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MP hits out at FSCS’s onslaught of building societies

Ann Cryer, Labour MP for Keighley has attacked the Financial Services Compensation Scheme’s “onslaught” of building societies.

Her comments were made at a Westminster Hall debate this morning following a parliamentary Early Day Motion on building society levies.

Cryer says:”The FSCS-driven onslaught comes at a particularly bad time when one looks at the bigger picture.”

Cryer says societies are seen in many ways as an antidote to the banking excesses of the pas, and represent a small corner of sanity, which should be nurtured.

She says despite the Treasury Select Committee confirming that it will be conducting a review into FSCS levies, no details of such a review have been released yet.

Ian Pearson MP, economic secretary to the Treasury says he has every sympathy with the building societies and he will be making sure the Financial Services Authority looks at Cryer’s case.

He says: “Rules on levies are a matter for the FSA, as a government we have been clear that the costs of the scheme should be met by the financial services industry.

“It is rational and sensible that each sector should consume their own smoke, building societies are deposit taking firms and it would seem extremely unfair that parts of the industry more remote form deposit taking firms should pick up the bill before they do.”

He says if there were a system were societies did not contribute in the first instance to the cost of bank defaults, banks would also not be expected to contribute in the first instance to the protection of societies in the future.

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