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In his interesting speech, the right hon. Member for Darlington spoke of the importance of partnership between government and the charitable sector, and it is the importance of getting that balance right that I wish to flag up. There is a degree of ambivalence—on the one hand, the voluntary and charitable sector has an enviable record of providing outstanding care, but on the other, we are talking of a desire to see a thriving,
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independent charitable sector, which should not be dominated, fettered and generally taken over by the state. The Cabinet Office paper, “Private Action, Public Benefit” clearly defined the Government’s objective as one of ever closer union, aiming to

That was the burden of the right hon. Gentleman’s comments. The Charity Commission, however, has made it quite clear that that approach is not a panacea. It warns:

Such a loss of independence, the commission says, could lead to bodies being

The Charity Commission concludes:

In fact, there are already 731 charities that have a local authority as a trustee. More worrying is the fact that for 595 of them, the local authority is the sole trustee. In response to that, one of the most important of our unanimous recommendations was in relation to the independence of the Charity Commission and the provision that it should exercise its powers

an arcane form of words that means that the Charity Commission would be closely bound in to the Government, ministerial diktat and departmental governance. In the light of the Government’s stated objective to encourage

it is incomprehensible that the Government have, as yet, failed to remove what was clause 4(1) of the draft Bill, which proposed that the Charity Commission would perform its functions

With that clause in place, the commission will continue to be, in effect, a Government Department, albeit a non-ministerial one. That means that it cannot appear to be fully independent of government. Witnesses before the Joint Committee warned of the risk of greater political interference and of prejudice to the commission’s quasi-judicial functions—I draw the House’s attention to paragraph 177 of the report. The Government’s rejection of our recommendation does not adequately answer those concerns. As if to add insult to injury, the Government failed to adopt the Joint Committee’s recommendation that the Charity Commission be more accountable to Parliament and its Committees and declined to give statutory force to a requirement for the commission to report to either House.

A number of witnesses from whom the Committee took evidence expressed grave misgivings about the
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effect of such a proposal on the credibility of the Charity Commission. For example, in its evidence to the Joint Committee on the draft Bill, the Charity Law Association stated that if the commission

It is important that the commission be accountable to Parliament rather than to the Crown. The National Council for Voluntary Organisations went even further, arguing that it was not enough for the Bill simply to stipulate that the commission be answerable to Parliament, but that it must give at least some outline of how the mechanism of that accountability should operate in practice.

Parliament would need to enforce regular and detailed monitoring of the financial well-being and the regulatory effectiveness of the Charity Commission. Speaking from my experience on the Joint Committee, I hope that the Home Affairs Committee will take up the recommendation that it hold an annual evidence session with the Charity Commission. I also hope that there can be a debate every year, in Government time, on the annual report of the Charity Commission in both Houses, as the Joint Committee suggested.

My next point is on the introduction of a blanket public benefit test. At present, if an organisation’s purposes lie within the three named heads of charitable purpose—the relief of poverty, the advancement of religion and the advancement of education—it is presumed to be acting in the public benefit, unless a positive reason for doubt is presented. In the Bill, it is proposed to change that presumption, requiring all bodies to show that they are acting in the public benefit, as defined in law, before they are granted charitable status. The reversal of the presumption of public benefit will primarily impact on private schools and hospitals and religious groups, which previously came under the three headings of the preamble to the legislation about which the right hon. Member for Darlington spoke so eloquently, but which now, as the House knows, must prove a public benefit.

Although the Bill does nothing to override existing case law, so it will not change the definition of public benefit itself—it is inevitable that the requirement to demonstrate public benefit will make it harder both to register as a charity and to remain as such. Moreover, the nature of the legislative requirements will mean that charities will be subjected to ongoing public benefit checks. Inevitably, the smaller charities, which are the least able to deal with that sort of regulation in terms of both manpower and expertise, will bear the brunt of the legislation.

Ultimately, everything will turn on how the Charity Commission operates the public benefit test. One of the most valuable contributions that the Joint Committee was able to make, and where it had a positive effect on clarifying the thinking within the Home Office and the Charity Commission, was in causing them to produce what I believe we called a concordat on how that part of the legislation will be operated. However, that is no guarantee that the change to the public benefit test will not produce uncertainty and turbulence to educational and medical bodies, whose activities have long been regarded as for the public benefit.


