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Planning Bill

My Lords, I shall speak to my three amendments in this group. I have no wish to repeat the arguments that I set out in previous stages of the Bill. It has been proven again and again that charities deliver public benefit, including benefit that comes within the definition of community infrastructure, at far better value that any public administration can, usually because of the voluntary input of labour and the localised nature of many charities. The idea of raising money in any form from charities to be spent by the public sector is a negative benefit for society. For the Treasury to be shy about giving a total exemption for charities is short-sighted. My second general point is that the charitable sector is already very heavily regulated, with no room for manoeuvre for charities outside their charitable purposes and with every aspect of their business having to be explained to and audited by the Charity Commission. I cannot believe that there is any room for underhand dealings—certainly nothing that any extra regulation or control can do to make a ha’p’orth of difference in this field, apart from causing all charities, especially the very small ones, unnecessary extra costs in the form of lawyers and accountants to comply with an extra layer of unnecessary regulation. Lastly, before turning to our amendments, as we have progressed through the Bill’s stages and watched the Government's prevarication on the simple question of a clear—I mean clear—exemption for charities in the Bill, I have become more certain that under no circumstances should we leave anything to chance in the form of secondary regulations in which, subject to Amendment No. 27, this House will play no part. I do not say that in any way as an attack on the noble Baroness, because I know that she has been working very hard on our behalf with the powers that be. I add my praise to her to that which has already come from other Members of the House for her general ability throughout the Bill to listen to what the House has had to say, to amend and to reach an accommodation with the views expressed from all quarters of this House. As has already been said, she deserves her place in history. That does not undermine my point about the general government prevarication in getting exemption for charities into the Bill. On Amendment No. 19, in conversation with the Bill team, I discussed the restrictive nature of subsection (1)(b), referred to by the noble Lord, Lord Shutt: the difference between charities that may own investments as opposed to property. When I explained my dismay at the change of tack that seemed to be taking place compared to other tax exemptions and the disadvantage that charities that owned property would have in this case, I was told that my concerns could be catered for under subsection (2)(a). I immediately jumped on the word ““could”” because, at the moment, that is all that subsection (2)(a) promises. Actually, it promises endless hours of expensive individual negotiations—hence the rationale behind Amendment No. 19. I add in passing that even with the amendments tabled to subsection (3), the regulators are still left with a huge degree of flexibility regarding subsection (2) charities, even if ““may”” is turned to ““must”” with reference to subsection (2). On Amendment No. 21, at Report, we were pushing for a total withdrawal of subsection (3), because as it stands it undermines the certainty that we sought in both subsection (1) and subsection (2). However, following the response of the noble Baroness on Wednesday and her subsequent letters, we are prepared to agree a compromise and to allow subsection (3) to refer to subsection (2) only, but not subsection (1) charities, as defined in subsection (4). That is our bottom line. It is a good compromise between our position and the Government's position. Even with the new government amendment, subsection (3) as proposed seems for the first time to bring conditionality into charity legislation. As I said, we can understand why DCLG wants to impose conditions on institutions to be exempted under subsection (2), especially Scots, Northern Irish and EU charities, because their charity law is different from that of England and Wales, but under statute and common law in England, a charity is a charity is a charity. We certainly do not want any additional test of public good or public benefit beyond that already set out in the Charities Act 2006, especially if that test is being set by people who are either from central government, in the form of the regulators, or from local government, in the form of local authorities—people who are without experience in the sector. I believe that would be totally invidious. Charities in England are already regulated by charity law, company law, Her Majesty’s Revenue and Customs in respect of tax, and also the common law of trust. Subsection (3) appears to impose another layer of regulation on a sector that is already incredibly heavily regulated. I am sure there are ways of cheating the system but they are frankly fairly unlikely. I do not believe another set of rules is going to change that. If a subsection (1) charity develops property, it is impossible to extract any profit from that charity as all dispositions of land, where there is a change of purpose for that land, have to go to the Charity Commission for clearance. The Charity Commission audits the transaction and follows the money. The Minister has said she is worried that any concession in this area might engage the EU state aid rules. She has argued that subsection (3) is there not just as an anti-avoidance provision but because of state aids. We can see why that might be needed for subsection (2) but not for subsection (1). Charities cannot normally trade except where it is primary purpose trading so the state aid rules are much less likely to be applicable because there is unlikely to be any cross-border distortion of competition between suppliers of a service which is undertaken as a primary purpose of a charity. As I have said many times before, and we have consulted various top lawyers on this, we regard this state-aid distraction as little more than UK gold-plating. Amendment No. 25 follows on logically from Amendment No. 21 and the acceptance of one, with or without a vote, implies acceptance of the other. Amendment No. 25 is really only a clarifying drafting point. The department admits that subsection (5) is only intended to apply to institutions exempted under subsection (2). Some lawyers have claimed that the semi-colon in the middle could be interpreted as indicating that the second half refers to both subsections (1) and (2). Our amendment merely removes all element of doubt. It is clarifying and also it succeeds or fails along with Amendment No. 21. Finally, I repeat that the acceptance of our Amendment No. 21 is the bottom line for the charity sector. There is enormous support, inside and outside both ends of the Palace of Westminster, for unequivocal exemption for registered charities. The longer certain parts of the Government have prevaricated on this Bill, the more convinced I have become that we need our Amendment No. 21.