Clause 11

Charities Bill [Lords] – in a Public Bill Committee at 10:45 am on 11 July 2006.

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Changes in exempt charities

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

I beg to move amendment No. 94, in clause 11, page 15, line 8, leave out from ‘omit’ to end and insert

‘from “of” to end of paragraph and insert “England and Wales”.’.

Photo of Roger Gale Roger Gale Conservative, North Thanet

With this it will be convenient to discuss the following amendments: No. 165, in clause 11, page 15, leave out lines 16 and 17.

No. 95, in clause 11, page 15, line 17, at end insert—

‘(7B) After paragraph (b) insert—

“(c) any church, religious congregation, institution, or group of institutions which Her Majesty declares by Order in Council to be an exempt charity for the purposes of this Act.”’.

No. 96, in clause 11, page 15, line 21, leave out ‘National Lottery Charities Board’ and insert ‘Big Lottery Fund’.

No. 97, in clause 11, page 15, line 31, at end insert—

‘(10A) In paragraphs (c) and (x) no recommendation to make legislation is to be made to Her Majesty in Council unless a draft of the instrument has been laid before, and approved by resolution of, each House of Parliament.’.

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

I am afraid that I have left my copy of the 1993 Act elsewhere, so hon. Members will have to bear with me. Amendment No. 94 is intended to tidy up the messy area of exempt charities—a matter that I and many in the sector had hoped would be addressed by the Bill. There are historical anomalies in the list of exempt and non-exempt charities in the 1993 Act, such as the references to Winchester and Eton, Oxford, Cambridge, Durham and Queen Mary and Westfield colleges. Those references are now out of time. It is logical to replace the specific references with a reference to the universities and colleges of “England and Wales”, as the amendment proposes. That would lend complete consistency to the matter of whether universities are exempt charities.

Amendment No. 95 would extend, on a fair and equitable basis, the special treatment of the Church Commissioners and institutions administered by them. It would provide the opportunity for the Privy Council to make an exempt charity of any Church, religious congregation or institution or group of institutions through an Order in Council. That may have useful benefits for the non-established Churches—the Church in Wales may fall into that category—in respect of which the Bill appears to impose a registration requirement on far more organisations and congregations at local level than is the case for the Church of England. Again, there is a need for consistency and equity, which the amendment seeks to address.

Amendment No. 96 relates to the rather strange clause 11(9), which omits the National Lottery Charities Board without replacing it with its successor organisation. I am not clear why the Big Lottery Fund, the successor organisation, should not be treated in the same way as the National Lottery Charities Board was. I am looking forward to hearing the Minister’s comments on that.

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

I believe that the National Lottery Bill is currently being considered in another place, so the Big Lottery Fund does not yet exist. The fund only comes into legal existence when the National Lottery Bill has been passed.

Photo of Martin Horwood Martin Horwood Shadow Minister (Environment, Food and Rural Affairs) 11:00, 11 July 2006

The hon. Gentleman may be technically correct, although that does not stop the Big Lottery Fund from having its own notepaper and status, nor from issuing grants for several years. Nevertheless, it seems logical for the two Bills to be consistent. Without a copy to hand I am not sure whether the National Lottery Bill amends this Bill or the previous Act, but it seems logical—at least for this legislation—to refer to the institution that we know will be set up by the time that this Bill becomes law. If the lawyers are worried about the anomaly it might be just a question of getting the Royal Assents in the right order.

Amendment No. 97 is in the spirit of my earlier amendment and would permit alterations to the exemption of charities to happen only after the relevant statutory instrument had been laid before each House, and approved by resolution of each House. It reflects the importance of exempt status and the significance of that status for the affected institutions.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

My amendment would omit the provision on page 15 that omits the Church Commissioners. I understand that the reason for that omission was that nobody could think of anyone to be the commissioners’ principal regulator. I am not sure if that is true, but the commissioners are quite a respectable body of people. [Interruption.] Some of them are, anyway. Mr. Speaker is a Church Commissioner, for example. On the other hand, so are the First Lord of the Treasury, the Lord Chancellor—if he continues to exist—the Lord President of the Council, the Secretary of State for the Home Department, the Secretary of State for Culture, Media and Sport, the Archbishop of Canterbury, the Archbishop of York, the hon. Member for Middlesbrough (Sir Stuart Bell), three other right reverend prelates in another place, and one who is not in the other place, and someone called Canon P.N.E Bruinvels; some of us have heard of him. Along with them are a number of luminaries elected by the General Synod.

