NHS (Charitable Trusts Etc) Bill

Kit Malthouse Excerpts

Friday 22nd January 2016 Commons Chamber

[Michael Tomlinson]

I shall turn to what I mean by “appropriate” in due course, but I think hon. Members on both sides of the House will know on plain reading of the word “appropriate” what is or is not appropriate.

[Kit Malthouse (North West Hampshire) (Con)]

In my mediocre experience in local government I have participated in a huge number of Government consultations. I cannot recall a single one that changed the initial decision of the Government. Will my hon. Friend acknowledge that more often than not Government consultations just go through the motions? The only one I can remember ever having an effect was by the incoming Mayor of London on removing the extension of the congestion charge in the west of London, which was overwhelmingly supported by consultees, and he did in fact enact that in the teeth of opposition from Transport for London. Beyond that, I have never quite seen the point of consultation when Ministers’ minds are made up. Does my hon. Friend agree?

[Michael Tomlinson]

I certainly would not agree that my hon. Friend’s experience is mediocre—quite the opposite. I understand the thrust of his point, but I disagree, because at a time when politics can be seen to be remote it is important that the public are engaged in these debates. I also think it would be wrong to say Ministers’ minds are closed. I am sure those on the Front Bench this morning would agree that Ministers’ minds are not, and should not be, closed—certainly not before a public consultation.

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[Kit Malthouse]

Does my hon. Friend agree that my hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) gave herself away at the beginning of her intervention when she referred to this money being donated by the public to the NHS? In the public’s mind, there is often a confusion between the charity and the institution that it serves, and it is therefore crucial to have these controls.

[Mr Rees-Mogg]

My hon. Friend puts it extremely well. That confusion is almost inevitable. In the case of charities linked to hospitals, most members of the public will expect the money that is spent charitably to be as thoroughly audited as the money that is spent by the state, and it is prudent to formalise that.

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[Mr Rees-Mogg]

I am not sure that those are the circumstances under which the Secretary of State would use his discretion to allow the logo to be used. I am thinking more of a sign outside a charity shop that supports the NHS, saying “We support the local NHS”, with the name of the local hospital that it is supporting and the local hospital’s logo, which includes the letters “NHS”. I am thinking of that sort of circumstance. It is not about promoting the charity as an offshoot of the NHS; it is about indicating its co-operation with the NHS.

Defibrillator boxes give the name of the ambulance service—the ambulance service’s logo includes the letters “NHS”—to indicate that people should ring 999. The ambulance service will then give them the code to open the box and talk them through how to use the equipment. Most of us probably would not know how to use it without some advice. It was entirely rational to use the logo until some idiotic bureaucracy got in the way. Initially, it was very stubborn—the worst type of pettifogging bureaucracy. If the Secretary of State had had the power to cut through such bureaucracy, that could just have been done.

The circumstances in which the discretion is used would be limited to where there was genuine co-operation—where the charitable sector and the NHS are working hand in glove—and there was a benefit from using it. It is not about charities posing as the NHS where they are not part of the NHS. If the Secretary of State thought the logo was being misused, he would have the power to rescind the permission. This protected and limited power would solve a particular problem.

[Kit Malthouse]

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

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

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

[Seema Kennedy]

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

[Kit Malthouse]

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

[Mr Bacon]

I agree with my hon. Friend. Was not one of the most profound and surprising examples of that, through the use of social media, the collective view that suddenly gained ground among hundreds of thousands of people that the right hon. Member for Islington North (Jeremy Corbyn) would be a good leader of the Labour party?

[Kit Malthouse]

My hon. Friend makes a remarkably good point. For Members of this House, that is a very pertinent example of the damage that social media can wreak on our ancient institutions, such as the Labour party.

The truth is that the modern mind is much more susceptible to such things, and particularly to charismatic leaders. One only has to look at the effect of Instagram, and the millions of followers that otherwise unmeritorious individuals have on it, to see how willing people are to go along with such things these days, like sheep in a herd.

[Mr Rees-Mogg]

Will my hon. Friend give way?

[Kit Malthouse]

Yes. Sorry, I should have said “flock”, not “herd”.

[Mr Rees-Mogg]

That was exactly my point.

[Kit Malthouse]

I thought so. I am grateful to the hon. Member for pedantry, who is right.