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None the less, I urge the Government to stick to what has been agreed and what is in the Bill and to ignore the old Labour class warriors chuntering on the Government Back Benches and revving up to amend the Bill in that respect. Let us hope that the new arrangement will work out as most of us believe it should. In that sentiment, I have no doubt that I have the full support of the right hon. Member for Darlington.

Lastly, I wish to join Lord Craig of Radley in his outrage at the intention to abolish excepted charity status for armed services mess charities. An excepted charity, as authorised by a 1965 statutory instrument, has no obligation to register with the Charity Commission, although it must still meet the requirements of the Charities Act 1993. The real concern must be that, in due course, the threshold for registration will be reduced from a turnover of £100,000, and that more and more small armed forces charities will be required to register and to come under the closer regulation of the Charity Commission.

Excepted charities that choose not to register with the commission do not have to submit accounts, prepare and transmit annual reports, or complete annual returns. The rationale behind this reduced regulation is that excepted charities, such as the armed services charities, are those that are under the control of another body acting in a regulatory capacity. There are about 15,000 armed services funds, which are charities. They are spread across the three armed forces. Their purposes range from officers and sergeants’ mess accounts to service, sporting and recreational activities. A defining characteristic of such funds is that they derive their income not from the public, but exclusively from military personnel.

Ministers have assured the Grand Committee in the other place that those funds will not lose their charitable status. On Report, a Government amendment has included in the list of charitable purposes the promotion of efficiency in the armed forces of the Crown. However, that does not change the fact that an entirely superfluous bureaucratic burden will be added. It will be superfluous because the funds are more than adequately supervised by the Adjutant General—far more so, I might add, than by the Charity Commission, which in the past has failed to satisfy the Public Accounts Committee and the National Audit Office. It caused the Joint Committee to express doubts as to its ability to meet the demands of the proposed wider remit. The commission has some way to go, and I sincerely hope that it will do so compellingly to demonstrate clearly, in today’s parlance, that it is fit for purpose.

The points that I have raised are minor but extremely important. They could make the Bill even better if they were included in the measure. I hope that the Government will reconsider them in the terms in which I have put them, and consider seriously including them in the Bill in Committee or on Report.

I end where the right hon. Member for Darlington, the Chairman of the Joint Committee, ended his speech, in saying that the Bill is long overdue. It will make a tremendous contribution to updating charity law. It will help to ensure that the brand is protected and enhanced. There are tremendous opportunities, working with the charitable sector, to advance the
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objectives that we all hold within society. I hope that the Government will consider what I have said on these minor points to see whether the Bill can be made yet better.

6.32 pm

David Lepper (Brighton, Pavilion) (Lab/Co-op): First, I place on record that I am a trustee of a small local charity, Ardis, that is based in Brighton and Hove. It works on behalf of people with dementia in that area. I am also a member of the Association of Town Centre Management. The reason for that declaration might become clear when I say that I wish to concentrate my remarks on part 3, and particularly on street collections. Despite the comments of the hon. Member for Cheltenham (Martin Horwood), I have no hesitation in referring to the street collectors as chuggers—charity muggers. That is because of the outrageous activities of some paid street collectors in my constituency.

I am talking of those who are paid on behalf of charities to stop people in the street and to encourage them, on the spur of the moment, to sign up to regular direct debit payments to extremely worthy charities. I question whether that is the best way to encourage people to make thoughtful donations regularly to a charity. Perhaps payroll giving might be a better form of making donations. Nevertheless, a number of charities use the street collector method.

When the Bill was in draft form, I think that the Government took the view that the problems caused by street collections could be dealt with by self-regulation. I welcome the terms of the Bill generally, as have others, and as debate on the Bill in draft form and in another place has continued, I am glad that there are now to be two stages of regulation in terms of collections. Those stages will not, it seems, harm in the least local charities that collect by holding the tin and not shaking it, or from time to time shaking it, but I hope that regulation will help to curb the chuggers.

