Charities Bill [HL]

– in the House of Lords at 6:25 pm on 8 November 2005.

Alert me about debates like this

Photo of Baroness Scotland of Asthal Baroness Scotland of Asthal Minister of State (Criminal Justice and Offender Management), Home Office, Minister of State (Home Office) (Criminal Justice and Offender Management) 6:25, 8 November 2005

My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the Charities Bill, have consented to place their Prerogative and Interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

I beg to move that this Bill be now read a third time.

Moved, That the Bill be read a third time.—(Baroness Scotland of Asthal.)

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip

My Lords, it might be helpful before we get into the detailed consideration of the Bill to make a short statement on the vote that was held on 12 October on Report. Your Lordships will recall that the House voted into the Bill an amendment moved by the noble Lord, Lord Phillips, which removed the control of the Minister for the Civil Service over the terms and conditions of the staff of the new Charity Commission, substituting a provision that would allow the commission to determine the remuneration of its staff subject to an overall remuneration budget agreed with the Treasury. The amended provision is now paragraph 5(3) to a new Schedule 1A to the Charities Act 1993, which appears at line 41 on page 80 of the Bill.

The Government have since had time to reflect and explore the effects and implications of that amendment. My understanding is that a significant effect of it may well be to remove from the Home Civil Service the staff of the new commission, with the exception of the chief executive, over whose terms and conditions ministerial control survives. That must in turn call into question the status of the commission under the amended Bill as a non-ministerial department. It was and remains the Government's intention that the staff of the new commission should be in the Home Civil Service, as the staff of the present charity commissioners are. I do not believe that the noble Lord, Lord Phillips, intended by his amendment to remove the staff of the new Charity Commission from the Home Civil Service. Accordingly, the Government will consider what steps they can take in another place to ensure that the commission staff will continue to be in the Home Civil Service from the moment when the provisions converting the existing commissioners to the new commission take effect.

(9)I thank the House for bearing with me while I made that statement, but I thought it only right and proper, given that it was an amendment from your Lordships' House, that I explained the situation and some of the difficulties that it has created. I am prepared simply to say that those noble Lords who are involved in the debate are welcome to join, perhaps with myself or the Bill's Minister and officials, to discuss and reach a deeper understanding of the implications of the amendment. It is probably best left at that.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Spokesperson in the Lords (Id Cards & Charities Bill), Home Affairs

My Lords, I am grateful to the Minister for alerting the House to the problems that he explained. They bear a little thinking about, and I cannot confess to having taken in the whole plot at one hearing, but I am grateful that he has offered talks to see how nearly we can get to the amendment passed by the House on a vote, assuming that there is some other way of getting nearer to the wishes of the House. We look forward to those talks.

On Question, Bill read a third time.

Clause 3 [The "public benefit" test]:

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour

moved Amendment No. 1:

Page 3, line 27, at end insert—

"( ) In determining whether an independent school meets the public benefit test under this section, the Charity Commission shall have regard to any directions or guidance issued by the Secretary of State."

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour

My Lords, in moving Amendment No. 1, I shall speak also to Amendment No. 6, which stands in my name.

The amendments cover what in my view is the most controversial part of the Bill—that is to say, the charitable status of fee-paying schools.

Photo of Lord Swinfen Lord Swinfen Conservative

My Lords, the noble Lord said that he would speak also to Amendment No. 6, which is my amendment. Does he mean Amendment No. 5?

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour

My Lords, I apologise, I did mean Amendment No. 5.

I apologise for returning to this issue on Third Reading, but since we last considered these matters the Government have produced their education White Paper, which in my view has changed the climate in which this debate takes place.

The problem at heart is that the Government believe that the public schools—including, for example, Eton and Harrow—are charities. I ask myself, "Who in the Government believes this nonsense?". In my 40 years' membership of the Labour Party, I have never heard it argued that Eton is a charity. The public do not believe it, and neither do Labour MPs, as they will inevitably express in a few weeks when the Bill hits the House of Commons.

The charitable status of public schools brings charity law into disrepute. The fee-paying schools desperately cling on to that status for the tax benefits. It is perfectly reasonable for public schools to have tax benefits because they reduce the pressure on public expenditure, but charity status is the wrong vehicle to use to provide those benefits. If the fee-paying schools want tax benefits, they should come under separate provisions in the Finance Act in return for providing public benefit. We should just take them out of the area of charity law. The Bill does not do that, though; it leaves it to the Charity Commission to decide their public benefit contribution.

A Charity Commission that has left Eton, Harrow and other public schools as charities over the years has a question mark hanging over it. Indeed, during consideration in the Joint Committee, I asked around in the charitable sector why it was that the commission, in the view of some, was so timid. I did not like the reply, but I will put it to the House. I was told that it was because the commission's management was riddled with people who have interests in private education for their own children, and they do not want to rock the boat.

The truth is that I do not trust the judgment of the Charity Commission. They will duck the hard decisions on private education that are required, which brings me to my amendments. They are both about the need for political, parliamentary influence to be exerted on commission decisions in relation to fee-paying schools. Amendment No. 5 draws on the work of the Nathan committee, which made recommendations in 1950 about the future of charities. It recommended that the Charity Commission and the education Minister share responsibility for the charitable status of fee-paying schools, the reason being that the charitable, voluntary and endowed schools and the technically non-charitable LEA-maintained schools were part of the same national system. That position was written into the Charities Act 1960. As a result, until 1973, the Secretary of State for Education was charity commissioner for educational charities, and shared responsibility for those schools with the Charity Commission.

In 1973, the government changed the law and removed that provision—primarily, many believe, in order to emphasise that there should be two separate school systems: one of fee-paying education out of the reach of government for some, and a free education under government supervision for the others. In retrospect, that was a significantly deliberate political Act of Parliament. In 1974, a change of government took place, and a Select Committee of the Commons unanimously recommended that fee-paying schools should retain their charitable status only if they could prove public benefit. That then became my party's policy.

Today the Nathan principle is as compelling as it was in 1950 and 1960, and it is against that background that the Government, like their 19th-century predecessors, are seeking to create in their White Paper the concept of a national system of education that is more intact. I remind the House that, during the 19th century, governments of both parties assumed that fee-paying schools were part of the state system, and many committees and commissions were set up to keep a state system for education intact.

