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Coalition urged to keep promise to promote mutuals

Treasury select committee member Andy Love says the Government’s new less onerous regulations for credit unions and co-operatives are welcome but do not meet its promise to promote mutuals.

Last week, the Treasury announced that from January 8, 2012, rules on taking on new members, charging interest on deposits and mergers and takeovers will be relaxed for mutuals. They will also be able to choose their own accounting year-ends and will not be required to internally audit interim accounts. The flexibility over accounting year-ends already applies to plc firms.

The May 2010 coalition agreement says the Government will “foster diversity and promote mutuals”. The Treasury says the move is an important part of that commitment.

Labour and Co-operative MP Love says: “We are 18 months into this Government, so it has taken an inordinately long time for this to trundle through. It does not show the urgency we would expect, considering the coalition’s commitment to promote mutuals.”

Association of British Credit Unions chief executive Mark Lyonette says: “We are delighted that reforms have been agreed. They free up the sector to compete on a more level playing field.”

Love says the Government should go further than creating a “more level” playing field. He says: “I would urge the Government to continue opening up the marketplace for credit unions in order that they can provide real competition to building societies, banks and other financial institutions.”

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There is one comment at the moment, we would love to hear your opinion too.

  1. How about the coalition honouring the Conservatives’ pre-election promise to simplify pensions, to undo all the damage done by Labour during its 13 years in office and to “reignite the UK savings culture”? If that isn’t just another glib and shallow pre-election soundbite, the I’m hard pressed to think of a better example.

    It’s all the more depressing to think that undoing nearly everything that’s now wrong with the pensions framework could be achieved at no cost to the Exchequer. Restore Contributions Insurance (WoP) ~ zero cost. Restore PTA (subject to a minimum level of ongoing cont’s to retirement benefits) ~ virtually zero cost. Address the annuity trap ~ zero cost. Simplify maximum input limits ~ zero cost.

    As an alternative, NEST is just a stupid and unwanted imposition on businesses.

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