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Lord Mitchell: My Lords, I knew, beforehand, that this was going to be a good debate, and so it has turned out. I thank all noble Lords for their input, their expertise and their wisdom. I think every speech has centred on the subject of global warming. Look at every newspaper—it is a key headline issue, and that will continue. It is the absolute topic of our time.
I thank my noble friend the Minister for her usual robust speech. It was an excellent wind-up speech and, yes, I do feel very much more encouraged and reassured.
On Question, Motion agreed to.
House adjourned at twenty minutes before seven o'clock.
3 Feb 2005 : Column 475
Official Report of the Grand Committee on the
Charities Bill [HL]
(First Day) Thursday, 3 February 2005.
The Committee met at quarter past three of the clock.
[The Deputy Chairman of Committees (Lord Ampthill) in the Chair.]
The Deputy Chairman of Committees (Lord Ampthill): Before I put the Question that the Title be postponed, I remind the Committee of two points of procedure. Noble Lords will speak standing, and the House has agreed that there shall be no Divisions in Grand Committee. Unless, therefore, an amendment is likely to be agreed to, it should be withdrawn.
If there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Clause 1 [Meaning of "charity"]:
On Question, Whether Clause 1 shall stand part of the Bill?
Lord Hodgson of Astley Abbotts: As we begin the Committee stage, I declare several interests relating to the charitable sector, all of which are recorded in the register of the House.
Winding up the Second Reading debate on the Bill for the Government, the noble Lord, Lord Bassam of Brighton, said:
"I cannot remember a time when legislation that the Government have brought forward has attracted so much support from so many corners of your Lordships' House".—[Official Report, 20/1/05; col. 958.]
He was right. There was almost unanimous support in principle for the purposes behind the Bill. However, I have been surprised by the volume of representations that we have received about the implications of the details of the Bill. Accordingly, as can be seen from the Marshalled List, we have felt it necessary to table a substantial number of amendments. Although we shall raise several important points of principle, many of the amendments are, at least in the first instance, probing amendments.
The charitable sector is anxious for explanation and clarification of government thinking on what lies behind the Bill. We therefore want to offer the Minister the chance to put that thinking on the record, so that the sector can appreciate the detail of what is proposed for it. In order to make the process as effective, constructive and quick as possible, we have been happy to indicate in advance our areas of concern, so that the Minister can address them directly in his reply.
3 Feb 2005 : Column GC2
Wedged as I am between the Minister, backed by the heavy artillery of the Bill team, and the noble Lord, Lord Phillips of Sudbury, with his expert and extensive knowledge of charities and charity law, I offer only a layman's view. Opposing the Question that the clause stand part is one of our probing tactics.
As we have already indicated to the Minister through the Bill team, we want an opportunity to explore how, the Government think, the charity law regime in England and Wales will mesh with that in Scotland. We are concerned with aligning the legislation, rather than redrafting or removing the clause. We have a concern about the lack of congruity between charity law in England and Wales and that in Scotland and, potentially, that in Northern Ireland. The consequences of any discrepancy could be considerable, so I am opposing the Question to find out from the Minister what potential discontinuities have been identified and what discussion and action have taken place to bring charity law throughout the United Kingdom into line.
At Second Reading, the Minister's colleague, the noble Baroness, Lady Scotland of Asthal, dismissed concerns about compatibility in charity law. She said:
"Continued co-operation between the Executive and the UK Government, and the Charity Commission and its Scottish counterpart OSCR, will aim to ensure that in key areas—such as the definition of charity—the two Bills are fully compatible. Charity law is also devolved in Northern Ireland, and it is likely that there will be reforms there too, although proposals are in the early stages".—[Official Report, 20/1/05; col. 884.]
I am not sure that that is accurate. We understand that the draft legislation on charity in Scotland contains a definition of "public benefit". That causes complications in several ways. As we have already made clear, we do not wish to see a definition of "public benefit" put into the Bill, but the fact that the Scottish Bill has differing provisions—particularly one concerning such an important issue as the definition of "public benefit"—must be of concern to us.
Clause 8 of the Charities and Trustee Investment (Scotland) Bill is entitled "Public benefit". It reads as follows:
"(1) No particular purpose is, for the purposes of establishing whether the charity test has been met, to be presumed to be for the public benefit".
So far, so good. We understand the removal of presumption. It continues:
"(2) In determining whether a body provides or intends to provide public benefit, regard must be had to—
(a) how any—
(i) benefit is gained or is likely to be gained by members of the body or any other persons (other than as members of the public), and
(ii) disbenefit is incurred or likely to be incurred by the public, in consequence of the body exercising its functions compares with the benefit gained or likely to be gained by the public in that consequence, and
(b) where benefit is, or is likely to be, provided to a section of the public only, whether any condition on obtaining that benefit is unduly restrictive".
That drafting on the concept of public benefit is considerably more restrictive than that which exists in English charity law or, indeed, is proposed in the Bill.
3 Feb 2005 : Column GC3
That, of course, in England leaves definitions to developments in the common law rather than being frozen in statutes. Differing definitions between the two countries will, of course, result in different practices, which will in turn cause conflict, which is undesirable for the sector as a whole.
Without positive alignment, there could be negative repercussions on several fronts, in particular for university funding, medical funding and for the military service charities, all of which cross national boundaries. For example, the three branches of the armed services recruit from the four nations of the United Kingdom. To have separate legislation covering Scottish and Northern Irish makes no sense when one is dealing with the Armed Forces of the Crown as an entity.
The Minister will be aware of the concerns that the service charities have—the non-public service funds—because they will have to register with the Charity Commission under the Bill. We shall debate the desirability of that when we come to Amendment No. 114. but, for the time being, which national charity authority, for example, will be responsible for the regulation of a service charity of an RAF squadron serving in Scotland or a UK Army battalion serving in Northern Ireland?
A further case in point is the restriction that prevents Scottish and Northern Irish units from investing in the Army Common Investment Fund, a charity registered in England and Wales. To allow such local differences to persist causes confusion and resentment. Surely, a common regulatory system should apply to the Armed Forces charities, irrespective of unit identity or location, in the same way, for example, as the Army Act applies across the whole structure of the Army.
Similar concerns arise with medical research charities. Maintaining our medical research base is important to the future of UK plc, and three different regulatory regimes could make the processing of charitable gifts complicated.
Much the same applies to universities. The Scottish Higher Education Funding Council regulates in Scotland, the Higher Education Funding Council for Wales in Wales, and the one for England regulates in England. With different regimes and different regulatory procedures, the solicitation of charitable gifts or donations from alumni who may well live in one of the other countries could face the same complications as the medical research charities.
The Minister—and perhaps the noble Lord, Lord Phillips—may say that it was always thus: that Scottish charity law has always been different from that of England and Wales. That may be so, but an important change will take place as a result of the passage of this and the Scottish Bill. Some may characterise the present charity regime on both sides of the border as being based on benign neglect, but that will not be the case in the future. If the Bill is to achieve its strategic objectives, public confidence, public accountability and transparency, the Charity Commission and, no doubt, its Scottish counterpart
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will have to be hands-on and proactive in their roles. This will highlight any inconsistencies and force the addressing of potential difficulties to cross-border charities of the type I have just described.
I look forward to hearing from the Minister how he believes these problems can be avoided and/or resolved.
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