Co-operative and Community Benefit Societies and Credit Unions Bill [HL]

My Lords, it is always a pleasure to follow the noble Lord, Lord Graham of Edmonton, when he speaks with such passion on this subject. If this sector is to flourish, it needs additional support beyond that provided by the Bill. I was therefore particularly pleased to see the noble Lord, Lord Triesman, enter the Chamber while his noble friend was speaking. He has since been taking assiduous notes from which I take it that it is only a matter of time before the FA will indeed be offering tickets at three shillings each to co-operative, credit union and benefit societies that perform well as his great emporium in Wembley. It is a great achievement for the noble Lord, Lord Tomlinson, to get his Bill back into the House so quickly after it was derailed at the last turn in the previous Session, so we are all pleased that he has done that. The problems that arose with this Bill previously demonstrated a more general issue that Parliament often has with legislation: the problem of what you put on the face of the Bill and what you leave to regulation. Now, as the Constitution Committee has made clear, the balance is right. Clearly it would be ludicrous to put into the Bill the 811 references to friendly societies in the existing legislation, but equally it is sensible to set out the other provisions that are now in place. I do not intend to repeat the points I made in our earlier discussions on the Bill about the values of mutuality. Indeed, the speeches we have heard, particularly those of the right reverend Prelate the Bishop of Salisbury and my noble friend Lord Kirkwood about both the need for and the positive activities that are already taking in this sector have made the arguments very well. But as my noble friend Lord Kirkwood said, the Bill is not sufficient if we want to see this sector to grow as we would like. For it to do that, it may be necessary for a raft of other things to take place. We have to accept that in the current climate, much as we would like it, the sector will not grow as the result of additional government expenditure. Frankly, that is pie in the sky. I think it is fair to remember that the great expansion of the co-operative movement and the initial growth of the credit unions did not take place because the Government wanted it, but because people did. Unless people want these institutions and can see their relevance, they will not grow in any event. However, that does not mean that the state in its various guises cannot help in various ways. The comments made by the noble Lord, Lord Elystan-Morgan, about the Post Office are relevant here. To many of us, the Post Office seems almost to have been scratching around looking for additional roles and not being very successful at finding them, not least because of the permanent crisis at the top of Royal Mail as a result of the industrial relations problems over many years. However, the Post Office is an infrastructure looking for a role and credit unions are a role looking for an infrastructure, so there is a potential marriage here. Bringing it about would require a considerable act of will by the Post Office rather than the credit unions because they are small and can do little unless the Post Office moves towards them. I hope very much that we will see such moves. I cannot say that I am completely optimistic given everything else that is happening in the Post Office, but I hope that we will see some movement. Another area that has been touched on is that of the procurement rules and the need for local authorities and other public sector bodies procuring services to ensure that, as far as possible, those rules are compatible with the capacity of ordinary mortals to fill in the forms and bid successfully for business. At the moment, it is exceptionally difficult to secure public sector contracts unless you are a real expert in filling in the forms. Obviously a rigorous process is necessary, but I do not think that the state in all its guises has been good at providing a user-friendly process. Ministers talk a lot about small businesses bidding successfully for government contracts, but frankly, most small businesses would run a mile when they see the forms. Having grappled with them myself in the course of running my business, and as someone who is not bad at tackling forms, I know that I have fallen foul of them on a number of occasions. Sometimes I have just stopped because I felt that I did not have the will to complete them. I hope that further work is done by local government and others to see how to make the procedure more user-friendly. The final challenge is one of ambition. Many co-operatives, community benefit societies, social enterprises and credit unions necessarily start small and then continue to think small. When you talk to them it is clear that they are very proud of what they do, and often they are delivering public services more cheaply and effectively than the bigger state bodies. However, they suffer from the same problem as many NGOs in the past: they are good at doing something small, but do not know how to do it big. The challenge is how to encourage greater ambition and management capacity in the sector. When we discussed credit unions a couple of months ago, again at the behest of the noble Lord, Lord Tomlinson, I suggested that there should be an industry-wide programme from the banking world and the financial sector more generally under which bankers would spend pro bono time working with credit unions in the same way as lawyers do a lot of pro bono work, particularly in education but in other sectors as well. The noble Lord, Lord Myners, kindly took up my suggestion and wrote to Angela Knight at the British Bankers’ Association suggesting that it might look at this. This happened only recently and I know that the BBA has had one or two other things to consider, but I wonder whether the Minister could let me know whether his noble friend had a reply to that letter. More generally, just as my noble friend Lord Kirkwood is on the board of the Wise Group, many Members of your Lordships’ House already serve on the boards of community benefit societies or enterprises and play a valuable part in them, not least in explaining how the system works to people who, while extremely well-meaning, highly motivated and hard-working, feel outfaced when they encounter what they see as huge entities with which they need to contract if they are to be successful. Perhaps we should have a Peers’ mentoring or trustee initiative to get Members of your Lordships’ House, who between them have a great deal of relevant experience including on boards in the commercial sector, to do more in this area. We need a range of additional measures to supplement the very good provisions contained in the Bill.