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Session 2005 - 06 Publications on the internet Standing Committee Debates Charities Bill [Lords] |
Charities Bill [Lords] |
The Committee consisted of the following Members:Mrs E. Commander, Committee
Clerk † attended the
Committee Standing Committee AThursday 6 July 2006(Afternoon)[Mr. Roger Gale in the Chair]Charities Bill [Lords]Clause 7The
Commission’s objectives, general functions and
duties Amendment
proposed [this day]: No. 67, in
clause 7, page 7, line 11, at
end insert— ‘1A. So far as
is reasonably practicable the Commission must, in performing its
functions, act in a way which maximises the benefit to the users and
beneficiaries of charities’ services and
activities.’.—[Martin.
Horwood.] 1
pm Question
again proposed, That the amendment be
made.
The
Chairman: I remind the Committee that with this we are
discussing the following amendments: No. 9, in
clause 7, page 7, line 25, at
end insert ‘and act in a fair and reasonable
manner,’. No.
10, in
clause 7, page 7, line 31, at
end insert— ‘(7) So far as
is reasonably practicable the Commission must, in performing its
functions, distinguish
between— (a) its
regulatory role, (b) its
advisory role, and (c) its
investigatory and remedial
role.’. No.
76, in
clause 7, page 7, line 31, at
end insert— ‘7.
The Commission must, in appropriate cases, have regard to the
desirability of providing extra support, advice, guidance and
encouragement to new and developing charities from a diverse range of
communities.’. No.
103, in
clause 7, page 7, line 31, at
end insert— ‘7. In
performing its regulatory functions the Commission must act fairly and
reasonably, and with regard to the interests, of charity
beneficiaries.’. Mr.
Andrew Turner (Isle of Wight) (Con): May I say how
pleasant it is to see you once again in the Chair, Mr. Gale? The sun is
coming out. I do not think that it will be as hot as it was on Tuesday,
and I am advised that we expect thunder later—outside, that
is. When we rose for
lunch, not that I had any, I was in the middle of a quotation. Lord
Bassam of Brighton said that the
commission “would not
change its behaviour as a result of the addition of these
words”. It is only proper
that I should conclude the quotation, which is
“and so the amendment would have no
practical effect.”—[Official Report, House of
Lords, 12 October 2005; Vol. 674,c. 335.]
I was speaking to amendment No.
9, which would place an obligation on the commission to act in a fair
and reasonable manner. The amendment has some history. Paragraph 161 of
the Joint Committee report on the Bill
said: “Under
current charities legislation, there is no specific objective set out
for the Charity Commission to act proportionately and reasonably, but
such a requirement is placed on all public bodies by common
law.” Ministers rested
their case in the House of Lords on that responsibility. The National
Council for Voluntary Organisations and other organisations gave
evidence that they were not satisfied with that, and the right hon.
Member for Darlington (Mr. Milburn) said effectively on Second Reading
that he was not satisfied with it. He said
that “‘proportionate’
appears in the measure. However, ‘fairly’ and
‘reasonably’ do not.”
He thought that one out of three
was not bad; I think that he was being generous. However, I suppose
that getting one out of three votes in a general election that one wins
is not bad. He went on to say
that “given the genuine
concerns that were expressed in another place and the continuing need
to reassure especially the smaller charities that they will not face
some sort of Big Brother Charity Commission with extensive new powers
at its disposal, I hope that my right hon. and hon. Friends might be
able to go a little further.” —[Official Report,
26 June 2006; Vol. 448, c.
49.] With that in mind,
I tabled amendment No. 9. I thought that it would be right to give the
Minister the opportunity to satisfy his right hon. Friend by accepting
the
amendment.
Other
organisations, such as the Association for Charities, have emphasised
small charities’ need for reassurance because of the additional
powers and responsibilities that the Bill will give the commission.
They point to the strength of feeling expressed across the political
spectrum in another place for the inclusion of such a measure as mine,
and they think that it is appropriate to introduce
one. I shall refer
directly to what happened in another place. Lord Phillips of Sudbury
said that it was
“probably the most important
recommendation which the Government declined to
accept.”—[Official Report, House of Lords, 23
February 2005; Vol. 669, c.
298.] My noble Friend
Lord Swinfen and Lady Howe of Idlicote queried the provision’s
omission of the words “fairly” and
“reasonably”. The Minister, Lord Bassam,
said: “We are
clear that this qualifier means that the commission must have regard to
these principles”. He
assured Lord Phillips that the words “fairly” and
“reasonably” “add
nothing to the legal duties which the commission is already under. We
have no doubt that the commission is under a duty in administrative law
to use its powers reasonably.”—[Official Report, House
of Lords, 12 October 2005; Vol. 674, c. 334-5.]
