HL Deb 24 July 1981 vol 423 cc482-91

11.34 p.m.

The Minister of State, Treasury (Lord Cockfield)

My Lords, I beg to move that the Bill be read a second time. This is a short Bill but an important one. The Chief Registrar of Friendly Societies occupies a position of importance. He is responsible for the supervision of friendly societies, building societies, industrial assurance companies and various other bodies. Of these, the building societies, whose growth in recent years has been phenomenal, are the most important.

The present Chief Registrar, Mr. Keith Brading, has occupied the post for some nine years. He has served with distinction: he has had to deal with many difficult problems which he has handled with great skill; and he is very highly regarded not only in the field in which he works but more generally as well. He has now passed retirement age and wishes to retire. We face, therefore, the problem of finding a suitable and worthy successor.

The present Act, the Friendly Societies Act 1974, requires that the chief registrar should be a barrister of at least 12 years' standing. There are obvious advantages in a legal qualification. Nevertheless the position is that over the years the balance of responsibility has changed: the strictly legal role has declined and greater emphasis has inevitably been placed on prudential supervision. Clearly we need the best available candidate for this post. The present requirement unduly restricts the field of choice. It might well be that the best candidate who would emerge would be a barrister, a solicitor, an accountant, an actuary or, indeed, a general administrator.

Of course a legal qualification is a great asset and would undoubtedly be a factor on which great weight would be placed. But it is no longer essential. What is essential is that we should be able to appoint the best available candidate. My right honourable and learned friend the Chancellor of the Exchequer, who is responsible for this appointment and who has taken a very close and personal interest in the matter, therefore felt that it was right to ask Parliament to repeal the requirement contained in Section 2(1) of the Friendly Societies Act, thus widening the field of choice, and that is what the present Bill does.

Perhaps I should add that irrespective of who may be appointed chief registrar, ample legal expertise will remain in the department as subsections (2) and (3) of Section 2 of the 1974 Act require that at least two of the assistant registrars should be legally qualified. My Lords, I beg to move.

Moved, That the Bill be read 2a—(Lord Cockfield.)

The Earl of Selkirk

My Lords, I should like to thank my noble friend for the explanation that he has given of the purposes of the Bill. I should particularly like to thank him for what he said as regards the work of Mr. Brading, the Registrar General. In the other place the Financial Secretary said that he had done a quite outstanding job. I personally, as President of the Building Societies Association, have written to the Treasury in very similar terms. He has been courageous in some of the actions that he has taken, and he has shown very good judgment. It is his retirement which brings this Bill before this House.

However, we are a revising Chamber and the circumstances of this Bill are a trifle peculiar. We are going through a pretty busy period—and everyone can see the Chief Whip's hairs getting greyer and greyer—and suddenly we get a new Bill plunked in at extremely short notice. No one—and, when I say "no one", I mean none of the parties concerned—was told that this was going to happen, except, I believe, the Bar Council, who are really not very deeply concerned. The Bill went through the elaborate procedure of the other place at 3.26 a.m., and all the proceedings were completed—Second Reading, Committee stage, Report stage and what you will—by 3.36. It was not exactly a filibuster!

I want to make the point that in withdrawing the qualification of 12 years at the Bar and being a lawyer, yes, we can take away the legal status, but we are also taking away in some measure the status of the office. The noble Lord has said that it is important and, of course, I entirely agree with him. But 10 years ago the office was slightly degraded from Deputy Secretary to what I would describe as Under-Secretary plus, so I am not altogether without justification for the suspicions that I have on this matter. I think that that is important for the future standing not only of this Government but of future Governments in regard to this office. It is a semi-autonomous office, working under the general supervision of the Treasury, but quite capable of, and, indeed, responsible for, carrying out its own decisions. It must administer four separate legislative codes.

I do not absolutely agree with what the noble Lord said about prudential supervision. Of course that is important. It may be that some of the episodes that arise from this or from this general consideration catch the public eye. A couple of years ago there was a society called Grays. I shall only say that it was very cunning and very lucky; the matters ended in a suicide and no one lost any money. But this is the sort of episode which catches the eye. However, there are other matters which are possibly even more important than that; that is, the advice, the guidance and the administration for which the Registrar General is responsible. For a moment I should like to remind the House of the task here.

