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It being after Six o’clock, Madam Deputy Speaker put forthwith the Questions necessary for the disposal of business to be concluded at that hour, pursuant to Order [26 June].

Government amendments Nos. 5 to 12, 118, 13 to 16, 119, 120, 17 to 57, 121, 58 to 87 and 89 to 116 agreed to.

Order for Third Reading read.—[Queen’s Consent, on behalf of the Crown, and Prince of Wales’s consent, on behalf of the Duchy of Cornwall, signified.]

Motion made, and Question proposed, That the Bill be now read the Third time.— [Mr. Michael Foster.]

6.16 pm

The Minister for the Cabinet Office (Hilary Armstrong): The Bill underpins a vibrant and exciting sector, which has a huge growth rate. Since it was conceived, nearly 30,000 new charities have been registered, along with more than 30,000 linked charities. In total, charities spend over £30 billion a year on good causes, and employ more than 600,000 people. There are more than 1 million trustees for such organisations—volunteers who give up their time, and money from their own pockets, to help others. Many Members are involved in charities and causes that are dear to our hearts. It is up to us to ensure that they are regulated in a modern, efficient and easy-to-understand manner.

Although there has been lively and thorough debate about some of the more controversial areas, there seems to be a consensus in the House, in the sector, and among the public at large, that the Bill is a good thing. All Members in this House and Members in another place agreed that the legislation governing charities needed to be updated, and it has been reassuring to know that we are all working towards the same ends.

The Charities Bill has been working its way through both Houses for rather a long time. It was conceived in 2002 in the Prime Minister’s strategy unit and has been mentioned in no fewer than three Queen’s Speeches. Between both Houses, it has enjoyed over 80 hours of debate, and it was considered in draft by a Joint Committee that was ably chaired by my right hon. Friend the Member for Darlington (Mr. Milburn). Therefore, I think that we can safely say that it has been well scrutinised.

The Bill provides, for the first time in English law, a full statutory definition of charity and charitable purposes. In doing so, it removes the centuries-old presumption that some purposes—relief of poverty, education and religion—are for the public benefit. Removal of that presumption will not cancel the charitable status of poverty relief, or of educational or religious charities. But it will require those charities to show that they provide a public benefit, instead of that being simply taken for granted. That will put those charities on the same footing as all other charities, which already have to show—

Angela Watkinson: On the question of public benefit, Christian Hope International, a religious charity based in Harold Wood, in my constituency, does very good works throughout the third world for orphaned children, but it does not provide a public benefit to United Kingdom taxpayers. Can the
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Minister assure me that, even though the benefit that it provides is not to this country, its charitable status will not be affected by the Bill?

Hilary Armstrong: I can give the hon. Lady that absolute assurance, so long as that charity meets the terms of charitable organisations, and so on. Organisations such as Oxfam and Christian Aid, which do such important work in the developing world, are not anxious in this regard, and I am sure that the charity that she mentions can share their confidence about the way in which the Charity Commission will view such work.

Tom Levitt: The House will welcome my right hon. Friend’s assurance about international charitable work; of course, such work has never been confined to these shores. But was it not the Opposition who, in the other place, were talking about tabling amendments to delete the international element from the Bill?

Hilary Armstrong: I was not going to be as contentious as that—I am trying to bring the House together—but my hon. Friend makes a valid point. Many Labour Members have long sought to get international work on to the political agenda, and this Government are very proud of the fact that we have indeed got international development firmly on to the agenda. Indeed, even Opposition Front Benchers now want to support such efforts, so, despite what was said in the other place, we have seen real progress on that front in recent years.

The Bill will put religious and educational charities and those dealing with poverty relief on the same footing as other charities, which already have to show, before they can be accepted as charities, that they provide a public benefit. The Parliamentary Secretary, my hon. Friend the Member for Doncaster, North (Edward Miliband) spelt out on Report the Government’s view of public benefit.

Andrew Selous: I would be extremely grateful if the right hon. Lady confirmed that, as her colleague Lord Bassam of Brighton said in the Lords on 3 February 2005, the proselytising activities of religious charities will still be deemed to be a public benefit. In Committee on 4 July, the Parliamentary Secretary said that he could offer reassurance so far as missionary work was concerned. Given that the Charity Commission will interpret these matters, I should like the right hon. Lady to put it on the record that proselytising activity will still be deemed to be a public benefit.

Hilary Armstrong: It certainly will; my understanding, based on my discussions with the Charity Commission, is that it has no problem with that at all.

As well as putting public benefit at its heart, the Bill gives the Charity Commission a new objective of promoting public awareness of, and understanding of, the public benefit requirement. The commission will have to prepare, consult on and issue guidance on public benefit. That guidance will explain how the
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commission intends to go about ensuring that charities meet the public benefit requirement, and what will happen to charities that do not. We know that the commission is determined to apply the public benefit requirement with appropriate rigour.

