Commons Sitting of 19 April 2002

Preamble
The House met at half-past Nine o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Orders of the Day
  Industrial and Provident Societies Bill
  As amended in the Standing Committee, considered.
  Industrial and Provident Societies Bill
    New Clause 1

      POWER TO MODIFY, ETC. TO ASSIMILATE TO COMPANY LAW
      '(1) If, on any modification of the statutory provisions in force in Great Britain relating to companies, it appears to the Treasury to be expedient to modify the relevant statutory provisions for the purpose of assimilating the law relating to companies and the law relating to industrial and provident societies, the Treasury may, by order, make such modifications of the relevant statutory provisions as they think appropriate for that purpose.
      (2) The "relevant statutory provisions" are the provisions of the Industrial and Provident Societies Acts 1965 to 1978 as for the time being in force except the following provisions of the 1965 Act

      (a) section 1 (societies which may be registered);

      (b) section 10(1) (amendments of registered rules);

      (c) sections 16 to 18 (cancellation, suspension or refusal of registration of society or rules);

      (d) sections 23 to 27 (nominations, provision for intestacy, payment in respect of mentally incapable persons and validity of payments);

      (e) sections 50 to 54 (amalgamation, transfer of engagements and conversions);

      (f) section 55(b) (dissolution of registered society by instrument);

      (g) section 56 (power of registrar to petition for winding up);

      (h) section 58 (instrument of dissolution); and

      (i) section 59 (restriction on dissolution or cancellation of registration of society).

      (3) The power conferred by subsection (1) of this section includes power to modify the relevant statutory provisions so as to—

      (a) confer power to make orders, regulations, rules or other subordinate legislation;

      (b) create criminal offences; or

      (c) provide for the charging of fees but not any charge in the nature of taxation.

      (4) An order under this section may—

      (a) make consequential amendments of or repeals in the provisions listed in subsection (2) of this section; or

      (b) make such transitional or saving provisions as appear to the Treasury to be necessary or expedient.

      (5) The power to make an order under this section shall be exercisable by statutory instrument and no such order shall be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.
      (6) In this section—
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      "modification" includes any additions and, as regards modifications of the statutory provisions relating to companies, any modification whether effected by any future Act or by an instrument made after the passing of this Act under an Act whenever passed; and
      "statutory provisions" except in the expression "relevant statutory provisions" includes the provisions of any instrument made under an Act.'.— [Mr. Gareth R. Thomas.]
      Brought up, and read the First time.
      9.33 am
      Mr. Gareth R. Thomas: I beg to move, That the clause be read a Second time.
      Mr. Speaker: With this it will be convenient to discuss amendment No. 4, in clause 3, page 3, line 35, leave out clause 3.
      Mr. Thomas: I am grateful that so many Members have chosen to be present this morning hopefully to complete the House of Commons stages of the Bill—I emphasise the word "hopefully".
      The new clause and amendment No. 4 would replace clause 3 as it emerged from Committee. If the House will bear with me, I shall explain the effect of the new clause, and then set out the reasons for tabling it. New clause 1 narrows the power to amend industrial and provident society law by statutory instrument to assimilate it into company law to circumstances in which changes have already been made to company law. However, it broadens the range of sections that can he changed in that way while, as in the version presented on Second Reading, protecting those provisions that are central to the nature and identity of an industrial and provident society and which distinguish such societies from companies.
      Subsection (1) of new clause 1 makes only one change to the text of the current clause 3(1). It limits the circumstances in which the Treasury would be empowered to use the statutory instrument procedure to amend industrial and provident society law to assimilate it into company law to times when there has been modification of company law. It does that by removing the words
      "at any time, whether or not",
      which appear in clause 3 before the reference to modifications of company law. The equivalent line in new clause 1 gives power only on any modification of company law.
      That change makes the original version of clause 3(2) as it came out of Committee unnecessary, as it promoted the possibility of any historical modifications of company law being read across into industrial and provident society law almost immediately if the Government were so minded.
      Subsection (2) of the new clause performs the role of the current clause 3(3), as amended in Committee, in that it deals with the provisions that can be amended by statutory instrument under subsection (1) of new clause 1. In that subsection, what can be modified by statutory instrument is described as "the relevant statutory provisions". Subsection (2) of the new clause defines those relevant statutory provisions by referring to the Industrial and Provident Societies Acts 1965 to 1978, and excluding those sections that define the nature of an

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      industrial and provident society or that are essential to the nature of such societies. It differs from the version approved in Committee, which provided a list of those sections that could be amended rather than allowing amendment to any section other than the ones listed.
      I would not want the House to run away with the idea that whole new areas of change are possible as a result of this slight change in approach. That would be a misplaced concern, as I shall show later.
      A choice of sections to be excluded from the power by subsection (2) of the new clause was made on the following basis. Section 1 of the Industrial and Provident Societies Act 1965 defines the essential nature of industrial and provident societies as either co-operatives or community benefit organizations—bencoms as they are commonly known. They are excluded from change by subsection (2)(a).
      Subsection 10(1), sections 16 to 18 and section 56 of the 1965 Act provide powers needed by the Financial Services Authority, as the regulator with which societies are registered, to vet rule amendments, to refuse, cancel or suspend registration of a society or its rules, to deal with petitions for winding up, and to ensure that the requirement that the society must be a co-operative or a bencom is adhered to. As a result, they are excluded from this power by subsection (2)(b), (c) and (g).
      The other excluded sections provide specific and well-tried procedures for mutuals, building societies and friendly societies, and now for industrial and provident societies. Sections 23 to 27 of the 1965 Act deal with people nominating others to receive on their death property up to a limited value that they hold in a society, such as shares or loan stock. Sections 50 to 54, subsection 55(b) and sections 58 and 59 deal with reorganisations or dissolutions of societies by transfer of engagements, amalgamation or conversion to a company using procedures that are cheaper and easier than those otherwise available. They are excluded by subsection (2)(d), (e), (f), (h) and (i).
      Subsections (3) to (6) are much the same as subsections (4) to (7) of the version of clause 3 that emerged from Committee. The limits of the power conferred to new statutory instruments are set out in subsections (3) and (4). Subsection (5) provides for the use of the affirmative procedure for any statutory instruments made under that power. Subsection (6) defines the key terms "modification" and "statutory provisions". Some minor alterations to the wording of subsections (1) and (2) have been made to accommodate the changes made to the previous version of the clause.
      I have introduced the new clause, because, as I acknowledged in my response on Second Reading and in Committee, concerns were raised by hon. Members on both sides of the House about the breadth of the previous two versions of the clause, despite the provision for the use of the affirmative procedure and my willingness to include a defined list of sections that might be amended. Since Committee, I have also benefited from further advice and assistance on the technical issues and on some drafting problems that emerged.
      Several points were highlighted. I was advised that the interpretation of the word "modification" in the earlier version of clause 3 was open to dispute. It was suggested
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      that, when linked to a list of sections that might be modified, it might be possible to achieve only minor changes; for example, if the Treasury were minded to use statutory instruments in future, they would not deal with capacity issues for societies, or with problems in the ability of their committee or officers to contract for them or to apply rescue regimes for insolvent societies. Such avenues are available to companies and would represent a sensible modernisation of the industrial and provident society legal form.
      In essence, the list agreed in Committee was too narrow. The latest advice is that it would not allow us to introduce additional concepts in industrial and provident society law, such as the possibility of using statutory instruments to deal with capacity problems. It would allow us only to modify existing concepts in the law. Members will recall that that gives rise to particular problems, as industrial and provident society law has not been substantially amended for an extremely long time—unlike the law for companies, with which many hon. Members will be familiar, and for friendly and building societies.
      That situation is inadequate, as several of the sensible amendments that could be made to assimilate industrial and provident society law with company law would involve the introduction of additional concepts to I and P law, which have been incorporated in company law during the past 20 to 30 years. For example, company law was changed in 1989 so that third parties lending money have sensible protection if the company acts ultra vires.
      In Committee, I used a rugby club as an example. A rugby club that is a company and uses company legal form borrows money to modernise its social facilities—perhaps for that glorious time when Wales again beat England in the Six Nations, which will happen fairly soon—[Laughter.] I cannot understand why that remark provokes such mirth. The provision of such social facilities may not be covered by the club's constitution, but if it is a company, the bank's investment is protected. On the other hand, if the club used the industrial and provident society legal form, the bank's investment might not be protected. The bank could lose its investment even though it had done nothing wrong.
      I am advised that, technically, the reform in respect of capacity introduces an additional concept in industrial and provident society law. The current clause 3 would prevent that sensible reform, which is already standard for most other legal forms—certainly for companies and for friendly and building societies. The new provision could be implemented by statutory instrument, if the House and the Government are so minded, should an opportunity arise at a later stage when company law is amended.
      9.45 am
      Phil Hope: My hon. Friend is over-optimistic in his remarks about the Welsh rugby team.
      Is my hon. Friend satisfied with the amendments that have been tabled, and can he explain what he expects from the House as regards the point that he is making?
      Mr. Gareth R. Thomas: I am advised that these relatively minor amendments will help us to achieve a sensible modernisation of the industrial and provident society legal form, Some aspects of the I and P legal form differ from the company model. None of the changes is

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      especially radical; they have been included in company law and friendly society and building society law for a long time. Sensible reform has not been possible in a number of areas thus far, so the sum of those parts means that when people have to decide which legal form is most appropriate for their community business they are put off using the industrial and provident society legal form. The new clause offers the possibility of achieving modernisation further down the line through those sensible changes, if the House is so minded.
      New clause 1 overcomes the problems that I outlined because it gives a wider definition of the relevant statutory provisions. In the light of that, I hope that the House will support the change. By way of reassurance, I remind the House that during the debate on clause 3 in Committee, we discussed what could not be changed under industrial and provident society law. I highlighted aspects that could not be changed under clause 3 and, rightly, they cannot be changed by new clause 1 either. Hon. Members will see that certain key provisions of industrial and provident society law cannot be changed under new clause 1 without primary legislation. To the ultra-critical eye, those provisions might seem relatively narrow; they are listed in subsection (2)(a) to (i) and represent the fundamental differences between companies and industrial and provident societies.
      It is worth reminding the House that under new clause 1 the power to amend those parts of industrial and provident society law that can be amended arises only as and when company law is amended in the future. In practice, therefore, only those parts of I and P law that are also covered by company law would be capable of amendment. In Committee, I referred to several sections of the Industrial and Provident Societies Act 1965 that could not be changed. For those Members who want to follow that discussion, it can be found at column 14 of the report of Standing Committee G on 13 February.
      I referred to sections 11, 21, 14 and 44 of the Act. None of those sections could have been amended by clause 3 as it emerged from Committee, and it will not be possible for any of them to be amended if the House is minded to accept new clause 1. It remains the case that under new clause 1, the aspects of those sections that have no parallel in company law would be incapable of change.
      In the same part of the debate in Committee, we also touched on the Treasury consultation document that was published back in May 1998, which consulted the industrial and provident society sector about a series of possible changes to industrial and provident society law. It heralded the possibility of change to registration procedures. That would require primary legislation. It could not be changed by the previous version of clause 3; it cannot be changed by new clause 1. As I said in Committee, that Treasury consultation document also talked about the possibility of changing the statutory definition of eligible societies that was contained in the 1965 Act. That would have required primary legislation, so it would not have been covered by clause 3 as it emerged from Committee. It still requires primary legislation, so new clause 1 cannot change that situation either.
      In short, I recognise that the new clause, by reverting to a wider definition of the relevant statutory provisions that can be amended by statutory instrument, appears to widen the powers of the Executive. I know that there is widespread concern in the House when the possibilities
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      of such powers are touted. As a widening of powers in the definition of relevant statutory provisions seems sensible to achieve what we set out to do, I consider it appropriate to narrow the circumstances so that those powers can be used only after company law has been amended. I believe that that is a balanced approach, and it is used in friendly society and building society law. Section 104 of the Building Societies Act 1986 and section 102 of the Friendly Societies Act 1992 have similar provisions. As those two forms of mutual have that facility in place already, I hope that the House will be minded to recognise that a similar provision is appropriate for the industrial and provident society sector too.
      I understand that change to company law is on the agenda, so further progress to modernise the industrial and provident society legal form is possible soon. The Enterprise Bill proposes modifications to corporate insolvency law and director disqualification provisions, which could sensibly be read across into industrial and provident society rules.
      More important, perhaps, I understand that the company law review is complete and that legislation to put into effect some of its recommendations could come before the House during this Parliament. In those circumstances, I hope that the House will feel that the new version of clause 3—new clause 1—provides an acceptable compromise between the need for assimilation of industrial and provident society and company law in many areas, such as insolvency, capacity, audit exemptions—which my hon. Friend the Member for Edmonton (Mr. Love) flagged up in Committee—and other aspects of corporate governance and, of course, legitimate concern in the House not to give excessive powers to the Executive.
      I therefore commend the new clause to the House.
      The Paymaster General (Dawn Primarolo): I shall briefly express the Government's support for new clause 1 and amendment No. 4. I congratulate my hon. Friend the Member for Harrow, West (Mr. Thomas) on his excellent, detailed explanation of the provisions. The Government are keen that industrial and provident societies should benefit from a measure that would make it possible to update their legislation in line with company law. The Building Societies Act 1986 and the Friendly Societies Act 1992 contained similar powers and we welcome the opportunity to create the means of levelling the playing field among these different types of mutual organisation in this regard.
      My hon. Friend was very careful, particularly in his last few sentences, in delicately explaining to the House that the scope of the proposed power, as originally drafted, for industrial and provident societies would have been much broader than that for friendly and building societies. In particular, it would have allowed the Treasury to amend industrial and provident society legislation at any time, independently of any modification of company law provisions. The version of clause 3 that was substituted in Committee is broader still.
      Some hon. Members might be surprised to hear a Treasury Minister explaining to the House that such a power is considerably wider than would normally he conferred on any Minister or Department. Obviously, the movement realised that it could perhaps benefit more

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      speedily from modifications to legislation under such an enabling clause. Although we support that sentiment in principle, we need to ensure that subsequent secondary legislation is enacted with the appropriate checks and balances that Parliament would normally expect for such delegated powers.
      My hon. Friend's amendments will bring the powers to update industrial and provident society law into line with those applicable to other mutual societies. I believe that they are appropriate amendments, which will level the playing field for industrial and provident societies and create a mechanism whereby we can ensure that the societies do not fall behind any important developments in the framework of company law that are also relevant to the societies.
      I thank my hon. Friend for being ever vigilant on the power of the Executive and congratulate him on his presentation thus far of this important Bill. I have no hesitation in supporting the amendments on the Government's behalf.
      Mr. Thomas: I am grateful to the Paymaster General for those comments. As I said in Committee, I can see no logical reason to oppose giving the Treasury additional powers, given the quality of its performance since May 1997. However, I have been advised that such an ambitious provision might offend against the constitution
      Mr. Stephen Pound: A trifle.
      Mr. Thomas: In reality, it is not such a trifle. It is important that we seek to achieve modernisation of industrial and provident society law in the appropriate constitutional way. As I said, there is the possibility of company law reform. Fairly soon, the prospect of change to company law through the Enterprise Bill holds out genuine prospects for further change to industrial and provident society law. I am delighted that the Government feel able to support new clause 1 and I again commend it formally to the House.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 2

      CHANNEL ISLANDS
      '(1) Her Majesty may by Order in Council direct that any of the provisions of this Act or any instrument made under it shall extend, with such modifications (if any) as may be specified in the Order, to any of the Channel Islands.
      (2) An Order in Council under this section may make such transitional, incidental or supplementary provisions as appears to Her Majesty to be necessary or expedient.'.—[Mr. Gareth R. Thomas.]
      Brought up, and read the First time.
      10 am
      Mr. Gareth R. Thomas: I beg to move, That the clause be read a Second time.
      Compared with new clause 1, new clause 2 constitutes a minor and less fundamental change. It refers solely to the Channel Islands, where a slightly different legal
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      jurisdiction applies that the Bill does not currently recognise, and which, I am advised, we should mention. The new clause will confer the power to make orders, and follows closely section 75 of the Industrial and Provident Societies Act 1965. It will ensure that industrial and provident societies in the Channel Islands can enjoy the advantages of the Bill, while acknowledging that the islands' unique constitutional position must be respected in the usual way by allowing for application of the legislation with appropriate adaptations by order. On that basis, I commend it to the House.
      Rob Marris: Given that we have just had a debate about whether powers should be wider than is necessary, could my hon. Friend clarify the meaning of the word "supplementary" in the context of subsection (2)?
      Mr. Thomas rose—
      Mr. Deputy Speaker (Sir Michael Lord): Order. The hon. Gentleman will presumably deal with that point when he sums up, rather than in an intervention.
      Dawn Primarolo: The Government support the new clause, which will allow the provisions in the Bill, or any order made under it, to be extended to the Channel Islands. In practice, no such extension would be made unless the relevant authorities wished it to occur. Existing industrial and provident societies legislation either applies to the Channel Islands with modification, or can be applied by Order in Council. It is therefore right that the Bill should enable the provisions to be extended to the Channel Islands, and I can confirm to the House that we have consulted the relevant Channel Islands authorities, which are content for this provision to be included in the Bill. I therefore urge the House to support it.
      Mr. Thomas: I am once again grateful to my hon. Friend the Paymaster General for her remarks. Given the interest of my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) in the new clause, perhaps I should set out what it will achieve in a tad more detail than I had intended.
      The new clause is necessary because the Channel Islands constitute separate legal jurisdictions, and, as the Paymaster General stressed, in applying the Bill their authorities need to be consulted. It is therefore crucial that the new clause be included in the Bill. For example, under the new clause the Channel Islands co-operative society—a member of the co-operative union with which I consulted before Second Reading—can benefit from the protection afforded by the Bill's provisions, and, if the House is so minded, from modernisation of the industrial and provident society legal form further down the line, as statutory instruments are, hopefully, introduced.
      In subsection (2), the word "supplementary" simply refers to necessary provisions in Channel Islands legislation that are additional to, rather than a replacement for, current rules. I hope that I have answered my hon. Friend's query in a sufficiently effective manner, and that the House will support new clause 2.
      Question put and agreed to.
      Clause read a Second Time, and added to the Bill.

    New Clause 3

      ANNUAL FEES
      'Annual fees
      The annual fee payable by a club, society or any other organisation for registration under the Industrial and Provident Societies Acts 1965 to 2002 shall be an identical sum to the current annual return fee payable by limited companies.'.—[Mr. Greg Knight.]
      Brought up, and read the First time.
      Mr. Greg Knight: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this it will be convenient to discuss new clause 4—Financial Services Authority: fees to be charged in respect of industrial and provident societies—
      'Paragraph 17 of Schedule 1 of the Financial Services and Markets Act 2000 is amended by inserting after sub-paragraph (2)—
      "(2A) Any fee charged in respect of functions carried out by the Authority under the Industrial and Provident Societies Acts 1965 to 1978 shall be fixed in a manner which has regard to the financial circumstances of the society or proposed society which is to pay it including their turnover, profitability and scale of operation and in no circumstances will the fee charged where an existing society's turnover was less than £1,000,000 in its last year of account or where a new society is applying for registration exceed the fee chargeable in respect of the equivalent function by the Registrar of Companies.'.
      Mr. Knight: As the Order Paper reveals, I have registered an interest, although I should tell the House that I am erring on the side of caution as I may not actually have an interest to declare. I have no idea whether Bridlington Conservative club, of which I am a paid-up member, is registered under the Industrial and Provident Societies Acts. From time to time, I also give advice—usually on entertainment matters—to various working men's clubs, some of which may well be registered under the Acts. Moreover, I am joint chairman of the all-party group on non-profit making members' clubs. Those facts may or may not amount to an "interest" in the parliamentary meaning of the word, but I feel it proper that I place them on the record at the outset.
      In the history of civilised trading, the concept of limited liability is long established and well known. Those organisations that trade for profit—there is nothing wrong with that—usually form themselves into limited companies, thus enabling their liability to be limited to the value of the shares held, or to the extent of the guarantee given. The annual cost of maintaining such a company on the register, whatever the turnover, is £15, which has to be paid when the company files its annual return.
      Other organisations, many of which are non-profit-making members' clubs, may decide to register under the Industrial and Provident Societies Acts. As their name suggests, such clubs are run not for profit but for the benefit of their members. In many areas, they are the heart of their local community. They often encourage, and sometimes sponsor, the participation of members and their children in sporting events, or the development of their musical skills. They are often the backbone of many underprivileged and deprived areas.
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      For many years, those organisations paid no annual fee to remain registered under the Industrial and Provident Societies Acts, but approximately six years ago an annual fee of £25 was introduced. Hon. Members may find it odd that a fee greater than the filing fee for a fat cat-led limited company was introduced, but it was. Now, however, an outrageous situation is developing. Moves are afoot to charge those organisations approximately £200 a year for the privilege of remaining registered under the Acts. That is unjustified and unfair, coming as it does at a time when the very existence of many clubs is in doubt.
      I do not know how many right hon. and hon. Members have read an article in this week's edition of The Stage— the headline of which is "Epidemic of CIU club closures"—which states:
      "Working men's clubs—one of the largest sources of work for British light entertainers—are closing at the rate of 85 a year, it has been revealed.
      Kevin Smyth, general secretary of the powerful Club & Institute Union, told The Stage that a total of 425 member venues have shut during the last five years. And since its high point in 1974, the CIU has seen its total number of affiliates"—
      affiliated clubs—
      "drop by nearly one third—from 4,000 to 2,700.
      The scale of the problem could be even larger because CIU sites account for fewer than half those listed by the 5,500-strong Committee of Registered Clubs Association—whose members also include political or Service clubs such as the Royal British Legion."
      So the situation is dire among non-profit-making clubs. Under my new clause, I seek only to give clubs and other organisations registered under the Industrial and Provident Societies Acts parity with profit-making trading companies, and I hope that I will have the support of the whole House.
      Mr. Christopher Chope: I very much support what my right hon. Friend the Member for East Yorkshire (Mr. Knight) has said in moving new clause 3. Indeed, I also supported it by putting my name to it on the amendment paper. New clause 3 very much supports points that I made on Second Reading. To save me from restating all the interests that I declared then, I formally put on record the fact that I still have those same interests.
      On Second Reading, a number of hon. Members on both sides of the House expressed concern about the fees. I think that the hon. Member for Corby (Phil Hope) was the first person to raise the issue in that debate, when he said that there was no provision relating to fees in the Bill. Well, thanks to my right hon. Friend, there will now be scope to include the fees, so I hope that the hon. Gentleman will support the new clause, as he suggested on Second Reading that he would support such a provision.
      Similarly, the hon. Member for Wolverhampton, South-East (Mr. Turner), who is not in his place, spoke eloquently on Second Reading about the burden of fees on small clubs. I hope that what he said, which was widely supported at the time, will also be reflected in support for the new clause among those on the Government Benches because it must surely accord with common sense.
      Mr. Andrew Love: I should say at the outset that I sympathise with the hon. Gentleman's arguments, but those at the Financial Services Authority

