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6: Page 11, line 41, leave out from beginning to end of line 3 on page 12
Lord Bassam of Brighton: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 5 and 6. I can be brief on these amendments too. They achieve three separate effects. Amendments Nos. 5 and 6 give up a ministerial delegated power that has not been used in over 45 years. Amendment No. 11 allows the general income threshold for the registration of charities to be varied by order at any time. That amendment was needed because the Bill had inadvertently been drafted to prevent variation of that threshold before a report had been made to Parliament on the operation of the Act. We have had a lot of debate in the past about thresholds, so I know the noble Lord, Lord Hodgson, will see the importance of that. That report need not be commissioned until five years after Royal Assent. The Conservatives were keen, and Ministers have agreed, that the registration threshold and other thresholds should be reviewed much sooner than that, and that changes in thresholds should be made if necessary.
Other amendments in this group allow different provisions within the new registration arrangements to be brought into force at different times. The point of doing that is simply to ensure that the Charity
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Moved, That the House do agree with the Commons in their Amendments Nos. 5 and 6.—(Lord Bassam of Brighton.)
Lord Hodgson of Astley Abbotts: My Lords, I am grateful to the Minister for that, and for his reassurance. I assume these amendments cover all thresholds in all places, because there is not just the £5,000 threshold: there are also the £90,000, £100,000 and £250,000 thresholds. It is important that we do what we can to regularise the schedule as much as possible, and therefore I would be grateful for that reassurance.
How is the process of change in the thresholds initiated? Is it the Secretary of State—or, now, the Minister? Is it the Charity Commission, or some third party? It would be helpful to know how that will happen. There is always a danger of inertia where we do not do it yet and the years tick by while all the time inflation is having an effect, particularly on the £5,000 thresholds, but also on threshold levels generally. A word of reassurance on that point would be helpful.
Lord Shutt of Greetland: My Lords, we had many discussions about the business of thresholds when this Bill was discussed the first time around. Keeping thresholds under review is very important.
Lord Bassam of Brighton: My Lords, I entirely agree with the noble Lord, Lord Shutt, on that point. It is important that we have flexibility, and if we had not put these amendments in place I feel we would have lost that, which would have been unfortunate.
The review of the operation of the Act, which can be instituted under Clause 72, kicks in after five years. The provision to which this amendment relates, if uncorrected, would have got in the way of the commitment that has been made to carry out within one year of Royal Assent a review of all the financial thresholds in the Charities Act 1993 and in the Bill. This amendment will remove the anomaly, and will allow the general registration threshold to be varied should the review of financial thresholds point that way, allowing the Government to be in a position to implement any recommendations from the review. After this amendment, all thresholds except the one relating to excepted charities can be altered at any time. As I said, the Government will initiate a review a year after Royal Assent.
On Question, Motion agreed to.
7: Page 12, line 22, leave out “by the Commission”
8: Page 12, line 31, leave out “by the Secretary of State”
Lord Bassam of Brighton: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 7 and 8. This group consists entirely of minor amendments that have been recommended to us by the draftsman and others. They are designed to improve the drafting of the Bill or to correct minor errors and, in some places, omissions. The effect of the amendments generally is very small indeed.
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I rise really to speak to the other 40 amendments in the group, but I have no intention of doing so, because that would be not a good use of parliamentary time. When we discussed these matters confidentially, the noble Lord, Lord Shutt, asked me to provide a few examples of what a minor and technical amendment might mean. I have a very long list of those, and if the noble Lord gives me a number I will turn to any one of them and try to provide him with an answer, perhaps as an exemplification, if he really needs me to. I assure the House that none of these amendments is of consequence other than making the legislation work better.
Moved, That the House do agree with the Commons in their Amendments Nos. 7 and 8.—(Lord Bassam of Brighton).
On Question, Motion agreed to.
