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My Lords, what an extraordinary debate—absolutely fascinating. I wish to declare an interest: I have a daughter who is a director of Hanover Communications, though I have to say we speak mainly about babies rather than lobbying.
I thank the noble Baroness, Lady Hayter of Kentish Town, for tabling this fascinating debate, and take a moment to pay a tribute to Lord Rix, who was also mentioned by the noble Baroness, Lady Jowell. He is going to be hugely missed for the extraordinary work he did with Mencap—and in the theatre. My first theatre experiences were going to the Brian Rix farces, which brought so much joy to us all. I also say that we wish the noble Lord, Lord Judd, a very speedy recovery.
The richness of the debate highlights the breadth of civil society expertise in this House and demonstrates the importance we all place on preserving and championing the vital roles of charities, trade unions and civil society within our democracy. I therefore welcome the efforts of the Lords Select Committee on Charities, chaired by the noble Baroness, Lady Pitkeathley. I know that many other of today’s speakers will continue to make a valuable contribution to the future work of this committee.
The noble Viscount, Lord Chandos, mentioned the role of the Office for Civil Society versus the Cabinet Office. I think this is the moment to say that this debate is focused on issues that cross departmental boundaries. The Cabinet Office remains responsible for grant-funding policy and the Transparency of Lobbying Act. It is the Office for Civil Society that has moved to the DCMS, where there are clear synergies, but obviously we all work in a joined-up way.
This Government are committed to supporting a healthy, diverse and sustainable civil society. Civil society is uniquely placed to respond to many of the social challenges we face and occupies a special place in our national psyche. Certainly, from the right reverend Prelate’s speech, it is clear how much the Church does in this area. The noble Lord, Lord Haskel, and the noble Baroness, Lady Pitkeathley, said that the Government need to pay heed to the voices of charities. Other noble Lords also mentioned this. The Government remain absolutely committed to engaging with and listening to charities. By way of one example, earlier this week, the charity sector leaders were invited to a round table with three Ministers to discuss the implications and opportunities for charities of exiting the European Union. I think that many charities feel anxious about how this is going to affect them, and it is very important that we engage with them from the beginning.
Charities fulfil many different important roles, from delivering public services, to supporting those in need, to raising awareness of particular issues. All these roles are important, and we are very keen to make sure that we are fully engaged. It is for this reason that we have recently reformed charity law with the Charities (Protection and Social Investment) Act 2016 and have supported sector-led changes to fundraising regulation. A sound legal framework provides the essential space in which charities operate. These changes are strengthening charities’ protection from abuse and helping to rebuild public trust and confidence in charity fundraising. I know that several noble Lords speaking today made important contributions to the development of these changes and I put on record my thanks for their involvement and commitment to supporting that vital work.
My noble friend Lord Patten mentioned problems with the National Trust. It is important to remember that members of the public, and indeed noble Lords, should raise these issues directly with charities where they feel that there are problems. Noble Lords have heard what my noble friend has said today about the National Trust; it is important that they engage with him on these subjects.
The noble Lord, Lord Griffiths, mentioned that charities need freedom to innovate and to provide evidence of what is happening on the front line. Certainly, charities are independent and the law recognises that. They are free to innovate and campaign to further their charitable purposes. There are many good examples of charities innovating with great success and where charities’ evidence has been heeded in government policy.
We work in close partnership with civil society to make sure that we deliver our vision for a bigger, stronger society. We are working together and there have been a number of significant achievements. I will highlight just a few of these successes. Last year, 3 million more adults volunteered than in 2010—a tremendous increase in the number of people giving up their time to support good causes. More than 200,000 young people have taken part in the excellent National Citizen Service. They are volunteers; they are not forced to take up these roles. Volunteering among 16 to 25 year-olds is up by more than 50% since 2010. Our social economy is thriving: 200,000 social enterprises now employ more than 2 million people and the UK is recognised as a world leader in social investment and social impact bonds. Social action contributes £34 billion each year to public services, reducing the pressure on public services such as the NHS and schools. We have recruited more than 6,500 community organisers, who act as local leaders bringing people together to take action on the things they care about.
