Mr.
Turner: I am grateful to the Minister for what he has
said. I take it that failure to comply with the obligations will be
“tribunalisable.” There must be a clear understanding
that advice is advice and that failure to take advice is not in itself
an offence. The consequence of failing to take advice may be an offence
and the consequence of failure to observe guidance may be an
offence—I use the word in a broad sense—but just because
someone does not want to do what the Charity Commission advises is not
a reason for it to come down with a heavy
hand.
Edward
Miliband: I share the hon. Gentleman’s sentiments;
he used the phrase “heavy hand”, and I was about to use
the same phrase. There should be no excuse or alibi for heavy-handed
behaviour towards those who do not follow the commission’s
advice; I agree with him on that. Those are presumably some of the
steps that the Joint Committee encouraged the Charity Commission to
take, and which it seems happy to
take. 1.30
pm We recognise the
sentiment behind amendmentNo. 76, but I found the remarks made
by the hon. Member for Cheltenham, in defending his amendment, slightly
odd. If I may say so, he is confusing the Charity Commission’s
role as regulator with some other role that it might play. He cited the
example of organisations that are dominated by those in twin sets and
pearls. I am sure that we can think of some political parties that,
certainly until recently, had that reputation—indeed, in some of
our minds, they still do. None of us would propose that the Electoral
Commission should have responsibility for intervening in the activities
of such an organisation and ensuring that the twin set and pearls
brigade opened itself up to much greater diversity; that is a matter
for the organisation. I make a similar point in relation to the hon.
Gentleman’s speech, in which he identified precisely that sort
of characteristic in certain
charities. Having said
that, the substance of the hon. Gentleman’s amendment is
actually slightly different to what he said in his speech. He talked
about new and
developing charities in a diverse range of communities. We are
sympathetic to that, but we do not think that that needs to be in the
Bill. Let me say something briefly about what the commission is doing
in that respect. It has developed contacts with a broad range of
communities, especially those brought together by a shared ethnic
background or faith. It has a network of 65 organisations from across
the sector, created with targeted recruitment in Asian, Afro-Caribbean,
Jewish and Muslim communities, which reflects the sector’s
diversity, income and location. The commission provides advice in other
languages and provides a translation service for customers. Also, it is
listening, through a particular project, to faith-based charities and
has hosted seminars in Hindu and Muslim
communities. It is also
worth saying that the Race Relations (Amendment) Act 2000 obliges
public authorities such as the commission to promote racial equality in
the way that they act towards their staff, develop policies and improve
their services. The commission must produce a race equality scheme,
setting out its action plans with meaningful and measurable targets. It
must produce a similar scheme for disability and, as set out in the
Equality Act 2006, gender equality. Whatever the Charity Bill says, as
a public authority, the commission will have responsibilities imposed
on it through other pieces of equality
legislation.
Martin
Horwood: I am somewhat reassured by what the Minister
says, and especially by his reference to other legislation, but he is
wrong to say that the amendment pushes the commission beyond its remit.
Its remit is not the same as that of the Electoral Commission, which is
a purely regulatory body. Among the general functions of the
commission, No. 6 is “Giving information or advice”. The
first of its objectives is the public confidence objective, which
is “to increase public
trust and
confidence”. That clearly
takes the commission into the area of giving encouragement and advice,
and trying to develop the sector beyond providing simple
regulation—a point eloquently made by the hon. Member for Isle
of Wight.
Edward
Miliband: That is why I distinguish between the hon.
Gentleman’s speech supporting his amendment and his amendment
itself. I actually agree with him about his amendment, but in his
speech, he somehow gave the impression that it was the Charity
Commission’s job to ensure diversity within particular
organisations and to break up the twin set and pearls brigade; I wanted
to correct that, because I just do not think that that is the
commission’s job. It is true that it has functions that go
beyond those of the Electoral Commission. As I said, it is fulfilling
its functions well in relation to diversity—indeed, it is under
an obligation to do so—but it is not the commission’s job
to tamper with the existing structure of organisations. The hon.
