HC Deb 24 February 1960 vol 618 cc401-8

Inasmuch as it affects co-operative associations within the meaning of Part I of this Act, in paragraph (a) of section four of the Industrial and Provident Societies Act, 1893 (which limits to five hundred pounds the interest in the shares of a co-operative association registered under that Act which any one member may hold), for the words "five hundred" there shall be substituted the words "one thousand".—[Mr. Willey.]

Brought up, and read the First time

Mr. Willey

I beg to move, That the Clause be read a Second time.

The purpose of the new Clause is to enable members of co-operative associations to hold up to £1,000. I expect that the right hon. Gentleman will accept the Clause. I should not have thought that there was any question of the Government not accepting it, and, therefore. I shall speak only very briefly.

I think that it is recognised that everyone realises that the agricultural co-operatives are in a special category, and that all those interested recognise that the steps that I am proposing are modest ones. The sooner this is done the better. We have the occasion in this Bill, and I assume the right hon. Gentleman will take his opportunity.

I will not deploy an argument at length in support of the Clause. We know that the N.F.U. and the A.C.C.A. are strongly in support of this action being taken. We have to recognise that the agricultural co-operatives have a special case, and it is necessary for me to argue only one stage further that the co-operatives which are receiving assistance under the Bill are in a special category. I appreciate that there is an argument against taking limited action such as this in a Bill of this character, but it is the right hon. Gentleman who has placed the co-operatives in this special category. That is the effect of Part I of the Bill.

These co-operatives are receiving public support and, therefore, we ought to take this opportunity of making this provision which will assist them to carry out their work more efficiently. As I have said, a special case can be made out for them. Within that special category of agricultural co-operatives a particular case can be made out for the co-operatives which are assisted under the Bill. I hope that it is unnecessary to argue further in support of the Clause and that the right hon. Gentleman will feel obliged to us for having shown this initiative, an initiative which, perhaps, he could not have shown himself. I hope that he will be able to accept at least the principle of the Clause.

Mr. J. Hare

This is a question of some importance. I listened with interest to the hon. Member for Sunderland, North (Mr. Willey), who said that he made his speech a short one, but, as usual, it was to the point, because he expected that I would accept the new Clause. I cannot accept it, but because I cannot do so it does not mean that I have not listened with some sympathy to what the hon. Gentleman said. It also does not mean that I reject some of the arguments that he put forward.

Perhaps I might remind the hon. Gentleman that this subject was raised on the Second Reading by the hon. Member for East Ham, South (Mr. Oram). He made it clear that he would like to see the £500 limit raised, not only as the hon. Gentleman is asking for, for horticultural co-operatives, but for all agricultural co-operatives. The hon. Gentleman made that abundantly clear in what he said. I would also inform the hon. Gentleman for Sunderland, North that the Federation of Agricultural Co-operatives has also recently suggested raising the limit. It recommended that it should be raised for all industrial and provident societies.

To be fair, the hon. Member for Sunderland, North made it quite clear that the Clause we are discussing does not do either of those two things. It restricts the increase in the limit to co-operative associations within the meaning of Part I of the Bill. I think that the hon. Gentleman also admitted the obvious difficulties. He argued that because of Part I we had placed these co-operatives into a special category, but he admitted that he had to put forward his argument because, otherwise, obvious anomalies would immediately be pointed out. I must take a more general view. If I were to accept the Clause we would, despite what has been done under Part I of the Bill, create a number of anomalies that, I think, we all would dislike.

The horticultural side of one particular association might be quite a minor part of its activities, and yet the new Clause might alter the limit for this association and not for another one, operating close by, which happened to be entirely agricultural. I think that one could easily get the curious position whereby agricultural co-operatives, or, indeed, co-operatives which have no connection with agriculture, might decide—and I would be interested to hear the views of the hon. Member for Sheffield, Hillsborough (Mr. Darling) about this—to recruit a few horticultural members in order to enjoy the advantages of higher shareholding limits.

Those are real objections to the points put forward by the hon. Gentleman. Even if one accepted that the limit ought to be raised, it would be wrong to legislate for it in this what must admittedly be a piecemeal, and I should have thought, anomalous way, and to leave out of account all the purely agricultural co-operatives and all the other co-operatives with no interest in agriculture. I believe, therefore, that this must be—and I think that the hon. Gentleman expected me to say this—a question which should be looked at generally.

5.0 p.m.

I said that I was not unsympathetic to what the hon. Member for Sunderland. North said. As the House knows, responsibility for the general provisions of the Industrial and Provident Society Acts rests with my hon. Friend the Financial Secretary to the Treasury. I said that I had noted the Second Reading speech of the hon. Member for East Ham, South and I was interested in his arguments.

I have already referred the question which he raised to my hon. Friend the Financial Secretary, who is considering the matter in the context of the general co-operative movement. I understand from my hon. Friend that there are ways in which societies can draft their rules so that the terms on which members make loan capital available can be as helpful as if the money were lent in the form of shares. That sort of possibility seems to make it probably unnecessary to rush into hasty action for the benefit of horticultural societies now.

Having said that, I repeat that I have referred the general question of shareholding limits to my hon. Friend, who is now actively considering it, and I think that the House will agree that he is a very sympathetic Minister. It would be wrong to undertake piecemeal legislation of this kind in this Bill, and I ask the House to reject the new Clause on the understanding that what it proposes is, in fact, being carefully studied.

Mr. A. E. Oram (East Ham, South)

I can understand the Minister's refusal to accept the Clause if it leads to certain anomalies, but I think that my hon. Friends will want rather more assurances about the speed with which the other legislation is likely to be brought forward. I was not too happy with the Minister's suggestion that this was not urgent. It is a matter which those responsible for stimulating the organisation of agricultural co-operatives in general have very much in mind. They would prefer the shareholding limit to be raised. I accept the argument about loan capital being a possible substitute in certain circumstances, but it is, nevertheless, more desirable that the limit should be raised.

