Public Bodies Bill [Lords]

Lord Harrington of Watford Excerpts

Tuesday 12th July 2011 Commons Chamber

[Richard Harrington (Watford) (Con)]

The hon. Member for Birmingham, Erdington (Jack Dromey) mentioned the tragedy of the Morecambe bay cockle pickers and, in his opinion, the disastrous consequences of losing the GLA and other organisations in rural England. However, I do not understand Opposition Members and members of the previous Government. They have spoken a lot about saving money from quangos. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) spoke of £500 million, which the shadow Minister, the right hon. Member for Dulwich and West Norwood (Tessa Jowell), confirmed earlier. On the one hand, Opposition Members accept that we need to cut because money is being lost, yet almost every organisation that is mentioned seems to be a front-line service that it would be a disgrace to remove. I find that a difficult contradiction.

I must tell the House—and in fear of Opposition Members’ mirth—that I have not worked in a quango or experienced them on close terms. However, I do know about organisations. Organisations, be they in the private sector, the public sector or the quasi-public sector, have certain things in common. One is that they all started with perfectly good intentions, but they have a habit of growing like Topsy, until they get to the stage when people think, “Well, how can we possibly do without them?” That happens a lot in the private sector, and it has clearly happened in the public sector. Whether we are talking about new management in a business or a new Government running the country and the public sector, the feeling is the same: when times get difficult, measures have to be taken to reduce the number of organisations. It is well known in management, and there is management speak for it—management cuts, rationalisation and so on. There seems to be consensus on that.

The shadow Minister said that every Government needed to reassess the role of these organisations. In her view, it needed to be done “systematically over time”, but I am not sure whether that means two years, five years, 10 years or longer. The fact is that a new Government have entered office, carried out a comprehensive review and decided to proceed in this way predominantly—as far as I can see—on the grounds of accountability and transparency, with the peripheral object of saving money. I do not understand her logic in saying that it can be done over a lengthy period. These organisations are growing up all the time.

The right hon. Lady seemed to agree that measures have to be taken to rationalise the number of bodies. However, I want to move on to the questions of accountability and transparency, which are the main thrust of the debate. There are arguments about whether organisations are better controlled directly—from within Departments—or indirectly. I have experience in Watford of bodies that have been spun off and that are effectively quangos. For example, the Community Housing Trust, which was part of the local council, is now a third-party organisation and quasi-controlled by the council. In that respect, it is much the same as a Government quango. Management teams grow up, outside consultants are used all over the place and very high salaries—in many cases higher than in the private sector—are paid, but I have not seen the accountability. Having a couple of non-executives on a board does not mean accountability and responsibility in the same way that direct control by the Government or—as in the case of my local authority example—a council does.

The idea, once mooted for quangos, that some organisations work better independently—so that Ministers cannot meddle—was admirable, but I have not seen accountability. In fact, I have seen the contrary. I would like to use regional development agencies as an example because I have experience of them from my business life. It seemed to me that not only were they not accountable to, or directly controlled by, the Government—they had an independent board and claimed some sort of independence—but because their funding was controlled by Governments, they could say to their consumers, who effectively were businesses in the area, “You don’t own us. We’re independent of you and funded by the Government.” For the life of me, I cannot see how running an RDA as a quango is an excellent way of running an organisation when compared with direct involvement from the Department for Business, Innovation and Skills or with the local enterprise partnerships. The latter are at least community organisations in business terms. I very much support the Bill.

[Mark Lazarowicz]

The hon. Gentleman is making some interesting points. However, does he not see the apparent contradiction between his theory of greater state control and bringing everything into the centre on the one hand, and the policies of the big society and handing power down to people on the other?

[Richard Harrington]

Yes, I think that the hon. Gentleman has made a valid point. Some organisations are much better off in the voluntary sector and as part of the big society. It is a question of assessing, as the Cabinet Office has done, which organisations are suitable for which sector. My argument is that the quango is neither one thing nor the other. However, I agree with him; he made a valid intervention.

--- Later in debate ---

[John McDonnell]

I can confirm that. Redundancies are taking place, and there is near chaos in some organisations, not only because of jobs being lost and redundancies being forced on people, but in the organisation of the services that they deliver. A number of staff are worried about the impact that the proposals will have on the users of their services. I refer in particular to those who manage the independent living fund and the 300 workers involved with the Youth Justice Board, whose jobs are likely to go. Morale is understandably at rock bottom in those services, so the important thing is consultation. However, I see that consultation with staff unions is not even listed in the Bill.