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      say that the charges simply reflect the costs that arise from that section of their organisation. How do we respond to that?
      Mr. Chope: The hon. Gentleman makes a fair point, but I submit that we should ask ourselves why the costs to the FSA of regulating clubs should be 10 times as high as the costs to Companies House of regulating companies. There must be something very odd about the FSA's fee structure or about the way in which those at the FSA allocate their costs across their organisation if they can come up with the conclusion that it costs 10 times as much to obtain an annual renewal for a club compared with the annual renewal for a company. That is the point.
      Like several other regulatory authorities, the FSA is self-financing; it sets fees to cover its costs. It has enormous scope to limit costs in areas where there is no need for great regulation. Given the very large number of clubs, I am amazed that it should be reasonable to charge each of them up to £200 for the privilege of renewing their membership every year. It would be different if they wanted to change their rules, as that would incur a lot of costs, administration and so on.
      If the clubs just want to obtain annual renewals in the same way as companies obtain annual renewals from the Registrar of Companies, the point that my right hon. Friend makes in his new clause is absolutely in accordance with common sense. Unless the House uses such opportunities to take control over those self-financing regulatory authorities, we will cede to them the power to impose burdensome charges on clubs, which they cannot afford to bear.
      Mr. Mark Hendrick: Does the hon. Gentleman agree that that figure was probably plucked out of thin air?
      Mr. Chope: I am sorry, but I do not understand the hon. Gentleman's reference to a figure plucked out of thin air.
      Mr. Ken Purchase: My hon. Friend is referring to the increased fees.
      Mr. Chope: It is a fact that there is a threat of increased fees of £200. There is no doubt that that is the reality of the FSA's proposal. If the hon. Member for Preston (Mr. Hendrick) is suggesting that the FSA perhaps reached that conclusion on the back of an envelope and produced a nice round figure, I am unable dispute the point.
      10.15 am
      Mr. Greg Knight: I did not understand the hon. Gentleman's intervention either. I am not sure whether he was seeking to be supportive and helpful to my case in suggesting that the FSA had plucked the figure out of thin air, or whether he was accusing me of having plucked it out of thin air.
      Mr. Hendrick indicated dissent.
      Mr. Knight: The hon. Gentleman shakes his head and I am delighted that he corrects that last point. On Tuesday
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      this week, I spoke to an FSA employee, who confirmed that the fee is likely to be about £200 a year. My hon. Friend is absolutely right to say that that fee will not be charged for changing the rules, but simply for the annual renewal of registration.
      Mr. Chope: I am grateful to my right hon. Friend for making that clear. The hon. Member for Harrow, West (Mr. Thomas) has arranged a meeting with the FSA on Monday next, but my fear is that if we do not take the opportunity presented to us today to control the fees that the FSA can charge, it will deploy the same arguments as those that it has used in correspondence—it will say that it needs to impose those costs to meet its own internal charges.
      Rob Marris: I am sure that many of my hon. Friends are sympathetic to the hon. Gentleman's concerns, but I wonder whether he can clarify a technical point. Off the top of my head, I can think of four types of limited companies: public limited companies, companies limited by guarantee, private limited companies and a different type of private limited company, such as C&A was, that does not have to disclose as much information. However, the new clause seems not to differentiate in that way. Perhaps he can explain how it would operate if it were included in the Bill.
      Mr. Chope: I understand that the fee to register a small company is £15 a year and that the fee to register a new company is £20. My right hon. Friend's new clause would limit the annual renewal fee to £15 for small clubs and industrial and provident societies in the same way as it is limited to £15 for small companies. Obviously, if the fee for the renewal of company registrations were to rise from £15 to £20, the fee that the FSA charges for the renewal of industrial and provident societies' registration could also rise.
      On Second Reading, I referred to a letter that I received from the Village Retail Services Association—ViRSA—which is the organisation that deals with small rural communities that wish to revive or resurrect their retail facilities. As is stated in column 1149 of the Hansard report of that debate, I said that Mr. Peter Jones, the director of ViRSA, gave some examples of the cost of the fee structure for those very small organisations.
      A couple of hundred pounds is probably more affordable for a club with a large turnover than for a small village shop co-operative, where every penny counts. So the new FSA fee structure will affect not only clubs, but a lot of smaller industrial and provident societies with very small turnovers. The FSA has expensive premises in one of the most expensive capitals in the world and has extremely well paid staff.
      Mr. Love: The hon. Gentleman refers to the FSA, but surely it will argue that, because industrial and provident societies are more complex than companies and because there are not as many such societies as companies, we cannot make a direct comparison between the fees charged for the two groups. How do we respond to that criticism?
      Mr. Chope: I am not sure that the FSA has made that criticism. There are large numbers of industrial and provident societies, but that does not mean that they

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      should face their current cost structure. For example, there is no reason why the FSA should not set up a subsidiary in a part of the country where the costs of staff and premises are much lower. It could have a regulatory regime that is funded at a level of expenditure that is more consistent with those whom it seeks to regulate.
      Mr. Purchase: Will the hon. Gentleman extend his thesis a little further and recognise that, although London is a relatively high-cost area, the FSA is also profligate? That forms most of the problem. If the FSA were to set itself up in the west midlands—in Birmingham or Wolverhampton—it would find that people work efficiently, effectively and economically. It would not be as profligate as it is in London. He may agree that there is a total disconnection between what happens in London where the high rollers pay whatever they want for whatever they want and other areas of the country where reality has to break out from time to time.
      Mr. Chope: I agree with the hon. Gentleman, but I would not limit the areas to the ones that he specified. I would certainly include Christchurch, Ferndown and Verwood and other parts of Dorset. Ministers have referred to costs elsewhere, but the costs of employing people in Dorset are significantly lower than the costs of employing people in London. The wages and salaries that secretaries command in Christchurch, which is just under 100 miles from London, are significantly lower than the salaries that can be commanded in London. However, there is no reason to suppose that the efficiency of secretaries in Christchurch is any less than that of those in the City of London. In fact, I suspect that it is much higher, partly because they enjoy a much better quality of life.
      Mr. John Butterfill: Does my hon. Friend agree that, just as there is great variety in the type of societies that are the subject of the Bill, there is much greater variety in the type of company? Small companies that perform local community functions can be set up as limited companies and the range extends through to medium-sized companies and huge corporations. Complexity is not an issue. There is much greater variation between types of company than there can possibly be between the societies that are the subject of the Bill.
      Mr. Chope: My hon. Friend makes an excellent point. We are talking about the simple process of registration. It costs the same to register a child irrespective of the complications of the parentage, and it should cost the same to register a company or an industrial and provident society. It is a straightforward issue of equity and getting control over the costs of the regulatory authorities.
      The FSA has deployed the argument that, under the previous regime, the Registrar of Friendly Societies received a cross-subsidy from the Treasury. If that is so, one of the consequences of the new clause is that it would allow the FSA to put a good case to the Treasury if it had one. However, I am sceptical about the need for the FSA to be subsidised beyond the income that it would receive if it charged a fee for registration in line with the fee for the renewal of company registration. That is why I am an enthusiastic supporter of the new clause moved by my right hon. Friend the Member for East Yorkshire (Mr.
      826
      Knight). Although the gap may be tenfold at the moment, if things carry on as they are, the annual registration fee for friendly societies may be £500 or £1,000 in two or three years' time when people are trying to expand that sector. That would be a crippling burden on this important part of the community.
      I hope that the Paymaster General and, more importantly, the House will accept the new clause. It would provide reassurance to all the small clubs and societies that feel insecure because of the threat of increased burdens and costs of regulation.
      Mr. Adrian Bailey: I wish to speak to new clause 4, which is in my name and that of my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase). However, consistent with the declaration that I made on Second Reading, I must make it clear that I have a long association with the co-operative movement. It employed me for many years before I came into the House. I am also proud to declare that I am a member of the Labour and Co-operative group.
      New clause 4 is a probing amendment that is designed to consider the arguments and raise the issue with my hon. Friend the Paymaster General, so that we can clarify ministerial thinking. I shall not press the new clause to a vote.
      We have much sympathy with the comments made by the right hon. Member for East Yorkshire (Mr. Knight) and the hon. Member for Christchurch (Mr. Chope). The issues that they raised are seriously regarded in the co-operative movement and are a source of great concern to those who wish to set up new co-operative or community-based organisations. The difference between a company and a co-operative in the fees charged by the FSA for registration is undoubtedly a serious disincentive. The issue needs to be considered and the hon. Gentlemen were right to raise it in their discussion of new clause 3. However, I do not think that they have considered the full implications of their new clause.
      The FSA's argument has been well rehearsed. It is a self-financing organisation and, if the fees charged to industrial and provident societies were reduced, it would have to compensate for the loss of that financial stream by increasing levies on other forms of companies. It is also maintained that, because of the complexity and the need to monitor continually the rules for industrial, co-operative and provident societies, the individual societies that have registered require a higher level of scrutiny and supervision from the FSA than is required of individual companies. That, of course, results in greater expense.
      However, if new clause 3 were accepted, there would be an enormous and unintended windfall for some of the larger co-operative and mutual organisations. For example, the Co-operative Group, which controls the Co-operative Insurance Society and the Co-operative Bank, would receive an enormous windfall if its registration fees were reduced. The FSA would have to make up that enormous financial deficit from other sources.
      If we looked at the range of other major co-operative retailing organisations and housing co-operatives, much the same would be true. That is basically the reason for this new clause. It is designed, first, to provide a mechanism by which organisations considering setting up

      827
      a business along co-operative lines would not be deterred by the initial level of registration fees. It is also designed to ensure, however, that there is a level playing field between those larger co-operative organisations and companies and, to provide fairness to the FSA, to ensure that financial difficulties would not be incurred as a result of potential changes in income stream. I stress that I shall not press this new clause to a vote.
      10.30 am
      Mr. Butterfill: Although I do not have a direct interest to declare, I am a vice-chairman of the all-party group on building societies and financial mutuals, and I have a long history of supporting mutual activity in this country. Unless we include measures such as the new clause, we are in danger of putting obstacles in the way of mutuality, which the Government would not intend and which would compound the already difficult position in which mutuality finds itself in the United Kingdom.
      In many ways, it is curious that, although this country was the cradle from which mutuality sprang, it has been less successful here than it has, for example, across the Atlantic in Canada and in the United States. It may be that Governments there have created a more benign environment in which mutuality can flourish. That is what this Government—perhaps of all Governments—should be doing in relation to this new clause and this Bill. It seems absolutely extraordinary that we should suggest that mutual societies of this nature should pay fees that are substantially higher than those paid by companies that are largely set up to make profits.
      One of the things that we need to do in this country is to encourage people to work together in their communities for their mutual benefit. That is precisely what these societies do. Similarly, in relation to savings organisations, it is important that we encourage mutual savings organisations to flourish. Building societies used to perform that function as the principal providers of mutual savings. I regret, however, that the activities of the carpetbaggers and other very greedy people have meant that the building societies movement in this country has been significantly diminished. The friendly societies have not taken off as we would like, and mutual savings organisations of all types have found it difficult to set themselves up. The Government should be assisting them and providing financial support for this type of activity. If the Government are serious about dealing with the problems of financial exclusion, which I believe that they are—at least, they have that intention—it is essential that they should do that.
      First, I do not believe that it is necessary for the FSA to provide for the level of charges that has been mooted simply to have an annual renewal of registration. We return to the argument that, if the Department of Trade and Industry can do it for £15, why cannot the FSA? It may be that the DTI is subsidising the costs of companies, in which case we must ask why that should be the case, and whether it is right that companies should be subsidised by the DTI. If the DTI is not subsidising those companies, however, we must ask what is the difference with the FSA. It is up to the FSA to make a case and to say, "We need this level of charge." If they genuinely need such a level of charge, it must be right for the Government to consider a Treasury subvention to support
      828
      it. Given that the Government must believe that this is a correct thing to do, it must equally be right for the Government to consider the possibility of subvention to support this type of activity. I very much support the new clause.
      Mr. Purchase: I have always been associated with the co-operative cause, but, for the avoidance of doubt, may I once again declare an interest in that the co-operative movement supports my constituency party financially each year.
      Having said that, it is once again a pleasure to follow the hon. Member for Bournemouth, West (Mr. Butterfill), whose measured tones bring a much-needed insight to these debates. I fear that I cannot be as calm, as collected and as incisive. I believe that we are dealing with an unintended consequence—the people who have drafted the regulations for the FSA and industrial and provident societies have been unaware of the effect that their drafting would have on an important part of the social economy as a whole.
      My father and I, for more than 70 years, have been members of working men's clubs. In my opinion, working men's clubs have always been pleased to pay their way, and have always met the costs of their organisation in an honourable fashion. A burden is being imposed on clubs and on small societies and community groups. I am proud to be associated with several community groups that have registered their organisations in a proper and legal way—companies limited by guarantee and so on—and they will find themselves burdened with an excessive cost of filing each year for re-registration.
      This is not necessarily the appropriate Bill in which to introduce this new clause. However, this is an opportunity to say to the Minister, loudly and clearly, that something has to be done to right this wrong—for that is what it is. Whether it is an unintended consequence or not, those who drafted the legislation are disconnected from the everyday experience of ordinary people helping our society and our communities at the micro-level. Those people help to build up the feeling of solidarity in society, and they must not be treated in this way.
      I accept that this new clause will not find favour with the Minister at this time, but she must ensure that the protestations that we have heard today are taken forward and dealt with appropriately and effectively. We must receive an undertaking today that that will be done.
      Mr. Gareth R. Thomas: I have considerable sympathy for the comments made by the right hon. Member for East Yorkshire (Mr. Knight) and by my hon. Friends the Members for West Bromwich, West (Mr. Bailey) and for Wolverhampton, North-East (Mr. Purchase), and for the broad thrust of the comments made by the hon. Members for Bournemouth, West (Mr. Butterfill) and for Christchurch (Mr. Chope).
      As has been indicated, this issue was raised on Second Reading, and my hon. Friends the Members for Corby (Phil Hope) and for Stroud (Mr. Drew) also highlighted their concern. The hon. Member for Christchurch was good enough to give me the opportunity during his speech on Second Reading to place on record my concern about these fees. During the consultation that I have undertaken in preparation for this Bill, and during discussions prior to this stage of deliberations on it, a number of sponsoring

      829
      bodies of industrial and provident societies made representations to me about the level of fees. The WI Country Markets, the Village Retail Services Association, to which the hon. Member for Christchurch referred, the committee of registered clubs, which a number of my hon. Friends flagged up, and the Rugby Football Union are worried about the high cost of the registrations charges. I share the general view that the Financial Services Authority needs to act speedily to reduce the fees that it intends to charge from 1 July. As the hon. Member for Christchurch said, I have organised to see the FSA on Monday, partly as a result of discussions with him and the sponsoring bodies. I invite all hon. Members who are concerned to speak to me later. They are more than welcome to attend the meeting.
      Although the reference to companies in the new clauses is illuminating in that it allows us to highlight the substantial difference between the charges for the registration of companies and of industrial and provident societies, it is slightly confusing. There is no monitoring regime for companies like that traditionally carried out for industrial and provident societies by the registrar of friendly societies. One reason for the monitoring is that industrial and provident societies hold community or even possibly public assets. The comparison with companies is inappropriate because the regulator has a more active role in approving changes and in monitoring the work and operation of the industrial and provident societies.
      It is worth explaining to my hon. Friend the Member for West Bromwich, West and the right hon. Member for East Yorkshire that prior to the FSA taking over responsibility for regulation, fees for the registration of new rules or amendments to the constitution of industrial and provident societies were higher than the comparable charges for companies.
      Mr. Greg Knight: The hon. Gentleman is right that the fees were higher, but those organisations paid an annual fee of £25. Most right hon. and hon. Members would regard that as a reasonable amount. To go from £25 to £200 in one leap is surely most unreasonable.
      Mr. Thomas: I strongly share the right hon. Gentleman's view. He is right to make that point and I have profound sympathy with it. I think that we both want the same outcome. Unlike him, however, I do not think that the Bill is the appropriate vehicle for that change, which is why I have set up the meeting with the FSA to press the case.
      Mr. Knight: The hon. Gentleman says that the Bill is not the right mechanism to resolve the problem. May I draw his attention to the long title of the Bill of which he is the promoter? It refers to
      "the Industrial and Provident Societies Act 1965 to be amended so as to bring it into conformity with certain aspects of the law relating to companies".
      That is precisely what my new clause would do.
      Mr. Thomas: I understand the right hon. Gentleman's point. The fact that the Speaker has allowed the new clause to be discussed suggests that it is relevant. However, a system of financing is in place for the FSA, and it is in that context that it is appropriate to consider the sums that are charged for the registration of industrial and provident societies.
      10.45 am
      Mr. Butterfill: Does the hon. Gentleman accept that the FSA is circumscribed by the legislation that established it? The worry is that unless we use the Bill to change the way in which the charges are made and give the Government a basis on which they can vary the charges, they may find that although they are sympathetic to the case, they have no mechanism to make that change short of introducing primary legislation.
      Mr. Thomas: I do not accept that legislation constrains the FSA from changing its fees. That is why it is appropriate for us to address the problem by holding direct discussions with it.
      There is another reason why the new clause is inappropriate other than the need to introduce a stronger regime for monitoring industrial and provident societies than we have for companies. We need to recognise what my hon. Friend the Member for West Bromwich, West said about how industrial and provident societies vary enormously in size, turnover and assets. It is appropriate for some industrial and provident societies, such as the larger co-operative retail organisations, to pay higher charges because it often requires more work to monitor them than it does to monitor the smaller organisations, such as social clubs.
      Mr. Chope: Surely the annual return that is sent to the FSA to continue an existing registration does not require monitoring. All that is needed is a tick in the box and continuation of the registration.
      Mr. Thomas: I have considerable sympathy for the concern about the huge hike in the cost of the annual return. Nevertheless, the direct comparison with companies is unfortunate. Perhaps a more flexible wording of the new clause would have been more appropriate, and I accept that my hon. Friend the Member for West Bromwich, West attempted to introduce that greater flexibility in new clause 4. We need to remember that because industrial and provident societies hold assets for the community, the regulator has to take a greater interest in them, so a more appropriate regulatory structure needs to be in place. That inevitably costs more than the regulatory regime for companies.
      I accept that there is no justification for the huge hike in the charge, but I encourage hon. Members who are tempted to accept the new clauses to understand that the best way forward is to deal with the FSA face to face in order to make it clear that hon. Members on both sides of the House have huge concerns about the issue.
      Dawn Primarolo: I congratulate all hon. Members who have participated in this important debate on putting before the House some of the clear issues that relate to the fees charged. Although I will explain why the Government do not think that the Bill is the appropriate way to address the problem, we do not want to undermine the important points made about some sections of industrial and provident society legislation.
      The Government are well aware of the concern that has been expressed by some in the movement about the fee structure that is being developed by the FSA in relation to its duties under the relevant industrial and provident societies Acts. This debate takes forward many of those issues.

      831
      I stress that the final level of the fees that will apply over the coming year has not been finalised, and the FSA's consultation with the movement has only just drawn to a close. I note what my hon. Friend the Member for Harrow, West (Mr. Thomas) said about his meeting with the FSA on Monday. The figures proposed in the FSA's consultation document are illustrative, as is often the case with such documents, and we have heard other figures quoted publicly in connection with the matter.
      The FSA ensures that registrations conform to the legislation and that any changes to societies' rules, registered offices and so on are appropriate. In discharging its obligations as the regulator, the FSA has to take account of the tremendous variations across the movement. Hon. Members have demonstrated the range of societies and clubs that can fall within this category. In the event of mergers or windings up, the FSA must ensure that the relevant legislation has been respected. It also ensures that societies submit regular accounting returns.
      The transfer of functions from the Registry of Friendly Societies to the FSA occurred in December 2001. It worked to the benefit of societies in that it permitted access both to a pool of experienced former registry staff already working in the FSA on building society and friendly society regulations and to a broader range of expertise. It is important to balance the mix between obligations on regulators, access to expertise and costs to societies.
      I do not believe that it is appropriate to make a straight comparison between the fees payable by societies and those due from companies. Although I accept that valuable points were made in the submission, it is not comparing like with like. Registration obligations on the Companies House registrar are less onerous than the equivalent obligations on the FSA. It is inappropriate to link fee levels for societies with those of companies, as the new clause proposes.
      Mr. Butterfill: Of course it is right that mutual societies dealing with the funds of their members should be properly regulated, but does the Paymaster General agree that it is equally right that companies that can hide behind the benefits of limited liability, leaving behind creditors littered all over the place, require an even greater degree of regulation?
      Dawn Primarolo: It is somewhat unusual to hear a Conservative Member, even one as knowledgeable as the hon. Gentleman, pressing the Government on the need for greater regulation of companies, but I shall take his point in good faith and resist any further jibes. I promise never to quote his suggestion. [Interruption.] No, perhaps I will not make that promise.
      The hon. Gentleman is concerned about appropriate regulation and safeguards. The basis of the current debate about the mutuals—how to devise appropriate legislation to deal with protection—applies equally to companies.
      Mr. Love: Will my hon. Friend give way?
      Dawn Primarolo: In a moment, when I have finished this point.
      832
      There has been a great deal of discussion about reviewing company law and how to modernise it, and I understand that a report is due soon. We have to strike a balance between appropriate safeguards and allowing these organisations, which have different structures and fulfil different obligations, to develop and expand. The Bill is about mutuality, the industrial and provident societies and how to assist their growth and development.
      Mr. Love: Although my hon. Friend says that a direct comparison cannot be drawn, does she accept that there is considerable evidence, especially from the worker co-operative sector, that some small organisations are choosing to register as companies rather than industrial societies because of the differential, and will she bear that in mind when considering the matter in the future?
      Dawn Primarolo: That is indeed an issue of which we must be aware, as we must be aware of the differences between companies that choose to be incorporated and unincorporated and of the different structures that are available to companies, societies and clubs in providing safeguards for their members or shareholders while allowing the development of their organisations.
      New clause 3 raises the broader question of what type of registration procedures are appropriate for industrial and provident societies. Through changing the relevant Acts, the FSA could be required to undertake fewer checks and verifications during the registration process. However, that may not be in the best long-term interests of the movement, especially as recognition of and confidence in the society organisational form needs to be enhanced, not reduced.
      I thank my hon. Friend the Member for West Bromwich, West (Mr. Bailey) for the way in which he presented his arguments. I hope that the House will be seen to have paid proper attention to the issues, although we may not necessarily agree that the Bill is the appropriate way to advance them.
      New clause 4 would link the level of fees charged for carrying out regulatory functions to the size or profitability of the society's operations. New clauses 3 and 4 demonstrate the complexity of the sector, in that it was necessary to try to find an approach that would not cause problems elsewhere. I appreciate and am sympathetic to their underlying rationale, but we must take other factors into account.
      The FSA has been developing the fee structure, following consultation with interested parties, including all sponsoring bodies, trade associations and principal legal advisers to the sector. Three separate consultation papers have been issued and workshops have been held to hear the movement's views. The FSA has considered various options. One was to base the fee structure on size. However, the size profile of societies is heavily biased, as many hon. Members have pointed out, towards smaller societies, so the burden on the larger societies would be unreasonable. For example. the FSA estimated that if a larger society were to pay an annual fee of £10,000, the fee payable by other societies would reduce by about £1. That is unacceptable.
      11 am
      In addition, there is no consistent relationship between the size of a society's operations and the amount of work

