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Lord Hodgson of Astley Abbotts: I am grateful to the Minister and to all Members of the Committee who have spoken. I understand and accept that £25,000 was an arbitrary figure designed to test the Government's thinking on this point. I do not accept that, of itself, £5,000 is right. The noble Lord, Lord Borrie, said that £1,000 may have been right in 1993, but it might have been the wrong figure then, so we may be starting from the wrong base. The noble Lord, Lord Phillips, made a fair point on the capital base. Of course, on £5,000 a capital base is only £100,000, so it is quite small on the figure to which the Government are sticking.
I wanted to strike a balance and focus the commission on the areas of major risk, which are the big charities. For a charity with an annual income of below £25,000, I felt that public involvement—and therefore public risk—was very low, but I accept the points made. I hope that the Government may think again about the £5,000 and push it a bit further along the lines spoken about by the noble Lord, Lord Shutt. For the mean time, so long as the "may" and "must" issue can be resolved so that it is clear that charities can get on to the register if they wish and thereby access all the advantages to which the Minister referred, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
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6 p.m.
Lord Shutt of Greetland moved Amendment No. 107A:
"( ) In subsections (3) and (4) above "the appointed day" shall not be before 1st April 2008."
The noble Lord said: The amendment refers to line 23 on page 11, which sets out that certain charities at present not registered will need to register. Reference is made to the "appointed day", but we do not know when that is. I have been asked to move the amendment on behalf of the very small nonconformist Churches, which do not need to be registered at present. They would exceed the income of £100,000 and feel that they need time to get used to a new regime.
Another way of looking at the problem would be to exempt the Churches from the provision, but they see the point of being registered and are happy to do so. However, they feel that they need the time to get their house—or church—in order to be ready to register for the appointed day. The matter is therefore when that day should be. The amendment suggests that it be not before 1 April 2008, which gives us three years. That is the gist of the amendment. I beg to move.
The Lord Bishop of Southwell: The changes to be made by the Bill as regards the charities that are currently "excepted" from registration are obviously of some concern to the Church of England as well, given that more than 2,000 of our parochial church councils alone seem likely to be affected by them as the Bill becomes law. We are therefore alert to the implications of the new arrangements, and do not underestimate their implications—in terms of the need both to equip the trustees of the charities concerned to comply with their new obligations, and to agree with the Home Office and the Charity Commission the detailed arrangements for what may be a substantial process of registration.
Given the scale of the exercise and the importance of conducting it as efficiently as possible, we imagine that those discussions will need to cover a range of issues, from the documentation on the basis of which registration should take place, to the question of whether applications by charities associated with particular denominations are better dealt with together, over a staged period. We see discussions of that kind as capable of assisting not only the Charity Commission, but the charities themselves.
In contemplating the process, we have been encouraged by the positive attitude of the Home Office and the Charity Commission, which have shown themselves ready not only to recognise the desirability of giving the denominations a sufficiently long lead time to prepare for registration, but to consider the issues raised in that connection. Consistently with that constructive approach, the proposal as we understand it is that the new arrangements will not be brought into force until the expiry of the current exceptions from registration in 2007. If so, it seems that the timetable will allow— adequate time for appropriate discussions to take place between the Charity Commission and all
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those denominations and other faith groups affected by the proposals, without any need for the coming into force of the new arrangements to be postponed further in the way proposed by the amendment.
As Members of the Committee can hear, I am resisting the amendment slightly, but not too virulently. Rather than seeking a further postponement, we are content to work with the Home Office and the Charity Commission within the timetable set out and with a view to resolving together, in collaboration and for the benefit of all concerned, the various practical issues which will inevitably arise if the process is to be completed efficiently and effectively.
Lord Hodgson of Astley Abbotts: I have a Clause 10 stand part objection grouped with the amendment. We are concerned about the appointed day, as referred to by the noble Lord, Lord Shutt. Clause 10 relates to the interim changes in the threshold for the registration of small charities. It allows the Secretary of State to introduce changes in advance of the implementation of Clause 9 and the establishment of the new income threshold for the registration of charities. I thought that we could make better progress if we discussed the appointed day at the same time.
