Commons votes to support legislation for mutuals and friendly societies
Commons votes to support legislation for mutuals and friendly societies
The Second Reading of the Cooperatives, Mutuals and Friendly Societies Bill took place in the House of Commons this morning. MPs provided cross-party support for the customer-owned sector, and voted unanimously in favour of the Bill progressing to its next stage.
The Bill focuses on the provision of an ‘asset lock’ for cooperatives and mutuals, and is in many respects a reaction to the attempt by private equity in 2021 to seize control of one of our largest mutual insurers in the UK, LV=. The Bill is intended to preserve capital in a mutual insurer, friendly society or cooperative for the future benefits of its members and to thwart a hostile approach.
The scope of the Bill was much-diminished in the days before the Second Reading, and the Minister also announced that the Government was intending to undertake a review of key legislation relating to the sector, including engagement with the Law Commission to help the Government finalise its approach.
Martin Shaw, Chief Executive of the Association of Financial Mutuals stated:
“The positive support for mutuals from all corners of the House of Commons today was tremendous to see. The recognition that a strong mutual and cooperative sector is good for consumers and society was very welcome, and provided a great reward for the hard work by AFM and its members in recent months, to argue the case for reform. This Bill takes that reform work forward, but there is a lot more to do, and it is vital that the Government commits to the broader review of legislation. After all, an asset lock might protect a successful mutual from unwelcome bids, but will not in itself ensure it continues to access the capital to grow and to be successful.”