New Clause 1 — Appeals and applications to the Tribunal

Charities (Protection and Social Investment) Bill [Lords] – in the House of Commons at 1:21 pm on 26th January 2016.

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(1) In Schedule 6 of the Charities Act 2011 (appeals and applications to Tribunal), insert in the appropriate place—

“Decision of the Commission to issue a warning under section 75A to a charity trustee, trustee for a charity or a charity. The persons are—any of the charity trustees of the charity; and (if a body corporate) the charity itself. Power to quash the decision and (if appropriate) remit the matter to the Commission.”
   

(2) If the charity decides to appeal against a warning, under Schedule 6 of the Charities Act 2011, the Commission will not publish the warning for at least 28 days from the date of the submission of the appeal.”—(Anna Turley.)

Brought up, and read the First time.

Photo of John Bercow John Bercow Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Speaker of the House of Commons

With this it will be convenient to discuss the following:

New clause 2—Disposal of assets

The Charity Commission shall ensure that independent charities are not compelled to use or dispose of their assets in a way which is inconsistent with their charitable purposes.”

New clause 3—Power to make representations

“(1) A charity may undertake political campaigning or political activity in the context of supporting the delivery of its charitable purposes.

(2) A charity may campaign to ensure support for, or to oppose, a change in the law, policy or decisions of central government, local authorities or other public bodies.”

New clause 4—Power to hold hearings on fundraising regulation and charity activity

“(1) The Commission has the power to hold public hearings with representatives from charities, charity trusts and other relevant bodies on fundraising regulation and charity fundraising activities.

(2) Representatives appearing at the public hearings specified in subsection (1) are protected by legal professional privilege.”

This amendment requires the Charity Commission to hold annual hearings on fundraising regulation and the workings of charities and provides participants with the protection of legal professional privilege.

New clause 5—The Charity Commission as primary guarantor of the regulatory system for fundraising

“(1) Section 69 of the Charities Act 2006 (Reserve power to control fund-raising by charitable institutions), which inserts section 64A into the Charities 1992 Act (Reserve power to control fund-raising by charitable institutions) is amended as follows.

(2) In subsection (1) for “Minister” substitute “Charity Commission”.

(3) After subsection (8) insert—

“(9) The Charity Commission shall report annually to the Minister on the exercise of its powers under this section.

(10) On reviewing the annual report or if the Secretary of State considers the Commission is not effectively exercising its function as guarantor of the regulatory system the Minister may himself exercise the powers under this section.””

This amendment makes the Charity Commission the primary regulator of charities fundraising activities, requires the Charity Commission to report annually to the Cabinet Office on its regulation of charitable fundraising, and allows the Government to intervene in this regulation as a last resort.

Amendment 9, in clause 1, page 1, line 12, at beginning insert “Subject to subsection (3)”.

Amendment 8, page 1, line 12, leave subsection (2) and insert—

‘(2) The Commission may issue a warning to a charity trustee, a trustee for a charity or a charity in any way it considers appropriate but may not publish a warning to a wider audience.”

Amendment 10, page 1, line 15, at end insert—

‘(2A) If the Commission decides to publish a warning under subsection (2) it must do so in a manner which does not identify the charity, or charity trustee, in relation to which the warning is issued.”

Amendment 11, page 1, line 16, after “give” insert “at least 14 days”.

Amendment 12, page 2, line 6, leave out subsection (b) and insert—

“(b) such advice or guidance that the Commission considers may assist the charity to remedy the conduct which gave rise to the warning, as referred to in (a) above.”

Government amendment 2.

Amendment (a), line 10 at end add—

‘( ) If the Commission publishes notice that a warning has been withdrawn under subsection (2), the notice must state the reasons for the withdrawal.

( ) No record of a warning withdrawn by the Commission should be held on the Register of Charities.”

Government amendment 3.

Amendment 1, in clause 9, page 10, line 2, at end insert—

‘(22) Before this section comes into force, the Secretary of State shall lay a report before Parliament on the impact of the extension of the disqualification framework on—

(a) people with criminal records who are trustees of, or employed by, charities, and

(b) charities which work with, or employ, ex-offenders.

(23) The report shall include, but not be limited to—

(a) an assessment of the number of people employed by charities who will be affected by the extension of the disqualification framework to cover senior management positions,

(b) an assessment of the number of people who are trustees of, or employed by, charities who will be affected by the extension of the list of specified offences for which people will be automatically disqualified from being a trustee of, or a senior manager in, a charity,

(c) an assessment of the impact of the new disqualification framework on former offenders who are seeking, or intend to seek, employment in the charitable sector, including on their recruitment, retention, career prospects and long-term rehabilitation and resettlement,

(d) an assessment of the impact of the new disqualification framework on former offenders who are currently employed in the charitable sector, including on their retention, career prospects and long-term rehabilitation and resettlement,

(e) an assessment of the impact of the new disqualification framework on people with criminal records who are trustees or employees of charities which are partners in, or are contracted by, community rehabilitation companies (CRCs) and its impact on the successful running of those organisations,

(f) an assessment of the effectiveness of the existing waiver process provided for under section 181 of the Charities Act 2011,

(g) an assessment of the impact of the new disqualification framework on the number of applications for waivers to the Charity Commission,

(h) a description of how the working group set up by the Charity Commission on the waiver process will be constituted, how it will be resourced, what timelines it will be working to, its working method and intended outputs, and how it will work in consultation with people with criminal records and charities that work with, or employ, ex-offenders,

(i) a description of the criteria the Charity Commission will adopt in considering applications for waivers, and the weight it will attach to the views of the trustees of the charity or charities concerned,

(j) a description of how the waiver process will operate in relation to prospective candidates for senior management positions in charities, including the timescales for decisions and mechanisms to ensure that ex- offenders do not suffer indirect discrimination as a consequence of delays in assessing applications for waivers while a competitive recruitment process is underway,

(k) an assessment of the impact of the new disqualification framework on the resources provided by the Charity Commission to administer the waiver application process.”

This amendment would require the Secretary of State to lay before parliament a report on the impact of the extension of the disqualification framework on people with criminal records who are trustees of, or employed by, charities, and on charities which work with, or employ, ex-offenders before the section came into force.

Amendment 13, in clause 10, page 10, line 7, after “person” insert “or persons”.

Government amendment 4.

Amendment 14, page 10, line 35, leave out

“(either generally or in relation to the charities or classes of charity specified or described in the order)” and insert

“, as defined by the Commission in a specific document to be published after consultation and renewed”.

Amendment 15, page 11, line 33, after “conduct” insert “both relevant and serious”.

Government amendments 5 to 7.

Photo of Anna Turley Anna Turley Shadow Minister (Cabinet Office)

It is a pleasure to speak today on behalf of Her Majesty’s Opposition about this, my first Bill. The Committee process has been excellent, and I welcome this opportunity to revisit the Bill and talk again about some of the issues that were raised.

The main objective of the legislation is to provide a strong regulatory framework to support the charity sector and its trustees. In particular, it aims to strengthen the Charity Commission’s arm by giving it more powers to regulate charities. That is an important objective, which we support, but we are clear that the right safeguards must be in place. The Charity Commission is the guardian of public trust and confidence in charities. On the whole, it does an excellent job, particularly in the context of the assault on its budget over the past six years. It is important for the integrity of the charitable sector that the commission should have the tools to do its job properly, and for that reason we support many of the Bill’s provisions.

However, as with any regulator, it is vital to ensure that the commission’s powers are subject to appropriate safeguards. Unfortunately, some of new powers for the regulator introduced by the Bill lack such safeguards and therefore leave scope for the commission to overreach itself. That threatens the independence of charities and the integrity and reputation of the commission, and it could fundamentally change the relationship between the commission and the charity sector.

Our concerns are shared by the sector, its advisers and more widely—the Charity Law Association, for example, has said that the new powers in the Bill need to be balanced by appropriate and proportionate safeguards. It points out that the new powers will apply not only in rare cases of deliberate abuse but to all charities and their many hundreds of thousands of well-meaning volunteer trustees.

A group of sector umbrella bodies, including the Directory of Social Change, the Association of Chief Executives of Voluntary Organisations, the National Council for Voluntary Organisations and the Charity Finance Group, have all expressed serious concerns about the lack of safeguards. The Joint Committee of the House of Lords and House of Commons that scrutinised an early draft of the Bill called for necessary safeguards to be included, and, of course, we pushed for those in Committee.

The Minister may point out, as he did in Committee, that the Charity Commission has a statutory obligation to act proportionately. We acknowledge that, but experience has shown that, sadly, that is not enough. In a recent High Court case involving the commission and the Joseph Rowntree Charitable Trust, the Lord Chief Justice referred to “ludicrous time limits” imposed by the commission in a regulatory situation; he said he could understand why it was felt that the Charity Commission had behaved in an extremely high-handed manner in that case.

The commission should, of course, have the power to do its job, but sensible limits should be imposed on how it exercises its powers. Our amendment would redress the balance.

Photo of Barry Sheerman Barry Sheerman Labour/Co-operative, Huddersfield

I congratulate my hon. Friend on her excellent speech. I am a trustee of many charities; one of the concerns that those of us who work in the charitable sector have had for a long time is the weakness of the Charity Commission. Usually, its legal department is terrified of a case ending up in the High Court. I support the Bill: we need a strong commission that can do its job as it has not been able to do it for many years.

Photo of Anna Turley Anna Turley Shadow Minister (Cabinet Office)

My hon. Friend is absolutely right; that is why we support the Bill and the powers it gives to the Charity Commission. My hon. Friend is also right in talking about what is sometimes a lack of clarity and a confusion, which can be costly. We are really keen to get clarity on the grey areas, boundaries and improper balances in the Bill. It is really important that we get those on the record while the Bill has yet to be enacted and before we end up with costly processes in the High Court.

I turn specifically to new clause 1 and amendments 9, 8, 10, 11 and 12, which apply to clause 1, which relates to the Charity Commission’s new power to give warnings.

The Bill introduces a new power for the Charity Commission to issue official warnings to a charity or a charity trustee. The explanatory notes say that the power is intended to be used when the risk of an impact on charitable assets and services are relatively low, but the new power could have a far-reaching impact on charities that receive a warning. The Bill gives the commission complete discretion about publicising a warning. That could have serious reputational implications for the charity involved: the public, the media and funders may well not distinguish between a low-level issue giving rise to a warning and something much more severe. It is important that we consider the issue in the context of the high profile media issues raised recently. After all, official warnings issued by other regulators indicate a serious and high level of concern; under the Bill, the commission can issue a warning on the strength of a low-level breach of trust or just a breach of duty by a charity trustee. Indeed, it is our understanding that it intends to use the warning power in low-level cases.

As all hon. Members know, reputation is paramount for charities and charity trustees. The adverse publicity resulting from a warning could lead to a choking off of donations, grant funding and corporate sponsorships, leading to a closure of services and, potentially, to redundancies. A warning can be used as a trigger for further regulatory action; clause 2 makes a change to the circumstances in which the commission can take significant protective measures in relation to charities so that the failure to remedy an alleged breach of trust or duty specified in a warning is automatically a trigger to more serious action. That seems a startling implication for a power intended to be used in low-level cases and makes it all the more important that there should be safeguards around the exercise of the power.

Our amendments address those concerns in four ways. First, through amendment 9 and 8, they would limit the commission’s scope to publish the warning to a wide audience. The charity and its trustees would receive the warning, but no wider publicity would be involved. The warning would ensure that the charity took the commission’s concerns seriously, but would have no adverse effect on its reputation. If the charity failed to comply with the warning, the commission could take more significant regulatory action at that stage, and that might attract publicity. Low-level concerns, however, would not be publicised, to ensure that the commission’s action was proportionate and did not seriously impact—potentially fatally—a charity for a relatively minor error.

Photo of Peter Kyle Peter Kyle Labour, Hove

It has been stated numerous times that the Charity Commission often sees itself as a partner in trying to improve and work with charities. Would not the method that my hon. Friend is describing be one more of partnership, using the expertise of the Charity Commission to improve and tackle the challenges that charities face in the front line? That is a much more collaborative approach, aimed at delivering outcomes for the beneficiaries, rather than a public bust-up, which could damage the Charity Commission, charities as a whole and the individual charity concerned.

Photo of Anna Turley Anna Turley Shadow Minister (Cabinet Office)

My hon. Friend makes an extremely important point. It is clear that when the Charity Commission works in terms of its role of supporting, encouraging and giving guidance to charities, it is extremely effective. Particularly given the pressures on its finances, expecting it to undertake a wide range of enforcement in this manner is potentially quite costly.

Alternatively, amendment 10 would allow the commission to make details of the warning public without referencing the charity, or a charity trustee, by name. This would allow the commission to publish a warning anonymously if it felt that it held important lessons for the wider charitable sector, but without the consequent impact on the charity.

Secondly, under amendment 11 the commission would be obliged to give the charity adequate notice of its intention to issue a warning. The Bill states that

“the Commission must give notice”,

but there is no specified notice period. That means that there is nothing to stop the commission giving less than 24 hours’ notice of its intention to issue a warning, which would give the trustees, who are very often hard-pressed volunteers, and any charity staff almost no time to respond. This is a serious risk. In the High Court judgment that I mentioned, it is understood that charity trustees were given less than 24 hours to respond to the commission, prompting the Lord Chief Justice, as I said, to describe the time limits as “ludicrous”.

This concern has already been raised by the Joint Committee that reviewed an earlier draft of the Bill. It recommended that a reasonable minimum notice period to make representations on a draft warning should be made clear in the Bill. The Government’s response to the Joint Committee’s report accepted that a recipient should have the opportunity to make representations on the warning for the commission to consider before it is published. In our view, this requires the inclusion of a minimum notice period in the Bill, and that is what our amendment seeks to achieve. The Government may argue that there could be circumstances where the commission has such serious concerns that it must act swiftly and without notice. In such cases, the commission should exercise some of its other regulatory powers designed for more serious concerns, some of which may be used without advance notice. We have been told that the warning power is not intended for such serious cases.

We also propose a small amendment, amendment (a), to Government amendment 2 on the proposed power to withdraw or vary a warning. Our amendment is designed to help reduce any reputational damage to a charity that might result from the inappropriate issuing of a warning. It is absolutely right and fair that if the warning was subsequently found to have been incorrectly given, then it should be publicly revoked and any damage sought to be undone.

Thirdly, amendment 12 seeks to ensure that it is absolutely clear in the Bill that the commission will not be able to use its warning power to direct charities. It is not appropriate for the commission to be able to direct charity trustees on how to act. It is very clear from the Charities Act 2011 that the commission is not able to act as a charity trustee except for very limited exceptions. In a small range of circumstances, the commission can issue statutory directions to charities, but these are rightly subject to very strict safeguards. It seems that the Government agree with this principle. In responding to the consultation on the extension of the Charity Commission’s power that was a precursor to the Bill, the Government specifically decided not to extend the commission’s powers to make directions outside a formal statutory inquiry. If the commission could use the warning power as a way to direct charities, it would be able to give directions via the back door. This is a fundamental shift in the delicate balance of the relationship between the commission and charities, and it should not be allowed.

We would welcome some clarification from the Minister on this point, as there seems to be confusion in the sector about it. We understand that the commission does not regard the warning power as giving it the power to direct charities, yet the explanatory notes to the Bill imply the opposite, stating:

“Where the Commission considers it disproportionate and unnecessary to open an inquiry purely for the purpose of making a direction, issuing an official warning could be an alternative way of making it clear to a charity that they should take action.”

