Public Bodies Bill [Lords]

The Committee consisted of the following Members:

Chairs: †Mr David Amess  , John Robertson 

† Ashworth, Jonathan (Leicester South) (Lab) 

† Blackman-Woods, Roberta (City of Durham) (Lab) 

† Bray, Angie (Ealing Central and Acton) (Con) 

† Crabb, Stephen (Preseli Pembrokeshire) (Con) 

† Davies, Glyn (Montgomeryshire) (Con) 

† Elphicke, Charlie (Dover) (Con) 

† Gyimah, Mr Sam (East Surrey) (Con) 

† Harrington, Richard (Watford) (Con) 

† Heath, Mr David (Parliamentary Secretary, Office of the Leader of the House of Commons)  

† Hurd, Mr Nick (Parliamentary Secretary, Cabinet Office)  

† Jones, Susan Elan (Clwyd South) (Lab) 

† Mosley, Stephen (City of Chester) (Con) 

† Nandy, Lisa (Wigan) (Lab) 

† Raab, Mr Dominic (Esher and Walton) (Con) 

† Trickett, Jon (Hemsworth) (Lab) 

† Vaz, Valerie (Walsall South) (Lab) 

† Williams, Hywel (Arfon) (PC) 

† Williams, Mr Mark (Ceredigion) (LD) 

† Wright, David (Telford) (Lab) 

Mr James Rhys, Committee Clerk

† attended the Committee

Public Bill Committee 

Thursday 8 September 2011  

(Morning)  

[Mr David Amess in the Chair] 

Public Bodies Bill [Lords]

9 am 

The Chair:  Good morning, everyone. Before we begin, I have a few preliminary announcements. It is not particularly warm, but if hon. Members want to remove any articles of clothing, that is perfectly acceptable. Please will all hon. Members ensure that mobile phones and pagers are turned off. I will not be pompous and draw attention to it, but I can hear phones when they go off, and our proceedings are being broadcast. Devices should be placed on silent mode during the proceedings. 

I inform hon. Members that as a general rule, I and my fellow Chairman do not intend to call starred amendments that have not been tabled with adequate notice. We are blessed with a wise Clerk, who will help hon. Members if they do not understand proceedings, and I am sure that if that can all be done privately, we will proceed efficiently. The required notice period in Public Bill Committees is three working days. Therefore, amendments should be tabled by the rise of the House on a Monday for consideration on a Thursday and by the rise of the House on a Thursday for consideration on a Tuesday. 

I realise that although it is 16 months since the election, not everyone has served on a Public Bill Committee before. We are here to help. They may not be familiar with the procedure in Public Bill Committees, so I will briefly outline the way in which we proceed. The Committee will first be asked to consider the programme motion on the amendment paper, on which debate is limited to half an hour. Then we will proceed to a motion to report written evidence, much of which is arriving. Then we will begin line-by-line consideration of the Bill. I first call the Minister to move the programme motion agreed by the Programming Sub-Committee. 

The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd):  I beg to move, 

That— 

(1) the Committee shall (in addition to its first meeting at 9.00 am on Thursday 8 September) meet— 

(a) at 1.00 pm on Thursday 8 September; 

(b) at 10.30 am and 4.00 pm on Tuesday 13 September; 

(c) at 9.00 am and 1.00 pm on Thursday 15 September; 

(d) at 10.30 am and 4.00 pm on Tuesday 11 October; 

(e) at 9.00 am and 1.00 pm on Thursday 13 October; 

(2) the proceedings shall be taken in the following order: Clause 1; Schedule 1; Clause 2; Schedule 2; Clause 3; Schedule 3; Clause 4; Schedule 4; Clause 5; Schedule 5; Clauses 6 to 32; new Clauses; new Schedules; remaining proceedings on the Bill; 

(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Thursday 13 October. 

It is an enormous pleasure to serve under your chairmanship, Mr Amess. I am sure that the rest of the Committee will have noticed your broadsides against the BBC this morning. We can assure you that we will conduct our affairs with high levels of seriousness and low levels of Botox. 

The programme motion was agreed at the meeting of the Programming Sub-Committee. It allows for 10 sittings of the Committee over five days and proposes that the Bill be taken in clause order, with the schedules being taken after the clauses that introduce them. 

Jon Trickett (Hemsworth) (Lab):  Like the Minister, I welcome the opportunity to serve under your chairmanship, Mr Amess. This is the first time that I have done so. Your reputation runs well before you. You are a fair but firm Chairman. I have made this comment before: I hope that you will be fair with us but firm with the people on the other side of the room. I am sure that that will be the case and that your wisdom but also your wit will keep us in order and at least slightly amused as well. 

It is good to see the rest of the Committee assembled here. I see many bright eyes and bushy tails, so we can look forward to an interesting set of debates. The matter at hand is the programme motion. The House is aware, because we raised the issue on Second Reading, that we are uncomfortable—I will seek a ruling from you on this in due course, Mr Amess—with the fact that members of the public were able to make representations on the Bill only prior to its appearance in the House of Lords. After having made that point in the House, I was told that it is the convention with a House of Lords Bill, which this is, for evidence to be taken from witnesses at the time at which the Bill appears in the other place. Of course that is true, but it seems to me that although conventions are there to take heed of and to pay careful attention to, they should be flexible enough to allow for some variation from time to time. 

This Bill changed very substantially between the point at which it was tabled in the other place and when it was put in front of us. It is now such a different Bill. Moreover, large numbers of people believe that we should have had the opportunity to hear from interested members of the public. I wonder whether any other Member has had the pleasure of receiving several hundred e-mails per hour in favour of S4C. Perhaps it happened only to myself and one or two others. I must say that my knowledge of written Welsh is not as strong as it should be. I was helped by the fact that there was a translation at the bottom of the page. 

Hywel Williams (Arfon) (PC):  I am grateful to the hon. Gentleman for giving way so early in our proceedings. I can confirm to the Committee that I too have received several hundred e-mails. I just wanted to say that the translation into English is fully equivalent, and I hope that hon. Members scrolled down the page and spotted that particular facility. 

