Building Societies Association (Hansard, 20 July 1988)

§ 9. Mr. Cousins
To ask the Secretary of State for the Environment when he last met the chairman of the Building Societies Association; and what was discussed.

§ Mr. Ridley
My hon. Friend the Minister for Housing and Planning met the chairman of the Building Societies Association at the meeting of the committee on private finance for housing held on 14 July. The committee discussed various ways in which private finance could be introduced into the provision of public sector housing.

§ Mr. Cousins
The Secretary of State knows that his own bungling over housing and planning and the Chancellor's 1090 bungling over interest rates have meant that 9 million home owners face a massive hike in housing costs starting next week. At least he can say—as the officers of Britain's largest building society said yesterday—that he feels sorry for new lenders in this position. When he is in Newcastle tomorrow, will he call at Ridley place, named after his ancestors, to explain to the people there why people with large mortgages get a subsidy organised from the extra paid by people with small mortgages?

§ Mr. Ridley
The hon. Gentleman seems to be no more aware of the difference between lenders and borrowers than he is of the difference between losers and gainers. Perhaps he would like to look in Hansard and see what an extraordinary question he asked. As he knows, matters to do with mortgage interest relief are for my right hon. Friend the Chancellor of the Exchequer.

§ Mr. Heddle
Did the chairman of the Building Societies Association acknowledge that more first-time buyers are realising their lifetime's ambition of home ownership than ever before? Did my right hon. Friend discuss with the chairman the scourge of gazumping, and how practical and immediate steps might be taken to eliminate it? Is he not disturbed by the report of the Public Accounts Committee, published yesterday, that Land Registry delays are at an all-time high, and will he take immediate steps to ensure that all local authorities reply to requests for local searches and so reduce the delay in house purchase procedures as far as practicably possible?

§ Mr. Ridley
On my hon. Friend's first question, I am glad to be able to tell him that in 1979 the number of first-time buyers was 390,000, whereas last year it was 620,000. I can also tell him that in the first quarter of 1987 there were 34,000 fewer loan approvals for first-time buyers than in the first quarter of this year. The most up-to-date figures show a large increase in first-time buyers. I have nothing to say about gazumping on this occasion, and it was not discussed at the meeting to which I referred. I share my hon. Friend's concern about Land Registry delays, but they are a matter for my right hon. and noble Friend the Lord Chancellor.

§ Mr. Wigley
Will the Secretary of State tell the building societies that the massive increase in interest rates facing those with mortgages is a direct result of the overheating of the economy triggered by this year's Budget package? What hopes does he hold out to the building societies of a more stable and even policy on interest rates in the future.

§ Mr. Ridley
No, Sir, I shall not be telling the building societies any such thing, nor would I dare to enter into territory that is not my responsibility but that of my right hon. Friend the Chancellor of the Exchequer.

§ Mr. Yeo
Has my right hon. Friend discussed with the Building Societies Association a problem felt acutely in my constituency, namely, the difficulties faced by people on average earnings who wish to become first-time buyers but cannot find a house at a price that they can afford? Does my right hon. Friend agree that an important contribution to solving the problem can be made by approving a slightly faster rate of residential development, especially in areas where there are plentiful employment opportunities?

§ Mr. Ridley
The figures that I have just given the House do not bear out my hon. Friend's assertion that fewer people are able to become first-time buyers. There has been 1091 a phenomenal increase. However, I admire my hon. Friend's bravery in urging upon me that I should be more liberal in granting planning permissions in the south-east of England. Perhaps one reason for the current high level of house prices in those areas of the country is that I have not been as liberal as some people seem to suggest.

§ Mr. George Howarth
When the Secretary of State next meets the building societies, will he discuss with them the fears and difficulties that may arise with the introduction of mixed funding for housing association schemes? There is fear that because values in the inner cities and outer estates have fallen, but costs are high, that will prevent the introduction of housing association schemes for people in housing need. Will the Secretary of State discuss those difficulties, because there are real fears?

§ Mr. Ridley
Those problems have been discussed on many occasions with the building societies and others. I assure the hon. Gentleman that the proportion of private finance that is suitable for any given housing association scheme will be adjusted between the higher and lower figures. It is extraordinary for the hon. Gentleman to suggest that attracting private finance to supplement housing association grant can only mean that there will be less money in total for the provision of low-cost housing to rent, which I believe to be important, even if he does not.

§ Mr. Gow
As a former Financial Secretary to the Treasury, will my right hon. Friend acknowledge the truth that the surest way of curtailing inflation is to have interest rates at an appropriate level that will restrain inflation? Has he pointed out to the building societies an elementary truth—that one way in which we shall be able to halt the increase in house prices is to build more houses in those parts of the country in which people want to live?

§ Mr. Ridley
As one former Treasury Minister to another, I believe that it behoves neither of us to go far into the question of economic policy on an occasion such as this because you, Mr. Deputy Speaker, might feel that that would take us beyond the question. The other question asked by my hon. Friend can only be answered by saying that the supply of land for new housing must have a bearing on house prices. If there were to be no more planning permissions granted, at one extreme, or if there were to be an abandonment of planning control, at the other extreme, I cannot believe that there is anybody in the House who would not accept that that would have an effect on house prices, either up or down. There must be a connection.

§ Dr. Cunningham
Is it not a unique combination of achievements that the Secretary of State's policies have brought us to record homelessness, huge housing waiting lists, spiralling house prices, huge mortgage increases, and the return of Rachmanism and gazumping? Is that not failure just by any test but failure by every test? Before the Secretary of State replies, perhaps he will tell the House whether his reply has been drafted by Sir Alan Walters or by Bernard Ingham.

§ Mr. Ridley
My reply has been drafted by no one—nor do I accept the hon. Gentleman's premises. Those who do accept those premises, as the hon. Gentleman does, will perhaps deduce the obvious lesson, that we are pursuing a very tight land use planning policy.