Edward
Miliband: I do not think that a veto would be appropriate.
The precise reason why we are giving the Charity Commission such powers
in relation to exempt charities is that it has the expertise to work
out what is happening in a charity, and it can do so only if it is
commissioned to do so by the principal regulator. In addition, any
decision that the commission makes is appealable by the charity
concerned to our old friend the charity tribunal. However, I will
consider whether the relationship between the commission and the
principal regulator is a sufficient safeguard. I hope that that
explains the background to the clauses that we are discussing and
provides some reassurance on the amendments.
I do not think that amendment
No. 98, which was tabled by the hon. Member for Cheltenham, is
sensible, because it would remove from the Charity Commission powers
relating to exempt charities that might be considered necessary by the
principal regulator when it believes that there is a problem with that
charity and that the Charity Commission should exercise its powers. I
hope that on that basis, and in the spirit of achieving a level playing
field, he will feel able to withdraw his
amendment. Amendment
No. 99 it not sensible, either. We cannot give two different
organisations the same powers over the same charities; that would make
for a terrible mess. The amendment would move the powers listed in
schedule 5 from the commission to the principal regulator. The problem
is that the commission will be best able to inquire into and will have
the expertise and resources to work out what is going wrong in a
charity, when there is something going wrong, and to put it right. If
it is the principal regulator that is to decide to put the commission
in control, it is hard to say that the powers to take action should lie
with the principal regulator rather than the commission. None the less,
as I said, I think that we need to probe whether the
commission’s relationship with the principal regulator is
correctly drawn to provide the regulator with sufficient safeguards
over what the commission does. I shall return on Report with the
answer. I am not sure
whether amendments Nos. 92 and 93, which also stand in the name of the
hon. Member for Cheltenham, are wise. Amendment No. 92 would remove the
Secretary of State’s power to prescribe a principal regulator. I
am not sure who would prescribe the principle regulator if the
amendment were made, and in fact I fear that the amendment would have
no effect, because elsewhere the Bill provides that references to
regulations are normally to regulations made by the Secretary of State.
It is right to provide that the Secretary of State should be able to
say who the principal regulator for an exempt charity should be. I hope
that the hon. Gentleman will not press the
amendment. Amendment
No. 93 is about the Privy Council, which I do not think is an
appropriate body, even as a backstop, for regulating.
[Interruption.] My right hon. Friend the Member for Cardiff,
South and Penarth (Alun Michael) clearly does not want the
responsibility. The Privy Council is an august body. I take the point
that we need to ensure that principal regulators are set out for all
the different exempt institutions, but giving the power to the Privy
Council, which advises Her Majesty, is not
appropriate.
Martin
Horwood: By confusing each other and sometimes ourselves,
we have all demonstrated that this is a very complicated field. The
niceties of who regulates whom are not always clear, nor are they set
out in the Bill. In the event of an organisation being missed in the
regulations that provide for regulators, who would be responsible? Who
would be the principal regulator, if not the Privy
Council?
Edward
Miliband: I believe that the backstop would be the
Attorney-General. However, I hope that such circumstances will not
arise; I am sure that they will not, given the assiduousness of our
officials.
Amendment No. 105 falls prey to
the problem that I mentioned earlier: it would give dual powers to the
Charity Commission and the principal regulator. However, it would not
be sensible for two bodies to have the same powers over the same
institution. Finally,
amendment No. 22 deals with Ministers’ ability to amend
enactments. Essentially, that is to ensure that principal regulators
can properly secure their functions. I should say to the hon. Member
for Isle of Wight that clause 13(3) states that
“The compliance
objective is to increase compliance by the charity trustees with their
legal obligations in exercising control and management of the
administration of the
charity.” That is now a
job for the principal regulator. The part of the clause that the hon.
Gentleman seeks to amend would simply ensure that if a principal
regulator does not feel that it has the powers in statute to carry out
those functions, we can make a technical amendment to allow it to have
the powers set out in clause 13(3) so that it can promote compliance by
the charity trustees with their legal obligations. I hope that, on that
basis, the hon. Gentleman is
satisfied.
Peter
Bottomley: Will the Minister consider adding the words
“at the request of the regulating authority”? I am not
suggesting that the Government intend to have a coach and horses
enactment, but the provision would give the Minister the power to make
any change to any enactment, as long as it could somehow be hooked to a
regulation. I ask the Minister to reflect on whether some limitation
would be helpful.
Clause 13(1) reminds us that a
Minister of the Crown can be
“the principal regulator in
relation to an exempt
charity.” Will the
Minister remind us of one or two of the exempt charities for which a
Minister could be a
regulator?
Edward
Miliband: As always, the hon. Gentleman makes sensible
points. I shall take the first one away and consider it.
The hon. Gentleman mentioned
Ministers of the Crown. I do not think that I would be the principal
regulator in relation to an exempt charity—at least I hope not.
However, I shall give the Committee some examples, as the hon.
Gentleman makes a fair point. The Qualifications and Curriculum
Authority will be the responsibility of the Department for Education
and Skills. A number of museums will be the responsibility of the
Department for Culture, Media and Sport. The Royal Botanic gardens at
Kew will be the responsibility of Ministers at the Department for
Environment, Food and Rural Affairs. That generally covers the main
areas where Ministers of the Crown will be
involved.
Peter
Bottomley: It might be perfectly obvious—if so, I
have not found the right place in the Bill—but does that cover
charities in England and Wales? What about charities that operate in
other parts of the United Kingdom? Is there cross-regulation, duplicate
regulation or a lack of regulation?
Edward
Miliband: Separate legislation was passed for Scotland in
2005, and charities there will be covered by that
legislation.
