HC Deb 24 May 1960 vol 624 cc192-3
13. Mr. Lipton

asked the Chancellor of the Exchequer what complaints he has received about the burden of mortgage interest rates; and what replies he has sent.

Mr. Amory

The Treasury has received 30 letters since the beginning of the year about the rate of interest charged on building society mortgages. The reply has been that the rate of interest on mortgages must remain a matter for settlement between a society and its borrowers.

Mr. Lipton

Is the Chancellor aware that many of the 3¼ million borrowers from building societies are getting a raw and rough deal, the more so in the light of the Government's airy talk about encouraging a property-owning democracy? If the right hon. Gentleman intends to look at this building societies problem at all, will he have a searching inquiry made into their management costs? They are the only moneylenders who can alter a contract when it pleases them—very quickly when the Bank Rate goes up and very slowly when the Bank Rate goes down.

Mr. Amory

In response to the rather critical tone of the hon. Member's question, I must say that I think the building societies do a very fine job. It must be remembered that they have to borrow before they can lend. [An HON. MEMBER: "Why?"] The rate at which they can borrow must be related to the demand on and supply of capital, and they cannot be insulated from the effect of market prices.

Mr. Emrys Hughes

Can the right hon. Gentleman say how many of these letters of complaint he has received from local authorities in Scotland? Is he aware that local authorities in Scotland would provide local work for the unemployed if the rates of interest were not so high? Is he further aware that there is a great deal of indignation because high rates of interest make the housing problem more acute?

Mr. Amory

But even then the fact must be faced that the rate of interest on money borrowed must be related to the supply of capital available.