Clause 2 - Community benefit societies

Part of Industrial and Provident Societies Bill – in a Public Bill Committee at 10:45 am on 13th February 2002.

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Photo of Chris Grayling Chris Grayling Conservative, Epsom and Ewell 10:45 am, 13th February 2002

I shall follow up on the thoughtful amendments tabled by my hon. Friend the Member for Christchurch. On Second Reading, I raised my concerns about aspects of the clause with the hon. Member for Harrow, West. Some of those concerns are addressed by the amendments.

I fear that by enacting the clause as drafted, we would place undue constraints on organisations throughout the sector without full knowledge of the implications of those constraints. For example, two clubs might choose to merge, dispose of the assets of one of them and redistribute those assets to their members. Equally—I am thinking of the case of the Co-operative Society a few years ago—one can imagine that a mutual organisation could be liable to attack by corporate raiders. There are pros and cons on both sides of the argument.

If we set in stone provisions to constrain the actions of organisations, we will place undue restriction on their development, change or evolution. An organisation might, for example, wish to dispose of its assets and become a virtual organisation, or choose totally to restructure the way that it operates. The constraints in the clause could hinder its actions. It would be helpful if the hon. Member for Harrow, West could set out in detail how the provision will work, and how he will ensure that the Bill does not place on organisations constraints that might hinder their development in circumstances that we cannot yet foresee.