I move recommendation No. 1:
In page 5, after line 35, to add the following subsection:
"(3) Income payable on the first £5,000 invested in registered building societies by any individual shall not be subject to the charge to income tax created by this section."
This recommendation was changed for the purpose of trying to cater for the views expressed by Members on the Government benches.
We have reached the stage—which, by giving figures I proved on Committee Stage to the satisfaction of all —where building societies no longer have the competitive edge in attracting funds. I should like to present some figures to the Minister. In dealing with investments not exceeding £5,000 to all building societies the total amount involved is £112 million invested in the societies, that is, investments from individuals not exceeding £5,000. The associated banks deposit accounts have £906 million on deposit; non-associated banks, such as the merchant and the industrial banks have £514 million on deposit. The total with building societies is £188 million. It is clear, therefore, that the attraction for investors has been directed towards associated banks and non-associated banks because the building societies have lost the competitive edge. When this happens people no longer invest; they go where the interest is greater. When the building societies have no money, they cannot accommodate would-be borrowers and, consequently, no houses will be built or if houses are built there are no customers for them. The effects of that are that the construction industry is moving into a disaster area and all the services depending on the construction industry will also be affected, the furniture manufacturers and the various other groups. Vast unemployment then occurs. I am sure nobody here would like to see a situation where the construction business would move into a disaster area. There might be a difference of views as to how this might be prevented. We believe that the surest way of prevention is to accept this recommendation.
In its original form I would have thought it more acceptable despite what has been said about the rich man. The views expressed by the Government side seem to be more concerned about the rich man rather than about the people who are dependent on building societies. It is not only the workers in the industry who will be affected but also those who are saving for a home of their own. Most people who avail of building societies belong to the middle-class group. I say "most". All the exceptions are on the other side. Included in that group are trade unionists, people employed in industries and in offices, all of whom would be dependent on building societies for loans. If no money is available no building will take place.
All the views expressed by the Government side seem concerned only with the rich man. As I stated on Committee Stage, I am not concerned about the rich man but I should like to see his money invested in this country rather than outside the country. If money is invested outside the country the benefits go to the banking institutions in the countries in which it is invested and to the individual himself. The £9 million made available to local authorities is not as good as it seemed at the time. The ceiling of £4,500 is a deterrent to many people in accepting the loan facilities. They might not have the balance of the money and might not be in a position to save the sum necessary for building or buying their own homes.
We make this recommendation in the hope that it will be accepted and because it meets the views expressed by members on the Government side. We see from the figures given that the building societies have lost their competitive edge. I believe that this is the only way we can prevent the construction industry from disaster. If this recommendation is accepted it will bring stability to the construction industry and all its ancillary services. If it is not accepted, it will lead to far-reaching problems. We are proposing what we believe to be the solution. If this is not accepted we will meet with disaster and the responsibility will lie with the Minister.