Commons Sitting of 4 April 2003

Preamble
The House met at half-past Nine o'clock

PRAYERS
[SIR ALAN HASELHURST in the Chair.]
The House being met, and the Speaker having leave of absence pursuant to paragraph (3) of Standing Order No. 3 ( Deputy Speaker), SIR ALAN HASELHURST, The Chairman of Ways and Means, proceeded to the Table.

Orders of the Day
  Co-operatives and Community Benefit Societies Bill
  As amended in the Standing Committee, considered.
  Co-operatives and Community Benefit Societies Bill
    Clause 2

      STATUS OF CHARITABLE SOCIETIES TO APPEAR ON CORRESPONDENCE ETC
      9.33 pm
      Mr. Mark Todd: I beg to move amendment No. 1, in page 3, line 17, leave out 'and'.
      Mr. Deputy Speaker (Sir Alan Haselhurst): With this it will be convenient to consider amendments Nos. 2 to 4 and 6.
      Mr. Todd: It is a pleasure to bring the Bill back to the Floor of the House. It received considerable scrutiny and amendment in Committee, but there have been opportunities to reflect on further issues raised in Committee and outside, which form the basis of the amendments that we shall consider today.
      Amendments Nos. 1, 2, 3, 4 and 6 deal with conveyances that were not included in the compass of the Bill. The intention is to ensure that the Bill properly covers important agreements between societies and their business partners. The amendments also deal with the protection of conveyances that charities, which may be co-operatives or community benefit societies, seek to agree. These straightforward amendments should be uncontroversial, based on our experience of debating the Bill so far.
      Mr. Stephen O'Brien: I simply wish to confirm that, in the overall context of the Bill and the debates on it that have taken place so far, I have no objection whatever to the amendment. It seems wholly practical.
      The Financial Secretary to the Treasury (Ruth Kelly): Clauses 2 and 3 change the powers and capacities of the societies to facilitate their ability to enter into business transactions. However, there are also exemptions to some of those provisions for societies that are charities.
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      The rationale is to ensure that the charities' assets are protected and not used for a purpose for which they are not intended. That is in line with the corresponding provisions that already exist for companies that are charities.
      Clause 2 deals with part of the system of protection for charities. It requires societies that are charities to make their charitable status clear in various documents, including business letters and official publications of the societies. The aim of amendments Nos. 1, 2, 3, 4 and 6 is to provide greater conformity with company law by listing conveyances as other documents where the charitable status of the society must be disclosed. Those amendments also provide for the offences that will be committed where societies or their officers do not comply. Again, that is consistent with company law.
      Conveyances could involve societies in significant transactions. It is therefore important that societies that are charities disclose their status. The Bill will then afford charities that comply with that disclosure requirement greater protection for their assets, in the event that conveyances are outside the rules or powers of the societies.
      Mr. Andrew Love: Can my hon. Friend confirm whether the changes that she talks about will create the level playing field between industrial and provident societies and companies that is so important for future competition in that sector?
      Ruth Kelly: I am very happy to confirm that that is the intention. These amendments should do exactly as my hon. Friend suggests: provide a level playing between industrial and provident societies and companies.
      Mr. Gareth Thomas: Is that absolutely necessary? Although I have argued that many changes in line with companies should be made for industrial and provident societies, may I ask my hon. Friend to give an example of why these amendments are as important as she and my hon. Friend the Member for South Derbyshire (Mr. Todd) suggest?
      Ruth Kelly: Yes, it is important that the playing field is completely level wherever possible. I have already given the example that conveyances should be listed as documents where the charitable status of societies must be disclosed. That is the purpose of these amendments in relation to industrial and provident societies.
      Mr. Tom Levitt: As chairman of the all-party group on charities and the voluntary sector, I take a great interest in the proposals. Can my hon. Friend confirm whether the Bill and these amendments are in line with the Treasury's recommendations on charity law reform generally?
      Ruth Kelly: I can confirm that the amendment's intention is to bring industrial and provident societies up to date with the current state of company law, thus providing a level playing field. On those grounds, I commend the amendment to the House.
      Amendment agreed to.

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      Amendments made: No. 2, in page 3, line 18, at end insert
      'and
      (e) in all conveyances purporting to be executed by or on behalf of the society.'.
      No. 3, in page 3, line 32, leave out second 'or'.
      No. 4, in page 3, line 35, at end insert
      'or
      (c) executes or authorises to be executed on behalf of the society any document such as is mentioned in subsection (1)(e) of this section,'.—[Mr. Todd.]
      Mr. Todd: I beg to move amendment No. 5, in page 4, line 7, at end insert—
      '(c) in relation to a society whose registered office is situated in one of the Channel Islands, means a society established for charitable purposes only ("charitable purposes" having the meaning given by the law of the Island in question).'.
      Mr. Deputy Speaker: With this it will be convenient to discuss amendment No. 8.
      Mr. Todd: These amendments relate to the possibility that a society may be active in the Channel Islands. While the legislation does not relate to the Channel Islands or apply to them, it is not particularly uncommon for societies to trade there and, in some instances, be based there. During the Bill's progress, consultations have taken place with the Channel Islands authorities to ensure that they believe that appropriate provisions are included in the Bill, and they do. The principle behind the clauses amended by the amendments is, as has been said earlier, to provide societies with a level playing field so that they may trade on the same basis and with the same freedoms as equivalent companies. Obviously, there are other matters to consider which have arisen in debate in the House and in Committee, and I am sure that they will come up again on Third Reading, but we are now considering a specific aspect of the Bill. As I have said, the amendments have the support of the Channel Islands authorities.
      Mr. Lepper: I appreciate that my hon. Friend's amendments relate to the Channel Islands but, not having served in Committee, I should be grateful if he would tell me whether, in previous discussions, any thought has been given to the possibility that businesses in other parts of the world might operate in ways that weaken the protection that businesses in this country would otherwise enjoy? That may be outside the scope of my hon. Friend's Bill, but has any thought been given to it?
      Mr. Todd: I thank my hon. Friend for his slightly cryptic intervention, in which he hinted at practices in other parts of the world that may be covered by the Bill. We cannot legislate for other parts of the world, and where societies choose to carry on activities in other parts of the world, those activities are bound by the laws of those countries. The amendments relate only to societies based in the Channel Islands. Some societies
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      carry on business through agencies in the Channel Islands but, because the Bill does not constitute law within the islands, it does not relate to that.
      Mr. Love: Concern has been expressed in the past about the special status of the Channel Islands, and the Treasury has taken great interest in the development of financial services law there. I am thinking in particular of limited liability partnerships. Will my hon. Friend confirm that changes relating to the Channel Islands will not weaken in any way the solid foundations of his Bill?
      Mr. Todd: I can confirm that the amendments do not alter in any sense the thrust of the Bill. They apply purely to the Channel Islands authorities, with whom we are in partnership but who, as my hon. Friend correctly states, are in a slightly anomalous legal position. I very much hope that the House supports the amendments.
      Mr. Levitt: I am intrigued by the suggestion in the amendments that the definition of charitable purposes may differ from one Channel Island to another. Is that the case, and is there not something to be said for encouraging the Channel Islands to have a common definition?
      9.45 am
      Mr. Todd: I am afraid that I am a sad soul who is not an expert on charitable activity on individual Channel Islands, and would certainly not seek to comment on how it may differ in different islands. However, presumably that matter was given careful thought by the Channel Islands authorities when they decided to support the amendments. I hope that the House, too, will support the amendments.
      Mr. Stephen O'Brien: It may be uninteresting but helpful none the less to start with the point made in the intervention by the hon. Member for High Peak (Mr. Levitt). If I recall correctly from my dim and distant days of studying law at the same Cambridge college as the Bill's promoter, the definition in the English legal system of the Channel Islands includes such places as Sark. It is possible that there are different charitable purposes on Sark, as it has no motorised vehicular traffic, so it may need a different definition to ensure that that is excluded. I do not know that for a fact, but it might be helpful in showing that there may be a difference. I daresay that the hon. Member for South Derbyshire (Mr. Todd) has thought the matter through, as have the Channel Islands authorities.
      Mr. Levitt: The hon. Gentleman will be aware that the Government strategy unit has proposed changes to charity law including a 10-point definition of charitable purposes—I may catch your eye later, Mr. Deputy Speaker, to talk about that. I hesitate to get the hon. Gentleman to suggest again what the Channel Islands should be doing, but the process that we are carrying out on the recommendation of the strategy unit to achieve a consistent approach to charities would help to clear up any anomaly.
      Mr. O'Brien: The hon. Gentleman makes an important point about the consistency of definition in the operation of the legislation. In moving amendment

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      No. 5, the hon. Member for South Derbyshire said that the applicability of the Bill to the Channel Islands is not the issue, but it has to make reference to them in the case of societies that are registered there or have them as their place of business. The hon. Member for High Peak made an important point about the need in framing any legislation to seek a level playing field and consistency of approach. During proceedings on the Bill, there has been a debate about whether the Bill pre-empts the report from the strategy unit, formerly the performance and innovation unit, about charities and the voluntary sector. The Minister has consistently assured us that it does not, but it has focused thinking about the report.
      I was much taken with the point made by the hon. Member for Brighton, Pavilion (Mr. Lepper), who asked about territories beyond the Channel Islands. The Bill's promoter rightly suggested that his hon. Friend was a touch cryptic in seeking to stay in order, but I felt that he may have been trying to explore Delphic territory. Delphi, of course, is a long way from the Channel Islands, so I am not sure that any assistance has been given.
      The amendment is important because of the way in which such entities are often based and configured. Can the Minister give an assurance that not only in the strategy unit's work, but in the company law reform work that we expect to come forward in the next Session or shortly thereafter, a consistent approach will be taken to industrial and provident societies, as well as to those that we prefer to call co-operatives and community benefit societies? One aspect of the process that the amendment highlights is that it is not always necessary to have different legislation for those entities, given that we are bringing them into conformity with the broader law as it applies to corporate entities. If we can avoid societies being encompassed by separate statutes, and instead bring them into the body of company law, that would obviously be better. Clearly, the Minister and her advisers will give that careful consideration.
      On that basis, I am happy to support the amendment, but it would be helpful to have the assurance that there will be a consistent approach across all corporate entities at a later date.
      Mr. Richard Allan: The promoter knows that the broad thrust of the Bill has all-party support. It is sensible for the provisions to encompass societies registered in the Channel Islands. Clause 2 deals with duties that will be imposed on charities, so it is important that the definition of bodies included in that broad remit is correct. It is clear which bodies are covered by England and Wales law and Scottish law, but there may be some uncertainty about those registered in the Channel Islands because, as the hon. Member fur High Peak (Mr. Levitt) pointed out, the provisions will apply to all the bodies defined as charitable under the Acts of the various islands. That is a broader remit, and I hope the Minister will assure us that we can take it on trust that the bodies that we wish to catch within the Bill's net will be broadly similar, under the various laws of the Channlel Islands, to those that would be caught by English and Welsh law and Scottish law.
      What is the position of societies registered in the Isle of Man? Are those covered by the Bill or by other English and Welsh law, or do they remain outside the
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      scope of the Bill, although we have brought in England, Wales, Scotland and now, with the amendments, the Channel Islands? How widely is the net cast?
      Ruth Kelly: As I outlined earlier, clauses 2 and 3 seek to make changes to the powers and capacities of societies to facilitate their ability to enter into business transactions. However, there are also exemptions from some of these provisions for societies that are charities. The rationale for that is to make sure that charities' assets are protected and are not used for a purpose for which they were not intended. That is in line with the corresponding provisions that already exist for companies that are charities.
      To apply these provisions, we obviously need to define a charity. The Bill, as amended in Committee, already does so for societies registered in England and Wales, or Scotland. Although the Bill does not apply directly to the Channel Islands, we still need to make provision for societies based there that undertake business subject to the law of England and Wales, or Scotland. Following consultation with the Channel Islands authorities, I believe the amendment makes the necessary provisions. I am happy to reassure hon. Gentlemen who raised that point today. I therefore support the amendment.
      The Industrial and Provident Societies Act 1965 does not apply to the Isle of Man, but it does apply to the Channel Islands, so they are in slightly different categories. That is why the Bill needs to cover the Channel Islands industrial and provident societies that are charities, but not those registered on the Isle of Man.
      Mr. Levitt: I am sorry to keep going on about the matter, but is my hon. Friend saying that it is possible for two charitable companies operating in mainland Britain, in the same environment, carrying out the same functions, one of which is registered in Britain and one of which is registered in the Channel Islands, to operate to two different legal definitions of charitable functions?
      Ruth Kelly: I assure my hon. Friend that that is the case, which is why we have had to define a charity for the purposes of the Bill.
      On the point raised by the hon. Member for Eddisbury (Mr. O'Brien) about keeping industrial and provident society legislation up to date with company law, it is important to recognise that industrial and provident societies are not companies. However, we are keen to ensure that industrial and provident societies enjoy any new operational flexibilities that are introduced for companies.
      Mr. Love: As an adaptation of my earlier question, can my hon. Friend assure the House that there will be a level playing field between charities formed in the Channel Islands and those formed in other parts of the United Kingdom, so that there will be no attraction for some organisations to form themselves in the Channel Islands, rather than in the rest of the United Kingdom?
      Ruth Kelly: I shall deal first with the comments of the hon. Member for Eddisbury, and then return to my hon. Friend's question. We are keen to ensure that industrial and provident societies enjoy the same flexibilities as

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      those that we grant companies in due course. The review of company law being carried out by the Department of Trade and Industry will give the Treasury the opportunity to consider updating a substantial proportion of industrial and provident society legislation through the powers given to us by my hon. Friend the Member for Harrow, West (Mr. Thomas) in his private Member's Bill. Although we cannot start the updating process until company law has changed, we will start thinking about how to modernise industrial and provident society legislation in advance. When we respond fully to the strategy unit's report, we will also bear in mind those areas of industrial and provident society legislation that we consider ripe for reform.
      Mr. Gareth Thomas: I was slightly concerned by my hon. Friend's comment to the hon. Member for Eddisbury (Mr. O'Brien) that any future changes to company law would need to be read across for industrial and provident societies. Although I welcome that, I hope she will acknowledge that in many respects company law has already been modernised far ahead of the law for industrial and provident societies. I am thinking particularly of audit and accounting exemptions, which leave industrial and provident societies substantially disadvantaged and having to incur considerable additional costs, in comparison with companies. Can she reassure me that that has not been overlooked?
      Ruth Kelly: As my hon. Friend knows, because he has raised these issues on many occasions with me and with the Treasury in various contexts, we are aware of the nature of that disadvantage and will give it due consideration when we consider our priority areas for reform. Of course, my hon. Friend will have to wait for a little while yet until we make those priorities clear, but I am sure he has the necessary patience.
      The point made by my hon. Friend the Member for Edmonton (Mr. Love) about a level playing field for charities is indeed outside the scope of the Bill, which is purely about the differences between companies and industrial and provident societies. However, he makes a good point, and there will be a separate strategy and review of charities, which will consider changes to charity law in due course. I am sure that that review will consider the issue that my hon. Friend highlights.
      Having fully considered the amendment proposed by my hon. Friend the Member for South Derbyshire (Mr. Todd), the promoter of the Bill, I am content that the amendment makes the necessary provisions. The Channel Islands authorities support the amendment and I can, therefore, recommend it to the House.
      Amendment agreed to.
      Amendment made: No. 6, in page 4, line 7, at end insert—
      '(8) In this section "conveyance" means any document for the creation, transfer, variation or extinction of an interest in land.
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      (9) In subsection (5)(c) of this section the references to execution include—

      (a) purported execution; and

      (b) the doing of any act which (though not by itself execution) combined with other acts constitutes execution or purported execution.'.—[Mr. Todd.]

    Clause 3

      CAPACITY OF SOCIETY AND POWER OF COMMITTEE TO BIND IT
      Mr. Todd: I beg to move amendment No. 7, in page 4, line 36, after 'which' insert—
      not less than 21 days'.
      The amendment is perhaps of slightly more substance than the previous ones, although I have been interested in the interventions made and interest shown with regard to the first two groups. I think that this amendment merits a little more thought.
      Mr. Levitt: Thank you very much.
      Mr. Todd: I shall be interested to hear my hon. Friend's contributions on this matter as well.
      10 am
      The amendment deals with the protection of a contract or business deal between a society and a third party and the need to ensure that the actions of that society where it exceeds its constitutional objects do not prevent the contract from being legal and of substance. It relates to what should be done with regard to the consequences of such an event. If a society proves to be trading outside its rules, the object of the provisions is to protect the partner or customer in the contract. However, there is also a consequence for the society, which has to work out what to do about the fact that the objects set down in its constitution have been exceeded by the actions of its officers or a committee. The steps set out in the clause represent the belief that it should be possible for a society retrospectively to agree that those acting on its behalf have done so correctly.
      The amendment sets out a notice period for a meeting at which such a decision might be made. The clause already gives a statement of the majority that must be achieved at such a meeting to secure that decision, but I think that it is perfectly legitimate that proper notice should be given for such a meeting, which will involve what may obviously be a very substantial decision for a society, as it is perfectly possible that the breach of objects is substantial and relates not only to a technical matter.
      Mr. Adrian Bailey: I thank my hon. Friend for giving way. I am interested to know what deliberations he had with regard to the 21-day period. I can see the logic of having no fewer than 21 days' notice, but the amendment does not seem to contain a further requirement to hold the meeting within a given period. On what basis did he deal with only half the timing equation?
      Mr. Todd: That is a very reasonable intervention. The answer is that the 21-day requirement is based on

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      equivalent company law. However, that may not be an entirely adequate answer, as societies are obviously rather different institutions from companies, and simply saying that we want to proceed on the same basis as that which applies to companies might be seen as inadequate. I think that 21 days' notice gives those who are concerned about the breach of an object of a society the opportunity to gather their arguments and inform members. As I said, the matter at stake may be of some substance in the society, so some individuals might wish to lobby people to vote against the resolution.
      Perhaps it is worth setting out the consequences of not passing such a resolution. In those circumstances, a liability will remain among those who have made the contract—and rightly so. We should not permit circumstances in which the servants or a committee of the society can make a business deal that is clearly outwith the objects of the society, regardless of the democratic intent of its members. The provision is therefore a serious restraint.
      Mr. Love: The argument that, because company law provides for a 21-day period, it is appropriate in respect of industrial and provident society law is not a strong one, considering that one or two shareholders will often own 75 per cent. of the voting rights in a company. In industrial and provident societies, a much wider group of people would be involved. My question relates to the provisions in a special resolution. There are protections, including the 75 per cent. vote, so one has to question whether it is necessary to specify 21 days as a special length of time and whether seven or 14 days would he more appropriate, especially where it may be necessary to pass a resolution to preclude legal action.
      Mr. Deputy Speaker: Order. I think that, even on a Friday, I would like to observe the distinction between an intervention and a speech.
      Mr. Todd: Thank you, Mr. Deputy Speaker. Nevertheless, I thank my hon. Friend for his contribution on the amendment, whether it was an intervention or a speech.
      First, the wording ensures that the period should be at least 21 days. I recognise that my hon. Friends's examples involved shorter periods, but there is no reason why a society should not say that it will hold the meeting in 28 days' time or after a longer period, bearing in mind the initial point that he made, which was extremely sound. Indeed, that is why I said that my reference to mirroring company law was perhaps an inadequate answer. The institutions are very different and there are strong arguments for giving a decent interval. Before he intervened, I was setting out the sort of interval in which a genuine debate could take place about the implications of the decision. It is perfectly possible that substantial numbers of society members will profoundly disagree with a decision and wish to hold their officers and the committee instructing them answerable for that decision. This should not be some token paper process.
      It is important to reflect on whether the proposed approach is the right one. My hon. Friend referred to an example that, I would argue, set aside some of the democratic constraints under which a society should operate. If there were a requirement that the meeting
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      should be held within seven days, those who would be concerned about the decision might well have very little opportunity to gather their arguments and inform their colleagues about the implications. The point is that the provision happens to be the same as that which applies in company law, but I certainly believe that any society should take the view that at least 21 days means just that. There may be circumstances in which a matter is of such substance that longer notice and greater information flow is required among members to ensure that they are properly informed about the implications of the decision that has been taken.
      Mr. Bailey: I understand the logic of my hon. Friend's argument, but I am not sure whether he has addressed my concern. A society with a very long-standing membership could, for example, use the validation of that membership as an excuse for delaying a vote for a very long time. That would mean that the society had been operating outside its original terms of reference. What are his thoughts on that particular issue?
      Mr. Todd: I thank my hon. Friend for his intervention. Such a lengthy delay would have two important implications. The first is a positive one that relates to the content of the Bill: the third party that engaged innocently in a contract with the society is protected, whatever the delay. That is an important issue to grasp. Where a contract has been struck with a third party by a society acting outside its objects, that individual or business will be protected because they acted unknowingly of the breach of the objects. As was mentioned on Second Reading, no such protection previously existed and such parties simply had to consult the constitution of the society themselves to be sure that the contract lay within the bounds of its objects.
      The implications of lengthy delay within the society take me back to one of the Bill's foundations. Societies are democratic bodies, which is one of the reasons why they interest me, and presumably one of the reasons why hon. Members have been concerned and interested during the Bill's passage. They are interested in the fact that societies are the means of carrying out activities based on democratic will. A society might take the view that lengthy delay was required while the membership database was cleaned up to ensure that the correct people were notified of a meeting, although I cannot recall a circumstance in which such a decision was taken in my experience of societies. Most societies of which I know readily concede the inadequacy of their membership databases and recognise that it is inadequate to rely entirely on postal notices to inform people of a meeting of such substance. Members regularly do not notify societies of their changes of address, so the membership database would not be a full tool with which to notify people of a meeting. A retail society would achieve proper notification by placing notices in shops and places connected with the society's trading activities and by publicising the meeting in the relevant local media. I do not anticipate that my hon. Friend's argument about the quality of membership databases would be used to delay the process.
      Most societies' constitutions—or at least those of all the societies that I have encountered—allow members who are worried about a matter to call a meeting about

