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 Ruth Kelly Ruth Kelly Economic Secretary, HM Treasury 10:45 am, 13th February 2002

I shall make some of my broader comments during the stand part debate. The hon. Member for Christchurch made some interesting suggestions when he moved his probing amendment. There is a case for examining the amendments in detail.

The clause's provisions state that we should be aware of proprietary claims of society members. If an irrevocable rule on asset lock-in featured in a society's constitution from the outset, its members and future members would be aware of their rights. However, the adoption of an unchangeable asset lock-in by an existing society, without a unanimous vote, could unwillingly deprive some members of rights. That could invoke article 1 of the European convention on human rights.

The question of when a society may take advantage of such lock-in provisions is important, but I am not sure whether the amendment would address that concern. It would prevent existing societies from adopting the clause's provisions, but it would not prevent a new society from adopting those provisions

after its first registration. Property rights could come into play at that time. We should consider such issues seriously during our debate.