Welfare Reform and Work Bill

Lord Rooker Excerpts

Monday 21st December 2015 Lords Chamber

My questions are about whether claimants are getting the full value of the assignations that they make. What are the tender processes that allow other providers to compete in this market? How does one become a shareholder in the organisation when all shares are held in the bank? Most of all—this is the real reason for asking for some responsibility in reporting to Parliament—who oversees the public interest in what is being delivered in the round? I am sorry that that is a bit technical. It is late at night and I understand that. But this is important. I hope that the Minister will explain a little. If he would like to do that in a letter to the noble Lord, Lord Rooker, and me, that might save some time. The chance to consider some of these issues only comes up every so often. I hope the Minister does not mind that I am detaining the House slightly on what I consider to be an important issue.

[Lord Rooker (Lab)]

My Lords, I support the noble Lord, Lord Kirkwood. He was quite friendly towards me about raising this matter in Committee. It was the noble Lord who drew my attention to Clause 20. I had not known about it. As will become clear, it is to the Minister we owe this debate because he alerted us to these banker-sized salaries in answering a question a couple of years ago.

In the 1970s, I was in the Commons when the scheme to replace the old invalid trike was set up, so I am aware of the positive change. When I had a proper job before I was an MP, I used to work in Thames Ditton as production manager at a loudspeaker company. AC Cars Ltd, which was in Thames Ditton, built what was known as the invalid trike, the single seater. Like my noble friend I make no comment on the Motability scheme, save to say that it has given access to mobility for some 4 million people over the years. I hope that it will for years to come.

Given that we are dealing with public money, I support the amendment moved by the noble Lord, Lord Kirkwood. It should go beyond the PAC and at least include the DWP Select Committee, which has never shown any interest in this, and the Charity Commission, which is useless as the regulator of charities. Implementing the amendment at least would lead to an inquiry into the finances of the scheme.

DWP is paying the Motability charity around £20 million. The charity gets about £7 million in lease levy from the vehicles used. It has an income of about £30 million. The charity, which is more than 60% dependent on government funds—this is public money but not in the way we expect public money to be raised; it is government money from the DWP paid to the charity—has two employees on more than £160,000, which is more than the Prime Minister earns, and another employee is on a six-figure salary. Last week, when the Times exposed anger about six-figure charity pay deals, it did not mention this, but it could well have looked at the Motability charity, which is supported and 60% paid for by the DWP. We are not talking about individual donors—this is a straightforward 59.6%, according to the latest accounts. That is partly responsible, in duty, for the whacking great salaries of the charity, and that is before we come to the operations arm. One of the chief executives of the charity is on more than £170,000, another is on more than £160,000 and someone else is on between £100,000 and £110,000. As I say, this is a charity that is 60% paid for by the Department for Work and Pensions.

But the main scheme, as the noble Lord, Lord Kirkwood, said, is operated by Motability Operations group, which is a company owned by four banks: Barclays, Lloyds, HSBC and the Royal Bank of Scotland. It operates as a contractor to and is directed and overseen by the charity. This, for me, is the crucial link to where public funds are involved. It is public money we are talking about here, but there seems to be no real accountability. The revenue of the company is around £2 billion from the operating leases and £2 billion from the resale of vehicles at the end of the three-year lease. Some 600 cars a day are placed on the second-hand car market. As I said in the debate earlier this year, I am well aware that someone in my family once had such a car. Motability Operations claims that it gets no money from the Government. It states that on page 4 of its latest accounts. But the £2 billion from the leases is in fact the DWP Motability payment to more than half a million people, and because they have agreed to assign their DWP allowance to the scheme, the money is paid directly to Motability Operations. That is what Clause 20 is all about.

I support Clause 20, by the way, and in my view it ought to be retrospective in order to claw some public money back from this company and thus enable the Government to recover their costs. There is a direct link, and this clause is the missing piece of the jigsaw. After our debate in February I went to the Public Accounts Committee, the National Audit Office and the Charity Commission, but no one wanted to know. They said, “It is not public money so it is nothing to do with us”. This clause links it all together, so it is a really useful one and I am grateful that it is in the Bill.