Jon Trickett:  We did scroll down, although after doing so several hundred times we decided that all of them were quite similar in character. The point I wanted to make was that it is unusual to receive that number of e-mails. Given that the Government’s ideas on S4C and other serious matters have evolved, it might have been a

reasonable idea for us to have had the opportunity to hear from interested members of the public before we decided how to proceed. 

S4C is a serious matter. We know that it is a major national issue in Wales. Equally important, though—or perhaps even more important—is the chief coroner issue, which is a serious matter. I totally accept that the Government have a point of view, and we will hear it argued later. The truth is that many people in our country, including the relatives of people in the armed forces who have fallen, are deeply concerned about the decision to press ahead with changes to the manner in which we deal with the coronial service. The British Legion has been to see me—and probably other Members, too—and said that this is not the right decision. It would have liked the opportunity to say a few words here, so that we could understand its point of view. We do not necessarily have to accept what the British Legion has to say about the coronial service, but the organisation does represent our heroes and there is no difference between the various sides represented here about the esteem in which we hold it. 

It would have been good—and it still may be—for us to have found time to listen to witnesses. There are other people, too. I noticed that the safety in sports ground issue, which I will refer to later, is also up for abolition. Tens of thousands of people went on the website that No. 10 created, which is a good innovation, to talk about what happened at Hillsborough. There will be relatives of people who died at Hillsborough who have a view about how safety at sports grounds can be guaranteed. They might well have wanted an opportunity to make their points. I raise these matters not in a partisan way—we will be partisan from time to time—but to say that the wisdom of the House is that if we are to bridge the gulf between ourselves as politicians and the wider public, we have to open up our procedures and processes. No. 10 has set up this site, which is a good innovation, and said that if 100,000 people sign a petition it can be debated and voted on in the House. 

Another good innovation is allowing people who have a passionate interest in a matter being discussed by us to come here to make a point or two to us. On the question of how we are to conduct ourselves over the next few weeks, I seek your advice, Mr Amess, on whether it is still possible for the Committee to find a little time, if the Government are prepared to do so, to listen to some key witnesses. That would perhaps help the people in S4C; at least they would know that their voice was being heard—if only briefly—by this Committee. Others may have points to make on the matter. 

Hywel Williams:  I also look forward to serving under your chairmanship, Mr Amess, and that of your colleague Mr Robertson. I am glad to be on the Committee for this wide-ranging Bill. 

As a Welsh Member, my particular interest is in Sianel Pedwar Cymru, or S4C. I am glad to see here a substantial contingent from Wales, and of people who have a Welsh interest. I am sure we will contribute to the debate in general, as well as on that particular issue. 

I want to support the points about evidence made by the hon. Member for Hemsworth. With other colleagues, I have met people from Wales who now see they have missed their opportunity to make their points in evidence. That would have been useful. We will obviously have a debate on S4C a little later, and I look forward to that. 

David Wright (Telford) (Lab):  It is a great pleasure to serve under your chairmanship, Mr Amess, and to follow the hon. Member for Arfon. On the matter of organisation, the Opposition would be happy for a number of the sittings currently scheduled within the programme motion to be devoted to evidence. We made that fairly clear at the Programming Sub-Committee. There would be an opportunity within the current programme motion for the Government, if they chose, to come back and say they are willing to break and take evidence. Alternatively, the Opposition are happy to add sittings to the programme motion in order to invite people in to give evidence. I place that before the Committee because the Opposition are keen to ensure full scrutiny of the Bill. 

I understand that the Committee has, under Standing Orders, the authority and power to break and take evidence at any time it chooses. I look to you, Mr Amess, with your long-standing experience in these matters. I place on record the Opposition’s view that we would be happy to look again at the programme motion and break at any point to take evidence, or to add sittings. To be fair to the Government, I think there is sufficient time within the programme motion to consider the Bill in some detail. We do not have a particular axe to grind on the out-date of the Bill, but we think it would be good to have additional scrutiny and the opportunity for witnesses to attend the Committee. 

The Chair:  Mrs Vaz. 

Valerie Vaz (Walsall South) (Lab):  Thank you. It is Ms Vaz. 

The Chair:  I apologise. Ms Vaz. 

Valerie Vaz:  My husband, Mr Townsend, would be most upset about that. It is a great pleasure to serve with you as Chair, Mr Amess, and to be in your company and that of other hon. Members. 

I add to the call for witnesses to this Committee. As a lawyer, I am concerned about some of the powers in the Bill. I have never read any Harry Potter books. I got to the first page and thought it was not for me; it was not my level. However, reading the Bill, indeed the first clause, is like waving a magic wand and saying, “Expelliarmus! You are out.” That causes me, as a lawyer, great concern. I have had to write to some of the bodies affected by the Bill because I am not clear what consultation has taken place. I would like to ask the Minister: what consultation has taken place with these bodies? We are talking about huge, important serious bodies such as the Human Tissue Authority and the Human Fertilisation and Embryology Authority. They all have brand names. They are going to be shoved into an organisation. I have sat on the Health Committee, so I have seen and heard the way the Care Quality Commission operates and I have serious concerns about that. 

I would like to know what consultation has taken place, and whether we can look at the possibility of hearing evidence from some of these serious bodies, because the powers in the Bill are huge. The Minister might happen to be in a good mood on one day, and decide to absorb and get rid of some of the bodies, but he might be in another mood on another day and decide

that he does not want to do so. As someone who did constitutional law, that rankles. I plead with the Minister to allow those bodies to come forward; whether they do so in Welsh or English, I do not mind. 

9.15 am 

Susan Elan Jones (Clwyd South) (Lab):  It is a great pleasure to serve under your chairmanship, Mr Amess. I would like to express my view that it is imperative that witnesses are called to the Committee, simply to broaden and deepen our knowledge of certain issues. I, too, have received many e-mails about S4C, which reflects in no small part how important this issue is across Wales. If one goes back into the history of the Welsh-language channel, when Welsh-language broadcasting was first mentioned in this House—I think it was in the 1930s, although obviously I do not remember that—the speaker was laughed at. Things have changed so much, however, and one might argue that the reason why S4C exists is because listening took place at a very senior level. The opportunity to call witnesses is important. Many Members of Parliament have said that they were unaware of the strength of feeling until receiving such e-mails, and it would be even better if we heard from witnesses in person as well as via e-mail. 

