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The Lord Bishop of Southwell: My Lords, we on these Benches want to associate ourselves with the tribute paid by the Minister to Baroness Blatch. She was a devoted Christian and a doughty fighter and debater, whose fighting spirit showed through the latter stages of her illness. Her doughtiness led her at times to take on the Bench of Bishops and my friend the right reverend Prelate the Bishop of Oxford said to me just after Prayers that he still carried some of the bruises. She will be sorely missed.

Like previous speakers, I declare an interest both in a personal capacity as a trustee in various charities and an ex officio trustee by virtue of the office of Bishop. I believe that those are all in the register.

On Second Reading I spoke from these Benches in general support of the previous Bill. I welcomed the changes that it would make to the framework for the regulation of charities and the provisions that would benefit charities by giving them greater freedom, subject to appropriate safeguards in pursuing their charitable purposes.

The Bill in its reintroduced form deserves no less support. Indeed, there are some welcome changes, such as the new power for charity trustees to take out trustee indemnity insurance. That provision may help not only to prevent people being discouraged from acting as trustees of the smaller charities but to relieve the burden on the hard-pressed Charity Commission.

The Bill has not been amended in relation to the abolition of the presumption of public benefit, which applies in some cases at present when charitable status is being determined. At Second Reading and in Committee on the previous Bill, we spent many slow but happy hours in the Moses Room, lacking only the provision of tea at tea time. I expressed many concerns about the implications of the abolition for the large number of charities associated with the Churches and
 
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other faith groups, and went on to seek assurances that, if public benefit had to be demonstrated, the assessment of that benefit would be undertaken in a properly informed and constructive way.

Since then, however, representatives of the churches have had the benefit of a constructive and helpful meeting with representatives of the Charity Commission, which has gone some way to reassuring us that the guidance on the public benefit requirement that the commission will have to produce will properly reflect not only the wide range of religious activity that is currently accepted as charitable, but the full breadth of the benefit to the public—both direct and indirect—that is derived from that activity. Following that encouraging start, we look forward, together with other faith communities, to working with the commission on the development of the statutory guidance.

However, the removal of the presumption of public benefit is not the only way in which the Bill will have an impact on the Churches and other faith groups. In many cases, the institutions through which they work enjoy charitable status. The Bill will change the nature of the relationship between some of those institutions and the Charity Commission.

At one end of the spectrum the Church Commissioners will cease to have exempt charity status—a change that we acknowledge brings them into line with other charities. Initial concerns about the implications of the change for the continued ability of the commissioners to fulfil their important role of funding clergy pensions, which to people like me become increasingly important, and the ongoing support of the Church in areas of need and opportunity, have been allayed by assurances given by the Minister's colleagues. We are grateful for those assurances and for the spirit of openness which Ministers have shown.

However, the Church Commissioners are by no means the only body connected with the churches for which the Bill will bring about a major change in their relationship with the Charity Commission. The amendments to the position of excepted charities will mean that many denominational charities will, for the first time, have to register with the commission. They are often local bodies, including parochial church councils in the case of the Church of England and church and chapel trustees in other denominations. They are all basic building blocks of the churches at local level and, indeed, in many areas of the local community.

That does not give undue cause for concern to those of us on these Benches. We recognise that even as excepted charities, such bodies have rightly had to meet the same requirements in many respects as registered charities. The real issue is not whether such bodies should be registered, but whether they are registered or excepted, that the regulatory burden to which they are subject is not in danger of becoming too great.

The bodies that I have described are essentially community organisations. As such they are heavily reliant on the good will of volunteers and often do not have access to skilled, professional advice. As a result we
 
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hear increasing concerns that religious bodies are encountering difficulty in recruiting new office holders because of concerns about the responsibilities involved.

For example, there is evidence that parochial church councils are finding it increasingly difficult to persuade people to act as treasurers, while the Church of England every year needs to recruit 13,000 plus treasurers and 26,000 plus church wardens to serve those local communities. I join the noble Lord, Lord Phillips of Sudbury, in expressing my concern that the regulatory burden, particularly in relation to financial matters, should not be increased further. To do so would, in our view, run the risk of infringing the principle enshrined in one of the proposed new duties of the commission—that regulatory activities should be proportionate. The effect of the regulatory burden in the form that it will take if the Bill passes into law will need to be kept under careful review, lest excessive regulation stifle the voluntary impulse on which we rely in our nation, and on which so many of our smaller local charities depend. We therefore welcome the opportunity provided for that by the requirement for a formal review process, to be imposed in Part 4.

Subject to that small but cautionary note, we welcome the changes that the Bill will make to the regulation of charities and, for our part, commend it to your Lordships' House.

4 pm

Baroness Pitkeathley: My Lords, here we are again. I said in my Second Reading speech on the Bill that was sadly lost before the election that, if it had become law absolutely as it stood, I would have been content. There are many people in the charitable sector who were bitterly disappointed at what transpired, and I must include myself in that. However, those of us who have worked most of our lives in or with the voluntary and community sector have learnt to be flexible and to take a positive view of most eventualities. That is what we should do now—to celebrate the improvements made to the Bill as a result of our earlier deliberations and, above all, to resolve that this time the Bill should reach the statute book with as much speed as can be accomplished. We have waited long enough and the Bill is good enough for there to be no excuse for delay.

