§ 6. Mr. Walter Johnsonasked the Chancellor of the Exchequer how many representations he has received on the subject of the rate of interest being charged by building societies for house mortgages.
§ Mr. HigginsNone, Sir, since the building societies reduced their mortgage rates on 1st January.
§ Mr. JohnsonIs the Minister aware that, while interest rates have been falling generally, building societies are still charging 8 per cent., sometimes more, and that the general public feel that they are being grossly exploited? Will the Government refer this matter to the Monopolies Commission or to another form of inquiry?
§ Mr. HigginsThe public concern which the hon. Gentleman has expressed has not been reflected in the mailbag to which I referred.
§ Mr. JohnsonI will show the hon. Gentleman my mail bag.
§ Mr. HigginsBy all means—if the hon. Gentleman cares to send the letters to me. My hon. Friend the Under-Secretary of State for Trade and Industry recently told the House that he did not consider that a reference of mortgage rates to the Monopolies Commission would be justified at present, although he would continue to keep the situation under review.
§ Mr. McCrindleDoes not my hon. Friend agree that the present boom in private house building is being sustained by the continuing flow of funds into building societies? As building societies have to take a balanced view between the advantages of reducing the rate of interest to existing borrowers and continuing to attract funds to help new borrowers, are not they the best judges of when to reduce interest rates?
§ Mr. HigginsI entirely agree with the balanced view which my hon. Friend takes. If building societies do not pay the market rate to investors they will not attract sufficient funds to meet demands 223 for mortgages and will have to reduce their lending.