Mortgage firms call for tax debt data

Councils should reveal details of council tax arrears to help mortgage companies vet applications, the head of the largest mortgage lender has said.

James Crosby, group chief executive of the Halifax Bank of Scotland Group (HBOS), said the finance industry wanted the government to force councils to reveal individual council tax debt.

Mortgage companies have been pressing for more personal finance data to be shared with them so they can find out if a person has debt they haven't revealed on their mortgage application form.

Mr Crosby said: "The industry is pressing the government to share council tax arrears. We could get a better result [on credit scoring] which is better for us and better for customers."

He argued that the banks would be better able to stop people getting into too much debt if they had the full picture. He also wanted student debt information to be disclosed to the banks.

But the plan will require changes to the law and councils don't expect that to happen in the near future.

A Local Government Association spokeswoman said: "The 1992 Local Government Finance Act only allows for council tax information to be used as it is intended.

"There is also data protection legislation to take into account," she said.

A spokeswoman for John Prescott's department, the Office of the Deputy Prime Minister, said: "The government is keen to promote the sharing of data where, for example, this aids council tax collection, reduces the chance of inappropriate loans being made, and is consistent with an individual's right to privacy.

"We will look at these proposals as part our wider work on the sharing of information between councils and other agencies."