House of Commons Hansard Debates for 16 Oct 1990

Column 1087

Question accordingly negatived.

New clause 12

Code of practice

(1) It shall be the duty of the Secretary of State, before the end of the period of one year beginning with the passing of this Act, to prepare in draft a code of practice containing such practical guidance as in the opinion of the Secretary of State would be helpful for the purposes of Part I of this Act.

(2) Such a draft shall in particular contain guidance--

(a) on the proper procedures and administrative arrangements for a charitable body, and

(b) on the provision of information to the public by a charitable body regarding its activities and purposes.

(3) The Secretary of State shall, before the end of the period of one year beginning with the passing of this Act, lay before both Houses of Parliament a draft of the code of practice prepared by him under subsection (1) above, to be approved by resolution of both Houses.

(4) The Secretary of State may from time to time revise the whole or any part of a code of practice brought into effect under this section, provided that such revisions are laid before, and approved by, resolutions of both Houses of Parliament.

(5) A failure on the part of any person to observe any provision of a code of practice which is for the time being in force shall not of itself render him liable to any proceedings ; but in any proceedings under this or any other Act--

(a) any such code shall be admissible in evidence, and

(b) any provision of such a code of practice which appears to the Court to be relevant to any question arising in the proceedings shall be taken into account by the Court in determining that question.'.-- [Dr. Godman.]

Brought up, and read the First time.

5.30 pm

Dr. A. Godman : I beg to move, That the clause be read a Second time.

My code of conduct is designed with the specific aim of giving guidance to those seeking to set up charities, as well as advising them of the need to adhere to the complicated rules and regulations that are outlined in part I. My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said a few minutes ago that we are faced by an extraordinarily complicated structure of rules and regulations for charities. He is right.

In part I, for example, the topics range from clause 1, "Information as to recognised charities",

to :

"Duty to keep accounting records",

"Annual accounts and report".

and the role of the Lord Advocate in this scheme of things, which is dealt with in clause 5. The role of the Court of Session is outlined in clause 6. Clause 7 is concerned with the disqualification of persons concerned in the management of such bodies. We all know that, occasionally, the odd character happens on a charity and exploits it in his own nefarious interests. There is also an important clause, clause 9, concerned with small charities. There is a need for a code of conduct for small charities. I remind the Minister and the House of the Industrial Relations Act 1971. I think that it came into force on 28 February 1972, as you would know, Madam Deputy Speaker. That labour law was dreadful in itself, but its one redeeming feature was the code of practice that was introduced with it. It was aimed largely at small companies that were unfamiliar with the formal processes of collective

Column 1088

bargaining. I put it to the Minister that small charities are in a position with this Bill analogous to that of the small firms confronted with the code of practice in 1972. I hope that this provision survives longer than the Industrial Relations Act 1971 did.

There is an important principle here. I was not in Parliament at that time. Although I was opposed to the Industrial Relations Act 1971, I welcomed the code of practice because it was a fine little document in terms of grievance and disciplinary procedures. I would argue that this legislation concerning charities--especially small charities--needs such a fine little document.

Some people may say that there is no need for such a code of practice. I can perhaps understand the reason for such reservations, especially, for example, in respect of the fine charity with which I am involved, which was mentioned just now by my hon. Friend the Member for Falkirk, East (Mr. Ewing). Like many large and long-established charities, the Royal National Lifeboat Institution has a strict code of conduct for its various component bodies and strict rules governing its collections and other charitable activities. But often small charities are formed when a number of people come together to give sustenance to those in distress. For example, in my constituency, following the tragic death of a couple who died in horrible circumstances in a house fire in Port Glasgow, a number of neighbours came together with the object of raising money to provide the young daughter with sustenance and comfort. In fishing communities, in particular, people come together in the immediate aftermath of a tragedy to raise money for the dependants of those who have been lost ; that is also not an unfamiliar experience in mining communities.

