Woolwich vows to fight Bill

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The Independent Online
Woolwich Building Society pledged yesterday to fight for amendments to a controversial new Building Societies Bill, which Angela Knight, the Treasury Minister, said she hoped to introduce to the Commons between late January and early March.

Cross-party support seemed likely after Mike O'Brien, Mrs Knight's counterpart in the Labour Party, welcomed the publication of the Bill, though he said Labour would still like an additional rule to exclude members of less than two years' standing from benefiting from conversion to banks.

Woolwich and Alliance & Leicester, which plan to convert to banks, have failed to persuade Mrs Knight to reinstate their full five-year protection against takeovers, which they will lose under the Bill if they make a bid for another financial institution.

The publication of the Bill left lingering doubts about the timing of the flotations of the two societies, although a third, Northern Rock, said it would proceed as planned. Woolwich said: "We will lobby to ensure that it is suitably amended on its way through Parliament. Had our board known when it took the decision to convert that this was even a possibility, then we might have chosen to convert in a different way."

Alliance & Leicester said: "The new draft Bill addresses some of the anomalies but does not, in our opinion, complete the process, and leaves converting societies with a number of issues of concern in the middle of long and costly conversion processes."

Mrs Knight made one concession to the converting societies by requiring a 75 per cent turnout in any vote on removing the five-year ban on takeovers. This increases the obstacles to a hostile bid. The Bill eliminates the need to set aside special reserves on flotation. Without the Bill, some of the converting societies would need to raise extra capital.

Brian Davis, chairman of the Building Societies Association and chief executive of Nationwide Building Society, urged the politicians to get on with the task of getting the Bill passed.