      833
      that it generates for the FSA. That is linked to the points made by hon. Members about complexity, accountability and the desirability of structures in industrial and provident societies. If the FSA charged on the basis of transactions, that would lead to exceptionally high costs for individual transactions such as rule changes. That would discourage good governance and we should not inadvertently, for motivations that I quite understand, include something in the Bill that would do that.
      A link between size and fee levels for societies could also create unintended effects. For example, it could lead to charitable housing associations and registered social landlords, which are among the largest societies, effectively subsidising the cost of smaller societies such as private members-only clubs or societies set up to benefit members. That would clearly cause problems in the different structures. It would be perverse and go against the idea of a more equitable distribution of costs.
      Mr. Chope: Does the hon. Lady accept that under the proposed fee structure, small organisations that do not change their rules each year will be subsidising and cross-subsidising those that choose to change them because they did not get them right in the first place? How can that be equitable?
      Dawn Primarolo: I am trying to explain to the House the complexities of the issues involved, the diversity of the sector, and the importance of striking the right balance and considering the necessary scope of work. The number of industrial and provident societies has been broadly stable between 1996 and 2000, but the amount of their assets has increased, from approximately £41 billion in 1996, to £61 billion in 2000.
      I have been doing my best to show the House that the sector is very broad and that there is not just one simple answer. As hon. Members have said, there is a difficult balance to strike. Therefore, the FSA needs to assess all the issues; all hon. Members who have spoken this morning believe that fees need to be part of that assessment and the eventual balance reached.
      I understand that the FSA, along with many in the movement, prefers an approach based on a flat-rate fee, as the hon. Member for Christchurch said. That will inevitably affect some societies unfavourably, but equally it must be appreciated that some societies will gain from such a move. We need to find out which is the most equitable solution and ensure that it is delivered.
      We also have to consider those societies that are active in updating and developing their governance structure. That is precisely what the Bill is about. For example, I understand that the proposed periodic fee would cover all registration transactions undertaken by a society in a year. A society could, for example, adopt a completely new set of rules and have them registered for free by the FSA. The former registry would have charged £800.
      As I have continually tried to stress, it is necessary to strike a balance here. The FSA has worked hard and will have to continue to work hard to build a consensus around its proposals. I believe that at this stage it is not appropriate to legislate in the rigid fashion suggested by the new clause.
      As I have said, I am sympathetic and I understand clearly the points made by my hon. Friends. I have tried to show the complexity of the area. I am sure that there
      834
      will be ongoing discussions between the clubs and the FSA. Those discussions, I sincerely hope, will reach a solution.
      Mr. Dennis Turner: I welcome the Minister's remarks. She understands the dilemma that clubs are facing. The immense frustration felt has been echoed around the Chamber. My hon. Friend has met the FSA, and is meeting it again on Monday. Would she be prepared, if it is felt necessary, to meet the Working Mens Club and Institute Union to discuss some of the anomalies that we talked about this morning, in the hope of getting justice for the clubs of this country?
      Dawn Primarolo: Normally this subject area would fall within the remit of the Economic Secretary. However, both the Economic Secretary and I are always pleased to receive representations and see delegations. I am sure that, if my hon. Friend thought it appropriate, either one of us would do our best, as we try to do for all Members, to accommodate those representations.
      I hope that I have given the House an explanation of why the Government do not support the new clauses. I hope that they will not be added to the Bill, but also that the House is sufficiently reassured that the Government have taken note not only of the representations, but of this debate.
      Mr. Greg Knight: We have had a very interesting debate, and I am grateful for the support expressed for my new clause by hon. Members on both sides of the House. I am particularly grateful for the comments of my hon. Friends the Members for Christchurch (Mr. Chope) and for Bournemouth, West (Mr. Butterfill), who made a very powerful case for the new clause.
      This really comes down to the fact that, once a year and for a fee of £15, Companies House, in respect of each limited company registered with it, examines the company accounts and the annual return form that a director or secretary of the company has to submit. The FSA says that, in future, it will charge £200 to examine similar forms and accounts submitted by clubs and other organisations that, under the Industrial and Provident Societies Acts, come within its remit. Clearly, there is something wrong with the FSA's system, because in each case accounts are prepared. The FSA does not have to put together those accounts; organisations submit them in a recognised form. I do not, therefore, feel that the size of the proposed fees can be justified.
      The hon. Member for West Bromwich, West (Mr. Bailey) made, if I may say so, a rather strange speech, appearing to speak against his new clause. Either the Whips did a little arm-twisting earlier today, or his heart was not in the arguments in the first place.
      The hon. Member for Harrow, West (Mr. Thomas) reminded us that this issue was raised on Second Reading. He said that swift action is needed, but pinned his hopes on a meeting he has pending with the FSA. If what the FSA is telling the Working Men's Club and Institute Union—the CIU—is anything to go by, I would advise the hon. Gentleman not to raise his hopes too high. A member of the FSA has advised the union that if clubs do not like the fee, they can deregister—an outrageous piece of advice, given that deregistering means that clubs would lose their limited liability. If a club that had deregistered

      835
      got into trouble, the working people running it would find that their homes, cars and other assets could he seized. Deregistering is not an option for clubs.
      When the hon. Member for Wolverhampton, North-East (Mr. Purchase) rose, my optimism increased. He is an important Member of Parliament and Parliamentary Private Secretary to the President of the Council and Leader of the House of Commons, so when he said that he supported the measure I thought that meant that the Government were on side—there spoke the PPS to the Leader of the House. Then along came the Paymaster General to pour cold water on everything that her hon. Friend had said.
      Mr. Purchase: I do have some independence of mind, which does not al ways accord with Government policy.
      Mr. Knight: I applaud the hon. Gentleman's independence on this matter: may we see much more of it.
      I strongly advise the Paymaster General not to enter any working men's club in Bristol in the near future, because if its members have read her speech I doubt that she will receive a warm welcome. The hon. Member for Wolverhampton, North-East says that something has to be done, and he is right. I am extremely disappointed that, although she expresses sympathy, the Paymaster General has declined to give a commitment to consider the issue. To be fair, she said that she would be happy to meet a delegation from the CIU or some other source, but she gave no commitment to the House that she would examine the matter with a view to righting the clear wrong.
      Something has to be done, and my new clause is a vehicle to do it. I hope that the House will approve it.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 10, Noes 74.

      Division No. 212]

      [11.13 am

      AYES

      Allan, Richard

      Forth, Rt Hon Eric

      Bottomley, Peter (Worthing W)

      Hayes, John

      Brazier, Julian

      McIntosh, Miss Anne

      Cable, Dr Vincent

      Chapman, Sir Sydney (Chipping Barnet)

      Chope, Christopher

      Tellers for the Ayes:

      Clarke, Rt Hon Kenneth (Rushcliffe)

      Mr. Greg Knight and

      Mr. John Butterfill.

      NOES

      Anderson, Rt Hon Donald (Swansea E)

      Drown, Ms Julia

      Eagle, Maria (L'pool Garston)

      Bailey, Adrian

      Ellman, Mrs Louise

      Barnes, Harry

      Ennis, Jeff

      Beard, Nigel

      Field, Rt Hon Frank (Birkenhead)

      Berry, Roger

      Fitzpatrick, Jim

      Borrow, David

      Follett, Barbara

      Challen, Colin

      Gerrard, Neil

      Clark, Mrs Helen (Peterborough)

      Gilroy, Linda

      Corbyn, Jeremy

      Griffiths, Jane (Reading E)

      Cousins, Jim

      Hendrick, Mark

      Cranston, Ross

      Hill, Keith

      Davey, Valerie (Bristol W)

      Hopkins, Kelvin

      Dismore, Andrew

      Howells, Dr Kim

      Dobbin, Jim

      Hughes, Kevin (Doncaster N)

      Dobson, Rt Hon Frank

      Hutton, Rt Hon John

      Donohoe, Brian H

      Jones, Lynne (Selly Oak)

      836

      Keeble, Ms Sally

      Pound, Stephen

      Keen, Alan (Feltham & Heston)

      Primarolo, Dawn

      Knight, Jim (S Dorset)

      Prosser, Gwyn

      Lammy, David

      Purchase, Ken

      Lawrence, Mrs Jackie

      Rapson, Syd

      Lazarowicz, Mark

      Salter, Martin

      Lepper, David

      Sedgemore, Brian

      Linton, Martin

      Sheridan, Jim

      Love, Andrew

      Skinner, Dennis

      McAvoy, Thomas

      Smith, Angela (Basildon)

      McFall, John

      Stewart, Ian (Eccles)

      Mactaggart, Fiona

      Taylor, David (NW Leics)

      McWalter, Tony

      Thomas, Gareth R (Harrow W)

      Michael, Rt Hon Alun

      Touhig, Don

      Mole, Chris

      Turner, Dennis (Wolverh'ton SE)

      Munn, Ms Meg

      Turner, Dr Desmond (Kemptown)

      Naysmith, Dr Doug

      Twigg, Stephen (Enfield)

      Norris, Dan

      Vis, Dr Rudi

      Olner, Bill

      Wilson, Brian

      Palmer, Dr Nick

      Tellers for the Noes:

      Picking, Anne

      Phil Hope and

      Pond, Chris

      Rob Marris.

      Question accordingly negatived.

    Clause 1

      REQUIREMENTS FOR CONVERSION OF A REGISTERED SOCIETY INTO A COMPANY
      Mr. Gareth R. Thomas: I beg to move amendment No. 2, in page 1, line 7, leave out "subsections (2) and" and insert "subsection".
      Mr. Deputy Speaker: With this it will be convenient to discuss the following amendments: No. 3, in page 1, line 8, leave out subsection (2).
      No. 1, in page 2, line 27, leave out Clause 2.
      No. 6, in clause 2, page 2, line 40, after "cannot", insert—
      'save with the written consent of the Financial Services Authority'.
      No. 7, in page 3, line 34, at end insert—
      '(6) In exercising its discretion as to whether to give its consent under paragraph (c) of subsection (1), the Financial Services Authority shall have regard to the following matters:

      (a) the purpose or intention of the society's members evidenced by the rules of the society and, in particular, by the inclusion of the provisions referred to in subsection (1);

      (b) the interests of the community for whose benefit the society was registered and its successors;

      (c) whether the whole or any part of the value represented by the assets of the society should be dedicated to the continued benefit of the community; and

      (d) whether the transfer of engagements, amalgamation or conversion referred to in paragraph (c) of subsection (1) is necessary in the interests of the viability of the industry business or trade carried on by the society.'.

      No. 5, in title, line 5, leave out from "company;" to "and" in line 7.
      Mr. Thomas: I introduce the amendments in my name with some reluctance. I believe that the debates on clause 2 on Second Reading and in Committee have established the importance of ensuring that assets originally dedicated to a community, not to a society's members, should

      837
      remain dedicated to that purpose. Following the discussions I have had, I believe that there is now strong sympathy for that position.
      Our debates on the clause have also highlighted the importance and value of the community benefit form of industrial and provident society as a vehicle for the pursuit of public interest aims. I have already referred to the benefit of having a regulator, in the form of the Financial Services Authority, to ensure that any society registered under the legislation remains either a co-operative or a community benefit organisation.
      Without that safeguard in industrial and provident society law, there would be little to stop the conversion of a co-op from a non-profit vehicle to a company operating for the benefit of its members, shareholders or whatever. Generally, the Registrar of Companies does not police such matters; rightly, he has no duty to do so where a company structure is used. The courts exist as a possible forum for enforcing provisions in company constitutions to protect assets, but unfortunately that would be an expensive and cumbersome process, and only complex structures involving trust arrangements, and a number of other corporate vehicles, can achieve such aims if the industrial and provident society structure is not used.
      In comparison, industrial and provident society legislation provides a relatively cheap and effective means of establishing and maintaining social enterprises that operate in the interests of people other than their owners. Clause 2 would have bolstered and improved that system, but even without it, the House should recognise that the industrial and provident system still has great advantages.
      Clause 2 and the debates that surrounded it have played their part in the wider process. I understand that the performance and innovation unit in the Cabinet Office has been working on such issues as part of an examination of social enterprise for the Government. I welcome the fact that that work is taking place.
      In that spirit, I also commend the judgment of my right hon. Friend the Secretary of State for Trade and Industry in giving a Minister specific responsibility for this sector when she took up her post. The performance and innovation unit report is imminent, and when it appears the whole question of legal structures for social enterprise will be considered across Government Departments, so it seems appropriate that the issue of asset locking should be taken out of the Bill at this stage and examined as part of that wider discussion.
      During our deliberations in Committee, my hon. Friend the Economic Secretary to the Treasury highlighted a number of technical issues that would have remained if clause 2 had stayed in the Bill. What she said is recorded in column 11 of the Hansard report of Standing Committee G for 13 February. Those technical issues need to be sorted out, so it is right to take clause 2 out. I hope that the performance and innovation unit report, and the consideration of it across Departments, will address those issues.
      On that basis, I commend the amendments to the House. As I said, I do so with some reluctance—but I feel reassured that the issues will not drop off the agenda, and I am delighted by the work being done within Government. It is sensible that the issues raised by clause 2 should be considered as part of that general discussion rather than remaining in the Bill.
      11.30 am
      Mr. Love: I should like to speak to amendments Nos. 6 and 7, which are probing amendments designed to increase the flexibility of clause 2. I shall try to set out their context.
      There are two classes of industrial and provident societies: bona fide co-operatives, and societies for the benefit of the community, which have a much wider role in society and operate not just for the benefit of their members. Indeed, their prime consideration is the community interest. When registering, all industrial and provident societies must give reasons for registration as an industrial and provident society; that touches on the previous debate about why there are different charges and why there is an onus on the Financial Services Authority to provide proper regulation of industrial and provident societies.
      The FSA gives societies guidance on the registration criteria, which range from a desire to operate mutually under a one member, one vote constitution to business reasons. The important point, however, is that societies must be able to demonstrate their reasons to the registrar. Although there is a safeguard for industrial and provident societies, community benefit societies are vulnerable to asset stripping, and that is particularly true of those that have unclear rules on such circumstances. Someone could therefore exploit a loophole to achieve conversion to a limited liability company, with the assets falling into the hands of a restricted group of members.
      The Royal Automobile Club operated under slightly different rules, but everyone was amazed to discover what happened to all the so-called members who signed up with the RAC and built it up over a long period. When its assets were distributed, the members of the best swimming club in London were the net beneficiaries, receiving £35,000 each, which was unfair then and is unfair now. Against that background, we need to protect industrial and provident societies.
      Housing associations are safeguarded by the Housing Corporation, because public assets are involved, but if a housing association dispensed of its public assets it could convert for the benefit of a limited membership.
      In my probing amendments, I wanted to test the Government's attitude to entrenching assets in an industrial and provident society. Governments of all persuasions, as has been said on numerous occasions in the past 10 to 15 years, have always resisted attempts to entrench assets, as is reflected in clause 2. However, in France, for example, AXA, a well-known brand name in this country and Europe, can be characterised as an industrial and provident society. There are other major examples of what we would consider industrial and provident societies throughout Europe, although that does not apply to every type of organisation. In this country, charities are perhaps the most prominent example of organisations that simply cannot change their charitable status. Everyone accepts that that is appropriate in the circumstances.
      Ms Meg Munn: Does my hon. Friend agree that people who set up a community benefit organisation often do not think about what might happen subsequently? The danger is that they might not be clear about how the rules will apply if the organisation changes in a particular way? As he graphically illustrated with the

      839
      RAC, unintended consequences might result. There is a genuine need to provide protection for organisations that seek to benefit the community and are not established to provide benefits, profits or surpluses for individual members.
      Mr. Love: That is exactly the case that I am trying to make. Societies are often established with proper constitutions, but without thought about what will happen. I know that it is not possible, but if we interviewed people who originally set up many mutual organisations that have since been demutualised, we would discover that that eventuality was the last thing on their minds. Assets that have been built up over generations for mutual benefit should not be given to a limited number of shareholders who benefit from demutualisation. My amendments therefore seek to provide long-term protection.
      Credit unions are another form of organisation with entrenched constitutions, perhaps because the Credit Unions Act 1979 was very much based on the Irish experience and did not sufficiently take into account the norms of British jurisprudence. However, it was decided that credit unions cannot convert in the same way as building societies or other mutual organisations. As my hon. Friend the Member for Harrow, West said, some discussions with the Government on public interest companies have covered the possibility of introducing legislation to entrench other forms of organisation. In principle, if the arguments are strong enough, there is no reason why entrenchment should not take place, which is why amendments Nos. 6 and 7 provide a flexible response to asset locking while allowing the FSA to use its experience and expertise to make the final decision. If, under clause 2, a society entrenches its assets, and if there is a move in future to convert the society, it will be for the FSA to sanction the decision.
      Mr. Greg Knight: How does the hon. Gentleman envisage the FSA assessing the interests of the community under amendment No. 7? For example, does he envisage the FSA conducting a poll or seeking to take evidence from all members of the organisation to see whether a certain view is held by the whole membership? Or does he see the FSA going beyond the members of the organisation to ascertain the answer?
      Mr. Love: I was going to come on to the issues that the FSA will need to take into account but, of course, the community interest is an extremely important consideration for community benefit societies. The FSA will have to have a way of taking the temperature of a community that may be badly affected. If the FSA had taken the temperature of RAC members when the RAC was demutualised, I strongly suspect that there would not have been support for the cause espoused by the limited number of members who benefited from demutualisation. However, it will be for the FSA to make the final decision to sanction demutualisation. We accept that there will be problematic cases, such as those involving declining memberships.
      Concern has been expressed about the inability of certain credit unions to turn themselves into commercially viable organisations; the same is undoubtedly true of a number of industrial and provident societies. Their
      840
      original purpose may have ended, or the community that they represented no longer exists in the same form; or they may simply need a business rescue and restructuring. There will therefore be circumstances in which it will be appropriate for the FSA to sanction change.
      Mr. Butterfill: I am listening carefully to the hon. Gentleman, and I agree with everything that he has been saying. Does he agree that where assets have been built up over many years, there is an intergenerational responsibility, and that in principle it is wrong that, for financial gain, one group of people, at one snapshot in time, should enrich themselves at the expense of the continuation of activities? Only where there are circumstances that the hon. Gentleman has been describing, when such activities can no longer reasonably be continued, should the FSA agree.
      Mr. Love: That point is included in my amendments. The FSA will need to take into account what will happen to the assets of the society in such circumstances. Intergenerational issues will indeed be important; also important will be whether assets are distributed on the widest possible basis to the community or are restricted to only a few people. We know that although the community benefits from the activities of community benefit societies, their membership is normally restricted. There may be only a few people. All these issues need to be taken into account.
      There are various important considerations, including the original purpose of the society as written into its constitution by its members on its formation. Another important consideration is the interests of the community. In addition, there are the assets. There may also be business reasons. We understand that sometimes the safeguarding of jobs and the continuation of the organisation may necessitate change. In those circumstances, that should be allowed.
      The purpose behind the amendments is to ensure flexibility when problems arise. We cannot foresee all circumstances. One of the major concerns of government has been that to entrench for ever does not allow for unforeseen circumstances. The amendments will provide the flexibility that will safeguard the community benefit that the societies offer, and demutualisation where that is appropriate.
      Many people will ask, "Why are we giving this power to the FSA?" We have discussed the duties that the authority has to undertake and whether costs will be increased. The authority already has considerable experience in this area. For example, it has a statutory duty to ensure that all industrial and provident societies are either bona fide co-operatives or community benefit societies. I say to those who think that that may be a theoretical issue that the largest retail co-operative society in the 1980s—it had a turnover of hundreds of millions of pounds and more than 50,000 employees—was deemed by the registrar not to be a bona fide co-operative. It needed to decouple itself from its wholesale organisation so that it would continue to be registered as a society.
      If the registrar can take important decisions of that nature—it was supported by all genuine co-operators as being in the best interests of the industrial and provident society movement—that experience can be used to ensure that societies are maintained for community benefit but

      841
      that demutualisation can be allowed in appropriate circumstances. There is inflexibility in having entrenchment without safeguards.
      Mr. Greg Knight: The discretion that is provided in amendment No. 7, which is given to the FSA, is not absolute. The authority will have to take into account certain factors, which the hon. Gentleman has explained. As there is not absolute discretion, is there not a risk that we might see a plethora of court cases, with aggrieved parties challenging whether the FSA had acted properly and whether it had given due weight to certain matters? Would not absolute discretion have been a better way forward?
      11.45 am
      Mr. Love: There is considerable discussion about public interest companies that will be formed under Companies Acts procedures. The only means of challenge will be through the courts, with all the delay and expense that that involves. One of the great advantages of the process that I am advocating is that it will, in most instances, preclude recourse to the courts. There will be streamlining and it will be possible to use procedures with ease. In extremis, however, the courts may have to be used—for example, where it is felt that the FSA has not reflected properly the legislation that is on the statute book. We cannot have it all ways.
      We have not gone for an absolute power. We want to increase flexibility, so the FSA should be able to make a decision within the broad parameters set out in the amendments.
      We want to strengthen the protection of industrial and provident societies. We recognise that that will be achieved only by providing flexibility to the FSA, which is both independent and, we hope, objective when dealing with these matters. If it can adjudicate in circumstances where there is difficulty, that should provide the protection that the Government require, so that we do not entrench for all time where the circumstances are not supportive.
      Dawn Primarolo: The Government support amendments Nos. 2, 3, 1 and 5. My hon. Friend the Member for Edmonton (Mr. Love) said that amendments Nos. 6 and 7 are probing amendments. I shall explain why the Government want to resist his amendments. I hope that, on that basis, he will feel able to withdraw them. If not, he must know that the Government do not support them.
      On Second Reading and in Committee, the Government indicated that while we can see potential benefits in enabling community benefit societies to dedicate their assets to the benefit of the community, we were concerned about how that might work in practice. The right hon. Member for East Yorkshire (Mr. Knight) touched on one of many possibilities in this fraught area. That being so, I shall not speak at length.
      Legislation that irrevocably commits assets to the benefit of the community must not have unintended effects. Asset lock-in would be a crucial decision for an individual society, and we must also take a view of the effect on the sector as a whole. For example, it must not reduce the flexibility of the sector to allow it to consolidate and grow.
      842
      One way to ensure continued flexibility within the sector and make provisions to deal with exceptional circumstances for individual societies would be through powers to reverse or amend asset lock-in in special situations. However, we think that this would raise further questions about defining any circumstances where the asset lock-in might be reversed—for example, who might exercise these powers and how they might be enforced.
      The hon. Member for Christchurch (Mr. Chope) asked in Committee about the rights of members. The adoption of an irreversible asset lock-in rule by an existing society, without unanimous vote, could unwillingly deprive some of those members of rights in a way that might be incompatible with article 1 of the first protocol to the European convention on human rights. The right hon. Member for East Yorkshire might not have referred specifically to that, but he mentioned the possible range of involvement of the courts where somebody disagreed with a decision.
      The performance and innovation unit is currently considering the organisational forms of social enterprise, and we look forward to considering its further analysis of the provisions that might help the sector to grow and thrive.
      Provisions such as asset lock-in need detailed consideration. That is why I agree with the four amendments tabled by my hon. Friend the Member for Harrow, West (Mr. Thomas) to remove the clause and references to it elsewhere in the Bill. In principle, clause 2 has some attractions, but, in its present form, it does not fully resolve the issues of which we are aware, nor have we consulted widely to make sure that there are no other implications that would need to be considered.
      Amendments Nos. 6 and 7 were tabled by my hon. Friends the Members for Edmonton and for Bristol, North-West (Dr. Naysmith). The possibility of allowing the Financial Services Authority to arbitrate on whether a society that had adopted an asset lock-in rule should still be allowed to convert to or merge with a company without such a rule is an interesting proposal. I see that, as my hon. Friend the Member for Edmonton pointed out, that might provide useful flexibility where a society was encountering financial difficulties. For example, the FSA could permit a society to merge with a local company or restructure in some way under company status and thereby avoid having to cease its activities.
      Government officials examined such possibilities during their work with advisers assisting my hon. Friend the Member for Harrow, West in an attempt to address the Government's concerns about the clause. However, I do not consider that the two amendments would be sufficient to resolve the issues that have been discussed during the passage of the Bill.
      In addition to the points that I have already raised, there are other issues that we would need to consider—for example, whether the FSA should be able to prevent a society from adopting an unalterable asset lock-in in the first instance; whether there should be circumstances in which a society could reverse such a rule once adopted; and whether all societies or bencoms should be able to adopt this irrevocable rule in their constitutions.

