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Emily Thornberry (Islington, South and Finsbury) (Lab):
My right hon. Friend the Member for Croydon, North (Malcolm Wicks) would have been as surprised as I was when, on looking into the history of the co-operative movement, I found very little connection with Islington. I know that he has a long-standing
connection with Islington, so he will appreciate how much of the history of the labour and socialist movement began there. The only historical information I could find on Islington that is comparable to Rochdale in this respect, however, was that Thomas Paine wrote the Rights of Man at the site of the current Co-operative bank at the Angel. [Interruption.] I have an excellent researcher, so please leave her a note.
I echo my right hon. Friends comments on the need to look again at the way in which we conduct our time and ourselves on Fridays; if we modernised, we might be able to use our time for the betterment of Parliament.
It is right to look at the history of the co-operative movement and to understand what has happened so far. Although the Bill has been seen as largely technical and of small import in itself, it remains important if it puts the final brick in the wall needed to ensure that the co-operative movement is properly protected and able to fight on a level playing field with other financial institutions. At a time when we are going through such enormous convolutions and have been hit by dreadful threats to our financial system, the co-operative movement and the system of mutual finance is one that we really must look at carefully and protect. I share the aspirations of other Members to ensure that the co-operative movement once more assumes a very important role in the conduct of our business and financial institutions. I commend my right hon. Friend for the support to the movement that his Bill will provide.
Although the history shows that we have moved a long way from the roots of the co-operative movement, many of its core values continue to inform us today. Despite the changes over the last two centuries, co-operatives remain the same in one crucial respect: they exist to provide mutual self-help for their members rather than to generate profit for investors. They have been driven by their core values of ethical behaviour, and the absence of external shareholders throughout the sector means that there are no conflicts of interest between the claims of consumers and owners, leaving co-operatives no incentive to exploit their customers for short-term gain.
When I met the staff and management of the Co-op shop on Caledonian road, I was struck by the pride they have in their store. It is difficult to run a shop in the Caledonian road area and a number of other shops have closed, but the Co-op is committed to ensuring that a shop is maintained there. It offers a wide range of high-quality productsFairtrade products, for example, that perhaps have a wider appeal on the Barnsbury side of the Caledonian roadbut also good-quality cheap goods. The shop has had to increase its security and, in the teeth of opposition from the local Liberal Democrat council, place cameras outside in the street. It has expanded the shop and shown great commitment
I look to you for guidance, Madam Deputy Speaker, but another event took place in my constituency shortly after I was elected. One member of staff at the Co-operative bank at the Angel was killed and another badly injured
as a result of what happened on 7/7. The reaction of the staff and management there was remarkable. They worked with me on arranging a community meeting to celebrate the lives of those killed or injured. Islington continued to pull togetheranother example of co-operative values that we should all be proud of.
I am not a member of the Co-operative party, although frankly I wish that I were. I have made a number of attempts to become a member. When I stood for election in Canterbury and Whitstable, I wanted to stand as a member of the Labour and Co-operative party, but unfortunately
Emily Thornberry: The purpose of the Bill is to remove all legislative obstacles faced by the co-operative and credit union movements, and to level the playing field in relation to other organisations. It represents the culmination of more than 10 years of work done by the Co-operative party in partnership with Government to level the playing field between co-operatives, credit unions and other corporate forms.
The first piece of legislation for the purposethe Bill that became the Industrial and Provident Societies Act 2002was tabled by the then chair of the Co-operative party, Gareth Thomas. It increased protection against the demutualisation of co-operatives, and enabled the Government to use statutory instruments to bring industrial and provident society legislation into line with company and building society law.
The second Bill piloted by the Co-operative party was Mark Todds, which became the Co-operatives and Community Benefit Societies Act 2003. It built on Gareth Thomass earlier Act by providing an asset lock for community benefit societies including housing associations, community child care facilities and football supporters trusts. It prevents the demutualisation of community benefit societies, making them more secure and much more suited to the running of public services. It also addresses a number of contractual and corporate governance issues for societies.
Emily Thornberry: I am grateful for that assistance. I believe that Sir John Butterfill is the hon. Member for Bournemouth, West. His 2007 Act made it possible for different categories of mutual to transfer to each other without demutualising. The success of that Act was key to the proposed merger between the Co-operative bank and Britannia building society.
The long-awaited review of the industrial and provident societies legislation was launched by my right hon. Friend the Member for Normanton (Ed Balls) on Thursday 21 June 2007. It was fitting that the task was performed
by the first Co-operative party Member of Parliament to fill the post of Economic Secretary to the Treasury, as it represented the culmination of 10 years of work by the party to level the playing field for the co-operative sector.
