Financial Mutuals Arrangements Bill

I congratulate the hon. Member for Bournemouth, West (Sir John Butterfill) on securing the debate and on his well-crafted Bill. Speaking as a new Member, elected only in 2005, I often come to the Chamber to watch and learn. We can see the advantages of a well-crafted Bill that does what it needs to do without pushing the boundaries so much that it makes it difficult to legislate on a complex issue. I therefore congratulate the hon. Gentleman and hope that, one day, I might reach his record for private Members’ Bills, as so far I have not been lucky in the ballot. I am proud to stand here today as a Labour and Co-operative MP—one of many in one of the largest groups in Parliament. The fact that the Bill has cross-party support and the fact that the all-party group is one of the largest shows how mutual endeavour and co-operative values transcend party politics. They genuinely benefit the consumer, and it is important that we MPs recognise that. As I said in my intervention on the hon. Member for Bournemouth, West, it seems sensible to allow the Financial Services Authority flexibility over the percentage of funds that can be raised from the markets. I am sure that the issue will be explored in greater detail in Committee, and I understand that discussions are being held about whether the percentage should be set at 75 per cent. It is sensible not to put a figure on the face of the Bill, because this relates to market sensitivity. The FSA, in its role as protector of the consumer, should make such decisions. Clearly, it would require Treasury support, but I hope that the Economic Secretary to the Treasury agrees that it would be inappropriate for the Treasury to be too heavy-handed or to go into too much detail, and that it should leave the FSA to do its work. The Treasury should then rubber-stamp the FSA’s decision. The provisions in the Bill that put members on an equal footing are critical. If we really believe in mutuals and in the co-operative sector, we must also believe in the members of those mutuals. This measure is long overdue, and it should be introduced as quickly as possible. It is also common sense to make it easier for a financial mutual to transfer to another mutual outside the financial sector. I appreciate that there are problems with that measure, but I hope that they can be resolved. I have experience in the housing association sector. Over the years, housing associations have grown and developed, and many have taken on other responsibilities. At first, they used to renovate street properties and, when they got the money to do so in the 1970s, build a small amount of housing. They then expanded to provide care packages, care homes, regeneration packages and building services. Sometimes, they also provided private housing for sale to cross-subsidise their other work. The housing association sector and, in particular, the National Housing Federation have done a great deal over the years to ensure that all those different interests can co-exist within one group structure. Some have merged and come together under one umbrella, while others have diversified from their original base under one umbrella. That has allowed multiple businesses to exist within one organisation. The governance of the housing association sector has developed to tackle the challenges of the modern world, and I hope that lessons can be learned from that and applied to the issue of the transfer of engagements, so that multiple co-operative and mutual businesses can co-exist under one umbrella. It is appropriate that my hon. Friend the Economic Secretary is going to respond to the debate. He is the first Co-operative Treasury Minister to deal with legislation on the financial mutual sector, and we are delighted to have him as a member of our Co-operative group in Parliament. I hope that augurs well for the passage of the Bill. We shall certainly have some interesting discussions in our private meetings if he proves unwilling to support certain aspects of it. I feel confident, however, that he and his colleagues in the Treasury will give the Bill a fair wind, because it tidies up aspects of the Building Societies Act that need tidying up, and puts members at the heart of the business. I should like to use this opportunity to talk about the history of the co-operative and mutual sector, in which the Bill represents a staging post. The sector is made up of a complex and diverse range of organisations, but they have one common feature: they belong to their members. They do not belong to shareholders and they are not owned by an individual or a few individuals. They are a group of organisations with a long history of providing mutual self-help and of strengthening community bonds. Throughout our history, the mutual sector has not only acted to provide services on which working people relied, but strengthened the bonds that are so important in the communities that we represent. The earliest mutuals were societies or self-help organisations that provided a means of mutual insurance through regular member contributions. Members of these friendly societies were bonded to each other, perhaps by locality or trade, and their regular contributions ensured benefits for them and their families in the event of sickness or death. Happily, the days are long gone when we had only each other to rely on. Now, we have a welfare state that protects people at difficult times, but in the early days of the mutual sector, the friendly societies were vital for preserving family life and people’s actual lives.