Public Services: Private Sector Companies

Lord Haskel Excerpts

Monday 28th October 2013 Lords Chamber

Asked by

[Lord Haskel]

To ask Her Majesty’s Government what assessment they have made of the reliability and value for money of public services provided by private companies.

[Lord Wallace of Saltaire (LD)]

My Lords, the Government’s overarching principle in procuring public services in the private sector is to secure the best quality and value for money for the taxpayer over the life of the contract. On coming to power in 2010, the Government found that public sector procurement was fragmented, bureaucratic, protracted and expensive, both for bidders and for procurers. The procurement reforms we have introduced since 2010 have made the way we do business more competitive, more transparent, better value and far simpler than before.

[Lord Haskel (Lab)]

Does the Minister agree with me that blaming the past for our problems in the present does not actually get us very far? Does he also agree with virtually everybody else that we are being ripped off by these companies, not only on energy prices but also in the Work Programme and in health assessments and rail fares? We learnt from the Financial Times only this morning that the Government are concerned that we are being ripped off by the water companies. What steps are the Government taking to rebuild public trust, and hold down the cost of living, by giving social obligations a higher priority and encouraging an attitude of public service?

Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill

Lord Haskel Excerpts

Tuesday 22nd October 2013 Lords Chamber

[Lord Haskel (Lab)]

My Lords, as the Minister has said, we would all like to know who is buying power and influence and, yes, we would all like to see the light of transparency shining into this murky world. The trouble is that this Bill does not do this, as many noble Lords have demonstrated. Let me briefly say why.

Part 1 calls for a register of lobbyists. In order to deliver transparency, surely a register must include all those who are lobbying and who is employing them. At present, there is a voluntary register that tells you this about some organisations—those that register. The register in the Bill, however, is so narrow and so full of loopholes that it frustrates responsible firms while encouraging irresponsible firms to profit from the loopholes. It muddies the voluntary code. The acting chair of the UK Public Affairs Council, speaking about the register, said:

“People will be able to construct their business never to be on it”—

so much for those who say that a full register is unnecessary.

What are these loopholes? As my noble friend Lady Hayter, the noble Lord, Lord Norton, and many noble Lords have pointed out, only political consultants are required to register, but we are told that 99% of the contact between Ministers and Permanent Secretaries is not by political consultants but by representatives of corporations or special interest groups, and they are not on the register; nor are those who advise on how to lobby, a major activity of modern lobbying. This can be an individual or a small organisation, but small organisations are to be excluded. “Small organisations” means those not registered for VAT. The Minister does not need me to spell out the loopholes in that.

The Bill requires transparency only when you lobby a Minister, a Permanent Secretary or other senior staff. But, like all of us who have worked in government, the Minister knows that most briefing comes from lower down, usually from experts in a particular field. Moreover, this is not the level where most public concerns lie and where much public money is spent. The NHS, local enterprise partnerships and public services provided by the private sector inevitably involve more junior public servants—again, often experts in their fields—but it is here that many members of the public would like to see the shining light of transparency. Also, what about special advisers? As we have heard, their influence has even brought down a Minister.

Part 1 of the Bill does little to support the public interest. Property developers and planning, banks and regulation, education and free schools are all areas where lobbying affects the public interest, yet most will fall outside the scope of the Bill. Instead of giving people confidence in our political system, Part 1 just provides loopholes. We all know that loopholes attract the irresponsible; they lower standards and the public interest suffers. Talking about standards, are the Government satisfied that Part 1 of the Bill will deal with unethical behaviour by lobbyists? The voluntary register has a code of conduct. Surely the Government’s register should also have a code of conduct; otherwise, there will be little pressure to raise standards.

Part 1 of the Bill is not only poor legislation, it is unfair. If a small organisation wishes to campaign against tobacco packaging or alcohol pricing, its consultant lobbyist would be far more tightly regulated than the in-house lobbyists of the drinks or tobacco companies. This applies in many spheres—for example, in health, as the noble Baroness, Lady Hollins, has just told us. All this does is protect vested interests and make it more difficult for the weak to stand up to the strong.

