PARLIAMENTARY DEBATES HOUSE OF COMMONS OFFICIAL REPORT GENERAL COMMITTEES

Public Bill Committee

PUBLIC BODIES BILL [LORDS]

First Sitting Thursday 8 September 2011 (Morning)

CONTENTS Programme motion agreed to. Written evidence (Reporting to the House) motion agreed to. Clause 1 under consideration when the Committee adjourned till this day at One o’clock.

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The Committee consisted of the following Members:

Chairs: †MR DAVID AMESS,JOHN ROBERTSON

† Ashworth, Jonathan ( South) (Lab) † Jones, Susan Elan (Clwyd South) (Lab) † Blackman-Woods, Roberta (City of Durham) (Lab) † Mosley, Stephen (City of Chester) (Con) † Bray, Angie (Ealing Central and Acton) (Con) † Nandy, Lisa (Wigan) (Lab) † Crabb, Stephen (Preseli Pembrokeshire) (Con) † Raab, Mr Dominic (Esher and Walton) (Con) † Davies, Glyn (Montgomeryshire) (Con) † Trickett, Jon (Hemsworth) (Lab) † Elphicke, Charlie (Dover) (Con) † Vaz, Valerie (Walsall South) (Lab) † Williams, Hywel (Arfon) (PC) † Gyimah, Mr Sam (East Surrey) (Con) † Williams, Mr Mark (Ceredigion) (LD) † Harrington, Richard (Watford) (Con) † Wright, David (Telford) (Lab) † Heath, Mr David (Parliamentary Secretary, Office of the Leader of the House of Commons) Mr James Rhys, Committee Clerk † Hurd, Mr Nick (Parliamentary Secretary, Cabinet Office) † attended the Committee 3 Public Bill CommitteeHOUSE OF COMMONS Public Bodies Bill [Lords] 4

It is an enormous pleasure to serve under your Public Bill Committee chairmanship, Mr Amess. I am sure that the rest of the Committee will have noticed your broadsides against the BBC this morning. We can assure you that we will Thursday 8 September 2011 conduct our affairs with high levels of seriousness and low levels of Botox. (Morning) The programme motion was agreed at the meeting of the Programming Sub-Committee. It allows for 10 sittings of the Committee over five days and proposes that the [MR DAVID AMESS in the Chair] Bill be taken in clause order, with the schedules being taken after the clauses that introduce them. Public Bodies Bill [Lords] (Hemsworth) (Lab): Like the Minister, I 9am welcome the opportunity to serve under your chairmanship, Mr Amess. This is the first time that I have done so. The Chair: Good morning, everyone. Before we begin, Your reputation runs well before you. You are a fair but I have a few preliminary announcements. It is not firm Chairman. I have made this comment before: I particularly warm, but if hon. Members want to remove hope that you will be fair with us but firm with the any articles of clothing, that is perfectly acceptable. people on the other side of the room. I am sure that that Please will all hon. Members ensure that mobile phones will be the case and that your wisdom but also your wit and pagers are turned off. I will not be pompous and will keep us in order and at least slightly amused as well. draw attention to it, but I can hear phones when they go It is good to see the rest of the Committee assembled off, and our proceedings are being broadcast. Devices here. I see many bright eyes and bushy tails, so we can should be placed on silent mode during the proceedings. look forward to an interesting set of debates. The I inform hon. Members that as a general rule, I and matter at hand is the programme motion. The House is my fellow Chairman do not intend to call starred aware, because we raised the issue on Second Reading, amendments that have not been tabled with adequate that we are uncomfortable—I will seek a ruling from notice. We are blessed with a wise Clerk, who will help you on this in due course, Mr Amess—with the fact that hon. Members if they do not understand proceedings, members of the public were able to make representations and I am sure that if that can all be done privately, we on the Bill only prior to its appearance in the House of will proceed efficiently. The required notice period in Lords. After having made that point in the House, I was Public Bill Committees is three working days. Therefore, told that it is the convention with a House of Lords Bill, amendments should be tabled by the rise of the House which this is, for evidence to be taken from witnesses at on a Monday for consideration on a Thursday and by the time at which the Bill appears in the other place. Of the rise of the House on a Thursday for consideration course that is true, but it seems to me that although on a Tuesday. conventions are there to take heed of and to pay careful I realise that although it is 16 months since the attention to, they should be flexible enough to allow for election, not everyone has served on a Public Bill Committee some variation from time to time. before. We are here to help. They may not be familiar This Bill changed very substantially between the point with the procedure in Public Bill Committees, so I will at which it was tabled in the other place and when it was briefly outline the way in which we proceed. The Committee put in front of us. It is now such a different Bill. will first be asked to consider the programme motion on Moreover, large numbers of people believe that we the amendment paper, on which debate is limited to half should have had the opportunity to hear from interested an hour. Then we will proceed to a motion to report members of the public. I wonder whether any other written evidence, much of which is arriving. Then we Member has had the pleasure of receiving several hundred will begin line-by-line consideration of the Bill. I first e-mails per hour in favour of S4C. Perhaps it happened call the Minister to move the programme motion agreed only to myself and one or two others. I must say that my by the Programming Sub-Committee. knowledge of written Welsh is not as strong as it should be. I was helped by the fact that there was a translation The Parliamentary Secretary, Cabinet Office (Mr Nick at the bottom of the page. Hurd): I beg to move, That— Hywel Williams (Arfon) (PC): I am grateful to the (1) the Committee shall (in addition to its first meeting at hon. Gentleman for giving way so early in our proceedings. 9.00 am on Thursday 8 September) meet— I can confirm to the Committee that I too have received (a) at 1.00 pm on Thursday 8 September; several hundred e-mails. I just wanted to say that the (b) at 10.30 am and 4.00 pm on Tuesday 13 September; translation into English is fully equivalent, and I hope that hon. Members scrolled down the page and spotted (c) at 9.00 am and 1.00 pm on Thursday 15 September; that particular facility. (d) at 10.30 am and 4.00 pm on Tuesday 11 October; (e) at 9.00 am and 1.00 pm on Thursday 13 October; (2) the proceedings shall be taken in the following order: Jon Trickett: We did scroll down, although after Clause 1; Schedule 1; Clause 2; Schedule 2; Clause 3; Schedule 3; doing so several hundred times we decided that all of Clause 4; Schedule 4; Clause 5; Schedule 5; Clauses 6 to 32; new them were quite similar in character. The point I wanted Clauses; new Schedules; remaining proceedings on the Bill; to make was that it is unusual to receive that number of (3) the proceedings shall (so far as not previously concluded) e-mails. Given that the Government’s ideas on S4C and be brought to a conclusion at 5.00 pm on Thursday 13 October. other serious matters have evolved, it might have been a 5 Public Bill Committee8 SEPTEMBER 2011 Public Bodies Bill [Lords] 6 reasonable idea for us to have had the opportunity to David Wright (Telford) (Lab): It is a great pleasure hear from interested members of the public before we to serve under your chairmanship, Mr Amess, and to decided how to proceed. follow the hon. Member for Arfon. On the matter of S4C is a serious matter. We know that it is a major organisation, the Opposition would be happy for a national issue in Wales. Equally important, though—or number of the sittings currently scheduled within the perhaps even more important—is the chief coroner programme motion to be devoted to evidence. We made issue, which is a serious matter. I totally