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      it. If there were evidence that a retail society's board had prevaricated about the process and delayed calling a meeting to discuss such an important matter, its members could, and should, take the opportunity to call a meeting.
      Mr. Gareth Thomas: The importance of general meetings for industrial and provident societies means, as my hon. Friend knows, that there is much reference to such meetings in current legislation on such societies. However, there is no requirement for 21 days' notice to be given before the meetings. Will my hon. Friend and the Minister reflect on why a 21-day notice period is so important for a general meeting to consider some issues, but not others?
      Mr. Todd: It is the same notice period as that under company law to cover similar circumstances, although I qualify that by saying that it is not an overpowering argument. If a company trades outside its objectives, there is an opportunity for retrospective correction of that position, and the notice period is applicable to that. Nevertheless, it is reasonable to ensure that a proper notice period exists for a process of such substance. One could argue that a society's ordinary general meeting should be governed by the society's rules. The governance of a society is a combination of this country's law and the society's democratic will because it sets many of its own rules. The precise process of how general meetings may be legitimately called is a combination of the society's legal obligations and its democratic decision on how to conduct its business. I have never argued that the law of this land should cover every possible aspect of how a society or company should conduct its affairs. The law should adopt a relatively light touch.
      10.15 am
      I would argue against my hon. Friend if he were suggesting that time limits should be written into law to cover other aspects of societies' operations because they should usually be left to make their own decisions. However, the provision covers an important legal obligation because individuals could face legal action if they fail to comply with their society's objectives, as was suggested previously. A time limit in such circumstances is important for individuals' protection and, especially, societies' protection. The amendment is important and I am glad that it was thought of after Committee.
      Mr. Lepper: I fully appreciate my hon. Friend's points about a light touch and his wish to avoid over-regulating essentially democratic organisations in which decisions are taken by members. However, he earlier referred to ways in which the notification of the meeting might be given to members, such as by post or through advertisements. Did my hon. Friend consider whether there was any need to add such requirements to the way in which notice is given in the Bill, or does he think that that is already covered by existing guidance and legislation?
      Mr. Todd: My hon. Friend's point relates to two arguments. First, such societies are extremely diverse. I
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      have given examples of retail societies because my personal experience is based on them, but there are many other co-operatives and community benefit societies that are organised in wholly different ways. A prescriptive approach to provide that a general meeting must be called in a specific way and publicised through a specific medium would be an unrealistic legal intervention that disregarded the different ways in which societies operate.
      Secondly, as I have already said, such prescription would interfere with a society's democratic right to make its own judgments. When the House considers this and other matters, we should weigh carefully the balance between the legal protections for people on which we should insist and freedom for our citizens to carry on their affairs as they wish, whether as individuals or when they act collectively in the way in which we are discussing.
      Claire Ward: I understand my hon. Friend's belief that we must balance regulation and criteria for sending notices. Does he agree that even if it is possible to have a 21-day notice period, the way in which the notices are sent out is equally important? If the majority of members could not access the notices, whether they were in the press or otherwise, the value of the 21-day notice period would be diminished.
      Mr. Todd: It is a valid point that societies could choose to implement the obligations in the clause, including the notice period for which the amendment would provide, in a nugatory way. They could conduct a token process of informing people whereby members had no genuine opportunity to find out about a decision to call a meeting or, therefore, to participate in it.
      However, the activities of those organisations and the democratic constraints under which they operate are already tightly regulated. They have to pass a regulatory test on members' involvement in order to be registered. We should therefore rely on the organisations' regulatory wisdom. Those who were fortunate enough to serve on the Committee know that we discussed the regulatory framework that might be applied to societies in future. The regulators would be obliged to consider such matters, as they do now.
      As I predicted, the amendment has generated a good deal of interest. It is a rational and sensible addition to the Bill.
      Mr. Stephen O'Brien: I am happy to say that I believe that the amendment is sensible and justifiable. Like the hon. Member for South Derbyshire (Mr. Todd), I am glad that it has been tabled after our deliberations in Committee.
      The hon. Gentleman made several important points in highlighting the reasons for the amendment. First, he dealt with third parties, who may transact with any entity that the Bill encompasses. They rightly start with the expectation that they are entitled to believe that those with whom they transact from the co-operative or community benefit society carry authority. That principle has informed the Bill's drafting. It is right that a transaction that may extend beyond the vires of the relevant entity's objects is called into question. If one purports to transact on behalf of an entity, it is vital that

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      one has the authority to do that. It is important for third parties to know that the transaction has bound the entity, or whether they have left themselves personally liable for not acting within the proper authority of the co-operative or community benefit society.
      The importance of the matter renders special resolution ratification procedure wholly appropriate. An ordinary resolution, albeit democratic, means that a majority of one is enough. Special resolution shows the intention, in the case of a problem, to have the full backing of all those who have at least a stakeholder interest in the co-operative or community benefit society.
      Mr. Love: The amendment would introduce a minimum time period. Should a maximum period also be introduced?
      Mr. O'Brien: Like me, the hon. Gentleman has the benefit of having acted as a professional company secretary before his political life. He makes an important point, which is of genuine practical importance to those who are responsible for ensuring full democratic notification and involvement. I shall deal with it in the course of my remarks.
      Earlier, the difficulty of validation and of identifying to whom notice should be given was mentioned. I appreciate and readily accept that it may be difficult to have a live and reliable record of the full constituency of those who are rightly interested in the relevant entities. It is therefore important to consider not only whether there is a database and whether everyone can be reached by post, but a method of distributing information more widely. There is therefore an argument for considering a maximum time, which the hon. Member for Edmonton (Mr. Love) mentioned. However, we should start with an appropriate minimum time, which was the focus of many interventions that preceded my contribution.
      It is appropriate to set a minimum period of
      "not less than 21 days".
      I would hesitate to propose a read-across from company law precedents in statute and through court cases that sought to clarify—or not—the law. It has become clear that such a time period is 21 clear days. I should like to believe that that precedent, set by the courts as an interpretation of statute, applies to the Bill. Those who know the arcane technicalities realise that the 21 days do not include the day of posting. There are 22 days from the time that the document leaves the office. It is important to ascertain whether there is a true read-across from company law or whether the precedent could inform what happens in the case of the Bill.
      Mr. Gareth Thomas: I accept the need for a special resolution process. However, to revert to my intervention on my hon. Friend the Member for South Derbyshire (Mr. Todd), I am less clear about why the special resolution process in this case is more important than such a process for demutualisation, which does not require a 21-day notice period.
      Mr. O'Brien: I shall try not to be led too far down a track that might incur your wrath, Mr. Deputy Speaker. However, I shall give a broad response to that important point. Statute must establish what requires special and
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      ordinary resolutions. Today we are considering a matter that warrants special resolution. Perhaps the hon. Member for Harrow, West (Mr. Thomas) should leave until another day arguments for a special resolution process for demutualisation. There could be some valid and interesting arguments about that. If the Government proposed such a move, the hon. Gentleman and I might find ourselves on the same or opposing sides.
      Demutualisation must reflect the entity's express wish. In the clause, we are seeking ratification of an action that has already taken place, which binds the entity to a third party. Although one could get into a principled argument about the hon. Gentleman's point, it is wholly appropriate to apply the special resolution process in the case that we are considering. He should wait for another day to present his arguments about demutualisation. Perhaps the Minister has more information, given that she is blessed with knowledge about the Government's intentions; I can only speculate on them.
      A notice period of 21 days is appropriate, not least because delivery by post cannot always be guaranteed. It was argued earlier that large FTSE 100 plcs may have one or two shareholders who comprise 75 per cent. of the holdings. The plc of which I was group company secretary had 44,000 shareholders, of whom 24,000 represented approximately 67 per cent. of the shareholding. It is important to be able to demonstrate that one has made every effort to contact everyone to give them proper notice. That requires advertisements in appropriate newspapers. Many advertisements can make us flip the page over very quickly because they do not arrest the eye, but it is important that news should get around on the grapevine.
      10.30 am
      The 21-day period arose because of a habit that developed in Lancashire. The north-west has a fine tradition of co-operatives, and I am fortunate enough to represent a seat in Cheshire, whose co-operatives are combined in the United Co-op. The co-operatives in Lancashire had a thing called wakes week, when, in the old days, almost everyone used to go off on holiday. Sometimes that week's holiday would extend to a fortnight. Some companies were choosing to give notice of these meetings just as people were going on holiday, so the 21-day provision was introduced to ensure that people had got back from their holiday and had the opportunity to see the notice. Otherwise these things could all have been nicely stitched up while they were away. That is the historical explanation, and it shows that there was a good reason for the provision. The normal practice of taking a fortnight's holiday has not changed much since then, so there is a reasonable practical basis for the period being not less than 21 days.
      Mr. Levitt: I thank the hon. Gentleman for giving way. I recall that the outcome of the 1970 general election might have been different if it had not been held in wakes week. He talked about sending out letters; in this day and age, would he regard the posting of a notice on a website, or the sending of e-mails to members of a meeting, as suitable ways of announcing a meeting?
      Mr. O'Brien: One could get exceptionally excited about what constitutes a proper notice. It might be

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      appropriate to ask the promoter of the Bill to bear that question in mind, so that he can answer it later. It is a well established practice that notices are either written or communicated by advertisement. I have not been involved in these technical matters in recent years, but I would be surprised if some form of letter—sent either by fax, e-mail or posting on a website—were not deemed to be a proper notice. That would seem to be a proper expectation, but all sorts of regulations and laws will be developed as our experience of these matters increases.
      The 21-day provision is important because, when dealing with these serious matters, time must also be allowed in which to marshal the advice as well as the people. These matters can often involve quite technical legal and accounting issues, and it is important, for example, if people have an objection to what is taking place and wish to exercise their democratic right, that they have the chance to take proper legal advice on the matter. That can be difficult because they often have to go on a fundraising exercise first, to ensure that they can afford the legal bill. That happens in relation to popular objections to planning applications just as it does to members of a co-operative society who might feel that they have not been properly served by those in executive charge. Those are remote circumstances, but we must give people every opportunity, in the process that we enact, to get the best possible advice.
      We must also bear in mind that the 21-day provision will provide the opportunity for a number of meetings to take place in which the matter could be resolved in a rather less flamboyant way. That is often the best way to resolve these issues, and the meeting could always be withdrawn if they had been resolved in a satisfactory manner. Sometimes that can be better for the society. Seven or 14 days would not be enough. I do not think it necessary to have a maximum period, because there would be serious objections from those who wanted to exercise their rights if the matter were not resolved with sufficient dispatch. There is nothing like adverse publicity to make people act rather fast. I am happy to add to some of the arguments that the hon. Member for South Derbyshire has already made in support of the amendment, and I am happy to give our support to it at the same time.
      Mr. Gareth Thomas: I rise simply to ask the Minister to clarify the point that I made in interventions on my hon. Friend the Member for South Derbyshire (Mr. Todd) and the hon. Member for Eddisbury (Mr. O'Brien) about why a 21-day notice period is so important in regard to a special resolution but not to other ordinary resolutions or to what is surely the most important resolution that can come before a co-operative or a community benefit society, namely, a resolution to transform the organisation into a company or some other corporate structure. I should say that I do not intend to go to the barricades over this issue. Clearly, that would be daft. I recognise already that my point is not accepted by my hon. Friend the Member for South Derbyshire or by the Conservative Front Bench. I fear that it would probably not be accepted by my own Front Bench either. Nevertheless, I must ask whether this is Treasury prudence gone too far, whether a lawyer has run amok while giving advice to my hon. Friend the member for
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      South Derbyshire, or whether there is some other genuine reason, which I have missed, that a 21-day notice period is so important in this instance yet not in the instance of any other general meeting or resolution process for a co-operative.
      Mr. Allan: The hon. Member for South Derbyshire (Mr. Todd) made a persuasive case for his amendment in the face of some vigorous cross-examination, which he was bold enough to invite on himself at the beginning of his speech. He seems to be adopting a belt and braces approach, in that the rules of a society should anyway allow a decent period of notice to be given before a meeting to discuss an issue of such importance, but some may well not do so. He is trying to prevent a board from bouncing the membership into accepting an action that it has taken that is outside its terms of reference, and it is entirely proper that he should do so.
      Comparisons have been drawn with the period of time allowed for a company to hold such a meeting. A better comparison would be with the time that we allow for an election to take place. The hon. Gentleman made the point very effectively that it is the democratic nature of the society that is important, and that there has to be a decent period of time for the democratic debate to take place. I accept that that supports the point that was made about demutualisation—
      Mr. Thomas rose—
      Mr. Allan: I give way to the hon. Gentleman.
      Mr. Thomas: I was merely trying to make a full round by taking on the Liberal Democrat Front Bench on this issue at the same time as every other Front Bench. If the hon. Gentleman fears that a board might seek to bounce members on this issue, why might it not seek to do so on a demutualisation issue? That was certainly a feature of building society demutualisations in the 1980s. Why should there be a 21-day notice period for this issue and not for others?
      Mr. Allan: Speaking personally, I have every sympathy with the hon. Gentleman's argument. Sadly, we are not able to debate demutualisation today. Instead, we are debating the more specific requirements of the Bill. In that context, the hon. Member for Eddisbury (Mr. O'Brien) made the important point that this provision relates to a very important special resolution because it deals with contracts made with third parties and with powers being exercised ultra vires. He built a persuasive case for the 21-day notice period.
      Mr. Stephen O'Brien: The hon. Gentleman rightly points out that this measure is important—to answer the question posed by the hon. Member for Harrow, West (Mr. Thomas)—because it affects third parties, not because they would find that their contract had been voided, but because the executives could have a personal liability. In demutualisation cases, those who have an interest determine the interest for themselves and each other. There is, therefore, a difference between a third-party interest and a mutual interest.
      Mr. Allan: That point is well made. It is open to the membership of an organisation to change its own rules

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      so that any demutualisation vote would be able to take place only after a specified period of time. The fact that one can set one's own rules covers many of the potential difficulties that have been mentioned today—the way in which notices are sent out, the conduct of the campaign of notification ahead of a meeting, and the issue of a maximum notice period, for example. One would hope that all those issues would be covered by the general rules of the society. Indeed, one would hope that it would not have been registered as a society if its rules did not cover such issues. The membership should ultimately have the power to take action if they feel that the board is behaving inappropriately by, for example, causing excessive delay. The essential point, however, which has been well put, is that we are dealing with third-party contracts and liability of board members. That means that there is a reason to specify the minimum period, and 21 days seems entirely appropriate to allow the democratic debate that must take place before such a meeting should occur.
      As I read the proposal, I imagined the scenario at a special meeting when the vote had been lost. What would occur in a society then? It could face meltdown, although we would have set out rules to allow the process to take place properly. That is outside the scope of today's debate, but, all those thresholds having been set, a board would clearly have to be careful in terms of undertaking the procedure. There is no sense in the clause that we are trying to give the green light to people saying, "Go outside your powers and simply go through the procedure to get support." That would be risky, so we are trying to make the procedure as empowering as possible for the members so that they do not feel, at any point, that they have been bounced through it.
      Ruth Kelly: I congratulate Members on the quality of the debate. My hon. Friend the Member for South Derbyshire (Mr. Todd) set out a persuasive case for his amendment and the hon. Member for Eddisbury (Mr. O'Brien) brought a touch of his experience and history to these matters. I have learned some things in the Chamber today. My hon. Friend the Member for Harrow, West (Mr. Thomas) also brought his experience to the issues, which I intend to touch on in a few moments. My other hon. Friends also made valuable interventions.
      My general principle in working on the amendment with my hon. Friend the Member for South Derbyshire, and on the provisions in clauses 2 and 3, has been to allow industrial and provident societies to benefit from the same freedoms that apply to companies. We have therefore taken companies legislation as our base and mirrored those provisions as closely as possible, where appropriate, for industrial and provident societies. I should perhaps emphasise the words "where appropriate", because I agree with my hon. Friends that, in any particular area, it is important to consider carefully whether exactly the same provisions that apply to companies should equally apply to industrial and provident societies. Of course, it is relevant to consider each and every case, including the 21-day notice period.
      Clause 3 sets out the implications for acts done by a society that are beyond the powers given to the society and its rules. It would allow members of societies to ratify such acts retrospectively and grant relief from any resulting liability to committee members, in each case
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      through a special resolution. The clause goes on to define the procedures for a special resolution. For example, it specifies that the resolution must be
      "passed by not less than 75 per cent. Of"
      members entitled to vote. That mirrors the procedures required in company law for a similar resolution to be passed.
      Company law also requires at least 21 days' notice of a general meeting to pass such a special resolution, and the amendment would make the same provision in society law. I say to the House that 21 days is a minimum protection. The decision is perhaps equally important for companies as for societies in considering a special resolution, so 21 days seems appropriate, but, beyond that, we do not want to be too prescriptive for many of the reasons set out today, particularly by my hon. Friend the Member for South Derbyshire. Those include the diverse nature of societies, how they inform members, their constitutional rules and so forth. As a minimum period, 21 days seems reasonable.
      To return to the point raised by my hon. Friend the Member for Harrow, West in relation to other resolutions that are debated and required minimum notice periods, the debating of such resolutions by societies is extremely important in the example of demutualisation. Indeed, one might argue that it is equally important, although I understand the point made by the hon. Member for Eddisbury that third parties are affected by the issue under discussion today.
      10.45 am
      Other important checks are in place in respect of demutualisation resolutions. For example, two meetings are required, with notice being given before each. For the first meeting, the notice period is left to the society's rules. For the second, there is a minimum of 14 days. One might consider the combination of the two to be more onerous than a 21-day minimum period required for a special resolution under the amendment, so 21 days strikes me as a reasonable minimum for debating such a resolution. I therefore support the amendment on those grounds and agree that we should align the procedures in this area more closely with the provisions in company law. I commend it to the House.
      Amendment agreed to.
      Amendment made: No. 8, in page 6, line 25 [Clause 3], at end insert—
      '(c) in relation to a society whose registered office is situated in one of the Channel Islands, means a society established for charitable purposes only ("charitable purposes" having the meaning given by the law of the Island in question).'.—[Mr. Todd.]

    Clause 9

      SHORT TITLE AND EXTENT
      Mr. Andrew Love: I beg to move amendment No. 9, in page 12, line 4, leave out `Industrial and Provident' and insert 'Cooperatives and Community Benefit'.
      The amendment would give the Bill a new short title, but the important thing is that the change would apply to all Acts of Parliament from the 1965 consolidating measure that brought together all previous industrial

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      and provident societies Acts, right through to the excellent Bill promoted by my hon. Friend the Member for Harrow, West (Mr. Thomas) and carried by the House last year. The amendment's net effect would be to change "industrial and provident" to "co-operatives and community benefit" in all parts of the law. While that change is deceptively simple—people might say that in many ways it is modest—it is fundamental to the modernisation of industrial and provident society law.
      The amendment is probing, because, like my hon. Friend, I am not going to the barricades yet. However, an important principle is involved, which I raised on Second Reading, as did my hon. Friend the Member for South Derbyshire (Mr. Todd) and the hon. Member for Eddisbury (Mr. O'Brien), and it has been touched on again today. I am rather disappointed that it was not taken up in Committee, because we could have had a useful discussion.
      Interestingly, the Bill is called the Co-operatives and Community Benefit Societies Bill. The reason for that could be that, last year, my hon. Friend the Member for Harrow, West introduced his Industrial and Provident Societies Bill, so that title was not available, although I think that a more important principle is involved. That is, of course, the modernisation agenda as it relates to industrial and provident societies, which is reflected in the strategy unit report "Private Action, Public Benefit".
      In that report, the modernisation agenda was endorsed by the Prime Minister himself, who said in his foreword:
      "This report sets out a package of measures which will modernise the law and enable a wide range of organisations to be more effective and innovative, whilst maintaining the high levels of public trust and confidence which are vital to the continued success of the sector."
      I strongly believe that the name change would contribute to a number of things, such as organisational effectiveness and achieving the public trust and confidence that we want to see in this sector of the economy, both of which are referred to in the foreword.
      The strategy unit report was published in September 2002 and the consultation concluded at the end of December. Other Members will comment, I suspect extensively, on that report. It is important to review what that report said about the name change. It is easy to understand why we need a name change.
      Yesterday, when I was thinking about this debate, I realised that I had better look up what "industrial" and "provident" mean. I cannot relive the debates in the House in 1852, but I looked up the word "industrial" and the dictionary definition is "of the nature of industry or productive labour". I tried to associate that with the consumer co-operative movement, with agricultural and worker co-operatives, and even with community benefit societies such as football trusts and housing associations. It is difficult to associate any of those activities with the dictionary definition of "industrial".
      Similarly, the dictionary definition of the word "provident" is "careful in providing for the future". We could argue about that in respect of the provision of pensions, and I suspect that the Government strongly want to get across to people the message that they
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      should look after themselves when they reach senior citizen status, but the term does not have any contemporary relevance to the organisations that are concerned with the law as it stands. It is redolent of a 19th century, Dickensian, Victorian vision. There were visionaries at that time, but these terms are not relevant to the 21st century.
      Claire Ward: For many young people, their main connection with a community benefit society is probably through the new football supporters trusts. For them, that is clearly a community benefit, yet it would have no connection with the concepts of "provident" or "industrial". Would not it be helpful in our approach to the next generation to use terms that they understand and appreciate?
      Mr. Love: I agree entirely with my hon. Friend. It is an immediate turn-off for organisations that are thinking about establishing new bodies and are considering the different structures available to suggest that they form an industrial and provident society. There is no way that young people, or I suspect people of any age, will be attracted by that terminology. We need to move on and find a modern language to reflect what can be achieved by these societies.
      Mr. Levitt: Is my hon. Friend arguing that the sector needs to increase public trust and confidence, because it lacks that? Does he believe that merely changing the name will produce the extra public trust and confidence that I am sure we all seek?
      Mr. Love: The organisations that are formed under industrial and provident society law critically depend on public trust and confidence, so the need to ensure that they have that trust and confidence is a strong priority for them. The reason that I suggested a change in title was more fundamental. I think that it will improve trust and confidence, because it will improve people's understanding of such organisations.
      If we are to modernise the structures, as this Bill does, as the Bill introduced by my hon. Friend the Member for Harrow, West did and as I hope will be the outcome of the strategy unit report, we must also modernise the language that is associated with these organisations. Although there was a 1965 consolidating Act, these structures date back to laws that were passed in 1852 and 1862. We still use those structures as a basis, and we still use the language of that time.
      That language may have meant something at the time, and may have given Victorians and people who lived in the 19th century a vision of what industrial and provident societies were trying to achieve. I do not think that that applies at the present time. I shall take the example of a football trust, which was mentioned earlier. I was involved in the formation of a football trust in Enfield. The old Enfield Town football club has gone through considerable difficulties in the past few years. In an effort to mobilise its support, it decided to set up a football trust. It is an admirable organisation, and is working successfully. I attended meetings, and I put them in touch with the national organisation set up by the Government. When we got down to the nitty gritty of discussing how the trust would be formed, someone said, "Lads, it has to be an industrial and

