Clause 2
Dormant Bank and Building Society Accounts Bill [Lords]
11:00 am
Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)
The matter under discussion was the subject of significant debate in the other place, and I happen to think that the balance of debate there was right. Building societies are in a particular position in our society and they differ from banks. We are talking about the money not only of customers, but of members of a building society. The society is a mutual and the money is its members’ money. I am conscious that members of building societies have made decisions about how building societies should operate. For example, at its last annual general meeting, members of Nationwide agreed to a commitment that 1 per cent. of its profits should be allocated to charitable purposes.
There is a strong belief in those organisations, which is one reason why there is so much support for mutuals throughout the House. The mutual nature of such organisations gives them different status; they see their mutuality as a distinctive selling point compared with other institutions. To carve out one group from the whole population says that there is almost a two-tier category of building society: those that are of sufficient size and thus will be dealt with on a different basis when it comes to dormant accounts and those that will be allowed to continue to use their members’ funds when there are dormant accounts to benefit the communities in which they are based. That creates an unhelpful distinction.
The hon. Member for Taunton asked whether the asset limit of £7 billion is right. From the Minister’s justification of the Bill, a better measure is the one that he used on the concentration of branches—to what extent does a building society serve a well-defined local community?