Only yesterday the Times reported that a fee-paying charitable school in Liverpool was to become a maintained non-fee-paying school—a healthy development. That school has decided to become part of the non-fee-paying state system. In the circumstances of the new policy, it is absurd that the Charity Commission, which has little educational expertise, should, with the courts as a longstop, be effectively the only arbiter of the place of new maintained schools in the state system.

(5)Nathan was absolutely right: whatever the status of schools, the Secretary of State responsible for the national system of education should be given reasonable purchase on the shape, framework and operation of a new developing state system. My amendment would restore the shared responsibility between government and the Charity Commission that existed before 1973. I believe that my argument in this regard is compelling, and if your Lordships do not recognise that, I hope that the Commons does when it comes to consider these matters.

Amendment No. 1 concerns the height of the public benefit hurdle that fee-paying schools will be compelled to surmount if they wish to maintain their charitable status. The issue has been well rehearsed in previous stages, and I do not want to go down that route. The Government's brief, for which my noble friend is required to argue, has been unconvincing. It is an immensely political issue, and one that dominates debates on education in our party. Many obvious and genuine charities resent their charitable status being entangled by the Government with that of Eton, Harrow and the other fee-paying schools.

The proposition that this criterion should simply be left to a quango—the Charity Commission—and the courts, bodies whose individual members cannot be considered disinterested parties in the light of their personal commitment to private education, is offensive. Decisions about the nature of public benefit should be enshrined in statute by Parliament, particularly by the elected House of Commons. If the latter amendment does not appeal to your Lordships, I hope that the Commons will see the sense of it. I beg to move.

Photo of Lord MacGregor of Pulham Market Lord MacGregor of Pulham Market Conservative

My Lords, as in previous debates on this subject on this Bill, I declare an interest as the deputy chairman of the Association of Governing Bodies of Independent Schools. We have already discussed at some length the position of independent schools, and I do not intend to go over the previous ground in any detail. The only way I will follow the noble Lord is in being as brief as I can about the issues.

I strongly disagree with the noble Lord about the value of charitable status and the way that independent schools look at it. He put particular emphasis on the financial benefits. The tax benefits amount to something like £100 million a year. In past debates I have gone into rather greater detail about the financial aspects, but suffice it to say that, if one takes into account all the other aspects, broadly speaking, the independent schools contribute twenty times that to education as a whole and to the public good. So one may well ask, "Why put such emphasis on the financial benefits?".

The noble Lord conceded the financial benefit point and suggested that this could best be dealt with in a Finance Bill. We have debated this in Committee, and he knows as well as I do that that is no commitment. It would perhaps be an inappropriate place to deal with the issue. Given the nature of the problems facing the Chancellor with his fiscal deficit, I doubt whether it would happen. We cannot go down that route.

There is another point. If the financial benefits seem to go the other way, why does the independent sector value charitable status so much? There are two basic reasons. It has a strong sense of public good, and charitable status underlines that. There is another practical problem. If charitable status is lost, there would be difficulties regarding all the assets that belong to independent schools. That would threaten the whole nature of independent schools. I wish that the noble Lord had not talked only about Eton and Harrow. I could have talked about a much wider range of independent schools that make a major contribution to public benefit—indeed a substantial proportion of pupils now attending independent schools receive some form of bursary help.

That leads me on to my second point about public benefits. I want to underline the fact that the independent schools entirely accept the position in the Bill about public benefit. Increasingly over the past 10 years, more and more has been done by the schools to provide public benefit in all sorts of ways. I have elaborated on those before and do not intend to do so now. They take the matter very seriously.

I have two reasons for speaking against the amendments, and they follow the general principles that have run through our debates on the Bill. First, we have constantly emphasised—in relation not just to this sector but to all charities—the importance of flexibility in defining public benefit, as social needs and conditions change. That is best preserved as it is in the Bill. Secondly, we have stressed above all the independence of the commission. We have resisted setting out detailed definitions of public benefit in the Bill, and we should not therefore legislate for a Secretary of State's direction on one charitable activity alone for that one sector. Those two principles are undermined by the amendment.

Ministers have rightly insisted on those principles throughout our debates. As this is possibly my last contribution to the Bill, I would like to pay tribute to the Minister, my noble friend Lord Hodgson of Astley Abbotts and the noble Lord, Lord Phillips of Sudbury, for the way in which they have conducted the passage of the Bill. It has been a model of how the House of Lords can contribute greatly to the legislative process. The Minister has been superb in the way he has listened to the debates and dealt with points and as a result the Bill is greatly strengthened.

I agree with the two principles that Ministers have insisted on in the Bill, and I hope that we shall stick with them.

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Spokespersons In the Lords, (Assisted By Shadow Law Officers), Spokespersons In the Lords, (Also Shadow Secretary of State for Scotland - Not In Shadow Cabinet)

My Lords, before I contribute I declare an interest, as this debate concerns independent schools. I have previously declared my interest as a governor of Shrewsbury School, one of the great public schools of the Public Schools Act 1868.

The general issue has been discussed many times, most notably at our last meeting on a slightly broader amendment tabled by the noble Lord, Lord Phillips, which was tested in the House and was not successful. I continue to support the Government. They have reached a delicate balance—not a fudge—on the issue. It stands on three pillars. First, we are all agreed on the need for an independent Charity Commission. The Government have done much to buttress that independence particularly with new subsection (4) in Clause 6. We made a further buttressing change—I know that the Minister did not like it—on the last occasion to paragraph 5(3) of Schedule 1. We have made the Charity Commission as independent as we can. That is the first leg.

The second leg is that this independent body has responsibility for establishing and enforcing the public benefit, and there is the requirement that there is proper consultation in Clause 4(4). It has a playing field to work on—and a level playing field at that. It is unfair of the noble Lord, Lord Campbell-Savours, to say that commission members will duck hard decisions before they have even set out down the road. He says they have little educational experience. We are talking about a range of charities here. He is over-harsh.

The third leg is that we require the public benefit test to be complied with continuously and not just at the commencement of a charity's life. A level playing field has been established. In his first amendment, the noble Lord wants to reach down and tilt that playing field in respect of one narrow subsection that has caught his eye—or should I say "his ire"?

