With this it will be convenient to discuss amendment No. 1, in page 3, line 23, at end insert—
'(2A) In determining whether that requirement is satisfied in relation to any such purpose, consideration must be given to the effect of placing any undue restriction on obtaining that benefit.'.
I begin by apologising to Members who expected my right hon. Friend Miss Widdecombe to speak to the amendment. I am sure that if she catches your eye, Mr. Deputy Speaker, she will have the opportunity to speak, but I acknowledge that many Members would have preferred her to do so now.
There are two purposes only to the amendment, and both encompass the removal from the Bill of the presumption that the advancement of religion is a charitable activity. The first purpose, raised by some of my right hon. and hon. Friends, is to question whether the Charity Commission is willing or able to apply the right public benefit test to religions. The second is to ask whether it is possible for certain religions to pass that test.
In Committee, we discussed three different activities in the same debate: education, the relief of poverty and the advancement of religion. Under the Bill, each of those activities loses the presumption of public benefit. It was accepted that the public benefit test varies from group to group. Despite the fact that all those activities have enjoyed the presumption of public benefit, some charities have none the less had to demonstrate public benefit, so public benefit tests vary from group to group. This debate will give us the opportunity to concentrate solely on religion.
In Committee, I said:
"I am told that...it is not those who engage in religious practices who are the public who benefit; the public benefit is the benefit that they bring to society by rubbing shoulders with those who do not so engage...people who engage in religious practices are presumed to become more moral and altruistic as a result, so the public at large benefit when they mix with such people."—[ Official Report, Standing Committee A,
"all charities will have to show that they are for the public benefit...an organisation will have to show that it generates identifiable benefits that reach...a sufficiently large section of the public."—[ Hansard, 26 June 2006; Vol. 448, c. 25.]
My concern is that some charities will find it very difficult to demonstrate that.
Does my hon. Friend agree that the good works done by many religious groups depend greatly on their belief? The change would certainly endanger that activity, and could perhaps stop some of the wonderful work being done by our Churches, synagogues, temples, and other religious groups?
Mr. Scott referred to wonderful work, but that is presumably work that is wonderful for people other than the people who hold the beliefs, so that proves the exact point against which he is trying to argue.
Such wonderful work is indeed being done, but not all religious charities undertake it. Some religious charities pray, and that is the key: how can it be demonstrated that prayer is of public benefit? I find it difficult to understand how, rationally, in the face of a reasonably sceptical, but not hostile, group of charity commissioners, a religious organisation that prays can demonstrate that prayer has public benefit.
The hon. Gentleman used the word "pray", but he did not spell it for us. Would he not accept that there are some people and organisations that prey, and that a distinction must therefore be made between them and organisations that pray? The common-sense approach would be to allow the Charity Commission to consider the question of public benefit.
Curiously, I think that the right hon. Gentleman is wrong. There are of course some who prey. The Scientologists, for example, have not crept through the current definition. They do not count as a charity under the current law, under which religions enjoy the presumption of charitable status. I do not think, therefore, that the fact that some charities may prey is sufficient argument.
I am sure that before the hon. Gentleman moves on he would want to clear up for the House the fact that praying—that is, prayer—is a wonderful activity and is helpful to society at large. I am sure that he would not wish to demur from that point.
My hon. Friend believes that, I believe that and my right hon. Friend the Member for Maidstone and The Weald believes that; I am sure that many right hon. and hon. Members believe it. The question is how that belief can be translated into proof that will satisfy a reasonably sceptical audience, and the charity commissioners may in this context be regarded as a reasonably sceptical audience. I want an answer to that very simple question, and if I get an answer to that very simple question I am likely to be satisfied.
The question whether prayer has benefit in respect of medical treatment has been put to the test in a series of trials—of varying quality, it must be said—and the overall analysis is that there is no significant difference in the prayed-for group and the non-prayed-for group of patients recovering from an operation, regardless of whether they knew that they were being prayed for. If anything, there was a finding, which was not significant, that the prayed-for group did worse. So it can be tested objectively, and so far, at least in that field, there has been found to be no benefit to others, although of course it may help the pray-ers.
I am grateful to the hon. Gentleman, because what he has said is the exact opposite of what Helen Goodman, who is not in her place, said in Committee. She said that although prayer does not affect people's propensity to illness, it does improve their recovery rates. The fact that those two completely contrary opinions are held by two perfectly respectable hon. Members illustrates how difficult it will be to demonstrate to the satisfaction of the reasonably sceptical audience that prayer is of benefit.
Does my hon. Friend agree that people in hospital who have the benefit of the hospital chaplaincy service are emotionally comforted by knowing that they are being prayed for? All of us who are churchgoers will know that, most weeks, we shall be asked to pray for individuals who are known to be ill or in distress of some sort, and those individuals derive a very definite benefit from knowing that they are being prayed for; it is an emotional support.
I am grateful to my hon. Friend. I am sure that people do enjoy emotional and perhaps physical benefit from being prayed for. The difficulty is that some people will not know that they are being prayed for—by a closed order, for example—and it is impossible for us, or the Charity Commission, to test the quality of that prayer. The quality of the prayer might have been poor in the case that Dr. Harris cited.
I think that the hon. Gentleman is fundamentally misunderstanding the current status of religion in charity law. Prayer of itself, even under the current presumption, does not qualify a religious charity for charitable status. That is why closed orders are not currently charitable. There is only a presumption of public benefit; in some cases it still has to be proved. So, in restoring the current status he would not be allowing religious charities that only pray to achieve charitable status anyway.
The hon. Gentleman demonstrates that even under the current legislation there is only a presumption. The presumption that we wish to restore is a first step; it is not an open door. It is a presumption. It is rebuttable. If reasonable efforts are made to rebut it, the Charity Commission will, as it did in the case of Scientology, refuse or withdraw charitable status.
I am extremely grateful to my hon. Friend for giving way. Has he any evidence at all that the current workings of the law have caused any difficulty that would be remedied by simply removing the presumption?
No, I have not got any such evidence. I have given the example—there are others—of organisations that have been excluded from charitable status because of the way in which they behave. There are other arguments relating to the Charity Commission's interpretative paper—shall I say—on how it might exercise its discretion. The position paper "Public Benefit: the Charity Commission's approach" is secular in tone and states that public benefit must be assessed
"in the light of modern conditions" and that keeping up with "modern society" is required if a charity is not to have its charitable status revoked. Some religions are quite concerned because they are trying to advance a better world than modern society. If they are to keep up with modern society, in many cases that will mean that they are not to aspire to a higher level, but to descend to a lower level than the ideal.
I have been given the example of a Muslim group that may oppose abortion on the grounds of Islamic teaching. There is also the example of the Scottish chairman of the Muslim Council of Britain being forced out of office in the Scottish Council for Voluntary Organisations because he stated orthodox Muslim views on sexual morality. I am concerned that those modern interpretations will be embraced by the Charity Commission and used as a means of reducing the accessibility of religious organisations to charitable status.
I missed "Thought for the Day", which I rather enjoy, this morning, but I feel that I have more than made up for it by listening to some of the interesting contributions over the past half an hour. I am inspired by the Prime Minister's assertion that we are best when we are boldest and it is in that spirit that I want to discuss amendment No. 1. I always think that having tabled amendment No. 1 shows a certain keenness. Together with various progressively minded colleagues in the House, I tabled the amendment in July. I cannot say that I have checked the wording with No. 10, but, in a modest sort of way, it is in the audacious spirit that the Prime Minister calls on his Ministers to display.
The amendment does not attempt to define public benefit; it merely attempts to ensure a robust application of that test of public benefit by the Charity Commission. For the first time, it would give the Charity Commission a statutory base to consider questions of access to public benefit, undue restrictions, and charges—in some cases fairly high charges—made by charities in return for their services. The supporters of the amendment are not trying to say that, for example, independent schools should not be able to claim charitable status. We are saying, as I said on Second Reading, and as we say in Yorkshire, "You shouldn't get summat for nowt." The value that independent schools, for example, get from their charitable status is £100 million. We would just like the Charity Commission to be able to encourage them to provide more community benefit for that charitable status.
I congratulate the Minister on being open to discussions on the Bill over the summer and the autumn. I think that he will argue, among other things, that the amendment is unnecessary because the sentiments that it upholds are already incorporated in the concept of public benefit and the Charity Commission will be able, for example, to consider questions of undue restrictions. I want to put three points before the House to explain why I am doubtful about that, and then put three questions to the Minister. Perhaps he can help to reassure me on some of those doubts.
First, there is the legal base of charity law. Without detaining the House for long, I think that most lawyers would say that the available case law is pretty sparse. Andrew Phillips, an eminent charity lawyer, wrote a few paragraphs that sum that up:
"As the Charity Commission lawyers know only too well, at the very best the absence of any inclusion in the Bill of wording indicating the scope of the Public Benefit test will leave the Commission in very uncertain legal terrain when they confront, as they surely will, a few unreformed and intransigent charity hospitals and schools.
Unless Parliament remedies that—and a modest amendment will be enough to give the judges clear discretion—the government are spoiling their own reform, which is potentially a valuable one.
The legal reality, in the absence of that, is that the existing, limited case law, particularly Re Resch, leans in favour of an undemanding public interest test, making clear that there is likely to be sufficient public benefit if, for example, a hospital or school relieves the exchequer and alternative state provisions, or indeed if it provides extra facilities for the user."
What about the Charity Commission—the regulator—itself? It has had a slightly ambiguous attitude towards my amendment. Andrew Hind, its chief executive, spoke of a "worrying lack of clarity" in the underlying case law, and he confirmed that phrase to me in a conversation just a couple of weeks ago. Geraldine Peacock, who was chair of the commission, said that overriding any public school's charitable status would not be possible because the Bill would not alter decisions based on case law. However, the new chair of the commission, Dame Suzi Leather, has taken a different approach. She says that she will apply the test robustly and has talked about holding seminars with stakeholders in which there will be a discussion of contemporary social mores, as she puts its, and the way in which public benefit might be defined in the modern day. Although the question of precisely how contemporary social mores would weigh in the balance against the weight of case law was somewhat left hanging in the air at the parliamentary briefing last week, I acknowledge that there are tensions—perhaps creative tensions—in the commission.
What about the voluntary sector? It, too, has taken a somewhat ambiguous position. When the amendment was tabled, Stuart Etherington, chief executive of the National Council for Voluntary Organisations, warmly welcomed it. He said that it would ensure clarity. He said:
"We hope that the government accepts this amendment or comes forward with its own amendment, agreed with the Charity Commission."
Campbell Robb, director of public policy of the NCVO, went further. As late as September, he wrote in Charity Finance that
"the introduction of a clear and meaningful public benefit test is necessary to uphold public trust and confidence in the charity. To this end we would like to see the Bill amended to see clarity around public benefit, especially in areas where high fees are being charged."
Hon. Members should remember the name Campbell Robb because a month later the NCVO issued a more ambiguous press release saying that my amendment might be one way of providing the necessary clarity, but that holding seminars and a review after three years, rather than five years, might be another way. That was released on
Does my hon. Friend not agree that the appointment of Campbell Robb is welcome, given his engagement with hon. Members across the political parties, which has given him an understanding of hon. Members' concerns to take into his new role?
