HC Deb 30 March 1995 vol 257 c1166
2. Mr. Duncan

To ask the Chancellor of the Exchequer what representations he has received which suggest that renewed house price inflation would divert resources from productive investment; and if he will make a statement. [15276]

The Minister of State, Treasury (Mr. Anthony Nelson)

It is generally recognised that rapid house price inflation would be detrimental to productive investment.

Mr. Duncan

I thank my hon. Friend for that reply. Does he accept that for years people have been urging that the British economy should be run along strict German lines, but now that that is happening people are suggesting that we put up house prices to make people feel better? Does he accept that democracy has a straightforward choice: it can either vote for long-term economic well-being, or it can fall for the tricks of the Labour party and be bought by cheap promises? Will he undertake to go up and down the country extolling the virtues of what we are doing now?

Mr. Nelson

My hon. Friend makes a very good point. Of course the Government want a sound and healthy housing market and a thriving construction industry, but at the end of the day the country cannot live on bricks and mortar. Productive investment requires assets to be devoted to that area. My hon. Friend makes the point very well and I hope that it will be heard.

Mr. Pike

While no one wants an uncontrolled rise in house prices, which causes problems, does the Minister accept there is a serious problem for the many people with negative equity who cannot sell their houses or move jobs and are in a cleft stick because of Government policy?

Mr. Nelson

The Government are concerned about cases of negative equity, but it is fair to point out to the hon. Gentleman, first, that the number of people with negative equity has declined by half. Secondly, the value of that negative equity has reduced by nearly two thirds. Thirdly, last year I announced a couple of measures on the transfer of security and the ability to borrow unsecured so as to enable people with negative equity to move. So the Government have done something about that to advantage.