Speeches, Interviews & Other Statements

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

1974 Sep 27 Fr
Margaret Thatcher

TV Interview for ITN (housing)

Document type: Speeches, interviews, etc.
Document kind: TV Interview
Venue: ITN Studios, central London
Source: ITN Archive
Journalist: Robert Kee, ITN
Editorial comments: Live, around 1300. MT was interviewed in the studio in discussion with Housing Minister Reg Freeson.
Importance ranking: Major
Word count: 2588
Themes: General Elections, Monetary policy, Housing, Local government

Kee

Housing is a theme which you might well expect to figure prominently in any election campaign. The fact that in our highly technological civilisation this—almost the most elementary of all civilised needs—should be so inadequately met is a reproach to all parties. Indeed all parties pay attention to it in their manifesto. The Conservatives in their make it “Second only to the fight against inflation as an issue” and state handsomely “we want to see that enough homes are provided for the families that need them.” The Labour Party, no less handsome, reveals that “everybody is entitled to a decent home at a decent price.” The Liberals in their manifesto say the problem can be overcome without any extra government expenditure. Let's hear from the Liberals first. Their spokesman on housing, Graham Tope, is talking to Jon Lander. [end p1]

Lander

Mr. Tope, how will Liberal party policy help to solve the appalling problems of young people who are trying to buy their first homes?

Tope

Yes, well, I think this is really the major problem. In my constituency for instance, you need an income of at least £4,000 a year to buy, and this is where I think the Tories have missed the point in subsidising building societies and people who already have a mortgage. We are proposing three schemes in addition to the present mortgage finance available to help people. One is a low start repayment scheme, where young couples with a relatively low income now, but with the prospect of a very much higher income later on in their careers, start with low repayments, and a low interest rate, gradually increasing as their real earnings increase. Another one is what we're calling “index linked” mortgages, where the repayments are linked to the cost of living index, in other words as the cost of living index rises, so does their repayments, but they start at a very much lower level, and the third scheme, which is probably of very much greater help perhaps to older people buying their first home, is what we call the equity mortgage, where the building society grants a mortgage for perhaps 40%; of the cost of the house, and gives an interest free grant to help purchase say another 40%; or 60%; of the house, and retains the capital value when that house is eventually sold. And in that way we feel we can help people actually to get on the first rung of the ladder; once they are on it, because of the nature of inflation, their problems are certainly much easier.

Lander

But isn't this scheme going to put a tremendous burden on the building societies, at a time when investment is down?

Tope

No, in fact, it shouldn't put a tremendous burden on it. We would finance the index-linked mortgage through what we would call a savings bond, again linked to the cost of living, where the capital value of the bond increases in accordance with increases in the cost of living, and one would receive in fact a very small rate of real interest [end p2] on that bond.

Lander

Do you have any proposals for helping people with their deposits?

Tope

No, we don't as such, although this is certainly a major problem, but again, the Tory proposals, which I think are limited to a maximum of £250 are really only scratching at the surface, because a deposit of £750 now, assuming the couple has been able to save the other £500 is really not going to help them to buy a house, certainly nowhere in the South East of England, and so it's only scratching at the surface.

Lander

Finally, and briefly, can I ask you what your proposals are for council housing?

Tope

Yes, we think that Local Authorities must be made to institute really a crash programme of council house building, that their housing cost yardstick must be reviewed much more generously, and the problem at the moment is, whatever the intentions of successive governments, local authorities are just not living up to their responsibility.

Lander

Mr. Tope, thank you very much. [end p3]

Kee

Well, here with me are Mrs. Margaret Thatcher, Conservative Shadow Minister for the Environment, and Mr. Reg Freeson, Labour's Housing Minister. [end p4]

We were of course talking mainly there, listening mainly, to a discussion of the owner-occupiers' problems, their mortgages and there are really two aspects which we have to look at, aren't there? There are the owner-occupiers, but there are also the person who wants to live in a rented house. Can we start with looking at your plans, or both your plans, for owner occupiers, residents? Mrs. Thatcher, you have a fine series of plans outlined here, cheap mortgages, 9½%;, state aid £1 for very £2 saved—sounds lovely, but who pays for it?

