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Lord Swinfen: I thank the noble Lord for giving way. How often does he think that money raised totally illegally—either by terrorism or, for example, the Mafia—would be donated in order to launder money? Such organisations would want to keep the money and pass it through to an organisation where they could use it. I should have thought that donating money to charity would be outside that.

Lord Bassam of Brighton: I am sure that the noble Lord makes a good point. But it is a serious concern and it could become a serious issue. I cannot pluck a figure from the air and say to the noble Lord on how many occasions that might happen in a given period. It would be foolish of me to make that sort of estimate. I can see—I am sure that the noble Lord would accept—that there may well be situations, individuals, networks or whatever, which might want to do that. I am sure that that is not beyond the realms of possibility. I have not had a discussion with the serious fraud squad about that issue, but it is worth taking some time to think it through.

Another question is how the Charity Commission or the Inland Revenue would respond to a request under the Freedom of Information Act for the sort of information that they would be bound to disclose about to the recipients of anonymous donations.

In summary, although I understand the issue and the cause for concern, we think that, on balance, there should continue to be a presumption in favour of disclosure in the interests of accountability and transparency. Non-disclosure should be allowed only in the circumstances that the SORP sets out. In our view, they are the appropriate ones. I do not quite agree with the noble Lord, Lord Sainsbury of Preston Candover, in his interpretation of the SORP becoming more rigid. We do not see that in its current published form. There is sufficient latitude for non-disclosure when it is justified and right.

I am sorry that I cannot be more helpful. I certainly understand the philanthropic spirit and thinking behind this issue. In personal terms, I have some sympathy with where the noble Lord, Lord Sainsbury, is coming from. In terms of the charitable sector overall, and its desire in the main to be open, accountable, transparent and in the public domain about where money is coming from and why, it is in the
 
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greater public interest that we retain the measure as it currently is and as it is being interpreted from the 1993 Act.

Lord Phillips of Sudbury: Before the Minister sits down and the noble Lord, Lord Hodgson, stands up, perhaps I may say that nothing the Minister said countervails the point made by the noble Lord, Lord Sainsbury of Preston Candover, about discouraging philanthropy. Surely, there is no good reason, in public interest terms, why someone who wants to be generous anonymously should not be generous anonymously.

Lord Bassam of Brighton: The noble Lord is absolutely right, and I would not argue against that point.

Lord Sainsbury of Preston Candover: Does the Minister not recognise the importance of the creation of new grant-making trusts and that, given the conditions of publicity that will happen, people will be discouraged from doing so? We already have evidence of a 20 per cent turn-off of people who do not want to have their generosity publicised. The advantage to the charity sector of giving money that cannot go other than to charity, compared to the gift aid scheme, is terrific.

I also ask the Minister to consider that one way in which to meet my objection, which is really that we should encourage philanthropy and new trusts, would be to have a different rule during the lifetime of a creator or founder of a new grant-making trust. The rules could apply differently during the lifetime of the man who has given the money, so that publicity of his generosity would not occur during his lifetime. The rules could apply afterwards. That would meet the Minister's point while at the same time meeting the nervousness of someone considering a very large gift from their wealth to give permanently to charity. I ask the Minister to give that proposal careful consideration.

Lord Bassam of Brighton: That is an interesting point, and it might be argued with regard to the fourth of the circumstances and the disclosure of particular grants—whether it might seriously prejudice the grant-maker or the institution receiving the grant. It may well be that it falls within that particular orbit.

I shall make two points. It is worth reminding ourselves that the Charity Commission will, as a consequence of the legislation, have a duty to act to encourage charitable giving. Its interpretation of SORP falls within that consideration. In addition, because we live in these more accountable times when people want transparency, that is in itself an encouragement to people to make donations. Their motives will go unquestioned and be quite clear and the motivation behind their giving will be entirely transparent. That is an encouragement to people.

Although the noble Lord has made a good point—that people may be put off—at one end of the argument, there is also an encouragement at the other
 
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end. There will be a giving regime in the context of accountability and transparency, which it is important to take on board.

Lord Swinfen: I thank the Minister for giving way. One problem with wealthy people who wish to set up a charitable foundation is that they as individuals will be bombarded with appeals. Some 20 years ago, I talked to some representatives of a large commercial organisation. They told me that at that time they got within the region of 17,000 letters of appeal a year and had had to set up a complete department to deal with them. I know that that was an organisation; but an individual who is known to be extremely wealthy will already be getting appeals from individuals for charitable donations, and a large number of them, before they even set up a charitable foundation. When it is known that they have set up a charitable foundation, particularly when they wish to keep an interest about where the funds from that foundation are used, philanthropically, they will be bombarded with appeals. Quite honestly, I feel sorry for them.

Lord Bassam of Brighton: I hear what the noble Lord says, but in any event I am not sure that the amendment would make a great deal of difference to the circumstances of the organisations to which he referred in their being recipients for requests for financial support. The noble Lord gave an example from 20 years ago when the regulatory regime covering these matters was somewhat different. I recognise that there is an issue, but I do not believe that this is the right way in which to proceed to resolve it. In fact, the amendment could create more problems than it solves.

Lord Hodgson of Astley Abbotts: I am grateful to the Minister for his very full and considered, if ultimately unhelpful, reply and to those Members of the Committee who have spoken either for or partially for the amendment. We must be clear that nothing in the amendment is designed to ensure that the regulator or the tax authorities do not know. It is absolutely clear that the Charity Commission and the Revenue must be informed.

I knew that someone would produce the rabbit marked "money laundering" out of the hat before the end of the afternoon. I think that my noble friend Lord Swinfen dispatched that particular ball off the boundary fairly swiftly. My view is that if the charity of the noble Lord, Lord Phillips, does not want to take an anonymous donation, the words are, "No thank you". You do not have to take an anonymous donation or you could take an anonymous donation with—to meet the noble Lord's particular point—a requirement that there should be no subsequent publicity by the donor. The noble Lord might particularly wish to apply that if the prospective gift was of a size that would and could, in the eyes of the public, be seen to be influencing the operation of the charity and the way in which the charity was behaving.

There is a way through that particular thicket. I accept that there is a balance to be struck between personal privacy or the foundation privacy and public accountability and transparency. But the reality is
 
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that, as my noble friend Lord Swinfen has said, publicity means that charities and foundations are bombarded with requests. The Minister raised the question of there being more bureaucracy as a result of how the donor would check whether his requirements were being met. If he wants to give his gift anonymously, he surrenders the ability to influence that. It comes with the territory.

I would like to see the growth of philanthropy and philanthropists sometimes give money to unpopular causes with which they would not wish to be associated publicly, but perfectly proper causes. The real argument is my noble friend's argument: are we getting more foundations or not? He tells us that we are getting fewer foundations. Why is that? I think that it is because people do not want the publicity. They are frightened of being held up in the press. The Americans will say that the British disease is not idleness, the British disease is envy. People will feel concerned that they will be put in the public eye, which is a shame and a pity.

I do not pretend that the amendment is word perfect, but this amendment, suitably changed, could go some way to redress the imbalance to which my noble friend has referred. We will consider it some more. We will get opinion from the world at large. My noble friend will no doubt have some points to make and want to come back on Report. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 102 not moved.]

Schedule 4 agreed to.

Clause 9 [Registration of charities]:

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