Naomi House Children's Hospice

– in the House of Commons at 4:45 pm on 4th December 2008.

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Motion made, and Question proposed, That this House do now adjourn. —(Helen Goodman.)

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Photo of Maria Miller Maria Miller Shadow Minister (Children, Young People and Families) 5:25 pm, 4th December 2008

I thank you, Mr. Deputy Speaker, for giving me the opportunity to hold this debate, and I am grateful to the Exchequer Secretary for coming along to respond to it.

Naomi House was badly hit in the recent Icelandic banking crisis. The charity had a deposit of £5.7 million with Kaupthing Singer & Friedlander, which had its assets frozen two months ago. Naomi House is a children's hospice that supports hundreds of families with children who have illnesses that will shorten their lives—terminal illnesses. Those families come from throughout Hampshire, the Isle of Wight, Dorset, West Sussex, Berkshire, Wiltshire and Surrey. To deliver its service, the hospice relies on trained doctors and nurses as well as on the efforts of more than 400 volunteers. Some 1,400 corporate organisations, many in my constituency, support the hospice, including the Automobile Association and Winterthur Life.

Singer & Friedlander, an old, established British bank taken over by the Icelandic bank Kaupthing in 2006, was regulated by the Financial Services Authority. When the Government acted to freeze its assets, it was clear from the start that they did not intend charities, large or small, to suffer as a result. Indeed, in one Prime Minister's questions, the Leader of the House, who was standing in for the Prime Minister at the time, stated that there would be 100 per cent. protection for small charities and that the Government were

"taking steps to protect larger charities by freezing the assets of the Icelandic banks and by lending £100 million while the unfreezing of those assets is sorted out."—[ Hansard, 15 October 2008; Vol. 480, c. 790.]

That was an encouraging response, in which the Government articulated specific support. Indeed, on another occasion the Leader of the House, when questioned specifically on the plight of Naomi House, stated in the national media that direct support for charities would be in place, that the Government would do everything that they could to help charities and that they would not leave charities on their own. More recently, the Parliamentary Secretary, Cabinet Office, Kevin Brennan, made it clear that the commitment to helping charities through this crisis was still very much alive and well.

The problem is that we are now two months on from when the assets were seized, and Naomi House has yet to see any of the promises bear fruit. It has seen confirmation that it is classified as a large charity under FSA rules, which means that it will be placed in a queue with other wholesale investors such as local authorities. In no way have the specific difficulties faced by charities been recognised, particularly in respect of securing borrowing to try to get them through this difficult time.

At the creditors' meeting on Monday it was clear that recovering the money that has been lost will be an immensely long and drawn-out process, with no certainty about the outcome. Naomi House has also learned that the Office of the Third Sector will produce an action plan, but that is promised only for some time in the new year. Recent comments from the Minister with responsibility for the third sector at the National Council for Voluntary Organisations recession summit made it clear that the action plan will look more broadly at the economic downturn faced by charities, rather than at the banking crisis in particular. Frankly, despite specific approaches to the Prime Minister, the Department of Health and the Charity Commission, there has been radio silence from the Government about how they will keep their undertakings real and alive for Naomi House.

The problem faced by Naomi House is that one third of its assets—£5.7 million—are frozen. For any organisation, that is a significant and overwhelming financial crisis. As a direct result of that, on 25 November Naomi House was forced to suspend its at-home service for terminally ill children in my constituency. The hospice-at-home outreach programme provided unique and much-needed support for families, and it was due to be rolled out into other areas of Hampshire, yet now the future of that service is bleak, and it has been suspended indefinitely. Two months may not be a long time for a Minister or Department, but it is a very long time for a charity that is almost completely reliant on its own financial resources. The trustees have been forced to take this action to safeguard other services. Without some clarity today, there may have to be further announcements.