How can we put this right? First, by defining lobbying properly. We should respect the existing lobbying registers and give them more force. If there is to be a Bill, everybody involved in lobbying will have to be drawn into the net. Figures given in another place estimate that some 350 companies will be caught by the Bill. The UK Public Affairs Council estimates that 100 would be caught—from about 15,000 people and firms that operate as lobbyists. That is why Part 1 of the Bill is pointless.

As many noble Lords have pointed out, this is a difficult area for lawmaking, partly because lobbying is difficult to define, as the noble Lord, Lord Lang, explained. I will give your Lordships one more example. It has been known for lobbyists to work as researchers for noble Lords and to provide a secretarial service to all-party groups. Some firms second staff for particular projects to Ministers and government departments, and to the Opposition. Are they lobbyists?

It is hard to separate lobbying from campaigning. However, I agree with the Minister and most noble Lords that lobbying is valuable. The noble Lord, Lord Wigley, explained how it informs debate because we are all influenced by logical argument and genuine knowledge. Getting this into the Bill is difficult. Yet, as your Lordships’ Constitution Committee tells us, the Bill is being rushed through without pre-legislative scrutiny and with little debate in another place. The Political and Constitutional Reform Select Committee in another place unanimously described it as skimpily scrutinised and deeply flawed—so much for the Minister’s assurances in his opening remarks. That is why it is bad legislation.

Our duty is either to improve the Bill by amendment or to reject it. We will try to amend it to more closely define lobbying. We will try to draw the net much more widely. We will try to remove the loopholes. We will try to respect the standards of the industry set by the voluntary code. Otherwise, it is our duty to reject the Bill and ask the Government to think again.

Local Audit and Accountability Bill [HL]

Lord Haskel Excerpts

Wednesday 19th June 2013 Grand Committee

[The Deputy Chairman of Committees (Lord Haskel)]

I have to inform your Lordships that if Amendment 14BB is agreed I cannot call Amendment 14BBA on the supplementary list because of pre-emption.

[Lord Wallace of Saltaire]

My Lords, we are, in a sense, continuing the previous debate. Before I directly address the amendment in terms of defining “independent”, I shall speak with another hat on. As noble Lords will know, I speak for the Cabinet Office on issues of civil society and I am struck by the fact that the largest single part of the population that is becoming more active in all civil society activities is the fit retired. There is a very large and growing element there and it is precisely the area from which local bodies are likely to find the independent members that they are looking for. Looking around this room, I note that many of us would fit into that category but, unfortunately, we are not retired. Therefore we have less time than we would otherwise like to have. The noble Lord, Lord Tope, is particularly fit, although I like to think that I am fitter than he is.

We are happy to look into the question of how one defines “close friend” and of course we will have discussions on a range of these issues between Committee and Report. However, I reiterate that a third of audit committees already have independent members and 15% have two independent members. We see the independent panels which will appoint external auditors as not having the heavy weight of work that audit committees have but as fulfilling a rather more distinctive function.

The proposal in the amendment for mandatory audit committees is addressed more directly in other amendments but, as I understand it, this specific amendment is intended to ensure that, as well as being independent of the authority, members of an auditor panel or audit committee do not have wider conflicts of interest that might compromise their independence. I agree that potential conflicts of interest should of course be taken into account in appointing members of auditor panels. However, the Bill already includes a duty for relevant authorities to have regard to guidance issued by the Secretary of State in relation to their independent auditor panels.

We intend that such guidance will cover exactly these sorts of issues, such as how auditor panels will operate and who should sit on them. We intend to work closely with the sector and interested parties on developing such guidance and identifying what wider interests should be considered in appointing members of a panel. I hope these reassurances are sufficient for the noble Lord to withdraw his amendment, or perhaps to ask for further discussion between the Committee and Report stages.

--- Later in debate ---

Clause 16 agreed.

[The Deputy Chairman of Committees]

The question is that Clause 17 stand part of the Bill.

