Baroness Blake of Leeds (Lab)

I start by thanking noble Lords for their attention on this important matter. As I stated in my opening speech—I hope this gives some reassurance to the noble Baroness, Lady Kramer—the Government are committed to supporting the mutual sector, which we see as a key component in delivering inclusive growth across the country. I refer noble Members to the Mansion House speech delivered by the Chancellor of the Exchequer just last week, when she announced multiple new measures to unlock the potential of the mutuals sector. I do not need to go through all the specific points that were made then, but that speech amounted to a very strong commitment and recognition of just how important their contribution is and how much more could be achieved. I specifically refer to the comments that the noble Baroness, Lady Kramer, made about the change to one director being allowed to sign off the balance sheet. I repeat that the amendment will not impact on the reliability and accountability of the process. The full board of the building society will still be required to approve the annual report and accounts, and the director’s responsibility is not enhanced by this change. Additionally, all building societies are public interest entities and are regulated by both the Prudential Regulation Authority and the Financial Conduct Authority, meaning that building societies are required to comply with the regulatory obligations of these entities, ensuring that their accounts are appropriately checked and scrutinised. In addition, Section 60(11) and (13) of the 1986 Act will specify, after the amendment of the SI, that all directors must step down after three years, regardless of age, although they may be re-elected. Therefore, wider members will still be able to scrutinise the performance of all directors. There is really no justification for preserving age restrictions for building society directors when these have indeed been removed for companies. I thank the noble Lord, Lord Altrincham, for his comments and support for the proposals that are being considered today. It is our strong belief that these will update certain outdated and unnecessary provisions in the Building Societies Act 1986 and will therefore ensure that building societies can benefit from a legislative regime that is fit for the 21st century. I am sure that noble Lords will join me in supporting these amendments.