§ 22. Mr. Walter Johnson
asked the Chancellor of the Exchequer if he will make it a condition of any loans to the building societies that they apply the whole of the loan to the assistance of house purchasers.
§ Mr. Johnson
Is my right hon. Friend aware that it is reliably reported that by reinvestment the building societies are making a profit each month of £150,000 from the Government's loans which were made for the purpose of keeping down interest rates? Is not that a gross misuse of public funds? What will right hon. Friend do about it?
§ Mr. Dell
My hon. Friend should remember that the building societies have to hold some of their funds in authorised liquid assets and that their yield reflects short-term market conditions. He should also remember that the societies are nonprofit-making and that ultimately all their receipts will go to increase the societies' capacity to lend to house purchasers. As I said in my original answer, we are confident that the loans that have been offered will result in a higher level of mortgage commitments and advances than would otherwise have been the case.