Community Benefit Societies (Restriction on Use of Assets) Regulations 2006

My Lords, we on these Benches agree wholeheartedly with the Minister on the importance of co-operative and community benefit societies. Like him, we have watched with interest as over recent years the sector has transformed itself and is now undertaking a wide range of new activities. The original founders of the co-operative movement and the original members of community benefit societies would have been amazed at the thought of football and rugby clubs being administered under the same provisions in which they thriftily undertook their activities. But it is a sign of the flexibility of the concept that it has been able to adjust to modern times. Given that these co-operative and community benefit societies now see new areas of growth, it is extremely important that the legislation regulating them is appropriate and, in particular, is updated regularly. Indeed, it is noticeable that it has taken some time for these orders to come before the House. They relate to Bills which were passed in 2002–03—the asset lock mirrors the provision in the community interest company legislation—so it is a pity that the Government could not bring these provisions into force in parallel with the provisions in earlier legislation, rather than leaving it. I understand what the Minister has said about why the Government have decided to exclude registered social landlords from the asset lock, but I would welcome his assurance on one point. If a registered social landlord decides that it wishes to transfer its assets to a straightforward commercial landlord under existing legislation, what prevents it from doing so? As your Lordships may be aware, earlier this week in your Lordships’ House, I referred to the status of some of the Octavia Hill estates in London, some of which have already been transferred to a joint venture between a commercial and a registered social landlord. It is clear that rents will rise in many cases to market levels where they were not at market level before. What was previously social housing is likely to end up within a number of years as being, in effect, not social housing. Given demand pressures on the social housing sector and incentives for any registered social landlord to sell assets, I would welcome any further underpinning of what the Minister has said about the asset lock already. I agree with the decision that the FSA should be the regulator. I do not know who else could logically do it. The phrase ““light touch”” in the same sentence as FSA causes one or two eyebrows to be raised slightly quizzically, but the FSA has attempted, against its better judgment almost, to adopt a lighter touch in recent times. On the level of fines and penalties, the noble Lord, Lord Howard, said that some people think that their fines are too onerous. Others have argued that they are not onerous enough. So this may be a case where the FSA has broadly got it right. However, given that its whole raison d’être and remit is to manage financial services providers, it is logical that it should deal with these forms of society. The audit order seems to be eminently reasonable. Finally, the Minister said that IPS law would be reviewed in the light of the new companies Bill. Can he assure us that that will be done speedily and—I finish as I began—that the regulations affecting these societies will be brought into line with latest practice affecting other bodies in the corporate world?