Public Bodies Bill [HL]

Lord Taylor of Holbeach Excerpts

Wednesday 1st December 2010 Lords Chamber

[Lord Hunt of Kings Heath]

My Lords, I am sure that that is right. I remind the noble Lord that the Companion recalls the vote taken by your Lordships’ House some years ago that reaffirms its right to defeat secondary legislation. I am sure that that is the position. However, it is important to note the views of the Leader because it is worrying that he should seek to undermine the consensus that I thought we held about the Cunningham convention.

[Lord Taylor of Holbeach]

We had this debate the other evening. If the noble Lord remembers, I corrected what I said from “convention” to “custom”. I think that that more closely fits what happens in this matter. It is for the House to decide how it deals with statutory instruments. It is not a matter of convention; it is purely a matter of custom. If the noble Lord is seeking to develop this argument, which may be connected to this amendment—I understand that it is certainly connected to the purpose of the Bill—I think that it would be important for him to bear that in mind.

[Lord Warner]

Whether it is a custom or a convention makes very little difference to the people working in these organisations. As far as they are concerned, if Schedule 1 goes through, they are for the chop. That is the end of those organisations. People will make their own dispositions. They are not going to sit around waiting for the customs and conventions—or whatever we want to call them—of this House to decide whether this House will or will not defeat an order many months later. Does the noble Lord accept that there is a problem of handling for many of the organisations in Schedule 1?

[Lord Hunt of Kings Heath]

Perhaps I may come in first and respond to the noble Lord, Lord Taylor, before he responds to my noble friend. In my remarks I made no criticism whatsoever of the noble Lord, Lord Taylor. He is quite right that he made the point about custom, but I was referring to the correspondence between the noble Lord, Lord Strathclyde, and the Merits Committee, which has been published in, I think, two reports of the Merits Committee.

Finally, having raised concerns about this Bill, we have been informed that we should be comforted by the fact that each order would be an affirmative order. I do not think that that is sufficient, nor do I think that the amendment that the noble Lord has tabled in relation to enhancing that is sufficient.

The problem is that at the moment we do not find the Government willing to hear the voices around this Chamber or to understand that at some point they will have to make some movement, as it is pretty plain that this Bill will not get through your Lordships’ House in its present form. Therefore, it would be in everyone’s interest for the Government to show willing and to sit down and listen to some of the genuine concerns that are held in the House to see whether we can find a constructive way through. The debate on the Audit Commission allows us to put those matters on the table.

[Lord Taylor of Holbeach]

I thank the noble Lord for that contribution to our discussion on this amendment. The amendment in the name of the noble Lord, Lord Warner, if not a probing amendment, is a teasing amendment. It is a new parliamentary device to tease the Government into enunciating their philosophy behind the Bill. Noble Lords would agree that some of the speeches have resembled Second Reading speeches and have gone over ground that we have discussed before. So that all noble Lords are aware of this, I reaffirm that I am listening and that I am conveying the mood of the House.

Why I must resist the amendment to include the Audit Commission in Schedule 1, which I have no hesitation in doing, and why I forgive him for not producing an impact assessment on his proposal to include it in the schedule is because the noble Lord knows very well that the time for consultation and impact assessments comes later on in the proceedings. It is not part of this legislation to produce those documents for individual bodies.

[Lord Warner]

The Government actually produced an impact assessment and that impact assessment is totally silent on the subject of costs and benefits of the proposals, even in any kind of outline form. Is the Minister saying that the Government can bring a Bill to this House seeking to abolish a very large number of bodies and not produce any numbers whatever about the costs and benefits? Is that his position?

[Lord Taylor of Holbeach]

Indeed, it is. The process that is built into the Bill allows for impact assessments to be presented at the time of change. The Bill does not propose change; it facilitates change. I tease the noble Lord. He is proposing to include a body in Schedule 1 but, quite rightly, he has not come up with an impact assessment because he is not in any position to provide that; nor would I be in a position to provide that. The time to do that is when the department makes a decision to act under the Bill. I know this is a tease on the noble Lord’s part, but it is very important to use the opportunity of this debate to get that message across.

[Lord Warner]

If the Minister looks back to the period between 2004 and 2007 or 2008, he will see that the previous Government came forward with primary legislation for changes to bodies set up by Parliament with an impact assessment which set out the cost of those changes so that Parliament could see the money implications of changes to legislation that it was being asked to make. In effect, the Minister seems to be asking for a constitutional change: to come to Parliament to take primary legislation to abolish bodies which have been set up by Parliament without giving any idea of what the costs and benefits of that decision are. That is what he seems to be saying.