This matter cuts across other Departments. I know that the Parliamentary Secretary, Cabinet Office, is well aware of the issues that face Naomi House, but his recent comments serve to illustrate the fact that a one-size-fits-all financial solution will not necessarily work in this case. I hope that the Exchequer Secretary can respond to that point. The hon. Gentleman suggested that the Department of Health, local authorities and primary care trusts could offer some way forward in terms of additional short-term funding, but the local situation in Hampshire for Naomi House means that it has no local authority contracts or PCT funding and receives only £300,000 from the Government through the Department of Health. In the context of a yearly turnover of £2.5 million, that is a tiny amount of money, but there is no indication from the Department that it is going to increase it in the near future, unless the Exchequer Secretary can advise me otherwise.

The time has come for the Government to act decisively by clearly stating the support that Naomi House will receive. It is doing what it can to help itself. It helped to establish the Save our Savings group—a group of charities that are affected in the same way by the Icelandic financial crisis—and has secured a seat on the Kaupthing Singer & Friedlander administrator's creditors committee. However, the time has come for the Government to do their bit, too, and to show that they will follow through with some tangible support, as they promised when this crisis started.

Going back to the promise made from the Front Bench by the Leader of the House on 15 October, what steps are being taken to protect larger charities, particularly given the protracted nature of the administrative process? The NCVO has been working hard to support the sector and pressing for a loan facility. What is the situation with regard to loans? Providing such support until charities are able to recover their own money may be just the sort of help that can stop any further cuts to important services such as those that Naomi House provides. The Leader of the House said that that money would be available, but we are still to hear any details.

There are some specific differences in the Naomi House case that suggest that the Government's general approach may not provide the support that is intended. Will the Exchequer Secretary therefore undertake to look into the problems that it faces as a special case?

The Government may want to consider, perhaps not now but in the medium term, whether the FSA rules on eligibility for compensation, which use the Companies Act 1985 to define what constitutes a small charity, are as robust as they need to be. Leaving Naomi House out in the cold cannot be anything other than an unintended consequence of how the current regulations are drafted.

Will the Exchequer Secretary undertake to join her colleague, the Parliamentary Secretary, Cabinet Office, who has offered to meet representatives from Naomi House to secure a cross-departmental solution to the problem?

In conclusion, Naomi House works throughout seven counties, and in constituencies that are represented by Members of Parliament on both sides of the House. It provides a service that the NHS does not. It supports families of terminally ill children in a way that no other service does. A petition on the 10 Downing street website, calling for Government assistance, was set up by local campaigner Steve Brine and now has more than 4,000 signatures, which shows the strength of feeling in Hampshire and beyond about the plight of Naomi House.

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Photo of Oliver Letwin Oliver Letwin Shadow Minister without Portfolio

I hope that my hon. Friend is aware that many of my constituents in West Dorset feel exactly the same way, and have benefited from the services provided. They are very anxious for those services to go on being provided.

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Photo of Maria Miller Maria Miller Shadow Minister (Children, Young People and Families)

I thank my right hon. Friend for his intervention, and for showing his support for the work that we are doing. His intervention serves to reiterate that the services supplied by Naomi House are not just confined to the boundaries of one county, but spread far and wide. That is a testament to the work that it does, and to its professionalism.

Naomi House is a lifeline for many families—families who are in a position that many of us hope never to find ourselves in. I hope that the Exchequer Secretary will use the opportunity of the debate to show her clear support for the work of Naomi House, and to outline exactly what the Government propose to do, in tangible, specific terms, to ensure that this charity can thrive in the future.

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Photo of Mark Oaten Mark Oaten Liberal Democrat, Winchester 5:36 pm, 4th December 2008

Given that we have slightly longer for the Adjournment debate, I would like to make a few remarks to support the speech made by Mrs. Miller, but I do not want to detain the House long.