As my noble friend said, the chief executive of the operations company is on a package of more than £900,000. The chair is on a package of £195,000 and a handful of directors—fewer than five, I think—take £3.3 million between them. There are also loads of long-term incentives for the CEO and the directors. The whole system depends on the DWP payment, which Clause 20 makes clear; it shows the direct link. As such, the NAO and the PAC should take a look at it, and that is what the amendment is about. The Charity Commission should be interested in the governance arrangements. It could ask, for example, why the chair of the company operations remuneration committee thinks it right to stand down after two three-year terms, as set out on page 43 of the accounts, and yet the charity trustees have been serving for four decades. I repeat: four decades. When you ask the Charity Commission about it, all it ever gives you is the last time they were elected. Of course, they are all on something like three-year terms, but no one is interested.

I have to say that Alan Yentob came unstuck after serving loyally as a trustee at Kids Company for 18 years because after that length of time he could not tell the difference between management and governance. His 18 years as a trustee is less than half that of some of the Motability trustees, but the Charity Commission does not seem to bat an eyelid about it. There is a strong case for the Nolan principles of public life being applied to the third sector, which of course they are not, but I think they would cover this point. In short, we have here a service that everyone agrees is a public good. There is no argument about that. But it is based on public funds and however the risk factors are dressed up—they are minimal in comparison with the real private sector—they are being used to pay these banker-sized salaries. Of course, I accept that the second-hand car market is highly specialised, but let us face it, it is the biggest company going with 600 cars a day feeding into the market.

[Lord Davies of Stamford (Lab)]

I was hoping to catch my noble friend before he sat down, which I thought he was about to do.

I am very grateful to my noble friend, and I think the whole House will probably be very grateful to both him and the noble Lord, Lord Kirkwood, for raising this fascinating matter. I have two questions to put to him. Normally speaking, a high salary is justified, where it can be justified at all, either by the high risk incurred by the person who is receiving it or by the great competitive merits of that person in showing great skill in the face of competition. Can my noble Friend tell the House, first, what risk is being run by the operations company in this case? How risky is its business? Secondly, how much competition is there for this business, or does the operations company have an effective monopoly on the motability business in this country?

[Lord Rooker]

I am grateful to my noble friend and I will come to that very point because it is crucial. I am not clear what the banks get out of this; I do not believe that they are doing it for nothing. The Library has not been able to explain it to me anyway.

That brings me to my final point and I will cover the points made by my noble friend. As the noble Lord, Lord Kirkwood, said, there is another £180 million in another charity within the Motability charity sitting there doing virtually nothing. The Motability Tenth Anniversary Trust was set up by the Motability charity. It has the same trustees, an income of £50 million a year and expenditure of £5 million. It has assets of £180 million. It has no employees or volunteers, so it cannot possibly be fulfilling the public benefit rules for charities on those figures. I checked them again on the web the other day.

The website AccountingWEB had some interesting points to make. It referred to the asset seemingly sitting around not doing much. The original funding for this charity within a charity was 50% from Motability Operations, the company, and 50% from the DWP. There is a direct link with this charity within a charity—50% of it was funded by the DWP to start with. Does it mean that the not-for-profit status of operations is maintained by recycling the Motability Operations profits back into the Motability Tenth Anniversary Trust in order to swell the coffers, and so avoid tax? It asked whether this incestuous arrangement is there because someone has worked out a way to get their hands on it, and in due course extract it from the trust. Again, this is a direct link—the DWP funded 50% of the charity within a charity. It funds 60% of the main charity so it is directly responsible for the salaries of the charity staff. I fully accept it is the Motability Operations company that is responsible for the real bankers’ salaries—almost £1 million for the chief exec.

I am coming to the end. The Treasury, I understand, loses around £350 million in VAT by this whole complex set-up. Operations installed a new IT system in August. It cost around £100 million but did not provide any upgrade to functionality. I am reliably informed that this required a lot of hospitality and team rebuilding—all on the cash of people with a disability.

Maybe it is time, as the notes on Clause 20 say, or envisage, to bring some competition into the market because there is no competition. Clause 20 is set up where it envisages that there might be another provider. Well, there is not. In some ways, if the DWP wanted to get its hands clean and do some real governance on this—and the Government, because they are all part of the issue—a bit of competition would not go amiss. That is where we come in. The opportunity of Clause 20 is useful for the Select Committee in the other place which, as far as I know, has not batted an eyelid. The issue has been raised very occasionally but not properly. It has never been taken seriously by the Government or the department.

--- Later in debate ---

[Lord Freud]

I was able to say that the department considered value for money and had drawn up this clause to allow for other providers. That is as far as I can go at this stage. Motability is a long-established and very well-loved organisation; that is the current position.