Confusion over a similar issue gave rise to the High Court case that I mentioned, prompting the Lord Chief Justice’s comments about the commission’s actions. Our amendment makes it clear that while a warning can be used to give advice or guidance to a charity—which can often be very positive, as my hon. Friend Peter Kyle said—in order to remedy the conduct that gave rise to it, it absolutely cannot be used to direct the trustees to take action.

New clause 1 would allow for the issuing of a warning to be appealed to the Charity Tribunal. I have already explained the potentially significant consequences that the issuing of a warning has for a charity. The Charity Tribunal is a low-cost forum that was established in the Charities Act 2006 especially for charities wishing to challenge the commission. In the absence of an express right of appeal, charities affected by a warning are able to challenge it only via judicial review. Judicial review is expensive, complicated, and time-consuming. It is a completely inappropriate option for a mechanism that is intended to address low-level non-compliance. The Charity Tribunal was introduced precisely so that charities would not have to rely on costly judicial review proceedings to challenge the commission’s decision making. There is no good reason, and I am afraid none was forthcoming in Committee, as to why it should not be possible to appeal an official warning to the Charity Tribunal. It is illogical that the exercise of the warning power should be more difficult to challenge than the exercise of the commission’s more extensive regulatory powers, which can be appealed to the Charity Tribunal.

It is worth my highlighting again, first, that a warning can be issued if the commission considers that there has been a breach of duty—something that may well be disputed by the charity—and, secondly, that failure to comply with a warning can of itself allow the commission to take more significant regulatory action. These two factors make it even more important for a charity to have an accessible, realistic way of challenging a warning.

Amendments 13, 14 and 15 refer to clause 10 on the power to disqualify. The Bill will give the Charity Commission a completely new power to disqualify someone from being a charity trustee. Again, we have significant concerns about the scope of this power, and again, we are not alone. The Joint Committee expressed concerns about the safeguards that accompany this power. The Charity Law Association has said that although the test for disqualification

“appears superficially to be robust, it is in fact insufficiently defined and lacks clarity and adequate safeguards.”

While the commission is naturally concerned to protect charities from unscrupulous trustees, and we support that aim, it is important to recognise the adverse impact that disqualification might have on an individual.

Our amendment would improve the power in three ways. One of the preconditions of the exercise of the power is that the commission should be satisfied that the person concerned is unfit to be a charity trustee. The Bill includes no guidance at all as to the meaning of “unfit”, which leaves a considerable degree of discretion in the hands of the commission and no benchmark against which unfitness can be judged. Amendment 14 would oblige the commission to publish a definition of “unfit”, after public consultation. This would go some way towards introducing objective criteria by which to assess unfitness. Where the commission disqualifies a person on the basis of past conduct that it considers is likely to be damaging to public trust and confidence in charities, our amendment 15 would make it clear that the conduct must be both relevant and serious.

Amendment 13 seeks to ensure that in situations where there has been a collective failure by more than one individual trustee, more than one person can be disqualified. This could be necessary in situations where more than one member of a board has been complicit and the board has collectively turned a blind eye to an abuse or misdemeanour within a charity. In some of the sexual abuse cases that have come to light recently, there has been what can only be described as a conspiracy of silence. This amendment seeks to challenge that.

These amendments and new clause 1 are intended to provide safeguards on the new powers of the Charity Commission. We believe that they will serve to strengthen the original clauses, not weaken them. Powers that place too much decision-making responsibility in the hands of the commission in making finely balanced judgments and executing actions with significant consequences could lead to confusion, error, suspicion and mistrust between the sector and its regulator. Greater clarity, a more balanced approach, and a strengthening of the boundaries of the relationship will give greater confidence to both sides on how to proceed in using the Bill’s new powers.

Photo of Rob Wilson Rob Wilson The Parliamentary Secretary, Cabinet Office 1:45 pm, 26th January 2016

It might helpful if I clarify one of points that the hon. Lady raised about the power to direct. An official warning is not the same as a direction power. I am aware of the potential confusion regarding the explanatory notes that she mentioned. If it is helpful to her, I would be happy to ensure that the explanatory notes are updated to make it absolutely clear that the warning power cannot be used to direct charities.

Photo of Anna Turley Anna Turley Shadow Minister (Cabinet Office)

That is very helpful indeed. I really appreciate the Minister being so quick and forthcoming with his clarity on that, which will give the sector a lot of reassurance.

I now move on to our new clauses 2 and 3. New clause 2 seeks to replace a clause that was put into the Bill during its passage through the other place but removed in Committee. I pay tribute to our noble Friends in the other place who successfully added the clause to the Bill. As with so much legislation at the moment, we are finding them to be great defenders of social justice and fairness.

New clause 2 would support trustees in carrying out their existing duties by ensuring that they can adhere to their charitable aims and objectives, and it would protect them from being compelled to undertake an action at odds with their charitable purposes. As we have always made clear, especially in Committee, the provision is particularly relevant to housing. It aims to protect charities and housing associations if the Government mandates them to sell their charitable property under the right-to-buy proposals.

Labour Members want those who desire to be homeowners to achieve their aspiration. While the number of homeowners has fallen by more than 200,000 under this Government, the number rose by more than 1 million under Labour between 1997 and 2010. I want to be clear that we support people’s aspiration to own their own home.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

I agree with what my hon. Friend is saying, but the level of owner-occupation is declining because house prices have risen way beyond the ability of most people to afford them. Is not the real problem the need to have decent social rented housing, and should we not keep all existing social housing in the public sector to make sure we can house people properly?

Photo of Anna Turley Anna Turley Shadow Minister (Cabinet Office)

My hon. Friend makes an extremely important point. We know that home ownership is falling and, as he says, the real crisis is in social housing. The purpose of new clause 2 is to protect what social housing we have and maintain it in the hands of the charitable sector and housing associations that own it, as well as to ensure that it is used for its intended purpose, not sold off for profit.

The problem our new clause seeks to address is that of compulsion. This is about the fundamental rights and the position in law of housing associations and charities. The independence of the charitable sector from Government is an important strength of British civic society, and one that must be cherished. We do not support the right of a Government to direct a charity, against its independent will and contrary to its charitable purposes, to dispose of its assets according to the Government’s desire. That is an infringement of the independence of charity, community and voluntary sector organisations. For many housing associations, it goes against the very grain of their founding purpose.

Housing associations, many of which are charities, provide 2.5 million homes for 5 million people on affordable rents. Many enable vulnerable people, or those with disabilities or care needs, to live independently. Other properties are for shared ownership, to help those on lower incomes to buy their homes. These aims are in the charitable DNA of housing associations and are not for the Government to tamper with.

The unintended consequences of the right-to-buy proposals for housing associations could undermine charity law that goes back centuries. In essence, the proposals will allow the assets of independent charities, and even the bequests of individuals or philanthropists—for example, the Peabody Trust, which has built and bequeathed housing to ameliorate the conditions of the poor and needy—to be seized. Housing associations currently build 45,000 homes a year. Ideally, they would like to build 120,000 homes. That aim may be undermined if they are forced to sell off their stock.

Housing associations often lever in private finance on the basis of assets they already own in order to meet their wider charitable objectives and to manage their assets effectively. Right to buy will force housing associations to sell properties. It will give them less control over such decisions. Importantly, in relation to this Bill, it will make it more difficult for them to meet their charitable purposes.

Furthermore, any diminution of the housing stock could harm housing associations’ borrowing powers. The National Housing Federation has said:

“With a nation in the throes of a housing crisis, it is key that housing associations are in full control of the assets against which they borrow to build homes.”

Labour, as well as many housing associations around the country, has always said that the extension of right to buy to housing associations, through the Housing and Planning Bill, is unworkable and wrong. It will lead to a severe and irreversible loss of affordable homes at a time when they can never have been more needed, because the Government have no genuine plan for one-for-one, like-for-like replacement. Historically, only one in 10 homes sold have been replaced under the right to buy.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

Even those who support the sale of council houses and of housing association properties say that if the subsidy came directly from the Treasury, that would be very different from making housing associations and local authorities pay for the subsidy out of their assets.

Photo of Anna Turley Anna Turley Shadow Minister (Cabinet Office)

My hon. Friend is absolutely right. It has been apparent throughout the proceedings on the Housing and Planning Bill that there is a black hole in the plans to fund the whole proposal.

There are currently 2 million people on waiting lists due to the dearth of homes on affordable rents for low earners. Our new clause 2, which protects housing associations from being compelled to sell off homes, would prevent the further reduction in the supply of affordable social housing. Too often, history has shown that right-to-buy homes are resold. Many homes are rapidly rented out by private landlords at the full market rent, which serves to drive up market prices and increase poverty through higher housing costs, as well as reducing the housing stock available on affordable rents. All of that goes against the charitable objectives of most housing associations.

In summary, we are concerned that the Government want to interfere with the duties of charity trustees to put their beneficiaries first and to comply with their fundamental charitable purposes in how they manage their assets. Housing associations can already partake of right-to-buy options for their tenants where that accords with their charitable objectives. The problem arises where that conflicts with their objectives and trustees’ duties risk being overridden by the Government, which is simply not acceptable. That is what the new clause seeks to prevent.

New clause 3 would enshrine in legislation the right of charities to undertake political campaigning activity. We are clear that this is a direct attempt to challenge the unfair and poorly applied Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014, commonly known as the gagging Act. Campaigning is an important part of democracy and civil society. One of the fundamental principles of a thriving and healthy democracy is that individuals and organisations can speak out on the issues they care about.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

On new clause 2, the hon. Lady made a case about charities’ ancient rights. She will be well aware that the ancient rules, going back 400 years to the time of James I, were very much against charities involving themselves in politics. I accept that there have been changes in charity law more recently, but it seems rather perverse that she prays in aid ancient charitable rights in relation to new clause 2, but is happy to ride roughshod over them in new clause 3.

Photo of Anna Turley Anna Turley Shadow Minister (Cabinet Office)

On the contrary, it was the gagging Act that rode roughshod over the historic rights of the charity sector to defend and campaign on the causes that charities fundamentally exist to tackle.

Photo of Peter Kyle Peter Kyle Labour, Hove

My hon. Friend makes an incredibly powerful point. This is about freedom of speech for everyone—every citizen and every organisation in this country—but it is also about making sure that the disempowered, both individuals and communities who lack a voice, have advocates that can speak in as unencumbered a way as is humanly possible and with the ferocity that those in our society who lack a voice deserve.

Photo of Anna Turley Anna Turley Shadow Minister (Cabinet Office)

My hon. Friend is absolutely right. He pays tribute to the charities that do some of the most important work with the most excluded. Such people need a voice and are often those who suffer the consequences of bad policy making in this place. Charities often have to pick up the pieces of such policy making.

Photo of Susan Elan Jones Susan Elan Jones Shadow Minister (Wales)

I am slightly mystified by some of the comments about so-called political activity. We are talking about basic advocacy. We only have to go back to the end of the first world war to see the Royal British Legion campaigning for jobs for veterans and so on. We are not talking about party political campaigning. That is what the voluntary sector objected to in the 2014 Act.

Photo of Anna Turley Anna Turley Shadow Minister (Cabinet Office)

My hon. Friend is absolutely right. As she has ably demonstrated, charities have a long-established role in educating, informing the public, campaigning and securing positive social change throughout our history.

Photo of Wendy Morton Wendy Morton Conservative, Aldridge-Brownhills

Use of such terms can seem a little bizarre, but does the hon. Lady not agree that charities can already make representations, including to us as Members of this place? One of the big things about charities is that they have a special ethos that drives their work and activities. I therefore cannot understand why we should support new clause 3.

Photo of Anna Turley Anna Turley Shadow Minister (Cabinet Office)

It is quite clear that the charitable sector felt that the 2014 Act prevented them from being able to pursue exactly the aims that the hon. Lady sets out. We in this House share many things in common with the charitable sector, not least the effort to build a better society, so it is absolutely right that we should work together in partnership to build better policy making and to shape the kind of society that she cares about. Our new clause has not come out of thin air. We are reacting to a very bad piece of legislation, about which the sector feels extremely strongly. We want to continue to protect the sector.

Photo of Wes Streeting Wes Streeting Labour, Ilford North

Part of the problem is the use of the word “political”. Before the introduction of the gagging law, there was no provision for charities to engage in party political activity—activity in favour of a political party—and CC9, the Charity Commission’s guidance document on campaigning for charities, is clear about that. What problem does my hon. Friend think the Government were trying to solve when they introduced the gagging law? I do not think there was any such problem.

Photo of Anna Turley Anna Turley Shadow Minister (Cabinet Office)

My hon. Friend is absolutely right. I think the problem was that the Government felt challenged. From the outside, they were happy to talk about being the most open and transparent Government ever, but once in power, they pulled up the drawbridge and were nervous about the challenge they faced from the sector on key issues such as badgers and the bedroom tax.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

No one minds scrutiny. We are very happy to have bodies that want to engage in political lobbying, but they should not be charities. Charities have certain benefits, including tax benefits. Bodies that wish to be party political, biased advocates are perfectly able to be so if they are companies or other corporations. The point is that the charitable sector brings with it a range of benefits, not least in terms of taxation, that should not be abused for party political purposes.

Photo of Anna Turley Anna Turley Shadow Minister (Cabinet Office) 2:00 pm, 26th January 2016

Would not the right hon. Gentleman agree, therefore, that for a charity that is picking up the pieces left by diseases such as cancer or heart failure, it is a better use of taxpayers’ money to lobby for better investment in prevention and research and development?

Photo of Robert Jenrick Robert Jenrick Conservative, Newark

I am sorry to relive arguments that were heard in Committee, but the only example that was given to the Committee of the so-called chilling effect or of a charity being prohibited from carrying out activities by the so-called gagging law was that of the Badger Trust. That organisation was explicitly party political. The chief executive officer, Dominic Dyer, sent out an email using the charity’s email system to all its members, who may have had any party political affiliation or none, saying that he had contributed to the Labour party’s rural manifesto, that it was wonderful, that they should turn up at the launch of the manifesto, that they should take part in an anti-Cameron rally and, presumably, that they should vote Labour. The hon. Lady said that she supported that kind of behaviour, which was illegal. Surely Members from all parts of the House can agree that such behaviour is wrong. New clause 3 should be defeated because it would give the green light to that sort of extremely negative behaviour.

Photo of Anna Turley Anna Turley Shadow Minister (Cabinet Office)

I am surprised that the hon. Gentleman has a problem with negative behaviour—I am afraid that it is a fact of life. Having looked at the evidence from the Charity Commission on that case, I still struggle to see what was wrong with the situation. I am very happy to continue that conversation with the Charity Commission.

The hon. Gentleman says that that was the only evidence given. More than 160 charities signed a letter to the Government ahead of the general election saying that the legislation should be scrapped, including Save the Children, the Salvation Army, Oxfam, Greenpeace, Age UK and Amnesty International. The charity sector is up in arms.

Photo of Susan Elan Jones Susan Elan Jones Shadow Minister (Wales)

Surely the big problem that people had was that they did not like the idea of dodgy lobbyists giving money to dodgy politicians. It was not about victimising groups such as the Salvation Army. Robert Jenrick says that it was just the Badger Trust that was affected. If he had heard what the Countryside Alliance said at the all-party parliamentary group on civil society and volunteering about what it thought of the gagging Act, he would accept that a wide variety of groups are affected.

