Clause 3

Charities Bill [Lords] – in a Public Bill Committee at on 4 July 2006.

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The “public benefit” test

Amendment proposed [this day]: No. 71, in clause 3, page 3, line 21, leave out from ‘whether’ to end of line 23 and insert—

“a body provides or intends to provide public benefit, regard must be had to—

(a) how any—

(i) benefit gained, or likely to be gained, by members of the body or any other persons (other than as members of the public), and

(ii) disbenefit incurred, or likely to be incurred, by the public in consequence of the body exercising its functions,

compares with the benefit gained or likely to be gained by the public in that consequence, and

(b) where benefit is, or is likely to be, provided to a section of the public only, whether any condition on obtaining that benefit (including any charge or fee) is unduly restrictive.

(2A) It is presumed that a charity established to benefit the natural environment, or the living species within it, exists for the public benefit.’.

Question again proposed, That the amendment be made.

Photo of Ed Miliband Ed Miliband Parliamentary Secretary (Cabinet Office)

Welcome to the Committee, Mr. Gale. It is a great pleasure to have you with us.

We had an interesting debate this morning on amendment No. 71 and issues relating to public benefit. I thought that it would be helpful to the Committee if I explained in the context of the amendment how public benefit will work under the Bill. Then I will deal with the specific issues raised by the amendment.

An organisation must satisfy two tests to be a charity: it must exist for a purpose under clause 2(2), and its purposes must be for the public benefit. To answer the question of my right hon. Friend the Member for Cardiff, South and Penarth (Alun Michael), who is not in his place, the purposes listed in subsection (2) are capable of being for the public benefit but are not necessarily so. A trust to relieve the poverty of one family member is for the relief of poverty, but would not be deemed for the public benefit.

The key question with which amendment No. 71 is concerned is how public benefit will be defined. As set out in the Charity Commission document “The Public Character of Charity”, the public benefit requirement means that an organisation must do two things. It must provide a recognisable advantage for people at a level that reflects their need; that is the benefit element. In addition, the benefits must be provided to the public at large, or at least a sufficient section of the community; that is the public element. Those are the general principles that apply across the board, but they are flexible enough to be applied by the Charity Commission and the courts in different ways, depending on the charitable purpose that they are considering. A large mosaic of case law underpins those principles.

That brings me to the substance of amendment No. 71. I shall deal first with the second part of the amendment, which would introduce a presumption of public benefit for charities that benefit the natural environment or species within it. The Government do not believe that that is desirable or necessary, and not only because the hon. Member for Cheltenham (Martin Horwood) seems to be introducing a second Cheltenham principle, which is to support presumptions of public benefit in one respect but not at another. The amendment is undesirable because it singles out one charitable purpose. It is unnecessary because a charity established to benefit the natural environment or a living species can be deemed to provide public benefit on a number of grounds, not simply the prevention of extinction, which I think was the hon. Gentleman’s concern. For example, animal welfare charities are recognised as charitable not because the animals are necessarily threatened with extinction but because of a broader acceptance of the public benefit of avoiding cruelty and animal suffering. I understand that the Wildlife Hospital Trust to which the hon. Gentleman referred qualifies on that basis.

Environmental protection is acknowledged to provide public benefit because it improves the living conditions of humankind. The Government think that that part of the amendment is unnecessary.

Photo of Alun Michael Alun Michael Labour, Cardiff South and Penarth

My hon. Friend is making an important point on the issues that I raised this morning. Would it not be correct to say that just as animal welfare produces a public good because it is recognised to be of public benefit without necessarily benefiting individual human beings, environmental protection need not directly benefit individuals to satisfy the public benefit criteria?

Photo of Ed Miliband Ed Miliband Parliamentary Secretary (Cabinet Office)

That is correct to an extent. I do not think that my right hon. Friend was in his place when I said it, but is important to restate the point that purposes under clause 2(2) can be for the public benefit but are not necessarily so. The public benefit test is applied by specifically examining the individual charity and seeing whether it benefits a sufficient section of the public.

To illustrate that important point, I shall quote from the case of IRC v. Baddeley. Lord Somervell of Harrow, talking about a charitable trust, said:

“There might well be a valid trust for the promotion of religion benefiting a very small class. It would not follow at all that a recreation ground for the exclusive use of the same class would be a valid charity”.

The point I am making is that there is a general public benefit test: a sufficient section of the community must be benefited. That test is then specifically applied, and has been applied by the courts—there is a bedrock of common law on the matter—in different cases in different ways. My right hon. Friend looks quizzical, so I shall give way to him.

Photo of Alun Michael Alun Michael Labour, Cardiff South and Penarth

The difficulty is applying the same principles to a variety of the 13 categories that we have in the Bill. Let us stick with the animal welfare point for a moment. Does my hon. Friend accept that, in the terms that he used earlier, one does not have to show that members of the public benefit from the pursuit of animal welfare in order to show that it is charitable and in the wider sense of the term produces that “public benefit”? I think that I virtually paraphrased his words. If we were to paraphrase that in relation to others of the objects, surely it would explain the situation clearly.

Photo of Ed Miliband Ed Miliband Parliamentary Secretary (Cabinet Office)

I always hesitate to disagree with my right hon. Friend, but ultimately there must be some benefit to the public in order to show “public benefit”. It is pretty clear from established case law that animal welfare charities are deemed to provide public benefit, because there is public benefit in avoiding cruelty and suffering to animals and that redounds to the benefit of humankind. That is my understanding of the basis on which the courts have made their decisions. In a way, the meaning of public benefit is that it must provide benefit to the public.

Photo of Alun Michael Alun Michael Labour, Cardiff South and Penarth

I am sorry to intervene on my hon. Friend again, but surely the same must apply in relation to the environment. If it is accepted that the protection of the environment more widely produces a general public benefit, one would not have to show that a particular group, or number or proportion of the public benefit from that any more that one would in relation to animals. Surely the same test must apply.

Photo of Ed Miliband Ed Miliband Parliamentary Secretary (Cabinet Office)

There has to be a wider public benefit. It can be a collective benefit, for example, one that comes from preserving the environment or avoiding cruelty or suffering to animals. The point that I am making to my right hon. Friend is that ultimately we must come back to a benefit to the public in some form or another. That can be collective; it does not need necessarily to be about direct benefit to individuals. That is the point about animal welfare charities.

This is important to get clear, because in a way public benefit is the basis on which the Bill turns. We are rightly relying on the common law definitions of public benefit, which have built up over 400 years. The matter therefore takes some explaining and understanding, because the criteria have been built up over a number of years and apply in different cases in different areas.

