Stronger Charities for a Stronger Society (Charities Committee Report) - Motion to Take Note

Part of the debate – in the House of Lords at 3:23 pm on 16th January 2018.

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Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Chair, Citizenship and Civic Engagement Committee 3:23 pm, 16th January 2018

My Lords, I was not a member of this Select Committee, although I was privileged to be able to give evidence to it. The report is a thoroughly professional piece of work which reaches many sensible conclusions. I congratulate the noble Baroness and members of the committee on their work. I note that Tracey Crouch, the Minister responsible, has given a “positive response”—the phrase used by the noble Baroness in her introduction—and I hope that follows through to the implementation of the recommendations.

I will focus my remarks on three areas where I particularly support the committee’s conclusions. The first is on the need to ensure proper governance of individual charities and, in particular, the need to ensure that bodies of trustees or boards are regularly assessed and refreshed. In the research which I carried out for my own report on the sector five years ago, it became clear that, too often, the presence of too many long-serving trustees had a deadening effect on the operations of the charity. In my view, the committee is absolutely right in its recommendation of a maximum of three three-year terms for trustees. However, this should not be a statutory requirement, as the charity sector, above all, does not come in one size; comply or explain must be the right way forward. I look at the noble Lord, Lord Shutt of Greetland, as he has raised this concern with me.

Secondly, I very much support the committee’s comments on charity mergers and amalgamations. It can be argued that, with over 150,000 registered charities, there are already too many, but it would surely not be right to unduly restrict the formation of new charities, many of which are established in the aftermath of an appalling personal tragedy. We should instead encourage the long tail of longer-established and, too often, semi-moribund charities to wind up, merge or amalgamate. A decision to do this is often seen by trustees as a sign of weakness or failure. In my view, they should instead see it as a sign of realism and strength.

My third issue concerns the report I prepared for the Government on Part 2 of the lobbying Act on third-party campaigning, to which the noble Baroness referred. Of course, it is immensely flattering when a distinguished committee of your Lordships’ House recommends the implementation of one’s report, and it is very tempting to roll over and have one’s tummy tickled. However, I say to my noble friend on the Front Bench that I am disappointed that the Government have decided not to proceed with the implementation of the report, particularly since they seemed in favour of it initially, judging from the remarks of the Ministers then responsible for this issue, my noble friend Lord Bridges of Headley in this House and John Penrose MP in the other place.

We seem to have become snagged on the single issue of the “intent test”: what was the purpose behind a particular action of a third party? On the one hand, the Government appear to think that the protections offered by the Representation of the People Act are inadequate, though it has been in force now for over 30 years and there do not appear to have been any particular problems with it. On the other hand, third-party campaigners are nervous about the potentially capricious, and perhaps ex post, interpretations of a particular activity they may have undertaken. If this is the problem, there are still ways forward if we wish to follow them. The Electoral Commission could produce a statutory test covering the intent test. That would obviously have to be approved by both Houses of Parliament via statutory instrument but, once approved, compliance with it would give legal protection to any third-party campaigner. If that is not possible, the Electoral Commission could itself undertake that where a charity complied with CC9—the Charity Commission’s guidance on political campaigning—the Electoral Commission would not seek to bring a prosecution. This would at least bring legal protection to the charity sector. One way or the other, I hope the Government may be persuaded to reconsider their approach to this issue. The present position is not satisfactory for the Government, the Electoral Commission, the Charity Commission or, indeed, third-party campaigners as a whole.

I shall focus the rest of my remarks on an issue which does not form part of the committee’s report but which I think needs some government attention—the Royal Albert Hall. It is a complex matter but shows how the existing legal framework is less effective than it should be. As regards the background, noble Lords may be aware that the Albert Hall was built in Victorian times and funded by public subscription. The corporate structure is complex but includes a registered charity. Those who subscribed to the construction costs were given in return a seat or seats enabling them to attend events in the Albert Hall in perpetuity. A difficulty has arisen because individuals or individual families have acquired blocks of seats and, it is alleged, have begun to attempt to sell the seats at prices not necessarily linked to their face value. This difficulty is increased where the individual purchasers are themselves directors or trustees of the Albert Hall charity, and where, as I understand it, the seat owners control 19 of the 24 board places.

There has been a veritable blizzard of allegations and counter allegations; if noble Lords want to follow the events in more detail, the broadsheets will provide some acres of newsprint. I have met with Jon Moynihan, the chairman of the board, and Mr Richard Lyttelton, who is leading for the opposite side. After some years of skirmishing, in September the Charity Commission applied to the Attorney-General to have the issue referred to the Charity Tribunal for investigation and determination, and just before Christmas the Attorney-General gave his consent.

The case gives rise to some points on which I would like the Minister’s views. First, how long do the Government think it will take the Charity Tribunal to adjudicate on this case? I appreciate that the tribunal is a court of law and makes its own timetable. But difficult cases like this should surely be dealt with as speedily as possible and not allowed to fester. I have no idea where the truth lies, but the present confused picture not only potentially damages the reputation of the sector as a whole—the noble Baroness’s report refers to other celebrated cases in recent years that have the same effect—but, maybe unfairly, damages the reputation of the Albert Hall itself. We need sunlight, and quickly.

I will make one final structural point. Under the present regime, the Charity Commission—the regulator of the sector—is unable to apply to the tribunal directly for a ruling on a point of law. It has to get the permission of the Attorney-General, which, in the case of the Albert Hall, took over three months to obtain. Surely this is an unnecessary measure, presenting a barrier to the commission’s ability to contribute constructively to the development of the law against which it is required to regulate. Should not the commission have the power to make references to the tribunal directly, without the need for permission, provided that notification of the reference is given to the Attorney-General, who retains the power to be joined as a party in the case if he so wishes? The Minister might like to take that issue back to the department as an important way in which we could improve the regulation of the sector in the future.

In conclusion, again I congratulate the committee on its report and the Government on their broadly supportive stance. I look forward to seeing progress towards an implementation phase of its many sensible recommendations.