Mutuals’ Redeemable and Deferred Shares Bill [HL]

Lord Kennedy of Southwark Excerpts

Friday 21st November 2014 Lords Chamber

All the amendments before us are hugely helpful on the issue of deferred shares. They are not a panacea, but they are a very positive start. In accepting these amendments, I place on record my thanks to Her Majesty’s Treasury for its positive response to the Bill, and, in particular, to the legislative section of the Treasury for drafting these amendments. As a former chairman of Ways and Means who knows what it is like to have to handle a major finance Bill, I know that these things are not easy to do. The number of amendments that were necessary to make a very simple change is pretty indicative of that situation. Above all, I say a particular thank you to the two Ministers who have helped the Bill to progress this far. I hope once again that this positive response will lead to the Bill reaching the statute book this Session.

[Lord Kennedy of Southwark (Lab)]

My Lords, I am delighted to be able to speak on behalf of the Opposition, particularly as a Labour and Co-operative Member of your Lordships’ House, to these amendments moved by the noble Lord, Lord Deighton. This Bill was last considered by your Lordships’ House on 24 October when we had the Second Reading debate. Both the noble Lord, Lord Newby, who spoke for the Government, and I supported the aims of the Bill and what the noble Lord, Lord Naseby, was seeking to do and congratulated him on making substantial progress in persuading others of the importance of the measures and of the need for action to be taken to support and protect the mutual insurance sector which only 20 years ago accounted for 50% of the insurance market in the UK but today accounts for just 7.5% of the same market.

As the noble Lord, Lord Deighton, explained, the Government were not persuaded that the proposed redeemable shares instrument for co-operative and community benefit societies was necessary as societies already had a means of issuing redeemable shares. Discussions took place and with the agreement of the noble Lord, Lord Naseby, the Government proposed to bring amendments in Committee, and they are what we are discussing today. I am happy to support the amendments, as is the noble Lord, Lord Naseby, which remove the proposed redeemable shares element from the Bill and restructure it in a slightly different way which is more acceptable to the Government or parliamentary draftspersons or both. I hope that the noble Lord, Lord Deighton, can assure the House that the Government will keep this issue under review and if it is felt or shown that the proposed redeemable shares instrument may be beneficial to the mutual sector he will look at it again. Perhaps we can again call on the noble Lord, Lord Naseby, to bring such a measure in the next Session because it is important that the mutual sector as whole, not just the mutual insurance sector that the Bill seeks to protect, is protected and is allowed to flourish and grow in today’s modern world of business. It is a matter of great regret that the mutual insurance sector has shrunk so much in a relatively short period of time and that we have lost so many building societies that were once household names, which has been to the detriment of consumers.

I will not detain the House any longer than necessary. I am a supporter of the aims of the Bill and am content with the amendments moved by the noble Lord, Lord Deighton. I wish the Bill a smooth and speedy passage on to the statute book. It is an excellent example of what a good Private Member’s Bill can do, identifying a problem or issue that there is no great dispute about, and seeking to make improvements to the situation which will be beneficial to everyone. This House is very grateful to the noble Lord, Lord Naseby, who is my noble friend. I hope that there will be no amendments on Report and that the Bill can leave your Lordships’ House and be on its way to the other place before Christmas.

Amendment 1 agreed.