I beg to move, That the Clause be read a Second time.
One of the most disappointing features of the Bill has been the Government's failure to give a date for the introduction of the guarantee scheme. It is still my view—I may be wrong; I do not make a pretence to omniscience—that by itself, without the guarantee scheme, the option mortgage scheme will not be sufficient to help the surge in private home ownership which is so badly needed.
To help achieve this surge in private home ownership, two things are needed. Mr. Speaker, you would not allow me to debate the first of them, but perhaps I might be permitted one short sentence. We should like to have seen a revival of the old £100 million scheme under the House Purchase and Housing Act. However, it is not possible to debate it under this Bill, because the Money Resolution will not permit it.
The second thing is also very important, and it is to give people some help with their deposits. Since the Government are not willing so far to introduce their guarantee scheme, my hon. Friends and I have put an alternative on the Notice Paper which I suggest would cost the Government comparatively little money and would help prospective home buyers. It would also provide a great incentive for saving. I take the view that that is very important, and I am sure that hon. Members on both sides will agree.
I admit frankly that the proposal in the Clause, for technical reasons, has been worded in a way which is not precisely as I should have preferred it, but I hope that the Parliamentary Secretary will not criticise me too severely on that point because, if fault there be, it lies with the Government for having drawn the Money Resolution so tightly that it has been impossible for me to put down the exact phraseology which would have been appropriate for this capital grants scheme.
I should like to see an incentive for young couples to save. For the sake of argument, let us say that a couple have saved £500. We think that there is then a case for some form of scheme whereby, in one way or another, the Government would grant them an extra £100 towards the deposit for the purchase of the house which they wish to buy.
The Government may say that, in the Clause, I am proposing that the extra grant should be given to the qualifying lender and not to the borrower—in other words, to the building society and not the borrower. It would be out of order for me to argue for grants to borrowers, so I shall not do that, but I am sure that the Government will be quite clear about which I should prefer.
Some building societies argue that, on grounds of thrift and financial prudence, it is unwise to give 100 per cent. mortgages. There is considerable dispute in the building society world as to the wisdom of giving such mortgages. I do not wish to take sides on that issue, but the Clause would avoid 100 per cent. mortgages, would provide incentives for saving and, at comparatively little cost, would help people to put down money for a deposit.
We wish to be helpful to the Government in a constructive manner, as we are always, and we have given the Minister as many discretionary powers as possible so that he will not rule us out by saying that we have been too rigid. Obviously, he will wish to make conditions about the maximum amount, and other conditions will be necessary, but the principle of capital grants for deposits, particularly if the Government are not prepared to introduce their guarantee scheme, is one at which the Government should look.
The Minister will be aware that there is a similar system in Australia which works well. The Australian precedent is the one to which I would draw the attention of the Parliamentary Secretary. Many people have been helped by the Australian scheme, and I hope that the Minister will look at the suggestions which we put to him in a sympathetic way. The Australian system has been of great help, and I am sure that it will go on being so in the future.
Turning to the detailed provisions of the Clause, the House will see that it is divided into four subsections. First, we say that the provisions of the Section shall have effect when a person enters into a contract to purchase a freehold estate. Secondly, we say that the contract should be entered into on or after 1st April, 1968. That is the date which the Government are so anxious to preserve at all costs for the mortgage option scheme.
We make it a condition that a person and his spouse intend to make use of a dwelling situated on the land as their home, and we also provide that they must have acceptable savings, which we define later in the Clause as moneys which have been saved in accordance with conditions which the Minister may by Order prescribe. In particular, he can make conditions as to the minimum period during which the money must have been saved. Another condition which he may lay down is that the money shall be deposited with certain bodies.
Another most important condition would be the maximum amount of acceptable savings which a person may save so as to qualify to be a borrower. This does not set out to provide someone with a large amount of capital so as to get another capital grant. That would be an indefensible position for us to advocate.
