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Lord McIntosh of Haringey: My Lords, I am grateful for that terse or, indeed, telegraphic introduction to the two amendments.

Amendment No. 170X would require the authority, when consulting on a direction under Clauses 312, 314 or rules under Clause 318, to specify the purpose of the direction or the rules. This amendment points to one of the few discrepancies between the consultation requirements under Clause 151 that relate to general rules and the other consultation requirements in the Bill.

The Government brought very extensive amendments at the Report stage in another place to align the consultation procedures across the Bill in so far as it was appropriate to align them. Clause 151 includes a requirement for rules to be accompanied by an explanation of their purpose. That requirement does not feature in the other equivalent provisions.

The reason is simple. We believe that the purpose of the proposed rules, codes, directions, policy statements (or however they are described) will be fairly clear and so there is no need for this provision. If it ever turned out that the purpose was unclear, I find it difficult to imagine that the FSA would not add suitable words to clarify the point.

By contrast, I believe that clarity may be lacking quite regularly when the authority exercises its general rule-making powers under Part X of the Bill. It is for that reason that the additional requirement features in Part X but not elsewhere. It is therefore unnecessary and simply destroys the symmetry we have now managed to achieve across the Bill.

Amendment No. 170Y is similar to Amendment No. 157UA which we debated earlier today on the consultation on rules made under Part X. It seeks to apply certain procedural requirements where powers are exercised in cases of urgency. Specifically, it would require the FSA to publish the information required for consultation--that is, a cost-benefit analysis and an explanation of the purpose of the proposed rule or direction--when giving the direction or making the rule.

The cost-benefit analysis and other material are to help inform the public about the proposed rule as background to the consultation. It seems unnecessarily bureaucratic to ask the FSA to provide supporting material for a consultation process which

9 May 2000 : Column 1523

the amendment acknowledges has had to be avoided for legitimate and defensible reasons. I have to say that in cases of genuine urgency, I doubt that it would be possible to prepare a meaningful and robust cost-benefit analysis without inflicting the very delays we are seeking to avoid under this special procedure.

As I said in the case of Amendment No. 157UA, we would not favour imposing a requirement on the FSA to provide supporting material after the event, although clearly anything it is able to do--either formally or informally--will be welcome. It is worth remembering that in the case of Lloyd's the target of such rules or directions will be a much narrower class. Before the rules or directions were given, in most cases, even in cases of urgency, there would have been technical discussions between the society and the FSA during which the scale of burdens imposed and the purpose were adequately discussed.

I also believe it unlikely that the FSA would exercise powers under the urgent procedure in anything but exceptional and therefore rare circumstances. I hope that that will encourage the noble Lord not to press his amendments. I commend Amendment No. 170W to the House.

On Question, amendment agreed to.

Clause 315 [Consultation]:

[Amendments Nos. 170X and 170Y not moved.]

Clause 317 [Requirements imposed under section 316]:

Lord McIntosh of Haringey moved Amendments Nos. 171 and 172:


    Page 169, line 23, after ("If") insert ("the Authority decides to refuse").


    Page 169, line 23, leave out ("is refused").

On Question, amendments agreed to.

Clause 320 [Authority's general duty]:

Lord McIntosh of Haringey moved Amendment No. 172A:


    Page 170, line 18, after ("may") insert (", as a result of this Part,").

On Question, amendment agreed to.

Clause 322 [Exemption from the general prohibition]:

[Amendments Nos. 173 to 174 not moved.]

Lord McIntosh of Haringey moved Amendment No. 174A:


    Page 171, line 44, at end insert ("; or


( ) one in relation to which he is an exempt person.").

On Question, amendment agreed to.

[Amendment No. 175 not moved.]

Lord McIntosh of Haringey moved Amendment No. 175A:


    Page 172, line 4, at end insert ("(other than regulated activities in relation to which he is an exempt person)").

On Question, amendment agreed to.

9 May 2000 : Column 1524

Clause 327 [Rules in relation to persons to whom the general prohibition does not apply]:

Lord McIntosh of Haringey moved Amendment No. 175B:


    Page 175, line 18, leave out ("of regulated activities by those members") and insert ("by those members of regulated activities (other than regulated activities in relation to which they are exempt persons)").

On Question, amendment agreed to.

[Amendment No. 175C not moved.]

Clause 329 [The Friendly Societies Commission]:

Lord McIntosh of Haringey moved Amendment No. 176:


    Page 176, line 14, at end insert--


("(4) Part IA of Schedule 18--
(a) removes certain restrictions on the ability of incorporated friendly societies to form subsidiaries and control corporate bodies; and
(b) makes connected amendments.").