Photo of Peter Bottomley Peter Bottomley Conservative, Worthing West

For the sake of clarity, our former friend Peter Bruinvels is a lay canon of Guildford cathedral.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

I am grateful for that confirmation, though it somewhat undermines parts of my original argument. None the less, the commissioners are mostly a respectable bunch of people, and I see no reason why they should be omitted from being an exempt charity—for all the reasons that the hon. Member for Cheltenham gave in respect of the church in Wales.

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

Let me deal with this clutch of amendments as briefly as I can. It is a rare occurrence but I think that the hon. Member for Cheltenham simply misunderstood what amendment No. 94 would do. So far as we can see, the only effect of it would be to omit the colleges of Winchester and Eton whose  exempt status is removed by the Bill. I know that that is not the intention of his amendment, but that is the effect.

Let me clarify what the clause does on higher education institutions—the specific issue that he raised. Higher education institutions, with the exception that I shall describe, will for the most part remain exempt charities subject to principal regulation by the Higher Education Funding Council for England. There is a particular issue around the colleges and halls of Oxford, Cambridge and Durham, which have no relationship with the HEFCE and which therefore need a different principal regulator. That regulator will be the Charity Commission. Had we included that in the Bill, however, it would have made the Bill a hybrid Bill, which would further have elongated the process of enacting it. We will therefore make provision for the colleges and halls of Oxford, Cambridge and Durham to be regulated by the Charity Commission in secondary legislation. That is the long and the short of the position on universities. The hon. Gentleman’s amendment is unnecessary and would not achieve its purpose.

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

I am not entirely sure that the Minister is correct, although I am struggling without a copy of the 1993 Act in front of me. [Interruption.] I am grateful to the hon. Member for Isle of Wight.

Photo of Peter Bottomley Peter Bottomley Conservative, Worthing West

On a point of order, Mr. Gale. Is the problem partly the distinction between the amendment to the Bill or that the hon. Gentleman may be making an amendment to the 1993 Act?

Photo of Roger Gale Roger Gale Conservative, North Thanet

I do not think that what the hon. Gentleman said is a point of order for the Chair.

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

I am grateful to the hon. Gentleman for his intervention. I am aware that I am amending the schedule under the 1993 Act. The amendment that was tabled was an amendment to schedule 2. I am sure that that was intended.

Photo of Roger Gale Roger Gale Conservative, North Thanet

Shall we allow the hon. Gentleman time to gather his thoughts and perhaps intervene later?

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

Again in the spirit of good faith, I hope that the hon. Gentleman accepts my assurances. I spent a long time last night trying to understand the nature of his amendment. It rather ruined my night’s sleep. However, having talked to officials this morning, I concluded that I am indeed correct and that his amendment is not fit for purpose. It would not achieve what he wants, apart from in relation to Winchester and Eton, which I am sure he wants to be regulated by the Charity Commission. I am sure that he does not want them to be exempt. I have panoply of choices before me.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

This may be an unfair question, but why would the omission of the colleges and halls of Oxford, Cambridge and Durham universities make the Bill a hybrid Bill, whereas the omission of the colleges of Winchester and Eton would not?

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

It is an unfair question, but I shall try to answer it none the less. I understand that Winchester and Eton are covered by the Bill on the same footing as other schools, whereas if we single out the colleges and halls of Oxford, Cambridge and Durham, they will be put on a different footing from other higher education institutions. It is necessary to put them on a different footing because they do not have a relationship with HEFCE, nevertheless it would make such a measure a hybrid Bill. That takes us to secondary legislation. Because there will be a discrete class for the purposes of any order that is made, issues of hybridity will not arise because such matters will be treated as a distinct class and will not be compared with other higher education institutions. I hope that I have satisfied the hon. Gentleman.

Photo of Peter Bottomley Peter Bottomley Conservative, Worthing West

Is the secondary legislation the power that is included under subsection (12)(a)?

