It is a privilege to respond to the Bill on Second Reading as shadow Civil Society Minister. I thank the Minister and his colleagues for bringing the Bill before us, and for the open and co-operative way in which they have sought to engage with us. It is much appreciated. I thank all the civil servants involved in drafting the Bill, and all the charities and organisations that have contributed to its development and to our understanding. I also thank noble Lords, who used their customary wisdom and experience to refine and improve the Bill in its passage through the other place.
This is a good and important Bill, and we on the Labour Benches welcome it. There is, of course, some room for improvement, and I will come on to that in my speech, but its objectives are to be welcomed. We all
know the vital role that charities play in building a strong and flourishing civic society. Thousands of people around the country give up their time every day to work as trustees and volunteers. Thousands more depend on the vital services they provide. As the Minister said, charities change and save lives. They support the poorest and the most vulnerable. They pick up the pieces of social and economic failures. They heal, they tend the sick, they bring dignity in old age and they give children the best start in life. We owe it to all of them to provide a secure and robust regulatory environment that inspires confidence and allows the sector to flourish.
The sector has had a difficult year. The regulation of the sector has come under increasing scrutiny and we have seen high-profile cases that have been deeply concerning. We have seen poor governance, financial mismanagement and, as the Minister set out, concerning fundraising methods. These cases are extremely rare, but they are deeply disappointing to the rest of the charitable sector. It is important that we support and encourage confidence in the wider sector by clamping down on any abuse. That is why we welcome the Bill.
It has been good to see the sector itself step up to the plate to tackle so many of these concerns. It is vital that we play our part in supporting the sector in that process by giving it the legislative and regulatory environment it needs. It is also vital that we get the right balance: a strong and sound regulatory environment that ensures trust but allows charities the freedom to be innovative, enterprising and, crucially, effective in delivering their social aims and objectives.
We welcome the core aims of the Bill. We support providing stronger protection for charities in England and Wales from individuals who are unfit to be charity trustees. That is vital to ensure good governance and prevent abuse. We support the measures to equip the Charity Commission with new and strengthened powers to tackle abuse more effectively and efficiently. To ensure confidence in the sector, it needs to be able to respond quickly and decisively to any concerns raised. Further clarifications are required, however, and we will work with the Minister to resolve them in Committee.
I want to put on record at this point my pleasure in hearing the Minister say the Government will use the Committee stage to look again at fundraising: at whether self-regulation is sufficient and what steps we can take if it fails. We look forward to working with him on that.
We welcome the aim to give charities a new power to make social investments; some are already doing that, but it is important we give charities the reassurance to enable them to do so. We know that one in three British consumers will pay more for products with a positive social or environmental outcome. It is important that we enable the charitable sector to encourage that.
There are some areas, however, where we believe the Bill can be improved. We will look to work with the Government during the progress of the Bill in Committee to do so. We will be seeking to discuss the following points.
First, on the freedom to speak and engage in political discourse, we continue to oppose the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014. We intend to use the passage
of the Bill to highlight and defend the right of charities by law to campaign and speak out on issues in line with their objectives. So often, it is charities that end up picking up the pieces of our policy failures. It is vital that we give them the right to campaign on their issues, and to challenge and hold us to account. That is a key part of a strong, healthy democratic and civic society.
Secondly, on clause 9 and the disposal of assets, the clause sets out that
“The Charity Commission shall ensure that independent charities are not compelled to use or dispose of their assets in a way which is inconsistent with their charitable purposes.”
We will continue to defend clause 9, so as to give housing associations the statutory backing to ensure they can make their decisions in the best interests of their tenants, and not be bullied by a Government determined to sell off and run down affordable housing. We think it is absolutely right that charities have the freedom to dispose of their assets in the way that they see fit.
Thirdly, on the protection of children and vulnerable adults, the Bill provides an opportunity to better protect children and vulnerable people. We are grateful that the Government accepted proposals in the other place to include people on the sex offenders register as among those who will be debarred from being trustees, but we believe there are other measures we can look at to strengthen that area. We will bring them forward in Committee.
Finally, on clarifying some of the powers of the Charity Commission, the Bill seeks to strengthen the powers of the Charity Commission. We believe there should be a strong, well supported regulator of charities that acts fairly and has the appropriate powers. Ultimately, the regulator must preserve public trust and confidence in charities. However, some provisions in the Bill could threaten charities’ independence. For example, there are no objections in principle to giving the Charity Commission the power to give warnings to a charity, but the current drafting raises some concerns within the sector.
For example, the commission can issue a warning if it thinks there has been a breach of duty or trust or other misconduct or mismanagement. It is possible that the commission could issue a warning about an issue of relatively low concern. Also, a disagreement between the trustees and the commission could arise about whether the warning was justified. It is therefore important to attach safeguards to the issuing of a warning, and failure to comply with it should not in itself have significant consequences that could be disastrous for charities. I hope that we can continue to discuss the matter further in Committee. In addition, the commission should give adequate notice of its intention to issue a statutory warning.
These are issues that should be discussed in Committee because clearer guidelines should exist on the number of days and other protective remedial powers. Given the implications a warning would have for the charity in question, we should also consider a right of appeal to the charity tribunal. I look forward to working with Ministers on those issues as we go through Committee.
In summary, we believe all these areas can be discussed and looked at in more detail as we take the Bill forward in Committee. This is an important Bill. It has some room for improvement, but offers a great deal to build
trust and confidence in the charitable sector, which is why the Opposition will support it. I look forward to working with Ministers in Committee.
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