accept that the that fairly clear at the Programming Sub-Committee. Government have a point of view, and we will hear it There would be an opportunity within the current argued later. The truth is that many people in our programme motion for the Government, if they chose, country, including the relatives of people in the armed to come back and say they are willing to break and take forces who have fallen, are deeply concerned about the evidence. Alternatively, the Opposition are happy to decision to press ahead with changes to the manner in add sittings to the programme motion in order to invite which we deal with the coronial service. The British people in to give evidence. I place that before the Legion has been to see me—and probably other Members, Committee because the Opposition are keen to ensure too—and said that this is not the right decision. It full scrutiny of the Bill. would have liked the opportunity to say a few words I understand that the Committee has, under Standing here, so that we could understand its point of view. We Orders, the authority and power to break and take do not necessarily have to accept what the British evidence at any time it chooses. I look to you, Mr Amess, Legion has to say about the coronial service, but the with your long-standing experience in these matters. I organisation does represent our heroes and there is no place on record the Opposition’s view that we would be difference between the various sides represented here happy to look again at the programme motion and about the esteem in which we hold it. break at any point to take evidence, or to add sittings. It would have been good—and it still may be—for us To be fair to the Government, I think there is sufficient to have found time to listen to witnesses. There are time within the programme motion to consider the Bill other people, too. I noticed that the safety in sports in some detail. We do not have a particular axe to grind ground issue, which I will refer to later, is also up for on the out-date of the Bill, but we think it would be abolition. Tens of thousands of people went on the good to have additional scrutiny and the opportunity website that No. 10 created, which is a good innovation, for witnesses to attend the Committee. to talk about what happened at Hillsborough. There will be relatives of people who died at Hillsborough The Chair: Mrs Vaz. who have a view about how safety at sports grounds can be guaranteed. They might well have wanted an opportunity to make their points. I raise these matters not in a Valerie Vaz (Walsall South) (Lab): Thank you. It is partisan way—we will be partisan from time to time—but Ms Vaz. to say that the wisdom of the House is that if we are to bridge the gulf between ourselves as politicians and the The Chair: I apologise. Ms Vaz. wider public, we have to open up our procedures and processes. No. 10 has set up this site, which is a good innovation, and said that if 100,000 people sign a Valerie Vaz: My husband, Mr Townsend, would be petition it can be debated and voted on in the House. most upset about that. It is a great pleasure to serve with you as Chair, Mr Amess, and to be in your company Another good innovation is allowing people who and that of other hon. Members. have a passionate interest in a matter being discussed by us to come here to make a point or two to us. On the I add to the call for witnesses to this Committee. As a question of how we are to conduct ourselves over the lawyer, I am concerned about some of the powers in the next few weeks, I seek your advice, Mr Amess, on Bill. I have never read any Harry Potter books. I got to whether it is still possible for the Committee to find a the first page and thought it was not for me; it was not little time, if the Government are prepared to do so, to my level. However, reading the Bill, indeed the first listen to some key witnesses. That would perhaps help clause, is like waving a magic wand and saying, the people in S4C; at least they would know that their “Expelliarmus! You are out.” That causes me, as a voice was being heard—if only briefly—by this Committee. lawyer, great concern. I have had to write to some of the Others may have points to make on the matter. bodies affected by the Bill because I am not clear what consultation has taken place. I would like to ask the Hywel Williams: I also look forward to serving under Minister: what consultation has taken place with these your chairmanship, Mr Amess, and that of your colleague bodies? We are talking about huge, important serious Mr Robertson. I am glad to be on the Committee for bodies such as the Human Tissue Authority and the this wide-ranging Bill. Human Fertilisation and Embryology Authority. They As a Welsh Member, my particular interest is in all have brand names. They are going to be shoved into Sianel Pedwar Cymru, or S4C. I am glad to see here a an organisation. I have sat on the Health Committee, so substantial contingent from Wales, and of people who I have seen and heard the way the Care Quality Commission have a Welsh interest. I am sure we will contribute to the operates and I have serious concerns about that. debate in general, as well as on that particular issue. I would like to know what consultation has taken I want to support the points about evidence made by place, and whether we can look at the possibility of the hon. Member for Hemsworth. With other colleagues, hearing evidence from some of these serious bodies, I have met people from Wales who now see they have because the powers in the Bill are huge. The Minister missed their opportunity to make their points in evidence. might happen to be in a good mood on one day, and That would have been useful. We will obviously have a decide to absorb and get rid of some of the bodies, but debate on S4C a little later, and I look forward to that. he might be in another mood on another day and decide 7 Public Bill CommitteeHOUSE OF COMMONS Public Bodies Bill [Lords] 8

[Valerie Vaz] evidence session. The procedure is only just over two years old. We are in new territory here. If we want to that he does not want to do so. As someone who did break precedent—I am looking at the two Whips—I constitutional law, that rankles. I plead with the Minister know that things are normally done through the usual to allow those bodies to come forward; whether they do channels, and there could be a discussion when we so in Welsh or English, I do not mind. break at 10.25 am. It is, however, a matter for the Committee ordinarily in consideration of the resolution 9.15 am of its Programming Sub-Committee, to determine whether it wants to take evidence. Of course, I chaired that Susan Elan Jones (Clwyd South) (Lab): It is a great committee. Hon. Members should know that it has not pleasure to serve under your chairmanship, Mr Amess. been the practice for Committees on Bills starting in the I would like to express my view that it is imperative that Lords to take oral evidence, but there is no prohibition witnesses are called to the Committee, simply to broaden in the Standing Orders on their doing so. This is the first and deepen our knowledge of certain issues. I, too, have time that I, whether as a Chairman or ordinary Member, received many e-mails about S4C, which reflects in no have had all these e-mails. I am not even computer small part how important this issue is across Wales. If literate and I do not quite understand, although I am one goes back into the history of the Welsh-language now told there is an English translation. This is a new channel, when Welsh-language broadcasting was first phenomenon and it is entirely up to the Committee to mentioned in this House—I think it was in the 1930s, decide. although obviously I do not remember that—the speaker was laughed at. Things have changed so much, however, Mr Hurd: Thank you for that, Mr Amess. I am sure and one might argue that the reason why S4C exists is that the Committee will have noted your remarks about because listening took place at a very senior level. The