Public Services (Social Enterprise and Social Value) Bill

Debate between Steve Baker and Jon Trickett

Friday 19th November 2010 Commons Chamber

[Jon Trickett (Hemsworth) (Lab)]

It is a pleasure to hear such an interesting and, at times, erudite debate. The Conservative party used to appear to be a fairly homogeneous and monolithic block, so listening to Conservative Members revealing the various trends within the party has been a fascinating and instructive experience.

I congratulate the hon. Member for Warwick and Leamington (Chris White) on introducing the Bill and allowing this debate to take place. Let me say at the outset that Labour Members want to see the further development of social enterprises, and we are happy for the Bill to receive a Second Reading and then go into Committee.

There have been, I think, nine contributions to the debate other than that of the hon. Member for Warwick and Leamington, and a range of different experiences have been brought to it. The hon. Gentleman indicated very strongly a communitarian tendency running through the history of the Conservative party. He certainly nailed his colours to the mast in terms of his own views about society and how it should be organised. However, he slightly stretched the credulity of the House when he tried to embrace Baroness Thatcher within that, since it was she who famously said that there is no such thing as society; there are individuals and their families.

[Steve Baker]

rose—

[Jon Trickett]

I am not going to take interventions straight away, but I may in due course.

It has frequently been said that the Conservatives, historically, knew the price of everything and the value of nothing. It is therefore interesting to hear so many Conservative Members talking about judging tenders not merely on price but on what has been described in the Bill as social value, whereby one should not necessarily go for the lowest tender. That is at variance with my own experience as a leader of local government in the years when Baroness Thatcher was Prime Minister and simply wanted the lowest possible tenders. Nicholas Ridley said that local authorities should meet once a year in a tent to let contracts and then go away again.

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[Jon Trickett]

We on this side of the Chamber feel perfectly comfortable in our own skin in advocating precisely such an approach to the role of Government. I am not sure whether some of the hon. Gentleman’s colleagues share the same comfort.

We want social enterprise to develop further, so the Bill deserves a Second Reading. As Members will see as I proceed with my speech, it will consolidate in statutory form initiatives that we introduced when we were in government. Equally, as I have just remarked, it points out the intellectual fissures at the core of the coalition’s confused approach to public policy. The Government say they are in favour of a big society, but they do not always will the means. There is a contradiction between their professed communitarianism and their neo-liberal objective of cutting the costs of caring services.

There is also a contradiction between the Conservatives’ approach to the market and free competition, with price as the key indicator on which tenders should be judged, and the social commitments in the Bill. Another contradiction is between their alleged commitment to localism and some Conservative Members’ central ideological imperative of giving the market free rein.

[Steve Baker]

If the hon. Gentleman uses the word “ideological” to accuse me of having thought about how society works and what the law ought to be, of course I plead guilty.

[Jon Trickett]

I, too, have a very strong ideological vision, and in no way should the hon. Gentleman apologise for having an ideology. It is the contents of his ideology that give me some concern.

The contradictions and intellectual fissures that have been exemplified this morning go right to the heart of the Bill. That explains the rumour—I wonder whether the Minister could confirm it—of a fundamental disagreement over the Bill between the Secretary of State for Communities and Local Government and the Minister for the Cabinet Office.

Throughout the debate we have heard many examples of the positive impact that social enterprises can have on our neighbourhoods, communities, towns and villages. I recently visited Cream Catering in my constituency, which is doing innovative work. It is a social enterprise that employs people who have been out of the labour market for many years, and it provides high-quality catering in a variety of institutional contexts. It is an exciting enterprise, and it was created through the intervention of the then Government, who identified a procurement problem and an instrument that might deal with it. I am sure that is the kind of thing that the hon. Member for Warwick and Leamington would like to see if the Bill became law.

In fact, there are 55,000 social enterprises across the country. It is said that they add £8 billion a year to our gross domestic product, but their true value cannot be measured purely in numbers. They enable the hardest to reach and often most socially excluded people to return to economic activity. They contribute to improving the environment, both physical and social, and they enhance prosperity and deliver social justice in equal measure.