[Lord McKenzie of Luton]

My Lords, I think that we agreed to draw stumps at the end of Clause 16. We will get on to Clause 17 next week.

Strengthened Statutory Procedures for the Scrutiny of Delegated Legislation: DPRRC Report

Lord Haskel Excerpts

Tuesday 5th March 2013 Lords Chamber

[Lord Haskel]

My Lords, to most people outside Parliament, and to many inside Parliament, “delegated powers” is an arcane topic best left to specialists— something rather technical and dull. They are wrong. They are wrong because, as the noble Baroness, Lady O’Loan, reminded us just now, delegated powers are central to our democracy. I am grateful to the noble Baroness, Lady Thomas, for leading this debate, and for the skill with which she has led our committee.

The noble and learned Lord, Lord Mayhew, reminded us that Ministers cannot do everything, so they delegate some of their powers. In a democracy it is essential to see whether legislative power is delegated inappropriately, and to ensure that this scrutiny is carried out to an appropriate degree. The noble Baroness, Lady Thomas, reminded us that because of this the House became concerned about the unlimited discretion which some legislation gave Ministers in delegating powers by order or by secondary legislation, and so it formed a committee to scrutinise this aspect—and quite right too. That is entirely in keeping with the revising function of this House.

When legislation is proposed, the method of scrutinising delegated powers should be contained in that legislation. Some legislation makes no reference at all to scrutiny by Parliament. Some can be laid before Parliament and will be subject to no further debate but generally there is an affirmative or negative procedure, or a super-affirmative procedure, for scrutiny. However, in recent years many variations have been introduced; many Bills introduce their own form of scrutiny, which are listed by our report. As the noble Baroness, Lady Thomas, explained, the real purpose of the special report is to draw the attention of your Lordships to these variations of procedure and to make the point that they are helpful neither to Parliament nor to the public’s understanding of our work. I join the noble Lord, Lord Marks, in hoping that the outcome of this debate will be to arrive at some form of consistency and to rationalise the range of variations.

Not only your Lordships’ committee is concerned about this. When he was Lord Chief Justice, the appropriately named Lord Justice Judge said that his deepest concern related to the proliferation of so-called Henry VIII clauses that gave Ministers power to amend or repeal legislation by means of secondary legislation. He said that this would have the consequence of,

“increasing yet further the authority of the executive over the legislature”.

This is a warning of which your Lordships must take note.

It is, therefore, part of our duty to hold the Executive to account, and relative to this is the huge number of orders and regulations that come before your Lordships. All have to be scrutinised for delegated powers, and I cannot let this moment pass without thanking and congratulating the clerks and staff who run the Committee Office. They work under a lot of pressure so that the committee’s report on each item is published in time for your Lordships’ consideration. There are many tricky legal points, which our legal advisers, Peter Milledge and Allan Roberts, have to take into account. Their memory of precedent is quite phenomenal, and so are their tact and patience—all of which enable us to be consistent. I put my thanks on record together with the thanks of other noble Lords. Peter has been promoted, and so I welcome Nick Beach, who has moved up to Peter’s old place.

As I said, the proposals in this report are designed to improve the effectiveness of scrutiny in your Lordships’ House. One proposal regarding legislation is to standardise the procedures. We must also get an explanation of why the normal procedure will not work. However, what about orders and regulations? Most require Ministers to undertake consultation or lay supporting documents so that scrutiny can be thorough. Again, there has been a variation in the timing and requirements, and this, too, requires rationalisation. Some of the variations are contained in the original Bill.

Different Bills and Acts require orders to be scrutinised by different committees. However, as our report points out in paragraph 28, for six of the procedures the House has been unable to nominate a committee to undertake scrutiny of draft orders when they come along. It became urgent for the Leader of the House and the Procedure Committee to decide how the House would scrutinise draft orders under these Bills. The Bills are listed in our report. I am pleased to say that the Government have now indicated a response to this. I hope that your Lordships will accept these recommendations in the report as they will facilitate scrutiny.