your susceptibility to flattery. You can expect to bathe opportunity to call witnesses is important. Many Members in the stuff over the next few sittings. In a way, we have of Parliament have said that they were unaware of the had this debate before. The Government take great strength of feeling until receiving such e-mails, and it pride in our commitment to transparency and genuine would be even better if we heard from witnesses in consultation. But the programme motion was agreed at person as well as via e-mail. the meeting of the Programming Sub-Committee and we will not change our mind. You made it clear what is The Chair: Order. Unless anyone else wants to considered precedent and process here. I think the contribute—we have until 9.30 am for the Minister to Committee needs to be reminded that evidence sessions respond—I thought that this would be an appropriate were never programmed for Bills starting in the Lords moment to return to what the hon. Member for Hemsworth under the previous Administration. So the current passion has said. for doing so seems to be a conversion on the road to Committee Room 9. We know full well that the Bill contains substantial Mr Mark Williams (Ceredigion) (LD): I apologise for powers, as the hon. Member for Walsall South said. interrupting you, Mr Amess. I am, like others, grateful Some of the issues underlying the proposed reforms are for the opportunity to endorse the comments that the extremely emotive, such as the Coroners Bill and S4C. hon. Member for Clwyd South, in particular, has made We understand that completely. The debate so far has about S4C and the need to broaden the information missed an important point in terms of the Bill’s objectives. base of members of the Committee. She and I both It is an enabling Bill, which allows Departments and have the luxury of serving on the Welsh Affairs Committee Ministers to come to the House with secondary legislation and of having undertaken a detailed inquiry, and, of on proposed reforms. Clause 10 makes it quite clear course, there was also an extensive debate in the House that in each of those cases there is to be appropriate and of Lords on the matter. The debate has moved on adequate consultation on the specific proposed reforms. sufficiently in Wales for many of us who have a Welsh Therefore the public will have an opportunity at that interest to take evidence from S4C and from other secondary stage to make their views known. As you interested parties such as Cymdeithas, but I suspect that made clear right at the start, Mr Amess, there is nothing there is a slight bafflement or bemusement among other to stop the public making written submissions to the members of the Committee. The opportunity to call Committee at this early stage. So I must make it clear witnesses, not least because the Opposition have said that the Government are not prepared to change their that that could happen within the existing time frame, mind. would be immensely helpful. Jon Trickett: We do not want to put the Minister or The Chair: Order. I apologise to Mr Williams; I had other members of the governing parties in a difficult not realised that he wanted to speak. I would still like to position by forcing a Division, which will look as though respond before the Minister speaks. I thank the hon. they are attempting to prevent the British Legion or Member for Hemsworth for his kind words; I am very S4C from making their views known. I do not want to susceptible to flattery. I say to the Minister that I have force a Division, but I am prepared to do so. When the not had botox, although I am sure that I need it. I will orders are placed before the House, will there be an now respond to the hon. Member for Hemsworth, who opportunity for the British Legion or S4C to appear kindly gave me advance warning on what he intended before the House to give their opinions? I believe that is to say. not the case, but can the Minister confirm that? I wanted to say to Members at the outset that this Mr Hurd: I would be very surprised if all the parties whole procedure of taking evidence before the Committee that feel passionately about the issues that are being stages of Bills is quite new; indeed, I chaired the first debated feel that they are short of opportunities to 9 Public Bill Committee8 SEPTEMBER 2011 Public Bodies Bill [Lords] 10 make their case known to Ministers. As the hon. Member Jon Trickett: If all the votes are as close as that, we for Hemsworth said earlier, both the emotive issues could be in for an interesting sitting. I dare say we will mentioned so far have been extensively debated in the all be hanging on the edge of our seats as the votes are House of Lords. As we speak, the Departments responsible counted. Nonetheless, one would hope that there will for those reforms are in consultation with the bodies. not be too many Divisions, as, in principle, there should There is a very active process of engagement on these not be a great gap between the parties. The truth is that issues. But there is no precedent for evidence sessions the non-departmental public bodies, which are more for Bills that start in the Lords. It is a duplication of popularly called quangos, have grown exponentially scrutiny as far as we are concerned and we are not over the years and that is not something that anyone prepared to change our mind. can view with great pride. All parties, when in government, Question put. have seen quangos being created. To an extent, they are unaccountable bodies because they stand independent The Committee divided: Ayes 10, Noes 9. of the state. They stand independent from the normal Division No. 1] agencies of the state, which report through Parliament and via Ministers. They also stand aloof from the AYES general community. Bray, Angie Harrington, Richard A few moments ago, I referred to the gap that appears Crabb, Stephen Heath, Mr David to be opening up between the governed and those who Davies, Glyn Hurd, Mr Nick govern. The idea of an unaccountable state and of Elphicke, Charlie Mosley, Stephen bureaucracies that are frequently enormous and remote Gyimah, Mr Sam Raab, Mr Dominic is one that no one can view with equanimity. In principle, we are all agreed that there should be a careful review. It NOES is good that the Government have agreed on an ongoing Ashworth, Jonathan Vaz, Valerie basis, as was said in the House yesterday, to review the Blackman-Woods, Roberta Williams, Hywel agencies that have been created. We want to agree with Jones, Susan Elan the general principle of the Bill. Moreover, we want to Nandy, Lisa Williams, Mr Mark deal expeditiously with the Bill. We will not be indulging Trickett, Jon Wright, David in any delaying tactics. At the same time, Parliament itself determined that Question accordingly agreed to. the exercising of a particular public function, whether it Resolved, is S4C, the coronial service or whatever, should be done That, subject to the discretion of the Chairman, any written in an independent way. Ministers must have had their evidence received by the Committee shall be reported to the reasons for saying that this would be better dealt with at House for publication.—(Mr Hurd) arm’s length from the normal systems of accountability. Therefore, it is incumbent on us to look carefully at the The Chair: Copies of memorandums that the Committee changes that are being made. As the Opposition party, receives will be made available in the Committee Room. it is our duty to ask searching questions both about the If anyone has a problem getting the papers, perhaps powers that the Minister is giving to himself and his they will kindly let us know. successors and about the agencies that he intends to abolish, change, merge, adjust or reform. Our purpose is to address the meat of the Bill—the schedules—in Clause 1 some detail, but also to ask questions about the powers that the Minister has given himself. POWER TO ABOLISH 9.30 am Jon Trickett: I beg to move amendment 30, in Clause 1 is one of the five clauses that deal with clause 1, page 1, line 9, at end insert ‘as set out in ministerial powers to change the structure of these Regulations,’. non-departmental bodies, and it has two parts to it. The first part gives the power to a Minister to abolish, by order, bodies or offices specified in schedule 1. The The Chair: With this it will be convenient to discuss Committee will gather that we have no problem with a the following: amendment 31, in clause 1, page 1, line 12, Minister holding that power, provided that it is exercised after ‘trustees’, insert ‘as set out in Regulations.’