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Time for a minister for mutuals?: Labour sets out manifesto agenda

Shadow Treasury financial secretary Chris Leslie says Labour is looking at ways to encourage new building societies and mutuals in its next manifesto.

Speaking at a fringe event at the Labour party conference in Brighton today, Leslie called on mutuals to suggest to the party ideas for reform to boost new entrants.

He said: “We have an appetite for ideas for our manifesto and we need to sit down and think about how we could start a mutual from scratch instead of just getting existing ones to move to the next level. How do we get people to think that is a possibility?

”Where is the assistance going to come from to hold their hands through that particular process? It isn’t like the 19th or 20th century when there was much more of a ground swell of mutual entrepreneurialism. We need to rediscover it somehow.

“We have a strong commitment to mutuality and we need the sector to point us in the right direction. If it is a minister for mutuals then we can consider it, we could have that sort of leadership in Government, or is it about more practical steps. I have certainly got more than an open mind on these questions and we have a thirst in wanting to help the sector.”

Leslie also strongly backed existing building societies and mutuals having better access to capital. Mutuals can use capital from retained profits but as a member organisation cannot seek capital injections from equity shareholders in the same way as limited companies.

Leslie said: “We have to find ways so mutuals can be more flexible in getting access to capital. It’s been crucial to the private sector but the very nature and design of mutuals has meant it has gone in a contorted direction. I’ve been very interested in how building societies have been approaching the question of access to capital such as interest-bearing shares and various devices or instruments to do it.”

In July, Conservative peer Lord Naseby launched a private members’ bill which would allow mutuals to issue fixed term shares in a bid to improve their access to finance and help them grow.

Click here for all the latest financial services stories from the Labour conference in Brighton

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