asked the Chancellor of the Exchequer if he has any plans to permit derogation from the prohibition on building societies making interest-only loans.
The Building Societies Act gives those societies which have total commercial assets of over £100 million the power to lend money to individuals regardless of whether interest is charged on the loan.
Is the Minister aware that building societies believe that that helpful facility, which enables elderly people to liberate the capital in their own homes to make necessary repairs, has not been stopped by the Building Societies Act? Am I right in believing that that was never the Government's intention, and will the Minister make it clear that the facility is still widely available?
Certainly the Building Societies Act does not stop building societies from making such loans. In fact, some societies have shown reluctance to conform with the requirements of the Consumer Credit Act 1974, but other lenders are coping without difficulty. I hope that building societies will not mislead borrowers of the kind that the hon. Gentleman describes by implying that such loans cannot be made.