Charities (Protection and Social Investment) Bill [HL] — Second Reading (Continued)

Part of the debate – in the House of Lords at 6:18 pm on 10th June 2015.

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Photo of Viscount Eccles Viscount Eccles Conservative 6:18 pm, 10th June 2015

My Lords, following the noble Baroness, Lady Kramer, there is undoubtedly a problem—and an understandable one—in relation to pressure. I have always said that if you are a fundraiser, you need a wicked smile and not to leave until you have the money. It is not easy to raise funds. That leads me to the reflection that, if life is complicated and quite often ends in a muddle, we cannot expect the charitable endeavour in this country ever to be anything else but pretty complicated and quite often in a muddle.

I have one other reflection before I start, as it were. My noble friend Lord Borwick suggested that he who pays the piper calls the tune. We should always remember that if you accept money, you have to pay some attention to the donor.

For quite a long time, I have been a trustee, fundraiser, adviser and donor—I think that I am probably all of those things still. The ones that need to be on the register are, I hope, correctly on the register. To illustrate the length of time that I am talking about, I am a life member of a charity, for which I paid £20.

This Bill is a welcome measure and one that has been very well prepared. In being prepared, it has been discussed in detail and very well argued. It has the full support of the Charity Commission, and I must say that I have been very impressed in recent times by the way in which the Charity Commission puts its points across to those of us who are engaged. No doubt the detail will come out in Committee and later, and other noble Lords have talked about that with much more understanding than I would have done.

Let me go to the wider scene. We all agree about the merits of charitable endeavour: its very long history and the need for it, which grows as life gets more complicated. I think that we all agree that there needs to be a balance in our country between the way that the economy is run and what it is expected to do, how taxation should play its part, the democratic aspirations of the people who pay the taxes and how we control public expenditure. That balance has never been more in question than it is now.

Although I quite understand the point made by the noble Viscount, Lord Chandos, that the Government may expect, in some way, the gaps to be filled by others as they try to reduce public expenditure, my view is that the gaps are inevitable. The noble Lord gave us a very good explanation of why the gaps are there and need to be dealt with. He cited innovation, and that must be right. Lots of things go on in our society which do not fit the postcode lottery school of thought that everything should be the same for everybody. Lots of things go on where ticking boxes about the highest common factor, or even the lowest common denominator, simply does not work and where independent solutions are needed. If charities are full of innovation, some of the solutions will work and some of them will not work so well. However, the flexibility, imagination and judgment that charities can exercise are a very important component of the total picture in our society.

Indeed, on occasion, charities will come up with ideas that we will think are slightly zany. However, if people are exercising flexibility, imagination and judgment, the chances are that there will be problems, that things will go wrong and that some people will deliberately make things go wrong. Therefore, we clearly need a monitor and regulator. We have one with what is, in my view, a growing and excellent database of information, which has made very welcome progress in recent years—on that I entirely agree with the noble and learned Lord, Lord Hope of Craighead. The greater powers for it to exercise its role are welcome as well.

In thinking about the impressive performance of the Charity Commission, we have had reference to the 160,000 regulated charities, the staff of 300 people and the budget of £20 million a year. If noble Lords were to look across the regulator scene and try to find another regulator that is making as good a shot at doing what it is required to do as the Charity Commission is, they might look a long way before finding one.

Much progress is being made, but the really interesting question is, where next? To my mind, the Charity Commission has a clear sense of direction.

The Bill provides for a review, and I want to spend my last couple of minutes on that. The review should be on,

“how the Act affects … public confidence in charities … the level of charitable donations, and … people’s willingness to volunteer”.

There are two negatives to that. First, the motivation for volunteering and the results of volunteering are, in my experience, very complicated subjects. That is for another day, but, in the mean time, I would like to remember, as I always do, that volunteers have a divine right to be unreasonable.

The second negative that I want to get out of the way is about public confidence. It has already been said that there is a danger that Her Majesty’s Government and the Cabinet Office—Parliament, even—can do things that do not improve the public’s confidence in charities. I am sure that that is true. Here we get into the extremely complicated subject of independence, which is best summed up by saying that when somebody tells you that they have independence and are treated at arm’s length, you need to suggest to them that probably their arm is regularly being twisted.

There is an issue around what was billed very prominently—not in the previous Administration but in the one before that—as the third sector. There has been reference today to the degree to which some registered charities are in fact being funded by the taxpayer. There is something there that we have to think about very carefully, because every time you take money, you must remember that he who pays the piper calls the tune.

Another issue is the connection between public confidence in charities and the level of charitable donations. I am not clear as to whether “level of charitable donations” means donations to charities, donations from charities or both. When considering charitable endeavour, one has to be very conscious of the fact that it is both that we are thinking about. For example, Henry Smith was lucky enough to own land that subsequently became part of London. His charity, and others such as the Wellcome Trust, does not spend any time raising money but runs what is, in effect, a massive endowment fund that distributes the income from that fund, and sometimes part of the capital, to other charities. We know a great deal about those very big, top-tier charities. Indeed, the whole charitable endeavour in our country would be completely different if they did not exist. It would be very interesting to have a better grip on exactly how important they are.

Small donors have also been referred to. Charities such as those for birds or lifeboats are massively successful. All through its history the lifeboat charity has been, to a degree, a substitute for money coming from the taxpayer—it is extremely well known and has extremely successful services. However, to introduce a slightly discordant note, sometimes the business of animals gets rather complicated in our minds. We wonder whether we understand what we might call the mass appeal charities as well as we thought.

To me, there is a gap in the middle. There is a great need to understand in much more depth and detail the middle rank of charities. Where do they come from, why are they created, what do they do, how do they do it and can we think more positively about how that part of the system can work better than it does now? Indeed, we would probably find that nearly all the investigations undertaken by the Charity Commission to date—it is a formidable number and there has been a formidable rate of increase over the last three years—have been in that middle sector.

I believe that there is the same need about donors. We understand about big donors. They get their names on boards. I was in the British Library this morning and I read the board with some interest. We understand about how small donors behave; there are millions of them and they behave with great consistency. We have heard today about the difficulties that can be faced in that sector. But I do not believe that we understand at all well what the people in the middle do or do not do about forming charities or giving money to charities—their total charitable endeavour. There is huge potential there which we are not at the moment making a good job of tapping. I look forward to the further stages of the Bill.