NHS (Charitable Trusts Etc) Bill

Seema Kennedy Excerpts

Friday 22nd January 2016 Commons Chamber

[Mr Rees-Mogg]

I am grateful to my hon. Friend for that intervention, but I am afraid that I think that most public consultation is bogus. It is about going through the motions and pretending we are interested in views when the Government, or councils or whatever else, want to get on and do whatever they wish to do anyway. It simply allows opportunities for judicial review to gum up the process. We should be incredibly cautious about chucking public consultation into Bills, because that does not actually achieve anything.

[Seema Kennedy (South Ribble) (Con)]

Does my hon. Friend agree that our constituents would look on agog at a Bill designed to simplify the process requiring a three-year consultation followed by yet another one?

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[Mr Rees-Mogg]

What a pleasure it is to see you taking the Chair, Madam Deputy Speaker. We have been waiting for this happy hour to arrive to help us carry our debates forward.

No, I do not think my hon. Friend is right. When people give money to a charity that is linked to the Government, they are even more concerned that it will be spent well, and they therefore want extra protections to assure them of that.

[Seema Kennedy]

Does my hon. Friend not agree that the entire point of the Bill is to dissociate the charities from the Government and to provide independence, which is what gives them such a great reputation in their local areas?

[Mr Rees-Mogg]

As I said, it is a question is how we get to where we are going from where we are starting. As we make the transition, it is absolutely crucial to ensure that the money is handed over in a way that is properly audited so that people can have confidence in the NHS charities and not feel that there is some kind of sleight of hand or money is being siphoned off.

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[Kit Malthouse]

I rise to speak to amendments 1, 3 and 2, which—inexplicably, given their strength—stand in my name only, as well as the splendid amendment 9 and the unfortunate amendment 4. It is a pleasure to speak under your chairmanship, Madam Deputy Speaker. In my experience, debates with you in the Chair are often the most efficient and good natured. I hope that today’s debate will be just that.

On amendment 1, when one tables an amendment, it is a great pleasure to have one’s speech made for one much more eloquently than one could make it oneself, so I am grateful to my hon. Friend the Member for North East Somerset (Mr Rees-Mogg) for his support. Recently, there have been significant charitable scandals in this country. Much of the time of the House and of the Public Accounts Committee has been taken up with Kids Company. I have become convinced that one of the phenomena at work in that organisation was group-think. Those hon. Members who are students of psychology will know of the phenomenon of group-think: individuals in a group, often when they are led by a charismatic leader, can get lost in a miasma of consensus, in which they are unwilling or unable to acknowledge any view that departs from theirs, and indeed are hostile to outside views of their conduct.

The most famous political example was the Bay of Pigs disaster: the group around President Kennedy became trapped in group-think. We have seen commercial examples of it in the UK. Marks & Spencer and British Airways got trapped in group-think in the 1980s, when they went for massive international expansion. They did so against the views of everybody on the outside, but both boards convinced themselves that it was the right thing to do. Disastrously, Kodak and Swissair, which was once talked of as the “flying bank”, went bust because the management were unwilling to look for outside views.

[Seema Kennedy]

My hon. Friend takes me back to my time as a student in Paris 20 years ago, when I was very grateful for the expansion of Marks & Spencer so that I could get my English pies and pasties, but I digress. My hon. Friend is giving examples of group-think from 30 years ago. Does he not agree that the world has moved on, and that the rise of the individual makes our children—the millennium generation—much less likely to fall into that sort of psychology?

[Kit Malthouse]

I assume that my hon. Friend was not a shareholder of Marks & Spencer at the time. For those of us whose families were shareholders, it was a complete disaster, but I am glad that she was able to munch her pasty. The answer to her question is no; it is quite the reverse. The modern mind is much more akin to group-think, indeed to group hysteria. As politicians, we experience that daily on social media. We have all seen how small untruths, half-thoughts or theories can whip themselves up, on Twitter and Facebook, to become reality in a short space of time.

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[Kit Malthouse]

The truth is that non-executives are technically appointed by the shareholders, so they are appointed by people who have an interest in the board being challenged constructively. The problem with charities is that non-executives are appointed by the board, the members of which more often than not appoint people in their own likeness. When the members of a board get trapped in group-think, they will appoint people who agree with them. Brave would be the chairman or chairwoman of the trustees who appointed somebody awkward or difficult, who might question or challenge them, particularly when one charismatic person is in charge.

[Seema Kennedy]

My hon. Friend clearly feels passionately on this matter, but he paints a bleak picture of a nation of volunteers and charity workers led by demagogues, where everybody follows their leader blindly. I have been a trustee and can reassure him that that is not the case. There are challenging voices. Given that his amendments would reinsert the power of the Secretary of State, he seems to lack confidence in people’s independence of mind and confidence in their charities.