On the second charity, the Motability-run fund is used to support the objectives of Motability and is not government-run. The remuneration of Motability Operations directors, and indeed those of the charity, is a matter to be decided by Motability.

[Lord Rooker]

Can we just pause there on the charity? I fully accept that Motability Operations is a company and that it is up to the directors what they pay the chief exec, given what the risk is and the competition. The charity is different. This charity is 60% grant-funded by the Minister’s department—to be accurate, it is 59.6%. Does he go back to the Prime Minister occasionally and justify it by saying, “We’re paying out 60% of the money to this charity and, by the way, we are paying the chief exec a lot more than you”? There were supposed to be some rules in Whitehall about people not being paid more than the Prime Minister. I knew that when I was at the Food Standards Agency. We had charities exposed in the Times last week for paying six-figure salaries. It is no good the Minister saying that it is down to the trustees of the charity when the department is funding 60% of that charity, which is not going out collecting money from the public with tin cans. I know that it has other donors—I am not arguing with that—but if it is 60% directly funded by grant from his department, can the Minister really justify it having three people on six-figure salaries, one of them on more than £170,000 a year, and paid for by his department? Is he happy with that?

[Lord Freud]

There is a key issue about charities having to attract the best people when they are very substantial operations, which Motability is. I know, because I was involved for a period in a foundation in the charitable area, that to attract the kind of people who are commercially competent puts you into that bracket. I have said enough.

Universal Credit

Lord Rooker Excerpts

Tuesday 7th July 2015 Lords Chamber

[Lord Freud]

Clearly, as we roll out universal credit in the years to come, we will be pulling in people who are more vulnerable than the groups we are currently pulling in. We are looking to support them in a number of ways. That is one of the reasons why we are doing this careful rollout with a test-and-learn strategy. But the specific things we are looking at in this area are help with personal budgeting support and the development of universal support delivered locally, where we are in partnership with local authorities throughout the country. We are trialling that and the results will inform the future rollout.

[Lord Rooker (Lab)]

Is it not also true that the system is simpler to understand for cybercriminals? Given the fact that universal credit is going to be such a large percentage of government spending, what preparations are the Government taking to make sure that this system is clear and safe from cyberatttack?

[Lord Freud]

The noble Lord is absolutely right that this is potentially a major target for cybercriminals. We have made an enormous effort in developing the digital system, which is a two-way system, unlike the live system that we are currently rolling out across the country. We are making sure that that is safe from cybercriminals, and the first group of people are looking at security operations, because it is not a question of just building a system; you have to maintain it with a big team to make sure that nothing of that nature is going on.

Pensions: British Pensioners Overseas

Lord Rooker Excerpts

Wednesday 11th March 2015 Lords Chamber

[Lord Freud]

This is the reason why this is a complicated area: it is about a bilateral agreement with another country. In practice, to take the example of Australia, I estimate that for any extra amount that we paid to ex-UK pensioners or UK pensioners living in Australia, more than 25% of that money would go straight into the Australian Treasury.

[Lord Rooker (Lab)]

My Lords, I fully accept the position that the Minister is in by answering this Question, but how often do the Government check and audit that the recipients of these pensions who are thousands of miles away are still alive?

[Lord Freud]

The noble Lord will be very pleased to know that we now have a system, which has been introduced reasonably recently, of checking that rather more regularly than it used to be done.

Jobseekers (Back to Work Schemes) Bill

Lord Rooker Excerpts

Monday 25th March 2013 Lords Chamber

[Lord Freud]

My Lords, I have answered the question. I will re-emphasise that we do not have targets, we have management information. I may not have convinced noble Lords on the other side, but they should be very familiar with running targets because that is how they tried to run the economy. We do not run targets because they create perverse behaviours. We collect information in this area, not least because it is required for public purposes. Furthermore, we need to run a business and we need to understand what different areas are doing in order to do that.

Referrals for sanctions are made on the merits of each case. Decisions on sanctions are based on evidence presented that is independently reviewed by decision- makers. The fact that only three-quarters of decisions made are upheld by these decision-makers proves the robustness of the process. Furthermore, there is an independent appeals process against decisions, so even if a target regime were in place, which it is not, claimants who were wrongly sanctioned could successfully appeal.

The flexible business model means that managers need to understand the reason for outliers. While differences can be for good reasons such as local labour market conditions, senior managers need to monitor the overall situation in order to spot and correct anomalies.