Naomi House is in my constituency, and during the 12 years that I have been a Member of Parliament, it has been a jewel in the crown of the Winchester area. It does not serve just the Winchester constituency, but as the hon. Lady mentioned, a large area with a large number of children who have benefited from the facilities that it provides. The point that I wish to emphasise to the Exchequer Secretary is the different nature of this organisation. It is not like some of the other charities that have lost money in Icelandic banks, such as local authorities or many of the businesses affected. It is unique in that it provides a service that many people would argue is one that the Government should provide. Many of us were surprised to find, when we came to Parliament, that hospices were not funded by the NHS. If they did not exist, somebody—the Government, we assume—would have to provide such care for children in such awful circumstances.

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Photo of Oliver Letwin Oliver Letwin Shadow Minister without Portfolio

Does the hon. Gentleman agree that that is particularly the case with children's hospices? Adult hospices in our constituencies receive significantly more support from the NHS than children's hospices.

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Photo of Mark Oaten Mark Oaten Liberal Democrat, Winchester

The right hon. Gentleman is right. It has always been very peculiar that children's hospices have been treated in that way, but that is what has happened, and charities such as Naomi House have had to take on a responsibility that should be taken on by the Government. It is a responsibility that does not relate just to the work that takes place in the buildings of Naomi House, but to the outreach work that it carries out in people's homes. It has worked alongside the NHS on that, hand in hand with hard-working professionals at the Basingstoke and Winchester hospitals. We are now seeing the acute impact that the loss of funding is having. Those professionals working in the NHS now have to find more time in order to fill the gap that has been left by the disappearance of the service provided by Naomi House for outreach work.

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Photo of Christopher Huhne Christopher Huhne Shadow Secretary of State for Home Affairs, Home Affairs, Shadow Secretary of State for Justice & Lord Chancellor, Ministry of Justice

I would like to support my hon. Friend's comments to the Exchequer Secretary because in my constituency, in south Hampshire, Naomi House is one of the most popular charities. It is repeatedly subject to mayoral and other appeals precisely because of its outreach work, which is the work most threatened by the freezing of the £5.7 million.

It is also worth pointing out that the children's hospital movement throughout the country is important because it provides parents with respite care in what is an extremely gruelling time. I entirely support my hon. Friend's comments about the outreach work combined with the respite care. It is difficult to know how we could survive without it. The public sector would need to provide it if it were not provided in the way in which we have discussed.

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Photo of Mark Oaten Mark Oaten Liberal Democrat, Winchester

My hon. Friend makes a good point. If the service disappears, Government money will have to be found to meet the demand because, sadly, children with diseases and illnesses will not disappear.

I hope that the Exchequer Secretary sets out Government thinking for dealing with such a unique situation. It will be disappointing if she responds in general terms and talks about the Government's plans for businesses or charities. As the hon. Member for Basingstoke said, the FSA schemes for charities will not help Naomi House.

The matter requires not only a Treasury response but a response from the Secretary of State for Health. I am disappointed that the Secretary of State has been silent about the issue because there is a moral, if not necessarily a legal, departmental responsibility to engage with it. I hope that the Exchequer Secretary takes away my hope, which I suspect others share, that the Secretary of State for Health will be prepared to meet the trustees and chairman of Naomi House to discuss the impact of the loss of money and how that will affect the NHS in the Hampshire region and beyond. I would also like to consider whether, in the next couple of months, we can find a way of putting money into Naomi House so that we can restore the outreach programme and provide assurances that it will continue its current work.

Naomi House has a fine reputation for providing facilities for younger children who are sick, and it has recently begun a programme of building Jacksplace, which will be a superb facility for teenagers who are in need of such care. It has always been awkward for Naomi House to have young children and teenagers together in a hospice. Several hon. Members and I were able to attend the laying of the foundation stone for Jacksplace. I fear that it will also be in jeopardy unless we can find funds urgently for Naomi House.

I hope that the Exchequer Secretary will view the matter as unique. I do not want to do down other charities that look after cats or rare birds, but surely the charity that we are considering does, in many ways, the Government's work for them. It has lost money through no fault of its own and must cut back essential services for children. The charity is a case for special pleading—the Government should step in and act with urgency.

