Charities Bill [HL]

I have listened to what the noble Lord, Lord Phillips, has said. I shall start by congratulating him and saying that this is an imaginative twist to the legislation. However, I worry that the CIO provision, which I think is a good one, could advance with unnecessary added complexity if it took off in this particular form. The charitable incorporated organisation provisions have essentially been drafted on the understanding that, under the law, any incorporated body including a CIO must legally be composed of one or more members. That is the basis on which it has been constructed. I am not a charity lawyer, but that seems to me to be an initially sound foundation. The Bill specifically confers on the members of a CIO functions relating to constitutional amendment and corporate reconstruction. The constitutions of many CIOs will confer further functions on the members, such as the appointment of the charity trustees. All that is very much in line with other models of corporate organisation. But concerns have been expressed in the case of CIOs whose charity trustees will be the same people as its members that it is unnecessarily burdensome to make them discharge certain functions in the capacity of members and certain functions in the capacity of charity trustees. It is worth noting that the Bill specifically recognises the possibility of CIO members and trustees being the same people. I can see the effect of the amendment, which seeks to allow all functions associated with the operation of a member-less CIO to be discharged by the charity trustees in that capacity. It is fair to say that careful consideration was given prior to the introduction of the Bill to ways in which these concerns might be addressed without departing from basic legal concepts relating to incorporation. We think that the burden in cases where the same people are to discharge separate functions wearing separate hats has been overstated. The concerns that have been expressed can be satisfactory addressed by the Charity Commission through the publication of model governing documents for CIOs under the powers that the Bill provides and through the issue of relevant and appropriate guidance. In our view this approach is preferable to the complication of the Bill by the addition of provisions designed specifically to apply only when the members of the CIO are the same people as the charity trustees. I hope that I have made clear our position on this. I see what the noble Lords says, but, as he has acknowledged, we would have substantially to rewrite large parts of the Bill to achieve the result he is after. It would make it unduly complicated. It is fine to say that there is time on this, but it is the complexity as much as anything else that does not achieve the outcome that the noble Lord seeks. For those reasons, we must stand firm and reject the amendment.