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      provident society". Hon. Members can imagine that the response was, "What the **** is an industrial and provident society?". It had no relevance or meaning to them. That is the problem that we face.
      The strategy unit report referred to modernisation of industrial and provident society law. A number of issues were emphasised in the report that are relevant to the debate on this amendment. I was involved in the retail co-operative movement, and I remember with dismay that everyone who tried to explain what it was would always start with its glorious 19th century heritage and would not talk about its 21st century relevance. That is an important consideration in this debate about the language.
      That terminology is off-putting. It is not possible to attract people using the language that is current in the laws that cover industrial and provident societies. They have a poor brand image. How do we get people who are trying to form an organisation to consider industrial and provident societies when there is such low public esteem for those bodies? The term is out of date and needs a fundamental overhaul.
      This is a critical issue for important sectors of the economy. It is not just new organisations that are being formed. In significant parts of the economy industrial and provident societies are already of relevance and constitute a majority in that activity. I could talk about the housing or agricultural co-operative movements and credit co-operatives, but I shall use the example of the retail co-operative movement, because it is the one best known to me and, I suspect, to other hon. Members. It has 115,000 staff members, most of whom do not have a clue what an industrial and provident society is. Frankly, if one tried to raise the issue with them, they would be put off by the idea. It has 9 million members, and although they are aware of the caring, sharing difference of co-operatives, as the old brand image used to call it, they do not understand what it is. We must do something about the problem of language.
      The strategy unit report recommended that we set down a definition for co-operatives. As well as using the terms "co-operatives" and "community benefit societies", we should define them.
      When it comes to community benefit societies, we could have the same argument about football trusts. The organisations that I know best are the registered social landlords: the housing associations. They are a big sector of the housing market. In recent years, half a million properties and tenancies have passed from the council sector to the housing association sector. It is rapidly becoming the largest social housing landlord in the country, yet it still uses this completely outdated terminology of industrial and provident society. Let us suppose that someone is trying to persuade a tenant that a transfer from council to housing association accommodation would benefit him or her. That cannot be done in the language of the 19th century.
      11 am
      The importance of comprehensibility is stressed in the strategy unit's report. There is little recognition of the advantages of industrial and provident societies. If they were known as co-operatives and community benefit societies, people would have a much better understanding of what they were. There is also little
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      recognition of the difference between industrial and provident societies and companies. Most people have a vague idea of how a company operates, with shareholders and shareholder value and profits and dividends; but they have no real understanding of the nature of an industrial and provident society. We must also do something about the weak branding and the negative image. A critical factor in that is modernisation of the language.
      Industrial and provident societies face other problems in the marketplace: the lack of protection for their assets, for instance, and the threat of demutualisation, which is always there. They also have difficulties in raising money. I used to be a member of a revolving loan fund for co-operatives. Co-operative after co-operative used to tell us of the impossibility of raising money from bank managers or any other financial organisations, because no one understood what co-operatives were all about.
      A good deal of complexity is involved in industrial and provident societies. My hon. Friend the Member for Harrow, West has concerned himself in recent years with the problems of registration—the cost, and all the time and effort that must be put in.
      Mr. Lepper: My hon. Friend mentioned the brand image and the use of the word "co-operative". Is not a prime instance of that word's attractiveness the success of the Co-operative bank over the past few years? It has assets of £5.5 billion and more than 4,000 staff, and has gone from strength to strength. Many people have moved their accounts to it because of the appeal of the name, and the sense of community benefit and ethical trading that they gain from it.
      Mr. Love: The Co-operative bank is indeed a brand leader in its financial services sector. It established free banking some time ago, and it continues to set standards for the rest of the industry. I also pay tribute to the Cooperative Insurance Society, which works closely with the bank. It has done much, in a variety of ways, to establish a more ethical stance for financial services organisations—and the word "co-operative" is central to its activities. That underlines my point that if we are to improve the image we must change the language. The current image engenders a lack of trust and confidence because of the outdated language.
      Costs arise because of the way in which industrial and provident societies are composed, and because not enough people choose them rather than companies. As I have said several times today, a level playing field must be created between all the different organisations in the economy: that is crucial to the future of industrial and provident societies. It is easy to see why so many new companies are formed each year and so few industrial and provident societies. In fact that would probably happen anyway, but I think many people who are not opting for industrial and provident societies now would do so if we only modernised the language.
      The company law review has been mentioned. There have been a number of Companies Acts in recent years, but since 1965 there has been only one piece of industrial and provident society legislation, initiated by my hon. Friend the Member for Harrow, West. Let us hope that this will be the second. Both, however, have been

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      instigated by private Members, and have been given very little time in comparison with measures relating to company law and law reform, and indeed the review with which we shall be presented in the near future.
      I pay tribute to both my hon. Friends for their Bills. I am particularly impressed by this Bill. The proposals relating to assets in clause I are at the cutting edge of modernisation of industrial and provident society law. If the legislation is to succeed, however, we must also be at the cutting edge of linguistic change. Not only will my amendment take the language of industrial and provident societies into the 21st century. but; "Co-operatives and Community Benefit" will give people a more accurate picture of what is entailed in the establishment of such societies, what they are and what they do. The sector will also become much more relevant to the economy, and, hopefully, will be given an impetus to involve itself in different parts of the economy.
      I believe that my proposed new title is both user-friendly and public-friendly.
      Mr. Stephen O'Brien: It comes as no surprise to me, as a fellow member of the Institute of Chartered Secretaries and Administrators, to hear such a fine speech—entirely in order, or you would have pulled him up, Mr. Deputy Speaker—from the hon. Member for Edmonton (Mr. Love). He spoke for even longer than the Bill's promoter.
      The hon. Gentleman said that this issue was mentioned on Second Reading. As he will recall, it was very much mentioned in Committee, and as he knows, I support him. I too have been ably supported by the Co-operative Group. I thank Peter Hunt, of that organisation, for his briefing—and, not least, I thank my constituent Mr. Martin Beaumont, the chief executive, for his.
      Without wishing to go down the highways and byways of the great historical treatise that we have been just treated to, it would be highly desirable to change the name to the Co-operatives and Community Benefit Societies Bill. In fairness, it was touched on in Committee. Despite the extraordinary thoroughness of the presentation by the hon. Member for Edmonton, it is, as he said, only a probing amendment. That said, it was, to say the least, an exceptionally good exploration of the subject.
      It would be wrong not to record that the Minister said in Committee that the Government were not opposed in principle to the idea but that there were genuine technical issues about changing the name of legislation that belonged to a family of legislation with a long history. With the best will and intent, and the unquestioned skills not only of parliamentary draftsmen but of all the advisers with a view on these matters who work in Government Departments, it is possible, given all the cross-references, notwithstanding the technology available these days through electronic reading, to miss something and have difficulty in achieving the consistency required.
      It is certainly a worthwhile project. It could be used as a model of how to try to update the titular effect of Bills, equivalent to the tax law rewrite. It might be useful to review what is on the statute book and where titles can
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      be changed, not least because we would realise how much law could be repealed. It would be desirable to make the statute book less long.
      In looking at the new name for the Bill, I could not help but feel that there was a certain equivalence when news was brought to me on the Front Bench this morning that the right hon. Member for Hamilton, North and Bellshill (Dr. Reid) has been appointed Leader of the House. He had a great record—I pay tribute to him—for being a man of communities benefit when he was Secretary of State for Northern Ireland. I like to think that we can all benefit from the community of interest that he will seek to introduce, in one of his new roles, in safeguarding the interests of all hon. Members. Both I and my party offer our congratulations on his transfer.
      When I looked at the other aspect of the recommended name, the co-operative side, I was reminded of the announcement of the new Labour party chairman, who has a particular—
      Mr. Deputy Speaker: Order. I think that the hon. Gentleman has paid tribute enough for the moment.
      Mr. O'Brien: I might possibly have to crave your indulgence, Mr. Deputy Speaker, because I feel that I have left Labour Members on tenterhooks as to who the new chairman of their party is—
      Mr. Deputy Speaker: Order. I am sure that hon. Members and the House as a whole are more intent on seeing the successful completion of this debate than on any other consideration.
      Mr. O'Brien: I will do nothing more than allude to the fact that the right hon. Member for Makerfield (Mr. McCartney), a man of the most co-operative style, is the new chairman of the Labour party.
      I am happy to say that I and indeed my party, as part of the consensual approach that has been adopted throughout the Bill's proceedings, favour the idea of the change of name, if it can be achieved in a technical and thorough manner. It is, therefore, appropriate that the hon. Member for Edmonton has suggested that the amendment is a probing one. It would be difficult today to give a conclusive view for the Government; the Minister mentioned the difficulty when we looked at the matter in Committee. With a flag that we would like the proposal to move forward and hope that there will be a thorough exercise, at this stage of the Bill we are keen that the hon. Member for Edmonton should seek to withdraw the amendment once we have had an opportunity to explore the issues.
      11.15 pm
      Mr. Gareth Thomas: I hesitate to gatecrash the love-in between the two members of the Institute of Chartered Secretaries and Administrators. I congratulate my hon. Friend the Member for Edmonton (Mr. Love) on the way in which he has introduced the amendment and the hon. Member for Eddisbury (Mr. O'Brien) on initiating a discussion on the issue in Committee. I, too, accept that this may have to be a probing amendment; some miserable lawyer somewhere may find reason to object to what is an entirely sensible provision, which, as my

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      hon. Friend said, is recommended in the Government's strategy unit report into the charitable and not-for-profit sectors.
      Hon. Members who have had the opportunity to introduce a private Member's Bill will recognise that many members of their constituency party often take a profound interest in the subject that they seek to take forward. Last year I approached a number of my party members and explained that I was introducing a Bill to amend the Industrial and Provident Societies Act. I was disappointed somewhat by the blank look on the faces before me. Having had representations from those party members to ban fox hunting or to amend various other legislation, there was some disappointment that I was seeking to do something to legislation that they had not even heard of. That gives some indication of the problems that the amendment seeks to deal with.
      Once I had got over that disappointment and was researching the types of organisations that would be affected by the legislation, I discovered that a series of organisations such as rugby clubs and women's institute country markets were industrial and provident societies. When I got in touch with my local women's institute country market and my local rugby club and asked "Are you a company or an industrial and provident society?", they had no idea what an industrial and provident society was. I only discovered that they were registered under that legal form in discussion with their parent bodies. That shows some of the difficulties that a failure to modernise the terminology to describe this form of community organisation causes that sector. It is long overdue that we bring into the 21st century the terminology that we use to describe community businesses.
      The Government's intention to legislate to create a community interest company is an entirely sensible, albeit separate approach, to other forms of community businesses. I hope that we will hear from my hon. Friend the Minister a similar commitment to modernise the legislation in this way.
      My hon. Friend the Member for Edmonton has done the House a service by seeking in his amendment to restate the case for sensible legislative change. I hope that, if we cannot reform the legislation in this way now, we will have an early commitment from the Minister to initiate the change that we want to see.
      Ruth Kelly: I congratulate my hon. Friend the Member for Edmonton (Mr. Love) on the way in which he introduced his amendment. As he has said, he has shown a consistent interest in this matter. I am aware of his concern about the use of the term "industrial and provident society", particularly the points that he made about whether the term is outdated and well understood, whether it should be replaced by what some regard as more modern, more descriptive terminology such as co-operative and community benefit society. The strategy unit report looked at the issue and concluded that the name "co-operatives and community benefit societies" should be retained and that the umbrella term, industrial and provident society, should no longer be used.
      As I said in Committee, we examined the responses to the public consultation on that report. I hope to make our response to those recommendations soon. Nothing
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      in the legislation requires societies to call themselves industrial and provident societies, but it does require that the title of every society must end in the word "limited". The term "industrial and provident society" is used in the title of the relevant Acts and in some of the substantive provisions of the Friendly and Industrial and Provident Societies Act 1968 and the Industrial and Provident Societies Act 2002. The proposed amendment would not change the names of the previous Acts or the substantive provisions in which the term "industrial and provident society" occurs. Societies would continue to be registered under the Industrial and Provident Societies Act 1965.
      I recognise that part of the issue is presentation and branding, and how the movement and individual societies wish to present themselves. My hon. Friend the Member for Edmonton made a powerful case about the members of football clubs and whether they see themselves as members of industrial and provident societies. Given the case that he and others have made, we considered whether we could introduce an enabling provision to facilitate a change in the names of industrial and provident society Acts and to amend all other legislation that contains references to those Acts. Unfortunately, we decided that such provision was outside the scope of this Bill. Moreover, changing the names of those Acts would probably be unhelpful at this stage. It would apply a collective title to Acts that individually bear different titles and that would make the legislation less transparent and more difficult for societies to navigate. For those reasons, I urge my hon. Friend to consider withdrawing his amendment.
      Mr. Todd: Unfortunately, it has fallen to the Minister to give the boring and disappointing answer to this interesting debate, but her response was not unexpected. She has done her duty. It is worth reflecting for a moment—I still fancy myself as a historian—on the reasons for choosing the term "industrial and provident society" to describe that sector of activity.
      I have mixed feelings about the amendment. It is logical, in the modern day, to describe the movement in a way that is much more recognisable to ordinary individuals, especially—as my hon. Friend the Member for Watford (Claire Ward) said—to young people, who would not necessarily be aware of the background of those organisations. However, I am always struck by the extraordinary endeavours of those who founded, in Victorian times, the movement that we are discussing today and—as my hon. Friend the Member for Edmonton (Mr. Love) mentioned—the respect that we owe to people who struggled to set up organisations that provided a wide range of benefits for working people at a time when the state did not so provide and they relied entirely on their own endeavours through voluntary groups.
      The original legislation in 1852, which started the process, was moved by the then hon. Member for Shrewsbury. I cited that Bill's preamble on Second Reading, but not everybody was here then. It states:
      "Associations of Working Men have been formed for the mutual Relief, Maintenance, Education and Endowment of the Members, their Husbands, Wives, Children, or Kindred, and for procuring to them Food, Lodging, Clothing, and other Necessaries, by exercising or carrying on in common their respective Trades or Handicrafts."

      1193
      That is a good description of industrial and provident societies as they operated at that time. For example, hon. Members should note the reference to "working men". Sexism was automatic at the time and we cannot criticise people for using in 1852 language that we would not accept now. The legislation was designed specifically to benefit working people, who did not have such services available through any other means and who had sought to come together, often in the face of considerable obstacles, to create those institutions. The reference to industry—also contained in the reference to "Trades and Handicrafts"—makes it clear why the word "industrial" was chosen at the time.
      The word "provident" is not commonly used today, but the word "prudent", which is commonplace in the Treasury, has had a welcome revival, and the same might happen to "provident". It has the clear meaning of making sensible provision for future needs, which is clear in the original purpose of the legislation.
      The movement moved on and did not remain confined to working people. Any person from any background, as confirmed by the examples given by my hon. Friend the Member for Harrow, West (Mr. Thomas) and others, can now become involved in such societies and seek to further a variety of goals that the Victorians never conceived of. I defend the use of the language at the time, because it was appropriate and clearly defined the organisations that existed in those days. I also salute those people who wisely provided the legislative framework to permit such institutions to carry on their business safely in law at that time, but I accept the arguments advanced by my hon. Friend the Member for Edmonton. He pointed out that whatever the benefits and merits of the description then, it does not apply in present circumstances.
      I note the Minister's words with regret, albeit tinctured with some relief that we shall preserve in the legislative framework references to farsighted behaviour by hardworking individuals. The profound implications of the judgments that they made show that we owe them great credit. I hope that my hon. Friend will withdraw his amendment, but I respect his reasons for moving it.
      Mr. Love: I have always thought of the Chancellor as a modern-day Rochdale pioneer, although I raise that point with some trepidation in case the hon. Member for Eddisbury (Mr. O'Brien) jumps up to tell us that we have someone new in that post. I wish to correct an earlier mistake and pay tribute to the founders of the co-operative movement and the community benefit movement, including the Rochdale pioneers of 1844 and J. T. W. Mitchell—a person of very humble origins —who was the chief executive of the Co-operative Wholesale Society in 1895 and took part in an investigation by a Committee of the House of Commons into retailing. His comments and his vision for the future are due great respect, even today.
      Mr. Lepper: In my hon. Friend's catalogue of pioneers of the co-operative movement whom he congratulates, I am sure that he would want to include Dr. William King and those others who in the early 1820s, some 20 years before the Rochdale pioneers, set
      1194
      up a co-operative retailing shop and a working men's institute based on co-operative principles in West street in my constituency.
      11.30 pm
      Mr. Love: I do of course pay tribute to Dr. William King. I also pay tribute to George Mudie—not the Member of this House—who set up the London Co-operative Society. Some in Scotland—looking round the Chamber, I can see that there are no Members from Ayrshire here—lay great claim to the Fenwick weavers having been the originators of the co-operative principle. Whoever it was, I pay great tribute to the endeavours of all the people who created the movement that we have today.
      I freely admit that my amendment has some shortcomings, as the Minister said, but it allows me to refresh the House on the importance of changing the language in this respect. I take note, as we did in Committee and on Second Reading, of the fact that the Treasury is looking carefully at the strategy unit report and will bring forward recommendations resulting from that in the near future. I also take note of the positive way in which the Minister responded to my amendment. I can feel some sympathy for its terms, although I recognise that it does indeed lie outside the scope of the Bill. I hope that the Minister and Treasury officials will give serious consideration to the strategy unit report and to its recommendations in general, but in particular to the recommendation that we should change co-operatives and community benefit societies. I hope that they will take note of the sentiment of this House, which has been strongly expressed on several occasions, not only by me, but by Back-Bench Members of all parties. Given those considerations, I hope that the Minister will make proposals that reflect them.
      On the basis of the assurances that she has given, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Order for Third Reading read.
      11.33 pm
      Mr. Todd: I beg to move, That the Bill be now read the Third time.
      It is pleasure to introduce the Third Reading of the Bill, which has occupied a significant amount of the time of the House and of hon. Members who served on the Committee.
      Let me briefly refresh hon. Members' memories as to the key purposes of the Bill and its implications. The first purpose is to remove arcane obligations on societies on the execution of agreements of various kinds. For example, clause 5 relates to the use of society seals, the way in which they are kept and operated, their function and indeed the necessity of having them at all. That has already been commended by many as a means by which a number of societies will be able to make significant savings in terms of money and administrative time in the course of their activities. It is a modest change, but one that has beneficial implications.
      The second purpose is the protection of business partners of societies should they inadvertently or—as we discussed earlier—deliberately breach the objects of their constitutions. We all accept that it is important

      1195
      that those who have business dealings with societies should have equivalent protection to those who deal with a company and should not be caught out by someone being able to point out that the society has traded outside its objects. In that case, the contract struck is ultra vires, which places that entirely innocent partner in the position of potentially losing significant sums of money. Those provisions are covered in clauses 3 and 4. Particularly as a result of additions to those clauses, the Bill has been dramatically extended from the Bill that received Second Reading. I had imagined that if the House continued to have faith in it and it passed through another place I would have a relatively modest Little package of paper to present to people and say, "This private Member's Bill has been passed partly through my endeavours." It will now be a slightly larger package of paper because the amendments, particularly on this matter, have lengthened it considerably. To be fair, they set out the protections in much more detail and therefore perhaps with greater legal protection for those who are covered.
      The third protection, which is a new element that was introduced in Committee, but is certainly valuable, is to ensure that societies that are also charities make clear that status to those with whom they form contracts. That is because those contracts will not be protected in same way as those that are made by societies that are not charities. The key element here is the balance of protection involved. It is right that the membership of a society who intend further to extend their own benefits should be treated in the same way as a company in terms of the protection of third-party contracts. However, that is not so in the case of a charity that seeks to serve the interests of third parties. It is clear in law that the assets and objects of that charity should be protected with greater rigour than is obliged in the case of companies or—after the passing of the Bill, if that is willed—co-operatives and community benefit societies. It is vital that the fact that a society is a charity is made crystal clear to anyone who seeks to make a contract with it. That effectively challenges the individual or body making that contract to look carefully at the objects of the charity to ensure for themselves that they are engaging in a contract that lies within the scope of the charity's objects, because they will not enjoy the equivalent protection that they would if they had been dealing with a community benefit society or a co-operative that was not a charity. Clause 2 covers that at some length. It is an important point for a small sector of activity.
      The final element of protection is the framework to give community benefit societies new rights to bind their assets and the proceeds of any assets that are disposed of to the purposes of the society, albeit that such purposes may be carried out through another vehicle. It is recognised that it may be appropriate to change the framework through which the object is delivered, provided that the same obligation applies to that new vehicle: in essence, that the assets may not be disposed of to those who happen to be members of the society at that time, but must be used for the purpose involved. On Second Reading, in Committee and on Report, reference was made to the importance of that provision; for example, to community benefit societies that are football trusts. Although the precise purpose may have become redundant, it is important that the society's
      1196
      original aim should continue to live in its assets and should be transferred to another society with similar aims. That is the purpose of the Bill.
      The implications of the Bill are that it would bring the relevant legislation broadly into line with equivalent company law. It would make it easier for societies to carry out the normal business of making agreements, contracts and conveyances with other bodies, without an additional bureaucratic burden or unintended risk. It could make societies slightly more competitive than they are currently; it would save them some time and money and would make it possible for them to pursue their interests more effectively and speedily.
      The asset lock clause lays the foundation to allow the implementation of one of the recommendations of the strategy unit's report, "Private Action, Public Benefit", which has been mentioned several times this morning. Incidentally, that report has received as wide a range of accolades for the quality of its thinking and the comprehensiveness of its recommendations as any report from a public institution for some years. It is pleasing that part of the Bill would implement an aspect of its recommendations.
      Lack of an asset lock provision could prevent the safe use of a community benefit society model in some circumstances; for example, in public service provision. I have long argued that some services are better delivered through a voluntary sector model, or at least one that engages with the customers or residents who use that particular service. For example, a particular village may have a direct personal interest in the way that its services are run, but there should be public support for such services, perhaps through the transfer of an asset and certainly through the provision of public money. If one were to follow that path, it is critical that there is a way of locking those assets into that particular purpose. It would be wrong if those who happened to be residents or qualifying members of a particular society were able to say, "Thank you very much, we'll take the proceeds and use them for whatever we have in mind or for our own purposes", through using the escape clauses—turning into a limited company by guarantee—that were discussed on Second Reading. The Bill thus affords a valuable opportunity to use community benefit societies as a means of delivering public services with the benefit of public assets and public money.
      I shall refer briefly to my personal history. I served on Cambridge city council for 12 years, three of them as leader, and always held the view that one should try to find ways of engaging with our citizens. Often, in Cambridge, they were willing to be engaged; they did not need much prompting. My hon. Friend the Member for Cambridge (Mrs. Campbell) is not in the Chamber today, but I am sure that she would agree.
      As a member of the council, I wanted to provide ways for citizens to exercise more direct control. Cambridge is a city with a profusion of voluntary sector, charity and industrial and provident society activity. It would have been marvellous to have found ways safely to transfer some services to some local residents through the means proposed in the Bill. However, one could not do that then; the Bill would provide the basis for such judgments.