I move on to the substance of the amendment proposed by the hon. Member for Cheltenham. It might not be specifically targeted at private schools—it might be more generally targeted—but one of the things he clearly has in mind is schools. I shall say something about the position relating to schools because I do not accept his characterisation, as I said on Second Reading.

The Bill is based on four principles. The first is that charities must show public benefit, and there is no free pass for any charity—that is the reason to get rid of the presumption in favour of education, religion and the relief of poverty. The second is that the Charity Commision will have the final say, depending on the circumstances of the individual charity, as has always been the case and has been demanded by the National Council for Voluntary Organisations and others. The third is that indirect benefit that is simply relief of the public purse should not be regarded as satisfactory. The fourth is that, as it stands, the Bill can raise the bar of what is required, while also raising the overall standard of education in this country.

The hon. Gentleman referred briefly to re Resch. As I said on Second Reading, I am not sure that I accept his characterisation. He seeks to introduce a clarification derived from recent Scottish law. On Second Reading, my right hon. Friend the Chancellor of the Duchy of Lancaster said, regarding the advisability of a clarification of the Bill:

“By trying to be more specific, we do not want to exclude organisations that should not be excluded. I hope that hon. Members, especially my hon. Friends, understand that we are determined that there will be a test of public benefit, which we expect to be meaningful, but that trying to identify matters too clearly frequently brings disbenefits that nobody anticipated.”—[Official Report, 26 June 2006; Vol. 448, c. 26.]

That is one danger in what the hon. Gentleman proposes. I shall explain why.

Scottish charity law is now based on a different legal framework than the law of England and Wales. Under the Bill, the public benefit test is based on “charitable purposes” as established in common law. Under the new Scottish law, the public benefit test is based on the activities of the bodies that seek to become charities, and the regulator has been given a large amount of power to make executive decisions about which charities meet the public benefit test. In a sense, the intervention of the hon. Member for Isle of Wight (Mr. Turner) on the hon. Member for Cheltenham illustrated that point. The hon. Member for Cheltenham is right to say that what “unduly restrictive” would mean is not a decision for him, but it will be a decision for the Office of the Scottish Charity Regulator. Clearly, that important decision has been taken. That is an overall perspective of some of the differences between English and Scottish law, and the direction of travel of the Scottish situation.

The amendment is basically in two parts, the first of which deals with the public benefit test and provides that the benefits must outweigh the disbenefits. That is already established in law and does not add anything. As I understand it, a 1947 case concerning the National Anti-Vivisection Society, with which I have a passing familiarity, established that the benefits must outweigh the disbenefits as part of the public benefit test. Therefore, that part of the amendment is unnecessary.

The second part of the amendment contains the wording “unduly restrictive”. That wording is not clear enough for us to be confident that it would improve the public benefit test in the Bill and would not have unintended consequences. Could we be sure, in the context of the law in England and Wales, that existing charities, such as museums that charge fees, would not be caught? I am sure that that is not the intention of  the framers of the amendment, including the hon. Member for Cheltenham, but we are not confident that it is the best way forward. At best it would mean no change to the public benefit test that is carried out by the commission; at worst, it could have harmful effects. Perhaps that is why Lord Phillips of Sudbury said, in a letter to me, that the Scottish provision is not well drafted. That is consistent with what he said in another place a year ago—the Liberal Democrat Front Benchers should hear this. He said:

“It was pressed upon me that it might assist our deliberations to introduce some of the Scottish wording around this very issue. However, I rejected that out of hand because in this instance I believe that the Scots have got it plumb wrong”.—[Official Report, House of Lords, 28 June 2005; Vol. 673, c. 168.]

Liberal Democrat Front-Benchers might need to consult with Lord Phillips on that, but on this occasion at least, we agree with him that the amendment would not be helpful. We have not closed our minds to the possibility of improving the Bill, but any change must meet the true criteria set out by my right hon. Friend the Chancellor of the Duchy of Lancaster: that it provides a sound legal basis for the public benefit test and avoids any unintended or harmful consequences. On the basis of those explanations, I hope that the hon. Gentleman will withdraw his amendment.

Photo of Martin Horwood Martin Horwood Shadow Minister (Environment, Food and Rural Affairs)

I shall take the second part of the amendment first regarding

“benefit to the natural environment, or the living species within it”.

I am encouraged by the sympathetic comments from the hon. Member for Bishop Auckland (Helen Goodman), the right hon. Member for Cardiff, South and Penarth, the Minister and others about the spirit of the amendment. There has been genuine concern about the risk of an organisation passing the clause 2(2) test as an environmental organisation, but going on to fail the public benefit test, because—I shall paraphrase the right hon. Member for Cardiff, South and Penarth—it might not always be possible to demonstrate public benefit when one cannot demonstrate a public who obviously and directly benefit. I am partly reassured by the Minister’s reply, but the risk still exists and there is still a need for clarity. Should the amendment be defeated, I invite the Minister to look sympathetically on the idea of introducing a Government amendment that might meet some of the same objectives. However, I advise him not to use “presumed”, as it is liable to misinterpretation.

The main body of the amendment is concerned with the Scottish public benefit test. The Minister suggested that four principles were being followed: first, that there is no free pass to pass the test, which is correct; secondly, that the Charity Commission has the final say; and thirdly, that the benefit is not automatically satisfied simply by the provision of education. I agree with those three principles, but there is doubt regarding the fourth—that the Bill will raise the bar. The legal opinion that I have heard is divided on whether the Bill will make any difference to charity law in terms of the public benefit test. The NCVO and the Charity Commission support that view in many of their comments.

The hon. Member for Isle of Wight questioned why the view of the Charity Commission, or the NCVO, or  indeed the Liberal Democrats, since I have not reintroduced Lord Phillips’ amendment, might have evolved during the course of the long debate about this Bill. One obvious reason is the passage of the Scottish Act, because it sets a clear example of how a stricter set of guidelines on the public benefit test might work.

Let me answer a few of the hon. Gentleman’s questions about my amendment. He asked me to define or clarify what I meant by benefit or disbenefit. He kept on referring to them as my words, but they are the words adopted by the Scottish Parliament, so I can do no better than to refer to the Office of the Scottish Charity Regulator’s guidance on public benefit. It says:

“For example, if a charity relieves a person’s sickness or financial hardship, the person’s health or financial circumstances can be measurably improved. Such benefits could be described as tangible. On the other hand, intangible benefits may be more difficult to measure, but should still be identifiable. These can include, for example, many of the benefits of education or religion, or promoting appreciation of historic buildings. Both tangible and intangible benefits will be taken into account.”

