§ 8. Mr. Robin F. Cook
asked the Secretary of State for Scotland if he will make a further statement on the operation of the special mortgage fund set up by the Building Societies Association in consultation with local authorities.
§ Mr. Hugh D. Brown
As I indicated in my reply to my hon. Friend the Member for Kirkcaldy (Mr. Gourlay) on 24th March, progress with the scheme has not been all that I would have wished. Discussions continue with the building societies about their taking a wider view of lending policies, and we are encouraging 413 local authorities to seek to involve individual societies more closely in meeting local housing needs.
§ Mr. Cook
Does my hon. Friend agree that the answer he gave to my Question on the last day the House sat before the Summer Recess indicated that the building societies were unduly restrictive in operating the scheme, since only a handful of families in the whole of Scotland have succeeded? Is he aware of the difficulties which this poses for the regeneration of inner city areas? If the building societies will not be more flexible in their arrangements, will my hon. Friend consider increasing the sums available to local authorities for lending?
§ Mr. Younger
Is the hon. Gentleman aware that, as a result of the Government's recent action in increasing interest rates, many of our constituents who are trying to buy their own homes will be paying upwards of £5 a week more in mortgage repayments? As this is a result of the social contract, will the hon. Gentleman ensure that home buyers are separately represented in future discussions of the social contract so that they can have their case heard?
§ Mr. Brown
I am more concerned with the matters raised by my hon. Friend the Member for Edinburgh, Central (Mr. Cook)—namely, looking after first-time borrowers, especially in the large cities, where there is tenement property for which the building societies will not lend. That is the stumbling block in encouraging people into owner-occupation.
§ Mr. Carmichael
Does my hon. Friend agree that the ring that the building societies are throwing round certain areas is deplorable? Will he urge local authorities, and perhaps the Government, to aid the inner city areas, especially areas such as the West Centre of Glasgow, by environmental improvement schemes? That may, by a backdoor method, encourage the building societies to give more money for some of these houses.
§ Mr. Brown
I have enough bother about exclusive limits without trying to define the ring that the building societies put around certain areas. I think it is to the credit of Glasgow that there is environmental improvement in the private sector. It has been an enormous boost and encouragement to building societies to go in and lend on property where the environment has been improved. We shall give Glasgow every encouragement in that direction.
§ Mr. Welsh
What specific representations has the Under-Secretary made to the joint Government and building society liaison committee on this matter? Is he aware of the net outflow of building society funds from Scotland which could be used to help low-income families and young married couples? Why not use some of the oil revenue? I am sure that the Shah of Iran would be willing to help if the hon. Gentleman could not get resources from other sources nearer at hand.
§ Mr. Brown
The hon. Gentleman must know that there is constant discussion and dialogue between the Government and building societies at United Kingdom level and at Scottish level—indeed, I have had them myself. In that respect there is nothing wrong with the discussions. It is the outcome with which we are a wee bit dissatisfied.
§ Mr. Teddy Taylor
Does the hon. Gentleman agree that the horrifying increase in mortgage rates and the reduction in the availability of mortgages generally, not only for old property, will have a desperately severe effect not only on couples buying houses but on the Scottish building industry, particularly bearing in mind that owner-occupation in Scotland is at a low level? Has the Secretary of State been successful in getting any form of exemption for Scotland in terms of this difficult problem?
§ Mr. Brown
That is a typical exaggeration. The hon. Gentleman must be aware of the statement made yesterday by the chairman or managing director of the largest building society in the country to the effect that it does not think that the increased rate of interest will have any bearing on the number of people looking for mortgages.