HC Deb 04 February 1964 vol 688 cc969-70
29. Mr. Marsh

asked the Chancellor of the Exchequer if he will take steps to control building society interest rates charged on mortgages to house purchasers.

Mr. Maudling

No, Sir.

Mr. Marsh

May I ask the right hon. Gentleman whether he does not consider that when these building societies affect, as they do, about 2½ million borrowers, with a total borrowed of about £3,000 million, and when societies as reputable as the Halifax Building Society can reduce their rates, he has some responsibility to exert some influence?

Mr. Maudling

I think that building society charges on the money they lend are determined by what they have to pay in a competitive market for what they borrow.

Mr. Marsh

With respect to the right hon. Gentleman, my Question is whether the Government will accept some responsibility for some degree of control over an organisation which has this large influence on the economy of this country? If some reputable building societies can reduce their rates, why should the Building Societies Association prevent others from reducing their rates?

Mr. Maudling

I think that the word "control" is misleading. The only way to get the rates to borrowers down, compared with the rates that societies have to pay, is by providing a subsidy. If the hon. Gentleman means a subsidy, let him say so.

Dr. Bray

If the right hon. Gentleman is prepared to call into consultation people on the control of prices, wages, and profits, why should he exempt the money market on interest rates?

Mr. Maudling

I think that we are far from lacking in consultation with the people concerned in the money market. But the principle underlying this is common sense. If building societies have to pay x per cent. for the money they borrow, they have to charge a related percentage on the money they lend.