'. — (1) The appropriate authority may, with a view to conferring on building societies or building societies of particular descriptions powers to make advances to members secured on land outside the United Kingdom corresponding to the powers to make advances secured on land within the United Kingdom, by order—
(2) Any powers conferred on building societies under this section may be conferred on building societies of a specified description or all building societies other than those of a specified description.
(3) Where, by virtue of an order under subsection (1) above, advances are made by a building society on the security of land outside the United Kingdom, the aggregate amount of mortgage debts outstanding in respect of such of those advances as are class 2 advances under the order shall count in accordance with section 18 towards the limit applicable to class 2 assets under that section.
(4) Subsection (3) above is subject to any provision contained in the order.
(5) The "appropriate authority" for making an order under subsection (1) above is—
(6) The power to make an order under subsection (1) above is exercisable by statutory instrument and, as regards the procedure applicable to such an order,—
(7) In this section—
"relevant British overseas territories" means the Channel Islands, the Isle of Man and Gibraltar;
"security on land" includes any right or power in or over land to secure the payment of a debt and "secured on land" has a corresponding meaning;
"specified" means specified in an order under subsection (1) above;
and any reference to a provision of this Part is a reference to that provision as applied to advances under this section. — [Sir George Young.]
Brought up, and read the First time.
I beg to move, That the clause be read a Second time.
With this it will be convenient to take the following: Government new clause 7 — Qualifying asset holding for certain powers.Government new clause 23—Loans for mobile homes (No. 2). Government amendments Nos. 6, 56, 58 to 60, 62 to 64, 240, 243 and 246.
In fairness to the amendments that we have just dealt with, I said not that they were "totally unexciting", but that they were "relatively unexciting". The totally unexciting amendments will be dealt with in a moment.New clause 6 honours a commitment that my hon. Friend gave in Committee. New clauses 7 and 23 deal with mobile homes. The Government believe that it is important to provide more help for the mobile home sector. These days, mobile homes are a far cry from the caravans whose image they share. Mobile homes are prefabricated units built to a high specification conforming to BSI requirements and they have a life of at least 25 years. The fittings are of a high quality and all main services are laid on. They are mobile in the sense that they can be dismantled and moved to a new site. It is appropriate that building societies should be given greater powers to lend on security of a mobile home than other class 2 lending powers. After considering the position, the Government have decided to make an exception on mobile homes to the £5,000 limit on class 3 loans to individuals. Societies with a qualifying assets holding will be able to lend up to £10,000 on the security of a mobile home.
I should like to introduce my brief remarks by declaring an interest. I have the honour and privilege to he a vice-president of the Building Societies Association.I support the remarks made by my hon. Friend the Under-Secretary of State for the Environment. I am sure that one way in which building societies can help is to lend money at realistic and responsible rates of interest to people who want to exercise their right to buy but who, through dint of circumstance, are unable to do so through normal and traditional methods. The only way these people can achieve that is to acquire a mobile home. My hon. Friend the Under-Secretary of State introduced legislation which brought security of tenure to those who had previously found that, although they owned a home, they did not own the land on which their home was situated. The Government have secured for them the right to ownership through the Mobile Homes Act 1983. Building societies have a responsibility to ensure that these vulnerable people who own and occupy mobile homes on mobile parks are protected. Hon. Members on both sides of the House who have mobile home parks in their constituencies know that these people do not consider themselves as owner-occupiers or council tenants in the first place. They consider themselves to be home owners in the last resort. Such people could fall prey to consumer credit organisations which charge rates of interest far in excess of those charged by responsible and prudent building societies. I commend the new clause. I issue a challenge to building societies to allocate significant funds to extend to a large section of the mobile home community the opportunity to exercise the right to buy and the right to home ownership.
I declare an interest as the parliamentary adviser to the Midshires Building Society.New clause 6, when exercised, will give building societies the power to lend on property overseas. Does my hon. Friend the Under-Secretary of State intend to ensure that building societies will be given early powers to lend on land in Great Britain, for example, in the Channel Islands and on the Isle of Man? It is an anomaly that building societies are not able to lend on the security of land in these islands. Other financial institutions in the United Kingdom with which building societies compete—the banks and the trustee savings banks, for which my hon. Friend the Economic Secretary to the Treasury has responsibility—are able to do business on the Isle of Man and in the Channel Islands. Will my hon. Friend the Economic Secretary ensure that building societies are given powers to carry out business in those territories, even though the House understands that there are many overseas territories in which he would not wish to authorise building societies to act as that might be detrimental to the interests of lenders?