I promise to be brief, Madam Deputy Speaker. I am anxious to hurry along to the new clauses dealing with children giving evidence in criminal proceedings. In passing, let me say that I am delighted with the fine, generous comments that the Minister made when he referred to those new clauses.

We need to give guidance to small charities, because such bodies may not have the means to obtain advice from lawyers or similar professionals. A code of practice could, I think, give comfort to the individuals involved-- particularly in regard to their onerous responsibilities vis-a-vis the Lord Advocate. Some of those responsibilities are entirely right and proper, but the Government must nevertheless give guidance to such bodies. I look forward to a positive response from the Minister to the new clause.

Lord James Douglas-Hamilton : The new clause tabled by the hon. Member for Greenock and Port Glasgow (Dr. Godman) would provide guidance to charities on how to comply with the requirements of part I of the Bill. The hon. Gentleman proposes that that should be achieved by introduction of a code of practice that would require approval by resolution of both Houses of Parliament. He also proposes that such a code should not be legally binding but that where a person has failed to observe any provisions of the Bill it should be admissible in court proceedings and could be taken account of by the court in its determination.

I sympathise with the purpose and aim of the hon. Gentleman, which is essentially to provide guidance to charities on how to comply with the requirements laid upon them by part I. I do not, however, believe that the means of providing that guidance should be as proposed in

Column 1089

the new clause. I do not consider it necessary to provide a code of practice when adequate provisions are set out in the primary and secondary legislation.

I also have some doubts about asking the court, as the new clause provides, to have regard to the code of practice in determining a question that will already have been covered in the primary legislation. That strikes me as likely to frustrate, rather than assist, determination by the courts. However, I certainly accept that the charities should have guidance on how to comply with the requirements of part I and I assure the hon. Gentleman that full guidance on that will be provided by the Scottish Home and Health Department by means of publicity, and also by circulars to recognised bodies.

I should also mention the fact that the Scottish Council for Voluntary Organisations already provides helpful guidance to charities and it will, no doubt, continue to do so. Now that he has been given that assurance, I hope that the hon. Gentleman will not seek to press the new clause.

Dr. Godman : The Minister is an honourable man and I am perfectly willing to accept his assurance that the provisions will be publicised. On the basis of that assurance, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Clause 1

Information as to recognised charities

Amendments made : No. 90, in page 2, line 2, leave out from body' to end of line 5 and insert

such as is mentioned in subsection (1A) below,'.

No. 91, in page 2, line 9, at end insert :--

(1A) A recognised body referred to in subsection (1)(a) above is a body--

(a) which appears to the Commissioners to be or to have been carrying on activities which are not charitable or to be or to have been applying any of its funds for purposes which are not charitable ;

(b) which is certified by the Lord Advocate as being a body in respect of which information has been provided to the Scottish charities nominee by a relevant institution in pursuance of section --[Dormant accounts of charities in banks etc. ] -- of this Act.'.-- [Lord James Douglas- Hamilton.]

Lord James Douglas-Hamilton : I beg to move Government amendment No. 1, in page 2, line 43, leave out conclusive' and insert sufficient'.

Clause 1(7) provides that, for the purposes of any proceedings under part 1 of the Bill, a certificate signed by a person authorised to do so by the commissioners of Inland Revenue shall be "conclusive" evidence of the fact that the Revenue has recognised the body as a charity. It was suggested in Committee that the word "sufficient" would be preferable and consistent with other legislation. My hon. and learned Friend the Member for Perth and Kinross (Sir N. Fairbairn) had a lot to do with the amendment.

Mr. Menzies Campbell : I welcome the fact that the Minister has shown rather more flexibility today than he did during our long passage at arms in Committee, when hon. Members on both sides of the House argued the matter quite forcefully.

Will the Minister confirm that what is now to be legislated for is a system in which a challenge will be available to someone who seeks to challenge the accuracy of what is apparently purported to be correct by virtue of

Column 1090

the provision. The argument in Committee turned on the question whether, if the evidence was conclusive, no challenge would be permitted. By substituting the word "sufficient", the Minister has opened the door to challenge in cases where that may be appropriate. That seems to me a more equitable way in which to dispose of the matter than was originally envisaged in the Bill.

