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

My Lords, I am grateful for the support given to the two orders by both Benches opposite. I shall try to deal with some of the questions that have been raised. The noble Lord, Lord Howard, asked whether the asset lock is reversible. It is not. There was discussion of the FSA’s role; I am pleased that we are agreed that the light touch is an appropriate way forward. The FSA has a duty to maintain confidence in community benefit societies and must exercise its powers for this purpose. It cannot impose penalties, but it can require restitution. There is an opportunity to appeal to the High Court for a decision against the FSA. The consultation that took place on a range of matters associated with these orders showed increased satisfaction with the FSA. The noble Lord, Lord Newby, asked specifically about RSLs, acknowledging that they are outside the asset lock provided for in these orders. I think that he was pressing for further specific detail as to the nature of the current asset lock. I cannot give the noble Lord any specific detail here and now; I know that it is an issue he has pursued in another area. They would, of course, be able to transfer assets to a community benefit society that did have an asset lock, but I cannot say to what extent they can transfer outside arrangements that have an asset lock. The import of these orders is that there are restrictions on that, otherwise it would have taken us down the path of including RSLs in the orders. As regards updating company law, an exercise is under way to review the amendments introduced into the Company Law Reform Bill and to identify what can usefully be used to amend IPS law using the power contained in the Industrial and Provident Societies Act 2002. It is difficult to give a commitment to a time scale, particularly having sat through two sittings only so far of the Committee stage of the Company Law Reform Bill. That itself is going to be quite an extended process. The point about the need to make progress on that is well taken. The issue of the different thresholds applicable—or to be applied—to audit cut-offs was raised. We obviously cannot comment on what the outcome of the Charities Bill might be; it is still going through the process. The objective is to align—as this aligns non-charitable IPSs with non-charitable companies—the charity sector so that charities are on a level playing field. At the moment there is disparity but we recognise that charities should be subject to a higher standard of audit than commercial and other societies. I think that that has long been accepted as a principle. I hope that that has dealt with each of the points raised. I am, again, grateful for the support given. In conclusion, these two statutory instruments take important steps forward. Not only do they contribute to creating a more level playing field between IPSs and companies but, even more important, they will enable these societies to continue to play their valuable role in our economy and society. We are keen for the sector to grow and flourish. These two instruments will help to drive that agenda forward. I commend the order to the House. On Question, Motion agreed to.