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The SHIELDS councillors, who cannot act as trustees, have asked several members of the community, including me, to become trustees, and I should
certainly like to do so, and urge people in Southend to support those directly elected representatives. It would be much better, however, if the councillors could be trustees themselves.
The SHIELDS parliament and its facilitators have worked closely with the Charity Commission, so it is unacceptable that they should have had to resort to a rather cack-handed way round the problem, as mandating trustees to gather views via elected councillors is hardly the ideal solution. I therefore urge the Minister to take the opportunity offered in chapter 9 of part 2 of the Bill to table Government amendments or accept cross-party amendments to allow people with learning disabilities who can make a contribution to become trustees, particularly, but not exclusively, of charities that work with people with learning disabilities. I accept that a trustee organisation with a critical mass of people with learning disabilities is slightly more challenging from a legal perspective than general groupings, but both groupings are extremely important.
Having made my main point, may I touch on other subjects? I am concerned about the removal of the presumption of public benefit, as it constitutes an attack on schools with charitable status. Members have talked about the direction of travel which, I believe, should encompass foundation hospitals, greater choice in education, and trust schools, and should lead us to the conclusion that more schools, not fewer, should have charitable status. I am concerned, too, about mega-charities that conduct large-scale operations. One cannot look through the appointments section of the big papers without finding jobs with attached salaries that, in some cases, are as large as that of the Deputy Prime Minister. I am concerned, not about the impact of professionalisation on charities’ output, but about that career path, which is detached from reality.
Unlike the right hon. Member for Cardiff, South and Penarth (Alun Michael), who is no longer in the Chamber, I remain concerned about the involvement of charities in political and campaigning activities. I do not wish to mount a general attack on charities, but I am reluctant, or certainly less willing, to give money to organisations such as Oxfam that do good work in Africa, where I have worked, and Christian Aid, because they have been involved in political activities or things that I perceive as political activities. Guidance would create greater confidence in what the Minister described as the charities brand.
I have raised a number of subjects, but the one on which I should like the Parliamentary Secretary to dwell is the question of trusteeships for people with learning disabilities—I would be more than happy to meet him with a delegation to discuss the issue. The SHIELDS parliament, which is a very good organisation, believes that it is unique—I suspect that there are other such organisations, but they have not been brought together—and it has made a good proposal. With the Minister’s help in the Bill, perhaps we can improve its representation.
6.47 pm
Mr. John Grogan (Selby) (Lab):
It is a great pleasure to follow the hon. Member for Rochford and Southend, East (James Duddridge), who made a measured speech which, while based on local
experience, had national implications on which we should all reflect. The highlight of our debate, however, was the moment when my right hon. Friend the Member for Darlington (Mr. Milburn), at the end of a long and thoughtful speech, asked Ministers to satisfy themselves that the public benefit test, as applied by the Bill, will make a difference. In my brief and modest remarks, I should like to ask whether Ministers have satisfied themselves that it will be a rigorous test of public benefit.
The hon. Member for Sutton Coldfield (Mr. Mitchell) characterised some Labour Members as old-fashioned class warriors. I do not look at myself that way: I am a Yorkshireman who does not believe in “summat for nowt”, and I think that all institutions that benefit from the public purse should justify themselves. Representing one of the United Kingdom’s more rural constituencies, I like to think that I have my ear to the ground of middle England. When organisations such as the National Council for Voluntary Organisations, the Royal National Institute of the Blind and Age Concern ask for further clarification in the Bill, I sit up and take notice, and that is what I seek from Ministers.
We have a dream team on the Front Bench. It is a great pity that the Minister for the Cabinet Office is not in the Chamber, as she gave me a great deal of good career advice when she was Chief Whip. Her talent for tact and diplomacy is known throughout the House, as is her closeness to No. 10, and those qualities will be important in securing the passage of the Bill. To complement her strengths, we are lucky to have a rising star in the Parliamentary Secretary, who is close to the Chancellor, speaks about the renewal of the Labour project and, indeed, social democracy, and has demonstrated great intellect in his interventions. I hope to persuade that dream team to just go a little further and ask the questions that my right hon. Friend the Member for Darlington asked.
