§ 14. Mr. Fowlerasked the Secretary of State for Trade and Industry whether he is now in a position to make a statement on his consideration of excessive interest rates on second mortgages.
§ 19. Mr. Arthur Lewisasked the Secretary of State for Trade and Industry whether he has now completed his investigation into the matter of the application of profits control to financial institutions in general and interest rates on second mortgages under the second stage of the counter-inflation programme; and whether he will make a statement.
§ The Under-Secretary of State for Trade and Industry (Mr. Peter Emery)A proposed Price and Pay Code for application in the second stage of the counter-inflation programme has now been published. In addition, on 19th February I made known a proposed voluntary code of conduct for those granting second mortgages.
§ Mr. FowlerWe appreciate that my hon. Friend has announced a voluntary code, but I am sure he will appreciate that the Crowther Commission says that restrictions in this respect should not be left to voluntary action. Is it not a matter of urgency that second mortgage firms should be licensed? Will my hon. Friend examine whether some form of temporary licensing may be arranged before the legislation that we are all so eagerly awaiting?
§ Mr. EmeryMany people granting a second mortgage act under the Section 123 procedure. I do not accept that the temporary code is in any way in place of legislation. We have made it clear that legislation on consumer credit should be brought forward as quickly as possible. None the less, until time can be found for that, there is major benefit in having a voluntary code.
§ Mr. SkinnerCan the Minister tell us why property spivs are subject only to a voluntary code, to some kind of ethical procedure, while wages are being controlled by law? Why is it, for instance, that the Leader of the Liberal Party, operating as a director of London and County Investments, can operate second mortgage schemes at 280 per cent. and get away with it, while the hospital workers can have only £1.84?
§ Mr. EmeryThat question has nothing to do with the problem of those who wish to ensure that only the genuine firms—
§ Mr. SkinnerGenuine? That makes me laugh.
§ Mr. Emery—concerned with the second mortgage business, which has provided a great deal of assistance to a number of those who want second mortgages, should have a voluntary code to ensure that people who want to borrow money from them may know that they are behaving in a proper and reasonable manner.
§ Mr. PardoeDoes the Minister recognise that the quality and function of directors should be judged by the effects that they are able to have on the policies of their companies? In this respect, bearing in mind the disgraceful remarks of the hon. Member for Bolsover (Mr. Skinner)—
§ Mr. SkinnerTruthful, and that is what is hurting you.
Mr. Pardoes—remarks that everyone in the House would expect from the hon. Gentleman, will the Minister recognise that the rate of interest now being charged by this company as the result of the activities of my right hon. Friend is the lowest second mortgage rate in the country?
§ Mr. EmeryI believe that it is true that the directors of the company mentioned took action which has corrected the situation which previously existed.