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

That was definitely an unfair question. Yes, the hon. Member for Worthing, West is correct. I hope that I have dealt with amendment No. 94.

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

I am grateful to the Parliamentary Secretary for the extreme clarity that he has brought to this discussion and his confirmation that universities will remain exempt charities under the 1993 Act. Are there implications for the National Union of Students? Can it qualify for charitable status in some form or another? I know that several hon. Members have expressed interest in that.

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

My hon. Friend asks an important question. Whatever their views on the National Union of Students, it may surprise some Opposition Members to learn that it currently has charitable status. The matter has been tested in the courts and we expect that the National Union of Students will continue to enjoy charitable status.

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

Now that I have gathered my thoughts on the amendment, the proposal would create exemption for all the universities of England and Wales, including those of Oxford and Cambridge, but that does not extend to the colleges and halls, which are not universities and are separate legal institutions. Can the Minister clarify who the regulator is of the universities of Oxford and Cambridge, as opposed to the colleges and halls which form parts of those universities and are legally separate bodies? I will then accept his reassurances on that amendment.

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

That is not so much an unfair question as an incomprehensible one. To the extent that I understand the question, my answer is—if I may say so, I think that the hon. Gentleman misunderstands the 1993 Charities Act—that the universities of England and Wales currently enjoy exempt status. What will change as a result of the Bill is that we will bring in a principal regulator, HEFCE for the most part, which will regulate them for the purposes of charity law.

Whatever the nature of his ambitions for his amendment, I can assure him that it is not fit for purpose. The  universities of Oxford and Cambridge have a relationship with HEFCE and will be regulated by HEFCE as their principal regulator. I hope that he is satisfied with that and that I can move on to amendment No.95.

Amendment No.95 also stands in the name of the hon. Member for Cheltenham. Although it is meaningful, I confess that I do not understand why he wants to do it. It would allow an Order in Council to be made to declare an exemption for Churches and other religious organisations and make them exempt charities. At a time that we are driving to increase the accountability of other exempt charities, I cannot understand why he wants to do it.

On amendment No.95, I do not understand why he thinks that the Privy Council is an appropriate body to make those decisions. Does he want to give that power to Ministers anyway? I do not understand why he wants to give exempt status to Churches.

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

I am content with the intention of the Bill to bring Churches out of exempt status and under the registration of the commission. However, there are specific examples—I mentioned the Church in Wales—where that is not having the intended effect and is adding a level of bureaucracy to local, parochial Church Councils that does not apply to the Church of England purely because of their different institutional status.

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

I may be able to look into that. My understanding is that many Churches will have excepted status. The provisions under the Bill mean that only those excepted charities, with incomes over £100,000, will be required to register. I hope that those particular circumstances, which I am happy to look into, will be catered for by that.

It is convenient to deal with the matter of amendment No.165 in this context because it is about the Church Commissioners. I agree with what the hon. Member for Isle of Wight says about the Church Commissioners and, for the most part, that it is an august body. Again, I am not entirely convinced that the amendment is necessary.

The Church Commissioners will now be regulated by the Charity Commission. We have had discussions with the Church Commissioners. They had some concerns. Those concerns have been satisfied. Good order will prevail. They will be able to continue with their work. Therefore, I am not completely convinced that this amendment is necessary.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

The responsibility of the principal regulator to an exempt charity is different from the responsibility of the Charity Commission to a non-exempt charity. The commission’s responsibilities are set out in section 7 on page 5, new section 1B of the 1993 Act and include five objectives. The principal regulator of an exempt charity has only one comparable objective, which is that of compliance. Therefore, he is introducing a greater level of regulation in to those charities that cease to be exempt, than would otherwise be the case.

Photo of Ed Miliband Ed Miliband Parliamentary Secretary (Cabinet Office) 11:15, 11 July 2006

That may be correct—a charity does cease to be exempt. However, it is part of the wider discussion on the level of obligations that charities face, whether it be the Church Commissioners or other charities. I do not understand why the powers that the Charity Commission will have in relation to the Church Commissioners, which will be on a level footing with the powers that they have in relation to other charities, will be particularly onerous. As we shall be discussing, the Charity Commission also has powers in relation to exempt charities, though subject to its relationship with the principal regulator. I hope that that satisfies the hon. Gentleman.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

I accept that it is an explanation. What I am concerned about, however, is how many organisations will cease to be exempt as a result of clause 11(7).

