§ 4. Mr. Stratton Millsasked the Chancellor of the Exchequer if he will introduce legislation to control the financial policies of building societies.
§ Mr. BarberNo, Sir.
§ Mr. Stratton MillsIs not this one of the major sectors in the economy in which the public interest has no control? Does it not interfere with my right hon. Friend's policy of lowering interest rates, and is he satisfied with this position?
§ Mr. BarberAs I think my hon. Friend will remember, because I think he was a Member of the Committee which considered it, the Building Societies Bill, which we passed in 1960, introduced a fundamental change in the law governing the accounts and audits of building societies, which I think has proved to be generally satisfactory. With regard to interest rates, in the end I think the rates of interest on mortgages must remain a matter for settlement 982 between a society and its borrowers, because, apart from other matters, the circumstances of individual societies vary.
§ Mr. FellIs it not a fact that a major plank of Conservative policy is home ownership, and is it not pretty serious in these days for young people who want to buy their own homes to find that they cannot do so because of the very high rates of interest for mortgages?
§ Mr. BarberI recognise the difficulties to which my hon. Friend refers, but I do not think the right way to tackle them would be to do something which, if carried to its logical conclusion, would amount almost to the nationalisation of the building societies.
§ 21. Mr. Liptonasked the Chancellor of the Exchequer if he will introduce legislation to control the rates of interest charged on mortgages by building societies.
§ Mr. BarberNo, Sir.
§ Mr. LiptonWhy do the Government continue to ignore the harsh burden of high mortgage interest on one of the thriftiest sections of the population, a rate of interest which goes up very quickly on the slightest provocation and comes down all too slowly? Will the hon. Gentleman at least commend the two or three building societies which, disregarding the advice of the Building Societies Association and following the good example of the Public Works Loan Board, have recently reduced their charges?
§ Mr. BarberAs I said, in the end the decision on these matters must rest with individual societies because they have to take into account their own local circumstances and financial position.
§ Mr. Stratton MillsIs my hon. Friend satisfied that the rates of interest recommended by the Building Societies Association have kept pace with the reduction in the Bank rate?
§ Mr. BarberThat is not a matter for me as a member of the Government to answer.
§ Mr. CallaghanThe Minister said that it is not a matter for him, but does he not realise that the rates at present 983 charged by the building societies are frustrating the Government's stated intention of encouraging home ownership? Therefore, is it not a matter for him when some building societies reduce the rate of interest and others do not? Does it not warrant some inquiry from him as to the reasons?
§ Mr. BarberI am delighted, and I am sure my right hon. Friend is delighted, when any particular society is able to reduce its rate of interest, but it is absolute nonsense to suggest that the Government are not encouraging home ownership and that a considerable increase in home ownership is not taking place. To say so is to ignore the facts.