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Probe into cost of demutualisation

The Parliamentary all-party group for building societies and financial mutuals is to conduct an inquiry into the true cost of demutualisation.

The group will carry out three hearings this month, taking evidence from people inside and outside the mut- ual sector to decide if customers of demutualised companies are now paying back windfalls through higher costs and charges.

The inquiry will look at questions such as whether former mutuals are better than mutuals at providing financial services, what effect demutualisation has had on the rem-aining mutual sector and whether it has affected consumer choice.

A full summary will be published early next year, with the first meeting taking place next week. Witnesses who have so far agreed to give evidence include Cazalet Consulting principal Ned Cazalet as well as organisations such as Which?, the Nottingham Business School and the BSA. The group is calling for written evidence from all parties.

The inquiry comes 16 years after Abbey National demutualised, leading to many in the industry following suit, and ahead of Standard Life’s demutualisation vote next year.

Group chairman Adrian Bailey says: “The group carried out a very successful inquiry last year into the extent to which mutual businesses contribute to the economy and society and we felt that consumers have the right to know how much of their windfalls have been clawed back through higher charges.”

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