BSA urges Government to promote competition and diversity in financial services, and help savers and borrowers

BSA urges Government to promote competition and diversity in financial services, and help savers and borrowers

BSA urges Government to promote competition and diversity in financial services, and help savers and borrowers

Ahead of the Chancellor’s Budget Report on 23 March, the Building Societies Association (BSA) is calling on the Government to take action to assist savers and borrowers and promote competitive and equitable financial markets.

Adrian Coles, Director-General of the BSA, said:

ISAs

“The Government’s commitment to ISAs is welcome, however we believe that the regime could be further improved by permitting transfers from stocks and shares ISAs to the cash product. This would provide more product flexibility for savers and represent a consistency of approach.”

Children’s savings

“The introduction of the Junior ISA will go some way in filling the gap left by the abolition of the Child Trust Fund and mutuals are well placed to offer such accounts. We believe the product should be kept as simple as possible and we encourage HM Treasury to be flexible on the launch date to ensure there is a wide range of providers in place.

“Children’s savings products help promote a savings habit among children and the BSA also asks the Government to consider increasing the £100 tax free interest limit on all children’s savings accounts to raise it in line with the effect of inflation.”

Support for struggling homeowners and Stamp Duty

“The Government’s commitment to the continuation of Mortgage Rescue, and the 12 month extension to the Support for Mortgage Interest (SMI) criteria, is sensible. We would, however, urge the Government to consider paying SMI at the same rate as the borrower’s mortgage to ensure that vulnerable borrowers continue to receive adequate support.

“Obtaining a mortgage remains very challenging for first-time buyers, who must raise a large deposit. Transaction costs act as a further barrier to house purchase, so we call on the Government to make permanent the exemption from stamp duty for first-time buyers on properties under £250,000. The Government should also go a step further and look at reforming the current ‘slab’ structure of the tax – it’s time stamp duty for all buyers was reviewed.”

Diverse financial services

“The BSA welcomes the commitment by the Government to foster diversity, promote mutuals and create a more competitive banking industry. Keeping a reformed Northern Rock independent of the big banks would be good for competition, and we would urge the Government to seriously consider the benefits of remutualisation.

“A re-launched and remutualised Northern Rock can repay the taxpayer stake over time. A deferred payment profile can give the optimum outcome, both returning the full value to the taxpayer and achieving other public policy goals, such as increased stability and competition.”

~ Ends ~

Notes to editors

1. A copy of the BSA’s 2011 Budget submission can be viewed here http://www.bsa.org.uk/policy/response/2011_budget

2. The Building Societies Association (BSA) represents mutual lenders and deposit takers in the UK including all 48 UK building societies. Mutual lenders and deposit takers have total assets of over £365 billion and, together with their subsidiaries, hold residential mortgages of almost £235 billion, 19% of the total outstanding in the UK. They hold more than £245 billion of retail deposits, accounting for 22% of all such deposits in the UK. Mutual deposit takers account for about 36% of cash ISA balances. They employ approximately 50,000 full and part-time staff and operate through approximately 2,000 branches.

3. Photographs of Adrian Coles are available from the BSA press office, or from the Association’s website at www.bsa.org.uk or Headlinemoney www.headlinemoney.co.uk

4. CONTACT

Fiona Cornes – fiona.cornes@bsa.org.uk / 020 7520 5926
Rachel Wylie – rachel.wylie@bsa.org.uk / 020 7520 5905

Katie Wise (nee Errington)
Policy and External Affairs Officer
Building Societies Association
6th Floor, York House
23 Kingsway
London
WC2B 6UJ

Tel: 020 7520 5904
Fax: 020 7240 5290
Email: katie.wise@bsa.org.uk
Web: www.bsa.org.uk

Join us at the BSA Annual Conference in Birmingham, 4 & 5 May 2011.
www.bsaconference.org