Examination of Witnesses (Questions 1100
- 1117)
WEDNESDAY 21 JULY 2004
FIONA MACTAGGART
MP AND MR
RICHARD CORDEN
Q1100 Mr Foulkes: Do you think the
Number 10 Strategy Unit did not take account of that?
Fiona Mactaggart: I do not think
they thought it through, no. I think they were focusing on charitable
trading which was among the purposes of the charity, and they
did not think about the fact that the frame that they did it with
was for things which were completely non connected with the purpose.
Q1101 Mr Foulkes: We received some
very powerful evidence from charities arguing that the Number
10 Strategy Unit recommendation should be accepted. We had the
Federation of Small Businesses giving us pathetic evidence saying
that they did not like charity shops at all, even if they were
a separate trading company. I am not giving things away by saying
there might be a difference of opinion on the Committee about
this. Is this something that you are prepared to look at again?
Fiona Mactaggart: I am but I do
think it would be very difficult to create a mechanism because
we allow trading to charitable purposes. One could imagine that
Fair Trade, for example, could become a very big brand, that would
be perfectly permitted under the Bill as it stands and could be
charitable but what we would not allow is trading which is not
to charitable purposes. I think that would potentially not just
compete unfairly but damage the brand.
Mr Corden: Can I contribute?
Chairman: No, sorry we are running out
of time.
Q1102 Lord Campbell-Savours: Minister,
did you have a chance to see the Institute of Licensing evidence
about what is going on in Leeds?
Fiona Mactaggart: Sorry, I cannot
hear you.
Q1103 Lord Campbell-Savours: The
Institute of Licensing evidence about bogus fundraising in Leeds,
have you had a chance to see it?
Fiona Mactaggart: I have not,
I am sorry, no.
Q1104 Lord Campbell-Savours: It is
pretty dramatic stuff.
Fiona Mactaggart: May I ask Mr
Corden to respond to that because I have not seen the specific
stuff about Leeds and he has so he can respond.
Mr Corden: This was Pippa Coombes
the licensing officer from Leeds who gave evidence to the Committee,
I was here, yes.
Q1105 Lord Campbell-Savours: What
do you think we can do about it?
Mr Corden: As I recall she was
describing—
Q1106 Lord Campbell-Savours: Abuse.
Mr Corden:— the efforts
of her council as one of the councils, if not the council that
has the most active record in dealing with abuse. I think the
figure she gave was that since 2002 Leeds City Council have pursued
48 prosecutions for fundraising abuse. I think that is the figure
since 2002 so that is 24 a year. She agrees with us, also, that
current arrangements are a shambles and out of date and that our
proposals for the Bill would be an improvement and would make
her life easier to tackle fundraising abuse. Now I think if you
are asking can the Government give a guarantee that there will
be no instances of this, that it will stamp it out completely,
then clearly we cannot because if we were to construct an apparatus
which was sophisticated enough to have that effect then the consequences
for the 99.5% of people who are law abiding and do not get involved
in dodgy fundraising would be appalling.
Q1107 Lord Campbell-Savours: Do you
think it is the tip of the iceberg what she was referring to and
what was going on in Leeds, which you describe yourself as very
active, is going on elsewhere in the country and perhaps we are
not enforcing it in the way we should be?
Mr Corden: I cannot see anything
which persuades me that Leeds would be a special case. If the
question is might this be going on in other cities of similar
size, I think the indication must be yes because I do not think
Leeds is special.
Q1108 Lord Campbell-Savours: Can
I ask the Minister, the Institute of Licensing said in their oral
evidence that the Charity Commission should be the lead authority
in providing certificates of fitness for those operating as a
charity in more than one local authority area. What do you think
about that?
Fiona Mactaggart: People have
talked about the burdens on the Charity Commission in this Bill
and I think that will be an additional unnecessary burden and
that it is a role which it sounds as though the officer for Leeds
has demonstrated that local authorities can properly provide and
should.
Q1109 Lord Campbell-Savours: Do you
think that the reserve powers that you have in the Bill under
clause 36 to introduce compulsory regulation might ever have to
be used?
Fiona Mactaggart: They might and
that is why they are there, I hope they are not. The Institute
of Fundraising's initiative to take forward self-regulation—they
are doing it very eagerly—I spoke at their recent conference.
What I am hoping is that we can deal with these issues through
self-regulation but if we do not, we have kept that reserve power
because it might be needed.
