HC Deb 14 February 1957 vol 564 c1426
24. Mr. Langford-Holt

asked the Chancellor of the Exchequer whether, in view of the reduction in the Bank Rate, he will exclude from the operation of the credit squeeze and credit limitation money borrowed for house purchase.

Mr. Birch

As my right hon. Friend pointed out in his statement on 7th February, the reduction in the Bank Rate was not a signal for the relaxation of credit.

Mr. Langford-Holt

Would my right hon. Friend not agree that, in addition to its political desirability, on which I trust we are both agreed, this is also deflationary in its object in so far as if people are paying for a house or repaying a loan for house purchase they cannot buy motor cars, television sets and other forms of consumable goods, the purchase of which my right hon. Friend wishes to restrict in the home market?

Mr. Birch

I entirely agree that house ownership is very desirable.

Mr. Jay

Is there any reason at all for having high interest rates for house ownership, and is not this an obvious case for some selectivity in interest rates policy?

Mr. Birch

This matter has been raised before, and I doubt whether it is practicable. The rate at which a building society lends depends upon the rate at which it can raise money.

Mr. Fernyhough

Does the Minister's reply mean that the Tory Party has now forsaken its belief in a property-owning democracy and that, far from encouraging people, they are taking financial means to discourage them?

Mr. Birch

No, Sir.