Public Bodies Bill [HL]
Lord Taylor of Holbeach Excerpts(13 years, 8 months ago)
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Baroness Royall of Blaisdon
My Lords, I think my noble friend has said it all. I am grateful to him for raising the proposed merger of these two bodies. Here we have two small but very important organisations that deal with related areas of law but are distinct in their functions. As my noble friend said, one is a regulator and one is an arbitrator. It is fair to say that everybody who knows the two organisations, the people involved and their work is bemused about why they are being merged. They wonder whether it is just a paper exercise in order simply to decrease the number of quangos. The cost savings are potentially very small. I will be grateful if the Minister will tell me what costs will be saved. My noble friend made a point about the separation that must exist between the two functions. It is extremely important that there should be walls, be they Chinese or otherwise, and we need to know that they will exist if the two bodies are merged.
Lord Taylor of Holbeach
I thank the noble Lord for moving this amendment. He very effectively described the functions of both bodies. They have both existed for many years, and both operate in the sensitive area of trade union and industrial relations law. I stress that the Government value their roles. They are both expert in their respective fields, and they both enjoy solid reputations for impartiality. The similarities do not end there. They both undertake judicial functions, they have a shared understanding of judicial procedures, their officeholders and support staff both possess detailed knowledge of trade unions and of industrial relations more broadly. Both bodies are relatively small and are both housed in the same building. They both receive administrative support from ACAS—the Advisory, Conciliation and Arbitration Service. There is therefore already significant linkage between the two bodies, and the Bill will take that process a stage further by merging them. Some efficiency savings will be produced as a result, but I have to say to the noble Baroness, Lady Royall, that they are not likely to be huge. The total budget costs for both organisations are about £1.25 million, so the efficiency savings will not be huge, but there will be some. In particular, their support staff could be deployed more flexibly to meet the peaks and troughs of case loads.
A merger would also simplify the institutional landscape and avoid any potential confusion in the eyes of users about their respective roles. Therefore, the Government consider that a merger is advantageous to all concerned. A merger will not affect the underlying law which these bodies help to enforce. I should add that the Government have no plans as a consequence of this merger to change the various rights and duties embodied in trade union law. Our intention is to ensure that the merger will not affect the experience of persons, be they individuals, unions or employer groups, who currently use the services of these bodies. In particular, we want to maintain the same procedures which the CAC and the CO currently apply when considering their respective cases. BIS, which has a lead responsibility for these two bodies, has already discussed the potential merger with the CAC, the CO and ACAS, and has sought the views of the TUC and the CBI. We believe that we have reached an understanding on how a workable merger can be achieved.
In summary, there is a strong case for these two small bodies to be merged. We believe that this can be achieved without prejudicing in any way the performance of their important and sensitive duties, and I hope that the noble Lord will feel able to withdraw his amendment.
Lord Whitty
Well, my Lords, that was a bit thin. The Government are keeping the functions of the two organisations, which they recognise are distinct. The organisations already have good administrative support and operate quite sensibly, and there is virtually no cost saving, if any. The one point that he made with which I disagree is that the users of those organisations know perfectly well what they are for, and they are distinct. If a member has a complaint about his trade union, he does not want an arbitrator, he wants someone to tell that trade union that it has been acting against its own rules in the way in which it has dealt with him, whereas the CAC is in essence an arbitrator. The Government wish to make this tidier, and BIS wants to cross another organisation off the list. I am not going to make a big point about this, but the reality is that there is no rationalisation, no overlap and no administrative saving. There is, however, a lingering doubt that there might be some conflict of interest when the noble Lord talks about rationalising the role of the two secretariats. That might come back and bite us, although the probability of that happening is fairly low. Nevertheless, it is still there, and the appearance of a Chinese wall will at least be necessary, in which case any administrative rationalisation will be even less. I will not press this amendment tonight and I will not press it again, although I do think that the Government’s argument is a bit thin. I beg leave to withdraw the amendment.
Lord Taylor of Holbeach
My Lords, I thank the noble Lord for this opportunity. We are making progress in a direction with which he will be content and with which I am content. Perhaps I can bring together the various changes that have been made as a result of our amendments.
As the noble Lord rightly points out, this group of amendments deals with Clauses 3 and 4. Clause 3 gives a Minister the power to make provision, by order, to alter the constitutional arrangements of any body or any office listed in Schedule 3—but only those listed in Schedule 3. Of course, now that Schedule 7 has gone, the list is finite. For example, in the case of the Theatres Trust, we intend to do away with the Secretary of State’s role in the appointments process, which will increase the body’s independence as it moves towards charitable status.
The noble Lord referred to Clause 4, which is a parallel clause with different purposes—it concerns funding arrangements—but is structured in the same way. Clause 4 confers on the Minister the power to make an order modifying the funding arrangements of a body or office listed in Schedule 4. In this regard—I am giving examples which I hope demonstrate the purpose to which these clauses will be put—the Government intend to reform the Drinking Water Inspectorate by allowing it to recover its costs from the water industry, bringing this body into line with the existing principle that it is the businesses which benefit from regulation, not the taxpayer, who should bear the cost of the regulation. The previous Government concurred with this approach.
