Examination of Witnesses (Questions 1-19)
GREG CLARK MP, MR IAN LEGGETT AND MR BRIAN LAMB
26 MARCH 2008
Q1 Chairman: Let me call the Committee to order and welcome our witnesses this afternoon. We are delighted to have our colleague Greg Clark, who is the Conservative Member of Parliament for Tunbridge Wells and speaks for the Conservative Party on these issues; Brian Lamb, Director of Communications at the Royal National Institute for the Deaf and Ian Leggett, Director of the organisation called People and Planet; we are very pleased that you are able to come along. Part of the Committee's work concerns looking at the activities of the Charity Commission, a task that Parliament effectively has given to us, and as part of that it means tracking some of the activities that we are engaged in, one of which we will talk about this afternoon which is the whole business of the guidance on what it is proper and improper for charities to do in relation to political campaigning under charity law and now with the new guidance.[1] We have asked all of you because you have all expressed views on this and we thought it is a chance to run through some of the issues and see if we can tease out what really is at stake here. I do not know if any of you want to say anything briefly by way of introduction or whether you want to assume that we have read all about you and know what you think.
Greg Clark: Shall we go straight into questions?
Q2 Chairman: Can I start with you, Greg? You seem to be a lone voice—all the cuttings tell me that the whole of the voluntary sector seems to think that the new guidance from the Charity Commission is a jolly good thing, it has helped to clarify things, it is sensible, this seems to be also said by charity lawyers. You are a lone dissenting voice who says "The Commission has proved to be naive in giving way to partisan pressure to open the door to political pressure groups becoming charities".[2] Why do you take this dissenting view?
Greg Clark: It is not such a lone voice. The cuttings that you are probably referring to come from the sector press and I can quite see that charities who have to cope with the law and have to operate under the law want to have as much freedom of manoeuvre as they can, but the Charity Commission has a duty; it is not just a spokesman for the sector, it is there to regulate the sector and specifically to ensure that public trust in charities is strong. So it has to be robust, it should not just do everything that some charities may like to have to make their life easier. Specifically it needs to apply the law and act as a guide, an objective guide to the law, and do so in a way that it maximises public trust. My concern is this: the law is pretty clear that political campaigning can be engaged in by charities, often very successfully—I received an award from a charity for a political campaign that it ran—but it should not be the dominant activity of a charity because that takes it, in my view, into something different—it becomes a pressure group. Most members of the public have a sense that charity is rooted in good works so I think this question of whether political activity dominates everything else is very crucial to public trust. The criticisms that I have made have been against, I suppose, two initiatives: one by an advisory group that the charities here participated in which was backed in the study stages by the Government through the Cabinet Office, which said the law should change to allow political campaigning to be exclusively what a charity can engage in. What the Charity Commission has done with the new guidance, which was meant to simplify, has changed the meaning and has distracted from the continuing legal requirement that political campaigning should not be dominant.
Q3 Chairman: Thank you for that. As I understand it the Helena Kennedy group that two of you were on said it is all so terribly confusing at the moment, and all this dominant and ancillary stuff is terribly confusing, let us sweep it all away and let charities basically do what they want on this front, let the law say that. You, Greg, are saying actually the dominant/ancillary rule is the one you want to hang onto and any departure from that is fraught with difficulties. Is not the truth that we now know what the position is, which is that the Charity Commission has restated the position dealing with some of these difficulties and making it clearer, the Government has said there is to be no change in the law—I presume the Opposition are saying there is to be no change in the law either.
Greg Clark: Yes.
Q4 Chairman: In a sense whatever we say, therefore, we now know what the position is, do we not?
