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Lord Smith of Clifton: My Lords, it is a pleasure to take part in the winding-up of this debate because there is such a widespread degree of consensus. I thank the noble Baroness, Lady Scotland, for her lucid
 
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introduction to the Second Reading. I must declare my interest as shown on the register. I am a trustee of the Stroke Association and of the Joseph Rowntree Social Services Charitable Trust among others.

The Bill has received a general welcome because it is much improved as a result of the work of officials during the election Recess. It shows that you cannot have enough legislative scrutiny. When this Bill becomes an Act it will be held up as a model for the preparation of legislation. It has been welcomed because it introduces a much greater degree of flexibility, lighter regulation and has a greater appreciation of the needs of smaller charities which, as my noble friend Lord Phillips of Sudbury said, constitute the overwhelming majority. I think that I recall him saying that 97 per cent of all charities are small.

There remain some concerns. The noble Lord, Lord Sainsbury of Preston Candover, pointed to the excesses of the SORP accountancy regulations and said that charities are required to adhere to more than 400 of them. That surely must be overkill. He also first mentioned what became a recurring theme in the debate; that is, the independence of the Charity Commission. He suggested that it might become a non-governmental public body, much freer from any possible departmental influence. That theme was echoed by others.

The noble Lord, Lord Borrie, raised a theme that was echoed in particular by the noble Lord, Lord Wedderburn, that is, the definition of "religion" and provision for non-religious belief. I believe that we shall return to that issue in Committee. As the noble Lord, Lord Wedderburn, said, it is not beyond the wit of human kind to have a definition that encompasses both religious belief and non-belief for charitable purposes.

The noble Lord, Lord Swinfen, was particularly forceful in making his views on the role of the Charity Commission known; that is, that much further clarification of its regulatory role is needed. He and others want among other things better provision for protecting charities' funds from the costs of regulation and a much lighter touch on the part of the Charity Commission so that charitable funds are not used by charities to defend their actions. He echoed the words of the noble Lord, Lord Sainsbury of Preston Candover, regarding a more independent basis for the Charity Commission than the Bill currently allows for.

The noble Baroness, Lady Howe, echoed the words of the noble Lord, Lord Swinfen, in wanting the words "fairly and reasonably" to be added to "proportionate" as a direction to the commission. That was taken up by the noble Baroness, Lady McIntosh.

My noble friend Lady Barker spoke from her very extensive experience in the charity sector. I was much taken by her suggestion that the commission could be helped in its work by the appointment of a users' panel to act as a sounding board for its actions.

The noble Lord, Lord Best, who I have had the pleasure of knowing over many years in connection with the Rowntree Trust family, pointed to the
 
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inevitable tension between independence and regulation and the associated problem of compliance and co-option by charities that are in receipt of public funds. That is really part of what the noble Lord, Lord Dahrendorf, called the virtue of civil society, that it has this creative chaos. There is a real problem, which the noble Lord, Lord Best, pointed to, where that relationship in partnership ends and independence is maintained. It is difficult to manage that tension without losing the ultimate independence of the charitable sector and of the particular charity concerned. It is too easily co-opted into an adjunct of the welfare state; that must be avoided at all costs.

The noble Lord, Lord Wedderburn, concentrated on the redefinition of charitable purposes and on public benefit. In particular, he expressed his disbelief, which I share, that it does not seem to be possible to have parity for disbelief along with belief. Furthermore, he pointed out that new aspects of the Bill needed closer examination and scrutiny in Committee.

Public benefit, along with the greater independence of the Charity Commission, will be the two main themes that we will return to in Committee. I am sure that in winding up the Minister will be able to give us some pointers to how the Government might respond to the comments that surround those two themes that have been raised in this debate.

6.11 pm

Baroness Seccombe: My Lords, it is with pleasure that I rise to say just a few words at the end of this Second Reading debate. In the past, I have been involved with many charities but at the moment, as stated in the Register of Interests, I am president of the governors of Saint Martin's School, Solihull, an independent girls' school where I was a pupil many years ago.

I begin by congratulating and applauding my noble friend Lord Hodgson of Astley Abbotts and other noble Lords including the noble Lord, Lord Phillips of Sudbury, on the assiduous and highly effective work that they have done on the Bill since its gestation in December last year and throughout the painstaking scrutiny of eight long Grand Committee sessions in the spring. It is a splendid example of the constructive cross-party work for which this House is renowned that the Government took up so many of the suggestions made in amendments in Grand Committee; the Bill that we have before us is stronger and better for it.

