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Lord Best: My Lords, I declare my interests as the chief executive of a major charity, the Joseph Rowntree Foundation, and a charitable housing association, the Joseph Rowntree Housing trust. I am also a member of the Advisory Council of the National Council for Voluntary Organisations—which has done so much to take forward the debate on public benefit—and chairman of the Giving Forum, set up by the Charities Aid Foundation to boost philanthropy, corporate and individual giving of money and time.
I was on the Joint Committee that considered the original Bill, and have regarded it as a privilege to participate in the process of this legislation throughout its course to date. Clearly, it reaches its second Second Reading in very good shape, with only a handful of outstanding points to resolve. The whole process has been a model of co-operation and consensus, and it seems certain that the resulting Charities Act will be extremely valuable.
In much of the discussion on the Bill to date, one can detect an inevitable tension between independence and regulation, between freedom for charities to do their own thing and to have control over their affairs to prevent abuses or loss of reputation. In particular, charities that accept the bulk of their funding from statutory sources always face the danger of a culture of contracts and compliance, undermining the value of a truly independent input to solving social problems. Achieving the balance to maximise the gains from a sector that is outside the profit-motivated private sector and outside the necessarily constrained public sector will require vigilance and even the occasional campaign from those of us who have spent their lives in the charity-voluntary-community third sector.
Perhaps I may take a few moments to explain my support for the Bill's provisions on "public benefit", but also my support for the earlier amendments relating to this issue raised by the noble Lord, Lord Phillips of Sudbury. The best illustration of the public benefit debate, and the most controversial ingredient in the Bill, relates to the treatment of independent schools that charge high fees, but are registered as charities.
I start with a point of principle. It follows from a commitment to the not-for-profit sector that I support the concept of provision of education that is independent both of the state and the profit-making private sector. Linked to this concept of a third way of doing things, I would suggest that this might be the moment to drop the term "public school", which so inaccurately describes these bodies. All independent schools are clearly distinct from the public sector in their governance and funding. There are schools in the private sector that exist to make a profit for shareholders, and their numbers are growing. But there are also the independent schools that are charities, with a status that lies between the private and public sectors in that middle ground of the third sector, where pursuit of social objectives is a key component. Charitable status means an obligation to reach out to the community outside the school gates, offering bursaries to pupils from less affluent families and joining in partnerships with local education authorities.
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Increasingly, it seems that the key distinction in the provision of education outside the public maintained sector will be between the voluntary, charitable bodies and the commercial providers of education, such as the large Cognita company that has been established by the former Chief Inspector of Schools, Chris Woodhead, which are not charities and do not accept the constraints that charitable status brings. These private sector agencies must place the maximising of rewards for shareholders as their key objective. The two largest of these companies have recently raised several hundred million pounds to invest in what they see as a lucrative market. They can turn their backs on the ideas of bursaries for pupils from low-income households or of making available their facilities for children from other schools or of working in partnerships with the maintained sector. Indeed, I gather that Mr Woodhead is on record as saying that these bodies should not co-operate with the maintained sector. This breed of profit-making schools runs the danger of reinforcing a divisive segregation of education between richer and poorer, private and public, with a philosophy that "never the twain shall meet". They highlight the advantages of a third sector that embraces the obligations of charitable status.
Jonathan Shephard of the Independent Schools Council has said:
"There is the very serious point that charitable status underpins the social purpose of our schools and integrates them into society. There is a real risk that purely commercial schools will concentrate on fee-paying parents and ignore the local community".
Noble Lords should remember that all the capital assets, future capital gains and any surpluses achieved by charities are locked into charitable purposes in perpetuity. This is in stark contrast to the profit-making sector. Even opponents of independent schools would, I feel sure, prefer schools to be run by registered, regulated charities than by profit-making companies.
Clearly, in return for the concessions and status that independent schools obtain as charities, they must accept their wider social purposes. This is where the Charities Bill, and the Charity Commission, come in. Surveys indicate that the general public find it hard to understand why organisations that charge high fees for entry should obtain the benefits of a charity. The answer in the Bill is that the commission will make sure that these schools will indeed be providing public benefit, marking them out as different from commercial providers. This can no longer be a matter of reliance on past case law that deemed education in itself to be a charitable activity. That was spelt out in the concordat of understanding between the Home Office and the Charity Commission, reached as a result of the discussions in the Joint Committee. It stated:
"An organisation which wholly excluded poor people from any benefits, direct or indirect, would not be established nor operate for the public benefit and therefore would not be a charity".
