Martin
Horwood: I think that the Parliamentary Secretary is
making quite a serious error. If I were mischievous, I could say that a
new Labour Minister might be forgiven for misunderstanding the nature
of democratic membership organisations. [ Interruption.] If the
hon. Member for High Peak (Tom Levitt) and others are whistling through
their teeth, perhaps they may care to watch out for future amendments
to the Labour party’s
constitution. The
governing instruments of a charity are generally the memorandum and
articles of association, but they do not always give exclusive power to
the trustees to run the charity as they wish. In a membership
organisation, those documents may well give sovereign
power to the membership that may comprise people who elect the trustees.
That does not take away the trustees’ responsibilities, but it
does give, in some sense, sovereign power to the membership. For a
democratic membership organisation, this seems a perfectly reasonable
amendment. Tom
Levitt (High Peak) (Lab): If there were a legal challenge
to a decision taken by a body where members had collectively had the
power that the hon. Gentleman is describing, who would be responsible
for defending that legal challenge? [Interruption.] Was I
intervening on an intervention? I beg your pardon, Mrs.
Humble.
The
Chairman: Order. The Minister had the floor and the hon.
Member for Cheltenham was intervening on the Minister, so the Minister
will respond to the newer intervention from the hon. Member for High
Peak (Tom
Levitt).
Edward
Miliband: I am grateful to you, Mrs. Humble. Perhaps my
hon. Friend the Member for High Peak would like to rephrase his
intervention to
me.
Tom
Levitt: Given the scenario that the hon. Member for
Cheltenham describes, if a membership organisation took a decision that
was challenged legally, it would always be the trustees or the
directors who were responsible for defending that challenge, not the
membership as a whole. Is that not
correct?
Edward
Miliband: That is certainly my understanding. I know that
the hon. Member for Cheltenham is a great expert, but I just point out,
by the way, that Liberal Democrats should be careful what they say
about membership organisations. I believe that they did not know the
addresses of any of their members when their election took place.
Anyway, members almost never have voting rights over the matters
covered by proposed new section 74D(2). Members vote to elect trustees
and for similar purposes, so this does not usurp membership rights.
However, if the hon. Gentleman has information that contradicts that, I
will happily give way to
him.
Martin
Horwood: I was not suggesting that anything in the
constitution of a membership organisation usurps the rights of
trustees. Clearly, that is not so.
If I may answer the
intervention from the hon. Member for High Peak, of course a resolution
by the membership binding the trustees has to be in order; it has to be
within the bounds of charity law itself. Therefore, I suppose that it
would be the legal officer—the company secretary or the CIO
secretary—who would be responsible for defending such a
resolution in the case of it being challenged. However, the purpose of
the amendment is not to usurp the rights of trustees. It seems to me
that the purpose is merely to insert a provision that ensures that the
membership is consulted.
Edward
Miliband: I do not think that the provision is about the
membership being consulted. The amendment
states: “Where
the rules of the charity provide that its members have the power to
vote on amendments to its purposes...this section shall be
construed as if ‘members’ were substituted for
‘charity trustees’ in subsections (1) to
(8).” If I understand the
amendment correctly, the term “members” would be
substituted for “charity trustees” throughout. I hope
that that explanation answers the
point.
Mr.
Turner: I think that both the hon. Member for Cheltenham
and the Minister have misunderstood my amendment, possibly due to it
not being perfectly drafted. It
states: “Where
the rules of the charity provide that its members have the
power”. Therefore, there
is no intention to usurp the power of trustees in that
respect. We must
always remember that there are two kinds of member. There are
membership organisations, which may be unincorporated and which have
members, and the rules may provide that those members have a right to
vote. There are also incorporated organisations, of which the directors
are members. There may be as few as two. However, in either
circumstance, it does not seem unreasonable that where members have the
power to vote, they should be provided with the power to vote, and we
are just giving them time to vote in our proposed new subsection
(8A)(a). I forget exactly what the purpose of our proposed new
subsection (8A)(b) was, but it was not intended to usurp the power of
charity trustees. It may well be that my amendment is defective in that
respect and I will have to think about it a bit more before I wind up
on this
group.
Edward
Miliband: The amendment is defective, I am sorry to say,
but let me move on. Amendment No. 42 also specifies a minimum period of
28 days for unincorporated charities to provide notice of a general
meeting at which a resolution modifying the powers or procedures of the
charity is to be considered. Again, however, it is not for us in this
House to impose on organisations the notice period for a general
meeting. The commission’s model governing documents for
unincorporated associations suggest a notice period of at least 14 days
to members and trustees, unless all agree to a shorter notice period.
However, the period may vary from one organisation to the next, so, in
the interests of flexibility, I am not persuaded by amendment No.
42. 5.45
pm Let me turn to
amendment No. 102, which stands in the name of the hon. Member for
Cheltenham. We are all alive to the concerns that the Religious Society
of Friends has expressed in relation to the clause—indeed, it
recently sent me a letter on that very point. However, its concerns are
misplaced, and I shall try to explain why. As drafted, clause 42 allows
for a resolution to be approved by a decision taken at a general
meeting without a vote and without any expression of dissent. However,
the key point is that clause 42 allows for dissent in the debate, even
though it requires a decision
without dissent. That is perfectly consistent with the notion of
consensus, which the Religious Society of Friends understandably thinks
is important. Proposed
new section 74D(4)(b) of the 1993 Act
says: “by a decision
taken without a vote and without any expression of
dissent.” I am
assured—although I promise to check on this point—that
the expression of dissent is taken to mean for the process of voting,
not the previous discussion. I hope that hon. Members will accept my
assurances on that
point. Mr.
