Public Services (Social Enterprise and Social Value) Bill
Debate between Christopher Chope and Ben Gummer(14 years ago)
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Mr Chope
I do. One of the amendments to clause 2 that I would have suggested is that social enterprises should be defined as small businesses with those objectives, because of the danger of ending up with some very large social enterprises that are, in many respects, not dissimilar from large public limited companies.
Ben Gummer
Often, the problem for procurement officials is that the lowest-risk option for them is to choose a large, established organisation, because that protects their position. One can understand why they would do that. The Bill would empower procurement officials to consider the whole range of possibilities and to take a slightly more risky approach sometimes, which would be to the benefit of local communities.
Mr Chope
My hon. Friend makes a good point. He is right to emphasise the riskier approach, because sometimes there is a risk. For example, in my constituency, the local council decided to let the contract for the running of the local leisure centre to a charitable trust based in Poole. It became apparent that the trust was not delivering on what was set out in the contract, and after several years the contract had to be taken back in-house. Subsequently, a couple of other projects that the trust was running were found to be financially unsustainable, and that was the end of that, I think. We must not get into a frame of mind in which we think that anything that calls itself a social enterprise is, by definition, a good thing. Such bodies have to be run along business lines.
To take another example, people in Verwood—a town that is no longer in my constituency, sadly, but was until the time of the last general election—have set up a community enterprise called the Verwood Hub, which is a community centre. Unfortunately, it is becoming clear that they have not been applying business principles to the running of that centre, so they are having to go back to the local authority and say, “Please give us some more money.” The local authority is making it clear that it can go only so far in doing that, because there is a limit to how much it can be expected to use local taxpayers’ money to make up for the deficiencies in the business plan of what might otherwise be described as a laudable community enterprise.
Mr Chope
My hon. Friend is absolutely right, and we all have examples from our constituencies of businesses that started very small and have become quite large. One such business in my constituency makes organic baby food, and now supplies it to major national retailers. It was based on the idea of an entrepreneur who asked, “Why are we not ensuring that people can guarantee that their children are being fed wholesome baby food at the most nutritionally important time of their life?” That enterprise struck a chord with the consumer, hence its great success. There are a lot of other examples that I will not trouble the House with at the moment.
Mr Chope
My hon. Friend is encouraging me to trouble the House with more examples. In that case, I will choose an example on the other side of the argument. There are publicly funded organisations that, over a period of time, have shown themselves to be hostile in the extreme to small and local businesses. I say quite openly that I believe that Eaga is one such organisation.
Eaga receives a large amount of money from the taxpayer to help provide insulation and subsidies so that people can increase the energy efficiency of their homes and the appliances within them. A lot of work has been done showing that its contractors—often firms that are subsidiaries of Eaga itself—provide services at a much higher cost than local contractors would, and less efficiently. I have had public arguments with Eaga about that and been told, “Well, none of these small companies will be able to give us long-term guarantees that if anything goes wrong with their work, they will be able to put it right.”
Mr Chope
As my hon. Friend says, that is ridiculous. The previous Government were too obsessed with the fact that this organisation was based in the north-east of England and had grown significantly as a result of all the money that it had received from the public purse. I hope that the new coalition Government will introduce a bit more sanity and proportion into the way in which that money is spent so that we can ensure that relatively small local contractors can participate.
Mr Chope
I am sorry, Madam Deputy Speaker. As a result of where some hon. Members are sitting, it may sometimes seem as though we are a cosy cabal, but we are not. We are trying to address our remarks to the wider world, and my hon. Friend the Member for East Surrey (Mr Gyimah) made an excellent point, which he also raised in his speech.
Under clause 3,
“The authority must consider how it might promote or improve the economic, social or environmental well-being of the relevant area”.
I am glad that that will not be defined because it should be left to the individual procurers. I am not so sure about the requirement in subsection (4):
“The authority must consider whether to consult the persons (if any) for whom the authority is making provision in the exercise of that function.”
Again, there is no requirement that authorities should consult—they only have to consider whether to do that. However, that could be important.
Ben Gummer
One matter that has not been drawn out in this debate—my hon. Friend is an expert on this and may wish to comment—is the interaction between the Bill and European tendering legislation. Such legislation is often thrown up like chaff by procurement officials, especially when they have got something wrong. They say, “Oh, it’s all because of European rules,” when most of the time it is nothing of the sort. Officials must consider a range of variables when making buying decisions, but that is completely in accordance with current European tendering legislation.
Mr Chope
My hon. Friend makes a good point. Anyone who mentions the European Union in the House immediately assures that more attention will be paid to what they have said.
I hesitate to give credit to the previous Government, who left our national finances in such a dire mess, but they were quite helpful in setting out clear advice to local authorities on what they could do under the public procurement requirements laid down in EU legislation. Contrary to what some suppose, that legislation allowed local authorities and other public procurement bodies to take into account social considerations—both in pre-procurement, to which my hon. Friend the Member for East Surrey referred, and in the specification, selection and award stages—provided that the economic advantages for the contracting authority were linked to the product or service that was the subject of the contract.
That was quite helpfully set out in detailed advice by the previous Government, and it will be replicated and slightly amended in the forthcoming White Paper that the Minister has promised. I was involved in procurement as a local councillor. One of the most frustrating things is to be told by the solicitor or officer responsible, “You can’t do this because it’s not allowed.” Councillors, who often have a strong feeling for common sense, reply by asking, “Why can’t we do it?” As my hon. Friend the Member for Ipswich (Ben Gummer) said, when we look at the small print, we find that applying wider common-sense considerations to procurement is not prohibited by EU directives.
