Clause
5Special
provisions about recreational charities, sports clubs
etc. 5.30
pm Question
proposed, That the clause stand part of the
Bill.
Mr.
Turner: The hon. Member for Bishop Auckland referred to
the clause some moments ago. My worry, which arose before she raised
that matter, is that a
“registered sports club
established for charitable purposes is to be treated as not being so
established, and accordingly cannot be a
charity.” I understand,
of course, that, if the club were registered under the Recreational
Charities Act 1958, certain provisions would apply to it, but if a
club—as is now possible and has been so in the
past—becomes a charity by virtue of its sporting activity and
then becomes a registered sports club, what is the position of its
assets? When an organisation ceases to be a charity, it loses its
assets. What will be the consequences of that treatment of a sports
club that is a charity, but which then chooses to register under the
provision? Lynda
Waltho (Stourbridge) (Lab): I draw attention to subsection
(3) because I am particularly worried about the proposal to omit miners
welfare trusts from the special provisions category. I am sure that
right hon. and hon. Members have experience of such trusts. I have a
miners welfare association in my constituency. The Beech Tree Miners
Welfare Association in Wollescote provides great assistance to miners,
ex-miners, their families and widows. It assists with matters like aids
and adaptations. It is its centre of the community. Most community
events take place there, such as family weddings. It is a polling
station. It runs youth clubs and has all sorts of recreational
facilities for the whole community. It is most definitely of great
benefit to the community, so I am greatly worried that it is to be
omitted. Will my hon. Friend the Parliamentary Secretary reconsider the
special provision to ascertain whether it is necessary to omit miners
welfare association
charities?
Peter
Bottomley: Before the Minister responds, I wish to say
that the notes on the clauses do not make clause 5 clear. I was not
sure whether to read subsection (3), under which miners’ welfare
trusts are omitted, without submitting it as an exception to the change
that the clause makes or whether in light of the fact that they will
cease to be charities. My guess is that it is the first assumption
rather than my second, but no doubt the hon. Gentleman will be able to
the help the Committee about
that. Subsection (4)
states: “A
registered sports club established for charitable purposes is to be
treated as not being so established, and accordingly cannot be a
charity.” If a
club had charitable status, should not the clause read “ceases
to be a charity”? If so, what will happen to the assets or does
that apply only to those charities and clubs that purport to be
registered after the Bill becomes an Act?
Let us consider an organisation
that is not a club, such as the British Olympic Association. Is that
charitable? If so, how do we know whether it is covered under the
Bill?
Edward
Miliband: It is a great joy to respond on the clause,
which is a bit of a rag-bag, sweeping up matter on part 1. I shall
really excite the Opposition by saying that part of the clause is
motivated by a desire to be compatible with the European convention on
human rights. I thought that that would cause some gasps. Let me
explain what the clause does, because as the hon. Member for Worthing,
West said, it is not clear.
The first part of the clause,
up to the end of subsection (2)(b), deals with the problem that the
Recreational Charities Act 1958 makes it charitable in certain
circumstances to provide recreational leisure time facilities either
for the public as a whole, or for women only, but not for men only.
That element of discrimination arguably makes the Act incompatible with
the ECHR. Subsection (2) therefore makes it charitable to provide
recreational leisure time facilities for men only as well as for women
only, or for the public as a whole. The only alternative to that would
have been to rule out women-only charities, which we feared could
adversely affect women’s institutes, among others. In order to
comply with the principle of non-discrimination, we have allowed for
men-only charities. We know better than to take on the
WI.
James
Duddridge: A bright
future.
Edward
Miliband: Indeed. Subsection (3) deals with miners welfare
trusts. I note the concerns of my hon. Friend the Member for
Stourbridge (Lynda Waltho) on this issue, and I promise that I will
report back on this matter on Report, and that I will make further
inquiries into it. The provision is being repealed because it is also
seen as being incompatible with the ECHR, because it discriminates in
favour of a certain occupation as against members of other trades or
professions. Before
members of the Committee become alarmed, I should point out that there
has been extensive consultation with the Coal Industry Social Welfare
Organisation on this issue to find a way to enable the 330 miners
welfare trusts to continue their good work. As the consultation took
place before I became a Minister, I shall meet representatives from
CISWO and other miners welfare trusts. We will do further research on
the position of such trusts, and I will report back, as my hon. Friend
asks, on Report. Miners welfare trusts that allow entry to people other
than miners will not be affected and will continue to qualify. I think
that in practice—I have to be careful what I say
here—other organisations should also qualify as having
charitable purposes with little effort, but we need to research that.
Further work must be done, and I will report
back. The
final part of the clause deals with sports clubs. Subsections (4) and
(5) prevent a sports club that is registered as a community amateur
sports club, or CASC, from also being a charity. That is because CASC
status and charitable status are meant to be separate options for
small, community-based sports clubs, because there are different tax
and regulatory regimes for CASC
organisations. We certainly do not want to get rid of CASC status,
because it has been widely welcomed in the amateur sports club
community. Given the different tax and regulatory regimes, clubs could
not be covered by both the CASC and charities regimes. Hence, the
slight ugliness of this part of the
clause. As to what
happens to organisations that might transition from one to another, my
understanding is that it will continue to be possible for a CASC to
move to charitable status and vice versa, which is exceptional in
charity law. I hope that that reassures the Conservative spokesman and
the hon. Member for Worthing,
West.
Peter
Bottomley: This is a serious issue and it is useful for
the Committee to hear the background to the sports club change.