Photo of Anna Turley Anna Turley Shadow Minister (Cabinet Office)

My hon. Friend makes an extremely important point about the strength of feeling in the sector.

Photo of Martin Docherty Martin Docherty Scottish National Party, West Dunbartonshire

I share the concerns of Susan Elan Jones. Does Anna Turley agree that the gagging Act would have limited even the calls for the creation of the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly, which were led by the Church of Scotland, which is a registered charity in Scotland? Without new clause 3, it will not be possible to have an impact like the one that the Scottish Parliament has had on the so-called unwritten constitution of the United Kingdom.

Photo of Anna Turley Anna Turley Shadow Minister (Cabinet Office)

The hon. Gentleman makes an important point and I thank him for that contribution. I will make some progress, because I am conscious that many Members want to speak.

Not only should charities have the right to campaign, but they are often best placed to provide important insights that can inform and improve policy making. They are often the ones on the frontline who see the gaps in provision, the duplication of services and the inefficiency and waste, and who spot the best ways of solving or, better still, preventing problems. Many charities can make a bigger impact with their limited resources through campaigning than through service delivery alone.

Campaigning often saves taxpayers money in the long term, as issues can be addressed at their roots, rather than in the aftermath, which can be costly. For example, as I just mentioned, many charities provide fantastic care for patients with long-term conditions such as cancer, but is it not better for them to push for more effective treatment, more awareness of the symptoms and more support for diagnosis through campaigning? So much of that happens as a result of good policy making by politicians. That is why charities must seek to shape it.

Photo of Maggie Throup Maggie Throup Conservative, Erewash

I fear that under new clause 3, the hard-earned money that people donate to charities would be spent on political campaigning, rather than the initial cause to which they donate, such as true medical research. That is why the new clause is flawed.

Photo of Anna Turley Anna Turley Shadow Minister (Cabinet Office)

I am surprised that the hon. Lady presumes to know what people want to happen when they donate money. Many people who donate money to large charities such as Crisis and Shelter are very aware of the high-profile public campaigning that they do and of the pressure that they put on all of us in this House. That is to be commended. Many people support the powerful voice that such charities have in the community.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

To reinforce that point, many people support and donate to such charities precisely because they campaign.

Photo of Anna Turley Anna Turley Shadow Minister (Cabinet Office)

I completely share my hon. Friend’s view and am grateful for his supportive intervention.

Charities themselves have set out their concerns, including the fact that the scope of the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014 is very broad. They are concerned that the legitimate day-to-day activities of charities and voluntary organisations that engage with public policy will be caught by the rules and that a number of regulated charities, voluntary organisations and other groups will be substantially affected. They feel that the Act is incredibly complex and unclear, and that it will be difficult for charities and other voluntary groups to understand whether any of their activities will be caught, giving rise to the risk that campaigning activity will be discouraged.

Charities also feel that the 2014 Act gives substantial discretion to the Electoral Commission, creating an unnecessary and burdensome regulatory regime and possibly leaving charities, voluntary organisations and the Electoral Commission open to legal challenge. The legal opinion provided to the National Council for Voluntary Organisations by election law experts suggested that the rules were so complex and unclear that they were

“likely to have a chilling effect on freedom of expression, putting small organisations and their trustees and directors in fear of criminal penalty if they speak out on matters of public interest and concern”.

The 2014 Act stopped charities campaigning—they say so themselves—and caused unnecessary cost and confusion, according to a report by the Commission on

Civil Society and Democratic Engagement, which looked at its effect on last year’s general election. Drawing on evidence from UK charities and campaign groups, the commission found that charities were faced with confusion about

“the ambiguity of the definition of regulated activity.”

The commission states that as a result of that,

“many activities aimed at raising awareness and generating discussion ahead of the election have not taken place.”

A representative of the World Wide Fund for Nature told the commission:

“I think the Act has created an atmosphere of caution within parts of our sector. It has also wasted time in terms of analysis of it, explaining it to Trustees, staff etc. It is not…a piece of legislation we need.”

Greenpeace told the commission:

“We were meant to be participating in a huge cross-NGO campaign, but all apart from a couple of the organisations ended up not campaigning during the general election period leaving us with not enough partners to run the campaign.”

The Salvation Army stated:

“As we are not traditionally a campaigning charity we were not in danger of exceeding the top limit. However, we were wary of supporting causes that could be considered coalition campaigning because we felt the administrative cost would be excessive and we couldn’t control the level of spending.”

The Commission on Civil Society and Democratic Engagement also found that voluntary groups undertaking Government contracts regularly faced threats to remain silent on key Government policies. Many neglect to speak out on issues that are plaguing society, for fear of losing funding or inviting other unwelcome sanctions.

Photo of Anna Turley Anna Turley Shadow Minister (Cabinet Office)

I am afraid that I am nearly at the end of my speech, so I will finish.

The lobbying legislation looks to many in the sector too much like another deliberate and shameless act by a Government who are too scared to debate their record or to be open to scrutiny and challenge. The health of our democracy depends on people’s right to campaign on the issues they care about. The 2014 Act was an attack on our democracy. It limits the rights of charities to fight for important causes. It has left expert organisations that have a vital contribution to make to public debate unsure whether they are allowed to speak out. We seek to protect the right of charities to have a loud and respected voice in our democracy. I commend new clause 3 to the House.

Photo of Edward Garnier Edward Garnier Conservative, Harborough

I congratulate Anna Turley on her first speech from the Dispatch Box in the Report stage of a Bill. She gave a thorough explanation of her case on behalf of the official Opposition, although I am not entirely sure that I agreed with all of it. No doubt she gave it a lot of thought. She certainly gave us the benefit of her views.

I will not follow the hon. Lady up and down the badger setts of England and Wales, if that is all right with her, but I will speak to amendment 1, which stands in my name. I will do so, with the greatest of respect, in a slightly less aggressive way than her, although there is nothing wrong with aggression when one has something decent to say. I must declare an interest, as is indicated on the Order Paper, because I am a patron of Unlock, the charity that seeks to help people with convictions, and a trustee of the Prison Reform Trust. Both positions are unpaid.

I became interested in prison issues, the rehabilitation of offenders and so on when the Prime Minister, then the Leader of the Opposition, appointed me in the middle of the last decade as shadow Minister with responsibility for prisons and probation. As a consequence of that appointment, I visited about 65 of the 140 or so prisons, young offender institutions and secure training units throughout England and Wales. It became apparent to me—it was not a new idea, in that others had discovered it previously—that one of the things that contributes to the high levels of reoffending among those people who have been sent to prison and come out again, particularly among youngsters, is that they do not have a job or somewhere settled to stay, and that they have, to put it loosely, relationship problems. If we can do something to help people to form strong, stable relationships with families, partners or others, and if we can find them somewhere stable to stay and live, and if we can help them to get training or work, the chances that they will reoffend and go back to prison are very much reduced.

As a consequence of the voyage of discovery that I went on from 2005 or so until I was appointed shadow Attorney-General in 2009, I wrote a paper called “Prisons with a Purpose”. I hope that the Secretary of State for Justice—I see his Parliamentary Private Secretary, my hon. Friend Robert Jenrick, sitting in his place to my left—is picking up many of the ideas that I and my right hon. Friend Nick Herbert pushed forward in that period of opposition.

I suppose it is not a surprise that I have become attached to the Prison Reform Trust and to Unlock, but in speaking to my amendment 1, which is long—it is set out on page 5 of the amendment paper—I invite the Government to have a little think about the disqualification or waiver procedure that applies to people with criminal records, either in so far as they may be trustees of charities that have an interest in looking after ex-offenders, or in so far as they may be employees of those charities.

I hope that the framework of the amendment is clear in itself but, if I may—I will be as quick as I can because I know that my right hon. Friend Mark Field and other right hon. and hon. Members wish to catch your eye, Madam Deputy Speaker—I hope he and the House will forgive me if I take a little time in setting out what I intend to do. I should confess at the outset that I am very grateful to the Prison Reform Trust in assisting me in preparing for today’s debate.

The purpose of my amendment is to require the Secretary of State to lay before Parliament, before clause 9 comes into force, a report on the impact of the extension of the disqualification framework on people with criminal records who are trustees of, or who are employed by, charities that work with or employ ex-offenders. I intend to urge the Government to provide us with further clarification of the impact of the extension of the disqualification framework on people with criminal records and charities that work with or employ ex-offenders. The amendment also provides an opportunity for the Minister to outline in more detail how he and his

Department intend to conduct the review of the waiver process to ensure that people with criminal records who are existing employees or charitable trustees, or who are seeking or intend to seek employment or a trusteeship in a charity, are not unfairly discriminated against.

Clause 9 and the policy behind it are entirely worthy and understandable. We clearly do not want people who are engaged in terrorism to be using charities to move money around or to hide their outrageous behaviour; that is not controversial, but one problem might be the unintended consequence of the clause on people whom the Government may not want to impact. One has only to read out clause 9(5) to realise that someone who comes within

Part 1 of the Terrorist Asset-Freezing etc Act 2010…or…the Al-Qaida (Asset-Freezing) Regulations 2011” is not someone whom we want to be involved in charities. That is not a problem, but I am concerned about the unintended consequence of that perfectly understandable and worthwhile clause.

A number of the provisions of clause 9 represent a direct threat to charities that work to rehabilitate people with criminal records, many of which employ former offenders either as trustees or in senior management positions. At the heart of the voluntary sector is the principle of working with service users rather than doing things to them. It is an old cliché that the Government should do things for people rather than to them. Likewise, legislation should enable charities to do things for people rather than to them. I hope that, with a bit of time, and a bit of further thought and discussion with the charities that I and others are interested in, the Government can come up with a plan that does not have deleterious consequences. That is particularly important in respect of people in the criminal justice system—perhaps it is more important in that aspect of charitable work than in any other. Any unnecessary barriers to the recruitment of people with convictions as trustees and in senior positions are very likely to be a threat to the core mission of that sector.

Unlock, the charity of which I am a patron, and the Prison Reform Trust, the charity of which I am a trustee, and other charities involved in the criminal justice sector submitted evidence to the Public Bill Committee, where hon. Members raised concerns. During the debate, my hon. Friend the Minister confirmed that charities would be given notice of at least six to 12 months before the new provisions in clause 9 came into force, and that the Charity Commission would conduct a review of the waiver process in consultation with the charities. He also confirmed that the Charity Commission would not be given any additional resources to administer the likely increase in waiver applications as a result of the introduction of the new disqualification framework.

Based on the experience of charities in that area of public policy—the existing waiver process—and based on the fact that no additional resource will be provided to the Charity Commission, they are concerned that six months is simply not enough time for them to prepare themselves for the introduction of the new framework. If my hon. Friend the Minister can give me some indication when he winds up the debate that the timeframe will be at least 12 months, that would be of considerable assistance to me.

We submit further that the six to 12-month period is not sufficient for the Charity Commission to conduct a comprehensive review of the waiver process in consultation with charities, or for the commission to issue waivers to existing employees or trustees who qualify under section 181 of the Charities Act 2011. That could result in existing employees or trustees having to resign from their positions as a consequence of charities having to work to an unrealistic timeframe. At the very least, we would urge the Government to guarantee a minimum of 12 months’ notice for charities to enable them to prepare for the introduction of the new framework, and for the Charity Commission to conduct a full and comprehensive review of the waiver process.

I know that six to 12 months is a very different figure from 12 months and more, but in the circumstances—my right hon. Friend the Member for Cities of London and Westminster, who is an expert in these matters, mentioned the 400-year-old history of charity law, going back to 43 Elizabeth and, I think, the Act of 1602.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster 2:15 pm, 26th January 2016

We probably know more about Roman law than trust law from our time at university, but as I recall, it was indeed in 1602 and thereafter, during James I’s time, that charitable heads came into play. That is not unimportant to the debate. There has been a lot of radical change quite recently, which has upset the very essence of what charities should be about, as my hon. Friend Wendy Morton pointed out.

Photo of Edward Garnier Edward Garnier Conservative, Harborough

Clearly, I need to take my right hon. Friend around with me in a knapsack, particularly when I am speaking in the Market Harborough Conservative club. He is just the chap they want to hear more from.

To return to the serious point we are discussing, a longer period to enable charities, the Charity Commission and the Government to work out how best to move forward with the clause 9 provisions would be to the advantage of all. That would enable us to get rid of any glitches and look out for any Heffalump traps that may be lying there for the unwary.

My hon. Friend the Minister was very kind and met me in his Department with his officials on Tuesday 19 January. It came across to me that he was in listening mode and that the Government are very likely to move towards me to some extent. If he does, that would be very helpful. If he is able to say so on the Floor of the House, that would be even more helpful. That would enable me to do what I promised him and not press my amendment to a Division. I am here to try to produce clarity and better legislation. If he and I can do that together, in partnership, then everybody goes home happier.

I would like to touch briefly on a number of the paragraphs in my amendment. There are 11 areas specified. I appreciate that the Government have tabled their own amendment, which to some rather limited extent alleviates some of my concerns, but to be honest with my hon. Friend the Minister, the Government will need to go a little bit further than amendment 3 if all the concerns the charities I speak for, or have some connection with, are not to have their worries continue.

Subsection 23(a) deals with the first problem area:

“the number of people employed by charities who will be affected by the extension of the disqualification framework to cover senior management positions”.

For reasons of time only, I will not set out extensively the arguments that apply here, but we are concerned about an absence of detail so far expressed in Committee or in any other public pronouncements made by the Government in relation to this particular impact. I urge the Government to do a bit of work to see how many people employed by charities will be affected by the extension of the disqualification framework insofar as it relates to senior management positions.

Subsection 23(b) relates to

“the number of people who are trustees of, or employed by, charities who will be affected by the extension of the list”.

Again, will the Government please have a think about this and recognise that it is not a negligible problem? This is not just a whinge from a trustee of the Prison Reform Trust. This is quite an issue, which needs to be thought about. The impact of clause 9 needs to be considered in co-operation with the charities and the Charity Commission, so we can get this right for the long term.

I will provide just one example in relation to paragraph (b): a glitch caused by an unwitting failure to consider the Rehabilitation of Offenders Act 1974, as reformed in 2014. Under the 2014 amendments to the 1974 Act, rehabilitation periods for a convicted person were to some extent reduced. For example, an individual convicted of a sexual assault is sentenced to three years in prison. Assuming the individual does not reoffend, that conviction will become spent seven years after the end of the sentence. However, they will remain subject to the notification requirements indefinitely, with a right to review after 15 years. Under the Bill as currently drafted, the individual would automatically be disqualified from being a trustee for at least 15 years and potentially for the rest of their life. Under the 1974 Act, as amended, once an individual has been convicted, if they remain conviction-free for a defined period of time they are legally recognised as being rehabilitated. That is just a simple discrete example of where the Government, the Charity Commission and the charities sector need to get together and see how best to move forward.

Subsection 23(c) relates to

“the impact of the new disqualification framework on former offenders who are seeking, or intend to seek, employment in the charitable sector, including on their recruitment, retention, career prospects and long-term rehabilitation and resettlement”.

