HM Treasury News Release
139/97                                       13 November 1997
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                PROMOTE MUTUALITY: HELEN LIDDELL
                                
    Helen Liddell calls on building societies to show their
                           commitment
                                
Building societies must seize the challenge and start
promoting mutuality, Economic Secretary Helen Liddell said
today.

Speaking at the Building Societies Annual Lunch Mrs Liddell
told societies that they were effective and efficient
organisations which should have the confidence to put forward
the case for mutuality to their members and the public more
widely. She said:

     "Mutuality does have a future. Millions in the country do
     believe in it. And it is worth fighting for. But you have
     to be in the front line.

     "The more people who know and understand the benefits of
     mutuality, the less likely they are to be seduced by the
     arguments for conversion or takeover."

The Minister announced that the threshold on turnouts for
conversions will be increased from 20 to 50 per cent. This
will bring it into line with the threshold for takeover votes.

Mrs Liddell said it was now time to draw a line under the 1997
Building Societies Act and look to the future. The third and
final Commencement Order was made earlier this month and the
Act is now fully in place.

She said:

     "This new Act has given you the ability to compete freely
     in offering the services which your members demand. It
     sweeps away the restrictions on commercial freedom that
     had been holding back development, and which had
     artificially disadvantaged societies compared to banks
     and other providers of financial services.

     "It removed the quality asset threshold, so that there is
     no longer a distinction between the powers of smaller and
     larger societies.

     "So the challenge for societies is to make the most of
     these new powers, combined with the unique benefits that
     their mutual status brings, to compete even more
     efficiently in the market place."



NOTES TO EDITORS

1.   Media copies of the Economic Secretary's speech are
available from the Treasury Press Office on 0171 270 5185.

2.   Non-media copies are available from the Treasury Public
Enquiry Unit on 0171 270 4558.

3.   If you have access to the Internet, you can find this
news release at http://www.hm-treasury.gov.uk. Material on
other Treasury matters can also be found at this address.