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As someone who did once petition this House in respect of a private Billa house in London in which I had an interest was over the proposed route of the Jubilee line tunnelI know exactly how valuable the petitioning procedure can be. I point out to my hon. Friend the Member for Bournemouth, West in particular that it normally results not in a full hearing in front of the relevant Committee, but in a compromise between those who feel aggrieved and the promoters of the Bill or instrument in question. It is a safeguard that will probably not normally have to be
exercised through time being spent in the other place. However, the knowledge on the part of the mutual society in question that, if the instrument is potentially hybrid, it needs to ensure fairness among all the private interests affected, concentrates minds and ensures that the society is more likely to satisfy an aggrieved partys complaints in advance.
This procedure does have a very important role to play, therefore, in our parliamentary democracy and, indeed, in our constitution. In fact, that is exactly what happened in the case that I was referring to. As a result of our expressing concern that our houses would subside because of the tunnelling works, our local residents association was given cast-iron guarantees that, if any subsidence occurred, it would be paid for by those building the new Jubilee line. I am pleased to say that in the end, there was no subsidence. However, there were concerns that there might be, and without the private Bill procedure and the opportunity to petition, those concerns might have affected the value of houses in the area because people would have been worried about what would happen if subsidence did occur in future. So this procedure is not merely theoretical, but of constitutional significance.
It is worth telling the House that it is not the case that hybrid orders are never resorted to. First, however, I should point out that I have found three examples since 1 January 2000 of hybrid orders that did complete the hybrid instrument procedure. There were no petitions presented against the London Thames Gateway Development Corporation (Area and Constitution) Order 2004, which was subsequently approved by both Houses. I have not gone into the detail, but perhaps that was because the concerns expressedsimilar to my experience with the Jubilee linewere addressed before the matter reached Parliament. The second example is the Thurrock Development Corporation (Area and Constitution) Order 2003, which was laid before Parliament on 2 July 2003. No petitions were presented against that order, which was subsequently approved by both Houses. The third example is the draft Policing of Airports (Belfast City) Order 2003. Again, no petitions were presented.
In case any of my hon. Friends are now thinking, Well, is this procedure ever used?, I can tell them that it was used in the context of the West Northamptonshire Development Corporation (Area and Constitution) Order 2004, which was petitioned against. The relevant Select Committee considered the matters complained of in the petitions against the order. They were gone into, and eventually the order was approved by both Houses. However, as a result, it was a better order than it would have been, and those who felt that it would particularly disadvantage them were able to have their say.
You will know, Madam Deputy Speaker, that the right to petition this House goes back to time immemorialbefore the time when we began having Government legislation in the way we have it today. I cannot understand the reports in todays papers saying that the Government have not got enough legislation for this House and, that as a result, we will be unable to sit so much next year.
As my hon. Friend the Member for Bournemouth, West has pointed out, there is a problem regarding the time that the procedure can take. However, as I did earlier, I draw his attention to House of Lords Standing Order No. 216A.
hybrid instrument...which, by virtue of the Act authorising it to be made, is, after the expiry of a period prescribed by that Act...to proceed in Parliament as if its provisions would, apart from that Act, require to be enacted by a public bill that is not hybrid...referred to as an expedited hybrid instrument.
A petition...not to affirm an expedited hybrid instrument shall be...deposited...within ten days beginning with the day on which the instrument is laid.
If the Hybrid Instruments Committee is of the opinion that there ought to be a further inquiry, it conducts that inquiry itself, forthwith. After 10 days, if there is some substance to the petition, the matter is inquired into; the Hybrid Instruments Committee does that itself. The procedure could not be used, as has been suggested, by potential rival bidders, although we know from what happens in the real world that such bidders often get up to all sorts of tricks. We have seen that in relation to a recent takeover of a bank, although we shall leave that to one side.
In general terms those who would have wished to petition against a hybrid instrument would be adversely affected, as treating such an instrument as an ordinary instrument precludes the right to petition.
Exactly who those individuals or groups would be would depend on the provisions in the instrument.
That almost goes without saying. This real issue could act adversely against members of mutual societies when they find that their directors have it in mind to sell their interests to other organisations in the European economic area. Those agreed members should have the chance to take advantage of the procedure that I have outlined.
The problem that I have about all this is that if we reject Lords amendment No. 1, it might jeopardise the whole Billit would depend on whether their lordships could be reconvened to accept our disagreement with it. I hope that the Minister will express her good intentions and those of the Government in respect of how those individuals who might be adversely affected will be protected if that cannot be done by the hybrid instrument procedure.