I am sure that Campbell Robb will be a very capable civil servant.
I was in the middle of my list of voluntary organisations, which also included the British Trust for Conservation Volunteers and NCH, the children's charity. Those organisations and many others took a rather different view from the final line of the NCVO.
To answer my right hon. Friend Alun Michael, it is good that civil servants and members and officers of voluntary organisations have close associations with the House and the Government. However, there is a continuing debate in the voluntary sector on how independent of government that sector should be. On reflection, perhaps it was not a good idea that Campbell Robb, director of policy at the NCVO, which at one stage was trying to win concessions from the Government, should already have been on secondment to the Government one day a week. That has started a debate at the NCVO.
To return to the central theme of the hon. Gentleman's amendment, I am having difficulty in deciding what he is addressing. He has spoken about undue restriction as if that referred to charging and the kind of exclusion to which that gives rise. Will he assure me that the amendment would not affect all the various charitable bodies whose work is directed towards particular groups, whether they have worked in a particular trade or are members of a particular religious group, or, in one way or another, are defined in the purposes of the charity?
This is the argument of unintended consequences. It will be the job of the Charity Commission to decide, case by case, whether a charity is worthy of that status. Nothing in my amendment and nothing that is suggested by the Government will take away from that responsibility. Many charities charge high fees, including one that has been mentioned to me, which deals with autistic children. Clearly, such charities provide a public benefit, and the Charity Commission will be able to make that assessment.
The Minister will no doubt argue that undue restriction is inherent in the concept of public benefit, and the Charity Commission can already make such a judgment, but he cannot have it both ways. He cannot argue on the one hand that the concept of public benefit assumes that the Charity Commission is able to weigh these matters, and on the other hand suggest that if the Bill is more explicit, it will lead to unintended consequences.
Having expressed my doubts about my hon. Friend the Minister's position, I shall pose three questions to him, which might help to clarify matters. First, does he agree that the Charity Commission can and should consider matters of undue restriction and level of fees charged when it considers whether a particular charity passes the public benefit test?
Secondly, what sort of public benefit should fee-paying schools, especially independent schools, provide to demonstrate their charitable status? Would a token sharing of playing fields, or even an expansion of scholarships on a selective basis—contemporary social mores in all parties are against an expansion of selection—be enough? Should there not be a real sharing of resources and perhaps of teaching time with the wider community? That was suggested by my right hon. Friend the Secretary of State for Education and Skills in a seminal speech in July, when he told the national youth parliament:
"I want to ensure that private schools work more closely with the state sector, sharing facilities and expertise; with the private schools' greater resources doing much more to improve the life chances of all the children in their community."
Finally, the coalition between the NCVO and the Charity Commission in July, which fairly unambiguously supported the clause, has somewhat fractured. There is now division, with some supporting my hon. Friend and some taking a different view and supporting the amendment. Sometimes the best one can hope for in politics is to live to fight another day. I hope my hon. Friend is right and the public benefit test will be robust, as it is set out in the Bill. If not, I understand that there will be a review in three years. Will the review explicitly cover the issue of undue restriction and whether the Charity Commission has in practice been able to take that into account when making its determinations?
I have two other things to say. I reflect that it may be only once every quarter of a century that the House grapples with charity law and public benefit tests. If the review in three years shows that there is a need to revisit the concept of public benefit, it will require a particularly determined Minister to do that. I received a letter from Christopher Price, who was a Labour MP in the 1970s. He refers to a Commons Select Committee in 1974 that unanimously recommended a robust test of public benefit. The Committee concluded that that recommendation
"accords both with the spirit in which many of our sixteenth century public schools were founded and with a widespread feeling today that charitable activities should not be manifestly devoted to privilege or exclusiveness. We would therefore expect that our new test of 'purposes beneficial to the community' would only admit to charitable status those institutions which manifestly devote the education they provide towards meeting a range of clear educational needs throughout the whole community."
Those sentiments were present in this House 40 years ago.
I hope that my hon. Friend the Minister is right and that I am wrong. I began by mentioning the Prime Minister, who sometimes says that he wishes that he had gone further with particular reforms. I hope that the Minister assumes higher office in future, when I am sure he will introduce many reforms, but I also hope that in years to come he does not reflect on this, his first big ministerial job, which has given him the chance to reform charities law. I heard him speak passionately in Grimsby on the 50th anniversary of Crosland's book, "The Future of Socialism", which touches on charity law and independent schools. When he looks back in years to come, I hope that he does not think, "I wish I had been bolder on that occasion."
I thank my hon. Friend Mr. Turner, who is leading on this Bill from the Front Bench, for adopting my amendment. I hope that he has set a precedent, and that Opposition Front Benchers will always be keen to adopt my amendments.
I am also grateful to my hon. Friend Bob Spink. At one stage, it looked as though I would be trapped with the wonderful ladies of the Berkshire women's institute, and would not be here to move the amendment. My hon. Friend agreed to move it in the absence of an adoption by the Front-Bench spokesman, so I am grateful to him for that, and for the work that he has put in.
Existing law already includes a presumption in favour of religious charities. I am not seeking to introduce something that has never been in the law before, to grant religious charities a privilege that they have never had before or to discriminate in their favour at the expense of everybody else. I am merely seeking to retain in our law something that the Government inexplicably want to remove.
If there were evidence—my hon. Friend the Member for Isle of Wight has already pointed out that there is none—that the part of our law that already makes a presumption in favour of religious charities was not working and was causing difficulty for the Charity Commission, for organised religion or for other charities, I would be much less certain. However, I always work on the principle, "If it ain't broke, don't fix it." That particular presumption has served us for centuries, and I see no reason why it should not continue to do so.
Mr. Meacher challenged my hon. Friend the Member for Isle of Wight about the word "pray" and pointed out that organisations such as—although he did not mention them—the Scientologists pray. Some of the more obscure cults also pray—they prey, too—but they are already excluded under existing law, so the point is a red herring and has nothing to do with amendment No. 126, which simply tries to keep in our law a provision that has served us well and has caused no problems.
I have had to ask myself why on earth the Government or the Charity Commission would want to ditch a law that works perfectly well. The agenda is set out in paragraphs 15, 23 and 24 of the Charity Commission report of January 2005, in which the commission states that public benefit must be assessed
"in the light of modern conditions" and that keeping up with "modern society" is required if a charity is not to have its charitable status revoked. I would suggest that that means that there are already religious charities that would be in danger from the exclusion of the presumption. This is not only about new charities being set up, but existing charities whose status might be revoked.
What exactly are these "modern conditions" and this "modern society" that a charity has to comply with? I do not get the impression that it has anything to do with setting "How Great Thou Art" to rock music. It is far more likely, as my hon. Friend the Member for Isle of Wight said, that modern morals—
In a minute, but not just yet. I will willingly do so when I have finished this section of my speech.
This will be nothing other than the application of modern morals and existing orthodoxy to religion. That is pretty worrying for a charity whose ultimate authority is a 2,000-year-old book—and that is only the New Testament. Many charities are based on much older authority even than that.
I have reason to be sceptical. In the past, I was involved with an application to the Charity Commission for a hospice for babies in the north of the country. It was a very beautiful vision that small, highly disabled children should be able to avail themselves of care in that hospice while their parents obtained respite. Nobody in the world could say that that was not a wonderful idea. The hospice, which was to be funded not by national resources but by charitable donation, was to be run under the auspices of Life, the political wing of which campaigns against abortion. That charitable endeavour, which was, I am pleased to say, ultimately successful, had to go through many hoops to get its status. That alerts me—
If the hon. Gentleman did not understand what I said, I will say it plainly: I will willingly give way when I have come to the end of this section, but not until then.
That alerts me to the fact that the Charity Commission is already heavily influenced by existing moral orthodoxies. If we remove a presumption that is at least some safeguard against that, the prevalence of those existing moral orthodoxies will prejudice applications from some—not all, but some—religious charities. That is the end of my section.
I am extremely grateful to the right hon. Lady for giving way. I have a soft spot for her because she was a generous supporter of Alzheimer's Society events when I was a director of fundraising there—although that soft spot may have just got a little smaller.
I cannot for the life of me find anywhere in the Bill the phrases relating to modern laws that the right hon. Lady mentioned. As has been demonstrated earlier in the debate, the Charity Commission occasionally gets things wrong. I would be alarmed by such phraseology were it in the Bill, but it is not.
As for Life, if the right hon. Lady is worried about charities that have had a role in trying to change legislation, as Life did, the same applies to many other charities such as Oxfam, which has also had some difficulty in fending off the Charity Commission at various times in its history because it was seen to be trying to change legislation. That is an established part of charity case law; it is nothing controversial.
The second part of the hon. Gentleman's remarks is wrong. The proposal that I mentioned was straightforwardly for a babies' hospice. It had nothing to do with the law or changes in it. It was a case of guilt by association. If the Charity Commission is swayed in such a way when a protection is built in, I believe that its removal will enhance that effect, and that religious charities that do not necessarily keep up with "modern society" in some of their teaching will be disadvantaged.
The hon. Gentleman also said that the two phrases that the Charity Commission used do not appear on the face of the Bill. That is true. However, when determining whether the law is right, we need to examine the context in which it has been devised. The two phrases that I cited constituted the Charity Commission's reasoning for wanting to remove the presumption in favour of religious charities. It has stated its reasoning, which Government Front Benchers have never disowned. We should therefore be alert to how the Charity Commission will apply the law if the protection is removed. I do not believe that the commission should be in the business of adjudicating on religious beliefs. Removing the presumption creates the risk that it will do that.
Surely it is sensible, for the avoidance of doubt in case such matters became actionable before the courts or any tribunal, for Parliament to make its intentions explicit. The law is littered with examples of interpretation being left to judges because the will of Parliament has not been made clear. The amendment would make explicit my right hon. Friend's intention—and, hopefully, that of the House—so that there will be no doubt about the matter in future.
Indeed. Although my hon. Friend says that there would be no doubt in future, there is no doubt currently, either. By removing the presumption we create doubt, and the amendment tries to avoid that. My hon. Friend is absolutely right.
I will shortly, but I wish to amble a little further before doing so.
I am worried about the inconsistency of ministerial statements about this matter. If a law or a provision in it that has given no trouble is suddenly removed, Ministers' words become important. On Second Reading, the Parliamentary-Secretary said that removing the presumption of public benefit would "raise the bar" for religious, educational and poverty relief charities. [Interruption.] I see that he disputes that. Let me therefore give him the Hansard reference, which I happen coincidentally to have with me. It is
"religious charities and organisations provide public benefit, and I see no reason why that should change."—[ Official Report, Standing Committee A,
Either the change raises the bar or it does not. Most of us fear that its purpose is to raise the bar.
I have yet to hear a single argument from anyone against maintaining the status quo. It works. It has never been proved to cause any difficulty. There must therefore be a reason for removing it. If one removes a presumption in favour of religious charities, the inevitable implication is that one is trying to make life harder for them.