Incidentally, I am sure that the Committee will welcome what the
Parliamentary Secretary, Cabinet Office said about the miners trust,
but he may want to get his experts to look at organisations that are
not clubs and do not have premises, such as associations of people who
have retired from work in the Royal Mail, local government, national
civil service and so on. I suspect that there is no problem because the
provision may be tied to property, but if I am wrong the Minister may
want to help the House with a statement or some words on
Report. On community
sports clubs, if they started as a charity and had it written into
their articles that if they ceased to be a charity they would be
required to yield up their assets to another organisation, they might
be involved in turning into a completely new organisation with extra
costs as a result of this legislative change. If the Parliamentary
Secretary has time, it would be worth him double checking that he will
not force innocent bodies into paying a lot of money to lawyers to go
through a change of form. If that can happen automatically, the
Committee and, later, the House will accept what he said, but it might
be worth double checking that to be
sure. The
Minister may also want to clarify the position of recreational
charities with premises and those who provide activities that may not
take place on their own premises. I have no doubt that in tax law the
community sports facility concession is equivalent to that available to
charities with perhaps some change on VAT. He may want to check that it
is not tied to premises and that others will not be caught
unnecessarily. I am not accusing him of being malevolent, but the
matter is tricky and words of assurance do not work if all the
possibilities and circumstances of those involved have not been
checked.
The
Chairman: Hansard may record that that was
an intervention and not a speech. At this stage, I admonish all hon.
Members to keep interventions relatively
brief.
Edward
Miliband: Thank you, Mr. Gale. The hon. Gentleman
obviously knows far more than I do about community amateur sports
clubs, which play an important role. My understanding is that if a
charity wants to become a CASC, it can start a new CASC and pass its
assets over. The new CASC would then have charitable purposes without
being a charity but would have all the benefits of charitable
status.
Peter
Bottomley: This will be brief. Unless there is a provision
in the legislation dealing with CASCs that allows a charity to pass its
assets to an organisation that is not a charity, the Minister may be
providing more reassurance than the legislation provides. It would be
helpful if he could clear up the matter—if not today, then
soon.
Edward
Miliband: I certainly do not want to go any further in
trying to clear it up today. I will return to the matter on Report to
clarify the precise position relating to the transitional issue between
CASCs and charities that are sports
clubs. Question put
and agreed
to. Clause 5
ordered to stand part of the
Bill. Clause
6The
Charity
Commission
Mr.
Turner: Hon. Members may have observed that amendment No.
5, which I thought was a jolly good amendment, was not selected for
debate.
The
Chairman: Order. I am absolutely certain that the hon.
Gentleman is not going to challenge the Chair’s selection. The
sad fact is that, whether he likes it or not, amendment No. 5 was
defective, which is why it was not
selected.
Mr.
Turner: I was about to confess as much, Mr.
Gale. It was defective. None the less, this is the clause on which we
debate the accountability of the Charity Commission. On Second Reading,
the Parliamentary Secretary, kindly
said: “Labour
Members are sympathetic to the notion that there needs to be rigorous
Select Committee scrutiny of the work of the Charity Commission. The
Home Affairs Committee has a lot on its
plate.”—[Official Report, 26 June 2006; Vol. 448,
c. 98.] The
hon. Member for Ealing, North (Stephen Pound) then intervened and took
him down a completely different avenue, so the Parliamentary Secretary
was unable to say what I anticipated: that he accepted that it was a
jolly good suggestion, and that he would incorporate it into the Bill
forthwith, by means of an amendment of his own. He did not have the
opportunity to do that, but I give him that opportunity
now. 5.45
pm A number of
representations have been made that there should be parliamentary
scrutiny of the Charity Commission. The Joint Committee said, at
paragraph
181: “The other
side of independence from Government is that the Commission should be
accountable to Parliament. We were concerned that more needs to be done
in this regard. There seems to us to be an ‘accountability
gap’.’ Paragraph
186 went on to “recommend
that the Home Affairs Select Committee have an annual evidence session
with the Charity
Commission.” The Joint
Committee made further recommendations, too. I support that
recommendation; indeed, I went slightly further, and proposed
specifically—
Edward
Miliband:
Ineffectively.
Mr.
Turner: Specifically, but ineffectively, that the
commission should be accountable to a Select Committee. That was out of
regard for the fact that, as far as I know, there is no Committee
responsible for the activities of the Chancellor of the Duchy of
Lancaster, so I did not know where to put that
responsibility.
Nevertheless, I have experience
of the Education and Skills Committee, to which a similar
non-ministerial department, Ofsted, is accountable in practice, if not
in law. That is immensely helpful. Ofsted had two hearings a year
before the Select Committee; those hearings generated substantial
reports that covered a wide range of Ofsted’s activities,
including changes to its responsibilities, the implementation of new
legislation, value for money, and the means by which Ofsted develops
its relationship with schools. I am sure, Mr. Gale, that you can see
the analogies with the Charity Commission emerging. It will have to
develop its relationship with charities and implement new legislation.
It will have an awful lot of money and will, I hope, deliver good value
for it. On the
Education and Skills Committee, I was able to question the decisions of
Ofsted. For example, I questioned why it defined a particular local
education authority as being “satisfactory” when in fact
it was deeply unsatisfactory in a number of particulars. I am pleased
to say that that local education authority is no longer under Liberal
Democrat control, partly, I am sure, as a result of the answers that I
got from Ofsted. The point is that the commission needs to be
accountable. It is fine—excellent—that it is made clear
that the commission is not under the direction of any Minister of the
Crown, but it has to be under the direction of someone. In my view, a
parliamentary Select Committee is where that accountability would
appropriately lie. In line with the suggestion of the Association for
Charities and many other organisations, I hope that the Minister will
find a way, on Report, to bring us some good news on how the commission
will be accountable in
future.
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