Given what I have said, it would be odd to require the independent report to cover a sanctions target that does not exist. However, we are happy to give reassurances that we will make clear the position in respect of targets and league tables. I have done my best today, but clearly more may need to be done for some noble Lords.

[Lord Rooker]

At the risk of upsetting the Whip, I have a question. The Minister does not seem to have addressed one of the examples given by my noble friend. Will he give a personal guarantee that no office will open and call people in on Easter Sunday? How many offices are opening on Sundays? Are they in England, Wales and Scotland? What is the policy of offices opening on Sundays to call in people in the way we heard in the example earlier on? He must address that because this is obviously something quite new.

Leveson Inquiry

Lord Rooker Excerpts

Friday 11th January 2013 Lords Chamber

[Lord Rooker]

My Lords, I have not spoken on this issue previously. I am in favour of a free press unshackled by Parliament or government. In fact, I want an even freer press, but where privacy laws are not needed. Privacy laws will be misused by the rich and famous to cover up. We should not have laws that look like they are only for celebs to be able to collect loads of money.

We need to respond on behalf of the majority of people living in an alert democracy who want facts, opinions and lots of open comments. They are not fools and can make their own minds up, but they need to be able to complain and not be fobbed off. If they are on the receiving end of an untruth, they want the chance for an apology and a correction. If they see an untruth they should be able to complain. They need someone to listen. They want someone to go to who is not owned and controlled, lock stock and barrel, by those they complain about. A regulator that is both independent and objective will help people with a complaint and, as the noble Lord, Lord Fowler, said, decent journalists who themselves want to be held to high standards. Over the next 18 months or two years, we will witness a great number of court cases where journalists, the police and others are held to account under the existing law. Everything we will witness came about under the existing, press-owned self-regulation process.

In preparing these few words, I read the 2012 Hugh Cudlipp lecture given by Jon Snow of Channel 4. Jon said that he never met that giant of post-war tabloid journalism but he mused about what Cudlipp would have made of today’s tabloid leadership: not a lot, I suspect. I met Hugh Cudlipp and his team in 1962, when he came to talk to the annual student journalist conference, and the year after when we persuaded him to address students at Aston University. He electrified us to go for those in power, search out what they were about and what they were up to, and remember that newspapers are about the people. Today, it appears that some press barons and journalists have removed themselves from the real world where the majority of people live. They have contempt for those they write about and take their readers for fools. Jon Snow said that the hacks in question who brought about Leveson,

“took some weird pleasure in urinating on our world”.

We need a regulator that people and journalists can trust; a regulator that above all knows what it is doing; a regulator that is objective, trustworthy and independent; and a regulator that editors do not fear if they print stories that are right in truth and justified. Snow pointed out—not much has been made of this—that the cutting edge of TV journalists are subject to regulation that seems quite effective. They can work within the so-called constraints that might be there. He also spoke about not wanting to find his own editors somewhere in the mix. Decent journalists want a system with an objective regulator but they would not want it presided over by their own editors.

Public trust is crucial. Lord Justice Leveson showed the way to engender that. Like him, I favour independent, objective self-regulation to maximise the buy-in. It is crucial that the buy-in is maximised but there is a need to give the regulator the kitemark from time to time to engender and preserve public trust. Who is to award the kitemark that the regulator is indeed objective, trustworthy and independent? Leveson also gave us the answer to that, which is dawning on people slowly. Contrary to the claims of editors and some Ministers, no parliamentary or government regulation of the press is required to achieve the solution in which the public will find trust. I will support the proposed recognition commission. Its only remit is to certify the regulation process—nothing to do with the press process, nothing to do with press content and nothing to do with the management of complaints. Therefore I support recommendations 1 to 24 of Lord Justice Leveson.

Health and Safety: Common Sense Common Safety

Lord Rooker Excerpts

Thursday 25th November 2010 Lords Chamber

[Lord Rooker]

My Lords, I declare my interest as chair of the board of the Food Standards Agency. I do not speak for the agency in this House—we are a non-ministerial government department and we have Ministers in the four Parliaments of the UK who do that—but I will say, on behalf of the board and staff, how grateful we are for this report and for the care and attention to detail that the noble Lord, Lord Young, has given to our proposals for the food hygiene rating system, which is covered at length in the report and is due to be launched next week. We had a short telephone conversation about aspects of the system in the summer. I hope that the rest of the report’s recommendations will also be implemented, but I will come to that in my final points.

