Clause 5 - Short title, commencement and extent

Co-operatives and CommunityBenefit Societies Bill – in a Public Bill Committee at 3:15 pm on 18th March 2003.

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Photo of Mark Todd Mark Todd Labour, South Derbyshire 3:15 pm, 18th March 2003

I beg to move amendment No. 4, in

clause 5, page 4, line 1, leave out subsection (2).

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

With this it will be convenient to discuss

New clause 7—Commencement—

No. NC7, to move the following Clause:—

'(1) The preceding provisions of this Act shall come into force on such day as the Treasury may by order appoint, and different days may be so appointed for different purposes.

(2) An order under this section shall be made by statutory instrument and may contain such transitional provisions as appear to the Treasury to be necessary or expedient.'.

Photo of Mark Todd Mark Todd Labour, South Derbyshire

The amendments and new clauses are self-explanatory for those who have read them. [Interruption.] The hon. Member for Edmonton (Mr. Love) has perhaps not been devoting his time to that task. The proposals simply define the geographical scope of the Bill. I will simply say in passing how much I welcome the participation of the hon. Member for Ceredigion (Mr. Thomas). He rightly reflected on the importance of Wales' historical links to the co-operative movement. I greatly appreciate his support for the Bill. I am grateful for his attendance and participation in the debate. One of the amendments makes it clear that the Bill applies to England and Wales and sets out the circumstances in which it may apply to the Channel islands. It also sets out the process by which the Bill might come into force and be implemented.

Photo of Stephen O'Brien Stephen O'Brien Shadow Paymaster General

I have only one point to make. It has relevance to new schedule 1, which has just been agreed to, to clause 5 and new clause 4. I have had a letter from my constituent, Mr. Martin Beaumont, who is the chief executive of the Co-operative Group. Until recently he was the chief executive of United Co-op in the north-west. Like the Minister, I am proud to represent a north-west seat. As I said on Second

Reading, I shop every week at my local Co-op in the village of Bunbury in the heart of my constituency.

I note that the hon. Member for Harrow, West (Mr. Thomas) is also in his place. On Second Reading he was rightly congratulated on his work on a previous Bill. I also recognise that my fellow member of the Institute of Chartered Secretaries and Administrators, the hon. Member for Edmonton will have scrutinised the Bill in great detail. Having discussed the matter with Mr. Peter Hunt of the Co-operative party, who may well be known to Labour Members, Mr. Beaumont made a suggestion, which I hope the Minister will consider. The matter could have been proposed as an amendment. It is probably best to discuss it and leave the promoter of the Bill and the Minister to decide whether they want to adopt it.

Clause 5 says that the legislation may be cited as the Co-operatives and Community Benefit Societies Act 2003 and relates back to the Industrial and Provident Societies Acts. The Industrial and Provident Societies Act 2002 was promoted by the hon. Member for Harrow, West with Government support. Mr. Beaumont suggests replacing the phrase in clause 5

''the Industrial and Provident Societies Act 1965 to 2003''

with

''the Co-operatives and Community Benefit Societies Acts 1965 to 2003''.

While that may seem a purely cosmetic improvement, it has some resonance given the helpful rationale that he sets out. With your indulgence, Mr. Stevenson, I should like to read it out.

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

Order. I am more than happy to accept that, but I am looking at the amendment and the new clause. The amendment deals with the period of expiration and the new clause deals with the Act coming into force and transitional provisions. Provided that the hon. Gentleman quotes the letter in that context, we shall be okay.

Photo of Stephen O'Brien Stephen O'Brien Shadow Paymaster General

In that case, I should prefer to ask for your guidance. Given that my point relates to clause stand part, is this an appropriate point to raise it?

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South 3:30 pm, 18th March 2003

The question on the amendment will be put when the debate has concluded. The schedules and new clauses will be dealt with formally, so if there is to be any debate on the new clauses, it should take place when the new clause is called. I am simply saying what the amendment or new clause covers. If the letter from which the hon. Gentleman wishes to quote is relevant, he may refer to it.

Photo of Stephen O'Brien Stephen O'Brien Shadow Paymaster General

I hope that that will be found to be the case. It is timely given that we are dealing with the short title and commencement of the Bill.

Photo of Stephen O'Brien Stephen O'Brien Shadow Paymaster General

It is helpful.

The rationale given was simply that the amendment would change the title in the way that I described. It rightly refers to the report published last September by the Government strategy unit on the charitable and not-for-profit sectors and to the consultation period.

That is relevant to all industrial and provident societies because the report reviewed the legislative framework of their businesses and made several key recommendations, which may transpire in future Government legislation. One of them was that we should now refer to ''co-operatives and community benefit societies'' and that the umbrella term ''industrial and provident society'' should no longer be used.

It is felt that the term ''industrial and provident society'' is old-fashioned and meaningless in a modern business context. Indeed, no societies call themselves by that term, choosing to use the more public-friendly terminology, ''co-operatives and community benefit societies'' instead. It is a modest request, which simply seeks to bring the name of the legislation, the subject of clause 5—

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

Order. I am reluctant to interrupt, but we are anxious to make progress and I must ask for the hon. Gentleman's help. We are debating amendment No. 4. The issues raised by clause 5 will be debated during a stand part debate on that clause. I hope that that is helpful.

