Banks: Mutual Ownership Debate

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Banks: Mutual Ownership

Baroness Kramer Excerpts
Wednesday 2nd March 2011

(13 years, 9 months ago)

Lords Chamber
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Lord De Mauley Portrait Lord De Mauley
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I think I can perhaps go a little further in saying that the Government are implementing a number of legislative reforms that will allow financial mutuals greater flexibility to develop and expand, and so promote mutual ownership in financial services. These include such things as completing the passage through Parliament of the Legislative Reform (Industrial and Provident Societies and Credit Unions) Order, commencing the Co-operative and Community Benefit Societies and Credit Unions Act 2010, and bringing Northern Ireland credit unions under FSA regulation. As I have said, the Independent Commission on Banking will also consider competition in the banking sector and make recommendations on this as part of its report.

Baroness Kramer Portrait Baroness Kramer
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My Lords, the noble Lord will be aware of the excellent report in 2006 by the All-Party Parliamentary Group on Building Societies and Financial Mutuals that identified the beneficiaries of demutualisation as essentially the directors, who saw their remuneration go up. Among the biggest losers were those who live more to the financial margins, require basic bank accounts and are at risk of financial inclusion. Will he ask that when a future is considered for Northern Rock and others that this test of serving the financially excluded is part of the specification and that the work that mutuals do in this area is recognised?

Lord De Mauley Portrait Lord De Mauley
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My Lords, I will certainly take my noble friend’s comments back to the department.