The Chair:  Order. Unless anyone else wants to contribute—we have until 9.30 am for the Minister to respond—I thought that this would be an appropriate moment to return to what the hon. Member for Hemsworth has said. 

Mr Mark Williams (Ceredigion) (LD):  I apologise for interrupting you, Mr Amess. I am, like others, grateful for the opportunity to endorse the comments that the hon. Member for Clwyd South, in particular, has made about S4C and the need to broaden the information base of members of the Committee. She and I both have the luxury of serving on the Welsh Affairs Committee and of having undertaken a detailed inquiry, and, of course, there was also an extensive debate in the House of Lords on the matter. The debate has moved on sufficiently in Wales for many of us who have a Welsh interest to take evidence from S4C and from other interested parties such as Cymdeithas, but I suspect that there is a slight bafflement or bemusement among other members of the Committee. The opportunity to call witnesses, not least because the Opposition have said that that could happen within the existing time frame, would be immensely helpful. 

The Chair:  Order. I apologise to Mr Williams; I had not realised that he wanted to speak. I would still like to respond before the Minister speaks. I thank the hon. Member for Hemsworth for his kind words; I am very susceptible to flattery. I say to the Minister that I have not had botox, although I am sure that I need it. I will now respond to the hon. Member for Hemsworth, who kindly gave me advance warning on what he intended to say. 

I wanted to say to Members at the outset that this whole procedure of taking evidence before the Committee stages of Bills is quite new; indeed, I chaired the first

evidence session. The procedure is only just over two years old. We are in new territory here. If we want to break precedent—I am looking at the two Whips—I know that things are normally done through the usual channels, and there could be a discussion when we break at 10.25 am. It is, however, a matter for the Committee ordinarily in consideration of the resolution of its Programming Sub-Committee, to determine whether it wants to take evidence. Of course, I chaired that committee. Hon. Members should know that it has not been the practice for Committees on Bills starting in the Lords to take oral evidence, but there is no prohibition in the Standing Orders on their doing so. This is the first time that I, whether as a Chairman or ordinary Member, have had all these e-mails. I am not even computer literate and I do not quite understand, although I am now told there is an English translation. This is a new phenomenon and it is entirely up to the Committee to decide. 

Mr Hurd:  Thank you for that, Mr Amess. I am sure that the Committee will have noted your remarks about your susceptibility to flattery. You can expect to bathe in the stuff over the next few sittings. In a way, we have had this debate before. The Government take great pride in our commitment to transparency and genuine consultation. But the programme motion was agreed at the meeting of the Programming Sub-Committee and we will not change our mind. You made it clear what is considered precedent and process here. I think the Committee needs to be reminded that evidence sessions were never programmed for Bills starting in the Lords under the previous Administration. So the current passion for doing so seems to be a conversion on the road to Committee Room 9. 

We know full well that the Bill contains substantial powers, as the hon. Member for Walsall South said. Some of the issues underlying the proposed reforms are extremely emotive, such as the Coroners Bill and S4C. We understand that completely. The debate so far has missed an important point in terms of the Bill’s objectives. It is an enabling Bill, which allows Departments and Ministers to come to the House with secondary legislation on proposed reforms. Clause 10 makes it quite clear that in each of those cases there is to be appropriate and adequate consultation on the specific proposed reforms. Therefore the public will have an opportunity at that secondary stage to make their views known. As you made clear right at the start, Mr Amess, there is nothing to stop the public making written submissions to the Committee at this early stage. So I must make it clear that the Government are not prepared to change their mind. 

Jon Trickett:  We do not want to put the Minister or other members of the governing parties in a difficult position by forcing a Division, which will look as though they are attempting to prevent the British Legion or S4C from making their views known. I do not want to force a Division, but I am prepared to do so. When the orders are placed before the House, will there be an opportunity for the British Legion or S4C to appear before the House to give their opinions? I believe that is not the case, but can the Minister confirm that? 

Mr Hurd:  I would be very surprised if all the parties that feel passionately about the issues that are being debated feel that they are short of opportunities to

make their case known to Ministers. As the hon. Member for Hemsworth said earlier, both the emotive issues mentioned so far have been extensively debated in the House of Lords. As we speak, the Departments responsible for those reforms are in consultation with the bodies. There is a very active process of engagement on these issues. But there is no precedent for evidence sessions for Bills that start in the Lords. It is a duplication of scrutiny as far as we are concerned and we are not prepared to change our mind. 

Question put.  

The Committee divided: Ayes 10, Noes 9. 

Division No. 1 ]  

AYES

NOES

Question accordingly agreed to.  

Resolved,  

That, subject to the discretion of the Chairman, any written evidence received by the Committee shall be reported to the House for publication.—(Mr Hurd)  

The Chair:  Copies of memorandums that the Committee receives will be made available in the Committee Room. If anyone has a problem getting the papers, perhaps they will kindly let us know. 

Clause 1 

Power to Abolish 

Jon Trickett:  I beg to move amendment 30, in clause 1, page 1, line 9, at end insert ‘as set out in Regulations,’. 

The Chair:  With this it will be convenient to discuss the following: amendment 31, in clause 1, page 1, line 12, after ‘trustees’, insert ‘as set out in Regulations.’. 

Amendment 34, in clause 1, page 1, line 12, leave out ‘or other unincorporated body of persons.’. 

Amendment 32, in clause 1, page 1, line 12, at end insert— 

‘(f) a registered charity.’.

Amendment 35, in clause 1, page 1, line 12, at end insert— 

‘(f) a society registered or deemed to be registered under the Co-operative and Community Benefit Societies and Credit Unions Act 1965.’.

Amendment 39, in clause 1, page 1, line 12, at end insert— 

‘(f) a community benefit society.’.

Jon Trickett:  If all the votes are as close as that, we could be in for an interesting sitting. I dare say we will all be hanging on the edge of our seats as the votes are counted. Nonetheless, one would hope that there will not be too many Divisions, as, in principle, there should not be a great gap between the parties. The truth is that the non-departmental public bodies, which are more popularly called quangos, have grown exponentially over the years and that is not something that anyone can view with great pride. All parties, when in government, have seen quangos being created. To an extent, they are unaccountable bodies because they stand independent of the state. They stand independent from the normal agencies of the state, which report through Parliament and via Ministers. They also stand aloof from the general community. 