Subject to those conditions which the Minister may prescribe, he will be able to grant to a qualifying lender—since we have to work within the framework of the Bill, although there is a strong case for making it to the borrower—a sum of money equal to one-fifth of the sum of the acceptable savings. That money could be used for part of a deposit towards the purchase of a house.
We go further, because we think that, if there is to be such a power, it should be made by Statutory Instrument. The Minister will have to make a great many Orders when he comes to enforce Part II of the Bill. He will have to make Orders with regard to schemes, for example, and I hope that one of them will bring the guarantee scheme into effect. If he were to accept the idea of a capital grants scheme, he would exercise the power by Statutory Instrument, and we suggest that that should be a negative Order.
I do not pretend that, in opposition, it is possible to draft a Clause which the Government will say immediately is totally acceptable and does not need amendment. As I have explained, the purpose of the Clause is to assist prospective house purchasers, because the greatest obstacle to people buying their own houses is not so much the repayments which they have to make as the actual money which they have to raise in the form of deposits.
My hon. Friends and hon. Gentlemen opposite will recall in "Cathy Come Home" the scene in which she goes to a building society and says, "Can I buy a house? If so, how do I set about it?", and she cannot raise the money for a deposit. The raising of the money for the deposit is the biggest single obstacle to anyone buying a house.
I concede that when the guarantee scheme is introduced, it will help a great deal. Unfortunately, we have been told that we cannot have the guarantee scheme in the foreseeable future. No doubt we shall debate the scheme in some detail later this evening. But, whether or not the guarantee scheme is introduced, there is something to be said for a capital grants scheme. There are many variants of the scheme, of which this is one. Other schemes have been argued which emobdy principles of this kind, and I am not wedded irrevocably to this one if other hon. Members can produce better alternatives.
I move the Clause so that the House can consider taking a small step towards helping people buy houses by assisting them to get sufficient money together to put down in the form of a deposit. It would also have the effect, which the Government's guarantee scheme does not, of greatly increasing the incentive to save.
Anything that does that should be considered very carefully by the Government, because the important secondary aspect is that we would increase saving in the country, we would encourage thrift, and we would make it much more worthwhile for people to save—and that is something which should appeal to the Government and to the Chancellor of the Exchequer.
In times of financial crisis it is probably irresponsible of any Opposition to put forward plans that would cost a vast sum of money. Perhaps this is not the moment for their implementation. I would make two points on that. First, if the Minister says, "We are very interested in your scheme and we would like to examine it further and perhaps try to introduce it in a year or two's time", I do not think that we could possibly object to that, because it is a new scheme that we are putting forward.
Secondly, I do not think that the scheme will cost the Government very much money. If they are afraid of it on financial grounds, then they could make the conditions such that it would cost them as much as they want it to cost. They could make the conditions restrictive or unrestrictive, as they felt inclined. The Government would have the power.
I will not go into details of the financial crisis at the moment, but if the economic situation should change for the better during the Government's period of office, they would always be able to make changes in the scheme to make it more generous than they had originally envisaged.
I hope that it will not be thrown out purely on the ground of cost, because this is something which the Government should consider. It is something which my right hon. and hon. Friends have been keen on for some time, but this is the first time that we have had an opportunity—although this is a brief opportunity—to debate it in the House.
Everyone will agree that it is the deposit which is the biggest difficulty for people who wish to set out to buy their own house. If we can achieve some method of helping them with the deposit, and the Government are not prepared to introduce their guarantee scheme at the moment, then they should seriously consider some scheme of capital grant.
There is something to be said for the view, although I will not be dogmatic about it, that this scheme is better than the guarantee scheme on the general principle of deposits and saving in general. I do not wish to denigrate the guarantee scheme, because it will be of help when it comes in.
I hope that the Government will look at the scheme, and will be able to tell us tonight that even if they cannot accept it they will at least be prepared to consider it as a suggestion for helping people to buy their own house. A capital grant of this kind, to help people with their deposits, would not cost very much, and might do a great deal of good in the housing field.