Martin
Horwood: If I can be as generous to the Parliamentary
Secretary as he has been to me, I might just assist him. Surely, the
investment is a red herring. The point is that so many changes in the
nature, structure and quality of the property might have taken place in
the intervening years that it would be practically impossible to
disaggregate the value due to the donor from the value that was due to
the
charity.
Edward
Miliband: That is helpful. I agree with the hon.
Gentleman. Amendment
No. 100 is unnecessary, because the terms of
“cy-près” are set out in a wider sense in section
13 of the 1993 Act, a part of which I read to my hon. Friend the Member
for Bishop Auckland. It
states: “where the
original purposes, in whole or in part...have been as far as may
be fulfilled; or...cannot be carried out, or not according to the
directions given and to the spirit of the
gift”.
That is a wider interpretation than would
apply under the amendment, which refers to
circumstances: “where the
original intended purpose is impossible, impracticable or
illegal”. I hope that he
will accept that there is a sound definition for
“cy-près” and will not press his
amendment. On
amendment No. 27, which deals with “may” or
“must”, I hope that I can reassure the hon. Member for
Isle of Wight that his concerns are covered in clause 18. Proposed new
section 14B(3) makes it clear that the matters defined in subsection
(2)—when cy-près happens—relate to the spirit of
the original gift and the desirability of securing that the properties
apply for charitable purposes that are close to the original purposes.
He can be reassured that when the transfer described in subsection (4)
takes place, it will have to be applied for charitable purposes close
to the original purposes. He may ask, “Why use
‘may’ rather than ‘must’”? That is a
good question. The answer is that the charity to which the transfer is
taking place already has similar purposes to those from which the
transfer is made, so it will not be necessary for the scheme to impose
a duty, because the intentions behind the duty will already be
fulfilled. Let me turn
again, briefly, to a matter raised by the hon. Member for Cheltenham.
We have described the right balance between the needs of charities to
be able to make appeals and the protection of donors. I am struck by
what the hon. Gentleman said, particularly about newspaper appeals or
elsewhere and the potential difficulty of setting out a clear space for
a declaration from the individual. He made a good point and I shall
take it away and return to it on
Report.
Helen
Goodman: I am grateful for the moral support of the hon.
Member for Cheltenham, but I am slightly disappointed that the hon.
Member for Isle of Wight did not give a little bit more praise for a
deregulatory measure on which we had cross-party consensus. In view of
the Minister’s words, I beg to ask leave to withdraw the
amendment. Amendment,
by leave,
withdrawn. Motion
made, and Question put, That the clause stand part of the
Bill:—
The
Committee divided: Ayes 11, Noes
4.
Division
No.
7] Blackman-Woods,
Dr.
Roberta Question
accordingly agreed to.
Clause 15 ordered to stand
part of the Bill.
The
Chairman: Before we proceed, it might be useful for
Members to know that there is a likelihood that the Committee will sit
between 8 and 10 o’clock this evening, as well as in the
afternoon sitting between 4 and 7 o’clock. Members might wish to
make the necessary adjustments to their
diaries. Clauses 16
to 19 ordered to stand part of the
Bill.
Clause
20Power
to give specific directions for protection of
charity
Mr.
Turner: I beg to move amendment No. 35, in clause 20, page
21, line 1, leave
out ‘the Commission
considers to be expedient in the interests’
and insert ‘is
necessary for the protection of the
property’. The
amendment is straightforward. It would remove the power of the
commission to do all sorts of things that it might think expedient in
the interests of the charity, and instead restrict the power to things
that the commission considers necessary for the protection of the
charity’s property, which is more or less the position under
section 19 of the 1993 Act. I do not really understand the case for
broadening the commission’s power. The commission would be given
a fairly broad power in place of a fairly narrow one and the power
would be exercisable before the outcome of any inquiry. The commission
would not have to wait for the inquiry before deciding what to do,
whereas later parts of the Bill provide for the commission to do things
following the outcome of an
inquiry.
Martin
Horwood: I am pleased to support the amendment, which
seems sensible. The hon. Gentleman has discovered something that gives
unnecessary latitude to the Charity Commission. If an order under the
provision were the subject of an attempted challenge by trustees or by
a charity, the trustees or the charity would have to find some error in
law on the part of the Charity Commission, yet the commission would
need only to justify its decision in terms of expediency. That seems a
very low test indeed, so the hon. Gentleman’s amendment is well
thought out and should be
supported.
