HC Deb 20 October 1992 vol 212 c243W
Mr. Burns

To ask the Chancellor of the Exchequer what measures he proposes to take to assist borrowers with negative equity who wish to move house.

Mr. Nelson

The Government propose to remove two potential legal and tax obstacles to borrowers with negative equity who wish to move.

First, the Building Societies Commission, with the consent of the Treasury, is to raise the limit which building societies can lend unsecured from £10,000 to £25,000 per person. This will enable societies, in appropriate cases, to advance top-up necessary loans to borrowers with substantial negative equity. The necessary secondary legislation will be laid before the House at the earliest opportunity.

Secondly, changes are proposed to allow the security of one property to be exchanged for another against the original mortgage loan, without the loss of mortgage interest relief. The Inland Revenue hopes to give effect to the proposed changes within the next few weeks.

Preliminary Draft Budget1 Draft Budget
mecu £ million2 mecu £ million
Commitment appropriations
1. Agricultural Guarantee 34,062 26,820 34,042 26,805
2. Structural Operations 22,046 17,359 20,119 15,842
3. Internal policies, including R & D 4,440 3,496 3,375 2,657
4. External Policies, including aid 4,150 3,267 3,818 3,006
5. Administration 3,577 2,816 3,349 2,637
6. Monetary Reserve 1,000 787 1,000 787
Total: Commitment appropriations 69,274 54,456 65,704 51,735
of which:
compulsory 36,505 28,744 36,459 28,708
non-compulsory 32,769 25,802 29,245 23,028
Total: Payment appropriations 66,309 52,212 62,926 49,548
of which:
compulsory 36,458 28,707 36,406 28,666
non-compulsory 29,851 23,505 26,520 20,882
1 including letter of amendment No. 1 to the PDB for 1993.
2 Throughout this reply the rate of £1 = 1.2700 ecu has been used for conversions relating to 1993 expenditure (the rate notified in the Official Journal as prevailing on the last working day of last month (30 September)). The rate of £1= 1.396 ecu has been used for 1992 expenditure (the rate set for United Kingdom contributions from VAT and the Fourth Resource in 1992).

The Budget Council also adopted the supplementary and amending budget No. 3 for 1992. An explanatory memorandum was submitted to the House on 14 September. This supplementary budget gives budgetary effect to the decision to revise the financial perspective on which an explanatory memorandum was submitted on 9 July. It covers increased payment appropriations for the structural funds in the new German Länder and four programmes under the third research framework