In considering these clauses as a whole, I understand that the noble Lord is primarily concerned that these powers could be used to restrict the independence of bodies. Indeed, the noble Lord said that one of his anxieties was that, by granting Ministers the power to amend the governance or funding arrangements of bodies, the Bill would enable Ministers to threaten the position of chairs or board members who have displeased the Government, or constrain the ability of a body to carry out its work by squeezing its functions. While I seek to reassure the House that the Government have no intention of acting in such a manner, I understand the sentiment behind these concerns. However, the appropriate way to deal with them is to place appropriate limits on the power of Ministers to act, both within the Bill and elsewhere, rather than to abandon the powers altogether.
As with all the principal order making powers in the Bill, the uses of Clauses 3 and 4 are restricted by the conditions described in Clause 8 and elsewhere. Under the proposed government amendments, Ministers would be required to set out the rationale for an order in an explanatory memorandum when laying a draft order before Parliament. I explained that in a previous debate on an amendment tabled by the noble Lord, Lord Whitty. Ministers would thus be held accountable for the use of the power in relation to the particular considerations in the Bill, including the effectiveness of public functions. A change in funding which, for example, would leave a body unable to carry out its public functions properly would be unlikely to meet this objective. I cannot envisage a situation in which a Minister would wish to make such an order. I can further assure the House that in light in particular of today’s third report from the Delegated Powers Committee, the Government are considering whether it is necessary to clarify Clause 8 further. I hope that that provides some reassurance to the noble Lord, Lord Whitty, in light of his previous amendments.
It is also important to remind the House that we are continuing to engage with the noble Lord, Lord Lester, and other noble Lords in relation to his Amendment 175, with the intention of ensuring that the safeguards applying to the order-making powers in the Bill include appropriate protection for the necessary independence of public functions. Furthermore, as I have said, the removal of Schedule 7 from the Bill will ensure that no body or office can be listed in Schedules 3 and 4 and be subject to the powers there unless its inclusion has been approved by Parliament through primary legislation. I hope that this change to the structure of the Bill provides the House with a strong reassurance that full parliamentary scrutiny will be central to the operation of these powers.
In addition to the protections present and planned for the Bill itself, there are safeguards which rightly limit the power of Ministers. First, in terms of appointments and governance, chairs and board members are in most cases appointed in line with rules issued by the independent Commissioner for Public Appointments. This ensures that appointments are made on merit following an open and transparent process. The Government are further committed to strengthening the role of Select Committees to scrutinise major appointments, giving Parliament an effective voice in the process. In addition, for certain appointees who must be demonstrably independent of Ministers, the terms and conditions or relevant statute will provide safeguards to reinforce the officeholder. This might include pre-appointment scrutiny by Parliament or appointing certain officeholders on a single, non-renewable term so that the decisions and actions of those officeholders are not, and are not perceived to be, motivated by a desire to be reappointed. Examples of office holders listed within the Public Bodies Bill that fall within these categories include the chair of the Equality and Human Rights Commission and the chairs of regulatory bodies such as Ofcom.
I wish to emphasis the Government’s position that it is right for Ministers to have a role in public appointments and the governance of public bodies. The Commissioner for Public Appointments code of practice clearly states that the ultimate responsibility for making public appointments rests with Ministers. Ministers should remain answerable and accountable for the overall performance of public bodies and have the ability and authority to intervene if a body is failing. This must include the ability, in extreme cases, to remove board members. The balance that the Government must strike, met by the safeguards I have described, is to retain this principle of accountability while ensuring that public bodies are able to act independently of ministerial influence where required.
That is also the case in relation to the powers in Clause 4, which relates to funding mechanisms. The Government’s position is that ultimate decisions on the allocation of funding must rest with Ministers, who are ultimately accountable for the delivery of public service by central government and for public expenditure within their spending review settlements. It is for precisely that reason that it is against Cabinet Office rules, for example, for public bodies to use public funds to employ PR or marketing consultants to lobby government or Parliament for more funding. We could not support amendments to Clause 4 which would risk undermining that principle. It is also right that Ministers have the assurance that public money is being spent appropriately. In the case of most NDPBs, Ministers and departments must be consulted by public bodies before they exercise certain financial powers such as borrowing or capital expenditure. We believe that the powers that Clause 4 would confer on Ministers are entirely in keeping with this position; they do not establish a new status quo but rather reaffirm ministerial accountability for public expenditure.
