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

I do not believe that I am excluding rights by addressing the point of hybridity at this point during the passage of the Bill. It is a correction of a potential technical anomaly that may become necessary later on as we consult and work together to ensure that the Bill is implemented in the right way. Amendments Nos. 2 and 3 widen the definition of mutual society in clause 3 by inserting a definition of EEA mutual. There has been some discussion of that. An EEA mutual can be a European co-operative society, a co-operative society established in any European economic area state or any other type of co-operative or mutual body as specified by the Treasury in secondary legislation. That will ensure that any changes made under the Bill apply where the transfer is to a subsidiary of an EEA mutual, as well as where the transfer is to a subsidiary of another UK mutual. That incorporates the conversations we had this morning on proposed paragraph (c) in amendment No. 3, and the way in which it would be considered by Parliament. In response to the Conservative Front-Bench spokesperson, I can clarify that primary legislation is considered under the affirmative resolution procedure. However, the power in proposed paragraph (c) in amendment No. 3 is subject to the negative resolution procedure, because it simply allows the Treasury to specify other co-operatives or mutuals, including those in other EEA states, to which a UK mutual may transfer. It may need to be exercised at short notice—for example, to specify a new kind of EEA mutual in a potential and live takeover situation. We believe that the negative resolution procedure is appropriate in that case. The power cannot be used to amend primary legislation, where of course it is right and proper that any such changes should be subject to the affirmative procedure.