HL Deb 05 February 1981 vol 416 c1279

3.13 p.m.

The Earl of Kinnoull

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether, if insufficient people are persuaded to invest in "granny bonds", more traditional sources of Government borrowing, that do not compete in a market serving housing finance, will be readopted.

The Minister of State, Treasury (Lord Cockfield)

My Lords, up to 31st January subscriptions to the new "granny bonds" amounted to £600 million. The target for increased National Savings for this financial year was £1,500 million, but this covers other measures as well as "granny bonds", and there are, of course, still two months to go. Sales of gilt-edged securities will continue to be the major source of finance for the Government's borrowing requirement, but in present circumstances an additional contribution from National Savings is also needed.

The Earl of Kinnoull

My Lords, while thanking my noble friend for that reply, and without suggesting that my noble friend either qualifies for "granny bonds" or has a stake in them, may I ask him whether, despite the encouraging influx of monies into the building society movement in recent months, he is aware that the movement is very anxious about "granny bonds" and the incursion into the housing finance market? As the Government target for "granny bonds" is, I believe, £3 billion for 1980–81, as against £4.5 billion for the building society movement, will he keep the matter under review?

Lord Cockfield

My Lords, I am of course aware of the anxieties to which my noble friend refers. Nevertheless, the position is as he indicates, that the flow of funds into the building societies has been at a record level, and is continuing. This indicates that the building societies have met the situation successfully, and they are to be congratulated on so doing.