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Building Societies Association

Volume 977: debated on Wednesday 30 January 1980

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asked the Secretary of State for the Environment when he expects to meet the chairman of the Building Societies Association.

I refer my hon. Friend to my reply earlier today to the hon. Member for Swindon (Mr. Stoddart) and to my hon. Friend the Member for Kingswood (Mr. Aspinwall).

When my right hon. Friend meets the chairman of the Building Societies Association will he convey to him my constituents'gratitude—and no doubt that of many others—for the flexible and compassionate way in which the member societies have dealt with applications in cases of hardship that have been brought about by the increase in mortgage interest rates? We inherited that situation. Is he aware that we are grateful for the fact that the building societies have dealt with that problem by freezing capital payments and allowing interest-only payments until our economy is under control?

:The BSA has acted with the utmost responsibility and care. It has done so under various Governments. The BSA is there to help purchasers and to protect the savings of those who invest in them. I do not believe that anyone would do anything but pay tribute to it.

When my right hon. Friend next meets the chairman of the BSA will he draw attention to the recent pamphlet issued by the Bow Group? It is there suggested that building societies should become limited companies, responsible to market forces and to shareholders. Might not that be better than persisting with the present situation in which a cartel in interest rates is operated? That cartel is not to the advantage of lenders or borrowers. Does my right hon. Friend agree that it makes building societies peculiarly susceptible to the advice, and sometimes even the threats, of any Government?

My hon. Friend will be aware that the building societies have produced their own interim report concerning the provision of finance for the building society movement. I also have asked for a report to be made available to me. Many issues are raised. My hon. Friend has mentioned one publication that has also widened the debate. I do not accept that it works quite as my hon. Friend has said. I intend to ensure that there is a wide debate in the light of all the reports that have recently come to public attention or that will shortly do so.