Housing and Interest Rates (Hansard, 21 December 1989)

The Paymaster General (The Earl of Caithness)
My Lords, no.

§ Lord Dean of Beswick
My Lords, perhaps I may acquaint the noble Earl with some of the effects of that increase. Is the Minister aware that since May 1988 the average increase in mortgages in this country has been £88 per month? In the London area it is almost double that —at £162 per month. Is the Minister also aware that in that same period the number of mortgagees who are between six and 12 months in arrears has risen to 45,000, an increase of 20 per cent.? Does he not understand that we may be watching a social disaster unfolding? When will the Government do something about it?

The Earl of Caithness
My Lords, as your Lordships will be aware, the Question, as the noble Lord, Lord Dean, phrased it, relates to the last increase in minimum lending rate. However, he has proceeded to regale us with figures from May 1988 which are considerably wide of the Question he originally wished me to answer.
With regard to arrears, I hope that the noble Lord will keep the matter in perspective. Although we all appreciate how distressing it is for individuals concerned, the latest figures to the end of June 1989 show that less than 1 per cent. of building society borrowers are more than six months in arrears. I know that the noble Lord will be keen to welcome the efforts that the Government have made in the Autumn Statement to help housing and particularly the homeless.

§ Lord Mellish
My Lords, is the Minister aware that the employers —never mind about the workers —have said that they face 1990 with some trepidation? There is a slump in house building due to various factors. Has the noble Earl any comment about that, or is he satisfied with the slump?

The Earl of Caithness
My Lords, after a record year in 1988 and the tremendous growth in the economy, it was inevitable that there had to be a pause for breath. However, I am sure that the noble Lord also has welcomed the dramatic increase in funding for the Housing Corporation.

The Earl of Selkirk
My Lords, can my noble friend say whether the majority of foreclosures are due to family break-up rather than purely to finance?

The Earl of Caithness
My Lords, my noble friend is absolutely right. I am sure that your Lordships have read with interest the report on the homeless which the Government recently published. The latest figures show that only 6 per cent. of homeless people accepted by councils were homeless due to arrears.

Lord Bruce of Donington
My Lords, is not the reason why the noble Earl gave a negative reply to the Question put by my noble friend that the Government are unaware of what the housing situation is? Therefore it is impossible to make any mathematical calculation. Can he give the House one instance where, over the last 10 years, the Government have improved the housing situation? It is now worse than it was 10 years ago.

The Earl of Caithness
My Lords, the noble Lord is quite wrong; he is wrong on all counts. We have done an enormous amount for housing, as he knows. I was sad that he did not take as full a part as I hoped he would have done in the debates on what became the Local Government and Housing Act 1989 which has done an enormous amount to put funds where they are needed.

§ Lord St. John of Fawsley
My Lords, my noble friend has mentioned the situation of the homeless. Will he tell the House what the Government are doing to help those in London and our large cities who are without homes? Is it not an affront to the conscience of the nation that so many people, young and old, should have to spend Christmas on the streets?

The Earl of Caithness
My Lords, there are three groups of people who can help the homeless: the voluntary bodies and the churches; the local authorities; and the Government. My noble friend asked specifically about the Government. Perhaps I may tell him the figures that were announced on the day when my right honourable friend the Chancellor made the Autumn Statement. The Government will give a further £250 million over the next two years specifically to help the homeless in London and the South-East. That is a large sum to give to both the local authorities and the housing associations.

§ Lord Dean of Beswick
My Lords, in response to the noble Earl's answer to my supplementary question, of course we welcome any increased funding for housing. However, is the Minister not aware that when he claims a record year, it is a spurious claim? Under a previous Conservative Government and the succeeding Labour Government we were building 300,000 houses a year. So the noble Earl is being selective in claiming a record.
Is he not aware that the noble Lord, Lord Mellish, is quite correct? There is a serious dip in house building in all sectors. In the welcome speech made by the new Secretary of State only last week at 341 the annual lunch of the National House-Builders Council he said that this Government's objective was a decent home for everybody. Is the Minister aware that, based on the department's own review, a million new properties will be needed by the year 2000? Does he really believe that that objective will be reached on the present figures? All the indications are that we shall get nowhere near that. Why does the Minister claim a success when it is not attainable?

The Earl of Caithness
My Lords, the noble Lord, Lord Dean of Beswick, is quite right to chide me. I did not quantify the figure of the record. It was the highest number of private sector houses started since 1972–73. I apologise to the noble Lord for not putting it in quite the perspective I should.
The last time I discussed this subject with the noble Lord at the Dispatch Box he was keen to lower the price of houses for first-time buyers. As he will have seen from recent surveys, prices in the South-East are falling: that will therefore encourage first-time buyers.

§ Lord Dean of Beswick
My Lords, will the noble Earl now answer the question that I put to him, and not the one he wants to answer, which has not been asked?

The Earl of Caithness
My Lords, as regards the number of houses that are built, as the noble Lord knows, that is determined very much by planning permission. Overall, there is an equilibrium of houses throughout the United Kingdom, but there are shortages in certain areas. In those areas there will be a need for planning permission to enable new houses to be built to meet the demand.

§ Lord Renton
My Lords, will my noble friend say to what extent the homeless in London are young people, sadly from broken homes a long way away, who have come to London in the mistaken belief that once there all will be well?

The Earl of Caithness
My Lords, I do not have the information that would help my noble friend. I might have been able to reply to that question six months ago but I do not have the information with me now. However, I believe there is some information in the review of homeless people. If my noble friend would care to look at that he may find something that helps him.