I hope that reassures him, given some of his worries about whether the amendment would apply to the provision of education.

The hon. Gentleman also asked about the disbenefit. It, too, is explained more clearly in OSCR’s guidance, which says:

“Many of the everyday actions of organisations (and individuals) may cause a degree of harm to others, either directly or indirectly. This fact should not unnecessarily stifle the operations of charities. Where any disbenefit caused is due to reasonable and necessary actions in connection with the (prospective) charity’s purpose and is the inevitable and generally accepted result of such actions in the society in which they take place, then such disbenefit may be largely disregarded (for example, when a degree of harm to the public is caused (by road accidents and pollution) by charities that need to use cars in the delivery of services to their beneficiaries).”

Again, I hope that he is reassured that the emerging practice in Scotland is moderate and reasonable.

That is why I shall not withdraw the amendment but press it to a vote. I hope that the demonstration of the need for more clarity and a stricter public benefit test, which I think has been demonstrated, is reflected in the Bill.

The hon. Member for Rochford and Southend, East (James Duddridge) referred us to re Resch in the hope that it would provide clarity. My noble and learned Friend Lord Phillips of Sudbury is one of the few people who has probably read and understands re Resch and he said in the other place that

“A decent lawyer can make a good case for virtually any proposition on the basis of Re: Resch. If you have trouble sleeping, keep it by your bedside. I was amused that the briefing note that the Independent Schools Council sent to, I suspect, all of us, had the wonderful statement:

‘The Resch principles are in the law books for anyone to read’.

Indeed they are. Read, and read, and read ye may, but a certain conclusion you will not find”.—[Official Report, House of Lords, 7 June 2006; Vol. 672, c. 794.]

The confusion about the interpretation of re Resch which has prompted much debate, especially in the other place, underlines the need for clarity.

It is absolutely right that institutions that gain the benefits of charitable status clearly demonstrate a public benefit, perhaps more so than they have had to do in the past. That is the whole tone and direction of  the Bill, which seeks to apply a public benefit test to all charities. Even the hon. Member for Isle of Wight’s noble Friend said in another place that all charities, whatever their purpose, should have to pass a public benefit test. I am simply trying to ensure in the amendment that the public benefit test makes some difference to the existing law and that the sort of direction in which the Independent Schools Council is encouraging its members to travel—to seek out ways imaginatively to promote public benefit more effectively—is the direction in which they go. Only stricter wording in the Bill will deliver that.

Question put, That the amendment be made:—

The Committee divided: Ayes 2, Noes 12.

Division number 1 Nimrod Review — Statement — Clause 3

Aye: 2 MPs

No: 12 MPs

Aye: A-Z by last name

No: A-Z by last name

Question accordingly negatived.

Photo of Roger Gale Roger Gale Conservative, North Thanet

Before we proceed to the next group of amendments, it may be for the convenience of the Committee if I indicate now that it has always been my custom and practice to allow a stand part debate either at the beginning of consideration of a clause or at the end, but not both. I understand that there has been a fairly substantive debate already on the clause and, that being so, it is unlikely that I shall be minded to allow a stand part debate. Hon. Members may therefore choose to use their ingenuity to raise, within order, any other matters that may arise during the next few moments.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

I beg to move amendment No. 4, in clause 3, page 3, line 22, after ‘not’, insert

‘save in the case of subsections (a) and (c) of section 2(2),’.

Photo of Roger Gale Roger Gale Conservative, North Thanet

With this it will be convenient to discuss amendment No. 54, in clause 3, page 3, line 22, after ‘not’, insert

‘save in the case of section 2(2)(b).

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

It is a great pleasure to serve under your chairmanship again, Mr. Gale.

Both of the amendments resist the abolition of the presumption of public benefit which seems to be at the heart of the Bill. Amendment No. 4 refers to clause 2(2)(a) and (c) and amendment No. 54 to clause 2(2)(b). The principle embodied in the Bill is very simple: it is that there should be a level playing field and all charities should have to demonstrate public benefit, albeit that that principle was somewhat undermined by the arguments advanced by the hon. Member for Cheltenham in support of amendment No. 71. What is interesting is that the public benefit test  seems to be different for many of the causes set out in clause 2(2). My intention in tabling the amendments is twofold. First, it is to tease out what the law is on public benefit in respect of each of the three charitable purposes. Secondly, it is to test whether it is to the advantage of the populace in general that charities should have to devote time and energy to demonstrating public benefit when to do so is otiose, as in the case of the relief of poverty, or impossible, as in the case of the advancement of religion.

I am told that, under charity case law, it is not those who engage in religious practices who are the public who benefit; the public benefit is the benefit that they bring to society by rubbing shoulders with those who do not so engage. In other words, people who engage in religious practices are presumed to become more moral and altruistic as a result, so the public at large benefit when they mix with such people. That is an ingenious interpretation. However, the Chancellor of the Duchy of Lancaster has said that

“all charities will have to show that they are for the public benefit...an organisation will have to show that it generates identifiable benefits that reach...a sufficiently large section of the public.”—[Official Report, 26 June 2006; Vol. 448, c. 25.]

What are the identifiable benefits from religion that reach a sufficiently large section of the public? If it were a case of rubbing shoulders, many religions, but not all, will be able to demonstrate public benefit.

Perhaps prayer brings comfort to those who participate in it, but I am worried about how we can demonstrate that it generates a public benefit. I said that on Second Reading, but I do not think that I received a satisfactory reply. Can we demonstrate that the prayer undertaken by people engaged in religion has made them more moral and altruistic? Is that what religions will be asked to demonstrate?

Photo of Helen Goodman Helen Goodman Labour, Bishop Auckland

The hon. Gentleman may be aware that, in America, an experiment was carried out in which religious communities prayed for people who were ill. The people involved did not know whether or not they were being prayed for but, as it happened, those who had been prayed for did get better faster.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

That is most encouraging for those who occasionally pray and even more so for those who pray more frequently. The case seems to be very much on the lines of the arguments over health foods—we might be able to demonstrate the statistics, but can we demonstrate the cause and effect? Perhaps I should not go down this road—in fact, I know I should not. I shall do so at another opportunity, Mr. Gale.