This is one of the things about which I am concerned. We saw the notion of group-think in Kids Company. A group of trustees, led by a charismatic leader, felt themselves to be invulnerable. They thought that they should not be doubted, and they were hostile to external views expressing doubt about them. One only has to review the correspondence of Mr Yentob, with his wild claims about the death and insurrection on the streets that Kids Company’s demise would cause, to see that group-think in action.

I studied politics and economics at university, specialising in the psychology and behavioural side of politics, and we studied group-think quite closely. When future students come to study group-think, they will look at Kids Company as a perfect example of it. Those involved were trapped in group-think. If only somebody had been able to step in and take control earlier, the charity and the remnants of its good work could have been saved.

[Jeremy Quin]

My hon. Friend is referring to the charitable sector, which has billions of pounds of assets and does a vast amount of good. Tarring every charitable board with the same brush is grossly unfair.

[Kit Malthouse]

No, I am not tarring them with the same brush. I am saying that all boards—commercial, charitable or even political—must bear this in mind. That is the whole foundation of our modern governance structures. It is the idea behind having non-executive directors, who are meant to be external and to provide a challenge to make executives and those more involved in the work of an organisation think more carefully about what they are doing.

[Jeremy Quin]

My hon. Friend will be aware that a good board contains non-executive directors to fulfil that challenge function. They are appointed by the board; they do not need to be appointed by an external body.

[Kit Malthouse]

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

[Seema Kennedy]

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

[Kit Malthouse]

No, I do not lack confidence in people’s independence of mind. I have great admiration for my hon. Friend, who is very independent-minded and, I am sure, conducts herself extremely well as a trustee. The point is that there is a danger of group-think, and I have given a number of examples illustrating how it can come about. I am sure that happened at Kids Company.

That point is important in respect of this Bill because, as my right hon. Friend the Member for North East Somerset—sorry, my hon. Friend—said, the charities we are talking about here are different. They are not like other charities. People associate them in their minds with the institution with which they are connected. They are seen as part of the national health service. When I give to the Great Ormond Street Hospital Children’s Charity, I know that I am giving, at one remove, straight to the ward. I am not giving the money because the charity might spend it elsewhere. I know that I am giving it to that hospital. The two are inextricably linked.

My right hon. Friend the Member for North East Somerset—I hope he will forgive me for constantly referring to him as right honourable, but it is only a matter of time—is absolutely right when he says that, at some point, something will go wrong. Even with Kids Company, which did not have such links, but was in receipt of public money, there were demands on the Government to do something. Indeed, the Prime Minister was on the rack to a certain extent because he had been associated with Kids Company.

[Pauline Latham]

My hon. Friend might not have been in the Chamber the other night for the debate on banking regulation, but the right hon. Member for Slough (Fiona Mactaggart) said that she had been prevented from becoming a member of the trustee board of a charity because she was a “politically exposed person”. Does my hon. Friend recognise that some of us will have difficulty supporting amazing charities, such as Great Ormond Street, which are not like the one he mentions?

[Kit Malthouse]

Yes. I am trying to get to a position where we can have confidence in the governance of charities, and confidence that when things go wrong, there are appropriate mechanisms for someone to step in and deal with things quickly. My point is that in the case of national health service charities—that is what people think of them as—at some point, the Secretary of State will be asked to sort out problems.

We have to remember that there are practicalities involved in this. If the Secretary of State is unable to take control of the board and replace the trustees, he or she cannot get immediate access to the bank account. They cannot get anybody to sign a mandate to allow them to control the money, or even to freeze the account to stop money flowing in or out. When this hospital pass, this UXB or unexploded bomb of a hospital charity that has behaved badly or got into trouble, perhaps through no fault of its own, lands in the lap of a Secretary of State, whoever it may be—it could be one of us here on these Benches in the future, perhaps—the inability to step in and take control will have a significant political, and indeed financial, impact. That might impact on the care that takes place on the ward.

[Mrs Sheryll Murray]

My hon. Friend has cited one charity as an example, but does he have any recent information about any NHS hospital charities or NHS charitable trusts on which he is basing his assumptions?

[Kit Malthouse]

I do not, and the reason is that the Secretary of State currently has control of the appointment of trustees. That is exactly why. If I were Secretary of State—I assume that the same is true of the current Secretary of State and past Secretaries of State—I would be very careful about who I appointed, so that I was sure that I was handing that fiduciary duty to people whom I trusted and who had an element of accountability to me.