I made this point in general at the outset of my remarks. The one thing we, as people interested in reducing recidivism, need to concentrate on is getting people back to work, or getting people into work—of course, many people in prison have never been in work. If we want to get them back or into work, we need to reduce the barriers to that as sensibly as we can.

Subsection 23(d) relates to

“the impact of the new disqualification framework on former offenders who are currently employed in the charitable sector, including on their retention, career prospects and long-term rehabilitation and resettlement”.

That is the same point, but with a different shade.

Subsection 23(e) deals with

“the impact of the new disqualification framework on people with criminal records who are trustees or employees of charities which are partners in, or are contracted by, community rehabilitation companies (CRCs) and its impact on the successful running of those organisations”.

In line with Government policy under the coalition Government in the previous Parliament, community rehabilitation companies have been set up. They are contracting with charities to deliver rehabilitation and probation services. It would be a pity if good policy was undermined by making it much more difficult for ex-offenders to work with more recent offenders in order to rehabilitate them. Again, we need think very carefully and collectively about that.

Subsection 23(f) deals with

“the effectiveness of the existing waiver process provided for under section 181 of the Charities Act 2011”.

Charities have significant concerns regarding the effectiveness of the existing waiver application process and the ability of the Charity Commission to administer the additional applications that will result from the introduction of the new framework without any additional resources. In the past six years, the Charity Commission processed only six waiver applications. The Government suggest that this shows it is effective in granting waivers but that fails to recognise the disproportionately low numbers of waiver applications compared with the number of trustee positions and the estimated number of people with unspent convictions for existing disqualifying offences. Once one has expressed the point, I hope its obviousness becomes clear to the Government. Again, the charities I speak for, the Charity Commission and the Government need to sit around a table and thrash out how best to deal with that. As we say, six to 12 months is not long enough for that to be achieved.

Subsection 23(g) deals with

“the impact of the new disqualification framework on the number of applications for waivers to the Charity Commission”.

It must follow, surely, that the extended disqualification framework is highly likely to increase the number of waiver applications, not simply as a result of the extension but of an increased awareness of the framework that will inevitably flow from the production of guidance and general awareness raising. The Government, however, have not provided any assessment of a likely increase in waiver applications as a result of the extension of the disqualification framework. More troubling is that the Minister has confirmed that no additional resources will be provided to the Charity Commission to administer the waiver application process. The obvious inference is that the process will slow down and become more sclerotic. I hope it will not, but let us discuss the matter and iron out the problem in advance.

Subsection 23(h) deals with

“how the working group set up by the Charity Commission on the waiver process will be constituted, how it will be resourced, what timelines it will be working to, its working method and intended outputs, and how it will work in consultation with people with criminal records and charities that work with, or employ, ex-offenders”.

Unlock has already been contacted by the commission about its internal working group, but specific details about the nature of the review remain unclear. Unlock and I would be grateful for further clarification from the Government about how the review will be constituted and resourced, what timelines it will work to and so on. As I said, we urge the Government, at the very least, to guarantee more than 12 months’ notice so that charities can prepare for the new framework.

Subsection 23(i) deals with

“the criteria the Charity Commission will adopt in considering applications for waivers, and the weight it will attach to the views of the trustees of the charity or charities concerned.”

Unlock’s direct experience and the support it has provided to other organisations have shown the waiver process to be inadequate and not workable in a way that allows charities such as Unlock to fulfil their charitable purposes. To ensure the process is fair and transparent, much greater clarity is needed regarding the criteria adopted by the commission in assessing waiver applications and the weight given to the views of the trustees of the charity or charities concerned. Again, I am sure this could be sorted out around the table by the Minister, his officials and his interlocutors.

Subsection 23(j) deals with

“how the waiver process will operate in relation to prospective candidates for senior management positions in charities, including the timescales for decisions and mechanisms to ensure that ex-offenders do not suffer indirect discrimination as a consequence of delays in assessing applications for waivers while a competitive recruitment process is underway”.

For example, the backlog of enhanced disclosure and barring service applications being processed by the Metropolitan police leads to an average turnaround time of 75 days, as a consequence of which people with spent criminal records who are applying for jobs are suffering indirect discrimination. Again, we all need to sit around the table and solve the problem.

Finally, subsection 23(k) deals with

“the impact of the new disqualification framework on the resources provided by the Charity Commission to administer the waiver application process.”

At some stage of any argument, anyone interested in public policy will come to the question, “Where is the money?” Somebody has to pay. If the Charity Commission does not have the money, if the charities are pinched for money and if the applicants do not have the money, which, as ex-offenders, they are unlikely to have, unless they are highly successful ex-offenders, we will need to think about how we can make the process as efficient and economic as possible.

I apologise for detaining the House, but I thought it important to put on the record the concerns of charities involved in the criminal justice sector and the reform and rehabilitation of offenders. I invite the Minister to extend the consultation period at least to 12 months and to have further meetings with the charities so that these glitches can be ironed out. Mr William Shawcross, the chairman of the Charity Commission, kindly telephoned me yesterday and offered the hand of friendship. He made himself and his staff available to me and those for whom I speak today. So avenues are open: the Minister has already been very open to me, and Mr Shawcross has now been very open to me. I hope, therefore, in the spirit of co-operation, that the Minister can give me reassurances so that I can tell Unlock and the Prison Reform Trust that the Government are a listening and thinking Government who want to produce a Bill that works in the long term and which we can collectively design for the public benefit.

Photo of Wes Streeting Wes Streeting Labour, Ilford North 2:30 pm, 26th January 2016

I am grateful for the opportunity to reaffirm some of the concerns expressed in Committee that have not been addressed, but which will be addressed by the amendments tabled by my hon. Friend Anna Turley.

I have had a long association with several different charities in a professional context, as a member of staff, as a volunteer and as a donor, whether through a regular standing order or money in the tin. Going back to earlier comments, I think that people know what they are signing up to when they support charities, whether it is a charity’s campaigning effectiveness or its direct work with beneficiaries. We ought to pay tribute to the remarkable work that our large and diverse voluntary sector does, from the largest to the smallest of charities.

In my constituency, we have a variety, from Barnardo’s, headquartered in Barkingside, through to smaller branches, such as the Barkingside branch of the Royal British Legion. There are also other charities such as Hopes and Dreams, set up by volunteers to help children with life-threatening or life-limiting conditions to enjoy experiences that enrich their lives at a difficult moment for them and their families. These are remarkable people doing remarkable work.

It is disappointing, therefore, that the voluntary sector, particularly in recent times, has been in the headlines for the wrong reasons and for what I would describe as the misdemeanours of the few, however large and significant they might be. It is also disappointing to hear the unnecessary condemnation of far too many. Hon. Members and others in the media have used intemperate language to bash a charity sector that does a remarkable amount of good and which should be cherished and celebrated, not derided and denigrated.

Like my hon. Friend the Member for Redcar, I am concerned that the warnings mechanism in the Bill does not carry a right of appeal. When I was a chief executive of a charity, had I received a warning from the Charity Commission for any aspect of our work, I would have taken it very seriously, and I would have expected trustees to take it very seriously too, yet we have heard in Committee and on Report today that the commission may issue warnings for what are relatively minor infringements—I even hesitate to use the word “offences” —of guidance. There is a difference between best practice and regulation. Of course, we expect charities to uphold the letter of the law, but there is also a great deal of best practice out there, and we should not necessarily be slapping warnings on charities for falling short of best practice, when a more informal route might result in a better outcome.

I particularly welcome the new clause dealing with the disposal of assets. In Committee, we talked about the origins of the Government’s proposals around what might be described as the disposal of assets. We were talking about the seizure of assets, particularly in relation to their proposals for housing associations and right to buy. I am happy that housing associations and the Government are moving forward on the basis of agreement, but we should be in no doubt about how the Government reached that position: not through negotiation or evidence-based argument, but through threats, bullying and the cajoling of housing associations, with the threat that if they did not comply and work with the Government on right to buy, the latter would simply legislate for it. To me, that seems to go against the very essence of the Charitable Uses Act—sometimes referred to as Elizabeth’s law—which was referred to earlier. Indeed, I must apologise to the right hon. Member for Cities of London and

Westminster (Mark Field): it was, in fact, an Act of 1601, and I would not want people to review the record and find that they were inadvertently misled on this issue.

Photo of Edward Garnier Edward Garnier Conservative, Harborough

Is the hon. Gentleman angling for an invitation to the Market Harborough Conservative club?

Photo of Wes Streeting Wes Streeting Labour, Ilford North

What a kind invitation. Were the Conservative majority in Harborough slightly more marginal, I would be happy to visit on many occasions, but will have to pass this time and focus on matters closer to home and my majority.

Going back to the Charitable Uses Act of 1601, there is a long established principle that donations, bequests and legacies given to charities really ought to be used for the purpose that their donors intended. What my hon. Friend the Member for Redcar has set out in new clause 2 would give people the confidence that they could donate to charities or leave bequests to them knowing full well that independent charities would not be compelled

“to use or dispose of their assets in a way which is inconsistent with their charitable purposes.”

I therefore strongly endorse new clause 2, and I glad she has tabled it for discussion this afternoon.

The final area I want to focus on is campaigning. As someone who has been a charity campaigner—both professionally and through my voluntary contributions to the work of charities—this is an issue I feel strongly about. As I said in my earlier intervention, I am still at a loss to understand the problem that the gagging law was trying to solve, because Charity Commission guidance has always been clear that charities cannot campaign for party political purposes and certainly cannot use charitable funds for the purposes of party political campaigning. It would therefore be completely unlawful for a charity to say around a general election, “We completely disagree with the Conservative party’s policy on x, and would therefore encourage you to vote for one of the other parties,” or, “The Labour party policy on y is inconsistent with the views of the charity, and therefore you should vote for another political party.”

What has always been perfectly in order and, I would argue, desirable is for charities to be an effective voice for civil society and to ensure when policy is up for debate, whether during our deliberations in this House, in one of the devolved Parliaments or Assembly, or in local authorities up and down the country, that they can draw on their wisdom and experience, and the evidence base they gather—through desk research, commissioned research or, more often than not, their direct experience of working with their beneficiaries—to make sure that decision makers are well informed.

That is a real benefit to our democracy, and I am afraid that the cries from those on the Government Benches—that this change has not had a chilling effect—are simply untrue and unfounded. Whereas the Conservative party is usually found in this Chamber arguing against red tape, the gagging law has had completely the opposite effect. Indeed, I am aware of campaigners and finance officers in charities having to sit there with their spreadsheets prior to the last general election and try to calculate whether something would be a constituency spend or a national spend, whether a collaboration with other charity partners would be workable within the law or where spending would be apportioned. I am afraid that the gagging law has imposed real and unnecessary burdens on charities. If people are concerned about how charities are spending their money, they should certainly be more concerned about the amount of time and money they might spend complying with unnecessary Government regulation than they should ever be concerned about whether they are sending briefings to Members of Parliament or asking parliamentary candidates to sign up to specific pledges or causes.

It really sticks in the throat that lots of Members of Parliament are very happy to turn up to photo ops at their party conferences or out in their constituencies with the Guide Dogs or children at a local youth club, or to go along and see all the great work an animal rights charity does—they are happy to issue press releases and enjoy the photographs—but when those charities come back to talk about the impact of their voting record or public policy they have supported or might consider supporting, suddenly this is considered a huge inconvenience or, even worse, people want to argue that it is illegal.

The gagging law has done exactly that: it has had a chilling effect and it has generated red tape. We should be honest about the fact that this law, which was passed under a coalition Government—ironically, an illiberal law passed with the Liberals in government—was intended precisely to serve the interests of the Liberal party. The Liberals were concerned that enough of their—[Interruption.] I am afraid that none of them is here this afternoon, which is a shame, but we have only a one-in-eight chance of them making a debate. That is disappointing, and it is a shame that they are not here to account for themselves. Because so many Liberal Democrat MPs were silly enough to sign up to a pledge on tuition fees and then break it, they were worried that there would be accountability at the subsequent election.

I am not arguing that student unions or any other charitable bodies should have gone into that election suggesting that people not vote for Liberal Democrat candidates who broke the pledge—or, indeed, Conservative candidates who broke it—because, as one of the parliamentary candidates who campaigned on the issue, I know that we are perfectly capable of doing that ourselves. However, it was entirely legitimate for student unions to approach the general election by talking about the policy platforms that parties put on offer and also the record of the incumbent.

I am afraid that sometimes the laws we pass in this place seem to be rather self-serving, rather than serving the public interest. The voluntary sector has a powerful role to play in speaking up, and not just for the broad set of beneficiaries that it serves. Rather, given the character of the voluntary sector in the United Kingdom, it is particularly important that charities working with some of the most marginalised and disadvantaged in our society have the freedom and encouragement to speak up for their beneficiaries, because as we sometimes see in our surgeries—although that is often where the most difficult cases arise—and as we certainly see on the campaign trail, on the hustings and in the corridors of this place, these are not filled with those who have the most to gain or lose from a change in Government or public policy.

Whether it is people suffering from issues such as homelessness, drug abuse, abject poverty or child abuse, or other forms of abuse or ill health, they are often not the people with the freedom or the funding to make their voices heard in this place as they should. That is why charities that work with them have such a powerful role to play in creating a more civilised politics and a more civilised country. For that reason, the power to make representations in new clause 3 would provide absolute clarity to charities that this is something we encourage and believe to be powerful and important, and I will certainly be supporting it.

In closing, let me say that these are points we made in Committee. We will see whether the Minister can be persuaded to accept our amendments this afternoon. I hope he can be, but I hope also that those following this debate are in no doubt whatever that, for all the headlines and the occasional bad press that the voluntary sector receives, there are a great many of us in this place who cherish the work that a vibrant and powerful voluntary sector does, both locally and nationally.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster 2:45 pm, 26th January 2016

It is a pleasure to speak after Wes Streeting. I do not agree with everything he had to say, but one thing I do have in common with him is a great love of London as a whole. I love walking through London, and it was only last summer that I went to Barkingside for the first time. I realised how important Barnardo’s was at the time—certainly in Victorian times, when it was a little Essex hamlet. I also saw the new housing development on that very site, which will clearly make a big impact, with some social housing—and, I suspect, possibly a bit of private housing, probably to help fund it. That development will be a real asset in the community that he represents.

I also thank Anna Turley, who spoke from the Front Bench, for her contribution. I remember a similar instance in opposition many moons ago—about 10 years ago—when I was speaking on the National Lottery Bill. I thought we had tabled an excellent set of sensible amendments that the House would surely take on board. I should not disappoint her too early on, when there are another two hours and 11 minutes of debate left, but I suspect that she might not get her way. Both Labour Members who spoke are from the 2015 intake, and they spoke eloquently. I would like to acknowledge from the Government side my sympathy for the hon. Lady, who has had to get involved in the major issue of the steelworks in Redcar. We must all have a huge amount of sympathy for her. Having to navigate that issue as a local constituency MP as well as doing day-to-day work here in Westminster must be incredibly difficult.

I have a little bit of sympathy with some of what the hon. Lady said, despite our rather fierce earlier exchanges. I believe it to be almost axiomatic in public life that once organisations such as the Charity Commission are set up, corporatised and granted ever-burgeoning budgets and staffing, they see their mission as expanding their empire of influence. This Bill has been a salutary example, in part at least, of the operation of such tactics. Problems have been identified that have long since been addressed and largely solved by the passion, commitment and the graft of volunteers, quietly—often informally and unpaid—working in their communities.