Also, there is an agreement stemming from the last Government—an agreement that I thought this Government had signed up to—on TUPE. The Cabinet Office statement of protocols adopted by the last Government and inherited by this Government, which I thought this Government had also signed up to, states that where TUPE does not apply—for example, in the transfer of staff into the public sector, which includes most of the bodies in this Bill—an explicit reference should be added to the Bill. That is the agreement that was signed up to, but all that this Bill contains is a reference in clause 24 to transferring people on conditions similar to TUPE. The legal advice provided to the union is blindingly obvious: conditions that are similar to TUPE are not TUPE. Therefore, a whole range of conditions of service and protections that staff now enjoy will be put at risk. I believe that this is an act of bad faith on the part of the Government. The least that they could do now is add TUPE to the Bill. It was included by the last Government in the Apprenticeships, Skills, Children and Learning Act 2009, and by this Government in the Localism Bill. In that way, staff gained some security for their futures.

Let me conclude. There is a view in many of those bodies that there is near chaos when it comes to what the future will hold for the staff and what the implications for delivering the service will be.

[Richard Harrington]

Assuming for a moment that the employment side of the Bill was altered as the hon. Gentleman suggests—actually, it will probably not be—would he then be satisfied with the new arrangements, or would he prefer the existing bodies to perform their functions as they are?

[John McDonnell]

The hon. Gentleman might not have heard me say earlier—I might not have made myself clear enough—that when a new Government are elected, they are perfectly entitled to introduce the administrative arrangements that they think appropriate for the implementation of their policies. There will be debate in the Chamber about the rights and wrongs of those administrative arrangements. As we have heard today, there are sharp differences of opinion between Members on either side of the House on the Youth Justice Board, the coroners service and the Commission for Equality and Human Rights.

There should, however, be one common feature across all parties, and that relates to the protection of the staff. They should not suffer as a result of the changing whims of Governments or of the changing directions of political parties’ policies. They should at least be afforded the opportunity of full consultation and of the legal protections that have been provided in the past, specifically through TUPE. I very much regret that there is no commitment to TUPE in the Bill. The commitment in clause 24 to something similar to TUPE will not give the staff the security that they need. Any Government, of whatever political hue, should have respect for the civil servants who serve them. On that basis, I urge the Government to think again about this issue.

The Cabinet Office Statement of Practice on Staff Transfers in the Public Sector—COSOP—principles were signed up to by the previous Government, and by this one, and they have been referred to at length in some of our debates. They are now being broken by the Bill. That has been interpreted by the trade unions as an act of bad faith, which is contributing to the present poor industrial relations climate in the public services. This is a critical issue. I welcome the opportunity for the PCS parliamentary group to meet Ministers to discuss how we can amend the legislation in Committee, so that when it comes back to the House on Report, we can debate the real principles behind the Bill, rather than being encumbered by this attack on the staff.

[Gavin Shuker (Luton South) (Lab/Co-op)]

I rise to speak about a couple of the bodies concerned with rural communities that were mentioned by my hon. Friend the Member for Birmingham, Erdington (Jack Dromey), who is no longer in his place. It was interesting to hear Conservative Members expressing disdain for his view that Labour had made a valuable contribution to rural communities under the last Government. That goes to the heart of why I want to talk about these bodies. It is perhaps inevitable, as Labour Members tend to represent the more urban seats and Conservative Members the more rural ones, that a certain reputation in that regard is picked up. I fear, however, that this Government will run down the huge amount of good will felt towards them in rural communities if they ignore the question of the Agricultural Wages Board and the Commission for Rural Communities. Taken together, those are very important organisations.

I have some sympathy for the Government’s position in wanting to change the constitutional arrangements of certain bodies, but the Minister himself said earlier that it is difficult to maintain an overview of every single body that a Bill of this size deals with. I hope that the Government will be willing to listen on this particular point, because rural communities run the risk of getting a very raw deal.

[Richard Harrington]

As I understand it, agricultural workers are protected by the same rules as everyone else. The minimum wage, which the Labour Government brought in and which, I must confess, has proved very successful, would protect agricultural workers just as it would any other kind of worker. Can the hon. Gentleman think of any reason why one group of workers should be treated differently from the others in this regard?

