§ Lord Coleraineasked Her Majesty's Government:
Whether, in their opinion, the provisions of the Building Societies Act 1986 precluded Abbey National Building society from providing, in the arrangements for the transfer of the business of the society currently taking place, for the making of a free issue of shares in Abbey National plc to members of the Society who, but for being under age and therefore without voting rights, would have been entitled to such a free issue pari passu with the other qualifying members of the society; and, if so, to state how the Act has this effect; and whether legislation to end this apparently anomalous treatment of the proprietary rights of persons suffering the disability of infancy is under consideration and, if not, why not.
§ The Secretary of State for Trade and Industry (Lord Young of Graffham)It is for societies themselves to decide upon whether there should be a share scheme and who should be eligible for the issue of free shares or the rights to subscribe to shares. Such a scheme must comply with the Building Societies Act 1986 so that any priority as between subscribers is restricted to those of the society's members who held shares in the society throughout the period of two years which expires with the qualifying day. The Abbey National's scheme of free shares and the right to apply for new shares is based upon members' voting rights—and was approved by the High Court. The Act provides that members under the age of 18 are not eligible to vote on resolutions, and, in connection with a conversion to plc, members not entitled to vote must receive a cash distribution 683WA equivalent to the society's reserves ratio. It is not Her Majesty's Government's intention to amend these provisions.