A few moments ago, I referred to the gap that appears to be opening up between the governed and those who govern. The idea of an unaccountable state and of bureaucracies that are frequently enormous and remote is one that no one can view with equanimity. In principle, we are all agreed that there should be a careful review. It is good that the Government have agreed on an ongoing basis, as was said in the House yesterday, to review the agencies that have been created. We want to agree with the general principle of the Bill. Moreover, we want to deal expeditiously with the Bill. We will not be indulging in any delaying tactics. 

At the same time, Parliament itself determined that the exercising of a particular public function, whether it is S4C, the coronial service or whatever, should be done in an independent way. Ministers must have had their reasons for saying that this would be better dealt with at arm’s length from the normal systems of accountability. Therefore, it is incumbent on us to look carefully at the changes that are being made. As the Opposition party, it is our duty to ask searching questions both about the powers that the Minister is giving to himself and his successors and about the agencies that he intends to abolish, change, merge, adjust or reform. Our purpose is to address the meat of the Bill—the schedules—in some detail, but also to ask questions about the powers that the Minister has given himself. 

9.30 am 

Clause 1 is one of the five clauses that deal with ministerial powers to change the structure of these non-departmental bodies, and it has two parts to it. The first part gives the power to a Minister to abolish, by order, bodies or offices specified in schedule 1. The Committee will gather that we have no problem with a Minister holding that power, provided that it is exercised in a reasonable way. Later in the Bill, we will see that other powers might be exercised in a way that is not reasonable, but for the moment we have no quarrel with Ministers having the power to abolish such bodies, provided that that is done appropriately. 

However, the second part of clause 1 worries me. When we reflect on the quango state, we recall that those institutions were created because Parliament decided that their functions were necessary to the community—they were in the public interest—but that they should not be exercised by Ministers directly. 

Valerie Vaz:  Is my hon. Friend aware of any other legislation enacted before now that does what the Bill does? 

Jon Trickett:  From time to time, all Governments of whatever party have attempted to take what might be described as Henry VIII powers. Henry VIII himself certainly took those powers. Whether he used an Act of Parliament to do that, I am not sure. Perhaps he just took administrative measures. However, the truth is that all Ministers are tempted to do that. Generally, the two Houses will look with some dismay at such powers. Many Members on the other side of the Committee believe themselves to be, and no doubt are, libertarians and do not want to see an enhanced power for the centralised state. The Minister is a reasonable man. He would not wish to create an over-mighty Executive who were not properly accountable to Parliament. When we get to the relevant clauses, we will want to ask searching questions, as Members in the other place did—and the Bill is very different as a consequence. 

Hywel Williams:  Perhaps the hon. Gentleman will recall that in the previous Parliament, there was a great deal of controversy and some consternation among Conservative Members about the legislative competence order mechanism that was used to confer powers on the Welsh Assembly Government. Some very good points were made. I cannot at the moment spot any hon. Members who might have made those points, but that was a controversy then and the argument seemed to be going the other way at that time. 

Jon Trickett:  I thank the hon. Gentleman for his intervention. I will look with interest at Hansard and particularly at those comments made by members of the Committee who were here in the previous Parliament, although there are not many of them. Perhaps we can use some of those phrases to help our thinking—to clarify what is in our own minds. 

The point that I was attempting to reach relates to clause 1(3). To follow the thread of the argument that I was making, at the time when each of the bodies was created, Parliament had established to its own satisfaction that there was a social need or a public function that needed to be met or exercised. At that stage, it decided that that function should be exercised by an independent body albeit a state body. The Government propose that that power should either cease or—this is more likely—be exercised in another way, in another institutional form. 

What does clause 1(3)(a) to (e) do? In effect, it says, “We acknowledge that, when we abolish a particular body”—let us take safety at sports grounds as an example—“it may contain functions or residual functions that we would like to see continue, but we don’t want them to be exercised by a quango.” That is the core of the Bill. The Ministers and his advisers have clearly gone away and thought, “Hang on a minute, this is a great idea—let’s abolish quangos.” We all applaud that. We do not want to see more quangos than necessary. However, if we stop and think for a minute, what happens to the function or residual functions carried out by a quango? 

That leaves the Minister with a problem. His solution is to create some other bodies to carry out the functions with which the quangos are currently charged. They will not, however, be called quangos, but something different. They will be some other kind of institution. That is the problem that all Governments have faced. How do we deal with this? These are sometimes delicate

functions that, frankly, Ministers ought not to get involved in. On human embryology, for example, it is clear that the most difficult ethical, scientific and technical problems are connected with it. On S4C, politicians ought not to get involved in how a television station is organised. They definitely ought not to be engaged in the process of human embryology. We can provide guidance, but at the end of the day some of the questions are very difficult. Therefore, it will be necessary for those functions to continue to be exercised, but the Minister says that we will not exercise them via a quango. 

What does the Minister say he will do in clause 1(3)? He says that he will set up an “eligible person” who will be required to exercise the functions. That essentially explains what clause 1 does. Clauses 2, 3, 4 and 5 include references to eligible persons, because in some cases quangos will not be abolished but merged and their functions will be handed on to a successor body. That is the core of the whole Bill and it is the knotty problem with which the Minister must have wrestled with his advisers. 

I would suggest that the Minister has had problems. None of the solutions are totally satisfactory and our amendments are intended to help. I imagine that the problem has been difficult for the Minister. He suggests five eligible persons. I am not a lawyer, but “eligible person” is a legal expression. Clearly, a person can have a corporeal form, like most members of the Committee—as far as I know, we are all persons— 

Roberta Blackman-Woods (City of Durham) (Lab):  Highly debatable. 

