Alun
Michael: Surely, that is precisely what it does. By
removing the presumption that the general legal definition—that
which is understood in common law—applies to schools and other
organisations that were previously presumed to have a public benefit,
the clause does precisely what he says it does not
do.
Mr.
Turner: If by “raise the bar”, the
Parliamentary Secretary meant “remove the presumption of public
benefit”— [Interruption.] He is saying that he did.
That makes it a lot
easier. I
am concerned that the Parliamentary Secretary has given the impression
to certain hon. and right hon. Gentleman on the Government Back Benches
that he will require independent schools to demonstrate a higher level
of public benefit than they have been required to do so far. I
understand that, currently, there is a presumption and an act by the
Charity Commission would be required
to overturn that, but the test is the same whether there is a
presumption or not. Under the current law, once the Charity Commission
tested whether a charity was meeting the public benefit test or the
presumption was ill-founded, it would apply the same test once the
presumption was removed. I hope that I am making this clear for the
Parliamentary Secretary, because he may shake his head if I am not
doing
so. The
Parliamentary Secretary is not raising the test. He may be raising the
bar and abolishing the presumption, but he is not making the test more
difficult. I have to leave it to him, unless he wishes to
intervene. Tom
Levitt (High Peak) (Lab): I am trying with interest to
follow the hon. Gentleman’s argument. Surely a presumption is a
presumption, beyond which there is no further need for a test. The Bill
says that we need organisations to justify their charitable status. The
hon. Gentleman appears to suggest that Eton, Harrow and all such
schools should not have to demonstrate their public benefit, but
organisations such as the National Society for the Prevention of
Cruelty to Children should have
to.
Mr.
Turner: The selection of examples makes the hon.
Gentleman’s point, and I am sure that that is why he selected
them. However, I am afraid that he is wrong. A presumption is a merely
a presumption: in the absence of other evidence, we presume that public
benefit is met.
A
presumption, however, is not an insurmountable assertion; otherwise,
the Finsbury Park mosque would not have been required to take action to
preserve its charitable status. That mosque benefited from the
presumption that the advancement of religion is a charitable purpose.
There were complaints about how the mosque was used and the Charity
Commission waded in to persuade those who run the mosque to act
differently and bar certain people from using it for certain purposes.
There was a presumption, but it was not irrebuttable. Once the Charity
Commission had found that the mosque was not being used for public
benefit, it asked the trustees to change their behaviour. They
did. I am asking
whether the test in clause 3(3), to which the right hon. Member for
Cardiff, South and Penarth referred, will be the same or whether it is
of a higher level, first in respect of religion, as the right hon.
Gentleman says, secondly in respect of the alleviation of poverty, on
which nobody has uttered, and thirdly in respect of the advancement of
education. If the test is the same, we are fine and dandy. However, if
it is different, the assertion that subsection (3) guarantees no change
in the test is false. I had not intended to go down that avenue,
although it would be useful to do so. I am sure that the Parliamentary
Secretary will respond helpfully to that
point. James
Duddridge (Rochford and Southend, East) (Con): Does my
hon. Friend agree that the issue relates not only to the position
directly after the Bill is enacted? The test could be ratcheted up year
after year, both by Government-appointed charity commissioners and
political pressure, and that would effectively be an extra tax on
independent schools.
Mr.
Turner: That has certainly been a concern. I accept, of
course, that, in the Bill, the Charity Commission is deemed to be
independent, but Ministers make the appointments. When we come to
clause 4, I intend to discuss the process through which the public
benefit test may evolve; that is certainly a concern of mine.
I go back to my amendment. The
second example referred to by amendment No. 4 is that of the
alleviation of poverty. As I said on Second Reading, I find it
difficult to understand how it can be argued with any reasonable
likelihood of success that a charity for the relief of poverty is not
for the public benefit. On Second Reading, the Parliamentary Secretary
said that “if we take the
case of a trust to benefit a few people in one’s immediate
family, one might say that it was set up for the relief of poverty.
