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The Bill is, in part, about the governance of credit unions and other financial mutuals and I have one last question for the Minister relating to governance. In our Second Reading debate in July, the noble Lord, Lord Myners, told the House that the Treasury had asked Sir David Walker to extend to mutuals his review of corporate governance of financial institutions. This seemed to be a most interesting development and so I looked carefully through Sir David's helpful report, which was issued late last month. As far as I can see, he has not addressed himself to financial mutuals. I searched the rather lengthy document with a search tool and could find no reference to building societies, none to credit unions and only a few references to the word "mutual". The only organisation with the word "mutual" that comes up in the search is "Old Mutual plc" which, as I am sure noble Lords know, is not the kind of mutual that we have been talking about today.

I know that it is a slightly unfair question to the noble Lord, Lord Faulkner-who is the Minister today-because he is not the noble Lord, Lord Myners, but he will be able to help the House with whether Sir David Walker will produce anything about governance in financial mutuals. If that is not the case, what will the Government do to ensure that high standards of governance in financial mutuals, corresponding to those developed for banks and other financial institutions, exist?

I know that the noble Lord, Lord Tomlinson, is now interested only whether I shall table amendments to the Bill, so I shall conclude by offering my Christmas gift to him and say that I have no intention of tabling any amendments to the Bill.

11.11 am

Lord Faulkner of Worcester: My Lords, I think that the final words of the noble Baroness's interesting and supportive speech will be a Christmas present for everybody in the House. It will come as no surprise to her and the rest of the House that the Government fully support this Private Member's Bill, so ably introduced by my noble friend Lord Tomlinson. We have noted that support for it has come many from parts of Great Britain represented in the Chamber today: from Scotland, from Wales, from the Church and, in a very spirited way, from the north-east of England. We learnt about the role of the co-operative movement in ensuring that my noble friend Lord Graham got to the 1951 cup final.

Lord Graham of Edmonton: And we won.

Lord Faulkner of Worcester: My Lords, the Government recognise the need to develop the legislation affecting co-operatives generally. This Bill makes a valuable contribution in improving governance and administrative arrangements, which are lacking in the current legislation.

A number of noble Lords, particularly the noble Lord, Lord Kirkwood of Kirkhope, and the noble Baroness, Lady Noakes, referred to the legislative reform order. I can answer their questions straightaway. The LRO process and the Bill process are quite separate, and one is not dependent on the other. With the LRO,

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there is a 60-day super-affirmative resolution procedure. My understanding is that the next committee scrutiny is on 13 January, followed by another on 19 January.

The noble Baroness asked whether the Bill has a chance of becoming law before an election either in late March or in May. It is hoped that it will receive Royal Assent in March, which will mean that there is a possibility that commencement on Clauses 1 to 3 will be undertaken before the election, but, as she pointed out, Clauses 4 and 5 will provide specifically for consultation with the sector, so their implementation will be after the election.

The noble Lord, Lord Kirkwood, made the fair point that this should perhaps be a government Bill rather than a Private Member's Bill. I agree with him about that, but given the pressure on the Government's timetable, it seemed to make much better sense to proceed with a Private Member's Bill today and as rapidly as possible so that we could progress this legislative reform of industrial and provident societies immediately. There is obviously nothing to stop a future Parliament coming back to the subject.

As many noble Lords have said, a Bill similar to this one was introduced in the previous Session-it was passed unamended in the other place. I am delighted that so many speakers in today's debate have drawn attention to this House's role in exercising scrutiny on it. The Delegated Powers and Regulatory Reform Committee, the Constitution Committee and particularly the noble Baroness, Lady Noakes, all made proposals which have strengthened and improved the Bill considerably. That the two committees and the noble Baroness have exercised the opportunity to scrutinise in this way and propose changes and improvements is very much to the credit of this House. I endorse the comments of other speakers to that effect.

The Bill was criticised in a number of ways, particularly in terms of consultation on measures that would have been introduced via secondary legislation. It was criticised also because it created the risk that new criminal offences and higher penalties might be introduced when assimilating either company law into the industrial and provident society legislation, or building society law in relation to credit unions. The Bill in front of us today takes account of those concerns.

