by
Christopher Draper
BUILDING
societies, like most good things, were invented in the North.
Founded
by workers as mutual aid organisations, building societies provided a
safe home for meagre savings so that in the long term members could
secure homes for themselves and their families. Over the decades the
money men and city spivs moved in, privatised many societies and
subverted democratic control of the rest. You won’t see many
millionaire money men walking the streets of Bradford these days but
you’ll find a fair few if you pop into the Boardroom of the
Yorkshire Building Society (YBS), a mutual aid for the wealthy.
Hell
and Halifax
YBS
isn’t the only example of the hollowing-out of the mutualist ideas
and working class ideals of the original building societies. The
capitalist feeding frenzy that privatised the ‘Halifax Building
Society’ (then Britain’s biggest) and then almost destroyed
it shows YBS and other remaining ‘mutuals’ have further to
fall from their idealistic origins. A comprehensive analysis of every
surviving mutual would be onerous to compile and boring to read so
I’ll concentrate on contrasting the professed ideals of YBS with
the actualite but the critique applies across the board.
'Our
Society'
YBS
‘members’ who legally own the ‘society’ nowadays
play no greater role in the business than they do in MacDonalds,
Google, Asda or any other retailer yet YBS, like the other fake
mutuals, constantly claims we do. ‘Our Society a
Place Where We Belong', “Members…at the
heart of everything we do’, ‘As a building
society we are set up specifically to help people rather than make
money from them’. In the last few years YBS wasted
millions of pounds of members’ savings settling fines and
compensation claims imposed as a consequence of negligent and cynical
trading practices.
The Financial Conduct Authority discovered YBS
indulged in mis-selling PPI; YBS neglected and improperly overcharged
mortgage customers experiencing repayment difficulties and YBS
promoted and sold bonds that promised financial returns that were
virtually impossible to achieve.
Even
a cursory examination of YBS documents reveals a focus on growth and
expansion rather than member involvement. The truth is that bigger
businesses bring bigger bonuses for bosses and for Mike Regnier, YBS
CEO, this year’s bonus added a further £275,000 to his already
massive salary. A YBS survey of “customer experience” over an
identical period recorded a drop from 27th to 87th
place (comparable organisations) yet had no negative impact on Mike’s
bonus.
Once
Upon a Time in Huddersfield
YBS
started in the nineteenth century with the creation of 'The
Huddersfield Equitable Permanent Benefit Building Society' by a
handful of workers and tradesmen in a small building on the corner of
King Street and Queen Street. In the twentieth century the 'Huddersfield' amalgamated with Dewsbury’s 'West
Yorkshire' and then Bradford’s 'Self Help' to, in
1982, form the 'YBS'.
From
its foundation in 1864 until 1896 none of the Directors of the
‘Huddersfield’ drew any salary from the Society’s funds
now the YBS Director’s trough is lavishly swilled with members’
savings.
The
YBS Board comprises 9 directors and includes 6 non-executive
directors. In 2017, the executive directors received a total
remuneration of two million and fifty-six thousand pounds with CEO
Mike Regnier alone getting almost a million (£930,000). As the
average local wage is £20,929, Mike gets more every year than a
Bradford worker would earn in a lifetime!
Keeping
Members Informed
You’ve
doubtless received one of those booklets that building societies send
out to members as an annual report. The first thing to note is that
these documents are not actually ‘Annual Reports’ but
selective, propaganda pamphlets that Directors employ to bamboozle
members into thinking they’re involved. For YBS the official 2017
‘Annual Report’ is double the page size (A4 rather than
A5) and six times the length of the ‘Annual
Review’ sent out to members. Both documents are essentially
sales brochures boasting of how brilliantly the ‘business’
is being run but occasionally key details can be gleaned from the
full document omitted from the dumbed-down version. This year
(2017/18) the YBS members’ pamphlet made no mention of the gender
pay gap that all big organisations are legally obliged to publicly
report but tucked away at the foot of the inner column of the
‘full’ document on page 71 we find that YBS operates a 31%
gender pay gap but of course even here there’s no admission of
guilt rather a statement of pious bullshit, ‘The Group
strives to create an environment where diversity in all forms is
encouraged and barriers in the way of colleagues fulfilling their
potential are removed.’
The
full 190 page Report includes lovely full-page, full-colour pictures
of Chairman John (Uriah) Heaps and CEO Mike Regnier yet still doesn’t
fully report YBS’s legally required analysis of its gender pay-gap
(it’s available online). This records women are very much in the
minority among its highest paid employees (top quartile: 42%
women/58% men) whilst down at the bottom end (quartile) the lowest
paid YBS employees are overwhelmingly female (80% women/20% men). In
place of these facts the Report obfuscates:
‘In
simple terms there are more females occupying less senior roles. It
is this imbalance that results in the gender pay gap’.