[Lord Taylor of Holbeach]

I am trying to use the opportunity of this debate to reassure the noble Lord about the process that will exist following the passage of the Bill, that no action can be taken without proper consultation and impact assessments. Noble Lords know that. I have said this many times. However, I have listened to what has been said about the need for information. I appreciate that the Committee and the House would like more information on proposed changes, and I take that matter on board.

[Baroness Royall of Blaisdon]

I am sorry to delay the noble Lord once more. However, in that information, if we are to take real decisions about whether important bodies such as the Agricultural Wages Board, which we were discussing earlier, are to remain in existence, then the information that the noble Lord is very kindly going to provide us with must include an impact assessment on, for example, the costs. Otherwise, we cannot come to a clear and rational decision.

[Lord Taylor of Holbeach]

Indeed, I reassure the noble Baroness that any instrument produced under the Bill to enact any of the powers within it will contain that information. That is the position. This is not primary legislation to abolish the Agricultural Wages Board or the Audit Commission. That is not what the Bill is about; it is intended to empower the executive with the ability to bring forward secondary legislation in order to facilitate change. It is at that stage that the legislation occurs. It is very important to get that message over.

We have produced an impact assessment for the Bill. It talks about changes to particular bodies made under the orders of the Bill, and they will be produced in accordance with its existing rules and guidance on impact assessments at the appropriate time. Perhaps I may continue by addressing the amendment. After all, the noble Lord has proposed that we should include the Audit Commission in Schedule 1, and I wish to tell the Committee why I think that suggestion needs to be resisted and why there may well be a better way of dealing with the policy change which the coalition has announced in order to deal with it.

The Government intend, where appropriate, to use the power in the Public Bodies Bill to make changes to public bodies. However, the changes regarding the Audit Commission require power changes to legislation which is outside the scope of the Public Bodies Bill. Therefore we are setting up an alternative legislative vehicle. I will explain the background to that. On 13 August, the Secretary of State for Communities and Local Government announced plans to disband the Audit Commission and refocus audits on helping local people to hold local bodies to account for local spending, as well as on saving the taxpayer some £50 million a year. This figure reinforces the one given by my noble friend Lady Hanham.

The commission’s responsibility for overseeing and delivering local audits will stop, its research activities will end and its in-house audit practice will be moved to the private sector. We are considering a range of options for doing this. Councils will be free to appoint their own independent external auditors from a more competitive and open market, and there will be new audit arrangements for local health bodies. All local audits will be regulated within a statutory framework, with oversight roles for the National Audit Office and the profession. As a result, the Audit Commission’s in-house practice will be transferred out of public ownership. A range of options are being considered and evaluated for moving the audit practice into the private sector. The department is now working closely with the commission, the accountancy profession, local government and the health sector to develop the detailed design of the new systems, and to take forward, in the most effective way, the transfer of the commission’s in-house audit practice into the private sector. This work is ongoing. We are aiming for the new regime to begin to come into effect during 2012-13. That regime will require primary legislation and as such, this timetable is dependent on parliamentary time. If the noble Lord’s amendment were to succeed, it would mean that the Government could use the power in Clause 1 to abolish the Audit Commission. However, the Government would not be able to ensure that a robust statutory framework for local audit is put into place.

This is the statutory regime for the audit of local authorities and local health bodies, including foundation trusts and other NHS trusts. For example, the powers in the Public Bodies Bill would not allow the Government to provide these bodies with the powers they need to appoint their own independent external auditors. Likewise this Bill would not enable provision to be made for the arrangements through which the quality of local audit will be maintained. The Government intend to bring forward separate primary legislation, subject to parliamentary time, which deals with the disbanding of the Audit Commission, the transfer of the in-house practice into the private sector and the setting up of the new local audit regime in a comprehensive and integrated way. As such, I hope that the noble Lord will withdraw his amendment.

[Lord Warner]

My Lords, I was fascinated to hear that elegant explanation of how the Government will deal with the Audit Commission. If only I felt they would use that same elegant approach to some of the other bodies in Schedule 1, I would go home happy. I shall continue to reflect on what the noble Lord has said, and look forward to having answers to my questions, which I do not feel that I have had. In the mean time, I beg leave to withdraw the amendment.

--- Later in debate ---

There has been a lot of criticism of this Bill already in terms of its framework, style and lack of depth, and therefore the opportunity that it gives for people to put their pet projects on to the list, perhaps without due scrutiny. I was very interested in the comments made by my noble friend Lord Wills that there is a need not only to look at the governance of the BBC but to look at some of the other institutions that we have in the round. Again, I argue that this Bill is not the means by which we should do that. Yes, let us have a debate about the future governance of the BBC. Yes, let us find the right opportunity and the right time to do it. If we can find the right means for that, there might well be more consensus going forward than this amendment, in this form and in this Bill, will allow. I hope that the noble Lord will consider withdrawing it on that basis.