It is taxpayers who ultimately fund public bodies in most cases, and I am confident in suggesting that the citizens of this country expect government to account for its use of their money, no matter by whom it is eventually spent. On this basis, I believe that the removal of Clause 3 or 4 from the Bill would be a disproportionate measure, as it would remove Ministers’ ability to take forward the type of changes that I described earlier and instead require primary legislation for such changes, regardless of their nature. As well as preventing or delaying sensible reforms, the removal of Clauses 3 and 4 would run contrary to the principle of ministerial accountability for the performance of public bodies and their use of taxpayers’ money. While I agree with noble Lords who have highlighted the need to safeguard the independent delivery of some public functions, I believe that this can and should be achieved through other means, such as the safeguards within the Bill and outside it.
I am sorry to have taken some time over this, but this explanation probably goes to the heart of many of the concerns that noble Lords have expressed about how the Bill empowers Ministers and the balances that we seek to set within the architecture of the Bill to ensure that this is not abused. On this basis, I contend that both clauses should stand part of the Bill. In the light of the reassurance that I have supplied, I seek the noble Lord’s support on this. Furthermore, I ask the noble Lord, Lord Whitty, whose amendment is I think included in this grouping, not to press his amendment.
Lord Hunt of Kings Heath
My Lords, I thank the noble Lord, Lord Taylor, for a full response to the issues raised. He went a very long way to reassuring me about how this will operate. I do not disagree with him when he says that ultimately Ministers must be accountable. I very much agree with that, but it is also my contention that there is very little point in setting up these bodies unless they, too, have a degree of independence of judgment. The concern has always been that some of the clauses in the Bill will hang like a sword of Damocles over those bodies and inhibit their independence. I take very much the point that the Minister raised that one critical issue here is Clause 8 and the matters to be considered by Ministers when making an order under Clauses 1 to 6. I know that there is a lot of discussion taking place about this, and I hope that there will be a positive outcome. It also takes place in the context of Clause 10 and the order-making procedure. We will come to that in a couple of days’ time. But the Minister has reassured me to a very great extent tonight on this particular matter.
Baroness Royall of Blaisdon
My Lords, I rise for two minutes. I was going to say that this was going to be an interesting discussion, but actually I found it a deeply shocking discussion. I am shocked by some of the allegations that have been made this evening. I think that the church has got a very difficult tightrope to walk at this very difficult economic time. Of course it has to care for our heritage, and I am sure that it does care for it deeply, as the right reverend Prelates have said, but its first responsibility at any time should be towards the flock and the people for whom it cares. In doing that, of course, it must also take into account the heritage that we all cherish. I am going to sit down now, but I think that this debate has been perhaps more inflamed than it should be. It perhaps demonstrates the need for greater scrutiny of the Church Commissioners, and I think that perhaps that is something that the Government and the church itself could look at because clearly there is a demand for perhaps more conversations and discussions about things that are going on. However, I am pretty much appalled by some of the things that have been said this evening.
Lord Taylor of Holbeach
My Lords, I have enjoyed listening to the debate, but I share some of the noble Baroness’s observations on it. Perhaps it is the lateness of the hour. There is scarcely enough time to consider a topic as significant as this. I think I would have enjoyed the debate more if it had not been in the Public Bodies Bill, but it is clearly not an appropriate topic for this Bill, so I am going to address my remarks purely on those grounds. I think the House may well discuss methods whereby the scrutiny of church affairs could be brought back to this House in some way, but that is a matter for the House authorities. It is certainly not a matter for the Public Bodies Bill.
There are three reasons why the Government cannot accept this amendment, and they have been said. The first is that the Church Commissioners fall outside the scope of the Bill. They are not a non-departmental public body but essentially a non-governmental body and a charity under the scrutiny of the Charity Commissioners.
The second reason is the historic relationship between Parliament, government and the Church of England—perhaps we have seen why this separation of the estates is so important in the nature of the debate that we have had this evening. Since the enabling Act 1919 set up the Church Assembly, now the General Synod, it has been accepted that Parliament does not in practice legislate on the internal affairs of the Church of England without its consent. The mechanism laid down in that Act for legislating on the Church of England included the constitution of the Church Commissioners through synodical measure. There are, of course, methods by which Parliament can put pressure on the church to act, but the noble Lord’s amendment seeks to return to a position in which Ministers would have a direct power to intervene in the governance of the commissioners.
The third reason is that the commissioners’ board of governors, of which the right reverend Prelate is chairman, as trustees of a charity, are under a fiduciary duty to manage their assets in the way that best enables them to achieve their charitable purposes. It is therefore for them to determine how best to do so, including by deciding whether to dispose of particular assets. It is not a matter for Ministers to regulate in the case of this or any other charity. I therefore urge the noble Lord to withdraw his amendment.
