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7 Jun 2000 : Column CWH1

Official Report of the Grand Committee on the

Trustee Bill [H.L.]

Wednesday, 7th June 2000.

The Committee met at half-past three of the clock.

[The Deputy Chairman of Committees (Lord Ampthill) in the Chair.]

The Deputy Chairman of Committees (Lord Ampthill): Before I put the Question that the Title be postponed, it may be helpful to remind your Lordships of the procedure for today's Committee stage. Except in one important respect, our proceedings will be exactly as in a normal Committee of the Whole House. We shall go through the Bill clause by clause; noble Lords will speak standing; all noble Lords are free to attend and participate; and the proceedings will be recorded in Hansard.

The one difference is that the House has agreed that there shall be no Divisions in the Grand Committee. Any issue on which agreement cannot be reached should be considered again at the Report stage when, if necessary, a Division may be called. Unless, therefore, an amendment is likely to be agreed to, it should be withdrawn.

I should explain what will happen if there is a Division in the Chamber while we are sitting, although that is an unlikely event today. The Committee will adjourn as soon as the Division Bells are rung and will then resume after 10 minutes.

Title postponed.

Clauses 1 to 6 agreed to.

Clause 7 [Existing trusts]:

The Lord Chancellor (Lord Irvine of Lairg) moved Amendment No. 1:

    Page 3, line 3, leave out from beginning to ("this") in line 15.

The noble and learned Lord said: The purpose of this amendment is to give the new powers of investment to all existing trustees, subject to Clause 6(1)(b) which makes the new general power of investment subject to any restriction or exclusion imposed by the trust instrument or by legislation. Without this amendment there are some in the charity sector, in particular, who would be excluded from the new regime. These include those whose current powers are granted by what the published Bill called "special statutory powers of investment". That might be particular charities or non-charitable trusts governed by an enactment or by subordinate legislation, or those who belong to a class whose powers derive from legislation or who have been granted additional statutory powers. Certain classes of religious and educational charities may have such powers; and charities which are subject to schemes or orders made by the Charity Commission or the Home Secretary

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under the Charities Act 1993. We believe that, if the restriction in the published Bill is to be dropped for charitable trusts, it should be dropped for non-charitable trusts as well.

In providing charities and other trusts with wider powers it will not be possible to predict whether or not they will be used appropriately in every case in which they will apply. But there are four factors which, we believe, make the risk acceptable; first, that trustees should have the wider powers that are proposed in the Bill; secondly, the exercise of these powers will be subject to safeguards, including the duty of care; thirdly, the application of the new powers will be subject to any restriction or exclusion in the trust instrument or any enactment; and fourthly, even where the new regime applies, it is for the trustees to determine in the particular circumstances the extent to which it is appropriate to exercise the powers conferred.

The Charity Commission would welcome the introduction of this amendment. I beg to move.

Lord Goodhart: This is a somewhat unusual Marshalled List in view of the fact that there are 49 amendments down in the name of the noble and learned Lord the Lord Chancellor and none by anyone else. Speaking for my noble friends and myself, the Committee stage is likely to have a very easy passage today. However, I welcome the continued interest that has been taken in the Bill. I believe that we are happy to support this and all the other amendments tabled on the Marshalled List. I am tempted to suggest that the noble and learned Lord should move them en bloc but I shall not go quite as far as that.

Lord Wilberforce: Perhaps I may add to what the noble Lord, Lord Goodhart, said. The fact that other amendments have not been put down by other Members of the Committee does not reflect any sentiment that the Bill is trivial or not to be carefully considered. I am very grateful for the consultation that we have had from the noble and learned Lord the Lord Chancellor to which I have given very careful thought. Although I am unhappy about some of the provisions in the Bill, on the whole I feel it best that the Bill should go forward and one should not try to delay it by making changes which would, if made at all, have to be somewhat radical. I entirely go along with the noble Lord, Lord Goodhart, in wishing the best of progress to the Committee.