The hon. Member for Hemsworth (Jon Trickett), who spoke for the Opposition, criticised Government Members on the basis that a large number of their speeches and interventions were slightly at odds with each other, but we should be congratulated on that, because it shows that we are engaged in a healthy political debate. In a brilliant intervention, my hon. Friend the Member for Wycombe (Steve Baker) undermined the case for the Bill very effectively, and underlined the importance of keeping the state out of social enterprise as much as possible and trusting people to come up with the right results.
I hesitated to say anything at that time, but I know of a good example of the state getting it all wrong. We were assured by the previous Government that, as a result of changes in European law, only 16,000 new migrants from the newly admitted eastern European countries would come to participate in our buoyant UK economy. I forget whether that estimate was out by 100% or 1,000%, but why was it so significantly wrong? It was wrong because no Government can second-guess what ordinary individuals will do in a given set of circumstances. My hon. Friend therefore told the House an important cautionary tale.
When my hon. Friend the Member for Warwick and Leamington makes his winding-up speech, which I hope will be shortly, he can rest on his laurels having brought to the House an important topic for discussion. Indeed, he put so much work into the drafting of his Bill that it could only be provided three days ago. For historians, it will be interesting to look back and compare the final version of his Bill—if it gets to Third Reading—with what was set out in the helpful research paper from the Library. It set out in 11 pages what it was thought the Bill would contain. Although it is now a much shorter and more focused Bill—and there is a case for saying that the title of the Bill should now be changed—it will be an important first for my hon. Friend if he gets it on to the statute book. Some of us have been in the House for more than 20 years and have never been successful in the private Members’ ballot. Even if I had been successful, I am not sure that I would ever have been able to emulate the success that my hon. Friend will soon enjoy of steering a Bill through to a successful Second Reading.
Canterbury City Council Bill
Debate between Christopher Chope and Ben Gummer
Ben Gummer (Ipswich) (Con)
My hon. Friend the Member for Wellingborough (Mr Bone) was entirely right to point out that many people now in this place were not cognisant of the previous debates. Without wanting my hon. Friend the Member for Christchurch (Mr Chope) to reprise the content of the debates in the previous Parliament, I would be interested to know whether there had been any discussion of the competition and free market issues that arise. If we control pedlary in one town, what happens in another? My town, Ipswich, might be concerned if pedlary were controlled in one place as that might have an impact on market traders in another place where there was no such control. Will my hon. Friend elaborate on whether that was discussed in the previous Parliament and whether he thinks it should be discussed now?
Mr Chope
My hon. Friend makes an important point, which was discussed in the last Parliament in the context of some Bills. For example, in the context of the Bournemouth Borough Council Bill, I raised it as an issue because I represent the adjoining borough and I was concerned about the knock-on effect of banning pedlars in one town and what would happen in an adjoining town. It has been discussed, but I am bound to say that the promoters of the Bills denied that there was ever going to be a problem. In that respect, there was general denial.
On the point about entrepreneurial spirit, I can remember—with a bit of help from the Official Report for 14 January, when we last discussed the Canterbury City Council Bill—drawing the attention of my hon. Friend who was then on the Front Bench to the paper produced by Paul Braidford of St Chad’s college at Durham university, which was all about selling in the street and pedlary as a entry route to entrepreneurship. That was an important paper and my hon. Friend the Member for Weston-super-Mare (John Penrose), who was then dealing with such matters from the Front Bench, said that he had seen the paper—because I had only just given it to him—and that he was going through it.
I hope that the Minister has looked at that paper, too. He has obviously mastered it, because he seems to have got the message that although pedlary might be based on ancient statute, it is still a unique activity in our country. It is a national means by which people who want to get out and try their hand at enterprise can do so.
Mr Chope
That is another good question. I am put on the spot by my hon. Friend. I am not sure whether the Bournemouth Borough Council Bill, which got through in the end, has made any difference at all on the ground in Bournemouth. During the general election I met pedlars from my constituency and from Bournemouth who were having a go at Bournemouth borough council for having wasted so much money on trying to prevent them from carrying on their activities in Bournemouth. If Bournemouth borough council succeeds in stopping lawful pedlars trading in the town, the council and the people of Bournemouth will be the losers, because pedlars bring colour and entrepreneurial activity to the area. Now that we do not have the Member for Bournemouth West from the previous Parliament, and as his successor is not in the Chamber this evening, I can say that the problems in Bournemouth were wholly exaggerated, and it is for the people of Bournemouth to assess whether the amount of money spent on the process was proportionate. I do not know the impact on the city of Manchester and have not done any research into it, but my hon. Friend the Member for Bury North (Mr Nuttall) might wish to initiate some. Indeed, a Select Committee visit to a major city might be helpful.
There are some important issues, and I hope that he will have the chance to hear from the Minister.
Ben Gummer
I am sorry to ask a question that might have been dealt with in detail in the previous Parliament, but for my benefit will my hon. Friend explain whether the Bills offend against any ancient charters of the towns and cities that we are discussing? In Nottingham, there are freedoms given to citizens of the city, on which the hon. Member for Nottingham East (Chris Leslie) will no doubt be able to enlighten us, and in Canterbury there are freedoms under the original monastic charter, which no doubt my hon. Friend the Member for Canterbury (Mr Brazier) will tell us about. I wonder whether the Bills might offend and go against those ancient liberties, which have been granted for so many hundreds of years, and whether the issue has been discussed.
Mr Chope
My hon. Friend has a charming way of making me feel totally inadequate, because, despite detailed scrutiny of the Bills over many hours during the previous Parliament, we never got around to discussing the points that he has raised. Perhaps that was because of a lack of time, or because we did not have the presence of mind to discuss them. However, I look forward to my hon. Friend’s contribution to these ongoing debates, because prima facie his points are important and pertinent.
The jury is out on whether we should allow the Bills to be revived, and I look forward to hearing other contributors to the debate.