As we debated on Amendment No. 107, the Minister has stuck to his guns that £5,000 is the correct level for the registration threshold. I would therefore be helpful on a probing basis if the Minister could explain the purpose behind Clause 10. If the Minister believes that £5,000 is the correct amount, why should the Secretary of State have the power to make interim arrangements? In my reading, Clause 10 seems to reduce the impact of much of the drafting of Clause 9(3)(a) on page 10, since the figures specified can be changed by the Secretary of State at any point, apparently without any restrictions or need to consult.
The power to make interim changes also begs another question, at which the noble Lord, Lord Shutt, hinted. When do the Government expect Clause 9 to come into force? No doubt the Secretary of State has been given the powers in Clause 10 because the interim could be expected to be lengthy, but how lengthy?
The sector is concerned that the legislation should be put into effect reasonably swiftly after its passage through Parliament and that Clause 10 infers a time lock attached to Clause 9. If we are all concerned about bureaucracy, the cost of compliance and registration, to use the less emotive phrase of the noble Lord, Lord Borrie, we do not want to see the Bill coming into effect in dribs and drabs. Perhaps the Minister will explain why it is expected that the Secretary of State might find the need to alter the threshold for the registration of small charities in the interim before the commencement of Clause 9 and why any interim period is required.
Lord Bassam of Brighton: It may be helpful if I explain Clauses 9 and 10 together. The noble Lord, Lord Hodgson, and other Members of the Committee have rumbled the fact that they inter-relate. Clause 9
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introduces three sections—Sections 3A and 3B—which together replace the existing Section 3 of the Charities Act 1993. For the most part, these provisions restate the existing law as set out in that section. However, there are some changes of substance and one is the provision at new Section 3A(2)(b) and (c) at lines 35—
The Deputy Chairman of Committees (Baroness Turner of Camden): I must declare the Committee adjourned for 10 minutes.
[The Sitting was suspended for a Division in the House from 6.8 to 6.19 p.m.]
Lord Bassam of Brighton: As I was saying before we were interrupted, there are changes of substance. One is new Section 3A(2)(b) and (c), at lines 35 to 45 on page 10, which requires what are currently excepted charities to register with the Charity Commission if their gross income exceeds £100,000. Another is the general increase in the threshold for registration from £1,000 to £5,000—we have just discussed that—under new Section 3A(2)(d).
The Government have given an undertaking that no excepted charity will be required to register with the Charity Commission until October 2007, which is when the current regulations relating to some of the excepted charities run out. For that reason, it is not proposed to bring Clause 9 into effect in its entirety until October 2007. That will give the charities concerned ample time to prepare. We do not see that it would be necessary to delay the process for a further six months to April 2008, as mentioned in the amendment. The Government believe that it would be desirable to bring the general increase in the threshold for registration into effect sooner than that. Clause 10 accordingly allows my right honourable friend to make what the Bill calls interim changes in the registration threshold pending the coming into force of Clause 9.
The intention is to use that provision to raise the registration threshold for small charities to £5,000, perhaps a couple of months or so after Royal Assent, and to remove the current requirement that a charity must register, however small its income, if it possesses any permanent endowment or uses or occupies any land or buildings. Those changes will give small charities with income between £1,000 and £5,000 the early opportunity to decide whether to stay registered or to deregister. Subsection (1)(b) enables the Home Secretary to align the definition of gross income used for the purpose of the registration threshold with the definition of gross income used for the purposes of the other financial thresholds, such as those to do with accounting and auditing.
The noble Lord, Lord Hodgson, was concerned about Clause 10. He is right in his estimation of how it works. It will cease to have effect when Clause 9 comes into force in October 2007 and the new Section 3A takes over. I can see that that might seem a complicated way of achieving a fairly simple change, but I am afraid that the best brains in the Home Office
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and the Charity Commission and on these Benches have not been able to find a more straightforward way of doing it. The objective of raising the registration threshold is shared across the Committee, I am sure. I hope that the noble Lord will feel able to withdraw his amendment, having heard what I said on this technical matter—the date of implementation is not technical, but is to be established for a good purpose.
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