When preparing for this debate, I learnt that at the height of the banking crisis, the Banking (Special Provisions) Act 2008 gave the Treasury the power to repeal any relevant statute bearing on the Act or any rule of law. Of course, this went through at a time of crisis. None the less, it is alarming because this is exactly what Henry VIII had in mind when he introduced his Statute of Proclamations in 1539. The recommendations in the report will help to ensure that this does not happen again in any future crisis.

European Union Committee Report

Lord Haskel Excerpts

Monday 26th November 2012 Grand Committee

[Lord Haskel]

My Lords, I add my congratulations and thanks to the committee and its staff for the report.

I agree that the EU Committee is one of the jewels in our crown. It does an enormous amount of work and, indeed, is one of our core activities, but the point I wish to make is that this is a jewel that could perhaps shine brighter. Indeed, the noble Lord, Lord Boswell, hinted at this in his review of working practices and in his words today. He spoke of involving the broadest range of people in our work—I agree. The reason we do not do that is because our work is directed towards the House, the Government and EU institutions. But what about the British public? Surely we have a duty towards them, as the noble Baroness, Lady Parminter, suggested just now.

Now that we are likely to remain an appointed House for the foreseeable future, surely more than ever it is incumbent on us to explain to the public who we are, what we do and why we do it. Members of this committee are in a unique position to do this. The work we do scrutinising Commission documents, studying Explanatory Memorandums and holding the Government to account draws information to our attention which puts us in a position to help the British public and British organisations participate more fully in Europe and, indeed, explain the benefits that my noble friend Lady Crawley spoke about so powerfully. May I give an example? I no longer work in business but I work with several business organisations. I am the honorary president of the Materials Knowledge Transfer Network, which is perhaps the largest network set up by the Technology Strategy Board to speed up the flow of knowledge between science, industry and the consumer. In my capacity as a co-opted member of sub-committee B, almost weekly there is an item on the agenda of interest to this network and I become aware of it because I am on Sub-Committee B. Otherwise, these matters are often very difficult to find and rarely apparent, even though they are publicly available. So, without breaching confidentiality, I raise these matters with the network. Frequently, this leads to a discussion about the role and duties of the House of Lords as well as the benefits of EU membership. In effect, it is a kind of outreach. This is why I would like to see outreach added to the duties of this committee.

My noble friend Lord Foulkes was disappointed at the media coverage that we get. Our press people do an excellent job, but should we not be reaching out ourselves? Could this not be part of the strategy that my noble friend Lord Giddens seeks? Other parts of your Lordships’ House do this. Is the Grand Committee aware that recently we had the 1,000th visit to a school by the Lord Speaker’s school outreach scheme? Last week was Parliament Week, and 42 noble Lords participated in visits and other events to tell the public about the House of Lords.

The noble Lord, Lord Jay, asked how we could stimulate and play a part in a debate on our future in Europe. I suggest that we could start with our own outreach. We could make our website a bit more friendly and responsive. It certainly explains what we do, and perhaps why we do it, but the only way to respond is through the social websites that figure at the bottom of the home page. For instance, as other noble Lords said, at the moment we are discussing EU enlargement. Could we not somehow invite views from the public on our website, and offer to discuss our report with those who are interested in it? In this way we could share our useful information to everybody’s benefit, and at the same time stimulate debate.

I will give another example. The European Investment Bank has many millions of euros available to match loans to SMEs. Among the larger member states, the lowest take-up is here in Britain. Because of our work we are aware of the scheme. Surely it would be helpful if we made others more aware by outreach or by public lecture, as suggested by the noble Lord, Lord Roper. We could also work more closely with other parts of your Lordships’ House. The Peers in Schools programme and the information department have far more requests for speakers and visits than they can find Peers willing to go. Could we not go and speak about the work of our committee, as well as about the work of the House as a whole? In my experience, sixth-formers are very quick to raise European matters with us. We could work with the Parliamentary Office of Science and Technology, which has post-docs beavering away on matters of science and technology that are of interest and concern to parliamentarians. Frequently, their work has a bearing on matters being considered by our committees. Surely we could benefit by having their expert views, and by them having our views. So my response to the report on the 2010-12 work of the committee is: fine, but could we not do better by being a bit more outward-looking?