Jon Trickett:  It is a debatable point. An institution can also be a legal person, as in law, non-human beings can also be persons. Therefore, the term “eligible person” refers not to you and me, Mr Amess, but to bodies corporate. The problem is that, if we look at clause 1(3)(e)—I will do this in more detail shortly—we will see that it contains an extraordinary two separate bodies corporate. One is “a body of trustees”—I will come to that in a moment—but what is alarming is the “unincorporated body of persons.” As I have said, I am not a lawyer, so I went to Google—perhaps even you do this, Mr Amess—and typed “unincorporated body of persons.” The first thing that appeared was that an unincorporated body of persons is a legal nonentity. So my mate Bill and his two friends who go down to the Brown Cow in our village could, if they had a committee meeting, be argued to be an unincorporated body of persons. They would have no legal reality— 

David Wright:  Brown Cow Incorporated. 

Jon Trickett:  Or the Brown Cow (Exercise of State Functions) Committee. That is quite a disturbing proposal. We will talk more about it in a moment, but that is not a legal entity. It is not an eligible person and frankly, it should not be in the Bill. It is extraordinary to think we could hand over a state function to an unincorporated body of persons. 

David Wright:  I am interested in the argument my hon. Friend is developing. One of the key challenges for the Government here is that a number of these bodies have fairly large consultative groups related to them.

Even though the powers of the body that are to be transferred may rest with an individual or a group of individuals, many of these organisations have large consultative structures that debate with the public about their strategic priorities. The case could be made that the consultative approach of such an organisation would be narrowed by its transfer to an individual or perhaps one or two individuals as he is outlining. 

Jon Trickett:  That is a very important point. That is why after much discussion we have tabled amendments that call on the Minister to produce regulations that we can then scrutinise. The regulations must indicate precisely how all those structures are going to be incorporated into the instrument that the Minister is creating. 

Let us take safety at sports grounds as an example. I referred to Hillsborough a few moments ago. There is clearly a problem from time to time with large crowds in sporting venues, who are sometimes difficult to control. We have seen that throughout the world. We saw the most devastating series of personal tragedies at Hillsborough, and elsewhere. I believe my hon. Friend the Member for Leicester South has two sports grounds in his constituency. He will be concerned that the quango that deals with this is to be abolished. He will want some assurance that that function will continue and that it will be handed over to a proper body. 

The proposal that it can be handed over to Charlie and his mates at the Brown Cow or a similar group in a pub in Leicester is extraordinary. The people of Leicester want to know that the lives of the people who go to matches at those rugby and football grounds are properly protected. Later we will want to know how the bodies that will be abolished were chosen, but for the moment we want to know which bodies will be handed over to which types or class of eligible person. After all, it is odd to imagine that a private company, even one that is not profit making and is limited by guarantee could manage the safety of the people of Leicester. That cannot be right. There is no indication in the Bill exactly which legal vehicle will be used for which body that will be abolished. Yet the power of abolition and the concept of eligible person are in the same clause. 

Valerie Vaz:  I am not sure whether my hon. Friend knows, but I was at a football match at the time of the Hillsborough disaster and then we had the Taylor report. Does my hon. Friend agree that the Taylor report made a number of recommendations, and that the purpose of the Football Licensing Authority is to implement those recommendations? 

9.45 am 

Jon Trickett:  I did not know that my hon. Friend had been there, but I thank her for her comment. The truth is that, following the disaster, everyone in the country was alarmed at what had happened. The Government at the time, with the support of every party, agreed a way forward: the standards that should be expected from grounds of a certain size and calibre, and a way in which they could be financed; and a way in which safety at football grounds could be secured and monitored. As part of that, as the Committee is aware, it was recommended that a separate authority should be established. 

We all have friends or relatives who go, or we ourselves go, to football matches, rugby matches, or whatever sport we follow. If the Minister decides to proceed with the abolition, how will he decide how the Football Licensing Authority will be administered and how will he decide the type of eligible person? None of the independent bodies listed in subsection (3)(c), (d) and (e) would work. They would not work very well for S4C, and for things such as embryology and safety at sports grounds they simply would not work. We will try to help by suggesting other bodies. 

That leaves the Minister with renationalising the function. Centralisation and enhancing the power of the state is at the core of the Bill. I will demonstrate that by addressing the proposal in detail and explaining our amendments. Subsection (3)(a) and (b)— 

Hywel Williams:  I am sorry to intervene on the hon. Gentleman while he is in mid-flow, but I refer him to amendment 35, which is in the names of the hon. Members for Dover and for Esher and Walton. That amendment proposes a system that works—co-ops—but it is not mentioned in subsection (3) and is obvious by its exclusion. 

Jon Trickett:  It is odd that a Government who aspire to create the big society seem to be narrowing it down. I do not claim that quangos are part of the big society—they are part of the bureaucratic state and ought to be accountable—and I am not convinced that the answer is simply to renationalise those functions. Yet subsection (3)(a) and (b) effectively states that the residual functions that we have just discussed should be repatriated into the state. The Government say that they are a libertarian operation and that they want to see the diminution of the state and the expansion of the civil society, the good society, or whatever expression we agree on. It is extraordinary that the Conservative party, supported perhaps—I do not know, we will see—by the Lib Dems, is saying, “We want to renationalise a whole series of functions.” The Labour party, in our modesty, as the true agency of the good society, wants to say, “Hang on a minute. Do you really want to renationalise things like embryology research, safety at sports grounds, S4C, or any of the other functions?” I do not think so. 

Roberta Blackman-Woods:  My hon. Friend is making an excellent speech. Does he agree that the powers the Government will enact for themselves are truly extraordinary? Does he agree with the Public Administration Committee’s report that states that the review represents a missed opportunity for the Government, because, instead of bringing all of those powers unto themselves, they could transfer them to charities and mutuals, which seem amazingly absent from the list? 

Jon Trickett:  My hon. Friend reinforces the point in a very succinct way. There may be some Divisions, but I hope that is not the case. The Minister is a reasonable person and we hope to convince him. The Government have already voted to exclude witnesses. Frankly, I would be amazed, looking at the manifestos and personal political credos of Government members of the Committee, if any one of them had ever said that they believed in the renationalisation of state functions. Clearly, that is what the clause will achieve. Clause 1(3)(a) clearly states

that the Minister regards—this is the core agenda—an “eligible person”, who will be the recipient of these residual functions, to be a Minister, a Scottish Minister or a Minister of one of the other devolved Administrations. There is no other way of putting it: there is a democratic deficit in how it works at the moment. Is it beyond the wit of Parliament to come up with other ways of increasing democratic accountability without repatriating functions back to the central state? 