The right hon. Lady's argument has many holes in it, not least the fact that Life is not a religious organisation but independent of religion. So far, she has not presented a single argument for treating religious charities differently from any others. Why should, for example, someone who sets up an arts organisation have to fulfil a public need requirement when a religious organisation does not?
On the issue involving Life, the hon. Gentleman was not following me closely. I was drawing an analogy with enslavement to prevailing orthodoxy. I am saying that that enslavement would be carried over if the protection that currently exists in law were removed from religious charities. I was drawing an analogy; I was not stating that Life is a religious charity.
Secondly, the hon. Gentleman says that I have not advanced a reason why religion should have special protection. I have not done so because that was admirably done by my hon. Friend the Member for Isle of Wight, when he pointed out that religion is special in its nature and is not always easily testable by direct public benefit criteria. Therefore, to have a presumption in its favour is the right starting point. If it can then be shown that the activities of that charity are undesirable—as was the case with Abu Hamza, for example—under existing law, although the protection is still in place, it can be removed. The argument that we are making is that there should be an existing presumption in its favour, because religion is not easily testable on those criteria.
The right hon. Lady is being very generous in giving way, and I think that we are getting to an important point. Fine art might be intrinsically a good thing, just as religion might be—as she and I agree—intrinsically a good thing. But the point in respect of charity law is whether the state should make provision that makes financial benefit for such organisations. That is the point at which it must be shown that there is some public benefit.
The hon. Gentleman adopts a position that I do not share, as he is arguing this point from a particularly secular view. We have in this country an established Church; we already have a very intense relationship between state and religion. I do not know whether the hon. Gentleman thinks that that is a good or a bad thing—I do not know his views on the subject.
I am aware that the hon. Gentleman was ordained in the Church of England, but he left it for this place, which says a lot about his priorities. Although I must say that I left the Church of England in my own way, as well.
What I was saying to the House, in response to the hon. Gentleman's query, is that it is extremely difficult wholly to divorce state funding from religion in a situation such as that which exists in this country, where there is already an established Church, and there is a long tradition and a lot of law, other than this one, that entwines state and religion.
Can anybody show me one good reason why this provision should be removed—one instance of failure in the application of this benefit? If anybody can show me one good reason for abolishing something that has always worked, and which nobody was worried about until the Charity Commission started waffling on about modern conditions, I might change my mind. But I have heard no good reason, and I believe that there is a great deal to be said in favour of keeping it in our law.
It is always a pleasure to follow Miss Widdecombe in debate. As her contribution and that of my hon. Friend Mr. Grogan have demonstrated, the issue of public benefit goes to the heart of what the Bill is about. The measure under discussion is easily the most significant change made by the legislation, and I also think that it is the most controversial. It is certainly the topic on which the House and the other place have expended most energy during the tortuous progress of the Bill over the past few years. Therefore, it is the issue that demands the greatest clarity.
As the Joint Committee that I chaired to examine the Bill in draft form put it:
"is to protect the charity brand, it is important that any new law on charity must properly deal with the issue of public benefit."
Amendment No. 1, tabled by my hon. Friend the Member for Selby, is an honest attempt to do just that—to clarify what is meant by public benefit in the Bill. However, I do not think that his amendment is right or workable. My hon. Friend the Minister, who has already gone some way toward addressing the concerns not just of Labour Members or Members of this House as a whole, but of both Houses, will need to go a bit further in his concluding remarks. He will need to set out how the Government intend the public benefit test to operate in practice. This is a significant change not just for religion, but for the whole of the charitable sector.
What is not in dispute—among Labour Members, at least—is the positive benefit that accrues from the introduction of such a test. I have to say, with all due respect to Mr. Turner, that I am at a loss to understand what the Opposition's position is on public benefit, having listened at length—I also listened to him at length on Second Reading—to his somewhat tortuous and occasionally toe-curlingly embarrassing attempt to avoid the question of whether the Opposition support the concept. If he gets an opportunity to do so, perhaps he will clarify the Opposition's position. If I may, I shall offer a small piece of political advice. I should have expected a party that nowadays seeks to claim that mantle of modernity—notwithstanding the concerns of the right hon. Member for Maidstone and The Weald about the modern world—to welcome with no ambiguity what most people think is a long overdue modernisation of charity law.
If we can get the public benefit test right, as I believe we can, it could clarify an area of charity law that every Member knows fine well has been greatly disputed for many centuries, including in the courts. Perhaps even more importantly, it would introduce a healthy dose of common sense into a complex area of charity law. We have to face a very simple fact: what the public think of as a charity and what we define in law as a charity are sometimes at variance. That is why, when asked, only 15 per cent. of the public believe, for example, that a charity such as Tate Modern is indeed a charity. Even fewer believe that Eton is, or indeed should be, a charity—but it is.
So there are issues that we must address, not least in order to sustain what my hon. Friend the Member for Slough rightly called the charity brand, and its reputation now and in future. To be frank, it is in any case right that charitable status, since it accrues significant benefits, should be earned and not simply assumed. After all, organisations that are charities enjoy high levels of public support precisely because they are assumed to provide a meaningful benefit to the public. So in that sense, the good name of charities is at least as important as their good works.
There is a further important consideration—a financial consideration—which my hon. Friend Chris Bryant touched on in an intervention a moment ago. Charities do not just receive generous donations from the public individually; they also receive pretty generous financial support from the public collectively. For example, in the latest tax year charities attracted tax relief worth almost £1.9 billion, which is a pretty significant pot of public expenditure. Nowadays, nobody—perhaps with the exception of the hon. Member for Isle of Wight; I do not know—expects public money to be doled out like a free good. It rightly comes with some strings attached. The public have the right to know what they are getting out for what they are putting in. Charities cannot be exempt from those disciplines.
Can the right hon. Gentleman not see that there is an inherent difficulty in applying the concept of earning charity relief to religion? The situation is more straightforward in education, for example, where the extent of public benefit can be shown. That is different from a state agency's having to decide which religious groups earn, by virtue of their theological views and actions, the status of a charity.
I understand and respect the right hon. Gentleman's point of view on the issue. As I shall say in a moment, however, it is a complex question in the areas that were previously exempted, and that are about to be unexempted if the Bill is passed, most notably in the case of education.
If we can properly apply the public benefit test, it can help to assure the public that any organisation acquiring charitable status and, therefore, significant financial resources, is providing some identifiable, and preferably quantifiable, benefit, notwithstanding the difficulties in doing that.
I freely confess that I have not had the opportunity of studying the Bill to the extent that I would have wished or should have done. Clearly the right hon. Gentleman is knowledgeable about it, so may I ask him one question? Today, I happen to be wearing the tie of the Army Benevolent Fund, and I note that one of the charitable purposes, under paragraph (l), is
"the promotion of the efficiency of the armed forces of the Crown".
I think that the test that he has applied of what the public would regard as worthwhile would include the Army Benevolent Fund, but I am not sure whether it is connected with the efficiency of the armed forces. Given that he was in such an influential position to scrutinise the Bill, can he reassure me about that?
I am not sure that it is my job any more to reassure anyone. That is my hon. Friend the Minister's job, and it is a question for him. I do not know whether he feels reassured by my contribution. In passing, I remember—I do not know whether this reassures the hon. Gentleman—that the Joint Committee took evidence from a variety of Army-related and military-related charities, and we tried to address some of the concerns that they expressed in our recommendations to Government. Incidentally, the Government addressed many of our recommendations in the Bill.
Although much of the debate has centred on the issue of religion, I think that the trickiest issue, certainly politically, has been that of charitable private schools and hospitals, which sit in the middle of a pretty uncomfortable triangle. On one side, they are bound by their obligations as charities, because they have charitable status. On another side, obviously, they owe obligations to the fee-paying parents and patients who provide the overwhelming bulk of their income. On the third side, they have wider obligations to taxpayers, who fund the estimated £100 million-worth, I think, of tax relief that they enjoy as a consequence of their charitable status. Some may have seen the Bill as an opportunity to resolve those tensions by exacting some sort of ideological revenge on such private schools and hospitals by stripping them of both their financial benefits and their charitable status. I do not think that that is the intention of my hon. Friend the Member for Selby, and it certainly is not mine. I am a long-term advocate of partnerships between the public and private sectors.
It is true, however, that charities that charge fees for their services have a special obligation to prove that they can none the less provide a wider public benefit. I, for one, very much welcome the initiatives that many private schools, for example, have taken in recent years to develop meaningful partnerships with state schools. The problem is that while some have an exemplary record, others, sadly, do not. Under the current law, however, all benefit equally from charitable status. That, as Mr. Jonathan Shepherd of the Independent Schools Council—which represents more than 1,000 private schools in this country—wrote in a letter to me dated
"has sheltered lazy charities because they did not have to demonstrate public benefit."
If we get the new public benefit test right, rather than using it to drive a wedge between public and state schools, I believe that it could help drive them still closer together. The worry that some have, including my hon. Friend the Member for Selby and those who have put their names to his amendment—to some extent I share it—is that without a clear definition, public benefit could end up being interpreted as requiring nothing more from private schools or hospitals than the offer of some form of indirect or tokenistic public benefit. For example, they could argue that they save the taxpayer money by educating children or treating patients who would otherwise be taught in state schools or treated in NHS hospitals.
Surely meaningful public benefit must be more than that—and I would argue that it must also be more than the odd sharing of a classroom here or a playing field there. Ideally, it should be a lasting partnership that enables many more state school pupils, regardless of background, aptitude or ability, to benefit from the expertise and resources that private schools often, although not always, have at their disposal. That, after all, is the declared purpose of both Government policy and private schools, as represented by the Independent Schools Council.
The right hon. Gentleman seems to be saying—and I agree with him—that some independent schools do not offer very much. Frankly, a rowing trench near Slough is not contributing greatly to public education. But it seems to be Ministers' position that the public benefit test is not changed by the Bill, and that that what is being established is existing case law. Is that the right hon. Gentleman's understanding?
"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 are 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.
As Mr. Milburn has just said, this is a very good Bill and the concept of public benefit is central to it. Rather than citing older Charity Commission reports, it is more useful to consider the commission's current guidance on how it plans to implement the Bill in future. The commission's website, which is a fertile source of material for this debate, contains a briefing, issued this month, on the approach to public benefit and how it will be treated. The commission promises to apply the public benefit test robustly, and that is welcome. Perhaps I detect the hand of the Minister in that form of words, which is welcome.
The guidance also contains some slightly more alarming words, which underline the fact that the issue is a moveable feast—a slippery concept, as the right hon. Gentleman put it. For example, the briefing contains what appears to be an entirely new concept of the need for continuing improvement. It states:
"Our aim will be to ensure both that charities demonstrate public benefit in what they do and, beyond that, continue to increase the value they bring to the communities they serve."