Gentleman’s amendment does not suggest that it is, but I
thought—I may be wrong—that he implied that in his
speech. On that basis, I hope that the hon. Gentleman will withdraw his
amendment.
Peter
Bottomley: The Minister has not explained why he is
willing to have innovation written into the Bill,
but not what the hon. Member for Cheltenham suggested. Perhaps we will
leave it on one side for those people who want to read the words. Does
the Minister have a note, or will he say a word about my last point?
Edward
Miliband: I beg your pardon, Mr. Gale. I should have
responded to the hon. Gentleman’s point. It is an important
point for the Committee to register.
The process of becoming a
charity is a one-way street. I would not say that there is no going
back, but it is hard to go back. We are dealing with two situations.
First, a charity or an organisation is institutionally incapable for
some reason or other of fulfilling the test of a charity. Secondly, it
does not for whatever reason comply with the requirements of a charity.
In the second case, it is the commission’s job to work with the
charity to ensure that it can return to meeting the tests of charitable
status. When a
charitable trust ceases to be charitable and it cannot institutionally
become charitable, it is then for the commission to alter the
trust’s purposes by scheme in accordance with the cy-près rule,
which we will come to, so that the new purposes on which the assets are
held continue to be charitable. Again, the issue is about a return to
charitable status, but it may require more extreme or draconian
action. As I
understand the situation from talking to the Charity Commission, there
are very few if any recent examples of cases in which it has not been
possible to conduct that process co-operatively. We should not give the
impression that the commission seizes assets in dawn raids; the process
is undertaken co-operatively. Sometimes, the situation will simply be
that the original purposes for which the charity was set up have been
fulfilled, but assets remain and they need to be transferred to another
purpose. The commission will work with the trustees to do so. I hope
that answers the hon. Gentleman’s
point.
Peter
Bottomley: We should leave it like that for the time
being. We can accept that when it is possible to return a charity to
compliance, and when a charity’s purpose can be modified so that
the assets can be used for something charitable, there is no problem.
The problem occurs with a change, perhaps following a change in the law
as we propose, when purposes that are presumed to be charitable now are
no longer charitable, but people want to continue, and assets have been
given to them for the original charitable purpose. That worries me, and
if the Minister does not have a straightforward answer, he might wish
to return to the issue on Report.
Edward
Miliband: I am not convinced that there is a
straightforward answer. However, with respect, I should like to correct
the hon. Gentleman. All purposes that are charitable now will remain so
after the passage of the Bill. That is an important part of the Bill.
The 12 purposes set out in clause 2 and the 13th catch-all category
cover all existing charitable purposes. The scenario he envisages will
not arise.
Helen
Goodman (Bishop Auckland) (Lab): I had thought that this
issue would come up later when we considered the clauses on endowment
funds and
changing the purposes for which property had originally been given.
However, the type of incident described by the hon. Member for
Worthing, West might be understood more clearly with the following
example. I remember an occasion when funds were given for the sons of
cobblers in Leicestershire. Particular monies were given for that
purpose, but now of course, there are not many sons of cobblers in
Leicestershire and they are no more needy than any other group in the
community. That is the kind of problem to which the hon. Gentleman
refers.
Edward
Miliband: I am grateful to my hon. Friend—she
raises an important point. I gather that there has been an issue on
almshouses, which were originally set up to house destitute people. In
certain cases the Charity Commission has worked with almshouses in
order to vary their purposes through cy-près, so that they remain
charitable but can also use their assets to the full. I suspect that
the same practice would arise in relation to the cobblers. We shall
reach the clauses on cy-près later, if we ever make progress. They
allow charities to vary their purposes and they are directly about this
issue.
Mr.
Turner: It might be more appropriate to address the issue
that I wish to mention when we come to the cy-près provisions, but the
Minister may be able to obtain some information in advance. I
understand that learning the use of weaponry used to be a charitable
purpose, because it was felt to be beneficial to the defence of the
country, which was itself charitable. There were charitable shooting
clubs. Will the Minister tell us what happened to the assets of such
shooting clubs when the commission decided that that activity was no
longer
charitable?
