HC Deb 09 July 1973 vol 859 cc996-7
2. Mr. Walter Johnson

asked the Secretary of State for Trade and Industry if, in view of the fact that the building societies have not reduced mortgage interest rates at a time when record sums have been invested, he will now refer the building societies to the Monopolies Commission.

The Minister for Trade and Consumer Affairs (Sir Geoffrey Howe)

Mortgage interest rates are at present under discussion between the Departments concerned and representatives of the building societies. A reference to the Monopolies Commission would not be justified at present.

Mr. Johnson

Does not the Minister realise that the greedy and irresponsible attitude of the building societies has shaken public confidence in them, and that there should be an inquiry? Is he aware that the astronomical increase in house prices which we had in 1971 and 1972 was largely due to what the building societies did in indiscriminately making loans for mortgages on property which was not worth it?

Sir G. Howe

I do not accept the general and wide-ranging nature of the hon. Gentleman's allegations. The rate for investment which the Building Societies Association last recommended was that which it judged necessary to attract sufficient sums to finance home ownership. As I have said, the matter is under discussion by my right hon. Friends with the Building Societies Association.

Mr. S. James A. Hill

Is not my right hon. and learned Friend aware that young married couples find extreme difficulty in obtaining mortgages? Could not the Government look into the possibility of second mortgage schemes for newly married couples?

Sir G. Howe

The Government are certainly concerned to see an expansion of home ownership by young married couples. I shall draw my hon. Friend's suggestion to my right hon. Friend's attention.

Mr. Millan

Is the building society rate to go up to 10 per cent.? If it is, does not that show the completely artificial and wasteful nature of the so-called subsidy over the last three months?

Sir G. Howe

It would be quite wrong for anyone to assume the premise of the hon. Gentleman's question. As I have said, the matter is under discussion by my right hon. Friends and the Building Societies Association.

Mr. Ridley

Is it not a fact that the building societies are not a monopoly and neither' are they profit-making, so quite what the hon. Gentleman wants to investigate one does not know; but does my right hon. and learned Friend agree that it would be better if the Government left the building societies alone to balance out their receipts and their payments as they think fit?

Sir G. Howe

There are obvious reasons why the matter I have mentioned should be discussed by the Government with the Building Societies Association. The other matters to which my hon. Friend refers are among those which I have borne in mind.