Is the Minister aware that this is wholly inadequate? If he will not pay attention to anything I say, will he pay attention to the CBI? Is he aware that the CBI has said
The present escalation of land prices calls for most urgent action."?
Is the Minister further aware that the CBI has declared that the scandal of rising land and house prices is a running sore poisoning its whole efforts to combat inflation? In view of this, does not the Minister realise that the time has come when he simply must do something?
I do not wish to belittle the importance of the problem in any way. It is the Government's policy to stabilise home prices by building more homes and increasing the supply of developable land with financial support for land acquisition and for providing services.
Does the Minister recognise that the best possible way of dealing with the problem of land prices and bringing more land on to the market is simply to introduce site value taxation? The mere fact that the Liberal Party has been advocating this for about 20 years is only one reason why it is right to do so, but it is also a reason why both of the other parties will eventually accept it.
Regarding the reply given to my right hon. Friend on 14th June, will the Minister also confirm the reply to which he had to admit on that occasion that since his right hon. Friend abolished the Land Commission the price of land has risen by 53 per cent., and that it is going up at a rate, between one time and another, of about £250 per week? In the event, is it not time that the Government took more action than merely making available £80 million to local authorities?
I certainly do not accept those figures. It is possible to produce any statistics of that sort by selection of areas throughout the country. Of course there is pressure in certain areas, but there is certainly no evidence that nationalisation of anything has in itself lowered prices.
The average price of private houses in the United Kingdom mortgaged with building societies in the first quarter of 1972 was 21 per cent. higher than in the corresponding period of 1971 and 32 per cent. higher than in the corresponding period of 1970. The increase for private houses mortgaged with building societies in England and Wales was 33 per cent. in the first quarter of 1972 compared with the second quarter of 1970.
House prices in Great Britain over the two years April, 1970, to April, 1972, rose by 29 per cent. while earnings rose by 24 per cent. In the first half of this period earnings were rising substantially faster than house prices; since then the position has been reversed.
Why does not the Minister tackle this problem instead of the Secretary of State making speeches about Harry Hyams? There are plenty of Harry Hyams causing the problem of house prices. The Minister talks about money supply being adequate to provide a greater number of houses and his right hon. Friend the Chancellor of the Exchequer says that there is a 23 per cent. increase in the money supply. But if house prices are rising, according to the right hon. Gentleman's figures, by 32 per cent., how on earth can people buy more houses?
The short answer is that they are buying houses. A larger number of houses have been bought on mortgage than ever before. A higher percentage of people aged 25 or under are included among those buying. Twenty-six per cent. of new houses are going to people aged 25 or under and about 25 per cent. of all mortgages are going to people earning £30 or less. It would be perfectly easy to bring down the price of houses—
I could do it if I asked the building societies to restrict credit to where it stood in 1970 so that there was a 20 per cent. deposit and a 20-year repayment period instead of virtually no deposit and a 30-year repayment period. Then, while the better off would always be able to afford the deposit and the repayment, those at the lower end of the market would be unable to afford the loan and the supply of houses would dry up because builders would cease to build. I would have no part in any such restrictions.
The rise in house prices since 1967 has been consistently somewhat above the general retail price index. Only between 1969 and the end of 1970 was it less than the rise in earnings and the position has since been reversed. House prices over the last two years have risen by 29 per cent. while earnings have risen by 24 per cent.
On the tape this afternoon at 1 p.m. it was announced through a report from the Nationwide Building Society's latest survey that there has been a 17 per cent. rise in new house prices in the first six months of this year. Will the right hon. Gentleman please explain, on the question of supply and demand which he constantly comes back to, how it is that every month he stands at the Dispatch Box and announces increased percentages in new housing under construction and yet, according to figures from his Department, there are fewer houses under construction today than there were in June, 1970? The figures have dropped from 416,000 to 396,000. How can that be in view of what the right hon. Gentleman has been telling the House during the last two years?
The hon. Member is quite wrong. Last year showed a 26 per cent. increase in starts of new houses in the private sector and this year already the first quarter has shown a further 14 per cent. rise.
That is a demonstrably complacent reply, revealing that the Government now have nothing to offer save excessive over-optimism. Will the Minister confirm the report which some of us have received that at this morning's conference he suggested that one way of reducing house prices was greatly to increase the deposit which would-be purchasers would have to put down for a mortgage?
I never suggested or advocated that we should increase the deposit so as to reduce house purchase demand. I said exactly the opposite: that I would have nothing to do with such a policy. A few minutes ago I pointed out that it would be easy to stabilise house prices by doing just that but that it would deprive people who could not afford the deposit or could not afford a short repayment period of the chance of getting a home, and I would have nothing whatever to do with it.
Can my right hon. Friend say to what extent the rise in the price of houses and land is due to the disgraceful failure of the previous Government to build enough houses?
When we took office, home loans were hard to get, requiring a substantial deposit and a comparatively short repayment period, there were more bankruptcies among builders than at any time since the war and houses were not being built. We have been able to create an effective demand by co-operation with the building societies and by lifting the local authority ceiling on mortgages. House are now being built.
I take this opportunity to correct a figure which I gave the hon. Member for Willesden, East (Mr. Freeson) a few minutes ago, which may have misled him. I said that in the first five months of this year the increase in private sector housing had been 14 per cent.; in fact it was 16 per cent.
Is the right hon. Gentleman aware that when his party took office there were 416,000 dwellings under construction in England and Wales? Today, on the latest figures available from his Department, there are 396,000 houses under construction. Therefore, is it not correct to say that, far from increasing the rate of building, there has been a slowing down in the rate under the present Government?
When the hon. Gentleman's party was in power there was a fantastically long delay in the completion of houses. The 1971 figures show an overall increase in starts. The first five months of 1972 show an overall increase in starts, taking the public and private sectors together.