Building Societies (Funding) and Mutual Societies (Transfers) Bill

I want to make a few brief remarks about the group. First, however, I congratulate my hon. Friend the Member for Bournemouth, West (Sir John Butterfill) on his success in navigating his third Bill on to the statute book—[Hon. Members: ““Fourth.””] My hon. Friend's record improves by the minute. The Bill is important and the amendments in the group address a gap that was left unfilled after Report and Third Reading earlier this year. My hon. Friend said that the amendments in the group enable mutual insurers to take advantage of the provisions of the Bill. They also extend the Bill to other mutuals in the EEA. I want to touch on some of the consequences of that, because it potentially brings within the ambit of the Bill a vast range of co-operatives in other EEA member states. We need to understand precisely what the impact could be of Lords amendment No. 3, which introduces the definition of an EEA mutual society. Before I deal with that issue in greater length, however, I turn to Lords amendment No. 1, which deals with hybridity, which my hon. Friend the Member for Christchurch (Mr. Chope) raised in an intervention on my hon. Friend the Member for Bournemouth, West. As I understand it, the issue arises in part because a number of mutuals are established by private Bill. There was a concern that if an order was introduced to deal with the merger of two mutuals, one of which had been established under a private Bill, the hybrid procedure might apply. Lords amendment No. 1 removes that risk by ensuring that where an order might be treated as a hybrid instrument, another order can be made to ensure that it proceeds through the House without the hybrid instrument process applying. In the debate on the matter in the other place, Lord Evans of Temple Guiting asserted that the Government believed the amendment to be necessary,"““because an order under Clause 3 could make provisions giving members of a transferring mutual membership and other rights in the holding mutual.””" He continued:"““That could require changes to the constitution of the holding mutual. Where the holding mutual has a unique legal form—a private Act of Parliament, for example—that could raise an issue of hybridity. The amendment excludes the hybrid investment ""procedure so avoiding unnecessary delay and complications in making the instrument.””—[Official Report, House of Lords, 10 July 2007; Vol. 693, c. 1358-59.]" We understand that the hybrid procedure can add delay. It is a thorough process; the hon. Members on both sides of the House who served on the Select Committee on the Crossrail Bill will remember the thorough scrutiny that that hybrid Bill went through. I am concerned that, by losing the hybrid instrument procedure, we will remove a level of protection and parliamentary scrutiny that would otherwise be available to members of a mutual who were dissatisfied with the proposals. Hybrid Bills provide an opportunity for members of the public to petition a Select Committee and appear before it to express their concerns about the Bill and how it will affect them. That gives the Select Committee an opportunity to amend the Bill. If a member of the public was dissatisfied with a proposal and felt that their rights were being impaired, the hybrid instrument procedure would give them some protection. Will the Minister reassure us on this matter? Why does she think that removing the hybrid procedure is in the interest of the mutuals and their members? It offers protection at the moment, which they would lose if Lords amendment No. 1 were accepted today.