Mr.
Turner: That sounds an enticing prospect. However, would
the hon. Lady tell me if the form on which one notifies changes of
trustees is retrospective or is one required to notify a change of
trustees at the time it takes place? If so, would the public collection
certificate have expired by virtue of the change of trusteeship before
the notification was received by the
commission?
Helen
Goodman: As drafted here, the public collection
certificate would be invalid if the trustees had changed. As the hon.
Member said, the annual return is one in which what has happened in the
previous year is reported. That degree of propriety is not one that we
could operate in practice. Therefore I am suggesting that it is run in
a different way and that a subsequent change would be reported and
regarded by the Charity Commission as adequate.
I am concerned that the
administration of that must be smooth and up to snuff from the
beginning. It would be helpful if the Minister would say, for example,
how many charities he thinks will use that and what the capacity of the
Charity Commission will
be.
Martin
Horwood: I am grateful to the hon. Lady for her remarks on
clause 55. I guess that we might be able to discuss that as a stand
part amendment and therefore we may return to it. In the meantime, it
would be useful to distinguish between the holders of the certificate
and all the trustees of the charity. I am not sure that the two are
necessarily the same and that every change of trustee would have to be
notified in those circumstances. Would she, as I would, welcome the
Minister clarifying that when he comes to make his
remarks?
Helen
Goodman: Yes. My understanding is that they were one and
the same. I am sure that the Minister will be able to explain if that
is not correct. The
other point that we need some clarity on is the speed of
turnaround on those public collection certificates. It is important
that that is a speedy process.
The reason that this needs to be effective and not to have teething
troubles from the beginning is that, as all hon. Members will be aware,
many voluntary organisations run on tight margins. If, due to this
system not working, their fundraising is messed up for three or six
months, some of them could go under. That would be unfortunate and not
at all our intention in passing the
legislation. The
Chairman: Order. May I point out to the hon. Lady that she
is discussing matters that could properly be debated under a stand part
debate under clause 55? By debating those matters now, she may be
denying herself—and other hon. Members who may wish to
comment—the opportunity to do that in a stand part debate on
that particular aspect of the
matter.
Helen
Goodman: Thank you, Mrs. Humble. I will not say
anything about my amendment No.139 because the hon. Member for
Cheltenham (Martin Horwood) has more than adequately exposed all the
matters on that. However, I look forward to hearing from the Minister
on that point. Turning
to amendments Nos. 142 and 141, I had in mind the same situation
described by the hon. Member for Cheltenham. As well as Christian Aid,
I am aware that Amnesty International follows a similar process. They
send out packs to their supporters and give them rules as to the way in
which the collection should be conducted. The supporter then collects
the money and sends it
back. 9.30
am There is
concern about clause 53(1)(h)(i) and (2)(b)(i). We should put
obligations on voluntary sector organisations only if they can carry
them out, and it is unrealistic to think that a large organisation can
check all the people who support it. Clause 53(1)(h)(i) is backward
looking, so the commission might be able to prevent somebody who had
caused a problem in the past from collecting again. Paragraph (b)(i),
however, is forward looking, and that is totally unrealistic. No
organisation can simply rely on its existing supporters and collectors,
and it must always be looking for new ones. That is why I am also
concerned about the forward-looking due diligence
provision.
Edward
Miliband: We have not heard from the hon. Member for Isle
of Wight, who is normally a voice of reason on such matters. However,
the amendments are important, although I shall try to deal with them
briefly because we have already been discussing them for half an
hour. The overall
point that I should make relates to public confidence. We are
attempting to strike the right balance by ensuring that there is
sufficient regulation of public collections—so that there is
public confidence in the fact that charities are raising money in a
legitimate way for legitimate purposes—but that such regulation
does not, as the hon. Member for Cheltenham and my hon. Friend the
Member for Bishop Auckland said, place undue burdens on
charities. Amendments
Nos. 146 and 147, which stand in the name of the hon. Member for
Cheltenham, meet the
criteria of the aforementioned Cheltenham principle and are unnecessary.
Amendment No. 146 would add the
words “although not in a
form that might reasonably discourage legitimate
applications” and, to be
honest, it is not one of the hon. Gentleman’s best efforts. The
commission clearly will not want to discourage legitimate applications.
It is committed to making the application process as straightforward
and as easy to use as possible. It intends to publish accessible and
readily understandable guidance to explain its approach to issuing
certificates. That is clearly a new responsibility for the commission
and it will be a big test for it as a modern regulator. The commission
will want to carry out that responsibility in a way that helps
charities to go about their purposes. The amendment is therefore
unnecessary.
Amendment No. 147 makes a more
important point, which it is worth explaining. The part of clause 52 to
which the amendment relates allows the commission to attach conditions
to any public collection certificate that it issues. That might sound
as if it will be onerous for the charity and to the detriment of
collection, but it might in fact facilitate the making of collections.
The ability to attach conditions will enable the commission to issue a
certificate where it might otherwise have to refuse one—for
example, if applicants have been unable to supply all the information
required. The commission might issue a collection certificate, but with
the requirement that the information that has not been provided is
quickly forthcoming. If that part of the clause did not exist, the
commission might need to refuse a
certificate.
Martin
Horwood: The Minister may be misunderstanding my
amendment. There is no intention to delete the clause, and I am quite
content for the kind of conditions that he is describing to apply. I
simply want to add to the Bill so that it states that conditions should
not be in a form that might reasonably discourage legitimate
applications, even inadvertently. I want that clear direction to be
given to the
commission.
Edward
Miliband: The hon. Gentleman makes a fair point, but I am
trying to explain the purpose of issuing conditions in order to correct
the impression that this is about a horrible beastly commission
imposing lots of horrible beastly conditions on nice saintly charities.