The Delegated Powers and Regulatory Reform Committee commented on the new Bill in its report published on 3 December. The committee expressed the view that issues to which it had drawn attention previously concerning offences and penalties are addressed satisfactorily in the new Bill. Likewise, in a report issued only yesterday, the Constitution Committee confirmed that it was satisfied with the safeguards added to the Bill in its present form. It welcomed the new provisions at Clauses 4(7)(b) and 5(1), which address the specific concerns raised in respect of those clauses. It also accepted the explanation provided by the Financial Services Secretary to the Treasury concerning the operation of a power conferred on the Treasury to make consequential amendments to legislation under Clause 6. Having originally expressed concern that provisions requiring amendment should be identified before the introduction of the Bill, the committee accepted that the number of consequential amendments

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required, particularly as a consequence of the renaming of industrial and provident societies as co-operative societies or community benefit societies, are such that this would be impractical and that the power in Clause 6 is in line with current practice. The committee is content for that clause to remain as originally drafted.

The noble Lord, Lord Newby, raised a question about the letter of my noble friend Lord Myners to the BBA. I am afraid that I am unable to give him an answer on that; I certainly have not seen a reply. If one has not been received, we shall chase it up, and if one has been received, we shall make sure that it is available to the House.

Across the United Kingdom, mutuals have a membership comprising more than 30 million individuals and provide a viable alternative to the proprietary company model. I certainly endorse all the good things that have been said about mutuals and credit unions in the debate today. The co-operative-and-community-benefit-society form of mutual, being self-help and community-focused-so well described by the right reverend Prelate the Bishop of Salisbury-are owned and run by their members for their members. Mutuals, in the form of credit unions, instil and encourage a savings culture among their members. They play an important role in supporting and promoting many government initiatives such as ISAs and child trust funds. I very much endorse the views of the noble Lord, Lord Kirkwood, about their value. I should at this stage declare a personal interest as an account holder at the Co-operative Bank who can remember his account number, but, I am afraid, not his dividend number.

The noble Lord, Lord Newby, referred to how the Post Office could play a bigger role. We would very much like to look at that. The Co-operative Bank already has a close working relationship with the Post Office, and post office branches accept credit payments made in Co-operative Bank envelopes. I am sure that that co-operation can be built on.

Mutuality is appealing to many people, but the market share that mutuals have earned has been restricted because the law governing their operation has not kept up with company and charity reforms of recent years. The Government recognise this and wish to modernise and update the legislative and regulatory framework to meet the current and future requirements of the mutuals sector. The LCO is a further example of how we are taking this forward.

The Bill seeks to update the legislation for co-operatives, community benefit societies and credit unions. The proposed changes are welcomed by the sector and come as a result of the Treasury consulting on these issues and listening to what the sector says that it would like. The sector is highly regarded by the Government, and we want to see mutuality thrive and grow. We want to see mutuals continue to offer greater choice and diversity in the financial sector and continue to make a valued and significant contribution to the nation's economy.

I hope the House will agree that the changes that have been made to this Bill, compared to the one that we considered in the previous Session, are both necessary and proportionate and that they will help to further

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enhance confidence in the sector and engender good corporate governance. I feel that they make what was already a good Bill a great deal better.

I am conscious that I have not answered the very last of the noble Baroness's questions and have a feeling that it may not be possible for me to do so this morning. However, I hope that she will allow me to write to her in the course of the next few days and give her the answer that she deserves. More than anybody else, she has helped to improve this Bill and the very least that she can expect is a sensible answer from me and the Government.

There has been cross-party support for the proposed measures. I hope that this will continue for the passage of this Bill. I and delighted to know that the noble Baroness will not be tabling any amendments in Committee. I repeat the Government's gratitude to my noble friend Lord Tomlinson and commend this Bill to the House.

11.21 am

Lord Tomlinson: My Lords, I briefly thank everybody who has participated. When the noble Lord, Lord Kirkwood, spoke at the beginning, he made the sort of speech that I should have liked to make-the ideological case for co-operatives, mutuals and community benefit societies-but I had a fairly self-denying ordinance today, believing that my greater duty to the House was to make sure that I got the Bill through Second Reading with the support that, subsequently, we have seen. I am particularly grateful for the words of the noble Baroness, Lady Noakes, to whom I have already paid tribute, although I must stop making this look like a love-in. I was very grateful to hear from her that it is not her intention to table amendments so we can look forward to the Bill receiving a smooth reading.