I do not wish to anticipate what the Minister might say, but I believe that the points that have been raised in relation to the Channel Islands and Gibraltar have been dealt with satisfactorily by the Government in other new clauses.I also declare an interest, although this is not a financial interest. I am also a vice-president of the Building Societies Association for which I am not paid. That is a great honour. The hon. Member for Mid-Staffordshire (Mr. Heddle) raised the important matter of mobile homes. Increasing numbers of people live in very satisfactory accommodation in mobile homes. There is no reason why building societies should not advance money on a mobile home provided that it is a permanent home on a mobile home site and not a touring caravan or something of the kind that we have read about recently in the newspapers. This is particularly important because nowadays one marriage in three ends in separation or divorce, resulting in great economic difficulties. It is all very well in Hollywood or on the screen among very rich families, but most ordinary families in this country cannot afford divorce and the cost of supporting an ex-wife as well as a current one. Often the husband or the wife—usually the husband—gives or is forced to give the matrimonial home to the spouse and family and would himself be homeless if he could not occupy a mobile home. It is extremely sensible to provide that building societies may lend on mobile homes, and the Building Societies Association entirely agrees with what the Government are doing, but the association has just one query about the wording of the new clause. It seems not to deal with joint loans in relation to mobile homes. The association believes that the Bill should provide that a joint loan to two or more persons should be treated as though it were a loan to one of those persons for the purposes of the relevant limits. As this will not be a class 1 loan, the overall limit for class 2 or class 3 loans could be affected. Perhaps the Government could make it clear susequently, either here or in another place, that a joint loan will be treated as one loan.
We are going through the Bill at exhilarating speed, but the Government's luck cannot last. Nevertheless, the Opposition support the new clauses and the amendments.It was pointed out in Committee that it made more sense for building societies to lend directly overseas rather than through a clutter of subsidiaries, but one or two questions arise in relation to the new clause. I appreciate the distinction between the negative resolution procedure in relation to designated British overseas territories and the affirmative resolution procedure in relation to other overseas territories. These presumably correspond to the possible degrees of risk on categories of secured investments, the firmer security of the affirmative procedure being required as a check by the House. Subsection (5)(a) of new clause 6 provides for the commission to act with the consent of the Treasury, but under subsection (5)(b) the Treasury will act on its own. Perhaps the Minister will explain why in one case the Treasury will advise the commission whereas in the other the Treasury will act alone. In new clause 7 it makes a great deal of sense to separate the two principles originally contained within the framework of clause 14. By and large, all these provisions make a great deal of sense, and the provisions with regard to mobile homes are to be welcomed. I shall therefore say no more on that subject as I am most encouraged by all that has been said already.
A number of points have been raised in this short debate. I can assure my hon. Friend the Member for Ludlow (Mr. Cockeram) that it is indeed our intention to lay orders at an early stage providing the relevant powers in relation to relevant overseas territories.The right hon. Member for Halton (Mr. Oakes) made a fair point about joint loans. The Government will look again at the point and if we are convinced of the logic of the case we shall take appropriate steps in another place. With regard to new clause 6, the Government agreed in Committee to consider an order-making power to allow societies to act directly overseas rather than through subsidiaries, thus allowing flexibility to reconsider arrangements for overseas operations if circumstances—for example, in the EEC—should change. Although the provisions in the Bill already go beyond what is available in most other states and are entirely consistent with our treaty obligations and with the draft directive, the Government have looked at the matter again and in the interests of flexibility we have decided to include an order-making power for direct operations. On the rather technical question about the Treasury acting on its own volition or giving advice, I should like to reflect on what the right hon. Gentleman has said and write to him or see that his representative in another place gives him the answer.
Question put and agreed to.
Clause read a Second time, and added to the Bill.