House of Commons
Friday 4 April 2003
The House met at half-past Nine o'clock
PRAYERS
[Sir Alan Haselhurst in the Chair.]
The House being met, and the Speaker having leave of absence pursuant to paragraph (3) of Standing Order No. 3 (Deputy Speaker), Sir Alan Haselhurst, The Chairman of Ways and Means, proceeded to the Table.
Orders of the Day
Co-operatives and Community Benefit Societies Bill
As amended in the Standing Committee, considered.
9.33 pm
Mr. Mark Todd (South Derbyshire): I beg to move amendment No. 1, in page 3, line 17, leave out 'and'.
Mr. Deputy Speaker (Sir Alan Haselhurst) : With this it will be convenient to consider amendments Nos. 2 to 4 and 6.
Mr. Todd: It is a pleasure to bring the Bill back to the Floor of the House. It received considerable scrutiny and amendment in Committee, but there have been opportunities to reflect on further issues raised in Committee and outside, which form the basis of the amendments that we shall consider today.
Amendments Nos. 1, 2, 3, 4 and 6 deal with conveyances that were not included in the compass of the Bill. The intention is to ensure that the Bill properly covers important agreements between societies and their business partners. The amendments also deal with the protection of conveyances that charities, which may be co-operatives or community benefit societies, seek to agree. These straightforward amendments should be uncontroversial, based on our experience of debating the Bill so far.
Mr. Stephen O'Brien (Eddisbury): I simply wish to confirm that, in the overall context of the Bill and the debates on it that have taken place so far, I have no objection whatever to the amendment. It seems wholly practical.
The Financial Secretary to the Treasury (Ruth Kelly): Clauses 2 and 3 change the powers and capacities of the societies to facilitate their ability to enter into business transactions. However, there are also exemptions to some of those provisions for societies that are charities.
The rationale is to ensure that the charities' assets are protected and not used for a purpose for which they are not intended. That is in line with the corresponding provisions that already exist for companies that are charities.Clause 2 deals with part of the system of protection for charities. It requires societies that are charities to make their charitable status clear in various documents, including business letters and official publications of the societies. The aim of amendments Nos. 1, 2, 3, 4 and 6 is to provide greater conformity with company law by listing conveyances as other documents where the charitable status of the society must be disclosed. Those amendments also provide for the offences that will be committed where societies or their officers do not comply. Again, that is consistent with company law.
Conveyances could involve societies in significant transactions. It is therefore important that societies that are charities disclose their status. The Bill will then afford charities that comply with that disclosure requirement greater protection for their assets, in the event that conveyances are outside the rules or powers of the societies.
Mr. Andrew Love (Edmonton): Can my hon. Friend confirm whether the changes that she talks about will create the level playing field between industrial and provident societies and companies that is so important for future competition in that sector?
Ruth Kelly: I am very happy to confirm that that is the intention. These amendments should do exactly as my hon. Friend suggests: provide a level playing between industrial and provident societies and companies.
Mr. Gareth Thomas (Harrow, West): Is that absolutely necessary? Although I have argued that many changes in line with companies should be made for industrial and provident societies, may I ask my hon. Friend to give an example of why these amendments are as important as she and my hon. Friend the Member for South Derbyshire (Mr. Todd) suggest?
Ruth Kelly: Yes, it is important that the playing field is completely level wherever possible. I have already given the example that conveyances should be listed as documents where the charitable status of societies must be disclosed. That is the purpose of these amendments in relation to industrial and provident societies.
Mr. Tom Levitt (High Peak): As chairman of the all-party group on charities and the voluntary sector, I take a great interest in the proposals. Can my hon. Friend confirm whether the Bill and these amendments are in line with the Treasury's recommendations on charity law reform generally?
Ruth Kelly: I can confirm that the amendment's intention is to bring industrial and provident societies up to date with the current state of company law, thus providing a level playing field. On those grounds, I commend the amendment to the House.
Amendments made: No. 2, in page 3, line 18, at end insert
'and
(e) in all conveyances purporting to be executed by or on behalf of the society.'.
No. 3, in page 3, line 32, leave out second 'or'.
No. 4, in page 3, line 35, at end insert
'or
(c) executes or authorises to be executed on behalf of the society any document such as is mentioned in subsection (1)(e) of this section,'.—[Mr. Todd.]
Mr. Todd : I beg to move amendment No. 5, in page 4, line 7, at end insert—
'(c) in relation to a society whose registered office is situated in one of the Channel Islands, means a society established for charitable purposes only ("charitable purposes" having the meaning given by the law of the Island in question).'.
Mr. Deputy Speaker : With this it will be convenient to discuss amendment No. 8.
Mr. Todd: These amendments relate to the possibility that a society may be active in the Channel Islands. While the legislation does not relate to the Channel Islands or apply to them, it is not particularly uncommon for societies to trade there and, in some instances, be based there. During the Bill's progress, consultations have taken place with the Channel Islands authorities to ensure that they believe that appropriate provisions are included in the Bill, and they do. The principle behind the clauses amended by the amendments is, as has been said earlier, to provide societies with a level playing field so that they may trade on the same basis and with the same freedoms as equivalent companies. Obviously, there are other matters to consider which have arisen in debate in the House and in Committee, and I am sure that they will come up again on Third Reading, but we are now considering a specific aspect of the Bill. As I have said, the amendments have the support of the Channel Islands authorities.
Mr. Lepper (Brighton, Pavilion): I appreciate that my hon. Friend's amendments relate to the Channel Islands but, not having served in Committee, I should be grateful if he would tell me whether, in previous discussions, any thought has been given to the possibility that businesses in other parts of the world might operate in ways that weaken the protection that businesses in this country would otherwise enjoy? That may be outside the scope of my hon. Friend's Bill, but has any thought been given to it?
Mr. Todd: I thank my hon. Friend for his slightly cryptic intervention, in which he hinted at practices in other parts of the world that may be covered by the Bill. We cannot legislate for other parts of the world, and where societies choose to carry on activities in other parts of the world, those activities are bound by the laws of those countries. The amendments relate only to societies based in the Channel Islands. Some societies
carry on business through agencies in the Channel Islands but, because the Bill does not constitute law within the islands, it does not relate to that.
Mr. Love: Concern has been expressed in the past about the special status of the Channel Islands, and the Treasury has taken great interest in the development of financial services law there. I am thinking in particular of limited liability partnerships. Will my hon. Friend confirm that changes relating to the Channel Islands will not weaken in any way the solid foundations of his Bill?
Mr. Todd: I can confirm that the amendments do not alter in any sense the thrust of the Bill. They apply purely to the Channel Islands authorities, with whom we are in partnership but who, as my hon. Friend correctly states, are in a slightly anomalous legal position. I very much hope that the House supports the amendments.
Mr. Levitt: I am intrigued by the suggestion in the amendments that the definition of charitable purposes may differ from one Channel Island to another. Is that the case, and is there not something to be said for encouraging the Channel Islands to have a common definition?
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