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

Debate between Gareth Thomas and Richard Fuller

Monday 9th September 2013 Commons Chamber

[Mr Thomas]

I fear that my hon. Friend’s intervention strikes a chord. I will come on to some of the points made by the Association of Professional Political Consultants shortly. Gavin Devine, the chief executive of one of the big lobbying firms, says that

“there is a risk that the register will give a kitemark or endorsement to some who do not deserve it.”

I read the APPC code of conduct, to which my hon. Friend has just referred, with interest. One key element is that

“practitioners”—

lobbyists who have signed up to the code—

“must use reasonable endeavours to satisfy themselves of the truth and accuracy of all statements…by or on behalf of clients to institutions of government.”

I struggle to understand why Ministers would not want to ensure that all consultant lobbyists ensure their clients tell the truth to them. A code of conduct with such a provision, properly policed, would help to raise the bar—raise the standards—of the whole industry, rather than just those who subscribe to the APPC code.

Consultant lobbyists who sign up the APPC code are expected to be open in disclosing the identity of their clients and must not misrepresent their interests. Having a code of conduct with such a provision would help to ensure that Ministers and MPs would know who was trying to meet us and allow us to explore whether there were other motives for consultant lobbyists asking for information or advocating particular causes. It seems hardly unreasonable for such a basic standard of behaviour to be expected of all lobbyists covered by the legislation.

The APPC code requires practitioners to have a duty to advise their clients if they think they are about to commit illegal or unethical acts. They have a duty to refuse to act for such a client if the client persists. It is surely not unreasonable, and not too burdensome on the consultant lobbyist, to expect lobbyists to be able to abide by such a requirement in a code of conduct. Ministers need to explain why such reasonable requirements are so burdensome that they cannot be included in a code of conduct, or why they do not think we need to uphold, or ask consultant lobbyists to uphold, such basic standards of behaviour.

[Richard Fuller (Bedford) (Con)]

Before the issue of burden is appropriate, there comes the question of efficacy, and a comparison between self-regulation in a code of conduct and a Government-managed code of conduct. What evidence can the hon. Gentleman bring to say that a Government-managed code of conduct is better than a peer group trying to maintain the integrity of their business?

[Mr Thomas]

The advantage of a statutory code of conduct is that it covers everybody. The problem with a voluntary code of conduct is that it covers only those who choose to submit themselves to it. Given the concerns about the lobbying industry—some of them unfair—surely it makes sense to have a code of conduct that everybody signs up to, after proper consultation, so that we achieve a basic standard of behaviour.

[Richard Fuller]

I appreciate that point, but one could argue that with an industry-based code of conduct to which people can voluntarily associate, peer group pressure and recognition will arise from people coming together to say, “We are approved in this way”. In some ways that might be a superior alternative to a Government registrar that is open to burdensome bureaucratic processes where, by the time they are resolved, people do not know what the issues are. In an area such as this, which is so open to public scrutiny, and the scrutiny of MPs and others, the pressures on a voluntary code would surely be even greater than they are for many other sectors of the economy.

[Mr Thomas]

I hear the point the hon. Gentleman makes, but I am sure he will have realised in the course of his research for this debate that there is not just one voluntary code prepared by the APPC, but a number. Although one must commend the efforts of the individuals who have initiated such codes, along with the firms and individuals who have signed up to them, surely it makes sense for everybody to sign up to one clear code of conduct, so that everybody knows what the basic standards are and nobody can be confused about whether certain principles apply in one code of conduct or whether a particular lobbyist is subscribing to another set of principles. That would create clarity for the consultant lobbyist and their client—and for us as the House, therefore—about what is expected of those who seek to engage with us.

Small Charitable Donations Bill

Debate between Gareth Thomas and Richard Fuller

Tuesday 4th September 2012 Commons Chamber

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

It is a pleasure to follow my hon. Friend and constituency neighbour, the Member for Brent North (Barry Gardiner), whose contribution reflects today’s interesting debate. We started with the Economic Secretary’s opening speech, during which there was a series of interesting interventions. The Chair of the Public Administration Committee, the hon. Member for Harwich and North Essex (Mr Jenkin), made a series of interventions, one of which dealt with the need to build into the legislation easy scope for a review of its effectiveness. As my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson) made clear in her opening remarks, we need to make every effort to ensure that the primary legislation is as strong as possible. The hon. Gentleman made an interesting point. He has developed a reputation as an assiduous— and, for the Government, troublesome—Chair of the Committee. In the eyes of his Whips, that may rule him out of serving on the Public Bill Committee, but his comments were a helpful guide to amendments that we might want to think through.

