§ Barbara FollettTo ask the Secretary of State for Social Security if she will estimate the effects of a change in the way the standard interest rate is calculated by including mortgage lenders which have converted to banks on(a) the level of the standard interest rate and (b) the cost to the Government. [24400]
§ Mr. Keith BradleyThe standard rate for mortgage interest payments for people on benefits would currently be 8.17 per cent. if mortgage rates of the largest banks, including building societies which have recently converted to banks, had been included equally with the main building society rates. This estimate is based on current averages of the largest building societies and banks basic mortgage rates. However, historically the gap between the mortgage rates of the two has been significantly smaller than at present and the rates might converge once again in the future. How the interest rates of banks and building societies move relative to each other in the future is, however, impossible to tell.