Greg Clark: Unfortunately, the guidance has actually made things less clear, and let me say exactly why. In the board paper that the Charity Commission took when they first started enquiring into this, they had a statement that says "We say in our guidance that political activity cannot be the dominant means by which a charity carries out its charitable purpose."[3] Then it says: "The law is clear and well established on this point and it is not open to the Commission to take a different approach." That is how it framed its room for manoeuvre in reviewing this—the law is clear and well-established on the question of dominance not being permitted and it is not open to the Commission to take every point, but in practice in this new guidance there is no mention of dominance and indeed there is a different concept that is introduced. The new wording says that "political activity cannot be the continuing and sole activity of a charity".[4] Given that the law is the law, the case law says that political activity cannot be dominant. "Sole" is not a synonym for dominant; if you wanted to make it simpler, if "dominant" is a confusing word, then words like "main" come to mind, but to say that charitable activity must not be dominant on the one hand, but then through your guidance say it must not be the sole activity, has a big difference, and it means for a charity now or a charity to be set up that question of sole would allow a single, almost fig leaf, other activity to be conjured up and would seem to allow political campaigning as a dominant activity to be permissible. The Commission is clear, however, that the law says that is not permissible, so I am afraid they have confused the matter.
Q5 Chairman: What it says is that political campaigning can be dominant for a period—I can read it to you if you like—but it does not tell us what a period is, whether it is a long period or a short period. Is not the truth, as I suggested just now, that unless someone goes to court and challenges the Charity Commission's interpretation of what the law currently is, we now are operating with this guidance which most people think is acceptable, and the view is that a court would be heavily influenced by that.
Greg Clark: Absolutely, and that is the regrettable part of it. This was an opportunity—I do not think it was needed, but if the opportunity was taken—to clarify the law; I do not think it has. I do not think it has clarified this question of dominance so it will require a legal test case to establish that. That seems to be regrettable, I think, if this will involve lawyers being briefed, presumably paid for from charitable funds; I do not think that is the best use of them.
Q6 Chairman: Let me ask one more question and then bring my colleagues in, and this goes to the heart of the issue rather than talking about where we are at. Most members of the general public would be wholly confused about this discussion. They think that things that are charities in fact are not charities, they would not be understanding of these fine distinctions that are being made. I saw Helena Kennedy point out that this year we have been celebrating the abolition of slavery; everybody would think that the Anti-Slavery League, or whatever it was called, was a prime example of a charity, but she points out that of course it would not have been and how much of a nonsense this is. This goes to the heart of the argument, does it not? If there was an organisation whose purpose was the relief of poverty, if it decides that that purpose is best advanced by campaigning, say, to redistribute money from the rich to the poor rather than setting up soup kitchens, why is that not a perfectly proper thing to do if it believes that thereby it is advancing its aims?
Greg Clark: That is a pressure group rather than a charity. People have an expectation that charities should be engaged in good works; pressure groups are excellent things, they are part of the democratic debate. Take the Campaign for Nuclear Disarmament, which is topical at the moment, people do not regard that as a charity, they regard that as a pressure group, and some people will be pleased that it takes part in debates. With charitable status comes expectations and privileges. It takes it very close, the difference between the funding of political parties that your Committee has been taking a close interest in and the funding of an organisation whose activities are mainly or almost exclusively devoted to campaigning for a particular political object, such as changing the law. You end up having a paradoxical situation in which there is an acceptance that when it comes to political donations to a political party they should be transparent, they should be from people registered in the UK, there is a degree of consensus that they should be capped, and there is increasing scrutiny of that. If it were possible to establish a new charity to be devoted almost exclusively to political campaigning, that could be used as a front to divert funds through some of these regulated groups and to be clear that if you were to donate money to a politically campaigning charity whose main purpose was political campaigning, then donors do not need to be disclosed, they do not need to be UK-registered voters, there is certainly no limit on them being capped and they get tax relief at their highest marginal rate, so there is a degree of public confidence at issue here as well as some important issues of transparency that it is appropriate to reflect.
Q7 Chairman: Let us bring the other two in. That is the argument for saying you should not allow purely campaigning organisations to enjoy charitable status: that is a fairly strong argument, is it not?
