Charities Bill [HL]

My Lords, I need to declare interests, as the noble Lord, Lord Hodgson, has done. The most merciful way of doing that is to repeat what I said at Second Reading last time round, which is that I am a trustee of many charities and that my firm acts for more than 500 charities, the enumeration of which would be superfluous. I should also like to identify myself with what the noble Baroness said about Lady Blatch. I was not of her party but grew both to respect her—that was easy—and to have considerable affection for her, which is particular. As has been said, she will be sorely missed. Changing tack entirely, I should like to say how grateful we on this side of the House were—I am sure that I speak for noble Lords on all Benches—for the manner in which Fiona Mactaggart, a Minister in the other place, dealt with this Bill the first time round. We are sorry that she will not deal with it this time round as she has a huge amount of experience and knowledge which would have been very useful, but that is the way of politics. One cannot resist using that wonderful little French bon mot, déjà vu, because nothing else quite fits the bill. Some 31½ hours of debate—it felt like 61½ hours—compressed into two months is pretty rare. I should like to think that we can deal with this Bill second time round with real dispatch and that it will not be improper to refer to what we said but a couple of months ago. I hope to keep my remarks today as minimalist as is perhaps proper. I felt that the way in which we dealt with Committee last time was a model of its kind. A great deal of credit for that goes not only to the noble Baroness, but even more so to the noble Lord, Lord Bassam, who carried the burden of that. Our deliberations, besides being almost wholly without any partisan tint, were practical and to the point, and they yielded a very much better Bill. Over 50 major amendments were introduced, as well as many others, and it was good to have a Government, and government advisers, who were constructive at all stages. I am sure that if we continue that pattern we will get through the rest of this Bill and come out with something even better. In the Queen’s Speech debate, when I was bashing on against excessive legislation, the noble Baroness made the perfectly reasonable jibe, ““Yes, all but your own pet piece of legislation; the Charities Bill””. Yes and no. I am not mad about this Bill; if it were to die a sudden death the charity sector would survive. There is a terrible, unintended regulatory creep about large measures like this, and it is wholly unintended. If all legislation were as properly considered and consulted on as this Bill, we would have a lot less legislation and a lot better legislation, because this has been a model. I pay tribute to the many outside bodies that have given us briefings; I see noble Lords around the Chamber nodding. It has been a model. One can single out the Association of Charitable Foundations and the National Council for Voluntary Organisations. There are many others, and they have been and continue to be hugely helpful. Getting down to the meat, the noble Lord, Lord   Hodgson, said nothing with which I disagree. It makes for boring debate when you do not get the cut and thrust between opposing Benches, but the only thing that I dissented from was his remark about differential thresholds. It sounds impressive when you reel off all the different thresholds and say, ““There is a right old muddle in the making””, but the other side of that coin is sensitivity. We need sensitivity to different sizes and types of charity in different circumstances. I would be leery about hacking back the different thresholds simply to achieve fewer of them. Beyond that, what the noble Lord, Lord Hodgson, said about religion was a point well made. The Government responded to our amendments early on. The noble Lord, Lord Hodgson, and I put down an amendment on 9 February, which had a definition that was based on the Australia and New Zealand model—which has the advantage of working in those countries, which are not wildly dissimilar—and having a bit of case law to elucidate them. A number of representations have been made to me about the present definition, which is contained in Clause 2(3)(a), which describes religion as including:"““(i) a religion which involves belief in more than one god, and""(ii) a religion which does not involve belief in a god””." The one thing that is missing from that, as compared with the amendment moved by the noble Lord, Lord   Hodgson, and me, is that ours said:"““In carrying out any such consultation  . . . ””—" that is referring to the Charity Commission’s duty under this Bill to draw up guidelines vis-à-vis public benefit, including—"““acceptance and observance of canons of conduct””." The Government might consider whether there is merit in preserving those words, or something like them, because it could be argued that the definition included in the Bill in subparagraph (3) lacks some guidance in that respect. Do not forget that the redefinition of ““charity”” in Clause 2 under 12 headings is not designed to change the law one whit, it is simply to make it clearer and in effect to codify it. I refer briefly to human rights, because that too finds a place in the definition of charity in Clause 2(2)(h), which talks about,"““the advancement of human rights, conflict resolution or reconciliation””." That is an immensely important development, which builds on the fairly recent acceptance by the Charity Commission of the human rights head as a charitable one. I remember having good arguments with the Charity Commission about this until very recently. It would be helpful if in winding the Minister could say a word or two about what he conceives that head—the advancement of human rights—to include. I hope that is not too fast a ball to bowl so early in our sojourn now. Public benefit remains