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Mr. Gareth R. Thomas: I beg to move, That the clause be read a Second time.
Compared with new clause 1, new clause 2 constitutes a minor and less fundamental change. It refers solely to the Channel Islands, where a slightly different legal
jurisdiction applies that the Bill does not currently recognise, and which, I am advised, we should mention. The new clause will confer the power to make orders, and follows closely section 75 of the Industrial and Provident Societies Act 1965. It will ensure that industrial and provident societies in the Channel Islands can enjoy the advantages of the Bill, while acknowledging that the islands' unique constitutional position must be respected in the usual way by allowing for application of the legislation with appropriate adaptations by order. On that basis, I commend it to the House.
Rob Marris (Wolverhampton, South-West): Given that we have just had a debate about whether powers should be wider than is necessary, could my hon. Friend clarify the meaning of the word "supplementary" in the context of subsection (2)?
Mr. Deputy Speaker (Sir Michael Lord): Order. The hon. Gentleman will presumably deal with that point when he sums up, rather than in an intervention.
Dawn Primarolo: The Government support the new clause, which will allow the provisions in the Bill, or any order made under it, to be extended to the Channel Islands. In practice, no such extension would be made unless the relevant authorities wished it to occur. Existing industrial and provident societies legislation either applies to the Channel Islands with modification, or can be applied by Order in Council. It is therefore right that the Bill should enable the provisions to be extended to the Channel Islands, and I can confirm to the House that we have consulted the relevant Channel Islands authorities, which are content for this provision to be included in the Bill. I therefore urge the House to support it.
Mr. Thomas: I am once again grateful to my hon. Friend the Paymaster General for her remarks. Given the interest of my hon. Friend the Member for Wolverhampton, South–West (Rob Marris) in the new clause, perhaps I should set out what it will achieve in a tad more detail than I had intended.
The new clause is necessary because the Channel Islands constitute separate legal jurisdictions, and, as the Paymaster General stressed, in applying the Bill their authorities need to be consulted. It is therefore crucial that the new clause be included in the Bill. For example, under the new clause the Channel Islands co-operative society—a member of the co-operative union with which I consulted before Second Reading—can benefit from the protection afforded by the Bill's provisions, and, if the House is so minded, from modernisation of the industrial and provident society legal form further down the line, as statutory instruments are, hopefully, introduced.
In subsection (2), the word "supplementary" simply refers to necessary provisions in Channel Islands legislation that are additional to, rather than a replacement for, current rules. I hope that I have answered my hon. Friend's query in a sufficiently effective manner, and that the House will support new clause 2.
Clause read a Second Time, and added to the Bill.
New Clause 3
Annual fees
'Annual fees
The annual fee payable by a club, society or any other organisation for registration under the Industrial and Provident Societies Acts 1965 to 2002 shall be an identical sum to the current annual return fee payable by limited companies.'.—[Mr. Greg Knight.]
Brought up, and read the First time.
Mr. Greg Knight (East Yorkshire): I beg to move, That the clause be read a Second time.
Mr. Deputy Speaker: With this it will be convenient to discuss new clause 4—Financial Services Authority: fees to be charged in respect of industrial and provident societies—
'Paragraph 17 of Schedule 1 of the Financial Services and Markets Act 2000 is amended by inserting after sub–paragraph (2)—
"(2A) Any fee charged in respect of functions carried out by the Authority under the Industrial and Provident Societies Acts 1965 to 1978 shall be fixed in a manner which has regard to the financial circumstances of the society or proposed society which is to pay it including their turnover, profitability and scale of operation and in no circumstances will the fee charged where an existing society's turnover was less than £1,000,000 in its last year of account or where a new society is applying for registration exceed the fee chargeable in respect of the equivalent function by the Registrar of Companies.'.
Mr. Knight: As the Order Paper reveals, I have registered an interest, although I should tell the House that I am erring on the side of caution as I may not actually have an interest to declare. I have no idea whether Bridlington Conservative club, of which I am a paid-up member, is registered under the Industrial and Provident Societies Acts. From time to time, I also give advice—usually on entertainment matters—to various working men's clubs, some of which may well be registered under the Acts. Moreover, I am joint chairman of the all-party group on non-profit making members' clubs. Those facts may or may not amount to an "interest" in the parliamentary meaning of the word, but I feel it proper that I place them on the record at the outset.
In the history of civilised trading, the concept of limited liability is long established and well known. Those organisations that trade for profit—there is nothing wrong with that—usually form themselves into limited companies, thus enabling their liability to be limited to the value of the shares held, or to the extent of the guarantee given. The annual cost of maintaining such a company on the register, whatever the turnover, is £15, which has to be paid when the company files its annual return.
Other organisations, many of which are non-profit-making members' clubs, may decide to register under the Industrial and Provident Societies Acts. As their name suggests, such clubs are run not for profit but for the benefit of their members. In many areas, they are the heart of their local community. They often encourage, and sometimes sponsor, the participation of members and their children in sporting events, or the development of their musical skills. They are often the backbone of many underprivileged and deprived areas.
For many years, those organisations paid no annual fee to remain registered under the Industrial and Provident Societies Acts, but approximately six years ago an annual fee of £25 was introduced. Hon. Members may find it odd that a fee greater than the filing fee for a fat cat-led limited company was introduced, but it was. Now, however, an outrageous situation is developing. Moves are afoot to charge those organisations approximately £200 a year for the privilege of remaining registered under the Acts. That is unjustified and unfair, coming as it does at a time when the very existence of many clubs is in doubt.
I do not know how many right hon. and hon. Members have read an article in this week's edition of The Stage—the headline of which is "Epidemic of CIU club closures"—which states:
- "Working men's clubs—one of the largest sources of work for British light entertainers—are closing at the rate of 85 a year, it has been revealed.
Kevin Smyth, general secretary of the powerful Club & Institute Union, told The Stage that a total of 425 member venues have shut during the last five years. And since its high point in 1974, the CIU has seen its total number of affiliates"—
- "drop by nearly one third—from 4,000 to 2,700.
The scale of the problem could be even larger because CIU sites account for fewer than half those listed by the 5,500-strong Committee of Registered Clubs Association—whose members also include political or Service clubs such as the Royal British Legion."
Mr. Christopher Chope (Christchurch): I very much support what my right hon. Friend the Member for East Yorkshire (Mr. Knight) has said in moving new clause 3. Indeed, I also supported it by putting my name to it on the amendment paper. New clause 3 very much supports points that I made on Second Reading. To save me from restating all the interests that I declared then, I formally put on record the fact that I still have those same interests.
On Second Reading, a number of hon. Members on both sides of the House expressed concern about the fees. I think that the hon. Member for Corby (Phil Hope) was the first person to raise the issue in that debate, when he said that there was no provision relating to fees in the Bill. Well, thanks to my right hon. Friend, there will now be scope to include the fees, so I hope that the hon. Gentleman will support the new clause, as he suggested on Second Reading that he would support such a provision.
Similarly, the hon. Member for Wolverhampton, South-East (Mr. Turner), who is not in his place, spoke eloquently on Second Reading about the burden of fees on small clubs. I hope that what he said, which was widely supported at the time, will also be reflected in support for the new clause among those on the Government Benches because it must surely accord with common sense.
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