Peter Bone (Wellingborough) (Con): If I understand clause
41 correctly, we are talking only about where an organisation’s
gross income in the past financial year did not exceed £10,000.
The figure of £10,000 recurs throughout the Bill as though it
describes a small charity, but it almost seems to have been plucked out
of thin air. If in the previous two years a charity had raised
£1 million but then stopped fundraising, it would still fall
under that category. The issue relates to the earlier question about
auditing. Perhaps the Minister could reflect on that point and consider
whether £10,000 is a catch-all amount or whether more
consideration should be
given.
Edward
Miliband: The problem is that we have to draw the line
somewhere, although I am happy to consider the issue again. No doubt
when we consider the threshold in the Bill, that will be raised again,
as the hon. Gentleman makes an important point. However, I am aware
that time is marching on, so let me make
progress. Amendment
No. 43 stands in the name of the hon. Member for Isle of Wight. I
confess that we do not totally understand the nature of his amendment,
because it is not wholly clear what is meant by “whichever is
more onerous”. I do not know whether I missed that in the hon.
Gentleman’s remarks, but perhaps he would like to explain it to
us.
Mr.
Turner: It simply meant that the charity might have
already set out procedures that require more than a two-thirds majority
or something else, in which case it would seem reasonable for the
charity to adhere to those
procedures.
Edward
Miliband: That might indeed be reasonable, but proposed
new sections 74D(4)(a) and 74D(4)(b) of the 1993 Act are relatively
onerous procedures as they stand. I am not sure that we necessarily
need more onerous procedures than those.
Martin
Horwood: If I understand amendment No. 43 correctly, the
hon. Member for Isle of Wight is not proposing to make any procedures
more onerous than they are already. He is in fact doing the
reverse—he is trying to prevent the Bill from making procedures
that are less onerous than those that the charity has set itself under
its own rules, terms and conditions. However, I am not sure that
amendment No. 43 makes that entirely clear, so perhaps the general
point could be considered, rather than the hon. Gentleman’s
amendment as drafted.
Edward
Miliband: I shall endeavour to take the point away and
consider it, in order that we can make further
progress. Let me now turn to amendments Nos. 125 and 126, on both of
which I hope that I can offer satisfactory
reassurance. The
Government understand the hon. Gentleman’s wish for trustees to
make suitable modifications to the powers and procedures of the
charity. He named a couple of specific issues about which he was
concerned, and I am assured that those that he named come within
subsections (2)(a) and (b) as inserted by clause 42, and that the
amendment is therefore unnecessary. I think that the hon. Gentleman was
advised on this by the CLA, but I can give that assurance. He raised
the issues of changing the quorum level and of changing the number of
trustees. I am pretty certain that those are already covered under
subsections (2)(a) and (b) too. If they are not, we shall obviously
seek to do something about
it. Amendment No. 126
addresses the problem of ensuring that, when trustees have made a
resolution, the date on which the resolution takes effect cannot be
earlier than the date of the resolution. We agree that that is a
necessary condition, but there is a common law rule that new rules of
unincorporated associations cannot be made retrospective in the absence
of an express power to that effect. We want to check that it is
sufficient, however. If it is not, we shall propose an amendment, and I
am grateful to the hon. Gentleman for raising the point. With that, I
hope that he will withdraw his amendments.
Mr.
Turner: With the Minister’s assurances of both
kinds—that my amendments are defective, where they are
defective, and that they are useful, where they are useful—and
with my gratitude that he has indicated he will examine the issues, I
beg to ask leave to withdraw the amendment.
Amendment, by leave,
withdrawn. Clause
41 ordered to stand part of the
Bill.
The
Chairman: May I ask for clarification from Mr.
Horwood, who in moving amendment No. 102 said that he might wish to
press
it?
Martin
Horwood: I beg your pardon, Mrs. Humble. That was a
rhetorical
point.
Clause
42Power
to modify powers or
procedures Question
proposed, That the clause stand part of the
Bill.
Peter
Bottomley: May I use this opportunity to follow what the
Minister said about the Society of Friends—the Quakers? He
helpfully observed that, in new section 74D(4)(b) as proposed to be
inserted in the 1993 Act by section 42, the
words “decision taken
without a vote and without any expression of
dissent” are taken to
mean that if a body—including the Society of Friends—took
a decision after discussion, without a vote and without dissent, that
would have the same effect as if the resolution had been passed by two
thirds of the members entitled to vote and attending. Will the
Minister consider over the summer whether there ought to be a general
provision so that, instead of having to put such provisions into all
sorts of legislation, there would be a catch-all that would operate in
situations that would affect organisations such as the Society of
Friends? Alternatively, could he ask the Society of Friends whether
there are other provisions—perhaps for incorporated charities
rather than unincorporated ones—that it might be helpful to
duplicate? Edward
Miliband: I am certainly happy to consider that. However,
is the hon. Gentleman saying that we should have a provision in the
Bill that would affect other pieces of legislation? Have I understood
him correctly?
Peter
Bottomley: I am not trying to draft the thing off the top
of my head. What I had in mind was to say that in cases where a
recognised charity—I use the word “recognised”
imprecisely—does not take formal votes, but where there is a
requirement for a vote such as the one in the provision that I cited, a
decision taken without dissent would be regarded as
equivalent.
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