Mr.
Turner: That appears to deal with people of the same sex,
but not with people of opposite
sexes.
Edward
Miliband: That is an interesting point. We would not want
to be
discriminatory.
Peter
Bottomley: While the Minister is looking through his
papers, he might discover references to a stepmother and a
stepson.
Edward
Miliband: I do not believe that it deals with that
eventuality. If I endeavour to take this away and scrutinise whether it
is about cohabiting partners of opposite sexes, I hope that the hon.
Member for Isle of Wight will be satisfied and will ask leave to
withdraw the
amendment.
Mr.
Turner: The Parliamentary Secretary referred earlier in
his remarks on amendment No. 30 to something that I fear happens from
time to time in voluntary organisations. Sometimes somebody does a
piece of work that needs doing and then says, “Hey, you ought to
pay me for that!” Voluntary organisations can be run in such an
informal way and that can lead to some considerable dispute. It is
worse still when such a dispute involves a trustee: first, he will know
the other trustees pretty well and, secondly, he is not entitled to the
money. That is the point that I was endeavouring to clarify, because I
do not think that it is dealt with. Such a situation could be set out
in writing subsequently and, therefore, condition A could be met
subsequent to the work being
done. I am not sure
whether the Minister is inclined to intervene to correct me, but that
was my concern. I accept that there is a requirement that the matter
should be set out in writing before the payment is made, but is there a
requirement for it to be set out in writing before the work is
undertaken? If the
Minister has no other light to shed on this matter, I shall withdraw
the
amendment.
Edward
Miliband: I have some light to shed on cohabitation. Let
me correct the record on that before I return to the hon.
Gentleman’s point. Schedule 5(2)(2) of the 1993 Act is the
saviour on this matter, because it
says: “For the
purposes of paragraph 1(e) above a person living with another as that
person’s husband or wife shall be treated as that
person’s
spouse.” I am reading
from page 115 of Jean Warburton’s text and commentary, for those
hon. Members who wondered. I believe that that schedule also covers
cohabitation and children, including a stepchild and an illegitimate
child, so there is reassurance on that
point. Returning to
the hon. Gentleman’s point about the original amendment, the key
part of clause 36(3) defines the
condition “under
which the relevant person is to provide the services in
question” regarding the
agreement. That suggests that the agreement needs to be in place before
the services are provided. I hope that that reassures the hon.
Gentleman.
Mr.
Turner: It does. I beg to ask leave to withdraw the
amendment. Amendment,
by leave,
withdrawn. Clause
36 ordered to stand part of the
Bill.
Peter
Bottomley: In the past some charity trustees have been
remunerated. A good example is the Wellcome Foundation, which disposes
of very large sums of money and which requires dedicated trustees who
can give a great deal of time. When I became chairman of the council of
the Church of England Children’s Society some 23 years ago, my
predecessor had been remunerated, but a special meeting had been
required to allow that. I hope that trustees may have such arrangements
made in appropriate circumstances, but that such special circumstances
are not very frequent. If people start to believe that there are many
situations in which trustees ought to be remunerated, that is an issue
to which Parliament should return. I hope that it will be possible to
monitor what has happened with reasonable accuracy as part of the
five-year review, so that the House can revisit the
issue.
Edward
Miliband: I agree with the hon. Gentleman: trusteeship is
a voluntary activity and trustee status is important and valued by many
trustees around the country. There should be an exception in cases of
obvious need, but the exception must not become the rule. I hope that
there are enough safeguards in the Bill to ensure that that is the
case. Question put
and agreed
to. Clause 36
ordered to stand part of the
Bill.
Clause
37Disqualification
of trustee receiving remuneration by virtue of section
36
Edward
Miliband: I beg to move amendment No. 56, in
clause 37, page 37, line 11, leave
out ‘(5) to (7)’ and insert ‘(4) to
(6)’. This is a
technical amendment. Clause 37 inserts into the 1993 Act new section
73C, which provides for disqualification of trustees who receive
remuneration under new section 73A from acting as trustees in relation
to the remuneration agreement. The amendment simply corrects the
references in subsection (8) which relate to definitions for the
purposes of the new
section. Amendment
agreed
to. Clause 37,
as amended, agreed to.
Clause
38Power
of Commission to relieve trustees, auditors etc. from liability for
breach of trust or
duty
Mr.
Turner: I beg to move amendment No. 28, in
clause 38, page 37, line 25, at
end insert— ‘(d) a trustee
or auditor of a charitable incorporated
organisation.’.
