My Lords, I thank noble Lords for their valuable comments during this debate, and for their kind words on my first day on the Front Bench. These regulations introduce a welcome simplification and are important in enabling and encouraging the growth of CICs and making the model accessible to more social entrepreneurs. In response to the question asked by the noble Lord, Lord Young, we expect there to be an increase of between 10% to 20% within the first two years.
With their community benefit, CICs are an important part of the social enterprise landscape which have widespread support, and these regulations will ensure that CICs remain so. The measure will encourage a wider market for investment in a key and growing model of social enterprise that is accountable and transparent in its operation. I was glad that my noble friend Lord Hodgson of Astley Abbotts joined our debate today and was able to make a valuable contribution given his great expertise in the charitable area.
I will make a number of points. The steps we are taking are cautious, and indeed, as the noble Lord acknowledged, they are intended to preserve the vital asset lock. The change to the dividend cap has been 10 years in the making. As I said in my opening speech, that has been thoroughly consulted on and is supported by the CIC community. On the point on performance-related interest, this recognises the balance between risk and reward. The 20% is a maximum and is based on profit. At present, very few CICs pay performance-related interest at all. However, I will look at the points that he made and will perhaps write to him in the light of that.
I agree with both noble Lords that the public should be properly communicated with on the availability of different types of social enterprise entities. We need to explain the options clearly to citizens—and online options in that area can be very helpful and important. That will also be important in the debate we had previously on the new family-friendly policies. We will certainly consider how we can best make sure that those new arrangements and the whole range of social enterprise entity provisions are made publicly available.
The noble Lord, Lord Young, asked about the failure of CICs. The regulator has had a number of complaints about CICs, but that is a very small proportion in relation to the numbers on the register. All are investigated, and I will write to noble Lords with the exact numbers. On the campaign to educate stakeholders, I understand that not only does the regulator place priority on this matter, but it also works closely with umbrella organisations such as Social Enterprise UK, Social Enterprise Mark and the CIC Association to promote CICs. In my experience, that is often a very good way of ensuring wider dissemination of information in the market. I am grateful for the points raised in this debate and I commend these regulations to the House.