The difficulty is demonstrating that the prayer has the effect that the hon. Lady mentioned. If we are providing a place of worship and some comfort is taken by the people who attend the place of worship, is that providing a public benefit in that the place of worship is open to a fair number of people, or are we providing a private benefit? Is it sufficient that that group of the public should take comfort from prayer or is there also a requirement that that comfort be extended to other people?

That sounds highly academic, but what about people in religious groups who pray but do not rub shoulders with others? The Parliamentary Secretary assured me on Second Reading that,

“for religion, the obligation will not be onerous...making provision for people to attend acts of worship is clearly a public benefit.”—[Official Report, 26 June 2006; Vol. 448, c. 96.]

I should have mentioned that point earlier, because it was part of my earlier argument.

What about those who pray behind closed doors? There is a current television programme about women attending a convent of the Poor Clares. Few people have the opportunity to attend such a convent temporarily, because the Poor Clares are a contemplative order that operates mostly behind closed doors. What is the benefit to the public of the activity of the Poor Clares and, more significantly, how do they demonstrate it to the satisfaction of the Charity Commission?

Photo of Alun Michael Alun Michael Labour, Cardiff South and Penarth 4:30, 4 July 2006

Is not the hon. Gentleman in danger of taking us into a linguistic discussion when the answer is actually is given in clause 3? It says:

“In this Part any reference to the public benefit is a reference to the public benefit as that term is understood for the purposes of the law relating to charities in England and Wales.”

That refers specifically to what has built up in statute and case law over the years. The answer is already in law and the Bill ensures that it is enshrined and continued, which is better than having a fresh set of words putting it to one side.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

I am grateful to the right hon. Gentleman for raising that point, because about three months ago that was the meaning that I understood was contained in the Bill. However, that interpretation has been sadly undermined, not least by the Parliamentary Secretary himself, who said that the Bill would

“raise the bar with regard to the contribution that” private schools

“make towards the public benefit”.—[Official Report, 26 June 2006; Vol. 448, c. 97.]

He cannot say both, “This is the public benefit test and it is unchanged” and “We will use the processes in this Bill to raise the bar for the public benefit test.”

Photo of Alun Michael Alun Michael Labour, Cardiff South and Penarth

Surely, that is precisely what it does. By removing the presumption that the general legal definition—that which is understood in common law—applies to schools and other organisations that were previously presumed to have a public benefit, the clause does precisely what he says it does not do.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

If by “raise the bar”, the Parliamentary Secretary meant “remove the presumption of public benefit”—[Interruption.] He is saying that he did. That makes it a lot easier.

I am concerned that the Parliamentary Secretary has given the impression to certain hon. and right hon. Gentleman on the Government Back Benches that he will require independent schools to demonstrate a higher level of public benefit than they have been required to do so far. I understand that, currently, there is a presumption and an act by the Charity Commission would be required  to overturn that, but the test is the same whether there is a presumption or not. Under the current law, once the Charity Commission tested whether a charity was meeting the public benefit test or the presumption was ill-founded, it would apply the same test once the presumption was removed. I hope that I am making this clear for the Parliamentary Secretary, because he may shake his head if I am not doing so.

The Parliamentary Secretary is not raising the test. He may be raising the bar and abolishing the presumption, but he is not making the test more difficult. I have to leave it to him, unless he wishes to intervene.

Photo of Tom Levitt Tom Levitt PPS (Rt Hon Hilary Benn, Secretary of State), Department for International Development

I am trying with interest to follow the hon. Gentleman’s argument. Surely a presumption is a presumption, beyond which there is no further need for a test. The Bill says that we need organisations to justify their charitable status. The hon. Gentleman appears to suggest that Eton, Harrow and all such schools should not have to demonstrate their public benefit, but organisations such as the National Society for the Prevention of Cruelty to Children should have to.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

The selection of examples makes the hon. Gentleman’s point, and I am sure that that is why he selected them. However, I am afraid that he is wrong. A presumption is a merely a presumption: in the absence of other evidence, we presume that public benefit is met.

A presumption, however, is not an insurmountable assertion; otherwise, the Finsbury Park mosque would not have been required to take action to preserve its charitable status. That mosque benefited from the presumption that the advancement of religion is a charitable purpose. There were complaints about how the mosque was used and the Charity Commission waded in to persuade those who run the mosque to act differently and bar certain people from using it for certain purposes. There was a presumption, but it was not irrebuttable. Once the Charity Commission had found that the mosque was not being used for public benefit, it asked the trustees to change their behaviour. They did.

I am asking whether the test in clause 3(3), to which the right hon. Member for Cardiff, South and Penarth referred, will be the same or whether it is of a higher level, first in respect of religion, as the right hon. Gentleman says, secondly in respect of the alleviation of poverty, on which nobody has uttered, and thirdly in respect of the advancement of education. If the test is the same, we are fine and dandy. However, if it is different, the assertion that subsection (3) guarantees no change in the test is false. I had not intended to go down that avenue, although it would be useful to do so. I am sure that the Parliamentary Secretary will respond helpfully to that point.

Photo of James Duddridge James Duddridge Conservative, Rochford and Southend East

Does my hon. Friend agree that the issue relates not only to the position directly after the Bill is enacted? The test could be ratcheted up year after year, both by Government-appointed charity commissioners and political pressure, and that would effectively be an extra tax on independent schools.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

That has certainly been a concern. I accept, of course, that, in the Bill, the Charity Commission is deemed to be independent, but Ministers make the appointments. When we come to clause 4, I intend to discuss the process through which the public benefit test may evolve; that is certainly a concern of mine.

I go back to my amendment. The second example referred to by amendment No. 4 is that of the alleviation of poverty. As I said on Second Reading, I find it difficult to understand how it can be argued with any reasonable likelihood of success that a charity for the relief of poverty is not for the public benefit. On Second Reading, the Parliamentary Secretary said that

“if we take the case of a trust to benefit a few people in one’s immediate family, one might say that it was set up for the relief of poverty. However, there might be questions about whether it genuinely provided public benefit.”—[Official Report, 26 June 2006; Vol. 448, c. 96.]

There is a presumption that there is public benefit, of course—but it is rebuttable. In the case under discussion, such use of a trust would be excluded, because it would be so defined that its membership would be fixed, which means that it would be a private trust, not a public trust. A private trust cannot be for public benefit.

