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Lord Borrie: This is really a question rather than any criticism of what the noble Lord said. I see in Clause 7 already that the second general function, at the bottom of page 5, relates to,
If one sees that and then combines it with the provision to which the noble Lord referred—namely, Clause 24, which is a power in the Commission to give advice and guidance, and it is quite a long clause—why are not those two provisions together sufficient for the noble Lord's purposes?
Lord Phillips of Sudbury: I am grateful for the question, which is a fair one. I will need to think about it. My initial reaction is that talking merely in terms of administration does not go nearly as widely as the scope of the current advice and guidance given by the commission generally. I think that that is the point. "Administration" is not a sufficiently generous word
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to encompass the range of current guidance let alone any future guidance. But, as I say, I think that we will all consider that. I thank the noble Lord.
Lord Hodgson of Astley Abbotts: I tabled Amendment No. 64, to which the noble Lord, Lord Phillips, referred. In the light of the comments made by various Members of the Committee, I accept that putting the advisory role into an objective was raising it too high up the "blackboard".
I think that the points that the noble Lord made today on Amendment No. 67 are worth following through. It is again the issue of wanting the commission to have a positive role and not an entirely negative one. This is a positive function that it could provide and that would enable it to be seen as helpful. It is a shame that we cannot shift the balance a little. That would enable a move away from the perception of the commission as always on the side of control and restriction and, at best, as facilitating administration. That is not a cause for which one would die in the ditch. I think that there is a kernel of an idea here which should be followed through.
Baroness Howe of Idlicote: I am attracted to the amendment, which seeks to incorporate the general desire to ensure that in the commission's general dealings with charities, some of which are very small and do not have much in the way of official back-up, they are made to feel loved and understood. Like the noble Lord, Lord Borrie, however, I feel that the existing wording should be sufficient, in particular new Section 1C(2)2 which refers to "encouraging and facilitating". That seems to be the right approach.
The reason I am nervous about going much further is that the more I think about this whole area the more concerned I am that the regulator should not take on too much of an advisory role—which might be to the disadvantage of charities or would-be charities—and, as I reflected in an earlier debate, the more I think that there should be an alternative, well-resourced advisory body such as the National Council for Voluntary Organisations or another body along those lines. The line can then be drawn so that charities have to look to bodies other than the Charity Commission. I am nervous about exactly where the line should be drawn to delineate just how welcoming an adjudicator can be without discovering that it has gone too far, by which point it might be to the disadvantage of the charity in question.
Lord Best: I support the noble Baroness, Lady Howe, and express some reservations about us taking this line. If we envisage the Charity Commission providing advice and guidance on this scale, the point at which it does not insist that such advice and guidance is adopted would have to be made very clear. If not, one is moving to a position where the Charity Commission could overstep the mark. That is quite a fine balance to strike. A delicate line could easily be crossed.
When we were discussing earlier amendments I made the point that a suggestion was put to the Joint Committee that the commission might even use separate
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headed paper and that a different part of the body should present guidance and advice so that no confusion could arise over whether such guidance and advice was an instruction. Are the words "we strongly advise the following", from the regulator the cause of something to tremble about or can you take or leave them as you please? We are skating on slightly thin ice and I must express some reservations about the amendment.
Lord Bassam of Brighton: We have had an interesting debate because once again we have touched on the nature of advice. There are different forms of advice, and the noble Lord, Lord Best, has put his finger on it by saying that at times advice can be very directive in nature while at other times advice is offered simply to be helpful and to ensure easy compliance. When in earlier incarnations I worked with regulators, the advisory approach to achieving compliance was much to be preferred. In that way the objective is achieved in the least painful and most helpful way.
I sense from his earlier comments that the noble Lord, Lord Phillips, is very much in two minds about his own amendment. We have made provision for advice and guidance in Clause 24, while I take Clause 7 as being generally helpful in terms of encouraging the facilitation of better administration of charities. I am not sure how that could be better expressed by bringing the advisory role into play.
The noble Baroness, Lady Howe, was right to point out that it is good that a form of advice is available to the charitable sector that is outwith the commission itself. Probably like other Members of the Committee involved in this Bill, in previous charitable roles I have been the beneficiary of very helpful advice from outside the regulatory sphere that has enabled the charity itself to develop apace. For those reasons, I must resist the temptation to be drawn into the amendment.
The commission recognises the importance of advice on how it operates as a regulator. In its helpful booklet, the commission makes plain its approach. It states that it approaches its work in a number of ways: using information and advice to influence behaviour. It adds that it provides information and advice on what the law requires and on good practice, and that it aims to make a clear distinction between the two. The commission is right to do that. That booklet tells me that the commission is alive to the issue; it recognises the value and importance of advice in achieving compliance with the regulation, and it also recognises the importance of advice in assisting organisations to develop and flourish as charities.