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      I willingly thank the Treasury team for its help with the Bill and in preparing substantial additions to strengthen it. Through their help in preparing the definitions in clause 1, the Government have set out the means by which the asset lock protection would work after appropriate detailed consultation. They rightly provided that there should be an obligation to consult and set out the type of issues on which consultation would be required. The Bill would allow the implementation of the asset lock through regulation after consultation. It is not the perfect model; I should have preferred to include rather more such definition. However, clause 1 is sufficiently constrained to reassure those who feel that the measure would be an open door for a variety of procedures. It is quite restrictive and obliges the Government to draft the regulations so that they clearly define how an asset lock would work and its implications for the community benefit society that would use it. The simple model would be where new community societies chose to adopt an asset lock at the start of their activities, while the more complex model would be where an existing community benefit society chose to adopt the asset lock and persuaded its existing membership of the need to follow that approach.
      Those who have followed the Bill with interest will want to monitor the Government's progress in drawing up the necessary regulations. Obviously, the timing will be dependent on the officials and Ministers who guide the process; nevertheless, I am encouraged by the enthusiasm and commitment shown by the Treasury so far. It indicates a firm intent to proceed at a reasonable pace.
      In conclusion, this is a modest Bill. As the person who was first in the ballot for private Member's Bills, I had a large number of Bills suggested to me—some of which could certainly not be described as modest. However, one of the several provisos that I made in deciding which Bill to promote was that I wanted a Bill that would not restrict freedoms. In some circumstances, restricting freedoms is understandable—and a number of Bills on the list this year do so—but I wanted not to restrict but to extend freedoms, and this Bill does that. It provides greater protection for existing organisations to carry out their business more effectively and it provides a framework for a flowering and extension of the community benefit societies movement. It will have wider implications beyond our conceptions.
      One of the main reasons that I am fond of this Bill—and the reason that I quoted the preamble to the 1852 Bill—is that, sometimes, from tiny little acorns greater oaks may grow. It may well be that making it easier for community benefit societies to operate may have implications for their future kind, range and scale that are wider than we can conceive of now. With those thoughts, I commend the Bill to the House. I very much hope that it will be supported.
      11.51 am
      Mr. Bailey: I congratulate my hon. Friend the Member for South Derbyshire (Mr. Todd) on promoting this Bill and on surmounting the twin hurdles of convincing the Treasury and sufficient Members of Parliament to attend for its consideration to allow it to get as far as it has. I hope, of course, that it will reach a successful conclusion.
      1198
      The hon. Gentleman was being a little too modest when he said that this was "a modest Bill". I wonder whether the pioneers of the co-operative movement in the 1840s realised the full significance of the structure that they had devised with their particular co-operative society and whether they realised the impact that it would have not just on the economy and retail structure of the country, but on its social provision as well. This ostensibly modest proposal could have the most profound consequences. I will deal with those in a moment.
      My own long-standing association with the co-operative movement is fairly well known; I mentioned it at Second Reading. The issues that the hon. Gentleman has raised, and that the Treasury has said that it will try to deal with, have been of enormous concern to the movement for a long time. I welcome the amendments, which have been debated at some length today. They strengthen the Bill. I also welcome the Minister's commitment to consider creating a level playing field between company law and industrial and provident society law. From experience of talking to practitioners in the co-operative sector, I know that that is a huge issue for them.
      It is gratifying that at last this House is beginning to debate the significance and relevance of co-operative legislation —of which there is now a greater public perception. For too long, debate on our economy and public service provision was carried out in terms of the private sector or the public sector as defined by state or local government provisions. The co-operative and mutual sectors are a huge part of our economy, but that was largely unacknowledged. The hon. Member for Edmonton (Mr. Love) said that, when he contacted local organisations, they did not actually know whether they were an industrial or provident society or company. That reflects the lack of public profile that this form of organisation used to have. However, the situation is changing, partly as a result of private Members' Bills.
      Back in the 1980s and early 1990s, demutualisation procedures had a devastating short-term effect on some sections of the mutual movement. However, what happened demonstrated publicly the scale of the assets that those organisations and co-operative societies had. It also forced them to publicise the benefits of this particular form of ownership.
      At the same time as people were becoming more aware of the benefits of this form of ownership, the incentive to create new societies was much diminished by the absence of protection for the assets of societies and organisations such as building societies and so on. Possible providers and backers of such societies were deterred by the absence of any long-term protection of those assets. The Bill will provide a mechanism by which that obstacle to future development can be removed, and it has enormous potential.
      I wish to look very briefly at some of the areas where the Bill has potential. It offers potential for some charities perhaps to adopt a different form of legal structure to fulfil their objectives more adequately. Water utilities have been discussed in the past, as has the health and social services sector, but I will not stray into the debate on foundation hospitals now.
      In particular, sports clubs and football clubs often have huge and deep community interests, but they are wrapped up in clubs that operate in a legal framework

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      that makes them accountable only to relatively small numbers of shareholders, so there is potential for conflict. In some cases, that has led to individuals taking over football clubs and, basically, asset stripping them regardless of the impact on local communities and the long-standing loyalties that huge numbers of people in those communities have to their clubs.
      This model of provision offers enormous potential. My hon. Friend the Member for Watford (Claire Ward), who is not in her place at the moment, mentioned football trusts, but the formation of football trusts and the Bill can work together to give added protection to such organisations. That is very much in line with the concerns of people in their local communities and will do a lot to promote the concept of co-operatives and community societies in a way that enhances their attractiveness to a huge section of the community.
      I am conscious of the fact that other hon. Members wish to speak, so I will draw my remarks to a conclusion by saying that this so-called modest addition to the range of options available to organise societies and companies may have a profound effect in the future, and we should be extremely grateful to my hon. Friend the Member for South Derbyshire for piloting the Bill through the House of Commons.
      11.57 am
      Mr. Gareth Thomas: I am grateful to the House for the opportunity to congratulate my hon. Friend the Member for South Derbyshire (Mr. Todd) on the way in which he has piloted the Bill through its various stages in the House thus far. He has demonstrated an excellent grasp of the subject matter, which has its origins in the 19th century, as we said earlier. He has effectively consulted the organisations that use the industrial and provident society legal form and, perhaps most importantly, he has negotiated the Bill's passage through the House of Commons with great skill. Given the many obstacles that can trip up private Members' Bills, he deserves particular credit for that success.
      I welcome the Bill. I particularly welcome clause I as a further guarantee against demutualisation. Unlike my hon. Friend the Member for West Bromwich, West (Mr. Bailey), I think that foundation hospitals are an interesting example to touch on briefly in the context of clause 1. By the time that the Bill is passed by the House of Commons and the other place —I hope that that will happen—the House will still be considering the foundation hospitals legislation, which I warmly support. Whether foundation hospitals could use the industrial and provident societies legal form is worthy of debate, perhaps not now, but certainly in considering the legislation that my right hon. Friend the Secretary of State for Health may introduce in due course.
      I pay tribute to the way in which Ministers have co-operated with my hon. Friend the Member for South Derbyshire, but I should like to flag up some unfinished business in the reformation and modernisation of the legislation that governs this sector. In Committee, we touched on audit and accounting requirements for industrial and provident societies. The most pressing problem is that societies wishing to publish interim accounts must undertake a full audit, with all the associated costs that accountants charge. Companies,
      1200
      by contrast, can simply publish interim accounts and declare that they are unaudited, which is a major anomaly. The Co-operative Group, perhaps the largest industrial and provident society, estimates that producing half-yearly interim accounts costs it about£0.25 million. The Midlands Co-operative Society, a smaller industrial and provident society, estimates that it costs £60,000 per annum to produce interim accounts, and the Colchester and East Essex Co-operative Society estimates that it costs about £30,000 a year.
      It is clearly unreasonable to place more onerous requirements on community businesses that compete with companies that are not under the same requirements. The issue is becoming increasingly urgent, and Ministers need to address it. My hon. Friend the Financial Secretary acknowledged its importance in Committee and in response to my earlier intervention, so I hope that people who work for her will redouble their efforts to provide her with a solution to the problem. Another problem is the exemption from audit requirements for societies with a small turnover. Companies with a turnover of less than £90,000 are exempt from audit, but those with a turnover between £90,000 and £350,000 need an accountant's report. By comparison, since 2000, any companies with a turnover of less than £1 million can gain exemption from the cost of any audit or accountant's report. Again, there is a major anomaly in the audit requirements for smaller societies compared with similar sized companies, which needs to be addressed.
      My hon. Friend the Member for Edmonton (Mr. Love) has flagged up the fact that the Companies Directors Disqualification Act 1986 does not apply to industrial and co-operative societies. If we are modernising legislation, we must recognise that industrial and provident societies, just as much as companies, can have rogue directors, and we need to address that issue. Limits on investments were touched on briefly—they, too, need to be addressed as a matter of urgency. Industrial and provident societies are permitted to take some investments from their members, to allow much-needed capital injections into those societies. At present, there is a limit in the legislation of £20,000 maximum per member. That was a sensible limit when it was introduced, and was designed to ensure that no individual shareholder member of a society had undue influence over it, thus reinforcing societies' democratic nature. However, community businesses sometimes have difficulty raising the capital that they need for their investment programmes. Indeed, that was recognised as recently as last week, when the Treasury, the Department of Trade and Industry and the Home Office jointly announced a consultation on the community interest company, another model for community businesses in future, which will be able to attract investment so that it can operate for the benefit of the community, with no £20,000 limit on its investments. Ministers accept the need for a level playing field so that industrial and provident societies are on an equal footing with companies and other mutual organisations, but that limit is another issue that needs to be sorted out as a matter of urgency.
      Lastly, I take Ministers back to the issue of the powers of the regulator. Again, the regulator is an important check and safeguard for society members and for those

      1201
      seeking to engage with industrial and provident societies. As we heard on Second Reading and briefly touched on in Committee, the regulator's powers in relation to industrial and provident societies are not as wide as they are for companies. That is an important area where modernisation is needed.
      My hon. Friend the Member for South Derbyshire has done the industrial and provident society movement a great service by promoting the Bill, ending for many the scourge of demutualisation and modernising the way in which ultra vires matters and matters relating to the SIB are dealt with. I congratulate him again on the way in which he has piloted his Bill through the House and I wish it a fair wind through the other place.
      12.5 pm
      Mr. Levitt: I was inspired to seek to catch Mr. Deputy Speaker's eye in the debate because of some words that I read in Hansard, which defined mutualism as
      "a desire for more control of our lives; recognition that membership and involvement can add quality to service; and acceptance that services for a community can be best managed by that community."—[Official Report, 31 January 2003; Vol. 398, c. 1114.]
      Sagacious words from the speech of my hon. Friend the Member for South Derbyshire (Mr. Todd) on Second Reading. Wise words always come from Members of Parliament representing Derbyshire, as we know.
      It is an opportune time to consider these issues in relation to the voluntary sector, first, because the Home Secretary has proposed a charities Bill; secondly, it is time to review the compact of understanding that exists between Government and local government on the one hand and the voluntary sector on the other, as regards the delivery of services; and thirdly, because of the strategy unit report, "Private Action, Public Benefit", which has been mentioned by other speakers. The Bill allows for charitable purposes to be achieved by means that would normally be in the province of business. The 10-point definition of charitable purposes suggested in the strategy unit report is a sensible analysis and clarification of the legal position.
      At present services are provided by three different sectors. We can visualise them as a triangle. At one corner is business, which uses the market, has a profit orientation and is traditionally owned by the few. At another corner is Government, operating by means of legislation and public spending, and constrained by democratic accountability at local and national level. At the third corner is the voluntary sector, including the co-operatives and mutuals, with a huge variety of types of provision. There are about 600,000 organisations, including 180,000 registered charities, in the voluntary sector, but for reasons of brevity, I shall not list them. In the past those three sectors viewed each other with suspicion.
      Now let us consider another triangle, with each of its points between two points of the first triangle, giving us a six-pointed star. We have arm's-length companies in the space between business and Government. An example is the one being used in the housing sector. We have "compact" partnerships between Government and voluntary service, and we have the new concept of charitable companies operating in the section of the model between business and the voluntary sector.
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      The compact is
      "a memorandum of understanding between national and local government and the voluntary sector, defining co-working practices in a way that neither demeans nor exploits the voluntary sector, which has much to offer to the delivery of public service."
      I quote from my article in The House Magazine charities supplement last week. I commend the whole article, of course, as well as the article by the Charities Commission, which welcomes the strategy unit report.
      The model of the six-pointed star allows charitable companies to have a social purpose, to operate on a not-for-profit basis, to involve people and to have devolved and wider ownership, but at the same time to have business attitudes to delivery, planning, trading, efficiency and financial stability. That is extremely important. On trading in particular, it is necessary to clarify the law and allow voluntary sector organisations and charities to get the benefits as well as the protection that they need in order to trade effectively and to promote their cause in that regard.
      The strategy unit report anticipates the development of community interest companies and charitable incorporated organisations, both of which are very much in line with the Bill. By creating the idea of the charitable company and ensuring that there is a continuum, we can ensure that three different sectors no longer compete against each other and vie with each other generally in the provision of services. Instead, there will be a continuum in which one merges into another. By breaking down the isolation between business, government and the voluntary sector, we can only gain from the achievements of such organisations and develop charitable purposes still further.
      I believe that those provisions, along with those in my hon. Friend's most excellent Bill, will benefit the whole community for the future.
      12.11 pm
      Mr. Lepper: I am glad to have this brief opportunity to add my congratulations to my hon. Friend the Member for South Derbyshire (Mr. Todd). The fact that he chose to introduce a Bill relating to co-operatives after having drawn the No. 1 spot in the ballot for private Members' Bills this year is a sign of the strength of the revival of interest in the co-operative and mutuals sector. I pay tribute to him for that and for the way in which he has guided the Bill through a process that can often be strewn with obstacles for a Back-Bench Member of Parliament.
      In the co-operative and mutual movement, we often spend a lot of time talking about our history. Indeed, we have talked a bit about that history today, and I shall do so a bit more, if I may. I have already referred to Dr. King and his pioneering efforts back in the 1820s, but it was also in Brighton that Peter Kropotkin was inspired towards the end of the 19th century to write "Mutual Aid", partly as a repost to the popularised Darwinian theories of individualism that were so dominant at the end of the Victorian era. It is perhaps no coincidence that when a group of 30 or so organisations operating on co-operative and mutual principles got together five or six years ago to act more cohesively in the Sussex area, they decided to adopt the name "Mutual Aid" for their organisation, which took the form of an industrial and provident society. I am glad to say that they were supported by the co-operative retail group in their activities.

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      In the past few years, as my hon. Friend the Member for West Bromwich, West (Mr. Bailey) has said, partly because of attempts to demutualise building societies and attacks by carpetbaggers on the Co-operative Wholesale Society, we have seen the co-operative and mutual movement reviving and galvanising itself. It has done so not only because of the need to protect, but because of the need to look to the future. In the past year, two Bills on such issues have been introduced—those of my hon. Friend the Member for Harrow, West (Mr. Thomas), to whom I pay tribute as president-elect of the Co-operative Congress for the next year, and my hon. Friend the Member for Edinburgh, North and Leith (Mr. Lazarowicz). Both those Bills dealt with aspects of co-operative and mutual organisation.
      I am proud of the record of this Labour Government in supporting co-operatives. Mention has already been made of Supporters Direct, which was established with funding from the Department for Culture, Media and Sport, and it was my right hon. Friend the Prime Minister who set up the Co-operative Commission a couple of years ago to consider the future of the co-operative movement. In public service provision and well-known examples such as those in Bristol and Greenwich, we can see how co-operative forms of organisation are making services more responsive to the needs of those who are using them. My hon. Friend the Member for Harrow, West rightly suggested that the principles of community benefit societies might well have a part to play in the organisation of foundation hospitals.
      I congratulate my hon. Friend the Member for South Derbyshire on his Bill and I hope that it completes its remaining stages. It is part of the welcome revival of interest in co-operative and mutual principles that I am sure will now go only from strength to strength.
      12.15 pm
      Mr. Stephen O'Brien: May I draw attention to my entry in the Register of Members' Interests? I am a member and fellow of, and a parliamentary advisor to, the Institute of Chartered Secretaries and Administrators. My spouse and I are honorary life members of the Winsford Constitutional and Conservative club, which is encompassed by the Bill's provisions.
      I reiterate my congratulations to the hon. Member for South Derbyshire (Mr. Todd) on not only coming first in the private Member's Bill ballot, but on promoting a wholly worthy Bill, which will be effective due to our considerable deliberations during its passage. It will be greatly welcomed by co-operatives and community benefit societies. They play an important role in the voluntary sector, which is supported by hon. Members from all parties as being integral to the way in which we in this country live our lives and as part of the essential culture of a civilised society as defined in a democracy under the rule of law. I have taken pleasure in the way in which we gave the Bill's provisions a good airing on Second Reading on 31 January and in Committee on 18 March, and it would be inappropriate to summarise all those arguments now, not least because there are other Bills to be considered today and we should allow them that chance.
      The official Opposition take great pleasure in being fully supportive of the Bill's intent. I was interested to note that the Liberal Democrats indicated their support
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      on Second Reading, although we have heard little from them in this debate. Plaid Cymru also supports the Bill, so it is true to say that it has all-party support. The original Bill as drafted by the hon. Member for South Derbyshire had the great merit of brevity.
      Sir Robert Smith: The hon. Gentleman might not have heard much from me because, as he said, there are other interesting Bills to consider. Given that Liberal Democrat Members supported the Bill on Second Reading and participated in improving the Bill in Committee and on Report, there can be no doubt that they support the Bill. I should note that we are spending more time on Third Reading of the measure than we do on many Government Bills.
      Mr. O'Brien: I am grateful to the hon. Gentleman for confirming that the Bill has all-party support. We shall see how much time I shall take on Third Reading to decide whether his assertion is correct.
      The initiative of the hon. Member for South Derbyshire has allowed the Government to focus their energy on addressing the matter seriously with the professional resources at their disposal. That is why the Bill's measures and detail are correct and why we should speed its passage to join other Acts on the statute book. It is a permissive Bill and will consequently be enabling legislation. Producing such legislation rather than measures that curtail and restrict freedom is the proper role of the House and an essential element of our democracy. I could not say the same of other Bills before the House.
      Clauses 1 to 3 of the original Bill were replaced by new clause 1, and new clauses 2 to 5 were added. The original clause 4 is now clause 6 and the original clause 5 is now clause 7. The Bill also now has new clause 8 and clause 9, and so it was important to keep track of it. I can honestly claim to be half-Lancashire and therefore part of the genuine heritage of the co-operative movement, a pride in which I share with many others, and I am glad that this important sector has been recognised, not least because, at the end of 2000, the 8,382 industrial and provident societies on the register held assets of £61 billion in this country. It is an incredibly important sector.
      For the purposes of that analysis, the register is divided between retail societies, including the small co-operative stores—one of which is in Bunbury in my constituency, in which I shop every week and get my ample supply of newspapers; one might call it a media store—and the wholesale and productive societies. The register also includes the agricultural societies that are so important to our rural economy, given the challenge that it faces, the fishing societies that provide the ability to supply fishing equipment to members and marketing facilities to each other, clubs—of one of which I am proud to be an honorary member—general service societies and housing societies. Given the great importance of those organisations to what is taking place in so many of our communities, the strategy unit report correctly put its finger on this important area for review, as has been mentioned earlier.
      We did not have the opportunity on Report to refer to some of the questions raised in Committee. The Minister very helpfully agreed to write to me about

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      them, and I would like to place on record that she did so on 25 March. Her letter sought to deal with two particular points, and I urge all Members with an interest in the Bill to read it, as it has been placed in the Library. It had attached to it the draft regulatory impact assessment, and I am most grateful to all those who have spent time giving that assessment proper and due consideration.
      I am pleased to place on record that it is a very satisfactory and helpful document which summarises why this measure is justified and—if I may rather immodestly suggest this—vindicates the request for such an assessment. It merits reading, and the point that flows from it—to which the Minister might allude later—is that it seeks to clarify why it is fair to say that this provision does not anticipate all the measures that might come out of the strategy unit report on charity law reform. At the same time, however, it heralds some of the thinking that is probably going on as a result of the extensive consultation that is taking place because of that very worthy and welcome report.
      In regard to the regulatory impact assessment's finding on the power to restrict the use of assets—the so-called asset lock—in clause 1, the Minister's letter suggests that, without an asset locking regime in place, there would be "a serious deterrent to funders". It is important to recognise that that was not clear from the outset, and that it has become clear during our deliberations. That is part of the merit that has been derived from our having had this extensive debate on the Bill. That was important not only because we have looked at a number of the processes by which these entities are able to commit themselves and to be bound to the outside world as well as ensuring that they have modern procedures, but because, in the modern competitive world, they must have the opportunity to gain the confidence of those who would seek to fund them so that they can be competitive while maintaining the mutuality of interest of their members. Those requirements have been served by the measures that we are introducing. As with normal companies, the provisions allow for the possibility of a reduction in transaction costs and the facilitating of business transactions, which I welcome as potentially deregulatory.
      I would like to raise a practical point, which is that, in relation to the sealing of documents, there is an added benefit that is not highlighted in the Minister's letter of 25 March. These days, commercial deals are often done quickly to capture the opportunity, and co-operative or community benefit societies equally need to try to ensure that they do not lose out by being unable to act swiftly when it is in their interests and the interests of their members to do so.
      The seal is no longer needed, although it has to be considered in jurisdictions other than England and Wales. It is appropriate that we have that benefit, which is also necessary given that, these days, company executives, as well as those of co-operatives and community benefit societies, have to travel extensively, despite the fact that they are focused within their community. They are often not in the right place to be able to sign against the seal. The point is very practical, but all those who have been involved in commerce
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      realise that such factors can often be a serious deterrent to getting deals done quickly and giving confidence to the counter-party.
      We discussed on Report the ramifications of ostensible authority and vires, but it would be best if we received clarification from the Minister, either today or as soon as possible, that the Financial Services Authority is to be considered. The review is coming up at the end of the year and the FSA's remit is set by Parliament, so the Government will have to come back with a recommendation, but it would be helpful to know what they have in mind or whether there is any barrier to working positively on those issues. As a registry function is provided for the sector, it would be useful to have that clarification. The Minister's letter was helpful as far as it went, and I pay tribute to that.
      Moving on from the letter, which I recommend that all those with an interest in the Bill read, my only other reservation about the process is that, as a result of the Government amendments, much will be left to secondary legislation. That will obviously depend heavily on a consultation process. That indeed helps, and as part of the asset lock-in and dedicated assets discussion we had not only consultation, but the liberal use of the word "sensitivity". I am glad to think that the question of dedicated assets and asset lock-ins can be dealt with in a sensitive way. I think that that is intended as an attempt to take cognisance of the particular conditions at any given time and the particular transactions that people may have in mind as to each society. That is sensible, so long as the overriding principles, at all times, are purpose and the community of benefit. If we always keep those uppermost in our minds, we will be fine.
      The Bill is highly worthy, likely to be effective and desirable. The point on the question of the name has been considered, but it would be helpful if the Government reiterated their assurance that the legislation is intended not as a blank cheque, but as a process by which secondary legislation is clearly itemised and dealt with under the affirmative resolution procedure, although that has already been confirmed.
      It is interesting to note that the hon. Member for Harrow, West (Mr. Thomas), who has kindly sent me a note of apology to say that he cannot be here for the winding-up speeches as he has to go to his constituency surgery, none the less thinks that we are setting a good precedent for foundation hospitals. It will be most interesting to see how that develops, if he believes that the proposals on foundation hospitals relate to co-operatives, which is not how I read them.
      My only other point is technical: it would be helpful if the Minister made some reference to when the Government intend to consider the separate legislation that will apply to Northern Ireland and bring it into line. Quite rightly, Northern Ireland has been excluded from the Bill. It has different arrangements, so it would be sensible to consider whether they can be dealt with as effectively as those we have debated today.
      It is appropriate to pay tribute not only to the hon. Member for South Derbyshire, as the Bill's promoter, but to the Minister, who has handled proceedings with dedication and a seriousness of intent, and to my constituents who have helped me as they are somewhat involved in the Co-op group, not least the chief