I accept that there may be cases in which the presumption is unreasonable, but those are cases in which the presumption is rebuttable. I do not want every charity whose object is the relief of poverty having to go out and demonstrate that it is relieving poverty in the way the Charity Commission intends, and thereby expend a huge amount of time and energy. I do not see how the abolition of the presumption can have any effect unless charities are asked to demonstrate what Ministers say that they want them to demonstrate: identifiable benefits. So every religious or educational charity—not just Eton and Harrow, but the Isle of Wight Steam Railway, which is an educational charity—will be asked to spend time and money demonstrating how it provides public benefit, when the Isle of Wight Steam Railway would far rather build an extension to join the island line from Shanklin to Ryde pier head.

Photo of Martin Horwood Martin Horwood Shadow Minister (Environment, Food and Rural Affairs)

The hon. Gentleman seems to forget that the enormous majority of charities already have to demonstrate public benefit under current law, because the fourth head of charity requires it. Is he suggesting that the current requirement to prove public benefit is enormously onerous for all the thousands of charities that endure it?

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

I am not suggesting that. I simply do not know, but I do know that some charities have been caught, and I mentioned one earlier. I did not quote its name because the Charity Commission did not tell me the name, but I quoted the Charity Commission as saying that a particular charity that operates for the benefit of police officers’ widows and orphans was behaving inappropriately by giving them a Christmas gift of £50. I am quite happy to table the letter—or whatever one does with papers—so that hon. Members can read them.

Photo of Martin Horwood Martin Horwood Shadow Minister (Environment, Food and Rural Affairs)

Since that organisation did not make its gifts to the widows of police officers on the basis of need, it would not meet the criteria in the hon. Gentleman’s amendment, which excludes the prevention or relief of poverty, and the advancement of religion. It would still have to pass the public benefit test even if his amendment were passed.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

The Charity Commission would have to put that test to the organisation to demonstrate, but the commission would not have to ask every charity to demonstrate it. Many charities will demonstrate it perfectly adequately, but we will be asking charities—and the Charity Commission, for that matter—to expend a lot of time, effort and money, and, in the case of the Charity Commission, our money and our constituents’ money, in demonstrating something that it is unnecessary to demonstrate unless there is a prima facie case that those organisations are not conferring public benefit.

Photo of Alun Michael Alun Michael Labour, Cardiff South and Penarth

Does the hon. Gentleman not accept that any charity of any size produces a business plan—for its own internal reasons, never mind any external scrutiny—that demonstrates how it is pursuing its charitable objects and how it is therefore delivering public benefit? No extra work is required.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

No, I do not accept that, any more than I accept that every business has a business plan. Perhaps they ought to have, but I am sure that not every Conservative association has a business plan. Mine does, as it happens, but I do not suppose that every constituency Labour party has a business plan. Of course, that is the way that things should be done in the best of all possible worlds, with an infinite number of staff who can spend their time on such matters, but charities are not like that. [Interruption.] I did not hear the right hon. Gentleman’s intervention.

Photo of Alun Michael Alun Michael Labour, Cardiff South and Penarth

I said that charities are a lot more business-like than the hon. Gentleman thinks.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight 4:45, 4 July 2006

Many are, but not all are able to act in the way that the right hon. Gentleman describes, and I am concerned that they will be forced so to act. If I can find the example that I was given earlier—well, I cannot find it, but I am sure that I will have an opportunity to quote it later during the Bill’s proceedings. Anyway, I received an e-mail from someone who claimed to be a lifelong Labour voter. I know that lifelong Conservative voters are those who are not going to vote for me at the next election; the same probably applies to this lifelong Labour voter. He has taken on the treasuryship of his local church, but complains that, even in the present circumstances, the Charity Commission is expecting far too much, and he says that it is not surprising that one cannot find people who are willing to take on such responsibilities. Although I accept that the other charities whose purposes are in the list are required to demonstrate public benefit, it would be better if we did not impose that requirement on lots of new ones as well.

Photo of Tom Levitt Tom Levitt PPS (Rt Hon Hilary Benn, Secretary of State), Department for International Development

As one spent three very enjoyable summers on the Isle of Wight in my student days, I certainly take the hon. Gentleman’s point about the valuable work of the Isle of Wight Steam Railway Co.

However, I wish to comment on the point raised by my right hon. Friend the Member for Cardiff, South and Penarth about the onerous nature of demonstrating that a charity is doing what it was set up to do. If I were asked to give money to one of those charities, I would want to know that it was doing what it was set up to do; if I were a trustee, I would expect some sort of annual report from the chief executive or the chairman; if I were an auditor, I would expect the audited accounts of the organisation to demonstrate that the charitable purpose is being met. All those things should really be being done now. The Bill raises the threshold at which charities have to register and so reduces the burden on smaller charities, but the hon. Gentleman is making a mountain out of a molehill in suggesting that there is any significant extra work for charities to do under the clause.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

I cannot judge the size of the mountain, but we should remember that those charities that do not have to register are still obliged to demonstrate public benefit. As for the small charities, if I give money to the Isle of Wight bat hospital, I know where that money is going, because I can go to that hospital and see the bats; the same is the case for the Isle of Wight Steam Railway Co. There is a difference between a small, local charity and a large charity that requires auditors, business plans and goodness knows what.

I remind the Committee what happens when a charity is not delivering public benefit; that is particularly significant to an educational charity. The document from which I quoted earlier, “Public Benefit—the Charity Commission’s approach”, sets out what happens then. It states:

“our action might include helping the charity change its stated purposes or its activities so that it is benefiting enough of the public to show public benefit”— that is fine—

“We might also use our regulatory powers to enforce change if the trustees are not co-operating with us, although we anticipate we would need to do this in only in a few cases.”

That, too, is excellent.

“However, in extreme cases, where the trustees are co-operating with us but the organisation simply cannot in all the circumstances provide public benefit, our action might include removing the charity from the register and making a legal scheme where necessary to ensure that any charitable assets of the organisation will in the future be applied for other charitable purposes close to any purposes that have ceased to be charitable.”

That suggests that there are some activities that will cease to be deemed charitable, and that the charities concerned will therefore lose their assets. I am worried principally that the abolition of the presumption of public benefit will put an additional burden on charities and on the Charity Commission that they are ill placed to meet.

Photo of Martin Horwood Martin Horwood Shadow Minister (Environment, Food and Rural Affairs)

I would like to draw a little on my experience of being on the senior management team of a national charity that had to pass the public benefit test. The Alzheimer’s Society did not qualify under any  of the first three heads of charitable purposes. The hon. Member for Isle of Wight seems to think that passing the public benefit test and maintaining the status of passing the public benefit test is some terribly onerous and difficult responsibility that involves lawyers’ fees and heaven knows what else. However, I have to say that in five years on that senior management team, the public benefit test did not bother us for one minute.

