§ Mr. Eggarasked the Chancellor of the Exchequer what further steps are being taken in the interest of investors in the New Cross building society.
§ Mr. Ian StewartMy right hon. Friend laid before Parliament on Thursday 12 January a White Paper entitled "New Cross Building Society" (Cmnd. 9033). This set out the background to, and reasons for, the orders made by the Chief Registrar of Friendly Societies under section 1 of the House Purchase and Housing Act 1959 and section 48 of the Building Societies Act 1962 in respect of that society. After the White Paper had gone to press, the Court of Appeal brought forward the operative date for the orders from 17 January, (as quoted in the White Paper), to 13 January, because confidentiality could no longer be assured.
As reported in the White Paper, the Woolwich Equitable building society agreed in principle to accept a transfer of engagements in order to help investors in the New Cross, and in the interests of the good repute of building societies generally. Preparations for carrying through the statutory procedures for this transfer, including a meeting at which the proposals will be put to members of the New Cross, are being pressed ahead as quickly as possible. The draft instrument of transfer provides that all investors will be able to withdraw their money, if they wish, as soon as the transfer takes effect. It is now hoped that, if members approve, it will be possible to complete the merger by early March. In the meantime, the Court of Appeal has directed that the funds which had been paid into court at its instance since December 12 should be used to enable investors who had paid money into the society on or after that date to be repaid if they so wish. The society has been ordered to write quickly to investors to tell them of this. I understand that the society is dealing rapidly and sympathetically with other applications to withdraw on grounds of hardship. Investors who wish to make a withdrawal on such grounds should write, giving their reasons and enclosing their pass books, to Mr. M. E. Tuke—a general manager of the Woolwich who now has overall responsibility for the running of the New Cross — at 56–58 Deptford high street, London, SE8 4RT.
Together these measures should minimise the effect of the orders on existing investors. Any remaining difficulty for investors as a result of delay in access to their funds is unfortunate but unavoidable. Responsibility for it lies entirely with the existing board of the society.
As the White Paper explained, the previous and present Chief Registrars had been concerned for some years that 346W the society's management might not be paying sufficient attention to safeguarding the interests of members. By last summer the Chief Registrar had come to the view that the facts available to him, including breaches of statutory requirements and repeated instances of unsatisfactory management in other respects, left him no option but to intervene to protect present and future investors from the possibility of future loss. By acting now, he has ensured that any problems are a matter of delay rather than actual losses and the arrangements made through the good offices of the Building Societies Association for the Woolwich to accept a transfer of engagements provide the quickest way in the circumstances for investors to obtain repayment in full if they want it.