HC Deb 11 May 1978 vol 949 cc1550-63
Mr. Richard Wainwright

I beg to move Amendment No. 1, in page 1, line 7, at end insert 'for a period of five years from the formation of the Agency'. The purpose of this amendment is to give the agency a clear but definite period of five years in which either to establish itself so well that co-operatives and the co-operative movement will be able to take it over and assume responsibility for it, or to have shown that it is really redundant and instead of leading a sort of half-life simply as a vehicle for Government patronage it should decorously expire.

As my right hon. Friend the Member for Orkney and Shetland (Mr. Grimond) said on Second Reading, we believe that if the Agency is to succeed in the long term it should become an agency run by co-operatives and by the various branches of the co-operative movement and should not have any kind of permanent life as a drain on public funds. It seems to us important to be fair to the Agency and tell it from the start that it has five years in which to show that there is an important task to be accomplished and to get properly integrated with co-operatives. If it cannot do that within five years, we believe that it will have failed and that it would be better for it to be decently buried.

Mr. Kenneth Clarke (Rushcliffe)

The Secretary of State will recall that in Committee the Conservative Party supported this amendment. It is one with which we continue to have a great deal of sympathy. We have throughout supported the Bill and the aims and objectives of the Agency as set out, with the very limited powers that it is given. But we have some hesitation about the whole idea of creating yet another quasi-public body of this kind—QUANGO is the fashionable word to use for them—and we think that the House and the Government generally tend to produce far too many such institutions.

Fortunately, this Agency is modestly conceived. We hope that it will remain small and merely advisory, that it will continue to have a very modest budget, that, as the Bill contemplates, it will be self-financing within three to five years and, if it has any useful purpose then to fiulfil that it will finance itself by charging fees for services and so on and will not look to public funds for support. All these things are contemplated by the Bill as it is and this seems to us to be a worthy way to contemplate the new Agency.

One would hope, as the hon. Member for Colne Valley (Mr. Wainwright) has just said, that if the Agency is a success and sets about its tasks with some urgency, perhaps after five years its continued existence in the form that we contemplate may not be necessary. It might be useful to set some limit on the life expectancy and make it justify itself after a time to see whether there is a case for its continuance. The five-year limit may be an artificial one, and the result of the amendment being carried might be that in five years' time an Act of Parliament would have to be passed to enable the Agency to continue its existence. The amendment might be looked at again in another place, of course, but if the Government want to resist the amendment, I hope that the Minister will reassure us that they con- template a strictly limited role for the Agency, and that they see it as fulfilling an advisory role. It may be worth bearing in mind that it might have fulfilled its purpose after a few years, or that it migt need to be recast in a quite different way. I hope that we shall have the Minister's assurance that there is no intention to set up a large body which will have a timeless, self-fulfilling existence, or which will have a tendency to grow, in terms of Parkinson's Law, as happens with far too many of these bodies in other areas.

The Minister of State, Department of Industry (Mr. Alan Williams)

I must resist the amendment, as I did in Committee. I draw the attention of the House to the fact that the working party recommended that the three-year experiment was the appropriate experiment and that the finance had been geared to the presumption of a three-year existence initially, with the Agency's position then to be reviewed in the light of the experience in those three years.

I emphasise to Opposition Members that the co-operative movement lays great importance on having a statutory base for the Agency. What worries me about the amendment—other than the fact that the period of five years is arbitrary, although I accept that equally three years would be arbitrary—is the very important fact that by taking no action whatsoever the Government could actually bring about the demise of the Agency. If the amendment were to be carried, the Government would need to do absolutely nothing and at the end of the fifth year the Agency would go out of existence as a statutory entity. It would need a positive action to secure its survival.

For that reason, I am sure that it would be far more encouraging for those who operate the Agency that there should not be an apparent death sentence hanging over it. I accept the genuine motives behind the amendment, but I hope that the hon. Member for Colne Valley (Mr. Wainwright) will feel able to withdraw it.

Mr. Richard Wainwright

I am disappointed that the Government should take the line that after five years of what I hope will be very valuable work the Agency would not be able to survive without a statutory base. That seems to be a fundamental misconception of the future of the Agency. After five years of special or rather privileged treatment, to which it is fully entitled, surely it should by then be able to stand on its own base.