The following June, my hon. Friend the Member foranother hon. Member [Laughter]announced the publication of a number of proposals for legislative reform orders to level the playing field further. The fact that so much legislation can be delivered in this manner is a result of the success of the original Industrial and Provident Societies Act 2002.
The legislative reform orders are due to come before Parliament on 6 April. They will modify the provisions specifying the minimum ages for membership of an IPS and for becoming an officer of an IPS, modify the rules on share capital, modify the provisions relating to the fee paid for a copy of the societys rules, facilitate easier dissolution of registered societies, give societies the flexibility to choose their own year ends, and remove the requirement for societies to have interim accounts audited. A recent legislative reform order announced a series of measures for credit unions. There is also a second tranche of orders to be consulted on and laid before Parliament.
This Bill represents the final piece of primary legislation in the jigsaw, and will tackle all outstanding issues that cannot be dealt with by secondary legislation. It proposes to change the term industrial and provident society to co-operative society or community benefit society. That strikes me as an excellent change, which will make the purpose of such societies much clearer to people. It is felt that the current title is a disadvantage when the aim is to portray societies as a modern way of addressing contemporary issues. Although the change is mainly presentational, it may be crucial to the way in which societies are perceived, and could play a role in attracting funds for investment.
The Bill also applies the provisions of the Company Directors Disqualification Act 1986 to the special circumstances of the mutual sector. There are currently no powers to disqualify the directors of an industrial and provident society under the Act, nor is there any statutory prohibition on disqualified directors from being members of a committee or board of a society. That seems nonsensical to me, and I am very pleased that we shall be able to bring it to an end.
There appears to be no reason not to apply this legislation, which would be helpful in terms of parity and oversight. It would ensure that industrial and provident societies were regarded as a no less reliable source of governance and oversight than other corporate forms, as well as protecting the public interest.
The Bill gives the registrar powers to require the production of information and documents, to appoint investigating accountants, and to wind up societies in the public interest. There are currently no powers to require the production of information and documents, or to appoint investigating accountants in relation to industrial and provident societies. It is important for that to be changed, and for societies to be brought into the 21st century. Such powers exist in relation to both building societies and companies. There are also currently no powers to wind up societies in the public interest, although such powers exist in relation to companies. The introduction of the new powers would also be
helpful in terms of parity of statutory oversight, and in protecting the public interest.
At present, only an Act of Parliament can update credit union legislation in certain respects. The Bill permits the use of statutory instruments when building society law is changed in future to assimilate credit union law with building society law. That may prove crucial in ensuring that credit union law is kept up to date with the latest developments in related fields. There is a credit union in Islington, the Islington and City credit union, which was established in 1997. I hope that we can change the law in order to support that credit union, which is going from strength to strength, so that it can continue to assist my poorest and most vulnerable constituents. There are far too many loan sharks on the streets of Islington, and I wish the Islington and City credit union all the best.
Peter Bottomley (Worthing, West) (Con): The House will have enjoyed becoming familiar with the hon. Ladys speech just as much as I suspect she didwith the bits that were in order, that is. I had not realised that we had to find something written in our constituencies before taking part in the debate. Oscar Wilde came to Worthing for three weeks, where he wrote The Importance of Being Earnest, which has no relevance whatever to this debate.
I should declare an interestor rather not an interest, but a matter of fact. I have a Co-operative bank account and I am a member of the West Sussex Credit Union, which I commend to others. It provides both safe savings and sound borrowings, and I expect many commercial banks to adopt similar principles from now on.
Let me say to the right hon. Member for Croydon, North (Malcolm Wicks), who has kindly nursed the Bill through its stages so far, that he has done an excellent job. If he is thinking of any kind of modernisation, he might suggest that this should be a Government rather than a private Members Bill, although I understand that the various parts of the co-operative movement have had an interest in developing its principles.
If we are going to have to modernise everythingand I note that every candidate for the Speakers Chair is now a moderniserit might be an idea, if a Bill is non-controversial, for the Government to consider inviting members of other parties to put their names to Government Bills to show that it is not a case of one side fighting another or taking all the credit for something. Having offered that thought, which I hope is in order, I shall move on.
Malcolm Wicks: I know that the hon. Gentleman was not implying this, but he will know that my Bill is sponsored by members of the Conservative party and by the hon. Member for Twickenham (Dr. Cable), the Liberal Democrats Treasury spokesman, as well as by members of my party. I understand the other point that he made, and we would welcome Conservative support for one or two controversial Bills that are due to be presented.
The right hon. Gentleman made a serious point in observing that the Bill has been sponsored by two Liberal Democrats and two Conservatives. That is what prompted me to suggest that where there are non-party Bills, even though there may be controversy about parts of them, the Government might consider saying, Why dont we have a big-tent approach to the sponsorship of these Bills, just to show that, behind the principles, there can be all-party agreement?