There are 17,000 societies of one sort and another; their value is probably nearer £70 billion than £60 billion, and I would guess—and here I may be advised otherwise—that of the order of 80 per cent. to 90 per cent. of the households in this country have something to do with one or other of the societies concerned. It is, therefore, of very real importance. They were not founded by statute, not like joint stock companies or statutory corporations; they are organisations which have grown from the soil of this country over the years, dating back in most cases probably to the 18th century. What is important is that they have gone through a very powerful period of evolution. They have had to readjust themselves in many different ways to the changing circumstances in which we live. They are based on the principle of self-help and participation—words which we use very frequently today and which my noble friend Lord Seebohm brought up in an amendment to the Companies Bill recently when we were discussing how to do it. I do not say for a moment that all these things are perfectly done, but that is the purpose, and it has remained an important role.

I am concerned that the man appointed to this position should be a man of very real standing; the noble Lord has ensured this. He is taking it out of the statute so I am a little concerned at what future Governments might or might not do. No qualifications are involved. It can be said that this will be open to "one of the boys", though I think that the "boys" would probably find it rather hard work to fulfil the duties required of them.

However, I would remind your Lordships that there are many matters which are of prime importance, particularly in the evolution of these societies. The first is the rights of members of these societies against the societies themselves. As societies have grown in size, this has become increasingly difficult. I shall not produce a solution, but this is the sort of problem with which in many cases the Registrar has to deal. He has to deal not only with the application of the regulating statutes, but also with the rules of the individual societies themselves, which are changed as circumstances change. He has to advise societies about the legal application of all sorts of matters that come along, not least as regards the EEC.

I do not differ from the Government in saying that this is something which those skilled in the profession of law are particularly adapted to do. I do not say "uniquely", but there are circumstances which demand a pretty thorough knowledge of law and its implications in the EEC, in this country and in international management. It is for that reason that I an pressing that standing should be the main point of this appointment. The societies greatly rely on the expertise and the wisdom shown by the Registrar, and it is very important that they should do. In a sense he acts as a sort of guide, philospher and friend to these organisations, and that is something that can only be accomplished by a man of outstanding qualities.

I know that the Government say that they have good intentions; in fact, I think that all Governments' intentions are good, but whether or not they carry them out is a different matter and particularly whether successor Governments will do so is a different matter. It is that which has worried me a little in the changing of the law at the present time. Frankly, I should like the office to be restored to the standing of Deputy Secretary, as it was, before it was degraded to what might be described as Under-Secretary plus. That would be an assurance that future Governments would have some standard to go by.

As regards the law, I believe that this is an open question, although I think that lawyers would find it easier to deal with many of the very complex questions which go well beyond simply prudential supervision. These are great indigenous organisations, unique to this country, and organisations of which we can be very proud indeed. It is for that reason that I venture to draw the Government's attention to the importance of the Registrar.

11.47 a.m.

Lord Houghton of Sowerby

My Lords, I am a vice-president of the Building Societies Association, but I do not go all the way with the noble Earl, Lord Selkirk, in his approach to the Bill. From the comprehensive description that the noble Earl has given of the duties and responsibilities of the position of Chief Registrar, I was convinced that we should have someone better than a barrister. The present holder of the office, Mr. Keith Brading, has risen above his legal handicap and has been a man of outstanding wisdom and judgment in his position. I shall say something else about the present holder of the office in a few moments, but the condition which the Bill seeks to remove has been in the law since at least 1896 and was modified somewhat as long ago as 1924, when it became permissible for an assistant registrar without legal qualifications to be promoted to the top job, provided that he had had five years' service as an assistant registrar. That is how the law stands at the moment.

As the noble Lord, Lord Cockfield, said, and as the noble Earl has said, the nature of this position has changed a great deal in recent years. Of course, the Chief Registrar used to be the watchdog over the affairs of trade unions; that was my earlier contact with this office. But after the repeal of the Industrial Relations Act 1971 the trade unions were so sensitive about registration that they wished to remove that feature from the law and from the surveillance of the Chief Registrar. That was done for symbolic rather than practical reasons.

Trade unions are very sensitive, so much so in fact that you would think that they were run by Irishmen for their emotional feeling about their historic grievances. But they are not. As a matter of fact, they are run mostly by Scots and Welshmen. However, building societies are very English institutions. They are a world of male chauvanism; they are bedrock and they have come to regard the Chief Registrar as their man, which he really is.