Despite what some may think, the number of registered charities has risen since 2010; their income is up by almost 35% to more than £71 billion and their workforce has continued to grow. The noble Lord, Lord McKenzie, talked about NOAH; this shows just what a local charity can do. The noble Lord, Lord Foulkes, mentioned the importance of giving and philanthropy. The CAF World Giving Index 2015 ranked the UK as the second most generous nation in the world, up from eighth in 2010. This is indeed quite an achievement.
We will continue to support civil society with our ambitious agenda for the remainder of this Parliament. At the heart of this is our expansion of the National Citizen Service, guaranteeing a place for all young people and progressing with the NCS Bill. We are committed to scaling up social impact bonds in areas such as youth unemployment, mental health and homelessness and have launched the new £80-million life chances fund. This fund will catalyse many more social impact bonds, tackling complex social issues locally, including drug and alcohol dependency. We have proven the concept of social investment—the task now is to scale up the model, so we can help even more of our fellow citizens. To this end, we have built a five-year partnership with the Blavatnik School of Government at Oxford University to create a government outcomes lab. This will become a centre of expertise for SIBs and innovative government commissioning, by increasing the information, data, evidence and technical support available to commissioners to develop more SIBs locally. We are working ever more closely with businesses to support and enhance their socially responsible activity, with the particular priority of promoting employee volunteering in large companies.
My noble friend Lord Balfe mentioned charity accountability. Charities are publicly accountable through their annual accounts and trustees’ annual reports. These are publicly available on the Charity Commission’s website.
I turn to third-party campaigning, which was mentioned by several noble Lords, including the noble and right reverend Lord, Lord Harries, my noble friend Lord Balfe and the noble Baroness, Lady Scott. We need to strike a balance between the freedom to campaign and increased transparency of third-party campaigning during election periods. I think that we can all agree on the need for effective controls that limit the opportunity for groups to exert an undue or improper influence on government and help to make the political system more accountable. Lobbying plays an important role in ensuring that everyone’s voice is heard in Westminster, but lobbying must be transparent.
The Transparency of Lobbying, Non-party Campaigning and Trade Union Administration Act 2014 is about giving the public more confidence in the way that third parties interact with the political system. Importantly, and quite rightly, the rules prevent any individual or organisation exerting undue influence on an election outcome. The Act was never intended to restrict the freedom to campaign by charities and other campaigners but instead to make the political system more accountable. Remaining above the party-political fray in all forms of communication is vital to maintaining public trust in charities and the important work that they do. Under charity law, charities have the right to undertake campaigning and political activity where it supports their charitable aim, where trustees consider it to be an effective use of charitable resources, and provided they do not engage in party politics.
I move on to the excellent and thought-provoking review done by my noble friend Lord Hodgson. The review clearly set out the need for regulation of third-party campaigning and recommended that some of the existing regulations be tightened—as my noble friend noted in his report, these recommendations interlock and are to be seen as a package. The report recommends some strengthening of the regulatory regime, such as clarifying the exclusion for supporters of the organisation and requiring campaigners to submit more detailed information to the Electoral Commission regarding their planned activities. My noble friend Lord Hodgson’s report is one of a number of reports that have been received following last year’s general election, including the Law Commission’s interim report and reports from the Electoral Commission with recommendations for change. It is obviously important that the Government consider all these reports carefully. I am sure that my honourable friend the Minister for the Constitution will pay close attention to the points raised in this debate as he considers the recommendations of my noble friend Lord Hodgson’s third-party campaigning review.
My noble friend wanted to know when the Government would respond to his report. I cannot make any promises but there are new Ministers in the post who will need to carefully consider everything. I am sure that they would be very happy to meet my noble friend to discuss his report; I will ask the Minister for the Constitution to provide an update to him.
I turn to the regulation of lobbying activity, which I know excites a lot of noble Lords in this House. We will of course discuss this in greater detail tomorrow. It is obviously the regulation for the activity of businesses and private interests. The statutory registry of consultant lobbyists is designed to shine the light of transparency on those who seek to influence the Government. It complements the existing transparency regime whereby Ministers and Permanent Secretaries publish details of their meetings with external organisations. Before the lobbying register was established, it was not clear from diaries alone whose interests consultants were representing. The register requires people who are paid to lobby the Government on behalf of others publicly to disclose their clients. The register also has enhanced scrutiny on consultant lobbyists, who must declare whether they subscribe to a code of conduct. Our aim was to avoid unnecessary regulatory burdens, not to establish top-to-bottom regulation of all who lobby. That is why we set up an appropriate and pinpointed way to ensure high levels of transparency in the specific areas of the lobbying industry where they were needed.