The second amendment shows precisely why, we believe, the Charity Commission should be completely independent and free from political interference of whatever kind. I accept that the noble Lord's remarks would fit into a debate on education policy rather than a debate on charities. They do not belong to the issues that we are discussing tonight. With the help of the Government and with amendments from the noble Lord, Lord Phillips, and from us we have got the Charity Commission in an independent and strong position. I hope that the Government will stand firm and reject the amendment.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Spokesperson in the Lords (Id Cards & Charities Bill), Home Affairs 6:45, 8 November 2005

My Lords, when I heard the noble Lord, Lord MacGregor of Pulham Market, congratulate the Government on their handling of the Bill, I was going to say, "No wonder. They have not laid a glove on his beloved independent schools". Then he went on to say how much I had contributed, and I would not now think of making such a remark.

There has been—I will use the word—a "fudge" over the issue in the Bill. I have twice proposed an amendment of the purest moderation that would have required the Charity Commission to have regard to the effect on access to independent schools in its consultations and considerations, particularly in respect to their fee-charging structure.

I am not going to agree with the noble Lord who has tabled the two amendments. Hereafter I am going to hoist the Government with their own petard. Their constant refrain to my amendment was: "It's not necessary, old boy. It's all there, and of course the Charity Commission will do precisely as your amendment would have them do". There will be extremely close scrutiny from some quarters to see whether the commission does that.

I am particularly dissatisfied with the amendments as tabled. The noble Lord, Lord Corbett, and I served on the joint scrutiny committee, and its members were very unhappy with the formulation on public interest. The noble Lord has made some fair points on that matter.

A Noble Lord:

My Lords, it was the noble Lord, Lord Campbell-Savours, not the noble Lord, Lord Corbett.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Spokesperson in the Lords (Id Cards & Charities Bill), Home Affairs

My Lords, I apologise. I am going mad. I meant the noble Lord, Lord Campbell-Savours. He does not even look like the noble Lord, Lord Corbett.

The reason that I do not support him is that he remarked that he did not trust the Charity Commission. I certainly do not trust Secretaries of State from one party to the next to issue directions on this sensitive issue. We could have a zig-zag course as we have had over central policies over decades between the two main parties and, who knows, my own party. I find the notion that a Secretary of State can simply weigh in and give directions on management and other matters very unsatisfactory, more unsatisfactory than leaving the matter to the Charity Commission in whom I have more faith than the noble Lord. He was wrong in saying that commission members had no educational experience; they have a lot by now. It is true that they took over educational charities only 20 or 25 years ago, but they have a lot of experience. They will have to engage people with the necessary experience in order to undertake the consultation that is cast upon them under the Bill.

I sit down an unhappy man, but one who will look closely at what happens, particularly if we have been sold a pup by the independent schools. We all talk about them as if they were a single monolithic group; they are not. We have heard here and in Committee from the best of them—the high master of Manchester Grammar School, Jonathan Shephard of the Independent Schools Council. They genuinely, I have no doubt, want to pursue the public interest path, and they have done that—admittedly, under the prospect of legislation of which they were wary. If it is the case that, once they have the Bill more or less in the shape that they want, they rest on their oars and the schools that have done nothing thus far do even less tomorrow, we will have cause to question our deliberations on this part of the Bill and we should return to the issue and seek to do something about it.

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip

My Lords, I first thank the noble Lord, Lord MacGregor of Pulham Market, for his kind comments about us all. Rather like the noble Lord, Lord Phillips, I was thinking, "Well, yes, perhaps the noble Lord would say that, wouldn't he?". The generosity of his view is well meant, and we have tried hard to make this as consensual a process as possible. That is not to say that we always agree on things and, in a sense, the amendment throws light on an area where there has been some considerable disagreement—properly so, because it is a difficult debate where many trenchant views are expressed. The noble Lord, Lord Campbell-Savours, put his view well, eloquently and forcefully—and rightly so.

That reaches the core of an important issue. It has certainly been the case, as several noble Lords have said, that one of the strong themes regarding the future of the Charity Commission is a desire to ensure that it is independent from the Government. There may be some difficulties about the formulation, as expressed in the amendment, to which I referred, and some work will need to be undertaken to see what can best be done about that position.

It is undoubtedly the clear will of your Lordships' House and of the Government that the commission's independence has been firmly established by statute and is highly desirable. As other noble Lords have said, the amendments tabled by the noble Lord, Lord Campbell-Savours, are entirely at odds with that overall theme, because they clearly state that the directions or guidance be issued by the Secretary of State, rather than the Charity Commission itself, which we can fairly trust to be of independent mind. I heard what my noble friend Lord Campbell-Savours said about it being an organisation that was, I think he said, "riddled" with people sympathetic to public schools. That is rather a harsh judgment and is unfair. In my experience, the Charity Commission takes a powerful, independent and professional view. I do not believe that personal views come into the way that it operates in the manner that the noble Lord's comment suggested. I know that those were not his own views; he was reflecting on something that others had said.

In considering whether or not an organisation meets the public benefit test, the commission should, and will, as the Bill is drafted, act in an independent manner. The idea that a government Minister should give directions about whether a charity in a particular class meets the public benefit requirement is unacceptable and should be unacceptable in the framework that we have set out. It would undermine the notion of a credible independent commission and undermine the principle that charitable status is decided objectively under the law.

It has been said before—it is the Government's view—that existing and proposed charities should be subject to examination by the commission of their public benefit credentials on the basis of a public benefit requirement established under the Bill. The noble Lord, Lord Phillips, raised the issue that he put in earlier amendments of whether the charging of a fee would be taken into consideration in terms of access and so on to demonstrate public benefit. We take the firm view that that is a proper consideration, and no doubt the commission will reflect that in the way that it publishes its guidance and how it clarifies the public benefit test.

The commission has said that it is able to apply the current law under the existing framework, as amended by the Bill, by removal of the presumption of public benefit that religious education and poverty relief charities currently enjoy. The commission has already published illustrative guidance on public benefit and on how it intends to go forward with guidance and the application of the law, once the Bill is enacted. It will apply to all organisations that aspire to charitable status and to existing registered charities. Independent schools will be no exception to that. Some of them might not meet the public benefit requirement, but there is no justification for singling them out, or any other class of charity, for the purposes of ensuring that the commission must have regard to ministerial directions or guidance when it considers their public benefit. Nor is there any justification for allowing the Secretary of State, as my noble friend's Amendment No. 5 would appear to envisage, to intervene in the commission's regulatory supervision of charitable independent schools.