. in a reasonable way. Later in the Bill, we will see that Amendment 34, in clause 1, page 1, line 12, leave out other powers might be exercised in a way that is not ‘or other unincorporated body of persons.’. reasonable, but for the moment we have no quarrel with Amendment 32, in clause 1, page 1, line 12, at end Ministers having the power to abolish such bodies, insert— provided that that is done appropriately. ‘(f) a registered charity.’. However, the second part of clause 1 worries me. Amendment 35, in clause 1, page 1, line 12, at end When we reflect on the quango state, we recall that insert— those institutions were created because Parliament decided that their functions were necessary to the community—they ‘(f) a society registered or deemed to be registered under were in the public interest—but that they should not be the Co-operative and Community Benefit Societies and Credit Unions Act 1965.’. exercised by Ministers directly. Amendment 39, in clause 1, page 1, line 12, at end Valerie Vaz: Is my hon. Friend aware of any other insert— legislation enacted before now that does what the Bill ‘(f) a community benefit society.’. does? 11 Public Bill CommitteeHOUSE OF COMMONS Public Bodies Bill [Lords] 12

Jon Trickett: From time to time, all Governments of functions that, frankly, Ministers ought not to get involved whatever party have attempted to take what might be in. On human embryology, for example, it is clear that described as Henry VIII powers. Henry VIII himself the most difficult ethical, scientific and technical problems certainly took those powers. Whether he used an Act of are connected with it. On S4C, politicians ought not to Parliament to do that, I am not sure. Perhaps he just get involved in how a television station is organised. took administrative measures. However, the truth is They definitely ought not to be engaged in the process that all Ministers are tempted to do that. Generally, the of human embryology. We can provide guidance, but at two Houses will look with some dismay at such powers. the end of the day some of the questions are very Many Members on the other side of the Committee difficult. Therefore, it will be necessary for those functions believe themselves to be, and no doubt are, libertarians to continue to be exercised, but the Minister says that and do not want to see an enhanced power for the we will not exercise them via a quango. centralised state. The Minister is a reasonable man. He What does the Minister say he will do in clause 1(3)? would not wish to create an over-mighty Executive who He says that he will set up an “eligible person” who will were not properly accountable to Parliament. When we be required to exercise the functions. That essentially get to the relevant clauses, we will want to ask searching explains what clause 1 does. Clauses 2, 3, 4 and 5 include questions, as Members in the other place did—and the references to eligible persons, because in some cases Bill is very different as a consequence. quangos will not be abolished but merged and their functions will be handed on to a successor body. That is Hywel Williams: Perhaps the hon. Gentleman will the core of the whole Bill and it is the knotty problem recall that in the previous Parliament, there was a great with which the Minister must have wrestled with his deal of controversy and some consternation among advisers. Conservative Members about the legislative competence I would suggest that the Minister has had problems. order mechanism that was used to confer powers on the None of the solutions are totally satisfactory and our Welsh Assembly Government. Some very good points amendments are intended to help. I imagine that the were made. I cannot at the moment spot any hon. problem has been difficult for the Minister. He suggests Members who might have made those points, but that five eligible persons. I am not a lawyer, but “eligible was a controversy then and the argument seemed to be person” is a legal expression. Clearly, a person can have going the other way at that time. a corporeal form, like most members of the Committee—as far as I know, we are all persons— Jon Trickett: I thank the hon. Gentleman for his intervention. I will look with interest at Hansard and Roberta Blackman-Woods (City of Durham) (Lab): particularly at those comments made by members of Highly debatable. the Committee who were here in the previous Parliament, although there are not many of them. Perhaps we can Jon Trickett: It is a debatable point. An institution use some of those phrases to help our thinking—to can also be a legal person, as in law, non-human beings clarify what is in our own minds. can also be persons. Therefore, the term “eligible person” The point that I was attempting to reach relates to refers not to you and me, Mr Amess, but to bodies clause 1(3). To follow the thread of the argument that I corporate. The problem is that, if we look at was making, at the time when each of the bodies was clause 1(3)(e)—I will do this in more detail shortly—we created, Parliament had established to its own satisfaction will see that it contains an extraordinary two separate that there was a social need or a public function that bodies corporate. One is “a body of trustees”—I will needed to be met or exercised. At that stage, it decided come to that in a moment—but what is alarming is the that that function should be exercised by an independent “unincorporated body of persons.” As I have said, I am body albeit a state body. The Government propose that not a lawyer, so I went to Google—perhaps even you do that power should either cease or—this is more likely—be this, Mr Amess—and typed “unincorporated body of exercised in another way, in another institutional form. persons.” The first thing that appeared was that an What does clause 1(3)(a) to (e) do? In effect, it says, unincorporated body of persons is a legal nonentity. So “We acknowledge that, when we abolish a particular my mate Bill and his two friends who go down to the body”—let us take safety at sports grounds as an Brown Cow in our village could, if they had a committee example—“it may contain functions or residual functions meeting, be argued to be an unincorporated body of that we would like to see continue, but we don’t want persons. They would have no legal reality— them to be exercised by a quango.” That is the core of the Bill. The Ministers and his advisers have clearly David Wright: Brown Cow Incorporated. gone away and thought, “Hang on a minute, this is a great idea—let’s abolish quangos.” We all applaud that. Jon Trickett: Or the Brown Cow (Exercise of State We do not want to see more quangos than necessary. Functions) Committee. That is quite a disturbing proposal. However, if we stop and think for a minute, what We will talk more about it in a moment, but that is not a happens to the function or residual functions carried legal entity. It is not an eligible person and frankly, it out by a quango? should not be in the Bill. It is extraordinary to think we That leaves the Minister with a problem. His solution could hand over a state function to an unincorporated is to create some other bodies to carry out the functions body of persons. with which the quangos are currently charged. They will not, however, be called quangos, but something David Wright: I am interested in the argument my different. They will be some other kind of institution. hon. Friend is developing. One of the key challenges for That is the problem that all Governments have faced. the Government here is that a number of these bodies How do we deal with this? These are sometimes delicate have fairly large consultative groups related to them. 13 Public Bill Committee8 SEPTEMBER 2011 Public Bodies Bill [Lords] 14