From what I understand, we are probably best leaving what we have on the face of the Bill. There is certainly enough encouragement there for the commission to fulfil its advisory role sensitively as regulator, encourager and facilitator. For those reasons, I suggest that the noble Lord does not press his amendment further.
Lord Phillips of Sudbury: I am most grateful to the noble Lord for his response and to all those who have contributed to the debate.
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We are trying to fashion a crucial clause in a way that will be most helpful to the sector. It seems perverse that we should have a general function of determining whether public collection certificates should be issued yet have nothing about the most active aspect of the commission's activities, short of registration and misconduct.
I thought that I had made clear in my opening remarks that I do not want or intend any encroachment on the freedom of charities to seek advice where they will. I agree with the noble Lord, Lord Best, about the need for the commission to make clear when it is advising and when it is instructing. The Joint Committee made that one of its key points and the Government accepted it. There is no difference between the position of the noble Lord, the noble Baroness, Lady Howe, and me on that.
Perhaps I shall take the amendment away to reconsider it. One approach would be to take up the point made by the noble Lord, Lord Borrie, on general function 2:
Although I think that "administration" is too narrow a word, one might include, "administration and effectiveness of charities". I shall ponder the matter and reconsider. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Phillips of Sudbury moved Amendment No. 68:
"( ) which is fair, reasonable and proportionate"
The noble Lord said: Dare I suggest it, this is one of the most important amendments in the whole Bill. It is no surprise that my Amendment No. 68 forms part of a group, with other Members of the Committee coming in on the back of it. It was one of the principal recommendations of the Joint Committee—probably the most important recommendation which the Government declined to accept.
For reasons that I touched on in moving the previous amendment, I believe that we are under a duty to make this clause as comprehensive and balanced as possible. We must bear in mind again that this will be a much traversed clause by the sector; we all want to help charities avoid having to go to solicitors, accountants and other consultants and experts in order to understand what is going on. That must be a principal objective of us all—I know that it was a principal objective of the Joint Scrutiny Committee. Therefore, for the Government to say, as they did in response to the Joint Scrutiny Committee, and as the Minister did on Second Reading, that such a provision is not necessary because it is implicit in administration law is, with great respect, not good enough.
The Government went further in responding to the Joint Scrutiny Committee's recommendation by saying that if they accepted this amendment, it might cast into doubt other pieces of legislation where this
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phrase was not included. That is far-fetched nonsense. Just to make doubly sure, if anyone doubts my legal view—and they are entitled to do so—the Minister can deal with this in one of his favourite ways, by making a statement, which, on the Pepper v Hart principle, will make it abundantly clear that including this phrase in this Bill in no sense impinges on any other legislation.
Relying on administrative law or the Human Rights Act is a heavy weapon to expect a charity to use. It is an unusable weapon; it is a commonplace that the charity sector does not have money to spend on lawyers' fees. It is the least desirable head of expenditure. That is why the common law definition of charity has curdled for want of oversight by the courts. There have been no cases on registration coming before the courts year in, year out. We have one every five years if we are lucky. I am certainly not happy to leave the situation on the basis that if there is a lack of fairness, proportionality or reasonableness, you can go to the High Court. The hurdles that have to be leapt in order to make use of judicial review are high.
I want to see a provision that will, when we come to later amendments, give some assistance to the hard-pressed charity that is being mucked about by the commission. It does not happen often, but it does happen, and it can happen with a degree of cavalierness.
I am long enough in the tooth to know that there are cases in which the commission deals with matters in a manner which is not fair, reasonable and proportionate—particularly proportionate. There needs to be something on the face of the Bill that any trustee reading it can say to Mrs Smith of the Charity Commission, "You are not acting fairly, reasonably and proportionately". She or the trustees may well be unaware of any administrative law implications, weak as they may well be.
When we come to later amendments, such as Amendment No. 87 in my name, on the costs of going to the tribunal, I want the tribunal to be able to say that the commission has not dealt fairly, reasonably and proportionately with the matter in issue before it. Even if the tribunal finds in favour of the commission on the particular legal issue, it should be able to have the discretion not to award costs to the commission and to award costs to the applicant if there has been a breach of the "fair, reasonable and proportionate" provision. So there are ramifications in all directions.
There are other parts of the clause which carry qualitative adjectives and requirements of the nature of those contained in the amendment. For example, the commission's third general duty states:
"In performing its functions the Commission must have regard to the need to use its resources in the most efficient, effective and economic way".
So there is a qualitative judgment on the face of the Bill. It is useful because it is on the face of the Bill and it has a great deal of the usefulness that attaches to the amendment. I hope very much that the Government
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will have thought again about this matter and will be willing to concede the amendment, or something like it. I beg to move.
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