HC Deb 14 July 1970 vol 803 cc1343-4
10. Mr. John Fraser

asked the Minister of Housing and Local Government if he will make proposals to reduce mortgage interest rates.

Mr. Channon

It is not possible to isolate mortgage interest rates from the general level of interest rates. I am satisfied that the building societies recognise the need to reduce their lending rates as soon as this can be done without reducing the flow of deposits.

Mr. Fraser

But since the hon. Gentlemen, when in opposition, slated the former Government over the housing interest rates, will the Government act as quickly on the G.L.C. mortgage rates—which have gone up—as they did on giving sanction to sell council houses? Can we have a little instant government to make house purchase easier?

Mr. Channon

I would remind the hon. Gentleman that local authorities must make sure that they are not running lending schemes at a loss, and that they also have to borrow for their lending.

Sir G. Nabarro

Will my hon. Friend bear in mind that whereas Bank Rate has been reduced twice, from 8 per cent. to 7 per cent., there has been no commensurate reduction in mortgage interest rates for some time? Although it does not automatically follow that there should be a reduction, there is no doubt that building societies today have ample funds to lend but are frustrated from doing so due to the high interest rates, which are deterring borrowers?

Mr. Channon

That is true, but my hon. Friend would agree that Bank Rate is relevant only in so far as it reflects and affects rates of interest in general.

Mr. Crosland

Is the Minister completely unaware that in the recent General Election every Tory candidate was attacking the Labour Government for not reducing mortgage rates and was promising that a Tory Government would do so?

Mr. Channon

Perhaps I may remind the right hon. Gentleman that Mr. George Brown made some very foolish comments in an earlier General Election.