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

Perhaps I should repeat what I said. I do not want to go out of the Committee any more confused than I was when I came in. We are debating amendment No. 4 and new clause 7. Amendment No. 4 is the subject of debate and new clause 7 will be put formally later. We shall have a clause stand part debate on clause 5 at a later stage, so the hon. Gentleman will have an opportunity to discuss it, but not in relation to amendment No. 4. I hope that that clarifies the matter.

Photo of Stephen O'Brien Stephen O'Brien Shadow Paymaster General

I am grateful. I shall leave what I said on the record and take the matter up later.

Photo of Ruth Kelly Ruth Kelly Financial Secretary, HM Treasury

It is difficult to know how to respond to that.

Amendment No. 4 removes the subsection that provides for the Bill to come into force two months after the date on which it is enacted. New clause 7 provides for the Act's commencement by statutory instrument and provides that the relevant orders should contain any appropriate transitional provisions. The Bill will change the way in which principal parties may conduct their business, so it is important that adjustments can be made smoothly. For example, a commencement order will ensure that a suitable date for commencement may be chosen and made known, and if appropriate, that different dates may be selected for different provisions. In order to ensure a smooth changeover to the modernising provisions, it may also be important to make transitional provisions. For example, the commencement order may need to specify the legal implications for contracts that are already in existence or in progress when the Act comes into force. It is the Government's intention to allow societies to benefit from the new provisions as soon as possible. We support the amendment and the new clause, which will help to ensure that the change in the legislative framework for societies will take place with the

minimum of uncertainty for the societies and those who deal with them.

Amendment agreed to.

Photo of Mark Todd Mark Todd Labour, South Derbyshire

I beg to move amendment No.5, in

clause 5, page 4, line 2, at end insert—

'(2A) Section (Execution of deeds and other documents)(8) extends to England and Wales only.'.

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

With this it will be convenient to discuss the following:

Amendment No. 7, in

clause 5, page 4, line 3, leave out 'does not extend' and insert 'extends'.

New clause 6—Channel Islands

'(1) Her Majesty may by Order in Council direct that any provision of this Act or any instrument made under or by virtue of it shall extend, with such modifications (if any) as may be specified in the Order, to any of the Channel Islands.

(2) An Order in Council under this section may contain such transitional, incidental or supplementary provision as appears to Her Majesty to be necessary or expedient.'.

Photo of Mark Todd Mark Todd Labour, South Derbyshire

I suspect that I may have been the origin of some of the confusion of the hon. Member for Eddisbury by referring to this group of amendments and new clauses in a block rather than two separate groups. Amendment No. 5 and new clause 6 refer to the geographical scope of the Bill. However, I note that amendment No. 7 would extend the geographical scope of the Bill to Northern Ireland.

The amendment and the new clause are designed to set out clearly the geographical scope of the Bill, and I commend them to the Committee.

Photo of Gareth Thomas Gareth Thomas Party Chair, Co-operative Party

I congratulate my hon. Friend on the way in which he has presented the Bill thus far. Amendment No. 7 is not intended as a wrecking amendment. I tabled it in the spirit of probing and seeking to advance the reform of industrial and provident society law for Northern Irish co-operatives and community benefit societies.

At the outset, I should say that I have had the opportunity to meet my hon. Friend the Member for Dudley, South (Mr. Pearson), who is the Northern Ireland Minister with responsibility for this area. As hon. Members who study such things know, he announced a review of industrial and provident society legislation as it affects Northern Ireland in November.

Nevertheless, my concern is that, given the Act last year and what we hope will become an Act this year, Northern Irish co-ops and community benefit societies will substantially lag behind in the process of legislative reform in comparison with other societies, given the increasing recognition of the importance of social enterprises and community organisations that want to use the asset lock and other modernisation provisions in the Bill. Those same issues affect Northern Irish societies, and surely we should be seeking to amend the legislation as it affects them as a matter of some urgency. Why should they be discriminated against in comparison with their fellow competitive societies in England, Wales and Scotland?

It is worth flagging up the potential that social enterprises and community organisations in Northern

Ireland have for bringing communities together. They are a mechanism for bridge building. In the Northern Irish context, that is an important additional element to the benefits that social enterprises and community organisations such as co-operatives can bring.

I recognise that there is a willingness in the Northern Ireland Office to consider how reform can be progressed. I hope that my hon. Friend the Minister will be able to set out what discussions her Department has had with the Northern Ireland Office. I hope that she will commit to putting the power of the Treasury behind the Northern Ireland Office's reform agenda and perhaps move the reform process into the fast lane as opposed to the medium-fast lane, where it currently appears to be.

As I said, amendment No. 7 is probing in spirit. Nevertheless, I hope that my hon. Friend will be able to reassure me that her Department hopes also to reform Northern Irish legislation.