Government Procurement Policy

Lord Haskel Excerpts

Thursday 24th November 2011 Lords Chamber

[Lord Haskel]

My Lords, in his characteristically robust speech, my noble friend Lord Sugar told us that the Government spend about £238 billion a year on procuring goods and services. In doing so, he and other noble Lords say that the Government should be active, supporting and helping our economy and helping to shape markets. I agree.

As the noble Lord, Lord Sutherland, said, an active Government must be a skilled purchaser as well as supporting innovation and good design, not a Government who look for the cheapest, most readily available, most risk-averse purchases—a very attractive option at this time of cuts. Being a purchaser that supports innovation and new design is right because in the long run that is better and cheaper, and we are in it for the long run.

The noble Lord, Lord St John of Bletso, reminded us that this week the Government announced that they wanted to speed up the procurement process. If the Minister wants a quick fix, he should speak to his noble friend, the noble Lord, Lord Feldman. Many years ago the noble Lord started the Better Made in Britain exhibitions, where large retailers and others exhibited imported goods and invited UK suppliers to come along and bid. He organised 25 of them and, yes, I went along and won some business. Government procurement always featured because it was one way that the Government had of showing British industry whose side they were on—basic, perhaps, but certainly quick, and they probably helped cut prices.

As other noble Lords have said, though, life is more complicated than that. The right way for the Government to get good value and create jobs and for the nation to benefit is to behave as an intelligent lead customer. My noble friends Lord Kestenbaum and Lord Davies explained how in business you should always look for a good lead customer—a firm that works with you and understands the market so that it can guide the specification and design, support the development and eventually test and validate the product. This is particularly important for early-stage companies that may have a good idea and something new, but lack a route to market.

That applies not only to innovation in technology; it applies equally to innovation in design. They must go hand in hand. Earlier this month, your Lordships debated the creative industries, speaking of their excellence and how they defined the UK in the eyes of the world. So why do they not play a much larger role in the procurement process? Presumably, imaginative, sensible and continual innovation in design is equally important to the public sector as to the private sector. Design is much more than an expensive additional process for making something look good; it drives fitness for purpose and raises the quality of use. Good design is not expensive. Raising design standards improves our quality of life, and who would say no to that?

What is required is a procurement process that not only acts as an intelligent lead customer but encourages the search for innovative design, all within European Union and World Trade Organisation rules. That can be done. My noble friends Lord Bhattacharyya and Lord Kestenbaum spoke of the Small Business Research Initiative Scheme, operated by the Technology Strategy Board. My noble friend Lord Bhattacharyya told us that the scheme was unashamedly copied from the hugely successful US scheme. SBRI was relaunched in April 2009. It operates under pre-commercial procurement rules. It does not involve state aid but delivers funded research and development contracts in the form of a challenge to find an answer to a need or issue in the public sector where the solution is either unknown or not good enough. The challenges can be for the product, for the knowledge gleaned from research or simply for a better or more economical design—procuring for the outcome, as the noble Lord, Lord St John, called it.

Since April 2009 there have been 78 competitions, generating some 640 contracts to a value of more than £43 million. Many of these contracts have gone to small or even micro companies. Some noble Lords have dismissed this as being tiny. It is not so tiny when you compare it with the recent government scheme to bolster exports by small and medium-sized enterprises, which had four takers, or the Business Growth Fund, which had one project.

Often the key to these new developments are new or improved materials. I declare an interest as honorary president of the Materials Knowledge Transfer Network. We encourage all our 4,500 industry members to bid for these and other public procurement challenges. This has resulted in the development of innovative glazing for windows and walls for public buildings that varies the transparency of the glazing automatically to control light and heat transfer. As a result, the UK has a strong position in architectural glass such as e-glazing.

There are many more examples of the way this system works. I join my noble friend Lord Puttnam in regretting that there are not more speakers on the Conservative Benchers who could tell us about it. My special interest is in technical textiles. Through the scheme, the antibacterial hospital gown for the NHS that controls the spread of MRSA has been developed, as has unobtrusive monitoring of health and drug delivery.

