The Parliamentary All-Party Group for Building Societies and Financial Mutuals has agreed to conduct a short inquiry into the true cost of demutualisation.
The Group will carry out three hearings in November, during which evidence will be taken from witnesses from within, and outside, the mutual sector to determine whether customers of previously demutualised companies are now paying back their windfalls through higher costs and charges. The Group is now calling for written evidence to be submitted by interested parties.
The questions asked will include whether former mutuals are better than remaining mutuals at providing financial services, and if there is any evidence to suggest that demutualisation has improved the performance of former societies?
The group will also be asking what effect demutualization has had on the remaining mutual sector, and how has demutualisation affected consumer choice? Other questions will be about the level of windfalls, and whether they reflect the economic value of members and, have consumers benefitted from demutualisation?
It is 16 years since Abbey National demutualised and there will be a crucial vote on demutualisation at Standard Life next year.
Adrian Bailey MP, who chairs the All-Party Group, says: “The Group carried out a successful Inquiry last year into the extent to which mutual businesses contribute to the economy and society and we felt that consumers have a right to know how much of their windfalls have been clawed back through higher charges.”
A full summary will be published early next year and the Inquiry will hold its first session on Tuesday November 15. Witnesses who have agreed to give Oral Evidence to the Group include Ned Cazalet, financial commentator, Professor Nigel Waite from the Nottingham Business School as well as organisations such as the Association of Mutual Insurers, Building Societies Association and Which?.