In summary, there is nothing that attracts us to either of my noble friend's amendments or that is justified. On reflection, I thought that he gave us an interesting historical introduction, and I have little doubt that there will be a debate on the subject in another place.

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip

And, my Lords, I am sure that, to my noble friend's credit, he will ensure that there is. I cannot accept his amendments. They are inconsistent with our policy approach to the Bill and, for the reasons that I have set out, they would seriously compromise the independence of the Charity Commission, which is something that we are not prepared to entertain.

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour

My Lords, I am grateful to my noble friend for his response. I put to him that we are just fudging the issue. One day a Labour government will have to sort it out. I am grateful to other Members of the House. I am under no illusions that my amendment would find much support in the establishment, whether it be in the department, the commission, the independent sector or the House, but I keep on pressing it, because I believe strongly that I am right and that the matter should be dealt with.

I tell the noble Lord, Lord MacGregor of Pulham Market, that we can carry on sparring over the issue for ever, but it must be sorted out at some stage. However, it was the noble Lord, Lord Hodgson, on the Front Bench, who interested me by talking about the need to make a political decision. A political decision has been made. That is why nothing is changing. The political decision is to be found in the debate that surrounds the introduction of the Education Act 1973, which transferred the entire responsibility in these areas from the Secretary of State to the commission. That was a political decision taken to avoid interference by government in this area of education.

The noble Lord, Lord Phillips of Sudbury, also suggested that he might be witnessing a bit of a fudge. I am grateful to him for the way that he has valiantly fought on the question of public benefit through all stages of the Bill. I hope that people outside have noticed the notable part that he played during those proceedings. I hope that his views on the effectiveness of the commission in education stand the test of time. He believes that they will. I do not. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 5 [Special provisions about recreational charities, sports clubs etc.]:

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Spokesperson in the Lords (Id Cards & Charities Bill), Home Affairs 7:00, 8 November 2005

moved Amendment No. 2:

Page 4, line 24, at end insert "unless and until it registers as such, in which event it shall cease automatically to be a registered sports club"

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Spokesperson in the Lords (Id Cards & Charities Bill), Home Affairs

My Lords, I hope that I can move this amendment speedily. This is the same amendment as I advanced in Committee and on Report. For those noble Lords who want the reference, we last debated it on 12 October, as reported at cols. 321 and 322 of Hansard. The point of the amendment is to make it easy and smooth for a CASC—a community amateur sports club—to register as a charity without having first to dissolve and then reform as a new charity.

The argument that the Minister advanced against that on the previous occasion was twofold. He admitted that the amendment would smooth the transition from a CASC to a charity, as indeed it will. But the objections were, first, that there could be a tax charge on a charity becoming a community amateur sports club, and, secondly, that that would therefore create practical difficulties for a charity that follows that route.

My amendment covers only the route I indicated: a CASC wanting to become a charity. It does not affect a charity which would become a CASC. Indeed, for a charity to become a CASC would be an odd thing to happen in any event but to do it—and the Minister was right—it would have to wind itself up; the disposal of its assets would not be liable to tax; it would have to dispose of its net assets for charitable purposes, and that would not, or might not, allow it to transfer all its assets to the new CASC. If it did, the assets would have to be ring-fenced so that they could be used only for charitable purposes by the CASC.

This amendment will not affect many CASCs because most of them will not want to become charities. The main category of CASCs that might want to become charities are those who want to get major grants from those grant-making bodies that can only make grants to registered charities. That might induce a CASC to seek that new and slightly different status. I beg to move.

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip

My Lords, I can see from what the noble Lord, Lord Phillips, has said that I shall have to expand a little on my explanation of the difficulties to which his amendment might give rise for charitable amateur sports clubs wanting to convert to CASC status.

There is no doubt that the transition from CASC to Charity Commission would be smoother with this amendment, but in the way in which we are looking at it, we believe that it would create difficulties for a charitable amateur sports club that wished to become a CASC.

Under the amendment, a club registered with the Charity Commission cannot be a CASC or become one. The effect of the amendment is that every time a charitable club moves towards, and attempts to assume, CASC status it is pulled back into charity by the amendment tabled by the noble Lord, Lord Phillips, which provides that, as a charity, it ceases automatically to be a CASC. So in order for a charity to become a CASC it would need to cease to be a charity first, so that there was a gap in time between its ceasing to be a charity and its subsequent assumption of CASC status. That would enable it to enter CASC territory as a non-charity.

The problem is that, at the point at which it ceased to be a charity, a deemed disposal of assets for capital gains tax purposes would occur, with an associated tax charge that arises because, at that point, the club is not yet sheltered by the tax reliefs available to CASCs.

I appreciate that it is somewhat hard to follow. I find it hard to trace too, but it explains why, although there is an attraction to the amendment, it would be unworkable in practice. It is for that reason alone that we continue with our resistance.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Spokesperson in the Lords (Id Cards & Charities Bill), Home Affairs

My Lords, I am grateful for the Minister's response. I think this is a classic example of where we have not done very well because we should have had a discussion on this outside this Chamber. Everything the Minister said is wrong, and I must leave it at that—this is the end of the game for us. Maybe this is an issue that I can take up with officials with a view—if I am right in thinking that the reasoning is wrong—to having the provision inserted in the Bill at the Commons because it is inoffensive enough. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 7 [The Commission's objectives, general functions and duties]:

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip

moved Amendment No. 3:

Page 7, line 26, after "must" insert ", in appropriate cases,"

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip

My Lords, this should not detain the House for too long. It is an amendment standing in the name of my noble friend Lady Scotland. On Report, on 12 October, your Lordships' House agreed to an amendment which would give the Charity Commission the duty, in performing its functions, to have regard to the desirability of facilitating innovation by or on behalf of charities. The noble Lord, Lord Phillips, proposed to qualify that duty so that the commission could exercise it only in "appropriate cases". He had, I understand, the support of the National Council for Voluntary Organisations. The amendment to which I now speak gives effect to my undertaking to consider incorporating the noble Lord's proposition into the commission's new duty. I am grateful to the noble Lord and I beg to move.