Thatcher

I think what happens is that the Labour party is prepared to put out money for everything except this kind of guarantee, and they have in fact spent a great deal of extra cash during their term of office, they've allocated a good deal to municipalisation of private houses, which I shall stop. They have also allocated extra amounts to council houses, and I think you perhaps may well have seen figures which show that for the price which it takes to build one extra council house, you could in fact help three families towards home ownership. Apart from that, in our manifesto, we make it quite quite clear that this is our main promise, and it will be met, if need be by reducing public expenditure elsewhere, or increasing taxation, but we're quite determined to meet this one. It's not unduly expensive.

Kee

Well, it sounds superficially as if you're taking away from one group, the council house occupier, to help the perhaps slightly more prosperous owner-occupier?

Thatcher

Well, there are 5¾ million council houses in Great Britain as a whole, and a number of the people who live in them are better off than some of the people who live elsewhere. I think in part it's a much wider use of resources. If you're going to buy up private houses, which is what's happening under municipalisation, then one large amount of money purchases one house. That same amount of money can be used for tax relief and helping with the deposit to help three or four other families, and there's been a compulsory purchase scheme quite recently of about 36 flats under which the weekly subsidy from the [end p5] ratepayer and taxpayer after the tenant has paid rent, will be of the order of £50 to £60 a week. I don't think that is a very wise use of people's resources.

Kee

So, the same number of resources available, but the question is, who is going to use them more wisely? What about Mrs. Thatcher's charge that you use them unwisely, Mr. Freeson?

Freeson

Well, she may argue that now, but it's only six months since, or a little more than six months since her government was in, her party was in government, and left behind the biggest slump in housing construction in both sectors, both the private and the public sector, that any government has in fact inherited, as we did. It is not an unwise use of resources to get an expansion in housing construction. That is really what we are after initially. The most important immediate issue is to get more houses built. Now we have in fact, already, at least in the public sector, in the short space of about six months, seen an upturn. It is not a dramatic one, but we've certainly halted the decline, we've seen an upturn, we have not yet seen an upturn in the private sector, we have seen a halt to the decline in the rate of starts. Now we've got to get ahead and build more, so it is not an immediate question of shifting from one sector to another. It's a question of getting economic resources used in such a way as to get an expansion in the number of houses and flats being built.

Mrs. Thatcher

First, the housebuilders have welcomed my scheme very warmly. It will give them confidence to start building, a confidence which they have not got at the moment, and as I'm delighted to see the Reg FreesonMinister admits that housebuilding in the private sector is now at its lowest—even lower than it was at this time last year, so the builders have welcomed this scheme, and believe that it will get them building again, so that part of his objective is achieved by my proposals.

Freeson

It is a little bit of an effrontery you know, for any Tory spokesman, and I don't have any particular concern with Mrs. Thatcher, but it is a bit of an effrontery for any Tory spokesman in the [end p6] last government to stand up now, or sit down now and comment about the low rates of housing starts in the private housing sector. We are operating in the disaster area that they left behind, and we're trying to pick up the pieces. They wrecked the housing programme, and we're trying to get it going again and what they've chosen to put as priorities are in fact irrelevant to the immediate issue. The immediate issue is to get a major expansion in housing construction in every direction. Secondly to get a better distribution of resources where help is being given, and thirdly to get a greater variety of different kinds of tenure, whether they be conventional renting, whether they be owner occupation, or whether it be as I would wish to see, a major expansion in the future in what I describe as “co-operative housing.” I have set a study group up to report on this by the end of the year, and we will be putting forward proposals, legislatively, to achieve this further variation and expansion in housing construction.

Kee

Of course, from your manifesto, it's not altogether clear to the ordinary elector reading it just how you propose to do this—except, unless, you mean that the real breakthrough will come from your nationalisation of development land. Now is this so?

