It has been an interesting debate with contributions from distinguished Members of the
House, including the right hon. Member for Maidstone and The Weald (Miss Widdecombe), my right hon. Friends the Members for Darlington (Mr. Milburn) and for Cardiff, South and Penarth (Alun Michael), and other hon. Members. In the time that I have available, I want to deal with both amendments.
First, I want to bring together the questions of religion and of education, and the central burden of the remarks made by the right hon. Member for Maidstone and The Weald. She asked, Why? Why should we have the principle that all charities must pass the test of public benefit, without a presumption in favour of a few? My answer to her is: fairness. Whether we are talking about the National Society for the Prevention of Cruelty to Children, Eton college or a religious charity, all should have to pass the public benefit test. That seems a pretty basic principle.
The right hon. Lady might say, I agree with your principle, but I think that the practice is going to overwhelm the principle. I am really worried about what this will mean for religious charities. That was the second part of her remarks. I hope that I can reassure her on those points. First, I want to reassure her that removing the presumption that the advancement of religion provides public benefit is not intended to lead to a narrowing down of the range of religious activities that are considered charitable. Nor is the process intended to be onerous for individual religious institutions.
The right hon. Lady talked about social mores. The hon. Member for Cheltenham (Martin Horwood), not for the first time in my experience, made an excellent speech on that point. Case law is the foundation of what we are debating in the Charities Bill and of the legislation on which we are moving forward. We have not put it all on the record in the Bill because that is simply not possiblethat is the complexity of charity law. Yes, modern social mores play a rolethe courts have determined thatbut the foundation is case law.
Miss Widdecombe: I appreciate that it will not be a formal Pepper v. Hart statement, but will the Minister say briefly whether it is his understanding that the fact that a particular religion teaches a traditional and certainly non-modern sexual morality could never be held by the Charity Commission to disqualify that religion from charitable status? It is as simple as that.
Edward Miliband: I can certainly give the right hon. Lady that assurance. Of course, the Charity Commission has to make a case-by-case judgment on those points. She is raising a hypothetical example, but of course it is the case. I thought that her description of what modern social mores meant suggested a grand conspiracy between ourselves, the Charity Commission and the whole of the charities world.
Edward Miliband: I am answering. I do not think that the commission will be able simply to say that, on the basis of the change in modern social mores, somehow a religious charity is ruled out. I hope that that gives the right hon. Lady the reassurance that she wants.
I want to reassure the right hon. Member for Maidstone and The Weald on the point of principle. I also want to reassure her that the burdens will not be onerous for religious charities. As with all charities, public benefit has two dimensions. First, there must be an identifiable benefit. Secondly, it must be accessible not only to the adherents of a particular religion, but to the wider community. However, the Government, the courts and the Charity Commission have recognised that religious activities bring benefits not only to those who take part in them, but to the whole of society. Religion has an important role to play in society through faith and worship, motivating charitable giving and contributing in other ways to stronger communities. Both those dimensions will thus usually be apparent from the doctrines, beliefs and practices of a religion. The Charity Commission is clear that most established religions should not have any difficulty in demonstrating their value to society from their beliefs.
The commission has already begun discussions with the major religions of our country precisely to give them reassurance. I hope that the right hon. Member for Maidstone and The Weald will accept my reassurance, too.
I am pleased that my hon. Friend the Member for Selby (Mr. Grogan) has tabled amendment No. 1 because it gives us the chance to talk about another aspect of public benefit. On Second Reading, I set out several principles of the Governments approach to the charitable status of fee-charging institutions, including private schools, and I want to reiterate them today. I say in passing to the right hon. Member for Maidstone and The Weald that while I think that the bar will be raised, especially for fee-charging institutions that were not subject to the scrutiny of the Charity Commission because of the presumption, I do not believe that I said the words that she attributed to me. However, perhaps we can take that up on another occasion.
Our first principle is that all charities must pass the public benefit test and be continually tested on that by the Charity Commission. The removal of the presumption will lead to that big change. The presumption meant not that there was no public benefit test in all circumstances, but that existing charities were not scrutinised by the commission. The measure is designed to bring about consistency, as the commission has confirmed. The history of this is that when the register of charities was established in 1960, private schools were automatically put on it if they had previously been granted charitable tax relief by the Inland Revenue.
Our second principle is that indirect benefitthe claim that private schools save money for the taxpayer by educating pupils, for exampleshould not be
enough to justify charitable status. That is right, and the view is shared by not only Labour and Liberal Democrat Members, but the Independent Schools Council, which says that indirect benefit savings to the taxpayer should not be enough, given that private schools enjoy the benefits that come with charitable status.