I echo my noble friend and other noble Lords who have spoken so eloquently today when I say that we are, with a few caveats, pleased with the new Bill. As the Bill goes through this House we must continue to question whether it serves the charitable sector to the best of its ability. Our charitable and not-for-profit sector is, as we all know, a thriving and vital part of our society. It is also a diverse sector. We need to make sure that the mechanics of this legislation serve big and small, grant-giving and grant-receiving charities equally well. For that reason, we will continue to invite
 
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responses from charities and organisations during the passage of the Bill and to scrutinise the final detail. As the speeches of noble Lords today have shown, there is always room for improvement. However, I feel confident enough to say that we seem to be in the happy position of having reached a broad consensus on this Bill, both in the House and among outside bodies. I therefore look forward to the swift passage of the Bill through the Lords and into the Commons. It is in the interests of all those organisations that have awaited the Bill with keen and mounting anticipation for this legislation to make its way onto the statute book as soon as possible.

It is sad that the Bill was introduced too late for that to have been achieved in the previous Session, but I hope that that will be remedied on this occasion. We wait with interest to see the positive impact that the changes introduced are sure to make on the sector as a whole. In that spirit, we on these Benches welcome the Bill.

6.14 pm

Lord Bassam of Brighton: My Lords, I have listened with more than usual interest to this afternoon's deliberations on the Bill, and I have been most impressed, as I was last time, with the breadth of contributions.

Before I get into the meat of my response, I put on record my sadness at the passing of Lady Blatch. She was a doughty performer at the Dispatch Box, someone who engendered respect, who always put her point of view forcefully and who researched her position with great integrity. She did not always please everyone on all sides of your Lordships' House, with the strength of her commentary and her observation. We in politics miss Lady Blatch, and we mourn her passing for very good reason. She was a public servant, and she acted in what she rightly believed to be the public interest at all times. We regret her passing for that and for many other more personal reasons.

When I was musing over what the shape of the debate might be this afternoon, I thought that there was some risk of a déjà-vu Second Reading being somewhat dull. Having listened to the last three or so hours of debate, your Lordships' House has, as ever, frustrated that potential, because it has been a most enlivening and broad debate. It bodes well for what everyone hopes will be a swift but fair consideration of the Bill in Committee. There have been many words of praise for the Bill this afternoon, more than there were last time. That is because the Bill has improved since we first set about the task in Committee earlier this year of looking in detail at the Bill and its contents.

The noble Lord, Lord Best, described it as "an excellent Bill". The noble Lord, Lord Wedderburn, described it as "an admirable Bill". The noble Baroness, Lady Pitkeathley, said that we should "celebrate its improvement", and so it went on. The noble Baroness, Lady Seccombe, said that it was a "stronger and better Bill" for being produced in the way in which it has been. I have no doubt that all those comments are absolutely true. It was described as a "nearly there Bill" and a "one
 
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more heave Bill". The noble Lord, Lord Hodgson, was probably closest in his kind words because we are just one more heave away from getting what we all want.

The debate took some expected turns. We had a great deal of consideration of the public benefit test, which is right, and that will clearly be an important debate in the later stages. The noble Lord, Lord Phillips, gave full voice to that. The noble Lord, Lord Sainsbury of Preston Candover, rightly focused, as he did before, on the burden of regulation and the importance of there being an effective and businesslike review when the Bill is reviewed. He made a particularly good case for that. The noble and gallant Lord, Lord Craig of Radley, as one would expect, focused on the service non-public fund charities and their status and the importance of recognising them. Clearly, that will be an issue.

The issue of religious definition was raised from a humanist perspective by the noble Lord, Lord Wedderburn, and from a broader view by the noble Lord, Lord Borrie. We had a trenchant and carefully argued analysis of the Charity Commission and its doings and wrongdoings from the perspective of the noble Lord, Lord Swinfen. The noble Baroness, Lady McIntosh of Hudnall, was right to say that we ought to look more broadly at the impact of the public benefit test so far as the arts and the cultural sector are concerned and ensure that our debates and concerns there are broadened rather than narrowed in Committee. The right reverend Prelate the Bishop of Southwell raised, as we would expect, the concerns of religious charities—particularly the smaller ones—and the regulatory burden that the Bill places on them.

I was delighted, too, that the noble Baroness, Lady Pitkeathley, raised the importance of philanthropy and generating more public support and interest in it. That was very helpful.

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