That seems to go beyond the Bill and add a dangerous new dimension, because it puts an obligation on any charity to prove that it has satisfied the public benefit test and later to prove that it has increased the public benefit. That is perhaps a similar example to the one cited by Miss Widdecombe on modern laws, with the Charity Commission going a little further than the Bill, and also perhaps failing to issue the best possible guidance. The Minister with responsibility for the third sector will have to be on his mettle in managing the implementation of the public benefit test.
The concept is slippery. As the right hon. Member for Darlington also noted, there are areas of spectacular confusion, not least in respect of whether the Bill changes the law on public benefit at all. Many people—including Liberal Democrats in this House and the other place—argue that it does, but my noble Friend Lord Phillips said, in a letter today to The Guardian:
"Many leading charity lawyers beg to differ. Without some leverage in the bill, the judges are not free to innovate, especially as the leading case law endorses the status quo, where the school or hospital can claim charitable status if it saves the taxpayer money or provides extra facilities unavailable in the state sector."
I confess that I am not a lawyer. Although my interpretation does not entirely match his, my noble Friend is an extremely eminent charity lawyer and the fact that he thinks that that is an arguable case shows that the Bill in its current state leaves matters very unclear. Mr. Grogan said that the NCVO and the Charity Commission appear to be shifting their ground slightly about whether further clarification is needed. Earlier this year, the NCVO issued a briefing that stated:
"According to Guidance published by the Charity Commission, charities that charge high fees for their services merely have to show that 'the less well-off are not wholly excluded from any possible benefits, direct or indirect'.
NCVO does not believe this goes far enough ... However, the Charity Commission itself has said that this is a complex area of the law and it would like further clarification from Government on this issue and particularly in relation to fee-paying charities."
I am not sure that I follow what the hon. Gentleman means. It is reasonable for the commission to want to know the Government's intentions in respect of forthcoming legislation, and that is what we are trying to establish in this debate.
The current Charity Commission briefing states:
"We need to articulate and explain the concept of public benefit in a way which is consistent with the law and clear to the public."
The fact that the briefing itself does not do that shows that matters as they stand are not entirely clear.
My hon. Friend is demonstrating his usual skill, but some of us find the Bill very unclear. The House is delegating the most fundamental concepts to the charity commissioners. That leaves dissatisfied those of us who believe that we need a more robust approach to public benefit in respect of schools and hospitals, while those who worry that the longstanding acceptance of religious charities is threatened remain concerned because the concept behind the proposals is as vague as he has set out.
As ever, my right hon. Friend makes a good point, and he may have some sympathy for the much more detailed amendment that I tabled in Committee. It was based on the established Scottish law, which offers a much clearer way forward, but it was not accepted and we are now debating the more modest proposal introduced by the hon. Member for Selby. However, amendment No. 1 at least contains the useful phrase "undue restriction", which makes it clear beyond doubt that the bar is being raised somewhat and that all charities would have to earn their charitable status. The amendment would require the word "charity" to be unequivocal, and that no charity could take advantage of a status quo that allows all sorts of bodies to retain their charitable status without having to change in response to the Bill.
I am not sure whether the hon. Gentleman supports amendment No. 126. If the bar is being raised for charities that want the advancement of religion, would it not be a good idea for him to support the amendment, so that religion does not have to pass that test?
I thank the hon. Gentleman for that question, and I shall come to amendment No. 126 in due course.
I was about to say that I have consulted some of the outstanding private educational establishments in my constituency, such as Cheltenham Ladies college, the National Star College for Disabled Youth, Cheltenham college and Dean Close school. I tested out the amendment to see whether those institutions felt that it represented some great threat to their charitable status, and they all thought that raising the bar was a good idea. Given their excellent public service record of sharing facilities with the wider community, they did not believe that it would damage them, and they also believed it would helpfully raise the bar for smaller, perhaps less reputable, organisations that were more or less indistinguishable from businesses in their approach. I am not saying that there is a large number of them, but raising the bar on public benefit would help to clarify that such organisations need to act charitably in order to earn the considerable benefits of charitable status.
There is a good example in my constituency of a small private nursery and pre-preparatory school that underwent some anxiety about whether it would pass a stricter public benefit test. It wondered whether it would be able to share any facilities with the wider community. It was a problem, as it did not offer scholarships in the requisite age range, so it had to think hard about the threat of a stricter public benefit test. In the event, it decided to share music teaching with neighbouring state schools. That seems an excellent result and it happened on account of the threat of a test stricter than the status quo.
The question remains whether the Bill in its present form contains such a test. I do not believe that it does, but I would be interested to hear the Minister's comments. I wonder whether he will say that there are sufficient incentives, either in law or from the commission, to encourage organisations and institutions such as that school to improve the quality of their public service.
On amendment No. 126, I listened carefully, as ever, to the right hon. Member for Maidstone and The Weald. One of the Bill's central principles is that it removes the current archaic definitions of charitable purpose, which date back to the mediaeval era and are simply no longer fit for purpose—though I hesitate to use that rather new Labour phrase. The right hon. Lady said, "If it ain't broke, don't fix it," but the overwhelming consensus in the charity sector is that current charity law is broke, at least to the extent that the Bill deals with many areas of charity law and is designed to reform and improve them. That is precisely why it has had such widespread support— [Interruption.] Bob Spink shouts out "Not religion" from a sedentary position, but I refer him to his colleague in the other place, Lord Hodgson of Astley Abbotts, who said in support of a level playing field for all charities:
"What we have achieved in the Bill is a delicate balance as regards the public benefit issue. Therefore, for the noble Lord, Lord Borrie, to talk about blanket advantages in the circumstances is not right. As the noble Lord, Lord Phillips, said, we are in fact creating a level playing field here, in which all charities have to meet a public benefit test, no matter what their purposes are, and must do so on a continuing basis."—[ Hansard, House of Lords, 28 June 2005; Vol. 673, c. 154.]
There is, in effect, no divine right to charitable status. The National Society for the Prevention of Cruelty to Children, the Royal National Lifeboat Institution, the Royal British Legion, St. John Ambulance, Save the Children and so forth will all have to pass a public benefit test, and so will the Churches.
Some have put forward thoughtful arguments suggesting that all this will prove detrimental to the Churches. One such argument is that religion does not have a provable public benefit. That is, in effect, arguing that because the charity or organisation is expected to fail the test, it should not have to take it. As Chris Bryant and others have mentioned, it is equally difficult in some circumstances to imagine how art, sport or even education can provably increase public benefit—but that is the purpose of case law and the purpose of the Charity Commission in giving guidance.
Indeed, help was provided by the example of humanist organisations earlier. They achieved charitable status in the end by suggesting that they aided the mental and moral improvement of mankind. My guess is that most religious charities would be able to argue robustly that they demonstrated comparable public benefits. Most accepted world religions set out the golden rule of doing unto others as they would expect others to do to themselves. That is clearly to the benefit of the wider community. The example of the Church of Scientology was also mentioned earlier. It was rejected under current law by the skin of its teeth, only because it did not have an act of worship. Without the public benefit test, there would be a real risk of religious organisations that were undoubtedly religious but harmful securing charitable status.
The right hon. Member for Maidstone and The Weald asked for a specific example of an organisation that might fail the test. I offer her Satanism, which, under current case law, would meet the definition of a religion. It unambiguously has an act of worship and a supreme being and it obeys the supernatural principle that Mr. Turner supported earlier, but I am sure that it would not pass a public benefit test.
The hon. Gentleman is theorising about Satanism. It has been around for a long time and the Charity Commission has never been remotely tempted to give it charitable status. Can he name one occasion when, under existing law, there has been an unsatisfactory outcome, either of a cult or something like Scientology gaining status, or of a genuine charity not receiving status, under that presumption? Can he name one case?
If the right hon. Lady is referring to existing case law she should be reassured, because the charity commissioners have made it explicit, first, that their priority in testing public benefit is fee-paying organisations—as is clear in their guidance and has been the subject of much debate—and, secondly, that existing case law will guide their hand in judging the public benefit test. Under existing case law there is no evidence whatever that the Commission will become an army of political correctness trying to persecute the Churches.
I am grateful to the hon. Gentleman for giving way again, because he has not answered my question. Under the existing provision, can he give me one example of either something like Scientology succeeding—I am aware that actually it did not—or something that should have succeeded and did not? Can he give me one instance of the law—the presumption in favour of religion—not working properly?
To give the right hon. Lady an absolutely straight answer, no I cannot give the precise example for which she asks, but that does not change the argument for a level playing field for all charities, especially as so much of it is based on existing case law. She should be reassured by the fact that I cannot find an example.
Undue restriction, as proposed by amendment No. 1, will not threaten religious charities either. I know of no religion that is closed to converts, so there would be no undue restriction for religious charities. The fundamental principle is that this is in large part an excellent new Bill, which will establish a level playing field on a contemporary basis for all modern charities.
I want to pose a problem for my hon. Friend. The Charity Commission decides to test the law on public benefit on a small Calvinist sect that believes that there is a set number of elect people. In such a case, a small group of people, who had enjoyed charitable status for a considerable time, and whose numbers might be declining, thus falling foul of another Charity Commission definition, would have to go to judicial review against the Commission. That is the problem with producing such a vague concept, which is difficult to apply in such cases.
I am content to leave such matters to case law and to the Charity Commission. I suggest that my right hon. Friend should be content with that, too.
It is a pleasure to follow Martin Horwood, who is extremely knowledgeable and made a good contribution in Committee. I am pleased to respond to my hon. Friend Mr. Grogan, who by being modestly bold has created the opportunity for an important debate.
Members on both sides of the House will be pleased about the appointment of Campbell Robb as director of the office of the third sector. From his work in the House with MPs from all parties, he knows that the role of the office of the third sector is not just to do with structures or bureaucracy; it covers the relationships between the Government, the third sector and Parliament. It is a welcome development.
Many people in the charity sector and Parliament have engaged with the question of what public benefit is, and have been tempted to attempt a more precise definition in law. I, too, have been tempted down that road; we discussed it in Committee when the Minister engaged positively with the issue. He has kept his promise to give careful thought to all the options. The trouble is that it is always possible that the courts—or, in future, the charity tribunal—will be limp in how they interpret the intentions of Parliament. Our experience is that case law in the field of charity is sparse. For that reason, MPs such as my hon. Friend the Member for Selby understandably ask what the point is of removing the old presumption and requiring that public benefit be demonstrated clearly by charities, particularly those that charge significant fees for entrance, participation or services, if the requirement does not bite until a judgment is reached in a test case in 158 years' time.
Either we must be sure that the law and Parliament's intentions are crystal clear, or we must be sure that those intentions will be given effect robustly and effectively by the Charity Commission, which must work sensibly and progressively but without undue delay. The real downside of choosing to include a more stringent definition is that it would create a risk of unintended consequences. An enormous amount of legislation on the statute book was intended to give tight and precise effect to a definition or requirement, and was supposed to provide limpid clarity, but turned out to be doubtful at best, or did not stand the test of time. Animal welfare legislation has been a running sore for just that reason.
