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Charities Bill [HL]

My Lords, the effect of Amendment No. 14 would be that permanent endowment land held on trust to be used for the purposes of the charity would fall within the scope of the new power set out in Clause 43 to permit unincorporated charities to spend capital in certain circumstances. That, if I understand rightly, is the purpose of the amendment moved by the noble Lord, Lord Hodgson. It would facilitate the use of capital proceeds of sale of such land without the need for it to be recouped out of the future income of the charity. I believe that that is also the intention behind the amendment tabled by the noble Lord, Lord Phillips. He seeks, in the circumstances set out in his amendment, to permit the expenditure of proceeds of the sale of land in some cases. This would be when the land was held on trust, when it is stipulated that it is to be used for the purposes of the charity, and when the land is surplus to current foreseeable needs, when the purposes of the charity could be more effectively carried out and the proceeds used to purchase land or erect buildings which are to be used for the purposes of charity, and when the buildings are to be erected by a qualified architect who has certified that the proposed buildings have an expected life of not less than 75 years. We do not believe it right to override that stipulation, when trusts on land which is held specifically set out that land is to be used for the purposes of the charity. That remains our position. Having said that, in recognition of some of the concerns that have been expressed, the commission has told me that it will carry out a fundamental review of its interpretation of the law on practice when it exercises its discretion whether to require recoupment. That review will also cover the principles governing the circumstances of recoupment in any particular case. In particular, the commission assures me that it will consider whether an apportionment of the value of sales proceeds between the value of the land and the value of the buildings, the latter only requiring recoupment, may be appropriate. It will also consider whether in the provision of substantial buildings lasting, say, over 75 years, and when the proceeds may be surplus to the charity’s reasonable requirements, any recoupment may be necessary at all. There may be other factors as well, but the commission has assured me that it will carry out a review, which it hopes to complete in the next few months. I believe that these matters are best dealt with by the commission on a case-by-case basis, given the different circumstances that apply to each charity that may be affected. It is not best dealt with by statutory intervention—and I think that the noble Lord, Lord Hodgson probably agrees with that from the hint that he gave in his earlier comments on what he expected out of our discussion of these amendments. I reassure the House that the commission has recognised the issue and will review it. I hope that, having heard that, the noble Lords will feel able to withdraw, or not move, their valuable amendments—valuable because they focus on a genuine issue—and that we can proceed in that way, as it would be a more constructive approach.