FRIENDS' PROVIDENT LIFE OFFICE BILL (Hansard, 28 April 1975)

§ The CHAIRMAN of COMMITTEES (The Earl of Listowel)
My Lords, I beg to move that this Bill be now read a second time.

§ Lord CASTLE
My Lords, I do not want to interfere with the progress of this Bill towards becoming an Act, but there are certain considerations which have been brought to my attention and which I should like my noble friend to examine in Committee. When the Committee is examining this Bill, will it please take into account the very different nature of a mutual insurance society, which is owned by the policyholders, from a commercial insurance company, which is owned by shareholders who effectively have no policy stake in the company? I am sure the Committee will wish to satisfy itself that the Bill ensures that the right to acquire and sell assets takes into account the need to seek the approval of the policyholders and, at the same time, to see that the interests of the staff are properly protected.
It appears to those who have examined the Bill in detail—I cannot claim to have done that at this moment—that the Bill could give the board of the Friends' Provident Life Office continuing powers to effect mergers without reference to the policyholders, which is inconsistent both with the Bill's alleged modernising objectives, as stated in the Preamble, and with the spirit of current legislation affecting 1152 mergers. At the beginning of this year the board sold a wholly-owned subsidiary, the Century, to a nonmutual society—the Phoenix Insurance Company —which is partly Americanowned. Of course, it is no worse for being that. But the board did so without any reference to the policyholders who own the society. Nor were the interests of the staff taken into account.
Previously, the Friends' Provident Life Office had a trade union procedure agreement with the Association of Scientific, Technical and Managerial Staffs, giving it bargaining rights for the staff with all the subsidiaries as well as the main company. Since the sale the new owners, Phoenix, are putting barriers in the way of trade union recognition for ASTMS, although the majority of members of the staff of Century are ASTMS members and it is, in fact, giving support to its own sponsored staff association. What is very much in doubt is whether the policyholders would have approved of either this lack of regard for staff interests, or the sale of the Century to a commercial insurance company with a substantial amount of foreign ownership. I am sure the noble Lord will understand the disquiet and will examine the proposals made in the Bill in the light of what I have said, and the fears which policy-holders and staff of the Friends' Provident have expressed.

§ The Earl of LISTOWEL
My Lords, I am grateful to the noble Lord, Lord Castle, for his observations on the Bill. I have taken a mental note of what he has said and I will refresh my memory by reading Hansard. I can assure him that all the points raised will be carefully considered when the Bill is referred to the Unopposed Bills Committee.