Lisa Nandy (Wigan) (Lab):  This relates back to the points that were made by many of my hon. Friends earlier about the wide-ranging powers in the Bill and the failure of the Committee to take evidence. The problem is that the independence of many of these bodies is crucial. I notice that, after consultation, Ministers changed their minds about the original decision to include the Office of the Children’s Commissioner. Having worked very closely with the Children’s Commissioner over many years, I know that the independence of that body is essential. Because of the wide-ranging powers in the clause, we have no guarantee about where those bodies will be placed—not just those in the Bill, but for any body that the Minister chooses to pick on in the future. That is why, though it is very entertaining, my hon. Friend’s speech and the point that he is making is very important. 

Jon Trickett:  I am glad that my hon. Friend underlined the points that I am trying to make. It is important to communicate my concern about this issue properly. It is good to do so in a reasonably light-hearted way, but there are some serious problems in the way that this will operate. 

We have no idea whatever about which body, or class of bodies, will be used for each of the organisations that are in schedule 1. We have do not have a clue. Clause 1(3) indicates the only kind of eligible person that the Minister envisages to be fit to be a recipient of the residual functions. It may be that some residual functions could be appropriated back into the civil service. We are not opposed to that in principle, but we want assurance, either in this debate or in the debate on schedule 1, that none of the more sensitive functions—most of them are sensitive—will be exercised by politicians directly. For example, control of a TV station ought to be nowhere near a Minister. That is currently the case. 

There is a secondary problem with the eligible person issue. Once the Minister decides what class of eligible person is appropriate for which residual function, the next job is for the Minister to then decide, and no doubt submit it to the House in due course, which company or other vehicle within that class will be used to carry out that function. Let us take, for example, a company limited by guarantee. Let us say, for example, that the Minister thinks that S4C being administered by a company limited by guarantee is a good idea. First, he would have to explain why he wanted such a company. Secondly, there is a possibly more important question of which company should exercise that function. 

Susan Elan Jones:  My hon. Friend well makes the points about ministerial control over a television channel. Does he agree that it is extraordinary? I am reluctant to

put any more ideas into Ministers’ heads about future projects for the next five-year plan of what they want to repatriate, but is there is an inconsistency here? They want to have control over S4C, but not over Channel 4. I am not suggesting that they bring Channel 4 into the Bill, but what does the Minister have against S4C that he does not have against Channel 4? 

Jon Trickett:  Of course, we have no idea whether the Minister wants Ministers to be in charge of S4C. If they do, let us hope that they can speak Welsh, because that seems to be a primary consideration. He will not suggest that S4C should be nationalised, rather I think that he will look at options (c), (d) or (e) in clause 1. Once he has decided the class, the problem for the Minister is deciding which instrument will administer the television channel. That is a major problem, and I will explain why in a second. 

Mr Williams:  As a point of clarification, the Government sensibly saw the light during the House of Lords proceedings and actually did take Channel 4 out of the remit of the Bill, which is something that some of us aspire to in this Committee as well. 

Jon Trickett:  I thank the hon. Gentleman for bringing that to the Committee’s attention. It is an important point, which brings out an inconsistency between the way in which the Government want to administer the United Kingdom as a whole and the different rules that seem to apply to Wales. If that message is being given, it is unfortunate. I do not want to get too much into S4C, as I am using it to exemplify the argument, but the points are interesting. 

Let us imagine that we are further down the track, and we have an agency that will be abolished, but it has core functions that we want to continue. Let us imagine further that we have decided that it should not be repatriated into the state and that it should be part of wider society. Three options are available: 

“(c) a company limited by guarantee,

(d) a community interest company, or

(e) a body of trustees”.

I was wrong. There are actually four, because there is the daft “unincorporated body” option, which the Minister must withdraw. Let us say that he decides on (c), the problem is which company limited by guarantee—there are thousands in the country—will then be asked to administer that particular function. How will that be decided? 

Mr Hurd:  The hon. Gentleman described me as reasonable, which obviously alarmed me, but I will ask this question reasonably: is he missing or deliberately skirting round this absolutely fundamental point? Exactly the definition of certainty that he and other colleagues are seeking will be forthcoming at the appropriate point when Ministers, who are responsible for the reforms in their Departments, have concluded the consultation that is required by this enabling Bill. Draft statutory instruments will then be laid for consideration by Parliament at the secondary stage, at which point the full parliamentary scrutiny process drills down on that particular reform and that specific proposal of a transfer to a specific organisation. Not having the detail at this stage may be

frustrating for the Committee, but can he not see that further down the track—to use his words—exactly that clarity will be available? 

Jon Trickett:  That was a helpful intervention. The Minister is a reasonable man, but he is doing some unreasonable things. I want to help him with his own side a bit, so some things that he does can be unreasonable from time to time. Let us be clear that we disagree on some things. 

Jonathan Ashworth (Leicester South) (Lab):  I concur with my hon. Friend; the Minister is entirely reasonable. We had exchanges in the House yesterday and he gave me a reasonable response. He rightly talks about the consultation process, but, as someone who has worked in Government, I know that it is inconceivable that officials and Ministers are not having discussions about such bodies— 

The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath):  Everyone knows that they are. 

Jonathan Ashworth:  They are having discussions about these bodies, so we can have more detail about where they are going to end up. 

10 am 

Jon Trickett:  That is a very helpful point. My hon. Friend has a distinguished record of service in Government. He knows how Government work, and how sometimes Government do not work, but we will not discuss that because that has been the subject of various books to which we do not want to refer here. He is right that the Minister is clearly quite advanced in some of his considerations, but my point is a different one. If the Committee bears with me, I want to come on to the general principle behind the types of “eligible person” on which he has latched—none of which work for one reason or another. We have tabled amendments which, in the cases of (c) (d) and parts of (e), ask the Minister to bring forward regulations, because we want to know how this will work before we can agree on the kind of powers that he is arrogating to himself. If he cannot convince us how this will work, we have to question whether the Committee should give him the powers that he seeks. 

