Economic Activity of Public Bodies (Overseas Matters) Bill

Lord Deben Excerpts

Committee stage
Wednesday 17th April 2024 Lords Chamber

[The Lord Bishop of Manchester]

My Lords, I shall speak in favour of Amendment 54, to which I have added my name. I also support the other amendments in this group. I listened carefully to the previous debate. As other noble Lords have noted, there is a strong overlap between this and the previous group.

Again as others have said, my concern is that, before we pass this Bill, we get clarity on who it covers. I declare a particular interest in that those of us on these Benches, along with other diocesan bishops of the Church of England, do carry out public functions. From time to time, these might bring an individual, in our corporate capacity as bishop of a diocese, within whatever definition of a public body or authority we might eventually land on.

In responding to an earlier group debated before the Recess, the Minister referred to the fact that mayors, police and crime commissioners—and, indeed, Government Ministers—also exercise public functions and hence fall under the scope of the Bill. However, since what these officeholders have in common is that they are elected or appointed primarily to exercise political functions, I can see the logic that maybe they should not use their investment and procurement functions in order to pursue a foreign policy in contrast to that of His Majesty’s Government. Notwithstanding the fact that some diocesan bishops are members of your Lordships’ House, is it really intended that we, along with the small charitable funds for which we are responsible in our corporate personality, should fall under the scope of the Bill? If we place those modest charitable funds with an external investment body, do we have constantly to ensure that that entity does not at any point seek to make restrictions in contravention of the Bill, by investing our money where it should not be—or not investing it where it ought to be?

Other Church institutions are at potentially greater risk of being inadvertently caught up in the scope of the Bill. Noble Lords will be familiar with the Church Commissioners, the body that manages the historic endowments of the Church of England, for the furtherance of the mission and ministry of the Church in perpetuity. It was my great privilege to chair the commissioners’ board, until the end of last year, as the delegated deputy of my most reverend friend the Archbishop of Canterbury. During my tenure, we grew our reputation, alongside our sister pensions board, as being among the world’s leading ethical and responsible investors.

As noble Lords well know, the commissioners require parliamentary approval to spend capital. Indeed, I spoke before the Easter Recess when we brought just such a measure before your Lordships’ House. What noble Lords may not know is that six state officeholders, including the Prime Minister and the Lord Speaker, are ex officio Church Commissioners, notwithstanding that the Government make no contribution to the commissioners’ coffers. Noble Lords will have noted a plea there. The ability of the commissioners’ investment team to deploy assets in furtherance of our mission objectives is not a case of anyone taking taxpayers’ money and using it to pursue their own independent foreign policy, yet, on some readings, these Church bodies may be seen as being within the scope of the Bill. Can the Minister clarify whether such bodies are indeed in scope?

Beyond the Church of England, there are many religious, charitable and other foundations—across a variety of faiths and of no faith—which perform functions in areas such as education. We have heard that referred to before. I am a grammar school boy. I benefited from a scholarship. My widowed mother could never have paid school fees. Such bodies raise and hold endowment funds for such purposes in order to enable students and pupils from less well-off backgrounds, like mine, to fully access and benefit from their services. I know that goes on because I am regularly invited to donate.

What is true of schools is even more true of the endowment funds of universities and colleges. Let us suppose that such an institution receives an offer of funds from a private philanthropist in the UK or beyond who wishes to make some stipulation as to where the endowment may or may not be invested. This is private money. Would this Bill mean that the foundation has to refuse the money, not because the country that it wishes to boycott is already on the list but because it may come on to a subsequent list at some future date?

The simplest way out of this confusion is for the Bill to contain either a schedule of the types of bodies to which it applies, as in the amendment in the name of the noble Baroness, Lady Chapman, to which I have added my name, or to use a definition that points to a well-defined list in existing legislation. The noble Baroness, Lady Noakes, offered that earlier today in the previous group. The advantage of requests under the Freedom of Information Act is that they are ubiquitous and long-standing. I know because I get them all the time and turn them down because they do not apply to me. As we have already heard, this means that most institutions are now very clear as to whether FoI applies to them. The same cannot be said for other definitions, even those contained in the Human Rights Act. So, in responding to this debate, can the Minister let us know how His Majesty’s Government are going to provide the clarity over scope that will be essential for this Bill to become a workable Act?

[Lord Deben (Con)]

My Lords, I declare an interest in the sense that my wife is a trustee of a major public orchestra. It does not receive public money, but I just make the point: if you do not receive public money, are you one of these public bodies? If you do, do you become one, and does that mean that you make a choice, which is quite a serious choice?

I also declare an interest because in my business we advise people on procurement and sustainability of procurement. I say to my noble friend that procurement is a very difficult issue on which to advise, because it is very widespread. What does it mean? It means almost everything from what might be called lavatory rolls at one end to procuring very large numbers of services or products. It can also cover the issue of the orchestra that procures another orchestra from abroad. As the noble Lord, Lord Boateng, said, it might have intended to bring an orchestra from, let us say, Russia to this country; if it then decides not to do so, is that the kind of decision that comes under the Bill?

