INDUSTRIAL AND PROVIDENT SOCIETIES BILL (Hansard, 27 June 1967)

§ LORD WISE
My Lords, I beg to move that this Bill be now read a second time. We have already had quite a "mixed bag" of Bills to consider and approve this afternoon, with more to follow. For that reason I propose to be as brief as possible in moving the Second Reading. This Bill has already been passed and approved in another place with more speed than usual. The Second Reading occupied 80 minutes of Members' time, with eight speeches; the Committee stage occupied 21 minutes, and the Third Reading exactly five minutes. Perhaps we shall be able even to eclipse that record. I hope so.
The Bill is, I believe, acceptable to the Government. Amendments relating to Scotland have been adopted. In dealing, as it does, with agricultural and horticultural problems which need improvement, and so promoting the prosperity and welfare of those engaged in those industries, I feel that it will meet with the approval also of noble Lords opposite. This Bill was introduced and carried through the other House by the honourable Member for King's Lynn, and supported by three honourable Members representing Norfolk constituencies. My interest in agriculture, King's Lynn and Norfolk are no doubt well known to most of your Lordships and therefore it may be appropriate that I should be in the position of introducing this Bill this afternoon. I must say, having passed my four score 132 years, that it is a unique experience for me to pilot a Bill through either House of Parliament, and as this is, in a way, a maiden speech on a particular subject and object, I am sure that I shall receive the usual tolerance from your Lordships. My brevity will commend me.
Noble Lords will see the purpose of the Bill set out in a fairly explicit Explanatory Memorandum. It is to remove from industrial and provident societies certain limitations which at present prevent them from raising capital by creating a floating charge on their movable assets. The floating charge would not relate to or be confined to specific items, but would be on whatever assets or class of assets might be owned by the society at that particular time—and transport comes to mind as a suitable asset. Such assets can then be disposed of or replaced according to circumstances, and the society need not register them as a bill of sale under the somewhat old Bills of Sale Acts of 1878 and 1882. Under the existing legislation the society would have to conform accordingly to its provisions, whereas commercial companies have the advantage that registration under the Companies Act 1948 exempts them from the Bills of Sale Acts.
Such companies thus gain preferential treatment in the raising of money for the carrying on of their businesses which is denied to industrial and provident societies. This Bill, if and when it becomes law, will put this defect and disadvantage right and open up the means whereby, more particularly, agricultural and horticultural societies can raise capital to extend their business operations and thereby benefit their members.
The ability to create floating charges covered by the Bill would appear to me to make the societies more credit-worthy, as well as increase their financial strength and means, and thus bringing more capital into the twin rural industries which at present are suffering adversely from its insufficiency. It is obvious that, whether entry into the Common Market is obtained or not, developments in farming and horticulture must be encouraged by the introduction of fresh capital. New methods and ideas will need such additional capital to make them beneficial and of practical day-to-day use.
This Bill is a short one and is divided into three Parts, with a Schedule at the 133 end. I am glad to say that it is easy to read and understand. Part I deals with the registration procedure to be carried out by the registered society creating a fixed or floating charge upon its assets and by the Chief Registrar of Friendly Societies in recording and filing particulars of that charge. Detailed matters, such as the payment of fees, inspection and management and the registrar's files are covered. Nothing, however, in this Part is to apply to a debenture registered in favour of a bank under the Agricultural Credits Act 1928.
Part II deals entirely with Scottish affairs and brings these more or less into line with those set out in Part I for England and Wales. Certain Amendments were made to this Part of the Bill on the Committee stage in another place, and these were acceptable to the Government and the promoter of the Bill. They are embodied in the Bill which is now before your Lordships. Part III covers a few general matters and states that the Bill, as an Act, will come into operation on the expiration of the period of two months after it has been passed. I hope that your Lordships will make that date an early one. By doing so, you will have the satisfaction of assisting an event of benefit and encouragement to agricultural and other co-operative societies. I believe that we are destined to see many extensions of co-operation and amalgamation of businesses and companies during the lifetime of the rising generation, and it is well to be prepared. I beg to move.

