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Lord McIntosh of Haringey moved Amendment No. 85:

("Transfers of business done at Lloyds


. The Treasury may by order provide for the application of any provision of Part VII (with or without modification) in relation to schemes for the transfer of the whole or any part of the business carried on by one or more members of the Society or former underwriting members.").

The noble Lord said: My Lords, this amendment should have been debated with Amendment No. 49, which was not moved. But since it is entirely uncontroversial, I beg to move.

On Question, amendment agreed to.

Clause 321 [Directions in relation to the general prohibition]:

Lord Hunt of Wirral moved Amendments Nos. 86 to 89:

    Page 175, line 15, after ("rights") insert ("or interests").

    Page 175, line 16, leave out ("or which may be adversely affected by,").

    Page 175, line 16, at end insert ("any").

    Page 175, line 17, at end insert ("; or

(c) persons who have rights or interests which may be adversely affected by the use of any such services by persons acting on their behalf or in a fiduciary capacity in relation to them.").

The noble Lord said: My Lords, with the leave of the House I shall move Amendments Nos. 86 to 89 en bloc. I beg to move.

On Question, amendments agreed to.

Clause 327 [The Friendly Societies Commission]:

Lord Bach moved Amendment No. 90:

    Page 178, line 30, after ("in") insert ("or determined in accordance with").

18 May 2000 : Column 432

The noble Lord said: My Lords, in moving Amendment No. 90, I shall speak also to Amendments Nos. 91 to 100, 145 to 148, 151 to 156, 158 and 193 to 209. This is another quite large group of amendments and covers a number of different topics including mutual societies, repeals, consequentials, transitional arrangements and territorial extent of the Bill. However, they are connected to one another in that they all deal with amendments that have to be made to existing legislation as a result of the reforms introduced by the Bill.

Dealing with mutuals first, some of the amendments before us in this group are the result of a review of the proposals for the future arrangements for the registration and regulation of mutual societies. This is an area where the Treasury has been making good progress in preparing for the next stages and indeed has already been consulting industry representatives on the changes and repeals it proposes to make using the powers under the Bill.

The amendments to the clauses in Part XXI of the Bill--Amendments Nos. 90 to 100--reflect the potential shortcomings of the powers which have been identified during the process of preparing early drafts of the relevant orders. To give a specific example, the current bodies--the Friendly Societies Commission, the Building Societies Commission and the Registrar of Friendly Societies--are under statutory obligations to produce annual reports on the performance of their functions under the relevant Acts. We believe that after their respective functions have been transferred, in most cases to the authority, that those bodies should produce a final report before the order bringing about their demise comes into force. As the current powers are expressed, they appear to require a specific date to be named in the order. But it may well be that we would wish to define the dissolution date by reference to the day on which the relevant report is deposited with the Treasury.

The majority of the amendments to the schedules contained in this group correct and supplement certain modifications and repeals that we proposed to make to the relevant legislation. As they stand, the schedules reflect the early thinking on the changes that would be needed and, as I said, the Treasury has been developing more complete proposals in discussion with the industry.

In any case, the Bill does not tell the whole story. In addition to making orders under Part XXI for the transfer of functions of the Building Societies Commission, the Friendly Societies Commission and the Registrar of Friendly Societies, and in addition to repeals and amendments which are consequential on those orders, the Treasury will also use the powers under Clause 418 to make a number of further repeals and modifications which are consequential on the Bill. The Government believe that this approach will make the changes more coherent and intelligible to those affected by the reforms. So the schedules focus on amendments that are not simply consequential on the Bill.

18 May 2000 : Column 433

We considered an example of such a change at Report stage when the Government brought forward amendments that will give incorporated friendly societies greater commercial freedoms to form and own subsidiaries. In addition, a number of the new amendments now being made to Schedule 18, which are echoed in Schedule 22, will remove certain restrictions on credit unions under the Credit Unions Act 1979. Those changes are possible because of the regulatory powers that will be available to the authority when credit unions become authorised persons under the Bill. To digress briefly, this deregulation for credit unions is another area where the Treasury is taking positive, practical steps in support of the wider government policy of seeking to tackle financial exclusion.