Some of the schools in the independent sector might feel discomfort in satisfying the public benefit requirements, but—and not least—if popular perceptions are to be respected and, to quote the relevant
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Minister in the other place, public confidence in the "charity brand" is to be maintained, the Charity Commission must ensure that, true to its historic and traditional role, those schools accept the wider responsibilities that fully justify their relief from rates and taxes. Universities have been required to take access more seriously and to ensure that the obstacles facing those from families on lower incomes do not prevent them benefiting from higher education. If all the charitable independent schools follow the examples of the better schools in widening access and playing their part on the local education scene, their privileges as charities should be assured.
I conclude. This is excellent legislation which has already received a huge amount of detailed scrutiny. The potentially contentious subject of bodies with charitable status charging high fees, particularly schools, should not slow progress. Perhaps with a little tweak from the noble Lord, Lord Phillips of Sudbury, this ingredient in the Bill should be seen as important and helpful. In return for their privileges as a charity, these not-public, not-commercial schools will be held to account for their important responsibilities to wider society, thereby enhancing the reputation and the underlying value of charitable enterprise. I look forward to the safe and speedy passage of this important Bill through all its stages.
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Lord Wedderburn of Charlton: My Lords, this admirable Bill, much of which, as the noble Lord, Lord Phillips, said, is rather different from the previous Bill, may, like Caesar's Gaul, perhaps be described as falling into three parts. One part covers the new institutions, including the Charity Appeal Tribunal; other parts modernise the administration of charities, something that colleagues in the field have long sought. I shall address the first part of the Bill, which redefines "charitable purpose". It is the shortest part but is perhaps the most important for social policy.
The Government have set out, at last, for the first time, a list of charitable purposes that is longer than the Statute of Elizabeth of 1601. They have also taken the welcome step of requiring positive proof of public benefit, which will focus attention generally on such questions as the meaning of "the public" or maybe "a section of the public".
In such matters, any charities Bill necessarily places the independent Charity Commission—I join those who welcome a clear statement of its independence—right in the middle of policy of deep social importance, not least because, contrary to the suggestion of the Joint Committee in December 2004—I do not think that anybody has mentioned it—it was the Government's choice to retain as coterminous the boundaries of charitable purpose and tax advantage. That is the root of the problems that, for social purpose, charity law sets us. In thinking of that area, one hopes that access to the new tribunal will be by a flexible and easy procedure and will not be made too expensive.
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Two special issues of public policy, which have been mentioned by my noble friend Lord Borrie—I hope not to repeat exactly anything that he said—are, first, the issue of fee-paying institutions. Among them are schools of various kinds, as the noble Lord, Lord Best, reminds us, which in our idiosyncratic education system educate 7 per cent of pupils, with such dire effects on social cohesion in English society—and I emphasise the word "English". I shall leave that matter for later stages of the Bill, but there is a lot more to be said. The second issue is the purpose of the advancement of religion, which the Bill leaves without express mention of non-religious purposes or belief. Those are more than Committee points; they go to the heart of the Bill, seen in general terms in its impact on society—to what the noble Lord, Lord Dahrendorf, who is to follow me in this debate, called in our last debates the creative chaos that affects civil society so importantly.
I preface my four brief points by saying clearly that I have the utmost respect and amity for my many friends and colleagues who are devout followers of one religion or another. Indeed, I believe that some of the points that I am going to make will be shared by some occupants of Benches not too far in front of me. The definition of "religion" is clear in only one respect, as Lord Reid remarked judicially in 1949, in that it includes all religion. Exactly what is a religion is still undefined, except that in this Bill it is said to include belief in more than one god or in no god at all. In passing, I mention that the courts have always seen that religion must involve some form of worship.
The fact that no mention is made of non-religious belief, on a parity and equality with religious purposes, is something on which the British Humanist Association and the National Secular Society have in vain asked for reform for many years. As the Joint Committee pointed out, the Bill, as it stands, is not in conformity with our obligations under the European Convention on Human Rights or, therefore, our own Human Rights Act—or indeed, with many other international norms, from the UN International Covenant on Civil and Political Rights to various resolutions of the United Nations Assembly. Nor would it have been in conformity, for those who still hanker after it, with the Charter of Fundamental Rights in that famous treaty, which is now marcescent, which would have established freedom of thought, conscience, belief and religion as goals for the Union.