Let us face it, some forms of words are precise and clear, but require constant reinterpretation. In my view, far from being a weakness, that is a strength. "Who is my neighbour?"—the words resonate down the ages, and after 2,000 years they are still clear and precise, yet they are as challenging as they were to the young lawyer to whom they were directed. They provoke debate just as they did when they were first spoken, and they have required careful interpretation in every age. The same applies to the words "public benefit", and that is why I strongly resist both the introduction of a more precise definition, and the amendment with which my hon. Friend the Member for Selby provoked this constructive debate.
Our discussion has been worth while, but it has shown that the simple test of public benefit, if interpreted and applied in the existing legal framework in a modern context, is the right and simple way forward. Clearly, the meaning of "modern" will be different in decades and centuries to come, but the principle is clear. The question is whether the public benefit test will be applied robustly to charities that have been able to hide behind the historic presumption, or whether they will ignore the challenge. Miss Widdecombe is no longer in the Chamber, but I would like to say to her that, as a Christian, I think that Christian charities should be subject to the same test as the rest, and we should welcome that. The use of the public benefit test will depend on how the Charity Commission interprets the law, and not on how Ministers spell it out, although the Minister's reply in this debate will clearly be important in setting out the basis of Parliament's view.
When it comes to implementation, the Charity Commission's view will be crucial. The commission is accountable to Parliament and the public for the way in which it interprets its responsibilities. I asked the chief charity commissioner how she and her advisers envisage their remit once the Charities Bill reaches the statue book. She had already spelled out her response to the Bill in the article referred to by my right hon. Friend Mr. Milburn, and I think that she correctly interpreted Parliament's intentions. I particularly liked her comment that the public benefit requirement is a call to innovate. She is clearly using the Bill as an opportunity to allow not just Government, Parliament and the commission, but the sector itself, to explore ideas and principles vigorously in a modern context. It is important to mention the brief for MPs, which should be lodged in the Library for future reference, because the notes on how the public interest requirement will be interpreted by the commission are extremely important.
It is clear that organisations will not suddenly be required, overnight, to demonstrate that they provide public benefit, or to rethink their priorities, but there is a clear expectation that charities that previously benefited from the presumption will engage with the issues and, through their attitudes and actions, respond to the change in the law. They will need to show that they provide public benefit but, to be fair, many charities that operate under the existing presumption already demonstrate that they provide public benefit. That is the unwritten deal, and the public clearly understand that charitable status provides reward and encouragement for those who provide public benefit. Each charity must simply ask itself whether it provides public benefit in a way that justifies its charitable status, and whether it shows that benefit clearly, so that the requirements of transparency and accountability are met.
Indirect benefit is not likely to be enough in itself. The Charity Commission believes that the law, as it stands, makes it clear that it will not normally be possible to demonstrate public benefit through indirect benefits alone, such as savings in public expenditure that result from the charity's provision of education or health services. It is therefore clear that the benefit to the public must generally derive from the organisation's primary charitable purposes, rather than any secondary activity. Charities that were previously presumed to provide public benefit must show that they satisfy the law, and the Charity Commission must be satisfied that they have done so. Charities that charge high fees for their services must take active and transparent measures to ensure that someone who is eligible to benefit from those services has a reasonable chance to do so. It is sensible that charities should have time to adjust, but it is reasonable to expect them to engage with the changes.
The commission—not the Government—will make the final decisions about charitable status on a case-by-case basis. Their decisions will depend on the circumstances of individual fee-charging institutions following the criteria that I have described. If, after the Bill's implementation, the Government's intentions on public benefit are not fully reflected in practice, a review of the legislation must be instigated as soon as parliamentary time allows. In any event, the Minister has made it clear that a review of the public benefit requirements will be initiated three years after the Bill's implementation.
I asked the chief charity commissioner, Dame Suzi Leather, whether I had interpreted correctly the Bill's requirements. Would the commission be reasonable, but firm and robust, in ensuring that all charities fulfil those requirements in their day-to-day performance in a realistic period of time? She answered, "Yes". Only the presumption was changing, and organisations that have not grappled with the issues until now, because they were not required to do so, must show they have done so. The change will not be new for the many charities that have already adapted to the change, which is welcome. All charities, however, must adapt now that the change in the law has become clear.
The commission has published on its website an indicative timetable outlining the steps that it would take to act on the public benefit requirement following Parliament's approval of the Bill. That indicative programme makes clear the commission's intentions, and it should be available in the Library so that hon. Members can refer to it. Provided that the Bill completes its passage in the expected time scale, in November, the citizens' forum will begin research on public perceptions and expectations, and in January next year, the commission will launch a three-month consultation. Next September it will begin a pilot assessment of public benefit, producing detailed guidance for specific types of charities and consulting on the guidance, and in summer 2008, it will report progress to Parliament.
The chief charity commissioner stated her understanding that the Bill gives the commission a clear role in ensuring public trust and confidence in charity. I believe that that answers the problems raised by my hon. Friend the Member for Selby in his amendment. The commission regards the public benefit requirement as a key component that makes a clear and explicit link between public benefit and charitable status, and which strengthens public confidence in the charity sector. It will apply the public benefit test rigorously to ensure that that goal is achieved, and fee-charging charities will be expected to demonstrate how they provide benefits.
I accept that my hon. Friend the Member for Selby wants to gain as much as possible from our debate, but I am sure that the response from the chief charity commissioner, the commission itself and the Minister will allow him to reach the right place, which is not only as far as the Minister could go but as far as he should go.
Mr. Grogan will agree that there are none so generous as Yorkshire folk. He will forgive me for providing the more common version of the Yorkshireism that he cited to the House—"If tha does owt for nowt tha does it for thissen." That is the opposite of the selfless work undertaken by many volunteers for the wonderful charities that we are seeking to control in the Bill.
Amendment No. 126 is straightforward as it simply retains the presumption that the advancement of religion is in the public benefit. Mr. Milburn mentioned common sense, and most people in the country would regard that proposal as simple common sense. However, the Bill would remove that time-honoured presumption and therefore represents a major change, and I suggest that it could seriously damage religious liberties and our traditions and even damage our benevolent and tolerant society.
Moreover, the clause is entirely unwanted, at least by the majority of the public, who despise political correctness. Under the law as it stands, many worthwhile religious charities have been registered in the UK, and as my right hon. Friend Miss Widdecombe said, "If it ain't broke, don't fix it." If a charity, even a religious charity, has been acting improperly and is found not to be acting for the public benefit, it can be deregistered. That has happened plenty of times, such as in the case of Abu Hamza and the Finsbury Park mosque. Under the existing statutory regime, the Charity Commission has successfully regulated religious charities and does not, nor should it, challenge or question their underlying doctrine—but that is what the Bill will inevitably lead to, and it is wrong. The proposed, more aggressive approach of the Bill is unnecessary and could be yet another step towards destroying the traditions of our society.
As we have heard, the commission states unequivocally that the public benefit must be assessed
"in the light of modern conditions" and that keeping up with "modern society" is required if a charity is not to have its charitable status revoked. It is the word revoked that is so challenging and worrying. It means that the intention is to remove charitable status from some religious charities, and I wonder whether the Minister would spell out exactly which ones he is thinking of.
Christian charities, of course, take guidance from the Bible, written in ancient Israel, but I happen to believe, and so do many people in the House and in the country, that that Bible is still as relevant today, and its words as meaningful today, as they ever were. The Bill gives the commission massively increased powers. The current commissioners may be good people, but how can we be sure that they will always be benevolent and reasonable in the future? They will be required to make very subjective judgments about the ethos and ethics of different religions and religious activities. As there is nothing in the Bill that sets out any objective criteria for their judgment, their judgments will be subjective. How can they decide which religious groups are "beneficial" and which are not? On what criteria will they base that decision?
In any event, why should the commission—or, indeed, the law in interpreting the Bill—be rational and consistent when even the Government are not rational and consistent in proposing the Bill? The Government's statements on this issue have been confused and contradictory. As we heard from my right hon. Friend the Member for Maidstone and The Weald, on Second Reading in this House the Minister said that removing the presumption of public benefit would "raise the bar" for religious, educational and poverty relief charities, while in Committee he maintained that
"religious charities and organisations provide public benefit, and I see no reason why that should change."—[ Official Report, Standing Committee A,
Those statements cannot both be true. So the Minister has himself been inconsistent in presenting the arguments for his own Bill.
Time is short, so I shall curtail my remarks. I believe that we should not inflict this clause on good people who are simply serving their communities through a religious charity. Political correctness must not become the new test of charitable status. I commend amendment No. 126 to the House.
I shall speak for no more than a minute.
My anxiety about the Bill is that, in the best of parliamentary traditions, we have confronted an issue, and then avoided it and devolved decision making to another body. That is why I welcomed the amendment tabled by my hon. Friend Mr. Grogan and wish that he had pursued it. It would have been a good test of the power of prayer—unless the Minister fell on his knees.
Because this is the only opportunity that we shall have at this stage to influence the guidance, I would welcome it if the Minister were to read into the record his concurrence with the views of my right hon. Friends the Members for Cardiff, South and Penarth (Alun Michael) and for Darlington (Mr. Milburn) and my hon. Friend the Member for Selby, because in that way we shall assist in shaping that guidance.
The second critical stage will be when that guidance is published in 2008. It would be useful to have an assurance that the guidance will be brought back to the House, at least for a parliamentary debate in which we can again express our views. If there is a promise of a three-year review, it would be useful for that debate to trigger the review, so that it becomes a parliamentary review rather than one that is again devolved or sent off to a separate commission. In that way, we will have an assurance that this is not a once-in-25-years review of the whole process, but an ongoing process in which Parliament will have a direct and meaningful role.
It has been an interesting debate with contributions from distinguished Members of the House, including Miss Widdecombe, my right hon. Friends the Members for Darlington (Mr. Milburn) and for Cardiff, South and Penarth (Alun Michael), and other hon. Members. In the time that I have available, I want to deal with both amendments.
First, I want to bring together the questions of religion and of education, and the central burden of the remarks made by the right hon. Member for Maidstone and The Weald. She asked, "Why?" Why should we have the principle that all charities must pass the test of public benefit, without a presumption in favour of a few? My answer to her is: fairness. Whether we are talking about the National Society for the Prevention of Cruelty to Children, Eton college or a religious charity, all should have to pass the public benefit test. That seems a pretty basic principle.
The right hon. Lady might say, "I agree with your principle, but I think that the practice is going to overwhelm the principle. I am really worried about what this will mean for religious charities." That was the second part of her remarks. I hope that I can reassure her on those points. First, I want to reassure her that removing the presumption that the advancement of religion provides public benefit is not intended to lead to a narrowing down of the range of religious activities that are considered charitable. Nor is the process intended to be onerous for individual religious institutions.
The right hon. Lady talked about social mores. Martin Horwood, not for the first time in my experience, made an excellent speech on that point. Case law is the foundation of what we are debating in the Charities Bill and of the legislation on which we are moving forward. We have not put it all on the record in the Bill because that is simply not possible—that is the complexity of charity law. Yes, modern social mores play a role—the courts have determined that—but the foundation is case law.