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Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee 5:43 pm, 4th December 2008

I congratulate Mrs. Miller on securing this important debate and I thank other hon. Members with a constituency interest who have contributed and rightly reflected their concern and that of their constituents about the circumstances in which Naomi House finds itself.

As the hon. Lady said, the hospice does extraordinary work to provide respite care, terminal care and bereavement support for children and families from across the south of England. I know from my inquiries that hundreds of families are grateful for the dedication of the Naomi House staff and the support that they have received from the charity, often at the most traumatic times of their lives.

The Government's current support for Naomi House is worth £330,000. As the hon. Lady pointed out, that is a small portion of the overall funding that the charity generates, and pays for only a small portion of the work that it undertakes. I have a similar institution, Clare House, in my area, albeit not in my constituency. Many right hon. and hon. Members in all parts of the House have had direct experience of the extremely valuable work that such organisations do. I hope that no one will be in any doubt about the widespread recognition of the value of the work that such institutions do. In recognition of the work that children's hospices do, the Government announced in February that the current grant for England's 40 children's hospices would be extended, with a further £20 million available between 2009 and 2011.

As the hon. Lady pointed out, Naomi House is among those British charities that hold deposits in the Icelandic banks or their UK subsidiaries. This is an extremely uncertain time for those charities and for a wide range of other bodies that are in a similar position, be they companies, educational establishments, local authorities or other not-for-profit organisations. The majority of the charities affected hold deposits in Kaupthing Singer & Friedlander—or KSF—which is a UK-based subsidiary of Iceland's Kaupthing bank. As with much else in the current financial turbulence, the situation regarding the Icelandic banks in the UK is complicated, so it is worth reminding ourselves how we got into these circumstances.

In July, the International Monetary Fund's mission to Iceland concluded that the Icelandic banking sector faced significant risks. On 29 September, the Icelandic Government acquired a 75 per cent. stake in Glitnir, nationalising Iceland's third largest bank. Amid the turbulence in global financial markets, two other Icelandic banks—Landsbanki and Kaupthing—found themselves in increasing financial difficulties. On 7 and 8 October, the Financial Services Authority, the UK's financial regulator, determined that the funds held by the UK operations of those two banks—Heritable and KSF—no longer met the levels of funding required by law. The banks had put themselves in an unsustainable position. Their holdings had sunk to such a level that it would have been dangerous for them to continue accepting money from depositors. To protect retail depositors, the Treasury, using powers under the Banking (Special Provisions) Act 2008, transferred retail deposits from KSF's Edge deposit business and from Heritable to ING Direct. The remainder of the business entered into administration, with the remaining eligible retail depositors also being guaranteed.

The Government have announced that we will guarantee all UK-based retail depositors in Icelandic banks. That guarantee ensures that individual UK savers will receive protection in full. Of course, those charities that are eligible claimants will receive protection under the Financial Services Compensation Scheme, but there are no special rules under the scheme for charities, whose eligibility is determined in the same way as for all other depositors. The FSA is responsible for making the rules governing eligibility for compensation under the Financial Services Compensation Scheme. The rules are based on organisational form rather than organisational purpose. "Charity" is a status that can apply to a number of forms, because charities and other third sector bodies can be—and are—organised in different ways.

The guiding principle behind much of the financial regulation is that the system is intended to offer protection to ordinary investors, savers and users of financial services—in other words, people who have limited resources, who are less likely to have access to the expertise to protect themselves and who might not be in a position to reduce the risks that they face by, say, diversification. In practice, that translates into making private individuals and small organisations of all kinds—that is, retail depositors—eligible as claimants under the Financial Services Compensation Scheme, as well as treating all larger organisations as wholesale depositors and therefore ineligible for the compensation scheme.

The hon. Lady rightly pointed out that Naomi House is not defined as a small depositor or a retail depositor, but as a wholesale depositor.