Freeson

Well, I don't think that'll be the only breakthrough. What one can achieve in due time as a result of a steady rate of bringing development land into public ownership, is housing construction, and indeed, other forms of construction, far better provided for in the right place in a greater variety and mix than has been the case in our cities in the past, and a stabilisation of house prices so far, a stabilisation of the land costs in house prices, which is something that all governments have failed to achieve over the years past, and certainly in the case of the last government, we saw the worst experience of all, where land prices went up from about something like 200%; in some parts of the country, and certainly 100%; in many other parts of the country.

Kee

Mrs. Thatcher? [end p7]

Thatcher

Can I return to what the Minister described as the immediate issue—to me I see the immediate human issue as this. There are a lot of young people who bought houses in the last two years at high prices, and now have high mortgages to pay. In many cases, they can't pay them. They can't even sell the houses at the moment, because there's a slump in the house buying market. There are many other people struggling because they too have seen their mortgages go up and up and they don't know when they'll stop. That's a situation I'm trying to help, and I'm trying to give young couples some confidence that in future they can buy their own homes and know the maximum amount which they've got to budget for. This is a real human problem, and can I just put one last thing. As you'll know from education talks we've had, I have a reputation for carrying out the manifesto to the letter. Indeed, the Labour Party complaint was not that I didn't carry it out, but that I did, and I can see now why they are worried stiff—they're worried stiff that I'll carry this one out too, and they know it's wise use of resources, and they know it's popular.

Kee

Can we now turn to those who can't afford to buy their own homes? Mr. Freeson, how long do you think you can keep on freezing rents?

Freeson

Well, rents at present are frozen both in the private and in the public sector …

Kee

But how much longer could you …   .

Freeson

Until the end of the year. There could be an extension—we have the power to seek an extension to this, but the plans at the moment are to run through to the end of the year, at which time the rents and subsidies bill ought to be introduced—the rents and subsidies bill that we introduced during the last parliament, would be introduced to carry on with new rent proposals, or new rent policies, both in the private and the public sector, after the end of the rent freeze.

Kee

But if you were returned to office, rents would in [end p8] fact go up after the end of the year?

Freeson

There would be a phasing up of rent increases of rents in the private sector, that is registered rents. They don't have to go up, but if there are in fact rent increases proposed by rent officers, they will be phased in future on a three-yearly basis—a year by year basis over a three-year period, and in the public sector, the most important single thing that we will be doing is to return the freedom of rent fixing to the local authorities instead of retaining it in the hands of government appointed scrutiny boards.

Kee

Mrs. Thatcher, could you just outline what you're going to do for the rent payer?

Thatcher

Well, we agreed that the freeze would stay to the end of the year, again, young people have budgeted on that basis, and so we keep it there until that time, and afterwards, a very similar policy on gradually increasing—we also operated that kind of policy before under counter-inflation, but I'm not quite certain whether we shall re-introduce the Housing Finance Act, before I make up my mind, I want to see the reports of all the rent scrutiny boards which should be in by October, which the present government have not encouraged the rent scrutiny boards to put in by that time.

Kee

Why not, Mr. Freeson?

Freeson

Because we are going to abolish them.

Thatcher

But they have a statutory duty to report under the law as it is at present, and some of them of course have done so.

Freeson

They will report, but so far as their future is concerned, since the system under which they have been appointed will cease to exist under our new proposals, there is not much point in discussing what their future is going to be.

Thatcher

I'm told they have a wealth of really interesting information in them which is why I want to have a look at them before a final decision is made.

Kee

Well, can Mrs. Thatcher have a look at them? [end p9]

Freeson

Well, they'll be reported, as in the normal process, to government and to parliament, they will be available in due time, and the most important factor in this field also is to get an increase in housing construction—now we inherited a programme of about 90,000 housing starts by local authorities: this year it's going to be in the region of 125—130,000—by the end of the year, there'll be an increase in the following years. It's already in train, and that is the first success in a short space of time that we've achieved in this field.

Kee

Well, we'll see, wait for the result of the election to see whether Mrs. Thatcher gets a chance of having her own success. Thank you both very much.