Dunfermline Building Society: Need for Action

Last week Willie Rennie MP blogged about the disproportionate charge that a mutual building society such as the Dunfermline Building Society were facing as a result of the fall out over Northern Rock. The fact that Dunfermline have not shifted from their key business as a savings and loan mutual means that their current difficulties shows the systemic failure of the Government to act responsibly in this current economic crisis.

As Willie pointed out the government was treated everyone the same both high risk banks with heavy investment portfolio and low risk mutuals providing customers a safe mortgage system. The Building Society looks poised to post loses of a mere £26 million, mere that is in comparison to RBS, HBoS, Lloyds-TSB and Northern Rock all of which the government was quick to jump to the defence of and shore up their risky portfolios.

Willie is calling on the government to take action:

"I want to explore every avenue possible in order to secure the future for Dunfermline. We cannot let 150 years of heritage be swept way under Labour's first recession. The business can be a strong concern in the future, but it is incumbent on politicians to help ensure its future."

Tavish Scott also added:

"This is a clear case for government intervention to ensure we do not lose a solid part of Scotland's financial infrastructure.

"I would be very worried if ministers were not already fully involved in seeing what influence they can bring to bear to retain the Dunfermline's independence. If they are not already involved, then they certainly should be."

Then Alex Salmond after pointing out (surprise, surprise) that financial regulation was reserved to Westminster, which restricted the Scottish Government's ability to act said:

"Dunfermline Building Society is a very significant player indeed in relation to the provision of social housing.

"Certainly, we would want the Dunfermline Building Society to remain as an
independent financial institution. There would be general support for that right across Scotland and we certainly stand ready to do anything that we can do in order to assist with that."

How about getting to Westminster Alex, where I believe you still have a seat, and seeing what you can do? Something you have singularly failed to do in the past.