Sir Nicholas Fairbairn : I will just say that my gratitude is sufficient ; it is not conclusive.

Amendment agreed to.

Clause 2

Non-recognised bodies

5.45 pm

Lord James Douglas-Hamilton : I beg to move Government amendment No. 2, in page 3, line 3, leave out subsection (2) and insert-- (2) For the purposes of this Part of this Act, any body which is not--

(a) a recognised body ; or

(b) a body which is--

(i) registered as a charity in England and Wales under section 4 of the Charities Act 1960 ; or

(ii) a charity which is not required to register by virtue of subsection (4) is a non-recognised body.'

Madam Deputy Speaker : With this we may take Government amendment No. 13.

Lord James Douglas-Hamilton : Clause 2(2) defines the expression "non-recognised" body. The subsection was criticised by my hon. and learned Friend the Member for Perth and Kinross (Sir N. Fairbairn) and by my hon. Friend the Member for Ipswich (Mr. Irvine), who found the double negatives confusing. The amendment is a drafting amendment, the purpose of which is to avoid the use of multiple negatives.

Mr. Dewar : I am sorry that the hon. Member for Ipswich (Mr. Irvine) is not with us today because, on occasion, he greatly entertained me in Committee. I certainly had a great deal of sympathy with his inability to follow the tortuous double negatives that were built into the Bill.

Out of curiosity, I should like to engage the Minister's attention on a much smaller matter. By a happy coincidence, amendment No. 13 refers to clause 13, which states :

" non-recognised body' has the meaning given by section 2 of this Act".

Amendment No. 13 would remove the words

"has the meaning given by"

and insert the words

"shall be construed in accordance with"

Can the Minister explain why that important change is proposed and what practical difference the amendment will make?

Lord James Douglas-Hamilton : It makes for greater accuracy and clarity and would make the provision easier for the general public to interpret.

Amendment agreed to.

Column 1091

Clause 5

Powers of Lord Advocate to investigate charities and to suspend trustees

Lord James Douglas-Hamilton : I beg to move amendment No. 3 in page 7, line 2 after apply' insert by summary application'.

Madam Deputy Speaker : With this it will be convenient to take Government amendments Nos 4 and 5.

Lord James Douglas-Hamilton : These amendments relate to procedural matters under clause 5. Amendment No. 3 is a simple clarifying amendment which makes it plain that application by a nominated officer to the sheriff for an order under clause 5(6) is by the summary application procedure.

Amendment No. 4 is also a clarifying amendment. Subsection 5(6)(a) specifies that the nominated officer may apply to the sheriff for an order requiring a person to attend to answer questions and provide information at a time and place specified in the order. The insertion of the word "and" makes it clear that the order requires the person not only to attend, but also to answer questions and provide information.

Amendment No. 5 inserts a new subsection after subsection (6). It reflects concern in Committee that a person required by a court order to provide answers to the nominated officer might be faced with the choice of obeying the order and incriminating himself by answering the questions or possibly to commit an offence by refusing to make a statement and thus breaching the court order.

It is important to bear in mind that these are civil and not criminal proceedings. They relate to the investigation of an officer appointed by the Lord Advocate to discover whether there appears to have been misconduct or mismanagement of a charity's affairs. I recognise the concern expressed by several Committee members, including the hon. Member for Glasgow, Garscadden (Mr. Dewar), that there should be no room for doubt. The amendment makes it clear that a person must answer truthfully questions put to him by a nominated officer when an order has been made under subsection (6) and that he may not refuse to answer on grounds that his answer might incriminate him.

The new provision that amendment No. 5 seeks to insert also makes it clear that no answer to a question under subsection (6) may be used in any subsequent criminal proceedings against the person. I believe that in practice the nominated officer will act more like a Department of Trade and Industry official than a procurator fiscal. If he asks a question and receives an apparently incriminating reply, the nominated officer will normally terminate the interview immediately and refer the matter to the Lord Advocate with a view to the matter being referred to the police for criminal investigation if an incriminating answer gave rise to questions not as to whether there had been a breach of trust, but as to a serious crime.

