Questioning Nationwide Building Society’s Ethos of Mutuality

As a well-known and now long dead political activist observed in 1872, the “chief aim” of building societies — despite their often good intentions — “is always to provide the savings of the petty bourgeoisie with a more profitable mortgage investment at a good rate of interest, with the prospect of dividends as a result of speculation in real estate.” Moving to the present, the Nationwide Building Society presents itself as the largest of its kind in the world, maintaining a head office in Swindon, and call centres in Northampton and Bournemouth. As a self-defined mutual financial organization Nationwide boast, “we are owned by and managed for the benefit of our members — our retail savings and residential mortgage customers — rather than for shareholders.” A misleading statement which is perhaps a little hard to swallow for many of their insecure and underpaid staff, busy slaving away on exploitative contacts for their mutual benefit!

At their AGM earlier this year Nationwide chairman Geoffrey Howe provoked national outrage when he defended his own and his buddies obscene fat-cat salary’s. Perplexed, Howe explained: “A lot of people just find it hard to understand why there is such a big differential between what the man in the street earns and what senior business people earn.” He is quite right, it is next to impossible to understand why Nationwide fail to pay their staff a living wage when their top five executives received £7.9 million in pay and bonuses (up 16 per cent on the previous year), with the building society itself having “posted a 56 per cent rise in profits to £475 million last year.”


Moreover, Geoffrey Howe, who already receives £300,000 a year for working less than three days a week as Nationwide’s chairman, receives additional financial reward for his service as the chairman of Jardine Lloyd Thompson Group plc (JLT) — “one of the world’s largest providers of insurance and employee benefits related advice, brokerage and associated services.” This leaves one to ponder the nature of the “employee benefits related advice” that Howe oversees at JLT: I would hazard a guess that it is not the type of advice that members of the working-class would seek out. However this commitment to providing advice that undermines real employee benefits, might explain why Jonathan Dawson, a board member at NEXT (the retail outlet) likewise resides in luxury upon JLT’s board of directors. As in the wake of four consecutive years of record breaking profits, corporate bonuses for executives are the norm at NEXT, in the same way that poverty wages are the norm for the majority of their hard-working staff. (For more on this dire hypocrisy, see “BAD LORD, welfare scrounger!” and “Whatever NEXT?”; also of note, NEXT’s chairman, John Barton, is JLT’s former chairman.)

To help whitewash Nationwide’s abysmal commitment to their staff, it is no doubt useful that PR guru, Rita Clifton, is counted as a member of their board of directors. Formerly with global advertising firm Saatchi & Saatchi, Clifton is now the chair of Interbrand, (which is itself a division of the world’s third-largest advertising conglomerate, Omnicom) and to boot, a board member of healthcare profiteer, Bupa. Another interesting director of Nationwide is Lynne Peacock, who just last year joined the board room of insurance giant Standard Life, where she works in close proximity to all manner of corporate shit-heads, including not least NEXT’s Jonathan Dawson, who is a board member of Standard Life Investments Limited (which is Standard Life’s investments business).

In 2007, Unite the Union appropriately referred to Standard Life as “Double Standard Life,” owing their propensity to slash jobs, implement pay cuts, attack staff pensions — all in the face of healthy profits — and reject the wishes of their staff to be represented by an independent trade union. This at the same time that their then chief executive Sandy Crombie saw his basic annual salary and bonus package quadruple from £500k to in excess of £2 million. Reports about fat-cat bonuses at Standard Life combined and massive worker lay-off’s made the news again in 2011; while in May 2013, union activists protested at Standard Life’s AGM to draw attention to the shares that Standard Life own in an anti-union company known to be engaged in blacklisting of union reps.

The chairman of Standard Life (since 2008) has been a man named Gerry Grimstone, a former civil servant who came to be known as “Mr Privatisation” — “a moniker he is proud of” — whom under Thatcher’s guidance implemented the Conservative Government’s vile policy of privatising state-owned assets. Unsurprisingly, Grimstone has worked and continues to work with all manner of exploitative corporate profiteers, and just one of note is Lord Norman Blackwell (who served as a board member of Standard Life between 2003 and 2012). Lord Blackwell is the former chairman and current board member of the Centre for Policy Studies, a right-wing think tank that published a sickening pamphlet in 1988 which “provides a coherent justification for the trajectory of change to the NHS that we have seen implemented by the governments in power since that time.” Personal health profiteering was of course always part of the plan for the super-rich, and Lord Blackwell is currently the chairman of Interserve plc, which late last year won a seven-year contract worth up to £700 million to run hospitals in Leicestershire (see “Thatcher’s legacy of NHS butchery”).

As this article has sought to demonstrate, despite varying levels of rhetoric, there is very little to separate the mutuality practiced by Nationwide Building Society and the open exploitation of workers by businesses like NEXT or Standard Life. All are committed to placing profit before human need, and all are run by corporate executives who seek to undermine working-class solidarity by any means necessary; something that the corporate media is all too willing to help with. In light of this, the solution, as ever, is for workers to defy their bosses and endeavor to work together in their struggle for justice. Profits don’t just materialize from thin air: they are created by the working-class, and as such it is only fair that such profits should be equally shared out amongst those whose labour created them.

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