However, there might be questions about whether it genuinely provided
public benefit.”—[Official Report, 26 June 2006;
Vol. 448, c. 96.] There is a
presumption that there is public benefit, of course—but it is
rebuttable. In the case under discussion, such use of a trust would be
excluded, because it would be so defined that its membership would be
fixed, which means that it would be a private trust, not a public
trust. A private trust cannot be for public
benefit. I accept that
there may be cases in which the presumption is unreasonable, but those
are cases in which the presumption is rebuttable. I do not want every
charity whose object is the relief of poverty having to go out and
demonstrate that it is relieving poverty in the way the Charity
Commission intends, and thereby expend a huge amount of time and
energy. I do not see how the abolition of the presumption can have any
effect unless charities are asked to demonstrate what Ministers say
that they want them to demonstrate: identifiable benefits. So every
religious or educational charity—not just Eton and Harrow, but
the Isle of Wight Steam Railway, which is an educational
charity—will be asked to spend time and money demonstrating how
it provides public benefit, when the Isle of Wight Steam Railway would
far rather build an extension to join the island line from Shanklin to
Ryde pier head.
Martin
Horwood: The hon. Gentleman seems to forget that the
enormous majority of charities already have to demonstrate public
benefit under current law, because the fourth head of charity requires
it. Is he suggesting that the current requirement to prove public
benefit is enormously onerous for all the thousands of charities that
endure
it?
Mr.
Turner: I am not suggesting that. I simply do not know,
but I do know that some charities have been caught, and I mentioned one
earlier. I did not quote its name because the Charity Commission did
not tell me the name, but I quoted the Charity Commission as saying
that a particular charity that operates for the benefit of police
officers’ widows and orphans was behaving inappropriately by
giving them a Christmas gift of £50. I am quite happy to table
the letter—or whatever one does with papers—so that hon.
Members can read them.
Martin
Horwood: Since that organisation did not make its gifts to
the widows of police officers on the basis of need, it would not meet
the criteria in the hon. Gentleman’s amendment, which excludes
the prevention or relief of poverty, and the advancement of religion.
It would still have to pass the public benefit test even if his
amendment were
passed.
Mr.
Turner: The Charity Commission would have to put that test
to the organisation to demonstrate, but the commission would not have
to ask every charity to demonstrate it. Many charities will demonstrate
it perfectly adequately, but we will be asking charities—and the
Charity Commission, for that matter—to expend a lot of time,
effort and money, and, in the case of the Charity Commission, our money
and our constituents’ money, in demonstrating something that it
is unnecessary to demonstrate unless there is a prima facie case that
those organisations are not conferring public
benefit.
Alun
Michael: Does the hon. Gentleman not accept that any
charity of any size produces a business plan—for its own
internal reasons, never mind any external scrutiny—that
demonstrates how it is pursuing its charitable objects and how it is
therefore delivering public benefit? No extra work is
required.
Mr.
Turner: No, I do not accept that, any more than I accept
that every business has a business plan. Perhaps they ought to have,
but I am sure that not every Conservative association has a business
plan. Mine does, as it happens, but I do not suppose that every
constituency Labour party has a business plan. Of course, that is the
way that things should be done in the best of all possible worlds, with
an infinite number of staff who can spend their time on such matters,
but charities are not like that. [ Interruption.] I did not hear
the right hon. Gentleman’s
intervention.
Alun
Michael: I said that charities are a lot more
business-like than the hon. Gentleman
thinks. 4.45
pm
Mr.
Turner: Many are, but not all are able to act in the way
that the right hon. Gentleman describes, and I am concerned that they
will be forced so to act. If I can find the example that I was given
earlier—well, I cannot find it, but I am sure that I will have
an opportunity to quote it later during the Bill’s proceedings.
