Media and Public Affairs
Public Affairs
Public Affairs Activity
September and October 2010|
Date:
24 Nov 2010
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Treasury Select Committee (TSC) inquiry into financial regulation
The Association’s Director-General appeared before the TSC on 12 October as part of its financial regulation inquiry. The BBA and the Association for Financial Markets in Europe also appeared.
One of the key messages given by the Association was that if the regulatory reform proposals were implemented, huge powers would be concentrated within the Bank of England. The Governor of the Bank would be chairman of the Monetary Policy Committee, setting interest rates; the Financial Policy Committee, setting system wide controls and the Prudential Regulation Authority.
Director-General also explained the disadvantages of giving the new regulator a “consumer champion” role – he said; “in the application of regulations the CPMA should be disinterested in the outcome…it should be equally distant between firms and consumers in assessing whether or not firms are applying [its] rules appropriately…..we might well get a less than optimum relationship between firms and the CPMA if it is always seen to be taking the consumer side and never understanding the firm’s argument.”
On the point of supervision, the Director-General noted it concerned BSA members that there has been a lack of consistency of supervision. He said; “mutual organisations have a particular form and a particular way of doing things…One of the secrets of the success of the new structure is to have supervisors who are able to put three or four years into an organisation and really understand it while adopting the same approach of the accountancy profession of proper movement of individuals so that they don’t become too familiar to the organisation, too well known and too understanding of perhaps inappropriate concerns.” A full transcript of the session can be viewed here.
The Association has also submitted written evidence to the TSC’s inquiry into competition and choice in the banking sector.
BSA at Party Conferences 2010
The Association had a successful Party Conference season, taking part in fringe events at all three of the main political conferences.
At a series of events entitled Mutual financial services - how can financial services work in the public interest? the BSA, along with the Association of Financial Mutuals, the Association of British Credit Unions and The Co-operative Financial Services debated diversity in financial services. As well as speakers from each of the sponsoring Associations, the following MPs, Ministers and Peers addressed their respective party events - Baroness Maddock (Lib Dem), Gareth Thomas MP (Lab/Co-op, Harrow West), Shadow Treasury Minister and Mark Hoban MP (Con, Fareham), Financial Secretary to the Treasury.
Lords question on Building Societies Sourcebook
Baroness Gardner of Parkes (Con) asked the following question in the House of Lords on 25 October – “To ask Her Majesty's Government what they expect to be the effect of the limitations on shared ownership for first-time buyers as set out in the Financial Services Authority's policy statement A Specialist Sourcebook for Building Societies, published in March 2010, stating that a maximum of 15 per cent of a building society's whole mortgage book will be available for non-prime owner-occupied mortgages”.
Further on in the debate, Lord Eatwell (Lab) highlighted that building societies are less risky than banks and therefore now is the time to “reduce the punitive levy on building societies for the Financial Services Compensation Scheme”. Lord McFall of Alcluith (Lab) also raised the idea of remutualising failed banks. The full debate can be viewed here.
Savings Accounts and Health in Pregnancy Grant Bill
The purpose of this Bill is to set out the legislation to abolish the Child Trust Fund, the Saving Gateway and the Health in Pregnancy Grant. The Association’s Director-General was called to appear before the Public Bill Committee on 2 November. He was asked how successful the CTF was and how the Saving Gateway pilots worked. He noted that whilst the CTF was successful in as far as it goes, it made up only 0.2% of mutuals’ retail savings balances. On the Saving Gateway, he said, no building society had committed to offering the Saving Gateway due to the small market size, the significant share of the market likely to be taken by the Post Office, and the sizable administration costs.
Comprehensive Spending Review
The Government announced the details of its Comprehensive Spending Review on 20 October.
It confirmed plans for a bank levy and draft legislation for this was published on 21 October. The Government will monitor tax receipts from the levy to ensure that firms make a fair and growing contribution. The largest 15 banking firms are required to adopt and implement the Code of Practice on Taxation by the end of November.
On social housing, the Government will provide 150,000 new affordable homes over the spending review period. New social tenants will face rent levels between the current social rate and market rates (around 80% of current market rates as announced in the speech). Rents for existing social tenants will remain unchanged.
The changes relating to Support for Mortgage Interest, due to expire in January 2011, have been extended to January 2012.
Mutualisation of the Post Office
As part of the Government’s Postal Services Bill, there are plans to make the Post Office mutual. The Bill is currently at Second Reading stage in the House of Commons.
Shadow Cabinet appointments
After his victory as Labour leader, Ed Milliband reshuffled the shadow cabinet. Of interest to members includes the new Treasury team - Shadow Chancellor: Alan Johnson, Shadow Chief Secretary to the Treasury: Angela Eagle, Shadow Financial Secretary: Chris Leslie (shadowing Mike Hoban, and well-known to the Secretariat following previous service as an MP), Shadow Exchequer: David Hanson, Shadow Economic Secretary: Kerry McCarthy. In other departments, Caroline Flint becomes Shadow Secretary of State for Communities and Local Government and John Denham takes the role of Shadow Secretary of State for Business, Innovation and Skills.
Parliament Recess Dates
The Association’s Director-General appeared before the TSC on 12 October as part of its financial regulation inquiry. The BBA and the Association for Financial Markets in Europe also appeared.
