§ 5. Mr. FrenchTo ask the Chancellor of the Exchequer what discussions he has had with building societies about the future of mutual status. [4860]
§ The Economic Secretary to the Treasury (Mrs. Angela Knight)Since I published the last draft of the Building Societies Bill in March, I have held frequent discussions with a great many building societies on a number of issues. I have also spoken to the Building Societies Association on several occasions.
§ Mr. FrenchDoes my hon. Friend share my concern that, notwithstanding the strong representations made over the past month, some building societies that are currently converting seem determined to ride roughshod over the perfectly legitimate bonus expectations of particular categories of customer, especially second named account holders who are disabled? Does she agree that it is highly desirable for pressure to be put on such societies to change their attitude to the problem?
On a wider front, does my hon. Friend agree that those societies should be required not merely to explain why they are demutualising, but to justify the particular formula that they have chosen to adopt? Part of that should involve an independent assessment of a society's overall assets, so that the members' legitimate interests can be established.
§ Mrs. KnightThe Building Societies Act 1986 requires societies to provide members with all material 451 information, and the Building Societies Commission checks that the information sent out complies with that requirement.
As for the issue of disabled people and other groups, within certain constraints the existing Building Societies Act allows societies to devise a variety of schemes involving, for instance, making a pay-out to each member, making a pay-out for each account and making a pay-out for each name on the account through the first named members. It is for the building societies themselves to decide which scheme they feel is most appropriate—and, of course, for the members to decide.