§ 4.47 p.m.
§ Viscount St. Davids rose to move that the draft order laid before the House on 19th May be approved [1st Report from the Joint Committee].
§ The noble Viscount said: My Lords, the order is made under Section 14 of the Building Societies Act 1986. That enables the Treasury to designate countries or territories outside the United Kingdom where building societies may lend on mortgages. The order designates the other member states of the European Community.
§ The second banking co-ordination directive provides a passport which enables credit institutions authorised in any member state to extend their businesses to other Community countries without the need for further authorisation in the host country. The order does not implement the directive but it helps to allow building societies to compete on equal terms throughout the Community.
§ Societies can already carry on most of their business either directly or through subsidiaries throughout the European Community. The 1986 Act allows them to make deposits anywhere in the world and to form mortgage lending subsidiaries in other Community countries. A series of orders made by the Building Societies Commission, which came into force on 1st June, enabled them to offer banking and other financial services throughout the Community. This order completes the series by enabling societies to undertake mortgage lending directly rather than through subsidiaries. I beg to move.
§ Moved, That the draft order laid before the House on 19th May be approved. [1st Report from the Joint Committee].—(Viscount St. Davids.)
§ Lord Peston
My Lords, I thank the Minister for introducing the order and ask him to clarify one issue. The order applies to individuals—the borrowers—and to the assets—the residential properties—which are 573 the security. I assume that it is being extended to other countries in respect of both individuals and the land used for residential purposes which would be the security against the loan. In other words, the order moves in two directions; that is in respect of individuals and the residential land used as security.