We believe that a statutory register of consultant lobbyists is a proportionate and appropriate approach to the identified issue—that it is not always clear whose interests are being represented by consultant lobbyists. Calls for extending its scope would duplicate a transparency system already in place. The lobbying industry has welcomed the continuation of self-regulatory codes of conduct and, to date, 130 lobbying companies have registered with the registrar. We will be talking about this further tomorrow, so I am not going to go into huge detail now.
The noble Lord, Lord Haskel, and the noble and right reverend Lord, Lord Harries, brought up the proposed anti-lobbying clause in government grants. The Government are committed to ensuring that taxpayers’ funds are spent on improving people’s lives and good causes, rather than on improper lobbying for new regulation or for more government funding. As the noble Baroness, Lady Hayter, mentioned, the anti-lobbying clause in grant agreements was never targeted at charities. The voluntary sector, which includes charities, makes up less than 7% of all government grant recipients. The collaborative process we built into the development of the anti-lobbying clause has enabled us to understand further its impact on the many and varied recipients of government grants. That led to a decision to pause the implementation pending further consideration of the wording of the clause and its effects. We are continuing to work with departments, academics, research organisations and the voluntary sector to ensure the effective implementation of this policy. This is taking time and changes will be announced and communicated in due course.
The noble Baroness, Lady Hayter, mentioned the chilling effect. It was never the intention of the grants clause to stop charities providing independent, evidenced-based advice to government policy through either giving evidence to Select Committees, or meeting with Ministers or officials to discuss the progress of taxpayer-funded grant schemes. The aim is to ensure that grant funding is used as intended.
The noble Baroness also mentioned that the grants clause stops charities from lobbying and from speaking out on behalf of beneficiaries. Restrictions in grant terms and conditions are not new. Existing terms and conditions limit the use of grants to activities set out in the grant agreement. Such restrictions do not stop charities from using other funding to support lobbying or political activity.
The noble Baroness, Lady Scott, also referred to the chilling effect. She said that charities were unsure about what compliance means in grants’ terms and conditions. It is robust, and mutually agreed that the grant agreements make clear to charities what delivery entails.
The noble Lord, Lord Lingfield, mentioned ineffective grant funding management. The Government are focused on improving its effectiveness and efficiency. This will ensure that we work more effectively with charities to deliver value to the taxpayer.
My noble friend Lord Balfe and the noble Baroness, Lady Hayter, mentioned trade unions. The Government recognise the role that trade unions have played and can play in developing the economy, maintaining positive industrial relations and supporting employers in upskilling their staff and in participating. However, we are determined that we must balance their rights with those of working people and businesses. They have their own right to expect that the services on which they rely are not going to be disrupted at short notice by strikes with the support of only a small proportion of union members.
Before I finish, I want to highlight the positive relationship between charities, wider civil society, trade unions and Government. The right reverend Prelate the Bishop of Derby mentioned this. Joined-up thinking is so important and the round-table discussions that he started in Derby are interesting. This is often the way forward. They get people together. It may not be with a specific charity, but it gets them thinking about how we might help people in their various neighbourhoods.
Looking to the past, there are many examples of where the Government have responded to the voice of the voluntary sector. I shall give just one. Towards the end of the last Parliament the Office for Civil Society launched a £20-million local sustainability fund. It came about as a direct response to concerns voiced by the sector—that small and medium charities were struggling more than many others to respond to the challenging operating environment. The noble Baroness, Lady Pitkeathley mentioned that charities are finding it difficult. The launch of this fund will certainly help particularly the medium and small charities. It is now helping more than 260 charities to reform and secure the future of their services. I am sure there will be many more such examples of collaboration between the Government and civil society in the future.
I look forward to debating and discussing with your Lordships what more can be done to continue our support of civil society in the months and years ahead. In a debate such as this, it has been almost impossible to answer every point, but I assure all noble Lords who have spoken that I have made a note of what has been said and will take all these points back to the department. We will discuss and make sure that your voices are heard and I hope that we will have another debate where we continue the important work that has been mentioned today.