Friendly Societies Bill (Hansard, 14 July 1981)

§ The Financial Secretary to the Treasury (Mr. Nigel Lawson)

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

The purpose of this Bill is to repeal the requirement in section 2(1) of the Friendly Societies Act 1974 that the Chief Registrar of Friendly Societies must be a barrister of at least 12 years' standing or a person who has held the office of assistant registrar for at least five years.

The Chief Registrar, who is appointed by my right hon. and learned Friend the Chancellor of the Exchequer, is responsible for the prudential supervision of building societies and various other bodies. These include industrial assurance companies and societies, societies registered under the Friendly Societies Act 1974, and societies registered under the Industrial and Provident Societies Act 1975. Of these, building societies with assets of £50 million are far and away the most significant.

The requirement in the Friendly Societies Act 1974 that the chief registrar should be a barrister had its origins in legislation in the nineteenth century, when the balance of responsibilities of the registry was very different. This is no longer essential, since the responsibilities of the office have increasingly become the prudential supervision of friendly, industrial and provident societies and, in particular, building societies.

A legal qualification is still undoubtedly an asset and the Bill will open the office to solicitors, among other people. We felt that the main requirement was to secure the best possible candidate to deal with the supervisory responsibilities, and, we having decided to ask the House for primary legislation, the Bill therefore opens the field, without restriction. However, all other things being equal, we should clearly prefer a candidate with some legal qualifications.

I assure the House that the Government are not proposing to dispense with the statutory legal qualifications altogether as far as the registry is concerned since subsections (2) and (3) of section 2 of the Friendly Societies Act 1974, which we are not proposing to amend, will still require at least two assistant registrars to be legally qualified.

The importance of the societies supervised by the chief registrar, particularly the building societies, needs no emphasis. Effective prudential supervision of building societies is in the interests of those who have deposits and mortgages with them. Given these important responsibilities of the office, it is desirable to have the widest possible choice in selecting the person who will occupy it.

The present chief registrar, Mr. Keith Brading, is to retire in the near future. I am sure that the House would wish my right hon. and learned Friend the Chancellor of the Exchequer to have the widest possible choice in selecting a worthy successor to Mr. Brading, who has been a quite outstanding holder of his office and whom it will be hard to replace.

§ Mr. Robin F. Cook (Edinburgh, Central)

The Bill eliminates restrictive practice, albeit one of rather limited effect. Therefore, it will not surprise the Financial Secretary if I indicate that the Opposition have no intention of resisting it.

1148 I have given some thought to whether there would be any way in which to demonstrate constructive opposition to the abolition of this restrictive practice, but, after giving the matter some reflection, I have failed to come up with any ground on which one could resist its abolition. I am therefore happy to accept the Bill without exception. I note that the Bar Council, having considered the matter, decided that it had no objection to the elimination of this restriction. If the Bar Council does not feel sufficiently strongly to retain this post for its own members, it is certainly not for me to defend its right to have a prerogative lien upon this post.

However, the Minister will be aware that the Building Societies Association has expressed some unease at the proposal. It has put out a public statement saying that the post calls for considerable legal expertise and knowledge. As the right hon. Gentleman indicated, prudential supervision of the building societies is the major function of the Chief Registrar of Friendly Societies.

I am grateful to the Financial Secretary for confirming that two assistant registrars will remain legally qualified. I should not have thought that the Chief Registrar, even were he not a lawyer of any kind, would be likely to be starved of legal expertise or advice from those around him.

I can see advantages in the Chief Registrar coming from another discipline—perhaps the accountancy profession. This matter has often been reflected upon, particularly in the Public Accounts Committee, and it is recognised that we have a public service in which the representation of qualified accountants with practical backgrounds outside the public profession is remarkably few. Perhaps in this case the accountancy profession could fulfil the role of Chief Registrar with rather more appropriateness than a barrister of 12 years' standing.

We appreciate that the Bill has been introduced late at night in the latter part of the Session. It is not usual to find a Government Bill brought in on 14 July and starting its stages through Parliament at 3.30 am halfway through the last month before we rise for the Summer Recess. It therefore goes through our mind that there is some purpose to the Bill and that some obstacle is being removed, perhaps for a purpose that has already been conceived.

We note that the Bill is being promoted by the Treasury, which presumably has a view on who should be the replacement for the present Chief Registrar when he steps down in the near future. It seems that the Government are seeking wider powers in the Bill in order to give, as the press notice put it, a "wide range of choice" of successor to the present Chief Registrar and future successors. It is laudable that the right hon. Gentleman should be seeking that wide range of choice, and I hope that he will exercise the wide range of choice that will be available to him after the Bill goes through all its stages. However, it would be a matter of regret if, having been granted this wide range of choice, the Minister exercised a choice which resulted in the appointment of someone even nearer home than someone appointed under the strict application of the present restrictions on the holders of the post.

I welcome the Bill. I am happy to support it. We urge the Financial Secretary, when he obtains his powers, to make sure that he exercises his wide range of choice and looks far from Whitehall when he makes the appointment.