Fact!
The consumer association found that the 5 largest building societies had at
least a 0.7% interest rate margin over the 5 converting societies. 0.7% may
not sound a lot but on a £50,000 mortgage it represents an extra £350
a year, every year if the mortgage is with a bank all because shareholders have
to be paid a dividend! Similarly savers achieve a better rate with building
societies than with banks.
No place like home
We all need a home, it is the bedrock of our society; we need to keep mortgages
as low as possible. They are already a very heavy burden for many especially
in the early years. If banks are allowed to take over from building societies
it would get worse.
Social Housing
Housing Associations borrow money to build new housing schemes. The more expensive
the cost of borrowing the higher the rent charged and this impacts heavily on
tenants. There is far more incentive to seek work if the rent is affordable'.
One building society after converting to a bank closed down it's entire department
dealing with housing associations because there was not enough £Profit
in it for them.
Mutuals were set up as a means by which people in communities could help each other (particularly as the banks had failed them). Mutuals have the advantage of being locally based and able to respond to local conditions. With the advent of the welfare state the need for mutuals became less obvious; but we are aware that all the political parties now seem to believe that the welfare state has to be reformed. It seems almost certain that there will be a role for mutuals in the future to help provide a safety net for the disadvantaged; the extent of this role will depend on who is in government and when.
However if the mutual movement is destroyed by conversions and takeovers we will only have to reinvent it and this will take time and resources which we may not have.
Birmingham Midshires has a proud tradition of self help dating back to the 1840s.
The Royal bank of Scotland bid of
£630 million and the Halifax potential offer of £780 million both
severely undervalue Midshires whose value is well over £1 000 million.
Would you sell your house for less than it is worth given the choice. You have
the right to say NO!
The chief executive of Halifax Mike Blackburn admitted that he was not interested
in any acquisition that did not add value to Halifax shares. They are merely
a carpetbagger albeit on a larger scale.
a) Customer Care; Building societies
are customer orientated. When the Woolwich converted 25% of the group's senior
managers left during and following the conversion
process. The chief executive of the Woolwich John Stewart said "A building
society culture is wonderful in terms of customer care , but it isn't particularly
good at identifying where the value is in the business. We need a different
type of person for the future."
b) Jobs; Whatever predator takes over Midshires jobs will either go immediately or people who leave will not be replaced. This impacts heavily for instance on school leavers some of whom would have expected to find work with their local building society. Halifax will merely slash and burn faster than Royal bank. Do you know of any takeover where downsizing and redundancies did not follow?
c) Local branches; takeovers mean local branches will disappear which means one more empty building in the town centre. A lot of banking is increasingly centralised with call centres operating from other parts of the country (which have been compared to the dark mills of old). Banks are switching to operating over the telephone or the Internet rather than from local branches. Again in the name of £Profit.
d) You probably know of many more reasons why Birmingham Midshires should remain a building society........
Why? Why? Why?!
Why give all this up for a one-off windfall. Worth a holiday or new hi-fi system but destroying a proud tradition for ever. What sort of legacy is this for our children and children's children. Greed is not good!
Please help Birmingham Midshires remain a building society.
Bob Goodall