One of the key messages given by the Association was that if the regulatory reform proposals were implemented, huge powers would be concentrated within the Bank of England. The Governor of the Bank would be chairman of the Monetary Policy Committee, setting interest rates; the Financial Policy Committee, setting system wide controls and the Prudential Regulation Authority.
Director-General also explained the disadvantages of giving the new regulator a “consumer champion” role – he said; “in the application of regulations the CPMA should be disinterested in the outcome…it should be equally distant between firms and consumers in assessing whether or not firms are applying [its] rules appropriately…..we might well get a less than optimum relationship between firms and the CPMA if it is always seen to be taking the consumer side and never understanding the firm’s argument.”
On the point of supervision, the Director-General noted it concerned BSA members that there has been a lack of consistency of supervision. He said; “mutual organisations have a particular form and a particular way of doing things…One of the secrets of the success of the new structure is to have supervisors who are able to put three or four years into an organisation and really understand it while adopting the same approach of the accountancy profession of proper movement of individuals so that they don’t become too familiar to the organisation, too well known and too understanding of perhaps inappropriate concerns.” A full transcript of the session can be viewed here.
The Association has also submitted written evidence to the TSC’s inquiry into competition and choice in the banking sector.
BSA at Party Conferences 2010
The Association had a successful Party Conference season, taking part in fringe events at all three of the main political conferences.
At a series of events entitled Mutual financial services - how can financial services work in the public interest? the BSA, along with the Association of Financial Mutuals, the Association of British Credit Unions and The Co-operative Financial Services debated diversity in financial services. As well as speakers from each of the sponsoring Associations, the following MPs, Ministers and Peers addressed their respective party events - Baroness Maddock (Lib Dem), Gareth Thomas MP (Lab/Co-op, Harrow West), Shadow Treasury Minister and Mark Hoban MP (Con, Fareham), Financial Secretary to the Treasury.
Lords question on Building Societies Sourcebook
Baroness Gardner of Parkes (Con) asked the following question in the House of Lords on 25 October – “To ask Her Majesty's Government what they expect to be the effect of the limitations on shared ownership for first-time buyers as set out in the Financial Services Authority's policy statement A Specialist Sourcebook for Building Societies, published in March 2010, stating that a maximum of 15 per cent of a building society's whole mortgage book will be available for non-prime owner-occupied mortgages”.
Further on in the debate, Lord Eatwell (Lab) highlighted that building societies are less risky than banks and therefore now is the time to “reduce the punitive levy on building societies for the Financial Services Compensation Scheme”. Lord McFall of Alcluith (Lab) also raised the idea of remutualising failed banks. The full debate can be viewed here.
Savings Accounts and Health in Pregnancy Grant Bill
The purpose of this Bill is to set out the legislation to abolish the Child Trust Fund, the Saving Gateway and the Health in Pregnancy Grant. The Association’s Director-General was called to appear before the Public Bill Committee on 2 November. He was asked how successful the CTF was and how the Saving Gateway pilots worked. He noted that whilst the CTF was successful in as far as it goes, it made up only 0.2% of mutuals’ retail savings balances. On the Saving Gateway, he said, no building society had committed to offering the Saving Gateway due to the small market size, the significant share of the market likely to be taken by the Post Office, and the sizable administration costs.
Comprehensive Spending Review
The Government announced the details of its Comprehensive Spending Review on 20 October.
It confirmed plans for a bank levy and draft legislation for this was published on 21 October. The Government will monitor tax receipts from the levy to ensure that firms make a fair and growing contribution. The largest 15 banking firms are required to adopt and implement the Code of Practice on Taxation by the end of November.
On social housing, the Government will provide 150,000 new affordable homes over the spending review period. New social tenants will face rent levels between the current social rate and market rates (around 80% of current market rates as announced in the speech). Rents for existing social tenants will remain unchanged.
The changes relating to Support for Mortgage Interest, due to expire in January 2011, have been extended to January 2012.
Mutualisation of the Post Office
As part of the Government’s Postal Services Bill, there are plans to make the Post Office mutual. The Bill is currently at Second Reading stage in the House of Commons.
Shadow Cabinet appointments
After his victory as Labour leader, Ed Milliband reshuffled the shadow cabinet. Of interest to members includes the new Treasury team - Shadow Chancellor: Alan Johnson, Shadow Chief Secretary to the Treasury: Angela Eagle, Shadow Financial Secretary: Chris Leslie (shadowing Mike Hoban, and well-known to the Secretariat following previous service as an MP), Shadow Exchequer: David Hanson, Shadow Economic Secretary: Kerry McCarthy. In other departments, Caroline Flint becomes Shadow Secretary of State for Communities and Local Government and John Denham takes the role of Shadow Secretary of State for Business, Innovation and Skills.
Parliament Recess Dates
| Christmas | 21 December 2010 | 10 January 2011 |
| Half-term | 17 February 2011 | 28 February 2011 |
| Easter | 5 April 2011 | 26 April 2011 |
| Whitsun | 24 May 2011 | 7 June 2011 |
| Summer | 19 July 2011 | 5 September 2011 |
| Party Conference Recess | 15 September 2011 | 10 October 2011 |
| Christmas | 20 December 2011 | 10 January 2011 |
