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7.37 pm

Mr. Mark Todd (South Derbyshire) (Lab): I am glad to have caught your eye, Mr. Deputy Speaker.

I noted in the early part of the debate the increased willingness shared by all parties to consider the transfer back to the voluntary sector of public services offered for the public good. I have long been a supporter of that since my time as leader of a city council in which we actively supported the voluntary sector through providing a variety of financial and common services, such as accountancy services—many voluntary organisations of all kinds greatly appreciated that. I therefore need no persuasion of the merits of that course of action.

If one steps back 150 years or so, many services that we now take for granted were provided by voluntary—either charitable or mutual—means. There remains much to commend locally based mutual or other voluntary structures providing those services. It helps to create stronger mechanisms of community involvement in the services that people enjoy.

Examples remain. Many hon. Members will have been lobbied about, for example, transferring air ambulance services to the public sector. I have surprised many of my constituents by saying that that may be an inappropriate approach. It is preferable to give better support to the existing, robust voluntary organisation, which provides the service. Simply adding it to the national health service is the wrong answer to the specific problems that the service may encounter.

Let us consider the lifeboat service. Few would describe that as anything other than a vital service that is offered to part of our community. Yet no one would suggest that the state should provide it directly. We acknowledge that charitable and voluntary organisations can often provide major public services, not only smaller, locally based ones.


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Recent years have seen the modernisation of mutual and co-operative law, in which I played a small part. I see this Bill as a further step towards providing a modern framework. My right hon. Friend the Member for Cardiff, South and Penarth (Alun Michael) set out clearly the importance of choice in providing models of control and direction for social entrepreneurs. That is exactly what we should do. There are models that work in particular circumstances, and we should not be prescriptive. We should, however, have a modern set of laws that allow people to proceed with certainty. If we are to facilitate the increased use of mutual and charitable organisations to provide public services, however, we need not only to provide the certainty of law but to address how to regulate them. I listened carefully to those parts of the debate that dealt with the merits of a lighter touch, to which I will refer when I discuss a particular local example.

Two aspects of the Bill are especially welcome. First, the emphasis on public benefit is absolutely right. I commend the Government’s approach in that regard, and I am not that tempted to take a more prescriptive route. I may have the honour to serve on the Committee, and if I do, I shall listen carefully to the arguments for a more prescriptive approach. I will need some persuading, however, that a looser framework in which experience can be brought to bear might not be better. Secondly, the greater freedom to trade that charities will have is welcome and absolutely essential in the modern day.

If we are to encourage the use of such models, however, we need to consider how their functions are to be regulated. The tools to be used must be proportionate to the purpose in which we are engaged. Normally, small charities would carry little risk. However, my experience indicates that a deliberately light touch can attract those wishing to pursue their own interests with minimal observation, to the extent of having no proper means of compelling even such basic methods of accountability as filing accounts and holding appropriate governance meetings. I shall return to that later.

Running a small charity can also be a frustrating activity, and it is only human nature for some to feel inadequately rewarded for their efforts and to feel that perhaps there are other routes to enhance their circumstances in recognition of their efforts. Events in my constituency—I am sad to hear that I am far from the only Member to criticise the commission in this regard—suggest that the commission has only modest tools and rather less will to address those sorts of instincts. That has led me to suggest alternative models of control to those who are interested in establishing voluntary groups in my area. I am afraid that, because of my experience, I have not suggested that people use charitable vehicles for their purposes. Because of what I have seen, I prefer other, better regulated bodies to be used. That also led me to oppose vehemently leaving to the Charity Commission the regulation of trusts that might run individual or groups of state schools. I felt that that was a wholly inadequate approach to the regulation of trusts, and I was relieved that the Government conceded at the last minute that Ofsted would have a function of inspecting trusts as well as the schools for which they were responsible.