[Lord Taylor of Holbeach]

My Lords, I thank my noble friend, who I hold in high regard, for moving this amendment. However, I have to disappoint him by saying, like the noble Baroness, Lady Jones of Whitchurch, that this is not the time nor the place. Now is not the time, and this Bill is not the place, to debate the proposals that he has presented in this amendment. Perhaps the contribution from the noble Lord, Lord Maxton, explained that for the Committee.

The BBC Trust is established through the royal charter, the current charter being in place until the end of 2016. The Government have no intention of bringing the charter to an end before its designated end date of 2016. There are certain benefits in granting a 10-year charter and remaining committed to its stated duration. For example, a charter supports the independence of the BBC from government and Parliament, to which the Government are committed in the coalition programme. A 10-year charter provides greater certainty and stability for the BBC in the way that it operates, including its governance arrangements, and gives the BBC an ability to plan for the future while allowing for a fundamental review at expiry. Ending the charter before its due date would undermine these important principles and lose the benefits of granting a 10-year charter. As noble Lords are aware, the Government have agreed with the BBC that the NAO can have full access to the BBC’s accounts in order to make it more transparent and accountable to Parliament. The Government do not believe that there is a case for any greater accountability to Parliament. As the noble Lord, Lord Stevenson of Balmacara, said in a very thoughtful speech—I was grateful for his contribution—the BBC must be able to hold Parliament and parliamentarians to account. Increasing the BBC’s accountability to Parliament would counter the principle of safeguarding its editorial independence.

The future of the trust as a model of governance will be fully assessed at the time of the next charter review. I am sure that my noble friend Lord Fowler will be in a position to advise on that assessment, and I imagine that he will do so robustly. As my noble friend is aware, the chair of the trust is due to leave the post at the end of his current term and a new chair will be appointed from next May. The BBC Trust offers a direct line of accountability to TV licence payers. It holds the executive to account. This separation has a purpose. As I have said, when the next charter expires, all issues relating to the BBC will be discussed.

When the current charter was created, extensive consultation took place. The public made it clear that the BBC should not be made more accountable to Parliament.

[Lord Fowler]

What does the Minister base that on?

[Lord Taylor of Holbeach]

As I have said previously in my response, the public said in the consultation that they did not want the BBC to be beholden to Parliament because they felt that its independence and ability to criticise Parliament and government would be impeded.

Furthermore, the BBC is not a statutory body, as the noble Lord, Lord Maxton, pointed out. This Bill is designed to cater for bodies where changes need legislation in order to be effective. This is not the position in relation to the trust. Therefore, as with all other non-statutory bodies, it is not appropriate to include it in the Bill.

Despite disappointing my noble friend—I am sure that I have not surprised him—I would ask him to withdraw his amendment.

[Lord Fowler]

My Lords, as the Minister said, it is a disappointing reply. Frankly, I think that we are going backwards, because the previous Secretary of State in the previous Administration made a darn sight more radical assessment of the royal charter than the Minister has. He is now repeating all the things that we were told about four or five years ago. It is exactly the same script as the Department for Culture issued at the time. This stuff about the public having been asked is complete rubbish; I really do think that the department might at least take that out of its script if nothing else. I am sorry to get heated about this, but it is fairly dismal.

I thank all noble Lords for their contributions. It has been a useful debate. What the noble Lord, Lord Stevenson, said was extremely interesting. I do not think that the royal charter is a gold standard. It has not worked for the BBC. It is frankly just a deal, as I said, between the Secretary of State on the one side and the chairman of the BBC on the other. We can set up Select Committees to kingdom come, but some of us have to take notice of those Select Committees, and the record of that has not been great. When we come to Select Committees, I would point out to the noble Baroness, Lady Jones, that the Select Committee in the House of Lords and the Select Committee in the House of Commons have both said that the BBC should be placed upon a statutory basis. There is no doubt about that. The noble Lord, Lord Maxton, raised an interesting and important point about the statutory basis and the dangers that it could have and I do not wish to decry that. I also remember him arguing passionately in the Select Committee that the only democratic representatives, as far as the licence fee was concerned, were Members of Parliament.

The noble Baroness said that the BBC has been battered. She might consider that one reason it has been battered is that it has no strong chairman, no strong board and no one to respond for it. She asked, “why now? We cannot have a debate now.” I would point out that I have had a request for a debate on the Order Paper for the past 12 months. There are not that many opportunities for debates in this House. The crucial question, the crucial issue is this. Sir Michael Lyons, the chairman of the BBC Trust, is resigning. It gives us an opportunity to rethink.

Of course I will withdraw this amendment, but I warn the House that when both the government and opposition Front Benches agree on a policy, then the Back Benches need to think very carefully indeed. With that in mind I beg leave to withdraw the amendment.