Even though the powers of the body that are to be We all have friends or relatives who go, or we ourselves transferred may rest with an individual or a group of go, to football matches, rugby matches, or whatever individuals, many of these organisations have large sport we follow. If the Minister decides to proceed with consultative structures that debate with the public about the abolition, how will he decide how the Football their strategic priorities. The case could be made that Licensing Authority will be administered and how will the consultative approach of such an organisation would he decide the type of eligible person? None of the be narrowed by its transfer to an individual or perhaps independent bodies listed in subsection (3)(c), (d) and one or two individuals as he is outlining. (e) would work. They would not work very well for S4C, and for things such as embryology and safety at sports grounds they simply would not work. We will try to Jon Trickett: That is a very important point. That is help by suggesting other bodies. why after much discussion we have tabled amendments That leaves the Minister with renationalising the function. that call on the Minister to produce regulations that we Centralisation and enhancing the power of the state is can then scrutinise. The regulations must indicate precisely at the core of the Bill. I will demonstrate that by how all those structures are going to be incorporated addressing the proposal in detail and explaining our into the instrument that the Minister is creating. amendments. Subsection (3)(a) and (b)— Let us take safety at sports grounds as an example. I referred to Hillsborough a few moments ago. There is Hywel Williams: I am sorry to intervene on the hon. clearly a problem from time to time with large crowds in Gentleman while he is in mid-flow, but I refer him to sporting venues, who are sometimes difficult to control. amendment 35, which is in the names of the hon. We have seen that throughout the world. We saw the Members for Dover and for Esher and Walton. That most devastating series of personal tragedies at amendment proposes a system that works—co-ops—but Hillsborough, and elsewhere. I believe my hon. Friend it is not mentioned in subsection (3) and is obvious by the Member for Leicester South has two sports grounds its exclusion. in his constituency. He will be concerned that the quango that deals with this is to be abolished. He will want some assurance that that function will continue and Jon Trickett: It is odd that a Government who aspire that it will be handed over to a proper body. to create the big society seem to be narrowing it down. I do not claim that quangos are part of the big society—they The proposal that it can be handed over to Charlie are part of the bureaucratic state and ought to be and his mates at the Brown Cow or a similar group in a accountable—and I am not convinced that the answer is pub in Leicester is extraordinary. The people of Leicester simply to renationalise those functions. Yetsubsection (3)(a) want to know that the lives of the people who go to and (b) effectively states that the residual functions that matches at those rugby and football grounds are properly we have just discussed should be repatriated into the protected. Later we will want to know how the bodies state. The Government say that they are a libertarian that will be abolished were chosen, but for the moment operation and that they want to see the diminution of we want to know which bodies will be handed over to the state and the expansion of the civil society, the which types or class of eligible person. After all, it is good society, or whatever expression we agree on. It is odd to imagine that a private company, even one that is extraordinary that the Conservative party, supported not profit making and is limited by guarantee could perhaps—I do not know, we will see—by the Lib Dems, manage the safety of the people of Leicester. That is saying, “We want to renationalise a whole series of cannot be right. There is no indication in the Bill exactly functions.” The Labour party, in our modesty, as the which legal vehicle will be used for which body that will true agency of the good society, wants to say, “Hang on be abolished. Yet the power of abolition and the concept a minute. Do you really want to renationalise things like of eligible person are in the same clause. embryology research, safety at sports grounds, S4C, or any of the other functions?” I do not think so. Valerie Vaz: I am not sure whether my hon. Friend knows, but I was at a football match at the time of the Roberta Blackman-Woods: My hon. Friend is making Hillsborough disaster and then we had the Taylor report. an excellent speech. Does he agree that the powers Does my hon. Friend agree that the Taylor report made the Government will enact for themselves are truly a number of recommendations, and that the purpose of extraordinary? Does he agree with the Public the Football Licensing Authority is to implement those Administration Committee’s report that states that the recommendations? review represents a missed opportunity for the Government, because, instead of bringing all of those powers unto themselves, they could transfer them to charities and 9.45 am mutuals, which seem amazingly absent from the list? Jon Trickett: I did not know that my hon. Friend had been there, but I thank her for her comment. The truth Jon Trickett: My hon. Friend reinforces the point in a is that, following the disaster, everyone in the country very succinct way. There may be some Divisions, but I was alarmed at what had happened. The Government hope that is not the case. The Minister is a reasonable at the time, with the support of every party, agreed a person and we hope to convince him. The Government way forward: the standards that should be expected have already voted to exclude witnesses. Frankly, I from grounds of a certain size and calibre, and a way in would be amazed, looking at the manifestos and personal which they could be financed; and a way in which safety political credos of Government members of the Committee, at football grounds could be secured and monitored. As if any one of them had ever said that they believed in part of that, as the Committee is aware, it was recommended the renationalisation of state functions. Clearly, that is that a separate authority should be established. what the clause will achieve. Clause 1(3)(a) clearly states 15 Public Bill CommitteeHOUSE OF COMMONS Public Bodies Bill [Lords] 16

[Jon Trickett] put any more ideas into Ministers’ heads about future projects for the next five-year plan of what they want to that the Minister regards—this is the core agenda—an repatriate, but is there is an inconsistency here? They “eligible person”, who will be the recipient of these want to have control over S4C, but not over Channel 4. residual functions, to be a Minister, a Scottish Minister I am not suggesting that they bring Channel 4 into the or a Minister of one of the other devolved Administrations. Bill, but what does the Minister have against S4C that There is no other way of putting it: there is a democratic he does not have against Channel 4? deficit in how it works at the moment. Is it beyond the wit of Parliament to come up with other ways of Jon Trickett: Of course, we have no idea whether the increasing democratic accountability without repatriating Minister wants Ministers to be in charge of S4C. If they functions back to the central state? do, let us hope that they can speak Welsh, because that seems to be a primary consideration. He will not suggest (Wigan) (Lab): This relates back to the that S4C should be nationalised, rather I think that he points that were made by many