§ 2.53 p.m.
§ Baroness Knight of Collingtreeasked Her Majesty's Government:
What steps they are taking to ensure the preservation of consumer choice in the light of a number of recent take-overs and consolidations of life assurance and pension companies.
§ Lord McIntosh of HaringeyMy Lords, mergers and acquisitions in recent years have not significantly reduced the overall number of companies authorised to carry on life and pensions business. Proposals for mergers are subject to the usual scrutiny procedures. Competition authorities consider the implications both for competition and for consumer choice. The Government are acting to improve the regulatory framework through the Financial Services and Markets Bill. That will help to deliver better value for money for consumers.
§ Baroness Knight of CollingtreeMy Lords, does the Minister agree that although the "once for all lifetime" may well be very welcome to those who are members of the mutuals, they do stand possibly to lose a great deal if the companies disappear, as do others? Did the Minister notice the comments made three clays ago in the Sunday Telegraph by the managing director of a providence group—and, in spite of the comments of the noble Lord, Lord Whitty, I am sure that this article can be relied upon—to the effect that mutuality is now fundamentally unstable? Does the Minister recognise that there is great concern about this matter?
§ Lord McIntosh of HaringeyMy Lords, I should declare an interest as a policy holder with two mutual companies, both of which recently decided to demutualise against my vote. So I think my personal view may be evident already to the noble Baroness. I did read the comment to which the noble Baroness referred. I do not think that it is a general view within the industry. It is true that there are mutual companies which are subject to take-over or to demutualisation under pressure from their own members.
§ Lord Faulkner of WorcesterMy Lords, I should declare an interest as a policy holder of a mutual company, Standard Life, which is opposing demutualisation. Is my noble friend aware that the carpetbaggers who are attempting to force through this demutualisation are claiming that the board of the company can act only in the interests of present policy holders and that it may, if it wishes, appropriate the capital of the company for itself, regardless of the interests of future policy holders? Can my noble friend confirm that the Government do not share that view 703 and that they accept that the boards of mutuals have as much responsibility to future policy holders as they have to existing ones?
§ Lord McIntosh of HaringeyMy Lords, the Government's view is that the boards of mutual companies have responsibilities to a number of different stakeholders, including current policy holders, the employees and prospective policy holders.
§ Lord HigginsMy Lords, I should declare an interest as the holder of both a mutual policy and a non-neutral policy. The Minister has expressed his personal view; what is the Government's view so far as concerns mutuality?
§ Lord McIntosh of HaringeyMy Lords, a neutral mutual view, one might say. The Government's view is that a variety of different kinds of governance in the insurance industry is a good thing. Therefore there is a place for both mutual companies and for shareholder-owned companies.