Speeches, Interviews & Other Statements

Complete list of 8,000+ Thatcher statements & texts of many of them

1974 Aug 28 We
Margaret Thatcher

TV Interview for ITN First Report (housing and rates policy launch)

Document type: Speeches, interviews, etc.
Document kind: TV Interview
Venue: ITN Studios, central London
Source: ITN Archive
Journalist: Leonard Parkin, ITN
Editorial comments: 1240-1258. The four minute interview was live. Material from the interview was also broadcast on News At Ten.
Importance ranking: Major
Word count: 1183
Themes: Higher & further education, Monetary policy, Housing, Local government finance

Parkin

It's a bit early to talk about election fever, but we've got to face it—the temperature's going up.

This morning the Conservative Party announced their new policy proposals on housing and rates. I'll be talking to Mrs Thatcher, the shadow minister involved, in a moment.

The Liberals have got their campaign off the ground with Mr. Thorpe and other Liberal MP's staging a political invasion of the beaches of the West Country by hovercraft.

There's an attempt to find a seat for Mr Enoch Powell and Mr. Dick Taverne has decided he won't take the Liberal whip.

Football clubs are digesting the Minister for Sport's ideas for stopping hooliganism, including a nation wide identification system. Mr. Howell himself is here to talk about it.

The Russians are having problems with their latest spacecraft—they're bringing it back. [end p1]

First, the Conservative Party's proposals on housing and rates which include plans to keep mortage repayment rates down to 9½%; and to help first time home buyers. At the moment most people pay 11%;.

The shadow secretary of state for the environment, Mrs. Margaret Thatcher, says the Conservatives will give top priority to housing and to helping more people to own their own homes.

Building society mortgage interest rates will be held to no more than 9½%;, and to help the societies pay high enough interest rates to attract money, the rate of tax THEY pay would be varied.

First time house buyers would have help with raising their deposit, with government grants in proportion to how much they've saved themselves.

And council tenants who've been in their houses for three years will be able to buy them at a third less than the market value.

Mrs. Thatcher plans to abolish the present domestic rating system and replace it with taxes related to people's incomes. She also plans to transfer the cost of teachers' salaries from Local education authorities to central government.

Mrs. Thatcher is here with me in the studio. …

Parkin

Mrs. Thatcher, can we look at housing first? How can you possibly peg an interest rate at 9½%;—where's the money coming from, and interest rates can go up and come down?

Thatcher

Well, we did it before, but for all too short a period, I'm afraid. We did it then by paying a direct subsidy. We think a better way is to vary the rate of tax which Building Societies pay. As you know, Building Societies are really non-profit making, but they do pay tax which this year will amount to about £400 million. Now they've obviously got to pay a reasonable rate of interest to those who save with them. Normally, they pass that on to the borrower; so that they don't have to pass it all on, we say we'll reduce the rate of tax, and that will enable us to keep the mortgage interest rate down to 9½%;. One of the purposes of that is to give young people who are buying certainty that their outgoings won't rise above a certain amount, and that's very important in their budgeting.

Parkin

One used to be able to do that by insurance policies, by establishing a rate of interest right at the start.

Thatcher

Indeed, yes, I'm very conscious that I bought my house that way.

Parkin

Now, the money obviously then is going to come from taxation—in other words, the Building Societies will pay £180 million less than they are paying at the moment?

Thatcher

That's right. It's really a very modest proposal when you think of the amount of money now that is going towards municipalisation and that is going towards building Council houses that will require very extensive subsidies indeed, regardless of the economic circumstances of those who are going into new ones.

Parkin

Are you still convinced that the Building Society system is still the best and the only way to finance private house purchase? This voluntary system of organisations? [end p2]

Thatcher

Well, I know it's fashionable to criticise them, but I think it's remarkable that with the expansion of home ownership they've been able to respond so readily. Certainly, we had great difficulties a couple of years ago, when the increased money seemed to go into increased prices, rather than into enabling more people to buy their own homes. We're very wary of that point, and we really must watch it in future.

Parkin

How's your deposit scheme going to work for first-time buyers?

Thatcher

Well, it will take about two years before anyone in fact gets a government grant, because they'll have to do two years' regular saving. And it's a very good thing to encourage people to help themselves, and to encourage people to become self-reliant. We were thinking that if they save regularly with a Building Society for a period of at least two years, first their savings will help other buyers in the meantime, and secondly then we would add a Government grant in the proportion of about £1 of government grant to £2 saved, and of course there'd have to be a maximum on the amount of savings that would be allowed.

Parkin

Can we turn to rates now? How are your ideas on rating going to ensure that the burden of rates is more evenly distributed than it is now?

Thatcher

I think steadily more and more of local expenditure will get transferred to the national exchequer in any event, because local expenditure goes up very fast. Now in fact there are about 9 million more income-tax payers than there are rate payers, which means that ratepayers have an especially high burden on them at the moment. Now the more you can either transfer expenditure from the rates to the exchequer, or in fact the bigger percentage of government grant that you can give to local authorities, the more the burden is distributed. I take the view that with inflation running at the rate it is, the lifetime of the rating system was limited in any [end p3] event, and that what we are doing is putting a definite end on the existing system when eventually I believe within about ten years it would have had to have gone anyway, and be replaced by another.

Parkin

May I just ask you very briefly if you would, isn't this concentrating, or a move towards concentrating very much more power in the hands of central government?

Thatcher

No, I don't think so, because already there is a very big block grant from central government amounting to 60%; of local authority expenditure. People don't so far use that argument, but could we perhaps put it a different way—when I was in education, and it's still the system, we gave large block grants to universities. Now that was not cited as concentrating more power in the hands of central government, but ironically enough was cited as an English example of giving, or Scots, or Welsh, of giving independence to universities.

Parkin

Mrs. Thatcher, thank you very much indeed.

Thatcher

Thank you very much.