Current competitions include DEFRA looking for a small-scale anaerobic digester. Operation research and analysis to help the MoD make better decisions— I am sure that the noble Lords, Lord Lee and Lord Palmer, and my noble friend Lord Davies would all say amen to that. A competition that concluded recently was to deliver assisted living lifestyles at scale, the benefits of which we can all look forward to.

This system works. It benefits the private sector and public procurement. It enhances our quality of life. It is a matter of political will and personal determination to get it to work. Let us see the Government get on with it.

Public Services: Security of Provision

Lord Haskel Excerpts

Wednesday 19th October 2011 Lords Chamber

Asked By

[Lord Haskel]

To ask Her Majesty’s Government what steps they are taking to ensure that companies providing public services are financially secure.

[Lord Wallace of Saltaire]

My Lords, it is the responsibility of the relevant contracting authority to take appropriate steps to ensure that companies providing public services are financially secure, initially when selecting suppliers and then on an ongoing basis through contract management and supplier relationship management. For each of the major suppliers to government, we have appointed a Crown representative responsible for managing the relationship with that supplier.

[Lord Haskel]

My Lords, I find that response a little worrying, because we all depend on public services. Does the Minister agree that, at this time of volatile markets and financial difficulties, the services that we get from these companies are at risk from too much debt, from hidden debt and from hit-and-run investors who try to take over these companies? Are the Government taking any extra precautions in these circumstances, because, at the end of the day, it is we the taxpayers who have to clear up the mess?

[Lord Wallace of Saltaire]

My Lords, one cannot entirely eliminate financial risk either from private or public sector providers so long as public sector providers have a degree of financial and accounting autonomy. We have seen that in a number of public sector cases as well as in private sector cases. The Government are taking considerable care in contracting to ensure that we look at the financial viability of all suppliers and, in particular, do our best to encourage small and medium enterprises and social enterprises to be able to bid for public service contracts. That takes rather more sophistication than dealing simply with major suppliers.

Social Enterprise

Lord Haskel Excerpts

Thursday 6th October 2011 Lords Chamber

[Lord Haskel]

My Lords, many years ago, I was responsible for installing the first computers in our business in Leeds. They were a novelty. Everybody wanted to have a go and so we opened the office in the evening to staff and their families. Before long we had a little computer training co-operative going, which helped local people, particularly staff members’ families, to get better jobs and do better at school. It certainly raised the morale, commitment and loyalty that the noble Lord, Lord Newby, spoke about.

Was it a social enterprise or a social venture as the noble Lord, Lord Wei, put it? In those days, we socialists—that is what we called ourselves in those days—spoke about common ownership. To most people, such as my noble friend Lady Andrews, social enterprise was a contradiction in terms. A few of us were influenced by Michael Young, the social entrepreneur, who convinced us that business was as much about society as profit, as the noble Baroness, Lady Randerson, said. In truth, the name scarcely matters. What matters is that it was right for the time, it was right for the place and it was right for the people. Our little enterprise met the social need for people to become more computer literate: a local and specific social need which we did not even know existed when we started.

That is the secret of successful social enterprise, and why they are generally small and local. Otherwise they become ordinary businesses and lose their distinctiveness and that special aspect which sometimes enables them to succeed when ordinary business fails. As the noble Lord, Lord Mawson, explained, this is why in practice most big contracts in public services go to large private firms which, in turn, subcontract to local enterprises. This is in spite of the rhetoric from the Government, about which the noble Lord spoke.

It is easy to be cynical about social enterprises. It is easy to talk about them having mixed objectives and achieving neither. It is easy to talk about them being soft and therefore being crushed in the tough world of business. However, somehow, the idea of social enterprise keeps going. It just reinvents itself and adapts to the changing times. Indeed, its ability to deliver social benefits as well as commercial benefits may be another intangible asset that we have only just rediscovered about modern business.