I appreciate that it will not be a formal Pepper v. Hart statement, but will the Minister say briefly whether it is his understanding that the fact that a particular religion teaches a traditional and certainly non-modern sexual morality could never be held by the Charity Commission to disqualify that religion from charitable status? It is as simple as that.
I can certainly give the right hon. Lady that assurance. Of course, the Charity Commission has to make a case-by-case judgment on those points. She is raising a hypothetical example, but of course it is the case. I thought that her description of what modern social mores meant suggested a grand conspiracy between ourselves, the Charity Commission and the whole of the charities world.
I am answering. I do not think that the commission will be able simply to say that, on the basis of the change in modern social mores, somehow a religious charity is ruled out. I hope that that gives the right hon. Lady the reassurance that she wants.
I am afraid that I have to make progress. I need to give Mr. Turner some time to reply and I do not have much time left.
I want to reassure the right hon. Member for Maidstone and The Weald on the point of principle. I also want to reassure her that the burdens will not be onerous for religious charities. As with all charities, public benefit has two dimensions. First, there must be an identifiable benefit. Secondly, it must be accessible not only to the adherents of a particular religion, but to the wider community. However, the Government, the courts and the Charity Commission have recognised that religious activities bring benefits not only to those who take part in them, but to the whole of society. Religion has an important role to play in society through faith and worship, motivating charitable giving and contributing in other ways to stronger communities. Both those dimensions will thus usually be apparent from the doctrines, beliefs and practices of a religion. The Charity Commission is clear that most established religions should not have any difficulty in demonstrating their value to society from their beliefs.
I apologise for not giving way to the hon. Gentleman, but I need to make progress.
The commission has already begun discussions with the major religions of our country precisely to give them reassurance. I hope that the right hon. Member for Maidstone and The Weald will accept my reassurance, too.
I am pleased that my hon. Friend Mr. Grogan has tabled amendment No. 1 because it gives us the chance to talk about another aspect of public benefit. On Second Reading, I set out several principles of the Government's approach to the charitable status of fee-charging institutions, including private schools, and I want to reiterate them today. I say in passing to the right hon. Member for Maidstone and The Weald that while I think that the bar will be raised, especially for fee-charging institutions that were not subject to the scrutiny of the Charity Commission because of the presumption, I do not believe that I said the words that she attributed to me. However, perhaps we can take that up on another occasion.
Our first principle is that all charities must pass the public benefit test and be continually tested on that by the Charity Commission. The removal of the presumption will lead to that big change. The presumption meant not that there was no public benefit test in all circumstances, but that existing charities were not scrutinised by the commission. The measure is designed to bring about consistency, as the commission has confirmed. The history of this is that when the register of charities was established in 1960, private schools were automatically put on it if they had previously been granted charitable tax relief by the Inland Revenue.
Our second principle is that indirect benefit—the claim that private schools save money for the taxpayer by educating pupils, for example—should not be enough to justify charitable status. That is right, and the view is shared by not only Labour and Liberal Democrat Members, but the Independent Schools Council, which says that indirect benefit savings to the taxpayer should not be enough, given that private schools enjoy the benefits that come with charitable status.
Some hon. Members asked what private schools will have to provide; my hon. Friend the Member for Selby asked whether token benefits would be enough. The Charity Commission will have to make a case-by-case examination, but reassurance is available on the point of principle. The commission said in its briefing earlier this week:
"It will not normally be possible to demonstrate public benefit through indirect benefits alone, such as savings in public expenditure".
The schools must thus normally provide direct benefits. However, can those benefits be simply for wealthy people who can afford the fees? Again, the commission's briefing helpfully indicates the way in which it wants to move forward. It says:
"Charities which charge relatively high fees must demonstrate accessibility to those facilities or services".
Even at this late stage, I hope that when the hon. Member for Isle of Wight winds up the debate, he will announce the Conservative party's conversion to such a basic principle of fairness.
The benefits will need to be extended beyond the narrow class of people who are able to afford fees, and it is unlikely that a token provision will be sufficient. To answer a question asked by my right hon. Friend the Member for Darlington, the Government believe that the benefits should be direct and meaningful. Generally, we believe that a school that does a range of things to widen access through partnerships with state schools and educational initiatives in the local community—I pay tribute to the many private schools that do this—will find it easier to demonstrate a public benefit.
Our third principle is that the Bill will raise the bar for private schools. I tell the right hon. Member for Maidstone and The Weald that the key point is that this is about fee-charging institutions that previously benefited from the presumption that charitable status was automatically conferred on them. That is why I do not believe—if I said this, I misspoke—that the bar will be raised for religious charities or charities dealing with poverty. This raising of the bar relies on a Charity Commission with a robust plan to implement it, as the Charity Commission has shown. It is embarking on a worthwhile process, involving the development of principles around the implementation of public benefit. It has promised to look specifically at the fee-charging sector, and it will consult the public about their attitudes. In the case of fee-charging charities, there has not been a directly relevant case for almost 40 years, as we heard, so the commission is right to develop its approach by consulting the public, taking account of the passage of time since in re Resch. The Bill seeks to establish confidence in the charity brand.
The fourth principle of the Government's approach—again, this is important—is that it is for the Charity Commission to take individual decisions about particular institutions. This is necessary because a rural private school miles from a neighbouring state school has a different ability to co-operate with the state sector than an urban private school, for example. Similarly, the private school for disabled children or those with learning difficulties, which my right hon. Friend the Member for Darlington mentioned, may face different pressures, compared with other types of private school.
All those differences need to be taken into account by the commission. That has made framing a specific amendment to the Bill hard, as has been found by many hon. Members who have tried to do so. The dilemma is between an amendment so wide as to add little to existing law or so precise as to have unintended effects. Over the summer we considered the matter and we were not able to find an amendment that satisfied all the demands.
The amendment tabled by my hon. Friend the Member for Selby, if I may say so, falls into the first category. It does not add to the existing law. His amendment states that in determining whether a body provides public benefit, regard must be had to
"any undue restriction on obtaining that benefit".
The nature of the public benefit test, though, is that charitable status is not established if relief is accorded to a selected few out of a larger number equally willing and able to take advantage of it—in other words, if there is undue restriction on those able to obtain that benefit.
My hon. Friend said in a recent letter explaining his amendment that the Charity Commission should have to weigh public benefit provided by the school against the restricted access to those benefits. I agree with that, as I have said. From our point of view, the amendment is unnecessary, but we want to see proper implementation of the principles. That is why we will review the effect of the public benefit provisions not five years, but three years after implementation, and if they are not having the intended effect and are failing to raise the bar, we will consider all necessary options. My hon. Friend is concerned to ensure that regard must be had to any undue restriction on benefits. As I have made clear, this is part of the public benefit test. It will be part of the review to determine whether our intentions have been met.
This is a good Bill and we should resist the two amendments.
The Minister has eaten into my time a little, but we have eaten into his quite a lot today.
The first point is about religion. Most religions contain beliefs and values that positively affect the relations of believers to their society and to their fellow man. The tangible results of that are much more difficult to prove than results such as poverty reduction or the advancement of education. For that reason, I was happy to move amendment No. 126 and will press it to a Division.
To answer Mr. Milburn and Chris Bryant, who is not in his place, in Committee we pressed for the retention of the public benefit presumption in a number of other areas—not because we believe that people are entitled to money for nothing, but because we believe in less bureaucracy, rather than more, and we know that the Charity Commission is well placed to challenge charities that are not delivering the public benefit that they should be delivering. The right hon. Gentleman says that the commission is not so well placed.
I am unhappy with the words that emanate from the Charity Commission and from Dame Suzi Leather, whom Mr. Grogan quoted, that she will interpret the provision in the light of current mores. That is very frightening to many religious organisations. It is the Government's ambivalence between proposing change and saying that there will be no change that worries people.
Question accordingly negatived.
It being after Six o'clock, Madam Deputy Speaker put forthwith the Questions necessary for the disposal of business to be concluded at that hour, pursuant to Order [
Government amendments Nos. 5 to 12, 118, 13 to 16, 119, 120, 17 to 57, 121, 58 to 87 and 89 to 116 agreed to.
Order for Third Reading read.—[Queen's Consent, on behalf of the Crown, and Prince of Wales's consent, on behalf of the Duchy of Cornwall, signified.]
Motion made, and Question proposed, That the Bill be now read the Third time.— [Mr. Michael Foster.]
The Bill underpins a vibrant and exciting sector, which has a huge growth rate. Since it was conceived, nearly 30,000 new charities have been registered, along with more than 30,000 linked charities. In total, charities spend over £30 billion a year on good causes, and employ more than 600,000 people. There are more than 1 million trustees for such organisations—volunteers who give up their time, and money from their own pockets, to help others. Many Members are involved in charities and causes that are dear to our hearts. It is up to us to ensure that they are regulated in a modern, efficient and easy-to-understand manner.
Although there has been lively and thorough debate about some of the more controversial areas, there seems to be a consensus in the House, in the sector, and among the public at large, that the Bill is a good thing. All Members in this House and Members in another place agreed that the legislation governing charities needed to be updated, and it has been reassuring to know that we are all working towards the same ends.
The Charities Bill has been working its way through both Houses for rather a long time. It was conceived in 2002 in the Prime Minister's strategy unit and has been mentioned in no fewer than three Queen's Speeches. Between both Houses, it has enjoyed over 80 hours of debate, and it was considered in draft by a Joint Committee that was ably chaired by my right hon. Friend Mr. Milburn. Therefore, I think that we can safely say that it has been well scrutinised.
The Bill provides, for the first time in English law, a full statutory definition of charity and charitable purposes. In doing so, it removes the centuries-old presumption that some purposes—relief of poverty, education and religion—are for the public benefit. Removal of that presumption will not cancel the charitable status of poverty relief, or of educational or religious charities. But it will require those charities to show that they provide a public benefit, instead of that being simply taken for granted. That will put those charities on the same footing as all other charities, which already have to show—
On the question of public benefit, Christian Hope International, a religious charity based in Harold Wood, in my constituency, does very good works throughout the third world for orphaned children, but it does not provide a public benefit to United Kingdom taxpayers. Can the Minister assure me that, even though the benefit that it provides is not to this country, its charitable status will not be affected by the Bill?
I can give the hon. Lady that absolute assurance, so long as that charity meets the terms of charitable organisations, and so on. Organisations such as Oxfam and Christian Aid, which do such important work in the developing world, are not anxious in this regard, and I am sure that the charity that she mentions can share their confidence about the way in which the Charity Commission will view such work.
I was not going to be as contentious as that—I am trying to bring the House together—but my hon. Friend makes a valid point. Many Labour Members have long sought to get international work on to the political agenda, and this Government are very proud of the fact that we have indeed got international development firmly on to the agenda. Indeed, even Opposition Front Benchers now want to support such efforts, so, despite what was said in the other place, we have seen real progress on that front in recent years.
The Bill will put religious and educational charities and those dealing with poverty relief on the same footing as other charities, which already have to show, before they can be accepted as charities, that they provide a public benefit. The Parliamentary Secretary, my hon. Friend Edward Miliband spelt out on Report the Government's view of public benefit.
