Shadow Secretary for the Environment
Conservatives believe that the right way of tackling the nation's housing needs is to help young couples and others to own their homes rather than to be perpetual tenants of a local council.
Home ownership gives people independence and a stake in their country.
As well as making good social and philosophical sense, helping people to buy their homes is good economic sense.
For as figures published in January of this year by the Housing Research Foundation show, we can help three families to buy their home for the same yearly cost to public funds as it takes to keep one family in a council house.
In fact, the only immediate cost arising from our proposals is that of reducing the mortgage interest rate from 11 per cent. to 9½ per cent. and holding it down to that figure or below.
This will be done by adjusting the tax paid by the building societies and, after allowing for a saving in tax relief because of the lower interest rate, the loss of revenue to the Exchequer will be between £180 million and £200 million.
In this way we would be able to keep down the mortgage interest rate without the societies having to pay less favourable interest to their depositors.
The 9½ per cent. ceiling on mortgage interest rates will also apply to local authority mortgages.
Various questions have been raised about the liquidity and reserve ratios of building societies, the legal restrictions upon them and the possibility of widening their powers.
In order to settle these matters a Conservative Government would set up a one-year inquiry to sit full time and to make recommendations about the future role and structures of these societies.
The scheme to help first-time home buyers with their deposits through a grant on a £1 for every-£2-saved basis will not cost anything for at least two years because, in order to get the grant a person will have to save with a society for at least that time.
When the scheme matures the cost may be about £100 million a year.
The scheme to give families who have lived in council homes for at least three years the legal right to buy their house or flat at two-thirds of the market price will cost little or nothing.
Our proposals are specifically designed to avoid the sort of sharp increase in house prices we have seen in the past.