[Kevin Foster]

My hon. Friend is being very generous in taking interventions. I want to get to the nub of his amendments. The examples that he has cited of corporate governance, and Alan Yentob’s emotional blackmail in respect of the Kids Company charity, relate to general issues of regulation. Why should NHS charities be different? We are trying to make them independent. Why should the Bill be amended in this way? I do not think that my hon. Friend would argue that any time a business or charity goes wrong, the solution is for the Government to appoint a director, so why is he making that argument in respect of this Bill?

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[Kit Malthouse]

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

[Seema Kennedy]

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

[Kit Malthouse]

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

[Mr Bacon]

My hon. Friend the Member for South Ribble (Seema Kennedy) pre-empted me. One might think that there was no need for the amendments because the Charity Commission, which was established in law to supervise these functions, would step in. However, does not the evidence from the National Audit Office report, “Giving Confidently”, from autumn 2001, and the much later evidence from the NAO’s studies over the past two or three years on the Cup Trust and the Charity Commission more generally, show that, in practice, the Charity Commission has a track record of not doing a particularly good job? In the circumstances that my hon. Friend the Member for North West Hampshire (Kit Malthouse) describes, where swift action is needed, the existing framework is not adequate. It is not enough simply to say that what he describes has not happened yet in a way that we can readily recall. The point, surely, is that we must create the governance architecture and environment to respond quickly when it is necessary to do so.

[Kit Malthouse]

My hon. Friend makes a very good point. I recommend to the House his book, which is filled with examples of Government incompetence, many of which were brought about by the group-think phenomenon and a lack of good governance. He is an expert in National Audit Office reports, having pored over many of them in his time on the Public Accounts Committee in the last Parliament and, I think, the one before that.

[Mr Bacon]

Fifteen years.

[Kit Malthouse]

Fifteen years on the Public Accounts Committee—extraordinary! I therefore take his words seriously. He is right that the key is to get the governance entirely right.

I guess the point that I am making—maybe I am a lone voice, although perhaps I am joined by my hon. Friend the Member for North East Somerset—is that even with the most ideal governance in the world, things occasionally go wrong. In that instance, the Secretary of State must have the power to step in, given the critical nature of the services these charities perform and their inextricable link to the national health service.

[Maggie Throup]

My hon. Friend’s amendments would undermine the whole purpose of the Bill, which is to give these charities their independence. As he rightly says, the Charities (Protection and Social Investment) Bill, which is going through the House at the moment, will strengthen the protections and the governance arrangements for charities such as these.

[Kit Malthouse]

I acknowledge that point, but we have been round this carousel a couple of times. I pose just one question to those who are nervous about my amendments: in the event of something going wrong, who would fire and replace the trustees? No one. They become a self-governing group. One of the problems with charitable governance is that there are no shareholders to dispose of underperforming trustees. Charities have to acknowledge their own bad performance and fire themselves. In a situation where there is an inextricable link to a particular establishment, the Secretary of State needs to have the ability to step in, in extremis.

It is often forgotten that charities receive public money, and no charity is more likely to receive public money than an NHS hospital charity. Such charities are more likely to receive grants for their performance of services, projects, equipment and so on. We therefore have a particular interest in NHS charities.

[Mr Rees-Mogg]

I support my hon. Friend’s amendment because it is an emergency provision that would be rarely used. From the tone of the debate, there is an impression that the Secretary of State would use it the whole time. Does my hon. Friend agree that it would probably not be used more than once in 10 years?

[Kit Malthouse]

My hon. Friend is right. Proposed subsection (2B) in amendment 1 provides that the Secretary of State would be allowed to use the powers only by permission of the House. I am with my hon. Friend in his desire to protect the House’s privileges and powers. I did not get elected to give the Government a free run. When the good people of North West Hampshire elected me, they placed two votes: one for a Government and the other for somebody to hold them account. I will try to do that job. Should the Secretary of State wish to step in, he would have to lay a statutory instrument before both Houses of Parliament and seek their support. It could not be done easily, on a whim or through a signature on a piece of paper. It would require debate and examination, and need all of us to do our job of scrutiny and reach a settled decision to allow him to step in. I recognise that it is a fundamental step and that an element of separation should be maintained.