The values encompassed in the work of social enterprises are vital ingredients in the creation of a good society. If we are to succeed in the future, both as a sustainable economy and as a society with strong bonds of mutuality and reciprocity, we need to accept that markets needs morals. Labour has no problem in accepting that, and in government it led us to invest in social enterprises. We invested unprecedented resources in encouraging social enterprises, which contributed to the significant expansion of the sector and brought us to the position that we are in today. That provides a background to the Bill.

Many of the Bill’s intentions will build on the progress that we made in the past 10 years, and, to be fair, the progress that was made under previous Administrations as well. Back in 2002, we launched the first Government strategy for social enterprise. In 2006, we produced a social enterprise action plan, and in 2009 we held a social enterprise summit. We also created new instruments called community interest companies, of which there are 4,000 across the country. Labour gave £125 million to the Futurebuilders fund, which the hon. Member for West Worcestershire (Harriett Baldwin) mentioned, to build third sector capacity. We also ensured that thousands of public sector procurement officers were trained in how best to engage with the third sector. We can therefore conclude that initiatives and plans—even those that are put into statutory form—are only one side of the equation.

The other side of the equation is that there must be appropriate investment. It is therefore a concern that the Government’s spending cuts might put at risk the activity of social enterprises. How can it help to scrap the future jobs fund, which was partly designed to help social enterprises create up to 15,000 jobs? Mention has been made of the New Philanthropy Capital think-tank, which has said that the cuts look like removing between £3 billion and £5 billion a year from social enterprises and the third sector generally.

Clause 1 would result in a national social enterprise strategy that allowed Departments to promote engagement in social enterprise across England. That proposal is almost identical in some ways to the social enterprise action plan that Labour introduced four years ago. It is difficult to see how this national strategy, which would be created in law, differs from the action plan that we introduced without the need for a statutory framework. A case must be made to explain why a new Bill is required given that Labour was able to do things without new statutory powers. Why do the Conservatives, and the coalition more generally, find it necessary to create a new piece of legislation, which the hon. Member for East Surrey no doubt thinks is coercive.

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[Jon Trickett]

It is for the Minister and the Government to go first and describe their conception of the big society. We want a strong society—[Hon. Members: “Ah!”] We want strong bonds of mutuality and reciprocity to operate at every level of society, in every neighbourhood. The Bill might contribute to the development of that, but that does not mean that we should not ask difficult questions of its promoter and sponsors. That is precisely what I am doing.

How does the hon. Member for Warwick and Leamington reconcile clause 3 with the Government’s motives? When the Minister for the Cabinet Office and Paymaster General was asked on the “Today” programme earlier in the week about his intentions in respect of mutuals, co-operatives and public service reform, he made it clear that companies tendering for outsourced services would have to make proposals that were

“significantly cheaper than the current provision”.

There we have it: the irreconcilable contradiction between communitarian aspirations and the neo-liberal drive to reduce the cost and extent of government. There lies the Government’s true motives.

Perhaps the Government will not support the Bill, but even if they do, they are more interested in lower cost services than in maximising social value. Having listened to his speech, I do not believe that the hon. Member for Warwick and Leamington wants that. Social enterprises should not be viewed as a cheaper option. They have a real contribution to make and can have a positive impact, as we have heard from Members on both sides of the House, but they should not be about enabling the Government suddenly to abdicate their responsibility to fund public services properly.

Social enterprises should—hopefully—ensure higher levels of democratic accountability.

[Steve Baker]

Will the hon. Gentleman give way?

[Jon Trickett]

I am about to wind up, although some might say that I have wound the hon. Gentleman up enough.

Central and local government and social entrepreneurs must work together to unleash the potential of social enterprises and the capacity of all of us to do good in our communities. Perhaps the House can agree on that. That should not be forgotten in the coalition’s eagerness to cut spending and sell off large swathes of the public services. The Opposition support the aims of the Bill and believe that it should receive a Second Reading. None the less, as I have indicated, if and when the Bill reaches Committee, we will probe the details and the broad principles underlying the proposals.