I am sure that the Minister's reply will be received with some dismay, not only by this side of the Committee, but also by some right hon. and hon. Gentlemen opposite. We are all gravely concerned about the position of the building societies, and the immense contribution which they have made to our national life in so many spheres.
Throughout this long session we have heard special pleadings on behalf of special causes, and I do not apologise for adding my voice to that of my hon. Friend the Member for Orpington (Mr. Lubbock) in making a special plea on behalf of the building societies.
I hope that the Chancellor's mind is not entirely closed on this matter. Not only have the building societies rendered great service to the community by providing funds which have enabled young people and others to acquire their own homes over many years, but they have been a source of investment for the small investor who has sought somewhere to put his money, somewhere that would be safe, and somewhere where he could expect a reasonable and fair return on his capital investment.
During the current year the building societies have experienced real difficulties.
I do not want to over-emphasise or exaggerate those difficulties in in any way, and I do not want to suggest that there is any lack of confidence on anyone's part about the ability of building societies to overcome their temporary problems. Nevertheless, the building societies represent a very important part of the economic life of the nation. About £4,700 million is invested in building societies in this country. In addition, it is notable that in the first four months of this year they managed to advance about £330 million for house purchase and other purposes. In view of the difficulties which the building societies face as a result of the financial crisis which the country has been experiencing—and I do not make any sort of political point out of this—it would be a very helpful gesture to them, and to the small investors and those people who are seeking to purchase homes, if the Chancellor would consider making a worthwhile concession in this case, not only in respect of Corporation Tax but more particularly in respect of the proposed new Clause which deals with relief from Capital Gains Tax.
Building societies work under properly restricted conditions, and I do not quarrel with those restrictions. It is right that they should be required to maintain reserves. This is in the interests of the building societies themselves and their reputation as well as for the protection of the small investor. Secondly, they are limited by Statute in relation to the form of investment. I shall not labour the point by going into all the ways in which building societies may invest their money. They are well known to all hon. Members. Nevertheless, they are prohibited from making speculative investments, unlike any business concern—and in that can be included a very wide sphere of business activity. They may not use their money for speculative purposes.
For that reason alone there is justification in arguing that because they are restricted they are entitled to receive special treatment in relation to tax. Also, because of the wise distribution of investment within the limitation imposed upon building societies, some have been able to gain considerable advantages from capital gains. This has been due largely to the fact that they have spread their portfolio carefully and wisely within their limitations.
With this in mind I repeat the hope that these Clauses will receive earnest consideration. Building societies need growth, security and expansion, and not only because of the services they have given to the small investor, and not only because of the service they render to the nation in providing house mortgages, but because they are an integral part of the national financial structure. I hope that the Chancellor, who has had some wise second thoughts on some other matters, may have some second thoughts in this respect also. It would gain him the support of a very wide section of the public, as well as of the building societies themselves.