Q1110 Mr Mitchell: Minister, can
I move us on very briefly to exempt and excepted charities. I
want to bring you back to what you have heard widely across the
Committee this morning in respect of our lack of confidence and
the dire performance of the Charity Commission when they have
appeared before us. Under the arrangements of this Bill a number
of exempt and excepted charities will be reclassified and will
come under the Charity Commission remit. Given the very challenging
tasks facing the Charity Commission would it not be acceptable
to stagger this at the very least and indeed properly put the
power which brings these exempted and excepted charities under
the Charity Commission into secondary legislation and do it at
a much later stage when you are clear that the Charity Commission
can handle the other tasks which it is already finding very challenging?
On that specific point, can I draw your attention to the evidence
that as a Committee we had from the Independent Services Agency
who said that under this Bill large numbers of Armed Forces charities,
which are essentially unit based but which involve funds above
the threshold, will be brought under the Charities Commission.
Would it not be much more sensible to either leave them with their
present level of regulation or bring them under the Adjutant-General's
office as their regulator?
Fiona Mactaggart: I think the
evidence the Charity Commission has become over the years a much
better regulator is compelling and I think it will continue to
improve, that is the first point to deal with your passing remarks.
One of the reasons why we did not accept in whole the Strategy
Unit report to bring into regulation charities with an income
of £50,000 was because we did not want to suddenly move relatively
small charities into a new regulatory regime but we did think
that it was proper—we are talking about £100,000 a
year income so it is quite a substantial medium sized charity
that, it is not a tiny set up, we are talking about something
with quite a substantial income which benefits from the 30% or
so additional benefit from the general taxpayer which it is in
those—that they should be regulated as charities. That is
why we are creating a framework, you are right to say that it
should be done in stages, and that is why we made the £100,000
rather than £50,000 as suggested in the Strategy Unit report
in order to do this in a measured way, not to suddenly bring relatively
small charities in.
Q1111 Mr Mitchell: On the specific
point about military charities?
Fiona Mactaggart: About whether
an alternative regulator would be better? One of the things is
that an alternative regulator needs to be a regulator rather than
someone else. They need to regulate whether they do conform to
charity law and frankly I think that the Charity Commission is
capable of doing this probably better than anyone else and that
is why we have made that decision.
Q1112 Mr Mitchell: I hope that you
will at least keep an open mind on the issue of the military charities'
work. I thought that the evidence that we received in this Committee
was very compelling that it should be left with the Adjutant-General's
office.
Fiona Mactaggart: If the Adjutant-General
has regulatory powers of substantial kinds, in a way that, for
example, HEFCE does—and that is why we have moved some of
the universities into HEFCE, it is a regulator—if there
was a substantial regulator who was experienced as acting as a
regulator then we would be very happy for them to act to regulate
conformity with charity law as well as other things.
Q1113 Mr Mitchell: Okay. On the issue,
finally, of the competence of the Charity Commission, I just point
out that earlier on we were told of excepted charities there were
5,000 but elsewhere I have seen the Charity Commission say that
if you take those excepted charities with an income of over £100,000,
ie a subset of excepted charities, there are 75,000. I do not
quite understand how these figures could have been reached.
Mr Corden: Shall I answer that?
Q1114 Chairman: Is it possible, given
the shortness of time, you could give us a note.
Fiona Mactaggart: We could give
you a note about where the numbers come from.
Mr Corden: Yes, all right.
Q1115 Chairman: If you could give
us a note on that and I think there are one or two other issues
that we would not mind notes on, including the resources for the
Charity Commission to do the job that the Bill sets out which
we would like to quiz you about. Can I just ask one final question
which I should have asked earlier and it is back to this public
benefit issue. Is it your intention that when this issue vis-a"-vis
the Charity Commission is resolved that that will be resolved
in such a way that the public benefit test is applied not as a
one off but on an ongoing basis? Is that how you intend to do
it?
Fiona Mactaggart: The first regulatory
duty of the Charity Commission is compliance, and in order to
check whether something is compliant you have to see if they still
comply with the requirements of being a charity. You cannot just
do it once and then forget about it.
Q1116 Chairman: It is not just a
point of registration, there will be a compliance monitoring function
too?
Mr Corden: Chairman, the Charity
Commission have now, and will continue to have, a duty to keep
a register of charities. If something ceases to be a charity then
that amounts to a duty to turf it out, so that is clear and simple.
Q1117 Chairman: Can I thank you,
Minister, and Mr Corden, for all your evidence. You have given
us a lot to think about. I hope we have given you some issues
to think about too and your famously open mind will be applied
to good effect during the course of the next few weeks. We look
forward to the product of that.
Fiona Mactaggart: Thank you very
much, Chairman.
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