Financial Mutuals Arrangements Bill

It is not foreseen that the level will need to go beyond 75 per cent., which is probably the maximum prudent level envisaged. The Bill will enable the regulations to be made by the Treasury from time to time. Hon. Members will see that the Bill is somewhat complex. It is an enabling Bill, allowing the Treasury from time to time to make changes, as it thinks conditions demand and as it considers prudent. The role of the FSA is important in that. In general, the fact that the Bill is enabling, allowing the Treasury to make from time to time orders that can be dealt with by negative resolution, means that it will be flexible legislation, and we should not have to revisit these matters in future through primary legislation. That is extremely helpful for the sector, and this is the right way forward. As I said, the legislative position is not currently a constraint on most building societies, but there are concerns that as the markets change and things go forward in future, it may become a constraint. It is therefore advisable to take action now that will give freedom of regulation for the future.