of my hon. Friends will look at options (c), (d) or (e) in clause 1. Once he earlier about the wide-ranging powers in the Bill and has decided the class, the problem for the Minister is the failure of the Committee to take evidence. The deciding which instrument will administer the television problem is that the independence of many of these channel. That is a major problem, and I will explain bodies is crucial. I notice that, after consultation, Ministers why in a second. changed their minds about the original decision to include the Office of the Children’s Commissioner. Having Mr Williams: As a point of clarification, the Government worked very closely with the Children’s Commissioner sensibly saw the light during the House of Lords over many years, I know that the independence of that proceedings and actually did take Channel 4 out of the body is essential. Because of the wide-ranging powers remit of the Bill, which is something that some of us in the clause, we have no guarantee about where those aspire to in this Committee as well. bodies will be placed—not just those in the Bill, but for any body that the Minister chooses to pick on in the future. That is why, though it is very entertaining, my Jon Trickett: I thank the hon. Gentleman for bringing hon. Friend’s speech and the point that he is making is that to the Committee’s attention. It is an important very important. point, which brings out an inconsistency between the way in which the Government want to administer the United Kingdom as a whole and the different rules that Jon Trickett: I am glad that my hon. Friend underlined seem to apply to Wales. If that message is being given, it the points that I am trying to make. It is important to is unfortunate. I do not want to get too much into S4C, communicate my concern about this issue properly. It is as I am using it to exemplify the argument, but the good to do so in a reasonably light-hearted way, but points are interesting. there are some serious problems in the way that this will operate. Let us imagine that we are further down the track, and we have an agency that will be abolished, but it has We have no idea whatever about which body, or class core functions that we want to continue. Let us imagine of bodies, will be used for each of the organisations that further that we have decided that it should not be are in schedule 1. We have do not have a clue. Clause 1(3) repatriated into the state and that it should be part of indicates the only kind of eligible person that the Minister wider society. Three options are available: envisages to be fit to be a recipient of the residual functions. It may be that some residual functions could “(c) a company limited by guarantee, be appropriated back into the civil service. We are not (d) a community interest company, or opposed to that in principle, but we want assurance, (e) a body of trustees”. either in this debate or in the debate on schedule 1, that I was wrong. There are actually four, because there is none of the more sensitive functions—most of them are the daft “unincorporated body”option, which the Minister sensitive—will be exercised by politicians directly. For must withdraw. Let us say that he decides on (c), the example, control of a TV station ought to be nowhere problem is which company limited by guarantee—there near a Minister. That is currently the case. are thousands in the country—will then be asked to There is a secondary problem with the eligible person administer that particular function. How will that be issue. Once the Minister decides what class of eligible decided? person is appropriate for which residual function, the next job is for the Minister to then decide, and no doubt Mr Hurd: The hon. Gentleman described me as submit it to the House in due course, which company or reasonable, which obviously alarmed me, but I will ask other vehicle within that class will be used to carry out this question reasonably: is he missing or deliberately that function. Let us take, for example, a company skirting round this absolutely fundamental point? Exactly limited by guarantee. Let us say, for example, that the the definition of certainty that he and other colleagues Minister thinks that S4C being administered by a company are seeking will be forthcoming at the appropriate point limited by guarantee is a good idea. First, he would when Ministers, who are responsible for the reforms in have to explain why he wanted such a company. Secondly, their Departments, have concluded the consultation there is a possibly more important question of which that is required by this enabling Bill. Draft statutory company should exercise that function. instruments will then be laid for consideration by Parliament at the secondary stage, at which point the full parliamentary Susan Elan Jones: My hon. Friend well makes the scrutiny process drills down on that particular reform points about ministerial control over a television channel. and that specific proposal of a transfer to a specific Does he agree that it is extraordinary? I am reluctant to organisation. Not having the detail at this stage may be 17 Public Bill Committee8 SEPTEMBER 2011 Public Bodies Bill [Lords] 18 frustrating for the Committee, but can he not see that David Wright: Does my hon. Friend agree that, because further down the track—to use his words—exactly that of the cost and complexity of the tendering process, a clarity will be available? Minister may be tempted to decide that it is best to keep the powers of that organisation themselves? We all Jon Trickett: That was a helpful intervention. The accept, I think, that we would like to see some of these Minister is a reasonable man, but he is doing some bodies and their functions transferred out to community- unreasonable things. I want to help him with his own based organisations or co-operatives, but the cost of side a bit, so some things that he does can be unreasonable doing so may well drive a Minister to decide that it is far from time to time. Let us be clear that we disagree on cheaper and easier to keep the power themselves. some things. Jon Trickett: That is precisely the point that I was (Leicester South) (Lab): I concur coming to. It is difficult to imagine that the tendering with my hon. Friend; the Minister is entirely reasonable. process is the right way in which to do it. My hon. We had exchanges in the House yesterday and he gave Friend is right; the temptation will be to go for what I me a reasonable response. He rightly talks about the will provocatively describe as nationalisation—to take consultation process, but, as someone who has worked the powers back in house—and we will want to resist in Government, I know that it is inconceivable that that. officials and Ministers are not having discussions about such bodies— The tendering process is complex and extremely expensive. We have asked the Minister to publish regulations, The Parliamentary Secretary, Office of the Leader of telling us how he intends to proceed. He does not the House of Commons (Mr David Heath): Everyone necessarily have to do it now, but he can agree to our knows that they are. amendment and produce the regulations. Then we could debate how a tendering process would work. I think Jonathan Ashworth: They are having discussions about something other than tendering will be used: the Minister these bodies, so we can have more detail about where will set up made-for-purpose bodies. I think they will they are going to end up. say, “It is too complicated, too expensive and too difficult to tender. How do we secure the right levels of technical 10 am expertise and independence from the existing sector?” Civil servants will say to the Minister, “We have had a Jon Trickett: That is a very helpful point. My hon. good idea, Minister. Set up a company limited by Friend has a distinguished record of service in Government. guarantee.” I imagine that is what is currently being He knows how Government work, and how sometimes whispered in the Minister’s ear. Government do not