To take one apposite example, the extent of the local charitable activities of many of this nation’s leading independent schools has been transformed over the past decade, let alone the last generation. Yet rather than welcoming, heralding and trumpeting the success of the big society, which is what I think this amply represents, we risk promoting big bureaucracy in the shape of the Charity Commission. We must resist some of the amending provisions, especially new clauses 2 and 3, which we will doubtless debate further, and I want to take the House on a short journey within a stone’s throw or two from here.

Photo of Paul Flynn Paul Flynn Labour, Newport West

Will the hon. Gentleman acclaim that the greatest triumph of the big society was the work of its poster-girl, Camila Batmanghelidjh, from the kids society?

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

As a matter of fact, I believe it was called Kids Company, not kids society. She was an individual who had worked with a number of politicians. There are issues that I am sure should rightly be addressed by Select Committees and others about what precisely happened in regard to Kids Company.

I was about to take the House on a short journey from this Chamber to the site in Tothill Street where the Harris Westminster Sixth Form centre stands. Since its foundation in 2014, this academy has been the focus of substantial collaboration and co-operation with Westminster School, one of the oldest foundations in this country, which is even closer at hand in the curtilage of Westminster Abbey. That co-operation includes teaching classes with small intakes in subjects such as Latin, Greek and German. For over a decade, the school has routinely offered science outreach and summer school partnerships to several local maintained schools.

As the local MP for the past 15 years and an erstwhile president of the St Andrew’s youth club, the oldest youth club, on Old Pye Street, I know it has played a massively important role in the local community. Many people live in social housing, so the club was a magnet for young boys and girls—initially just boys in the 1860s, but girls in more recent times—not just from the immediate Westminster area, but from further-flung places south of the river, too. I was well aware that when the club lost funding from the local authority, it was Westminster School that stepped into the breach, providing cash and gym apparatus. I suspect that scores of other local charitable organisations could tell similar stories about the time, money and equipment quietly donated by the Great School, which has been an integral part of the local fabric since 1179.

Charitable status, as Members have pointed out, rightly depends on what the charity in question is established to do, rather than on a Charity Commissioner’s subjective analysis of public benefit. Here I agree with much of the thrust of what was said by Opposition Members. While we all appreciate that charitable status confers financial and reputational benefits, I strongly believe that the Charity Commission is not the appropriate means of prescribing how independent schools or other organisations should satisfy the public benefit test.

Indeed, it appears that for party political reasons, independent schools, rather than other charitable bodies, are in the sights not just of many MPs—dare I say, particularly on the Opposition side—but of leading lights in the Charity Commission. Surely a more sensible approach, one that avoids any accusation of political and particularly party political bias, would be to work on some non-statutory guidance to these organisations about the anticipated nature of their public benefit engagement.

We should also recognise that many independent schools do not have the capacity or the financial resources to sponsor academies—some lack the playing fields, drama, arts and music facilities, commonly assumed to be the norm in private schools. In truth, there is still plenty of co-operation and sharing going on between independent and nearby maintained schools—a healthy, informal co-operation, which stands to be undermined by any proposal to define levels of contribution or to extend the public benefit, as we have understood it in the past. It is worth saying that it takes two to tango: there is little that independent schools can do if the state sector head at the nearby school refuses an offer to work together. It is surely invidious to place burdens of the sort proposed if the independent school in question does not have ability to achieve the Charity Commissioners’ objectives.

I shall not detain the House. We are having an interesting debate, and in truth I share some of the concerns expressed by Opposition Members that part of this legislation purports to solve problems that many charitable organisations and independent schools in particular have by their own efforts done much over the years to alleviate. Indeed, some of what is set out in the Bill betrays worrying assumptions that underlie an outdated sense of “groupthink” that besets the Charity Commission. I very much hope that, in its wisdom, the House will today reject some of the amendments, particularly new clauses 2 and 3 if they are pressed to the vote. Failing that, I trust that the Government Whips will achieve the same ends.

Photo of Martin Docherty Martin Docherty Scottish National Party, West Dunbartonshire

It is an honour to speak in the debate. I hope not to detain the House too long. Let me first congratulate Mark Field on mentioning the late noble King James VI, given that the only charitable organisation that still exists from his reign is, of course, ScotsCare—based here in London and doing fantastic work.

Concerns have been raised in Scotland about the possible impact of this Bill because of the myriad issues it raises relating to the governance of charities across these islands. I am sure that these concerns will be shared by Northern Ireland Members, too. The right hon. Gentleman mentioned the burgeoning budgets of the Charity Commission for England and Wales, but between 2007 and 2015, its budget was cut by 48%, so let us scotch that myth straightaway.

No one should be in any doubt that in the space of the last 18 months civic society has been rocked by the recommendations of the Etherington report, and this crisis of trustee leadership that has brought us to this very point. To be clear, the level of trustee oversight in national organisations leaves a sour taste in the mouth—not just of those in this Chamber, but more importantly of those who have volunteered as trustees in the majority of charities across these islands.

It is telling that the organisations that have caused the most concern are the so-called national charities with well kent faces that have been held in high regard. What is the impact on the organisations so far investigated? It is limited, yet the impact on the majority of small charity trustees has been profound. They find themselves labelled in the mire of mismanagement, which has led us to this point, as they have been sullied by the bad practice and lack of due care.

Some may say that these small and medium-sized organisations will not be impacted by this legislation, yet we fail to recognise the profound impact this period will have on their ability to recruit, retain and develop their volunteer trustees. It is commendable that many Members in this Chamber are themselves trustees. The Minister for Civil Society, who is no longer in his place, noted that point, and I commend him for it. However, merely being an MP should not qualify someone to be a trustee through default of their position, as it were.

I am sure that the Members to whom I have referred are well versed in their areas of interest—notably the issue of ex-offenders, about which they have spoken eloquently today—but I am also sure that some Members, especially those who were elected at the most recent general election, were asked at the time of their election whether they wished to join various charities as trustees or directors merely on the basis of their predecessors’ having undertaken such a role. I believe that that in itself exposes a misguided approach to trustee recruitment, although it must be said that it is taken by only a small number of charitable bodies, and appears to have been adopted mainly by the larger organisations.

I hope that we recognise the worth and value of our civic society, and especially the worth and value of the individual volunteers who manage charities, run services for charities, and, yes, even raise funds through traditional means. Wes Streeting mentioned that earlier; like other Members, he engaged in fundraising before entering the House. I hope that we recognise the importance of the charities themselves, and accept that we owe them an explanation of how their civic society has been allowed to be undermined by large non-governmental organisations with substantial investments and resources which really should have known better.

Although the Bill seemingly pertains only to England and Wales, the media frenzy surrounding its principal purpose has undermined, and will continue to undermine, civic society throughout these islands. As a Scottish constituency Member of Parliament—and I am sure that I speak on behalf of my hon. Friends—I understand that robust and separate charitable regulation exists. In England and Wales, charity law is mainly covered by the Charities Act 2011, while in Scotland it is covered by the Charities and Trustee Investment (Scotland) Act 2005. In England and Wales, the Charity Commission is responsible for registering and regulating charities, and in Scotland the Office of the Scottish Charity Regulator is the non-ministerial department—answerable to the Scottish Government, and therefore to the Scottish Parliament—that is responsible for regulating and registering charities in Scotland.

Following the publication of the Etherington report, it became clear to civic society in Scotland that a distinct approach to fundraising would be required, and in July last year the Scottish Council for Voluntary Organisations expressed a fear that high-profile media reports of the failings of UK charities could damage the strong reputation of Scotland’s charities. As the national intermediary, the SCVO launched an informal review on fundraising in July, in parallel with the Etherington review. It reported in September 2015, recommending that fundraising should be agreed between charities, the public and the Scottish Government, and that a subsequent summit should be held on 26 November to deliberate and consider options. Building on Scotland’s civil society-led approach, the Social Justice Secretary, Alex Neil MSP, stated on 24 September that Scottish Ministers would engage in a cross-party discussion on changing fundraising regulation, thus ensuring consensus in the Scottish Parliament and, critically, in Scotland’s “fourth estate”, civil society.

Fundraising has been regulated by charities in both Scotland and England. As a result of the Etherington review, the Bill seeks to introduce a fundraising body for England and Wales, answerable to this Parliament. As I have said, Scottish charities fear that they could be affected by the Bill. The question of the regulation of fundraising in Scotland therefore remains open, and the SNP seeks the Minister’s reassurance that Scotland will retain the ability to legislate in this arena.

Our Scottish Government work with civil society in a constructive, collaborative way. They have been praised for their work with organisations working with and for those with disabilities and those gaining assistance from refugee bodies, and especially for their investment, over many years, in local support structures across all 32 local authorities to promote volunteer development, retention and expansion—critically, in the field of governance through trusteeship and directorship.

I can only assume that the cuts in the budgets of England’s volunteer centres and councils for voluntary service will have a continued impact on people’s opportunities to volunteer to be trustees in the communities that need them the most. If the Government are serious about trusteeship and charitable regulation, they must recognise that support is required by the small local community-based charities that have been drawn into this debate, which may suffer as a consequence of fewer people volunteering to be trustees, fewer people donating to local community charities run by volunteers, and fewer people being involved in the civic life of these islands.

The fact is that the large charitable bodies that have brought about this situation have got away with it, and the small and medium-sized charitable bodies will suffer disproportionately. With that in mind, SNP Members will also support new clause 3—tabled by Anna Turley, and we are delighted that she has done so—because we believe that without it, given legislation on charities that may be United Kingdom-wide but registered in England and Wales, their ability to inform debate will limit the independence of Scotland’s civic society.

The Bill seeks to introduce a new model of fundraising regulation in England and Wales, and the Scottish Government and Scotland’s national bodies are actively considering the implications of that for the regulation of charity fundraising in Scotland. It is right for as broad a conversation as possible to be held in Scotland to determine the right fundraising regulation for distinct Scottish charitable bodies, with the Scottish Government engaging in a cross-party discussion on the changing of fundraising regulation. The question of the regulation of fundraising in Scotland must remain open. Whether it remains self-regulating or not, it is important for the House to understand that the decision on this devolved issue remains firmly in the hands of the Scottish Parliament.

Photo of Maggie Throup Maggie Throup Conservative, Erewash 3:00 pm, 26th January 2016

I oppose new clause 3, because it seeks to alter fundamentally the way in which charities have historically operated in this country. I believe that, in creating a formalised political role for charities in our society, we risk undermining their ability to work independently for the common good, and diminishing their standing in the eyes of the public. I have serious doubts about the need for the new clause, on both a moral and a practical basis. In my view, the status quo already allows charities to lobby Governments in a constructive way, while remaining politically impartial.

Serious concerns have been raised about the additional cost of political campaigning, and the potential impact that the new remit may have on a charity’s abilities to raise funds. We ourselves are acutely aware of the fact that even a very localised campaign can be extremely costly. Extending the scope of charities to allow them to campaign for or against a law, policy or decision at any level of government would inevitably incur a significant amount of additional cost, and I think that the money would be better spent on fulfilling the charities’ original aims and objectives.

Photo of Peter Kyle Peter Kyle Labour, Hove

Does the hon. Lady not agree that the way in which a charity collects and spends its money in order to deliver its charitable mission on behalf of its service users is the preserve of its trustees, and that it is not for us to decide such operational or, indeed, moral matters in the House of Commons? It is certainly not for us, as individual Members of Parliament, to dictate to charities how they should spend their money and deliver their charitable aims; that is up to the trustees.

Photo of Maggie Throup Maggie Throup Conservative, Erewash

I understand where the hon. Gentleman is coming from, but I believe that new clause 3 will encourage charities to go down that route and, perhaps, stray from their original intentions, however well-meaning they may be, thus inadvertently—not intentionally, I admit—misleading the public. I fear that the inclusion of the new clause could conceivably allow us to reach a point at which a large cancer charity, for instance, spent more on lobbying national and local government than on investment in research on and development of new cancer drugs. I think that that is what the hon. Gentleman was alluding to, but I disagree with him. For me, this raises a number of major issues.

The first issue is the impact on donations. Charities rely heavily on public donations to fight for their specific cause or issue. The Charities Aid Foundation estimated recently that in 2014 alone, £10.6 billion was donated by the British public to a vast array of good causes. By politicising charities, we risk donors turning away from charities whose cause they support because they do not necessarily share the charity’s political agenda or party alignment.

Secondly, the new clause would serve to allow larger national charities, which already dedicate significant resources to lobbying Members in this place, to strengthen their influence over Government policy and decision making. That would be to the detriment of smaller, often local, charities, of which we all have many examples, which would be further marginalised from the decision-making process because they simply could not afford to compete for airtime.

There is also a third point. Like many others, I would be deeply concerned if those charities that are very much a cornerstone of our society—the Royal British Legion, Macmillan, Age UK and the NSPCC, to name but a few—suddenly became vulnerable to infiltration from those who wanted to push a specific political agenda or to use the charity to criticise or support the Government of the day, rather than running it as a force for good.

I am sure hon. Members will agree that we do not really need any more politicians. Yes, it is only right and proper that charities should play their role in shaping our society by seeking to influence Government, nationally and locally, but they also have much more to offer society without widening their scope into out-and-out political campaigning—or, as some might call it, the dark arts. That is why I will be voting against the new clause this afternoon.

Photo of Susan Elan Jones Susan Elan Jones Shadow Minister (Wales)

It is a great pleasure to speak in today’s debate. We often have wonderful debates in this place about what Britishness is about and what our culture is about. I actually think that the voluntary sector in this country represents the best of British—that is, the best of English, Welsh, Scottish and Northern Irish. As politicians, we do not always say thank you, but our starting point today as we consider the Bill should be to say a very big thank you to our hard-working and diverse voluntary sector in this country.

We should also remember that most charities in this country are relatively small. They operate in communities, and it is not our job in this place to be a pain in the neck for the 900,000-plus trustees of charities around the country who give their time voluntarily to make management and governance decisions, or for the charities’ many volunteers. The motivation of those people is undoubtedly to do good in our society and in our country.

We cannot, of course, forget the exceptions—the horror stories—including the dreadful death of Olive Cooke, who appears to have been hounded by 90 charities sending her 460 letters asking for donations in the course of one year. Nor can we forget the undercover Daily Mail report on what appeared to be severe malpractice in the call centre from hell. And nor should we forget the case of Kids Company and all the abuses that went on there. Incidentally, those abuses could and should have been dealt with by the Government and by the Charity Commission under its existing powers. We see those cases as exceptions, but they are nevertheless important and it is right that we are having this discussion today in Parliament.

Members on both sides of the House will see elements of voluntary activity in their own political traditions, and we can certainly develop some sort of empathy with different parts of the voluntary sector. We on this side of the Chamber can look to the labour movement, the co-operative movement, the working men’s and women’s organisations and a whole range of other bodies, but I know that the Minister for Civil Society, Mr Wilson, will also be moved by Edmund Burke’s notion of the little platoons. What I ask today is that he does not overburden those well-behaved little platoons in our country with red tape when it is not needed. Most of us would agree that where regulation is needed, the sector itself generally does that job best. I, for one, would give a warm welcome to the fundraising preference service, which will deal with some of the totally unacceptable abuses of practice in fundraising.