Anyway, I received an e-mail from someone who claimed to be a lifelong
Labour voter. I know that lifelong Conservative voters are those who
are not going to vote for me at the next election; the same probably
applies to this lifelong Labour voter. He has taken on the treasuryship
of his local church, but complains that, even in the present
circumstances, the Charity Commission is expecting far too much, and he
says that it is not surprising that one cannot find people who are
willing to take on such responsibilities. Although I accept that the
other charities whose purposes are in the list are required to
demonstrate public benefit, it would be better if we did not impose
that requirement on lots of new ones as
well.
Tom
Levitt: As one spent three very enjoyable summers on the
Isle of Wight in my student days, I certainly take the hon.
Gentleman’s point about the valuable work of the Isle of Wight
Steam Railway Co.
However, I wish to
comment on the point raised by my right hon. Friend the Member for
Cardiff, South and Penarth about the onerous nature of demonstrating
that a charity is doing what it was set up to do. If I were asked to
give money to one of those charities, I would want to know that it was
doing what it was set up to do; if I were a trustee, I would expect
some sort of annual report from the chief executive or the chairman; if
I were an auditor, I would expect the audited accounts of the
organisation to demonstrate that the charitable purpose is being met.
All those things should really be being done now. The Bill raises the
threshold at which charities have to register and so reduces the burden
on smaller charities, but the hon. Gentleman is making a mountain out
of a molehill in suggesting that there is any significant extra work
for charities to do under the
clause.
Mr.
Turner: I cannot judge the size of the mountain,
but we should remember that those charities that do not have to
register are still obliged to demonstrate public benefit. As for the
small charities, if I give money to the Isle of Wight bat hospital, I
know where that money is going, because I can go to that hospital and
see the bats; the same is the case for the Isle of Wight Steam Railway
Co. There is a difference between a small, local charity and a large
charity that requires auditors, business plans and goodness knows
what. I remind the
Committee what happens when a charity is not delivering public benefit;
that is particularly significant to an educational charity. The
document from which I quoted earlier, “Public Benefit—the
Charity Commission’s approach”, sets out what happens
then. It states: “our
action might include helping the charity change its stated purposes or
its activities so that it is benefiting enough of the public to show
public benefit”—
that is
fine— “We
might also use our regulatory powers to enforce change if the trustees
are not co-operating with us, although we anticipate we would need to
do this in only in a few
cases.” That, too, is
excellent.
“However, in extreme
cases, where the trustees are co-operating with us but the organisation
simply cannot in all the circumstances provide public benefit, our
action might include removing the charity from the register and making
a legal scheme where necessary to ensure that any charitable assets of
the organisation will in the future be applied for other charitable
purposes close to any purposes that have ceased to be
charitable.” That
suggests that there are some activities that will cease to be deemed
charitable, and that the charities concerned will therefore lose their
assets. I am worried principally that the abolition of the presumption
of public benefit will put an additional burden on charities and on the
Charity Commission that they are ill placed to
meet.
Martin
Horwood: I would like to draw a little on my experience of
being on the senior management team of a national charity that had to
pass the public benefit test. The Alzheimer’s Society did not
qualify under any
of the first three heads of charitable purposes. The hon. Member for
Isle of Wight seems to think that passing the public benefit test and
maintaining the status of passing the public benefit test is some
terribly onerous and difficult responsibility that involves
lawyers’ fees and heaven knows what else. However, I have to say
that in five years on that senior management team, the public benefit
test did not bother us for one
minute. I
am speaking about a charity that did not provide a benefit to the whole
public. We were quite shamelessly restricting our services for the
benefit of carers and people with dementia, so there is perhaps a case
to be made that we were not providing a wider public benefit and that
we restricted our services. However, most of us thought that if we had
ever been challenged as to whether we were providing a public benefit,
we could have dispatched the argument on one side of A4 faxed to the
Charity Commission, which I suspect would not have wasted any more time
on it than we would have done.