In her intervention on the Economic Secretary, the hon. Member for Congleton (Fiona Bruce) highlighted a concern that has clearly been put to her: whether, because of the way the clauses on community buildings have been drafted, hospices will benefit from the Bill as much as had been hoped. The hon. Member for Dartford (Gareth Johnson), in the first substantive speech in the debate, made a point of praising the Arrow riding centre in his constituency. It does indeed sound an excellent organisation, and in that sense probably reflects the many excellent organisations that each of us in this House can point to in our communities. They benefit our communities and make them stronger, particularly because of the enthusiasm of the volunteers and original sponsors of these charities.

Our challenge is surely to try to do what my hon. Friend the Member for Clwyd South (Susan Elan Jones) suggested: to simplify the system as much as possible and to enable those with fire in their belly—those behind a particular charity with the passion and commitment—to benefit as much as possible from this legislation. She has clearly been working throughout the summer recess, carrying out extensive research on charity debates and tracking down the first ever discussion of charities in the House of Commons, more than five centuries ago. That is a particularly impressive piece of work that I suspect puts the rest of the House to shame. It is not surprising, however, given her track record of interest in this sector.

In his short time in the House, the hon. Member for Warwick and Leamington (Chris White) has already built a track record of interest and enthusiasm in this subject. He urged Ministers to pay close attention to the comments and concerns of the National Council for Voluntary Organisations and the Charity Finance Group. He raised a particular concern about whether the three-year HMRC rule is quite as necessary as the Economic Secretary suggested in her opening remarks. He went on to argue that Leamington is the most generous town in Britain. He is stretching the credulity of the House there, if I may say so; nevertheless, it sounds almost—but I suspect not quite—as generous as Harrow.

The hon. Member for Stafford (Jeremy Lefroy), who has already established a strong record in this House in working with international development charities, outlined his support for the Bill. He will recognise that people in this country rightly respond to disasters around the world, and that the Bill could enable such charities to do more to make their money and effort go a little further.

The hon. Member for Banff and Buchan (Dr Whiteford) emphasised that Ministers should do further work on the detail behind the Bill, and I understand that she has a strong track record of working with charities, including development charities. Among the many thoughtful points she raised was whether or not HMRC might be persuaded to use marketing or analytical tools to provide further support to ensure that charities benefit as much as possible from this legislation, when both Houses eventually conclude their debates.

My hon. Friend the Member for Foyle (Mark Durkan) outlined his scepticism about the Bill being perfectly formed. He made the perfectly proper point that debate with the Northern Ireland Assembly on some of the detail is required. Again, Ministers and the Committee will need to have further conversations with the representatives of the sector to maximise the Bill’s benefit.

The hon. Member for Milton Keynes South (Iain Stewart) praised another excellent sounding organisation, Community Action Milton Keynes, which he knows well. He raised concerns about the three-year rule on eligibility, highlighting the need to get right the balance between preventing fraud and helping more charities to benefit. He hoped that today’s discussion is part of an “evolutionary” approach by Ministers, and I hope to encourage the Minister to take such an approach. My hon. Friend the Member for Brent North, in his substantive remarks, emphasised the concern of all Members about the eligibility criteria in the Bill and whether as many charities that rely on small donations will benefit from the Bill as might do.

As my hon. Friend the Member for Kilmarnock and Loudoun made clear, the Opposition will support the Bill, but we have a series of concerns about its detail, which she set out and which I will touch on briefly at the end of my remarks. The House will of course be aware that the Bill’s proposed changes to gift aid build on the reforms that my right hon. and hon. Friends introduced under the previous Government—my hon. Friend the Member for Clwyd South made that point. My right hon. Friend the then Chancellor had an excellent track record of enabling smaller charities to benefit from gift aid, introducing a less complex audit process and helping at least some charities to get a proper advantage from the various changes that he introduced.

We will want to probe and challenge the complexity that has been written into this scheme by Ministers, which has been highlighted to us by the NCVO, the Charity Finance Group, the Institute of Fundraising, the National Association for Voluntary and Community Action and a series of other groups. I, like a series of other hon. Members, alluded to the fact that this complexity risks ensuring that a number of small charities miss being able to benefit from the changes implicit in these arrangements.

Ministers have highlighted this measure in the past as a big source of help for charities and proof of their ongoing commitment to the big society. The Chancellor made that point in one of his Budgets. In truth, this is a modest Bill, which risks being far more modest than it needs to be. It is, sadly, an isolated gesture of help amid a dismal funding and contracting environment for charities, entirely of the Government’s making. The Bill will, nevertheless, put back into charity coffers a small amount of the income that Ministers have collectively axed since they came to power.