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Spokespersons In the Lords, (Assisted By Shadow Law Officers), Spokespersons In the Lords, (Also Shadow Secretary of State for Scotland - Not In Shadow Cabinet)

My Lords, I understand what the Minister is driving at here and I do not want to strike a sour note at this hour. I am concerned about how one decides what are "appropriate cases". My original objective in pressing for the inclusion of the desirability of facilitating innovation was to ensure that the Charity Commission, with its new role and powers, did not put the voluntary sector into an unnecessary straitjacket. As I have said several times in the past, regulation is by its very nature risk averse—I have been a regulator in the City myself and I know how quickly one becomes risk averse. By contrast, the voluntary sector needs to be flexible and innovative to meet the needs of our rapidly changing society.

It is interesting that the Better Regulation Task Force has just produced a booklet called Better Regulation for Civil Society: Making life easier for those who help others. Page 20, which is about social innovation, says:

"Regulation is often based on standard service models and can therefore threaten social innovation by those VCOs that provide innovative services, for example to people with complex and multiple needs that other organisations frequently cannot meet. For example, social care is regulated because of market failure. This means that people receiving social care often have imperfect information on what care is available and its quality. They also have little purchasing power to exercise choice. It would clearly be unwelcome if some kind of 'one-size-fits-all' social care regulation were to prevent VCOs from developing and providing innovative care and greater choice."

That is the sort of thing that I was concerned about. With the original clause, I did not think that risk-averse box-ticking would prevail over the need to think creatively. With these slightly weasel words "appropriate cases"—who decides it?—I am not so sure. So although I understand what the Minister is driving at, I would like him to reassure me further about how this subsection will be exercised.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Spokesperson in the Lords (Id Cards & Charities Bill), Home Affairs

My Lords, by contrast, I am delighted with the amendment and grateful to the Government. I would like to reassure the noble Lord, Lord Hodgson, that actually this prevents what he fears—that is to say the one-size-fits-all approach. There are classes of charity that are not about innovation at all, for example, almshouses, which I mentioned last time—there are a lot of categories. I think this is useful and I hope that the Minister will reassure the noble Lord.

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip

My Lords, I hope that I can reassure the noble Lord. I am rather surprised that he has raised the issue in the way in which he has. What we have tried to do—unusually with this piece of legislation—is be more flexible, imaginative and focused. It should work where it is appropriate; that is what we are after. I take the noble Lord's point about regulation driving us towards risk aversion but this is a sensitive regulator that acts intelligently. I am sure that this clause will be applied sensibly and that the Charity Commission will have listened to what the noble Lord said—and to all of us who have been involved in the debates on this issue—and will take very careful note. We do not want it to go wrong.

On Question, amendment agreed to.

Photo of Lord Swinfen Lord Swinfen Conservative

moved Amendment No. 4:

Page 7, line 31, at end insert—

"7. In performing its regulatory functions the Commission must act fairly and reasonably, and with regard to the interests of charity beneficiaries and other people who are stakeholders in charities."

Photo of Lord Swinfen Lord Swinfen Conservative

My Lords, I start by thanking the Minister and the chairman of the Charity Commission for their letters, which have been most helpful. The purpose of the amendment is to require on the face of the Bill that the Charity Commission must act at all times, when regulating charities, in a manner which is fair and reasonable and to require the commission to have regard to the interests of the people involved in charities, with particular emphasis on the beneficiaries, as well as a charity's material assets, which, as far as I can see, is all that is covered under the 1993 Act.

The requirement for fair and reasonable behaviour by the commission has had much support within the House, and many of your Lordships have said that they want these words in the Bill. The reasons given so far by the Government for not accepting the amendment, or a similar one, appear both surprising and difficult to understand. The issue identified by the Minister on 12 Octoberthat is, that the commission,

"would not change its behaviour as a result of the addition of these words, and so the amendment would have no practical effect"—[Hansard, 12/10/05; col. 335.]

is not one that the amendment seeks to address. There are two issues of importance which it does seek to address. The first, critically, as the noble Lords, Lord Phillips of Sudbury and Lord Dahrendorf, and others have argued, is that it is the perceptions and concerns of charities—especially the smaller ones, whose activities have been seriously adversely affected by commission regulatory conduct in the past—that need to be addressed.

The second issue relates to the High Court judge's ruling in the Little Gidding Trust case, where the judge, on grounds of shortening the hearing, ruled that he would not take into account whether the commissioners had acted fairly and reasonably in the making of the orders which were the subject of trustee appeal on grounds that the commission had acted with bias, unfairness and unreasonableness in the making of them.

It is not sufficient for the Minister to attempt to deal with this case law precedent by saying that he understands that the judge so ruled in order to shorten the hearing. Had the Charities Act 1993 placed upon the commission a specific duty to act fairly and reasonably, the judge would have been obliged to take into account the grounds of the appeal and how the commission had acted. I took part in debates on the Bill that produced that Act. Such a measure was not considered necessary at that time but, in my view, it is obviously necessary now when taking into account the Charity Commission's behaviour, as I have described to your Lordships.

When, on 12 October, we last debated the issue of the commission's duty towards a charity's people, the Minister said several things—at col. 342 of the Official Report. He said that this amendment was unnecessary because it was not possible for the commission to comply with the new objective, which requires the commission to promote the effective use of charitable resources without taking into account the needs of beneficiaries. He suggested that the commission's new duty to increase public trust and confidence in charities would require it to take account of a charity's stakeholders. Such conclusions seem to me to be extremely tenuous and difficult to support from the wording in the Bill.

The Minister further suggested that the commission's new customer network consultative group will influence the commission to take account of charity people. The requirement on the commission to be accountable and transparent, even if it takes customer service seriously with its new feedback group, has nothing to do with the need to stop the commission occasionally acting in a cavalier and damaging way towards a charity's people. A hand-picked feedback group addressing a commission agenda can, and will, be ignored.

Finally, the Minister referred to the commission's duty to be accountable. A government agency may be transparent and accountable in a general way to a Minister or Parliament but still sometimes do outrageous things in individual cases to the organisations and people that it regulates without being accountable to them for its actions.

The Minister's claims are too general. He refers to the general behaviour of the commission in its broad role. Some of the commission's past behaviour can give no confidence that that is sufficient. There is a real need to focus the minds of the commission's staff on an unequivocal statement that they are required to take account of the people and be fair and reasonable when they are pulling a charity apart.

