Better Jobs and a Fair Deal at Work — House of Commons, 2021-05-12
Topic: Domestic Commerce
Gareth Thomas (Labour, Centre-left): It is a pleasure to follow the right hon. Member for Sutton Coldfield (Mr Mitchell). I strongly share the view that the decision to move away from 0.7% of our national income being spent on development is the wrong one. Not only is it damaging for Britain’s reputation abroad and for numerous programmes such as the girls’ education programme that he highlighted, but ultimately, in the context of covid, it is self-defeating. We will not be able to be to feel secure in a world free from the risk of covid unless we help to build up other countries’ ability to fight covid. Aid is part of that solution Britain’s financial services industry is world leading. It generates huge wealth for our country, creates thousands of jobs and delivers considerable soft power in its wake. Hidden in plain sight in the City and beyond are financial mutuals: friendly societies, building societies, credit unions. They are like the steel girders in the Shard; they are not glamorous but their role is critical. Their savings products, life assurance, pensions, mortgages and other products are rarely beaten for value, and as a result they make a huge difference to the quality of life of so many of our constituents. They play another critical role: they keep traditional financial businesses such as banks—shareholder and investor owned—from the temptation to take ever more value from customers’ savings. The City and the financial services industry, as this House knows only too well, have seen enough stories of excessive fees, ridiculous levels of executive remuneration and excessive profit taking. Without mutuals—without that corporate diversity—the industry would be even more open to the consequences of excessive market power Sadly, little has changed since the Competition and Markets Authority investigated the banks back in 2016. For all the talk of challenger banks, the big banks that swallowed up all the building societies that demutualised before the financial crash still dominate. Given the obvious lack of appetite for taking on the banks, that market power will not abate any time soon, but Ministers could have used the Queen’s Speech at least to prevent the situation from getting worse. First, they could take the needs of financial mutuals even more seriously by modernising the rules by which they are governed, helping the smaller mutuals to raise capital more easily. Australia is a great case study, as the Economic Secretary is aware. Why on earth has the long-promised deregulation of credit unions not happened Secondly, Ministers should investigate the takeover of Liverpool Victoria. The former managing director of the Post Office, Alan Cook, now the chairman of Liverpool Victoria, is selling this 178-year-old friendly society, which was originally founded to help working people in Liverpool to avoid the Victorian scandal of a pauper’s funeral. Presumably Mr Cook expects to make millions from the deal. It is the first major demutualisation of a financial mutual since before the financial crash. Mr Cook cleverly proposed the conversion of LV= to a company limited by guarantee and got the Financial Conduct Authority to agree, all the while telling his owners—his customers—that he was not going to demutualise Liverpool Victoria. Remarkably, that is exactly what he is now proposing to do To be fair, the FCA did make it clear to the all-party parliamentary group on mutuals that there would be some boxes it needed to tick as the sale of LV= proceeded. Serious questions are now being asked about the FCA. It was asleep at the wheel when London Capital and Finance was collapsing, again asleep at the wheel when Greensill tottered into insolvency, and now seems determined to take sleeping tablets as a thriving, well-capitalised British success story is being handed over lock, stock and barrel to one of America’s most controversial private equity giants. I urge Ministers to take the opportunity to investigate I share the concerns, too, about the proposed complete overhaul of the English planning system. It will drastically reduce the role of councils and communities, such as those in my constituency, in our ability to stop inappropriate development. It will make it harder for councils to make sure that the right sorts of homes are built to the right standard and in the right sorts of places. I urge the Government to think again.