I take second place to nobody on health and safety matters. I made my maiden speech in the other place in March 1974 on health and safety; I served on the standing committee for the current health and safety legislation; and, as a manager in manufacturing, I was red-hot on health and safety matters in all of the companies in which I worked. As a Member of Parliament, I used to get complaints about health and safety matters—indeed, the former coroner of Birmingham drew my attention to some of the construction difficulties—and I gave attention to those issues. We have heard some examples of such difficulties from these Benches today, but we have not heard about the catastrophic rate of accidents in the farming industry. I make these points because my noble friend Lord Jordan laboured the point that the report deals with some issues but ignores other areas that are fundamental to the health and safety of people at work. I see no contradiction whatever between the contents of the report and the need to take health and safety matters incredibly seriously in manufacturing, mining, construction and farming. In fact, you could implement the report as a way of being much harsher on sectors in which people are being killed on a daily basis. Those are the sectors in which the risk is high but sometimes ignored.

I will draw your Lordships’ attention to three items. First, the noble Lord produced his report, as I understand it, as a one-off before he became the business tsar. I looked at those two roles quite separately. However, if No. 10 has problems with noble Lords saying things, I invite your Lordships to check what Howard Flight, who has not yet joined us in the House, said this morning—these things happen. You can tell the truth of a story, but you may not tell the whole story. Why be hanged for telling only half the story? There are some people for whom things have never been worse and will get worse still, but it is also true that, for some people, things have never been better. Telling half the story cannot be a hanging offence—that is my defence of the noble Lord, Lord Young.

The noble Viscount, Lord Younger, has been the only speaker to mention the good Samaritan issue. Given that almost half the country is currently covered in snow, in my local town of Ludlow I have flashed the noble Lord’s report in front of the local council because of this nonsense about the clearing of snow. The report makes it absolutely clear that there is no evidence from the Lord Chief Justice that anyone has ever been done as a result of snow clearing. If you clear the snow and wash it out with water that freezes, that is negligence. If you clear the snow, sweep it away and it is dry, that is a voluntary Samaritan issue that you cannot be prosecuted for. I do not deny that we need clarity in the law. The issue of local authorities and their inconsistent approach, which is covered on page 26, must be dealt with.

I turn to the issue of low-risk establishments. A place may look low-risk, but just because people are not wearing boiler suits does not mean that things are not dangerous. Laboratories, shops and offices can be dangerous, depending on the nature of the equipment and the substances that you have to use. You have to be careful and use common sense. That is not the same as what we know are high-risk establishments. A drilling rig is a high-risk establishment. Do not lecture us about big blue-chip companies taking everything really seriously—go and talk to the directors of BP. These things must be looked at in the round to see where the risk is. We must assess the risk and then manage it proportionately. The point made in the report is crucial.

My final example from the report that I have not heard mentioned so far—I missed only two contributions when I had to leave the Chamber—relates to the important issue of voluntary activities, which are covered on page 29. I have a message for the Minister and the Government. Left as it is, the big society agenda will go straight down the plughole unless something is done. The Stalinists in local government, who do not want the big society agenda because they want to do everything themselves, will try to snuff out every local initiative that comes from residents and will hide behind health and safety legislation to stop the operation of the big society. If that is the Prime Minister's big idea, he must do something about that because such initiatives will disappear if this report is not implemented.

That leads me to my final point. The noble Lord, Lord Young, says in his introduction that these reports gather dust. From my experience of Whitehall, which lasted only 11 years and was very short, I say that his report will gather dust. The report cuts right across the piece, so nothing will happen unless somebody with get-up-and-go is charged with dealing with it. The noble Lord was supposed to be dealing with it, but the issue is quite separate from that of his role as business tsar. I say to the Prime Minister that letting the noble Lord, Lord Young, go is a sign of weakness. I am not accusing the Prime Minister of weakness; it is a sign of weakness in the Government. If the report is to be implemented, that will not be done by saying to each department, “Will you and your Ministers play your part, please?”. In my experience, such reports are not implemented but must be driven forward in a positive way. It will not cost a lot to do that, but everyone will benefit if it happens. Society will benefit, regulation will benefit and we will have a happier society, which was mentioned in the speeches this morning. However, if nothing is done about the management of this report, I say to the Minister in all sincerity that it will not get implemented. My central plea is that someone should be put in charge of ensuring that the report is implemented, because that is the desire of everybody.