HC Deb 01 April 1969 vol 781 cc223-5
32. Mr. Alison

asked the Chancellor of the Exchequer what recent further consultations he has had with the building societies relating to the mortgage rate of interest; and if he will make a statement.

Mr. Diamond

I would refer the hon. Member to the statement which I made on 17th March and to the Answer which I gave to my hon. Friend the Member for Bolton, West (Mr. Oakes) on 20th March.—[Vol. 780, c. 42–44.]

Mr. Alison

Between the two dates, on 19th March, as the Chief Secretary will recall, he expressed surprise at the haste with which the building societies had reacted to the increase in Bank Rate. Why has he not done something about this, following his surprise, by asking them to temper the wind?

Mr. Diamond

The comment which I permitted myself was about the speed with which they reacted. I do not withdraw that comment.

37. Mr. Dobson

asked the Chancellor of the Exchequer whether he will now set up an official inquiry to study the problem of mortgage rates.

Mr. Diamond

I explained in answer to Questions and in debate the week before last why the Government considered that there should be no further inquiry at the present time.

Mr. Dobson

That is a most unsatisfactory Answer. Is my right hon. Friend aware that overwhelming pressure of public opinion is building up, which indicates that he should look again at mortgage rates, particularly the question whether they reflect the rate supposed to be paid by owner-occupiers, namely, 8½ per cent.? It has been suggested that much more than that is being paid, and I am sure that an inquiry will bring that out.

Mr. Diamond

The rate to which my hon. Friend referred is that recommended by the Building Societies Association. I understand that most building societies have accepted the recommendation, but it is always the case that certain individual societies may charge a different rate, sometimes slightly more. It is also the case that many building societies are required by their contracts to continue the existing rate.

Sir G. Nabarro

Is it not a fact that mortgage interest rates must be directly related to the rate paid by the societies to borrow money? Is the right hon. Gentleman aware that the Co-operative Permanent Building Society leads the field by offering 9⅜ per cent. gross for small deposits?

Mr. Diamond

I was not aware that the Co-operative Society leads the field in this, but I am not at all surprised that it does so in this as in other respects.

38. Mr. Dobson

asked the Chancellor of the Exchequer, when he plans to have further discussions with the Building Societies Association about mortgage rates.

Mr. Diamond

I would refer my hon. Friend to the Answer which I gave to my hon. Friend the Member for Bolton, West (Mr. Oakes) on 20th March.—[Vol. 780, c. 138.]

Mr. Dobson

Will my right hon. Friend have yet another look at this matter? He said in our debate that he thought that the building societies were a little hasty in putting up the rate. Will he not go further and take the matter back for further thought?

Mr. Diamond

I do not want my hon. Friend to think that this is a matter to which we do not give the most careful and continuing thought. I repeat what I said then, but it does not affect the present situation. The building societies are responsible for their own decisions, and I do not think that there is any cause at present for further discussions.