Opening the Building Societies Association (BSA) Conference 2021 – the first time the event has been held fully virtually – John Glen MP, economic secretary, HM Treasury, thanked staff for their hard work during the pandemic.
He praised not just the support provided in the shape of mortgage deferrals and keeping many branches open as a vital lifeline but also in the individual, but no less significant, gestures societies made in order to support their communities.
From Leeds Building Society suspending arrears to a branch of Principality Building Society marking a lonely customer’s 70th birthday – Glen thanked workers for their innovative spirit.
There was, of course, much reflection on the challenges faced during, arguably, the most difficult year many in the sector had ever faced. Indeed, in his opening speech Mike Regnier, the current chair of the BSA, likened the experience to ‘hurtling down the right-hand lane of the motorway whilst changing the tyres at the same time’.
He described the ‘mortgage feast and famine’ – praising the way societies coped with the closure of the property market before adapting to the influx of applications created by the Stamp Duty holiday.
“We can and we did handle the mortgage ‘famine and feast’, “he said. “The pandemic taught us one thing – the importance of household resilience.”
However, talk quickly turned to how things could start moving in a new direction.
As such several key themes emerged including diversity and inclusion in the sector, addressing the plight of mortgage prisoners, repaying the debt created by the pandemic and corporation tax.
Inclusivity and diversity
While many of these issues are expected to be discussed in greater detail during the following four days of the conference, Glen – in a pre-recorded interview with Robin Fieth, chief executive of the BSA – touched on how the subjects might be tackled going forward.
Indeed, Glen said diversity and inclusion should be on everyone’s agenda and he urged those societies who had not yet signed up to the Women in Finance charter to do so. He said: “Every signature gives weight to the sense the tide is turning.”
Already, in the building society sector, 40% of senior management is female – this is 8% higher than the rest of the financial services sector.
But, he said: “I still think there’s a strong argument for participation.” This included encouraging diversity by signing the Race at Work charter, to improve equality of opportunity in the workplace.
Mortgage prisoners
Mortgage prisoners is clearly set to remain a strong theme going forward beyond the pandemic. Glen described tackling the problem as a great challenge, admitting there was no one size fits all approach to support the many differing circumstances these borrowers faced.
Fieth said it looked likely more types of prisoner would emerge – one group were those who were in clad buildings which were between one to four storeys and therefore did not qualify for financial support for remedial work.
The other group were the small 1% to 2% of mortgage borrowers who were in deep financial difficulty and impaired credit as a result of the pandemic and would need support.
Glen also hinted the government may make an announcement about corporation tax in the next budget. He said the government was reviewing appropriate level of surcharge and working with stakeholders to ensure it provided clarity in this area.
Economic outlook
Economist, writer and broadcaster, Linda Yueh, also spoke to conference delegates about how she thought the UK economy might emerge from the Covid pandemic.
The key, she said, would be employment – ultimately: how many people have left the labour market and how quickly they can return to work. Inflation, she said, remained uncertain and interest rates would remain low until economies were on a ‘sounder footing’ until employment returned to stronger levels.
Yueh believes investment from the public sector – particularly in green projects – would help provide the boost the economy needed. Harnessing some of the positives to come out of the lockdown – for example working from home – would also provide opportunities for businesses and organisations to support employees.
She said the UK could re-orientate to faster growth, which is more equal and greener. Now is the time for a great reset, she concluded.
