Examination of Witnesses (Questions 1040
- 1059)
WEDNESDAY 21 JULY 2004
FIONA MACTAGGART
MP AND MR
RICHARD CORDEN
Q1040 Lord Phillips of Sudbury: If
I could tell you about a case I had recently where we had a decision
on charitable status, a 25 page decision from the Charity Commission,
closely argued referring to endless numbers of cases, etcetera.
There is absolutely no way you can deal with it other than with
full legal advice.
Fiona Mactaggart: That will still
be true in some cases but there will be many more cases where
it is possible to do it in a simpler way.
Q1041 Lord Phillips of Sudbury: What
about those cases? Are you prepared to put on the face of the
Bill the availability of Legal Aid in cases of high public importance?
Fiona Mactaggart: It would not
be necessary to put it on the face of the Bill were we to do it,
that is a separate matter and policy. It does not do it in other
Tribunals.
Q1042 Lord Phillips of Sudbury: I
think they would say they could not do it without legal authority.
Fiona Mactaggart: Richard, do
you have anything to say?
Mr Corden: We do not think that
it would be necessary to put anything on the face of the Bill
to create a suitor's fund or to allow public money to be spent
in that way.
Q1043 Lord Phillips of Sudbury: That
has never been done yet.
Mr Corden: No. The idea of a suitor's
fund has been around for quite some time. As a matter of policy
there has never been any disagreement by the Government that in
principle it is a sound idea, it has come down simply to who pays
for it.
Q1044 Chairman: What is the point
of having the power or ability to appear before what we all agree
is a very good thing unless you are able to exercise it?
Fiona Mactaggart: It is making
access to legal decisions quicker, cheaper and faster than the
present arrangement. We are modernising it. Were we to choose
to create a suitor's fund, which we do not think is necessary
because we think we are getting things more flexible, and because
we also believe that the role of Attorney General in some of these
cases would be able to solve it, firstly I do not think we need
to put it in the Bill. Secondly, I think we can have a more flexible
use of the law through the Tribunal without such a thing. One
of the things you asked me at the beginning was how do we measure
how things work. Were it to appear that in practice the existence
of the Tribunal did not make it more accessible to people to take
cases and so on, that would be a measure that would mean that
as a matter of policy Government might then consider making more
resources available to complainants. At the moment we do not think
it is necessary and, in any case, it would not require to be on
the Bill.
Q1045 Chairman: You acknowledge the
potential problem that Lord Phillips has described in a case where,
for example, there would be lengthy detailed assessments by the
Charity Commission of its position that would require a legal
response. You accept that is a problem but what you are not prepared
to do is provide a solution, is that right?
Fiona Mactaggart: We are providing
a solution in terms of the Tribunal.
Q1046 Chairman: Not in a case of
that kind you are not.
Fiona Mactaggart: The Tribunal
would not solve all these things. We are making substantial progress
and I think that is what we should recognise. If there is a case
of substantial public importance where resources are required,
I am confident that—
Q1047 Chairman: You have an open
mind on that?
Fiona Mactaggart: I do not think
it is something that I would expect to see in the Bill at all.
Chairman: You have an open mind? The
answer is yes to that.
Mr Mitchell: No.
Q1048 Chairman: I am just asking.
Fiona Mactaggart: I have got an
open mind on anything.
Q1049 Chairman: That is immensely
helpful but at some point somebody will have to take a decision,
which is presumably why you are paid.
Fiona Mactaggart: Precisely.
Q1050 Chairman: You have an open
mind at this point about Legal Aid and support financially for
charities who find themselves up against detailed legal judgments.
Fiona Mactaggart: I do not believe
that that is something which would be proper to put in the Bill.
Q1051 Chairman: The answer is yes
or no?
Fiona Mactaggart: In terms of
changes to the Bill, no.
Chairman: So you have not got an open
mind. Let us see whether you have got an open mind on another
issue, which is the whole issue of public benefit where we have
received a lot of views, indeed there may be a lot of views on
this very Committee. We will be interested in exploring what your
view is on this.
Q1052 Mr Foulkes: Moving off the
easy questions now! How do you think the Government can achieve
its objective as far as this Bill is concerned without including
a statutory definition of "public benefit" in the Bill?
Fiona Mactaggart: If we were to
include a statutory definition of "public benefit" we
would not be able to meet the very diverse qualities that one
would need to have in a public benefit test. If you look at the
way in which the common law has developed in assessing public
benefit, it has been quite complex and it has included the way
in which purposes operate. If you look at the Anti-Vivisection
League it says that in that case[9]
it decided that the League was not a charity because the public
benefit in terms of the moral benefit of looking after animals
properly was outweighed by the disbenefit of minimising research,
for example. That is one example of the kind of complexity in
one case in deciding public benefit. How can you have the same
test which you might apply to a small church that you might apply
to a hospital or a school? These are very different qualities
and to create a fixed definition risks us having the problem which
has always existed in charity law which is that something fixed
400 years ago has to be tried to be applied today. We feel that
the sensible way is to first of all remove the presumption of
public benefit for particular classes of charity, which this proposed
Bill does, and, secondly, to ensure that in order to be a charity
you both have to have a charitable purpose and to be for the public
benefit.
