While fervently hoping that the planned rescue of HBOS goes ahead without too much difficulty, I think it is important to remember how this once-venerable institution came to be laid so low.

As we all know, the original Halifax Permanent Benefit Building and Investment Society was formed in 1853.

Like all early building societies, the aim of the society was for the mutual benefit of local working people. I think the key word here is "mutual". Investors with spare cash invested in the society to receive interest, and borrowers used loans to help buy a house.

By 1913, it was the largest building society in the UK and when, in 1928, it merged with Halifax Equitable Building Society, then the second largest building society, it was renamed the Halifax Building Society, and became five times larger than its nearest rival.
For the next 70 years it continued to grow and to work primarily for the benefit of its members.

However, in the mid-1980s the Tories under Mrs Thatcher allowed building societies to demutualise, and become public limited companies instead of mutually owned organisations, owned by the customers who borrowed and saved with the society. They also allowed banks to offer mortgages, which had traditionally been the preserve of building societies.

The Abbey National demutualised in 1989, and after a lull of a few years, suddenly within the space of a few months in 1997, the Halifax, the Alliance & Leicester, Bristol and West, Northern Rock, and The Woolwich all demutualised.

There was a palpable feeding frenzy when hordes of carpetbaggers joined mutual societies with the hope of making a quick buck from the conversion.

Indeed, a group called Members for Conversion operated a website, carpetbagger.com, which showed the best ways of opening share accounts with building societies, and organised demutualisation resolutions.

However, the benefits to former members now seem piffling compared to the benefits to the City and the suits who managed the conversions. The fees and commissions paid out amounted to £1 billion.

What about the supposed benefits to consumers that increased competition was going to bring? A study of the demutualised societies by Parliament in 2005 found that the customers had benefited very little, and in most cases paid more for a mortgage from a bank than from a building society.

The MPs argued that the real winners were the directors who ran the building societies at the time of conversion. They found that between 1993 and 2000 the total remuneration of chief execs in demutualised corporations increased by nearly 300 per cent as opposed to 65 per cent in mutual societies.

The sad fact is that of those building societies who converted, all have either been swallowed up by other banks or been nationalised.
Like Esau we were encouraged to sell our "birthright for a mess of pottage".

The unbridled greed that the Tories encouraged in our society, the "something for nothing mentality", has, is having, and will continue to have dire consequences for our country.

(Coun) Nader Fekri
(Lib Dem, Calder)