§ 8. Mr. Liptonasked the Chancellor of the Exchequer how much money is now on deposit with the Post Office Savings Bank; and how this money is being used by the Treasury.
§ Mr. P. ThorneycroftThe total amount on deposit with Post Office Savings Banks on 30th March, 1957, was about £1,700 million. This money is invested by the National Debt Commissioners—in accordance with Sections 16 and 17 of the Post Office Savings Banks Act, 1954 —in Government and Government-guaranteed securities.
§ Mr. LiptonIs the right hon. Gentleman aware that about £160 million of these deposits are invested in Government stocks at only 2½ per cent. or less, and could not at least this part of the deposits be more fruitfully invested?
§ Mr. ThorneycroftI appreciate that the spread of investment is fairly wide. No doubt some are below 2½ per cent., but many are above.
§ Mr. NabarroIs it not a fact that this very large sum of money is available for investment year by year for the expansion of such important programmes as the nuclear power programme? Would not the Question of the hon. Gentleman opposite connote that he is opposed to an arrangement of that kind?
§ 10. Mr. Liptonasked the Chancellor of the Exchequer whether he will arrange for Post Office Savings Bank deposits, on which 2½ per cent. interest is paid, to be used for granting mortgages at a fixed interest rate of 3½ per cent. or 4 per cent., thus reducing the present cost of house purchase by owner-occupiers.
§ Mr. P. ThorneycroftNo, Sir.
§ Mr. LiptonWhy does the Treasury make it very expensive and difficult for ordinary people to buy their own homes? Would not the investment of at least some of these deposits on mortgages not only increase the yield to the Post Office bill make considerably cheaper for people, for young married couples especially, the buying of their own homes? Does the right hon. Gentleman not recollect the Conservative Party's 1951 manifesto, in which the right hon. Member for Woodford (Sir W. Churchill), said that the more we had of a property-owning democracy the better it would be?
§ Mr. ThorneycroftOne of my principal concerns is to see that inflation does not grow in this country. That would not be helped by the variable interest rates prescribed by the hon. Gentleman.
Mr. H. WilsonWhatever the merits of the proposal that these funds in particular should be used for this purpose, may I ask the right hon. Gentleman whether he is aware that the hopes of a property-owning democracy have been very much prejudiced by the very high rates of interest which now have to be paid on mortgages, compared with 1951?
§ Mr. ThorneycroftNevertheless, I think it is agreed that if we are to control inflation we must have a monetary policy which does deter people from investing beyond a certain level, and the recommendation of the right hon. Gentleman to use physical controls for the same purpose would have the same kind of effect.