Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what plans he has to bring forward regulations for Mutual Deferred Shares under the Mutuals’ Deferred Shares Act 2015.

The Government has consulted widely with industry representatives in considering whether to lay secondary legislation to enable mutual insurers to raise equity by issuing Mutual Deferred Shares. Mutual insurers and their representatives made clear that Mutual Deferred Shares would only be issued if they both qualified as Tier 1 regulatory capital and would not alter the tax treatment of the issuing mutual. The Government’s decision in 2018 not to lay secondary legislation was taken based on an assessment that it was not possible to design Mutual Deferred Shares to meet both these conditions. The Government is committed to supporting the mutuals sector, but continues to have no plans to bring forward such legislation.