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Mr. Edward Davey (Kingston and Surbiton): Will the hon. Lady give way?

Dawn Primarolo: No, I am about to conclude my remarks.

I support amendments Nos. 2, 3, 1 and 5, and hope that my hon. Friend the Member for Edmonton will be satisfied with having his comments on the record, in the knowledge that the matter needs and will receive further consideration and consultation. He can look forward to returning to the matter at some future date.

Mr. Gareth R. Thomas: I am grateful to my hon. Friend the Minister for her comments in support of my amendments. I commend the speech of my hon. Friend the Member for Edmonton (Mr. Love) and the amendment tabled by him and my hon. Friend the Member for Bristol, North-West (Dr. Naysmith). It is an ingenious device that would provide additional flexibility and improve clause 2 as it emerged from the Standing Committee. Nevertheless, as the Minister says, there are still issues that need to be resolved, and it is appropriate that that should be done in the context of the performance and innovation unit report and considered across Government. I hope that my hon. Friend the Member for Edmonton will withdraw his two amendments and instead support mine.

Amendment agreed to.

Clause 1

Requirements for conversion of a registered society into a company

Amendment made: No. 3, in page 1, line 8, leave out subsection (2).—[Mr. Gareth R. Thomas.]

Clause 2

Community benefit societies

Amendment made: No. 1, in page 2, line 27, leave out Clause 2.—[Mr. Gareth R. Thomas.]

Clause 3

Power to modify, etc, to assimilate to company law

Amendment made: No. 4, in page 3, line 35, leave out Clause 3.—[Mr. Gareth R. Thomas.]

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Amendment made: No. 5, in line 5, leave out from "company;" to "and" in line 7.—[Mr. Gareth R. Thomas.]
Order for Third Reading read.

11.56 am

Mr. Gareth R. Thomas: I beg to move, That the Bill be now read the Third time.

The Bill emerges from Report significantly improved and achieves two things: first, it places co-operatives registered under the industrial and provident societies legislation in the same position as building societies by ensuring that on that most crucial decision whether or not to convert to a company, there is substantial democratic participation. Members can still change the structure of their organisation, but only on a 50 per cent. turnout and the 75 per cent. vote in favour which was already provided for in law, mirroring the existing provision in building society law.

Secondly, the Bill permits the use of statutory instruments when company law is changed in future to assimilate industrial and provident society law with company law, to deal with the discrepancies on, for example, insolvency procedures, capacity rules, accounts and audit and other aspects of corporate governance which meant that industrial and provident society legal form lagged considerably behind that of the company model and the friendly society and the building society model.

Although that can happen only when changes to company law are enacted, following our deliberations in Committee and in the Chamber today, it is possible for any part of the industrial and provident societies legislation from 1965 to 1978 to be changed, except those parts that are central to the nature of industrial and provident societies or to facilitating the processes that they carry out.

It is important that the co-operative and social enterprise sector is allowed to develop freely and that artificial obstacles such as the lack of a modern legal form are not put in its way. The uneven playing field with companies in the areas that I mentioned and the difference from building societies and other mutuals on demutualisation were serious problems, which have exercised members of the co-operative movement for a considerable time.

The Bill, although modest, allows both issues to be resolved, and should play a small but important role in encouraging the use of industrial and provident societies, so facilitating the development of co-operatives and of businesses with community benefit aims. That can only benefit our economy and the development of communities that are both enterprising and caring.

I pay particular tribute to the sponsoring bodies that I consulted and with which I worked to bring the Bill to its present stage: WI Country Markets, the Committee of Registered Clubs, the Village Retail Services Association, the Rugby Football Union, the Welsh Rugby Union, the United Kingdom Co-operative Council and the

19 Apr 2002 : Column 845

Co-operative Union. They have all been extremely helpful and positive about the Bill and I welcome that.

During the Bill's passage, a number of issues have been raised that still need to be resolved, of which asset lock-in, which we were discussing only a short time ago, is a key one, as is the issue of fees for registration, which I hope will be sorted out shortly.

On the eve of the private Member's ballot in July last year, a former Minister said to me in passing that hon. Members who were lucky enough to secure a private Member's Bill opportunity tended to become obsessive about the process. Hon. Members will recognise that I am the exception to that rule, but nevertheless I have at times come close to being obsessed and I am grateful for the considerable support that I have had in avoiding falling into that trap from parliamentary colleagues, particularly members of the co-op group.