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I urge that further thought be given to how to identify risk of malpractice, even in relatively small charities. One approach that I commend is to insist on at least the basic provision—I do not demand audited accounts—of accounts of some kind. Another is to insist on all active charities holding appropriate governance meetings—which do not have to be frequent, but should at least be annual—to determine their continued activity and their officers. I shall press those and other arguments in the Committee if I have the honour to serve on it.

7.44 pm

Mr. Gary Streeter (South-West Devon) (Con): I am delighted to make a guest appearance, on a one-off basis—it is very charitable of me—on behalf of the shadow Department for Constitutional Affairs team. The tenor and tone of this debate, which is on a hugely important subject, has been constructive and good natured.

We all agree that the Government are moving in the right direction, but the Opposition have the job of probing, pressing and improving law as it passes through the House. First and foremost, I commend the Government on moving slowly—not always by design, as the general election intervened—and on taking their time to consult and to try to get right a major reform of a law that, as several Members have said, has been in place since 1601, before the Act of Union. As we know, we had the draft Bill, which was subject to pre-legislative scrutiny—we heard a powerful contribution from the Chairman of the Joint Committee, to which I will return in a moment—and which completed most or all of its stages before falling at the general election. We then had the amended Bill, which was introduced and passed all its stages in another place. The Government are to be congratulated on listening at every stage and on improving the proposed legislation. Much progress has been made, and we look forward to more progress during the remaining weeks of the Bill’s passage.

The job is not yet done, however, as a number of serious concerns remain. It is worth alerting the House to the fact that though there is a wide consensus on the issue, this is not a Bill, if ever there were one, that we should nod through with our eyes half-closed. It is much too serious and important for that. There are a number of pitfalls that need to be avoided. The new Charity Commission will be a powerful institution that can set guidelines to determine which charities that currently enjoy the assumption of public interest will do so in future. We must remain alert to those hugely important new powers as the Bill moves through every remaining stage of its passage through the House.

This is also an opportunity to place on the record the tremendous good that many charities do. As we know, and as many Members have recognised in the debate, society is not just about the state and the individual. There is a huge voluntary, charitable and faith sector in between, which exists to do good, fill the gap and stand in the breach. That is one subject on which all Members of Parliament are experts, as we have examples in our constituencies of unsung heroes—our favourite charities and organisations—who rush around serving other people. Even tonight, as we debate this Bill, countless thousands of people in this
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great country are going out and about serving other people simply because they want to make their lives better. Let us just imagine the gaping hole that there would be in our country if that activity did not happen. Those heroes deserve a legal and regulatory framework that lifts them up, imposes the minimum of regulation, provides the maximum clarity and regulates with a light touch. That will be one of our concerns as the Bill passes through the House.

First and foremost, I appreciate the advent in the Bill of charitable incorporated organisation status. As someone who used to have a proper job as a corporate lawyer—

Mr. Todd: Proper job?

Mr. Streeter: Being a lawyer was a proper job, was it not? What did the hon. Gentleman do?

I used to advise start-up businesses and charities on organisation as a company limited by shares, guarantee, trust and so on. Would it not be great to have one simple, cohesive and straightforward organisational structure that most new charities would adopt? That is a sensible suggestion, and I hope that it becomes fashionable and popular. I hope that investment and effort will be put into producing off-the-shelf templates, which small organisations can pick up to organise their businesses with little delay or cost.

We heard some excellent speeches today. The Minister for the Cabinet Office introduced the Bill in a measured way, as befits legislation of this kind that has wide support. She gave a number of reassurances about how the public benefit test might apply to organisations already benefiting from the assumption of public interest. We must wait to see whether they pan out, but it was reassuring to hear of her belief—I paraphrase—that all, or almost all, independent schools, hospitals and religious organisations ought to pass the public benefit test. I invite the Minister to intervene if she wishes to clarify that.

The Minister also said that each case would be considered and judged on its merits. I should like to hear from the Parliamentary Secretary, when he winds up the debate, how that process will work. We have talked about 190,000 charities. What is the time scale for a case-by-case assessment? It seems to me that it would be a huge job.