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      executive. The Opposition also pay tribute to all that the co-operatives and community benefit societies do. This is a well-deserved measure that will assist them in going forward in the 21st century. We hope that it builds on the legacy of past generations, which made available assets as well as their time, skills, endeavour and good will. We hope to acknowledge them by doing the same and adding to their good work.
      12.29 pm
      Ruth Kelly: I thank my hon. Friend the Member for South Derbyshire (Mr. Todd) for introducing this important Bill on co-operatives and community benefit societies. He has worked hard to secure the Bill's passage through the House. I applaud his constructive approach to bringing that about. The Bill has been improved through scrutiny, which is due in no small part to the illuminating and constructive debate involving hon. Members on both sides of the House. I am sure that that will produce a legislative outcome that will greatly benefit the industrial and provident society sector. I thank the House and my hon. Friend for that. I am also grateful for the support that the Opposition parties have lent to the Bill, and for the favourable remarks made by the hon. Member for Eddisbury (Mr. O'Brien).
      Industrial and provident societies, with their ethos of member engagement, independence and help for the community, have for many years made an important contribution to the United Kingdom's economy and society. They form a significant section of the economy. The hon. Member for Eddisbury described the diversity of the sector and the contribution that it makes. Societies also perform an important social function. The Government welcome the benefits that they produce for their members and for the wider community. A range of enterprises across all sectors of the economy can use that flexible corporate form, which, strengthened by the proposals in the Bill, should continue to prosper. We are keen to help the sector to maximise the benefits that it provides to its members, which is why we have made it clear from the outset that we support the principles behind the Bill.
      Clause 1 on asset lock-in was rightly given a great deal of attention in Committee. It will enable the Treasury to introduce in secondary legislation provisions under which community benefit societies could prevent any use of, or dealing with, their assets except for the benefit of the community. That will provide societies with the option of ensuring that their assets can be used only for purposes that are beneficial to the community.
      As the hon. Member for Eddisbury said, the proposal emerged as one of the key recommendations of the strategy unit's report into the voluntary and not-for-profit sector. The report highlighted the benefits of the proposal, stating that the current situation with no asset lock-in provision was a "serious deterrent to funders". That is an important point. The new provision could be of great benefit to industrial and provident societies.
      The report also noted that care would need to be taken for
      "robust mechanisms … to be put in place to ensure that takeovers, mergers and dissolutions are conducted in a fair and transparent way".
      Similarly, it will be important to ensure that societies with the lock can continue to evolve and change their purposes and activities accordingly.
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      An asset lock-in regime is a complicated area of policy, and it is important that we get it right. My hon. Friend the Member for South Derbyshire and I took the view that it would not be possible, within the time scale envisaged in Parliament, to establish in detail exactly what the regime should look like. We need to produce a regime that will maximise the benefits to societies and the wider economy, which is why the Bill provides for a clause that enables regulations to be made at a later date giving community benefit societies the ability to lock in their assets. As the hon. Member for Eddisbury said, we will consult thoroughly with the movement and with other interested parties to ensure that we get the regulations right. They will be passed by affirmative resolution in due course.
      The question of who the regulator will be is one of the details that we have not had time to consider properly during our scrutiny of the Bill. That is why we are introducing enabling legislation, which will allow us to consult more fully with the movement, and with the Financial Services Authority on whether it would be prepared to take on that role. At present, we have no set view on the outcome of that consultation, but I can assure the House that if the Bill is enacted, officials will start work straight away to establish an asset lock-in regime, and will consult on the details of the regime as soon as it is sensible to do so. I can, however, confirm our full support for the principle and the clause.
      The hon. Gentleman asked about the current legislation being considered by Northern Ireland Ministers and officials. We are liaising closely with Northern Ireland officials to ensure consistency of approach, but, while consistency is highly desirable and will certainly be taken into account, this is ultimately a matter for Northern Ireland.
      I shall not repeat all the arguments advanced in Committee, but I will say a little about the Bill. Clauses 2 and 3 update industrial and provident society legislation in line with company law to make it easier for societies to enter into business transactions. They protect those dealing with societies and society committees from adverse consequences if societies or committees are found to have acted outside societies' rules. That will remove the current risk that apparently legitimate business transactions may prove invalid if a society is found to have acted outside its own rules. It will also remove the onus on those doing business with societies to investigate their rules before entering into contracts.
      The clauses were amended in Committee to make their effects more transparent. By setting out all the new provisions as amendments to the 1965 Act, they reduce the amount of reference to other Acts that would otherwise be necessary, and make clear the intended effects on societies. The proposals accord with the Government's agenda for modernisation of the industrial and provident society form, and with our aim to create, where appropriate, a level playing field between societies and the company corporate form.
      The aim of clauses 4 and 5 is to make it easier for societies to enter into contracts and execute documents. It seeks to do that by, again, bringing industrial and provident society legislation up to date with existing provisions of company law. The hon. Member for Eddisbury raised some important points about that. Societies will be more able to execute documents

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      without having to overcome the potentially cumbersome burdens associated with having to use a common seal on all occasions, and will thus enjoy much more flexibility.
      The Bill takes an important step towards the modernisation of industrial and provident society legislation. In doing so, it will benefit societies and their members, and I am pleased to say that it has the Government's full support. Mutual societies have an important part to play in providing consumers with choice and innovative services in retail and financial markets, and in facilitating social enterprise. I believe that the Bill has the potential to add significantly to the contribution already made by industrial and provident societies.
      I congratulate my hon. Friend the Member for South Derbyshire on his work, and on the constructive way in which he has engaged with the Department and with me throughout the Bill's passage. I also thank all who have spoken today, and who spoke during the Bill's earlier stages. The Bill makes an important contribution to the industrial and provident society movement, and will benefit that movement considerably. It will modernise the sector, and I wish it every success in the other place.
      12.38 pm
      Mr. Todd: With the leave of the House, Mr. Deputy Speaker.
      I thank all who have spoken today and, indeed, those who spoke during the Bill's earlier stages. Some have done both. I also thank the co-operative movement in general, particularly Peter Hunt and Matt Ball, who have worked tirelessly in providing information and support. I thank, in particular, the hon. Member for Eddisbury (Mr. O'Brien) for his consistently informed and constructive contributions, and for the time he has devoted to the Bill. I also thank the Treasury team, which has worked extremely well with me and my advisers, particularly the Minister, who has responded with great grace and care. I extend my best wishes to her in her future career both as a Minister and as a mother.
      Question put and agreed to.
      Bill accordingly read the Third time, and passed.

  Litter and Fouling of Land by Dogs Bill
  Order for Second Reading read.
  12.40 pm
  Mr. Bob Blizzard: I beg to move, That the Bill be now read a Second time.
  Litter is a very important issue. I obviously think so—it is the second such Bill that I have introduced in the House—and so do my hon. Friends who support the Bill, many of whom supported the previous Bill. I am delighted that we have arrived at Second Reading.
  Not just hon. Members but the public at large think that it is an enormously important issue. All hon. Members who have gone round their constituencies knocking on doors and talking to people will know that many more people are concerned about litter and dog fouling than are concerned about other important issues such as the five economic tests for the euro. When I introduced the first Bill, one of the television stations did a poll and found that 97 per cent. of people supported the measure.
  Litter is unsightly. It spoils neighbourhoods and all parts of the country. We know that it is a health risk and dangerous, particularly to children. It affects urban areas, rural areas, concrete paved areas, the paths that we walk on and the lovely open spaces that we treasure.
  Another reason why the Bill is important is because we are not very good at dealing with the issue. The current culture of this country is that people drop litter in volumes but that we tolerate it. We spend most of the day walking around in the litter and spend a fortune—about £450 million a year—trying to have it cleared away and complaining that it is not all cleared away. I am not sure how much dog fouling material is cleared away, but I am told that about 1,000 tonnes a day are dropped; there is a thought for midday on Friday.
  The problem is that we do not enforce the laws. We have had laws for many years. People can be fined, but I think only about 3,000 fixed-penalty fines a year are issued for litter and 2,000 for dog fouling. At the moment, all the revenue is passed to central Government. I understand that that amounts to only about £70,000 a year.
  Lawrie Quinn: Does my hon. Friend agree that for those of us who have the privilege of representing seaside resorts, it is a particular problem? Many visitors do not have respect for the local environment. The Bill has great support in Scarborough and Whitby, particularly among the seaside communities, which I am sure wish it well.
  Mr. Blizzard: I am grateful to my hon. Friend for drawing attention to that. I am sure that the wonderful beaches of Scarborough are marred by litter and dog fouling, as is the beach at Lowestoft, officially the best beach in England.
  The problem is that we have not tackled the issue and have made no progress on it. The central contention of the Bill is that only enforcement will work; that is the essence of the Bill. Education, campaigns and saying, "Let's have more bins" will not work. By allowing local authorities to retain the revenue from fixed-penalty fines, we will provide an income stream for enforcement.

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  That will enable councils to take action and engage them in taking action. We must change the culture that I spoke of a few minutes ago. That culture also exists within councils, which are more geared to clearing up than enforcing the law. The benefit of enforcing the law is that we make the polluter, not the poor taxpayer, pay.
  The response of the Department of the Environment, Transport and the Regions, as it was when I first proposed such a measure in 1999, was not supportive. It referred to the perverse incentive, a legal nicety whereby the person prosecuting should not stand to benefit from the prosecution. That may be true in legal schools, but our constituents would surely believe that there should be every incentive to enforce the law in this respect. I am delighted that the Government have changed their mind and that clause 117 of the Local Government Bill, now in the other place, contains the central provision of my Bill.
  There are, however, one or two differences between my Bill and the Local Government Bill. The main difference is that in my Bill, the local authority must use the money raised to enforce the litter and dog-fouling laws, but the Local Government Bill makes provision for the local authority to use the money for any of its functions. I can understand the in-built incentive to use the revenue for enforcement, because further revenue will be gained from enforcement. I can also understand why, in theory at least, there may come a time when it will be clean everywhere, so there would be no point in pouring money into enforcement. However, I stress that that will happen in theory rather than in practice and that, even with the measures in my Bill, it will take some time to achieve it.
  I am worried that some local authorities might settle for a low level of enforcement and then stop, or divert the money into more bins. If so, we would become a bit cleaner, but still fall way short of what most people would like to see. Even worse, some local authorities might not bother to take up the new powers and the revenue stream. As I said, we have to change the culture of local authorities, otherwise we could end up with postcode litter enforcement, with some authorities doing a much better job than others.
  In the past year, about a dozen pilot schemes have been tried and they have taught us two lessons. Authorities such as Newcastle, Manchester and Wigan have taken their responsibilities seriously and have made a great difference. Many fines have been handed out and the revenue gained is there for all to see. Some authorities, though—we should recall that they are all signed up to public service agreements with the Office of the Deputy Prime Minister—have done nothing. We must therefore ensure that all local authorities take the new powers seriously.
  How can we best ensure that? I am grateful to my right hon. Friend the Minister for Rural Affairs and Urban Quality of Life for entering into discussions with me on that point. I understand that he proposes to use the corporate performance assessment and best value mechanisms, rather than straightforward compulsion. I should be grateful to my right hon. Friend if he would explain to the House in detail exactly how those mechanisms will work.
  What guidance will be issued to local authorities to ensure that they—I was about to say "get stuck into" this, but perhaps that is not the right phrase to use—take
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  advantage of the opportunities provided in my Bill and the Local Government Bill? They will need a kick-start initial investment will be necessary to employ the first half a dozen wardens, but it will soon be repaid by fines, which could then be used to employ more wardens.
  Shona McIsaac: I am listening carefully to my hon. Friend's explanation. In Cleethorpes, Immingham and Barton, most of the complaints about litter that I hear are from residents living near large secondary schools, who moan about crisp wrappers, bottles, cans and so forth. How does my hon. Friend envisage his Bill will work when it is young people under 18 who are littering those areas?
  Mr. Blizzard: I am grateful to my hon. Friend for making that point. I think that, once we have a law that says that we are serious about litter, schools' whole approach will change. They will manage the problem in collaboration with the local authority, but in the knowledge that they have to do so.
  Once a momentum gets going in local authorities, there will be an increasing army of litter wardens who can make this country cleaner. How will that cleanliness be assessed? Who will decide on the standard of cleanliness that ascertains that a local authority is fulfilling its functions?
  My final question to my right hon. Friend is this: will it be impossible for a local authority to achieve the highest standard of corporate performance assessment and thus gain the flexibility to spend the fines on other things without having succeeded on the best value cleanliness standard? We must ensure that it has to meet that standard.
  The Bill is part of the Government's overall agenda for stronger communities and better local environments, along with measures on abandoned cars, graffiti, and nuisance and antisocial behaviour. Dropping litter is antisocial behaviour, and the problem is that it not just a minority who do it—many people who do not consider themselves to be beyond the law in any way are in the habit of dropping litter. We therefore face a major task. Although we know that the majority of our constituents are law-abiding people who will respond to the measure, take it seriously and obey the law, they will do so only if they think that this House and the Government are serious about enforcing it.
  12.51 pm
  Michael Fabricant: I have the honour of being one of the Bill's sponsors. It is a genuine cross-party Bill, for the reason that it makes very good sense, and I congratulate the hon. Member for Waveney (Mr. Blizzard) on promoting it. Hon. Members will recall that when he introduced a powerful 10-minute Bill, which had the acquiescence of the whole House, he pointed out many of the facts that he has pointed out today. It is worth repeating that, as he said, £450 million a year is spent on clearing up dogs' mess. He did not comment, however, on the cost to the national health service of treating young children, as well as older people, who have been infected as a consequence of being in contact with dogs' mess.
  The Bill is called the Litter and Fouling of Land by Dogs Bill because, sadly, we see dogs' mess not only on our streets and pavements, but on playing fields, where

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  much damage is done to the health of young people. I say to the hon. Member for Scarborough and What (Lawrie Quinn) that the problem is a curse not only in seaside towns—it affects people even in towns and cities such as Lichfield, right in the heart of the country. It is very much a national problem. As the hon. Member for Waveney said, more than 1,000 tonnes a day are—I hate to use the word, but I will—dumped in the United Kingdom, and it really is foul in every sense of the word.
  In Lichfield, we have two dog wardens. They do their best, but it clearly ain't enough. I like to think that Lichfield is one of the cleaner cathedral cities, but one sees dogs' mess there, too, with all the damage that it causes. Two dog wardens are not enough. Whenever I take that up with the excellent Conservative-controlled Lichfield district council, it says, "We can't afford to have any more." The Bill is a mechanism that will allow it to afford to have more. I take the point made by the hon. Member for Waveney. If the Government decide not to adopt the provision in clause 1(b), which stipulates that the money raised from fining people who commit the offence of allowing their dogs to foul is ring-fenced to pay for more dog wardens, there is a fear that councils that find themselves strapped for cash will use some, or maybe even all, that money for other projects. There will thus be no incentive for councils such as Lichfield to employ more than two dog wardens. The council needs more wardens—six, eight or 10; as many as are necessary to ensure that that curse is eradicated.
  In principle, I think that the provisions already exist. The Government sensibly introduced measures whereby authorities can retain fines levied for speeding offences caught on speed cameras. Will the Minister for Rural Affairs and Urban Quality of Life confirm that the money is ring-fenced and that it can be used only for installing more speed cameras?
  Lawrie Quinn indicated assent.
  Michael Fabricant: The hon. Gentleman suggests that that is so. Surely, in that case, subsection (b) of clause 1 could be included in the Bill that is currently in another place. That is tremendously important, as the hon. Member for Waveney pointed out.
  I do not want to detain the House. The Bill is excellent. I am probably about to tempt fate by saying that, in the past month, I have received more letters about dog fouling than about the war on Iraq. That is no bad thing; it demonstrates that people feel as strongly about dog fouling as they do about Iraq. The two issues may be very different, but they are important to people. Dog fouling affects the lives of ordinary people, in the streets where they walk and live, and where they allow their children to play. As I said earlier, the cost of collection may be £450 million a year, but what is the cost to the national health service? What is the cost to people's lives?
  12.57 pm
  Mr. Robert Syms: I shall be brief. I congratulate the hon. Member for Waveney (Mr. Blizzard) on his good fortune in the ballot, on a worthwhile Bill that has resonance on both sides of the House and on the manner in which he introduced it. I am sure that the measure will receive all-party support.
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  The Bill is not anti-dog. Indeed, I should not want to be associated with something that was anti-dog—some of my best friends are dogs.
  Mr. Andrew Dismore: The hon. Gentleman's only friends are dogs.
  Mr. Syms: Perhaps.
  The measure would provide balance. It is reasonable to expect people who keep pets to show responsibility and consideration for other people.
  We welcome the Bill. Dog fouling is a major problem. Estimates produced by Department for Environment, Food and Rural Affairs show that there are 6.8 million dogs in Britain, producing 1,000 tonnes of excrement a day. I wonder who estimates such interesting statistics; no doubt there are people who have more interesting jobs than that of Member of Parliament.
  The problem causes great concern to many of our citizens, especially people out walking with their children. There are also particular difficulties for people pushing prams and for wheelchair users. They have problems cleaning dog excrement from the wheels, and it is often trailed into their homes. The Bill is about good citizenship.
  Local authorities are under financial pressure due to the grant settlement and, as a result, may not accord the highest priority to the problems addressed by the Bill. I generally welcome the provision that would allow local authorities to keep fines in order to give better services.
  More than 60 per cent. of authorities never prosecute for such offences. The Bill would give them a greater incentive to do so, and would ensure that people are good citizens. In 1998, 98 per cent. of local authorities employed dog wardens, but the figure has fallen to 94 per cent., which is of great concern.
  Mr. Blizzard: I am grateful to the hon. Gentleman for making that point. It may be that a relatively high percentage of local authorities have dog wardens, but most of those authorities employ only one or two wardens. They do not do much enforcement work, tending instead to work with dog owners.
  Mr. Syms: The hon. Gentleman makes an excellent point.
  However, the Bill does not address a lacuna. Under section 1(2) of the Dogs (Fouling of Land) Act 1996, an offence is not committed on pavements alongside a carriageway unless there is a speed limit of 40 mph or less. A constituent of my hon. Friend the Member for Cotswold (Mr. Clifton-Brown) has written the following in a letter:
  "I am writing to you as a dog owner. I live in village where we have a few dogs roaming around without their owners and they leave their packages wherever they wish. I have been in touch with the dog warden for this area and he has told me that we have no law in this village to stop dogs from fouling the verges, pavements or play areas due to the fact we have no speed limit in this village. This byelaw stinks. I don't see why the careless owners cannot be fined or told to clean up after the dog. Would it be possible to get this byelaw changed as I think it grossly unfair that, in areas with speed limits in place, action can be taken to the owners, but villages like Condicote with no speed limit have to live with dirty dog owners? I feel that it should be a crime for dog owners, whether you have a speed limit or not. Hope you can help with this problem."

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  That constituent would like to know how the situation can be remedied.
  Hon. Members may wonder why I am reading a letter that was sent to the hon. Member for Cotswold. It is because I am delivering his speech for him. Nothing would have prevented him from speaking on this topic except the fact that he has broken his ankle and is in his constituency. I am sure that we all wish him well.
  Under Department for Environment, Food and Rural Affairs codes for dog fouling, citizens are expected to take names and addresses of offenders and report them. Is that really practical? Even if there are inspectors in place, unless there are a considerable number of offenders, or unless somebody is a very persistent offender and is reported, what are the chances of somebody actually being apprehended? Even then, would they be willing to give out their name and address?
  What sort of priority will hard-pressed local authorities give to this matter? Will the cost of the fixed-penalty notices begin to recoup the cost of issuing them and enforcing them? Have any costing or regulatory impact assessments been carried out for this Bill? Although we support the aim of the Bill, there are a number of issues that we think ought to be considered carefully. If, as has been mentioned, this is being discussed in debates on the Local Government Bill in the Lords, there are some issues that will have to be considered carefully in order to improve this very important legislation. I commend the hon. Member for Waveney. Conservative Members support the intent of his Bill.
  1.2 pm
  The Minister for Rural Affairs and Urban Quality of Life (Alun Michael): I am pleased to be able to continue today's theme of general agreement not only between the two Front-Bench spokesmen but between those on the Back Benches and on the Front Benches. I join other hon. Members in sending good wishes to the hon. Member for Cotswold (Mr. Clifton-Brown), although I heard my hon. Friend the Member for Oldham, East and Saddleworth (Mr. Woolas)—with the gentleness for which Whips are famed—suggesting that the Labour party would regard it as a lame excuse.
  I congratulate my hon. Friend the Member for Waveney (Mr. Blizzard) on his efforts in bringing this matter to the House—not only today but on a number of previous occasions. Like him, I feel strongly about the blight caused by people who do not dispose of their litter responsibly or who do not clear up after their dog. I agree that enforcement is needed, and my comments will focus on that. However, I do not want to emphasise only the negative: we should pay tribute to those who act responsibly. Many people up and down the country not only take care of their own litter but take an interest in the tidiness of their general environment in villages and, indeed, in towns and cities.
  From environmental work that I promoted as a youth worker before entering this place, I know that young people respond to encouragement and leadership and are willing to go to great lengths to help in tidying the environment. It is not true to say that only enforcement will work. I commend the work of Encams—Environmental Campaigns—the organisation that is
  1216
  better known as the Tidy Britain campaign or group. The success of many of Encams local campaigns is significant and has involved partnership between Encams and local authorities. The answer is to inject enthusiasm into education and the encouragement of responsibility, and into the issue that my hon. Friend the Member for Waveney has raised—that of enforcement. We need a balance of those two approaches. Neither is adequate on its own, and I am sure that my hon. Friend would not disagree with that. However, as I said, enforcement is necessary.
  The Government are determined to tackle the problem and to reach a standard of street cleanliness that we all can enjoy. My hon. Friend the Member for Waveney acknowledges that the issues contained in his private Member's Bill are the focus of considerable Government attention. Let me outline our current position on the hypothecation of the revenue from litter and dog fouling fixed-penalty notices, as suggested by my hon. Friend.
  A pilot programme began in early 2001, in which three local authorities were allowed to exercise similar provisions to those in the Bill. That was achieved through local public service agreements co-ordinated by my right hon. Friend the Deputy Prime Minister, then at the Department of the Environment, Transport and the Regions. The pilot programme allowed those local authorities to use the revenue from fixed-penalty notices for litter and dog fouling offences further to improve street cleanliness. In particular, the revenue was used to provide more bins and to give financial assistance to the litter and dog warden teams. In all cases, there was a significant increase in the number of fixed-penalty notices for litter and dog fouling offences issued in those areas.
  When my hon. Friend first introduced the Bill, the Government were considering extending those pilots schemes and awaiting their outcome. As he has said, the pilot programme was subsequently extended to other local authorities applying for local public service agreements during 2002. Again, that proved very popular with the local authorities involved and, in most cases, results similar to those in earlier trials were achieved.
  Building on that success, clause 119 was included in the new Local Government Bill during the summer of 2002 to allow local authorities to retain any sum that they receive from fixed penalties for litter and dog fouling offences, rather than paying them to the Secretary of State, in relation to England, or to the National Assembly for Wales. That clause states specifically for which measures the revenue from fixed-penalty notices can be used.
  Authorities will have to use their fixed-penalty receipts to pay for their statutory functions related to litter and dog fouling, including that of giving fixed-penalty notices for leaving litter and failing to clear up after dogs. However, clause 119 also contains a provision for the Secretary of State and the National Assembly for Wales to make further regulations adding to the activities which a certain authority may finance using its fixed-penalty receipts.
  For example, the Secretary of State could enable an authority to spend its fixed-penalty receipts on specified activities related to improving the local environment