[Kevin Foster]

My hon. Friend is generous with his time. In my constituency, Torbay Hospital League of Friends has operated successfully for 60 years, raising millions of pounds for the benefit of local people. A picture is being painted of needing a step-in power, but the whole process that must be gone through to achieve it, which my hon. Friend has just outlined, probably makes the amendment meaningless. Why do these charities need such a provision when other successful charities that are linked to hospitals do not?

[Kit Malthouse]

My hon. Friend is a dog with a bone. As I have explained—I think five times—I believe that the charities that we are considering are different because of the inextricable link with the institution that they serve. In the public’s mind, they are just a vehicle to give the money to the hospital and the national health service. Indeed, many boast about the percentage of money given to them that will be spent on the wards of a hospital. Those charities are seen co-funding, along with the Government, the NHS. I can see that not everybody is convinced, but I hope that others will speak in support of my amendments.

As I have said, the provision would be in the House’s control through a statutory instrument. It is not as though the Secretary of State could act unilaterally. We would all have control.

[Jeremy Quin]

I apologise to my hon. Friend: I rise not to support his amendment, but to oppose it, particularly on the point that he is making. His time is valuable. Does he really think that it is a good use of it for orders on this subject to be laid before this House and the other place, and for the matter to be considered on that grand scale? If he must vest these powers with the Secretary of State, does their exercise need to come back to this Chamber?

[Kit Malthouse]

I have the utmost respect for my hon. Friend, but that was a slightly odd intervention, given that much of the Bill is about one hospital and it is taking up many hours of debate in the House. I do believe that those kinds of things are serious, and, frankly, he and I have sat on Statutory Instrument Committees on much more trivial matters that take up the House’s time.

[Wendy Morton]

I take exception to the point about the Bill taking up the House’s time. It covers not only Great Ormond Street hospital, which is only one clause in it, but the group of special NHS charities. There are about 16 in total; there were 20. In the bigger scheme of things, there are around 260 NHS charities throughout the country, which all do fantastic work, and the Bill really deserves the debate, and the discussion about some interesting amendments. Although I will speak later, I will not support my hon. Friend’s amendments.

[Kit Malthouse]

My hon. Friend makes a mistake. I did not object to the time; my hon. Friend the Member for Horsham (Jeremy Quin) objected to time possibly being used on these matters. I am perfectly happy. I think that the Bill is very good and I support its broad thrust.

[Mrs Sheryll Murray]

Will my hon. Friend confirm that, when he said that the Bill relates to a single NHS charity, he was referring to one clause? It would help if he clarified that because I got the impression that he said that the Bill related to one specific NHS charity.

[Kit Malthouse]

My hon. Friend is right. I correct myself. One clause relates to Great Ormond Street and the rest of the Bill clears up some anomalies. The debate is not about Great Ormond Street’s requirements, but about other ancillary bits in the Bill. One wonders whether the rest of the Bill could have been included in the Charities (Protection and Social Investment) Bill, and we could have had a short measure about Great Ormond Street, but that is a matter for the Bill’s promoter and sponsors.

[Jeremy Quin]

Will my hon. Friend give way?

[Kit Malthouse]

No, I would like to move on to amendment 2. I am conscious that others wish to speak.

Amendment 2 would address a particular issue that I have come across in my constituency work. The only national charity that is located in North West Hampshire is the Macular Society. It is quite small and raises about £5 million or £6 million a year, most of which goes into research. One of the complaints of the Macular Society, which obviously deals with sight-related illnesses, is that enormous charities for sight and blindness, such as RNIB and Guide Dogs for the Blind, which raise many tens of millions of pounds—more than £100 million each—put hardly any money into research. Although they are engaged in blindness in its wider sense, they do not use their muscle to improve the lives of those who are afflicted by blindness or partial sightedness through trying to find cures and therapies.

The Macular Society and others complain about that and the fact that, if there was more research, we might be able to do something about the conditions. Part of the reason for the lack of research must be the disconnection with the organisation with which the charities should engage. For example, although I have not looked, it would doubtless be helpful to Guide Dogs for the Blind if it had representatives on its board from the scientific community and some hospitals, such as the Western eye hospital, because then the charity might be compelled to put money into the right causes.