Once the Minister has decided on the class of vehicle to use, how will he choose the appropriate instrument to carry out those residual functions? There are thousands and thousands of bodies corporate that come under the title of “company limited by guarantee”. He has two ways in which to proceed. He can go out to tender, which is clean, but there may be no single body corporate within that class that is fit to tender. We need to know how he will decide into which class the particular residual function will go and how he will make such decisions, so I want a generic discussion rather than one that deals with each specific item. Secondly, once he has decided the class of instrument, how will he decide which corporate body will give that residual function? If we think about it, if we decide to go out to tender for S4C or for any of the other bodies, we invite all companies limited by guarantee in the country to make a submission. Think of the complexity of the tender document and the tender judgments that will then have to be made. 

David Wright:  Does my hon. Friend agree that, because of the cost and complexity of the tendering process, a Minister may be tempted to decide that it is best to keep the powers of that organisation themselves? We all accept, I think, that we would like to see some of these bodies and their functions transferred out to community-based organisations or co-operatives, but the cost of doing so may well drive a Minister to decide that it is far cheaper and easier to keep the power themselves. 

Jon Trickett:  That is precisely the point that I was coming to. It is difficult to imagine that the tendering process is the right way in which to do it. My hon. Friend is right; the temptation will be to go for what I will provocatively describe as nationalisation—to take the powers back in house—and we will want to resist that. 

The tendering process is complex and extremely expensive. We have asked the Minister to publish regulations, telling us how he intends to proceed. He does not necessarily have to do it now, but he can agree to our amendment and produce the regulations. Then we could debate how a tendering process would work. I think something other than tendering will be used: the Minister will set up made-for-purpose bodies. I think they will say, “It is too complicated, too expensive and too difficult to tender. How do we secure the right levels of technical expertise and independence from the existing sector?” Civil servants will say to the Minister, “We have had a good idea, Minister. Set up a company limited by guarantee.” I imagine that is what is currently being whispered in the Minister’s ear. 

The problem with that is cronyism. The Minister would never be tempted into cronyism, but there has been a debate in the press about the Secretary of State for Education, who has handed over large sums to the New Schools Network to deal with free schools. Whether or not we agree with free schools is a separate issue. They may be a new set of quangos, but we will leave that debate to another day. The point is that the New Schools Network is managed by a possibly very able young person who was known to the Secretary of State while he was an Opposition Member, and she is now the recipient of very large amounts of money. It may be that she is the only person in the country who is capable of carrying out the function. However, the Secretary of State left himself open to the charge of cronyism. 

The Chair:  Order. I have been listening carefully to how the debate is being pursued. I have been very lenient in not interrupting, as many of these issues are down to be debated later. I have already decided that there will not be a clause stand part debate on clause 1. I ask the hon. Gentleman to return to the specific amendments he is addressing. 

Jon Trickett:  Thank you for your guidance, Mr Amess. I said you would be firm but fair. I am surprised to find the firmness applied to me, but no doubt that is fair. 

I return to the amendment to clause 1(3)(c), which calls for regulations to be published by the Minister. I want regulations published because I want to know how the Minister will decide which company within that class is to be the one that administers the residual function. I will keep to that point, which is the one I

thought I was making, though perhaps I had strayed. The regulations should indicate how the Minister is to do that, and whether he will be minded to set up purpose-built bodies outside the public sector. Those regulations should indicate the considerations he will bear in mind at that point. Otherwise, if he sets up purpose-built companies to handle public functions using public money, he will leave himself open, if he is not careful, to the charge of cronyism. That was the point I was trying to make, and I hope I have made it more relevant to the amendment. We want to hear how he intends to do that. 

I want to deal in detail with the kind of instruments or eligible persons the Minister is proposing and explain, given the context I have just provided, why we have tabled the amendment. I have already asked him to indicate how he will decide, if the Committee and the House proceed with the idea that the five bodies should be the eligible persons. How will he decide which eligible person, or category of eligible person, is the most appropriate for each function? That is why we have tabled the amendment calling for regulations. Having done that, will he then indicate precisely how he intends to decide which instrument to use within that class? 

I also want the Minister to address the point exemplified in the amendments. Will he table regulations, as in my amendments, which indicate how ministerial or democratic control will be exercised over eligible persons (c), (d) and (e), if it has been decided that the residual function will reside with one of those three bodies? That is the reason why we tabled amendments asking for detail in regulations. We would like the regulations to address three issues in particular. I hope to convince you, Mr Amess, that the questions the regulations need to address indicate that the instruments the Minister proposes are not the appropriate eligible persons. With that in mind, I proceed to the main part of what I want to say. 

The regulations should address three issues, which we will seek absolute assurance on. I am particularly addressing paragraphs (c), (d) and (e), because it is clear that eligible persons covered by paragraphs (a) and (b) will be under direct ministerial and civil service control. Paragraphs (c), (d) and (e) cover independent bodies of one kind or another—we could say that they reinvent the quango in a different corporate form. First, how will we ensure that the assets transferred as part of the exercise of the residual function are retained for public use? We want to know how we will secure an asset lock, which should be part of the regulations. Secondly, we want certainty about how the budgets of the bodies will be managed. Again, that is to secure the public interest and should also be in the regulations. Finally, how will the personnel issues of eligible persons (c), (d) and (e) be dealt with in the regulations to ensure that the kinds of salaries paid to chief executives do not continue? If we read the newspapers, we will be well aware that some quango chief executives are being paid totally ridiculous sums. I accept that quite a bit of that happened on our watch. I am not making a partisan point. The regulations should indicate how we will control all three kinds of body. 

My general point about paragraphs (c), (d) and (e) goes to the heart of the argument. In any independent or private corporate body, there will normally be conflict

between the interests of its members and the wider community interest. It is most clear in a plc that the duty is to both the shareholders and the customers. There is always that conflict and I worry that unless the regulations are specific and precise, the budgets, assets or personnel functions of eligible persons (c), (d) and (e) might be used to benefit the members of the company rather than the wider community interest—the residual function I described earlier. 