The
Chairman: With this it will be convenient to discuss the
following amendments:
No. 132, in
clause 38, page 38, line 10, at
end insert— ‘(7) Any
prosecution of a trustee of an unincorporated charitable trust under
section 3 of the Health and Safety at Work etc Act 1974 (c.37) shall
require the consent of a law officer and the Charity Commission and
must satisfy the public benefit
test. (8) A law officer has the
power to stop the prosecution, under this Act or the Health and Safety
at Work etc Act 1974, of a trustee of an unincorporated charitable
trust if it is in the public interest to do
so.’. No.
122, in
clause 38, page 38, line 21, at
end insert— ‘73F Court
jurisdiction The court shall
have parallel jurisdiction with the Commission under section 73D in
respect of the relief of charity trustees of Charitable Incorporated
Organisations.’.
Mr.
Turner: Amendments Nos. 28 and 122 might simply arise from
further misapprehension as to the position of a charitable incorporated
organisation. New section 73D does not appear to provide for a trustee
or an auditor of a charitable incorporated organisation to be relieved
from liability—in other words, to be insured—which I
believe is the purpose of the clause. That is the purpose of amendment
no. 28. Amendment No.
38 goes in the same direction. The Charity Law Association has said
that: “the Charity
Commission has power to relieve charity trustees and
auditors”— of
charitable incorporated
organisations— “but
the Court power has not been extended to allow for the relief by the
Court of charity trustees of a Charitable Incorporated
Organisation.” In
contrast, the court has already power to relieve trustees and company
directors of corporate charities under the Trustee Act 1925 and the
Companies Act
1985.
Martin
Horwood: I am impressed by the hon. Member for Isle of
Wight’s search for loopholes in the legislation, and I am quite
impressed that the Government are still finding one or two typos in the
legislation, despite 70 hours of parliamentary scrutiny, and scrutiny
by some of the most eminent charity lawyers in the land. One of the
hon. Gentleman’s two amendments may deal with a loophole, but
not amendment No. 28. I cannot understand why the additional power is
needed for charitable incorporated organisations, as all charitable
incorporated organisations are charities. By definition, therefore, the
powers set out in new section 73D of the Charities Act 1993 will also
apply to charity incorporated organisations, and they will not have
different books to
be audited. As far as I can tell, amendment No. 28 is unnecessary, but I
look forward to the Minister’s comments on
it. The hon. Member
for Isle of Wight may well have found a loophole with amendment No.
122. I look forward to the Minister’s comments on it, because at
the moment the commission seems to be the sole holder of the power to
relieve trustees and auditors from breach of trust or duty on the part
of CIOs. The courts may well have been missed out of that process. I
view that amendment
sympathetically.
Peter
Bottomley: I shall speak to amendment No. 132. Clause 38
is about the power of the commission “to relieve trustees,
auditors etc. from liability for breach of trust or duty”. It
says: “After section 73C
of the 1993 Act (inserted by section 37 above)
insert— 73D Power to
relieve trustees, auditors etc. from liability for breach of trust or
duty” I do not expect
the Minister to be able to give a detailed response, and it would not
necessarily be proper for him to do so, but it is proper for me to
raise these issues in Committee and to expect to a response, in time,
from Government. “Government” includes Law Officers, the
Department for Work and Pensions, which is responsible for the Health
and Safety at Work etc. Act 1974, and the Minister’s
Department, which has responsibility for
charities. My concern
is relatively narrow; it is about trustees of unincorporated charities.
If I described a situation in less detail than I might, it is because I
am describing circumstances in which it is probable that there will be
a prosecution. There is no prosecution at the moment, so I am within
parliamentary conventions, but I do not want to go so far as to
prejudice in any sense what might properly follow. Also, if I may
interrupt myself, when I was Minister in the Department of
Employment—with responsibility for legislation on health and
safety at work and for the Health and Safety Commission, which
supervises the Health and Safety Executive—almost my first
responsibility was to go to a residential property in Putney that was
the site of a gas explosion, in which people had died. When people ask
me whether I am aware of what happens when unauthorised work or
incompetent work takes place in relation to gas, my answer is yes, I
do. I met the survivors and relatives of those who died.
If there has been an apparent
breach of health and safety regulations, the Health and Safety
Executive has various responsibilities. The people who do not live up
to their responsibilities are liable to prosecution. It is quite
possible that an incorporated body would be liable to prosecution, too,
in certain circumstances. The Health and Safety Executive is open about
its procedures and codes, and I pay tribute to it for that. In a letter
of 10 July to those of us who do some research on the subject, Geoffrey
Podger, the chief executive, lays out what is available—and it
is well known, in any case—so I pay tribute to the HSE for
that.