These changes are intended to reaffirm public benefit as the foundation of charity, and we are confident that they will. Over the years following the Bill’s enactment, we expect charities, especially those whose claim to be for the public benefit is in doubt, to expand the public benefits that they provide and to become increasingly transparent in explaining publicly the range and quantity of those benefits. Those are our intentions and expectations.

Under the Bill, we will have a duty to review the operation of the Act and to report to Parliament. We are in negotiations about which Select Committee will take responsibility for activities under the Bill and other activities that have recently come into our Department. The review will consider whether the changes to public benefit and the definition of charity more widely are meeting the expectations of the Government, Parliament, the charitable sector and the public. If we find that expectations are not being met, we will consider what action needs to be taken to put things back on track. We are required to start the review within five years of the Bill becoming law, but we are free to carry it out sooner, and I am happy to commit the Government to review that part of the legislation within three years. Defining the nature and scope of charity, and the requirements for charitable status, is of fundamental importance. We intend to get it right for the long term.

I thank the Committee, including its Chairmen, the hon. Member for North Thanet (Mr. Gale) and my hon. Friend the Member for Blackpool, North and Fleetwood (Mrs. Humble). I particularly thank the two Opposition spokesmen, the hon. Members for Isle of Wight (Mr. Turner) and for Cheltenham (Martin Horwood), who have worked with us in an open and constructive manner at every step. They have been fundamental in securing the Bill’s progress though the House. I am even given to understand that a new principle, “the Cheltenham principle”, was born in Committee. It was identified by my hon. Friend the Member for High Peak (Tom Levitt) as,

Martin Horwood: The right hon. Lady might be unaware that earlier today the principle had to be renamed as that very proposal emerged as a Government amendment. It is now “the High Peak principle”.

Hilary Armstrong: I think that the arguments for that proposal were slightly different today.

Tom Levitt: The point that came across clearly in Committee was that nearly all Liberal party policy, on almost anything, is made on the basis of being harmless if not entirely necessary.

Hilary Armstrong: My hon. Friend is intent on enjoying himself tonight, and I do not blame him. I know how long he, too, has waited and worked for the
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Bill. He therefore has every right to enjoy its final passage through the House.

Given the length of the Bill’s life, it is also important to acknowledge the contributions of my hon. Friends the Members for Wythenshawe and Sale, East (Paul Goggins) and for Slough (Fiona Mactaggart) as Ministers formerly in charge of the Bill during this and previous Sessions, and of my right hon. Friend the Member for Darlington (Mr. Milburn) in chairing the Joint Committee that scrutinised the draft Bill. I have mentioned my hon. Friend the Member for High Peak, but I also thank my right hon. Friend the Member for Cardiff, South and Penarth (Alun Michael), who assisted me, and my hon. Friend the Parliamentary Secretary, in our thinking on the Bill.

I also thank the Charity Commission for its invaluable contribution to the Bill. Charity is at the heart of the Bill. A strong charitable sector is a sign of a healthy society, and it is our duty to maintain a safe, modern regulatory structure to surround it. The Charities Bill is a much-needed update to charity legislation, and I commend it to the House.

6.29 pm

Mr. Andrew Turner: I thank the right hon. Lady for her kind words addressed to me and to my hon. Friends on the Committee. I agree that the Bill has had the longest gestation of any of which I am aware. It has been scrutinised in the House of Lords twice and in this place once and a bit, as well as being scrutinised by the Joint Committee, of which the right hon. Member for Darlington (Mr. Milburn) was Chairman. I came to it late, and the Parliamentary Secretary came to it even later. At various points during the Committee stage we might have formed the view that we should not have started from here, but here is where we did start, and I think that we have reached a satisfactory destination.

I am particularly grateful for the reassurances from the Minister for the Cabinet Office about scrutiny. The Charity Commission will be an enormously strong and powerful quango that, as my hon. Friends have pointed out, will have power to revoke or indeed grant charitable status. There are concerns about how it will exercise that power, and it is good to know that a Select Committee will scrutinise it. I wish the right hon. Lady well in her discussions with Committee Chairmen.

Let me first thank the Parliamentary Secretary. It was a pleasure to work with a Minister who listened carefully and sought honestly to deal with all the inquiries fired at him from all sides—including, on occasion, his own—in the best possible way and in the best possible traditions of this place. We want to achieve a good deal of consensus on Bills of this kind, and I think that in this case consensus was largely achieved, but it was not consensus for the sake of consensus; it was agreement on good legislation, and I pay tribute to the Parliamentary Secretary for helping us to achieve it.

I thank the charities team—originally in the Home Office, subsequently in the Cabinet Office—for their assistance. They answered questions at short notice, and also replied to a multitude of letters. I thank the Charity Commission’s staff, with whom I think it fair to say I have had robust discussions on a number of occasions: sometimes I have been persuaded, sometimes
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not. I thank the many charities that have contributed to proceedings on the Bill, and their representative organisations. Without evidence from charities large and small at grass-roots level, this would not have been such a good Bill. I particularly thank the Charity Law Association. One or two of the amendments that the Minister commended originated not from my pen, but from that of the association.

