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Mr. Alan Milburn (Darlington) (Lab): I, too, will ask the hon. Gentleman a simple question. He knows that
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public benefit is at the heart of the Bill. Is it his intention to lead his troops through the no Lobby this evening?

Mr. Turner: That question is somewhat premature. I am sure that the right hon. Gentleman will find out before the end of my speech. I know that he was a member of the Joint Committee. I shall answer his question later.

There are some who have advanced the argument that an individual charity may not be as beneficial as it should be. I remind them that the removal of the presumption is only a removal of the presumption. Even where it remains, the commissioners can now, and will be able to do so in future, intervene—as they did in the case of the Finsbury Park mosque, or refuse registration as they did in the case of the Scientologists—where an applicant looks likely to go off the rails. We are not conferring on every charity for ever, even in the three categories that I have mentioned, the presumption of public benefit. It is more than the presumption of public benefit.

The lack of a definition of religion is causing some concern. The definition is important to ensure that those organisations that are traditionally viewed as religious are able to maintain their charitable status while preventing other organisations that are merely philosophical from meeting that definition. This part of the Bill needs further work to secure a satisfactory definition.

There is great concern about the commissioners’ proposal to

as it would constitute a major attack on religion if it were judged only in modern terms. It is possible to initiate complaints to the commission but, given the time-consuming inquiries that would ensue, that would significantly disrupt and undermine a charity’s activities.

One of the biggest problems facing the sector is over-regulation. Far from reducing the regulatory burden on charities, as the Minister for the Cabinet Office claimed, the Bill increases it, and we have already heard evidence of over-zealous interpretation of the charity commissioners’ role. I received a letter from Girlguiding UK last week, which said:

I welcome the Minister’s assurance that the Bill recognises and reduces trustees’ fears, and we will examine that assertion with interest in Committee. We should all focus on the need to reduce bureaucratic demands on charitable organisations if we wish to avoid driving the doers out. Some new regulatory measures should be removed from the Bill, including the £100,000 asset limit on registration, but the £5,000 threshold should be increased. I am concerned that double regulation will be imposed on charities that have hitherto been exempt, such as universities, and I am surprised that they are prepared to be regulated not by the independent Charity Commission, but by the Higher Education Funding Council—a creature of the Education Secretary.

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The Bill does not say anything about making the commission’s annual public meetings accessible to as many representatives of small charities as possible, but it is important to do so if such charities are to continue to play a vital role in the sector. We welcome the creation of the charity tribunal, which provides a resolution procedure for disputes without resorting to High Court, and thus reduces costs, but greater transparency is required. The Bill does not allow for the award of compensation to charities by the tribunal, the commission or, in a case of maladministration, the ombudsman, and it does not include a provision to assist charities and trustees that wish to refer the commission to the tribunal. Charities must be able to challenge the commission’s decisions before the tribunal without hazarding charitable funds, so the proposal of a suitors’ fund for that purpose is attractive, and the commission is well-placed to resource such a fund.

Above all, charities must not be diverted from meeting their objectives, and in times of difficulty those objectives must be protected. When the tribunal makes decisions it can award costs, but there is no protection to ensure the survival of a charity that could become bankrupt in attempting to meet such costs, so we propose that the tribunal be required to take charities’ long-term survival into account when awarding costs. We propose, too, that the commission—not the charity—meet the costs of an appointment of the interim manager—previously known as the receiver.

Finally, the Bill can take further steps to make charities more accountable, and representatives of trustees such as local authorities should be required to act in a charity’s best interests. We welcome the fact that the commission has been established as a non-ministerial Government Department, but it should be accountable to Parliament through a Select Committee. Appointments to the commission should be subject to Select Committee approval, to ensure that the commission is openly accountable to Parliament and hence to the public. The Bill gives the commission three jobs—to provide advice, to regulate, and to police—but it will sometimes be hard for charities to distinguish between those roles. The commission should be required to make clear what is advice and what is policing so that charities neither inadvertently break the law nor are unduly circumscribed in their activities because there is a lack of clarity from the commission.