The context for this debate is grim, as a number of hon. Members have said, and it bears spelling out as a reminder to the whole House and, in particular, to the Committee to do our utmost to maximise the benefit of the legislation to the maximum number of charities. As my hon. Friend the Member for Clwyd South mentioned, earlier this year the NCVO highlighted the “toxic mix of circumstances” facing charities: increasing demand for their services, rising costs, and an unprecedented fall in income. The NCVO argues that Government spending on the sector will fall by some £3.3 billion between the coalition’s taking and eventually leaving office.

A report by the Association of Chief Executives of Voluntary Organisations, which was commissioned by the Government—by the Cabinet Office—and which Ministers were eventually forced to release, revealed that charities would lose, in 2011-12 alone, at least £1 billion as a direct result of Government cuts, with two thirds of the charities most at risk of suffering being in the most deprived areas of Britain.

[Richard Fuller]

In a comment in his opening inquiries of the Minister, the hon. Gentleman referred to the transition fund and he is now referring to the same point about Government funding, so I would just like to pick up on the point. Does he accept that one of the underlying philosophical differences with this Bill is that it is using Government money to support the actions of individual citizens in supporting the charities they wish to help, rather than looking at charities as an extension of the state that should be supported by public moneys? Although there may be an issue to address about the quantum and how much we can afford to put into these charities, does he accept that this is a wise way for the Government to spend their money?

[Mr Thomas]

With the greatest respect, the previous Government and the one before had exactly the same approach. The difference between us is over the scale of the funding cuts that the hon. Gentleman and other Government Members have signed up to. As I said in my opening remarks, I accept that the Bill will make a small positive difference. We welcome it on that basis and we want to work with Ministers and, indeed, with all hon. Members to try to maximise its benefit. He does not serve his cause well by minimising the scale of the cuts which charities are suffering. According to the National Children’s Bureau in April, two thirds of children’s charities had cut staff last year and reduced the range of services they offered, with 25% expecting to have to close this year. That grim direct funding situation is hardly a sign of a commitment to charities and community groups, or indeed of Ministers’ professed commitment to the small platoons or the so-called big society.

I say gently to the House that not one of the more than 140 charities I have met over the past 12 months has said that reform of gift aid is the defining answer to the problems the Government are causing charities, despite the Chancellor’s enthusiastic claims in the Budget. Ministers, notably Cabinet Office Ministers, have failed in the past 12 months to offer serious heavyweight leadership in Whitehall for charities. The Work programme has become an iconic example of charities losing out on funding because of poor commissioning of major Government contracts.

Let us consider the example of just one charity, St Mungo’s. Given its skills at getting people in the most challenging circumstances back into work, one would have thought it was the perfect participant in the Government’s Work programme. However, having had no referrals in just under 12 months, St Mungo’s finally called it a day earlier this summer. You couldn’t make it up: record long-term unemployment, a Work programme that is not exactly going all guns blazing and a charity with huge experience not being used —not even once.

We have, of course, also seen charity after charity having to line up to demand that the Government withdraw their charity tax relief cap. For example, Cancer Research UK is seriously worried about donations to build a world-class centre drying up because of Ministers’ incompetence. It was a badly bungled Budget measure from Treasury Ministers—one of a number. One of the arguments originally used to try to justify that measure, until it was eventually pulled, related to the problem of “dodgy charities”. Although the Economic Secretary veered a little towards such language in her opening remarks, she certainly did not repeat that mistake. However, we need to be careful that the requirements that we set out in the legislation that is finally passed do not allow people to think that Members in all parts of the House share the concern that there is a huge problem with poorly managed charities engaged in fraud. We will certainly wish to probe her argument about the three-year relationship with HMRC that charities must have in order to benefit from the Bill.

We debate this Bill in the context of a dismal picture of substantially reduced charity funding and of Treasury Ministers who need to make amends for the charity tax relief debacle. The Bill nevertheless deserves a Second Reading and further robust scrutiny. We will want to explore carefully the Government’s arguments on a series of clauses, particularly to try to reduce the complexity of the new arrangements, which has been highlighted by the likes of Sir Stuart Etherington, Peter Lewis, the chief executive of the Institute of Fundraising, and NAVCA. Let me take just one set of comments as an example: NAVCA called the proposed system “overly bureaucratic” and “out of proportion”.

