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Lord Forsyth of Drumlean: My Lords, when will the Government produce honest borrowing figures? The Minister chose to make a comparison with the previous Conservative government. When will we see the end of the Enron-style accounting, where huge sums of borrowing are presented off balance sheet? I am thinking, for example, of the PFI borrowings and of the borrowings which have been made to British Rail, as it was. These sums do no appear. Therefore, if the Minister wishes to make an honest comparison with the previous government, will he produce the figures which people want in order to know the extent to which they have put this generation in hock as a result of borrowings which are off balance sheet?
Lord McKenzie of Luton: My Lords, the Government make an honest assessment. This Government have been more transparent in the way they have dealt with public finances than any previous government. That is a key part of anchoring the fiscal and monetary stability on which this Government's economic policies have been so successful. On the PFI—and I know there has been press comment on this—the ONS press release of 20 May states that,
Some of those PFI schemes are on the balance sheet, quite properly. There is an assessment in each case on where the risk lies, and there has been no change in that approach.
Baroness Noakes: My Lords, the economic cycle over which Golden Rule borrowing is measured is due to end this year. Will the Minister confirm that the Government have no plans either to change the definition of the economic cycle, or how it is measured?
Lord McKenzie of Luton: My Lords, I confirm that the Government have no such plans. The Government's position on measurement of the economic cycle has been in place since 1997, and that process and the parameters have not changed.
Lord Higgins: My Lords, is it the Government's policy to fund their borrowing in full, and if not what do they expect the effect will be on money supply interest rates and inflation?
Lord McKenzie of Luton: My Lords, the Government will fund their requirements in the normal way, taking account of the normal market conditions in full.
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Lord Brooke of Sutton Mandeville: My Lords, was it an exercise in transparency when the noble Lord, Lord Warner, recently said that an increase of £30 billion to £90 billion in NHS expenditure was an increase of 300 per cent, or is new Labour arithmetic a variant form?
Lord McKenzie of Luton: My Lords, I would not like to be drawn into that particular statistic. The arithmetic of new Labour has been exemplary, as has its management of this country's economy.
Lord Northbrook: My Lords, is the Minister aware that the Bank of England has recently cut its growth forecast to 2.6 per cent? Does he think its forecasting record better than the Government's?
Lord McKenzie of Luton: My Lords, I reiterate that the Government's projections on growth have been better than those of any other forecasters over the period. The next pre-Budget report will be in November or December, but I stand by the fact that the Government's record has been good and better than that of any independent forecaster.
Companies (Audit, Investigations and Community Enterprise) (Northern Ireland) Order 2005
3.20 pm
The Lord President of the Council (Baroness Amos): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the draft order be referred to a Grand Committee.—(Baroness Amos.)
Lord Tordoff: My Lords, I hesitate to intervene, but I see that the order is to be referred to a Grand Committee. In that case, it will presumably be possible to table amendments, but it is not possible to table amendments to orders. There is confusion and we ought to sort it out. The Procedure Committee should have yet another look at the matter, because the order is not being referred to a Grand Committee, but to the House sitting in the Moses Room or some other place off the Floor of the House.
Baroness Amos: My Lords, we have discussed the issue before. It is a shorthand way of identifying the location.
Lord Tordoff: My Lords, it may be a shorthand way, but it is wrong.
Baroness Amos: My Lords, I am happy for a committee to take the matter away and look at it again, but it is what has been agreed by the usual channels.
On Question, Motion agreed to.
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Charities Bill [HL]
3.21 pm
Lord Bassam of Brighton: My Lords, on behalf of my noble friend Lady Scotland of Asthal, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Bassam of Brighton.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 2 [Meaning of "charitable purpose"]:
Lord Craig of Radley moved Amendment No. 1:
"(za) the advancement of the effectiveness and welfare of the armed forces of the Crown;"
The noble and gallant Lord said: In moving Amendment No. 1, I shall speak also to Amendment No. 9, which is grouped with it. I thank the noble Lord, Lord Phillips of Sudbury, for adding his name to my Amendment No. 1.
