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

It is indeed narrow, Madam Deputy Speaker, but may I submit that it is also very important, because it is on a subject that affects the rights of the individual subjects of our country? As my hon. Friend the Member for Bournemouth, West has pointed out, there is a problem regarding the time that the procedure can take. However, as I did earlier, I draw his attention to House of Lords Standing Order No. 216A. It provides for the expedited procedure, under which the Bill does not have to be considered in such detail, and states that the"““hybrid instrument…which, by virtue of the Act authorising it to be made, is, after the expiry of a period prescribed by that Act…to proceed in Parliament as if its provisions would, apart from that Act, require to be enacted by a public bill that is not hybrid…referred to as an ““expedited hybrid instrument””." The procedure for such an instrument differs from that applicable to other hybrid instruments. The standing order continues:"““A petition…not to affirm an expedited hybrid instrument shall be…deposited…within ten days beginning with the day on which the instrument is laid””." If the Hybrid Instruments Committee is of the opinion that there ought to be a further inquiry, it conducts that inquiry itself, forthwith. After 10 days, if there is some substance to the petition, the matter is inquired into; the Hybrid Instruments Committee does that itself. The procedure could not be used, as has been suggested, by potential rival bidders, although we know from what happens in the real world that such bidders often get up to all sorts of tricks. We have seen that in relation to a recent takeover of a bank, although we shall leave that to one side. I took the liberty of asking the House of Commons Library about the implications of Lords amendment No. 1. Its reply states:"““In general terms those who would have wished to petition against a hybrid instrument would be adversely affected, as treating such an instrument as an ordinary instrument precludes the right to petition.””" It continues:"““Exactly who those individuals or groups would be would depend on the provisions in the instrument.””" That almost goes without saying. This real issue could act adversely against members of mutual societies when they find that their directors have it in mind to sell their interests to other organisations in the European economic area. Those agreed members should have the chance to take advantage of the procedure that I have outlined. The problem that I have about all this is that if we reject Lords amendment No. 1, it might jeopardise the whole Bill—it would depend on whether their lordships could be reconvened to accept our disagreement with it. I hope that the Minister will express her good intentions and those of the Government in respect of how those individuals who might be adversely affected will be protected if that cannot be done by the hybrid instrument procedure. I am worried about the predatory action that may come from some EEA mutual insurers. Mutual insurers are basically are known much more on the continent than in our country. I shall now translate a document from French. The international association of mutual assurance societies is based in Brussels, in what is sometimes described as the heart of Europe. It produced a helpful note on what mutual insurance is and why one must use it. Under the heading ““opportunities””, it identifies the fact that the insurance market is still expanding because the universe of risks is doing so too. That universe is indeed expanding, but those are risks not only that people want to have insured, but they are risks for insurance companies. The larger the risks insured, the larger the risk to those companies. We know what happened to Lloyd's members. What happens when people invest in a mutual savings society and find that that society's interests are taken over by a mutual insurance company which then, in order to buy insurance business, insures things that it should not have done and ends up going bust? Where does that leave the savers in the mutual society originally based in the UK, who may have lost everything? Surely we should safeguard against such a situation. We should be alert to the prospect of predatory action. Before I turn to the other amendments, may I tell hon. Members that the issue of hybrid instruments was examined by the Joint Select Committee on Delegated Legislation in 1972-73? Those recommendations were accepted by both Houses. The Committee was chaired by the late Lord Brooke of Cumnor, the father of the current Lord Brooke of Sutton Mandeville, whom I had the privilege of serving for a short time as a Parliamentary Private Secretary when he was a Treasury Minister. That is a distinguished family of statesmen.