Photo of Ruth Kelly Ruth Kelly Financial Secretary, HM Treasury

As my hon. Friend the Member for South Derbyshire said, amendment No. 5 extends the territorial extent of subsection (8) to England and Wales. It is a technical provision and I do not intend to dwell on it. The Government fully support new clause 6 and amendment No. 5.

Amendment No. 7 would extend the provisions of the Bill to Northern Ireland. I believe that there may be a divergence between what my hon. Friend the Member for Harrow, West wishes to achieve and the practical effect of the amendment. Separate legislation governs Northern Ireland's industrial and provident societies, and societies based there are registered under that legislation, not under the 1965 Act. That Act, which the Bill amends, does not extend to Northern Ireland. I am sure that my hon. Friend recognised those points when tabling his probing amendment.

To achieve the same general effect for societies based in Northern Ireland, it would be necessary to amend the legislation that applies there. However, the wider issue is how legislation governing societies is developing in Great Britain and Northern Ireland. The treatment of Northern Ireland societies when trading under the law of England and Wales or Scotland is already recognised in the 1965 Act. The Bill as amended will also take account of the trading of Northern Ireland societies in Great Britain when appropriate.

Northern Ireland and Treasury officials are liaising on how industrial and provident society legislation should be modernised. We are currently going through similar processes. The strategy unit has examined the legislation in relation to societies in the not-for-profit sector in Great Britain, and the Northern Ireland authorities have begun a review of policy on Northern Ireland societies, including their legislative framework. It is possible that the two reviews may have different outcomes. That is not inconsistent or even inappropriate: it could be a rational outcome if the needs and priorities of Northern Ireland societies are different from those in Great Britain. That would result in different legislative provisions.

The important point is that both we and Northern Ireland have undertaken, or are currently undertaking, a detailed review of industrial and provident society legislation. We are considering carefully what is in the best interests of the movement. The reforms that emanate from the process may not be the same, but we should arrive at flexible legislation that meets the needs of the societies to which it applies.

I fully understand and sympathise with the concerns expressed by my hon. Friend the Member for Harrow, West. Unfortunately, it is not feasible to address them in the Bill. However, I give the a commitment that Treasury officials will continue to liaise with the Northern Ireland authorities on those issues.

Photo of Gareth Thomas Gareth Thomas Party Chair, Co-operative Party

I am grateful to my hon. Friend the Minister for those words of reassurance. I recognise that there may be potential differences between what emerges from the review initiated by my hon. Friend the Member for Dudley, South, and the discussions initiated by the Treasury through the strategy unit. That is obviously a consequence of devolution, and I do not have a problem with that per se.

I welcome the Minister's assurance that the Treasury will continue to liaise with officials in Northern Ireland. Instead of merely encouraging liaison, I would gently urge her to put the power of the Treasury behind that liaison. I suspect that that would accelerate the reaching of conclusions in Northern Ireland.

Amendment agreed to.

Question proposed, That the clause, as amended, stand part of the Bill.

Photo of Stephen O'Brien Stephen O'Brien Shadow Paymaster General

I am grateful not only for your early clarification, Mr. Stevenson, but for the fact that the hon. Member for South Derbyshire nobly and honourably offered to share in my confusion. He can be exonerated. However, the reason for the confusion was that the point extends across the Bill. Most importantly, it concerns the original clause 5, which is about short title, commencement and extent. I hope that what I have already said can be taken in future to refer also to this part of the Bill. The key point is that the term ''industrial and provident society'' is felt to be old-fashioned.

I say that with a great deal of respect for the hon. Member for Harrow, West, who put a great deal of effort into promoting—successfully—the Industrial and Provident Societies Act 2002. Nevertheless, there is a suggestion that that title is meaningless in the modern business context. Societies do not use it, preferring to be called co-operatives and community benefit societies. This is purely a probing suggestion; I leave it for the Government and the promoter of the Bill to consider, knowing that there will be an opportunity to adjust the title on Report.

Photo of Gareth Thomas Gareth Thomas Party Chair, Co-operative Party 3:45 pm, 18th March 2003

I strongly support the hon. Gentleman's suggestion. He has approached the matter in the right way by presenting it as a subject for discussion rather than as an amendment. I have no problem with the idea that we should change the title

of the legislation. The term ''industrial and provident society'' was probably outdated when the 1965 Act came in—it certainly was last year—and I support change at the appropriate time.

Photo of Mark Todd Mark Todd Labour, South Derbyshire

I echo my hon. Friend's sentiments. Industrial and provident societies legislation has a resonance that, as an historian, I admire. However, it has little relevance to today's transactions of either co-operatives or community benefit societies. The hon. Member for Eddisbury has made a valuable point that deserves further discussion on Report.

Photo of Ruth Kelly Ruth Kelly Financial Secretary, HM Treasury

The point is valuable and we shall consider it in due course. It was raised previously in the strategy unit report.

Question put and agreed to.

Clause 5, as amended, ordered to stand part of the Bill.

New Clauses 1 to 7 brought up, read the First and Second time, and added to the Bill.