I am speaking about a charity that did not provide a benefit to the whole public. We were quite shamelessly restricting our services for the benefit of carers and people with dementia, so there is perhaps a case to be made that we were not providing a wider public benefit and that we restricted our services. However, most of us thought that if we had ever been challenged as to whether we were providing a public benefit, we could have dispatched the argument on one side of A4 faxed to the Charity Commission, which I suspect would not have wasted any more time on it than we would have done.

In the overwhelming majority of cases, charities will have little difficulty in passing the public benefit test or proving that they are capable of passing it, should they ever be challenged. I echo the words of the hon. Member for the Member for High Peak (Tom Levitt) when he says that a mountain is being made out of a molehill.

In the specific case of religion, the hon. Member for Isle of Wight seems to be concerned that it is difficult to demonstrate the benefit of prayer or religious activity. Through a precedent in case law, which I do not pretend to fully understand, even religious charities have to demonstrate some public benefit. It is probably because of the need to demonstrate that they are advancing religion as opposed to just practising it. For example, closed orders—I do not know whether the Poor Clares fall into that category, but I suspect that they do—do not now qualify as charitable organisations in charity law because they are practising religion behind closed doors for their own personal benefit. Therefore, that restriction already provides.

It is not beyond the hon. Gentleman’s faculties to demonstrate the benefit of prayer or religion in a wider sense. It could be argued that advancing religion for the general public might allow some members of the public to believe that they were gaining greater insight into the truth of life, the universe and everything; or that it might bring them greater comfort; or that it might even help them to recover from illness. It could be argued that encouraging them to perform an act of contemplation or meditation might bring peace of mind by the very process that they were going through. It does not seem difficult to demonstrate that religious charities could pass the public benefit test that is in the Bill.

I have some sympathy with the question that the hon. Gentleman put to the Government. Given the failure of my earlier amendment, we now have a public benefit test that advances little from existing charity law. However, for exactly that reason, given that most charities have no difficulty passing the test under existing charity law, they would have little difficulty in passing it under the Bill.

The test is designed to catch charities that are scams, in which there is obvious possibility of abuse or of the misleading or corruption of individuals by the organisation. Those kinds of organisations were failing  the public benefit test before. On that front, the hon. Gentleman’s amendment poses a practical risk. He is taking the principles from previous Acts and applying them to a new Bill, which might have unintended consequences. By putting in a deliberate statement that there will be a presumption that religious charities will satisfy the public benefit test, he may bring in religious organisations that are incontestably religious—whether or not they believe in a supernatural principle, or one god or many—but that would not have passed a more general public benefit test.

I am sure that we can all think of the most extreme examples, such as the Aum cult who gassed the Tokyo underground, the Branch Davidian sect who committed mass suicide in Guyana many years ago, or Satanists who would presumably regard themselves as religious. Under that blanket presumption, which enables them to evade any further public benefit test, those type of organisations might seek to claim charitable status. That is an extreme and absurd version of the argument but there is a risk that there may be unintended consequences to his amendment that he has not considered.

On the general principle of the amendment, the hon. Gentleman’s arguments are simply wrong. One of the Bill’s great attractions is that it seeks to modernise the structure of charity law. It will remove the antiquated and almost stereotypical preference for the relief of poverty and the advancement of religion and education as charitable objects that are somehow proper, with everything else having to pass a second test. I thought that equalisation and levelling the playing field among all charities enjoyed enormously wide support in the sector. I am aware of no significant opposition even from religious charities, and the provision has been supported even by the hon. Gentleman’s noble Friends in another place. I repeat the words of Lord Hodgson of Astley Abbots on 28 June. He said that all charities should

“have to meet a public benefit test, no matter what their purposes are”.—[Official Report, House of Lords, 28 June 2005; Vol. 673, c. 154.]

The hon. Gentleman is arguing that particular categories of charity, including private schools such as Eton, Harrow and Winchester, should be put back in a privileged position. The list of charities that he would relegate to a secondary position is quite impressive. The RSPCA, the Dogs Trust, the Shakespeare Globe Trust, the Dartington Hall Trust, Help the Aged, Age Concern, Youth Music, the Royal Society for the Protection of birds, Alcohol Concern and even the Police Dependants Trust about which he spoke earlier would all be relegated to that secondary status. That is quite wrong in principle.

One of the best things about the Bill and the reason why it has commanded such wide support in the voluntary sector is that it moves away from that slightly mediaeval approach toward a level playing field for all charities in a modern context. I shall oppose the hon. Gentleman’s amendment if he presses it to a Division.

Photo of Ed Miliband Ed Miliband Parliamentary Secretary (Cabinet Office)

We have had a most illuminating debate, I think. The starting point is whether we agree with the overall principle that all charities, in return for receipt of public money, should have to show public benefit. The Government and the Liberal Democrat Front Benchers agree with that principle, but I am sad to say that the Conservative Front-Bench spokesman does not appear to do so.

Photo of James Duddridge James Duddridge Conservative, Rochford and Southend East

On a point of clarification, what exactly does the Minister mean by receiving public money? Does he mean receiving it by not being taxed? That is somewhat different—a flow of funds in the opposite direction. That is fundamental.

Photo of Ed Miliband Ed Miliband Parliamentary Secretary (Cabinet Office)

The hon. Gentleman can dance on the head of a pin if he likes, but there is a significant cost to the public purse as a result of charities’ preferential tax status. It is clearly a cost, and in my view such preferential treatment relative to other organisations must therefore be justified. That is obvious.

Photo of Rob Flello Rob Flello Labour, Stoke-on-Trent South

On a minor point, does my hon. Friend agree that the label “charity” also makes the public more willing to donate money than the label “not-for-profit organisation” might?

Photo of Ed Miliband Ed Miliband Parliamentary Secretary (Cabinet Office)

My hon. Friend makes an important point. Part of the Bill is about ensuring public confidence in the charitable brand. We cannot say that the public should have confidence in the charitable brand if a whole set of classes of charity is presumed not to have to show public benefit. That is the existing law.

The hon. Member for Isle of Wight asked about the nature of the test. That will be determined on the basis of common law, but it is clear that at the moment, various charities are essentially not scrutinised because of that presumption. That is how it works in practice. The Government think that that is wrong. We think that the RSPCA, Eton college and a religious charity should all provide proof of public benefit.

