§ 3.14 p.m.
§ Lord Strathclyde rose to move, That the draft order laid before the House on 22nd March be approved [14th Report from the Joint Committee].
§ The noble Lord said: My Lords, the order before the House is quite technical.
§ Building societies have a general power to provide money transmission services, in the course of which the account of a customer may from time to time become overdrawn. Although building societies have power to provide overdraft facilities to individuals, they have no equivalent power to provide overdrafts to companies, and this has prevented them from competing fully for this service.
§ Allowing this service to be provided to companies may also help societies to meet the volume criteria required for membership of the clearing systems. I should point out that it has the full support of the Building Societies Association.
§ This order will not allow continuing unsecured lending by a building society to a company in the form of a permanent overdraft. The Government believe that societies should continue to be limited to making unsecured loans only to individuals. The order does not represent a departure from that policy. I commend the order to the House. I beg to move.
§ Moved, That the draft order laid before the House on 22nd March be approved [14th Report from the Joint Committee].— (Lord Strathclyde.)
Lord Bruce of DoningtonMy Lords, we on this side of the House rarely find ourselves in any kind of accord with policies emanating from Her Majesty's Treasury, nor, for that matter, from Her Majesty's Department of Trade and Industry. So it is rather a unique occasion for us to be able to give our general support to a comparatively minor matter of this kind. I trust that the noble Lord will not take our assent to the order as reflecting any degree of softening in our implacable resistance to most of the policies that emanate from the Government in the financial and monetary field, but we do not see any particular harm in this measure.
There is just one small question that I must ask the noble Lord before giving the House our formal expression of approval. Why is there a limit in paragraph 7(c) of the order, which deals with Class 3 asset limits? It states:
where a facility account holder holds other accounts with the society, the value of any shares or deposits in those other accounts shall not be taken into account".I can understand why shares should not be taken into account, but what is the reason for not permitting offset of any other balances before arriving at the conclusion?1051 A similar observation applies to paragraph 6(b). Once again, one can understand that shares should not be taken into account, but why is there no offset in respect of deposits? I am quite sure that the noble Lord has the answers at his fingertips. If he could answer that small point, for our part we are happy to facilitate the order.
§ Lord StrathclydeMy Lords, I am extremely grateful for the general welcome that the noble Lord, Lord Bruce of Donington, has given to the order. However, I must also say that I know that his implacable resistance to the Government's policy towards financial matters will remain totally undiminished.
The noble Lord asked a specific question about the order concerning Class 3 asset limits. Perhaps I may briefly explain what I mean by class assets. Class 1 assets are advances secured on residential land, Class 2 assets are generally advances secured on other land and Class 3 assets are generally other loans, residential land itself and interests in bodies corporate. We have included deposits because a deposit is just as much a debt in itself as a share account. If the noble Lord requires any further clarification, perhaps I may write to him.
§ On Question, Motion agreed to.
§ House adjourned at nineteen minutes past three o'clock.