Friday Volume 493 12 June 2009 No. 90 HOUSE OF COMMONS OFFICIAL REPORT PARLIAMENTARY DEBATES (HANSARD) Friday 12 June 2009 £5·00 © Parliamentary Copyright House of Commons 2009 This publication may be reproduced under the terms of the Parliamentary Click-Use Licence, available online through the Office of Public Sector Information website at www.opsi.gov.uk/click-use/ Enquiries to the Office of Public Sector Information, Kew, Richmond, Surrey TW9 4DU; Tel: 0044 (0) 208876344; e-mail: [email protected] 1033 12 JUNE 2009 1034 House of Commons Co-operative and Community Benefit Societies and Credit Unions Bill Friday 12 June 2009 Consideration of Bill, not amended in the Public Bill Committee. Third Reading The House met at half-past Nine o’clock Queen’s and Prince of Wales’s consent signified. PRAYERS 9.50 am The First Deputy Chairman of Ways and Means took the Chair as Deputy Speaker (Standing Order No. 3). Malcolm Wicks (Croydon, North) (Lab): I beg to move, That the Bill be now read the Third time. Mr. Andrew Dismore (Hendon) (Lab): I beg to move, As I trooped through the No Lobby, I reflected that, That the House sit in private. given the fervour for the modernisation of Parliament, I Question put forthwith (Standing Order No. 163). hope that the modernisers will look critically at the way in which we spend our Friday mornings. The shenanigans The House proceeded to a Division. that go on are not fit for purpose in a serious parliamentary democracy. Madam Deputy Speaker (Sylvia Heal): I ask the Serjeant at Arms to investigate the delay in the No lobby. It is my pleasure to present the Bill for its Third Reading. I thank hon. Members for their useful The House having divided: Ayes 0, Noes 32. contributions on Second Reading on 24 April. I am Division No. 147] [9.33 am grateful for all their comments and questions, and encouraged by the unanimous cross-party support for AYES the measure. We had an equally useful, albeit short, Tellers for the Ayes: John Austin exchange in Committee, and I am impressed with the Mr. Andrew Dismore and commitment that hon. Members continue to show to the cause of mutuality and co-operation. NOES The Bill represents something of a rebranding of societies. It provides for all new societies registered Allen, Mr. Graham Lansley, Mr. Andrew Bellingham, Mr. Henry Lewis, Mr. Ivan under the Industrial and Provident Societies Act 1965 Bottomley, Peter Mackay, rh Mr. Andrew to be registered as co-operative or community benefit Brown, Lyn McCarthy-Fry, Sarah societies and it sets out the basis on which societies may Burt, Alistair Prentice, Bridget be registered. The criteria are essentially those in existing Chope, Mr. Christopher Rammell, Bill legislation and no major change is made to the qualifying Davies, Philip Ruddock, Joan criteria. Dunne, Mr. Philip Seabeck, Alison The introduction of the registration requirement will Fitzpatrick, Jim Skinner, Mr. Dennis also ensure that societies can be properly supervised by Goodman, Helen Smith, Angela E. (Basildon) the Financial Services Authority, thus improving corporate Heath, Mr. David Spellar, rh Mr. John governance over the sector. By modernising the name Sutcliffe, Mr. Gerry Heathcoat-Amory, rh from “industrial and provident society”—which, I admit, Mr. David Thornberry, Emily has a historical resonance and status—to terms which Hurd, Mr. Nick Timms, rh Mr. Stephen Jack, rh Mr. Michael Wicks, rh Malcolm are, in any case, in common usage, we can help the sector adopt a modern 21st century status and persona. Jenkin, Mr. Bernard Tellers for the Noes: Keen, Ann Helen Jones and Societies that are already registered do not have to Lammy, rh Mr. David Mark Tami register again. If my Bill becomes an Act, societies that register before it is implemented will not be affected by The Deputy Speaker declared that the Question was the definitions of “co-operative society” or “community not decided because fewer than 40 Members had participated benefit society” in the measure. in the Division (Standing Order No. 41). The Bill also deals with circumstances in which a society’s registration may be cancelled so that it reflects the new registration provisions. The FSA, as registrar, will be able to cancel a society’s registration when it does not meet the new statutory definitions. Again, the Bill caters for the status of societies registered, or treated as registered, under the current section 1 of the 1965 Act. The Bill changes the name of the Industrial and Provident Societies Act 1965 and that of other Acts concerning such societies so that “industrial and provident societies” is replaced by “co-operative societies” in the titles. That is part of the rebranding of industrial and provident societies. Peter Bottomley (Worthing, West) (Con): On modernisation, perhaps the right hon. Gentleman will consider, given that “industrial” has gone out of vogue, 1035 Co-operative and Community Benefit 12 JUNE 