      843
      If it were necessary to wind up a society that had such a rule, would the FSA be the best authority to authorise the conversion or transfer, or should some other authority or even the courts take a role? Bearing in mind the discussion that we had in a previous debate about the cost of fees to the FSA, it is odd that the amendment would put greater obligations on the FSA.
      I say to my hon. Friends the Members for Edmonton and for Bristol, North-West, as gently as possible and with the best of intentions, that although we appreciate their intentions, the Government believe that their amendments would not be sufficient or a substitute for a more detailed consultation and consideration of such powers. I sincerely hope that having had the benefit of putting—
      Mr. Edward Davey: Will the hon. Lady give way?
      Dawn Primarolo: No, I am about to conclude my remarks.
      I support amendments Nos. 2, 3, 1 and 5, and hope that my hon. Friend the Member for Edmonton will be satisfied with having his comments on the record, in the knowledge that the matter needs and will receive further consideration and consultation. He can look forward to returning to the matter at some future date.
      Mr. Gareth R. Thomas: I am grateful to my hon. Friend the Minister for her comments in support of my amendments. I commend the speech of my hon. Friend the Member for Edmonton (Mr. Love) and the amendment tabled by him and my hon. Friend the Member for Bristol, North-West (Dr. Naysmith). It is an ingenious device that would provide additional flexibility and improve clause 2 as it emerged from the Standing Committee. Nevertheless, as the Minister says, there are still issues that need to be resolved, and it is appropriate that that should be done in the context of the performance and innovation unit report and considered across Government. I hope that my hon. Friend the Member for Edmonton will withdraw his two amendments and instead support mine.
      Amendment agreed to.

    Clause 1
      REQUIREMENTS FOR CONVERSION OF A REGISTERED SOCIETY INTO A COMPANY
      Amendment made: No. 3, in page 1, line 8, leave out subsection (2).—[Mr. Gareth R. Thomas.]
    Clause 2
      COMMUNITY BENEFIT SOCIETIES
      Amendment made: No. 1, in page 2, line 27, leave out Clause 2.—[Mr. Gareth R. Thomas.]
    Clause 3
      POWER TO MODIFY, ETC, TO ASSIMILATE TO COMPANY LAW
      Amendment made: No. 4, in page 3, line 35, leave out Clause 3.—[Mr. Gareth R. Thomas.]

    Title
    Amendment made: No. 5, in line 5, leave out from "company;" to "and" in line 7.—[Mr. Gareth R. Thomas.]
    Order for Third Reading read.
    11.56 am
    Mr. Gareth R. Thomas: I beg to move, That the Bill be now read the Third time.
    The Bill emerges from Report significantly improved and achieves two things: first, it places co-operatives registered under the industrial and provident societies legislation in the same position as building societies by ensuring that on that most crucial decision whether or not to convert to a company, there is substantial democratic participation. Members can still change the structure of their organisation, but only on a 50 per cent. turnout and the 75 per cent. vote in favour which was already provided for in law, mirroring the existing provision in building society law.
    Secondly, the Bill permits the use of statutory instruments when company law is changed in future to assimilate industrial and provident society law with company law, to deal with the discrepancies on, for example, insolvency procedures, capacity rules, accounts and audit and other aspects of corporate governance which meant that industrial and provident society legal form lagged considerably behind that of the company model and the friendly society and the building society model.
    Although that can happen only when changes to company law are enacted, following our deliberations in Committee and in the Chamber today, it is possible for any part of the industrial and provident societies legislation from 1965 to 1978 to be changed, except those parts that are central to the nature of industrial and provident societies or to facilitating the processes that they carry out.
    It is important that the co-operative and social enterprise sector is allowed to develop freely and that artificial obstacles such as the lack of a modern legal form are not put in its way. The uneven playing field with companies in the areas that I mentioned and the difference from building societies and other mutuals on demutualisation were serious problems, which have exercised members of the co-operative movement for a considerable time.
    The Bill, although modest, allows both issues to be resolved, and should play a small but important role in encouraging the use of industrial and provident societies, so facilitating the development of co-operatives and of businesses with community benefit aims. That can only benefit our economy and the development of communities that are both enterprising and caring.
    I pay particular tribute to the sponsoring bodies that I consulted and with which I worked to bring the Bill to its present stage: WI Country Markets, the Committee of Registered Clubs, the Village Retail Services Association, the Rugby Football Union, the Welsh Rugby Union, the United Kingdom Co-operative Council and the

    845
    Co-operative Union. They have all been extremely helpful and positive about the Bill and I welcome that.
    During the Bill's passage, a number of issues have been raised that still need to be resolved, of which asset lock-in, which we were discussing only a short time ago, is a key one, as is the issue of fees for registration, which I hope will be sorted out shortly.
    On the eve of the private Member's ballot in July last year, a former Minister said to me in passing that hon. Members who were lucky enough to secure a private Member's Bill opportunity tended to become obsessive about the process. Hon. Members will recognise that I am the exception to that rule, but nevertheless I have at times come close to being obsessed and I am grateful for the considerable support that I have had in avoiding falling into that trap from parliamentary colleagues, particularly members of the co-op group.
    I am grateful for the support that the Bill has had at all stages from Treasury Ministers, and the helpful advice that we have received from their officials. When I heard that the hon. Member for Christchurch (Mr. Chope) was to lead for the Opposition, being aware of his two-hour speech on the High Hedges Bill, I did not immediately feel delight, but I am grateful to him for the way in which he has engaged with me and with the issues, and we have a better Bill as a result of those cross-party discussions. I am also grateful for the contributions of the hon. Member for Twickenham (Dr. Cable) who leads for the Liberal Democrats for approaching the Bill in the same spirit.
    I am grateful, too, for the support from the co-operative movement. The Bill puts in place a number of provisions for which that movement has long campaigned to have included in legislation. In particular, I am lucky enough to chair the Co-op party and I pay tribute to its members who have been assiduous in lobbying Members of Parliament on the Bill. I also pay tribute to its staff who have been extremely helpful during the Bill's passage.
    I pay tribute to three people in particular who have worked closely with me on the Bill. Mr. Ian Snaith, the guru of co-operative law, passed me a great tome on industrial and provident society legislation to read on the beach during the summer. I am extremely grateful to him for his support and advice, but he will understand when I say that I will be delighted never to have to look at that particular tome again.
    I also pay tribute to Mr. Cliff Mills from Cobbetts, the lawyer who has worked closely with me on the Bill. He has almost convinced me of the worth of the lawyers as a profession, but not quite. He has been extremely kind, generous and supportive and without his advice the Bill would not have reached this stage.
    Finally, I pay tribute to my friend the general secretary of the Co-op party, Peter Hunt, who has been an extremely loyal supporter during the Bill's passage. However, in saying those words, just in case lightning should strike twice when the private Member's Bill ballot is drawn next year, I warn him that I will not be in a position to meet him.
    I am grateful for the support of hon. Members in making the time to be here on Friday. I know how difficult that can be on occasion. I hope that the House agrees that the Bill has been significantly improved and is worthy of a Third Reading so that it can be passed to the other place for consideration.
    12.4 pm
    Mr. Greg Knight: I am disappointed that what could have been a great Bill is only a fair Bill following the defeat of new clause 3. The Paymaster General needs to appreciate the great debt of gratitude that she owes to her Whips Office, because during discussions inside and outside the Chamber on the Bill several Labour Members have told me that they supported new clause 3 but had been advised not to vote for it. Therefore, I warn her that if the issue is not satisfactorily resolved, it will return.
    I congratulate the hon. Member for Harrow, West (Mr. Thomas) on steering the Bill this far. A private Member's Bill is a fragile vessel indeed and he has done well to reach Third Reading. I wish him the best of luck in his forthcoming meeting with the FSA. I hope that he will relate the growing concern in all parts of the House on the issue of fees and that his meeting will ultimately help to resolve that outstanding matter.
    Mr. Thomas: I invite the right hon. Gentleman to speak to me after today's proceedings and to take part in that meeting.
    Mr. Knight: I respond in the spirit in which the hon. Gentleman made the offer. I shall speak to him when our proceedings have concluded. I wish the Bill well.
    12.6 pm
    Mr. Love: I warmly welcome the Bill and I congratulate my hon. Friend the Member for Harrow, West (Mr. Thomas), not least on maintaining a sense of humour throughout the proceedings up to Third Reading.
    It is well to remind the House that the industrial and provident society sector consists of something approaching 9,000 different societies with total assets of around £61 billion. It is a substantial sector of the economy. Perhaps even more important than that are the sector's unique structures, which can be summed up as an attempt, through constitutional means, to combine the efficiency necessary to survive in a competitive environment with the need for community involvement and, in many cases, democratic accountability. That is no mean feat.
    We have an enormous diversity of organisation. We all know the tremendous work done by the housing associations, not only in building houses, which is their primary function, but, if one considers how they have evolved during the past five years, in becoming increasingly involved in community issues with regard to poverty and deprivation. That is a step that I welcome. We also have the old retail shops, agricultural co-operatives and, as many hon. Members have said, there are the different clubs, ranging from Conservative clubs through to trades and labour clubs. That is perhaps the only way in which the two sides come together, which attests to the diversity and warm fellowship within the movement.
    I want to comment briefly on two important issues.
    Linda Gilroy: Does my hon. Friend agree that, having listed the existing mutual models that will be grateful for the Bill, new generations of social entrepreneurs will also be grateful as they develop new and lasting models based on the Bill?
    Mr. Love: I wholeheartedly agree with my hon. Friend, not least because, in the mutual movement, we tend to look back, and it is most important that we look forward. I hope that the Bill is a contribution to that. This is the first legislation on industrial and provident societies for 30-odd years. There have been numerous Companies Acts during that period, so a Bill that provides for updating industrial and provident society legislation without the need for primary legislation, is a welcome measure. Industrial and provident societies face hurdles. They do not have a level playing field with their company competitors, but the Bill will help to create one.
    In the past 15 years, demutualisation of societies has been seen as the honest and correct thing to do, as there have been windfall benefits for everyone and no down side. The Bill recognises that that is not the case. More importantly, it exposes what has happened as a result of demutualisation. The original clause 1—it may be clause 2 under the revised numbering—recognises that we must create a level playing field for industrial and provident societies, otherwise they, like other mutuals in the financial services sector such as building societies and mutual insurers, will be overtaken by events, as has happened in years past. The debate about whether organisations should demutualise was overtaken by the question of how much money individual members would receive, regardless or whether such a move was to the benefit of the society.
    Almost all the arguments used by the managements of the organisations that demutualised are now either bankrupt or do not apply. There is concern that some of those organisations, having demutualised, will now be gobbled up by other financial services companies or banks, and will no longer be able to offer the services that they provided when they were mutuals.
    We must try to create a more level playing field for industrial and provident societies. The court case involving the Co-operative Wholesale Society shows the need to do that. Two of its most senior executives have been found guilty and will be sentenced in the near future. That is an object lesson for us all, and shows what can happen inside large organisations with significant assets that many people would like to get their hands on.
    I strongly welcome the Bill, because it moves towards a level playing field for industrial and provident societies. We need to take further steps, and my hon. Friend the Member for Harrow, West listed some of them. This is a most welcome measure, and I commend it to the House.
    12.13 pm
    Mr. Butterfill: I endorse the warm welcome that the hon. Member for Edmonton (Mr. Love) has just given to this excellent Bill. I share the regret of my right hon. Friend the Member for East Yorkshire (Mr. Knight) that we have not adequately tackled the issue of charging by the Financial Services Authority. I hope that the proposed meetings will bear fruit, because the will of both sides of the House has been clearly expressed.
    I also understand why the Paymaster General felt unable to accept amendment No. 7, which was tabled by the hon. Member for Edmonton. That was a little disappointing, but there is clearly a need to consult
    848
    further. I hope that that consultation will lead to a successful conclusion on the important issues that were raised in that amendment.
    Having said that, I think that this is a worthwhile Bill. It has been clear from the debate that much of the important fabric of our society is represented by industrial and provident societies. Without their activities, our communities would be deeply impoverished. The strengthening of those societies through this legislation was long overdue. I join in the congratulations given to the hon. Member for Harrow, West (Mr. Thomas) on bringing this measure before the House.
    12.15 pm
    Mr. Edward Davey: I apologise on behalf of my hon. Friend the Member for Twickenham (Dr. Cable), who has been forced to leave me in charge of the Third Reading speech for the Liberal Democrats. He has given me some speaking notes, and I am delighted to echo his support and that of my party for this welcome measure. I pass on his congratulations to the hon. Member for Harrow, West (Mr. Thomas) on bringing it forward and on steering it through the House so well. I had a visit from his hon. Friend the Member for Harrow, East (Mr. McNulty) and, given the number of other Bills on the Order Paper, I assure the House that I shall keep my remarks brief.
    I also believe that mutuals play a strong and important role for many of our constituents. They play an active role in making our communities that much richer, so it is important to bring the legislation that applies to them up to date.
    Many people in the House and outside believe that this sector can play a much larger role in future. The many social entrepreneurs that are around and many people working in the public service and the private sector want this model adopted by their organisations—either existing or new ones. The Bill is welcome because it brings the law up to date and provides a mechanism for the legislation to be updated more frequently and more easily.
    My hon. Friend the Member for Twickenham believes that the limitation that the Bill puts on carpetbaggers by ensuring that a democratic process applies to industrial and provident societies is an important step forward. I agree with him and with the hon. Member for Edmonton (Mr. Love) that more work needs to be done on entrenching the assets in these organisations. I was pleased to hear from the Paymaster General that the performance and innovation unit is actively considering that issue, and that consultation will take place in due course.
    I am pleased that the fairly new social enterprise unit in the Department of Trade and Industry is contributing to that work, and is examining not only new ways of reforming industrial and provident society legislation, but new artificial identities that could be developed in the framework of industrial and provident society or company law.
    We could go back to that creative stage in the Victorian era when new artificial identities were established to ensure that the economic and social objectives of society could be met by legal entities. We commend the Government on that work, and encourage them to go further.
    I end by again congratulating the hon. Member for Harrow, West on his Bill.
    12.18 pm
    Mr. Dennis Turner: My remarks will be brief as time is limited. Our thanks to my hon. Friend the Member for Harrow, West (Mr. Thomas) have already been put on record, but it would be remiss of us not to mention that his conduct and approach to the Bill since its inception have been admirable. On behalf of Co-operative MPs—I declare an interest as a member of that group—I express our appreciation of the way that my hon. Friend has approached the Bill. He thanked legions of people in his contribution, so it is appropriate for us to thank him for giving his private Member's slot to this extremely important Bill.
    For several years, the co-operative movement wanted to introduce such a measure, but we always found that parliamentary and Government time were taken up with so many pressing issues for our country that there was no opportunity to initiate modernising legislation for our co-operative enterprises and societies. An opportunity has been presented through the good offices of my hon. Friend in giving us this private Member's Bill. The measure is moving towards the statute book and hon. Members have told us of the benefits that it will bring.
    I want to comment briefly on the remarks of the right hon. Member for East Yorkshire (Mr. Knight) and the hon. Member for Bournemouth, West (Mr. Butterfill) about the difficulties for clubs in respect of fees. The comments of the Paymaster General show that there is an anomaly that must be addressed and resolved, but it would have been unfair for that to impact on the Bill. We know that there must be serious discussion of the problem of the FSA and fees, and I am grateful to the Paymaster General for telling us that she is prepared to listen further to our arguments and to resolve the problem.
    The matter must be resolved. The present situation is unjust for co-operative societies, as well as for working men's clubs, Labour clubs, Liberal clubs and Conservative clubs—thousands of clubs throughout the country with thousands and thousands of members. They feel disadvantaged and badly treated by a decision that was not originally theirs. They did not choose to move away from the Registrar of Friendly Societies; it was the result of legislation passed in this place. As a consequence, the societies were harshly treated as regards the fees that they have to pay. The FSA has said that it will do its best to reduce the fees, but the anomaly will remain. I urge colleagues vigorously to pursue the matter with Ministers so that we can find a solution.
    I remind the hon. Member for Christchurch (Mr. Chope) that I described the Second Reading as a happy parliamentary occasion; there was unanimity as to the desirability of the benefits that would flow to many thousands of people. We have also seen that today.
    Before the introduction of the Bill, we shared the views of that wonderful philosopher Omar Khayyam. He said:

    "Ah love! could thou and I with Fate conspire

    To grasp this sorry Scheme of Things entire,

    Would not we shatter it to bits…and then

    Re-mould it nearer to the Heart's Desire!"

    That is what we have done today. We have remoulded the Bill nearer to our heart's desire and that of many thousands of people. We should give thanks for having been able to do that.
    12.23 pm
    Mr. Chope: The final part of the contribution of the hon. Member for Wolverhampton, South-East (Mr. Turner) must have been the result of his drinking from one of those bottles of special real ale with which he was presented by the Campaign for Real Ale—
    Mr. Turner: Not this morning.
    Mr. Chope: The hon. Gentleman referred to the fact that the promoter of the Bill, the hon. Member for Harrow, West (Mr. Thomas), had dealt with it admirably. I would like to add that the hon. Gentleman has done so in an exemplary fashion. Indeed, if other Members who introduce private Member's Bills use his experience and follow his example, they will do extremely well. He realised that in order to get a private Member's Bill on to the statute book, one must be clear about one's objectives; one must be prepared to listen to points of view from both sides of the House; and one must conduct oneself with good humour and keep in touch with people who have expressed an interest in the subject. He has done all those things. From the moment at Second Reading when I first expressed misgivings about clauses 2 and 3, he went out of his way to try to accommodate my concerns.
    I am only sorry that now, at Third Reading, the Bill completely lacks the content of the original clause 2, because although I had reservations about it—as did the Government—the clause could probably have been amended to make it acceptable if work had been done on it earlier. I share the frustration that the hon. Gentleman must feel that although, having managed to secure his place in the ballot, he chose and identified his piece of legislation very early, Treasury officials did not get to grips with the detail of the Bill until the eleventh hour. If more thought had been put into it earlier, we might have been able to progress clause 2. The hon. Gentleman also understood the concerns that were expressed about clause 3; as a result, the latest version is a great improvement on the original.
    I hope that the hon. Member for Wolverhampton, South-East and others will not rue the day that they chose not to support my right hon. Friend the Member for East Yorkshire (Mr. Knight) in his new clause 3, which would have produced a better Bill. Their decision is understandable if—as might be the case—they were threatened that if the Bill was amended in that way it would not receive Government support at Third Reading, but let us hope that Labour Back Benchers' faith in their Government will be fulfilled and that there will be a significant reduction in the fees that clubs and industrial and provident societies are charged. I have my doubts about that, but time will tell whether I and my right hon. Friend the Member for East Yorkshire are right or whether Labour Members were right to put their trust in the Government.
    I congratulate the hon. Member for Harrow, West on the Bill. I and my party support its Third Reading and hope that it passes through the other place without significant—or perhaps any—amendment, because if it is amended, it may encounter difficulties in terms of time in the House and fail to reach the statute book.
    12.27 pm
    Dawn Primarolo: I echo the comments made by the hon. Member for Christchurch (Mr. Chope) congratulating my hon. Friend the Member for Harrow, West (Mr. Thomas) on th,2 excellent and dedicated way in which he has guided the Bill through the House.
    The quality of debate on Second Reading, in Committee and in the Chamber today has been high. That shows that at last, after a very long time—stretching back beyond even the stewardship of the Labour Government—we are on the verge of fulfilling the desire of the industrial and provident societies to reform themselves and update their legislation. The House has recognised the significant part that industrial and provident societies play in the wider mutual sector and how much positive will there is among Members of Parliament to ensure that we maximise the benefits that those societies can offer to their members.
    There are currently just under 10,000 industrial and provident societies in the United Kingdom, with assets totalling over £60 billion They, with other classes of mutuals in the United Kingdom—building societies, friendly societies and credit unions—form a distinct and important part of the economy, and the Government believe that mutuals of all kinds should have an opportunity to develop and play an important role in offering consumers choice and innovative services. The mutual advantage—not having external shareholders to satisfy, so that organisations can concentrate on providing goods and services for their members and for the wider community—makes mutuality a distinct and potentially very useful alternative model for business, as hon. Members have said. We believe that mutuality has a great deal to contribute, now and in the future, offering particular benefits to individual members and to the communities in which they are based. It is because we recognise the value and potential of mutual societies that we have recently been involved in several initiatives to help them maximise the benefits that they can offer to their members.
    I realise that some people are disappointed that changes made during the Bill's passage through the House make it less ambitious than they would have preferred, but it is important that there should be time to consult and to consider its detail. Despite that disappointment, and in addition to recognising the hard work of my hon. Friend the Member for Harrow, West, those who supported and advised him, and the Treasury officials who have stood ready at all times to give the advice that they are required and able to give—private Member's Bills are dealt with in a different way from other Bills—we should not underestimate what the Bill will achieve in its current form.
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    A more robust demutualisation procedure should bring more confidence in, and strength to, the society form. The ability to update industrial and provident society legislation through secondary legislation will ensure that the legal framework for societies need never fall further behind the framework applying to companies. Over time, the Bill's provisions will have a much more profound effect. They will allow industrial and provident legislation to catch up in areas deemed appropriate, thereby helping to create a genuinely level playing field with companies and across the mutual sector.
    During the Bill's passage, we considered several other provisions that are not current features of it. Although, for differing reasons, it has not been possible to accept them, the debates and the analysis undertaken have served a useful purpose. For example, we have been able to explore areas in which the movement might benefit from an updating of its legislation. We have also examined the issues surrounding asset "lock-in" and why it may be advantageous to certain parts of the movement, and what issues need further consideration. We have discussed at length fees, the relationship of all societies to the Financial Services Authority, and particular problems with fee levels that have been identified in certain areas.
    The performance and innovation unit has undertaken its own analysis of the legal framework of the social enterprise sector, and it hopes to report later this year. Whatever its conclusions, I believe that the discussions and the work that we have undertaken during consideration of the Bill have given us a much better idea of how to help the movement grow, and of how we might take forward any recommendations that the performance and innovation unit makes. The Government believe that, where appropriate, it is essential to help industrial and provident societies to operate on a level playing field with companies and other mutuals. The Bill provides an important stepping stone towards achieving that aim.
    Once again, on behalf of the House I congratulate my hon. Friend the Member for Harrow, West on introducing this very useful Bill. I am delighted to hear that his reading matter will now move on from the Industrial and Provident Societies Acts. Perhaps he will read the Red Book and the Budget papers, before finally alighting on something a little lighter. I recommend the Harry Potter novels, for example, which provide amazing relaxation. My congratulations are sincere. In terms of the procedures of the House, the difficulties associated with private Member's Bills are enormous. He has done an excellent job and this is an excellent Bill. The Government certainly want to see it on the statute book.
    Question put and agreed to.
    Bill accordingly read the Third time, and passed.