In conclusion, we support the Bill’s overall aims and we wish to see it make reasonable progress, especially after 110 days’ delay between First and Second Reading. We will work with the Government to turn the Bill into the best framework possible within which charities can provide the best services possible to the public. Most charities were around long before we were, and will be around long after. We have a duty to hand them over in good shape, and the Bill must put no obstacles in the way.

4.55 pm

Mr. Alan Milburn (Darlington) (Lab): It is an unusual event, at least nowadays, that a Government Bill receives an almost universal welcome, but that is what this Bill by and large has received from charities, from organisations representing charities,
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from commentators, from the media, even from many lawyers, with the possible exception of the hon. Member for Isle of Wight (Mr. Turner). Given the consensus around the Bill, I was beginning to wonder whether there was something wrong with it. But having heard the hon. Gentleman’s pretty extraordinary speech, I am beginning to believe that most things about it are right.

As my right hon. Friend the Minister for the Cabinet Office was kind enough to say earlier, I was privileged enough to be able to chair the pre-legislative scrutiny Committee dealing with the draft Bill some two years ago, and I should like to take this opportunity to pay tribute to the officials and advisers who served us admirably on the Joint Committee, and to those colleagues on both sides of both Houses, who, without exception, were a joy to serve with and to chair.

I like to think that the report that we produced, in keeping with the consensus around the Bill, was also pretty consensual, in tone and outcome. There is only one small caveat, which is that I cannot be held personally responsible for all the conclusions because, sadly, I had to leave the Committee before it finalised its conclusions in order to rejoin the Cabinet, and for the rather less consensual purpose of co-ordinating the Labour party’s general election campaign. I like to think that the Joint Committee was a successful endeavour, and I like to think that the general election campaign was reasonably successful too.

I remain a real convert to the pre-legislative process. I very much endorse what the hon. Gentleman and my right hon. Friend said. That process is far less partisan and far more open to analysis and debate, and, as a consequence, makes, where it is possible, for far better law. Indeed, I should like to see it go much further in this House and in the other place.

The fact that the Government also took on board so many of the Committee’s deliberations is testimony to Ministers’ willingness to listen in order to improve the Bill’s content. I welcome in particular the decisions to guarantee the independence of the Charity Commission; to improve the proposed licensing arrangements for public collections, to which my right hon. Friend referred; to consolidate, importantly, charities’ legislation, once the Bill has successfully completed its passage through the House; and finally, and very importantly, my right hon. Friend’s preparedness to review the performance of the Bill in the real world five years following its completion. Each of those changes has undoubtedly improved the Bill, as will have the detailed scrutiny that it has already received from the very many charity experts in another place.

There are three principal reasons why the Bill is needed. The first is the necessity to modernise what is at best outdated and at worst pretty chaotic charity law. 1601 was no doubt a very fine year. It was for Her Majesty Queen Elizabeth I. She managed to thwart a rebellion led by the Earl of Essex. It was a less successful year for the Earl of Essex because he was beheaded. I do not say in any way, shape or form to my hon. Friends that I am looking for such a measure to deal with latter day rebels, although I bet that on
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occasion my right hon. Friend when she was Chief Whip would have welcomed that for certain of my hon. Friends.

Mr. Andrew Mitchell (Sutton Coldfield) (Con): Name them.

Mr. Milburn: I shall resist the temptation to name them. However, 1601 was also the year when charities legislation was first codified. Perhaps understandably given the huge amount of case law covering the work, the purposes and so on of charitable organisations, that legislation requires modernisation, and it is not surprising that the National Council for Voluntary Organisations has called the current law, “complex and inconsistent”.

Secondly, today’s charitable sector would be completely unrecognisable to those who set out the first framework for charitable law, and it is characterised by its huge diversity and enormous size. As my right hon. Friend the Minister has said, there are about 200,000 charities, which have an income of almost £40 billion a year. Charities, from the smallest to the largest, play a hugely important role in our country and, indeed, in each of our constituencies. Taken together, charities and the wider voluntary sector employ more people than the national health service, which makes them as big, if not bigger, than the Chinese red army or the Indian Railways, although they are hopefully more enlightened and efficient.