I do not accept the implication of the Minister that, simply because its statutory base may end after five years, the Agency itself will end. In the pluralist society in which we rejoice in this country some of the most valuable bodies have an extremely flourishing existence without any statutory base whatever, and they would not wish to have a statutory base. I am not convinced by the Government's argument but, in the hope that the matter may be attended to in another place, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Ivor Clemitson (Luton, East)

I beg to move amendment No. 2, in page 1, line 8, leave out subsections (2) and (3) and insert— (2) The Agency shall consist of a Chairman and not more than seventeen other members. (3) The chairman and not more than eight other members of the Agency shall be appointed by the Secretary of State, after consultation with persons appearing to him to represent the interests of the Co-operative movement and one each of the remaining other members of the Agency shall be appointed by each of the bodies listed in Part II of the Schedule to this Act subject to the confirmation of each such appointment by the Secretary of State: Provided that the Secretary of State shall at no time appoint a member of the Agency if by so doing the number of members appointed by him exceeds the number appointed by the bodies listed in Part II of the Schedule to this Act.".

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

With this it will be convenient to take the following amendments:

No. 3, in page 1, line 21, at end insert— (7) The list of bodies in Part II of the Schedule to this Act may be varied by order of the Secretary of State made by statutory instrument. (8) An order made under subsection (7) above—

  1. (a) shall not be made unless a draft of the order has been approved by resolution of both Houses of Parliament, and
  2. 1554
  3. (b) may be varied or revoked by a subsequent order under this subsection.".
No. 24, in page 5, line 1, after "Schedule" insert "Part I.".

No. 25, in page 5, line 5, after "appoints", insert "or confirms the appointment of".

No. 27, in page 7, line 21, at end add—


The Credit Union League of Great Britain

The Co-operative Housing Agency

The Co-operative Production Federation Limited

The Co-operative Union Limited

The Co-operative Wholesale Society Limited

The Federation of Agricultural Co-operatives (U.K.) Limited

The Industrial Common Ownership Movement.

The National Federation of Credit Unions.

The Fisheries Organisation Society Limited.".

10.30 p.m.

Mr. Clemitson

Amendment No. 2 and the related amendments are in line with the proposal contained in the minority report of the working group that half the membership of the Agency should consist of persons appointed by various bodies in the co-operative movement. I remind the House of the reasons that the authors of the minority report gave for their proposal. They said: Our colleagues"— that is their colleagues who signed the majority report— have recommended that the CDA should not only be a statutory body, but a statutory body with all the members being appointed exclusively by a Secretary of State. These colleagues have laid great stress on the fact that a major purpose of a Co-operative Development Agency would be to speak with authority for the Co-operative Movement as a whole, especially to Government. We find it difficult to see how a body on which co-operative organisations are refused the right to appoint their own representatives direct, can claim to speak on behalf of the Co-operative Movement. That seems to be a pretty strong argument. They go on to say that a body constituted in the way proposed in the Bill would follow the pattern of East European countries where the nationally recognised co-operative organisations are appendages of State bureacracy. Perhaps their language is a little flowery and perhaps they are going a little far there, but their point is valid. We do not want a Big Brother State. We want power to be diffused in society.

I argued on Second Reading that there is an increasing plethora of organisations in which the members are appointed by various Secretaries of State. I have grave reservations about this increase of patronage. If we are to break out of this pattern of patronage, surely this, above all, is the occasion to do it. How can we, in logic, have a Co-operative Development Agency which, in its constitution, does not reflect co-operative—that is democratic—principles?

The third argument of those who signed the minority report is that the half-and-half constitution contained in their report and in the amendments reflects a partnership between the State and the co-operative movement. Lord Oram has written a paper "The Case for a Co-operative Development Agency" which is quoted in the minority report. He says: The nation as a whole is faced with the fact that there are serious current problems in industry, commerce, housing and services for which co-operative solutions seem to be valid. Therefore, society at large, and consequently the State, has an interest in applying Co-operative Principles to the solution of these problems. This process cannot await a slow development comparable with the first century and a half of co-operative development on a voluntary basis. Progress needs to be much more rapid. Resources need to be marshalled on a very different time scale than hitherto. Therefore what is required is a partnership between the State and the co-operative movement. The State can provide the basis on which voluntary activity can effectively grow. The argument that the authors of the minority report make and that I am making is that the half-and-half constitution reflects the sort of partnership to which Lord Oram was referring.