I am grateful for the support that the Bill has had at all stages from Treasury Ministers, and the helpful advice that we have received from their officials. When I heard that the hon. Member for Christchurch (Mr. Chope) was to lead for the Opposition, being aware of his two-hour speech on the High Hedges Bill, I did not immediately feel delight, but I am grateful to him for the way in which he has engaged with me and with the issues, and we have a better Bill as a result of those cross-party discussions. I am also grateful for the contributions of the hon. Member for Twickenham (Dr. Cable) who leads for the Liberal Democrats for approaching the Bill in the same spirit.

I am grateful, too, for the support from the co-operative movement. The Bill puts in place a number of provisions for which that movement has long campaigned to have included in legislation. In particular, I am lucky enough to chair the Co-op party and I pay tribute to its members who have been assiduous in lobbying Members of Parliament on the Bill. I also pay tribute to its staff who have been extremely helpful during the Bill's passage.

I pay tribute to three people in particular who have worked closely with me on the Bill. Mr. Ian Snaith, the guru of co-operative law, passed me a great tome on industrial and provident society legislation to read on the beach during the summer. I am extremely grateful to him for his support and advice, but he will understand when I say that I will be delighted never to have to look at that particular tome again.

I also pay tribute to Mr. Cliff Mills from Cobbetts, the lawyer who has worked closely with me on the Bill. He has almost convinced me of the worth of the lawyers as a profession, but not quite. He has been extremely kind, generous and supportive and without his advice the Bill would not have reached this stage.

Finally, I pay tribute to my friend the general secretary of the Co-op party, Peter Hunt, who has been an extremely loyal supporter during the Bill's passage. However, in saying those words, just in case lightning should strike twice when the private Member's Bill ballot is drawn next year, I warn him that I will not be in a position to meet him.

I am grateful for the support of hon. Members in making the time to be here on Friday. I know how difficult that can be on occasion. I hope that the House agrees that the Bill has been significantly improved and is worthy of a Third Reading so that it can be passed to the other place for consideration.

19 Apr 2002 : Column 846

12.4 pm

Mr. Greg Knight: I am disappointed that what could have been a great Bill is only a fair Bill following the defeat of new clause 3. The Paymaster General needs to appreciate the great debt of gratitude that she owes to her Whips Office, because during discussions inside and outside the Chamber on the Bill several Labour Members have told me that they supported new clause 3 but had been advised not to vote for it. Therefore, I warn her that if the issue is not satisfactorily resolved, it will return.

I congratulate the hon. Member for Harrow, West (Mr. Thomas) on steering the Bill this far. A private Member's Bill is a fragile vessel indeed and he has done well to reach Third Reading. I wish him the best of luck in his forthcoming meeting with the FSA. I hope that he will relate the growing concern in all parts of the House on the issue of fees and that his meeting will ultimately help to resolve that outstanding matter.

Mr. Thomas: I invite the right hon. Gentleman to speak to me after today's proceedings and to take part in that meeting.

Mr. Knight: I respond in the spirit in which the hon. Gentleman made the offer. I shall speak to him when our proceedings have concluded. I wish the Bill well.

12.6 pm

Mr. Love: I warmly welcome the Bill and I congratulate my hon. Friend the Member for Harrow, West (Mr. Thomas), not least on maintaining a sense of humour throughout the proceedings up to Third Reading.

It is well to remind the House that the industrial and provident society sector consists of something approaching 9,000 different societies with total assets of around £61 billion. It is a substantial sector of the economy. Perhaps even more important than that are the sector's unique structures, which can be summed up as an attempt, through constitutional means, to combine the efficiency necessary to survive in a competitive environment with the need for community involvement and, in many cases, democratic accountability. That is no mean feat.

We have an enormous diversity of organisation. We all know the tremendous work done by the housing associations, not only in building houses, which is their primary function, but, if one considers how they have evolved during the past five years, in becoming increasingly involved in community issues with regard to poverty and deprivation. That is a step that I welcome. We also have the old retail shops, agricultural co-operatives and, as many hon. Members have said, there are the different clubs, ranging from Conservative clubs through to trades and labour clubs. That is perhaps the only way in which the two sides come together, which attests to the diversity and warm fellowship within the movement.

I want to comment briefly on two important issues.

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