Many small charities will be guaranteed under the scheme, but Naomi House and other larger charities will not qualify. Like a number of other charities, companies, educational establishments, local authorities and other bodies, Naomi House is classified as a wholesale depositor and, as such, will have to await the outcome of the administration procedures.

The Government's decision to intervene to ensure that retail depositors receive their money in full was based on the need to ensure financial stability and to protect the taxpayer. Compared with small retail depositors, wholesale depositors have a greater ability to assess and mitigate financial risk, including through diversification of their savings or investment portfolios. Charities that are not eligible for compensation from the Financial Services Compensation Scheme will be treated in accordance with the usual administration procedures.

Details of the timetable and the process for the administration of KSF are a matter for the administrators, Ernst and Young, and I would suggest that those charities seeking further information contact the administrators directly. I was pleased to learn—the hon. Lady mentioned this in her speech—that Naomi House has played a central role in the creation of a new charity action group, formed to represent charities that have deposits at risk with KSF. More than 25 charities are members of the group, which is campaigning to secure the return of the funds invested with the bank. I am also pleased to report to the House—again, the hon. Lady mentioned this—that a representative from the group speaking for Naomi House and other charities has secured a place on the creditors committee of KSF, which met the administrators for the first time on Monday. That representation on the creditors committee will give charities a stronger voice during the administration process. The third sector is independent and, as such, it is not the Government's role to provide charities and other not-for-profit organisations with financial advice.

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Photo of Mark Oaten Mark Oaten Liberal Democrat, Winchester

There was indeed a meeting on Monday, and I do not know whether the Minister has heard the feedback, but it was pretty grim news for the charities attending because the creditors made it clear that the charities were very much at the back end of the queue, so it is very unlikely that Naomi House will have its money returned under that process.

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Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee

Processes of administration have to be gone through and the creditors have a particular queue to go through in law. There is no option but to go through the process. I recognise that it leads to some uncertainty, and it is too early in the process to tell whether all the money will be forthcoming in the end. That is the nature of administration procedures of this kind, as the hon. Gentleman knows.

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Photo of Christopher Huhne Christopher Huhne Shadow Secretary of State for Home Affairs, Home Affairs, Shadow Secretary of State for Justice & Lord Chancellor, Ministry of Justice

The other problem, of course, is that the administration process can be very lengthy. We have seen under past administrations that the process has taken an incredible amount of time—we saw it with the Bank of Credit and Commerce International, for example. Moreover, the professional advisers' fees have eaten up large amounts of the money that was ultimately available to creditors. In those circumstances, given the importance of the work of some of these charities and the likelihood that the public sector will have to pick up the bill for some of that work if it is not done, does the Minister think that a little more flexibility would be in order?

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Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee

It is easy to call for a Minister to be flexible in these circumstances and I can tell the hon. Gentleman that there is nothing I would like more than to be able to be flexible in all kinds of ways in these circumstances, but there are many creditors and many larger charities with problems in this particular tale. Other public authorities and other organisations and businesses might well say that they have as much of a right to the flexibility that the hon. Gentleman is asking me to exercise on behalf of this charity alone. There are any number of other charities and I have to say that it is very difficult, much as I would like a sensible line to be drawn.

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Photo of Maria Miller Maria Miller Shadow Minister (Children, Young People and Families)

I can understand the problem faced by the Minister, who clearly has to make decisions. I was simply picking up, however, on what her colleague the Leader of the House had said when she was in her place, exactly where the Minister is now. I quote her again:

"We are taking steps to protect larger charities by freezing the assets of the Icelandic banks and by lending £100 million while the unfreezing of those assets is sorted out."—[ Hansard, 15 October 2008; Vol. 480, c. 790.]

It seemed very clear to me at the time that the Leader of the House was offering tangible support to those charities, including specifically Naomi House. Has that situation changed?