Of course, there are counter arguments to my case. They are set out in paragraphs 27 and 28 of the majority report. I want briefly to deal with those counter-arguments. The first is that an elective system would have to be weighed to allow for the immense disparities amongst constituencies". Those are the words of the authors of the majority report.

I believe that that is profoundly misconceived. Surely the main thrust of the argument for a Co-operative Development Agency is to develop co-operatives. This is in the very title of the Agency. What is more, it is to develop them in precisely those areas where co-operation so far has been underdeveloped, of which the most obvious is the producer or industrial sector. Therefore, in my view it is right that at this stage bodies in that sector should have a voice greater than their numerical strength might appear to justify. As I understand it, the Co-operative Development Agency is to be not merely a body representing co-operation as it is but, as its name implies, an agency to develop co-operation.

The second argument is that a Government-appointed body would provide an effective safeguard against the domination of minorities by majorities. My first answer to that argument is that what we are proposing in these amendments is precisely an effective safeguard against such domination of minorities by majorities. It is only if the misconceived proportional representation argument is used here that there is difficulty.

The majority report goes on to argue that if they were appointed people would be freer to act in a personal capacity. That really seems to be having one's cake and eating it, too.

The third argument is that if the governing body were to be representational in whole or in part, it would be too big and unwieldy if it were not wholly appointed. I admit that in these amendments we are proposing a body with a membership of 18. But I recall that the Cabinet is a little larger than that, and I am told that it has to deal with considerably more matters than a body such as the Co-operative Development Agency will have to deal with.

The fourth argument is that if the Agency is appointed by constituent bodies, the members would be too concerned with the protection of the separtae interests of the participating organisations. But, of course, there is an exactly opposite danger of members of the Agency becoming too remote from the organisations which go to make up the co-operative movement. It seems to me that a half-and-half solution such as the one we offer here would be a pretty good antidote to both dangers.

Amendment No. 2 provides for a larger Agency to allow for the half-and-half representation which is provided in our proposed subsection (3). The effect of that subsection is that nine members—a chairman plus eight—will be appointed directly by the Secretary of State, and nine by the bodies named in the Schedule. The effect of the last sentence, Provided that the Secretary of State and so on is to ensure as far as possible that the 50–50 balance between those appointed directly by the Secretary of State and those appointed by the nominating bodies is maintained.

The schedule lists the bodies which would have the right to make appointments. The obvious question is, why those bodies? The answer is that they were the ones invited to participate in the work of the working party and, therefore, can be taken as reasonably representative of the co-operative movement.

Then it might be asked, what about bodies which are not named? Of course, people from those bodies are not precluded from membership. The Secretary of State may bear their claims in mind when making his appointements. We provide in the proposed new subsections (7) and (8) for the list to be changed by order. That means that change could be made relatively simply, but with the safeguard of parliamentary consideration and approval.

The other two amendments are purely technical and consequential.

To sum up—we are setting up a Co-operative Development Agency. I think thae we are all at one in wanting to see co-operation grow and develop and become a much greater part of our economy and our society—not only in the consumer sphere but elsewhere. The arguments both of principle and of practice lead to an at least partly representational body. That is the purpose of the amendments.

Mr. Alan Williams

I agree with my hon. Friend the Member for Luton, East (Mr. Clemitson) that we all want the Agency to be successful. All of us on this side—I think that is understood by hon. Members opposite as well—have a commitment to the co-operative movement to produce such an agency. That is a long-standing commitment and this is an attempt by the Government to fulfil that pledge.

The Government are in something of a quandary in fulfilling that pledge in that there are many forms that such an agency could have taken. When I was given the responsibility for advising a format, it seemed to me that the worst thing I could do was to appear to impose a format on the co-operative movement. For that reason, I deliberately avoided the normal pattern of establishing an inter-departmental official committee to bring forward proposals based on consultations, and virtually present a Government production to the co-operative movement.

It seemed to me that, with the inevitable differences of emphasis which must arise within the movement, that would almost guarantee that every section of the movement would find something wrong with the proposals which came forward from the Government and looked as if they were being imposed by Government.