  1217
  that are not carried out under its statutory functions relating to litter and dog fouling. The new regulation-making power will be sufficiently wide to give high-performing local authorities complete freedom about how to spend their receipts. My hon. Friend has taken issue with that part of clause 119, but I hope that I can persuade him that that concern is misplaced.
  Let me stress that complete freedom to spend receipts would be given only where the Secretary of State, or the National Assembly for Wales, is sufficiently satisfied that the local authority's performance justified granting such freedoms and flexibilities. That is part of the wider approach being taken by the Office of the Deputy Prime Minister and the rest of the Government, and it has been subject to considerable discussion with local government representatives. That judgment would be based clearly on an assessment of a local authority's performance.
  I can understand that my hon. Friend does not want local authorities to shy away from their specific responsibilities and to use revenue for activities unrelated to litter and dog fouling when money needs to be spent on those activities—in fairness, and in my experience, nor would most local councillors. In Cardiff, for example, councillors in my constituency are every bit as keen to tackle that issue as my hon. Friend and myself.
  No local authority will be given those freedoms and flexibilities if measuring their performance shows that they are not fulfilling their obligations in respect of litter and dog fouling, so there is no problem in that regard—the protection is built into the system. The Local Government Bill received its Second Reading in the House of Lords yesterday, and I am therefore very confident that those provisions will become law.
  Mr. Blizzard: For the benefit of the House, will my right hon. Friend explain how a local authority will be judged to have met its responsibilities for cleanliness, and who will make that judgment?
  Alun Michael: I do not want to go into the detail of those mechanisms, which are being discussed with local authority associations. It is important that we get that right. I understand what my hon. Friend is saying, but we should focus on the fact that local authorities must meet their obligations on litter and dog fouling. My reasons for not wishing to go into the matter further relate not only to the sensitivity of Members' stomachs
  1218
  as we approach lunchtime, but to the fact that such detail would pre-empt the legislation before it has completed its passage through Parliament.
  Michael Fabricant: I accept that the Minister does not want to go into too much detail at this stage, but given that the Government believe, quite rightly, that police authorities should be allowed to keep money raised from speed cameras, but can only use it for the provision of additional speed cameras, thus ring-fencing it, why is his Department running away from ring-fencing in the Bill?
  Alun Michael: It is not—the hon. Gentleman has missed the point. The money must be used for certain purposes, but it would be inappropriate to ring-fence the sum completely and not give freedoms to local authorities which are achieving their obligations under the Bill as well as a much wider range of objectives. The approach is to lift local authorities' performance and set targets on specific issues, including the one covered by the Bill. By achieving those targets and doing what they are meant to do for the local population, local authorities earn greater flexibility in the way in which they use resources. We are not providing flexibility by saying that it does not matter whether or not they achieve things, but we are saying that if they achieve a high standard they should be given greater flexibility in their use of available resources. It would be inconsistent not to apply that to the matter under consideration when it is applied to other local authority responsibilities.
  The hon. Gentleman's question enables me to set out the underlying principles with greater force. I hope that he, my hon. Friend the Member for Waveney and all Members who take an interest in this topic—I am delighted to see that many Members do so—will accept that the Government are determined to proceed in the same direction as my hon. Friend. I hope that they also accept that it would be inappropriate for the Government to support my hon. Friend's Bill because legislation that has only just received its Second Reading in another place will meet the same requirements. I hope that my explanation satisfies my hon. Friend, enabling him to withdraw the motion.
  Mr. Blizzard: With the leave of the House, I thank hon. Members who have attended today and supported the Bill. I thank the hon. Member for Poole (Mr. Syms) for supporting it as Opposition spokesman, and I thank my right hon. Friend the Minister for the way in which he has engaged in discussion and responded to the progress of the Bill. In the light of the assurances that he has just given, I do not think that the House's time would be well spent if the Bill went into Committee, so I therefore beg to ask leave to withdraw the motion.
  Motion and Bill, by leave, withdrawn.

  Dealing in Cultural Objects (Offences) Bill
  Order for Second Reading read.
  1.13 pm
  Mr. Richard Allan: I beg to move, That the Bill be now read a Second time.
  The Bill creates a new criminal offence with the primary intention of achieving the positive effect of protecting our cultural heritage, as I hope will become clear as I set out the case for the measure. I shall speak about three areas. First, I shall describe who wants the Bill; secondly, I shall talk about what it will do; and thirdly, I shall explain why it is needed now.
  I start by giving credit to those who put a huge amount of work into the issue of dealing with the trade in illicit antiquities, which the Bill aims to tackle. First among those is Lord Renfrew of Kaimsthorn. Professor Colin Renfrew has been working on the subject of illicit antiquities for many years, both as a professional archaeologist and as a Member of the House of Lords. He heads the McDonald Institute for Archaeological Research in Cambridge, which includes the illicit antiquities research centre as one of its projects. His CV makes fascinating reading for me, as he was a lecturer at the university of Sheffield in the year that I was born in Sheffield, and had become the Disney Professor of Archaeology at Cambridge in the 1980s, when I arrived there to study the subject.
  The other major influence in bringing the Bill into existence was the work of the Select Committee on Culture, Media and Sport. The Committee's report, "Cultural Property: Return and Illicit Trade", which was published in July 2000, recommended the creation of an offence of trading in cultural property. The recommendation received all-party support. I commend the report and the Committee for the work that it did.
  The recommendation was taken up by the Ministerial Panel on the Illicit Trade in Cultural Objects, ITAP, which was set up in May 2000 and reported in December 2000. Credit should go to the members of the panel under the chairmanship of Norman Palmer, Professor of commercial law at University College London, for their excellent work in bringing together all the major players on the subject.
  The Bill has been drawn up by Government lawyers working with officials at the Department for Culture, Media and Sport, who have also provided excellent explanatory notes, for which I am extremely grateful.
  Michael Fabricant: I support the Bill which, as the hon. Gentleman points out, is founded on a report by the Culture, Media and Sport Committee. However, another report queried whether antiquities owned by the British Museum and other institutions, such as the Elgin marbles, ought to be returned. It was decided that they should not be returned. Can the hon. Gentleman assure me and the House that the Bill will not lead to further calls for the Elgin marbles and other such properties to be returned?
  Mr. Allan: I am happy to give the hon. Gentleman an absolute assurance that the Bill has nothing to do with anything that was taken from another country 200 years
  1220
  ago. That is a separate argument for another day. The Bill is about material that is being taken now, both in the United Kingdom and other countries, as I hope to show.
  Mr. Andrew Dismore: I welcome the Bill. For me, it is a matter of regret that it does not deal with matters such as the Parthenon sculptures. If the Bill had been in force 200 years ago, would Lord Elgin have been committing a criminal offence?
  Mr. Allan: I shall set out the case in detail, referring to present-day examples. We need to consider countries such as Iraq, where in some senses similar circumstances pertain, in that there is uncertainty about who is in government, which creates the conditions for cultural objects to be removed. Plus ça change, plus c'est la meme chose, in the context of uncertainty of legal status and the removal of cultural objects. I shall come to that later, but for now I reiterate that the Bill has nothing to do with anything in museums that arrived there some years ago. It deals with the trade taking place now.
  I thank the officers of the British Museum, who have given me invaluable assistance, as well as the all-party parliamentary archaeology group, which has almost 150 members in both Houses. The group backed the Bill with a recommendation in its recently published report, "The Current State of Archaeology in the United Kingdom".
  My aim has been to keep the Bill narrowly focused, so that it can be properly considered in the time available to a private Member's Bill. I hope that the House will appreciate that it has been kept to six short clauses and that the temptation to expand its scope has been firmly resisted. The aim of the Bill, in short, is to make a contribution to the protection of archaeological sites and buildings of historical interest by drying up the market for objects taken from any such site, whether in the UK or elsewhere.
  We have a framework of protection for our heritage in the UK that is established in law to protect listed buildings and scheduled ancient monuments. The Bill seeks not to change the scope of that protection, but to complement it by dealing with those who sell objects that have been removed in contravention of those laws. That the Bill is necessary is a sad testament to the fact that there are some individuals who carry on flouting the protection laws and carry out illegal excavations on ancient monuments, or strip architectural elements from listed buildings. Recent cases that cause concern include the suspected removal of bronze artefacts from the Yeavering Bell hill fort in Northumbria and Roman coins from a site in Wiltshire, which are currently being dealt with by the British Museum. Both those cases were reported at the end of last year.
  If there are problems in the UK, we should be aware that they can be far worse in other countries, especially where the authorities are hard-pressed with other security concerns. I worked in archaeology in Ecuador some years ago, where the illegal excavators were known as huaqueros. It was frequently a race against time for legitimate archaeologists to get to a newly discovered site before it was plundered. The name "huaquero" is local to South America and especially northern Peru. In preparing for the debate, I checked the origins of the word and my memory, and found that it comes from the

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  Quechua word "huaca", which means a sacred place or temple and comes from Inca times. There is even a song about huaqueros, whose chorus goes:
  "Huaquero, huaquero, let's go robbing graves.
  Dig, dig until dawn.
  Dig, dig until dusk."
  One cannot get much plainer than that. Indeed, the prevalence of the trade is such that there are local words for the perpetrators in many countries. In Guatemala, they are known as huecheros, from the Maya word for armadillo, "huech". In Italy, they go by the name "tombaroli", and in the UK, they are generally referred to as nighthawks. However, those who loot archaeological sites will always remain huaqueros to me.
  The UK has an interest in such activities because so much of the international art market is based here, especially in London. It is important to state that mainstream legitimate dealers in antiquities take great care not to handle illegal property. The main dealers' organisations such as the British Art Market Federation and the Antiquities Dealers Association have played an active part in the panel working on the matter. Legitimate dealers have an interest in seeing the Bill passed and have nothing to fear from it, as they will be protected from buying such tainted artefacts by the good practice that they follow. Their interest is in seeing those who are less scrupulous and work in the illegal market prevented from undercutting legitimate trade by buying in cheap artefacts of dubious provenance.
  In particular, we can assist dealers by enhancing the databases that already exist for informing them what artefacts have been stolen. Those databases are run by a number of organisations such as Interpol, the main law enforcement agencies such as the Metropolitan police and the FBI and private organisations such as the Art Loss Register. In respect of archaeological material, which cannot be registered on a database because, by definition, we do not know what it is while it is still in the ground, we have evolved another system—the International Council of Museums or ICOM red list. That system has successfully covered west African artefacts by listing a range of types of artefacts that are known generally to be stolen, and it is now being extended to south America. It covers some very important material that is being looted from south America—something that originated from a recent conference between ICOM officials and officials of the Colombian Government. Some very important progress can be made in establishing risks and publishing that information widely to dealers.
  We also need information on each other's heritage legislation so that dealers can understand whether something has been taken in contravention of the local heritage laws. Some work is being done at European level by the European heritage information or HEREIN network, which involves all the heritage departments in the Council of Europe. Its website contains important and helpful information allowing people to see what cultural laws apply in any particular country within the jurisdictions covered by Council of Europe members. That could be helpfully extended, particularly among signatories to the UNESCO convention on the
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  prevention of trade in illicit cultural objects, so that a much wider range of legal information is available to people.
  Mr. Dismore: Is the hon. Gentleman aware of any moves in the European Union to harmonise laws protecting cultural objects such as those described in the Bill? As he says, one of the problems is the disparity between different countries. If everybody were to operate under the same regime, bearing in mind the international nature of the trade, it would make life an awful lot easier.
  Mr. Allan: I am aware that conventions have been worked through quite successfully. In particular, the Granada convention on architectural heritage and the Valetta convention on archaeological heritage have been adopted by the United Kingdom. While those conventions do not have the legal implications of an EU mandate, in signing up to them we are necessarily signing up to certain responsibilities that will help to harmonise our common understanding of what we mean by protection of architectural and archaeological heritage. There are some very positive moves in that regard. I congratulate the Government on having made the UK a signatory to the UNESCO convention; again, we are committing ourselves to a path of common understanding of what kind of measures are necessary to protect heritage internationally. The Bill is intended to support the Department's work. Important harmonising work is taking place, but not through the scary, more politically contentious mechanism of directives.
  As well as having databases of legislation and artefacts, we can assist dealers by working with the organisations that represent them on the codes of practice that they follow. Indeed, I have been impressed by the work, which has come through the panel, that shows the care that dealers take to ensure that they are not buying material with an illegal provenance.
  I have set out the background to the Bill and the support for it and I should now like to describe as straightforwardly as possible its operation. It establishes the concept of a tainted "cultural object", which is
  "an object of historical, architectural or archaeological interest"
  that has been removed in circumstances that constitute an offence in the jurisdiction from which it has been taken. That means that the Bill covers objects from anywhere in the world. A dealer who knowingly trades in such an artefact will commit an offence under the measure and be liable for the penalties that it sets out.
  The penalties have been designed to mirror those for offences of handling stolen goods. To obtain a conviction, the authorities must prove that an individual knowingly traded in tainted objects. That provides an adequate defence for dealers who follow good practice in checking the provenance of the material that they buy. The impact of the Bill on reputable dealers will be minimal; they recognise that in their support for the measure.
  However, the Bill makes it clear that anyone in the illegitimate market who considers trading in illicit antiquities cannot do that without considerable legal

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  risk. Inability to dispose of such material will act as a serious deterrent to those who would engage in looting archaeological sites or historic buildings.
  Mr. Dismore: Wearing my lawyer's hat, I am worried that the Bill does not define "object" per se. Would "object" include human remains? The Select Committee report refers specifically to them. Would the Bill cover human remains? Would it cover earth samples from a site? They are potentially important archaeologically, but may not be included in the common or garden definition of "object".
  Mr. Allan: The hon. Gentleman is right to mention human remains. That is a contentious subject to which other legal considerations apply. If the Bill progresses, such detailed tests can be applied in Standing Committee. We have tried to make the definition of what constitutes a tainted object as broad as possible. Although the Bill does not try to create a broad legal liability—it is specific in the measure—we tried to devise a broad definition of the objects. Clause 2(6) refers to remains. However, we would need to have a further discussion on the breadth of the definition and its application to human remains, and time will not allow that today. I hope that the hon. Gentleman can accept that response for the moment.
  The Bill is urgently needed. This week, I received a visit from the police. It was most welcome because they were officers from SCD6—the art and antiquities unit of the Metropolitan police. Detective Chief Inspector Tristram Hicks and Detective Sergeant Vernon Rapley provided helpful information on the scale of the trade that they are trying to tackle. They referred to the National Criminal Intelligence Service's threat assessment. In 2001, it identified art and antiques crime as a level 2 threat to national security because of the link between theft and transport of such items and organised crime. Terrorists do whatever organised crime does, and the lines between who carries out such theft are therefore blurred. However, it is clear from NCIS, special branch and FBI information that there is a link between the removal and transport of cultural objects and the funding of terrorism. The police gave examples of specific cases, which hon. Members may find informative.
  In September 2001, the art and antiquities unit intercepted and seized £3 million of Bactrian art. We are not therefore talking about odd bits and pieces. The pieces are 3,000 years old and had been looted by members of the Northern Alliance and sold via Pakistan to fund the war effort against the Taliban regime. They are currently being held by New Scotland Yard, and are awaiting restoration when the Kabul museum has been rebuilt.
  It is important to note that looting frequently takes place in conflict zones, and we clearly need to recognise that, in the context of what is currently happening in Mesopotamia, where a huge amount of cultural material will be looted. People from various unpleasant factions—I do not want to identify who they are now—will seek to market that material in places across Europe where they can command the best prices. The retrieval of that kind of material is essential to the nation-building exercises that have to take place in post-conflict zones, and I hope that the Bactrian art that is now being
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  held by Scotland Yard will make its way back to the museum in Kabul. I know that the Ethiopians have been very keen to retrieve a lot of their material so as to have a network of museums of which they can be proud, and I think that there will be similar demands in the future from other countries that have suffered conflict.
  In 2000, a valuable Indian stone frieze was seized from a London auction house by the art and antiquities unit. That piece was being sold by Sri Lankan terrorists to fund their war effort. In terms of the scale of what is going on, in the last two years 300 pieces have been seized from Egypt, many of which were fakes. There is an interesting mix between the fake trade and the genuine trade, in that people try to hide genuine pieces in boxes of fakes. Eight hundred pieces, with a value of between £3 million and £4 million, have been seized from Afghanistan, Pakistan and eastern Iran, and 20 pieces have been seized from India, Sri Lanka and Cambodia. I am told that Cambodia is no longer one of the major sources because everything that can be taken from there has been taken. That is a crying shame, because Cambodia is a nation that desperately needs to regain a sense of its national identity, having lost a lot of its very important material.
  Two pieces, valued at between £3 million and £5 million, have been seized from Iraq, and three hundred pieces were seized from Italy, including a shipwreck that was destroyed by UK suspects. There are questions about how shipwrecks will be dealt with, because they are also covered by certain conventions, but I hope that material taken from shipwrecks will fall within the scope of the Bill. That is something that I want to tease out in Committee.
  Michael Fabricant: I am grateful to the hon. Gentleman for giving way a second time. On the subject of shipwrecks, he will be aware that there have been a number of programmes on television recently about divers going in and retrieving objects. What would be the position under the Bill of those shipwrecks that occur outside territorial waters and do not therefore fall under the jurisdiction of any single country?
  Mr. Allan: That is another matter that I would like to tease out. My understanding is that shipwrecks have the status of protected sites and, if an offence were committed by removing material from a shipwreck within territorial waters, those objects would become tainted under the Bill. If that were to happen in international waters, however, those responsible would not be subject to any national jurisdiction. In those circumstances, the objects would not necessarily fall within the scope of the Bill.
  I also hope that we can put a stop to the nonsense that occurs at the moment when material is brought forward by people who claim to have recovered it in international waters, when that is not the case. Such cases would clearly be a matter for a police investigation, but I hope that we would be able to prove that the objects had been taken from national waters, that the national legislation had been breached, and that the objects had thereby become tainted.
  To finish off my list, two pieces from Yemen were seized, and three from Morocco. On the urgency of the Bill, I am told that, in relation to all the objects that I

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  have described that are suspected of having been looted, it has been possible to bring only one criminal prosecution to date. That is related to the difficulty of proving the offence of theft that took place in the first place. The Bill seeks to assist in such cases by allowing the prosecuting authorities to prove a breach of national heritage legislation, as opposed to having to prove theft. We hope that that will bring more objects within the scope of the legislation. I am told that there is one ongoing investigation in which the parties who had to be interviewed in order to demonstrate that theft had taken place were involved with the Iraqi authorities. That investigation has had to be put on hold for the time being.
  I hope that the House accepts the case for this legislation. It will make an important contribution to the protection of cultural heritage at home and abroad. It is well targeted, and limited in scope. It also has widespread support both inside and outside Parliament, and I believe that it is timely and urgently needed to tackle a serious and growing problem. I commend the Bill to the House.
  1.34 pm
  Shona McIsaac: Like the hon. Member for Sheffield, Hallam (Mr. Allan), I am a member of the all-party archaeology group, so I am more than happy to support this excellent Bill. He has already touched on the July 2000 Select Committee report, which I hope the Minister has read. There is also the excellent first report of our all-party group, which, apart from considering the state of archaeology in the UK, made specific recommendations on the trade in illicit cultural objects.
  I want to clarify what is meant by "cultural object", as my hon. Friend the Member for Hendon (Mr. Dismore) asked about that. For example, UNESCO says that such objects are
  "broadly defined, and as well as works of art it includes mineral and palaeontological specimens as well as antiquities, objects of ethnographic interest and elements of historic buildings and moments which have been dismembered."
  That gives an idea of what we are dealing with.
  Michael Fabricant: What the hon. Lady is saying is helpful, but, of course, "cultural object" is defined in clause 2(1) as
  "an object of historical, architectural or archaeological interest."
  Does she agree that human remains, particularly those of some antiquity, would probably be of archaeological interest and would therefore fall under that definition?
  Shona McIsaac: I do not think that that is necessarily the case, although we could argue about it, probably at length, in Committee. As far as I am concerned, certain palaeontological specimens would be covered by the Bill, such as rare fossils. The hon. Gentleman is talking about human remains, but where do those start to become palaeontological rather than purely archaeological? There is a question involving definitions and boundaries here.
  Michael Fabricant: Whether something is palaeontological is one thing, but an object would not
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  have to be stone age to be covered by the Bill. For example, I and most archaeologists would argue that remains found under the city of York, or Jorvik, which is its Viking name, are of archaeological interest. Human remains may be much more recent, and that example relates to about 1,000 or perhaps 2,000 years ago, although I had better not go into Viking history.
  Mr. Allan: Twelve hundred years ago.
  Michael Fabricant: I am advised that the figure is 1,200 years. Such remains would be a darn site more recent than those from the stone age.
  Shona McIsaac: Of course they would be a lot more recent. As my hon. Friends have just said to me, the hon. Gentleman should stop digging. That is my advice to him at this stage.
  Some people think that the issue is minor, but I do not think that it is minor at all. It is fundamentally important. The hon. Member for Sheffield, Hallam touched on the criminal activities involved in dealing in illicit cultural objects, but we must all consider the fact that by removing objects and selling them illegally people are stealing history. They are denying others knowledge that they could gain through studying archaeological artefacts in situ, which would give us the context.
  For example, the discovery of Roman amphorae in Herculaneum would not raise any eyebrows, but finding some in Orkney or in India would create a lot of excitement, as it would be significant. However, if an object is taken away and out of its context, it becomes almost meaningless. We are talking about stealing history—stealing culture itself.
  Estimating the value of that market is particularly difficult, but we should consider insurance claims in the UK for stolen artworks, which amount to about £300 million. If only a small proportion of those stolen works found their way into the illegal market, a great volume of money would be involved. The hon. Member for Sheffield, Hallam gave a few examples, and I want to add some of my own to the debate to show the scale of the problem that we are dealing with. In 1997, an arrest in Germany brought to light hundreds of icons that had been stolen from 46 to 50 churches in Cyprus.
  Mr. Dismore: It is interesting that my hon. Friend has referred to that incident. I suspect that there may not be time for me to catch your eye, Mr. Deputy Speaker, and that was one of the issues to which I wanted to refer in particular. As my hon. Friend knows, I have an interest in Cyprus. I have seen the frescos that were looted from the occupied zone in northern Cyprus, and what happened is important. I pay tribute to the late Dino Leventis, who was one of the great movers behind attempts to deal with the illicit art trade, especially in Byzantine artefacts and remains. Sadly, he is no longer with us, but he played a great part in dealing with these problems.
  Shona McIsaac: That intervention shows the nature of the problem. Cyprus has been a particular difficulty, given the political set-up there. Political problems and instability can create an environment in which such thefts, plundering and looting can occur.