There is not the slightest doubt that this position has greater responsibilities in relation to the building societies than ever before and so we do need a very good man for this job. When a proposal is made to remove one of the conditions of appointment, one wonders why it is being done. If one is satisfied about it being done, the next question one asks is, why is it being done now? Doubts always arise when things are done at a particular moment, when one naturally suspects some plan or plot to plant somebody in a job. This is the point that we should like to have cleared up.

Mr. Keith Brading is going to retire. May I digress for a moment and ask the question, why do good men have to retire?—especially when all that happens to them these days, if they are in public service, is that they join the despised throng of those who have index-linked pensions. This is a sad end to some very distinguished careers in public service. After all, if nothing else, those who are now retiring from public service are part of one of the economic necessities of the present time, which is called "natural wastage". But for them the Prime Minister would not be able to reduce the size of the Civil Service as quickly as she is hoping to do. I do object to public servants who retire being talked about as being "index-linked" as though they were something out of a filing cabinet. I sincerely hope that fate does not befall Mr. Keith Brading, who deserves something much better than that when he retires from public service.

This Bill is obviously intended to pave the way for Mr. Brading's successor, and I quite understand that the Government want to leave the way open for someone with suitable qualifications. One of the advantages of stipulating that candidates must have a legal qualification is that, although it may not ensure the best candidates, the lack of such qualifications does enable one to reject the worst candidates. If one sets the qualification of being a barrister as one of the conditions of appointment, one can reject out of hand a lot of people, good or bad, who do not have that qualification. But when the field is open, one wants to have confidence in the people who are going to operate in that field. This may either be a well-intentioned design or it may be a genuine case of having an open field in readiness for the filling of this vacancy. I am inclined to be quite blunt and to ask the noble Lord, Lord Cockfield, who is it? If we knew the answer to that question we should be better able to judge whether the Government are using the open field as we would wish them to do.

This post does require a person of very special qualities and, as the noble Earl, Lord Selkirk, has said, the guidance which it is necessary to have from the holder of this office is of great importance at the present time—especially to the building society movement. In fact, I believe that to get the right person in this job will probably keep the building society movement within the general field of Government and public acceptance, whereas in some circumstances conflict might lead to the need for a wholesale review of the activities of building societies, socially and economically, in Britain today. It is an enormously important movement which has grown out of historic beginnings, and it now holds great financial power in the land. Indeed, sometimes one is surprised when the building societies complain that the Government are bidding for public money in rivalry to the building societies. Of course one must sometimes ask whether the building of houses for home occupation is the be all and end all of our economic policy, and whether there are not some other claims upon our national resources—so one can see how that conflict could arise.

I see that the noble Lord, Lord Cockfield, is to reply to this short debate. He is usually a reticent Minister. He is not what I would call forthcoming with information but he is extremely good at replying to arguments which have never been put. I feel that he could now tell us what the Government have in mind. Will the Government kindly "come clean"? If they would, then your Lordships' House could pass this Bill with an easy conscience, knowing that the post has been adequately filled and that the reputation made by Mr Keith Brading will be maintained in the future appointment.

11.55 a.m.

The Earl of Bessborough

My Lords, I apologise for not putting down my name for this debate but, as my noble friend Lord Selkirk has said, we were given extremely short warning of it. I should like fully to support what has been said by my noble friend Lord Selkirk. Like the noble Lord, Lord Houghton of Sowerby, I am also a vice-president of the Building Societies Association and I suppose I ought to declare an interest.

I should like to join with others in paying tribute to Mr. Brading for his admirable judgement in the post which lie has held. I am sure that he will be greatly missed not only by all the building societies but also by the friendly societies generally. I was rather concerned when I was told that the Building Societies Association had not been consulted about the proposed Bill, and that neither were the friendly societies or co-operative societies, which also fall within the aegis of the Chief Registrar. I was disturbed about that.

I will not repeat what has been said by my noble friend Lord Selkirk with regard to qualifications, but I agree with him that the Chief Registrar should certainly have an important status and it seems to me that the status of Deputy Secretary would be the most appropriate. I do not know whether my noble friend is going to move his amendment, but no doubt we can make up our minds what should be done at that stage.