For that reason, I sought the advice of hon. Friends who have been influential in the co-operative movement over many years. I decided to set up a working party, not an inter-departmental committe, on which would be represented as many of the organisations as possible, to reflect the varying potential of the movement.

It was on the advice of hon. Members that I made the selection of the list. I think that we may have done reasonably well, in as much as my hon. Friend has seen fit literally to reproduce that same list in the amendment to the schedule.

Perhaps I could say something about the way in which the working party decided on this one controversial issue. This was the major issue which arose between the majority and the minority. When it was clear that the working party was deadlocked on the matter, I took the chair to see whether it was possible to establish some common ground. We were so determined that the movement itself should find its own solution that the officials withdrew from the working party for that discussion and left it to the movement itself to discuss the matter openly and democratically.

Therefore, the majority report which emerged was produced by the very grouping which my hon. Friend is putting forward in his amendment. The majority of that grouping said that they preferred the Government's format. It was their choice and not my choice. It was their choice and not my imposition. There was a majority report and a small minority report. It appeared logical for the Government to accept the recommendations of the majority.

10.45 p.m.

I realise that there may be differences in the importance of the various value judgments contained in the report. There was a strongly expressed feeling by the larger organisations that if individual organisations were to nominate they, the larger organisations, should have representation reflective of their size. Even if we had taken the route that my hon. Friend wishes and which the minority group wished, there would still have been contention. Some of the major elements within the movement would have complained that they did not want that form of representation.

If we had tried to compromise by doing that which my hon. Friend asks, but then reflecting various wishes with what he calls proportional representation, the committee would have been dominated by the large groups. In fairness to them, it should be said that they did not want to see that form of representation. However, the committee would have been dominated by the larger groups. For obvious reasons it would have had to be larger than the 17 that my hon. Friend has suggested.

Furthermore, the working party indicated in paragraphs 27 and 28 that it felt that if we pursued the route proposed by the minority, we should end up with a series of mandated delegates.

Mr. Clemitson


Mr. Williams

That is the view put forward by the working party. It said that members appointed by the method put forward in the Bill would be "freer to act". It felt that there would be more constraint in being nominated members of the individual groups with the knowledge that in so far as anyone wandered away from the mandate of his nominating group his membership could quickly be brought to an end by that very group.

It was agreed in our initial discussions that the Agency should make an impact quickly. We do not want it to make a soporific start, It must be a dynamic Agency from the outset. In paragraph 22 the working party states: The Agency is a body which can act". It wanted a body that could act. Regardless of the parallel with the Cabinet—there may be some hon. Members who do not think that the most encouraging parallel on which to draw, regardless of whichever Cabinet happens to be in office at any one time—I take the view that a body of the size envisaged in the amendment, and even more so when we consider a body of the size that would probably be necessary to get a reasonable compromise because of the clashes that potentially exist, would be too large to act effectively. For these reasons we chose to work with the majority report. It seems to be a reasonably democratic way in which to present the Government's proposals.

There is always a fear about lack of independence when there are nominations made by Governments. In my previous manifestation as a Minister in the Department of Prices and Consumer Protection we set up the National Consumer Council with Michael Young as the chairman. Whatever may be said about the Council, I do not think that anyone would accuse it of being the lapdog of the Government. It has shown that it is possible for Government nominated organisations to act with absolute independence of the Government generally and of nominating Ministers in particular.

I reassure my hon. Friend and his supporters that it is not the Government's wish to tell the co-operative movement how to run its own business. If the Agency wants to make recommendations in the light of its experience, from my reading of the Bill it is manifestly free to make such recommendations. Therefore, if, towards the end of its three years, having had experience of operation, it finds that the format embodied in the legislation is not appropriate, it is free to say to the Government "We wish to change to a different constitutional base." I should think that any Government would want to give serious consideration to such a recommendation from the Agency.

Mr. Dan Jones (Burnley)

And in the meantime not to interfere.

Mr. Williams

I assure my hon. Friend that it is not my intention to spend the next three years—I am sure we shall be in Government in that period—interfering in the actions of the Co-operative Development Agency. It is for the Agency to establish its own fortunes and future.

If, during this period, the Agency finds that the format embodied in the Bill, which has been recommended by the co-operative movement itself, is not appropriate, it can say so, and I readily give the undertaking that it will be given serious consideration by the Labour Government in future.