I would be extremely grateful if the right hon. Lady confirmed that, as her colleague Lord Bassam of Brighton said in the Lords on
It certainly will; my understanding, based on my discussions with the Charity Commission, is that it has no problem with that at all.
As well as putting public benefit at its heart, the Bill gives the Charity Commission a new objective of promoting public awareness of, and understanding of, the public benefit requirement. The commission will have to prepare, consult on and issue guidance on public benefit. That guidance will explain how the commission intends to go about ensuring that charities meet the public benefit requirement, and what will happen to charities that do not. We know that the commission is determined to apply the public benefit requirement with appropriate rigour.
These changes are intended to reaffirm public benefit as the foundation of charity, and we are confident that they will. Over the years following the Bill's enactment, we expect charities, especially those whose claim to be for the public benefit is in doubt, to expand the public benefits that they provide and to become increasingly transparent in explaining publicly the range and quantity of those benefits. Those are our intentions and expectations.
Under the Bill, we will have a duty to review the operation of the Act and to report to Parliament. We are in negotiations about which Select Committee will take responsibility for activities under the Bill and other activities that have recently come into our Department. The review will consider whether the changes to public benefit and the definition of charity more widely are meeting the expectations of the Government, Parliament, the charitable sector and the public. If we find that expectations are not being met, we will consider what action needs to be taken to put things back on track. We are required to start the review within five years of the Bill becoming law, but we are free to carry it out sooner, and I am happy to commit the Government to review that part of the legislation within three years. Defining the nature and scope of charity, and the requirements for charitable status, is of fundamental importance. We intend to get it right for the long term.
I thank the Committee, including its Chairmen, Mr. Gale and my hon. Friend Mrs. Humble. I particularly thank the two Opposition spokesmen, the hon. Members for Isle of Wight (Mr. Turner) and for Cheltenham (Martin Horwood), who have worked with us in an open and constructive manner at every step. They have been fundamental in securing the Bill's progress though the House. I am even given to understand that a new principle, "the Cheltenham principle", was born in Committee. It was identified by my hon. Friend Tom Levitt as,
"the idea that a harmless but not entirely necessary proposal should be included simply on that basis"—[ Official Report, Standing Committee A,
I think that the arguments for that proposal were slightly different today.
The point that came across clearly in Committee was that nearly all Liberal party policy, on almost anything, is made on the basis of being harmless if not entirely necessary.
My hon. Friend is intent on enjoying himself tonight, and I do not blame him. I know how long he, too, has waited and worked for the Bill. He therefore has every right to enjoy its final passage through the House.
Given the length of the Bill's life, it is also important to acknowledge the contributions of my hon. Friends the Members for Wythenshawe and Sale, East (Paul Goggins) and for Slough (Fiona Mactaggart) as Ministers formerly in charge of the Bill during this and previous Sessions, and of my right hon. Friend Mr. Milburn in chairing the Joint Committee that scrutinised the draft Bill. I have mentioned my hon. Friend the Member for High Peak, but I also thank my right hon. Friend Alun Michael, who assisted me, and my hon. Friend the Parliamentary Secretary, in our thinking on the Bill.
I also thank the Charity Commission for its invaluable contribution to the Bill. Charity is at the heart of the Bill. A strong charitable sector is a sign of a healthy society, and it is our duty to maintain a safe, modern regulatory structure to surround it. The Charities Bill is a much-needed update to charity legislation, and I commend it to the House.
I thank the right hon. Lady for her kind words addressed to me and to my hon. Friends on the Committee. I agree that the Bill has had the longest gestation of any of which I am aware. It has been scrutinised in the House of Lords twice and in this place once and a bit, as well as being scrutinised by the Joint Committee, of which Mr. Milburn was Chairman. I came to it late, and the Parliamentary Secretary came to it even later. At various points during the Committee stage we might have formed the view that we should not have started from here, but here is where we did start, and I think that we have reached a satisfactory destination.
I am particularly grateful for the reassurances from the Minister for the Cabinet Office about scrutiny. The Charity Commission will be an enormously strong and powerful quango that, as my hon. Friends have pointed out, will have power to revoke or indeed grant charitable status. There are concerns about how it will exercise that power, and it is good to know that a Select Committee will scrutinise it. I wish the right hon. Lady well in her discussions with Committee Chairmen.
Let me first thank the Parliamentary Secretary. It was a pleasure to work with a Minister who listened carefully and sought honestly to deal with all the inquiries fired at him from all sides—including, on occasion, his own—in the best possible way and in the best possible traditions of this place. We want to achieve a good deal of consensus on Bills of this kind, and I think that in this case consensus was largely achieved, but it was not consensus for the sake of consensus; it was agreement on good legislation, and I pay tribute to the Parliamentary Secretary for helping us to achieve it.
I thank the charities team—originally in the Home Office, subsequently in the Cabinet Office—for their assistance. They answered questions at short notice, and also replied to a multitude of letters. I thank the Charity Commission's staff, with whom I think it fair to say I have had robust discussions on a number of occasions: sometimes I have been persuaded, sometimes not. I thank the many charities that have contributed to proceedings on the Bill, and their representative organisations. Without evidence from charities large and small at grass-roots level, this would not have been such a good Bill. I particularly thank the Charity Law Association. One or two of the amendments that the Minister commended originated not from my pen, but from that of the association.
I thank my colleagues who were members of the Committee—my hon. Friends the Members for Worthing, West (Peter Bottomley), for Upminster (Angela Watkinson), for Wellingborough (Mr. Bone) and for Rochford and Southend, East (James Duddridge), some of whom have been present this afternoon. I also thank the Committee Chairmen, my hon. Friend Mr. Gale and Mrs. Humble. Finally, I pay particular tribute and give particular thanks to my researcher Tim Sheppard, who has now gone on to greater things but who saw me very well—at least, I thought so—through the Committee stage.
One or two minor issues remain, which we were unable to discuss on Report. In particular, there is the question of access to the tribunal. We are very pleased that there is to be a tribunal to provide an intermediate post between a Charity Commission decision and judicial review, but we are anxious about whether charities will be able to afford to face the commission in the tribunal. We do not want the commission to spend a lot of public money on lawyers when small charities do not want to spend charitable money on them. We are also anxious to ensure that justice is not only done but seen to be done in the tribunal. I hope that the Minister will have one or two things to say about that.
The Minister for the Cabinet Office mentioned a review that would consider public benefit, and said that if there were not the evidence of public benefit that Ministers would like to see, they would consider what action was needed to put things back on track. She has committed herself to beginning that process within three years. If the Conservatives inherit such an inquiry or review, we will be happy to continue it and to take the results to legislation if necessary.
I am, I must say, a little concerned about the fact that having worked as hard as we have—and, more importantly, given the hard work of so many other people—we are bringing forth what may turn out to be interim legislation. I hope that it will not be. I hope that the wishes and desires of the Government, the charity sector and Members on both sides of the House will be met successfully by the Bill. However, I am concerned that conflicting signals have been sent, even at Report stage, on exactly what the Bill means and, in particular, on public benefit. It is not satisfactory to leave to a quango, however well intentioned or distinguished its members, decisions not of administration, but of policy.
I fear that the Parliamentary Secretary has made comments that he hopes will be taken on board by the Charity Commission and interpreted as policy, but that were never put before this House in the form of amendment or legislation. If the commission responds too well to Ministers' expressed wishes, or the Government try to smuggle amendments through in the form of statements of policy, wishes, desires and guidance, it will spend much more time than it would wish before the tribunal. This House is the place to make legislation: quangos are not. Their job is to implement and, where necessary, interpret legislation, and we have not been entirely fair to the Charity Commission in leaving it with such a broad canvas and range of opinions as have been expressed today but not clearly represented in the wording of the Bill. That is my only reservation.
The Bill is much improved by the effective scrutiny it has received, and it is a great improvement on the previous legislation. I am pleased to have been involved in it, and I thank the Minister for his assistance.
I welcome what my right hon. Friend the Minister for the Cabinet Office has said to reinforce the commitment to early parliamentary scrutiny. That is one of the undertakings given by Ministers that have helped to create the spirit of consensus and movement arising from the legislation.
I wish also to congratulate the Parliamentary Secretary, Cabinet Office, my hon. Friend Edward Miliband on the exemplary way in which he has taken the Bill through the House. It is quite a challenge to take on a Bill such as this in the first stages of one's ministerial career, and he has done an outstanding job.
The Bill will help to clarify the meaning of charitable purpose, as defined in clause 2. That definition is now clear and includes issues such as animal welfare, which many of us have wished to see expressly set out in legislation. Probably the most important aspect is the creation of a level playing field in the application of the public benefit test. That is an excellent development.
The Bill takes the values of charity, which have been tried and tested over generations, and reinterprets them for a modern age. Fortunately, they have not been interpreted too narrowly, which was a danger had we over-amended the Bill, but in a way that will give the Charity Commission authority in taking its work forward. It is important that the commission ensures that fee-charging charities take active steps to mitigate the impact of fees and maximise the public benefit, as transparently as possible. The outcome of those steps must be to ensure that someone who is able to benefit from a charity's services and who is eligible to do so has a reasonable chance of doing so.
I referred earlier to a conversation with the chief charity commissioner and she has confirmed that the words I am using correctly interpret her position, and I hope that that will be of some comfort to Mr. Turner. On method and timing, the chief commissioner confirmed that while the responsibility to meet the legal requirements and satisfy the commission lies with the trustees of each charity, she will encourage sectors to work with the commission to develop good practice guidelines and to work progressively towards clear standards, and to develop the ability to demonstrate how they are doing so. In other words, it is an engaged process—a relationship with charities of a very positive sort.
That is consistent with the concept of continual improvement that is now generally accepted in the sector as being right in principle and necessary to the achievement of proper accountability. I believe that it is a sensible and progressive development of the standards for which our charitable sector is renowned. There is a clear expectation of timely action, but with no harsh grinding of gears.
That is why the hon. Member for Isle of Wight was wrong to imply that there was a degree of uncertainty, both in the Bill and about what the Charity Commission will do in interpreting it. The Charity Commission will not have to respond to Ministers or to their policy statements, and that is why I have been at pains to quote at some length what the chief charity commissioner has said about her understanding of what Parliament is doing to provide clear law.
I believe that the Charity Commission has raised its game over the past few years. I now feel very confident that it will discharge robustly the responsibilities that Parliament is giving it, but with common sense and professionalism. Therefore, the doubts expressed by the hon. Member for Isle of Wight are ill founded, and I hope that he will accept what the chief charity commissioner has said about her interpretation of the commission's remit from Parliament. That is a matter of emphasis, but an important one.
In the forthcoming spending review, I am sure that my hon. Friend the Minister and my right hon. Friend the Minister for the Cabinet Office will want to encourage the process of continual improvement in the sector, and to ensure that the Charity Commission is well equipped to drive that process forward. In the meantime, I am certain that the Bill serves charities well, without being too prescriptive about the definition of public benefit. The principle is clear and has stood the test of time, but we need to reinterpret it for the modern age. That will be necessary again in the future, as eternal ideals must continually be interpreted anew as they are applied to contemporary conditions and challenges.