Mr Lamb: That was never our proposition. If we go back to the work that was done through the Campaign Advisory Group, what we were faced with was an issue where there was lots of evidence in the sector that the charity guidelines were unclear, and there is nobody across the sector that disputed that from any of the umbrella organisations that were part of the group like NCVO,[5] ACEVO[6] and BOND.[7] I chair the NCVO Campaign Advisory Group and certainly it was very much the feeling of most practising campaigners that the guidance was very unclear, and indeed Ian's organisation did work backing that up and showing that certainly when it came to an understanding of things like the ancillary/dominant rule there was a lot of confusion. If I just take it back to your question about what it was we actually wanted, we never actually said that all organisations ought to be able to have campaigning purposes as their primary purpose; all we were actually looking for was a fairly modest redefinition of political campaigning to be another activity alongside various other activities that charities do. It would still have required that charities would have had to fulfil public benefit requirements to be registered as a charity, their major object could still not have been political campaigning, it was simply trying to say that we should not be in a position of trying to judge how much was ancillary and how much was dominant, and the easiest way not to do that was simply to say that, like any other charitable activity that an organisation undertakes in the achievement of its charitable objects, political activity should be allowed as part of that. We drew a very clear distinction between that and political and party political activity which nobody wants to be engaged in.
Q8 Chairman: But your report does go, with respect, beyond what you have just said. It says, and I quote from it here, one of your conclusions: "Charity trustees should be free to decide to engage exclusively in political campaigning in furtherance of their charitable purposes"[8]—exclusively, not a mixture to be decided by them, not a sort of getting around the dominant/ancillary, but they can exclusively do that and be charities. That is what the report says.
Mr Lamb: Absolutely as a choice between different methods to achieve the same aim. In a sense it goes back to the question you posed about the Anti-Slavery Society and why not if that was the best way to do it. All I was drawing a distinction between was being able to use that as a means of achieving your charitable purpose and your charitable purpose alone being the achievement of a political end, and we never argued for the second. I agree we argued for flexibility around the first, and what would still have to apply in that is you would still have to show that you were achieving public benefit, that your overall objectives were not merely political and then within that you would have a choice about how to achieve those, so it would still assume that for most charities there would be very few that would want to achieve their ends wholly by political means, especially as narrowly defined—they would want to do campaigning, they would probably want to do service provision, but it would allow the trustees, who we trust in every other respect, to judge what is most appropriate to achieve their charitable objectives, to have the same choice in relation to political activities, because what you have got is a contradiction at the moment where, when it relates to political activity, we privilege that as something that has to be ancillary, to use the old language, whereas any other type of activity to achieve that, trustees were free to engage in whatever amount they actually wanted to. So it was that that we were challenging, not that the overall charity could have a political aim. It is that distinction I was drawing.
Q9 Chairman: The new guidance surely meets the point from your point of view, you do not have to get into the argument with Greg about whether an organisation can be exclusively engaged in political campaigning, because the guidance now firmly embraces the notion of flexibility—campaigning being legitimate, charities having the right to decide, getting rid of the ancillary/dominant—surely this is exactly what you would want?
Mr Lamb: It certainly goes a long way towards giving a much more flexible environment that achieves some of those objectives, and Ian may want to come in on this. Even under the old guidance, although I think the ancillary/dominant rule was particularly hopeless, even for the Charity Commission, in trying to judge whether you judge that to be resources, amount of money spent, amount of time, longevity—how you would actually ever judge that was always difficult, but it was always simpler for very large charities such as my own not to worry too much about that because it would be very difficult and we would not actually have the level of resources that we would be able to devote so much money that more than half our expenditure, if you just took that as a very crude measure, would ever be spent on the very narrow definition of political activities, whereas for a much smaller organisation, an organisation trying to register, it might be much more of a problem. Speaking from the position of a large charity, the flexibility that is now there within the guidelines is much clearer in terms of what we are talking about and, for someone like us, would probably meet all our concerns as a registered charity and a large charity in terms of what we could or could not do and there would be enough guidance for trustees. Ian may want to comment.