Mr. Menzies Campbell : On the occasion of such a transaction as the Minister has described, does he envisage that the nominated officer would put the person summoned on oath and require him to take the oath in conventional terms like that taken by a witness giving evidence in court?

Column 1092

Lord James Douglas-Hamilton : Statements to the nominated officer will not be under oath.

Mr. Dewar : Although it is difficult with our time constraints and our inability to amend the Bill now, I would like the Minister to give us a little more help. He has already shed some light on the Government's intentions. As the Minister has said, the concern is that we have a rather cumbersome procedure whereby the Lord Advocate, having decided to inquire into a charity, appoints a nominated officer. If that nominated officer meets a refusal to co-operate, he can go to the sheriff for an order under clause 5(6) which would force the person concerned to answer questions or to furnish information at a time and place specified in the order.

The concern was that that person might in effect be asked to incriminate himself. The Minister has explained that we are talking about civil proceedings and that nothing that is said will be admissible in evidence in any subsequent criminal proceedings. The position is still quite difficult. If I am being interrogated or questioned by the nominated officer, it will cause me some unease if I have to answer a question which, if I answer it honestly--we are talking about the real world here--will be written down and although it may not be used as primary evidence in any criminal proceedings, will be passed to the Lord Advocate who is, after all, instructing the nominated officer. The Lord Advocate has certain other duties of a criminal nature. Obviously I may be prejudicing my future quite considerably if I proceed to follow the advice that the Minister has given and answer the questions honestly.

I want to be clear about what would happen if I do not answer the questions. If I say that I am very sorry, but I do not want to answer a particular question, am I caught by clause 5(7)? I have complied with the order in the sense that I have turned up and answered questions. Do I have to answer every question? If I say that, in effect, I wish to plead the Scottish equivalent of the fifth amendment, will I be caught by the penalty in clause 5(7) or would I be a person under clause 5(8)

"who wilfully alters, suppresses, conceals or destroys and record which he may be required to furnish or transmit"?

I should not have thought so, but what is the sanction? The person is not on oath, as the Minister has explained. He cannot be in contempt because he is not in a court although I suppose that it may be a "once removed" contempt of the order made under clause 5(6) by the sheriff.

Apart from a sense of scout's honour which may not apply very strongly in the circumstances that I have outlined, what is to stop someone simply saying, "I've told you all that I intend to tell you and I've gone as far as I'm going"? Someone might well want to do that if he was being precognosced about the matter by the Crown Office or anyone else. I am still a little unhappy about a situation in which the Minister glibly states that someone must answer questions which of course are not admissible as evidence but which will be put on a hot line and a quick fax machine back to the Lord Advocate. That person is being placed in a position in which, apparently, he has to incriminate himself.

Sir Nicholas Fairbairn : I am extremely worried, and the worries that I voiced in Committee have not been allayed by this, I assume, charitable attempt by the Minister to remove them.

Column 1093

The hon. Member for Glasgow, Garscadden (Mr. Dewar) has put his finger on a number of important points. With regard to this provision, we are in a nebulous state. I do not know whether the appearance is to be in public or in private, or whether members of the press or the CID are entitled to be present. There is certainly nothing in the statute to prevent their being present.

I do not believe that the sheriff could say to someone, "You are going to be asked a question," and then have any alternative under the statute but to say, "And you've got to answer it." That is the thrust of the provision. It would take a brave fellow to say, "I have actually read the provision and I know that I've got to turn up, but I equally know that there is no provision telling me that I've got to answer." If someone is dragged along to a star chamber court and put before a judge, there is an assumption that one must answer. If I was a sheriff, I would find it difficult to know whether I was entitled to order the chap either to answer, or be prevaricating on a contempt, or to say that the chap did not have to answer.