I have one thing to say. There has been a lot of emphasis on credit unions from the right reverend Prelate, the noble Lord, Lord Elystan-Morgan, and my noble friend Lord Graham. There has been a lot of emphasis on the small-scale nature of co-operatives and credit unions. Let me just disabuse that slightly towards the end. Not all the business covered by the Bill is small scale. This morning I listened to Peter Marks, the chief executive of the Co-operative Group, on the radio. He was talking about the merger of the bank with the Britannia Building Society to form one of the biggest financial institutions in the country. He referred to the fact that the Co-operative Group is one of the United Kingdom's largest farmers and the country's fifth-largest supermarket. Although in the credit union sector a lot of the work is small scale, it is our ambition to see it grow and become greater. I am interested in the ideas put forward by noble Lords about the role that the Post Office could have in that development. But let us not think of co-operatives as being only small scale; they are very large-scale players in the economy, and the legislation is necessary for the stability of the large part of the sector as well as the potential for growth from the smaller parts.

I thank everybody who has participated. It is my pleasant duty to commend the Bill.

Bill read a second time and committed to a Committee of the Whole House.

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Contaminated Blood (Support for Infected and Bereaved Persons) Bill [HL]

Bill Main Page
Copy of the Bill

Second Reading

11.24 am

Moved By Lord Morris of Manchester

Lord Morris of Manchester: My Lords, I beg to move that the Bill be now read a second time.

We are met to debate a measure conceived and drafted to give solace and support to arguably the most needful minority in Britain today. A small and stricken community of barely 5,000 people-already disabled by a rare, lifelong blood disorder requiring continuous medical treatment-haemophilia patients have twice been infected en masse by contaminated blood and blood products used in their NHS treatment. Ninety-five per cent were infected with hepatitis C and one in four with HIV.

Of the 1,243 haemophilia patients infected with HIV only 361-29 per cent-are still alive; and the much higher number of deaths among the hepatitis C-infected patients is still increasing. As of now, an estimated 1,974 haemophilia patients have died from being infected by contaminated NHS blood and blood products in this worst-ever treatment disaster in the history of the NHS. If anyone disputes that assessment, they should look at the finding of distinguished statisticians that the disaster involved the haemophilia community in a loss of life more savage in proportion to the numbers of people at risk than the Black Death. While stigma is less explicit today than the warning cross scrawled on a plague-victim's door, it is no less cruelly oppressive in terms of social exclusion at a time of direst need.

Yet even the grievous and still ascending death toll does not tell the whole story of the suffering inflicted on the haemophilia community. As my dear and inspirational friend the noble Baroness, Lady Campbell of Surbiton, whose husband was among the haemophilia patients fatally infected, so movingly said in this House on 23 April, the history of the disaster is one of unspeakable suffering also for,

For parliamentarians, there can be no higher duty than to ensure just treatment and due care for people afflicted and bereaved by life-threatening medication supplied by the state; but as participants in this debate know, infected haemophilia patients, many of them now terminally ill, also suffer privation at a depth most other people can barely imagine. They speak day by day to me of no longer being able to work full-time, if at all; of having been made uninsurable by the prohibitively expensive premiums demanded of them by insurers; and, among numerous other burdens, of costs generally being too high for them to cope with.

I am most deeply grateful to all noble Lords who will be speaking in the debate, including my good and noble friend Lady Thornton, who will be replying for the Department of Health. Her awareness of the depth of anguish and despair in the haemophilia community is well understood across the House.

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I want at the outset today also most warmly to congratulate my noble and learned friend Lord Archer of Sandwell on the highly prestigious Outstanding Achievement Award he received at this year's parliamentary awards ceremony three days ago. The award was backed by a very wide range of charities, as well as by Members of all parties and of none both here and in another place, for parliamentary service of the highest distinction, and nowhere is that distinction more clearly exemplified than by the landmark importance of the independent public inquiry he headed into the contaminated blood disaster.

I have two interests to declare in the debate, not pecuniary, as president of the Haemophilia Society and as the architect of the inquiry conducted so skilfully and with such excelling integrity by my noble and learned friend. As he knows, I am grateful beyond words both to him and his colleagues on the inquiry team: Dr Norman Jones, emeritus consultant physician at St Thomas's Hospital, and Judith Willetts, chief executive of the British Society for Immunology. No inquiry team could possibly have shown more commitment or have been more eminently qualified for the arduous task they so readily and so ably undertook, entirely without remuneration.

