§ Mr. Weetch
asked the Chancellor of the Exchequer (1) if he will introduce legislation to prevent building societies making special advances to companies whose accounts are in default;
(2) if he will introduce legislation to prevent building societies making special advances to companies which are in arrears over delivering documents to the Registrar of Companies.
§ Mr. Bruce-Gardyne
No. It is the duty of the directors and management of a building society when considering whether to make an advance to a company not only to consider the adequacy of the security for the advance but to make an appraisal of the prospects of the company, including its management, in relation to its ability to service and repay the loan. One element of this appraisal, amongst many others, will be whether statutory documents are properly filed at the companies registration office. But it would be wrong to single out this one factor for the purposes of a statutory prohibition on lending; the more so when other competitive lenders are not subject to that prohibition.