The two stages involve the charity obtaining a certificate from the charity commissioners, followed by a form of local authority licensing. I gather that the Government’s proposal is to talk with local government representatives and councils about guidelines for the licensing system. Alongside that, a self-regulatory code of fundraising practice will be developed. That is all good, but when it comes to discussing the guidelines I hope that those involved will bear in mind the local experience in Brighton city centre, in my constituency. I am sceptical about the self-regulatory approach on the basis of that local experience.

I shall quote from a letter about chuggers—I could quote from others—from one of my constituents, which was written in September 2005. It reads:

rather than on paying the collectors. It continues:


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That, unfortunately, is not an unusual experience that I have had reported to me by one of my constituents. Others have told me of similar stories.

Local traders have contacted me, particularly about the North Laine area of Brighton, where there are quite narrow streets and many small shops and businesses. Day after day and week after week, many charity collectors gather there. They stand close together and they block shop doorways. It is obvious from what is reported to proprietors that those collectors are intimidating potential customers. Sometimes they are offensive to those who ask them to move on.

All that has happened despite attempts to negotiate a local code with the help of the Public Fund-Raisers Regulatory Association. I have raised with that association issues that have been discussed at meetings of the all-party group on charities and voluntary organisations, and there have been failed attempts with the association to sort out a local code of practice.

On 16 March last year I presented a petition that was signed by 200 people, which states:

the collectors—

that is to the code of practice—

That was the experience after attempts to resolve those issues voluntarily. I spoke to the chief executive of the Brighton and Hove business forum, Tony Mernagh, only last week to ascertain the position now. He wrote in a letter of 22 June:

Tony Mernagh attached an 11-point code, most of which is based on a national voluntary code with some local amendments, a code which, he told me, is still, by and large, being flouted.

For those reasons I have no hesitation, despite the comments of the hon. Member for Cheltenham, in referring to many street collectors as charity muggers. Far too many chuggers have been operating in my constituency and I hope that the proposals that are before us will help to regulate an unacceptable situation. When it comes to Ministers or officials working with local councils or local council representatives on guidelines for a licensing system, I hope that local experience will be considered. From what I read in newspapers, the experience in my constituency is not perhaps unusual because similar complaints are made elsewhere. As I have said, I hope that local experience will be taken into account when drawing up the guidelines to allow local authorities, in issuing licences, to have genuine powers to control the
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location and the frequency of collections and the numbers of collectors involved.

I finish by repeating my earlier recommendation: people should think seriously about whether a spur-of-the-moment decision in the street to sign up to a regular donation to a charity is the best way to make such a donation. Payroll giving is surely a far better alternative.

6.40 pm

James Duddridge (Rochford and Southend, East) (Con): I fully support what the hon. Member for Brighton, Pavilion (David Lepper) said about chugging. While I cannot claim to have been a chugger, I have certainly been a shaker, and I am concerned that, according to my hon. Friend the Member for Isle of Wight (Mr. Turner), I acted illegally. Having encouraged other shaking in Rochford and Southend, East, I hope that I did not fall foul of the Government and will not be arrested on my return to my constituency.

Joking apart, my hon. Friend said that it is sometimes important to make a small difference. From the outset, may I say that I support the Bill, and welcome the changes to trusteeships that make it easier for people to contribute as trustees? However, following my intervention on the Minister, I am concerned that people with learning disabilities cannot contribute as trustees. Like a number of Members on both sides of the House, I offer my constituents, particularly organised groups, the opportunity to visit the House of Commons and, a few weeks ago, I was pleased to receive a visit from the SHIELDS—supporting, helping, informing everyone with learning disabilities in Southend—parliament, which is a group of people with learning disabilities who have been directly elected as councillors to act as an advocacy group in Southend and, more widely, to represent the interests of people with learning disabilities. Last week, it adopted a constitution, but it was distressing for people who had been elected by their peer group to discover that they could not make a contribution as trustees. In fact, they were lumped into a single group with people with general mental incapacity. While those councillors have serious social problems, collectively they are a bright bunch and have a huge contribution to make. It is therefore deeply unfair that they should be thrown together with people who, under the Charities Act 1993, are convicted of offences including dishonesty and deception or who have become bankrupt.

The SHIELDS parliament has got round the problem by using a provision in the constitution to appoint trustees. It states:

Critically, it continues:


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