Election of Directors: General

Orders of the Day — Building Societies Bill – in the House of Commons am 4:45 pm ar 17 Mawrth 1997.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Question proposed, That the clause stand part of the Bill.

Photo of Austin Mitchell Austin Mitchell , Great Grimsby

Although my amendment to the clause—amendment No. 3—has not been selected, I believe that the clause could still be strengthened by modification. The problem is that directors are being appointed to mutual building societies even though their interests go rather wider than the building society movement. Furthermore, they do not always come from the areas in which the societies are rooted. In effect, building societies are being white-anted by these people.

With the Halifax, more and more impossibly dignified and important people, mainly from London and the financial sector of the economy, have been appointed directors. These people do not have the interests of mutuality or of the building society at heart; they are much more concerned with the wider financial markets. It would therefore be better to include in the clause—it sets out the qualifications and election procedures for directors—some way of securing these people's testimony to their devotion to the principle of mutuality and to the building society of which they are being appointed director.

The clause deals purely with the mechanics, whereas our concern is with the principle of mutuality. Thus while defining those mechanics it would have been useful to take the opportunity to require directors to show their commitment to that principle—indeed to show that they are as committed to it as those who make up the society and those who have kept it going.

I have no desire to stand in the way of the clause, but I thought that the issue should be aired before we proceed.

Photo of Mrs Angela Knight Mrs Angela Knight , Erewash 5:15, 17 Mawrth 1997

I rather agree with the hon. Gentleman that directors should be prepared to stand up for mutuality. After all, they will be directors of a mutual society so they need to be committed to the concept. But what concerns me about the hon. Gentleman's sentiments is that if the Bill states that someone standing for director has to commit himself to mutuality, how will we know that that is true? Surely the best way to ensure someone's commitment to mutuality is for him or her to choose of their own volition to state that mutuality is a concept that they believe to be correct. That should be included in the statement that they put to members asking them to vote. If someone does not include that in the statement being sent out to members, I suspect that those members will draw their own conclusions. That is why I propose to leave matters as they stand.

Question put and agreed to.

Clause 27 ordered to stand part of the Bill.

Clauses 28 to 40 ordered to stand part of the Bill.