In the same sort of way, if all our mutual building societies (and insurance companies) were to convert into public companies and pay us all massive windfalls, we would all want to keep one mutual going so that we can still get the best rates on our savings, the lowest rate on mortgages (and the best performances from our insurance policies). The trouble is, which one should we save - yours, mine or the man next door's?
If the decision is left to Michael Hardern, the indefatigable campaigner for demutualisation of building societies, the Nationwide - now the world's biggest building society - will be the next to convert into a bank. He is contesting one of the three places on the Nationwide board that come up for renewal at the annual meeting next month and is expected to stand on a demutualisation platform.
The trouble with Mr Hardern is that for a tireless campaigner committed to forcing more building societies to unlock their windfalls for members, he is remarkably unsuccessful. Last autumn he set his sights on the Bradford & Bingley, the Britannia and the Chelsea. But he missed the deadline for nominations to the Chelsea and also fell short of the 50 valid nominations required, because some of his backers did not have the necessary minimum balance of pounds 100 for the previous two years. He missed the deadline at the Britannia, and made the deadline at the Bradford & Bingley but only 48 of his 70 nominations were valid.
Last year he succeeded in getting the 50 nominations to run for a seat on the Nationwide board. But after changing his mind about the desirability of demutualisation he came bottom of the poll with 334,000 votes compared with an average of 950,000 for the official candidates. All he achieved was to cost the society pounds 1m in extra postage and advertising to persuade members to vote against him.
No vote to demutualise was ever put to members, but by rejecting Mr Hardern members of the Nationwide were rejecting a windfall that Halifax, Alliance & Leicester, Woolwich, Northern Rock, National & Provincial, Cheltenham & Gloucester and Bristol & West members had all approved when asked by their directors.
In a free vote it is quite likely that the members of the Nationwide would also have voted for a pay-out. As Mr Hardern himself perceptively remarked after the vote, perhaps the members wanted him as a director less than they wanted a windfall from the society.
The trouble for members is that without voting for Mr Hardern there is no way they will ever get a straight vote on whether they want a windfall now (and the choice of paying for it in future through dearer mortgages and lower savings rates, or moving their business to one of the remaining mutuals). There are two other outside candidates, Andrew Muir, who apparently believes the society could pay the 4.5 million members a pounds 500 windfall each without converting to a bank, and a third so far unnamed candidate. On its past record, the society seems to have little to worry about.Reuse content