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MPs to debate building societies’ FSCS levies

MPs are set to debate the levies imposed on building societies in Parliament tomorrow.

The Westminster Hall debate, to be introduced by Ann Cryer MP
for Keighley, follows a Parliamentary Early Day Motion that gained the support of 159 MPs.

Building societies have reported profits slashed by as much as 200 per cent as a result of having to pay increased FSCS levies as deposit-taking institutions in the wake of the failures of Bradford & Bingley, London Scottish Bank and the failed Icelandic banks.

The Building Societies Association is backing the debate. It says building societies are paying too much of the cost of compensation for failed banks.

BSA director-general Adrian Coles says: “Building societies feel very strongly that they are footing a disproportionately high share of the bill for the failed banks. Societies have higher levels of retail funding than banks and are not profit maximising, so the levies hit them harder than their PLC counterparts. This debate, along with the Early Day Motion Ann has tabled, shows that many MPs feel the same.”

Cryer says: “It’s hugely unfair that building societies are paying for bank failures. As mutual, member-owned organisations, any additional costs, such as the FSCS levies, ultimately hurt societies’ members – their savers and borrowers.

“My Early Day Motion has gained huge support so far and I hope this debate persuades the Government that FSCS levies need to be modified to better reflect the relative risk profiles of building societies and banks.”

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