Martin
Horwood: I am extremely grateful to you,Mr. Gale,
not least for the instructive and tolerant way in which you are guiding
us through this minefield. You are obviously acting in an advisory,
rather than a regulatory, capacity in that.
My proposed amendment No. 85 is
designed to raise a matter that I raised on Second Reading. That is
about the ability of decisions effectively not made by the commission
to be referred to a body, such as the tribunal, as well as those
decisions that are made. As a general principle, it addresses the
question of whether or not commission inaction, as well as commission
action, may have consequences.
The case that I raised on Second
Reading was that of an Alzheimer’s organisation or an
organisation that purported to support Alzheimer’s research,
which was called the Alzheimer’s Foundation. Appropriate and
speedy action was taken by the advertising standards authority and by
journalists in investigating and bringing to public attention the
undesirable activities of that organisation.
Unfortunately, the one body that
did not see fit to act until political pressure was brought on it, was
the Charity Commission. That would have been an occasion when, instead
of troubling Ministers with the matter or having to raise it through
the media, it would have been worthwhile, appropriate and convenient
for the Alzheimer’s Society—which was the legitimate and
worthwhile charity that was threatened by the activities of that
organisation—to have immediately referred the
commission’s decision not to act to the
tribunal. From my
reading of the schedule that sets out the various circumstances in
which decisions and, in some cases, decisions not to act can be
referred to the tribunal, it would not have been possible to do that
under the Bill. I hope that we will see our way to include that in the
Bill. Amendment No.86
is different. It addresses many of the matters raised in the
Association for Charities’ document “Power without
Accountability”. The amendment refers not only to decisions made
but to “any decision or
activity consequent to any decisions, orders or directions of the
Commission”
Peter
Bottomley: Just for clarity, we were looking at the
reference to schedule 1D. Is that what appears on page 102 as part of
schedule 4? If it is not, I am looking in the wrong place. I think that
it is, but it would be useful if that could be
confirmed.
Martin
Horwood: That is a good question. I am beginning to
sympathise with the Minister about being asked intelligent questions by
the hon. Member for Worthing, West. Schedule 1D gives the detailed
table of decisions which can be referred to the tribunal. Later on, I
am proposing amendments Nos. 81 and 82 to that very schedule in order
to produce new possibilities for referring specific decisions or
activities to the tribunal.
What I was seeking to do in
those amendments to clause 8 was to confer a general responsibility and
possibility on complainants to be able to refer decisions not made or
activities consequent to decisions made to the tribunal as a general
rule without having to be dependent on finding them in schedule
4.
Edward
Miliband: I hesitate to try and help the hon. Member for
Worthing, West as I might get this wrong, but I think that the relevant
provision is in section 1C. The long table that we will be talking
about later starts on page 94. Column 1 is essentially a list of all
the different commission decisions that can be referred to the
tribunal. If the hon. Gentleman is looking for a list of decisions that
can be taken to the tribunal, he should look at the
table.
Martin
Horwood: I am particularly grateful to the Minister for
that intervention, which is exactly
right. I was discussing
how it might work in practice. We will consider amendments Nos. 81 and
82 later, but I shall refer to them briefly, because they explain how
it might work and how what appears to be a broad, sweeping permission
to bring cases to the tribunal will actually be a very practical
one—for instance, a decision to continue with the appointment of
a receiver and manager on the basis that the activities of the current
receiver and manager consequent on the decision to appoint another
might be brought before the charity tribunal. The displaced trustees of
the charity in question might feel that the receiver and manager was
running up excessive costs or was not administering the charity in the
best interests of its stakeholders. I cannot see in the table in
schedule 4 the decision to appoint that receiver and manager in the
first place. That is an example of how a general amendment might enable
people to bring appropriate complaints before the
tribunal. The issues
are serious for the charities concerned; they are not legal minutiae.
One case in the booklet issued by the Association for Charities
particularly alarmed me and illustrated the need for such amendments.
PALS, or the Protection of Animal Life Society, was a small animal
welfare charity established near Salisbury in 1984. It grew during 15
years to become a significant local charity, but it did something that
in an ideal world it would have been advised not to; it based the
charitable premises on the founder’s private land.
That attracted the interest of
the Charity Commission, and a process was set in train. As far as I can
tell from this document—I understand that its factual accuracy
has not been significantly challenged by the commission or anyone
else—no serious breach of charity law was ever found.
Nevertheless, a process was instigated that led to the removal of the
founder as a trustee, the freezing of the charity’s bank account
and
ultimately the winding up of PALS as an independent charity. The
consequences were extremely serious for the charity concerned. It
happened despite a petition from 1,000 local supporters of the charity
and the involvement of the local MP. The Association for
Charities’ conclusion is pretty strongly
worded: “it is clear that
the Commission found no substantial breaches or any intent to breach
charity law or regulation. The fact is that charity law as interpreted
by the Commission is so complex there can hardly be a charity in the
land which does not occasionally commit minor technical breaches. The
Commission could not find even a half decent excuse to destroy this
charity. But it sacked the key person at the centre of PALS’
success, ‘supervised’ the appointment of incompetent
replacement trustees who destroyed it, and then connived in disposing
of the remnants to a big
charity.” The wording is
extremely strong, and I am sure that the commission and its
representatives might contest it. One might think that it is an
over-excited response to an administrative issue.
On the other hand, the founder
of the charity was represented by Bates, Wells and Braithwaite, which
in my view is the country’s leading charity law firm. It
includes such eminent and learned Friends as Lord Phillips of Sudbury.
The firm wrote to the Charity Commission in September 1998 to say that
the PALS case had been handled in a way that it
considered “to have been
profoundly
unsatisfactory.” A few
days later it wrote to the hon. Member for New Forest, West (Mr.