That is the impression that he has given. Having said that, if the
charity was under investigation, the commission might need to ask for a
certificate of accounts in relation to the collection in order to
understand the nature of the collection that took place. The amendment
is unnecessary. The commission will not want to attach conditions in a
form that might reasonably discourage applications. I hope that the
hon. Gentleman will withdraw the
amendment. Amendments
Nos. 139 and 148, tabled by my hon. Friend the Member for Bishop
Auckland and by the hon. Member for Cheltenham respectively, concern
the power of the commission in clause 53(1)(e) to make a judgment about
the amount likely to be applied for charitable purposes. Again, we are
talking about public confidence. It might interest the Committee to
know
that this power already exists under the House to House Collections Act
1939 and lies with local authorities, which have to make a judgment
about whether the amount likely to be applied will be adequate or
inadequate. We believe that it is not correct for local authorities to
have that in their powers; it is not a matter for
them. Why is this
provision necessary? Let me give an example that might help the
Committee. It relates to an investigation conducted by the commission
in 2001 concerning the Renal Care and Research Association Ltd. It was
found that although that organisation had raised more than £1
million, only £74,000 was paid in the form of grants to kidney
research bodies—only 7 per cent. of the total funds
raised. If the commission encountered an organisation with such a track
record, it would be advisable for it to be able to think about refusing
a certificate, on the grounds either of excessive remuneration or of
insufficient return to the charity. Obviously, the provision has to be
applied with a light touch and I am pretty confident that it will be,
but not to have this function, which already exists, would take away
from the commission the power to uphold public confidence. The amount
of money that is used for charitable purposes relative to the amount
that comes in from fundraising is an issue, so it is right to have the
function.
Martin
Horwood: There are a number of problems with what the
Minister is describing. First, it is difficult to discuss the renal
charity, as we are not really aware of the facts of the case, but if I
am right it applies to much more than public charitable collections. It
seems to refer to the proportion of its funds that it applied to the
specific function of renal research or whatever it was, whereas the
clause refers
to “charitable,
benevolent or philanthropic
purposes”. That can
include non-research. Virtually all the activities of a charity, apart
from occasional trading activities, must be charitable by law. Any
money that goes to the charity is, almost by definition,
“charitable, benevolent or philanthropic”.
The only circumstance when the
clause might apply is when some moneys are taken out of the process of
collection and given to some other purpose, not to the charity itself.
The obvious one is remuneration but, as I keep saying and the Minister
mentioned it again, that is dealt with in the subsequent subsection. So
what is the mystery cost that is being taken out in the clause? What
are the circumstances in which moneys might be mysteriously extracted
from the collection and given to a non-charitable
purpose?
Edward
Miliband: I think the hon. Gentleman is slightly confused
because the
phrase, “charitable,
philanthropic or benevolent purposes”,
is not about a charity itself. It is
about charities and non-charities—that is, those with
“philanthropic and benevolent purposes” will be able to
apply for a public collections certificate. That is the marginal point
and I want to address the substantive point.
There are other costs as
opposed to the costs of paying a fundraiser. For example, expenses
might be payable to volunteer fundraisers, for fundraising materials,
or for transport costs associated with the process of fundraising.
Other costs might apply outside the specific issue of the costs of the
fundraiser.
Mr.
Turner: One reason I did not speak earlier was that I
wanted to hear the Minister’s explanation and, frankly, I do not
think it was very good. Money that is spent on flags, collecting tins,
transport or expenses for volunteers is just as much charitable as
money spent on fundraisers. That is what the NSPCC told me when I asked
how much it spends on fundraising. If it were not charitable, it would
unlawful to collect at all because all the proceeds of a charitable
collection, by its nature, must be given to the charity or the charity
is barred from undertaking the collection by virtue of its
objectives.
Edward
Miliband: I do not think the hon. Gentleman is right. My
understanding of “it
appears to the Commission that the amount likely to be applied for
charitable, benevolent or philanthropic purposes in consequence of the
proposed collections” is
that it does not apply to the costs of fundraising materials,
fundraisers, expenses payable to volunteer fundraisers, transport costs
and so
on.
Martin
Horwood: I am certain that the Minister is wrong. I have
been a director of fundraising and I believe that all my activities
were charitable because I could not have been employed by a charity to
carry out those activities otherwise. The payment of expenses to
volunteers and all the costs he regards as legitimate if they are paid
by the charity are bound to be charitable. Again, I ask him: what are
the mystery costs, apart from remuneration which is dealt with in the
next clause, that would be taken out of the charitable collection
itself? That is the only circumstance in which the provision could
possibly
apply.
Edward
Miliband: There are two possible reasons for objecting to
this paragraph. One is that the costs that I described could properly
be regarded as charitable, which is the point made by the hon. Member
for Isle of Wight and half of the point made by the hon. Member for
Cheltenham. The other is that the costs are somehow described fully in
paragraph (f). I am
convinced that I am right about this and that the costs that I
described do not fall under the provision in paragraph (e) which refers
to “charitable,
benevolent or philanthropic purposes in consequence of the proposed
collection”—
Martin
Horwood indicated
dissent.
9.45
pm
Edward
Miliband: The hon. Gentleman shakes his head, but I think
he is wrong. If I am right—I think the Committee will have to
take my word on this—is there an issue here?
Let us suppose that there was a
collection for an earthquake in Iran, and £100 was raised, of
which £10 went to help with the earthquake victims and
£90 went to the charity for its expenses and associated costs;
are we really saying that in such a scenario £100 would be
considered to have been applied for charitable, benevolent or
philanthropic purposes in consequence of the proposed collections, and
that this part of the clause is therefore unnecessary? I contend that
that would be the wrong position to
take.
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