Cable quizzes chancellor

6.51.53pm BST (GMT +0100) Tue 24th Jun 2008

[June 05] Vincent Cable (Deputy Party Leader; Twickenham, Liberal Democrat): Will the Chancellor accept that with mortgage lending at its lowest level since the early '90s, prices in vertical decline and the extent of arrears and fraud exposed by the Bradford and Bingley's problems, more drastic intervention is required?

That drastic intervention could take the form of using the perfectly sensible, but pitifully small, proposal from the Prime Minister, which is to acquire repossessed homes for social renting, and operate it on a much larger scale, using the prudential borrowing powers of local councils and the Housing Corporation?

Alistair Darling (Chancellor of the Exchequer, HM Treasury; Edinburgh South West, Labour): As the hon. Gentleman has said, taking action on repossessed homes will help. We may want to consider other measures as well. I say to him that house prices have been falling, which is inevitable given what is happening and the constraint of credit and mortgages, but that is happening against a background of house prices having risen by about 45 per cent. over the past five years. We will continue to take whatever action is appropriate to support not only the economy, but the housing market.