  National Heritage Bill [Lords]
  As amended in the Standing Committee, considered.
  National Heritage Bill [Lords]
    New Clause 1

      COMPENSATION TO AFFECTED PARTIES
      (1) If, pursuant to this Act an ancient monument is declared which results in any third party suffering financial loss directly as a result of such declaration (including a loss as a result of such third party being unable to exercise fishing rights) then compensation shall be paid to the third party as a result of such declaration.
      (2) The Secretary of State may by regulations make provision relating to the compensation to be paid under subsection (1).'.—[Mr. Greg Knight.]
      Brought up, and read the First time.
      12.35 pm
      Mr. Greg Knight: I beg to move, That the clause be read a Second time.
      Earlier this week, when I tabled new clause 1, I think that I gave my hon. Friend the Member for Vale of York (Miss McIntosh) an attack of hypertension because she was very concerned that my aim might be to talk out the Bill. No such anxiety arose with my dear hon. Friend the Member for Chipping Barnet (Sir Sydney Chapman), who is very laid back about such matters. May I tell both of them that I am not here to wreck today's proceedings?
      I introduce this primarily probing new clause because the Bill is strangely silent on what happens if someone suffers a financial loss as a direct result of the declaration of an ancient monument. If the Historic Buildings and Monuments Commission for England makes a decision as the result of the Bill and that decision results in others being out of pocket or losing out in some way, surely compensation should be considered. If no compensation scheme covers the scope of the Bill, surely one needs to be introduced. That is the aim of new clause 1.
      I am quite happy for the details of such a scheme to be decided by the Government and I do not seek to prescribe in the new clause how it should be set up. I am confident that the Government would ensure that fair provisions were introduced if such a measure were needed, but we need to examine the principle of awarding compensation to those who lose out through no fault of their own, and we need to debate and clarify that issue before proceeding to Third Reading.
      Mr. John Butterfill: I rise briefly to support my right hon. Friend the Member for East Yorkshire (Mr. Knight). Before being elected to the House, I practised as a chartered surveyor and know that the principle of injurious affection has been long established in British legislation. Under that principle, if someone's property is expropriated or diminished in value in some way for community purposes—for example, if a propriety's value is affected by a new road—that member of the public can be compensated for his or her loss.
      It cannot be right that we as a society can take away the value of someone's property for a community purpose without offering fair compensation. I therefore believe
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      that my right hon. Friend has done a great service to the consideration of the Bill by proposing the new clause, without which severe injustice could occur.
      Sir Sydney Chapman: I am grateful to my right hon. Friend the Member for East Yorkshire (Mr. Knight) for introducing the new clause, although I invite the House to resist it if he feels that he cannot withdraw the motion. So far as I can understand his objectives, I think that they are two separate things. Before I consider those, I should say that I think that the new clause is technically outside the scope of the Bill, and I shall briefly try to explain why.
      I shall put aside the fact that ancient monuments are scheduled, not declared—I do not rest on that argument. In fact, I believe that an ancient monument is scheduled under the Ancient Monuments and Archaeological Areas Act 1979. There are no provisions in my Bill—if I may so call it, for ease of reference—relating to such scheduling. My Bill only amends the definition of an ancient monument in the 1979 Act to include a vehicle, vessel, aircraft or the remains thereof.
      In fact, as my hon. Friend the Member for Bournemouth, West (Mr. Butterfill) inferred, there are existing procedures for the payment of compensation in connection with scheduled ancient monuments. However, the compensation is not paid when the monument is scheduled as, at that point, it is claimed there is no loss. Compensation can be paid, however, under section 7 of the 1979 Act when scheduled monument consent is refused by the Secretary of State. A process of redress therefore exists.
      The reference in my right hon. Friend's new clause to fishing rights is, I presume, in connection with the scheduling of ancient monuments on the sea bed—wrecks or prehistoric built structures—and the danger of nets snagging on and being damaged by those monuments or a fishing boat having to move to new sites. If his argument is that an ancient monument is scheduled, and that that bars a fishing boat from fishing on that area, which would automatically result in compensation, that is a very wide issue. It is not an issue for me; perhaps it is one for the Government. I think that a lot of fishing boats would suddenly turn up to claim compensation. I would also say, however, that fishing boats with fishing rights have those rights in different parts of our seas and not necessarily on just one narrow, restricted part.
      There is already considerable consultation before wrecks are designated. If someone drags a trawl net across the sea bed within the restricted area surrounding a designated wreck site—incidentally, such sites are marked on navigation charts—they can be fined for doing so, as it is illegal. I do not want to provoke my right hon. Friend unnecessarily, but a stronger case might be made not for compensation being made to such vessels but for fines being imposed on them if they act without the law.
      The Parliamentary Under-Secretary of State for Culture, Media and Sport (Dr. Kim Howells)rose
      Mr. Deputy Speaker (Sir Alan Haselhurst): Order. It may be for the convenience of the House if the Minister winds up the debate. I call the hon. Member for Vale of York (Miss McIntosh).
      Miss Anne McIntosh: I am most grateful to you, Mr. Deputy Speaker. I simply want to put

      855
      the mind of my right hon. Friend the Member for East Yorkshire (Mr. Knight) at rest that I am very relaxed about his new clause. I congratulate him on his drafting ability in that respect, but, for the reasons that my hon. Friend the Member for Chipping Barnet (Sir Sydney Chapman) so eloquently explained, although I welcome this opportunity to discuss the issues raised, I have great difficulty in envisaging circumstances in which these conditions would arise. I am firmly of the view that the new clause falls without the scope of the Bill, and, regrettably, we shall not therefore support it.
      Dr. Howells: I also congratulate the right hon. Member for East Yorkshire (Mr. Knight) on his ingenuity. After all, if we consider the wording of the new clause, ancient monuments are scheduled under the Ancient Monuments and Archaeological Areas Act 1979, and there are no provisions in the Bill relating to such scheduling.
      I spoke to the right hon. Member for East Yorkshire some time ago, and this is a fascinating subject. I understand that considerable consultation with all relevant parties, including the fishermen, is undertaken before a wreck is designated, to ensure, among other things, that their livelihoods are not put at risk. I also understand that there are more than 40 designated wrecks in British waters. I have sought advice on this matter, and have been informed that there has not been a case of any great controversy involving the effects on fishing of the designation of any of these wrecks. These debates are fascinating, because I have just discovered the name of the relevant body that conducts the consultation. The Advisory Committee on Historic Wreck Sites is made up of experts who advise English Heritage and the Government.
      12.45 pm
      I am glad that the right hon. Gentleman has raised the issue, but the Government will resist the new clause. We believe that adequate safeguards are in place and we support the explanation that was given by the hon. Member for Chipping Barnet (Sir Sydney Chapman).
      Mr. Greg Knight: I welcome the Minister's remarks. I am reassured to hear that consultation takes place with all those who may be affected, including representatives of fishermen. The fishing industry has suffered a lot over the past decade and it could do well without a further attack on it. I am pleased to hear that the industry is properly consulted, so I am reassured by the Minister's remarks.
      I was rather concerned by the attack of my hon. Friend the Member for Chipping Barnet (Sir Sydney Chapman) on the fishing community. He suggested that some fishermen might fish above a wreck if they thought that they would receive compensation. He made that point in a jovial manner, so I take it that he was not seeking to impugn the honour of the fishermen of Bridlington.
      Sir Sydney Chapman: I certainly did not mean to suggest what my right hon Friend has imputed. If I made a slight mistake in my choice of words, he must make allowances for the fact that I come from landlocked Chipping Barnet. We very much appreciate the probity of the fishermen who supply us with a basic need.
      Mr. Knight: In the light of the tone of my hon. Friend's intervention, I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    Clause 1

      NEW FUNCTIONS RELATING TO UNDERWATER ARCHAEOLOGY
      Mr. Andrew Dismore: I beg to move amendment No. 9, in page 1, line 11, after "waters", insert "and continental shelf'.
      Mr. Deputy Speaker: With this it will be convenient to discuss the following amendments: No. 10, in page 1, line 14, after "waters", insert "and continental shelf'.
      No. 11, in clause 2, page 2, line 10, after "waters", insert "and continental shelf'.
      No. 12, in page 2, line 19, after "waters", insert "and continental shelf'.
      No. 13. in clause 3, page 2, line 38, after "waters", insert "and continental shelf'.
      No. 14, in clause 4, page 4, line 2, after "waters", insert "and continental shelf'.
      No. 15, in page 4, line 14, after "waters", insert "and continental shelf'.
      No. 16, in clause 5, page 5, line 7, after "waters", insert "and continental shelf'.
      No. 17, in clause 6, page 5, line 42, after "waters", insert "and continental shelf'.
      Mr. Dismore: I reassure my hon. Friend the Minister that it is not my intention to talk out the Bill, and I have had to pass on that message a few times. I also give that reassurance to my neighbour, the hon. Member for Chipping Barnet (Sir Sydney Chapman). He is an old hand at these matters and understands how the House works on a Friday. Indeed, he is such an old hand that I cannot resist the ungentlemanly comment of saying that he lays claim to being a scheduled monument in his own right.
      Martin Linton: But not a wreck.
      Mr. Dismore: No, not a wreck.
      This group of amendments would apply the Bill to the continental shelf, and several issues need to be raised in this context. For example, oil rigs and gas platforms may not be the most beautiful objects in the seas around our coast, but they are vital to the national economy. When we extended our territorial waters over the continental shelf, we did so for economic reasons and to allow us to exploit the natural mineral resources that lie off our coast—for example, in the North sea.
      People may wonder why I want to preserve oil rigs and gas platforms. They may think that they are not worthy of preservation. However, future generations may see the rigs and platforms as part of our national heritage and culture because of their importance to our economy over the past decade. Those generations might want them to be preserved. However, as the Bill is framed, they would have no protection at all.

      857
      The brief provided by the House of Commons Library offers another reason for extending the provisions of the Bill to cover the continental shelf. My hon. Friend the Minister mentioned the number of designated sites that already exist. In fact, according to the most up-to-date figures, there were 49 at the end of 2000. All of them were within the 12-mile limit, and most were within the three-mile limit. I asked the Library to provide me with an estimate of how many wrecks there might be beyond those limits, and it said:
      "Estimates suggest there could be anything up to a million wreck sites in international waters around the British Isles. Most of these would be wooden vessels, difficult to detect with current technology."
      It occurs to me that although we might not have the technology to examine the wrecks now, there is no doubt that diving technology is advancing rapidly. Before long people will be able to visit the wrecks and perhaps exploit them. We know that that can be done in deep sea by the work carried out by marine archaeologists on the Titanic and the German battleship, the Bismarck, which recently featured on television documentaries. I suspect that it will not be long before some of the wrecks on the continental shelf suffer similar exploitation.
      I cannot understand why there should be a legal objection to my proposal. We recently debated the protection of marine wildlife and are thinking of extending conservation areas beyond territorial waters into the continental shelf area. Lord Whitty said in another place on 4 February this year that the Government are thinking of extending the implementation of the European Community birds and habitats directives beyond the 12 nautical mile limit of the territorial waters to areas over which we claim sovereignty. If we can do that for areas of natural importance, we should also do it for areas of historic importance to ensure that wrecked ships are protected.
      Miss McIntosh: Has the hon. Gentleman estimated the size of the continental shelf around the British isles, especially the coast of England?
      Mr. Dismore: The usual assumption is a limit of 200 miles for economic activity purposes except when we neighbour another country and the continental shelf is shared. I recall that from my days of studying international law at university.
      Some sites that are not covered by the Protection of Military Remains Act 1986 should be categorised as war graves at sea. They include: merchant and passenger vessels that are sunk, whether by enemy action or not; wrecked naval ships as opposed to those sunk or run aground by enemy action; aircraft, although they might be protected by existing legislation; and ships that are more than 200 years old. If we were to extend the legislation, we could provide valuable protection to those sites that are beyond territorial waters.
      I know that the definition of ancient monument in the legislation is to be redefined to cover some of those categories. We could use that mechanism to provide additional protection for war graves that are not covered. Although such sites do not comprise naval ships, many people would think of them as war graves. For example, ships that were torpedoed in the battle of the Atlantic or as part of a world war one convoy are not protected unless
      858
      they are naval vessels. I think that it is important to protect the graves of people who tragically died in those important years that preserved our national life.
      More ancient wrecks may also need protection as the work of divers gets more sophisticated. That includes ships of the Spanish armada and the Napoleonic or French revolutionary wars. It could also include East Indiaman ships. At the moment, those ships are well protected because of the depth at which they lie, but they could soon become vulnerable.
      It might be worth considering whether we can extend the Bill's provisions beyond territorial waters to include ships on the continental shelf. I am not suggesting that we should protect every one of the million wrecks at the bottom of the sea, but we might need the powers of protection in appropriate cases as and when they become detected.
      Mr. Greg Knight: Affording protection will work only if the sites are policed. How would that process be carried out?
      Mr. Dismore: I was going to deal with that when we discuss the next group of amendments. There is a provision in the 1986 Act which has yet to come into force. Protection is afforded at the moment through a voluntary code of practice that the diving communities operate among themselves. To an extent, they form an underwater neighbourhood watch that looks after such sites. My concern is that those wrecks would not be covered even under the existing legislation designed to protect them. I do not suggest for one moment that in the next few days people might go diving on wrecks that are further out, but the reserve powers that the amendment would provide should be available so that an important wreck found, say, 13 miles out could be protected.
      Sir Sydney Chapman: I am grateful for the contribution made by the hon. Member for Hendon (Mr. Dismore), whom I know well and who is a near neighbour. I am aware of his great knowledge of matters archaeological and of the fact that he is a lawyer, so I am hesitant about quarrelling with him about his amendment.
      My understanding of the scope of my Bill is that adding the words "and continental shelf' would extend its application to areas that are outside UK territorial waters. Moreover, the Bill covers only powers in relation to the waters of England; properly, there is separate legislation for Scotland, Wales and Northern Ireland. That may cause problems—I do not know, as I am not a lawyer.
      The provisions on underwater archaeology are intended to enable English Heritage to incur expenditure on the archaeological investigation and preservation of wrecks designated under the Protection of Wrecks Act 1973. Clause 1 covers wrecks
      "in, on or under the seabed within the United Kingdom territorial waters adjacent to England."
      As the jurisdiction of the 1973 Act does not go beyond the boundary of 12 miles, I do not think that it would be permissible to add to my Bill the words proposed by the hon. Member for Hendon.
      Mr. Greg Knight: My hon. Friend raises a serious point. Will he enlighten us about what would happen if the amendment were accepted and the Bill was

      859
      subsequently employed to try to affect areas that are beyond the jurisdiction of our courts? Would that make the whole Bill void or liable to a challenge before the European Court? If the amendment could have either of those consequences, those of us who initially had some sympathy with the hon. Member for Hendon might conclude that he should be prevailed upon to withdraw it.
      Sir Sydney Chapman: I have done a considerable amount of research on the provisions of the Bill, but I am not a lawyer—still less an expert international lawyer—nor would I pretend to be. I could go so far as to say that when I was deciding what profession to take up, I was advised to start at the top of the alphabetical list and work down. I knew that I did not want to be an accountant or an actuary, and I was in danger of not being able to spell the word "archaeology", so I moved on to the next one down, which was architecture. That is why I am an architect.
      In all seriousness, my understanding—I would welcome the Minister's clarification later, if not now—is that it would be necessary to make changes to the 1973 Act, which would require separate legislation. Moreover, the fact that the continental shelf is a pretty large area could give rise to practical problems, as my right hon. Friend the Member for East Yorkshire (Mr. Knight) suggested.
      I suspect that the amendment may not be appropriate in the context of my more modest measure, but I await the Minister's clarification of whether that is so.
      1 pm
      Miss McIntosh: The scope of the Bill, as I understand it, is restricted to allowing English Heritage to become involved in underwater archaeology in territorial waters adjacent to England. I would say, in the friendliest spirit, to the hon. Member for Hendon (Mr. Dismore) that the amendments are unnecessary. There is very little continental shelf within England's territorial waters, and continental shelf beyond that is not part of English Heritage's remit.
      Like the hon. Gentleman, I am an international lawyer, having graduated from the Edinburgh university. The international law lecturer there when I was a student was a rapporteur on the North sea conference. I commend to the hon. Gentleman the latest conference report, of which there are three copies in the Library. In that spirit, I urge him to withdraw this group of amendments.
      Dr. Howells: Extending English Heritage's powers to allow it to operate on the continental shelf outside the 12-mile territorial limit would require careful consideration and could affect interests beyond those of English Heritage—perhaps even international interests. It is a big issue for us to consider at this late stage of the Bill's consideration.
      My hon. Friend the Member for Hendon (Mr. Dismore) made some interesting and far-sighted suggestions. I remind him that, within the limited context of the Bill, the amendments may not be as appropriate as he thinks. It was never our intention to allow English Heritage to operate beyond the 12-mile limit of UK territorial waters adjacent to England. Putting England on a 12-mile limit
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      makes the position the same as in Scotland, Wales and Northern Ireland, so we are removing an anomaly and the hon. Member for Chipping Barnet (Sir Sydney Chapman) should be congratulated on that.
      The situation has been anomalous and, as the hon. Gentleman pointed out, the underwater archaeology provisions are intended to enable English Heritage to incur expenditure on wrecks designated under the Protection of Wrecks Act 1973 in or under the sea bed in UK territorial waters adjacent to England. The jurisdiction of the 1973 Act does not go beyond the 12-mile limit, so we have to resist the amendments.
      Mr. Dismore: The amendments were designed to draw attention to a risk that is not immediate, but may emerge in the future. Economic activity such as oil platforms may pose a threat to wrecks that are not currently accessible, but may be in the future. I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Mr. Dismore: I beg to move amendment No. 19, in page 1, line 19, at end insert—
      '(4) For the avoidance of doubt, nothing in this Act shall permit any activity on or near any wreck prohibited by the Protection of Military Remains Act 1986.'.
      This is a probing amendment designed to ensure that I receive, on behalf of the House, assurances from the hon. Member for Chipping Barnet (Sir Sydney Chapman).
      Clause 6 amends the National Heritage Act 1983 by inserting a new section 33C, providing the commission with powers to meet the cost of, for example, surveying, excavating or other investigations undertaken in respect of a protected wreck, the removal of such a wreck or any part of it, the arrangements for its preservation and so forth.
      I want to ensure that nothing in the Bill would in any way enable people, with the assistance of English Heritage, to do something forbidden by the Protection of Military Remains Act. That Act creates two different types of protection. First, it is possible to designate a site, such as an area containing naval vessels that were sunk or stranded as a result of military action by another country, or vessels of another country's armed forces, provided that they are within UK waters.
      Only those vessels are protected by the legislation and perhaps we should consider whether to extend that protection to aircraft in the same way that the Bill extends the provisions of the National Heritage Act 1983 to aircraft. I have already gone through the other categories that are not included.
      The effect of designation is to prohibit a series of activities on such sites—activities that mirror fairly exactly those that are to be permitted, indeed encouraged, by the amendments the Bill would make to the legislation.
      The alternative form of protection under the Protection of Military Remains Act is for a protected place, whereby a specific vessel that appears to have been sunk or stranded while on military service is designated, whether or not its last resting place is known. Our earlier discussions are relevant to the fact that that protection applies anywhere in the world, not only in our territorial waters, to vessels that sank after the start of the first world war.

