Clause 72
Charities Bill [Lords]
1:15 pm
Martin Horwood (Shadow Minister (Environment), Environment, Food & Rural Affairs; Cheltenham, Liberal Democrat)
The Minister may not realise the opportunity that he is missing with this amendment.
The clause obliges the Minister to report on the operation of the Act not later than in five years’ time, but some of the conditions and changes to charity law that we have been discussing, may have immediate implications for charities and change the way in which charity registration happens. They might also change and even challenge the effectiveness of the Charity Commission. It is therefore important that we have an annual review of the sector’s operation.
The implications for the sector are wider than simply the provisions in the clauses that we have discussed in this Committee. The relationship between the Government and the private and voluntary sectors in terms of the delivery of services and public policy objectives is a legitimate subject for regular review. Review does take place, but on a piecemeal basis, together with occasional debates on volunteering in Westminster Hall and ministerial speeches on particular projects. It would therefore be valuable to have a well rounded and concentrated report each year. The members of the Committee are extremely well informed on the third sector, but we may be in a minority among our colleagues in terms of a real knowledge of the way in which the sector is operating.
As I have said in the amendment, reviewing the changes in the number of registered charities—whether that number is rising or falling—may reveal trends resulting from the changes to charity registration in the Bill. The number of organisations that have failed to attain or to retain charitable status is clearly relevant to the changed arrangements in relation to the new heads of charity and the public benefit test. There are differing views on the public benefit test—whether it represents a continuation of the status quo, as the Government believe, or operates tighter guidance, as I would wish, or offers a privileged position to private schools, as the hon. Member for Isle of Wight and his colleagues would prefer. Those matters should be discussed and any legitimate concerns about the operation of the public benefit test could then be revealed sooner rather than later.
We could discuss the total value of gift aid and other special tax provisions for charities in that year. That would provide an opportunity for the Parliamentary Secretary to parade the extraordinary generosity of Government towards charities in the form of the various tax breaks and concessions that it offers to them. However, in fairness, the report should also include the total net cost of value added tax to registered charities. The amount that it costs the many charities that are not able to recover VAT because they do not sell anything is a matter of concern in the sector. That is, in effect, a tax on charities, which those of us who are sympathetic to the third sector ought to be lobbying our respective Treasury teams to tackle through amended policies. The review that I propose would offer an opportunity for the issue to be discussed in Parliament in a cool-headed, rational and well informed way.
Finally, a report on the number and value of central Government contracts placed with registered charities in the relevant year would help to illustrate the developing relationship between charity, the private sector and the Government.
The amendment is balanced and reasonable, and would introduce a welcome opportunity for Parliament to discuss the values and development of the third sector in a well informed way.