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  In 1998, a police raid on a villa in Sicily revealed antiquities stolen from just one site that were worth more than £20 million. I visited Sicily last year, and I was astonished by the lax attitude taken by the Italian authorities in some of their monuments. As I was going round Roman villas and Greek temples, people were picking at the edges of Roman mosaics and putting tiles in their pockets, but the guards did not bat an eyelid. At the Greek temples, people were picking up small stones and putting them in their backpacks. I was amazed that no one seemed to regard picking up a bit here and a bit there as a problem. Much art and artefacts are stolen from sites in Italy, and tend to find their way on to the illegal and illicit markets in London.
  Mayan sites are a particular problem in South America. It is estimated that about 1,000 pieces of Mayan pottery and other artefacts go on to the markets in the USA every month. Many sites in South America are looted and plundered.
  The illicit trade covers a wide variety of offences. It may just be a failure to get a proper export licence. That is at the lower level of crimes related to cultural objects. At the upper end, people steal valuable items to order. That is increasingly associated with organised crime. There are links with drug trafficking and the illegal arms trade. As the hon. Member for Sheffield, Hallam said, links with terrorist groups have increasingly been established during investigations into stolen cultural objects.
  Sometimes, the object itself, whether it is artwork or an artefact, is used as currency in drug deals. Instead of money changing hands, it is stolen artworks. There is a connection with money laundering and the laundering of artworks carried out in the illegal drugs trade.
  Mr. Allan: The hon. Lady refers to the coincidence of the stolen art trade and the drugs trade. That reminded me of an incident that police officers told me about, which showed how things can sadly go wrong. A group of ancient heads were recovered at a port in the United Kingdom. The officers involved suspected that they contained drugs, and tried to ascertain whether that was the case with the aid of a Black & Decker. Given the state that the heads were left in, they had less value than when they arrived.
  Shona McIsaac: They would certainly be less valuable after being attacked by a Black & Decker!
  There has been a great increase in this illicit trade over recent years, for a number of reasons. One is the opening up of areas in, for instance, Asia and Africa. New sites are constantly coming to light, and are being plundered. Moreover, the looters have better means of detection—better metal detectors, for example. I have heard that some are even beginning to use geophysical surveys to establish where objects are under the earth so that they can dig them up and get out quickly. The internet is providing many new ways of selling the objects, and the police are finding it difficult to track them down.
  There has been phenomenal destruction of sites in Egypt. I do not know whether the hon. Member for Sheffield, Hallam knows of the case of Jonathan Tokeley-Parry, but at the time of his arrest he had been smuggling antiquities out of Egypt since the early 1990s. In an attempt to disguise them, he would dip them in
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  wax or plastic and then paint them to make them look like cheap souvenirs. Some of the stolen goods have been returned to Egypt, and those—let alone the ones that have not been found—demonstrate the sheer volume of the illicit trade in which he was involved.
  Mr. Dismore: I would have mentioned a lacuna in the Bill in my speech if I had had time. Clause 3 refers to the acquisition, disposal, import or export of an item, but not to the alteration of an item. What if someone acquires a piece legitimately, subsequently discovers it to be bogus—or rather tainted—and alters it, but does nothing to dispose of it? I think that that too should be an offence.
  Shona McIsaac: According to my recollection of the Bill, it is a question of knowingly purchasing antiquities—
  Mr. Dismore: I am talking about altering them.
  Shona McIsaac: I think we can discuss that in Committee.
  Let me list some of the objects handled by the character I mentioned earlier. There were 25 papyrus texts dating from 300 BC, Coptic textiles, a sixth-dynasty limestone relief of a seated woman, terracotta statues, Graeco-Roman mummy masks, a bronze statue of the god Horus, a royal head carved in granite, coloured reliefs from Egyptian tombs and 35 items looted from the tomb of Hetep-Ka. Further items have subsequently been returned.
  That was just one individual dealing with some sites in Egypt. It gives us an idea of the extent to which Egypt is being plundered to feed markets that are largely in the west.
  I am also becoming increasingly concerned about looting in Mali, which has more archaeological sites in Africa than any other country except Egypt. A recent survey of just 125 sq m discovered that 45 per cent. of the 834 archaeological sites in the area had already been looted, 17 per cent. of them to a serious extent. Looting is spreading, and it is taking place before proper investigation is possible. We are losing history: history is being stolen. The percentage of sites looted in Mali represents a phenomenal theft of history. Our knowledge of human culture simply vanishes in such cases.
  In 1997 and subsequently, the magazine British Archaeology has reported that looted objects are still pouring into the country. That is why the Bill is necessary. We must create a criminal offence: this loophole has been there for far too long.
  Objects are being removed from sites in the United Kingdom, too. It is an offence to remove an object from a scheduled ancient monument but not all ancient monuments in the UK are scheduled. I believe that about 20,000 sites are not scheduled, which means that there is phenomenal potential for those sites to be looted.
  Even from the scheduled monuments there is looting. The Roman site of Corbridge at Hadrian's wall has been looted on many occasions. One night, about 55 holes were dug into that Roman fort by night-hawks trying to find coins and other objects to sell.

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  The other site in the UK that caused great concern was Wanborough near Guildford. The horde of coins that was plundered there was worth about £2 million. Again, we have lost the context: we do not know how that find relates to the religious buildings that were on that site.
  Although it is not touched on by the Bill, I hope that English and Welsh law can be changed to mirror Scottish law. In Scotland all new finds are property of the Crown and that can help to deal with looting, whereas in England and Wales, new finds are not property of the Crown unless they are deemed treasure, and treasure is determined by the metal content of that find. That is a great loophole in the law. Making all new finds in archaeological sites property of the Crown could help to stop some of the looting of our ancient monuments.
  Mr. Dismore: There is another problem with the definition of monument in the Bill. It would not catch, for example, people who were simply using a metal detector in an open field if there were no building nearby. My hon. Friend is right when she talks about treasure and metal content but other objects may be found through field-walking in an area that is of general interest but does not contain an excavation or any other site that is defined as a monument in the Bill. Would she like to comment on that?
  Shona McIsaac: Someone who is metal-detecting or field-walking may find something and remove what they find without proper excavation. While there are good metal detectors who work with archaeologists on sites, if some people detect something and dig through, they can destroy the archaeology and that is a worry.
  If anyone wants to appreciate the sheer volume of the problems relating to stealing culture, they should read a book that was published by the McDonald Institute for Archaeological Research in Cambridge about three years ago called "Stealing History", the phrase I used earlier—people are stealing our history. That book details many of the most serious cases of plundering and looting of archaeological sites in the UK. It also details cases involving Khmer temples, mosaics from Kanakariá, Cyprus, which may be the case to which my hon. Friend the Member for Hendon alluded, Lydian treasure from Turkey, the Moche tombs of Sipán in Peru, the Wanborough Romano-British temple and many others, including those in Mali that I mentioned.
  It is a phenomenal problem. We have not taken it seriously until now. The Bill goes some way to dealing with that problem. I hope that every hon. Member in the House today will support the Bill and that it clears all its stages as soon as possible, because we cannot allow our history and heritage to be stolen at such an alarming rate any longer.
  1.54 pm
  Michael Fabricant: I rise to support the Bill. As the hon. Member for Sheffield, Hallam (Mr. Allan) said, its genesis lies in the report produced by the Select Committee on Culture, Media and Sport, on which I have the honour to serve, although I was not
  1230
  serving on it when the report was issued in July 2000. I had decided to take a brief break from that Committee and sit on the Home Affairs Committee instead. After a year and a half, I decided to rejoin the Culture, Media and Sport Committee. Apart from anything else, the Ministers in that Department are much more interesting than Home Office Ministers.
  I was relieved to hear that the Bill will not cover cultural objects that have been in the possession of British museums—I consciously use the plural—for several years. The Elgin marbles are a rather controversial group of objects that the Greek Government would like to obtain. As I said, I am delighted that they would not fall within the ambit of the Bill, because the Elgin marbles have been better cared for in the United Kingdom than they would have been if they had been kept in Greece. Over the past 50 years, cultural objects kept in Greece have suffered huge corrosion.
  Mr. Eric Forth: Although we have been reassured by its promoter that the Bill would have no effect on, for example, the Elgin marbles in the British Museum, does my hon. Friend share my worry that the Bill would strengthen the argument for returning the Elgin marbles, because it would alter the atmosphere and environment in which the debate takes place?
  Michael Fabricant: I share my right hon. Friend's concern, which is why I intervened on the hon. Member for Sheffield, Hallam at the outset to ask about that specific point. I was greatly reassured and I know that people both inside and outside the House will note his response. When the Minister makes his winding-up speech, I hope that he will emphasise that this important Bill does not cover objects such as the Elgin marbles.
  The hon. Member for Cleethorpes (Shona McIsaac) made an important point when she said that once an object is removed from its original place, without detailed records kept of where, how and in what condition it was found, it becomes almost worthless, certainly so far as archaeologists are concerned. She was right that it is vital to keep records of where objects are found.
  I come from a seaside town and often saw people walking around with metal detectors. I hope that whenever such people find something—whether treasure trove or not—they record where they found it and, preferably, do not move it until archaeologists and other experts are brought to the site. It is worth noting that Israel has a separate police force, the architectural police, to deal with the problem. The hon. Member for Cleethorpes has witnessed, as I have, people picking up objects in the area of the Parthenon, and in Herculaneum and Pompeii, for example. Remarkably, the guards simply stand there, and seem to do nothing but watch as objects are picked up and put into rucksacks. Sometimes objects are even broken off buildings and put into rucksacks, which is truly extraordinary.
  Shona McIsaac: In places such as Herculaneum, Pompeii and Villa Imperiale in Sicily, I saw people

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  breaking bits off: they were not loose bits lying in the soil nearby; people were actually chipping away at the edge of mosaics.
  Michael Fabricant: That is a crime in every sense of the word. It is not only Europe that is affected. I am a keen walker and I have been to Inca sites in Peru, Mayan sites in Belize and the Yucatan peninsula, where there are no guards at all. It is worth noting, although it does not fall within the ambit of the Bill, that they have the problem not only of people breaking off objects for sale or for souvenirs, but of people clambering all over sites—I must confess that to some degree I, too, have committed that crime—and presumably damaging those objects of antiquity. That has to be wrong. Such objects tell us about our whole heritage. That is true not only of the nation of Britain, but of the nations that existed in the old Mayan and Inca civilisations. They, too, represent the heritage of our planet and the human race.
  The hon. Member for Sheffield, Hallam raised an interesting point about shipwrecks. Time and again, we hear about objects that are retrieved from shipwrecks. Incidentally, huge sums of money are generated by people sponsoring those archaeological investigations into shipwrecks and selling the objects that are pulled out. That gives rise to the question of whether those objects were retrieved from shipwrecks in territorial waters or outside territorial waters on the high seas. The provenance of such objects is unknown. It is imperative that when the Bill passes through Committee—on the assumption that it will, as I hope, receive its Second Reading—it includes a clear definition to ensure that it covers even objects that are found on the high seas: otherwise, that would be a major lacuna.
  Mr. Allan: The hon. Gentleman may be comforted to know that work is being undertaken on that in relation to the UNESCO convention on the protection of underwater cultural heritage of 2001, so there is a multi-front push aimed at dealing with the problem. The hon. Gentleman is right that some situations at sea require specific international agreement.
  Michael Fabricant: I thank the hon. Gentleman for that reassurance.
  I hope that the Bill will receive considerable support in the House, given that it is welcomed by the Department for Culture, Media and Sport and that it will protect not only the heritage of other nations, but that of our own. The Bill is rather like the previous Bill that we debated, which dealt with dog's mess and will help to control the activities of people who look after dogs, in that it will control the activities of people who go around with metal detectors—a perfectly reasonable activity—by ensuring that they do not knowingly, or unknowingly, because they simply cannot be bothered to find out about it, remove objects of archaeological interest. Let us never forget that those objects tell a story about our past, and by knowing about our past we can perhaps learn something about our future.
  2.2 pm
  Roger Casale: I want to make a few brief remarks to put on record my support for this important Bill. First, I congratulate the hon. Member
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  for Sheffield, Hallam (Mr. Allan) on promoting it. In many ways, it is unique, because it will affect the work of three Departments—the Department of Trade and Industry, the Home Office and the Department for Culture, Media and Sport, which is represented in the Chamber today by the Minister.
  Those who think that looting and pilfering from archaeological and artistic sites is an activity that is engaged in by petty criminals on the margins need a wake-up call, and the Bill provides that. Such activities are increasingly linked to the world of organised international crime—not only drug trafficking, but terrorism. It is no surprise to learn that organisations such as the Taliban that show such disdain for human life have a similar disregard for our cultural heritage and are willing to trade in, and on, it.
  Of course, nobody wants to restrict the legitimate art trade. It is a great joy to be able to enjoy exhibits from other countries in our own country. I do not want to trespass too far into the debate about the British museum, which is so full of objects from abroad that some people—not me—refer to it as the British swag bag. We like to be able to enjoy those objects. I am sure that many hon. Members have had the opportunity of visiting the wonderful Aztec exhibition, but Mexico, traditionally, does not allow artistic objects out of the country.
  While we want opportunities to see artistic objects from abroad in our own country and there is also a legitimate art trade, we must clamp down on looting and the illicit trade in objects pilfered from artistic sites. We want to improve access to sites of our own cultural heritage, as well as stamping down on international terrorism and drug running, where there are so many financial links to the trade in illicit objects. We need the Bill.
  As has been said, many artistic objects from Italy are traded through London. Members of the all-party group on Italy, of which I am chairman, have been in touch with the Italian Government about that trade. The group supports the Bill and would be pleased to work with the hon. Member for Sheffield, Hallam and the Government, if they support the measure, on strengthening bilateral co-operation to clamp down on the illicit trade in artistic objects from Italy.
  2.5 pm
  Mr. Mark Francois: It is a pleasure to speak on the Bill, which was so clearly presented by the hon. Member for Sheffield, Hallam (Mr. Allan). The Bill has supporters on both sides of the House, including the all-party group on archaeology, ably represented by the hon. Member for Cleethorpes (Shona McIsaac) who made a well-informed contribution to the debate—as did the promoter of the Bill.
  The Bill can trace its own cultural heritage back to the previous Parliament, when the then Select Committee on Culture, Media and Sport conducted an inquiry into all aspects of the illicit trade in cultural property. The Committee's report, published in July 2000, recommended creating an offence of trading in certain categories of stolen or illegally excavated cultural property.
  The Committee's work was complemented by the establishment, in May 2000, by the then Secretary of State for Culture, Media and Sport, of a ministerial

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  advisory panel on the illicit trade in cultural objects, otherwise known as ITAP. As we have heard, the panel was chaired by an eminent barrister and, in December 2000, it recommended a similar criminal offence. ITAP defined the offence as to
  "dishonestly import, deal in, or be in possession of any cultural object, knowing or believing that the object was stolen, illegally excavated, or removed from any monument or wreck contrary to local law".
  Michael Fabricant: Does my hon. Friend think that the locus of the Bill would cover icons stolen, or given away illegally, from the Soviet Union as its Government were collapsing and needed hard currency? Does he consider that the Bill could cover works of art stolen during the second world war, where there is no acknowledged owner but where the object originated in a state occupied by German forces?
  Mr. Francois: My hon. Friend makes an interesting point. I understand that the provisions will apply only to items stolen after the Bill comes into force; it would not be retrospective in the way that he suggests. Nevertheless, my hon. Friend has recorded an important point to which the Standing Committee will doubtless return.
  We understand that, like us, the Government are broadly sympathetic to such a measure, but that constraints on parliamentary time have meant that it has not been possible to enact it. The Bill would remedy that.
  The Bill makes it an offence for a person or corporate body knowingly to acquire or dispose of, import or export a
  "tainted cultural object … of historical, architectural or archaeological interest".
  Such an object would be tainted, as defined in clause 2, if
  "it is removed from a building or structure of historical, architectural or archaeological interest where the object has at any time formed part of the building or structure, or … it is removed from a monument of such interest".
  That means that the Bill is wide in its geographical scope and in the type of situation for which it provides protection. Geographically, it applies to
  "the United Kingdom or elsewhere,"
  thus avoiding a prescriptive list of countries or specific jurisdictions that are to be covered by its conditions. The Bill would make it an offence to trade knowingly in tainted cultural objects from whichever country around the globe they happen to originate.
  The Bill also encompasses a variety of types of location for which it provides protection. It potentially covers theft from situations as diverse as ancient monuments, archaeological digs, iron age hill forts, maritime shipwrecks and military battlefields. As someone with a strong interest in military history, I am especially pleased to see the latter two categories covered. I happen to believe that naval shipwrecks and battlefields, as places that recall the ultimate sacrifice, are worthy of particular respect.
  I want to provide some practical examples of how the Bill might operate. During the second world war, my father, Reginald Francois, served for a time at Scapa
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  Flow, the great natural harbour in the Orkneys, which was the principal base of the then home fleet of the Royal Navy. Shortly after the outbreak of hostilities, the battleship HMS Royal Oak was torpedoed by a German submarine. She still lies at the bottom of the harbour as a war grave. Moreover, in 1919, shortly after the conclusion of the first world war, a number of capital ships of the German high seas fleet were deliberately scuttled. They still lie on the sea bed at Scapa Flow. Official diving expeditions regularly visit those ships, as is right and proper. However, there are sometimes unofficial expeditions, when attempts are made to remove artefacts, some of which might ultimately come up for sale to less-than-scrupulous private collectors.
  I can give a land-based example from the heart of my constituency—Rayleigh castle, the oldest castle in Essex. On occasion, individuals have attempted to remove small items from what is left of that fortification. I am therefore pleased to welcome this measure this afternoon—both as the Opposition spokesman and as an hon. Member with constituency interests. The Bill will help to protect sites in my constituency.
  Importantly, the Bill does not seek to impose a restriction on the trade, import and export of cultural objects per se. To seek to create a much wider restriction would prove unworkable and, in any case, would be likely to fall foul of international law. The United Kingdom enjoys a specialised, yet very important, trade in legitimate cultural objects. That trade should not be put at risk by overly restrictive legislation. In that regard, the Bill requires a relatively high burden of proof. I think that it was deliberately designed to do so. In order to gain a conviction under this legislation, the police—or, in certain circumstances, Her Majesty's Customs and Excise—working with the Crown Prosecution Service, would need to prove that the accused knew or believed that the object was tainted and acted dishonestly in the acquisition, disposal, import or export of the object. It would therefore be difficult, for example, to convict a person who had purchased a tainted cultural object but had done so in all good faith that it had been acquired legitimately. Nevertheless, where such tests are met, the Bill—which carries a maximum prison sentence of seven years—would, we hope, have sufficient deterrent effect to reduce the number of incidents of such cultural crimes occurring in future. That sentence means that the measure is by no means toothless.
  The regulatory impact assessment relating to the Bill suggests that its provisions would not be overly burdensome. As the explanatory notes that have helpfully been prepared by officials in the Department for Culture, Media and Sport point out, the impact of this legislation on charities or voluntary organisations is likely to be minimal. The businesses primarily affected will be those operating in the areas of art, fine architecture and the antiquities trade—including dealers and auctioneers. However, importantly, the Bill should help to regulate that trade for legitimate businesses, thus providing protection for them to carry on their lawful business, while making it more difficult for unscrupulous and illegal traders to operate. That must be welcome.
  Michael Fabricant: Does my hon. Friend accept, too, that legitimate businesses and traders in those objects

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  always check their provenance and, therefore, because they would not knowingly trade in objects that come within ambit of the Bill, they will not be affected by it?
  Mr. Francois: That is exactly my understanding of how the Bill is designed to operate, and it must be good that it seeks to uphold the integrity of those who act within the law and to punish those who work outside it.
  Taking account of all those factors and in wanting to reiterate the important point that a number of my hon. Friends made about the Elgin marbles, I wish to say that, overall, this is a worthy and relatively non-contentious Bill. Her Majesty's Opposition are therefore pleased that the Bill is being given a proper Second Reading on the Floor of the House. Finally, as this represents my debut at the Dispatch Box, I am doubly glad to wish the Bill well as it passes towards its consideration in Committee.
  2.15 pm
  The Minister for Tourism, Film and Broadcasting (Dr. Kim Howells): I congratulate the hon. Member for Rayleigh (Mr. Francois) on a very fine debut at the Dispatch Box. I also congratulate the hon. Member for Sheffield, Hallam (Mr. Allan) on securing time for this important Bill and, indeed, on the manner in which he introduced it. I am also grateful to hon. Members for the fact that we have had a wide-ranging debate, in a relatively short time, on an absorbing subject that concerns so many across the political spectrum.
  I should like to draw the House's attention to the background to the Bill and to the Government's most recent statement on protecting and sustaining the historic environment. In "The Historic Environment: A Force for Our Future", the Government express our commitment to protecting both the international heritage and the cultural legacy of this nation. Of particular concern to us in recent years is the well-documented rise in the international illicit traffic in art and antiquities. Apart from threatening the integrity and commercial stability of the United Kingdom's art market—a point made a few moments ago by the hon. Member for Rayleigh—that activity contributes, through plundering monuments and sites, to the wholesale destruction of the world's archaeological and architectural heritage.
  The increasing number of private culture consumers and the rise of culture tourism on a global scale have combined to open up new markets and stimulate demand. New technology has also revolutionised the means of detection and destruction. My hon. Friend the Member for Cleethorpes (Shona McIsaac) wanted to say more about that, and she certainly could have talked about the fact that the bulldozer, sticks of dynamite, power tools and metal detectors, which have been mentioned, have replaced the pick and the shovel—sometimes with disastrous results.
  Far from injecting hard currency into hard-pressed local economies, local people usually receive very little in return for destroying their own cultural heritage. The hon. Member for Sheffield, Hallam and my hon. Friend the Member for Cleethorpes listed places that are poor by any standard but have great cultural treasures that ought to benefit the people of those areas, and we must do everything that we can to help them.
  1236
  Asset-stripping that finite resource is, by definition, economically unsustainable. Not only are we concerned about the violent separation of major archaeological finds from their geographical and social context, but we are now more aware of the link between trafficking in antiquities and other illegal and, indeed, organised criminal activities—notably, of course, drug smuggling, money laundering and the corruption of impoverished bureaucracies overseas.
  Meanwhile, London, by virtue of its long-established commercial function, has become known as a centre of the global supply network in stolen and unlawfully removed cultural property. The pattern of movement and dispersal through a chain of dealers is a regular practice and details of provenance—as the hon. Member for Lichfield (Michael Fabricant) told us—can become lost in the process, and it is very important that we address that. Licit and illicit antiquities become hopelessly mixed, and looted artefacts acquire a patina of legitimacy, as dealers and auction houses can ultimately sell them without provenance.
  Despite the many positive steps in this country, particularly in London, towards self-regulation, it is widely acknowledged that many antiquities surface on the London market without any declared previous history or archaeological context. The British antiquities market depends for its continuing success on the standards and perceived integrity of its participants. Indeed, the auction houses and established galleries, have a strong business interest in the elimination of the illicit market. Dealers' associations affiliated to the British Art Market Federation maintain that their members have made considerable efforts in the past decade to distance themselves from such traffic, including, for example, by adopting voluntary codes of conduct under which participants undertake to the best of their ability not to import, export or transfer the ownership where they have "reasonable cause to believe" that an imported object has been stolen, illegally exported or illegally removed or excavated.
  In July 2000, the Select Committee on Culture, Media and Sport, under the chairmanship of my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman), conducted an inquiry and published a report, "Cultural Property: Return and Illicit Trade". The inquiry brought together the opinions of national Governments, archaeological bodies, the antiquities trade, journalists, cultural groups, police and other law enforcement agencies. The Government welcomed the Committee's recommendations on proactive measures to prevent the UK from being used as a haven for illicit traffic in cultural property. Following the recommendation to introduce a criminal offence of
  "dealing in cultural property in designated categories from designated countries which has been stolen or illicitly excavated in or illegally exported from those counties after the entry into force of the legislation, with a defence in law based on the exercise of due diligence as defined in that legislation",
  my Department appointed an expert advisory panel to review legislative and non-legislative options for action. The panel's membership, as we have heard, was drawn from the worlds of archaeology, museums and the art trade, and its report, published in December 2000, was a significant landmark in the development of public policy in this area, not least because it represented for

