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4 Apr 2003 : Column 1187—continued
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The importance of comprehensibility is stressed in the strategy unit's report. There is little recognition of the advantages of industrial and provident societies. If they were known as co-operatives and community benefit societies, people would have a much better understanding of what they were. There is also little
recognition of the difference between industrial and provident societies and companies. Most people have a vague idea of how a company operates, with shareholders and shareholder value and profits and dividends; but they have no real understanding of the nature of an industrial and provident society. We must also do something about the weak branding and the negative image. A critical factor in that is modernisation of the language.Industrial and provident societies face other problems in the marketplace: the lack of protection for their assets, for instance, and the threat of demutualisation, which is always there. They also have difficulties in raising money. I used to be a member of a revolving loan fund for co-operatives. Co-operative after co-operative used to tell us of the impossibility of raising money from bank managers or any other financial organisations, because no one understood what co-operatives were all about.
A good deal of complexity is involved in industrial and provident societies. My hon. Friend the Member for Harrow, West has concerned himself in recent years with the problems of registration—the cost, and all the time and effort that must be put in.
Mr. Lepper: My hon. Friend mentioned the brand image and the use of the word "co-operative". Is not a prime instance of that word's attractiveness the success of the Co-operative bank over the past few years? It has assets of £5.5 billion and more than 4,000 staff, and has gone from strength to strength. Many people have moved their accounts to it because of the appeal of the name, and the sense of community benefit and ethical trading that they gain from it.
Mr. Love: The Co-operative bank is indeed a brand leader in its financial services sector. It established free banking some time ago, and it continues to set standards for the rest of the industry. I also pay tribute to the Co-operative Insurance Society, which works closely with the bank. It has done much, in a variety of ways, to establish a more ethical stance for financial services organisations—and the word "co-operative" is central to its activities. That underlines my point that if we are to improve the image we must change the language. The current image engenders a lack of trust and confidence because of the outdated language.
Costs arise because of the way in which industrial and provident societies are composed, and because not enough people choose them rather than companies. As I have said several times today, a level playing field must be created between all the different organisations in the economy: that is crucial to the future of industrial and provident societies. It is easy to see why so many new companies are formed each year and so few industrial and provident societies. In fact that would probably happen anyway, but I think many people who are not opting for industrial and provident societies now would do so if we only modernised the language.
The company law review has been mentioned. There have been a number of Companies Acts in recent years, but since 1965 there has been only one piece of industrial and provident society legislation, initiated by my hon. Friend the Member for Harrow, West. Let us hope that this will be the second. Both, however, have been
instigated by private Members, and have been given very little time in comparison with measures relating to company law and law reform, and indeed the review with which we shall be presented in the near future.I pay tribute to both my hon. Friends for their Bills. I am particularly impressed by this Bill. The proposals relating to assets in clause 1 are at the cutting edge of modernisation of industrial and provident society law. If the legislation is to succeed, however, we must also be at the cutting edge of linguistic change. Not only will my amendment take the language of industrial and provident societies into the 21st century. but; "Co-operatives and Community Benefit" will give people a more accurate picture of what is entailed in the establishment of such societies, what they are and what they do. The sector will also become much more relevant to the economy, and, hopefully, will be given an impetus to involve itself in different parts of the economy.
I believe that my proposed new title is both user-friendly and public-friendly.
Mr. Stephen O'Brien: It comes as no surprise to me, as a fellow member of the Institute of Chartered Secretaries and Administrators, to hear such a fine speech—entirely in order, or you would have pulled him up, Mr. Deputy Speaker—from the hon. Member for Edmonton (Mr. Love). He spoke for even longer than the Bill's promoter.
The hon. Gentleman said that this issue was mentioned on Second Reading. As he will recall, it was very much mentioned in Committee, and as he knows, I support him. I too have been ably supported by the Co-operative Group. I thank Peter Hunt, of that organisation, for his briefing—and, not least, I thank my constituent Mr. Martin Beaumont, the chief executive, for his.
Without wishing to go down the highways and byways of the great historical treatise that we have been just treated to, it would be highly desirable to change the name to the Co-operatives and Community Benefit Societies Bill. In fairness, it was touched on in Committee. Despite the extraordinary thoroughness of the presentation by the hon. Member for Edmonton, it is, as he said, only a probing amendment. That said, it was, to say the least, an exceptionally good exploration of the subject.