Mr Leggett: To begin with I probably am on the more critical side in terms of what the Charity Commission could have done, and I can talk about that in a minute, but first of all I would like to pay credit to them in terms of the process they followed, in terms of engaging a wide range of organisations across the sector, the debates that we had—Greg gave an impression that in a way the Charity Commission kind of rolled over in front of this motley group of charities: frankly, it did not, we had some really vigorous discussions and debates, they conceded a bit, we conceded a bit, that is the nature of discourse and narrative, and it is absolutely important that the process we followed is acknowledged to have actually been a very good one. I suspect it will mean that the life of the current version of CC9[9] will probably be quite a lot longer than the life of its predecessor which was about three or four years. The very fact that CC9 has been revised three or four times in 10 years suggests that this is an ongoing problem, there is an area of contestation around the extent to which charities can get involved in what I prefer to call not political campaigning but public policy debate. For me it is an absolutely important distinction between what most people understand in this country about political purpose and political objectives that they associate with political parties, and for an awful lot of people they may not be involved actively in political parties but they are associated with a whole range of charities and campaigning organisations. It is absolutely right and proper that there should be as much inclusion and as much involvement of those stakeholders in shaping public policy, and the old guidelines, the 2003 guidelines, really did not create the space for that engagement. We did a survey at the very beginning of this; we did a survey of a wide range of charities and the figures were that something like 70% or 80% of charities said that the 2003 guidelines had made no difference whatsoever to what they did in terms of this, basically they were irrelevant, and that is why we had to say there is a more fundamental problem here, let us begin to see how far we can go.
Q10 Chairman: This is why though I am slightly puzzled because it seems to me that you have got all that you could reasonably ask for through this revised guidance without getting into the disbenefits that Greg Clark identifies whereby every kind of pressure group becomes a charity.
Mr Leggett: I would agree. We have really tried very hard to avoid any disbenefits. My own view is that there is still a slightly uncomfortable space between what a charity can do when it is taking on an issue that is essentially in support of existing government policy, whichever party is in power—let us forget parties for a moment on this. If a charity is engaging essentially on agreed public policy turf that is seen as campaigning, but it is not seen as political campaigning. If you want to begin to change that in some way, propose alternatives, that then becomes political campaigning and I find that distinction frankly confusing and most of the public would find that confusing; it begins to erode for me the independence of charities in terms of what they might do or what they might not do, because history tells us that trustees by and large are cautious people—and again we have got evidence of this from surveys on the dominant/ancillary kind of line. When asked how they interpret dominant and ancillary, for 80% of charities it was less than 30% of their expenditure. Expenditure is the measure and for most people they were way back, they were not at 49% or 51%, they were actually way back, and that reflects essentially that the charitable sector is by and large a rather cautious one, not prone to take risks. In that sense, when we come on to wanting to begin to challenge government policy, to take it in a new direction, unless there is a confidence amongst trustees and amongst staff that they can do that, a lot of people will back off. I say it is confusing, and let me give one example from People and Planet's work at the moment. Eighteen months ago we worked with Friends of the Earth to campaign for a climate change bill; at that time that was not part of the current Government's policy agenda. We were fortunate, we were successful in that, and it is now part of that agenda; what we were doing before was political campaigning, but the work that we are now doing, because it is accepted as part of public policy and we are contributing to that, we are debating on that, that is now seen to be campaigning, not political campaigning. I personally find—and I speak as somebody who has only really ever worked in the charitable sector—that it is unfortunate it seems to me that that distinction has still remained really within the current CC9.
Q11 Chairman: But it has not inhibited your activities and if you look at the guidance it could scarcely be more encouraging of you to engage in attempts to change laws.
Mr Leggett: It has not inhibited our activities nor, similarly, Friends of the Earth's activities, because we essentially are a kind of schizophrenic organisation. We have a company and we have a charitable wing, just as Friends of the Earth, just as Greenpeace, just as the World Development Movement. So many campaigning charities essentially have got two legal entities and again, frankly, I think that is a disbenefit to the sector. It means that we keep two sets of accounts, we have two boards, we do two sets of reports and yet to most people in the public if Friends of the Earth says X they will think Friends of the Earth, they are not going to think is that the company speaking or is that the charity speaking. It is one entity and it would have been far better, personally speaking, if the Charity Commission had said "We are dancing on the head of a pin here, we have a legal definition, it is really difficult for the Charity Commission to move". I absolutely accept that they have got very limited room to manoeuvre and it would have been for the public benefit if the Charity Commission had actually urged the Government to clarify the situation by legislative change. That would have really helped to create the space by which inclusion and a more active engagement of citizens in the formulation of public policy could have happened without people feeling nervous about "is this charitable or is this not charitable".
