Lord Borrie
Main Page: Lord Borrie (Labour - Life peer)
Lord Borrie
To ask Her Majesty’s Government whether they envisage the sale of banks in which they have a stake being accompanied by the revival of mutual ownership.
Lord De Mauley
My Lords, UKFI, which manages the Government’s investments and financial institutions is responsible for devising appropriate exit strategies. Its mandate requires it to act in a way that protects and creates value for money for the taxpayer and pays due regard to financial stability and competition considerations. It is currently exploring the options available for disposing of Northern Rock plc. All exit strategies will be considered, including remutualisation.
Lord Borrie
I am grateful to the Minister for his moderately helpful Answer, especially the reference to the activities of UKFI. Does he agree that traditionally and well deservedly mutuals have had a very high reputation among customers generally for satisfaction with their activities, that mutuals have engaged less than banks in speculative and risky activities, and that certainly they have provided a great deal of competition and diversification over the years? In this new set up today, when there will be some sales of existing state-owned parts of banks, will the Minister ensure that the mutuals get a great deal of understanding in this regard? Perhaps the Government could initiate a feasibility study through UKFI, which would be most helpful.
Lord De Mauley
Yes, my Lords, I think I can agree with the noble Lord. The important thing is the stability of our financial system. The Government are committed to fostering diversity in financial services, including, where appropriate, mutual ownership, and to creating a more competitive banking industry. That is why we have set up the Independent Commission on Banking: to recommend reforms to the banking system that meet those objectives, including promoting financial stability and consumer choice.