Building Societies Association
Liberal Democrat Shadow Chancellor, Vince Cable, this week set out the Liberal Democrat plan for the banking sector.
In his speech, he cited the value of mutuals and argued there is a strong case for the remutualisation of Northern Rock, so long as a repayment plan is established.
Under the heading public ownership, competition and diversity, he said:
“There is a case for a more varied banking ecology. Those mutuals which resisted the - disastrous - lure of conversion continue to provide a different and, for many, more attractive business model without the pressures to produce shareholder returns. A strong case is being made for transferring nationalised Northern Rock back into a mutual. Our objection has been that mutualisation of the nationalised banks does not produce the return of cash to the taxpayer, but we must remember Northern Rock is in a very different situation to Lloyds and RBS. £23bn of Government money has been pumped into Northern Rock vastly in excess of its market worth even at the height of the credit boom. There is no way this money will ever be recouped purely from a re-flotation. As long as the Rock was re-mutualised in such a way to guarantee that it would continue to repay the Government, there is no reason - at least in principle - why it could not do this as a building society.”
The full speech can be viewed here