Lord Bruce of Donington

My Lords, we on this side of the House would like to join in the expressions of appreciation to the Chief Registrar and to extend to him our felicitations as and when the time does come for him to retire. We have approached this Bill with a very open mind and I am bound to say that the noble Lord opposite has given very good and cogent reasons for bringing it forward. It is quite true, as he says, that the whole emphasis of the operation of these building societies, friendly societies and co-operatives has now extended, perhaps, far more into the field of finance and accounting than into the questions of law. Indeed, it is very refreshing to have the noble Lord opposite—who was himself called to the Bar in 1942 and therefore has 39 years' standing there—move the extension of this post outside that of his own profession. I do not expect that there will be any rush of accountants applying for the post, although obviously the accountancy profession would be very honoured if an accountant was considered but we are pleased that the field has been extended. Therefore, on quite rational grounds which the noble Lord has himself put forward, we would support this.

During the speech of the noble Earl, Lord Selkirk, I felt one moment of anxiety when he seemed to say—and I hope I heard him aright—that the post, since its original creation, had been down-graded; that it originally carried the grade of deputy secretary and that it now carried the post of under-secretary plus, whatever in fact that term may be. The noble Earl, Lord Selkirk, quite rightly emphasised the ever increasing and important role of the building societies and the various kindred societies in our national life, and this was emphasised by my noble friend Lord Houghton of Sowerby. It is now well known that the building societies in particular—but I do not exclude the others—constitute a fairly powerful economic force in the country at the present time. On their interest policies, on their investment policies, quite a series of important considerations arise.

I should therefore have thought—and I should like to be persuaded by the noble Lord if he disagrees with me—that at this time the post should certainly not be downgraded but that it ought to carry its original ranking. In an important position of this kind a person is required who has some official clout, and I think the status of deputy secretary is probably more appropriate. If I understood the noble Earl, Lord Selkirk, aright, that was the original status. I question the desirability of this down-grading. It may well be that the noble Lord opposite will be able to reassure me on this matter, and it may be that he can give a convincing explanation as to why, other than in the interests of economy, the down-grading has taken place. But subject to that, we give this Bill a fair wind and support the Second Reading.

12.2 p.m.

Lord Cockfield

My Lords, may I begin by saying how grateful I am to my noble friends Lord Selkirk and Lord Bessborough and to the noble Lords, Lord Houghton of Sowerby and Lord Bruce of Donington, for the very warm tributes they have paid to Mr. Keith Brading. On a purely personal note perhaps I may say that I entered the Estate Duty Office in almost exactly the same year as he did. I can in fact claim one year of seniority over him, and it will give me particular pleasure, therefore, to pass on these good wishes to him.

My noble friend Lord Selkirk expressed some anxieties about the removal of the need for a legal qualification. He stressed, as indeed did my noble friend Lord Bessborough and other noble Lords, the importance of ensuring that the holder of this post should be a person of quality and character. In this I entirely agree with him. As I said in my speech moving the Second Reading, my right honourable and learned friend the Chancellor of the Exchequer has taken a close personal interest in this matter. Section 2(4) of the principal Act—that is the Friendly Societies Act 1974—provided that the Chief Registrar should be appointed by "the Treasury". The term "the Treasury" in an Act of Parliament means the Lords Commissioners of Her Majesty's Treasury. The Prime Minister is the First Lord of the Treasury, with the Chancellor of the Exchequer next in seniority among the Lords Commissioners.

In matters of importance of this kind the Chancellor would take the decision himself. The Chancellor has taken close personal interest in this matter and it is his firm intention that the appointment of the next Chief Registrar should be subject to his personal approval. May I give the House an assurance that there is no question of a candidate having been already selected, and of the requirements being tailored to a choice that has already been made. It is the Chancellor's firm intention that when the appointment comes to be made it should be subject to his personal approval. Given the importance of the post, and having regard to the specific provision in the Act, a future Chancellor could reasonably be expected to take the same position on future occasions. I hope my noble friends will accept these assurances.

The noble Lord, Lord Houghton, asked why the matter had arisen at this time and why the Chief Registrar needed to retire. I dealt with that matter in the speech I made moving the Second Reading of this Bill. I said that he was past retirement age. Mr. Brading in fact is 64 compared with the normal retirement age of 60. He has stayed on really to help in difficult circumstances. It is now his personal wish to retire and I do not think that we should try to stand in his way. This is the only, and perfectly genuine, reason why this Bill has been brought along to your Lordships today.

There is a further matter which was raised by both my noble friends Lord Selkirk and Lord Bessborough to which I wish to refer. On a change in the law of this kind it would be customary to have consultations with the interested parties who might feel that they had a legitimate point of view, which should be brought to the attention of, and considered by, the Government. I regret that on this occasion this was not done. The Building Societies Association have, not unnaturally, expressed concern about this, and concern has been expressed on behalf of other bodies as well. I can only say that I am sorry that the normal procedures were not followed in this case. I hope that the association and the other bodies affected will accept what I say on this point.