I thank my colleagues who were members of the Committee—my hon. Friends the Members for Worthing, West (Peter Bottomley), for Upminster (Angela Watkinson), for Wellingborough (Mr. Bone) and for Rochford and Southend, East (James Duddridge), some of whom have been present this afternoon. I also thank the Committee Chairmen, my hon. Friend the Member for North Thanet (Mr. Gale) and the hon. Member for Blackpool, North and Fleetwood (Mrs. Humble). Finally, I pay particular tribute and give particular thanks to my researcher Tim Sheppard, who has now gone on to greater things but who saw me very well—at least, I thought so—through the Committee stage.

One or two minor issues remain, which we were unable to discuss on Report. In particular, there is the question of access to the tribunal. We are very pleased that there is to be a tribunal to provide an intermediate post between a Charity Commission decision and judicial review, but we are anxious about whether charities will be able to afford to face the commission in the tribunal. We do not want the commission to spend a lot of public money on lawyers when small charities do not want to spend charitable money on them. We are also anxious to ensure that justice is not only done but seen to be done in the tribunal. I hope that the Minister will have one or two things to say about that.

The Minister for the Cabinet Office mentioned a review that would consider public benefit, and said that if there were not the evidence of public benefit that Ministers would like to see, they would consider what action was needed to put things back on track. She has committed herself to beginning that process within three years. If the Conservatives inherit such an inquiry or review, we will be happy to continue it and to take the results to legislation if necessary.

I am, I must say, a little concerned about the fact that having worked as hard as we have—and, more importantly, given the hard work of so many other people—we are bringing forth what may turn out to be interim legislation. I hope that it will not be. I hope that the wishes and desires of the Government, the charity sector and Members on both sides of the House will be met successfully by the Bill. However, I am concerned that conflicting signals have been sent, even at Report stage, on exactly what the Bill means and, in particular, on public benefit. It is not satisfactory to leave to a quango, however well intentioned or distinguished its members, decisions not of administration, but of policy.

I fear that the Parliamentary Secretary has made comments that he hopes will be taken on board by the Charity Commission and interpreted as policy, but that were never put before this House in the form of amendment or legislation. If the commission responds too well to Ministers’ expressed wishes, or the Government try to smuggle amendments through in the form of statements of policy, wishes, desires and guidance, it will spend
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much more time than it would wish before the tribunal. This House is the place to make legislation: quangos are not. Their job is to implement and, where necessary, interpret legislation, and we have not been entirely fair to the Charity Commission in leaving it with such a broad canvas and range of opinions as have been expressed today but not clearly represented in the wording of the Bill. That is my only reservation.

The Bill is much improved by the effective scrutiny it has received, and it is a great improvement on the previous legislation. I am pleased to have been involved in it, and I thank the Minister for his assistance.

6.37 pm

Alun Michael: I welcome what my right hon. Friend the Minister for the Cabinet Office has said to reinforce the commitment to early parliamentary scrutiny. That is one of the undertakings given by Ministers that have helped to create the spirit of consensus and movement arising from the legislation.

I wish also to congratulate the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Doncaster, North (Edward Miliband) on the exemplary way in which he has taken the Bill through the House. It is quite a challenge to take on a Bill such as this in the first stages of one’s ministerial career, and he has done an outstanding job.

The Bill will help to clarify the meaning of charitable purpose, as defined in clause 2. That definition is now clear and includes issues such as animal welfare, which many of us have wished to see expressly set out in legislation. Probably the most important aspect is the creation of a level playing field in the application of the public benefit test. That is an excellent development.

The Bill takes the values of charity, which have been tried and tested over generations, and reinterprets them for a modern age. Fortunately, they have not been interpreted too narrowly, which was a danger had we over-amended the Bill, but in a way that will give the Charity Commission authority in taking its work forward. It is important that the commission ensures that fee-charging charities take active steps to mitigate the impact of fees and maximise the public benefit, as transparently as possible. The outcome of those steps must be to ensure that someone who is able to benefit from a charity’s services and who is eligible to do so has a reasonable chance of doing so.

I referred earlier to a conversation with the chief charity commissioner and she has confirmed that the words I am using correctly interpret her position, and I hope that that will be of some comfort to the hon. Member for Isle of Wight (Mr. Turner). On method and timing, the chief commissioner confirmed that while the responsibility to meet the legal requirements and satisfy the commission lies with the trustees of each charity, she will encourage sectors to work with the commission to develop good practice guidelines and to work progressively towards clear standards, and to develop the ability to demonstrate how they are doing so. In other words, it is an engaged process—a relationship with charities of a very positive sort.

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