Edward
Miliband: Let me briefly explain the intention of the
clause. At the moment, the Charity Commission has a draconian power to
suspend or remove trustees from membership of the charity, but it has
no intermediate set of powers. A number of cases have arisen in which
annual general meetings have not been held and annual accounts have not
been submitted because of, for example, a dispute with a charity. In
such circumstances, the commission faces Hobson’s choice: it can
either do nothing or take extreme action to suspend trustees.
The intention behind the clause
is to give the commission the power to give specific directions if it
considers that necessary and in the interests of the charity. That
would, of course, be reviewable by the charity tribunal. The problem
with the amendment is that it would restrict the powers to those
necessary for
the protection of the property. The hon. Gentleman says that that is in
the 1993 Act; that may well be the case, and that is precisely the
problem. The commission would be pushed back to either facing the
possibility of using the very extreme power to suspend trusteeship, or
sitting on its hands. The hon. Gentleman raised the
question of use of the commission’s powers not having to wait
for the outcome of the inquiry. It may not be much reassurance, but
that is true of all the commission’s powers, which can be
exercised any time after the start of the inquiry. That has always been
the case. I hope that, on that basis and in that context, the hon.
Gentleman will accept my
reassurance.
Mr.
Turner: I appreciate the Minister’s words, which
are meant to reassure, but am sorry to say that they do the opposite.
The power that the commissioners have at the moment comes into play
when they “are
satisfied...that... that there is or has been any misconduct
or mismanagement in the administration of the charity; or...that
it is necessary or desirable to act for the purpose of protecting the
property of the charity or securing a proper application for the
purposes of the charity of that property or of property coming to the
charity”. I can think of
very few improper ways in which trustees could act that would not, in
one way or another, imperil the proper application of the property,
except when the trustees were merely making decisions on
discretion—they could have spent the money on A, but will spend
the money on B. I do
not see why the commission should need an intermediate power. If the
purpose of the Bill is to enable charities to get on with running their
own affairs, there must be a high level of test before the commission
is allowed to interfere. As the hon. Member for Cheltenham said, the
power is virtually unappealable. [Interruption.]
The Minister says that it is
not unappealable in law, and of course that is right, but it is
unappealable in practice because the commissioners would have to
demonstrate only that they considered it expedient and in the interests
of the charity to do one of the things listed at the bottom of page 20.
Yes, their decision would have to be reasonable and rational, but all
they would have to say is, “We thought it was expedient.”
The tribunal would just say, “Well, you thought it was
expedient—sorry, appellant, you’ve had
it”.
Edward
Miliband: The hon. Gentleman is missing out the rest of
the words in the
clause: “in the interests
of the
charity”.
Mr.
Turner: Yes, the intervention has to be expedient in the
interests of the charity, but the commission may well take a different
view from that of the trustees on what is expedient. That is the point.
It may be expedient to invest money in A or in B.
[Interruption.] The Minister says that it is not that
wide.
Alun
Michael: Surely it is generally the case in law that in
matters of judgment, the judgment lies with those exercising the
judgment, and that what the hon. Gentleman is talking about would not
be in question.
Mr.
Turner: Of course that is normally a matter of law, but
the provision gives the power to take any action that the commission
considers expedient. The right hon. Gentleman shakes his head. My
concern is that it is too broad a power and that it does not require
any demonstration of failure. It requires an inquiry to be established.
It does not require the inquiry to report.
12.45
pm I know that the
Minister has been busy over the weekend and therefore might not have
had a chance to read “Power without Accountability”. It
repeatedly provides examples of the Charity Commission exercising, not
power, but discretion in a way that is difficult to applaud. Let me put
it no stronger than that. It is not going to be in the interests of the
good governance of charities to give the Charity Commission those broad
powers of discretion which, although technically appealable, are
impossible to appeal successfully.
Question put, That the
amendment be
made:— The
Committee divided: Ayes 6, Noes
9.
Division
No.
8] Blackman-Woods,
Dr.
Roberta Question
accordingly negatived.
Clause 20 ordered to stand
part of the
Bill. Clauses
21 and 22 ordered to stand part of the
Bill.
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