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Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee

I am happy to deal with that issue. What my right hon. and learned Friend the Leader of the House said is absolutely accurate, but the hon. Lady might have misunderstood the use of the £100 million. This was a reference to a loan made to the London branch of Landsbanki by the Bank of England on 13 October, in order to assist it in its wind-up. The loan is secured over a significant amount of Landsbanki's assets and at a commercial rate of interest. It is expected that the loan will be recovered in full from those assets as Landsbanki is wound up. That will help to ensure an orderly wind-down for Landsbanki, which maximises returns to its creditors, but it is a short-term loan for Landsbanki.

From information that we subsequently received via the Charity Commission and because of the work of the Parliamentary Secretary, Cabinet Office, my hon. Friend Kevin Brennan, it emerged that most of the charitable money caught up in the Icelandic banking situation, if I may refer to it in that way, appears to be held in KSF. I would not like the hon. Lady to go away with the impression that there is £100 million out there on deposit, waiting to be given in grant aid of some kind to charities that are affected as creditors of the Icelandic banks. That is not the use that the £100 million referred to by my right hon. and learned Friend was put to, and it is not and never was the intended use of the money, which is being focused on a bank that, as far as we can tell, does not have charitable deposits in the same way as KSF.

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Photo of Maria Miller Maria Miller Shadow Minister (Children, Young People and Families)

I thank the Minister for giving way again; she is being very generous. I am surprised by that statement, because the Leader of the House was responding to a direct question about what support was being given to charities. It is surprising to discover that the £100 million was not being made available to charities, but was being used to prop up a bank. Would it not have been better to have perhaps directed some of that money to tide charities over in the way that charitable organisations have asked?

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Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee

The hon. Lady has made her point, but this is not propping up a bank. The £100 million was given to Landsbanki to secure the orderly wind-down of a bank whose assets had been frozen. The assets were frozen to prevent them from being taken out of the country in a drastic and rapidly developing situation. The £100 million that was lent does not prop up the bank. As I said earlier, it helps to secure an orderly wind-down of a bank that is not relevant to Naomi House's issue, because it is Landsbanki, not KSF.

First, this is a loan; it is not a grant. Secondly, it will be recovered in full at a commercial rate of interest as part of the wind-down of Landsbanki, so I would not like the hon. Lady to go away with the idea that, somehow, there is a pot of £100 million that could have been used, or is intended to be used, to give some protection to wholesale depositors. The Government decided to protect retail depositors. Wholesale depositors, whatever their form, go into the queue through the administration process to try to recover the money that they have on deposit. That includes all the authorities, public or otherwise, and companies and investors that do not qualify as retail investors. That is the situation as it is at the moment. Let me assure this House that the Government take very seriously the problems faced by charities with regard to their deposits in Icelandic banks and their UK subsidiaries.

Lord Myners and the Minister with responsibility for the third sector, my hon. Friend the Member for Cardiff, West, have met over the past two months with representatives of the charity sector to gain a clearer understanding of the challenges they face.

Motion lapsed (Standing Order No. 9(3))

Motion made, and Question proposed, That this House do now adjourn.— (Mr. Spellar.)

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Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee 6:00 pm, 4th December 2008

The Office of the Third Sector, in collaboration with a wide range of stakeholders, has been working to ascertain the full extent of investment assets affected by the situation with the Icelandic banks. Third sector representatives involved in this work include the Association of Chief Executives of Voluntary Organisations, the National Council for Voluntary Organisations, the Charity Finance Directors Group and the Charities Aid Foundation. The Charity Commission is undertaking further work that complements the efforts so far. The Office of the Third Sector has also been liaising directly with affected charities and is working closely with the Charity Commission to support charities that have deposits in Icelandic banks.

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Photo of Mark Hoban Mark Hoban Shadow Minister (Treasury)

In these discussions, has consideration been given to a temporary funding facility for charities with money locked up in Icelandic banks to help see them through to the distribution that the administrator may make, which could be in one or two years' time?