The amendment seeks to ensure that, when an NHS charity is attached to a particular hospital, that hospital is allowed to put at least one trustee on the board. The charities need to stay connected. They need to have a line of communication and to be able to see the right priorities in the organisation rather than decide on their own pet projects, which they foist on the hospital without negotiation. The disconnection between charity and purpose can often happen, and it seems to be particularly pertinent to blindness.

[Wendy Morton]

On the point about making these appointments, it would be helpful if my hon. Friend clarified to exactly which bodies the Secretary of State would have powers to appoint under the amendment.

[Kit Malthouse]

I am sorry, but I am actually talking about amendment 3, not amendment 2. I am getting myself confused because, in usual British fashion, the amendment paper has the amendments in the wrong order. I will deal with my hon. Friend’s point when I get to amendment 2.

Amendment 3 would simply ensure that, if any hospital has a charity attached, it has the power to appoint one trustee. That seems sensible. Many of those charities will already have such a provision in their trust document. The amendment would just to make sure of that.

Amendment 2 states that in “exceptional circumstances” the Secretary of State should have the power to

“appoint one or more trustees”.

That returns me to my primary point about when charitable trusts go rogue or off the reservation, or where charitable trustees become locked in a group-think situation. Rather than dismiss them all and take control, the Secretary of State may feel that it is more appropriate to appoint one or two people from outside who can add a bit of ginger to the board’s discussions, and challenge what they are doing.

For example, a particularly powerful charity that is attached to an NHS hospital might feel that it is flush with cash and that it needs to intervene in a dispute with its doctors, or that it may have cause to campaign politically against some of the things that the Government are doing. It might want to lobby on the NHS settlement by region. When trustees or charities stray into that area—there has been a lot of consternation about that across the House with regard to particular charities—the Secretary of State may reserve power in those exceptional circumstances to appoint one or two trustees to challenge that view.

[Nigel Huddleston (Mid Worcestershire) (Con)]

My hon. Friend is making some valid points. Does he agree that instead of a laser focus on the number of trustees in charitable organisations, the motivation, character and skills of those trustees is the important element to investigate?

[Kit Malthouse]

My hon. Friend is right, and anyone who is putting together a board of trustees wants to ensure that it contains a full range of skills and experience. As I have said, trustees appoint themselves. No one externally is taking a wider view of how broad the ambit is of those people’s experience, how fruitful or consensual their discussions are, or whether they are being challenged. We all know of charities that are made up from small numbers of people. Often, those jobs are undervalued and take a lot of work. The people who act as charity trustees are often heroic, and there are too few of them. Many people will not take on such onerous duties, so there are often small numbers of trustees, particularly in some of the smaller charities such as friends of hospitals and so on. In such circumstances it behoves the Secretary of State to keep a weather eye, and when problems with a local charity are brought before MPs and we wish to raise them with the Secretary of State, we must be able to do so in the knowledge that he or she will be able to do something and appoint somebody to challenge or change things.

[Jeremy Quin]

My hon. Friend paints a very dangerous picture. He was referring to circumstances in which a charity strays into inappropriate political activity, but that is purely the remit of the Charity Commission. In such circumstances, the last person who should be intervening is the Secretary of State—we would be inviting them to wade into a political quagmire.

[Kit Malthouse]

That may be so, but—I hesitate to stress this point again—in my view these charities are different. They trade off the advantage of being associated with the national health service. People see them as part and parcel of the health service; they are not viewed as separate in the way that Oxfam or the Guide Dogs for the Blind might be. If something is called the Great Ormond Street hospital charity, people see it as a wing of the national health service.

[Craig Whittaker (Calder Valley) (Con)]

My hon. Friend raises a point about charities going off and lobbying. Does he feel that enough safeguards were included in the Transparency of Lobbying, Non-party Campaigning and Trade Union Administration Act 2014, which was designed specifically to prevent charities from taking non-transparent action?

[Kit Malthouse]

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

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

[Seema Kennedy]

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

[Kit Malthouse]

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

[Jeremy Quin]

In these hopefully extremely unusual circumstances, does my hon. Friend envisage that, once again, the process could drag through both Houses? If a charity tragically loses all its trustees, are we expected to go through the full rigmarole of full parliamentary scrutiny? That seems strange.

[Kit Malthouse]

I do not think that I have attached that requirement to this straight appointment. If there are no trustees, who objects to the Secretary of State making those appointments? Can anyone think of anybody better? I certainly cannot. Possibly the chief executive of the hospital, but given that they are probably appointed under the influence of the Health Secretary, why not allow the Health Secretary to do it?