Is the Minister perhaps afraid that some downtrodden trustee or beneficiary might successfully sue the commission? Offering the ethereal accountability of the commission to the state is totally inadequate. What is needed is accountability to the individual through the courts, and this amendment will help to provide it.

The charity sector remains founded on morality, and charities expect standards of regulation likewise founded on a moral bedrock of decency. The commission's behaviour has not always met this high standard, and it is necessary that it should meet it and be seen to meet it. I beg to move.

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip 7:15, 8 November 2005

My Lords, the noble Lord has addressed this issue at length on previous occasions with different amendments, but this amendment seeks to bring together two separate amendments that he tabled previously. The first part concerns a duty for the commission in performing its regulatory functions to act "fairly and reasonably", and the second concerns a requirement for the commission to have regard to the interests of beneficiaries and other stakeholders.

We have discussed the "fair and reasonable" part of the amendment on five separate occasions and I feel slightly shamefaced in offering the same argument. Nevertheless, it remains the case that we consider that part of it to be unnecessary because the Charity Commission has always recognised that it has a duty to act in a fair and reasonable way.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Spokesperson in the Lords (Id Cards & Charities Bill), Home Affairs

My Lords, I am sorry to interrupt the noble Lord but he will be interested to know that when I visited the Charity Commission this morning, it had in its reception area free postcards. On them, in very large print, was the word "Fair", so perhaps the noble Lord's amendment is not so unnecessary after all.

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip

My Lords, presumably, it does not have the word "reasonably" on another postcard. That is very good.

For the benefit of those who have not heard the Government's position before, I will place it on the record. We completely agree with the noble Lord, Lord Swinfen, that the commission should act in a fair and reasonable way. We listened to the views expressed in the House on previous occasions and were moved to include a duty on the commission to have regard to the principles of best regulatory practice when performing its functions, so far as relevant. Those principles are set out in the Bill for the avoidance of doubt. They are that regulatory activity should be proportionate, accountable, consistent and transparent and should be targeted only at cases in which action is needed. In our view, those words express more than adequately the concept of fairness.

I repeat the assurance that I gave on previous occasions that we are under no doubt that the commission is under a duty in administrative law to use its powers reasonably. If Parliament thought it necessary to give the Charity Commission this duty, as I have said in the past, the implication taken would be that the commission did not have the duty at present, but I do not think that that can be argued to be the case. The commission is fully aware that it already has this duty—it has a postcard. On Report, the noble Lord, Lord Swinfen, himself said:

"Many noble Lords, like me, believe these words need to be placed on the face of the Bill because the commission has not always behaved in that way".—[Hansard, 12/10/05; col. 331.]

As the commission is already sure that it has such a duty, and as the principles of best regulatory practice are now in the Bill, we do not think that the amendment would have any practical effect on the commission's behaviour. If the noble Lord believes that the commission has acted unfairly and unreasonably in any case, then I argue that this is not the way to rectify that. The Charity Commission's own internal complaints procedure, the Independent Complaints Reviewer and the Parliamentary Ombudsman are already the routes through which charities may challenge the commission on grounds of maladministration. While touching on that, it is perhaps worth reminding the House of the recent annual report produced by the Independent Complaints Reviewer, who received and considered only 32 complaints in 2004, covering 110 individual allegations of maladministration, 86 per cent of which were not upheld.

I turn again to the noble Lord's suggestion that the commission must have regard to charities' beneficiaries and other stakeholders, which we have also debated previously. The commission already has a general object, contained in Section 1(4) of the Charities Act 1993, to:

"act in the case of any charity . . . as best to promote and make effective the work of the charity in meeting the needs designated by its trusts".

This means the needs of the beneficiaries. A quick glance at the commission's new objectives in the Bill should also show that the interests of beneficiaries sit at the heart of the commission's work. The fifth objective requires the commission to enhance the accountability of charities to beneficiaries. The fourth objective requires the commission to promote the effective use of charitable resources, which will result in charities being able to help their beneficiaries in the most effective way.

I mentioned earlier that the second part of the noble Lord's amendment is harmful and unacceptable. It suggests that the commission should have equal regard to a range of unspecified stakeholders in charities as to the interests of beneficiaries. That cannot be right. Charities, after all, exist to serve their beneficiaries, and the commission as regulator is ultimately there to protect the interests of current and future beneficiaries of charities. If there was a situation, for example, in which a charity's beneficiaries and the charity's staff had conflicting interests, then it would be right for the commission to have the interests of the beneficiaries at the heart of its considerations and whatever it undertook to do. This amendment would seem to require the commission to give equal weight to promoting interests of other people with a stake in the charity. This would represent a fundamental change in the role of the commission, one which is not at all desirable.

I can understand why the noble Lord tabled the amendment. We strongly believe that, while the first part is unnecessary, the second is unacceptable. For these reasons, despite his admirable persistence, I cannot find favour with the noble Lord's amendment.

Photo of Lord Swinfen Lord Swinfen Conservative

My Lords, the Minister says that the first part of the amendment is unnecessary. It may be. It should be. He makes me think, however, of the situation in a mine where the managers put safety precautions in place, but the people at the coalface do not follow them because they are intent on producing as much coal as they can, in order to increase their bonuses. I may be being unfair to the mining industry, but I am using it as an example.

I am sure that the people at the top of the Charity Commission wish to be seen to be acting in a fair and reasonable manner. As I have pointed out on numerous occasions—the Minister says five; I have lost count, myself—there have been numerous instances in which they have not acted in a fair and reasonable manner. However, the main effect of this amendment would be that they would be fair and reasonable to charity beneficiaries. I appreciate that adding:

"and other people who are stakeholders in charities", is over the top. Quite obviously, it is possible that employees or trustees could be acting in a dishonest or illegal way. Therefore, I will not press the amendment this evening. I am certain that it will be taken up in another place, however, and hope that the Government will look at it more reasonably at that time. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 5 not moved.]

Photo of Lord Swinfen Lord Swinfen Conservative

moved Amendment No. 6:

After Clause 8, insert the following new clause—

"CHAPTER 2A

THE CHARITY INDEPENDENT COMPLAINTS REVIEWER

:TITLE3:The Charity Independent Complaints Reviewer

After section 2 of the 1993 Act insert—

"THE CHARITY INDEPENDENT COMPLAINTS REVIEWER

2A THE CHARITY INDEPENDENT COMPLAINTS REVIEWER

(1) There shall be a complaints reviewer to be known as the Charity Independent Complaints Reviewer (in this Act referred to as "the Reviewer").

