The History of IPS Reform

Legislation governing the co-operative sector has remained untouched since 1968, apart from worker co-op legislation in the 1970s.
?? In 2002, The Government published its Cabinet Office Strategy Unit Report, which recommended far-reaching modernisation of Industrial and Provident Society law. This signalled a major breakthrough in establishing our organisations at the very heart of the Government’s agenda. In policy terms, this report opened up the possibility of new mutual organisations running public services, and is a direct result of The Co-operative Party’s last four years’ policy development activity.
?? The Co-operative Party realised that the Co-operatives Bill was unachievable in its current form and so when Gareth Thomas, Co-operative Party Chair, was number seven in the Private Members Bill Ballot in the autumn of 2001, we saw this as a way of taking the

process forward.
?? In July 2002, The Industrial and Provident Societies Bill finally became Law following a year-long campaign in Parliament. The purpose of this Act was to bring industrial and provident society legislation into line in certain important respects with company and building society legislation and to make possible the future assimilation of Industrial and Provident Society Law with updates to Company Law.
The enactments were as follows:
1. As things stood before this Act, industrial and provident societies have adopted provisions within their rules which seek to achieve the highest level of mandate that they are permitted to require under the existing legislation. That legislation dates back to the 19th century, and the demutualisation provisions are still based upon the number of members attending meetings, rather than the total membership.
The voting requirements for demutualisation of industrial and provident societies will be brought into line with those that apply to building societies as a result of recent (1997) legislation, which essentially requires a demutualisation resolution to be passed by a minimum percentage of the total members, rather than a minimum percentage of those attending meetings (demutualisation can now only take place on a 50% turnout and on 75% vote in favour).
2. At present, save in limited respects, only an Act of Parliament can update industrial and provident society legislation. The newofficers rather than exclusively by Seal, enabling more rapid execution of corporate decisions.
?? These provisions will place co-operative societies on a level playing field with companies, and greatly facilitate efficient governance.
Employee Share Schemes Act
This was another Private Members Bill that was successfully piloted through Parliament by the Labour and Co-operative MP Mark Lazarowicz in 2002.
The Act changed the law covering employee share schemes in order to promote greater employee ownership of UK companies. This will benefit in particular small and medium-sized businesses that seek to become partly or fully employee-owned. The Act promotes employee shareholding by ensuring that employee representatives have a right to sit as trustees on the boards of trusts set up to manage employee share schemes Act permits the use of statutory instruments when company law is changed in future to assimilate

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