The Earl of Selkirk

My Lords, might I, with the leave of the House, thank the noble Lord for what he has said. Because he has been forthcoming and given the undertaking of the personal interest of the Chancellor of the Exchequer, I do not propose to move the amendments standing in my name.

Lord Bruce of Donington

My Lords, it may have escaped the memory of the noble Lord, but I asked him a question about the grading of the Chief Registrar, to which I should like an answer.

Lord Cockfield

My Lords, on the basis that I have not yet sat down, may I say that I would think that it is not appropriate to discuss in your Lordships' House the grading of a specific post in Her Majesty's Civil Service. Nevertheless, I shall certainly bring to the attention of my right honourable and learned friend the Chancellor of the Exchequer the comments that have been made on both sides of the House. Perhaps I may also make it clear that there is no question of the post being down-graded at this present moment. The change in the grading of the post took place a good many years ago.

On Question, Bill read 2a, and committed to a Committee of the Whole House.

Then, Standing Order No. 43 having been suspended (pursuant to Resolution of 21st July):

12.9 p.m.

Lord Cockfield

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord Cock field.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD ABERDARE in the Chair.]

The Lord Chairman of Committees (Lord Aberdare)

I understand that the noble Earl does not wish to move his amendments.

The Question therefore is that Clauses 1 and 2 stand part of the Bill?

On Question, Whether Clauses 1 and 2 shall stand part of the Bill?

Lord Hale

I feel I cannot let this opportunity pass without commenting on the situation. Obviously the Government would now be in very great difficulty about time if matters were delayed, and no one would wish to make use of such delay; but those of us who sit here day by day, and often for a great part of the day, have now heard three or four of the most distinguished Members of your Lordships' House speaking with restraint but expressing serious doubts as to the way in which the procedure of the passage of the Bill is being carried out. The Minister himself said he regrets that some of the formalities, of courtesy and otherwise, were not observed in presenting the Bill, before it appeared on the Order Paper in the form of a multiple resolution which of course anticipated the decision on Second Reading. Second Reading has been carried and we are now dealing with the Bill in Committee, in circumstances in which nobody has had a chance to table an amendment after hearing speeches or of looking the matter up more thoroughly. We are told that the Bill passed through another place in 10 minutes between 3 and 4 o'clock in the morning. That does not suggest a profound discussion.

There was an almost specific suggestion by my noble friend Lord Houghton of Sowerby that there is a further step in the progress of the measure—and of course its consequences—which has already been substantially anticipated; to the extent that half the City knows who is contemplated for appointment, and that one of the provisions of the Bill is designed to make an adjustment of qualification which could perhaps make an appointment necessary (and which has passed through the minds of thoughtful people) but which would not be necessary because that qualification may not be possessed by someone whose name has passed through the mind of the Treasury. Normally I am so deaf that I speak with hesitation, but I heard my noble friend Lord Houghton quite clearly make that suggestion.

Therefore what I am asking—the noble Lord, Lord Cockfield, is always most courteous in attempting to answer our queries—is whether there is any possibility, with decency, of saying that this Committee stage should be taken at some other time, but before the adjournment for the Recess. I appreciate that there are only three, already busy, days left, but is there any possibility that that could be done? I ask that because anybody reading the Official Report of this debate, in the circumstances in which it took place in relation to the Commons debate, might be misled into thinking that something more serious was happening.

Lord Denham

The noble Lord, Lord Hale, of course has every right to raise his misgivings, and in fact I am grateful to him because I hope I may be able to allay them. It is not at all unusual for short, uncomplicated Bills with which people are in general agreement to be taken through all stages in one day, and in fact the House has already passed a Motion to that effect; otherwise we should not be able to do it. I understood that the doubts and anxieties of my noble friends, and, I thought, of noble Lords opposite, had been allayed by the assurances that were given by my noble friend Lord Cockfield. The difficulty is that there is a certain urgency about the Bill. The very purpose of it is so that somebody can be appointed to this very important position. I hope your Lordships will feel that in the circumstances it would be right to follow the normal procedure and allow the Bill to go through all its stages today.

Clauses 1 and 2 agreed to.

Bill reported without amendment: Report received.

Bill read 3a, and passed.

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