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Charities Bill

I must declare some non-pecuniary interests, as a member of the Institute of Fundraising, a patron or friend of various local charities in Gloucestershire, and a trustee of the UK’s leading blindness research charity, Fight for Sight. That is not the first plug we have had for a very worthwhile charity in this debate and I am sure that it will not be the last. I also welcome the new ministerial team and congratulate them on bringing this Bill before us after so long a wait. Credit is also due to the right hon. Member for Darlington (Mr. Milburn), my hon. Friend the Member for Colchester (Bob Russell) and the hon. Member for Sutton Coldfield (Mr. Mitchell), who contributed to the long periods of effective scrutiny and the welcome degree of consensus that has been achieved—at least, until today—although I cannot go along with the rather extreme penalties, such as beheading, that the right hon. Member appeared to recommend for some of the dissenters. In any event, I pay tribute to the Joint Committee’s work. This Bill has been so long in preparation that I remember briefing voluntary sector colleagues on the new Charities Bill that I thought was to become law imminently long before I was even a candidate for Parliament, let alone an MP. Now that we are finally debating it in the Commons, I hope that with the help of a sufficiently brisk and efficient Committee stage, we might just see it complete its passage before the summer recess. There will certainly be groans of disappointment from my former colleagues if we allow it to be delayed by another three months. However, all credit to the ministerial team for having rescued it from the long grass at all. To extend the horticultural analogy, Ministers have entered an area of public policy that is like a huge garden, worth billions of pounds in income, as the Minister said, and which employs 600,000 people, according to the National Council for Voluntary Organisations. It is a garden in which Ministers are just visiting gardeners, and they would do well to tread carefully. The garden has diverse species of many colours and sizes. It has plants as different in size, function and characteristics as daisies and oak trees: from Cancer Research UK, with its £240 million income and huge marketing budget, to wonderful but hard-pressed charities in my constituency, such as Cheltenham Open Door and Cheltenham Community Projects; from democratic membership organisations with large volunteer bases to highly specialist trusts; and from charities that only sell Christmas cards to important service providers whose fees pay for the education, care and support of large numbers of the most vulnerable in our society. This Bill must look after the interests of them all. If left unattended, the garden will not wither—probably quite the reverse—but weeds will creep in, often looking pretty at first, but threatening the future reputation of the whole. However, if the garden is cultivated and nurtured, it will flourish, grow and produce enormous benefits for us all. With this Bill, the Government show every sign of not charging in with a mechanical digger, as they have in a few other areas of legislation and policy. The careful and consultative approach has brought them the overwhelming support of the voluntary sector, and I am pleased to say that the Bill continues to enjoy the full support of the Liberal Democrats, too. There are many benefits of a new Charities Bill. I highlighted them to my colleagues all those years ago, and I still commend them to the House today. They include many of the practical steps that the Minister outlined, which will make easier the roles of trustees, finance directors, company secretaries, and treasurers in particular. I am sure that those measures will be much appreciated. We all have delicate balances to strike between the voluntary foundation of the best charities and the professionalism demanded of them in today’s risk-averse world, and between the need to regulate and avoid the misuse of publicly donated funds and the risk of over-burdensome red tape. Public opinion will punish us either way if we get those balances wrong. Public opinion is also a strong factor in the Bill’s fundraising provisions, which we might have expected to be more contentious. However, I am pleased that the Institute of Fundraising fully supports them as proportionate and equitable. As a paid-up member still, I shall follow my institute’s lead in the hope that the provisions do not impact unduly on the income of national charities or increase too much the bureaucracy with which they have to deal. I was a little upset by the Minister’s reference to chugging. I do not know whether she knows this, but it is short for charity mugging. It is an insulting reference to hard-working paid and unpaid charity fundraisers, and I hope that she will avoid it in future. From fundraising to campaigning, the new heads of charity recognise among other things the importance of what might be called campaigning functions, such as the prevention as well as the relief of poverty, the advancement of human rights and the promotion of religious or racial harmony, equality and diversity. That is in line with previous Cabinet Office policy advice that charities should not keep the experience of their front-line work to themselves, but should be encouraged to share it with legislators and decision makers such as ourselves, and, where appropriate, campaign for change. It is right that we no longer ask charities to witness poverty, injustice, ill health or cruelty, but not to speak out about the fundamental causes of those ills. To put my point into new Labour-speak, the direction of travel is broadly good. However, I agree with the hon. Member for Stroud (Mr. Drew), who is no longer in the Chamber, that the Bill, perhaps out of necessity because it is not a Finance Bill, leaves out a big issue—VAT. The Minister was worried that including such a provision would mean a bill for half a billion pounds, but that is exactly the bill faced by charities at present because VAT is not recoverable. We cannot address that question in this debate but we might find a way of doing so in Committee, perhaps through the reporting measures proposed in part 4—no spending commitment implied. The new heads of charity will provide a level playing field as between the educational, religious and poverty charities, mentioned by the hon. Member for Isle of Wight (Mr. Turner), which did not previously have to pass a public benefit test under various Charities Acts, and the vast number of organisations that had to pass such a test. They range from St. John Ambulance, which saves lives in local communities, to Survival International, which works for the rights of tribal peoples around the world. It is right, as Lord Hodgson of Astley Abbotts said, that"““all charities should have to meet a public benefit test, no matter what their purposes””.—[Official Report, House of Lords, 28 June 2005; Vol. 673, c. 154.]" The question of whether we should add clarification and guidance to the Bill’s provisions on public benefit is already generating a lot of hot air outside this place. On the one hand, the Independent Schools Council is lobbying hard against any strengthening of the public benefit test, and schools such as Fettes college in Scotland are talking about the ““politics of envy””. On the other side, a former aide to Cherie Booth, writing in The Guardian this weekend, predicted ““class war”” headlines. So far, so unhelpful. Today, we witnessed the astonishing spectacle of the official Conservative spokesman setting out in the House of Commons an even more reactionary position than the one advocated by his noble Friends in another place. In effect, he argued for the insertion of a special status that would require a public benefit test of St. John Ambulance but not of Eton college. That is an astonishing position. I do not know whether the Leader of the Opposition is aware of what his hon. Friend is proposing, but it does not sound like the new model Conservative party to me. The Minister gave reassuring responses to various interventions about the bodies and organisations that would not be affected by the Bill’s public benefit test, but as the right hon. Member for Darlington said, it would seem desirable that such brave new legislation should make some kind of difference to somebody in terms of the public benefit test. I shall, therefore, clarify the Liberal Democrat position, which has been consistent throughout the Bill’s long history. Along with the NCVO and the Charity Commission in some of its guidance, we believe that the current public benefit test leaves the law in a muddle and that the Bill needs to be strengthened in that respect. I draw the attention of Members to the comments signed by Stuart Etherington of the NCVO, David Harker of Citizens Advice, Michael Lake of Help the Aged and John Low of the Royal National Institute for Deaf People. They say:"““Clarity is vital if we are to secure a level playing field for all charities operating today and for others being formed. If the public believes access to a charity’s services is unduly restricted because of high fees, or for any other reason, the case for charity will be undermined. We hope that MPs will support our call for clarity and put this vital question beyond doubt.””" The Bill does not yet do that. An interesting new law has been passed in Scotland. Adopting its terminology, which was supported by Labour and Liberal Democrat Ministers north of the border, would seem to have much to commend it, not least the obvious advantage of consistency. That is not compulsory, but it is clearly desirable for charities that operate both north and south of the border. The ISC is simultaneously lobbying against such clarification and advising its members on how to respond to the tightening of the law on public benefit. Its 2005 briefing on the subject stated:"““Schools should, therefore, be fully prepared to demonstrate public benefit as early as possible, and not later than the autumn of 2007. ISC advice for the past year has consistently been that schools should audit the public benefit they provide, and should be prepared to think imaginatively of ways of extending public benefit.””" I could not put it better myself—exactly the outcome that Liberal Democrats seek. Today, I consulted Tim Hastie-Smith, the headmaster of Dean Close school, an independent school in my constituency, who told me that"““schools are big money-making ventures whether they like it or not. How can we look the public in the face as charities unless we are doing things that are obviously charitable in their intent?””" Before the Minister nods too much, I should tell her that Mr. Hastie-Smith told me that he supported strengthening the public benefit test and thought that Dean Close school had nothing to fear from it. I suspect that the hon. Member for Buckingham (John Bercow), who is also no longer in his place, might even support that, judging by the sentiment of his intervention. Having enjoyed Dean Close’s excellent theatre facilities—not because I pay fees, but as the parent of a local four-year-old in a wonderful community-based dance production—I fully understand Mr. Hastie-Smith’s confidence. He also cited the example of Christ’s Hospital, which has the kind of endowment fund that the Charity Commission might rightly look twice at in any charity, but which has such a good record of charitable activity that it too would be at no risk from a reasonable public benefit test of the kind that we would support.