Co-operatives, Mutuals and Friendly Societies Bill

Lord Bourne of Aberystwyth Excerpts

2nd reading
Friday 24th March 2023 Lords Chamber

[Lord Bourne of Aberystwyth (Con)]

My Lords, I support Second Reading of this Bill and declare my interests as set out in the register. I congratulate the noble Lord, Lord Kennedy of Southwark, on his sponsorship of the Bill in your Lordships’ House, and thank the honourable Member for Preston, Sir Mark Hendrick, for steering the legislation through the other place. I also congratulate my noble friend the Minister and the Government on supporting this legislation.

The co-operative movement can be traced back to the Victorian era, essentially in response to the Gradgrind version of capitalism, in contrast to the more enlightened Tory tradition of the Earl of Shaftesbury and others, who legislated to protect workers and who recognised the merit of co-operation. The social enterprise model is an important recognition of a form of business other than the simple shareholder model. Community-owned businesses are a vital part of our life, generating employment, social benefit and continuity.

Demutualisation can be a threat to the mutual sector, facilitating the break-up of a business, as we have seen in the past. The distribution of all the assets, including substantial legacy assets, contrary to the intention of those who set up that business, is not in the interests of us all. Mutuals may, of course, resist demutualisation attempts, as the recent Liverpool Victoria saga showed us in 2021, when the private US equity firm Bain Capital tried unsuccessfully to take it over. This legislation will assist in resisting demutualisation.

The legislation governing mutuals is somewhat archaic. I welcome the possibility that the Law Commission might look at the wider area of mutuals and how they may have access to capital. I hope that the Minister, in responding, can say whether there is a timescale for that and whether it is happening. The United Kingdom has a relatively small mutual sector, compared with other comparable economies such as France and certainly Italy, where it is significantly larger—particularly in Emilia-Romagna, where it is a large part of the enterprise sector.

This Bill will give co-operatives, mutuals and friendly societies flexibility in assessing what fits for themselves as the best model. It enables them to adopt this form of block if they want to do so. As the noble Lord, Lord Kennedy, has said, it is not obligatory. It will help those societies that choose to adopt the so-called asset lock. Voluntary asset locks have been adopted to good effect by some societies, often with so-called charitable assignment clauses, but this legislation will build on that and ensure that, where there is an intention on the part of the business, it can go forward with a lock that is significantly harder to unpick than some of these voluntary locks that have been adopted.

I give an unqualified welcome to what is clearly a sensible piece of legislation. I have just one additional question for the Minister. Looking at the Explanatory Notes, this is a reserved area for Wales and Scotland; that much is clear. It is not a reserved area for Northern Ireland, so what will happen in relation to Northern Ireland? We all hope, I am sure, that the devolved body, Stormont, will be up and running before long. It has been a good week in relation to Northern Ireland, with the success of the legislation going through. It has been a good week for sensible government. I hope that the Minister can say something about how the Northern Ireland part of the United Kingdom can benefit from this legislation in the short term while we do not have Stormont up and running.

However, I will not detain the House any longer, except to give an unqualified welcome to this legislation, and to thank the noble Lord for bringing it forward.

UK Infrastructure Bank Bill [HL]

Lord Bourne of Aberystwyth Excerpts

Consideration of Commons amendments
Tuesday 14th March 2023 Lords Chamber

[Baroness Hayman (CB)]

I declare my interest as co-chair of Peers for the Planet and rise to speak to my Motion 3A, which as the Minister said would reintroduce nature-based solutions into the definition of infrastructure in which the UK Infrastructure Bank may invest.

We had some very helpful conversations after Report and the debates in the other place, and I think we have now reached a highly satisfactory position on this amendment, in no small part due to the Minister’s customary constructive approach to the debates that have taken place in this House, for which I am very grateful.

Of course, the original amendment included the “circular economy”, and I know that there will be some disappointment that that is not included now, but the bank’s strategy is reassuring on that issue. Anyone who listened to the item on the “Today” programme this morning about data centres using the heat they normally have to dispose of to heat up the water in local swimming pools will have heard a lovely example of how we need to put those sorts of issues together.

