HC Deb 05 July 1955 vol 543 cc955-7
62. Mr. Daines

asked the Chancellor of the Exchequer whether he is aware that, as a consequence of the financial and economic policy of the Government, building societies are unable to raise sufficient funds for prospective house purchasers; and what steps he proposes to take so that the societies will not again have to raise their rates to borrowers.

64. Mr. Coldrick

asked the Chancellor of the Exchequer if he is aware that, as a result of the Government's credit policy, building societies are restricting the amount of advances which they are making to would-be house purchasers: and whether he will take steps to alter his policy so as to avoid hardship to such people.

Sir E. Boyle

My right hon. Friend sees no reason to interfere with the operation of monetary policy in the field of house purchase, or with the terms on which the building societies borrow and lend.

Mr. Daines

Can the hon. Gentleman say whether the policy of his right hon. Friend is not greatly undercutting the Government's policy of encouraging people to buy houses in which to live; and, secondly, does it not make nonsense of the Tory propaganda claim of a property-owning democracy?

Sir E. Boyle

No, Sir. The present Government's housing record shows quite clearly their success in providing new houses for the people to buy. But monetary policy is a very important part of the Government's general economic policy and my right hon. Friend does not intend to make a special exception in the case of house purchase through building societies.

Mr. Coldrick

Is it not a fact that the changed position of the building societies has been brought about in consequence of the Government's policy, and is the Minister aware that this change in the policy of giving advances to would-be house purchasers is causing a good deal of apprehension among builders and building trade workers?

Sir E. Boyle

I understand that this issue will be raised by the building societies at their monthly meeting next Friday, but there is no reason at all to interfere with their discretion in this matter.

Mr. Gaitskell

Is the hon. Gentleman aware that a serious situation is now developing in regard to the building societies? Because of the high rates of interest which can be earned elsewhere, depositors are switching their money from the building societies to other institutions and, in consequence, the building societies are having to curtail their lending quite seriously. Is it the intention of the Government that this should continue? If not, what do they propose to do about it, and will they at least consult the building societies to see what steps can be taken to prevent the obvious diminution in business which will otherwise follow?

Sir E. Boyle

I know that my right hon. Friend will bear in mind what the right hon. Gentleman has said, but I cannot add this afternoon to my original answer.

Mr. Nabarro

Is it not the fact that the Co-operative building societies have shown the greatest increase in participation in building mortgages, particularly for houses, in the last twelve months and that they have derived direct benefits from the policy of Her Majesty's Government?