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Session 2005 - 06 Publications on the internet Standing Committee Debates Charities Bill [Lords] |
Charities Bill [Lords] |
The Committee consisted of the following Members:Mrs E. Commander, Committee
Clerk † attended the
Committee Standing Committee AThursday 13 July 2006(Afternoon)[Mr. Roger Gale in the Chair]Charities Bill [Lords]1
pm
The
Chairman: Good afternoon, ladies and gentlemen. Before we
proceed, I understand that having decided not to sit on Tuesday evening
the Committee is now considering sitting later this evening. That, of
course, is entirely in order and I am perfectly happy to take the
Chair, as I am at the service of the Committee. Mrs. Humble,
however, is not available. That being so, if we run past a certain
point—and it will be the Chairman who will decide when that
point is—I shall suspend the Committee in the interests of the
comfort of both the staff and, dare I say,
myself.
Clause 67Statements
indicating benefits for charitable institutions and
fund-raisers
Amendment moved [this
day]: No. 128, in clause 67, page 71, line 14, at end
insert— ‘(6) After
subsection (9)
insert— “The
Charity Commission shall have power to initiate criminal proceedings in
respect of offences under subsection
(9).” ’.—[Mr. Andrew
Turner.]
Amendment No.
131, in clause 68, page 73, line 22, at end
add— “60C Fundraising by
sale of products and
services (1) Save in the case
of small outlets, where the sale of any goods or service is represented
as benefiting a charity or charities, the vendor shall indicate either
the proportion or the amount of the sale price which will be passed to
the charity or charities for their unrestricted
benefit. (2) Indications under
subsection (1) above may be made in diagramatic form, and shall be made
in writing, the font-size of which shall be no smaller than the price
of the goods or service. (3)
For the purpose of this section, a “small outlet” is an
organisation which is not obliged to register for Value Added Tax
purposes.”.’. Clause
68 stand part.
Mr.
Andrew Turner (Isle of Wight) (Con): It is a great
pleasure to see you in your place, Mr. Gale. Let us hope
that we will not see you there for long.
The last words I used before we
broke for lunch, although lunch is only a fleeting hope in the minds of
most members of the Committee, were “10 pence”. I
apologise; I should have said 10 per cent. Boots has a standard
rake-off—or return—to charities of 10 per cent., but that
varies hugely from outlet to outlet.
I am pleased to say that during
the break I was able to discuss with the Parliamentary Secretary the
purport of the amendment. He has assured me that clause 67(4) has the
effect of tightening the law currently set out in section 60(3) of the
Charities Act 1992. The 1992 Act states that “any commercial
participator”—I had not understood that that meant a shop
such as Clinton Cards—that makes any representation
that “charitable
contributions are to be given to or applied for the benefit of one or
more particular charitable
institutions,” is obliged
to make a statement, which is broadly in accordance with the effect of
my amendment. I am deeply concerned by the apparent failure of even
respectable outlets such as Boots, Tesco and Marks and Spencer to
recognise that duty under the law, but I am pleased that the Government
propose to tighten the provision.
I shall now move on to what
might have been a stand part debate on clauses 67 and 68, which again
has benefited from discussions over lunch. I have received
representations from the Association of Fundraising Consultants that
the existing law, particularly section 60(2) of the 1992 Act, is not
working effectively. The association’s solution is to reduce the
impact of that law and to set aside the changes that the Government
propose to make to that section of the Act.
People are genuinely concerned
about how much of their money is spent on fundraising. A lot of people
say, “Well, it’s all charity money,” and—to
revert to an earlier debate—in law, of course, it is all charity
money, because it is there for the charities to dispose of in whatever
way it wishes, as long as it is for the general charitable purpose.
None the less, people are concerned about fundraising and the amount of
money that may be devoted to it by certain charities. Some charities
spend as little as £300 to raise £10,000, whereas some
spend in excess of £900 to raise the same sum. On average, it is
the largest charities that have the worst return on money spent on
fundraising, and the smallest charities that have the best return on
the money that they invest. That offers a lesson: people are entitled
to know how much of the money is being spent on what might be described
as a job creation scheme for professional middle classes, and how much
of it will genuinely help real people at the front line, which is,
after all, the purpose of most people’s charitable
giving. I have a lot of
sympathy with the suggestion of the Association of Fundraising
Consultants that the amendments to the 1992 Act proposed in the Bill
would not have the effect that the Government desire, because they
would not be sufficiently robust to stand up against the wide range of
different ways in which professional fundraisers are funded. However,
the principal point made by the AFC is that charities, and charity
trustees in particular, should have a clear responsibility for deciding
how effectively money is spent on fundraising. That is my position,
also. I am grateful to
the association for the information it has provided. I fear that
neither the existing provisions, nor the proposed provisions will be
good enough for what the Government want to achieve and, I suspect,
what most people want to achieve, which is to ensure a high rate of
return on money spent on fundraising. We are not getting that from the
largest charities at the moment.