The noble Lord said: My Lords, in moving Amendment No. 176 I wish to speak also to Amendments Nos. 177, 227 and 228. These amendments will amend the Friendly Societies Act 1992 to confer greater freedoms on incorporated friendly societies to form and own subsidiaries and jointly controlled bodies. The amendments have been brought forward in line with a commitment given by the Economic Secretary to the Treasury at Report stage in another place. The commitment was given in response to an amendment tabled by the Liberal Democrats. I gather that the proposals had all-party support, and I hope that the amendments will be welcomed as warmly by your Lordships as was the policy announcement in another place. I beg to move.

On Question, amendment agreed to.

Schedule 18 [Mutuals]:

Lord McIntosh of Haringey moved Amendment No. 177:


    Page 277, line 39, at end insert--

("PART IA
FRIENDLY SOCIETIES: SUBSIDIARIES AND CONTROLLED BODIES
Interpretation

. In this Part of this Schedule--
"the 1992 Act" means the Friendly Societies Act 1992; and
"section 13" means section 13 of that Act.
Qualifying bodies

.--(1) Subsections (2) to (5) of section 13 (incorporated friendly societies allowed to form or acquire control or joint control only of qualifying bodies) cease to have effect.
(2) As a result, omit--
(a) subsections (8) and (11) of that section, and
(b) Schedule 7 to the 1992 Act (activities which may be carried on by a subsidiary of, or body jointly controlled by, an incorporated friendly society).

9 May 2000 : Column 1525

Bodies controlled by societies

. In section 13(9) (defined terms), after paragraph (a) insert--
"(aa) an incorporated friendly society also has control of a body corporate if the body corporate is itself a body controlled in one of the ways mentioned in paragraph (a)(i), (ii) or (iii) by a body corporate of which the society has control;".
Joint control by societies

. In section 13(9), after paragraph (c) insert--
"(cc) an incorporated friendly society also has joint control of a body corporate if--
(i) a subsidiary of the society has joint control of the body corporate in a way mentioned in paragraph (c)(i), (ii) or (iii);
(ii) a body corporate of which the society has joint control has joint control of the body corporate in such a way; or
(iii) the body corporate is controlled in a way mentioned in paragraph (a)(i), (ii) or (iii) by a body corporate of which the society has joint control;".
Acquisition of joint control

. In section 13(9), in the words following paragraph (d), after "paragraph (c)" insert "or (cc)".
Amendment of Schedule 8 to the 1992 Act

.--(1) Schedule 8 to the 1992 Act (provisions supplementing section 13) is amended as follows.
(2) Omit paragraph 3(2).
(3) After paragraph 3 insert--
"3A.--(1) A body is to be treated for the purposes of section 13(9) as having the right to appoint to a directorship if--
(a) a person's appointment to the directorship follows necessarily from his appointment as an officer of that body; or
(b) the directorship is held by the body itself.
(2) A body ("B") and some other person ("P") together are to be treated, for the purposes of section 13(9), as having the right to appoint to a directorship if--
(a) P is a body corporate which has directors and a person's appointment to the directorship follows necessarily from his appointment both as an officer of B and a director of P;
(b) P is a body corporate which does not have directors and a person's appointment to the directorship follows necessarily from his appointment both as an officer of B and as a member of P's managing body; or
(c) the directorship is held jointly by B and P.
(3) For the purposes of section 13(9), a right to appoint (or remove) which is exercisable only with the consent or agreement of another person must be left out of account unless no other person has a right to appoint (or remove) in relation to that directorship.
(4) Nothing in this paragraph is to be read as restricting the effect of section 13(9)."
(4) In paragraph 9 (exercise of certain rights under instruction by, or in the interests of, incorporated friendly society) insert at the end "or in the interests of any body over which the society has joint control".

9 May 2000 : Column 1526

Consequential amendments

.--(1) Section 52 of the 1992 Act is amended as follows.
(2) In subsection (2), omit paragraph (d).
(3) In subsection (3), for "(4) below" substitute "(2)".
(4) For subsection (4) substitute--
"(4) A court may not make an order under subsection (5) unless it is satisfied that one or more of the conditions mentioned in subsection (2) are satisfied.
(5) In subsection (5), omit the words from "or, where" to the end.
References in other enactments

. References in any provision of, or made under, any enactment to subsidiaries of, or bodies jointly controlled by, an incorporated friendly society are to be read as including references to bodies which are such subsidiaries or bodies as a result of any provision of this Part of this Schedule.").

On Question, amendment agreed to.

Clause 342 [The record of authorised persons etc.]:


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