§ 50. Sir Leslie Plummerasked the Minister of Agriculture what additional annual cost to the agricultural industry will result from the increase in the interest rate of the Agricultural Mortgage Corporation to 5½per cent.
§ 51. Mr. A. J. Championasked the Minister of Agriculture the estimated yearly cost to the agricultural industry of the increase in the interest rate charged by the Agricultural Mortgage Corpora- 2552 tion, from 4½ per cent. to the recently announced figure of 5½per cent.
§ Sir T. DugdaleIf new loans continue to be made by the Corporation at the current rate of about £6 million a year, the recent increase in the lending rate from 4¾ per cent. to 5½ per cent. would result in an additional annual cost to borrowers of £45,000 in a full year. The whole of this additional cost is not necessarily borne by the agricultural industry, as the Corporation has regard only to the security offered, and does not require its loans to be applied solely to agricultural purposes.
§ Sir L. PlummerWhat saving will be effected by the Treasury as a result of this increase in the interest charge?
§ Sir T. DugdaleThat is another question.
§ Mr. ChampionWill the rate of interest follow the recent rise in the Bank rate?
§ Mr. H. HyndWhen the Minister says that the whole of the £45,000 will not necessarily be borne by the agricultural industry, does he mean that it will be passed on to the consumer?
§ Sir T. DugdaleNo, Sir. Loans from the Corporation are based on land, and it is not necessary that all the money so lent will be used in agriculture. In reply to the hon. Member for Derbyshire, South-East (Mr. Champion), the new rate does not apply to existing loans or to loans offered before 26th February, when the new rate was announced.
§ Mr. F. J. ErrollBecause of the higher rates now being imposed, could not the conditions of lending be somewhat relaxed?
§ Sir T. DugdaleThat is an entirely different question to the one on the Paper, but I will have it looked into.
§ Mr. SpeakerIt is half-past Three.