Mutual Societies (Transfers) Order 2009

I am grateful to both noble Lords for their response to the order. The noble Lord, Lord Howard, is right: the cardinal principle underpinning the order is that shareholder approval is needed for any such action. I do not have a date for the industrial and provident societies, but it is our intention to make progress on that provision. I shall write to the noble Lord the moment I have additional information on the timing of that. The noble Lord, Lord Razzall, asked what is urgent about this. I indicated that the Co-operative and Britannia referred to the order for their merger. He is as well—if not better—versed in economics and business affairs as I am. He will be all too well aware that in the current economic situation mutuals have inevitably been enhanced in the public’s perception as regards the safety of their deposits and their ability and eagerness to negotiate business with them. Therefore, anything we can do to strengthen the mutuals sector at this stage is clearly working with a grain of strong public opinion as to their virtues. We also recognise that in a globalised economy many mutuals can look desperately small. That is not necessarily a disadvantage because they can offer good service to the public. However, in a competitive marketplace the pressure will be for them to have the necessary resources to offer the extensive services they need to offer. Within that framework, therefore, the Government are introducing the order. We think that it is very much in the interests of the nation, on the decision of the shareholders in each case, to facilitate improvements in the sector where these are obviously desirable. What can one say about the general economic crisis without a diatribe that might last a good several hours and strain the resources of the Committee? I am sure that all noble Lords present would participate in that debate with great alacrity and enthusiasm, but it might not be too appropriate to this measure. However, the noble Lord will appreciate that when we use the phrase ““current economic circumstances””, we are careful about allowing more wholesale borrowing in the banking sector, given the recent events within it. The building society model has weathered this storm and enhanced its reputation. All well judged perspectives on the current economic situation would say that the mutuals are to be encouraged and facilitated, which this order does. Motion agreed.