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

Part of Industrial and Provident Societies Bill – in a Public Bill Committee at 11:45 am on 13th February 2002.

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Photo of Ruth Kelly Ruth Kelly Economic Secretary, HM Treasury 11:45 am, 13th February 2002

First, I congratulate my hon. Friend the Member for Harrow, West on comprehensively outlining how the new clause would work and where updating industrial and provident society legislation would be most useful. The Government fully sympathise with his aims in the clause, and although we have some concerns about its drafting, we recognise the need for the legislation on industrial and provident societies to be updated. My hon. Friend provided some useful examples of how that could be achieved. We shall carefully consider those issues, and I look forward to consulting with the movement about where changes are necessary. The useful exchange with the hon. Member for Christchurch brought out some of the details of the issue and the debate has been constructive.

I return to the argument that was put a little too strongly by the hon. Member for Christchurch about the appropriate checks and balances that Parliament would usually expect to be put in place in relation to such delegated powers. We have some concerns about the clause, but I can see the advantages of my hon. Friend's new clause. The Government would retain the flexibility to move quickly to update important areas of industrial and provident society legislation even where there had been no corresponding change in company law. The movement is likely to benefit most speedily from any modifications in primary legislation that occur as a result. However, it would remain out of line with provisions available under building society and friendly society legislation and it is clear that the Treasury can update legislation only once there has been a change in company law, and even then, only certain specified relevant provisions.

My hon. Friend and other Committee members may be worried about what changes might be possible after the review of company law has taken place. We expect the review to be far reaching—the most important reform of company law in a generation and, perhaps, the most important in 150 years or so. It is unlikely that the review would disqualify the Treasury from looking into particular areas of industrial and provident society legislation that might need to be updated, although we must wait for the results of the review to be absolutely sure.

I must express the Government's reservations. We would prefer a clause that tied industrial and provident society legislation more closely to that concerning other relevant mutuals.