Our mutual friends have lost the plot ... let's find out why
We need a full inquiry into the goings-on at the Co-op Bank
Saturday 09 November 2013
The mutual concept is all but dead in this country. There you go, I've written it. The Co-op Bank, one of the country's two "super-mutuals", is controlled by hedge funds and bondholders, the credit union sector still continues to haemorrhage members with eight folding this year so far, and many building societies are limping along at an acute competitive disadvantage with the banks.
In 2008 when the banking system blew apart there was lots of talk about how we needed to get back to mutuality and that now was the time for co-operative ownership of financial institutions. All fine words but what followed was that the drying-up of the credit markets led to a collapse in the finances of several medium-sized building societies. What's more, the recapitalisation efforts from the central banks has understandably been focused on the institutions with the most customers, the banks, while building societies have had to fight for scraps. As for the country's biggest mutual Nationwide, this is effectively a bank by another name. It behaves like a bank, markets itself like a bank, and is as ruthless in many of its dealings as a bank. In essence, to grow and flourish the Nationwide has had to morph into a bank.
The failure of the Co-op was one of over-ambition – much like Royal Bank of Scotland. The management thought that the financial crisis was their time, their moment. It wasn't and, actually restrained by mutuality, the Co-op was very poorly equipped to drive itself forward not just in terms of refinances but also the capability of its top management. And it also bought a complete basket case in the Britannia building society. We need a full inquiry into what has gone on at the Co-op.
Steve Webb's report on his pet project, the defined ambition pension, got a lot of attention last week, perhaps too much. Costing a huge sum no doubt, and taking up thousands of man hours of officials' time, his big idea is to reduce the generosity of the two million final salary pension plans which still operate in the private sector so to encourage employers to keep them open. Particularly irksome for savers is the plan to allow companies to slash the benefits paid to surviving spouses. Fortunately, Professor Webb's wheeze won't be retrospective but is designed to keep the final-salary patient alive a little longer. For those employers which decide this isn't enough and wish to move towards closure of their final salary schemes then there is the promise that alternatives will be beefed up to give staff more certainty about where their retirement savings are heading. This is all highly intelligent stuff and frankly more realistic than I first feared when Professor Webb first mooted 'defined ambition' over a year ago. However, as the minister has said this should have all been done ten years ago if final salary schemes in the private sector were to be saved and I agree it's too late. The bottom line is that firms look at these schemes as an almost unquantifiable risk on their balance sheet and a risk many of their competitors got rid of years ago. Perhaps like mutuality the day of the final salary pension is at an end and all this is an attempt to do is to reanimate a corpse.
- 2 Russian girl takes her own life after parents find pornography on her computer
- 4 Ball pool for adults opens in London
- 5 Amal Clooney gives excellent response to fashion question at European Court of Human Rights
9 reasons Greece's experiment with the radical left is doomed to failure
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
Greece elections: Syriza and EU on collision course after election win for left-wing party
Have we reached 'peak food'? Shortages loom as global production rates slow
British Muslim school children suffering a backlash of abuse following Paris attacks
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
iJobs Money & Business
£13000 per annum: Recruitment Genius: This Pension Specialist was established ...
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...
Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...
Day In a Page
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village