Swayne), saying:
“Under the Charities Act
1993, the Charity Commission had an extraordinary latitude and
draconian powers which...are not checked or qualified by any
prescribed due procedure or meaningful accountability. This has led to
heavy-handedness, unfairness and serious miscalculation on the part of
the Commission in this case...We very definitely think it is a
case which may be used to illustrate the need to ensure that the
Commission is statutorily obliged to act in accordance with the general
principles of fairness and natural justice in accordance with a
prescribed and open procedure and that there is an effective,
independent and affordable appeal
procedure.” In
some ways, the Bill already takes account of that matter. The
establishment of the charity tribunal is a welcome step. It is one of
the ways that it seeks to address the general rule of having some kind
of transparent court of appeal against charity commission decisions. It
is one of the reasons that we support the Bill in general.
Nevertheless, that particular case would not have been easy to refer to
the tribunal, unless the Bill is amended in the way that I suggest. The
sense of injustice that permeates that report—and which is
present in some smaller charities, some of which have been subject to
Charity Commission decisions and their consequences—is something
that it is in the commission’s interests to address.
If the commission were to have a
proper process which resulted in consequences or the actions being
challenged and gives the commission the opportunity to justify them in
some way—what Bates, Wellsand Braithwaite called a
“prescribed and open procedure”—that would enable
them to avoid ever having to be presented with a document like this
ever again. They would have that open and prescribed procedure and
would be able to justify and hopefully be almost acquitted by the
tribunal, if they were acting
in the right. I am therefore keen to promote amendment No.86 for that
reason. Amendment No.
69 repeats the principle of amendment No. 85. Therefore, I will not
spend a great deal of time on it. However, the significant phrase
within it is: “decisions,
orders or directions not made by the Commission which could reasonably
have been made by the Commission.”
Amendment No. 87 closes what
might be a loophole. I would be interested to hear the
Minister’s views on that. There are large numbers of provisions
in the Bill which address, or give the right of appeal against, Charity
Commission decisions. However, the commission is not the only body
corporate that can act under the Bill. The Secretary of State himself
has powers, some of which are by order and regulation and which could
presumably be challenged in this place and elsewhere. There are some
powers, for example, the decision to appoint, set remuneration for and
even sack, a member of the Charity Commission itself.
I cannot see anywhere in the
Bill—but perhaps the Minister may enlighten me if I am
wrong—where that type of decision could be challenged on any of
the bases that we have discussed in the debate so far. It would be good
if the Secretary of State’s decisions were also subject to the
Bill’s appeal procedure and the processes of the charity
tribunal. I beg leave to move the amendment in my
name.
Mr.
Turner: I strongly support the thrust of the amendments
tabled by the hon. Member for Cheltenham. That is why I have tabled
amendmentNo. 19, which seeks to achieve the same thing by a
different route and which I give notice that I wish to move at whatever
time is appropriate. I
was appalled to read the Association for Charities’ report. I
cannot believe that a public body has behaved in such an irresponsible
way. One that is so open to criticism and appears to adopt the most
reprehensible tactics in dealing with members of the public and members
who are trying to do their best—a very small group of
people. 2.15
pm To my knowledge,
and as the hon. Member for Cheltenham said, none of the report has been
substantially challenged by either the Charity Commission or the Home
Office. I am amazed that such behaviour has been tolerated in a public
body. The hon. Gentleman quoted the letter to my hon. Friend the Member
for New Forest, West. It bears repeating that the letter was not
written by the Association for Charities, nor by an irritated trustee
and nor by someone who went into the marketplace in Salisbury, gave
money and then found that the money was being wasted by the appointees
of the Charity Commission. The letter was written by a reputable firm
of charity lawyers who described the commission as having extraordinary
latitude and draconian powers, as having behaved with heavy handedness
and unfairness, and as having made serious
miscalculations.
The commission appointed trustees
for the charity who came and went on an almost monthly basis. It then
handed over what remained of the charity’s assets to another
charity that did not appear to have identical objectives—the
National Canine Defence League. That is a perfectly reputable charity
that focuses on the needs of dogs, but PALS focused on the needs of a
far wider range of animals. The commission tried to bully Lorraine
Drake, using what seems the absolutely perverse excuse that the
buildings of the charity, which were mobile buildings, were on her
land. It bullied her into entering into a lease with the charity for
that land—a move for which there was no legal
justification. I accept
that the tribunal may have been set up as a result of such a case.
However, I believe that the hon. Member for Cheltenham is absolutely
right in saying that there should be a general mechanism of appeal,
because the alternative is to go to the High Court—an option
that the tribunal is meant to prevent. The tribunal was established
because charities cannot afford to go to the High Court; charities that
spend money going to the High Court are spending money that could be
better spent on animals, young people, or the elderly and vulnerable,
or the other beneficiaries of the charity. I strongly believe that any
decision or non-decision of the charity should be appealable to the
tribunal. That is why I tabled amendment No.
19.
Peter
Bottomley: Just for the record, I am not going to take
part in this part of the debate because my brother-in-law works for
Bates, Wells and
Braithwaite.
Edward
Miliband: Phew. I thought that I was going to get a
difficult question to which I would not know the answer. I got away
with it this time. On
the Association for Charities report, I do not want to enter into the
details of the case that has been mentioned. However, to set some
context for the Committee, it is worth pointing out that the PALS case
went to the independent complaints reviewer, which, as I understand it,
did not uphold the case made by the Association for Charities. That is
not to say that the document does not have its merits. I have not read
it, but I shall endeavour to do so, and I am sure that it has merit,
but the case is not one of a public body operating without any
constraint. Indeed, the case was taken to the ICR, which found in
favour of the
commission.
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