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Lord Swinfen: My Lords, I would briefly like to support the amendment moved by my noble friend Lord Hodgson of Astley Abbots. Lines 41 and 42 of page 77 bring a non-governmental body directly under the political control of the government of the day. That is wrong and I strongly support what my noble friend said.

Lord Mackay of Clashfern: My Lords, I want to say a word about the Minister's response on the last occasion. Either it means that the Minister for the Civil Service is not going to implement what this Bill proposes, if it is passed in its present form, or it means that the words of the proposed statute have no meaning at all. It says in plain terms that it,

so all the terms and conditions of service must be approved by the Minister for the Civil Service. If words mean anything, that is what these words mean. The Minister's explanation is as clearly inconsistent with that as can be demonstrated. Therefore either this should be amended, or the Minister is telling us that the Government in future intend to ignore the terms of their own legislation.

Lord Bassam of Brighton: My Lords, we have had some healthy debates about the independence of the Charity Commission. As was made clear a few minutes ago, we had debate on that very provision in Committee, but our thinking has not changed. The Bill preserves the Charity Commission's status as a non-ministerial government department, and this provision flows from that.

The Charity Commission already has delegated authority on behalf of the Minister for the Civil Service to determine the number and grading of posts—with the exception of senior civil servants—and the terms and conditions of employment. That is in so far as they relate to the classification of staff—with the exception of those in the senior Civil Service—and
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remuneration, with the same exception, although here there is very broad scope for discretion. It also relates to allowances, expenses, holidays, hours of work and attendance, part-time and other working arrangements, performance, promotions, retirement age—again, with the exception of the senior Civil Service—redundancy, and the re-deployment of staff within the Home Civil Service.

All those things are delegated in terms of authority to the Charity Commission. The commission, along with other non-ministerial government departments, has already delegated authority to determine the terms and conditions of its staff without referral to the Minister. That means that the commission is required only to agree the overall pay remit with the Treasury and to employ the right mix of staff to deliver its objectives. As with other departments, the commission would require approval of the broad framework within which it can take detailed decisions on terms and conditions of service. It is a broad approval. That has worked extremely well, and the commission has made good use of that significant flexibility and independence to recruit and retain good-quality staff.

Paragraph 5(3) of Schedule 1 brings members of staff of the commission within the Home Civil Service. It is a common provision in other legislation that establishes non-ministerial government departments, and works well with, for example, the Commissioners for Revenue and Customs Act 2005, the Food Standards Act 1999 or the Land Registration Act 2002. They all do the same for their staff.

The amendment would require the staff of the commission to be reclassified outside the Home Civil Service. That is the effect of the amendments in this group. I ask noble Lords opposite to think about that extremely carefully. That would create problems with such staff transferring to and from other departments, and it could affect their career options. It could also seriously affect the pension position of staff. The Government have decided that the most appropriate status for the commission remains that of a non-ministerial department—not least because no suitable alternative had been identified from other quarters. It works well for the Revenue, and in food standards and land registration.

However, as I said in Committee, Clause 70 gives us the opportunity for the commission's status to be considered as part of a review of the impact of the legislation. I made that clear the last time we debated this. A person must be appointed to carry out the review within five years of the Bill receiving Royal Assent, and a copy of the report produced as a result of the review must be laid before Parliament. It may well be that as a result of that review some alternative status for the Charity Commission can be identified. We remain of the view that, for as long as it remains a non-ministerial department staffed by civil servants, it is essential that the Government retain some broad control of staff terms and conditions of service. That is exactly what I set out earlier in my explanation.

If noble Lords opposite are tempted to press the amendment, they need to take careful cognisance of what I said, particularly about the impact on staff and
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their classification and career opportunities. They also need to take careful account of the impact that it would have more broadly. This is a dangerous amendment; we cannot support it. I urge noble Lords who are tempted to support it to rethink their position.

I ask this important question—have noble Lords who are considering pressing the amendment given any thought at all to consulting with those it might affect? If they did, they would find that those staff might find it increasingly difficult to live with. It is not the purpose for which they entered their current employment. To be transferred in a way that the amendment might suggest could have very serious consequences indeed.

Lord Hodgson of Astley Abbotts: My Lords, I am grateful to the Minister. As ever, he put his case forcefully. I am grateful to my noble friend Lord Swinfen for his support, and in particular to my noble and learned friend Lord Mackay of Clashfern. He put his finger on it directly. The Minister talks about a broad approach and broad control, but paragraph 5(3) of Schedule 1 is not about broad approach and broad control. It is about specific approach and specific control. It is about other staff requiring,

I do not accept that that is the proper argument or an argument with foundation.

The Minister also raised the question of pensions, and we have been around that track before. One of our early amendments, with which the Government were equally unhappy, dealt with pensions. The Government were not happy about that then, and certainly that provision could easily be reinserted to address the pension issue. We should not allow the pension position to drag us away from the central issue this afternoon, which is that we want to see the Charity Commission properly independent. The Minister accepts that this is important—we were agreeing on it in the earlier amendment—but he has not provided us with an adequate answer.

I understand that my amendment is too direct. What the noble Lord, Lord Phillips, has tabled is considerably more silky, and attacks the one remaining plank in the Minister's argument. I will therefore withdraw my amendment, but I hope the noble Lord will have a more robust approach. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.30 pm

Lord Phillips of Sudbury moved Amendment No. 10:

Page 77, line 41, leave out from "appointment" to end of line 42 and insert "and retention of other staff must as regards remuneration be within the total remuneration budget agreed annually with the Treasury"

The noble Lord said: My Lords, I thank the Minister. The key to what he said was that the state of affairs both these amendments want to bring about—
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the independence of the Charity Commission with regard to terms and conditions of staff below commissioner and very senior level—is, at the moment, by grace and favour of a delegation made by the Minister. That delegation could be withdrawn at any time. The Minister may pucker his handsome face, but that will not do, because things change. Ministers change, policies changes, and the relationship between the Minister and the commission may get extremely raggedy in the future.

The Minister made a serious point, with a degree of tentativeness, about what this would do to the status of the employees. I am sure I speak for the noble Lord, Lord Hodgson, as well as myself in saying that, if that is the case, we would accept without demur an amendment at the final stage of this Bill that made it clear that the status of employees was unchanged by this amendment. That could easily be done. I beg to move.

Lord Bassam of Brighton: My Lords, I am loath to get up, but the amendment covers more than just the pension issue. I thought the noble Lord, Lord Hodgson, was rather skirting around the broader issue. We have accepted in earlier debates that we have established a great measure of independence here, and it is wrong of the noble Lord, Lord Phillips, to suggest that this is by grace and favour of a Minister. It is established practice, not just with the Charity Commission, but with the other non-ministerial government bodies. This is a tried and tested mode of operation. The noble Lord seeks to upset that and a lot more, relating to staff terms and conditions, pensions and so on. Before taking that step, he should retreat and think seriously about what he is achieving here.

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