HL Deb 06 July 1966 vol 275 cc1058-9

2.28 p.m.

LORD WAKEFIELD OF KENDAL

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government how it is proposed to maintain, let alone increase, the house building programme when the banks, in accordance with the Bank of England directive, are refusing to give the credit formerly given for the building of houses, and the conversion of large houses into a number of units of accommodation.]

LORD SHEPHERD

My Lords, since the end of 1964 priority in granting bank advances has been given to exports and to the strengthening of productive investment in manufacturing industry. Some house builders have said they have been unable to obtain the bank credit needed to sustain their operations, but it is far from certain how important this factor has been. Inquiries are now in hand to assist in the determination of what courses of action in this and other fields are best designed to assist the private sector in playing its full part in the Government's housing plans.

LORD WAKEFIELD OF KENDAL

My Lords, while thanking the noble Lord for that Answer, may I ask the Government to expedite the results of the inquiries which they are now making? Also, is the noble Lord aware that the position is getting increasingly urgent, and that more and more builders are finding it extremely difficult to obtain the credit needed? Is he further aware that the number of houses being built in the private sector will in the next few months decline very rapidly indeed, unless some positive action is taken quite quickly?

LORD SHEPHERD

My Lords, I do not think that the supplementary which has been put by the noble Lord is entirely accurate. In fact, the advances that have been made to builders and contractors in this year—that is, the year ended May, 1965—are some 4½ per cent. higher than in the previous year. In fact, the figure has risen quite substantially since November, 1964, when it was£254 million; in May of this year it was £308 million.

In regard to decisions on whether credits should be made available to builders, these rest with the bank itself. The banks have been asked, as the noble Lord is aware, to contain their advances to roughly a 5 per cent. increase per annum. They have been given a broad indication of Government policy in the field of exports, but in the end a decision on whether a grant should be made to a particular builder depends upon the bank concerned.

LORD WAKEFIELD OF KENDAL

My Lords, while thanking the noble Lord for that further reply, may I ask him whether he is aware that it is in the last twelve months that the position has become acute? For this period, obviously, it is not possible for him to give such figures as he has given for the previous twelve months, but it is during the last twelve months that the position has been deteriorating so seriously.

LORD SHEPHERD

My Lords, the figures—I will not quote them, but I will make them available to the noble Lord—have been consistently rising. These are the figures of advances. It may well be that certain companies, certain builders, are, for various reasons, in some difficulties. This question is now being examined, not only by the Government but also within the little "Neddy" concerned with the building industry. And, to revert to the noble Lord's first supplementary question, I can certainly assure him that we will expedite a decision on this matter as much as possible.