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Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee

The hon. Gentleman asks a reasonable question. He is really talking about the Government providing an unsecured loan facility for affected charities, but we do not feel that that would be an effective use of public funding, simply because there is no additional source for such a grant fund to be drawn from. The money would have to be taken out of moneys already earmarked for charitable purposes by the Office of the Third Sector, which would mean taking money out of a series of initiatives that have been decided on for strategic reasons, including third sector capacity building, volunteering, public service delivery and social enterprise programmes.

We could do that, but if one looks at the list of charities that are most affected by the freezing of their assets in Icelandic banks, all are worthy but not all tie in directly with objectives that we would normally expect public money to be used for. I am a great lover of cats, and Cats Protection is one of the charities. How would we distinguish between helping one charity and another in that context, and do so in a way that could be seen to be fair legally?

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D

Angela Eagle cannot distinguish between the plight of dying children in a hospice with that of cats needing protection. This is an outrageous position for the Government to adopt.

Submitted by David Clark Read 1 more annotation

Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee

I will give way in a minute. Opposition Members are right to be concerned but there are no easy answers to the issue, short of guaranteeing all the wholesale depositors as well as the retail depositors. That is a large amount of money, and we would be criticised for using it in that way. A blanket guarantee is not possible. Thinking about whether one could pick out one charity rather than another without being invidious or subject to a series of legal challenges is a complete minefield. I ask hon. Members to think carefully about that. We all would like to be able to do something effective in circumstances as difficult as these. The Government are doing what we can, without getting into that minefield, and we will give the support we can. I can assure hon. Members of that, but there are no easy answers. I am happy to give way again, but I hope that those concerns that I have expressed are being taken on board, because they are very real, and difficult to get around.

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Photo of Christopher Huhne Christopher Huhne Shadow Secretary of State for Home Affairs, Home Affairs, Shadow Secretary of State for Justice & Lord Chancellor, Ministry of Justice

As someone who covered the Treasury for many years as a journalist, I am acutely aware of the traditional attitude that the Treasury takes towards public money, and I would not want it to be other than extremely careful with public money. However, it seems to me that there are two ways in which the Minister might proceed. One of them is that where a charity is in receipt of public funding—as Naomi House is, to the tune of £330,000, as the Minister pointed out—it is clearly embarked on the process of meeting public purposes. Therefore, one clear distinction that the Minister could draw, when extending help to some charities and not others, would be to distinguish between charities that are embarked upon meeting public purposes, which is already recognised in the fact that they are in receipt of public funds, and those that are not.

May I try to help the Minister on another issue as well? She takes the traditional Treasury view that if funding is to be found for one purpose, it must come from somewhere else. However, this is a genuine contingency; it is genuinely unforeseen. It therefore falls well within the potential remit of the Contingencies Fund. Is it possible to use resources from that fund?

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Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee

I am not going to make new Treasury policy at the Dispatch Box now, especially when, as I have pointed out—I hope the hon. Gentleman recognises this, although he did not say that he did—there are genuinely difficult issues in trying to provide support in a consistent and fair way, without reaching the stage where there are simply too many implications for other areas of public expenditure. I am happy to think about what he has said, but I hope he will recognise that there are very difficult issues in respect of whether wholesale, rather than retail, depositors ought to be supported as he suggests.

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Photo of Mark Oaten Mark Oaten Liberal Democrat, Winchester

I understand the difficulty that the Minister faces, and I myself am also struggling to find a way around it. Setting aside the arguments that are being put forward, might the Minister be flexible on this issue? If we discover that the primary care trusts are struggling significantly in respect of funding to fill the gap that is now created because of the Naomi House situation, will those public bodies be able to call on the Department of Health to fill that gap? There will clearly now be a gap. They will need additional funding to do the work that Naomi House was doing. That will be the provision of money not to a charity, but to fill the gap that is caused by the PCTs now having to do the work that Naomi House previously did.

