I am pleased to note the welcome that many, if not all, hon. Members have given to our proposals in the Bill. I shall try to deal now or in Committee with as many as possible of the points made.
As my right hon. Friend the Secretary of State said in opening, we must see the Bill as part of an overall housing policy. It is too great a temptation, to which the hon. Member for Hove (Mr. Sainsbury) and others succumbed, to regard one piece of legislation as a vehicle for all solutions. The hon. Gentleman gave us a list of about six Bills that this should be but is not. No doubt I could add another half dozen. If one studied the Green Paper and its implications, one could add vet further to the kind of legislation we should wish to introduce.
But the Bill is concerned with two particular aspects of housing policy and not the whole range. It is not a panacea. It is put forward not as a panacea but as a very useful measure which sets out to alleviate a problem of which all of us as constituency Members, if on no other count, are aware. Everyone agrees that we should help many prospective first-time buyers over the hump of initial purchase, and assist many who would become home-owners but with great difficulty.
First, how does the Bill fit in with other policies? As so much stress has been placed upon them, I should like to touch on one or two which are more relevant to the Bill than other aspects of policy.
Although the Bill is basically about providing help for purchase, it gives a further boost to improvement and repair at the time of purchase or within a year or two, a matter to which the hon. Gentleman and one or two other hon.
Members referred. The £600 loan is always part of the main mortgage but many purchasers will want to repair and improve their properties or will be asked to do so by building societies. Many of us have had that experience. I had it some years ago when I bought my own property.
In many cases the loan assistance will mean that the purchaser will have £600 of his own savings released. He will still be entitled to an improvement grant, so the extra help that we are giving will often allow the carrying out of improvements or repairs which might otherwise have been done later or not at all. I put stress on this potential, particularly in the older areas. I was much concerned to ensure that the cash provisions of the Bill would cover this. The Bill will help those buying older houses as well as new.
I turn now to the question of new building, to which there has been much reference. About 60,000 new homes are bought by first-time buyers every year. That is about 40 per cent. of all new homes built for owner-occupation. In 1976, 40 per cent. of new houses were sold at prices below the average paid by first-time purchasers in England and Wales. Therefore, many such buyers will qualify for these benefits. Perhaps more important, there will be a chain effect, as increased demand in the lower part of the market for second-hand houses works through the system. Much of the new demand will be met by increasing the supply of new homes. Private house builders have been through a difficult period in the past few years. We want to reintroduce stability, and this Bill, in its own small way in this particular respect, will help.
We are still suffering from the speculative boom of the early 1970s, which was fed by hot money and unchecked house price inflation, to which my right hon. Friend the Secretary of State referred. The result at that time was inevitable, and there were people warning—not just politicians on the Left but people in the industry and the market—about what would happen: the bubble burst, and starts slumped.
I intervened in the speech of the hon. Member for Hornsey (Mr. Rossi) and said "The hon. Gentleman has got his figures wrong again." Starts in the private sector slumped from over 200,000 in 1973, as a result of the collapse of the boom, to 106,000 the following year, with a further decline in prospect when I received the situational report on my appointment as Minister in March 1974.
The present Government have had to build up basic stability against a background of the worst economic crisis that the Western world has faced since the early 1930s. In our particular field, mortgages had to be dealt with. That was our first concern, as hon. Members will recall. As a result—without going over the history of 1974–75—we took our first steps towards the stabilisation arrangements, which are now operating fairly well, and we are now, as a result of these various measures and other factors, in the range of about 135,000 to 155,000 starts and completions each year. That is a marked difference from the prospect when we took office.
I am not trying to make a particularly strong polemic about this matter—I do not want to indulge myself or the House in it—but the figures are there, and they did not happen by accident. The figures slumped and collapsed, and there was the prospect of even worse to come, with the mortgage famine and other factors at the time.
I am not complacent about the figures. They are by no means good enough. But we have been operating against a very serious economic background, and the figures are significantly higher now than at the time of the collapse of the boom, and they are likely to rise. With falling interest rates for mortgages and for credit for the building industry, demand for new houses has begun to pick up. Indeed, the builders, who are not natural optimists, now report growing demand from most parts of the country, and they expect starts of about 150,000 this year.