§ Mr. Shersbyasked the Chancellor of the Exchequer (1) what representations he has received in connection with the publication of the Green Paper, "Building Societies: A New Framework", concerning the practice of certain building societies of making advances out of their funds for purposes not connected with house purchase or home improvement; and if he will make it his policy to include in his proposed new legislation a code of practice to ensure fair competition for any extension of building society powers;
(2) what representations he has received in connection with the publication of the Green Paper, "Building Societies: A New Framework", concerning the evidence that building societies obtain from borrowers that loans made by means of a second charge are for home improvement or purposes reasonably incidental to it; and if he will make it his policy to ensure that his proposed new legislation will include a requirement for societies to satisfy the Inland Revenue that loans qualifying for tax relief under MIRAS are for mortgages of freehold or leasehold estate and home improvement purposes only.
§ Mr. Ian StewartI have received a number of representations about building societies lending for purposes other than house purchase or improvement. The Government have announced that they intend to bring the treatment of lending institutions under the Consumer Credit Act into line, but a final decision on how best to achieve this has not yet been taken.
There have also been some representations on the evidence societies obtain on the purpose of loans. Loans are eligible for tax relief under MIRAS only if made for purchase or improvement of the main residence of the borrower (or his divorced or separated spouse or dependent relative or if they are made to a person over 65 for the purchase of a life annuity secured on his main residence). The borrower is already required under existing law to certify that his loan meets the conditions for tax relief.