I am worried about the predatory action that may come from some EEA mutual insurers. Mutual insurers are basically known much more on the continent than in our country. I shall now translate a document from French. The international association of mutual
assurance societies is based in Brussels, in what is sometimes described as the heart of Europe. It produced a helpful note on what mutual insurance is and why one must use it. Under the heading opportunities, it identifies the fact that the insurance market is still expanding because the universe of risks is doing so too. That universe is indeed expanding, but those are risks not only that people want to have insured, but they are risks for insurance companies. The larger the risks insured, the larger the risk to those companies. We know what happened to Lloyds members.
What happens when people invest in a mutual savings society and find that that societys interests are taken over by a mutual insurance company which then, in order to buy insurance business, insures things that it should not have done and ends up going bust? Where does that leave the savers in the mutual society originally based in the UK, who may have lost everything? Surely we should safeguard against such a situation. We should be alert to the prospect of predatory action.
Before I turn to the other amendments, may I tell hon. Members that the issue of hybrid instruments was examined by the Joint Select Committee on Delegated Legislation in 1972-73? Those recommendations were accepted by both Houses. The Committee was chaired by the late Lord Brooke of Cumnor, the father of the current Lord Brooke of Sutton Mandeville, whom I had the privilege of serving for a short time as a Parliamentary Private Secretary when he was a Treasury Minister. That is a distinguished family of statesmen.
Mr. Chope: The Joint Select Committee on Delegated Legislation that examined the issue of hybrid instruments said that where those hybrid instruments were such that they might affect individuals, there should not be any removal of the right to use those hybrid instruments. Its concern was that although we have clear rules about what hybrid Bills are and the fact that people have the right to petition for such Bills, the Executive were trying to avoid the hybridity rules that relate to private Bills by trying to use subordinate legislation as the means for getting those hybrid instruments through.
for nearly 50 years provided valuable safeguards for private interests affected by delegated legislation and should be retained.
That is what is important in the context of this debate: that procedure should be retained and not swept away. If it is to be bypassed by the provisions of this Bill, it is incumbent on the Minister to articulate clearly what alternative safeguards will be available to people who might be adversely affected.
I turn to the other Lords amendments in this considerable group. I am grateful to my hon. Friend the Member for Fareham (Mr. Hoban) for raising a number of concerns that I had about their provisions, particularly Lords amendment No. 3. I hope that the Minister will be able to give us assurances about the insertion of a definition of an EEA mutual society, which as I said in an intervention, seems to be at odds with the Bills definition of a mutual society. Surely a UK mutual society is also an EEA mutual society, because the UK is in the EEA.
It would have been much clearer if the same rules applied everywhere. I hoped that the hon. Member for Montgomeryshire (Lembit Öpik) was allying himself with the Eurosceptic cause, but I can understand that his ambitions to become president of his party are unlikely to be realisedin the light of the leadership candidatesif he has such credentials. I do not blame him for suppressing them today. In any case, he expressed concerns and I hope that they will be addressed by the Minister.
Lembit Öpik: Just for the avoidance of doubt, I can hardly be a Eurosceptic given that my parents are Estonian. If I were to express any scepticism about the case for mutuality rules that work effectively across Europe, I would be made a pariah in Tallinn.
Mr. Chope: I hope that the Minister will be able to respond to the concerns expressed. At the moment, the definition in amendment No. 3 of an EEA mutual society is not confined to financial mutuals, but the definition in the Bill relating to mutual societiesin other words, UK mutual societiesis confined to financial mutuals. My hon. Friend the Member for Fareham made an analogy with a mutual wine-growing co-operative. In this country we have a well known and ancient wine co-operative, of which I am privileged to be a mutual member, and that is the Wine Society. If anyone suggested that the Wine Society might be able to take over a building society, people would think that they must be barking. But on the face of it, the Bill would enable a co-operative vineyard in an EEA state to take over a mutual savings society operating in this country.
My hon. Friend also referred in passing to the concerns that have been expressed about cost, including the cost of the Financial Services Authority becoming involved at that vague dividing line between its responsibilities in the UK and how much it could be involved in regulating a mutual based outside the UK. I notice from the financial memorandum that the costs to be incurred would never exceed the costs actually incurred by the FSA, but implicit in that is that the FSA would be able to pass on its full costs to any mutuals involved. Concern was expressed in the other place that that might be a deterrent. I am not saying
that that would necessarily be a bad thing, because it would be good to have some deterrent against all our mutuals being taken over by foreign organisations.
I hope that the Minister will be able to address the point that I put to my hon. Friend at the outset about reciprocity. At the moment, the Bill and the notes on it are phrased to suggest that a mutual society in this country could be acquired by or merged with a mutual society elsewhere. However, it would not appear to facilitate the taking over of a foreign mutual by a UK-based mutual.
