Co-operative and Community Benefit Societies Act 2014 (Amendments to Audit Requirements) Order 2017

Lord Kennedy of Southwark Excerpts

Thursday 1st February 2018 Lords Chamber

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I have some brief comments in respect of the orders in front of us today. I declare that I am a member of the Co-operative Group and have been a member of the Co-op, as it were, for over 40 years, after starting off in the Royal Arsenal Co-operative Society. I am also a director of the London Mutual Credit Union, one of the biggest credit unions in London. These orders will affect us because its turnover is in excess of the uprated ones here.

The audit requirement is good news, and will certainly help many smaller credit unions in terms of the audit function burdens they have. The point the noble Baroness, Lady Kramer, made about ensuring that the organisations are properly accounted for is important as well. These sums of money are owned by members. They should be properly accounted for and any risks taken into account. Where there are problems, people should be alerted to them, and they should be dealt with properly.

I support the building society order, which enables them to join clearing houses. I see from the papers that the Government consulted the large building societies. That is fine, but did they also consult the Building Societies Association, which is the umbrella body for them? I cannot see that there are any views from it in the papers here.

It is a good move to put mutual societies in Northern Ireland under the umbrella of the FCA. The credit union sector in Northern Ireland is very big and much bigger than it is in the rest of the United Kingdom—in fact, the credit union sector is big in the whole island of Ireland. Giving it protection under the umbrella of the FAC is very welcome.

[Lord Mawson (CB)]

My Lords, I agree with the noble Lord, Lord Kennedy. Although I am not sighted on the detail of the co-operative and community benefit societies order, it feels like the right direction of travel. My point is really just a general one. I spend a lot of my life in SMEs and small charities, and at the moment many of them are becoming overwhelmed by the amount of bureaucracy, red tape and other things that are appearing on their desks. My question is really one that the Minister might take back to government. Someone needs to look carefully at what is happening to these small organisations, in terms of the amount of red tape and things that are appearing on their desks, and whether we can create this direction of travel for some of them. It is just a general point and a concern.

I was at a small charity last weekend, with one member of staff and two part-time people working in it, which is doing a great piece of work around education in the local community. The amount of treacle and stuff they were having to deal with was immense and extraordinary. You can feel many good people, who want to do good things in their community, wondering how much longer they can have a role in these kinds of things. They become very fearful of the 92-page document that appears on their desk. It is a general point, but one that needs to go back to government.