The answer is to ensure that supply matches demand more carefully. There have been increases in house formation and a need, as the Government announced and for which they provided finance, to build more houses. That will assist the ratio.
I do not accept the Liberal Democrats' comparison of today's economy with the 1990s. They can talk our economy down as much as they like—they have been at it today—but it is forecast to grow this year, next year and in future. That is an inconvenient truth, but we should put it on the record.
The second main charge is that personal debt is too high. It is true that it has risen, but so have total household assets, against which the debt is secured. They stand at £7.5 trillion. Household balances remain strong and net household wealth has increased by 72 per cent. in real terms since 1997.
Of course, consumers need to be able to make the right financial decisions when they take out debt, be it in mortgages or in other forms. The Government are helping with that through our work on financial capability. With the Financial Services Authority, we have agreed to provide £12 million to run a pathfinder project in the next two years, following Otto Thoresen's recommendations on financial capability. That will test the best ways in which to ensure that everyone in the country can get free, impartial and high-quality advice on their money when they need it. Advice is also available for people who get into difficulty, and our financial inclusion fund is helping to ensure that that is available to those who need it.
Let me deal with the Liberal Democrats' third point on the housing market and repossessions. It is hard to take Liberal Democrat forecasts on the housing market seriously since they have been predicting a crash for most of the past 10 years. Regardless of the objective conditions in the economy, they trade on gloom and fear and predict a collapse. They were at it again today. I suppose they think that, if they keep saying it for long enough, one of these days it might turn out to be true, a little like the stopped clock, which tends to be right twice a day.
What do the facts tell us? The Liberal Democrats drew comparisons with the 1990s, but they are easily dismissed. House price inflation is declining relatively gradually and house prices are still higher than they were a year ago. Our expectation, as set out in the Budget, is for sluggish or flat house price growth this year. The Liberal Democrats do no one favours by scaremongering about 25 per cent. falls.
There were high numbers of repossessions in the early 1990s, but the picture is different today. Last year, despite 2 million extra mortgages and 1.8 million more home owners, there were less than half as many repossessions as in 1991 or 1992. The Liberal Democrats were at it again on the Treasury Committee, when they questioned Bank of England chief economist, Charlie Bean, about the so-called housing crash. He told the Committee last Wednesday that repossessions are still at low levels and that special measures were simply not called for at this juncture. The Government would be ready to consider special measures if, objectively, they were required. Currently, they are not.
The hon. Member for Taunton said that the Conservative party did not have any policies. He was being a bit cruel; they have a couple of policies and I want to spend a little time on mortgage regulation. The Conservatives issued a document not long ago called, "Freeing Britain to Compete: Equipping the UK for Globalisation". Mr. Redwood was in charge of the document, which I shall quote. He said:
"We see no need to continue to regulate the provision of mortgage finance, as it is the lending institutions rather than the client taking the risk."
Tory party policy only a couple of months ago was to deregulate mortgage finance provision to prepare us for globalisation. I cannot think of a more ridiculous, pathetic and dangerous policy than the one that the Conservatives developed and were trumpeting, until the beginning of the credit crunch taught them that perhaps regulation of mortgages is a good thing.
Britain's economy is in a far stronger position than it was. Personal debt is far lower than the amount of household assets and support is in place for those who get into difficulty. The signs are that house price inflation is declining relatively gradually and the number of repossessions is small. That does not mean that we are complacent. We will be keeping a close eye on how things go and will stand ready to act if the situation should deteriorate.
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