Key Facts

• The amendments would enable the Treasury to make exceptions to asset usage rules.
• Amendment 2 aims to change the long title of the Bill to reflect its purpose of permitting non-distributable capital surplus in mutual entities.
• The Bill seeks to create a more modern and supportive business environment for co-operatives, mutuals, and friendly societies.
• Amendment 1 addresses legal inconsistencies in clause 1(2)(a) to close a loophole.
• Amendments ensure the Bill's long title reflects its intent regarding non-distributable capital surplus.
• The MP highlights the need for updated legal frameworks and tax provisions for mutual insurers and friendly societies.
• Richard Graham raised concerns over whether existing mutual constitutions allow capital distribution upon winding up.
• Graham suggested that mutuals should be allowed to use some capital for merging purposes to ensure scalability without demutualisation.
• Peter Bottomley questioned if the Bill applies directly to credit unions and suggested referring the Law Commission to review credit union laws.
• The Co-operative party and Labour party entered an electoral agreement in 1927.
• Building societies provide a low-risk banking alternative with consistently high trust levels among members.
• Credit unions serve 1.9 million members and £1.7 billion has gone out in loans to credit union members.
• The Financial Services and Markets Bill amends the Credit Unions Act 1979 to allow wider range of products and services.
• Consultation has concluded on the Building Societies Act 1986.
• Active discussions with Law Commission for reviews in the next financial year.
• The Bill has received support through successive Ministers over four or five months.
• A review involving the Law Commission is expected to be conducted.
• Asset lock provisions are being introduced in the Bill.