work, but we will not discuss that because that has been the subject of various books to The problem with that is cronyism. The Minister which we do not want to refer here. He is right that the would never be tempted into cronyism, but there has Minister is clearly quite advanced in some of his been a debate in the press about the Secretary of State considerations, but my point is a different one. If the for Education, who has handed over large sums to the Committee bears with me, I want to come on to the New Schools Network to deal with free schools. Whether general principle behind the types of “eligible person” or not we agree with free schools is a separate issue. on which he has latched—none of which work for one They may be a new set of quangos, but we will leave reason or another. We have tabled amendments which, that debate to another day. The point is that the New in the cases of (c) (d) and parts of (e), ask the Minister Schools Network is managed by a possibly very able to bring forward regulations, because we want to know young person who was known to the Secretary of State how this will work before we can agree on the kind of while he was an Opposition Member, and she is now the powers that he is arrogating to himself. If he cannot recipient of very large amounts of money. It may be convince us how this will work, we have to question that she is the only person in the country who is capable whether the Committee should give him the powers that of carrying out the function. However, the Secretary of he seeks. State left himself open to the charge of cronyism. Once the Minister has decided on the class of vehicle to use, how will he choose the appropriate instrument to The Chair: Order. I have been listening carefully to carry out those residual functions? There are thousands how the debate is being pursued. I have been very and thousands of bodies corporate that come under the lenient in not interrupting, as many of these issues are title of “company limited by guarantee”. He has two down to be debated later. I have already decided that ways in which to proceed. He can go out to tender, there will not be a clause stand part debate on clause 1. I which is clean, but there may be no single body corporate ask the hon. Gentleman to return to the specific within that class that is fit to tender. We need to know amendments he is addressing. how he will decide into which class the particular residual function will go and how he will make such decisions, so I want a generic discussion rather than one that deals Jon Trickett: Thank you for your guidance, Mr Amess. with each specific item. Secondly, once he has decided I said you would be firm but fair. I am surprised to find the class of instrument, how will he decide which corporate the firmness applied to me, but no doubt that is fair. body will give that residual function? If we think about I return to the amendment to clause 1(3)(c), which it, if we decide to go out to tender for S4C or for any of calls for regulations to be published by the Minister. I the other bodies, we invite all companies limited by want regulations published because I want to know how guarantee in the country to make a submission. Think the Minister will decide which company within that of the complexity of the tender document and the class is to be the one that administers the residual tender judgments that will then have to be made. function. I will keep to that point, which is the one I 19 Public Bill CommitteeHOUSE OF COMMONS Public Bodies Bill [Lords] 20

[Jon Trickett] between the interests of its members and the wider community interest. It is most clear in a plc that the thought I was making, though perhaps I had strayed. duty is to both the shareholders and the customers. The regulations should indicate how the Minister is to There is always that conflict and I worry that unless the do that, and whether he will be minded to set up regulations are specific and precise, the budgets, assets purpose-built bodies outside the public sector. Those or personnel functions of eligible persons (c), (d) and regulations should indicate the considerations he will (e) might be used to benefit the members of the company bear in mind at that point. Otherwise, if he sets up rather than the wider community interest—the residual purpose-built companies to handle public functions function I described earlier. using public money, he will leave himself open, if he is There would be outrage with the Administration, and not careful, to the charge of cronyism. That was the with us if we voted in favour, if, for example, administration point I was trying to make, and I hope I have made it of youth justice fell under a body under paragraph (c) more relevant to the amendment. We want to hear how —a company limited by guarantee—that used its obligations he intends to do that. to its members to reimburse them with exorbitant amounts I want to deal in detail with the kind of instruments at public expense or by disposing of assets. The lack of or eligible persons the Minister is proposing and explain, an asset lock worries me. Regulations should indicate given the context I have just provided, why we have exactly how the Minister will deal with those problems. tabled the amendment. I have already asked him to To be fair to him, he has totally excluded plcs from indicate how he will decide, if the Committee and the being eligible persons, and I congratulate him on that. It House proceed with the idea that the five bodies should is the right decision and we support it, but vehicles (c), be the eligible persons. How will he decide which eligible (d) and (e), which he wants to specify as eligible persons, person, or category of eligible person, is the most raise problems for us. Without the regulations being appropriate for each function? That is why we have published, it is difficult to see how he intends to deal tabled the amendment calling for regulations. Having with the problems. done that, will he then indicate precisely how he intends Our amendments would help the Minister by removing to decide which instrument to use within that class? the legal nonentity of “unincorporated body of persons” I also want the Minister to address the point exemplified under paragraph (e), by asking him to make regulations in the amendments. Will he table regulations, as in my indicating how he intends to deal with the points that I amendments, which indicate how ministerial or democratic have raised and by suggesting two other forms of corporate control will be exercised over eligible persons (c), (d) vehicle that would do both the things that I want, first and (e), if it has been decided that the residual function by guaranteeing an asset lock, so that the assets are not will reside with one of those three bodies? That is the used for the private interests of the members of the reason why we tabled amendments asking for detail in company and, secondly, by ensuring that the company regulations. We would like the regulations to address works only in the interests of the community and not in three issues in particular. I hope to convince you, Mr Amess, the interests of its members. that the questions the regulations need to address indicate that the instruments the Minister proposes are not the appropriate eligible persons. With that in mind, I proceed 10.15 am to the main part of what I want to say. I do not want to bore the Committee, because I found The regulations should address three issues, which we it incredibly tedious, but we can look in some detail at will seek absolute assurance on. I am particularly addressing the kind of institutions that the Minister is paragraphs (c), (d) and (e), because it is clear that recommending—I assume that they were recommended eligible persons covered by paragraphs (a) and (b) will to him by his civil servants—and none of them quite be under direct ministerial and civil service control. works. The Government have produced an organogram Paragraphs (c), (d) and (e) cover independent bodies