Building Societies (Funding) and Mutual Societies (Transfers) Bill

I echo the comments by Members on both sides of the House in congratulating the hon. Member for Bournemouth, West (Sir John Butterfill) on his achievement and saying how pleased and relieved we are to have reached this stage this morning. I echo especially the comments of my hon. Friend the Member for West Bromwich, West (Mr. Bailey), the chair of the all-party group, as the Bill has benefited from all-party support and co-operation in reaching this stage. The Bill’s amendments to building societies legislation regarding the wholesale funding limit and changes to the position of members in the event of insolvency, as well as amendments updating other mutuals legislation to make it easier for one type of mutual society to transfer to the ownership of a different type of mutual society as a subsidiary company, will strengthen the ability of building societies to compete in modern financial markets. They will make the playing field more level and continue to allow mutuals and building societies both to serve their communities—often their local communities—and in some cases to compete on the international, global stage, and to continue to innovate in doing so. Those are the characteristics that make mutuals work so effectively in our financial services arena. Following the comments of the hon. Member for Fareham (Mr. Hoban), my hon. Friend the Member for West Bromwich, West will know that the West Bromwich building society has built on the leadership that mutuals and friendly societies have shown on the child trust fund. The hon. Member for Twickenham (Dr. Cable) may be interested to know that the vast majority of child trust funds are being provided by mutuals, and I could provide him with the exact statistic if he so wished. The West Bromwich building society is now also delivering a sharia-compliant child trust fund to meet the needs of British Muslims, in my hon. Friend’s constituency and in the other constituencies that it serves. That is an example of a mutual innovating in the best interests of the whole community, but in a way that is particularly attuned to the needs of its local community. To allow that kind of innovation and local leadership to continue, the Government were very happy to support the Bill. As the hon. Member for Fareham and others said, the Bill would not have got to this stage without the leadership of the hon. Member for Bournemouth, West, who has a fine legislative pedigree in the House. We are confident that the Bill will be a fourth strike for him. Nor would the Bill have progressed without the support of his advisers, especially Mutuo, which has also been helpful in discussions with the Treasury. I also pay tribute to the Treasury officials who, with the hon. Member for Bournemouth, West, have gone into great detail to make the Bill work. After a thorough, wide-ranging Second Reading, the Bill went through a detailed and intensive Committee stage to ensure that its principles and intentions could be made to work within the complex and detailed technical arena of mutuals and co-operative legislation. I hope that the hon. Member for Bournemouth, West agrees that the amendments agreed in Committee deliver his intentions for the Bill. As the hon. Member for Fareham also pointed out, the changes also preserve the House’s ability to debate through the affirmative procedure details of the orders that the Bill enables the Treasury to introduce in due course. Those will follow further consultation on the details of raising the funding limit in particular, and on other changes. I will not go through all the details of the amendments introduced in Committee; suffice it to say that they were debated thoroughly in Committee, and consensus was reached on the right way forward. I will, however, deal with some points arising from this debate, and with a specific one that arises from discussions with the hon. Member for Bournemouth, West in Committee and subsequently. In an intervention, the hon. Member for Twickenham asked whether the legislation would apply to credit unions. As he surmised, the answer is no: credit unions are not within the scope of the Bill. Under the Credit Unions Act 1979, credit unions are forbidden to transfer into companies or have subsidiaries. We are separately reviewing the credit unions legislation, and formal consultation will follow an announcement of our intention to consult in the autumn. I have some concerns about the amendments on reporting that he might have introduced on Report, but did not do so, because regulation in the sector is for the Financial Services Authority, and an important part of the flow of information to the regulator is that which is commercially sensitive and cannot be revealed. However, on his broader point that it would be advantageous both to the sector and the House for a detailed statement to be laid before us on the position and role of mutuals, credit unions and building societies in our economy and society, I can see the advantages of bringing that data together in one place. As we prepare our consultation, I will consider whether we could try to co-ordinate the provision of that information. I will report back on that matter. The hon. Member for Cambridge (David Howarth) also made an intervention, which might better have been made in Committee, but that is by the by. The Liberal Democrats have attended for most of these debates, but have had a slight tendency to want to have the Second Reading in the Committee stage, and the Committee stage debate on Report and then on Third Reading. I hope that they are catching up—[Interruption.] I do not want to labour that point—