I refer to the voice of middle England and what the Charity Commission is saying about the Bill. I attended the same briefing that my right hon. Friend the Member for Cardiff, South and Penarth (Alun Michael) attended last week. I noted carefully the words of Andrew Hind, the chief executive of the regulator. He said that there was a worrying lack of clarity in the underlying case law. He certainly did not want inflexible wording in terms of a definition of public benefit in the Bill, but he said that he would like clarification, possibly in the Bill, about the application of this test.
We have all seen the press release from the National Council for Voluntary Organisations and the words of its chief executive, Stuart Etherington. The NCVO says that, at present, the Bill extends the public benefit test to all charities on the basis of existing case law. However, it goes on, for charities that charge high fees for their services, this means that they will have to show only that the less well off are “not entirely excluded”. This does not go far enough. Anyone able to benefit from a charity service must have a reasonable chance of doing so, says the NCVO. Stuart Etherington is quoted as saying:
“Charities have long recognised the need to update charity law, and have pressed for this important legislation. The Charities Bill must protect and promote the charity ‘brand’, by making it clear that only those organisations that benefit the public can be charities.”
We have had a number of suggestions as to how the application of the public benefit test could be clarified in the Bill. The example from Scotland was given, and there are other examples. The noble Lord Phillips in the other place made a suggestion. I do not think that the fact that Scotland has passed one law and we may be about to pass another one can be entirely dismissed. For example, if, to take a completely random example, Fettes in Scotland was ruled not to be worthy of charitable status in Scotland under one regime, could it then apply in England under another regime, and perhaps up ship, and so on? One of the phrases that keeps coming up in many of these amendments concerns charges not being “unduly restrictive”. That has some merit and should be considered by Ministers. After all, the alternative is simply to rely on case law. My right hon. Friend the Member for Darlington, whom I feel very close to on this issue, said that he did not think that it was a sufficient defence for, shall we say, private schools to claim public benefit just on the ground that they saved money from the public purse. But when one considers the only major case in this area in the last 40 years, one can draw precisely that conclusion—that public schools would have that defence. In 1967 the case of Re:Resch, concerning a private hospital run by nuns in Australia, was appealed to the Privy Council. Lord Wilberforce, in giving the judgment upholding the charitable status of the hospital, said:
“It would be a wrong conclusion...to state that a trust for the provision of medical facilities would necessarily fail to be charitable merely because by reason of expense they could only be made use of by persons of some means”.
In other words, the level of charges did not matter. He goes on to justify that by saying that the judgment
“results from the relief to the beds and the medical staff of the general hospital”—
in other words, the saving from the public purse. Therefore, I urge Ministers that, if we are to meet the test set by my right hon. Friend, that the Bill should make a difference, we need to heed the words of the Charity Commission and the NCVO, not old-style class warriors, and look for further clarification in the Bill.
My right hon. Friend and the Joint Committee went much further in one of their musings than I would choose to do and said:
“Nonetheless we believe that the Government should consider reviewing the charitable status of independent schools and hospitals with a view to considering whether the best long term solution might lie in those organisations ceasing to be charities but receiving favourable tax treatment in exchange for clear demonstration of quantified public benefits.”
I would not go that far, but I urge Ministers to look at the question of the application of the public benefit test.
Perhaps my right hon. Friend was reacting to some of the evidence before the Committee. A former public school headmaster, Dr. Anthony Seldon, said:
“There are two very different kinds of independent school.”
I think that he is right. There are what he characterised as the small minority: what my right hon. Friend referred to as up to 50 per cent. of private schools,
according to figures from the Independent Schools Council. Dr. Seldon referred to
“the small minority which are very wealthy which are doing extremely nicely...and which...I do not think are very innovative. They look after themselves and they pay lip service to odd charitable things, but they are a self-perpetuating oligarchy and...they have great wealth, and I think they should be doing much more”.
That is the voice of someone with knowledge of the private sector.
We are talking about £100 million of public money. We are talking about giving 80 per cent. relief on uniform business rates; tax relief on bank deposits and income from investments; the ability to claim back tax paid by benefactors; and exemption from VAT payments on fees—not inconsiderable matters. This test should be a rigorous test.