of that looks at all the various institutional forms that are one kind or another—we could say that they reinvent not-for-profit companies and clearly illustrates my point: the quango in a different corporate form. First, how none of the three institutions that he is talking about, will we ensure that the assets transferred as part of the companies limited by guarantee, community interest exercise of the residual function are retained for public companies or trusts, has an asset lock that prevents the use? We want to know how we will secure an asset lock, assets from being used for the private interests of the which should be part of the regulations. Secondly, we company’s members. Nor is there a guarantee in any of want certainty about how the budgets of the bodies will those institutions that they will operate purely in the be managed. Again, that is to secure the public interest community interest. and should also be in the regulations. Finally, how will To some extent, that might be locked up with a the personnel issues of eligible persons (c), (d) and (e) contractual arrangement, but the truth is that it is be dealt with in the regulations to ensure that the kinds difficult to imagine how a contractual arrangement can of salaries paid to chief executives do not continue? If be so structured as to prevent the members of the we read the newspapers, we will be well aware that some company saying, “We will meet the community objectives, quango chief executives are being paid totally ridiculous but in doing so, we are going to harness ourselves by sums. I accept that quite a bit of that happened on our using the profit motive and reimbursing ourselves.” watch. I am not making a partisan point. The regulations Remember, we already have a quango with its chief should indicate how we will control all three kinds of executive on £700,000 a year. Some of these people body. might be tempted to give themselves pay rises if we put My general point about paragraphs (c), (d) and (e) them into the private not-for profit sector. There is a goes to the heart of the argument. In any independent distinction between paying dividends to shareholders or private corporate body, there will normally be conflict and reimbursing executives. 21 Public Bill Committee8 SEPTEMBER 2011 Public Bodies Bill [Lords] 22

I want to see all those things addressed in the regulations around it is for the Minister to make regulations, as our or I shall remain totally unconvinced. I am prepared to amendments would require him to do, that clearly indicate produce the evidence, but I will not, because other how he intends to deal with this problem of dual people wish to speak, that paragraphs (c), (d) or (e) have accountability. The central problem in clause 1 is that a neither an asset lock nor a singular commitment to the private institution, whether a co-op or a company limited community interest. by guarantee, is obliged to look after its members, but We tabled two further amendments. Those suggested the rest of society expects it to carry out its objectives other corporate vehicles that would achieve what the with no reference to the private interests of its members. Minister wants, but which would have both an asset lock and a commitment to the community interest. Roberta Blackman-Woods: Is not the point about I have had to table a third amendment on co-ops. I regulations that they will set out some of the detail mention that because I know that the hon. Members for about the selection processes and the safeguards that Dover and for Esher and Walton have tabled an amendment could be put in place? It is the lack of detail about how on co-ops. We are very much in favour of co-ops. It may the new powers in the Bill will be exercised that is giving be a late conversion, but the Government share that the Opposition such a problem with clause 1. commitment nowadays. That is good and welcome. Jon Trickett: My hon. Friend has given me a lesson in Generally speaking, co-ops have to operate in the brevity. Perhaps I could have said all that I have said interest of their members, whether it is the workers or over the past hour in three minutes. You have got the those who own the shares. That is a duty on most wrong guy, I am afraid, Mr Amess. co-ops. We want institutions that serve the public. The Let me come to the point. We spoke to the Library hon. Member for Dover has to convince the Committee and got a Library note, and we spoke to various lawyers that a co-op can work in the interests of the community, who specialise in this area. Of course, in opposition we and not in the interests of its members. Otherwise, the have no support from the civil service. We believe that public will say, “What has happened? They’ve abolished including a registered charity and a community interest a quango and replaced it with a co-op, and the co-op is society as eligible persons in clause 1 would achieve operating on behalf of its members and not on behalf what the Minister wants and provide the reassurances of the residual function that was left behind after the that we and the wider public need. Neither of those quango was abolished.” bodies can operate purely in the interests of its members, and a registered charity has to operate according to Charlie Elphicke (Dover) (Con): Does that mean that charitable objectives. It is extraordinary that a Government the hon. Gentleman therefore has a problem with committed to the big society have not included registered foundation trusts in hospitals? charities. Why have they not done so? We included registered charities in our amendments as a solution to Jon Trickett: It depends on how the institution is the problem. structured. That is why we are asking for regulations to Community interest societies are similar. They have be published so we can see how this will work. We are an asset lock and they are obliged to work in the not opposed to this. We will not vote against it. If we interests of the wider community rather than in the are expected to vote for something, it is not unreasonable interests of their members. Even charities do not have for us know what it implies. We do not want to be an asset lock, so if the Minister agrees that they might trapped into a situation a year down the line where we be a useful instrument, we would require him to explain, have agreed, without having seen the regulations as either in regulations or in his response, how he intends we want to, to something that in effect creates a private to secure that. After all, part of the Bill concerns the institution that begins to reimburse itself. That is the transfer of assets, and we may hand over buildings or problem with co-ops sui generis. I also tabled an amendment large amounts of land. What if a company decides to about co-ops, although I have withdrawn it, because flog them off and use part of the assets to reimburse they present a knotty problem. How will a co-op, which itself? We need an asset lock. That is established in is obliged to operate in the interests of its members, at charity law; almost all big society organisations and the same time operate in the wider community interest? literature describe the need for an asset lock. I make To go back to sports grounds, for example, the these points not to delay the Committee—I promised community interest is that the sports ground is properly speed and expedition—but because they are serious constructed and managed. If the sports ground’s residual matters that we want the Minister to address before we body becomes a co-op, if we are not careful the primary decide whether to press the amendment to a vote. duty of the co-op will be to its members rather than to 10.25 am ensuring the safety of the sports ground. The objective of the co-op is to protect the sports grounds, but its The Chair adjourned the Committee without Question primary duty in law is to its members. That is the put (Standing Order No. 88). problem with all the proposed instruments, and the way Adjourned till this day at One o’clock.