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As there are only 10 minutes before the Adjournment debate, I speak with a sense of foreboding. It would be inappropriate to ask the House to agree to a Second Reading in such a short time. However, I hope to make enough points to suggest to my hon. Friend the Economic Secretary to the Treasury and to other hon. Members the importance of realising that the status quo on building societies is unacceptable. As someone who was elected to this place not only as a Labour but a Co-operative Member, I have a strong sense of the contribution that co-operation can make to an effective economy.
I want significant obstacles to be placed in the way of those--be they boards of directors or members--who want to asset strip building societies. I know that the Government have already tried. Indeed, if there had been a 3 ft fence over which carpetbaggers had to jump when the Government came into office, it would now be somewhat higher--perhaps a 5 ft fence. That is because the Government amended the regulations to require 500 members of a society to call for a resolution of transfer instead of 50.
I appreciate that effort. It showed that the Government were prepared to take action to support the principle of mutuality. However, while that obstacle was being fashioned, a type of 5 ft-fence jumper was evolving. The rising use of the internet means that, in 2000, it is easier to obtain 500 signatures than it was to get 50 in 1995. Although that tool was not fashioned by the carpetbaggers, it has been of considerable use to them. In practice, the Government's efforts to try to protect building societies have proved to be nugatory.
The Bill proposes to construct an even higher fence--a 10 ft fence. However, it is not my intention to prevent a transfer of mutuals to the shareholding sector. We cannot do that; it would be undemocratic. None the less, it is right to make that more difficult. All democracies have a high threshold for fundamental changes to their constitution. In that, the building society sector is no exception.
I draw the attention of hon. Members especially to clause 3. It proposes a turnout of 50 per cent. to try to ensure the right of borrowers to have a full say in the process of transfer. At present, borrowers are often neglected in the rush of savers to get their golden handout. Indeed, as savers currently outnumber borrowers by seven to one, the carpetbaggers need activate only savers in order to pass a transfer resolution. Those who stand to lose most--the borrowers--are often unaware of their rights and they vote in numbers too few to make a real difference.
If the Bill were passed, boards of directors would have to show borrowers, as well as savers, the virtues of their decision. I agree that that might sometimes be difficult, because a borrower would be much less likely to vote for a handout, if they suspected that they would pay dearly for it in the future through higher interest rates over a protracted period.
I have said that the status quo is not acceptable. I urge the Government to change it more fundamentally than they have been willing to do heretofore. Last year, the Britannia building society lost £3 million when one of its members called a ballot on transfer only to call it off at the last minute. Those resources could have gone to providing a local financial service to a community or towards ensuring a continuation of the Britannia's competitive rates for savings and loans.
Again only last year, the Portman building society removed some of its members who had joined entirely with a view to scuppering its mutual status. If my hon. Friend the Economic Secretary has a minute or two at the end of my speech or can do so in writing, I will be grateful if she will say whether it is true that the Treasury was mad at the Portman building society. From my perspective, I compare the action of the Portman to the action of the Labour party when it removed the Militant Tendency. It is a democratic principle that those who sign up to an organisation, who say that they accept its objectives, but who then seek to change it fundamentally or destroy it, can be legitimately excluded from deciding the future of that organisation.
Mr. John Butterfill (Bournemouth, West): Does the hon. Gentleman agree that it is a national disgrace and contrary to our national interest that so many mutuals--both building societies and insurance companies--are under attack? Is it not the Government's duty to do more to protect them and to support the Bill that he is introducing today?
Mr. McWalter: I am grateful to the hon. Gentleman. The Bill is about mutuality, democracy and the inadequacy of the status quo. It is not about imposing a single economic model on the rest of the financial sector. Our financial sector is strong because of the great pluralism of its structure, and building societies play a particularly important role in local communities.
A recent article in The Times suggested that building societies offer a 0.54 per cent. advantage to their savers and borrowers. I know that that does not sound a lot, but when one is dealing with very large loans or savings, the figure is significant. It results from the fact that a resource has been built up over time and has allowed people to obtain a very good deal from the building society sector.
