Labour and Co-operative MP Andy Love welcomed and congratulated the Treasury Select Committee on producing the hard-hitting report on competition and choice in the banking sector. The report was needed after the betrayal of the Tory-led Government’s Coalition promise to promote diversity in the financial sector by supporting mutuals and co-ops as real alternatives to the mainstream banking sector.

Witnesses to the Committee said that they “had yet to see any actions to foster diversity and promote mutuals, and considered many aspects of the regulatory approach were biased against them.”

“All market participants should be consulted at all stages on the basis that a level playing field exists for mutuals compared to other institutions based on the PLC model,” the Committee recommended.

The report reveals the failure of the Government to meet its pledges of radical reform and support for the mutual sector, which has left the financial sector less diverse, less competitive, and at risk of repeating the mistakes that led to the banking crisis.

The Treasury Select Committee, highlighted that the failure to re-mutualise Northern Rock is a prime example of the vacuous nature of the Coalition promises to support mutuals. As a Co-operative MP, Andy Love has joined the Co-operative Party’s The Feeling’s Mutual campaign for the re-mutualisation of Northern Rock, which was termed “a big test of the Coalition’s commitment to mutuals.”

The report urged the Tory-led Government to “honour their commitment by giving equal consideration to mutual options when considering the disposal of Northern Rock.”
Andy said: “I am pleased the Committee has pressed UKFI to bring in experts to look at how Northern Rock could be returned to the people. Not only would this deliver a good deal for taxpayers, it would also provide much needed diversity and a competitive spur in the financial services sector.

“This report confirms the suspicions that many had when the Coalition pledged to support the mutuals sector,” he added. “Co-operators in the movement were concerned that the pledges only amounted to empty posturing, and that the Government were merely offering up promises that they were never intending to fulfil. This has now been exposed by the publication of the ‘Competition and choice’ report by the Treasury Select Committee.”

Click here to read the full report.