§ 12. Mr. DuncanTo ask the Chancellor of the Exchequer what representations he has received from building societies wishing to become buyers and sellers of houses and not wishing to become banks; and if he will make a statement. [702]
§ Mrs. Angela KnightNeither my right hon. and learned Friend the Chancellor of the Exchequer nor I have received any representations from building societies wishing to become buyers and sellers of houses.
§ Mr. DuncanI am grateful for that answer.
Surely what the housing market needs is activity without house price inflation. Does my hon. Friend accept that building societies are mistaken in wanting to become 791 banks? They have all the resources and expertise in the market; would they not do better to become buyers and sellers of houses, in order to break the logjam? They could treat houses much as garages treat cars and institutions treat stocks and shares.
§ Mrs. KnightMy hon. Friend has made some interesting points. I assure him that the Building Societies Act 1986 allows societies to engage in the activity that he describes. I shall, however, convey what he has said to the Building Societies Association when I next meet its representatives.
§ Mr. PikeDo the Minister and the Government feel any regret about the changing role of the building society, which is losing contact with its customers and members and is more concerned about the shareholders? We all used to believe that the building societies were on our side, but now they are concerned only about profit, and about becoming banks.
§ Mrs. KnightThe hon. Gentleman must realise that a great many people have benefited from the decisions made by building societies in regard to conversion and flotation. What societies need to do is assure their members of the importance of staying mutual. I urge them to do so, and hope that the hon. Gentleman will do the same.
§ Mr. Ian BruceDoes my hon. Friend agree that there has never been a better time than now, in recent years, for people to enter the housing market, and that it is the Government's policy of keeping down inflation and interest rates that makes it such a good idea for people to go out and buy their own homes?
§ Mrs. KnightMy hon. Friend has made a good point. The average mortgage now costs about £180 per month, and rising prosperity and low inflation and interest rates have made this a very good time at which to buy a house. It is interesting to note that, 20 years ago, inflation stood at more than 26 per cent. That is the sort of problem that people experienced under a Labour Government.