[Gavin Shuker]

The hon. Gentleman has asked a straightforward and honest question. I shall go into this in more detail a little later, but one reason would be that agricultural workers are more likely to find themselves in a changeable labour market. The Agricultural Wages Board takes into account six bands for agricultural workers, and only 20% of the people who receive funding from their employer that is moderated by the board receive a level around about the minimum wage. Essentially, we could end up bringing the other 80% down to that level in a wage race to the bottom. Let me explain why it is important to take the special character of rural communities into account.

[Gavin Shuker]

We need a framework in which all workers are treated on an equal level. The hon. Gentleman makes an astute point—that in a market without any regulation, people will work for the smallest amount of money. If we had more time, I could discuss the issue at greater length, but the hon. Gentleman’s point deserves more scrutiny.

The Commission for Rural Communities has been an independent advocate since the time of Lloyd George—surely a reason why Conservative Members suggest that it is well beyond its time—but we should bear in mind the important point that the cost of living can be 10% or 20% greater in rural communities than in urban areas. If I were a Minister on the Government Front Bench and I wanted to get on with implementing my programmes—something would have to have happened for that to be the case—I would probably not want a very strong independent voice for rural communities. I think that that is a shame, because when we release people to become strong advocates for their own communities, it serves us all well.

The Rural Advocate appointed by Tony Blair in 2000, Lord Cameron of Dillington, said:

“All too often—in fact, almost always—urban civil servants ignore or are unaware of difficulties of delivery in the countryside…It would be a tragedy if the countryside were to lose that independent voice.”—[Official Report, House of Lords, 23 March 2011; Vol. 726, c. 767-8.]

I think he put it very well. It is easy for us here in Westminster to ignore some of the major problems that rural communities face—in housing, broadband and public transport, for example. How do people in the countryside, especially the young, get to work? Those are real issues. I believe that the Commission for Rural Communities continues to have a valuable voice to articulate—independently of Government but to the Government. I also believe that the changes advocated in the Bill will not strengthen that independent rural voice, which, as I said before, has been around for about 100 years.

The hon. Member for Watford (Richard Harrington) anticipated some of my points. The Agricultural Wages Board is key to ensuring that the additional cost of living that rural communities face can be met by showing a greater responsibility to those who work in the countryside. The board was put in place after world war two. That might be used as an argument to get rid of it, but it is really a poor argument for dismissing the present board. It represents a partnership among the industry, the unions, landowners and all interested parties in the countryside. Those groups come together and a deal has to be hammered out on the different wage bands, just as we have to hammer out deals in this place.

[Richard Harrington]

When the Agricultural Wages Board came into being in the late 1940s, lots of other industries were similarly regulated with their own boards. Most of those have gone—not just as a result of Conservative Governments but by general consensus. I do not understand why the Agricultural Wages Board is different.

[Gavin Shuker]

I appreciate the point, but additional costs of living and the ability for different groups of workers to be exploited within that industry are relevant. I believe that those require us not to weaken the regulations, but to keep them in place.

Let me offer two further specific points about the abolition of the Agricultural Wages Board. Without the AWB, each individual business will have to negotiate its own individual terms and conditions. Far from reducing red tape for farmers, we will increase it. Many of them just want to get on and farm; many just want to run their business; many are not experts in the area of human resources or employment law.

Secondly, without the AWB, I believe we will see a dramatic decrease in wages across the industry. As I said before, only about 20% of those regulated by the AWB receive round about the minimum wage; there are six bands above it. The industry needs a sense of career progression and a credible ladder of opportunity in order to attract more people into it to strengthen food security. The Minister will obviously say that the minimum wage remains a safeguard. That is true, but I believe that there will be a race to the bottom without the AWB. The Bill will restrict the amount that can be charged for accommodation, an area in which people may be exploited. It will also affect agricultural sick pay, which is very important to manual labourers.

I sympathise with the Government’s wish to make reforms, which is their right. They will present more proposals, and they have already made amendments to the Bill, such as the removal of the clauses relating to forests. However, they risk making a serious impact on rural communities that are already suffering. For that reason, I ask them not to poison the well from which they draw much of their support, and to reconsider their position.