Welfare Reform and Work Bill — House of Lords, 2015-12-21
Topic: Social Welfare
Jeffrey Rooker (Labour, Centre-left): My Lords, I support the noble Lord, Lord Kirkwood. He was quite friendly towards me about raising this matter in Committee. It was the noble Lord who drew my attention to Clause 20. I had not known about it. As will become clear, it is to the Minister we owe this debate because he alerted us to these banker-sized salaries in answering a question a couple of years ago In the 1970s, I was in the Commons when the scheme to replace the old invalid trike was set up, so I am aware of the positive change. When I had a proper job before I was an MP, I used to work in Thames Ditton as production manager at a loudspeaker company. AC Cars Ltd, which was in Thames Ditton, built what was known as the invalid trike, the single seater. Like my noble friend I make no comment on the Motability scheme, save to say that it has given access to mobility for some 4 million people over the years. I hope that it will for years to come Given that we are dealing with public money, I support the amendment moved by the noble Lord, Lord Kirkwood. It should go beyond the PAC and at least include the DWP Select Committee, which has never shown any interest in this, and the Charity Commission, which is useless as the regulator of charities. Implementing the amendment at least would lead to an inquiry into the finances of the scheme DWP is paying the Motability charity around £20 million. The charity gets about £7 million in lease levy from the vehicles used. It has an income of about £30 million. The charity, which is more than 60% dependent on government funds—this is public money but not in the way we expect public money to be raised; it is government money from the DWP paid to the charity—has two employees on more than £160,000, which is more than the Prime Minister earns, and another employee is on a six-figure salary. Last week, when the Times exposed anger about six-figure charity pay deals, it did not mention this, but it could well have looked at the Motability charity, which is supported and 60% paid for by the DWP. We are not talking about individual donors—this is a straightforward 59.6%, according to the latest accounts. That is partly responsible, in duty, for the whacking great salaries of the charity, and that is before we come to the operations arm. One of the chief executives of the charity is on more than £170,000, another is on more than £160,000 and someone else is on between £100,000 and £110,000. As I say, this is a charity that is 60% paid for by the Department for Work and Pensions But the main scheme, as the noble Lord, Lord Kirkwood, said, is operated by Motability Operations group, which is a company owned by four banks: Barclays, Lloyds, HSBC and the Royal Bank of Scotland. It operates as a contractor to and is directed and overseen by the charity. This, for me, is the crucial link to where public funds are involved. It is public money we are talking about here, but there seems to be no real accountability. The revenue of the company is around £2 billion from the operating leases and £2 billion from the resale of vehicles at the end of the three-year lease. Some 600 cars a day are placed on the second-hand car market. As I said in the debate earlier this year, I am well aware that someone in my family once had such a car. Motability Operations claims that it gets no money from the Government. It states that on page 4 of its latest accounts. But the £2 billion from the leases is in fact the DWP Motability payment to more than half a million people, and because they have agreed to assign their DWP allowance to the scheme, the money is paid directly to Motability Operations. That is what Clause 20 is all about I support Clause 20, by the way, and in my view it ought to be retrospective in order to claw some public money back from this company and thus enable the Government to recover their costs. There is a direct link, and this clause is the missing piece of the jigsaw. After our debate in February I went to the Public Accounts Committee, the National Audit Office and the Charity Commission, but no one wanted to know. They said, "It is not public money so it is nothing to do with us". This clause links it all together, so it is a really useful one and I am grateful that it is in the Bill As my noble friend said, the chief executive of the operations company is on a package of more than £900,000. The chair is on a package of £195,000 and a handful of directors—fewer than five, I think—take £3.3 million between them. There are also loads of long-term incentives for the CEO and the directors. The whole system depends on the DWP payment, which Clause 20 makes clear; it shows the direct link. As such, the NAO and the PAC should take a look at it, and that is what the amendment is about. The Charity Commission should be interested in the governance arrangements. It could ask, for example, why the chair of the company operations remuneration committee thinks it right to stand down after two three-year terms, as set out on page 43 of the accounts, and yet the charity trustees have been serving for four decades. I repeat: four decades. When you ask the Charity Commission about it, all it ever gives you is the last time they were elected. Of course, they are all on something like three-year terms, but no one is interested I have to say that Alan Yentob came unstuck after serving loyally as a trustee at Kids Company for 18 years because after that length of time he could not tell the difference between management and governance. His 18 years as a trustee is less than half that of some of the Motability trustees, but the Charity Commission does not seem to bat an eyelid about it. There is a strong case for the Nolan principles of public life being applied to the third sector, which of course they are not, but I think they would cover this point. In short, we have here a service that everyone agrees is a public good. There is no argument about that. But it is based on public funds and however the risk factors are dressed up—they are minimal in comparison with the real private sector—they are being used to pay these banker-sized salaries. Of course, I accept that the second-hand car market is highly specialised, but let us face it, it is the biggest company going with 600 cars a day feeding into the market.