9: Page 13, line 8, leave out “Secretary of State” and insert “Minister”
10: Page 13, line 13, leave out “Secretary of State” and insert “Minister”
11: Page 13, line 22, after “(7)” insert “(a)”
12: Page 13, line 26, leave out from “day” to “(registration” in line 27 and insert “on which subsections (1) to (5) above come into force by virtue of an order under section of the Charities Act 2006 relating to section of that Act”
13: Page 13, line 41, leave out “Secretary of State” and insert “Minister”
14: Page 14, line 7, leave out “Secretary of State” and insert “Minister”
15: Page 14, line 30, leave out “(subject to section 3(11) above”
16: Clause 10, page 14, line 34, leave out “commencement of section above” and insert “appointed day”
17: Page 14, line 34, leave out “Secretary of State” and insert “Minister”
18: Page 14, line 43, leave out from “the” to end of line 44 and insert “appointed day.
“(4)In this section “the appointed day” means the day on which section 3A(1) to (5) of the 1993 Act (as substituted by section of this Act) come into force by virtue of an order under section of this Act.”
19: Clause 11, page 15, line 21, leave out subsection (9)
20: Page 15, line 36, leave out “Secretary of State” and insert “Minister”
21: Page 16, line 2, leave out “Secretary of State” and insert “Minister”
22: Page 16, line 8, leave out “Secretary of State” and insert “Minister”
23: Page 16, line 32, leave out “Secretary of State” and insert “Minister”
24: Page 16, line 34, leave out “Secretary of State” and insert “Minister”
25: Clause 22, page 22, line 8, leave out “Secretary of State” and insert “Minister”
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Lord Bassam of Brighton: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 9 to 25.
Moved accordingly, and, on Question, Motion agreed to.
26: Clause 23, page 24, leave out lines 14 to 17 and insert-
“(a) a Scottish recognised body, or
(b) a Northern Ireland charity,”
27: Page 24, leave out lines 32 to 35 and insert-
“(a) a Scottish recognised body, or
(b) a Northern Ireland charity,”
28: Page 24, line 44, at end insert-
“(3A) After section 25 insert-
“25A Meaning of “Scottish recognised body” and “Northern Ireland charity” in sections 24 and 25
(1) In sections 24 and 25 above “Scottish recognised body” means a body-
(a) established under the law of Scotland, or
(b) managed or controlled wholly or mainly in or from Scotland,
to which the Commissioners for Her Majesty’s Revenue and Customs have given intimation, which has not subsequently been withdrawn, that relief is due under section 505 of the Income and Corporation Taxes Act 1988 in respect of income of the body which is applicable and applied to charitable purposes only.
(2) In those sections “Northern Ireland charity” means an institution-
(a) which is a charity under the law of Northern Ireland, and
(b) to which the Commissioners for Her Majesty’s Revenue and Customs have given intimation, which has not subsequently been withdrawn, that relief is due under section 505 of the Income and Corporation Taxes Act 1988 in respect of income of the institution which is applicable and applied to charitable purposes only.”
29: Page 25, line 2, leave out “and 25” and insert “to 25A”
Lord Bassam of Brighton: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 26 to 29. The amendments update the references to Scottish and Northern Ireland charities to take account of the Charities and Trustee Investment (Scotland) Act 2005 and the proposed Northern Ireland legislation. They ensure that a Scottish charity or a Northern Ireland charity cannot invest in an English common investment fund or common deposit fund unless it—the Scottish or Northern Ireland charity—is recognised by HMRC as being entitled to charitable tax relief.
Moved, That the House do agree with the Commons in their Amendments Nos. 26 to 29.—(Lord Bassam of Brighton).
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Lord Hodgson of Astley Abbotts: My Lords, I want to ask the Minister one question about Amendment No. 62. I came across this today; I am sorry that I was not able to give him prior warning. Amendment No. 62 inserts a new clause before Clause 72, presumably after Clause 71. The new clause is entitled, “Disclosure of information to and by Northern Ireland regulator”. Clauses 70 and 71 are in Chapter 3 of Part 3, entitled, “Financial assistance”. Clause 70 is headed, “Power of Secretary of State to give financial assistance to charitable, benevolent or philanthropic institutions”, and Clause 71 is the same for Wales, through the National Assembly.
