Housing (Home Loans)

Part of Class Vi – in the House of Commons at 12:00 am on 29th April 1965.

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Photo of Mr Richard Crossman Mr Richard Crossman , Coventry East 12:00 am, 29th April 1965

I should like to start with an apology to back benchers on both sides of the House. I am extremely sorry that, in a short half-day debate, I am taking part in a four-man bout of Front Bench speeches. This was no procedure of our willing. I should have preferred to leave the rôle of the opening speech to one of my colleagues behind me and to have waited until the end in order to reply to the debate, but the Opposition decided to put up two Front Bench spokesmen. They have relegated the shadow Housing Minister the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) to winding up, presumably so that the shadow Chancellor of the Exchequer, the right hon. Member for Bexley (Mr. Heath), can give us another example of that poetic, lyrical knock-about which is his peculiar contribution to Conservative leadership. As I listened to him, I was tempted to reply in kind. If I do not, that is because there are a number of serious things, which, as Minis? ter of Housing, I must say at this Box in order to help the building societies to overcome the crisis of confidence in them which the Tory Press and Opposition spokesmen, whether they mean it or not, have been causing by their attitude during the last three weeks.

If anybody took their allegations seriously, the housing programme would indeed be placed in jeopardy. We have heard allegations this afternoon that 300,000 people will be denied houses in the coming year by the failure of the programme. We have heard about sales of homes grinding to a halt, and last night, though I did not see him on the television, we had the right hon. Gentleman the Leader of the Opposition making one of his classic simplifications: "Under Socialism you cannot even get a mortgage"—[HON. MEMBERS: "Hear, hear."] They say, "Hear, hear". At a time when the building societies have massive mortgage policies, those who say that people cannot even get a mortgage are undermining confidence in the building societies and not in this Government.

I shall try to state the facts which will enable the public to realise what the situation really is behind the propaganda and that what the building societies are facing are temporary difficulties which they can and will overcome in a matter of months. First of all, I shall give the House as sober an account as I can of the precise character of these difficulties. I shall then show how they arose, and, thirdly, I shall show how we intend to meet them. In doing so, I think that I shall be able to answer all the questions which the right hon. Gentleman put to me so truculently this afternoon and to which he obviously expected no reply. I shall be able to satisfy him with those replies. These will be my three main themes.

Before I come to them, there is one topic apparently rated by him of the greatest political importance, largely irrelevant to the debate with which I must deal. Throughout his speech he spent a great deal of time demonstrating that the high mortage rates which owner-occupiers are now paying and the increasing difficulty over the last weeks of obtaining a mortgage provide final proof that we as a Government have broken all our pledges to the owner-occupiers in our election manifesto. I want to be perfectly clear on this question of pledges. It is true that the policy of specially favourable interest rates for the whole housing programme was one of the most prominent planks in the Labour election programme. It is true that it has been a vital element in Government policy ever since we have taken office. I am not in the least disconcerted by the lavish care with which the right hon. Member for Bexley has demonstrated how irrevocably we are committed, and I am committed, to the policy of lower interest rates for home loans.

In this part of his speech, there was no exaggeration. It is the precise truth that we are committed to it. Our reputation would be ruined if we did not do it. This is all true, and it is true that we proclaimed the policy in opposition. It is true that we won a great many votes by showing that we believed in it. It is true that, as a Government, we are deeply committed to it. After describing the difficulties through which we are passing today, I shall say something as to how we shall carry it out, not only for home loans but for interest rates for local authority building as well.

There is one proviso which I want to add about home loans. There will always be a very large number of families who cannot afford to buy a house and for whom the right home will be a rented house or a rented flat. That is why a responsible Housing Minister must never give—as my Tory predecessors always gave—almost exclusive priority to the owner-occupier. A reponsible Minister will allocate money and resources fairly between three claimants—first, private enterprise building houses primarily for sale and owner-occupation; secondly, public enterprise building houses primarily to let and primarily for the lower-paid people in the community; and thirdly the combination of private and public enterprise for renovating, improving and modernising the vast stock of old houses which will otherwise degenerate into slums. These are the three jobs which one has to do, and in our election manifesto we promised a balanced policy of this kind.

I am determined to see that the balance is properly observed. We have to keep our pledge to the young couple who want their instalment burdens eased by lower interest rates, and who are sadly distressed today. We must not do so at the cost of the young couple who want their council rents steadied by interest rates or the old couple who do not want a new house but who passionately want their old home improved by the addition of a bath, a sky-light or an indoor w.c., and who, anyway, are far more interested in the increase of the old-age pension and the abolition of prescription charges than in housing. Our first job was to decide in what order our social commitments should be carried out. We made the decision that the old and the sick must come first, that before we did anything else we must raise the old-age pension and abolish the prescription charges.

I am sure that we were right to do this, even if a number of things which I, as Minister of Housing, naturally wanted had to take second place to these responsibilities. But if old-age pensions and prescription charges are the priority No. 1 of a Socialist Government, housing certainly comes second.

When I surveyed the situation I had inherited from my predecessor, I decided, long before the Milner Holland Report produced the final confirmation, that the most desperate crisis we faced was the shortage of cheap rented accommodation and that this could only be met by a rapid increase in council house building.

I have told the councils to get on with the job of making good the shameful neglect of public sector housing, particularly in our great conurbations, which characterised Tory policy right up to election year. Already this is having its effect. Council house starts were sagging when we took over, and in the first quarter of this year we were still, with 32,000 starts, well behind the three months January—March 1964 figure, with its 37,000. But last month there was a slight but encouraging spurt forward—the first sign of our new drive—11,800 starts in March 1965, compared with 10,600 starts in March 1964—an 11 per cent. increase in public sector building. And I am glad to add that industrialised building has lately been accounting for something like a quarter of all the council housing tenders approved, which is higher than ever before.

We have, therefore, kept our pledge to the old and to the sick. We have begun to keep our pledge to the people in the queue for council houses at the kind of moderate rents they can afford. And simultaneously I have launched a new campaign designed to wake up hundreds of thousands of tenants, landlords and owner-occupiers to the hard cash the Government are prepared to give them for house improvements, because house improvements are a major part of our housing policy.