Clause 24 - Community interest companies
Companies (Audit, Investigations and Community Enterprise) Bill [Lords]
10:45 am
Mr John Battle (Leeds West, Labour)
Thank you, Mr. Conway, for giving me the opportunity to say a few brief words, because I am enthusiastic about the idea of the new instrument of community interest companies reaching the statute book. That sentiment is shared on both sides of the Committee, so I am keen to ensure that we do not make obstacles, which may not really exist, so insuperable that we cannot move forwards.
I notice that we are already slipping into using acronyms—I am suspicious of our language being reduced to text language—and referring to CICs as ''kicks''. To use a most appalling pun, I believe that the instrument could ''kick-start'' local economic development. More seriously, we should get away from the acronym and focus on the purpose of the instrument. The purpose is to allow ordinary people to invest a modest amount of money in a company that can provide goods and services locally, so that the benefits will be felt locally. My neighbourhood of west Leeds loses £18 million a year through goods and services being bought elsewhere. We could reinvest that money in our neighbourhood to take the boards off of boarded-up shops and reopen them. We could use the provisions of the Bill to help with the care of the elderly, the sick and youngsters. I want the provisions to have a real practical input, and not be just a financial instrument or just another piece of law.
I shall briefly comment on the remarks by the hon. Member for Weston-super-Mare (Brian Cotter), because I know that he appreciates the purpose of the new instrument. Having read the Hansard record of the debate in another place, I believe that there is a
danger that the Law Lords can become so obsessed with reconciling law that they miss the point. I share the concerns raised on the Floor of the House about the interface with charity law. I worked for 10 years in charity law trying to separate out which activities counted as charity and which counted as educational. However, I cannot support the hon. Gentleman's amendment and I think that we are making a mountain out of a molehill.
More reform of charity law will come. However, the charity commissioners wrote in support of the Government and I read out the letter on the Floor of the House. They say, ''Don't turn charities into community interest companies, but there is nothing to stop a charity setting up, with others, a subsidiary that is a CIC.'' The current remit of the Bill does not dilute the practical effects that the hon. Gentleman highlighted. We should not hold up the Bill by arguing whether we should wait for charity law to be reformed later—when that comes, it will be helpful. There will always rightly be a complex interface between charity law and business activity, because both areas are dynamic and growing, but there should not be a problem.
I shall make three quick points to the Minister on my own behalf. First, I welcome the fact that in setting up the regulations, and in the conversations that the Government had with the sector, the interested voluntary bodies that have campaigned for new social enterprise instruments will be included in the ambit of regulation to work with the regulator. I hope that she can confirm that, because that is most welcome. Secondly, I know that most of the detail will be included in detailed regulations. When will they be published? I look forward to that, so that we can work with the practical instrument as soon as possible.
Finally, can I be assured that when CICs are set up, they will get a fair wind when it comes to competing for contracts and tendering? Only 20 years ago—it is now history—I was involved with setting up co-operative businesses. It may surprise hon. Members, even Labour Members, to know that the most difficult thing was to convince the Co-operative bank, of all people, to accept a workers' co-operative as a viable business. That was not because the co-operative did not have a good business plan; they had a damn good business plan. However, the bank could not understand the complex nature of a co-operative company's structure, or the fact that, rather than one person being involved, all members shared in it.
We are well beyond that stage now, I am glad to say. However, I hope that lack of awareness of the slightly more complex community structure of community interest companies does not deter other businesses, local authorities and public bodies from recognising them, respecting them and treating them fairly. The new companies will need to be treated as good real businesses that can bid for contracts and tender on a level playing field with other private businesses. If we reach the point at which that is the case, we will have an instrument that allows local communities to invest
in their communities, and when they do, that investment will remain in the communities. Even if a scheme goes belly up after a few years—and of course, some businesses do—all the assets will remain in the community.
We are in a win-win situation with this proposal. I hope not only that it will become law, but that the Government will give it publicity and advertise it as a good thing for local communities. We should promote this instrument of community economic development and ensure that it is used.