I thank all the Members of this House who have taken part in the debates, and in particular those who signed the various iterations of my amendment, including the noble Lord, Lord Bourne of Aberystwyth, the noble Baroness, Lady Jones of Whitchurch, and the noble Lord, Lord Teverson. This amendment has had significant cross-party support because of the increased recognition that nature-based solutions have a critical role to play in the fulfilment of the bank’s objectives. The Chancellor’s strategic steer in 2022 encouraged the bank to

“explore early opportunities in nature-based solutions”

and aim to have

“a positive impact on the development of the market”.

The bank has since published a discussion paper setting out its initial thinking on how it can invest in and support the growth of natural capital markets, and I look forward to the results of this consultation.

The discussion paper clearly explains the importance of natural capital as a form of infrastructure and the vital contributions it makes to our society and economy, often in ways which are more cost-effective to the taxpayer. Carbon removals through creating and restoring woodlands, wetlands and peatlands, flood mitigation measures, providing “clean and reliable” water supplies, underpinning our food security and bolstering our resilience to climate change: these constitute numerous examples of how we can deploy nature-based solutions to support our infrastructure and provide social, economic and environmental benefits. There is also an ever-increasing recognition of the key role that nature can play in solving climate change, nature being our biggest asset with which to fight it. Nature-based solutions also provide significant co-benefits, such as jobs and good health and well-being outcomes, with considerable economic advantages.

I welcome that the UK is leading on the Taskforce on Nature-related Financial Disclosures, but there is an average $700 billion funding gap for protecting and restoring nature globally, and evidence that more needs to be done to help market participants mainstream and scale these products alongside growing investor demand. This simple addition to the definition of infrastructure in the Bill sends a strong signal to the markets that the UK recognises this and the Government are serious about taking action to help build and develop this nascent market. It also provides certainty to the bank, which recognises that it has a role in developing capacity towards a pipeline of investable projects and is poised to act. It will encourage others to do the same and further develop the UK finance sector’s position as a leader in this important emerging new market.

As I said, I am very grateful to the Minister and her officials for the support they have given and the resolution that I think we have reached.

[Lord Bourne of Aberystwyth (Con)]

I support the noble Baroness, Lady Hayman, in her proposed amendment and congratulate her on her tenacity in pursuing this issue. She has achieved something notable, and I thank her very much indeed. Account being taken of nature-based solutions improves the Bill and, on that basis, I also congratulate the Minister. My noble friend has proved herself to be a listening Minister, and the Government have taken a very common-sense approach, which improves the Bill. It was previously a good Bill, and it is now a better Bill after changes made in this House and the approach of the Minister and the Government.

I do not propose to detain the House, except to say that I agree with much of what the noble Lord, Lord Teverson, said in Committee and at Second Reading. I regret that we have not gone a bit further, but at least we have an improvement in this legislation. On that basis, I once again congratulate the Government.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I join in the congratulations to the noble Baroness, Lady Hayman, who is both a force for nature and a force of nature in your Lordships’ House. I thank everyone else who has joined in getting this progress on nature-based solutions, although we should not look at those solutions as an alternative to cutting our carbon emissions. Both those things have to be done.

I was not going to speak but, given something the Minister said in her introduction, I feel forced to ask her a question. In justifying the exclusion of “circular economy” in the Commons amendment, she said that it was “not a precise term”. Does the Treasury understand the term “circular economy” and its essential nature in delivering the sustainable society we need? If the Minister wants a source for this, I point to a government paper entitled, Circular Economy Package policy statement, from 30 July 2020, which was put out jointly with Wales, Scotland and Northern Ireland and which defined “circular economy” as

“keeping resources in use as long as possible, extracting maximum value from them, minimizing waste and promoting resource efficiency”.

Will the Minister confirm that the Treasury recognises that the circular economy is an acknowledged term and is urgently needed?