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      No sites have yet been designated under the Act as either controlled or protected sites. Currently, they are protected through the voluntary code that was introduced by those who engage in diving for recreational purposes. I want to do nothing that will detract from their activities. I think that they have behaved extremely responsibly in drawing up their seven-point plan to respect wrecks and helping to police the sites. However, I am concerned that technological advances may result in people attempting to interfere with sites that are, in effect, war graves.
      Mr. Greg Knight: The hon. Gentleman is probably aware of the recent media programme that speculated about the cause of death of Glenn Miller, the wartime band leader, in which it was argued that his plane might well have been hit by unused bombs dropped by RAF planes on their return from raids on Germany. At the time of his death, Glenn Miller was serving in the armed forces, but my understanding is that the plane on which he was travelling was a civilian flight. Are the remains of Major Glenn Miller covered by the 1986 Act?
      Mr. Dismore: My understanding is that they are not, first, because if the hon. Gentleman is correct the aircraft was a civilian aircraft and, secondly, because aircraft are not covered by the Act, which covers only vessels. In connection with previous amendments and just now, I made the point that aircraft are not protected. Perhaps we should at some stage—not today—consider extending the legislation in that respect.
      We have, regrettably, had news of the plundering—presumably by treasure hunters and not by divers from the United Kingdom—of the wrecks of HMS Prince of Wales and HMS Repulse, two battleships that were torpedoed off Malaya in 1941. As technology advances, some sites will become increasingly vulnerable to misguided and ghoulish individuals who want to crawl all over the wrecks. I am grateful that the diving fraternity utterly condemns such activities and helps to police them to some extent.
      Although no sites have yet been designated under the 1986 Act, the purpose of my amendment is to ask the hon. Member for Chipping Barnet to make it absolutely clear that nothing in the Bill would detract from the protections afforded by existing legislation to war graves beneath the seas.
      Sir Sydney Chapman: I am sure that, like me, the House is extremely grateful to the hon. Member for Hendon (Mr. Dismore) for raising this important issue. I hope to be able to reassure him beyond any doubt.
      I have concluded that his amendment is not necessary for one specific reason. The Protection of Military Remains Act covers maritime military graves and other military wrecks from conflicts dating from the start of the great war—world war one. Those remain the responsibility of the Ministry of Defence.
      As the hon. Gentleman would expect, I have made inquiry of the Ministry—and as he pointed out, no sites have been designated. That is a fair point, which adds power to what he has said. However, I understand from the Ministry that it is now drawing up a statutory instrument to designate 16 vessels as controlled sites within UK jurisdiction, plus five vessels in international waters that meet the criteria in the consultation
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      document; those will be representative of the others that have been lost. Diving on those vessels will be prohibited without a licence.
      I am satisfied that the Ministry of Defence is moving now, however lax it may appear to have been to date. The material point is that once a vessel has been designated under the Protection of Military Remains Act it will be protected by that legislation and English Heritage will have no remit in respect of it.
      The hon. Gentleman may be interested to know that most of the 16 vessels intended to be designated as controlled sites within UK jurisdiction are not located in UK territorial waters adjacent to England, so they would be outside the scope of the Bill. Six are in Scottish waters, one is off Anglesey and four are in waters off the Falkland Islands. There are also five other vessels under consideration, all of which are in international waters.
      I do not think that amendment No. 19 is necessary to achieve what the hon. Gentleman and the rest of us want to achieve.
      Mr. Dismore: In his discussions with the Ministry of Defence, did the hon. Gentleman get the impression that we are trying to close the gate after the horse has bolted in thinking about protecting the Repulse and the Prince of Wales through designation?
      Sir Sydney Chapman: The hon. Gentleman may be in a better position to do that than I am, as he sits on the Government side of the Chamber. All I can do is to pass the message on to the Ministry of Defence. Perhaps he and I could question the appropriate Minister.
      Dr. Howells: I congratulate my hon. Friend the Member for Hendon (Mr. Dismore) on having tabled some far-sighted amendments. However, it is important that we try to see the matter in a broad perspective. The sites that he has referred to are important, but we believe that his amendments to this Bill are not necessary.
      As the hon. Member for Chipping Barnet (Sir Sydney Chapman) said, once a vessel has been designated under the Protection of Military Remains Act 1986 it will be protected by that legislation and English Heritage will have no remit in respect of it. As the hon. Gentleman also informed us, the amendment is unnecessary, as most of the 16 vessels in UK jurisdiction due to be designated as controlled sites under the 1986 Act are located outside the UK territorial waters adjacent to England, and the 1986 Act applies only to vessels that sank after 4 August 1914.
      I hope that after those reassurances, my hon. Friend will see fit to withdraw what he described as a probing amendment.
      Mr. Dismore: I am grateful for the explanations by my hon. Friend the Minister and by the hon. Member for Chipping Barnet (Sir Sydney Chapman). The purpose of tabling the amendments was to air the issue, and I accept that it would not be appropriate for them to be pressed now—but I hope that the Ministry of

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      Defence will at least take note of the debate and think what amendments should be made to other legislation. I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      1.15 pm

    Clause 4

      NEW TRADING FUNCTIONS OF THE COMMISSION
      Mr. Dismore: I beg to move amendment No. 22, in page 3, line 36, at end insert—
      '(lA) The Commission shall, before exercising its powers under subsections (1)(d) and (e) above, consult and thereafter take account of any representations made by the Government, or any equivalent body to the Commission, of the country concerned.'.
      We are somewhat changing the subject now, and moving from international waters to international monuments. The Bill makes provision for the commission to produce books, films and souvenirs relating to monuments, buildings and so on overseas. I want to ensure that if we stray beyond our territorial waters to other countries, we do so in a way that will not offend anybody.
      When the Bill was discussed in another place, Baroness Anelay said:
      "I assure the House that English Heritage should not and will not operate in competition with existing commercial concerns. It will complement and not conflict with the services already offered by commercial concerns for operations outwith the UK. By developing relations with overseas bodies English Heritage will look to stimulate the market for UK commercial companies. Overseas agencies look to English Heritage for training and advice."—[Official Report, House of Lords, 31 October 2001; Vol. 627, c. 1493.]
      I very much hope that that is the case, but I know from my own trips to countries like Greece, where I frequently visit ancient monuments and museums, that museum replicas are becoming big business; they are produced to a high standard, are often expensive and are an important part of the income of many overseas museum services. If we start to produce such material, we should do so in co-operation with the authorities of those countries and not, as Baroness Anelay said, in competition with them. I therefore seek an assurance that, in light of the co-operation that was discussed in another place, we are not going to compete with overseas museum services.
      We should also have regard for the sensitivities of overseas countries. The Parthenon sculptures, for example, are a matter of great debate between Greece and ourselves. The sculptures are in the British museum, which produces an awful lot of material about them in the bookshop. There are two very different stories about how the Parthenon sculptures came to be in the United Kingdom. I shall not explore them now, although it is tempting. However, I share the Greeks' view, rather than the British Government's. If we produced plastic parthenons for sale in the British museum, the Greek Government might have something to say. They might also have something to say about the context and content of any books or literature produced.
      We must bear in mind the fact that a lot of souvenirs represent things that are culturally sensitive, such as the Parthenon, which is highly symbolic for the people of
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      Greece, If we go down that route, we should recognise the importance of selling high-quality products; we should not stoop to the tourist tat that is seen on the streets of some countries. We should produce items in co-operation with overseas countries so as not to offend them. We must make sure that we work in co-operation with them and are not in competition with them.
      Mr. Greg Knight: The hon. Member for Hendon (Mr. Dismore) is a powerful advocate. He has moved a number of amendments today, and has taken me with him on some of his arguments. However, he has needed all his powers of advocacy for amendment No. 22 because his case is weak. I am against what he is trying to achieve; he has not explained why we should put the commission under that duty.
      The main issue is whether the commission should be able to trade. I have serious misgivings about allowing it to start trading and selling trinkets and would much prefer the Bill not to include such a provision. However, having accepted that that power is in the Bill, the commission must be allowed the discretion to produce items as it sees fit. For example, if it believes that there is a market at certain British sites for tacky replicas of the Empire State building, why should we have to consult the Americans about whether to go ahead with the proposal? The process would be cumbersome and unwieldy, and it would not work. I hope that the hon. Gentleman will withdraw the amendment.
      Sir Sydney Chapman: I am grateful to the hon. Member for Hendon (Mr. Dismore) for introducing the amendment. It gives us a chance to discuss a serious issue. We are discussing it in the context of the Bill being able to allow English Heritage to
      "produce and publish, or sell, books, films or other informative material relating to foreign ancient monuments or foreign historic buildings",
      and to
      "produce or sell souvenirs relating to such monuments or buildings".
      The amendment would require English Heritage to consult. That would impose a huge burden upon it, and an unnecessary one. I tend to agree with my right hon. Friend the Member for East Yorkshire (Mr. Knight). English Heritage has a reputation for not producing tacky materials and souvenirs. First, I think that it has a sense of taste, but I recognise that that is subjective. Secondly, and perhaps more importantly, English Heritage always takes great care to understand and respect cultural sensitivities. I am sure that it would always act with propriety if it were to produce an item relating to a foreign ancient monument or building.
      Mr. Knight: Is there not another consideration? If the amendment were accepted, the process would prove so cumbersome for the commission that it would wipe out any profit that it made from selling items.
      Sir Sydney Chapman: I would not claim to be an expert in commercial processes, but I tend to agree with my right hon. Friend.
      I rest my case, subject to what the Minister says, on the amendment being unnecessary. English Heritage justifies its reputation, given the way it has gone about things. It would consult where it was obviously necessary to do so.

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      It would be unnecessarily cumbersome, to use the word of my right hon. Friend the Member for East Yorkshire, and bureaucratic to require it to consult in every instance. I invite the hon. Member for Hendon to withdraw the amendment.
      Miss McIntosh: I do not wish to disagree with anything that my right hon. and hon. Friends have said.
      I hope that the Minister will assure the House that the Government will not support the amendments. Amendment No. 22 would pose quite an obstacle and raise an unnecessary hurdle. Foreign Governments have to be approached for picture copyright, for example, but there are other circumstances where it would not be appropriate for them to be approached.
      In congratulating my hon. Friend the Member for Chipping Barnet (Sir Sydney Chapman) on taking the Bill through its consideration, we should be mindful that it emanated from another place. It has been on the table, so to speak, since 21 July 2001. The amendment comes late in the day, and we should he mindful of the reassurance of my noble Friend Baroness Anelay of St. Johns, to which the hon. Member for Hendon (Mr. Dismore) referred. It would be entirely inappropriate to use any opportunity today to revisit the issue of who owns the Parthenon sculptures, which are rightfully the property of the British museum.
      Dr. Howells: As the hon. Member for Chipping Barnet (Sir Sydney Chapman) made clear, English Heritage always takes great care to understand and respect the cultural sensitivities that apply to any ancient monument, historic building or artefact. I have every confidence in asserting that it will continue to do so. We shall have something to say if it does not. It will not he in competition with the heritage authorities in any other country. I am confident that English Heritage would automatically extend the care that it already shows to any foreign monument or historic building on which it was working. However, it would be an unacceptable burden to expect English Heritage to consult, for example, with the Egyptian Government before publishing a book in England about the pyramids.
      The amendment is unnecessary and I hope that my hon. Friend the Member for Hendon (Mr. Dismore) will show some faith in English Heritage as a fine organisation that displays a great sense of taste. I am sure that it will continue to do so, not only within the bounds of England and 12-mile territorial waters, but wherever in the world it operates.
      Mr. Dismore: I have two short points to make. First, in response to the hon. Member for Vale of York (Miss McIntosh), this is the first opportunity that I have had to table amendments, as I did not have the good fortune to serve on the Standing Committee, so I cannot be criticised for that.
      Secondly, the right hon. Member for East Yorkshire (Mr. Knight) asked why the amendment was necessary. I answer by referring once more, with trepidation, to the Parthenon. I recently visited the Parthenon and met the director of the site, Professor Pantermalis, with whom I had a long discussion. He gave me a copy of a catalogue from an exhibition at the Berlin museum which the Greeks are mounting jointly with the German museum
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      authorities. The Greeks have lent a large number of sculptures to the German museum. It is a wonderful catalogue, showing hundreds of items that we will never see in this country because of the dispute between our Government and the Greek Government over the Parthenon sculptures.
      Through the amendment, I am trying to avoid offending other Governments so that, wittingly or unwittingly, we do not end up in dispute with them. The cultural world is international, with exhibitions travelling from country to country. Because of that, we run the risk of causing offence. The net result would be that we cut off our nose to spite our face. That is my answer to the right hon. Member for East Yorkshire: the amendment was intended to ensure that we work in co-operation with other countries, rather than in competition with them.
      Tim Loughton: Although I served on the Standing Committee, I had not intended to speak in the debate, as I hoped that the Bill would go through without hindrance. When the hon. Member for Hendon (Mr. Dismore) was fortunate enough to see the Parthenon, was he subjected to the admission charges? I gather that they have just been raised by 50 per cent., making a visit to the Parthenon a rather more expensive exercise than going to see the Elgin marbles in the British museum for free.
      Mr. Dismore: The hon. Gentleman makes an important point. On more than one occasion I have stressed to the Greek Government and all those involved with the Parthenon that when the Parthenon sculptures return to Athens, people must have access to them free, so that they can see them on the same basis as they can see them in their temporary home in the British museum.
      I shall not prolong the proceedings. I see that the House is not with me on the amendment. However, I have made the point about the need to work with foreign Governments, and I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Order for Third Reading read.
      1.28 pm
      Sir Sydney Chapman: I beg to move, That the Bill be now read the Third time.
      It is with pride that I introduce the Third Reading of the Bill, which I know commands support from all parts of the House, as it did in the other place. Of course, it derived from the other place, where it was introduced by the noble Baroness Anelay of St. Johns. If the House is minded to give the Bill a Third Reading, the credit goes principally to her and all the endeavours that she put into this important measure.
      I claim that the Bill has all-party support, simply because it derives from a 1996 White Paper entitled "Protecting our Heritage", which was introduced by a previous Conservative Government. Many of the provisions in the Bill were to be found in the Culture and Recreation Bill which was introduced in the last Session of the last Parliament but did not proceed because the general election was called.
      The Bill transfers responsibility for underwater archaeology from the Department for Culture, Media and Sport to English Heritage. As hon. Members will know, English Heritage presently has responsibility only for archaeology on land sites.

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      As far as I am aware, all the relevant organisations and institutions support that principal provision of the Bill: not only English Heritage, but the Advisory Committee on Historic Wreck Sites, the Joint Nautical Archaeology Policy Committee and even the Royal Society for the Protection of Birds.
      Two other provisions in the Bill give English Heritage the right to produce souvenirs, about which we have just spoken, not only in England but in relation to monuments or buildings in Scotland, Wales and Northern Ireland, and rightly so.
      The Bill also deals with an anomaly whereby English Heritage may offer its services and expertise in England, but not outwith the United Kingdom. There is certainly a demand for English Heritage's expertise, goods and services outside the UK and the Bill gives English Heritage the powers to meet that demand. English Heritage will be able to charge for such services and so generate additional income.
      It is worth pointing out that the Bill gives English Heritage the power to delegate its functions to another person if the finance is available to do the work that is within its remit but it simply does not have available the personnel or the time. That is a purely practical solution to a problem that can arise.
      It would be remiss of me not to take this opportunity to thank all those hon. Members who have been involved with the Bill, not only those in the House of Lords, but those who served on the Committee, which was fruitful. I am particularly grateful to my right hon. Friend the Member for East Yorkshire (Mr. Knight) and the hon. Member for Hendon (Mr. Dismore) for introducing the amendments that have been withdrawn but which brought important matters to the attention of the House.
      I also thank the Minister who showed me great courtesy and consideration as I attempted to pilot the measure through the House. His advice has been totally co-operative and I should like that to be put on the record, as also the great help that I was given on Second Reading by my hon. Friend the Member for Chesham and Amersham (Mrs. Gillan) and, more recently, not only on Report but in Committee, by my hon. Friend the Member for Vale of York (Miss McIntosh). I am most grateful to them and I commend the Bill to the House.
      1.33 pm
      Miss McIntosh: I congratulate my noble friend Baroness Anelay of St. Johns on introducing the Bill as long ago as 18 July 2001, and my hon. Friend the Member for Chipping Barnet (Sir Sydney Chapman), whom I regularly describe as our national treasure, on so successfully bringing the Bill through all its stages in the House.
      We welcome the Bill and the fact that it has all-party support. I welcome the transfer of responsibility for underwater archaeology from the Department for Culture, Media and Sport to English Heritage. That is a particular priority of the Joint Nautical Archaeology Policy Committee, which made it a cornerstone of its 1989 document "Heritage at Sea" and, more recently, in "Still at Sea".
      My right hon. Friend the Member for South—West Surrey (Virginia Bottomley) made similar recommendations in 1996 in the Green Paper "Protecting
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      our Heritage" and the English Heritage report "Power of Place" recommended that English Heritage should assume responsibility for maritime matters.
      The Bill proposes that English Heritage should assume responsibility for ancient monuments in the sea or on the sea bed within UK waters adjacent to England, and we support that. The importance of the large number of wrecks that have been identified throughout the Bill's consideration, particularly today, and prehistoric submerged landscapes are particularly valuable to us as an island nation and a naval and mercantile power.
      The seas around us offer a plethora of significant sites and remains, which form an important part of our national heritage. In Scotland, Wales and Northern Ireland, the lead agency for managing the physical remains of the historic environment already has responsibility for marine archaeology. By contrast, English Heritage is unable to survey underwater sites, fund work on them, give advice relating to them or assist the Secretary of State in the discharge of functions conferred on her by the Protection of Wrecks Act 1973.
      Under the National Heritage Act 1983, English Heritage is not allowed to offer services outside the United Kingdom. I am delighted that the Bill will change that, recognising the fact that there is great demand outside the United Kingdom for the expertise, goods and services of English Heritage. That will enable English Heritage to generate extra income. It should not and will not compete with existing commercial concerns, but we recognise that overseas agencies look to English Heritage for training and advice, and would welcome its assistance. We support that.
      We support the Bill, and congratulate all those associated with it, especially my noble Friend Baroness Anelay of St. Johns and my hon. Friend the Member for Chipping Barnet. I have great pleasure in commending it to the House.
      1.36 pm
      Mr. Dismore: I congratulate the hon. Member for Chipping Barnet (Sir Sydney Chapman) on the Bill. I know that it is a difficult job to pilot a private Member's Bill through the House, having had his support for the Bill that I brought forward last week. Despite my comments and criticisms of his Bill, I think that it is worth while. I was grateful for the opportunity that he has given me to research in the highways and byways of obscure legislation, and perhaps get some ideas for future law reform of my own in the next Session.
      The hon. Gentleman has done a great service to the world of archaeology and the protection of our cultural heritage by bringing the Bill to the House. I believe that today will be the final stage, apart from Royal Assent, and he is to be congratulated on that achievement.
      1.37 pm
      Mr. Edward Davey: Like the hon. Member for Hendon (Mr. Dismore), I rise briefly to put on record Liberal Democrat support for this measure, and to congratulate the hon. Member for Chipping Barnet (Sir Sydney Chapman). He has piloted the Bill through the House with his usual professional skill and eloquence. Many people will welcome this legislation.
      On a personal note, in anticipation of English Heritage's positive response to a grant application for All Saints church in Kingston, I welcome the extension of that organisation's powers.
      Dr. Howells: I add my congratulations to the hon. Member for Chipping Barnet (Sir Sydney Chapman) on the way in which he has navigated this excellent Bill through the House—I am fed up hearing references to "piloting". It was my privilege to serve with him right the way through it, including in Committee. His Bill gives valuable new powers to English Heritage. Its passage through the House shows that there is widespread support for it on both sides. I reiterate the fact that the Government fully support it.
      The Bill will broaden the powers of English Heritage, allowing it to trade in overseas countries and become involved in underwater archaeology in territorial waters adjacent to England. The hon. Member for Vale of York (Miss McIntosh) made the important point that that will further enhance English Heritage's status as a leading body in this sector. It has a well-deserved, worldwide reputation.
      I should also like to repeat a number of reassurances to the House. I can confirm that the overseas trading provisions in the Bill do not give English Heritage powers to undertake these activities in Scotland, Wales or Northern Ireland, as they have their own heritage bodies. The devolved Administrations are content with all the provisions in the Bill. My Department has been in contact with Ministers and officials in the devolved Administrations, who have said that they are content with the Bill. I know that the hon. Member for Chipping Barnet will be pleased to hear that.
      I can also assure the House that the Bill is compatible with the European convention on human rights.
      Once again, I should like to say how pleased I am to offer the Government's support and to commend the Third Reading of the Bill.
      Question put and agreed to.
      Bill read the Third time, and passed, with amendments.

