Draft Industrial and Provident Societies (Northern Ireland) Order 2005

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First Standing Committee on Delegated Legislation

The Committee consisted of the following Members:

Chairman:

Mr. Christopher Chope

†Coaker, Mr. Vernon (Lord Commissioner of Her Majesty’s Treasury)
Dodds, Mr. Nigel (Belfast, North) (DUP)
†Field, Mr. Frank (Birkenhead) (Lab)
†Fraser, Mr. Christopher (South-West Norfolk) (Con)
†Holloway, Mr. Adam (Gravesham) (Con)
†Love, Mr. Andrew (Edmonton) (Lab/Co-op)
†Marshall-Andrews, Mr. Robert (Medway) (Lab)
Miller, Andrew (Ellesmere Port and Neston) (Lab)
Öpik, Lembit (Montgomeryshire) (LD)
Ottaway, Richard (Croydon, South) (Con)
†Robertson, Mr. Laurence (Tewkesbury) (Con)
†Rosindell, Andrew (Romford) (Con)
Salter, Martin (Reading, West) (Lab)
†Smith, Angela E. (Parliamentary Under-Secretary of State for Northern Ireland)
Tami, Mark (Alyn and Deeside) (Lab)
†Waltho, Lynda (Stourbridge) (Lab)
†Wright, Mr. Anthony (Great Yarmouth) (Lab)
Alan Sandall, Glenn McKee, Committee Clerks

† attended the Committee

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Monday 19 December 2005

[Mr. Christopher Chope in the Chair]

Draft Industrial and Provident Societies (Northern Ireland) Order 2005

4.30 pm

The Parliamentary Under-Secretary of State for Northern Ireland (Angela E. Smith): I beg to move,

That the Committee has considered the draft Industrial and Provident Societies (Northern Ireland) Order 2005.

It is a pleasure to serve under your chairmanship again, Mr. Chope. This is probably one of the last Committee sittings before the Christmas recess—a fact that may have had a bearing on the number of hon. Members present.

A draft of the order was laid before the House on 14 November. It updates the law governing industrial and provident societies in Northern Ireland to bring the framework into line with that in Great Britain by applying measures from the Co-operatives and Community Benefit Societies Act 2003 to Northern Ireland. Specifically, it inserts into the Industrial and Provident Societies (Northern Ireland) Act 1969 provisions on the registration of community benefit societies and the power to restrict the use of assets, the capacity of a society and the power of committee to bind it, contracts, deeds and obligations, and the execution of deeds and other legal documents.

It may be helpful to give some background. Industrial and provident societies have played an important role for many years in Northern Ireland’s local economy. The Department of Enterprise, Trade and Investment is committed to encouraging the growth and development of the region’s social economy and is leading a three-year cross-departmental strategy to support the sector. The order is a key action of the strategy’s objective to create a supportive and enabling framework that will help strengthen the role played by industrial and provident societies in the social economy, while protecting members’ interests.

According to the most recent available figures from the Northern Ireland registrar of industrial and provident societies, the annual turnover of the industrial and provident sector for the last financial year was more than £440 million. More than 180 industrial and provident societies operate in Northern Ireland, more than 60 of which act as mutual support organisations for stakeholders in the agricultural sector. Societies are by far the biggest component of the industrial and provident sector. They have some 27,000 members and a combined share capital and reserve of more than £112 million. Another 60 are registered as housing associations that carry out philanthropic activities as providers of affordable housing for vulnerable people, such as the elderly.

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Finally, the remaining 60 or so societies do not fall into either category. They pursue a diverse range of activities through bodies such as self-help co-operatives and youth training workshops and have a membership of some 92,000 people.

The order has two main aims: to improve the contribution made by industrial and provident societies to Northern Ireland’s economy by removing outdated legislation that prevents the sector from realising its full potential and to close the current legislative gap between industrial and provident law in Northern Ireland and in Great Britain by updating the relevant provisions in Northern Ireland legislation to ensure that we keep pace with new developments in Great Britain.

In particular, the order stipulates new rules for societies that wish to register as community benefit societies—industrial and provident societies the purpose of which is to carry on business to benefit the local community rather than the membership alone. Previously, the legislation was ambiguous in that area. The order makes the rules explicit to avoid any potential for confusion. It also stipulates a number of new rules governing the procedures that industrial and provident societies must follow when transacting general business. They include measures covering the use of official seals, the capacity of societies, the functions and powers of societies’ committees, and how societies are to deal with legal documents such as deeds. In each case, the measures bring Northern Ireland legislation into line with that in Great Britain, in accordance with the relevant provisions of the Co-operatives and Community Benefit Societies Act 2003.

Lastly, the order also applies the provisions of the Company Directors Disqualification (Northern Ireland) Order 2002 to industrial and provident societies. That resolves the anomaly whereby those who are disqualified as company directors are still able to serve as directors of industrial and provident societies. The order will effectively close that loophole.

Consultation on the policy proposals and the draft order has been completed, and the replies received were favourable. It is essential that the momentum achieved over the past few years in the growth of Northern Ireland’s economy should be maintained and, if possible, enhanced. Northern Ireland’s economy—in particular, the social economy—will continue to grow only if we bring forward legislation that enables and facilitates that growth. This Order in Council contributes to that process by removing current obstacles that impede economic growth.

Industrial and provident societies play an essential role in the economy of Northern Ireland. The Department of Enterprise, Trade and Investment, for which I am responsible, is committed to ensuring that industrial and provident law in Northern Ireland keeps pace with developments in Great Britain, thus allowing industrial and provident societies to make a full and welcome contribution to the future of Northern Ireland’s economy.

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4.35 pm

Mr. Laurence Robertson (Tewkesbury) (Con): I welcome you to the Committee, Mr. Chope. It is a pleasure to see you in your position. It is something of a relief to discuss a smaller matter, having sat for two weeks on the Committee considering the Northern Ireland (Offences) Bill, which was somewhat different from this one in tone and content.

The Minister mentioned that it is Christmas. We want in the new year to see fewer of these statutory instruments and an Assembly up and running in Northern Ireland that can deal with its own matters. It is important that we work towards that.

This is a totally non-contentious piece of business, and it is not my practice to delay Committees for the sake of it. Having considered the order and listened to

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what the Minister had to say—I understand that there were no objections during the consultation—I wish you, Mr. Chope, the staff, hon. Members and particularly the Minister a very happy Christmas.

4.36 pm

Angela E. Smith: I am delighted that my arguments were so convincing. I am sure that my colleagues in the Northern Ireland team will welcome the way in which the Committee has been conducted. I thank the hon. Gentleman for his comments and wish everybody a merry Christmas.

Question put and agreed to.

Committee rose at twenty-four minutes to Five o’clock.



©Parliamentary copyright 2005	Prepared 20 December 2005