Charities Bill [HL]

My Lords, I am grateful to the noble Lord for his intervention. Many points were raised and questions asked during the debate. It is worth putting on record that when the Bill was first considered, we as the Government were tabling some 160 amendments on Report. They were in large measure, as has been acknowledged this afternoon, a response to proper concerns to improve the quality of the legislation. We in this House benefit from the wealth of expertise of the charitable sector. All those who contributed to the debate this afternoon correctly declared their interest, involvement and expertise. I know that we shall benefit from that when we get into the detail. As ever, I am impressed by the commitment and enthusiasm for the thriving charitable sector and its important role in civic society. The noble Lord, Lord Dahrendorf, made his usual point about the need for creative chaos and the charitable sector’s role in that. Everyone acknowledges the value of an independent view and approach to service provision and the need to provoke an important debate within civil society about its role. I shall deal with some of the questions that were raised. I apologise in advance for those that I cannot cover, but we shall have the benefit of time in Committee to discuss some of those issues again, as has happened in the past. The noble Lord, Lord Hodgson, opened by setting out his stall of concern, and focused, as expected, on the independence of the Charity Commission. That was reflected in contributions from all sides of your Lordships’ House. It is worth saying that while we explored those matters fully in Committee, we have moved as far as we rightly can in the circumstances to enshrine the independence of the Charity Commission in legislation. The debates have focused on that helpfully. We do not believe that a viable alternative has yet been shown to the commission’s current status as a non-ministerial department. The Bill provides for the   issues to be explored, and we think that the independent review that is to take place after Royal Assent could spend some useful time focusing on that issue. As yet, we are unconvinced that there is any further direction that we can take that would do more than we have already done in bringing the Bill forward a second time to enshrine and guarantee the independence of the commission. The noble Lord, Lord Hodgson, focused also on the requirement that the commission should facilitate innovation within the charitable sector. We agree with that, and the commission already has an objective to promote the effective use of charitable funds. That could encompass the encouragement of innovation where appropriate, but we do not think that there is any magic in innovation for its own sake. The noble Lords, Lord Hodgson and Lord Phillips, focused on the definition of religion, and the noble Lord, Lord Phillips, asked why we should not follow the Australian and New Zealand model and the language that they use in their legislation. We believe that the Australian definition which refers to,"““belief in a supernatural Being, Thing or Principle””," goes much wider than the definition that we propose. It potentially includes belief of systems that are outside the general understanding of what a religion might be. The Bill allows non-religious belief systems, such as those promoting moral and spiritual welfare to be charitable by another route. We think that that all-encompassing approach probably satisfies the demands and interests of most of those organisations seeking charitable status. The noble Lord, Lord Hodgson, raised the issue of financial thresholds. We are happy to review those limits, which can be changed, as I explained in Committee the first time round, by secondary legislation. We think that that will probably need some further consolidation. The limits are fair and reasonable as they sit, and it is inappropriate to make those changes in the Bill. It is best that they are given some further detailed consideration outside the legislation. The noble Lord, Lord Hodgson, referred to local authorities refusing to allow certain collections, and cited the Alexandra Rose Day collection. The Bill introduces a new licensing regime, and decisions on organisational eligibility to collect will be for the Charity Commission, not local authorities. That will remove the current inconsistencies and ensure that charities are not discriminated against on that basis. The noble Lord also talked about the need to update plans for self-regulation fund raising. Broadly we welcome the work of the sector, particularly the Institute of Fundraising and developing the proposals for self-regulation. We published a consultation indication of the criteria for considering and judging the success or failure of the scheme. That consultation closes on 17 June, and we shall make an announcement shortly afterwards. The noble Lord, Lord Hodgson, referred to the Attorney-General and the Charity Commission and the need to have power to refer matters to the Charity Commission Tribunal. We are considering that, and obviously we shall announce the fruits of our consideration to your Lordships in due course. The noble Lord, Lord Phillips, was very constructive and as helpful as ever. I defer to him in all matters relating to charities because of his wisdom, knowledge, background and experience in charitable law. The noble Lord focused, understandably, on the public benefit test requirement, and many other noble Lords contributed to that debate. The Bill deliberately does not set out a definition of ““public benefit””. As I explained when the Bill was last before the House, the Government believe that it provides an adequate basis for the Charity Commission to carry out a programme of public benefit checks. This afternoon is not the time to debate the detailed wording of the Bill. There is no doubt that we shall return to the subject of the public benefit requirement in Committee. I look forward to debating it in greater detail then. The noble Lord, Lord Phillips, asked whether we could say something about the advancement of human rights. Its inclusion in the list of headings in the Bill reflects its importance as a form of charitable endeavour in the modern world. There is a range of purposes and activities that can be pursued by charities for the advancement of human rights both at home and abroad. They include campaigning for states to sign, ratify and comply with international and regional human rights codes, the monitoring of abuses of human rights and obtaining redress for victims, research and public education on human rights issues, and promoting support and respect for human rights among individuals and corporations. Those and other legitimate human rights activities are more fully described in the Charity Commission’s recent publication, Promotion of Human Rights. The Government greatly welcome the steps that the commission has taken through that publication to clarify the considerable scope that charities can have for effective human rights activity. The noble Lords, Lord Phillips and Lord Swinfen, referred to the costs of appeal to the tribunal, and how that could perhaps be a barrier to those who