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Lord Hodgson of Astley Abbotts moved Amendment No. 106:
The noble Lord said: Moving down page 10 of the Bill, we come to the issue of the copies of trusts of registered charities. This is a probing amendment to tease out the Government's thinking.
New Section 3(8) of the 1993 Act provides that copies from the commission of the trusts of any registered charities shall be,
But the subsection adds, in lines 21 and 22,
Our Amendment No. 106 would remove that power for the Secretary of State to make regulations which would interfere with public access to the trusts of registered charities. Why would the Secretary of State need the power to make regulations concerning public access? Perhaps the Minister could illuminate our debate with some examples of circumstances in which that might be deemed necessary.
[The sitting was suspended for a Division in the House from 5.23 to 5.34 p.m.]
Lord Hodgson of Astley Abbotts: Amendment No. 106 concerns the issue of copies of the trusts of registered charities, which are to be available for public inspection at all reasonable times. The amendment relates to the last two lines of Clause 9(8) half way down page 10 of the Bill, which states that public inspection shall be available,
Before the Bell rang for the Division in the Chamber, I was saying that, as an emphasis on transparency and public understanding underpins a central theme as the Government's strategy for the charity sector throughout the Bill, it seems fairly contradictory to give the Secretary of State powers to undermine important features such as this. As I said, on a probing basis, we seek to remove these two lines so that the Minister can persuade us otherwise. I beg to move.
Lord Swinfen: As the commission is a non-departmental public body, why should the Secretary of State make regulations and why should that not be done by the Charity Commissioners?
Lord Shutt of Greetland: Bearing in mind our earlier discussions, I wonder whether the measure is there to assist people who are thinking of setting up foundations and who the noble Lord, Lord Sainsbury of Preston Candover, may wish to assist.
Lord Bassam of Brighton: It does not particularly do the latter, but I hope that noble Lords will accept my explanation as being both benign and beneficial. The register kept by the Charity Commission includes details of all the registered charities in England and Wales and the details of charities which have been removed from the register. The register is available 24 hours a day on the commission's website. The governing documents of the largest 200 charities are also available to view on that website. Members of the public may visit the commission's offices on weekdays
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between 9 a.m. and 5 p.m. in order to search the register for charities or to view, by prior arrangement, files containing the charity's governing documents and recent accounts. In addition, for a small fee, anyone can obtain photocopies of charities' accounts and governing documents by calling the commission's Contact Centre.
The purpose of including the provision for the Secretary of State to make regulations contrary to this duty of the commission is so that, in the very rare circumstances where there are compelling reasons not to open the governing documents of a particular charity to public scrutiny, that document can be withheld. I can tell the Committee that, so far as we are aware, no regulations have ever been laid to achieve that effect. But, having thought about this matter and having talked to officials and to the Charity Commission, I can see the circumstances in which it might be appropriate. Two good examples come to mind.
The first is where a women's refuge was governed by trust deed and it included the names and addresses of the trustees. There might be good reason to withhold that trust deed from public scrutiny in order to protect the trustees. It is not unknown for women's refuges to be the subject of unwarranted and unpleasant visitations from former partners who may be violent and who may wish to take out their anger and frustration on a broader range of individuals. In those circumstances, one might accept that it would be entirely reasonable.
There might also be a good case for trust deeds and the details of trustees to be withheld where the trust was responsible for animal testing in the interests of scientific advancement. As we all know from experience, there is a real problem in that sector, and there may be circumstances in which, in order to offer a degree of protection, it would be right to withhold the document.
In any event, the Secretary of State would exercise the power only very, very occasionally and in circumstances of that kind. The assumption would always be that all trusts of registered charities should be open to public inspection.
Furthermore, when considering the amendment, we have identified that subsection (8) allows the Secretary of State to make regulations which state that certain trusts of charities should not be kept by the commission. While we can not envisage any circumstances when it would be appropriate to exercise this power, we feel it would be wise to table an amendment on Report to make it clear that the Secretary of State's power extends only to the circumstances described above. This probing amendment has made it clear to us that we may need to clarify that issue and I am grateful to the noble Lord for tabling it in such terms.
The noble Lord, Lord Swinfen, asked me a question which I have not answered. It is more appropriate for the Secretary of State, as the holder of the public interest, to make the regulations, rather than the
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commission itself to self-regulate its own activity in the alternative manner which the noble Lord thought might operate.
Lord Hodgson of Astley Abbotts: I am grateful to the Minister for his reply and I am persuaded by the points that he made. When he says that, first, regulations have never been made under this heading, secondly, that it would be in exceptional circumstances and, thirdly, it would be "very, very occasionally", one is reassured. Obviously, the drafting is a good deal wider than that and that was what caused our concern—it does not say "except", "occasionally" or "exceptionally", it just says that these regulations can be—dare I say?—derogated from, apparently casually. We will read the Minister's comments carefully and look forward to seeing his proposals on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hodgson of Astley Abbotts moved Amendment No. 107:
The noble Lord said: We now move down the page to the registration levels for charities. This group is part of a series of amendments concerned with the levels of income and assets at which registration is required. Later, when we reach Chapter 6, we will consider the same topic in relation to requirements for audit or examination of trusts or charitable companies.
We accept that one of the purposes of the Bill is to maintain public confidence in the charitable sector and that regulation by the Charity Commission is an important element in that process. But we do not think that the Government have got the balance right regarding registration levels. Rather, we argue that the scales have tipped too far towards regulation with its form-filling and bureaucracy. Inevitably, this will fall particularly heavily on the smaller charities and may have an adverse effect on the development of that sector.
We accept that the proposals in the Bill for minimum registration levels represent an advance. An annual income of £1,000 has become £5,000, and we particularly recognise the value of the removal of the requirement to register if the charity has any endowment no matter how small. But, £5,000 annual income is a tiny sum—certainly the misappropriation of a sum of that size, while serious and undesirable, will not affect public confidence. So the amendment seeks to raise that £5,000 to £25,000 per annum. I recognise that that is an arbitrary figure, but we calculate that it would remove just under 50,000 charities or almost exactly one quarter of the total from the necessity to register. I use the word "necessity" to register and I shall return to that matter.
But consider the reduction in the burden of work both for the Charity Commission and for those smaller charities—all achieved at negligible risk to public confidence. So I appeal to the deregulatory instincts that should lurk in the breath of every free Briton. That is the purpose of our amendment. I see the
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Minister smiling at me, and I suspect that his speaking note suggests that research among the charitable sector indicates that smaller charities want to be registered. No doubt that is true. They do so for a variety of reasons. A registered charity number is an imprint of quality; registration is a protection for the trustees; and, finally and possibly most significantly, many grant-giving charities such as that of my noble friend Lord Sainsbury and local authorities will make grants only to charities which are registered.
5.45 p.m.
The force of this argument is accepted and that is where our second amendment, Amendment No. 108, comes in. It changes subsection (6), which currently gives the Charity Commission the permissive power to register smaller charities. By substituting "must" for "may" in line 34, the balance of power is switched to the charity. Therefore, if a smaller charity wants to be registered, for whatever reason, it can be assured that it can do so. In doing so, it must accept the inevitable paperwork. But if it does not wish to register, provided that its income is below £25,000 per annum, it does not have to do so. The saving in compliance costs would be huge and a better balance between risk and regulation would be struck. I beg to move.
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