Co-ops and credit unions bill set to clear Commons » Bill Payments » 24dash.com

A backbench Bill modernising the law relating to co-ops and credit unions was set to clear the Commons today.

Labour former minister Malcolm Wicks said his Co-operative and Community Benefit Societies and Credit Unions Bill represented a "re-branding" of societies.

It introduced new requirements which would ensure they could be "properly supervised" by the Financial Services Authority.

In third reading debate, Mr Wicks (Croydon N) said the changes would help the sector adopt a "modern 21st century status and persona" during the economic downturn.

The laws on credit unions would be brought into line with those for building societies after a significant expansion in membership over recent years.

The Bill has the backing of both the Opposition and the Government.

Mr Wicks acknowledged the Bill might appear a "rather dry measure" but insisted it was necessary, particularly given a rising public interest in co-ops.

He said: "We are seeing something of a revival of interest in the principles of mutuality and co-operation.

"This is partly driven by the consumers' concerns that goods are sourced in an appropriate way, without the use of child labour for example.

"It comes at a time when people are increasingly interested in the quality of products, given rising concerns about health and issues of obesity.

"And of course it comes against a backdrop when many would argue some of the existing corporate institutions, not least in the financial sector, have seriously let down the public.

"It is not surprising, therefore, that we see more interest in co-operatives."

Liberal Democrat spokesman David Heath said his party backed the Bill and added that he had been concerned when building societies were allowed to demutualise.

"I think there is now a real understanding that, actually, working in a co-operative way for the common wealth is a very beneficial way of organising a business," he said.

For the Tories, Nick Hurd welcomed the "useful Bill".

Highlighting the economic importance of co-operatives and mutual societies, he said the sector employed close to a million people and had a revenue in excess of £84 billion.

It was "a sector of society that has a big economic weight and an important social impact.

"But whether they are building societies, housing associations or football supporters' clubs, they need the right legislative framework - one suited to the 21st century - and this Bill provides it."

Treasury Financial Secretary Stephen Timms said Mr Hurd was right to emphasise the importance of mutuals, which have combined total assets of £400 billion.

He said the legislation had "three major benefits": it would promote choice and diversity in financial services, encourage saving and confidence in saving and would make sure people had information about and access to a range of products to suit their needs.

The global recession had demonstrated the importance of the sector, he said, and the Bill contained important provisions to ensure they could continue to thrive.

With Chancellor Alistair Darling due to set out the Government's plans for the future shape of financial regulation before the summer recess, Mr Timms added: "Against that backdrop and given the problems we have seen with access to credit for families and businesses, the importance of the mutual sector, the significance of its potential contribution, is clearer today than ever.

"And so the provisions in this Bill will, I believe, stand credit unions and other co-operative financial institutions in good stead to be part of the renewed financial services industry, meeting Britain's needs as we grow out of this crisis."

Mr Timms pledged the Government's "wholehearted support" for the Bill.

Mr Wicks thanked MPs for their backing, adding: "I'm pleased that we are getting consensus in this House and we will have to see what the Upper House make of it."

The Bill was given an unopposed third reading.