HC Deb 13 June 1974 vol 874 cc1815-7
17. Mr. Norman Lamont

asked the Chancellor of the Exchequer what instructions he has given to the Bank of England about the rôle to be played by the banking system towards property companies in financial difficulty.

Mr. Dell

None, Sir.

Mr. Lamont

I appreciate the political sensitivity of the subject and the strong feelings which exist about speculation, but in any instructions that may be given will the Paymaster-General bear in mind the connection between the property industry and pension funds? Will he bear in mind that a complete collapse in the property industry would very much add to the considerable difficulties already facing many pension funds?

Mr. Dell

I shall bear in mind the facts to which the hon. Member has referred. We are in close contact with the Governor of the Bank of England, who is keeping us informed of developments affecting the property companies and their possible implication.

Mr. Ashton

Are not property companies absorbing an abnormal amount of money from pension funds, which should be going into building societies to help young couples to buy their own homes? Cannot my right hon. Friend introduce legislation to insist that pension funds and unit trusts devote a large proportion of their income to building societies so that young couples can get loans?

Mr. Dell

There are regulations governing these funds and, of course, I am prepared to consider any proposal made to me.

Mr. Robert Carr

Will the right hon. Gentleman bear in mind that, whatever ought or ought not to be the situation in the future, the present situation is that the pensions of many millions of people are heavily dependent on the point raised by my hon. Friend the Member for Kingston-upon-Thames (Mr. Lamont)?

Mr. Dell

We are in close contact with this problem but we do not under existing law govern the investment decisions of pension funds. If people invest ill advisedly, it comes poorly from Conservative Members to recommend the Government to rescue those investors from the results of those decisions. However, this is an important problem and the fate of pension funds is of wide significance. We have that fact in mind.

Mr. Molloy

Is my right hon. Friend prepared to consider other activities of so-called property companies? For example, how about those that indulge in asset stripping? They seem to get away with vast profits and to damage some aspects of British industry.

Mr. Dell

I am always prepared to consider any matter that my hon. Friend brings before me.

Sir John Hall

Will the right hon. Gentleman consider the suggestion of the hon. Member for Bassetlaw (Mr. Ashton) that he should encourage property companies to invest in building societies, and at the same time remove the fiscal disadvantage which those companies would suffer by so doing?

Mr. Dell

If the hon. Member wishes to put a proposal before me I shall consider it.

Mr. Loughlin

If we are to hear these pathetic pleas from investors in property companies, whether they be pension funds or anyone else, would it not be better if the Government were able to direct investment to social ends as well as to the highest rate of return and take over the insurance companies and pension funds?

Mr. Dell

I hope my hon. Friend will bear in mind that one of the things we have done is to bring down the rate of interest to assist building societies to help channel money into the buying of houses. All this is of great social importance.

Mr. Higgins

Is the right hon. Gentleman aware that one of my hon. Friends has made a proposition? It appears on the Order Paper and will be debated later today.

Mr. Dell

We look forward to his speech during the debate.