Photo of Angela Watkinson Angela Watkinson Opposition Whip (Commons)

The Parliamentary Secretary might have received correspondence from various religious organisations on the subject. The Christian Institute expressed concern that the removal of presumption on the public benefit of religious organisations will give the commission

“greatly increased powers to reject the applications of religious bodies or even to de-register existing ones”.

Will the Minister reassure the Committee that the stringency of tests will not be greatly increased?

Photo of Ed Miliband Ed Miliband Parliamentary Secretary (Cabinet Office)

There is a difference. A test will be applied in practice that is not currently applied. The hon. Member for Isle of Wight quoted my point on Second Reading that it is clearly established in common law that the practice of religion and religious organisations is seen as providing a benefit to the public. It will be for the Charity Commission to make the final decision, and I cannot speak for it. That is a commonly accepted principle. It is clear that religious charities and organisations provide public benefit, and I see no reason why that should change. The hon. Lady can therefore reassure religious organisations.

Photo of Angela Watkinson Angela Watkinson Opposition Whip (Commons) 5:00, 4 July 2006

I am not absolutely certain about the status of the commission’s position paper, “Public Benefit—the Charity Commission’s Approach” or about the relationship between that paper and the Bill. Religious organisations believe that the commission will distinguish between acts of worship and services in  a public place and other forms of religious practice such as, for example, missionary work and the alpha course. Will the commission distinguish between acts of worship and services and other forms of religious practice? There is a concern that if public worship is not included, religious organisations might encounter difficulties under the Bill.

Photo of Ed Miliband Ed Miliband Parliamentary Secretary (Cabinet Office)

Reassurance can be offered on the point about missionary work, which has been raised before.

Let me return to the argument. There will be a public benefit test for every charity, and that is right. There is a specific issue about fee-charging charities, because they have to show that they provide benefit to a sufficient section of the population, and it will be for the commission to implement the provision in practice. My concern about the hon. Gentleman’s amendment is that, essentially, he seeks to provide a free pass to certain charities. His concern is probably motivated by independent schools, but the Conservative party is on its own not only in this Committee but in relation to independent schools. They welcome the Bill and say that it is the right thing to do.

I have a letter from Jonathan Shephard, head of the Independent Schools Council, to my right hon. Friend the Chancellor of the Duchy of Lancaster. It is important for the Committee to hear it. He says:

“Presumption of public benefit will be removed. This is of prime importance. Until now, the presumption has been that a body established for charitable purposes (including education) is charitable. This is (broadly) irrespective of performance. Now that the presumption is being removed, there will be no place for the lazy charity.”

Mr. Shephard goes on to say that in evidence to the Joint Committee, chaired by my right hon. Friend the Member for Darlington (Mr. Milburn), he referred to the fact that some charities needed to pull their socks up. He said that they will now have to do so, because of the removal of presumption, and the likely annual audit and return of public benefit that they will be required to provide.

I agree with Mr. Jonathan Shephard. Many private schools do incredibly good work with the state sector, but as he said to me, we aspire to ensure that as many schools as possible rise to the standards of the best in co-operation with the state sector. We are trying to break down the divide between private and state schools. That is important, and I would have thought that the Conservative party would welcome it. The Bill, by removing the presumption, will help to ensure that it happens. Mr. Jonathan Shephard of the Independent Schools Council, which represents the private schools, after all, agrees. He thinks it is a good idea. In fact, he has said that it is a very good Bill, so I cannot for the life of me see why the hon. Gentleman is worried. There will be a test, and the bar will be raised, because the test was not being implemented in practice before.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

The Minister has now said something illuminating—not that most of what he says is not illuminating. He says, “because the test was not being applied properly before”.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

I am sorry. The Minister used similar words. If that is what he is asserting, we are beginning to understand his point, but if the test was not being applied properly by the Charity Commission when it had only to look at cases that were brought to it, how on earth will it be applied properly to every charity in all three categories when it has to go systematically through every charity? Is the Minister saying that it was pure luck that the Charity Commission found the Finsbury Park mosque, applied the test and found that it failed?

Photo of Ed Miliband Ed Miliband Parliamentary Secretary (Cabinet Office)

The hon. Gentleman is bringing up all kinds of different issues. The Finsbury Park case was not about public benefit but we should not go down the Finsbury Park road because it will confuse an already somewhat confused picture.

My point is simple: at present there is a presumption of public benefit for educational, religious and anti-poverty charities. As I said on Second Reading, that presumption has, in effect, meant a free pass for charities in those categories. There should not be one law for one set of charities and another law for another set. It is right that every one should have to pass a public benefit test and that is what will happen. There is no great revelation in what I have said; it will be for the Charity Commission to implement that test and we will discuss in clause 4 how that will be done.

The hon. Member for Upminster referred to the illustrative material for this Bill that was published by the Charity Commission. When the Bill is enacted, it will publish general draft guidance for consultation with stakeholders, individuals and the public and that is the right way to go. It will then consider specific groups of charities and it will be for the Charity Commission and the chief charity commissioner to implement the proposal in practice, which is right. It is not for politicians to do so.

Several questions were asked about the precise test of public benefit and they are very legitimate questions. If my answers have been somewhat inadequate on the matter of the specific test for individual charities, it is because there is a body of case law that has been built up over time. On the advice of the National Council for Voluntary Organisations and other major charities, we made a decision on public benefit to stick with a flexible definition that was defined in common law.

That does not make things simple; it makes them incredibly complicated, especially for people who are not lawyers. We could have said, “For every charity and for every possible purpose, we politicians will provide a public benefit test,” but that would not have been the right way to proceed. However, the implications are that we have to rely on the wisdom of the courts and the Charity Commission. When enacted, the Bill will be implemented on the basis of the established body of law.

The amendment is misconceived. It troubles me, because it puts the hon. Member for Isle of Wight and the Conservative party outside the mainstream of opinion on the matter. I still do not fully understand the motivation behind the amendment; it is right that all charities should have to pass the public benefit test and I urge the hon. Gentleman to ask leave to withdraw the amendment.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

I am grateful to the Minister for the way in which he has responded to the amendment. The motivation is to scrutinise the consequences of the Bill. I am by nature someone who is concerned when everyone agrees because it may mean that we have scrutinised the proposal insufficiently.

I am particularly concerned about the imposition of an additional responsibility on small charities. I originally intended to table one amendment that would have overturned the abolition of the presumption in all three cases. As a result of what Ministers said on Second Reading, I decided to table two separate amendments because if the independent schools think that it is all right, I see little point in arguing on their behalf that it is all wrong. However, I have certain concerns about the position of Mr. Jonathan Shephard and the independent schools, to which I shall return.