Lord Kingsland: I wholly concur with the remarks made by noble and learned Lords who have already spoken.

The Lord Chancellor: I am grateful to both noble Lords and to the noble and learned Lord. There is all-party agreement. There is also support around the House more broadly, as the noble and learned Lord, Lord Wilberforce, indicated, to deliver a beneficial Law Commission Bill of this character with all deliberate speed.

On Question, amendment agreed to.

Clause 7, as amended, agreed to.

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Clause 8 [Power to acquire freehold and leasehold land]:

On Question, Whether Clause 8 shall stand part of the Bill?

The Lord Chancellor: Perhaps I may trespass on the patience of the Committee simply to say one thing. Although the clause has not been amended, concern has been expressed about whether the words "for any other reason" in Clause 8(1)(c) are wide enough to include the purchase of functional land by charitable trusts for carrying out the purposes of the charity, rather than as an investment; for example, a school buying land to serve as a playing field. For the avoidance of doubt—I do not believe that there is doubt—let me confirm that we intend the words in the clause to comprehend that meaning.

Clause 8 agreed to.

Clause 9 agreed to.

Clause 10 [Existing trusts]:

The Lord Chancellor moved Amendment No. 2:

    Page 4, line 10, leave out subsections (1) to (3) and insert—

("(1) This Part does not apply in relation to—
(a) a trust of property which consists of or includes land which (despite section 2 of the Trusts of Land and Appointment of Trustees Act 1996) is settled land, or
(b) a trust to which the Universities and College Estates Act 1925 applies.").

The noble and learned Lord said: The purpose of this amendment, as was the last, is to expand the numbers of trusts that can benefit from the new regimes being set up by the Bill, in this case by giving new powers of land acquisition to all existing trustees, subject to Clause 9(b). I shall not weary the Committee by repeating the argument in detail but will repeat that the Charity Commission would welcome the introduction of the amendment.

Settled land and the bodies subject to the Universities and College Estates Act 1925 are subject to their own specific regimes in relation to the matters covered by Part III of the Bill—the purchase of land. The remainder of the amendment allows those well-understood regimes to continue to operate as they now do. I beg to move.

On Question, amendment agreed to.

Clause 10, as amended, agreed to.

Clause 11 [Power to employ agents]:

The Lord Chancellor moved Amendment No. 3:

    Page 5, line 5, leave out ("acquired") and insert ("held").

The noble and learned Lord said: The purpose of the amendment is the avoidance of doubt. It ensures that, however a charitable trust comes by land, if it is held as an investment, the trustees may delegate their power of managing, or creating or disposing of an interest in it. This will ensure that in cases where land has been bequeathed to a charity, for example, and is then regarded as an investment, it will not be excluded from the scheme because it was not strictly "acquired" as an investment.

On Question, amendment agreed to.

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Clause 11, as amended, agreed to.

Clause 12 [Persons who may act as agents]:

The Lord Chancellor moved Amendment No. 4:

    Page 5, line 29, at end insert ("(even if the beneficiary is also a trustee)").

The noble and learned Lord said: This amendment answers concerns raised from a number of quarters about Clause 12 of the Bill as published. Although as published subsection (1) read with subsection (3) was thought to cover the point, the amendment to subsection (3) makes it abundantly clear that a beneficiary may not be appointed as an agent even if he or she were to be a trustee.

It is possible for trustees to delegate any of their trusts, powers or discretions to a beneficiary under the trust, but not under the power conferred by Clause 11 of the Bill. It can be done only under Section 25 of the Trustee Act 1925, as substituted by the Trustee Delegation Act 1999, but the safeguards are very much greater. The delegation has to be made by each trustee by power of attorney. It is restricted to a maximum period of one year and the trustees are strictly liable for the faults of the delegate. I beg to move.

On Question, amendment agreed to.

Clause 12, as amended, agreed to.

Clauses 13 to 15 agreed to.

Clause 16 [Power to appoint nominees]:

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