Clause 2 - Community benefit societies

Part of Industrial and Provident Societies Bill – in a Public Bill Committee at 11:00 am on 13th February 2002.

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Photo of Gareth Thomas Gareth Thomas Party Chair, Co-operative Party 11:00 am, 13th February 2002

The hon. Gentleman is right that these amendments go to the heart of the proposals in the clause. He failed to acknowledge the flexibility that the provisions continue to make available to members of community benefit societies. Assets that have been built up to be used for the benefit of the community by many members over many generations should be protected. He is right, however, that members' different economic circumstances and interests may mean that it is appropriate to change the way in which the assets are used.

I shall return to the example of the Royal British Legion club that was used in the debate on amendments to clause 1. If a club's economic circumstances mean that it is timely for it to sell one of its main buildings, clearly, current members of the society should have the right to make that judgment. Clause 2 would not prevent that; it would simply prevent the money raised from such a sale from being handed out to current members of the society.

Another possibility is that, despite the opportunity for associate membership and for non-members of the armed forces to join, a club might be nearing the end of its useful life. If the society wanted to wind it up and the members were considering what to do with the assets in the bank after the sale of the club and other property, the only course of action that clause 2 would prevent would be their keeping the money. They could give it to a charity or to another community benefit society, or even to a company if it had appropriate limited purposes. Clause 2(1)(c) would still provide for considerable flexibility. The only thing that it would prevent the membership from doing would be distributing the assets among themselves.