Clause 36

Charities Bill [Lords] – in a Public Bill Committee at 4:30 pm on 11 July 2006.

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Remuneration of trustees etc. providing services to charity

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

I beg to move amendment No. 30, in clause 36, page 34, line 24, after ‘out’, insert ‘in advance’.

Photo of Joan Humble Joan Humble Labour, Blackpool North and Fleetwood

With this it will be convenient to discuss the following amendments: No. 31, in clause 36, page 35, line 10, leave out ‘or under a contract of employment,’.

No. 32, in clause 36, page 35, line 46, at end insert—

‘(ba) a person having a relationship with a trustee akin to that of a spouse or civil partner with a trustee or any person falling within paragraph (a);’.

No. 33, in clause 36, page 36, line 2, after ‘(b), insert ‘or (bb)’.

No. 34, in clause 36, page 36, line 5, leave out ‘, (b) or’ and insert ‘to’.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

This is a series of short amendments to clarify the position of paying trustees. They have special responsibility to safeguard a charity’s assets. I welcome the statement by the noble Lord Bassam in Grand Committee in another place. He confirmed that the Government were

“trying to preserve the essence of the voluntary principle of trusteeship” and he said that the conditions of payment to a trustee were

“designed to ensure that it is proportionate, protects against conflicts of interest and is in the best interests of the charity.”—[Official Report, House of Lords, 16 March 2005; Vol. 670, c. GC515.]

Amendment No. 30 would simply require that any agreement about payment should be made “in advance” of that payment being made or, indeed, the work being undertaken for which the payment might be made. That seems a sensible principle and is, I believe, one of the proposals of the Joint Committee, at paragraph 259.

Amendment No. 31 would exclude charities from employing their own trustees. It is one thing to have a short-term relationship with a trustee who is perhaps doing a little plumbing for the benefit of the charity; it is another thing entirely to have a trustee as a permanent or, indeed, temporary employee of the charity.

Amendments Nos. 32 to 34 deal with unmarried partners or, as I put it, people in a relationship akin to a marriage or civil partnership. There are now many relationships that are not recognised by law, but which will have an influence that might be perceived as inappropriate when it comes to the appointment of people to do jobs, to work for charities and so on. The amendments are designed to deal with that.

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

The hon. Gentleman was admirably brief; I shall be slightly less brief in trying to answer his questions, but I will be as brief as I can. On amendment No. 30, to clause 36, I understand that there are two aspects to his concern. First, he is worried that there would not be an agreement in place when the payment was made and therefore the agreement would be made retrospectively. Secondly, he is worried that there would not be an agreement in place when the service was provided and the agreement would be made retrospectively—after the service was provided. I think that those are his two concerns.

Let me deal first with the hon. Gentleman’s first concern, which relates to the principle that the agreement needs to be in place before the payment is made. I can certainly reassure him on that point, because clause 36(2) states:

“If conditions A to D are met in relation to remuneration within subsection (1), the person providing the services...is entitled to receive the remuneration out of the funds of the charity.”

Condition A is that there is an agreement set out in writing, so I hope that that avoids the problem that he is getting at, which involves a payment being made and an agreement being agreed post hoc—after the event.

The second worry—which the hon. Gentleman may not have had—is also covered, because the clause refers to an agreement under which the relevant person

“is to provide the services in question”,

which suggests that the agreement has to be made before the services are provided. I hope that that satisfies the hon. Gentleman on that point.

On amendment No. 31, I think that we have the same end in view, but I advise the hon. Gentleman that taking out the words

“or under a contract of employment” would get charities into precisely the pickle that we do not want to get them into, which is that, under the clause, services can be provided that are contractual services. The words

“or under a contract of employment” are in this clause, covering the remuneration of trustees providing services, precisely so that it will not be about contracts of employment. I hope that that explanation satisfies the hon. Gentleman.

I assure the hon. Gentleman that his interesting point about cohabiting couples or people is not immediately obvious in the Bill. However, I hope that he will be satisfied on reading new section 73B(6) of the 1993 Act in tandem with paragraph 171(5) of schedule 8 of the Bill, which would add paragraph 2(3) to schedule 5 of the 1993 Act:

“Where two persons of the same sex are not civil partners but live together as if they were, each of them shall be treated for those purposes as the civil partner of the other.”

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight 4:45, 11 July 2006

That appears to deal with people of the same sex, but not with people of opposite sexes.

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

That is an interesting point. We would not want to be discriminatory.

Photo of Peter Bottomley Peter Bottomley Conservative, Worthing West

While the Minister is looking through his papers, he might discover references to a stepmother and a stepson.

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

I do not believe that it deals with that eventuality. If I endeavour to take this away and scrutinise whether it is about cohabiting partners of opposite sexes, I hope that the hon. Member for Isle of Wight will be satisfied and will ask leave to withdraw the amendment.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

The Parliamentary Secretary referred earlier in his remarks on amendment No. 30 to something that I fear happens from time to time in voluntary organisations. Sometimes somebody does a piece of work that needs doing and then says, “Hey, you ought to pay me for that!” Voluntary organisations can be run in such an informal way and that can lead to some considerable dispute. It is worse still when such a dispute involves a trustee: first, he will know the other trustees pretty well and, secondly, he is not entitled to the money. That is the point that I was endeavouring to clarify, because I do not think that it is dealt with. Such a situation could be set out in writing subsequently and, therefore, condition A could be met subsequent to the work being done.

I am not sure whether the Minister is inclined to intervene to correct me, but that was my concern. I accept that there is a requirement that the matter should be set out in writing before the payment is made, but is there a requirement for it to be set out in writing before the work is undertaken?

If the Minister has no other light to shed on this matter, I shall withdraw the amendment.

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

I have some light to shed on cohabitation. Let me correct the record on that before I return to the hon. Gentleman’s point. Schedule 5(2)(2) of the 1993 Act is the saviour on this matter, because it says:

“For the purposes of paragraph 1(e) above a person living with another as that person’s husband or wife shall be treated as that person’s spouse.”

I am reading from page 115 of Jean Warburton’s text and commentary, for those hon. Members who wondered. I believe that that schedule also covers  cohabitation and children, including a stepchild and an illegitimate child, so there is reassurance on that point.

Returning to the hon. Gentleman’s point about the original amendment, the key part of clause 36(3) defines the condition

“under which the relevant person is to provide the services in question” regarding the agreement. That suggests that the agreement needs to be in place before the services are provided. I hope that that reassures the hon. Gentleman.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

It does. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 36 ordered to stand part of the Bill.

Photo of Peter Bottomley Peter Bottomley Conservative, Worthing West

In the past some charity trustees have been remunerated. A good example is the Wellcome Foundation, which disposes of very large sums of money and which requires dedicated trustees who can give a great deal of time. When I became chairman of the council of the Church of England Children’s Society some 23 years ago, my predecessor had been remunerated, but a special meeting had been required to allow that. I hope that trustees may have such arrangements made in appropriate circumstances, but that such special circumstances are not very frequent. If people start to believe that there are many situations in which trustees ought to be remunerated, that is an issue to which Parliament should return. I hope that it will be possible to monitor what has happened with reasonable accuracy as part of the five-year review, so that the House can revisit the issue.

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

I agree with the hon. Gentleman: trusteeship is a voluntary activity and trustee status is important and valued by many trustees around the country. There should be an exception in cases of obvious need, but the exception must not become the rule. I hope that there are enough safeguards in the Bill to ensure that that is the case.

Question put and agreed to.

Clause 36 ordered to stand part of the Bill.