HC Deb 21 March 1974 vol 870 cc1304-6
6. Mr. McNamara

asked the Chancellor of the Exchequer if he will now make proposals designed to reduce interest rates paid by existing house purchasers.

15. Mr. McCrindle

asked the Chancellor of the Exchequer what discussions he plans to have with the Building Societies Association.

Mr. Dell

I am considering the present difficulties, and preliminary discussions were held with the Building Societies Association last week.

Mr. McNamara

Is my right hon. Friend aware of the grave social harm that has been done to many young married people who started to buy houses in 1970 and 1971 and have seen enormous increases in their mortgage repayments and interest charges? Will my right hon. Friend recommend to the Chancellor of the Exchequer that since, quite properly, we have frozen council house rents and helped people in some areas with their rates, equally we should freeze interest rates on mortgages on private houses? In fact, does he not agree that we should bring down those interest rates?

Mr. Dell

I am well aware of the problem mentioned by my hon. Friend, namely, the difficulties of people who have recently bought houses. All these matters will be under consideration and I hope that we shall be able to come to a conclusion on the subject before too long.

Mr. McCrindle

When next the right hon. Gentleman meets the Building Societies Association will he take steps to urge it to redouble its efforts to attract additional funds from the public, perhaps in ways to which it has not as yet turned its attention? If the right hon. Gentleman has any plans to give a subsidy in respect of existing owner-occupiers, will he make it conditional upon the building societies presenting a blueprint for additional and news ways of raising funds?

Mr. Dell

I am very glad that the hon. Gentleman, through his supplementary question, has himself urged the building societies to look for other sources of money that might be helpful in the current situation.

Mr. Skinner

When my right hon. Friend is studying this matter, will he take note of the fact that before the General Election in 1970 the Leader of the Opposition declared that he had proposals to lower mortgage interest rates below 8 per cent.? They were known as the Merritt-Sykes proposals, based on the Australian system. May I ask my right hon Friend not to meddle with those proposals?

Mr. Dell

My hon. Friend has referred to another example showing where the plans of the Leader of the Opposition went awry.

Mr. Fell

In regard to the question raised about freezing rates of interest, does the right hon. Gentleman not agree that if interest rates were frozen without enormous subsidy arrangements forthcoming from the Government the supply of money would simply freeze up and there would be no mortgages for future house purchasers?

Mr. Dell

it is true that the interest rate at which building societies can offer mortgage money depends on the rate of borrowing. Nevertheless, there is a problem, to which my hon. Friend has drawn attention, and the Government must consider it as speedily as possible.