Clause 3 - Power to modify, etc. to assimilate to company law

Part of Industrial and Provident Societies Bill – in a Public Bill Committee at 11:30 am on 13th February 2002.

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Photo of Gareth Thomas Gareth Thomas Party Chair, Co-operative Party 11:30 am, 13th February 2002

I entirely agree that the retention of the key differences between industrial and provident society law and company law is essential. Under new clause 5, certain areas of the 1965 Act have been deliberately excluded from the Treasury's power to change by statutory instrument because they are fundamental to the difference of the industrial and provident society legal form.

I want to recognise the limited differences in eight areas that would be appropriate for inclusion in industrial and provident society law. I refer to the example that I used earlier of a rugby club director who is a property developer, and might want to buy up a couple of acres at the end of the rugby club's pitch that are worth £150,000. At present, if the rugby club

is a company, the director of that transaction would have to be reported to, and agreed by, the members of the rugby club. That is not the situation for a rugby club that is an industrial and provident society. There is no transparency for the members of the industrial and provident society rugby club, although there is for the club that is a company.

I will give the hon. Member for Christchurch an example of a new criminal offence that we envisage under the statutory instrument. If the property director of the industrial and provident society rugby club buys the property and does not report to the members of the society that the asset sale has taken place, a criminal offence would have been committed. That offence already exists for the rugby club that is a company. We are simply allowing a read-across from company law in a relatively narrow way.