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Mr. Butterfill: Does my hon. Friend accept that some mergers and takeovers that have nominally taken place on an agreed basis have in fact been the result of considerable pressure by one society on another? Does she not realise that these things are a little more subtle than she suggests?
Mrs. Knight: Yes, I am aware of that. That is one reason why the Bill is in its current form. It ensures that building societies, while remaining mutual, can offer more services and so become more competitive in the mutual sector, thereby making them stronger. That will help them to flourish. Secondly, it makes changes relating to other aspects so that converted building societies, about which the mutuals are concerned, cannot become predators on the mutual sector in the way that many people have feared. Undoubtedly, the ability to compete is one key to ensuring that the mutual sector flourishes, as we all want.
The hon. Member for North Warwickshire (Mr. O'Brien) asked whether speculation was advisable; the answer is no. Why have the Government changed their mind since 1986? The world has changed since 1986, and I have explained what is behind our thinking; we cannot turn back the clock on the two-year rule. He asked whether societies belonged to members; of course they do. He suggested that there might be many more speculators after societies have converted. I honestly do not think that there will be more speculators; there will be more account openers looking for a mutual home for their savings. Many mutual societies are making that attractive and targeting that sector to ensure that such people become members.
Mr. Austin Mitchell:
I confess disappointment with the Minister's reply. That it was so long suggests the depth of her difficulties. So long a reply at this stage of a Bill that, we are told, has to be rushed through, shows a defensive attitude. She never took up the basic issue of whether we want such a defence against speculation. Is it right or wrong? She went through a series of quibbles and excuses for not doing anything but as a Minister in control of drafting and, she told us, in control of the procedures of the House, she has the power to do something if she wants.
It is disappointing that she has not accepted the view of both Government and Opposition Members. I am disappointed with the positions of both Front-Bench teams but especially with her position because she has the power to enact the principle of the amendments. We have been reduced to Back Benchers, who are deeply interested in the building society movement and especially in the principle of mutuality, being against Front Benchers.
The Minister told us that the Bill will become law. I am a little doubtful about whether she can guarantee that, but that means that it is all the more important that we should perfect it and make it the best Bill that we can in the time available. It would be simple to introduce the provision, perhaps better written or better defined to get rid of all the quibbles that she raised. It would be a better Bill. If there is time, we should do it.
Mr. Peter Bottomley:
I thank the hon. Member for the ghastly tie for giving way. While I basically support the principle of his amendment, my hon. Friend the Minister pointed out that in practice, it would be two years or more before ram raiders could get through. If we are talking about protection for two years, the practical point may be as important as the principle. We need to get a balance between fairness to small savers--and for that matter to not so small savers--and ensure that large numbers of small savers cannot join to try to do what most existing mutual members do not want. I am not sure that we have found a way forward. The Minister's comments are relevant, though the principle is also important.
Mr. Mitchell:
The signals were clear. The Minister rightly said that there is normally a churning, a turnover, of people taking money in and out of building societies. However, when there is a flood of new applications, it is possible to discern what is going on and realise that the flood is part of a speculative bubble that has to be pricked. If the will is there, it is possible to define a basic principle and to make it operate practically. The Minister was making excuses for not doing it rather than mounting a defence against the principle that I advanced.
If there were a two-year rule, it would be an incentive for people to keep money in societies for longer, rather than for churning it in the way that the Minister described. I wish that she had accepted the principle and said, "While the hon. Members for Burnley and for Great Grimsby are most accommodating and amiable, they are not the best draftsmen in the House. It is inadequate, but my draftsmen will produce a tailor-made amendment to achieve what they want and which can go in even at this late stage." It could have been done. The building societies, Back Benchers and opinion outside want it, but we cannot have it because of the rush.
That puts me and my hon. Friend the Member for Burnley (Mr. Pike) in a dilemma because, being new Labour, we are honest, moderate chaps and we do not want to make a disturbance or put difficulties in anyone's way; we are amiable--that is the essence of our breed. We want to be accommodating, but there is an issue of principle.
We have been placed under duress by our Front Bench. If my hon. Friend the Member for North Warwickshire (Mr. O'Brien) had taken a firmer line he could have coerced concessions from the Government, which would have put the Minister in an embarrassing situation, so that she might well have had to give way to us. That is what we should have done: if someone is negotiating, he plays his hand strongly, he is not diffident and does not say, "That won't work; we can't do that." Instead, we should say, "Go for it and you'll often get it." I hope that that can become the slogan of new Labour in power, but it has not worked in this case. If we had coerced the Minister, we might have got more than we did. I am sorry, but I feel that that puts us under duress.
The proposed provision is right in principle; Back Benchers and building societies want it, but we cannot have it because the Prime Minister has opted for felo de se as a system of Government. Owing to the Prime Minister's suicidal inclinations and the junking of so much of the legislative timetable because of his terror and his inability to face up to the defeat that my hairdressing Bill next week would inflict on the Government, we are now being asked to rush through the Building Societies Bill in an unacceptable way. I regret that. The Bill would be better if it contained the two-year provision. It would have been better if we had insisted on that--I am sorry that we did not, and there is still time to do so. Under such duress I would have no alternative but to give in.
Mrs. Maddock:
Would the Minister clarify the position a little? She has given many practical reasons why it would be difficult to accept the amendments to introduce the two-year rule. Will she tell us the view of the Building Societies Association when she discussed the matter with it? Although that society is anxious for the Bill to become an Act, it is concerned about the two-year rule and I wonder if she could give us some information.
Mr. William O'Brien:
I want to firm up a point that I made in an intervention about the Halifax building society and its acceptance of the principle of the two-year rule. As the Minister said, that is an indication of how the principle should be left as a matter for the building societies. We are discussing legislation and we have an opportunity to firm up the principle set by those in the business--building societies, the Building Societies Association--and Members of Parliament. My hon. Friend the Member for Great Grimsby (Mr. Mitchell) has outlined the case without forcing a Division, which is commendable of both him and my hon. Friend the Member for Burnley (Mr. Pike).
We should not waste this opportunity to try to build something into the legislation that will give the assurance that we seek and underline the principle as set out by those in the business. Before we reject outright the amendments, we should look for a compromise whereby
we can underline the principle. If one were to question hon. Members who have listened to and participated in the debate, more of them would say that the Bill should include provisions to firm up the two-year rule than would reject that proposal. Therefore, the Minister should reconsider the matter to see whether a compromise can be reached that will satisfy all parties.
Mr. Peter Bottomley:
I wish to pick up on one point made by my hon. Friend the Member for Bournemouth, West (Mr. Butterfill): the difference between the Halifax building society and most of the others. If the Halifax decided that it did not want to recommend conversion or use its ability to change its procedures to stop the two-year rule, there would be few businesses big enough to make a hostile bid for it. In practice, we would have to rely on the directors putting forward a proposal. That would not be the case with middle-sized and smaller societies.
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