Although the mainstay of the sector remains small, volunteer-led, locally run charitable organisations, we have seen some formidable and fundamental changes in the nature of what charities do and in the way in which they look in recent years. Organisations such as Turning Point, the British Red Cross and the Royal National Institute for Deaf People belie the image of an amateur, poorly run, volunteer-led organisation. Such organisations are extremely successful, extremely large and extremely professional, and they make a real difference—for example, housing associations are the main providers of affordable homes in our country nowadays.

Organisations such as Christian Aid, Oxfam, Save the Children and the Red Cross play an important role in development. Most instructively, voluntary hospices have not only become the main providers of care for the terminally ill, but given birth to a new branch of modern medicine in this country and throughout the world.

Mr. Drew: On the roles and functions of organisations, the number of social enterprise organisations is clearly growing. Will redefining the law on whether charities are fit for purpose help social enterprises to expand? Social enterprises are clearly not set up with charitable purposes, but they are not private businesses and are obviously not part of the state.

Mr. Milburn: My hon. Friend has made an extremely good point. The voluntary sector is now characterised by huge diversity not only in terms of size, but in terms of form—there are social enterprises, community organisations, residents’ organisations and charities.

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In a moment, I shall touch on the point that the Government have tried in this Bill and other legislation to make it easier for voluntary organisations to choose from a variety of different legal forms. My right hon. Friend the Minister has referred to the charitable incorporated organisation, which we touched on in Joint Committee, and there are other forms, too. I welcome the blossoming in voluntary and community organisations, which are making a difference in how services are delivered not only locally, but nationally, and I welcome the diversity that we are beginning to see within the voluntary sector.

The third reason why the Bill is needed is that the right framework of law and regulation can help realise the potential, which the hon. Member for Isle of Wight has touched on, that undoubtedly exists for the sector to grow even further, which would help the Government to deal with some of the formidable social challenges faced by a modern society such as ours. Because charitable organisations are often grounded in local communities, they are well placed to grow social capital, which can deal with big social issues such as fighting crime, improving health or regenerating communities. Some of the most inspiring people whom I have met in my constituency are members of community organisations who are leading the local effort to tackle such types of disadvantage.

The truth is that we now live in an era in which, by and large, citizens are far more informed and inquiring; they know more and want to be engaged more. The old proposition that our job here is to do things to people no longer applies—doing things with people holds the key to progress. In that context, charitable and voluntary organisations have an enormous role to play. A vibrant voluntary and, in particular, charitable sector forged from the combined efforts of millions of unpaid volunteers should surely be the bedrock of a modern civil society based, as it is, on active citizenship.

In other words, charities can do more than do good—they have at least the potential to change the way in which our country is governed. That is long overdue. For decades, policymakers—this is not a partisan point, as it applies to all parties of Government—have practised a top-down approach in dealing with the big social issues of the day. I see that graphically illustrated in my own part of the world, the north-east, where the inner-city regeneration schemes of the 1970s and the 1980s were characterised by one thing—the pouring in of millions, in some cases hundreds of millions, of pounds of public investment, with, at its heart, the fallacy that was the failure to consult and, more importantly, to involve the residents who were the supposed beneficiaries of such resources. It is hardly surprising that such schemes came and went, came and went again, and failed. Some of the new programmes that I am proud to say that this Government have pioneered, such as the new deal for communities, have begun to change that top-down approach and to substitute a bottom-up approach whereby local residents are not only consulted on, but involved in, how services are provided and how their communities are run.

However, we need to go beyond individual initiatives, however good they might be, to a wider approach encompassing what the Government do, and how the
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state behaves, to empower individual citizens and local communities to take greater control and thereby exercise far greater responsibility for themselves. That is where charities not only have a key role but stand before an open goal. Over recent years, the reforms that the Government have made in our public services to introduce common standards and systems of inspection allow our country to make progress towards a system that is commonplace in other European countries, where the origin of the provider becomes far less important than the quality of services that they provide.