YBS
Democracy
Like
all fake democracies YBS have the problem of manufacturing consent.
Pictures of people of all types and colour are an essential
ingredient of all YBS booklets, sites and propaganda accompanied by
slogans asserting ‘inclusivity’. The aim is to make
members think everyone else is involved and if you’re not it’s
your lazy fault. The truth is that YBS is as mutual as the Co-op is
cooperative, it’s been captured and run by money men with no
radical, socialist or even cooperative agenda. Any claims to
mutualism are utterly superficial.
In
1864, there was a plumber amongst the originators of the Huddersfield
Building Society but you won’t find a ‘butcher, baker or
candlestick maker’ amongst the directors now, most come from
the banking world with a leavening of hotels, pubs and gambling
directorships.
Directors
know few members turn up at the AGM and there’s little likelihood
they’ll be challenged. Even if they were the Chairman wields
thousands of proxy votes from members who returned their voting paper
in response to whatever gimmicky inducement YBS offers that
particular year (in 2018 it’s a donation to charity). Few notice
or understand the import of the inconspicuous phrase, ‘The
Chairman will be your proxy unless you choose someone else by
completing the box on the back of this form’. Although
almost fifteen thousand members voted against last years lavish
directors’ emoluments with a further three thousand withholding
their agreement the Chairman claimed the backing of 128,159 proxies
as authorisation for the Board to stuff their wallets. Business as
usual and triples all round, Cheers!
Some
more Equitable than Others
In
1864, the Huddersfield Equitable offered members the prospect of a
home and interest on their savings of 5% interest (at a time that
inflation was zero). In 2018 Chairman Heaps claims YBS 'are
proud of our 150 year commitment to our mutual values – delivering
long term value' but consider what has been delivered by Heaps
and his fellow buildings society money men. 'Our mortgage customers
face average house prices that are almost eight times average
earnings – an all-time high…By 2020 only a quarter of 30-year
olds will own their own home, in contrast, more than half the
generation currently approaching retirement were homeowners by their
thirtieth birthday.' Whilst consumer price inflation is running at
around 3% per annum YBS savers are offered only 0.85% so even
labelling them 'savings accounts' smacks of 'mis-selling'.
Branch
closures reduce the service to members, increase centralisation and
bring banks bad publicity but YBS is equally guilty with 48 branches
closed last year with a further 18 closures already planned for 2018.
Progress?
YBS
isn’t doing anything illegal and is typical of the building society
sector and that’s precisely the problem, the rot is endemic. What
started as local mutual-aid societies founded by workers and
tradesmen to shelter themselves and their families from the ravages
of the marketplace have been gradually infiltrated by the values and
personnel of commercialism. Poorly paid, largely female, workers are
welcomed at YBS to do the donkey work at the counters and computers
but money-men run the show on classic capitalist lines.
In 1994
YBS was the first building society to operate its own share-dealing
service (subsequently sold) and members were encouraged to redirect
their mutual saving into stock market speculation.
In
2018, as ordinary YBS members suffer miserable, below inflation,
returns on their savings there’s rich pickings for the boys in the
boardroom. The members 'Annual Review' prominently boasts of
£1.5m'contributed to our local communities' but fails to
mention that this is less than the amount 'contributed' to board
members Mike Regnier and Stephen White.
Re-building
Society
The
nineteenth century working class created a rich variety of mutual aid
organisations, Building Societies, Benefit Societies, Trade Unions,
Political Parties, Burial Clubs, Reading Rooms and much more. Like
YBS, most are now ideologically moribund zombies with some appearance
of the original but devoid of humanity and political idealism. The
causes are complex but in almost every case a tendency to apathy and
materialism amongst workers was exploited by lawyers and city
slickers to gain control and extract value. Hierarchies and huge pay
differentials replaced equitable ideals and egalitarian practice.
There’s
no quick solution but we can all do a bit to reclaim our moribund
organisations. If you’re a building society member don’t ever
return the paper giving the Chairman your vote, either tick all the 'against' or 'vote withheld' boxes.
It’s
optimistic to dream of reversing the decline in building societies
and similar mutual aid organisations but we can at least try to stop
the rot. Recognise the rips-offs and speak out, don’t be complicit,
expose the injustice and ridicule the rapacious. Even YBS is not
entirely immune to activism, every creative act of protest supports,
encourages and incites others – You’d Be
Surprised…
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