My hon. Friend the Member for Isle of Wight (Mr. Turner) made a typically powerful speech. As is his shadow ministerial responsibility, he drew attention to some of the pitfalls that will have to be considered carefully in Committee. He spoke of the difficulties and costs that will be incurred by many existing charities on which will fall the onus of proof that they benefit the public. That process must be clarified. My hon. Friend called for a light touch in regulation, and for accountability. We do not oppose the public benefit test, but as Members in all parts of the House have said today, it represents a controversial and significant change. We are right to probe the Government to confirm that they have thought through the new system, and that it will be introduced with a measure of insight and wisdom.

The right hon. Member for Darlington (Mr. Milburn)—who has not yet returned from what I am sure has been an enjoyable evening—chaired the Joint Committee, and
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the whole House owes him a debt of gratitude for the way in which he did so. He treated us to his experience of these matters. It might be said that he rolled out his progressive credentials at the same time, possibly with half an eye on the future, but we shall see what happens in that regard. He spoke of an opportunity for the charitable sector to offer high quality services and to embark on a real partnership with the private and public sectors. That is exactly what the Conservatives want.

The hon. Member for Cheltenham (Martin Horwood), speaking for the Liberal Democrats, supported the Bill and brought to bear some specialist knowledge from his background, which informed and assisted debate. I think that he slightly misunderstood what my hon. Friend the Member for Isle of Wight had said, but we were treated to the good news that the Liberal Democrats had unveiled a new policy tonight—a policy of consistency. That is warmly welcomed by the whole House. The hon. Gentleman made important points about the need for clarity, especially in the Bill’s definitions and the Charity Commission’s guidelines. That was an important reminder, to which I shall return.

The right hon. Member for Cardiff, South and Penarth (Alun Michael) also has great experience in this field. He spoke of the vibrant and important partnership between the Government and the voluntary and charitable sector. In giving the Bill a warm welcome, he recognised that removing the assumption of public benefit was a courageous step—taking our minds back, perhaps, to the great “Yes, Minister” programmes—but he said that it was the right thing to do, thus nailing his colours to the Government’s mast. He called for clarity on the public benefit test—I think that the whole House wants the Parliamentary Secretary to deal with that important point—and said that the Charity Commission should listen to Parliament. That is crucial—Parliament has expressed itself very firmly, and we want the commission to listen to us. I am one of those who have said, on the basis of our experience in our constituencies and our former lives in the real world, that the commission has not always impressed people by the degree to which it listens and proceeds flexibly, without bureaucracy. We look for better performance in the future. The right hon. Gentleman advised his Front Bench not to be too prescriptive in its definitions, and spoke of the changing and diverse nature of today’s voluntary and charitable sector.

My hon. Friend the Member for Sutton Coldfield (Mr. Mitchell) spoke with great authority, having served on the Joint Committee. He gave the Government 7.5 out of 10—which was pretty charitable, for him—for listening to the Committee and incorporating some of its recommendations, to which I have already referred. The right hon. Member for Darlington has just returned. I know that he has been engaged in important business. As I was saying, my hon. Friend gave the Government 7.5 out of 10, but he hoped for a higher score as we approach Third Reading. He was particularly concerned about certain recommendations that were missing from the Bill in its current form—for instance, those stating that regulation should involve a light touch, that the independence of the charitable sector should not be compromised, that schools, hospitals and religious
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bodies should not bear the brunt of the removal of the assumption of public benefit, and about the recommendation relating to the removal of excepted status from armed services’ mess charities. He urged the Government to ensure that those recommendations were incorporated during the Bill’s passage.

The hon. Member for Brighton, Pavilion (David Lepper) brought to bear his experience of town centre management in his thoughtful speech about charitable collectors—I did not know that they are often described as “chuggers”—and the undesirable and offputting nature of some of their activity. He expressed scepticism about self-regulation in that context. Given his experience, the House should take account of what he said, and we should give more thought to the matter in Committee.