I will comment on the Bill clause by clause as we proceed but, taken together, they transform the Archer report into the language of legislation; and my purpose in working during the Summer Recess to prepare this Bill, with unstinting help from Sarah Jones of the Public Bill Office, and on medical issues from Dr Norman Jones, was to guarantee parliamentary time for this House now to debate the Government's response to the report of the inquiry.

Together with noble Lords who took part with me on 28 April in a debate to amend the Health Bill then before the House, I thought that we had an assurance very close to that guarantee from my noble friend Lord Darzi. Speaking for the Government and having just announced that their response to the Archer report would be published at an early date, he went on:

"Furthermore, we will of course assist as far as possible in securing a debate on the Government's response".-[Official Report, 28/4/09; col. 143.]

Yet in the three months that then elapsed before the Summer Recess there was no sign anywhere on the parliamentary horizon of a debate being arranged. So there was nothing precipitate in my decision to spend much of the Recess addressing the tasks involved in having this Bill ready for a First Reading in your Lordships' House by 19 November. Indeed, it was then already nine months after publication of a report whose recommendations were vitally urgent to afflicted patients and bereaved families on the day they were published last February.

The privation I have described among those affected is addressed in Clause 4 of the Bill, which deals specifically also with the crudely discriminatory treatment now of widows of infected patients in deciding whether they are eligible for financial help solely on the basis of when their husbands died, even where they died within two days of each other from exactly the same cause. The ending of that discrimination was one of the issues of long-standing concern to the haemophilia community strongly and repetitively emphasised in

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evidence to the Archer inquiry. I mention it first today, in referring to Clause 4 of this Bill, because several of the widows excluded from help who wanted very much to be here for this debate have contacted me to say that they simply could not afford the fares-and at a time when just five NHS officials are seen to have been paid a total of almost £6 million over the past year.

Clause 4 addresses the whole range of compensation issues and has been welcomed as fair and balanced by commentators on social policy of wide experience, as was the Archer report itself all across the media. Everyone knows that there will be costs in giving full effect to the report, but there will also be priceless benefits in enabling haemophilia patients to live fuller and more fulfilling lives. Clause 1 of the Bill creates a widely empowered statutory committee, with patient and family representation, to advise government on the management of haemophilia; and Clauses 2 and 3 deal with blood donations and improving medical care, while Clauses 5 and 6 are about monitoring progress and the effects of regulations made under the legislation.

Turning to issues not dealt with in the Government's response to the Archer report, but worthy of close attention in this debate, there is the spectre now of a third deadly scourge facing haemophilia patients. In response to Parliamentary Questions about the growing number of haemophilia patients known by the Department of Health to have been treated with blood from donors who have since died of variant CJD, I was told on the authority of the Chief Medical Officer that the risk of infection in such circumstances was purely "hypothetical". That demonstrably is not the case today, a post-mortem on a hepatitis C-infected patient having found variant CJD in his spleen; and Ministerial Statements made to Parliament on this further scourge urgently need updating. We also need to know how the Government now assess the variant CJD threat to the haemophilia community.

As the House knows, the Archer report is about more than the unmet needs of infected patients and bereaved families. It addresses also highly disturbing administrative shortcomings, serious omissions and a failure to inform Parliament of the facts on why provision made in other countries is so much better than here in Britain. For example, there is no mention in the Government's response of the Archer report's findings on the behaviour of the Blood Products Laboratory in failing to comply with requirements of the Medicines Act 1968. This is a hugely important issue as is that of the effect of using Crown immunity to avoid any question of legal redress.

The Archer report states:

"In July 1979, the Medicines Inspectorate visited BPL, following which they reported that the buildings were never designed for the scale of production envisaged and commented that, if this were a commercial operation, they would have had no hesitation in recommending that manufacture should cease until the facility was upgraded to a minimum acceptable level".

Starkly, the Archer report then states:

"BPL was rescued by Crown immunity",

adding that:

"BPL's existing plant continued production, relying on Crown immunity to dispense with all the requirements of the Medicines Act, but was able to meet only 40 per cent of the national requirements".

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That can only mean that by the use of Crown immunity, a relic of feudal England, the lives of countless haemophilia patients were put blatantly and gravely at risk.

The seriousness of this had already been underlined by my noble friend Lord Darzi himself. When responding to exchanges about thalidomide on 16 March he referred to,

Could there be any clearer text than that for condemning the BPL's use of Crown immunity to dispense with all the requirements of that renowned and so vitally important statute?

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