Mr. Weetchasked the Chancellor of the Exchequer (1) whether 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 advances to companies who are in arrears over delivering documents to the Registrar of Companies.
§ Mr. MooreNo. 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.
Mr. Weetchasked the Chancellor of the Exchequer whether he is satisfied with current monitoring procedures for investigating building societies; and whether recent monitoring has taken place in respect of the Britannia building society.
§ Mr. MooreManagement and staffing of the Registry of Friendly Societies, which is responsible for the prudential supervision of building societies, was reviewed earlier this year with the chief registrar. It was agreed that the registry would require an initial modest increase in senior staff, pariticularly in accountancy, in order to protect the interests of investors in building societies and other mutual financial institutions. At the same time it was agreed that there should be management studies of the178W registry's functions and activities, including its computer needs. The recruitment of additional staff for the registry and the management studies have begun. It would be contrary to the public interest to give information about the monitoring by the registry of particular societies except where the chief registrar has used his statutory powers to restrict the operations of a society, or following the appointment of inspectors.
Mr. Weetchasked the Chancellor of the Exchequer if he will now give full details of the advances to companies in which Bernard Clarke and Partners have an interest which make up the £502,000 balance which is outstanding to the Britannia building society.