Building societies also help to deliver the Government's inclusiveness agenda. Branches that provide a local financial service are much less likely to shut than those of the banks and the ex-building societies. Building societies were in the forefront of seeking to curb the desire of the banks to charge astronomical amounts for the use of automated teller machines, and their charges are modest. It is no surprise that a recent study by the university of Newcastle found that building societies made an important contribution to the Government's agenda that seeks to tackle social exclusion.
The building society sector is under attack. Resources are being applied to aims that do not include the welfare of its members. Some 69 building societies are left in this country and every one of them is, in various ways, being looked at by people in whose vocabulary "mutuality" is the last word.
I do not wish to be a killjoy. I have often experienced periods when, if somebody offered me £1,000 because I had got lucky, I would have been very grateful for it. However, such handouts have a cost. Adam Smith once said:
There is much in-work poverty in my constituency, where a semi-detached house costs £150,000. The Government are rightly trying to hold down interest rates and building societies are rightly an aid to the process of trying to keep in-work poverty and the poverty that results from extremely high house prices in check. I urge the Government to give further consideration to supporting my Bill.
Mr. Owen Paterson (North Shropshire): I thank you, Mr. Deputy Speaker, and through you, Madam Speaker and her staff, for picking my name out of the hat in the ballot. I thank the Under-Secretary of State for Health, the hon. Member for Birmingham, Edgbaston (Ms Stuart) for attending what may be a lonely vigil this afternoon.
The subject of this debate is the severe problems and lack of capacity which were brought to my attention in January by my constituent Dr. Ian Rummens of Oswestry, who is secretary of the Shropshire local medical committee. I also wish to discuss the difficulties that I have had in bringing the matter to the attention of the Secretary of State through the medium of Health questions.
Dr. Rummens wrote to me in January, and sent me a copy of a letter he had written to the Shropshire health authority. He also sent copies to all the Shropshire Members of Parliament and even the Prime Minister. I shall give a flavour of the problem by quoting from that letter, in which Dr. Rummens says,
I therefore set about putting together a dossier with Dr. Rummens's aid. I have a substantial number of letters, although there is not time to go through them today. To give their flavour, I shall quote from one from a doctor in Bishop's Castle, which gives a sense of the problems faced by GPs in that period. He states:
One explanation could have been the incidence of flu, about which I went back to the local medical committee. The secretary told me that the incidence peaked in the west midlands at 230 per 100,000 population for a short period only, whereas normal seasonal activity is defined as between 200 and 400 per 100,000, and an epidemic as greater than 400 per 100,000. He also confirmed:
One solution is spare capacity in the private sector. BUPA, the second largest private health care provider, was recently quoted as having spare capacity for 10,000 to 20,000 extra patients a year. Overall, the private sector could take up to 200,000 extra cases annually. Independent providers are willing to co-operate closely with the Government in any area where NHS capacity is currently inadequate and they have spare capacity.
It is worrying that increasing numbers of people are being forced to pay twice--first through their taxes and secondly by direct payment. On 19 March, The Observer reported that BUPA carried out 25,000 operations that were paid for directly by patients who did not have insurance. The incidence of that has increased by 30 per cent. in two years. That has been brought home to me in human terms in one or two cases. A typical case is that of Mrs. Hough of Whixall--a meritorious case which I should have thought would take priority. She looks after her husband, who has had two strokes, and she had two bad hips--so bad that last January it was agreed that both should be operated on through the NHS. Unfortunately, one of the hips collapsed, and she was forced to have it operated on privately in June, but she was promised at that time that the second operation would be done on the NHS. Here we are in May, and the other hip is so painful that although I wrote to the Minister of State, Department of Health, the hon. Member for Southampton, Itchen (Mr. Denham), on 1 May, Mrs. Hough will be forced to go private and pay for the operation again on 8 June.
The obsession with waiting lists causes distortion. A case such as Mrs. Hough's should take priority, as she is doing society a great service by looking after her very ill husband. I raised the question again on 2 May, and mentioned the heart attack patients and the fact that at times no beds were free. I was surprised when the Secretary of State savaged me and said: