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Charities Bill [Lords]

I shall come to that, and I have a point or two to put to my hon. Friend the Minister about it. First, however, let me quote another part of Mr. Jonathan Shepherd’s letter. He wrote"““indirect public benefit is not enough on its own: there must be direct benefit to the public or to a significant section of it.””" So we are all agreed. The Government agree; I think that now, under its new leadership, the Charity Commission agrees; and the Independent Schools Council agrees. The problem is that persuading the sort of recalcitrant school that the hon. Gentleman has identified, or for that matter a recalcitrant private sector hospital—I have to say that there is more than a handful of them if the evidence given to the joint Committee is anything to go by—persuading, that is, the recalcitrant few rather than the noble many, to demonstrate direct and public benefit in exchange for the advantages that they gain from charitable status, requires any test to be clear and understandable to all concerned. At present I am not convinced that the test is clear and understandable, and I am sure that that is what led my hon. Friend the Member for Selby to table his amendment. The problem with the amendment is that in seeking to introduce clarification, it risks causing more confusion. Although my hon. Friend cited parallel Scottish law, the wording of his amendment is subtly but significantly different from the form of words used in Scotland. The new charity law there refers to the need to ensure that charities are not ““unduly restrictive”” in the way in which they guarantee public benefit, so allowing a balanced consideration of benefits against disbenefits. The amendment, however, refers to ““any undue restriction””, which I think would make such a balanced judgment more difficult to achieve. Indeed, I should be surprised if that wording did not cause a learning disability charity that none the less charged for its services to find itself failing the public benefit test, thereby risking the loss of its charitable status. I am sure that my hon. Friend would not want ambiguous wording to produce such a result. I do not believe that my hon. Friend’s amendment does the trick. My hon. Friend the Minister has moved the Bill forward substantially, but although the proposal to review the operation of the law after three years rather than five is welcome, I do not think that it does the trick either. To me it seems rather like closing the stable door after the horse has bolted. The Bill gives us an opportunity to deal with charity law. My hon. Friend is right: it is a once-in-a-generation opportunity. It is a rare event for charity law to be changed by Parliament—I believe that the last occasion was 15 years ago, and the penultimate occasion was probably 20 years before that—and unless my hon. Friend knows something that I do not know about proposals for legislative changes in the future, I should be surprised if we are given another crack of the whip in the imminent future. So we need to get the public benefit provision right now. That is what led the Joint Committee to conclude that"““while a detailed statutory definition of public benefit would be too inflexible, nonetheless there is a need for a more explicit definition of public benefit in connection with the Bill””." And of course clause 4 requires the Charity Commission to issue guidance for that purpose. The problem is that we do not have the guidance before us today, so it is difficult for the House to know exactly what it is being asked to support. Indeed, I was struck by an article by Dame Suzi Leather, the new chair of the Charity Commission, in The Guardian last week in which she argued that the public benefit test was a ““slippery concept””. That is not to say that, having spoken to Dame Suzi, I am in any doubt about her determination to see the public benefit test applied vigorously—a view that the National Council for Voluntary Organisations interestingly now shares, as my hon. Friend the Minister knows. Indeed she says in her article that fee-charging charities could be expected"““to assess and report the value of the tangible benefits they bring as well as the value of their tax breaks.””" I welcome that. It is a significant step towards clarity in how the public benefit test will be applied, but there is many a slip twixt cup and lip, as the House knows. That is why I hope that my hon. Friend the Minister, in replying to the debate, can give a very clear indication as to whether he agrees with Dame Suzi’s proposal and how, more generally, he expects public benefit to operate in practice. Short of a Government amendment, which we do not have, it is important for the Minister to put the Government’s intention on the record, not least so that the Charity Commission and the courts are left in no doubt that public benefit is intended to be direct and meaningful. If he can do that, he can kill several birds with one stone. First, he will bring clarity and certainty—important for the whole sector, which we want to grow—to a vital modernisation of charity law. Secondly, that could help to foster more real partnerships between the public and the private sector in health and education, for the benefit of both patients and pupils. Thirdly, he will be able to offer many of us the assurances that we need to give our wholehearted support to this part of the Bill, just as we already do to the rest of it. This is a good Bill, which is long overdue. The introduction of a public benefit test is a very good thing, which will make a profound difference to the operation of the charitable sector. I welcome what the Minister and my right hon. Friend the Chancellor of the Duchy of Lancaster have done thus far; I just ask them to go that one little bit further.