§ Mr. Roger KingTo ask the Secretary of State for Trade and Industry if he will consider making illegal the conditional selling of some building societies who offer special deals only if the endowment or pension plan is written with them.
§ Mr. RyderI have been asked to reply. Since January 1988 building societies have followed a code of practice which precludes them from making it a condition of an offer of a first mortgage advance that the borrower uses other services, required by the borrower in connection with the making of the advance, provided by the society. The Government agreed with societies in July 1986 that section 35 of the Building Societies Act 1986, which makes such linking of services an offence, would not be implemented if such a code was adopted. Neither section 35 nor the code seek to prevent cross-subsidy because there can be legitimate commercial reasons for it, and it may be to the advantage of the borrower.