  Private Hire Vehicles (Carriage of Guide Dogs Etc) Bill
  Order for Second Reading read.
  1.40 pm
  Mr. Neil Gerrard: I beg to move, That the Bill be now read a Second time.
  My Bill is straightforward and simple, but it deals with a problem that seriously affects a number of people. It amends the Disability Discrimination Act 1995 to ensure that the owners of working dogs are not refused the use of minicabs by drivers when they want to travel with their dogs.
  I do not think that there is disagreement in the House about the need to deal with discrimination against people who suffer from disabilities. I served on the Standing Committee for the Disability Discrimination Act, which came into force under the last Conservative Government and was piloted through the House by the right hon. Member for Richmond, Yorks (Mr. Hague), the former leader of the Conservative party.
  We all agree about the need for such legislation. Members from four parties are among the sponsors of the Bill. An early-day motion that I tabled on the same subject attracted almost 90 signatures from hon. Members on both sides of the House. There is no great controversy about the need for the measure.
  Last year, section 37 of the Disability Discrimination Act came into force; it implemented a requirement on licensed taxi drivers to carry guide dogs. There was no great problem in bringing that into force; it introduced a welcome change. However, it left a gap: many guide dog owners continue to suffer discrimination. The problem is that section 37 of the Act does not cover private hire vehicles—minicabs.
  Mr. Andrew Dismore: I very much welcome my hon. Friend's measure. In my outer-London constituency—my hon. Friend's constituency is similar—the number of black cabs is somewhat disproportionate to the number of private hire vehicles. People are much more reliant on private hire vehicles. Correspondence from my constituents shows that there is a problem in my constituency and for that reason I offer my hon. Friend my best wishes for his Bill.
  Mr. Gerrard: I thank my hon. Friend. He is right: those of us who represent outer-London constituencies know that although black cabs exist, they are relatively few and far between. Throughout much of the country, licensed private hire vehicles are the main form of such transport.
  The problem was first drawn to my attention by my constituent, Mr. Alan Powell, the chair of the Waltham Forest talking newspaper association. He got in touch with me after he had experienced problems in getting cabs. I then came across several other cases. The Guide Dogs for the Blind Association has drawn the attention of several hon. Members to one example. I shall read briefly from the account of what happened to that individual. She said:
  "I needed to collect my three children from school and started phoning for a car at 3 pm. None of the cabs called would take me because of my guide dog. In the end I called nine companies and

  871
  they all said they didn't have a driver who would take a guide dog. In the end I had to call the school and ask them to look after the children. Eventually I got a bus and got to school one hour late."
  I recently spoke to someone who had been shopping at Tesco. They filled up their trolley and then rang a car firm that they had used several times, but the firm said that it had no drivers who could take them so they had great difficulty getting home. In another recent example, a person travelled from the area in which he lived—where the local authority required minicabs to carry guide dogs—to an area that he did not know. When he arrived at the station, the car that he had booked refused to take his dog. He was stuck at the station in a strange place where he knew nobody, and was unable to get to his destination.
  Guide dog owners rely more than most of us on that form of transport. In a survey conducted last year, one in seven people who owned guide dogs said that private hire vehicles—minicabs—were their most commonly used form of transport. One in five said that they used a taxi or private hire vehicle at least once a week. Two thirds said that that type of transport was easier for them to use than other forms of transport, and it is fairly easy to understand why. It is door-to-door transport, it makes it possible to take a companion if necessary, and of course, those who have an assistance dog rely on it and need to have it with them.
  In the current system, the licensing of private hire vehicles is the responsibility of local authorities—in England and Wales, at least. In Northern Ireland the Department of the Environment is responsible. In London, of course, no one is currently responsible. Private hire vehicles in London are not licensed at all, but they will be, shortly, through the Public Carriage Office, and Transport for London, which has been undertaking a consultation and is inclined to include carriage of guide dogs in the licensing conditions.
  The fact that it is a local authority responsibility creates problems, because what I hope most people would agree should be a universal condition, is not universal but depends on the local authority. To be fair, a great many local authorities have decided to include in their licensing conditions a requirement to carry a guide dog, but some will not, and some are not interested or say that there is no problem in their area because no one has complained. I do not think that that is a terribly accurate reflection of the existence or absence of a problem.
  More than 250 of 374 local authorities have now introduced a requirement for a private hire vehicle to carry a guide dog. Things are moving; two-thirds of local authorities have taken that step. The problem is the remaining one third. The difficulty is that there is a patchwork. When the local authority in whose area a person lives has the licensing requirement but a neighbouring authority does not, that person may travel a short distance and find themselves unable to return by private hire vehicle. Moreover, how is anyone supposed to know when they are travelling whether the local authority in whose area they happen to be has introduced the licensing requirement? Some of the incidents that I mentioned earlier arose from precisely that problem. They had travelled to an area with which they were not familiar and then found that they had a problem and were facing
  872
  very serious difficulties. That problem would be dealt with quite simply by making the requirement mandatory and national.
  All sorts of objections are raised. Some people say that dogs create problems in cars. I suspect that some of those people probably never have much contact with a guide dog to see how they behave. Some local authorities say that they have a lot of Muslim cab drivers in their area, who would not be prepared to travel with dogs. Suggestions are made that Muslims do not like dogs, are afraid of them or have problems with cleanliness. Many of those problems are more perceived than real.
  The matter is relevant to my local authority, which has the biggest Pakistani community in London and where a lot of cab drivers are Muslim. However, after the incidents that I mentioned, which caused the local press to take up the issue, representatives from the mosque made it very clear that religion was not the barrier, and should not be used as a reason for refusing to introduce the licensing condition. During last year's discussions in Blackburn about bringing in the licensing condition, Mohammed Narwan, chairman of the Blackburn and Darwen's Private Hire Drivers Association—he is a Muslim—said:
  "People should be able to travel in private hire vehicles with their…dogs free of charge."
  The Guide Dogs for the Blind Association, which has discussed the issue with major UK Muslim organisations, is satisfied that no real problem exists.
  The issue needs to be approached with some sensitivity. When licensing conditions are introduced, discussions should take place with drivers, so that they are aware of the factors involved. In fact, the problem affects a fairly small number of people. There are only about 5,000 guide dog owners in the country, so the impact on cab drivers would be relatively small, but for those owners this is a major issue that affects their daily lives. To ensure that the Bill works and that we get it right, it is clear that we need to look at certain parts of it in some detail. The system needs to work properly, and we may need to consider not only drivers but operators. When someone telephones, they speak not to the driver but to the operator, so both driver and operator need to be aware that they must follow licensing regulations.
  The Bill enjoys a lot of support from the major associations involved—the Guide Dogs for the Blind Association, the Royal National Institute for the Blind and Hearing Dogs for Deaf People—and I hope that it will find further support.
  Mr. John Hayes: The hon. Gentleman mentions hearing dogs and he is absolutely right to do so. That issue needs to be highlighted, because when we think of guide dogs, we inevitably think of visual impairment. We need also to bring hearing impairment into the network that he describes.
  Mr. Gerrard: The hon. Gentleman is absolutely right, but if he looks at the definition of assistance dogs in section 37 of the Disability Discrimination Act 1995, which applies to taxis, he will find that it covers not only guide dogs for the blind but hearing dogs and other working dogs.
  This simple measure will make a lot of difference to people who rely on dogs for their daily lives, and I hope that the House will support it.
  1.52 pm
  Mr. Julian Brazier: This private Member's Bill, which would oblige drivers of private hire vehicles to carry the guide dogs of disabled people without imposing an extra charge, closes a loophole in previous legislation. The omission of private hire vehicles from the 2001 legislation, which obliged taxis but not minicabs to accept guide dogs, created an anomaly and a confusing and patchy service for visually impaired people—a point made strongly at the time by my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth), whose social conscience is legendary.
  That confusion can only he heightened by the fact that 312 of the 374 local licensing authorities outside London and Northern Ireland that are empowered to impose such an obligation have not done so. It therefore seems clear that national legislation is needed to contend with that inconsistency, so that we can bring the majority up to the standard of the minority.
  For those in the United Kingdom who are blind or visually impaired, the assistance of a guide dog can make a remarkable difference to their independence and mobility—a point made strongly by the Guide Dogs for the Blind Association. I am conscious of the shortage of time, so I shall not recount a heart-rending case, described in the Western Mail, of a blind man in Cardiff who spent half an evening—first on the street, and then on the telephone—trying to find a taxi home. Significantly, it was an Islamic taxi driver who finally came to collect him.
  The Opposition therefore support in principle this private Member's measure to improve independence and mobility for blind and visually impaired people, but several practical hurdles may have to be overcome in Committee. The obligation on drivers would be difficult to police effectively, as it would rely on the willingness of local police to bring criminal charges against minicab drivers who flout their obligations. Moreover, how strictly will the term "private hire vehicle" be defined in the new legislation? How much will the situation in London be affected by Transport for London's recent consultation on minicab regulation?
  As I have said, despite those obstacles to effective implementation, the Conservative party strongly supports this measure to increase the independence and quality of life of disabled people, including those who are deaf as well as those who are blind or visually impaired, as my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes) said. The Opposition support the Bill and seek to give it a Second Reading.
  1.56 pm
  Mr. Edward Davey: When the current anomaly was first mentioned to me by one of my constituents—Mr. Robin Hutchinson, who happens to be the Guide Dogs for the Blind Association's head of communications—I was absolutely staggered that it existed. I was also staggered that cab companies and cab drivers were discriminating in this way; it is shocking and surprising that people should take such action.
  The Bill is particularly welcome because it will remove a form of discrimination that many hon. Members perhaps never thought existed. That is a lesson to us all about how such discrimination can come about and how damaging it can be to people's ability to lead independent lives. I
  874
  know that about the problem not only because of the examples that have been cited already, but because of the problems that my constituents have brought to my attention.
  When we consider regulation, we often ask, "Okay, there may be a problem, but is this the right way to go about it?" The Bill is clearly the right way. Its provisions can be implemented and have been shown to work in local authorities throughout the country, and they will produce no practical problems for the industry. I hope that both sides of the House will support it and that it will make rapid progress.
  1.57 pm
  Mr. Eric Forth: My hon. Friend the Member for Canterbury (Mr. Brazier), who spoke from the Front Bench, was kind enough to make some complimentary remarks about me, which in itself is rare in the Chamber, so I treasure every one.
  There is a tiny track record on such issues. I participated and took an interest in the legislation on minicabs, which I forced into Committee, where it was amended some 50 times because it was so bad. I tabled an amendment—it failed—in an attempt to give disabled people rights of access to minicabs. The Government resisted that amendment at the time, so, to my disappointment, it did not find its way into the legislation.
  Mr. Hayes: I should like my right hon. Friend to clarify what he has said—I cannot believe that I heard him correctly. Is he suggesting that the Government resisted a similar measure to that now proposed, with all-party support, to give disabled people such access and the freedom that results from it?
  Mr. Forth: Well, the proposal was different at the time. I proposed that minicabs should provide access for disabled people. This measure is different, although it is related. I am only too happy to blame the Government when blame is deserved, but we are dealing with a slightly different thing on this occasion.
  The Bill strikes me as being essential, and I congratulate the hon. Member for Walthamstow (Mr. Gerrard) on introducing it. It is a model private Member's Bill—it is brief, succinct, focused and, I hope, uncontroversial. Therefore, I hope that it is something to which the House can give its support. I welcome the opportunity to discuss it briefly, and I am happy to take part in the debate.
  All I want to do is flag up a point that has already been made a couple of times: the Bill will need to be considered in some detail in Committee. Although we all want a measure of this kind, and therefore give it our broad support, I hope that the Standing Committee will take a little time to consider it in detail and satisfy itself that the duties that are being imposed are reasonable and achievable. For example, the reference to the licensing authority giving exemptions, if appropriate, on medical grounds, gives me slight pause for thought. If the medical grounds are relevant for, I presume, the driver of the vehicle, may they not also, in some circumstances, be relevant to those who might use the vehicle subsequently or to other persons in the vehicle? I mention that as one possibility that we would have to consider. I do not want to dwell on it, and I am happy to give my broad support

  875
  to the Bill at this stage. I hope, however, as has been indicated, that it will be given proper and detailed consideration in Standing Committee.
  2 pm
  The Parliamentary Under-Secretary of State for Transport, Local Government and the Regions (Ms Sally Keeble): First, I commend my hon. Friend the Member for Walthamstow (Mr. Gerrard) for introducing this Bill, which seeks to end a profound injustice experienced by many disabled people who want to use minicabs. I was aware, of course of his commitment to disability rights, and he was a member of the Committee that considered the Disability Discrimination Act 1995. He also has the rare distinction of already having got a private Member's Bill on to the statute book; this will be his second.
  The Government are committed to establishing comprehensive and enforceable rights for disabled people. Access to transport services is a key element in delivering on that commitment, and there is no doubt that, for many disabled people, private hire vehicles—or minicabs as they are more usually known—are a vital part of the transport mix. It is therefore deplorable that disabled people should be denied access to those services because of a reluctance on the part of drivers to accept guide dogs or other dogs trained to assist them—hearing dogs and other types of dog—particularly when those dogs are essential to their independent mobility.
  Hon. Members have already set out much of the legislative background to this Bill and to the problems that we have encountered. As there are still many matters that hon. Members want to discuss, I shall not go back over those issues, and I shall come directly to the Bill.
  The Government support the Bill because we fully agree with its basic aim: people with guide dogs and other assistance dogs should not be barred from using minicabs because of their animals. This is an issue on which my Department receives a significant number of representations both from groups and individuals.
  It may be of interest to the House if I read out a few extracts from some of the correspondence, which gives an idea of the kind of discrimination that disabled people experience, and, also, of how they feel about it. One person wrote:
  "Four times now I have been refused getting into private hire cars with my guide dog Brandy. It makes me so mad and angry being treated like a freak because of my use of a guide dog. My dog has given me a lot of independence and freedom to go out and about, without the help of family and friends to rely on."
  People are not just refused access to minicabs; in some instances, they have been charged for the use of a minicab for their dog as well as for themselves. We received a letter from a group that represents disabled people in Leicestershire:
  "Recently we have received complaints of the growing charges made to carry guide and other service dogs. Some want to charge ten pence while this week we had a complaint that a firm charged a
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  guide dog owner £2 to carry her dog, to see her husband in hospital who had just had a heart attack. This is more than they charge to carry extra people and luggage, this problem is growing now and they know they are not covered by the DDA."
  Another blind person who was asked for £2 to carry a guide dog realistically pointed out:
  "Other people are not charged a penalty for carrying shopping or luggage, nor are mums with buggies, so why discriminate against a blind person with a guide dog?"
  The Government support the Bill. As everyone on both sides of the House has said, its principles are absolutely right. However, there are difficulties with it as it stands. I shall outline them so that hon. Members understand what they are, but I do not think that they will present an insurmountable obstacle.
  The Bill is based on the existing provisions in the Disability Discrimination Act 1995 and it assumes that the licensing regimes for the two transport services are one and the same. That is not the case. The licensing regimes for taxis and private hire vehicles are substantially different.
  In the case of taxis, the driver himself accepts a hiring. Section 37 of the 1995 Act recognises the fact that a licensed taxi driver plying for hire is compelled to accept a hiring normally within the area of the licensing authority. Therefore, if a blind person accompanied by a dog wanted to go beyond the local licensing area, the driver could refuse. The legislation simply means that the presence of a guide dog is not reasonable grounds for refusing a compellable hiring.
  The problem with using the same approach for minicabs is that the method of hiring in the private hire vehicle legislation is completely different. Minicab operators, not the drivers, decide whether to accept any given hire on a commercial basis. For example, they might decide to refuse all airport jobs on a particular day, because they have made the commercial decision to deploy all available minicabs on short journeys on that day. An operator with a fleet of up-market limousines might decide not to do high street shopping jobs. The operator would not offend against private hire vehicle legislation in making such a decision.
  Unfortunately, the wording of the new proposed section 37A(1) under the Bill suggests that the driver's duty to carry dogs applies only once the vehicle has been hired. As an operator is under no obligation to accept a hiring, it might never come to the attention of a driver, in which case the Bill will not achieve its aim.
  The Bill therefore requires amendment if it is to achieve its aim. It will have to consider the role of the operator as well as that of the driver. We will be happy to work with my hon. Friend the Member for Walthamstow to ensure that such issues are covered in the Bill. With those provisos—which I believe my hon. Friend is happy to accept—the Government are happy to support the Bill. We look forward to seeing it on the statute book and to it giving fuller rights to disabled people.
  Question put and agreed to.
  Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 63 (Committal of Bills).

  Housing Benefit (Withholding of Payment) Bill
  Order for Second Reading read.
  2.7 pm
  Mr. Frank Field: I beg to move, That the Bill be now read a Second time.
  I believe that almost any Member of the House would wish to introduce or support such a Bill. In the 22 years that I have had the honour to represent Birkenhead, the nature of my postbag and of the people who come to my surgery has changed out of all recognition. Twenty-two years ago, the overwhelming majority of people came to see me with complaints about social security, the housing department, unfairness in the allocation of homes, industrial disputes or about similar issues. Now, by far and away my constituents' outstanding grievance is about the behaviour of a very small minority of people in the town who make their lives a misery.
  I do not claim that my Bill would be a panacea or that merely passing this measure would deal with all the problems of antisocial behaviour in constituencies around the country. Nor do I pretend that the Bill need not be modified in Committee. Indeed, I seek the House's permission to move the Bill to that stage. However, giving the Bill a Second Reading would send a clear message to our constituents that, slowly and surely, the balance of power in our society is moving away from protecting those who cause the most disorder, discomfort and unpleasantness and towards using the law to support those who are the backbone of our country—the decent citizens.
  The Bill has two major clauses. Housing benefit would be denied to a household if a court has found its members guilty of antisocial behaviour twice in the past three years. Similarly, it addresses the issue as it relates to landlords. I am pleased to say that most landlords are decent people. There is, however, a minority who buy up houses merely to rake in housing benefit. They are not concerned about who their tenants are or how they behave.
  Mr. Andrew Dismore: My right hon. Friend does the House and my constituents a service by introducing the Bill. However, I should like one thing clarified. The Bill refers to antisocial behaviour. Is that antisocial behaviour in general terms within the definition as set out in clause 1(2), or is it linked specifically to an antisocial behaviour order made under the Crime and Disorder Act 1998?
  Mr. Field: I would not dream of linking it to the latter. We tried to get antisocial behaviour orders granted in Birkenhead from the very minute that that power came into effect and we are still waiting for the first one to be implemented. The definition is set out in clause 1(2). I hope that with those brief comments we have a short and productive debate on the Bill.
  2.11 pm
  Mr. Eric Forth: It will have to be a short debate; let us hope that it will also be productive. The main point of having a debate in the House is to give hon. Members the opportunity to raise different views. We may just about have time to do that and I shall keep my remarks as brief as I reasonably can for that reason.
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  It is interesting that the right hon. Member for Birkenhead (Mr. Field), who has many years of experience in the House, highlighted antisocial behaviour as one of the things that now dominates his postbag. Without wishing to be insulting, that might be expected given some of the problems in his constituency. However, it might surprise the House to know that that problem occurs all too often in the leafy suburbs of Bromley and Chislehurst. My postbag and telephone conversations with constituents reflect the same concerns. So on that sample of two hon. Members, we can probably assume that the problem is nationwide. For that reason, the right hon. Gentleman should be congratulated on introducing the Bill. Given his experience in, expertise of and commitment to such matters, we can reasonably defer to his judgment on the subject.
  In general, I welcome the Bill. Although it would take only a small step in the right direction, as the right hon. Gentleman conceded, it would at least provide another weapon in the armoury that we need to deal with such difficulties now. Funnily enough, my reservations are that it does not go far enough or is not tough enough. I wonder whether a three-year period is the right time span. I hope that the House gives the Bill its Second Reading so that we can discuss that in Committee. We all have examples of grotesque behaviour that has taken place over a relatively short time. It may not be right to expect someone to put up with antisocial behaviour for three years.
  To hang the measure on the peg of convictions made in a magistrates court may create difficulties. As the hon. Member for Hendon (Mr. Dismore) implied, the antisocial behaviour orders have not been as successful as we had all hoped. Perhaps we should consider alternatives to the requirement that convictions trigger the mechanism. I am sure the right hon. Gentleman can think of times when behaviour has caused extreme distress but has not been subject to a conviction in a magistrates court or taken place over a three years.
  I acknowledge that the matter is delicate. Problems between neighbours are notoriously difficult to address. I am sure all hon. Members have experienced the problems that arise from such circumstances, but there must be a way to deal with them. When it is patently obvious that a tiny minority in a community is causing a disproportionate amount of distress to decent citizens, it is frustrating that we, as Members of Parliament, all too rarely offer them relief or succour.
  Mr. Greg Knight: Given that the right hon. Member for Birkenhead (Mr. Field) implied that he may be prepared to consider widening the Bill should it progress further, does my right hon. Friend agree that it is too restrictive because it relates only to court orders before magistrates courts, yet many unruly and bad tenants are taken to the county court? When defining what should trigger the mechanism in the Bill, we should also consider court orders made by the civil courts.
  Mr. Forth: I am grateful to my right hon. Friend for making that useful point. The promoter of the Bill is nodding, so I suspect that he would be prepared positively to consider the matter in Committee. The point of my few

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  remarks is to try to strengthen the Bill and to make it more effective. That was also the thrust of my right hon. Friend's comments.
  Mr. Dismore: On the same theme, I hope that the promoter of the Bill will also consider conviction on indictment in the Crown court, because it would be nonsense if people with lesser offences were subject to the Bill, but those with more serious offences were not.
  Mr. Forth: Indeed. We are receiving some high-quality free legal advice today, which is always appreciated. Moreover, it is balanced advice from both sides of the House.
  The right hon. Member for Birkenhead will have gathered that there will be widespread support for his Bill. Equally, he will accept that it covers such an important subject that it will have to be considered properly, if perhaps expeditiously, in Committee.
  I wish the Bill well. Despite the brief time available, I hope that the House will give the Bill its Second Reading, and that it can then be strengthened and sharpened in Standing Committee.
  2.16 pm
  Mr. Edward Davey: Like the right hon. Members for Birkenhead (Mr. Field) and for Bromley and Chislehurst (Mr. Forth), I can attest from my constituency casework that this is a growing and serious problem, and our law-abiding constituents are looking to this place to take action.
  We therefore have to decide what action we should take. The right hon. Member for Birkenhead suggests benefit sanctions, especially housing benefit sanctions, and he may have a point, but we need to debate some of the wider social issues behind the problem to ensure that we are taking the right action. As the right hon. Gentleman said, there have been problems in using the law introduced by the Government. Antisocial behaviour orders—at least in their earliest years—are not proving to be up to the job, so perhaps that legislation should be refined as well.
  Some of my Liberal Democrat colleagues in local government in Islington and Kingston are considering so-called antisocial behaviour contracts, which do not require law. They are a grass-roots, locally based solution by which the council takes action, working in partnership with tenants and others to try to explain to people that their behaviour is causing problems for their neighbours. What strikes me in some of my dealings is the fact that people who are behaving in what we would consider to be atrocious ways do not appear to realise the damage that they are doing to other people or that their behaviour is wrong and immoral.
  Mr. Greg Knight: Can the hon. Gentleman explain how those contracts will not need law? As I understand it, if a contract is broken one needs to go to law to get a remedy.
  Mr. Davey: The contracts are between a local authority or housing association and a tenant. I am told that they are legally binding; the legal departments of local
  880
  authorities in Kingston and elsewhere are using them. I have not seen all the legal advice, but I assure the right hon. Gentleman that they are in use.
  The right hon. Member for Birkenhead has made a welcome proposal that takes its place in a wider debate. I look forward to assisting, if I may, on the Committee that will give it proper scrutiny. However, I say to him and to other potential members of the Standing Committee that, in passing the Bill, we want to ensure that tenants' freedoms are not unnecessarily and wrongly overridden.
  Some of the difficulties caused by antisocial tenants in my constituency stem from their mental health or addiction problems, which may require a solution through the health service or the police and the legal system rather than the imposition of benefit sanctions. We want to make sure that the Bill is targeted at exactly the right problem, and I submit to the House that it will require full, and not necessarily expeditious, scrutiny to ensure that it tackles the offence.
  2.20 pm
  Mr. Greg Knight: Sometimes there are pleasant surprises in politics. When I came into the House at 9 o'clock this morning, I looked at the Order Paper and was disappointed to see that the Bill promoted by the right hon. Member for Birkenhead (Mr. Field) was listed as No. 4. I concluded that we would not reach it and would therefore be unable to debate it and express our support for this excellent measure. As luck would have it, we have reached the right hon. Gentleman's Bill, and I congratulate him on his speech proposing it to the House.
  I found that I agreed with everything that the right hon. Gentleman said. It was not the first time, and I am sure that it will not be the last, that he spoke sound common sense. I am sure, from what he said, that antisocial behaviour is a growing problem in Birkenhead, but it is also a growing problem in towns such as Bridlington because many unemployed troublemakers go to seaside resorts during the summer months to enjoy the sea and the sand. I know that this measure will be warmly welcomed by many good landlords in my constituency whose lives, and those of their tenants, have been made a misery by one or two bad tenants. The right hon. Gentleman is right to say bad tenants are in a minority—it is the bad few who make life a misery for the many.
  I welcome the right hon. Gentleman's indication that he is prepared to be flexible, which was confirmed by the nod of his head in response to the remarks of my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth). As well as his Bill is drafted, it could be broadened to include orders made by the civil courts, to which I referred in an intervention, and convictions on indictment. It would be bizarre if a tenant who had been convicted of murder could not be dealt with under the Bill, but a tenant who had committed a minor offence that was dealt with before the magistrates could. I am therefore pleased that the right hon. Gentleman is prepared to keep an open mind about suggestions that Opposition Members may make to improve and strengthen the Bill. With those words, I wish the Bill well in its progress.
  2.22 pm
  The Parliamentary Under-Secretary of State for Work and Pensions (Malcolm Wicks): My right hon. Friend the Member for Birkenhead (Mr. Field) is to be