Q1053 Mr Foulkes: There will be confusion
anyway and it is how that confusion is resolved that we are talking
about. I am not talking about emerging consensuses but personally
I think that it might be clearer to have some criteria to enable
the Charity Commission to resolve the confusion that you have
described. If the criteria come from Parliament representing the
people then they have some validity and some credibility, whereas
if these criteria are decided by the Charity Commissioners themselves
they would not have the same degree of credibility and validity.
Fiona Mactaggart: I spoke earlier
in response to Baroness McIntosh's point about the importance
for charities to be seen as not subject to political control,
and I think it is particularly important in this issue of public
benefit. I think that there is a risk, and we can see that in
the discourse about this Bill. One of the very depressing things
about the public discourse about this Bill has been that it has
all been about a particular kind of charity, fee-paying schools.
Not in every single respect but the vast majority of the coverage
has been about that and I think that is very disappointing. I
think that is a product partly of people seeing this as a political
party's attempt to define charity and they think that the Labour
Party believes that education should be free, as we do, and that,
therefore, maybe we are trying to manipulate charity in order
to exclude certain kinds of education. I do not think that is
the case. I think it is proper to say that public benefit should
be a requirement of every charity, that that should be interpreted
in the normal and natural meaning of the term—
Q1054 Chairman: What does it mean?
Fiona Mactaggart: It means that
it benefits the public, the purpose benefits the public and the
people to whom it is accessible benefits the public. There is
quite a helpful description in the guidance which the Charity
Commission themselves produce on the public character of a charity.
I think the concern which the Committee has been quite extensively
exercised about is the degree to which public benefit interpreted
in the normal and natural meaning is affected by charity, and
it is probably helpful if I get to that bit of this advice.
Q1055 Mr Foulkes: Let us take a specific
example. Let us keep off schools just for a moment, shall we.
We have had evidence from the Nuffield Hospital. Looking at it
completely objectively, forgetting about my party political background,
I could not understand the logic that this group of hospitals
providing private health care for relatively rich people has charitable
status, like the NSPCC and Oxfam and so on, it strains credibility,
whereas other groups of hospitals do not, they are either industrial
and provident societies or limited companies. Does that not seem
strange to you?
Fiona Mactaggart: I think that
the case of Resch[10],
which deals with hospitals, shows quite clearly that in deciding
an issue of public benefit you would have to take into account
the direct and indirect benefits to the public or section of the
public. The fact that you charge does not necessarily mean that
an institution does not operate for the public benefit, but a
trust which wholly excluded poor persons from any possible benefit,
direct or indirect, would not be for the public benefit and would
not be a charity. That is what that decision says.
Q1056 Mr Foulkes: That is the current
position under English case law that you have just quoted. What
I am saying is that rather than rely on the current position under
English case law, would it not be better for us, as a Parliament,
to try and take on the responsibility of describing what you mean
by "public benefit"?
Fiona Mactaggart: I have explained
the two reasons why I think that is not a good idea. In fact,
there are three: first, because you would freeze in 2004-05 a
definition which would have to last for generations; secondly,
that the independent nature of charities is potentially threatened
by a Parliament deciding what is public benefit and it is probably
better in the tradition of charity to have the court, common law
rule; thirdly, the diversity of charities, something that we talked
about the value of, means that you could not write a single definition
which is properly applied in every case, that you need to use
a case-by-case approach which can do that to determine these matters.
Q1057 Mr Foulkes: Rather than a definition,
could we not determine some criteria?
Fiona Mactaggart: I do not think
that you could find criteria which could be equally applied to
a village hall, to the Anti-Vivisection Society, to Eton, to a
cottage hospital. I do not think that you could write criteria
which could sensibly be operated in a way which really does cover
the range of charities.
Q1058 Mr Foulkes: What you are saying
is that the Charity Commission is still going to determine this
under English case law.
Fiona Mactaggart: They are, but
what we have done is we have removed the presumption that certain
classes of charity are of public benefit and that, I believe,
will mean a substantial difference to what happens in practice.
Q1059 Chairman: The problem, with
respect, Minister, is that we have heard from Mr Dibble from the
Charity Commission who confirmed to us in this Committee that
because of the predominance of English case law in the way that
you have described, in this case for independent schools and hospitals,
that there will not be a "level playing field" when
it comes to an application of the public benefit test. In other
words, because independent schools and hospitals are already protected
under case law and are deemed to be charitable, the lack of a
definition of public benefit test means that they will continue
to enjoy special privileges. That is what the Charity Commission
told us. Mr Corden is shaking his head but, believe me, and I
will give you the evidence, that is what we were told and we were
told it in writing and we have been told it verbally.
Mr Corden: I was not meaning to
say that he did not say that, I was just meaning to say that we
do not agree with his view.
9 This is a reference to National Anti-Vivisection
Society v IRC [1948] AC 31 Back
10
This is a reference to Re Resch's Will Trusts, Le Cras v
Perpetual Trustee Co Ltd [1969] 1 AC 514 Back
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