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

I suggest that I write to the hon. Gentleman with a list. Let me briefly explain the process. In seeking a level playing field so that there would no longer be exempt charities that were not subject to regulation save for charity law purposes, the Government sought in all circumstances to find a regulator—other than the Charity Commission—which would be an existing regulator having a relationship with the charity concerned. In a number of cases it proved impossible, after discussion with the relevant charities, to find a suitable regulator other than the Charity Commission. The default position was therefore to move to the Charity Commission. I am happy to send the hon. Gentleman a list of the organisations that will now be regulated by the Charity Commission. I hope that that is satisfactory.

Amendment No. 96 concerns the National Lottery Charities Board and was tabled by the hon. Member for Cheltenham. The hon. Gentleman is correct that the National Lottery Charities Board is an exempt charity. It is being abolished and will be replaced by the Big Lottery Fund, which will not be a charity. That is to do with the way in which the Big Lottery Fund is being established. I believe that it is a company limited by guarantee.

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

We have established at length, and we may do so further later on today, that being a company limited by guarantee does not exclude one from charitable status.

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

Indeed. I am not an expert on the Big Lottery Fund, though the hon. Gentleman might be. However, it will not be a charity and it is not the intention that it be a charity. The point therefore does not arise. The hon. Gentleman may not have had it in mind when we tabled his amendment, but it turns out that we are removing the National Lottery Charities Board from the list of exempt charities in the National Lottery Bill which is currently before the House of Lords. That is being dealt with in that Bill, so I suspect that we shall in any case need to table an amendment for the purposes of tidying up of the process.

On the amendment that concerns affirmative and negative resolutions, I repeat what I have said before. The Committees of both the House of Commons and the House of Lords have examined the matter and are satisfied with the procedures that the Government propose, so I hope that the amendment will be withdrawn.

Finally, I believe that I misspoke when I said that the National Union of Students is itself charitable. The key point is that student unions are charitable but the NUS itself is not necessarily so. I can see some relief about that on the faces of hon. Gentlemen opposite.

Photo of Peter Bottomley Peter Bottomley Conservative, Worthing West

May I follow on from what the Parliamentary Secretary said rather than attempt a debate that the clause stand part? He mentioned various powers—I refer here to not to groups of charities but to individual ones. Does the Minister have the power under subsection 12(b) to help officially change the name of a charity? For example, if Queen Mary and Westfield College drops the “and Westfield” part of its name legally, as well as in common usage—it is now called Queen Mary College, but I am not sure whether it has changed its name officially—will the Minister be able to update matters by order? If not, might I suggest that he consult with people to consider how it can be done in some other way? For a college to change its name and have to be deregistered and re-registered as a new one would be hard way in which to go about things. That might be something that the hon. Gentleman will consider later. I do not want a response straightaway.

As for the Welsh Church, it will be interesting to know whether the Parliamentary Secretary has consulted or will consult with its main committee. That might be a good avenue to go down to see whether the assurances that have been given will work in practice.

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

I or my officials will be happy to talk to the committee to make sure that it is content. I do not believe that Ministers can change the name of charities, but charities can do so in consultation with the Charity Commission. We are coming to some clauses that deal with those issues.

Photo of Peter Bottomley Peter Bottomley Conservative, Worthing West

If the charity commissioners have the power to change under the schedule, I am reassured. If they do not, there may be a problem.

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

I shall investigate the matter and come back to the hon. Gentleman.

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

I am not entirely reassured by everything that the Minister has said, but I hope that we have explored the issues surrounding the amendments in sufficient detail for him now to consult further on the implications of some aspects of the Bill, especially the Big Lottery Fund. It strikes me as surprising that it will not have charitable status. It seems a slightly unhealthy sign that its focus is moving even further away from funding charities as the National Lottery Charities Board did. I raised that worry when we were debating the Lottery Bill.

As for the status of the universities of Oxford and Cambridge as opposed to the colleges and halls, I am somewhat reassured by what the Parliamentary Secretary said. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 11 ordered to stand part of the Bill.

Clause 12 ordered to stand part of the Bill.