Q12 Chairman: It would have caused a mighty political battle.
Mr Leggett: I am sure it would.
Chairman: And that was not going to happen, because Greg would have made sure that it did.
Q13 Mr Prentice: It is all very confusing, is it not, I find it difficult to get my head around all of this.
Mr Leggett: It has taken me a long time.
Q14 Mr Prentice: But an organisation can only be a charity if it delivers a public benefit, and you have just told us the public benefit—I am looking at you, Mr Leggett—should be or could be participation in a public policy debate; that could be a public benefit.
Mr Leggett: It would be a public benefit.
Q15 Mr Prentice: In which case Friends of the Earth, you have just mentioned, would morph from being a pressure group into a charity overnight, Greenpeace would and Amnesty would. It would be very, very easy for all pressure groups to be charities following your definition of just engaging in the public policy debate.
Mr Leggett: The term pressure group actually is one that Greg has used.
Q16 Mr Prentice: Can I just wind it back a bit—I am sorry to interrupt. What is the definition then of public benefit?
Mr Leggett: Basically, as I understand it, a charity must deliver benefit to the public rather than, if you like, private gain. It is not about personal or private gain, it is about delivering something for society, public good for society, and I would argue that public participation in policy formulation is actually a public good.
Q17 Mr Prentice: Greg, you would not agree with that.
Greg Clark: Who decides that? It is a very invidious constitutional position. Is any participation in public debate to be regarded as charitable, so a kind of BNP-sponsored pressure group to repatriate immigrants, should that have charitable status? I think not, people would be outraged that it should, and if it does not then who is to decide, presumably it is the Charity Commission, so the Charity Commission is then being invited to decide which campaigns to change the law are in the public interest and which are not, which is an extraordinary position for unelected people to be in.
Q18 Mr Prentice: The Charity Commission is not here so I cannot ask them for the definition of public benefit. Mr Lamb, where would you draw the dividing line between a bona fide charity and the pressure groups that people out there think mistakenly are charities like Friends of the Earth and Amnesty?
Mr Lamb: One of the reasons the whole debate around public benefit and the Charities Act was so helpful is in fact it did create some new grounds for public benefit, one of which is human rights. If we take the Amnesty example as a key one, it is now perfectly possible for Amnesty to register at least some of their activities, and they have to make a choice about this, which way they want to go, under the charitable part of public benefit. One of the interesting things for the Commission is going to be how it works its way through them and how the whole requirement around this will work its way through, because obviously on human rights a lot of the work that Amnesty does will be directly within this public policy sphere and I am not sure how much will then fall within the campaigning versus the policy bit.
Q19 Mr Prentice: This is an unfair question because you are not here representing Amnesty.
Mr Lamb: No, I am not.
1 Charity Commission, CC9-Speaking Out-Guidance on Campaigning and Political Activity by Charities, Version-March 2008 Back
2 "New guidance `seriously misleading', says Clark", Third Sector, 12 March 2008, p1 Back
3 Charity Commssion, Campaigning and Political Activities By Charities-An Update, Board Paper No. (07) OBM 35, p10 Back
4 Charity Commission, CC9-Speaking Out-Guidance on Campaigning and Political Activity by Charities, Version-March 2008, D5 Back
5 the National Council for Voluntary Organisations Back
6 Association of Chief Executives of Voluntary Organisations Back
7 British Overseas NGOs for Development Back
8 Advisory Group on Campaigning and the Voluntary Sector, Report by Advisory Group on Campaigning and the Voluntary Sector, 23 May 2007, p5 Back
9 Charity Commission, CC9-Speaking Out-Guidance on Campaigning and Political Activity by Charities, Version-March 2008 Back
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