The shadow Minister, my hon. Friend Anna Turley, spoke eloquently to new clause 1 and outlined the safeguards that were needed. She mentioned the power to make an application to the Charity Commission against a warning when an appeal is made, with a warning not being made public for at least 28 days after the submission of the appeal. That is good common sense, because we are not talking about extreme or gross misconduct or about criminal acts, both of which should of course be reported straight away. We are, however, talking about things that could ruin the reputation of a charity, be it large, medium-sized or small.

We know from the wonderful report produced by the Public Administration and Constitutional Affairs Committee, “The 2015 charity fundraising controversy: lessons for trustees, the Charity Commission and regulators” —and, I would argue, for the rest of us—that one of its recommendations states:

“It would be a sad and inexcusable failure of charities to govern their own behaviour, should statutory regulation became necessary.”

That would be a failure of voluntary action, not a success. The report also makes the point that good governance is about sustainability of reputation in the long term as well as about sustainability of finances. So it is reputation that we are arguing for in new clause 1. With the law as it stands, it would be difficult for charities to undo any damage dealt to their reputation, to their good standing in the community and, importantly, to their finances.

I want to say a few gentle words about new clause 3, about which views differ, and about the gagging Act. We have had a debate in the House today, but perhaps our memories are failing a little and we do not remember how the law was 500 years ago or the Charitable Uses Act 1601. If we go back to the founding of charities in this country and to that Act, we can see that they were not just about the relief of poverty. They were also about general charitable purposes and the advancement of education and religion. The idea that our charities had no broader view of advocacy simply does not add up.

People will rightly say that such advocacy should not be party political—indeed, it cannot be, because that would be illegal—but it would be an extraordinary state of affairs if a charity that campaigned and ran practical programmes linked to, for example, international development was not interested in lobbying against malaria, say, or against international debt. Also, anyone who donates to a charity has the right to go straight to the Charity Commission’s website and see how that charity is spending its money.

We want to work with the Government and, most of all, with the voluntary sector but we are asking in our very moderate little new clauses for measures that are proportionate and sensible, and that would find agreement not only among Members on this side of the Chamber but with Mr Burke and his little platoons.

Photo of Wendy Morton Wendy Morton Conservative, Aldridge-Brownhills 3:15 pm, 26th January 2016

I join Susan Elan Jones in thanking the many charities that do fantastic work and that we often speak about in this place. We all have many examples that we have often shared with each other.

I welcome the Bill, and it is a privilege to speak today, having spoken on Second Reading and served, with other Members, as the Bill passed through Committee. I believe that it strengthens the powers of the Charity Commission and that those powers are welcome. It will strengthen and improve the relationship between the Charity Commission, charities, trustees and, importantly, the public. The Bill is, indeed, called the Charities (Protection and Social Investment) Bill.

For me, the Bill is about achieving a balance between scrutiny and accountability and trust, responsibility and respect, particularly in the wake of the handful of sad, and often tragic, stories that emerged during the course of last year, one of which has already been mentioned, the collapse of Kids Company.

I am, however, a firm believer that this must be proportionate, as I said on Second Reading. I think of some of the small charities in my constituency, such as Rosie’s Helping Hands, the Aldridge youth theatre—we often do not think of it as a charity, but it is—and, on our doorstep, St Giles hospice. Such charities are often led by the local community and by local people. Local people contribute their time, effort and energies as well as their money, and they give something back to the local community.

I want to speak against some of the amendments, particularly new clause 3 on the power to make representations and amendment 8 on warnings, which I will deal with first. The Bill is at its heart about transparency and restoring trust in the eyes of the public. That is why I feel that the power for the Charity Commission to place on record where warnings have been given is important, and that is why I will vote against amendment 8.

New clause 3 is about the power to make representations, which we have had a lively debate on in Committee and again today. We should remind ourselves of the following two points. First, deliberate abuse of charities has been found to occur only very rarely. The vast majority of charities do good work and are reputable organisations; we must never forget that. We must also remember that charities can, and do, make representations already, often very successfully. As I have said before, all of us as Members of Parliament receive representations from many charities during the course of our work. But there is a difference between non-political campaigning to raise awareness of a particular issue, even if the aim is to change policy or legislation, and what is being proposed in this new clause. I firmly believe this Bill is about strengthening the public’s trust in charities, and for me the idea of enshrining in legislation through this new clause the right to undertake political campaigning activity completely undermines that.

Photo of Wendy Morton Wendy Morton Conservative, Aldridge-Brownhills

I am normally very generous in giving way, but I have almost come to the end of my speech, so I will conclude.

New clause 3 risks moving what is fundamentally the apolitical activity of a charity to something that becomes completely politicised, and that goes against the grain.

Photo of Peter Kyle Peter Kyle Labour, Hove

I am extremely grateful to be called to speak in this debate and to follow Wendy Morton. I was not able to intervene on her just now, but I want to make the point that, while she was talking about political activity and campaigning in her eloquent speech, which reached out to all parts of the House in many regards, she failed to mention party political campaigning, yet all campaigning is political. Political activity is not always the preserve of party politics. That point has been lost in the debate so far.

Many Members have blurred the boundaries between party political activity and political activity. All social intercourse between different communities, and people within communities up and down the country, is political exchange and should be celebrated. Our new clause seeks to protect the long-standing tradition that charities can engage in political processes within their communities and also seek to influence party politics, but not actually become part of a party political process.

Photo of Andrew Gwynne Andrew Gwynne Shadow Minister (Health)

My hon. Friend is making an important point. All of us as Members of Parliament will from time to time be contacted by charitable organisations that seek to influence policy makers and policy informers to change the laws of the land. For example, it would not be outwith the role of an organisation like Shelter to campaign for MPs to get changes to homelessness policies that we might be debating. That is political.

Photo of Peter Kyle Peter Kyle Labour, Hove

That is an important point, and it has been illustrated well in this debate. Sir Edward Garnier spoke eloquently about the co-operation he has had from, and the work he has done with, a charity of which he is a trustee, Unlock. Indeed, his speech was clearly intricately prepared, probably with the support of Unlock. I do not see that as party political at all, because all of us in the House today benefited from his work with Unlock. That illustrates the point that engaging with politicians does not necessarily mean engaging in a party political act. I am grateful for his speech and for his interaction with, and support from, the charity Unlock.

I support new clause 1 and amendments 8 to 12. There are three fundamental benefits to our society from charities and the role they play. The first is that often they can get to hard-to-reach groups. Through their methods and the way they have evolved over time, many charities can work with hard-to-reach pockets of our society that other organisations struggle to reach, which is an incredibly important part of their work.

I stand up and defend the strength of the voluntary sector’s relationship with its clients and service users. What is important is that it is the strength of that particular sector as opposed to that of other sectors. For example, it is often the case that people who are vulnerable, who are in hard-to-reach groups or who have multiple challenges are, for obvious reasons, very suspicious of the role of the state. They may have been sanctioned or imprisoned by the state. They may have a relationship with social services that they regard as invasive in their family life. These people are often very, very reluctant to work or engage with the Government and other sectors. That is where the strength of the voluntary sector lies. It can work independently of Government and other sectors and form a very strong relationship with individuals.

As co-founder of two charities, a chief executive of a charity and a deputy chief executive of the Association of Chief Executives of Voluntary Organisations, I know that the voice and the independent advocacy that the voluntary sector gives to individuals and communities are absolutely essential. It is about giving a voice to those who are disempowered. Members from all parts of the House celebrate the importance of freedom speech, but there are some people in our society who do not exercise that freedom as freely or capably as others. In this day and age, that is exacerbated by the existence of social media. Every person who has made it to this House will be aware of social media campaigns and the fact that some people in society have a disproportionate voice. Very often, by looking at the social media activity of a constituency such as Hove and Portslade, which I proudly represent, we can map the areas of advantage and disadvantage. That illustrates the importance in this day and age of strong advocacy.

Politics, party politics and the process of democratic representation exist to give voice to everyone equally. The voluntary sector has played a key part in ensuring that those people who have been isolated, alienated and disenfranchised from the democratic process have a very clear and powerful voice in the democratic traditions of this country. That means advocating on their behalf, liaising with politicians, and ensuring that public policy represents everybody, not just those who can advocate for themselves, and signing and organising petitions on the No.10 website to trigger a debate in this place. Unfortunately, we are going down a path where people who have advantage are given disproportionate weight and voice, which is why we should never ever get to a point where people who are disadvantaged have their voices shut out from the democratic process. That is why it worries me when we blend party politics and politics per se in debates such as this.

Boards of trustees are inherently cautious. Volunteers who give up their time are also criminally responsible for the activities of their charities. As they are not paid workers or full-time workers, they are not always aware of every single activity that goes on from the top to the bottom of their organisation. Add that to the criminal responsibility that a trustee has and we can see why, collectively, boards of trustees become very cautious. I have been a trustee of many charities. One of the challenges of driving a charity from the executive or from the board is to make sure that the charity can still take decisions that are bold enough to deliver the transformation that service users need. I remember feeling that very acutely. For three years, I was on the board of trustees of Pride. Each year, Pride in Brighton and Hove has a fantastic celebration on the streets that brings out up to 200,000 people. I remember being a trustee for the very first time. [Interruption.] Simon Kirby knows very well the importance of Pride to the fabric of our society. He also knows the challenges that it poses for our city, especially in regard to policing and to ensuring the safety of all the 200,000 people who come to our city to celebrate. I remember seeing tens of thousands of people flooding through the streets, and knowing that, as a trustee, the uncertainty of having such large numbers of people could lead to all sorts of outcomes.

One year, as tens of thousands of people squeezed down St James’s Street, which is in the constituency of the hon. Member for Brighton, Kemptown, glass shopfronts buckled under the pressure—they were physically bowing. As a trustee, I knew that if we had not taken such things into account and predicted the challenges, I would be criminally responsible if there were any severe injuries as a result. Therefore, these things play out in very real and tangible ways in the minds of people who are running charities and who are on the boards of charities.

I worry that the imposition of official warnings will add another layer that will drive uncertainty and cautiousness through boards of trustees and down through to the executive at a time when we need charities to be outward facing, bold, open-spirited and engaging with communities in order to deliver the transformational change that every charity, service user, and beneficiary so desperately needs. I worry that warnings that are used in low-level cases could have a disproportionate impact on charities as they go forward. Low-level warnings can have a high-level impact if they are not used in the right way. Will the Minister tell us whether the Charity Commission uses warnings only for low-level non-compliance issues and limits them to those cases?

The impact on charities could be significant if warnings are not used in the appropriate way. They will have an impact on people who fund charities, on charities’ campaigning ability and on service users. Service users need to know that the charities that represent them and provide services to them—often when they are in difficult circumstances and feel extremely isolated and vulnerable—are robust. If they hear talk of the Government issuing warnings, it could affect the relationship between service users and charities. We all want to make sure that if charities step outside good practice, they are supported back into good practice, and we recognise that at times warnings should be issued. We just need to make sure that they are issued in the correct way.

Will the Charity Commission routinely make warnings public? How often will they be made public and how often will they not? Will there be guidance as to when warnings should be made public and when not, so that charities can understand the process that is unfolding? Under the Bill, a warning could be issued and made public within a 24-hour period. What is the point of the 24 hours’ notice? What can meaningfully be achieved in 24 hours that can deliver the positive change that we all want to see in charities that are drifting away from best practice? They cannot act; they cannot inform all their trustees. They cannot rectify many of the problems that have been identified. It will only cause panic. We do not want, and I am sure that the Minister and Members of Parliament do not want, a charity that is descending into panic when it needs to support its beneficiaries robustly.

Will the Charity Commission allow adequate time to understand and prepare for any warnings that are about to be made public? The independence of the sector is as essential now as it ever has been. Can the Minister confirm that the Charity Commission will not use its power to direct charities or trustees to take a specific action? Hon. Members on both sides have spoken eloquently about the independence of charities. Many people have spoken about small charities in their constituencies. We all have great examples, but I do not want to forget the big charities. Sometimes we talk about small charities as if they are somehow more precious than any other charity. Every charity that is registered with the Charity Commission, and every charity working in our communities provides fantastic services, and sometimes the large charities are providing economies of scale and a value for money for their funders that cannot be matched elsewhere. The scale of their operations can lead to developments and innovations that others struggle to provide. We need to make sure that charities of all sizes are celebrated and mentioned in the Bill.

Hon. Members on both sides of the House support the overall aims of the Bill. As a special adviser at the Cabinet Office in 2006 and 2007, I worked on the Charities Act 2006 when the public benefit test was introduced into statute. I remember our debates at that time, including on the test as it is applied to private schools. I became aware at that time of the original 1601 Act, signed into statute by Elizabeth I. I know that Simon Kirby was only a young man at the time, and it is good that he graces us with his presence today, bringing his experience with him.

The original statute signed in the 17th century allowed charities the scope to develop as society developed. We should not legislate to micromanage charities to such an extent that primary legislation inhibits them from evolving as society changes. If we had written into statute in the 1980s a strict definition of a public benefit, what would that have meant for charities that subsequently delivered HIV services? We need to ensure that there is enough scope in law for charities to evolve as society becomes less deferential and more communicative by means of the internet and social media, and as charities need to provide services to new areas of vulnerability that open up. Food banks, for example, are a new but unfortunate facet of our social landscape. Charities must have the space to evolve without the need to keep coming back to this House for permission to do so.

Photo of Paul Flynn Paul Flynn Labour, Newport West 3:30 pm, 26th January 2016

Charitable ends can never be justified by uncharitable means. Terrible revelations were made last summer by the Daily Mail and The Mail on Sunday, to their great credit—I do not say that very often—about the abuse of the means that charities were using to achieve their ends. We all strongly support such charitable ends, but those charities engaged in the fierce fundraising that goes on among charities and that is becoming even fiercer. One charity spends an astronomical amount— £20 million—on fundraising to get the money in. Understandably but wrongly, certain charities fell into the trap of using means that were thoroughly unjustified and in too many cases abused their donors.

We heard from my hon. Friend Susan Elan Jones about a terrible case, though it should be pointed out that the relatives of Olive Cooke have pointed out since that her death had no connection with the pressure that was put on her and was due to other reasons. But there have been other cases of people who were suffering from dementia being plagued by repeated phone calls, letters and pressure on them. We have considered the case of chuggers. Highly respectable charities were using chuggers to accost people in the street and offer them a deal. That was fine for the charities because they got a huge amount of money in, but it was a very poor deal for donors. Of the donations they give for the first full year, virtually none goes to the charity. Such deals are very poor value for the donors.

As a senior member of the Public Administration and Constitutional Affairs Committee, I have been asked to speak today by the Chair of that Committee, who tabled new clauses 4 and 5. The Committee was shocked by the evidence we had. We saw that all the charities were in confessional mood. They were penitent and agreed that they had overstepped the mark. As members of the Committee with supervisory roles over the charities sector, we were tempted to call for new regulations, but we decided unanimously that we did not want to cage the entire charity movement in a new prison of regulation that would limit their powers of innovation.

Charities have clearly poisoned their own well. So many people have turned not only against the charities involved when that scam was announced last year, but against the whole idea of charity giving, so we want to make the point powerfully in new clauses 4 and 5, which seek to introduce reforms. We are strongly behind the Charity Commission. If it is to do a bigger job, it must have the money restored—30% of its funding was taken away from it. The Committee’s message, which will be in our report on Kids Company that comes out on Monday, is that charitable ends can never justify uncharitable means.