Moving to repeals and the other amendments, Amendment No. 145 inserts a new clause after Clause 408. I hope this will satisfy the noble Lord, Lord Elton, who asked about the Insurance Broker Registration Act 1977 on the last day of Committee, and the noble Lord, Lord Hunt of Wirral, who asked about the Industrial Assurance Acts on the last day of Report. In response to their amendments I gave a commitment that the Government would bring forward appropriate amendments to the Bill that would deliver the necessary repeals. This clause, with the relevant additions to Schedule 22 by Amendments Nos. 202 and 203, are in line with the Government's commitment.

In relation to the Channel Islands and the Isle of Man, the new clause after Clause 422 is connected. The Industrial Assurance Acts extend to the Isle of Man and the Channel Islands. We will need to consider with the relevant authorities what repeals and savings will need to be made to the legislation as it affects the islands. It is also the case that certain of the legislation relating to mutuals also extends to those islands. The powers under this clause, exercisable by Order in Council, will enable the Government to ensure that any relevant transfers of functions from the Registry of Friendly Societies have effect in the islands. The powers will also permit any more substantive amendments that are to be made to have effect in the islands, to the extent that that is appropriate.

In relation to consequential powers, we are also seeking a number of amendments to Clause 418. That clause confers powers on the Treasury by order to make such incidental, consequential, transitional or supplemental provision as they consider necessary or expedient, though of course only for the purposes set out in subsection (1).

First, we propose by Amendments Nos. 151 and 152 that the power should also be exercisable by other departments. I will not return at great length to a debate of insurance terminology--we have dealt with that already today. But the fact is that "insurance company" is a term that features in other legislation such as the Companies Act. Conferring the power on Ministers of the Crown will ensure that the Secretary of State could call upon the power in Clause 418 to introduce an appropriate definition of insurance company to the Companies Acts, or perhaps replace

18 May 2000 : Column 434

the reference to insurance company with something more appropriate. This amendment leads to a consequential change in Clause 420 to ensure that the exercise of this power continues to be by way of statutory instrument.

Amendment No. 153 concerns a technical point. The clause currently only works for,

    "provisions of the Bill, or giving full effect to it".

It might be that the consequential amendments may be needed in the light of provisions made under the Bill; that is to say, in secondary legislation.

Amendments Nos. 154 and 155 simply clarify that the power in Clause 418 includes the power to repeal legislation (or revoke it in the case of a Northern Ireland Order) and to provide for the dissolution of relevant statutory bodies. The main candidates for dissolution are in fact already expressly dealt with in the Bill in Part XXI and the new clause after Clause 408, to which I have just spoken. However, until we have fully uncovered every provision we cannot be certain that the list is comprehensive. Of greater concern would be if the definition of regulated activities were extended in the future, with the result that the functions of other bodies were effectively subsumed into the FSA.

Finally, there are a few amendments to Schedules 20 and 22, to which I have not yet spoken. These remove certain amendments we were proposing to make to other legislation, to substitute definitions that cross-refer to banking, insurance and financial services legislation. Unfortunately, they did not work well. For example, substituting "bank" with,

    "authorised person with permission to accept the deposits",

for the purposes of the Income and Corporation Taxes Act 1988 had the effect of abolishing the special tax treatment of building societies and credit unions. That was never our intention, but I make the point because they are perfect examples of why we need to extend the powers under Clause 418 to be exercisable by Ministers of the Crown.

To conclude, the amendments in this group are for the most part a mixture of minor drafting points and points of technical detail, but some also provide for a degree of deregulation. They improve the Bill and the regulatory arrangements for societies. I hope that your Lordships will support them. I beg to move Amendment No. 90.

On Question, amendment agreed to.

Clause 328 [The Registry of Friendly Societies]:

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