THE 170-strong Parliamentary All-Party Group for Building Societies and Financial Mutuals is to conduct a short inquiry into the true cost of demutualisation.
The Group will carry out three hearings in November, during which evidence will be taken from witnesses from within, and outside, the mutual sector to determine whether customers of previously demutualised companies are now paying back their windfalls through higher costs and charges.
The Group is now calling for written evidence to be submitted by interested parties.
The terms of reference are:
1) Are former mutuals better than remaining mutuals at providing financial services?
2) Is there any evidence to suggest that demutualisation has improved the performance of former societies?
3) What effect has demutualisation had on the remaining mutual sector?
4) How has demutualisation affected consumer choice?
5) Did the level of windfalls reflect the economic value of members' interests?
6) Have consumers benefitted from demutualisation?
It is now 16 years since Abbey National demutualised and there will also be a crucial vote on demutualisation at Standard Life next year.
Labour/Co-op MP Adrian Bailey, who chairs the Group, commented: "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 a right to know how much of their windfalls have been clawed back through higher charges."
A full summary will be published early next year and the inquiry will hold its first session this week.
Among those who will give evidence are financial commentator Ned Cazalet, Prof Nigel Waite from Nottingham Business School and representatives from the Association of Mutual Insurers, the Building Societies Association and Which?
The inquiry sessions will be open to the public and will be held on November 15, 22 and 29 at the House of Commons. Organisations wishing to submit evidence should contact Matthew Ball, Secretary to the Group, on 020 7367 4156 or email: Mr Ball by November 29.