I must declare specific interests, as well as those of longevity of interest in the sector. I am president of Volunteering England, a member of the advisory council of NCVO, vice-president of Carers UK, the Princess Royal Trust for Carers and the Parkinson's Disease Society, and president of a local community council. In addition, I am chair of the advisory panel on Futurebuilders, which has a particular interest in developing the role of the voluntary and community sector in the delivery of public services.

In relation to that, I want to point out again that the Bill does not stand alone in its relation to the voluntary sector. It is part of a constellation of measures that the Government have initiated and put into place. In the 40 or so years that I have spent working with the sector, I have heard and seen many a government
 
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review, proposal and initiative with the voluntary sector. In that regard, I too have very happy memories of Lady Blatch when she was in a ministerial position. All those initiatives have focused on recognising the huge contribution of the sector—its ability to play a part in what we now call civil renewal or community cohesion—and they have all been welcome. However, it is safe to say that no government have taken support of and engaged with the charitable sector as seriously as the past two Labour governments, nor shown their commitment by putting so much real money in the way of the sector.

The Futurebuilders programme itself, which came out of the Treasury cost-cutting review and which we hope will show that the charitable sector can be a core provider of public services and justify major public investment, is one initiative. The ChangeUp programme, aimed at supporting the infrastructure of the sector, is another. So is the creation of the post of Minister for Communities, as is the support for volunteering. All those are important parts of the support that this Government and their predecessor have committed, which will enable charities to play their full part in service provision and tackling social justice. The Bill must be seen in that context. It too will play a significant part in enabling charities better to define their purpose and ensure their proper regulation.

I very much welcome the introduction of the universal public benefit test and the extension of the categories of charity to 12. I am also content that the Charity Commission will decide whether charities meet the test. At the previous Second Reading, I expressed my confidence that the Charity Commission under its new leadership would administer the test robustly, to the extent of removing charities from the register if they failed to meet the test. I am even more confident now, having seen at first hand the success, experience and skill of the new leadership at the Charity Commission. We have an additional safeguard in that a new subsection has been added, stating that:

"In the exercise of its functions the Commission shall not be subject to the direction or control of any Minister of the Crown or other government department".

I hope that that will allay the anxieties of those who fear that the Charity Commission might come under too much influence from its sponsoring department.

During the passage of the previous Bill, we considered an amendment from the noble Lord, Lord Phillips, to strengthen the public benefit test for charities charging high fees. I hope that the Government may be willing to accept a similar amendment this time, to ensure maximum possible protection for the end users of charitable services, who should after all always be at the forefront of our mind as we consider the Bill. In that regard, we should also ensure that cost does not preclude poor charities from appealing against Charity Commission decisions, as the noble Lord, Lord Phillips, reminded us. I also support NCVO's proposal for a suitors' fund; that should seriously be considered.

I am also pleased to see the addition to the Bill which ensures that the commission's regulatory activities should be proportionate, accountable, consistent,
 
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transparent and targeted only at cases in which action is needed. The "one size fits all" character of the Charity Commission's interventions in the past has often resulted in overregulation for small, informally run charities, and perhaps not enough regulation for larger charities, which operate in many ways as major service providers in the public sector. The primary purpose of regulation must be the upholding of public confidence, so the extra regulation of fundraising is welcome too. On the whole, public confidence in charities is high but the rare fundraising scandals do not help.

My personal experience of two difficult issues gives me reason to applaud two provisions in the Bill. The first is the formation of the new type of charity, the CIO. Anyone who has run a charity that is subject to both charity law and company law will know how much extra work that entails. As someone who struggled to merge two charities, I am delighted with the role now given to the Charity Commission to facilitate that. I record again my gratitude to the noble Lord, Lord Phillips, who helped me do that; he did not do it by magic—it was a struggle—but we accomplished it, and I am glad that mergers will be simpler.

I do not share the anxiety of some about the Charity Commission giving advice to charities. Charities usually need as much advice as they can get. If sometimes that might include advice not to set up a charity, that would be helpful. It is controversial to say so, but the setting up of endless small charities in the memory of every child who unfortunately dies, which then compete endlessly for money and attention with other small charities, is not always helpful to the cause or the charitable sector as a whole. However, it is perfectly understandable that bereaved parents wish to take such action. If the Charity Commission gave advice about that or other matters, it would be vital that it be clear whether it were in advisory or regulatory mode. There has been confusion about that in the past so the separation of functions is vital, but there is no reason whatever why that could not be ensured. I am sure that the Charity Commission would be more than willing to make that important distinction clear.

There is one area where I feel that the Bill has not taken the opportunities that it could have done, which is the strengthening of encouragement to giving. I am not talking about fundraising, where the new proposals are satisfactory, but of the promotion of philanthropy. The insertion of the new clause protecting the identity of those who set up charitable trusts and information about individual grants is most welcome, but more could have been done to make the development and promotion of philanthropy more central to public life. It is an area in which we still have a long way to go in this country. We saw in relation to the tsunami how generous the British people can be. Should we not do more to encourage them?

This is an historic Bill, not only because it may be very rare in having been mentioned in three Queen's Speeches, but because it has been so long awaited. Let us ensure that it has a swift and successful passage through your Lordships' House.
 
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4.9 pm

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