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[Kit Malthouse]

I hesitate to be repetitive, but the truth is that these charities are different. Let me give a practical example. Say, for instance, that an NHS charitable trust that has become independent and that has independent trustees runs a huge appeal to raise money for a CAT scanner to go into a hospital. It gets three quarters of the way through the appeal and, suddenly, it becomes apparent that the money has gone missing. There are people queued up, waiting to use the CAT scanner. The charity may get lost in months and months of inquiry, and much of the money, which was for a dedicated purpose, may be defrayed on other things to deal with the problems—accountants, lawyers, judges, challenges from elsewhere or whatever else. We have seen that sort of thing happen before. I would want the Secretary of State to be able to step in and say, “No. We are now going to appoint trustees who will make sure the money is spent on the CAT scanner, and that people get the treatment they need.”

[Seema Kennedy]

I thank my hon. Friend for giving way. He is giving an excellent pitch to be the Health Secretary one day. I want to return to my previous point about his bleak outlook on the way that charitable boards and their trustees conduct themselves. There is adequate provision in charity law for interventions to take place. It is not necessary for the Secretary of State for Health to step in.

[Kit Malthouse]

The truth is that there have not been adequate safeguards in charity law, as my hon. Friend will know. That is why the Charities (Protection and Social Investment) Bill is going through the House at this very moment. Anybody who has followed the passage of the Bill or sat on the Committee will know that part of it will beef up the powers of the Charity Commission to give it greater control in the event of financial misdemeanour or charities getting into financial trouble. It will strengthen exactly those powers about which I am talking.

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[Kit Malthouse]

This is a difficult area. Some charities are composed in such a way that their entire purpose is a social mission. For War On Want or the Child Poverty Action Group, for example, decisions made by politicians are intrinsic to their objectives. Other charities, including some in the health sector, are more about providing funds and ancillary support to hospitals, and that kind of political campaigning is not intrinsic. I am not knowledgeable about the 2014 Act, but since my hon. Friend has raised it I will go and have a look. He may well be right to suggest that it contains enough protections, but I maintain my point that the special status of these charities, and the fact that they raise their money because of their association with the NHS, means that the Secretary of State must maintain some kind of toe-hold. To set those charities completely free is asking for political disaster at some point in the future.

The second part of amendment 2 would mean that if all trustee positions were vacant for three months, the Secretary of State could—and indeed should—appoint some new trustees to kick-start the organisation. That obviously will not happen often, but much of the business of this House involves planning for the unexpected. If a charity were for some awful reason to lose all its trustees at once—perhaps they are all off on a fact-finding mission together and there is a horrible accident; who knows what may happen, but let us pray to God that it does not—the Secretary of State will have the power to appoint people.

[Seema Kennedy]

I apologise to the House for being repetitive, but my hon. Friend has a vision of doom for the trustees and others. I once applied to be a trustee of Great Ormond Street hospital, and there were hundreds of applications. Those places are filled, and the amendment provides for a situation that does not seem to have any basis in fact.

[Kit Malthouse]

I apologise if that is a vision of doom, but much of our life in this House involves dealing with the stream of human misery that comes through our letterbox daily. We have urgent questions and statements on all manner of horrific events here and overseas, and much of our legislation is to plan for the unexpected, which seems sensible. Much of our legislation dates back many hundreds of years, and I hope that this Bill will last for a similar period. Who knows whether there will be trustee vacancies in the generations to come. I hope not, but if there are, it would be sensible for the Secretary of State to appoint someone. At the moment, there is nobody else to do it.

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[Maggie Throup]

I am delighted to speak in support of this important Bill on Report and congratulate my hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) on leading it through the complexities of the House. In the time available—I shall keep my contribution short because I realise how long it has taken us to get this far this morning—I shall speak specifically against amendment 2. If accepted, it would give the Secretary of State the power to introduce secondary legislation to re-establish his or her right to appoint trustees to NHS charities.

Charitable giving is one of the cornerstones of our society, with the Charities Aid Foundation estimating that in 2014 alone £10.6 billion was donated by the British public to a variety of good causes. Indeed, we are the home of some of the world’s greatest charitable fundraisers such as Children in Need, Comic Relief, Sport Relief, and not forgetting, of course, Live Aid.

One clear message that came out of the 2014 consultation on the governance of NHS charities was that potential donors felt put off by the perceived lack of independence of the charities from the Government. One of the Bill’s fundamental principles that seeks to rectify this perception —one that I wholeheartedly support—is the removal of the right of the Secretary of State to appoint trustees to particular NHS bodies or to appoint special trustees.

The Bill is designed to give more autonomy to NHS charities to appoint their own trustees and bring them into line with most of the rest of the charitable sector, in which that is already common practice. As well as removing the perception that the charities lack independence from Governments, such a move would enable them to adopt different legal forms specific to their needs, particularly those offering limited liability. It would remove the barriers of dual regulation under both NHS and charity legislation, which currently make it difficult for NHS charities to achieve and demonstrate true independence.