Lord Inglewood
My Lords, I thank all noble Lords who have taken part in this debate. I must say that when I moved the amendment I had no idea what direction the debate would take, but I did not anticipate that it would move in the way in which it did. I particularly thank the right reverend Prelate the Bishop of Leicester for arguing the case that he did in the way in which he did, and I thank my noble friend Lord Deben for his counter point. In a way, it drew a lot of the argument into the open and made it clear that these issues are perhaps not as clear as we all like to think they are at first blush. The right reverend Prelate the Bishop of Chester asked me whether I would withdraw the use of the words “money laundering”. I shall do so, although what I actually said was “a form of money laundering”, and I bracket those words with “the philosopher’s stone that turns base metal into gold”.
I will make one technical point and then one more general point. The technical point is that the Church Commissioners are not completely charitable. The point of the 1943 measure is that they hold certain funds that include the bishops’ palaces, which are not held charitably—and I base that not on my own inadequate legal knowledge but on Halsbury’s Laws of England in the Library of the House. The relationship between the Charity Commissioners, the Church of England and its assets is perhaps not as straightforward as any of us quite think.
I will also make a point that no one else has made this evening but which I feel has something to do with this. In religious matters, enthusiasms gain prominence from time to time—we have seen this in a number of areas, such as the Reformation and the iconoclasm of Byzantium—in which so enthusiastic do people become about a particular way of looking at things that they perhaps feel that they can ignore everything else in the pursuit of it. My sense as an individual, as one of the foot-soldiers in the Church of England, is that there is currently a great movement against the kind of things that I was talking about. I hasten to add that I hope your Lordships noticed that I never said that bishops should live in bishops’ palaces; I said that if bishops ceased to live in bishops’ palaces, proper and legitimate steps should be taken to look after the heritage interest that they represent. I added in parenthesis that I had a personal preference in that direction, but that is quite different. I am concerned that, if we have a kind of cultural revolution, as we have seen from time to time in churches, the Red Guards should not destroy all the things that matter in effecting the changes that they want to see.
It is ultimately for the Church of England to decide what it wants to do but I believe that we all have a legitimate interest in the assets of the Church of England and that society as a whole has a legitimate interest in what happens to them. After all, these particular buildings are listed and the civil authority is not simply decoupled from them.
It is late. We have had a lot to think about, and I hope that we shall continue to think about it. I beg leave to withdraw the amendment.
Lord Taylor of Holbeach
I thank the noble Baroness for tabling these amendments and for the productive meeting that we had earlier today. This will, I hope, be a fairly brief debate, but it has certainly been productive, because this is one of the key bodies within the Bill. It is emblematic of the desire of all noble Lords to have a facility to reform public bodies while retaining their essential core activities and their independence.
The inclusion of the Equality and Human Rights Commission in each of these schedules was not an afterthought. The Government made it clear in their announcement of 14 October that they intend to retain but substantially reform the commission, refocusing it on its core functions of regulating equality and anti-discrimination law in Great Britain, fulfilling EU equality requirements and being a national human rights institution under the United Nations. We also intend that it should provide better value for the taxpayers’ money spent on it—something that it has so far failed to do.
The Government intend to set out their proposals for the commission in a consultation document shortly. I hope that this will be available on Report. However, I can assure your Lordships that the combination of needing to focus the commission on its core functions and at the same time improving its value for money means that our consultation exercise will include proposals relevant to all three schedules mentioned in this group of amendments.
The noble Baronesses, Lady Thornton and Lady Royall, raised a point about what happens to bodies having had a process of reform within the schedule. Do they remain in a permanent state of anxiety and is there a case for sunsetting? We are actively considering proposals similar to that which the noble Baronesses suggested. Above that, any statutory instrument can include a proposal for a body or office to be removed from the schedule in which it appears. It can be done in that way, but I appreciate the concerns of the noble Baroness. I extend an invitation to her to talk further about this because it is a mechanism that would make the Bill much more effective, if we can find ways of closing the schedules after the period of reform.
I know that this is a matter of concern to a number of noble Lords, so I can assure the Committee that we recognise the importance of the commission being able to independently administer its core regulatory functions as well as those founded on international and EU obligations. In particular, the Lord Chancellor recently made it clear when giving evidence to the Joint Committee on Human Rights that the commission’s independence as a national human rights institution would remain untouched. I am happy to repeat his assurance and hope that the noble Baroness, Lady Royall, can accept it.
It is appropriate that I pay tribute to the work being done by my noble friend Lord Lester of Herne Hill and indeed by other noble friends, such as my noble and learned friend Lord Mackay of Clashfern and my noble friend Lord Maclennan, who in the early days pointed out a number of deficiencies that he felt needed to be addressed. I am grateful to join in the tributes paid by my noble friend Lord Lester to the Bill team, which has worked extremely hard in trying to find a way through on this matter. I hope that my noble friend Lord Boswell can feel content that we are achieving what we would seek to do in reforming this institution without changing its independence from government. Therefore, I ask noble Lords to accept the inclusion of the EHRC in each of these schedules as a necessary measure. It is properly safeguarded and narrowed in scope by the removal of Schedule 7. I urge the noble Baroness to withdraw her amendment.
