Charities Bill [HL]

had given notice of his intention to move Amendment No. 59:"Page 37, line 31, after ““charity”” insert ““or charities””" The noble Lord said: Amendments Nos. 59 and 60 concern Clause 38 and the power to transfer the property of unincorporated charities. The clause enables an unincorporated charity with a gross income below £10,000 to transfer its capital to another charity when winding up. In addition, under Clause 38, new Section 74(4)(b) stipulates that trustees must be satisfied,"““that the purposes of any charity to which property is to be transferred under the resolution are wide enough to encompass the purposes of the transferor charity””." The amendment proposes a provision to amend what we consider to be an oversight in the drafting of this part of the Bill that the Charity Law Association has brought to our attention. It relates to a situation where a small charity may seek to wind itself up by transferring its capital to another charity. As drafted, the clause would preclude a situation where a charity which has two distinct objects wishes to divide its assets and transfer them to two charities, each of which has objects encompassing one of the transferor charity’s objects, but neither has one that covers both. Our amendment intends to permit such dual transfers. I referred to that during the first Committee stage:"““It is unnecessarily restrictive to say that when you wind up you must send all those assets to a charity, as opposed to charities, as that might much more easily reflect the original objectives of the charity, rather than requiring a single transferee on all occasions””.—[Official Report, 16/3/05; col. GC 526.]" In fact, in accordance with subsection (4)(a), it might often be expedient in the interests of furthering the purposes for which the property is held by the transferor charity if there were to be a number of transferees. The noble Lord, Lord Bassam, explained his aversion to the amendment in the first Committee stage:"““What we are keen to avoid here is creating a situation in which rogue trustees find a way round in transferring from a charity that they want to close down and putting assets into a number of charities, so that one of those charities gets the majority of the benefit but does not conform with the spirit of the original charity””.—[Official Report, 16/3/05; col. GC 526.]" It must be pointed out that there is as much obligation on the transferee charity to conform to the spirit of the transferor charity whether the transferee is one charity, as presently provided in the Bill, or several. The amendment would not change the obligation on the recipient charity to preserve the spirit of the original charity. We could take the example of a charity whose purposes were the relief of poverty. If the division of assets is calculated with reference to the width of the transferee’s purposes, I do not see how transferring assets to a number of charities would prevent the trustees from maintaining the spirit of the original charity. A better or perhaps a more realistic example was helpfully given to us by Farrer & Co. It will also help to demonstrate another problem with the Bill that the amendment would fix. A small charity wishing to make use of the transfer provisions may well, under the current drafting, be unable to do so, as it may struggle to find a single charity whose objects encompass all of its own objects. Although charities with such simple objects as the relief of poverty exist—