Building Societies (Funding) and Mutual Societies (Transfers) Bill

The hon. Gentleman once again reveals his detailed knowledge of the subject and why the Bill has been framed properly. He is right. We expect only a few building societies to move towards the limits that have been discussed, but we are creating a freedom that will allow that to happen. It is for individual societies, within those limits and on a day-to-day basis, to choose how to fund themselves. The important point is that legislation at the moment is restrictive and many building societies fear that it hampers their ability to compete and to raise appropriate funds in the wholesale market. That is what we are addressing. As I know from the depth of my postbag and from the many letters that I have signed in the past month—once again, a tribute to the hon. Gentleman’s experience in organising legislation of this type—there is widespread support from building societies and their supporters for the Bill and for allowing that freedom. I have been able to confirm our support for it in writing many times in recent weeks. The hon. Gentleman raised one point that we have not been able to address satisfactorily. I explained in Committee that it is difficult precisely to define mutual insurers for the purposes of the Bill. Those that are friendly societies are covered by it, but those that have their own statutory basis cannot be covered in a public Bill. The remaining mutual insurers are companies limited by guarantee. We have considered whether the Bill could be extended to cover companies limited by guarantee that are also insurers, but because insurance is regulated on a Europe-wide basis, we would have to allow the same procedures to apply where the transfer is to a subsidiary of the body corporate in another member state which is similar to a company limited by a guarantee. As we discussed in Committee, that causes us a great deal of difficulty in properly specifying UK legislation which would work in that European context. For that reason, and despite our efforts, we were not able to include mutual insurers in new clause 3 in Committee. I told the hon. Gentleman that we would endeavour to see whether we could make further progress.