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6 pm

Motion lapsed (Standing Order No. 9(3))

Motion made, and Question proposed, That this House do now adjourn.— (Mr. Spellar.)

Angela Eagle: The Office of the Third Sector, in collaboration with a wide range of stakeholders, has been working to ascertain the full extent of investment assets affected by the situation with the Icelandic banks. Third sector representatives involved in this work include the Association of Chief Executives of Voluntary Organisations, the National Council for Voluntary Organisations, the Charity Finance Directors Group and the Charities Aid Foundation. The Charity Commission is undertaking further work that complements the efforts so far. The Office of the Third Sector has also been liaising directly with affected charities and is working closely with the Charity Commission to support charities that have deposits in Icelandic banks.

Mr. Mark Hoban (Fareham) (Con): In these discussions, has consideration been given to a temporary funding facility for charities with money locked up in Icelandic banks to help see them through to the distribution that the administrator may make, which could be in one or two years’ time?


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Angela Eagle: The hon. Gentleman asks a reasonable question. He is really talking about the Government providing an unsecured loan facility for affected charities, but we do not feel that that would be an effective use of public funding, simply because there is no additional source for such a grant fund to be drawn from. The money would have to be taken out of moneys already earmarked for charitable purposes by the Office of the Third Sector, which would mean taking money out of a series of initiatives that have been decided on for strategic reasons, including third sector capacity building, volunteering, public service delivery and social enterprise programmes.

We could do that, but if one looks at the list of charities that are most affected by the freezing of their assets in Icelandic banks, all are worthy but not all tie in directly with objectives that we would normally expect public money to be used for. I am a great lover of cats, and Cats Protection is one of the charities. How would we distinguish between helping one charity and another in that context, and do so in a way that could be seen to be fair legally?

Chris Huhne: Will the Minister give way?

Angela Eagle: I will give way in a minute. Opposition Members are right to be concerned but there are no easy answers to the issue, short of guaranteeing all the wholesale depositors as well as the retail depositors. That is a large amount of money, and we would be criticised for using it in that way. A blanket guarantee is not possible. Thinking about whether one could pick out one charity rather than another without being invidious or subject to a series of legal challenges is a complete minefield. I ask hon. Members to think carefully about that. We all would like to be able to do something effective in circumstances as difficult as these. The Government are doing what we can, without getting into that minefield, and we will give the support we can. I can assure hon. Members of that, but there are no easy answers. I am happy to give way again, but I hope that those concerns that I have expressed are being taken on board, because they are very real, and difficult to get around.

Chris Huhne: As someone who covered the Treasury for many years as a journalist, I am acutely aware of the traditional attitude that the Treasury takes towards public money, and I would not want it to be other than extremely careful with public money. However, it seems to me that there are two ways in which the Minister might proceed. One of them is that where a charity is in receipt of public funding—as Naomi House is, to the tune of £330,000, as the Minister pointed out—it is clearly embarked on the process of meeting public purposes. Therefore, one clear distinction that the Minister could draw, when extending help to some charities and not others, would be to distinguish between charities that are embarked upon meeting public purposes, which is already recognised in the fact that they are in receipt of public funds, and those that are not.

May I try to help the Minister on another issue as well? She takes the traditional Treasury view that if funding is to be found for one purpose, it must come from somewhere else. However, this is a genuine contingency; it is genuinely unforeseen. It therefore falls well within the potential remit of the Contingencies Fund. Is it possible to use resources from that fund?


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Angela Eagle: I am not going to make new Treasury policy at the Dispatch Box now, especially when, as I have pointed out—I hope the hon. Gentleman recognises this, although he did not say that he did—there are genuinely difficult issues in trying to provide support in a consistent and fair way, without reaching the stage where there are simply too many implications for other areas of public expenditure. I am happy to think about what he has said, but I hope he will recognise that there are very difficult issues in respect of whether wholesale, rather than retail, depositors ought to be supported as he suggests.

