Addressing the Building Societies Association annual conference in Birmingham, Mr Nelson said the Government was firmly behind the continuing existence of a healthy mutual building society sector, but ruled out any changes to legislation to protect societies from unsolicited approaches. Mr Nelson said the second part of a wide- ranging review of the legislation, the draft of which will appear later this year, will include measures requiring societies to put bid approaches to members.
He said that Abbey National's decision to announce its bid offer to National & Provincial via an unprecedented public statement was partly caused by "frustration that these proposals are not in place". As far as the Abbey situation was concerned, he said, "I am not too concerned by that; the members should know about an approach."
Mike Jackson, chief executive of the Birmingham Midshires, said: "We are not reassured. Its intellectual flannel. Its opening the door to the shotguns for a duckshoot. If the Government truly believes in a healthy building society sector, it is going to have to introduce legislation to protect it."
Geoff Lister, chief executive of the Bradford & Bingley, was no less damning."Its all very well Mr Nelson saying he wants societies to have a successful future," he said. "Without direct Government support, the prospect of a duckshoot remains." Mr Nelson said the Government did not want to see a massacre of societies at the hands of banks."This is not in the interests of savers, and the flows in capital could be very destabilising."
Mr Nelson regretted the unexpected absence of Alistair Darling, Labour's spokesman on financial affairs, whose father was ill. On the other hand, said the Minister, nothing the impressionist Rory Bremner said at the post-dinner entertainment the night before "could be as funny as Alistair Darling".Reuse content