My Lords, Amendment 473, tabled by my noble friend Lord Holmes of Richmond, and ably moved by the noble Baroness, Lady Hayman of Ullock, would require the Secretary of State to report to Parliament—within three months of the day on which this Bill is passed—on the existing barriers to the establishment of regional mutual banks in the United Kingdom. I want to make it clear that the Government are supportive of the choice provided by mutual institutions in financial services. They recognise the contribution that these member-owned, democratically controlled institutions make to the local communities they serve and to the wider economy.
However, regional mutual banks are still in the process of establishing themselves here in the United Kingdom, with some now in the process of obtaining their banking licences. It is, therefore, too early to report on the current regime and any possible limitations of this for regional mutual banks. I know that my noble friend Lord Holmes was interested in how regional mutual banks have performed in other jurisdictions and how we could use these examples to consider the UK’s own capital adequacy requirements. In this instance, international comparisons may not be the most helpful to make. The UK is inherently a different jurisdiction, with different legislative and regulatory frameworks from those in the US, Europe or elsewhere.
Abroad, some regional mutual banks have been in existence for centuries and have been able to build up their capital base through retained earnings. In the UK, regional mutual banks are not yet established and are continuing to progress within the UK’s legislative framework. However, the Treasury is continuing to engage with the mutuals sector and other industry members to assess how the Government can best support the growth of mutuals going forward. I hope that this provides sufficient reassurance for the noble Baroness, Lady Hayman of Ullock—on behalf of my noble friend Lord Holmes of Richmond—to feel able to withdraw the amendment.