[Tom Tugendhat (Tonbridge and Malling) (Con)]

My hon. Friend is generous in allowing interventions. Barely 150 years ago we abandoned press-ganging for the Royal Navy, yet we are now reintroducing it for the charitable sector. It strikes me as odd not to “encourage” the Secretary of State or chief executive to recruit more trustees, but rather to force them to do so. As my hon. Friend rightly said, trustees are volunteers who step forward and step up for the community. They do something that is above and beyond their social duty every day, and we should encourage them in that. He is right to place such an important weight on that, but I question the legislative requirement of making the Secretary of State able to make those appointments. He seems to be asking not for the Secretary of State to be able to ratify a volunteer, but rather for them to go out and call somebody in from the fields, factories and cities and tell them to take up that position. That is slightly losing the focus. If the Secretary of State is not required to do that, all we need is for people to have the opportunity to volunteer, in which case the chief executive or Secretary of State can merely advertise the post.

[Kit Malthouse]

That is exactly what I am proposing. If there are no trustees for three months, the Secretary of State will have the power to appoint someone. They could run an advert, or decide to press-gang somebody if they want—they can choose their own method. The point is that somebody has to do it.

An interesting technical point that Members who belong to Conservative associations may know is that if an association runs out of trustees its members can appoint a new trustee in a special general meeting. Great Ormond Street charity has no members. There is no group of people who can appoint a trustee, so if it all falls vacant the thing effectively dies. In my view, the amendment is very sensible and I am amazed it is causing such controversy. This very sensible amendment would allow the Secretary of State to appoint one or more trustees to get the thing going again.

[Craig Whittaker]

I need to challenge my hon. Friend on the assumption of “Who else better than the Secretary of State?” Of course, our current Secretary of State is a very highly esteemed colleague of great standing—I do not question that at all. What I question is the previous string of people who have appointed politically biased appointees to various quangos around the country. Surely he can see that a Secretary of State would have the potential to be not the best person to make the decision.

[Kit Malthouse]

My hon. Friend will make a great diplomat when the time comes. I agree there is the possibility of misbehaviour by politicians, but we politicians come with a great advantage. We have had a few thousand people vote for us and those few thousand people can vote us out if they think we have behaved badly. There are not many other people in public life who come with that brake on their behaviour.

[Kevin Foster]

I will make this my last intervention. My hon. Friend has been very generous. With the provisions in the Bill I was expecting today to go off on a trip to Neverland. Instead, with all the death, doom and disaster in this speech I feel we are in an episode of “EastEnders.” Does he not agree that there is a very large area of charity regulation to deal with things going wrong and difficulties emerging? Charities will still be subject to that. Merely allowing the Secretary of State to appoint the odd trustee will not deal with any systemic problems. That is what the wider area of regulation is there for.

[Kit Malthouse]

Many years ago, my mother and father went on a camping trip in Europe. On their first night, they pulled in, in their Thames van, to what they thought was a campsite. In the dark, my father attempted to pitch the tent. Every time he tried to hammer a tent peg into the ground it went “Ping!” and disappeared off into the darkness. Only in the morning did he realise he had been trying to hammer the tent pegs into a concrete tennis court. That is how I feel this morning.

I have tried to explain many times now that these charities are different. They come with a badge upon them that says to the public they are partially in the public sector. Secretaries of State will always have an eye to their conduct, because what they do will impact politically and financially on the national health service and on whichever party happens to be running it at the time. I realise that, in the eyes of the sponsors, I might be pushing water uphill. Most people know I am a relatively optimistic person and I am hesitant to put these pessimistic circumstances to the House; nevertheless, someone has to do it.

I will move on now, finally, to other amendments. Amendment 9, in the name of my hon. Friend the Member for North East Somerset, seems eminently sensible and reflects exactly the point I have been making about the special connection. In these days of the internet, it is quite easy to download the NHS logo from any hospital website, affix it to a piece of paper and fire it off to raise money. I am sure it has, on occasion, been used fraudulently to raise money. I therefore completely support his wish to have some kind of control over the use of the logo, the name and the brand.

