§ Mr. Weetchasked the Chancellor of the Exchequer whether he will introduce legislation to empower the Chief Registrar of Friendly Societies to refuse to approve proposals for building society rules which are not in the interests of members.
§ Mr. Bruce-GardyneUnder the provisions of the Building Societies Act 1962 the content of the rules of a building society is, subject to their containing specified particulars, a matter for the decision of the members themselves. In the case of the original rules of a new society, this is by agreement of the founder members; in the case of alteration of the rules of an existing society, this is by special resolution of the members in general meeting. In either case the central office of the Registry of Friendly Societies is obliged, whether under section 2 of section 17(3) of the 1962 Act, to register the rules, or an amendment to the rules, of a building society if satisfied that they are in conformity with the Act.
The approval of rules by the members themselves is fundamental to the democratic control of a society and it would be inappropriate to give the Chief Registrar the power to override members' wishes, when they were in conformity with the law, under the present constitution of building societies. Nevertheless, the question whether any change is needed in the existing constitution of building societies will be one of the principal matters to be considered on the next occasion when building society legislation of a general nature is introduced.
§ Mr. Weetchasked the Chancellor of the Exchequer whether, in order to assist members of building societies to monitor the activities of directors of their societies, he will amend the form AR11 (Annual Return) to include company names as well as register numbers.
§ Mr. Bruce-GardyneI refer the hon. Member to my written answer to his earlier question on this matter on 26 November 1981.—[Vol. 13, c. 427.]
§ Mr. Weetchasked the Chancellor of the Exchequer whether, since 1975, the Chief Registrar of Friendly Societies has identified cases where directors of building societies have not declared an interest in accordance with section 89(2) of the Building Societies Act 1962.
§ Mr. Jock Bruce-GardyneThe duties of building society auditors in this regard are set out in section 89(4), and it is from their reports that information enabling the Chief Registrar and society members to identify any such omission is most likely to have arisen. No statistical records are maintained on the incidence of qualified audit reports but so far as can be ascertained from information readily available no instances of auditors' reports qualified in this respect have arisen since 1975.
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§ Mr. Weetchasked the Chancellor of the Exchquer whether any restrictions are placed on the purposes for which the categories of property on which building societies may provide advances.
§ Mr. Bruce-GardyneProvided that building societies lend on adequate security by way of mortgage of freehold or leasehold estate, no statutory restrictions are placed on the purposes for which, or the categories of property on which, they may lend. The matter is, however, indirectly by the "special advance" provisions in sections 21 to 24 of the Building Societies Act 1962, by which societies are limited in the advances they may make to bodies corporate, and advances of an amount exceeding a prescribed sum to individuals.
§ Mr. Weetchasked the Chancellor of the Exchequer what total amounts have been advanced by building societies over the last convenient 12-month period in respect of which categories of property for which such information is available.
§ Mr. Bruce-GardyneI draw the hon. Member's attention to the report of the Chief Registrar of Friendly Societies to Parliament for 1980. An analysis of amounts advanced on mortgage in 1980 by building societies with assets exceeding £2 million in respect of different categories of property is given in table 6 on page 46 of the report.
§ Mr. Weetchasked the Chancellor of the Exchequer what consultation takes place, and whether his approval is sought, before model rules are issued by the Building Association.
§ Mr. Bruce-GardyneThe Building Societies Association is not obliged to seek of obtain formal approval by the Chancellor of the Exchequer or the Registry of Friendly Societies but the association invariably does seek, and has regard to, the registry's views on proposed provisions in model rules issued by the association.