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Mrs. Angela Knight: The hon. Gentleman should stop reading headlines and read the articles. If he reads the article written by the Deputy Prime Minister, which is headed "Deregulation the way to greater financial freedom", all will become clear to him. My right hon. Friend rightly points out that 16 million people are benefiting from conversion, but he is also very much in favour of the mutual sector. The hon. Gentleman should read the article.
Mr. O'Brien: I shall give way to the Minister again if she can tell me where in the article the Deputy Prime Minister says that he is very much in favour of mutuals.
Mrs. Knight: Perhaps the hon. Gentleman does not realise that my right hon. Friend the Deputy Prime Minister is one of the backers of the Bill.
Mr. O'Brien: The hon. Lady has not answered the question; nowhere in the article is there any endorsement of mutuals--quite the contrary. The hon. Lady is suggesting that I might somehow be misleading the House about what the Deputy Prime Minister says. I shall read out some more of the article so that the House can judge for itself.
The article says:
"the extraordinary changes now taking place in the building societies come as a direct result of the Government's deregulation initiative."
The Deputy Prime Minister claims that the conversion process is part of the deregulation initiative. He goes on:
"In 1986 our building societies legislation enabled building societies to convert from their mutual status to plcs--in practice, to become banks."
I do not deny that that is a statement of fact. He says further on:
"with today's massive availability of funds it now makes sense to make the ownership of building societies more transparent; to give the members--the lenders and borrowers who have always those societies--the direct rights of ownership which shareholding offers and to allow the societies to compete more effectively in the modern world. Hence the legislation to give the building societies the ability to convert themselves"--
he is endorsing the 1986 Act--
"into publicly quoted companies.
I am reading Conservative propaganda. I am waiting for a reference to how important mutuals are, but it does not come. The Deputy Prime Minister tells us that
Hence the extraordinary and exciting changes we are now seeing.
During the conversion process a large number of people have qualified for free shares. The Abbey National flotation took place in 1989."
"Now the floodgates are opening",
but still he has not mentioned mutuals. He seems pleased with the floodgates opening to conversion. On he goes:
"As I write, the Halifax, Alliance and Leicester, Woolwich, Norwich Union, Northern Rock and Scottish Amicable are all poised to float on the stock market."
He goes on about the £1,000 that people are getting and how 16 million people are benefiting. He says:
"This outcome flows directly from the Government's policies, its determination"--
10 Mar 1997 : Column 86
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the hon. Lady has been engaged in some sort of altercation with others on the Back Benches, but she should hear this--
Mr. O'Brien: In a moment. Let me just finish, then I shall give way to the hon. Lady, because she has a lot of explaining to do. The Deputy Prime Minister talks about the Government's
- "determination to deregulate business and promote competition".
- "giving people more choice, new opportunities and better service. These have long been central tenets of Conservative philosophy."
Mrs. Knight: The hon. Gentleman is being extraordinarily silly. He is not normally this silly, but we have seen him silly before. He is reading an article about some of the societies that have converted or are converting and the benefits that that has brought and will bring to 16 million people. The object of the Bill, of which the Deputy Prime Minister is a sponsor, is to ensure that mutuals can compete on a level playing field. It is deregulatory. The Government are in favour of societies making their own choices on which way to go. The hon. Gentleman's interpretation is silly.
Mr. O'Brien: The hon. Lady cannot have read the article properly. I am not relying merely on my interpretation. The headline in The Mail on Sunday--normally a Conservative-supporting newspaper--calls it "Heseltine's snub for die-hard mutuals". If the Deputy Prime Minister did not understand the Bill, one might appreciate his comments, but he appears not to want to reduce the need to convert. He does not want to preserve for the consumer the choice of mutual status. He wants all building societies to be converted. That is what the article is all about. He says that conversions came about as a direct result of the Government's deregulation initiative.
Mr. Douglas French (Gloucester): Will the hon. Gentleman give way?
Mr. O'Brien: Let me answer the hon. Lady first.
The Deputy Prime Minister advocates conversion. That is what the article is all about. The timing and the tone of the article, on the eve of a debate on the Bill, are a slap in the face for the Bill and, in many ways, for the hon. Lady. Why are the Government sponsoring a Bill of which the main purpose is to reduce the need for what the Deputy Prime Minister thinks that the Government want done? Why did he choose to launch his plea for more conversions yesterday, unless he intended to dissociate himself from the Bill? Why did he attack the core objective of the Bill? The truth is that, like rats in a sack, the Tories are at each other's throats again.
Mr. French:
I am not sure whether it is worth intervening, because the hon. Gentleman has clearly made up his mind and put his own construction on the article.
Mr. O'Brien:
The hon. Gentleman has made my case. The Deputy Prime Minister does not mention mutuals. He endorses conversion, claiming that the move away from mutuality is part of the central tenets of Conservative philosophy. I give credit to the Economic Secretary. She understands what mutuals are doing and wants the Bill passed, but I do not think that the Deputy Prime Minister has the same view.
Mr. John Butterfill (Bournemouth, West):
Will the hon. Gentleman give way?
Mr. O'Brien:
Not at the moment.
That explains the mystery of why it took two years to bring the Bill forward. Why, despite promises, was it dropped from the 1995 legislative agenda and from the Queen's Speech last year? Why was there such resistance to the Bill? I know that the hon. Lady supported it, but why has it taken until now, since her announcement last November, for the Bill to be reintroduced? There has been more than enough time. Parliament has hardly been overburdened with work. Members of Parliament have been going home early. The reason is now exposed; the Deputy Prime Minister does not support the Bill.
Mr. Butterfill:
The hon. Gentleman is being a little disingenuous. He knows perfectly well why the Bill has taken a long time, as does anyone who takes an interest in the matter, including all the members of the all-party building societies group. There has been a delay, because various people who were consulted were not able to agree. The mutuals have not all been able to agree; nor have the converting societies. Other financial institutions, such as banks and insurance companies, have taken different views. It has been necessary to reconcile all those views to get a Bill that everybody can support. That is what has taken time, as the hon. Gentleman knows well.
Mr. O'Brien:
Three years? It takes three years to consult? It takes three years to find out what people think? That is nonsense. The consultation period has lasted much too long. Enormous pressure has been put on mutuals to convert, which has been damaging. The hon. Gentleman's excuses do not stand up. There has been so much delay because there have been internal rows in the Conservative party. We have seen that on Europe and on bovine spongiform encephalopathy. On all aspects of Tory policies, there are internal rows and public attacks on each other. Now the splits have been exposed on the Building Societies Bill.
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