§ Mr. Arthur Lewisasked the Secretary of State for Trade whether, in view of the growing practice of company directors borrowing large sums of money from their companies either interest free or at low interest rates, and since this gives them an advantage over other taxpayers and is contrary to the spirit of the Government's social contract, he will seek to make 303W such practices illegal or to make these company directors pay the normal bank rate for all such moneys borrowed from their companies.
§ Mr. Clinton DavisThe Government agree that the provisions of Section 190 of the Companies Act 1948, governing loans to directors, need strengthening, and expect to put forward proposals later this year. The treatment for tax purposes of beneficial loan arrangements of the kind referred to in the Question will be substantially changed as a result of Section 66 of the Finance Act 1976.