The Minister and other noble Lords who participated in the Grand Committee on the earlier Bill will recognise the thrust, if not the precise wording, of my first amendment. Taking advantage of earlier comments from noble Lords on my amendment to the earlier Bill, I have dropped "efficiency", which is used in the excepting SI 1056 of 1965, and used instead,
I hope that that formulation will appeal to those Members of the Committee who criticised the use of "efficiency". Some said that it was a rather nasty little word; others objected on the grounds that it caused confusion with military efficiency, which is clearly a matter for government to underwrite. The detailed drafting apart, I shall remind the Committee why I think that this addition to the descriptive charitable purposes in Clause 2 is important.
The Bill is a new beginning for charities. It specifically removes the presumption that currently exists—that bodies advancing religion and education or relieving poverty benefit the public. No mention is made of charitable military connections, although those, like education and religion, owe that status to the 1601 Act. I asked at Second Reading whether the omission was important to, or had a bearing on, the public benefit presumption for Armed Forces funds. I have not yet had a response. My two amendments seek to address this omission.
As noble Lords are aware, my concern is primarily for the 15,000 or so service non-public funds—SNPFs—which have been grouped as excepted charities. I shall not repeat what I said at Second Reading and in Grand Committee about the spread of activities covered or the value to servicemen and women of these funds. For
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decades they have had charitable status as advancing the efficiency—now I shall say effectiveness—and welfare of the Armed Forces of the Crown.
The Minister and other Ministers have told me that these SNPFs will neither lose their charitable status nor their present tax advantages as a result of this new legislation. Ministers have pointed to subsection (4) and to the catch-all subsection (2)(l), which says that everything now recognised as having a charitable purpose will continue to do so. So, they say, SNPFs are covered. However, that is just for the charitable purpose test. What about the public benefit test? Ministers can give no assurance about that. It will be for the Charity Commission, not the Government, to adjudicate on public benefit.
The Charity Commission's commentary on the description of charitable purposes in the Charities Bill confirms in paragraph 36:
"The defence of the realm . . . such as . . . promoting the efficiency of the armed and emergency services"
remain a charitable purpose. Some may argue that that is good enough to safeguard SNPFs. But that is not the same as having it on the face of the Bill. Others, even the Charity Commission, may find it hard to reconcile the broad sweep and intricacies of the public benefit tests for every charitable SNPF. That possibility could arise. Optimistically, I hope that this would not be the case today. But this legislation will stand for years. Views or public perceptions could change.
Specifically, on Amendment No. 1, why, I ask myself, are the Government so averse to listing any purpose that is so closely tied to the defence of the realm, surely the prime responsibility of any government? The Minister said that the list is designed to include,
"best established and recognisable charitable purposes, but is short enough to be a memorable list".—[Official Report, 3/2/05; col. GC 36.]
I do not find that a very convincing case for ignoring the armed services and their contribution to the defence of the realm.
In summary, my case for my first amendment is that it specifies purposes directly related to the defence of the realm. Because the Bill is a new beginning for recognising charitable status, it is right to include the military charitable purposes. If it is there on the face of the Bill, it will carry forward in legislation the original military concepts of the 1601 Act, from which, given their assurances, Ministers are not attempting to resile. Let them agree this amendment as an earnest to that position, and to help to underwrite the public benefit test that the Charity Commission will set.
Turning to Amendment No. 9, I have already explained my concern that there is no guarantee in this Bill that SNPFs, which presently enjoy charity status, will continue to do so under the additional concept of a public benefit test. In the round, if it is argued that any of the 15,000 SNPFs, by advancing the efficiency of any of the Armed Forces of the Crown, thereby meet the public benefit test, then I shall, of course, be content.
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Ministers infer that the Charity Commission would invariably agree that there is a public benefit for all SNPFs with an eligible charitable purpose. But reading the Charity Commission's views on public benefit tests, particularly its thinking about the judgments that will be called for on identifying a direct or indirect public benefit—the number of members of a particular trust, and so on—I wondered if it might not be better to avoid a possible difficulty rather than deal with it post-legislation, by statutory instrument. Other amendments are intended to tighten the public benefit test for a whole variety of reasons. The commission itself says that perceptions of public benefit can change over time. At some future date, SNPFs may find that they are caught in the adjustments to the definition of the public benefit test.
I am taking it as common ground in the Committee that service non-public funds merit passing the public benefit test. Amendment No. 9, which also relies on the agreement of my previous amendment, would achieve that. I beg to move.
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