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

My Lords, the Bill was introduced by my honourable friend Sir John Butterfill in another place, gained the support of the Government there—a rare accolade—and is now introduced in your Lordships’ House by my noble friend Lord Naseby. That makes a proposition so compelling that I need say little more than that the official position of these Benches is to offer 100 per cent support. My noble friend has introduced his Bill with admirable clarity and I have nothing to add to the substance of what he has said. I think I shall be a little unpopular with my noble friend because I have a confession: I have always been something of a sceptic about mutuals, because I have never believed that soft ownership structures exert sufficiently strong pressures on management to maximise economic performance. By ““soft economic structure”” I mean where ownership is widely dispersed and at the same time not associated with financial, economic or commercial skills. Perhaps that is a debate for another day. I should also stress that it is a personal view. I completely accept that financial mutuals help to offer greater consumer choice and are a firm part of our diverse and successful financial services industry. Since diversity and choice are a part of effective competition which should in turn deliver value for consumers, they have to be supported. As the party that believes in competition, we welcome measures that maintain the competitiveness of our financial services industry. I have two points that I hope the Minister might be able to assist on. I was interested to read the remarks of the Liberal Democrat spokesman in the other place, when he talked of the lack of information about the scale and impact of mutuals in financial services. We know the raw data—my noble friend has outlined the numbers today—but we do not know their market impact or their impact on competition. I rather agree with Mr Vince Cable that there appears to be an important gap in information. The Minister in another place said that he would seek to facilitate that analysis. What is the status of that work? The second point also arises out of proceedings in another place. The Bill was rewritten in Committee, effectively by the Treasury, and at that stage insurance mutuals were deliberately excluded because of issues that seemed to derive from European legislation—as of course do most of the problems in the UK. Do the Government intend to bring forward amendments to the Bill to deal with insurance mutuals? That was the impression left at the end of the proceedings in another place. If not, how will those aspects be dealt with, going forward? I am pleased to support my noble friend’s Bill.