(2) The function of the Reviewer will be to investigate complaints against the Charity Commission's performance of its regulatory role and where appropriate make financial awards of compensation against the Charity Commisison, whether limited consolatory payments or unlimited payments for financial loss, and make recommendations.

(3) Except where the Reviewer finds the complainant has acted frivolously, vexatiously or unreasonably, the complainant shall not be required to pay any part of the costs of the investigation.

(4) No complainant shall be required to use an internal complaints procedure of the Charity Commission, the Ombudsman or the courts before the Reviewer will consider the case and any consideration by the Reviewer will not prevent the case subsequently being considered by the Ombudsman or the courts.

(5) The Reviewer shall be appointed by the Lord Chancellor on such other terms as he, after consultation, shall think fit.""

Photo of Lord Swinfen Lord Swinfen Conservative

My Lords, the purpose of this amendment is to set the existing Independent Complaints Reviewer on a statutory footing, who is at present appointed by the Charity Commission to look at complaints against itself, with the following significant alterations to the current arrangements: first, to allow the reviewer the power to award financial compensation, instead of merely being able to recommend it; secondly, to allow the reviewer to award compensation to a complainant for financial loss arising from a failure by the Charity Commission, as well as the existing consolatory payments for maladministration; thirdly, to minimise delay in assessing the reviewer by not requiring that the complainant use the Charity Commission's internal complaints procedure first. Together, these changes will bring about a genuinely independent statutory alternative dispute resolution procedure, which will provide an alternative to the High Court as a route to access justice by charities, trustees and others.

The reason for this amendment is to create a truly independent mechanism for charities, trustees and others to be able to challenge the Charity Commission when they think it is guilty of maladministration or acting unfairly, unreasonably or disproportionately, and to obtain financial compensation for maladministration and financial loss. At present, the Independent Complaints Reviewer is a creature of the commission, which may be ignored if the commission so chooses. By requiring the ICR not to take cases until they have been through the commission's own complaints procedure, the commission has been able to use the complaints and the ICR process as a mechanism of delay—in one case, I am told, in excess of five years.

The ICR is forbidden even to recommend to the commission the payment of compensation where a charity has suffered real loss as a result of the commission's unfair, unreasonable or disproportionate behaviour. The ombudsman routinely refuses to take up cases where there is still the legal possibility of pursuing the commission through the courts. As we all know, this is a ruinously expensive process for charities and trustees, who have no recourse to legal aid.

I understand from a letter that the Charity Commission sent to me when I asked how often it had paid compensation that, once, the expenses of Lincoln County Council for Voluntary Services—about £3,500 plus VAT—were paid by the Charity Commission. Another case was pointed out to me where a receiver and manager was appointed on a contingency basis. As the charity had no cash assets at the time, an indemnity was offered. The costs, however, were eventually met by the charity. So, in fact, there is only one occasion when the Charity Commission has paid out of its own pockets.

In answering this proposal, the Minister drew comparisons between the advantages of the ombudsman and the proposed ICR, concluding that, on the whole, the ombudsman route is advantageous. I do not doubt that it is, but it is rarely available to charities in practice. In replying to the amendment on 12 October, as reported at col. 382 of Hansard, the Minister drew attention to the fact that the Parliamentary Ombudsman can deal with commission maladministration and can recommend financial compensation for real losses. Since the introduction of the Charities Act 1993, the Parliamentary Ombudsman has investigated only eight complaints about the commission's conduct, upholding three of them and recommending financial compensation in two cases. For most complainants, his door has been firmly closed.

The Minister may be right when he suggests, at col. 381, that the Parliamentary Ombudsman could do financially better for a charity or trustee than a statutory ICR. There are other reasons, however, for having a statutory ICR beyond financial compensation. It would have, and be seen to have, independence from the commission, would be likely to provide a quicker turnaround of complainants and would have greater experience of charities and the commission. At the moment, it looks to me as though we have a prosecutor, jury and judge all rolled into one. I beg to move.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Spokesperson in the Lords (Id Cards & Charities Bill), Home Affairs

My Lords, the noble Lord, Lord Swinfen, deserves considerable praise for his tenacity over his attempts to get a more practical and effectual remedy for those who feel hard done by by the Charity Commission. In the course of the debates, we have talked at length about the different layers of remedy and the fact that the Parliamentary Ombudsman is a more available source of recompense and assistance than perhaps had been thought. Although this House has done well on many aspects of the Bill, this one has not received the focus that it deserves. In responding, will the Minister assure the House that the Charity commission will at least put out a new, simple, revised leaflet for those who want to make complaints, which tells them exactly where they may go and what they may do? That would help, because there is plainly a lot of misunderstanding about the extent and availability of the existing remedies.

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip

My Lords, I have listened carefully to the noble Lord, Lord Swinfen, in the many debates on this matter and read again the debate on Report. I appreciate not only his tenacity but that the noble Lord feels very strongly about this matter. We do not want to deny people a way of challenging the commission when they feel that it has not acted properly, misled them, or given them advice that led them to make decisions that they would not otherwise have made. There must always be a proper way of challenging the commission. The noble Lord, Lord Phillips, has been one of the drivers behind the creation of a tribunal to ensure that there is a more accessible form of redress. I take the point made by the noble Lord, Lord Phillips, about the need to ensure that there is proper and adequate information about the means of redress. I shall certainly speak again with the commission officials to that point because the information needs to be not only in leaflet form, but on the website and the various other means in which it can be communicated.

The noble Lord, Lord Swinfen, was concerned about three main issues regarding the existing arrangements. The first was the delay in accessing the ICR or the ombudsman because of, in the case of the ICR, the need to go through the commission's internal complaints procedure, and in the case of the ombudsman, the need to go through an MP. In relation to that, he also said that the ombudsman routinely refuses to investigate cases where there is the possibility of High Court redress—a point that he repeated in his latest remarks.

