HC Deb 15 June 1961 vol 642 cc621-2
18. Mr. Marcus Lipton

asked the Chancellor of the Exchequer if he will introduce legislation to control the rate of interest charged by building societies on advances to owner-occupiers purchasing their houses through building societies.

Mr. Barber

No, Sir. The rate of interest on mortgages must remain a matter for settlement between a society and its borrowers.

Mr. Lipton

Would not the hon. Gentleman agree that, with the highest mortgage interest rate for forty years, it is sheer humbug to talk about encouraging a property-owning democracy? Would not he also agree that, instead of forcing building societies to raise their interest charges, which is what he is doing at present, causing serious hardship to over 2 million borrowers, steps should be taken to force interest rates down?

Mr. Barber

The hon. Gentleman will pardon me if I point out that building societies have to borrow money before they can lend it. If their interest rate on loans were controlled in one way or another, the individual society would not be able to adjust the rate it offers to investors so as to maintain an adequate inflow of funds.