Our domestic legislation has also been modernised to include non-religious belief on a par, such as in the Communications Act 2003, the recent Employment Equality (Religion or Belief) Regulations 2003 and, now, the Equality Bill—a Bill that was introduced on the same day as the Charities Bill in your Lordships' House. That Bill makes illegal any requirement, condition or practice putting a person at a disadvantage on the grounds of religion or belief. With the two Bills coming on the same day, one wonders whether authority is not suffering from some strange schizophrenic dysfunction. We shall come to that matter in Committee, but it must be said immediately about the structure of this Bill as against that of the Equality Bill.
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This Government, like all governments that have addressed the point—in so far as they have addressed it—have said that in practice humanists and the like will suffer no disadvantage because their purposes will always be accepted as charitable under what has been called the "ragbag" clause. It is now called Clause 2(4), and it encompasses purposes which are,
a purpose expressly set out, such as religion. I hope that we can pass on from this argument, because that is no answer—for two reasons.
First, the National Secular Society and British Humanist Association have pointed out that non-religious groups have in the past encountered difficulty in registering. Secondly, and more seriously, the argument that non-religious belief need not be expressly protected is itself an infringement of human rights, leaving non-religious funds to the mercy of an uncertain "ragbag" clause, with the test of analogy with religion in particular. The adherents of the relevant societies aver that their beliefs are not analogous to religion, in the sense, as Professor Richard Dawkins has said, that they are not based on a religious belief, which may be said to rest on either revelation, tradition or authority. One might add that if non-religious beliefs are always to be included as analogous to religion—if we are given some Pepper v Hart assurance from the Minister on that—it would seem strange that that dark secret should not be expressly included in the Bill.
I do not believe that parliamentary draftsmen, adequately instructed, are unable in the exercise of their expert craft to supply a suitably deft word or phrase to that purpose in our flexible language. As the noble Lord, Lord Dahrendorf, is following me, I am not too happy to make this point now—but I shall: that is the answer to those who say that the English language contains no word or phrase equivalent to Weltanschauung.
My third point relates to the fact that the matter went further on 24 March, with the letter to which my noble friend Lord Borrie referred, which my noble friend the Minister kindly sent to us, with a copy put in the Library. It said that they had not found a way in which to incorporate a reference to belief that would not let in wholly irrational beliefs. But what the Government think is rational or irrational is neither here nor there. If it were, one might ask, with respect, whether the same test of irrationality or rationality was to be applied to other things, including religious beliefs. There are people I know who are very religious who would accept that some of the areas of their belief are not wholly rational. That is not a criticism but a statement. It is not a function of government to test irrational belief.
It was also suggested that the Charity Commissioners would be in an impossible position, because they would have to ask whether there was a,
That is correct—there is no definition of belief in common law, but Parliament trumps the common law and, when the common law falls unjustly on citizens,
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Parliament reforms it. That is what we do—that is why we are here, and that is what the Bill should do with regard to non-religious belief.
The British Humanist Association was also cited as touching on the proposition that the term belief will inevitably be given a careful scope here, because what is at stake is,
That is correct; the association referred to such a point—but it was part of the argument that it wished to be included, not excluded. The Government really cannot rely on that kind of argument.
So there is new ground to cover. The ground that was covered under the old Bill is now overtaken by the new formulations. As my noble friend Lord Borrie correctly pointed out, those include a new area in which the word "religion" is included.
I think that we can deal with the matter in Committee fairly quickly, but those who say that all the arguments were covered on the old Bill do not notice sufficiently that there are new provisions here and that new arguments are opened up, not least by my noble friend the Minister's letter. However, I believe that we shall have constructive discussions in Committee and that we will bring the Bill rapidly into accord—I hope—with human rights obligations, make the overall pattern of our laws into a rather less schizoid pattern, and release the Bill from what are in fact a number of antique assumptions; and then take it forward to assist those who actually and so importantly administer the charity area, for which I believe the Bill marks a major step forward.
5.50 pm
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