Media and Public Affairs
Public Affairs
Public Affairs Activity
January, February and March 2009|
Date:
9 Feb 2010
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Early Day Motion 426
An Early Day Motion detailing the disproportionate impact on building societies of the FSCS levies from failed banks has continued to gain support from MPs. EDM 426 - Financial Services Compensation Scheme Levy on Building Societies – now has 157 signatures from MPs across all parties. The Association wrote, at the end of February, to all MPs who were eligible to sign the EDM and had not done so - to encourage them to support us.
A public petition on the Number 10 website on the same subject now has over 1,600 signatures.
Westminster Hall debate on FSCS levy
On Tuesday 10 March, Ann Cryer MP will lead a debate in Westminster Hall on the Financial Services Compensation Scheme levy on building societies.
Treasury Select Committee (TSC) – banking crisis evidence sessions
The TSC has continued its wide ranging Inquiry into the banking crisis. The Association, along with the Chief Executives of Nationwide, Britannia and Yorkshire building societies, gave evidence to the Committee on 4 February. The Committee questioned the panel on, amongst other issues, the disadvantages of the demutualised model, the possibility of further demutualisations, the sector’s capacity for lending and the impact of the FSCS levies.
More recently, the FSA, FSCS and Bank of England appeared before the Committee. In the FSA and FSCS session on 25 February, John McFall MP, Chairman of the TSC, said “We have had unsung witnesses here who came after the press, namely the Building Societies Association, who did not get themselves into trouble and that has made quite an impression on us.”
In the same session there was considerable questioning of Lord Turner and Loretta Minghella about the FSCS levies and the disproportionate hit to societies. George Mudie MP described the sector as “almost universally well behaved in the current climate “ and asked the panel if anything could be done to change the unfair situation for societies. Both the FSA and FSCS said were aware of the sector’s concerns. Loretta Minghella said: “Good firms pay for bad firms that have gone, so there is always an element of unfairness about any of the bills that we produce for people…. I do think it is time to look again at the way the scheme is funded. One of the things that has come out over the past few months is that of course we have had the money that we have needed to pay the claims as they have fallen due, but the bills are coming at a difficult time and this does raise the question again of whether or not there should be an element of pre-funding for the scheme which I think will now come back onto the agenda.” Later on in the session Andy Love MP raised the issue again.
In the Bank of England session on 26 February, Mervyn King said of credit rating agencies: “The credit rating agencies did move into areas where they did not have appropriate expertise and there were conflicts of interest… but there is a good deal to be said for downplaying the role of credit ratings in its entirety.” Transcripts of all three sessions can be viewed here http://www.publications.parliament.uk/pa/cm/cmtreasy.htm#uncorr
Other Committee activity
The Director-General will appear before the Lords Economic Affairs Committee on 10 March, to talk about the banking crisis. The BBA will also appear before the Committee on the same day. On 17 March Graham Beale and Matthew Bullock will appear before the Committee.
The Director-General appeared before the Public Bill Committee for the Savings Gateway Accounts Bill on 27 January, whilst the Head of Financial Policy appeared before the Communities and Local Government Committee on their Inquiry into local authority investments on 9 February.
Private Members’ Bill
Russell Brown MP has introduced a Private Member’s Bill entitled Lending (Regulation) Bill. One of the original intentions of the Bill was to abolish 100% mortgages. However, at the Second Reading, Mr Brown said: “I had hoped that the Bill would cover 100 per cent. mortgages, but I thought it appropriate to remove that aspect because in the past week to 10 days much has been said about what level of mortgages should be offered, especially to first-time buyers”. The Bill will continue with its focus on unsolicited offers of credit. The Bill ranks 16th in the Private Members’ Bill ballot, so unless it receives Government support, it is unlikely to succeed.
