Financial Services Bill

Jonathan Evans Excerpts

Tuesday 22nd May 2012 Commons Chamber

[Mark Durkan]

The information may well be measured by that group of building societies. In terms of industrial and provident societies and others, surely it makes sense that the Treasury will want to make provision on who measures the different sectors or who measures them in aggregate terms as the mutual sector—this amendment would allow that. We must remember that, as the hon. Gentleman says, the amendment is entirely permissive, and it would be set in a clause that is permissive. The clause is meant to demonstrate the coalition’s commitment to mutuals.

[Jonathan Evans (Cardiff North) (Con)]

May I apologise for the fact that I missed the beginning of this debate? The hon. Member for Nottingham East (Chris Leslie) spoke for the Opposition, and he knows that I chaired the mutuals inquiry to which he refers. Is the problem not the one outlined by the hon. Member for Edmonton (Mr Love): the amendment is modest? I do not think our inquiry was seeking that modest a response from the Government. We are looking for something that matches up to the commitment made in the coalition agreement, and what is being proposed is very much short of that.

[Mark Durkan]

I thank the hon. Gentleman for that intervention, as it shows exactly why people should be worried. If the best argument that Government Members can make is that this amendment is modest and merely permissive, people should be worried that the Government are opposing and rejecting such a straightforward, common-sense amendment.

--- Later in debate ---

[Mr Hoban]

It depends on risk management and the business model that mutuals follow. There is a different set of constraints around building societies, which helps to ensure their stability, but that does not mean that they are immune from some of the mistakes that have caused failure in the past.

The clear intention of the Bill—we discussed this at length in Committee—is to ensure that regulation does not discriminate against mutuality, or indeed any other type of ownership, simply because it diverges from the norm of public or private ownership. I believe that the Bill delivers that result. For example, in clause 22, new section 138K requires the Prudential Regulatory Authority and Financial Conduct Authority to analyse the impact of the proposed rules on mutual societies. This will help to build up a base of impartial evidence to allow the regulators to continue to assess whether mutuals are being treated appropriately within the regulatory system. It is important that regulators think through very carefully the impact that their rules will have, particularly on mutuals.

[Jonathan Evans]

My hon. Friend will recall coming to our all-party group on insurance and financial services, when we asked him some questions on these issues. In fact, the regulator thinks that the Financial Services Authority has changed its processes in order to recognise the specific position of mutuals. What it is that the Government have changed, other than their even-handed approach?