Part of Orders of the Day — Supply – in the House of Commons at 12:00 am on 21st June 1978.

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Photo of Mr Michael Heseltine Mr Michael Heseltine Shadow Secretary of State, Shadow Secretary of State for Environment 12:00 am, 21st June 1978

The prices relate to the incomes. The critical question is the level of real take-home pay. For the hon. Member for Liverpool, Walton (Mr. Heifer) to barrack me when he has sat behind the Government, of which he was once a member, who have presided over a consistent decline in the standard of living of the British working people is an affront if ever there was one. Let us agree upon one thing that is certain. Until there is a genuine improvement in the real standard of living of the British people, the demand for new homes will remain at a relatively sluggish level.

The Secretary of State of course faces the inevitable dilemma of the inadequate building programmes under his responsibility, for he saw that instant reaction in rising prices very dramatically the moment there appeared to be an increase in people's disposable income. He took the short-term expedient of choking off the supply of building society money by rationing mortgages. I would not deny that this is bound to have an effect in keeping prices under control in the short term. But equally, of course, it has the long-term effect of diminishing the construction industry's confidence in building new homes, and therefore one has a vicious circle of decline.

Until there is an adjustment of house prices, there will not be an increase in the number of houses coming on to construction stream. In practice, of course, the right hon. Gentleman need not have bothered to take the action he took to ration the level of mortgage provision, for it became apparent within a few weeks of that panic action that the Government's so-called recovery, so short lived, was already at an end, and the increase in the level of money supply and today's figures indicating the level of inflationary wage increases show that the economic strategy will have to be corrected in the relatively near future, which in itself will choke off any increase in houses prices anyway.

The Secretary of State's technique in bringing house prices under control has had the effect of once again reducing the demand for houses but has also in the short term caused an increase in their price levels dramatically faster than the rate at which real take-home pay was rising.

Not only has the Government's overall economic policy gravely weakened the housing situation, as all statistics indicate, but the detailed specific decisions taken by the Secretary of State within the environs of his own Department have consistently added to the problems created by the overall economic situation.

First, the Community Land Act is recognised widely as a major deterrent to the provision of land for new housing and to the confidence of the industry. It is without question the most oversold feature of the Government's housing programme. In its first year of operation, 32 acres of land were released. In the second year, between 350 and 400 acres were released. I calculate that, at 10 houses to the acre, that would enable in two years an additional 3,000 houses to be built when the overall housing construction programme for the country in that period was about 600,000. To suggest that the Community Land Act had anything other than an irritant effect in the provision of new houses is not borne out by the statistics.

I was surprised that the Government have become so concerned at the charges being made against the Act that only on 19th June they issued a circular claiming that Liverpool is to get 1,000 more homes thanks to the Act. If one reads behind the sensationalised healdines produced by the Department, one discovers that 87 acres of disused British Rail land have been rescued from dereliction and transferred to the local authority. Because that is claimed to have been done by the Community Land Act, it is claimed as a triumph for the Act.

But the fact is that there was nothing to stop the transfer of the land from British Rail to the local authority long before the Act was a gleam in a Socialist eye. What it proves is not that the Act is necessary but that my hon. Friend the Member for Hornsey (Mr. Rossi) has been consistently right in pointing out that there is far too much land in the city centres in the ownership of local authorities and nationalised industries, that too little of it is being released, that too little is known of the scale of the ownership, that the process of developing it should and could have been dramatically speeded up, and that that did not need the Community Land Act from beginning to end.