It is open to the Health and
Safety Executive—it may, in a sense, be its
responsibility—to consider prosecuting not only the workers and
those who supervise them, but the body that is in effect the employer.
Were a charity to be incorporated, individual trustees would not be
open to individual prosecution unless they had done something so
negligent or so deliberate that they opened themselves up to that
possibility. Normally, it would be an incorporated body that would be
exposed to the risk. There are a large number of unincorporated trusts
around the country. Many of those trustees would probably understand
that they could be regarded as employers. They might think that they
have a chief executive and that the chief executive is the person who
provides the employment role, but in fact the trustees do. If the
charity is incorporated, they are exposed to risk.
That is why I think that
amendment No. 132, having two points, properly comes under clause 38.
The first provision that it would insert
is: “(7) Any
prosecution of a trustee of an unincorporated charitable trust under
section 3 of the Health and Safety at Work etc Act 1974 (c.37) shall
require the consent of a law officer and the Charity Commission and
must satisfy the public benefit
test.” Mr.
Podger helpfully points out that the Attorney-General would have the
power to discontinue an action by directing that a nolle prosequi be
entered “in any
proceedings upon indictment at any time after the bill of indictment is
signed and before judgment but not before the bill of indictment has
been preferred. The effect is to put an end to the prosecution but it
does not equate to a discharge or an acquittal and the accused can
still be re-indicted.”
He advises me by extension that the use
of the power is rare and that it is up to me if I want to pursue the
matter with the
Attorney-General. Graham
Zellick, former vice-chancellor of the university of London, made a
similar point in a letter to a law officer, saying that a prosecution
by the Health and Safety Executive is not currently a matter for the
Attorney-General but deserves consideration in the future. The
Attorney-General has power to halt prosecutions, and the particular
matter that I am concerned about has been drawn to his
attention. Graham
Zellick and I are trustees of a trust that had almshouses. With the
Charity Commission’s permission, we sold the almshouses and put
the money into another charity, and homes are now provided to twice as
many people. The events that took place did not take place in one of
the homes that we as trustees had effectively helped to
fund. I turn to the
Charity Commission’s leaflet “Responsibilities of Charity
Trustees: A Summary”. I emphasise that it is a summary, and so
would the Charity Commission if it had the chance. The leaflet, CC3(a),
is dated January 2002, and
says: “If your
charity needs to employ staff, you should give each employee a proper
contract of employment and a written job description making clear the
extent of his or her authority to act on your
behalf.” The
charities with which I am mainly involved—those associated with
the drapers’ livery company—go through a risk assessment.
Each year, we review our responsibilities to see whether any changes
are necessary with the help of our staff. One of the issues with
almshouses is breach of regulations. Under
“Almshouses: Health and Safety” in the risk assessment,
the consequences of failure to comply with legislation are a risk
of “Death or
permanent disability, significant harm or lasting
effects” and could
involve “Moderate
to severe injury to
individuals” or
“Financial
penalties”. Then it lists
actions and controls currently in
place. 5
pm I am not one of
the trustees involved in the incident about which I shall not go into
great detail to put it in a roundabout way, but I could have been. In
some sense, perhaps I should have been. I believe that if trustees
openly and explicitly approve health and safety procedures that
include, for example, giving the instruction that any gas work be done
by a Corgi-registered gas fitter, reasonably practical measures have
been taken. If it then turns out that work within the organisation is
done by someone who is not a Corgi-registered gas fitter, the only way
that the trustees will know that is if they are actually present to
supervise the work or when an employee gives an instruction to someone
not qualified to carry it out. I do not believe that that falls within
what is reasonably practical.
I am not asking the Minister to
respond to that, but I hope that what I have said will be shared, if
necessary by a case conference, with the Attorney-General, a Minister
responsible for charities, a Minister from the Department for Work and
Pensions, someone from the Health and Safety Executive and, I hope,
someone from the Health and Safety Commission as well. In my view, if a
charity explicitly approves a method of working that is required by law
and safe and it then does not happen, the fact that there are
unincorporated trustees should not make it open to prosecution unless
there is a special reason.
I could read out the whole of
Geoffrey Podger’s helpful letter, and there is other
correspondence but I do not think that the Committee needs to be
troubled with it. However, I will make the information available to
anyone who is interested in it. I hope that, if I withdraw the
amendment, which I think it would be proper for me to do, perhaps we
could go a stage further on Report and get a co-ordinated Government
view on the issues that I have been
raising.
| 
