The Building Societies Association has come out in support of Liberal Democrat plans to appoint a min-ister to look after the interests of mutuals.
Nick Clegg, leader of the Lib Dems, set out the party’s plans last week to remutualise Northern Rock and says it will investigate whether a mutual status could be applied to other parts of government-owned banks.
If elected it would also pass a new Mutuals Bill to bring the law up-to-date and give responsibility for mutuals to a specific minister.
Fiona Cornes, head of external affairs at the BSA, says: “A minister for mutuals would be good for the sector. We are not the same as plcs and we don’t have shareholders – we have members.” Cornes adds that a dedicated minister could help mutuals with their funding constraints and promote their needs.
Clegg says the Lib Dems will give financial regulators a clear objec-tive of maintaining a diversity of providers in the financial services industry.
It would also seek to turn Northern Rock into a mutual and investigate whether mutualisation could be applied to parts of other financial institutions owned by the government.
Clegg also plans to split the banks to separate low-risk deposit-taking banking and utility banking from high risk investment banking.
He says: “We appreciate that separating these banking functions is complex and will take time. We will consult about the best way to split up these banks.
“But until such a time, taxpayers will have to continue underwriting the banks. To recognise this we are proposing a new levy on bank profits at a rate of 10%.”
The levy would be supplementary to corporation tax but would be payable on all profits made within the tax year, without deducting the previous year’s losses.