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Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee

All I can say is that Members who are working to bring these difficulties to the House's attention must carry on doing that. We need to be kept in touch—as I am sure my hon. Friend the Minister with responsibility for the third sector is being kept in touch—with developments, and we will keep our eye on this issue. That is all that it is possible for me to say at this stage.

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Photo of Oliver Letwin Oliver Letwin Shadow Minister without Portfolio

I wonder whether the Minister has quite taken the force of the point made by Mr. Oaten. We do not yet know what any PCT will have to do. If it transpires that because this matter was not investigated by the Government now, some months from now more public money is being spent on providing a service than would have been spent if the outreach service, for example, had been funded at this stage through Naomi House, that would amount to an increase in public expenditure. It would be sad, to say the least, if there were both a gap in provision and an increase in public expenditure, when there could have been less public expenditure and no gap in the service.

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Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee

I understand the logic of the right hon. Gentleman's argument. I just ask that Members with a direct constituency interest keep my hon. Friend the Minister responsible in touch with developments. I will also endeavour to ensure that the relevant health Minister is made aware of the content of this Adjournment debate, so that we can keep an eye on this situation as it develops. Again, however, I hope the right hon. Gentleman will recognise that there are difficulties in contemplating wholesale depositor protection. That is not possible, and it is very difficult to think about which charities might qualify for special attention over and above others. It is very difficult to see how, despite the helpful suggestions that have been made, one charity could be picked over another.

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Photo of Oliver Letwin Oliver Letwin Shadow Minister without Portfolio

I promise that this is the last time that I shall intervene—but I was not suggesting, and I am not sure that the hon. Member for Winchester was, either, that there should be special protection for any wholesale depositor. I was suggesting that it might, as a public policy of the Department of Health, be rational to fund, at least in the interim, a service that is of importance as a health service.

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Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee

As I said, I shall draw the attention of the relevant Minister to our debate. Despite what people think, the Treasury is not in control of everything. It is for the relevant Ministers to think about the implications of developments in their own areas, rather than for me to commit them from the Dispatch Box to do all sorts of things, given that they are unsighted, and are not even present. I am not sure that they would thank me for making such commitments. However, I undertake to point out to them the nature of the debate that we have had.

With that, I hope that the hon. Member for Basingstoke will convey to her constituents—and Mr. Oaten, in whose constituency Naomi House is, will convey to his—how aware the Government are of the circumstances being faced, and how helpful we wish to be, particularly in respect of developments as they occur. I also hope that hon. Members will recognise the difficulties that we face in this respect.

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Photo of Maria Miller Maria Miller Shadow Minister (Children, Young People and Families)

I just wish to make one simple point on behalf of my constituents, and others throughout the seven counties who use this facility. They will find what the Minister has said compelling in the light of the grave financial problems that this country faces, but somewhat at odds with what her right hon. and learned Friend the Leader of the House said in Winchester when taking part in an interview, and specifically talking about Naomi House. She said that she would not

"leave them on their own".

I think that Naomi House could be forgiven for feeling very much on its own after today's debate.

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Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee

That was rather an uncharitable intervention, because I have done my best this evening to set out some of the difficulties with the difference between retail and wholesale depositors, and them the implications of them. I do not believe that this Government are leaving the charitable sector on its own. Its representatives have met two different Ministers, we are in contact with developments and we have met the range of organisations that I listed to deal with the ongoing situation. The point at issue is whether wholesale depositors can be converted into something else and helped in part, because it is not possible to guarantee all wholesale depositors—indeed, many Members of this House would not regard that as a remotely acceptable development, if it were to occur.

We face difficulties, but I would like to emphasise again that this Government have not left charities on their own. We are working with them to see what we can do to assist them as this process goes on. We will continue to do that, and I hope that the hon. Lady will be assured by my suggestion that that is so.

Question put and agreed to.

House adjourned .

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