Parliamentary Inquiry into the True Cost of Demutualisation

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 be carrying out three parliamentary 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 Terms of Reference are:

1) Are former mutuals better than remaining mutuals at providing financial services?

2) Is there any evidence to suggest that demutualisation has improved the performance of former societies?

3) What effect has demutualisation had on the remaining mutual sector?

4) How has demutualisation affected consumer choice?

5) Did the level of windfalls reflect the economic value of members’ interests?

6) Have consumers benefitted from demutualisation?

The background to this Inquiry is that it is 16 years since Abbey National demutualised and there will also be crucial vote on demutualisation at Standard Life next year.

Adrian Bailey MP, who chairs the All-Party Group, commented: “The Group carried out a very 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.”

The Inquiry will hold its first session on Tuesday 1st November, at 4pm in Commons Committee Room 7.