My Lords, I thank all those who have just spoken and those who said some very kind words about me. I would like to put on record my thanks, and those of the Government, for the significant contribution to the fundraising review that my noble friend Lord Leigh of Hurley, the noble Baroness, Lady Pitkeathley, and the noble Lord, Lord Wallace
of Saltaire, have made, as well as our thanks to Sir Stuart Etherington himself. They have given up their time and expertise over the summer to help develop a new approach to tackling the problems of fundraising that have been exposed in the media in recent months.
I fully accept that, as a number of noble Lords have said, the timing of the debate today is somewhat unfortunate, given that Sir Stuart is not due to report until later this month. However, as I am sure your Lordships understand, this was agreed through the usual channels and needs to fit in with the competing demands of other parliamentary business.
My honourable friend in the other place, the Minister for Civil Society, Rob Wilson, has engaged over the summer with the noble Baroness, Baroness Hayter, and other noble Lords who have been supporting Sir Stuart Etherington’s review. He has committed to continue that engagement when he pilots the Bill through the other place. I am very keen that your Lordships continue to debate and discuss these issues while the Bill is in the other place. My door is open to anyone who has been unable to express views as the Bill progressed up to this point or who has thoughts on the Etherington review’s findings when they are published. We will also, of course, have an opportunity for further debate in this House on any amendments that may be made to the Bill. I would entirely support such measures, as I know that this House has an immense amount of expertise on the matters that we are discussing.
Before responding to the points raised in this afternoon’s debate, and looking at the specifics of the amendment, it is worth reminding ourselves, as a number of speakers have, that the vast majority of charity fundraising is undertaken responsibly. The noble Baronesses, Lady Barker and Lady Young, made that point, and I entirely agree. It is the actions of a minority of charities, albeit high-profile ones, and in relation to particular fundraising methods, that have damaged public trust and confidence. Furthermore, charities need to ask the public for donations in order to carry out their vital work. In addressing the poor fundraising practices of the few, it is important to keep those points in mind and not to overburden the majority of charities, particularly small charities, whose fundraising activities are not at fault. As I said before while debating other points relevant to the Bill, it is absolutely critical that we get this balance right and keep a sense of proportion in what we may do.
One point on which I think there is now broad agreement is that the current system is too complex and has failed to deliver the standards that the public and Parliament expect. I owe a nod to my noble friend Lord Hodgson of Astley Abbotts, who got this spot on in his 2012 charity law review when he said:
“Potential donors are currently faced with a confused landscape, with unnecessary duplication or division of functions … To date the sector has tended to dance around these issues”.
It would appear that we are only now catching up with him. The current system has to change if we are to meet one of the overriding objectives of the Bill: to maintain and strengthen public trust and confidence
in charities. The exam question posed to Sir Stuart Etherington and his review earlier this summer was: what should those changes be?
We have acted with the amendments to the Bill on Report, which will require charity trustees to take proper responsibility for their charity’s fundraising and, in larger charities, to be more transparent and accountable about their fundraising activities in their annual reports. These changes will help, but Sir Stuart’s review will provide the blueprint for the future of self-regulation.
I am sorry to disappoint noble Lords, but I do not want to pre-empt the outcome of Sir Stuart’s fundraising review—and if the noble Baroness thinks that it is going to be published at the Conservative Party conference, I will make sure that I accompany her there. I know that several of the largest charities have already committed to making changes and supporting the recommendations of the fundraising review. As the noble Baroness, Lady Pitkeathley, said, this change of heart is about time, too. It is to be welcomed, as the whole charity fundraising sector will need to get behind the recommendations of the review and swiftly implement the necessary changes. As I said on Report, the response of sector leaders to Sir Stuart’s recommendations will in part answer the question of whether fundraisers and the charity trustees who oversee them accept the need for and fully embrace change.
We take the view that charities should have the opportunity to redeem themselves and that they are capable of putting their own house in order and making self-regulation work so as to restore and protect the public trust and confidence on which they depend, as well as to show, as the noble Lord, Lord Wallace, said, that they are fulfilling the responsibilities that charitable status confers.
Some have suggested that we should legislate to make charities submit to self-regulation. That would effectively be statutory regulation, not self-regulation. We will need to see what Sir Stuart recommends, but we do not want to legislate for a new bureaucracy. In particular, we do not want to entangle with red tape the vast majority of small charities which have not had anything to do with the unacceptable practices reported in the media. Our preference therefore remains self-regulation, not a government-regulated solution.
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This brings me to Amendment 1, about which let me say this in the spirit, I hope, of constructive criticism. The first part of the amendment would mandate membership of the FRSB for charities raising over £1 million per year and would require fundraising charities to comply with standards set by the code of practice of the Institute of Fundraising—a body other than Parliament or the Minister. There would, therefore, be a real risk that we would have a delegation of power without proper accountability. The second part of the amendment would require the Minister to exercise the power to make regulations in connection with regulating charity fundraising. These would regulate standards that fundraisers would have to meet. It is unclear how this would work alongside the sector- owned Code of Fundraising Practice. If these powers
were exercised they would basically mean statutory regulation, which as I have said is not the Government’s preference.
As I said earlier, my honourable friend the Minister for Civil Society has committed to engage with noble Lords once we have seen Sir Stuart Etherington’s review and as the Bill proceeds through the other place. I, too, welcome the recent letter from the 17 charity executives to the Sunday Times. It is a good sign of progress, but we will need charities’ actions to live up to their words in the months ahead, as they strengthen self-regulation in a way that the public and Parliament expect. I hope that in light of the debate this afternoon and the commitment for continued engagement, the noble Baroness will feel able to withdraw her amendment.
Before I sit down, I turn briefly to the point raised by my noble friend Lord Moynihan about the issues raised on Report regarding the charitable status of independent schools. I, too, thank the Charity Commission and the independent schools which have spent a lot of time working together during the summer to take forward the commitments from Report. I met them both last week and I know that they have been engaging with noble Lords on the work they are doing to promote sports, music and arts partnerships between the independent and state sectors, as my noble friend Lord Lexden said, and that they are committed to continuing that engagement.
I can tell the House that next month the Charity Commission will publish revised guidance which sets out illustrative examples of the ways in which an independent charitable school can carry out its purposes for the public benefit and a revised sample trustees’ annual report for a fee-charging charitable independent school. The Independent Schools Council has committed to raising awareness among its members of this new guidance and examples. I repeat that I hope that noble Lords with an interest will continue to engage with the Charity Commission and the ISC as they continue this work over the coming months and years, especially on the other two items that we also agreed on Report, which I know are proceeding to be dealt with.