Photo of Rob Wilson Rob Wilson The Parliamentary Secretary, Cabinet Office 3:45 pm, 26th January 2016

Before getting into the detail of the proposed amendments, I would like to make a few quick points that frame the Government’s position in this afternoon’s debate. I reiterate the really important point that the overwhelming majority of charities are well run, and they are run by hard-working, dedicated people whose motivation is to help others and do good. They perform a vital role and we should never forget that. The protections and strengthened powers that we have set out will protect public trust and confidence for the vast majority, and that is the reason behind the Bill. As a result of the engagement and scrutiny by Members of both Houses, the Bill has most certainly been improved in a number of places. I would like to put on the record my thanks to all those involved in those improvements.

Let me turn to new clause 1. I thank Anna Turley for her explanation of the new clause. We think that judicial review is more appropriate than a specific right of appeal to the charity tribunal in the case of an official warning. In cases of low or medium-level misconduct or mismanagement, a right of appeal to the tribunal would be disproportionate.

Furthermore, the Charity Commission has said that such a right of appeal to the tribunal would render the power unusable. It anticipates many appeals being made as a means of frustrating the regulatory process. The resources required by the commission to defend tribunal proceedings would be disproportionate to the issues at stake in official warning cases, which are, by their nature, low and medium-level. There is no point giving the commission a power that it would not use.

Judicial review is a well-established means of ensuring that genuine wrongs are put right. Unlike the tribunal system, it discourages unmeritorious cases and those who calculate that delay through litigation is the best tactic to avoid robust regulation. Furthermore, costs are usually awarded against the losing party, providing a financial disincentive to those who might otherwise pursue a weak case.

Some Members have raised concerns about the potentially harsh implications, including adverse publicity, for charities in receipt of an official warning. Let me say this in response: charities exist for the public benefit and should therefore be accountable to the public. One of the Charity Commission’s statutory duties is to promote that, which is why the official warning power will be an important new tool in relation not only to promoting charities’ compliance with their legal obligations, but to improving charities’ public accountability. The concern about adverse publicity is an attempt to avoid accountability to donors, beneficiaries and the general public.

Some have suggested that the warning power would allow the Charity Commission to direct charities. Let me be absolutely clear that it will not. The warning must specify the breach and may provide guidance on how the charity can rectify it, but the decision on how the breach is to be rectified is a matter purely for the charity’s trustees. Others have said that the trustees run the risk of significant regulatory action without a right of appeal, but I disagree. Were the commission to escalate from a warning to a statutory inquiry, the opening of the inquiry would be subject to a right of appeal to the charity tribunal, as would the use of any inquiry powers.

Finally, the Joint Committee that undertook pre-legislative scrutiny of the draft Bill agreed that, provided the power is framed in the right way and with the right safeguards, judicial review was the appropriate means of challenge, rather than an official warning. That was also the view in the other place and we agree, so I cannot accept new clause 1.

I will now speak to amendments 8, 9, 10, 11 and 12, tabled by the hon. Member for Redcar. I group the amendments in that way because all of them, except amendment 9, would serve to weaken a number of important provisions relating to the warning power. However, I will lay out my arguments against each amendment in detail.

Let me start with amendment 9, which seeks to bind the commission’s power to issue a warning to a requirement to notify the charity and charity trustees. I absolutely agree that that is a sensible and proportionate provision, which is why it is already required under the existing drafting of clause 1. Amendment 9 is therefore superfluous.

Amendment 8 seeks to stop the Charity Commission from publishing a warning to a wider audience than just the charity and its trustees. Similarly, amendment 10 would also restrict transparency and accountability by requiring the commission to publish warnings only in such a manner that did not identify the charity or trustees involved. I am afraid that I cannot agree with those proposed changes: charities exist for the public benefit and must be accountable to the public for their work.

The Charity Commission’s ability to publish an official warning will enhance transparency, which is entirely in line with the commission’s objectives of increasing charities’ accountability and promoting public trust and confidence.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

Given my earlier contribution, the Minister may recognise that I am slightly concerned about the notion of the Charity Commission having a view at all. Surely the important things are what Parliament has to say and the establishment of the objectives of any particular charity. We should all have concern about the notion of the Charity Commission imposing its will over the objectives of a charity.

Photo of Rob Wilson Rob Wilson The Parliamentary Secretary, Cabinet Office

My right hon. Friend need not worry about the Charity Commission imposing its will on charities; there are many safeguards, including the referral to a charity tribunal, to make sure that that does not happen. Ultimately, the Charity Commission relies on the support of the sector itself to make sure that it can function properly.

The commission already publishes details of its non-inquiry compliance cases when it is in the public interest to do so, and it does that without a specific statutory power. When the regulator has to intervene and issue an official warning, it is right that that should be placed in the public domain, although it should be made clear that when the issue that gave rise to the warning has been addressed, it should be archived after a period. The commission has a published policy on how it reports on its regulatory work, and it is available on gov.uk. The commission would need to update the page with regard to official warnings, so that there would be a clear policy. Charities can and do make representations to the commission about the publication of particular information.

Amendments 8 and 10 would undermine the increased transparency and public accountability of official warnings, turning them into an ineffective tool without real impact. Amendment 11 seeks to limit the Charity Commission’s ability to issue a warning, so that it could do so only after a minimum notice period of 14 days. On the surface, that would ensure that, in all cases, the trustees had sufficient time to consider the notice of intention to issue a warning and co-ordinate any representations that they might wish to make.

I am sympathetic to the aim of ensuring proper notice, but I believe that that should be addressed in the Charity Commission guidance. It is already clear that if the Charity Commission decides to issue a warning, it must give notice of its intention to the charity and the trustees. The warning power may be appropriate in some circumstances when the commission needs the flexibility to act more quickly than 14 days. Following debate in Committee, the Charity Commission has recognised the concerns raised and it has reassured me that it will normally apply a minimum notice period of 14 days. That will be made clear in its forthcoming guidance, which will be published ahead of these powers coming into effect.

Finally, I believe that the changes proposed by amendment 12 are unnecessary as they aim to remedy a problem that does not exist in the current draft form of clause 1. It is already clear that any remedial action that the Charity Commission may suggest in response to a warning does not amount to a direction. The Government have been consistently clear that the commission could not use the official warning power to direct charities, and I am happy to reiterate that position again for the record. What the power does enable the commission to do is provide advice and guidance to the charity on how it can remedy a breach that has been identified in the warning. This gives the offer of support to a charity so that issues can be resolved in a timely and adequate manner. It will also help charities to understand in more detail what processes or actions led to the issuing of a warning and what type of conduct could avoid this in future. I hope that I have laid out in detail to the House and to the hon. Member for Redcar why I do not support her amendments to clause 1.

I turn to Government amendment 2, which relates to clause 1. Previously, the power to issue a statutory warning did not include a provision that would specifically enable the Charity Commission to vary or withdraw an official warning once it had been issued. Amendment 2 rectifies that. Withdrawal could be necessary if it came to light that the warning should not have been issued in the first place or, in some cases, where the charity has addressed the issues set out in the warning. The power to vary a warning would likewise enable the commission to do so where the issue has been partly addressed by the charity, if the commission considered that to be appropriate. This is a sensible amendment and I commend it to the House.

Amendment (a) is unnecessary, because where the Charity Commission does withdraw a warning it will, as a matter of policy, set out the reasons for doing so when it notifies the recipient of the warning and publicises the withdrawal. I am sympathetic to the aim of the second part of the amendment, but do not support it. There could be a host of reasons why a warning is withdrawn, and some of them may warrant the details remaining on the public record for a period of time. The inclusion of this amendment could lead to unintended consequences that are detrimental to charities and to the commission. If a warning is withdrawn, there may still be press articles or other information referring to it, but if a member of the public then went to the register of charities, as the official source of information, they would find no mention of it there. In some cases, it may be better to keep a record of the warning there but explain that it has been withdrawn. The commission has already said that it would address these matters in guidance, which is the right place to consider them in detail. On that basis, I see no need for amendment (a).

Wes Streeting expressed concern that official warnings should not be used to force people to follow good practice. I agree. The explanatory notes make this clear, saying:

“Failure to follow good practice could not automatically be considered to constitute misconduct or mismanagement.”

I hope that helps the hon. Gentleman.

I now turn to the disqualification powers in clauses 9 and 10. Government amendments 3 and 4 are relatively modest, but we consider them to be necessary to ensure the proper operation of clauses 9 and 10. Clause 9 extends the effect of automatic disqualification to the most senior executive roles in a charity—that of chief executive officer and, where there is one, chief finance officer. In our discussions with the Charity Commission on this provision and how it would operate in practice, it became clear that there was a risk that a person employed by a charity who did not exercise any management function could be caught by the clause as it stands. This may be the case in a small charity that employs only one or two operational staff who may report directly to the board but do not perform management functions since those are fulfilled by the trustees. In those circumstances, the employee ought not to be caught by the disqualification provision as they are not involved in the management of the charity. Our amendment 3 ensures that this will be tightened up through drafting. Government amendment 4 makes exactly the same provision in relation to the power of the Charity Commission to disqualify under clause 10. I hope that hon. Members agree that these are sensible provisions to add to the Bill.

I am extremely grateful to my right hon. and learned Friend Sir Edward Garnier for tabling his amendment as it gives me the chance to provide some reassurance on the record. He is a strong supporter of and advocate for charities involved in the rehabilitation of ex-offenders, which is an extremely commendable cause. Charities and the voluntary sector play a significant role in the support and rehabilitation of ex-offenders, and we should recognise and encourage their important contribution to reducing reoffending and helping former offenders to reintegrate into society.

I want to ensure that the Bill’s provisions do not have an undue impact on that very important work.

The disqualification provisions are important. Although the existing system has worked well, it needed to be updated. The Bill seeks to extend the disqualification provisions as an important way of protecting charities from individuals who might seek to abuse their position of trust, whether for personal financial gain, to abuse beneficiaries or for some other purpose.

Rehabilitation charities are understandably concerned that that might have implications for ex-offenders who have changed their ways and want to give something back by volunteering with or working for a charity. However, people who can show that they have turned over a new leaf and want to take up positions of responsibility in the charity sector have the ability to apply to the Charity Commission for the disqualification to be waived under section 181 of the Charities Act 2011.

It is worth pointing out that, in the past four years, the commission has received six applications for a waiver in cases where the disqualification resulted from an unspent criminal conviction. All the applications were granted. Furthermore, there is a right of appeal to the charity tribunal if the Charity Commission refuses to grant a waiver. It is also worth reminding the House that the disqualification applies only to the senior management roles of trustee, chief executive and chief finance officer. The provisions do not prevent disqualified individuals from volunteering or working in other roles in the charity.

For the record, I can confirm that we will not commence the automatic disqualification provisions in clause 9 for 12 months following enactment. I would be prepared to consider a slightly longer period if necessary, as my right hon. and learned Friend has requested. We want to work closely on implementation with rehabilitation charities, such as those he has represented so effectively today.

I have asked the Charity Commission to engage closely with rehabilitation charities, such as Unlock, as it develops new guidance on the waivers ahead of the commencement of the provisions. It has agreed to do so and has started to set up a working group to consider how the changes will be implemented. For example, it has invited several rehabilitation charities to a workshop in February to discuss the Bill and the implementation of these provisions.

Photo of Peter Kyle Peter Kyle Labour, Hove 4:00 pm, 26th January 2016

Will the Minister join me in congratulating the charity Unlock on working with the right hon. Gentleman? That partnership between a party politician and a charity produced a fantastic speech. He made some very important points, and that is clearly having an impact on legislation on the Floor of the House of Commons. Is that not to be welcomed?

Photo of Rob Wilson Rob Wilson The Parliamentary Secretary, Cabinet Office

I can see the trap that the hon. Gentleman is setting for me, and I am not going to walk into it. I have further comments to make on the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act, but I thank him for his attempt, lame though it was.

Some people who are currently trustees or senior managers will be caught by the extension of the disqualification provisions. Although the number of waiver applications is likely to increase, we do not think that a significant number of people will be affected by the changes. I would be surprised if it ran to more than the low hundreds, based on the commission’s experience under the existing disqualification regime.

I recognise the concerns that have been raised by my right hon. and learned Friend, and I am happy to commit to producing a report on our assessment of the impact of the disqualification changes. I will deposit it in the Library of the House before the commencement of the automatic disqualification provisions in clause 9. I cannot promise that we will cover every point listed in amendment 1, but I will ensure that we provide a very detailed assessment, as he has requested.

I want to ensure that the disqualification powers in the Bill protect charities from individuals who present a known risk, while at the same time providing for the rehabilitation of offenders and a way back into charity trusteeship or senior management on a case-by-case basis. That strikes me as both fair and proportionate.

Photo of Edward Garnier Edward Garnier Conservative, Harborough

I thank my hon. Friend for his very welcome assurances. I much look forward to the discussions that will follow this debate, as do those I have been speaking with and for today.

Photo of Rob Wilson Rob Wilson The Parliamentary Secretary, Cabinet Office

I thank my right hon. and learned Friend for those kind words. We will certainly work very closely with those organisations.

Amendment 13 seeks to empower the Charity Commission to disqualify several trustees in cases of collective failure. In Committee, I explained that the Charity Commission already has the power to act in such circumstances and, indeed, has done so in cases relating to systemic governance issues. There is no reason why the Charity Commission could not take action against all the trustees of a charity where it was appropriate, proportionate and in accordance with the principles of best regulatory practice to do so. For that reason, I do not support amendment 13.

Amendment 14 would give the Charity Commission the job of consulting on and publishing guidance on how it assesses “unfitness” in relation to the power to disqualify, as set out in clause 10. We discussed a similar amendment in Committee and, although I agree with its intended effect, I do not believe that it is necessary. When the Bill was introduced in the other place, the Charity Commission published a well-received document setting out its initial thoughts on how it would exercise the disqualification power. The document highlights the broad categories that the commission would consider, namely honesty and integrity, competence and credibility. It gives various examples of the sorts of specific conduct that it would take into account. I explained a number of those examples in Committee and do not propose to repeat them today.

The Charity Commission has further committed to develop and consult on its initial thinking in draft guidance on how it would operate the power to disqualify. All of that will happen before the power to disqualify is commenced. As with any commission guidance, it will be kept under regular review to reflect changes in legislation or tribunal findings. On that basis, I do not see that amendment 14 is necessary.

Amendment 15 was previously proposed in Committee by the hon. Member for Redcar. The Charity Commission already considers only conduct that is “relevant and serious”. If it were to take account of other conduct, I would expect any resulting disqualification order to be thrown out by the charity tribunal on appeal. Besides that, the amendment should not be passed because the inclusion of the words “relevant and serious” in condition F would pose potential unintended consequences.

Including those words in the disqualification power could cast doubt on all the Commission’s other powers that do not contain them. The exercise of those other powers, such as the power to remove a charity trustee or the power to direct a charity, already depends on conduct that is both relevant and serious, even though those words are not included in the criteria for exercising the powers. I do not want there to be the risk that the other powers could be interpreted as not requiring relevant or serious conduct in order to be exercised. Although I understand and sympathise with the aims of amendment 15, I hope the House will understand why I do not believe that it is necessary and how it could inadvertently reduce the bar for the exercise of the commission’s other powers, which I would not support.

