asked the Minister for Local Government if his attention has been directed to the high rate of interest which certain building societies are charging to members of the working classes endeavouring to purchase their own homes; and if he has any plans for, or if he will arrange for the issuing of, low interest credit facilities to such members of the community.
Ceisteanna—Questions. Oral Answers. - Building Societies' Interest Charges.
8.
I have seen press comment on this matter. In regard to the interest rates charged by building societies, the Deputy has two questions on the subject today addressed to the Minister for Industry and Commerce.
The existing State and supplementary grants for private houses amount, where the housing authority pay the full grant, to up to £920 for small farmers and others in need of housing in rural areas, and up to £570 in urban areas, in addition, in a number of cases, to the new subsidy for developed sites. These grants are equivalent, at current interest rates, to a reduction in interest charges of about £74 a year and £46 a year respectively. The site subsidy, where applicable, would amount to an additional £12 a year. In addition, the purchaser will qualify for a rate remission and a reduction of stamp duty. In view of the scope and types of assistance at present available, I am not prepared to agree to the making available of a further subsidy, for the limited classes affected, on the lines suggested by the Deputy.
Is the Minister aware that there are thousands of people involved in this matter and that because of their inability to get low rates of interest through the Government machinery, they have to borrow, or buy money, if you like, through these societies? Surely that is a matter crying out for attention? Could the Minister not reconsider the matter?
The State is giving as much assistance in this respect as could reasonably be expected.
Does the Minister not agree that he has evaded the question? Does he not agree that a proper answer to this question would call for an indication as to whether his Government, even at this late stage, are prepared to supply money to borrowers at a reasonable or a low rate of interest for the purpose of building houses? That is the point. The Minister has clouded the issue by introducing the question of subsidisation. Surely the Minister will agree that the solution to this very vexed problem must entail, amongst other things, the provision by the Government to house-purchasers of money at a low rate of interest or what might be described as a low rate of interest in the context of present conditions? Is that not the answer?
If the Government supply loans at a rate of interest which is lower than that justified by the rate of interest they have to pay on money they raise, that is subsidisation and that is why I referred to the position with regard to subsidisation at present.
Will no effort be made to prevent building societies from increasing the rate of interest retrospectively?
As I said, Deputy Mullen has two questions down to the Minister for Industry and Commerce on the subject today.
Does the Minister stand over eight per cent as a reasonable rate of interest?
Does the Minister agree with that rate?
The Minister for Industry and Commerce will answer.
Having regard to the fact that the Minister is the Minister for Local Government, does he consider eight per cent a reasonable figure to charge for borrowing in this regard?
That is not relevant to the question on the paper.
Has the Minister no concern about this matter?
Question No. 9.