Mr. Oaten: I understand the difficulty that the Minister faces, and I myself am also struggling to find a way around it. Setting aside the arguments that are being put forward, might the Minister be flexible on this issue? If we discover that the primary care trusts are struggling significantly in respect of funding to fill the gap that is now created because of the Naomi House situation, will those public bodies be able to call on the Department of Health to fill that gap? There will clearly now be a gap. They will need additional funding to do the work that Naomi House was doing. That will be the provision of money not to a charity, but to fill the gap that is caused by the PCTs now having to do the work that Naomi House previously did.

Angela Eagle: All I can say is that Members who are working to bring these difficulties to the House’s attention must carry on doing that. We need to be kept in touch—as I am sure my hon. Friend the Minister with responsibility for the third sector is being kept in touch—with developments, and we will keep our eye on this issue. That is all that it is possible for me to say at this stage.

Mr. Letwin: I wonder whether the Minister has quite taken the force of the point made by the hon. Member for Winchester (Mr. Oaten). We do not yet know what any PCT will have to do. If it transpires that because this matter was not investigated by the Government now, some months from now more public money is being spent on providing a service than would have been spent if the outreach service, for example, had been funded at this stage through Naomi House, that would amount to an increase in public expenditure. It would be sad, to say the least, if there were both a gap in provision and an increase in public expenditure, when there could have been less public expenditure and no gap in the service.

Angela Eagle: I understand the logic of the right hon. Gentleman’s argument. I just ask that Members with a direct constituency interest keep my hon. Friend the Minister responsible in touch with developments. I will also endeavour to ensure that the relevant health Minister is made aware of the content of this Adjournment debate, so that we can keep an eye on this situation as it develops. Again, however, I hope the right hon. Gentleman will recognise that there are difficulties in contemplating wholesale depositor protection. That is not possible, and it is very difficult to think about which charities might qualify for special attention over and above others. It is very difficult to see how, despite the helpful suggestions that have been made, one charity could be picked over another.


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Mr. Letwin: I promise that this is the last time that I shall intervene—but I was not suggesting, and I am not sure that the hon. Member for Winchester was, either, that there should be special protection for any wholesale depositor. I was suggesting that it might, as a public policy of the Department of Health, be rational to fund, at least in the interim, a service that is of importance as a health service.

Angela Eagle: As I said, I shall draw the attention of the relevant Minister to our debate. Despite what people think, the Treasury is not in control of everything. It is for the relevant Ministers to think about the implications of developments in their own areas, rather than for me to commit them from the Dispatch Box to do all sorts of things, given that they are unsighted, and are not even present. I am not sure that they would thank me for making such commitments. However, I undertake to point out to them the nature of the debate that we have had.

With that, I hope that the hon. Member for Basingstoke will convey to her constituents—and the hon. Member for Winchester (Mr. Oaten), in whose constituency Naomi House is, will convey to his—how aware the Government are of the circumstances being faced, and how helpful we wish to be, particularly in respect of developments as they occur. I also hope that hon. Members will recognise the difficulties that we face in this respect.

Mrs. Miller: I just wish to make one simple point on behalf of my constituents, and others throughout the seven counties who use this facility. They will find what the Minister has said compelling in the light of the
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grave financial problems that this country faces, but somewhat at odds with what her right hon. and learned Friend the Leader of the House said in Winchester when taking part in an interview, and specifically talking about Naomi House. She said that she would not

I think that Naomi House could be forgiven for feeling very much on its own after today’s debate.

Angela Eagle: That was rather an uncharitable intervention, because I have done my best this evening to set out some of the difficulties with the difference between retail and wholesale depositors, and them the implications of them. I do not believe that this Government are leaving the charitable sector on its own. Its representatives have met two different Ministers, we are in contact with developments and we have met the range of organisations that I listed to deal with the ongoing situation. The point at issue is whether wholesale depositors can be converted into something else and helped in part, because it is not possible to guarantee all wholesale depositors—indeed, many Members of this House would not regard that as a remotely acceptable development, if it were to occur.

We face difficulties, but I would like to emphasise again that this Government have not left charities on their own. We are working with them to see what we can do to assist them as this process goes on. We will continue to do that, and I hope that the hon. Lady will be assured by my suggestion that that is so.

Question put and agreed to.

6.13 pm

House adjourned .


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