When my right hon. Friend the Prime Minister was Leader of the Opposition, he asked me to do some work on improving the relationship between Government and the charitable and voluntary sector. I have been increasingly aware ever since that, although legislation and clarity about principles are important, it is people who drive charitable endeavour, and that legislation needs to nurture enterprise and vigour in that sector.
This Bill, in the form that it has acquired as a result of the parliamentary scrutiny process, is eminently fit for that job. I commend the efforts of those Ministers who have produced it.
I should like to begin by thanking the Minister for the Cabinet Office for her kind words, and I congratulate both her and Mr. Turner on their performances in the debates on this Bill. I also want to congratulate many of the members of the Standing Committee, especially Alun Michael and Helen Goodman, both of whom made valuable contributions.
Indeed, Back Benchers of all parties have made interesting contributions, and credit should also go to Miss Widdecombe, to Mr. Grogan and to my hon. Friend Dr. Harris. All of them extracted some important statements from the Minister, who showed that he was willing to engage with hon. Members of all parties and to listen to what they had to say.
The importance of the Bill really came home to me when I addressed the annual general meeting of a local charity, Cheltenham Community Projects, which helps some of the most vulnerable people in our town. The previous year, I had been sent away with something of a flea in my ear, having been told that MPs should try to lift the regulatory burden and other impositions placed on smaller charities if we wanted to encourage volunteering.
I think that I can go back to the staff of CCP and look them in the eye. They were about to consider pursuing company status, but they will now be able to pursue charitable incorporated organisation status. That will be a great improvement for all such charities.
I remain a member of the Institute of Fundraising, which has welcomed the Bill's proposals on fundraising. For the Government to get its support is no mean achievement. The particular issue is street collections and face-to-face collections of funds—very important sources of income, as Christian Aid alone derives £15 million a year from street collections. Face-to-face fundraising from direct debits and standing orders raises £37 million of new donations every year, probably adding up to £184 million of donations over the lifetime of the donors for each charity. Some rather unfairly describe the people who collect these donations as chuggers, which is a rather insulting description of people—some still volunteers—who work very hard to generate that sort of income.
Speaking as someone who has asked about a registered charity in the past—in fact, on the Minister's first day in the job—I would like to change my definition to charity huggers as opposed charity muggers. That provides a much better definition of these people.
I am grateful for that contribution, which is very much in the spirit of the Bill.
I continue to have some reservations about the fundraising elements of the Bill, but I hope that the Minister will reassure me that he is keen to ensure that the local authorities given new powers to regulate street fundraising are not over-zealous in their application.
I have other reservations about other parts of the Bill, including clause 38 on the liability of trustees. It still fails to protect trustees from liability in respect of pursuing ethical investment policies, which strikes me as entirely laudable, so will the Minister look further into providing ways in which such ethical policies could be pursued by charities just as they are by others?
I view the charity tribunal as a very welcome development, as it is absolutely right to have a court of appeal against decisions by the Charity Commission. In Committee, I provided a particular example of the need to allow the tribunal also to hear decisions that were not taken by the Charity Commission. That argument was lost on the Minister, but he was kind enough to describe the issue as extremely important. It is not yet clear how it is to be tackled, but I look forward to hearing the Minister's comments.
Issues of academic freedom are also relevant. There are no powers to protect academic freedom—as there are in the Higher Education Act 2004, for example—and the Charity Commission has quite draconian powers to remove entire boards of trustees. Those now apply to some higher education institutions and collegiate universities, so the need to protect academic freedom remains an important issue. These matters will have to be pursued in other ways and in other places, but I hope that the Minister will take them into account. I am hopeful that he will, because both in today's debate and in Committee he demonstrated a general willingness to listen and to respond, which has been greatly appreciated on the Liberal Democrat Benches.
Finally, I would like briefly to thank the researchers who helped me during the Bill's passage—Jake Rigg, Jessica Hambly, Elizabeth Poston and Hollie Voyce— who at times had more influence on the Minister than I did. I am most grateful for their contributions. I am delighted to be present at the final stages of a Bill that I first debated when I was working in the charity sector and was not even a candidate for Parliament. It is pleasing to be in my place for the final stages.
At the risk of further alienating my hon. Friends, may I further praise the Minister for his conduct both in Committee and outside? I have noticed that when hon. Members compliment one another, particularly across the Chamber, there is usually a "but" coming, so I hope that the Minister will allow me to register one or two buts in my contribution.
Clearly, we need the best possible framework to help the charitable sector reach its full potential, but I am not fully convinced that parts of the Bill will assist it to do so. Hon. Members on both sides of the House have spoken about the removal of the presumption of public benefit. I do not oppose the test per se, but I raised my concern in Committee that more schools rather than fewer schools should benefit from having charitable status. As the public benefit test is ratcheted up, it is possible that fewer will receive charitable status. I would probably be more comfortable if the test, and what it constitutes, were built more clearly into the Bill. I understand that no such definition to allow the necessary flexibility exists in the provisions before us. That will lead to confusion and a lack of clarity.
It is vital that clear and concise guidance is given to independent schools about what is likely to be in the test. I understand that the Charity Commission is already holding discussions with representatives from the independent sector, but from my discussions with independent schools in my constituency I know that they are already concerned about where the bar will be set. Although I was a member of the Committee, I was unable to provide adequate advice to a governor who came to see me about the issue.
I asked the Minister about trustees with learning disabilities, with particular reference to a charity of which I am a trustee, the SHIELDS—supporting, helping, informing everyone with learning disabilities—parliament in Southend, which acts as an advocacy centre for learning disabilities. In Committee, the Minister assured me that guidance documents were being refined; indeed, he precipitated discussions between the Charity Commission and the SHIELDS parliament, and I thank him very much for that. I also welcome the measures to make it easier for charities to recruit new trustees. I sincerely hope that they find those measures helpful.
Key to the framework of the charity sector is the role of the Charity Commission. I realise that it is committed to reducing the administrative burden of regulation for charities by more than 25 per cent. over the next four years. Like most Members, I welcome that step, but I am concerned about the threshold for registration. It has been raised to £5,000, but that is still too low; conversely, the level of bureaucracy in the commission is too high.
I support the amendment tabled earlier by my hon. Friend Mr. Turner, which proposed that the charity appeal tribunal should administer a suitors fund, or something similar. If small charities cannot appeal to the tribunal, its real value will be limited. Finally, I thank the Minister for reconsidering the definition of sport. I also express my personal thanks to him for not repeating the minutiae of some of the debate in Committee, as that certainly was not necessary.
I want to respond briefly to a point made earlier by Tom Levitt. If I remember correctly, he said that some Conservative amendments in the Lords might have limited the scope of charities to the UK and restricted their international work.
I was curious and a little concerned about the hon. Gentleman's remarks, so I spoke to him as he left the Chamber. He told me that no such Conservative amendment had actually been tabled, but he thought that there had been talk of one. For the sake of accuracy, I do not want anyone reading the report of the debate to be under a wrong impression about what my party did in the Lords on this matter. We thoroughly welcome the important work of charities both in this country and abroad, and I want to put that firmly on the record.
It is a privilege to wind up the debate. Subject to deliberations in another place, this is the last debate on the Bill in the House. Before I make some closing remarks, I shall respond briefly to some of the questions that have been raised in the debate. Mr. Turner referred to a suitors fund. The premise of the tribunal is that it should be simpler, cheaper and quicker for charities to use it without the need for expensive legal advice or representation. However, if in practice it becomes apparent that legal representation is routinely required and that the costs present a barrier, we will have to revisit our position on the suitors fund. I assure him that it will be part of the review process.
Martin Horwood has been persistent about decisions not to open an inquiry. I have talked to the Charity Commission about that matter and it appreciates the need for greater transparency in that area. In its compliance role, the commission relies extensively on matters of concern being brought to its attention. Once a complaint has been made and an inquiry requested, the commission will acknowledge receipt and may seek further information. The complaint will be subject to thorough assessment to determine how it is to be dealt with. The commission will let the complainant know how the case will be handled in the commission and its outcome and, where possible, the reason for the decision. I have already pointed out to the commission what the hon. Gentleman has said on that subject.
As for local authorities and raising funds, I know that there is anxiety among charities that carry out face-to-face fundraising. Local authorities were able to discriminate against them, but we are confident that that will not be possible under the Bill.
My point about face-to-face fundraising was not that it was impossible under the Bill; in fact, we argued that it was possible. If local authorities are inclined to be vexatious, will the Minister urge the commission to direct them not to act in that way?
I certainly cannot give directions to the commission, but I am confident that under the Bill, there is no opportunity for vexatious local authorities to prevent fundraising as the hon. Gentleman suggests. He mentioned ethical investment, but charities have quite a lot of latitude in that area. A Charity Commission publication, CC14, explains that, but I suspect that discussion on the subject will continue.
In closing, let me make three simple points. First, the legislation has greatly benefited from the long deliberation that has taken place, which included pre-legislative scrutiny. I pay tribute to the work of my right hon. Friend Mr. Milburn and other members of the Joint Committee. I thank, too, my right hon. Friend Alun Michael and my hon. Friend Tom Levitt, both of whom have helped me.
The long deliberation meant that three Ministers were involved with the Bill, including myself, and I thank my predecessors, my hon. Friends the Members for Slough (Fiona Mactaggart) and for Wythenshawe and Sale, East (Paul Goggins). I thank, too, hon. Members on both sides of the House for taking part in our debate and improving the Bill, particularly Mr. Turner. He was a schoolteacher in a former life, and sometimes, when talking to him, I felt as though I was undergoing a hard exam session, but the Bill is the better for his contribution. The same is true of the hon. Member for Cheltenham, who sought to improve the Bill, and has indeed done so. He took remarks about the Cheltenham principle and über-chuggers in the spirit in which they were intended. I thank my hon. Friend Liz Blackman, who has guided me through the process, and my hon. Friends the Members for City of Durham (Dr. Blackman-Woods), and for West Bromwich, West (Mr. Bailey), who offered valuable help. I take the opportunity to thank a hard-working team of officials, led by Richard Corden, and the parliamentary draftsmen, whose work often goes unnoticed.
Secondly, I thank the Charity Commission for its contribution. It has come in for stick at times during the progress of the Bill, but there is general recognition across the House that it has a difficult job, given that there are 190,000 charities but only a few hundred staff at the commission. The staff now have the heavy responsibility of implementing the Bill, under the leadership of Dame Suzi Leather, the new chief charity commissioner. They take that responsibility seriously, and will seek to demonstrate the qualities of a 21st-century regulator.
Finally, I pay tribute to the 190,000 charities across the country, which are the subject of the Bill. We all have charities in our constituencies, and they demonstrate what Beveridge long ago called the
"driving power of social conscience".
They are making a difference across our country, and the Bill aims to support them in their inspiring work. I commend it to the House.
Question put and agreed to.
Bill accordingly read the Third time, and passed, with amendments.