2009 Co-operative and Community Benefit 1036 Societies and Credit Unions Bill Societies and Credit Unions Bill [Peter Bottomley] walked along Victoria street this morning, but I think I have got the name right this Friday. The Bill gives whether that also applies to “Labour”, and whether the powers to the First Secretary of State to investigate party should be branded “the Co-operative party” again. companies and their affairs, and to requisition documents. Will he remind the House that the registration of credit Under the law as it stands, the FSA has certain unions is unchanged, although some provisions affect powers to investigate industrial and provident societies. them? Will he reflect on whether it is right to provide for However, such powers are limited, particularly in respect “the Treasury”to have power to do things when, normally of those societies that are not regulated by the FSA as in Bills, power is given to “the Secretary of State”, providing financial or insurance services. In contrast, which allows for greater flexibility in Government in the Secretary of State has more extensive powers to later years? investigate companies. That partly tackles the issue that the hon. Member for Worthing, West (Peter Bottomley) Malcolm Wicks: I will deal shortly with one or two of raised about the Secretary of State’s powers. The Bill those issues, not least credit unions, which both the will enable the Treasury to give the FSA powers of hon. Gentleman and I regard as particularly important investigation of industrial and provident societies, equivalent in the current economic climate in some of our poorer to the powers that the Secretary of State has in respect communities. On his useful—as ever—advice about the of companies. name of the Labour party, as every schoolboy and schoolgirl knows, there is a separate Co-operative party, The Bill also includes important provisions for credit of which I and many other Members are members. unions. It enables provisions that correspond to building Indeed, some colleagues are returned as Labour and society law to be made for credit unions. The power will Co-operative Members. However, it is always useful to allow any provision in building society legislation, which have a tutorial from the hon. Gentleman about the is deemed appropriate, to be mirrored for credit unions. history of the Labour movement, although it is not the Credit union membership has expanded significantly in subject of the Bill. recent times; indeed, perhaps I should declare that I have recently joined the excellent Croydon credit union. The Bill applies the Company Directors Disqualification The best way of allowing credit union law to keep pace Act 1986 to officers of industrial and provident societies, with that expansion in membership and operations is to as it applies to officers of companies, building societies bring it into line with building society law, which is and friendly societies. The 1986 Act provides for the tailored to deal with issues specific to institutions that disqualification of officers of companies and various accept deposits. The power is widely drawn, so as to bodies when such officers have seriously mismanaged allow any provisions of building society legislation deemed those bodies. Disqualification means being prohibited appropriate to be mirrored for credit unions. from involvement in the management of a company or from acting as an insolvency practitioner for a period of There are restrictions, however, to ensure that specific time. Under the law as it currently stands, officers of provisions of existing credit union law cannot be modified. industrial and provident societies who have mismanaged Thus, provisions regarding registration, the use of the a society cannot be disqualified. Clause 3 will make name “credit union”, the general prohibition on deposit their disqualification possible. taking, amalgamations or transfers of engagements and conversion of status between credit union companies The Bill provides for greater investigation of societies. are safe. There is a requirement that the Treasury consult It gives the Treasury powers to apply to industrial and with the appropriate persons before using the power, provident societies specific provisions of company law which is a reflection of its potentially wide scope. Depending on investigating companies, company names, dissolution, on which provisions of building society law are converted and on restoration to the register, which the FSA keeps, into credit union law, the Treasury might need to of industrial and provident societies. “confer power to make orders, regulations and other subordinate The Bill also applies part 31 of the Companies Act legislation; create criminal offences; provide for the charging of 2006, which contains provisions to strike defunct companies fees (but not any charge in the nature of taxation).” off the register of companies, to societies.