I remember that this problem of too stringent a limit on the shareholdings in co-operative societies was one which affected co-operatives some years ago, when the limit was £200. On the initiative of Mr. W. T. Williams, at that time the hon. Member for Baron's Court, a Private Member's Bill was promoted and the limit was raised to £500. I remember that on that occasion the agricultural co-operatives indicated that they would much prefer the limit to be raised to at least £1,000. After all, such a limit would do no more than catch up with the declining value of money. The £200 limit was set at the end of the nineteenth century and to raise it to £500 was to do no more than bring the matter up to date.

The agricultural co-operatives want the possibility of going beyond that, because they are in a somewhat special category. One can expect thousands of members in a consumer society, but the number will probably be considerably smaller in an agricultural co-operative, although its capital needs will be by no means the per capita equivalent of those of the consumer society.

For that reason, the case for raising the limit for agricultural co-operatives in general is very strong and I welcome the Minister's consultations with his hon. Friend the Financial Secretary and the fact that things are moving. I hope that the matter will be treated more urgently than appears to be the case from what the right hon. Gentleman has said.

Sir R. Nugent

I add my support to the principle of the Clause, if to do so does not embarrass hon. Members opposite. This is not a party matter, but a matter of the practical need of growers' societies which are likely to spend £50,000 or £100,000 on central plants with the assistance of the grants which my right hon. Friend is so generously to give to them. I am sure that there will be many cases when the present limit of shareholding of £500 will be insufficient. That figure has simply become out-dated.

I fully accept my right hon. Friend's explanation of why the new Clause will not do—that it is too narrow and would create anomalies—but, after having listened to the debate, I am sure that my right hon. Friend will feel that a practical need is involved and I hope that it will be possbile to meet it.

Mr. Darling

The scale of operations envisaged for horticultural co-operatives is such that their capital needs will be far greater than can be provided by members under the present statutory limit. There are technical objections, with which I will not weary the House, against raising too much on loan as against share capital. If the whole of the capital of a co-operative could be raised on share capital, it would be so much the better.

The Financial Secretary to the Treasury is now in his place and perhaps he will give us the benefit of his advice on two matters which I wish to raise. There is not so much need to raise the limits for consumer societies and for general industrial societies. My first question is whether it would be possible, if we are to amend the Industrial and Provident Society Acts, to single out agricultural co-operatives, which would include horticultural co-operatives, so that the limit on their shareholdings could be raised to a figure which would not be applicable to industrial co-operatives.

Secondly, the Minister knows that a Bill has been prepared and drafted by the N.F.U. and A.C.C.A. to amend the Industrial and Provident Society Acts. I wonder whether the right hon. Gentleman could tell us whether the Government favour that Bill and, if so, whether there could be some arrangement, perhaps through the usual channels, to speed up its presentation.

Mr. J. Hare

I have listened very carefully to what has been said since I replied to the hon. Member for Sunderland, North (Mr. Willey). I am very glad that the hon. Member for East Ham, South (Mr. Oram) intervened, because I paid particular attention to his Second Reading speech. He asked me for an assurance about greater speed. My hon. Friend the Member for Guildford (Sir R. Nugent) pointed out that in his opinion there was a practical need for legislation of this sort, and the hon. Member for Sheffield, Hillsborough (Mr. Darling) thoroughly endorsed those points of view.

The hon. Member for Hillsborough asked whether some separate arrangements could be made about the respective shareholding limits of agricultural co-operatives and other types of co-operatives. That may be so, but I should not like to make any commitment on that subject. This is a matter which those interested and responsible should study.

In the new Clause, we are dealing only with horticultural co-operatives. The question which the hon. Member for Hillsborough raised applies to co-operatives generally. The hon. Member also asked whether something could not be done to expedite this Bill, which, he says, has been prepared.

I think the hon. Member for Sunderland, North realised very well that I was fairly sympathetic in my response to his opening remarks. I should be glad, once again, to draw the attention of my hon. Friend the Financial Secretary—who was able for a short moment to look in on this debate—in detail to the very many wise words that have been uttered. With that assurance, I hope that the hon. Gentleman will, perhaps, agree that it would be to the benefit of the House if he withdrew the Clause.

Mr. Willey

I was very touched by the appearance of the allegedly sympathetic Financial Secretary. I thought it was an overt and patent demonstration of his sympathy, but what disturbed me was that the minute he was asked some questions he coyly retired. We now have to rely upon the right hon. Gentleman's statement that the Financial Secretary is sympathetic. I would not for a moment doubt that the right hon. Gentleman is correct, at any rate in this particular.

I am faced with a difficult problem—whether I should endeavour against odds to try to do a lesser evil or to hope that we can attain a greater good. I think it is probably better that we should hope for the greater good. I at once accept the case that it would be anomalous if we gave this advantage only to those agricultural co-operatives which come within Part I of the Bill.

I hope that this debate will have helped to expedite the sympathetic consideration of the sympathetic Financial Secretary. This is not a matter which would take up much of the time of the House. Attention has been called to the Bill introduced by Mr. Williams. That Measure, I should think, occupied less than an hour to pass through all its stages. I hope, therefore, that we can expect legislation, possibly this Session.

There is now an urgent need for this provision being made for the benefit of those co-operatives which will come under Part I of the Bill, but, at the same time, it is far better to afford that benefit to agricultural co-operatives generally.

I will wish the right hon. Gentleman good luck. I think he shares our point of view about this matter, and I hope that we shall be able to have legislation as soon as possible. With that expectation, I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.