Demutualisation of Liverpool Victoria — House of Commons, 2021-09-15
Topic: Domestic Commerce
John Philip Glen (Conservative, Centre-right): I congratulate the hon. Member for Harrow West (Gareth Thomas) on securing the debate. He is a strong and sincere supporter of the mutuals sector, and he has regularly raised issues with me in the, I think, 44 months that I have been in post. I very much value his knowledge and insights on these matters and welcome the opportunity to discuss his concerns During my time as Economic Secretary to the Treasury, I have seen the clear benefits of mutuals both for the economy and for society as a whole. In essence, these businesses focus on service, and their frequently innovative nature means that they provide a unique, distinct offer to both their customers and their communities as well as a much-valued degree of service. The Government recognise those benefits, which is why, over the years, we have shown ourselves to be a supporter of the mutuals sector That support has manifested itself in a wide variety of ways, including, first, in engagement. We think it is vital that we understand the sector’s needs, so two years ago the Treasury held a mutuals workshop dedicated to understanding the challenges facing the sector and how they can be overcome. We have tried to take on board the points raised in that workshop, and we continued the conversation. As a result, my officials have been working hard to raise awareness of the mutuals model across Government to ensure that other Departments are equally focused on supporting it Secondly, we are helping the sector to be ready for the future. That is why at the Budget we committed to amending the Credit Unions Act 1979 to allow credit unions to offer a wide range of products and services. Finally, we have ensured that mutuals have also received financial support throughout the covid crisis, recognising their vital contribution to communities up and down the country. Mutuals were able to benefit from the furlough scheme and other forms of Government financial help. In addition, the Corporate Insolvency and Governance Act 2020 introduced new insolvency support mechanisms for businesses, including many in that sector I would now like to address the subject of this debate in more specific detail. The hon. Gentleman has set out in some detail a range of observations about what has happened over recent months. As he is aware, the sale of LV= to Bain Capital and the ultimate demutualisation of the firm is something that I have engaged with him on and discussed previously. I want to assure the House that this continues to be a priority for me. I am closely engaged on this matter, and I am in close communication with regulators and the firm itself However, while I am very focused and aware of the views that the hon. Gentleman holds and the concerns that he raises, I cannot intervene directly in the sale or the demutualisation of a firm. The sale’s approval is a matter for the financial services regulators and the courts, both of which are independent of Government. The hon. Gentleman has done a lot of work to trace the interactions between the firm and the regulators, and I know that they are very aware of his interest in the matter. I am sure that that is going to lead to a very rigorous process, which I think he understands and I know is under way. Therefore, I do not think it is appropriate for me at this point to comment on the substance of that ongoing independent process, but what I can say is this. The approval process involves safeguards designed to ensure that members and policyholders are kept informed and that their interests are protected. I recognise that we are not at the end of that process yet, and the hon. Gentleman is somewhat anxious and perhaps, I may suggest, sceptical about what the final outcome will look like. But I have been reassured that the regulators are undertaking rigorous processes, as evidenced by the number of meetings that they have had, to assess the viability of the transaction and the suitability of Bain to manage an insurance business. Importantly, the statutory objectives of the regulators put policyholders’ interests, as well as consideration of the impact of the transaction on the market, at the heart of their assessment. I greatly support the regulators in their roles, and trust that they will endeavour to secure the best outcome in the interests of members and policyholders I recognise the points that have been raised about further demutualisations by the hon. Member for York Central (Rachael Maskell). As I mentioned earlier, I believe mutuals have a very special place in our economy, and I very much value that contribution, but ultimately any future sales, irrespective of whether the firm is a mutual, will and should be considered on a case-by-case basis, in line with the regulators’ and courts’ duties and requirements I recognise that, in the course of this debate this evening, some suggestions have been made about the sorts of interventions that may be appropriate to safeguard the sector. I would be very happy to meet the hon. Member for Harrow West and the hon. Member for York Central to discuss their views on this subject, but I am, as I demonstrated earlier, very much focused on helping the sector to thrive. That means continuing the conversation so we can identify how best to facilitate the growth of the sector and understand the concerns in more detail, recognising that, across the range of mutuals of different sizes and different roles in the economy, different concerns may exist Therefore, I hope the hon. Member for Harrow West will relay the message to the sector that my door continues to be open to it. I would like to thank both Members for their constructive comments.