At 1976 survey prices, reported lending in 1974–75 totalled £686 million; the allocation for 1977–78 is £100 million. At out-turn prices, the 1974–75 lending amounted to £536 million; in 1977–78, with the building society support arrangements which my right hon. Friend recently announced, the figure will be £273 million. In additon, building societies are lending about £1,000 million a year generally on older properties and to poorer families.
Is the right hon. Gentleman aware that there has been a drop of about 84 per cent. in the funds available to local authorities to lend for house purchase and improvement? Does he realise that this particularly affects young married couples, especially those looking for older properties? Would not the Government be wiser to shift resources away from so much council building towards more grants and mortgages for young people?
The hon. Gentleman is comparing like with unlike. Council house building is the construction of housing. Mortgage facilities, with which the hon. Gentleman is rightly concerned—and so am I—are related to existing properties, which are not necessarily the same thing in terms of resources, except that they may percolate through the market so that we get new building at the other end of the scale. Local authority mortgage lending has been cut back in order to protect new house building, and investment and other resources are being put into rehabilitation. It is not correct to suggest that the percentage cut-back in mortgage lending is also affecting our controls over Section 105 spending on improvements and rehabilitation.
Has my right hon. Friend had an opportunity to read the recommendations from the Oldham Metropolitan Borough Council on this matter in which the council expresses concern at the cut-backs and asks that he gives special consideration to areas which have a large proportion of older terrace-type houses which young people frequently wish to buy but mortgages for which are difficult to obtain from building societies? Will he pay regard to this suggestion in his allocation of money?
Certainly, and not only in respect of allocation for local authority mortgages but also in our talks with the building society movement. In seeking to establish and carry forward the support arrangements which my right hon. Friend announced recently, we have paid particular attention to areas with the worst problems and older properties. In the past few years—and this is a continuing process—there has been a considerable increase in building society lending down market, which has reached something like 23 per cent. of total lending going on pre-1919 dwellings, and nearly 20 per cent. of lending being to families with below-average incomes.
Does the information that the right hon. Gentleman has given about the cut-back from £700 million to £100 million over a period of three years, for the reasons that he has given, mean that the Labour Party has abandoned its pledge in the October 1974 General Election to increase—not to reduce—local authority mortgage lending?