§ LORD DRUMALBYN
My Lords, the noble Lord has said that this is the first Bill that he has piloted at any time through either House of Parliament. It is said in the proverb that, "Wise men learn from the experience of others", and the noble Lord, if he has not had the experience himself, has certainly learned from the experience of others and has introduced this Bill very well, if I may be allowed to say so.
This is a Bill which we from this side of the House welcome very much. One of the puzzling things is to know why this has never been done before; why, over all these years, industrial and provident soceties have not been able to raise floating charges. In Scotland, of course, 134 it is only relatively recently—since 1961—that companies have been able to do this. It is a good thing that this power should now be extended to industrial and provident societies. It is, of course, the growth of agricultural and horticultural societies that has made this necessary. Apparently it was not so necessary before, but it certainly is necessary now, for the very good reason that many agricultural co-operative societies are very short of capital. They have to rely almost entirely, or at any rate largely, on the subscriptions of their members for their capital to supply their fixed assets, and they have a considerable amount of floating assets in relation to their strength. One of the best ways in which they can get further finance is to create charges on those floating assets.
There is not a great deal that I wish to say on this subject. We have a good deal more business to do, and I do not want to detain the House for any length of time. It seems to me clear that this is a desirable Bill, and indeed a necessary one. I understand that it was stated in another place, and not denied, that in 1965 the turnover of the agricultural co-operatives amounted to something like £300 million, distributed among some 500 co-operative movements. There is no doubt that the Central Council for Co-operation in Agriculture and Horticulture will encourage and support the growth of co-operative societies. This is a desirable development, inasmuch as one wants to see strong co-operative societies able to hold their own with both suppliers, on the one hand, and purchasers from them, on the other. For these reasons, I would simply congratulate the noble Lord on introducing this Bill, wish it the speedy progress he hopes for it, and pledge our full support for it.

§ LORD WALSTON
My Lords, I agree with the noble Lord, Lord Drumalbyn, that wise men learn from the experience of others. Here in this House I hope that we learn from wise men. Of course, my noble friend has been "Wise" for longer than any of us—for eighty years at least—and it is good to have the benefit of his wisdom. He said that in another place it took 80 minutes and eight speakers to deal adequately with this Bill on Second Reading. I think that with three speakers we can deal as adequately with it in 135 rather less than a quarter of that time. If that is so, it is not in any way because we are not interested in the Bill or because we think it is unimportant—just the reverse. It is due largely to the admirable way in which my noble friend has introduced the Bill. He has told us exactly what it is about and why, and none of us can quarrel with it.
It is clearly important that co-operative societies of the type that he has mentioned should be in a position to raise additional capital. We all need additional capital, whatever our occupations may be, and certainly the agricultural industry as such is greatly in need. With the development of mechanised and intensive types of agriculture, it is greatly in need of new sources of finance; and not only will the agricultural co-operative societies, in particular, themselves benefit if they are able to get this extra finance, but the whole agricultural community will benefit also. Your Lordships will remember that the recent Agriculture Act which we discussed not long ago, and which has now become law, provided for further encouragement to agricultural and horticultural co-operation. That was a quite deliberate part of the 1967 Agriculture Act, because we believe that as one of the prongs of our attack on this agricultural problem there must be a greater degree of co-operation to assist, in particular, the smaller farmers and market gardeners.
This Bill which my noble friend is introducing is complementary to that particular aspect of the Government's agricultural policy. As my noble friend modestly said, it is a small Bill; but it is a most important one, and I believe that in the years to come many people throughout the whole of the agricultural community, and not only in Norfolk, will thank the noble Lord and his friends who have initiated this Bill and who will, before long I hope, have steered it successfully on to the Statute Book. I thank my noble friend and the noble Lord, Lord Drumalbyn, and I certainly wish the Bill a speedy passage.

§ LORD WISE
My Lords, I rise for but a moment to thank the two noble Lords who have spoken in support of this Bill. So far as my information goes, the promoter of the Bill is at the moment in the United States. I am certain that 136 when he hears how your Lordships have dealt so efficiently and speedily with the Bill he will be as pleased as I am.