Clause 1

Part of Financial Mutuals Arrangements Bill – in a Public Bill Committee am 9:45 am ar 25 Ebrill 2007.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Edward Balls Edward Balls The Economic Secretary to the Treasury 9:45, 25 Ebrill 2007

I agree with the hon. Gentleman that we must do more to promote the role that mutuals play. On the example that he gave of Britannia’s important role in taking over Bristol and West, it is taking forward remutualisation in the building society sector. As I said on Second Reading, it is a matter of pride for the Treasury and for mutuals and co-operatives throughout the country that the substantial majority of child trust funds—a Government innovation with cross-party, or rather imperfect cross-party support—are being provided by mutuals and friendly societies. That is an example of the mutuals sector not simply resting on its values and history, but providing leadership in a new development, which is being followed by countries around the world.

As I said, the hon. Member for Twickenham asked two questions. It is good to see a member of his party in Committee, given the unfortunate absence of the Liberal Democrats on Second Reading, to cement fully the broader cross-party support that we want for the Bill. The hon. Member for Bournemouth, West set out fully the reason for taking the power to raise the funding limit, which has been pressed for and supported widely by the industry. Over the next year or so, we hope to consult in detail with the FSA and the societies to ensure that we get the precise number and details correct when we introduce the order, for which the Bill paves the way. There will be consultation; but as I said, there has been widespread support.

The second question raised by the hon. Member for Twickenham was discussed extensively, in fact, on Second Reading. Indeed, following a wide range of very supportive speeches from both sides of the House, my hon. Friend the Member for Hackney, South and Shoreditch asked me in an intervention why the Treasury, not the FSA, was taking the power in the amendments. I explained that, having consulted the hon. Member for Bournemouth, West and the FSA, we took the view that, although the latter is the regulator of individual institutions, the responsibility for setting the overall framework in which that regulation occurs is a matter for the House and the Government.

Accountability for getting that legislation correct lies with the House. We therefore took the view that the Treasury in the House should propose the framework and take the powers and that scrutiny should occur in the House. I assure my hon. Friend the Member for Hackney, South and Shoreditch and the hon. Member for Twickenham that that is being done in full consultation with the FSA, and with its agreement. I hope that that will not present difficulties in the Committee today.