Baroness Thornton
I thank the Minister for that reply and thank the noble Lords, Lord Lester and Lord Boswell, and my noble sister. It is actually International Women’s Day now—we are 21 minutes into it—so I thank my noble friend Lady Royall for her remarks.
We are now at the point when there is nothing much more that we can say in this Chamber, so we now need to continue our discussions. I accept the invitation to continue talking to the Minister. I beg leave to withdraw.
Public Bodies Bill [HL]
Lord Taylor of Holbeach Excerpts(13 years, 8 months ago)
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Lord Taylor of Holbeach
My Lords, before I beg to move that the House do now again resolve itself into a Committee upon the Bill, I should like to beg your Lordships’ indulgence by taking a few minutes to update the House on the work that has taken place since the Committee last met to improve this Bill.
During the Second Reading debate, I made it clear to this House that I intended to engage in an open dialogue with noble Lords throughout the Bill’s passage. I feel confident in saying that I have to date delivered on that promise. Since the last day in Committee, 11 January—which seems a very long time ago, and I am sure that noble Lords have shared my withdrawal symptoms—I hope the time has not been wasted. Indeed, it has been well used. The Minister for the Cabinet Office, my right honourable friend Mr Francis Maude, ministerial colleagues in this House and I have participated in a number of meetings with Peers from all sides of the House seeking constructive and proportionate solutions to concerns regarding this Bill. Such discussions are a crucial part of the work of this House, and I have no doubt that they will continue. I pay tribute to the positive spirit in which noble Lords, including those on the opposition Benches, have looked to work with the Government to achieve our shared objectives. As a result of this work, the Government have today laid a number of significant amendments to the Bill. I hope it will be helpful to the House if I briefly describe their effects as they are relevant to the debates that we shall be having over the coming weeks.
First, I am happy to inform the House that the Government continue to engage in constructive discussions with my noble friend Lord Lester of Herne Hill and my noble and learned friend Lord Mackay of Clashfern on the safeguards that should apply to orders made under the Bill, particularly in relation to Amendment 175, which has been tabled by my noble friend Lord Lester of Herne Hill. We intend to reach a solution that will offer further protection for the necessary independent exercise of public functions, including judicial functions, and we will require that orders made using the powers in this Bill are proportionate in their effects. The noble Lord, Lord Lester of Herne Hill, and the noble and learned Lord, Lord Mackay, are working closely with the Government to inform this approach, and I thank them for the rigorous and helpful analysis that they have brought to bear on this process.
I wish to address the overall structure and purpose of the Bill, with particular reference to Schedule 7. Noble Lords will be well aware that the Government’s policy is that all public bodies should be subject to regular review to ensure that their functions are still required and are delivered in the most effective and efficient manner. This is a goal to which the Government remain committed and one which I am sure will continue to receive support from all sides of the House. Schedule 7—and the corresponding power to move bodies between schedules, as described in Clause 11—was designed as a pragmatic mechanism to facilitate this goal by creating a means by which changes to public bodies could be made following future reviews without recourse to further extensive primary legislation.
The Government absolutely recognise that some public functions need to be carried out independently of Ministers. Schedule 7 was never intended to hinder or threaten that independence. However, it has become clear during the passage of this Bill to date that this House is uncomfortable with the nature of Schedule 7. As many noble Lords, including members of the Delegated Powers and Regulatory Reform Committee and the Constitution Committee, have made clear, it is a feeling that is strongly held by much of this House that Schedule 7 represents a significant delegation of power to Ministers and has the potential to hinder the independent delivery of public functions.
Noble Lords will, I hope, forgive me for maintaining a more positive interpretation of the Government’s intentions. None the less, I have listened with great care to the voice of this House and have taken its concerns to my colleagues in government. Indeed, the Minister for the Cabinet Office has met a number of noble Lords, who have taken the opportunity to put these points to him in person. Consequently, I can confirm to the House that the Government have accepted the arguments that bodies and offices should be listed in the schedules of this Bill only where Parliament has given its consent in primary legislation. On this basis, we intend that Schedule 7 and Clause 11 be removed from the Bill. I am therefore adding my name to existing amendments opposing the Question that the relevant clauses of the Bill stand part.
In this context, I should also inform the House that it will be necessary as a result of the removal of Schedule 7 to introduce a small number of amendments that move bodies currently listed in Schedule 7 to one or more of the remaining schedules. These changes shall ensure that all reforms announced as part of last year’s review of public bodies can be implemented. These amendments will be made at a later stage in the Bill’s passage, but I hope that the House will be assured by the fact that these moves, and the reforms to which they relate, will be scrutinised in primary legislation.
I will now reassure those of your Lordships’ House who have concerns about whether the provisions in the Bill on the transfer of functions could be used in a way that could undermine the independence of charities. I make it absolutely clear that the Government have not considered, nor would they ever consider, using the Bill to transfer functions to charities without their consent or make consequential changes to their constitutions without such consent. We continue to work with charities to ensure that that reassurance is made as explicit as possible. The reform of public bodies will ultimately help to empower rather than undermine the role of charities and the independence on which they rely.