Martin
Horwood: The Minister has made many reasonable statements;
he is indeed a generous soul and a reasonable person. He has provided
reasonable explanations for each part of the schedule that the
amendments would change. The amendments would extend the powers of
regulators to protect exempt charities. It seems to me that a dangerous
combination of reasonable steps could still lead to an unreasonable
outcome. I do not say that there is anything of James II about the
Minister, but we have to allow for unreasonable successors or
unreasonable Governments taking advantage of legislation. The very
purpose of legislation to secure the liberties of bodies such as
academic bodies which are a critical part of our democracy. As the hon.
Member for Isle of Wight pointed out, their liberties are extremely
important. The
Minister says that bodies such as the Higher Education Funding Council
and the Department for Culture, Media and Sport may refer institutions
that may have a problem under charitable law to the Charity Commission,
which will then institute an inquiry. He implied that the commission
already had the power to do that. He may intervene on me if I am
mistaken, but I believe that section 18 of the 1993 Act does not apply
to exempt charities. The specific power to intervene and to suspend a
trustee, officer, agent or employee of the charity—it is a very
broad power—did not previously apply to universities. A major
step is being taken, which I want to
remove.
Edward
Miliband: I said that such bodies previously had to comply
with charity law, but that they were not monitored. I agree that the
powers are new. I am sorry to have to ask the hon. Gentleman to be
consistent, but consistency is important. Why should such charities not
have to comply with the principles of charity law and have the same
powers exercised over them if they do not comply as other charities? It
takes us back to the NSPCC-Eton issue. Surely, if provision good enough
for the NSPCC, it is good enough for our
universities.
Martin
Horwood: I am grateful to the Minister. I shall return to
the matter of level playing fields. I am not sure that the Bill sets
out a level playing field for all charities. It certainly sets out
different playing fields, and the logic of exempt status is that some
bodies should have a different playing field.
It seems to me that if a good
rationale can be advanced for treating a body differently, it should be
treated differently. The academic freedom of our universities is
important and needs to be defended. The Minister has conceded that the
potentially draconian powers of section 18 of the 1993 Act did not
apply previously to universities but that they will do so under the
Bill unless the amendments are accepted.
As the
Association for Charities has pointed out, the Charity
Commission’s reputation among charities suggests that sometimes
the powers can be used, if not abused, to an extent that can be
upsetting or distressing and even unfair to many of the participants in
charities; indeed, it may cause real grievances to arise. For the
Government to step into that territory with our
great universities seems a brave thing to do. The
universities are of course subject to charity law at the moment.
Processes are available through the courts to anybody to force their
compliance with charity law, but not to remove dons from academic
posts. The regulator for the Oxford and Cambridge colleges will be the
Charity Commission, not the Higher Education Funding Council for
England. We are talking about the Charity Commission
not—according to the Minister’s description—having
the expertise to step in and look into the administration of charities,
but having the expertise to rule on whether an Oxford or Cambridge
college is complying with charity law.
Edward
Miliband: I do not know where the hon. Gentleman went to
university—his defence of Oxford and Cambridge colleges is
incredibly passionate—but the proposals are not about removing
dons from posts. They are about trustees fulfilling the purposes of the
charity and complying with charity law.
Martin
Horwood: The Minister is quite wrong. The phrase is
a “trustee, officer,
agent or employee”. It is
not simply a trustee who can be
removed.
Edward
Miliband: In relation to charity
law.
Martin
Horwood: It may or may not be in relation to charity law,
but the provision still extends that explicit power to Ministers in a
way that was not there before. If we have mixed confidence in the
Charity Commission’s ability to intervene in charities in the
voluntary sector, giving it the power to intervene in colleges will
stretch that confidence to breaking point. There is also a concern
about a level playing
field.
Peter
Bottomley: Perhaps the hon. Gentleman could consider the
issue the other way round. Instead of someone trying to require a
university or college to do something with a member of its staff, is it
not more likely that a university or college might have disciplined or
dismissed a member of staff for reasons that somebody else—or
even the person concerned—regarded as wrong and in need of
challenge, upon which that person, whether the outsider or the insider,
would go to the Charity Commission and say, “Will you please
investigate?” That is a far more likely occurrence, to which the
answer from the Charity Commission or regulating authority would
normally be, “That’s an internal affair and it has no
charitable effect.” Is that what the hon. Gentleman is worried
about?
Martin
Horwood: I am grateful to the hon. Gentleman, but I am not
sure that that is exactly what I am worried about. As the Minister
pointed out, a relevant case would have to relate overtly to charity
law, but it is not entirely clear how a particular appointment would
apply in that sense.
There is an issue concerning a
level playing field. Having an exempt status and different regulators
who can regulate with expertise that is appropriate to particular
bodies does not necessarily provide a level playing field, but it does
at least provide different playing fields for different areas of the
new charity law. The logic of that is that those new regulators should
not have inappropriate powers. However, the powers
given to the Charity Commission in relation to the colleges of the
ancient universities is not appropriate. I shall therefore not withdraw
the amendment. Mr.
Turner: The Minister repeatedly asserts that the
provisions are for the purposes of charity law but the problem is that,
for purposes of charity law, the commission or HEFCE can intervene to
require an institute to balance its books, for example, which means
cutting staff. The commission or HEFCE might say, “Well, if you
don’t cut staff, we will—and these are the areas where we
will cut
them.”
Edward
Miliband: That is
ridiculous.
Mr.
Turner: It is all very well for the Minister to say that,
but if we give powers to organisations without properly constraining
them, they will use those powers. They might not intend to use those
powers malevolently, but they will use
them.
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