Mr. Menzies Campbell : The hon. and learned Gentleman is right to point to the absence of a clear indication in the Bill of what would happen in the circumstances that he has described. Has he considered the fact that the ambiguity and lack of specification in the Bill may go further than even he has imagined? The sheriff may not necessarily be involved in the proceedings after he has issued an order to a nominated officer. On the face of the Bill, it seems that, once someone becomes a nominated officer, it is up to that person to go off and examine--using the word loosely--the person against whom the order has been made. However, all that seems to be regarded as taking place away from the sheriff court and away from the presence of the sheriff. If I am right about that, the possibility of the precise difficulty to which the hon. Member for Glasgow, Garscadden (Mr. Dewar) eloquently referred seems, if anything, to be yet more likely than the circumstances that the hon. and learned Gentleman has postulated.

Sir Nicholas Fairbairn : I am obliged to the hon. and learned Gentleman. There are terrible pitfalls which are not cured by the amendment. I had forgotten, of course, that the nominee can take someone off to a hole in the wall and cross-examine him. There is no suggestion that he needs corroboration of what that person is supposed to have said. There is no suggestion of the principles of safeguard against being misled. One has only to be involved in cases concerning customs and excise officers rather than policemen to realise how important such protections are.

6 pm

Apart from that, two other matters give me the greatest concern. First, is the nominee allowed to say that the press can be present so that admissions which are not admissible in evidence against the fellow can be published in the press? If that fellow says, "As a matter of fact, my granny was suffering from cancer so I just nicked all the funds before I cut the head off the beagle," and it appears in the press but is not admissible in evidence, I should not have thought that the "not admissible in evidence" provision was very helpful.

Secondly, I am worried about the presumption of guilt which arises easily, if sometimes properly, in the minds of policemen and prosecutors. If the nominee sends along a

Column 1094

document which states that Willie Smith admits that he has been subtracting 50 per cent. of donations over the years, or any other incriminating statement, do not tell me that any prosecution will not proceed on the assumption that that is true when previously there was no evidence to suggest it. The fact that one cannot actually use those words does not help. Heaven knows, there is not an hon. Member present who does not know of cases in Scotland in which evidence was not invented to justify presumed assumptions, particularly of an alleged confession.

The amendment is dangerous, not because the Minister is not trying to help, but because the provision does not help. The nominee can wear a knuckleduster and say, "You answer my questions or I will hit you." That might be a breach of the law. He might say, "You realise that if you do not give me the answers that I would like, you may be in severe trouble." That is not a breach of the law by a nominee. I suppose that it might be a form of assault, but he is not an officer of the law--he is trying to get the answers that he wants. It is a terrible path that the Lord Advocate and the courts of Scotland are being asked to tread. People collecting for charities will be subjected to a third degree from which even the most appalling terrorist would be protected.

Mr. Harry Ewing : I approach this matter on the basis that the interviews will be held in private and that the press will not be present. Two points worry me. The first is the lack of corroboration. Will the person being interviewed be entitled to have a representative present with him at the interview and whether the person who was nominated by the sheriff will have someone with him to corroborate the interview? The law of Scotland is based on corroboration. The Minister should say something about corroboration.

Secondly, the Minister explained what would happen in the interview. Once, in the view of the nominated person, the person being interviewed gives an incriminating answer, the nominated person would then, to use the Minister's words, immediately terminate the interview. Whether the Minister likes it or not, that would be a judgment. The nominated person would judge that the person being interviewed has made a statement that may or may not lead to criminal proceedings but which certainly merits being reported to the Lord Advocate for further investigation on the basis that criminal proceedings might follow. That is fraught with difficulties. I am not sure how that matter can be handled, and I am not happy about it. It seems that there will be a one-to-one situation--no corroboration. The nominated person will make a judgment the background of a statement by the person being interviewed and will immediately terminate the interview. The matter will then be sent to the Lord Advocate for further investigation. As the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn) said, that is fraught with difficulties. I know that this matter is difficult for the Minister also, but I should be grateful for further explanation of those points.

