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The noble Lord said: My Lords, in moving Amendment No. 51, I shall speak also to Amendment No. 52. The Government have introduced a new Schedule ID. These useful amendments would allow the Charity Commission or the Attorney-General to refer matters to the tribunal in circumstances where a decision has not yet been reached if they consider that there is an issue of law or policy which warrants it. That, in turn, would entitle the tribunal to allow charity trustees or any other person likely to be affected to become parties to the proceedings.
I have come across this situation a number of times over the years. When considering an application for charitable status, the commission is put into a quandary over whether a particular application is or is not permissible under current charity law. With the advent of the tribunal and with this permissive power, I do not doubt some cases will avail themselves of the opportunity to have the tribunal answer a difficult question for them. That is the whole point. It could work unfairly for a charity pursuing an application for status if it found itself caught in the middle of a test case for a whole category of would-be charities. In those circumstances, an individual party would be affected. It would want to make representations because a particular case would also be its suit, albeit that it would represent the test for a category of similar potential cases.
If the Attorney-General throws his hat into the ring, that is fine. He will take up cudgels for the would-be applicant. But if he does not, the applicant would be drawn into what inevitably would be highly expensive legal proceedings. My amendmentAmendments Nos. 51 and 52 are essentially the same save that one applies to a reference made by the commission and the other by the Attorney-Generalwould give the tribunal the discretion to decide whether, in all the circumstances, it thought it fair and reasonable for part or all of the costs of the party involved to be paid by the commission or the Attorney-General. I hope that the amendments commend themselves and I beg to move Amendment No. 51.
Lord Bassam of Brighton: My Lords, as with proceedings under the tribunal's other two functions, appeals and reviews, we propose that in general each party should bear its own costs. The amendment of the noble Lord, Lord Phillips, would give the tribunal an extra power to order the Attorney-General or the commission, as the case may be, to pay the other
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party's costs. However, we do not think that that is necessary or desirable. Proceedings on references to the tribunal would generally not be adversarial since in essence the purpose would be to help to clarify the law where the commission has not yet made a decision. An affected person or charity wanting to have their own view of the law taken into account by the tribunal may join himself as a party and will be able to ensure that his view is put across to the tribunal. By choosing that route, the person or charity will not need to pay his own costs if he decides to do that. But he need not join himself as a party since either the Attorney-General or the commission represented, will not incur any costs in the proceedings, but will still have their view taken into consideration.
We do not think that this provision is necessary because it is covered. Simply to force an extra power on the Attorney-General, which would be the effect of the amendment, would not be a desirable end in itself.
The Minister said that the tribunal hearing would not be adversarial. That would depend on what he means. The argument will have two sides or it would not be brought before the tribunal. He went on to say that the commission will ensure that the would-be charity's view can be put across. But I have to say that that is an unsafe assumption. If the tribunal hears an argument in respect of what might be called a frontier charity, it is more helpful if it is able to hear from the parties on both sides of the argument rather than to expect one advocate to present both sides; that is, I believe that the tribunal proceedings themselves would be diminished in their effectiveness unless the traditional two sides of the argument are presented. That need not be adversarial. It can be an exploratory hearing.
Finally, the Minister said that my amendment would force the Attorney-General. It would not force anyone to do anything, rather it is merely a discretion for the tribunal, in the particular circumstances, to come to the aid of the party that finds itself in the middle of a fascinating but extremely expensive case. I am disappointed that the Minister will not concede and accept the amendment at this stage. I would be grateful if he would read my response with a view conceivably to coming back with something at Third Reading. For the moment, however, I beg leave to withdraw the amendment.
The noble Lord said: My Lords, the amendment concerns the minimum level of annual income at which charities are required to register with the commission. We have debated this previously, but I make no apology for returning to the important topic of deregulation and reducing the regulatory burden. However, given that it has been debated previously, I shall be as brief as possible.
Simply put, the amendment would increase the level of annual income at which charities must register with the commission from £5,000 to £10,000. I make it clear that this does not prevent any charity, of whatever size, applying to be registered. The Governmentagain, I thank the Ministerkindly accepted my earlier amendment which stated that any charity may apply to be registered and the commission must accept that application, which was not previously the case. So it is notI repeat, nota question of smaller charities being unable to register and, because they have no charity number, being precluded from receiving funding from many bodies in both the public and private sectors which will give grants only to charities which are registered.
On the contrary, my amendment would reduce the regulatory burden for both charities and the Charity Commission. If a charity has an annual income of, let us say, £7,500, this would imply capital assets of probably less than £200,000perhaps £150,000but such a charity would have to register under this Bill as it presently stands. I understand, indeed I support, the Government's wish to maintain confidence in the charity sector, but small charities of the type that I have just given as an example do not offer any systemic risk or threat to public confidence. If a charity with an annual income of less than £10,000 does not want to register, why should it? The risk-reward ratio and the regulatory burden implied by the Bill as drafted are out of kilter. Even the original report by the Strategy Unit on which much of this Bill was based recommended a figure of £10,000 as being that at which registration should take place. It felt that that was the appropriate level and I see no reason to disagree with it.
Noble Lords on all sides of the House, including those on the government Front Bench, are inclined to talk on and on about the need to decrease the regulatory burden, but too often, when we have a practical opportunity to do it, we shy away. I hope the Minister will not fall back on the argument that my amendment is superfluous because there is going to be a review of all thresholds 12 months after Royal Assent. This is a matter which needs action now. I beg to move.
Lord Phillips of Sudbury: My Lords, it is with some diffidence that I oppose the noble Lord, Lord Hodgson, because he puts the case strongly and well, and we all genuinely want to diminish the bureaucratic burden on smaller charities. My reason for not being convinced by his case is very simple. There is the issue
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of bureaucracy and regulation; there is the issue of probity of charities in the sector. I did not agree with the noble Lord when he said that there was no systemic risk. I do not know why he said that or on what basis. If you are talking about an income of £10,000 a year, that could mean a capital base of £200,000, which is significant money. In fact, there is more prospect of the very rare amount of fraud that takes place in the charity sector among small charities than among large charities. Assets of £200,000 are very significant. In my balance between probity and regulation, I think that I am more satisfied, or assuaged, by the £5,000 limit rather than the £10,000 limit. For that reason, I am not persuaded by what the noble Lord has said.
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