I congratulate the hon. Member for Sunderland Central (Julie Elliott) on bringing her Bill to the House. I refer to my entry in the Register of Members’ Financial Interests as a practising solicitor and a partner in a firm of solicitors.
When MPs stand up and say “Everything in my speech has already been said,” it feels as if they are claiming the credit for things that they have not said. But having followed such outstanding speeches—especially from my hon. Friend the Member for Dover (Mrs Elphicke), who set out the technical case for why the Bill is needed—I will keep my remarks to what I would call the social and cultural case for building societies.
In a debate on another subject in this House, I have talked about the Gigg Lane football stadium in my constituency. What does that have to do with building societies? Well, Gigg Lane was bought by a person in a capitalist society, but it is an institution of cultural and social value to the area in which it sits. The question I posed to the Minister in that debate was whether we view sporting institutions in the same way we view a branch of Tesco or Sainsbury’s—great businesses though they are—or whether businesses and institutions that act within the financial market but have a great history and social contribution to make to their local area should be viewed somewhat differently. There is an argument to make about building societies in that respect.
This debate makes me nostalgic, because my university days were spent behind the counter at the Yorkshire Building Society in Huddersfield, where I worked for many years. My hon. Friend the Member for Dover spoke about being a board member of a building society; I know from my experience behind the counter talking to people that building societies are important as not only financial but social institutions. I used to see the same people coming in every day, or certainly every week. It was about company; it was about community; it was about family. That has been reflected in hon. Members’ remarks today.
The building society is an institution that has been in place since Ketley’s was founded in 1775, as the hon. Member for Sunderland Central noted. It is an institution that has changed to reflect society, but as politicians we must do everything we can to protect it. The Bill is fundamentally about fairness in the market in which building societies carry out their business. It is about allowing them not only to do the social good that they have done for 250 years, but to survive. We could have a huge debate about these issues.
The 1986 Act effectively allowed societies to demutualise and become fully fledged banks. We saw the and Abbey National do that. Speaking as a as a capitalist, it should be a good thing to have freedom of choice within the market—but is it? We have seen what has happened to the market since then, as my hon. Friend the Member for Dover ably set out. Has it benefited the banking sector? Has it benefited the country? Has it benefited the people who were members of those great institutions? Where I am from in Huddersfield, Halifax was a huge employer and a huge cultural institution, and sadly it has been somewhat diminished as a result of the actions taken and the opportunities that the 1986 Act gave it. This piece of legislation is addressing some of the problems that the previous Act put in place.
It is important to reflect briefly on the history of building societies, as the hon. Member for Sunderland Central ably did. They developed as a response to societal changes and, as has been said, they were a means to allow people with ambition, who wanted to own their own home, access to capital to do that. It was a positive; it was what I would call Disraelian conservatism. I am nowhere near as articulate as my hon. Friend the Member for Mid Norfolk (George Freeman) in this respect, but to me, Disraelian conservatism says that there are certain enduring institutions within society that Government and the state must do everything to protect. Those institutions can be viewed as the monarchy and all types of things, but I think building societies fall within that category. They do so much social good that we must be somewhat—and I hate using this word—protectionist to ensure that they are allowed to flourish. If we look at the development of societies and changes within our society, self-terminating building societies, which were terminated when all members had a house, were still going up until 1980, when the First Salisbury and District Perfect Thrift—now that is a great name for a building society—came to an end.
We have seen legislation on this subject. We saw the Building Societies Act 1874, which provided legislative backing to allow for the growth of societies, and by 1910 there were 1,723 societies in existence across the country. After that, building societies went into decline, but we saw another period of expansion in the ’60s and ’70s; the Building Societies Act 1962, which granted further powers to building societies, was the charger for that. We can see that legislative amendments provide building societies with the opportunity to develop their businesses, to thrive and to succeed in the market in which they sit.
I think we have 42 or 43 building societies left, and it is fundamental that we allow those building societies to thrive. We have talked at length about banking in rural areas, but I also have concerns about banking in somewhat urban areas such as mine and, I am sure, in other constituencies. In Ramsbottom, a great town within my constituency, there are no banks on the high street now. We have a banking hub, but I am afraid a banking hub does not provide the social benefit that a building society does. As a free-marketeer capitalist I am constantly looking at the profit of a Barclays Bank, or any bank, and at its social good. If an institution has a profit of £1.6 billion, which I think Barclays did for the last quarter of 2023, I wonder why there is not capacity within the system to maintain a branch presence in many towns throughout the country. Building societies, in their social and moral mission, are fundamental to our financial sector.
I do not intend to make further comments, because everything has been articulately set out, but we are blessed in this country to have institutions that have their origin in the mid-1700s and have developed and responded to social and political need. Let us bear in mind that building societies effectively increased the franchise, because the only people who could vote in the 1800s were people who owned a house. Those who were voting would not have been able to do so unless building societies had lent them the money, so they have had a huge impact in every way, shape and form. This amendment to the 1986 Act is about fairness, competition and benefiting first time buyers. It has much to recommend it and I thoroughly support it.
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