In the
overwhelming majority of cases, charities will have little difficulty
in passing the public benefit test or proving that they are capable of
passing it, should they ever be challenged. I echo the words of the
hon. Member for the Member for High Peak (Tom Levitt) when he says that
a mountain is being made out of a
molehill. In the
specific case of religion, the hon. Member for Isle of Wight seems to
be concerned that it is difficult to demonstrate the benefit of prayer
or religious activity. Through a precedent in case law, which I do not
pretend to fully understand, even religious charities have to
demonstrate some public benefit. It is probably because of the need to
demonstrate that they are advancing religion as opposed to just
practising it. For example, closed orders—I do not know whether
the Poor Clares fall into that category, but I suspect that they
do—do not now qualify as charitable organisations in charity law
because they are practising religion behind closed doors for their own
personal benefit. Therefore, that restriction already
provides.
It is not
beyond the hon. Gentleman’s faculties to demonstrate the benefit
of prayer or religion in a wider sense. It could be argued that
advancing religion for the general public might allow some members of
the public to believe that they were gaining greater insight into the
truth of life, the universe and everything; or that it might bring them
greater comfort; or that it might even help them to recover from
illness. It could be argued that encouraging them to perform an act of
contemplation or meditation might bring peace of mind by the very
process that they were going through. It does not seem difficult to
demonstrate that religious charities could pass the public benefit test
that is in the Bill.
I have some sympathy with the
question that the hon. Gentleman put to the Government. Given the
failure of my earlier amendment, we now have a public benefit test that
advances little from existing charity law. However, for exactly that
reason, given that most charities have no difficulty passing the test
under existing charity law, they would have little difficulty in
passing it under the Bill.
The test is designed to catch
charities that are scams, in which there is obvious possibility of
abuse or of the misleading or corruption of individuals by the
organisation. Those kinds of organisations were failing
the public benefit test before. On that front, the hon.
Gentleman’s amendment poses a practical risk. He is taking the
principles from previous Acts and applying them to a new Bill, which
might have unintended consequences. By putting in a deliberate
statement that there will be a presumption that religious charities
will satisfy the public benefit test, he may bring in religious
organisations that are incontestably religious—whether or not
they believe in a supernatural principle, or one god or many—but
that would not have passed a more general public benefit
test. I am sure
that we can all think of the most extreme examples, such as the Aum
cult who gassed the Tokyo underground, the Branch Davidian sect who
committed mass suicide in Guyana many years ago, or Satanists who would
presumably regard themselves as religious. Under that blanket
presumption, which enables them to evade any further public benefit
test, those type of organisations might seek to claim charitable
status. That is an extreme and absurd version of the argument but there
is a risk that there may be unintended consequences to his amendment
that he has not
considered. On
the general principle of the amendment, the hon. Gentleman’s
arguments are simply wrong. One of the Bill’s great attractions
is that it seeks to modernise the structure of charity law. It will
remove the antiquated and almost stereotypical preference for the
relief of poverty and the advancement of religion and education as
charitable objects that are somehow proper, with everything else having
to pass a second test. I thought that equalisation and levelling the
playing field among all charities enjoyed enormously wide support in
the sector. I am aware of no significant opposition even from religious
charities, and the provision has been supported even by the hon.
Gentleman’s noble Friends in another place. I repeat the words
of Lord Hodgson of Astley Abbots on 28 June. He said that all charities
should “have to meet a
public benefit test, no matter what their purposes
are”.—[Official Report, House of Lords, 28 June
2005; Vol. 673, c.
154.] The
hon. Gentleman is arguing that particular categories of charity,
including private schools such as Eton, Harrow and Winchester, should
be put back in a privileged position. The list of charities that he
would relegate to a secondary position is quite impressive. The RSPCA,
the Dogs Trust, the Shakespeare Globe Trust, the Dartington Hall Trust,
Help the Aged, Age Concern, Youth Music, the Royal Society for the
Protection of birds, Alcohol Concern and even the Police Dependants
Trust about which he spoke earlier would all be relegated to that
secondary status. That is quite wrong in principle.
One of the best things about
the Bill and the reason why it has commanded such wide support in the
voluntary sector is that it moves away from that slightly mediaeval
approach toward a level playing field for all charities in a modern
context. I shall oppose the hon. Gentleman’s amendment if he
presses it to a
Division.
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