Mr. Kenneth Clarke

I have no wish to delay the House by discussing an amendment about which the Opposition, on consideration, have reached the same conclusion as the Government and support what the Minister has just said.

We considered this point as it was obviously the major controversy in the working party's report. Amongst our first reactions there was considerable sympathy with one of the propositions put forward by the hon. Member for Luton, East (Mr. Clemitson)—namely, that it could be an advantage if the patronage, which at the moment resides entirely in the Government, were in some way put out to the groups which had a direct interest in the subject matter of the Agency's work. Anything which reduces the number of these bodies and the unfettered ministerial patronage which exists in so many of them is in principle probably a good thing. But there are considerable difficulties in this instance, as are set out in the majority report.

It is plain that there is considerable disparity between the various elements within the co-operative movement, including considerable disparities of size. No one, including members of the movement, wants this body to be dominated by the large wholesale and retail movement. But it would be unfair if the amendments were adopted, because they in no way reflect the comparative strengths of the different bodies set out in the proposed amendment to the schedule.

There is also the danger that the Agency may become a rather useless committee, including a negotiating committee, representing various slightly different interests in the movement. That is a danger if the members of the Agency are in effect nominated mandated representatives of different bodies. The bodies set out in the proposed addition to the schedule have rather different interests and somewhat different opinions about the way in which the co-operative movement should develop. I am sure that no serious clashes would arise, but it would be a weakness in the work of the Agency, because there would be tendency among members to feel obliged to represent the interests of the bodies which had nominated them.

We do not want the Agency to become a lobbying group for existing co-operative institutions only, though we hope that it will serve them. We want it to be innovative, flexible and representative of the interests of the co-operative movement as a whole and, in addition, to look for and encourage new forms of co-operative activity.

For those reasons the Opposition are in the happy position of agreeing with the Minister's conclusions. Therefore, I ask the hon. Member for Luton, East to withdraw his amendment. Obviously, this is a serious point and it is right that it should be considered, because it was the major difficulty that the working party had to resolve.

Mr. Pavitt

I promise not to delay the House unduly, but I am very much in sympathy with the argument put forward by my hon. Friend the Member for Luton, East (Mr. Clemitson) and with the minority report.

I want to emphasise the point made by my right hon. Friend in the undertaking that he gave that the development of the Agency, which is a new body which will have a number of pioneering activities to carry out, will, after the initial stages, be reviewed. The recommendation for a much stronger democratic content of the governing body came from the newest, not the oldest, part of the co-operative movement. Trying to make changes against the establishment is difficult. Nevertheless, the co-operative movement has become less responsible and responsive to its members in the last 10 years. Because of technical difficulties, which I understand it has needed more and more to have technical expertise at the top and less contact at the bottom.

I accept my right hon. Friend's thesis but I hope that the development of the Agency will involve a working party for the first two years. I hope that a small group will do a job of work instead of a large concourse of people discussing the various issues.

I hope that as the Agency develops the basic democratic philosophy described in the minority report will gradually emerge. I hope that when it is succesful, as all hon. Members hope it will be, there will be the opportunity for greater democratic contact and feedback. I have no doubt that my right hon. Friend would appoint only a person fully steeped in and imbued with co-operative principles and with its confidence early on. I hope that the organisation will not be static but it will grow. I hope that in that growth the democratic content will be strengthened.

Mr. Clemitson

It would be untruthful to say that I was convinced by the arguments of my right hon. Friend and the Opposition spokesman. However, I see the need to get the Agency off the ground as quickly as possible. I hope, as does my hon. Friend the Member for Brent, South (Mr. Pavitt), that it will act as a working party in the first two or three years. I also hope that, however deeply the Agency is involved in the day-to-day business of encouraging co-operation and getting it off the ground, it will find time to reconsider the arguments that the authors of the minority report advanced.

I welcome the assurance of my right hon. Friend that, if the Agency thinks after several years of operation that the basis of its constitution should be changed in the direction which we have proposed this evening, the recommendations will be taken seriously by the Government. I also hope that further time will be found in the House to consider these matters. I hope that after two or three years we can have a major debate in the House to consider the work of the CDA and its constitution.

In the light of what my right hon. Friend has said, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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