The second main issue that the noble Lord raised was the need for a power to award compensation as well as consolatory payments, and the third issue was the independence of the reviewer from the Charity Commission. We do not accept that the current system involves an unacceptable delay to complainants. Under the current arrangements, complainants are asked to raise their complaint with the commission in the first instance before taking their complaint to the existing ICR if still dissatisfied. It is good practice that departments have the chance to respond to complainants themselves in the first instance. The Charity Commission's customer service team dealt with 103 complaints in the year 2004–05. In the same period, the ICR received 32 complaints. Clearly, many of those who were dissatisfied with the commission's standards of service were satisfied by the commission's response to their complaint when they first raised their complaint with the commission. It is right that the ICR is there for those complainants who are not satisfied with the initial response from the commission. We are not aware of any evidence that this system is unacceptable to complainants or that there is real feeling that the commission's internal complaints procedure is a barrier to access to the ICR.

At Report stage on 12 October the noble Lord also expressed concern that in order to access the ombudsman a complainant has to go through his or her Member of Parliament. Again, we are not aware of any evidence that this is a problem in practice, as confirmed by the noble Lord, Lord Phillips, during our Report stage debate. While it is absolutely fair that those with a real cause for concern have easy access to the ombudsman, it is important that only genuine cases reach the ombudsman. The noble Lord also mentioned the need in some circumstances for charities to obtain a certificate from the commission before going to court, the cost to charities of going to court and the difficulties charities have of representing themselves against the Attorney-General. He doubted that such arrangements make for easy access to justice.

We must distinguish between the differing roles and remit of the court and of the ombudsman. The court looks at legal decisions of the commission. We have some sympathy with the concerns of the noble Lord about the difficulties of challenging the commission in the High Court. That is why we are setting up the Charity Appeal Tribunal, in order to make challenging the commission's legal decisions easier. However, this is a separate issue from complaints about the commission on the grounds of poor service or maladministration. The ombudsman looks at maladministration, not legal decisions. The ombudsman would be able to look at any maladministration of the commission even in a case which had been decided by a court or a tribunal on a point of law. As the noble Lord, Lord Phillips, said last time, there is no need for High Court remedies to have been exhausted in order for the ombudsman to get involved. However, if legal action had been commenced, the ombudsman would not intervene while it was in train.

The second issue raised by the noble Lord, Lord Swinfen, when moving his amendment on Report was the need for a power to award compensation as well as consolatory payments. I said in our debate on that occasion that the ombudsman can recommend any level of redress if the complainant has evidence to show that he or she has experienced quantifiable financial loss directly as a result of the commission's maladministration and I gave an example to demonstrate that this does happen in practice. As it turned out, on the day of our debate, the ombudsman recommended financial redress of £100,000 in a particular case.

We do not see any need to duplicate this existing power by setting up a second body for that purpose and I note that the proposed statutory ICR in this amendment would have the power actually to make financial awards. I am not sure how that would work unless the ICR had a budget comprised of public funds. We think that the current arrangements—whereby the ombudsman recommends payments and the departments pay out of their own funds—works and does not need change. If the commission chose to ignore a recommendation of the ombudsman to provide compensation, the ombudsman would refer the commission to the Select Committee on Public Administration, so there is a strong incentive for departments to make the payments recommended by the ombudsman.

The final point which concerned the noble Lord was the need for a reviewer who is independent of the commission. The ICR is indeed appointed by the commission. However, in common with other similar offices, her terms of reference underline her independence and authority. In addition, there is no evidence that in practice the ICR can be shown to act in a way which is not independent, for example, by showing bias to the commission or by toning down recommendations. In the year 2004–05, the ICR received only one complaint about her service from a Charity Commission complainant. That complaint was related to dissatisfaction with the review findings, rather than the way in which she had dealt with the matter. The ombudsman is appointed by the Queen and reports directly to Parliament and provides an independent final recourse for complainants who have not been satisfied by the investigations of the commission or the ICR into their complaints.

I also mentioned last time that in the recent annual report the ICR herself doubts whether a "potentially overlapping" office as proposed in the amendment would add anything for the citizen "other than confusion". I do not believe that there are the gaps in the present arrangements as the noble Lord has suggested in his amendment. The current ICR provides a different but valuable and valued addition to the ombudsman service.

I am sorry that I was not able to convince the noble Lord last time that the current arrangements are satisfactory. I apologise to the House for going over at length why we feel that the situation is best served by the current arrangement. I hope that my explanation this time, although perhaps not to the noble Lord's liking, has helped him through some of the arguments that we see as obstacles to choosing the course recommended to us by the noble Lord.

I accept that the amendment is moved in good spirit and is well-intentioned, but it would add confusion and would not provide much, if any, benefit to potential complainants.

Photo of Lord Swinfen Lord Swinfen Conservative

My Lords, the suggestion by the noble Lord, Lord Phillips of Sudbury, of a new, clearer leaflet by the Charity Commission is probably a good idea. I am glad that the Minister welcomed that. I admit that I had some difficulty hearing a great deal of what the Minister said—and, indeed, of seeing what he said, because he had his head down reading his brief, which is perfectly understandable. That is not his fault. He needs to read his brief. I know that I am a deaf nit, but I have to put up with that. Unfortunately, at this stage, I do not have the opportunity to read what the Minister said before the next stage of the Bill.

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip

My Lords, I apologise to the noble Lord if he had some difficulty in following me. I have a slight cold and it is affecting my delivery. I apologise to the House.

Photo of Lord Swinfen Lord Swinfen Conservative

My Lords, there is no need for the Minister to apologise. The worst people are those with thick moustaches and heavy beards—you cannot see their lips and so what they are saying. I am glad to say that the noble Lord, Lord Ahmed, has his moustache and beard neatly trimmed, so that, if he were to take part in the debate, I could see what he is saying, but not everyone is so considerate.

I still think the provision rather odd and very dubious in many respects because, as would occur under the scheme as it stands, if I needed to be investigated and were to employ the investigator on my terms to investigate me and my behaviour, no one else would take the report with anything other than a pinch of salt. I still feel that, with all due respect to the current holder of the office—who I am certain is perfectly honourable—in future, someone may be incapable of doing the job properly. That is why I want there to be someone who is seen to be totally independent. Having said that, I shall withdraw the amendment. I am sure that someone else will take it up in another place. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Baroness Crawley Baroness Crawley Government Whip, Baroness in Waiting (HM Household) (Whip)

My Lords, I beg to move that the proceedings after Third Reading be adjourned. In moving this Motion, I suggest that further proceedings after Third Reading begin again not before 8.12 pm.

Moved, accordingly, and on Question, Motion agreed to.