It would be wrong not to record that the Minister said in Committee that the Government were not opposed in principle to the idea but that there were genuine technical issues about changing the name of legislation that belonged to a family of legislation with a long history. With the best will and intent, and the unquestioned skills not only of parliamentary draftsmen but of all the advisers with a view on these matters who work in Government Departments, it is possible, given all the cross-references, notwithstanding the technology available these days through electronic reading, to miss something and have difficulty in achieving the consistency required.
It is certainly a worthwhile project. It could be used as a model of how to try to update the titular effect of Bills, equivalent to the tax law rewrite. It might be useful to review what is on the statute book and where titles can
be changed, not least because we would realise how much law could be repealed. It would be desirable to make the statute book less long.In looking at the new name for the Bill, I could not help but feel that there was a certain equivalence when news was brought to me on the Front Bench this morning that the right hon. Member for Hamilton, North and Bellshill (Dr. Reid) has been appointed Leader of the House. He had a great record—I pay tribute to him—for being a man of communities benefit when he was Secretary of State for Northern Ireland. I like to think that we can all benefit from the community of interest that he will seek to introduce, in one of his new roles, in safeguarding the interests of all hon. Members. Both I and my party offer our congratulations on his transfer.
When I looked at the other aspect of the recommended name, the co-operative side, I was reminded of the announcement of the new Labour party chairman, who has a particular—
Mr. Deputy Speaker: Order. I think that the hon. Gentleman has paid tribute enough for the moment.
Mr. O'Brien: I might possibly have to crave your indulgence, Mr. Deputy Speaker, because I feel that I have left Labour Members on tenterhooks as to who the new chairman of their party is—
Mr. Deputy Speaker: Order. I am sure that hon. Members and the House as a whole are more intent on seeing the successful completion of this debate than on any other consideration.
Mr. O'Brien: I will do nothing more than allude to the fact that the right hon. Member for Makerfield (Mr. McCartney), a man of the most co-operative style, is the new chairman of the Labour party.
I am happy to say that I and indeed my party, as part of the consensual approach that has been adopted throughout the Bill's proceedings, favour the idea of the change of name, if it can be achieved in a technical and thorough manner. It is, therefore, appropriate that the hon. Member for Edmonton has suggested that the amendment is a probing one. It would be difficult today to give a conclusive view for the Government; the Minister mentioned the difficulty when we looked at the matter in Committee. With a flag that we would like the proposal to move forward and hope that there will be a thorough exercise, at this stage of the Bill we are keen that the hon. Member for Edmonton should seek to withdraw the amendment once we have had an opportunity to explore the issues.
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Mr. Gareth Thomas: I hesitate to gatecrash the love-in between the two members of the Institute of Chartered Secretaries and Administrators. I congratulate my hon. Friend the Member for Edmonton (Mr. Love) on the way in which he has introduced the amendment and the hon. Member for Eddisbury (Mr. O'Brien) on initiating a discussion on the issue in Committee. I, too, accept that this may have to be a probing amendment; some miserable lawyer somewhere may find reason to object to what is an entirely sensible provision, which, as my
hon. Friend said, is recommended in the Government's strategy unit report into the charitable and not-for-profit sectors.Hon. Members who have had the opportunity to introduce a private Member's Bill will recognise that many members of their constituency party often take a profound interest in the subject that they seek to take forward. Last year I approached a number of my party members and explained that I was introducing a Bill to amend the Industrial and Provident Societies Act. I was disappointed somewhat by the blank look on the faces before me. Having had representations from those party members to ban fox hunting or to amend various other legislation, there was some disappointment that I was seeking to do something to legislation that they had not even heard of. That gives some indication of the problems that the amendment seeks to deal with.
Once I had got over that disappointment and was researching the types of organisations that would be affected by the legislation, I discovered that a series of organisations such as rugby clubs and women's institute country markets were industrial and provident societies. When I got in touch with my local women's institute country market and my local rugby club and asked "Are you a company or an industrial and provident society?", they had no idea what an industrial and provident society was. I only discovered that they were registered under that legal form in discussion with their parent bodies. That shows some of the difficulties that a failure to modernise the terminology to describe this form of community organisation causes that sector. It is long overdue that we bring into the 21st century the terminology that we use to describe community businesses.
The Government's intention to legislate to create a community interest company is an entirely sensible, albeit separate approach, to other forms of community businesses. I hope that we will hear from my hon. Friend the Minister a similar commitment to modernise the legislation in this way.
My hon. Friend the Member for Edmonton has done the House a service by seeking in his amendment to restate the case for sensible legislative change. I hope that, if we cannot reform the legislation in this way now, we will have an early commitment from the Minister to initiate the change that we want to see.
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