The Government are making every effort to promote social enterprise, but they have got some of their thinking the wrong way around. Making 1 million public servants redundant and then trying to persuade them to sell their services back in the form of a social enterprise is getting things the wrong way around. Why? Because nobody is sure what need is being satisfied. Is it cutting public expenditure? Is it encouraging the private sector to provide public services? Or is it social engineering: trying to get people to improve themselves? Perhaps the Minister can clarify this, because until it is clarified it is not going to work properly.

There is clarity over what the Co-operative and Community Finance organisation is about. It calls itself the “lender for social purpose” and has been doing this for nearly 40 years. It raises money by public share issue and I declare an interest as a long-standing investor. Its prospectus says that it lends money for social purposes and collective benefit. But it is small, not because it has no money but because most social enterprises—apart from perhaps housing, mentioned by my noble friend Lady Andrews, or even water—also have a limited capacity to absorb and justify major loans and equity. Social enterprises have to perform. Their leverage is limited. Yes, we may do business with them initially because we support their social aims, but to get the repeat business they have to deliver quality, service, value, efficiency and profits like everybody else. So they have to be careful with debt.

Indeed, the big society and other fundraising ideas may not be all that relevant unless the terms on which loans are made are eased, and the need for more formal management is changed. Social investment bonds may be an idea whose time has come—the social investment market is expanding—but these are early days. We will have to see whether they survive the innovation of the City without the social innovation that the noble Lord, Lord Bhattacharyya, spoke about.

Traditionally, most social enterprises work in towns and cities: housing maintenance and refurbishment, collective living, training, health and welfare, especially for the benefit of those who are failed by the usual system and have particular needs. Interestingly community ownership is moving to the countryside where community-owned shops are replacing some of the many village shops which close each year.

An article in Tuesday's Financial Times told us that there are 60,000 social enterprises in the country, employing 800,000 people and turning over £24 billion a year. I suspect that figure depends on what you mean by social enterprise, but obviously this is a growing sector—growing in terms of numbers and public acceptability. The concept is being promoted by the Government; it has its own advocacy body, business schools are teaching it and institutions are appointing social entrepreneurs in residence.

As the noble Baroness, Lady Wheatcroft, suggested, jobcentres could also play an important role. All this is to the good and, like other noble Lords, I hope this is the way business is going. I wish it every success. I also hope it does not allow itself to be taken over by—or become part of—the existing business establishment. It would then lose its distinctive, special and attractive features and that would be a loss.

I am most grateful to my noble friend Lady Andrews for moving this Motion. It gives us an opportunity to debate some of the better business practices—not social business practices as the noble Baroness, Lady Wheatcroft, suggested—about which my party leader spoke last week.

The Big Society

Lord Haskel Excerpts

Wednesday 11th May 2011 Lords Chamber

[Lord Haskel]

The noble Lord, Lord Wei, may be surprised that some of us in this Opposition have, over the years, tried to welcome ideas that bring a little hope—wherever they come from—and the big society has the potential to do this. Yet hope for better things needs reason while exaggerated expectations bring only disappointment. Encouraging the big society should reflect this balance.

Is it just a matter of competition in delivering good public services, as the noble Lord, Lord Greaves, and other noble Lords have suggested? No: we are beginning to see competition between two or three large providers squeezing out the small charity or the local provider, which acts as a discouragement to the big society idea. In practice, measures will have to be devised on a sector-by-sector basis. The altruism that was mentioned by the right reverend Prelate has worked in health, where the NHS, the charities and the research organisations have all worked together because health does not differentiate between people. It has not worked in education because so much depends on the background of the individual student; all the longitudinal studies indicate that. On drug treatment, competition between the public and the private sector has shown that both do well, so each sector has to be considered separately.

I agree with the noble Baroness, Lady Tyler, that to encourage people to participate a range of financial instruments is needed that meets the needs and ideals of the big society. Perhaps some of the ingenuity of the City could be directed towards harnessing this. The idea of the big society may end up like the third way or stakeholder engagement or it may just end up with volunteers running public libraries, but it is worth a try.