§ 20. Mr. Shepherdasked the Chancellor of the Exchequer if he is aware that a large factor in the high cost of loans from building societies is the present high rate of return on National Savings Certificates; and whether he will now bring these rates more into line with the broad national interest.
§ Mr. du CannThe building societies no doubt take into account the yields 266 on many types of investment in fixing their rates for advances and deposits. Given the nature and purpose of National Savings Certificates it would be undesirable to change their terms frequently.
§ Mr. ShepherdIs it not very desirable that building society rates should be lowered? They cannot be lowered whilst the present high level of return comes from National Savings Certificates. Ought not the Government to take action here?
§ Mr. du CannI should point out that the full yield on Savings Certificates is attainable only if they are held for seven years to maturity, While the yield on building society investments is obtainable on money lent only for a few months. The two things are not strictly comparable.
§ Sir C. OsborneDoes the amount of interest paid have any material effect upon the amount saved?
§ Mr. du CannThat is a matter of judgment. In some cases, yes. In other cases, no.