However, that was not the view of the High Court judge in the Little
Gidding case to which the hon. Member for Cheltenham (Martin Horwood)
referred, because the judge said that he would not take into account
whether the commission had acted fairly and reasonably. The Minister
shakes his head. Perhaps he has further information about the
decision-making process in the Little Gidding case.
It is the contention of the
Association for Charities, with which I see no reason to disagree, that
had the Charities Act 1993, or indeed any other legislation, placed
that duty on the commission, the judge would have been obliged to take
it into account. That is why I move the amendment.
Amendment No. 10 covers a
different area. The commission, in performing its function, should
distinguish between its regulatory role, advisory role and
investigatory and remedial role. The latter is sometimes called its
policing role—indeed, its policing and judge and jury role. By
proposing the amendment, I merely follow the precedent set by the Lord
Chancellor in the reforms that he has initiated in another place.
Clearly, there is, or there has been, a great deal of confusion about
the activities of the commission in those different areas. The strategy
unit said that “the
blurring of boundaries between the Commission’s advisory and
regulatory roles continues to cause confusion among charities and other
key stakeholders.” It
went on to
say: “Nor does
the Commission have the resources to sustain an advisory capacity as
extensive as the statutory phrasing...suggests. It should retain
an advisory role, but this should be more precisely
defined.”
Clause 20 of the draft Bill went
in exactly the opposite direction. It allowed the commission to give
advice not only to trustees but to any employees of a charity, and even
unsolicited. Like any good quango, that is what it is doing. However,
the consequence, according to a large number
of— Peter
Bottomley (Worthing, West) (Con): For clarity, are we
referring to clause 20 of the present Bill?
Mr.
Turner: No, we are referring to clause 20 of the draft
Bill, and I am sorry to say that I do not know which clause it is in
the current Bill. I do not suppose that it is far from clause 20,
however. The Joint
Committee wrote:
“Charities—particularly
small charities—were unclear whether they were being advised to
do something by the Commission or directed. The result was that, to be
on the safe side, they treated advice as if it was direction. This was
significantly eroding the autonomy of the sector and increasing the
degree of regulation.” The
NCVO, quoted in the Joint Committee’s report, weighed in in
support, saying that “we
would not want to see spontaneous, citizen-led activity stifled by a
regulatory regime which actually, when it gave advice, implied that you
could or could not do certain things which had the force of statute
when it did not”. The
Association of Charitable Foundations is also quoted. It feared that
the powers in the Bill might
“end up blurring the boundaries
between the Charity Commission’s advisory and regulatory roles
even more than to date”.
There was then a discussion about
whether the responsibilities should be separated either by taking the
advisory role outside the commission, or by retaining it within the
commission and separated by a Chinese wall. After some considerable
intellectual and consultative argy-bargy, which is covered in
paragraphs 201 to 205 of the report, the Joint Committee, supported by
the Select Committee on Public Accounts, which found that the
commission’s advice and support is generally well regarded,
concluded that “the
Charity Commission should take steps to differentiate between its
advisory and regulatory functions and make clear in all its
communications the distinction between advice and
instructions.” The
Government accepted the conclusion. It was their reason for rejecting
this and similar amendments in another place. Baroness Howe nonetheless
felt: “We can
see a more powerful Charity Commission emerging... To have the
same body regulating with those very strong powers and advising on what
must be done is dangerous.”—[Official Report, House of
Lords, 10 February 2005; Vol. 669, c.
GC172.] But Baroness Scotland
said that “the Government
and the Charity Commission wholeheartedly agree with the
principles”— and— “believe
that it is more appropriate to leave its implementation to management
action”.—[Official Report, House of Lords, 28 June
2005; Vol. 673, c. 192.] That
course of action seems perfectly sensible. The problem is that it has
not happened; the Baroness made her statement last year, yet the letter
to me about the performance of the Charity Commission in respect of
that small charity after a visit in August last year, after the
Baroness made that commitment, shows exactly that confusion between
regulation and policing. I
quote: “The
trustees of the charity were advised that they must review their
procedure for the award of such gifts, to ensure that they fulfil a
charitable purpose and in particular to consider introducing standard
criteria...The advice which we gave was that, without making an
assessment of need, they could not ensure that the giving of gifts was
achieving the object of the
charity”. That is exactly
the confusing message that my amendment seeks to clarify. I thought
that the promise was to make things clear; having
“advice”, “ensure”, “must”
and so on in the same sentence does not do so. If it really was advice,
the trustees would have been told that they “should”
review their procedure for the award of such gifts. It is simple to get
the issue right, but the commission did not do so, even after all those
assurances, promises and recommendations.
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