Orders of the Day — Trustee Savings Banks Bill

Part of the debate – in the House of Commons at 12:00 am on 15 March 1978.

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Photo of Mr Denzil Davies Mr Denzil Davies , Llanelli 12:00, 15 March 1978

I shall try to deal with some of the issues that have been raised. The hon. Member for Horncastle (Mr. Tapsell) asked about mortgage lending and whether the trustee savings banks in general will move into this sphere. As I explained, this is now merely a problem which relates to the former Birmingham Municipal Bank. There are no plans at the moment for this to happen generally. The Treasury has power to designate trustee savings banks with the power to lend on mortgage. However, there is no present intention of doing that. The situation will develop over the years and the matter will be examined again.

The hon. Member for Horncastle said that this Treasury direction and the powers of borrowing should be in the legislation. On reflection, I am sure that he will appreciate that the powers necessary to supervise any bank should not be laid down in detail in legislation because circumstances can change rapidly. The supervisory authority—be it the Treasury, or the Bank of England in relation to other banks—has to have a certain flexibility. It is not practicable to enshrine that detailed supervision in legislation.

The hon. Member asked when the tax concession would be withdrawn. I understand that it must be withdrawn by the Finance Act 1979 at the latest and that it will be withdrawn in that legislation.

The hon. Member for Norfolk, South-West (Mr. Hawkins) seemed to mourn the fact that the tax concession is to be taken away from ordinary accounts. If it were not taken away the joint stock bank fraternity would complain, because if trustee savings banks are to become the third force in banking, as the Page Report recommended, they should compete on a more or less equal basis with the other banking forces.