Giving that power to the Secretary of State seems eminently sensible to me, not least because these charities maintain most of their fundraising ability through their connection with the NHS. The leverage is extremely powerful and very useful. Many will raise millions and millions of pounds off the back of their connection with the NHS and they should be encouraged to do so. The judicious use of the brand, the logo and the name is absolutely to be supported, but it needs to be done in a relatively nimble way. The only way I can think to do that is via the permission of the Secretary of State, so I support the amendment.

Unfortunate amendment 4 deals with consultation. As I said in my intervention earlier, during my career in local and city politics consultation became the bane of my life, and of my residents’ lives. We all knew, when we participated in a consultation, that the decision had broadly been taken already and that the politician or Department in question was largely going through the motions to make sure they were not judicially reviewed or challenged.

Of course, the notion of consultation was promulgated by the Blair Government. It is a characteristic of our managerial, technocratic politics. Where we have a House filled with conviction politicians who know what they believe, and that what they believe is right for the country, they do not need to go out and consult. They consult once every four or five years through general elections and display the philosophical sheet-anchor that sits underneath every decision they make. However, when politicians drift from their basic principles into unknown waters, they feel a bit uncertain. They feel a need to consult, to be told what to do and to get a feel. That is what politicians do these days: they have focus groups and polls. They consult constantly about their image and what they should and should not do.

I would therefore like to play a small part in doing our bit to rein back the amount of consultation. We could get to a situation where this House becomes redundant. With the advent of technology, the thing that naturally follows consultation is permanent referendums where everybody can vote from their desks, and we do not need to have a House that discusses and debates from points of experience and different aspects. I therefore firmly oppose the amendment.

[Michael Tomlinson]

Is my hon. Friend not being, once again, overly pessimistic this morning? Does he not recognise the benefits of public consultation, such as the very one that produced this Bill?

--- Later in debate ---

[Kit Malthouse]

No, I am not being pessimistic. I am, I hope, exhorting a message of confidence and optimism that we as politicians should have some sense of belief in what we do. We take our chances—sadly, only once every five years now, rather than once every random number of years—and have confidence. Like my hon. Friend, I want to be a champion for the power and the outlook of this House, so that we do not have to go out and consult constantly, that we are based in a philosophy of which we are sure, and that people understand why our decisions are made given what they have seen of that philosophy.

[Mrs Sheryll Murray]

My hon. Friend mentions his experience in previous roles of engaging in unnecessary and lengthy consultation procedures. How much of a financial burden does he feel they have been on the taxpayer?

[Kit Malthouse]

I cannot give my hon. Friend an exact figure, but it is enormous. Many, many hundreds of millions, if not billions, have been spent on consultation where, broadly, minds were made up beforehand. I well remember, back in 2002, the then Mayor of London, Ken Livingstone, consulting on bringing in the congestion charge. He, of course, had already made the decision. In fact, during the consultation the gantries to put the cameras in were already going up. Of course, the response from the public came back overwhelmingly against—nobody wanted it. We could all see the disaster it would be, not least because it was not a congestion charge but a tax on central London. He just shoved it in anyway.

I led the judicial review against the congestion charge in the High Court and sadly failed. The only chink in the armour we could find was the environmental audit, which was useful to me then but is a vehicle that Ministers and other politicians go through to tick the box. We find ourselves, as a country, in this enormous box-ticking exercise. So uncertain are we of what we should and should not do, and so wary are we of the vagaries of public opinion and fashion, that we feel the need to consult constantly.

The wider point is that it communicates to the public an uncertainty about political institutions and therefore undermines respect for them. When people talk about the politicians they respect, they always talk about—even though they did not agree with him—the great Labour Member, Tony Benn. Tony Benn always used to say, “Say what you mean and mean what you say.” I do not think Tony Benn ever consulted about anything in his entire life. He had his beliefs pretty much set at an early age and he delivered them. Everybody knew where he stood. Our former great leader, Margaret Thatcher, was exactly the same. A lack of consultation with her party colleagues might have done for her in the end, but consultation on the broad thrust of policy was anathema to her. She displayed and promoted what she believed. On that note, I commend my amendments to the House.

[Several hon. Members rose—]

--- Later in debate ---

For amendment 3 my hon. Friend the Member for North West Hampshire invoked the Private Frazer-style of debating, and made us all feel—hopefully not people outside the House—that they might be doomed were they to engage in what we all know to be a particularly satisfying form of charitable and public service, which is serving as a charity trustee. My hon. Friend the Member for Torbay (Kevin Foster) was effective in giving some of the reasons why many of us were unconvinced by that.

