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Linda Gilroy (Plymouth, Sutton): Does my hon. Friend agree that, having listed the existing mutual models that will be grateful for the Bill, new generations of social entrepreneurs will also be grateful as they develop new and lasting models based on the Bill?
Mr. Love: I wholeheartedly agree with my hon. Friend, not least because, in the mutual movement, we tend to look back, and it is most important that we look forward. I hope that the Bill is a contribution to that. This is the first legislation on industrial and provident societies for 30-odd years. There have been numerous Companies Acts during that period, so a Bill that provides for updating industrial and provident society legislation without the need for primary legislation, is a welcome measure. Industrial and provident societies face hurdles. They do not have a level playing field with their company competitors, but the Bill will help to create one.
In the past 15 years, demutualisation of societies has been seen as the honest and correct thing to do, as there have been windfall benefits for everyone and no down side. The Bill recognises that that is not the case. More importantly, it exposes what has happened as a result of demutualisation. The original clause 1—it may be clause 2 under the revised numbering—recognises that we must create a level playing field for industrial and provident societies, otherwise they, like other mutuals in the financial services sector such as building societies and mutual insurers, will be overtaken by events, as has happened in years past. The debate about whether organisations should demutualise was overtaken by the question of how much money individual members would receive, regardless or whether such a move was to the benefit of the society.
Almost all the arguments used by the managements of the organisations that demutualised are now either bankrupt or do not apply. There is concern that some of those organisations, having demutualised, will now be gobbled up by other financial services companies or banks, and will no longer be able to offer the services that they provided when they were mutuals.
We must try to create a more level playing field for industrial and provident societies. The court case involving the Co-operative Wholesale Society shows the need to do that. Two of its most senior executives have been found guilty and will be sentenced in the near future. That is an object lesson for us all, and shows what can happen inside large organisations with significant assets that many people would like to get their hands on.
I strongly welcome the Bill, because it moves towards a level playing field for industrial and provident societies. We need to take further steps, and my hon. Friend the Member for Harrow, West listed some of them. This is a most welcome measure, and I commend it to the House.
12.13 pm
Mr. Butterfill: I endorse the warm welcome that the hon. Member for Edmonton (Mr. Love) has just given to this excellent Bill. I share the regret of my right hon. Friend the Member for East Yorkshire (Mr. Knight) that we have not adequately tackled the issue of charging by the Financial Services Authority. I hope that the proposed meetings will bear fruit, because the will of both sides of the House has been clearly expressed.
I also understand why the Paymaster General felt unable to accept amendment No. 7, which was tabled by the hon. Member for Edmonton. That was a little disappointing, but there is clearly a need to consult
further. I hope that that consultation will lead to a successful conclusion on the important issues that were raised in that amendment.Having said that, I think that this is a worthwhile Bill. It has been clear from the debate that much of the important fabric of our society is represented by industrial and provident societies. Without their activities, our communities would be deeply impoverished. The strengthening of those societies through this legislation was long overdue. I join in the congratulations given to the hon. Member for Harrow, West (Mr. Thomas) on bringing this measure before the House.
12.15 pm
Mr. Edward Davey: I apologise on behalf of my hon. Friend the Member for Twickenham (Dr. Cable), who has been forced to leave me in charge of the Third Reading speech for the Liberal Democrats. He has given me some speaking notes, and I am delighted to echo his support and that of my party for this welcome measure. I pass on his congratulations to the hon. Member for Harrow, West (Mr. Thomas) on bringing it forward and on steering it through the House so well. I had a visit from his hon. Friend the Member for Harrow, East (Mr. McNulty) and, given the number of other Bills on the Order Paper, I assure the House that I shall keep my remarks brief.
I also believe that mutuals play a strong and important role for many of our constituents. They play an active role in making our communities that much richer, so it is important to bring the legislation that applies to them up to date.
Many people in the House and outside believe that this sector can play a much larger role in future. The many social entrepreneurs that are around and many people working in the public service and the private sector want this model adopted by their organisations—either existing or new ones. The Bill is welcome because it brings the law up to date and provides a mechanism for the legislation to be updated more frequently and more easily.
My hon. Friend the Member for Twickenham believes that the limitation that the Bill puts on carpetbaggers by ensuring that a democratic process applies to industrial and provident societies is an important step forward. I agree with him and with the hon. Member for Edmonton (Mr. Love) that more work needs to be done on entrenching the assets in these organisations. I was pleased to hear from the Paymaster General that the performance and innovation unit is actively considering that issue, and that consultation will take place in due course.
I am pleased that the fairly new social enterprise unit in the Department of Trade and Industry is contributing to that work, and is examining not only new ways of reforming industrial and provident society legislation, but new artificial identities that could be developed in the framework of industrial and provident society or company law.
We could go back to that creative stage in the Victorian era when new artificial identities were established to ensure that the economic and social objectives of society could be met by legal entities. We commend the Government on that work, and encourage them to go further.
I end by again congratulating the hon. Member for Harrow, West on his Bill.
12.18 pm
Mr. Dennis Turner: My remarks will be brief as time is limited. Our thanks to my hon. Friend the Member for Harrow, West (Mr. Thomas) have already been put on record, but it would be remiss of us not to mention that his conduct and approach to the Bill since its inception have been admirable. On behalf of Co-operative MPs—I declare an interest as a member of that group—I express our appreciation of the way that my hon. Friend has approached the Bill. He thanked legions of people in his contribution, so it is appropriate for us to thank him for giving his private Member's slot to this extremely important Bill.
For several years, the co-operative movement wanted to introduce such a measure, but we always found that parliamentary and Government time were taken up with so many pressing issues for our country that there was no opportunity to initiate modernising legislation for our co-operative enterprises and societies. An opportunity has been presented through the good offices of my hon. Friend in giving us this private Member's Bill. The measure is moving towards the statute book and hon. Members have told us of the benefits that it will bring.
I want to comment briefly on the remarks of the right hon. Member for East Yorkshire (Mr. Knight) and the hon. Member for Bournemouth, West (Mr. Butterfill) about the difficulties for clubs in respect of fees. The comments of the Paymaster General show that there is an anomaly that must be addressed and resolved, but it would have been unfair for that to impact on the Bill. We know that there must be serious discussion of the problem of the FSA and fees, and I am grateful to the Paymaster General for telling us that she is prepared to listen further to our arguments and to resolve the problem.
The matter must be resolved. The present situation is unjust for co-operative societies, as well as for working men's clubs, Labour clubs, Liberal clubs and Conservative clubs—thousands of clubs throughout the country with thousands and thousands of members. They feel disadvantaged and badly treated by a decision that was not originally theirs. They did not choose to move away from the Registrar of Friendly Societies; it was the result of legislation passed in this place. As a consequence, the societies were harshly treated as regards the fees that they have to pay. The FSA has said that it will do its best to reduce the fees, but the anomaly will remain. I urge colleagues vigorously to pursue the matter with Ministers so that we can find a solution.
I remind the hon. Member for Christchurch (Mr. Chope) that I described the Second Reading as a happy parliamentary occasion; there was unanimity as to the desirability of the benefits that would flow to many thousands of people. We have also seen that today.
Before the introduction of the Bill, we shared the views of that wonderful philosopher Omar Khayyam. He said:
- "Ah love! could thou and I with Fate conspire
To grasp this sorry Scheme of Things entire,
Would not we shatter it to bits . . . and then
Re-mould it nearer to the Heart's Desire!"
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