Finally, I refer briefly to the clauses in the Bill that relate to forestry. As noble Lords will be aware, my right honourable friend the Secretary of State for Environment, Food and Rural Affairs made a Statement in the other place on 17 February, setting out the Government’s intention to end the consultation on the future of the public forest estate and to remove the relevant clauses from the Bill.
My noble friend Lord Henley will set out the Government's revised approach on this issue in greater detail later today. However, I can confirm that I have added my name to amendments to remove the relevant clauses and schedule entries to the Bill, including the regional advisory committees established under Section 37(1)(b) of the Forestry Act 1967, which is listed in Schedule 1.
Progress on this Bill to date has not always been smooth. It has certainly been drawn out longer than I had hoped. However, I take comfort in the knowledge that the expert scrutiny of this House has improved and will continue to improve the Bill. Again, I thank all noble Lords who contributed to this process. In tabling the significant amendments that I described today and following our existing amendments to introduce both a statutory period on consultation and the option for Parliament to select an enhanced affirmative procedure, the Government have demonstrated their commitment to engage with and respond to your Lordships' House. I hope, following these amendments, that we will be able to make progress on the Bill with a renewed sense of shared purpose and in the constructive spirit that characterises this House at its best. I beg to move.
Lord Evans of Temple Guiting
My Lords, I rise to speak briefly as a great admirer of NESTA, an organisation that works in an exciting and important area of our society to create a viable commercial future for science, technology and the arts. NESTA’s core objective is to combine capital investment with non-financial support to help innovative early-stage companies to turn their ideas into commercial success. These target companies, referred to as seed companies, are vital for the cultural success and economic growth of this country. Without this assistance in the early stages of development, these companies will be held back from reaching their full potential. We should all be grateful to NESTA for its part in facilitating the creative industries’ £50 billion annual contribution to the economy.
NESTA is a unique organisation with a world-class reputation. It is the UK’s leading expert on innovation and carries out some cutting-edge work with the creative industries. Let me give your Lordships three examples. Its creative mentoring programme brings together new creative businesses with successful figures in the industry to help them to grow. It has worked with the National Theatre to bring live theatre to more people through the power of digital distribution. It is also working with our fashion industry to encourage the best UK designers to work more closely with British high-tech manufacturers.
NESTA is also recognised as one of the UK’s leading organisations producing world-class research, concentrating on exploring future areas of economic growth. It has always enjoyed a greater level of independence than any other non-departmental public body because of its unique set-up. NESTA has an endowment from the National Lottery, as we have heard from the noble Lord, Lord Warner, and therefore operates at no cost to the Exchequer. In this case, moving NESTA from the public to the third sector will, in principle, allow it to continue its vital work as an early-stage seed funder and to act as a test bed for innovative solutions to some of our greatest challenges in the commercial creative sector.
In terms of detail, it would be helpful if the Minister could comment on the following points, which have also been raised by my noble friends Lord Warner and Lord Dubs. What consultation have the Government undertaken with the board and different interested groups about the change? What process will the Government use, as my noble friend Lord Dubs asked, to select and appoint trustees? The Minister may also like to inform the House, in light of the Public Administration Committee’s recent report on quangos, why this body is one of the few bodies to have been singled out for charitable status.
Lord Taylor of Holbeach
My Lords, I thank the noble Lord, Lord Warner, for introducing this amendment, and the noble Lords, Lord Dubs and Lord Evans of Temple Guiting, for their contributions, which give me an opportunity to explain how the Government see the role of NESTA. It is government policy to reduce the number of NDPBs and NESTA did not meet the Cabinet Office criteria for remaining an NDPB. However, NESTA and its activities are still considered highly valuable to UK growth and innovation. The Government are clear that they want that work to continue. That view will be widely held throughout the House.
We have no intention of winding down NESTA and its activities. Instead, the proposed reconstitution of NESTA as a charity, with its £329 million endowment held in a separate charitable trust, will allow it to continue its valuable work. Far from halting its activities, establishing NESTA as a charity preserves its ability to deliver its public benefit mission at no cost to the taxpayer. I confirm the analysis of the noble Lord, Lord Dubs, that there is no question of saving the taxpayer money in this matter, since the body is independent of taxpayer funding. We can further distance it from government and enhance its independence by making these changes. It will therefore cease to be classified as an NDPB and as part of the public sector. We have already worked closely with NESTA to develop the detail of this reform. We will seek Charity Commission approval for the proposed new model. This model builds on that successfully used by the Millennium Awards Trust, which similarly derived much of its funding from the National Lottery. We want to build on that model.