The focus on co-operative provision of services should not be to the exclusion of the private sector. It is just as possible in the private sector as in the co-operative movement for a failing shop to be taken over by someone who provides a proper service, and for the shop to develop and grow and for its customers to be grateful. Such a private shopkeeper might be a recent immigrant to this country, and I pay tribute to the many people who came here when the Asians were thrown out of Uganda. They showed that such businesses could be successfully established as family concerns, and that they could serve their customers with just the same commitment as those in the co-operative sector.
The co-operative sector has an honourable tradition, and it comes in many forms. A few days ago, there was a function in Parliament for employee-owned businesses. The range of them is much greater than most people are aware of. I do not think they are covered by this Bill, but they are part of the tradition of co-operation or common ownership, and of alternative forms of ownership more broadly.
As the Bill passes to another place, I would like the Government to think about whether the approach summed up in the expression, The Treasury can do this, and that, and the other, is always the most appropriate. I do not argue that it is wrong, but I think that the tradition in our legislation of giving power to the Secretary of State is worth considering. I remember being told by my father, who was at the time a junior civil servant, that he had to get a letter to his Secretary of State, who was in Australia. He arranged with the Royal Mail that it would be taken to Hounslowor whatever Heathrow was called at the timewhere it would be put into the hands of a pilot, who would then fly to Sydney and find the Secretary of State. Two hours later, however, No. 10 asked if it could have the letter backa reshuffle had probably been cancelled, as usualso my father got in touch with the Royal Mail to ask for the letter to be returned. Under whose authority?, he was asked. He said, The Prime Ministers, but he was told that that was not good enough as the relevant Act says the Secretary of State has the power and that this Prime Minister was not a Secretary of State. He was told that the only Prime Minister to have been a Secretary of State was the Marquis of Salisbury, who was Foreign Secretary at the time. As a result, my father had to wander around Whitehall until he found Chuter Ede, the Home Secretary, to whom he said, Excuse me, my name is Bottomley from the Dominions Office, will you please sign this authority to get back a letter from your colleague the Prime Minister to your colleague Viscount Addison? and the letter was then withdrawn from the
mail. I therefore offer the thought that using the expression the Secretary of State allows any Secretary of State to sign a document if and when needed.
The Bill is useful. Most of its provisions are necessary; some are window dressing, but I do not think that that matters too much. The explanatory notes are valuable and they make it plain that the Bill does not change the registration requirements of credit unions themselves. I therefore hope that those in credit unions will see such references to credit unions in the Bill and will not feel that they have a problem with their current registration.
I hope that credit unions such as the West Sussex Credit Union will grow not just in the provision of services for savers and borrowers, but also in order to raise financial literacyI think that is the right expression. I hope that young people will get to understand the range of provision of financial services, and also that the old rules about money are probably the right ones: it is all right to borrow, if it is safe; and it is right to save, but the real reason for saving is not just to get a return on the money, but to have something put by for a rainy day, because, as we all know, summer does not last for ever.
Until now, I have had no dealings with the Bill, so I should start by reassuring the right hon. Member for Croydon, North (Malcolm Wicks) that my presence at the Dispatch Box reflects the day of the week rather than any U-turn on behalf of the Conservative party, because we welcome what is a useful Bill. On a personal note, I would like to extend heartfelt congratulations to the right hon. Gentleman for taking the Bill so far. I have had the pain or privilege of taking a private Members Bill through Parliament: it eventually became the Sustainable Communities Act 2007. Notwithstanding his understandable frustrations at the process, I hope this is a part of his political life that he will look back on with great pride, and perhaps reflect on the irony that so far it has proved easier to change the law of the land as a Back Bencher than it proved to install renewable energy in his home in Croydon despite being Energy Minister at the time.
We welcome this useful Bill. My hon. Friend the Member for Fareham (Mr. Hoban) spoke in support of it on Second Reading. The hon. Member for Islington, South and Finsbury (Emily Thornberry) made an entertaining speechalthough I noted how difficult it was for her to get her mouth around the words, my right hon. Friend the Member for Normanton. She reminded us that the Bill should be seen as the latest in a series of private Members Bills sponsored by Members from both sides of the House that seek to update the legislation on mutuals.
We value the work of mutuals. I do not know whether the right hon. Member for Croydon, North keeps a copy of the Mutual Yearbook 2008 by his bedside, but it is a good read, and it reminds us of the economic importance of this sector. It employs close to 1 million people and has annual revenue of more than £84 billion. It is therefore a sector that has significant economic weight, as well as an important social impact in the country.
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