Financial Mutuals Arrangements Bill

I also congratulate the hon. Member for Bournemouth, West (Sir John Butterfill) on bringing forward the Bill. I was not aware that he had been so successful not only in getting private Member’s Bills on to the Floor of the House, but in piloting them to fruition, on which I also congratulate him. I congratulate him, too, on choosing this subject for his Bill, which is appropriate. As we see in the Chamber, it has a wide range of support across all sections of the House. I do not want to go into great detail about different parts of the mutual movement. Other Members have already done that. Mutuals compete in the marketplace, and many are successful in doing so: there are mutuals that are not successful, and they must take the necessary action to ensure that they become more successful. In many ways, however, the mutual movement, and certainly those parts that will be affected by the Bill, have been and are successful. We hope that the Bill will help them to become more successful. Mutuals thrive in the marketplace, but this is not the first Bill to reflect that they face some disadvantage. That disadvantage does not relate to how they compete in the marketplace, but to the legislative framework in which they must operate. In the limited time that I have been a Member of Parliament, significant new measures on company law and the framework for the private sector have been passed by the House, but little has been introduced to reflect the needs of the mutual sector, apart from some private Member’s Bills. I hope that, in some small measure, the Bill will begin to create a more level legislative playing field, so that the many successful mutuals can compete even more successfully than they have done up to now. My starting point is that we need a mixed economy, not only in financial services but in other sectors. A mixed economy brings real benefits to consumers. Worker co-operatives, mutual insurers and building societies confer many benefits not only on their members but on other stakeholders. The financial services sector of the mutual movement has perhaps been the most successful. As was pointed out by the hon. Member for Bournemouth, West, mutuals are successful not just in this country but internationally. Many mutual financial services organisations look to organisations such as the RABO bank in the Netherlands, which is one of the great success stories showing how mutuality can deliver for both customers and members. As many have pointed out today, mutuals also provide a competitive spark in the wider marketplace. For mortgages and mortgage rates as well as for savings rates, mutuals are at the top of the best-buy tables. That benefits not only their own members, but those in other organisations who must compete with the best—and when it comes to those basic services, mutuals and building societies are the best. The same applies to policyholders in mutual insurance companies. Organisations such as Royal Liver Assurance, Liverpool Victoria and Royal London are doing a tremendous job on behalf of both their members and the wider marketplace. If I had to single out one organisation, though, it would probably be the Nationwide building society, which goes from strength to strength. At this point I should declare an interest, as a former member of the Lambeth building society who has since become a member of the Portman building society and in the next few weeks will become a member of the Nationwide—of which, in fact, I am already a member. My reason for being a member of the Nationwide is the service that it delivers. It employs 16,500 people, mainly in Northampton and Swindon, and it has 1 million customers. Perhaps most important of all, over the last 10 years it has delivered £4 billion of benefits to its members and customers, an enviable record for any organisation, mutual or otherwise. But the Nationwide goes much further. It has campaigned on behalf of not just its own consumers and members, but the wider public interest. It conducted a campaign at some cost to itself, pointing out the dangers of taking up attractive short-term fixed-interest mortgages only to pay for them later, and trying to set a standard by which others—including those attempting to compete with it—should operate in the marketplace. It suffered significantly in the early stages of its campaign, but continued its pioneering work in the mortgage market.