In local government nowadays, more and more services are run by the private sector. In social services, the majority of elderly care services have been contracted out to the private sector. There are issues about standards and so on, but by and large it is fair to say that standards are better than they were 10 or 20 years ago. In education, we have more partnerships between the public and private sectors. I would argue that those partnerships have helped to drive up standards, particularly in the most disadvantaged communities. As for health, when I was Health Secretary I signed a concordat with the private sector. That was not universally popular with Labour Members, and was indeed subject to a great deal of criticism from Opposition Members. We brought in new overseas providers, again from the private sector. The end result has been to improve standards and outcomes and to shorten waiting times to the benefit of NHS patients.

The next step is to move beyond an automatic assumption that the only alternative to the public sector is the private sector. Over the next decade, the charitable and voluntary sector should become as integral to public service delivery in Britain as either the public or the private sector. It can help to open up public services so that they become far more responsive and offer those who use them far greater choice.

David Taylor: My right hon. Friend eulogises the benefits that he asserts have resulted from partnerships between the private and public sector in the world of education. Does he not accept that at least some of those benefits have been somewhat tokenistic and that most partnerships have come about as a result of sharing sports facilities, musical access and so forth? Very few indeed have been rooted in the sharing of teaching and learning skills of a more conventional nature.

John Bercow: With friends like that!

Mr. Milburn: Thank you to my supposed hon. Friend, or whatever he is. I will come to precisely that point in a few moments. When the Joint Committee was taking evidence, we heard about some good examples of meaningful partnership between the private and state sector, particularly in education. To be honest, we also heard about some pretty poor examples, where the lack of partnership between the sectors was more evident. In large part, the test of public benefit, which some have decried, can help to address the deficiencies and to realise the potential of partnerships. I will return to that theme in a moment or two.

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It seems to me that, if we can get the framework right, the voluntary and charitable sector could be doing far more than it does. I have never really understood, for example, why voluntary or charitable organisations should not be able to run more welfare to work or child care programmes. I have never understood why cancer charities should not be given the opportunity to run more cancer services. I would certainly like to see us building, as a society and a country, on the pioneering work undertaken by an organisation such as the Royal National Institute for Deaf People in negotiating substantial discounts on behalf of NHS patients on the supply of digital hearing aids and then going on to work with NHS hearing services in order to ensure that those aids can be properly provided and fitted to the deaf or hard of hearing.

My argument, unlike that of the Conservative party, is not that charities can or should replace the state, but that the public sector, the voluntary sector and the charitable sector should be partners rather than rivals. While charities can do much more, there is much that the state, for reasons of efficiency and equity, has to do. In truth, in this era of worldwide terror, mass migration and global competition in which we live, only Governments can provide security to citizens. Modern Governments, however, have another equally critical role—to empower more people so that the opportunities that some have always enjoyed are redistributed more widely in our society and it is here, I believe, that the charitable and voluntary sector comes into its own.

The potential is already there, but I believe that realising it will require a new drive to bring in the sector from the cold. That depends, first, on the Government providing fair rules and fair funding. A good start has already been made, but Ministers recognise that there is more to do. Secondly, it depends on the sector—charities and voluntary organisations alike—putting its own house in order. Charitable organisations, just like private or public sector organisations, cannot expect to get something for nothing. The Parliamentary Secretary, my hon. Friend the Member for Doncaster, North (Edward Miliband) is quite right that, to get a better funding regime, charitable organisations need to demonstrate the added value that they can bring to our key public services. They need to be clearer about what they are promising and what they can deliver and they need to get tough about the value of their work, not just its cost.

Thirdly, charitable organisations need a system of regulation and law that allows them to demonstrate that they are fit for purpose as they broaden their role and provide more services. That is where the Bill, in my view, becomes so important, but has a delicate balancing act to perform. On the one hand, it needs to assure the public that there is probity in the charitable sector as its role expands. On the other, it needs to avoid the temptation of over-prescription and burdensome regulation. It is worth recalling that, according to one survey at least, charities come second only to churches in the public’s league table of trustworthy organisations. They have a trustworthy rating of 48 per cent. By contrast, Government have a rating of 6 per cent.

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