As my hon. Friend the Member for Upminster has suggested, I am concerned that the consequence of the abolition of the public benefit would be onerous and would establish a higher level of test. The Minister has persuaded me that it will not establish a higher level of test in the cases of the abolition of poverty and the advancement of religion.

The reasons why people are concerned are set out, as my hon. Friend mentioned, quite well in the Christian Institute paper. It stated:

“’‘Public Benefit - the Charity Commission’s approach’ is very secular in tone. It states that that public benefit must be assessed ‘in the light of modern conditions’ and that keeping up with ‘modern society’ is required if a charity is not to have its charitable status revoked.”

It was noted that that is contained in paragraphs 15, 23 and 24 of the Charity Commission document.

In the nature of things, some people who are religious think that there is something wrong in modern society and that not everything is right about it, and they point out that major religions are not modern and that one cannot interpret belief in the light of modern society. Plenty of people will do that, some of whom are in the Episcopal Church in the United States of America, but others do not, some of whom are in the Anglican Church in Nigeria. Without going too far down that road, such people are concerned that they will be told to modernise in order to comply with the new thinking of the Charity Commission. The Minister has gone some way towards setting my mind at rest.

Photo of Ed Miliband Ed Miliband Parliamentary Secretary (Cabinet Office)

The Charity Commission has had a rough time today. There is no sense in its guidance that modernisation means somehow abandoning the religious principles that these organisations rightly want to uphold. In fact, my hon. Friend the Member for High Peak made the point that, hundreds of years ago, such provisions might have been applied only to Christian organisations. Now, we are talking about a wider set of religious purposes. That is what modernisation surely means in this context.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

We may find that modernisation involves some of the religions to which the hon. Member for Cheltenham rightly referred disparagingly, so I hope it does not. I accept what the Minister is saying, but I hope that he will accept that the reason for scrutinising these passages with care is because we need to understand the consequences of invoking them.

I hope the Minister will also accept that although the cost to the public purse, by his definition, of the independent schools is about £100 million, they put considerable additional money back into society in the form of scholarships and so on. I am sure that he will accept that. Although the overall cost of charities to the public purse is in excess of £2.8 billion, there is a value of what charities do in return for it. Perhaps it is a value that has not been quantified; perhaps it is impossible to quantify. In talking as I think the hon. Member for High Peak did about the cost to the public purse of charities, we should recognise, as I know the Minister does, that there is a benefit to the public purse of charities as well.

I am not arguing for a free pass to charitable status for charities; I am arguing that it is a more efficient way of regulating—it might be more efficient in the case of all charities, but this is the position we are discussing—to have a system whereby a charity that fulfils the basic qualifications can be deemed charitable unless someone says, “Look here, that organisation is not doing its job properly” than to have one where charities have go through certain hoops before they are allowed to become a charity.

Photo of Martin Horwood Martin Horwood Shadow Minister (Environment, Food and Rural Affairs)

The hon. Gentleman must realise that efficiency is not the only issue at stake. A private preparatory school in my constituency without great grounds or theatre facilities struggled to think how it might pass a future public benefit test, and it decided to share one of its music teachers with local state schools. That was a laudable response, but that step is being taken only as a result of the possibility of a public benefit test. Can the hon. Gentleman possibly be arguing against that?

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight 5:15, 4 July 2006

I happen to think that education is a public good. It does not matter that I benefit from the education, because the world benefits from my being better educated. In fact, it would probably benefit if I were better educated. The Chancellor of the Exchequer says that education is a public good: that is the argument he puts forward for taxing us to put money into schools. That is the argument advanced by the Make Poverty History lobby for paying for more people to be educated in the developing world. Education is a public good, and that is a benefit. I accept and am glad that the school that the hon. Gentleman mentioned is doing something rather more useful than building rowing trenches near Slough to demonstrate public benefit. It is important that children are educated. It does not matter if some can afford a better education for their children than others; it is good that they are educated.

Photo of Ed Miliband Ed Miliband Parliamentary Secretary (Cabinet Office)

I fear that, although he is trying to close the divisions, the hon. Gentleman is opening them up. Mr. Jonathan Shephard says that the indirect benefit that private schools provide in relief to the public purse is not enough, in his view, to justify their charitable status. That suggests that education on its own is not enough; in his view there needs to be co-operation. Does the hon. Gentleman disagree?

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

I did not think that that was what Mr. Shephard was asserting. I thought that he was saying that there should be additional benefit, not that education was an indirect benefit. I think that that is so, although I cannot speak for him. My view is that it is beneficial if more people are better educated. That should be enough to justify an educational organisation being charitable.

Photo of Ed Miliband Ed Miliband Parliamentary Secretary (Cabinet Office)

No doubt Jonathan Shephard will be pleased about his role in this Committee. The question and answer document issued to Members of Parliament by independent schools asks,

“Is indirect public benefit through savings to the taxpayer enough to meet public benefit requirements?”

The answer is:

“Indirect public benefit is not enough on its own to ensure charitable status. There are many reasons...which support the charitable status of independent schools, of which indirect public benefit, though a very large benefit, is only one. Savings to the taxpayer, however large, will not be enough on their own to make a school (or hospital, or retirement home) charitable.”

That is Jonathan Shephard’s view and that of the Independent Schools Council.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

I am sorry; I misunderstood the Parliamentary Secretary. That is Mr. Shephard’s view. However, we are not talking about the indirect benefit of savings to the taxpayer, but the direct benefit to the public of more people being better educated. That is the benefit.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

If the hon. Gentleman really thinks that it is worth it.

Photo of Tom Levitt Tom Levitt PPS (Rt Hon Hilary Benn, Secretary of State), Department for International Development

If he is arguing that all education, however or wherever it is delivered and whoever it is delivered by, is by definition a public benefit, notwithstanding how restrictive it is regarding the number of people who can engage in it, would he say that state schools should have charitable status? Should a company providing supply teachers, or individuals who set themselves up as private piano teachers, have charitable status? If he is saying that education must always in every context have charitable status, he will make spending commitments for a future Government that will be impossible to keep.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

Many state schools have charitable status. For example, all grant-maintained schools were exempt charities. I do not know whether the same is true of foundation schools, but I suspect that that is so. My argument is that education is a public good, and that is generally accepted. I was not asserting that, just because someone says that they are educating, there should be the irrebuttable presumption that it is charitable. It is the rebuttable presumption that matters.

We are at the end of a useful and interesting debate—at least, it was interesting to me—and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 ordered to stand part of the Bill.