I hope that the Minister will be able to address our concerns and give me some assurances, so that we do not have to divide the House and thereby jeopardise the further progress of this important piece of legislation, on which I once again congratulate my hon. Friend the Member for Bournemouth, West.
Philip Davies: I, too, wish to congratulate my hon. Friend the Member for Bournemouth, West (Sir John Butterfill) on getting yet another private Members Bill to this stage. He is on the threshold of getting another one enacted, and that is a considerable achievement.
I have followed the debate this morning with interest. Some of the arguments on the amendments are finely balanced, although my hon. Friend made a persuasive case for their incorporation into the Bill. However, my hon. Friends the Member for Fareham (Mr. Hoban) and for Christchurch (Mr. Chope) also gave some persuasive arguments about why we should be concerned by the amendments. I wish to tease out some of the issues and I hope that the Minister will be able to reassure the House that there is nothing sinister behind the amendments, whether intentional or otherwise.
It would also be helpful if the Minister could clarify which of the amendments are required to comply with EU law and which ones are just thought to be a desirable addition to the Bill. I am not entirely clear which ones we have to accept just to comply once again with our masters in Brussels.
My hon. Friend the Member for Christchurch made a persuasive case that hybrid instruments have stood the test of time. From the Committee proceedings that he quoted, they would appear to have been in place for some 80 years, so the Government need to do much more to explain why something that has stood the test of time for so long and been considered an important part of our procedure should be ditched for the purposes of this Bill. My hon. Friend suggested that that was a slippery slope that might be extended at some point to future issues, so it is important that the principle that hybrid instruments can be brought before the House is considered in detail. I would not like us to ditch something willy-nilly, after a short debate with few Members present on a Friday morning, for the sake of something that is not necessary. I hope that the Minister can clarify why Lords amendment No. 1 is necessary.
My hon. Friend the Member for Bournemouth, West said that he could not envisage anybody who might wish to bring the question of hybridity forward, and the only people who would wish to do so would be mischief makers. My hon. Friend has much experience in such matters, and he may well be right, so I shall not quibble with him. However, it says in the explanatory
notesLord Evans of Temple Guiting made the same point in the debate in the House of Lordsthat
an order under clause 3 could...require an EEA mutual society acquiring a UK mutual to give transferring members full membership rights in the EEA mutual. If the EEA mutual has a unique legal form that might raise a question of hybridity.
That suggests that the Government accept that the Bill might raise questions of hybridity and no one seems to dispute that point. The amendment is merely there to ensure that when a question of hybridity is raised, the hybrid instrument procedure would not apply.
My hon. Friend the Member for Bournemouth, West made the point that the amendment will prevent unnecessary delay and stop mischief makers causing trouble. That may well be right. It strikes me, however, that if the Government are acknowledging that a question of hybridity could arise, the amendment could prevent a necessary delay from taking place. I do not understand what huge advantage the amendment provides that justifies ditching an important tradition that has stood the test of time. The Minister should go into detail to explain why the amendment is necessary. It strikes me that it is required not for us to comply with EU law, but because the Government think that it is desirable. She should make the position clear.
Amendments Nos. 2 and 3 would widen the definition of a mutual society. We had an interesting discussion about mutual vineyard owners taking over financial institutions. The point behind that is important. Proposed new paragraph (c) in amendment No. 3 states that the body is
a body which is a cooperative or mutual undertaking of such description as the Treasury specify by order.
I tend to be cynical about such measures because they are deliberately vague and might allow the Treasury, perhaps at a later date, to do something that was not intended when the Bill was passed. Given that, it would help the House if the Minister made it clear which bodies the Treasury intends to specify by order, and if she made a commitment that that would not be extended without further parliamentary scrutiny.
Sir John Butterfill: My hon. Friend is aware that the Bill provides that all such orders will be subject to the affirmative resolution procedure. Therefore, the House will have the opportunity of discussing them.
Philip Davies: I am grateful to my hon. Friend for once again reassuring me about the merits of his Bill, and that the safeguards are in place. I am sure he would agree, however, that it is important to tease out the full extent of its implications. When we have consensus on a Billand it seems that we have consensus on this Bills meritscertain things can slip through that were not intended when it was originally drafted. As my hon. Friend the Member for Christchurch said, given that we have time to discuss the Bills merits, it is important to make our points clear.
Mr. Chope: Does my hon. Friend agree that to say that something is going to be subject to an affirmative order is not the same as saying that it is like a piece of ordinary legislation, because we will not be able to amend it?
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