Amendment 5 is another relatively modest Government amendment that was suggested to us by rehabilitation charities. As I said in relation to the amendment tabled by my right hon. and learned Friend the Member for Harborough, we are keen to work with rehabilitation charities to ensure that the Bill does not undermine their important work.

To make a disqualification order against a person, the Charity Commission will have to meet one of six conditions, from A through to F, alongside a number of other things. Condition B is that the individual has been convicted outside the UK of an offence against a charity or involving the administration of a charity which, had it happened in the UK, would have automatically disqualified the individual. As it stands, the commission can take into account only an overseas conviction that is not spent under the law of the territory where the conviction took place. It was pointed out to me that it would be fairer and more proportionate if the limitation related to the UK rehabilitation period for an equivalent UK sentence, rather than the rehabilitation period of the overseas jurisdiction. I agree that that would be more proportionate, and amendment 5 makes the necessary change.

My right hon. Friend Mark Field ingeniously managed to speak about independent schools. He made an important point about the variety of ways in which independent schools provide public benefit. There is not one single way to achieve public benefit and the Charity Commission would certainly not direct any independent school that there was.

New clause 2, proposed by the hon. Member for Redcar, represents an attempt to reinsert a provision that the Government removed in Committee. Let me explain why the Government oppose it. It was described by several peers in the other place as sending a signal of opposition to the Government’s plans to legislate to extend the right to buy to tenants of housing associations. That message has been received, considered and responded to. Extending the right to buy to tenants of housing associations is a manifesto pledge on which the Government were elected and are committed to deliver. It will mean that up to 1.3 million more families in England get the chance to own their own home while at the same time ensuring the replacement of housing stock.

We listened to the concerns raised. Rather than legislating to implement the policy, we reached a voluntary agreement with housing associations which will implement the policy while protecting the independence of housing associations.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

It is important that the Minister reflects that that was a manifesto commitment—even some of us on the Government Benches had concerns about it, but it was a manifesto commitment. It was rightly brought up in the Housing and Planning Bill, and it is disrespectful to the House, and a dangerous precedent, when one Bill is used to undermine another Bill that is part and parcel of a manifesto commitment. That also happened in the previous Parliament on the boundary changes, when a measure in an entirely different bit of legislation was used to oppose that policy. The House of Lords is abusing its position if it thinks it can do that in that form.

Photo of Rob Wilson Rob Wilson The Parliamentary Secretary, Cabinet Office

I am sure the noble Lords along the corridor will have listened carefully to my right hon. Friend. I hope the Bill will not be altered further as a result of his very strong words.

Photo of Anna Turley Anna Turley Shadow Minister (Cabinet Office)

To take up that point, the right to buy affects charities, and we are debating charities legislation. The right to buy affects the ability of housing associations to control their assets, which is a fundamental change to the balance of the relationship between their role and the Government’s ability to tell them what to do. That is why we have debated it today.

Photo of Rob Wilson Rob Wilson The Parliamentary Secretary, Cabinet Office

The Opposition are obviously entitled to propose whatever amendments they want as long as they are in order, but the problem is not just that new clause 2 is completely unnecessary; it would also be damaging, although I am sure that that was not the hon. Lady’s intention.

Many of the rules that apply to charities’ investments in, and their disposal of, assets, derive from case law that has been built up over hundreds of years. Proponents of the new clause argue that it reflects the existing case law, but I simply do not accept that. A simple statutory provision such as the new clause cannot hope to reflect the accumulated detail of case law derived from many hundreds of judgments.

Case law already requires charities to use and dispose of their assets in a way that supports the delivery of their charitable purposes. That provides flexibility for certain circumstances that a statutory provision cannot provide. For example, how would the new clause affect compulsory purchase orders in relation to charity land? How would it affect the existing rights of more than 1.4 million housing association tenants under the preserved right to buy or the right to acquire? How would it affect the exercise of Charity Commission powers such as its power to direct charity property in the course of a statutory inquiry? There are simply too many questions about the measure to which we have not had satisfactory answers either this afternoon or during the course of the Bill’s proceedings.

New clause 2 would give the Charity Commission a new and very broad role in policing the use and disposal of charity assets. That is inconsistent with our current aim of helping the commission to focus on its core regulatory activities.

New clause 3, which is also in the hon. Lady’s name, is at best unnecessary and at worst damaging. Charity law already sets out clear rules on what charities can and cannot do in relation to campaigning and political activity. I explained those in detail in Committee and do not propose to do so again today. New clause 3 might seek to reflect existing law, but it does not. In a similar way to new clause 2, new clause 3 attempts to include in a statutory provision the existing case law. That seriously risks changing the boundaries of what is permitted.

New clause 3 would allow charities to undertake political campaigning or political activity, but does not define what that means.

Would it, for example, allow partisan political campaigning? If that were the case, it would represent a real shift in the law and I would strongly object to that. In particular, I think the public would be very surprised and disappointed to see charities taking part and campaigning on a party political basis. Existing case law does not allow charities to engage in political campaigning to such an extent that it calls into question whether in fact they are a charity or, rather, a political campaigning organisation. Again, it is not clear to me that new clause 3 would incorporate that crucial limitation, potentially opening up charitable status to organisations with a political purpose.

Photo of Wes Streeting Wes Streeting Labour, Ilford North 4:15 pm, 26th January 2016

I can only think that the Minister has not been listening to the debate this afternoon or in Committee. He is, once again, deliberately muddying the waters between legitimate campaigning and party political activity. Is the Minister not trying to defend a pattern of Government behaviour of clamping down on any scrutiny or opposition, whether in this place, the House of Lords, the charities sector or the trade unions?

Photo of Rob Wilson Rob Wilson The Parliamentary Secretary, Cabinet Office

What the hon. Gentleman says is quite extraordinary. We had this debate in Committee. It was quite clear, from the reaction to the concerns about the Badger Trust, that the hon. Gentleman and those on the Opposition Front Bench agreed that party political campaigning was actually a good thing. Even today that has been repeated, with regard to the Badger Trust. The hon. Member for Redcar disagrees with the Charity Commission finding that it was party political.

In Committee, my hon. Friend Robert Jenrick gave us a very strong warning about new clause 3, which sums it up well and bears repeating. He asked us to look across the Atlantic to America, where charities can engage in party politics and support political candidates, and where wealthy philanthropists can set up organisations with blurred aims. He said we should be careful what we wish for. I agree with that sentiment entirely. The new clause would risk setting us off down a very slippery slope of involving charities in party politics. For that reason alone, I strongly encourage the House to oppose it.

On fundraising, I am sure all hon. Members will be aware of the poor fundraising practices uncovered over the summer. They present a real risk to levels of public trust and confidence in charities. I asked Sir Stuart Etherington to review how fundraising had been regulated in the past and to suggest improvements. The Government accepted his recommendations for a new, stronger self-regulatory body, backed up by the statutory powers of the Charity Commission. This new fundraising regulator is currently being set up by Lord Grade of Yarmouth and his chief executive Stephen Dunmore. The new regulator will establish the fundraising preference service, which will give people who feel overwhelmed by the sheer volume of requests they receive a simple way to opt in. I am grateful to the working party, led by George Kidd and supported by the NCVO, which has already started to draft proposals on how the FPS will work in practice.

As I made clear in Committee, this place owes it to the generous British public to ensure that they are not coerced or bullied into giving their hard-earned money to charity. It is because of this that we brought forward Government amendments in Committee that would enable the Government to step in and compel charities to register with the self-regulator should they fail to do so voluntarily and in significant numbers. Should this still prove insignificant, the Government would have the power to mandate the Charity Commission with the regulation of fundraising.

I truly hope that I and my successors are not put in a position to have to resort to those reserve powers, and that charities seize this last chance to make an independent self-regulatory system work. If self-regulation does fail, however, we need to make sure that we are equipped to step in quickly with effective statutory regulation. In that respect, I warmly welcome Opposition Members’ support for the Government’s approach to addressing fundraising regulation. I give particular thanks to the hon. Member for Redcar for her supportive comments on Second Reading and in Committee.

I thank my hon. Friend Mr Jenkin for his work as Chair of the Public Administration and Constitutional Affairs Committee. His Committee has played an important role in investigating the poor fundraising practices we saw last summer. I welcome the Committee’s report, which was published yesterday, and I will give it careful consideration before responding fully in due course. As it highlights, the public rightly expect the highest standards from our charities. Like the Committee, I believe that charities should get a last chance to put their own house in order to restore public trust and confidence.

Photo of Sylvia Hermon Sylvia Hermon Independent, North Down

The Minister will know that people in Northern Ireland give generously to charities. Regrettably, the Bill has been designated as exclusively English. If constituents of mine are oppressed by requests from charities, can they legitimately complain to the Charity Commission and the new regulatory body?

Photo of Rob Wilson Rob Wilson The Parliamentary Secretary, Cabinet Office

The hon. Lady is right that the Bill has been certified as England and Wales only. Northern Ireland has a separate devolved process. I suggest that, as her first port of call, she speak to those responsible in Northern Ireland.

Photo of Sylvia Hermon Sylvia Hermon Independent, North Down

The Minister does not seem to grasp the point. There are national charities across the UK, of which Northern Ireland is a part. Thousands of people voted in the referendum on the Good Friday agreement—the Belfast agreement—to remain part of the UK. The donors and supporters of national charities, such as the Salvation Army, the Royal National Lifeboat Institution and others, are also in Northern Ireland, so the first port of call should be here, not Northern Ireland.

Photo of Rob Wilson Rob Wilson The Parliamentary Secretary, Cabinet Office

The hon. Lady makes her case strongly, and it is absolutely right that she should do so here in the UK Parliament. I hope that she will also make her case strongly to the devolved Administration, which many people in Northern Ireland wanted, and got as a result of the actions of subsequent Governments.

New clause 4 would fundamentally change the division of responsibilities between the new fundraising regulator and the Charity Commission. If we were to propose that the commission hold public hearings on matters of charitable fundraising, this would effectively amount to a form of statutory regulation. The commission does not believe that it currently has the resources effectively to exercise the power to hold hearings on fundraising, as suggested in the new clause. It can, in theory, already hold hearings in relation to statutory inquiries under section 46 of the Charities Act 2011, but it does not do so because it would not be an effective means of undertaking its casework. Unlike with other powers in the Bill, the commission does not ask for this ability.

I understand that my hon. Friend the Member for Harwich and North Essex may have intended in new clause 4 to offer to witnesses giving evidence to the Charity Commission in public hearings on charity fundraising the protection of not having their evidence used against them in other proceedings, rather than legal professional privilege. Legal professional privilege protects the lawyer-client relationship and is not what I think he is looking to achieve. However, the proposed hearings would be proceedings undertaken by the commission, not proceedings in Parliament, so parliamentary privilege would not be appropriate, either. The reserve power to regulate fundraising in section 64A of the Charities Act 1992 is a power to make secondary legislation that is necessary or desirable or in connection with regulating charity fundraising. If the commission were to assume statutory responsibility for the regulation of fundraising and this included holding public hearings, we would need to consider, at that point, what protection for witnesses would fall within the scope of the power.

My hon. Friend’s new clause 5 would prematurely task the commission with becoming the primary regulator for fundraising activities. The Government have provided for this already, but through the stronger reserve powers we introduced in Committee. We would also risk undermining public confidence, if self-regulation were to fail while under the oversight of the commission, particularly if the solution to that failure was statutory regulation by the commission. We would also need to do a lot more detailed thinking about whether, and if so how, witnesses could or should be protected by an equivalent to parliamentary privilege, which is what I think he might have been seeking with the new clause.

However, I completely agree with the finding of the Select Committee on Public Administration and Constitutional Affairs that

“It would be a sad and inexcusable failure of charities to govern their own behaviour, should statutory regulation became necessary.”

Perhaps I can reassure hon. Members that, under the reserve powers in the Bill, it would be possible for the Charity Commission to be given statutory responsibility for the regulation of fundraising, but to deliver that through a third party such as the fundraising regulator. New section 64C(2) of the Charities Act 1992, as introduced by clause 14, already specifically enables that.

Photo of Martin Docherty Martin Docherty Scottish National Party, West Dunbartonshire

I am sure the Minister recognises the comments that Lady Hermon made in relation to Northern Ireland, which I also raised during the general debate in relation to fundraising. This legislation should not impact on the right of the Scottish Parliament to legislate on fundraising for charities. Will the Minister reiterate that here on the Floor of the House?

Photo of Rob Wilson Rob Wilson The Parliamentary Secretary, Cabinet Office

The representatives for Scotland were at the fundraising summit recently. This is a devolved matter, and it is up to them what rules they set for Scotland. They do not have to follow; this is an England and Wales Bill, which does not affect Scotland. It is therefore up to the Scottish regulator how they wish to proceed.

I maintain that it is important to keep a clear division between statutory and self-regulatory powers to ensure better regulation of fundraising. The best way to achieve that is to support the new fundraising regulator and, if it should fail, make a decisive and clear move to statutory regulation. Should self-regulation fail, the Government will not hesitate to intervene, which could include tasking the Charity Commission with the regulation of fundraising. However, we think it is too soon to commit the Charity Commission to an enhanced statutory role in fundraising, so I hope my hon. Friend the Member for Harwich and North Essex will understand why I do not support his new clauses 4 and 5.

Let me turn finally to Government amendments 6 and 7. It would not be fair to ask the taxpayer to carry the cost of fundraising regulation if it is the result of a failure by charities to protect the public from their own poor practices. Government amendments 6 and 7 would therefore enable the fundraising regulator or the Charity Commission to charge fees to those it regulates for that purpose. Many of the charities signed up to and paying for the old system of self-regulation were those that followed best practice, and there was a problem of free riders. To guard against that risk, the Etherington review suggested that any charity with fundraising expenditure beyond a certain level should be subject to a levy, requiring the large and medium-sized fundraising charities to pay for regulation.

Should the Government need to compel charities to register with the charity fundraising regulator, it is important that the fundraising regulator is able to levy fees for registration. That is exactly what amendment 6 would enable. Government amendment 7 deals with fees, should the reserve power be exercised for the Charity Commission to regulate fundraising. It would ensure that regulations could provide for the Charity Commission to charge fees across the range of bodies that it would regulate as the fundraising regulator.

I hope my explanations suffice to convince hon. Members that these amendments are an important part of the backstop to self-regulation and will help to ensure the effective regulation of fundraising in future, but I would of course be happy to provide more detailed responses. The main point is that I hope that these amendments are not needed and that charities will support the new, tougher self-regulatory system being established under the leadership of my noble Friend Lord Grade of Yarmouth. I commend these Government amendments to the House.

Photo of Anna Turley Anna Turley Shadow Minister (Cabinet Office)

For the sake of colleagues, I will be brief. I thank everybody for their contributions this afternoon. There is a wealth of experience from the charity sector in the Chamber, which has added a richness to the progress of the Bill.

Let me turn straight to new clause 1. Although I do not share the Minister’s view that judicial review will be more cost-effective—that may be the case for the Charity Commission, but perhaps not for charities that are appealing, many of which will not be able to afford to go to judicial review—I am willing to work with the Charity Commission, the sector and the Government to monitor the use of warnings outside of primary legislation. Therefore, I do not wish to press new clause 1 to a vote, although I wish to test the House on new clause 3 and amendment 8, because I do not feel our concerns have been met on either issue. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.