Once NESTA becomes a private sector charity, the Government will no longer select or appoint the trustees. The separate charitable trust, which will be created to hold the endowment in the public sector, will have a protector. The intention is for the protector to be appointed by Ministers and for NESTA the charity to be the trustee of the trust. The role and powers of the protector are yet to be defined but they will be based on the Millennium Awards Trust model. This is a very positive step that is being taken by the Government. We firmly believe that this model represents an opportunity for NESTA to continue its success. However, we also believe that NESTA’s current status as an NDPB is by no means a prerequisite for it to continue to flourish. Establishing NESTA as a charity is part of the Government’s wider commitment to hand power to the big society and not simply to rely on central bureaucracy to control public life. The Government’s proposed model reflects this objective while safeguarding the public interest in the large endowment managed by NESTA.
I have been asked by many noble Lords about the nature of the discussions that we have had with the Charity Commission. There was an initial discussion with the Charity Commission last December and there has been an exchange of correspondence since then. This is designed to ensure that the objects of NESTA are charitable. BIS and NESTA itself have carried on these discussions. They are positive and we are confident about their outcome. While there have been no public consultations, officials worked closely with NESTA’s senior management team to develop the charitable option and NESTA consulted informally with its board of trustees, which is supportive of the change in status. NESTA also consulted several key stakeholders. Its staff were informed on 14 October 2010, following the Government’s announcement on public bodies reform. Since then NESTA has held regular meetings with staff to inform them of the transitional process and provide the opportunity to address any questions or concerns that they had.
In a statement released at the time of October’s announcement, NESTA’s chair, Sir John Chisholm, said that the board welcomed the decision and described it as an extremely positive move for NESTA. The statement also contained endorsements from Sir James Dyson and from Sir Stuart Etherington, chief executive of the National Council for Voluntary Organisations. Since then, NESTA has written to key stakeholders and engaged with the public via its website and social media sites, giving details of the proposed transition and welcoming any questions regarding the change in status. In the light of these considerations, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Warner
My Lords, I am grateful to the Minister for his full explanation. I am still just a shade puzzled as to what will happen if the Charity Commission does not accept that the purposes defined by Parliament meet its requirements as to a charitable purpose. Many of those purposes defined by Parliament have at their heart economic development. Before the next stage, so that we can be absolutely clear, I would like more assurance from the Minister, perhaps in writing, that there is not going to be a slip between cup and lip over this that would damage NESTA and the work that it does. On the basis of an assurance in that area, I beg leave to withdraw my amendment.
Lord Taylor of Holbeach
My Lords, perhaps I should start with the question posed by the noble Lord, Lord Bichard. I hope that he will allow me to write to him, because the question extends somewhat beyond the brief I have on this particular body; but it points to the complexity of the reform of public bodies and why this has not been a particularly easy process.
The proposal today affects two government departments as well as the Cabinet Office, so it is frequently quite complex. However, there is a desire across government to achieve reform of the public body sector which I think is widely shared in this House. I assure the noble Lord, Lord Rosser, that I am always ready to learn from the noble Lord, Lord Faulkner of Worcester, and I have been greatly informed about the work of the Railway Heritage Committee as a result of the dialogue that I have had with him. I join in the tributes paid across the House to the work that the noble Lord did during his period as chairman of the Railway Heritage Committee. I thank him for the energetic and positive way in which he has reacted to the Government’s changes and for what he has done to bring about what I hope will be a satisfactory outcome.
I hope that the noble Lord will understand when I say that the committee’s appearance in Schedule 1 does not reflect on the distinguished service that he and his members have given to the committee over the years. The committee’s current powers are to apply a statutory designation to rail-related items of heritage interest.
The noble Lord’s amendments would move the committee from Schedule 1 to Schedule 5. They would therefore allow the committee’s powers to pass to another body while it retains its status as a public body. I understand the noble Lord’s desire for the committee’s powers to be retained, for example under the National Museum of Science and Industry, which operates the National Railway Museum—and I am delighted to hear of his involvement in that—but he should be aware that that would best be achieved by the RHC remaining in Schedule 1 and the powers being transferred at the time that the RHC is wound up.
The need to reduce the cost of government is an important consideration, but it is not the only one. The review of public bodies that took place last year began by asking whether a function needed to be carried out at all and, if so, whether it was appropriate for it to be carried out by a public body. Our analysis recognised that the railway industry already had a long and proud record of preserving its heritage, and I pay tribute to the industry itself and to the flourishing voluntary railway heritage sector for that undoubted success. Our proposal to abolish the RHC did not imply that we have no interest in railway heritage or that the good work that has already taken place would not be supported by other means. On the contrary, the Government are very sympathetic to rail heritage, and the spending review settlement for the DCMS will ensure our continuous support for the National Railway Museum. I know that the NRM and its parent body the National Museum of Science and Industry will want to engage actively to support the work of the railway industry and the voluntary railway heritage sector.