There are two possible scenarios. I hope that my neighbour, my hon. Friend the Parliamentary Secretary, will listen to the debate and the moderate voices of the NCVO, the Charity Commission and his many friends on the Labour Back Benches who wish him well in his future career, and consider adding to the Bill with regard to the application of public benefit. If he does that, he could create a progressive consensus in the House. Not only those on the Government Benches, but in this instance at least the Liberal Democrats may well be part of that progressive consensus, and we could be faced with a Conservative party which, remarkably today, is to the right of the Independent Schools Council in that it insists that the public benefit test should not apply to private schools. That is a remarkable position. I do not think that the right hon. Member for Witney (Mr. Cameron) has noticed this, and that position may well change by Third Reading. Even so, I think that the Conservative Opposition would oppose such an amendment. Such a progressive consensus could be created. The alternative is probably for an amendment in line with the wishes of NCVO and the Charity Commission to be moved, perhaps from the Government or the Liberal Democrat Benches. Then we would have the unedifying spectacle of those on the Government Benches being divided on the issue. If the renewal of the Government was one of my central concerns, I know which of those two political scenarios I would be aiming for.
6.57 pm
Tom Levitt (High Peak) (Lab): It is always a pleasure to follow my hon. Friend the Member for Selby (Mr. Grogan). We have many interests in common; unfortunately, class war is not one of them, so I will return later to see where we disagree on the issue of public benefit.
I rise as the chair of the all-party group on the community and voluntary sector, a Home Office-appointed chair of the Community Development Foundation, and a former trustee of a major national charity, to welcome the Bill, which has had more than its fair share of scrutiny over quite a long time, as a number of hon. Members have said. But it is a little rich to hear protestations from Opposition Members about the time that the Bill has taken. They will recall that before the 2005 general election, the Bill was one of those that the Opposition was asked to co-operate with in order to give it a fair wind to complete its
parliamentary stages before that election, on the ground that it was relatively uncontroversial. They declined, and that was their right as an Opposition, but that meant that the process had to start again. That is why it is now some six years since the strategy unit report was commissioned to consider the relationship with the voluntary sector in its wider sense. That is why it has taken six years for us to reach this point. Clearly, we are now approaching the end of the process, and I am sure that we will come out with a Bill that we will all be pleased to work with and see implemented.
As my right hon. Friend the Member for Darlington (Mr. Milburn) has said—I think that I have read the same report as him—the public strongly support the work of the voluntary sector. For example, 88 per cent. of people believe that charities are well managed and spend their funds wisely, while 84 per cent. of people claim that they have implicit trust in the activities of the best known charities.
The public misunderstand some aspects of the sector. My right hon. Friend the Member for Darlington has referred to the statistic that while 97 per cent. of people know that Oxfam is a charity, only 15 per cent. of people know that Tate Modern is a charity. The Charity Commission report also states that 90 per cent. of people say that they have received no assistance or advice from a charity, although 75 per cent. of them actually have received assistance or advice. I suspect that that is because people have received what they regard as professional and sound advice, which they do not believe could come from a charity.
Mr. John Gummer (Suffolk, Coastal) (Con): In discussing the public perception of charities, does the hon. Gentleman agree that there will always be some charities which do very good work in unpopular circumstances? Examples include charities that work with certain categories of prisoner and small religious groups of which we may not approve but which contribute in their own way. It is important to recognise that the charity field covers unpopular areas as well as popular areas.
Tom Levitt: The right hon. Gentleman is absolutely right, which is why it is important that there are organisations such as the Big Lottery Fund to make objective decisions rather than simply giving the most money to, for example, the organisation that gets the most votes on a television programme. There has to be public input, but equally funds must be distributed rationally and objectively. Those who are in receipt of services provided by the voluntary sector are impressed by its work, and it enjoys very high levels of esteem and confidence.
I have one slight reservation about the title of the Bill, because I had hoped that we could move on from the word “charity” and deal with issues in terms of the wider sector. I have come across elderly constituents in High Peak who have told me that they are aware of pension credit but will not claim it, despite being in poverty, because “I don’t want charity.” There is still the Victorian idea of charity being a handout rather than a leg-up, but charities and voluntary sector organisations enhance people’s capacity to deal with their own lives and give people a leg-up rather than a handout.
Communities in which the voluntary sector is healthy are themselves healthy communities, and we can judge how healthy and effective a community is by the activities of the voluntary sector within it. I shall provide three examples of how different voluntary sector organisations in my constituency have changed in the past 10 years.
