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Lord Phillips of Sudbury: As the noble Lord, Lord Hodgson, said, my Amendment No. 105A is within this group. It would be a pity to leave the category as covering only charities that have ceased to exist because there will be the occasional charity that exists in form but not in any vital sense, and that is a permanent state of affairs. Therefore there seems some point in including my amendment, as it would be helpful to the public to have a register that reflects reality. If a shell is wholly empty of vitality—that is, if
 
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a charity is in "permanent abeyance"—the Charity Commission should have the discretion to remove it from the register.

I wholly concur with the other points made by the noble Lord, Lord Hodgson. It is for the reasons that he gave that the wording of the Bill should not be allowed to remain as it is.

Lord Swinfen: I shall raise one black cloud over the argument. What about a small charity that has been left a residential property on the condition that the existing occupant is allowed to remain there for the rest of his life at a peppercorn rent, and that happens to be the main asset of the charity? Imagine that the charity remains in existence but is unable to do any worthwhile work while the tenant of the peppercorn continues to live. Once he dies, the property can be sold, perhaps at a substantial figure that then allows the charity to operate.

There is absolutely no reason why an individual should not set up a charity with such an asset, with the intention that it should operate some years later when the tenant of the peppercorn dies—imagining that the tenant is genuine and does not necessarily receive charity himself. We should consider the option that the charity might be dormant for a number of years and, like the acorn under the ground all winter, spring to life with the death of the tenant. We should not throw out such charities completely.

Lord Phillips of Sudbury: The noble Lord has put his finger on the very important issue of dormancy. In fact, the circumstances that he describes would be ones in which the charity would be deemed to operate, albeit at a very modest level. But the dormancy case is vital. Lots of small charities enter periods of quiescence while they await funds, appoint new trustees or whatever else. There are many such charities and it would be utterly wrong to strike them from the register because they were not operating for a year or two.

The Lord Bishop of Southwell: Perhaps I could add to the debate, without digressing too much, by way of illustration. In 1987, when taking up my office as Archdeacon of London, I found a tin box in the Church of St Peter's, Cornhill, in the vestry, beautifully labelled "St Antholin charity". I took it home to investigate. I discovered a Bank of England chequebook in it. After a lot of research and help from the Charity Commission, I discovered that that charity had been in abeyance for a long time. It provided for 30 lectures to be given three times a year in the puritan school of doctrine by a benefice clergyman of the Church of England living within one mile of the Mansion House. They were a rare species, even in 1987.

With the help of the Charity Commission, we revivified that charity. It now provides an annual lecture by an Anglican clergyman from anywhere in the puritan school of doctrine. That is a worthwhile
 
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academic-come-spiritual charity. It would be sad if some of those dormant charities were lost forever by too quick an intervention by the Charity Commissioner without looking for an appropriate cy-près to find other people willing to revivify them.

5.15 p.m.

Lord Bassam of Brighton: That was a very interesting example. I fancy that the co-operation that the right reverend Prelate received in 1987 would still be provided now; in fact I am sure that it would. The Charity Commission wants to work with charities to revive them in exactly the way that the right reverend Prelate described. That is a good example of how constructive a role the Charity Commission plays in such circumstances.

That was an interesting digression, but I return to the amendment because it raises one or two quite interesting issues. It may be helpful if I explain how, under the Charities Act 1993, the commission already has a duty under Clause 3(4) to remove charities that do not operate from the central register of charities. When I have explained how it works, Members of the Committee may take a different view of the amendments. If I were rating the amendments, I should give the noble Lord, Lord Hodgson of Astley Abbots, a higher rating than the noble Lord, Lord Phillips.

Lord Phillips of Sudbury: Oh!

Lord Bassam of Brighton: Well, one does these things for fun in one's idle moments. I like the term, "permanent abeyance", but it is probably not as clinical as the term, "does not operate". Anyway, we will come to that.

Maintaining an accurate and up-to-date register is an important role for the commission. Indeed, it is mentioned specifically in new Section 1C(3). The obligation to remove charities that do not operate is in support of the maintenance of the register. The commission will not remove a charity from the register until it is sufficiently satisfied that it does not operate. The commission undertakes a number of checks to determine that the charity does not operate. For example, the commission must be satisfied that the charity has no property of any kind, including money, land, shares or other assets, contractual rights and legal claims against third parties, no rights to receive property of any kind and does not expect to receive any property. The commission must be satisfied that all those conditions apply.

The commission must be satisfied either that there are no charity trustees or, where there are trustees, that they do not act and do not propose to act in the administration of the charity. The commission identifies charities that might not be operating by their failure to respond to requests for information. For example, each year the commission asks charities to provide information by way of the annual return and data update form. For charities that have not responded, the commission undertakes all reasonable enquiries of correspondents, trustees past and present,
 
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professional advisers, third parties and umbrella groups to establish whether charities are still operational.

The commission's priority is to get charities back into its regulatory regime, not to remove them as soon as possible. Sometimes, that may be impossible—for example, where the commission is told that that charity is no longer functioning or where the correspondent and trustees cannot be contacted. When the charity is removed, a letter is issued to the last known correspondent, offering the option of reinstatement on receipt of information to the effect that the charity is still operating. When it proves possible to contact the trustees of a charity that no longer operates, the commission asks for final accounts showing a nil balance, after which they will remove the charity from the register. I hope that in saying all of that, I have demonstrated that the commission does not and will continue not to remove legitimate charities which want to operate. Removal is carried out only after it has been reasonably established that a charity really is not operating or functioning.

The amendment would mean that the commission would have to leave on the register those charities that do not operate, which is incompatible with its duty to maintain an accurate register of charities. The amendment seeks to make it clear that it is those charities that appear to be permanently suspended that should be removed. I would argue that the commission's checks, which I have described, are sufficient to mean that, as far as is reasonably and practically possible, the commission can be satisfied that the charity in question does not operate.

In saying all of that, I hope that I have reassured Members of the Committee who have tabled amendments that the commission does not act in a way which undermines the credibility of the register, but gives every encouragement and opportunity to charities that might be dormant or semi-asleep to come forward and prove their existence, their good works and so on. I hope that noble Lords will feel able to withdraw, or not to press, their similar if differently worded amendments.

Lord Hodgson of Astley Abbotts: I am grateful to the Minister. The definition that he has given of "operate" is pretty inclusive—with the presence of any property rights and the trustees' ability to respond. That removes the concerns that we have about the word "operate", if a conventional word can be defined. As the Minister said that it would not be the wish of the Charity Commission to rush to de-register people on an "asap" basis, as I believe that he put it, I am satisfied and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 105A not moved.]

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