I also have a concern, as the noble Baroness put forward, that the Secretary of State has an ability to remove from the exceptions things that for most of us are really important. If we are not to be allowed to procure on the basis of sustainability or climate change—things that really are existential issues—we have a serious problem, because on any definition of public bodies, the very bodies we are talking about are the ones that ought to be procuring and investing on those bases. The idea that this is only temporary, that it is in the Bill but can be removed by the arbitrary decision of the Secretary of State—and it could be arbitrary, because there is nothing in the Bill to say it is other than arbitrary—worries me considerably.

I rose not just to say that to my noble friend. I am afraid that the Government have a record of producing Bills that do not appear to have been carefully thought through. If the Bill had been produced to me as Secretary of State for the Environment, I would have sent it back and said, “There are too many questions in this, and I don’t want to have to present it to either House of Parliament because I can’t answer a number of the questions”. I do not blame my noble friend for not being able to answer some of these questions, but they are pretty fundamental, are they not? I just wonder what the Secretary of State responsible for the Bill said when it was brought in front of him. Did he ask what the definition of public body is or what a public function is? If he asked those questions, did he get answers? If he got answers, were they satisfactory, and why do we not have those answers when the questions are asked on the Floor of the House?

My worry is this. Out there large numbers of bodies, some of them very small, are worried that this will affect them. I do not believe that kind of legislation does us any good at all. Precision is absolutely crucial here, and we need to restrict this to a very clear, relatively small number of bodies and have a very clear understanding as to what it means.

If we take sporting bodies receiving government money—I cannot claim to be a sportsman and I declare no interests whatever on this front—it seems to me that if individual sportsmen wish to boycott something, the sporting body probably has to discuss that. If a body discusses that, it seems to me that under this Bill it can easily get itself into a position in which that is improper, if not illegal. Again, I do not see why people should have to ask themselves this question.

We are, at the moment, seeing a very inelegant discussion about individuals’ decisions on tax matters, pretty unfairly in most cases I have heard. It is difficult to understand quite a lot of the detailed tax legislation, but producing this legislation will ask a whole lot of other people to understand very detailed and extremely difficult concepts. I say to my noble friend that all I want is to feel that I could vote for something that I understand, and that other people can understand, which does not reach beyond the necessary areas and actually achieves some good. Those are three perfectly reasonable requests, but I am not sure that the Bill meets any of them so far.

[Lord Warner (CB)]

My Lords, we are dealing with a Bill that is in highly controversial territory. If we have sloppy definitions in the Bill, it will encourage litigation. It would be a strange thing if we passed a Bill with a lot of problems around definitions that causes, over time, more people to raise issues around sources of investment through the courts. With all due respect to the Government of Israel, from time to time they have shown quite an enthusiasm for using litigation to make their points.

Also, picking up from the last group of amendments, we live in a rather different time in terms of who raises money for public services, particularly capital money for investments. If we take health and care, the areas I know something about, there is a lot more interest in the idea of going into the private sector—private equity and PFI being good examples—to try to raise money to build facilities of some kind or another for which the public sector has found it difficult to find the money. People who raise funding and use it to provide public services perform a kind of public function. If we have a sloppy Bill, they leave themselves exposed to probing of where their sources of money come from. You then run the risk of driving these people away from the kind of investments in public service that we may need to get some of our old capital structures improved over time. I suggest to the Committee that if we do not tighten up these definitions, we run a series of risks that are self-defeating to any Government.

--- Later in debate ---

[Baroness Neville-Rolfe (Con)]

It seems to me that the issue here is boycotting a sporting event, and that is not a procurement or investment decision—but I have already undertaken to look carefully at these individual examples, because we all want to understand exactly what we are talking about and to come to the right outcome.

Amendment 24 would carve out community interest companies. While it is not inconceivable that a community interest company might perform a public function, neither the purpose nor the structure of a community interest company naturally lends itself to that. It is not, by and large, what the Bill is designed for.

Amendment 22 seeks to probe whether schools and early years providers, such as nurseries, are in scope of the Bill. I can confirm that all publicly funded schools will be captured by the ban when they are performing public functions, and some early years providers will also be public authorities on that definition. Other early years providers may be captured to the extent that they are performing a public function. However, I will take noble Lords’ concerns on that issue away, because I think it comes into the same category as the other two examples we will be looking at.

Privately funded independent schools—and I think this will probably apply to private universities—will be captured to the extent that they perform a public function. However, they are unlikely to perform functions of a public nature in scenarios where they are captured as hybrid public authorities, which we discussed on the previous group. The ban will ensure that publicly funded schools remain shared spaces for all, and the Bill will ensure that schools and early years providers can remain focused on their core duties, rather than being distracted by divisive campaigns promoted by BDS and others.

[Lord Deben (Con)]

If a Church of England or Catholic school says it will not buy from a country that is persecuting Christians, that is concentrating on its core responsibility. It is not avoiding it; it is what it is there for, which is to uphold the faith. Are we really going to dictate whether or not it should make that decision?

[Lord Roborough (Con)]

My Lords, the Minister has an advisory speaking time of 20 minutes. May I respectfully suggest that we leave any further interventions until the end to allow the Minister to answer as many of the existing questions as possible?