The
Chairman: Order. I am going to make two points which I
hope I shall not have to make again. The first is that interventions
are becoming longer and longer and longer. There is a case for a
slightly longer intervention if it saves an even longer speech later,
but interventions should be just that. Secondly, will hon. Members
please stick to the amendments under
discussion.
Edward
Miliband: Thank you, Mr. Gale. What were the amendments?
The answer to the hon. Gentleman’s question was that it was
concluded that there had been a mistake in the original licensing of
such clubs, and therefore that particular class of clubs has been
allowed to keep its assets. To be fair to the Charity
Commission—it would seem that I am its champion in the
Committee—it showed a flexible, reasonable approach in
concluding that there has been an oversight in the original licensing
practices, so that the clubs were able to keep their assets. With that
I
conclude.
Martin
Horwood: I thank the Minister for many of his comments on
the three amendments that have been tabled in my name. On amendment No.
76, I am reassured by the Minister’s statements and I beg leave
to withdraw it. On amendments Nos. 67 and 103, I still believe that
there is a pretty fundamental principle at stake. The Minister seemed
to object to the use of the word “maximises” in amendment
No. 67, on the
ground that it would elevate one group of stakeholders over the
interests of others. In the context of charities, however, it seems to
me that it is quite right to elevate the rights of a particular group
of stakeholders, because charities exist for the very purpose of
benefiting their beneficiaries. I appreciate, however, that there might
be a technical legal difficulty with the amendment and I am content to
withdraw it. That
criticism does not apply to amendment No. 103. That amendment simply
repeats the injunction to act fairly and reasonably and requires the
commission to have regard to the interests of charity beneficiaries.
The legal technical argument that the Minister made against amendment
No. 67 does not apply to amendment No. 103. He made a defence against
the inclusion of the words “fairly and
reasonably”—or at least of
“reasonably”—and referred to the Little Gidding
trust case, in which the judge was able to set aside consideration of
the reasonableness of the commission’s actions in order to
consider the merits of the case. That judgment might have been
reasonable in that particular case, but the mere possibility that a
judge could set aside reasonableness in that way concerns
me. 1.45
pm The Minister
quoted the commission’s documents in defence of its intention to
act reasonably, but we have seen that there is considerable disquiet in
certain parts of the sector about whether the commission always acts
reasonably in practice. It is one thing to say, “This exists
particularly in statute if you follow the legal trail through various
pieces of legislation,” but it is quite another to be able
simply to refer to the aims and objectives of the regulatory body and
say that a clear and transparent obligation set down in statute
instructs the commission to act fairly, reasonably and with regard to
the interests of charity beneficiaries.
It seems to me that those things
are eminently reasonable and obviously in the interests of the
charity’s beneficiaries, who are the principal stakeholders and
should be the people whose interests the whole framework exists to
benefit. It would be reasonable to put the measures into the Bill, and
I shall not withdraw amendment No. 103. I beg leave to move
it.
The
Chairman: Order. It does not work like that. Let me
explain to the Committee, for everybody’s benefit, that when you
debate a group of amendments, you move only the lead amendment. None of
the other amendments has yet been moved, nor would they normally be. If
any Member wishes to move an amendment that is grouped and is not the
lead amendment, they are required to give notice to the Chair in
advance. The Chair will then decide whether he or she will accept that
motion. The hon.
Gentleman is clearly unaware of that, so if he seeks leave to withdraw
amendment No. 67, exceptionally, I will then call amendment No. 103
formally, but it will be the last time that I do
so.
Martin
Horwood: Thank you very much for your indulgence of my
inexperience, Mr. Gale. I beg to ask leave to withdraw the
amendment.
Amendment, by leave,
withdrawn. Amendment
proposed: No. 103,
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.’.—[Martin
Horwood.] Question
put, That the amendment be
made:— The
Committee divided: Ayes 4, Noes
9.
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