Clause 4

Charities Bill [Lords] – in a Public Bill Committee at 5:15 pm on 4 July 2006.

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Guidance as to operation of public benefit requirement

Question proposed, That the clause stand part of the Bill.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

Well, my contribution will be. Some months ago, members of the Bill team at the Home Office gave me the benefit of their advice on the process in respect of the guidance on the operation of the public benefit requirement. I should like to read out my understanding of what that is and ask the Minister whether I have it right.

An organisation can become a charity if it comes under one of the charitable purposes listed under clause 2(2) and meets the public benefit test. Despite the desires of the hon. Member for Cheltenham (Martin Horwood), there is no presumption that any purpose is for the public benefit. Public benefit will not have a statutory definition and will continue to be interpreted according to case law.

The Charity Commission must issue guidance on the meaning of public benefit, and that will be updated when necessary. That guidance is not legally binding; I understand “guidance” to mean that charities must have regard to it and take account of it when deciding what they will do, but that they are not obliged blindly to follow it.

The commission’s objective is to promote awareness and understanding of the operation of the requirement that a charity must be for the public benefit. Before the commission issues guidance, it must undertake a consultation process. Charity trustees must have regard to any guidance published by the commission when they make decisions to ensure that their activities remain for the public benefit.

On 9 February 2005, Baroness Scotland told the Grand Committee in another place that the commission

“will have to explain in its guidance what the public benefit requirement is—in other words, the nature and meaning of the will have to explain in its guidance how it proposes to operate or apply the requirement in practice to charities of various types and will have to carry out the public and other consultation mentioned in Clause 4”— she omitted to say that it would presumably have to take account of the response to the consultation—

“Fourthly, it will have to disseminate the guidance”—[Official Report, House of Lords, 9 February 2005; Vol. 669, c. 103.]

I have put my point in those terms because I find it difficult to describe the process off the cuff. Does the Minister think that I have it right, and does that include a change to the public benefit test, as set out in clause 3(3)?

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

My understanding is that the hon. Gentleman is right. If his information came from formerly Home Office, now office of the third sector, officials, I am sure that it is right. [Interruption.] The letter did not  come from them. Nevertheless, the hon. Gentleman’s description of the process is broadly right.

The clause gives the commission a duty to carry out whatever public and other consultation it thinks appropriate before issuing the guidance. My understanding is that the commission is very keen to provoke widespread public discussion about the nature of public benefit in general and how it will be applied. That is a good idea.

A number of hon. Members, including my right hon. Friend the Member for Cardiff, South and Penarth, emphasised on Second Reading that they expected the commission to take into account views expressed in Parliament about how it should approach the whole process. I agree with that too.

The commission has published its illustrative guidance; we can expect that only to be illustrative before the Bill becomes law because, as the hon. Gentleman emphasised, the process is new for the commission, and it is important that it undertakes it well and properly. In the guidance, the commission says that it will interpret the public benefit requirement in the light of three criteria: case law, modern conditions and the removal of the presumption of public benefit. It says that after the Bill is enacted, it will issue a new version of the guidance as an exposure draft for public consultation. Having published that overall guidance, it will, as I said, look at specific areas. It is for the commission and the chief commissioner to move forward on that basis. I hope that that is helpful for the hon. Gentleman.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

That is indeed helpful. I should also acknowledge that my research assistant wrote the letter, not the Home Office.

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

On that basis, I propose that the clause stand part of the Bill.

Photo of Peter Bottomley Peter Bottomley Conservative, Worthing West

First, I apologise for not being here earlier, but I have just come back from a meeting of the Organisation for Security and Co-operation in Europe in Brussels, and the train was delayed. I am especially sorry to have missed the consideration of clause 2, which links to this clause.

Clause 4 is about guidance on the public benefit requirement. There have been several recent communications from Churches Together in Britain and Ireland asking what guidance will be given on the public benefit test for religion when the presumption that religion is a public benefit goes. I am not suggesting that the Minister can necessarily give a full and detailed answer about what the Charity Commission will put in its guidance, but he should offer to go into rather more detail either now or on Report.

First, the Minister should say how the Charity Commission will be expected to deal with non-religions, such as the British Humanist Association, which might carry out some of the functions normally carried out by churches or faiths, but which, by definition, are clearly not religions. Secondly, he might wish to liaise with the Charity Commission—the body to which the clause relates—to put together detailed considerations on how the commission will respond to Churches Together in Britain and Ireland and other  organisations, including parts of the Muslim Council of Britain, which have made representations. He and the Charity Commission might have had time to consider them, but if they have not, it is important that they make it clear that there is no intention of excluding one of the great faiths of the world, Islam, from providing the public benefit that it clearly does.

I do not want to get on a late debating train on the issue of education, but most of us who support arts organisations—whether performing arts or others—think that, as long as it is not for profit, the question of art not being a public benefit is not a problem. Quoting too much from the Independent Schools Information Service on the question of whether education is a public benefit puts weight where it should not be. The Charity Commission should be able to say that education is of direct benefit and, if and when the direct benefit is not sufficient, it should specify when an indirect benefit would be needed as well.

Photo of Roger Gale Roger Gale Conservative, North Thanet

Order. The hon. Gentleman places me in a slightly difficult position. I fully appreciate, as does the House, that hon. Members have duties in other places, but the hon. Gentleman will find that much of what he has just raised was covered in earlier debates, and it might be to his advantage to study Hansard and then return to the issue. I am not seeking to curtail the debate, and if the Minister wishes to respond briefly to the points that have been raised in the spirit in which they have been raised, he may of course do so. Strictly speaking, however, they fall outwith the scope of the clause stand part debate.

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

I have great respect for the hon. Member for Worthing, West (Peter Bottomley), so I will definitely respond.

Let me briefly cover the hon. Gentleman’s point about religion and the public benefit test. He is completely right that religious organisations need to be given reassurance and confidence that those that have charitable status will continue to enjoy it and that the Bill does not affect their status. We can give them that assurance in broad terms. The hon. Gentleman’s comments about the handling of specific religious organisations will also have been heard by the Charity Commission.

Photo of Peter Bottomley Peter Bottomley Conservative, Worthing West

I understand your remarks, Mr. Gale, and I shall not try to detain the Committee. In the early part of my speech, however, I asked whether the Minister would consider whether services that were offered by an openly non-religious body and which were often also provided by faiths could be regarded as charitable. That is not a test question or a trick question, but a serious issue, which deserves some thought.

To respond to the Minister’s kind remarks, let me add that he might want to consider between now and Report whether relying on Charity Commission guidance is sufficient to deal with the point that I raised. Giving an assurance is one thing but, if it were not given in clear guidance by the Charity Commission and it is not in the primary legislation, there will still be apprehension.

Photo of Roger Gale Roger Gale Conservative, North Thanet

Clearly, the Minister has heard what the hon. Gentleman has said.

Question accordingly agreed to.

Clause 4 ordered to stand part of the Bill.