Orders of the Day — Building Societies (Interest Rates)

Part of the debate – in the House of Commons at 12:00 am on 9 April 1973.

Alert me about debates like this

Photo of Mr Frederick Corfield Mr Frederick Corfield , Gloucestershire South 12:00, 9 April 1973

I am sorry that it should have fallen to my right hon. and learned Friend the Secretary of State for the Environment to defend the aberrations that apparently go on in the Chancellor of the Exchequer's bathroom. My friends in the water industry tell me that we are heading for a drought. If that cuts down my right hon. Friend's baths and, therefore, the bright ideas which occur while he is in his bath, that must be proof positive that providence is on the side of the Conservative Government.

I take the view that if, in order to achieve growth, one goes in for printing money at the rate at which we have printed it, one is bound to have a very rapid increase in the price of houses, the number of which can only be increased very slowly. I have no doubt, as my hon. Friend the Member for Northants, South (Mr. Arthur Jones) has indicated, that that has been aggravated by some very old-fashioned practices on the part of the building societies. Moreover, I cannot see that paragraph 10 of the White Paper, which tells us that this £15 million is linked with the operation of special factors which have temporarily affected the pattern of savings gives us any confidence that this is a special pattern or that it is of a temporary nature. This makes it the less convincing.

One cannot help but wonder whether there are too many building societies in this country. After all, they fulfil a function which is analogous to the banks, and I have no doubt that we were very much better off a few years ago with the five main banks, and a few others, than we were at the beginning of the century.

One wonders, too, in view of the extent to which building societies and their functions are known, whether it is really necessary for them to have these prestige offices in every town. In consequence, one is bound to wonder whether the margin between the lending and borrowing rates is as low as it might be. One of the results is undoubtedly that many people now have commitments which they can meet only if inflation continues. So we have built into our society a number of people with a vested interest in that happening.