My hon. Friend the Member for Rochford and Southend, East (James Duddridge) expressed grave concern about access for people with learning disabilities to trusteeships of local organisations. The Parliamentary Secretary may be able to say something about that. My hon. Friend made his point powerfully and forcefully. He also expressed concern about large charities spending too much on salaries and political campaigning, and said that more guidance for some would make the public more confident.

The hon. Member for Selby (Mr. Grogan) made one of his typically concise speeches. Indeed, it was so concise that I missed it when I nipped out briefly, but I know that he described his Front Bench as a dream team, which is an interesting concept. He also—importantly—called for the public benefit test to be tightened, an issue to which we will no doubt return in Committee.

The hon. Member for High Peak (Tom Levitt), on the basis of his experience and background, described the tremendous contribution of a wide variety of charities in his constituency. He referred particularly to progress in recent years by, for instance, the council for voluntary service in his area. He illustrated the difficulty of regulating in the charitable sector by giving the example of a group of people who were moved by the plight of some children in Nepal, and set up a charity to do something about it. They stand alongside Oxfam, which has been doing such things for ever, and other great British charities. We have a single system that regulates all of them, and flexibility is very important. I am sure that the Minister took that on board.

The hon. Member for Hove (Ms Barlow) made the important point that all that glisters is not gold. It is no good our thinking that all charities are wonderful and always make wise decisions. The House was moved and concerned to learn of the plight of the hon. Lady’s constituents in Dresden house, about which she made some powerful points.

The hon. Member for South Derbyshire (Mr. Todd) spoke warmly about the role of the voluntary sector. One of his important points was that it is not necessarily true that every voluntary organisation would benefit from joining the state sector. He mentioned the air ambulance service, which we also have in my part of the world. It is sometimes right for
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such services to be outside the state sector, but more clarity, support and guidance from that sector would sometimes be welcome.

We had a good-natured and informative debate. I want to focus briefly on three issues. The end of the presumption of the public benefit test is controversial. It is a significant change for many organisations that have enjoyed that presumption for hundreds of years. We do not know what guidelines the Charity Commission will produce to help people decide what is and is not in the public interest. It has already produced some guiding principles, but it is quite capable of changing those. We do not know what the final guidelines will look like, so this is very much a step in the dark. It is imperative for the House to have as much information as possible about the nature of the guidelines according to which the industry will operate before the House makes its final decisions on Report and Third Reading. If there was a common theme on both sides of the House, it was the need for clarity and certainty, especially for well-established organisations that need to know what hurdles they have to jump to ensure that they are operating for the public benefit.

Martin Horwood: The hon. Gentleman describes the removal of the presumption of public benefit as controversial, but it was not, even among his noble Friends in the other place. Can he now confirm clearly that he is in favour of imposing a public benefit test on Help the Aged and the RSPCA, but not on Winchester and Eton?

Mr. Streeter: The hon. Gentleman made that point earlier. It was not very good then and it is not very good now. I refute that facile intervention. We support the Bill and there will be no Division on it tonight. I am calling on the Minister to provide maximum clarity, especially in relation to the Charity Commission guidelines, on the system under which charitable organisations will operate once the Bill becomes law. The common cry from the House has been for clarity.

Secondly, we are concerned about the independence of the new Charity Commission, which will be a powerful body. As other hon. Members have pointed out, its track record is not of the highest order. We agree that it should be independent of Government. I remember a thousand years ago, when I was a Minister in the Lord Chancellor’s Department, we had a big public debate about whether legal aid should be granted in several high profile cases. I called in the chief executive of the Legal Aid Board and, flexing my muscles, said, “I want things to change.” He looked at me and said, “You have no power over me whatever. Who on earth do you think you are? I will carry on doing as I have always done.” In my opinion we have too many quangos that are not properly accountable. I know that it is fashionable to say that politicians should not make decisions and that we should delegate them to other organisations, but we have gone too far down that path and it is time to counter-attack and make many more of those organisations accountable to Ministers, who are accountable to Parliament. I may be a lone voice on that point, but that is how I feel. I feel a lot better now that I have got that off my chest.


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