Ten years ago, I was on the management committee of my local citizens advice bureau, a modest organisation in Buxton which delivered advice and which was known for being well meaning. However, access was limited, and the advice was made available to those who knew where the CAB was, who knew how to access it and who could understand the advice when it was given. That organisation has changed in the past 10 years: it is still a voluntary organisation and its principal function is still to provide advice through highly trained volunteers, but it has a professional local leadership, a professional way of working, two fully equipped offices and a sub-office and a contract with the Legal Services Commission to deliver legal aid. It is a much bigger organisation than it was, and many of the volunteers have developed specialist areas in which they advise their clients.
The information and advice provided by Citizens Advice can be accessed by us all through its excellent website, so one does not have to go to an office. It has done something tremendous in my constituency: in partnership with the PCT, it provides a volunteer adviser once a week in every GP surgery in the rural area in my constituency, which has led to some £2 million in previously unclaimed benefits going into people’s pockets in the past two years. Those people are getting their entitlement because a voluntary organisation dedicated to the public benefit has delivered, which is why I was upset when the Conservative and Liberal High Peak borough council decided to freeze its funding for the CAB this year. It took people like me—I swam 100 lengths of Buxton swimming pool to raise £1,700—to make sure that my local CAB was not in deficit this year.
My second example concerns the council for voluntary service in High Peak, which did not exist 10 years ago—my constituency comprises 650 sq m of territory where 75,000 adults live, but there was no co-ordinating body for the voluntary sector. Nowadays, the council for voluntary service is a professionally led organisation which is the main source of advice for voluntary organisations. It provides physical resources, such as office facilities and meeting facilities, and access to funding, and it is an incredible source of training for people who are setting up their own voluntary sector organisations and charities or working in their communities. Through the council for voluntary service, the voluntary sector is well represented on the local strategic partnership between local authorities and other service providers in my area. The council for voluntary service provides an invaluable service, and it has the respect of other public services with which it works to provide rounded, comprehensive, holistic and personally focused services. It is a wonderful example of the sector flourishing and helping people by delivering a public benefit, and I wish that more local strategic partnerships around the country treated the voluntary sector with the importance that it receives in my constituency.
My third example of a local organisation concerns the Nepal Children’s Trust. My constituency does not stretch as far as Nepal, but before I visited that country a few weeks ago, I was contacted by the trust, which began with four ladies in the New Mills area in my constituency. One of those ladies went on holiday to Nepal, where she saw the problems that children were having in one of the world’s poorest countries and decided to do something about it. She has built up a network of a few dozen people around the country who not only engage in fundraising, but go over to Nepal to make sure that schools are built, that the children of prisoners get the support that they need and that children’s human rights are upheld. The trust is doing excellent work, and it is a lovely example of how a group of people with a conscience and a sense of purpose can set up their own charitable organisation and make a difference.
All those organisations will welcome the Bill—for example, if the children’s trust is one of the smaller organisations, it will no longer be required to register. The organisations that I have mentioned are a long way from the traditional image of charities, which was, if hon. Ladies will forgive me, of members of the blue rinse brigade with their collecting boxes. In the past, too many of those people saw volunteering as an end in itself. Volunteering is a vital part of the way in which a community operates, but it is not an end in itself—there must be a purpose. One organisation—I could name it but I will not—was asked to deliver a different service that was better for its recipients, but withdrew from it because the volunteers did not like change.
We can see the same changes happening on a national level. For example, Leonard Cheshire now delivers most of its services on contract to local authorities. Its residential homes are no longer the independent organisations that they were. It is providing an essential part of delivering care but at the same time ensuring that its users are much more closely involved in the delivery of services, and the shape and nature of those services. It has become a membership organisation in order to become more accountable. The Royal National Institute for Deaf People has also taken that step. More than one Member has mentioned its tremendous pioneering work—at a time when I was one of its trustees, although I take no credit for it—in joining up as partners with the Department of Health and delivering a £100 million programme to bring in digital hearing aids on the NHS for the first time. It was able to do that because of its professional approach and because of the economies of scale involved. It was able to use its power and size to get the best possible financial deal on the purchase of those hearing aids, which, as my right hon. Friend the Member for Darlington said, have made a real difference to the lives of millions of people.
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