[Kit Malthouse]

Will the Minister give way?

[Jane Ellison]

I will; it is only fair.

[Kit Malthouse]

By no means was I trying to give the impression that charity workers and trustees across the UK are not doing brilliant work. Most of them are well-minded, and efficient in disposing of their duties as they should. As I am sure the Minister will agree, much of our legislation involves dealing with exceptions. Most people live their lives largely untouched by legislation in this House—although more and more they are touched by legislation from over the water in Europe—but we are dealing with exceptions. All I was trying to do was to deal with an exceptional circumstance where a negative situation may arise, and I have nothing but admiration and optimism for the vast majority of charities, charitable workers and trustees.

[Jane Ellison]

That is a helpful note of clarification. I sense we all felt that beneath the Private Frazer amendment lurked a Private Walker amendment instead. My hon. Friend is right to draw our attention to some very high-profile exceptions to the general rule. His exposition of the challenges that some high-profile charities face was compelling. It is helpful for us to have that on the record and to go forward with consensus on the merits of being a charity trustee.

Amendment 3 seeks to give the Secretary of State the power, in the regulations he may make, to make provision consequential on the removal of the Secretary of State’s powers to appoint trustees in clause 1(1) to make

“provision for one trustee to be appointed by the NHS institution, service or function for whose benefit the charitable trust exists.”

The guidance to NHS charities, produced jointly by the Department of Health and the Association of NHS Charities, suggests that the constitution of the new independent charity could provide for at least one trustee on the board being appointed by, or from, the NHS-linked body. It is a suggestion, rather than a binding obligation, that the new charities constitution should make this provision. The constitution of the new independent charity is a matter best decided by those nearest to the beneficiaries. In the case of an NHS charity with separate trustees, the board of the linked NHS body must support the terms of the conversion, including the terms of the new charity’s constitution, for the Secretary of State to agree to the revocation of their appointment. In the case of a charity with corporate trustee arrangements, it is self-evidently the board of the relevant NHS trust or NHS foundation trust that agrees the constitution of the new charity—again, offering that safeguard.

Ultimately, this is all about independence and local autonomy. The level and the nature of the agreement between the NHS body and the new charity needs to be a matter of local agreement. It is a matter for the local NHS and the charity to agree a constitution for the new independent charity that best meets the needs of beneficiaries.

Amendment 3 has similar technical difficulties to those I outlined in relation to amendments 2 and 4. It is unclear to which bodies amendment 3 relates, and what is meant by

“the NHS institution, service or function”.

A service or function referred to in the amendment cannot appoint a trustee. Again, I am afraid that such regulation-making power would not be workable.

Amendments 5 and 6 seek to remove the requirements that the regulations, which may make provision consequential on the removal of the Secretary of State’s powers in clause 1(1), would have to be subject to the affirmative resolution procedure if they amend legislation. Instead, the two amendments propose that the removal of the Secretary of State’s powers should be subject only to the negative resolution procedure. We believe that the affirmative resolution procedure is the appropriate form of oversight for these regulations. Parliament should have the opportunity actively to debate and vote on secondary legislation that amends primary legislation. Making such regulations subject only to the negative resolution procedure would not provide an appropriate level of parliamentary scrutiny.

There has rightly been much discussion this morning about the appropriate level of parliamentary scrutiny—and indeed the meaning of the word “appropriate”—but I think there was a strong feeling in the House that there are moments when parliamentary scrutiny is very important, particularly when it can be done with the level of detail we have seen this morning. I believe the current level of parliamentary scrutiny provided for in the Bill for this regulation is appropriate, and there are a huge number of precedents to support this approach.

I thank my hon. Friend the Member for North East Somerset (Mr Rees-Mogg) for tabling amendments 7 and 8. The amendments seek to provide that the regulations that may be made by the Secretary of State under clause 2(1) to transfer trust property from appointed trustees for an NHS trust or NHS foundation trust back to the NHS trust or NHS foundation trust, should be subject to the affirmative resolution procedure. The amendments would also require that such transfers be accompanied by a statement by the Comptroller and Auditor General—again, a title that attracted a bit of debate in itself—that he is satisfied with the treatment of public assets and funds envisaged in the regulations.