It is a pleasure to serve under your chairmanship, Ms Clark, in a Committee composed of friends and colleagues on both sides of the House who have consistently championed the cause of mutuality. I propose to set out the content and purpose of the Bill in the debate on this Clause. I am aware that it has support on both sides of the Committee. I trust that the remaining clauses may be dealt with formally, without the need for further debate.

Let me begin by setting the context. For over 300 years, friendly societies and mutual insurers have been an important part of our country’s corporate landscape. From the time of the industrial revolution, working people’s need for greater security against unemployment, sickness and funeral costs led to the creation of many such societies, all committed to principles of mutuality, customer focus and trust. Some of those societies, such as Royal London, NFU Mutual—I must declare that I served on its board for a decade—and London Victoria, have become major landmarks of the financial services industry. Others such as the Tredegar Medical Aid Society brought working miners together 120 years ago to mutually provide medical care.

The Tredegar Medical Aid Society was the first to make provision for members to receive sickness benefit when needed. In 1911, a parliamentary commission visited Tredegar to examine the scheme and, within a year, universal sickness benefit was introduced across the whole of the United Kingdom. Aneurin Bevan served on the board of that society with my grandfather, who was a working miner. In 1947, Bevan told Parliament  that the Tredegar Medical Aid Society was his model for the NHS. He declared that the Government were not nationalising health care in this country but “Tredegar-ising” it.

The important contribution made by mutuals over the years to both innovation and corporate diversity has been significantly undermined in recent decades by their inability to raise regulatory capital other than by retaining past profits without losing their mutuality. Mutuals have faced the twin challenges of seeking to retain enough capital to satisfy solvency requirements and to fund ongoing growth without then falling victim to the pressures of demutualisation.

The result has been that the UK has a significantly smaller mutual sector today than almost anywhere else in Europe, with a consequent drop in consumer choice, customer focus and trust in financial services. That problem has led all parties to recognise that something urgent must be done to allow mutuals to raise additional capital if required without losing their mutual status, and that is both the purpose and effect of the Bill. That need is amplified by the impending changes to the European solvency rules.

Clause 1 gives power to the Secretary of State to permit the use of deferred shares in friendly societies and mutual insurers. Such shares can be transferred but not withdrawn. The Bill prohibits repayment of principal other than on the solvent winding up or dissolution of the issuer or where the appropriate regulator has consented to the repayment. A society may issue deferred shares only if it is authorised to do so by its memorandum or rules, and a mutual insurer may do so only if authorised to by its constitution. That means that no shares will be issued until the current members have approved it.

The power to make regulations is exercisable thereafter by statutory instrument and subject to the affirmative procedure. The rest of the Bill clarifies the voting rights of holders of deferred shares and provides necessary legal definitions. That, very simply, is what the Bill is about.

I pay tribute to my noble Friend Lord Naseby—formerly a Deputy Speaker of this House—for all the work that he has done to take the Bill successfully through the other place. I also pay tribute to that icon of mutuality, Peter Hunt, for all the assistance he has given me in taking the Bill forward and, since I am, as it were, drawing to the evening of my service in the House of Commons, the work that he has performed for the all-party group for mutuals, which I have had the honour of chairing.

I thank my hon. Friend the Minister, who has consistently offered Government support for the Bill, as has my hon. Friend the Member for Fareham. The hon. Member for Kilmarnock and Loudoun has championed the Bill and has offered me consistent support throughout my chairmanship of the all-party group—in fact, she is my deputy chair—as has my distinguished predecessor, the hon. Member for West Bromwich West. He has done so much over the years for the mutual sector, and I am pleased to be able to refer to that to thank him for it. I have no doubt that many more mutual companies would still be around today if the measures that we are considering had been passed three decades ago, so I commend the Bill.