[Seema Kennedy]

My hon. Friend is making a very good point. Members may have seen a report in today’s Times about trusted professions. Apparently doctors are trusted by 89% of the population, but Ministers—not politicians as a whole—are trusted by only 22%, although I am sure that that does not apply to my hon. Friend the Under-Secretary of State. Surely vesting independence in these charities independently and drawing them away from Governments will only enhance their local reputation.

[Maggie Throup]

I entirely agree. That is exactly why I feel that they need to be independent from Secretaries of State and Governments. I must read the whole of that article: it sounds extremely interesting. We must think about how we can improve our image in the public domain.

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[Jeremy Quin]

I am grateful for my hon. Friend’s knowledge of pantomimes. No doubt Captain Hook is in there somewhere. I certainly accept the pith of his remarks. By making the charities fully independent, we provide clarity not only to the trustees by empowering them, but to donors, who will know that their generous gifts to the charities will be looked after by independent trustees.

My hon. Friend the Member for South Ribble (Seema Kennedy) referred to the sad state of current polling on Government Ministers. I think we would all agree in this House that those who fulfil the functions of charity trustees are good people doing a good task, and are recognised as such. They are the people whom the generous donors to these charities want to be in command of the assets that they transfer, rather than any other body. That is why I oppose the amendment.

Amendment 7, which stands in the name of my hon. and fashionable Friend the Member for North East Somerset, would merely add to complexity and cost, neither of which is required. In particular, a report from the Comptroller and Auditor General is an unnecessarily bureaucratic step.

[Seema Kennedy]

Does my hon. Friend agree that if we are trying to increase the public’s confidence in these charities, involving bodies such as the Comptroller and Auditor General—names that are alien perhaps to many of us, and definitely to our constituents—will not fulfil the purpose of this Bill?

[Jeremy Quin]

The Comptroller and Auditor General already has a very valuable role, and I would not wish to place extra burdens on him. I take my hon. Friend’s point.

The purpose of the Bill is to provide clarity, so that donors know that the boards are in control of their destiny and will look after their assets appropriately in the interests of the charitable endeavours that they serve. Involving bodies such as the Comptroller and Auditor General would merely invite bureaucracy and confusion. There are myriad auditors prepared to do a good job to support charity trustees in their work and to ensure that their accounts are kept in good order, so I do not see the need to involve public bodies. With that in mind, in particular, I beg to differ with my hon. Friend the Member for North East Somerset, and I hope that he will not press his amendment.

I congratulate my hon. Friend the Member for Aldridge-Brownhills on introducing this Bill, which I wish a smooth passage. I hope that those who have tabled amendments will think again and not press them to allow for that smooth passage.

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[Seema Kennedy]

I pay tribute to my hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) and commend her efforts in bringing the Bill to Third Reading.

Clauses 1 and 2 remove the Secretary of State’s power to appoint trustees to certain NHS bodies, which is only right and proper. Many charities predate the national health service, and even the hospitals and hospices that they now support. They are deeply rooted in their communities, and they receive strong and consistent support from the towns and villages they serve. It is therefore only right that local people, not the Secretary of State in Whitehall, should decide who sits as trustees.

The Bill responds to calls from charities about how they should be regulated. They have said that they want to grow and develop freely. We all know how different fundraising is from when we were growing up, in the days of jumble sales and potato pie—bring your own fork—suppers. Charities need to compete with others for people’s time, attention and, crucially, money, so they need to be nimble.

Clause 1 gives charities independence from the Government, which is important if they are to appeal to the widest possible range of donors. I am especially thinking of local health charities, such St Catherine’s Hospice Care and the Rosemere Cancer Foundation, which so ably serve my constituents in South Ribble. Independence from the Government can only enhance their reputations, and thereby their fundraising potential.

Clause 3 has given the Bill the name by which posterity will no doubt remember it—the Peter Pan and Wendy Bill. Many Members will remember the Disney version of the “Peter Pan” story, with comedy pirates and a flying fairy—Great Ormond Street hospital has benefited greatly from that retelling of the tale in its myriad merchandised and marketed forms—but anyone who saw the 2015 version of the film “Pan” will recognise a much darker side, with orphaned boys left to fend for themselves in a poorhouse by joining a gang. J. M. Barrie, who lived in Edinburgh and London in the late 19th and early 20th centuries, will have seen such boys around him every day. The story starts so sadly, but the conclusion is a happy one, with Peter and the lost boys adopted by the Darling family.

Barrie did not have children of his own, but was determined that, in real life as well as in fiction, the children of London and, indeed, of the whole of the UK, should have better lives. He had love, respect and, most importantly, hope for children. His great hope was that their lives be better than those of the lost boys. Such a hope lives on in the heart of every parent and in the heart of every child treated at Great Ormond Street hospital. The Bill will embed that hope for the future. With the Bill, we honour Barrie’s legacy today. I am delighted to support it on Third Reading.