Speaking at today’s annual Building Societies Association lunch in London Mark Hoban MP, financial secretary to the Treasury, said he was “acutely aware” of regulatory change and economic challenges facing mutuals but said the government was committed to helping the sector get people into homeownership.
He said: “We are determined that creditworthy borrowers looking to buy a home or move should have access to affordable mortgages and that goes hand in hand with ensuring we increase the number of homes built across the country.
“We want a framework for the sector that means no penalties for mutuality but no special favours either. As we emerge from the financial crisis the mutual sector has a huge role to play.”
Hoban also said building societies must not miss the opportunity to change the structure of financial services in Britain.
He added: “We will look at ways to enhance competition in financial services so that you can effectively challenge the bigger companies.
“We will ensure that regulation in the financial sector protects fair and open conditions between all of its participants. But there is only so much that we can do.
“The sector itself must set a vision for its future. Whilst there are many immediate challenges to navigate your way through it’s vital that you use this time to lay the foundations for the future.”
He made no new announcements on the number of homes being built in the UK.
Meanwhile BSA chairman Peter Griffiths, also the chief executive of Principality, claimed “mutuals might be the answer” to anti-capitalist protestors’ disillusionment with corporate greed.
He said: “This is a moment in time opportunity [for building societies] and we should not let it slip. It is time to make capitalism nicer.”
He added that more mutuals must embrace technology and “modernity” if they were to achieve this objective.
He also urged BSA members not to “shrink their way to success” by holding back from lending.
He said: “Given the pressures that we face the temptation is to hunker down, hibernate and wait for something that feels like a nicer spring but for my part, shrinking your way to success isn’t a particularly good place to be.
“It doesn’t help the sector’s short-term strategy, it doesn’t help diversity and it certainly doesn’t help the consumer.”