For those of us who are trying to keep the Bill clear, systematic and comprehensible—something that the noble Lord, Lord McKenzie of Luton, and I have debated at some length on the Companies Bill—this seems a strange place to have this provision. When we come to Amendment No. 130, we will be inserting into one of the schedules sections entitled “Disclosure of information to Commission”, “Disclosure of information by Commission”, and “Disclosure to and by principal regulators of exempt charities”. Why have we stuck the Northern Ireland provision into the middle of the Bill, when it surely would fit better when we are dealing with issues of disclosure of information as provided for in Amendment No. 130? This is not going to shake the charity world, but these small idiosyncrasies make the job of a charity trustee more difficult and more complex. An explanation would be helpful.
6.15 pm
Lord Bassam of Brighton: My Lords, I am more than happy to provide an explanation, but whether the noble Lord will find it entirely helpful I am not sure; we can but try. One of the changes that this relates to falls essentially under Amendment No. 62. The grouping, with Amendments Nos. 70 and 72, relates to the draft Charities (Northern Ireland) Order, which I mentioned earlier. One of the changes that the order will make, if enacted, will be the creation of a charity commission for Northern Ireland as the regulator of charities there.
Amendment No. 62 is the main amendment, and it comes into play when the Northern Ireland charity regulator comes into existence. The amendments allow provision to be made by regulations authorising disclosures of information to the Northern Ireland charity regulator for the purpose of helping it to carry out its functions. Such provision must be made in legislation that extends beyond Northern Ireland, because it needs to authorise bodies outside Northern Ireland to disclose information to the Northern Ireland charity regulator. For that reason, it cannot be done in the Northern Ireland order.
We are happily trying to assist the Northern Ireland authorities by including the provision in this Bill. I suspect that that has probably affected the chronology, although I cannot be absolutely certain about it. Maybe the noble Lord has a point about where things fall in the Bill. I certainly take his point about statute sometimes being hard to follow. We thought about this in relation to the Bill generally, and I have probably said on earlier occasions when we
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On Question, Motion agreed to.
30: Clause 24, page 25, line 22, after “court” insert “or the Tribunal”
Lord Bassam of Brighton: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 30. This amendment relates to the charity tribunal. Section 29 of the Charities Act 1993, as substituted by Clause 24 of the Bill, allows trustees formally to seek the Charity Commission’s advice on any matter relating to their duties as trustees or to the proper administration of their charity. Section 29 also provides trustees with a form of protection; if they follow the commission’s advice, they will be taken as having acted in accordance with their responsibilities. This protection is, however, not available where a court decision has been made on the matter in question, or where court proceedings are pending to obtain a decision. Amendment No. 26 corrects an oversight on our part by putting tribunal decisions on the same footing as court decisions in that respect.
Moved, That the House do agree with the Commons in their Amendment No. 30.—(Lord Bassam of Brighton.)
On Question, Motion agreed to.
31: Clause 27, page 29, line 17, after “(2)”, insert “above””
32: Clause 28, page 30, line 15, leave out “Secretary of State” and insert “Minister”
Lord Bassam of Brighton: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 31 and 32.
Moved accordingly, and, on Question, Motion agreed to.
33: Clause 29, page 31, leave out line 21
Lord Bassam of Brighton: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 33. I shall also speak to Amendments Nos. 71, 80 and 81. The present accounts scrutiny regime for charitable companies—charities that are established in the legal form of a company—is a company law regime. One consequence of that is that smaller charitable companies are subject to a regime whose requirements are designed for small businesses, not for small charities. Larger charitable companies—those whose annual income is above the professional audit threshold of £500,000, as it will be set by this Bill—are in a better position, as the company law scrutiny regime for larger charitable companies is effectively already the same as the regime prescribed by charity law for unincorporated charities.
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In our debates on the Companies Bill, the noble Lord, Lord Hodgson, tabled amendments that would have taken small charitable companies out of the company law regime for accounts scrutiny and placed them instead within the charity law regime. The Government accepted that there was merit in that approach. We took representations from a number of umbrella bodies for charities and professional accountancy bodies and received favourable responses. We therefore agreed to proceed with the idea. At its heart is the sensible proposition that we should treat charitable companies primarily as charities, albeit ones that happen to be set up in company form, rather than primarily as companies that happen to have charitable status.
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