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Building Societies Association

Volume 977: debated on Wednesday 30 January 1980

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asked the Secretary of State for the Environment if he will meet the chairman of the Building Societies Association.


asked the Secretary of State for the Environment when last he met the chairman of the Building Societies Association.

I met the chairman of the Building Societies Association on 18 January and we shall meet again as appropriate. My Department has close and frequent contact with BSA representatives.

Is the right hon. Gentleman aware that the record 15 per cent. interest charge, which is the result of this Government's wilful and misguided monetary policy, is causing severe hardship to home owners and particularly to first-time buyers? Furthermore, statements that the rate might go up to 17 per cent. are causing fear and concern. Will he make clear to building societies that the Government will not countenance an interest rate as high as 17 per cent.? Will he also give some hope that the mortgage rate will be reduced shortly?

I share the hon. Gentleman's concern about the high interest rates that prevail in the British economy. The Government are determined to do the one thing that will bring those interest rates down—reduce levels of public expenditure. Since the hon. Gentleman has shown that he shares our concern, I invite him to join us in the Lobby in support of that policy.

After all due concern is expressed about the high level of mortgage interest rates, does my right hon. Friend agree that far and away the greatest difficulty presented to young first-time buyers remains finding the appropriate deposit? Will he confirm that, when circumstances permit, it remains the Government's policy to try to assist in that direction, bearing in mind the good deal being offered to sitting tenants of council houses?

:My hon. Friend will remember that we referred to the desirability of such a scheme in our manifesto, but we made it absolutely clear that it had to follow improvements in the overall economic climate in this country. Nothing can change that relative priority.

:In discussions with the chairman of the Building Societies Association, did the right hon. Gentleman hold out any hope that MLR would come down, and that, as a result, mortgage interest rates would decrease? Does he recall that in the election the Conservatives promised owner-occupiers that they would get a better deal from this Government?

I have not the slightest doubt that they will. Owner-occupiers will get a better deal if we can improve the economic climate and bring down the rates of inflation and interest. The Government are engaged in that battle, and the House will have an opportunity to discuss these matters. I also hope that the hon. Gentleman will support us in our decisions.

Does my right hon. Friend welcome the fact the BSA is in favour of the limit for tax relief on mortgages being extended beyond £25,000?

The Government had to consider that proposal. In all the circumstances, we felt it wrong to move beyond the measures that we have already announced.

:Does the right hon. Gentleman agree that the Government have treated with total contempt many of the house buyers who voted for them last May?

The house buyers who voted Conservative last May voted for a stable economy and the measures that are necessary to bring that about. When we come to account to them for our stewardship they will have to judge whether we have taken appropriate measures to bring that about or whether they would have done better with a party that cries for more public expenditure and which would, therefore, have forced up interest rates. The Labour Opposition have tried to renege on all the things that they were forced to do in government.