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The noble Lord said: My Lords, this is a minor tidying-up amendment which has been recommended by the draftsman. I could give further explanation, but I hope that that will not be necessary. If noble Lords want to question me on it, of course they are entitled to. I beg to move.

Lord Craig of Radley: My Lords, perhaps the Minister will explain why Clause 6 contains so many references to the Charity Commission for England and Wales, yet we are removing it from this schedule.

Lord Bassam of Brighton: My Lords, it is merely a tidying-up issue. It is for simplicity and ease of understanding.

On Question, amendment agreed to.

Lord Bassam of Brighton moved Amendment No. 12:

Page 82, line 18, at end insert—

"Resource accounts of Commission

(1) The new Commission and the old Commission shall be treated as being the same government department for the purposes of section 5 of the Government Resources and Accounts Act 2000 (c. 20).
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(2) Resource accounts sent to the Comptroller and Auditor General by the new Commission in respect of any period before commencement shall be resource accounts in the name of the new Commission.
(3) In this paragraph—
"the new Commission" means the Charity Commission established by section 6, and
"the old Commission" means the government department known as the Charity Commission and existing immediately before commencement."

The noble Lord said: My Lords, the Bill abolishes the office of the Charity Commissioners—an unincorporated body—and establishes a corporate body, the Charity Commission. The Charity Commissioners would be regarded as a different government department from the Charity Commission, although in practice what would have taken place is essentially a change of form of a single department. This amendment will enable the commission to prepare a single set of accounts for the financial year in which the Charity Commission is established. I beg to move.

On Question, amendment agreed to.

Clause 7 [The Commission's objectives, general functions and duties]:

Lord Swinfen moved Amendment No. 13:

Page 7, line 20, after "its" insert "regulatory"

The noble Lord said: My Lords, in moving Amendment No. 13 I shall speak also to Amendment Nos. 14 and 15. The purpose of these amendments is to require the commission to act fairly and reasonably, as well as in accordance with the best principles of regulatory practice, by placing a specific statutory duty upon the commission so to act, in order to provide clarity in charity law for the benefit of charity people, the charity appeal tribunal and the courts.

The requirement for the insertion of,

on page 7, line 25, had much support in previous stages of the Bill in the House, and follows the recommendation of the joint parliamentary committee reporting on the draft Bill last year. Many noble Lords, like me, believe these words need to be placed on the face of the Bill because the commission has not always behaved in that way. I have given numerous examples of these in past stages of the Bill, which I hope it is not necessary to repeat.

The Minister's objection to the insertion of these words appears to be that administrative law already requires all government bodies to behave fairly and reasonably. But, in the Little Gidding Trust case, the high court specifically refused to consider whether the commission had behaved fairly and reasonably in making orders that were the subject of trustee appeals brought on grounds that the commission had not acted fairly and reasonably, but with bias, in the making of these orders. They are now case law and so will be followed in future cases.
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Had there been a statutory duty on the commission to exercise its powers fairly and reasonably the courts would have been compelled to have full regard to such duty. This ruling now forms part of charity case law and is therefore of the greatest importance. I believe that, so far as charity law is concerned, the phrase "fair and reasonable" should appear on the Bill. The charity sector is founded on a bedrock of decency and morality, and surely has reason to expect a standard of regulation enshrined in statute, which places a specific requirement upon the commission, as regulator, to act fairly and reasonably.

In Committee, the noble Lord, Lord Dahrendorf, said:

I am grateful to him for those words on that occasion; I hope that he will repeat them this evening. I beg to move.

Lord Hodgson of Astley Abbotts: My Lords, I support my noble friend's amendments in part. Amendment No. 14 with the proposal to leave out the words "so far as relevant" in new Section 1D(2)4 of Clause 7 seems appropriate. These words—I describe them as weasel words—seem unnecessary and provide an opportunity for people to avoid the principles laid out in that new section, so I have a great deal of sympathy with my noble friend's amendment.

The issue of Amendment No. 13 in inserting the word "regulatory" in the first line of new Section 1D(2)4 before the word "functions" seems less strong as the commission ought to have regard to the principles of best practice in all its functions, not just the regulatory ones. There are a number of functions it carries out, in particular the provision of advice, which it ought to consider, and in the light of the provisions of new Section 1D(2)4. So I am less happy about that.

As regards Amendment No. 15, I was interested to hear my noble friend's comments that the court was not able to take into account the fairness and reasonableness of the actions of the commission and that he believes that inserting these words would strengthen the position vis-à-vis the court. It originally occurred to me that maybe this was redundant given the pretty extensive provisions of new Section 1D(2)4, which contains the phrase:

Therefore the addition of the words "fair and reasonable" was maybe superfluous. However, I feel that Amendment No. 14 has a great deal to commend it and I am pleased to support it.

Lord Dahrendorf: My Lords, it is almost embarrassing to rise again in defence of two little words. I say "almost embarrassing"; I would find it truly embarrassing if I had to rise and attack these two
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little words, or not accept them, in the Bill. Fortunately that is not my position. I shall speak only to Amendment No. 15.

My position is that I find it perfectly possible to accept the Government's arguments as set out in a letter which the Minister sent to me and others on 11 July 2005, and yet believe that it would make sense to include the words "fair and reasonable", because I ask myself one simple question: whose perception matters most in this regard? In my view what matters most is the perception of charities and their trustees and supporters, and notably of smaller charities. If they feel—and they do feel—that it would help them to have the support of the law by the inclusion of the words "fair and reasonable" then I cannot see any overriding argument not to do so. I would regret it very much if we did not manage or make it possible at this late hour—late not in terms of the day today, but in terms of the debate of this legislation—to make this step towards the understandable perceptions of especially smaller charities. I support the amendment.

Baroness Howe of Idlicote: My Lords, I rise also fairly briefly to support the amendment of the noble Lord, Lord Swinfen. I did so on at least two other occasions, I think, when this Bill was previously before us, and I failed to understand the reason why "fair and reasonable" could not have been added earlier. There are real concerns which have been enumerated on many occasions by the Association for Charities about some of their members and the way they were dealt with. The amendment would be in everybody's interest.

We have just agreed to Amendment No. 10 which assures greater independence for charities, which is absolutely fair. We want greater independence; we want to stress that they are independent, but with independence comes perhaps a greater degree of accountability as well. We know that the NCVO also supports this amendment. It would be perfectly fair now for the Minister to agree that the words "fair and reasonable" be added.

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