the one issue that conjures up a little partisan fire, although it does not in my breast. I am not one who wishes to see independent schools and hospitals cast out of the world of charity; far from it. Retaining independent schools within the charity net has huge benefits for them in keeping them on the straight and narrow, and huge benefits for society, provided that the public benefit that is now a requisite of all types of charity is in fact present. We got to the position last time at the end of the day when washing up time came around, where the refusal of   the main opposition Benches prevented this Bill becoming law before the election. The Government were saying to me and to the Conservative representative—the noble Lord, Lord Hodgson, was not there so he is excused—that they would accept the amendment that I had long been moving on public benefit if the Conservative Benches would likewise accept it. We got to the point where they were inclined not to oppose my amendment, and indeed I heard that the Independent Schools Council was inclined not to oppose my amendment, which was designed to bring a little clarity to the present somewhat over-generalised definition of public benefit in the Bill as it comes before the House now. I read the wrong part before. The amendment said:"““In carrying out any such consultation in relation to charities which charge for their services the Commission shall consider the extent to which access thereto is restricted and the public benefit consequences thereof””." That was designed more than anything else to clarify what is in my view worse than uncertainty in charity law, which in this area rests on a single case, Re: Resch. That was not an English case; it was an Australian Privy Council case. It was not to do with schools, but hospitals; and the judgments are notoriously jelly-like. A decent lawyer can make a good case for virtually any proposition on the basis of Re: Resch. If you have trouble sleeping, keep it by your bedside. I was amused that the briefing note that the Independent Schools Council sent to, I suspect, all of us, had the wonderful statement:"““The Resch principles are in the law books for anyone to read””." Indeed they are. Read, and read, and read ye may, but a certain conclusion you will not find; hence, my amendment. I hope that the Government will accept the amendment this time round. We do not have an election to worry about, and no one seems to be against it. I turn briefly to one or two other matters. First, the merger provisions are important, because they allow charities to merge. Remarkably, in the course of merger under the Bill, the assets of the two charities will by operation of law transfer into the merged body or the new charity into which they merge. That is an extraordinary and wonderful thing. No conveyances; no transfer documents; no share transfer forms—whoomp. It happens overnight, by magic. I remain deeply unhappy, as does the Charity Law Association, about the fact that in this circumstance debtors may not be adequately and properly protected. The same goes for the provisions in relation to the new CIOs, the new independent charities that have corporate status. Under that new regime an existing unincorporated charitable trust can convert into one of those corporate CIOs, and again there is an automatic transfer of assets, which I believe is inadequate protection for those who had debts to the old unincorporated trust entity. Those are two matters to which I expect to return. I am in constructive conversations with the Charity Commission and hope we shall get somewhere. There is then the issue of costs before the Charity Appeal Tribunal. Much was said about that important issue in our deliberations in Committee. It is important because I concede that the tribunal is potentially the single most useful part of the Bill. Without being nasty about the Charity Commission, which on the whole does a very good job, it, like any organisation that has monopoly control, needs the incentive to respond in the way that it should, especially to small charities which cannot afford lawyers, accountants, and so on. The problem is simply that going before the Charity Appeal Tribunal will not be markedly different from going before the High Court. The same issues—mainly legal ones—will need to be debated and argued by a lawyer. The Charity Commission will, of course, have lawyers operating on the other side. There is still a good deal of unhappiness on other Benches about how this will work out. We need to explore the notion of a suitors’ fund or something along those lines. We have useful concessions in that the Government accept that the Charity Commission could get its costs against an applicant charity only when the charity had been vexatious. Fair do’s, they have said that the Charity Commission has to pay the applicant’s costs not when it has been vexatious but unreasonable. There is a different test for the commission and the charity, which is in favour of the charity. That is all very good, but I have a feeling, as a long-in-the-tooth charity lawyer, that the tribunal will not be as useful as it should be because of costs. We need to come back to that and, in so doing, I reiterate what the noble Lord, Lord Hodgson, and the noble Baroness said, which is that everyone who is and has been engaged in the Bill is most worried about the impact on small charities. They constitute 95 per cent or 97 per cent of all charities. Great oaks from tiny acorns grow. We must not allow their situation to be made worse; they are the glory of our culture. We need to do a bit more work on receivers and managers as there are inadequacies on those aspects, but I shall now shut up shop. I had a list of the main changes that we had persuaded the Government to include in the Bill, and tempted though I am to read them, I shall desist. I am sure that your Lordships will cheer me for that.