To be fair, the Economic Secretary hinted that Ministers would be flexible in Committee. I hope that her ministerial colleague will emphasise that Ministers are determined to be flexible and to see the discussions in Committee as an evolutionary process. That point was made by the hon. Member for Milton Keynes South in particular. We will want to probe the concerns about the eligibility criteria as there is particularly wide consensus outside the Treasury among voluntary groups that many charities will miss out if the Bill goes through unamended in that regard. We will want, too, to explore the thinking of Ministers on the connected charities rules, which risk creating an unnecessary barrier to recruiting high-quality trustees if they have similar roles in similar organisations.

On community buildings, there is a risk that some charities could lose out, as other Members have highlighted. Ministers would be wise, given the scale of the Government’s failure to help and support charities, to recognise the limited scope of the Bill. It is a worthwhile Bill with the potential, if Ministers are open-minded, to offer even more significant benefits. It builds on the reforms Labour introduced when we were in power. It needs amending in Committee, and Committee members, particularly Ministers, will need to show further flexibility to maximise the benefit it could have for the charity sector. We will support the Bill tonight and I commend it to the House.

Public Services (Social Value) Bill

Debate between Gareth Thomas and Richard Fuller

Friday 25th November 2011 Commons Chamber

[Mr Thomas]

I have not, but the explanatory notes prepared by the hon. Member for Warwick and Leamington for Second Reading contained an assessment of the cost, which, if I remember rightly, was approximately £41,000.

Many social enterprises clearly have a strong trading and enterprise ethos, but most have required start-up finance or transitional funds, or funds for specialist advice. For voluntary sector organisations wishing to become social enterprises, strong grant income can help to provide a cushion allowing a business model to be properly developed. If there is no clear, thought-through process to make appropriate funding available, the huge cuts in Government funding for the third sector may not only put at risk the services provided by voluntary and civil society groups on which so many of our constituents rely, but hold back the growth of the social enterprise sector.

It is, I would gently suggest, not enough for the Government to talk about a strategy for social investment. I do not doubt the Minister’s commitment to growing the market for social finance, and the Government’s interest in social impact bonds and support for the big society bank—both Labour ideas—are welcome, but when those initiatives are set against the scale of the cuts in direct funding from national Government and, as a result, local government, there seems to be little hope that the social finance market will have grown sufficiently robust to replace the estimated £3.2 billion—possibly as much as £5.1 billion—of direct funding that will be lost. That estimate of the potentially huge loss to the third sector over the coming comprehensive spending review period was provided by the independent analysts New Philanthropy Capital.

[Richard Fuller (Bedford) (Con)]

I am listening to the hon. Gentleman’s speech with great interest. He is making a point not only about the need for a strategy, but about the impact of cuts in the near term. Does he agree that, in essence, the Bill in its present form retains the opportunity to support social enterprises, and that the Social Enterprise Coalition and other leaders of social enterprises support it?

[Mr Thomas]

The hon. Gentleman makes a valid point when he says that the Bill, although its scope is substantially restricted, offers some opportunity for progress to be made in support of social enterprises. The Opposition welcome and support that, but, as my right hon. Friend said, this Bill provided the Government with an opportunity to be far more ambitious in scope, and it is a tragedy that the Minister has not been able to persuade his colleagues in Government to support the more far-reaching measures.

New Philanthropy Capital has assessed the funding situation facing the voluntary sector in the coming years. It noted how the scale of the cuts would be far too big for public foundations or other forms of philanthropy to be able to compensate for, and also noted that charities funded by local authorities, which will bear particularly heavy cuts, are at great risk. The Minister will not, I suspect, be surprised by these difficulties facing the third sector, especially those resulting from the Government’s cuts on local authorities. This is yet another example of their cutting public spending too far, too fast. I am sure the Minister will know about the cuts at Hillingdon Community Transport, Hillingdon Law Centre, Hillingdon Arts Association and Hillingdon Women’s Centre. Those are just a few examples of local organisations that are being affected by the coalition’s economic strategy.

Social enterprises that trade directly with the public are all too aware of the extremely difficult trading environment on the high street. The latest news, which came out today, is that Sir Philip Green is having to axe a whole series of shops. That proves the error of the Government’s economic strategy, and if his business is facing such difficulties, it is unsurprising that social enterprises that trade with the public are also experiencing falling incomes. The crisis facing the economy, and therefore the circumstances facing social enterprises trading with the public, are yet another reason why the Chancellor should consider introducing a temporary cut in VAT and adopting the plan B proposed by the shadow Chancellor, my right hon. Friend the Member for Morley and Outwood (Ed Balls).