  881
  commended for introducing this Bill, which seeks to withhold the housing benefit of those whose antisocial behaviour can have a devastating effect on the local community.
  In this brief debate, my right hon. Friend and other hon. Members have mentioned their constituency experience. I shall briefly wear my constituency hat and say that, sadly, what they have said rings all too true of my constituency of Croydon. North, which is not far from Bromley. As I came here this morning, I reminded myself of the experiences faced by some of my law-abiding constituents. Those include intolerably loud music, sometimes with neighbours deliberately placing speakers so as to harm the well-being of my constituents, rubbish thrown in gardens, continual shouting, threats of violence and actual violence against neighbours, cars that have been deliberately scratched, graffiti and unruly children. The children of honest citizens are often afraid to go in the gardens because things are constantly thrown over the fence. When tabloids talk about neighbours from hell, for once they speak some truth.
  The Government see no reason why the activities of unscrupulous landlords and antisocial tenants should undermine the work of local authorities that are trying to stabilise and regenerate neighbourhoods in decline and to tackle crime. The Government have just published a consultation paper, "Tackling Anti-Social Tenants" in the social sector of housing. We have also proposed new discretionary powers for local authorities to license all private landlords in all or part of their area. Those powers will be available alongside licensing of houses in multiple occupation. Another consultation paper, on the selective licensing of landlords, focusing on areas of low housing demand, was issued last October.
  In the few minutes remaining, I shall emphasise the issues that I believe are important. The Government remain sympathetic to the Bill's objectives, but it deals with a complex subject and, as has already been acknowledged, careful drafting is required. The Government are concerned that, as the Bill stands, considerations relating to the European convention on human rights remain to be addressed, necessitating substantial amendment in Committee.
  Consideration has to be given to dependants, especially children. We should not seek deliberately to make children homeless—and therefore, in extremis, taken into care—just to punish their parents. We must ensure that all dependants are fully protected.
  The Bill accords with ideas that we have been considering in relation to the licensing of landlords and houses in multiple occupations, but, although it is not right to pay housing benefit to landlords who operate illegally, nor would it be right to expect landlords to house people rent-free. How we deal with antisocial tenants depends on the responsible management of the properties in which they reside. Under our proposals, if a landlord ceases to be licensed, a local authority may seek alternative management, with any housing benefit being paid to the new managing agent instead. Fundamentally, we look to landlords to take a measure of responsibility for their tenants and to take action against those who act antisocially. Many landlords already do so, and they deserve the support of their local authority.
  There is much to be considered in the wording of the Bill, which will require amendment if it is to achieve its aims. Above all, human rights issues must be addressed.
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  We will be happy to work with my right hon. Friend the Member for Birkenhead to ensure that his Bill adequately caters for such issues.
  All hon. Members are concerned to ensure that rights in society and the welfare state are matched by proper responsibilities and duties. It is important to safeguard the right to decent housing: many of our poorer constituents depend on the provision of council and social sector housing. The housing benefit system means that people have the right in practice to be able to afford their rents. We must protect and cherish those rights.
  Rights demand responsibilities. The responsibility demanded in the context of the Bill is to be a good neighbour. Many of us, and most of our constituents, take for granted the good fortune of living with good neighbours, but when responsibilities are ignored, decent citizens should be able to seek the state's protection. All of us feel strongly that in the past we have not struck the right balance between people's rights and people's responsibilities.
  I know from my constituents that too many of our decent citizens are plagued by neighbours from hell. They feel that in the past the state and the courts have not had the powers needed to deal with unruly neighbours. Now, we are taking measures to get the right balance between rights and duties. I hope that the Bill can be amended in Committee to contain the proper safeguards, so that it can become law. I wish it well.
  Question put and agreed to.
  Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 63 (Committal of Bills).

  COMPANIES ACT 1989 (AMENDMENT) BILL
  Mr. Deputy Speaker (Sir Alan Haselhurst): Not moved.

  TELECOMMUNICATIONS TRANSMITTERS (RESTRICTIONS ON PLANNING APPLICATIONS) BILL
  Order for Second Reading read.
  2.29 pm
  Mr. Frank Field: I beg to move, That the Bill be now read a Second time.
  Although I shall not have much time, I should say that I introduced the Bill because another issue has arisen
  It being half-past Two o'clock, the debate stood adjourned.
  Debate to be resumed on Friday 21 June.

  Remaining Private Member's Bill

    CHRISTMAS DAY TRADING BILL [LORDS]
    Order for Second Reading read.
    Hon. Members: Object.
    To be read a Second time on Friday 10 May.

    Policing (Bedfordshire)
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. Woolas.]
    2.30 pm
    Andrew Selous: I am grateful for the opportunity to hold my third Adjournment debate since being elected to the House nine and a half months ago. Both my previous Adjournment debates were on subjects of vital interest to my constituents in South-West Bedfordshire, and this debate on policing is no exception.
    Earlier this year, Bedfordshire police responded magnificently to the fire at Yarl's Wood detention centre, and I pay tribute to Bedfordshire's chief constable and all the officers who came to Yarl's Wood's assistance. I also put on record my thanks to Chief Superintendent Ivor Twydell, Inspector Tony Kimble, Inspector Steve Barrett and Inspector Melvin Hartley, with whom I frequently correspond on behalf of my constituents and with whom I have had many meetings.
    I have asked the Home Secretary on the Floor of the House to ensure that he does all in his power to resist attempts by various insurers to reclaim from Bedfordshire police and local authorities the costs of repairs to the detention centre. That is a source of enormous concern to my constituents, and I seek reassurance from the Minister on the subject today.
    In my opinion, the costs of repair to national facilities such as Yarl's Wood should be borne by the country as a whole, not by the communities in which they happen to be situated. The extra policing requirements in the aftermath of such incidents should also be borne by the country as a whole. At present, Bedfordshire supplies 39 police officers and 13 civilian staff in the follow-up operations. Bedfordshire is a small force, and that is a considerable drain on our reserves of police officers.
    In the past 15 months, Bedfordshire has also been dealing with the work associated with 12 murders and four manslaughters; I understand that they are tying up 94 police officers and 14 civilian staff. Together with Warwickshire, Bedfordshire has had the largest rise in unlawful killings in the past 15 months, which is a considerable strain on Bedfordshire police resources.
    The most serious issue affecting Bedfordshire police is retention. Recruitment has improved recently, and I applaud the police authority's decision to budget for an extra 56 police officers in the year to March 2003. I understand that the constabulary needs to recruit 192 officers to reach that target, but that it believes that it will be doing well if it manages to recruit 140 to 150.
    It has been brought to my attention that the current batch due to start the training course for Bedfordshire police officers should consist of 14 officers, but the course cannot go ahead at present because there are only 12 potential recruits. That is a source of concern.
    In the year to 31 March 2000, five officers transferred out of Bedfordshire police; in the year ending 31 March 2001, 21 officers transferred out; in the year to the end of March this year, 45 officers wanted to go. Today there are 22 officers awaiting transfer out, and we are only three weeks into the current financial year.
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    Those trained officers are all experienced and have an average of 10 years' service. The result of their transferring out is that roughly 20 per cent. of Bedfordshire police officers are probationers. There are 200 probationer officers in Bedfordshire constabulary, 63 in Bedford, 75 in Luton and 62 in Dunstable D division, which includes Leighton Buzzard. Probationers are available for duty for 77 working days in a year or only 56 working days if they are on a driving course, which means that they can provide only a third of the manpower of a police officer who has completed his training. The Bedfordshire force is short of a further 136 officers because of the 200 probationary officers in its profile.
    Many officers want to transfer out of the Bedfordshire constabulary principally because of the extremely generous allowances offered by the Metropolitan police and the City of London police. For example, a probationer with 18 weeks' service would be £7,220 better off in the Met or City of London police; a police constable with 10 years' experience would be over £5.000 better off; and an inspector with two years' experience would be £6,300 better off in the Metropolitan police. The difference in income is the result of a combination of London weighting, London allowance, central allowance housing and transitional rent allowances. In addition, there is free travel within 70 miles of Charing Cross and, for Bedfordshire officers, a guarantee, more or less, of a posting to a north London station. The problem is not unique to Bedfordshire; the chief constables of the Essex, Hertfordshire, Thames valley, Surrey and Kent forces face the same difficulty.
    Much as I sympathise with the recruitment demands of the Metropolitan police, I urge the Under-Secretary of State for the Home Department, the hon. Member for Wallasey (Angela Eagle), to bring about the end of the continual poaching of Bedfordshire officers by other forces. The Met can offer unfair additional allowances to police constables from neighbouring forces, including housing allowances for officers living in Bedfordshire. It is anomalous for Bedfordshire officers living in the county to be offered the London housing allowance plus free travel. I do not seek retrospective changes, but I urge the Minister to consider the issue very seriously indeed. The allowances for Metropolitan police officers and those for neighbouring forces must be evened out.
    I turn to the issue of travellers which, I know, is of concern to many hon. Members. Bedfordshire, like many counties, suffers from the behaviour of elements of the traveller community. Of course, some travellers are thoroughly law abiding and respect the communities through which they pass. However, south Bedfordshire is on established traveller routes, which makes the problem all the more urgent for my constituents. My hon. Friend the Member for Reigate (Mr. Blunt) has introduced a ten-minute Bill, the Trespassers on Land (Liability for Damage and Eviction) Bill, which I very much hope the Government will support. It addresses the issue of evicting travellers on highways, which was omitted from earlier legislation, and would assist with evictions from a traveller encampment at Stanbridgeford in my constituency.
    There is area in which the law is deficient, to which I ask the Minister to pay attention. In my constituency, land currently classed as agricultural has been bought by travellers and has been turned into a virtually permanent encampment, with hard standings, tarmac roads, kerbed

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    pavements and sometimes street lighting, which is of huge concern to the surrounding settled communities, especially the village of Billington. I understand that Ministers in the Department for Transport, Local Government and the Regions are starting to look at that important and urgent problem. I hope that the Minister will understand my raising this issue, although it relates to the DTLR, in this debate. I have done so in the interests of joined-up government and in doing something about the problem to which I have referred.
    All Governments have spent more on police forces over the years. Much of that expenditure has gone into technology, equipment and call centres, for example. However, the public want officers on the beat, and especially the same officers on the same beats so that they can get to know the communities that they serve. They can then get to know the law-abiding people in their communities and come to know extremely well those people who are causing trouble. It is a subject on which my hon. Friend the shadovs, Home Secretary has spoken. I hope that we can see progress towards the situation that I have described.
    The manning of police stations is extremely important for members of the public. It is important also that they are fully functioning. Houghton Regis police station, which is in my constituency, is now open for only limited hours. Dunstable police station, the headquarters of D division, has recently decided to close its doors between 11 pm and 7 am. Leighton Buzzard police station is also a shadow of its former self.
    I shall read from the lead letter that appeared on 22 January in the Leighton Buzzard Observer. It states:
    "Back in 1988"—
    the police station—
    "had a chief inspector in charge, two inspectors—one for patrol and one for CID, an admin office with two clerks and a supervisor…an enquiry office staff of five and an office manager, five local beat officers with their own sergeant, (two of them for the town centre alone), four shifts with seven police constables and a sergeant each, four detective constables with a detective sergeant, two traffic wardens, one transport/handyman and two cleaners. And the phone was answered within seconds. The 'current' police office has one inspector, two enquiry office staff, (one part-time), two qualified sergeants, two unqualified acting constables, four shifts of just five officers each, (half trainees), a cleaner and a civilian transport officer. Having to go via the call handling centre, now a phone call can take more than 25 minutes to be answered."
    Our constituents are entitled to ask why things have gone backwards to such a degree since 1988, despite more money being spent by all Governments since that time.
    It is a sad reflection that that is the case. Are we best serving the communities that we are charged to protect when police stations offer so much less of a service to the public than they did a few years ago?
    I shall refer briefly to the work of the Family Matters Institute, which is situated in Bedfordshire, at Mogerhanger. The institute has worked tirelessly over the years to strengthen family life and to run parenting courses. Indeed, it has worked in association with Bedfordshire county council and with significant elements of the Islamic community. It is of great concern to me that the Home Office has recently refused to pay grants for the institute's work, and has called into question the excellent work that it has done over the years. I place on record my concerns as a Bedfordshire Member. I ask whether the Minister could take back my concern to her Department, and ask that the matter be reconsidered.
    2.44 pm
    The Parliamentary Under-Secretary of State for the Home Department (Angela Eagle): As I am the Minister with responsibility for active communities, I undertake to check what is going on with the organisation that was mentioned by the hon. Member for South—West Bedfordshire (Andrew Selous) and write to him.
    I congratulate the hon. Gentleman on securing the debate on policing in Bedfordshire. It is a useful opportunity to air current concerns about the police in Bedfordshire, including the pressing issue of the outstanding insurance claim made against the police authority following the disturbance at Yarl's Wood. I echo the hon. Gentleman's tribute to the men and women of Bedfordshire police service and to the fire authority. I commend their courage and dedication during the night of the disturbance. They all did a magnificent job under very difficult circumstances.
    My right hon. Friend the Home Secretary made clear the Government's position on the insurance claim on 25 February in his statement about the fire at Yarl's Wood and the insurer's claim against Bedfordshire police. I know that the hon. Member for South-West Bedfordshire was present in the Chamber at the time and asked a question. We will take whatever advice is necessary and work with the police, who are operationally independent, to protect their interests and those of the people whom they serve in Bedfordshire.
    The disturbance is the subject of separate investigations by Bedfordshire police, Bedfordshire fire and rescue service and Group 4 Amey Immigration Ltd., as well as the subject of an overarching inquiry conducted by Stephen Moore. I would not wish to pre-empt those findings. As I am sure the hon. Gentleman knows, the Home Office is not directly involved in the claim made by the insurers of Group 4 Amey Immigration Ltd., as it is a matter for the Bedfordshire police authority. However, we are being kept informed of developments. For legal reasons, I cannot comment further, but I can assure the hon. Gentleman that we are vigorously pursuing the contractor's obligations to us under the contract to run Yarl's Wood, and I hope that he will be reassured by that.
    I turn to more general issues, including police officer numbers and particularly recruitment and retention. Police numbers are an important part of a comprehensive package of measures to ensure a modern and efficient police service that can fight crime in the most effective way. The hon. Gentleman knows that the Government are well on course to achieve their target of 130,000 police officers in post—the highest number ever. It is equally important, though, that police officer time is used efficiently. There are measures in the Police Reform Bill to assist in the most effective use of officers' time and professional expertise.
    As the hon. Gentleman knows, it is for police authority and the chief constable to determine the precise make-up of the force and its distribution across the force area. That is part of my answer to the hon. Gentleman's comments on Leighton Buzzard police station. Those are operational matters for the chief constable, not for Ministers. Those on the Conservative Front Bench in the Lords removed clause 5 from the Police Reform Bill, which would have helped a Home Secretary deal with failing forces. I am

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    sure that the hon. Gentleman will have made all the comments that he has just put on record on the Floor of the House to the chief constable of Bedfordshire police, particularly about staffing in Leighton Buzzard.
    Bedfordshire had 1,077 police officers on 31 January. That is 41 more than in March 2001. I understand that the force expects to increase further to 1,117 in 2002–03. Civilian staff numbers have increased by 28, which is a 6 per cent. increase, since March 1997 to 512 on 30 September 2001. I understand that the force has introduced a number of measures to make better use of officers' time, not only to increase police visibility on the streets, which is an important reassurance to the public, but to ensure that officers spend their time more effectively.
    I commend the force on those initiatives, which include a prisoner handling unit to help save officers' time. The force is considering the feasibility of extending the scheme throughout the force area. It employs civilians for case preparation, prisoner handling and custody work. For rural policing, there are two mobile police stations to provide visibility and reassurance to those communities.
    The force has introduced the Operation Scorpion website, which gives the public access to crime reduction initiatives, and Ringmaster, which is a computerised system to pass on intelligence among local communities. That is particularly useful in rural areas, but it is also effective in areas with a high concentration of retail premises, so that people can be informed about the presence of known troublemakers, their whereabouts and their activities.
    In addition to its specials, the force has 60 volunteers who are members of the public who give up their time to assist the force with office duties and open days so that officers can remain on the beat. That is the sort of initiative that I like to see.
    The crime fighting fund, which the Government established to boost police numbers, has been central to the recent growth in police strength nationally. The CFF is enabling forces to recruit 9,000 officers over and above their previous plans in the three years to March 2003. In 2000–01, forces took on some 2,800 officers through the fund and a further 3,200 were recruited by the end of 2001–02. We expect a further 3,000 to be recruited this year, and that will make up the target of a 130,000 nationally that I mentioned earlier.
    In 2000–01, the first year of the scheme, the Bedfordshire force appointed 80 recruits, including its total allocation of 28 funded by the CFF. The latest information provided by the force shows that it took on 132 new recruits in 2001–02, including all of its allocation from the CFF. Subject to the force meeting the CFF criteria, it will be able to take on a further 26 recruits in 2002–03.
    Partnership and crime reduction programmes in Bedfordshire have an extra £3 million of funding. I am sure that the hon. Gentleman will be aware of some of the projects in his constituency, including £197,000 for CCTV in Leighton Buzzard; £46,000 for partnership development in 2001–02; £110,000 for the communities against drugs initiative in 2001–02; and £42,000 for the safer communities initiative scheduled for 2002–03. That
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    is a significant investment of extra resources, which will help the police to reduce crime and improve the quality of life for his constituents.
    The hon. Gentleman made a good point about officers leaving the force on transfer. Transfers of officers from Bedfordshire to other forces have increased sharply from 21 in 2000–01 to 45 in 2001–02. None the less, recruitment continues to outstrip the number of officers leaving the force. Recruitment has increased from 37 officers in 1999–2000 to 82 in 2000–01 and to 132 in the current financial year.
    It is healthy for there to be an interchange of experience between police forces, but I recognise that a net outflow of experienced officers can cause great difficulty. As part of the research presently being undertaken on voluntary resignations, a sample of officers who have transferred between forces will also be interviewed. The information that that provides on the reasons for transfer will help to identify measures that forces can take to reduce the number of transfers.
    I understand that in Bedfordshire exit interviews conducted by the force show that some officers left to join London forces for financial reasons, but others went to other forces for affordable housing and quality of life.
    Higher than average early retirements may be expected in a service such as the police for understandable reasons, but medical retirements in Bedfordshire have been significantly higher than average in recent years—a huge 58.1 per cent. in 2000–01 compared with the England and Wales average of 31.4 per cent. The Government target is for medical retirements to represent no more than 33 per cent. That is an issue on which the Bedfordshire police will have to focus in order to discover what is happening.
    As the hon. Gentleman will know, following a recommendation by the police negotiating board, the previous Home Secretary approved a new allowance for officers in eight forces surrounding London who were appointed on or after 1 September 1994 and are not in receipt of housing allowance. That was awarded in recognition of the recruitment and retention problems associated with the higher cost of living in the south-east. For qualifying officers in Bedfordshire, the allowance is £1,000 a year from 1 April 2001.
    Some may contend that the £1,000 allowance for qualifying officers in Bedfordshire is inadequate. The force would have had the opportunity to make that case to the police negotiating board through its representation in the Association of Chief Police Officers and the Association of Police Authorities. It would be for the police negotiating board in the first instance to consider any case for revisiting the amount awarded to qualifying officers in Bedfordshire. The Home Office is paying 75 per cent. of the cost of the south-east allowance and in 2001–02 we paid the force £200,000.
    Through the starter home initiative, which also aims to assist in this area, 21 Bedfordshire police staff are expected to benefit from a £10,000 equity loan to help them buy their first home. I hope that that will give the hon. Gentleman some assurance, but I recognise that complex issues are involved.
    The hon. Gentleman raised issues with respect to the travelling community.
    Andrew Selous: The Minister is responding most helpfully to the points that I have made. Before she moves

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    on from the issue of transfers, may I draw her back to the figures that I mentioned. There is a £7,200 difference for a probationer at 18 weeks. That is a huge difference for a young man or young woman starting out in the police force—from £18,000 to £25.000. The difference is £5,000 for a police constable at 10 years and £6,300 for an inspector at two years. Those figures are at the heart of the problem, especially given free travel and a guarantee of a north London station. I stress that further work needs to be done on those points.
    Angela Eagle: I understand the hon. Gentleman's argument, and when I said that these were complex and difficult issues, I hope that he sensed that I was acknowledging the problem. As always, we will keep an eye on trends in this area. I also hope that I gave the hon. Gentleman a hint that the police negotiating board may be a first port of call on extra allowances if a case can be made for the Bedfordshire police.
    It is important in the few minutes we have left to get a point in about the travelling community. I have every sympathy with those whose lives are blighted by antisocial behaviour and criminality, whatever its source, which should be taken seriously and dealt with firmly.
    The police are slightly baffled by the problems with the travelling community, as no particular cases have been drawn to their attention. I know that there has been an increase in distraction burglary in the hon. Gentleman's constituency. People may attribute such crimes to the travelling community. If that is happening, it is important that people contact the police so that they can note events, investigate what is going on and get more information about who is perpetrating such crimes. At the moment, the police are slightly baffled by the concentration of crime attributed to the travelling community. It may well be going on, but if it is, it should be reported to the police so that they can track trends.
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    The police and local authorities can use their powers under sections 61 and 77 of the Criminal Justice and Public Order Act 1994, at an early stage if necessary, to direct travellers to leave land when the statutory conditions are met. Although those are discretionary powers, we have always made it clear that antisocial behaviour and criminality should not be tolerated, and that the traveller lifestyle is no justification for behaviour that is not acceptable in the settled community.
    Under the Crime and Disorder Act 1998, we introduced new antisocial behaviour orders. At present, such orders can cover only a single local government area or that area and adjoining areas. I hope that the hon. Gentleman will be supportive of changes that we are proposing in the Police Reform Bill to introduce powers to impose an antisocial behaviour order that will be valid over a wider area than the single local authority, and potentially over the whole country. I hope that he will realise that that may be relevant if traveller communities exhibit antisocial behaviour.
    Andrew Selous: I am conscious that we have only minutes left, but may I ask the hon. Lady to give me an undertaking that she will liaise with Ministers in the Department for Transport, Local Government and the Regions about land currently classed as agricultural land that is turned into a settled encampment? We must consider that problem very seriously. It is different from the trespass issue, but it is causing huge concern to large numbers of my constituents and those of many hon. Members.
    Angela Eagle: The hon. Gentleman has left me about 20 seconds, so I shall abandon the rest of my speech. I was going to say that I will draw his remarks to the attention of my colleagues in the DTLR, and I am sure that they will be in touch with him shortly.
    Question put and agreed to.
    Adjourned accordingly at one minute to Three o'clock.