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10.50 am

The Economic Secretary to the Treasury (Mrs. Helen Liddell): First, I join hon. Members on both sides of the House in congratulating my hon. Friend the Member for Edmonton (Mr. Love) on securing the debate, and in paying tribute to his excellent work as chairman of the all-party building societies group. He has pursued the interests of building societies with great vigour, and I have regular contact with him.

By and large, we have had a measured and sensible debate about an issue of great public interest. I take no lessons from anyone about mutuality: I am unique in the House, as the only mutual bank is in my constituency. Airdrie savings bank, which I joined at the age of seven, is the last remaining mutual bank. The silver savings bank that I was given at the age of seven still sits on my desk. It still has money in it, because they will not take it out for me. So I take no lectures about mutuality. Like many hon. Members from working-class backgrounds, I know that the shilling-a-week man was a lifeline for many poorer households, and I have a great affection for friendly societies.

It is inevitable that much of the debate has been about building societies, given the events of the past 24 hours and the fact that we are looking forward to the result of the ballot on the Nationwide building society. Let me pick up a point made by the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale). I do not have a crystal ball, so I do not know what will happen in respect of the Nationwide, but I emphasise that the decision will not be taken by Parliament or by the Government: it will be taken by the members of the society. That is the strength of mutuality. There is a very fine line between the interests of the members and the protection of the board.

The boards of building societies look after themselves rather well, and it is not out of line to allow the membership to challenge them. For example, board members of the Nationwide recently awarded themselves salary increases ranging from 26 per cent. to 49 per cent. Nor are they exactly on the minimum wage. The lowest salary is £250,000. Frankly, we must keep the issue in perspective. The boards want protection, but they must also respond to the anxieties of their membership.

Many hon. Members have suggested that the Government should intervene to protect societies from demutualisation. My hon. Friend the Member for Harrow, East (Mr. McNulty) made an extremely enlightening speech. I hope that many have taken note of the activities of some members in pushing for demutualisation of building societies.

However, the Government can do only so much to protect building societies. Frankly, building societies themselves have some responsibility for making the case

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for mutuality--a point that I have made to them repeatedly. Last November, when I raised the turnout threshold to 50 per cent., I stressed that every building society board that has recommended against conversion has been successful. I hope that that is repeated tomorrow, but the building societies must make sure that they take on board the requirement to provide the maximum service to their membership.

Before the hon. Member for Twickenham (Dr. Cable) wandered off--it is a good job hon. Members do not have to stamp time cards--he claimed that the Government had been nobbled by the banks over the 50 per cent. threshold. That is absolute and arrant nonsense. One reason for taking the decision to move to a 50 per cent. threshold was to discourage carpetbaggers.

I could have gone further and raised the threshold to 75 per cent., but the average turnout in respect of the Nationwide and other conversions has been 75 per cent. On the most recent occasion, 97 per cent. of the Nationwide members who voted were against conversion. If the threshold were 75 per cent., 74 per cent. of members voted and they were all in favour of conversion, the society would not be able to convert. That is not democracy. I realise that we have to do what we can to make the case for mutuality, but we must not do it by destroying mutuality.

A number of hon. Members have referred to the number of backers that are required before there can be a challenge. Let us get that into perspective. It took Michael Hardern two years to get the 50 backers he needed for the Nationwide elections last year. The key element has to be selling the case for mutuality.

The 1997 Act was supported by Labour in opposition, because we recognised that building societies must be given the opportunity to provide an even better service to their members. It gave building societies more power, greater supervision and more accountability.

There must be a careful balance. Of course there are carpetbaggers and rather eccentric people seeking to be directors of building societies. Let me make it clear that it is a matter for the board to act if it considers that any member applying for election is not fit to do so.

If the chairman of a building society board considers that a nominated candidate does not have the appropriate qualities to be a member of the board, he is fully entitled to inform members of his views. It is then for members to decide who they want to trust with the safekeeping of their savings, and the direction that they want the society to take. If an inappropriate person is elected, the Building Societies Commission can consider whether such a person is fit and proper to be a director of a building society.

Building societies are fully entitled to take such measures as the legislation or their rules allow to restrict account opening and preserve services to bona fide members, but there are dangers in that. We spoke about social exclusion. The hon. Member for Twickenham suggested, as if it were a brand new idea, that the social exclusion unit should look at friendly societies, but it has been doing so since last May. The friendly societies and the concept of mutuality, enlarging the access to financial services for low income earners, will continue to be a critical part of Government policy. If we are to move people from welfare to work, we must give them access to financial services, as that is the ladder out of social exclusion and poverty.

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Friendly societies are less well known than building societies, but they have a long and proud history. As I said, the shilling-a-week man continues to be important in the community that I represent. Friendly societies are regarded as social, friendly and honest. As the hon. Member for Ryedale (Mr. Greenway) said, they are trusted. It is about relationships, and they were built on the principles of self-help and mutual support. They are important institutions, and the movement is healthy. Total funds are more than £10 billion, and membership is estimated at more than 5 million. I am encouraged by the enthusiasm shown by the friendly society movement to play a part in welfare reform.

Mr. Ken Purchase (Wolverhampton, North-East): Given the massive mis-selling of pensions that there has been, will my hon. Friend consider whether some companies are fit to be trusted to deal in the upcoming individual savings accounts? Will she give a leg up to mutuals on that?

Mrs. Liddell: I have already made it clear that we shall examine the performance of companies, mutual or not, on pensions mis-selling when we consider ISAs and stakeholder pensions. My hon. Friend the Minister for Welfare Reform is doing valuable work with the friendly society movement.

Credit unions are often the unsung heroes of the mutual sector. The Government are determined to give a new future to credit unions and co-operatives. They are at the heart of the third way--they are rooted in our history, but they hold the future for many people.

I commend the debate and look forward to the mutual sector increasing in strength. The Government will do everything that we can to ensure that.

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Sellafield and Dounreay (Discharges)

11 am

Ms Roseanna Cunningham (Perth): I hope that hon. Members will bear with me this morning. I have a lot to get through and others will want to contribute to the debate.

Today's debate is opportune, because today and tomorrow Ospar--the Oslo and Paris convention on the protection of the North sea and the north-east Atlantic--is meeting in Sintra, Portugal. Ministers from 16 member countries will be meeting to hammer out solutions on oil rig disposal, chemical pollution in the sea and radioactive discharges into the marine environment.

The Deputy Prime Minister and the Minister for the Environment are representing the UK in Portugal. They have an awkward task. All the Nordic countries oppose the UK's stance on radioactive discharges into the marine environment. The Irish Government consider such discharges to be objectionable and unacceptable. During a visit to Downing street a few weeks ago, the Norwegian Prime Minister registered his protest. Nobody disputes the fact that there is international concern.

Mr. Tam Dalyell (Linlithgow): The Norwegians are also concerned about carbon in the atmosphere. The other side of the coin is more coal burning and fossil-fuel-related power stations.

Ms Cunningham: I understand the hon. Gentleman's long-term interest in the issue, but he cannot argue that the alternative to discharging radioactive waste into the marine environment is necessarily coal burning. Those two do not go together.

Sir Robert Smith (West Aberdeenshire and Kincardine): When she replies, perhaps the Minister will clarify what processes require radioactive discharge into the marine environment. It may not be necessary to discharge into the marine environment to achieve the goals of the hon. Member for Linlithgow (Mr. Dalyell).

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