Lords amendment: No. 7.

I beg to move, That this House
agrees with the Lords in the said Amendment.

The Channel Islands and the Isle of Man were not included within the scope of the original Bill. It is my understanding that it is usual for us to consult them before making legislation that would affect them. It is also my understanding that they have indicated that they would like to be included within the legislation, but no doubt the Minister will able to confirm that. I can see no reason why the Channel Islands and the Isle of Man should be excluded. If the rest of the EEA is included—they are, of course, outside the EU—they should, as part of the United Kingdom, be included.

I feel duty bound to ask whether the Amendment, if passed, would make it more difficult for a financial mutual in the United Kingdom to enter into a merger agreement with a kipper-making co-operative on the Isle of Man.

I doubt it, is the answer. We have heard all sorts of strange suggestions as to who might merge with whom. All such mergers would require approval by the Treasury and the FSA. I am reassured that they are sensible enough to make sensible decisions.

Can my hon. Friend tell us when he first approached the Channel Islands and Isle of Man authorities to find out whether they wanted to be included in the Bill and why it was not apparent at the outset, when he first launched it, that they wished to be included?

I did not approach them myself—I understand that they were approached by the Treasury and asked to be included, but perhaps the Minister could confirm that.

Few people would wish to quibble with Lords Amendment No. 7. However, I hope that the Minister will both respond to my question about how it came about that those authorities wanted to be included in the Bill at such a late stage and say what she sees as the implications of that. We quite often hear complaints in the House that a different regulatory regime operates in, for example, the Channel Islands or the Isle of Man from that which Parliament imposes here, and that that regulatory regime is often less protective of consumer interests. For example, the other day I attended a breakfast at which the issue of health supplements was raised in that context. Concern was expressed that the Channel Islands' regime for regulating health supplements was rather different from that which applied in the UK. What guarantees can the Minister give that the implications of extending the Bill to the Channel Islands and the Isle of Man are compatible with being able to look after the best interests of individual investors or members of mutual organisations?

I, too, would like to raise a query that I hope the Minister can address. Lords Amendment No. 7 says:

"Her Majesty may by Order in Council provide for any of the provisions of this Act to extend, with or without modifications, to any of the Channel Islands or to the Isle of Man."

I suspect that that is standard wording for a Bill of this nature. However, I understand that not all the current legislation covering mutuals is so extended to cover the Channel Islands and the Isle of Man. I wonder whether the Minister could touch on which legislation is and which is not, and what implications that might have, as I understand that all previous legislation at least has the capacity to include the Channel Islands and the Isle of Man. Perhaps the Minister could therefore clarify whether the amendment would, as a matter of course, apply to the Channel Islands and the Isle of Man or whether it just means that it could apply them, should they so wish at a future date.

I shall be happy to provide that clarification. My understanding is that the drafters of the Bill had not spotted the fact that other, similar types of legislation applied to the Channel Islands and the Isle of Man. When the Bill was being discussed in the House, during its earlier stages, there was not time to make the necessary consultations. We have a policy not to introduce such permissive extent clauses without consulting those involved—in this case, the islands—first. That has now happened and I am happy to confirm that they are content with being included, hence the Amendment. I hope that that will answer the point raised by Sir John Butterfill.

I also understand that the Industrial and Provident Societies Act 1965 applies to the Channel Islands, and that there are powers to apply the Friendly Societies Act 1992 to the islands and the Isle of Man, which have not been fully used.

Does the Minister anticipate that Orders in Council will be issued at some point?

My understanding is that this measure will make that possible, but I am not in a position to say whether it will actually happen. However, everyone is happy with the situation.

Given that the Minister has told us that discussions have taken place with the Channel Islands and, possibly, the Isle of Man, can she tell us whether this point was ever raised either by the Government with them, or by them with the Government?

I know that the islands' authorities were consulted and were content with the proposed Amendment. I shall be happy to provide further details at a later stage if the hon. Gentleman considers that necessary.

Will the Minister give way?

I will give the hon. Gentleman one last go.

Bearing in mind the uncertainty about the timetable, will the Minister tell us whether it will be possible for the Channel Islands and the Isle of Man to implement the provisions of the Bill before the United Kingdom Government implement them?

I am not sure whether that would be possible, but I can see no difficulties arising if it were to happen.

Will the Minister give way on that point?

The hon. Gentleman is being extremely persistent. I will take one further Intervention.

I am grateful. I was most interested to hear the Minister's response to my hon. Friend Mr. Chope. Surely neither the Channel Islands nor the Isle of Man could implement the legislation before the British Government had done so, because it would be the British Government's implementation of the different phases of the legislation that would trigger any subsequent actions that might flow from it.

I apologise for not being a world expert on the legal situation relating to the Channel Islands and the Isle of Man. I shall clarify the situation. The Amendment will allow the Bill to be extended to the islands. It will be used only if the relevant mutuals legislation is extended, and it will then affect only those mutuals established in the Channel Islands and the Isle of Man. No time frame has been agreed at the moment; that will be sorted out during the consultation period. I must also apologise to the House and clarify that the Isle of Man could not implement the provisions before we had done so.

I commend Lords amendment No. 7 to the House.

Lords amendment agreed to.