Some hon. Members asked what private schools will have to provide; my hon. Friend the Member for Selby asked whether token benefits would be enough. The Charity Commission will have to make a case-by-case examination, but reassurance is available on the point of principle. The commission said in its briefing earlier this week:
It will not normally be possible to demonstrate public benefit through indirect benefits alone, such as savings in public expenditure.
The schools must thus normally provide direct benefits. However, can those benefits be simply for wealthy people who can afford the fees? Again, the commissions briefing helpfully indicates the way in which it wants to move forward. It says:
Charities which charge relatively high fees must demonstrate accessibility to those facilities or services.
The benefits will need to be extended beyond the narrow class of people who are able to afford fees, and it is unlikely that a token provision will be sufficient. To answer a question asked by my right hon. Friend the Member for Darlington, the Government believe that the benefits should be direct and meaningful. Generally, we believe that a school that does a range of things to widen access through partnerships with state schools and educational initiatives in the local communityI pay tribute to the many private schools that do thiswill find it easier to demonstrate a public benefit.
Our third principle is that the Bill will raise the bar for private schools. I tell the right hon. Member for Maidstone and The Weald that the key point is that this is about fee-charging institutions that previously benefited from the presumption that charitable status was automatically conferred on them. That is why I do not believeif I said this, I misspokethat the bar will be raised for religious charities or charities dealing with poverty. This raising of the bar relies on a Charity Commission with a robust plan to implement it, as the Charity Commission has shown. It is embarking on a worthwhile process, involving the development of principles around the implementation of public benefit. It has promised to look specifically at the fee-charging sector, and it will consult the public about their attitudes. In the case of fee-charging charities, there has not been a directly relevant case for almost 40 years, as we heard, so the commission is right to develop its approach by consulting the public, taking account of the passage of time since in re Resch. The Bill seeks to establish confidence in the charity brand.
The fourth principle of the Governments approachagain, this is importantis that it is for the Charity Commission to take individual decisions about particular institutions. This is necessary because a rural private school miles from a neighbouring state school
has a different ability to co-operate with the state sector than an urban private school, for example. Similarly, the private school for disabled children or those with learning difficulties, which my right hon. Friend the Member for Darlington mentioned, may face different pressures, compared with other types of private school.
All those differences need to be taken into account by the commission. That has made framing a specific amendment to the Bill hard, as has been found by many hon. Members who have tried to do so. The dilemma is between an amendment so wide as to add little to existing law or so precise as to have unintended effects. Over the summer we considered the matter and we were not able to find an amendment that satisfied all the demands.
The amendment tabled by my hon. Friend the Member for Selby, if I may say so, falls into the first category. It does not add to the existing law. His amendment states that in determining whether a body provides public benefit, regard must be had to
any undue restriction on obtaining that benefit.
The nature of the public benefit test, though, is that charitable status is not established if relief is accorded to a selected few out of a larger number equally willing and able to take advantage of itin other words, if there is undue restriction on those able to obtain that benefit.
My hon. Friend said in a recent letter explaining his amendment that the Charity Commission should have to weigh public benefit provided by the school against the restricted access to those benefits. I agree with that, as I have said. From our point of view, the amendment is unnecessary, but we want to see proper implementation of the principles. That is why we will review the effect of the public benefit provisions not five years, but three years after implementation, and if they are not having the intended effect and are failing to raise the bar, we will consider all necessary options. My hon. Friend is concerned to ensure that regard must be had to any undue restriction on benefits. As I have made clear, this is part of the public benefit test. It will be part of the review to determine whether our intentions have been met.
The first point is about religion. Most religions contain beliefs and values that positively affect the relations of believers to their society and to their fellow man. The tangible results of that are much more difficult to prove than results such as poverty reduction or the advancement of education. For that reason, I was happy to move amendment No. 126 and will press it to a Division.
To answer the right hon. Member for Darlington (Mr. Milburn) and the hon. Member for Rhondda (Chris Bryant), who is not in his place, in Committee we pressed for the retention of the public benefit presumption in a number of other areasnot because we believe that people are entitled to money for nothing, but because we believe in less bureaucracy, rather than more, and we know that the Charity Commission is well placed to challenge charities that
are not delivering the public benefit that they should be delivering. The right hon. Gentleman says that the commission is not so well placed.
I am unhappy with the words that emanate from the Charity Commission and from Dame Suzi Leather, whom the hon. Member for Selby (Mr. Grogan) quoted, that she will interpret the provision in the light of current mores. That is very frightening to many religious organisations. It is the Governments ambivalence between proposing change and saying that there will be no change that worries people.