarter of what it was when they were in their first year of office.

Mr. Steen

Will the Minister agree that one of the best ways to alleviate and to decrease the soullessness and apathy in the vast council estates is to get local authorities to lend money for people to buy some of the high-rise fiats and not just their houses?

Mr. Heseltine

As my hon. Friend knows, perhaps better than most, there are certain local authorities which cannot get people to occupy the high-rise flats on any terms whatever. If they can initiate policies to bring those homes into use, no one will be more pleased than me.

Mr. Heffer

Is the right hon. Gentleman aware that Liverpool is now in such a parlous financial state, due to Government policy, that it is unable to help people who want to buy local authority homes, and that it is having to cut back on its whole housing programme, including maintenance and rehabilitation? Is it not an absolute scandal that the Government have placed the local authorities in very difficult circumstances in relation to housing?

Mr. Heseltine

The hon. Gentleman would not expect me to try to make judgments about the individual authorities in the Liverpool area. But every time one looks into the options facing a local authority one finds that there is a far greater range of options than those suggested by the hon. Member. I believe that the authority he mentioned could have done many things to alleviate its problems.

Mr. Hill

Is not my right hon. Friend aware that one of the most serious problems for a young couple wishing to borrow from a local authority—or, indeed, to buy in the private sector—is the raising of the down-payment? I have often thought—and I am sure that my right hon. Friend must also think along these lines—that if the local authority could only allocate some percentage of its lending to youngsters, to enable them at least to find the down-payment, this would mean a complete flow not only from council to private ownership but from council tenancies to council ownership.

Mr. Heseltine

My hon. Friend will be aware that we have given local authorities far greater freedom and discretion to use their capital allocations for lending to young couples or to any other people wishing to buy their own homes. What we cannot do at this moment is to increase the levels of public expenditure by providing additional resources for grants because, simply within the context of public expenditure, such resources are not available. As we made clear in our manifesto, this will be one of the things that we shall want to consider when the resources are available.

Mr. Kaufman

What does the right hon. Gentleman think will be the effect on local authority home loan lending of the power that he is taking under the Housing Bill to force interest rates of local authorities to the highest possible level—higher even than the top building society rate?

Mr. Heseltine

I think that it will mean that local authorities will lose less on the loans they make and therefore be able to make more loans.