Martin
Horwood: It is a pleasure to see you in the Chair,
Mr. Gale. Some of the statements that have just been made by
the hon. Member for Isle of Wight (Mr. Turner) contained so
many red herrings that he could open a fish shop. Despite my
background, I shall not take his pejorative statements personally,
especially his comments on fundraising by the larger charities, which
the Parliamentary Secretary described from a sedentary position as an
outrageous slur. I have to
concur. The hon.
Gentleman was wrong about many things. The ratio of expenditure to
income is important and it is dealt with properly by most of the larger
charities. According to the type of fundraising pursued, those ratios
sometimes look worse and sometimes look better. The areas that benefit
from a large volunteer input, which is, in effect, free naturally
achieve a good ratio; that is often true of small charities, as the
hon. Gentleman rightly pointed out. However, some small charities
indulge in special events fundraising of the type that is relatively
inefficient, such as large gala dinners that make only a little more
than they cost to put on. Such issues are a matter of detail and
variation throughout the whole charities sector and his wild
generalisations were pretty wide of the
mark. I do not have
huge sympathy for the case putby the Association of
Fundraising Consultants. The importance of the clauses designed to
strengthen section 60 of the 1992 Act arises from the fact that
weaknesses have been identified in the application of that provision.
The hon. Gentleman was right to mention charity Christmas cards. The
issue is not the costs that are taken by the charities, but those
commercial participators—the organisations such as supermarkets
and other retailers that help charities to fund raise, but are not
themselves professional fundraisers—that represent themselves as
raising charitable funds for a benevolent or philanthropic purpose but,
in practice, do not ultimately give much money to the charity in
question. That is a legitimate concern. In recent years, I have been
worried about the fact that, although section 60 of the 1992 Act was
well drafted and well intentioned, it has been pretty widely ignored.
When walking down an average high street, one sees many examples of
things that purport to be charitable or imply that they are for a
charitable purpose that simply ignore section 60 of the 1992 Act. I
therefore broadly welcome clauses 66, 67 and 68.
It is right that we seek to
tighten protection for efficient, legitimate fundraising. The onus is
on the Parliamentary Secretary to take on his responsibilities as
Minister for the third sector. He should consider the enforcement and
the practical application of the provisions and ensure that the Charity
Commission and others concerned with enforcement find a mechanism to
make it easy for people to report breaches. I suspect that many
breaches are inadvertent and quite innocent. The hon. Member for Isle
of Wight mentioned businesses such as Tesco and John Lewis, which
contribute a great deal to charity. Perhaps I should declare an
interest as the director of fundraising who managed to secure the
designation of Tesco charity of the year for the Alzheimer’s
Society. I worked closely with Tesco and I think that its record on
corporate responsibility and support for charity is very
good. If it has inadvertently breached the law, I am sure that it was
not with the intent of deceiving the public.
Nevertheless, the fact the
breaches occur fairly routinely clearly opens the door for less
scrupulous individuals to make a healthy profit out of apparently
charitable sales and activities that do not benefit charities very
much. So broadly speaking, I welcome the
clauses.
The
Parliamentary Secretary, Cabinet Office (Edward Miliband):
This had been a good-tempered Committee until the hon. Member for Isle
of Wight launched a scathing attack on the hon. Member for Cheltenham
(Martin Horwood) through his comments on the professional middle
classes, but I am sure that good humour will prevail
eventually. I shall
talk briefly to amendments Nos. 128 and 131. The first seems like it
was discussed a long time ago by the hon. Member for Isle of Wight. I
hope to reassure him by pointing out that there is an offence
suchas the amendment proposes under section 60(9)
ofthe Charities Act 1992. The commission is not a prosecuting
authority in that or any other respect, but his amendment would make it
so by giving the commission the ability to initiate criminal
proceedings. That would constitute a significant change in its role. As
I said, the criminal offence exists and it is for the commission to
draw offences to the attention of the police and for the Crown
Prosecution Service to authorise a prosecution where
appropriate.
Edward
Miliband: It is. But let me say more generally—this
relates to amendment No. 131 as well—that I take the points made
by the hon. Members for Isle of Wight and for Cheltenham. There is
concern about the failure to enforce the existing regime adequately.
Clause 67(4) strengthens that regime and makes clearer the requirements
on commercial participators to provide information on the destination
of moneys derived from the sale of goods and services. However, I
acknowledge that the commission needs to investigate breaches properly
and to make it clear that it is happy to do so, and to draw attention
to the ability of members of the public to take up issues with them. It
will not be for the commission to decide to prosecute, but it has a big
responsibility. I hope
that the hon. Member for Isle of Wight is reassured about the
strengthening of the provisions. Let us hope that it will make a
difference in practice. With that, I hope that he will withdraw his
amendment.
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