Mr. Menzies Campbell : The difficulties that have arisen in short consideration of this matter only serve to underline the fact that, when the provisions were framed and when the additional amendment was sought to be added, there was insufficient analytical consideration of the nature of the transaction between the nominated

Column 1095

officer and the person who was summoned by virtue of an order of the sheriff. Ex facie of the Bill, the sheriff, having pronounced his order, is functus--he no longer has part in the proceedings. The nominated officer goes off with the order. It is as though an attempt had been made to add to the procedure known as commission and diligence and specification of documents--the equivalent of discovery in England and Wales.

It is as though, in addition, something had been added which requires a person to provide information in formal or informal circumstances, depending on the decision of the nominated officer, and which may be public or private because there is no specification of the proper method of proceeding. The circumstances may be formal or informal in the sense that one nominated officer may adopt the wholly informal approach--that of a conversation--and another may treat the matter with greater formality and ask the person who has been summoned to sit in a certain place and to conduct the proceedings in a particular way as though it were a formal investigation.

Sir Nicholas Fairbairn : Another matter that the hon. and learned Gentleman might care to consider is that he adduced from the Minister the fact that the proceedings would not be under oath. If they are not under oath, on what possible basis could there be a prosecution for an offence under section 2 of the False Oaths (Scotland) Act 1933?

Mr. Menzies Campbell : I am much obliged to the hon. and learned Gentleman, who has anticipated my next point. It appears that the nominated officer must give some warning when the proceedings commence. If, depending on my answer, I may be liable to prosecution for contravention of the False Oaths (Scotland) Act 1933, albeit perhaps a prosecution that is not founded on what I may have said, surely I should be entitled to a warning that the proceedings before the nominated officer might have that criminal consequence, yet there is no such provision.

The Minister says--no doubt sincerely--that, when an incriminating answer appears to have been given, the nominated officer will terminate the interview. Whether he does or not is the nominated officer's choice. Nothing in the Bill states that, as soon as an incriminating answer is given, the nominated officer must terminate the interview. Furthermore, neither the nominated officer nor the person being questioned may appreciate at a particular moment that that is an incriminating answer and might have the consequences to which other hon. Members have referred.

That is why the point made by the hon. Member for Falkirk, East (Mr. Ewing) is so important. If a person is summoned to meet a nominated officer, is he or she entitled to be represented, or is this situation similar to the examination for bankruptcy proceedings about which there was considerable doubt in Scotland for a long time on the question whether the bankrupt was entitled to be represented at his own proceedings?

Far too many questions have been left unanswered. To return to my earlier point, they remain unanswered because there has not been any rigorous examination of the consequences of inserting such a provision in the Bill. It is perfectly right for the hon. and learned Member for Perth and Kinross to talk with some awe about the powers

Column 1096

of the Customs and Excise and of VAT inspectors. The hon. and learned Gentleman knows that, in the case of the Lord Advocate v. Friel, Lord Ross--now Lord Justice-Clerk Ross--took a vigorous view against the method of questioning used by the Customs and Excise inspectors. He held strongly that they were not entitled to conduct themselves in a way that was contrary to the principles laid down in the law of Scotland, stemming from the case of Chalmers v. the Lord Advocate.

Far too many questions are unanswered. There are far too many opportunities for mistake, confusion and injustice. That is why I believe that the provision does not bear the hallmark of careful and analytical consideration and it certainly does not bear the hallmark of any rigorous understanding of the possible consequences. My final point echoes to some extent what was said by the hon. Member for Glasgow, Garscadden (Mr. Dewar). An answer may be incriminating. It may not be able to be used in criminal proceedings later against that person. It may form the basis upon which other investigations can be carried out, by referring, for example, to the location of a certain piece of evidence. The statement about where the evidence is said to be located may not be admissible, but if someone examines the box in which the papers that have been referred to can be found, those papers and their findings may in turn come to be the incriminating evidence. It is artificial to suggest that there is as much protection as the Minister appears to claim for a person who is asked in response to an order from the sheriff.

Next Section

Home Page