In the context of the review of public bodies, the question for the Government is therefore not only whether we can justify the cost of the committee but whether we can justify retaining a statutory power of designation in a field where there is already an impressive voluntary record of preserving the industry’s heritage. The noble Lord has presented his arguments in a positive way and they have led to further discussions within government. We see merit in the proposed transfer of the RHC power of designation to the board of the trustees of the Science Museum, the legal entity which stands behind the National Museum of Science and Industry. Positive discussions on the detail are continuing. Noble Lords will know that I am personally committed to supporting further discussions and continuing to engage with the noble Lord on his proposals. In those circumstances, and in view of the fact that his amendment would not in any case be the best means to achieve his desired goal, I hope the noble Lord will feel able to withdraw his amendment to allow the use of time between now and Report to take these positive, detailed discussions forward, and we will update the House at Report.
Lord Faulkner of Worcester
My Lords, I thank all noble Lords who have contributed to this short debate. I am a little overwhelmed by the compliments paid in one or two quarters to me on this, but this has been a collective effort by a lot of people who care about railway heritage and railway heritage preservation. Above all, I want to pay my own tribute to the Minister for the generous and gracious way in which he has listened and been willing to accept the arguments that have been put to him. The most important thing that he has said—and this is the change in government policy—is that the Government now accept that there needs to be statutory protection for railway heritage. They did not accept that, and the Department of Transport did not accept that, in the initial press release last autumn when the committee was included in Schedule 1 to the Public Bodies Bill. I accept completely his point that my amendment will not be necessary if the Government are able to come forward at Report with alternative arrangements. On that basis, and on the understanding that he has expressed today and the agreement that we have already reached and will continue to discuss, I am very happy indeed, if the Committee agrees, to withdraw the amendment.
Public Bodies Bill [HL]
Lord Taylor of Holbeach Excerpts(13 years, 11 months ago)
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Viscount Eccles
We seem to concentrate only on whether something saves money, but the public are not interested only in saving money. They believe they are over-governed, that there is too much regulation and too much interference in their lives, and that there are too many bodies carrying out functions which most likely could be carried out better somewhere else. They want to see the system simplified, and I believe that this House should remember, when they are discussing these matters, that it is not only a matter of money; it is also a matter of making life less complicated.
Lord Taylor of Holbeach
My Lords, I am pleased to move on to this series of amendments, and I will first turn to the Aircraft and Shipbuilding Industries Arbitration Tribunal. This was set up under the Aircraft and Shipbuilding Industries Act 1977 and related to the nationalised industries in aircraft manufacture and shipbuilding. These nationalised industries no longer exist and the tribunal is redundant. Similarly, the purpose of abolishing British Shipbuilders as a corporation is to simplify the administration of the funding and handling of British Shipbuilders’ residual liabilities. These liabilities will be transferred directly to the Department for Business, Innovation and Skills, which will provide a long-term solution to managing these liabilities.
The Government are committed to making compensation payments to former employees of British Shipbuilders, and I can give an indicative figure of the level of those compensation payments. They come to about £7 million a year. I hope that helps. The tribunal itself does not cost anything, as there are no standing costs and it does not have any employees. The compensation payments for former employees cover such injuries as mesothelioma, which were the result of their employment with British Shipbuilders. The payments are in line with the obligations that British Shipbuilding had to its employees.
British Shipbuilders Corporation was set up under the Aircraft and Shipbuilding Industries Act 1977. The corporation has no active trading operations and exists solely to meet its residual liabilities—litigation, insurance claims and other contractual matters— relating to its former employees. British Shipbuilders is effectively a shell company. In light of my assurances, I hope the noble Lord will feel able to withdraw his amendment.
Lord Rosser
I am not entirely sure whether the Minister was also replying to Amendment 24 as well as Amendment 22. Amendment 22 is about the Aircraft and Shipbuilding Industries Arbitration Tribunal, which is the one that hears appeals over valuation in relation to the nationalisation of the aerospace and shipbuilding industries. As far as I understood it, we were dealing with Amendment 22 separately. It seemed to me—though I am obviously prepared to stand corrected—as though some of the comments that the Minister made related to Amendment 24, which is about British Shipbuilders and any subsidiary of that company. I did raise a number of points—
Lord Taylor of Holbeach
I did speak to Amendment 24 because my speaking notes represented a grouping which is not current, and I apologise to the noble Lord. Perhaps he will confine himself to my response in respect of the tribunal, because that is what he was speaking to. I apologise.
Lord Rosser
I was not entirely clear about what the Minister said. He did say that it was moribund, so do I take it that the answer to my question as to how many times it met in each of the past three years is that it has not met at all? Is it the case that, despite the comments made by the noble Viscount, Lord Eccles, no costs are being incurred by this body, because it is moribund and it has not met?
Lord Taylor of Holbeach
I confirm that is the case. It does not cost anything, there is no standing cost and it does not have any employees.
Lord Rosser
I thank the Minister for that clear response and I beg leave to withdraw the amendment.