Clause 3

Part of Financial Mutuals Arrangements Bill – in a Public Bill Committee am 10:00 am ar 25 Ebrill 2007.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Edward Balls Edward Balls The Economic Secretary to the Treasury 10:00, 25 Ebrill 2007

Just to reply to the point made by the hon. Gentleman, we have considered carefully whether mutual insurers could be included in this part of the Bill. As I explained on Second Reading, this is an area that has raised more substantial difficulties for us than other aspects of the original proposed legislation. Mutual insurers are difficult to define as a category. Many of them are friendly societies, which are already covered by the Bill; others are governed by private Acts of Parliament,  and so could not be covered in a public Bill. Changes in that regard would have to be made in those private Acts under the private Bills procedure. The remaining mutual insurers are companies limited by guarantee. We have considered whether the Bill could be extended to companies limited by guarantee that are also insurers. However, as insurance is regulated on a Europe-wide basis, we would have to allow the same procedures to apply whether transfer is through a subsidiary of a body corporate in another member state, which is similar to a company limited by guarantee.

The work that we have done in consultation with the hon. Member for Bournemouth, West and his advisers has continued to throw up a range of problems. For example, it would be difficult to specify in UK legislation what rights members of the transferring mutual society should enjoy in the holding company established in another member state. That is one example of a range of difficult definition issues that we have not been able to solve. So far, that has meant that we have been unable to come forward with proposals in new clause 3 covering mutual insurers.

However, I take on board the hon. Gentleman’s plea that we should keep trying. I am happy to go back today and take a further look at these matters, and to see what more can be done. I will write to members of the Committee in a day or two to inform them whether we can continue those discussions. If it were possible to come back with an amendment in Report, we would do so, although I fear that simply to investigate the matter further and see whether that was possible would take some days. I do not know whether the timetable will give us the space to do so, but we have no principled reason for excluding mutual insurers. If we could table an amendment on Report, we would. We would need some time to do the work to see whether that was possible.

I shall keep in touch with Committee members, but if we are unable to make progress, we will continue to need to discuss the issue beyond the life of this Committee and this Bill. It is not off the table; if we can make progress, we will. It will take some days to look at the matter, but I do not rule out an amendment on Report.