believe it is useful and valuable as a means of seeking redress. The tribunal has been designed so that users will be able to represent themselves. We do not think it necessary to extend Community Legal Service funding to them. However, in a few cases users might not be able to represent themselves, such as if there are difficulties with language. In the interests of justice, public funding can be granted exceptionally for representation under the Access to Justice Act 1999. Additionally, where the case is legally complex but the user cannot afford legal representation, the Attorney-General has the discretion to become a party to the proceedings. For those reasons, there is no strong case for establishing a separate suitors’ fund, although I listened with interest to the contributions made in arguing that case. I turn to the issue raised by the right reverend Prelate the Bishop of Southwell and a number of noble Lords concerning the burden of regulation on smaller charities. I am grateful to him for his comments, which the Government largely endorse. The Bill will require a review within five years of its effect. That review will assess the general burden of regulation and the extent to which the Bill has had an impact on it—for the better, we trust. The Better Regulation Task Force is also planning a study into some aspects of the impact of regulation on charities and other voluntary organisations, and we would be wise to await the outcome of that research and investigation. The noble Baroness, Lady Pitkeathley, raised the issue of the Bill perhaps not doing enough to promote philanthropy. The answer to that is that the Bill gives the Charity Commission a clear duty in carrying out its regulatory function to act in a way that encourages, first, all forms of charitable giving and, secondly, voluntary participation in charitable work. That goes a long way to address the issue that she raises. It should not be left entirely to legislation to achieve the objective; it is clearly important for all those involved in charitable organisations to care to promote charitable giving and commitment. The noble Lord, Lord Sainsbury of Preston Candover, asked whether the substantial current statement of recommended practice was compatible with the encouragement of charitable giving. The SORP regulations of 2005 were established after considerable consultation in the accountancy and charitable sectors. SORP contains sufficient flexibility to accommodate different types and sizes of charity. The matter is for the commission. Any future review of SORP will undoubtedly take into consideration how it works and its potential impacts over time. That process may be the best way for the issue to be dealt with. The noble Baroness, Lady McIntosh, raised the resourcing and efficiency of the Charity Commission, as did other noble Lords. The Joint Committee recommended that professional advice be sought to review the ability of the commission to meet its enhanced responsibilities under the Bill. In addressing that recommendation, the Charity Commission recently carried out a wide-reaching strategic review with external advice and input, to position and equip itself to fulfil its future role. That review will conclude in July and report to the Chief Secretary to the Treasury. The noble and gallant Lord, Lord Craig of Radley, made a trenchant and powerful plea for the charitable status of the Armed Forces charities to be given fairer consideration. What I can best say is that the Bill does not in any way jeopardise or affect the continuing charitable status of SNPFs; it is as simple as that. That is specifically continued in the Charity Commission’s commentary on the Bill. We value greatly the work of the SNPFs and understand the importance with which they need and deserve to be treated. They are a group of excepted charities—excepted by order or regulation from the general requirement to register with and submit accounts to the commission. In other respects, they are fully subject to the commission’s regulatory jurisdiction and powers of investigation. The Bill will require excepted charities, including SNPFs, with an annual income of £100,000 to register with the commission. We estimate that between 1,000 and 2,000 of the 15,000 or more SNPFs will exceed that threshold. Below that, excepted charities will remain as they are for the time being, and the £100,000 threshold can be lowered by order. We have stated our intention that, over time, the threshold will be lowered. That will eventually result in the phasing out of the system of exceptions from registration, in the interests of the accountability of those charities. The Bill will not add significantly to the burden of regulation on the charitable sector and the SNPFs in particular. The noble Lord, Lord Borrie, raised an important issue relating to the burden of regulation on universities. I am happy to reaffirm the assurances that I gave in Grand Committee in the previous Session that the Government intend to keep any additional burdens to universities as a result of the Bill to an absolute minimum, recognising the existing regulatory burdens that universities face. The basic principles of charity law already apply to universities as exempt charities, and we intend that the monitoring process should adopt the lightest possible touch. We will of course monitor the arrangements and intervene if any significant or unnecessary burdens are introduced. We have now spent three and a half hours looking at issues raised by the Bill. I have a whole sheaf of notes left to which I could give much more voice. I fully recognise that they are on important issues, covering the likes of trustee indemnity insurance—I have a long response on that. I have a longish response to one of the points made by the noble Lord, Lord Swinfen, about the Charity Commission. However, I would prefer to deal with some of those issues by correspondence, with points that I may have missed inadvertently in trying to respond to issues raised during the debate. I thank all noble Lords who have contributed. It has been a useful start to the reconsideration of a Bill that, as a number of noble Lords have observed, is in pretty good health. I hope that we can continue our work of refinement and improvement. No doubt we will have some spirited discussions and debates in Committee, where many of the important issues raised this afternoon will be given further consideration. I thank all those who have expressed their thanks to those on our Front Bench in considering the Bill and its contents as we have. I congratulate the noble Lord, Lord Smith, on his contribution; he told me outside the Chamber that he had been press-ganged into it, but I do not believe that for a moment. I am sure that he will make some helpful and telling contributions during our further discussions. I also thank those who have made supportive comments to our team of officials. During the earlier consideration of the Bill, that team worked extremely hard to answer the many questions and points raised, and to give the noble Baroness, Lady Scotland, and I active and helpful support. On Question, Bill read a second time, and committed to a Committee of the Whole House.