  1237
  the first time a consensus between all groups interested in the trade in cultural objects on practical measures to improve the current situation.
  The panel recommended that
  "to the extent it is not covered by existing criminal law, it be a criminal offence dishonestly to import, deal in, or be in possession of any cultural object, knowing or believing that the object was stolen, illegally excavated, or removed from any monument or wreck contrary to local law".
  The provisions in the Bill before the House have arisen as a result of that recommendation, which the Government accepted in "The Historic Environment: A Force for Our Future". The Bill is not party political, but has arisen from a need in the heritage and trade sectors. The policy has Government support, but essentially it has been driven and informed, under the aegis of the Select Committee and the illicit trade advisory panel, by those who will be most affected by the measure.
  Mr. Francois: I thank the Minister for his courtesy in giving way and for his kind remarks earlier. He is right that the Bill is not party political, but may I press him on a point made by my hon. Friend the Member for Lichfield (Michael Fabricant) and my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) about the Elgin marbles? As the legislation is not retrospective, will he confirm for the record that it will not in any way affect the status of the Elgin marbles, and that that remains the position of Her Majesty's Government?
  Mr. Dismore: The hon. Gentleman means the Parthenon sculptures.
  Dr. Howells: I can confirm that the Parthenon sculptures, as my hon. Friend refers to them, would certainly not be covered by the legislation.
  The hon. Member for Sheffield, Hallam stressed the importance of international co-operation. Certainly, the more co-operation and co-ordination that we can get, the easier the task will be and, hopefully, the fewer the number of prosecutions under the Bill when it comes into force.
  Among the other key recommendations of the ministerial advisory panel was accession to the 1970 UNESCO convention on the means of prohibiting and preventing the illicit import, export and transfer of ownership of cultural property. The convention makes provision to secure the protection of the cultural heritage of the United Kingdom and other signatory countries. People should remember that the convention protects our cultural heritage as well as that of other countries. The convention is not retroactive; it is applicable only to cultural objects stolen or illicitly exported from one state party to another state party after the date of entry into force of the convention for both states concerned. The UNESCO convention has been adopted by 93 countries to date, including in recent months Albania and Rwanda. Such widespread adoption enhances its value as a means of protecting cultural heritage in the UK and other signatory countries.
  Mr. Dismore: On the subject of states, can my hon. Friend clarify the applicability of the Bill to the Crown?
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  Many of the bodies that may be dealing in art objects may be Crown bodies in one form or another. Some of the museums, for example, may be Crown bodies.
  Dr. Howells: I do not know, but I shall try to find out for my hon. Friend. I am sure that he will have hours of play with that in Committee.
  In completing the formalities of acceptance on 31 October 2002, the UK Government sent out a powerful signal both to those who do so much damage to the world's cultural heritage and to the international community that the UK is serious about playing its full part in the international effort to stamp out the illicit trafficking in cultural objects.
  The need for a criminal offence is at the heart of the Bill. Action on the matter was considered too important to be left to the vagaries of private law, and a do-nothing option is not viable, nor is a mere amendment to the existing offences under the Theft Act 1968. Given the continued and continuing growth of the illicit traffic in cultural objects, experience shows that voluntary codes of due diligence are limited in their effect on the criminal element of the trade, which ignores them. The panel has advised, and the Government agree, that a pre-emptive measure such as the creation of a new criminal offence to counter the illicit traffic in unlawfully removed cultural objects is the best solution.
  It is worth remembering that until recently, the UK was branded as an internationally renowned centre of illicit trade in antiquities. It is true that for the previous 30 years or so, the UK stood on the sidelines of decisive international action against illicit traffic in art and antiquities. However, today the British art and antiquities market is operating in a very different climate. Since publication of the recommendations of the Culture, Media and Sport Committee in 2000 and of the ministerial advisory panel in December of the same year, there has been dramatic progress on measures to combat the looting of archaeological sites and the unlawful trafficking in cultural property. The Government have recently become a state party to the UNESCO convention and are working to introduce a package of measures designed to strengthen their treaty obligations, central to which is the creation of a new criminal offence of dealing unlawfully in cultural objects.
  The Government acknowledge the wide-ranging support for the Bill across the House. That support cuts across party interests and across the often mutually exclusive worlds of archaeology and the antiquities trade. I am pleased to see that the Bill is endorsed by the all-party parliamentary archaeology group in its recent report on the current state of archaeology in the United Kingdom. Once again, let me say how pleased I am to offer the support of the Government for the measure. I commend the Bill to the House.
  Mr. Allan: With the leave of the House, I thank all hon. Members who have taken part in this interesting debate and commend the Bill to the House.
  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).

  Needle Stick Injury Bill
  Order for Second Reading read.
  2.29 pm
  Laura Moffatt: I beg to move, That the Bill be read a Second time.
  Mr. Eric Forth: It is unusual, is it not, for a Bill to have such a brief introduction, but I am sure—
  Mr. Deputy Speaker (Sir Michael Lord): Order.
  It being half-past Two o'clock, the debate stood adjourned.
  Debate to be resumed on Friday 4 July 2003.

  Remaining Private Members' Bills

    HOUSING (OVERCROWDING) BILL
    Order for Second Reading read.
    Hon. Members: Object.
    To be read a Second time on Friday 20 June.

    HEALTH AND SAFETY AT WORK (OFFENCES) BILL
    Order read for resuming adjourned debate on Question [31 January], That the Bill be now read a Second time.
    Hon. Members: Object.
    Debate to be resumed on Friday 20 June.

    GOVERNMENT POWERS (LIMITATIONS) BILL
    Order for Second Reading read.
    Hon. Members: Object.
    To be read a Second time on Friday 16 May.

    CROWN EMPLOYMENT (NATIONALITY) BILL
    Order for Second Reading read.
    THE SOLICITOR-GENERAL, by Her Majesty's Command, acquainted the House, That Her Majesty, having been informed of the purport of the Bill, had consented to place Her Prerogative and Interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
    Hon. Members: Object.
    To be read a Second time on Friday 13 June.

  Rural Development
  Motion made, and Question proposed, That this House do now adjourn.—[Jim Fitzpatrick.]
  2.31 pm
  Mr. Alan Hurst: It is always a pleasure to speak in an Adjournment debate, especially on a Friday afternoon, when the House is normally so full. I am also grateful for the opportunity to raise what I consider to be a particularly important matter not only for the Braintree district, but for rural areas throughout south-east England and probably further afield.
  The printed title of the debate is considerably wider than the matter that I wished to raise today. The original unabridged title was "The threat of speculative development in rural areas", which stemmed from events in my constituency and, in particular, the parish of Stisted. Stisted is situated a few miles from the town of Braintree, but it is an example of completely unaffected rural England. It is a small village that still retains a school, public house and church. In addition, there is a wide-ranging hinterland. The area is high-grade agricultural land interspersed with small woodland areas of oak and lime—the traditional woodland of eastern England, going back to prehistoric times.
  It is the local wish and belief that the area should remain in that condition and local people are much exercised about what has happened recently. A farmer in the Stisted parish sold an allotment of land in the region of 50 acres in size. I am told that he believed that he was selling it for the purpose of grazing horses, but the price paid was above that of agricultural land. Soon afterwards, other events came along, but it is worth recalling that the land itself is adjacent to a nature reserve and close to other woodland, and is served by narrow, country back roads.
  However, local people soon discovered that the modern age had intruded, as the sale of the land was being readvertised via the internet. It was being advertised not as one whole lot of 50 acres or so, but in small plots of up to one fifth of an acre. The internet parcels had divided the land into 236 individual plots and the asking price was between £3,000 and £6,000 a plot. It is estimated that the agricultural value of the land was £2,500 to £3,000 per acre. The interneted plot land value was about £25,000 per acre. Quite a tidy profit would be made if all the plots were sold. It is true that Gladwish, the company that offered the plots, did not pretend that the land had planning consent. The advertisement on the internet said specifically that the land was sold without planning consent and that the company's business and purpose was to sell agricultural and forestry land. However, it also said that agricultural land prices are lower than those for plots with planning consent, that land prices rise faster than house prices and that a solicitor was not necessary to complete the transaction. I do not think that I need to declare an interest at this point because that is a negative for solicitors, not a positive.
  Stisted was not the only site that was advertised on the internet. Gladwish advertised sites in Sussex, Norfolk, Surrey, Hertfordshire, Hampshire and Bedfordshire, and I understand that other companies trade in a similar

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  way. Last month's Farmers Weekly ran an article on the problem in Norfolk and quoted a spokesman for Gladwish as saying:
  "It might be that one day some of these plots will get permission for development."
  The Eastern Daily Press, which serves an area of East Anglia slightly north of my division, reported that the Office of Fair Trading had ordered Gladwish to remove a statement from its website that said that it would be deemed "unethical" if people approached local planning departments about plots' planning potential before sales were completed. It also said that representatives of the company would meet prospective purchasers only if they turned up at the site with cash. I do not know whether the literal meaning of "cash"—pounds, shillings and pence, as it once was—applies, or whether cash may include credit cards. I suspect that the company requires a ready form of cash to allow completion there and then.
  A spokeswoman for the Council for the Protection of Rural England said that
  "barbed wire and fence posts are appearing in very scenic areas"
  of the Norfolk site. In Stisted, the fear is that the new plot holders will start to site caravans, huts and shelters on the land, that the land will be divided into small segments and that the area will assume the character of a shanty town.
  The scheme reminds me of the champagne auctions that were held in our county some 100 years ago. Such events were a Victorian version of what we are seeing now, although there are several differences. Land developers would go out to the darkest corners of rural Essex and buy large tracts of land at almost give-away prices. They advertised the land in London, hired trains to take Londoners to the station nearest to the land, and offered a plot of land and a glass of champagne for £5. The whole of eastern and southern Essex was covered with plots that were marked out on maps. Some of the plots grew into towns; Basildon was a plot-land town long before it was a new town. If one looks at maps of some large areas of country in Essex, they are marked with plots, roads, and even with sites for public houses and hotels. However, the grass still grows as it did 100 or so years ago.
  There is a fundamental difference between such auctions and the internet operation. The Londoners were brought down to see the land. They could make a judgment about whether to buy or not and they bought on the spot—with or without the benefit of champagne. However, it is believed that few people who buy land on the internet come to see it first. They buy it as a commodity.
  Local people from the parishes of Stisted, which is in my parliamentary division, and Greenstead Green gathered at Stisted village hall a few fortnights ago. Greenstead Green is in the division of the right hon. Member for Saffron Walden (Sir Alan Haselhurst), which comes within a few yards of the site. Stisted village hall is not the Albert hall. Its dimensions are much smaller and when I entered it a little late because of another engagement, it was packed. It was standing room only; there were more than 200 people in the hall. When one considers that the combined population of
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  the parishes of Greenstead Green and Stisted is no more than 900, one begins to understand the proportion of people who were exercised by what was to happen.
  The sale of agricultural land carries with it a general development order, which allows the owners of any part of the land to fence it, construct shelters in connection with animal husbandry and go a little further if they claim that it is to be forestry land. People who bring a sheep on to their plot can construct a shelter for the sheep or themselves. The entire 50 acres could easily become a mosaic of caravans, camper vans and sheds in connection with pseudo-smallholder activities.
  There was some concern at the public meeting about the speed with which Braintree district council could move. Everybody acknowledges that it moved with exemplary speed. In days, it laid an article 4 direction. I was not too familiar with that before the problem arose. However, once laid and approved by the Secretary of State, it prohibits any form of development on the land, including fencing and constructing shelters.
  The direction has two parts. First, it prohibits the erection of fences, walls and temporary buildings without planning consent. That prevents the other feature of the modern age, the car boot sale. There is no 28-day provision for such use once an article 4 direction has been laid. Secondly, it prevents the use of the land as a campsite either for caravans or tents.
  My praise does not extend only to Braintree district council. The Secretary of State, operating through the Government office for the eastern region and the appropriately named Mr. Speed, approved the order in seven days. Consequently, the residents of Stisted and Greensted Green feel that they have the best protection that the law can currently provide.
  There is a problem that, once the plot holders realise that the land cannot be used for make-believe farming or forestry, it will become neglected and become a parcel of thistles, ragwort and other weeds, which can damage not only that land but neighbouring land and preserved and managed woodlands. The Weeds Act 1959 gives local authorities the right to take action if a landholder fails to deal with weeds, especially those that I mentioned. There is an obvious anxiety that the Act is not frequently invoked and that it may be expensive for local authorities to pursue up to 200 plot holders in connection with thistles and ragwort that are spreading beyond the land. Nevertheless, local action has halted the initial danger.
  I bring the matter before the House for two reasons. First, I want to convey as loudly as possible a warning to those who skim the internet against buying plots of land unseen, without legal advice and local authority search. For the companies involved, the scheme has been a modern version of the south sea bubble. Large sums of money can appear to be made, but they can also be lost. Gladwish does not appear from its internet site to be losing money. I am not a frequent user of the internet, someone has to gain access to it for me so that I can see what it is. However, I have read that Gladwish boasts and brags that its sales rose from £92,000 in 1995 to almost £5 million last year. So it is not losing any money. Indeed, it makes a point of saying that it is continuing to make money.
  For the Government to help as much as they can, they must alert local authorities as to the steps that need to be taken quickly to protect land when this problem arises.

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  These days, we have kits and packs for everything. A kit or pack might well need to be made available to local authorities by the Government, showing them exactly the circumstances in which an article 4 directive can be made, and how the process to make it takes place. Such information used to be contained in a Government circular, but these days perhaps it needs to be more detailed than that, and more readily available.
  In conclusion, unless the problem of internet sales is dealt with, the whole structure of town and country planning—particularly country planning—will become a shambles, just as those sites will do if they are left unchecked.
  2.45 pm
  The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Mr. Tony McNulty): I congratulate my hon. Friend the Member for Braintree (Mr. Hurst) on securing a debate on such an important issue. As he has said, its import travels far beyond the boundaries of his own division. It is always a pleasure to follow my hon. Friend because, when I made my first dithering contribution to the House—that is, my maiden speech—he followed me. So, seeing him on his feet will always bring back memories of a mixture of heady, happy and very scary moments for me.
  It would be useful if I put this matter into the broader context of planning in the south-east. My hon. Friend will no doubt be aware that part of the Braintree district is in the London-Stansted-Cambridge growth area. That area has been experiencing strong job growth, and household formation has been growing at a faster rate than the housing stock. It will initially be for the regional planning body to prepare a sustainable development strategy for the growth area, and to consider whether the exceptional circumstances exist to justify a review of the green belt. If that is the case, draft regional planning guidance 14 should broadly indicate where local development frameworks should review green belt boundaries.
  However, the fact that land is located in the south-east, in areas such as Braintree, does not mean that it should be developed. We have made it clear that, in deciding which sites to allocate for housing, local planning authorities should assess their potential and suitability for development against a range of criteria which includes: the availability of previously developed sites; the location and accessibility of sites to jobs, shops and services by modes other than the car; the capacity of existing infrastructure, including public transport, water and sewerage, to take the additional development; other utilities and social infrastructure; the ability to build communities; and the physical and environmental constraints on the development of land.
  Of course, in a plan-led system, the need for up-to-date development plans is in everyone's interest. The Braintree local plan was adopted in 1995, and makes provision for development up to 2001. The first draft of the replacement plan was deposited in January 2001, and a revised deposit is due in the near future. This is not ideal, but I should point out that it is not a reflection on Braintree district council; in part, it is a reflection on the system that the planning legislation currently before the House intends to change.
  It is important to put the matter into context, because that leads me to what I want to say about speculative developments. Despite our clear plan to build
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  sustainable communities for the future, there will almost inevitably be some who wish to misinterpret our intentions. I have to say strongly, however, let them be warned. It is a mistake for developers and property companies to think that the need for housing in the south-east can be used to undermine long-standing policies for the protection of the countryside and the green belt. To put it quite simply and starkly, it cannot.
  We have repeatedly made it clear that we will protect our countryside and take action to make the best use of land, especially previously developed land. For example, following the Government's revision of policy planning guidance note 3 on housing in 2000, developers must take account of the 22,000 hectares of developable brownfield land in London, the south-east and east before touching green fields. That in turn will help to focus development in towns and cities, rather than leapfrogging the green belt into other areas.
  We have also made it clear that it will be essential for all development, especially new housing developments, to respect the principles of sustainable development and address potential impacts on the environment alongside social and economic goals. In that way, we can ensure that in tackling housing shortages we protect the countryside and enhance its quality rather than create unnecessary urban sprawl. However, we must also address the housing needs of rural communities, which are often the guardians of the countryside.
  To reinforce the point, we have said in the communities plan that we will maintain the target that 60 per cent. of additional homes should be built on previously developed land. We will also ensure that every local authority has undertaken an urban capacity study, as set out in PPG3, to identify the full potential for using previously developed land and conversions. We will protect the countryside through a target for each region to maintain at the very least, or indeed to increase, the area of land designated as green belt in local plans. We will use green belt and countryside protection tools to maintain the openness of the countryside around areas of growth and to prevent urban sprawl.
  Wasteful use of land will, therefore, be prevented by ensuring that land is not used in a profligate way and that development extends into the countryside only where other sustainability considerations make that the best option.
  Turning to the specific issue that has caused so much concern for my hon. Friend and his constituents, I should explain that permitted development rights, granted by Parliament, are removed only in exceptional circumstances, and only when a real and specific threat to the interests of the proper planning of an area has been demonstrated. To do otherwise would undermine the rights granted to the public to undertake minor works, and certain temporary uses, without the need for planning permission.
  However, when it is shown that such a threat exists, we appreciate that prompt action is required, by both local government and central Government, to ensure that, in appropriate instances, permitted development rights are removed before uncontrolled and potentially harmful development takes place. Moreover, as announced in the planning statement "Sustainable Communities—Delivering Through Planning", we are

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  reviewing permitted development rights to see whether they are appropriate. A research report is due in early summer. Of course, I am unable to comment on its findings until we have seen its recommendations, but I will ensure that the concerns raised by my hon. Friend are put into the review process.
  In the meantime, the situation at Stisted is an example of our commitment to protect the amenities and appearance of the countryside. On 24 March, Braintree district council made the article 4 directions in respect of the Stisted site. As my hon. Friend said, the council then submitted the directions to the Government office for the east of England on 26 March. They were approved within two days of receipt. That shows, beyond doubt, that we will support the removal of permitted development rights where clear and compelling reasons have been provided. Fencing land into individual plots for sale to gullible people, apparently as an opportunity for housing development, will not be the easy ride that some speculators erroneously believe it to be.
  My hon. Friend will be comforted by the fact that we have also confirmed article 4 directions at other locations in Essex, and elsewhere in the east of England. Sadly, the story of Stisted is familiar: property speculators sub-dividing land and selling plots as "investment opportunities". In all instances, the local planning authorities have produced clear and compelling evidence that the uncontrolled exercise of permitted development rights would harm interests of acknowledged importance. We have shared their view that numerous fences and assorted temporary buildings and structures, erected without proper planning control, do not necessarily reflect the character and appearance of unspoilt areas.
  My hon. Friend alluded to the fact that, in the past year alone, for example, we have confirmed 16 directions relating to the sub-division of land in the east of England. Five, including those at Stisted, are in Essex, of which three are in the green belt. In nearby Hertfordshire, eight directions have been approved, seven of which are in the green belt. Two directions have been approved in Suffolk, and one in Norfolk. I trust that my hon. Friend agrees that that shows our commitment to support local councils in their fight to protect the countryside.
  All those directions allow local councils to require that planning permission has to be obtained for what was previously "permitted development". In that way, development that may have adverse effects on the character of the countryside can be brought within full planning control. I should, of course, point out that the
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  effect of the directions is not to prevent development outright. That is not the purpose for which they are intended.
  As I said, the developer would still be able to seek planning permission, but firmly within the bounds of the planning and development control framework. Such directions enable the council to have control over the situation, and to decide any application in the light of the development plan and any other material considerations, such as relevant planning policy guidance. The process also allows local residents to make representations on any application for planning permission that may subsequently be made, which they clearly could not do under a regime of permitted development rights.
  That applies in the case of Stisted. Braintree district council can take the views of local people into account when reaching a decision on any subsequent planning application. We have no doubt that that will provide a satisfactory and robust mechanism for the proper planning of the area to take place.
  I fully appreciate the point that my hon. Friend made about neglect and disrepair should people have already bought land that they can no longer do anything with, and I shall put that into the pot with the wider review of permitted development rights.
  Make no mistake, the Government remain committed to the principle of greenbelts and their role as an effective planning tool in shaping sustainable development patterns. The Government are about delivering sustainable solutions to meet the clear and pressing need for housing that everyone recognises. However, we remain committed to the protection of the countryside against inappropriate development. When a real and specific threat has been shown to exist, even from permitted development, we will act quickly to support local planning authorities in their responsibilities for the proper planning of their area, as has been the case in Stisted. In that way, we will protect the countryside for the benefit of all. Moreover, we are committed to maintaining or increasing the area of greenbelt in each region.
  I thank my hon. Friend once again for raising such a crucial matter. It is clearly important to him and his constituents. It is equally important to everyone as we go through a period of growth in London, the south-east and the east. My hon. Friend will forgive me if I do not allude to the south sea bubble, but I hope that future champagne parties in Stisted are to celebrate my hon. Friend's hard work on behalf of his constituents, and are not an historical throwback to the last century and the selling off of land.
  Question put and agreed to.
  Adjourned accordingly at three minutes to Three o 'clock.