HC Deb 08 July 1981 vol 8 cc401-2
17. Mr. McCrindle

asked the Secretary of State for the Environment what matters he discussed with officials of the Building Societies Association on the last occasion on which he met them.

Mr. Heseltine

Officials of my Department meet regularly with representatives of the Building Societies Association on the joint advisory committee on building society mortgage finance. Matters recently discussed include the net inflow of funds to societies and the level of mortgage advances.

Mr. McCrindle

What does my right hon. Friend think the building societies and their millions of borrowers will make of the suggestion that there should be a phasing out of tax relief on mortgage interest, as is evidently to be recommended to the national executive committee of the Labour Party as future party policy? Does he agree that if the report in The Times today is correct, a proposal ostensibly aimed at the so-called rich will have the effect of imposing a devastating increase on the average family budget?

Mr. Heseltine

I suppose that the detached observer would draw from the reports in the newspapers today the conclusion that the Labour Party is back in its traditional role of attacking private wealth and private house ownership.

Mr. Frank Allaun

Is the Secretary of State aware that the question put by the hon. Member for Brentwood and Ongar (Mr. McCrindle) is false? Is he further aware that the Labour Party is in favour of granting tax relief on mortgage interest on houses at the basic rate but not of allowing it at up to 60 per cent. on those of the very wealthy?

Mr. Heseltine

Will the hon. Gentleman inform the House which Labour Party he speaks for?

Mr. Jessel

Would it not be right to review the present limit on tax relief on mortgage interest? It was fixed at a £25,000 borrowing level by the right hon. Member for Leeds, East (Mr. Healey), then Chancellor of the Exchequer, as far back as 1974. The average price of a house in Greater London is now £30,000 and in constituencies like Twickenham more like £40,000.

Mr. Heseltine

I am very much aware of my hon. Friend's point. We have had to consider this matter from time to time. We have felt, however, that in present circumstances it could not be accorded the level of priority that such an adjustment would imply.

Mr. Newens

In the event of interest rates being forced up by international conditions, what steps will the Secretary of State take to protect mortgage owners against increases in their present burdens? Does the right hon. Gentleman agree that this is a much more pressing question than speculation about Labour Party policy, on which the right hon. Gentleman is singularly ill equipped to pronounce?

Mr. Heseltine

I agree that there is little purpose in speculating about Labour Party policy, as there is no prospect of a Labour Government ever having to carry it out. Britain is not immune from the actions of the international economy. The best way to protect people from the dangers of high interest rates in this country is to keep down the level of Government borrowing, which must affect the national level of interest rates.