Clause 52 - Power to direct transfer of building society’s business

Part of Financial Services Bill – in a Public Bill Committee at 5:40 pm on 20th March 2012.

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Photo of Chris Leslie Chris Leslie Shadow Minister (Treasury) 5:40 pm, 20th March 2012

In discussing that question, we must understand whether the provisions that govern the transfer of business—perhaps of a mutual in distress—to the  public sector, to another mutual or to a subsidiary of the mutual learn the lessons of the circumstances that most recently inform us.

In the case of the Northern Rock transfer to a private company, not to another mutual, the Minister says, “Well, the advice from Deutsche Bank and others is in the public domain.” I am not sure that that is so. I think that there was a cursory summary document about the transfer. If there are to be further business transfers with other consultants being brought in to advise on them, as in the case of Northern Rock, we must have more transparency in public information. I got the impression that the Minister was saying that that Deutsche Bank advice would be published. If that is so, we would welcome that.

The hon. Member for Staffordshire Moorlands, whose contribution I welcome, mentioned the Co-operative and the Leek United building society in her constituency. Nothing in the clause may threaten the building society model, but there is certainly nothing substantive to promote the mutual sector. We are voicing those concerns today.

Praying in aid new section 138Kin clause 22 does not address the problem, but it would be invidious to oppose this minor, specific improvement in the clause. My hon. Friends and I are concerned about the elements that are conspicuous by their absence. I do not want to oppose the clause, but I regret that the Minister has missed the opportunity to fulfil his commitment to the coalition agreement.