There would be outrage with the Administration, and with us if we voted in favour, if, for example, administration of youth justice fell under a body under paragraph (c) —a company limited by guarantee—that used its obligations to its members to reimburse them with exorbitant amounts at public expense or by disposing of assets. The lack of an asset lock worries me. Regulations should indicate exactly how the Minister will deal with those problems. To be fair to him, he has totally excluded plcs from being eligible persons, and I congratulate him on that. It is the right decision and we support it, but vehicles (c), (d) and (e), which he wants to specify as eligible persons, raise problems for us. Without the regulations being published, it is difficult to see how he intends to deal with the problems. 

Our amendments would help the Minister by removing the legal nonentity of “unincorporated body of persons” under paragraph (e), by asking him to make regulations indicating how he intends to deal with the points that I have raised and by suggesting two other forms of corporate vehicle that would do both the things that I want, first by guaranteeing an asset lock, so that the assets are not used for the private interests of the members of the company and, secondly, by ensuring that the company works only in the interests of the community and not in the interests of its members. 

10.15 am 

I do not want to bore the Committee, because I found it incredibly tedious, but we can look in some detail at the kind of institutions that the Minister is recommending—I assume that they were recommended to him by his civil servants—and none of them quite works. The Government have produced an organogram that looks at all the various institutional forms that are not-for-profit companies and clearly illustrates my point: none of the three institutions that he is talking about, companies limited by guarantee, community interest companies or trusts, has an asset lock that prevents the assets from being used for the private interests of the company’s members. Nor is there a guarantee in any of those institutions that they will operate purely in the community interest. 

To some extent, that might be locked up with a contractual arrangement, but the truth is that it is difficult to imagine how a contractual arrangement can be so structured as to prevent the members of the company saying, “We will meet the community objectives, but in doing so, we are going to harness ourselves by using the profit motive and reimbursing ourselves.” Remember, we already have a quango with its chief executive on £700,000 a year. Some of these people might be tempted to give themselves pay rises if we put them into the private not-for profit sector. There is a distinction between paying dividends to shareholders and reimbursing executives. 

I want to see all those things addressed in the regulations or I shall remain totally unconvinced. I am prepared to produce the evidence, but I will not, because other people wish to speak, that paragraphs (c), (d) or (e) have neither an asset lock nor a singular commitment to the community interest. 

We tabled two further amendments. Those suggested other corporate vehicles that would achieve what the Minister wants, but which would have both an asset lock and a commitment to the community interest. I have had to table a third amendment on co-ops. I mention that because I know that the hon. Members for Dover and for Esher and Walton have tabled an amendment on co-ops. We are very much in favour of co-ops. It may be a late conversion, but the Government share that commitment nowadays. That is good and welcome. 

Generally speaking, co-ops have to operate in the interest of their members, whether it is the workers or those who own the shares. That is a duty on most co-ops. We want institutions that serve the public. The hon. Member for Dover has to convince the Committee that a co-op can work in the interests of the community, and not in the interests of its members. Otherwise, the public will say, “What has happened? They’ve abolished a quango and replaced it with a co-op, and the co-op is operating on behalf of its members and not on behalf of the residual function that was left behind after the quango was abolished.” 

Charlie Elphicke (Dover) (Con):  Does that mean that the hon. Gentleman therefore has a problem with foundation trusts in hospitals? 

Jon Trickett:  It depends on how the institution is structured. That is why we are asking for regulations to be published so we can see how this will work. We are not opposed to this. We will not vote against it. If we are expected to vote for something, it is not unreasonable for us know what it implies. We do not want to be trapped into a situation a year down the line where we have agreed, without having seen the regulations as we want to, to something that in effect creates a private institution that begins to reimburse itself. That is the problem with co-ops sui generis. I also tabled an amendment about co-ops, although I have withdrawn it, because they present a knotty problem. How will a co-op, which is obliged to operate in the interests of its members, at the same time operate in the wider community interest? 

To go back to sports grounds, for example, the community interest is that the sports ground is properly constructed and managed. If the sports ground’s residual body becomes a co-op, if we are not careful the primary duty of the co-op will be to its members rather than to ensuring the safety of the sports ground. The objective of the co-op is to protect the sports grounds, but its primary duty in law is to its members. That is the problem with all the proposed instruments, and the way

around it is for the Minister to make regulations, as our amendments would require him to do, that clearly indicate how he intends to deal with this problem of dual accountability. The central problem in clause 1 is that a private institution, whether a co-op or a company limited by guarantee, is obliged to look after its members, but the rest of society expects it to carry out its objectives with no reference to the private interests of its members. 

Roberta Blackman-Woods:  Is not the point about regulations that they will set out some of the detail about the selection processes and the safeguards that could be put in place? It is the lack of detail about how the new powers in the Bill will be exercised that is giving the Opposition such a problem with clause 1. 

Jon Trickett:  My hon. Friend has given me a lesson in brevity. Perhaps I could have said all that I have said over the past hour in three minutes. You have got the wrong guy, I am afraid, Mr Amess. 

Let me come to the point. We spoke to the Library and got a Library note, and we spoke to various lawyers who specialise in this area. Of course, in opposition we have no support from the civil service. We believe that including a registered charity and a community interest society as eligible persons in clause 1 would achieve what the Minister wants and provide the reassurances that we and the wider public need. Neither of those bodies can operate purely in the interests of its members, and a registered charity has to operate according to charitable objectives. It is extraordinary that a Government committed to the big society have not included registered charities. Why have they not done so? We included registered charities in our amendments as a solution to the problem. 

Community interest societies are similar. They have an asset lock and they are obliged to work in the interests of the wider community rather than in the interests of their members. Even charities do not have an asset lock, so if the Minister agrees that they might be a useful instrument, we would require him to explain, either in regulations or in his response, how he intends to secure that. After all, part of the Bill concerns the transfer of assets, and we may hand over buildings or large amounts of land. What if a company decides to flog them off and use part of the assets to reimburse itself? We need an asset lock. That is established in charity law; almost all big society organisations and literature describe the need for an asset lock. I make these points not to delay the Committee—I promised speed and expedition—but because they are serious matters that we want the Minister to address before we decide whether to press the amendment to a vote. 

10.25 am 

The Chair adjourned the Committee without Question put (Standing Order No. 88).  

Adjourned till this day at One o’clock.